On behalf of the Board of Directors, I am pleased to present the Annual Report of Melewar Industrial Group Berhad and its group of companies ("the Group") for the financial year ended 30 June 2022 ("FY2022"). FINANCIAL PERFORMANCE The Group's principal activity is in the mid-stream sector of the steel industry, focusing mainly on the manufacturing of Cold Rolled Coil ("CRC") steel sheets and Steel Tubes and Pipes ("Steel Tubes") through its 74.13% interest in its public listed subsidiary, Mycron Steel Berhad ("Mycron"). The other businesses of the Group, are conducted through its 100% owned subsidiaries, Ausgard Quick Assembly Systems Sdn Bhd ("AQAS") which is in the business of supplying commercial and residential buildings using the Industrialised Building System (IBS) to niche markets, and 3Bumi Sdn Bhd, which is involved in the trading of food products, food distribution, and retail business. With the fallout from COVID-19 and its economic consequences still ongoing, the market environment for the Group's business was tough in FY2022. Throughout the year, business levels were weighed down by the stringent measures imposed across the globe to contain recurring waves of the pandemic, coupled with the unprecedented Russian-Ukraine confl ict and sweeping sanctions, surging infl ation, as well as strained supply chains. Despite the climate of uncertainty, for the twelve months to 30 June 2022, the Group still managed to post a slight increase in revenue to RM752.2 million from RM738.3 million in FY2021, driven by higher average unit selling price for both the CRC and Steel Tubes. The Group registered a Profi t Before Tax (PBT) of RM60.9 million, 15.4% lower compared to the RM72.0 million PBT earned in FY2021. The reduction was owed mainly to an impairment provision of RM10.0 million made against the inventory at the CRC subsidiary and higher production shutdown costs, following six weeks of business shutdown in the fi rst three months of FY2022 under the Full Movement Control Order ("FMCO") due to the COVID-19 global pandemic. As at 30 June 2022, shareholders' equity stood at RM410.0 million, compared to RM370.8 million at the end of FY2021, with net asset value per share increasing in tandem to RM1.14 from RM1.03 at the previous year end. STEEL DIVISION Mycron encompasses the combined operations of three subsidiaries, namely Mycron Steel CRC Sdn Bhd ("MCRC"), Melewar Steel Tube Sdn Bhd ("MST") and Silver Victory Sdn Bhd ("SV"). MCRC is involved in the mid-stream sector of the steel industry, converting Hot Rolled Coil ("HRC") steel sheets into thinner gauge CRC steel sheets. MST is involved in the down-stream sector, in the manufacture of Steel Tubes, which are made from HRC or CRC. SV is involved in the trading of steel related products. CRC OPERATIONS REVIEW For FY2022, the CRC division's sales revenue decreased marginally by 0.6% to RM496.6 million and sales tonnage reduced by 33% to 121,023 tonnes. The CRC division registered a PBT of RM37.1 million for FY2022 even though sales tonnage decreased due to higher spreads achieved during the fi nancial year. During the fi rst fi nancial quarter (Q1), sales revenue of RM105.2 million was 1.8% higher than the previous quarter, while sales tonnage of 25,638 tonnes was 15.6% lower than the previous quarter. The lower sales tonnage was attributed to the nationwide mandatory lockdown, which limited the Q1 operations to only one and a half months. Despite the other one and a half irrecoverable months of operations, high selling prices and margin spreads buoyed a profi table quarter, and the CRC division registered a PBT of RM4.9 million. For the second fi nancial quarter (Q2), revenue increased signifi cantly by 81.2% to RM190.6 million and sales tonnage increased in tandem by 78.5% to 45,760 tonnes. The robust improvement was contributed by full resumption of the economy and manufacturing sector, coupled with a healthy order book carried forward. These collectively contributed to a PBT of RM20.1 million for the quarter. For the third fi nancial quarter (Q3), revenue declined by 42.8% to RM109.0 million and sales tonnage decreased by 39.9% to 27,516 tonnes. The decline was due to weak domestic demand where factors such as labour shortage, resurgence of domestic COVID-19 infections, and exorbitant freight and export costs placed signifi cant downward pressure on steel consumption. However, the low sales tonnage was counterpoised by high spreads, resulting in a PBT of RM15.8 million for the quarter. For the fourth fi nancial quarter (Q4), sales revenue declined by 15.8% to RM91.8 million. Sales tonnage decreased by 19.7% to 22,109 tonnes. The decline was attributed to weakened domestic demand due to signifi cant dip in steel prices resulting primarily from Russia's supply surplus, as well as waning demand from China due to COVID-19 outbreaks. The CRC division maintained its margins at a healthy level and the quarter would have remained profi table if not for inventory impairment resulting from the steep steel price drop. STEEL TUBE OPERATIONS REVIEW For FY2022, the Steel Tube division's sales revenue rose by 8.0% to RM294.6 million. However, sales tonnage reduced by 23.7% to 65,981 tonnes. The Steel Tube division registered a PBT of RM27.1 million for FY2022 even though sales tonnage had dropped due to higher spreads achieved during the fi nancial year. For the fi rst fi nancial quarter (Q1), sales revenue was RM51.6 million. Sales tonnage of 12,472 tonnes was 20.5% lower than the preceding quarter (Q4, FY2021). Deliveries were affected by the FMCO lockdowns during the quarter. The steel tube division remained profi table with a PBT of RM5.4 million for the quarter. For the second fi nancial quarter (Q2), total sales revenue improved by 49.2% to RM77.0 million. Sales tonnage similarly rose by 40.8% due to recovery in domestic demand of steel pipes and tubes after the lifting of Malaysia's COVID lockdown. PBT for the quarter increased to RM9.9 million. For the third fi nancial quarter (Q3), total sales revenue was RM76.3 million. Sales tonnage for the quarter was fl at at 16,963 tonnes. PBT of RM6.0 million for the quarter was 39.4% lower due to reduced spreads and steel industry shutdown due to seasonal Chinese New Year holidays. The fourth fi nancial quarter (Q4) saw sales revenue rose by 17.6% to RM89.7 million. Similarly, sales tonnage increased by 11.9% to 18,980 tonnes. The Steel Tube division registered a PBT of RM5.8 million for the quarter due to improved sales deliveries and steel spreads as the Russian-Ukraine war had caused steel prices to spike. FOOD TRADING AND RETAIL DIVISION The Food Trading and Retail Division remains a relatively small segment of the Group's overall operations and is still in its development stage. For the period under review, the Food Trading and Retail Division under 3Bumi Sdn Bhd recorded a Loss Before Tax of RM3.6 million, compared to a loss of RM1.5 million in the previous year. However, with concentrated efforts and more focused strategies, this division is expected to play a larger role in the Group's future activities. PROSPECTS FOR THE NEW FINANCIAL YEAR The country's GDP has rebounded since the COVID-19 restrictions were lifted and the country entered the 'endemic phase'. External shocks from the Russia-Ukraine confl ict and sanctions, raging infl ation, rate hikes, reverse capital fl ows, tightened liquidity, and global economic turmoil hampered industrial and business growth. With increased geopolitical risks in Europe and East Asia, these conditions are likely to persist into the first half of the next fi scal year. Specifi c to the domestic steel industry, the sullen market conditions will likely persist into the fi rst half of the next fi nancial year. Domestic steel demand will most likely continue to be stymied by constraint industrial activities (due to labour-shortages, supply-chain disruption, and falling durable goods export) amidst declining steel prices, and cautious consumer sentiment due to infl ation. The ripple effects of China's property crisis and Zero-COVID lockdowns are also expected to continue to weigh down on regional and domestic steel demand and prices. That, coupled with the rise in production costs, may result in the Group's steel segments confronting a triple whammy of lower sales volume, lower gross-margin, and higher costs in the fi rst half of the next fi nancial year. However, some comfort can be drawn on emerging signs that the 'steel-price-decline' is fl attening; and the Government's effort to resolve labour-supply issues is progressing. The second half of the next fi nancial year may offer respite and upside potential if the existing tumultuous global situation starts to wear out, instead of tipping further towards deterioration and deeper chasm. The Group's food trading and retail operations are expected to experience a gradual rebound in demand in FY2023. The infl ation of food prices has altered consumer food purchasing behaviour and patterns. Infl ation and supply disruption have affected consumer behaviour for meat and other items. Brands that are able to successfully deliver and market products will be well placed to capitalise on shifting consumer preferences. To remain competitive in the market, the Group will sharpen its focus on accelerating demand by adapting the business to shifting demand patterns and changes in market requirements in order to enhance customer engagement and improve market share. In summary, the outlook for the coming fi nancial year is highly volatile and challenging with signifi cant downside pressure on the bottom-line ANTI-CORRUPTION AND ANTI-FRAUD COMMITMENT The Group continues to pledge its commitment towards anti-corruption and anti-fraud. The Group reiterates its strict, zero-tolerance stance against corruption, bribery, and any form of abuse of power. In line with this, the Group revised its Whistleblowing Policy, Code of Conduct and Ethics, and implemented several new policies as part of its larger Anti-Corruption and Anti-Fraud Framework. The Group also expects all of its business partners and associates to operate in full compliance with the Group's policies and to adhere to the highest ethical, integrity, and professionalism standards. Suppliers, vendors, and contractors were made aware of the Group's anti-corruption stance and pledged compliance in their respective declarations. The Group will continue to raise anti-corruption awareness amongst its internal and external stakeholders. ACKNOWLEDGEMENT I would like to express my heartfelt gratitude to everyone in the Group for their dedication, determination, and hard work over the past year. As always, I am grateful to my fellow Board members for their invaluable contributions and wise counsel. Finally, we thank our valued business associates, customers, suppliers, and shareholders for your continued support during FY2022. TUNKU DATO' YAACOB KHYRA Executive Chairman