Kimlun Corporation Berhad Annual Report 2019

Annual Report 2019 Kimlun Corporation Berhad CHAIRMAN’S STATEMENT Following the Malaysia Government’s implementation of a Movement Control Order (“MCO”) on 18 March 2020 in response to the Covid- 19 outbreak, all the Group’s operations have been shut down during the MCO period except for the minimum permitted critical works such as slope protection and delivery of products for permitted critical works. Consequentially, the Group’s revenue, earnings, cash flow and financial condition are affected negatively by the MCO. The Group’s revenue streams have been severely reduced during the MCO period due to the shutting down of the Group’s operations whilst the Group continues to incur substantially the same amount of fixed and recurring expenses such as depreciation, payroll expenses, rental and interest expenses. Though the Malaysia Government has allowed most business sectors to resume operations under the conditional MCO period beginning 4 May 2020, there are significant uncertainties in assessing how long the pandemic would last and the severity of its impact on the economy. The Group will continue to monitor the development of these events and have implemented the following measures to mitigate the impact of Covid-19 to the Group’s business: (i) take the necessary precautionary measures at our business premises and work sites in accordance with guidelines from health authorities and government bodies; (ii) frequent senior management operation meetings conducted via online platform to strategize and identify operational issues so that operations can resume smoothly post-MCO; (iii) communicate with suppliers as to their stocks readiness and look for alternative supplies to improve supply chain lead times where necessary; (iv) exploring cost cutting measures to preserve cash to support working capital requirements until the Covid-19 situation improves, such as suspending all non-essential operating and capital expenditure; and (v) exploring additional working capital credit facilities for contingency needs. Recent Corporate Development During FY2019, the Company implemented a dividend reinvestment plan (“DRP”) that provides the shareholders with an option to elect to reinvest their dividends in new shares of the Company (“New Shares”) from the entire FY2018 final dividend (“Fourth DRP”). 80.7% of shareholders had elected to reinvest their dividend pursuant to the Fourth DRP. The electable portion of the FY2018 final dividend which was not reinvested in new shares in the Company was paid in cash on 31 July 2019. Reward to Shareholders – Dividend 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 FY2019, the Board recommends a final single tier dividend of 3.3 sen per share. The recommended final dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting (“AGM”), and it represents a pay-out ratio of approximately 19.2% of FY2019’s profit attributable to owners of the Company. The Board has determined that the DRP will apply to the proposed final dividend in respect of FY2019 and all shareholders of the Company be given an option to reinvest the entire final dividend in New Shares (“Reinvestment Option”), subject to approvals being obtained from the following: (i) Bursa Securities for the listing of and quotation for the New Shares to be issued pursuant to the implementation of the DRP for the final dividend on the Main Market of Bursa Securities; (ii) Shareholders in the forthcoming AGM for the declaration of the final dividend and the issuance of such number of New Shares as may be required pursuant to the exercise of the Reinvestment Option by the shareholders; and (iii) Approval from other relevant authorities and/ or parties, if required. 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. Acknowledgement On behalf of the Board, I would like to extend my heartfelt gratitude to our shareholders, bankers, customers, business partners and regulatory authorities for their continued support, guidance and assistance. Your Board would like to express our appreciation to our management team and employees for their hard work and dedication. Pang Tin @ Pang Yon Tin Chairman 12 (cont’d)