Directors - Boustead Holdings Berhad

Notes to the Financial Statements
36. COMMITMENTS
134
Group Company
2006 2005 2006 2005
RM’000 RM’000 RM’000 RM’000
Authorised and contracted:
Additional investment in an Associate 70,961 50,000 70,961 50,000
Capital expenditure 135,000 135,000 48,600 ––
205,961 185,000 119,561 50,000
Authorised but not contracted:
Additional investment in Associate and
Subsidiary 201,000 50,000 150,000 ––
Capital expenditure 197,000 123,000 44,000 12,700
398,000 173,000 194,000 12,700
In addition to the above, the Group and the Company is also expected to invest approximately RM167
million towards the Proposed Acquisition and subscription of the Proposed Rights Issue of PSC Industries
Berhad referred to in Note 42(c) to the financial statements.
37. SALE AND LEASEBACK OF PLANTATION ASSETS
On 29 December 2006, the Group sold its beneficial rights, title and interest in eight oil palm estates and
a palm oil mill (Plantation Assets) to an Islamic plantation real estate investment trust known as
Al-Hadharah Boustead REIT. The Group also entered into several Ijarah agreements with the trustee of
Al-Hadharah Boustead REIT to rent the Plantation Assets for a cumulative tenure of up to thirty years.
The Ijarah agreements which commence on 1 January 2007 will be for a lease period of three years
renewable for five additional terms of not more than three years each. The Ijarah arrangement for the first
two tenancy periods of three years each totalling six years is non-cancellable.
During the previous financial year, the Group had also entered into three Master Ijarah Agreements with
Golden Crop Returns Berhad (GCRB) for the leaseback of plantation assets comprising 18 estates and 5
palm oil mills for lease periods of three, five and seven years. Concurrent with the execution of these
Master Ijarah Agreements, the Group paid a deposit of RM300,000 for these call options (Call Options)
under which the Group is entitled to call on GCRB to sell the plantation assets to the Group based on
the terms of the Call Option at an exercise price equivalent to the fair value of the plantation assets at
the time of the exercise of the Call Options.