Half Yearly Report

RNS Number : 1794P
Asian Plantations Limited
29 September 2011
 



29 September 2011

 

 

Asian Plantations Limited

("APL" or the "Company")

 

Interim Results for the Six Months ended 30 June 2011 &

Proposed Acquisition

 

 

Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce its unaudited interim results for the six month period ending 30 June 2011.

 

Highlights

 

·      Sale of 1,233 tonnes fresh fruit bunches ("FFB") sold at an average price of RM671 (circa. US$221) per tonne.

 

·      Fundraise of £16 million (circa. US$25 million) on 28 February 2011, via an institutional placing at 220 pence per share, representing a premium of 193 per cent. to the Company's admission price of 75 pence per share on 30 November 2009. 

 

·      Subsequent to the end of the period under review, on 17 August 2011, the Company raised an additional US$2.1 million, via the issuance of a convertible bond with an effective conversion price of 309 pence per share based on current exchange rates.

 

·      On 25 August 2011, the announcement of the acquisition of the partly developed 5,000 hectare Dulit estate adjacent to the Company's existing Incosetia estate. The Dulit estate is expected to generate in excess of 22,000 tonnes of FFB in 2012. This acquisition brings the Company's total land resource to 20,645 hectares, in line with its growth objectives stated at admission.

 

·      Aggressive planting programme remains on track and the Company expects its current land resource, including that of the Dulit estate, to be fully planted by early 2014.

 

·      The Company's mill is currently under construction and the requisite state approvals have been secured. The mill is expected to be operational in 4Q 2012.

 

Tan Sri Datuk Linggi, Non-Executive Chairman of APL, commented:

 

"We are now into our fourth year of significant investment and land development. Based on the current planting schedule and pro forma for the closing of the recently announced Dulit acquisition, we expect to harvest approximately 50,000 tonnes of FFB in 2012, with an eventual target of over 500,000 tonnes per annum, as all four existing fields fully mature in the years ahead.

 

"The recently announced Dulit acquisition achieves our previously stated strategy to achieve a land resource of titled, Malaysian agricultural land in excess of 20,000 hectares by November 2011, two years following the Company's admission to AIM.  Further, we anticipate that at the time the Dulit acquisition successfully completes, three of the Company's four estates will be revenue producing.

 

"All indicators point to increased scarcity for Malaysian titled land, a relative tightness in global edible oil inventories and rising global awareness about the importance of palm oil in the global food supply chain. Coupling these trends with a healthy edible oil price environment, the board of APL (the "Board") believes that its strategy of assembling properly titled, land parcels in Malaysia, an investment grade rated country, will generate long term substantial value for the Company's shareholders."

 

Proposed Acquisition

 

In addition, the Board announces that a subsidiary of the Company has recently entered into a conditional agreement for the proposed acquisition of a Malaysian company (the "Proposed Target") for a total maximum consideration of up to US$22 million.  The Proposed Target holds a 60 per cent. equity interest in a joint venture company that will have ownership over two distinct land parcels in Sarawak, Malaysia (the "Proposed Acquisition").  The land parcels, the size of which remains subject to a land survey but which the Board estimates to aggregate up to approximately 20,000 hectares, are to be jointly developed pursuant to a joint venture agreement between the Proposed Target and a Sarawak Government-linked entity.  In respect of the Proposed Acquisition, the completion of which remains subject to Board approval, the Company has paid a refundable deposit of RRM7.9 million (US$2.5 million) to the Proposed Target until completion of APL's due diligence exercise, expected to be within two to three months, at which point the Board will decide whether to further pursue the opportunity.  In the event that the Board decides to pursue the Proposed Acquisition, APL will seek to secure the required funding via a combination of an equity fundraise and/or a new debt facility. A further announcement will be made in due course. 

 

 

For further information contact:

 

Asian Plantations Limited

Dennis Melka, Joint Chief Executive Officer

Graeme Brown, Joint Chief Executive Officer

 

 

                       Tel:  +65 6325 0970

 

Strand Hanson Limited

James Harris

Paul Cocker

Liam Buswell

 

 

Tel: +44 (0) 20 7409 3494

Panmure Gordon (UK) Limited

Tom Nicholson

Callum Stewart

 

 

Tel:   +65 6824 8204

Tel: +44 (0) 20 7459 3600

Bankside Consultants

Simon Rothschild

 

 

Tel: +44 (0) 20 7367 8871

 

 


Interim Condensed Consolidated Income Statement

for the six-month period ended 30 June 2011

                                                                                                                                                  

 

 

 




Note

 

 


Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010






USD'000


USD'000






Unaudited


Unaudited









Revenue





274


101









Cost of sales





(167)


(78)











Gross profit





107


23









Other income



6


141


18









Other items of expenses








Administrative expenses



7


(1,296)


(942)

Other expenses



8


(1,334)


(543)

Finance expenses



9


(802)


(565)

















Loss before taxation





(3,184)


(2,009)

Income tax expense



10


209


-

















Loss for the period





(2,975)


(2,009)

















Loss attributable to :
















Owners of the Company





(2,975)


(2,009)

















Loss per share attributable to owners of the Company (cents per share)
















Basic



11


(7.7)


(6.8)









 

Diluted



 11


(7.7)


(6.8)









 

 

 

 

 

 

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

 



Interim Condensed Consolidated Statement of Comprehensive Income

for the six-month period ended 30 June 2011

                                                                                                                                                  

 

 

 




Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010

 




USD'000


USD'000

 




Unaudited


Unaudited

 







 

Loss for the period



(2,975)


(2,009)

 







 

Other comprehensive income:






 

Foreign currency translation adjustments



764


612

 







 









Total comprehensive income for the period



(2,211)


(1,397)

 







 







 

Total comprehensive income attributable to:






 







 

Owners of the Company



(2,211)


(1,397)

 







 







 

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

 

 

 

Interim Condensed Consolidated Statement of Financial Position as at 30 June 2011

                                                                                                                                                  

 

 

 





Note


30.6.2011


31.12.2010







USD'000


USD'000







Unaudited


Audited










Non-current assets


















Property, plant and equipment




12


11,904


9,576

Biological assets




13


14,365


11,022

Land use rights




14


33,933


33,546

Goodwill on consolidation






7,726


7,560



















Total non-current assets






67,928


61,704



















Current assets



























Inventories






238


122

Trade and other receivables






464


193

Prepaid operating expenses






674


165

Cash and cash equivalents




15


22,438


1,247



















Total current assets






23,814


1,727



















Total assets






91,742


63,431



















Current liabilities



























Trade and other payables






820


795

Other liabilities






515


253

Loans and borrowings

Derivative financial instruments




16

17


2,156

502


2,267

-

















Total current liabilities






3,993


3,315


















Non-current liabilities


















Loans and borrowings




16


40,614


36,304

Convertible bonds




17


865


-

Deferred tax liabilities






5,734


5,810



















Total non-current liabilities






47,213


42,114



















Total liabilities






51,206


45,429



















Net assets






40,536


18,002



















 

 

Interim Condensed Consolidated Statement of Financial Position as at 30 June 2011 (cont'd)

                                                                                                                                                  

 

 

 





Note


30.6.2011


31.12.2010







USD'000


USD'000







Unaudited


Audited










Attributable to owners of the Company


















Share capital




18


66,956


42,211

Other reserves






(18,231)


(18,995)

Accumulated losses






(8,189)


(5,214)



















Total equity






40,536


18,002























































The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

 


Interim Condensed Consolidated Statement of Changes in Equity

for the six-month period ended 30 June 2011

                                                                                                                                                              

 

 

 


Attributable to equity holders

of the Company

 

 

Share

capital


Other reserves


Accumulated losses


Total

equity


USD'000


USD'000


USD'000


USD'000









For the six months ended 30.6.2011
















Unaudited








At 1 January 2011

42,211


(18,995)


(5,214)


18,002

















Loss for the period

-


-


(2,975)


(2,975)









Other comprehensive income








Foreign currency translation adjustments

-


764


-


764

















Total comprehensive income for the period

-


764


(2,975)


(2,211)









Issuance of ordinary shares for cash

25,752


-


-


25,752

Share issuance expenses

(1,007)


-


-


(1,007)

















At 30 June 2011

66,956


(18,231)


(8,189)


40,536

























For the six months ended 30.6.2010
















Unaudited








At 1 January 2010

35,459


(20,452)


(1,748)


13,259

















Loss for the period

-


-


(2,009)


(2,009)









Other comprehensive income








Foreign currency translation adjustments

-


738


(126)


612

















Total comprehensive income for the period

-


738


(2,135)


(1,397)

















At 30 June 2010

35,459


(19,714)


(3,883)


11,862

















 

 







 

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.



Interim Condensed Consolidated Statement of Cash Flows

for the six-month period ended 30 June 2011

                                                                                                                                                  

 

 

 




Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010




USD'000


USD'000




Unaudited


Unaudited







Cash flows from operating activities






Loss before taxation



(3,184)


(2,009)







Adjustments for:






Amortisation of land use rights



315


198

Depreciation of property, plant and equipment



68


22

Gain on disposal of property, plant and equipment



(1)


-

Loss arising from changes in fair value of convertible bond



299


-

Interest income



(59)


-

Interest expense



802


565

Unrealised gain on foreign exchange



(51)


-

Currency realignment



-


(38)













Operating cash flows before changes in working capital



(1,811)


(1,262)







 Increase in inventories



(114)


(38)

 (Increase)/decrease in trade and other receivables



(287)


1

Increase in other assets



(506)


(51)

Increase/(decrease) in trade and other payables



268


(316)













Cash flows used in operations



(2,450)


(1,666)







Tax refund



20


-

Interest received



59


-

Interest paid



(1,346)


(638)













Net cash used in operating activities



(3,717)


(2,304)













Cash flows from investing activities












Proceeds from disposal of property, plant and equipment



 

3


 

-

Purchase of property, plant and equipment



(2,074)


(1,169)

Additions to biological assets



(2,204)


(1,387)













Net cash used in investing activities



(4,275)


(2,556)







 

 



Interim Condensed Consolidated Statement of Cash Flows 

for the six-month period ended 30 June 2011 (cont'd)

                                                                                                                                                  

 

 

 




Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010




USD'000


USD'000




Unaudited


Unaudited







Cash flows from financing activities












Proceeds from issuance of ordinary shares



25,752


-

Share issuance expenses



(1,007)


-

Proceed from convertible bond



1,000


-

Repayment of term loan



(3)


-

Drawdown of term loans



3,268


2,226

Repayment of finance lease



(49)


(18)













Net cash generated from financing activities



28,961


2,208













Net increase/(decrease) in cash and cash equivalents



20,969


(2,652)

Effect of exchange rates on cash and cash equivalents



450


214

Cash and cash equivalents, beginning balance



1,019


4,174













Cash and cash equivalents, ending balance

(Note 15)



 

22,438


 

1,736







 

 

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

 


1.         General Information

 

(a)    Corporate information

 

Asian Plantations Limited (the "Company") is a limited liability company incorporated and domiciled in the Republic of Singapore and listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

 

The registered office of the Company is located at No.14 Ann Siang Road, #02-01, Singapore 069694.

 

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are development of oil palm plantation. 

 

(b)    Subsidiaries

 

As disclosed in the Group's annual financial statements as at 31 December 2010, the Group acquired Fortune Plantation Sdn. Bhd on 31 December 2010. The goodwill on acquisition of USD2,712,000 continues to be determined on a provisional basis as the purchase price allocation has not been completed by the date the interim financial statements was authorised for issue.  

 

During the financial period, the Company acquired two new subsidiaries. The two new subsidiaries are dormant companies and therefore do not have a material effect on the financial results and financial position of the Group. There is no acquisition related expenses arising from the acquisition of these subsidiaries.

 

2.         Basis of preparation and changes to the Group's accounting policies

 

Basis of preparation

 

The interim condensed consolidated financial statements for the six months ended 30 June 2011 are unaudited and do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2010.

 

The interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

 

The accounting policies, presentation and methods of computation have been followed in these unaudited financial statements as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2010.

 

The financial statements are presented in United States Dollars ("USD") to facilitate the comparison of financial results with companies in the oil-palm industry and all values are rounded to the nearest thousand ("USD'000") except when otherwise indicated.

 

The interim condensed consolidated financial statements for the six months ended 30 June 2011 was approved by the Directors on 30 September 2011.



2.         Basis of preparation and changes to the Group's accounting policies (cont'd)

 

New standards, interpretations and amendments thereof, adopted by the Group

 

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2010, except for the adoption of new standards and interpretations as of 1 January 2011, noted below:

 

IAS 24 Related Party Transactions (Amendment)

 

The IASB has issued an amendment to IAS 24 that clarifies the definitions of a related party.  The new definitions emphasise a symmetrical view of related party transactions as well as clarifying in which circumstances persons and key management personnel affect related party relationships of an entity. Secondly, the amendment introduces an exemption from the general related party disclosure requirements for transactions with a government and entities that are controlled, jointly controlled or significantly influenced by the same government as the reporting entity. The adoption of the amendment did not have any impact on the financial position or performance of the Group.

 

IAS 32 Financial Instruments: Presentation (Amendment)

 

The amendment alters the definition of a financial liability in IAS 32 to enable entities to classify rights issues and certain options or warrants as equity instruments. The amendment is applicable if the rights are given pro rate to all the existing owners of the same class of an entity's non-derivative equity instruments, to acquire a fixed number of the entity's own equity instruments for a fixed amount in any currency. The amendment has no effect on the financial position or performance of the Group.

 

IFRIC 14 Prepayments of a Minimum Funding Requirements (Amendment)

 

The amendment removes an unintended consequence when an entity is subject to minimum funding requirements ("MFR") and makes an early payment of contributions to cover such requirements. The amendment permits a prepayment of future service cost by the entity to be recognised as pension asset. The Group is not subject to minimum funding requirements in the Republic of Singapore. The amendment to the interpretation therefore had no effect on the financial position or performance of the Group. 

 

Improvements to IFRS (issued May 2010)

 

In May 2010, the IASB issued its third omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption of the following amendments resulted in changes to accounting policies, but did not have any impact on the financial position or performance of the Group.

 

IFRS 3 Business combinations: The measurement options available for non-controlling interest ("NCI") have been amended. Only components of NCI that constitute a present ownership interest that entitles their holder to a proportionate share of the entity's net assets in the event of liquidation shall be measured at either fair value or at the present ownership instruments' proportionate share of the acquiree's identifiable net assets. All other components are to be measured at their acquisition date fair value.



2.         Basis of preparation and changes to the Group's accounting policies (cont'd)

 

New standards, interpretations and amendments thereof, adopted by the Group (cont'd)

 

IFRS 7 Financial Instruments - Disclosures:  The amendment was intended to simplify the disclosures provided by reducing the volume of disclosures around collateral held and improving disclosures by requiring qualitative information to put the quantitative information in context. 

 

IAS 1 Presentation of Financial Statements:  The amendment clarifies that an option to present an analysis of each component of other comprehensive income may be included either in the statement of changes in equity or in the notes to the financial statements.

 

IAS 34 Interim Financial Statements:  The amendment requires additional disclosures for fair values and changes in classification of financial assets, as well as changes to contingent assets and liabilities in interim condensed financial statements. 

 

Other amendments resulting from improvements to IFRS to the following standards did not have any impact on the accounting policies, financial position or performance of the Group:

 

IFRS 3 Business Combinations - Clarification that contingent consideration arising from business combination prior to adoption of IFRS 3 (as revised in 2008) are accounted for in accordance with IFRS 3 (2005).

 

IFRS 3 Business Combinations - Unreplaced and voluntarily replaced share-based payment awards and its accounting treatment within a business combination.

 

IAS 27 Consolidated and Separate Financial Statements - applying the IAS 27 (as revised in 2008) transition requirements to consequentially amended standards.

 

IFRIC 13 Customer Loyalty Programmes - in determining the fair value of award credits, an entity shall consider discounts and incentives that would otherwise be offered to customers not participating in the loyalty programme. 

 

Standards, interpretation or amendment issued but not yet effective

 

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. 

 

3.         Significant accounting judgements and estimates

 

The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future period.

 

 



3.         Significant accounting judgements and estimates (cont'd)

 

3.1       Judgements made in applying accounting policies

 

            In the process of applying the Group's accounting policies, management has made the following judgements, apart from those involving estimations, which has the most significant effect on the amounts recognised in the consolidated financial statements:

 

(a)  Determination of functional currency

 

The Group continues to determine its functional currencies to be RM based on management's assessment of the economic environment in which the entities operate and the entities' process of determining sales prices.

 

(b) Fair value of biological assets (immature plantation)

 

Biological assets are stated at fair value. Management maintain the judgement that cost approximates fair value of the biological asset for immature plantation because it involved a new oil palm plantation and that little biological transformation has taken place since its initial cost incurrence. The carrying amount of the immature plantation as at 30 June 2011 is USD12,278,000 (31 December 2010: USD8,927,000).

 

3.2       Key sources of estimation uncertainty

 

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

 

(a) Biological assets (mature plantation)

 

The Group continues to measure its mature plantation included in the biological assets at fair value less estimated costs to sell, based on discounted cash flow model. The carrying amount of the mature plantation as at 30 June 2011 is USD960,000 (31 December 2010: USD940,000). Further details of the key assumptions used are disclosed in Note 13.

 

(b) Useful lives of property, plant and equipment

 

There are no changes to the estimated economic useful life of property, plant and equipment of within 5 to 25 years.

 

(c) Impairment of non-financial assets

 

Goodwill arising from business combinations is allocated to the cash-generating unit, namely the plantation estate, for the purpose of impairment testing. Management continues to assess for impairment based on value-in-use calculations using cash flow projections, covering a period of 25 productive years of oil palms, based on financial budgets approved by management. Based on management's analysis, goodwill is not impaired as at 30 June 2011.



4.         Seasonality of operations         

 

The Group's plantation operations are affected by seasonal crop production, weather conditions and fluctuating commodity prices. As a result, the comparison of half-year to half-year results may not be a good indicator of the overall trend of the Group's plantation operations or of the results for the whole of the financial period. 

 

5.         Operating segment information           

 

The Group continues to be organised as one segment and the Chief Operating Decision Makers review the profit or loss of the entity as a whole, which is the plantation segment and in one geographical location, Malaysia.

 

6.         Other income  

 





Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010





USD'000


USD'000





Unaudited


Unaudited








Short term deposits interest income




 60


18

Sale of seedlings




81


-








 

 




141


18

 

7.         Administrative expenses

 

Included in administrative expenses are audit, tax, legal and other professional fees amounting to USD345,000 (six months ended 30.6.2010: USD464,000). 

 

8.         Other expenses

 




Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010




USD'000


USD'000




Unaudited


Unaudited







Loss arising from changes in fair value of embedded derivative of the convertible bond



 299


-

Net foreign exchange loss



493


-

Repair and maintenance



164


133

Motor vehicle running expenses



1


-

Amortisation of land use rights



315


198

Cost of seedlings sold



62


-

Acquisition of subsidiary related expenses



-


212







 

 



1,334


543



9.         Finance expenses

 





Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010





USD'000


USD'000





Unaudited


Unaudited








Interest expense on loans and borrowings




 726


565

Interest expense on convertible bond




9



Accretion of interest on the convertible bond




67


-








 

 




802


565

 

10.       Income tax expense     

 

The major components of income tax expense in the interim consolidated income statement are:

 





Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010





USD'000


USD'000





Unaudited


Unaudited








Over provision of income tax expense in prior period




 (11)


-

Deferred income tax expense related to origination and reversal of deferred taxes




(198)


-








Total income tax expense

 




(209)


-

 

11.       Loss per share

 

Basic loss per share are calculated by dividing loss, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period.

 

The following tables reflect the loss and share data used in the computation of basic loss per share for the respective periods: 












Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010





USD'000


USD'000





Unaudited


Unaudited








Loss for the period attributable to owners of the Company




 (2,975)


(2,009)

















11.       Loss per share (cont'd)





Six Months

Ended

30.6.2011


Six Months

Ended

30.6.2010

 

 




Number of shares


Number of shares





'000


'000

Weighted average number of ordinary shares for basic and diluted loss per share computation*




38,387


29,577















  * The weighted average number of ordinary shares takes into account the weighted average  

effect of changes in ordinary shares transactions during the period.

 

The unsecured convertible bonds of USD1 million issued during the period have not been included in the calculation of diluted earnings per share because they are anti-dilutive.

 

12.       Property, plant and equipment

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









At cost








At 1 January





9,576


5,063

Additions





2,482


2,950

Disposal





(2)


-

Acquisition of subsidiaries





-


1,286

Depreciation





(363)


(355)

Exchange differences





211


632






















11,904


9,576

















Depreciation of property, plant and equipment capitalised to biological assets:





295


312









 

13.       Biological assets

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









At fair value








At 1 January





11,022


6,093

Additions





3,110


4,121

Exchange differences





233


808






















14,365


11,022



































13.       Biological assets (cont'd)

 

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









Represented by:








Mature plantation





960


940

Immature plantation





12,278


8,927

Nursery





1,127


1,155






















14,365


11,022

















Mature oil palm trees produce fresh fruit bunches("FFBs") which are used to produce Crude Palm Oil ("CPO"). The fair values of oil palm plantations are determined by using the discounted future cash flows of the underlying plantations.  The expected future cash flows of the oil palm plantations are determined using the projected selling prices of CPO in the market.

 

Significant assumptions made in determining the fair values of the mature oil palm plantations, using a discounted cash flow model, are as follows:

 

(a)        no new planting or re-planting activities are assumed;

 

(b)        oil palm trees have an average life that ranges from 28 years (31.12.2010: 28 years), with the first three years as immature and the remaining years as mature;

 

(c)        discount rate used for the Group's plantation operations which is applied in the discounted future cash flows calculation is 9.1% (31.12.2010: 9.6%);

 

(d)        FFB price is derived by applying the oil extraction rate to the estimated CPO price of USD735 (31.12.2010: USD741) per metric tonne; and

 

(e)        yield per hectare of oil palm trees is based on the standard yield profile of the industry.

 

14.       Land use rights

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









At cost








At 1 January





33,546


20,950

Acquisition of subsidiaries





-


10,702

Amortisation charge





(315)


(406)

Exchange differences





702


2,300






















33,933


33,546



















15.       Cash and cash equivalents

 

For the purpose of the interim condensed consolidated statement of cash flows, cash and cash equivalents comprised the following:

 






30.6.2011


30.6.2010






USD'000


USD'000






Unaudited


Unaudited









Cash at bank





18,051


508

Short term deposits





4,387


1,228






















22,438


1,736

















 

16.       Loans and borrowings

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









Current
















Bank overdraft





-


228

Short term revolving credit





1,987


1,946

Term loans





5


6

Obligation under finance leases





164


87






















2,156


2,267

















Non-current
















Term loans





39,969


35,950

Obligation under finance leases





645


354






















40,614


36,304

















Total loans and borrowings
















Bank overdraft





-


228

Short term revolving credit





1,987


1,946









Term loans





39,974


35,956

Obligation under finance leases





809


441






















42,770


38,571



















16.       Loans and borrowings (cont'd)

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited

Maturity of borrowings (excluding   obligations under finance leases)
















Within one year





1,992


2,180

After one year but not more than five 

 years





19,453


4,086

More than five years





20,516


31,864






















41,961


38,130









 

Short-term revolving credit and term loans

 

The short term revolving credit is denominated in RM and bears interest at the rate of the bank's cost of fund plus 2.5%. It is repayable on demand and has a six months' rollover period upon maturity.

 

The term loans are denominated in RM and bear interest ranging from the rate of the bank's cost of fund plus 2% to 2.5% per annum to base lending rate plus 1% per annum. They are repayable over 6 years after moratorium periods of 3 to 4 years.

 

The short term revolving credit and term loans are secured by legal charges over the rights to use the long term leasehold land of which the Group has prepaid the lease payments relating to the land as disclosed in Note 14.

 

17.       Convertible bond

 






30.6.2011


31.12.2010



Maturity



USD'000


USD'000






Unaudited


Audited









USD1 million


18 November 2014



865


-









 

The unsecured convertible bond of USD1 million, bears a cash interest coupon of 1.75% per annum which is payable semi-annually and has a maturity period of four years. The convertible bond may be converted, in whole only, into 313,383 new ordinary shares of no par value in the Company. This represents a conversion price of 201 pence per share, at any time until the maturity date at the bondholder's election. In the event of non-conversion, the Company shall redeem the convertible bond, in whole, on maturity date such that the amount paid by the Company on redemption results in the bondholder having achieved, in respect of the convertible bond, including coupon payments, an internal rate of return of 10%. 



17.       Convertible bond (cont'd)

 

The carrying amount of liability component of the convertible bond at end of reporting period at as follows:

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









Face value of the convertible bond





1,000


-

Less: Embedded derivative





(203)


-









Liability component at initial recognition





797


-

Add: Accretion of interest on the convertible bond





68
























865


-

















Embedded derivative relating to the conversion option of the convertible bond is recorded as a "fair value through profit or loss" financial instrument with a balance of USD502,000 as at 30 June 2011.

 

18.       Share capital

 





30.6.2011


30.6.2011


31.12.2010


31.12.2010





No. of shares




No. of shares







'000


USD'000


'000


USD'000





Unaudited


Unaudited


Audited


Audited












At 1 January 2011 / 1 January 2010




33,445


42,211


29,577


35,459

Issuance during the period/year




7,272


25,752


3,868


6,752

Share issuance expense




-


(1,007)


-


-
















At 30 June 2011 / 31 December 2010




40,717


66,956


33,445


42,211
















-


-


-


-

 

            Issuance of shares

 

On 28 February 2011, the Company has issued an additional 7,272,728 shares amounting to GBP16,000,001 (equivalent to USD25,752,000) via shares placement.  



19.       Commitments and contingencies

 

(a)   Capital commitments

 

Capital commitments contracted for at the end of the reporting period but not recognised in the financial statements are as follows:

 






30.6.2011


31.12.2010






USD'000


USD'000






Unaudited


Audited









Approved and contracted for:








-    property, plant and equipment





909


337









Approved and not contracted for:








-    property, plant and equipment





647


17,157

-    biological assets





5,261


6,546






















6,817


24,040

















(b)    Contingencies

 

The Group does not have contingent liabilities as at 30 June 2011 and 31 December 2010.

 

(c)    Operating lease commitments

 

As lessee

 

The Group has no operating lease commitments other than the land use rights as mentioned in Note 14.



19.       Commitments and contingencies (cont'd)

 

(d)   Finance leases

 

 



30.6.2011


31.12.2010

 



Minimum lease payments


Present value of minimum lease payments


Minimum lease payments


Present value of minimum lease payments



USD'000


USD'000


USD'000


USD'000



Unaudited


Unaudited


Audited


Audited










Not later than one year

 


212


164


115


87

Later than one year but not more than five years


 

 

712


 

 

634


 

 

329


 

 

287

More than five years


11


11


67


67









Total minimum lease payments

 


 

935


 

809


 

511


 

441

Less: Amount representing finance charges


 

 

(126)


 

 

-


 

 

(70)


 

 

-

















Present value of minimum lease payments


 

 

809

 

 

809


 

 

441


 

 

441

 

20.       Related party disclosures

 

The following are the significant transactions between the Group and related parties (who are not members of the Group) that took place during the financial period ended 30 June 2011 and 30 June 2010 at the terms agreed between the parties, which are conducted at arm's length.

 

 






Six Months

Ended


Six Months

Ended






30.6.2011


30.6.2010






USD'000


USD'000






Unaudited


Unaudited









Transactions with related parties








- Construction of estate housing





186


200

- Expenses payable





68


51






















254


251

















 



20.       Related party disclosures (cont'd)

 

Compensation of key management personnel

 

 






Six Months

Ended


Six Months

Ended






30.6.2011


30.6.2010






USD'000


USD'000






Unaudited


Unaudited









Directors' salaries





254


55

Directors' fees





97


15

Short term employee benefits





76


48

Contribution to defined contribution plans





9


6






















436


124

















 

Comprise amounts paid to:








- Directors of the Company





351


70

- Other key management personnel





85


54






















436


124

















21.       Events occuring after the reporting period

                                     

(a)   Convertible unsecured bond

 

On 15 August 2011, the Company has issued convertible unsecured bonds ("Convertible Bonds") amounting to USD2.1 million to an existing shareholder of the Company and other investors. The convertible bond bears a cash interest coupon of 2.50% per annum, repayable semi-annually until the four year maturity in 2015 (the "maturity date"). The Convertible Bonds may be converted, in aggregate, into 434,700 new ordinary shares of no par value in the Company. This represents a conversion price of 294 pence per share, based on the current exchange rate, at any time until the Maturity Date at the individual bondholder's election. This conversion price represents a 17% premium to the closing price on 16 August 2011. In the event of non-conversion, the Company shall redeem all outstanding, non-converted Convertible Bonds, in whole, on the Maturity Date, such that the amounts paid by the Company on redemption result in the bondholders having achieved, in respect of the Convertible Bonds, including coupon payments, an internal rate of return of 10%.   

 

(b)   Proposed acquisition of semi-developed plantation land

 

On 25 August 2011, a subsidiary of the Group has entered into a conditional agreement to acquire 5,000 hectares of semi-developed plantation land (the "Dulit Estate") in Sarawak, Malaysia (the "Proposed Acquisition"). The Dulit Estate, which shares a common border with the Company's Incosetia Estate, consists of planted area of 2,543 hectares with palms that are approximately 3 to 5 years old, with the remainder unplanted. The total maximum consideration for the Proposed Acquisition, which is subject to, inter alia, certain regulatory conditions and potential purchase price adjustments amount to RM102 million (USD34.4 million).     

 

 

21.       Events occuring after the reporting period (cont'd)

                                     

(c)    Proposed acquisition of 100% equity interest in a Malaysian company

 

On 21 September 2011, a subsidiary of the Group has entered into a conditional agreement for the proposed acquisition of a Malaysian company (the "Proposed Target") for a total maximum consideration of up to US$22 million.  The Proposed Target holds a 60 per cent. equity interest in a joint venture company that will have ownership over two distinct land parcels in Sarawak, Malaysia (the "Proposed Acquisition").  The land parcels, the size of which remains subject to a land survey but which the Board estimates to aggregate up to approximately 20,000 hectares, are to be jointly developed pursuant to a joint venture agreement between the Proposed Target and a Sarawak Government-linked entity. 

 

In respect of the Proposed Acquisition, the completion of which remains subject to Board approval, the Company has paid a refundable deposit of RRM7.9 million (US$2.5 million) to the Proposed Target until completion of APL's due diligence exercise, expected to be within two to three months, at which point the Board will decide whether to further pursue the opportunity.  In the event that the Board decides to pursue the Proposed Acquisition, APL will seek to secure the required funding via a combination of an equity fundraise and/or a new debt facility. A further announcement will be made in due course. 

 

 

 

-END-


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