Kim Hin Industry Berhad : KHIB Annual Report 2021 (Part 1)

VISION

To be a world class ceramic tile producer and distributor by providing products and services of superior values and by sustaining consistent long term growth in volume and profitability.

MISSION

We shall strive to be a leader in the ceramic industry by

• • achieving responsible and balanced commercial success

• • satisfying our customers' needs

• • enhancing shareholders' values and to provide fair returns to shareholders

• • providing rewarding careers to our employees

• • having mutually beneficial relationship with our business associates

• • participating and contributing effectively towards nation building

CORPORATE VALUES

• • A role model and a good corporate citizen.

• • Provide the highest quality products and values to our customers.

• • Commitment to our employees' welfare and well being.

• • To instill a culture of discipline, intergrity, teamwork and proactivity amongst our people.

Contents

02 - 05

06

Notice of Annual General Meeting Corporate Information

07

08 - 09

Group Corporate Structure Chairman's Statement

10 - 17

18 - 26

27 - 29

Management Discussion And Analysis Corporate Governance Overview Statement Audit Committee Report

30 - 32

33 - 44

Statement on Risk Management & Internal Control Sustainability Statement

45 - 47

Profile of Directors

48 - 49

50

51

52

Particulars of Key Senior Management Statement of Directors' Responsibilities Addtional Compliance Information Financial Highlights

•

54 - 57

Directors' Report

58

59 - 62

Statement by Directors and Statutory Declaration Independent Auditors' Report

63

64 - 65

Statements of Profit of Loss and Other Comprehensive Income Statements of Financial Position

66 - 67

68

69 - 70

71

Consolidated Statement of Changes in Equity Statement of Changes in Equity Consolidated Statement of Cash Flows Statement of Cash Flows

72 - 137

Notes to the Financial Statements

•

138 - 139 140

Statistics on Shareholdings Particular of the Group's Properties Form of Proxy

FINANCIAL STATEMENTS

ADDITIONAL INVESTOR INFORMATION

2

KIM HIN INDUSTRY BERHAD REGISTRATION NO.: 197301003569 (18203-V)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Forty-Ninth Annual General Meeting ("49th AGM") of KIM HIN INDUSTRY BERHAD ("Kim Hin" or "the Company") will be held at Kim Hin Industry Berhad's Conference Room, 4 ½ Mile, Kung Phin Road, Off Penrissen Road, 93250 Kuching, Sarawak, Malaysia on Monday, 30 May 2022 at 2.00 p.m. for the following businesses:

AGENDA

As Ordinary Business:

1.	To receive the Audited Financial Statements for the financial year ended 31 December 2021	[Please refer
together with the Reports of Directors and Auditors thereon.	to Explanatory
Note No. 1]
2.	To approve the payment of Directors' fees amounting to RM271,000 for the financial year ended	Resolution 1
31 December 2021.
3.	To re-elect the following Directors who shall retire by rotation pursuant to Clause 118 of the
Constitution of the Company, and being eligible, offer themselves for re-election:
(i) Dato' John Chua Seng Chai	Resolution 2
(ii) Mdm. Pauline Getrude Chua Hui Lin	Resolution 3
(iii) Mr. Fong Tshu Kwong	Resolution 4
4.	To re-appoint Messrs. Ernst & Young PLT as Auditors of the Company until the conclusion of the	Resolution 5
next Annual General Meeting and to authorise the Board of Directors to fix their remuneration.
Resolution 6
Resolution 7

To consider and if thought fit, with or without any modification, to pass the following Ordinary Resolutions:

As Special Business

• 5. Authority to allot and issue shares pursuant to Section 75 and Section 76 of the Companies Act 2016

  "THAT pursuant to Sections 75 and 76 of the Companies Act 2016, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued does not exceed ten percent (10%) of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company, subject always to the Companies Act 2016, the Constitution of the Company and approval of all relevant regulatory bodies being obtained for such allotment and issue."

• 6. Proposed renewal of shareholders' mandate for recurrent related party transactions of a revenue or trading nature ("Shareholders' Mandate")

  "THAT subject always to the Listing Requirements of Bursa Malaysia Securities Berhad, approval be hereby given to the Company and/or its subsidiaries ("Kim Hin Group") to enter into any of the categories of related party transactions which are recurrent, of a revenue or trading nature and are necessary for the day-to-day operations of Kim Hin Group as outlined in Section 3.2 of the Circular to Shareholders dated 28 April 2022 ("Circular"), with the specific related parties mentioned therein subject further to the followings:

  THAT approval be and is hereby given to the Company and its subsidiaries to enter into any of the category of recurrent related party transactions of a revenue or trading nature as set out in the Circular to shareholders dated 28 April 2022 with the specific related parties mentioned therein which are necessary for Kim Hin Group's day-to-day operations subject further to the following :

(i)the transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and not to the detriment of the minority shareholders; and

ANNUAL REPORT 2021

3

NOTICE OF ANNUAL GENERAL MEETING (CONT'D)

(ii)disclosure is made in the annual report for the breakdown of the aggregate value of the transactions conducted pursuant to the Shareholders' Mandate during the financial year where the aggregate value is equal to or more than the threshold prescribed under paragraph 10.09(1) of the Main Market Listing Requirements, and amongst others, based on the following information:-

• • the type of the recurrent related parties transactions made; and

• • the names of the related parties involved in each type of the recurrent related parties transactions made and their relationship with the Company.

AND THAT such approval shall continue to be in force until:

• (i) the conclusion of the next annual general meeting ("AGM") of the Company, at which time it will lapse, unless by an ordinary resolution passed at the meeting, the authority is renewed;

• (ii) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 340(2) of the Companies Act 2016 ("the Act") [but must not extend to such extension as may be allowed pursuant to Section 340(4) of the Act]; or

• (iii) revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier.

AND THAT the Board of Directors of the Company be and is hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the specified Proposed Shareholders'

Mandate.

AND THAT the estimated value given on the recurrent related party transactions specified in Appendix 1 of the Circular being provisional in nature, the Board of Directors of the Company be hereby authorised to agree to the actual amount or amounts thereof provided always that such amount or amounts comply with the review procedures set out in Section 3.5 of the Circular."

• 7. Proposed Retention of Independent Non-Executive Directors pursuant to Principle A Practice 5.3 of the Malaysia Code of Corporate Governance 2021 ("MCCG 2021")

  • (i) "THAT subject to the passing of Resolution 4, Mr. Fong Tshu Kwong who has served the Board as Independent Non-Executive Director of the Company for more than twelve (12) years since 21 May 2001, be and is hereby retained as Independent Non-Executive Director of the Company through a two-tier voting process until the conclusion of the next AGM in accordance with MCCG 2021."

    Resolution 8

  • (ii) "THAT Mr. Ong Ah Ba who has served the Board as Independent Non-Executive Director of the Company for more than twelve (12) years since 8 December 2009, be and is hereby retained as Independent Non-Executive Director of the Company through a two-tier voting process until the conclusion of the next AGM in accordance with MCCG 2021."

  Resolution 9

• 8. To transact any other business which may properly be transacted at an annual general meeting, due notice of which shall have been previously given in accordance with the Companies Act 2016 and the Company's Constitution.

By Order of the Board of Directors,

Yeo Puay Huang

[SSM PC No. 202008000727(LS 0000577)]

Company Secretary

Kuching, Sarawak Dated: 28 April 2022