STATEMENTS...than the remuneration shown under Directors’ Remuneration in the financial statements...

FINANCIAL STATEMENTS

112 Directors’ Report and Statement

119 Statements of Comprehensive Income

120 Statements of Financial Position

122 Consolidated Statement of Changes in Equity

124 Company Statement of Changes in Equity

125 Statements of Cash Flows

127 Summary of Significant Accounting Policies

151 Notes to the Financial Statements

208 Statutory Declaration

209 Independent Auditors’ Report

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DIRECTORS’ REPORT AND STATEMENT

The Directors have pleasure in presenting their report and statement together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2019.

PRINCIPAL ACTIVITIES

The principal activities of the Company are the cultivation of oil palms, investment holding, trading of crude palm oil and provision of management services to the subsidiaries. The principal activities of the subsidiaries are stated in Note 17 to the financial statements.

FINANCIAL RESULTS

Group Company RM’000 RM’000

Net (loss)/profit for the financial year (44,229) 99,137

Attributable to:Owners of the Company (36,344) 99,137Non-controlling interests (7,885) -

(44,229) 99,173

DIVIDENDS

Dividends paid or declared since the end of the previous financial year are as follows:

RM’000

In respect of the financial year ended 31 March 2018 as reported in the Directors’ Report and Statement of that year:

A single tier interim dividend of 5 sen per share, on 880,580,460 ordinary shares, paid on 18 July 2018 44,029

On 29 May 2019, the Directors declared a single tier interim dividend amounting to 2 sen per share in respect of the financial year ended 31 March 2019. The single tier interim dividend will be paid on 17 July 2019 to every member who is entitled to receive the dividend as at 5.00 p.m. on 28 June 2019.

The Directors do not recommend the payment of any final dividend for the financial year ended 31 March 2019.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

SHARE CAPITAL

The Company has not issued any shares during the financial year.


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:

Joseph Tek Choon Yee+ Chief Executive Officer & Managing DirectorPurushothaman a/l Kumaran Chief Financial Officer & Executive DirectorM. Ramachandran a/l V.D. Nair*#+ Senior Independent Non-Executive DirectorPushpanathan a/l SA Kanagarayar*# Independent Non-Executive DirectorTan Sri Dato’ Tan Boon Seng @ Krishnan Non-Executive DirectorDato’ Soam Heng Choon*+ Non-Executive DirectorDatuk Dr. Choo Yuen May# Independent Non-Executive DirectorFatimah Binti Merican Independent Non-Executive DirectorTan Sri Dato’ Wong See Wah Independent Non-Executive Chairman (ceased office on 27 August 2018)

* Members of Nomination and Remuneration Committee # Members of Audit Committee + Members of Securities and Options Committee

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than the remuneration shown under Directors’ Remuneration in the financial statements of the Company and its related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

Neither during nor at the end of the financial year was the Company or any of subsidiaries a party, to any arrangements whose object was to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than the shares and options over ordinary shares of the ultimate holding company awarded under the Long Term Incentive Plan of the ultimate holding company, comprising the Employee Share Option Scheme (ESOS) and Employee Share Grant Plan (ESGP).

DIRECTORS’ REMUNERATION

Details of the Directors’ Remuneration are set out in Note 10 to the financial statements.

DIRECTORS’ REPORT AND STATEMENT113


DIRECTORS’ INTERESTS IN SHARES

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 and options over ordinary shares of the Company and its ultimate holding company during the financial year except as follows:

IJM Plantations Berhad

Number of ordinary shares At At 1.4.2018 Acquired Disposed 31.3.2019

Name of Directors

Direct interest:

Purushothaman a/l Kumaran 877,500 - - 877,500Tan Sri Dato’ Tan Boon Seng @ Krishnan 716,060 - - 716,060

Indirect interest:

M. Ramachandran a/l V.D. Nair - 30,000(1) - 30,000(1)

Tan Sri Dato’ Tan Boon Seng @ Krishnan 481,033(1) - - 481,033(1)

Ultimate holding company- IJM Corporation Berhad

Number of ordinary shares At At 1.4.2018 Acquired Disposed 31.3.2019

Name of Directors

Direct interest:

Joseph Tek Choon Yee 305,500 96,000 - 401,500Purushothaman a/l Kumaran 659,500 96,000 - 755,500Tan Sri Dato’ Tan Boon Seng @ Krishnan 6,043,066 450,000 - 6,493,066Dato’ Soam Heng Choon 1,561,800 352,700 - 1,914,500M. Ramachandran a/l V.D. Nair - 10,000 - 10,000

Indirect interest:

M. Ramachandran a/l V.D. Nair 26,000(1) 12,700 - 38,700(1)

Tan Sri Dato’ Tan Boon Seng @ Krishnan 371,972(1) 50,000 - 421,972(1)

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DIRECTORS’ INTERESTS IN SHARES (CONTINUED)


Options over ordinary shares (“Options”) under Employee Share Option Scheme (“ESOS”)

Provisional Number of Options+ Number of Options

At At At AtName of Director 01.04.2018 31.03.2019 01.04.2018 Vested Exercised 31.03.2019

First ESOS Award on 24.12.2012

Joseph Tek Choon Yee - - 98,700 - - 98,700

Second ESOS Award on 24.12.2013

Joseph Tek Choon Yee - - 200,500 - - 200,500Purushothaman a/l Kumaran - - 101,800 - - 101,800

Third ESOS Award on 24.12.2014

Joseph Tek Choon Yee - - 143,600 - - 143,600Dato’ Soam Heng Choon - - 935,000 - - 935,000

Fourth ESOS Award on 24.12.2015

Dato’ Soam Heng Choon 396,000 - 924,000 396,000 - 1,320,000

Fifth ESOS Award on 24.12.2016

Purushothaman a/l Kumaran 90,000 45,000 58,200 43,600 - 101,800

Sixth ESOS Award on 30.03.2018

Joseph Tek Choon Yee 425,000 255,000 - 164,900 - 164,900Purushothaman a/l Kumaran 467,500 280,500 - 181,400 - 181,400Dato’ Soam Heng Choon 1,320,000 792,000 - 528,000 - 528,000

Seventh ESOS Award on 30.03.2019

Joseph Tek Choon Yee - 255,000 - - - -Purushothaman a/l Kumaran - 233,800 - - - -Dato’ Soam Heng Choon - 660,000 - - - -


DIRECTORS’ INTERESTS IN SHARES (CONTINUED)


Number of ordinary shares (“Shares”) under Employee Share Grant Plan (“ESGP”)

Performance Share Plan++ Retention Share Plan+++ +Provisional +Provisional +Provisional +Provisional number number number number as at as at as at as atName of Director 01.04.2018 31.03.2019 Vested 01.04.2018 31.03.2019 Vested

Third ESGP Award on 15.04.2015

Joseph Tek Choon Yee 48,500 - 24,200 19,400 - 19,400Purushothaman a/l Kumaran 48,500 - 24,200 19,400 - 19,400Dato’ Soam Heng Choon 196,500 - 98,200 50,600 - 75,900

Fourth ESGP Award on 15.04.2016

Joseph Tek Choon Yee 116,400 58,200 29,100 46,600 23,300 23,300Purushothaman a/l Kumaran 116,400 58,200 29,100 46,600 23,300 23,300Dato’ Soam Heng Choon 471,600 235,800 117,900 121,400 60,700 60,700

Fifth ESGP Award on 15.04.2017

Joseph Tek Choon Yee 116,400 116,400 - 46,600 46,600 -Purushothaman a/l Kumaran 116,400 116,400 - 46,600 46,600 -Dato’ Soam Heng Choon 471,600 471,600 - 121,400 121,400 -

Sixth ESGP Award on 15.04.2018

Joseph Tek Choon Yee - 116,400 - - 46,600 -Purushothaman a/l Kumaran - 116,400 - - 46,600 -Dato’ Soam Heng Choon - 471,600 - - 121,400 -

Notes:

(1) Through a family member+ The vesting of the Options and/or Shares to the eligible Director is subject to the fulfillment of the relevant vesting

conditions as at the relevant vesting dates++ The quantum of shares to be vested may vary from 0% to 200% of the number of shares provisionally awarded+++ The quantum of shares to be vested may vary from 0% to 150% of the number of shares provisionally awarded

DIRECTORS’ REPORT AND STATEMENTAN

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OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps:

(a) to ascertain the action taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that no known bad debts and no allowance for doubtful debts were necessary; and

(b) to ensure that any current assets, other than debts, 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.

At the date of this report and statement, the Directors are not aware of any circumstances:

(a) which would render the amounts written off for bad debts or the allowance for doubtful debts of the Group and of the Company inadequate to any substantial extent and the values attributed to current assets of the Group and of the Company misleading; or

(b) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(c) not otherwise dealt with in this report and statement or in the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report and statement, neither any charge on the assets of the Group and the Company has arisen since the end of the financial year which secures the liability of any other person nor any contingent liability of the Group and the Company.

In the interval between the end of the financial year and the date of this report and statement, no item, transaction or other event of a material and unusual nature has arisen which, in the opinion of the Directors, would substantially affect the results of the operations of the Group and of the Company for the current financial year.

No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Company and its subsidiaries to meet their obligations when they fall due.

In the opinion of the Directors:

(a) other than as disclosed in the financial statements, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature; and

(b) the financial statements of the Group and of the Company set out on pages 119 to 207 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 March 2019 and of the financial performance and cash flows of the Group and of the Company for the financial year ended 31 March 2019 in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

HOLDING COMPANY

The Directors regard IJM Corporation Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad, as the ultimate holding company.

SUBSIDIARIES

Details of subsidiaries are set out in Note 17 to the financial statements.


INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS

The ultimate holding company, IJM Corporation Berhad (“IJM”), has maintained a Directors & Officers Liability Insurance Policy on a consolidated basis, covering the Directors and officers of IJM Group throughout the financial year. The amount of insurance premium paid by IJM for the financial year ended 31 March 2019 was RM168,352.

LIST OF DIRECTORS OF SUBSIDIARIES

Pursuant to Section 253 of the Companies Act 2016, the list of Directors of the subsidiaries during the financial year and up to the date of this report is as follows:

Joseph Tek Choon YeePurushothaman a/l KumaranKhoo Choom KwongKunalan a/l Thamudaran Sandra Segran a/l Kenganathan

AUDITORS

Details of auditors’ remuneration are set out in Note 8(b) to the financial statements.

The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to continue in office.

This report and statement was approved by the Board of Directors on 29 May 2019.

Signed on behalf of the Board in accordance with a resolution of the Directors.

JOSEPH TEK CHOON YEE PURUSHOTHAMAN A/L KUMARAN DIRECTOR DIRECTOR

Petaling Jaya29 May 2019

DIRECTORS’ REPORT AND STATEMENTAN

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Group Company Note 2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Revenue 4 630,900 747,217 179,640 137,565Cost of sales 5 (532,224) (545,807) (68,581) (68,928)

Gross profit 98,676 201,410 111,059 68,637Other income and net other gains 6 15,298 10,421 4,035 2,551Selling and distribution expenses (73,750) (69,278) (5,678) (5,684)Administrative expenses (33,284) (45,227) (6,591) (7,561)

Operating profit 6,940 97,326 102,825 57,943Finance costs 7 (50,744) (46,556) - -

Operating loss after finance costs (43,804) 50,770 102,825 57,943Share of profits of an associate 497 - - -

(Loss)/profit before tax 8 (43,307) 50,770 102,825 57,943Income tax expense 11 (922) (26,978) (3,688) (11,763)

Net (loss)/profit for the financial year (44,229) 23,792 99,137 46,180

Other comprehensive income/(loss):

Item that may be reclassified subsequently to profit or loss:

- currency translation differences arising from translation of net investments in subsidiaries 15,488 (131,168) - -

Item that will not be reclassified subsequently to profit or loss:

- actuarial gain on defined benefit plan, net of tax 2,504 1,643 - -

─────── ───────17,992 (129,525) - -

Total comprehensive (loss)/income for the financial year (26,237) (105,733) 99,137 46,180

Net (loss)/profit attributable to:Owners of the Company (36,344) 27,862 99,137 46,180Non-controlling interests (7,885) (4,070) - -

Net (loss)/profit for the financial year (44,229) 23,792 99,137 46,180

Total comprehensive (loss)/income attributable to:Owners of the Company (18,785) (103,276) 99,137 46,180Non-controlling interests (7,452) (2,457) - -

Total comprehensive (loss)/income for the financial year (26,237) (105,733) 99,137 46,180

Group 2019 2018

(Loss)/earnings per share attributable to owners of the Company (sen):

- Basic 12 (4.13) 3.16- Fully diluted 12 (4.13) 3.16

STATEMENTS OF COMPREHENSIVE INCOMEFor The Financial Year Ended 31 March 2019

119

Group Company Note 31.3.2019 31.3.2018 1.4.2017 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 14 1,695,903 1,644,587 1,839,540 222,297 221,598 218,448Land use rights 15 140,625 145,116 159,864 28,570 29,712 30,674Plantation expenditure 16 - - - - - -Interests in subsidiaries 17 - - - 1,091,459 1,002,859 1,039,868Associate 18 12,908 - - - - -Other receivables 20(b) 127,907 87,975 81,102 - - -Deferred tax assets 28 13,812 11,608 23,156 - - -

1,991,155 1,889,286 2,103,662 1,342,326 1,254,169 1,288,990

CURRENT ASSETS

Inventories 19 79,340 114,718 99,288 3,862 3,501 5,120Amounts due from

subsidiaries 20(a) - - - 12,368 13,474 9,147Trade and other

receivables 20(b) 47,005 48,960 38,958 1,586 2,893 1,550Derivative financial

instruments 21 4,470 1,055 2,909 - - -Produce growing on

bearer plants 22 7,750 10,615 13,249 1,815 2,625 2,682Tax recoverable 13,351 15,551 16,226 3,615 2,264 5,936Deposits, cash and

bank balances 23 139,422 217,010 393,640 19,506 70,486 54,296

291,338 407,909 564,270 42,752 95,243 78,731

TOTAL ASSETS 2,282,493 2,297,195 2,667,932 1,385,078 1,349,412 1,367,721

EQUITY AND LIABILITIES

Capital and reserves attributable to owners of the Company

Share capital 24 922,530 922,530 922,530 922,530 922,530 922,530Equity contribution reserve 25 8,155 7,064 8,343 6,220 5,590 6,764Other reserves 26 (101,141) (116,192) 16,462 - - -Retained profits 27 498,213 576,078 613,071 375,234 320,126 335,587

1,327,757 1,389,480 1,560,406 1,303,984 1,248,246 1,264,881Non-controlling interests 2,761 (7,269) (9,542) - - -

TOTAL EQUITY 1,330,518 1,382,211 1,550,864 1,303,984 1,248,246 1,264,881

STATEMENTS OF FINANCIAL POSITIONAS AT 31 MARCH 2019

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Group Company Note 31.3.2019 31.3.2018 1.4.2017 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

NON-CURRENT LIABILITIES

Deferred tax liabilities 28 73,201 78,373 90,991 35,440 34,807 33,358Retirement benefits 29 19,340 17,143 6,847 - - -Borrowings 30 651,349 460,567 724,196 - - -Other payables 31(b) - - - 16,259 18,816 19,426

743,890 556,083 822,034 51,699 53,623 52,784

CURRENT LIABILITIES

Borrowings 30 136,584 272,513 200,121 - - -Amounts due to subsidiaries 31(a) - - - 20,311 35,274 35,216Trade and other payables 31(b) 71,493 86,386 94,739 9,084 12,269 14,840Current tax liabilities 8 2 174 - - -

208,085 358,901 295,034 29,395 47,543 50,056

TOTAL LIABILITIES 951,975 914,984 1,117,068 81,094 101,166 102,840

TOTAL EQUITY AND LIABILITIES 2,282,493 2,297,195 2,667,932 1,385,078 1,349,412 1,367,721

STATEMENTS OF FINANCIAL POSITIONAS AT 31 MARCH 2019

121

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

123

Non-distributable Distributable Equity Share contribution Other Retained capital reserves reserves profits Total Note (Note 24) (Note 25) (Note 26) (Note 27) equity RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2018, as previously reported 922,530 5,590 4,945 466,167 1,399,232

Effects of transition from FRSs to MFRSs 37 - - (4,945) (146,041) (150,986)

At 1 April 2018 922,530 5,590 - 320,126 1,248,246Total comprehensive income

for the financial year - - - 99,137 99,137Transactions with owners:Capital contribution by

ultimate holding company 33 - 2,536 - - 2,536Adjustment to capital contribution

upon exercise of employee share options by employees 33 - (1,906) - - (1,906)

Dividends 13 - - - (44,029) (44,029)

Total transactions with owners - 630 - (44,029) (43,399)

At 31 March 2019 922,530 6,220 - 375,234 1,303,984

At 1 April 2017, as previously reported 922,530 6,764 4,945 488,718 1,422,957

Effects of transition from FRSs to MFRSs 37 - - (4,945) (153,131) (158,076)

At 1 April 2017 922,530 6,764 - 335,587 1,264,881Total comprehensive income

for the financial year - - - 46,180 46,180Transactions with owners:Capital contribution by

ultimate holding company 33 - 1,844 - - 1,844Adjustment to capital contribution

upon exercise of employee share options by employees 33 - (3,018) - - (3,018)

Dividends 13 - - - (61,641) (61,641)

Total transactions with owners - (1,174) - (61,641) (62,815)

At 31 March 2018 922,530 5,590 - 320,126 1,248,246

COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

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Group Company Note 2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

OPERATING ACTIVITIESReceipts from customers 635,538 734,179 81,602 114,934Payments to contractors,

suppliers and employees (512,786) (555,819) (64,793) (66,223)Interest paid (23,017) (23,096) - -Income tax paid (5,969) (28,399) (4,406) (6,688)

Net cash flows generated from operating activities 93,766 126,865 12,403 42,023

INVESTING ACTIVITIESRepayment from subsidiaries - - 114,607 60,593Advances to subsidiaries - - (141,312) (68,389)Subscription of additional shares

in subsidiaries - - (16,500) -Redemption of preference shares

in subsidiaries - - 22,000 40,630Additions to property,

plant and equipment (131,642) (123,396) (16,990) (19,822)Additions to land use rights - (4,212) - (177)Proceeds from disposal of property,

plant and equipment * - - -Subscription of shares in an associate (12,408) - - -Placement of deposits (756) (3,199) - -Dividends received - - 18,000 22,200Interest received 4,361 5,722 841 773

Net cash flows (used in)/generated from investing activities (140,445) (125,085) (19,354) 35,808

FINANCING ACTIVITIESDrawdown of borrowings,

net of transaction cost 287,964 - - -Repayment of borrowings (277,352) (82,172) - -Dividends paid (44,029) (61,641) (44,029) (61,641)

Net cash flows used in financing activities (33,417) (143,813) (44,029) (61,641)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (80,096) (142,033) (50,980) 16,190

FOREIGN EXCHANGE DIFFERENCES 1,752 (37,796) - -CASH AND CASH EQUIVALENTS AT

BEGINNING OF FINANCIAL YEAR 206,165 385,994 70,486 54,296

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 36 127,821 206,165 19,506 70,486

* below RM1,000/=

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

125

Reconciliation of liabilities arising from financing activities:

Reconciliation between the opening and closing balances in the statement of financial position of the Group for the liabilities arising from the financing activities are as follows:

Group 2019 2018 RM’000 RM’000

Borrowings

At 1 April 2018/2017 733,080 924,317

Cash flow:Drawdown of borrowings* 287,964 -Repayment of borrowings (277,352) (82,172)

Non-cash changes:Foreign exchange movement 44,241 (109,065)

At 31 March 787,933 733,080

* Net of transaction cost of RM2,392,000 on drawdown of borrowings

No reconciliation is presented for the Company as there is no liability arising in relation to its financing activity during the current and previous financial year.

Significant non-cash transactions:

(a) During the financial year, a wholly-owned subsidiary of the Company, Desa Talisai Sdn. Bhd. (“DTSB”) commenced its capital reduction exercise pursuant to Section 119(4) of the Companies Act 2016. The capital reduction exercise was completed during the current financial year and the capital of RM20,100,002 was refunded via set-off against the amount due to DTSB.

(b) During the financial year, the wholly-owned subsidiaries of the Company issued preference shares amounting to RM134,000,000, and part of the consideration of the shares amounting to RM117,500,000 was set-off against the amount due to the Company.

(c) During the financial year, the wholly-owned subsidiaries of the Company redeemed preference shares amounting to RM25,000,000. The consideration amounting to RM22,000,000 was settled via cash and the remaining consideration amounting to RM3,000,000 was settled via set-off against the amount due from the Company.

(d) During the financial year, wholly-owned subsidiaries of the Company declared a single tier dividend amounting to RM91,241,800 and part of the consideration of the dividend amounting to RM73,241,800 was set-off against the amount due to the Company.

(e) During the financial year, the overseas subsidiaries in Indonesia issued new ordinary shares to the non-controlling interests amounting to RM17,482,000 and the issued shares remain outstanding as at the reporting date.

(f) In the previous financial year, the wholly-owned subsidiaries of the Company issued ordinary shares and preference shares amounting to RM130,000,000 and RM165,000,000 respectively. The total consideration for the shares were set-off against the amount due from the Company.

(g) In the previous financial year, wholly-owned subsidiaries of the Company redeemed preference shares amounting to RM80,630,000. The consideration amounting to RM40,630,000 was settled via cash and the remaining consideration amounting to RM40,000,000 was settled via set-off against the amount due from the Company.

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

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The following accounting policies have been applied consistently to all the years presented in dealing with items which are considered material in relation to the financial statements, unless otherwise stated.

1 BASIS OF PREPARATION

The financial statements of the Group and the Company for the financial year ended 31 March 2019 are the first set of financial statements prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The effects of transition to MFRS are disclosed in Note 37 to the financial statements.

The financial statements have been prepared under the historical cost convention, unless otherwise indicated in this summary of significant accounting policies.

The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires management to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgements are based on the management’s best knowledge of current events and actions, actual results may differ from those estimates.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2 to the financial statements.

The Group and the Company adopted the following Standards, Amendments and Annual interpretation to Standards.

(i) The new standards, amendments to published standards and interpretations that are mandatory for the Group’s and the Company’s financial year beginning on 1 April 2019 which the Group and the Company have not early adopted are as follows:

• MFRS16“Leases”supersedesMFRS117“Leases”andtherelatedinterpretations.UnderMFRS16,alease is a contract (or part of a contract) that conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

MFRS 16 eliminates the classification of leases by the lessee as either finance leases or operating leases. MFRS 16 requires a lessee to recognise a “right-of-use” of the underlying asset and a lease liability reflecting future lease payments for most leases.

The right-of-use asset is depreciated in accordance with the principle in MFRS 116 “Property, Plant and Equipment” and the lease liability is accreted over time with interest expense recognised in the profit or loss.

For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as either operating leases or finance leases, and account for them differently.

The Group and the Company will adopt MFRS 16 retrospectively from date of initial application on 1 April 2019, but will not restate comparatives for the financial year 2019 as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules will therefore be recognised in the opening statements of financial position on 1 April 2019.

On initial application of MFRS 16, the Group and the Company will recognise lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of MFRS 117. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 April 2019.

The associated right-of-use assets, which mainly relate to the Group’s and the Company’s land leases, will be measured on a retrospective basis as if the new rules had always been applied. Right-of use assets will be measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statements of financial position as at 31 March 2019.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

127

1 BASIS OF PREPARATION (CONTINUED)

(i) The new standards, amendments to published standards and interpretations that are mandatory for the Group’s and the Company’s financial year beginning on 1 April 2019 which the Group and the Company have not early adopted are as follows: (continued)

In applying MFRS 16 for the first time, the Group and the Company have used the following practical expedients permitted by the standard:

- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics

- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The Group and the Company have also elected not to apply MFRS 16 to contracts that were not identified as containing a lease under MFRS 117 and IC Interpretation 4 Determining whether an Arrangement contains a Lease.

• AmendmentstoMFRS128“LongterminterestsinAssociatesandJointVentures”clarifythatanentityshould apply MFRS 9 “Financial Instruments” (including the impairment requirements) to long term interests in an associate or joint venture, which in substance form part of the entity’s net investment, for which settlement is neither planned nor likely to occur in the foreseeable future.

In addition, such long term interests are subject to loss allocation and impairment requirements in MFRS 128.

The amendments shall be applied retrospectively.

• Amendments to MFRS 9 ÆÆ“Prepayment features with negative compensation” allow companies tomeasure some prepayable financial assets with negative compensation at amortised cost. Negative compensation arises where the contractual terms permit the borrower to prepay the instrument before its contractual maturity, but the prepayment amount could be less than the unpaid amounts of principal and interest. To qualify for amortised cost measurement, the negative compensation must be reasonable compensation for early termination of the contract, and the asset must be held within a ‘held to collect’ business model.

The amendments shall be applied retrospectively.

• AnnualimprovementstoMFRSs2015–2017Cycle:

(i) Amendments to MFRS 3 “Business Combinations” clarify that when a party obtains control of a business that is a joint operation, the acquirer should account the transaction as a business combination achieved in stages. Accordingly, it should remeasure its previously held interest in the joint operation (rights to the assets and obligations for the liabilities) at fair value on the acquisition date.

(ii) Amendments to MFRS 11 “Joint Arrangements” clarify that when a party obtains joint control of a business that is a joint operation, the party should not remeasure its previously held interest in the joint operation.

(iii) Amendments to MFRS 112 “Income Taxes” clarify that where income tax consequences of dividends on financial instruments classified as equity is recognised (either in profit or loss, other comprehensive income or equity) depends on where the past transactions that generated distributable profits were recognised. Accordingly, the tax consequences are recognised in profit or loss when an entity determines payments on such instruments are distribution of profits (that is, dividends). Tax on dividend should not be recognised in equity merely on the basis that it is related to a distribution to owners.

(iv) Amendments to MFRS 123 “Borrowing Costs” clarify that if a specific borrowing remains outstanding after the related qualifying asset is ready for its intended use or sale, it becomes part of general borrowings.


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(i) The new standards, amendments to published standards and interpretations that are mandatory for the Group’s and the Company’s financial year beginning on 1 April 2019 which the Group and the Company have not early adopted are as follows: (continued)

• AmendmentstoMFRS119“Planamendment,curtailmentorsettlement”requiresanentitytousetheupdated actuarial assumptions from remeasurement of its net defined benefit liability or asset arising from plan amendment, curtailment or settlement, to determine current service cost and net interest for the remaining period after the change to the plan. The amendments will be applied prospectively.

• ICInterpretation23“Uncertaintyoverincometaxtreatments”providesguidanceonhowtorecogniseand measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment. If an entity concludes that it is not probable that the tax treatment will be accepted by the tax authority, the effect of the tax uncertainty should be included in the period when such determination is made. An entity shall measure the effect of uncertainty using the method which best predicts the resolution of the uncertainty.

Except for MFRS 16, there are no other standards that are not yet effective and that would be expected to have a material impact to the financial statements of the Group and of the Company.

(ii) The new standards, amendments to published standards and interpretations that are mandatory for the Group’s and the Company’s financial year beginning on 1 April 2020 which the Group and the Company have not early adopted are as follows:*

• TheConceptualFrameworkforFinancialReporting(Revised2018)

Key changes to the Framework are as follows:

– Objectiveof generalpurposefinancialreporting-clarificationthattheobjectiveof financialreportingis to provide useful information to the users of financial statements for resource allocation decisions and assessment of management’s stewardship.

– Qualitativecharacteristicsof usefulfinancialinformation-reinstatementof theconceptsof prudencewhen making judgement of uncertain conditions and “substance over form” concept to ensure faithful representation of economic phenomenon.

– Clarificationonreportingentityforfinancialreporting-introductionof newdefinitionof areportingentity, which might be a legal entity or a portion of a legal entity.

– Elements of financial statements - the definitions of an asset and a liability have been refined.Guidance in determining unit of account for assets and liabilities have been added, by considering the nature of executory contracts and substance of contracts.

– Recognitionandderecognition-theprobabilitythresholdforassetorliabilityrecognitionhasbeenremoved. New guidance on de-recognition of asset and liability have been added.

– Measurement-explanationof factorstoconsiderwhenselectingameasurementbasishavebeenprovided.

– Presentationanddisclosure-clarificationthatstatementof profitorloss(“P&L”)istheprimarysourceof information about an entity’s financial performance for a reporting period. In principle, recycling of income/expense included in other comprehensive income to P&L is required if this results in more relevant information or a more faithful representation of P&L.


129


(ii) The new standards, amendments to published standards and interpretations that are mandatory for the Group’s and the Company’s financial year beginning on 1 April 2020 which the Group and the Company have not early adopted are as follows*: (continued)

Amendments to References to the Conceptual Framework in MFRS Standards

The MASB also issued Amendments to References to the Conceptual Framework in MFRS Standards (“Amendments”), to update references and quotations to fourteen (14) Standards so as to clarify the version of Conceptual Framework these Standards refer to, for which the effective date above applies.

The amendments shall be applied retrospectively in accordance with MFRS 108 unless retrospective application would be impracticable or involve undue cost or effort.

• AmendmentstoMFRS101“Presentationof FinancialStatements”andMFRS108“AccountingPolicies,Changes in Accounting Estimates and Errors” clarify the definition of materiality and use a consistent definition throughout MFRSs and the Conceptual Framework for Financial Reporting.

The definition of “material” has been revised as “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.”

The amendments also:

- clarify that an entity assesses materiality in the context of the financial statements as a whole.

- explain the concept of obscuring information in the new definition. Information is obscured if it has the effect similar as omitting or misstating that information.

- clarify the meaning of “primary users of general purpose financial statements” to whom those financial statements are directed, by defining them as “existing and potential investors, lenders and other creditors” who must rely on general purpose financial statements for much of the financial information they need.

• AmendmentstoMFRS3“Definitionof aBusiness”revisethedefinitionof abusiness.Tobeconsidereda business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs.

The amendments provide guidance to determine whether an input and a substantive process are present, including in situations where an acquisition does not have outputs. To be a business without outputs, there will now need to be an organised workforce. It is also no longer necessary to assess whether market participants are capable of replacing missing elements or integrating the acquired activities and assets.

In addition, the revised definition of the term ‘outputs’ is narrower, focuses on goods or services provided to customers, generating investment returns and other income but exclude returns in the form of cost savings.

The amendments introduce an optional simplified assessment known as ‘concentration test’ that, if met, eliminates the need for further assessment. Under this concentration test, if substantially all of the fair value of gross assets acquired are concentrated in a single identifiable asset (or a group of similar assets), the assets acquired would not represent a business.

The above amendments shall be applied prospectively.

* These amendments to published standards and interpretations will be adopted on the respective effective dates. The Group and the Company have started a preliminary assessment on the effects of the above new standards, amendments to published standards and interpretations and the impact is still being assessed.


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2 ECONOMIC ENTITIES IN THE GROUP

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

The existence and effect of potential voting rights are considered when assessing whether the Group controls another entity. In assessing whether potential voting rights contribute to control, the Group examines all facts and circumstances (including the terms of exercise of the potential voting rights and any other contractual arrangements whether considered individually or in combination) that affect potential voting rights.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. Subsidiaries are consolidated using the acquisition method of accounting, except for business combinations involving entities or businesses under common control, which are accounted for using the predecessor basis of accounting.

Under the acquisition method of accounting, the consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred and the liabilities incurred, to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss.

If the business combination is achieved in stages, the carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the subsequent acquisition dates, any gains or losses arising from such remeasurement are recognised in profit or loss.

Under the predecessor basis of accounting, assets and liabilities acquired are not restated to their respective fair values but at the carrying amounts in the consolidated financial statements of the ultimate holding company of the Group and adjusted to ensure uniform accounting policies of the Group. The difference between any consideration given and the aggregate carrying amounts of the assets and liabilities (as of the date of transaction) of the acquired entity is recognised as an adjustment to equity. No additional goodwill is recognised. The acquired entity’s results, assets and liabilities are consolidated as if both the acquirer and the acquiree had always been combined. Consequently, the consolidated financial statements reflect both entities’ full year’s results. The comparative information is restated to reflect the combined results of both entities.

Non-controlling interest represents that portion of profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the Company. It is measured on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets at the date of acquisition and the non-controlling interests’ share of changes in the subsidiaries’ equity since that date.

All earnings and losses of the subsidiary are attributed to the owners of the Company and the non-controlling interests, even if the attribution of losses to the non-controlling interests results in a debit balance in the total equity.

All inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.


131

2 ECONOMIC ENTITIES IN THE GROUP (CONTINUED)

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in equity attributable to owners of the Group.

(c) Disposal of subsidiaries

When the Group ceases to consolidate because of a loss of control, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Gains or losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the subsidiaries sold.

(d) Goodwill

Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previously held equity interest in the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed on the acquisition date. If the fair value of consideration transferred, the amount of non-controlling interest and the fair value of previously held interest in the acquiree are less than the fair value of the net identifiable assets of the acquiree, the resulting gain is recognised in profit or loss.

Goodwill on acquisition of subsidiaries is included in the statements of financial position as intangible assets. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and carried at cost less accumulated impairment. Any impairment is recognised immediately as an expense and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the business combination in which the goodwill arose. The Group allocates goodwill to each business segment in each country in which it operates.

(e) Associates

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. The existence and the effect of potential voting rights are considered when assessing whether the group exercises significant influence over another entity. Significant influence is the power to participate in the financial and operating policy decisions of the associates but not the power to exercise control over those policies.

Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profit or loss of the associate in profit or loss, and the Group’s share of movements in other comprehensive income of the associate in other comprehensive income. Dividends received or receivable from an associate are recognised as a reduction in the carrying amount of the investment. The Group’s investment in associates includes goodwill identified on acquisition.


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2 ECONOMIC ENTITIES IN THE GROUP (CONTINUED)

(e) Associates (continued)

When the Group’s share of losses in an associate equals or exceeds its interests in the associate, including any long-term interests that, in substance, form part of the Group’s net investment in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. An impairment is recognised for the amount by which the carrying amount of the associate exceeds its recoverable amount and recognises the amount in profit or loss.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

When the Group ceases to equity account its associate because of a loss of significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a financial asset. In addition, any amount previously recognised in other comprehensive income in respect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

For incremental interest in an associate when significant influence is retained, the date of acquisition is the purchase date at each stage and goodwill is calculated at each purchase date based on the fair value of assets and liabilities identified. The previously held interest is not re-measured.

3 PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

All property, plant and equipment are stated at cost or at valuation less accumulated depreciation and accumulated impairment except for capital work-in-progress which are not depreciated.

The cost of an item of property, plant and equipment initially recognised includes its purchase price, import duties (if any), non-refundable purchase taxes and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Cost also includes borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance costs are recognised as expenses in profit or loss during the financial year in which they are incurred.

Spares and parts, stand-by-equipment and servicing equipment which meet the definition of property, plant and equipment are classified under property, plant and equipment and depreciated accordingly.

The Group amortises plantation infrastructure in equal annual instalments over the remaining period of the respective leases ranging from 21 to 81 years. Leasehold lands classified as finance leases are amortised in equal instalments over the remaining period of the respective leases that range from 72 to 883 years.


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3 PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION (CONTINUED)

Bearer plants are living plants that are used in the production or supply of agriculture produce for more than one period and have remote likelihood of being sold as agriculture produce, except for incidental scrap sales. The bearer plants that are available for use are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes plantation expenditure incurred from land clearing to the stage of maturity. Bearer plants have an average life cycle of twenty-five (25) years with the first three (3) years as immature bearer plants and the remaining years as mature bearer plants. The mature bearer plants are depreciated over its remaining useful lives of twenty-two (22) years on a straight-line basis. The immature bearer plants are not depreciated until such time when they are available for use. The bearer plants were previously termed as plantation development expenditure.

Other property, plant and equipment are depreciated on a straight-line basis to write-off the cost of the assets, or their revalued amounts, to their residual values over their estimated useful lives. The annual rates of depreciation are:

Buildings 2 to 10%Plant, machinery and equipment and vehicles 4 to 20%Office equipment, furniture and fittings 10 to 33.3%

Capital work-in-progress comprising mainly buildings, plant, machinery and equipment which are stated at cost are not depreciated until the assets are ready for their intended use.

The residual values and useful lives of property, plant and equipment are reviewed, and adjusted as appropriate, at each reporting date. The effects of any revision of the residual values and useful lives are included in profit or loss for the financial year in which the changes arise.

At each reporting date, the Group assesses whether there is any indication of impairment. Where an indication of impairment exists, the carrying value of the asset is assessed and written down immediately to its recoverable amount. See accounting policy Note 6 on impairment of non-financial assets.

Gains and losses on disposals are determined by comparing the net proceeds with the carrying amounts and are included in profit or loss.

4 PRODUCE GROWING ON BEARER PLANTS

Produce growing on bearer plants are measured at fair value less costs to sell. Any gains or losses arising from changes in the fair value less costs to sell of produce growing on bearer plants are recognised in profit or loss. Fair value is determined based on the present value of expected net cash flows from the produce growing on bearer plants, which are estimated using the expected output method and the estimated market price of the produce growing on bearer plants.

5 INVESTMENTS

In the Company’s separate financial statements, investments in subsidiaries are carried at cost less accumulated impairment. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. See accounting policy Note 6 on impairment of non-financial assets. On disposal of investments in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.


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6 IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets (including goodwill and intangible assets not ready for use) that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Other non-financial assets (including those which are subject to amortisation) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment is recognised for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

The impairment is charged to profit or loss unless it reverses a previous revaluation, in which case it is charged to the revaluation surplus. Impairment of goodwill is not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in profit or loss unless it reverses an impairment of a revalued asset, in which case it is taken to the revaluation surplus reserve.

7 LEASES

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to use an asset for an agreed period of time.

Accounting as lessee

Finance leases

Leases of property, plant and equipment where the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.

Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate of interest on the lease principal outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Property, plant and equipment acquired under finance lease contracts are depreciated over the useful lives of the assets. If there is no reasonable certainty that the ownership will be transferred to the Group, the asset is depreciated over the shorter of the lease term and its useful life.

Operating leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss over the lease periods.

8 LAND USE RIGHTS

Land use rights where a significant portion of the risks and rewards of ownership are not expected to pass to the lessees by the end of the lease term are treated as an operating lease. Land use rights are carried at cost and are amortised on a straight line basis over the lease terms.

Land use rights are amortised over the land use rights periods ranging from 15 to 99 years.


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9 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost comprises the original cost of purchase plus the cost of bringing the inventories to their intended location and condition. The costs are determined at weighted average basis and include the cost of raw materials, direct labour and a portion of production overheads.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

10 RECEIVABLES

(a) Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. Other receivables generally arise from transactions outside the usual operating activities of the Group. If collection is expected in one year or less (or in the normal operating cycle of the business, if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value. After recognition, trade and other receivables are subsequently measured at amortised cost using the effective interest method, less loss allowance.

(b) Advances for plasma schemes represent accumulated plantation development costs including borrowing costs and indirect overheads less repayments todate and net of impairment, which are recoverable from plasma farmers. See Note 20(b)(iv) to the financial statements on other receivables.

In the event the Group or the Company provides corporate guarantees to the plasma schemes to obtain loans from financial institutions, they will be accounted for as financial guarantee contracts. See accounting policy Note 22 on financial guarantee contracts.

See accounting policy Note 19(d) on impairment of financial assets.

11 CASH AND CASH EQUIVALENTS

For the purpose of statements of cash flows, cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Cash and cash equivalents comprise cash in hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value, less bank overdrafts.

Bank overdrafts if any are included within borrowings in current liabilities on the statement of financial position.

12 SHARE CAPITAL

(i) Classification

Ordinary shares are classified as equity.

(ii) Share issue costs

Incremental costs directly attributable to the issue of new shares are deducted against equity.

(iii) Dividends

Liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period. Distributions to holders of an equity instrument are recognised directly in equity.


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13 BORROWINGS AND BORROWING COSTS

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

General and specific borrowing costs, including exchange differences to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of qualifying assets which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Borrowing costs incurred on borrowings to finance the property, plant and equipment and bearer plants during the period that is required to complete and prepare the asset for its intended use are capitalised as part of the cost of the asset and presented as part of the cash flows used in investing activities.

All other borrowing costs are charged to profit or loss in the period in which they are incurred.

Where an entity has modification of terms of borrowings which do not result in extinguishment, the following accounting policy is considered:

Accounting policy applied from 1 April 2018

When a borrowing measured at amortised cost is modified without resulting in derecognition, any gain or loss, being the difference between the original contractual cash flows and the modified cash flows discounted at the original effective interest rate, are recognised immediately in profit or loss.

Accounting policy applied until 31 March 2018

Until 31 March 2018, the Group had accounted for modification of borrowings measured at amortised cost without resulting in extinguishment of the original borrowings and amortised the difference arising from the modification over the remaining life of the modified borrowings.

14 INCOME TAXES

The income tax expense for the period comprises current and deferred tax. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and includes all taxes based upon the taxable profits. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. This liability is measured using the single best estimate of the most likely outcome.

Deferred tax is recognised, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit.


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14 INCOME TAXES (CONTINUED)

Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.

Deferred tax is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is recognised in profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is adjusted against goodwill on acquisition.

Deferred tax and income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

15 EMPLOYEE BENEFITS

(a) Short term employee benefits

The Group recognises a liability and an expense for bonuses based on a formula that takes into consideration the profit attributable to the owners of the Company after certain adjustments. The Group recognises a provision where there is a contractual obligation or where there is a past practice that has created a constructive obligation.

Wages, salaries, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees of the Group.

(b) Post-employment benefits

The Group has various post-employment benefit schemes in accordance with local conditions and practices in the countries in which it operates. These benefit plans are either defined contribution plans or defined benefit plans.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) in a mandatory, contractual or voluntary basis and the Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employees services in the current and prior periods. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service or compensation.


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15 EMPLOYEE BENEFITS (CONTINUED)

(b) Post-employment benefits (continued)

(i) Defined contribution plan

The Group’s contributions to a defined contribution plan are charged to the profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further payment obligations. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. As required by law, companies in Malaysia make contributions to the national pension scheme, the Employees Provident Fund (“EPF”), which is a defined contribution plan.

(ii) Defined benefit plan

The liability or asset recognised in the statements of financial position in respect of a defined benefit plan is the present value of the defined benefit obligation at the statements of financial position date, less the fair value of plan assets, together with adjustments for its actuarial gains/losses and past service costs.

The defined benefit obligation, calculated using the projected unit credit method, is determined by independent actuaries, considering the estimated future cash outflows using market yields at statements of financial position date on government bonds which have currency and terms to maturity approximating the terms of the related liability.

Actuarial gains and losses arise mainly from the changes in actuarial assumptions and experience adjustments. Such gains and losses are credited or charged to equity in other comprehensive income in the period in which they arise. The actuarial gains and losses are not subsequently reclassified to profit or loss in subsequent periods.

Changes in present value of the defined benefit obligation resulting from amendments or curtailments are recognised immediately in profit or loss as past service costs.

(c) Share-based compensation

The Company’s ultimate holding company operates an equity-settled share-based compensation plan under which the Company receives services from employees as consideration for equity instruments (share options and share grants) of the ultimate holding company. The fair value of the employees services received in exchange for the grant of the share options and share grants is recognised as an expense in profit or loss.

Non-market vesting conditions are included in assumptions about the number of share options and share grants that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of the reporting period, the Company revises its estimates of the number of share options and share grants that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss over the vesting period with a corresponding credit recognised in equity. The credit to equity is treated as a capital contribution as the ultimate holding company is compensating the Company’s employees with no expense to the Company.

If the terms of equity-settled share-based compensation plans are modified, at a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

When the ultimate holding company recharges the Company for the equity instruments granted, the recharge is treated as an adjustment to the equity contribution reserve from the ultimate holding company.


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16 CONTINGENT LIABILITIES

The Group does not recognise a contingent liability other than those arising from business combinations, but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably. Contingent liabilities do not include financial guarantee contracts. (see accounting policy Note 22 on financial guarantee contracts)

In the acquisition of subsidiaries by the Group under a business combination, the contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.

The Group recognises separately the contingent liabilities of the acquirees as part of allocating the cost of a business combination where their fair values can be measured reliably. Where the fair values cannot be measured reliably, the resulting effect will be reflected in the goodwill arising from the acquisitions and the information about the contingent liabilities acquired are disclosed in the notes to the financial statements.

Subsequent to the initial recognition, the Group measures the contingent liabilities that are recognised separately at the date of acquisition at the higher of the amount that would be recognised in accordance with the provisions of MFRS 137 “Provisions, Contingent Liabilities and Contingent Assets” and the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with MFRS 15 “Revenue from contracts with customers”.

17 REVENUE AND OTHER INCOME RECOGNITION

Revenue from contracts with customers is recognised by reference to each distinct performance obligation promised in the contract with the customer when or as the Group transfers controls of the goods or services promised in a contract and the customer obtains control of the goods or services.

Revenue from contracts with customers is measured at its transaction price, being the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, net of discounts. The transaction price is allocated to each distinct good or service promised in the contract. Depending on the terms of the contract, revenue is recognised when the performance obligation is satisfied, which may be a point in time or over time.

The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

- The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs.

- The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.

- The Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If any of the above conditions are not met, the Group recognises revenue at the point in time at which the performance obligation is satisfied.


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17 REVENUE AND OTHER INCOME RECOGNITION (CONTINUED)

(a) Revenue from the contracts with customers

(i) Plantations and upstream manufacturing

The Group’s revenue is derived mainly from its upstream operations. In the upstream operations, the Group sells plantation products and produce such as crude palm oil, palm kernel produce and FFB (collectively known as “plantation products and produce”).

Revenue from sales of plantation produce are recognised (net of discount and taxes collected on behalf, if any) at the point when the control of goods has been transferred to the customer. Based on the terms of the contract with the customer, control transfers upon delivery of the goods to a location specified by the customer and the acceptance of the goods by the customer. There is no element of financing present as the Group’s sales of goods are on credit terms ranging from 1 to 30 days.

(ii) Management fee services

Fees from management services and advisory services are recognised as revenue over time during the period in which the services are rendered. There is no element of financing as the sales are made with a credit term of 30 days, which is consistent with the market practice.

(b) Revenue from other sources

(i) Interest income

Interest income is recognised using the effective interest method.

Interest income from financial assets at fair value through profit or loss (“FVTPL”) is recognised as part of net gains or net losses on these financial instruments.

Interest income on financial assets at amortised cost which is calculated using the effective interest method is recognised in the statement of comprehensive income as part of other income.


Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).


Interest income is recognised using the effective interest method, taking into account the principal outstanding and the effective rate over the period to maturity.

(ii) Rental income

Rental income is recognised on an accrual basis unless collectibility is in doubt, in which case the recognition of such income is suspended.

(iii) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.


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18 FOREIGN CURRENCIES

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The financial statements of the Group and of the Company are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency and the Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except that exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs are classified as borrowing costs.

Exchange differences are deferred in other comprehensive income when they are attributable to items that form part of the net investment in a foreign operation.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as at fair value through other comprehensive income (2018: available-for-sale financial assets), are included in other comprehensive income.

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthedateof that statement of financial position;

• Incomeandexpenses foreachstatementof comprehensive incomepresentedare translatedat theaverage exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

• Allresultingexchangedifferencesarerecognisedasaseparatecomponentof othercomprehensiveincome.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate at the date of the statement of financial position. Exchange differences arising are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign operations are recognised in other comprehensive income. On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the exchange differences relating to that foreign operation recognised in other comprehensive income and accumulated in the separate component of equity are reclassified to profit or loss, as part of the gain or loss on disposal. In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in associates or joint ventures that do not result in the Group losing significant influence or joint control) the proportionate share of the accumulated exchange difference is reclassified to profit or loss.


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19 FINANCIAL INSTRUMENTS

Financial instruments are contracts that give rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.


Financial Assets

(a) Classification

From 1 April 2018, the Group classifies its financial assets in the following measurement categories:

• thosetobemeasuredsubsequentlyatfairvaluethroughprofitorloss;and

• thosetobemeasuredatamortisedcost

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

(c) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest (“SPPI”).

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are two measurement categories into which the Group classifies its debt instruments:

(i) Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payment of principal and interest (“SPPI”) are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss together with foreign exchange gains and losses. Impairment is presented as a separate line item in the statement of comprehensive income.

(ii) Fair value through profit or loss (“FVTPL”)

Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. The Group may also irrevocably designate financial assets at FVTPL if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being measured on different basis. Fair value changes are presented net in other gains/(losses) in the statements of comprehensive income in the period in which it arises.


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19 FINANCIAL INSTRUMENTS (CONTINUED)

Accounting policy applied from 1 April 2018 (continued)

Financial Assets (continued)

(d) Impairment–financialassetsandfinancialguaranteecontracts

(1) Impairment for debt instruments and financial guarantee contracts

The Group assesses on a forward looking basis the expected credit loss (“ECL”) associated with its debt instruments carried at amortised cost and financial guarantee contracts issued. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Group has three types of financial instruments that are subject to the ECL model:

• Tradereceivables

• Otherreceivables(includingamountsduefromsubsidiaries)

• Financialguaranteecontracts

While cash and cash equivalents are also subject to the impairment requirements of MFRS 9, the identified impairment was immaterial.

ECL represent a probability-weighted estimate of the difference between present value of cash flows according to contract and present value of cash flows the Group expects to receive, over the remaining life of the financial instrument. For financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Group expects to receive from the holder, the debtor or any other party.

The measurement of ECL reflects:

• anunbiasedandprobability-weightedamountthatisdeterminedbyevaluatingarangeof possibleoutcomes;

• thetimevalueof money;and

• reasonable and supportable information that is available without undue cost or effort at thereporting date about past events, current conditions and forecasts of future economic conditions.

(a) General 3-stage approach is applied to determine the expected credit losses for other receivables(includingamountsduefromsubsidiaries–non-tradeandnon-interestbearingadvances) and financial guarantee contracts issued

At each reporting date, the Group measures ECL through loss allowance at an amount equal to 12 months ECL if credit risk on a financial instrument or a group of financial instruments has not increased significantly since initial recognition. For all other financial instruments, a loss allowance at an amount equal to lifetime ECL is required.

(b) Simplified approach for trade receivables

The Group applies the MFRS 9 simplified approach to measure ECL which uses a lifetime ECL for all trade receivables.


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(d) Impairment–financialassetsandfinancialguaranteecontracts(continued)

(2) Significant increase in credit risk

The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportable forward-looking information.

The following indicators are incorporated:

• internalcreditrating

• externalcreditrating(asfarasavailable)

• actualorexpectedsignificantadversechangesinbusiness,financialoreconomicconditionsthatare expected to cause a significant change to the debtor’s ability to meet its obligations

• actualorexpectedsignificantchangesintheoperatingresultsof thedebtor

• significantincreasesincreditriskonotherfinancialinstrumentsof thesamedebtor

• significantchangesinthevalueof thecollateralsupportingtheobligationorinthequalityof third-party guarantees or credit enhancements

• significantchangesintheexpectedperformanceandbehaviourof thedebtor,includingchangesin the payment status of the debtor in the Group and changes in the operating results of the debtor.

Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating model.

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.

For financial guarantee contracts, the Group considers the change in the risk that the specific debtor will default on the contract by considering the above indicators.


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(d) Impairment–financialassetsandfinancialguaranteecontracts(continued)

(3) Definition of default and credit-impaired financial assets

The Group defines a financial instrument as in default, which is fully aligned with the definition of credit-impaired, when it meets one or more of the following criteria:

(i) Quantitative criteria:

The Group defines a financial instrument as in default, when the counterparty fails to make contractual payment within 90 days of when they fall due, unless there are specific reasons for delay in payment beyond 90 days by certain customers, as determined on a case by case basis by management.

(ii) Qualitative criteria:

The debtor meets unlikeliness to pay criteria, which indicates the debtor is in significant financial difficulty. The Group considers the following instances:

• thedebtorisinbreachof financialcovenants

• concessionshavebeenmadebythelenderrelatingtothedebtor’sfinancialdifficulty

• itisbecomingprobablethatthedebtorwillenterbankruptcyorotherfinancialreorganisation

• thedebtorisinsolvent

Financial instruments that are credit-impaired are assessed on an individual basis.

(4) Groupings of instruments for ECL measured on collective basis

Trade receivables which are in default or credit-impaired are assessed individually.

Amounts due from subsidiaries in the Company’s separate financial statements are assessed on an individual basis for ECL measurement, as credit risk information of these entities can be obtained and monitored by the Company.

(e) Write-off

(i) Trade receivables

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there are no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and significant delays in collection periods.

Impairment of trade receivables are presented as net impairment and disclosed as a separate line item in the statement of comprehensive income. Subsequent recoveries of amounts previously written off are credited against the same line item.

(ii) Other receivables

The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Group may write off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in write back of impairment


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Financial Assets

(a) Classification

Until 31 March 2018, the Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The classification depends on the nature of the asset and the purpose for which the financial assets were acquired. Management determines the classification at initial recognition.

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired or incurred principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current assets.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the statements of financial position date which are presented as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ (including amounts due from subsidiaries) and ‘deposits, cash and bank balances’ in the statements of financial position.

(b) Recognition and initial measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group commits to purchase or sell the asset.

Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are expensed in profit or loss.

(c) Subsequentmeasurement–gainsandlosses

Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of financial assets at fair value through profit or loss, including the effects of currency translation, interest and dividend income are recognised in profit or loss in the period in which the changes arise.


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Accounting policy applied until 31 March 2018 (continued)


(d) Subsequentmeasurement–impairmentof financialassets

The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired and recognises an allowance for impairment when such evidence exists. A financial asset or a group of financial assets is impaired and impairment is incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

If any such evidence exists, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced and the amount of the loss is recognised in profit or loss.

The carrying amount of the financial assets is reduced by the impairment directly for all financial assets with the exception of trade and other receivables, where the carrying amount is reduced through the use of an allowance account.

Loans and receivables

Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.

When a receivable is uncollectible, it is written off against the related allowance account. Such receivables are written off after all the necessary procedures have been completed and the amount of the loss has been determined.

If ‘loans and receivables’ have variable interest rates, the discount rate for measuring any impairment is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of the reversal is recognised in profit or loss.

(e) Derecognition

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.


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Accounting policy applied in the financial years ended 31 March 2019 and 31 March 2018

Financial Liabilities

The Group classifies its financial liabilities as financial liabilities at fair value through profit or loss and other financial liabilities. The classification depends on the nature of the liabilities and the purpose for which the financial liabilities were incurred. Management determines the classification at initial recognition.

(a) Financial liabilities at fair value through profit or loss

The Company classifies financial liabilities at fair value through profit or loss if they are acquired principally for the purpose of buying in the short term, i.e. are held for trading. They are presented as current liabilities if they are expected to be settled within 12 months after the end of the reporting period; otherwise they are presented as non-current liabilities. Derivatives are also categorised as held for trading unless they are designated as hedges.

(b) Other financial liabilities

Other financial liabilities of the Group comprise ‘borrowings’ and ‘trade and other payables’.

When other financial liabilities are recognised initially, they are measured at fair value plus directly attributable transaction costs.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the statement of comprehensive income when the other financial liabilities are derecognised, and through the amortisation process.

Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expired.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount presented on the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value.

Fair value estimation

The fair value of crude palm oil (“CPO”) pricing swap contracts is based on the average future CPO prices quoted on the Bursa Malaysia Derivative Exchange at the statements of financial position date.

The carrying values of financial assets and financial liabilities with a maturity period of less than one year are assumed to approximate their fair values.

20 TRADE AND OTHER PAYABLES

Trade and other payables represent liabilities for goods or services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year, or in the normal operating cycle of the business if longer. Otherwise, they are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value net of transaction costs incurred and subsequently measured at amortised cost using the effective interest method.


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21 PROVISIONS

Provisions are recognised when:

• theGrouphasapresentlegalorconstructiveobligationasaresultof pastevents;

• itisprobablethatanoutflowof resourceswillberequiredtosettletheobligation;and

• areliableestimateof theamountcanbemade.

Where the Group expects a provision to be reimbursed by another party, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as finance cost.

22 FINANCIAL GUARANTEE CONTRACTS

Financial guarantee contracts are contracts that require the Group or the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, in accordance with the terms of the debt instrument.

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value.

The fair value of a financial guarantee is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.

When financial guarantees in relation to loans or payables of subsidiaries are provided by the Company for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of investment in subsidiaries.


Financial guarantee contracts are subsequently measured at the higher of the amount determined in accordance with the expected credit loss model under MFRS 9 “Financial Instruments” and the amount initially recognised less cumulative amount of income recognised in accordance with the principles of MFRS 15 “Revenue from Contracts with Customers”, where appropriate.


Financial guarantee contracts are recognised as financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of the amount determined in accordance with FRS 137 “Provisions, contingent liabilities and contingent assets” and the amount initially recognised less accumulative amortisation, where appropriate.

23 SEGMENTAL INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (“CODM”). The Management Committee (“MC”), who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CODM.

Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment.

Segment revenue, expenses, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process.

The profit before tax for each operating segment is presented at net of adjustment for any relevant intersegment transactions.


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1 GENERAL INFORMATION

The principal activities of the Company are the cultivation of oil palms, investment holding, trading of crude palm oil and provision of management services to the subsidiaries. The principal activities of the subsidiaries are stated in Note 17 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at the 2nd Floor, Wisma IJM, Jalan Yong Shook Lin, 46050 Petaling Jaya, Selangor Darul Ehsan.The principal place of business of the Company is located at Wisma IJM Plantations, Lot 1, Jalan Bandar Utama, Batu 6, Jalan Utara, 90000 Sandakan, Sabah.

The ultimate holding company is IJM Corporation Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 29 May 2019.

2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the Directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

(a) Deferred tax assets

The Group reviews the carrying amounts of deferred tax assets at the end of each reporting period and reduces these to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred tax assets to be utilised. The Group’s assessment on the recognition of deferred tax assets on deductible temporary differences and unutilised tax losses is based on the level and timing of forecasted taxable income of the subsequent reporting periods. This forecast is based on the Group’s past results and future expectations of fresh fruit bunches and crude palm oil prices and yields, estate operational costs, finance costs as well as foreign exchange differences. However, there is no certainty that the Group will generate sufficient taxable income to allow all or part of the deferred tax assets to be utilised, which would result in a reversal in the deferred tax assets which have been recognised. Refer to Note 28 for further details.

(b) Fair value of produce growing on bearer plants

To arrive at the fair value, the Group has considered the oil content of the unripe fresh fruit bunches (“FFB”) and assumed that the net cash flows to be generated from FFB prior to more than 15 days to harvest is negligible. Therefore, the quantity of unripe FFB on the bearer plants of up to 15 days prior to harvest was used for valuation purpose. The fair value of the unripe FFB was derived using the market approach based on a certain percentage of the fair value of the ripe FFB, to adjust for the actual oil extraction rate and kernel extraction rate of the unripe FFB from the laboratory tests, less costs to sell, which were established based on historical information.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2019

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2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

(c) Accounting for pre-cropping costs

The Group has accounted for the pre-cropping costs in accordance with the underlying principles set out in Agriculture: Bearer Plants (Amendments to MFRS 116 “Property, Plant and Equipment” and MFRS 141 “Agriculture”) during the financial year. The adoption of the amendments to MFRS 116 and MFRS 141 has been applied retrospectively and comparative figures have been restated.

Accordingly, the pre-cropping costs, which comprise new planting expenditure and replanting expenditure incurred have been capitalised as bearer plants upon the adoption of the amendments to MFRS 116 and MFRS 141 and are depreciated on a straight line basis over the economic useful life of the mature bearer plants.

The Group has applied some judgement in identifying the pre-cropping costs incurred for the plantation activities which are eligible for capitalisation, and allocating these costs between mature and immature bearer plants, by reference to the relative size of the immature plantations over the total planted area of the respective oil palm estates of the Group and the Company. The mature bearer plants are amortised over the economic useful life of the plants, which is estimated to be 22 years.

3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its market, credit, liquidity and capital risks. The Board of Directors has set the policies to manage each of the financial risks and reviews them regularly throughout the financial year. The Group’s financial risk management policies are summarised as follows:

(a) Market risk

(i) Cash flow interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short-term in nature and comprise mostly fixed deposit placements.

The Group’s interest rate risk arises primarily from interest-bearing borrowings at floating rates which expose the Group to cash flow interest rate risk. The Group manages its interest rate exposure by monitoring closely interest rate movements and maintaining the alternative to swap its floating rate borrowings to fixed rate borrowings.

If the Group’s borrowings at variable rates, for which effective hedges have not been entered into, change by the following basis points, with all other variables being held constant, the effects on profit after tax and equity would be as follows:

Group

2019 2018 RM’000 RM’000

Effects to profit after tax and equity if borrowings based on benchmark prime lending rate (“LIBOR”):

- increase by 50 basis points (1,946) (2,749)- decrease by 50 basis points 1,946 2,749


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3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Market risk (continued)

(i) Cash flow interest rate risk (continued)

Group

2019 2018 RM’000 RM’000

Effects to profit after tax and equity if borrowings based on cost of funds (“COF”):

- increase by 50 basis points (1,013) -- decrease by 50 basis points 1,013 -

(ii) Foreign currency exchange risk

The Group maintains a hedge, whenever possible, by borrowing in the currency of the country in which the investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The Group principally keeps cash and bank balances in their respective functional currencies except for certain fixed deposits which are kept in currencies other than their respective functional currencies (i.e. US Dollar fixed deposits).

Entities in the Group primarily transact in their respective functional currencies except for certain borrowings which were denominated in currencies other than their respective functional currencies (i.e. US Dollar and Yen borrowings).

Currency risks as defined by MFRS 7 Financial Instruments: “Disclosures” arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency. As at the reporting date, the Group’s Indonesian Rupiah (“IDR”) and Ringgit Malaysia (“RM”) functional currency entities had US Dollar (“USD”) and Japanese Yen (“YEN”) denominated net monetary liabilities and assets. The effects to the Group’s profit after tax and equity if the USDand YEN had strengthened/weakened by 5% against IDR and RM are as follows:

Group

2019 2018 RM’000 RM’000

Net monetary liabilities denominated in USD 506,251 685,681

Effects to profit after tax and equity if the USD had strengthened/weakened against IDR:

- strengthened (18,984) (25,713) - weakened 18,984 25,713


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(ii) Foreign currency exchange risk (continued)

Group

2019 2018 RM’000 RM’000

Net monetary liabilities denominated in YEN 192,156 -

Effects to profit after tax and equity if the YEN had strengthened/weakened against IDR:

- strengthened (7,206) -- weakened 7,206 -

Net monetary assets denominated in USD 52,897 33,809

Effects to profit after tax and equity if the USD had strengthened/weakened against RM:

- strengthened 2,644 1,690- weakened (2,644) (1,690)

As at the reporting date, there are no other significant monetary balances held by the Group and the Company that are denominated in non-functional currencies.

(iii) Commodity price risk

The Group is exposed to the price volatility risk due to fluctuation in the palm products commodity market. To manage and mitigate the risk on price volatility, the Group monitors the fluctuation of crude palm oil prices on a daily basis and enters into physical forward selling commodity contracts or crude palm oil (“CPO”) pricing swap arrangements in accordance with guidelines set by the Board of Directors. The CPO swap contracts which are offered by certain reputable banks in Malaysia, can be net settled during the period of the contracts.

If average prices for crude palm oil change by 10% with all other variables being held constant, the effects on profit after tax and equity would be as follows:

Group

2019 2018 RM’000 RM’000

CPO Swap Contracts

Effects to profit after tax and equity if crude palm oil prices- increased by 10% (3,490) (687)- decreased by 10% 3,490 687


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(iii) Commodity price risk (continued)

Physical forward selling commodity contracts are entered into and continue to be held for the purpose of the delivery of the physical commodity in accordance with the Group’s expected sale requirements as follows:

Group

Average contract

price per Tonnage tonne

Tonnes RMPhysical forward selling commodity contracts

Sales contracts:- 31 March 2019 - -- 31 March 2018 6,750 3,720

(b) Credit risk

Risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises from derivative financial instruments, and deposits, cash and bank balances with financial institutions, credit exposures to customers arising from sale of goods or rendering services and outstanding receivables which mainly consist of amounts due from subsidiaries, advances under plasma schemes and advances to non-controlling interests.

For trade receivables, it is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. To mitigate credit risk, the Group only trades with the selected parties who are known to be creditworthy.

Advances under plasma schemes are recoverable either through bank loans or direct repayments from plasma schemes when these plasma areas mature. As for the advances to non-controlling interests, the shares of the subsidiaries held by the non-controlling interests have been pledged as a security for the Group.

For other financial assets which include derivative financial instruments and deposits, cash and bank balances with fiancial institutions, the Group adopts the policy of dealing only with counterparties of high credibility (i.e. banks and other financial institutions).

Impairment

The Group has the following types of financial instruments that are subject to the expected credit loss (“ECL”) model:

• Tradereceivablesarisingfromsaleof goodsorrenderingof services;

• Otherreceivables(includingamountsduefromsubsidiaries);and

• Financialguaranteecontracts

While derivative financial instruments, deposits, cash and bank balances with financial institutions are also subject to the impairment requirements as set out in MFRS 9, there is no impairment loss identified as the Group places these balances with reputable financial institutions with high credit ratings and hence the credit risk identified is low.


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(b) Credit risk (continued)

Impairment (continued)

(i) Trade receivables using the simplified approach

The Group applies the simplified approach under MFRS 9 to measure expected credit losses, which uses a lifetime expected loss allowance for trade receivables. To measure the expected losses, trade receivables have been grouped based on shared credit risk characteristics and days past due.

The expected loss rates are based on historical payment profiles of sales and the corresponding historical credit losses experienced by the Group. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors (such as palm products prices and crude oil price) affecting the ability of the customers to settle the receivables. The historical loss rates will be adjusted based on the expected changes in these factors. No significant changes to estimation techniques or assumptions were made during each reporting period.

(ii) Other receivables (includingamountsdue fromsubsidiaries–non-tradeandnon-interestbearingadvances)

The Group uses four categories to reflect their credit risk and how the loss allowance is determined for each of those categories. A summary of the assumptions underpinning the Group’s expected credit loss is as follows:

Category Definition of categoryBasis for recognition of expected credit loss provision

Performing Customers have a low risk of default and a strong capacity to meet contractual cash flows.

12 months expected losses. Where the expected lifetime on an asset is less than 12 months, expected losses are measured at its expected lifetime.

Underperforming Debtors for which there is a significant increase in credit risk due to actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to meet its obligation.

Lifetime expected losses

Non-performing There is evidence indicating the assets are credit-impaired.

Lifetime expected losses

Write-off There is evidence indicating that there is no reasonable expectation of recovery based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount.

Asset is written off


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(b) Credit risk (continued)

Impairment (continued)

(ii) Other receivables (including amounts due from subsidiaries)

Based on the above, loss allowance is measured on either 12 months ECL or lifetime ECL, by considering the likelihood that the debtor would not be able to repay during the contractual period, the percentage of contractual cash flows that will not be collected if default happens and the outstanding amount that is exposed to default risk. In addition, forward looking information such as the macroeconomic conditions has been incorporated into the determination of expected credit losses.

For the Company’s amounts due from subsidiaries that are repayable on demand, the calculation of ECL is based on the following assumptions:

• If the borrower has sufficient accessible highly liquid assets in order to repay the loan if demanded at the reporting date, the ECL is likely to be immaterial;

• If the borrower could not repay the loan if demanded at the reporting date, the Companyconsiders the expected manner of recovery to measure the ECL. The recovery manner could be either through ‘repayment over time’ or a fire sale of less liquid assets by the borrower; and

• If therecoverystrategiesindicatethattheCompanywouldfullyrecovertheoutstandingbalanceof the loan, the ECL would be limited to the effect of the discounting of the amount due on the loan, at the loan’s effective interest rates, over the period until the amount is fully recovered.

(iii) Financial guarantee contracts

Other than those disclosed in Note 31, all of the financial guarantee contracts of the Group and the Company are considered to be performing and have low risks of default. There were no significant increases in credit risks as at the reporting period and historically there were no instances where these financial guarantee contracts were called upon by the holders of these financial guarantee contracts.

Whilst the Group’s financial assets and financial guarantee contracts are subject to the impairment requirements as described above, there was no impairment loss recognised as at the reporting date as these balances are assessed as performing, have low credit risks, and historically there were limited instances where counterparties have defaulted on their contractual payments obligations.

The Group’s and the Company’s maximum exposure to credit risk for trade and other receivables, derivative financial instruments, deposits, cash and bank balances are disclosed in Note 20, Note 21 and Note 23 to the financial statements respectively.


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(c) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable level to its overall financial position.

The tables below analyse the financial liabilities of the Group and of the Company into relevant maturity groupings based on the remaining period from the statements of financial position date to the contractual maturity dates. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than Between 1 Over 5 1 year and 5 years years Total RM’000 RM’000 RM’000 RM’000

Group

At 31 March 2019

Short term advance facility 83,738 - - 83,738Term loans 76,923 719,210 - 796,133Trade and other payables 71,493 - - 71,493Financial guarantee contracts 2,045 12,807 10,375 25,227

234,199 732,017 10,375 976,591

At 31 March 2018

Short term advance facility 77,924 - - 77,924Term loans 204,453 464,149 5,843 674,445Trade and other payables 86,386 - - 86,386Financial guarantee contracts 1,418 8,179 18,611 28,208

370,181 472,328 24,454 866,963

At 1 April 2017

Short term advance facility 89,155 - - 89,155Term loans 140,321 639,724 33,536 813,581Trade and other payables 94,739 - - 94,739Financial guarantee contracts 1,055 8,980 17,026 27,061

325,270 648,704 50,562 1,024,536


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(c) Liquidity risk (continued)

The Group has provided corporate guarantees and undertaking to PT Bank CIMB Niaga of Indonesia in respect of plasma loans facility amounting to IDR238 billion-approximately RM68.1 million (2018: IDR142 billion-approximately RM40.0 million). No loss is expected to arise from these corporate guarantees and undertaking and the risk of default on the repayment obligation is minimal as all amounts are estimated to be recoverable. As at 31 March 2019, IDR100 billion-approximately RM28.6 million (2018: IDR100 billion-approximately RM28.2 million) has been drawndown.

The fair value of the restricted deposits with a licenced bank held as security with respect of the covenants under the Group’s term loans and corporate guarantee on the plasma loans facility are disclosed in Note 36 to the financial statements.

Less than Between 1 Over 5 1 year and 5 years years Total RM’000 RM’000 RM’000 RM’000

Company

At 31 March 2019

Amounts due to subsidiaries 20,311 - - 20,311Trade and other payables 9,084 - - 9,084Financial guarantee contracts 76,923 719,210 - 796,133

106,318 719,210 - 825,528

At 31 March 2018

Amounts due to subsidiaries 35,274 - - 35,274Trade and other payables 12,269 - - 12,269Financial guarantee contracts 204,453 464,149 5,843 674,445

251,996 464,149 5,843 721,988

At 1 April 2017

Amounts due to subsidiaries 35,216 - - 35,216Trade and other payables 14,840 - - 14,840Financial guarantee contracts 140,321 639,724 33,536 813,581

190,377 639,724 33,536 863,637

The Company has guaranteed the term loans for certain subsidiaries under the terms of the financial guarantee contracts. Under the terms of the financial guarantee contracts, the Company will fulfil all the repayment obligations on behalf of the guaranteed subsidiaries to the lenders upon failure of the subsidiaries to make payments when they become due. The risk of default on the repayment obligations by the subsidiaries is minimal. Accordingly, no loss allowance was identified based on 12 months expected credit losses.

Subsequent to the reporting date in early April 2019, new term loans facilities amounting to USD15.0 million and USD25.0 million respectively were drawn down by PT Primabahagia Permai and PT Sinergi Agro Industri, subsidiaries of the Company in Indonesia to repay their existing term loan facilities under term loan 1 and term loan 2 if any and for working capital purpose. The term loan of USD15.0 million is to be repaid in 12 equal quarterly instalments of USD1.25 with the first repayment commencing from 24 months after the first draw down. The term loan of USD25.0 million is to be repaid in 11 equal quarterly instalments of USD2.1 million and 1 final instalment of USD1.9 million with the first repayment commencing from 24 months after the first draw down.

The credit terms of financial liabilities are disclosed in Notes 30 and 31 to the financial statements.


159


(d) Capital risk

The Group considered equity capital and net debt as its primary definition of capital, which is further defined below.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain an optimal capital structure so as to maximise shareholder value and to meet its’ externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Group may adjust the dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new financing facilities or dispose assets to reduce borrowings.

Certain overseas subsidiaries of the Group are subject to externally imposed capital requirements and for which the Group has complied with those requirements as disclosed in Note 30 to the financial statements.

Management monitors capital based on the Group’s gearing ratio. The gearing ratio is calculated as net debt divided by equity capital. Net debt is calculated as total borrowings (excluding trade and other payables) less cash and cash equivalents. Equity capital is equivalent to capital and reserves attributable to owners of the Company. The Group monitors the gearing ratio based on the terms of the respective loan agreements. The gearing ratio of the Group as at 31 March 2019 was 0.48 (2018: 0.37), which was calculated based on the net debt and equity capital of the Group as at 31 March 2019 of RM648.5 million (2018: RM516.1 million) and RM1,330.5 million (2018: RM1,382.2 million) respectively.

(e) Fair value measurements

The following table presents assets and liabilities measured at fair value and classified by level of the following fair value measurement hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (Level 2); and

(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000

2019

Group

AssetsDerivative financial instruments (Note 21) - 4,470 - 4,470

2018

Group

AssetsDerivative financial instruments (Note 21) - 1,055 - 1,055

The carrying amounts of the Group’s and the Company’s trade and other receivables, trade and other payables and borrowings approximate their fair values.


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4 REVENUE

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Revenue from contracts with customers:- Crude palm oil 468,468 540,392 - -- Crude palm kernel oil 55,027 98,938 - -- Fresh fruit bunches 89,568 92,515 78,857 105,238- Palm kernel expellers 6,362 6,948 - -- Palm kernel and other by-products 10,593 6,988 - -- Oil palm seeds 861 1,377 861 1,377- Plantation advisory fee 21 59 21 59- Management fees from subsidiaries - - 8,659 8,691

630,900 747,217 88,398 115,365

Revenue from other source:- Dividend income from subsidiaries - - 91,242 22,200

630,900 747,217 179,640 137,565

Timing of revenue from contracts with customers:- Point in time 630,879 747,158 79,718 106,615- Over time 21 59 8,680 8,750

630,900 747,217 88,398 115,365

5 COST OF SALES


Cost of sales consist of:- Planting and operational costs 308,985 255,849 44,086 43,711- Raw materials 112,778 172,814 - -- Amortisation of land use rights and

depreciation of property, plant and equipment 110,461 117,144 17,428 17,788- Services rendered - - 7,067 7,429

532,224 545,807 68,581 68,928


161

6 OTHER INCOME AND NET OTHER GAINS


(a) Other income/(expenses)

Interest income from placement of fixed deposits in financial institutions 4,361 5,722 841 773

Rental income 264 238 234 224Insurance claims 430 179 - -Gain on disposal of property, plant and equipment * - - -Miscellaneous other income 2,604 4,185 708 967Property, plant and equipment scrapped (29) (644) (5) (23)Impairment of investment in subsidiaries - - (300) -

7,630 9,680 1,478 1,941

(b) Other gains/(losses)

Financial assets at fair value through profit or loss:- Fair value gains on crude palm oil pricing swaps 7,530 972 - -

Financial liabilities at amortised cost:- Amortisation of financial guarantee contract

(Note 31(b)(iv)) - - 2,557 610

Foreign exchange:- Realised foreign exchange losses (2,012) (532) - -- Unrealised foreign exchange gains 2,150 301 - -

138 (231) - -

15,298 10,421 4,035 2,551

* below RM1,000/=

7 FINANCE COSTS


Interest expense on:- Term loans 27,729 22,790 - -- Short term advance facility 3,135 2,206 - -Foreign exchange differences on borrowings 28,599 26,211 - -Amortisation of upfront fees on borrowings 168 - - -

59,631 51,207 - -

Less: Interest expense capitalised in property, plant and equipment (Note 14(b)) (6,211) (1,900) - -

Less: Foreign exchange differences capitalised in property, plants and equipment (Note 14(b)) (2,676) (2,751) - -

Total finance costs capitalised (8,887) (4,651) - -

Recognised in statements of comprehensive income 50,744 46,556 - -

Finance costs recognised in statements of comprehensive income comprised:

- Interest expense 24,653 23,096 - -- Foreign exchange differences on borrowings 25,923 23,460 - -- Upfront fee amortisation on borrowings 168 - - -

50,744 46,556 - -


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8 (LOSS)/PROFIT BEFORE TAX

(a) The following amounts have been charged/(credited) in arriving at (loss)/profit before tax:


Employee benefits expense (Note 9) 140,609 142,029 25,125 25,642Non-Executive Directors’ remuneration (Note 10) 766 831 766 831Auditors’ remuneration (Note 8(b)) - Current year 558 578 148 145- Underprovision in prior year 12 - 7 -Amortisation of land use rights (Note 15) 5,443 5,460 1,124 1,126Depreciation of property, plant and equipment

(Note 14) 106,109 116,124 16,304 16,662Property, plant and equipment scrapped 29 644 5 23Rental of premises 80 95 80 95Lease payments on land use rights 1,134 1,134 448 448Realised foreign exchange gains (810) (49) - -Realised foreign exchange losses 2,822 581 - -Unrealised foreign exchange losses 1,346 4,910 - -Unrealised foreign exchange gains (3,496) (5,211) - -───────

(b) Auditors’remuneration–statutoryaudit


PricewaterhouseCoopers PLT Malaysia* 256 239 155 145Other member firm of PricewaterhouseCoopers

International Limited* 314 339 - -

570 578 155 145

* PricewaterhouseCoopers PLT, Malaysia and other member firm of PwC International Limited are separate and independent legal entities.

9 EMPLOYEE BENEFITS EXPENSE


Salaries, wages and bonuses 137,326 135,497 23,631 24,343Contributions to defined contribution plan 8,094 8,238 1,978 2,073Social security contributions 3,006 2,925 137 137Employees insurance scheme 40 10 16 3Share-based payment 3,238 2,327 2,536 1,844Defined benefit expense (Note 29) 4,857 14,412 - -

156,561 163,409 28,298 28,400Less: Expenses capitalised in bearer plants (Note 14(b)) (15,952) (21,380) (3,173) (2,758)

Recognised in statements of comprehensive income (Note 8) 140,609 142,029 25,125 25,642

Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration amounting to RM2,572,000 (2018: RM3,506,000) and RM2,572,000 (2018: RM3,506,000) respectively as further disclosed in Note 10.


163

10 DIRECTORS’ REMUNERATION


Executive:Salaries and other emoluments 1,933 2,116 1,933 2,116Contributions to defined contribution plan 290 317 290 317Share option expense 349 1,073 349 1,073

2,572 3,506 2,572 3,506

Non-Executive:Fees (Note 8) 766 831 766 831Other emoluments 43 45 43 45

809 876 809 876

Total Directors’ remuneration 3,381 4,382 3,381 4,382Benefits-in-kind 81 68 81 68

Total Directors’ remuneration including benefits-in-kind 3,462 4,450 3,462 4,450

11 INCOME TAX EXPENSE


Current tax:- Current year 8,153 26,580 2,923 8,154- Under accrual in prior years 22 2,276 132 2,160

8,175 28,856 3,055 10,314

Deferred tax (Note 28):- Relating to (reversal)/origination of temporary

differences (7,253) (1,878) 633 1,449

Total income tax expense 922 26,978 3,688 11,763

A reconciliation of income tax expense applicable to (loss)/profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:


(Loss)/profit before tax (43,307) 50,770 102,825 57,943

Tax calculated at the Malaysian tax rate of 24% (2018: 24%) (10,394) 12,185 24,678 13,906

Tax effects of:- Different tax rate in other country (1,161) (356) - -- Income not subject to tax (956) (736) (22,512) (5,474)- Share of result of an associate (119) - - -- Recognition of deferred tax assets previously

not recognised (2,041) (34,609) - -- Deferred tax assets derecognised - 20,793 - -- Expenses not deductible for tax purposes 15,571 27,425 1,390 1,171- Under accrual of current tax in prior years 22 2,276 132 2,160

Total income tax expense 922 26,978 3,688 11,763


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12 (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share

The basic (loss)/earnings per share for the financial year is calculated by dividing the Group’s net (loss)/profit attributable to owners of the Company for the financial year by the weighted average number of ordinary shares in issue during the financial year.

Group 2019 2018

Net (loss)/profit attributable to owners of the Company (RM’000) (36,344) 27,862

Weighted average number of ordinary shares in issue (‘000) 880,580 880,580

Basic (loss)/earnings per share (sen) (4.13) 3.16

The Group does not have any potential dilutive shares that will have an impact on its basic loss or earnings per share.

13 DIVIDENDS

Group and Company 2019 2018 Gross Gross dividend Amount of dividend Amount of per share dividend per share dividend Sen RM’000 Sen RM’000

In respect of financial year ended 31 March 2018:- A single tier interim dividend on 880,580,460

ordinary shares 5 44,029 - -

In respect of financial year ended 31 March 2017:- A single tier interim dividend on 880,580,460

ordinary shares - - 7 61,641

5 44,029 7 61,641

On 29 May 2019, the Directors declared a single tier interim dividend amounting to 2 sen per share in respect of the financial year ended 31 March 2019. The single tier interim dividend will be paid on 17 July 2019 to every member who is entitled to receive the dividend as at 5.00 p.m. on 28 June 2019. The interim dividend has not been recognised in the statement of changes in equity as it was declared subsequent to the financial year end.

The Directors do not recommend the payment of any final dividend for the financial year ended 31 March 2019 (2018: Nil).


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169

14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(a) Analysis of mature and immature bearer plants are as follows:

Group Company Mature Immature Total Mature Immature Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019

Net book value:

At 1 April 2018, as previously reported - - - - - -

Effects of transition from FRSs to MFRSs 588,358 174,509 762,867 75,250 27,173 102,423

As presented 588,358 174,509 762,867 75,250 27,173 102,423Additions - 37,721 37,721 - 13,897 13,897Depreciation charge for

the financial year (44,854) - (44,854) (9,240) - (9,240)Exchange differences 10,069 2,639 12,708 - - -Reclassification 54,670 (54,670) - 7,722 (7,722) -

At 31 March 2019 608,243 160,199 768,442 73,732 33,348 107,080

Cost 932,796 160,199 1,092,995 165,549 33,348 198,897Accumulated

depreciation (324,553) - (324,553) (91,817) - (91,817)

At 31 March 2019 608,243 160,199 768,442 73,732 33,348 107,080

2018

Net book value:

At 1 April 2017, as previously reported - - - - - -

Effects of transition from FRSs to MFRSs 619,345 246,873 866,218 70,897 22,122 93,019

As presented 619,345 246,873 866,218 70,897 22,122 93,019Additions - 47,682 47,682 - 17,841 17,841Depreciation charge for

the financial year (42,709) - (42,709) (8,437) - (8,437)Exchange differences (73,582) (34,742) (108,324) - - -Reclassification 85,304 (85,304) - 12,790 (12,790) -

At 31 March 2018 588,358 174,509 762,867 75,250 27,173 102,423


depreciation (293,948) - (293,948) (96,878) - (96,878)

At 31 March 2018 588,358 174,509 762,867 75,250 27,173 102,423

2017


depreciation (289,302) - (289,302) (111,266) - (111,266)

At 1 April 2017 619,345 246,873 866,218 70,897 22,122 93,019


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14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(b) Expenditure capitalised in property, plant and equipment during the financial year include the following:


Cash items:Employee benefits expense (Note 9) 15,952 21,380 3,173 2,758Payments to contractors and suppliers 109,479 100,116 13,817 17,064Finance costs (Note 7) 6,211 1,900 - -

131,642 123,396 16,990 19,822

Non-cash items:Amortisation of land use rights (Note 15) 345 481 18 13Depreciation of property, plant and equipment

(Note 14) 4,099 4,605 1,117 1,048Finance costs (Note 7) 2,676 2,751 - -

7,120 7,837 1,135 1,061

Total additions 138,762 131,233 18,125 20,883

The interest expense and foreign exchange differences capitalised under property, plant and equipment during the financial year are as follows:


Interest expense (Note 7)Bearer plants 3,737 1,877 - -Capital work-in-progress 2,474 23 - -

Total additions 6,211 1,900 - -

Foreign exchange differences (Note 7)Bearer plants 1,899 2,717 - -Capital work-in-progress 777 34 - -

Total additions 2,676 2,751 - -

Included in the Group’s additions to property, plant and equipment is finance cost capitalised at an average capitalisation rate of 3.95% for the financial year ended 31 March 2019 (2018: 3.26%).


171

15 LAND USE RIGHTS


Net book value

At 1 April 2018/2017 145,116 159,864 29,712 30,674Additions - 4,212 - 177Amortisation for the financial year (5,788) (5,941) (1,142) (1,139)Exchange differences 1,297 (13,019) - -

At 31 March 140,625 145,116 28,570 29,712

Group Company 31.3.2019 31.3.2018 1.4.2017 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost 186,544 184,908 196,647 39,259 39,258 39,081Accumulated amortisation (45,919) (39,792) (36,783) (10,689) (9,546) (8,407)

At 31 March 2019/2018 and 1 April 2017 140,625 145,116 159,864 28,570 29,712 30,674

The Group’s land use rights with a carrying value of RM45.4 million (31.3.2018: RM43.2 million, 1.4.2017: RM51.3 million) are still in the process of having the land titles secured or being transferred to the Group.

The amortisation for the financial year comprises:


Recognised in statementsof comprehensive income (Note 8) 5,443 5,460 1,124 1,126

Capitalised in bearer plants (Note 14(b)) 345 481 18 13

5,788 5,941 1,142 1,139

16 PLANTATION EXPENDITURE


Cost

Balance as previously reported - 1,107,848 1,201,570 - 254,605 254,605

Effects of transition from FRSs to MFRSs (Note 37) - (1,107,848) (1,201,570) - (254,605) (254,605)

As presented - - - - - -


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17 INTERESTS IN SUBSIDIARIES

Company 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Investments in subsidiaries, at costAt 1 April 2018/2017- Unquoted shares in Malaysia 1,063,678 849,308 849,308- Unquoted shares outside Malaysia - - *

1,063,678 849,308 849,308Less: Redemption of convertible cumulative redeemable

preference shares in subsidiaries (25,000) (80,630) -Less: Capital reduction in a subsidiary (20,100) - -Add: Subscription of convertible cumulative redeemable

preference shares in subsidiaries (“CCRPS”)** 134,000 295,000 -

At 31 March 2019/2018 and 1 April 2017- Unquoted shares in Malaysia 1,152,578 1,063,678 849,308- Unquoted shares outside Malaysia - - *Less: Accumulated impairment - Unquoted shares in Malaysia (82,427) (82,127) (82,127)

1,070,151 981,551 767,181Amounts due from subsidiaries - - 251,379Financial guarantees extended to subsidiaries 21,308 21,308 21,308

1,091,459 1,002,859 1,039,868

Notes:

* Below RM1,000** CCRPS are classified as equity instruments by the issuer as the conversion is at the option of the holder and

the redemption of the CCRPS as well as the dividend distribution are at the discretion of the issuer

During the current financial year, an impairment on the investment cost amounting to RM400,000 was made on a dormant subsidiary as a result of the carrying amount of the investment exceeding the recoverable amount, due to the dormant subsidiary having paid out a dividend amounting to RM1,449,000 during the current financial year.

A reversal of impairment amounting to RM100,000 was recorded in respect of the Company’s investment in another dormant subsidiary as a result of the recoverable amount exceeding the investment after the capital reduction exercise.

The amounts due from subsidiaries as at 1 April 2017 are denominated in Ringgit Malaysia, unsecured, interest-free and had no fixed terms of repayment. The amounts due from subsidiaries which were classified as non-current were considered as part of the net investment in subsidiaries.


173

17 INTERESTS IN SUBSIDIARIES (CONTINUED)

(a) Details of subsidiaries are as follows: (continued)

Name of subsidiariesCountry of incorporation Principal activities 31.3.2019 31.3.2018 1.4.2017

% % %

Held by the Company

Akrab Perkasa Sdn. Bhd. Malaysia Dormant 100 100 100

Berakan Maju Sdn. Bhd. Malaysia Cultivation of oil palms

100 100 100

Desa Talisai Sdn. Bhd. Malaysia Dormant 100 100 100

Desa Talisai Palm Oil Mill Sdn. Bhd.

Malaysia Dormant 100 100 100

Dynasive Enterprise Sdn. Bhd. Malaysia Investment holding 100 100 100

Excellent Challenger (M) Sdn. Bhd

Malaysia Cultivation of oil palms

100 100 100

Gunaria Sdn. Bhd. Malaysia Investment holding 100 100 100

IJM Biofuel Sdn. Bhd. Malaysia Dormant 100 100 100

IJM Edible Oils Sdn. Bhd. Malaysia Palm oil and kernel milling

100 100 100

Minat Teguh Sdn. Bhd. Malaysia Investment holding 100 100 100

Rakanan Jaya Sdn. Bhd. Malaysia Cultivation of oil palms

100 100 100

Ratus Sempurna Sdn. Bhd. Malaysia Property holding 100 100 100

Sabang Mills Sdn. Bhd. Malaysia Dormant 100 100 100

Sijas Plantations Sdn. Bhd. Malaysia Dormant 100 100 100

IJMP Investments (M) Limited* Republic of of Mauritius

Liquidated - - 100

Held by Minat Teguh Sdn. Bhd.:

PT Primabahagia Permai* Indonesia Cultivation of oil palms

95 95 95

Held by Dynasive Enterprise Sdn. Bhd.:

PT Prima Alumga* Indonesia Cultivation of oil palms

95 95 -

Held by PT Primabahagia Permai:

PT Prima Alumga* Indonesia Cultivation of oil palms

- - 95

PT Indonesia Plantation Synergy*

Indonesia Cultivation of oil palms and milling

90 90 90

Held by Gunaria Sdn. Bhd.:

PT Sinergi Agro Industri* Indonesia Cultivation of oil palms and milling

95 95 95

PT Karya Bakti Sejahtera Agrotama*

Indonesia Cultivation of oil palms

95 95 95

* Audited by a member firm of PricewaterhouseCoopers International Limited which is a separate and independent legal entity from PricewaterhouseCoopers PLT, Malaysia.

Equity interest


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(b) The transactions carried out between the Company and its wholly-owned subsidiaries during the current financial year are as follows:

(i) A wholly-owned subsidiary of the Company, Akrab Perkasa Sdn. Bhd. (“APSB”), redeemed 3,000,000 preference shares at RM1 each out of its capital amounting to RM3,000,000 and was set-off against amounts due to APSB.

(ii) A wholly-owned subsidiary of the Company, IJM Edible Oils Sdn. Bhd., redeemed 22,000 convertible cumulative redeemable preference shares (“CCRPS”) at RM1,000 each out of its capital amounting to RM22,000,000 and was settled via cash.

(iii) A wholly-owned subsidiary of the Company, Desa Talisai Sdn. Bhd. (“DTSB”) has reduced its issued share capital from RM20,600,002 to RM500,000 by returning the paid-up capital comprising of 20,100,002 shares to the Company.

(iv) A wholly-owned subsidiary of the Company, Akrab Perkasa Sdn. Bhd. (“APSB”), has issued and fully paid a total of 160,000 new ordinary shares amounting to RM160,000 as a bonus issue (“Bonus Shares”) on the basis of two (2) Bonus Shares for every twenty five (25) existing ordinary shares held by the Company, through the capitalisation from its capital redemption reserve which has reduced to nil balance pursuant to Section 618(4) of the Companies Act 2016. The new ordinary shares subscribed by the Company ranked pari passu in all respects with the existing ordinary shares of the APSB.

(v) A wholly-owned subsidiary of the Company, Sabang Mills Sdn. Bhd. (“SMSB”), has issued and fully paid a total of 40,000 new ordinary shares amounting to RM40,000 as a bonus issue (“Bonus Shares”) on the basis of two (2) Bonus Shares for every five (5) existing ordinary shares held by the Company, through the capitalisation from its capital redemption reserve which has reduced to nil balance. The new ordinary shares subscribed by the Company ranked pari passu in all respects with the existing ordinary shares of the SMSB.

(vi) A wholly-owned subsidiary of the Company, Gunaria Sdn. Bhd. (“GSB”) issued a total of 54,000 new preference shares to the Company for a total consideration of RM54,000,000. The consideration amounting to RM53,000,000 was settled through a set-off against amounts due from GSB, and the remaining consideration amounting to RM1,000,000 was settled via cash.

(vii) A wholly-owned subsidiary of the Company, Minat Teguh Sdn. Bhd. (“MTSB”), issued a total of 80,000 new preference shares to the Company, for the total consideration of RM80,000,000. The consideration amounting to RM64,500,000 was settled through a set-off against amounts due from MTSB, and the remaining consideration amounting to RM15,500,000 was settled via cash.

(c) The transactions carried out between the Company and its indirect subsidiaries and their non-controlling interests during the current financial year are as follows:

(i) A subsidiary of the Company, PT Indonesia Plantation Synergy (“PTIPS”) issued a total of 1,000,000 new ordinary shares of IDR100,000 each (approximately RM27.80 each) to its non-controlling interests and immediate holding company, PT Primabahagia Permai (“PTPP”), a subsidiary of the Company, which was settled through a set-off against amounts due to PTPP while the amounts of the new ordinary shares issued to non-controlling interests remain outstanding as at the reporting date.

(ii) A subsidiary of the Company, PT Karya Bakti Sejahtera Agrotama (“KBSA”) issued a total of 225,000 new ordinary shares of IDR1,000,000 each (approximately RM278.00 each) to its non-controlling interests and immediate holding company, Gunaria Sdn. Bhd. (“GSB”), a wholly-owned subsidiary of the Company, which was settled through a set-off against amounts due to GSB while the amounts of the new ordinary shares issued to non-controlling interests remain outstanding as at the reporting date.


175


(c) The transactions carried out between the Company and its indirect subsidiaries and their non-controlling interests during the current financial year are as follows: (continued)

(iii) A subsidiary of the Company, PT Primabahagia Permai (“PTPP”) issued a total of 197,700 new ordinary shares of IDR1,000,000 each (approximately RM278.00 each) to its non-controlling interests and immediate holding company, Minat Teguh Sdn. Bhd. (“MTSB”), a wholly-owned subsidiary of the Company, which was settled through a set-off against amounts due to MTSB while the amounts of the new ordinary shares issued to non-controlling interests remain outstanding as at the reporting date.

(iv) A subsidiary of the Company , PT Prima Alumga (“PTPA”) issued a total of 230,000 new ordinary shares of IDR1,000,000 each (approximately RM278.00 each) to its non-controlling interests and immediate holding company, Dynasive Enterprise Sdn. Bhd. (“DESB”), a wholly-owned subsidiary of the Company, which was settled through a set-off against amounts due to DESB while the amounts of the new ordinary shares issued to non-controlling interests remain outstanding as at the reporting date.

(v) A subsidiary of the Company, PT Sinergi Agro Industri (“PTS”) issued a total of 405,000 new ordinary share of IDR1,000,000 each (approximately RM278.00 each) to its non-controlling interests and immediate holding company, Gunaria Sdn. Bhd. (“GSB”), a subsidiary of the Company, which was settled through a set-off against amount due to GSB while the amounts of the new ordinary shares issued to non-controlling interests remain outstanding as at the reporting date.

There were no changes to the Group’s effective interest in these indirect subsidiaries as a result of the above transactions.

(d) The transactions carried out between the Company and its wholly-owned subsidiaries and indirect subsidiaries in the previous financial year were as follows:

(i) A wholly-owned subsidiary of the Company, IJM Edible Oils Sdn. Bhd., redeemed 130,000 Preference Shares A (“PS A”) at RM1 each, 25,000 PS A at RM1,000 each and 15,000,000 Preference Shares B at RM1 each, out of its capital amounting to RM40,130,000 and was settled via cash.

(ii) A wholly-owned subsidiary of the Company, Ratus Sempurna Sdn. Bhd., redeemed 500,000 preference shares at RM1 each out of its capital amounting to RM500,000 and was settled via cash.

(iii) A wholly-owned subsidiary of the Company, Dynasive Enterprise Sdn. Bhd. (“DESB”) issued a total of 130,000,000 new ordinary shares at the issue price of RM1.00 each to the Company, for a total consideration of RM130,000,000, through a set-off against amounts due from DESB.

(iv) A wholly-owned subsidiary of the Company, Gunaria Sdn. Bhd. (“GSB”) issued a total of 165,000 new preference shares at the issue price of RM1,000 each to the Company, for a total consideration of RM165,000,000, through a set-off against amounts due from GSB.

(v) A wholly-owned subsidiary of the Company, Minat Teguh Sdn. Bhd. (“MTSB”), redeemed 40,000 preference shares at RM1,000 each out of its capital amounting to RM40,000,000 and was settled through set-off against amounts due to MTSB.

(vi) A wholly-owned subsidiary of the Company, IJMP Investments (M) Limited which was under members’ voluntary liquidation in earlier years was liquidated in the previous financial year.

(vii) The Group undertook an internal restructuring exercise whereby a subsidiary of the Company, PT Primabahagia Permai (“PTPP”) disposed all its shareholding in a subsidiary, PT Prima Alumga (“PTPA”) to its related company, Dynasive Enterprise Sdn. Bhd. (“DESB”) for a consideration of approximately RM63,360,000 which was settled via issuance of ordinary shares, see Note 17(d)(iii) above. The internal restructuring exercise resulted in an increase in the Group’s effective equity interest in PTPA from 90% to 95% and RM4,730,000 was accounted for in equity as transaction with non-controlling interests. There was no material effect on the results and the net tangible assets of the Group.


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18 ASSOCIATE

The Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Unquoted shares outside Malaysia, at cost 12,408 - -Share of post-acquisition reserves 497 - -Exchange differences 3 - -

12,908 - -

(a) On 15 May 2018, a subsidiary of the Company, PT Indonesia Plantation Synergy (“IPS”) subscribed for 44,000 shares of IDR1,000,000 each in PT Perindustrian Sawit Sinergi (“PT PSS”) equivalent to 20% of the direct equity interest for a total cash consideration of IDR 44,000,000,000 (approximately RM12,408,000). PT PSS became an associate of IPS after the subscription of shares and the Group’s effective equity interest in PT PSS is 17.1%.

Through the shareholders’ agreement, IPS is guaranteed one seat on the board of PT PSS and participates in all significant financial and operating decisions. The Group has therefore determined that it has significant influence over this entity.

The principal activity and country of incorporation of the associate is set out as follows:

Place of business/ country of Nature of PrincipalName of entity incorporation % of ownership relationship activity 31.3.2019 31.3.2018

Held by IPSPT Perindustrian Sawit Sinergi Indonesia 20 - Associate Dormant

(b) Set out below is the summarised financial information for the associate which is accounted for using the equity method:

(i) Summarised statement of financial position as at 31 March 2019:

RM’000

Current

Cash and cash equivalents 61,701Other current assets (excluding cash) 897

Total current assets 62,598

Non-current

Other assets 2,773

Net assets 65,371


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18 ASSOCIATE (CONTINUED)

(b) Set out below is the summarised financial information for the associate which is accounted for using the equity method: (continued)

(ii) Summarised statement of comprehensive income:

For the period from 15 May 2018 (date of share subscription) to 31 March 2019

2019 RM’000

Interest income 2,835

Profit before tax 2,405Income tax 80

Net profit and total comprehensive income for the period 2,485

(iii) Reconciliation of the summarised financial information presented to the carrying amount of interest in associate is set out below:

2019 RM’000

Net assets at date of share subscription 62,000Net profit for the period 2,485Exchange differences 886

Net assets as at 31 March 65,371

Interest in associate 13,074Goodwill 8Exchange differences (174)

Carrying amount of interest in associate 12,908

19 INVENTORIES


Palm and palm oil products:- Crude palm oil 35,213 68,485 39,770 - - -- Oil palm nurseries 8,710 8,849 10,574 1,447 1,492 2,984- Crude palm kernel oil 4,865 7,085 9,703 - - -- Palm kernels 2,058 2,195 4,064 - - -- Palm kernel expellers 287 550 232 - - -

Consumables:- Fertilisers and chemicals 16,777 15,320 22,109 1,341 849 1,150- Stores and spares 11,430 12,234 12,836 1,074 1,160 986

79,340 114,718 99,288 3,862 3,501 5,120


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20 TRADE AND OTHER RECEIVABLES

(a) Amounts due from subsidiaries

Company 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Trade 5,976 7,525 7,432Non trade and non-interest bearing advances 6,392 5,949 1,715

12,368 13,474 9,147

Amounts due from subsidiaries are denominated in Ringgit Malaysia, unsecured, interest free and repayable on demand. Amounts due from subsidiaries are assessed individually for impairment, as the credit risk information of these entities can be obtained and monitored by the Company. The carrying amounts of these balances are assessed to be performing as these entities are able to settle the balances with their liquid assets.

As at 31 March 2019, none of the Company’s amounts due from subsidiaries was impaired (31.3.2018: Nil; 1.4.2017: Nil).

(b) Trade and other receivables


Non-current

Other receivablesAmounts due from

non-controlling interests (Note iv) 52,897 33,809 38,684 - - -

Advances for plasma schemes (Note iii) 75,010 54,166 42,418 - - -

127,907 87,975 81,102 - - -

Current

Trade receivablesThird parties 28,841 33,479 20,441 33 347 9

Other receivablesOther receivables 5,293 5,703 3,415 385 1,166 348Prepayments 11,262 7,961 11,502 1,125 1,356 1,163Deposits 1,609 1,817 3,600 43 24 30

18,164 15,481 18,517 1,553 2,546 1,541

47,005 48,960 38,958 1,586 2,893 1,550

Total trade and other receivables 174,912 136,935 120,060 1,586 2,893 1,550

The currency exposure profile of trade and other receivables (excluding deposits and prepayments) is as follows:

Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

United States Dollar 52,897 33,809 38,684


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20 TRADE AND OTHER RECEIVABLES (CONTINUED)

(b) Trade and other receivables (continued)

(i) Trade receivables

The Group’s trading terms with its customers are mainly on credit periods ranging from 1 to 30 days (31.3.2018: 1 to 30 days; 1.4.2017: 1 to 30 days).

The Group’s and the Company’s trade receivables were due from external parties with continuing business transactions with the Group and have no history of default. Hence, these receivables were assessed as performing at the reporting date. In addition, there were no conditions identified which indicate that the debtors were in significant financial difficulty. Therefore, there was no impairment loss recognised for these receivables. As at 31 March 2019, the Group has a high concentration of credit risk whereby 59% the Group’s trade receivables is with respect to an individual debtor (31.12.2018: 53%; 1.4.2017: 33%).

(ii) Other receivables

The other classes of receivables of the Group and the Company do not contain any credit-impaired assets. These receivables were assessed as performing as there is no indication of a significant increase in credit risks for these receivables and the identified credit loss is immaterial.

(iii) Advances for plasma schemes

Group 2019 2018 RM’000 RM’000

At 1 April 2018/2017 54,166 42,418Exchange differences 964 (6,540)Additions 19,880 18,288

At 31 March 75,010 54,166

The Government of the Republic of Indonesia requires companies involved in plantation development to provide support to develop and cultivate oil palm lands for local communities in oil palm plantations as part of their social obligation which are known as “Plasma” schemes.

In line with this requirement, the Group’s subsidiaries are involved in several cooperative programs for the development and cultivation of oil palm lands for local communities. The Group’s subsidiaries supervise and manage the plasma schemes. Advances made by the Group’s subsidiaries to the plasma schemes in the form of plantation development costs are recoverable either through bank loans obtained by the cooperatives or direct repayments from plasma schemes when these plasma areas come into production. Accordingly, the credit risk arising from these advances is minimal.

Management expects that these advances will not be repaid within the next financial year. As a result, these amounts are classified as non-current assets.

(iv) The amounts due from non-controlling interests are denominated in United States Dollar. The amounts due from non-controlling interests are operational in nature in furtherance of the overseas subsidiaries’ business operations. The amounts due from non-controlling interests are currently interest free and secured over the related shares held by the non-controlling interests. Management reserves the right to charge interest in the future. Management does not intend to demand for repayment of the amounts owing by the non-controlling interests within the period of twelve months, and has therefore classified the balance as non-current receivables.

The Group’s and the Company’s maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. The Group and the Company do not hold any collateral with respect to these receivables.


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21 DERIVATIVE FINANCIAL INSTRUMENTS

Group 31.3.2019 31.3.2018 1.4.2017 Assets Liabilities Assets Liabilities Assets Liabilities RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Current:Crude palm oil (“CPO”)

swap contracts 4,470 - 1,055 - 2,909 -

The Group entered into CPO swap contracts to mitigate the exposure of fluctuations in the price of crude palm oil.

The change in fair value is due to the differences between fixed CPO prices as per the swap contracts and the average future CPO prices quoted on the Bursa Malaysia Derivatives Exchange for the specific contracted periods.

As at the reporting date, the outstanding CPO swap contracts are made up of notional amounts of 21,000 metric tonnes (2018: 3,750 metric tonnes; 2017: 11,250 metric tonnes) with contracted prices ranging from RM2,340 to RM2,505 per metric tonne (2018: RM2,645 to RM2,710 per metric tonne; 2017: RM2,775 to RM2,925 per metric tonne; ) with settlement dates between 1 January 2019 to 31 March 2020 (31.3.2018: 1 January 2018 to 30 September 2018; 1.4.2017: 1 January 2017 to 30 March 2018).

22 PRODUCE GROWING ON BEARER PLANTS


At 1 April 2018/2017, as previously reported - - - -Effects of transition from FRSs to MFRSs (Note 37) 10,615 13,249 2,625 2,682

As presented 10,615 13,249 2,625 2,682Harvest produce transferred to inventories (10,615) (13,249) (2,625) (2,682)Change in fair value less cost to sell 7,675 11,582 1,815 2,625Exchange difference 75 (967) - -

At 31 March 7,750 10,615 1,815 2,625

During the financial year, the Group and the Company harvested approximately 976,395 tonnes (2018 : 932,950 tonnes) and 210,435 tonnes (2018: 209,292 tonnes) of FFB respectively. The quantities of unharvested FFB of the Group and the Company as at the reporting date are approximately 45,275 tonnes (31.3.2018: 43,246 tonnes; 1.4.2017: 39,296 tonnes) and 9,667 tonnes (31.3.2018: 7,994 tonnes; 1.4.2017: 7,378 tonnes) respectively.

The fair value measurement of the Group’s and the Company’s produce growing on bearer plants are categorised within Level 3 of the fair value hierarchy. A change of 10% in the discounted market price of FFB used ranging from RM222 to RM325 per metric tonne (2018: from RM339 to RM377 per metric tonne) for the Group, and RM254 to RM278 per metric tonne (2018: from RM347 to RM374 per metric tonne) for the Company, would cause the fair value of the Group’s and the Company’s produce growing on bearer plants to increase or decrease equally by approximately RM1.2 million (2018: RM1.6 million) and RM0.3 million (2018: RM0.3 million) respectively.


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23 DEPOSITS, CASH AND BANK BALANCES


Cash and bank balances (Note 36) 61,484 54,718 49,645 84 486 561

Deposits with licensed banks (Note 36) 77,938 162,292 343,995 19,422 70,000 53,735

139,422 217,010 393,640 19,506 70,486 54,296

The currency profile of cash and bank balances is as follows:


United States (“US”) Dollar 12,749 47,399 218,546 - - -Indonesian Rupiah 49,895 42,083 22,211 - Ringgit Malaysia 76,001 127,528 152,883 19,506 70,486 54,296Japanese Yen 777 - - - - -

139,422 217,010 393,640 19,506 70,486 54,296

The effective interest rates per annum of deposits with licensed banks as at the end of the financial year for the Group and the Company are as follows:

Group 31.3.2019 31.3.2018 1.4.2017 % % %

Deposits with licensed banks:Ringgit Malaysia 2.55 - 3.15 2.95 - 3.56 2.70 - 2.95Indonesian Rupiah 5.75 5.75 - 6.00 5.75 - 6.25US Dollar - 0.90 - 1.50 0.75 - 1.50Japanese Yen 0.00 - -

Company 31.3.2019 31.3.2018 1.4.2017 % % %

Deposits with licensed banks:Ringgit Malaysia 2.95 - 3.15 3.00 2.80 - 2.95

Deposits with licensed banks of the Group and of the Company have maturity periods ranging as follows:


Days 3 - 365 4 - 365 3 - 365 3 - 31 4 - 31 3 - 7

Except for the restricted deposits with licensed banks, the deposits with the maturities of more than 3 months are not restricted for use and can be withdrawn for use without incurring any penalty.

Bank balances are deposits held at call with banks and earn no interest.


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24 SHARE CAPITAL

Group and Company Number of ordinary shares Amount 2019 2018 2019 2018 ’000 ’000 RM’000 RM’000

Issued and fully paid:1 April 2018/2017 and 31 March 2019/2018 880,580 880,580 922,530 922,530

25 EQUITY CONTRIBUTION RESERVE

The equity contribution reserve represents the equity-settled share options over the ordinary shares of the ultimate holding company, IJM Corporation Berhad that are granted to certain employees of the Group. The reserve is made up of the cumulative value of services received from employees recorded over the vesting periods commencing from the grant date of the share options and is reduced by the recharge from the ultimate holding company upon the exercise of the equity settled-share options by the eligible employees.

26 OTHER RESERVES

Foreign currency Capital Revaluation translation reserve reserve reserve Total RM’000 RM’000 RM’000 RM’000

Group

At 1 April 2017, as previously reported 200 54,157 17,451 71,808Effects of transition from FRSs to MFRSs (Note 37) - (54,157) (1,189) (55,346)

At 1 April 2017 200 - 16,262 16,462Currency translation differences arising from

translation of net investments in subsidiaries - - (132,654) (132,654)

At 31 March 2018 200 - (116,392) (116,192)Currency translation differences arising from

translation of net investments in subsidiaries - - 15,251 15,251Reclassification to retained profits (200) - - (200)

At 31 March 2019 - - (101,141) (101,141)

Foreign currency translation reserve arising as at the reporting date is not subject to tax and therefore has no current and deferred tax impact.


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26 OTHER RESERVES (CONTINUED)

Revaluation reserve Total RM’000 RM’000

Company

At 1 April 2017, as previously reported 4,945 4,945- Effects of transition from FRSs to MFRSs (Note 37) (4,945) (4,945)

As presented - -

At 31 March 2019/31 March 2018 - -

The nature and purpose of each category of reserve are as follows:

(a) Capital reserve

This represents the capitalisation of the subsidiaries’ retained earnings equivalent to the nominal value of the convertible cumulative redeemable preference shares redeemed by the subsidiaries which have been classified to retained earnings during the financial year.

(b) Revaluation reserve

This represents the surplus on revaluation of plant, buildings, leasehold land and bearer plants which has been reclassified to retained earnings upon the transition from FRS to MFRS. Refer to Note 37(B)(ii) for further details.

(c) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the net investments of foreign entities whose functional currencies are different from that of the Group’s presentation currency and the exchange differences arising from monetary items which form part of the Group’s net investment in foreign entities.

27 RETAINED PROFITS

The Company may distribute dividends out of its entire retained profits as at 31 March 2019 under the single-tier tax system.


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28 DEFERRED TAXATION

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets and current tax liabilities and when the deferred taxes relate to the same tax authority.

The following amounts, determined after appropriate offsetting, are shown in the statements of financial position:


Deferred tax assets 13,812 11,608 23,156 - - -Deferred tax liabilities (73,201) (78,373) (90,991) (35,440) (34,807) (33,358)

(59,389) (66,765) (67,835) (35,440) (34,807) (33,358)

Subject to income tax:Deferred tax assets

(before offsetting):- Unutilised tax losses 39,416 34,078 76,203 - - -- Retirement benefits 4,835 - - - - -

44,251 34,078 76,203 - - -Offsetting (30,439) (22,470) (53,047) - - -

Deferred tax assets (after offsetting) 13,812 11,608 23,156 - - -

Deferred tax liabilities (before offsetting):

- Property, plant and equipment (102,567) (100,590) (143,431) (35,440) (34,807) (33,358)

- Derivatives (1,073) (253) (607) - - -

(103,640) (100,843) (144,038) (35,440) (34,807) (33,358)Offsetting 30,439 22,470 53,047 - - -

Deferred tax liabilities (after offsetting) (73,201) (78,373) (90,991) (35,440) (34,807) (33,358)

The Group reviewed previously unrecognised tax losses and determined that it is now probable that taxable profits will be available against which the tax losses can be utilised prior to their expiry due to the increase in crop production from the increased mature areas in the Indonesian subsidiaries.


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28 DEFERRED TAXATION (CONTINUED)


At 1 April 2018/2017, as previously reported (163,574) (161,772) (33,378) (34,186)Effects of transition from FRSs to MFRSs (Note 37) 96,809 93,937 (1,429) 828 ───────────────────

As presented (66,765) (67,835) (34,807) (33,358)Credited/(charged) to statements of

comprehensive income (Note 11):

- Property, plant and equipment (1,427) 34,876 (633) (1,449)- Unutilised tax losses 4,699 (33,352) - -- Derivatives (820) 354 - -- Retirement benefits 4,801 - - -

7,253 1,878 (633) (1,449)Exchange differences 123 (808) - -

At 31 March (59,389) (66,765) (35,440) (34,807)

(a) The following are amounts of deductible temporary differences and unutilised tax losses in certain Malaysian subsidiaries for which no deferred tax asset is recognised in the statements of financial position.


Deductible temporary differences 343 343 343 - - -

Unutilised tax losses 733 733 733 - - -

1,076 1,076 1,076 - - -

Deferred tax assets not recognised at 24% (31.3.2018: 24%; 1.4.2017: 24%) 258 258 258 - - -

Under the Malaysia Finance Act 2018 which was gazetted on 27 December 2018, the Company’s unutilised tax losses amounting to RM733,000 as at 31 March 2019 will be imposed with a time limit of utilisation. Any accumulated unutilised tax losses brought forward from year of assessment 2018 can be carried forward for another 7 consecutive years of assessment (i.e. from years of assessment 2019 to 2025).

(b) The unutilised tax losses and other deductible temporary differences in the Indonesian subsidiaries not recognised as deferred tax assets at the end of the financial year

Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Deductible temporary differences - 17,143 6,847Unutilised tax losses 29,857 20,879 169,611

29,857 38,022 176,458

Deferred tax assets not recognised at 25% (31.3.2018: 25%; 1.4.2017: 25%) 7,464 9,505 44,114


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28 DEFERRED TAXATION (CONTINUED)

(c) The unutilised tax losses in the Indonesian subsidiaries will expire in the following financial years:

Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Financial year:2018 - - 6,1902019 - - 71,7152020 29,558 17,672 90,2802021 - 3,207 1,4262022 299 - -

29,857 20,879 169,611

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that have a recent history of losses and some of the subsidiaries are not expected to generate sufficient taxable profits before the expiry of the unutilised tax losses.

29 RETIREMENT BENEFITS

The subsidiaries in Indonesia operate an unfunded defined benefit scheme for qualified permanent employees who are eligible under the employment policy. The benefits payable on retirement are calculated based on the employees’ length of service and their pensionable salary in the final years leading up to retirement.

The latest actuarial valuations of the plans in Indonesia were carried out on 31 March 2019 by a qualified actuary.

The movements during the financial year in the amounts recognised in the statements of financial position are as follows:

Group 2019 2018 RM’000 RM’000

At beginning of financial year 17,143 6,847

Recognised in statements of comprehensive income 4,293 12,524Capitalised in bearer plants 564 1,888

Total costs of unfunded defined benefits plan (Note 9) 4,857 14,412Exchange differences 337 (2,150)Benefits paid (493) (323)Actuarial gain recognised in other comprehensive income (2,504) (1,643)

At end of financial year 19,340 17,143

The amount of unfunded defined benefits recognised in the statements of financial position are determined as follows:

Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Present value of unfunded defined benefit obligations classified as non-current liabilities 19,340 17,143 6,847


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29 RETIREMENT BENEFITS (CONTINUED)

The amounts recognised in the statements of comprehensive income are as follows:

Group 2019 2018 RM’000 RM’000

Current service cost 3,233 12,142Interest cost 1,060 382

Total costs 4,293 12,524

The charge to statements of comprehensive income was included in cost of sales.

The expenses capitalised in bearer plants during the financial year were analysed as follows:

Group 2019 2018 RM’000 RM’000

Current service cost 425 1,787Interest cost 139 101

Total costs 564 1,888

The principal assumptions used in respect of the Group’s unfunded defined benefit plan were as follows:

Group 31.3.2019 31.3.2018 1.4.2017 % % %

Discount rate 8 8 8Expected rate of salary increases 8 8 8

Through the defined benefit plan, the Group is exposed to a number of risks, and the most significant risk is the change in the bond yield whereby a decrease in the corporate bond yield will increase the plan liabilities.

Based on the same method used to derive the present value of the defined benefit obligation using the projected unit credit method, it is estimated that a 1% change in the principal assumptions would not have a significant impact to the defined benefit obligation of the Group.

The weighted average duration of the defined benefit obligation is 19.0 years for the Group (31.3.2018: 20.0 years; 1.4.2017: 21.0 years).

30 BORROWINGS

Group 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

UnsecuredCurrent 136,584 272,513 200,121Non-current 651,349 460,567 724,196

787,933 733,080 924,317

The currency profile of borrowings is as follows:

US Dollars 519,000 733,080 924,317Japanese Yen 192,933 - -Ringgit Malaysia 76,000 - -

787,933 733,080 924,317


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30 BORROWINGS (CONTINUED)

The net exposure of borrowings to cash flow interest rate risk and the periods in which the borrowings mature are as follows:

Effective Floating interest rate interest rate as at year end Total per carrying < 1 1-2 2-3 3-4 4-5 > 5Group annum amount year years years years years years % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 31 March 2019

Term loan 1 3.86 51,737 19,554 19,554 12,629 - - -Term loan 2 3.86 51,737 19,554 19,554 12,629 - - -Term loan 7 5.44 76,000 16,000 16,000 16,000 16,000 12,000 -Term loan 8(1) 1.10 192,933 - 9,647 38,586 57,880 86,820 -Term loan 9(2) 4.29 171,098 - 10,693 42,775 53,468 64,162 -Term loan 10(2) 4.29 162,952 - 10,015 40,059 50,753 62,125 -Short term advance facility 3.84 81,476 81,476 - - - - -

787,933 136,584 85,463 162,678 178,101 225,107 -

At 31 March 2018

Term loan 1 2.82 67,645 18,554 18,554 18,554 11,983 - -Term loan 2 2.82 67,645 18,554 18,554 18,554 11,983 - -Term loan 3 3.08 154,618 57,982 57,982 38,654 - - -Term loan 4 3.08 154,618 57,982 57,982 38,654 - - -Term loan 5 3.17 95,283 24,739 24,739 24,739 21,066 - -Term loan 6 3.17 115,962 17,393 23,193 23,193 23,193 23,193 5,797Short term advance facility 2.66 77,309 77,309 - - - - -

733,080 272,513 201,004 162,348 68,225 23,193 5,797

At 1 April 2017

Term loan 1 2.00 108,353 30,958 77,395 - - - -Term loan 2 2.00 108,353 30,958 77,395 - - - -Term loan 3 2.50 176,903 - 66,339 66,339 44,225 - -Term loan 4 2.50 176,903 - 66,339 66,339 44,225 - -Term loan 5 2.35 132,677 49,754 66,339 16,584 - - -Term loan 6 2.35 132,677 - 19,903 26,535 26,535 26,535 33,169Short term advance facility 1.86 88,451 88,451 - - - - -

924,317 200,121 373,710 175,797 114,985 26,535 33,169

Notes:(1) Term loan 5 and term loan 6 are refinanced by term loan 8 during the financial year.(2) Term loan 3 and term loan 4 are refinanced by term loan 9 and term loan 10 during the financial year.

The term loans drawn down by certain subsidiaries of the Group are denominated in US Dollars (“USD”), Japanese Yen (“YEN”) and Ringgit Malaysia (“RM”) and are secured by way of corporate guarantees of the Company.


189


The principal features of the borrowings are as follows:

(a) Term loan 1 and term loan 2 of USD35.0 million each were drawn down on 13 October 2011 by PT Primabahagia Permai and PT Sinergi Agro Industri, subsidiaries of the Company in Indonesia, to finance their plantation development costs and general working capital requirements.

In the previous financial year, the repayment terms and final maturity dates of these term loans had been revised as follows:

(i) USD33.6 million is to be repaid in 14 equal quarterly principal instalments of USD2.4 million each with the first principal repayment commencing on 11 April 2018; and

(ii) Final principal repayment of USD1.4 million on 11 October 2021;

These term loans bear interest at a rate of London Interbank Offered Rate (“LIBOR”) plus 1.20% per annum.

These term loans contain covenants which require these subsidiaries to maintain at all times a minimum Debt Service Reserve Account (“DSRA”) equivalent to six months of interest obligations under the term loans.

Term loan 1 and term loan 2 were partially repaid during the financial year.

Subsequent to the reporting date in early April 2019, new term loan facilities amounting to USD15.0 million and USD25.0 million respectively were drawn down by PT Primabahagia Permai and PT Sinergi Agro Industri, subsidiaries of the Company in Indonesia to repay their existing term loan facilities under term loan 1 and term loan 2 and for working capital purpose. The repayment periods for these new term loan facilities are as follows:

(i) USD15.0 million is to be repaid in 12 equal quarterly instalments of USD1.25 million with the first repayment commencing from 24 months after the first drawdown on 1 April 2019 for term loan 1.

(ii) USD25.0 million is to be repaid in 11 equal quarterly instalments of USD2.1 million and 1 final instalment of USD1.9 million with the first repayment commencing from 24 months after the first drawdown on 1 April 2019 for term loan 2.

(b) Term loan 3 and term loan 4 of USD40.0 million each were drawn down on 7 January 2013 by PT Prima Alumga and PT Indonesia Plantation Synergy, subsidiaries of the Company in Indonesia, to finance their plantation development costs and general working capital requirements. The term loans are repayable as follows:

(i) USD30.0 million is to be repaid in 3 equal quarterly principal instalments of USD10.0 million each, with the first principal repayment commencing on 7 July 2018;

(ii) USD30.0 million is to be repaid by 4 equal quarterly principal instalments of USD7.5 million each, with the first principal repayment commencing on 7 July 2019; and

(iii) USD20.0 million is to be repaid by 4 equal quarterly principal instalments of USD5.0 million each with the first principal repayment commencing on 7 April 2020.

The first USD30.0 million bears interest at a rate of LIBOR plus 1.50% per annum. The second USD30.0 million bears interest at a rate of LIBOR plus 1.65% per annum. The final USD20.0 million bears interest at a rate of LIBOR plus 1.80% per annum.

The facilities under term loan 3 and term loan 4 contain covenants which require these subsidiaries to maintain positive net worth throughout the tenor of the term loan facilities. Net worth is defined as the sum of paid-up capital and retained profits. In the event the subsidiaries are not able to maintain the positive net worth, the subsidiaries are required to ensure their adjusted net worth (which include non-trade advances from related companies and shareholders loans) are maintained at a minimum of USD1.0 million. The facilities also require that the Group’s EBITDA to interest expense shall not be less than 2.5 times at all times. EBITDA is defined as profit before tax, interest, depreciation and amortisation. Besides, the facilities also require the Group’s leverage ratio to not exceed 1.0 time at all times. Leverage ratio is defined as total liabilities against tangible net worth.

These term loans were partially repaid during the financial year. The remaining unpaid balances have been refinanced by term loan 9 and term loan 10 for an extended repayment period.


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The principal features of the borrowings are as follows: (continued)

(c) Term loan 5 of USD30.0 million was drawn down on 18 September 2014 by PT Sinergi Agro Industri, a subsidiary of the Company in Indonesia, to finance its mill construction, plantation development costs and general working capital requirements. The term loan is repayable by eight quarterly principal instalments commencing from the third anniversary and will mature at the fifth anniversary from the date of first drawdown.

In the previous financial year, the repayment terms and final dates of these term loans had been revised as follows:

(i) USD24.0 million is to be repaid in 15 equal quarterly principal instalments of USD1.6 million each with the first principal repayment commencing on 17 June 2018; and

(ii) Final principal repayment of USD0.65 million on 17 March 2022;

This term loan bears interest at a rate of LIBOR plus 1.55% per annum.

This term loan was partially repaid during the financial year. The remaining unpaid balances were repaid using the proceeds from the drawdown of borrowings under term loan 8 during the financial year.

(d) Term loan 6 of USD30.0 million was drawn down by PT Sinergi Agro Industri, a subsidiary of the Company in Indonesia, to finance its mill construction, plantation development costs and general working capital requirements. This term loan is repayable in 20 quarterly instalments of USD1.5 million commencing from the 2nd anniversary or at the end of the 27th month from the date of first drawdown on 24 May 2016. This term loan bears interest at a rate of LIBOR plus 1.55% per annum.

This term loan was partially repaid during the financial year. The remaining unpaid balances were repaid using the proceeds from the drawdown of borrowings under term loan 8 during the financial year.

(e) Short term advance facility of USD20.0 million was drawn down by PT Karya Bakti Sejahtera Agrotama, a subsidiary of the Company in Indonesia, to finance general working capital requirements. The short term advance facility bears interest at a rate of LIBOR plus 0.90% per annum for interest periods of 1, 2, 3 or 6 months at the co-borrower’s option.

(f) Term loan 7 of RM80.0 million was drawn down by Excellent Challenger (M) Sdn. Bhd., a subsidiary of the Company in Malaysia, to part-finance the mill construction of PT Primabahagia Permai, a subsidiary of the Company in Indonesia and for general working capital requirements during the financial year. This term loan is repayable in 20 quarterly instalments of RM4.0 million commencing on the first day of the third month from the date of first drawdown on 23 October 2018. This term loan bears interest at a rate of Cost of Funds (“COF”) plus 1.40% per annum.

This term loan requires the Group’s leverage ratio to not exceed 1.0 time as at every financial year end. Leverage ratio is defined as total liabilities against tangible net worth.


191


The principal features of the borrowings are as follows: (continued)

(g) Term loan 8 of YEN5.65 billion was partially drawn down by PT Sinergi Agro Industri, a subsidiary of the Company in Indonesia, to refinance term loan 5 and term loan 6. The amount drawn down during the year amounted to YEN5.25 billion. The undrawn balance of YEN0.4 billion was cancelled as at the financial year end.

This term loan is repayable as follows:

(i) YEN2.10 billion is to be repaid in 8 equal quarterly instalments of YEN262.50 million each with the first principal repayment commencing on 27 March 2021; and

(ii) YEN3.15 billion is to be repaid in the subsequent 4 equal quarterly instalments of YEN787.50 million each;

This term loan bears interest at a rate of COF plus 1.00% per annum.

The facility under term loan 8 contains covenants which require the subsidiary to maintain positive tangible net worth throughout the tenor of the term loan facility. Tangible net worth is defined as the sum of total shareholders’ equity and shareholders’ loans. The facility also requires that the Group’s EBITDA to interest expense shall not be less than 2.5 times at all times. EBITDA is defined as profit before tax, interest, depreciation and amortisation. Besides, the facility also requires the Group’s leverage ratio not to exceed 1.0 time as at the year end. Leverage ratio is defined as total liabilities against tangible net worth.

This term loan also contains covenants which require the subsidiary to maintain at all times a minimum sum in the Interest Service Reserve Account equivalent to three months of interest obligations under the term loan.

(h) Term loan 9 and term loan 10 of USD42.0 million each were partially and fully drawn down during the financial year by PT Prima Alumga and PT Indonesia Plantation Synergy respectively, subsidiaries of the Company in Indonesia, for the purposes as follows:

(i) Refinancing of total remaining unpaid balances of term loan 3 and term loan 4 amounting to USD40.0 million; and

(ii) Refinancing of specific advance facilities totalling USD40.0 million drawn down by PT Prima Alumga and PT Indonesia Plantation Synergy during the financial year for partial repayment of term loan 3 and term loan 4 and for working capital requirements.

Term loan 9 and term loan 10 are both repayable as follows:

(i) USD42.0 million is to be repaid in 8 equal quarterly instalments of USD5.25 million each with the first principal repayment commencing on 29 Jan 2021; and

(ii) USD40.0 million is to be repaid in subsequent 3 equal quarterly principal instalments of USD10.5 million and one final instalment of USD8.5 million.

These term loans bear interest at a rate of LIBOR plus 1.50% per annum.

The facility under term loan 9 and term loan 10 each contain covenants which require these subsidiaries to maintain positive net worth throughout the tenor of the term loan facilities. Net worth is defined as the sum of paid-up capital and retained profits. In the event the subsidiaries are not able to maintain a positive net worth, the subsidiaries are required to ensure their adjusted net worth (which include non-trade advances from related companies and shareholders loans) are maintained at a minimum of USD1.0 million. The facilities also require that the Group’s EBITDA to interest expense shall not be less than 2.5 times at all times. EBITDA is defined as profit before tax, interest, depreciation and amortisation. Besides, the facilities also require the Group’s leverage ratio to not exceed 1.0 times at all times. Leverage ratio is defined as total liabilities against tangible net worth.

As at 31 March 2019, the subsidiaries and the Group have complied with all the covenants of the term loans.


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31 TRADE AND OTHER PAYABLES

(a) Amounts due to subsidiaries

Company 31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Current

Non trade and non-interest bearing advances 20,311 35,274 35,216

The amounts due to subsidiaries are denominated in Ringgit Malaysia, unsecured, interest free and repayable on demand.

(b) Trade and other payables


Non-currentOther payableFinancial guarantee

contracts - - - 16,259 18,816 19,426

CurrentTrade payablesThird parties 42,918 50,688 55,783 3,463 3,631 5,800

Other payablesOther payables 18,590 23,521 24,441 1,993 2,582 1,941Accruals 9,898 12,090 14,314 3,541 5,969 6,898Amount due to ultimate

holding company - - 114 - - 114Amount due to a

fellow subsidiary 87 87 87 87 87 87

28,575 35,698 38,956 5,621 8,638 9,040

71,493 86,386 94,739 9,084 12,269 14,840

Total trade and other payables 71,493 86,386 94,739 25,343 31,085 34,266


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31 TRADE AND OTHER PAYABLES (CONTINUED)

(b) Trade and other payables (continued)

(i) Trade and other payables

Trade and other payables are non-interest bearing and the normal trade credit terms granted to the Group and the Company range from 45 to 60 days (31.3.2018: 45 to 60 days, 1.4.2017: 45 to 60 days).

(ii) Amount due to a fellow subsidiary

The amount due to a fellow subsidiary is denominated in Ringgit Malaysia, interest free, unsecured and repayable on demand.

(iii) Amount due to ultimate holding company

The amount due to ultimate holding company is denominated in Ringgit Malaysia, interest free, unsecured and repayable on demand.

(iv) Financial guarantee contracts

Company 2019 2018 RM’000 RM’000

At 1 April 18,816 19,426Amortisation for the financial year (Note 6(b)) (2,557) (610)

At 31 March 16,259 18,816

The financial guarantee contracts represent the fair value of corporate guarantees extended by the Company to its subsidiaries to secure their term loans.

32 COMMITMENTS


(a) Property, plant and equipment:

Approved and contracted for 81,365 149,724 126 114Approved but not contracted for 80,007 108,294 29,952 32,781

161,372 258,018 30,078 32,895

(b) Land use rights commitments

Commitments for minimum lease payment in relation to non-cancellable land use rights as follows:

Expiring not later than 1 year 1,134 1,134 448 448Expiring later than 1 year but not later than 5 years 4,537 4,537 1,790 1,791Expiring later than 5 years 51,706 52,836 20,218 20,660

57,377 58,507 22,456 22,899

Apart from incurring additional land premiums for land use rights during the financial year, the Group and the Company have also agreed to pay annual commitments for the land use rights until the end of the respective land use rights periods.


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33 SIGNIFICANT RELATED PARTY DISCLOSURES

(a) In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions and balances at the reporting date. The following transactions with related parties were carried out under terms and conditions negotiated amongst the related parties:

Related parties Relationship

IJM Corporation Berhad Ultimate holding companyIJM Properties Sdn. Bhd. A subsidiary of the ultimate holding company


Transactions during the financial year:

Ultimate holding company:- Capital contribution via share based payments 3,228 2,327 2,536 1,844- Recharge upon exercise of share options

by employees (2,147) (3,606) (1,906) (3,018)- Management fee 1,813 1,992 1,813 1,992- Dividend paid 24,743 34,581 24,743 34,581

Subsidiary of the ultimate holding company:- Rental income 102 91 102 91

Non-controlling interests:- *Advances 17,482 - - -

* The advances to the non-controlling interests of RM17,482,000 (2018: Nil) was a result of the overseas subsidiaries in Indonesia issuing new ordinary shares to the non-controlling interests during the current financial year and the amount relating to the shares issuance remained outstanding as at the reporting date. The foreign exchange currency movement is RM1,606,000 (2018: RM4,875,000) as at the reporting date.

Company 2019 2018 RM’000 RM’000

Subsidiaries:- Sale of fresh fruit bunches 78,857 105,238- Management fee income 8,659 8,691- Recovery of management fee charged by ultimate holding company 26 63- Purchase of compost (5) (13)- Rental income 38 38- Repayment from subsidiaries 114,607 60,593- Advances to subsidiaries (141,312) (68,389)

(b) The Group has transactions with companies in which a director of the Company has deemed interest through his family members:


Transactions during the financial year:- Sale of seeds 53 42 53 42- Sale of seedlings - 40 - 40- Purchase of fresh fruit bunches (4,076) (5,943) - -- Sale of compost 7 8 - -- Supply of electricity 21 10 - -


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33 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)

(c) Key management compensation during the financial year

Key management personnel comprise the Directors and certain management personnel of the Group, having authority and responsibility for planning, directing and controlling the activities of the Group entities directly or indirectly.


Wages, salaries and bonuses 4,340 3,722 1,933 2,116Defined contribution plan 465 533 290 317Fees and other emoluments 809 876 809 876Other employee benefits 84 81 81 68Share-based payment 517 1,955 349 1,073

6,215 7,167 3,462 4,450

Included in the total key management compensation is:

Directors’ remuneration including benefits-in-kind (Note 10) 3,462 4,450 3,462 4,450

34 FINANCIAL INSTRUMENTS BY CATEGORIES


Financial Assets

Financial assets at amortised cost:

- Trade and other receivables(excluding prepayments)(Note 20(b)) 163,650 128,974 108,558 461 1,537 387

- Amounts due fromsubsidiaries (Note 20(a)) - - - 12,368 13,474 9,147

- Deposits, cash andbank balances (Note 23) 139,422 217,010 393,640 19,506 70,486 54,296

Financial assets at fair value through profit or loss :

- Derivative financialinstruments (Note 21) 4,470 1,055 2,909 - - -

307,542 347,039 505,107 32,335 85,497 63,830

Financial Liabilities

Financial liabilities at amortised cost:

- Trade and other payables(Note 31(b)) 71,493 86,386 94,739 25,343 31,085 34,266

- Borrowings (Note 30) 787,933 733,080 924,317 - - -- Amounts due to

subsidiaries (Note 31(a)) - - - 20,311 35,274 35,216

859,426 819,466 1,019,056 45,654 66,359 69,482


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35 SEGMENTAL REPORTING

Management has determined the operating segments based on the reports reviewed by the Management Committee (“MC”) of the Group that are used to make strategic decisions for allocating resources and assessing performance. The MC considers the business from a country perspective and assesses the performance of the operating segments based on a measure of Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) and Profit Before Taxation (“PBT”). The Group principally operates in the cultivation of oil palms and milling of fresh fruit bunches which are geographically located in Malaysia and Indonesia.

(a) The segment information provided to the MC for the reportable segments are as follows:

Malaysia Indonesia Group RM’000 RM’000 RM’000

2019

REVENUE:Recognised at a point in time 324,816 306,063 630,879Recognised over time 21 - 21

324,837 306,063 630,900

RESULTS:Profit/(loss) before tax 16,802 (60,109) (43,307)Depreciation of property, plant and equipment 39,308 66,801 106,109Amortisation of land use rights 2,545 2,898 5,443Finance cost 1,351 49,393 50,744

EBITDA 60,006 58,983 118,989

Profit/(loss) before tax includes:- Interest income 2,575 1,786 4,361- Share of profits of an associate - 497 497

2018

REVENUE:Recognised at a point in time 418,304 328,854 747,158Recognised over time 59 - 59

418,363 328,854 747,217

RESULTS:Profit/(loss) before tax 80,900 (30,130) 50,770Depreciation of property, plant and equipment 46,839 69,285 116,124Amortisation of land use rights 2,548 2,912 5,460Finance cost - 46,556 46,556

EBITDA 130,287 88,623 218,910

(b) The segment information provided to the MC for the reportable segments are as follows:

Malaysia Indonesia Group RM’000 RM’000 RM’000

Profit/(loss) before tax includes:- Interest income 3,299 2,423 5,722

The MC makes operational decisions based on EBITDA for which finance costs and depreciation and amortisation are excluded. EBITDA focuses on operational profitability as a single measurement of the regional performance of the Group.

* Foreign exchange differences on borrowings of RM25.92 million (2018: RM23.46 million) were regarded as finance cost, refer to Note 7 to the financial statements.


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35 SEGMENTAL REPORTING (CONTINUED)

(c) The other segment information provided to the MC for the reportable segments are as follows:

31.3.2019 31.3.2018 1.4.2017 RM’000 RM’000 RM’000

Segment assets:

Malaysia 720,333 791,972 810,512Indonesia 1,534,997 1,478,064 1,818,038

2,255,330 2,270,036 2,628,550

Unallocated assets:- Deferred tax assets 13,812 11,608 23,156- Tax recoverable 13,351 15,551 16,226

Total assets 2,282,493 2,297,195 2,667,932

Segment liabilities:

Malaysia 104,096 36,658 41,397Indonesia 774,670 799,951 984,506

878,766 836,609 1,025,903

Unallocated liabilities:- Deferred tax liabilities 73,201 78,373 90,991- Current tax liabilities 8 2 174

Total liabilities 951,975 914,984 1,117,068

Note Malaysia Indonesia Group RM’000 RM’000 RM’000

2019

Other information

Capital expenditure:- property, plant and equipment 14 26,924 111,838 138,762

2018

Other information

Capital expenditure:- property, plant and equipment 14 28,863 102,370 131,233- land use rights 15 178 4,034 4,212

Revenues of approximately RM311,241,000 (2018: RM397,009,000) are derived from 2 major external customers in Malaysia.

Revenues of approximately RM204,226,000 (2018: RM115,612,000) are derived from 2 major external customers in Indonesia.


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35 SEGMENTAL REPORTING (CONTINUED)

Revenue from external customers reported to the MC is measured in a manner consistent with that in the statement of comprehensive income.

Revenue from operating segments is disclosed in Note 4 to the financial statements.

The amounts provided to the MC with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. These assets and liabilities are allocated based on the geographical operations of the segment.

- Segment assets comprise property, plant and equipment, land use rights, inventories, derivatives, receivables, deposits, cash and bank balances.

- Segment liabilities comprise payables, borrowings, derivatives and retirement benefits.

The MC evaluates the performance of the operating segments excluding the foreign exchange gains and losses arising from the intersegment loans denominated in United States Dollar and Indonesian Rupiah. The net unrealised foreign exchange gains and losses arising from the intersegment loans are included in the Group’s other comprehensive income statements.

36 CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the Group’s and the Company’s statements of cash flows comprise the following:


Cash and bank balances (Note 23) 61,484 54,718 49,645 84 486 561

Deposits with licensed banks (Note 23) 77,938 162,292 343,995 19,422 70,000 53,735

139,422 217,010 393,640 19,506 70,486 54,296

Less:Restricted deposits with

licensed banks (Note (a) & (b) & (c)) (11,601) (10,845) (7,646) - - -

127,821 206,165 385,994 19,506 70,486 54,296

(a) The restricted deposit with a licensed bank relates to a deposit by PT Sinergi Agro Industri, a subsidiary of the Company, which was assigned to the bank as security in respect of a corporate guarantee facility to a cooperative in Indonesia as referred to in Note 3(c) to the financial statements.

(b) Term loan 1 and Term loan 2 contain covenants which require the subsidiaries concerned to maintain at all times a minimum Debt Service Reserve Account (“DSRA”) equivalent to six months of interest obligations under the term loans as referred to in Note 30(a) to the financial statements.

(c) Term loan 8 contains covenants which require the subsidiary to maintain at all times a minimum sum in the Interest Service Reserve Account equivalent to three months of interest obligations under the term loan as referred in Note 30(g).


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37 EFFECTS OF TRANSITION TO MFRS

The Group and the Company applied MFRS 1 ‘First-time adoption of MFRS’ in its first set of MFRS financial statements for the financial year ended 31 March 2019. Aside from the short-term exemption on first-time application of MFRS 9 ‘Financial Instruments’ and certain transition elections disclosed in Note 37(B), the Group has consistently applied the same accounting policies in its opening MFRS statement of financial position at the date of transition, 1 April 2017, and throughout all periods presented, as if these policies had always been in effect. These policies comply with each MFRS effective for the financial year ended 31 March 2019, including MFRS 15 ‘Revenue from Contracts with Customers’. The financial statements for financial year 2018 were prepared in accordance with Financial Reporting Standards. Accordingly, the comparative figures for 2018 in these financial statements have been restated to give effect to these changes. Note 37(C) discloses the impact of the transition to MFRS on the Group’s reported financial position, financial performance and cash flows.

(A) MFRS 1 mandatory exceptions

The Group has applied the following mandatory exceptions as required by MFRS 1:

(i) Estimates

MFRS estimates as at transition date are consistent with the estimates as at the same date made in conformity with Financial Reporting Standards (FRS).

(ii) Classification and measurement of financial assets

For financial assets that exist at the beginning of the first MFRS reporting period, at 1 April 2018, an assessment was performed as to whether a financial asset meets the condition to be classified and measured as financial asset measured at amortised cost and financial guarantee contracts in accordance with MFRS 9 on the basis of the facts and circumstances that exist at the beginning of the first MFRS reporting period.

(iii) Impairment of financial assets

Impairment requirements in MFRS 9 are applied retrospectively for debt instruments measured at amortised cost and financial guarantee contracts. The requirements are applied using reasonable and supportable information that are available without undue cost or effort to determine the credit risk at the initial recognition of financial instruments and compare that to the credit risk at the beginning of the first MFRS reporting period, at 1 April 2018, to determine if there has been a significant increase in credit risk.

(B) MFRS 1 exemption options

(i) Exemption for business combinations

The Group has elected to apply MFRS 3 “Business combinations” prospectively from the date FRS 3 “Business combinations” was adopted i.e. 1 April 2011. Business combinations that occurred prior to that date have not been restated. In addition, the Group has also applied MFRS 127 “Consolidated and Separate Financial Statements” from the same date as MFRS 3. This election does not have any impact on the financial results of the Group.

(ii) Property,plantandequipment–previousrevaluationasdeemedcost

Under FRS, valuation adjustments on certain property, plant and equipment were incorporated into the financial statements. The Group has elected to use the previous revaluation as deemed cost under MFRS. Accordingly, the carrying amounts of these property, plant and equipment as at 1 April 2017 have not been restated. The revaluation surplus of the Group and the Company as at 1 April 2017 of RM55,147,000 and RM4,945,000 respectively were reclassified to retained profits.


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37 EFFECTS OF TRANSITION TO MFRS (CONTINUED)

(B) MFRS 1 exemption options (continued)

(iii) Assets and liabilities of subsidiaries and an associate

The assets and liabilities of subsidiaries and an associate which have adopted the MFRS Framework or International Financial Reporting Standards (“IFRS”) earlier than the Group shall remain at the same carrying amounts as in the financial statements of these subsidiaries and associate, after adjusting for consolidation adjustments. The election does not have any impact on the financial results of the Group.

(iv) Revenue

The Group has elected to apply the following practical expedients under MFRS 15:

(a) No restatement of completed contracts that begin and end within the same annual reporting period;

(b) No restatement for completed contracts as at transition date;

(c) The use of transaction price at the date the contract was completed for completed contracts in the comparative period with variable consideration;

(d) No restatement of contract modifications that occurred before transition date;

(e) No disclosure is required on the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Group expects to recognise the amount as revenue for all reporting periods presented before the first MFRS reporting period, at 1 April 2018.

The election does not have any impact on the financial results of the Group.

(v) Foreign currency transactions and advance consideration

In accordance with MFRS 1, the Group elected not to apply IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” to assets, expenses and income in the scope of that Interpretation initially recognised before the transition date.

(vi) Borrowing costs

MFRS 1 permits the application of the requirements of MFRS 123 “Borrowing costs” from the transition date or from a date earlier than the effective date of MFRS 123. The Group elected to apply this exemption from 1 April 2017. Accordingly, the Group:

(a) had not restated the borrowing cost components that were capitalised under FRS and that were included in the carrying amount of assets at that date; and

(b) accounts for borrowing costs incurred on or after that date in accordance with MFRS 123, including those borrowing costs incurred on or after that date on qualifying assets already under construction.

(vii) First time application of MFRS 9 “Financial Instruments”

The Group has elected the exemption in MFRS 1 which allows the Group not to restate comparative information in the year of initial application. The Group continues to apply FRS 139 “Financial Instruments: Recognition and Measurement” and FRS 7 “Financial Instruments: Disclosure” for the comparative information. Any adjustments to align the carrying amounts of financial assets and financial liabilities under FRS 139 with MFRS 9 are recognised in retained profits as at 1 April 2018. The election does not have any impact on the financial results of the Group.


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(C) Transition adjustments arising from MFRS 141 and MFRS 116

MFRS 141 “Agriculture” and amendments to MFRS 116 “Property, Plant and Equipment”

Amendments to MFRS 116 “Property, Plant and Equipment” and MFRS 141 “Agriculture: Bearer Plants” introduce a new category of biological assets i.e. bearer plants. A bearer plant is a living plant that is used in the production and supply of agricultural produce, is expected to bear produce for more than one period, and has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.

Prior to the adoption of the Amendments to MFRS 116 and MFRS 141, all new planting expenditure incurred from land clearing, planting, field upkeep and maintenance to the point of maturity was capitalised under plantation development expenditure and was not amortised. Replanting expenditure which represents cost incurred to replant old planted areas was charged to profit or loss as and when incurred. Agricultural produce forming part of the bearer plants was not recognised and was identified separately.

With the adoption of the Amendments to MFRS 116 and MFRS 141, new planting expenditure and replanting expenditure are accounted for as property, plant and equipment in accordance with MFRS 116 and measured at cost less accumulated depreciation, whereas produce growing on bearer plants within the scope of MFRS 141 are measured at fair value less costs to sell, and with fair value changes recognised in profit or loss as produce grows.

The adoption of the Amendments to MFRS 116 and MFRS 141 have resulted in additional depreciation on property, plant and equipment and replanting expenditure that were charged to profit or loss prior to the adoption of the Amendments to MFRS 116 and MFRS 141 being reversed and capitalised under property, plant and equipment. Changes in fair value less costs to sell of the produce growing on bearer plants are recognised in profit or loss.

The effects of the adoption of MFRS 141 and amendments to MFRS 116 are disclosed in Note 37(E) to the financial statements.

(D) Change in accounting policy upon application of MFRS 9 and MFRS 15

MFRS 9 “Financial Instruments”

The accounting policies were changed to reflect the application of MFRS 9 from the beginning of the first MFRS reporting period, 1 April 2018. MFRS 9 replaces the provisions of FRS 139 that relate to the recognition, classification and measurement of financial assets and financial liabilities; derecognition of financial instruments; impairment of financial assets and hedge accounting. MFRS 9 also significantly amends other standards dealing with financial instruments such as MFRS 7 “Financial Instruments: Disclosures”. The details of changes in respect of items within the scope of MFRS 9 are described as follows:

(i) Classification and measurement of financial assets

Until 31 March 2018, financial assets were classified as financial assets at fair value through profit or loss (“FVTPL”) and loans and receivables. See accounting policy 19 on accounting policies for classification and measurement of financial instruments under FRS 139.

The financial assets held by the Group include:

- derivative instruments which will continue to be measured at FVTPL under MFRS 9, and

- debt instruments, previously classified as loans and receivables and measured at amortised cost that meet the conditions to be classified at amortised cost under MFRS 9.

There is no impact on the Group for financial liabilities as the new requirements only affect the accounting for financial liabilities that are designated at FVTPL and the Group does not have such liabilities. The derecognition rules have been transferred from FRS 139 “Financial Instruments: Recognition and Measurement” and have not been changed.


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(D) Change in accounting policy upon application of MFRS 9 and MFRS 15 (continued)

(ii) Impairment of financial assets

Until 31 March 2018, the Group assessed the impairment of loans and receivables based on the incurred impairment loss model. See accounting policy 19 on impairment of financial assets under FRS 139.

From 1 April 2018, the Group applies the expected credit loss (“ECL”) model to determine impairment on debt instruments that are measured at amortised cost and financial guarantee contracts. The new accounting policies on MFRS 9 are set out in accounting policy 19.

Upon the adoption of MFRS 9, the Group has revised its impairment methodology to include expected credit losses based on an assessment of any significant increase in credit risk for financial assets measured at amortised cost and financial guarantee contracts at the end of each reporting period.

The change in accounting policy upon application of MFRS 9 “Financial Instruments” does not have any impact on the financial results of the Group.

MFRS 15 “Revenue from Contracts with Customers”

MFRS 15 “Revenue from Contracts with Customers” replaces MFRS 118 “Revenue” and related interpretations.

The Group has assessed the effects of applying the new revenue standard on the Group’s financial statements and based on the analysis of the recognition of the various revenue sources, no significant differences with existing accounting principles were identified.

With the adoption of MFRS 15, revenue is recognised by reference to each distinct performance obligation in the contracts with customers. Transaction price is allocated to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. Depending on the substance of the contract, revenue is recognised when the performance obligation is satisfied, which may be at a point in time or over time. The Group has applied this standard retrospectively.

The change in accounting policy upon application of MFRS 15 “Revenue from Contracts with Customers” does not have any impact on the financial results of the Group.


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(E) Financial effects of the transition from FRSs to MFRSs

The effects of the adoption of MFRS 1 exemption options, MFRS 141 and MFRS 116 are presented below:

(i) Statements of Comprehensive Income for the financial year ended 31 March 2018

Effects of As As previously transition presented reported from FRSs under Group under FRSs to MFRSs MFRSs RM’000 RM’000 RM’000

Cost of sales (519,274) (26,533) (545,807)Profit before tax 77,303 (26,533) 50,770Income tax expense (33,249) 6,271 (26,978)Net profit for the financial year 44,054 (20,262) 23,792

Other comprehensive loss:- currency translation differences arising from

translation of net investments in subsidiaries (142,039) 10,871 (131,168)Total comprehensive loss for the financial year (96,342) (9,391) (105,733)

Net profit/(loss) attributable to:- Owners of the Company 46,645 (18,783) 27,862- Non-controlling interests (2,591) (1,479) (4,070)Net profit for the financial year 44,054 (20,262) 23,792

Total comprehensive loss attributable to:- Owners of the Company (94,762) (8,514) (103,276)- Non-controlling interests (1,580) (877) (2,457)Total comprehensive loss for the financial year (96,342) (9,391) (105,733)

Earnings per share attributable to owners of the Company- Basic 5.30 (2.14) 3.16

Company

Cost of sales (78,275) 9,347 (68,928)Profit before tax 48,596 9,347 57,943Income tax expense (9,506) (2,257) (11,763)Net profit for the financial year 39,090 7,090 46,180Total comprehensive income for the financial year 39,090 7,090 46,180


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(E) Financial effects of the transition from FRSs to MFRSs (continued)

The effects of the adoption of MFRS 1 exemption options, MFRS 141 and MFRS 116 are presented below: (continued)

(ii) Statements of Financial Position as at 31 March 2018


NON-CURRENT ASSETSProperty, plant and equipment 881,720 762,867 1,644,587Plantation expenditure 1,107,848 (1,107,848) -Deferred tax assets 4,333 7,275 11,608

CURRENT ASSETProduce growing on bearer plants - 10,615 10,615

NON-CURRENT LIABILITYDeferred tax liabilities 167,907 (89,534) 78,373

EQUITYOther reserves (71,115) (45,077) (116,192)Retained profits 764,772 (188,694) 576,078Non-controlling interests (3,483) (3,786) (7,269)

Company

NON-CURRENT ASSETSProperty, plant and equipment 119,175 102,423 221,598Plantation expenditure 254,605 (254,605) -


NON-CURRENT LIABILITYDeferred tax liabilities 33,378 1,429 34,807

EQUITYOther reserves 4,945 (4,945) -Retained profits 466,167 (146,041) 320,126


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(iii) Statements of Financial Position as at 1 April 2017


NON-CURRENT ASSETS Property, plant and equipment 973,322 866,218 1,839,540Plantation expenditure 1,201,570 (1,201,570) -Deferred tax assets 10,204 12,952 23,156


NON-CURRENT LIABILITYDeferred tax liabilities 171,976 (80,985) 90,991

EQUITYOther reserves 71,808 (55,346) 16,462Retained profits 782,287 (169,216) 613,071Non-controlling interests (5,938) (3,604) (9,542)

Company

NON-CURRENT ASSETSProperty, plant and equipment 125,429 93,019 218,448Plantation expenditure 254,605 (254,605) -


NON-CURRENT LIABILITYDeferred tax liabilities 34,186 (828) 33,358

EQUITYOther reserves 4,945 (4,945) -Retained profits 488,718 (153,131) 335,587


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(iv) Statements of Cash Flows for the financial year ended 31 March 2018


Cash flows from operating activity:Payments to contractors, suppliers and employees (572,599) 16,780 (555,819)

Cash flows from investing activities:Additions to plantation expenditure (23,065) 23,065 -Additions to property, plant and equipment (83,551) (39,845) (123,396)

Company

Cash flows from operating activity:Payments to contractors, suppliers and employees (83,003) 16,780 (66,223)

Cash flows from investing activity:Addition to property, plant and equipment (3,042) (16,780) (19,822)


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I, Purushothaman a/l Kumaran, being the Director primarily responsible for the financial management of IJM Plantations Berhad, do solemnly and sincerely declare that, to the best of my knowledge and belief, the financial statements set out on pages 119 to 207 are 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.

PURUSHOTHAMAN A/L KUMARAN(MIA 5747)

Subscribed and solemnly declared at Petaling Jaya in the state of Selangor Darul Ehsan on 29 May 2019.

Before me:

COMMISSIONER FOR OATHS

STATUTORY DECLARATIONPURSUANT TO SECTION 251(1)(b) OF THE COMPANIES ACT 2016

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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion

In our opinion, the financial statements of IJM Plantations 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 March 2019, 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 of the Group and of the Company as at 31 March 2019, and the 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 a summary of significant accounting policies, as set out on pages 119 to 207.

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’ Code of Ethics for Professional Accountants (“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.

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.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF IJM PLANTATIONS BERHAD (Company No. 133399-A)

PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), Chartered Accountants, Level 10, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, P.O. Box 10192, 50706 Kuala Lumpur, MalaysiaT: +60(3) 2173 1188, F: +60(3) 2173 1288, www.pwc.com/my

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Key audit matters (continued)

Key audit matters How our audit addressed the key audit matters

Accounting for pre-cropping costs (plantation development expenditure)

Refer to Note 2 “Critical Estimates and Judgements” and Note 37 “Effects of transition to MFRS” to the financial statements.

The adoption of the MFRS framework has resulted in a change in the Group’s and the Company’s accounting for pre-cropping costs incurred (“bearer plants”), from the capital maintenance method adopted previously to the amortisation method in accordance with the underlying principles set out in Agriculture: Bearer Plants (Amendments to MFRS 116 “Property, plant and equipment” and MFRS 141 “Agriculture”).

The transition to MFRS has been applied retrospectively and comparative figures have been restated.

The Group has applied some judgement in identifying the pre-cropping costs incurred for the plantation activities which were eligible for capitalisation, and allocating these costs between mature and immature bearer plants, by reference to the relative size of the immature plantations over the total planted area of the respective oil palm estates of the Group and the Company. The mature bearer plants are amortised over the economic useful life of the plants, which is estimated to be 22 years.

We focused on this area because the restatement amounts are material and there are judgement and estimates involved in allocating the pre-cropping costs incurred to the planting activities carried out in each financial year.

Upon the adoption of the MFRS framework, we performed the following procedures in relation to the change in the Group’s and the Company’s accounting for pre-cropping costs:

• Obtainedmanagement’sassessmentof theeffectsof transition to MFRS;

• Compared the requirements under the existingaccounting policy and the revised accounting policy as a result of the transition to MFRS;

• Discussed with management on the judgementapplied and performed the following procedures on the key assumptions applied by management in arriving at the restated amounts:

- Checked the reliability of data collated by agreeing to the underlying accounting records;

- Tested the appropriateness of the cost components capitalised as bearer plants, on sampling basis, to supporting documentation such as supplier’s invoices;

- Evaluated the reasonableness of the basis of allocating the costs incurred between mature and immature bearer plants;

- Tested the allocation of costs incurred between mature and immature bearer plants;

- Compared the reasonableness of the economic useful life of the bearer plants to industry practice; and

• Checked that the disclosures in the financialstatements are made in accordance with the requirements set out in MFRS 108 “Accounting Policies, Changes in Accounting Estimates and Errors”.

Based on the procedures performed, we did not identify any material exceptions.


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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, which we obtained prior to the date of this auditors’ report, and the Chairman’s Statement and other sections of the 2019 Annual Report, which are 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.

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 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.


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Auditors’ responsibilities for the audit of the financial statements (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, related safeguards.

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 17 to the financial statements.

OTHER MATTERS

1. As stated in Note 37 to the financial statements, the Group and the Company adopted Malaysian Financial Reporting Standards on 1 April 2018 with a transition date of 1 April 2017. These standards were applied retrospectively by the Directors to the comparative information in these financial statements, including the statements of financial position of the Group and of the Company as at 31 March 2018 and 1 April 2017, and the 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 ended 31 March 2018 and the related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the financial year ended 31 March 2019, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 April 2018 do not contain misstatements that materially affect the financial position as at 31 March 2019, and financial performance and cash flows for the financial year then ended.

2. 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 HEW CHOOI YOKELLP0014401-LCA & AF 1146 03203/07/2019 JChartered Accountants Chartered Accountant

Kuala Lumpur29 May 2019

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