Kimlun Corporation Berhad Annual Report 2018

Property Development Ventures Our Property Development division will continue its effort to market the unsold stocks of the completed Hyve SOHO development and Taman Puteri residential development in Pekan Nenas, Johor. There is no other on-going development carried out by the Group on its existing land bank totalling 175 acres and the Group does not expect any new launching until second half of 2019, subject to the sentiment of the property market. We have entered into agreements to acquire the following properties (“New Land”) to increase our land bank to ensure the availability of land for future development: New Land Bank in the Pipe Line Kimlun Corporation Berhad 23 MANAGEMENT DISCUSSION AND ANALYSIS The purchase consideration of the New Land is expected to be satisfied by internally generated funds and bank borrowings. For illustrative purpose, assuming 70% of the purchase consideration is financed through bank borrowings and fully drawn down as at 31 December 2018, the Group’s gearing ratio is expected to increase from the audited ratio of 0.26 times as at 31 December 2018 to 0.33 times. Upon the completion of all the acquisitions, the total land bank of the Group will increase to 227 acres. Expected Purchase Completion Land Area, Tenure and Price of Land Use On Completion Location (RM) Acquisition of the Acquisition Within Iskandar Puteri, Iskandar Malaysia, Johor 82 million 2018 29.00 acres freehold agriculture land Within Meridin East township which is 2.5km away 22 million 2020 17.90 acres freehold commercial land from the Senai-Desaru Highway, and approximately 28 km from Johor Bahru city centre Within a matured township, Taman Sri Pulai Perdana, 14 million 2020 5.15 acres freehold commercial land approximately 24km from Johor Bahru city centre DIVIDEND POLICY While we do not adopt a formal dividend policy, our Company has been declaring dividends every year since its listing on the Main Market of Bursa Malaysia Securities Berhad in 2010. In respect of FY2018, the Board recommends a final single tier dividend of 3.7 sen per share. The recommended final dividend represents a pay-out ratio of approximately 20.1% of FY2018’s profit attributable to owners of the Company. Further, our Company has established a dividend reinvestment plan that provides our shareholders with an option to elect to reinvest their dividends in new shares in the Company. Our Company is always mindful to reward our loyal shareholders who have supported our growth over the years while trying to strike a balance with the funding needs at our different development phases. (cont’d)