Committed to a Sustainable Future
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The Management Discussion & Analysis provides a thorough overview of our business activities for the year and provides Management a glimpse into our strategic plans moving Discussion & forward. Analysis P. 10 Our year in pictorial review and highlights of media coverage in 2016. Corporate Calendar & Media Highlights P. 42-43 A detailed report of our initiatives in the discharge of our corporate responsibilities. Corporate Responsibility P. 46 Committed to a Sustainable Future ANNUAL REPORT 2016 TH PLANTATIONS BERHAD • Annual Report 2016 1 > Cover Rationale Three palm fronds come together to depict the interwoven nature of our business, our environment and our communities. While each frond stands as an individual, there are areas of overlap as there are between our business, environment and communities. The three fronds work together in harmony to provide sustenance to the oil palm tree and we endeavour to find a similar balance in our business activities to sustain our Company. The green and gold reflect our Islamic roots and our efforts to embody its teachings in our Company culture. Finally, the four icons below the title of the report symbolise our approach towards corporate responsibility and sustainability: through good agricultural practice, by nurturing our people, by protecting the environment and by practising good corporate governance. rd ANNUAL GENERAL 43 MEETING VENUE Pacific Ballroom, Level 2 Seri Pacific Hotel Kuala Lumpur Jalan Putra, 50746 Kuala Lumpur DATE Monday, 8 May 2017 TIME 10.00 a.m. Please scan this QR code with your smartphone to access our website www.thplantations.my The Management Discussion & Analysis provides a thorough overview of our business activities for the year and provides Management a glimpse into our strategic plans moving Discussion & forward. Analysis P. 10 Our year in pictorial review and highlights of media coverage in 2016. Corporate Calendar & Media Highlights P. 42-43 A detailed report of our initiatives in the discharge of our corporate responsibilities. Corporate Responsibility P. 46 Inside this report > 04 About this Report 46 Corporate Responsibility 05 Notice of the 43rd Annual General 58 Statement on Corporate Governance Meeting 78 Statement on Risk Management 07 Statement Accompanying the Notice of and Internal Control the 43rd Annual General Meeting 83 Audit Committee Report 10 Management Discussion & Analysis 89 Additional Compliance Information 20 Corporate Information 90 Performance Statistics 22 Corporate Structure 98 Consolidated Financial Statements 26 Board of Directors 195 Analysis of Shareholdings 28 Directors’ Profiles 198 Properties Owned by the Group 39 Senior Management Profiles 204 Corporate Directory 42 Corporate Calendar 208 Abbreviations 43 Media Highlights • Proxy Form 6 7 32 102,000 Palm Oil Mills Forestry Plantations Oil Palm Estates hectares with a total milling in Sabah in Malaysia & Indonesia of land bank capacity of 240 metric tonnes per hour as at 15 March 2017 The Journey to A Sustainable Future FFB Production Pahang Terengganu Johor FFB Production Yield 800,000 Indonesia 23.86 24 700,000 Sarawak 22.43 22.39 Sabah 21.51 600,000 21.48 22 20.58 (MT/Ha) FFB Yield 20.52 500,000 19.89 20 400,000 18.17 FFB Production (MT) FFB Production 300,000 18 200,000 321,273 286,723 347,546 519,289 463,949 513,276 524,665 781,577 788,090 797,600 731,509 16 100,000 15.36 0 14.40 14 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 19% 22% Semenanjung Sarawak 3% 42% 6% Average Age: 9% Average Age: 10 Years 8 Years 19% 23% 7% 20% 62% Group 20% Average Age: 15% 0% 9 Years 8% 16% Sabah Indonesia Average Age: Average Age: 16 Years 1 Year 48% 32% 29% 100% as at 15 March 2017 25 >(Old Mature) 20 - 25 (Mature) 10 - 19 (Prime Mature) 4 - 9 (Young Mature) < 4 (Immature) Our Core Business Developing Marketing and CPO, PK cultivating and FFB oil palm Processing FFB into CPO and PK Management Agent About this Report TH Plantations Berhad (“THP”) is committed to the transparent disclosure of all its business activities and endeavours to provide clear and accurate information about all its business activities. This includes balanced and objective disclosures about our financial performance, our risks and opportunities and our future prospects. These are benchmarked against our short-, medium- and long-term strategic goals, which are also detailed in this report. Scope and boundary This report contains forward-looking statements characterised by the use of words or phrases such as “might”, “forecast”, “anticipate”, This report has been prepared in accordance with the guidelines “project”, “may”, “believe”, “predict”, “expect”, “continue”, “will”, provided by Bursa Malaysia Securities Berhad (“Bursa Malaysia”). The “estimate”, “target”, and other similar expressions. The report may also scope of this report is limited to the business activities of THP and its contain forecast information such as improvements in production or subsidiaries where it has a controlling interest for the financial year expectations of commodity price movements. Finally, the report may ended 31 December 2016. Where applicable or helpful, references to also stipulate a certain course of action with regard to our business previous financial years and to plans for the future will be made. activities moving forward into the future. As part of our efforts to incorporate best practices into our annual We affirm that these statements reflect our position and beliefs disclosures, we have prepared a “Management Discussion & Analysis” as at the time of writing. However, we recognise that we operate (“MD&A”) section that provides a more comprehensive analysis of in a changing environment. Hence, there are uncertainties or new our business performance and the way it relates to our strategy. The developments that could cause actual results or actions to differ from information in the MD&A also provides a more thorough discussion those stated in these forward-looking statements. Thus the forward- of our business risks and opportunities, and our plans to mitigate looking statements should not be understood as a guarantee of and take advantage of them, respectively. The MD&A has also been results or of the course of action that will be taken. prepared in accordance with Bursa Malaysia guidelines. Signed on behalf of the Board of Directors: TAN SRI DATO’ SRI AB. AZIZ BIN KASIM DATO’ SRI ZAINAL AZWAR BIN ZAINAL AMINUDDIN Chairman Chief Executive Officer/Executive Director < 4 TH PLANTATIONS BERHAD • Annual Report 2016 Notice of the 43rd Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Forty-Third Annual General Meeting (“43rd AGM”) of TH Plantations Berhad (“THP” or “the Company”) will be held at the Pacific Ballroom, Level 2, Seri Pacific Hotel Kuala Lumpur, Jalan Putra, 50746 Kuala Lumpur on Monday, 8 May 2017 at 10.00 a.m. to transact the following businesses: As Ordinary Businesses 1. To receive the Audited Financial Statements for the year ended 31 December 2016 together with Reports of Please refer to the Directors and the Auditors thereon. Explanatory Note 1 2. To approve the declaration of a First and Final Single Tier Dividend of 6 sen per Ordinary Share for the year Ordinary Resolution 1 ended 31 December 2016. 3. To approve the payment of Directors’ Fees and benefits payable of RM1,270,000.00 for the year ended Ordinary Resolution 2 31 December 2016. 4. To re-elect Dato’ Azizan bin Abd Rahman, who shall retire by rotation in accordance with Article 84 of the Ordinary Resolution 3 Constitution of the Company and being eligible, offered himself for re-election. 5. To re-elect Dato’ Amran bin Mat Nor, who shall retire by rotation in accordance with Article 84 of the Ordinary Resolution 4 Constitution of the Company and being eligible, offered himself for re-election. 6. To re-elect Dato’ Sri Zainal Azwar bin Zainal Aminuddin, who shall retire by rotation in accordance with Article Ordinary Resolution 5 84 of the Constitution of the Company and being eligible, offered himself for re-election. 7. To re-appoint KPMG Desa Megat PLT (Formerly known as KPMG Desa Megat & Co.) as Auditors of the Ordinary Resolution 6 Company in respect of the financial year ending 31 December 2017 and to authorise the Board of Directors to determine the Auditors’ remuneration. As Special Business To consider, and if deemed fit, to pass with or without modification, the following Resolution: 8. Proposed Renewal of Shareholders’ Mandate for Existing Recurrent Related Party Transactions of a Ordinary Resolution 7 Revenue or Trading Nature “THAT, subject always to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), approval be and is hereby given for the renewal of the existing Shareholders’ Mandate for the Company and/or its Subsidiaries to enter into recurrent related party transactions of a revenue or trading nature as set out in Section 2.4.1 of the Circular to Shareholders dated 14 April 2017 with the related parties described therein provided that such transactions are necessary for the Group’s day-to- day operations, carried out in the normal course of business, at arm’s length, on normal commercial terms, not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders; AND THAT such approval granted shall take effect immediately upon passing of this Resolution and shall continue to be in force until: i. the conclusion of the next AGM of the Company following the forthcoming AGM at which such mandate is approved, at which time it will lapse, unless by a resolution passed at the next AGM, the mandate is renewed; ii. the expiration of the period within which the next AGM of the Company after the forthcoming AGM is required to be held pursuant to Section 340(2) of the Companies Act, 2016, (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Companies Act, 2016); or iii.