UOB-KAY HIAN HOLDINGS LIMITED

Financial Statements

And Dividend Announcement

For First Quarter Ended 31 March 2014

(Co. Ref. No. 200004464C)


These figures have not been audited.
1(a) A comprehensive income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.
COMPREHENSIVE INCOME STATEMENT The Group
3 months ended
31/03/2014
3 months ended
31/03/2013
Increase / (Decrease)
%

Revenue

S$'000 S$'000
Commission income 56,276 86,858 (35.2) Interest income 32,019 17,429 83.7
Dividend from quoted / unquoted securities - 7 N.M Other operating revenue 6,716 11,713 (42.7) Total revenue 95,011 116,007 (18.1) Foreign exchange gain 1,290 2,572 (49.8)

Total income 96,301 118,579 (18.8)

Costs and expenses

Commission expenses (13,918) (20,609) (32.5) Personnel expenses (26,059) (36,163) (27.9) Depreciation expenses (2,291) (2,238) 2.4
(Allowance for) Write back of allowance for
impairment of trade debtors & bad debts written
off (76) 178 (142.7)
Allowance for impairment of goodwill (100) - N.M Net fair value (loss) gain on financial assets /
liabilities through profit or loss (262) 220 (219.1)
Finance expenses (15,965) (3,426) 366.0
Other operating expenses (16,876) (16,584) 1.8

(75,547) (78,622)(3.9)


Profit before tax 20,754 39,957 (48.1) Income tax expense* (2,631) (6,723) (60.9)
Profit after tax 18,123 33,234 (45.5)

Other comprehensive income (net of tax):
Foreign currency translation difference 1,153 9,490 (87.9) Available-for-sale financial assets 979 818 19.7

2,132 10,308(79.3)

Total comprehensive income for the period 20,255 43,542 (53.5)

*Overprovision of taxation in respect of prior years in the 3 months ended 31 March 2014 is S$60,811. (3 months ended 31 March 2013: S$12,825)

N.M. = Not Meaningful.

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1(a) A comprehensive income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year (continued)
COMPREHENSIVE INCOME STATEMENT
(continued) The Group
3 months ended
31/03/2014
3 months ended
31/03/2013
Increase / (Decrease)
%
Profit attributable to: S$'000 S$'000
Owners of the Company 17,881 31,908 (44.0) Non-controlling interests 242 1,326 (81.7)

18,123 33,234(45.5)

Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests

2


1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

ASSETS Current assets

The Group The Company

As at 31/03/2014 As at 31/12/2013 As at 31/03/2014 As at 31/12/2013

S$'000 S$'000 S$'000 S$'000

Cash and bank balances 224,089 245,959 158 186

Outstanding contracts receivable 842,418 619,722 - - Trade receivables 1,607,911 1,445,253 - - Other financial assets, at fair value through profit or loss 22,869 57,951 - -

Other current assets 41,899 37,293 18,446 62,501

Derivative financial instruments

8 2,766

- -

Total current assets

2,739,194 2,408,944

18,604 62,687

Non-current assets

Trade and other receivables

90,821

91,710

189

190

Goodwill

7,460

7,536

-

-

Subsidiaries

-

-

349,374

349,374

Financial assets, available-for-sale

22,259

15,648

-

-

Trading rights in Exchanges

557

557

-

-

Memberships in Exchanges

211

209

-

-

Property, plant and equipment

58,203

59,997

-

-

Deferred tax assets

1,614 1,931

- -

Total non-current assets

181,125 177,588

349,563 349,564

Total assets

2,920,319 2,586,532

368,167 412,251

LIABILITIES AND EQUITY

Current liabilities

Outstanding contracts payable 783,242 573,588 - - Trade and other payables 90,459 133,641 98,277 142,254

Other financial liabilities, at fair value through profit or loss 44 - - - Borrowings 586,698 453,568 - - Debts issued 248,801 236,626 - - Income tax payable 17,597 15,509 - - Derivative financial instruments 2,728 1,882 - -

Total current liabilities 1,729,569 1,414,814 98,277 142,254

Non-current liabilities

Trade and other payables 2,215 2,215 - -

Deferred tax liabilities 1,144 1,174 - - Total non-current liabilities 3,359 3,389 - -

Total liabilities 1,732,928 1,418,203 98,277 142,254

Equity

Capital, reserves and non-controlling interests

Share capital 72,471 72,471 72,471 72,471

Reserves (62,132) (64,529) - - Retained earnings 1,158,128 1,140,166 197,419 197,526 Equity attributable to owners of the Company 1,168,467 1,148,108 269,890 269,997

Non-controlling interests 18,924 20,221 - -

Total equity 1,187,391 1,168,329 269,890 269,997 Total liabilities and equity 2,920,319 2,586,532 368,167 412,251

Clients' trust / segregated accounts

Bank balances

- with related parties 349,453 495,702 - -

- with non-related banks 606,350 546,829 - - Margin with clearing houses 11,720 16,880 - - Less: Amounts held in trust (967,523) (1,059,411)- -

- - - -

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1(b)(ii) Aggregate amount of group's borrowings and debt securities

The Group

As at 31/03/2014 As at 31/12/2013

Secured Unsecured Secured Unsecured

S$'000 S$'000 S$'000 S$'000

Amounts repayable in one year or less, or on demand 571,009 15,689 440,071 13,497

Amounts repayable after one year - - - -

As at period end, the Group had debts issued amounting to S$248,801,119. The debts issued, with derivative in the form of an embedded credit default swap or a put option, allow the Group to transfer the underlying assets to the note holders as full and final settlement upon the occurrence of a credit event.

Details of any collateral

Bank overdrafts and short term loans of subsidiaries amounting to S$571,009,417 are secured by a fixed charge over immovable fixed assets and a floating charge over all assets.

1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

The Group

3 months ended

31/03/2014

3 months ended

31/03/2013

Operating activities

S$'000 S$'000

Profit before income tax 20,754 39,957

Adjustments for:

Depreciation expenses 2,291 2,238 (Gain) Loss on disposal of property, plant and equipment (26) 8

Allowance (Write back of allowance) for trade receivables 103 (250) Allowance for impairment in goodwill 100 - Dividend income from quoted / unquoted securities - (7) Finance expenses 15,965 3,426

Exchange differences 370 996

Operating cash flow before working capital changes 39,557 46,368

Changes in operating assets and liabilities:

Financial assets / liabilities at fair value through profit or loss 35,184 1,840

Financial assets, available for sale (5,527) (6,491) Trade, outstanding contracts and other receivables (373,577) (282,807) Trade, outstanding contracts and other payables 167,597 126,197

Cash used in operations (136,766) (114,893)

Interest paid (15,965) (3,426) Income tax paid (320) (588)

Net cash used in operating activities (153,051) (118,907)

Investing activities

Payments for property, plant and equipment

(460)

(766)

Proceeds from disposal of property, plant and equipment

74

1

Proceeds from disposal of financial assets, available-for-sale

-

37

Acquisition of subsidiary

-

(18,239)

Dividends received from quoted / unquoted securities - 7

Net cash used in investing activities (386) (18,960)

Financing activities

Drawdown of short-term bank loans 136,594 142,814

Payment to non-controlling interest for additional interest in a subsidiary (1,193) -

Net cash (used in) from financing activities 135,401 142,814

Effects of exchange rate changes on the balance of cash and cash equivalents

held in foreign currencies (370) (996)

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1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. (continued)
The Group
3 months ended 3 months ended
31/03/2014
31/03/2013
Net (decrease) increase in cash and cash equivalents during the
S$'000 S$'000
financial period (18,406) 3,951
Cash and cash equivalents at beginning of the financial period 234,410 221,251
Cash and cash equivalents at end of the financial period 216,004 225,202

For the purpose of consolidated cash flow statement, the consolidated cash and cash equivalents comprise the following :
The Group
As at
31/03/2014
As at
31/03/2013
S$'000 S$'000
Cash and bank balances 224,089 271,558

Less: Bank overdrafts (8,085) (46,356) Cash and cash equivalents per consolidated cash flow statement 216,004 225,202
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

STATEMENT OF CHANGES IN EQUITY - THE GROUP

Share capital S$'000

Statutory reserve S$'000

Equity reserve S$'000

Fair value reserve S$'000

Foreign currency translation reserve S$'000

Retained earnings S$'000

Total attributable to members of the Company S$'000

Non- controlling interests S$'000

Total Equity S$'000

Balance at 1 January 2014 72,471 1,661 (1,246) 3,090 (68,034) 1,140,166 1,148,108 20,221 1,168,329
Total comprehensive income for the period
Profit for the period - - - - - 17,881 17,881 242 18,123
Other comprehensive income - 2 - 961 729 - 1,692 440 2,132

Total - 2 - 961 729 17,881 19,573 682 20,255
Acquisition of additional interest in a

subsidiary - 32 754 - - - 786 (1,979) (1,193) Transfer from statutory reserve - (81) - - - 81 - - - Balance at 31 March 2014 72,471 1,614 (492) 4,051 (67,305) 1,158,128 1,168,467 18,924 1,187,391

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1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. (continued)

STATEMENT OF CHANGES IN EQUITY - THE GROUP(continued)

Share capital S$'000

Statutory reserve S$'000

Equity reserve S$'000

Fair value reserve S$'000

Foreign currency translation reserve S$'000

Retained earnings S$'000

Total attributable to members of the Company S$'000

Non- controlling interests S$'000

Total Equity S$'000

Balance at 1 January 2013 72,471 1,542 (1,534) 2,447 (65,450) 1,076,092 1,085,568 21,946 1,107,514
Total comprehensive income for the period
Profit for the period - - - - - 31,908 31,908 1,326 33,234
Other comprehensive income - 87 - 873 8,060 - 9,020 1,288 10,308

Total - 87 - 873 8,060 31,908 40,928 2,614 43,542
Transfer to statutory reserve - 150 - - - (176) (26) 26 -

Balance at 31 March 2013 72,471 1,779 (1,534) 3,320 (57,390) 1,107,824 1,126,470 24,586 1,151,056

STATEMENT OF CHANGES IN EQUITY - THE COMPANY

Share capital S$'000
Retained earnings S$'000
Total
S$'000
Balance at 1 January 2014 72,471 197,526 269,997
Total comprehensive loss for first quarter (107) (107)

Balance at 31 March 2014 72,471 197,419 269,890

Share Capital S$'000
Retained earnings S$'000
Total
S$'000
Balance at 1 January 2013 72,471 170,960 243,431
Total comprehensive loss for first quarter - (94) (94)

Balance at 31 March 2013 72,471 170,866 243,337

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1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.
NIL
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding financial year.
31 March 2014 31 December 2013
No. of shares 724,709,009 724,709,009
1(d)(iv) A statement showing all sales, transfers, disposals, cancellation and / or use of treasury shares as at the end of the current financial period reported on.
Not applicable
2 Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on
Auditing 910. (Engagements to Review Financial Statements), or an equivalent standard)
The figures have not been audited or reviewed by the auditors.
3 Where the figures have been audited or reviewed, the auditors' report. (including any qualifications or emphasis of matter)
Not applicable.
4 Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
The Group and the Company have applied the same accounting policies in the financial statements for the current reporting period compared to the audited financial statements as at 31 December 2013.
5 If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
Not applicable.
6 Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.
The Group
Earnings per ordinary share for the period after deducting any provision for preference dividends:-
3 months ended 31/03/14
3 months ended 31/03/13
(i) Based on weighted average number of ordinary shares in issue 2.47 cents 4.40 cents
(ii) On a fully diluted basis 2.47 cents 4.40 cents

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7 Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on; and (b) immediately preceding financial year.
The Group The Company
Net asset value per ordinary share based on existing issued share
As at
31/03/2014
As at
31/12/2013
As at
31/03/2014
As at
31/12/2013
capital as at the end of the period reported on 161.23 cents 158.42 cents 37.24 cents 37.26 cents
8 A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affect the turnovers, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

Operating Profit and Expenses

Concerns over cooling measures and political uncertainties impinging the region weigh down investor sentiments. Trading volumes across regional markets were thin. Against this background of a challenging environment, the Group recorded a pre-tax profit of $20.8 million (2013: $40.0m).
Total revenue decreased 18.1% from $116.0m to $95.0m of which commission income accounted for $56.3m (2013: $86.9m). Interest income rose from $17.4m to $32.0m with higher investment activities whilst other operating income declined from $11.7m to $6.7m, in line with less corporate finance activities.
Commission and personnel expenses decreased along with lower brokerage but finance expenses were higher due to higher funding requirements.

Balance Sheet

The Group's net asset value position has remained healthy at S$1.2 billion as at 31 March 2014. There were no significant changes in the composition of Group balance sheet items.
9 Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
Not applicable.
10 A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
We expect weak investor sentiment to continue in the coming months in the absence of any positive economic catalyst to spur investor interest.
We anticipate trading activities to be rotational or event driven rather than a broad based recovery of the overall market. Market conditions would likely be better if we see inflow of institutional funds when macroeconomic indicators improve and regional political situations become clearer in some of the neighbouring countries.

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11

Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period (quarter) reported on?

None

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period (quarter) of the immediately preceding financial year?

None

(c) Date payable

Not applicable

(d) Books closure date

Not applicable

12

If no dividend has been declared/recommended, a statement to that effect.

No dividend has been declared / recommended for the quarter ended 31 March 2014

13 If the Group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPTs mandate has been obtained, a statement to that effect.

No IPT mandate has been obtained.

14 Confirmation of the Board
The Board of Directors hereby confirms that, to the best of its knowledge, nothing has come to its attention which may render the unaudited financial statements for the quarter ended 31 March 2014 to be false or misleading in any material aspect.
On behalf of the Board of Directors
Wee Ee-chao Esmond Choo
Managing Director Executive Director
BY ORDER OF THE BOARD
Wee Ee-chao
Managing Director
15 May 2014

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