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					Unico-Desa Plantations Berhad (Company No. 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006




A1     Accounting Policies And Basis Of Preparation

       The interim financial statements are unaudited.

       The interim financial statements should be read in conjunction with the audited
       financial statements of the Group for the financial year ended 31 March 2006.

       The quarterly financial statements have been prepared in accordance with
       Financial Reporting Standards (FRS) 134 Interim Financial Reporting and
       Chapter 9 part K of the Listing Requirements of Bursa Malaysia Securities
       Berhad.

       The accounting policies and methods of computation adopted for the interim
       financial statements are consistent with those adopted for the annual audited
       financial statements for the financial year ended 31 March 2006 except for the
       adoption of the following new/revised FRSs effective for the financial period
       beginning 1 April 2006:

       FRS3          Business Combination
       FRS5          Non-current Assets Held for Sales and Discontinued Operations
       FRS101        Presentations of Financial Statements
       FRS102        Inventories
       FRS108        Accounting Policies, Changes in Estimates and Errors
       FRS110        Events after the Balance Sheet Date
       FRS116        Property, Plant and Equipment
       FRS127        Consolidated and Separate Financial Statements
       FRS132        Financial Instruments: Disclosure and Presentation
       FRS133        Earnings Per Share
       FRS136        Impairment of Assets
       FRS138        Intangible Assets

       The adoption of the new/revised FRSs did not result in substantial changes to the
       Group’s accounting policies other than the effects arising from the following
       FRSs:

       FRS3          Business Combination
       FRS5          Non-current Assets Held for Sales and Discontinued Operations
       FRS101        Presentations of Financial Statements

       The principal effects of the changes in accounting policies resulting from the
       adoption of the FRSs are discussed below:


                                           1
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006


A1     Accounting Policies And Basis Of Preparation (continued)

       FRS 3 Business Combination

       Under FRS 3, any excess of the Group’s interest in the net fair value of acquirees’
       identifiable assets, liabilities and contingent liabilities over cost of acquisitions
       (previously referred to as “negative goodwill”), after reassessment, is now
       recognised immediately in income statements. Prior to 1 April 2006, negative
       goodwill was carried as equity. In accordance with the transitional provision of
       FRS 3, the negative goodwill as at 1 April 2006 of RM240,000 was derecognised
       with a corresponding increase in the retained earnings.

       FRS 5 Non-current Assets Held for Sale and Discontinued Operations

       An item is classified as held for sale if its carrying amount will be recovered
       principally through a sale transaction rather than through continuing use. The
       assets and liabilities of a discontinued operation (a disposal group) that are
       classified as held for sale are measured in accordance with FRS 5. Immediately
       before classified as held for sale, the carrying amounts of all the assets and
       liabilities in the disposal group is measured in accordance with applicable FRSs.
       Then, on initial classification as held for sale, the disposal group is recognised at
       the lower of carrying amount and fair value less costs to sell.

       FRS 101 Presentation of Financial Statements

       The current period’s presentation of the Group’s financial statements is based on
       the revised requirements of FRS 101, with the comparatives restated to conform
       with the current period’s presentation.

       Plantation development expenditure (“PDE”) previously classified under
       property, plant and equipment is now disclosed separately in the consolidated
       balance sheet as biological assets. The group maintains its existing accounting
       policy on biological assets and shall comply with the provisions of FRS 141 :
       Agriculture, the equivalent of International Accounting Standard 41, once it
       becomes effective for application in Malaysia.




                                            2
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006


A1     Accounting Policies And Basis Of Preparation (continued)

       The following amounts as at 31 March 2006 have been reclassified due to the
       adoption of the new and revised FRSs.

                             Previously stated    Reclassification          Restated
                                 RM’000              RM’000                 RM’000
       Property plant and
       equipment                 430,159              (169,792)             260,367
       Biological assets            0                  169,792              169,792
       Reserve         on
       consolidation               240                  (240)                 0
       Retained earnings          91,393                 240                91,633


A2     Audit Report For The Preceding Annual Financial Statements

       The audited financial statements of the Group for the preceding financial year
       ended 31 March 2006 was not qualified.

A3     Seasonal and Cyclical Factors

       The Group’s plantation operations are affected by seasonal crop production,
       weather conditions and fluctuating commodity prices.

       The Group’s FFB production is usually low during the 1st half of the calendar year
       and peak in the 2nd half of the calendar year.

A4     Nature and Amount of the Exceptional and Extraordinary Item

       There were no exceptional or extraordinary items for the financial period under
       review that may affect the amount stated in the interim financial statements.

A5     Change in estimates

       There were no material changes in estimates reported in prior periods.




                                           3
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



A6     Issuance and Repayment of Debt and Equity Securities, Share Buy-back, Shares
       Held as Treasury Shares

       The Company repurchased 22.80 million shares of its issued share capital for
       RM11.78 million in the previous financial quarter. The average price paid for the
       shares repurchased was approximately RM0.52 per share. On 21 April 2006 the
       Company distributed 32.80 million treasury shares as share dividend to its
       shareholders on the basis on One(1) Treasury Share for every Twenty-Five(25)
       existing ordinary shares of RM0.25 each held in the Company. Save for the
       above, during the quarter under review, there were no issuance and repayment of
       debt and equity securities, share buy-back, share cancellations and resale of
       treasury shares. The total treasury shares held by the Company as at 30 September
       2006 was 53.20 million shares.

A7     Dividend Paid

       There were no dividend paid during the current financial quarter and financial
       year-to-date ended 30 September 2006.

A8     Segmental Reporting

       Segmental reporting for the 3 months ended 30.09.2006

                             Plantations            Hire      Others       Consolidated
                                                 Purchase
                                                 Financing
                                                and related
                                                 activities
                              RM’000              RM’000      RM’000         RM’000
       Revenue
       External revenue            50,424             3,894            0         54,318

       Total Revenue               50,424             3,894            0         54,318

       Result
       Profit/(Loss)
       from operations              9,473             1,593        (3)            11,063
       Finance cost                                                              (1,606)
       Tax expense                                                               (2,363)
       Net profit                                                                  7,094


                                            4
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006


A8     Segmental Reporting (continued)

       Segmental reporting for the 3 months ended 30.09.2005

                            Plantations            Hire      Others       Consolidated
                                                Purchase
                                                Financing
                                               and related
                                                activities
                              RM’000             RM’000      RM’000         RM’000
       Revenue
       External revenue           42,195             1,615            0          43,810

       Total Revenue              42,195             1,615            0          43,810

       Result
       Profit/(Loss)
       from operations            12,058               936        (4)            12,990
       Finance cost                                                               (843)
       Tax expense                                                              (3,158)
       Net profit                                                                 8,989


       Segmental reporting for the 6 months ended 30.09.2006

                            Plantations            Hire      Others       Consolidated
                                                Purchase
                                                Financing
                                               and related
                                                activities
                              RM’000             RM’000      RM’000         RM’000
       Revenue
       External revenue           94,015             7,712            0         101,727

       Total Revenue              94,015             7,712            0         101,727

       Result
       Profit/(Loss)
       from operations            17,966             2,624        (4)            20,586
       Finance cost                                                             (3,147)
       Tax expense                                                              (4,487)
       Net profit                                                                12,952
                                           5
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



       Segmental reporting for the 6 months ended 30.09.2005

                            Plantations            Hire      Others       Consolidated
                                                Purchase
                                                Financing
                                               and related
                                                activities
                              RM’000             RM’000      RM’000         RM’000
       Revenue
       External revenue           79,707             2,756            0          82,463

       Total Revenue              79,707             2,756            0          82,463

       Result
       Profit/(Loss)
       from operations            16,357             1,649         (9)           17,997
       Finance cost                                                             (1,533)
       Tax expense                                                              (4,281)
       Net profit                                                                12,183


A9     Valuation of property, plant and equipment

       The Group had carried out a revaluation exercise on the Group’s property, plant
       and equipment in the financial year ended 31 March 2004 in accordance with the
       Group’s accounting policies and the valuation have been brought forward without
       amendment since.

A10    Post Balance Sheet Event

       As at the date of report, the Company repurchased approximately 10.00 million of
       its issued share capital from the open market on the Bursa Malaysia Securities
       Berhad for RM5.43 million. The average price paid for the shares repurchased
       was approximately RM0.54 per share.




                                           6
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



A11    Changes in the Composition of the Group

       There were no changes in the composition of the group for the period under
       review including business combination, acquisition or disposal of subsidiaries and
       long term investments, restructuring and discontinuing operations.

A12    Contingent Liabilities

       There are no contingent liabilities which may have an operational or financial
       impact on the Group.

A13    Capital commitments

Capital commitments not provided for in the consolidated financial statements are as
follows:
                                                   30.09.06              30.09.05
                                                   RM’000                RM’000
       Property, plant and equipment
       Authorised and contracted                          2,755                6,900
       Authorised but not contracted                        198                    0
                                                          2,953                6,900




                                           7
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



A14    Significant related party disclosure

       The related party transactions described below were carried out on terms and
       conditions obtainable in transactions with unrelated parties.

                                          Current    Last   Cumulative Cumulative
                                          Quarter    Year    This year  Last Year
                                                    Quarter  30.09.06   30.09.05
                                          RM’000    RM’000   RM’000     RM’000
       Rental   paid      to    Unico
       Holdings Bhd.                          60      60       120         120

       ELK-Desa Capital Sdn. Bhd.
       provided      hire   purchase
       facility to vehicle purchasers
       from ELK Used Cars Sdn.
       Bhd.                                    0     282        0          1,267

       ELK-Desa Capital Sdn. Bhd.
       provided      hire   purchase
       facility to vehicle purchasers
       from ELK Motor Trade Sdn.
       Bhd.                                   269    277       835         277

       ELK-Desa Marketing Sdn.
       Bhd. purchased vehicles from
       Eng Lee Kredit Sdn. Bhd. for
       resale.                                430     0        430           0

       Rental paid to Eng Lee Kredit
       Sdn. Bhd.                              90      30       180          30

       Disposed part of unquoted
       investment to ELK Amity
       Capital Sdn. Bhd. (formerly
       known as : ELK Capital Sdn.
       Bhd.)                                   0      0       5,449          0
                                              849    649      7,014        1,694




                                              8
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006


A14    Significant related party disclosure (continued)

       a)Unico Holdings Berhad is a substantial shareholder of the Company. Certain
         Directors of the Company are also directors of Unico Holdings Berhad.

       b)ELK Group Sdn. Bhd. is a substantial shareholder of the Company and has
         common directors with ELK-Desa Capital Sdn. Bhd., a wholly owned
         subsidiary of the Company. ELK-Desa Marketing Sdn. Bhd. is a wholly owned
         subsidiary of ELK-Desa Capital Sdn. Bhd. ELK Used Cars Sdn. Bhd., ELK
         Motor Trade Sdn. Bhd. and Eng Lee Kredit Sdn. Bhd. are wholly owned
         subsidiaries of ELK Group Sdn. Bhd. They are deemed to be related party of
         the Company by virtue of Mr. Teoh Hock Chai @ Tew Hock Chai’s, Mr. Lim
         Keng Chin’s and Mr. Teoh Seng Hui’s directorships and interests in ELK Group
         Sdn. Bhd.

       c)ELK Amity Capital Sdn. Bhd. is deemed to be a related party of the Company
         by virtue of the members of the Board, Mr. Teoh Hock Chai @ Tew Hock Chai,
         Dr. Yeong Cheong Thye @ Yeong Yue Chai, Mr. Lim Keng Chin and Mr. Teoh
         Seng Hui having substantial interest and/or common directorships in the
         Company and ELK Amity Capital Sdn. Bhd.

       A15    Comparative figures

       Certain comparative figures have been reclassified to conform with the current
       year presentation.




                                            9
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



B1.    Review Of Performance

       The Group’s revenue for the quarter was higher than that of the previous year’s
       corresponding period by 24.0% or RM10.51 million. Revenue for the plantations
       segment increased by RM8.23 million due to higher sales while the revenue for
       hire purchase segment increased by RM2.28 million due to growth in hire
       purchase portfolio.

       The Group’s profit before tax of RM9.46 million for the current quarter under
       review was RM2.69 million lower than the previous year corresponding period
       mainly due to higher cost of Fresh Fruit Bunches (FFB) purchases for mill
       operations and lower Oil Extraction Rate (OER) achieved.

       The Group’s revenue for the six months ended 30 September 2006 was higher by
       23.4% or RM19.26 million year–on-year. Revenue for the plantations segment
       increased by RM14.30 million due to higher sales while the revenue for hire
       purchase segment increased by RM4.96 million due to growth in hire purchase
       portfolio.

       Although revenue was higher, the Group’s profit before tax of RM17.44 million
       for the six months ended 30 September 2006 only increased marginally by
       RM0.98 million year-on-year as this was offset by higher cost of FFB purchases
       for mill operations and lower OER achieved.


B2     Comparison of results with preceding quarter

       Group profit before tax for the current quarter was higher than that of the
       immediate preceding quarter mainly due to higher FFB production and growth in
       hire purchase portfolio.




                                          10
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



B3     Prospects and outlook

       If current prices of CPO and PK are sustainable, the performance of the Group for
       the current financial year is expected to be satisfactory.

       The hire purchase segment is also expected to contribute positively towards
       performance of the Group.

B4     Profit Forecasts

       The Group did not issue any profit forecasts for the period under review.


B5     Taxation

       Tax charge/(credit) for the quarter and financial period ended 30 September 2006
       are set out below:

                                                                  3 months        6 months
                                                                    ended           ended
                                                                 30/09/2006      30/09/2006
                                                                  RM’000          RM’000
       (a)   Current                                               2,473             4,708
       (b)   Deferred Taxation                                       (110)            (221)
                                                                   2,363             4,487


       The effective tax rate for the current quarter and financial year-to-date is lower
       than the statutory tax rate mainly due to the crystallisation of certain deferred tax
       liabilities.


B6     Sale of Unquoted Investments and/or Properties

       The Group disposed of the remaining of its investment in Unico Holdings Bhd.
       for a consideration of RM5.5 million in the current financial quarter. In Previous
       financial quarter, the Group disposed off part of its investment in Unico Holdings
       Bhd. for a consideration of RM5.4 million. There were no profit or loss arising
       from the above transactions.



                                            11
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



B7     Particulars of Purchases and Disposal of Quoted Securities

       There were no dealings in quoted securities for the current quarter ended 30
       September 2006.

B8     Status of Corporate Proposals Announced but not yet Completed

       There are no corporate proposals announced but not completed as at date of this
       report.

B9     Group Borrowings

       The Group’s borrowings as at 30 September 2006 are as follows: -

                                                                 30 September 2006
       Unsecured                                                      RM’000

       Bank overdraft                                                  1,520


       Secured

       Bank overdraft                                                  3,815

       Term Loans
       – due and payable within 12 months                              7,172
       – due and payable later than 12 months and not later
           than 2 years                                                7,836
       – due and payable later than 2 years and not later than
           5 years                                                    47,688
       – due and payable later than 5 years                           22,997
       Block discounting payables
       - due and payable within 12 months                              7,382
       - due and payable later than 12 months and not later
           than 5 years                                               13,158
                                                                     110,048


       The Group does not have any borrowings that is denominated in foreign currency.



                                           12
Unico-Desa Plantations Berhad (Company No : 78983-V)

Notes to the Interim Financial Statements
for the second quarter ended 30 September 2006



B10    Off Balance Sheet Financial Instruments

       The Group does not have any off balance sheet financial instruments which
       position has not been closed as at 30 September 2006 or any such financial
       instruments entered into after 30 September 2006.

B11    Pending Material Litigation

       There are no material litigations pending.

B12    Dividend

       A final dividend in respect of financial year ended 31 March 2006 of 8% per
       RM0.25 share less 28% taxation was approved at the Annual General Meeting
       held on 28 August 2006. The dividend was paid on 31 October 2006 on issued
       and paid up capital as at 18 October 2006 of 830,000,000 ordinary shares and
       amounted to RM11,952,000.

       No dividend has been declared for the current financial quarter ended 30
       September 2006.

B13    Earnings Per Share

       Basic Earnings Per Share is calculated by dividing the Group’s net profit by the
       number of ordinary shares in issue during the financial year, excluding ordinary
       shares purchased by the Company and held as treasury shares.

                        Current Year    Preceding Year   Current Year   Preceding Year
                          Quarter       Corresponding      To Date      Corresponding
                                            Quarter                         Period
       Basic            30/09/2006        30/09/2005     30/09/2006       30/09/2005
       Net     Profit
       (RM’000)             7,094            8,989         12,952          12,183
       Weighted
       average
       number      of
       ordinary
       shares (units)    830,000,000       853,200,000   829,490,184      855,464,481
       Basic
       earnings per
       share (sen)          0.85              1.05           1.56            1.42

                                           13

				
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