Golden Pharos Berhad : 4th Quarter 2020

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

Current quarter	Cumulative quarter
3 months ended	12 months ended
31.12.2020 31.12.2019	31.12.2020 31.12.2019
Unaudited Unaudited	Unaudited Unaudited
Note	RM'000 RM'000	RM'000 RM'000

Revenue	15,702	12,663	47,201	57,472
Cost of sales	(15,000)	(13,945)	(40,719)	(49,660)
Gross profit	702	(1,282)	6,482	7,812
Other operating income	1,103	392	2,784	935
Administrative expenses	(4,885)	(5,126)	(14,153)	(15,922)
Other operating expenses	(387)	(517)	(1,283)	(1,649)
Share of result of associate	192	(129)	192	197
Operating loss	(3,275)	(6,662)	(5,978)	(8,627)
Finance costs	(297)	(177)	(673)	(350)
Loss before tax	7	(3,572)	(6,839)	(6,651)	(8,977)
Income tax benefit/(expenses)	8	585	956	(133)	(229)
Loss for the period, net of tax	(2,987)	(5,883)	(6,784)	(9,206)
Loss for the period attributable to:
Owners of the parent	(2,987)	(5,883)	(6,784)	(9,206)
Loss per share attributable to owners
of the parent (sen per share)
- Basic	9	(2.20)	(4.34)	(5.00)	(6.79)
- Diluted	9	(2.12)	(4.18)	(4.82)	(6.54)

These condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2019 and the accompanying explanatory notes attached to these interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 (CONTINUED)

Note

Current quarter	Cumulative quarter
3 months ended	12 months ended
31.12.2020 31.12.2019	31.12.2020 31.12.2019
Unaudited Unaudited	Unaudited Unaudited
RM'000 RM'000	RM'000 RM'000

Loss for the period, net of tax

(2,987)

(5,883)

(6,784)

(9,206)

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Net gain/(loss) on fair value changes of fair value through other comprehensive income ("FVTOCI")

financial assets

Other comprehensive income/(loss) for the period, net of tax

455 455

778 778

(237)

(237)

848 848

Total comprehensive loss for the period, net of tax

(2,532)

(5,105)

(7,021) (8,358)

Total comprehensive loss for the period, net of tax attributable to:

Owners of the parent

(2,532)

(5,105)

(7,021) (8,358)These condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2019 and the accompanying

explanatory notes attached to these interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

31.12.2020	31.12.2019
Unaudited	Audited
Note	RM'000	RM'000
(restated)
Assets
Non-current assets
Property, plant and equipment	10	15,151	14,984
Right-of-use assets	25,933	26,712
Investment properties	18,284	18,540
Intangible assets	426	2,405
Goodwill	11	-	-
Investment in associates	3,571	3,514
Deferred tax assets	980	1,878
Investment securities	12	2,010	2,211
66,355	70,244
Current assets
Inventories	6,236	6,298
Trade and other receivables	12,511	13,323
Tax recoverable	3,148	1,590
Cash and bank balances	13	13,137	22,242
Assets classified as held for sale	20	-
35,052	43,453
Total assets	101,407	113,697
Equity and liabilities
Equity
Share capital	14
- ordinary shares	68,447	68,447
- redeemable preference shares	12,000	-
Retained earnings	8,152	14,936
Other reserves	(20,298)	(20,487)
Total equity	68,301	62,896
Non-current liabilities
Retirement benefit obligations	7,151	7,332
Borrowings	15	10,241	9,686
Lease liabilities	1	27
17,393	17,045
Current liabilities
Retirement benefit obligations	565	580
Borrowings	15	1,832	2,823
Lease liabilities	24	25
Trade and other payables	13,292	30,328
15,713	33,756
Total liabilities	33,106	50,801
Total equity and liabilities	101,407	113,697
Net assets per share attributable to
owners of the parent ("RM")	0.50	0.46

These condensed consolidated statement of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2019 and the accompanying explanatory notes attached to these interim financial statements.

GOLDEN PHAROS BERHAD ( Company No. 1986011003051 ) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

Ordinary	Redeemable
Equity,	Share	preference
total	capital	shares
RM'000	RM'000	RM'000
Opening balance at 1 January 2020	62,896	68,447	-
Loss for the period	(6,784)	-	-
Other comprehensive loss
- Net loss on fair value changes of FVTOCI financial	(237)	-	-
assets
Total comprehensive loss	(7,021)	-	-
Transaction with owners
- Grant of equity-settled share options to employees	426	-	-
- Issuance of redeemable preference shares	12,000	-	12,000
Closing balance at 31 December 2020	68,301	68,447	12,000
Opening balance at 1 January 2019	72,515	68,192	-
Loss for the period	(9,206)	-
Other comprehensive income
- Net gain on fair value changes of FVTOCI financial	848	-
assets
Total comprehensive income	(8,358)	-
Transaction with owners
- Grant of equity-settled share options to employees	476	255
- Dividend	(1,737)	-
Closing balance at 31 December 2019	62,896	68,447

Non-distributable

Total	Other
retained	reserves,	Fair value
earnings	total	reserve
RM'000	RM'000	RM'000
14,936	(20,487)	714
(6,784)	-	-
-	(237)	(237)
(6,784)	(237)	(237)
-	426	-
-	-	-
8,152	(20,298)	477
25,879	(21,556)	(134)
-	(9,206)	-	-
-	-	848	848
-	(9,206)	848	848
-	-	221	-
-	(1,737)	-	-
14,936	(20,487)	714

Attributable to owners of the parent
Distributable	Non-distributable
Equity	Reserve	Employee
contribution	arising	share
from	from	option
owners	merger	reserve
RM'000	RM'000	RM'000
1,262	(22,718)	255
-	-	-
-	-	-
-	-	-
-	-	426
-	-	-
1,262	(22,718)	681
1,262	(22,718)	34
-	-	-
-	-	-
-	-	-
-	-	221
-	-	-
1,262	(22,718)	255

These condensed consolidated statement of changes in equity should be read in conjunction with the audited financial statements for the year ended 31 December 2019 and the accompanying explanatory notes attached to these interim financial statements.

GOLDEN PHAROS BERHAD ( Company No. 1986011003051 ) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

12 months ended 31.12.2020 31.12.2019

Unaudited UnauditedNote

RM'000 RM'000

Operating activities

Loss before tax

Adjustments for:

Interest income

Dividend income

Interest expenses

Gain on disposal of property, plant and equipment

Depreciation of property, plant and equipment

Depreciation of investment properties

Depreciation on right-of-use assets

Property, plant and equipment written off

Impairment on property, plant and equipment

Reversal of allowance for impairment of trade and

other receivables

Provision for impairment loss on trade and other receivables

Inventories written off

Grant equity-settled share options to employees

Amortisation on intangible assets

Share of results of an associate

Provision for retirement benefits

Reversal for short-term accumulating

compensated absences

Total adjustments

Operating cash flows/(used in) before changes in working capital

Changes in working capital

Decrease in inventory

(Increase)/decrease in trade and other receivables

Decrease in trade and other payables

Total changes in working capital

Interest paid

Income taxes paid

Retirement benefits paid

Total changes in working capital

Net cash flows used in operating activities

Investing activities

(6,651)	(8,977)
(267)	(429)
(36)	(68)
673	350
(17)	(63)
2,551	2,698
488	508
779	779
2	-
51	-
(17)	-
843	38
5	71
426	476
1,979	2,611
(192)	(197)
774	803
(94)	94
7,948	7,671
1,297	(1,306)
57	1,045
(14)	2,637
(4,939)	(370)
(4,896)	3,312
(671)	(350)
(799)	(1,306)
(970)	(1,251)
(2,440)	(2,907)
(6,039)	(901)
Purchase of property, plant and equipment	(1,972)	(1,295)
Additional in investment property	(232)	-
Proceeds from disposal of property, plant and equipment	17	110
Withdrawal of deposit with licensed bank	451	-
Placement of deposit with licensed bank	-	(200)
Additional of intangible assets	-	(3,832)
Dividend received	135	68
Interest received	268	429
Dividend paid	-	(1,737)
Net cash flows used in investing activities	(1,333)	(6,457)
Financing activities
Contractual lease payment	(27)	(30)
Drawdown from borrowings	952	9,743
Repayment of borrowings	(1,206)	(788)
Net cash flows (used in)/from financing activities	(281)	8,925
Net (decrease)/increase in cash and cash equivalents	(7,653)	1,567
Cash and cash equivalents at 1 January	19,646	18,079
Cash and cash equivalents at 31 December	11,993	19,646

7

7

7

7

7

7

7

7

7

7

7

7

7

7

7

7

7

10

These condensed consolidated statement of cash flows should be read in conjunction with the audited financial statements for the year ended 31 December 2019 and the accompanying explanatory notes attached

to these interim financial statements.

EXPLANATORY NOTES PURSUANT TO MFRS 134

• 1. Corporate information

  Golden Pharos Berhad is a public limited liability company incorporated and domiciled in Malaysia, and is listed on Bursa Malaysia Securities Berhad.

• 2. Basis of preparation

  The condensed financial statements are unaudited and have been prepared in accordance with IAS 34, MFRS 134, Interim Financial Reporting and paragraph 9.22 of Bursa Malaysia Securities Berhad's Main

  Market Listing Requirements. They should also be read in conjunction with the financial statements of the Group for the year ended 31 December 2019 and the accompanying notes attached to the unaudited condensed consolidated financial statements.

• 3. Significant accounting policies

  The significant accounting policies adopted are consistent with those of the audited financial statements for the year ended 31 December 2019, except for the adoption of the following new and amended MFRSs and IC Interpretation which are applicable to its financial statements and are relevant to its operations:-

  On 1 January 2020, the Group adopted the following new and amended MFRSs and IC Interpretation mandatory for annual periods beginning on or after 1 January 2020:

  Description	Effective for
  annual
  periods
  beginning on
  or after
  Amendments to MFRS 2: Share-based Payment	1 January 2020
  Amendments to MFRS 3: Business Combinations	1 January 2020
  Amendments to MFRS 6: Exploration for and Evaluation
  of Mineral Resources	1 January 2020
  Amendments to MFRS 14: Regulatory Deferral Accounts	1 January 2020
  Amendments to MFRS 101: Presentation of Financial Statements	1 January 2020
  Amendments to MFRS 108: Accounting Policies, Changes
  in Accounting Estimates and Errors	1 January 2020
  Amendments to MFRS 134: Interim Financial Reporting	1 January 2020
  Amendments to MFRS 137: Provision, Contingent
  Liabilities and Contingent Asset	1 January 2020
  Amendments to MFRS 138: Intangible Assets	1 January 2020
  Amendments to IC Interpretation 12: Service Concession Agreements	1 January 2020
  Amendments to IC Interpretation 19: Extinguishing Financial
  Liabilities with Equity Instruments	1 January 2020
  Amendment to IC Interpretation 20: Stripping Costs in the
  Production Phase of a Surface Mine	1 January 2020
  Amendments to IC Interpretation 22: Foreign Currency
  Transactions and Advance Consideration	1 January 2020
  Amendments to IC Interpretation 132: Intangible
  Assets-Website Costs	1 January 2020

  The initial application of the abovementioned standards and interpretations did not have any material impact to the financial statements of the Group.

• 4. Changes in estimates

  There were no significant changes in estimates that have had a material effect in the current interim results.

• 5. Seasonality of operations

  During the quarter under review, the Group's principal business operations were adversely affected by the seasonal and cyclical factors such as rainy seasons.

• 6. Segment information

  The Group is organised into business units based on their products and services, and has three operating segments as follows:

  • (i) Harvesting, sawmilling, kiln drying of timber and sales of logs and right to log.

  • (ii) Manufacturing - manufacturing and trading of glass, veneer and woodchips.

  • (iii) Others - including investment holding, rental of properties, none of which are of a sufficient size to be reported separately.

Harvesting, sawmilling and kiln drying

Manufacturing

RM'000

RM'000

Others Consolidated RM'000 RM'000

Results for 3 months ended 31 December 2020

Operating revenue Other operating income Expenses

10,483

5,176

43 15,702

665

379

59 1,103

(12,385)

(7,083)

(1,101)

(20,569)

Share of profit of associate Loss before taxation

192

-

(1,045)

(1,528)

- (999)

192 (3,572)

Results for 3 months ended 31 December 2019

Operating revenue Other operating income Expenses

7,262

5,323

78

12,663

288

45

59

392

(10,353)

(8,044)

(1,368)

(19,765)

Share of profit of associate Loss before taxation

(129)

-

-

(129)

(2,932)

(2,676)

(1,231)

(6,839)

Harvesting, sawmilling and kiln drying

Manufacturing

RM'000

RM'000

Others Consolidated RM'000 RM'000

Results for 12 months ended 31 December 2020

Operating revenue Other operating income Expenses

30,726

16,356

2,007

636

(33,965)

(19,219)

Share of profit of associate Loss before taxation

192

-

(1,040)

(2,227)

119	47,201
141	2,784
(3,644)	(56,828)
-	192
(3,384)	(6,651)

• 6. Segment information (continued)Harvesting, sawmilling and kiln drying

  Manufacturing

  RM'000

  RM'000

  Others Consolidated RM'000 RM'000

  Results for 12 months ended 31 December 2019

  Operating revenue Other operating income Expenses

  Share of profit of associate Loss before taxation

• 7. Loss before tax

  36,723

  680

  (39,243)

  197

  (1,643)

  Included in the loss before taxation are the following items:

20,650

(23,748)

(2,921)

Current quarter 3 months ended

99

57,472

177

78

(4,590)

(67,581)

-

935

-

(4,413)

(8,977)

Cumulative quarter 12 months ended

197

31.12.2020	31.12.2019	31.12.2020	31.12.2019
RM'000	RM'000	RM'000	RM'000
Interest income	(166)	(203)	(267)	(429)
Dividend income	(36)	(68)	(36)	(68)
Interest expenses	297	177	673	350
Loss/(gain) on disposal of property, plant
and equipment	6	(53)	(17)	(63)
Depreciation of property, plant and
equipment	687	911	2,551	2,698
Depreciation of investment properties	113	130	488	508
Depreciation of right-of-use assets	196	197	779	779
Property, plant and equipment written off	-	-	2	-
Impairment on property, plant and
equipment	51	51
Reversal of allowance for impairment of
trade and other receivables	(17)	-	(17)	-
Provision for impairment loss on trade
and other receivables	843	38	843	38
Inventories written off	5	71	5	71
Grant equity-settled share options to
employees	240	118	426	476
Amortisation of intangible assets	(1,167)	652	1,979	2,611
Share of results of an associate	(192)	129	(192)	(197)
Provision for retirement benefits	198	246	774	803
Reversal/(provision) for short-term
accumulating compensated absences	-	150	(94)	94

8.	Income tax (benefit)/expenses
31.12.2020	31.12.2019	31.12.2020	31.12.2019
RM'000	RM'000	RM'000	RM'000
Current income tax	(152)	(555)	377	481
(Over)/underprovision of income tax in
respect of previous years	(1,143)	(3)	(1,143)	111
Deferred income tax	(36)	449	38	(59)
Under/(over) provision of deferred tax in
respect of previous years	746	(847)	861	(304)
(585)	(956)	133	229
Effective tax rate	16.4%	14.0%	-2.0%	-2.6%
9.

Current quarter 3 months ended

Cumulative quarter 12 months ended

Income tax expense is recognised in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. For the current financial period under review, the Group's effective tax rate was lower than statutory tax rate due to reversal temporary differences.

Loss per share

Basic loss per share amounts are calculated by dividing loss for the period, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial year.

Current quarter 3 months ended

Cumulative quarter 12 months ended

- In issue	(' 000)
- Effect of dilusion:share option	(' 000)
Basic loss per share
- Basic	(sen)
- Diluted	(sen)
10. Property, plant and equipment

31.12.2020	31.12.2019	31.12.2020	31.12.2019
Loss net of tax attributable to
owners of the parent used in the
computation of earnings
per share (RM'000)	(2,987)	(5,883)	(6,784)	(9,206)
No of ordinary shares
135,645	135,645	135,645	135,645
5,123	5,123	5,123	5,123
140,768	140,768	140,768	140,768
(2.20)	(4.34)	(5.00)	(6.79)
(2.12)	(4.18)	(4.82)	(6.54)

During the financial year ended 31 December 2020, the Group has acquired property, plant and equipment at a cost of RM1,972,000 (31 December 2019: RM1,295,000). As at 31 December 2020, the total depreciation charged for the property, plant and equipment was RM2,551,000 (31 December 2019: RM2,698,000). Property, plant and equipment with the carrying amount of RM2,000 were written off by the Group during the financial year ended 31 December 2020 (31 December 2019: RMNil). This has been included in other operating expenses in the statement of profit and loss and other comprehensive income.

The Group has also disposed of assets with a carrying amount of RMNil during the financial year ended 31 December 2020 (31 December 2019: RM47,000), resulting in a gain on disposal of RM17,000 (31 December 2019: RM63,000), recognised and included in other income in the statement of profit or loss and other comprehensive income.

11. Goodwill

Goodwill

RM'000

Cost:

At 1 January 2019/31 December 2019/31 December 2020

613

Accumulated impairment:

At 1 January 2019/31 December 2019/31 December 2020

(613)

Net carrying amount:

At 1 January 2019/31 December 2019/31 December 2020

-

12. Fair value hierarchy

The Group uses the following hierarchy for determining the fair value of all financial instruments carried at fair value:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

As at the reporting date, the Group held the following financial assets that are measured at fair value:

Total RM'000

Level 1

Level 2

Level 3

RM'000

RM'000

RM'000

31 December 2020

Fair value through other comprehensive income financial assets

Equity shares

2,010

2,010

-

-

31 December 2019

Fair value through other comprehensive income financial assets

Equity shares

2,211

2,211

-

-No transfer between any levels of the fair value hierarchy took place during the current interim period and the comparative period. There were also no changes in the purpose of any financial assets that subsequently resulted in a different classification of that assets.

The Group does not hold credit enhancements or collateral to mitigate credit risk. The carrying amount of financial assets therefore represents the potential credit risk.

13. Cash and bank balances

Cash and bank balances comprised the following amounts:

31.12.2020 31.12.2019

RM'000 RM'000

Cash at banks and in hand	6,633	10,603
Deposits in licensed banks	6,504	11,639
13,137	22,242
Less:
Bank overdraft	(355)	(1,356)
Deposits in licensed banks	(789)	(1,240)
Total cash and cash equivalents	11,993	19,646

14. Share capital

On 13 August 2020, the Company had issued 12,000,000 units of Redeemable Preference Shares ("RPS") in the Company to Terengganu Incorporated Sdn. Bhd. ("TISB") at RM1 per RPS as full settlement of the amount due to TISB of RM12 million in accordance with the terms and conditions of the Settlement Agreement.

15. Borrowings

16.

31.12.2020	31.12.2019
RM'000	RM'000
Current
Secured	1,832	2,823
Non-current
Secured	10,241	9,686
Total borrowings	12,073	12,509
Dividend

There was no dividend declared by the Company during the financial year ended 31 December 2020 (31 December 2019: Single tier first and final dividend of 1.27 sen per ordinary share amounting to RM1,737,000).

17. Commitments

31.12.2020 31.12.2019

RM'000

RM'000

Capital expenditure Approved and contracted for:

Plant and machinery Motor vehicles

477 637

417 200

Approved but not contracted for:

Plant and machinery

153 630

Motor vehicles

353 770

1,400

2,237

18. Related party transactions

The following table provides information on the transactions which have been entered into with related parties during the financial year ended 31 December 2020 and 31 December 2019 as well as the balances with the related parties as at 31 December 2020 and 31 December 2019:

Entities with significant influence over the Group:

Holding company

Terengganu Incorporated Sdn. Bhd. ("TISB")

31.12.2020 31.12.2019

A corporate shareholder

Lembaga Tabung Amanah Warisan Negeri Terengganu ("LTAWNT")

31.12.2020 31.12.2019

Secretarial

RM'0f0e0e

-

- -

Expenses	Amounts	Amounts
paid by	owed by	owed to
related	related	related
RpMar't0ie0s0	RpMar't0ie0s0	RpMar't0ie0s0
-	-	-
3	28	(24)	12,127
-	-	640
-	-	640

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

19. Performance review

• (a) Current Quarter vs Corresponding Quarter of Previous Period (4Q2020 vs 4Q2019)

  The Group's revenue for the quarter under review was RM15.70 million, 24% higher than RM12.66 million reported in the previous year's corresponding quarter. In terms of profitability, the Group reported a reduction in loss before tax from RM6.84 million in the quarter ended 31 December 2019 (4Q2019) to RM3.57 million in the quarter ended 31 December 2020 (4Q2020).

  The improved result was primarily contributed by the favourable performance of the Group's harvesting, sawmilling and kiln-drying segment.

  Harvesting, sawmilling and kiln drying segment

  The harvesting, sawmilling and kiln-drying segment reported a better result in profitability whereby loss before tax dropped significantly to RM1.05 million from RM2.93 million in 4Q2019. The factor contributed to the better result in the current quarter was due to higher sales volume of sawn timber by 49% increased from 3,372 tonne in 4Q2019 to 5,032 tonne in 4Q2020 as a result of better logs extraction during the quarter.

  Manufacturing segment

  The manufacturing segment which is the manufacturing activities of glass, veneer and woodchip showed an improvement in the performance during the 4Q2020 whereby loss before tax has significantly reduced from RM2.68 million recorded in 4Q2019 to RM1.53 million in 4Q2020. This favourable performance was due to lower expenses and higher other operating income reported by the segment.

  Other segment

  Other segment of the Group has recorded a loss before tax of RM1.00 million in the quarter under review, slightly improved from a loss before tax of RM1.23 million in the previous year's correponding quarter. This was mainly due to significant savings in segment's administrative expenses.

• (b) Current Period-to-date vs Previous Period-to-date (FY2020 vs FY2019)

  During the financial year ended 31 December 2020 (FY2020), the Group businesses were adversely affected by the Covid-19 pandemic and business temporary closure during the Movement Control Order ("MCO") period commenced from 18 March 2020 until 3 May 2020.

  However, the Group's performance in FY2020 was better, as the loss before tax reduced from RM8.98 million in the financial year ended 31 December 2019 (FY2019) to RM6.65 million. The favourable performance was contributed by effective cost saving measures undertaken by the Group.

  Harvesting, sawmilling and kiln drying segment

  In FY2020, the segment registered a revenue of RM30.73 million, a reduction by 16% as compared to RM36.72 million revenue reported in FY2019. The adverse performance in segment's revenue as compared against previous financial year were mainly related to the current Covid-19 pandemic situation. As a result, the quantity of sawn timber sold has reduced by 21% due to lower logs extraction during the period.

  Despite the significant reduction in revenue, the segment reported a lower loss before tax than the previous financial year due to cost savings in the segment's expenses and higher other operating income.

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

• 19. Performance review (continued)

  (b) Current Period-to-date vs Previous Period-to-date (FY2020 vs FY2019) (continued)

  Manufacturing segment

  Similarly, the manufacturing segment of the Group reported a reduction in loss before tax of RM2.23 million as compared to RM2.92 million in FY2019 despite the decline in revenue of 21% in FY2020, mainly due to effective cost saving measue undertaken by the segment.

  Other segment

  Other segment which refers to the investment holding and rental activity of the Group, has recorded a slight increase in revenue, mainly due to additional lease of building to the external party. In addition, the savings in the segment's operating expenses has also contributed to the improved performance of the segment during the year.

• 20. Material change in performance of operating segments of current quarter compared with immediate

  preceding quarter

Immediate

Current	preceding
quarter	quarter
31.12.2020	30.09.2020
RM'000	RM'000
Revenue	15,702	18,787
(Loss)/profit before tax	(3,572)	3,580

The Group's revenue for the quarter under review was RM15.70 million, decreased by 16% from RM18.79 million revenue reported in the quarter ended 30 September 2020 (3Q2020). Accordingly, the Group's profit before tax turned into loss before tax of RM3.57 million in the quarter under review.

The harvesting, sawmilling and kiln-drying segment reported loss before tax of RM1.05 million as compared to profit before tax of RM3.75 million in the 3Q2020. The segment's revenue was at RM10.48 million, 24% lower than the immediate preceding quarter of RM13.78 million. Higher revenue and profit before tax recorded in 3Q2020 was due to logs sales proceed via tender from the Group's concession amounted to RM3.68 million.

The manufacturing segment also reported an adverse performance with a loss before tax reported at RM1.53 million in the quarter under review as compared to profit before tax of RM0.74 million in the immediate preceding quarter. The reduction in profitability was a result from the increase in segment's expenses primarily in manufacturing and administrative expenses.

Similarly, other segment reported an increase in loss before tax by 10% from RM0.91 million reported in the immediate preceding quarter. The adverse performance in the quarter under review was contributed by the increase in certain administrative expenses.

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

21. Commentary on prospect

The Covid-19 pandemic and further imposition of MCO has adversely impacted the Group's operations especially on logging activity, such as potential delay in new licenses issuance. Further, next quarter will always be the challenge for the Group to register positive result due to logging operation will be severely affected by the rainy season.

• 22. Changes in material litigation

  There was no material litigation against the Group.

• 23. Dividend payable

  Please refer to Note 16 for details.

• 24. Risks and policies of derivatives

  The Group did not enter into any derivative during the financial year ended 31 December 2020 or the

• previous financial year ended 31 December 2019.

• 25. Disclosure of losses/gains arising from fair value changes of financial liabilities

  The Group did not have any financial liabilities measured at fair value through profit or loss as at 31

  December 2020 and 31 December 2019.

• 26. Auditors' report on preceding annual financial statements

  The adoption of the revised FRS 117 has resulted in a retrospective change in the accounting policy The auditors' report on the financial statements for the year ended 31 December 2019 was not qualified.

• 27. Authorised for issue

  The condensed consolidated interim financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 18 March 2021.

By order of the Board

Dato' Ahmad Nadzarudin bin Abdul Razak Chief Executive Officer