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Executive Chairman's Statement 2013



On behalf of the Board of Directors, it is my pleasure to present to you the Annual Report of Kim Hin Industry Berhad for the financial year ended 31 December 2013.


BUSINESS ENVIRONMENT & FINANCIAL PERFORMANCE

The Malaysian economy expanded by 4.7% in 2013, driven by the continued strong growth in domestic demand amidst the weaker external environment recorded in the first half of the year. Strong domestic demands from the residential and civil engineering sub-sectors had contributed to the continued strong growth of the construction sector.

During the current financial year under review, revenue of the Group improved to RM 261.1 million from RM246.6 million as compared with the preceding financial year ended 31 December 2012. All geographical segments of the Group's operation, with the exception of Australia operation, registered an increase in revenue for the current financial year, due to improved demands in domestic markets of the respective segments.

The Group recorded a profit before tax of RM 5.5 million for the current financial year.




DIVIDEND

The Board has recommended a first and final dividend of 3% (tax exempt) for the financial year ended 31 December 2013. This declaration of dividend showed that the Company endeavors to commit itself in rewarding a fair and equitable return of investment to shareholders.

The declared dividend, if approved by the shareholders at the forthcoming Annual General Meeting, will be paid to shareholders in July 2014.


BUSINESS OUTLOOK AND PROSPECTS

The Malaysian economy is expected to remain on a steady growth path in 2014, expanding by 4.5%-5.5% with domestic demand continuing to be the key driver of growth. Private investment is forecast to register growth for the fifth consecutive year, driven by the ongoing implementation of multi-year projects and improvement in external demand. Public investment is projected to register a higher growth, supported by both Government and public enterprise capital spending. On the supply side, all economic sectors are expected to register positive growth in 2014. The construction sector is expected to continue recording high growth, albeit at a more moderate pace.

Going forward, the Group expects the ceramic tile market to remain challenging in view of the intense competition in domestic market, the continual high price level of liquefied petroleum gas and natural gas. In particular, the Malaysian Government has recently announced that the natural gas tariff for non-power commercial sector shall increase by RM 3.11 per mmbtu effective from 1 May 2014.

The Group shall remain vigilant to market changes and is alert to take on any opportunities that may arise from the domestic and overseas geographic markets that the Group operates in.


CORPORATE SOCIAL RESPONSIBILITY

The Group recognises the importance of being a socially responsible corporate citizen. The Group endeavors to treat its stakeholders to whom our business has an impact on, be it directly or indirectly, in a responsible manner.

Annually, the Group has been making contributions financially to various charitable organizations with the hope of making a positive difference to the lives of the less fortunate. The Group also donated ceramic tiles to schools, orphanage homes, and religious places in order to fulfill their needs for expansion or improvement of their premises. In October 2013, the Group sponsored ceramic tiles to SMK Bukit Kajang for their assembly hall with floor area of about 10,000 sq ft, which was destroyed by fire.

The Group also acknowledges that employees are its best assets and will continue to invest in staff development programmes so as to equip and develop our work force with both technical and soft skills. In addition, the Group also presented achievement awards to our employees' children who excelled in the government examinations. Sports and other activities were carried out with the full support and commitment of our employees, through Kimgres Club, the Group's sports club, with a view of providing a healthy lifestyle for our employees and their families.


APPRECIATION

To my fellow directors, I would like to thank them for their invaluable contribution, advice, support and continued commitment in driving the Group forward.

I would like to thank Mr. Vincent Gerald Khoo who retired on 22 May 2013 for his contributions to the Group during his tenure first as an Executive Director and later as a Non-Executive Director. Meanwhile, I would also like to take this opportunity to welcome Mr. Yong Lin Lin who was appointed as an Independent Non-Executive Director on 21 August 2013.

On behalf of the Board, I would like to express my sincere appreciation to our shareholders, the management and staff, our valued customers, vendors and all our stakeholders as well as business partners for their loyalty, perseverance, dedication and trust towards the Group. Together with the management and staff, we will continue to give our full commitment and strive for better performance in this challenging economic environment.





CHUA SENG HUAT
Executive Chairman
30 April 2014




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