Narborough Plantations PLC
28 March 2008
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
PRELIMINARY STATEMENT OF ANNUAL RESULTS
CONDENSED INCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Continuing operations Restated
12 months to 18 months to
31.12.2007 31.12.2006
NOTE RM £ RM £
Revenue 2 7,768,861 1,129,195 6,508,113 939,122
Cost of sales (1,897,879) (275,855) (2,503,405) (361,242)
Gross profit 5,870,982 853,340 4,004,708 577,880
Gain arising from revaluation
of biological assets 4,364,128 660,231 - -
Other operating income 28,627 4,161 6,800 981
Administrative expenses (673,054) (97,828) (715,219) (103,206)
Exchange (loss)/profit (174,928) (25,426) 26,897 3,881
Operating profit 9,415,755 1,394,478 3,323,186 479,536
Share of profit of associate
after tax 725,549 109,765 289,489 41,773
Finance income 3 212,528 30,891 226,437 32,675
Finance costs 4 (18,359) (2,777) (38,112) (5,467)
Profit before tax 5 10,335,473 1,532,357 3,801,000 548,517
Tax expense 6 (1,479,232) (215,005) (1,108,315) (159,930)
Profit for the financial
year/period 8,856,241 1,317,352 2,692,685 388,587
Earnings per share
- basic and diluted
(sen/pence) 7 66.51 sen 9.89p 20.22 sen 2.92p
The accompanying notes form an integral part of this income statement.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSES
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
12 months to 18 months to
31.12.2007 31.12.2006
NOTE RM £ RM £
Profit for the financial
year/period 17 8,856,241 1,317,352 2,692,685 388,587
Revaluation gains from
revaluation of property,
plant and equipment 17 4,115,740 622,654 - -
Reversal of deferred tax
liabilities provided on prior
years' revaluation surplus,
due to exemption from real
property gains tax 905,909 137,051 - -
Total recognised income
and expenses for the
year/period 13,877,890 2,077,057 2,692,685 388,587
The accompanying notes form an integral part of this statement of total
recognised income and expenses.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
CONDENSED BALANCE SHEET
AS AT 31 DECEMBER 2007
Restated
31.12.2007 31.12.2006
NOTE RM £ RM £
ASSETS
Non-current assets
Property, plant and
equipment 8 16,177,006 2,447,353 12,144,771 1,752,493
Biological assets 8 14,225,020 2,152,045 9,860,892 1,422,928
Prepaid lease payments 9 134,375 20,329 153,125 22,096
Investment in associate 10 4,231,214 640,123 3,548,589 512,062
Total non-current assets 34,767,615 5,259,850 25,707,377 3,709,579
Current assets
Inventories 8,134 1,231 7,394 1,067
Trade and other receivables 11 580,961 87,891 411,983 59,449
Short term deposits 7,575,741 1,146,103 4,493,483 648,410
Cash and bank balances 516,683 78,167 558,061 80,528
Total current assets 8,681,519 1,313,392 5,470,921 789,454
Total assets 43,449,134 6,573,242 31,178,298 4,499,033
Liabilities
Current liabilities
Trade and other payables 12 (1,943,428) (294,013) (485,171) (70,010)
Tax liabilities (318,900) (48,245) (31,750) (4,581)
Total current liabilities (2,262,328) (342,258) (516,921) (74,591)
Non-current liabilities
Provision for retirement
benefits 13 (26,444) (4,001) (24,058) (3,472)
Deferred tax liabilities 14 (148,548) (22,473) (1,054,457) (152,158)
Cumulative preference shares 15 (84,163) (19,024) (84,163) (19,024)
Total non-current liabilities (259,155) (45,498) (1,162,678) (174,654)
Total liabilities (2,521,483) (387,756) (1,679,599) (249,245)
TOTAL NET ASSETS 40,927,651 6,185,486 29,498,699 4,249,788
The accompanying notes form an integral part of this balance sheet.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
CONDENSED BALANCE SHEET
AS AT 31 DECEMBER 2007 (continued)
31.12.2007 31.12.2006
NOTE RM £ RM £
Capital and reserves
attributable to equity
holders of the Company
Share capital 16 4,891,969 1,331,659 4,891,969 1,331,659
Other reserves 17 22,313,966 2,777,925 17,292,317 2,004,640
Retained profits 17 13,721,716 2,075,902 7,314,413 913,489
TOTAL EQUITY 40,927,651 6,185,486 29,498,699 4,249,788
These financial statements were approved by the Board of Directors and
authorised for issue on 28 March 2008, and were signed on its behalf by:
JULIANA MANOHARI DEVADASON
Chairman
The accompanying notes form an integral part of this balance sheet.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Operating activities
Profit before tax 10,335,473 1,532,357 3,801,000 548,517
Adjustments for:
Amortisation of prepaid lease payment 18,750 2,725 28,125 4,058
Depreciation of property, plant and
equipment 88,789 12,906 133,399 19,250
Provision for retirement benefits 2,387 361 1,113 161
Exchange adjustment - 263,160 - (6,144)
Gain arising on revaluation of
biological assets (4,364,128) (660,231) - -
Gain on disposal of property, plant
and equipment - - (300) (43)
Share of profit of associate after tax (725,549) (109,765) (289,489) (41,773)
Finance income (212,528) (30,891) (226,437) (32,675)
Finance costs 18,359 2,777 38,112 5,467
Operating cash flow before changes
in working capital and provisions 5,161,553 1,013,399 3,485,523 496,818
Decrease/(Increase) in trade and
other receivables (168,978) (25,564) (56,738) (8,187)
Decrease in inventories (740) (112) 9,626 1,389
(Decrease)/Increase in trade and
other payables 44,614 6,749 142,206 20,520
Cash generated from operations 5,036,499 994,472 3,580,617 510,540
Tax paid (1,192,082) (173,268) (821,800) (118,586)
Retirement benefit paid - - (4,134) (597)
Net cash flow from operating activities 3,844,367 821,204 2,754,683 391,357
Investing activities
Repayment from affiliated company 42,924 6,494 167,795 24,213
Purchases of property, plant and
equipment (5,284) (799) (10,549) (1,522)
Proceeds from disposal of property,
plant and equipment - - 300 43
Interest received 212,528 30,891 226,437 32,675
Net cash flow from investing activities 250,168 36,586 383,983 55,409
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 (continued)
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Financing activities
Dividends paid on equity shares (1,035,296) (359,681) (1,992,616) (286,393)
Dividends paid on preference shares (18,359) (2,777) (38,112) (5,467)
Net cash flow used in financing
activities (1,053,655) (362,458) (2,030,728) (291,860)
Increase in cash and cash equivalents 3,040,880 495,332 1,107,938 154,906
Cash and cash equivalents at
beginning of financial year/period 5,051,544 728,938 3,943,606 574,032
Cash and cash equivalents at end
of financial year/period 8,092,424 1,224,270 5,051,544 728,938
Comprising:
Cash and bank balances 516,683 78,167 558,061 80,528
Short term deposits 7,575,741 1,146,103 4,493,483 648,410
8,092,424 1,224,270 5,051,544 728,938
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2007
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS and IFRIC) issued by the International
Accounting Standards Board (IASB) as adopted by the EU and with those parts of
the Companies Act, 1985 applicable to companies preparing their accounts under
IFRS.
During the financial year, the Company has adopted IFRS 7 Financial Instruments
which contains provisions relating to the disclosure of the significance of
financial instruments, the risk exposures arising therefrom and the approach
taken in managing those risks, replacing the existing provisions of IAS 32.
Prior to 1 January 2007, the Company has classified its short term leasehold
land as finance lease and had recognised the prepaid lease payments as property
within its property, plant and equipment.
During the financial year, the Company has treated such a lease as an operating
lease in accordance with IAS 17 Leases. Accordingly, the unamortised carrying
amount of the short term leasehold land has been classified as prepaid lease
payments separately.
Standards, amendments and interpretations to published standards effective in
2007 but which are not relevant to the Company.
The following standards, amendments and interpretations to published standards
are mandatory for accounting periods beginning on or after 1 January 2007 but
are currently not relevant to the Company's operations:
IFRIC 7 Applying the restatement approach under IAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 8 Scope of IFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.1 Basis of accounting (continued)
Standards, amendments and interpretations to published standards not yet
effective
Certain new standards, amendments and interpretations to existing standards have
been published that are mandatory for the Company's accounting periods beginning
on or after 1 January 2008 or later periods and which the Company has decided
not to adopt early. These are:
IFRS 8 Operating Segments
IAS 23 Borrowing Costs (revised)*
IFRIC 11, IFRS 2 Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements*
IFRIC 13 Customer Loyalty Programmes*
IFRIC 14, IAS 1 The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction*
Revised IFRS 3 Business Combination and complementary Amendments to IAS 27 '
Consolidated and separate financial statements*
Amendment to IFRS 2 Share-based payments: vesting conditions and cancellations*
IAS 1 Presentation of Financial Statements (Amendment)*
IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and
Obligations Arising on Liquidation (Amendment)*
IAS 32 Financial Instruments: Presentation (Amendment)*
* Not endorsed by the EU as at the date of approval of these financial
statement.
The directors do not anticipate that the adoption of the above standards and
interpretations will have a material impact on the Company's financial
statements, other than increasing disclosure, in the period of initial adoption
and subsequent periods.
Except as noted above, the following principal accounting policies have been
applied consistently in the preparation of these financial statements:
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.2 Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost or valuation, which
is the fair value at the date of revaluation, less accumulated depreciation and
impairment losses, if any.
The freehold estate and residential land were revalued during the
financial year. These are revalued at regular intervals of at least once in
every five years with additional valuations in the intervening years where
market conditions indicate that the carrying values of the revalued properties
materially differ from the market values.
The surplus arising from such valuations is credited to
shareholders' equity as a revaluation reserve and any subsequent deficit is
charged against such surplus to the extent that the decrease offsets any
increase. In all other cases, the deficit will be charged to the income
statement.
For a revaluation increase subsequent to a revaluation deficit of
the same asset, the surplus should be recognised as income to the extent that it
reverses the deficit previously recognised as an expense with the balance of
increase credited to shareholders' equity.
Upon disposal of an item of property, plant and equipment, the
difference between the net disposal proceeds and the net carrying amount is
recognised in the income statement and the revaluation reserve related to the
asset, if any, is transferred directly to retained profits.
The freehold estate and residential land are not depreciated.
Depreciation of other property, plant and equipment are provided on
a straight line basis at rates calculated to write off their cost over the
following estimated useful lives.
Buildings 5%
Machinery 10% - 20%
Fixtures, fittings and electrical installation 10%
Furniture and equipment 10%
Information technology equipment 25%
Vehicles 15% - 20%
Depreciation of property, plant and equipment commences when it is available for
use and does not cease when the asset becomes idle or is retired from active use
unless the asset is fully depreciated.
The residual values, useful life and depreciation method are reviewed at each
financial year end to ensure that the amount, method and period of depreciation
are consistent with previous estimates and the expected pattern of consumption
of the future economic benefits embodied in the items of property, plant and
equipment.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3 Prepaid lease payments
The lump-sum upfront payments made to acquire the interest in the
leasehold land represent prepaid lease payments and are amortised on a
straight-line basis over the remaining lease period of approximately 11 years.
1.4 Biological assets
Biological assets are stated at fair value less estimated point of
sale costs. The movement in fair value of biological assets is charged or
credited to the income statement for the relevant period.
1.5 New Planting, Replanting and Deferred Nursery Expenditure
New planting expenditure incurred on land clearing and upkeep of
trees to maturity is capitalised under plantation development expenditure and is
not amortised.
Replanting expenditure is charged to the income statement in the financial year
in which the expenditure is incurred.
Deferred nursery expenditure is capitalised under plantation
development expenditure at cost and charged to the income statement on
replanting of crops.
1.6 Associate
Where the Company has the power to participate in (but not control) the
financial and operating policy decisions of another entity, it is classified as
an associate. Associates are initially recognised in the balance sheet at cost.
The Company's share of post-acquisition profits and losses is recognised in the
income statement, except that losses in excess of the Company's investment in
the associate are not recognised unless there is an obligation to make good
those losses.
Profits and losses arising on transactions between the Company and its
associates are recognised only to the extent of unrelated investors' interests
in the associate. The Company's share in the associate's profits and losses
resulting from these transactions is eliminated against the carrying value of
the associate.
Any premium paid for an associate above the fair value of the Company's share of
the identifiable assets, liabilities and contingent liabilities acquired is
capitalised and included in the carrying amount of the associate and subject to
impairment in the same way as goodwill arising on a business combination.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.7 Impairment of non-financial assets
The carrying amounts of the Company's assets, other than
inventories, deferred tax asset and financial assets (other than investment in
associate), are reviewed at each balance sheet date to determine whether there
is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated and an impairment loss is recognised whenever
the recoverable amount is less than the carrying amount of the asset.
The impairment loss is recognised in the income statement
immediately except for the impairment on a revalued asset where the impairment
loss is recognised directly against the revaluation reserve account to the
extent of the surplus credited from the previous revaluation for the same asset
with the excess of the impairment loss charged to the income statement.
Reversals of an impairment loss are recognised as income immediately
in the income statement if the original impairment had been recognised there.
Reversal of an impairment loss previously recognised directly against
revaluation reserve is treated as a revaluation increase and credited to the
revaluation reserve account of the same asset.
An impairment loss is only reversed to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
1.8 Inventories
Inventories are stated at the lower of cost (determined on a
weighted average basis) and net realisable value.
1.9 Receivables
Receivables are carried at anticipated realisable value. Known bad
debts are written off and allowance is made for debt considered to be doubtful
of collection.
1.10 Payables
Payables are stated at cost which is the fair value of the
consideration to be paid in the future for goods and services received.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.11 Retirement Benefits
The Company has no pension plans other than its mandatory
contribution to provident funds approved by the Malaysian government (as stated
in Note 1.19.2 below) and provision for lump sum payments of retirement benefits
to staff and workers upon their retirement. The provision for lump sum payments
is based on the collective agreements between the Malaysian Agricultural
Producers Association (MAPA) and All Malaysia Estate Staff Union (AMESU) and
National Union of Plantation Workers (NUPW) respectively. The Company's
obligation is limited to the agreed terms.
1.12 Taxation
1.12.1 Current tax expense
Current tax expense is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous
years.
1.12.2 Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of
an asset or liability in the balance sheet differs from its tax base.
Recognition of deferred tax assets is restricted to those instances where it is
possible that taxable profit will be available against which the difference can
be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity such as revaluations, in which case the
deferred tax is also dealt with in equity.
1.13 Foreign Currencies
1.13.1 Functional and Presentation Currency
The financial statements are measured in Ringgit Malaysia (RM),
which is the functional currency, being the currency of the primary economic
environment in which the Company operates. The financial statements are
presented in both RM and Pound Sterling. The balance sheet is translated to
Pound Sterling for presentation purpose at an exchange rate of RM1 = 15.13p
(2006: RM1 = 14.43p) whereas the income statement is translated at an average
exchange rate of RM1 = 14.53p (2006: RM1 = 14.86p).
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.13 Foreign Currencies (continued)
1.13.2 Foreign Currency Transactions
Transactions in foreign currencies are converted into Ringgit
Malaysia at rates of exchange ruling at the transaction dates. Monetary assets
and liabilities in foreign currencies at the balance sheet date are translated
into Ringgit Malaysia at rates of exchange ruling at that date. All exchange
rate differences are taken to the income statement.
The principal exchange rates for every unit of foreign currency
ruling at balance sheet date used is as follows:
2007 2006
RM RM
Pound Sterling 6.61 6.93
The opening balances of reserves (excluding the exchange translation reserve and
revaluation reserve) at the year end are translated from Ringgit Malaysia into
Pound Sterling at the rate of exchange at 31 December 2007 of RM1 = 15.13p
(2006: RM1 = 14.43p). The Ringgit Malaysia equivalent of the share capital has
been translated at the equivalent of RM1 = 27.14p. Exchange differences on
translation are dealt with through the exchange translation reserve.
1.14 Revenue
(i) Sale of goods
Revenue from sale of oil palm (fresh fruit bunches) is recognised in
the income statement when delivery has taken place and transfer of risks and
rewards have been completed.
(ii) Interest income
Interest income is recognised in the income statement as it accrues,
taking into account the effective yield on the asset.
1.15 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, balances and deposits
with banks and highly liquid investments which have an insignificant risk of
changes in value.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.16 Use of estimates
The preparation of the financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the reported assets
and liabilities and reported revenue and expenses. Actual results could differ
from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revision to accounting estimates are recognised in the period in which
the estimate is revised and in any future period affected.
The main areas in which estimates are used are fair value of
biological assets and deferred tax. Assumptions regarding the valuation of
biological assets are set out in Note 8.
1.17 Dividends
Equity dividends are recognised when they become legally payable.
In the case of interim dividends to equity shareholders, this is recognised when
paid. In the case of final dividends, this is when approved by the shareholders
at the Annual General Meeting.
1.18 Earnings per share
The Company presents basic earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive potential ordinary
shares including convertible notes and share options granted to employees, if
any.
1.19 Employee Benefits
1.19.1 Short term employee benefits
Wages, salaries, bonuses and social security contributions are
recognised as an expense in the income statement in the period in which the
associated services are rendered by the employees.
Short term accumulating compensated absences such as paid annual leave are
recognised when services are rendered by employees that increase their
entitlement to future compensated absences. Short term non-accumulating
compensated absences such as sick leave are recognised when the absences occur.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.19 Employee Benefits (continued)
1.19.2 Defined contribution plans
The Company makes contributions to a statutory provident fund and
recognises the contributions payable:
(i) after deducting contributions already paid as a liability; and
(ii) as an expense in the financial year in which employees render their
services.
1.20 Cumulative preference shares
The cumulative preference shares are recorded at the amount of proceeds
received, net of transaction costs.
The cumulative preference shares are classified as non-current liabilities in
the balance sheet and the preferential dividends are recognised as finance costs
in profit or loss in the period in which they are incurred.
1.21 Financial assets
The Company classifies its financial assets into one of the following
categories, depending on the purpose for which the asset was acquired. The
Company's accounting policy for each category is as follows:
Fair value through profit or loss:
This category comprises only in-the-money derivatives. They are carried in the
balance sheet at fair value with changes in fair value recognised in the income
statement. The Company does not have any assets held for trading nor does it
voluntarily classify any financial assets as being at fair value through profit
or loss.
Loans and receivables:
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally through
the provision of goods and services to customers (trade receivables), but also
incorporate other types of contractual monetary asset. They are carried at cost
less any provision for impairment.
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
1.22 Financial liabilities
The Company classifies its financial liabilities into one of two categories,
depending on the purpose for which the asset was acquired. The Company's
accounting policy for each category is as follows:
Financial liabilities:
Financial liabilities include the following items:
- Trade payables and other short-term monetary liabilities, which are
recognised at amortised cost.
- Bank borrowings, if any, are initially recognised at the amount
received net of transaction costs. Such interest bearing liabilities are
subsequently measured at amortised cost using the effective interest rate
method, which ensures that any interest expense over the period to repayment is
at a constant rate on the balance of the liability carried in the balance sheet.
Share capital
Financial instruments issued by the Company are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
cumulative preference shares include a contractual obligation on the Company to
deliver cash in the form of the annual preference dividend and, in the absence
of any other terms that would indicate an equity element, have been classified
wholly as a financial liability.
The Company's ordinary shares are classified as equity instruments.
For the purposes of the disclosures given in Note 20, the Company considers its
capital to comprise its ordinary share capital, accumulated retained earnings
and its cumulative preference shares which are classified as a financial
liability in the balance sheet. Neither the foreign exchange reserve nor the
revaluation reserve is considered as capital. There have been no changes in what
the Company considers to be capital since the previous period.
The Company is not subject to any externally imposed capital requirements.
2. REVENUE
Revenue represents amounts delivered in respect of the sale of goods. The
analysis of revenue by activity is as follows:-
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Oil palm (FFB) 7,768,861 1,129,195 6,508,113 939,122
3. FINANCE INCOME
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Interest from short term
deposits 212,528 30,891 226,437 32,675
4. FINANCE COSTS
Finance costs represent dividends on cumulative preference shares as follows:
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Interim: 20% less 27% tax
(2006: 30% less 28% tax) 18,359 2,777 28,702 4,109
Final: Nil (2006: 10%
less 28% tax) - - 9,410 1,358
18,359 2,777 38,112 5,467
5. PROFIT BEFORE TAX
Restated
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Profit before tax is arrived at
after charging:-
Directors' fees 183,125 26,617 249,480 36,000
Depreciation on property,
plant and equipment 88,789 15,631 133,399 19,250
Amortisation of prepaid
lease payments 18,750 2,725 28,125 4,058
Exchange loss 174,928 25,650 8,759 1,264
Auditors' remuneration 111,650 16,228 70,000 10,101
Provision for retirement
benefits 2,386 347 1,113 161
Staff costs (Note 19) 775,930 112,781 1,054,084 152,105
and crediting:-
Profit on disposal of
tangible fixed assets - - 300 43
Exchange gain - - 35,656 5,145
6. TAX EXPENSE
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Malaysian income tax:
- current year 1,471,291 213,851 1,004,982 145,019
- under provision in prior
year 7,941 1,154 - -
Deferred tax for the
year/period (Note 14) - - 103,333 14,911
1,479,232 215,005 1,108,315 159,930
The tax residence of the Company is in Malaysia.
A reconciliation of the Malaysian income tax rate to the effective tax rate of
the Company is as follows:-
% of Profit
Before Taxation
12 months to 18 months to
31.12.2007 31.12.2006
Malaysian income tax rate 27.0 28.0
Increase/(Decrease) resulting from:
Non allowable expenses 1.0 1.8
Non taxable income (12.6) (1.5)
Deferred tax asset not recognised - 3.5
Crystallisation of deferred tax liabilities on
revaluation reserve - (0.2)
Effective tax rate 15.4 31.6
7. EARNINGS PER SHARE
The calculation of basic earnings per share at 31 December 2007 was based on the
profit attributable to ordinary shareholders and a weighted average number of
ordinary shares outstandings calculated as follows:
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Profit for the financial
year/period attributable to
ordinary shareholders 8,856,241 1,317,352 2,692,685 388,587
12 months to 18 months to
31.12.2007 31.12.2006
Weighted average number of ordinary shares of 10p each 13,316,590 13,316,590
Basic and diluted earnings per share (sen) 66.51 sen 20.22 sen
Basic and diluted earnings per share (pence) 9.89p 2.92p
8. BIOLOGICAL ASSETS, PROPERTY, PLANT AND EQUIPMENT
LAND AND
< ---- BUILDINGS ---- >
Freehold
residential
land, Vehicles,
building machinery
Freehold and estate Biological and field
2007 estate building assets equipment Total Total
£ £ £ £ £ RM
At Cost or Valuation
At 1 January 2007 1,535,225 220,573 1,422,928 68,210 3,246,936 22,501,261
Additions - - - 799 799 5,284
Revaluation 580,313 38,290 660,231 - 1,278,834 8,453,100
Disposal - - - - - -
Exchange difference 74,323 8,210 68,886 5,771 157,190 -
At 31 December 2007 2,189,861 267,073 2,152,045 74,780 4,683,759 30,959,645
Representing
items at:
Cost - 66,983 - 74,780 141,763 937,050
Valuation 2,189,861 200,090 2,152,045 - 4,541,996 30,022,595
2,189,861 267,073 2,152,045 74,780 4,683,759 30,959,645
8. BIOLOGICAL ASSETS, PROPERTY, PLANT AND EQUIPMENT (continued)
LAND AND
< ---- BUILDINGS ---- >
Freehold
residential
land, Vehicles,
building machinery
Freehold and estate Biological and field
2007 estate building assets equipment Total Total
£ £ £ £ £ RM
Accumulated
Depreciation
At 1 January 2007 - 27,335 - 44,180 71,515 495,598
Charge for the year - 3,237 - 9,669 12,906 88,789
Revaluation - (4,050) - - (4,050) (26,768)
Disposal - - - - - -
Exchange difference - (313) - 4,303 3,990 -
At 31 December 2007 - 26,209 - 58,152 84,361 557,619
LAND AND
< ---- BUILDINGS ---- >
Freehold
residential
land, Vehicles,
building machinery
Freehold and estate Biological and field
2006 (Restated) estate building assets equipment Total Total
£ £ £ £ £ RM
At Cost or
Valuation
At 1 July 2005 1,548,634 221,128 1,435,355 68,805 3,273,922 22,491,842
Additions - 1,522 - - 1,522 10,549
Disposal - (163) - - (163) (1,130)
Exchange difference (13,409) (1,914) (12,427) (595) (28,345) -
At 31 December 2006 1,535,225 220,573 1,422,928 68,210 3,246,936 22,501,261
Representing
items at:
Cost - 47,413 - 68,210 115,623 801,261
Valuation 1,535,225 173,160 1,422,928 - 3,131,313 21,700,000
1,535,225 220,573 1,422,928 68,210 3,246,936 22,501,261
8. BIOLOGICAL ASSETS, PROPERTY, PLANT AND EQUIPMENT (continued)
LAND AND
< ---- BUILDINGS ---- >
Freehold
residential
land, Vehicles,
building machinery
Freehold and estate Biological and field
2006 (Restated) estate building assets equipment Total Total
£ £ £ £ £ RM
Accumulated
Depreciation
At 1 July 2005 - 22,481 - 30,405 52,886 363,327
Charge for the period - 5,212 - 14,038 19,250 133,402
Disposal - (163) - - (163) (1,130)
Exchange difference - (195) - (263) (458) -
At 31 December 2006 - 27,335 - 44,180 71,515 495,599
LAND AND
< ---- BUILDINGS ---- >
Freehold
residential
land, Vehicles,
building machinery
Freehold and estate Biological and field
estate building assets equipment Total Total
£ £ £ £ £ RM
Net Book Value
At 31 December 2007 2,189,861 240,864 2,152,045 16,628 4,599,398 30,402,026
At 31 December 2006 1,535,225 193,238 1,422,928 24,030 3,175,421 22,005,663
Had the revalued assets been carried at cost less accumulated depreciation, the
net book value would have been included in the financial statements of the
Company as follows:
£ RM
Freehold estate land - cost and net book value
At 31 December 2007 553,089 3,655,920
At 31 December 2006 527,550 3,655,920
8. BIOLOGICAL ASSETS, PROPERTY, PLANT AND EQUIPMENT (continued)
The Company's properties were revalued as follows:-
The freehold estate and the freehold residential land and building were revalued
in November 2007 using the Comparison Method. Recent transactions and asking
prices of similar properties in the locality are analysed for comparison
purposes, adjusted for differences in characteristics to arrive at the market
value.
These valuations were carried out by independent valuers, Messrs Colliers,
Jordan Lee & Jaafar Sdn. Bhd., Chartered Surveyors, in accordance with the
appraisal and valuation manual of The Members' Institution of Surveyors,
Malaysia.
Biological assets comprise oil palm and are stated at fair value less estimated
point of sale costs. The fair value is calculated as the present value of the
estate's operating cash flows over the next ten years, based on Directors' best
estimates of future selling prices of fresh fruit bunches. The major
assumptions underlying the calculation were an assumed average CPO selling price
of RM1,850/mt (2006: RM1,200/mt) and average discount rate of 13.40% (2006: 11%)
based on the Company's Return on Capital Employed.
9. PREPAID LEASE PAYMENT
2007 Prepaid lease payment
RM £
Cost
At 1 January 2007 200,000 28,860
Exchange difference - 1,397
At 31 December 2007 200,000 30,257
Accumulated Amortisation
At 1 January 2007 46,875 6,764
Charge for the period 18,750 2,725
Exchange difference - 439
At 31 December 2007 65,625 9,928
9. PREPAID LEASE PAYMENT (continued)
2006 (Restated) Prepaid lease payment
RM £
Cost
At 1 January 2006 200,000 29,112
Exchange difference - (252)
At 31 December 2006 200,000 28,860
Accumulated Amortisation
At 1 January 2006 18,750 2,729
Charge for the period 28,125 4,058
Exchange difference - (23)
At 31 December 2006 46,875 6,764
Net Book Value
At 31 December 2007 134,375 20,329
At 31 December 2006 153,125 22,096
10. INVESTMENT IN ASSOCIATE
Equity
accounted
investment Loan 2007 2006
RM RM RM RM
Investment in associate
(Unlisted)
At 1 January 2007/
1 July 2005 3,505,665 - 3,505,665 3,216,176
Associate results for the year 725,549 - 725,549 289,489
At 31 December 2007/2006 4,231,214 - 4,231,214 3,505,665
Other investment (Unlisted)
At 1 January 2007/
1 July 2005 - 42,924 42,924 210,719
Repayment - (42,924) (42,924) (167,795)
At 31 December 2007/2006 - - - 42,924
Total investments 4,231,214 - 4,231,214 3,548,589
10. INVESTMENT IN ASSOCIATE (continued)
Equity
accounted
investment Loan 2007 2006
£ £ £ £
Investment in associate
(Unlisted)
At 1 January 2007/
1 July 2005 505,868 - 505,868 468,148
Associate results for the year 109,765 - 109,765 41,773
Exchange adjustments 24,490 - 24,490 (4,053)
At 31 December 2007/2006 640,123 - 640,123 505,868
Other investment (Unlisted)
At 1 January 2007/
1 July 2005 - 6,194 6,194 30,672
Repayment - (6,494) (6,494) (24,213)
Exchange adjustments - 300 300 (265)
At 31 December 2007/2006 - - - 6,194
Total investment 640,123 - 640,123 512,062
Other investment represents loan granted to the associate, which is interest
free and repayable on demand.
The Company holds 33 1/3% (2006: 33 1/3%) of the issued ordinary share
capital of Rivaknar Holdings Sdn. Bhd., a company incorporated in Malaysia,
whose principal activity was an investment holding company. Rivaknar Holdings
Sdn. Bhd. has issued ordinary share capital of 355,200 shares of RM1 each.
10. INVESTMENT IN ASSOCIATE (continued)
Aggregated amounts relating to the associate are as follows:-
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Non current assets 12,659,633 1,915,224 9,720,055 1,402,605
Current assets 1,454,501 220,046 1,071,812 154,663
Total assets 14,114,134 2,135,270 10,791,867 1,557,268
Current liabilities 6,459,050 977,163 3,840,501 554,185
Non current liabilities 436,491 66,035 519,752 75,000
Total liabilities 6,895,541 1,043,198 4,360,253 629,185
Revenue 1,702,574 257,575 1,567,581 226,202
Profit before tax 907,106 137,232 756,954 109,228
Tax expense (181,557) (27,467) (467,465) (67,455)
Profit after tax 725,549 109,765 289,489 41,773
11. TRADE AND OTHER RECEIVABLES
2007 2006
RM £ RM £
Trade receivables 519,851 78,646 332,593 47,993
Other receivables 32,279 4,883 47,110 6,798
Deposits 12,009 1,817 16,942 2,445
Prepayments 16,822 2,545 15,338 2,213
580,961 87,891 411,983 59,449
The carrying amount of trade and other receivables approximates to their fair
value.
12. TRADE AND OTHER PAYABLES
2007 2006
RM £ RM £
Trade payables 12,534 1,896 21,508 3,103
Other payables 54,570 8,256 18,106 2,613
Accruals 462,681 69,997 445,557 64,294
Dividend payable 1,413,643 213,864 - -
1,943,428 294,013 485,171 70,010
The carrying amount of trade and other payables approximates to their fair
value.
13. PROVISION FOR RETIREMENT BENEFITS
2007 2006
RM £ RM £
At 1 January 2007/
1 July 2005 24,058 3,472 27,079 3,941
Exchange adjustments - 168 - (33)
Provision for the year/period 2,386 361 3,845 555
Provision written back - - (2,732) (394)
Payment - - (4,134) (597)
At 31 December 2007/2006 26,444 4,001 24,058 3,472
14. DEFERRED TAX LIABILITIES
2007 2006
RM £ RM £
At 1 January 2007/
1 July 2005 1,054,457 152,158 951,124 138,446
Deferred tax arising from
excess of capital allowances
over corresponding
depreciation - - 110,008 15,874
Crystallisation of deferred
tax arising from revaluation
surplus - - (6,675) (963)
Recognised in income
statement (Note 6) - - 103,333 14,911
Reversal to revaluation
reserve deferred tax originated from
rel
provided on prior years'
revaluation surplus due to
exemption from real
property gains tax (905,909) (137,051) - -
Exchange adjustment - - 7,366 - (1,199)
At 31 December 2007/2006 148,548 22,473 1,054,457 152,158
The components of deferred tax liabilities as at the end of the financial year/
period comprise the tax effect of:
2007 2006
RM £ RM £
Deferred tax liabilities
Excess of capital allowances
over corresponding
depreciation 148,548 22,473 110,008 15,874
Revaluation reserve - - 944,449 136,284
148,548 22,473 1,054,457 152,158
15. CUMULATIVE PREFERENCES SHARES
2007 2006
RM £ RM £
Authorised:
20% cumulative preference
shares of 10p each 84,163 19,024 84,163 19,024
Issued and fully paid up:
20% cumulative preference
shares of 10p each 84,163 19,024 84,163 19,024
The cumulative preference shares have the following rights attached to them:-
(a) The right to a fixed cumulative preference dividend of 20% per annum.
(b) Entitle to the following in preference to holders of ordinary shares
when the Company is wound up:-
(i) repayment of the capital paid up on such shares;
(ii) a premium of 10 pence per share; and
(iii) a sum equivalent to all arrears and accruals of the said fixed
preferential dividend but not entitle to any further right to participate in the
profit or assets of the Company.
(c) Have the right to vote in each of the following circumstances:-
(i) When the dividend or part of the dividend on the shares is in arrears
for more than 6 months;
(ii) On a proposal to reduce the Company's share capital;
(iii) On a proposal to wound up the Company; and
(iv) On a proposal that effect rights attached to the share.
16. SHARE CAPITAL
2007 2006
RM £ RM £
Authorised:
Ordinary shares of 10p each 5,926,562 1,480,976 5,926,562 1,480,976
Issued and fully paid up:
Ordinary shares of 10p each 4,891,969 1,331,659 4,891,969 1,331,659
17. SHARE CAPITAL AND RESERVES
Revaluation
reserve
net of
attributable
deferred tax Retained
Share (Non- profit
capital distributable) (Distributable) Total
RM RM RM RM
At 1 July 2005 4,891,969 17,292,317 6,614,344 28,798,630
Total recognised income and
expenses for the period - - 2,692,685 2,692,685
Dividends (Note 18) - - (1,992,616) (1,992,616)
At 31 December 2006 4,891,969 17,292,317 7,314,413 29,498,699
Total recognised income and
expenses for the year - 5,021,649 8,856,241 13,877,890
Dividends (Note 18) - - (2,448,938) (2,448,938)
At 31 December 2007 4,891,969 22,313,966 13,721,716 40,927,651
17. SHARE CAPITAL AND RESERVES (continued)
Revaluation
reserve
Foreign net of
exchange attributable
reserve deferred tax Retained
Share (Non- (Non- profits
capital distributable) distributable) (Distributable) Total
£ £ £ £ £
At 1 July 2005 1,331,659 (483,419) 2,517,076 819,851 4,185,167
Net deficit arising on
translation of balance
sheet items at
beginning of period
and result of the
period to period-end
exchange rate - (7,225) (21,792) (8,556) (37,573)
Total recognised
income and expenses
for the period - - - 388,587 388,587
Dividends (Note 18) - - - (286,393) (286,393)
At 31 December 2006 1,331,659 (490,644) 2,495,284 913,489 4,249,788
Net surplus/(deficit)
arising on translation
of balance sheet
items at beginning
of period and result of
the year to year-end
exchange rate - (107,220) 120,800 204,742 218,322
Total recognised
income and expenses
for the year - - 759,705 1,317,352 2,077,057
Dividends (Note 18) - - - (359,681) (359,681)
At 31 December 2007 1,331,659 (597,864) 3,375,789 2,075,902 6,185,486
The following describes the nature and purpose of each reserve above:
Reserve Description and purpose
Revaluation Gains and losses arising on the revaluation of the
estates.
Foreign exchange Gains and losses arising on translating the Company's
financial statements from Ringgit Malaysia to Pound Sterling.
Retained profits Cumulative net gains and losses recognised in the
income statement.
18. DIVIDENDS ON EQUITY SHARES
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Dividends on equity shares:
Ordinary dividends:
Interim: 10% less 27% tax
(2006: 15% less 28% tax) 642,565 97,211 1,004,578 143,819
Special: 12% less 27% tax 771,077 116,653 - -
Final: 10% less 27% tax
(2006: 10% less 28% tax) 690,198 97,211 658,692 95,049
Special: 5% less 27% tax
(2006: 5% less 28% tax) 345,098 48,606 329,346 47,525
2,448,938 359,681 1,992,616 286,393
As proposed in the previous financial year, a final dividend of 10% less tax
amounted to RM690,198 and a special dividend of 5% less tax amounted to
RM345,098 for the financial year ended 31 December 2006 were approved by the
shareholders at the Annual General Meeting held on 21 June 2007. These
dividends were paid on 27 July 2007.
The directors do not propose the payment of any final dividend for the current
financial year.
19. STAFF COSTS
The breakdown of the aggregate staff costs is as follows:-
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Wages and salaries 741,944 107,841 1,005,341 145,071
Contributions to defined
contribution plan 28,424 4,131 43,168 6,229
Social security costs 3,176 462 4,462 644
Retirement benefits 2,386 347 1,113 161
775,930 112,781 1,054,084 152,105
19. STAFF COSTS (continued)
Directors' and key management personnel remuneration
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the
Company. The executive director was considered to be the key management
personnel until the expiration of his service contract on 30 June 2007. Since
then, the Acting General Manager has assumed the role of key management
personnel under the supervision of the Board of Directors.
12 months to 18 months to
31.12.2007 31.12.2006
RM £ RM £
Salary and bonus 49,000 7,122 78,000 11,255
Contributions to defined
contribution plan 7,350 1,068 11,700 1,688
56,350 8,190 89,700 12,943
20. FINANCIAL INSTRUMENTS
In common with all other businesses, the Company is exposed to risks that arise
from its use of financial instruments. This note describes the Company's
objectives, policies and processes for managing those risks and the methods used
to measure them.
There have been no substantive changes in the Company's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless otherwise
stated in this note.
Principal financial instruments
The principal financial instruments used by the Company, from which financial
instrument risk arises, are as follows:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
• Cumulative preference shares
All financial assets are designated as loans and receivables and all financial
liabilities are measured at amortised cost, as shown in the table below:
20. FINANCIAL INSTRUMENTS (continued)
Principal financial instruments (continued)
Financial liabilities
Loans and receivables measured at amortised cost
2007 2006 2007 2006
RM £ RM £ RM £ RM £
Current
financial
assets
Trade and other
receivables 564,139 85,346 396,645 57,236 - - - -
Cash and cash
equivalents 8,092,424 1,224,270 5,051,544 80,528 - - - -
Current
financial
liabilities
Trade and other
payables - - - - 1,943,428 294,013 485,171 70,010
Non-current
financial
liability
Cumulative
preference - - - - 84,163 19,024 84,163 19,024
shares
Total 8,656,563 1,309,616 5,448,189 137,764 2,027,591 313,037 569,334 89,034
20. FINANCIAL INSTRUMENTS (continued)
Fair Value
There is no material difference between the book values and fair values of the
Company's financial assets and liabilities as at 31 December 2007 and 2006 due
to their short term maturity.
General objectives, policies and procedures
The Board has overall responsibility for the determination of the Company's risk
management objectives and policies. The overall objective of the Board is to set
policies that seek to reduce risk as far as possible without unduly affecting
the Company's competitiveness and flexibility. Further details regarding these
policies are set out below:
Interest Rate Risk
The Company's only exposure to interest rate fluctuation is short term
placements with financial institutions that attract interest income. However,
the fluctuation in interest rates, if any, is not expected to have a material
impact on the financial performance of the Company. The effective interest rate
of deposits at the balance sheet date was 3.2% (2006: 3.2%).
The interest profile of the Company's financial assets and financial liabilities
are as follows:-
2007 2006
RM £ RM £
Financial Assets
Fixed rate
Short term deposits 7,575,741 1,146,103 4,493,483 648,410
Floating rate
Cash and bank balances 516,683 78,167 558,061 80,528
Interest free
Trade and other receivables 564,139 85,346 396,645 57,236
Financial Liabilities
Fixed rate
Cumulative preference
shares 84,163 19,024 84,163 19,024
Interest free
Trade and other payables 1,943,428 294,013 485,171 70,010
20. FINANCIAL INSTRUMENTS (continued)
Credit Risk
Credit risk arises principally from the Company's trade receivable.
Although the Company has only one customer, the credit risk is considered
minimal as the customer is usually prompt in making payments.
As such the maximum exposure to credit risk in the event that the counterparty
fails to perform its obligation as at the end of the financial year in relation
to trade receivables is the carrying amount of trade receivables as stated in
the balance sheet as at the end of the financial year.
Liquidity Risk
Liquidity risk arises from the Company's management of working capital. It is
the risk that the Company will encounter difficulty in meeting its financial
obligations as they fall due.
The Company's policy in respect of liquidity is to ensure sufficient cash
resources are maintained to meet short-term liabilities. The Company's liquidity
risk is minimal as it maintains adequate funds to meet its obligations as and
when they fall due.
The Company has no bank borrowings.
The only significant financial asset the Company has is cash at bank. Cash is
held either on current or on short term deposits at both fixed and floating
rates of interest determined by the relevant banks' prevailing base rate. Part
of the cash at bank is held in Pound Sterling accounts.
Currency Risk
The Company is exposed to currency risk as a result of the foreign currency
transactions entered into in currencies other than Ringgit Malaysia. The
Company's policy is to limit its exposure to currency risk by settlement of its
foreign currency transactions denominated in Pound Sterling by using the funds
from its bank accounts maintained in Pound Sterling.
The table below shows the Company's currency exposures that give rise to the net
currency gains and losses recognised in the income statement. Such exposures
comprise the financial assets and financial liabilities of the Company that are
not denominated in the functional currency of the Company.
20. FINANCIAL INSTRUMENTS (continued)
Currency Risk (continued)
As at 31 December 2007, these exposures were as follows:
Net foreign currency financial assets
Financial assets Financial liabilities
RM £ RM £
Pound Sterling 3,668,501 554,993 3,445,088 497,126
The above foreign currency exposures arise from the Company's cash maintained in
Pound Sterling bank accounts.
Capital
As described in Note 1.22, the Company considers its capital to comprise its
ordinary share capital, accumulated retained earnings and its cumulative
preference shares which are classified as a financial liability in the balance
sheet.
In managing its capital, the Company's primary objective is to ensure its
continued ability to provide a consistent return for its equity shareholders
through a combination of capital growth and distributions and through the
payment of annual preference dividends to its preference shareholders. In order
to achieve this objective, the Company seeks to balance risks and returns at an
acceptable level and also to maintain a sufficient funding base to enable the
Company to meet its working capital and strategic investment needs. In making
decisions to adjust its capital structure to achieve these aims, the Company
considers not only its short-term position but also its long-term operational
and strategic objectives.
There have been no other significant changes to the Company's capital management
objectives, policies and processes in the year nor has there been any change in
what the Company considers to be its capital.
The total amount of capital is as follows:
2007 2006
RM £ RM £
Ordinary share capital 4,891,969 1,331,659 4,891,969 1,331,659
Retained earnings 13,721,716 2,075,902 7,314,413 913,489
Cumulative preference shares 84,163 19,024 84,163 19,024
18,697,848 3,426,585 12,290,545 2,264,172
21. RELATED PARTY TRANSACTIONS
Other related party transactions are as follows:
Transaction amount
Related Type of 12 months to 18 months to Amount owing
(to)/by
party
Party relationship transaction 31.12.2007 31.12.2006 2007 2006
RM £ RM £ RM £ RM £
Riverview A company
Rubber
Estates with
Berhad
significant Interest-free
influence advances
over
the Company received 87,780 12,759 118,218 17,208 - - - -
(Loan
Rivaknar repayment)/
Holdings Interest-free
Sdn. Bhd. Associate loan granted (42,924) (6,494) - - - - 42,924 6,194
22. SEGMENT INFORMATION
The Company operates in the agricultural segment in Malaysia. All its
oil palm is produced and sold in Malaysia. The relevant financial information
has been appropriately presented in these financial statements.
23. ULTIMATE CONTROLLING SHAREHOLDER
At 31 December 2007, Riverview Rubber Estates Berhad, a company
incorporated in Malaysia, held 6,632,340 (2006: 6,632,340) shares of the
Company, representing 49.8% (2006: 49.8%) of the issued share capital of the
Company. Mr William John Huntsman and Mr Stephen William Huntsman, directors of
the Company, have advised the Company that they are the controlling shareholders
of Riverview Rubber Estates Berhad.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
ADDITIONAL EXPLANATORY NOTES
FINANCIAL PERFORMANCE
12 months 12 months 18 months 12 months 12 months 18 months
to to to to to to
31.12.2007 31.12.2006 31.12.2006 31.12.2007 31.12.2006 31.12.2006
RM RM RM £ £ £
Revenue 7,768,861 4,506,801 6,508,113 1,129,195 650,332 939,122
Cost of sales (1,897,879) (1,679,195) (2,503,405) (275,855) (242,308) (361,242)
Gross profit 5,870,982 2,827,606 4,004,708 853,340 408,024 577,880
Gain arising from
revaluation of
biological asset
4,364,128 - - 660,231 - -
Profit before tax
10,335,473 2,524,510 3,801,000 1,532,357 364,287 548,517
Earnings per
share
66.51 sen 13.41 sen 20.22 sen 9.89 p 1.93 p 2.92 p
For the financial year ended 31 December 2007, the Company registered a turnover
of RM7,768,861 (£1,129,195), an increase of 72.4% compared with the financial
period of 12 months for Year 2006. Operating profit was higher mainly due to
the increase in commodity prices. The Company recorded a gain arising from
revaluation of biological asset of RM4,364,128 (£660,231) based on the valuation
carried out by independent valuers, Messrs Colliers, Jordan Lee & Jaafar Sdn.
Bhd., Chartered Surveyors. The Company achieved a profit on ordinary activities
before tax of RM10,335,473 (£1,532,357) for the current financial year as
compared to the amount of RM2,524,510 (£364,287) for the previous 12 months
financial period.
Earnings per share improved from 20.22 sen (2.92 pence) for the 18 months period
ended 31 December 2006 to 66.51 sen (9.89 pence) for the year ended 31 December
2007.
THE NARBOROUGH PLANTATIONS, plc (109273)
(Incorporated in England)
REVIEW OF OPERATIONS
The year witnessed an improvement in commodity price for palm oil. With the
estate now fully matured, there was no replanting expenditure incurred.
This financial year saw a further increase in the price of crude palm oil (CPO).
'The firmness in prices was influenced by the structural changes in the global
oil and fats supply and demand and the increase in crude oil price. The average
CPO price increased by 67.5% or RM1,020.00 to RM2,530.50 in 2007 against
RM1,510.50 in the previous year. Prices were traded in a narrow range during
the first three (3) months of 2007 and subsequently, higher for the remaining
months of the year. The lowest and highest monthly average price recorded was
in February and November of RM1,927.00 and RM2,965.00 respectively.'* The
performance of the CPO prices was reflected in the related price of FFB. The
crop production ratio has declined marginally by an average 0.31% in both
established and newly matured fields as compared to the previous 12 months
period. The decline was mainly seasonal in nature. Overall, the Company's
operational profits, excluding gain arising from revaluation of biological
assets, increased by 128.5% in the current financial year as compared to the 12
months period of the previous financial year.
(* Source: Malaysian Palm Oil Board)
CURRENT YEAR'S PROSPECTS
Crop will be expected to increase in the foreseeable future, as maturing plants
have entered their prime production years. With no further replanting planned
for the next few years, the plantation will enter a period of increasing
production and falling costs. Given favourable weather, higher productivity,
reasonable CPO price and cost efficiency, the Company should see another
profitable year.
DIVIDEND
The Board do not recommend a payment of final dividend for the current financial
year.
An Interim Dividend of RM642,565 (2006: RM1,004,578) and a Special Dividend of
RM771,077 (2006: NIL) for the year ended 31 December 2007 was paid on 15 January
2008.
By Order of the Board
Adrian Tsen Keng Yam
Secretary
28 March 2008
Ipoh
This information is provided by RNS
The company news service from the London Stock Exchange