FIMA CORPORATION ANNUAL REPORT 2017

Fima Corporation Berhad

(21185-P)

performance

CHAIRMAN’S STATEMENT

The application was dismissed by the State Administrative Court

on 13 June 2017 and on 21 June 2017, PTNJL filed a Statement

of Appeal to the Pengadilan Tinggi Tata Usaha Negara (hereafter

referred to as “Court of Appeal”) to appeal against the decision of

the State Administrative Court.

Notwithstanding the Ministerial Order, we also disclosed that

the local government in Kabupaten Nunukan has given its

undertaking and allowed PTNJL to continue to lawfully operate its

plantation operations until the final determination of the suit by the

Indonesian courts. The goodwill created with the local community

in the area through PTNJL’s socio-economic contributions and

community engagements over the years has resulted and

continues to result, in strong support for PTNJL at the grassroots

level. As at the date of this Annual Report, the suit is still on-going,

and there is little more I can say at this time, other than to assure

you that the Board is giving this matter its fullest attention and

that we will pursue all available legal avenues to protect PTNJL’s

rights and interests.

GOVERNANCE & SUSTAINABILITY

The Board’s FYE2016/17 evaluation was externally facilitated by

consultants from Boardroom Corporate Services Sdn Bhd, and

this provided both positive and constructive feedback. The Board

evaluation process and summary are described on pages 54 to

55 of this Report.

Further, the Nomination and Remuneration Committees have

been combined into a single Nomination and Remuneration

Committee (“NRC”), and the scope of the new NRC have

been enlarged to include (i) reviewing and recommending the

appropriate remuneration policies applicable to directors of

subsidiaries and senior management, and (ii) the recruitment,

appointment and evaluation of the performance of directors of

subsidiaries and senior management. This exercise, which was

initiated in FYE2016/17 and will be formalised in FYE2017/18, is

part of the Board’s commitment to continuously strengthen the

Group’s governance process and the appropriate succession

arrangements for its senior leadership team which in turn is a vital

element in ensuring the future of our company.

We are also happy to report that the Group has during the year,

initiated analysis and tracking of the environmental impact of our

operations. This is part of our penultimate holding company’s

initiative to see where we as a Group stand and to provide

benchmarks to measure future progress. So in this year’s

Sustainability Report, you will find more comprehensive reporting

on, among others, the Group’s energy use, CO

emissions,

recycling of waste and the various efforts being undertaken to

reduce the Group’s carbon footprint. It is my hope, as well as

that of my fellow Board members that you will find value in the

information we have compiled, and we welcome your feedback.

OUTLOOK

Bank Negara Malaysia expects Malaysia to register gross

domestic product between 4.3% and 4.8% in 2017, on the

back of domestic demand growth underpinned by private sector

activity. The country’s exports and imports are also expected to

strengthen on projected improvement in global economic growth,

higher commodity prices, and sustained domestic demand.

On a macro level, the IMF is forecasting an uptick in global

growth from 3.1% in 2016 to 3.5% and 3.6% in 2017 and 2018

respectively. Global trade activity is expected to pick up on the

back of policy stimulus and a gradual normalisation of large

economies such as Brazil and Russia. However, uncertainties

surrounding US policy direction under the new administration,

geopolitical tensions, Brexit and calls for protectionism may pose

downside risks to global growth prospects.

Economic recovery in Malaysia has to-date been relatively

muted, with growth driven predominantly by commodity price

increases and restricted to only a few sectors of the economy.

We anticipate that the year ahead is likely to continue to present

a challenging operating environment. Add to that, factors such as

extreme weather conditions and currency volatility are all likely to

affect our businesses in the near term. Against these dynamics,

a conservative approach remains prudent, and we will maintain

our balance sheet strength and resilience to downside risks as

main priorities.

APPRECIATION

On behalf of the Board, I wish to expressmy sincere appreciation to

all of our shareholders, customers, suppliers, employees, business

partners and other stakeholders for their ongoing support for the

Group. In particular, I wish to thank each one of our employees

for the loyalty and dedication that they demonstrate every day in

serving our stakeholders and achieving our objectives. Despite

the enormous challenges facing the Group, our employees have

remained motivated, continuing to display diligence, integrity,

teamwork and, above all, a sound understanding of the pressures

with which we have had to contend with the past year.

DATO’ ADNAN BIN SHAMSUDDIN

Chairman