AnnAik : ANNUAL REPORT YEAR 2021

Established since 1977 with 45 years solid track records

Warehouse holds over 10,000 stainless steel pipes, flanges, buttwelded fittings, low/high pressure fittings, valves, stub ends, and flat productsAwarded: ISO 9001:2015 standards for quality management operation as stainless steel producer and stockistOver 650 customers across the region

Shinsei steel flanges

Construct and operate industrial wastewater treatment plants in the PRCConsulting service in water resource management, including governmental and commercial operators in SingaporeConstruct and supply rural wastewater treatment equipment in the PRC

Awarded ISO 9001:2015, TUV, CRN, and ClassNK certification and approved for international product standard complianceServe a wide base of customers

This Annual Report has been prepared by the Company and its contents have been reviewed by the Company's sponsor, Hong Leong Finance Limited (the "Sponsor"). The Annual Report has not been examined or approved by the SGX-ST. The SGX-ST assumes no responsibility for the contents of this Annual Report including the correctness of any of the statements or opinions made or reports contained in this Annual Report.

The contact person for the Sponsor is Ms Vera Leong, Vice President, Hong Leong Finance Limited, at 16 Raffles Quay, #01-05 Hong Leong Building, Singapore 048581, telephone: [phone].

Vision

About AnnAik

To be a global leader in stainless steel piping products, known for our outstanding quality and unique upstream and downstream capabilities, from manufacturing to distribution to engineering construction and environmental business.

Tracing its beginning to 1977, AnnAik Limited is today a manufacturer of forged steel flanges, and a distributor of over 10,000 stainless steel pipes, flanges, buttwelded fittings, low/high pressure fittings, valves, stub ends, and flat products. AnnAik also engages in providing environmental services in the PRC and Singapore to governmental and commercial operators.

AnnAik's manufacturing operations are certified and awarded with ISO 9001:2015, TUV, CRN and ClassNK certification and approved for international product standard compliance. The reliable quality of AnnAik's products under "SHINSEI" brand also make us greatly sought after by a wide base of customers from around the world.

Similarly, the distribution division serves over 650 customers globally. Awarded: ISO 9001:2015 standards for quality management operation as stainless steel producer and stockist, AnnAik also went on to achieve bizSAFE Level 3 accreditation in 2014.

In 2005, the Group diversified into environmental business by securing contracts to build wastewater treatment plants in the PRC. Today, the Group not only has eight wastewater treatment plants in the PRC under Build-Own-Transfer ("BOT") or Build-Own-Operate ("BOO") concept, we have also expanded our service offerings to include consulting services in water resource management to governmental and commercial operators in Singapore, as well as the construction and supply of rural wastewater treatment equipment and system in the PRC.

Notably, AnnAik's capabilities in both upstream and downstream activities have enabled us to enhance our efficiency and cost competitiveness in our business operations. Furthermore, the use of our products in diverse industries ranging from heavy-duty to light-duty industries such as marine engineering, shipbuilding and repair, oil and gas, petrochemical, semiconductor as well as the utilities sector has empowered the Group to build a sustainable business.

Contents

02	Chairman's Message	11	Corporate Governance Report
04	Board of Directors	37	Financial Statements
06	Group Structure	124	Statistics of Shareholdings
07	Operations Review	126	Statistics of Warrantholdings
08	Financial Highlights	127	Notice of Annual General Meeting
Proxy Form

Chairman's Message

Dear Shareholders,

Persevering through the challenges

in the second year of COVID-19

(Coronavirus Disease 2019) pandemic,

AnnAik has grown stronger in all

business divisions and delivered a

remarkable profit in FY2021. Our

previous strategy of "Sustaining Steel

Business and Growing Environmental

Business" has paid-off well as

distribution and manufacturing of

steel flanges divisions benefitted from

the hike in steel prices and strong

demand since early of FY2021. We

also continue with the strategy of

investment and resource allocation

through expansion and upgrading

of wastewater treatment plants for

environmental business division in

order to enhance assets value and

creating solid profit and cash flows

contribution to our Group on a long

term basis.

As the Singapore Government has adopted a living with COVID-19 approach, pushed for high vaccination rates, cautiously opening up of economic activities and connection with the World, Singapore's Gross Domestic Product ("GDP") grew by 7.6% in FY 2021. As a result, the Ministry of Trade and Industry ("MTI") is maintaining Singapore's GDP growth forecast at 3% to 5% for FY2022. Barring any unforeseen circumstances, such as constraints caused by COVID-19 pandemic, prolonged global supply disruptions and persistent inflation, we are expecting a sustainable operating environment for our business in FY2022.

As a socially responsible enterprise,

our management is committed to

play our part to adhere and adapt with

the local guidelines and policies from

time to time with the aim to live with

COVID-19. Going forward, we are also

ready for a new operating approach

post COVID-19.

Striking a Good Performance With the hike in steel prices, strong demand of steel products and predictable contribution of the environmental division, our Group has achieved a remarkable profit attributable to owners of the Company of S$3.09 million for the financial year ended 31 December 2021. Both distribution and manufacturing of steel flanges divisions registered a much higher turnover and profit contribution to the Group. As a reliable and long-established stockist of steel products in Singapore, we will continue to serve Singapore and regional markets with our strong stock holding, product ranges and value-added delivery services. Our diversification of trading business strategy from steel to non-steel products since middle of 2020 has garnered more solid momentum and achievement in FY2021. We will be developing our trading business under the distribution division to complement our core distribution of steel products and manufacturing of steel flanges businesses.

Our environmental business is maintaining its contribution of profit and cash flows to the Group in FY 2021. We are actively participating in some of the tenders in Singapore and the PRC in order to increase our order book of Engineering, Procurement and Construction ("EPC") projects. Recent completion of upgrading of two wastewater treatment plants; Changxing Linsheng Wastewater Treatment Co., Ltd and Changxing Wusheng Wastewater Treatment Co., Ltd in FY 2021 have enhanced our assets value and capability to meet stringent requirement set by Ministry of Environment in the PRC. It is heartening to note that the environmental division has proven to be growing, especially with the current strong support from the government in green environment investment.

Realising Growth Opportunities Another two upgrading of wastewater treatment projects in Changxing Lijiaxiang New Era Wastewater Treatment Co., Ltd and Shuanglin (Huzhou) Wastewater Treatment Co., Ltd are currently in construction and scheduled for completion in the 4th quarter of FY2022. Again, we have proven our ability in process design, adoption of treatment technology, management and investment capabilities for our environmental division. We will continue to look for similar opportunities in the PRC and South East Asia region for expansion.

The recent legal completion of the disposal of property and plant in our manufacturing division provided us with an asset-light strategy and low fixed cost operating environment in FY2022. The redeployment of cash from the disposal has also improved our Group's gearing ratio, quick asset ratio and net current assets position. With the availability of cash, we will review our potential businesses for any restructuring exercise in order to achieve higher contribution of profit and cash flows to the Group.

Looking Ahead

As more countries including Singapore continue to open its borders for quarantine-free travel and also adopt a high vaccination rate strategy to rebuild their economies with the aim to live with COVID-19, we are expecting business activities and volume that will continue to grow in FY2022.

The Group is working hard to look for new avenues of growth in the distribution & trading business, especially trading of non-steel products and its environmental business after the redeployment of cash from the completion of disposal of plants in its manufacturing business. We are committed to building a resilient team in both Singapore and overseas markets and carrying out intensive marketing to promote our core competencies in both the steel distribution, trading and water treatment businesses.

Dividend

The Board of Directors is pleased to propose a first and final one-tier tax-exempt dividend of 0.7 Singapore cent per share for the year ended

31 December 2021. The dividend will be paid out to shareholders upon approval at the annual general meeting.

In Appreciation

AnnAik had a productive and fruitful year in FY2021. We managed to deliver positive results despite the challenging macroeconomic circumstances. Thanking our shareholders, customers, vendors and business partners, their continued support, trust and confidence in us have strengthen our resolve to work harder and do better. Of course, we also recognise that these results would have been impossible without the invaluable contributions from our Board, management and staff.

We remain committed to realising our strategic objectives and achieving our profitability goals. Apart from keeping a strong focus on our existing businesses, we will also adapt our strategy in tandem with shifts in the economic landscape so as to stay competitive and ready to take advantage of new growth opportunities.

James Ow Chin Seng Executive Chairman cum CEO