Eng - IOI Group

OPERATIONS cont’dAlthough oil yield achieved to-date is significantly higher than the industry average of 3.8 MT per hectare, there is stillroom for significant improvement. During the financial year, the number of estates managed by the Group that haveachieved oil yield of more than 6 MT per mature hectare have increased significantly to 15 estates as compared to 3estates in the previous financial year. With more young palms moving into their prime age and further improvement inestates productivity and efficiency, our plantation yields have the potential to be significantly higher than the currentlevels.The cess and tax for the year were as follows:RM‘000FY 2003 FY 2002MPOB cess 10,392 7,519Rubber 358 35110,750 7,870Sabah sales tax 25,318 12,98336,068 20,853Whilst the increase in MPOB cess was due mainly to the significant increase in CPO price as well as higher FFBproduction, the substantial increase in Sabah sales tax is also due to the change in the computation whereby effective 1January 2003 sales tax is payable based on 5% of CPO price instead of the previous basis of RM50 for every MT of CPOproduced at above MPOB’s price of RM1,000 per MT.With regard to rubber, total planted area was further reduced to 1,397 hectares as at 30 June 2003, down from 1,776hectares for FY 2002. Despite the reduction in hectarage, rubber production has increased marginally from 3,607,000 kgfor FY 2002 to 3,615,000 kg for the year under review due to a 13% improvement in yield per Ha from 1,995 kg per Hafor FY 2002 to 2,252 kg per Ha for the current financial year.53IOI Corporation BerhadAnnual Report 2003