Interim Results

RNS Number : 1880N

Asian Plantations Limited

26 September 2012

 



26 September 2012

Asian Plantations Limited

("APL" or the "Company")

Interim Results for the Six Months ended 30 June 2012

The directors of Asian Plantations Limited (LSE: PALM) (the "Board"), a palm oil plantation company with operations in Malaysia, are pleased to announce its unaudited interim results for the six month period ended 30 June 2012.

Highlights

·      Sale of 6,065 tonnes fresh fruit bunches ("FFB"), a 391 per cent. increase compared to the first half 2011, sold at an average price of RM603 (circa. US$196) per tonne.

·      Issuance of nine and ten year maturity bonds totalling RM100 million (circa. US$ 32.5 million) on 10 May 2012 further strengthening the Company's capital structure. 

·      Cash position of US$35.6 million compared with US$28.0 million on 30 June 2011;

·      Closing of the 5,000 ha Dulit acquisition on 28 February 2012;

·      Total Assets position of US$175.2 million compared with US$112.6 million on 31 December 2011;

·      Early conversion of the US$1 million Convertible Bond due 2014 outstanding into equity on 1 June 2012 thereby raising the equity invested in the Company to in excess of US$71 million; and,

·      The Company's mill on-track to be operational by year-end.

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

"We are now into our fifth year of significant investment and land development. Three of our four estates are now revenue producing. Next year, all four of our estates will be generating revenue. We expect to finish calendar year 2012 with approximately 20,000 tonnes of FFB produced rising to approximately 55,000 tonnes produced in 2013. We expect FFB production to rise consistently each year over the next decade as the estates mature.

"Our state-of-the-art vertical sterilizer crushing mill is scheduled to be operational in December of this year. 2012 will be our last year of selling FFB, as in January 2013, we will be delivering Crude Palm Oil (CPO) to the Bintulu refineries. We have also been approached by other independent palm oil estates seeking to sell their FFB output to our mill, which would further enhance our mill's production volumes in 2013 and 2014.

"As at end June 2012, we had 11,049 hectares planted (excluding roads and common areas) compared with year-end 2011 which saw the Company finish the year with 9,322 hectares planted. We currently have sufficient seedlings maturing and contractors on-site, which gives me the confidence that we will finish this year with 14,200 hectares planted.

"I believe that there is an increasing 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 believes that its strategy of assembling properly titled, land parcels in Malaysia, an investment grade rated country, will generate substantial value for the Company's shareholders and I look forward to providing shareholders with further updates regarding our progress during the remainder of the calendar year."

For further information contact:

Asian Plantations Limited Graeme Brown, Co-Founder & Joint Chief Executive Officer Dennis Melka, Co-Founder & Joint Chief Executive Officer	Tel:  [phone]
Strand Hanson Limited James Harris Paul Cocker	Tel: [phone]
Macquarie Capital (Europe) Limited Steve Baldwin Dan Iacopetti	Tel:   [phone]
Panmure Gordon (UK) Limited Tom Nicholson Callum Stewart	Tel:   [phone] Tel: [phone]
Bankside Consultants Simon Rothschild	Tel: [phone]

Unaudited Interim Condensed Consolidated Income Statement

for the six-month period ended 30 June 2012

			Note		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
					USD'000		USD'000
					Unaudited		Unaudited
Revenue			6		1,186		274
Cost of sales					(515)		(167)
Gross profit					671		107
Other operating income			7		279		141
Administrative expenses			8		(2,761)		(1,296)
Other operating expenses			9		(1,009)		(1,334)
Operating loss					(2,820)		(2,382)
Finance costs			10		(1,528)		(802)
Loss before tax					(4,348)		(3,184)
Income tax benefit			11		104		209
Loss for the period					(4,244)		(2,975)
Attributable to :
Owners of the Company					(4,244)		(2,975)
Loss per share attributable to owners of the Company (cents per share)
Basic			12		(9.18)		(7.75)

Diluted			12		(9.18)		(7.75)

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

Unaudited Interim Condensed Consolidated Statement of Comprehensive Income

for the six-month period ended 30 June 2012

						Six Months Ended 30.6.2012			Six Months Ended 30.6.2011
						USD'000			USD'000
						Unaudited			Unaudited
Loss for the period						(4,244)			(2,975)
Other comprehensive income:
Foreign currency translation adjustments						(2)			764
Total comprehensive income for the period						(4,246)			(2,211)
Total comprehensive income attributable to:
Owners of the Company						(4,246)			(2,211)

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

Unaudited Interim Condensed Consolidated Statement of Financial Position as at 30 June 2012

				Note		30.6.2012		31.12.2011
						USD'000		USD'000
						Unaudited		Audited
ASSETS
Non-current assets
Property, plant and equipment				13		28,140		15,600
Biological assets				14		43,525		22,811
Land use rights				15		51,284		32,158
Goodwill on consolidation						7,304		7,335
						130,253		77,904
Current assets
Inventories						626		345
Trade and other receivables						6,077		4,780
Income tax recoverable						15		7
Prepayments						2,617		1,575
Cash and bank balances				16		35,668		28,052
						45,003		34,759
Total assets						175,256		112,663
EQUITY AND LIABILITIES
Equity
Issued capital				17		88,594		87,321
Accumulated losses						(21,011)		(16,769)
Other reserves				18		(10,467)		(11,430)
Equity attributable to owners of the Company						57,116		59,122
Non-controlling interests						(2)		-
Total equity						57,114		59,122
Non-current liabilities
Loans and borrowings				19		93,433		38,942
Convertible bonds				20		1,869		2,681
Deferred tax liabilities						6,199		6,325
						101,501		47,948

Unaudited Interim Condensed Consolidated Statement of Financial Position as at 30 June 2012 (cont'd)

				Note		30.6.2012		31.12.2011
						USD'000		USD'000
						Unaudited		Audited
Current liabilities
Trade and other payables						2,747		1,271
Other current financial liabilities						1,344		1,086
Loans and borrowings Derivative financial instruments				19 20		12,413 137		2,719 517
						16,641		5,593
Total liabilities						118,142		53,541
Total equity and liabilities						175,256		112,663

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

Unaudited Interim Condensed Consolidated Statement of Changes in Equity

for the six-month period ended 30 June 2012

	Attributable to the owners of the Company								Non-controlling interests		Total equity
	Share capital		Other reserves		Accumulated losses		Total
	USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
For the six months ended 30.6.2012
Unaudited
At 1 January 2012	87,321		(11,430)		(16,769)		59,122		-		59,122
Loss for the period	-		-		(4,244)		(4,244)		-		(4,244)
Other comprehensive income
Foreign currency translation adjustments	-		(2)		-		(2)		-		(2)
Total comprehensive income for the period	-		(2)		(4,244)		(4,246)		-		(4,246)
Issuance of ordinary shares pursuant to share-based payment plans	97		(67)		-		30		-		30
Share-based payment transactions (Note 21)	-		1,032		-		1,032		-		1,032
Issuance of ordinary shares pursuant to conversion of convertible bond	1,176		-		-		1,176		-		1,176
Accretion from change in equity held in subsidiary	-		-		2		2		(2)		-
At 30 June 2012	88,594		(10,467)		(21,011)		57,116		(2)		57,114

Unaudited Interim Condensed Consolidated Statement of Changes in Equity

for the six-month period ended 30 June 2012 (cont'd)

	Attributable to the owners of the Company								Non-controlling interests		Total equity
	Share capital		Other reserves		Accumulated losses		Total
	USD'000		USD'000		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		-		18,002
Loss for the period	-		-		(2,975)		(2,975)		-		(2,975)
Other comprehensive income
Foreign currency translation adjustments	-		764		-		764		-		764
Total comprehensive income for the period	-		764		(2,975)		(2,211)		-		(2,211)
Issuance of ordinary shares for cash	25,752		-		-		25,752		-		25,752
Share issuance expenses	(1,007)		-		-		(1,007)		-		(1,007)
At 30 June 2011	66,956		(18,231)		(8,189)		40,536		-		40,536

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

Unaudited Interim Condensed Consolidated Statement of Cash Flows

for the six-month period ended 30 June 2012

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Operating activities
Loss before tax		(4,348)		(3,184)
Non-cash adjustment to reconcile loss before tax to    net cash flows:
Amortisation of land use rights		544		315
Depreciation of property, plant and equipment		82		68
Loss/(gain) on disposal of property, plant and equipment		1		(1)
(Gain)/loss arising from changes in fair value of convertible bonds		(162)		299
Interest income		(106)		(59)
Interest expense		1,528		802
Unrealised gain on foreign exchange		(75)		(51)
Share-based payment transaction expense		949		-
Working capital adjustments:
Increase in inventories		(282)		(114)
Increase in trade and other receivables and prepayments		(2,361)		(793)
Increase in trade and other payables		1,742		268
		(2,488)		(2,450)
Income taxes paid		(8)		-
Income taxes refund, net of paid		-		20
Interest received		106		59
Interest paid		(1,362)		(1,346)
Net cash flows used in operating activities		(3,752)		(3,717)
Investing activities
Proceeds from disposal of property, plant and equipment		20		3
Purchase of property, plant and equipment		(13,012)		(2,074)
Additions to land use rights		(19,784)		-
Additions to biological assets		(20,931)		(2,204)
Net cash flows used in investing activities		(53,707)		(4,275)

Unaudited Interim Condensed Consolidated Statement of Cash Flows 

for the six-month period ended 30 June 2012 (cont'd)

			Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
			USD'000		USD'000
			Unaudited		Unaudited
	Financing activities
	Proceeds from issuance of ordinary shares		30		25,752
	Share issuance expenses		-		(1,007)
	Proceeds from issuance of convertible bonds		-		1,000
	Repayment of term loan		(3)		(3)
	Drawdown of term loans		32,531		3,268
	Drawdown of bank guaranteed medium term notes programme		30,616		-
	Repayment of finance lease liabilities		(162)		(49)
	Net cash flows from financing activities		63,012		28,961
	Net increase in cash and cash equivalents		5,553		20,969
	Net foreign exchange difference		1,311		450
	Cash and cash equivalents at 1 January		27,474		1,019
	Cash and cash equivalents at 30 June (Note 16)		34,338		22,438

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

1.         Corporate information

The interim condensed consolidated financial statements for the six months ended 30 June 2012 were authorised for issue in accordance with a resolution of the directors on 26 September 2012.

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. 

During the financial period, the Group incorporated a new subsidiary in Singapore under the name APL II Pte Ltd.  The principal activity of this subsidiary is dormant.

During the financial period, an indirect subsidiary, Jubilant Paradise Sdn. Bhd. was diluted from 100% to 60% equity interest pursuant to a Shareholders' Agreement with a Malaysian entity to mutually develop oil palm plantation land.

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 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements 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 2011.

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 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.

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 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 (cont'd)

The following amendments to the IFRSs standards did not have any impact on the accounting policies, financial position or performance of the Group:

·      IAS - 12Deferred Tax: Recovery of Underlying Assets (Amendment)

This amendment to IAS 12 includes a rebuttable presumption that the carrying amount of investment property measured using the fair value model in IAS 40 will be recovered through sale and, accordingly, that any related deferred tax should be measured on a sale basis. The presumption is rebutted if the investment property is depreciable and it is held within a business model whose objective is to consume substantially all of the economic benefits in the investment property over time, rather than through sale. Specifically, IAS 12 will require that deferred tax arising from a non-depreciable asset measured using the revaluation model in IAS 16 should always reflect the tax consequences of recovering the carrying amount of the underlying asset through sale. Effective implementation date is for annual periods beginning on or after 1 January 2012.

The Group does not have any investment properties nor assets under IAS 16 valued under the revaluation model, hence there is no impact on the financial statements of the Group.

·      IFRS - 7 Disclosures - Transfer of Financial Assets (Amendment)

The IASB issued an amendment to IFRS 7 that enhances disclosures for financial assets. These disclosures relate to assets transferred (as defined under IAS 39). If the assets transferred are not derecognised entirely in the financial statements, an entity has to disclose information that enables users of financial statements to understand the relationship between those assets which are not derecognised and their associated liabilities. If those assets are derecognised entirely, but the entity retains a continuing involvement, disclosures have to be provided that enable users of financial statements to evaluate the nature of, and risks associated with, the entity's continuing involvement in those derecognised assets. Effective implementation date is for annual periods beginning on or after 1 July 2011 with no comparative requirements.

·      IFRS - 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendment)

When an entity's date of transition to IFRS is on or after the functional currency normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date, at fair value on the date of transition to IFRS. This fair value may be used as the deemed cost of those assets and liabilities in the opening IFRS statement of financial position. However, this exemption may only be applied to assets and liabilities that were subject to severe hyperinflation. Effective implementation date is for annual periods beginning on or after 1 July 2011 with early adoption permitted.

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 period. 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.

3.1        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 Ringgit Malaysia ("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 (nursery)

The biological assets are stated at fair value.  Management made the judgement that cost approximates fair value of the biological asset for nursery because little biological transformation has taken place since its initial cost incurrence. The carrying amount of nursery as at 30 June 2012 is USD1,417,000 (31 December 2011: USD1,053,000). 

3.2        Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the 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 described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

(a)        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 60 years.

(b)        Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from projected net cash flows over a period of 25 productive years of oil palms from financial budgets approved by management and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset's performance of the cash generating unit being tested. Based on management's analysis, goodwill is not impaired as at 30 June 2012.

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

3.2        Estimates and assumptions (cont'd)

(c)        Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective company's domicile. As the Group assesses the probability for litigation and subsequent cash outflow with respect to taxes as remote, no contingent liability has been recognised.

The carrying amount of income tax recoverable at 30 June 2012 was USD7,000 (31 December 2011: USD7,000).

Deferred tax assets are recognised for all unused tax losses, unabsorbed capital and agricultural allowances to the extent that it is probable that taxable profit will be available against which the losses, unabsorbed capital and agricultural allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

(d)        Share-based payment transactions

The Group measures the cost of equity-settled transactions with directors, employees and consultants by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.

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. Accordingly, no segmental information is prepared based on business segment or on geographical distribution as it is not meaningful.

6.         Revenue

Revenue represents sale of fresh fruit bunches.

7.         Other operating income

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Short term deposits interest income		106		60
Sale of seedlings		11		81
Gain arising from changes in fair value of embedded derivative of the convertible bonds		162		-
		279		141

8.         Administrative expenses

Included in administrative expenses are audit, tax, legal and other professional fees amounting to USD608,000 (six months ended 30 June 2011: USD345,000) and share-based payment transaction expense of USD949,000 (six months ended 30 June 2011: Nil) related to the Company's share option scheme (Note 21). 

9.         Other operating expenses

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		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		384		493
Repair and maintenance		73		164
Motor vehicle running expenses		-		1
Amortisation of land use rights		544		315
Cost of seedlings sold		8		62
		1,009		1,334

10.        Finance expenses

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Interest expense on loans and borrowings		1,318		726
Interest expense on convertible bond		44		9
Accretion of interest on the convertible bond		166		67
		1,528		802

11.        Income tax benefit

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

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		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		(156)		(198)
Under provision of deferred tax expense in prior period		52		-
Total income tax benefit		(104)		(209)

12.        Loss per share

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

Diluted loss per share amounts are calculated by dividing loss for the period, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.  There is no dilutive potential ordinary share as at period ended 30 June 2012 and 2011.

12.        Loss per share (cont'd)

The following tables reflect the loss and share data used in the computation of basic loss and diluted per share for the periods ended 30 June:

		Six Months Ended 30.6.2012		Six Months Ended 30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Loss, net of tax, attributable to owners of the Company		(4,244)		(2,975)
-
		No. of shares		No. of shares
		'000		'000
Weighted average number of ordinary shares for basic and diluted loss per share computation*		46,252		38,387
-

*     The weighted average number of ordinary shares takes into account the weighted average effect of changes in ordinary shares transactions during the period.

The potential ordinary shares from unsecured convertible bonds and options granted pursuant to the Company's share option scheme have not been included in the calculation of diluted loss per share because they are anti-dilutive.

13.        Property, plant and equipment

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
At 1 January		15,600		9,576
Additions		13,632		7,338
Disposal		(21)		(14)
Depreciation		(646)		(833)
Exchange differences		(425)		(467)
At 30 June / 31 December		28,140		15,600
Depreciation of property, plant and equipment capitalised to biological assets:		564		693

Assets pledged for banking facilities

A building of the Group with net carrying amount of USD227,000 (31 December 2011: USD229,000) is pledged for banking facilities as disclosed in Note 19.

14.        Biological assets

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
At fair value
At 1 January		22,811		11,022
Additions		21,578		9,011
Gain arising from changes in fair value		-		3,499
Exchange differences		(864)		(721)
At 30 June / 31 December		43,525		22,811
Represented by:
Mature plantation		20,857		1,628
Immature plantation		21,251		20,130
Nursery		1,417		1,053
At 30 June / 31 December		43,525		22,811

There is no gain or loss arising from changes in fair value less estimated costs to sell during the financial period ended 30 June 2012 (31 December 2011: USD3,499,000) as the Group has adopted the practice of determining the fair value of its biological assets on an annual basis. Management is of the view that there are no significant changes to the basis and assumptions used in the previous valuation of the biological assets.

		30.6.2012		31.12.2011
		Hectares		Hectares
Planted area:
Mature plantation		2,983		230
Immature plantation		3,985		4,180
Total		6,968		4,410

15.        Land use rights

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
At 1 January		32,158		33,546
Additions		19,784		196
Amortisation charge		(544)		(624)
Exchange differences		(114)		(960)
At 30 June / 31 December		51,284		32,158

On 28 February 2012, the Group completed the acquisition of 5,000 hectares of semi-developed plantation land for a total consideration of RM102 million (USD34.4 million). 

Land use rights of the Group are pledged for banking facilities as disclosed in Note 19.

16.        Cash and bank balances

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

		30.6.2012		30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Cash on hand and at banks		6,793		18,051
Short-term deposits		28,875		4,387
Total cash and short-term deposits		35,668		22,438
Bank overdraft		(1,330)		-
Cash and cash equivalents		34,338		22,438

17.        Issued capital

		30.6.2012				31.12.2011
		No. of shares				No. of shares
		'000		USD'000		'000		USD'000
		Unaudited		Unaudited		Audited		Audited
At 1 January 2012 / 1 January 2011		46,175		87,321		33,445		42,211
Issuance during the period/year		336		1,273		12,730		46,252
Share issuance expense		-		-		-		(1,142)
At 30 June 2012 / 31 December 2011		46,511		88,594		46,175		87,321
		-		-		-		-

17.        Issued capital (cont'd)

Issuance of shares

On 16 April 2012, the Board approved the allotment of 23,000 shares pursuant to the exercise of share options granted in accordance with the Company's share option scheme and these shares were subsequently listed on AIM on 30 April 2012.

On 28 May 2012, the Board approved the conversion of the convertible bond with face value of USD1,000,000 to 313,383 ordinary shares of the Company and these shares were subsequently listed on AIM on 7 June 2012.

18.        Other reserves

The composition of other components of other reserves is as follows:

	30.6.2012		31.12.2011
	USD'000		USD'000
	Unaudited		Audited
Merger reserve	(20,256)		(20,256)
Foreign currency translation reserve	(708)		(717)
Share-based payment transaction reserve (Note 21)	10,497		9,543
	(10,467)		(11,430)

19.        Loans and borrowings

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
Current
Bank overdraft		1,330		578
Short term revolving credit		1,881		1,889
Term loans		8,840		5
Obligation under finance leases		362		247
		12,413		2,719
Non-current
Bank Guaranteed Medium Term Notes Programme		30,616		-
Term loans		61,538		38,002
Obligation under finance leases		1,279		940
		93,433		38,942
Total loans and borrowings		105,846		41,661

19.        Loans and borrowings (cont'd)

During the period, the Group completed the issuance of bank guaranteed medium term notes programme ("MTN Programme") of up to RM255 million (USD85 million) in nominal value and bank guarantee facility of RM255 million from Malayan Banking Berhad to BJ Corporation Sdn. Bhd., a wholly-owned subsidiary, to guarantee the full principal redemption of the MTN Programme of up to RM255 million and one semi-annual coupon payment.  The proceeds from this programme will be utilised towards the construction of the Group's first vertical steriliser oil palm mill, refinancing of the Group's certain loans and borrowings that are due for repayment, and to also finance the plantation development expenditure including working capital requirements for a subsidiary, BJ Corporation Sdn. Bhd.

As at 30 June 2012, the Group has drawn down the first tranche of the MTN Programme amounting to RM100 million (USD33 million).  The second tranche totaling RM155 million (USD52 million) is expected to be drawn down early 2013.

Of the first tranche of the MTN Programme, RM35 million (USD12 million) bears a coupon rate of 4.35% per annum, while the balance of RM65 million (USD22 million) bears a coupon rate of 4.45% per annum. Tenure of the MTN Programme is up to 10 years from the date of the first issuance and repayment is to commence 5 years from the date of first issue.   

The Group has also drawn down term loan of RM71.4 million (USD24 million) for the acquisition of a semi-developed plantation land as disclosed in Note 15.  This term loan bears interest rate at Base Lending Rate plus 1.00% per annum and is repayable 3 years from the date of first drawdown.

Loans and borrowings of the Group are secured either by a charge over the leased assets or leasehold land of the Group in which it has prepaid the rights to use the land as disclosed in Note 15.

20.        Convertible bonds

				30.6.2012		31.12.2011
		Maturity		USD'000		USD'000
				Unaudited		Audited
USD1.0 million		18 November 2014		-		926
USD2.1 million		8 August 2015		1,869		1,755
				1,869		2,681

On 28 May 2012, the unsecured convertible bond of USD1 million was converted to 313,383 ordinary shares of the Company.

20.        Convertible bonds (cont'd)

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

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
Liability component at 1 January		2,681		-
Add: At Initial recognition		-		2,467
Less: Conversion of convertible bond		(960)		-
Add: Accretion of interests on the convertible bonds		148		214
At 30 June / 31 December		1,869		2,681

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 USD137,000 as at 30 June 2012 (31 December 2011: USD517,000).

21.        Share-based payment plans

There has been no cancellation or modification to the Scheme during the period ended 30 June 2012.

Expense recognised for this equity-settled share-based payment transaction during the financial period amount to USD1,032,000 (30 June 2011: Nil), of which USD83,000 has been capitalised to biological assets.

Movements during the period/year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the period/year:

		30.06.2012		30.06.2012		31.12.2011		31.12.2011
		Number		WAEP		Number		WAEP
				USD				USD
Outstanding at 1 January		3,747,000		1.83		-		-
Granted during the period/year		220,000		2.41		3,747,000		1.83
Exercised during the period/year		(23,000)		1.23		-		-
Outstanding at 30 June /    31 December		3,944,000		1.84		3,747,000		1.83
Exercisable at 30 June /    31 December		1,538,500		2.65		761,500		1.19

21.        Share-based payment plans (cont'd)

The fair value of options granted during the six months ended 30 June 2012 was estimated on the date of grant using the following assumptions:

Dividend yield (%)		0
Expected volatility (%)		36.98
Risk-free rate		*
Expected life of share options (years)		10
Share price (pence)		247

*  Based on GBP Libor rates and Swap rates at valuation date.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

22.        Fair value of financial instruments

Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1:   quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2:   other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3:   techniques that use inputs that have a significant effect on the recorded fair value

that are not based on observable market data

As at 30 June, the Group held the following financial instruments carried at fair value in the statements of financial position:

(a)        Fair value of financial instruments that are carried at fair value

The Group does not have any financial instruments carried at fair value other than the derivative component of the unquoted convertible bonds.  Fair value of the derivative component is valued using a binomial model based on observable market data (level 2).

(b)        Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Trade and other receivables, Cash and bank balances, Trade and other payables, Other liabilities and Loans and borrowings (excluding obligations under finance leases).

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

22.        Fair value of financial instruments (cont'd)

(c)        Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

	Carrying Amount				Fair Value
	30.6.2012		31.12.2011		30.6.2012		31.12.2011
	USD'000		USD'000		USD'000		USD'000
Financial liabilities:
- Obligations under finance leases	1,641		1,187		1,560		1,194
- Convertible bonds	1,869		2,681		*		*

*      It is not practicable and cost outweighs benefits to determine the fair value of the unquoted convertible bonds.

23.        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:

		30.6.2012		31.12.2011
		USD'000		USD'000
		Unaudited		Audited
Approved and contracted for:
-    property, plant and equipment		24,176		3,526
Approved and not contracted for:
-    property, plant and equipment		11,467		40,910
-    biological assets		5,750		7,975
		41,393		52,411

(b)         Contingencies

The Group does not have contingent liabilities as at 30 June 2012 and 31 December 2011.

(c)         Operating lease commitments

As lessee

In addition to the land use rights disclosed in Note 15, the Group has no other operating leases.

23.        Commitments and contingencies (cont'd)

(d)         Finance leases

As lessee

The Group has finance leases for certain property, plant and equipment. These leases have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that holds the lease.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

	30.6.2012					31.12.2011
	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
Not later than one year	456		362				318		248
Later than one year but not more than five years	1,268		1,145				952		844
More than five years	150		134				99		95
Total minimum lease payments	1,874		1,641				1,369		1,187
Less: Amount representing finance charges	(233)		-				(182)		-
Present value of minimum lease payments	1,641		1,641				1,187		1,187

24.        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 2012 and 30 June 2011 at the terms agreed between the parties, which are conducted at arm's length.

		Six Months Ended		Six Months Ended
		30.6.2012		30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Transactions with related parties
- Rental charged		14		19
- Construction of estate housing		-		186
- Administrative costs charged		79		68
		93		273

Related parties represent companies in which certain directors of the Group have financial interest and are also directors of these companies.

Compensation of key management personnel

		Six Months Ended		Six Months Ended
		30.6.2012		30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Directors' salaries		238		254
Directors' fees		93		97
Short term employee benefits		181		76
Contribution to defined contribution plans		30		9
Share-based payment transactions (Note 21)		982		-
		1,524		436

24.        Related party disclosures (cont'd)

Compensation of key management personnel (cont'd)

		Six Months Ended		Six Months Ended
		30.6.2012		30.6.2011
		USD'000		USD'000
		Unaudited		Unaudited
Compensation comprise
Amounts paid to:
- Directors of the Company		328		348
- Directors of a subsidiary company		3		3
- Other key management personnel		211		85
		542		436
Share-based payment transactions expense:
- Directors of the Company		947		-
- Other key management personnel		35		-
		982		-
		1,524		436

The amounts disclosed above are the amounts recognised as an expense during the reporting period related to key management personnel.

Share option scheme

Directors' and other key management personnel interest in the Company's share option scheme ("the Scheme") (Note 21):

Share options held by directors and other key management personnel under the Scheme have the following expiry dates and exercise price:

		Expiry date		Exercise price		Number outstanding
Directors						30.6.2012		31.12.2011
Issue date:
-  2011		2021		USD1.22		2,850,000		2,850,000
-  2011		2016		USD3.98		800,000		800,000
Other key management personnel
Issue date:
-  2011		2021		USD1.22		32,000		32,000
-  2012		2022		USD3.84		100,000		-

 

END

 

 

IR UNAKRUNAKURR