FIRST SEMESTER SESSION 2021/2022(A211)

BPMN3023 STRATEGIC MANAGEMENT(F)

GROUP ASSIGNMENT:AUDIT REPORT EASTLAND EQUITY BERHAD

PREPARED FOR:

DR.RAWIYAH BINTI ABD HAMID

PREPARED BY:

GROUP 5

NAME NO MATRIC
LI CONGYI 256565

JINZIHAO 257057

TAN XUE WEI 261460

FATIN NABILAH BT ROSLAN 267596

UMI AFIFFAH BINTI OTHMAN 267668

SUBMISSION DATE:

12nd JANUARY 2022

 Table of Contents
1.0 INTRODUCTION.........................................................................................................................1
2.0 STRATEGIC ISSUES...................................................................................................................1
3.0 INTERNAL FORCES...................................................................................................................4
3.1 Company’s name....................................................................................................................4
3.2 Company’s type and industry.................................................................................................4
3.3 Vision, mission, objective and strategies................................................................................5
3.4 List of Board Directors...........................................................................................................7
3.5 List of Top Management Team...............................................................................................8
3.6 Organizational Structure.........................................................................................................8
3.7 Financial Analysis.................................................................................................................11
4.0 EXTERNAL FORCES...............................................................................................................18
4.1 STEEP Analysis....................................................................................................................18
4.1.1 Political.....................................................................................................................19
4.1.2 Economic..................................................................................................................20
4.1.3 Sociocultural.............................................................................................................21
4.1.4 Technology...............................................................................................................22
4.1.5 Ecological.................................................................................................................22
4.2 Porter Five(5)Forces Model Analysis...................................................................................23
5.0 STRATEGIC OPTION...............................................................................................................31
5.1 SWOT ANALYSIS.............................................................................................................31
6.2 TOWS Analysis....................................................................................................................34
6.0 RECOMMENDATIONS............................................................................................................38
7.0 REFERENCES...........................................................................................................................39
8.0 APPENDICES............................................................................................................................41
APPENDICES A : IFAS Table..................................................................................................41
APPENDICES B : EFAS Table..................................................................................................43
APPENDICES C : SFAS Table..................................................................................................45
 APPENDICES D : Financial Statement.....................................................................................47

1.0 INTRODUCTION

This assignment is about doing a strategic audit report for a Malaysian organisation that our
group had choose. The objective of this studies is to evaluate whether or not the organisation is
achieving its operational set objectives in the most efficient way. Through this study, our group also
want to looks into whether the organisation is making the best use of its available resources.
Furthermore, this audit report will analyze various aspects of a business  and helps to determine the
most efficient strategy for the organisation to implement in  order to meet its organizational goals.
By that, Eastland Equity Berhad (EEB) was chosen by our group to evaluate the company strategic
audit report. Eastland Equity Berhad  is one of the investment holding company in Malaysia. The
company's core areas of expertise are hospitality, property development, tour and travel agency
operations, and real estate. Besides that, Eastland Equity Bhd also operates hotel, trades timber, and
licensed investment adviser. Our group has addressed several issues that the company is facing and
also reviewed the strategic audit by assessing the company's internal and external forces. As an
outcome, our group recommended the best strategy that the company could use to achieve its
objectives and goals in the most effective way. 

2.0 STRATEGIC ISSUES

Financial Issue

Eastland Equity to raise up to RM2.65m via private placement

 Eastland Equity Bhd intends to boost up to RM2.65 million to third-party investors

through a private placement which take up  to 10% of its total issued shares . The
private placement comes up with option to follows a fundraising activity in June in
which the diversified company raised RM4.23 million by selling 49.13 million
shares, or 20% of its outstanding shares.
 In a stock exchange press statement, the company stated that the planned private
placement will require the release of up to 29.48 million new shares, which is
not  more than 10% of its total issued shares. Eastland issued 294,8 million shares as
from September 30. After the fiscal year, the planned private placement would
increase the number of shares issued by Eastland up to 324.28 million.

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  Eastland Equity Berhad stated that the proposed private placement might  not help
to fix the group's current financial issues because the projected revenue would not be
capable to support the company's long-term financing needs or strengthen its
financial condition. The proposed private placement, however, supports as an interim
solution to meet the Group's immediate cash flow needs that enable the company  to
pursue the acquisition of land or the ownership right of the property.

Eastland plans right issue

 Eastland Equity Bhd is preparing to conduct a resignable right issue of up to 294.8

million new shares to collect money to fund the land acquisition and repayment of
the bank borrowings proposed by the property developer.In a statement today to
Bursa Malaysia,Eastland said the issue of rights requires a free warrant of up to 147.4
million units.Eastland said that the issue of rights could permit the company to
collect the proceeds to finance Eastland Group's planned acquisition and partial
repayment of bank loans,given the funds are excessive.Eastland said that its entirely
owned subsidiary,Land Sdn Bhd,today signed with P.C.K.a conditional sale and
purchase agreement.

Eastland Equity aborts rights issue as proposed development projects faces hiccups

 At the time,PCK approved the construction of two blocks of 28-story hotels,total

RM638.97 million of gross development.Eastland in turn proposed to increase
between RM11.7 million and RM 39.8 million,mainly for land acquisition,a 6-for-
five rights issue of 13.5 per share.

 When extension of the planning consent is obtainable,FBO and PCK have signed,18
Jan 2019,an act of mutual termination with a view to terminating the SPA with regard
to the proposed acquisition.In the meantime,Eastland also pointed out that the sum it
might raise with warrants,cannot be sufficient to satisfy the financing requirements of
the company,depending on the existing business situation,financial position and
operating capital requirements of the company.

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  So,the organization has therefore agreed to abort the proposed warrant rights
problem.The Company's Management is currently assessing various proposals for a
more holistic corporate exercise to meet the financing requirements of the company
and to improve its financial performance.Shares of Eastland Equity closed at 11.5
cent,which resulted in RM28.25 million of market capitalisation.

Strategic Research and Development Issue

 The Group is currently working on one property development project, the Bandar
Tasek Raja commercial property development project ("BTR Project") in Pasir Mas,
Kelantan, which is a collaborative project with the local council, Majlis Daerah Pasir
Mas. Through that, t he Group had lost money for five continuous fiscal years. To
raise its earnings, the Group has been looking into new business chances in the
industry. The Group's management had met with several parties to discuss
several business proposals, along with property development opportunities in
different regions or countries in order  to realign the Group for better .product and
service assortment 

Strategic Operation Issue

 Due to  Covid-19 pandemic, the hotel had collaborated with the Ministry of Health to
develop detailed  guidelines and disinfectant guidelines to preserve hourly
sanitisation and a safe environment for company's employees and clients. The hotel
has recorded employees who did not receive appointments through the
MySejahtera application to two separate vaccination programmes which is one under
the Kementerian Kesihatan Malaysia and the other under the Malaysian Association
of Hotels. Besides that, the company claim that personal protective equipment should
be worn at all times and first aid kits should be available for each department. This
will reduce incidents, misfortune, and lost time injuries that will give beniefit in
increased productivity and efficiency on company property.

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3.0 INTERNAL FORCES

3.1 Company’s name

Eastland Equity Bhd,situated in Kuala Lumpur,was founded in 1939.The firm has a total of
81 years of expertise in the industry.The primary goal of this corporation is to participate in
investment holding.The company is involved in property development,investment,property
and hotel management,tour operator and travel agency services,as well as lease and hire-
purchase agreements.Eastland equity was known as AUSTRAL AMALGAMATED
BHD at the commencement of the operational years,which was 1939 years,according to the
Bursa Malaysia.The corporation changed its name to FURQAN business organisation on
December 30,2002.The reason for the name change was not made June 27,2012,and has
continued to do so until now.The company's chief executive also refused to give any
explanation for the decision to change the company's name.We can only surmise that the
company's name was changed owing to a shift in the company's basic values,vision,and
goal.

3.2 Company’s type and industry

Eastland Equity Bhd,usually known as EEB,is a Malaysian investment holding

company.The company's core competencies are hospitality,property development,tour and
travel agency operations,and investment assets. Eastland Equity Bhd is also a hotel
operator,a wood trader,and a registered insurance broker. Eastland Equity Bhd has a number
of locations where it may be found. Property development in Kelantan,condominiums,a
shopping centre,and The Grand Renai Hotel are all part of the portfolio.

Eastland Equity Bhd is now engaged in the hotel,investment properties,and property

development industries in general.The Grand Renai Hotel,Kota Sri Mutiara Shopping
Complex,and Tasek Raja commercial property development are the company's primary
properties in Kota Bharu,Malaysia.However,in order to enhance its profitability,the
corporation is looking into investing in new business opportunities.

The Grand Renai Hotel caters mostly to internal tourism,with visitors coming from
inside the country as well as foreign visitors arriving and departing from the country.The
hotel offers a variety of services,including accommodation,restaurants,food and beverage

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 service,event planning,and transportation.As a result,the Kota Sri Mutiara Shopping
Complex is an asset that the corporation may invest in to generate revenue.Eastland Equity
Bhd also invests in public marketplaces that bring together shops under one roof in order to
create a profit from rental income from shopping malls.

Furthermore,Eastland Equity Bhd is now working on the Tasek Raja commercial

property development project.The Kelantan state government,Majlis Daerah Pasir Mas,is
collaborating on this project as a joint venture partner.The project will feature the addition
of 266 units of contemporary and distinctive store lots,as well as a market,taxi,and bus
terminal.Tasek Raja commercial development aids in the reactivation of the district and the
enhancement of its commercial and economic potential,providing possibilities for numerous
firms and enterprises to extend their operations and strengthen Kelantan's economy.

3.3 Vision, mission, objective and strategies

The vision and mission statements serve as a focal point that helps to synchronize everyone
with the organization,making sure that everyone is working toward the same goal.This
contributes to the organization's improved effectiveness and productivity.Based on Tahir
Sufi(2006),vision statements convey the organization's long-term goals.

Company Vision

Eastland Equity Bhd is an investment holding company.Their main lines of business are
hospitality,investment real estate,and real estate development.Thus,they want to be
recognized as a one of the best leader in hospitality management services.Below are
Eastland Equity vision:

 Encourage a corporate governance culture within the Group that validates

ethical,smart,and professional behaviour;

 We go through this for the benefit of all of our stakeholders,employees and client.

 We operate in accordance with our business best practices,either in external or

internal.

 We develop highly motivated and skillful employees.

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  We are developing revolutionary technologies that will shape the future of travel
service.

Company Mission

A mission helps to defines the company's business,objectives,and strategy for achieving

those objectives.A company's or organization's mission is its primary goal.A mission can be
viewed as an excellent tool for developing business goals and objectives.Here,Eastland
Equity Berhad mission is to uses revolutionary technologies to improve customer
engagement and bring worthwhile improvements to the industry.They will always
provided buyers and suppliers a return on investment.They also offer excellent community-
focused hospitality and tourism specialists with flexible leadership and management skills
based on specified,current experience in the industry.

Company Objective

 In order to realign the company for better product mix, Eastlan Equity Bhd has been
seeking out new business potentials to improve its income, as well as property
investment opportunities in other more strong vibrant states market economy in
consideration of geographical and industrial diversification indicators.

 Determined to take proactive approach to engage stakeholders with a way of mutual

respect in order to identify, operate, and communicate with these stakeholders in order to
make sure all aspects are taken into account in our decision-making process, allowing
them to build long-term partnerships within the community.

 Eastland strives to cultivate quality relationships within its entire organisation . The company
strive to conduct business wisely by integrating the strategies on  human rights, workforce,
environmental, and anti-corruption.

 To maintain a relevance competitive industry, Eastland Equity focus on excellent

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performance which will give satisfied service to the clients. Hence, the company want
their employees to to be skilled and professional through 'quality education' to provide
3.4 List of Board Directors

Mohamed Akwal Bin Sultan Mohamad

Chairman and Independent Non- Executive Director

Lee Chee Kiang

Managing Director

Tan Chin Hong

Executive Director

Dato Lee Wai Mun

Executive Director

Phang Kiew Lim

Executive Director

Masleena Binti7 Zaid

Independent Non-Executive
Director
3.5 List of Top Management Team

A top management team is a type of team that is typically composed of any of an

organization's top management.It is the highest-ranking executive in charge of the entire
organisation.The BOD strategy is transformed into goals,targets,and strategies by this team.It
makes decisions that have an impact on everyone in the organisation and is solely responsible for
the company's success or failure.Eastland Equity Bhd's top management includes the following
individuals:

 Lee Chee Kiang(Managing Director/Chief Executive Officer)

 Eric Wee Ei-Mas(Project Manager)
 San Tuck Hoe(Financial Controller)
 Ms.Yit Chan Tai(Joint Secretary)
 Ms.Siew Yeen Wong(Joint Secretary)

3.6 Organizational Structure

An organisational structure is a diagram that summarises all of the jobs and responsibilities
of all employees in a company.This diagram is also used to demonstrate how information is
transferred between workers at various stages of the company.An excellent organisational structure
assigns work to employees and ensures its applicability within the company.Simply put,the
organisational structure outlines the responsibilities of all employees in order to ensure that the

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company meets its objectives.This organisational structure depicts a company's direct
structure,illustrating the position of all workers.The goal of organisational structure is to show the
structure of a company in which the most powerful employees are at the top and the least powerful
employees are at the bottom.Organizational structures come in a variety of shapes and sizes.

I. Functional Organizational Structure

Many businesses make use of the functional organisational structure.Individuals are brought
together in this type of structure by performing specific functions(Azruban,2018).Workers
who perform similar tasks will be assigned to groups based on their expertise.Typically,this
structure will divide groups into departments,such as finance,operations,marketing,and
human resources.The benefits of this structure are that workers in the same department can
communicate easily and decision making is simplified.They can learn and share knowledge
from each other because they share similar expertise and skills.

II. Geographic Organizational Structures

The geographic organisation structure is typically used by organisations that have offices or
buildings in different areas or countries.Workers can transfer data or information to
different areas of the subsidiary using this type of organisational structure.Furthermore,it
operates and manages in accordance with local needs while remaining guided by business
strategies(Micheal,2018).

III. Matrix Organizational Structures

This organisational structure is one in which the company's employees have multiple
bosses.And the workers must collaborate with other department employees to develop a
new product line(Luccichat,2015).Team members will have more responsibilities in this
organisational structure.This can boost productivity and allow for more new creative ideas
to be implemented.This organisational structure necessitates extensive planning.It is
typically used in large corporations with the resources to manage complex business
frameworks.

IV. Network Organizational Structures

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 This organisational structure aids in visualising the internal and external relationships
between employees and top management members.This organisational structure is based on
the social network concept.This structure is based on open communication between interior
and exterior partners,which is more flexible because it is more controllable and simplifies
the communication process(Williams,2017).The network organisation structure,as opposed
to a hierarchical structure,has the advantage of emphasising open communication among
employees in the workplace.

Organizational of Eastland Equity Bhd.

Eastland Equity Bhd.has a Functional Organizational Structure.According to the diagram above,the

Chief Executive Officer of Eastland Equity Bhd.is Lee Chee Kiang.Then came two joint
secretaries,Tai Yit Chan and Wong Siew Yeen.The workers are then divided into groups based on
their areas of expertise.It is divided into three sections.First,project manager Eric Wee Ei-Mas,then
finance controller San Tuck Hoe,and finally auditor Petrus Gimbad.

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3.7 Financial Analysis

Year 2019

Profitability Ratios

RATIOS Formula 2019(RM million)

1.Gross margin ratio Gross profit÷Net sales (12,806,012-20,416,699)/

12,806,012=-59.43%or 0.59

The gross margin ratio is calculated to be 59.43%.This means every RM1 of revenue,RM0.59 is
retained while RM 0.41 is attributed to the cost of goods sold.This means that the company
receives RM0.59 for every RM1.00 in sales in year 2019.
Operating income÷Net sales -73,209,62/12,806,012
2. Operating margin = -0.5717

ratio

The operating margin ratio is -57.17 %. In 2019, the company has to bear an operating loss of
RM0.57 for every RM1.00 in sales. This clearly shows that the company's management of
operating expenses is comparatively weak.

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3.Return on assets ratio Net income÷Total assets -11,342,691/(-
268,412,335+273029364÷2)
= -4.19%

The return on asset is -4.19 %. This implies that for every RM investment made , the company
earns a net loss of RM0.0419 per year. This indicates that the company's asset management is
weak..

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 -11,342,691/159,143,020=-
4. Return on equity Net income ÷ Shareholder’s
00713
ratio equity

The return on equity is -7.13 %. This ratio represents a company's profitability in relation to its
book value of shareholder equity. When the ROE is negative, it indicates that the company is
incompetent at managing their equity to generate revenue.

Liquidity Ratios

5.Current ratio 83,155,013/50,282,095=1.65

Current assets ÷ Current
liabilities

The current ratio is 1.65 times. This indicates that for every RM1 of current liability, the company
has RM1.65 in current assets to cover it. This shows that the company can meet its short-term debt
obligations.

6.Acid-test ratio (83,155,013-73,988,553)/

(Current assets–Inventories)÷Current
50,282,095=0.18
liabilities

The acid-test ratio is 0.18 times.This means for every RM1 of Eastland's current liabilities,the
company has only RM0.18 of liquid assets to cover those obligations.

7.Cash ratio 2,142,939/50,282,095=0.04

Cash and Cash equivalents÷Current
Liabilities

The company cash ratio is 0.04. This figures show that the company is experiencing losses and has
insufficient cash and cash equivalents to cover its current liabilities.

868,974/50,282,095=0.02
8.Operating cash flow ratio Operating cash flow÷Current
liabilities

The operating cash flow ratio is 0.02. This figures indicates  that for every RM 1 of current
liabilities, the company would earns RM0.02 from it operating activities. This clearly shows that
the company's cash flow cannot cover its current liabilities.

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 Efficiency ratios

9.Asset turnover ratio Net sales÷Average total assets 12,806,012/27,020,850=0.05

The asset turnover ratio is 0.05.This indicates that the company isn’t efficiently using both
current and fixed assets to produce revenue.

20,416,699 x
10.Inventory turnover Cost of goods sold÷Average
2/148,628,596=0.27
ratio inventory

The inventory turnover ratio is currently 0.27. This showed that the business has a low
inventory turnover, which means low in sales, while have too much inventory or
oversupply, and poor inventory liquidity..

12,806,012/1,578,854=8.11
11. Receivables Net credit sales ÷ Average
turnover ratio accounts receivable

The turnover ratio for receivables is 8.11. Low receivables turnover could be the result of a
slow-turning business, faulty credit procedures, or customer prerequisites that has unstable
financial or reliable.
(Inventory÷COGS)x 365 days
12. Days sales in 365/0.27=1351
inventory ratio

The days sales in inventory ratio calculates how long it will take a company to sell all of
its inventory. This show  that  the company will took 1351 days to sell all of its inventory.

Leverage Financial ratios

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 13.Debt ratio Total liabilities÷Total assets 47735799/268,412,335=0.18

14.Debt to equity ratio 47,735,799/159,143,020=0.3

Total liabilities÷Shareholder’s
equity

The debt to equity ratio is 0.3.This means every RM in equity,the firm has RM0.30 in
leverage.This indicates that the company has less levered and is closer to being fully
equity financed.

coverage income ÷ Interest -3,425,765/4,021,729=-0.85

15. Interest Operating
ratio expenses

The interest coverage ratio for the company is - 0.85. This ratio is used to evaluate a
company's ability to manage its existing debt. From this figures, we  indicates that the
company has a low interest coverage ratio, implying that there is a greater likelihood that
the company will be unable to pay its debt, putting the company at risk of bankruptcy.

The company debt ratio is 0.18., which indicates  that the company has more assets than
liabilities and thus, it can meet its obligations by selling assets if necessary. The lower the
company's debt-to assets ratio, the less risky for the company.

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Year 2020
Profitability Ratios

RATIOS Formula 2020(RM million)

1.Gross margin ratio Gross profit÷Net sales 18,074,088-

28,204,152/18,074,088=-0.56

The company gross margin ratio is 56%. This means that for every RM1 of earnings, RM0.74 is
set aside and RM0.44 is deducted from the cost of goods sold. This means that the company will
earn RM0.74 for every RM1.00 in sales in year 2020.

-8,763,305/18,074,088=-0.48
2. Operating margin Operating income÷Net sales

ratio

The operating margin ratio is 48%. This implies that in year 2020, the company will incur an
operating loss of RM0.48 for every RM1.00 in sales . This clearly shows that the company's way of
operate it operating expenses is ineffective.

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 3.Return on assets ratio Net income÷Total assets -12,789,732/276,764,145=-
0.046

The ROA is-4.62%.This indicates the company is relatively poor in managing the company's
assets.

on equity Shareholder’s -12789732/170360891=-0.075

4. Return Net income
ratio ÷ equity

The ROE is-7.5%.This ratio means the relation between the profit and the book value of
shareholders’equity.The ROE is negative means that the company is poor in managing equity to
generate profit.
Liquidity Ratios
5.Current ratio ÷ Current 84,071,025/65,447,581=1.28
Current assets
liabilities

The current ratio is 1.28 times.This means for every RM1 of current liability,the company has
RM1.28 of current assets available to pay for it.This represents that the company has the ability to
service its short-term debt obligations.
6.Acid-test ratio (84,071,025-74,640,043)/
(Current assets–Inventories)÷Current 65,447,581=0.14

liabilities

The acid-test ratio is 0.14 times.This means for every RM1 of Eastland's current liabilities,the
company has only RM0.14 of liquid assets to cover those obligations.
7.Cash ratio 3,216,652/65,447,581=0.05
Cash and Cash equivalents÷Current
Liabilities
The cash ratio is 0.05.This indicates that the company is facing losses and they do not have enough
cash to clear off its current liabilities.

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 Current -134,676/65,447,581=-0.002
8.Operating cash flow ratio Operating cash
flow÷liabilities
The operating cash flow ratio is-0.002.This means the company loss RM0.002 from operating
activities from each RM of current liabilities.This indicates that the cash flow generated by the
company cannot pay off its current liabilities.
Efficiency ratios

9.Asset turnover ratio Net sales÷Average total assets 18,074,088/276,764,145=0.07

The asset turnover ratio is 0.07.This indicates that the company isn’t efficiently using both current
and fixed assets to produce revenue.
Average 28,204,152x2/
10.Inventory turnover ratio Cost of goods (75,465,525+74,640,043)=0.38

sold÷inventory
The inventory turnover ratio is 0.38.This indicates that the company has less sales,excessive
inventory in stock and short of inventory liquidity.
Average 18,074,088/1,716,847=10.53
11. Receivables turnover Net credit sales
ratio ÷accounts
receivable

The receivables turnover ratio is 10.53.Low receivables turnover might be caused by a business
with a slow turnaround,faulty credit processes,or customer criteria that aren't financially viable or
creditworthy.
(Inventory÷COGS)x 365 days
365/0.38=961
12. Days sales in
inventory ratio

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 Days sales in inventory ratio estimate the duration that the company takes to clear up its
inventory.This means the company takes 961 days to sell all its inventory.
Leverage Financial ratios

13.Debt ratio Total liabilities÷Total assets 25,994,947/273,029,364=0.10

The debt ratio is 0.10.This shows the company’s assets is greater than liabilities,thus the company
can pay its liabilities by selling its assets if needed.
14.Debt to equity ratio 25,994,947/170,360,891=0.15
Total liabilities÷Shareholder’s equity

The debt to equity ratio is 0.15.This shows that every RM in equity,the firm has RM0.15 in
leverage.This means that the company is close to full equity financing.
-3,357,329/4,569,982=-0.73
15. Interest coverage Operating income ÷ Interest
ratio expenses
The interest coverage ratio is-0.73.This shows that the company has no ability to handle its
outstanding debt,and maybe face the risk of bankruptcy.

4.0 EXTERNAL FORCES

4.1 STEEP Analysis

The steep analysis of Eastland Equity Bhd will cover all macro environment factors
which include sociocultural,technological,economic,ecological,and political-legal factors.
Eastland Equity has a market capital of 27.02M and is located in Kuala Lumpur. Steep
analysis is a strategic management tool that Eastland Equity manager can use to make
better decisions. Eastland Equity operates in a dynamic environment where it is influenced
by government decisions,consumer spending behaviour,increasing regulatory framework of
environmental factors,social trends,increasing environmental activism among
consumers,and ever evolving legal systems.

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4.1.1 Political

These factors are important and need to consider and analyse properly in making
management decisions.First,let us discuss political legal factors.Political factors are often
related to the degree and nature of local and national government interventions in the
business and economic environment.Government policies and governance systems play a
huge role in the nature and goals of policies.Below are the political factors that affect
Eastland Equity.The Malaysian government is facing increasing global pressure to comply
with WTO regulations on the hotel and motel industry.

Next, armed conflicts-due to military policy,terrorist threats and other political

instability,the disruption of the business environment poses no imminent threat to
Malaysia.Eastland Equity has operational experience in handling difficult situations.Other
stakeholders,such as NGOs,protest and pressure groups,and activist movements play a key
role in Malaysia’s policy making.Eastland Equity should work closely with these
organizations to better contribute to community goals and corporate goals.The legal also can
call in law plays an important role in the development of the hotel and motel industry in any
economy.Eastland Equity management must consider the following legal factors before
entering the international market-data protection law,time required for justice,intellectual
property protection,discrimination law,judicial system,copyright law and prejudice against
domestic players.

Below are the legal factors affecting Eastland Equity.

i.Environmental laws and Guidelines-Malaysia's environmental legal level and what

Eastland Equity needs to do to meet these laws and regulations.For example,the
government regulations during this COVID 19 pandemic.

ii.Commercial law-the commercial law procedures followed by Malaysia.Are these

regulations consistent with international institutions such as the World Trade
Organization and the European Union?

iii.Time spending in court for commercial cases-even if some countries follow

international norms,it usually takes years to resolve.Eastland Equity must carefully
consider the average time for a particular case before entering the international market.

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 iv.Legal protection of intellectual property rights,patents,copyrights and other
intellectual property rights in Malaysia.If there is not enough protection,how will
Eastland Equity be affected.

v.Malaysia's health and safety regulations and what Eastland Equity needs to do to meet
these regulations,and what is the cost of meeting these regulations.

vi.Data Protection Law-In the past decade,data protection has not only been a key part
of privacy issues,but also a key part of intellectual property issues.Eastland Equity must
consider whether Malaysia has a strong mechanism to prevent data leakage.

4.1.2 Economic

Next,economic factor also one of the important roles in steep analysis.Economic

factors include-the stage of the national economy,tax rates,interest rates,exchange
rates,consumer disposable income,national economic performance,inflation rate,labour
market conditions,etc.When considering economic factors,the manager needs to know the
economic trend and move forward.Covid-19-affected group's business in the hotel and
investment property sector.The implementation of pandemic and MCO is forcing the firms
operating in a challenging environment.However,with the implementation of the national
Covid-19 immunization program,it also helps to contain the spread of the virus and this will
also help revitalize economic activity,which should translate into improved mood
hotels,investment properties and real estate development departments.Below are the
economic factors that need to analyse by Eastland Equity Bhd.

i.The increasing liberalization of Malaysia's trade policy can help Eastland Equity
further invest in areas that have been restricted by companies so far.

ii.Availability of core infrastructure in Malaysia-Over the years,the Malaysian

government has increased its investment in the development of core infrastructure to
promote and improve the business environment.Eastland Equity can use the existing
infrastructure to promote the growth of the service industry in Malaysia.

iii.Economic cycle-Eastland Equity's performance in Malaysia is closely related to the

economic performance of the Malaysian economy.The growth of the past two decades is

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 based on increasing globalization and the use of local resources to cater to the global
market.

iv.Downward pressure on consumer spending-Although consumer disposable income

remains stable,rising social inequality will have a negative impact on consumer
sentiment,which will affect consumer spending behavior.

v.Inflation rate-the loose liquidity of the market after the Great Recession in 2018 will
lead to increased inflation in the Malaysian economy.

4.1.3 Sociocultural

The sociocultural factor also influences the manager of Eastland Equity making their
operating decisions.Every society and culture has its own way of doing business.These
social factors can not only help companies like company name better understand the way
they do business,they can also help understand the customer preferences of the country
name service department.Social factors include-culture,acceptance entrepreneurship,
attitude towards certain products and services,health and safety attitudes,gender
roles,social roles and norms,demographics,traditions and leisure interests.Below is the
explanation of each sociocultural factor that should analyse by Eastland Equity.

1.Leisure interests-Malaysian customers prefer experiential products rather than the

traditional value proposition of the service industry.Eastland Equity can use this trend to
build products that provide an enhanced customer experience.

2.Access to basic services-In general,the number of people in Malaysia who have access to
basic services has increased by half in the past ten years.This is the result of increased
investment in public services.

3.Social norms and hierarchy-Malaysian society is different from Eastland Equity's

domestic market.It should strive to build a local team that understands social norms and
attitudes to better serve Malaysian customers.

4.Education level-Malaysia has a high level of education,especially in the Eastland

Equity sector.Eastland Equity can use it to expand its business in Malaysia.

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 5.Demographics-For service products,Eastland Equity has demographic data.Malaysia is a
young country and it is still developing.Eastland Equity can use this trend to cater to
different groups of people.

6.Power structure-Income inequality in Malaysia is on the rise.This has changed the

power structure that has existed in society for the past six to seven years.

4.1.4 Technology

Technology is rapidly disrupting all industries,and service is no exception. Technology

factors affect Malaysia’s Eastland Equity&Hotels&Motels in many ways. Some of the
technical factors are-the speed of technology-driven change,the interruption of the
supply chain caused by technology,the population's access to technology,the use of
mobile phones to promote empowerment,customer service innovation,product innovation,
access to more information,etc.The technological factors that impact Eastland Equity are:

a) Technology maturity-The technology in the hotel and motel industry is not yet mature,and
most participants are competing for new innovations to enable them to gain a higher market
share in Malaysia.

b) Eastland Equity's technology transfer and licensing issues-in the service industry,there is
nostrong technology transfer culture,companies are usually reluctant to transfer or
licensetechnology because they are afraid of creating competitors from partners.

c) The development and dissemination of mobile technology has changed customer

expectations in the service sector.Eastland Equity must not only meet and manage these
expectations,but it must also innovate to stay ahead of the competition.

d) 5G and its Potential-Eastland Equity must pay close attention to the development and
improvement of user experience in order to increase speed and access rights.This can
completely change the customer user experience in the hotel and motel industry.

4.1.5 Ecological

Lastly,ecological factors also one of external forces need to pay attention in this
analysis.In the past decade,sustainability and environmental factors have become critical to
companies.Governments and pressure groups are quickly demanding that organizations

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 comply with environmental standards.Some environmental factors are-laws governing
pollution,safe water treatment,climate change,limiting carbon footprint,increasing attention
to sustainability,safe waste disposal,safe disposal of hazardous materials and insurance
policies.

a) The Paris Climate Agreement sets real goals for the Malaysian central
government.This may result in a stricter review of the environmental standards of
Eastland Equity in Malaysia.

b) Extreme weather also increases Eastland Equity's operating costs because it must
invest in making its supply chain more flexible.

c) Renewable technology is another interesting area for Eastland Equity.It can take
advantage of trends in the field.Malaysia is providing subsidies for investment in
the renewable energy sector.

d) Customer enthusiasm-the increase in customer awareness also places environmental

factors at the core of Eastland Equity's strategy.Clients expect Eastland Equity not
only to comply with legal standards,but also to exceed these standards and become
a responsible stakeholder in the community.

e) Recycling is quickly becoming the norm in the Malaysian economy,not a good

thing. Eastland Equity must develop a plan to comply with the regulations and
expectations of the service industry.

4.2 Porter Five(5)Forces Model Analysis

 The risk of a new entrant

The risk of a new entrant, it is one of Porter's Five Forces industry analysis framework's
forces, which refers to the threat that new rivals pose to existing players in an industry. It is one of
the forces that forms an industry's competitive landscape and contributes to its attractiveness.
Besides that, the risk of new entrants represents how new market competitors put existing market
players in threat. If the business is successful and the obstacles are low, it will lure more players,
thus raising the threat of new entrants.The threat of new entrants is largely determined by the
barriers to entry.

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 A barrier is the presence of high costs or challenges that can prevent potential competitors
from joining the industry. The initial investment in the tourism industry and hotel industry creates a
significant barrier to entry, but the internet has reduced some of these barriers. A greater threat of
new entrants tends to reduced the barrier which make the industry less attractive. As a result, new
rival companies can smoothly enter the industry, start competing with existing firms, and gain
market share. As the industry becomes more competitive,profit potential decreases.

Based on the above, brand loyalty, which occurs when customers have a particular fondness
for the services of current businesses, is one of the main barriers to entry in the tourism and
hospitality industries. Another barrier would be cost advantages, which would allow current
businesses to smoothly deliver and provides their services at the lowest price than newcomers.
Other than that, government regulations also play another significant barrier in this industry,where
strong government regulations are required to reduce the threat of new entrants.Last but not
least,service differentiation is a barrier to entry in this industry.

The Grand Renai Hotel is located in Kota bahru for Eastland Equity Bhd.The Hotel
Perdana,Grand Riverview Hotel,H Elite Design Hotel,and Crown Garden Hotel are just a few of the
competitors for this hotel.According to Malaysian travel advisors,The Hotel Perdana is a close
competitor of The Grand Renai Hotel,as these two hotels are the most recommended five-star
hotels in the country.

By analysing the service differentiation of Grand Renai hotel's competitors,we can see that
it has successfully differentiated itself by the location,service,amenities,or other quality it has the
greatest potential to attract and retain clients because it is a lifestyle hotel and one of the city's
leading Deluxe hotels.It is conveniently located in the commercial and shopping district of Kota
Bharu and is only 12 kilometres from Sultan Ismail Petra Airport.The rooms and suites offer world-
class services and amenities,and the fitness centre is the largest in Kota Bharu.These distinctions
will serve as the foundation for Eatland Equity Berhad's efforts to build customer
loyalty.Otherwise,it adheres to stringent government regulations and policies by adhering to SOPs
and safety precautions during the Covid 19 season.Otherwise,The Grand Renai Hotel has a higher
cost advantage because it is an established company that offers low rates that attract
customers.Finally,we can conclude that Eastland Equity Berhad faces a low risk of new entrants.

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 The risk of new entrant is low when High Low

Service differentiation x

Brand loyalty x

Cost advantages x

Strong regulations x

 Bargaining power of buyers

One of the forces introduced by Porter's Five Forces Industry Analysis is buyer bargaining
power.This bargaining power refers to the pressure that a customer or consumer can exert on a
business in order for it to provide a higher quality product,service,or even a lower price. For
starters, the cost of changing to other rival brands or complementary goods is low, letting them to
change their liking without worry of incurring significant opportunity costs. The cost of switching
will be relatively high if there are few substitute or service suppliers available, which resulting in
low bargaining power of customers. Besides that, the dependency of the  buyer's purchase on a
supplier will directly effect the buyer's bargaining power. For instance, if a buyer can only receive
products and services through one supplier and not from others, the buyer's reliance on that supplier
is high. As a result, the buyer's bargaining power will be low .

Aside from that, the proportion of purchasers available in the market determines the buyer's
bargaining power..When the number of buyers in the market is small,the buyer's bargaining power
is high because there are only a small number of potential customers available in the market,and
these customers are important because they are revenue sources for the companies.To meet the

26
demand from those small segments of potential customers,businesses must improve the quality of
their products and services in order to persuade customers to buy their goods and services.

According to various hotel booking websites such as Traveloka,there are only two five-star
hotels in Kota Bharu,Kelantan,which are The Grand Renai and Hotel Perdana Kota Bharu.This
indicates that the cost of switching is high because there are only two hotels in Kota Bharu that
provide luxury services.Buyers'bargaining power is low here because they have other options if
they want to live in luxury in Kota Bharu.Furthermore,this demonstrates that buyers have a high
level of reliance on The Grand Renai,which is owned by Eastland company,as there are few
competitors in the vicinity of Kota Bharu that can provide the luxury experience and services that
The Grand Renai does.

With the pandemic covid-19 still active in Malaysia,the buyer's bargaining power is
increasing because the number of people wishing to travel during this crisis is insignificant.In order
to compete with other competitors during this difficult time,the company must provide an appealing
price tag and promotion in order to win over the limited number of consumers available in the
market.

In conclusion,the bargaining power of buyers of Eastland Berhad is low to moderate.

The power of buyers is low when Hig Low

h

Switching cost x

Dependence towards supply x

Number of buyers x

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  Bargaining power of suppliers

Supplier bargaining power is one of the key forces in Porter's five forces industry analysis
framework.Supplier bargaining power mirrors buyer bargaining power.Suppliers can put pressure
on the company by raising prices,lowering quality,or reducing the availability of goods and
services.This is because some suppliers want to increase their profits by taking advantage of the
companies that buy supplies from them.However,due to a lack of necessary goods and required
supply from the specific supplier,the company was forced to comply.As a result,one of the most
important aspects of business strategy is the framework of supplier bargaining power(CFI,2020).

Furthermore,the bargaining power of suppliers in an industry would impacts the competitive

market and potential profits of buyers. A supplier is a company that sells and supplies goods and
services to other businesses in large quantities and on a continuous basis.Companies that have good
and high-quality supply material will benefit their business.This is because a good product and
service are important in providing customer satisfaction and positive feedback.As a result,the
company must exercise caution when selecting a supplier who offers high-quality goods and
services at a reasonable price.

There are several major factors that influence suppliers 'bargaining power.The switching
cost of buyers is first and foremost.When a large number of companies or buyers are concentrated
on a few suppliers, their bargaining power will be high. Eastland Equity Bhd, for example,has
agreements with numerous suppliers to provide high-quality furniture,equipment,and food supplies
for The Grand Renai Hotel. As a result, Eastland Equity Bhd's suppliers have little bargaining
power,while buyers have a lot.

In addition,the threat of supplier forward integration is a significant factor in determining

supplier bargaining power.Supplier bargaining power is high if suppliers can simply produce the
company's or buyer's product.Moreover,if the company or buyer is unconcerned and uneducated
about price and product,the supplier has a strong position.Eastland Equity Bhd,for example,is very
concerned about the current price and quality of goods and services purchased by the firm.Prices

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will be evaluated on a regular basis in order to determine price increases and decreases.This is done
to ensure that the company suffers no loss.As a result,suppliers have little negotiating power.

Subsequently,the number of suppliers relative to buyers is an important factor in

determining supplier bargaining power.When there are a large number of suppliers in relation to the
company or buyers,the bargaining power of the suppliers is low.Eastland Equity Bhd,for
example,owns one of the largest hotel companies in Kota Bharu,which offers luxurious
accommodations and excellent service.The company had a contract with several suppliers in order
to maintain supply and service.As a result,Eastland Equity Bhd's suppliers have limited bargaining
power.

In conclusion,the force of the bargaining power of suppliers of Eastland Berhad is low

The power of suppliers is low when Hig Low

h

Buyers' switching costs x

Suppliers' threat of forward integration x

The number of suppliers relative to buyers x

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  Rivalry among competing sellers

The intensity of competition is evaluated by competitive rivalry among existing firms in

Porter's Five Force Industry Analysis. Strong competition can limit profits and lead to price
cuts,increased advertising expenditures,and costs associated with product or service improvement
or innovation.

The Grand Renai Hotel,located in Kota Bharu,Kelantan,is one of Eastland Equity Bhd's
hotel operations.The Grand Renai Hotel's main competitor in this area is The Hotel Perdana Kota
Bharu,which is also a five-star hotel.Other hotels in Kota Bharu,Kelantan include H Elite Design
Hotel,Grand Riverview Hotel,Holiday Villa Hotel&Suites Kota Bharu,and others.Despite the fact
that these are not five-star hotels,they offer the same services as The Grand Renai Hotel.Different
businesses offer the same service as competitors.As a result,The Grand Renai Hotel faces numerous
competitors in Kelantan Kota Bharu.

Eastland Equity Bhd has faced a decreasing demand problem as a result of the Covid-19
pandemic.Many people have reduced or cancelled their travel plans in order to keep themselves and
their families safe from the Covid-19 virus.In addition,beginning in March 2020,the government
restricted people's movement by enforcing the Movement Control Order(MCO).This has resulted in
a decrease in tourism activities and,as a result,a decrease in demand for hotel services.Due to a lack
of demand,the rivalry intensifies.This demonstrates that The Grand Renai Hotel faced stiff
competition from its competitors during the pandemic.

The higher the cost of switching,the less likely a person is to switch service
brands.Customer switching costs are very low in this case because there are many competitors
offering similar services.Furthermore,The Grand Renai Hotel is a five-star hotel offering high-
priced luxury services.As a result,more customers are turning to other cheaper hotels in order to
save money.

In conclusion,Eastland Equity Bhd is highly competitive.

Intensity of competitive rivalry is high when: Hig Low

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 h

Number of competitors is x

Buyers demand x

Switching cost x

 Threat of substitute product

In Porter's Five Forces travel,leisure,and hospitality sector,there is typically a better chance

of successfully launching a new company or product.Firms are available in all price ranges,with
varying service standards and facilities.The constant challenge will be to persuade customers to
choose your services over those of competitors.The Internet makes the overall industry more
effective through technological advances,while also broadening the future market and introducing
new replacement risks.Given the importance of this industry,a strong business strategy is essential.

The risk is that another company's chain could erode the consumer base with a newly
developed internet solution or a marketing campaign.According to Porter,implementing value chain
process research,aided by collective event management,structuring,and exchanging customer-
focused value chain data,significantly improves the efficiency of value chains and electronic
commerce.

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 Eastland Equity Bhd was diversifying their operations across multiple industries.EEB began
operations with the development of a township in Pasir Mas,Kelantan.The projects were first made
public in 2010.Following that,EEB entered the tourism and travel industry.EEB successfully
launched their own hotel,The Grand Renai Hotel,in Kota Bharu,Kelantan,in 2017.

At the same time,EEB owned Kota Sri Mutiara shopping and Mutiara Tower
Condominium,both of which were adjacent to the hotel.EEB was substituting their product in
various sectors;however,it has little effect on EEB performance,particularly due to this Covid-
19.Because of the decrease in the number of customers and visitors,the profit they make on their
products is decreasing.

In conclusion,Eastland Equity Bhd is high in the differentiation of the substitute products.

Threat of substitute products High Low

The differentiation of the substitute products is x

Rate of improvement in price-performance relationship of substitute products is x

5.0 STRATEGIC OPTION

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 A strategic option is an action-oriented alternative response to the possibility of external
circumstances(or several organizations).Strategic options make use of facts and trends,and
threats from the outside world.Based on study from strategic management,we recommend
that management of Eastland Equity Bhd can apply the SWOT analysis to be used.A
SWOT analysis is a planning process that assists an organization in overcoming obstacles
and deciding which new leads to pursue.The main goal of a SWOT analysis is to assist the
organization in developing a thorough insight of all the factors involved in making a
business decision. Eastland Equity's SWOT Analysis stands for Strengths,
Weaknesses,Opportunities,and Threats.The company's strengths and weaknesses identify
internal factors,while the opportunities and threats recognize the macro challengesthat
Eastland Equity faces in Malaysia and other global markets where it operates.

5.1 SWOT ANALYSIS

SWOT ANALYSIS

STRENGTHS WEAKNESS

W1 Low loyalty among

S1 High profit margin suppliers
S2 Innovation record W2 Less investment in
customer-oriented services
S3 Experienced top management
W3 Less employee expert
S3 High Skill Training
employees W4 High cost to build new
supply chain network
S4 Strong Brand Portfolio
W5 Ineffective customer
network

OPPORTUNITIES THREATS

O1 Business opportunities once the T1 COVID 19

economies recover pandemic(MCO)
O2 Property development T2 Soft market condition
O3 The using of electrical
platform T3 Lots of competitors

O4 Huge scope for technology T4 Less known among tourist

O5 CSR engagement
T5 Inability to conduct mass
gathering

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Strengths are the resources and capabilities of the firm that can be used to design, develop,and
sustain competitive advantage in the marketplace.Below is the strength of Eastland Equity.

 First mover advantage in an increasingly crowded market.New products are rapidly

increasing Eastland Equity's market share in the hotel and motel industry.
 The success of the new product portfolio-Eastland Equity provides its customers with a
detailed product portfolio selection.It helps companies cater to different customer groups
in the hotel and motel industry.
 Brands that cater to different customer groups in the hotel and motel sector-Eastland
Equity's extensive product offering helps the company penetrate into different customer
groups in the hotel and motel sector.It also helps the organization diversify its sources of
income.
 Eastland Equity's talent management and employee skills development-Human resources
are an integral part of Eastland Equity's success in the hotel and motel industry.
 High profit margins compared to competitors in the hotel and motel industry-Although
Eastland Equity is under pressure from declining profitability,its profit margins are still
high compared to competitors.
 Innovation record-Although most players in the service industry are striving to
innovate,Eastland Equity has a record of success in consumer-driven innovation.

The weakness of Eastland Equity may be the lack of required strengths or capacity resources,but
the organization currently does not have it.Managers must determine whether the weakness is due
to a lack of strategic planning or a strategic choice.

 Eastland Equity has less investment in customer-oriented services-this may result in

competitors gaining an advantage in the near future.Eastland Equity needs to increase
investment in research and development,especially in customer-oriented service
applications.
 Niche markets and local monopolies that companies like Eastland Equity can take
advantage of are rapidly disappearing.Facts have proved that the customer network
promoted by Eastland Equity is becoming increasingly ineffective.
 The high cost of replacing existing experts in Eastland Equity.Few employees are
responsible for Eastland Equity's knowledge base,and it will be extremely difficult to
replace them under current conditions.

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  The additional cost of establishing a new supply chain and logistics network-The Internet
and artificial intelligence have significantly changed the business model of the service
industry.In view of the decreasing importance of the dealer network,Eastland Equity must
build a new and strong supply chain network.This can be very expensive.
 Low loyalty among suppliers-In view of Eastland Equity's history of proposing new
innovations to drive down supply chain prices.
 Gross profit margin and operating profit margin may be improved,which may put pressure
on Eastland Equity's financial statements in the future.

Besides that,Eastland Equity Bhd can use the opportunities in order to eliminate the threat
that they encounter.They will have a business opportunities once the economies recover.They need
to strengthen their business from fall to any risk.Thus,to build a strong business will need more
than just financial management.It also involves way of retaining and expanding the customer
base,promote the business on a budget,maintaining high employee motivation,and try to enhancing
the business practices.One of way that they can do is to prioritizing their customers.

As known,Eastland Equity Bhd doing hospitality and property development as one of their
core business which they tends to follow the customer taste,satisfaction and needs.They should plan
a strategy that focus more on their customer and take these chance to be difference than their
competitors.For the hospitality,customer service tends to offer customers whatever they want and
whenever they want it.If the Eastland Equity company provides excellent customer service,they
will more likely to keep their current customers.This also means they will have a better opportunity
of retaining and expanding rapidly their group of customers.This also could imply shifting Eastland
Equity company's focus to new mix product or service.

Other than that,Eastland Equity Bhd also has doing a lot of CSR engagement from the start
of their business until now.Due this participation,they have a lot of experience and have built a
public trust along this industry.If the company can find a CSR programme that aligns with
their company's values,vision and mission,they will has the potential to make a significant positive
influence.CSR that has a huge effect can get a lot of press.If a company ever strives to
obtain popularity and media exposure,the CSR initiative could be a path to get success in this new
norm.Developing a CSR programme that gets company noticed will lead to a significant increase in
company's brand awareness and overall online industry.

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 Thus, the Eastland Equity can use this method to attract and be known among the
tourist.Hence,the company can eliminate the threat of being less known by the
tourist.Therefore,having an excellent CSR also allows a company to display consistency and gain
loyal customers,which eventually change into customer engagement and improved marketing.As an
example,Google has winning employer branding for their reactive CSR initiative which has help
them gaining profit and other improvement.

6.2 TOWS Analysis

TOWS Analysis is a variant of the common business tool,SWOT Analysis.The acronyms for the
words strengths,weaknesses,opportunities,and threats in TOWS and SWOT
are,however,different.Tows examine both the external(threats and opportunities)and
internal(weaknesses and strengths)environments.By analyzing both the external and internal
environments,the company can develop and plan a business strategy that includes
process,marketing,event planning,and campaign implementation to improve the company's
performance.

Tows Strengths Weakness

Opportunities SO1-Advocate event,ceremony and WO1-Be aware and always keep updated
opening sales to attract customers. with what customers want in order to suit
(S1&O1) customer’s preference and demand in
SO2-Offering a good and affordable markets.(W1&O1)
room package for local tourists. WO2-The growth of technology and the
(S2&O2) internet such as social media and
SO3-Implementing contactless applications will give the opportunity to
payments to the customer.(S3&O3) attract more consumers.(W3&O4)

Threats ST1-Intensify promotional WT1-Customer engagement strategy in

activity.(S3&T3) order to attract customers.(W1&

36
 ST2-Organizing Malaysia tourism T5)
campaigns to improve the well-being WT2-Invest in new ideas and implement
of the tourism sector in Malaysia. differential online pricing strategy from
(S4&T4) other competitors.(W3&T3)

 SO1-Promote a customer-attracting event,ceremony,and opening sales.(S1 and O1)

Eastland Equity Bhd is a large corporation with three major properties:The Grand Renai
Hotel,Kota Sri Mutiara Shopping Complex,and Tasek Raja commercial property
development.To attract customers,the company should promote an event,ceremony,and
opening sales.For example,to improve company performance and attract more customers,
the company can hold opening sales and discounts at Kota Sri Mutiara Shopping Complex
and organise ceremonies at The Grand Renai Hotel.

 SO2-Providing a good and reasonably priced room package for local tourists.(S2 and O2)

The company lost several international customers at the Grand Renai Hotel due to travel
restrictions.As a result,the company should concentrate on local customers and try to
entice them to visit their hotels.Before making any further plans to promote the hotel to
local customers,the company must first assess the current situation in the country.
Furthermore,local customers are advantageous to the company because they have the
ability to travel within the country.However,the company must adhere to local regulations
as well as the ministry of health's standard operating procedures.

 SO3-Introducing contactless payments to customers.(S3 and O3)

Nowadays,technology is being used to assist businesses and organisations in simplifying

and streamlining their operations.E-payment is widely recognised as one of the most
effective methods of making a convenient payment without causing a large number of
transactions.As a result,the company should use e-payment to improve business
efficiency.To make it easier for customers,the company can implement e-payment at The
Grand Renai Hotel and Kota Sri Mutiara Shopping Complex.

 ST1-Intensify promotional activity.(S3&T3)

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 Due to increased competition from other hotels,the hospitality sector in Kota Bharu is
expected to remain challenging.As a result,in order to keep the company competitive,
experienced top management must have a strategic plan in place,such as increased
promotional activity.The company can stay competitive by engaging in effective
promotional activities that increase the company's brand awareness among customers.

 ST2- Organizing Malaysia tourism campaigns to improve the state of the Malaysian
tourism industry.(S4&T4)
Eastland Equity Bhd can work with other tourism companies and the Malaysian government
to organise Malaysia tourism campaigns for both domestic and international visitors.This
campaign not only benefits the tourism company,but it also promotes,markets,and preserves
Malaysia as a tourist destination.

 WO1- Be aware of and always keep up to date with what customers want in order to meet
customer preferences and market demand.(W1&O1)
To meet the needs of the customer,the company must be aware of and constantly update its
knowledge of what the customer desires.Before deciding on a hotel to stay at,some
customers have their own preferences and standards.As a result,the company must ensure
that the hotel is kept up to date with modern and new technology such as Wifi,facilities,and
service in order to meet the preferences and demands of customers in markets.

 WO2-With the advancement of technology and the internet,such as social media and
applications,there will be more opportunities to attract customers.(W3 and O4)
Eastland Equity Berhad's main opportunity is to explore and improve in technology in order
to gain customer attention and industry placement in order to compete with competitors.The
Company can promote its products and services through its Facebook page,company
website,and other popular social media platforms.As a result,technology assists the
company in being more efficient in finding customers and promoting the business.

 WT1-Customer engagement strategy for attracting new customers.(W1 and T5)

People are concerned about their health as a result of a movement control order(MCO)while
going about their normal daily activities.People are being more cautious in their daily
activities in order to avoid becoming infected with and spreading the covid-19 virus.As a

38
 result,the company must implement a customer engagement strategy in order to persuade
and gain customer trust.In order to attract customers,the company must demonstrate its
credibility and trustworthiness.

 WT2-Invest in new ideas and implement a distinct online pricing strategy from competitors.
(W3 and T3)

Eastland Equity Bhd can sustain its performance by investing in new ideas for
managing,promoting,and managing the business.Because of the growing competition,the
company must be concerned about the industry's current situation.Implementing a
differential online pricing strategy is a good idea in order to stay current with the prices that
other companies offer to the customer.Eastland Equity Bhd can therefore improve their
management in order to remain competitive.

6.0 RECOMMENDATIONS

For conclusion, as we know strategic management is the continuous action plan,

controlling, evaluation, and analysis of all the resources required by an organization to meet its
objectives. Having a changes in industry surroundings will actually require companies repeatedly

39
reevaluating their techniques or strategies, moreover we now are being in a situation that require all
companies to follow the MCO due to the pandemic Covid 19. Hence, economy and market trend
tends to change based on the pandemic condition. Due to that, strategic management process are
important for a company to assists them in providing an overview of their current situation,
strategizing, implementing them, and analysis the successful of the  strategies that have been
adopted.

Besides that, strategic management  are made up differently depending on the surrounding
environment. It gives guidance by establishing plans and policies to achieve company's
objective and then assigning resources to put the strategies into action. A company such as Eastland
Equity Bhd need to be smart in planning their strategic management to gain a strong position in the
market compare to their competitors.

Due to movement control order (MCO), now it became a realisation as the predicament
shifted from a possibility to a certainty. When a crisis is emerging, implementing the strategic risk
requires a highly strategy-supportive ecosystem with higher leadership at the front line because it
is  the most challenging part of the strategic management process. A manager or leader need to play
a role in handling the risk by in charge someone that skillful and knowledgeable to help conduct the
strategies. As for the Eastland Equity Bhd, the company hire a new skilled manager to handle their
hotel business which is involving the safety of the customer , satisfaction and needed of the
customer during the MCO.

Lastly, for Eastland Equity Bhd to have a long-term business success, it requires an
effective strategic management. The company need to develop their business strategy with clear
objectives, developing clear strategies for accomplishing these objectives, trying to align business
activities to assist the objectives, and distributing the resources in order to reach the goals.

7.0 REFERENCES

B, K. (2020, August 18). Challenging business environment for Eastland. Retrieved December 24,
2021, from NST Online website:

40
 https://www.nst.com.my/property/2020/08/617591/challenging-business-environment-
eastland

David, F., Columbus, B., New, I., San, Y., Upper, F., River, S., … Tokyo, T. (n.d.). Strategic
Management Concepts and Cases Fourteenth Edition Global Edition. Retrieved from
http://www.microlinkcolleges.net/elib/files/postgraduate/Master%20of%20Business%20Ad
ministration/Strategic%20Management%20Concepts%20and%20Cases%20A%20Competit
ive%20Advantage%20Approach%204th%20Ed.pdf

Delgado, M., Porter, M. E., & Stern, S. (2015). Defining clusters of related industries. Journal of
Economic Geography, 16(1), 1–38. https://doi.org/10.1093/jeg/lbv017‌

Eastland Equity Bhd Annual Report 2021.(n.d.).Retrieved from

http://ir2.chartnexus.com/eeb/docs/ar/2021.pdf

Eastland Equity Bhd.(2022).Retrieved ,from Eeb.com.my website: http://www.eeb.com.my/

EASTLAND EQUITY BHD (“EASTLND”). (n.d.). Retrieved from

http://ir2.chartnexus.com/eeb/docs/qr/2020_Q4.pdf

EASTLND (2097): EASTLAND EQUITY BHD - Financials | I3investor. (2021). Retrieved

January 3, 2022, from I3investor.com website:
https://klse.i3investor.com/servlets/stk/fin/2097.jsp

Eastland Proposes Rights Issue to Fund RM23mil Land Acquisition. (2021). Retrieved December
11, 2021, from Property Hunter website:
https://www.propertyhunter.com.my/news/2017/11/4297/sabah/eastland-proposes-rights-
issue-to-fund-rm23mil-land-acquisition

EASTLND - EASTLAND EQUITY BHD (2021) : Profil Syarikat. (n.d.). Retrieved January 5,
2022, from Bursamalaysia.com website:
https://www.bursamalaysia.com/bm/trade/trading_resources/listing_directory/company-
profile?stock_code=2097

41
Harfield, T. (2022). Exportacion. Retrieved January 10, 2022, from Tripod.com website:
http://mario_gonzalez.tripod.com/Comercio/porter.html

Langley,H.(2020).As Google rethinks its remote work,it will need new employee
perks.Retrieved ,from Business Insider website:
https://www.businessinsider.com/google-future-remote-work-office-new-perks-for-
employees-2020-9

Mail, M. (2021, October 12). Eastland Equity aims to raise RM80m via rights issue with warrants |
Malay Mail. Retrieved January 10, 2022, from Head Topics website:
https://headtopics.com/my/eastland-equity-aims-to-raise-rm80m-via-rights-issue-with-
warrants-malay-mail-22105257

Pro, E. (2022). Eastland Equity PESTEL / STEP / PEST Analysis & Solution. Retrieved January
10, 2022, from embapro.com website: https://embapro.com/frontpage/pestelcoanalysis/21120-
eastland-equity
Pro, E. (2021). Eastland Equity SWOT Analysis / SWOT Matrix / Weighted SWOT Analysis.
Retrieved December 24, 2022, from embapro.com website:
https://embapro.com/frontpage/swotcoanalysis/21120-eastland-equity

Rosenthal, V. (2017, November 7). Eastland Equity issues renounceable rights to fund Malaysia
land purchase. Retrieved January 5, 2022, from Hotel Management website:
https://www.hotelmanagement.net/transactions/eastland-equity-issues-renounceable-rights-to-
fund-malaysia-land-purchase

Sufi,T.(2006).Mission statements and Corporate Performance in Hospitality Industry.

Retrieved January 10,2022,from ResearchGate website:
https://www.researchgate.net/publication/262767445_Mission_statements_and_Corporate_
Performance_in_Hospitality_Industry‌‌

8.0 APPENDICES

42
 APPENDICES A

IFAS TABLE

No Internal Factors Weight Rating Score Comment

Strengths

1 0.20 4.0 0.8

S1–Various Types of Key to expand in different
Business market sectors.
2 0.10 3.2 0.32 Able to develop new projects.
S2–Strong Free Cash
Flow
3 S3–Experienced top 0.05 3.0 0.15 Improvement of organization's
management operation method.

4 0.10 5.0 0.50 Keep the brand relevance.

S4–Strong Brand
Portfolio
5 0.05 3.0 0.15 Skilled employee
S5–High Skill
Training
Weaknesses

6 0.15 2.8 0.42

W1-Lack of demand Relatively lack of promotion
from customers and being affected by some
issue.
7 0.10 2.5 0.25
W2-The reduction in Too much investment in new
revenue projects.
8 0.10 4.0 0.40 Relatively lack of innovation
W3-Slow in the hotel business.
development in hotel
business

43
9 0.05 1.0 0.05
W4-Lower rental Affected by uncontrollable
revenue pandemic
10 0.10 2.2 0.22 Lack of resilience in situation
W5-Businesses
adjusting to a new
norm

1.00 3.26
Total

APPENDICES B

EFAS TABLE

44
No Weight Rating Score Comment(Company’s practice)
External Factors
Opportunities

1 0.12 3.0 0.36 International class services and

O1.Increased facilities to entertain customers
Emphasis on Leisure
2 0.02 3.0 0.06 Focus on local income generation
O2.Shift from
International to Local
3 0.16 1.0 0.16
O3.Growth of Does not adopt contactless
Contactless Payments payment methods yet
4 O4.Huge Scope for 0.13 3.0 0.39
Technology Usage of online communication
channels which needs to be
upgraded
5 O5.CSR Engagement 0.12 5.0 0.60
Community engagement and
social activities throughout the
year
Threats
6 0.04 3.0 0.12 Quality Control measures to
T1.Impact of minimise rework and wastages
movement control of
covid-19
7 0.04 4.0 0.16
T2.High Workforce sourced locally and
Unemployment rate focus on employment creation
8 T3.Fierce competition 0.20 4.0 0.80
Low prices,Safety
measures,comfort and value
creating facilities
9 0.07 3.0 0.21
T4:Travel and Focus on local income
tourism is in weak generation,following SOP,ethical
state pricing and exceptional services

45
 10 0.10 4.0 0.40 Maintain quality through SOP
T5:Resistance
towards travel and
tourism

1.00 3.26
TOTAL

APPENDICES C

SFAS TABLE
Strategic factors Weight Rating Weighted S H I N T E LONG Comment
score

46
 O RMEDIA

R TE

0.09 4.0 0.36 X

S1–Various Types Key to expand
of Business The business
0.08 5.0 0.4 X
S4–Strong Brand To keep the
Portfolio brand relevance
0.15 2.8 0.42 X
W1-Lack of Relatively lack
demand from of promotion and
customers being affected by
some issue.
0.17 4.0 0.68 X
W3-Slow Relatively
development in lack of
hotel business innovation
in the hotel
business.
O5.CSR 0.12 5.0 0.6 X
Engagement Need to
perform a
more in-depth
evaluation of
community to
identify key

47
 upgraded

0.09 3.0 0.27 X

O1.Increase International class
d Emphasis services and facilities
on Leisure to entertain customers

0.09 4.0 0.36 X

T3.Fierce expansion of the
competiti tourism industry
on
0.12 4.0 0.48 X Main quality
T5:Resistanc through SOP
e towards
travel and
tourism
Total 1.0 3.57

48
 APPENDICES D

EASTLAND EQUITY BHD ("EASTLND")

Registration No: 200001013359 (515965-A)
Incorporated in Malaysia

INTERIM REPORT - UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS

AT 31 DECEMBER 2020

As at As at
31.12.2020 31.12.2019
RM RM
Unaudited Audited
ASSETS
Non-Current Assets
Property, plant and equipment 101,002,683 104,828,521
Investment properties 82,592,000 82,592,000
Other investments 1,662,639 1,537,818
Total Non-Current Assets 185,257,322 188,958,339

Current Assets
Inventories - Property development cost 63,531,925 63,492,535
Inventories - Completed properties and others 10,456,628 11,147,508
Trade and other receivables 2,143,195 1,014,512
Tax recoverable 572,189 572,189
Deposits placed with licensed banks 4,308,137 4,627,629
Cash and bank balances 2,142,939 3,216,652
Total Current Assets 83,155,013 84,071,025
TOTAL ASSETS 268,412,335 273,029,364

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company
Share capital 129,878,659 129,878,659
Reserves 29,264,361 40,482,232
Total Equity 159,143,020 170,360,891

Non-Current Liabilities
Hire-purchase payables 235,597 210,121
Term loans 47,735,799 25,994,947
Deferred tax liabilities 11,015,824 11,015,824
Total Non-Current Liabilities 58,987,220 37,220,892

Current Liabilities
Trade and other payables 30,575,350 25,671,404
Contract liabilities 4,048,435 3,979,435
Provisions for liabilities 2,441,836 2,441,836
Hire-purchase payables 8,737 196,171
Term loans 2,815,432 3,388,446
Bank overdraft 10,392,305 29,770,289
Total Current Liabilities 50,282,095 65,447,581
Total Liabilities 109,269,315 102,668,473
TOTAL EQUITY AND LIABILITIES 268,412,335 273,029,364

Net asset per share (sen) 49 58

Notes:
(i) The 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 the interim financial
statements.
(ii) The financial year end has been changed from 31 December to 30 June. The next audited financial statements shall be for
a period of eighteen (18) months from 1 January 2020 to 30 June 2021 and thereafter, the financial year end shall be 30 June
for each subsequent year.

49
 EASTLAND EQUITY BHD
("EASTLND")
Registration No: 200001013359
(515965-A) Incorporated in
Malaysia
INTERIM REPORT - UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE PERIOD
ENDED 31 DECEMBER 2020

Individual Period Cumulative Period

Preceding
Year
Current Quarter Correspondi Unaudited12 Audited12 Months
3 Months ng Months Ended
Ended Quart Ended31.12.2020 31.12.2019
31.12.2020 er 3 Months
Ended
31.12.2019

RM RM RM RM

Continuing Operations

Revenue 4,232,246 4,626,924 12,806,012 18,074,088

Expenses excluding (5,704,588) (9,235,012) (20,416,699) (28,204,152)

finance cost
Other operating income 66,751 805,588 289,725 1,366,759

Loss from operations (1,405,591) (3,802,500) (7,320,962) (8,763,305)

Finance cost (799,704) (1,031,624) (4,021,729) (4,569,982)

Loss before taxation (2,205,295) (4,834,124) (11,342,691) (13,333,287)

Income tax expense - 543,555 - 543,555

Net loss for the period (2,205,295) (4,290,569) (11,342,691) (12,789,732)

Other
comprehensive 77,014 492,125 124,820 462,230
profit/(loss), net of
tax
Total comprehensive (2,128,281) (3,798,444) (11,217,871) (12,327,502)
loss for the period
Earnings per ordinary share
attributable to

equity holders of the

Company (sen)
Basic loss per share (0.68) (1.37) (3.50) (4.64)

Diluted - - - -

Notes:

50
 EASTLAND EQUITY BHD
("EASTLND")
Registration No: 200001013359 (515965-A)
Incorporated in Malaysia

INTERIM REPORT - UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD
ENDED 31 DECEMBER 2020

12 Months Ended 12 Months Ended

31.12.2020 31.12.2019
RM RM
Unaudited Audited
CASH FLOWS FROM/(USED IN) OPERATING
ACTIVITIES
Loss before income tax expense for the period (11,342,691) (13,333,287)

Adjustments for:
Gain on disposal of :
Property, plant and equipment (51,969) (36,000)
- Land held for development - -
Unrealised forex gain - -
Finance income (149,044) (234,394)
Finance cost 4,021,729 4,569,982
Reversal of impairment loss - TR (102,597)
Reversal of impairment loss - OR (8,488)
Fair value loss on investment properties - 2,520,000
Impairment loss on PPE 1,138,152
Impairment loss on receivables - -
Impairment loss no longer required on :
- financing receivables - -
- trade receivables - 19,617
- other receivables - 7,410
Loss on transfer of management corporation - -
Waiver of debts - (212,077)
Written off of deposits - -
Written off of other receivables - -
Written off of property, plant and equipment - -
Reversal of provision for liquidated ascertained damages - (158,447)
Depreciation of property, plant and equipment 3,895,197 4,318,866
Amortisation of prepaid lease payments - -
Contract liability
Operating Loss Before Working Capital Changes (3,626,778) (1,511,263)
(Increase)/Decrease in:
Lease & HP receivable -
Inventories - Property development cost (39,391) 80,781
Inventories - Completed properties and others 690,881 744,701
Trade and other receivables (1,128,683) 1,488,728

Increase/(Decrease) in:
Trade and other payables 4,903,944 (526,768)
Provision for liabilities - (104,032)
Contract liability 69,000 (587,054)
868,974 (414,907)

Income tax (paid)/refunded, net - 461,665

Interest paid (181,437)

Net Cash Flows From/(Used In) Operating Activities 868,974 (134,679)

CASH FLOWS FROM/(USED IN) INVESTING

ACTIVITIES
Additions to property, plant and equipment (97,490) (410,406)
Proceed from disposal of property, plant & equipment 80,100 36,000
Net payment in transfer of management corporation - -
Proceed from disposal of prepaid land lease payment - -
Interest received 149,044 234,394
Decrease in deposits pledged to banks 319,492 (814,811)
Net Cash Flows Generated From/(Used In) Investing Activities 451,146 (954,823)

51
 CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES
Proceeds from issuance of ordinary shares - 6,709,670
Repayment of term loans (950,847) (3,252,498)
Finance cost paid (1,893,374) (4,395,935)
Drawdown of term loan 19,990,331 659,941
Payment of hire-purchase payables (161,958) (167,840)

Net Cash Flows Generated From/(Used In) Financing 16,984,152 (446,662)

Activities
NET DECREASE IN CASH AND CASH EQUIVALENTS 18,304,271 (1,536,164)

CASH AND CASH EQUIVALENTS AT BEGINNING OF (26,553,637) (25,017,473)

PERIOD
CASH AND CASH EQUIVALENTS AT END OF (8,249,366) (26,553,637)
PERIOD
CASH AND CASH EQUIVALENTS AT END OF PERIOD COMPRISE THE FOLLOWING:
Cash and bank balances 1,897,003 2,976,163
Housing Development Account 245,936 240,489
Deposits placed with licensed banks 4,308,137 4,627,629
Bank overdrafts (10,392,305) (29,770,289)
(3,941,229) (21,926,008)
Less : Deposits pledged with licensed bank (4,308,137) (4,627,629)
(8,249,366) (26,553,637)

Notes:
(i)The 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 the interim financial statements.
(ii) The financial year end has been changed from 31 December to 30 June. The next audited financial statements shall be for a period of eighteen (18)
months
from 1 January 2020 to 30 June 2021 and thereafter, the financial year end shall be 30 June for each subsequent year.

EASTLAND EQUITY BHD (“EASTLND”)

INTERIM REPORT FOR THE FOURTH QUARTER ENDED 31

DECEMBER 2020 EXPLANATORY NOTES

A1 Basis of preparation

The interim financial statements are unaudited and have been prepared in accordance with
the reporting requirements of Malaysian Financial Reporting Standards (“MFRS”) 134:
Interim Financial Reporting issued by the Malaysian Accounting Standards Board
(“MASB”) and paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities
Berhad and should be read in conjunction with the Group’s annual audited financial
statements for the financial year ended 31 December 2019, which have been prepared in
accordance with the MFRS and the Companies Act 2016.

These explanatory notes provide an explanation of events and transactions that are
significant to the understanding of the changes in the financial position and performance of
the Group since the financial year ended 31 December 2019.

The accounting policies and methods of computation adopted by the Group in this interim
financial report are consistent with those adopted in the audited financial statements for the

52
 financial year ended 31 December 2019.

A2 Audit qualifications

The auditors’ report on the audited annual financial statements for the financial year ended
31 December 2019 was not subject to any qualification.

Key Audit Matters (“KAM”) highlighted by the auditors were funding requirements and
ability to meet short term obligations; investment properties and property, plant and
equipment; and revenue and corresponding costs recognition for property development
activities. Details of the KAM are provided in the audited financial statements for the
financial year ended 31 December 2019.

A3 Seasonality or cyclicality of operation

For the financial period under review, the operations of the Group are not subject to material
seasonal or cyclical fluctuations except for the Hospitality segment.

A4 Changes in the composition of the Group

For the financial period under review, there were no material changes in the composition of the
Group.

A5 Unusual items

There were no unusual items affecting assets, liabilities, equity, net income or cashflows
because of their nature, size or incidence during the financial period under review.

A6 Changes in estimates

There were no material changes in estimates in the current quarter results.

A7 Debt and equity securities

There were no issuance, repurchase and repayment of debt and equity securities for the financial
period under review

A8 Dividends paid
There was no dividend paid for the financial period under review.

53
A9 Segmental reporting

The Group’s segmental report for the financial period to date is as follows:
Investment Leasing & Hospitality Investment Property Others Total
properties financing holding development

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Revenue 2,855 - 9,051 - 900 - 12,806

Results
Segment profit/(loss) (8) (14) (3,762) (2,920) (751) (15) (7,470)
Interest income 147 - - - 2 - 149
Finance cost (10) - (8) (1,461) (2,543) - (4,022)
Loss before taxation (11,343)
Income tax expense -
Loss for the period (11,343)
Other comprehensive profit, net of tax 125

Total comprehensive loss for the period (11,218)

A10 Carrying amount of revalued assets

The carrying value of land and building is based on the valuation incorporated in the
annual financial statements for the year ended 31 December 2019 and valuation performed
by CH Williams Talhar & Wong Sdn Bhd on 22 January 2020.

A11 Subsequent material event

Except for the uncertainty of the Covid-19 global pandemic and the government stimulus
response, which are still fluid for which the financial impact cannot be ascertained at this
juncture, there were no material events subsequent to the end of the period that have not been
reflected in the financial statements for the period.

There will be an EGM on 03 March 2021 to seek the approval of shareholders for the
capitalisation of debts owing to Mr Lee Chee Kiang, the Managing Director of the Company
amounting to RM10,990,000.

A12 Changes in contingent liabilities and contingent assets

There were no known material contingent liabilities and contingent assets of the Group since
the 2019 annual report.

A13 Capital Commitments

54
 During the financial period under review, there were no material capital commitments that
the Group had contracted for and approved.

A14 Change in Accounting Year-End

The financial year end has been changed from 31 December to 30 June. The next audited
financial statements shall be for a period of eighteen (18) months from 1 January 2020 to 30
June 2021 and thereafter, the financial year end shall be 30 June for each subsequent year.

ADDITIONAL INFORMATION AS REQUIRED BY APPENDIX 9B OF THE BURSA

MALAYSIA SECURITIES BHD’S LISTING REQUIREMENTS

B1 Review of performance
Financial review for current quarter and financial year to date
Individual Period Cumulative Period
Preceeding Preceeding
Current Year Year Current Year Year
Quarter Corresponding Changes To-Date Corresponding Changes
Quarter (%) Period (%)

31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019

(RM '000) (RM '000) (RM '000) (RM '000)
Revenue 4,232 4,627 (9) 12,806 18,074 (29)
Operating Loss (1,406) (3,803) 63 (7,321) (8,763) 16
Loss Before Interest and Tax (1,406) (3,803) 63 (7,321) (8,763) 16
Loss Before Tax (2,205) (4,834) 54 (11,343) (13,333) 15
Loss After Tax (2,205) (4,291) 49 (11,343) (12,790) 11
Other comprehensive
profit/(loss), net of tax 77 492 - 125 462 -
Loss Attributable to Ordinary
Equity Holders of the Parent (2,128) (3,798) 44 (11,218) (12,328) 9
The Group recorded revenue of RM4.23 million for the current quarter as compared to
RM4.63 million in previous year’s corresponding quarter. There was a decrease of RM0.40
million mainly from lower hotel room and F&B revenue due to the Conditional Movement
Control Order (“CMCO”) in October 2020 and the drop in Complex rental due to reduction
in floor space by the anchor tenant.

B2 Material changes in the loss before taxation

Financial review for the current quarter compared with the immediate preceding quarter

55
 Immediate
Current Quarter Preceding
Quarter Changes (%)
31 Dec 2020 30 Sep 2020
(RM '000) (RM '000)
Revenue 4,232 4,322 (2)
Operating Loss (1,406) (527) (167)
Loss Before Interest and Tax (1,406) (527) (167)
Loss Before Tax (2,205) (1,582) (39)
Loss After Tax (2,205) (1,582) (39)
Other comprehensive profit/(loss), net
of tax 77 7 1,000
Loss Attributable to Ordinary Equity
Holders of the Parent (2,128) (1,575) (35)

The Group recorded a loss before tax of RM2.21 million and RM1.58 million for the
current and previous quarter respectively. The higher loss in the current quarter was mainly
attributed to the decrease in Hotel revenue which resulted in RM1.11 million loss in profit
due to the CMCO in October 2020. This loss was offset by a RM0.21 million gain from the
sale of 2 shoplots in Bandar Tasek Raja, an increase by RM0.03 million from Complex
rental and a lower finance cost due to the write-back of RM0.25 million of over- accrual of
finance cost during the MCO moratorium period from April to September 2020 in the
current quarter as compared to the previous quarter.
B3 Group prospects

The outlook for the rest of financial year 2021 is expected to be challenging for the Group.
The Covid-19 pandemic which gained traction in 2020 worldwide, has adversely affected the
global and domestic economy and posed financial liquidity risk and uncertainties to many
businesses. The Group’s businesses, being primarily in the hospitality and investment
property, have been affected by the Movement Control Order (“MCO’). The Group
experienced brief relief from the relaxation of MCO in June 2020 which saw an upward
trend in hotel occupancy in the third quarter of 2020. However, with the reimposition of
CMCO on Kuala Lumpur, Selangor and Putrajaya from 14 October 2020 and the imposition
of MCO2.0 in January 2021 in all States in Malaysia except for Sarawak has again adversely
affected the businesses of the Group and many others in the nation. Despite the gradual
relaxation of some restrictions under the MCO 2.0 recently, interstate travels and large scale
social and business gatherings are still restricted. As the responses by the Government,
businesses and general public towards the pandemic are still precautionary, we expect that
the performance of the Group will be affected, the financial impact on the Group for

56
 financial year 2021 and beyond could not be quantified at this stage.

Notwithstanding this, consistent with the preceding year’s efforts, the Group has continued
to explore into affordable housing in strategic and more vibrant areas. The Group recognises
that society and businesses will have to adjust to a new norm brought upon by the pandemic,
changing the business travel trends and spending behaviours where travelling is only for
essential purposes. While the Group will remain focused on its core business, the
management will continue to monitor the economic development post Covid-19 and remain
cautious when looking out for business opportunities in the face of new challenges.

B4 Variance of profit forecast and profit guarantee

Not applicable

B5 Corporate proposal

57
 (a) Proposed Acquisition of Development Rights
On 18 August 2020, the Company announced that its wholly-owned subsidiary, FBO Land
(Setapak) Sdn. Bhd. (“FBO”) had entered into a conditional sale and purchase agreement
(“CSPA”) with Inland World Sdn. Bhd. (“IWSB”). The CSPA lays out the agreement for
FBO to purchase all rights, title, benefits, interests, covenants, undertakings, duties, liabilities
and obligations of IWSB under the Joint Venture Agreement (as defined herein) which are to
be transferred to and/or assumed by FBO pursuant to the CSPA, for a purchase consideration
of RM8.0 million.

For information, IWSB had on 18 September 2018 enter into a joint venture agreement with
Sabah Urban Development Corporation Sdn. Bhd. (“SUDC”) (“Joint Venture Agreement”)
to collaborate in the development of a 14,059.82 square feet land, situated in Damai, in the
district of Kota Kinabalu, Sabah, which is managed by SUDC on behalf of Perbadanan
Pembangunan Ekonomi Sabah (the registered owner of the land) (“SEDCO”). In the Joint
Venture Agreement, IWSB will develop, construct and manage a building consisting of, inter
alia a 16-storey building with 2-storey shoplot, 5-storey carpark, 1-storey private facilities
and 8-storey commercial units (“Project”) on the said piece of land.

IWSB had on 28 October 2020 issued a written request to FBO to request for an extension of
time for a period of 90 days from 18 November 2020 to 15 February 2021 to obtain/fulfil the
conditions precedent of the CSPA. The Company had on 17 November 2020 announced that
FBO had agreed to grant IWSB the extension sought.

IWSB had on 2 February 2021 issued a written request to FBO to request for a further
extension of time for period of 90 days from 16 February 2021 to 16 May 2021 to satisfy the
conditions precedent of the CSPA. The Company had on 8 February 2021 announced that
FBO had agreed to grant IWSB the further extension sought. As at LPD, the CSPA has not
been completed.

(b) Proposed Debt Settlement

On 26 November 2020, the Company had announced that it had entered into a settlement
agreement to settle debts amounting to RM10,990,000 owing to Lee Chee Kiang, its
Managing Director, via the issuance of 104,966,571 Settlement Shares at an issue price of
RM0.1047 per Settlement Share.

On 21 January 2021, Bursa Malaysia Securities Berhad (“Bursa Securities”) had, vide its
letter dated 21 January 2021, resolved to approve the listing of and quotation for
104,966,571 Settlement Shares to be issued pursuant to the Proposed Debt Settlement,
subject to the following conditions:
1) Approval of the shareholders of the Company at the EGM to be convened for the Proposed Debt
Settlement is obtained;
2) The Company and AmInvestment Bank Berhad (“AmInvestment Bank”) must fully comply with the
relevant provisions under the Listing Requirements pertaining to the implementation of the Proposed
Debt Settlement;
3) The Company and AmInvestment Bank to inform Bursa Securities upon the completion of the
Proposed Debt Settlement;
4) The Company to furnish Bursa Securities with a written confirmation of its compliance with the terms
and conditions of Bursa Securities' approval once the Proposed Debt Settlement is completed; and

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 5) The Company to furnish Bursa Securities with a certified true copy of the resolution passed by the
shareholders in general meeting approving the Proposed Debt Settlement.

The Company had on 10 February 2021 announced an EGM on 3 March 2021 to seek
shareholders' approval for the proposed debt settlement.

Saved as disclosed above, there are no outstanding corporate proposals which have been
announced by the Company but not yet completed as at the date of this report.

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B6 Taxation

Tax (expense)/income
Income tax 3 months ended 3 months ended Year-to-date Year-to-date
31-Dec-20 31-Dec-19 31-Dec-20 31-Dec-19
RM'000 RM'000 RM'000 RM'000

-current year - - - -

-prior year - - - -

Deferred tax

-current year - 1,250 - 1,317

-prior year - (676) - (676)
- 574 - 641

B7 Group borrowings and debts securities

The Group borrowings, all denominated in Ringgit Malaysia, as at 31 December 2020 are as
follows: -

12/31/2020 12/31/2019

Short term Long term Short term Long term

RM'000 RM'000 RM'000 RM'000
Secured
Hire-purchase payables 9 236 196 210
Term Loan 2,815 47,736 3,388 25,995
Bank overdraft 10,392 - 29,770 -
13,216 47,971 33,354 26,205

The Group is currently in the final stage of completion of the documentation process of its
banking facilities rescheduling and restructuring subsequent to the 6 months automatic
moratorium period granted during the MCO in 2020. However, since letters of offer for the
rescheduling and restructuring of banking facilities have been accepted and executed
during the quarter, therefore the restructured facilities are reflected in the accounts.

B8 Changes in material litigation

There were no material litigations for the financial period under review.

B9 Dividend

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There was no dividend paid for the financial period under review.

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B10 Earnings per shares
3 months ended 3 months ended Year-to-date Year-to-date
31-Dec-20 31-Dec-19 31-Dec-20 31-Dec-19
RM'000 RM'000 RM'000 RM'000

Net loss attributable to

equity holders of the Company

- from continuing operation (2,205) (4,291) (11,343) (12,790)

(2,205) (4,291) (11,343) (12,790)

Number of ordinary share

in issue ('000) 324,282 312,425 324,282 275,417

Loss per share (sen)

Basic, loss from
- continuing operations (0.68) (1.37) (3.50) (4.64)
Basic loss per share (0.68) (1.37) (3.50) (4.64)

Diluted - - - -

B11 Loss for the period

Current
Quarter Year-to-date
RM'000 RM'000

This is arrived at after (charging)/crediting:

Interest income 44 149

Interest expense (800) (4,022)
Depreciation and amortization (974) (3,895)

Other disclosure items pursuant to Appendix 9B, Part A(16) of the Listing
Requirements of Bursa Malaysia Securities Berhad are not applicable.

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