K One Technology : Annual Report 2023 (View

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IR. EDWIN LIM BENG FOOK

Executive Chairman

Malaysian

Age 66

Annual Repor t 2023 05

DIRECTORS' PROFILE

Ir. Edwin Lim Beng Fook co-foundedK-One Technology Berhad in 2001. He was appointed as an Executive Director on 20 February 2001 and has been the Executive Chairman since its inception in 2001.

He holds a Bachelor of Science (Hons) in Engineering with Business Studies from Sheffield Hallam University, United Kingdom and a Master of Science in Mechanical Engineering from the University of Alberta, Canada. He is a professional engineer registered with the Board of Engineers, Malaysia and a corporate member of the Institution of Engineers, Malaysia. He is also a Chartered Engineer registered with the Institution of Engineering & Technology, United Kingdom.

Ir. Edwin Lim Beng Fook was awarded the Entrepreneur of the Year Award by the Malaysia-Canada Business Council in 2004 and the Alumni Award of Excellence by the University of Alberta in 2005. He was also the winner of the EY Entrepreneur of the Year Malaysia 2016 (Technology Category) organised by Ernst & Young.

His career spanned almost 20 years with three multinationals, namely; Mobil Oil (Malaysia) Sdn Bhd, Renold (Malaysia) Sdn Bhd and AMP Products (Malaysia) Sdn Bhd (now known as TE Connectivity).

His global experience in the electronics industry stems from him leading AMP as its Country General Manager in 1992, building up the Malaysian operation from a sales outfit to establishing from greenfield AMP's manufacturing facility and Research & Development Centre. In addition to his Country General Manager's role, he also held the dual role of being the Director, Automotive Industry responsible for the ASEAN region for a period of time.

His directorships in other companies in the K-One Group are K2 Meta Sdn Bhd (fka K2 Cloud Sdn Bhd), K-One Industry Sdn Bhd, K-One Wellness Sdn Bhd, K-One MediTech Sdn Bhd, K-One Manufacturing Sdn Bhd, K-One Electronics Sdn Bhd, K-One Venture Sdn Bhd, G-AsiaPacific Sdn Bhd and G-AsiaPacific (Vietnam) Company Limited.

DATO' MARTIN LIM SOON SENG

Chief Executive Officer

Malaysian

Age 61

Dato' Martin Lim Soon Seng, a co-founder was appointed as the Chief Executive Officer in 2001 and Executive Director of K-One Technology Berhad on 29 July 2002.

He holds both the Bachelor of Engineering (Hons) in Electronics Engineering and Master of Engineering in Electronics Engineering from the University of Hull, United Kingdom. He also holds a Master of Business Administration from the University of Coventry, United Kingdom. He is a registered Chartered Engineer of the Institution of Engineering & Technology, United Kingdom.

He is a member of the Remuneration Committee.

He worked in the UK as an engineer in a precision plastic moulding company after graduation, followed by career progression as an engineer, manager and finally Chief Executive Officer of TFP Precision Industries Sdn Bhd (a local/European joint venture) spanning a period of about 14 years.

His directorships in other companies in the K-One Group are K2 Meta Sdn Bhd (fka K2 Cloud Sdn Bhd), K-One Industry Sdn Bhd, K-One Wellness Sdn Bhd, K-One MediTech Sdn Bhd, K-One Manufacturing Sdn Bhd, K-One Venture Sdn Bhd, K-One Electronics Sdn Bhd, K-One International Ltd, G-AsiaPacific Sdn Bhd, P.T. Gasia Pasific Indo and G-AsiaPacific (Vietnam) Company Limited.

BJØRN BRÅTEN

Non-Independent

Non-Executive

Director

Norwegian

Age 66

Bjørn Bråten co-foundedK-One Technology Berhad in 2001 and was appointed as an Executive Director on 20 February 2001. He became a Non-IndependentNon-Executive Director on 19 December 2008.

He has a Diploma in Engineering from the Telecom College, Norway and Bachelor of Economics and Master in Management from the Norwegian School of Management, Norway.

He is a member of the Audit & Risk Management Committee and Nomination Committee.

He has been involved in the global communications business for more than 20 years and has served in a variety of leadership roles including Director of Marketing, Vice President and President/CEO for various international companies. He has worked closely with senior executives on projects worldwide including establishing greenfield and joint venture operations globally.

ANITA CHEW CHENG IM

Independent

Non-Executive

Director

Malaysian

Age 57

Anita Chew Cheng Im was appointed as an Independent Non-Executive Director of K-One Technology Berhad on 11 April 2016.

She holds a Bachelor of Economics, majoring in Accounting from Monash University, Australia.

She is the Chairman of the Remuneration Committee and a member of the Audit & Risk Management Committee and Nomination Committee.

She started her career as an audit assistant at KPMG, Melbourne in 1990. While in KPMG, she was engaged in the audit of the media, retail and mining industries.

In 1992, she joined the Corporate Finance Department of Bumiputra Merchant Bankers Berhad (now known as Alliance Investment Bank Berhad after merging with Amanah Bank Berhad) and was with the investment bank for approximately 5 years. Subsequently, she held the position of Director, Corporate Finance at Alliance Investment Bank Berhad from 1997 to 2003. From 2003 to 2007, she worked at HwangDBS Investment Bank Berhad as the Senior Vice President, Equity Capital Market.

She was mainly involved in corporate finance and related matters during her 15 year tenure in the various investment banks, having advised clients on numerous IPOs, fund raising and corporate and debt restructuring exercises.

She is currently an Independent Non-Executive Director of SKP Resources Berhad, Kimlun Corporation Berhad, Plytec Holding Berhad, Kuchai Development Berhad and an Independent Non-Executive Director of Fortress Minerals Limited, a company listed on the Catalist Board of the Singapore Exchange Trading Limited (SGX Ltd).

DATO' AZLAM SHAH BIN ALIAS

Independent

Non-Executive

Director

Malaysian

Age 63

Dato' Azlam Shah bin Alias was appointed as an Independent Non-Executive Director of K-One Technology Berhad on 2 February 2017.

He holds a Bachelor of Business Administration, majoring in Finance from the Eastern Michigan University, United States of America.

He is the chairman of the Nomination Committee and a member of the Audit & Risk Management Committee.

He first joined Mobil Oil Malaysia Sdn. Bhd. as a Retail Development Officer in 1987 and moved on to assume the position of Real Estate Outsourcing Manager for ExxonMobil Asia Pacific PLC based in Singapore.

In 2001, he joined Tesco Malaysia as its Regional Property Director and was concurrently an Alternate Director of Tesco Malaysia's Board and a key member of the Senior Leadership Board. He was previously the Senior Advisor reporting to the President of Lotus Stores Malaysia.

He is currently the Chairman of MR DIY Berhad.

Besides work matters, he is a member of the Board of Trustee of PPUMCare Fund of University Malaya Medical Center and advisor for UMCares, a Community and Sustainability Center of University Malaya.

He was previously actively involved in industry advocacy work representing the Malaysian International Chambers of Commerce and Industry (MICCI), British-Malaysia Chambers of Commerce and Malaysian Retailers Association (MRA) in various dialogues with the authorities. He was on the Boards of the European Union-Malaysia Chambers of Commerce and Industry (EU-MCCI) and MRA.

EDWARD KA YEN CHEE

Independent

Non-Executive

Director

Malaysian

Age 36

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DIRECTORS' PROFILE

Cont'd

Edward Ka Yen Chee was appointed as an Independent Non-Executive Director of K-One Technology Berhad on 1 August 2022.

He holds a Bachelor of Commerce (Hons), majoring in Accounting from University Tunku Abdul Rahman. He is a member of the Malaysian Institute of Accountants and Association of Chartered Certified Accountants. He is also registered with the Malaysian Financial Planning Council as a Financial Planner.

He is the chairman of the Audit & Risk Management Committee and a member of the Remuneration Committee.

He is a partner and co-founder of Messrs Chia, Ka & Partners PLT and co-founder of Numetric Cloud Sdn. Bhd.. Prior to co-founding the preceding companies, he was the Senior Managing Partner of ACMF Corporate Services Sdn. Bhd. (2019 to 2021) and the Chief Executive Officer of Projalma Sdn. Bhd. (2016 to 2018). In his earlier career, he was an Accountant and in related functions in various companies, including SG Global Support Services Sdn. Bhd., Amcorp Properties Bhd. and IOI Corporation Bhd..

In his current practice, he plays a key role in pioneering and developing the cloud accounting and business process outsourcing service in Malaysia. Additionally, he specializes in indirect tax advisory, business process outsourcing and corporate finance wherein he manages a portfolio of corporate clients in a board range of industries which encompass manufacturing, electrical and electronics, healthcare, construction and property development, plantations, amongst others.

The Group's sales revenue increased to RM167.2 million in 2023 from RM164.8 million in 2022, inching up by 1%.

EMS Business

The EMS business registered sales of RM92.1 million in 2023 versus RM97.1 million in 2022, marking a decline of 5%. The slowdown in the production of electronic headlamps to cater for reworks following an engineering change coupled with the demand normalization of new products launched last year, sluggish sales of industrial equipment and waning demand of COVID-19 Antigen saliva self-test kits as the COVID-19 pandemic transitioned to endemic caused the sales contraction. However, the spare parts and sub-assemblies supply business for maintenance purpose with K-One acting as the Asia Hub for a specific customer, medical/healthcare devices and floorcare products all recorded sales gains, but insufficient to make up for the demand decline experienced in the consumer electronics, industrial and healthcare/ medical supplies distribution segments.

The Cloud business generated sales of RM75.1 million in 2023 versus RM67.7 million in 2022, representing an increase of 11%. The Cloud business continued its robust growth driven by sturdy recurring revenue, streaming of new customers and the post-acquisition consolidation of sales revenue of P.T. Gasia Pasific Indo (GAP Indo) which became a subsidiary of the K-One Group on 19 June 2023. The New Normal whereby virtual meeting, e-learning and e-commerce are the trend and widely adopted during the COVID-19 pandemic lingered on to spur Cloud usage. The incessant support in granting financial and marketing incentives from the global Cloud principals provided the impetus to boost sales.

The Group turned around with profit attributable to equity holders of the parent company of RM0.3 million in 2023 from a loss of RM0.1 million in 2022. The turnaround was achieved by improved profitability in the Cloud business and reduction in loss in the EMS business to yield overall Group profitability.

EMS Earnings

Despite lower sales and unfavourable foreign exchange movements, the EMS business reduced its loss to RM2.8 million in 2023 from a loss of RM3.1 million in 2022, as the recognition of deferred tax income for unused losses defrayed some of the losses.

Cloud Earnings

The Cloud business made a profit of RM3.1 million in 2023 as compared to RM3.0 million in 2022, representing an increase of 3% due mainly to uptick in sales, financial incentives given by the principal for targets achievement and the profit contribution from GAP Indo based on 51% equity interest effective 19 June 2023.

PROSPECTIVE BUSINESS OUTLOOK

Although the COVID-19 had turned endemic in 2023, the year was still a bumpy ride with the Federal Reserve in US unveiling escalating interest rates almost throughout the year, rampant inflation, the intensification of the Russia- Ukraine war, the unabated China-US rivalry and the onset of the Israel-Palestine conflict towards the end of 2023. These geopolitical conflicts shall continue to rattle in 2024. Nevertheless, the K-One Group is cautiously looking forward to brighter prospects in 2024 as it will use its experience, wisdom and resources to navigate through the volatile and uncertain global economy.

For the EMS business, the Group believes the diversion of US business out of China will exacerbate, irrespective of who wins the US Presidency at the end of 2024. Towards this end, it is constantly availing itself as the EMS of choice for such potential manufacturing relocations by reaching out to potential customers via digital means or showcasing in trade exhibitions in US.

On the emerging healthcare/medical supplies (OBM/AR) business, it is making headways, in particular, the NASA- JPL licensed ventilator to be rebranded as Medkaire is expected to roll out towards year end 2024 once the relevant outstanding clinical tests and reports are submitted to MDA for approval.

For the Cloud business, it is expected to follow through with positive contributions in both the top and bottom lines in 2024, generally driven by the insatiable appetite of the markets in ASEAN in embracing Cloud to stay technologically competitive and relevant. Cloud is the new oil for digital transformation. With subsidiaries established in Indonesia and Vietnam respectively in the second half of 2023, it is poised to take advantage of local presence to give competition a run for the money in these markets which have immense Cloud market potential. The Group's expertise and competency excellence as endorsed by the numerous accolades such as Migration Competency Partner badge and Public Sector Partner badge affirmed by AWS and Exceptional Partnership Award and All-Star (Sales) Award bestowed by Google puts it in good position to expeditiously penetrate the fast-expanding ASEAN market.

On the same EMS front, it will follow through its 2-prong strategy to focus on the medical/healthcare business while nurturing the fairly stable consumer electronics, IoT and industrial segments. As one of the notable achievements in 2023, it managed to break into the solar energy industry (renewable energy) with potential follow through production of solar energy ancillary products in 2024 which may provide an upside.

The Group will not pay any dividend for 2023 as it prefers to conserve its cash to grow its business. Further, the surplus cash would come in handy to acquire synergistic business when the opportunity is presented.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express our deepest appreciation to all our customers, business associates, financiers and shareholders for their continued support, understanding and confidence in the Group. I also wish to express my sincere appreciation to the Management and staff for their perseverance, dedication and contribution in 2023.

Ir. Edwin Lim Beng Fook

Executive Chairman