Hidong Est. Regulatory News (HID)

28 Sep 2007 17:17

Hidong Estate PLC28 September 2007 Hidong Estate PLC Notice of AGM and Annual report and accounts for the year to 31 March 2007 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the EIGHTY FOURTH ANNUAL GENERAL MEETING of theCompany will be held at the head office of the Company, Standard Chartered BankChambers, Beach Street, 10300 Penang, Malaysia on 30th October 2007 at 10:30 amfor the following purposes:- 1. To receive and consider the financial statements and the reports of the directors and auditors thereon for the year ended 31st March 2007. 2. To re-elect Tuan Haji Zambri bin Haji Mahmud who retires in accordance with article 108 of the Company's Articles of Association. 3. To consider and if thought fit, pass the following Ordinary Resolution:- "That pursuant to section 293(5) of the Company Act 1985, special notice havingbeen given, Mr. Diong Chin Teck, aged 74, be re-appointed as Director of theCompany to hold office until the next Annual General Meeting of the Company." 4. To appoint the auditors and to authorize the directors to fix their remuneration. Ordinary Resolution:- "That KPMG Audit Plc be and is hereby appointed auditors of the Company to holdoffice from the conclusion of this meeting until the conclusion of the nextgeneral meeting at which financial statements are laid before the Company, andthat their remuneration be fixed by the Directors." 5. To approve the Directors' Remuneration Report Ordinary Resolution:- "That the Directors' Remuneration Report for the year ended 31st March 2007 beand is hereby approved." By order of the Board GRACE SMITHSecretary Penang28th September 2007 Notes 1. A member entitled to attend and vote at the meeting is entitled toappoint one or more proxies to attend and vote instead of him. A proxy need notbe a member of the Company. A form of proxy is enclosed for your completion andreturn. 2. A statement of all transactions of each director and, whereapplicable, of his family in the share capital of the Company will be availableat the head office of the Company on any weekday during normal business hoursfrom the date of this notice until the conclusion of the annual general meeting.There are no service contracts in existence with the directors. 3. Biographical details of the directors presenting themselves forre-election and re-appointment are set out on the following page. The Board hasreviewed the performance of each individual director, including the directorspresenting themselves for re-election and re-appointment, and concluded thateach director has performed effectively and continues to demonstrate commitmentto the role. Corporate Information DIRECTORSChew Sing Guan (Chairman)An executive director and chairman of the Company since 1983. A non-executivedirector of the managing agents and Malaysian registrars, Plantation AgenciesSdn. Berhad. Age 57. Tuan Haji Zambri bin Haji MahmudA non-executive director of the Company since 1986. A director of severalprivate limited companies involved in palm oil milling. Age 68. Diong Chin TeckA non-executive director of the Company since 2000. A director of several publiclimited companies, a few of which are quoted. Age 74. Chew Beow SoonA non-executive director of the Company since 2000. A director of severalprivate limited companies. Age 58. AUDIT COMMITTEETuan Haji Zambri bin Haji Mahmud (Chairman)Chew Beow Soon (Member)Diong Chin Teck (Member) COMPANY SECRETARYGrace Smith HEAD OFFICE, MANAGING AGENTS AND MALAYSIAN REGISTRARSPlantation Agencies Sdn. BerhadStandard Chartered Bank ChambersBeach StreetP.O.Box 70610790 Penang, Malaysia REGISTERED OFFICE34 Beckenham RoadBeckenham, Kent BR3 4TU U.K. REGISTRARSCAPITA IRG Plc34 Beckenham RoadBeckenham, Kent BR3 4TU AUDITORSKPMG Audit Plc8 Salisbury SquareLondon EC4Y 8BB LISTINGLondon Stock Exchange Chairman's Statement On behalf of the Board of Directors of Hidong Estate Plc, I am pleased topresent to you the Annual Report and Audited Financial Statements of the Companyfor the financial year ended 31st March 2007. For the financial year ended 31st March 2007 the Company recorded a revenue ofRM42,424 and a loss before tax of RM65,484 as compared to a revenue ofRM1,740,941 and a profit before tax of RM8,534,023 in prior year and largelyattributable to the disposal of the company's plantation. The revenue has alsodropped as the Company is left without a core business after the disposal of itsoil palm and rubber plantation together with its immovable plant. As announced earlier the Company's assets after the disposal of the plantationand its other plant and equipment now comprise of cash and bank deposits, all ofwhich earn interest. Following the disposal our Board has been activelyidentifying suitable investments that would provide sustainable growth andcreate better value for the shareholders in the long term. As such the directorsare of the opinion that until a new suitable investment has been identified, itwould be in the best interest of the Company to retain its cash reserves for thetime being in the event a cash need arises once a suitable investment isidentified. On behalf of the Board, once again I would like to express my sincereappreciation to the management and all our employees for their efforts,dedication and commitment. I would also like to take this opportunity to thankmy fellow directors for their co-operation and inputs, and shareholders fortheir faith and continued support. CHEW SING GUAN Chairman Penang26th September 2007 Report of the directors The directors present their eighty fourth report and financial statements of theCompany for the financial year ended 31st March 2007. PRINCIPAL ACTIVITIES AND REVIEW OF DEVELOPMENT OF BUSINESSThe principal activities of the Company which were in the production of naturalrubber and oil palm fresh fruit bunches had ceased when the Company sold itsland and plantations in the previous year. Since then, the Board are activelyidentifying suitable investments for the Company. The Company made a loss of RM135,484 after tax in the current year. This ismainly due to expenses amounting to RM129,135 incurred in the current financialyear relating to the sale of the plantation and the provision of allowance fordoubtful debts of RM42,045. PRINCIPLE RISKS AND UNCERTAINTIESThe Company's assets after the disposal of the plantation and its other plantand equipment comprise of cash and bank deposits all of which earn interest. Thefinancial risks involved are minimal and can be found in Note 15 to thefinancial statements. RESULTS AND DIVIDENDThe Company made a loss after taxation of RM135,484 for the year compared to aprofit of RM7,961,588 in the previous year. No dividend is proposed (2006: RMNil) DIRECTORATEThe names of the directors who held office during the year together with briefbiographical details are shown on page 2. In accordance with article 108 of theCompany's Articles of Association, Tuan Haji Zambri bin Haji Mahmud will retireby rotation at the forthcoming annual general meeting and, being eligible,offers himself for re-election. The directors do not have any service contract with the Company. Mr. Chew SingGuan is a non-executive director of Plantation Agencies Sdn. Berhad who acted asthe Malaysian Registrars and an agent to the Company in Malaysia. DIRECTORS' INTERESTThe directors who held office at end of the financial year had the followinginterests in the ordinary shares of the Company. Number of Ordinary Shares of 10p each At 31st March, 2007 Beneficially Owned Non-Beneficially Owned Chew Sing Guan Nil 799,986 Tuan Haji Zambri bin Haji Mahmud Nil 1,000 Diong Chin Teck Nil 1,000 Chew Beow Soon Nil 1,000 At 31st March, 2006 Beneficially Owned Non-Beneficially Ownedhew Sing Guan Nil 799,986 Tuan Haji Zambri bin Haji Mahmud Nil 1,000 Diong Chin Teck Nil 1,000 Chew Beow Soon Nil 1,000 The Company has not received notification of any change in the aboveshareholdings between 1st April, 2007 and the date of this report. No directors had any interest either during or at the end of the year in anymaterial contract or arrangement with the Company except as disclosed in note 16to the financial statements. According to the register of directors' interest,no right to subscribe for shares in or debentures of the Company were granted toany of the directors or their immediate families, or exercised by them, duringthe financial year. SUBSTANTIAL SHAREHOLDINGSAt the date of this report, substantial interest in the share capital of theCompany, notified to the Company, were as follows:- No. of Ordinary Shares of 10p each %Malayan Securities Trust Sdn 798,986 46.63BerhadThomas William George Charlton 231,997 13.54Flairshare Limited 132,000 7.70The Temerloh Rubber Estates Berhad 88,442 5.16 Mr. Chew Sing Guan has notified an interest in the shares held by MalayanSecurities Trust Sdn. Berhad. The directors are not aware of any otherbeneficial holding of 3% or more in the share capital of the Company. PAYMENT TO SUPPLIERSThe Company does not follow any code or standard on payment practice. TheCompany's policy, in relation to all of its suppliers, is to make settlementaccording to the terms of payment agreed at the commencement of business withthat supplier provided that the supplier has complied with the terms andconditions of the supply agreement. TAXATIONThe Company is tax resident in Malaysia. CORPORATE GOVERNANCEThe Board of Hidong Estate Plc supports and will strive to maintain compliancewith the principles of corporate governance advocated by the revised CombinedCode on Corporate Governance issued by the Financial Reporting Council in July2003 (the Code). Internal AuditThe need of an internal audit has been reviewed by the directors. It was decidedthat the current size of the Company combined with the tight financial andmanagement control exercised by the directors on a day to day basis negates sucha need. The policy will be kept under review. External AuditorsThe Audit Committee assesses annually the effectiveness of the external auditprocess and has primary responsibility for making recommendation on theappointment, re-appointment or removal of the external auditors. The external auditors did not provide any non audit services in the year. DirectorsThe directors carry out their duties in a manner that will safeguard theshareholders' interests at all times. They are responsible for ensuring soundmanagement of the Company and effective implementation and execution of itspolicies decisions and business strategies towards ensuring a successfulcontinuity of the business. The Board ordinarily meets four times a year. During the year ended 31st March2007 the Board met on three occasions. Details of the directors' attendance atBoard meetings during the financial year are as follows: Attendance Chew Sing Guan 3/3Tuan Haji Zambri bin Haji Mahmud 3/3Diong Chin Teck 3/3Chew Beow Soon 3/3 The Board is guided by a formal schedule of matters specifically reserved to itfor decision which includes future strategy, key business policies, materialacquisitions and disposals, approval of interim financial statements,preliminary results and annual reports and financial statements. Directors havefull and timely access to information and Board papers and reports relevant tothe issues of meetings are circulated to Board members in advance of themeetings. Procedures are in place for directors to take independent professionaladvice in furtherance of their duties, if necessary, at the Company's expense.In addition, all directors have direct access to the advice and services of theCompany Secretary. The Board consists of the executive Chairman, Mr. Chew Sing Guan and threeindependent non-executive directors namely Tuan Haji Zambri bin Haji Mahmud, Mr.Diong Chin Teck and Mr. Chew Beow Soon. Although Tuan Haji Zambri bin HajiMahmud has been a non-executive director for more than ten years, the Board issatisfied that he has continued to demonstrate his independence in terms ofcharacter and judgment. It is the Board's view that for a Company of this sizeit is not deemed necessary to separate the posts of chairman and chief executiveofficer. Furthermore the Board is of the opinion that there is a strongindependent element within the Board in the form of the three independentnon-executive directors who provide a check and balance in the Board on decisionmaking. For the same reasons, the Board is also of the view that it is notdeemed necessary to appoint a senior independent director or to form aNomination Committee. The Board is assisted by professionals (Managing Agents)who reports periodically to it. Important business matters are submitted to theBoard for decision. In accordance with the Articles of Association of the Company, all directors aresubject to election by shareholders at the first Annual General Meeting aftertheir appointment and thereafter subject for re-election at least once everythree years. The Board has always complied with this requirement. In addition,Directors over seventy years of age are required to submit themselves forre-appointment annually in accordance with Section 293(5) of the Companies Act,1985. The Board has chosen not to adopt the additional provision in the Codethat non-executive directors who have served for more than nine years should besubject to annual re-election since the existing practice, which complies withCompany law and the Articles, works well. The directors received only a nominal fee for their services and there is nointention to change the way they are remunerated. Accordingly, the formation ofa Remuneration Committee is not deemed to be necessary. The Board has commenced a self-evaluation process for the performance evaluationof the Board, the Audit Committee and its individual directors. The assessmentof the individual directors on the performance of the Board and the AuditCommittee are collated for the Chairman's review and presented to the entireBoard. Each director also assesses the individual performance of the otherdirectors and the results are presented to the Chairman who then holdsdiscussions with all the individual directors regarding their effectiveness. Theperformance of the Chairman is assessed collectively by the non-executivedirectors. Relations with shareholdersThe Board has through the years used the Annual Report and the Annual GeneralMeeting to communicate with its shareholders. It is always ready to holddialogues with interested investors to improve the Company's businessactivities. Audit CommitteeThe Audit Committee comprises three independent non-executive directors namelyTuan Haji Zambri bin Haji Mahmud (Chairman), Mr. Diong Chin Teck and Mr. ChewBeow Soon. The Audit Committee is responsible for reviewing the Company's risk management,internal control and audit processes. The Audit Committee assists the Board inseeking to ensure that the financial and non-financial information supplied tothe Board and shareholders presents a balanced assessment of the Company'sposition. The Committee is authorised by the Board to investigate any activitywithin its terms of reference. It is authorised to seek any information itrequires from any employee and all employees are directed to co-operate with anyrequest made by the Committee. The Committee is authorised by the Board to obtain outside legal or otherindependent professional advice and to secure the attendance of outsiders withrelevant experience and expertise it considers necessary. During the financial year ended 31 March 2007, the Audit Committee met threetimes and the attendances of the members of the Committee are as follows: Attendance Tuan Haji Zambri bin Haji Mahmud 3/3Diong Chin Teck 3/3Chew Beow Soon 3/3 During the year the Audit Committee assisted the Board in reviewing the periodicoperational and financial reports submitted by the Managing Agents. As part ofits function, the Audit Committee reviewed the half-yearly interim report toshareholders, preliminary final results and annual financial statements andannouncements before submitting the same to the Board for approval. The AuditCommittee also assisted the Board to review the system of internal control putin place by the Managing Agents to manage the operations of the Company. The terms of reference of the Audit Committee are available upon request at theHead Office of the Company. Internal ControlsThe Board is responsible for the Company's system of internal control and forreviewing its effectiveness, which it does on an annual basis. Such a system isdesigned to manage rather than eliminate the risk of failure to achieve businessobjectives and can provide only reasonable, but not absolute, assurance againstmaterial misstatement or loss. There is a continuous process for identifying,evaluating and managing the significant risks faced by the Company. This processwas in place throughout the year under review and up to the date of approval ofthe annual report. The Board confirms that they have established procedures toprovide internal control necessary to implement the guidance issued by theTurnbull committee. The key procedures of the Company's internal controls are as follows: • Risk assessmentThe Board is responsible for the identification, evaluation and review of risksfacing the business. Such risks are reviewed on a continuous basis and arecarried out as part of the monthly reporting and annual budgeting cycles. • Control environment and control activities The day-to-day operation of the system of internal controls is delegated to theManaging Agents. The management and control procedures cover issues such asphysical controls, segregation of duties, authorisation levels and comprehensivefinancial and operational reporting systems. Such procedures are documented foreffective control and monitoring. • Information and communication The Board holds periodic formal and informal discussions on the Company'saffairs where all important business decisions are formally discussed anddocumented. The Board holds periodic board meetings to formally approve thefinancial reports submitted by the Managing Agents. DISCLOSURE OF INFORMATION TO AUDITORSThe directors who held office at the date of approval of this directors' reportconfirm that, so far as they are each aware, there is no relevant auditinformation of which the Company's auditors are unaware and each directors hastaken all the steps that they ought to have taken as a directors to makethemselves aware of any relevant audit information and to establish that theCompany's auditors are aware of that information. GOING CONCERNHaving undertaken all the appropriate procedures and assessing the performanceand results, there is reasonable expectation that the Company will continue inoperational existence for the foreseeable future and the Board has thereforecontinued to adopt the going concern basis in preparing the financialstatements. AUDITORSKPMG Audit Plc have expressed their willingness to continue in office. Inaccordance with Section 384 of the Companies Act, 1985, a resolution for there-appointment of KPMG Audit Plc is to be proposed at the forthcoming annualgeneral meeting. CHEW SING GUAN TUAN HAJI ZAMBRI BIN HAJI MAHMUDChairman Director Penang26th September 2007 Directors' Remuneration ReportThis report has been prepared in accordance with the Directors' RemunerationReport Regulation 2002. The report also meets the relevant requirement of theListing Rules of the Financial Services Authority. As required by theRegulations, a resolution to approve the report will be proposed at the AnnualGeneral Meeting of the Company at which the financial statements will beapproved. The regulations require the auditors to report to the Company's members on the"auditable part" of the Directors' remuneration. The report has therefore beendivided into 2 sections for audited and unaudited information. Unaudited Information Remuneration PolicyIn accordance with the Company's Memorandum and Articles of Association, thedirectors received only a nominal fee for their services. The fees paid to thedirectors are not linked to performance and the Company has no intention tochange the way the directors are remunerated in the future. Share OptionsAs at 31st March 2007, no options were granted to the directors to subscribe forany shares in the Company. Service contractsThere are no service contracts in existence with the directors as they receivedonly a nominal fee for their services. The Company's performance, measured by total shareholder return, has been compared with the performance of the FTSE Small Cap Index, also measuredby total shareholder return. This index has been selected for the comparisonbecause it reflects the market sector in which the Company is reported. Audited information Aggregate Directors' remunerationThe total amounts for Directors' remuneration are as follows: Emoluments 2007 2006 RM RM 5,668 6,947 ============== ============Directors' emoluments - fee 2007 2006 RM RMExecutive DirectorChew Sing Guan 1,618 1,985Non - executive DirectorsTuan Haji Zambri bin Haji Mahmud 1,350 1,654Diong Chin Teck 1,350 1,654Chew Beow Soon 1,350 1,654 -------------- ------------ 5,668 6,947 ============== ============ Approval This report was approved by the Board of Directors on 26th September 2007 andsigned on its behalf: Chew Sing GuanChairman Statement of directors' responsibilities in respect of the Report and the financial statements The directors are responsible for preparing the Report and the financialstatements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the Directors have elected to prepare thefinancial statements in accordance with UK Generally Accepted AccountingPractice. The financial statements are required by the law to give a true and fair view ofthe state of the affairs of the Company and of the profit or loss for thatperiod. In preparing these financial statements, the directors are required to:o Select suitable accounting policies and then apply them consistently;o Make judgments and estimates that are reasonable and prudent;o State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; ando Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping proper accounting records thatdisclose with reasonable accuracy at any time the financial position of theCompany and enable them to ensure that the financial statements comply with theCompanies Act, 1985. They have a general responsibility for taking such steps asare reasonably open to them to safeguard the assets of the Company and toprevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible forpreparing a Directors Report, Directors' Remuneration Report and CorporateGovernance Statement that comply with that law and those regulations.Legislation in the UK governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions. Independent auditors' reportto the members of Hidong Estate Plc We have audited the financial statements of Hidong Estate Plc for the year ended31 March 2007 which comprise the Profit and Loss Account, the Balance Sheet, theCash Flow Statement, the Reconciliation of Movements in Shareholder Funds andthe related notes. These financial statements have been prepared under theaccounting policies set out therein. We have also audited the information in theDirectors' Remuneration Report that is described as being audited. This report is made solely to the Company's members, as a body, in accordancewith section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the Company's members those matters we are required tostate to them in an auditor's report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the Company and the Company's members as a body, for our audit work,for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors The directors' responsibilities for preparing the Annual Report and thefinancial statements and the Directors' Remuneration Report in accordance withapplicable law and UK Accounting Standards (UK Generally Accepted AccountingPractice) are set out in the Statement of the Directors' Responsibilities onPage 13. Our responsibilities is to audit the financial statements and the part of theDirectors' Remuneration Report to be audited in accordance with relevant legaland regulatory requirements and International Standards on Auditing (UK andIreland). We report to you our opinion as to whether the financial statements give a trueand fair view and whether the financial statements and the part of theDirectors' Remuneration Report to be audited have been properly prepared inaccordance with the Companies Act, 1985. We also report to you whether in ouropinion the information given in the Directors' Report is consistent with thefinancial statements. We also report to you if, in our opinion, the Company hasnot kept proper accounting records, if we have not received all the informationand explanations we require for our audit, or if information specified by lawregarding directors' remuneration and other transactions is not disclosed. We review whether the statement on pages 5 to 10 reflects the Company'scompliance with the nine provisions of the 2003 FRC Combined Code specified forour review by the Listing Rules of the Financial Services Authority and wereport if it does not. We are not required to consider whether the Board'sstatements on internal control cover all risks and controls, or form an opinionon the effectiveness of the Company's corporate governance procedures or itsrisk and control procedures. We read the other information contained in the Directors' Report and considerwhether it is consistent with the audited financial statements. We consider theimplication for our report if we become aware of any apparent misstatements ormaterial inconsistencies with the financial statements. Our responsibilities donot extend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements and the part of the Directors'Remuneration Report to be audited. It also includes an assessment of thesignificant estimates and judgments made by the directors in the preparation ofthe financial statements, and of whether the accounting policies are appropriateto the Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsand the part of the Directors' Remuneration Report to be audited are free frommaterial misstatement whether caused by fraud or other irregularity or error. Informing our opinion we also evaluated the overall adequacy of the presentationof information in the financial statements. Opinion In our opinion: •The financial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the state of the Company's affairs as at 31 March 2007 and of its loss for the year then ended; •The financial statements and the part of the Directors' Remuneration Report to be audited have been properly prepared in accordance with the Company Act 1985; and •The information given in the Directors' Report is consistent with the financial statements. KPMG Audit Plc 8 Salisbury SquareChartered Accountants LondonRegistered Auditor EC4Y 8BB 26th September 2007 Profit and loss account for the year ended 31st March 2007 2007 2006 Note RM RMTurnover - discontinued operations 2 42,424 1,740,941Cost of sales (33,486) (1,245,907) --------- ---------Gross profit 8,938 495,034Distribution costs (109) (85,199)Administrative expenses (422,239) (228,719)Other income - 16,571 --------- ---------Operating (loss)/profit - discontinued operations (413,410) 197,687 Profit on sale of plantations - 8,260,363Interest receivable on short term deposits 347,926 75,973 --------- ---------(Loss)/profit on ordinary activities beforetaxation 3 (65,484) 8,534,023Tax on profit on ordinary activities 4 (70,000) (572,435) --------- ---------(Loss)/retained profit for the year 10 (135,484) 7,961,588 ========= =========Basic and diluted (loss)/profit per 10p share -discontinued operations 5 (7.91)sen 464.68sen ========= ========= A note on historical gains and losses has not been included as part of thefinancial statements as the results as disclosed in the profit and loss areprepared on an unmodified historical cost basis. The notes below form part of these financial statements. Balance Sheet as at 31st March 2007 2007 2006 Note RM RMCURRENT ASSETS --------- ---------Stocks 6 - 41,032Debtors 7 131,753 218,203Cash at bank and in hand 13 10,635,755 10,944,672 ---------- ---------- 10,767,508 11,203,907 ---------- ----------CREDITORS: amounts falling due within one 8 (587,812) (888,727)year --------- ---------- NET ASSETS 10,179,696 10,315,180 ========== ==========CAPITAL AND RESERVESCalled up share capital 9 1,067,846 1,067,846Profit and loss account 10 9,111,850 9,247,334 ---------- ----------SHAREHOLDERS' FUNDS 10,179,696 10,315,180 ========== ========== These financial statements were approved by the Board of Directors on 26thSeptember 2007. CHEW SING GUAN TUAN HAJI ZAMBRI BIN HAJI MAHMUDDirectors The notes on pages below form part of these financial statements. Statement of total recognised gains and losses for the year ended 31st March2007 2007 2006 RM RM (Loss)/profit for the financial year (135,484) 7,961,588 Realised surplus on revaluation of properties - (5,832,048) ---------- ----------Total recognised gains and losses relating to thefinancial year (135,484) 2,129,540 ========== ========== Reconciliation of movements in shareholders' funds for the year ended 31st March2007 2007 2006 RM RM(Loss)/retained profit for the year (135,484) 2,129,540Opening shareholders' funds 10,315,180 8,185,640 ---------- ----------Closing shareholders' funds 10,179,696 10,315,180 ========== ========== The notes below form part of these financial statements. Cash flow statement for the year ended 31st March 2007 2007 2006 Note RM RMNET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 11 (579,532) 71,466RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 347,926 75,973TAXATION Overseas tax paid (77,311) (80,775)CAPITAL EXPENDITURE Purchase of tangible fixed assets - (650) Proceeds from disposal of property, plant andequipment - 9,863,745 -------- ---------NET CASH (OUTFLOW)/INFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES (308,917) 9,929,759 MANAGEMENT OF LIQUID RESOURCES Decrease/(increase) in short term deposits 44,787 (9,673,359) -------- ---------(DECREASE)/INCREASE IN CASH 12 (264,130) 256,400 ======== ========= The notes below form part of these financial statements.Notes to the financial statements The following accounting policies have been applied consistently in dealing withitems which are considered material in relation to the Company's financialstatements. In these financial statements the following new standard has beenadopted for the first time : • FRS 20 "Share-based payments" The accounting policies under this new standard are set out below together withan indication of the effects of its adoption. 1. ACCOUNTING POLICIES (a) Accounting conventionThe financial statements of the Company have been prepared under the historicalcost convention and in accordance with applicable approved accounting standards. (b) Foreign currenciesTransactions in foreign currencies are recorded in Ringgit Malaysia (RM) atrates ruling at the transaction dates. Assets and liabilities are reported atthe rates prevailing at the balance sheet date except for share capital whichremains at the historical rate. Exchange gains and losses are included in theprofit and loss account. (c) Replanting expenditureReplanting expenditure is charged to the profit and loss account in the year inwhich the expenditure is incurred. (d) Replanting cess refundsReplanting cess receivable is included in the financial statements on an accrualbasis. (e) Stocks and storesRubber stocks are valued at the lower of cost of production and net realisablevalue. Cost comprises the weighted average ex-estate cost and includesmanufacturing charges where applicable. Estate stores are valued at cost on aweighted average basis. Cost includes the actual cost of materials andincidentals in bringing the items into the store. (f) Employee Benefits i) Short term benefitsWages, salaries, bonuses and social security contributions are recognised as anexpense in the year in which the associated services are rendered by employeesof the Company. Short term accumulating compensated absences such as paid annualleave are recognised when services are rendered by employees that increasestheir entitlement to future compensated absences, and short termnon-accumulating compensated absences such as sick leave are recognised when theabsences occur. ii) Defined contribution plansAs required by law, companies in Malaysia make contribution to the state pensionscheme, the Employees Provident Fund ("EPF"). Such contribution is recognised asan expense as incurred. iii) Retirement and service gratuity benefitsThe Company does not operate any retirement benefits scheme other thancontributions to approved provident funds. (g) TaxationTax on the profit or loss for the year comprises current and deferred tax.Income tax is recognised in the income statement except to the extend that itrelates to items recognised directly in equity, in which case it is recognisedin equity. Current tax expense is the expected tax payable on the taxable income for theyear, using tax rates enacted or substantially enacted at the balance sheetdate, and any adjustment to tax payable in respect of previous years. Deferred tax is provided, using the liability method, on temporary differencesarising between the tax bases of assets and liabilities and their carryingamounts in the financial statements. Temporary differences are not recognisedfor goodwill not deductible for tax purpose and the initial recognition ofassets or liabilities that at the time of the transaction affects neitheraccounting nor taxable profit. The amount of deferred tax provided is based onthe expected manner of realisation or settlement of the carrying amount ofassets and liabilities, using tax rates enacted or substantially enacted at thebalance sheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. (h) Financial instrumentsShort term debtors and creditors, as defined in financial reporting standard FRS26 Derivatives and other financial instruments disclosures have been excludedfrom the information contained in Note 15 save those relating to currency risk. (i) TurnoverTurnover represents the invoiced value of crops sold during the year andproceeds from the manufacture of rubber. Interest income is recognised on an accrual basis. (j) Debtors/CreditorsDebtors and creditors are stated at cost. (k) Cash and liquid resourcesCash for the purpose of the cash flow statement, comprises cash in hand anddeposits repayable in demand less overdrafts payable on demand. Liquid resourcesare current assets investments which are disposable without curtailing thebusiness and are either readily convertible into known amounts of cash at orclose to their carrying values or traded in an active market. 2. TURNOVER, PROFIT AND SEGMENTAL INFORMATION All turnover and profit are derived in Malaysia from the sale of rubber stocks. Analysis of turnover and results before interest and tax by rubber are asfollows:- 2007 2006 RM RMTURNOVER Rubber 42,424 717,910FFB - 1,023,031 ---------- --------- 42,424 1,740,941 ========== ========= RESULTS BEFORE INTEREST AND TAX 2007 2006 RM RMRubber (413,410) 90,205FFB - 107,482 ---------- --------- (413,410) 197,687 ========== ========= 3. NOTES TO THE PROFIT AND LOSS ACCOUNTThe (loss)/profit on ordinary activities before taxation is stated aftercharging the following items:- 2007 2006 RM RMDepreciation of tangible fixed assets - 9,359 Directors' remuneration *Chew Sing Guan 1,618 1,985Tuan Haji Zambri Bin Haji Mahmud 1,350 1,654Diong Chin Teck 1,350 1,654Chew Beow Soon 1,350 1,654Auditors' remuneration - Audit of these financialstatements 72,285 110,000Replanting expenditure - 22,043Allowance for doubtful debts 42,045 -Expenditure on sale of plantation ** 129,135 - * Directors' remuneration totaling RM5,668 (2006: RM6,947) is in respect ofdirectors' fees for duties performed outside the United Kingdom. ** The expenditure on sale of plantation is related to additional costs incurredin the current year relating to the sale of the plantation which happened in theprevious financial year. 4. TAX ON PROFIT ON ORDINARY ACTIVITIES 2007 2006 RM RMForeign taxation 70,000 609,435- based on the profit for the year- deferred tax - (37,000) ---------- ---------- 70,000 572,435 ========== ========== Factors affecting the tax charge for the current period.The current tax charge for the period is 20% (2006 : 20%) which is lower thanthe standard rate of corporation tax in the UK of 30% (2006 : 30%). Thedifferences are explained below. Reconciliation of effective tax expense 2007 2006 RM RM (Loss)/Profit before tax (65,484) 8,534,023Current tax at 30% (2006 : 30%) (19,645) 2,560,207Expenses not deductible for tax purposes 55,352 149,750Capital allowances for period in excess ofdepreciation - (20,051)Increase in tax losses 68,670 -Lower tax rates on overseas earnings (34,377) (2,080,471) ---------- ---------- 70,000 609,435 ========== ========== 5. BASIC AND DILUTED (LOSS)/PROFIT PER 10P SHARE This is based on the loss after taxation of RM135,484 (2006 : Profit After TaxRM7,961,588) and 1,713,334 shares (2006: 1,713,334 shares) being the weightedaverage number of shares in issue. 6. STOCKS 2007 2006 RM RMStock of rubber - 11,086 Estate stores - 29,946 --------- ----------- - 41,032 ========= =========== 7. DEBTORS 2007 2006 RM RMDue within one yearTrade debtors - 8,710Other debtors 131,753 209,493 --------- ----------- 131,753 218,203 ========= =========== 8. CREDITORS: Amounts falling due within one year 2007 2006 RM RMTrade creditors 4,006 4,006 Other creditors 62,661 356,265Taxation and social security 521,145 528,456 ---------- ---------- 587,812 888,727 ========== ========== Included in taxation and social security is an amount of RM414,524 (2006:RM414,524) representing provision for Real Property Gain Tax arising from thesale of plantation. 9. SHARE CAPITAL 2007 2006 RM RMAuthorised2,000,000 shares of 10p each 1,493,610 1,493,610 ========== ==========Issued and fully paid up1,713,334 shares of 10p each 1,067,846 1,067,846 ========== ========== 10. RESERVES 2006 2007 Land and Profit Land and Profit plantations and loss plantations and loss revaluation Account revaluation account reserve reserve RM RM RM RMAt 1st April - 9,247,334 5,832,048 1,285,746Reclassification of revaluation reserves (5,832,048) 5,832,048(Loss)/retainedprofit - (135,484) - 2,129,540 -------- --------- ---------- ---------At 31st March - 9,111,850 - 9,247,334 -------- --------- ---------- --------- 11. RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES 2007 2006 RM RMOperating (loss)/profit (413,410) 197,687Depreciation charge - 9,359Decrease in stocks 41,032 111,875Decrease in debtors 86,450 210Decrease in creditors (293,604) (247,665) ----------- ----------Net cash (outflow) / inflow from operating activities (579,532) 71,466 =========== ========== 12. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2007 2006 RM RM(Decrease)/Increase in cash in the year (264,130) 256,400(Decrease)/Increase in liquid resources (44,787) 9,673,359 ----------- ----------Movement in net funds in the year (308,917) 9,929,759Net funds at 1st April 10,944,672 1,014,913 ----------- ----------Net funds at 31st March 10,635,755 10,944,672 =========== ========== 13. ANALYSIS OF NET FUNDS At 1st April, 2006 Cash flow At 31st March, 2007 RM RM RMShort term deposits 10,643,359 (44,787) 10,598,572Cash at bank and inhand 301,313 (264,130) 37,183 ---------- ----------- ---------- 10,944,672 (308,917) 10,635,755 ========== =========== ========== 14. EMPLOYEES 2007 2006 RM RMCosts during the year in respect ofall employees were as follows:Wages and salaries 5,668 632,098Social security costs - 9,127Approved provident fund contributions - 67,919 2007 2006Average number of persons employed during the year:Estate workers - 75Estate staff 4 6 15. FINANCIAL INSTRUMENTS (a) Financial risk management objectives and policiesThe Company's financial risk management policies seek to ensure that adequatefinancial resources are available for the development of the Company's businesswhilst managing its interest rate, foreign exchange, liquidity and credit risks.The Company operates within clearly defined guidelines that are approved by theBoard of Directors and the Company's policy is not to engage in speculativetransactions. (b) Interest rate riskThe Company's primary interest rate risk relates to interest-earning assets asthe Company had no long-term interest-bearing debts as at 31 March 2007. Theinvestments in financial assets are mainly short term in nature and they are notheld for speculative purposes but have been mostly placed in fixed deposits. Effective Interest Financial Assets Rates Total Within 1 year 2007Short term deposits 3.3% 10,598,572 10,598,572 2006Short term deposits 3.2% 10,643,359 10,643,359 (c) Foreign exchange riskThe Company operates locally and is only exposed to sterling pound currency forpayments to UK companies for services rendered to the Company, which posesminimum risk. (d) Liquidity riskThe Company actively manages its operating cash flows and availability of fundsso as to ensure that all repayment and funding needs are met. As part of itsoverall prudent liquidity management, the Company maintains sufficient levels ofcash or cash convertible investments to meet its working capital requirements. (e) Credit riskCredit risk, or the risk of counterparties defaulting, is controlled by thereceipt of credit approvals and monitoring procedures. Credit risks areminimised and monitored via strictly limiting the Company's associations tobusiness partners with high creditworthiness. Trade receivables are monitored onan ongoing basis via the Company's management reporting procedures. (f) Fair valuesThe fair values of financial assets and financial liabilities reported in thebalance sheet approximate the carrying amounts of those assets and liabilities. (g) Price riskThe Company has so significant exposure to securities price risk as it holds nolisted equity investments. (h) Cash flow riskThe Company's assets comprise of cash and bank deposits all of which earninterest. There is minimum risk on the cash flow. Cash flow monitoring is a highpriority with the management. 16. RELATED PARTY TRANSACTIONS 2007 2006 RM RMAgency fees, accounting fees and Compensation paid toPlantation Agencies Sdn. Berhad, a Company in which a director of the Company is also a director 52,177 57,217 ----------- --------- There is no controlling or ultimate controlling party and there is nooutstanding amount owed to/ from Plantation Agencies Sdn. Berhad at the end ofthe year. Comparative statistics Year ended 31st March 2007 2006 2005 2004 2003 RM RM RM RM RMBALANCE SHEETANALYSISCalled-up sharecapital 1,067,846 1,067,846 1,067,846 1,067,846 1,067,846 Reserves 9,111,850 9,247,334 7,117,794 6,828,215 6,503,565 Totalshareholders'funds 10,179,696 10,315,180 8,185,640 7,896,061 7,571,411 Fixed assets - - 7,677,932 7,631,942 7,656,556 Net currentassets 10,179,696 10,315,180 1,070,894 819,253 445,010 Provision forliabilities andcharges - - (563,186) (555,134) (530,155) 10,179,696 10,315,180 8,185,640 7,896,061 7,571,411 PROFIT AND LOSS ACCOUNT ANALYSIS(Loss)/Profit before interest,replantingexpenditure andtaxation (413,410) 219,730 380,081 396,186 197,810 Profit on saleof plantation - 8,260,363 - - - Interest 347,926 75,973 25,833 16,620 5,589Replantingexpenditure - (22,043) (34,938) (84,832) (115,790) Taxation (70,000) (572,435) (81,397) (3,324) (1,057) (Loss)/Profitafter taxation (135,484) 7,961,588 289,579 324,650 86,552 Year ended 31st March 2007 2006 2005 2004 2003RUBBERAverage maturearea - hectares - 177 177 177 179 Production - kgs - 116,185 189,493 228,800 196,800Yield perhectare - kgs - 787 1,053 1,291 1,099 Duty andresearch cess -sen/kg - 3.85 3.85 3.85 3.85 Overall cost of production- sen/kg (FOB) - 414 324 281 264 Average sellingprice - sen/kg (FOB) 736 575 448 414 303 OIL PALMAverage maturearea - hectares - 380 380 351 328 Production -tonnes FFB - 3,942 3,775 3,425 3,139 Yield perhectare - tonnes FFB - 10 10 10 10 Cost of production- RM/tonne FFB(del.mill) - 193 213 195 171 Average sellingprice- RM/tonne FFB(del.mill) - 260 380 285 253 This information is provided by RNS The company news service from the London Stock Exchange