Financial Statements
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FINANCIAL STATEMENTS 111 Directors' Report 116 Statement by Directors 116 Statutory Declaration 117 Independent Auditors' Report 122 Statements of Comprehensive Income 124 Statements of Financial Position 127 Consolidated Statement of Changes in Equity 129 Statement of Changes in Equity 131 Statements of Cash Flows 137 Notes to The Financial Statements 111 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 2017. 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: Datuk Wira Azhar Abdul Hamid (Appointed on 8 September 2017) Dato’ Zakaria Arshad Dato’ Yahaya Abd Jabar Dato’ Mohamed Suffian Awang Datuk Siti Zauyah Md Desa Dato’ Sri Abu Bakar Harun (Appointed on 12 July 2017) Dato’ Ab Ghani Mohd Ali (Appointed on 12 July 2017) Datuk Muzzammil Mohd Nor (Appointed on 12 July 2017) (Alternate Director to Dato’ Ab Ghani Mohd Ali) Datuk Dr. Salmiah Ahmad (Appointed on 31 October 2017) Dr. Mohamed Nazeeb P.Alithambi (Appointed on 31 October 2017) Datuk Mohd Anwar Yahya (Appointed on 23 November 2017) Dr. Nesadurai Kalanithi (Appointed on 1 January 2018) Tan Sri Hj. Mohd Isa Dato’ Hj. Abdul Samad (Resigned on 19 June 2017) Datuk Noor Ehsanuddin Mohd Harun Narrashid (Resigned on 24 August 2017) Dato’ Mohd Zafer Mohd Hashim (Resigned on 31 October 2017) Datuk Dr. Omar Salim (Resigned on 23 November 2017) Tan Sri Dr. Sulaiman Mahbob (Resigned on 1 March 2018) PRINCIPAL ACTIVITIES FINANCIAL STATEMENTS FINANCIAL 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 21 to the financial statements. There were no significant changes in the nature of these 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 143,727 120,769 Non-controlling interests 64,319 - Profit for the financial year 208,046 120,769 ANNUAL INTEGRATED REPORT 2017 112 DIRECTORS’ REPORT DIVIDENDS Dividends on ordinary shares paid or declared by the Company since 31 December 2016 are as follows: RM’000 In respect of the financial year ended 31 December 2016: - Final single tier dividend of 1.0 sen per share, paid on 15 June 2017 36,484 In respect of the financial year ended 31 December 2017: - Interim single tier dividend of 5.0 sen per share, paid on 28 December 2017 182,406 218,890 The Board of Directors do not recommend payment of any final dividend in respect of the financial year ended 31 December 2017. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are shown in the financial statements. SHARE CAPITAL The Companies Act 2016 (“2016 Act”) which came into effect on 31 January 2017 has repealed the Companies Act, 1965. The 2016 Act has abolished the concept of par or nominal value of shares and hence, the share premium, capital redemption reserve and authorised capital are abolished. In accordance with Section 618(2) of the 2016 Act, any amounts standing to the credit of the Company’s share premium account and capital redemption reserve of RM3,371,685,000 and RM10,052,000 respectively become part of the Company’s share capital upon commencement of the 2016 Act. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition. LONG TERM INCENTIVE PLAN The Company established a long term incentive plan (“LTIP”) in the form of employee share grant scheme which is governed by the By-Laws which was approved on 3 February 2016. FINANCIAL STATEMENTS FINANCIAL Pursuant to the LTIP, the Company shall award the grant of up to 10% of the issued and paid-up ordinary share capital of the Company (excluding treasury shares, if any) at any point of time during the duration of the LTIP, to the employees of the Company and its subsidiaries (“Group”) and Executive Director of the Company who fulfil the eligibility criteria as eligible employees and is administered by the LTIP Committee. The LTIP comprises restricted share (“RS”) grant and performance share (“PS”) grant which shall be in force for a period of 10 years commencing from 3 February 2016, being the effective date of the implementation of the LTIP. Details of the LTIP are disclosed in Note 52 to the financial statements. During the financial year, 5,342,400 RS (2016: 859,800 RS) under the LTIP were granted to eligible employees of the Group. Subject to the terms and conditions of the By-Laws, the employees shall be awarded of ordinary shares in the Company, after meeting the vesting conditions as set out in the letter of offer for the shares under the LTIP. All RS granted during the financial year were vested other than those forfeited. The RS granted in previous financial year has a three years vesting period and the first vesting date was on 31 March 2017. FELDA GLOBAL VENTURES HOLDINGS BERHAD 113 DIRECTORS’ REPORT 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, other than those arising from the LTIP as disclosed in Directors’ Interest in Shares and Debentures. 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 except as follows: Shareholdings in Felda Global Ventures Holdings Berhad Number of ordinary shares Date of appointment/ at 1.1.2017 Acquired Vested (Disposed) At 31.12.2017 Datuk Wira Azhar Abdul Hamid 100,000 94,500 - - 194,500 Tan Sri Dr. Sulaiman Mahbob 50,000 - - - 50,000 Dato’ Zakaria Arshad 165,000 - 85,600 - 250,600 STATEMENTS FINANCIAL Dato’ Sri Abu Bakar Harun 800 - - - 800 Dr. Mohamed Nazeeb P.Alithambi 7,000 - - - 7,000 Number of ordinary shares granted under LTIP Grant Date Type At 1.1.2017 Granted (Vested) At 31.12.2017 Dato’ Zakaria Arshad 1.7.2016 RS 147,100 - (44,100) 103,000 30.11.2017 RS - 41,500 (41,500) - Shareholdings in MSM Malaysia Holdings Berhad, a subsidiary of the Group Number of ordinary shares At 1.1.2017 Acquired (Disposed) At 31.12.2017 Tan Sri Dr. Sulaiman Mahbob 20,000 - - 20,000 ANNUAL INTEGRATED REPORT 2017 114 DIRECTORS’ REPORT AUDITORS’ REMUNERATION Details of auditors’ remuneration are set out in Note 11 to the financial statements. DIRECTORS’ REMUNERATION Details of Directors’ remuneration are set out in Note 12 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 issuance premium paid by the Group during the financial year amounted to RM205,000. 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 FINANCIAL STATEMENTS FINANCIAL (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.