(b) deferred land rights acquisition costs representing the cost
associated with the legal transfer or renewal for titles of land
rights such as, among others, legal fees, land survey and
re-measurement fees, taxes and other related expenses. Such costs
are also deferred and amortised on a straight-line basis over the
tenure of the related land rights.
Acquisition during the financial year
On 19 August 2013, the Group acquired a piece of long-term
leasehold agricultural land through the acquisition of Grand
Performance Sdn. Bhd. as disclosed in Note 1(b).
Assets pledged as security
The land use rights were pledged to secure the bank overdrafts,
short term revolving credit, term loans facilities and the MTN
Programme as disclosed in Note 25.
18. Goodwill on consolidation
2013 2012
USD'000 USD'000
At 1 January 7,619 7,335
Arising from the acquisition of a
subsidiary (Note 1(b)) - 5
Impairment of goodwill - (5)
Exchange differences (520) 284
At 31 December 7,099 7,619
Goodwill has an indefinite useful life and is subject to annual
impairment testing.
(a) Impairment testing of goodwill
Goodwill arising from business combinations is allocated to the
cash-generating unit for the purpose of impairment testing. The
cash-generating unit is as follows:
2013 2012
USD'000 USD'000
Plantation Estates
Goodwill 7,099 7,619
The recoverable value of the goodwill of plantation estates as
at 31 December 2013 was determined based on value-in-use
calculations using cash flow projections, covering a period of 25
productive years of oil palms, from financial budgets approved by
management. The calculations were based on the following key
assumptions:
2013 2012
Discount rate (pre-tax) 9.5% to 10.5% 10.5% to 11.3%
Projected CPO price USD868/tonne USD907/tonne
(b) Key assumptions used in value-in-use calculations
The calculations of value-in-use are most sensitive to the
following assumptions:
CPO price - The long term average CPO price is based on
delivered price as published by the Malaysia Palm Oil Board.
Discount rate - The discounted rate reflects the current market
assessment of the risk specific to palm oil industry. The discount
rate applied to the cash flow projection is pre-tax and derived
from the weighted average cost of equity and cost of debt,
calculated based on the subsidiaries' actual composition of the
equity and debt of the plantation estates.
Based on the above analysis, management has assessed that the
goodwill is not impaired as at 31 December 2013 and 2012. Changes
to the assumptions used by management to determine the recoverable
amounts can have an impact on the results of the assessment.
Management is of the opinion that no reasonably possible change in
any of the key assumptions stated above would cause the carrying
amount of the goodwill for each of the CGUs to materially exceed
their recoverable amount.
19. Inventories
2013 2012
USD'000 USD'000
At cost:
Crude palm oil 223 -
Palm kernel 72 -
Chemicals and fertilisers 729 1,020
Consumable supplies 518 704
1,542 1,724
20. Trade and other receivables
2013 2012
USD'000 USD'000
Trade receivables 386 259
Other receivables:
Deposits 5,312 5,820
Sundry receivables 1,040 635
Total trade and other receivables 6,738 6,714
Add: Cash and short-term deposits (Note
22) 10,813 15,785
Total loans and receivables carried
at amortised cost 17,551 22,499
Trade receivables
Trade receivables are non-interest bearing and are generally 30
days' (2012: 30 days') terms. They are recognised at their original
invoice amounts which represent their fair values on initial
recognition.
Deposits
Included in deposits is amount totalling USD4,025,000 (2012:
USD4,828,000) paid for the proposed acquisition of Malaysian
companies and land use rights.
Other receivables that are not denominated in the functional
currencies of the respective entities are as follows:
2013 2012
USD'000 USD'000
Singapore Dollars ("SGD") 25 25
Other information on financial risk of trade and other
receivables is disclosed in Note 33(a).
21. Prepayments
Prepayments comprise prepaid operating expenses.
22. Cash and short-term deposits
2013 2012
USD'000 USD'000
Cash at banks and on hand 4,289 5,255
Short-term deposits 6,524 10,530
10,813 15,785
Short-term deposits earn interest at 3% (2012: 3%) p.a.
As at 31 December 2013, the amount of undrawn committed credit
facilities that may be available in the future amounts to
USD17,261,000 (2012: USD53,609,000).
The Group has pledged a part of its short-term deposits
amounting to USD62,000 (2012: USD149,000) to fulfil collateral
requirements for supply of goods and USD801,000 (2012: USD835,000)
as security for a term loan facility as disclosed in Note 25.
Cash and bank balances that are not denominated in the
functional currencies of the respective entities are as
follows:
2013 2012
USD'000 USD'000
SGD 20 1,188
USD 3,155 2,088
GBP 172 1,725
For the purpose of the consolidated statement of cash flows,
cash and cash equivalents comprise the following at the end of the
reporting period:
2013 2012
USD'000 USD'000
Cash and short-term deposits 10,813 15,785
Less: Short-term deposits pledged for
supply of goods (62) (149)
Less: Short-term deposits pledged for
a banking facility (Note 25) (801) (835)
9,950 14,801
Bank overdraft (Note 25) (2,477) (613)
7,473 14,188
23. Issued capital
2013 2012
No. of shares No. of shares
'000 USD'000 '000 USD'000
Issued and fully
paid ordinary shares
At 1 January 46,511 88,594 46,175 87,321
Issuance during
the year 250 1,137 336 1,273
At 31 December 46,761 89,731 46,511 88,594
The holders of ordinary shares are entitled to receive dividends
as and when declared by the Company. Each ordinary share carries
one vote per share without restriction. The ordinary shares have no
par value.
Issuance of shares
On 17 May 2013, a director exercised 250,000 Initial Options
that were granted in accordance with the Company's share option
scheme (Note 29) and these shares were subsequently listed on AIM
on 22 May 2013.
On 16 April 2012, the Board approved the allotment of 23,000
shares pursuant to the exercise of initial options granted to a
consultant in accordance with the Company's share option scheme
(Note 29) and these shares were subsequently listed on AIM on 30
April 2012.
On 28 May 2012, the Board approved the conversion of the
convertible bond with face value of USD1,000,000 to 313,383
ordinary shares of the Company and these shares were subsequently
listed on AIM on 7 June 2012.
24. Other reserves
The composition of other components of other reserves is as
follows:
2013 2012
USD'000 USD'000
Merger reserve (20,256) (20,256)
Foreign currency translation reserve (2,213) 1,736
Share-based payment transaction reserve
(Note 29) 9,982 10,604
(12,487) (7,916)
Merger reserve
Pursuant to an agreement dated 9 November 2009, the Company
acquired the entire issued and paid-up capital of APS at par,
comprising 22,500,000 ordinary shares of RM1 each, in exchange for
22,500,000 shares of the Company. As this arrangement constitutes a
combination of entities under common control, the pooling of
interest method of accounting was adopted in the preparation of the
consolidated financial statements of the Group. Under this method
of accounting, the results and cash flows of the Company and its
subsidiaries and their assets and liabilities are combined at the
amounts at which they were previously recorded as if they had been
part of the Group for the whole of the current and preceding
periods.
Merger reserve represents the difference between the
consideration paid and the share capital of the "acquired" entity,
APS.
Foreign currency translation reserve
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