Annual Report 2021
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CONTENTS 01 18 54 101 COrpOraTE maNagEmENT SuSTaINabIlITy fINaNCIal INfOrmaTION DISCussion aND rEpOrT STaTEmENTS aNalySIS 02 18 56 101 Vision, Mission and Overview of Group’s Sustainability Financial Statements Culture Statement Business and Commitment and 192 Operations Policy Core Values List of Properties 21 04 57 193 Malaysian Palm Oil Group Key Financial Sustainability Analysis of Supply and Demand Highlights Governance Shareholdings Outlook for 2021 Statement of Value 65 197 24 Added & Distribution Productivity and Notice of Annual Key Financial and Innovations General Meeting 05 Operational Risks Location of Operations Affecting the Group 72 Form of Proxy Performance 06 Care for Environment Group Corporate 25 84 Structure Financial Review of Operations Investor in People 07 Group Organisation 27 94 Chart Operational Review Returning to Community 08 32 Board of Directors & 5-Year Group 98 Secretary Plantation Statistics GRI Content Index 10 34 Profile of Board of Corporate Governance Directors & Secretary Overview Statement 16 42 Profile of Key Senior Audit Committee Management Report 17 47 Overview of the Statement on Risk Business Activities Management and Internal Control NURTURING SUSTAINABILITY 01 ANNUAL REPORT 2021 CORPORATE INfOrmaTION HEaD OffICE SHarE rEgISTrar Wisma IJM Plantations Tricor Investor & Issuing House Lot 1, Jalan Bandar Utama Services Sdn Bhd Mile 6, Jalan Utara Unit 32-01, Level 32, Tower A 90000 Sandakan Vertical Business Suite Sabah, Malaysia Avenue 3, Bangsar South Tel : +6089 667 721 No. 8, Jalan Kerinchi Fax : +6089 667 728 59200 Kuala Lumpur E-mail : [email protected] Malaysia Website : www.ijmplantations.com Tel : +603 2783 9299 Fax : +603 2783 9222 rEgISTErED OffICE E-mail : [email protected] Website : www.tricorglobal.com 2nd Floor, Wisma IJM Jalan Yong Shook Lin STOCK EXCHaNgE lISTINg 46050 Petaling Jaya Selangor Darul Ehsan Main Market of Bursa Malaysia Malaysia Securities Berhad Tel : +603 7985 8288 since 2 July 2003 Fax : +603 7952 1200 BMSB Code : 2216 E-mail : [email protected] Reuters Code : IJMP.KL Website : www.ijm.com Bloomberg Code : IJMP MK auDITOrS prINCIPAL baNKErS PricewaterhouseCoopers PLT 1. Malayan Banking Berhad (LLP0014401-LCA & AF: 1146) 2. United Overseas Bank (Malaysia) Berhad Chartered Accountants 3. Oversea-Chinese Banking Corporation Level 10, 1 Sentral Limited Jalan Rakyat 4. CIMB Bank Berhad Kuala Lumpur Sentral 5. PT. Bank Mandiri (Persero), Tbk 50706 Kuala Lumpur 6. PT. Bank Danamon, Tbk Malaysia 7. PT. Bank CIMB Niaga, Tbk Tel : +603 2173 1188 8. United Overseas Bank Limited Fax : +603 2173 1288 9. Sumitomo Mitsui Banking Corporation Website : www.pwc.com/my/en.html www.ijmplantations.com/report.php 02 IJm plaNTaTIONS bErHaD VISION To be a leading regional plantation group mISSION To uphold the highest standards of performance in our plantations and agri-businesses CulTurE We strive to: 1 uphold the highest standards of 3 Ensure the standard of our professionalism and exemplary agricultural and milling practices corporate governance to is of quality that matches or maximise the benefits for all exceeds others in the industry; stakeholders; 4 Create a conducive environment 2 respect the different cultures, for team spirit among our gender, religion, human rights employees to work towards a and dignity of our stakeholders; unified workforce; and 5 be a responsible and respected corporate citizen with concerns for social, safety, health and environmental issues. NurTurINg SuSTaINabIlITy 03 aNNual rEpOrT 2021 COrE VALUES at IJmp, we are guided by a set of core values in everything we do. These core values form an integral part of our corporate culture which is geared towards sustainable development. TEamWOrK These values, with the acronym “I-TIC” are We work, collaborate and INTEgrITy, TEamWOrK, succeed in unity, believing INNOVaTION and CuSTOmEr fOCuS. and trusting each other in pursuing our shared goals. We embrace a philosophy of openness in acknowledging differences of opinions, cultures and contributions among all team members, treating all with respect. INTEgrITy We act with professionalism in everything we do and with everyone we deal with, always delivering on our promise. CuSTOmEr fOCuS We place our customers at the heart of everything we do, constantly delivering at the right time with quality and great attitude. INNOVaTION We deliver customers’ expectations with the IJm We believe in continuous improvements, exploring mark of Excellence. new ideas and promoting creative thinking. We commit passionately to excel at all we do, constantly striving to push the limits and surpass standards of excellence. 04 IJM PLANTATIONS BERHAD GROUP KEY fINaNCIal HIgHlIgHTS rEVENuE prOfIT/(lOSS) bEfOrE TaX OpEraTINg prOfIT EarNINgS bEfOrE INTErEST, (RM Million) (RM Million) (RM Million) TaX, DEprECIaTION & amOrTISaTION (EbITDa) (RM Million) (50.47) 935.69 739.13 272.13 290.06 10.14 407.32 122.66 • 2021 • 2020 STATEMENT OF VALUE aDDED & DISTrIbuTION 31.3.2021 31.3.2020 rm’000 rm’000 VALUE aDDED Revenue 935,693 739,133 - Purchases of goods & services (355,045) (439,338) Total value added 580,648 299,795 DISTrIbuTION To employees 141,950 154,547 - Employee benefits expense To governments - Income tax expense 57,122 22,507 - Sabah sales tax 28,667 21,632 - MPOB cess and windfall levy 3,556 1,820 To providers of capital - Dividends 17,612^ 17,612* - Finance costs - Interest expense 17,427 22,687 - Net foreign exchange differences on borrowings - 37,717 - Non-controlling interests 9,924 (9,556) Retained for future reinvestment & growth 304,390 30,829 580,648 299,795 reconciliation Profit/(Loss) for the year 205,083 (63,423) Add : Depreciation & amortisation 116,919 111,864 Finance costs - Interest expense 17,427 22,687 - Net foreign exchange differences on borrowings - 37,717 Employee benefits expense 141,950 154,547 Income tax expense 57,122 22,507 Sabah sales tax 28,667 21,632 MPOB cess and windfall levy 3,556 1,820 Non-controlling interests 9,924 (9,556) Total value added 580,648 299,795 Value added is a measure of wealth add created. The above statement shows the Group’s value added for 2021 and 2020 and its distribution by way of payments to employees, goverments and capital providers, with the balance retained in the Group for future reinvestment and growth. ^ Dividends in respect of financial year ended 31 March 2020 were paid on 18 August 2020. * Dividends in respect of financial year ended 31 March 2019 were paid on 17 July 2019. NURTURING SUSTAINABILITY 05 ANNUAL REPORT 2021 LOCATION OF OpEraTIONS 19 18 16 KOTa KINABALU 34 17 15 14 12 13 SaNDaKaN 33 bELURAN 11 1 2 TELUPID 9 4 3 5 10 8 7 6 SabaH laHaD DaTu TaWAU TaraKaN TaNJuNg 20 21 SElOr 22 32 EaST PALEmbaNg KalImaNTaN 28 26 23 36 24 27 25 30 31 35 SumaTra 29 SaNGATTa baNDar lampuNg SamarINDa plaNTaTION SErVICES 3 Minat Teguh Estate 26 Multi Estate 1 Wisma IJM Plantations 5 Sijas Estate 27 IPS Estate 10 Quality, Training and Research Centre 6 Desa Talisai South Estate 28 KBSA Estate 13 Sugut Training Centre 8 Desa Talisai North Estate 29 Alumga Estate 36 Kutim Training Centre 9 Meliau Estate 11 Sungai Sabang Estate 14 Berakan Maju Estate prOCESSINg CONSErVaTION 15 Excellent Challenger I Estate 2 IJMEO Kernel Crushing Plant 16 Excellent Challenger II Estate 4 Minat Teguh Palm Oil Mill 33 Hundred-Acre Wood (Malaysia) 17 Rakanan Jaya South Estate 7 Desa Talisai Palm Oil Mill 34 Secret Garden (Malaysia) 19 Rakanan Jaya North Estate 12 Sabang Palm Oil Mill I 35 Hundred-Acre Wood (Indonesia) 20 Bahagia Estate 18 Sabang Palm Oil Mill II 21 Prima Estate 30 IPS Palm Oil Mill & Kernel Crushing Plant 22 Permai Estate 31 Sinergi Palm Oil Mill 23 Pertama Estate 32 Prima Palm Oil Mill 24 Belidan Estate 25 Manubar Estate 06 IJm plaNTaTIONS bErHaD GROUP COrpOraTE STruCTurE aS aT 31 marCH 2021 INVESTmENT plaNTaTION prOCESSINg OTHErS HOlDINg 100% 100% 100% 100% Gunaria Sdn Bhd Berakan Maju IJM Edible Oils Ratus Sempurna Sdn Bhd Sdn Bhd Sdn Bhd Property holding 100% Excellent Challenger 100% (M) Sdn Bhd IJM Biofuel Sdn Bhd 100% Dormant Rakanan Jaya Sdn Bhd 100% Akrab Perkasa 95% Sdn Bhd PT Karya Bakti Sejahtera Dormant Agrotama 100% 95% Desa Talisai Palm Oil PT Sinergi Agro Industri Mill Sdn Bhd Dormant 100% Dynasive Enterprise 100% Sdn Bhd Sabang Mills Sdn Bhd 95% Dormant PT Prima Alumga 100% 100% Sijas Plantations Minat Teguh Sdn Bhd Sdn Bhd Dormant 95% PT Primabahagia Permai 100% Desa Talisai 90% Sdn Bhd PT Indonesia Dormant Plantation Synergy 20% PT Perindustrian Sawit Sinergi Refining of palm products, kernel crushing and manufacturing of oleochemicals* * The construction of the plant is in progress and operation has not commenced NURTURING SUSTAINABILITY 07 ANNUAL REPORT 2021 GROUP ORGANISaTION CHarT bOarD Of DIrECTOrS SECurITIES NOmINaTION & auDIT COMPANy & OpTIONS rEmuNEraTION COmmITTEE SECrETary COmmITTEE COmmITTEE • risk management Committee • Internal audit CfO & EXECuTIVE CEO & DIrECTOr, maNAGINg CEO DIrECTOr INDONESIaN OpEraTIONS grOup OpEraTIONS OpEraTIONS SuppOrT aND prOJECT SErVICES TEam • Estates • agri management • Estates • processing Services • processing • Commodity Selling & Outside Crop • finance, IT & accounts • Human resource • land & legal • purchasing & administration • research, Training & Development 08 IJM PLANTATIONS BERHAD BOARD OF DIRECTORS & SECRETARY 2 JOSEPH TEK CHOON YEE Chief Executive Officer & Managing Director Malaysian | Age 55 | Male 1 PUSHPANATHAN A/L S. A. KANAGARAYAR Independent Non-Executive Chairman Malaysian | Age 69 | Male 3 PURUSHOTHAMAN A/L KUMARAN • Chief Financial Officer