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F i m a C o r p o r at i o n B e r h a d ( 2 1 1 8 5 - P ) •
A n n u a l R e p o r t 2 0 1 8
chairman’s statement
As you know, PTNJL was served with an order from the
Menteri Agraria dan Tata Ruang/Kepala Badan Pertanahan
Nasional revoking PTNJL’s land title (“HGU”) (“Ministerial
Order”) on the basis that the HGU was improperly issued due
to administrative irregularities performed by certain officers of
the Badan Pertanahan Nasional Provinsi Kalimatan Timur at the
time of the issuance of the HGU in 2003; resulting in parts of
the area within the HGU to overlap with forestry areas. I am
sure shareholders are also aware that PTNJL is challenging
the Ministerial Order and vigorously defending the HGU in the
Indonesian courts. The ultimate outcome of the suit cannot
presently be determined as PTNJL’s appeal is currently pending
before the Mahkamah Agung. Should developments result in a
final adverse judgement, the Board does not anticipate that it
will have further material impact on the Group’s balance sheet
moving forward as we have recognised a gross impairment
loss of RM44.74 million on property, plant and equipment and
biological assets in last year’s results. However, future earnings
may be affected.
Board and Senior Management Succession
On 13 July 2018, we announced that Datuk Alias bin Ali will
be retiring from his position as Independent Non-Executive
Director at the conclusion of the AGM. Datuk Alias was
appointed to the Board in August 2004 and during his tenure
he has been an invaluable asset. On behalf of the Board and
all Group employees, I would like to record our thanks to Datuk
Alias for his valuable insights and important contributions to the
Board and the Committees on which he served.
We are looking to add further to the Board’s membership, to
ensure we continue to have the right mix of skills and experience
to address the challenges faced by our businesses in the ever-
evolving environment in which we operate. In doing so, we
will continue to take into account the principles of diversity,
notwithstanding that we will always seek to appoint the most
suitable candidate.
I would also like to express my appreciation to Susan Lee
Mo Leng, who retired from her position as Chief Financial
Officer and Company Secretary in end October 2017 after 38
years of dedicated and outstanding service. We thank her for
her leadership and loyal service which have made a lasting
contribution to the strength of the Group. Fadzil bin Azaha, is
the Chief Financial Officer of our penultimate holding company
Kumpulan Fima Berhad since January 2016, has succeeded her
as Company Secretary while Muhammad Fadzlilah Bin Abdul
Ra’far has been appointed as the Company’s new Financial
Controller.
In the circumstances, the Group is undertaking a process to
refresh the Board and appoint new non-executive directors,
taking into account internal and external considerations. We
expect be in a position to conclude this exercise by the end of
this current financial year.
Prospects
We continue to see value in the underlying strengths of our
businesses. Even though the Group has solid fundamentals, the
environment in which we operate is clearly changing. While the
outlook for Plantation appears more positive, our Manufacturing
business remains challenged. As a result, we remain cautiously
optimistic for this current financial year.
Our value proposition to our stakeholders is clear; we have
moved our Company to segments with strong growth and
our portfolio is balanced between growth and profitability. We
recognise that not every industry segment or geographic market
will be consistently strong year after year, so in order to reduce
the Group’s earnings volatility, we took—and continue to take—
decisive steps to counteract ongoing headwinds and build on
our accomplishments. We are confident that the quality of our
assets and strong balance sheet along with the investments
and other initiatives we are making across our businesses will
create a resilient platform that can drive both the top-line and
bottom line. We have a strong foundation from which to grow
and essential to long-term value creation.
Appreciation & Acknowledgement
Finally, on behalf of the Board, I would like to close by thanking
our employees, suppliers, business partners and other
stakeholders for their contribution in the past year. Their efforts
and support are vital to the success of the Group.
Thank you.
DATO’ ADNAN BIN SHAMSUDDIN
Chairman