Uplifting Potential Growth Annual Report 2021
CORPORATE VALUES K Knowledge I Integrity M Moral L Leadership U Unity N Novelty Kimlun Group is an engineering and construction services provider specialising in infrastructure and building construction, project management, industrial building systems (IBS) and manufacture of concrete products. Ancillary to our core business, we also involve in property development and trading in construction and building materials. We have the ability to act as a one-stop engineering services provider, capable of providing a comprehensive and integrated range of concrete products and engineering and construction services to our customers.
CON T E N T S O u r M i s s i o n O u r V i s i o n ANNUAL REPORT 2021 Corporate Information 2 Corporate Structure 3 Corporate Milestones 4 Profile of Directors 6 Group Financial Highlights 10 Chairman’s Statement 11 Management Discussion and Analysis 14 Sustainability Statement 26 Corporate Governance Overview Statement 36 Additional Compliance Information Disclosures 48 Audit Committee Report 51 Statement on Risk Management and Internal Control 54 Statement on Directors’ Responsibility 59 FINANCIAL STATEMENTS 60 Analysis of Shareholdings 170 Analysis of Warrant Holdings 172 List of Properties 174 Notice of Thirteenth (13th) Annual General Meeting 176 Statement Accompanying Notice of Annual General Meeting 184 Administrative Guide for the 13th Annual General Meeting 185 Proxy Form “We aim to continuously improve, promote and provide construction activities and services to the society at which we operate. By providing one stop construction design and build services, we aim to add value to our clients that in turn will be beneficial to the society at large. Wewill treat all partners including suppliers, subcontractors and consultants with trust, honesty and fairness in all business dealings. Towards our employees, we balance our focus on their personal skills development while taking care of their welfare. While seeking for the maximization of shareholders’ wealth, we strive to maintain harmony with the interest of the society to enhance our corporation’s sustainability”. “We aspire to be a reliable, innovative and profitable full range construction services and products provider in the South East Asia region” Scan here
CORPORATE INFORMATION AUDIT COMMITTEE Chairperson • Anita Chew Cheng Im Independent Non-Executive Director Members • Datuk Woon See Chin Independent Non-Executive Director • Bhupendar Singh A/L Sewa Singh Independent Non-Executive Director • Dato’ Ir. Fong Tian Yong Independent Non-Executive Director REMUNERATION COMMITTEE Chairman • Datuk Woon See Chin Independent Non-Executive Director Members • Johar Salim Bin Yahaya Independent Non-Executive Director • Dato’ Ir. Fong Tian Yong Independent Non-Executive Director NOMINATION COMMITTEE Chairman • Johar Salim Bin Yahaya Independent Non-Executive Director Members • Anita Chew Cheng Im Independent Non-Executive Director • Bhupendar Singh A/L Sewa Singh Independent Non-Executive Director COMPANY SECRETARIES Wong Peir Chyun (MAICSA 7018710)(SSM PC No. 202008001742) Tay Lee Shya (MIA 16982)(SSM PC No. 202008002274) Yeng Shi Mei (MAICSA 7059759)(SSM PC No. 202008001282) HEAD OFFICE Suite 19.06, Level 19, Johor Bahru City Square, 106-108, Jalan Wong Ah Fook, 80000 Johor Bahru, Johor Darul Takzim Telephone No. : (+607) 222 8080 Facsimile No. : (+607) 223 8282 E-mail : info@kimlun.com Web-site : www.kimlun.com REGISTRAR Tricor Investor & Issuing House Services Sdn. Bhd. Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur Telephone No. : (+603) 2783 9299 Facsimile No. : (+603) 2783 9222 Pang Tin @ Pang Yon Tin Executive Chairman Sim Tian Liang Chief Executive Officer and Executive Director Chin Lian Hing Executive Director Yam Tai Fong Executive Director Pang Khang Hau Executive Director Datuk Woon See Chin Independent Non-Executive Director Johar Salim Bin Yahaya Independent Non-Executive Director (Appointed on 1 December 2021) Anita Chew Cheng Im Independent Non-Executive Director (Appointed on 1 December 2021) Bhupendar Singh A/L Sewa Singh Independent Non-Executive Director (Appointed on 1 December 2021) Dato’ Ir. Fong Tian Yong Independent Non-Executive Director (Appointed on 1 December 2021) REGISTERED OFFICE Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur Telephone No. : (+603) 2783 9191 Facsimile No. : (+603) 2783 9111 AUDITOR Crowe Malaysia PLT 201906000005 (LLP0018817-LCA) & AF 1018 E-2-3 Pusat Komersial Bayu Tasek, Persiaran Southkey 1, Kota Southkey, 80150 Johor Bahru, Johor Darul Takzim Telephone No. : (+607) 288 6627 Facsimile No. : (+607) 338 4627 BOARD OF DIRECTORS Annual Repor t 2021 2
CORPORATE STRUCTURE Kimlun Sdn Bhd Zecon Kimlun Consortium Sdn Bhd Kimlun Medini Sdn Bhd Posh Atlantic Sdn Bhd Rock Projects Sdn Bhd Kii Melodia Sdn Bhd Bayu Damai Sdn Bhd Kimlun Superior Crest Sdn Bhd Kitaran Lintas Sdn Bhd Kii Ashbury Sdn Bhd Pinegate Development Sdn Bhd JBB Kimlun Sdn Bhd Kiiville Sdn Bhd Rex Series Sdn Bhd Kii Morris Sdn Bhd Kimlun Land Sdn Bhd Kii Amber Sdn Bhd KL Building Materials Sdn Bhd I-Buildtech Solutions Pte Ltd SPC Industries Sdn Bhd 100% 30% 51% 51% 69.50% 49% 60% 100% 100% 100% 40% 100% 60% 100% 100% 100% 100% 100% 100% 100% 33% 67% K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 3
CORPORATE MILESTONES 2015 • KimlunCorporationBerhadincorporatedawholly-ownedsubsidiary, KLBuildingMaterialsSdnBhd(“KBMSB”).TheprincipalactivitiesofKBMSB aremanufacturingandtradingofbuildingandconstructionmaterials, andprovisionof quarry servicesandmachinery rental services. 2016 • Kimlun Group’s 30% owned joint venture company, Zecon Kimlun ConsortiumSdnBhd,wasawardedaworkpackagecontract for the ProposedDevelopmentandUpgradingof thePanBorneoHighway in Sarawak foracontract sumofRM1.46billion. Thissignifies theGroup’s geographical diversification to East Malaysia, and expansion of its construction services to highway project. The Project is the single largest contract which theGroupwon in its history. • SPCwonSBGandtunnel liningsegmentssupplycontracts inrelation toProjekMass RapidTransit LembahKelang: JajaranSungai BulohPutrajaya Line, withaggregate contract valueof RM252million. 2006 • KLSB secured specialised infrastructure constructionproject for theupgradingworksof the Perling Interchange in Johor Bahru. 2007 • KLSB was accredited the “ISO 9001:2000, Quality Management System” certification. 2008 • KLSB secured the project for the construction of the elevated interchange along Johor Bahru Inner Ring Road – Package 3B Jalan Abu Bakar Interchange with a contract value exceeding RM100million. • KLSB formed IBS Department to promoteIBSconstructionmethods. • I-Buildtech Solutions Pte Ltd (“IBT”) was incorporated in Singapore. 2020 • KLSB successfully registeredwith CIDB for additional specialization toconstruct hospital building. • KimlunCorporationBerhadincorporatedawholly-ownedsubsidiary, Kii Amber Sdn Bhd (“KABSB”). The principal activities of KABSB are investment holding, property investment anddevelopment. • KABSB subscribed for 49% equity interest in Bayu Damai Sdn Bhd (“BDSB”). Theprincipal activities of BDSB is property development. • KABSB incorporateda69.50%ownedsubsidiary, KiiMelodiaSdnBhd (“KMLDSB”). TheprincipalactivitiesofKMLDSBareproperty investment andproperty development. 2017 • KLSB subscribed for 40% equity interest in JBB Kimlun Sdn Bhd (“JKSB”). The principal activity of JKSB isbuildingandinfrastructure contractor. • KLLSB incorporated three whollyownedsubsidiaries,KiivilleSdnBhd (“KVSB”),KiiAshburySdnBhd(“KASB”) andKiiMorrisSdnBhd(“KMSB”).The principal activities of KVSB, KASB andKMSBarepropertyinvestment andpropertydevelopment. • KimlunGroupcommencedpremix production inSarawakandJohor. Annual Repor t 2021 4
CORPORATE MILESTONES 1997-2002 • KLSB involved in building construction and infrastructure projects with contract value less thanRM20.0 million each in Johor, Malaysia. 2002 • SPCIndustriesSdnBhd (“SPC”) commenced its pre-cast concrete business. 2005 • KLSB ventured into specialised infrastructure construction by constructing the Tanjung Puteri flyover in Johor Bahru. • KLSBventured intoKlangValleywith the construction of 70 units of semi detachedhouses. • SPC secured its first sales contract for the supply of concrete tunnel lining segments to Singapore MRT project. 2003 • KLSB secured its first contract with a value exceeding RM20.0 million for the construction of apartments and townhouses. • SPC was accredited with ISO 9001:2000 QualityManagement. 2004 • SPC supplied concrete sewerage tunnel segments to Pantai Trunk Sewerage Bored Tunnel project in Kuala Lumpur. 1977 • Our humblebeginnings started when Kimlun Earthworks SdnBhdwas incorporated. 1994 • Kimlun Earthworks Sdn Bhd changed its name to Kimlun Sdn Bhd (“KLSB”). 2009 • KLSB secured its first Industrial Building System (“IBS”) building project from Iskandar Regional Development Authority at a contract value of RM142.81million. • Kimlun Corporation Berhadwas incorporated as an investment holdingcompany. 2010 • KimlunCorporationBerhadacquired KLSB, SPC and IBT in conjuction with its proposed initial public offering exercise. • Kimlun Corporation Berhad was successfully listed on the Main Market of BursaMalaysiaSecurities Berhadon 29 June 2010. • Kimlun Corporation Berhad incorporated a newwholly-owned subsidiarynamely, KimlunLandSdn Bhd (“KLLSB”). 2011 • Kimlun Group ventured into property development with its first development land in Cyberjaya, Selangor. 2012 • SPC was appointed by Mass Rapid Transit Corporation Sdn Bhd as the designated supplier for the supply of segmental box girders (“SBG”) to certain packages of the Projek Mass Rapid Transit Lembah Kelang: Jajaran Sungai Buloh-Kajang for RM223.18million. • KLSB secured more than RM400 million worth of IBS projects during 2012. 2013 • Kimlun Group launched its first property development project, the HyveSOHOandOffices inCyberjaya, Selangor. • KLSB secured its first contract with a valueexceedingRM290millionforthe construction of service apartments andancillarybuildings. • SPC set up a newprecast concrete products manufacturing plant on a piece of land measuring approximately 130 acres in Negeri Sembilan, and commenced productionduringtheyear. 01 K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 5
PROFILE OF DIRECTORS Pang Tin @ Pang Yon Tin, a Malaysian aged 74, male, was appointed to the Board as Executive Chairman of Kimlun Corporation Berhad on 24 October 2009 and is responsible for overseeing the management of our Group. He completed Senior Middle Three at Foon Yew High School in Johor Bahru, Johor, in 1966. He commenced his career in the construction industry in 1966 by assisting his late father in his construction business. He, together with Phang Piow @ Pang Choo Ing, incorporated Kimlun Sdn Bhd in 1977 to continue their venture in the construction industry. With the experience gained in the construction industry, he ventured into quarry business in 1970s and into property development in 1980s. He has more than 42 years of experience in various sectors, encompassing property development, property investment, construction, quarrying, manufacturing and hotel management. He also sits on the Board of several private limited companies. Sim Tian Liang, a Malaysian aged 67, male, was appointed to the Board as Chief Executive Officer of Kimlun Corporation Berhad on 24 October 2009 and is responsible for strategic planning and for the overall management of the Group. He graduated from Universiti Teknologi Malaysia in 1978, obtaining a Bachelor Degree (Honours) in Engineering. Currently, he is the Past Chairman of the Institution of Engineers Malaysia Southern Branch and Past President of Johor Master Builders Association. He is also a member of the Chartered Institution of Highway and Transportations of the UK., a Honorary Member of Asean Federation of Engineering Organisation and a Fellow of Construction Industry Development Board Malaysia. He is a professional engineer registered with the Board of Engineers, Malaysia, and has been in the construction industry since 1978 where he commenced work as a civil engineer with the Malaysian Government. He joined Pang Hock Constructions Sdn Bhd (now known as Tebrau Bay Constructions Sdn Bhd) towards the end of 1996 and was appointed as its Project Director in 1997 where his responsibilities included overseeing, monitoring and management of building and infrastructure construction projects. In 2003, he left Pang Hock Constructions Sdn Bhd and joined Kimlun Sdn Bhd as Chief Executive Officer. His primary role is to oversee to the execution of corporate objectives, as well as to provide the strategic direction of the company. Gender Male Nationality Malaysian Age 74 Gender Male Nationality Malaysian Age 67 PANG TIN @ PANG YON TIN EXECUTIVE CHAIRMAN SIM TIAN LIANG CHIEF EXECUTIVE OFFICER & EXECUTIVE DIRECTOR Annual Repor t 2021 6
PROFILE OF DIRECTORS Chin Lian Hing, a Malaysian aged 57, male, was appointed to the Board as Executive Director of Kimlun Corporation Berhad on 24 October 2009 and is responsible for the operations and business development activities of our construction business. He graduated from Tunku Abdul Rahman College, Malaysia, in 1988, obtaining a Diploma in Technology (Building). He holds a Bachelor Degree of Applied Science (Constructions Management and Economics) from Curtin University of Technology, Australia. He has been in the construction industry since 1988 where he commenced work as an Assistant Quantity Surveyor in Rukumas Sdn Bhd, leaving in 1989 to join AJ Construction Sdn Bhd as a Quantity Surveyor. In 1990, he joined Hoon Lay Kien Construction also as a Quantity Surveyor. Thereafter, he joined Chin Kek Ling Transport in mid-1990 before leaving to join Pang Hock Constructions Sdn Bhd (now known as Tebrau Bay Constructions Sdn Bhd) in January 1992. During his time at Pang Hock Constructions Sdn Bhd, his last held position was General Manager (Operations and Contracts) and he was responsible for overseeing the tendering of building and infrastructure construction projects, and project implementation. He left Pang Hock Constructions Sdn Bhd in 2002 to join Kimlun Sdn Bhd, where he is responsible for the operations and business development activities of the company. Yam Tai Fong, a Malaysian aged 54, female, was appointed to the Board as Executive Director of Kimlun Corporation Berhad on 24 October 2009 and is responsible for all financial matters concerning our Group. She graduated from Monash University, Australia, in 1990, obtaining a Bachelor Degree in Economics. Since 1994, she has been a member of the Malaysian Institute of Accountants. She commenced her career at Ernst & Young, Malaysia, in 1991, with responsibilities for audit, taxation and corporate advisory matters, leaving in 1994 to join Pang Hock Constructions Sdn Bhd (now known as Tebrau Bay Constructions Sdn Bhd). Whilst at Pang Hock Constructions Sdn Bhd, she was responsible for the financial management and management reporting of its affairs. She left Pang Hock Constructions Sdn Bhd in 2003 to join Kimlun Sdn Bhd to assume similar responsibilities. Pang Khang Hau, a Malaysian aged 40, male, was appointed to the Board as Executive Director of Kimlun Corporation Berhad on 24 October 2009 and is responsible for the corporate affairs of our Group, including business development activities, human resource, administration and management. He graduated from the University of Western Australia in 2005, obtaining a Bachelor Degree in Civil Engineering. He completed a Master of Business Administration degree at the University of Liverpool, UK, in 2010. He commenced his career in the construction industry in 2006 with his appointment as a Director of Kimlun Sdn Bhd where he is responsible for business development activities, human resource, administration and management. Gender Male Nationality Malaysian Age 57 Gender Female Nationality Malaysian Age 54 Gender Male Nationality Malaysian Age 40 CHIN LIAN HING EXECUTIVE DIRECTOR YAM TAI FONG EXECUTIVE DIRECTOR PANG KHANG HAU EXECUTIVE DIRECTOR K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 7
Datuk Woon See Chin, a Malaysian aged 78, male, was appointed to the Board as Independent Non-Executive Director of Kimlun Corporation Berhad on 1 October 2020. He is the Chairman of the Remuneration Committee and a member of Audit Committee. He graduated from the law school of University of Singapore and is an advocate and solicitor by profession and has been in legal practice in Johor Bahru for more than forty-seven years. He was an Independent Non-Executive Director of Focal Aims Holdings Bhd (now knows as Eco World Development Group Bhd) for more than 9 years until his resignation on 28 November 2013. He was a Johor State Assembly member in 1982 and was elected as a Member of Parliament of Malaysia from 1986 to 1995. He served as a Deputy Minister of Education of Malaysia for four (4) years from 1986 to 1990. Johar Salim Bin Yahaya, a Malaysian aged 68, male, was appointed to the Board as Independent Non-Executive Director of Kimlun Corporation Berhad on 1 December 2021. He is the Chairman of the Nomination Committee and a member of the Remuneration Committee. He graduated with a Bachelor of Economics (Hons.) Degree from University of Malaya. He started his career with Bank of America in 1974 and later moved to Malaysian French Bank in 1983. He joined Kumpulan Prasarana Rakyat Johor as Chief Operating Officer from 1997 to 2003 and rose to become the Chief Executive Officer until 2013. He was also the Chief Executive Officer of Tebrau Teguh Berhad from 2004 to 2012 and Executive Chairman of PLS Plantation Bhd from 2000 to 2013. He is currently the Chairman of Selia Ekuiti Sdn Bhd. Anita Chew Cheng Im, a Malaysian aged 55, female, was appointed to the Board as an Independent Non-Executive Director of Kimlun Corporation Berhad on 1 December 2021. She is the Chairperson of the Audit Committee and member of the Nomination Committee. She graduated from Monash University, Australia with a Bachelor of Economics Degree, majoring in Accounting in April 1990. Anita started her career as an audit assistant at KPMG, Melbourne in 1990. She left KPMG in September 1991 to return to Malaysia. While in KPMG, she was engaged in the audit of the media, retail and mining industries. In 1992, she joined the Corporate Finance department of Bumiputra Merchant Bankers Berhad (now known as Alliance Investment Bank Berhad after merging with Amanah Investment Bank Berhad) and was with the investment bank for approximately 5 years. From 2003 to 2007, she worked at HwangDBS Investment Bank Berhad as Senior Vice President, Equity Capital Market. Prior to that, she was Director, Corporate Finance at Alliance Investment Bank Berhad from 1997 to 2003. She was involved in most related areas of corporate finance work during her tenure in the various investment banks, having advised clients on numerous IPO, fund raising, both equity and debt, mergers and acquisitions; and corporate and debt restructuring exercises. Since she left the investment banking industry in 2007, she has been sitting on various corporate boards. She is currently an Independent Non-Executive Director of Notion Vtec Berhad, MK Land Holdings Berhad, K-One Technology Berhad and SKP Resources Berhad, companies listed on Bursa Securities Malaysia Berhad. She also sits on Fortress Minerals Ltd, a company listed on the Singapore Exchange (SGX) as an Independent Non-Executive Director. Gender Male Nationality Malaysian Age 78 Gender Male Nationality Malaysian Age 68 Gender Female Nationality Malaysian Age 55 DATUK WOON SEE CHIN INDEPENDENT NON-EXECUTIVE DIRECTOR JOHAR SALIM BIN YAHAYA INDEPENDENT NON-EXECUTIVE DIRECTOR ANITA CHEW CHENG IM INDEPENDENT NON-EXECUTIVE DIRECTOR PROFILE OF DIRECTORS Annual Repor t 2021 8
Bhupendar Singh A/L Sewa Singh, a Malaysian aged 64, male, was appointed to the Board as Independent Non-Executive Director of Kimlun Corporation Berhad on 1 December 2021. He is a member of the Audit Committee and Nomination Committee. He holds a Bachelor Degree (Honours) in Accounting from Universiti Malaya. He is a member of the Malaysian Institute of Accountants and an Associate Member of the Chartered Member of the Tax Institute of Malaysia. He commenced his career with Hanafiah, Raslan & Mohammad in 1983 with the taxation unit and the firm merged with Arthur Andersen & Co in April 1990. He became a Tax Partner in 1996 and moved to the firm of Ernst &Young in 2002. He was a senior tax partner with the firm until October 2010 when he left to join Petronas as the Head of Group Tax Department. He became a Vice President in 2016 and retired from Petronas in March 2020. He was responsible for setting up and growing the Tax Department of Petronas to be able to manage all the tax affairs of the Group in an effective manner. He is currently running his own tax consultancy and advisory firm and provides such services to clients in various industries. Dato’ Ir Fong Tian Yong, a Malaysian aged 73, male, was appointed to the Board as Independent Non-Executive Director of Kimlun Corporation Berhad on 1 December 2021. He is a member of the Audit Committee and the Remuneration Committee. He holds a Bachelor Degree in Civil Engineering from Singapore University. Upon graduation in 1974, he joined the Public Works Department as Executive engineer and rose to become the Deputy Director General of Local Government Department of the Ministry of Housing & Local Government (KPKT) until his retirement from government service in 2007. He was thereafter appointed to serve as Technical Advisor to four Ministers of KPKT until 2012 when he joined Malaysia-China Business Council as its Executive Director. In KPKT, he oversaw the development of Chinese New Village Master Plan, the amendments of Street, Drainage and Building Act, Uniform Building Bylaws and several policy matters. He co-authored the Book, Malaysian Chinese New Villages. On the corporate side, he is a director of Malaysia-China Business Council, a not-forprofit company limited by guarantee as well as the Editor of the Board of Engineers Malaysia. He was the past President of the Technological Association Malaysia. Notes to Directors’ Profile : 1. Pang Tin @ Pang Yon Tin is the father of Pang Khang Hau. Save as disclosed, none of the directors have any family relationship with any other director and/or major shareholder of the Company. 2. Save for Pang Tin @ Pang Yon Tin and Pang Khang Hau, who have interest in recurrent related party transactions as disclosed under Note 31 to the financial statements contained in this Annual Report, none of the directors have any conflict of interest with the Company. 3. None of the directors have been convicted of any offences within the past five (5) years and imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2021 other than traffic offences, if any. Gender Male Nationality Malaysian Age 64 Gender Male Nationality Malaysian Age 73 BHUPENDAR SINGH A/L SEWA SINGH INDEPENDENT NON-EXECUTIVE DIRECTOR DATO’ IR FONG TIAN YONG INDEPENDENT NON-EXECUTIVE DIRECTOR PROFILE OF DIRECTORS K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 9
GROUP FINANCIAL HIGHLIGHTS GROSS PROFIT (RM’000) BASIC EARNINGS/(LOSS) PER SHARE(SEN) PROFIT/(LOSS) AFTER TAX (RM’000) REVENUE (RM’000) PROFIT BEFORE TAX (RM’000) REVENUE BY SEGMENT (RM’000) 74,536 134,117 128,027 139,303 50,105 2021 Construction Manufacturing Investment Property Development 2020 2019 2018 2017 8 2020 2020 623,797 168,598 2,306 2021 2021 503,982 142,103 44,994 8 2017 2017 871,096 97,966 15,829 298 2018 2018 801,122 206,272 4,536 49 2019 2019 1,022,167 272,095 8,523 33 2021 2019 2020 2018 2017 1,302,818 985,190 691,087 (0.17) 21.80 18.81 17.42 2.34 794,709 1,011,979 2017 90,035 2017 68,338 2018 81,666 2018 61,065 2019 79,687 2019 58,369 2020 15,524 2020 7,944 2021 971 2021 (728) Annual Repor t 2021 10
CHAIRMAN’S STATEMENT DEAR SHAREHOLDERS, ON BEHALF OF THE BOARD OF DIRECTORS (“THE BOARD”), I AM PLEASED TO PRESENT THE ANNUAL REPORT OF KIMLUN CORPORATION BERHAD (“OUR COMPANY”) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 (“FY2021”). OUR OPERATING ENVIRONMENT On 11 March 2020, the World Health Organisation declared the Coronavirus (“COVID-19”) outbreak as a pandemic in view of the speed and scale of its transmission globally. The COVID-19 pandemic has significantly disrupted many business operations around the world. For the Group, the impact on business operations has not been a direct consequence of the COVID-19 outbreak, but a result of themeasures taken by the Malaysia Government and Singapore Government to contain it. The Malaysia Government implemented the nationwide Full Movement Control Order (“FMCO”) effective from 1 June 2021. Almost all of the Group’s construction work sites were shut down from 1 June 2021 to 15 August 2021, as only critical projects were allowed to operate, subject to MITI’s approval. For the remaining period of FY2021, the Group’s compliance to the prescribed caps on work forcecapacityallowed toattend toworkat the Group’s business premises and the applicable SOPs has resulted in lower productivity of the Group’s business operations; and Singapore banned all long-term pass holders and short-term visitors with recent travel history to India, Bangladesh, Nepal, Pakistan and Sri Lanka from entering Singapore effective from 24 April 2021 and 2 May 2021 respectively. The entry ban had impacted labour supply in Singapore’s construction sector which employs many Indian and Bangladeshi workers, resulted in slower execution of the Group’s customers’ projects in Singapore and thus deferments in their taking delivery of the Group’s products. In addition, with the economy reopening during FY2021, the pandemic-inflicted supply chain disruptions and supply constrictions, rising cost of raw materials, shortage of workers have resulted in higher cost of operation. Further, in view of the supply chain constrictions, shortage of labour and economy uncertainty, the Group has been very cautious in pursuing order book replenishment and has resulted in low order book replenishment during the first three quarters of FY2021. Consequentially, the Group’s revenue and earnings were affected negatively. K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 11
OUR BUSINESS PERFORMANCE Our revenue decreased from RM794.71 million in FY2020 to RM691.09 million in FY2021 on lower business operations. Our profit before tax decreased from RM15.52 million in FY2020 to RM0.97 million in FY2021, mainly due to: (i) lower revenue in FY2021; and (ii) the incurrence of substantially the same amount of fixed and recurring expenses such as depreciation, payroll expenses, rental and interest expenses during the period in which our business operat ions were substantially halted. We implemented the following measures to mitigate the impact of the COVID-19 pandemic to the Group’s business: (i) take necessary precautionarymeasures at our businesspremisesandworksites in accordance with guidelines fromhealth authorities and government bodies; (ii) frequent seniormanagement operation meetings to strategize and identify operational issues; (iii) communicate with suppliers as to their stocks readiness and procure alternative suppliers/supplies to improve supply chain lead times where necessary; (iv) placement of advance bulk purchase orders to lock in rawmaterials supply at a better bulk purchase price; (v) focus in onlinemarketing campaigns on our property development projects and reach out to potential purchasers via Facebook, video calls and virtual tours; and (vi) closely monitor the working capital requirements of the Group and secure additional working capital credit facilities, where necessary. ACHIEVEMENTS AND OUTLOOK During the year, the Group successfully completed the Serian Section of the Pan Borneo Highway Sarawak project (“PBH”). The PBH project is the single largest construction project which the Group secured thus far. As at 31 December 2021, the estimated construction andmanufacturing balance order book of approximately RM1.69 billion and RM0.4 billion respectively, from a diversified clientele, will contribute to our revenue for about 2 years. We will continue to bid for projects and sales orders in order to replenish our order book and contribute positively to our result in 2022 and beyond. Our track record in the industries we operate in, and extensive experience in our businesses, coupled with the support from bankers, are good supporting factors for the Group to bid for and execute future projects. RECENT CORPORATE DEVELOPMENT During the year, the Company established an Islamic commercial papers programme for the issuance of Islamic commercial papers (“ICP”) based on the Shariah principle of Murabahah (via Tawarruq arrangement); and (ii) an Islamicmedium termnotes programme for the issuance of Islamicmediumtermnotes (“IMTN”) based on the Shariah principle of Murabahah (via Tawarruq arrangement), which have a combined limit of up to RM800 million in nominal value. The Company issued in total four tranches of IMTN and ICP with a total nominal value of RM78 million during the year. The proceeds raised from such issuance were used for general corporate purposes of the Group and to meet the Group’s working capital requirements and capital expenditures. BOARD RENEWAL During the year, three of our Independent Non-Executive Directors, namely Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin Abdullah (“Dato Keizrul”), Mr. Kek Chin Wu (“Mr. Kek”) and Mr. Chua Kee Yat @ Koo Kee Yat (“Mr. Chua”) having served 12-year tenure, had resigned to make way for new Independent Non-Executive Directors to be appointed. The Board was highly appreciative of the valuable contributions of Dato Keizrul, Mr. Kek and Mr. Chua during their tenure as Independent Non-Executive Directors. On behalf of the Board, I would like to extend a warm welcome to Dato’ Ir. Fong Tian Yong, Ms. Anita Chew Cheng Im, Mr. Johar SalimBin Yahaya andMr. Bhupendar Singh A/L Sewa Singh, who have joined us as Independent Non-Executive Directors on 1 December 2021. REWARD TO SHAREHOLDERS – DIVIDEND While we do not adopt a formal dividend policy, our Company has been declaring dividends every year since its listing on the Main Market of Bursa Malaysia Securities Berhad in 2010. In respect of FY2021, the Board recommends a single tier final dividend of 1.0 sen per share. The recommended final dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting. Our Company is alwaysmindful to reward our loyal shareholderswho have supported our growth over the years while trying to strike a balance with the funding needs at our different development phases. ACKNOWLEDGEMENT On behalf of the Board, I would like to extend my heartfelt gratitude to our shareholders, bankers, customers, business partners and regulatory authorities for their continued support, guidance and assistance. The Board would like to express our appreciation to our management teamand employees for their hard work and dedication. Pang Tin@Pang Yon Tin Chairman CHAIRMAN’S STATEMENT Annual Repor t 2021 12
我们的营运环境 世界卫生组织(“W.H.O.”)于2020年3月11日 宣布新冠肺炎(“COVID-19”)爆发为大流行 病。该疫情严重地扰乱了全球的商业运营。 我們的业务运营也因马来西亚政府和新加坡 政府为了遏制该疫情蔓延所实施的各项措施 而受限。 马来西亚政府于2021年6月1日起落实全面 行动管制令（“FMCO”）。在FMCO期间, 除了必要的经济和服务领域外，其他经济领 域全部停止营业。 除了少数涉及关键工程的建筑工地,我們 的建筑工地皆在FMCO期间暂停营运至 2021年8月15日。在 2021 财政年的其他期 间，马来西亚政府所规定的标准作业程序 （“SOP”）以及上班人数的上限，也对我 們的运营效率造成负面的影响。 新加坡政府则收紧对印度、孟加拉、尼泊 尔、巴基斯坦和斯里兰卡的边境管制。该禁 制令影响新加坡建筑业的劳动力供应，导致 我们的客户的工程项目进度放缓, 进而延迟 购买我们的产品。 除此之外，虽然经济在2021年逐步开放， 但是原材料与劳工供应依然短缺，导致运营 成本上涨。有鉴于此，我們在考量投标项目 得要非常的谨慎，导致2021财政年首三季 度投得的项目偏低。 我们的收入和利润相应地大幅下滑。 我们的业务表现 我们的收入从2020财政年的7亿9千4百71万 令吉下滑至2021财政年的6亿9千1百09万令 吉。 税前利润则从2020财政年的1千5百52万令 吉下滑至2021财政年的97万令吉，主要归 因于以下的因素： (i) 2021财政年收入下降; (ii) 在业务营运停顿期间，固定和经常性开 支例如折旧、工资、租金和利息等保持 不变或仅略有减少 我们采取以下措施，以减轻COVID-19疫情 对集团业务的影响： (i) 根据卫生部和其它政府机构的准则，在 我们的营业场所和工地采取必要的防疫 措施; (ii) 经常召开高级管理层营运会议，讨论运 营问题并制定策略; (iii) 与供应商就库存情况进行沟通，并在必 要时寻找替代供应，以改善原料供应 期; (iv) 提前下批量采购订单，以批量优惠采购 价格锁定原材料供应; (v) 为我们的房地产开发项目進行在线营销 活动，并通过面子书以及视频通话与潜 在买家联系; 及 (vi) 密切监测集团的流动资金需求，以在必 要时申请额外的流动资金信贷便利。 我们的成就与展望 我们于2 0 2 1年成功完成砂拉越泛婆罗 洲大道(“Pan Borneo Highway”)西连 (“Serian”)路段的工程。该大道工程乃是 我们迄今获得的最大单一建设项目。 截至2021年12月31日，我們手握来自多元化 客户群的约21亿令吉的建筑与制造订单。这 些订单将为我们未来两年的收入做出贡献。 我们将继续积极地竞标工程和销售订单以补 充我们的订单簿。 企业最新进展 我们于2021年设立规模高达8亿令吉的回教债 券计划，并发行了四个系列的债券，筹得7,800 万令吉的资金，以用在运营和资本开销。 董事会变动 根据交易所的要求，独立董事的任期顶限为 12年。有鉴于此，我们的三名非执行独立董 事，Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin Abdullah、Kek Chin Wu 先生以及Chua Kee Yat @Koo Kee Yat先生，在任职期满12年后离 开董事局。我们对他们的宝贵贡献深表感激。 此外，我谨代表董事局欢迎我们的新任独立 董事，拿督Fong Tian Yong 工程师、 Anita Chew Cheng Im 女士、 Johar Salim Bin Yahaya 先生 以及Bhupendar Singh A/L Sewa Singh 先生。 股东回馈—股息 虽然本公司没有实行正规的股息政策，但是本 公司自2010年在马来西亚证券交易所主板上 市以来,每年都派发股息回馈股东。 即使我们经历了艰辛的一年,董事局仍然建议 派发每股1仙的终期单层股息，惟需在来临的 股东常年大会上获得股东批准。 致谢 我谨代表董事会，衷心感谢我们的股东、来 往银行、客户、业务伙伴以及有关监管当局 对我们的持续支持，指导以及协助。董事会 谨借此机会感谢我们的管理层以及员工的辛 勤工作以及奉献精神。 彭廷 主席 主席文告 K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 13
MANAGEMENT DISCUSSION AND ANALYSIS K M U I L N Knowledge Moral Unity Integrity Leadership Novelty CORPORATE VALUES MISSION VISION We aim to continuously improve, promote and provide construction activities and services to the society at which we operate. By providing one stop construction design and build services, we aim to add value to our clients that in turn will be beneficial to the society at large. We will treat all partners including suppliers, subcontractors and consultants with trust, honesty and fairness in all business dealings. Towards our employees, we balance our focus on their personal skills development while taking care of their welfare. While seeking for the maximisation of shareholders’ wealth, we strive to maintain harmony with the interest of the society to enhance our corporation’s sustainability. We aspire to be a reliable, innovative and profitable provider of full range construction services and products in the South East Asia region. Annual Repor t 2021 14
MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW OF OUR BUSINESSES AND OPERATIONS Construction and Engineering Property Development Manufacturing and Trading Kimlun Group’s Core Businesses Precast Concrete Products Tailor made products for infrastructure related projects Customised products for IBS building related projects Quarry Products Aggregates and premix Completed Development HYVE at Cyberjaya, Selangor: SOHO and office Taman Puteri @ Pekan Nenas, Johor: residential properties On Going In the Pipe Line 100 trees @ Seri Alam, Johor: semi -detached houses Bukit Bayu Phase 2: bungalows Infrastructure Division Highways, interchanges, flyovers, roads and earthworks Building Division Residential projects: high rise and landed properties Non residential projects: retail malls, factories, hospitals, schools and colleges K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 15
MANAGEMENT DISCUSSION AND ANALYSIS PRODUCTION PLANT AND PRODUCTS ULU CHOH, JOHOR • Tunnel lining segment • Rail sleeper • Jacking pipe • Vertical cast pipe • Box culverts • Prefabricated prefinished volumetric module • Hollow core slab • Column and beam • Aggregates • Premix SENAWANG, NEGERI SEMBILAN • Tunnel lining segment • Segmental box girder • Parapet walls • Column and beam SAMARAHAN, SARAWAK • Aggregates • Premix Notable completed projects include: • Main building works for Marlborough College East, Johor • Mall of Medini, Johor • Granada Hotel, Johor • The Sky Loft Suites, Johor • Gleneagle Medini Hospital, Johor On-going projects include: • Pan Borneo Highway Sarawak • Sarawak-Sabah Link Road • Various apartment and landed properties projects in Selangor and Johor Completed sales orders include: • Segmental box girders (“SBG”) and tunnel lining segment (“TLS”) to Klang Valley MRT (“KVMRT”) Line 1 to Line 2 • TLS to Singapore MRT Circle Line, Downtown Line and Thomson Line • Precast Bathroom to Michael and Festive Hotel, Singapore On-going sales orders include: • SBG for train testing center • Rail sleepers to Singapore MRT projects • Jacking pipes to Singapore Deep Tunnel Sewerage project • IBS for a resort development Balance order book as at 31 Dec 2021 RM1.69 billion Balance order book as at 31 Dec 2021 RM0.4 billion All projects in Malaysia Malaysia orders Public sector 47% 4% Building projects 50% Private sector 53% Infrastructure projects 50% Singapore orders 96% CONSTRUCTION PROJECTS MANUFACTURING ORDERS Annual Repor t 2021 16
MANAGEMENT DISCUSSION AND ANALYSIS PROPERTY DEVELOPMENT Location GrossDevelopment Value (RM) Lauched Development / Planned Development Completed Project Hyve at Cyberjaya, Selangor 232 million A combination of 804 units of freehold SOHO and offices Taman Puteri @ Pekan Nenas, Johor 48 million 131 units of various types of freehold landed properties Seksyen U10 Shah Alam, Selangor 67 million 30 units of leasehold bungalows Total 347 million New Projects Seksyen U10 Shah Alam, Selangor 37 million Expected launching in 2H 2022: 16 units of leasehold bungalows Bandar Seri Alam, Johor 60 million On-going: 60 units of freehold semi-detached houses Total 97 million Location / Land Area GrossDevelopment Value (RM) Type of Land Usage / Plan Development Existing Land Bank in Hand Bandar Seri Alam, Johor Bahru, Johor / 11.27 acres # Freehold commercial land / commercial development Mukim of Plentong, Johor Bahru, Johor / 7.98 acres # Freehold land / service apartment Seksyen U10 Shah Alam, Selangor / 22.40 acres # 88 units of 99-years leasehold vacant detached lots approved for bungalow development Medini Iskandar Malaysia, Johor / 5.31 acres # 99-years lease on freehold commercial land / A combination of SOHO and retails properties Kota Tinggi, Johor / 140.836 acres # 29 parcels of freehold agriculture land / township development Mukim Pulai, Johor Bahru, Johor / 29.00 acres # Freehold agriculture land / commercial development Mukim Pulai, Johor Bahru, Johor / 5.15 acres # Freehold commercial land / commercial development # The gross development value cannot be ascertained as the development details have yet to be finalised International Contractors • Shimizu Corporation • Shanghai Tunnel Engineering Ltd • SK Engineering & Construction • Nishimatsu Construction Co. Ltd. • M+W Singapore Ptd Ltd Government and Government Link Companies • Mass Rapid Transit Corporation Sdn. Bhd. • UEM Sunrise Land Bhd • SP Setia Bhd • Sime Darby Bhd Private Sector • IOI Properties Bhd • Mah Sing Group Bhd • IJM Land Bhd • WCT Construction Sdn Bhd • MMC Gamuda KVMRT (UGW) Joint Venture • Sunway Construction Sdn Bhd DIVERSIFIED CLIENTELE We are not materially dependent on any single customer for business. We have been securing projects from different clients. Our diversified clientele include: K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 17
MANAGEMENT DISCUSSION AND ANALYSIS GROUP FINANCIAL HIGHLIGHTS Year ended/As at 31 December FINANCIAL RESULTS (RM’ mil) 2017 2018 2019 2020 2021 Revenue 985.19 1,011.98 1,302.82 794.71 691.09 Gross Profit 139.30 128.03 134.12 74.54 50.11 Profit Before Tax 90.03 81.67 79.69 15.52 0.97 Profit/(loss) After Tax 68.34 61.07 58.37 7.94 (0.73) Profit/(loss) Attributable to Owners of the Company 68.48 61.14 58.39 7.99 (0.59) FINANCIAL POSITION (RM’ mil) Cash and Bank Balances 86.57 35.57 64.94 57.47 69.54 Total Assets 1,148.22 1,397.14 1,546.16 1,476.98 1,326.44 Total Borrowings 129.60 273.15 406.61 407.11 307.06 Shareholders’ Equity 607.64 664.72 720.47 725.91 721.28 FINANCIAL RATIOS Gross Profit Margin % 14.14 12.65 10.29 9.38 7.25 Basic Earnings/(Loss) per Share (“EPS”) Sen 21.80 18.81 17.42 2.34 (0.17) Dividend per Share Sen 5.50 3.70 3.30 1.00 1.00 Dividend Yield (note 1) % 2.5 3.4 2.6 1.1 1.2 Net Assets per Share RM 1.90 2.00 2.12 2.08 2.07 Net Gearing Ratio (note 2) times 0.07 0.26 0.32 0.32 0.25 CASH FLOW (RM’ mil) Net cash flows generated from / (used in) operating activities 89.45 (137.52) 10.55 13.14 117.57 Net cash flows used in investing activities (37.03) (21.14) (91.86) (1.98) (2.60) Net cash flows generated from / (used in) financing activities (45.23) 93.01 104.04 4.24 (103.44) SHARES PERFORMANCE Share Price – Year Close RM 2.22 1.08 1.25 0.895 0.81 Share Price – Year High RM 2.43 2.35 1.49 1.26 1.01 Share Price – Year Low RM 2.00 1.00 1.08 0.51 0.74 Trading volume (no of shares) Mil 70 34 35 163 76 Market Capitalisation (note 3) RM’ mil 712 358 425 316 286 Price Earnings Ratio (note 4) times 10.2 5.7 7.2 38.2 - Note 1: Being dividend per share/share price – year close Note 2: Being net debt/total equity plus net debt Note 3: Market capitalisation as at the financial year end Note 4: Being year close share price/EPS for the financial year Annual Repor t 2021 18
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW Group Revenue and Profitability Revenue recorded in FY2021 was RM691.09 million, which was RM103.62 million (13.0%) lower compared to the revenue recorded in YTD 2020. The lower revenue achieved in FY2021 was attributable to lower revenue achieved by the construction division and the manufacturing and trading (“M&T”) division. Gross profit margin (“GP Margin”) of 7.25% in FY2021, was lower compared to 9.38% recorded in FY2020. This was mainly due to the construction and M&T revenue had reduced significantly during FY2021 whilst the Group continued to incur substantially the same amount of fixed and recurring expenses such as depreciation, payroll and rental expenses. In line with the lower revenue and GP Margin achieved, gross profit of RM50.11 million recorded in FY2021 was RM24.43 million (32.8%) lower compared to FY2020. Other income of RM8.13 million in FY2021 approximated the amount recorded in FY2020. Other income mainly comprised of gains on disposal of machineries and scrap materials and bad debts recovered. Selling and administrative expenses (“S&M”) of RM41.77 million in FY2021, was RM6.12 million (12.8%) lower compared to FY2020. Higher S&M were recorded in FY2020 due to the write down of land held for development of RM7.32 million. Finance costs of RM14.83 million in FY2021 was RM3.63 million (19.7%) lower compared to FY2020 mainly due to the absence of unwinding of discount on payables. The effective tax rate for FY2021 was higher than the statutory rate applicable to the Group as certain expenses were disallowed for tax deduction under tax regulations, and potential deferred tax benefits in relation to interest expenses were not recognised on prudent basis. Due to the variances in gross profit, other income and expenses as explained above, profit after tax recorded in FY2021 decreased by RM8.67 million (109.2%) compared to FY2020. The Group recorded loss after tax of RM0.73 million in FY2021. K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 19
MANAGEMENT DISCUSSION AND ANALYSIS Segmental Revenue and Gross Profit* * : The segmental revenue and gross profit stated in the commentary in relation to the respective segment were inclusive of inter-segment transactions. FY2021 FY2020 Changes RM’000 RM’000 RM’000 % Revenue Construction 510,129 625,856 (115,727) -18.5% Manufacturing & Trading (“M&T”) 227,054 250,259 (23,205) -9.3% Property Development (“PD”) 44,282 2,306 41,976 1,820.3% Investment 14,986 17,966 (2,980) -16.6% Elimination (105,364) (101,678) (3,686) 3.6% Consolidated revenue 691,087 794,709 (103,622) -13.0% GP Construction 16,690 41,946 (25,256) -60.2% M&T 25,434 31,762 (6,328) -19.9% PD 5,408 487 4,921 1,010.5% Investment 14,986 17,966 (2,980) -16.6% Elimination (12,413) (17,625) 5,212 -29.6% Consolidated GP 50,105 74,536 (24,431) -32.8% GP margin Construction 3.27% 6.70% M&T 11.20% 12.69% PD 12.21% 21.12% Investment 100.0% 100.0% Consolidated GP margin 7.25% 9.38% The decline in construction and M&T revenue in FY2021 was due to the substantial curtailment of the Group’s operations, especially the construction division’s operations, during the nationwide FMCO, and lower sales to Singapore. In addition, some sizable contracts were at tail-end while contribution from new contracts secured were minimum as some of the larger size new contracts were secured toward the end of FY2021. The Malaysia Government implemented the FMCO effective from 1 June 2021, where economic and social activities were not allowed except for prescribed essential services. Effective from 16 August 2021, nonessential activities in the manufacturing, construction, mining and quarrying industries were allowed to resume operations but the operating capacity of such activities was subject to the level of the workforce that had been fully vaccinated. Almost all of our construction work sites were shut down from 1 June 2021 to 15 August 2021, as only critical projects were allowed to operate, subject to MITI’s approval. For the remaining period of FY2021, our compliance to the prescribed caps on workforce capacity allowed to attend to work at the Group’s business premises and the applicable SOPs had resulted in lower productivity of our business operations. Singapore banned all long-term pass holders and short-term visitors with recent travel history to India, Bangladesh, Nepal, Pakistan and Sri Lanka from entering Singapore effective from 24 April 2021 and 2 May 2021 respectively. The entry ban had impacted labour supply in Singapore’s construction sector which employs many Indian and Bangladeshi workers, resulted in slower execution of our customers’ projects in Singapore and thus deferments in their taking delivery of our goods. PD division recorded a higher revenue of RM44.28 million in FY2021, which was multi folds higher against FY2020, attributable to sales achieved from the Bukit Bayu, Seksyen U10, Shah Alam project. Annual Repor t 2021 20
MANAGEMENT DISCUSSION AND ANALYSIS Revenue of the investment division in FY2021 was mainly derived from dividend and interest income received from other divisions. Both the Construction and M&T divisions recorded lower GP margins in FY2021, mainly due to their respective revenue streams had been significantly reduced during the year whilst they continued to incur substantially the same amount of fixed and recurring expenses such as depreciation, payroll and rental expenses. In line with the lower revenue and GP margin achieved, gross profit generated by the Construction and M&T divisions were lower in FY2021. PD division recorded a lower GP margin in FY2021, due to lower profit margin products were sold during FY2021. Nevertheless, PD division generated higher gross profit in FY2021 on the back of higher revenue achieved. Financial Position Shareholders’ equity decreased from RM725.91 million as at 31 December 2020 to RM721.28 million as at 31 December 2021, attributable to the comprehensive loss attributable to owners of the Company of RM1.10 million and dividend paid of RM3.53 million during FY2021. Non-current assets increased from RM368.86 million as at 31 December 2020 to RM377.21 million as at 31 December 2021, mainly due to the increase in land held for development by RM42.79 million on completion of the acquisition of 2 parcels of commercial land for property development, partly offset by the decrease in property, plant and equipment (“PPE”) by RM35.18 million. The decrease in PPE was mainly due to depreciation of the PPE during FY2021. Current assets decreased from RM1.11 billion as at 31 December 2020 to RM0.95 billion as at 31 December 2021. This was mainly due to the combined effects of the following: (i) net decrease in inventories by RM45.62 million on delivery of finished goods to customers and sales of property stocks during FY2021; and (ii) net decrease in trade and other receivables and contract assets by RM132.21 million mainly attributable to lower business operation during FY2021. Current liabilities decreased from RM607.41 million as at 31 December 2020 to RM444.38 million as at 31 December 2021 mainly due to the combined effects of the following: (i) decrease in loans and borrowings by RM116.35 million, mainly due to lower utilization of working capital financing facilities, in line with lower business operation in FY2021; and (ii) decrease in trade and other payables and contract liabilities by RM40.59 million, mainly due to lower business operation in FY2021; and Non-current liabilities increased from RM135.27 million as at 31 December 2020 to RM151.01 million as at 31 December 2021 due to issuance of Sukuk during the year. Net gearing ratio as at 31 December 2021 was at a manageable level of 0.25 times. Cash Flow For FY2021, the Group registered net cash flows generated from operating activities of RM117.57 million. A small net cash flows of RM2.60 million was used in investing activities. Net cash flows used in financing activities of RM103.44 million was mainly attributable to repayment of loans and borrowings and hire purchase creditors aggregating RM740.77 million, partly offset by the drawdown of loans and borrowings of RM641.77 million. With the net cash inflow of RM11.53 million during FY2021, the Group’s cash and cash equivalents was RM45.62 million as at 31 December 2021. K imlun Corporat ion Berhad Regi s t rat ion No. 200901023978 (867077-X) 21
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