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CORPORATE GOVERNANCE

INTRODUCTION

Corporate governance approximately refers to the mechanisms, processes and relations by which the group are organised and directed. Good corporate governance practices should encompass beyond mere compliance and should attain the highest standards of business ethics, accountability, integrity and professionalism across all the group’s activities and conducts. In addition, the board considers strong governance as one of the key strategic determinants in building a competitive organisation, achieving its set of corporate and business objectives and ultimately in realising investors’ confidence and shareholders’ value, whilst taking into account the interests of other stakeholders.

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Refer to complete text on pages 154 to 200 in
Kulim (M) Berhad 2015 Integrated Annual Report
AR2015 Section 6 Governance Statement.PDF
View | Download

GROUP SIGNIFICANT SUBSIDIARIES

AS AT 17 MARCH 2016
Company Principal activities Country of incorporation Effective
equity
interest (%)
Held by Kulim:
Asia Economic Development Fund Limited (“AEDFL”) Investment holding Hong Kong 54.21
Cita Tani Sdn Bhd Dormant Malaysia 100.00
Classruum Technologies Sdn Bhd Information, communication and technology business, namely for Classruum.com Programme Malaysia 51.00
Danamin (M) Sdn Bhd Provider of non-destructive testing and engineering support services Malaysia 75.00
EPA Management Sdn Bhd Investment holding and provision of plantation management services and consultancy Malaysia 100.00
JTP Trading Sdn Bhd Trading/distribution of tropical fruits Malaysia 100.00
Kulim Energy Nusantara Sdn Bhd (“KENSB”) Investment holding Malaysia 100.00
Kulim Energy Sdn Bhd Investment holding Malaysia 80.00
Kulim Nursery Sdn Bhd Oil palm nursery and other related services Malaysia 100.00
Kulim Plantations (Malaysia) Sdn Bhd Oil palm plantation Malaysia 100.00
Kulim Smart Technologies Sdn Bhd (formerly known as Rentak Alam Sdn Bhd) IT system & device development, advisor and consultant Malaysia 100.00
Kulim Topplant Sdn Bhd Production of oil palm clones Malaysia 60.00
Kumpulan Bertam Plantations Berhad Oil palm plantation Malaysia 95.52
Mahamurni Plantations Sdn Bhd Oil palm plantation Malaysia 100.00
Pristine Bay Sdn Bhd Investment holding Malaysia 51.00
PT Wisesa Inspirasi Nusantara (“PT WIN”) Investment holding Indonesia 74.00
Renown Value Sdn Bhd Cultivation of pineapples and other agricultural produce Malaysia 75.00
Selai Sdn Bhd Oil palm plantation Malaysia 100.00
SG Lifestyles Sdn Bhd (formerly known as The Secret of Secret Garden Sdn Bhd) Trading and marketing of personal care products Malaysia 100.00
Sindora Berhad Intrapreneur venture business, oil palm and rubber plantation and investment holding Malaysia 100.00
Skellerup Industries (Malaysia) Sdn Bhd Dormant Malaysia 100.00
Ulu Tiram Manufacturing Company (Malaysia) Sdn Bhd Oil palm plantation Malaysia 100.00
Subsidiary of AEDFL
Asia Logistics Council Sdn Bhd (“ALC”) Global Horizontal E-Logistics System (“GHELS”) and Global Coalition for Efficient Logistics (“GCEL”) systems for Asia Pacific region Malaysia 36.86
Subsidiaries of Danamin (M) Sdn Bhd
DQ-IN Sdn Bhd Dormant Malaysia 75.00
Xcot Tech Sdn Bhd Dormant Malaysia 75.00
Subsidiaries of EPA Management Sdn Bhd
Akli Resources Sdn Bhd Provider of in-house and external training programme Malaysia 100.00
Edaran Badang Sdn Bhd Dealer in agricultural machinery and parts Malaysia 100.00
Extreme Edge Sdn Bhd IT solutions Malaysia 75.00
Kulim Civilworks Sdn Bhd Facilities maintenance, projects and construction works Malaysia 99.67
Kulim Livestock Sdn Bhd Breeding and sale of cattle Malaysia 100.00
Kulim Safety Training and Services Sdn Bhd Provision of training services and any other services related to occupational safety, health, environmental and security systems Malaysia 75.00
Optimum Status Sdn Bhd Mill maintenance Malaysia 75.00
Panquest Ventures Limited Dormant British Virgin Island 100.00
Perfect Synergy Trading Sdn Bhd Fertilizer supplier Malaysia 75.00
Pinnacle Platform Sdn Bhd Software maintenance and supplier Malaysia 95.00
PT Kulim Agro Persada Dormant Indonesia 100.00
Special Appearance Sdn Bhd Plantation, production house and event management Malaysia 90.00
Subsidiary of JTP Trading Sdn Bhd
JTP Montel Sdn Bhd Dormant Malaysia 100.00
Subsidiary of Mahamurni Plantations Sdn Bhd
Pembangunan Mahamurni Sdn Bhd Investment holding Malaysia 100.00
Subsidiaries of PT Wisesa Inspirasi Nusantara
PT Harapan Barito Sejahtera Oil palm plantation Indonesia 70.30
PT Sawit Sumber Rejo Oil palm plantation Indonesia 70.30
PT Wahana Semesta Kharisma Oil palm plantation Indonesia 70.30
Subsidiaries of Skellerup Industries (Malaysia) Sdn Bhd
SIM Manufacturing Sdn Bhd Manufacturers and dealers in rubber and rubber products of all kinds Malaysia 90.00
Skellerup Foam Products (Malaysia) Sdn Bhd Dormant Malaysia 100.00
Skellerup Latex Products (Malaysia) Sdn Bhd Dormant Malaysia 100.00
Subsidiaries of Sindora Berhad
E.A. Technique (M) Berhad (“E.A. Technique”) Provision of sea transportation and related services Malaysia 50.60
EPASA Shipping Agency Sdn Bhd Shipping and forwarding agent Malaysia 100.00
Granulab (M) Sdn Bhd Trading of granular synthetic bone graft Malaysia 99.29
Microwell Bio Solutions Sdn Bhd Trading of agricultural fertilizers, water treatment, biotechnology research and development Malaysia 60.00
MIT Insurance Brokers Sdn Bhd Insurance broking and consultancy Malaysia 75.00
Sindora Developments Sdn Bhd Dormant Malaysia 100.00
Sindora Timber Products Sdn Bhd Dormant Malaysia 100.00
Sindora Timber Sdn Bhd Timber logging, processing and sale of sawn timber, timber doors, laminated timber scantling and trading of wood products Malaysia 82.03
Sindora Trading Sdn Bhd Dormant Malaysia 100.00
Sindora Wood Products Sdn Bhd Property letting Malaysia 100.00
Subsidiaries of Sindora Timber Sdn Bhd
Jejak Juara Sdn Bhd Manufacturer and dealers in rubber products Malaysia 72.92
Tiram Fresh Sdn Bhd Dormant Malaysia 82.03
Subsidiary of Ulu Tiram Manufacturing Company (Malaysia) Sdn Bhd
EPA Futures Sdn Bhd Dormant Malaysia 100.00
Subsidiary of Extreme Edge Sdn Bhd
Sovereign Multimedia Resources Sdn Bhd Supply of IT hardware, maintenance and development services, software design and other related information and communication technology business Malaysia 75.00
Subsidiaries of Kulim Civilworks Sdn Bhd
KCW Electrical Sdn Bhd Dormant Malaysia 99.67
KCW Hardware Sdn Bhd Dormant Malaysia 99.67
KCW Kulim Marine Services Sdn Bhd Dormant Malaysia 99.67
KCW Roadworks Sdn Bhd Dormant Malaysia 99.67
Subsidiary of Kulim Livestock Sdn Bhd
Exquisite Livestock Sdn Bhd Dormant Malaysia 100.00
Subsidiary of Pembangunan Mahamurni Sdn Bhd
United Malayan Agricultural Corporation Berhad Oil palm plantation Malaysia 100.00
Subsidiary of E.A. Technique
Johor Shipyard & Engineering Sdn Bhd Shipbuilding, fabrication of steel structures, engineering services and consultancy Malaysia 50.60
Subsidiary of Microwell Bio Solutions Sdn Bhd
Microwell Trading Sdn Bhd Trading of biochemical fertilizer Malaysia 60.00
Subsidiary of Granulab (M) Sdn Bhd
Granulab Marketing Sdn Bhd Dormant Malaysia 99.29
Associate companies of Sindora Berhad
Tepak Marketing Sdn Bhd Contract packing tea and tea trading Malaysia 20.00
MM Vitaoils Sdn Bhd Manufacturing and marketing of edible oil product Malaysia 35.00

PEOPLE

Kulim Group adheres to a policy of treating all its employees with fairness and dignity. In this respect, our human resource policies are governed by Malaysia's labour legislation and the International Labour Organisation's ("ILO") Declaration on Fundamental Principles and Rights at work.

We begin with our employees, who are our major asset. Ultimately, they are the ones who will help us deliver our business and sustainability goals. Our people are the source of our ideas, actions and performance. We are, therefore, determined to foster a workplace culture and environment that attracts, retains and develops talented people so that they can reach their full potential and deliver value to our stakeholders.

STAFF STRENGTH

At the end of 2015, we had a total staff strength of 6,979 full-time employees in Malaysia, of which 5,782 or 82.85% were categorised as workers. Another 17.15% comprised management and staff. About 78.6% were foreign workers, predominantly from Indonesia, India and Bangladesh. In 2015, our turnover rate was 25.98% compared to 27.2% recorded in the previous year. This was mainly attributed to the repatriation of 676 (2014: 801) foreign workers on completion of their contractual obligations.

HUMAN RESOURCE POLICIES

Kulim adheres to a policy of treating all its employees with fairness and dignity. In this respect, our human resource policies are governed by Malaysia's labour legislation and the International Labour Organisation's ("ILO") Declaration on Fundamental Principles and Rights at Work. In addition, we are guided by the Code of Conduct for Industrial Harmony which lays down the "principles and guidelines to employers on the practice of industrial relations for achieving greater industrial harmony".

As guardians, we have a duty to protect our employees from unethical conduct. The Ethics Declaration Form serves as an important tool to inculcate an ethical workplace culture. In our efforts to promote a culture of integrity, the Group has put in place a Whistle-Blower Policy that encourages staff to come forward with credible information on illegal practices or violations of the policies in the Company. In the interest of its employees, the Group adopts a zero-tolerance stance on the use of illegal drugs, banned substance and alcohol in the workplace.

Policy of Non-Discrimination

We strive to create an inclusive work environment, where we practice non-discrimination against women, ethnic or religious minorities and foreign workers. We have equal pay for equal work for all field, office and management workers based on predefined grades. We have guidelines on HIV/AIDS where workers who have the disease are guaranteed confidentiality and retained in employment as long as they are healthy and able to perform.

Fair Wages

As of 1 January 2014, we have adopted the Minimum Wages Order 2012 that has raised the minimum wage of RM900 in Peninsular Malaysia and RM800 in Sabah, Sarawak and Labuan respectively.

Living Conditions

Workers are typically accommodated in a two (2) or three (3)-bedroom house that meets the minimum standard of the Housing and Amenities Act 1990.

Termination of Employment

Local workers also have the right to resign without penalty, while foreign workers have to fulfil their three (3)-year contracts as part of the terms and conditions of employment.

Managing Overtime

During the peak harvesting season, mill workers tend to work longer hours to ensure that the fruits are processed before its quality deteriorates. However, care is taken to ensure that workers do not exceed the overtime limits in compliance with the regulatory guidelines issued by the Department of Labour.

Child and Bonded Labour

Despite the fact that child and bonded labour is illegal, this modern form of slavery flourishes in many Third World countries. As a matter of policy, Kulim does not employ anyone below the age of 16. Many of our workers have their families staying with them and their children have access to schools and amenities provided by Kulim.

Employee Development

A skilled workforce is essential for the continued success of our business. In 2015, our emphasis was on strengthening our organisational capabilities. Through a Performance Management System ("PMS"), we strive to promote and improve employee effectiveness to accomplish the Group’s vision and business expansion plans.

More than ever in a highly competitive business landscape, the quality of our people is our greatest competitive advantage. Employing outstanding people and providing opportunities for them to apply their talents and improve their careers is critical to our sustainability.

Kulim has structured job-specific as well as generic training programmes tailored to bridge the skill gaps of staff at all levels. These programmes are structured around formal courses, seminars and workshops and are conducted internally or by external consultants.

Building a strong pipeline of leaders is a fundamental part of our sustainability strategy. This has been among the concerns raised by some of our younger employees at one of our staff engagement sessions. While we appreciate the concerns of the so-called ‘millennial generation', we are giving succession planning the due attention it deserves. Each year, we assess the potential and performance of identified candidates through the Johor Corporation Leadership Programme ("JLP"). The JLP is a two (2)-year structured leadership programme designed to enable participants to improve their decision-making skills and expand their leadership capacity. Participants will be exposed to business challenges from different angles and will have the opportunity to share leadership experiences. In 2015, a total of nine (9) employees were selected for the JLP, joining an early batch of five (5) candidates.

To accelerate the development of our people, we also draw upon the resources of Pembangunan Sumber Manusia Berhad ("PSMB"), an agency under the Ministry of Human Resources. The PSMB aims to develop quality human capital and a world-class workforce. During 2015, we beefed up our in-house training capabilities with 14 additional trainers, bringing our total of 30 PSMB-certified internal trainers to enhance our subject matter experts especially in the Operational Management. Meanwhile, we continued to collaborate with PUSPATRI (Johor Skills Development Centre) to conduct technical courses for our employees.

Employee Climate Survey

We seek to continually improve the level of engagement with our people through an Employee Climate Survey ("ECS"), which is one of the tools at our disposal to build positive employee relations and a conducive work environment. In the most recent ECS conducted in 2015, it is gratifying to learn that our employees are generally happy with the work environment and are proud to be a part of the Kulim Group. The ECS also provides valuable insights on sustainable staff engagement, measuring critical contributing factors such as the internal environment as an enabler of high performance and employee value proposition.

Caring For People

Social activities are a regular feature on our calendar of events. A hi-tea organised in attendance of two (2) well known Ustaz sharing their knowledge and wisdom, attracted 312 participants who contributed RM86,000 in support of the Group's corporate social responsibility activities. The money was utilised to buy food and groceries which were distributed to needy families during the holy month of Ramadhan. Apart from food aid, the Group's Value Unit also supports other worthy causes such as education and for people in need of medical assistance.

ENGENDERING GENDER QUALITY

Kulim's commitment to promote gender equality is seeing positive results. Various initiatives rolled out to empower women have been gaining traction. As at 31 December 2015, women made up 11.2% of our workforce and 12.31% of them are at the management level. Notwithstanding the challenges that are involved, we do not discourage nor discriminate against women working on our estates.

Women Onwards

Women OnWards ("WOW"), originally called Panel Aduan Wanita or Women's Grievance Panel, came into being as part of a larger women employee outreach programme. It has been endorsed by management and its activities are fully funded by the Company. WOW also promotes gender equality and empower women's knowledge and skills.

Over the past five (5) years, WOW has been actively providing entrepreneurship opportunities for the women folk of Kulim through a programme known as Jejari Bestari. There is now a WOW Unit at each estate, with each one developing a unique product or service, such as tailoring, baking, arts and handicraft. These products or services are sold to staff and the public during the festive season such as Hari Raya Aidilfitri and company events such as JCorp Carnival, Kota Tinggi Eco Boat Fishing Challenge, Kota Tinggi MTB Jamboree, Kota Tinggi Paintball Championship and others. In 2015, WOW generated income amounted to approximately RM52,000 of which the proceeds were ploughed back into their fledgling businesses.

For the past five (5) years, we also joined the global movement to celebrate International Women's Day ("IWD"). Each year a different theme is chosen to celebrate the economic, political and social achievements of women in the past, present and future. In 2015, IWD was celebrated with the theme of "Indah Nurani, Anggun Peribadi". This year's event, with a thematic seminar concept gave the women opportunity to gain knowledge about social etiquette table setting (Pramusaji), breast cancer, menopause and ethics.

We collaborated with MAKNA, Ministry of Health, Ministry of Education, Ministry of Women, Family and Community Development ("LPPKN") as well as Training Consultant to make the event more meaningful for the attendees.

Sexual Harasment

We continue to make headway in reducing the number of reported cases of sexual harassment. In 2015, there were two (2) cases reported. This is a result of ongoing efforts to create awareness among employees of what constitutes inappropriate behaviour and this is reinforced from time to time. Through a concerted campaign, women are also more aware of their rights and are more receptive to reporting cases of sexual harassment.

Maternity Leave

All our female employees are entitled to 60 consecutive days of paid maternity leave, in accordance with Malaysia Employment Act 1955 Part IX Maternity Protection. In 2015, 26 employees took maternity leave and on returning to work, continued to remain employed with the Company. We are proud of the 100% retention rate as employment patterns suggest that women with a new baby are most likely to leave their jobs after one (1) year. No work with pesticide shall be undertaken by pregnant or nursing female workers.

OCCUPATIONAL SAFETY AND HEALTH ("OSH")

Every employee has the right to work in a safe and healthy work environment. We take our responsibilities regarding health and safety at the workplace very seriously and is critical to the success of our business.

We want to include among our many accomplishments, an occupational health and safety record that sets us apart from the others. Our mission is to manage OSH effectively through the implementation of efficient oversight and regulatory action. This is enforced at all our mills and estates, where a dedicated OSH Officer ensures the effective implementation of the Group's OSH system. Apart from organising safety training, tool-box safety briefings and OSH quarterly meetings, the Officer's responsibilities include conducting investigations and reporting all accidents to the OSH Manager.

However, one (1) person on his own cannot effectively carry the safety message or handle the multitude of tasks that crop up every single day. That is why we make OSH everybody's concern and managers and employees work closely to build an effective safety and health programme. Each worker undergoes an average of 40 hours or five (5) man-days of safety training, which covers the handling, application and safe disposal of chemicals. In addition, tractor, lorry and Mechanical Buffalo driver will have to complete 16 hours or two (2) man-days of training under supervision as well as passing the respective practical exam to be a certified driver and granted to operating the machine independently.

After recording two (2) deaths in 2014, important lessons were learnt and we are pleased to report we achieved our goal of zero fatalities for 2015. The year under review also saw a marked improvement in the Lost Time Accident Rate ("LTAR") which was recorded at 6.82 compared to 7.19 posted in the previous year, bringing us closer to our target of below 10. Our injury severity rate of 2.28 is a marginal improvement, from the target of below 3.5. The increase in the number of road accidents remains a concern despite road safety campaigns and stricter enforcement of traffic regulations. For 2014, the Group was slapped with two (2) compound fines due to non-compliance to Jawatankuasa Keselamatan dan Kesihatan Pekerjaan ("JKKP") procedures. Comparatively, no case has been recorded in 2015.

This is another important lesson and a reminder that there is still room for improvement. We will continue to step up efforts in identifying, minimising and managing key occupational health and safety risks.

The Group has long put in place an OSH plan to look into the welfare and health of employees. Our workers benefit from amenities such as crèches, clinics, canteens and workers. As part of our health surveillance programme, regular fogging is carried out to reduce the threat posed by mosquitoes while proper water treatment facilities have recently been installed. The OSH Plan also covers various environmental aspects, most critically the adoption and enforcement of the "Environmental Quality Act 1974".

COMMUNITY DEVELOPMENT

Kulim strives to build good relationships with the communities wherever we operate. Being active in the community has always been central to our values and our business strategy. We have long been a supporter of various charitable organisations and worthy causes throughout the country. Rallying under the banner, "We Care, We Share" our community investment programme is built on five (5) main pillars : community sports, welfare, education, health and infrastructure development. Naturally charity begins at home and we have set up the As-Sajadah Fund to provide assistance to our staff.

Our contributions to the community go beyond financial donations. Management and staff are encouraged to participate in the various activities and initiatives that Kulim supports. And they have always been quick to respond; volunteering their time and effort and making personal donations when the need arises. During the year, our people joined local communities to clean up mosques, suraus and schools. They have also been involved in awareness activities related to our wildlife conservation programmes. It is in ways like these that we plant roots deep in the communities in where we operate, earning their trust as a valued friend and neighbour.

Program Assalamualaikum Dunia 1436

During the holy month of Ramadhan, the Group's Sports and Recreational Club ("KSRT") along with As-Sajadah took the initiative to provide humanitarian assistance to the homeless in Johor Bahru. From 12.30am until 4.00am, around 60 staff members went around Johor Bahru City Centre to distribute food and other essentials to the approximately 60 to 70 homeless people.

Johor Clay Target Shooting Association ("JCTSA")

The Group has long championed sporting activities as one of the ways to promote a healthy lifestyle. Established in 1997, JCTSA organises monthly shooting clinics and provides a platform for training conducted by the Malaysian Practical Shooting Confederation ("IPSC"). JCTSA's shooting range is located within Kulim's REM Estate in Kota Tinggi and is equipped with 24 lanes complete with target boards and training materials. In 2010, the shooting range was the venue for the Australasia 2010 IPSC Level IV Competition.

In 2015, JCTSA and the IPSC were given the honour to organise the Far East Asia Handgun Championship 2015 IPSC Level IV. Kulim contributed RM800,000 to JCTSA, which went towards the purchase of protective clothing as well as sponsorship of various shooting tournaments planned for the year.

Pintar Foundation

The PINTAR Foundation is a school adoption programme with the mandate to contribute towards nation building agenda by targeting under-performing and under-served schools. In the year under review, Kulim had adopted two (2) primary and one (1) secondary school under the PINTAR programme. One of these schools are located within Kulim's estates. Throughout the year, Kulim sponsored tuition classes, daily newspaper and motivational course for the school children. We are equally excited and encouraged to see the academic scores attained by the students in the national examinations which showed a marked improvement from the previous year.

We will continue to support the programme in 2016 with the hope that our small contributions would transform into a larger positive impact to our younger generations.

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GROUP QUARTERLY PERFORMANCE

2015
Q1 Q2 Q3 Q4
FINANCIAL PERFORMANCE (RM’000)
Revenue
268,170 511,483 406,965 282,988
Plantation 55% 47% 73% 32%
Intrapreneur Ventures 7% 3% 3% 6%
Operating results
28,927 43,201 54,516 7,928
Plantation 30% 73% 18% 383%
Intrapreneur Ventures 14% 6% 1% (77%)
Share of results associates 68 114 25 (6203)
Profit before interest
29,015 43,315 84,541 1,725
Add/(Less)
Interest income 2,490 13,533 14,017 6,869
Finance cost (6,921) (11,026) (8,574) (6,478)
Profit before taxation
7% 3% 3% 6%
Basic earning per share (sen)
268,170 511,483 406,965 282,988
FINANCIAL PERFORMANCE (RM’000)
FBB production (tonnes)
167,793 226,192 261,937 230,250
CPO prodcution (tonnes)
52,425 78,847 85,269 77,743
PK prodcution (tonnes)
13,959 20,211 23,314 20,806

GROUP STATEMENT OF VALUE ADDED

VALUE ADDED DISTRIBUTION

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  • Employees
  • Government
  • Providers of capital
  • Re-invesment
2015 2014
VALUE ADDED
Revenue 1,469,606 1,093,665
Purchase of goods and services (1,016,732) (671,152)
Value added by the group
452,874 422,513
Other income 106,310 71,955
Finance cost (32,99) (55,197)
Share of results of associates (5,996) 586
Discontinued operation 1,316,326 71,955
Value added available for distribution
1,836,515 686,770
DISTRIBUTION
To Employees
Staff costs 222,434 202,731
To the Government
Taxation 38,928 34,005
To Shareholders
Dividends 500,107 126,111
Non-controlling interests 7,256 144,138
Retained for re-investment and duture growth
Deprication/amortisation of PPE 135,249 141,593
Retained earnings 932,541 38,192
1,836,515 686,770
No. of employees at year end (excluding discontinued operations) 8,472 8,187
Value added per employee (RM) 53,455 51,608
Wealth created per employee (RM) 216,775 83,855
No. of shares at year end ('000 units) 1,227,413 1,327,181
Value added per share (RM) 0.37 0.32
Wealth created per share (RM) 1.50 0.52

GROUP 5-YEAR FINANCIAL STATISTICS

GROUP 5-YEAR PROFIT VS AVERAGE CPO PRICE

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  • PAT (RM Million)
  • CPO Price (RM/tonne)

GROUP 5-YEAR REVENUE VS AVERAGE CAPITAL EMPLOYED

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  • Revenue (RM'000)
  • Average Capital Employed (RM'000)
2015 2014 2013 2012 2011
STATEMENT OF COMPREHENSIVE INCOME HIGHLIGHTS (RM'000)
Revenue
1,469,606 1,093,665 1,013,156 906,562 836,582
Segment %:
Plantation 53% 70% 77% 79% 74%
Intrapreneur Ventures 4% 24% 20% 18% 22%
Profit from Operations
164,592 138,324 146,974 137,369 246,323
Segment %:
Plantation 52% 134% 112% 114% 95%
Intrapreneur Ventures 1% 16% 32% 18% 9%
Interest income 36,909 11,820 11,067 11,050 9,519
Finance costs (32,999) (55,197) (51,423) (59,689) (33,052)
Share of results of associates (5,996) 586 300 454 6,992
Profit before taxation
162,506 95,533 106,918 89,184 229,782
Taxation (38,928) (34,005) (66,817) (25,852) (72,618)
Profit after taxation from
- Continuing opertaions 123,578 61,528 40,101 63,332 157,164
- Discontinued operation 1,316,326 246,913 425,721 372,411 850,702
Net profit for the year
1,439,904 308,441 465,822 435,743 1,007,866
Attributable to:
Owners of the Company 1,432,648 164,303 431,068 211,210 565,013
Non-controlling interests 7,256 144,138 34,754 224,533 442,853
Net profit for the year
1,439,904 308,441 465,822 435,743 1,007,866

* Comparative figures have been restated to reflect the Discontinued Operations retrospectively.

2015 2014 2013 2012 2011
STATEMENT OF COMPREHENSIVE POSITION HIGHLIGHTS (RM'000)
ASSETS EMPLOYED
Other non-current assets 4,049,187 3,773,743 6,624,596 6,795,342 7,852,213
Intangible assests 121,852 33,439 189,762 204,667 1,097,799
Total Non-Current Assets
4,171,039 3,807,182 6,814,358 7,000,009 8,950,012
Other current assets 696,837 324,987 1,238,362 1,412,037 1,912,492
Cash and bank balances 1,532,399 342,597 377,180 280,889 644,702
Assets of disposal group classified as held for sale - 4,783,791 - 3,408,193 13,032
Total Current Assets
2,229,236 5,451,375 1,615,542 5,101,119 2,570,226
Other current liabilities 300,603 173,452 333,899 1,487,009 935,471
Liabilities of disposal group classified as held for sale - 2,084,517 - 2,084,517 -
Total Current Liabilities
805,118 3,008,893 1,364,615 3,753,416 1,507,314
5,595,157 6,249,664 7,065,285 8,347,712 10,012,924
FINANCED BY:
Share capital 337,605 335,626 323,513 320,637 315,509
Share capital 337,605 335,626 323,513 320,637 315,509
Reserves of disposal group classified as held for sale - (51,622) - -
Retained profits 2,876,137 1,943,596 1,905,404 1,474,336 2,436,500
Shareholders' equity
4,762,793 4,022,506 3,780,657 3,417,685 4,292,096
Non-controlling interests 263,621 1,590,197 1,346,491 2,781,972 2,628,603
Long-term borrowings 404,671 451,261 1,032,921 1,171,679 2,049,101
Other long-term liabilities 177,363 185,700 905,216 976,376 1,043,124
5,608,448 6,249,664 7,065,285 8,347,712 10,012,924
Average capital employed 5,929,056 6,657,475 7,706,499 9,180,318 8,589,231
Average shareholders' equity 4,392,649 3,901,582 3,599,171 3,854,891 3,928,732
2015 2014 2013 2012 2011
STATEMENT OF CASH FLOWS HIGHLIGHTS (RM'000)
Net cash flow from operating activities
(92,752) 683,194 705,369 971,707 1,441,863
Net cash flow from investing activities
2,331,796 (565,141) 405,623 (1,039,503) (1,474,025)
Net cash flow from financing activities
(1,173,050) (102,688) (1,345,144) 168,250 180,358
Net change in cash and cash equivalents
1,065,994 15,365 (234,152) 100,454 148,196
KEY FINANCIAL INDICATORS
Profitability and Returns
Operating profit margin 11.20% 12.65% 14.51% 15.15% 29.44%
PBT margin 11.06% 8.74 10.55% 9.84 27.47%
PATMI margin 97.49% 15.02% 42.55% 23.30% 67.54%
Return on average shareholders' equity 32.61% 4.21 11.98% 5.48 14.38%
Return on average capital employed 24.16% 2.47 5.59 2.30 6.58%
Net assets per share (RM) 3.88 3.03 2.96 2.69 3.48
Solvency and Liquidity
Gearing ratio (times)
- Gross 0.18 0.21 0.40 0.35 0.38
- Net (0.12) 0.15 0.33 0.30 0.29
Interest cover (times) 5.92 2.73 3.08 2.49 7.95
Current ratio (times) 2.79 1.81 1.18 1.36 1.71
Financial Market
EPS (sen)
- basic 111.53 12.55 33.80 16.84 45.90
- diluted 109.73 12.49 33.48 16.21 45.90
Gross dividend per share (sen) 37. 9.50 - 98.44 5.00
Gross dividend rate (%) 151% 38% - 394% 20%
Gross dividend yield (%) 11.09% 2.82% - 21.12% 1.45%
Net dividend payout rate (%) 34.91% 76.76% - 593.93 10.93%
Average price-to-earnings ratio (times) 3.04 26.85 10.44 27.67 7.53
Average price-to-book ratio (times) 0.87 1.11 1.19 1.74 0.99

GROUP 5-YEAR OPERATIONAL PERFORMANCE

GROUP 5-YEAR PLANTATIONS STATISTICS - MALAYSIA

2015 2014 2013 2012 2011
OIL PALM
Production (tonnes)
FFB produced - Processed by own mills 872,867 827,341 801,297 605,298 554,156
FBB produced - Sold to others 13,305 13,738 14,599 110,228 82,605
Total FFB produced 886,172 841,079 815,896 715,526 636,761
Purchased FFB 537,791 425,484 458,561 416,393 365,151
Total FFB processed 1,410,658 1,252,825 1,259,858 1,021,691 919,307
Crude Palm Oil 294,284 257,881 254,735 207,265 185,666
Palm Kernel 78,290 69,681 70,892 58,773 53,678
Yield and Extraction Rates
FFB yield (tones per mature hectare) 22.50 22.34 22.11 20.68 21.89
OER(%) 20.86 20.58 20.22 20.29 20.20
KER(%) 5.55 5.56 5.63 5.75 5.84
Average Selling Price (RM per tonne)
Crud Palm Oil(locally delivered) 2,191 2,370 2,472 2,923 3,193
Palm Kernel (ex-mill) 1,534 1,708 1,287 1,599 2,300
AREA STATEMENT (HECTARES)
Oil palm
- mature 39,387 37,654 36,909 35,170 32,865
- immature 7,623 9,469 10,198 10,422 7,458
47,010 47,123 47,107 45,592 40,323
Other crops:
Rubber 298 337 410 503 498
Sentang 25 25 25 25 25
Pineapple 181 173 166 168 128
Fruits (inter-row planting with oil palm) 509 465 666 580 546
Planted area
47,514 47,658 47,708 46,288 40,974
Reserve land, building sites etc 3,485 3,502 3,452 3,263 2,916
Titled area
50,999 51,160 51,160 49,511 43,890

* Yield per hectare based on annual production of FFB at Paling, Mungka and Kemedak Estate.

PLANTATIONS STATISTICS - INDONESIA

2015 2014
AREA STATEMENT (HECTARES)
Oil Palm
- immature 307 71
Planted area 307 71
Undeveloped Land 40,338 40,574
Total area with IUP* 40,645 40,645

* IUP - Izin Usaha Perkebunan

announcements

FINANCIAL CALENDAR as at 26 April 2016

Annual Report and General Meetings
Date
Issue of Annual Report 2015 11.4.2016
Annual General Meeting 3.5.2016
Extraordinary General Meeting 3.5.2016
ESOS, Shares and Warrants
Event Units Listed & Quoted Listing Date
1. Exercise of ESOS 2014/2019
    - listing of new ordinary shares of RM0.25 each
1,881,650 28.01.2016
1,867,450 28.01.2016
490,200 28.01.2016
2,288,350 29.01.2016
150,000 04.02.2016
1,523,350 11.02.2016
3,291,200 26.02.2016
7,466,400 01.04.2016
137,600 19.04.2016
3,491,573 26.04.2016
Total Option Exercised in 2016 22,587,773
Event Units Listed & Quoted Listing Date
2. Exercise of warrants 2011/2016
    - listing of new ordinary shares of RM0.25 each
159,650 07.01.2016
2,668,600 12.01.2016
171,529 18.01.2016
35,624 28.01.2016
1,551,750 29.01.2016
69,800 04.02.2016
64,727 05.02.2016
14,232 05.02.2016
116,299 11.02.2016
163,370 11.02.2016
61,230 15.02.2016
946,519 17.02.2016
1,961,457 19.02.2016
468,636 22.02.2016
234,995 23.02.2016
3,731,710 24.02.2016
1,752,087 26.02.2016
646,650 26.02.2016
1,326,574 01.03.2016
1,967,489 01.03.2016
7,794,353 02.03.2016
7,714 08.03.2016
Total warrants converted in 2016 25,914,995

KULIM IN THE NEWS

JCorp ambil alih Kulim menjelang Ogos

04 May 2016

JCorp kuasai Kulim pada suku ketiga 2016

04 May 2016

Kulim shareholders give green light for delisting

04 May 2016

Kulim shareholders vote in favour of JCorp offer

04 May 2016

Kulim To Be Delisted By Q3

04 May 2016

Kulim to be delisted by third quarter of 2016

04 May 2016

KOSMO - Nanas jadi pilihan terbaru komoditi pada masa depan

04 March 2016

Kulim Unit Buy 4 Indonesian Firms For RM509.35 Million

11 February 2016

Unit Kulim Beli Empat Syarikat Indonesia Berharga RM509.35j

11 February 2016

Unit Kulim Beli 4 Syarikat Indonesia pada RM509.35j

11 February 2016

Kulim's Unit to Acquire Indonesian Planters for RM509.35 mil

11 February 2016

PUPUK SAYANG ALAM SEJAK USIA MUDA

02 February 2016

PULIHARA, PASTIKAN KELESTARIAN HUTAN PAYA BAKAU

02 February 2016

CREATING AWARENESS ON ECO-SYSTEM

02 February 2016

Melita ke Timur Tengah

16 January 2016

LPNM Tanam Nanas MD2 di Kawasan Seluas 8500 Hektar

11 January 2016

Nanas MD2 Diperluaskan ke Seluruh Negara

1 January 2016

CAREERS @ KULIM

Central to Kulim ( Malaysia ) Berhad’s success is its people. We believe that people resources, effectively trained, coached and guided are instrumental in achieving the organisation’s vision of “Delivering Value” to its stakeholders. We are constantly on the look-out for talented people who can be nurtured and developed with the appropriate knowledge, expertise and mindset to become one of the Group’s prime assets.

We are a Group with extensive and established operations in Malaysia and Indonesia. Given our diverse operations, there is considerable scope for dynamic and self-motivated individuals to ascend a steep learning curve and progress up the career ladder. We offer exciting positions in :-


  • Areas of Plantation
  • People Management
  • Plantation & Agriculture
  • Engineering
  • Finance
  • Information Technology
  • Research & Development
  • Oil & Gas
  • Shipping Services

Interested applicants; may apply by sending us your latest CV to :

The Manager,
Human Resource and Administration Department
Kulim (Malaysia) Berhad,
K.B 705 80990, Johor Bahru, Johor
Tel : 07-8611611/8622000 Fax : 07-8611701

2 0 1 5   H i g h l i g t s

RREVENUE
RM 1.09BIL
8%
OPERATING PROFITS
RM 138MIL
6%
SHAREHOLDERS' FUNDS
RM 4.02BIL
8%
DIVIDEND PER SHARE
RM 9.5SEN
38%
TOTAL ASSETS
RM 9.26BIL
8%


2015 2014 Variance
FINANCIAL
Revenue (RM Million) 1,093.66 1,013,16 7.9%
PBT (RM Million) 95.66 106,92 (10.7%)
PLANTATION

Kulim is recognised as one of the leading palm oil groups with operations currently span over Malaysia and Indonesia.

Kulim was amongst the earliest palm oil producers to be certified to the Roundtable on Sustainable Palm Oil (“RSPO”) standard. Our management and growth strategy is fundamentally guided by “Vision 30:30” FFB, which aims to raise fruit yields to 30 tonnes per hectare and palm product extraction rates to 30%, balanced with sustainable development principles.

INTRAPRENEUR
VENTURES
Established as one of Kulim’s principal growth thrust, Intrapreneur Ventures (“IV”) Division is involved in a diverse range of businesses including support operations for plantations, biofertilizer, agricultural machinery, oil palm nursery and mills maintenance, as well as IT-related and insurance broking services. These companies will be developed and nurtured, with the aim to subsequently transform into strategic business divisions of the Group.
OIL & GAS

Driven by its Balanced Business Strategy, Kulim is uncovering opportunities in a new business dimension - Oil and Gas (“O&G”) sector in the quest for business growth and value deliverance to its shareholders.

Having footholds in O&G related businesses such as transportation of clean petroleum products and fabrication of O&G pipelines, Kulim aims at moving up the O&G value chain to expand into upstream O&G activities such as exploration, development and production, particularly in Indonesia as new space is being created. This enables us to tap into strategic investment opportunities that will broaden our earnings base and generate sustainable growth.

SUSTAINABILITY
As we move ahead in the 21st Century, we believe that the success of an organisation will be driven by the principles of long-term sustainable evelopment. The sustainability of a business has gone beyond the traditional measures of profits return on investment and shareholder’s value to include the inter-related dimensions of the Triple Bottom Line (“TBL”) of People, Planet and Profit (“3Ps”).

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LAST UPDATE : 11/04/2016

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ABOUT PLANTATION

Kulim is recognised as one of the leading palm oil groups with operations currently span over Malaysia and Indonesia.

Kulim was amongst the earliest palm oil producers to be certified to the Roundtable on Sustainable Palm Oil (“RSPO”) standard. Our management and growth strategy is fundamentally guided by “Vision 30:30” FFB, which aims to raise fruit yields to 30 tonnes per hectare and palm product extraction rates to 30%, balanced with sustainable development principles.

thumb-img

ABOUT OIL & GAS

Driven by its Balanced Business Strategy, Kulim is uncovering opportunities in a new business dimension - Oil and Gas ("O&G") sector in the quest for business growth and value deliverance to its shareholders.

Having footholds in O&G related business such as transportation of clean petroleum products and fabrication of O&G pipelines, Kulim aims at moving up the O&G activities such as exploration, development and production, particularly in Indonesia as new space is being created. This enabled us to tap into strategic investment opportunities that will broaden our earnings base and generate sustainable growth.

About Oil & Gas

ABOUT INTRAPRENEUR VENTURES

Established as one of Kulim’s principal growth thrust, Intrapreneur Ventures (“IV”) Division is involved in a diverse range of businesses including support operations for plantations, biofertilizer, agricultural machinery, oil palm nursery and mills maintenance, as well as IT-related and insurance broking services. These companies will be developed and nurtured, with the aim to subsequently transform into strategic business divisions of the Group.

PLANTATION
Kulim is recognised as one of the leading palm oil groups with operations currently span over Malaysia and Indonesia.

Kulim was amongst the earliest palm oil producers to be certified to the Roundtable on Sustainable Palm Oil ("RSPO") standard. Our management and growth strategy is fundamentally guided by “Vision 30:30” FFB, which aims to raise fruit yields to 30 tonnes per hectare and palm product extraction rates to 30%, balanced with sustainable development principles. SCROLL TO CONTINUE
Click for More Info
OIL & GAS
Driven by its Balanced Business Strategy, Kulim is uncovering opportunities in a new business dimension - Oil and Gas ("O&G") sector in the quest for business growth and value deliverance to its shareholders.

Having footholds in O&G related businesses such as transportation of clean petroleum products and fabrication of O&G pipelines, Kulim aims at moving up the O&G value chain to expand into upstream O&G activities such as exploration, development and production, particularly in Indonesia as new space is being created. This enables us to tap into strategic investment opportunities that will broaden our earnings base and generate sustainable growth. SCROLL TO CONTINUE
Click for More Info
INTRAPRENEUR
VENTURES
Established as one of Kulim's principal growth thrust, Intrapreneur Ventures ("IV")Division is involved in a diverse range of businesses including support operations for plantations, biofertilizer, agricultural machinery, oil palm nursery and mills maintenance, as well as IT-related and insurance broking services. These companies will be developed and nurtured, with the aim to subsequently transform into strategic business divisions of the Group. SCROLL TO CONTINUE
Click for More Info