Announcement Details/Table Section :
1. Introduction
The Board of Directors of QL Resources Berhad (“Company”) wishes to announce that its subsidiary, QL Farms Sdn. Bhd. (“QL Farms”) has on 15 March 2011 entered into a Sale and Purchase Agreement (“S&P”) to dispose all that of the one (1) parcel of land, fully planted with oil palm, comprised in and held under Tawau Provisional Lease No. 106197353 containing 4.08 acres more or less in area and situated at Kampung Apas Parit, KM 23, Off Apas Road in the District of Tawau to a related party namely, Farsathy Holdings Sdn. Bhd. (“Farsathy or Purchaser”) for a total consideration of Ringgit Malaysia: Three Hundred Thousand (RM300,000.00) only (“Proposed Disposal”).
2. Information on QL Farms
QL Farms, a wholly-owned subsidiary of QL Feedingstuffs Sdn. Bhd. in which its ultimate holding company being QL Resources Berhad. Its principal nature of business is trading in animal feed raw materials, layer and broiler farming, wholesale of frozen chicken parts and investment holding.
3. Information on Farsathy
Farsathy, a company incorporated in Malaysia on 28 August 1980, whose registered office is at No. 16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor Darul Ehsan. Its principal nature of business is an investment holding.
Mr Chia Seong Fatt and Mr Chia Seong Pow are the directors of Farsathy. They are also the existing directors and major shareholders of the Company.
4. Details of the Proposed Disposal
As this is an arm’s length transaction, the consideration was based on the recommended market value of a valuation report by Messrs CH Williams Talhar & Wong dated 20 January 2011.
Based on the Valuation Report, the market value of the vacant land is RM300,000.00 on the basis that it is fully planted with oil palm and free from all encumbrances.
The original cost of investment for the land as at 9 July 2009 was RM180,000.00.
The expected gain from disposal is RM120,000.00 and the sale proceed will be utilised as working capital of QL Farms.
There is no liabilities to be assumed by Farsathy arising from this transaction.
5. Salient terms of the Proposed Disposal
The consideration of Ringgit Malaysia: Three Hundred Thousand (RM300,000.00) only shall be paid by the Purchaser to QL Farms as follows:
(a) Upon signing of the S&P, the Purchaser shall pay a sum of Ringgit Malaysia: Thirty Thousand (RM30,000.00) only as a deposit and part payment of the consideration to QL Farms;
(b) The balance of the consideration of Ringgit Malaysia: Two Hundred and Seventy Thousand (RM270,000.00) only shall be settled by the Purchaser to QL Farms by way of cash and/or loan within four (4) months from the date of S&P or such extended date as permitted by QL Farms and the extended date shall together be referred to as the Completion Date;
(c) In the event the Purchaser fails to pay the balance of the consideration within four (4) months from the date of S&P, the Purchaser shall be granted to an extension of time of one (1) month to effect the payment; and
(d) QL Farms shall deliver vacant possession of the land to the Purchaser upon full payment of the consideration.
6. Rationale
The Related Party Transaction is to dispose its land that is no longer in use.
7. Financial Impact
There is no material effect on net profit, earnings per share, net assets, gearing, share capital and substantial shareholdings of the Company.
8. Approvals Required
QL Farms shall obtained approval from its Shareholders and Board of Directors on the Proposed Disposal. No other approval from the shareholders and authorities of the Company is required for the Related Party Transaction.
9. Interests of Directors, Substantial Shareholders and Persons Connected To Them
Save as disclosed in paragraph 3 above, none of the other Directors, substantial shareholders of the Company, or persons connected to such Directors or substantial shareholders have any interest, direct or indirect in the above transaction. The interested directors have abstained from stating an opinion in relation to the transaction.
10. Date of Completion
The Proposed Disposal is expected to be completed within 6 months from the date of S&P.
11. Percentage ratio of the Proposed Disposal
The highest percentage ratio applicable to the Proposed Disposal pursuant to paragraph 10.02(g) of the Main Market Listing Requirements is 0.06%.
12. Statement by the Audit Committee
The Audit Committee, having taken into consideration all aspect of the Proposed Disposal, was of the view that it is in the best interest of the Company, fair, reasonable and on normal commercial terms and not detrimental to the interest of the minority shareholders.
13. Statement by the Board of Directors
The Board of Directors (save for the interested Directors) is of the opinion that the Related Party Transaction is in the best interest of the Company.
14. The total amount transacted with Farsathy for the preceding 12 months
There are no other transactions previously.
15. Documents for inspection
The valuation report for the Proposed Disposal will be made available for inspection at the registered office of the Company at No.16A, Jalan Astaka U8/83, Bukit Jelutong, 40150 Shah Alam, Selangor during normal business hours for a period of one month from the date of announcement.
This announcement is dated 15 March 2011.
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