It is my pleasure to present to you the financial statements of Cymao Holdings Berhad (the “Company”) and its subsidiaries (“the Group”) for the financial year ended 31 December 2010.

Performance Review

For the financial year ended 2010, the Group posted a turnover of RM123.67 million and a loss before taxation of RM2.94 million against RM124.16 million of turnover and a loss before taxation of RM5.79 million in the preceding year. The Group’s total sales volumes were recorded at 90,159m3 that made up of the timber logs of 16,917m3, and the plywood of 73,242m3, a 15% lower than the previous financial year. It was noted that the drop in sales volumes was most pronounced in the second half of the financial year. The main contributing factors were the weakening trend of the US Dollar in the second half of the financial year when the exchange loss suffered was as high as 14.3% and paying extra overtime wages due to labour shortage. In addition, the operating cost for plywood has increased significantly due to higher diesel, glue and lubricant prices coupled with lower production volumes for the financial year ended 2010.

Corporate Development

On 20th August 2010, the Company had incorporated a wholly-owned subsidiary, Hanswood Corporation Co. Ltd (“HWC”) in the Taiwan Republic of China to break new ground. HWC is expected to commence operation in the financial year ending 2011 and the intended business activity is to manufacture plywood for the domestic and export markets. The paid-up share capital of HWC is US$0.79 million and the investment is financed by internally generated fund.

Dividend

In view of the financial results, the Board does not recommend any dividend for the financial year ended 31 December 2010.

Outlook and Prospects

The Group will remain cautious on the impact of global economic slowdown, monitoring cost control and profitability of each production. Despite the present state of slow economic recovery, the Group will continue with its expansion to tap into the market opportunities in Taiwan via HWC.
The Group will continuously seek for new timber concession area which is crucial for the Group to secure a steady supply of logs for its plywood production. The Group will uphold its competitive edge and quality of its products by investing in automation so as to be less dependent on labour and expect on better recovery rate on the usage of raw materials.
The management will stay vigilant in the challenging business environment and continue to focus on its operational efficiency by adopting effective cost saving measures. The management will closely monitor on market development, assess major operational and financial risks to mitigate any possible negative impact.
Barring any unforeseen circumstances, the Board remains confidence of the Group’s better performance in the next financial year.

Appreciation

On behalf of the Board, I wish to convey my sincere appreciation to the directors, management and employees of the Group for their continued diligence and commitment.
I also wish to express my gratitude to our valued customers, suppliers and business associates for their support and confidence in us.
Lastly, to our shareholders, I wish to express my heartfelt appreciation for placing your confidence in the future of the Group.

Datuk Mohd. Zain Bin Omar
Chairman

Dated 16 April 2011