200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 38. Significant event during the financial year and subsequent event (i) (ii) 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 the measures taken by the Malaysia Government and Singapore Government to contain it. 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 effect of the Singapore Government’s tightening of its COVID-19 measures as it seeks to control the increase in untraceable COVID-19 infections in the country. 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 has impacted labour supply in Singapore’s construction sector which employs many Indian and Bangladeshi workers, which 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 the financial year ended 31 December 2021 (“FYE 2021”), 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 FYE 2021. the effects of the multiple stages of Movement Control Order (“MCO”) and the various standard operating procedures thereunder imposed by the Malaysia Government (“SOPs”). The Malaysia Government implemented the nationwide Full MCO 3.0. (“FMCO”) (also known as First Phase of National Recovery Plan (“NRP”), a four-phase exit strategy from the Covid-19 crisis announced by the Malaysia Government) effective from 1 June 2021, where economic and social activities were not allowed except for prescribed essential services. Effective from 16 August 2021, non-essential activities in the manufacturing, construction, mining and quarrying industries were allowed to resume operations but the operating capacity of such activities is subject to the level of the workforce that has been fully vaccinated. 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 the financial year, the Group’s compliance to the prescribed caps on work force capacity allowed to attend to work at the Group’s business premises and the applicable SOPs has resulted in lower productivity of the Group’s business operations; and - 108 - NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Annual Repor t 2021 168
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