AISB-QUARTERLY REPORT ON CONSOLIDATED RESULTS FOR

THE FIRST QUARTER ENDED 31MARCH 2014

-EXPLANATORY Notes to THE INTERIM FINANCIAL REPORT (Cont’d)

AMALGAMATED INDUSTRIAL STEEL BERHAD

(Company No. 9118-M)

QUARTERLY REPORT ON CONSOLIDATED RESULTS FOR THE FIRST FINANCIAL QUARTER ENDED 31MARCH 2014

EXPLANATORY Notes PURSUANT TO APPENDIX 9B OF THE
LISTING REQUIREMENTS OF BURSAMALAYSIAsECURITIES BERHAD
B1 / Review of Performance of the Group and Company
The Group’s revenue for the fourth quarter ended 31March 2014 (“Q1”) was RM23.9million, 12% lower than the revenue of RM27.2 million recorded in the previous corresponding period (“PCQ1”).Thedecrease was mainly attributable to the slower market condition in Q1 and the Group strategy to sell at higher pricings and higher margin.
Althoughthe Group recordedlower revenue but profit margin improved due to sales at lower sale volume but at better pricings. The lower expenses resulted from the plants consolidation exercise also contributed tolower net operating loss of RM0.37 millionin Q1 as compared to a net operating loss of RM1.3 million in PCQ1.
In line with the Group performance the Company reported a lower net operatinglossofRM0.33 millionin Q1as compared to a pre-tax loss of RM1.2 million in PCQ1.
B2 / Material Changes in the Group Quarterly Results
Compared to the Results of the Preceding Quarter
The Group recorded 3% higher revenue of RM23.9 million in Q1 as compared to the immediate preceding quarter (PQ4) revenue of RM23.2 million.
As a result of the slight increase in sale and profit margin, the Group registered a lowernet operatinglossof RM0.37 million in Q1as compared to a net operatingloss of RM0.98million in PQ4.
B3 / Current Year Prospects
The domestic market prices of mild steel hot-rolled coil(“HRC”) and cold-rolled coil (“CRC”)products was soft in first three months of 2014butare expected to recover slightly and are expected tofurther improve inthesubsequent quarters of 2014. With domestic selling prices stabilizing at the present levels, business activity cum margin is expected to improve with the Group’s plants consolidation exercise resulting in better cost efficiencies.
The strategy to reintroducecold-rolled products and other trading itemsand plants consolidation exerciseto bring down unit product cost to be more competitive will affect positively the results of 2014 onwards.
Management will manage its costs tightly going forward and also make a concerted effort to manage the Group’s working capital effectively by optimizing inventory level and improving its cash flow plan, as well as improve on operation efficiencies.
Various Government ETP projects are expected to impact positively on market demand at the end of the year. China’s dumping of steel products are expected to be lower due to stricter government agencies enforcement and China Government enforcement to cut over capacity and the effect of the weaker Ringgit on import cost.
B4 / Profit Forecast or Profit Guarantee
This is not applicable to the Group.
B5 / Taxation
Current Quarter
3 months ended / Cumulative Period-to-date
3 months ended
31.03.2014 / 31.03.2013 / 31.03.2014 / 31.03.2013

RM

/ RM /

RM

/ RM
In respect of :-
current period
- income tax / - / - / - / -
- deferred tax / (3,034) / 229,462 / (3,034) / 229,462
prior period
- income tax
- deferred tax / -
- / -
- / -
- / -
-
Tax (expense)/income / (3,034) / 229,462 / (3,034) / 229,462
The Company and one of its subsidiaries reported operating losses for the financial period ended 31March 2014 and the loss of the Company is available for utilization against future taxable profit.
B6 / Status of Corporate Proposals
There were no corporate proposals for the quarter.
B7 / Group Borrowings and Debt Securities
The total Group borrowings of RM45.4 million were unsecured, covered by way of negative pledges, and all are short term and were denominated in Ringgit Malaysia.
B8 / Pending Material Litigation
There was no pending material litigation for the quarter.
B9 / Dividend Payable
No interim dividend has been declared for the period ended 31March 2014 (31March 2013: Nil).
B10 / (Loss)/Earnings per Share
Current Quarter / Cumulative Period-to-date
3 months ended / 3 months ended
31.03.2014 / 31.03.2013 / 31.03.2014 / 31.03.2013
a) / Basic (loss)/earnings
per share
(Loss)/ profit for the financial period attributable to owners of the Parent (RM) / (370,400) / (1,037,982) / (370,400) / (1,037,982)
Weighted average
number of ordinary
shares in issue / 113,724,575 / 113,724,575 / 113,724,575 / 113,725,575
Basic (loss) / earning per share (Sen) / (0.33) / (0.91) / (0.33) / (0.91)
b) / Diluted earnings/ (loss) per share
This is not applicable to the Group.
B11 / Disclosure of realised and unrealised profits/ (losses)
Current financial year end
Current Preceding
Quarter Quarter
RM RM / As at the end of last financial year
RM
Total retained profits / (accumulated losses) of the Group:
-Realised
-Unrealised
Total Group retained profit as per consolidated accounts / (700,834) (495,286)
33,734,396 33,899,248
33,033,562 33,403,962 / (495,286)
33,899,248
33,403,962

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