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Quarterly Report For The Financial Period Ended 31 August 2014

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Unaudited Condensed Consolidated Statement Of Comprehensive Income
For Financial Year Ended 31 August 2014

Unaudited Condensed Statement Of Financial Position
As At 31 August 2014

Review of Group's performance

Overall review for the period financial quarter ended 31 August 2014

During the financial quarter ended 31 August 2014, the Group posted revenue of RM414.3 million compared with RM490.2 million in the corresponding quarter as a result of lower sales contribution from the agricultural and industrial chemicals division. Consequently, the Group profit before tax ("PBT") declined to RM5.0 million in the current financial quarter compared with RM7.5 million in the corresponding quarter last year.

The effective rate of taxation for the Group is higher than the statutory tax rate mainly due to losses in certain subsidiaries that are not available for set-off against taxable profits in other companies within the Group.

Review of business segments for the financial quarter ended 31 August 2014

Investment Holding

The investment holding segment reported a similar segmental loss of RM4.2 million for the current financial quarter and corresponding quarter last year. The segmental loss is mainly due to corporate expenses incurred by the investment holding companies.

Agricultural and Industrial Chemicals

The division posted revenue of RM352.2 million for the current financial quarter compared with RM423.2 million recorded in the corresponding quarter last year. The lower revenue was mainly attributed to the lower sales in the Indonesian operations of the industrial chemicals business, which rationalised its products by discontinuing its loss making product-line. The agricultural chemical business also faced a slowdown in export sales in the current financial quarter on weaker demand from its overseas markets. Nevertheless, revenue from the agricultural chemical business is expected to improve in the following quarters. As a result, the division posted a lower segmental profit of RM8.4 million in the current financial quarter compared with RM12.8 million a year ago.

Polymer

The Polymer Division achieved lower sales of RM29.4 million for the current financial quarter, which represents a slight decrease of 1.9% from RM30.0 million in the corresponding quarter last year due to lower contribution by its manufacturing plant in Surabaya, Indonesia. Consequently, the Division registered lower PBT of RM2.6 million compared with RM3.2 million achieved in the same period last year. The continued weakening of the Indonesian Rupiah coupled with the competition in the domestic market has eroded its profit margins.

Logistics

The Logistics Division posted lower revenue of RM7.1 million compared to RM15.5 million in the corresponding quarter last year. The lower revenue was primarily due to the disposal of SSM in December 2013 which its results are no longer accounted for in the current financial quarter. Segmental profit decreased to RM0.6 million from RM1.7 million in the corresponding quarter last year. The results were also affected by higher costs of repairs and maintenance incurred for the assets.

Information Technology

The IT Division posted revenue of RM0.8 million compared with RM1.3 million in the corresponding quarter last year. The division broke even in the current financial quarter compared to a segmental loss of RM0.5 million last year. Despite lower revenue, the division posted improved segmental results due to better costs management.

Media

The Media division posted higher revenue of RM27.0 million compared with RM21.7 million in the corresponding financial quarter last year. In line with higher revenue, the division posted a segmental profit of RM1.0 million in the current financial quarter compared with a segment loss of RM1.1 million a year ago. The improvement in the segmental results is primarily due to better operational efficiencies and the higher advertising contracts secured and delivered.

Prospects

Among the key business segments, Agricultural and Industrial Chemical Division should perform satisfactorily. However, there is continued pressure on profit margins as product suppliers and logistic providers seek higher prices. Competitions in the agricultural chemical business are expected to intensify in the overseas markets due to aggressive price competitions. Polymer Division is expected to be satisfactory despite stiff competitions from cheaper imports. After undergoing structural and operational reorganisation in the past, Media division is now in a better position for future growth.

There remained uncertainties in the global economic conditions, which may have an impact to the Group's business, the Board will continue to exercise caution in managing the Group's business in the coming financial year. The Board will continue to explore ways to improve revenue growth while strengthening its operational and productivity efficiencies.

The Board is of the view that, barring unforeseen circumstances, the financial performance and prospects of the Group will be satisfactory in the next financial year.