FGV Annual Report 2018

29 PRACTICED LEADERSHIP BY EXAMPLE 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 MESSAGE FROM THE GROUP CHIEF EXECUTIVE OFFICER COMMITMENT TO SUSTAINABILITY The Board and Management of FGV are fully committed to sustainable development. Even as we work to create value for our Shareholders, we must also strive to minimise our impact on the planet and bring positive change to all our Stakeholders. We believe that ultimately, sustainability must be part of our culture, embedded in every single employee and throughout our operations. As part of our sustainability efforts, we aim to reduce any negative impact on the environment from our existing operations. Additionally, we stay true to our pledge of zero deforestation and reiterate our commitment not to develop on peat soil regardless of depth. We are proud of our heritage, which was founded on the noble intentions of alleviating extreme poverty. We will work with, and never against, local communities and peoples. Wherever we go and in all that we do, we will do our best to find a balance between the well-being of the people, the environment and the Company. I believe there is no other way to move forward. As I write this, the certification of FGV’s Serting Mill is still suspended by the RSPO for worker violations and other non-compliances. The issues seen in Serting are instructive for us. There were many lapses in our management of Serting Complex, even when benchmarked against our own internal standards and policies. The good news is, we are now working twice as hard on corrective actions. There is far greater awareness within our organisation that once a commitment is made, it must be followed up with meaningful action. PERCEPTION AND REALITY The perception of FGV today is reflected in our share price. On the day I came onboard, our share price was at RM1.01, much better than the low of 63 sen it fell to on 14 December 2018, but a far cry from its 12-month high of RM2.15. Our listing price of RM4.55 seems like a distant dream. The question I ask myself often is: when will we regain our footing, restore our pride and achieve our potential? In 2018, with CPO prices under pressure, all the major plantation companies were negatively impacted, as reflected in the reduction of their market capitalisation by about 6%. In contrast, our share price fell by 60% in the same period. That decline in share price is reflective of our operational and financial performance, leadership issues, and the market’s negative perception of FGV and our capacity to achieve a turnaround. While we execute our Transformation Plan, we must regain the confidence of the market and prove that we can perform at least as well as our peers. THE YEAR AHEAD The year 2019 will be our year of reckoning. There is much to do and even more to be achieved. Yet, we are poised for change, renewal and growth. With the direction and guidance of our Board of Directors and hard work from our dedicated team, I have no doubt that we will succeed. MD&A Financial Capital • Financial performance for the Group and Sectors Natural Capital • Landbank and estates’ performance • Environmental stewardship Manufactured Capital • Operational performances: - Upstream (mills) - Downstream - Sugar - Logistics & Support Businesses Intellectual Capital • Research and Development • Intellectual Property Human Capital Social & Relationship Capital pages 31-33 pages 34-38 pages 39-44 pages 45-47 pages 48-52 pages 53-55 HIGHLIGHTS Bursa Securities Listing Requirements Global Reporting Initiative Standards Bursa Malaysia’s Corporate Governance Guide 2017 International Integrated Reporting Council Framework Bursa Securities MD&A Guidelines The report is aligned with We have narrated the Management Discussion & Analysis (MD&A) on the Six Capitals of Integrated Reporting. This provides a more holistic view of both the financial and non-financial performance of our business.