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Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 1 Contents 02 27 FINANCIAL STATEMENTS Corporate Information Corporate Social Responsibility Statement 133 03 Analysis of Shareholdings Corporate Structure 29 Statement on 135 04 Corporate Governance Analysis of Warrant Holdings Corporate Milestones 44 137 06 Audit Committee Report List of Properties Directors’ Profile 47 139 Statement on Risk Notice of Eighth 10 Management and Annual General Meeting Group Financial Highlights Internal Control 12 52 Proxy Form Statement on Chairman’s Statement Directors’ Responsibility 16 Management Discussion Analysis K Knowledge I Integrity M Moral L Leadership U Unity N Novelty Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 2 KIMLUN CORPORATION BERHAD 2 Annual Report 2016 CORPORATE INFORMATION Board Of AUDIT COMMITTEE COMPANY SECRETARIES Directors Chairman Wong Peir Chyun Kek Chin Wu (MAICSA 7018710) Independent Tay Lee Shya (MIA 16982) Non-Executive Director Yeng Shi Mei (MAICSA 7059759) Pang Tin @ Pang Yon Tin Executive Chairman Members HEAD OFFICE Chua Kee Yat @ Koo Kee Yat Sim Tian Liang Independent Suite 19.06, Level 19, Chief Executive Officer and Non-Executive Director Johor Bahru City Square Executive Director 106-108, Jalan Wong Ah Fook Dato’ Paduka (Dr.) Ir. Hj. Keizrul 80000 Johor Bahru, Chin Lian Hing Bin Abdullah Johor Darul Takzim Executive Director Independent Telephone No. : (+607) 222 8080 Non-Executive Director Facsimile No. : (+607) 223 8282 Yam Tai Fong E-mail : [email protected] Executive Director REMUNERATION COMMITTEE Web-site : www.kimlun.com Pang Khang Hau Chairman REGISTRAR & Executive Director Sim Tian Liang TRANSFER OFFICE Chief Executive Officer and Dato’ Paduka (Dr.) Ir. Hj. Executive Director Tricor Investor & Issuing House Keizrul Bin Abdullah Services Sdn. Bhd Independent Members Unit 32-01, Level 32, Non-Executive Director Chua Kee Yat @ Koo Kee Yat Tower A, Vertical Business Suite, Independent Avenue 3, Bangsar South, Kek Chin Wu Non-Executive Director No. 8, Jalan Kerinchi, Independent 59200 Kuala Lumpur. Non-Executive Director Kek Chin Wu Telephone No. : (+603) 2783 9299 Independent Facsimile No. : (+603) 2783 9222 Chua Kee Yat @ Koo Kee Yat Non-Executive Director Independent REGISTERED OFFICE Non-Executive Director NOMINATION COMMITTEE Unit 30-01, Level 30, Chairman Tower A, Vertical Business Suite, Dato’ Paduka (Dr.) Ir. Hj. Keizrul Avenue 3, Bangsar South, Bin Abdullah No.8, Jalan Kerinchi, Independent 59200 Kuala Lumpur Non-Executive Director Telephone No. : (+603) 2783 9191 Facsimile No. : (+603) 2783 9111 Members Chua Kee Yat @ Koo Kee Yat AUDITOR Independent Non-Executive Director Ernst & Young (AF: 0039) Suite 11.2, Level 11, Kek Chin Wu Menara Pelangi 2, Independent Jalan Kuning, Taman Pelangi Non-Executive Director 80400 Johor Bahru, Johor Darul Takzim Telephone No. : (+607) 334 1740 Facsimile No. : (+607) 334 1749 Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 3 KIMLUN CORPORATION BERHAD 3 Annual Report 2016 CORPORATE STRUCTURE 100% 100% 100% KIMLUN SDN BHD I-BUILDTECH KL BUILDING (35618-A) SOLUTIONS PTE LTD MATERIALS SDN BHD (200809211G) (1166243-X) 100% 100% SPC INDUSTRIES KIMLUN LAND SDN BHD SDN BHD (260954-W) (926350-P) 30% 60% 51% ZECON KIMLUN KIMLUN SUPERIOR ROCK PROJECTS CONSORTIUM SDN BHD CREST SDN BHD SDN BHD (1178886-P) (1204362-W) (1136447-T) 100% 100% 51% KIMLUN MEDINI KITARAN LINTAS POSH ATLANTIC SDN BHD SDN BHD SDN BHD (1026987-U) (1134262-T) (924771-U) Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 4 KIMLUN CORPORATION BERHAD 4 Annual Report 2016 CORP MILEST 1977 2005 • Our humble beginnings started • KLSB ventured into when Kimlun Earthworks Sdn specialised infrastructure Bhd was incorporated construction by constructing the Tanjung Puteri flyover in Johor Bahru 1994 • KLSB ventured into Klang • Kimlun Earthworks Sdn Bhd Valley with the construction changed its name to Kimlun of 70 units of semi detached Sdn Bhd (“KLSB”) houses • SPC secured its first sales 1997-2002 contract for the supply of • KLSB Involved in building concrete tunnel lining construction and infrastructure segments to Singapore MRT projects with contract value project less than RM20.0 million each in Johor, Malaysia 2006 • KLSB secured specialised 2002 infrastructure construction • SPC Industries Sdn Bhd (“SPC”) project for the upgrading commenced its pre-cast works of the Perling concrete business Interchange in Johor Bahru 2003 2007 • KLSB secured its first contract • KLSB was accredited the with a value exceeding RM20.0 “ISO 9001:2000, Quality million for the construction of Management System” apartments and townhouses certification • SPC was accredited with ISO9001:2000 Quality Management 2008 • KLSB secured the project for the construction of the 2004 elevated interchangealong • SPC supplied concrete Johor Bahru Inner Ring Road sewerage tunnel segments to – Package 3B Jalan Abu Bakar Pantai Trunk Sewerage Bored Interchange with a contract Tunnel project in Kuala Lumpur value exceeding RM100 million • KLSB formed IBS Department to promote IBS construction methods • I-Buildtech Solutions Pte Ltd (“IBT”) was incorporated in Singapore Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 5 KIMLUN CORPORATION BERHAD 5 Annual Report 2016 ORATE ONES of the Projek Mass Rapid construction materials, and 2009 Transit Lembah Kelang: provision of quarry services • KLSB secured its first IBS Jajaran Sungai Buloh-Kajang and machinery rental services. building project from Iskandar for RM223.18 million Regional Development • KLSB secured more than Authority at a contract value RM400 million worth of IBS 2016 • KBMSB purchased and of RM142.81 million projects during 2012 subscribed for 51% equity • Kimlun Corporation Berhad • KLLSB incorporated a wholly- interest in Rock Projects Sdn was incorporated as an owned subsidiary, Kimlun Bhd (“RPSB”). The principal investment holding company Medini Sdn Bhd (“KMSB”). activities of RPSB are quarry The principal activities of and quarry related services. KMSB are property 2010 • KLSB purchased and investment and property • Kimlun Corporation Berhad subscribed for 30% equity development acquired KLSB, SPC and IBT interest in Zecon Kimlun in conjuction with its Consortium Sdn Bhd (“ZKC”). proposed initial public • ZKC was awarded a work offering exercise 2013 package contract for the • Kimlun Group launched its • Kimlun Corporation Berhad Proposed Development and first property development was successfully listed on the Upgrading of the Pan Borneo project, the Hyve SOHO and Main Market of Bursa Malaysia Highway in Sarawak for a Offices in Cyberjaya, Selangor Securities Berhad on 29 June contract sum of RM1.46 • KLSB secured its first contract 2010 billion. This signifies the with a value exceeding • Kimlun Corporation Berhad Group’s geographical RM290 million for the incorporated a new wholly- diversification to East construction of service owned subsidiary namely, Malaysia, and expansion of its apartments and ancillary Kimlun Land Sdn Bhd construction services to buildings (“KLLSB”) highway project. The Project • SPC set up a new precast is the single largest contract concrete products which the Group won in its 2011 manufacturing plant on a history. • KLLSB subscribed for 51% piece of land measuring • SPC won SBG and tunnel equity interest in Posh approximately 130 acres in lining segments supply Atlantic Sdn Bhd (“PASB”). Negeri Sembilan, and contracts in relation to Projek The principal activity of PASB commenced production 2008 Mass Rapid Transit Lembah is property development during the year • Kimlun Group ventured into Kelang: Jajaran Sungai Buloh- property development with Putrajaya Line, with aggregate its first development land in 2015 contract value of RM252 Cyberjaya, Selangor • Kimlun Corporation Berhad million. incorporated a wholly-owned • KLSB incorporated a 60%- subsidiary, KL Building owned subsidiary, Kimlun 2012 Materials Sdn Bhd (“KBMSB”). Superior Crest Sdn Bhd • SPC was appointed by Mass The principal activities of ("KSCSB"). The principal Rapid Transit Corporation Sdn KBMSB are manufacturing activity of KSCSB is building Bhd as the designated and trading of building and and infrastructure contractor. supplier for the supply of segmental box girders (“SBG”) to certain packages Kimlun AR2016.qxp_Kimlun AR2016 26/04/2017 10:11 AM Page 6 KIMLUN CORPORATION BERHAD 6 Annual Report 2016 DIRECTORS’ PROFILE PANG TIN @ PANG YON TIN Executive Chairman Pang Tin @ Pang Yon Tin, a Malaysian aged 70, 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 30 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 Chief Executive Officer & Executive Director Sim Tian Liang, a Malaysian aged 63, male, was appointed to the Board as Chief Executive Officer of Kimlun