These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. GENERAL Keong Hong Holdings Limited (the “Company”) (Registration Number: 200807303W) is a limited liability company incorporated and domiciled in Singapore and is listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The registered office and principal place of business of the Company is located at 9 Sungei Kadut Street 2, Singapore 729230. The principal activity of the Company is that of investment holding. The principal activities of the respective subsidiaries and associate are disclosed in Notes 13 and 14 to the financial statements. The immediate holding company is LJHB Capital (S) Pte Ltd (“LJHB Capital”), a wholly-owned subsidiary of Forevertrust International (S) Pte. Ltd. (“Forevertrust”) which is, in turn, a wholly-owned subsidiary of LJHB Holdings (S) Pte. Ltd. (“LJHB Holdings”). The ultimate controlling party is Ms. Liu Haiyan who wholly owns LJHB Holdings. The statement of financial position of Company as at 30 September 2024 and the consolidated financial statements of the Company and its subsidiaries (the “Group”) and statement of changes in equity of the Company for the financial year ended 30 September 2024 were authorised for issue in accordance with a Directors’ resolution on the date of Directors’ Statements. 2. SUMMARY OF MATERIAL ACCOUNTING POLICIES 2.1 Basis of preparation The financial statements of the Group, and the statement of financial position and statement of changes in equity of the Company have been drawn up in accordance with the provisions of the Singapore Companies Act 1967 and Singapore Financial Reporting Standards (International) (“SFRS(I)s”) including related Interpretations of SFRS(I) (“SFRS(I)s INT”) and are prepared on the historical cost basis, except as disclosed in the accounting policies below. The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The financial statements of the Group and the statement of financial position and the statement of changes in equity of the Company are presented in Singapore dollar (“$”) which is also the functional currency of the Company, and all values presented are rounded to the nearest thousand (“’$’000”), unless otherwise indicated. In the current year, the Group has adopted all the new and revised SFRS(I)s and SFRS(I)s INT that are relevant to its operations and effective for annual periods beginning on or after 1 October 2023. The adoption of these new or revised SFRS(I)s and SFRS(I)s INT did not result in changes to the Group’s and Company’s accounting policies, and has no material effect on the current or prior year’s financial statement and is not expected to have a material effect on future periods. Going concern The Group has faced delays in its construction projects since the COVID-19 outbreak. For the financial year ended 30 September 2024, the Group incurred net loss of $3,916,000 (2023: $50,648,000). These conditions may cast significant doubt on the Group’s abilities to continue as a going concern. In assessing the appropriateness of the going concern assumptions of the Group, the Directors are of the view that the use of going concern assumptions to prepare the consolidated financial statements is appropriate based on the following factors: (a) On 19 February 2025, the Group entered into a share purchase agreement with MCSK Pte. Ltd. (“Purchaser”) for the disposal of 20% of its ordinary shares in KHPL. The total consideration for the sale transaction is $34,500,000, which will be disbursed in 3 instalments over the 18 months from the completion date. This cash inflow is expected to enhance the Group’s liquidity position by strengthening its cash position over the next 18 months from the reporting date. (b) Achieving the forecasted operating cashflows from the Group’s core business comprising but not limited to improvement of the profit margin by streamlining the business operations, timeliness in the completion of the construction projects, and improved liquidity management. The Group adopted the amendments to SFRS(I) 1-1 and SFRS(I) Practice Statement 2: Disclosure of Accounting Policies in the current financial year. The amendments require the disclosure of “material” instead of “significant” accounting policy information and provides guidance to assist the entity in providing useful, entity-specific accounting policy information for the users’ understanding of the financial statements. Accordingly, management had reviewed the accounting policies and updated the information disclosed in Note 2 Summary of material accounting policies in line with the amendments. 67 ANNUAL REPORT 2024 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2024
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