The group also owns and operates four Roundtable on Sustainable Palm Oil (RSPO) certified palm oil mills. The Group's results for the financial year improved significantly compared to the previous financial year in line with the overall performance of the Malaysian palm oil industry.
MANAGEMENT DISCUSSION AND ANALYSIS
Palm oil production for the first quarter of 2022 is showing signs of recovery in palm oil production, despite heavy rains and floods, especially in Sabah, which affected harvesting and processing activities. It is predicted that in 2022, palm oil production in Malaysia is likely to reach close to 19 million tons.
BOARD OF DIRECTORS
DIRECTORS’ PROFILE
Dato’ Mohammed Bin Haji Che Hussein
Datuk Simon Shim Kong Yip, JP
DIREC TORS’ PROFILE
Datuk Edward Lee Ming Foo, JP
Lee Wee Yong
Cheah Yee Leng
Au Yong Siew Fah
Datuk Amat Asri @ A.Asrie B.Ab Kadir @ A.Kadir, JP
Chong Kwea Seng
Choy Khai Choon
Tan Sri Amirsham Bin A Aziz
Andrew John Barber
Datuk Hamisa Binti Samat
Mak Wai Ming
Peter Liew Chi Kiaw
SENIOR MANAGEMENT TEAM’S PROFILE
Anselmius @ Robert Kimon
Gan Lu Yee
Kee Keow Chong
CORPORATE GOVERNANCE OVERVIEW STATEMENT
The aforementioned code is regularly reviewed by the board of directors and published on the company's website. These authoritative documents serve to guide the governance and conduct of the Board and Committees of the Board.
AUDIT COMMITTEE REPORT
The external auditors also confirmed that, during the audit process, they were not aware of any relationships or matters that, in their professional judgment, would affect their independence in accordance with the Articles (of Professional Ethics, Conduct and Practice) of the Government of Malaysia. Institute of Accountants ("MIA"). Reviewed the independence of the external auditors and has received written assurance from the external auditors confirming that they were and have been independent during the performance of the audit task in accordance with the terms of all relevant professional and regulatory requirements as well as By-Laws (on professional ethics, behavior and practice) in MIA.
AUDIT COMMIT TEE REPORT
The Audit Committee held two separate independent meetings with the external auditors in the absence of the executive Board members and management representatives during which the external auditors informed that they had received full cooperation from the management as well as unrestricted access to all information required for the purpose of their audit and there were no special audit issues to be highlighted to the Audit Committee. Checked the suitability of the external auditors and was satisfied with the suitability of the external auditors, Messrs KPMG PLT in terms of the quality of audit, performance, competence and sufficiency of resources and recommended to the Board for the re-appointment of Messrs KPMG PLT as the external auditors of the Company for the next financial year.
NOMINATING COMMITTEE REPORT
REMUNERATION COMMITTEE REPORT
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The head of the internal audit has direct access to the chairman of the audit committee and, when deemed necessary, meets with the audit committee without management present. The internal audit function uses a risk-based approach and prepares its audit strategy and plan based on the risk profiles of the group's operating units.
STRENGTHENING OUR
SUSTAINABILITY PRACTICES
PERFORMANCE HIGHLIGHTS
MSPO Certification Maintain 100% certification for all estates and mills MSPO SCCS Certification Maintain 100% certification for all mills. ISCC EU certification Maintain 100% certification for all mills HACCP certification Maintain 100% certification for all mills MeSTI certification Obtain certification for all mills HALAL certification Maintain 100% certification for all mills.
2021 SUSTAINABILITY
HIGHLIGHTS & ACHIEVEMENTS
2021 SUSTAINABILIT Y HIGHLIGHTS & ACHIEVEMENTS
OUR SUSTAINABILITY AGENDA
MARKETPLACE
RESPONSIBLE BUSINESS AND PRACTICES
Hap Seng Plantations adheres to best soil conservation practices as part of soil nutrient management, which determines the yield and quality of our crops. Hap Seng Plantations' sustainable agriculture policy clearly stated that “no new development in peatlands regardless of depth” was necessary, and this has been the practice.
TRACEABILITY
RSPO 82% of land bank As on 2021 • SSGOE – 2nd Cycle Recertification – 2nd Annual Surveillance Audit included Kawa as offer based on March 2019. SSGOE – 2nd Cycle Recertification – 4th Annual Surveillance Audit included Kawa as offer based on March 2021 JGOE. Cycle Recertification – 3rd Annual Surveillance Audit on August 2021 (Remote Audit) and January 2022 (Onsite Audit).
WORKPLACE
CARING FOR OUR PEOPLE
COMMUNITY ADVANCEMENTCOMMUNITY
COMMUNIT Y
The group continued to expand and expand its social responsibility initiatives in Sabah by creating intentional touchpoints with youth and community stakeholders, enhancing youth leadership skills, building community stakeholder capacity and enabling community expansion through the 3E framework (Equipment, Empowerment and Extension) via Hap Seng Group LAUNCHING P.A.D. program. Many participants expressed their gratitude to Hap Seng for their continued efforts for student development over the past five years. ii) Ignite Digital Marker 2.0. Hap Seng continues to build the Digital Marker Community for the second year in Tawau, Sabah, by sharing digital skills through coding.
ENVIRONMENT
Enhance the recycling program, including employee living areas, by providing awareness training to all employees.
ENVIRONMENT STEWARDSHIP
Hap Seng Plantations' continued efforts to reduce BOD at all four plants have yielded positive results, with average BOD falling to 14 ppm in FY2021 compared to 20 ppm in FY2020. Hap Seng Plantations is aware that climate change is a major threat to our planet, which is why we are committed to monitoring and reducing carbon emissions. It is the first Hap Seng Plantations to achieve greenhouse gas emissions below 1 MT CO2-e/MT CPO.
SUSTAINING OUR FUTURE
Hap Seng Plantations understands that poor waste management is harmful to the environment and poses risks to the health and well-being of society. In 2019, two representatives from our Mills and Plantations Central Office ("PCO") attended a planned waste management course organized by the DOE in Labuan. The competent person is responsible for providing planned waste training for all operational units.
DIRECTORS’ RESPONSIBILITY STATEMENT
FINANCIAL STATEMENTS
DIRECTORS’ REPORT
DIREC TORS’ REPORT
None of the other directors of the Company holding office as at 31 December 2021 had any interest in the ordinary shares of the Company and its related corporations during the financial year. There were no changes in the issued share capital of the Company during the financial year. No option was granted to any person to acquire unissued shares of the Company during the financial year.
STATEMENTS OF FINANCIAL POSITION
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
December 2020/
STATEMENT OF CHANGES IN EQUITY
STATEMENTS OF CASH FLOWS
January
December
NOTES TO THE FINANCIAL STATEMENTS
BASIS OF PREPARATION
BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued)
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of consolidation (continued)
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Financial instruments
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Financial instruments (continued)
Any change in the fair value of an asset that will be received in the period between the trade date and the settlement date is accounted for in the same manner as for the asset acquired. Upon derecognition of a financial asset, the difference between the book value of the financial asset and the sum of the compensation received (including any newly acquired asset, reduced by the newly assumed obligation) is recognized in the profit and loss. Upon derecognition of a financial liability, the difference between the book value of the settled or transferred financial liability and the compensation paid, including all transferred non-monetary assets or assumed liabilities, is recognized in profit or loss.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Property, plant and equipment (continued)
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Leases
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Leases (continued)
In addition, the right-of-use asset is periodically reduced by any impairment losses and adjusted for certain remeasurements of the lease liability. When the lease liability is revalued, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recognized in the income statement if the carrying amount of the right-of-use asset is reduced to zero. The expected net cash flows are estimated based on the expected output method and the estimated market price of the biological assets.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Assets held for sale
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Impairment
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Equity instruments
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Revenue and other income (continued)
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r) Contingent liabilities
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT (CONTINUED) (b) Right-of-use assets
PROPERTY, PLANT AND EQUIPMENT (CONTINUED). e) The Group has assessed whether the underlying tangible fixed assets, which are included in the holder's fixed assets, are calculated in addition to their recovery value. The recoverable amount of the assets is based on their estimated fair value, which is determined by a professional appraisal firm using the following methods: i) Comparison method for the assets with non-optimal yield and production (ii) Income method based on discounted cash flow method. The book value of these assets is not impaired at the end of the year, as their recoverable amount is higher than their book value.
INVESTMENT IN SUBSIDIARIES
INVESTMENT IN SUBSIDIARIES (CONTINUED)
INVENTORIES
BIOLOGICAL ASSETS
BIOLOGICAL ASSETS (CONTINUED)
RECEIVABLES
RECEIVABLES (CONTINUED) Note a
CASH AND CASH EQUIVALENTS
ASSETS HELD FOR SALE
CAPITAL AND RESERVES
DEFERRED TAX LIABILITIES
DEFERRED TAX LIABILITIES (CONTINUED) Unrecognised deferred tax assets
PAYABLES
REVENUE
FINANCE COSTS
PROFIT BEFORE TAX
KEY MANAGEMENT PERSONNEL COMPENSATIONS
TAX EXPENSE
EARNINGS PER ORDINARY SHARE Basic earnings per ordinary share
DIVIDENDS
CAPITAL COMMITMENTS
SEGMENTAL REPORTING
FINANCIAL INSTRUMENTS
- Categories of financial instruments
FINANCIAL INSTRUMENTS (CONTINUED)
- Net gains arising from financial instruments
- Financial risk management
FINANCIAL INSTRUMENTS (CONTINUED) 4 Credit risk (continued)
The following table shows information on the exposure to credit risk for the advances of subsidiaries as of December 31, 2021. At the end of the reporting period, the largest exposure to credit risk is represented by their book values in the statements of financial position. The largest exposure to credit risk at the end of the reporting period is their posting.
FINANCIAL INSTRUMENTS (CONTINUED) 5 Liquidity risk
FINANCIAL INSTRUMENTS (CONTINUED) 6 Market risk
- Interest rate risk
- Market price risk
FINANCIAL INSTRUMENTS (CONTINUED) 6 Market risk (continued)
- Market price risk (continued)
- Fair value of financial instruments
- Fair value of financial instruments (continued) Level 2 fair value
The fair value of deposits in the money market is determined by referring to the statements provided by the respective financial institutions, with which the investments are linked. There was no transfer between Level 1 and Level 2 fair value during the financial year.
CAPITAL MANAGEMENT
RELATED PARTIES
RELATED PARTIES (CONTINUED) Significant related party transactions
RELATED PARTIES (CONTINUED)
MATERIAL LITIGATIONS
MATERIAL LITIGATIONS (CONTINUED)
CONTINGENT LIABILITY - UNSECURED
SIGNIFICANT EVENT DURING THE YEAR
STATEMENT BY DIRECTORS
STATUTORY DECLARATION
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF HAP SENG PLANTATIONS HOLDINGS BERHAD
The other information includes the information in the annual report, but does not include the group's and the company's accounts and our audit report on this. Our conclusion on the group's and the company's accounts does not include the annual report, and we express no type of conclusion with certainty in this regard. Assess the overall presentation, structure and content of the group and annual accounts.
ADDITIONAL INFORMATION
OTHERS
SC, through its letter dated September 3, 2012, had decided not to impose any time frame on the Company to resolve the matter on SC terms. However, the Company must continue to investigate the matter with the relevant authority, subject to the following: a) the Company will disclose the efforts made and the status of compliance with the Litang Estate condition in the annual report until the condition is fulfilled ; To the best of the Company's knowledge, the said extension was granted on the ground that frequent flooding had prevented the full development or planting of the Litang Estate in accordance with the terms of ownership.
PARTICULARS OF GROUP’S PROPERTIES
PLANTATION STATISTICS
ANALYSIS OF SHAREHOLDINGS
Direct Shareholding Indirect Shareholding No. 1) Deemed interest by virtue of its substantial interest in Hap Seng Consolidated Berhad in terms of section 8 of the Companies Act 2016 (the "Act"). Sdn Bhd in terms of section 8 of the Act. 3) For the purposes of calculating the percentage shareholding above, the number of common shares used is that reached after deducting 314,800 treasury shares held by the Company from its issued shares of common stock.
DIRECTORS’ SHAREHOLDINGS
NOTICE OF ANNUAL GENERAL MEETING
That the proposed amendment to the company's articles of association as set out in Appendix A is approved and hereby approved." Note 10. The proposal for resolution 8 is to authorize the company to allocate shares in accordance with section 75 of the Act. This authorization, unless revoked or amended by the Company at a general meeting, expires at the end of the Company's next general meeting.
The chairman of the meeting will be at the venue of the broadcast in accordance with section 327(2) of the Act. After the expiration of nine (9) years, an independent director may continue to serve on the board of directors as an independent director. The chairman of the meeting will be at the venue of the broadcast in accordance with section 327(2) of the Companies Act 2016.
