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Quarterly Report For The Financial Period Ended 31 May 2014

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

Unaudited Condensed Statement Of Financial Position
As At 31 May 2014

Review of Group's performance

Overall review for the period financial quarter ended 31 May 2014

During the financial year ended 31 May 2014, the Group posted revenue of RM1.87 billion compared with RM2.03 billion last year. Despite lower revenue, the Group posted a profit before taxation ("PBT") of RM44.5 million compared with RM4.2 million last year.

For the financial quarter ended 31 May 2014, the Group posted revenue of RM446.9 million compared with RM525.4 million last year. The Group recorded a PBT of RM6.9 million in the current financial quarter compared with RM5.5 million in the corresponding quarter last year.

The improved PBT in the current financial year is primarily attributed to the one-off gain of RM20.6 million arising from the disposal of a subsidiary, Sinsenmoh Transportation Pte Ltd ("SSM") in December 2013.

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 May 2014

Investment Holding

The investment holding segment reported a segmental loss for the quarter of RM9.6 million compared to a segmental loss of RM0.1 million in the corresponding quarter last year. The segmental loss in the current financial quarter includes impairments of RM5.0 million in a subsidiary.

Agricultural and Industrial Chemicals

The division posted revenue of RM377.1 million for the current financial quarter compared with RM447.6 million recorded in the corresponding quarter last year. The lower revenue growth was mainly attributed to the slower industrial chemical business in Indonesia and Singapore. Nevertheless, excellent performance from our local chemicals distribution unit and better profit margins from ethanol and phosphoric acid sales have partially mitigated the results of our regional operations. We have been able to achieve these because of short supply of certain products in the domestic market and we have benefited from sourcing the raw materials for our ethanol and phosphoric acid plants more competitively. The agricultural chemical business experienced a challenging quarter as demands for its products slowed due to competitions in the overseas markets. Correspondingly, segmental profit decreased to RM10.0 million from RM11.1 million a year ago.

Polymer

The Polymer Division achieved lower sales of RM28.2 million for the current financial quarter, which represents a decrease of 14.1% from RM32.8 million in the corresponding quarter last year. As a result, the Division posted lower segmental profit of RM3.1 million compared with RM3.4 million in the same quarter last year. The continued weaknesses of the Indonesian Rupiah and the increase in raw material prices have eroded our margins.

Logistics

The Logistics Division posted lower revenue of RM8.2 million compared to RM13.3 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 Group. Segmental profit decreased to RM0.6 million from RM2.3 million in the corresponding quarter last year. The results were also affected by the higher costs of repairs and maintenance for the upgrading of the assets.

Information Technology

The IT Division posted revenue of RM7.1 million compared with RM4.5 million in the corresponding quarter last year. The division broke even for the quarter compared to a segmental loss of RM0.5 million last year. The continued pressure on profit margins from the competitive biddings in the local IT industry remains the key problem for the division. Further, the division is incurring start-up costs relating to the establishment of a new IT related business.

Media

The Media division posted similar revenue of RM27.4 million compared with RM27.3 million in the corresponding financial quarter last year. Despite minimal growth in revenue, the division posted a segmental profit of RM5.8 million in the current financial quarter compared with a segment loss of RM5.8 million a year ago. The improvement in the segmental profits is primarily due to better operational efficiencies and the profitable new advertisement medium secured towards end of the previous financial year.

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.