AUDITED FINANCIAL STATEMENTS 2021 FGV HOLDINGS BERHAD 200701042133 (800165-P) HARNESSING SYNERGIES. DELIVERING VALUE.
A paradigm shift is in the works at FGV. Our business transformation from an oil palm heritage towards a dynamic agribusiness player is gaining strong traction. We have been taking incremental steps towards this evolution and now is the right time to accelerate growth and optimise our potential. We are harnessing synergies across the plantation business value chain right through the parallel food marketplace, as well as relevant service sectors. Going forward, we will harness further synergies through collaboration with key stakeholders including the smallholders in ensuring the fruits of our labour reach all facets of our society. Although the bold steps we are taking are redefining our future, our goal remains the same; To maximise value delivery to a diverse base of stakeholders as a flagbearer of Malaysian agribusiness. HARNESSING SYNERGIES. DELIVERING VALUE. Image: An aerial view of FGV’s estate in Maokil, Johor
Inside This Report 2 Directors’ Report 6 Statement by Directors 6 Statutory Declaration 7 Independent Auditors’ Report 12 Financial Statements 26 Notes to the Financial Statements Statement on Directors’ Responsibility The Directors are required by the Companies Act 2016 (Act) to prepare Financial Statements for each financial year which give a true and fair view of the financial position of the Group and of the Company at the end of the financial year and of the financial performance and cash flows of the Group and of the Company for the financial year. As required by the Act and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Financial Statements for the financial year ended 31 December 2021, have been prepared in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Act. The Directors consider that in preparing the Financial Statements for the financial year ended 31 December 2021 set out on pages 12 to 172, the Group and the Company have applied the appropriate accounting policies on a consistent basis and supported by reasonable and prudent judgments and estimates. The Directors have responsibility for ensuring that proper accounting records are kept. The accounting records should disclose with reasonable accuracy the financial position of the Group and of the Company to enable the Directors to ensure that the Financial Statements comply with the Act. The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. This Statement was made in accordance with a resolution of the Board of Directors dated 4 April 2022.
2 FGV HOLDINGS BERHAD Directors’ Report The Directors have pleasure in submitting the annual report to the members together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2021. DIRECTORS The Directors in office during the financial year and during the period from the end of the financial year to the date of the report are: Dato’ Dzulkifli Abd Wahab (Chairman) (Appointed on 1 April 2021) Dato’ Amiruddin Abdul Satar Dato’ Shahrol Anuwar Sarman Dato’ Nonee Ashirin Dato’ Mohd Radzi (Appointed on 30 June 2021) Dato’ Mohd Rafik Shah Mohamad (Appointed on 1 July 2021) Nik Fazila Nik Mohamed Shihabuddin (Appointed on 1 July 2021) Kasmuri Sukardi (Appointed on 1 July 2021) Datuk Wira Azhar Abdul Hamid (Resigned on 1 April 2021) Datuk Mohd Anwar Yahya (Resigned on 1 April 2021) Dr. Mohamed Nazeeb P. Alithambi (Resigned on 1 April 2021) Datin Hoi Lai Ping (Retired on 23 June 2021) Dr. Nesadurai Kalanithi (Resigned on 24 June 2021) Dato’ Yusli Mohamed Yusoff (Demised on 10 March 2022) Datuk Dr. Zunika Mohamed (Resigned on 11 March 2022) The Company was granted a relief by Companies Commission of Malaysia from disclosing the names of the Directors of the Company’s subsidiaries in this report as required under Section 253(2) of Companies Act 2016 in Malaysia. The names of the Directors of the subsidiaries are set out in the respective subsidiaries’ Directors’ Report and the Board deems such information as included herein by such reference and shall form part hereof. PRINCIPAL ACTIVITIES The Company is principally an investment holding company with investments primarily in oil palm plantation and its related downstream activities, sugar refining, trading, logistics, marketing, rubber processing, research and development activities and related agribusiness activities. The principal activities of the subsidiaries are stated in Note 24 to the financial statements. There were no significant changes in the nature of the activities of the Group and the Company during the financial year. FINANCIAL RESULTS Group Company RM’000 RM’000 Profit attributable to Owners of the Company 1,167,874 269,918 Non-controlling interests 7,704 – Profit for the financial year 1,175,578 269,918
3 AUDITED FINANCIAL STATEMENTS 2021 Directors’ Report DIVIDENDS Dividends on ordinary shares paid or declared by the Company since 31 December 2020 are as follows: RM’000 In respect of the financial year ended 31 December 2020: – Final single tier dividend of 3.0 sen per share, paid on 31 March 2021 109,445 On 28 February 2022, the Board of Directors agreed to declare the payment of a final single tier dividend of 8.0 sen per ordinary share amounting to RM291.85 million. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are shown in the financial statements. DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than the benefits shown under Directors’ Remuneration) by reason of a contract made by the Company or a related corporation with the Directors or with a firm of which he/she is a member, or with a company in which he/she has a substantial financial interest. DIRECTORS’ INTEREST IN SHARES AND DEBENTURES According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, none of the Directors who held office at the end of the financial year held any shares or debentures in the Company or its subsidiaries during the financial year. AUDITORS’ REMUNERATION Details of auditors’ remuneration are set out in Note 13 to the financial statements. DIRECTORS’ REMUNERATION Details of Directors’ remuneration are set out in Note 14 to the financial statements. INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS The Company maintains a corporate liability insurance for the Directors and Officers of the Group throughout the financial year, which provides appropriate insurance cover for the Directors and Officers of the Group. The total amount of insurance premium paid by the Group during the financial year amounted to RM2,245,000 (2020: RM1,851,000).
4 FGV HOLDINGS BERHAD Directors’ Report STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps: (a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and (b) to ensure that any current assets, which were unlikely to be realised in the ordinary course of business including the values of current assets as shown in the accounting records of the Group and of the Company had been written down to an amount which the current assets might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances: (a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or (b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or (c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve (12) months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group or the Company to meet their obligations when they fall due. At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or (b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
5 AUDITED FINANCIAL STATEMENTS 2021 Directors’ Report STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. In the opinion of the Directors: (a) the results of the Group’s and the Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature, other than as disclosed in Notes 58 to the financial statements; and (b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made. AUDITORS The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to continue in office. This report was approved by the Board of Directors on 4 April 2022. Signed on behalf of the Board of Directors: DATO’ DZULKIFLI ABD WAHAB DATO’ AMIRUDDIN ABDUL SATAR CHAIRMAN DIRECTOR Kuala Lumpur
6 FGV HOLDINGS BERHAD STATEMENT BY DIRECTORS PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016 STATUTORY DECLARATION PURSUANT TO SECTION 251(1) OF THE COMPANIES ACT 2016 We, Dato’ Dzulkifli Abd Wahab and Dato’ Amiruddin Abdul Satar, two of the Directors of FGV Holdings Berhad, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 12 to 172 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2021 and of the financial performance and cash flows of the Group and of the Company for the financial year ended on that date in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. Signed on behalf of the Board of Directors in accordance with a resolution dated 4 April 2022. DATO’ DZULKIFLI ABD WAHAB DATO’ AMIRUDDIN ABDUL SATAR CHAIRMAN DIRECTOR Kuala Lumpur I, Dato’ Mohd Hairul Abdul Hamid, the Officer primarily responsible for the financial management of FGV Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 12 to 172 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960. DATO’ MOHD HAIRUL ABDUL HAMID MIA Membership No. 14173 Subscribed and solemnly declared by the abovenamed Dato’ Mohd Hairul Abdul Hamid in Kuala Lumpur on 4 April 2022, before me. COMMISSIONER FOR OATHS
7 AUDITED FINANCIAL STATEMENTS 2021 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P)) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the financial statements of FGV Holdings Berhad (“the Company”) and its subsidiaries (“the Group”) give a true and fair view of the financial position of the Group and of the Company as at 31 December 2021, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. What we have audited We have audited the financial statements of the Group and of the Company, which comprise the statements of financial position as at 31 December 2021 of the Group and of the Company, and the statements of profit or loss, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 12 to 172. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and other ethical responsibilities We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Our audit approach As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements of the Group and of the Company. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and controls, and the industry in which the Group and the Company operate. PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), Chartered Accountants, Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, P.O. Box 10192, 50706 Kuala Lumpur, Malaysia T: +60 (3) 2173 1188, F: +60 (3) 2173 1288, www.pwc.com/my
8 FGV HOLDINGS BERHAD REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. There are no key audit matters to report for the Company. Key audit matters How our audit addressed the key audit matters Land Lease Agreement (“LLA”) liability assessment As at 31 December 2021, the LLA liability for the Group amounted to RM3.8 billion. We focused on this area as the fair value of the LLA liability is determined based on cash flows projections, which require significant estimates made by management on the assumptions used in the calculations, in particular, prices of Crude Palm Oil (“CPO”) and Palm Kernel (“PK”), Fresh Fruit Bunches (“FFB”) yield, mature and immature estate costs. Refer to Note 3(i) in the significant accounting policies, Note 5(i) in the critical accounting estimates and judgements and Note 47 to the financial statements. We have performed the following audit procedures: • We checked the appropriateness of fair value model used to value the LLA liability. We also assessed the reasonableness of management’s key assumptions used in the cash flows projections comprising prices of CPO and PK, FFB yield and mature and immature estate costs, by comparing against those used in business plans, historical data and industry trend; • We evaluated the reliability of management’s cash flows projections by comparing the actual past financial performance against previous forecasted results; • We examined sensitivity analysis performed by management on the discount rate, prices of CPO and PK, FFB yield, mature and immature estate costs to evaluate the impact on the LLA liability; and • We assessed the adequacy of the disclosures in the financial statements. Based on our procedures, we noted no significant exceptions. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
9 AUDITED FINANCIAL STATEMENTS 2021 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters Key audit matters How our audit addressed the key audit matters Goodwill impairment assessment As at 31 December 2021, the Group’s carrying value of goodwill of RM809.1 million comprised goodwill in relation to sugar business in Malaysia of RM576.2 million, palm upstream operations in Malaysia of RM226.8 million and other operations of RM6.1 million. Goodwill is subject to annual impairment testing. We focused on this area as the determination of recoverable amounts of the assets in the Cash Generating Units (“CGUs”) based on discounted cash flows projections prepared by management, involved a significant degree of judgement in determining the following key assumptions: Business Key assumptions Sugar business Selling price and sales volume, raw sugar price and refining costs, exchange rate and terminal value growth rate. Palm upstream operations CPO price, PK price, FFB yield and mature and immature estate costs. The goodwill on other CGU of RM6.1 million is not material to the Group. Refer to Note 3(d) in the significant accounting policies, Note 5(ii) in the critical accounting estimates and judgements and Note 23 to the financial statements. We have performed the following audit procedures: • We assessed the reliability of management’s projections through the comparison of actual past financial performances against previous forecasted results; • We assessed the reasonableness of the key assumptions, which were used by management in developing the discounted cash flows projections, by comparing against historical data and industry trends; • We examined the sensitivity analysis performed by management on the key assumptions listed in the above table for the respective businesses and also the discount rates used to evaluate the impact on the impairment assessment; and • We assessed the adequacy and reasonableness of the disclosures in the financial statements. Based on our procedures, we noted no significant exceptions. Impairment assessments of non-financial assets with impairment indicators Management performed impairment assessments of the non-financial assets of the Group, which had impairment indicators. As a result, impairment losses of RM59.6 million for FGV Group’s property, plant and equipment and right-of-use assets were recognised during the financial year ended 31 December 2021. We focused on this area as the recoverable amounts of the non-financial assets are determined based on discounted cash flows projections, which require judgement on the part of management on the future financial performance and the business plan of those businesses. Refer to Note 3(o) in the significant accounting policies, Note 5(iii) in the critical accounting estimates and judgements and Notes 20 and 21 to the financial statements. We have performed the following audit procedures: • We assessed the reliability of management’s projections through the comparison of actual past financial performances against previous forecasted results; • We assessed the reasonableness of the key assumptions, which were used by management in developing the discounted cash flows projections, by comparing against historical data and industry trends; • We examined the sensitivity analysis performed by management on the key assumptions listed above and also the discount rates used to evaluate the impact on the impairment assessment; and • We assessed the adequacy and reasonableness of the disclosures in the financial statements. Based on the above procedures performed, we noted no significant exceptions. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
10 FGV HOLDINGS BERHAD INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P)) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Information other than the financial statements and auditors’ report thereon The Directors of the Company are responsible for the other information. The other information comprises the Chairman’s Commentary, Corporate Details, Management Discussion and Analysis, Corporate Governance Overview Statement, Statement of Risk Management and Internal Control, Directors’ Report, and other sections of the 2021 Annual Integrated Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. (b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the Company’s internal control. (c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
11 AUDITED FINANCIAL STATEMENTS 2021 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P)) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements (continued) As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (continued) (d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. (e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. (f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 24 to the financial statements. OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS PLT NURUL A’IN BINTI ABDUL LATIF LLP0014401-LCA & AF 1146 02910/02/2023 J Chartered Accountants Chartered Accountant Kuala Lumpur 4 April 2022
12 FGV HOLDINGS BERHAD STATEMENTS OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Revenue 6 19,565,891 14,075,712 499,287 358,704 Cost of sales (16,891,822) (12,501,668) (113,562) (93,289) Gross profit 2,674,069 1,574,044 385,725 265,415 Other operating income 7 95,113 132,499 3,112 65,364 Selling and distribution costs (203,935) (114,671) – – Administrative expenses (801,475) (774,343) (36,500) (46,347) Reversal of impairment of financial assets (net) 8 722 7,793 96 618 Impairment of non-financial assets (net) 9 (59,595) (242,074) – – Other operating expenses 10 (10,098) (22,697) (862) (6,581) Other gains/(losses), net 11 83,975 (116,034) – – Operating profit 1,778,776 444,517 351,571 278,469 Finance income 12 22,728 39,612 – – Finance costs 12 (126,933) (161,872) (78,989) (57,335) Share of results from associates 25 3,551 366 – – Share of results from joint ventures 26 35,858 23,441 – – Profit before zakat and taxation 1,713,980 346,064 272,582 221,134 Zakat 15 (17,406) (16,300) – – Taxation 16 (520,996) (195,571) (2,664) (9,048) Profit for the financial year 13 1,175,578 134,193 269,918 212,086 Profit attributable to: Owners of the Company 1,167,874 146,156 269,918 212,086 Non-controlling interests 7,704 (11,963) – – 1,175,578 134,193 269,918 212,086 Earnings per share (“EPS”) attributable to owners of the Company Basic and diluted EPS (sen) 18 32.0 4.0 – –
13 AUDITED FINANCIAL STATEMENTS 2021 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Profit for the financial year 1,175,578 134,193 269,918 212,086 Other comprehensive income: Items that will not be reclassified to profit or loss Actuarial gain/(loss) on defined benefit plan 19,517 (4,333) 262 (47) Fair value changes in financial assets at fair value through other comprehensive income 53,908 47,406 – – Items that may be subsequently reclassified to profit or loss Currency translation differences 23,580 (19,072) – – Realisation of foreign exchange reserve upon disposal of assets held for sale – (4,342) – – Share of other comprehensive income of an associate 531 3 – – Share of other comprehensive loss of joint ventures (597) (4,865) – – Cash flow hedge reserve 5,543 (4,241) – – 29,057 (32,517) – – Total other comprehensive income/(loss) for the financial year, net of tax 102,482 10,556 262 (47) Total comprehensive income for the financial year 1,278,060 144,749 270,180 212,039 Total comprehensive income attributable to: Owners of the Company 1,269,363 161,681 270,180 212,039 Non-controlling interests 8,697 (16,932) – – 1,278,060 144,749 270,180 212,039
14 FGV HOLDINGS BERHAD STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 ASSETS Non-current assets Property, plant and equipment 20 7,674,392 7,810,463 7,192 9,407 Right-of-use assets 21 2,196,084 2,299,579 24,714 29,075 Investment properties 22 81,531 93,789 11,301 12,183 Intangible assets 23 948,382 958,289 11,427 18,207 Investment in subsidiaries 24 – – 8,501,024 8,493,027 Interests in associates 25 65,074 38,058 – – Interests in joint ventures 26 454,714 441,546 – – Receivables 27 137,066 136,078 – – Amount due from ultimate holding company 29 14,681 12,455 – – Amounts due from other related companies 29 9,107 – – – Amounts due from subsidiaries 29 – – 172,625 659,455 Deferred tax assets 50 295,131 526,672 6,527 – Financial assets at fair value through other comprehensive income 31 201,569 144,251 – – Biological assets 33 2,228 – – – 12,079,959 12,461,180 8,734,810 9,221,354 Current assets Inventories 32 1,914,403 1,192,616 – – Biological assets 33 113,791 57,001 – – Receivables 27 1,346,150 1,410,955 14,245 10,337 Contract assets 28 42,151 27,880 – – Amount due from ultimate holding company 29 36,521 62,440 20 20 Amounts due from subsidiaries 29 – – 171,727 116,438 Amounts due from joint ventures 29 205,274 26,908 – – Amounts due from other related companies 29 66,801 63,660 797 711 Loans due from subsidiaries 34 – – 216,830 368,886 Tax recoverable 12,762 33,539 374 – Financial assets at fair value through profit or loss 35 79,136 68,201 – – Derivative financial assets 30 3,539 14,061 – – Deposits, cash and bank balances 36 2,031,666 1,729,194 338,675 20,073 5,852,194 4,686,455 742,668 516,465 Assets held for sale 37 24,241 31,866 – – 5,876,435 4,718,321 742,668 516,465 Total assets 17,956,394 17,179,501 9,477,478 9,737,819
15 AUDITED FINANCIAL STATEMENTS 2021 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 EQUITY AND LIABILITIES Capital and reserves Share capital 38 7,029,889 7,029,889 7,029,889 7,029,889 Treasury shares 39 (518) (518) (518) (518) Foreign exchange reserve 40 54,036 26,497 – – Reorganisation reserve 41 (3,089,497) (3,089,497) – – Other reserves 42 67,427 10,624 – – Retained earnings 1,359,264 284,708 400,190 239,455 Equity attributable to owners of the Company 5,420,601 4,261,703 7,429,561 7,268,826 Non-controlling interests 1,765,917 1,838,504 – – Total equity 7,186,518 6,100,207 7,429,561 7,268,826 Non-current liabilities Borrowings 43 1,033,140 773,182 496,451 – Lease liabilities 44 294,581 358,036 24,955 28,702 Loans due to ultimate holding company 45 632,151 882,866 632,151 882,866 Loans due to subsidiaries 46 – – 806,047 1,283,922 Land lease agreement (“LLA”) liability 47 3,314,874 3,881,584 – – Derivative financial liabilities 30 3,571 10,163 – – Provision for asset retirement 48 41,349 32,358 – – Provision for defined benefit plan 49 51,136 67,492 632 877 Deferred tax liabilities 50 575,740 635,501 – – Payables 51 10,189 15,196 – – 5,956,731 6,656,378 1,960,236 2,196,367 Current liabilities Payables 51 1,414,444 1,049,465 63,950 50,976 Contract liabilities 52 132,340 104,168 – – Loans due to ultimate holding company 45 2,514 3,322 2,514 3,322 Loans due to subsidiaries 46 – – 742 121,537 Amount due to ultimate holding company 29 276,082 265,984 1,179 1,179 Amount due to an associate 29 351 494 – – Amounts due to subsidiaries 29 – –- 15,848 14,289 Amounts due to other related companies 29 15,970 1,374 85 69 Derivative financial liabilities 30 3,749 929 – – Borrowings 43 2,330,357 2,633,582 – 75,080 Lease liabilities 44 27,518 27,790 3,363 3,363 Provision for asset retirement 48 666 643 – – Current tax liabilities 119,238 2,925 – 2,811 LLA liability 47 489,916 332,240 – – 4,813,145 4,422,916 87,681 272,626 Total liabilities 10,769,876 11,079,294 2,047,917 2,468,993 Total equity and liabilities 17,956,394 17,179,501 9,477,478 9,737,819
16 FGV HOLDINGS BERHAD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Foreign Share Treasury exchange Reorganisation Other Attributable to Non- capital shares reserve reserve reserves Retained owners of the controlling Total Note (Note 38) (Notes 39) (Note 40) (Note 41) (Note 42) earnings Company interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group 2021 At 1 January 2021 7,029,889 (518) 26,497 (3,089,497) 10,624 284,708 4,261,703 1,838,504 6,100,207 Profit for the financial year – – – – – 1,167,874 1,167,874 7,704 1,175,578 Other comprehensive income/(loss) for the financial year, net of tax: Items that will not be reclassified to profit or loss – actuarial gain on defined benefit plan – – – – – 17,147 17,147 2,370 19,517 – fair value changes in financial assets at fair value through other comprehensive income (“FVOCI”) – – – – 53,976 – 53,976 (68) 53,908 Items that may be subsequently reclassified to profit or loss – currency translation differences – – 27,605 – – – 27,605 (4,025) 23,580 – share of other comprehensive loss of joint ventures – – (597) – – – (597) – (597) – share of other comprehensive income of an associate – – 531 – – – 531 – 531 – cash flow hedge reserve – – – – 2,827 – 2,827 2,716 5,543 – – 27,539 – 2,827 – 30,366 (1,309) 29,057 Total comprehensive income for the financial year – – 27,539 – 56,803 1,185,021 1,269,363 8,697 1,278,060 Transactions with owners Accretion of interest in a subsidiary – – – – – (1,020) (1,020) 1,814 794 Loss of control of subsidiaries – – – – – – – (1,687) (1,687) Dividends paid for the financial year ended 31 December 2020 (final) 17 – – – – – (109,445) (109,445) – (109,445) Dividends paid to non-controlling interests of subsidiaries – – – – – – – (81,411) (81,411) Total transactions with owners – – – – – (110,465) (110,465) (81,284) (191,749) At 31 December 2021 7,029,889 (518) 54,036 (3,089,497) 67,427 1,359,264 5,420,601 1,765,917 7,186,518
17 AUDITED FINANCIAL STATEMENTS 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Foreign Share Treasury exchange Reorganisation Other Attributable to Non- capital shares reserve reserve reserves Retained owners of the controlling Total Note (Note 38) (Notes 39) (Note 40) (Note 41) (Note 42) earnings Company interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group 2020 At 1 January 2020 7,029,889 (302) 52,218 (3,089,497) (20,682) 201,575 4,173,201 1,927,099 6,100,300 Profit for the financial year – – – – – 146,156 146,156 (11,963) 134,193 Other comprehensive (loss)/income for the financial year, net of tax: Items that will not be reclassified to profit or loss – actuarial loss on defined benefit plan – – – – – (4,067) (4,067) (266) (4,333) – fair value changes in financial assets at FVOCI – – – – 47,476 – 47,476 (70) 47,406 – realisation of other comprehensive income reserves upon disposal of a FVOCI investment – – – – (14,007) 14,007 – – – Items that may be subsequently reclassified to profit or loss – currency translation differences – – (16,517) – – – (16,517) (2,555) (19,072) – realisation of foreign exchange reserve upon disposal of assets held for sale – – (4,342) – – – (4,342) – (4,342) – share of other comprehensive loss of joint ventures – – (4,865) – – – (4,865) – (4,865) – share of other comprehensive income of an associate – – 3 – – – 3 – 3 – cash flow hedge reserve – – – – (2,163) – (2,163) (2,078) (4,241) – – (25,721) – (2,163) – (27,884) (4,633) (32,517) Total comprehensive (loss)/income for the financial year – – (25,721) – 31,306 156,096 161,681 (16,932) 144,749 Transactions with owners Treasury shares – (2,620) – – – – (2,620) – (2,620) Employee share grant – – – – 2,404 – 2,404 – 2,404 Transfer to LTIP reserve – 2,404 – – (2,404) – – – – Acquisition of subsidiaries – – – – – – – 2,676 2,676 Accretion of interest in subsidiaries – – – – – – – 1,076 1,076 Disposal of a subsidiary – – – – – – – 16,446 16,446 Dividends paid for the financial year ended 31 December 2019 (final) 17 – – – – – (72,963) (72,963) – (72,963) Dividends paid to non-controlling interests of subsidiaries – – – – – – – (91,861) (91,861) Total transactions with owners – (216) – – – (72,963) (73,179) (71,663) (144,842) At 31 December 2020 7,029,889 (518) 26,497 (3,089,497) 10,624 284,708 4,261,703 1,838,504 6,100,207
18 FGV HOLDINGS BERHAD STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Non-distributable Distributable Share Treasury capital shares Retained Note (Note 38) (Note 39) earnings Total RM’000 RM’000 RM’000 RM’000 Company 2021 At 1 January 2021 7,029,889 (518) 239,455 7,268,826 Profit for the financial year – – 269,918 269,918 Other comprehensive income: Item that will not be reclassified to profit or loss – actuarial gain on defined benefit plan – – 262 262 Total comprehensive income for the financial year – – 270,180 270,180 Transaction with owners Dividends paid for the financial year ended 31 December 2020 (final) 17 – – (109,445) (109,445) Total transaction with owners – – (109,445) (109,445) At 31 December 2021 7,029,889 (518) 400,190 7,429,561
19 AUDITED FINANCIAL STATEMENTS 2021 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Non-distributable Distributable Share Treasury Other capital shares reserves Retained Note (Note 38) (Note 39) (Note 42) earnings Total RM’000 RM’000 RM’000 RM’000 RM’000 Company 2020 At 1 January 2020 7,029,889 (302) – 100,379 7,129,966 Profit for the financial year – – – 212,086 212,086 Other comprehensive loss: Item that will not be reclassified to profit or loss – actuarial loss on defined benefit plan – – – (47) (47) Total comprehensive income for the financial year – – – 212,039 212,039 Transactions with owners Treasury shares – (2,620) – – (2,620) Employee share grant – – 672 – 672 Recharge to subsidiaries – – 1,732 – 1,732 Transfer to LTIP reserve – 2,404 (2,404) – – Dividends paid for the financial year ended 31 December 2020 (final) 17 – – – (72,963) (72,963) Total transactions with owners – (216) – (72,963) (73,179) At 31 December 2020 7,029,889 (518) – 239,455 7,268,826
20 FGV HOLDINGS BERHAD STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit for the financial year 1,175,578 134,193 269,918 212,086 Adjustments for: Taxation 520,996 195,571 2,664 9,048 Zakat 17,406 16,300 – – Depreciation of property, plant and equipment 663,619 662,510 2,403 1,808 Impairment loss on property, plant and equipment (net) 59,914 221,769 – – Property, plant and equipment written off 9,135 34,332 – – Gain on disposal of property, plant and equipment (net) (803) (4,119) – – Depreciation of right-of-use assets 68,825 84,334 4,361 4,361 Right-of-use assets written off 185 – – – (Reversal of impairment)/impairment loss on right-of-use assets (319) 20,305 – – Depreciation of investment properties 12,258 12,260 882 882 Amortisation of intangible assets 20,568 23,655 9,490 8,510 Gain on disposal of assets held for sale (927) (33,762) – – Reversal of impairment on amount due from ultimate holding company (3,801) (13,341) – – Impairment loss on amounts due from joint ventures – 4,000 – – Impairment loss/(reversal of impairment) on amounts due from other related companies 137 (24) – – Reversal of impairment on amounts due from subsidiaries – – (96) (813) Reversal of impairment on other receivables – – (195) – Receivables written off – – 195 – Reversal of impairment loss of investment in subsidiaries, net – – – (54,200) Impairment loss on contract assets 292 1,551 – – Gain on disposal of financial assets at fair value through profit or loss (40) – – – Loss on liquidation in a joint venture 38 – – – Balance carried forward 2,543,061 1,359,534 289,622 181,682
21 AUDITED FINANCIAL STATEMENTS 2021 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Balance brought forward 2,543,061 1,359,534 289,622 181,682 Realisation of foreign exchange upon disposal of assets held sale – (4,342) – – Impairment loss of receivables (net) 2,942 1,572 – 195 Written off of inventories 9,157 3,589 – – Share of results from associates (3,551) (366) – – Share of results from joint ventures (35,858) (23,441) – – Net unrealised foreign exchange loss 5,133 7,326 875 59 Dividends from subsidiaries – – (374,547) (239,899) Dividend income from financial assets at fair value through other comprehensive income (2,572) (2,814) – – Finance costs 126,933 161,872 78,989 57,335 Finance income (22,728) (39,612) (31) (44) Other (gains)/losses, net (27,195) 127,280 – – Fair value changes in biological assets (net) (56,780) (11,246) – – Provision for defined benefit plan 7,345 (22,189) 83 (864) Termination of lease contracts (12) 496 – – Provision for asset retirement 8,245 – – – Unwinding of discount for provision for asset retirement 447 437 – – Provision for litigation loss – 19,802 – – Provision for LTIP – 2,404 – 672 Operating profit/(loss) before working capital changes 2,554,567 1,580,302 (5,009) (864) Changes in working capital: Inventories (728,394) 115,808 – – Receivables 114,861 (211,182) (3,909) 6,222 Intercompany (140,229) 253,622 493,036 104,952 Payables 351,861 109,720 7,973 11,579 Cash generated from operation 2,152,666 1,848,270 492,091 121,889 Finance income 22,728 39,612 31 44 Taxation paid (233,597) (118,340) (12,489) (6,414) Zakat paid (17,406) (16,300) – – Tax refunded 21,584 4,800 113 – Retirement benefit paid (4,089) (2,363) (66) (12) Net cash generated from operating activities 1,941,886 1,755,679 479,680 115,507
22 FGV HOLDINGS BERHAD Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (566,137) (435,536) (188) (615) Purchase of right-of-use assets (4,417) – – – Purchase of intangible assets (9,954) (3,337) (2,710) (1,306) Additions of financial assets at fair value through other comprehensive income (3,541) (3,521) – – Additions of financial assets at fair value through profit or loss (17,691) (13,278) – – Cash inflow/(outflow) from additional investment in a subsidiary 794 (1,076) – – Net cash inflow from acquisition of subsidiaries 24 – 207 – – Additional investment in subsidiaries – – (2,780) (10,570) Additional investment in a joint venture – (1,274) – – Additional loans to subsidiaries – – (446,539) (434,437) Repayment of loans from subsidiaries – – 598,595 128,151 Payment for asset retirement (10) (52) – – Proceeds from disposal of property, plant and equipment 803 4,830 – – Proceeds from disposal of assets held for sale 2,000 54,522 – – Proceeds from liquidation of a joint venture 1,519 – – – Proceeds from disposal of financial assets at fair value through other comprehensive income – 14,007 – – Proceeds from sales of financial assets at fair value through profit or loss 4,213 – – – Dividends received from subsidiaries – – 308,547 422,399 Dividends received from joint ventures 17,986 16,401 – – Dividends received from associates 2,600 3,437 – – Dividends received from financial assets at fair value through other comprehensive income 2,572 2,814 – – Net cash (used in)/generated from investing activities (569,263) (361,856) 454,925 103,622 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
23 AUDITED FINANCIAL STATEMENTS 2021 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM FINANCING ACTIVITIES Repayment of loans due to ultimate holding company (250,000) (310) (250,000) (310) Repayment of loans from subsidiaries – – (586,209) (71,653) Drawdown of borrowings 12,734,330 8,959,653 500,000 – Repayment of borrowings (12,778,135) (9,586,469) (75,080) – Payments of lease liabilities (46,794) (43,676) (5,234) (5,019) Repayment of LLA liability (413,018) (260,812) – – Dividends paid to shareholders (109,445) (72,963) (109,445) (72,963) Dividends paid to non-controlling interests (81,411) (91,861) – – Finance expense paid (142,730) (175,980) (90,035) (55,678) Purchase of treasury shares – (2,620) – (2,620) Increase in restricted cash (738) (14,562) – – Net cash used in financing activities (1,087,941) (1,289,600) (616,003) (208,243) NET INCREASE IN CASH AND CASH EQUIVALENTS 284,682 104,223 318,602 10,886 Effect of foreign exchange rate changes 17,052 (7,100) – – CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 1,665,457 1,568,447 20,073 9,187 Increase in assets held for sale – (113) – – CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 36 1,967,191 1,665,457 338,675 20,073
24 FGV HOLDINGS BERHAD STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 Cash flows and non-cash changes in liabilities arising from financing activities are as follows: Non-cash changes Finance Interest/ Lease costs/ transaction additions/ Foreign At interest cost termination exchange Fair value At 1 January Drawdown Repayment # accretion capitalisation (net) movement movement 31 December GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2021 Liabilities Islamic short term trade financing 2,275,107 11,408,237 (11,781,713) 11,816 32,984 – – – 1,946,431 Short term trade financing 258,162 814,170 (839,648) 7,556 397 – 536 – 241,173 Islamic term loans 873,495 11,923 (257,222) 50,382 864 – – – 679,442 Sukuk – 500,000 – 1,451 (5,000) – – – 496,451 Total borrowings 3,406,764 12,734,330 (12,878,583) 71,205 29,245 – 536 – 3,363,497 Lease liabilities 385,826 – (46,794) 14,969 – (32,473) 571 – 322,099 LLA liability 4,213,824 – (413,018) – – – – 3,984 3,804,790 Loans due to ultimate holding company 886,188 – (292,282) 40,759 – – – – 634,665 8,892,602 12,734,330 (13,630,677) 126,933 29,245 (32,473) 1,107 3,984 8,125,051 Asset Restricted cash (63,737) – (738) – – – – – (64,475) Non-cash changes Finance Interest/ Lease costs/ transaction additions/ Foreign At interest cost termination exchange Fair value At 1 January Drawdown* Repayment # accretion capitalisation (net) movement movement 31 December GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2020 Liabilities Islamic short term trade financing 2,775,418 7,922,199 (8,494,389) 40,897 30,982 – – – 2,275,107 Short term trade financing 299,338 891,446 (941,149) 9,101 – – (574) – 258,162 Islamic term loans 873,893 159,604 (209,575) 47,780 1,793 – – – 873,495 Term loans 71,909 – (75,001) 3,092 – – – – - Total borrowings 4,020,558 8,973,249 (9,720,114) 100,870 32,775 v (574) – 3,406,764 Lease liabilities 300,795 – (43,676) 18,667 – 110,346 (306) – 385,826 LLA liability 4,316,146 – (260,812) – – – – 158,490 4,213,824 Loans due to ultimate holding company 886,498 – (42,645) 42,335 – – – – 886,188 9,523,997 8,973,249 (10,067,247) 161,872 32,775 110,346 (880) 158,490 8,892,602 Asset Restricted cash (49,175) – (14,562) – – – – – (63,737) # Included in the repayment are finance expense paid amounted to RM142,730,000 (2020: RM175,980,000). * Included in the previous financial year drawdown was acquisition of subsidiary amounted to RM13,596,000. The cash flows and non-cash changes arising from LLA liability is disclosed in Note 47 to the financial statements.
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