Interim Results

RNS Number : 2450P

Asian Plantations Limited

30 September 2013

 



30 September 2013

Asian Plantations Ltd

("APL" or the "Company")

Interim Results for the Six Months ended 30 June 2013

Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce its unaudited results for the six month period ended 30 June 2013.

Highlights

§ US$963,000 of revenue reported (2012: US$1,186,000), a decrease of 18%, based on production and sale of 7,460 tonnes of fresh fruit bunches ("FFB"), 2012: 6,065 tonnes of FFB. Despite rising volumes, the decrease in revenue is attributable to: (i) lower international crude palm oil ("CPO") pricing; (ii) unfavourable exchange rate movements; and (iii) a delay in issuance of regulatory approvals to process third party FFB. The necessary local approvals were subsequently received in June 2013 and the Company's processing of third party FFB has grown strongly from 7,919 tonnes in July 2013 to 16,271 tonnes PCM in August 2013and has exceeded 23,000 tonnes for the month of September 2013.

§ Total assets have increased to US$198.9 m.

§ The Company expects to sell in excess of 26,000 tonnes of CPO and approximately 5,000 tonnes of palm kernel ("PK") in the second half of 2013.

Post-Balance Sheet Events

§ Issuance of final two tranches of the convertible bond totaling US$10,000,000 to OCBC Bank on 14 and 23 August 2013. Terms remain unchanged from those previously announced and the total US$15,000,000 convertible bond has an effective conversion price of 285 pence per share based on current exchange rates.

§ Completion of the Company's final land acquisition of 3,852 hectares, Grand Performance Sdn Bhd, on 21 August 2013.

-END-

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  James Spinney	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 2013

			Note		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
					USD'000		USD'000
					Unaudited		Unaudited
Revenue			6		963		1,186
Cost of sales			7		(3,444)		(515)
Gross (loss)/profit					(2,481)		671
Other operating income			8		674		279
Administrative expenses			9		(1,774)		(2,761)
Other operating expenses			10		(709)		(1,009)
Operating loss					(4,290)		(2,820)
Finance costs			11		(3,622)		(1,528)
Loss before tax					(7,912)		(4,348)
Income tax benefit			12		991		104
Loss for the period					(6,921)		(4,244)
Attributable to :
Owners of the Company					(6,920)		(4,244)
Non-controlling interests					(1)		-*
					(6,921)		(4,244)
Loss per share attributable to owners of the Company (cents per share)
Basic			13		(14.86)		(9.18)

Diluted			13		(14.86)		(9.18)

* Amount less than USD1,000

Unaudited Interim Condensed Consolidated Statement of Comprehensive Income

for the six-month period ended 30 June 2013

						Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
						USD'000		USD'000
						Unaudited		Unaudited
Loss for the period						(6,921)		(4,244)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments						(2,066)		(2)
Total comprehensive income for the period, net of tax						(8,987)		(4,246)
Attributable to:
Owners of the Company						(8,986)		(4,246)
Non-controlling interests						(1)		-*
						(8,987)		(4,246)

* Amount less than USD1,000

Unaudited Interim Condensed Consolidated Statement of Financial Position as at 30 June 2013

				Note		30.6.2013		31.12.2012
						USD'000		USD'000
						Unaudited		Audited
ASSETS
Non-current assets
Deferred tax assets						549		178
Property, plant and equipment				14		61,903		53,227
Biological assets				15		59,794		55,287
Land use rights				16		50,988		53,517
Goodwill on consolidation						7,330		7,619
						180,564		169,828
Current assets
Inventories				17		2,491		1,724
Trade and other receivables						6,839		6,714
Income tax recoverable						116		99
Prepayments						1,894		2,308
Cash and bank balances						6,997		15,785
						18,337		26,630
Total assets						198,901		196,458
EQUITY AND LIABILITIES
Equity
Issued capital				18		89,731		88,594
Accumulated losses						(30,565)		(23,645)
Other reserves				19		(10,709)		(7,916)
Equity attributable to owners of the Company						48,457		57,033
Non-controlling interests						(4)		(3)
Total equity						48,453		57,030
Non-current liabilities
Loans and borrowings				20		125,201		102,709
Convertible bonds				21		6,577		1,995
Deferred tax liabilities						5,689		6,556
						137,467		111,260
Current liabilities
Trade and other payables						8,412		6,810
Other current financial liabilities						1,096		2,464
Income tax payable						31		-
Loans and borrowings Derivative financial instruments				20 21		3,331 111		18,764 130
						12,981		28,168
Total liabilities						150,448		139,428
Total equity and liabilities						198,901		196,458

Unaudited Interim Condensed Consolidated Statement of Changes in Equity

for the six-month period ended 30 June 2013

	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 30.6.2013
Unaudited
At 1 January 2013	88,594		(7,916)		(23,645)		57,033		(3)		57,030
Loss for the period	-		-		(6,920)		(6,920)		(1)		(6,921)
Other comprehensive income
Foreign currency translation adjustments	-		(2,066)		-		(2,066)		-		(2,066)
Total comprehensive income for the period	-		(2,066)		(6,920)		(8,986)		(1)		(8,987)
Issuance of ordinary shares pursuant to share-based payment plans	1,137		-		-		1,137		-		1,137
Share-based payment transactions (Note 23)	-		(727)		-		(727)		-		(727)
At 30 June 2013	89,731		(10,709)		(30,565)		48,457		(4)		48,453

	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 23)	-		1,032		-		1,032		-		1,032
Issuance of ordinary shares pursuant to conversion of convertible bond	1,176		-		-		1,176		-		1,176
Dilution of interest in a 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 Cash Flows

for the six-month period ended 30 June 2013

			Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
			USD'000		USD'000
			Unaudited		Unaudited
Operating activities
Loss before tax			(7,912)		(4,348)
Non-cash adjustment to reconcile loss before tax to    net cash flows:
Amortisation of land use rights			513		544
Depreciation of property, plant and equipment			539		82
(Gain)/loss on disposal of property, plant and equipment			(6)		1
Gain arising from changes in fair value of convertible bonds			(420)		(162)
Interest income			(232)		(106)
Interest expense			3,622		1,528
Unrealised loss/(gain) on foreign exchange			168		(75)
Share-based payment transaction expense			30		951
Working capital adjustments:
Increase in inventories			(832)		(282)
Increase in trade and other receivables and prepayments			(48)		(2,361)
Increase in trade and other payables			585		1,742
			(3,993)		(2,486)
Income taxes paid, net of refund			(20)		(8)
Interest received			232		106
Interest paid			(3,066)		(1,356)
Net cash flows used in operating activities			(6,847)		(3,744)
Investing activities
Proceeds from disposal of property, plant and equipment			6		20
Purchase of property, plant and equipment			(11,884)		(13,012)
Additions to land use rights			-		(19,784)
Additions to biological assets			(5,869)		(20,933)
Net cash flows used in investing activities			(17,747)		(53,709)
	Financing activities
	Proceeds from issuance of ordinary shares		311		30
	Proceeds from issuance of convertible bond		4,897		-
	Issuance expense on liability component of convertible bond		(522)		-
	Repayment of short term revolving credit		(1,888)		-
	Repayment of term loan		(39,705)		(3)
	Proceeds from term loans		3,557		32,727
	Proceeds from Bank Guaranteed Medium Term Notes Programme		48,192		30,414
	Repayment of finance lease liabilities		(257)		(162)
	Short-deposits pledged for a banking facility and supply of goods		79		(784)
	Net cash flows from financing activities		14,664		62,222
	Net (decrease)/increase in cash and cash equivalents		(9,930)		4,769
	Net foreign exchange difference		8		1,311
	Cash and cash equivalents at 1 January		14,188		27,474
	Cash and cash equivalents at 30 June (Note 22)		4,266		33,554

Notes to the Unaudited Interim Condensed Consolidated Financial Statements - 30 June 2013

1.         Corporate information

The interim condensed consolidated financial statements for the six months ended 30 June 2013 were authorised for issue in accordance with a resolution of the directors on 30 September 2013.

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 and operating of an oil palm mill. 

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 2013 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 2012.

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 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

The nature and the impact of the new standard/amendment is described below:

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Group's financial position or performance.

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 periods.

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:

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 2013 was USD1,729,000 (31 December 2012: USD1,742,000). 

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 discussed 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 goodwill

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 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 2013.

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.

The carrying amount of income tax recoverable and income tax payable at 30 June 2013 was USD116,000 (31 December 2012: USD99,000) and USD31,000 (31 December 2012: Nil), respectively.

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.

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.         Segment information

The following tables present revenue and profit information about the Group's operating segments for the six months ended 30 June 2013 and 2012, respectively:

Six months ended 30 June 2013		Plantation activities		Oil palm milling activities		Investment holding		Total segments		Adjustments and eliminations		Consolidated
Unaudited		USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
Revenue
External customers		824		139		-		963		-		963
Inter-segment		419		-		-		419		(419)		-
Total revenue		1,243		139		-		1,382		(419)		963
Results
Segment loss		(5,230)		(421)		(1,222)		(6,873)		-		(6,873)

Inter-segment revenues of USD419,000 are eliminated on consolidation

Six months ended 30 June 2012		Plantation activities		Oil palm milling activities		Investment holding		Total segments		Adjustments and eliminations		Consolidated
Unaudited		USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
Revenue
External customers		1,186		-		-		1,186		-		1,186
Inter-segment		-		-		-		-		-		-
Total revenue		1,186		-		-		1,186		-		1,186
Results
Segment loss		(1,196)		(199)		(1,533)		(2,928)		-		(2,928)

            There is no inter-segment revenue to be eliminated.

The following table presents segment assets and liabilities of the Group's operating segments as at 30 June 2013 and 31 December 2012:

		Plantation activities		Oil palm milling activities		Investment holding		Total segments		Adjustments and eliminations		Consolidated
		USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
Segment assets
30 June 2103 (Unaudited)		153,098		31,162		74,491		258,751		(67,845)		190,906
31 December 2012 (Audited)		148,734		30,987		75,988		255,709		(67,147)		188,562
Segment liabilities
30 June 2013 (Unaudited)		127,476		30,061		550		158,087		(67,845)		90,242
31 December 2012 (Audited)		117,777		29,594		1,020		148,391		(67,147)		81,244

            Adjustments and eliminations

Interest income, certain finance costs and gain arising from changes in fair value of embedded derivative of the convertible bonds are not allocated to individual segments as the underlying instruments are managed on a group basis.

Current taxes, deferred taxes, share-based payment transaction expense, goodwill on consolidation and certain liabilities are not allocated to those segments as they are also managed on a group basis.

Capital expenditure consists of additions to property, plant and equipment, biological assets and land use rights.

Inter-segment revenues are eliminated on consolidation.

	Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
	USD'000		USD'000
	Unaudited		Unaudited
Reconciliation of loss before tax
Segment loss	(6,873)		(2,928)
Interest income	232		102
Interest expense	(1,689)		(734)
Share-based payment transaction	(2)		(949)
Gain arising from changes in fair value of embedded derivative of the convertible bonds	420		161
Group loss	(7,912)		(4,348)
	30.6.2013		31.12.2012
Reconciliation of assets	USD'000		USD'000
Segment assets	190,906		188,562
Deferred tax assets	549		178
Goodwill arising on consolidation	7,330		7,619
Income tax recoverable	116		99
Total assets	198,901		196,458

	30.6.2013		31.12.2012
	USD'000		USD'000
Reconciliation of liabilities	Unaudited		Audited
Segment liabilities	90,242		81,244
Deferred tax liabilities	5,689		6,556
Loans and borrowings	47,798		49,503
Income tax payable	31		-
Derivative financial instruments	111		130
Convertible bonds	6,577		1,995
Total liabilities	150,448		139,428

6.         Revenue

            Revenue comprise sale of fresh fruit bunches and crude palm oil.

7.         Cost of sales

		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Cost of sales for oil palm:
Estates		3,365		515
Mill		79		-
		3,444		515

Included in cost of sales is share-based payment transaction expense of USD27,000 (six months ended 30 June 2012: USD2,000) related to the Company's share option scheme.

8.         Other operating income

		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Short term deposits interest income		232		106
Sale of seedlings		-		11
Gain arising from changes in fair value of embedded derivative of the convertible bonds		420		162
Gain on disposal of property, plant and equipment		6		-
Other income		16		-
		674		279

9.         Administrative expenses

Included in administrative expenses are audit, tax, legal and other professional fees amounting to USD542,000 (six months ended 30 June 2012: USD608,000) and share-based payment transaction expense of USD3,000 (six months ended 30 June 2012: USD949,000) related to the Company's share option scheme. 

10.       Other operating expenses

		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Net foreign exchange loss		113		384
Repair and maintenance		75		73
Amortisation of land use rights		513		544
Cost of seedlings sold		8		8
		709		1,009

11.       Finance costs

		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Interest expense on loans and borrowings		3,016		1,318
Interest expense on convertible bonds		88		44
Accretion of interest on convertible bonds		518		166
		3,622		1,528

12.       Income tax benefit

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

		Six Months Ended 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Current income tax expense		32		-
Deferred income tax expense related to origination and reversal of deferred taxes		(1,095)		(156)
Under provision of deferred tax expense in prior period		72		52
Total income tax benefit		(991)		(104)

13.       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 are no dilutive potential ordinary shares as at period ended 30 June 2013 and 2012.

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 30.6.2013		Six Months Ended 30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Loss, net of tax, attributable to owners of the Company		(6,920)		(4,244)
-
		No. of shares		No. of shares
		'000		'000
Weighted average number of ordinary shares for basic and diluted loss per share computation*		46,564		46,252
-

*     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.

14.       Property, plant and equipment

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
At 1 January		53,227		15,600
Additions		12,327		38,316
Disposal		-		(21)
Depreciation		(1,365)		(1,594)
Exchange differences		(2,286)		926
At 30 June / 31 December		61,903		53,227

See Note 25(a) for capital commitments.

Capitalised borrowing costs

The amount of borrowing costs capitalised during the period ended 30 June 2013 was USD1,133,000 (31 December 2012: USD1,208,000).

Depreciation capitalised to biological assets

Depreciation of property, plant and equipment of the Group capitalised to biological assets for the financial period ended 30 June 2013 amounted to USD826,000 (31 December 2012: USD1,343,000).

Assets under construction

Included in property, plant and equipment are assets under construction amounted to USD18,095 (31 December 2012: USD25,328). The construction of the oil palm mill which represented the main asset under construction as at 31 December 2012 was completed in early 2013 and has since commenced milling operations.

15.       Biological assets

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
At fair value
At 1 January		55,287		22,811
Additions		6,781		29,405
Gain arising from changes in fair value		-		1,989
Exchange differences		(2,274)		1,082
At 30 June / 31 December		59,794		55,287
Represented by:
Mature plantation		26,401		27,442
Immature plantation		31,664		26,103
Nursery		1,729		1,742
At 30 June / 31 December		59,794		55,287

There is no gain or loss arising from changes in fair value less estimated costs to sell during the financial period ended 30 June 2013 (31 December 2012: USD1,989,000) as the Group has adopted the practice of determining the fair value of its biological assets on an annual basis.

		30.6.2013		31.12.2012
		Hectares		Hectares
Planted area:
Mature plantation		4,448		3,559
Immature plantation		5,984		4,591
Total		10,432		8,150

16.       Land use rights

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
At 1 January		53,517		32,158
Additions		-		21,044
Amortisation charge		(513)		(924)
Exchange differences		(2,016)		1,239
At 30 June / 31 December		50,988		53,517

Land use rights of the Group are pledged for banking facilities as disclosed in Note 20.

17.       Inventories

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
Crude palm oil		661		-
Palm kernel		165		-
Consumables		1,665		1,724
		2,491		1,724

18.       Issued capital

		30.6.2013				31.12.2012
		No. of shares				No. of shares
		'000		USD'000		'000		USD'000
		Unaudited		Unaudited		Audited		Audited
At 1 January 2013 / 1 January 2012		46,511		88,594		46,175		87,321
Issuance during the period/year		250		1,137		336		1,273
At 30 June 2013 / 31 December 2012		46,761		89,731		46,511		88,594
		-		-		-		-

Issuance of shares

On 17 May 2013, a director exercised 250,000 Initial Options that were granted in accordance with the Company's share option scheme and these shares were subsequently listed on AIM on 22 May 2013.

19.       Other reserves

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

	30.6.2013		31.12.2012
	USD'000		USD'000
	Unaudited		Audited
Merger reserve	(20,256)		(20,256)
Foreign currency translation reserve	(330)		1,736
Share-based payment transaction reserve	9,877		10,604
	(10,709)		(7,916)

20.       Loans and borrowings

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
Current
Bank overdraft		1,864		613
Short term revolving credit		-		1,962
Term loans		871		15,687
Obligation under finance leases		596		502
		3,331		18,764
Non-current
Bank Guaranteed Medium Term Notes Programme		78,998		31,954
Term loans		44,603		69,134
Obligation under finance leases		1,600		1,621
		125,201		102,709
Total loans and borrowings		128,532		121,473

As at 30 June 2013, the Group has drawn down the second (or final) tranche of the MTN Programme amounting to RM155 million (approximately USD52 million). Of the total proceeds received, RM132.2 million (approximately USD44 million) was used in refinancing of certain loans and borrowings, and the balance for working capital requirements.    

The second tranche of the MTN Programme bear coupon rates ranging from 3.9% per annum to 4.3% per annum. Tenure of this tranche is up to 8 years from the date of the first issuance and repayment is to commence 4 years from date of first issue.

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 16.

21.       Convertible bonds - Unsecured

				30.6.2012		31.12.2012
Face value		Maturity		USD'000		USD'000
				Unaudited		Audited
USD2.1 million		8 August 2015		2,127		1,995
USD5.0 million		14 January 2016		4,450		-
				6,577		1,995

On 14 January 2013, the first tranche of the USD15 million convertible unsecured bonds, amounting to USD5 million, was issued to OCBC Capital Investment I Pte. Ltd. The remaining two tranches with balance of USD5 million each was issued on 14 August 2013 and 23 August 2013.  

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 USD111,000 as at 30 June 2013 (31 December 2012: USD130,000).

22.       Cash and bank balances

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

		30.6.2013		30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Cash and short-term deposits		6,997		35,668
Less: Short-term deposits for the supply of goods		(64)		-
Less: Short-term deposits pledged for a banking facility		(803)		(784)
		6,130		34,884
Bank overdraft (Note 20)		(1,864)		(1,330)
Cash and cash equivalents		4,266		33,554

23.       Share-based payment plans

There has been no cancellation or modification to the Scheme during the period ended 30 June 2013.

Expense recognised for this equity-settled share-based payment transaction during the financial period amount to USD101,000 (30 June 2012: USD1,032,000), of which USD71,000 (30 June 2012: USD83,000 ) has been capitalised to biological assets.

            On 17 May 2013, a director exercised 250,000 Initial Options and the weighted average share price at the date of exercise of this option was USD3.65.

            There was no new share options granted during the financial period.

24.       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 data and non-observable data. The non-observable inputs to the model include assumptions regarding the future financial performance of the investee, its risk profile, and economic assumptions regarding the industry and geographical jurisdiction in which the investee operates.

(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 and MTN Programme)

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.

 (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
	30.6.2013		31.12.2012		30.6.2013		31.12.2012
	USD'000		USD'000		USD'000		USD'000
	Unaudited		Audited		Unaudited		Audited
Financial liabilities:
- Obligations under finance leases	2,196		2,123		2,080		2,129
- Convertible bonds	6,577		1,995		*		*
- Bank Guaranteed Medium Term Notes Programme	78,998		31,954		79,950		31,938

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

25.       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:

		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
Approved and contracted for:
-    property, plant and equipment		9,726		10,434
Approved and not contracted for:
-    property, plant and equipment		11,668		19,970
-    biological assets		6,873		10,162
		28,267		40,566

(b)        Contingencies

The Group does not have contingent liabilities as at 30 June 2013 and 31 December 2012.

(c)        Operating lease commitments

As lessee

In addition to the land use rights disclosed in Note 16, the Group has no other operating leases.

(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:

	30.6.2013					31.12.2012
	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	690		596				622		502
Later than one year but not more than five years	1,775		1,600				1,782		1,621
Total minimum lease payments	2,465		2,196				2,404		2,123
Less: Amount representing finance charges	(269)		-				(281)		-
Present value of minimum lease payments	2,196		2,196				2,123		2,123

26.       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 2013 and 30 June 2012 at the terms agreed between the parties, which are conducted at mutually agreed terms between the parties.

		Six Months Ended		Six Months Ended
		30.6.2013		30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Transactions with related parties
- Rental expenses		29		14
- Administrative costs charged		88		79
		117		93
		30.6.2013		31.12.2012
		USD'000		USD'000
		Unaudited		Audited
Amount due from related parties		1		2
Amount due to related parties		150		42

Amount due from/(to) related parties are non-trade related, unsecured, non-interest bearing and are repayable in cash on demand.

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
		30.6.2013		30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Directors' salaries		241		238
Directors' fees		95		93
Short term employee benefits		174		181
Contribution to defined contribution plans		22		30
Share-based payment transactions (Note 23)		38		982
		570		1,524

Compensation of key management personnel (cont'd)

		Six Months Ended		Six Months Ended
		30.6.2013		30.6.2012
		USD'000		USD'000
		Unaudited		Unaudited
Compensation comprise
Amounts paid to:
- Directors of the Company		333		328
- Directors of a subsidiary company		3		3
- Other key management personnel		196		211
		532		542
Share-based payment transactions expense:
- Directors of the Company		-		947
- Other key management personnel		38		35
		38		982
		570		1,524

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

27.       Events after the reporting period

On 21 August 2013, the Group completed the acquisition of 100% equity interest in Grand Performance Sdn. Bhd. at the purchase price of RM24.7 million (approximately USD7.5 million). This new subsidiary owns 3,852 hectares of land suitable for oil palm development. 

 

END

 

 

IR URORROUAKOAR