We refer to our announcement made on 7 June 2013 (Ref. No. CK-130607-37659) in respect of the above matter and wish to furnish herewith the following additional information:-
1. Breakdown of source of funds for the estimated development cost of RM5.0 million.

The breakdown of source of funds for the estimated development cost of RM5.0 million are as follows:-

Land clearing of RM2.0 million
Seedling of RM0.67 million
Fertilizer of RM1.31 million
Weeds Killer of RM0.45 million
Labour cost of RM0.21 million
Tools and equipment and miscellaneous of RM0.36 million

2. Estimated timeframe for the Group to generate revenue from the project.

The oil palm trees need approximately 3 years to grow up to mature and estimated to harvest on the year of 2015 onwards.

3. Total financial commitment of the project and the breakdown of the source of funds.

The total financial commitment of the project is only limited to the fund of development cost of RM5.0 million on the first 3 years. The source of fund is
from internally-generated fund.

4, Basis of Arriving at the monthly rental rate of RM0.50 based on every oil palm tree planted after a period of three and a half years and a monthly rental rate of RM0.60 after a period of five and half years from the date of the execution of the Renting Agreements.

The average cost of production per ton of fresh fruit bunch is estimated at RM210. While the monthly rental per acre for three and a half years and after five and a half years are RM27.50 (55 trees per acre x 0.50) and RM33.00 (55 trees x 0.60) respectively. As such, the estimated cost of rental per ton of fresh fruit bunch is range from 13% to 15%. The yield of fresh fruit bunch for three and a half years is lower than five and a half years and thus the rental is lower.

5. Basis of arriving at a compensation of not less than RM6.0 million to H&L High-Tech Deco Sdn. Bhd. in the event the aforesaid rental lands are to be surrendered to the governmental authorities or other third parties or terminated by the respective landlords.

The compensation of not less than RM6.0 million is arrived based on the basis that the total development cost of RM5.0 million can be recovered plus 20% premium.

6. Outlook and prospects of oil palm industry.

Barring any unforeseen circumstances, the outlook and prospect of oil palm industry is expected to be optimistic in regard to the stockpile of crude palm oil is reducing gradually and thus the price of fresh fruit bunch is expected to increase. The demand of palm oil will also increase in tandem with the increase in population globally.


This announcement is dated 12 June 2013