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Conditional Sale and Purchase Agreement document sample
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Condensed Consolidated Balance Sheet
At 31 March 2003
Note 31 March 2003 31 December 2002
RM'000 RM'000
Property, Plant & Equipment 225,609 220,578
Investment in Associate 4,549 4,549
Intangible Assets 2 - -
230,158 225,127
Current Assets
Inventories 7,327 5,709
Trade and other receivables 2,501 4,828
Cash & Cash Equivalents 35,737 32,645
45,565 43,182
Current Liabilities
Trade & other payables 18,424 22,380
Borrowings 10,300 11,600
Taxation 2,787 1,645
31,511 35,625
Net Current Assets 14,054 7,557
244,212 232,684
Financed by:
Capital And Reserve
Share Capital 94,968 94,968
Reserves 78,536 73,751
173,504 168,719
Minority Shareholders' Interests 2,708 2,765
Long Term And Deferred Liabilities
Borrowings 57,700 50,900
Deferred taxation 10,300 10,300
Other deferred liabilities - -
68,000 61,200
244,212 232,684
The notes set out on pages 5 to 6 form an integral part of, and, should be read in conjuction with, this interim
financial report.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M) 1
Condensed Consolidated Income Statements
For the year ended 31 March 2003
3 months ended 3 months ended
31 March 31 March
2003 2002 2003 2002
RM'000 RM'000 RM'000 RM'000
Revenue 17,649 13,424 17,649 13,424
Operating Profit 6,750 4,174 6,750 4,174
Interest expense (361) - (361) -
Other Income 304 195 304 195
Share of Profit (Loss) of an associate - (794) - (794)
Profit before taxation 6,693 3,575 6,693 3,575
Tax expense (1,965) (1,200) (1,965) (1,200)
Profit after taxation 4,728 2,375 4,728 2,375
Less: Minority Interests (57) (25) (57) (25)
Net Profit for the period 4,785 2,400 4,785 2,400
Basic earnings per ordinary share (Sen) 5.04 2.53 5.04 2.53
Diluted earnings per ordinary share (sen) 5.04 2.53 5.04 2.53
The notes set out on pages 5 to 6 form an integral part of, and, should be read in conjuction with, this interim
financial report.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M) 2
Condensed Consolidated Cash Flow Statement
For the three months ended 31 March 2003
31 March 2003 31March 2002
RM'000 RM'000
Net cash inflow from operating activities 4,780 5,410
Net cash outflow from investing activities (6,418) (8,985)
Net cash inflow/(outflow) from financing activities 4,730 2,600
Net increase/(decrease) in cash and cash 3,092 (975)
equivalents
Cash and cash equivalents at 1 January 32,645 19,758
Cash and cash equivalents at 31 December 35,737 18,783
The notes set out on pages 5 to 6 form an integral part of, and, should be read in conjuction with, this interim
financial report.
Sarawak OIl Palms Berhad Interim Report Q1 2003
(7949-M) 4
Condensed Consolidated Statement of Changes in Equity
For the three months ended 31 March 2003
(Non- Distributable
distributable) Retained Profits Total
RM'000 RM'000 RM'000
At 1 January 2003 99,422 69,297 168,719
Net profit for the three months period - 4,785 4,785
Dividends - - -
At 31 March 2003 99,422 74,082 173,504
At 1 January 2002 99,422 60,010 159,432
Net profit for the three months period - 2,400 2,400
Dividends - - -
At 31 March 2002 99,422 62,410 161,832
The notes set out on pages 5 to 6 form an integral part of, and, should be read in conjuction with, this interim
financial report.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M) 3
Notes to the Report
1 Basis of Preparation
The interim financial report is unaudited and has been prepared in compliance with MASB 26,
Interim Financial Reporting. For the associated company, Keresa Plantations Sdn Bhd, the
financial statements were consolidated based on the latest available financial results which was up
to 31 December 2002.
The Interim financial report should be read in conjunction with the audited financial statements of
the Group for the year ended 31 December 2002.
The accounting policies and methods of computation adopted by the Group in this interim financial
report are consistent with those adopted in the financial statements for the year ended 31
December 2002 except for the following:-
(a) adoption of MASB 19, Events After Balance Sheet whereby the comparative figures have
restated to reflect the impact of the non-recognition of dividends proposed after the balance sheet
date. The effects of the change is disclosed in the condensed consolidated statement of changes
in equity.
(b) MASB 20, Provisions, Contingent Liabilities and Contingent Assets and MASB 21, Business
Combination which are applied retrospectively. Comparative figures are not affected by the
adoption of these standards; and
(c) MASB 23, Impairment of Assets, and MASB 24, Financial Instruments: Disclosure and
Presentation, which have been adopted prospectively.
The following notes explain the events and transactions that are significant to an understanding of
the changes in the financial position and performance of the Group since the financial year ended
31 December 2002.
2 Property, plant and equipment
Included in the Property, Plant and Equipment ("PPE") is an amount of RM1.5 million representing
the fair value adjustment of those land owned by a subsidiary reclassified from intangible asset to
PPE accordingly.
3 Disclosure of audit report qualification and status of matters raised
The audit report of the preceding annual financial statements for the year ended 31 December
2002 was unqualified.
4 Seasonality or Cyclical Factors
As the cropping pattern declines to a trough in the first half of the year and rises to a peak in the
second half, the performance of the Group’s plantations and mill will be reflected accordingly.
5 Unusual items affecting assets, liabilities, equity, net income, or cash flow
There were no items for which by nature or amount affecting assets, liabilities, equity, net income,
or cash flows that were unusual because of their nature, size, or incidence during the quarter under
review.
6 Material changes in estimates
There were no changes in estimates of amounts reported in prior financial years that have a
material effect in the quarter under review.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M)
Notes to the Report
7 Issuances, Cancellations, Repurchases, Resale and Repayments of Debt and Equity
Securities
There were no issuances, cancellations, repurchases, resale or repayment of debt and equity
securities for the current financial year-to-date.
8 Dividends paid
There were no dividends paid in the quarter under review.
9 Segment Information
No segment analysis is prepared as the Company is primarily engaged in the oil palm industry in
Malaysia.
10 Property, Plant and Equipment
The valuations of land and buildings have been brought forward, without amendment from the
previous annual report.
11 Material events subsequent to the end of the interim period
There were no material events subsequent to the end of the interim period that have not been
reflected in the financial statements for the interim period.
12 Changes in the composition of the Group
There were no changes in the composition of the Group arising from business combinations,
acquisition or disposal of subsidiary companies and long-term investments, restructurings, and
discontinued operations for the current interim period.
13 Capital Commitments
31 March 2003
RM’000
Property, Plant and Equipment
Authorised but not contracted for 12,309
Contracted but not provided for in the financial statements 1,744
14,053
Plantation Development Expenditure
Authorised but not contracted for 27,987
Contracted but not provided for in the financial statements 959
28,946
14 Contingent Liabilities - Unsecured
Company
RM'000
Corporate guarantees favouring banks for loan 68,000
granted to subsidiaries
Loans yet to be drawn down by subsidiaires (27,100)
40,900
Sarawak Oil Palms Berhad Interim Report Q1 2003
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Notes to the Report
15 Related Party Transaction
Significant related party transactions other than those disclosed elsewhere in the financial
statements are as follows:-
Transactions with companies in which Datuk Ling Chiong Ho, a Director, has or is deemed to have
substantial interests:-
3 months ended
31 March 2003
Nature of transactions RM '000
Purchase of consumables from Shin
Yang Services Sdn Bhd and Shin Yang 369
Trading Sdn Bhd
Purchase of farm machineries and spare
parts from Dai Lieng Machinery Sdn Bhd 57
and Dai Leing Trading Sdn Bhd
Purchase of fresh fruit bunches from
Greenwood Estate Sdn Bhd and Shin 435
Yang Oil Palm Bhd
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M)
Additional Information Required by the KLSE's Listing Requirements
1 Review of performance
The Group’s profit before taxation for the first quarter ended 31 March 2003 increased by 87.2%
compared to the previous year corresponding quarter, mainly due to stronger CPO and PK prices.
2 Variation of results against preceding quarter
For the quarter under review, the Group recorded a profit before tax, minority interest and
extraordinary items of RM6.70 million compared to RM7.80 million in the previous quarter. The
decrease in profits was mainly due to lower FFB production during the current quarter.
3 Prospects
The performance of the Group for the coming year is largely dependent on developments in the
world edible oil market and their corresponding effect on CPO prices. At the time of reporting, the
CPO price has droped to RM1350 per ton. Assuming that CPO & PK prices stay at current levels,
the Group expects to maintain its performance for the coming year.
4 Profit forecast
Not applicable as no profit forecast was published.
5 Tax expense
3 months ended 3 months ended
31 March 31 March
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Current tax expense 1,965 150 1,965 150
Deferred tax 0 1050 0 1050
1,965 1,200 1,965 1,200
The Group’s effective tax rate is higher than the prima facie tax rate as group relief is not
available for losses incurred at the subsidiaries and associated company and non-
deductibility for tax purposes of certain expenses.
6 Unquoted investments and properties
There is no profit on sale of unquoted investments and properties as there is no disposal of
unquoted investments and properties during the period under review other than those disclosed in
note 8 below.
7 Quoted investments
There is no purchase or disposal of quoted securities.
8 Status of corporate proposal announced
There are no corporate proposals announced but not completed as at the date of issue of this report
except for the following:-
(i) Conditional Sale and Purchase Agreement dated 12 December 2002 entered into between Sarawak
Oil Palms Berhad ("SOPB") and Rajang Wood Sdn Bhd ("RWSB") for the disposal of SOPB’s entire
equity shareholding in Keresa Plantation Sdn Bhd ("Keresa"), representing 13,320,000 Ordinary
Shares or 45% of the equity interest in Keresa to RWSB for a total cash consideration of RM21.30
million was completed on 20 May 2003.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M)
Additional Information Required by the KLSE's Listing Requirements
(ii) Conditional Sale and Purchase Agreement dated 21 January 2003 entered into between SOPB and
the following parties:-
(a) Esteem Pioneer Sdn Bhd for the acquisition of 4,250,000 Ordinary Shares, representing 85% of the
total issued and paid-up Ordinary Shares of Shin Yang Oil Palm Sdn Bhd ("SYOP") for a total cash
consideration of RM63.6 million; and
(b) Shin Yang Corporation Sdn Bhd and Halimah binti Othman for the acquisition of 4,250,000
Preference Shares representing the entire total issued and paid-up Preference Shares of SYOP for
a total cash consideration of RM4.25 million.
The Proposed Acquisition has been approved by FIC and is now pending approval of shareholders'
at the forthcoming Extraordinary General Meeting on 6 June 2003.
9 Borrowing and debt securities
31 March 2003
RM’000
Current
Secured -
Unsecured 10,300
Non-current
Secured 40,900
Unsecured 16,800
68,000
The above borrowings are denominated in Ringgit Malaysia.
10 Off balance sheet financial instruments
During the financial year todate, the Group did not enter into any contracts involving off balance
sheet financial instruments.
11 Changes in material litigation
(a) SOP Plantations (Suai) Sdn Bhd
As reported in the last quarter, SOP Plantations (Suai) Sdn Bhd, 85% owned subsidiary of the
Company, has in 1998 accepted an offer of alienation of nine provisional land leases for oil palm
plantation purpose comprising Lot 157, Suai Land District; Lots 931 and 932, Niah Land District; and
Lots 73 to 78, Sawai Land District totaling 6,586 hectares.
Out of the land alienated, the Company has developed an area of 883 hectares. An additional 400
hectares is under development. The development on the remaining areas has been deferred due
mainly to land disputes and claims of native customary rights over the land.
Among the claimants are five individuals who have sued the Superintendent of Lands and Surveys,
Sarawak, the State Government of Sarawak and the holding company, Sarawak Oil Palms Berhad,
claiming to have native customary rights over the lands in the area at Rumah Lasan and Rumah
Timboo, Sungai Gelasah, Suai, Niah, Miri Division, Sarawak as delineated in a map attached to the
Statement of Claim dated 25th May 1998 forming part of the said Lot 78, Sawai Land District,
Sarawak.
These five individuals claim to sue on behalf of themselves and all other proprietors, occupiers,
holders or claimants of Native Customary Rights Lands situate at Rumah Lasan and Rumah
Timboo, Sungai Gelasah, Niah, Suai.
Pending a resolution of the land disputes and the afore-mentioned suit, the Company has deferred
developing the land for the moment.
There is no further development other than the pre-trial case management which was first fixed for
hearing on 28 March 2002 and heard on the 16 October 2002. A second pre-trial case
management was held on 19 March 2003 and a third pre-trial case management was fixed on 25
June 2003.
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M)
Additional Information Required by the KLSE's Listing Requirements
(b) Keresa Plantations Sdn Bhd ("Keresa")
As previously announced, the Company has instituted legal action against Rajang Wood Sdn Bhd
("RWSB"), the majority shareholder of Keresa. Keresa is a joint venture company owned by RWSB
and the Company with 55% and 45% shareholding respectively. Its main activity is the cultivation of
oil palms and rattan. Keresa has approximately 4,200 hectares of oil palm and 1,500 hectares of
rattan planted. The Company in its Statement of Claim claims that RWSB has been in material
breach of its obligations under the joint venture agreement.
The defendant, RWSB, filed for a stay of the action pursuant to Section 6 of the Arbitration Act 1952
and this application which was fixed for hearing on 2 July 2002 was adjourned to 26 September
2002, 17 December 2002 and subsequently to 8 July 2003.
SOPB had on 12 December 2002 announced that the Company had entered into a conditional Sale
and Purchase Agreement ("Agreement") to dispose of its entire 45% equity interest representing
13,320,000 Ordinary Shares in Keresa to RWSB for a total cash consideration of RM21.30 million
("Proposed Disposal"). The Proposed Disposal was approved by FIC on 29 April 2003 and
subsequently completed on 20 May 2003. On the latter date, the Company has consented to wholly
discontinuing of the action against the Defendent and with no order as to costs.
12 Dividends
The Board has recommended a first and final dividend of 5% less 28% income tax for the year
ended 31 December 2002 (2001 – 3%) which, if approved by the shareholders at the forthcoming
annual general meeting, shall be paid on 28 July 2003. The amount payable is RM3.42 million.
The entitlement date for the first and final dividend shall be 14 July 2003. A depositor shall qualify
for entitlement to the dividend only in respect of:
(a) shares deposited into the depositor’s securities account before 12:30 p.m. on 10 July 2003 in
respect of shares exempted from mandatory deposit;
(b) shares transferred into the depositor’s securities account before 4:00 p.m. on 14 July 2003 in
respect of ordinary transfers; and
(c) shares bought on Kuala Lumpur Stock Exchange (“KLSE”) on a cum entitlement basis in
accordance with the rules of KLSE.
13 Earnings per share
Basic/Diluted earnings per share
The calculation of basic/Diluted earnings per share for the quarter is based on the net profit
attributable to ordinary shareholders of RM4.79 million and the number of ordinary shares
outstanding during the quarter of 94,968,240.
By Order of the Board
Eric Kiu Kwong Seng
Company Secretary
Miri
29 May 2003
Sarawak Oil Palms Berhad Interim Report Q1 2003
(7949-M)
