Enlightenment
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Enlightenment Changing point of view, seeing the whole picture in a greater perspective, NTPM Holdings Berhad sets a different vision. The Company soars through the sky, reaching a new height to expand its view along Annual Report 2021 with customers and stakeholders. NTPM Holdings NTPM HOLDINGS BERHAD Registration No. 199601012313 (384662 U) No. 886, Jalan Bandar Baru, Sungai Kecil, Berhad will continue to aim greater, be the world- 14300 Nibong Tebal, Seberang Perai Selatan, Pulau Pinang. T : +604 593 1296 / +604 593 1326 F : +604 593 3373 E : [email protected] class manufacturer and distributor, shares the great www.ntpm.com.my view with everyone. Table of Contents 01 21 61 CORPORATE SUSTAINABILITY FINANCIAL INFORMATION STATEMENT STATEMENTS MANAGING DIRECTor’s CORPORATE LIST OF 02 REVIEW AND 32 GOVERNANCE 143 PROPERTIES MANAGEMENT OVERVIEW STATEMENT DISCUSSION & 146 ANALYSIS OF ANALYSIS AUDIT COMMITTEE SHAREHOLDINGS 52 REPORT 14 BOARD OF DIRECTors’ 56 STATEMENT ON PROFILE RISK MANAGEMENT AND INTERNAL CONTROL 17 KEY SENIOR 149 MANAGEMENT TEAM 59 ADDITIONAL COMPLIANCE INFORMATION NOTICE OF STATEMENT OF 60 THE DIRECTors’ ANNUAL RESPONSIBILITY IN GENERAL RELATION TO 18 THE FINANCIAL MEETING GROUP STATEMENTS FINANCIAL STATEMENT 154 ACCOMPANYING HIGHLIGHTS THE NOTICE OF ANNUAL GENERAL MEETING GROUP STRUCTURE 19 AND ACTIVITIES ADMINISTRATIVE 156 GUIDE PROXY FORM CORPORATE INFORMATION Board of Directors Investment Committee Lee See Jin Chang Kong Foo Chairman cum Managing Director Independent Non-Executive Director, Chairman Lee Chong Choon Lee See Jin Executive Director and Group Chief Executive Officer Chairman cum Managing Director, Member (“Group CEO”) Lee Chong Choon Lim Han Nge Executive Director and Group CEO, Member Senior Independent Non-Executive Director Tan Choon Thye Chang Kong Foo Independent Non-Executive Director, Member Independent Non-Executive Director Dr. Teoh Teik Toe Non-Independent Non-Executive Director Tan Choon Thye Head Office Independent Non-Executive Director No. 886, Jalan Bandar Baru, Sungai Kecil, 14300 Nibong Tebal, Seberang Perai Selatan, Pulau Pinang. Audit Committee Tel No: 04-593 1296/04-593 1326 Fax No: 04-593 3373 Email: [email protected] Chang Kong Foo Website: https://www.ntpm.com.my Independent Non-Executive Director, Chairman Lim Han Nge Company Secretaries Senior Independent Non-Executive Director, Member Thum Sook Fun (SSM PC No. 201908000139) (MIA 24701) Low Seow Wei (SSM PC No. 202008000437) (MAICSA 7053500) Dr. Teoh Teik Toe Non-Independent Non-Executive Director, Member Registered Office Tan Choon Thye Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, Independent Non-Executive Director, Member 10200 George Town, Pulau Pinang. Tel No: 04-263 1966 Fax No: 04-262 8544 Nominating Committee Auditors Lim Han Nge Ernst & Young PLT Senior Independent Chartered Accountants Non-Executive Director, Chairman 21st Floor, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang. Chang Kong Foo Independent Non-Executive Director, Member Principal Bankers Dr. Teoh Teik Toe CIMB Islamic Bank Berhad Non-Independent Non-Executive Director, Member Hong Leong Bank Berhad HSBC Bank Malaysia Berhad Malayan Banking Berhad Risk Management Committee United Overseas Bank (Malaysia) Bhd Lee Chong Choon Executive Director and Group CEO, Chairman Share Registrar Securities Services (Holdings) Sdn Bhd Lim Han Nge Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, Senior Independent Non-Executive Director, Member 10200 George Town, Pulau Pinang. Chang Kong Foo Tel No: 04-263 1966 Fax No: 04-262 8544 Independent Non-Executive Director, Member Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad Stock Name : NTPM Stock Code : 5066 Annual Report 2021 01 MANAGING DIRECtor’s REVIEW AND MANAGEMENT DISCUSSION & ANALYSIS OVERVIEW OF THE GROUP’S BUSINESS AND OPERATIONS On behalf of the Board of Directors of NTPM Holdings Berhad (“NTHB” or “the Company”) and its subsidiaries (“NTPM” or “the Group”), it gives me great pleasure to present the Annual Report and the Audited Financial Statements of the Group and the Company for the financial year ended 30 April 2021 (“FY2021”). NTHB is principally an investment holding company. The Group is principally involved in the manufacture and distribution of Tissue Paper and Personal Care products under several key brand names, such as Premier, Cutie, Royal Gold, Budget, Intimate, and Diapex. Founded by the undersigned in 1975 producing and selling jumbo rolls, a type of semi-finished product, for paper converters, NTPM has successfully developed an extensive distribution network for our products in Malaysia, Singapore, Thailand and Vietnam. Currently, NTPM has seventeen (17) sales offices cum delivery centres of which eleven (11) are located in Peninsular Malaysia, two (2) in Sarawak, one (1) in Sabah, one (1) in Singapore, one (1) in Thailand, and one (1) in Vietnam, as well as four (4) manufacturing facilities in Malaysia and Vietnam. FY2021 was a year filled with challenges for NTPM. The Coronavirus Disease 2019 (“COVID-19”) pandemic has caused disruptions to all segments of supply chains impacting production, transport and logistics, as well as affecting final demand. Despite such challenges, the resilient nature of our business coupled with the lower cost of waste paper and pulp stock utilised has resulted in the significant improvement in the Group’s profitability for FY2021. FINANCIAL REVIEW FY2021 FY2020 Changes RM’000 RM’000 RM’000 % Revenue 749,660 778,416 (28,756) -4% Other income 16,819 2,437 14,382 590% Raw materials and consumables used (299,266) (373,424) (74,158) -20% Employee benefits expenses (163,293) (149,946) 13,347 9% Other expenses (177,713) (181,857) (4,144) -2% Profit before interest, taxation, depreciation and amortisation (“EBITDA”) 126,207 75,626 50,581 67% Depreciation (44,922) (38,955) 5,967 15% Profit before interest and taxes (“EBIT”) 81,285 36,671 44,614 122% Finance costs (9,334) (14,276) (4,942) -35% Profit before taxation (“PBT”) 71,951 22,395 49,556 221% Taxation (8,683) (16,100) (7,417) -46% Profit after taxation (“PAT”) 63,268 6,295 56,973 905% Revenue: During FY2021, the Group has recorded a total revenue of RM749.7 million which was 4% or RM28.8 million lower than the RM778.4 million recorded in the financial year ended 30 April 2020 (“FY2020”). The decrease in revenue was mainly due to the lower sales volume from Tissue Paper products. Tissue Paper products demand on the consumer side surged in March and April 2020 due to panic buying when the movement control order was first imposed but eased back since May 2020. In addition, Away From Home (“AFH”) business segment has been severely impacted by the COVID-19 pandemic with the movement control order restrictions. With restaurants closed from dining in, only providing delivery or take away services, near collapse of tourism from travel restrictions and border closure, school closure, and reduced or no work place activities as people are encouraged or required to work from home, the demand for Tissue Paper products from the AFH business segment dropped significantly since March 2020, leading to the significant decrease in its sales volume in FY2021. 02 NTPM HOLDINGS BERHAD MANAGING DIRECtor’s REVIEW AND MANAGEMENT DISCUSSION & ANALYSIS (Cont’d) FINANCIAL REVIEW (Cont’d) EBITDA: Despite the decline in revenue, the Group has however achieved an EBITDA of RM126.2 million in FY2021, an increase of 67% as compared to RM75.6 million recorded in FY2020. The primary reasons for such an increase include: • the significant decline in cost of pulp, waste paper and imported product stock utilised; and • higher other income arising mainly from the gain on the disposal of a subsidiary amounting to RM12.6 million. However, the increase in EBITDA was offset by the unfavourable United States Dollar (“USD”): Ringgit Malaysia exchange rate movements, the increase in freight costs and the increase in employee benefits expenses. In FY2021, the Group has recorded an unrealised exchange loss of RM6.4 million. The Group’s employee benefits expenses have increased from RM149.9 million to RM163.3 million. Out of the increase, RM7.7 million was attributed to the increase in provision for the liability for defined benefits plan as a result of revision in the benefit formula in the renewed Collective Agreement. Under the expired Collective Agreement, employees with a minimum period of service of 5 years were entitled to retirement benefits calculated at 4% - 4.75% of total salary earned in service on attainment of the retirement age of 60 while under the renewed Collective Agreement, the entitled retirement benefits are calculated at 50% of last drawn monthly salary multiplied by the number of years of service. EBIT: The Group posted an EBIT of RM81.3 million in FY2021 compared to RM36.7 million in FY2020. The increase in FY2021 EBIT is however lower than the increase in EBITDA due to a higher depreciation expense being recorded in FY2021 when compared to FY2020. Finance Costs: The Group’s average net debt was reduced in FY2021 which has resulted in the decrease of net finance costs by 35% to RM9.3 million. Profit After Taxation: Reflecting the overall improvement in the Group’s performance, the Group has recorded a profit after taxation of RM63.3 million for FY2021, an increase of 905% as compared to the profit after taxation for FY2020. FY2021 FY2020 Changes RM’000 RM’000 RM’000 % Property, plant & equipment 554,148 538,836 15,312 3% Right of use assets 37,656 43,970 (6,314) -14% Trade and other receivables 134,575 165,293 (30,718) -19% Inventories 204,125 220,634 (16,509) -7% Other assets 60,350 56,778 3,572 6% Total Assets 990,854 1,025,511 (34,657) -3% Total loans and borrowings 345,107 427,962 (82,855) -19% Other liabilities 153,325 151,956 1,369 1% Total Liabilities 498,432 579,918 (81,486) -14% Total Assets: Total assets as at 30 April 2021 declined by 3% to RM990.9 million as compared to RM1,025.5 million as at 30 April 2020.