2003 - KNM Steel Sdn Bhd

KNM GROUP BERHAD (521348-H)EXECUTIVE CHAIRMAN’S STATEMENTFINANCIAL HIGHLIGHTSThe Group achieved a post-acquisition turnoverof RM64.6 million for the financial year ended31 December 2003. No comparative figuresare available as the Group’s financial statementsare drawn up for the first time. The Group hasbeen in operation for only 8 months as at 31December 2003. Pre-tax post-acquisition profitis RM29.1 million while net post acquisitionprofit after tax is RM25.6 million.This performance was achieved on the back of more jobs being secured and recognised in the period under reviewand overall improvement in overhead costs control.DIVIDENDThe Board of Directors has recommended a first and final dividend of 5 sen tax exempt for the financial year ended 31December 2003 for approval of the shareholders at the Annual General Meeting.FUTURE PROSPECTS2004 is a year in which the world economy is expected to perform fairly strongly, barring unforeseen circumstancesthat may disrupt the anticipated cyclical recovery. Malaysia’s economy, which has enjoyed sustained growth duringsome difficult times, is also expected to experience accelerated growth of 5.5% to 6% as projected by our Government.Foreign direct investments are also expected to feature strongly in Malaysia in 2004, especially in the oil and gassector with the discovery of new oil fields offshore of Sabah and Terengganu and the proposed development ofmarginal oil fields.In line with these positive trends, we are implementing strategic business initiatives in expanding our business and tocontinuously improve our global market share for process equipment and storage facilities for the oil, gas andpetrochemical industries.CORPORATE GOVERNANCEAt KNM, we place great emphasis and recognition to ensure that our Group adheres to the highest standards ofcorporate governance and transparency in terms of corporate accountability to our shareholders. In achieving thisend, our Board of Directors will subject our corporate principles and practices to continuous review so that conscientiousaccountability for the Group’s effectiveness, operational efficiency and competitiveness will be sustained to enhancelong term shareholder value.APPRECIATIONI wish to pay tribute to all our employees who have rose and responded to the challenges faced during the year. Theirhard work and dedication in building the Group to what it is today is deeply appreciated.I also wish to thank our shareholders, business associates and clients for the continued confidence, support and trustthat they have placed in us. We will continue to strive towards the Group’s vision to become a top 10 manufacturer ofprocess equipment in the world.Lastly, my thanks also go to my colleagues onthe Board of Directors for their support andinvaluable guidance.YBHG. DATO’ ABDUL RANIBIN MOHD RAZALLIExecutive Chairman2003 ANNUAL REPORT13