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as extracted from Annual Report 2017

Chairman's Statement

Dato' Seri
(Dr.) Goh Eng Toon

Chairman

Dear Shareholders,
On behalf of the Board of Directors, it is my pleasure to present to you the Annual Report and Audited Financial Statements of Salcon Berhad (“Company”) and its Companies (“Group”) for the financial year ended 31 December 2017 ("FYE 2017").

The financial year 2017 ("FY 2017") was a challenging year for the Group as our performance was largely impacted by a demanding and competitive operating landscape. Despite these setbacks, our commitment to growing long term shareholder value remains a key priority for the Group. The Group’s 2017 financial results and segmental performance are further detailed in the Management Discussion & Analysis section of this Annual Report.

REWARDING SHAREHOLDERS

The Board is pleased to recommend a first and final single tier dividend of 1 sen per share, which is equivalent to RM 6.74 million and in line with our commitment to deliver consistent returns to our shareholders.

GROWING LONG TERM SHAREHOLDER VALUE

We remain committed to invest in the business to support growth via our 3-pronged strategy of strong project execution, optimising our business portfolio and establishing an appropriate risk profile.

The Group continues to employ international best practices in project management and execution to deliver results safely, reliably, on time and within budget. As the lead partner in the Langat 2 Water Treatment Plant project, the Group is committed to ensure that the single largest water contract in Malaysia will be completed by November 2018, to ensure sufficient supply of treated water to residents in the Klang Valley. The construction of the Langat Centralised Sewage Treatment Plant project is currently on-going and is making good progress.

In building long term shareholder value, the Group has laid the foundations through the optimization of its business portfolio to enable it to expand to new markets, new technologies and new geographical areas. The Group’s investment in technology services via Volksbahn Technologies Sdn Bhd (VBT) hold much promise in a growing and thriving industry where infrastructure and network needs are expected to grow and mobile broadband in particular, is seen as a growth driver in the local telecom industry. On the contrary, the China tourism e-commerce business became untenable as the business unit did not have a sustainable competitive advantage. Coupled with the Group’s limited resources, a difficult decision was made to wind down the operations.

Moving forward, the Group is cognizant of maintaining a prudent risk policy in order to deliver stable results, maintain financial strength and positive public image as well as the overall quality of services to benefit all stakeholders. The Group has in place an effective risk management process and appropriate governance structure to identify and mitigate risks whilst capitalizing on opportunities to ensure long term sustainable growth.

AWARDS AND RECOGNITION

The Group received accolades and awards in both operational and sustainability excellence performance.

The Group was awarded the ‘Pencapaian Cemerlang KPI YBM Tenaga, Teknologi Hijau & Air 2016’ by Jabatan Perkhidmatan Pembetungan (JPP) and Yayasan Hijau Malaysia (Yahijau) for meeting excellent standards in project management of the Package D55 – Construction of Sewage Pipes Network at Klang, Selangor project.

In the areas of environmental, social and governance, the Group has maintained its inclusion in the FTSE4Good Bursa Malaysia Index for the third consecutive year. As further testament to the Group’s commitment to timely and quality reporting of our sustainability performance to stakeholders, the Group was awarded the ‘Best Sustainability Reporting Award’ by Focus Malaysia’s Best Under Billion Awards (BUBA) for its initiative in providing stakeholders a holistic and comprehensive report on corporate governance, environment, workplace and the marketplace. Besides this, the Group was also awarded the CSR Malaysia Awards 2017 for pioneering Corporate Social Responsibility initiatives in the past year under its flagship CSR programme, the Salcon Smart Water Programme.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to express my heartfelt gratitude to my fellow Board of Directors for their invaluable advice, the management and staff for their hard work and commitment as well as our financiers, business partners and the relevant approving authorities for their continuous support.

The current challenges are but a temporary setback and I strongly believe that by working together as a team and continuing to mobilise our energies to deliver, we shall overcome these obstacles and will soon usher in a new and exciting chapter of growth for the Group.

Yours Sincerely,

Dato' Seri (Dr.) Goh Eng Toon

Chairman
Salcon Berhad