FELDA GLOBAL VENTURES HOLDINGS BERHAD Annual Report 2014 Foreword to Shareholders 12 Chairman’S Statement 16 CEO’S Statement
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Ingenuity Incorporated FELDA GLOBAL VENTURES HOLDINGS BERHAD Annual Report 2014 Foreword to Shareholders 12 Chairman’s Statement 16 CEO’s Statement About FGV Success starts 22 Corporate Information with opportunity. 24 Board of Directors Opportunity is knocking on the door 36 Key Management for FGV. Opportunities that we will pursue to advance our growth in all 44 Business Clusters areas of our business endeavours. 46 Organisational Chart With positive momentum, a focused business direction and a commercially- 48 Calendar of Events driven management team, we are 52 Awards & Accolades ready to soar even higher. We look forward to a future driven by Strategy and Value Creation ingenuity, resourcefulness and a visionary outlook to achieve even 56 Market Risks & Opportunities more success for the Group. 58 Global Strategic Blueprint (GSB) 61 Business Model 62 Investor Relations Performance Review & Progress 68 3-Year Financial Summary 69 Business Operations Review – Palm Upstream Introduction – Palm Downstream 02 Company Profile – Rubber 04 Vision, Mission and Values – Sugar – R&D and Agri Services 06 Key Milestones – Transport, Logistics, Marketing and Others Performance Highlights (TLMO) 08 Financial 96 Human Resources Strategy 08 Social 98 Corporate Social Responsibility 09 Health & Safety 104 Sustainability Report 09 Environment 110 Health, Safety and Environment Reports Others 116 Statement on Corporate Governance 325 Analysis on Shareholdings 139 Report on the Audit Committee 328 Top 10 Properties of the FGV Group 149 Statement on Corporate Integrity 331 Additional Disclosure: 150 Statement on Risk Management – Utilisation of Proceeds and Internal Control – Share Buy-Back 156 Statement on Directors’ Responsibility – Options, Warrants or Convertible Securities – Depository Receipt Programme Financial Statements – Material Sanctions and/or Penalties 158 Directors’ Report – Non-Audit Fees 162 Statement by Directors – Variation in Result – Profit Guarantee 162 Statutory Declaration – Material Contracts 163 Independent Auditors’ Report – Revaluation Policy 165 Statements of Comprehensive Income – Recurrent Related Party Transactions of 167 Statements of Financial Position Revenue or Trading Nature 169 Consolidated Statement of Changes in Equity Annual General Meeting 171 Statement of Changes in Equity 335 Notice of Annual General Meeting 173 Statements of Cash Flows 337 Statement Accompanying Notice of Annual 177 Notes to the Financial Statements General Meeting 324 Supplementary Information 338 Administrative Details • Proxy Form • Request Form CONTENTS Felda Global Ventures Holdings Berhad 7th Annual General Meeting Venue : Banquet Hall 1, Level B2, Menara Felda, Platinum Park, No. 11, Persiaran KLCC, 50088 Kuala Lumpur Date : 16 June 2015 Time : 11 a.m. COMPANY PROFILE Felda Global Ventures Holdings Berhad (FGV or the Group) is one of Malaysia's leading global diversified agri-businesses operating under six main business Clusters: Palm Upstream, Palm Upstream Palm Downstream, Rubber, Sugar, R&D and Agri Services, and Transport, Logistics, Marketing and Others (TLMO). Currently, FGV is the world’s largest producer of crude palm oil (CPO) and the third largest oil palm plantation operator. With operations in more than 10 countries across North America, Europe, Asia and the Middle East, FGV aspires to be one of the top 10 agri- business conglomerates in the world by 2020. Palm Downstream The Palm Upstream Cluster is FGV’s largest revenue earner and forms the core of the company. With a total land bank of more than 450,000 hectares, Palm Upstream is responsible for FGV’s status as the world’s largest CPO producer which produces more than three million tonnes of CPO annually. Rubber The Palm Downstream Cluster protects the upstream operations by providing a guaranteed uptake of products. Leveraging on its secured pipeline of CPO feedstock, the Cluster is now venturing into more innovative and wider profit margin products such as biodiesel, tocotrienol, graphene and carbon nanotubes. These will open new markets for FGV in higher growth industries including aviation, defense and oil & gas. Moving in parallel to Sugar these products, FGV is increasing its market share in oleochemicals, oils and fats, and fast moving consumer goods. The Rubber Cluster is an important component of its crop diversification programme. With almost 60 years of experience in the rubber plantation sector, FGV is able to tap into a wealth of knowledge to access the growing global market for processed Research & rubber. Its market-leading rubber processing operations are Development (R&D) backed by proven rubber estate management and advisory services credentials. and Agri-Services The Sugar Cluster contributes further to the company’s successes. Through its subsidiary MSM Malaysia Holdings Berhad (MSM), FGV is Malaysia’s leading refined sugar producer. FGV commands Transport, Logistics, more than 64 percent of the local refined sugar market with an Marketing and annual production capacity of over 1.1 million tonnes. Based on double digit growth of global sugar demand and FGV’s expansion Others (TLMO) through acquisitions and joint ventures with regional powerhouses, MSM is poised to become Asia-Pacific’s largest sugar hub. pg 2 Felda Global Ventures Holdings Berhad Introduction France & Spain 2 trading offices* Myanmar China - 2 refineries* Distribution of Highlights - 1 bulking installation Performance Turkey packed products Cambodia 1 refinery* Distribution of Canada packed products 1 canola & soybean crushing & refining facility Philippines Distribution of packed products Foreword to Shareholders Malaysia USA – 370,922 ha of oil palm plantation 1 oleochemical plant – 71 mills – 5 crushing plants – 7 refineries Plantations – 1 oleochemical plant* – 15,429 ha of rubber plantation – 8 rubber processing facilities About FGV Bulking Installations – 2 sugar refineries – 4 bulking installations Canola & Soybean Pakistan – 7 transport hubs 1 refinery# Sugar Facilities Distribution of Packed Products Indonesia Thailand – 56,422 ha of oil palm Refineries plantation 1 rubber processing facilities Creation – 1 refinery* Sales & Marketing – 12,844 ha rubber plantation – 1 rubber processing facility Strategy and Value Oleochemicals – 1 bulking installation Rubber Manufacturing * Joint-ventures # Associates Performance FGV’s Global Presence Review & Progress Underpinning FGV’s businesses is its world-class R&D and Agri Furthermore, with the recent establishment of FGV Trading Sdn Services Cluster. Four decades of research and development have Bhd that focus on trading and tolling business, we are on the culminated in South East Asia’s largest biotechnology centre, led fast track to becoming an international palm oil trader. Reports by a team of highly specialised scientists. The Cluster’s key objective is to generate cutting-edge agri-business technologies to FGV now takes the lead in FELDA’s commitment to agricultural enhance operational performance and commercial utilisation sustainability by managing the Group’s active participation in the across all facets of FGV. The company’s award-winning Yangambi Roundtable on Sustainable Palm Oil (RSPO). In addition to being oil palm planting material, which has 40 percent market share in one of RSPO’s earliest members, FGV represents the first complete Malaysia, is just one of R&D’s innovative products. palm oil supply chain to attain the International Sustainability and Carbon Certification (ISCC). This further cements its determination The Transport, Logistics, Marketing and Others (TLMO) Cluster to take a leadership stance in sustainable operations. ensures integrated supply-chain support across all of FGV’s core Financial Statements business activities. The profitable, multi-billion ringgit operation FGV’s progression towards becoming one of the world’s leading possesses the world’s largest bulking and storage facilities for agri-businesses by the year 2020 will open up global possibilities vegetable oil. It is further tasked with connecting and controlling and potentials through our agri-business solutions. With world- the flow of assets across FGV’s businesses, driving group-wide class technology and the passion of its more than 19,000 efficiencies. Looking ahead, the Cluster is strengthening an talented employees, FGV will meet the needs of a green and Others international capacity by forging partnerships with overseas sustainable planet. integrated logistics providers in key export markets. pg Meeting Annual Report 2014 3 Annual General To be the leading globally diversified integrated agri-business. ISION ISSION To be a global leader by: • Creating value through our human capital • Championing our locally invested culture • Building an integrated value chain advantage • Cultivating diversification in commodities and geography VALUES pg 4 Felda Global Ventures Holdings Berhad Introduction Highlights Performance World’s 3rd largest oil palm plantation operator: Operates more than World’s largest crude palm oil (CPO) producer and produces 450,000 hectares in Malaysia more than 3 million tonnes of and Kalimantan, Indonesia. Foreword to CPO annually. Shareholders About FGV Malaysia’s leading Four decades of research and globally diversified development – Establishment agri-business. of southeast Asia’s largest biotechnology centre. Creation Strategy and Value company in the world to pioneer and produce the Performance high-grade Review & Progress OPERATIONAL carbon nanotubes (CNT) The world's largest and graphene bulking