PROGRESSING SUSTAINABLY AUDITED FINANCIAL STATEMENTS 2023
PROGRESSING SUSTAINABLY Every day, we strive to advance our purpose of building a sustainable future for all, through the work that we do at FGV. As an organisation that is reliant on the natural resources of the land, we are deeply committed to nurturing a better planet for the next generation. We endeavour to achieve this by conscientiously cultivating the land, fostering an ecosystem that promotes inclusive growth for all. Additionally, we aim to develop affordable and high-quality products that are easily accessible, while also employing responsible business practices that create value. In doing so, we aim to ensure that resources are used responsibly and benefits are shared widely. The theme of this Annual Integrated Report, ‘Progressing Sustainably,’ mirrors our determination to shape the sustainable future that we envision. With this commitment, we aim to achieve equitable, prudent, and enduring growth, ensuring that we remain a force in delivering sustainable foods and agriproducts for generations to come. INSIDE THIS REPORT Our cover design for the year draws inspiration from the dynamic strokes of the FGV logo, embodying the essence of our organisation’s energy and resilience in the face of challenges. Positioned to symbolise forward momentum, these strokes encapsulate our commitment to progress, innovation, and sustainability. Reflecting the core values of FGV, the design represents simplicity, a focus on strengthening foundations, and a relentless drive for advancement through collaborative efforts and an inclusive mindset. COVER RATIONALE FGV HOLDINGS BERHAD 2 Directors’ Report 6 Statement by Directors 6 Statutory Declaration 7 Independent Auditors’ Report 13 Financial Statements 28 Notes to the Financial Statements
AUDITED FINANCIAL STATEMENTS 2023 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 2023 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 2023 set out on pages 13 to 201, the Group and the Company have applied the appropriate accounting policies on a consistent basis and supported by reasonable 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 27 March 2024.
2 DIRECTORS’ REPORT 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 2023. 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: Tan Sri Rastam Mohd Isa (Appointed as Chairman on 26 September 2023) Dato’ Shahrol Anuwar Sarman (Appointed as a Chairman on 1 April 2023 and redesignated on 26 September 2023) Dato’ Amiruddin Abdul Satar Dato’ Mohd Rafik Shah Mohamad Nik Fazila Nik Mohamed Shihabuddin Datuk Yatimah Sarjiman Mohamad Fadzil Hitam (Appointed on 27 December 2023) Dato’ Dzulkifli Abd Wahab (Cessation from office on 1 April 2023) Dato’ Nonee Ashirin Dato’ Mohd Radzi (Retired on 20 June 2023) Kasmuri Sukardi (Retired on 20 June 2023) Azmin Che Yusoff (Cessation from office on 20 June 2023) 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 101,618 99,785 Non-controlling interests 10,824 - Profit for the financial year 112,442 99,785
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 3 DIRECTORS’ REPORT DIVIDENDS Dividends on ordinary shares paid or declared by the Company since 31 December 2022 are as follows: RM’000 In respect of the financial year ended 31 December 2022: - Final single tier dividend of 11.0 sen per share, paid on 13 April 2023 401,297 On 26 February 2024, the Board of Directors agreed to declare the payment of a final single tier dividend of 3.0 sen per ordinary share amounting to RM109.44 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.
4 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 4,358 659 - Other assurance services 1,937 1,187 - Non-audit fee 908 1,283 Member firms of principal auditors’ remuneration: - Audit fee 964 - Other firms of auditors’ remuneration: - Audit fee 111 - 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 - Fees 2,000 1,860 - Benefits in kind 16 16 - Other benefits 496 450 2,512 2,326 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 RM2,121,000 (2022: 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. DIRECTORS’ REPORT
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 5 STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED) 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. 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 27 March 2024. Signed on behalf of the Board of Directors: TAN SRI RASTAM MOHD ISA DATO’ MOHD RAFIK SHAH MOHAMAD CHAIRMAN DIRECTOR Kuala Lumpur DIRECTORS’ REPORT
6 STATEMENT BY DIRECTORS PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016 We, Tan Sri Rastam Mohd Isa 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 13 to 201 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 2023 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 27 March 2024. TAN SRI RASTAM MOHD ISA 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 13 to 201 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 27 March 2024, before me. COMMISSIONER FOR OATHS
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 7 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 200701042133 (800165-P) 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 2023, 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 2023 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 material accounting policies, as set out on pages 13 to 201. 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. 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 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 2023, the LLA liability for the Group amounted to RM3.51 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, discount rate, prices of Crude Palm Oil (“CPO”) and Palm Kernel (“PK”), average Fresh Fruit Bunches (“FFB”) yield, and mature and immature estate costs. Refer to Note 3(i) in the material accounting policies, Note 5(i) in the critical accounting estimates and judgments and Note 45 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 discount rate, prices of CPO and PK, average FFB yield, and mature and immature estate costs, 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) Registration No. 200701042133 (800165-P)
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 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 2023, the Group’s carrying value of goodwill of RM803.0 million comprised goodwill in relation to sugar business in Malaysia of RM576.2 million and palm upstream operations in Malaysia of RM226.8 million. Goodwill is subject to annual impairment testing and the Group recognised an impairment loss on goodwill of RM6.0 million during the financial year ended 31 December 2023. 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, natural gas price, terminal value growth rate and discount rate. Palm upstream operations PO price, PK price, average FFB yield, mature and immature estate costs and discount rate. 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. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 200701042133 (800165-P)
10 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Key audit matters How our audit addressed the key audit matters Impairment assessments of non-financial assets with impairment indicators Management performed impairment assessments of the non-financial assets of the Group and the Company, which had impairment indicators. As a result, the following impairment losses were recognised during the financial year ended 31 December 2023: • Net impairment loss of RM119.5 million at the Group level for property, plant and equipment, right-of-use assets and intangible assets. • Impairment loss of RM15.0 million at the Company level in respect of the Company’s cost of investment in subsidiaries. We focused on this area as the recoverable amounts of the non-financial assets are determined based on discounted cash flows projections, which require judgment on the part of management on the future financial performance and the business plan of those businesses. These are disclosed in Notes 19, 20, 22 and 23 to the financial statements. Refer to Note 3(o) in the material accounting policies, Note 5(iii) in the critical accounting estimates and judgments and Notes 19, 20, 22 and 23 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 relevant key assumptions for the respective businesses 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. 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 Directors’ Report, Chairman’s Statement and Group Chief Executive Officer’s Review, Management Discussion and Analysis and Statement on Risk Management and Internal Control , which we obtained prior to the date of this auditors’ report, and other sections of the 2023 Annual Integrated Report, 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 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. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 200701042133 (800165-P)
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 11 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) 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. (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. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 200701042133 (800165-P)
12 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) Registration No. 200701042133 (800165-P) 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) (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 MAHESH A/L RAMESH LLP0014401-LCA & AF 1146 03428/04/2025 J Chartered Accountants Chartered Accountant Kuala Lumpur 27 March 2024
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 13 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Revenue 6 19,359,186 25,561,543 348,569 852,377 Cost of sales (17,785,648) (22,217,789) (110,731) (130,237) Gross profit 1,573,538 3,343,754 237,838 722,140 Other operating income 7 121,194 152,783 9,899 11,826 Selling and distribution costs (249,993) (284,486) - - Administrative expenses (902,076) (891,183) (34,790) (35,340) Reversal of impairment/(impairment of) financial assets (net) 8 17,622 (17,641) 2,801 (29,110) Other operating expenses 9 (22,527) (4,435) (15,361) (14,397) Other losses, net 10 (134,623) (392,137) - - Operating profit 403,135 1,906,655 200,387 655,119 Finance income 11 35,123 26,256 - - Finance costs 11 (125,154) (126,510) (84,443) (96,002) Share of results from associates 24 (1,498) 2,658 - - Share of results from joint ventures 25 24,836 146,164 - - Profit before zakat and taxation 336,442 1,955,223 115,944 559,117 Zakat 14 (34,162) (35,142) - - Taxation 15 (189,838) (651,480) (16,159) (5,672) Profit for the financial year 12 112,442 1,268,601 99,785 553,445 Profit/(loss) attributable to: Owners of the Company 101,618 1,329,226 99,785 553,445 Non-controlling interests 10,824 (60,625) - - 112,442 1,268,601 99,785 553,445 Earnings per share (“EPS”) attributable to owners of the Company Basic and diluted EPS (sen) 17 2.8 36.4 - - STATEMENTS OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
14 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 Group Company 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Profit for the financial year 112,442 1,268,601 99,785 553,445 Other comprehensive (loss)/income: Items that will not be reclassified to profit or loss Actuarial (loss)/gain on defined benefit plan (1,339) 2,770 (58) 40 Fair value changes in financial assets at fair value through other comprehensive income (7,676) (34,965) - - Items that may be subsequently reclassified to profit or loss Currency translation differences 24,118 16,928 - - Share of other comprehensive loss of joint ventures (16,222) (6,957) - - Share of other comprehensive loss of an associate (1,353) (945) - - Realisation of foreign exchange reserve upon disposal of a foreign operation in joint venture 29,706 - - - Realisation of foreign exchange reserve upon liquidation of a subsidiary 970 (1,881) - - Realisation of foreign exchange reserve upon disposal of subsidiaries 6,362 - - - Cash flow hedge reserve 213 3,426 - - 43,794 10,571 - - Total other comprehensive income/(loss) for the financial year, net of tax 34,779 (21,624) (58) 40 Total comprehensive income for the financial year 147,221 1,246,977 99,727 553,485 Total comprehensive income/(loss) attributable to: Owners of the Company 141,555 1,312,526 99,727 553,485 Non-controlling interests 5,666 (65,549) - - 147,221 1,246,977 99,727 553,485
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 15 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 ASSETS Non-current assets Property, plant and equipment 19 7,908,289 7,727,964 5,576 5,776 Right-of-use assets 20 2,195,949 2,150,803 15,992 20,353 Investment properties 21 66,074 73,779 9,537 10,419 Intangible assets 22 889,593 939,983 13,708 9,847 Investment in subsidiaries 23 - - 8,476,325 8,489,332 Interests in associates 24 58,060 63,631 - - Interests in joint ventures 25 593,623 567,412 - - Receivables 26 159,511 123,557 - - Amounts due from subsidiaries 27 - - 7,033 2,446 Deferred tax assets 48 237,429 231,316 274 5,995 Financial assets at fair value through profit and loss 28 5,340 6,588 - - Financial assets at fair value through other comprehensive income 29 160,973 162,670 - - Biological assets 30 4,717 1,491 - - Tax recoverable 52,960 - - - 12,332,518 12,049,194 8,528,445 8,544,168 Current assets Inventories 31 1,626,911 2,361,423 - - Biological assets 30 65,087 86,698 - - Receivables 26 1,333,652 1,615,069 12,022 7,603 Amount due from ultimate holding company 27 32,329 25,654 542 874 Amounts due from other related companies 27 62,037 260,895 1,537 1,407 Amounts due from subsidiaries 27 - - 50,809 457,702 Amounts due from joint ventures 27 134,877 146,887 - - Amount due from an associate 27 38 4,300 - - Contract assets 32 26,139 47,298 - - Financial assets at fair value through profit or loss 28 89,857 74,767 - - Loans due from subsidiaries 33 - - 490,308 207,011 Tax recoverable 44,139 10,129 1,844 - Derivative financial assets 34 11,935 3,165 - - Deposits, cash and bank balances 35 1,523,234 1,397,106 111,176 68,667 4,950,235 6,033,391 668,238 743,264 Assets held for sale 36 - 28,041 - - 4,950,235 6,061,432 668,238 743,264 Total assets 17,282,753 18,110,626 9,196,683 9,287,432 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
16 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2023 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 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 - - - - Foreign exchange reserve 39 116,727 68,156 - - Reorganisation reserve 40 (3,089,497) (3,089,497) - - Other reserves 41 21,928 29,495 - - Retained earnings 1,892,868 2,193,614 214,327 515,897 Equity attributable to owners of the Company 5,971,915 6,231,657 7,244,216 7,545,786 Non-controlling interests 1,610,065 1,653,028 - - Total equity 7,581,980 7,884,685 7,244,216 7,545,786 Non-current liabilities Borrowings 42 1,163,357 844,066 796,450 397,374 Lease liabilities 43 351,888 293,738 16,264 20,714 Loans due to subsidiaries 44 - - 663,783 736,486 Land lease agreement (“LLA”) liability 45 3,257,842 3,264,463 - - Derivative financial liabilities 34 11 193 - - Provision for asset retirement 46 32,674 32,119 - - Provision for defined benefit plan 47 62,072 47,981 949 568 Deferred tax liabilities 48 591,523 577,718 - - 5,459,367 5,060,278 1,477,446 1,155,142 Current liabilities Payables 49 1,296,536 1,941,029 51,862 68,508 Contract liabilities 50 91,660 109,359 - - Loans due to ultimate holding company 51 - 333,316 - 333,316 Loans due to subsidiaries 44 - - 309,981 74,548 Amount due to ultimate holding company 27 276,663 239,203 - - Amounts due to other related companies 27 5,950 24,350 97 79 Amounts due to subsidiaries 27 - - 8,824 6,690 Amount due to a joint venture 27 506 42 - - Amount due to an associate 27 331 331 - - Derivative financial liabilities 34 403 17,742 - - Borrowings 42 2,269,445 1,881,578 100,894 100,000 Lease liabilities 43 30,637 37,621 3,363 3,363 Provision for asset retirement 46 734 702 - - Current tax liabilities 12,570 164,499 - - LLA liability 45 255,971 415,891 - - 4,241,406 5,165,663 475,021 586,504 Total liabilities 9,700,773 10,225,941 1,952,467 1,741,646 Total equity and liabilities 17,282,753 18,110,626 9,196,683 9,287,432
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 17 Group Note Share capital (Note 37) 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 2023 At 1 January 2023 7,029,889 68,156 (3,089,497) 29,495 2,193,614 6,231,657 1,653,028 7,884,685 Profit for the financial year - - - - 101,618 101,618 10,824 112,442 Other comprehensive (loss)/income for the financial year, net of tax: Items that will not be reclassified to profit or loss - actuarial loss on defined benefit plan - - - - (1,067) (1,067) (272) (1,339) - fair value changes in financial assets at fair value through other comprehensive income (“FVOCI”) - - - (7,676) - (7,676) - (7,676) Items that may be subsequently reclassified to profit or loss - currency translation differences - 29,108 - - - 29,108 (4,990) 24,118 - share of other comprehensive loss of joint ventures - (16,222) - - - (16,222) - (16,222) - share of other comprehensive loss of an associate - (1,353) - - - (1,353) - (1,353) - realisation of forex exchange reserve upon disposal of a foreign operation in joint venture - 29,706 - - - 29,706 - 29,706 - realisation of foreign exchange reserve upon liquidation of a subsidiary - 970 - - - 970 - 970 - realisation of foreign exchange reserve upon disposal of a subsidiary - 6,362 - - - 6,362 - 6,362 - cash flow hedge reserve - - - 109 - 109 104 213 - 48,571 - 109 - 48,680 (4,886) 43,794 Total comprehensive income for the financial year - 48,571 - (7,567) 100,551 141,555 5,666 147,221 Transactions with owners Accretion of interest in a subsidiary - - - - - - 1,400 1,400 Liquidation of a subsidiary - - - - - - (1,061) (1,061) Disposal of subsidiaries - - - - - - 2,258 2,258 Dividends paid for the financial year ended 31 December 2022 (final) 16 - - - - (401,297) (401,297) - (401,297) Dividends paid to non-controlling interests of subsidiaries - - - - - - (51,226) (51,226) Total transactions with owners - - - - (401,297) (401,297) (48,629) (449,926) At 31 December 2023 7,029,889 116,727 (3,089,497) 21,928 1,892,868 5,971,915 1,610,065 7,581,980 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
18 Group 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 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 - - - - - 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 - 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) - realisation of foreign exchange reserve upon liquidation of a subsidiary - - (1,881) - - - (1,881) - (1,881) - 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 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 19 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 Nondistributable Distributable Company Note Share capital (Note 37 RM’000 Retained earnings RM’000 Total RM’000 2023 At 1 January 2023 7,029,889 515,897 7,545,786 Profit for the financial year - 99,785 99,785 Other comprehensive income: Item that will not be reclassified to profit or loss - actuarial loss on defined benefit plan - (58) (58) Total comprehensive income for the financial year - 99,727 99,727 Transactions with owners Dividends paid for the financiayear ended 31 December 2022 (final) 16 - (401,297) (401,297) Total transactions with owners - (401,297) (401,297) At 31 December 2023 7,029,889 214,327 7,244,216 Non-distributable Distributable Company Note Share capital (Note 37) RM’000 Treasury shares (Note 38) RM’000 Retained earnings RM’000 Total 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) - - (291,852) (291,852) Dividends paid for the financial year ended 31 December 2022 (interim) - - (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
20 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit for the financial year 112,442 1,268,601 99,785 553,445 Adjustments for: Taxation 189,838 651,480 16,159 5,672 Zakat 34,162 35,142 - - Depreciation of property, plant and equipment 661,503 619,960 1,441 1,701 Impairment loss on property, plant and equipment (net) 81,308 78,192 - - Property, plant and equipment written off 9,674 41,510 - - Gain on disposal of property, plant and equipment (net) (5,142) (2,156) - (96) Depreciation of right-of-use assets 80,318 76,726 4,361 4,361 Reversal of impairment on right-of-use assets (491) - - - Depreciation of investment properties 7,705 7,752 882 882 Amortisation of intangible assets 12,549 13,709 2,883 4,782 Impairment loss on intangible assets 44,683 - - - Gain on disposal of assets held for sale (8,381) - - - Reversal of impairment on assets held for sale - (15,100) - - Loss on remeasurement on asset held for sale 2,328 - - - Reversal of impairment on amounts due from ultimate holding company (3,366) (8,553) - - (Reversal of impairment)/impairment loss on amounts due from other related companies (8,272) 12,751 1,287 - (Reversal of impairment)/impairment loss on amounts due from subsidiaries (net) - - (4,088) 29,110 Amount due from a subsidiary written off - - 28 - Impairment loss on investment in subsidiaries - - 15,039 14,388 (Reversal of impairment)/impairment loss on contract assets (521) 139 - - Reversal of impairment loss onamount due from a joint venture (3,251) - - - Balance carried forward 1,207,086 2,780,153 137,777 614,245
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 21 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Balance brought forward 1,207,086 2,780,153 137,777 614,245 (Gain)/loss on liquidation of a subsidiary (786) 290 - - Loss on disposal of subsidiaries 2,234 - - - Realisation of foreign exchange loss/(gain) upon liquidation of a subsidiary 970 (1,881) - - Realisation of foreign exchange loss upon disposal of subsidiaries 6,362 - - - Loss on disposal of biological assets 1,014 619 - - Biological asset written off 79 25 - - (Reversal of impairment)/impairment loss on receivables (net) (2,733) 13,443 - - Inventories written off 5,136 8,694 - - Share of results from associates 1,498 (2,658) - - Share of results from joint ventures (24,836) (146,164) - - Net unrealised foreign exchange loss/(gain) 2,668 3,096 294 (5,088) Dividends from subsidiaries - - (199,756) (704,614) Dividend income from financial assets at fair value through other comprehensive income (3,258) (7,046) - - Finance costs 125,154 126,510 84,443 96,002 Finance income (35,123) (26,256) (1,141) (69) Other losses, net 108,738 364,756 - - Fair value changes in biological assets (net) 25,885 27,381 - - Provision for defined benefit plan 17,837 5,436 384 74 Termination of lease contracts (net) 299 326 - - Provision for asset retirement - (10,116) - - Unwinding of discount for provision for asset retirement 418 421 - - Provision for remediation of recruitment fees - 112,000 - - Operating profit before working capital changes 1,438,642 3,249,029 22,001 550 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
22 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Changes in working capital: Inventories 728,807 (455,633) - - Receivables 252,643 (296,942) (4,419) 7,066 Intercompany 241,217 (139,376) (28,269) 70,217 Payables (708,589) 387,641 (19,441) 10,635 Cash generated from operation 1,952,720 2,744,719 (30,128) 88,468 Finance income 35,123 26,256 1,141 69 Taxation paid (397,987) (510,031) (12,282) (7,599) Zakat paid (34,162) (35,142) - - Tax refunded 164 6,352 - 2,833 Retirement benefit paid (5,235) (5,646) (61) (98) Net cash generated from operating activities 1,550,623 2,226,508 (41,330) 83,673 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (969,822) (757,875) (1,241) (285) Renewal of right-of-use assets 25,193) - - - Purchase of intangible assets (10,349) (6,424) (6,744) (3,202) Purchase of biological assets (2,993) (502) - - Additions of financial assets at fair value through other comprehensive income (1,997) (2,706) - - Additions of financial assets at fair value through profit or loss (483,674) (238,527) - - Net cash inflow from disposal of subsidiaries 103,636 - - - Net cash (outflow)/inflow from liquidation of a subsidiary (526) 4,012 - - Balance carried forward (1,390,918) (1,002,022) (7,985) (3,487)
FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 23 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 Group Company Note 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 CASH FLOWS FROM INVESTING ACTIVITIES (CONTINUED) Balance brought forward (1,390,918) (1,002,022) (7,985) (3,487) Additional investment in subsidiaries - - (2,032) (2,696) Additional loans to subsidiaries - - (1,238,897) (864,573) Repayment of loans from subsidiaries - - 955,600 874,392 Repayment of advances from subsidiaries - - - 172,626 Advances to subsidiaries - - - (30,748) Payment for asset retirement (317) (26) - - Proceeds from disposal of property, plant and equipment 11,800 5,029 - 96 Proceeds from disposal of assets held for sale 25,063 11,300 - - Accretion of interest in a subsidiary by non-controlling interest 1,400 - - - Proceeds from sales of financial assets at fair value through profit or loss 467,223 220,309 - - Proceeds from sales of financial assets at fair value through other comprehensive income - 4,648 - - Proceeds from sales of biological assets 649 279 - - Dividends received from subsidiaries - - 635,459 334,911 Dividends received from joint ventures 12,325 26,428 - - Dividends received from associates 2,719 3,156 - - Dividends received from financial assets at fair value through other comprehensive income 3,258 7,046 - - Net cash (used in)/generated from investing activities (866,798) (723,853) 342,145 480,521
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