Introduction

The Company attained its status as a listed company on the Kuala Lumpur Stock Exchange on 9 December 1996. This happy event also coincides with the Company's 20th Anniversary. On behalf of the Board, it is with great pleasure that I present the first Annual Report and Accounts for Industrial Concrete Products Berhad for the year ended 30 June 1997 as a listed company.

Financial Review

The Group has achieved a pre-tax profit of RM34.7 million on the back of RM258.8 million turnover, an increase of 19.2% over that of last financial year. The profit before taxation and extraordinary item but after minority interest was also 6.1% higher than the forcecast figure of RM32.4 million made by the Directors in the Prospectus for the offer of Company's shares in relation to the Company's listing on the Kuala Lumpur Stock Exchange.

With the above positive contribution, net earnings per share was recorded at 30.7 sen. After accounting for taxation, minority interests and extraordinary items, the profit attributable to shareholders amounted to RM29.2 million. The net tangible assets per share of the Group stood at RM 1.80.

At Company level, pre-tax profit amounted to RM32.2 million, a 20.2% increase as compared to RM26.8 million in the previous financial year ended 30 June 1996.

ISO 9002 Certification

Our latest factory in Jawi, Penang obtained its ISO 9002 certification in July 1997. With this certification, all the eight factories of the Company have obtained their ISO 9002 certification. For the record, ICP was the first PSC piles manufacturer in the country to obtain ISO 9002 certification when our Prai factory obtained it in 1992. Our subsidiary company, Expedient Resources Sdn Bhd also obtained its ISO 9002 certification during the year under review. These successes in obtaining ISO 9002 certifications for all our factories underline the importance that the Group places on quality in management and therefore our products.

Directorate

Mr Chew Kong Seng was appointed to the Board on 8 August 1996 and he was also appointed as the Chairman of the Audit Committee. Mr Ong Sin Oong was appointed to the Board as Alternate Director to Dato'Goh Chye Keat on 11 September 1997. On behalf of the Board, I would like to take this opportunity to welcome Mr Chew and Mr Ong to the Board.

Review of Operations

The Company achieved strong sales for its Pretensioned Spun Concrete (PSC) piles in the first half of its financial year. Turnover and operating profit for that period was 27.1% and 47.8% higher than that achieved in the same period of the last financial year respectively.

However, the second half of the financial year saw a slow down in the number of new projects coming into the market thus causing a drop of 6.6% in turnover as compared to the same period of the last financial year. Nonetheless, the turnover for the whole financial year saw a 9.8% increase over that of last financial year.

Operating profit for the first half of the financial year was 47.8% higher than that achieved in the same period of last financial year due to strong demand. The slow down in the second half of the financial year has affected the margin of the Company's products and caused the operating profit to achieve a marginal increase of 2.8% over the same period of the last financial year. This was made possible as the Company was able to enjoy economy of scale in its operation.

During the year, the company has added another line of production in its Lumut factory and also brough the number of factories from seven to eight by adding another factory in Jawi, Penang. With these additions, the Company has now eight factories with eleven production lines located in all strategic locations of the peninsula. The total production capacity of all its plants stood at 1,050,000 tonnes per annum.

Dividend

An interim dividend of 6.0% less income tax was paid on 15 April 1997. The Board of Directors recommends a final dividend of 5.0% less income tax, making a total of 11.0% less income tax. The final dividend will be paid on 31 December 1997, subject to shareholders' approval at the 20th Annual General Meeting of the Company.

Corporate Development

During the period under review, the Company completed its flotation exercise that led to the listing of the Company's shares on the main board of the Kuala Lumpur Stock Exchange on 9 December 1996.

In conjunction with the listing of the Company on the Kuala Lumpur Stock Exchange, the issued and paid-up capital of the Company was increased from RM15 million to RM99 million arising from the Bonus Issue of 23 for 5 and the Rights Issue of 1 for 1 in September 1996.

Prospects

The slow down in the second half of last financial year was an indication of general softening of the economic outlook in the country. Coupled with the measures in tightening credit by Bank Negara to the property sector during the year under review and also the financial turbulence experienced by the country, certain effect on the earnings of the Group may be felt.

The Group in recognising the adverse impact that the country may face in the coming months, has initiated and implemented certain cost savings measures in order to remain competitive. At the same time, the Group is also intensifying its marketing efforts to develop overseas markets for its products

However, as the long term economic fundamentals of the country remain strong, the Board of Directors expects the performance for the year ending 30 June 1998 will be satisfactory, barring unforeseen circumstances.

Thanks and Appreciation

On behalf of the Board, i would like to record our thanks and appreciation to the management and staff for their dedication and hard work. It is, indeed, heartening to note that many of them have served with the Group for more than 10 years. The successful growth of the Group in the past 20 years is a direct reflection of their loyalty, dedication and commitment while this year's credible performance despite the change of events in the external factors during the period under review, is testimony of the superb teamwork displayed by all. I am sure with this present teamwork, they will be able to bring the Group to a greater height.

I would like to take this opportunity to thank our shareholders, customers, suppliers and business partners for their continued support. Last but not least, I wish to thank my fellow Directors for their invaluable advice and support during the year.

___________________________
ROGER TAN KIM HOCK
Chairman