Malaysia legislation
Section 25
of Mengikut peraturan Bilangan 34 Peraturan-Peraturan Tanah Tahun 1966, adalah
Seksyen 25
CONVERTIBLE UNSECURED LOAN STOCKS
The Group and the Company 2005 2004
At beginning of year 330,000,000
—
Issued during the year:
Liability component
—
303,210,004
Equity component, net of deferred tax liability
—
19,288,797
Deferred tax liability (Note 17)
—
7,501,199
—
330,000,000
At end of year 330,000,000 330,000,000
1676
[22hb Jun 2006
The movement of the liability component of the CULS during the year was as follows:
The Group and the Company 2005 2004
At beginning of year 303,210,004
—
Issued during the year
—
303,210,004
Interest accrued 17,419,415
—
Interest paid
(3,290,959)
—
At end of year 317,338,460 303,210,004
On 15 December 2004, the Company issued 330,000,000 five (5) years
Convertible Unsecured Loan Stocks (“CULS”) at nominal value of RM1
each as part of purchase consideration for the acquisition of freehold agricultural land zoned for development measuring approximately 1,474.25
acres located at Mukim of Tebrau, Johor Bahru from its ultimate holding corporation. It was issued pursuant to the Memorandum and Articles of
Association, the Board of Directors’ resolution passed on 9 September 2004 and constituted by a Trust Deed dated 24 November 2004 between the Company and Amanah Raya Berhad.
The salient features of the CULS are as follows:
The total issuance is RM330 million;
The interest rate of CULS is as follows (less any Malaysian income or with holding tax applicable thereto which is required to be deducted):
Period (from issue date)
Interest rate per annum
First 24 months (Year 1 and 2)
1%
Next 36 months (Year 3, 4 and 5)
6%
The interest rate is payable annually in arrears on the last day of every 12 months period commencing from the issus date, 15 December 2004
until the maturity date, 15 December 2009 (‘Interest Payment Date’), calculated on the basis of a year of 365 days and on the actual number of days elapsed and accrues daily from and including the issue date or the previous Interest Payment Date;
The CULS are redeemable in full or in part at their nominal value, at the option of the Company which will be determined by the independent directors’ of the Company. The redemption will be dependent inter-alia, the availability of profits and cash flows of the Company;
The conversion of the CULS into new ordinary shares of RM1 each of the Company at a conversion price of RM1 per share is at the option of the CULS holder and may take place at any time after the second anniversary from the date of issue of the CULS until the maturity date;
The remaining CULS not redeemed or converted on maturity date will be automatically converted into ordinary shares;
22hb Jun 2006]
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The remaining CULS not redemeed or converted on maturity date will be automatically converted into ordinary shares;
The CULS have been classified separately into their components parts as liability or as equity on the balance sheet in accordance with FRS1322004
(previously known as MASB24), Financial Instruments: Disclosure and
Presentation. The fair value of the liability component is calculated using a prevailing market interest rate at the date of issuance for a similar nonconvertible loan stock. The residual amount, representing the fair value of the equity component, net of deferred tax liability, is included in shareholder’s equity.