OIL OIL OIL ADVANCING RESPONSIBLY Audited Financial Statements 2022
INSIDE THIS REPORT 2 Directors’ Report 6 Statement by Directors 6 Statutory Declaration 7 Independent Auditors’ Report 12 Financial Statements 27 Notes to the Financial Statements WE ARE ADVANCING RESPONSIBLY FGV is progressing with confidence towards being a global agribusiness company while creating value in a responsible and sustainable way. Our business foresight and responsible practices have led us to triumphantly establish our presence in nine countries across the globe, ensuring our communities prosper economically, environmentally and socially as we safeguard the interests of our stakeholders. As we are Advancing Responsibly, we are aligned with our purpose of building an integrated value chain advantage. Our business is growing beyond our core sectors of plantations to include opportunities which will drive our global agribusiness ambitions.
STATEMENT ON DIRECTORS’ RESPONSIBILITY The Directors are required by the Companies Act 2016 (Act) to prepare Financial Statements for each financial year which give a true and fair view of the financial position of the Group and of the Company at the end of the financial year and of the financial performance and cash flows of the Group and of the Company for the financial year. As required by the Act and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Financial Statements for the financial year ended 31 December 2022 have been prepared in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Act. The Directors consider that in preparing the Financial Statements for the financial year ended 31 December 2022 set out on pages 12 to 177, the Group and the Company have applied the appropriate accounting policies on a consistent basis and supported by reasonable and prudent judgments and estimates. The Directors have responsibility for ensuring that proper accounting records are kept. The accounting records should disclose with reasonable accuracy the financial position of the Group and of the Company to enable the Directors to ensure that the Financial Statements comply with the Act. The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. This Statement was made in accordance with a resolution of the Board of Directors dated 29 March 2023.
2 FGV HOLDINGS BERHAD 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 2022. 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: Dato' Dzulkifli Abd Wahab (Chairman) Dato’ Amiruddin Abdul Satar Dato’ Shahrol Anuwar Sarman Dato’ Nonee Ashirin Dato’ Mohd Radzi Dato’ Mohd Rafik Shah Mohamad Nik Fazila Nik Mohamed Shihabuddin Kasmuri Sukardi Datuk Yatimah Sarjiman (Appointed on 8 April 2022) Azmin Che Yusoff (Appointed on 13 September 2022) Dato’ Yusli Mohamed Yusoff (Demised on 10 March 2022) Datuk Dr. Zunika Mohamed (Resigned on 11 March 2022) The Company was granted a relief by Companies Commission of Malaysia from disclosing the names of the Directors of the Company’s subsidiaries in this report as required under Section 253(2) of Companies Act 2016 in Malaysia. The names of the Directors of the subsidiaries are set out in the respective subsidiaries’ Directors’ Report and the Board deems such information as included herein by such reference and shall form part hereof. PRINCIPAL ACTIVITIES 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 23 to the financial statements. There were no significant changes in the nature of the activities of the Group and the Company during the financial year. FINANCIAL RESULTS Group RM’000 Company RM’000 Profit attributable to Owners of the Company 1,329,226 553,445 Non-controlling interests (60,625) - Profit for the financial year 1,268,601 553,445
AUDITED FINANCIAL STATEMENTS 2022 3 DIRECTORS’ REPORT DIVIDENDS Dividends on ordinary shares paid or declared by the Company since 31 December 2021 are as follows: RM’000 In respect of the financial year ended 31 December 2021: - Final single tier dividend of 8.0 sen per share, paid on 31 March 2022 291,852 In respect of the financial year ended 31 December 2022: - Interim single tier dividend of 4.0 sen per share, paid on 29 September 2022 145,926 437,778 On 27 February 2023, the Board of Directors agreed to declare the payment of a final single tier dividend of 11.0 sen per ordinary share amounting to RM401.30 million. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are shown in the financial statements. 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. 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. AUDITORS’ REMUNERATION Details of auditors’ remuneration are set out in Note 12 to the financial statements, which are as follows: Group RM’000 Company RM’000 Principal auditors’ remuneration: - Audit fee 4,251 642 - Other assurance services 1,471 1,187 - Non-audit fee 2,680 2,420 Member firms of principal auditors’ remuneration: - Audit fee 1,055 - Other firms of auditors’ remuneration: - Audit fee 146 -
4 FGV HOLDINGS BERHAD DIRECTORS’ REPORT DIRECTORS’ REMUNERATION Details of Directors’ remuneration are set out in Note 13 to the financial statements, which are as follows: Group RM’000 Company RM’000 Directors’ remuneration: - Fees 2,070 1,930 - Benefits in kind 15 15 - Other benefits 621 578 2,706 2,523 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 insurance premium paid by the Group during the financial year amounted to RM2,123,000 (2021: RM2,123,000). 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 (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. At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or (b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
AUDITED FINANCIAL STATEMENTS 2022 5 STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. In the opinion of the Directors: (a) the results of the Group’s and the Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature, other than as disclosed in Notes 57 to the financial statements; and (b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made. AUDITORS The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to continue in office. This report was approved by the Board of Directors on 29 March 2023. Signed on behalf of the Board of Directors: DATO’ DZULKIFLI ABD WAHAB DATO’ MOHD RAFIK SHAH MOHAMAD CHAIRMAN DIRECTOR Kuala Lumpur DIRECTORS’ REPORT
6 FGV HOLDINGS BERHAD We, Dato’ Dzulkifli Abd Wahab and Dato’ Mohd Rafik Shah Mohamad, two of the Directors of FGV Holdings Berhad, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 12 to 177 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2022 and of the financial performance and cash flows of the Group and of the Company for the financial year ended on that date in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. Signed on behalf of the Board of Directors in accordance with a resolution dated 29 March 2023. DATO’ DZULKIFLI ABD WAHAB DATO’ MOHD RAFIK SHAH MOHAMAD CHAIRMAN DIRECTOR Kuala Lumpur STATUTORY DECLARATION PURSUANT TO SECTION 251(1) OF THE COMPANIES ACT 2016 I, Dato’ Mohd Hairul Abdul Hamid, the Officer primarily responsible for the financial management of FGV Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 12 to 177 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960. DATO’ MOHD HAIRUL ABDUL HAMID MIA membership no. 14173 Subscribed and solemnly declared by the abovenamed Dato’ Mohd Hairul Abdul Hamid in Kuala Lumpur on 29 March 2023, before me. COMMISSIONER FOR OATHS STATEMENT BY DIRECTORS PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016
AUDITED FINANCIAL STATEMENTS 2022 7 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Our opinion In our opinion, the financial statements of FGV Holdings Berhad (“the Company”) and its subsidiaries (“the Group”) give a true and fair view of the financial position of the Group and of the Company as at 31 December 2022, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. What we have audited We have audited the financial statements of the Group and of the Company, which comprise the statements of financial position as at 31 December 2022 of the Group and of the Company, and the statements of profit or loss, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 12 to 177. Basis for opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financial statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and other ethical responsibilities We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Our audit approach As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements of the Group and of the Company. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and controls, and the industry in which the Group and the Company operate. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P)) PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), Chartered Accountants, Level 10, Menara TH 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, P.O.Box 10192, 50706 Kuala Lumpur, Malaysia T: +60 (3) 2173 1188, F: +60 (3) 2173 1288, www.pwc.com/my
8 FGV HOLDINGS BERHAD REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters How our audit addressed the key audit matters Land Lease Agreement (“LLA”) liability assessment As at 31 December 2022, the LLA liability for the Group amounted to RM3.68 billion. We focused on this area as the fair value of the LLA liability is determined based on cash flows projections, which require significant estimates made by management on the assumptions used in the calculations, in particular, prices of Crude Palm Oil (“CPO”) and Palm Kernel (“PK”), average Fresh Fruit Bunches (“FFB”) yield, mature and immature estate costs and discount rate. Refer to Note 3(i) in the significant accounting policies, Note 5(i) in the critical accounting estimates and judgments and Note 46 to the financial statements. We have performed the following audit procedures: • We checked the appropriateness of fair value model used to value the LLA liability. We also assessed the reasonableness of management’s key assumptions used in the cash flows projections comprising prices of CPO and PK, average FFB yield, mature and immature estate costs and discount rate, by comparing against those used in business plans, historical data and industry trend; • We evaluated the reliability of management’s cash flows projections by comparing the actual past financial performance against previous forecasted results; • We examined sensitivity analysis performed by management on the discount rate, prices of CPO and PK, average FFB yield, mature and immature estate costs to evaluate the impact on the LLA liability; and • We assessed the adequacy of the disclosures in the financial statements. Based on our procedures, we noted no significant exceptions. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
AUDITED FINANCIAL STATEMENTS 2022 9 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Key audit matters How our audit addressed the key audit matters Goodwill impairment assessment As at 31 December 2022, the Group’s carrying value of goodwill of RM809.1 million comprised goodwill in relation to sugar business in Malaysia of RM576.2 million and palm upstream operations in Malaysia of RM226.8 million and other operations of RM6.1 million. Goodwill is subject to annual impairment testing. We focused on this area as the determination of recoverable amounts of the assets in the Cash Generating Units (“CGUs”) based on discounted cash flows projections prepared by management, involved a significant degree of judgement in determining the following key assumptions: Business Key assumptions Sugar business Selling price, raw sugar price, sales volume, freight charges, landed cost, natural gas price, terminal value growth rate and discount rate. Palm upstream operations CPO price, PK price, average FFB yield, mature and immature estate costs and discount rate. The goodwill on other operations of RM6.1 million is not material to the Group. Refer to Note 3(d) in the significant accounting policies, Note 5(ii) in the critical accounting estimates and judgments and Note 22 to the financial statements. We performed the following procedures on the cash flow projections to support the impairment assessment of goodwill prepared by the management and approved by the Board of Directors of the Company: • We assessed the reliability of management’s projections through the comparison of actual past financial performances against previous forecasted results; • We assessed the reasonableness of the key assumptions, which were used by management in developing the discounted cash flows projections, by comparing against historical data and industry trends; • We examined the sensitivity analysis performed by management on the key assumptions for the respective businesses and also the discount rates used to evaluate the impact on the impairment assessment; and • We assessed the adequacy and reasonableness of the disclosures in the financial statements. Based on our procedures, we noted no significant exceptions. Impairment assessments of non-financial assets with impairment indicators Management performed impairment assessments of the non-financial assets of the Group, which had impairment indicators. As a result, net impairment losses of RM63.1 million for FGV Group’s property, plant and equipment and assets held for sale were recognised during the financial year ended 31 December 2022. We focused on this area as the recoverable amounts of the non-financial assets are determined based on discounted cash flows projections, which require judgement on the part of management on the future financial performance and the business plan of those businesses. Refer to Note 3(o) in the significant accounting policies, Note 5(iii) in the critical accounting estimates and judgements and Notes 19 and 36 to the financial statements. We have performed the following audit procedures: • We assessed the reliability of management’s projections through the comparison of actual past financial performances against previous forecasted results; • We assessed the reasonableness of the key assumptions, which were used by management in developing the discounted cash flows projections, by comparing against historical data and industry trends; • We examined the sensitivity analysis performed by management on the key assumptions and also the discount rates used to evaluate the impact on the impairment assessment; and • We assessed the adequacy and reasonableness of the disclosures in the financial statements. Based on the above procedures performed, we noted no significant exceptions. We have determined that there are no key audit matters to report for the Company. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
10 FGV HOLDINGS BERHAD REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Information other than the financial statements and auditors’ report thereon The Directors of the Company are responsible for the other information. The other information comprises the Corporate Details, Management Discussion and Analysis, Corporate Governance Overview Statement, Statement on Risk Management and Internal Control, Directors’ Report, and other sections of the 2022 Annual Integrated Report, which we obtained prior to the date of this auditors’ report, and Chairman’s Statement, which is expected to be made available to us after that date. Other information does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. (b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the Company’s internal control. (c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
AUDITED FINANCIAL STATEMENTS 2022 11 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Auditors’ responsibilities for the audit of the financial statements (continued) As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (continued) (d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. (e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. (f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 23 to the financial statements. OTHER MATTERS This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. PRICEWATERHOUSECOOPERS PLT NURUL A’IN BINTI ABDUL LATIF LLP0014401-LCA & AF 1146 02910/02/2025 J Chartered Accountants Chartered Accountant Kuala Lumpur 29 March 2023 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. 200701042133 (800165-P))
12 FGV HOLDINGS BERHAD Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 Revenue 6 25,561,543 19,565,891 852,377 499,287 Cost of sales (22,217,789) (16,951,417) (130,237) (113,562) Gross profit 3,343,754 2,614,474 722,140 385,725 Other operating income 7 152,783 95,113 11,826 3,112 Selling and distribution costs (284,486) (203,935) - - Administrative expenses (891,183) (801,475) (35,340) (36,500) (Impairment)/reversal of impairment of financial assets (net) 8 (17,641) 722 (29,110) 96 Other operating expenses 9 (4,435) (10,098) (14,397) (862) Other (losses)/gains, net 10 (392,137) 83,975 - - Operating profit 1,906,655 1,778,776 655,119 351,571 Finance income 11 26,256 22,728 - - Finance costs 11 (126,510) (126,933) (96,002) (78,989) Share of results from associates 24 2,658 3,551 - - Share of results from joint ventures 25 146,164 35,858 - - Profit before zakat and taxation 1,955,223 1,713,980 559,117 272,582 Zakat 14 (35,142) (17,406) - - Taxation 15 (651,480) (520,996) (5,672) (2,664) Profit for the financial year 12 1,268,601 1,175,578 553,445 269,918 Profit attributable to: Owners of the Company 1,329,226 1,167,874 553,445 269,918 Non-controlling interests (60,625) 7,704 - - 1,268,601 1,175,578 553,445 269,918 Earnings per share (“EPS”) attributable to owners of the Company Basic and diluted EPS (sen) 17 36.4 32.0 - - STATEMENTS OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
AUDITED FINANCIAL STATEMENTS 2022 13 Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 Profit for the financial year 1,268,601 1,175,578 553,445 269,918 Other comprehensive income: Items that will not be reclassified to profit or loss Actuarial gain on defined benefit plan 2,770 19,517 40 262 Fair value changes in financial assets at fair value through other comprehensive income (34,965) 53,908 - - Items that may be subsequently reclassified to profit or loss Currency translation differences 16,928 23,580 - - Realisation of foreign exchange reserve upon liquidation of a subsidiary (1,881) - - - Share of other comprehensive (loss)/income of an associate (945) 531 - - Share of other comprehensive loss of joint ventures (6,957) (597) - - Cash flow hedge reserve 3,426 5,543 - - 10,571 29,057 - - Total other comprehensive (loss)/income for the financial year, net of tax (21,624) 102,482 40 262 Total comprehensive income for the financial year 1,246,977 1,278,060 553,485 270,180 Total comprehensive income attributable to: Owners of the Company 1,312,526 1,269,363 553,485 270,180 Non-controlling interests (65,549) 8,697 - - 1,246,977 1,278,060 553,485 270,180 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
14 FGV HOLDINGS BERHAD Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 ASSETS Non-current assets Property, plant and equipment 19 7,727,964 7,674,392 5,776 7,192 Right-of-use assets 20 2,150,803 2,196,084 20,353 24,714 Investment properties 21 73,779 81,531 10,419 11,301 Intangible assets 22 939,983 948,382 9,847 11,427 Investment in subsidiaries 23 - - 8,489,332 8,501,024 Interests in associates 24 63,631 65,074 - - Interests in joint ventures 25 567,412 454,714 - - Receivables 26 123,557 137,066 - - Amount due from ultimate holding company 27 - 14,681 - - Amounts due from other related companies 27 - 9,107 - - Amounts due from subsidiaries 27 - - 2,446 172,625 Deferred tax assets 49 231,316 295,131 5,995 6,527 Financial assets at fair value through profit and loss 29 6,588 - - - Financial assets at fair value through other comprehensive income 30 162,670 201,569 - - Biological assets 31 1,491 2,228 - - 12,049,194 12,079,959 8,544,168 8,734,810 Current assets Inventories 32 2,361,423 1,914,403 - - Biological assets 31 86,698 113,791 - - Receivables 26 1,615,069 1,346,150 7,603 14,245 Amount due from ultimate holding company 27 25,654 36,521 874 20 Amounts due from other related companies 27 260,895 66,801 1,407 797 Amounts due from subsidiaries 27 - - 457,702 171,727 Amounts due from joint ventures 27 146,887 205,274 - - Amount due from an associates 27 4,300 - - - Contract assets 28 47,298 42,151 - - Financial assets at fair value through profit or loss 29 74,767 79,136 - - Loans due from subsidiaries 33 - - 207,011 216,830 Tax recoverable 10,129 12,762 - 374 Derivative financial assets 34 3,165 3,539 - - Deposits, cash and bank balances 35 1,397,106 2,031,666 68,667 338,675 6,033,391 5,852,194 743,264 742,668 Assets held for sale 36 28,041 24,241 - - 6,061,432 5,876,435 743,264 742,668 Total assets 18,110,626 17,956,394 9,287,432 9,477,478 AS AT 31 DECEMBER 2022 STATEMENTS OF FINANCIAL POSITION
AUDITED FINANCIAL STATEMENTS 2022 15 Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 EQUITY AND LIABILITIES Capital and reserves Share capital 37 7,029,889 7,029,889 7,029,889 7,029,889 Treasury shares 38 - (518) - (518) Foreign exchange reserve 39 68,156 54,036 - - Reorganisation reserve 40 (3,089,497) (3,089,497) - - Other reserves 41 29,495 67,427 - - Retained earnings 2,193,614 1,359,264 515,897 400,190 Equity attributable to owners of the Company 6,231,657 5,420,601 7,545,786 7,429,561 Non-controlling interests 1,653,028 1,765,917 - - Total equity 7,884,685 7,186,518 7,545,786 7,429,561 Non-current liabilities Borrowings 42 844,066 1,033,140 397,374 496,451 Lease liabilities 43 293,738 294,581 20,714 24,955 Loans due to ultimate holding company 44 - 632,151 - 632,151 Loans due to subsidiaries 45 - - 736,486 806,047 Land lease agreement (“LLA”) liability 46 3,264,463 3,314,874 - - Derivative financial liabilities 34 193 3,571 - - Provision for asset retirement 47 32,119 41,349 - - Provision for defined benefit plan 48 47,981 51,136 568 632 Deferred tax liabilities 49 577,718 575,740 - - Payables 50 - 10,189 - - 5,060,278 5,956,731 1,155,142 1,960,236 Current liabilities Payables 50 1,941,029 1,414,444 68,508 63,950 Contract liabilities 51 109,359 132,340 - - Loans due to ultimate holding company 44 333,316 2,514 333,316 2,514 Loans due to subsidiaries 45 - - 74,548 742 Amount due to ultimate holding company 27 239,203 276,082 - 1,179 Amounts due to other related companies 27 24,350 15,970 79 85 Amounts due to subsidiaries 27 - - 6,690 15,848 Amount due to a joint venture 27 42 - - - Amount due to an associate 27 331 351 - - Derivative financial liabilities 34 17,742 3,749 - - Borrowings 42 1,881,578 2,330,357 100,000 - Lease liabilities 43 37,621 27,518 3,363 3,363 Provision for asset retirement 47 702 666 - - Current tax liabilities 164,499 119,238 - - LLA liability 46 415,891 489,916 - - 5,165,663 4,813,145 586,504 87,681 Total liabilities 10,225,941 10,769,876 1,741,646 2,047,917 Total equity and liabilities 18,110,626 17,956,394 9,287,432 9,477,478 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
16 FGV HOLDINGS BERHAD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Note Share capital (Note 37) RM’000 Treasury shares (Notes 38) RM’000 Foreign exchange reserve (Note 39) RM’000 Reorganisation reserve (Note 40) RM’000 Other reserves (Note 41) RM’000 Retained earnings RM’000 Attributable to owners of the Company RM’000 Noncontrolling interests RM’000 Total equity RM’000 Group 2022 At 1 January 2022 7,029,889 (518) 54,036 (3,089,497) 67,427 1,359,264 5,420,601 1,765,917 7,186,518 Profit for the financial year - - - - - 1,329,226 1,329,226 (60,625) 1,268,601 Other comprehensive income/(loss) for the financial year, net of tax: Items that will not be reclassified to profit or loss - actuarial gain on defined benefit plan - - - - - 2,464 2,464 306 2,770 - fair value changes in financial assets at fair value through other comprehensive income (“FVOCI”) - - - - (35,031) - (35,031) 66 (34,965) - realisation of other comprehensive income reserve upon disposal of FVOCI - - - - (4,648) 4,648 - - - Items that may be subsequently reclassified to profit or loss - currency translation differences - - 23,903 - - - 23,903 (6,975) 16,928 - realisation of foreign exchange reserve upon liquidation of a subsidiary - - (1,881) - - - (1,881) - (1,881) - share of other comprehensive loss of joint ventures - - (6,957) - - - (6,957) - (6,957) - share of other comprehensive loss of an associate - - (945) - - - (945) - (945) - cash flow hedge reserve - - 1,747 - 1,747 1,679 3,426 - - 14,120 - 1,747 - 15,867 (5,296) 10,571 Total comprehensive income/(loss) for the financial year - - 14,120 - (37,932) 1,336,338 1,312,526 (65,549) 1,246,977 Transactions with owners Treasury shares - 518 - - - - 518 - 518 Liquidation of a subsidiary - - - - - (64,210) (64,210) 64,210 - Dividends paid for the financial year ended 31 December 2021 (final) 16 - - - - - (291,852) (291,852) - (291,852) Dividends paid for the financial year ended 31 December 2022 (interim) 16 - - - - - (145,926) (145,926) - (145,926) Dividends paid to non-controlling interests of subsidiaries - - - - - - - (111,550) (111,550) Total transactions with owners - 518 - - - (501,988) (501,470) (47,340) (548,810) At 31 December 2022 7,029,889 - 68,156 (3,089,497) 29,495 2,193,614 6,231,657 1,653,028 7,884,685
AUDITED FINANCIAL STATEMENTS 2022 17 Note Share capital (Note 37) RM’000 Treasury shares (Notes 38) RM’000 Foreign exchange reserve (Note 39) RM’000 Reorganisation reserve (Note 40) RM’000 Other reserves (Note 41) RM’000 Retained earnings RM’000 Attributable to owners of the Company RM’000 Non- controlling interests RM’000 Total equity RM’000 Group 2021 At 1 January 2021 7,029,889 (518) 26,497 (3,089,497) 10,624 284,708 4,261,703 1,838,504 6,100,207 Profit for the financial year - - - - - 1,167,874 1,167,874 7,704 1,175,578 Other comprehensive income/(loss) for the financial year, net of tax: Items that will not be reclassified to profit or loss - actuarial gain on defined benefit plan - - - - - 17,147 17,147 2,370 19,517 - fair value changes in financial assets at FVOCI - - - - 53,976 - 53,976 (68) 53,908 Items that may be subsequently reclassified to profit or loss - currency translation differences - - 27,605 - - - 27,605 (4,025) 23,580 - share of other comprehensive loss of joint ventures - - (597) - - - (597) - (597) - share of other comprehensive income of an associate - - 531 - - - 531 - 531 - cash flow hedge reserve - - - - 2,827 - 2,827 2,716 5,543 - - 27,539 - 2,827 - 30,366 (1,309) 29,057 Total comprehensive income for the financial year - - 27,539 - 56,803 1,185,021 1,269,363 8,697 1,278,060 Transactions with owners Accretion of interest in a subsidiary - - - - - (1,020) (1,020) 1,814 794 Loss of control of subsidiaries - - - - - - - (1,687) (1,687) Dividends paid for the financial year ended 31 December 2020 (final) 16 - - - - - (109,445) (109,445) - (109,445) Dividends paid to non-controlling interests of subsidiaries - - - - - - - (81,411) (81,411) Total transactions with owners - - - - - (110,465) (110,465) (81,284) (191,749) At 31 December 2021 7,029,889 (518) 54,036 (3,089,497) 67,427 1,359,264 5,420,601 1,765,917 7,186,518 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
18 FGV HOLDINGS BERHAD Company Note Non-distributable Distributable Total Share capital (Note 37) RM’000 Treasury shares (Note 38) RM’000 Retained earnings RM’000 2022 At 1 January 2022 7,029,889 (518) 400,190 7,429,561 Profit for the financial year - - 553,445 553,445 Other comprehensive income: Item that will not be reclassified to profit or loss - actuarial gain on defined benefit plan - - 40 40 Total comprehensive income for the financial year - - 553,485 553,485 Transactions with owners Treasury shares - 518 - 518 Dividends paid for the financial year ended 31 December 2021 (final) 16 - - (291,852) (291,852) Dividends paid for the financial year ended 31 December 2022 (interim) 16 - - (145,926) (145,926) Total transactions with owners - 518 (437,778) (437,260) At 31 December 2022 7,029,889 - 515,897 7,545,786 Company Note Non-distributable Distributable Total Share capital (Note 37) RM’000 Treasury shares (Note 38) RM’000 Retained earnings RM’000 2021 At 1 January 2021 7,029,889 (518) 239,455 7,268,826 Profit for the financial year - - 269,918 269,918 Other comprehensive income: Item that will not be reclassified to profit or loss - actuarial gain on defined benefit plan - - 262 262 Total comprehensive income for the financial year - - 270,180 270,180 Transactions with owners Dividends paid for the financial year ended 31 December 2020 (final) 16 - - (109,445) (109,445) Total transactions with owners - - (109,445) (109,445) At 31 December 2021 7,029,889 (518) 400,190 7,429,561 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
AUDITED FINANCIAL STATEMENTS 2022 19 Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit for the financial year 1,268,601 1,175,578 553,445 269,918 Adjustments for: Taxation 651,480 520,996 5,672 2,664 Zakat 35,142 17,406 - - Depreciation of property, plant and equipment 619,960 663,619 1,701 2,403 Impairment loss on property, plant and equipment (net) 78,192 59,914 - - Property, plant and equipment written off 41,510 9,135 - - Gain on disposal of property, plant and equipment (net) (2,156) (803) (96) - Depreciation of right-of-use assets 76,726 68,825 4,361 4,361 Right-of-use assets written off - 185 - - Reversal of impairment on right-of-use assets - (319) - - Depreciation of investment properties 7,752 12,258 882 882 Amortisation of intangible assets 13,709 20,568 4,782 9,490 Gain on disposal of assets held for sale - (927) - - Reversal of impairment on assets held for sale (15,100) - - - Reversal of impairment on amount due from ultimate holding company (8,553) (3,801) - - Impairment loss on amounts due from other related companies 12,751 137 - - Impairment loss / (reversal of impairment) on amounts due from subsidiaries (net) - - 29,110 (96) Reversal of impairment on other receivables - - - (195) Receivables written off - - - 195 Impairment loss on investment in subsidiaries - - 14,388 - Impairment loss on contract assets 139 292 - - Loss on liquidation in a joint venture - 38 - - Balance carried forward 2,780,153 2,543,101 614,245 289,622 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
20 FGV HOLDINGS BERHAD Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Balance brought forward 2,780,153 2,543,101 614,245 289,622 Loss on liquidation of a subsidiary 290 - - - Realisation of foreign exchange upon liquidation of a subsidiary (1,881) - - - Loss on disposal of biological assets 619 - - - Biological asset written off 25 - - - Impairment loss of receivables (net) 13,443 2,942 - - Inventories written off 8,694 9,157 - - Share of results from associates (2,658) (3,551) - - Share of results from joint ventures (146,164) (35,858) - - Net unrealised foreign exchange loss/(gain) 3,096 5,133 (5,079) 875 Dividends from subsidiaries - - (704,614) (374,547) Dividend income from financial assets at fair value through other comprehensive income (7,046) (2,572) - - Finance costs 126,510 126,933 96,002 78,989 Finance income (26,256) (22,728) (69) (31) Other losses/(gains), net 364,756 (27,195) - - Fair value changes in biological assets (net) 27,381 (56,780) - - Provision for defined benefit plan 5,436 7,345 74 83 Termination of lease contracts 326 (12) - - (Reversal of provision)/provision for asset retirement (10,116) 8,245 - - Unwinding of discount for provision for asset retirement 421 447 - - Provision for remediation of recruitment fees 112,000 - - - Operating profit/(loss) before working capital changes 3,249,029 2,554,607 559 (5,009) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
AUDITED FINANCIAL STATEMENTS 2022 21 Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Changes in working capital: Inventories (455,633) (728,394) - - Receivables (296,942) 114,901 7,066 (3,909) Intercompany 27 (139,376) (140,229) 70,217 49,706 Payables 387,641 351,781 10,626 7,973 Cash generated from operation 2,744,719 2,152,666 88,468 48,761 Finance income 26,256 22,728 69 31 Taxation paid (510,031) (233,597) (7,599) (12,489) Zakat paid (35,142) (17,406) - - Tax refunded 6,352 21,584 2,833 113 Retirement benefit paid (5,646) (4,089) (98) (66) Net cash generated from operating activities 2,226,508 1,941,886 83,673 36,350 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (757,875) (566,137) (285) (188) Purchase of right-of-use assets - (4,417) - - Purchase of intangible assets (6,424) (9,954) (3,202) (2,710) Purchase of biological assets (502) - - - Additions of financial assets at fair value through other comprehensive income (2,706) (3,541) - - Additions of financial assets at fair value through profit or loss (238,527) (17,691) - - Cash inflow from additional investment in a subsidiary - 794 - - Net cash inflow from liquidation of a subsidiary 4,012 - - - Balance carried forward (1,002,022) (600,946) (3,487) (2,898) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
22 FGV HOLDINGS BERHAD Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 CASH FLOWS FROM INVESTING ACTIVITIES (CONTINUED) Balance brought forward (1,002,022) (600,946) (3,487) (2,898) Additional investment in subsidiaries - - (2,696) (2,780) Additional loans to subsidiaries - - (864,573) (446,539) Repayment of loans from subsidiaries - - 874,392 598,595 Repayment of advances from subsidiaires 27 - - 172,626 443,330 Advances to subsidiaries 27 - - (30,748) - Payment for asset retirement (26) (10) - - Proceeds from disposal of property, plant and equipment 5,029 803 96 - Proceeds from disposal of assets held for sale 11,300 2,000 - - Proceeds from liquidation of a joint venture - 1,519 - - Proceeds from sales of financial assets at fair value through profit or loss 220,309 4,213 - - Proceeds from sales of financial assets at fair value through other comprehensive income 4,648 - - - Proceeds from sales of biological assets 279 - - - Dividends received from subsidiaries - - 334,911 308,547 Dividends received from joint ventures 26,428 17,986 - - Dividends received from associates 3,156 2,600 - - Dividends received from financial assets at fair value through other comprehensive income 7,046 2,572 - - Net cash (used in)/generated from investing activities (723,853) (569,263) 480,521 898,255 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
AUDITED FINANCIAL STATEMENTS 2022 23 Note Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 CASH FLOWS FROM FINANCING ACTIVITIES Repayment of loans due to ultimate holding company (300,000) (250,000) (300,000) (250,000) Repayment of loans from subsidiaries - - - (586,209) Drawdown of borrowings 9,359,030 12,734,330 - 500,000 Repayment of borrowings (9,998,370) (12,778,135) - (75,080) Payments of lease liabilities (64,690) (46,794) (5,531) (5,234) Repayment of LLA liability (477,306) (413,018) - - Dividends paid to shareholders (437,778) (109,445) (437,778) (109,445) Dividends paid to non-controlling interests (111,550) (81,411) - - Finance expense paid (139,328) (142,730) (90,893) (90,035) Increase in restricted cash (3,348) (738) - - Net cash used in financing activities (2,173,340) (1,087,941) (834,202) (616,003) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (670,685) 284,682 (270,008) 318,602 Effect of foreign exchange rate changes 32,777 17,052 - - CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 1,967,191 1,665,457 338,675 20,073 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 35 1,329,283 1,967,191 68,667 338,675 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
24 FGV HOLDINGS BERHAD Group At 1 January RM’000 Drawdown RM’000 Repayment # RM’000 Non-cash changes At 31 December RM’000 Finance costs/ interest accretion RM’000 Interest capitalisation RM’000 Lease additions/ termination (net) RM’000 Foreign exchange movement RM’000 Fair value movement RM’000 2022 Liabilities Islamic short term trade financing 1,946,431 8,286,136 (9,051,548) 12,514 28,507 - - - 1,222,040 Short term trade financing 241,173 1,013,880 (871,991) 13,997 825 - 1,487 - 399,371 Islamic term loans 679,442 9,031 (160,324) 28,727 - - - - 556,876 Hire purchase - 49,983 (488) 488 - - - - 49,983 Sukuk 496,451 - (24,805) 25,728 - - - - 497,374 Total borrowings 3,363,497 9,359,030 (10,109,156) 81,454 29,332 - 1,487 - 2,725,644 Lease liabilities 322,099 - (64,690) 16,514 - 56,338 1,098 - 331,359 LLA liability 3,804,790 - (477,306) - - - - 352,870 3,680,354 Loans due to ultimate holding company 634,665 - (329,891) 28,542 - - - - 333,316 8,125,051 9,359,030 (10,981,043) 126,510 29,332 56,338 2,585 352,870 7,070,673 Asset Restricted cash (64,474) - (3,349) - - - - - (67,823) Cash flows and non-cash changes in liabilities arising from financing activities are as follows: STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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