FROM ANNUAL REPORT 2016

PROFIT MARGINS

During the year, the Group embarked on a productivity improvement programme to closely monitor our costs and boost our efficiencies.

As a result, gross profit margins improved year-on-year from 9.8% to 11.4%. We have an internal aim to continually maintain gross profit margins at double-digit levels.

The Group’s performance in FY2016 was impacted by written off and impairment losses amounting to RM10.9 million. Despite this, the Group recorded a profit before tax (PBT) of RM10.1 million, a turnaround from last year’s loss making position. FY2016 PBT and net profit margins stood at 2.9% and 2.6% respectively.

In mitigating our collection risks, we have tightened our internal controls at the respective subsidiaries to closely assess the risks involved in each project that we undertake. We have also started to closely monitor the payment terms and schedules of our projects across all of the regional offices.

PROJECTED PROFIT FOR FYE2017

# 1: Director expected double digit growth. In 2016, 66% growth, let assume minimum 20% only.

# 2: http://www.kelington-group.com/images/reports/presentations/2017/Kelington_Analyst%20Briefing-2017-03-29-to-print.pdf

# 3: On 12 January 2017, Biocon ( Impairment loss on trade receivable made in 2016 )made a partial payment of RM1,342,022.00 (exclusive of interest and GST) to KTSB.

Non recurring is not expected to be repeat due to above tightened internal controls mentioned above.

CONCLUSION:

PROJECTED EPS OF RM0.116, WITH 12X PE (AVERAGE INDUSTRY OF 12X) , KGB SHALL BE AT RM1.39.