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Dear Shareholders,

The Malaysian economy proved resilient in the year under review, as exemplified by the nation’s healthy Gross Domestic Product (GDP) growth of 6.0% in 2014, compared to 4.7% in the previous year.

The unabated expansion in the domestic economy was boosted by strong consumer demand as well as sustained activity in the construction sector. Notably, the latter was chiefly led by the Government’s resolute focus in undertaking high-impact infrastructure developments towards enhancing transport connectivity, such as the Klang Valley Mass Rapid Transit (KVMRT), extensions to the existing Light Rail Transit (LRT) networks, and new expressways.

Our continuous pursuit of improving production efficiency, coupled with our commitment to quality, timely delivery, nationwide distribution network, and our brand name established for over four decades, proved to be core strengths that clearly worked in our favour. I am pleased to note that Malaysia Steel Works (KL) Bhd steadily gained market share in the year under review, even amidst a highly-competitive environment due to the imports of China-made steel products.

Therefore, on behalf of the Board of Directors of Masteel, it is my privilege to present to you the Annual Report and audited financial statements of the Group for the financial year ended 31 December 2014 (FY2014).


I am pleased to note that Masteel attained a new record in group revenue in our 43-year corporate history with RM1.5 billion sales in FY2014. This represents a 5.9% increase year-on-year from RM1.4 billion a year ago.

However, the higher sales was not reflected correspondingly in the Group’s bottomline, owing to the recognition of deferred tax liabilities of RM9.5 million, as well as unrealised foreign exchange loss of RM10.9 million due to the drastic weakening Malaysian Ringgit versus the United States Dollar in the second half of 2014.

These factors resulted in reduced profitability in the year under review, with the Group recording RM28.1 million and RM15.8 million in profit before tax (PBT) and net profits respectively. In comparison, the Group noted RM29.0 million and RM27.0 million in PBT and net profits respectively in the previous year.

Basic earnings per share stood at 6.99 sen in FY2014, from 12.38 sen a year ago.

Nonetheless, Masteel maintained a robust balance sheet with shareholders’ equity improving to RM576.8 million from RM553.3 million in the previous year.

The Group’s borrowings increased to RM313.3 million in end-FY2014 compared to RM289.2 million previously, while cash and cash equivalents amounted to RM42.2 million in end-FY2014 versus RM60.4 million a year ago. This was in tandem with the higher working capital requirements to support the larger revenue base, as well as to fund the expansion of the Group’s manufacturing facilities.

Still, the Group’s net gearing remained at a manageable level of 0.47 time in December 2014, from 0.41 time in the previous year end.


In keeping with our practice of distributing dividends since listing in 2005, the Board of Directors of Masteel are pleased to propose a first and final single tier dividend of 0.65 sen per share in respect of FY2014.

Subject to shareholders’ approval at the upcoming Annual General Meeting, the proposed dividend payout of RM1.6 million represents 10.0% of the Group’s net profit.


Through the years, Masteel has consistently upheld its commitment to being a caring corporate entity through its CSR programs.

In 2014, Masteel employees visited the Amitabha Centre at Old Klang Road, Kuala Lumpur, and Pusat Penjagaan Kanak-Kanak Cacat Taman Megah, Petaling Jaya, Selangor, which are welfare homes for senior citizens and disabled children respectively.

During these visits, our employees contributed towards heightening the comfort levels at these welfare homes by installing new ceiling fans and lighting. Additionally, the Group also provided donations in kind such as food supplies and wheelchairs to the residents.

Furthermore, the Group continued its support for the “Meals-on-Wheels” (MOW) programme organised by Ti-Ratana Penchala Community Centre, a non-profit charity organisation.

Masteel sponsored the operational expenses of the van used to carry out humanitarian activities, such as delivering groceries to the poor and providing workbooks to underprivileged children, as well as undertook the most recent visit to the flood-hit Ringlet New Village, Cameron Highlands.


Masteel believes whole-heartedly in integrating the highest principles of corporate governance into every facet of our operations. Such best practices form the bedrock of the Group as we continuously strive for business sustainability and profitability in increasing measure, with a view to enhance shareholders’ value.

The measures undertaken by the Group in this respect are listed in the Corporate Governance Statement.


Do allow me to put on record my heartfelt gratitude to fellow Board members, management team and the entire Masteel workforce for their utmost dedication and keen collaboration to steer the Group through a challenging year.

My appreciation also goes out to our business partners, customers, regulatory authorities, shareholders and other parties for their unrelenting support. We hope to count on your continued partnership in the coming years.

Thank you.

Dato’ Ikhwan Salim Bin Dato’ Haji Sujak

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