UPAR2018

ANNUAL REPORT
2018
Group Philosophy
Sustainable Palm Oil for the World
We strive towards being recognized as second to none within the plantation

industry, producing high quality products, always focusing on the sustainability
of our practices and our employees’ welfare whilst attaining acceptable returns
for our shareholders.
With United Plantations choosing to use Cocoon Silk and Cocoon Offset
rather than a non-recycled paper, the environmental impact, for the total number of
Annual reports produced,was reduced by :
7,846 kg of landfill
1,104 kg CO2 and green house gases

Front Cover: 11,040 kmTravel in Average European Car
12,750 kg of wood
Aerial picture of the Optimill 15,862 Kwh of energy
and Unifuji project. 270,000 liters of water
Water and energy savings are based on a comparison between a recycled paper manufactured at Arjowiggin Graphic
mills versus an equivalent virgin fibre paper according to the latest European BREF data available (virgin fibre papers
manufactured in a non-integrated paper mill).CO2 emission savings is the difference between the emissions produced
at an Arjowiggins Graphic mill for a specific recycled paper compared to the manufacture of an equivalent virgin fibre paper.
Carbon footprint data evaluated by Labelia Conseil in accordance with the Bilan Carbone® methodology. Results are obtained
according to technical information and subject to modification.
This Annual Report is printed on Cocoon Silk 100% recycled paper Sources :
The Financial Statements are printed on Cocoon Offset 100% recycled paper.
Contents
Brief History and Principal Business Activity 2
UP’s Palm Oil Business Activities 3
Corporate Information 4
Executive Committee/Senior Management and
Senior Executive 5
Group Structure 6
Financial Highlights 7
Profile of Directors 8 - 11
Chairman’s Statement 12 - 13
Management Discussion and Analysis 14 - 28
Sustainability Report 2018 29 - 141
Corporate Governance Overview Statement 142 - 147
Statement on Directors’ Responsibility 148
Statement on Risk Management and Internal Control 149 - 151
Audit Committee Report 151 - 154
Nomination Committee Report 155 - 156
Additional Disclosures 157
Financial Statements 159 - 235
Shareholders Information 236 - 237
Comparative Statistics 238
All Properties of the Group 239
Group’s Plantation Properties 240
Notice of Annual General Meeting 241 - 246
1
Brief history and principal business activity
Founded on Danish and Malaysian Expertise and Resources, United Plantations

Berhad (UP) from a modest beginning in 1906, has over the years grown in size
and stature.
Today UP is one of the larger medium sized plantation groups in Malaysia and
is listed on the Main Market of Bursa Malaysia Securities Berhad with a market
capitalization of approximately RM 5.31 billion at the end of its financial year
31 December 2018.
UP’s core business activities are focused on responsible cultivation of oil palm
and coconuts. Its total cultivated landbank covers approximately 50,000ha
spread over Malaysia (80%) and Indonesia (20%) and is supported by 6,508
employees across the Group.
UP possesses considerable know-how in plant breeding, agronomy and tissue

culture through its R & D facilities established in the early 1950’s, ensuring the
development of new and improved planting materials as well as improved crop
husbandry practices.
Its subsidiary companies are engaged in several downstream activities such as

edible oil refining as well as producing and packaging of specialty fats based
on certified sustainable palm oil and a strong emphasis on high quality and food
safety standards.
Through its focus on Corporate Social Responsibility and Creating Shared

Values combined with sound managerial and technical expertise, UP is today
recognised as one of the highest yielding, cost competitive and innovative
plantations companies in the world.
C
CSV
R
Corporate Social Responsibility and Creating Shared Values
2
UP’s Palm Oil Business Activities
UP’s main activities are depicted in the diagram below providing an overview of our vertically integrated set up.
Fronds, Trunks
Pre & Main Nursery

Recycled
Research Department Oil Palm Plantation Replanting of 25 year old oil palms
(UPRD)
FFB
FF
FB
Seed Production Tissue Culture
Plantation Division
External Production Transport Own Production
External Plantations UP Group

&
Smallholders
Light Railway Lorries
Lorries (Malaysia) (Malaysia & Indonesia)
(Indonesia)
Palm Oil Mill Effluent (POME) Shells, Fibre & EFB
Biogas Plant Recycled Recycled Bio-Mass Boiler

Methane Capture
&
Biogas Production Electricity Steam & Electricity
Palm Oil Mills (CPO)
(4 in Malaysia) (Internal*)
(1 in Indonesia)
TNB National Electricity Grid (4 in Malaysia)
(1 in Indonesia)
Palm Kernels Palm Kernel Crushing Plant

Crude Palm Oil
(External**)
UniFuji Refinery (JV)
(Internal*)
Manufacturing Division
Crude Palm Palm Kernel

Kernel Oil Cake
Unitata Refinery
Snacks & Chocolates (Internal*)
Manufacturing Industries
(External**)
Specialty fats Animal Feed

Specialty Fats Industry
&
(External**)
Vegetable oil fractions
Oleochemical Industry
(External**)
Internal* : Within the UP Group.

External** : Stakeholders, outside the UP Group.
3
Corporate Information
Country of Incorporation Malaysia
Board of Directors Ybhg. Tan Sri Datuk Dr. Johari bin Mat (Chairman, Independent, Non-Executive)
Ybhg. Dato’ Carl Bek-Nielsen (Chief Executive Director)
Mr. Ho Dua Tiam (Non-Independent, Non-Executive)
Mr. Ahmad Riza Basir (Independent, Non-Executive)
Y.Hormat Dato’ Jeremy Derek Campbell Diamond (Independent, Non-Executive)
Mr. Martin Bek-Nielsen (Executive)
Mr. Loh Hang Pai (Executive)
Mr. R. Nadarajan (Independent, Non-Executive)
Madam Rohaya binti Mohammad Yusof (Non-Independent, Non-Executive)
Mr. Jorgen Balle (Non-Independent, Non-Executive)
Company Secretary Mr. Ng Eng Ho
Registered Office and United Plantations Berhad

Principal Share Jendarata Estate, 36009 Teluk Intan, Perak Darul Ridzuan, Malaysia
Register Phone : +605-6411411
Fax : +605-6411876
E-mail : [email protected]
Website : www.unitedplantations.com
Auditors Ernst & Young
Principal Bankers Malaysia

HSBC Bank Malaysia Berhad
Maybank Berhad
Standard Chartered Bank Malaysia Berhad
Public Bank Berhad
OCBC Bank (Malaysia) Berhad
United Overseas Bank (Malaysia) Berhad
Indonesia
PT Bank Mandiri (Persero) Tbk
Bank DBS
PT Bank CIMB Niaga Tbk
Stock Exchange Listing Malaysia

Bursa Malaysia Securities Berhad (Bursa Malaysia)
Website : www.bursamalaysia.com
4
Executive Committee/Senior Management and Senior Executives
(GRI 102-10)
Executive Committee (EXCOM)
Dato' Carl Bek-Nielsen

Vice Chairman, Chief Executive Director (CED)
Director In-Charge, Unitata Berhad
Martin Bek-Nielsen Loh Hang Pai

Executive Director (Finance & Marketing) Executive Director (Estates)
Commercial Director, Unitata Berhad
Senior Executives
Finance & Corporate
Ng Eng Ho Cheriachangel Mathews S. Chandra Mohan Dewi Anita Suyatman
Company Secretary / Group Manager Human Resources & Financial Controller Sr Manager, Legal & Corp Affairs
Sr Group Manager (Finance) Environment, Safety & Health PT SSS
Erwin Khor Siew Yan Choo Kah Leong Norhazizi bin Nayan Shirley Selvasingam
Manager, Internal Audit Sr Financial Controller, PT SSS Sr Manager, Human Resources & Manager, IT Systems
Environment, Safety & Health
D. Jeevan Dharmapalan Lee Kian Wei

Manager Human Resources & Manager Human Resources &
Environment, Safety & Health Environment, Safety & Health
Plantations
Edward Rajkumar Daniels Geoffrey Cooper Muhammad Ratha C. Mohan Das
Estates Director, Estates Director, President Director, Group Manager,
Upriver Downriver PT SSS Jendarata Estate
Nek Wahid bin Nek Harun Azhar bin Yazid S. Chanthravarnam Jason Joseph
Group Manager, Sr Manager, Sr Manager, Sr Manager,
Ulu Basir Estate Lima Blas Estate UIE PT SSS
Ridzuan Bin Md. Isa Patrick Kanan R. Siva Subramaniam S. Kumaresan

Manager, Manager, Manager, Manager,
Ulu Bernam Estate Changkat Mentri Estate Sungei Erong Estate/ Sungei Bernam Estate
Sungei Chawang Estate
L. Makesyarang Khor Boon Wah

Manager, Manager,
Kuala Bernam Estate Seri Pelangi Estate
Research
Ho Shui Hing J. Vijiandran Kandha Sritharan
Director of Research Sr Research Manager Research Manager
Lim Chin Ching Appala Naidu Marie Wong Foo Hin

Research Manager(Biotechnology) Research Manager, PT SSS Research Manager
(Tissue Culture)
Engineering
P. Seker Ir P. Rajasegaran K.T. Somasegaran
Deputy Group Engineer,
Director of Engineering, Director of Engineering,
UIE
Upstream Downstream
Ir V. Renganathan G. Padmanathan N. Saravanaganes Goh Kheng Wee

General Manager Engineering, Resident Engineer, Resident Engineer, Resident Engineer,
PT SSS Ulu Basir Ulu Bernam Jendarata Estate
Palm Oil Refining and Others

Jughdev Singh Dhillon Dr. Andrew Nair Dev Ganesh Allan Loh Teik Boon
Group Production Manager, Group Research & Quality Controller, Manager, OPP Manager, Commerce
Unitata Berhad Unitata Berhad Unitata Berhad Unitata Berhad
Senthamarai Selvi Suganthi Krishnan Soo Yook Kee Muhammad Silmi

Manager (Shipping & Logistics) Manager, Quality Assurance Sr Manager / Engineer In-Charge,
Manager, Biodiversity,
Unitata Berhad Unitata Berhad Butterworth Bulking Installation Sdn. Bhd.
Bernam Agencies Sdn. Bhd.
PT SSS
Jayarama Reddy Kapil Punj

Manager, Refinery Manager,
Bernam Bakery UniFuji Sdn. Bhd.
5
Group as at 31 January 2019
Plantations United Plantations Berhad (Malaysia)
Issued Capital (no. shares) 208m
PT Surya Sawit Sejati (Indonesia)
95%
Unitata Berhad (Malaysia)
100%
Palm Oil Refining
UniFuji Sdn. Bhd. (Malaysia)
50% UNIFUJI
100 YEARS OF PALMOIL
INNOVATION AND SUSTAINABILITY
Bernam Agencies Sdn. Bhd.

(Malaysia)
100%
Butterworth Bulking Installation

Sdn. Bhd. (Malaysia)
100%
Bernam Advisory Services Sdn. Bhd.

(Malaysia)
100%
Berta Services Sdn. Bhd.

(Malaysia)
100%
General Shareholding Structure

Group as at 31 January 2019
Other
The UIEL Group and
Major Shareholders Others
The Bek-Nielsen Family
holding 5% and above
25.10% 49.25% 25.65%
United Plantations Berhad
Issued Capital (no. shares) 208m
6
Financial Highlights
2018 2017 Change (%) 2016 2015 2014
Revenue (RM’ Million) 1,306 1,474 (11.40) 1,228 1,004 1,022

Profit Before Tax ( RM’ Million) 491 504 (2.58) 418 376 356
Profit After Tax (RM’ Million) 374 395 (5.32) 331 292 279
Earnings Per Share (Sen) 179 189 (5.29) 159 141 134
Net Dividend Per Share (Sen)* 140 150 (6.67) 115 100 165**
Dividend Payout Ratio 0.78 0.79 (1.27) 0.72 0.71 1.23**
Dividend yield as at 31 December (%) 5.49 5.34 2.81 4.27 3.94 6.76
Total Equity (RM’ Million) 2,589 2,531 2.29 2,368 2,239 2,127
Return on Equity (%) 14.45 15.61 (7.43) 13.98 13.04 13.12
Total Borrowings (RM’ Million) 0.1 0.1 - 0.1 0 0.80
Non-Controlling Interests (RM’ Million) 7.8 6.9 13.04 5.3 3.2 2.40
Cash Position (RM’ Million) 916 852 7.51 691 753 738
Total Assets (RM’ Million) 2,918 2,850 2.39 2,644 2477 2,334
Total Liabilities (RM’ Million) 329 319 3.13 276 238 207
Year-End Closing Share Price (RM) 25.50 28.08 (9.19) 26.92 25.36 24.40
* Including proposed Final Dividend
** Including Special Extraordinary Dividend paid out in 2014
Profit After Tax and Year-End Share Price Total Equity, Total Assets and Total Liabilities Earnings Per Share and Net Dividend Per Share
RM Share Price RM Sen
Million RM Million
400 30.00 3,000 200
350
25.00 2,500 160
300
20.00 2,000
250 120
200 15.00 1,500 ?
80
150
10.00 1,000
100
40
5.00 500
50
0 0.00 0 0
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Profit After Tax (RM Mil) Share Price (RM) Total Equity Total Assets Total Liabilities Earnings Per Share Net Dividend Per Share
CPO PK COCONUT CPO

PRODUCTION PRODUCTION PRODUCTION YIELD
219,729 45,860 71.4 5.71

METRIC TONNES METRIC TONNES MILLION NUTS METRIC TONNES/HECTARE
7% 5% 5% 7%
7
Profile Of Directors
and Agriculture University of Denmark. In 1998 he

returned to Malaysia to take up the position of Corporate
Affairs Officer with the Company. He was promoted to
the position of Executive Director (Corporate Affairs) on
1 March 2000. On 9 November 2004 he was appointed
Director In-Charge of Unitata Berhad.
He is the Chairman of United International Enterprises
Limited (UIEL), a public listed company on the NASDAQ
Tan Sri Datuk OMX Copenhagen A/S. He is also a Board Member of
Dr. Johari bin Mat Melker Schorling AB, a public listed company on the
Chairman, Independent
Non-Executive Director NASDAQ OMX Stockholm AB.
Chairman of the Remuneration & Since 2005, he has been a Council Member of the
Nomination Committees Malaysian Palm Oil Association (MPOA) and the
Malaysian Palm Oil Council (MPOC). He currently serves
Appointed Director of United Plantations Berhad on 9 as a member of the Programme Advisory Committee to
October 2001 and elected as Chairman of the Board on the Malaysian Palm Oil Board (MPOB).
21 June 2003. On 17 November 2014, he was appointed on to the
Tan Sri Datuk Dr. Johari bin Mat, born in 1944, RSPO Board of Governors as Co-Chairman representing
a Malaysian, obtained his B.A. (Hons.) from the the MPOA.
University of Malaya and PhD from the University of He is the brother of Mr. Martin Bek-Nielsen, and a
Southern California, USA and completed the Advanced Board representative of the Company‘s two major
Management Program from Harvard University, USA in shareholders, UIEL and Maximum Vista Sdn. Bhd. He is
1997. He was also a chartered member of the Malaysian deemed interested in various related party transactions
Institute of Planners. between UP Group and certain companies carried out in
He has 33 years of work experience in the Malaysian the ordinary course of business as disclosed in Note 26
Administrative and Diplomatic Services which included to the Financial Statements.
positions as Director of INTAN and the Klang Valley
Planning Secretariat in the Prime Minister’s Department
and as Secretary General in the Ministries of Social
Development, Domestic Trade and Education.
He held various positions in several national and
international organizations, such as UNESCO, UNCRD,
SEAMEO, and COL (Commonwealth of Learning)
based in Vancouver, Canada. Currently he is on the
Board of a number of private companies.
Ho Dua Tiam
Non-Independent
Non-Executive Director
Appointed director of the Company on 1 January 1995 ,

Mr. Ho Dua Tiam, born in 1943, a Malaysian.
After completing his study at the Serdang Agricultural
College, he started his career with United Plantations
Dato’ Carl Bek-Nielsen Berhad in 1964 as a Cadet Planter. He served the
Vice Chairman
Chief Executive Director (CED)
Company in various positions before his appointment
Non-Independent Director-in as Deputy Senior Executive Director on 28 January 2002
Charge of Unitata Berhad and thereafter as Senior Executive Director on 21 June
2003. He retired from his position as Senior Executive
Director (CEO) on 31 December 2012 and continued to
Appointed director of the Company on 1 January serve the Company as Inspector General, Estates and
2000 and elected Vice Chairman on 8 March 2002 and Special Advisor of UP Berhad from 1 January 2013 until
appointed Chief Executive Director (CED) of United his retirement on 31 December 2018.
Plantations Berhad on 1 January 2013. He is also a director of United International Enterprises
Dato’ Carl Bek-Nielsen, born in Petaling Jaya in 1973, (M) Sdn. Bhd. and Maximum Vista Sdn. Bhd. He is not
is a Danish citizen with a Permanent Resident status on the Board of any other public listed company.
in Malaysia. He started his career with the Company in He is a Council member and Deputy President of the
1993 as a Cadet Planter leaving a year later to pursue his Malaysian Agricultural Producers Association (MAPA)
tertiary education in Denmark graduating with a B.Sc. and Chairman of its Finance Executive Committee.
degree in Agricultural Science from the Royal Veterinary
8
Ahmad Riza Basir Martin Bek-Nielsen

Independent Executive Director
Non-Executive Director Non-Independent
Member of the Audit Committee Commercial Director, Unitata Berhad.
Appointed director of the Company on 17 June 2000, Mr. Appointed to the Board on 29 August 2000, Mr. Martin
Ahmad Riza Basir, born in 1960, a Malaysian, is a lawyer Bek-Nielsen, born in 1975, is a Danish citizen with a
by training. Permanent Resident Status in Malaysia. He started his
He graduated with a Bachelor of Arts in Law (Hons.) career with the Company as a Cadet Planter in 1995.
from the University of Hertfordshire, United Kingdom Left Malaysia in 1996 to pursue his tertiary education
and Barrister-At-Law (Lincoln’s Inn), London in 1984 in Denmark and graduated with a B.Sc. degree in
and was called to the Malaysian Bar in 1986. Agricultural Economics from the Royal Danish
He is a director of Perlis Plantations Berhad, a public Agricultural University of Copenhagen in 1999.
listed company on Bursa Malaysia Securities Berhad. After his graduation in 1999 he returned to Malaysia to
He is also a member of the Board of Directors of several take up the position of Corporate Affairs Officer. In 2001,
other private limited companies in Malaysia. he was appointed to the position of Executive Director
and on 20 February 2003 was promoted to his current
position of Executive Director (Finance and Marketing).
On 9 November 2004 he was appointed Commercial
Director of Unitata Berhad.
He is the Deputy Chairman of United International
Enterprises Limited (UIEL), a public listed company on
the NASDAQ OMX Copenhagen A/S.
He is the brother of Dato’ Carl Bek-Nielsen, and is
Dato’ Jeremy Derek a Board representative of the Company’s two major
Campbell Diamond shareholders, UIEL and Maximum Vista Sdn. Bhd. He is
Independent deemed interested in various related party transactions
Non-Executive Director between UP Group and certain companies carried out in
Chairman of the Audit Committee the ordinary course of business as disclosed in Note 26
and a member of the Nomination
and Remuneration Committees.
to the Financial Statements.
Appointed director of the Company on 31 July 2001, Dato’

Jeremy Derek Campbell Diamond, born in 1940, a British
citizen with Permanent Resident status in Malaysia,
graduated from Durham University with a B.Sc.(Hons.)
in Agricultural Economics and Management in 1963.
Commenced his career in Malaysia in 1963 as a Planter
with Socfin Company Bhd, and served in that company
in various capacities until his appointment as General
Manager/Chief Executive Officer (CEO) in 1977. He held
that position for 24 years until his retirement in 2001.
Currently, he is on the Board of a number of private
Loh Hang Pai
companies which include Jedecadi Sdn. Bhd. Executive Director
He served as a Council member of the Malaysian Non- Independent
Agricultural Producers Association (MAPA), United
Planting Association of Malaysia (UPAM), Malaysian Appointed to the Board as Executive Director (Estates)
Oil Palm Growers Council (MOPGC), Malaysian Rubber on 1 January 2013, Mr. Loh Hang Pai, born in 1948, a
Producers Council (MRPC), as an Alternate Member of Malaysian, graduated from the Serdang Agricultural
the Board of the Palm Oil Research Institute of Malaysia College. He served Kumpulan Guthrie as Junior Assistant
(PORIM). He was a member of the General Committee in 1969 and subsequently joined United Plantations
of the Malaysian International Chamber of Commerce Berhad on 1 January 1973 as an Assistant Manager.
and Industry (MICCI) for 15 years. He served the Company in various positions and was
9
promoted to the position of Estates Director on 1 January degree in Commerce (Accountancy), Australian National
2004. University, Canberra, Australia and is an Associate
He is not on the Board of any other public listed companies. Member of The Certified Practising Accountants,
He was actively involved in various activities of the Australia.
planting associations, having held the position of Started her career with Arthur Andersen & Co as a Senior
Chairman, Perak Planters Association, President of Financial Consultant –Audit Division (1988-1990).
United Planting Association of Malaysia and Chairman of In 1990, she joined Maybank Investment Bank
Malaysian Cocoa Growers Council. (previously named Aseambankers ) and was promoted
Currently, he is the Convener of MAPA’s Oil Palm to the position of Executive Vice President, Corporate
and Coconut Committee and Chairman of MAPA’s Investment Banking in 2005 and acquired 18 years of
Negotiating Committee and had been actively involved banking experience. In 2008, she joined the Employees
in the negotiations on several MAPA/NUPW wage Provident Fund (EPF) Investment Division as Head of
agreements. Corporate Finance and in 2010, was appointed as Head
of Capital Market Department overseeing investment
loan and bonds. Her portfolio also includes monitoring
external fund managers for domestic and global fixed
income.
Since April 2017, she serves as Head of Private Market,
Investment Division, Employees Provident Fund,
whose primary function is to invest in private equity,
infrastructure, global and regional real estates.
She is also a member of the Board of Directors of UMW
Holdings Berhad, Malaysian Resources Corporation
R. Nadarajan Berhad, Plus Malaysia Berhad and Projek Lebuhraya
Independent Usahasama Berhad.
Member of the Audit,
Remuneration and Nomination
Committees
Appointed director of the Company on 1 June 2013,

Mr. R. Nadarajan, born in 1948, a Malaysian, joined
the company in 1977 as a Management Accountant,
after having qualified and worked in the UK in various
capacities in management accounting and finance. He
was promoted to the position of Financial Controller in
1980 and to the position of Company Secretary/ Group
Manager Finance in 2000. He fully retired in 2012 as
Group Financial Adviser, a position he held since 2008 Jorgen Balle
on retirement as Company Secretary/ Senior Group Non-Independent
Manager, Finance.
He is an associate member of the Chartered Institute of
Appointed director of the Company on 21 May 2018, Mr.
Management Accountants, United Kingdom(UK) and a
Jorgen Balle, born in 1964, a Danish citizen, graduated
member of the Malaysian Institute of Accountants.
in 2001 with a Masters in Business Administration from
He is not on the Board of any other public listed
SIMI/CBS Copenhagen.
companies.
Started his career with Aarhus Karlshamn AB as a
Director (2000-2003) and was subsequently appointed
to Managing Director of Aarhus Karlshamn A/S (2003 to
2010). He also held the position of VP Global CCF/LFC
in the Business Unit of Aarhus Karlshamn AB for a
duration of 5 years from 2005 to 2010.
In 2010, he was appointed Executive Director of Frode
Laursen Group and to date holds the position of Advisor
of the Frode Laursen Group
He is also a member of the Board of Directors of other
private limited companies in Denmark.
Rohaya binti MohammadYusof

Non-Independent
Appointed director of the Company on 30 November

2017, Madam Rohaya binti Mohamad Yusof, born in
1965, a Malaysian, graduated in 1988 with a Bachelor
10
Note:
1. Family Relationship with Director and/or Major Shareholder

Save for Dato’ Carl Bek- Nielsen and Mr. Martin Bek- Nielsen, none of the other Directors have any
family relationship with any Director and/or major shareholder of the Company.
2. Conflict of Interest
Save for Dato’ Carl Bek-Nielsen and Mr. Martin Bek-Nielsen, none of the other Directors have any
conflict of interest with the Company.
3. Conviction for Offences

None of the Directors of the Company have any conviction for offences within the past 10 years.
4. Attendance of Board Meetings

Details of the Directors’ attendance at Board Meetings are set out in the Corporate Governance
Overview Statement on pages 142 to 147.
5. Gender
UP’s Board consist of one female director and nine male directors.
6. Profile of Senior Management

The Senior Management only comprise of the Executive Directors.
The UP Board of Directors attending a Board Meeting in November 2018.
11
Chairman’s Statement
On behalf of the Board of Directors of United Plantations Berhad, it gives me much
pleasure to present to you the Annual Report of our Company and Group for the financial
year ended 31 December 2018. Similar to last year, the early release on the 25 February
2019 is an improvement in keeping up with the global trend of finalizing the annual
accounts earlier which ultimately is to the benefit of all stakeholders.
Financial Performance
For the Financial year 2018 our group posted an after Our cash and cash equivalents will thereby also reduce
tax profit of RM374 million. compared with the 31st December 2018 position, when
the deal is completed and payment has been made.
Whilst this is a reduction of 5% compared with the
RM395 achieved in 2017, it is viewed as a very pleasing Our Chief Executive Director, Ybhg. Dato’ Carl Bek-
result based on the depressed market prices for palm Nielsen will in detail explain UP’s financial performance
oil experienced during the second half of 2018. in the Management Discussion and Analysis section
on pages 14 to 28 .
Palm Oil production on our estates continued its
recovery in Malaysia as well as Indonesia during 2018 Dividends
following the El-Nino in 2016 which impacted South
East Asia. This increase contributed positively to our Based on the above gratifying results, your Board is
Groups results and was somewhat of a buffer to the recommending a final dividend of 110sen per share
decline in palm oil prices. consisting of;
Whilst labour shortages continue to hamper operations 1. A Final Single Tier Dividend of 20sen per share
resulting in associated crop losses, the situation was
not as significant compared with 2017. Nevertheless, 2. A Special Single Tier Dividend of 90sen per share
the drive towards mechanization that has taken place
over the last many years and which is still ongoing, When taking into consideration the interim dividend of
minimized the negative impact of this ongoing problem. 30sen per share paid during December 2018, the total
dividend paid in respect of FY2018 is 140sen per share
The Group continues to maintain a healthy policy in compared with 150sen in FY2017.
respect of its cash and cash equivalents, which as of
31 December 2018 stood at RM916 million. This was Inauguration Ceremony
an increase of RM64 million from RM852 million in
2017 which was most gratifying considering the capital On the 17 January 2019, the combined project of the
expenditure that took place in 2018. Optimill and UniFuji refinery was officially inaugurated
by our Royal Highnesses Duli Yang Maha Mulia
Our prudent approach towards capital management has Paduka Seri Sultan Perak Darul Ridzuan Sultan Nazrin
ensured that we can balance the dividend payments to Muizzuddin Shah and Duli Yang Maha Mulia Raja
shareholders, and take on necessary capital investments Permaisuri Perak Darul Ridzuan Tuanku Zara Salim. It
required within our group as well as to pursue new was indeed a great honour.
investment possibilities when the right opportunities
arise, without having to be dependent on banks. My sincere appreciation goes out to the team of people
involved in making this important milestone for UP a
Pinehill Plantations successful one.
In this connection and after a number of years searching Sustainability

for the right land bank expansion opportunity, it was
most pleasing that we announced the acquisition The Board upholds our commitment to undertake
of the 3,642Ha Pinehill Plantations Estates, for a responsible agricultural practices which focuses on
total consideration of RM414 million, located in the sustainability and good corporate governance and we
Lower Perak Region approximately 25km from our remain committed to the Round Table of Sustainable
Headquarters on Jendarata Estate. Palm Oil (RSPO) and our Policy on No Deforestation.
12
A harvester, pictured here in his rounds, undertakes one of the most important tasks in any plantation group today.
I am proud of the progress being made and grateful for to the ever changing and challenging business environment
the support from our stakeholders on this important in the form of lower commodity prices combined with the
sustainability journey. constraints associated with labour shortages.
In this connection it was most pleasing that UP received Before closing, I would like to thank all our customers,
recognition for its sustainability efforts by receiving business partners, government agencies and
three (3) awards for year 2018 as follows: shareholders for their continued support and trust
in our group. I would also like to place on record my
1. The ”EUROPA AWARDS for Best Sustainability appreciation for the commitment, understanding and
Reporting 2018”. wise counsel which I have received from all Directors.
2. Best Climate Change Initiatives (First Place) and I, also take great pleasure in welcoming Mr Jorgen
3. A Special Recognition Award Land Use & Balle to the UP Board and will look forward to working
Biodiversity (Runner up) by the Sustainable alongside him going forward.
Business Awards in partnership with Global
Initiatives Finally, I would like to place on record the Board’s
appreciation to Mr Ho Dua Tiam for his outstanding
More information on the awards as well as our contributions, loyalty and integrity towards the UP
many Sustainability initiatives are covered under the Group over the last 54 years. Whilst he retired from his
“Sustainability Report” section in this annual report executive roles on 31 December 2018, Mr Ho Dua Tiam
starting from pages 29 to 141. will continue as a Board Member as well as having an
advisory role to the Group.
Looking ahead I note with concern the increasing
global inventories of vegetable oils which resulted in In closing and on behalf of the Board of Directors,
prices coming under significant pressure over the last I would also like to place on record my sincere
6 months. Nevertheless, with production starting to appreciation to all United Plantations’ employees for
slow down and exports picking up the recent spot price their loyal and dedicated service which is so essential
recovery from RM1,800 to RM2,200 has been most for the future growth and well-being of our Group of
welcome. Companies.
We must, however, continue to place strong emphasis on Tan Sri Datuk Dr. Johari bin Mat
the importance of our core values and the necessity to adapt Chairman
13
Management Discussion and Analysis
Summary of Global Operating Environment 20th century. However, much of this investment has
gone to waste as more than one in five Chinese homes
The likelihood of a global economic slowdown has risen in urban areas or about 65 million apartments are empty
considerably over the last 6 months mainly due to the (source: China South Western University of Finance &
looming trade war between the USA and China and the Economic 2018).
adverse consequences which this would unleash onto the
world economy. Even cosmetic sales in China slowed by 10.5% in 2018
a sharp decline compared to 2017. What we are seeing is
The repercussions of what can only be seen as an economic a level of insecurity setting into the mind of the 1.4 billion
conflict between the world’s two largest economies will Chinese consumers who will without hesitation display their
indeed send shock waves to all trading nations inevitably natural ability to hold back and apply a level of restraint on
impacting not just global growth but more so the livelihoods temptations and unnecessary purchases.
of billions of people fueling the risk of political instability as
inequalities continue to widen. This will make companies around the world tremble as China
today accounts for not only 16% of the global economy but
Already now we see how big companies like Apple of the has for the past decade accounted for a staggering 30% of
US, South Korea’s Samsung and Indian owned Jaguar-Land worldwide growth.
Rover in the UK have warned that their businesses are being
hit by the slowdown notably in China. This combined with the risks of a hard Brexit, slower growth
prospects in the EU, growing tensions between Southern
However, the point which one must appreciate is that the Europe and Northern Europe (France’s Ambassador was
signs of distress being felt by China’s slowdown is now recently called back from Italy due to disagreement) have
slowly but steadily metastasizing and spreading from the resulted in the Federal Reserve Chairman, Mr Jay Powell
capital markets to the real economy where the external sending a more dovish message on interest rates and
impact will be far greater than most people can imagine. monetary policy contra the hawkish attitude which prevailed
during the first 3 quarters of 2018.
Already today, China is the world’s biggest automotive
market representing 30% of the global car market. For the These evolving developments will be followed closely as the
first time since 1991 car sales in China fell in 2018. geopolitical forces at play will have a compelling and lasting
influence on the health of the world economic activity and
From the start of 2012 to 2016 China produced nearly with that the supply but especially the demand of global
three times as much cement as the US did in the entire commodities which our business is a part of.
Synchronized Slowdown
Global growth is set to decelerate in coming years
2017 2018 2019 2020
7%
0
World OECD U.S. Euro area. Japan China
Source: Organization for Economic Cooperation and Development
14
Production and Prices of Crude Palm Oil (CPO) CPO prices hit the lowest levels in 10 years with the
3rd month future position on BMD breaking the
2018 saw a continued recovery in palm oil production in psychological RM2,000/MT level and spot month prices
South East Asia, notably from Indonesia, where CPO going below RM1,800/MT due to Malaysian palm oil
production grew to 41 million MT up from 37.1 million MT stocks reaching an all time high of above 3 million MT in
in 2017. Global palm oil production continued to expand December 2018. (see below tables)
from 68.25 million MT in 2017 to 72.08 million MT in
2018 equal to a net increase of 3.83 million MT or 5.6% The price situation could have been worse had it not
year on year mainly attributable to the favourable weather been for the Malaysian currency weakening vis-a-vis
throughout 2018. Indonesia alone accounted for over 90% the USD thereby lending their support to CPO prices in
of the net growth in global palm oil production in 2018. Ringgit Malaysia.
UP’s Estates, both in Malaysia and in Indonesia also benefited 2nd Best Result in UP’s History
from the better weather conditions recording a 6.7% increase
in CPO production in Malaysia and a 7.6% increase in CPO For 2018, the Company nevertheless managed to secure
production on our Indonesian estates. Combined, the UP an average CPO price of RM2,606/MT and coupled with
Group’s total CPO production rose by 6.9% to 219,729MT the improvement in overall CPO production, the Group
and PK production rose by 4.8% to 45,860MT. secured a profit after tax of RM374 million or just over
USD91 million.
During the first half of 2018, CPO prices remained in the
range of RM2,400-RM2,600, however with the recovery On the following pages, I will elaborate further on the
in production and with that rising CPO stocks, market financial performance for 2018 and the reasons for
prices started to come under pressure especially in the securing the above net profit.
last quarter of 2018.
World Palm Oil Output and Rotterdam Prices (Mn MT)

MT RM
45000 2700
40000 2400
35000 2100
30000 1800
in ‘000 MT
25000 1500 CPO (cif RoƩ)

Indonesia
20000 1200 Malaysia
Rest
15000 900
10000 600
5000 300
0 0
MPOB Malaysian Stocks of Palm Oil 3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
1995
1995
1996
1997
1997
1998
1999
1999
2000
2001
2001
2002
2003
2003
2004
2005
2005
2006
2007
2007
2008
2009
2009
2010
2011
2011
2012
2013
2013
2014
2015
2015
2016
2017
2017
2018
15
Group Total and Segmental Contribution 2018 & 2017
RM Million
450.00
Group Total
Plantations - Malaysia
400.00 Plantations - Indonesia
394.7 Manufacturing - Unitata
374.1 Manufacturing - UniFuji
350.00
IDR Realised and Unrealised Foreign Exchange Gain/(Loss)
50.4 Others
300.00 34.4
279.2 285.6
250.00
200.00
150.00
100.00
50.00 57.2 63.0
11.5 10.2
0.00
(3.9) (0.1) (4.3)
(14.3)
-50.00
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Financial Review of Operations RM 291 million for year ended 2018 which is a 7%
decrease from 2017.
o The Group’s revenue during 2018 decreased by 11% to
RM1,306 million compared to 2017 mainly due to lower Strong Cash Position and Investment in Pinehill Estate
sales prices for PK in our Malaysian operations and
lower CPO and PK prices in our Indonesian operations. It is important to re-emphasize that the Board of
In addition, the Refinery unit also witnessed a lower Directors is committed towards maintaining its policy of
revenue as a function of lower sales prices of PK products. having a strong balance sheet and especially a healthy
cash position, which as of 31 December 2018 stood at
o The Group’s profit before tax decreased by 3% from RM916 million.
RM504 million in 2017 to RM491 million in 2018.
Such prudent and conservative fiscal policy has served
o The Group profit after tax of RM374 million for our group well and will provide our company with the
2018 was a decrease of 5% from the record result of freedom to seek and make sound investments should
RM395 million in 2017. It should be noted that due opportunities arise without being dependent on financial
to the fair value adjustment of our forward sales, institutions.
as per the accounting treatment, RM 17 million
after tax have been included into the 2018 result. In this connection UP managed to enter into a sales
Nevertheless, the Board of Directors joins me in and purchase agreement pertaining to 3,642Ha (8,999
acknowledging that the post-tax results achieved in acres) of established (brownfield) estates for a total
2018 were very satisfactory, the 2nd best ever in the consideration of RM414 million.
Company’s history.
The acquisition is expected to be finalized, pending
Dividends certain approvals from the Perak State Government,
in March/April 2019 and will thereafter increase our
The Board of Directors has recommended a Final Single landbank in Malaysia by almost 10% from 40,766Ha to
Tier Dividend of 20sen per share and a Special Single 44,408Ha.
Tier Dividend of 90sen per share for the year ended 31
December 2018. Summary of Dividends for the year The announcement on page 17, was released to the
ended 31 December 2018 are shown below: market in September 2018 and provides relevant
information behind the acquisition:
The total dividend pay-out will therefore amount to
Dividends for the year ended 31 December 2018
RM
Interim single tier dividend
declared and paid 20sen
Special single tier dividend
declared and paid 10sen
Proposed final single tier dividend 20sen
Proposed special single tier dividend 90sen
Total Dividends 140sen

16
21 September 2018 Announcement on the
Acquisition of Pinehill Plantations Estates
UP has today entered into 3 conditional sales & economies of scale and facilitate a continuation of UP’s
purchase agreements with Pinehill Group to acquire core strength of cutting bureaucracy and providing a
their 8,999-acre agriculture land together with all “hands on” management approach throughout our
structures attached to the land including a palm Group,” said UP’s Chief Executive Director, Dato’ Carl
oil mill, employees’ living quarters and site office Bek-Nielsen.
(“Subject Properties”), located approximately 10 KM
from Teluk Intan in lower Perak, Malaysia, for a sum of “The soil types are excellent and the land is flat, providing
RM413.57 million equal to a transacted price per acre of UP with the ability to mechanize the operations which
approximately RM46,000. is vital in respect of enhancing productivities and
reducing costs. Within the next 3 years, UP will replant
The acquisition will be funded through UP’s internally a majority of the acquired land and by introducing
generated funds. The deal is expected to be completed UP’s high yielding planting materials combined with
by the first quarter of 2019 subject to approvals by the our total commitment towards enforcing sustainable
relevant authorities. The Subject Properties will thereafter practices, we will be able to increase the yields
be incorporated into UP’s existing business. significantly on this 8,999-acre property within the next
4-6 years. Finally, we remain confident and committed
“We have long been eying on this property due to its good to long term investments in Malaysia and especially in
accessibility which is located approximately 10 KM away our home state of Perak where we have operated since
from UP’s headquarters in lower Perak and the acquisition 1906 and look forward to continue creating value for all
is therefore a remarkable opportunity for our Group. stakeholders, ” said Dato’ Carl Bek-Nielsen.
As the acquired land is an old established plantation “A lot of work have gone into this and there have been
(brownfield land), UP will comply fully with its No many tough negotiations. Today I would like to thank
Deforestation Policy and will also transform the my team headed by the Executive Director Finance &
Subject Properties to produce certified sustainable Marketing Mr Martin Bek-Nielsen and the Company
palm oil in accordance with the criteria of the Round Secretary Mr Ng Eng Ho together with our advisors
Table on Sustainable Palm Oil (RSPO)”, said UP’s who have diligently been working around the clock
Chief Executive Director, Dato’ Carl Bek-Nielsen. “The towards reaching this stage of the deal, ” said UP’s
acquisition will increase UP’s land bank size in Malaysia Chief Executive Director, Dato’ Carl Bek-Nielsen.
by almost 10% and provide synergies by enhancing our
17
Plantation Operations
Metric Tonnes (MT) CPO Metric Tonnes (MT) PK

UP Group UP Group
2018 2017 Change 2018 2017 Change
Malaysia 168,680 158,060 6.7% Malaysia 36,789 35,373 4.0%
Indonesia 51,049 47,459 7.6% Indonesia 9,071 8,387 8.2%
Total UP Group 219,729 205,519 6.9% Total UP Group 45,860 43,760 4.8%
CPO production in 2018 reached 168,680 MT (Malaysia) One can also note that the total immature area in relation
and 51,049 MT (Indonesia) totaling 219,729 MT of CPO to the total group area under oil palms in 2018 now stands
for the Group compared to 205,519 MT CPO in 2017. The at 10.8% compared to 12.0% in 2017.
6.9% increase in the Group’s overall CPO production,
equal to 14,210 MT of CPO was, as mentioned before The total immature area on our Malaysian Estates is now
mainly due to the recovery in production arising from the 13.7% compared to 15.1% in 2017.
excellent weather conditions combined with the improved
performance of UP’s latest planting materials from the Cost of Production of Crude Palm Oil
substantial replanting undertaken over the last 10 years.
o The direct cost of production (before depreciation
and amortization) during 2018 increased
Average yields for the UP Group also improved as can
marginally by 0.34% to RM896/MT CPO from
be seen in the tables below reaching 5.71 MT CPO/Ha
RM893/MT CPO in 2017 for our Malaysian
and 5.73 MT CPO/Ha for our Malaysian Estates equal
operations. The total cost of production including
to a 67% higher yield from the national average yield
depreciation and amortization for 2018 was
recorded in Malaysia.
RM1,188/MT CPO vs. RM1,197/MT in 2017.
2018 2017 Change
o During the second half of the year labour costs
UP Group FFB average yield in MT/
Hectare
26.20 24.78 5.73% in Malaysia increased by 5% compared to levels
in 2017 and have now increased by over 149%
UP Group average Oil
21.80 21.46 1.58% from 2006 to 2018 impacting the labour costs
Extraction Rates (OER) in %
considerably. The trend has been even more steep
UP Group average Kernel Extraction in Central Kalimantan where labour costs have
4.55 4.57 (0.44%)
Rates (KER) in % risen by 337% since 2006 reaching levels which are
UP Malaysian CPO average yield in
similar to the labour costs paid in Malaysia today.
5.73 5.34 7.30% In spite of these significant increases in labour
MT/Hectare
costs, several sectors in Malaysia continue to find
UP Indonesian CPO average yield
in MT/Hectare
5.66 5.25 7.81% themselves exposed to a situation of acute labour
shortages. This is particularly the case not only for
UP Group CPO average yield the manufacturing sector, the construction sector
5.71 5.32 7.33%
in MT/Hectare
but also the agricultural and plantation sectors.
Malaysian National CPO yield in
3.42 3.52 (2.84%)
MT/Hectare o The Board of Directors join me in stating that
* Includes our Indonesian plantations. this is a concerning and unsustainable trend as
it will only erode the Malaysian and Indonesian
As of 31 December 2018, our Group’s areas planted up
Palm Oil Industry’s ability to compete against the
with oil palms can be summarized as follows:
other 16 competing oils and fats unless this is
In Hectares 2018 2017 Change matched by commensurate increases in yields and
UP Malaysia productivity, which unfortunately has not been
Mature Area 29,563 29,384 0.6%
the case for the majority of palm oil producers in
Malaysia who have seen their cost of production
Total Group Area having
come into Maturity 2,502 2,514 (0.5%) escalate.
(oil palms between
2 1/2 - 5 years in age) 14.45% 23.11% (37.5%) Labour Shortages
Immature Area 4,674 5,227 (10.6%)
Replanted Area 1,949 1,394 39.8% Labour shortages continued to affect the operations within
Total Area under Oil Palm 34,237 34,611 (1.1%)
the Malaysian Plantation Sector in 2018, including our
Company. However, crop losses were minimized mainly
UP Indonesia
due to the newly introduced measures of mechanization
Mature Area 9,098 9,035 0.7%
without which crop losses would have been much higher.
Immature Area - - -
Total Area under Oil Palm 9,098* 9,035* 0.7% During 2019, new initiatives will continue to be explored
Grand Total for the Group 43,335 43,646 (0.7%) in order to introduce more innovative ways to boost
* net of areas converted to Plasma. productivities through mechanization.
18
Nevertheless, it is hoped that the Malaysian Government Manufacturing Division
will continue to give due consideration to the Plantation
Sector’s plea to recruit guest workers as our produce is highly Unitata and UniFuji
perishable and will suffer great losses if labour shortages re-
emerge as has periodically been the case during 2018. In our downstream refinery division, our wholly
owned subsidiary Unitata performed very satisfactorily
We believe that with sufficient guest workers yields on especially in view of the much tougher market conditions
Malaysian Estates in general could increase by 0.5-1 MT FFB/ and increasing competition by the Indonesian Refinery
Ha on average. Sector in recording a contribution to the Group
amounting to RM57.2 million in 2018 vis-à-vis RM63.0
Selling Prices of CPO and Palm Kernels million in 2017.
o The average selling prices of Crude Palm Oil The results were mainly attributable to the sales of high
achieved during the year increased from RM2,578/ quality, certified sustainable and traceable products, a
MT in 2017 to RM2,606/MT in 2018 from our much weaker Malaysian Ringgit vs US Dollar, favourable
Malaysian CPO, an increase of 1.09% which was hedging results as well as cost cutting measures that
achieved through the Group’s forward sale policy continue to be an ongoing priority for Management.
which resulted in certain quantities having been
sold at higher price levels than the depressed Interest in certified sustainable palm oil is increasing,
market prices achievable during the 2nd half of and Unitata is committed to providing high quality
2018. tailor-made solutions to clients who demand palm
fractions which go well beyond the sustainability criteria
o The average selling price for Palm Kernels of the RSPO.
recorded a decrease of 24.8% to RM1,992/MT in
2018 compared to RM2,650/MT in 2017 for our For our JV refinery UniFuji, the plant was being
Malaysian Palm Kernels. commissioned in the 2nd half of 2018. It recorded a
RM3.9mil negative contribution to our Group.
Malaysian Ringgit vs US Dollar

Crude Palm Oil Palm Kernel
2018 2017 Change 2018 2017 Change
MPOB
Avrg price 2,233 2,783 (19.8%) 1,828 2,536 (27.9%)
(RM)
UP’s
Avrg price 2,606 2,578 1.1% 1,992 2,650 (24.8%)
(RM)
Source: tradingeconomics.com, OTC Interbank
Source: CIMB Research, MPOB
19
Coconut Production
Our coconut production of 71,423,003 nuts in 2018,

recorded a decrease of 5.1% compared 75,251,825 nuts in
2017. Average yields therefore declined from 25,345 nuts/
hectare in 2017 to 23,154 nuts/Ha in 2018 representing a
decrease of 8.6% which was less satisfactory.
This was mainly due to the very serious and concerning

glut in the domestic market caused by the tremendous
influx of Indonesian coconuts from May to November
which affected the demand for our Group’s coconuts.
This resulted in several million nuts being lost due to the
delayed offtake in nuts extending the harvesting rounds
resulting in germination taking place.
The entire Malaysian coconut industry including the High yielding yellow dwarf coconut palms.
smallholders have voiced their deep concern to the
Malaysian Government, as this will jeopardize the coconut
industry in Malaysia where the cost of production is higher
than in Indonesia. The graph below captures the monthly
imports of coconuts from 2008 to 2018.
Source: www.khor-reports.com
The significant influx of Indonesian coconuts from May to November 2018 had an adverse impact on the demand for Malaysian
home-grown nuts.
20
Indonesia
The Board of Directors, over the last 8-9 years have
Our Plantation Division in Indonesia generated a Group encountered prolonged delays surrounding the issuance
contribution of RM34.4 million in 2018 against RM50.4 of land permits, however, I am pleased to inform all
million in 2017, representing a decrease of 32%. As shareholders that we have received the HGU (Land
mentioned earlier, the reduction in profits were primarily Titles) for 6,004Ha in 2018.
a function of the substantially lower market prices of
palm oil and palm kernel obtained in Indonesia. Indeed, This has been a long journey and has involved much
CPO prices came under considerable pressure in Kalimantan work. We will remain hopeful and continue as we have
during the 2nd half of 2018 when the abundance in supply done over the last 10 years working closely with the
saw domestic CPO prices even testing RM1,500 per MT. numerous Indonesian Government Departments across
several Ministries to seek the HGU for the remaining
Nevertheless, with better weather and improved growing land bank under PT SSS.
conditions our estates in Indonesia recorded a 7.6% increase in
CPO production in 2018, i.e. from 47,459 MT CPO in 2017 to Land availability but also suitability from an
51,049 MT in 2018 with the total cost of production declining environmental regulatory point of view has also become
by 4.0% thereby reaching the lowest cost of production since a limiting resource wherefore expansion possibilities are
starting our operations in Indonesia. These factors were not what they were 13 years ago.
fundamentally important in a year of depressed commodity
prices and helped to cushion the effects of the lower palm oil Further expansion will for these reasons only be
and palm kernel prices. considered if brown field plantations developed before
2005 come up for sale that in no way contravene or
Whilst operating conditions continue to be challenging it ignore the company’s commitment to not just adhering
is with much satisfaction that after 12 years of operations to the RSPO’s Principles & Criteria but going beyond.
since entering Indonesia the efforts and commitment
provided towards the difficult expansion process into In the meantime, management continues to do
Central Kalimantan is finally paying off both financially a commendable job in consolidating the existing
but also, just as importantly, from a socio-economic point properties where agricultural standards have now
of view. reached standards similar to those on its Malaysian
properties. To date, 9,098Ha of oil palms (net of 1,259Ha
UP Indonesia ‘s production accounted for 23.2% of our converted to Plasma) have been planted and more than
Group’s CPO production in 2018 compared to 23.1% 7,500Ha of permanent conservation areas established.
in 2017 which is a most pleasing development. All
plantings have now reached maturity and the company These conservation areas, making up about 40% of the
now provides employment for 1,274 employees, many concession area consist primarily of riparian reserves,
of whom were previously unemployed. The Indonesian peat swamps as well as heavily degraded secondary
Rupiah’s depreciation against the Malaysian Ringgit forests as a result of the intense logging activities carried
resulted in an exchange loss of RM4.3million (out of out in the past prior to UP acquiring the properties.
which RM1.3million was realized) for our Group against
an exchange loss of RM14.3million experienced in 2017. These sanctuaries are a testimony to our Group’s
commitment towards maintaining an important balance
All infrastructural additions have been completed in between economy and ecology and where conservation
Indonesia during 2018 where 6 new terraced houses means development as much as it does protection of the
were completed thereby bringing the total number of environment.
high quality modern living quarters for our executives,
staff and workers to over 500 units today.
Loading of FFB into trucks on our Indonesian estates. A leopard cat captured on one of our camera traps in the midst of
feeding on a rat. Leopard cats are a natural component of biologi-
cal control against rodents.
21
This colourful Stork Billed Kingfisher (Pelargopsis capensis), commonly seen as one drives along our fields. The population of this bird has been on the
increase due to the abundant availability of fish and other sources of food such as frogs, lizards and insects, mainly found in our drains and waterways.
Sustainability Report (SR) Capital Expenditure
Since our foundation in 1906, UP has focused on economic The Group spent a capital expenditure of RM120.7
development combined with social and environmental million in property, plant and equipment (including
care. Identifying and managing UP’s social risks and bearer plants) in the current year as compared to
opportunities is fundamental to our continued success RM175.6 million in the previous year.
and to the core principles of our business activities, namely
doing business sustainably combined with committing The 31% decrease was mainly due to the construction
ourselves to a long-term perspective. of a state-of-the-art palm oil mill and additional capital
investments in the refinery division in the previous
Today, more than ever, sustainability and financial year. On bearer plants (capex spent on replanting),
performance are an integrated and inter-woven part of the Group incurred RM39.6 million in the current year
the UP Group’s well-being. which is a 1% decrease from RM39.8 million in 2017.
Our Sustainability commitment focuses on continuous For the year 2,345 Ha of oil palm and coconuts were
care and responsibility towards our employees, the replanted in Malaysia against 2,457Ha in 2017. All capital
environment, the community and the marketplace in expenditures were funded by internally generated funds.
which it operates.
Replanting Policy
We see this trend intensifying. A detailed Sustainability
report is accounted for in a separate section of this annual Concerted efforts are continuously being made by
report. (please refer to pages 29 to 141 ) Management to enhance the Company’s Breeding-
Agronomy and Tissue Culture activities as these remain
Management’s commitment towards providing as well of cardinal importance in terms of our Group ‘s ability
as improving social amenities within our Group shall to further improve our agronomic productivities.
therefore remain the hallmark of the EXCOM and
management in 2019.
22
Yield Targets
The table below provides an overview of various yields In this connection, I am pleased to advise that our
per Ha targets in terms of FFB and CPO as well as Group’s long-term replanting policy remains a high
OER in Malaysia and Indonesia. priority, both in times of low as well as high commodity
prices and that all planting materials used for this
UP Group FFB yields/Ha OER CPO yields/Ha
extensive replanting programme has been produced
Malaysia 28.0MT 23.0% 6.5MT at UPRD using exclusively proven germplasm with
Indonesia 25.5MT 25.5% 6.5MT
over more than 60 years of sterling plant breeding
techniques where the ultimate goal is to secure high
The difference in terms of FFB/Ha/year and the OER yields.
between the countries, is due to the difference in
planting materials (Research & Development), soils, Failure to implement this critical aspect of plantation
climatic factor and labour availability. management will inevitably lead to stagnating yields
and declining production resulting in the inability to
A total of 1,949 Ha of oil palms were planted on our remain competitive.
Malaysian properties during 2018 compared to 1,394
Ha in 2017. Whilst our Group’s average age profile has All replanting carried out during 2018 continued to
improved, we must nevertheless appreciate that the be done in accordance with the environmentally
major bulk of our Group’s replanting programme for friendly “zero burn policy”, thereby complying fully
our Malaysian Estates will only be completed by next with the regulations laid down by the Department of
year. Environment.
Indeed, during the course of the last 10 years (2009- Indeed, this practice has remained an integral
2018) our Malaysian estates have replanted a total of part of our company’s commitment towards Good
22,451Ha of oil palms equal to 66% of the total area Agricultural Practices since 1989 and has helped
under oil palm today. This is absolutely necessary if not only in ameliorating and conserving the organic
we are to further improve on the age profile of our carbon status in our topsoil but also in improving the
established plantations and with that our average overall fertility status of our soils.
yields which is of special importance in maintaining a
favourable cost base.
A well laid out replant of oil palms at Changkat Mentri Estate with the addition of new roads to facilitate not only supervision but also crop evacuation
over the next 20-25 years.
23
A textbook example of replanted field at Ulu Bernam Estate. Rows of evenly spaced out young seedlings and stacks of shredded palm
biomass from the earlier plantings are placed neatly as far as the eye can see.
24
25
Mechanised FFB collection in progress at a mature oil palm field in Jendarata.
Prospects and Outlook World Palm Oil Production thus contributed to over 44%
of the net growth in the World’s 17 Oils & Fats production
Based on the current operating environment UP is respectful in 2018 which increased from 222.1 million MT to 230.79
of the challenges which 2019 may bring. Increased focus million MT enabling stocks to increase from 30.85 million
on cost efficiencies and improved productivity as well MT in 2017 to 33.06 million MT in 2018.
as higher yields will therefore continue as a vital part of
sustaining our positive development. PALM OIL: World Production (Mn MT)
Palm Oil Production 2018 2017
Special attention will also be given towards addressing
any imminent labour shortages and to further improve on Indonesia 41.00 37.10
all weaknesses identified in respect of our sustainability Malaysia 19.52 19.92
journey. UP is far from perfect and much more attention
must in this respect be given to operationalise and Rest of the World 11.52 11.23
mainstream the principles of our commitment so this Total 72.08 68.25
is “built in” and not just “bolted on” – so to say. We shall
Source: Oil World 2019
dedicate our energies to this.
In accordance with our replanting policy, UP will proceed The abundant supplies of Oils & Fats notably within the
to replant large areas of its older and less productive oil palm oil sphere applied a downward pressure on prices
palm stands in Malaysia during 2019 after which the which fell to a 12 year low of USD598 on average of
replanting rate will be somewhat lower compared to the January/December 2018 (CIF Rotterdam).
acreages replanted over the last 10 years.
One would have observed how palm oil prices (CIF
As this message is being written, our Company is Rotterdam) declined by a thumping 30% from USD 681
awaiting the outcome from the authorities on the permits in March to USD475 in November.
and approvals which are absolutely necessary before UP
can complete the land acquisition to take over the 3,640 The main reason for this was firstly an increase in Palm
Ha Pinehill Estate located only 30 minutes’ drive from Oil supplies which increased by 3.79 million MT year on
our Headquarters. year but more so the poorer demand from key importing
nations such as China whereas consumption of palm
Should this materialize, we will accelerate the replanting oil only grew by 5.8% to 5.4 million MT and where
on this property in order to take full advantage of our consumption in the biggest importing market, India,
latest planting materials from UPRD which have a much actually declined from 9.3 million MT in 2017 to 9.07
higher yield potential. million MT in 2018.
26
Consumption of Palm Oil in Key Countries (in Million MT)
2018 2017
Indonesia 11.80 9.22
India 9.07 9.30
EU 28 7.58 7.56
China 5.40 5.10
USA 1.45 1.33
For 2019 we foresee that global CPO production will

grow by an additional 3.5-3.8 million MT with 80-85% of
the main growth in production coming from Indonesia.
This combined with the ample stocks of soybeans is
expected to put a ceiling on the price complex.
Source: Oil World 2019
However, there are 2 aspects which must be followed A further sizeable growth is expected in 2019 in tandem
closely as they could cause a break-away from the with the government’s target of raising the admixture
fundamentals. The first is the political intervention mandate to 30% or B30.
by the importing countries such as India and what
strategies the Government decides to adopt in terms of The forecasts so far by Oil World, Hamburg are that
import duties for palm oil. The second parameter will be Indonesia alone will increase its production of biodiesel
the pace of world biodiesel production and whether the from 5.2 million MT in 2018 to 7.45 million MT in 2019
production seen in 2018 amounting to 40.25 million MT representing a 2.25 million MT increase in demand for
cannot just be sustained but in fact will grow by another this sector. This, if materialised, would put a floor on the
3-4 million MT. fairly bearish outlook on prices and may help to sustain
prices around the RM2,200-2,300/MT CPO.
The country which hold’s the key to this complex
situation will increasingly fall on Indonesia which during With the prices contracted under our forward sales
2018 was not only the largest producer of palm oil but policy and with our Indonesian production improving
became the largest consumer of palm oil. coupled with large areas steadily coming into maturity
from our replanted areas in Malaysia, the Board of
The renowned and reputable German Company, Oil Directors expects that the results for 2019, will be lower
World, wrote on 11 January that, “At an estimated 13.8 compared to 2018 but nevertheless satisfactory when
million MT in Oct/Sept 2018/2019 Indonesia is seen taking the prevailing prices for palm oil and palm kernel
boosting palm oil consumption by 2.9 million MT or by into consideration.
27% from a year earlier.”
Acknowledgment
Indonesia will be having an election in 2019 and millions
of people’s livelihoods depend on the well-being of palm In closing, I would like to applaud Management for the
oil prices. various concerted efforts made during the last many
years especially in view of the very difficult situation
Their votes are therefore important. We believe that the associated with the effects of the chronic labour
Indonesian Government will go all out not only to fuel shortages experienced on our estates.
their biodiesel industry but also to stimulate the offtake
of biodiesel domestically in line with the implementation This dedication and loyalty displayed by our officers,
of the B20 admixture mandate in September 2018 which staff and employees alike continue to win my respect
sharply raised domestic consumption. and admiration. I wish to thank you all for this level of
devotion which is equaled only by few organizations in
today’s world.
I would also like to thank all our customers, business

partners, government agencies and shareholders for the
continued support and trust in our Group where it shall
always be our common goal of striving to be recognised
as “second to none”.
Dato’ Carl Bek-Nielsen

Chief Executive Director (CED)
The Chairman, Tan Sri Datuk Dr. Johari bin Mat and other Board
members being shown around the new Unifuji refinery by the Chief
Executive Director, Dato’Carl Bek-Nielsen.
27
Productivity improvement - a harvesting team with
motorised cutter.
Sustainability Report
2018
Contents
About this report 30
Message from the CED 31 - 34
The UP Legacy and Values 35
Awards and Recognitions 37
Governance Structure 38 - 39
Stakeholder Engagement 40 - 41
Materiality 42 - 43
United Nations Sustainable Development Goals (UN SDGs) 44 - 46
Targets and Achievements 47 - 50
UP and the Sustainability Certifications 51 - 52
UP’s Material Sustainability Matters
- Employees 55 - 67
- Environment 69 - 111
- Community 112 - 119
- Marketplace 121 - 132
Global Reporting Initiative (GRI) Content Index 133 - 137
Glossary 138
Assurance Report from KPMG 140 - 141
29
About This Report
(GRI 103-1, GRI 102-48, GRI 102-49, GRI 102-50, GRI 102-51, GRI 102-52)
United Plantations Sustainability Report 2018 covers External Assurance

the environmental, economic and social performance (GRI 102-56)
across all our operational and management activities
within the UP Group, which include our plantations and GRI recommends the use of external assurance, but
mills in Malaysia - United Plantations Berhad (UPB) and it is not a requirement to be in accordance with the
Indonesia - PT Surya Sawit Sejati (PT SSS), our refinery Standards. We believe external assurance adds to
– Unitata Berhad (Unitata) and our bulking installation – the credibility and transparency of sustainability
Butterworth Bulking Installation Sdn. Bhd. (BBI). reporting.
This report focuses primarily on activities carried out In this connection, we are pleased to inform our
within the financial year ended 31 December 2018, with stakeholders that KPMG has provided limited
comparable prior year statistics where available and assurance over 10 selected Key Performance
relevant. Indicators (KPI’s) reported in our 2018 Sustainability
Report thereby bringing additional value and
In the previous 8 years, various aspects of our credibility to our disclosure.
sustainability practices were presented in our Corporate
Social Responsibility section of our Annual Reports, Their assurance report is available on pages 140 to
as the Group has always taken pride of its sustainable 141.
approach to all aspects of its operations.
This Sustainability Report will remain as part of our

Annual Report.
The structure and content for this report draws upon

guidance from Bursa Malaysia’s Sustainability Reporting
Framework which comprises amendments to the Listing
Requirements, the Sustainability Reporting Guide and
six supporting toolkits, and the GRI Sustainability
Reporting Guidelines.
An internal Sustainability Committee at UP is

responsible for officially coordinating with the various
departments and subsidiaries in assessing and covering
all key material sustainability matters within our Group.
In preparation of this report, we have engaged and

considered the responses from both internal and external
stakeholders and performed a thorough internal review
and assessment of key sustainability aspects and impacts
which represents the most critical areas of our Group’s
business and operations.
This exercise resulted in arriving at 22 material

sustainability matters which are reflected in the
materiality matrix included in this report.
As part of our sustainability processes and activities

we will continue to strengthen our performance and
disclosures to various stakeholders by monitoring
our specific targets and key performance indicators,
fostering close relationship with our stakeholders as
well as harmonising material sustainability risks across
the Group.
We hope to provide our stakeholders with an overview

of our approach and continuous progress in meeting our
sustainability commitments.
For additional information, please refer to our website:

Often seen in abundance on our plantations, these butterflies
www.unitedplantations.com are indicators of a rich biodiversity, healthy environment and a
healthy ecosystem.
30
Message From The CED
(GRI 102-14)
Dato’ Carl Bek-Nielsen, Chief Executive Director, UP Bhd.
We are pleased to present our 2018 sustainability Whilst the sustainability report is a relatively new
report to you in which we describe our Group’s concept, UP has over the years published updates on
sustainability policies and actions in order to share our our sustainability journey as part of the CSR activities
commitment on sustainability and to comment how described in our Annual Reports.
we are pursuing this in practice.
We openly acknowledge that much more can be done
Ultimately, it is our actions and behaviour that defines and we intend to work harder at integrating and
what type of company we are and for UP, I continue mainstreaming our sustainability efforts into our
to see sustainability as one of the key pillars in our operations.
Group’s Strategy which is of paramount importance to
our long-term success. In this respect, I am pleased to report that the sustained
efforts undertaken by our Company especially since 2005
For generations, UP has interweaved Economic viability, were recognized by the Sustainable Business Awards in
Environment Responsibility and Social Awareness into partnership with Global Initiatives who on the 29 January
the way we conduct our business. This commitment 2019 awarded United Plantations Bhd the winner under
was evidenced by the fact that the world’s first RSPO the category of “Climate Change”. The conclusion by the
certificate was awarded to UP in 2008. National Advisory Panel which lead to this prize was:
We remain 100% committed to the RSPO principles and Quote:

criteria and during 2017, we were the first plantations- Through its focused efforts, United Plantations Bhd has
based company in Asia Pacific and Africa to go beyond managed to reduce its GHG emissions by 40% (with
the current standard by being awarded the RSPO Next indirect land use change and nature conservation) per kg
certification for some of our operating units. of refined oil produced from 2004 to 2017. They have also
invested heavily in biogas plants which have helped to
These initiatives combined raises the bar for sustainable reduce their CO2 emissions.
production even further by firmly upholding our : Unquote
Policies on No deforestation and No New Peat
Development which were already introduced in 2010, as On the same evening, United Plantations Bhd was also
well as strengthening human rights and the wellbeing given a special recognition award under the category of
of the local community. We see this as a necessary “Land Use & Biodiversity”.
commitment in order to assure the industry’s future
relevance and acceptance by consumers around the
world.
31
This was a most unfortunate event especially since so
many have been engaged in taking mitigative measures
to minimise the risks that may result in bodily injury or
death. Nevertheless, the Company remains vigilant and
will continue its regular in-house training programmes
combined with impromptu safety audits in our mills,
estates and refineries.
Progress was also made during 2018 to maintain the

highest possible welfare standards for our workforce
whilst simultaneously also focusing on improving
on our environmental footprint. New investments in
infrastructural amenities as well as improving on services
to our employees will therefore also continue in 2019.
Management discussing a full day field visit on UP’s estates in
Indonesia which remains a vital part of managing plantation.
Environment
Recognition is pleasing but it also raises the bar and
compels Management to keep stimulating new progressive As the world faces the threat of global warming, we
ideas, failing which, the positive momentum, created by so are all becoming increasingly aware that our presence
many individuals in our Group will slow down. on this earth leaves a mark on the environment.
UP is committed to being a leader in environmental
Bursa Malaysia’s move to make sustainability reporting performance by not just focusing on good agricultural
mandatory for listed companies in Malaysia clearly practices but also by committing itself to safeguarding
signals the importance for stakeholders to have a chance the natural resources. Finding the right balance between
in evaluating companies based on their sustainability Economy and Ecology is a cornerstone in our Group
commitments. We strongly support this move. and much emphasis is therefore placed on reducing
variables that impact our environment negatively.
During 2018, an expanded materiality assessment
has been carried out in close collaboration with our Much scrutiny and criticism has been aimed at the palm
stakeholders in which views and expectations on various oil industry, with accusations of habitat destruction and
topics have been discussed and documented thereby endangerment of protected species, indiscriminate
enabling us to identify and map the most relevant issues burning and causing regional trans-boundary haze, as
pertaining to our economic, environmental and social well as contributing towards social conflicts and climate
risks and opportunities. change. Whilst palm oil production has contributed to
certain aspects of the above and whilst there are rogue
This exercise has been very rewarding and is fundamental players who blatantly violate most environmental
to achieving our business strategy and with that our well- laws, it is important that the accusations are backed by
being. holistic facts and presented objectively instead of being
singled out as the lightning rod for the public’s growing
However, we must not forget, that our commitment to anger on issues concerning deforestation and climate
sustainability is an ongoing journey with no finishing line. change.
We will therefore continue to align our business values,
purposes and strategy with sustainability principles The palm oil industry is complex and far too often it
divided into four main areas, namely Employees, is subject to being painted with one brush without
Environment, Community and Market place. recognizing the tremendous efforts undertaken by
many different stakeholders, including producers, to
Employees promote the responsible production and consumption
of sustainable palm oil.
Our employees have been and will always be our
core assets remaining a key pillar for the success and Unjust and subjective accusations keep tarnishing
continued growth of our Group. In this connection, the image of the industry without offering solutions
their welfare and rights as well as a safe and healthy or taking ownership of problems. This behaviour will
workplace are of key importance in every aspect of our get us nowhere apart from negatively impacting the
operations. livelihoods of millions of people whose sole objective is
to uplift themselves out of poverty. We need to be more
We remain focused on safety leadership and strategies nuanced with our criticism but also highlighting good
targeting risk reduction as we value the lives and practices so others may emulate these.
wellbeing of our employees and contractors. We are
doing our best to improve awareness on safe practices
and to enhance preventive skills among all our Our Group therefore believes that producing palm l
employees in order to minimise the risk of work place oil sustainably is the only way forward wherefore it is
accidents. Whilst there were no fatal accidents in 2017, important that all stakeholders support the RSPO, or
I regret to inform that one of our Company’s tractor other credible initiatives, in order to make sustainable
drivers met with a fatal accident in 2018 when he lost palm oil the preferred choice. This above all else should
control of his tractor. be our common goal.
32
Reducing our Carbon Footprint Her Royal Highness Raja Permaisuri Perak Darul
Ridzuan Tuanku Zara Salim on 17 January 2019 in the
Our Group’s commitment towards mitigating its presence of the Mentri Besar Perak Darul Ridzuan, YAB
“carbon footprint” and thereby its Greenhouse Gas Dato Seri Ahmad Faizal bin Dato Azumu, YB Teresa
(GHG) emissions remains a high priority to which new Kok, the Honourable Minister of Primary Industries,
initiatives and investments continue to be made. Malaysia as well as Excellencies from EU, Denmark,
Netherlands, Sweden, Japan and the United Nations. It
Following an updated and very comprehensive Life was a memorable day and I am extremely grateful to all
Cycle Analysis (LCA) report undertaken from January those who made the effort to witness this milestone.
to February 2019 it was pleasing to note that UP from
2004-2018 has managed to reduce its GHG emissions Conservation of jungle reserves and promoting
per kg refined oil by 54% (including indirect land use biodiversity remains of key importance to the UP
change and nature conservation) compared to 46% in group. In this respect, it continues to be our view that
2017 thus reaching a new record low GHG footprint conservation means development as much as it does
per kg of refined palm oil produced. conservation and that all growers should strive towards
Our target of reaching a 50% reduction (including reaching this balance.
indirect land use change and nature conservation)
before the end of 2019 has therefore been reached and
a new and revised goal of reaching a 60% reduction COPENHAGEN
(including indirect land use change and nature
conservation) by 2025 has been set by Management and Herein, I am delighted that our collaboration with
will relentlessly be pursued through new innovations Copenhagen Zoo which was initiated in 2007 and
inspired by our strong collaboration in Scandinavia. officially established in 2010, continues to flourish
(please refer to page 90) with many success stories arising from the hard work,
research and studies undertaken to date.
During 2018, the Company completed and
commissioned a strategic project it had been working The commitment and skills introduced by Copenhagen
on since April 2015. This involved designing a layout Zoo have been extremely fulfilling and has helped
that encompassed the latest technologies available our Group operationalise not only the vital virtue
to create a perfect example of the circular economy sustainability but also helped to manage and nurture
within an oil palm plantation involving a ‘state of the our more than 7,500 Ha jungle reserves in our Group.
art’ optimill, biogas plant and a uniquely innovative in-
house refinery running without the use of fossil fuels. Today, our Biodiversity team more than ever is
responsible for mainstreaming environmental concerns
The project covering 25Ha of land was inaugurated into standard operating procedures. Nevertheless, more
by His Majesty Sultan Nazrin Muizzuddin Shah Ibni can be done and there are still areas in need of greater
Almahrum Sultan Azlan Muhibbuddin Shah Al- attention and where we in UP have to learn to see the
Maghfur-Lah, Deputy Yang Di-Pertuan Agong and light and not be blinded by the light -so to say.
The housing complex established in 2010, on Lada Estate in Central Kalimantan, Indonesia.
33
Employees children at the creche in Lada Estate, PT SSS Central The Unitata inland refinery.
Kalimantan.
Community and that our supply of palm oil is safe. This has
opened up market opportunities amongst reputable
We recognise that we are part of a global community, brand manufacturers and retailers globally who view
and that we therefore have an obligation to bring favourably the assurances of sustainable and traceable
about positive change to the lives for the families of palm oil which we have been able to offer customers.
our employees and our local communities. In that
connection, we shall keep striving to play a positive role Since 2017, we have established a total overview of
in and around the locations where we operate by first our supply chain and for our up-stream operations,
and foremost taking ownership of problems that arise. we can identify the plantation from which fresh fruit
bunches (FFB) are derived from and the palm oil mills
Amongst others, we intend to do so by engaging and from which the Crude Palm Oil and Palm Kernels are
working closely with local communities in our efforts produced. This supply chain has been mapped out to
to uplift their living standards and to offer business ensure traceability and food safety and to focus on a
and employment opportunities to interested parties structured approach should any grievances be raised by
wherever possible, thereby contributing to the wealth, our stakeholders.
resources and expertise to local economies and in
particular, surrounding communities. For our down-stream operations, we have also mapped
our supply chain and whilst all our palm oil can be traced
Through respect and engagement with local back to the plantations or the various palm oil mills, the
communities and community leaders in Indonesia we main portion of the palm kernel oil which we use can
have seen positive developments in alleviating conflicts only be traced back to the Palm Kernel crushing plants
relating to land rights, which are handled in an amicable and palm oil mills. To trace all the palm kernel oil back
and transparent manner through proper grievance to the plantations is still a challenge and is a process that
procedures and in line with the spirit of the RSPO needs to be pursued further in the coming years.
which is described further in the report. Furthermore,
continuous improvements were made during 2018 to Whilst we acknowledge that we have come a long way
maintain the highest possible welfare standards for our in our sustainability journey, we are also aware that
workforce and to ensure high standards of educational there are many challenges ahead which we will have to
facilities provided for their children. meet. The points I have touched on above serve only as
highlight to this report, and will be further elaborated
This naturally includes the continuous review and upon in the following pages (pages 29 to 141).
upgrading of our housing facilities provided to our
employees, be this guest workers or local employees. Finally, I thank you for your interest in our sustainability
Several new spacious houses were built in 2018 with efforts and hope you will find our journey interesting.
more to come this year. We believe that in order for any I would also like to thank our Board of Directors for
business to develop fruitfully one must commit oneself to their continuous support, guidance and interest in this
a long-term perspective and shun short-termism. Only report as well as all our stakeholders including NGOs
by committing oneself to this and taking ownership can for their active and valuable participation and inputs
one conceptualize the true spirit of creating shared value that have been of much value to our Group.
(CSV) which is a fundamental step towards forming a
sustainable and successful business. With the continuous commitment by our group
including an active participation by all our stakeholders,
Marketplace I am confident that we will be able to face most
challenges ahead of us as we keep moving forward with
UP recognises the importance placed by our customers our sustainability commitments.
and consumers on food safety, product quality and
traceability of the supply chain. Full traceability Dato’ Carl Bek-Nielsen
demonstrates that we are in control of our operations Chief Executive Director (CED)
34
The UP Legacy And Values
Aage Westenholz, Commander William Lennart Grut, Tan Sri Dato’Seri B. Bek-Nielsen, Tan Sri Haji Basir bin Ismail
Chairman and Founder of UP Chairman of UP Ltd (1935-1949) Chairman (1978-1982) and Chairman of UPB (1982-2002)
Ltd (1906-1935) Sr. Executive Director of UPB
(1971-2003)
UP´s commitment to sustainable agriculture originated Building Bridges Between Two Nations
with its founder, a Danish Engineer & Entrepreneur, Aage
Westenholz who established UP in 1906. The late Tan Sri B. Bek-Nielsen who started his career with
UP in 1951, continued the legacy of the early founders
Westenholz not only promoted a strong culture of through hard work, discipline and being firm but fair
innovation and an imaginative approach to business throughout his career spanning more than 50 years. He was
strategy but also of ethical conduct within plantation instrumental in expanding the Group through technical as
agriculture. well as agronomic innovation focusing on producing palm
oil of superior quality.
He was known for his philosophical ideals of co-operative
working and profit sharing and promoted the following In 1982 the late Tan Sri Haji Basir took over the chairmanship
concept: “capital and labour ought to co-operate as two of UP and together with the late Tan Sri B. Bek-Nielsen
hands on the same body guided by one brain.” ensured that a solid bridge between two Nations, Denmark
and Malaysia, was galvanised further. Through this close
Westenholz was also known for setting the highest collaboration the two stalwarts ensured that UP progressed
standards for the workforce, within the conditions into an internationally recognised Group.
of the day, and had as early as 1928 established
a well-functioning hospital with good facilities Over the last 113 years since our foundation, UP has
and medical personnel to cater for the needs of been focusing on maintaining social and environmental
the employees and their families as well as the awareness and striving to the best of our abilities to create a
communities surrounding the estates. balance between economy and ecology. This focus resulted
in UP being awarded the world’s first Roundtable on
Another key figure during the foundation of UP was Sustainable Palm Oil certificate in 2008.
Westenholz’s brother in-law, a navy officer, Commander
William Lennart Grut. UP firmly believes “That no one person at the top is
stronger than the pyramid of people who supports him or
The two stalwarts, Westenholz and Grut not only linked her”. Emphasis on the attitude of continuous improvement
together in kinship, also shared common values of Vision, combined with the values of Integrity, Discipline, being
Compassion and Discipline and introduced the first jungle Innovative and focusing on Social and Environmental
sanctuary (The Grut Sanctuary) as well as the concept of care are key aspects of UP’s unique culture which is best
mulching to maintain soil fertility in the 1930´s. described through our motto “Second to None”.
The focus on innovation and care for employees Our Core Values
combined with ethical values laid down by our pioneers N
signifies the beginning of UP´s early focus on Corporate
Social Responsibility (CSR) which has become a part of INTEGRITY
the Company´s DNA and emphasises the responsibility
to manage our resources resourcefully and engage in
INNOVATIVE
DISCIPLINE
activities that optimize returns for our shareholders and S ECOND

W
at the same time Creating Shared Value (CSV) for our TO

E
N ONE
employees and the society we operate in.
The central premises behind CSV are that the S O CIAL

EN RE
competitiveness of our Company and the health of the VIR & CA
O N M ENTAL
communities around us are mutually dependent, thus S
enabling UP to create economic value by also creating
societal value. Our company’s unique culture is best described
through our motto “Second to None”
35
The United Plantation’s Museum, a hidden gem of historical artifacts.
The UP Museum
In order to safeguard UP’s rich heritage and as a tribute The Museum is located modestly in the midst of
to the Company’s founders and the different generations Jendarata Estate on the grounds of the first Registered
of employees and their families, suppliers, customers, Office of the Company and is an institution that houses
surrounding communities and others associated to UP and cares for a collection of pictures and stories as well
in one way or another, the Museum evolved. The UP as artifacts and other objects of historical importance,
Museum had its inception in 2006 in conjunction with and is truly a repository of the rich culture of UP
UP Centennial celebrations and was officially opened encompassing various paraphernalia and memorabilia
by her Royal Highness Princess Benedikte of Denmark of the past.
on the 15th September 2006.
Guests being shown the museum and told the history of UP Bhd.
36
Awards and Recognitions
2016 9 Winner for the Best Corporate Social Responsibility Initiatives (CSR) category by the Edge Billion
Ringgit Club (Below RM10 billion market cap).
2017 9 Awarded 3rd placing out of 184 companies (Plantations)-Sectoral award based on two financial
performance indicators by the Edge Billion Ringgit Club:
- Highest Return on Equity over three years
- Highest Return to Shareholders over three years
9 RSPO NEXT Certification - (World’s second RSPO NEXT Certification and the first for Asia
Pacific and Africa)
9 Awarded the ACCA MaSRA Commendation Award for Biodiversity.
2018 9 Awarded Winner for the Best Sustainability Reporting by Europa Awards for Sustainability
organized by EUMCCI 2018
9 MSPO Certification (for all UP’s Malaysian operations)
9 Awarded Winner for Climate Change and a Special Recognition Award on Land Use and
Biodiversity by the Sustainable Business Awards Malaysia 2018 (SBAM) presented by Global
Initiatives.
The Human Resource Environment Safety & Health Team of United Plantations comprising (from left) Mr.
Lee Kian Wei, Mr. C. Mathews, Mr. Norhazizi Nayan, Mr. D. Jeevan Dharmapalan at the Europa Awards
where UP won the Best Sustainability Reporting prize.
Business
Awards
Malaysia 2018
The Minister of Energy, Science, Technology, Environment and Climate Change, YB Puan Yeo Bee Yin handing
over the award for Winner on Climate Change to UP’s Chief Executive Director, Dato’Carl Bek-Nielsen. 37
Governance Structure
(GRI 102-18, GRI 102-19, GRI 102-20, GRI 102-22)
Effective governance and robust risk management policies Team (GSRT) headed by Mr. Martin Bek-Nielsen, Executive
and procedures combined with our core values are key for Director, Finance & Marketing and includes key personal
achieving long term success. from Finance, Research, HR & Environment, Safety &
Health, Share Registrar and Marketing.
The Board of Directors of UP is responsible for approving
the direction and overall strategy for UP Group and The GSRT collates all the information from GSC,
monitoring and management’s progress in connection stakeholders’ responses and prepares the Sustainability
with the financial objectives and strategic priorities. The Report. Sustainability matters have been a subject close
Board receives a formal Sustainability Report at least once to the heart of UPB. Officially established in 2003, the
a year before it is reviewed and approved for release to the GSC (formerly known as Operations and Environment
shareholders and public. Management Committee) provides policy direction on
strategic leadership on UP’s Sustainability agenda, identifies
In relation to UP’s overall sustainability objectives, targets our Group’s most material issues in relation to risks and
and priorities, the Board of Directors has delegated opportunities and monitors progress against targets set by
responsibility to the Executive Committee (EXCOM) the CED and EXCOM on a bi-annual basis.
headed by the Chief Executive Director (CED), Dato’
Carl Bek-Nielsen. The Executive Committee reviews Since the Sustainability Report became mandatory in 2016,
and approves UP’s sustainability objectives and monitors Mr. Martin Bek-Nielsen has been briefing the Board, CED
progress and sustainability developments within the and EXCOM on the work of the GSRT and sustainability
Group. issues at every official meeting held. Sustainability is also a
key aspect in the Group’s Risk Management Structure which
The CED and EXCOM are assisted by the Group assesses various sustainability issues and developments in
Sustainability Committee (GSC) which is chaired by the its annual Risk Assessment and Management process.
CED. There is also the Group Sustainability Reporting
Sustainability Governance Management Structure
Board of Directors Responsible for:

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Sustainability performance
CED & Executive Committee Responsible for:

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policies and goals
Group Sustainability t %JTDVTTJOHTVTUBJOBCJMJUZJTTVFT
Reporting Team t 61TTVTUBJOBCJMJUZQFSGPSNBODF
t 4VTUBJOBCJMJUZ3FQPSU
Responsible for:
Group Sustainability Committee
t .BJOUBJOJOHTVTUBJOBCJMJUZ
performance across the Group
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Various sub-committees and sustainability standards are consistent
business units across the Group
Group Sustainability Committee

CHIEF EXECUTIVE DIRECTOR & Members of the Executive Committee
The Group Manager Human Resources and Environment, Safety & Health (HRESH)
COMMITTEE MEMBERS
Down river Up river UIE Senior Manager Head of UP Unitata PTSSS

business units business units business units Human Research business units
Resources Department (Key executives)
(Heads of (Heads of (Heads of (President Director
Departments) Departments) Departments) Manager and
HRESH Safety key executives)
Officer
38
Group Sustainability Systems Framework (GSSF)
EXTERNAL
REGULATORS
CHIEF EXECUTIVE DIRECTOR (CED) & EXCOM CUSTOMERS
SUSTAINABILTY
REPORT
CSR
GROUP SUSTAINABILITY COMMITTEE SUPPLIERS
VALUES GROUP TARGETS &
COMMUNITY
SUSTAINABILITY REPORTING ACHIEVEMENTS
SHAREHOLDERS TEAM
R&D
NGOs CUSTOMER
STRATEGIC PLANS
BIODIVERSITY SATISFACTION
BUSINESS PROCESS
HR & SAFETY
BUSINESS RESULT
RESOURCES RSPO BUSINESS UNIT AWARDS
VISION
CERTIFICATIONS
ANNUAL GOALS ISPO BUSINESS UNIT
ENVIRONMENT
PROJECTS FINANCIAL
BUDGETS OSHA COMMITTEES PERFORMANCE
INNOVATIONS
GUEST WORKERS’S WELFARE SAFETY
OSHA
QUALITY CULTURE COMMITTEES PERFORMANCE
HUMAN RIGHTS SAFETY & HEALTH
GENDER COMMITTEES ENVIRONMENT
CULTURE
CODE OF & SOCIAL IMPACT
SOCIAL COMMITMENT SMALLHOLDERS’ ASSESMENTS
CONDUCT &
FIELD DAY
BUSINESS ETHICS ENVIRONMENT
COMMITTEE STAKEHOLDERS
ECONOMIC RETURNS
/SMALLHOLDERS
INTERNAL DIALOGUE
LEADERSHIP PLANNING ENABLERS RESULTS
UP’s Group Sustainability Systems Framework (GSSF) 2) Field Management Manual

is the system through which its commitment to
environment and sustainable development including 3) Standard Operating Procedures – Oil Palm Field
social and occupational safety & health matters are Practices
formalized. It is based on four key focus areas as follows:
4) Standard Operating Procedures – Palm Oil Mill
Leadership of the Group Sustainability Committee is at operations
the highest level of the company and is spearheaded by
the Chief Executive Director Dato’Carl Bek-Nielsen. This 5) Occupational Safety and Health and HIRARC
committee provides policy directions on environment Manual
and sustainable development, occupational safety and
health, allocation of resources and communications. 6) Environment & Social Impact Assessments and its
Management & Monitoring Plans
Planning encompassing external and internal needs
that are formulated through the company’s vision, 7) High Conservation Value, High Carbon Stock
policies, goals, projects and budgets. Assessments and its Management & Monitoring
Plans
Enablers are various sub-committees and teams that
ensure the adoption of environment and operational 8) ISO9001:2008, HACCP and Quality Manual for
practices that are in line with current best practices and Unitata Refinery
policies.
Results are measured through customer satisfaction,
The RSPO Business Units and the various sub- safety performance, financial performance, environment
committees are enablers of the GSSF and ensure protection and management and certifications.
that the environmental and operational policies are
implemented. They are guided amongst others by the The Group Internal Audit Department, together with
RSPO’s Principles and Criteria and following Manuals the Group’s Sustainability Division carries out audits on
and SOP’s : various sustainability issues and areas throughout the
year to ensure compliance to the Group’s sustainability
1) RSPO Principles and Criteria policies and procedures.
39
Stakeholder Engagement
(GRI 102-15, GRI 102-21)
At United Plantations, we recognise that stakeholder is carried out to fully understand their sustainability
engagement, assessment and feedback are an concerns and issues with a view to ensuring that
integral part of our global sustainability strategy their key interests in these areas are aligned with
and initiatives. that of our Group.
The stakeholder groups which are key to our We are continuously improving our stakeholder
operations and which have significant influence over engagement approach which is now evolving into
the impacts of our business are carefully identified more tailored and targeted engagement sessions
and are engaged at various platforms and intervals with our stakeholders and the following pages
throughout the year. provide an overview of the efforts involved in our
group’s focus on stakeholder engagement.
The stakeholder engagement process which includes
a proactive and both formal and informal approach,
The Director of Research, Mr. Ho Shui Hing providing an overview of UP’s initiatives on integrated pest management to Ybhg. Datuk
Shahril Ridza Ridzuan, former CEO of EPF and other officers of EPF. Today EPF owns 13.48%of UP’s shares and has become the
second largest shareholder in the Company.
40
Overview of Stakeholder Engagement
(GRI 102-40, GRI 102-42, GRI 102-43)
Stakeholders Specific stakeholders Type of engagement Frequency Areas of interest Outcomes Addressed by specific Page
Group addressed Material Sustainability reference
Matters*
Shareholders & Shareholders both o Engagement o At least Deforestation, pesticides & Good relationship 3 57
Investors in Malaysia and in survey once a year chemical usage, Occupational with shareholders 7 70
Denmark o Annual General o Once a Safety & Health (OSH), free, and positive 10 101
Meetings, year prior & informed consent reputation 14 114
o Analysts briefings o Twice a (FPIC) and product quality amongst investors, 17 121
year constructive feedback
Customers/ Major consumer o Engagement o At least GHG emissions, discharges Better awareness 2 55
Consumers goods survey once a year & waste management, of UP Group’s 3 57
manufacturers, deforestation, high carbon commitment to 4 60
Refineries, and end o One-to-one o Periodic stock, peat development, sustainability, and 8 82
consumers meetings human & workers’ rights, better understanding 9 88
o Visits to Estates, o Periodic social welfare, OSH, product of our policies, 10 101
Mills and our quality, food safety & culture and values 17 121
Refinery sustainability certifications 18 122
and supply chain 19 125
Employees Executives, staffs and o Annual employee o Once a Human & workers’ rights, Improved 8 82
workers survey, year social welfare, OSH, equal understanding of 9 88
o Group o Once a treatment, grievance company policies 10 101
Sustainability year resolution, product quality, and efforts taken to 11 103
Committee food safety & sustainability date, Inclusiveness 15 117
meeting certifications in the management 17 121
o Gender committee o Four times decision making 18 122
meetings, a year
o Guest Workers o Six times a
Welfare year
Committee
o Occupational o Four times
Safety & Health a year
Committee
o Internal trainings o Periodic
Small holders Small holders o Annual Small o At least Biodiversity & conservation, An opportunity 1 55
& Local surrounding and holders’ Field Day once a year pesticides & chemical usage, to sustainably 7 70
communities near our operations and Town-Hall workers’ rights, OSH, product enhance the 8 82
in Malaysia and style meetings, quality and food safety & agricultural practices 10 101
Indonesia o One-to-one o Periodic sustainability certifications of smallholders, 17 121
communications amicable solution 18 122
to grievances, better
social relations with
UP Group.
Government DOSH, Labour o Engagement o Periodic pesticides & chemical usage, An opportunity to 7 70
Agencies Department, Survey human & workers’ rights, social share the Group’s 8 82
Indonesian local o One-to-one o As and welfare, OSH, equal treatment, commitment, 9 88
government, Indian meetings when code of ethics & governance, and policies 10 101
High Commission necessary product quality, supply chain and procedures 11 103
and evaluation of supplier/ to sustainable 12 104
contractors’ sustainability operations 17 121
commitment 19 125
20 127
Non- SUHAKAM, o One-on-one o As and Biodiversity & conservation, Better understanding 1 55
governmental TENAGANITA, meetings when water impacts, pesticides of NGO’s concerns 6 67
organisations AMESU, MAPA necessary & chemical usage, workers’ and raised awareness 7 70
o Engagement o Once a rights, social welfare, code of UP Group’s 8 82
surveys year of ethics & governance, sustainability 9 88
o Direct o As and grievance resolution and commitments by 12 104
correspondences when product quality NGOs 15 117
via email and necessary 17 121
telephone
conversations
Palm Oil Industry Neighbouring o Engagement o Once a GHG emissions, fire & Good relationship 2 55
Group plantations and, surveys year haze, discharges & waste with industry group 5 66
MPOA, MPOC, management, pesticides and maintain 7 70
knowledge sharing 8 82
MPOCC & chemical usage, human
to enhance the 9 88
& workers’ rights, OSH, sustainability of 10 101
product quality, food industry 17 121
safety & sustainability 18 122
certifications and 21 128
commodity prices
Suppliers and Suppliers of various o Engagement o Once a Biodiversity & conservation, Raised awareness 1 55
Contractors inputs and key survey year GHG emissions, discharges of UP Group’s 2 55
contractors within o One-to-one o Periodic & waste management, sustainability 3 57
the Group meetings deforestation, high carbon commitments, better 4 60
stock, peat development, understanding of UP 8 82
workers rights, social welfare, Group’s business 9 88
OSH and product quality 17 121
* Please refer to Summary of Materiality Matters (22 Key Sustainability Issues) on page 42.
41
Materiality
(GRI 102-15, GRI 102-46, GRI 102-47, GRI 103-1, GRI 103-2, GRI 103-3)
This report addresses key sustainability matters Marketplace, which we have assessed as being of
which have been identified after taking into high concern to stakeholders and of high significance
consideration both the Group’s view on significant for our Group in 2018.
environmental, economic and social aspects, impacts,
risks and opportunities which are vital to the success Data collected from various stakeholders are then
and continued growth of the Group, and the views analysed and used to create a materiality matrix which
and responses from our stakeholders on pressing also includes the assessment on the significance
material issues. of the identified key sustainability matters and the
prioritisation of stakeholders to the organisation.
In identifying the material sustainability matters, The resulting Materiality Matrix is as shown on the
and opportunities, we have drawn information from following page.
various internal and external sources of information
which include the views of the Group Sustainability Material issues which have been identified are then
Reporting Team within our organisation, stakeholders, assessed by the Sustainability Reporting Team to
industry groups, standards recommended by global establish if there are policies and procedures in place
and industry specific reporting bodies, such as the to address and manage these issues, and if none,
Roundtable for Sustainable Palm Oil (RSPO) and the to ensure implementation plans are drawn up and
Global Reporting Initiative (GRI) and existing peer presented to the management for follow up as part of
literature. the Group’s sustainability commitment.
As a result of the above mentioned exercise and Quantifiable indicator data and targets are assigned
evaluation of the Group’s Sustainability Risks and where relevant and are communicated to our
Opportunities, we have this year identified 22 key stakeholders via this Sustainability Report. The
sustainability issues under four main headers, materiality assessment has been reviewed and
namely Environment, Employees, Community and endorsed by Executive Committee (EXCOM) of UP.
UP’s light railway network stretching over 500km remains of vital importance in terms of facilitating an efficient and fragile transportation
of its fresh fruit bunches from the fields to the mills.
42
Summary of Materiality Matters
Relevant
22 Key Sustainability Issues Stakeholder Groups
UN SDGs *
1. Code of Ethics and Governance 8, 16
2. Equal Treatment 5
3. Human and Workers’ Rights 1, 8
4. Social Care and Workers’ Welfare 2, 4, 8
5. Occupational Safety & Health 3, 9
6. Fighting the Haze and Preventing Fires 13
7. Biodiversity and Conservation 14, 15, 16, 17
8. Deforestation/High Carbon Stock 13
9. GHG Emissions, Discharges and Waste 7, 9, 13, 16, 17
- Shareholders
Management
6, 9 - Employees
10. Water Impacts
13 - Customers/Consumers
11. Peat Development
12 - Local Communities /Smallholders
12. Pesticides and Chemical Usage
3, 4, 8 - Government Agencies / Regulators
13. Community Welfare
16 - Non-Governmental Organisations (NGO)
14. Free, Prior and Informed Consent
16 - Palm Oil Industry Group
15. Grievance Resolution
2, 12 - Suppliers/Contractors
16. Plasma Development (for Indonesia)
17. Product Quality 12
18. Certifications for Food Safety, 12
Sustainability and Others
19. Sustainability and Traceable Supply 12
Chains
20. Evaluation of Suppliers/Contractors’ 12
Sustainability Commitment
21. Commodity Prices -
22. Currency Fluctuation -
* Please refer to page 44 on United Nations Sustainable Development Goals (UN SDGs).
Materiality Matrix
100%
90% 5 3
4
High
12 10 2 7 17
1 6, 13
80% 18
11, 20 15 8, 19 21
Significance to the Stakeholders
9
14
70% 22
16
60%
Medium
50%
40%
30%
20%
Low
10%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Low Medium High
Significance to the UP Group
43
United Nations Sustainable Development Goals
(UN SDGs)
Introduction
The Sustainable Development Goals (SDGs) were some 170 countries and territories. UNDP believes that
born at the United Nations Conference on Sustainable sustained, inclusive and sustainable growth is essential
Development in Rio de Janeiro in 2012. The objective for achieving the 2030 Agenda. Growth can be inclusive
was to produce a set of universal goals meeting the and can eliminate poverty but only if all segments of
urgent environmental, political and economic challenges society, including the marginalized, share the benefits of
facing our world. The SDGs replace the Millennium development and participate in decision-making. In this
Development Goals (MDGs), which started a global respect it is important to stress that the key objective of
effort in 2000 to tackle the indignity of poverty. The MDGs the UN and with that the SDGs is that no one is left
established measurable, universally-agreed objectives behind when pursuing the SDGs.
for tackling extreme poverty and hunger, preventing
deadly diseases, and expanding primary education to all The SDGs are unique as the goals and targets cover
children, among other development priorities. all of the key issues affecting us. They reaffirm our
international commitment to end poverty, permanently,
For 15 years, the MDGs drove progress in several everywhere. They are ambitious in making sure no one is
important areas: reducing income poverty, providing left behind. More importantly, they involve us all to build
much needed access to water and sanitation, driving a more sustainable, safer, more prosperous planet for all
down child mortality and drastically improving maternal of humanity.
health. They also kick-started a global movement for
free primary education, inspiring countries to invest in UP and UN SDGs
their future generations. Most significantly, the MDGs
made huge strides in combatting HIV/AIDS and other As a company with global operations, UP respects
treatable diseases such as malaria and tuberculosis. and recognises the importance of its role in this
global initiative. As such, the Group has mapped
The SDGs came into effect in January 2016, and they the relevant SDGs with each materiality topic and
will continue to guide United Nations Development identified eight (8) UN SDGs with their specific
Programme (UNDP) policy and funding until 2030. As targets that are most relevant to its business
the lead UN development agency, UNDP is uniquely operations as well as key concerned materiality topic
placed to help implement the Goals through our work in highlighted by the stakeholders.
44
SDGs Specified Targets Status Action Plan
SDG 1 – No 1.1 – By 2030, eradicate extreme poverty for Ongoing All employees of UP in Malaysia receive at least the minimum wage
Poverty all people everywhere, currently measured set by the Malaysian Government (Minimum Wages Order 2018),
as people living on less than $1.25 a day RM1,100/- per month with effective from 1st January 2019. The average
earnings in United Plantations was 50 % higher from the minimum
wage in 2018.
Accommodation is provided free of charge to all workers with potable
water supply and electricity at a subsidized rate.
UP provides annual benevolent payments as well as other
compassionate and educational payments/scholarships to the workers
via the UP Benevolent Fund. The Benevolent Retirement Scheme was
established in 1985 to provide retirement benefits to workers who have
loyally served the Group for 10 years and above.
UP helps smallholders to develop their land, including land preparation,
for cultivation of oil palms under the Plasma Scheme. The scheme is
expected to provide more opportunities for the smallholders and help
alleviate poverty. To date a total of 1316.36 Ha of Plasma Schemes have
been developed.
SDG 2 – No 2.1 – By 2030, end hunger and ensure Ongoing The Company facilitates the purchase of rice and sugar at wholesale
Hunger access by all people, in particular the price for its employees. Cooking oil is supplied to the general employees
poor and people in vulnerable situations, at a subsidized rate.
including infants, to safe, nutritious and
The orchards with local fruits trees are established in estates for
sufficient food all year round.
employees and residents’ consumption. The Company also plants
coconut palms and fruit trees around the workers quarters for their
access and use. Residents are encouraged to plant vegetables in their
backyard.
UP established the Old Folks Home in 1967. The Home caters for the
retired and aged employees who are given free boarding, food and
medical care with a full-time caregiver.
SDG 3 - Good 3.8 – Achieve universal health coverage, Ongoing There are two (2) Group Hospitals and seven (7) clinics in UP Group
Health including financial risk protection, access with full-time certified Hospital Assistants (HA) and ambulance
to quality essential healthcare services services. In addition, there are regular visits by the Visiting Medical
and access to safe, effective, quality Officers (VMO) cum Occupational Health Doctor (OHD).
and affordable essential medicines and
Medicines and treatments are provided free of charge to all employees
vaccines for all.
and their dependents as well as the neighbouring communities.
3.9 – By 2030, substantially reduce the Ongoing In line with our Company OSH Policy, we are committed to secure the
number of deaths and illnesses from safety and health of our employees at work. Nevertheless, we strive to
hazardous chemicals and air, water and maintain a safe and healthy working environment for our employees,
soil pollution and contamination. customers and the public.
Appropriate Personal Protective Equipment (PPE) are provided free of
charge to the employees.
Training on Safe Operating Procedures (SOP) and Hazards
Identification, Risk Assessment and Risk Control (HIRARC) are
conducted on a regular basis.
Regular safety audits are conducted by the Company’s Resident Safety
Officer to identify any risks, safety non-conformances which are
subsequently addressed by the management units.
Potable water supply is provided to all employees and their dependents
on the estates. Domestic water sample analysis conducted by accredited
laboratory on a regular basis.
The implementation of chemical measurement and transfer method by
using new Anabranch Liquid Handling System significantly reducing
the exposure of chemicals to the chemical mixing operators as well as
reducing the soil and waterways contamination during pouring and
transferring of chemicals.
SDG 7 – 7.2 – Increase substantially the share of Ongoing All mills in UP Group are equipped with Biogas plants which capture
Renewable renewable energy in the global energy mix. the methane gas produced when palm oil effluents are biodegraded by
Energy an array of bacteria thereby producing green energy. This considerably
mitigates the Greenhouse Gas (GHG) emissions reducing the impact
on climate change. Furthermore, the Electrification Project in one of our
mills enables the conversion of biogas to electricity that is exported back
to the national grid thereby displacing the need to burn coal.
The state-of the-art new refinery, Unifuji utilises renewable energy
derived from Biomass generated from the newly established
neighbouring Optimill which creates a “circular economy” and best
practice within the industry. This complex now operates without the use
of fossil fuels significantly reducing the GHG footprint of the Groups
operations.
45
SDGs Specified Targets Status Action Plan
SDG 8 – 8.2 – Achieve higher levels of economic Ongoing The opening of new Optimill factory complex and Unifuji not only
Good job and productivity through diversification, produces value added palm fractions but also provides employment
economic technological upgrading and innovation, opportunities for 150 people.
growth including through a focus on high-value
The average earning of workers is 50% higher than the minimum wages
added and labour-intensive sectors.
based on their productivity.
8.8 – Protect labour rights and promote Ongoing UP Group is committed to the protection and advancement of human
safe and secure working environments for rights wherever we operate. Our human rights policy is based on our
all workers, including migrant workers, core values on Safety and Health, Environmental Stewardship and
and those in precarious employment. Respect for people.
SDG 9 – 9.4 – By 2030, upgrade infrastructure Ongoing UP encompasses and amalgamates the most modern equipment and
Innovation and and retrofit industries to make them technologies available in the industry embracing the concept of the
Infrastructure sustainable, with increased resource-use circular economy. This can be demonstrated through the Company’s
efficiency and greater adoption of clean investment in the new Optimill and a new joint venture refinery called
and environmentally sound technologies Unifuji.
and industrial processes, with all countries
The VORSEP Dust Collector System has been installed in all of our mills
taking action in accordance with their
where the dust emissions have been successfully reduced to the level far
respective capabilities.
below permissible level by Department of Environment (DOE).
SDG 13 – 13.2 – Integrate climate change measures Ongoing By creating a greater environmental awareness and by mapping out
Climate Action into national policies, strategies and areas that contribute negatively towards greenhouse gas emissions the
planning. UP Group has through been able to make specific and target orientated
green investments that has contributed towards reducing its GHG
emissions by 46% (without iLUC), 40% (with iLUC) and 54% (with
iLUC and nature conservation) per kg of refined oil produced from
2004.
Nature tree reserves parks including the Group’s 7,500Ha of jungle
conservation area that has been permanently set aside. UP has
effectively cancelled out the negative impact of iLUC on our GHG
emissions.
Throughout the years, additional railway tracks were laid to facilitate
crop transportation bringing the total network length to about 540km.
The in-house fabricated 90hp diesel locomotives can efficiently
transport up to 180 MT of crop in a single trip, compared to an average
6 tonne payload capacity when using trucks or tractor-trailers. This
superior efficiency offers substantial fossil fuel savings and mitigation
of GHG emissions.
Most of the oil palm residues including chipped trunks, fronds, EFB,
fibre and shells are effectively utilised and recycled as organic matter
back to the fields, in the form of organic mulch in the nursery thereby
enriching our soils or as a fuel source displacing the use of fossil fuels
whilst adding value to the biomass generated. To further enhance our
biomass utilisation, 8 new Biomass Reciprocating Boilers have been
built since 2005.
SDG 17 – 17.16 – Enhance the Global Partnership for Ongoing UP and Fuji Oil agreed to establish a Joint Venture (JV) based on a
Partnership for Sustainable Development, complemented common goal of a long-term partnership in which unique technologies,
the Goals by multi-stakeholder partnership that sustainable practices and first-class palm oil quality are combined.
mobilize and share knowledge, expertise, This JV has materialised into a super modern and efficient setup
technology and financial resources, to including a solvent fractionation plant.
support the achievement of the Sustainable
Development Goals in all countries, in
UP collaborates with Copenhagen Zoo in conducting research on
particular developing countries.
leopard cats, King Cobra, the cultivation and planting of endangered
tree species, restoration and rehabilitation initiatives as well as
biodiversity conservation. This collaboration was initiated in 2007 and
officially established on 1 October 2010, through a Memorandum of
Understanding (MOU).
46
Targets and Achievements
(GRI 102-15)
Our targets and achievements drive us to continuously improve. In this report, we provide information about our progress of targets
and achievements. They include targets in the areas of Certifications, Biodiversity, Climate Change, Community, Employees,
Legal Compliance and Economics and others. The targets and the achievements to date provide an overview of our goals over a
period of 3 years up to 2019.
Objectives Targets Achieved Target 2018 Status of Target in Target for 2019 Target for 2020 Addressed Reference Relevant
To date 2018 by Specific page UN SDGs
Material
Sustainability
Matter
Target 1 : Employees
No child labour (under the No breaches in Human & 57 8
age of 18 years, or as per compliance reported Workers’
local regulations) or observed in Rights
external and internal
audits
No forced of trafficked No breaches in Human & 57 8
labour in our operations compliance reported Workers’
or observed in Rights
external and internal
audits
No retention of Guest Since its In 2018, new To replicate the Human & 57 8
workers’ passports construction and passport lockers construction of Workers’
evaluation, the constructed in Ulu passport lockers in Rights
Company has Bernam Estate UIE and Ulu Basir
decided to replicate Complex
the construction
of passport lockers
in other estates in
stages
Phasing out of Paraquat No Paraquat Achieved in 2010 3
usage policy 2010
No work-related fatalities Zero fatality One work-related Zero fatality Zero fatality Occupational 66 3
fatality reported Safety &
Health
Reduce Lost Time Injury Introduce a Continuous Occupational 66 3
Frequency Rate (LTIFR) behavioural safety Improvement Safety &
below 2014 levels. (12.27) approach (LTIFR 6.56) Health
To live up to the UN Human Rights To establish In view of change in Establish call Human & 57 3
Guiding Principles on Policy 2013 United Plantations Government Policy centres in source Workers’
Business And Human Information on recruitment of countries for Right
Rights Guest Workers Centre (UPIC) in Bangladeshis the disseminating
Policy 2014 Bangladesh establishment of information
UPIC is on hold. to potential
candidates
Target 2 : Environment (Biodiversity)
Monitoring and 2008 Ongoing monitoring Biodiversity 70 15
management of HCV, SEIA and maintenance of &
and conservation areas. the flora and fauna Conservation
Established the Kingham- 2008 Ongoing monitoring Biodiversity 70 15
Cooper Tree Species and maintenance of &
Reserve at UIE Estate. the flora and fauna Conservation
UP and Copenhagen Zoo 2010 Ongoing partnership Biodiversity 70 15, 17
established a partnership &
with UP including Conservation
establishing a Biodiversity
Department
Research on raising 2012 Ongoing research Biodiversity 70 15
predators in the Insectary &
Conservation
No new oil palm 2014 We will comply with Biodiversity 70 13
development without RSPO NPP for all &
RSPO NPP –protocols. future new oil palm Conservation
plantings
Research on Rat control 2014 Ongoing research Biodiversity 70 15, 17
by Leopard cats in &
collaboration with Conservation
Copenhagen Zoo
Monitoring and 2014 Ongoing monitoring Biodiversity 70 13
management of HCS and maintenance of &
the flora and fauna Conservation
47
Material
Sustainability
Matter
Target 3 : Environment (Climate Change)
Installation of Biomass Jendarata Palm UIE Palm Oil Mill Completed GHG 88 9, 12
Reciprocating Boilers Oil Mill (2006), Emissions,
Ulu Basir Palm Oil Discharge
Mill (2014), Ulu & Waste
Bernam (Optimill) Management
and Jendarata Palm
Oil Mills (2017)
No new development of 2010 Ongoing GHG 88 13
peatland. Emissions,
Discharge
& Waste
Management
Install methane capture in 2013 GHG 88 9, 12
all palm oil mills (Achieved in Emissions,
2017) Discharge
& Waste
Management
Measuring GHG 2015 1.18 kg CO2 -eq/kg Achieved 1.18 kg CO2 -eq/kg 1.18kg CO2 -eq/ GHG 88 7, 12
emissions for all palm NBD Oil NBD Oil kg NBD Oil Emissions,
oil operations (33%) UP Carbon Footprint Discharge
reduction since 2004 per MT of NBD oil & Waste
(achieved in 2015) reduced by 54% Management
compared to 2004
(iLUC including levels with iLUC and
conservation) nature conservation.
To measure the total GHG Ongoing GHG 88 7, 12

emissions per year for the Emissions,
UP Group Discharge
& Waste
Management
Conversion of conventional 2015 Ongoing GHG 88 7, 12
lightings to T5 lights with Emissions,
the potential savings in Discharge
power consumption by & Waste
78 % Management
To supply electricity to Export to national Ongoing GHG 88 7, 12
the National Grid derived grid Emissions,
from the biogas plant at Achieved in 2016 Discharge
UIE Palm Oil Mill (Nil flaring) & Waste
Management
Monitoring and control Two fire engines Monitoring and GHG 88 13
of fire across our estates and other related control ongoing Emissions,
and neighboring areas equipment for PT Discharge
with adequate firefighting SSS purchased. & Waste
capacity. Management
Monitoring of fire hot Monitoring of fire Ongoing GHG 88 13
spots hot spots from Emissions,
Global Fire Watch Discharge
under the WRI & Waste
Global Forest Management
Watch Tool as
monitoring aids.
Installation of VORSEP Ulu Basir UIE Palm Oil Mill Completed GHG 88 9, 12
System at Palm Oil Mills installed in 2015, Emissions,
to reduce dust emission Ulu Bernam Discharge
(Optimill) and & Waste
Jendarata Palm Management
Oil Mills installed
in 2017
Water Footprint-reduction 60 gallons / capita/ Malaysian 60 gallons / capita/ 60 gallons / GHG 88 6
by 5% compared to 2015 day Operation: day capita/day Emissions,
level of 80 gallons per 69 gallons/ capita/ Discharge
capita by 2018 day & Waste
Management
Indonesian
Operation:
76 gallons/capita/day
48
Material
Sustainability
Matter
Target 4 : Community
PLASMA-schemed 1770Ha. 1316Ha 454Ha PLASMA 119 1, 12
smallholders Development
to establish in PTSSS (20%
of Company’s planted area
in Indonesia i.e. 1770 Ha)
All community based land To address Ongoing Free Prior 114 3

conflicts to be addressed land conflicts Informed
in a structured and according to our Consent &
transparent manner established land Grievance
dispute settlement Resolution
procedure and to
reduce number of
cases
Target 5 : Legal Compliance

Hak Guna Usaha (HGU) 2,508.47Ha in To fully achieve HGU for 6,004.15Ha To fully achieve To fully achieve Code of 55 16
permits for UP’s land Lada Estate objective obtained (Lada & objective objective Ethic &
concession (18,663Ha) obtained in Runtu Estate) Governance
under PT SSS in Indonesia 2005Ha in Lada
as per the President of Estate obtained in
the Republic of Indonesia 2005Ha in Lada
decree 104, 2015 dated 28 Estate obtained
Dec. 2015. in 2005
Target 6 : Economics
Malaysia Product 121 12
FFB Yield Per Hectare 25.11 26.67 26.33 Quality
Oil Extraction Rate 21.98 21.47 21.90
CPO Yield Per Hectare 5.52 5.73 5.47
Indonesia Product 121 12

FFB Yield Per Hectare 23.68 24.69 25.34 Quality
Oil Extraction Rate 25.50 22.94 24.55
CPO Yield Per Hectare 6.04 5.66 6.22
6CTIGV%GTVKſECVKQPU
Migros Sustainability 2003 Certification 51 12
Criteria Audit conducted for Food
by ProForest Safety,
Sustainability
and Others
World’s first RSPO 2008 ASA 1 for 4 oil Achieved ASA 2 for 4 oil Certification 51 12
Certification for all 6 mills in mills in for Food
oil mills in Peninsular Peninsular Peninsular Safety,
Malaysia Malaysia Malaysia Sustainability
*4 oil mills currently in and Others
operations
- RSPO Re-certification
(2013 & 2017)
RSPO P&C –PTSSS (Lada RSPO Certification Achieved RSPO Certification RSPO Certification 51 12
POM & supply bases) for the balance for the balance Certification for for Food
of Lada POM & of Lada Palm Oil the balance of Safety,
supply bases (HGU Mill‘s supply bases Lada Palm Oil Sustainability
achieved areas) (HGU achieved Mill‘s supply and Others
areas) bases (HGU
achieved areas)
ISPO P&C PTSSS (Lada ISPO Certification ISPO scope ISPO Certification ISPO Certification 51 12
POM & supply bases) for the balance extension audit for the balance Certification for for Food
of Lada POM & for new HGU of Lada Palm Oil the balance of Safety,
supply bases (HGU acquired areas was Mill‘s supply bases Lada Palm Oil Sustainability
achieved areas) carried out 6th-10th (HGU achieved Mill‘s supply and Others
August 2018 and areas) bases (HGU
awaiting issuance of achieved areas)
certificate.
World’s second RSPO 2017 RSPO NEXT Achieved in Ceased (Please Certification 51 12
NEXT Certification and ASA 1 September 2018 refer to UP and for Food
the first for Asia Pacific Sustainability Safety,
and Africa Certifications Sustainability
Section page 51) and Others
* UP has got 4 palm oil mills in Malaysia today as 2 of the mills have been decommissioned due to consolidation.
49
Material
Sustainability
Matter
6CTIGV%GTVKſECVKQPU
MSPO Certification for all To seek Achieved in ASA 1 for all ASA 2 for all Certification 51 12
Palm Oil Mills and Estates certification for the September 2018 Palm Oil Mills Palm Oil Mills for Food
in UP Malaysia 4 Palm Oil Mills in and Estates in UP and Estates in Safety,
UP Malaysia Malaysia UP Malaysia Sustainability
New acquired and Others
plantations
(Pinehill) to be
MSPO Certified.
External Assurance on First external To seek third Achieved To seek third To seek third Certification 140 12
Sustainability Report assurance was party limited party limited party limited for Food
conducted in 2017 assurance on our assurance on our assurance on our Safety,
sustainability sustainability sustainability Sustainability
report 2018 report 2019 report 2020 and Others
Unitata Annual Achieved Annual Annual Certification 122 12
certification certification certification for Food
o ISO 9001 (1995) Safety,
o HACCP (2003) Sustainability
o Halal (2004) and Others
o KOSHER (2005)
o BRC (2008)
o RSPO SCCS (2010)
o GMP (2014)
o MESTI (2014)
o FDA (2008)
o GMP +B2 (2017)
o MPCA (2014 - Bi-
annual certification)
50
UP and Sustainability Certifications
(GRI 102-9, GRI 102-12, GRI 102-13)
The Migros Criteria, ProForest and UP´s involvement in For our Plasma scheme smallholders, full certification is
the RSPO expected by 2021 subject to issuance of individual land
certificates by the local government
Whilst UP has focused on responsible agricultural
production for generations, our formal journey towards UP’s RSPO certified sustainable production volumes
being recognized as a certified producer of sustainable
palm oil commenced in September 2003 when we were Our capability of supplying sustainably certified,
audited by ProForest and became the world’s first audited traceable and high-quality palm oil and palm kernel oil is
producer and processor of sustainably produced palm oil an important part of our commitment to our customers.
in accordance to the Swiss supermarket chain, Migros’ Our total RSPO certified and traceable quantity available
principles and criteria on sustainable palm oil. based on our own production was approximately
168,680MT of palm oil and 36,790MT of palm kernels
UP’s role regarding the RSPO remains one of being active in 2018.
and in this connection, we are pleased to state that our
Company was one of the initial palm plantation signatories Supply outpacing RSPO certified demand
to the RSPO in 2004. Shortly after the establishment of
the RSPO, UP was a part of the initial stakeholders group Whilst it is commendable that approximately 19% of
involved in developing the principles and criteria to define the World production of palm oil is now certified by the
sustainable palm oil. RSPO it is unfortunately still a fact that the global uptake
of RSPO certified palm oil was only 47% of the supply
Global RSPO Members and Governance amounting to 13,287,566MT of CPO in 2018, thereby
outpacing demand. This is a dreadful message to the
The RSPO has more than 4080 members worldwide growers and clearly shows that there are many Western
(from 92 countries) who represent all stakeholders consumer good manufacturers (CGMs) and retailers
along the palm oil supply chain. The primary objective who whilst being members of the RSPO have failed
of the RSPO is to promote a credible standard on to take ownership of the sustainability commitments
sustainable palm oil production and the subsequent use manifested within the RSPO.
of sustainable palm oil. All Members have committed to
produce, source and /or use sustainable palm oil certified The RSPO certified oil not purchased will end up in the
by the RSPO, in order to transform markets thereby supply chain without being sold as certified sustainable
making sustainable palm oil the preferred choice. palm oil- but just conventional palm oil sending a
negative message to growers worldwide.
UP´s involvement in the RSPO today
UP and RSPO NEXT Certificate in 2017
Today our CED, Dato’ Carl Bek-Nielsen is the Co-
Chairman of the RSPO Board of Governors representing In 2017, United Plantations became the first Company
the Malaysian Palm Oil Association’s seat. He was elected in Asia Pacific to become RSPO NEXT certified by taking
to this position in November 2014 and has thereby on the challenge and voluntarily pursuing to obtain the
actively participated in and helped to oversee important RSPO NEXT Certification for two (2) of our business units
developments and decisions within the RSPO. and was successful in becoming the first Company in Asia
Pacific to become RSPO NEXT certified. Nevertheless,
UP and the World’s First RSPO Certificate in 2008 upon successfully obtaining the RSPO NEXT Certificate,
it became clear that the early commitments made to
UP’s entire oil palm plantations in Malaysia were uptake palm oil with this higher sustainability standard
successfully certified in accordance with the RSPO within the RSPO disappeared with western CGMs and
Principles and Criteria on the 26th August 2008 other clients showing no interest. The RSPO NEXT has
thus becoming the world’s first producer of certified been carved out in such a way that it is based on fulfilling
sustainable palm oil. It subsequently conducted its the spirit of “Commensurate Effort”.
second cycle recertification in 2013 and a third cycle
recertification in 2017. Commensurate Effort in this sense obliges not just the
eligible growers to produce but also commits any eligible
For its Indonesian operations, UP had moved towards buyer such as consumer goods manufacturers or retailers
the RSPO Initial Main Assessment for part of our HGU to also fulfill their part of the shared responsibility,
area in December 2017 and successfully obtained the namely, to offtake or purchase RSPO NEXT Certified
certificate in November 2018. We anticipate to carry Palm Oil thereby not inducing growers these ever
out the RSPO Surveillance Audit 1 concurrently with stringent and high sustainability criteria only to find out
Scope Extension Audit for the newly acquired HGU area that there is no demand.
of 6004.15Ha in 3rd quarter of 2019. The Time Bound
Plan for all the areas being certified will be in tandem As there has been no demand for RSPO NEXT products
with the hectarage issued with HGU certificates by the in the market, UP has decided not to proceed with
Government of Indonesia. This is expected by 2020. RSPO NEXT Certification in 2019, even though we are
51
confident of fulfilling our commitment by going beyond Extension Assessment for newly acquired HGU area
the RSPO standard compliance. In addition, with the of 6004.15Ha was conducted on 9th August 2018 and
revised RSPO P&C Standards 2018 which has been awaiting issuance of the ISPO certificate.
voted through on 15th November 2018 we can see that
the RSPO Standards has moved closer to the RSPO Sustainable Palm Oil Transparency Toolkit (SPOTT)
NEXT Standards.
UP participated in the Sustainable Palm Oil Transparency
Malaysian Sustainable Palm Oil (MSPO) Certification in 2018 Toolkit (SPOTT) assessment conducted by Zoological
Society of London (ZSL). SPOTT is designed to measure
The Malaysian Sustainable Palm Oil (MSPO) standard is the transparency of Companies in public disclosures of best
a national certification standard created by the Malaysian practices and sustainability commitments via the RSPO
Government and developed with inputs from stakeholders Annual Communication of progress (ACOP), RSPO New
in the palm oil industry. First launched in November 2013, Planting Procedures (NPP) Public Notification, Company
it officially came into implementation in January 2015. It is Annual/Sustainability Report and Company Websites.
a mandatory certification and all RSPO certified millers and
growers should be certified by 31st December 2018. The key objectives of the SPOTT assessment are to promote
industry transparency and accountability to drive the
We are pleased to announce that all of our mills and estates in uptake and implementation of environmental and social
Malaysia have successfully obtained the MSPO Certificates best practices in high biodiversity impact sectors.
in September 2018.
SPOTT’s online platform provides a scorecard and detailed
Indonesian Sustainable Palm Oil (ISPO) Certification assessments of upstream companies based on public
disclosure of their operations, commitments and progress
The Indonesian Government established a mandatory towards the implementation of best practice.
certification scheme in 2011, namely the Indonesian
Sustainable Palm Oil Principles & Criteria (ISPO) to ensure United Plantations Berhad maintains an active engagement
that all producers within a few years will have to live up to and commits to collaborate with the Zoological Society
certain standards when operating in Indonesia. of London (ZSL) in the progress towards improving
sustainability reporting and enhancing a greater
Being mandatory, producers in Indonesia will have to transparency.
comply with the ISPO criteria and cannot hide behind the
voluntary RSPO scheme as members only. Our current status on SPOTT assessment as of November
2018 is 86.50% resulting in UP being ranked as number 5
The ISPO standard includes legal, economic, environmental amongst the 70 assessed Global Oil Palm Plantations (In
and social requirements, which largely are based on existing year 2017, the score was 81.90% and the rank as number 6
national regulations. The ISPO Initial Main Assessment amongst 50 assessed Global Oil Palm Plantations).
for our Indonesian Plantations has been conducted
concurrently with RSPO Initial Main Assessment in 2017 For further details on SPOTT assessment for palm oil
for a part of our HGU. Subsequently, the ISPO Scope companies, please refer to https://www.spott.org/palm-oil/
Bapak Panut Wahono at the Lada palm oil mill where he is responsible for the grading operations that help to track
52 crop ripeness standards.
Harvesting of tall oil palms remains a manual task
requiring much skill and dexterity.
53
Watering young seedlings at the pre-nursery.
Employees
(GRI 102-15, GRI 103-2, GRI 203-1, GRI 205-2)
The success and achievement of our Group is related to our employees, both past and present, who
loyally through hard work, strong leadership, honesty and respect have committed themselves to
serve and dedicate their career and livelihood at UP. Without our employees which are the Group’s
core assets, the success and stability of UP would not have materialised.
1. Code of Ethics & Governance 2. Equal Treatment (GRI 405-1, GRI 405-2)
Our commitment to adhere to ethical, honest Our commitment to maintaining a workplace
and transparent business practices and free from harassment of any kind, including
governance. harassment based on an employee’s race, colour,
religion, gender, national origin, ancestry,
disability, marital status and sexual orientation
Code of Conduct & Business Ethics It is our obligation to honour and respect past and present
employees who since 1906 have upheld our core values and
A key element in UP’s sustainability framework is our Code focused on doing things right. Our employees are our core
of Conduct and Business Ethics. We implement responsible assets and human capital management is considered an
and ethical business policies and practices in all aspects of integral and vital part of our operations.
our operations.
Total number of incidents of discrimination and corrective
For further details on Code of Conduct and Business actions taken for 2018
Ethics, please refer to http://www.unitedplantations.com/ Total number of reported incidents of
sustainability/pdf/Code%20of%20Conduct%20&%20 NIL
discrimination
Business%20Ethics%20Policy.pdf
Corrective actions taken NIL
Personal Data Protection

(GRI 418-1) Gender Policy
UP has a Personal Data Protection Policy to regulate the In line with this policy, we endeavour to prevent sexual
collection, processing and usage of personal data in the harassment and all other forms of violence against women
ordinary course of its business. This is to ensure that personal and workers in the workplace or in the course of an
information whether such information is collected on paper, employee’s work.
stored in a computer data base system or recorded on other
materials are dealt with appropriately, and adequate security For further details on Gender Policy, please refer to http://
measures are accorded to such personal information under www.unitedplantations.com/sustainability/pdf/Gender%20
the provisions of the Personal Data Protection Act 2010. Policy.pdf
Whistle Blower Policy Gender Committee

(GRI-102-16, GRI 102-17)
Our Gender Policy that is designed to protect our female
We are committed to high standards of ethical, moral and employees. We have established Gender Committee
legal business conduct. This policy aims to provide an avenue who includes representatives from labour unions and
for employees, that they will be protected from reprisals or management to promote female participation and
victimization for whistle blowing. This policy is intended advancement in the workplace, handle sexual harassment
to cover protection for the whistle blower when raising complaints and provide support for victims. When a
concerns regarding UP, such as concerns regarding: harassment case is reported, informally or formally, the
relevant committee investigates to determine if further
o Incorrect financial reporting sanctions are needed or if law enforcement action needs to
be taken.
o Unlawful activity
UP promotes diversity in a working environment where
o Activities that are not in line with UP’s policy including there is mutual trust and respect and where everyone feels
the Code of Business Conduct; and responsible for the performance and reputation of our group.
We will recruit, employ and promote employees on the sole
o Activities, which otherwise amount to serious improper basis of the qualifications and abilities needed for the work to
conduct be performed. Meritocracy is a Hallmark of our Group.
For further details on Whistle Blower Policy, please refer We are committed to diversity and have an equal employment
to http://www.unitedplantations.com/sustainability/pdf/ opportunity policy. Below is the summary of our Group’s
Whistleblower%20Policy.pdf employees as well as gender mix.
55
UP
Indonesia UP Malaysia UP Group
(PTSSS)
Percentage Female
Employees
28.8% 10.9% 14.2%
Percentage Male
Employees
71.2% 89.1% 85.8%
UP Group
Employees – Year 2016 to 2018

(GRI 102-8, GRI 202-2, GRI 401-1)
2018 2017 2016

UP Bhd 4,936 5,223 4,482
Unitata Bhd 282 242 213
Butterworth Bulking Installation Sdn. Bhd. 16 15 16
PT SSS1, Indonesia 1,274 1,345 1,215
PT SSS2, Indonesia - - -
Total 6,508 6,825 5,926
Category of Employees (Malaysian) as at 31 December 2018

Employee Gender
Age Classification Ethnic Classification Total
Classification Classification
Male Female 18-30 31-50 >50 Malay Chinese Indian Others
Directors 2 - - - 2 - 2 - - 2
Management 108 20 29 65 34 21 25 82 - 128
Staff 188 132 90 147 83 91 6 217 6 320
Workers 550 368 211 398 309 234 1 678 5 918
Total 848 520 330 610 428 346 34 977 11 1,368
Category of Employees (Other Nationalities) as at 31 December 2018

Employee Gender Age Classification Ethnic Classification Total
Classification Classification
Male Female 18-30 31-50 >50 Others Indonesia Nepalese Indian Bangladeshi
Directors 2 - - 2 - 2 - - - - 2
Management 13 2 3 7 5 2 13 - - - 15
Staff 43 12 16 39 - - 55 - - - 55
Workers - PTSSS 859 347 331 816 59 - 1,206 - - - 1,206
Guest Workers -
3,818 44 1,760 2,072 30 - 800 26 720 2,316 3,862
Malaysia
Total 4735 405 2,110 2,936 94 4 2,074 26 720 2,316 5,140

* Danish & British Grand Total = 6,508
We actively promote the employment of women at For Grievance Redressal Procedure for Sexual
UP. We recognise that some work on our plantations Harassment in the Workplace, please refer to http://
is potentially more suitable for men due to the heavy www.unitedplantations.com/sustainability/community_
physical nature of the tasks. grievance_harassment.asp
While male workers perform tasks including harvesting Total incidents of sexual harassment reported and
fresh fruit bunches, crop collection and evacuation to corrective actions taken for 2018
the railway cages for transport to the mills, women are (GRI 412-3)
assigned work including weeding, gardening and loose
fruits collection. We provide crèches, playgroup classes Total incidents of sexual harassment reported NIL
and kindergarten at all operating sites to support our
Corrective actions taken NIL
female employees and their children.
56
3. Human and Workers’ Rights Guest Workers Policy
(GRI 401-2, GRI 402-1)
We consider our foreign workers as guest and they are
Human resource practices which respect partners in our business along with our local workers.
universal human rights, including prohibiting
the use of child or forced labour in our operations For further details on our Guest Workers Policy,
please refer to http://www.unitedplantations.com/
sustainability/pdf/Guest%20Worker%20Policy.pdf
UN Guiding Principles On Business And Human Rights
On 16 June 2011, the United Nations Human Rights

Council endorsed the Guiding Principles on Business
and Human Rights. In this context, UP have in place the
following policies:
o Human Rights Policy
o Guest Workers’ Policy
As per our continuous improvement efforts, we are

focusing on retraining (reach, teach and remind) all
our employees, customers, contractors, suppliers and Guest workers have free access to their travel documents.
communities on the core values which we are fully
committed to. Guest Workers’ Passport Lockers
We have constructed a room containing passports lockers

within the plantations to enable our guest workers free
access to their passports without any restrictions at
Jendarata and Ulu Bernam Estate.
During the launch of The Malaysia Chapter of the UN
Sustainable Development Solutions Network (UN- Since its construction and evaluation, the Company
SDSN) in 2015, UP was mentioned as one of the has decided to replicate in other estates in stages.
sustainable development solution initiatives being Currently on other estates, passports of guest workers
undertaken in Malaysia. are voluntarily submitted with a written consent from
the guest workers to the respective management for safe
In the SDSN Malaysia Chapter, UP was identified as a custody in the estates safe and is readily made available
“Business with a soul”. This acknowledgement was upon request.
indeed pleasing and indicates our commitment to
being a leader in economic, environmental and social Guest Workers Repatriation and Leave
sustainability.
With 85% of our workforce being guest worker, there is
Human Rights Policy a frequent turnover of employees within our Group. We
strongly promote freedom of movement which can be
United Plantations Berhad is committed to the protection seen in the table above.
and advancement of human rights wherever we operate.
Our human rights policy is based on our core values During 2018, 841 of our guest workers have been
on Safety and Health, Environmental Stewardship and repatriated upon completion of their employment
Respect for people. tenure. Another 444 guest workers went back on leave
to their respective home countries with the majority
For further details on our Human Rights Policy, returning back to resume their employment at UP.
please refer to http://www.unitedplantations.com/ Nevertheless, 82 guest workers that had gone on leave
sustainability/pdf/Human%20Rights%20Policy.pdf did not return.
Total number of guest

Repatriation and Leave during the year 2018
workers (%)
Total number of guest workers 3876 100
Repatriation 841 21.70
Gone on leave 444 11.46
Gone on leave and returned 362 9.34
Gone on leave and didn’t return 82 2.12
57
Minimizing the Financial Burden for Guest Workers communications to reduce exploitation, however this
proposal has been put on hold until the release of new
We are committed to ensuring that exploitation of our recruitment policy by the Malaysian Government.
guest workers have no place in our business operations.
As an alternative, we are planning to establish call centres
We conduct assessments, interviews and spot checks to in the respective source countries which will act as a bridge
identify gaps and potential risks within our operations between the workers from villages to the main accredited
and develop mitigation plans and provide remedial recruiting agents in order to disseminate the job scope at
actions. the Plantations and conduct pre-departure briefings. It will
also minimize the risks of sub-recruiting agents charging
Our guest workers are from Indonesia, Bangladesh, additional recruitment costs on the guest workers.
India and Nepal which constitute 85% of our workforce
in Malaysia, as such our challenges are to identify and Guest Workers’Verification by HRESH Department
understand human rights impacts on our diversified
workforce within our Group. From our assessments, we The HRESH Team verifies each and every guest worker
prioritise our implementation plans and focus on the on arrival to ascertain the recruitment supply chain and
risks to the vulnerable groups. expenses from respective source countries until the
arrival in Malaysia.
We identified that recruitment practices relating to guest
workers may be vulnerable to exploitation at the source Appropriate translators are engaged on need basis during
country. the interviews. This exercise is done to add credence for
responsible sourcing within our supply chain.
Recruitment Practices
Paying fair wages and employees benefits
We recruit guest workers directly through the appropriate (GRI405-2)
government approved channels as below:
All employees of UP in Malaysia receive at least the
o Indonesians- Indonesian Embassy –FWCMS-KDN minimum wage set by the Malaysian Government
(Minimum Wages Order 2018), RM1,100/- per month
o Indians-E-Migrate System –FWCMS-KDN with effective from 1st January 2019. We practice gender
equality policy on wages payment and remuneration for
o Nepalese –Nepal High Commission –FWCMS- all of our employees.
KDN
The average earnings of our workers supersede the minimum
o Bangladeshis – Awaiting new recruitment policy by wages by more than 50% as reflected in the table below.
Malaysian Government
For our plantations in Indonesia there is a fixed minimum
*FWCMS - Foreign Workers Centralised management wage and this is revised annually by each provincial
Services by Government of Malaysia government. The company follows the minimum wage
agreements and all new guidelines or revisions to the
*KDN - Kementerian Dalam Negeri/Ministry of Home existing agreements are communicated to employees.
Affairs of Malaysia Percentage of Employees (Full attendance) Received
Local Minimum Wages
*E-Migrate system by Government of India (GRI 202-1)
We do not charge any recruitment fees to reduce the Male Female

financial burden on our guest workers. We planned Malaysian operations 100% 100%
to establish our Company’s Information Centre at
the source country of our guest workers, to facilitate Indonesian operations 100% 100%
2018 2017 2016

Total Average Earnings
per worker per month
RM 1,595 RM 1,592 RM 1,472
– UP Group Plantations
(Malaysia)
IDR 3,767,903 IDR 3,391,159 IDR 2,567,777
- UP Group (Indonesia)
- Permanent Workers
IDR 3,276,675 IDR 2,409,208 IDR 2,566,166
- UP Group (Indonesia)
- Temporary Workers
58
Wage payment records are countersigned by the Freedom to form a Union
workers to acknowledge receipt and to confirm that (GRI102-41, GRI403-1)
they understand how wages are calculated. In Indonesia,
the company in accordence to the labour law gives an Employees and workers have the rights to form and
annual bonus to celebrate the holidays depending on become members of labour unions. Through unions,
their religion, called Tunjangan Hari Raya (THR). workers have the right to carry out collective bargaining
as permitted under Malaysia and Indonesia laws.
With the report published by Amnesty International,
on 30 November 2016, targeting various plantation Minimum Notice Periods Regarding Operational Changes
companies in relation to Human Rights violation within (GRI402-1)
the plantation sector, it calls for diligent compliance
with all relevant laws in this area. In this connection, we United Plantations Berhad is a member of MAPA (Malayan
are increasing awareness by retraining and conducting Agriculture Producers Association) which has collective
audits within all operational areas of our group. agreements with NUPW (National Union of Plantations
Workers) and the All Malayan Estates Staff Union
The results of these measures are being monitored (AMESU) Employees and workers have the rights to form
and will be incorporated in our future reports in our and become members of labour unions. Through unions,
efforts for continuous improvements. In Indonesia the workers have the right to carry out collective bargaining as
traditional practice of wives assisting their husbands permitted under Malaysia and Indonesia laws.
in harvesting have ceased by employing them into the
estates’ permanent workforce. The Company also engages with the Food Industry
Employees Union for refinery workers. The collective
Benefit Provided to Seasonal Temporary Workers agreements are renewed every three (3) years where
(GRI 401-2) either party may serve on the other three (3) months’
written notice to negotiate on new terms and conditions
Seasonal temporary workers are offered employment with of employment and other related matters but no such
appropriate insurance coverage and medical facilities. notice shall be served earlier.
Banking facilities The timely and meaningful collective bargaining allows

the affected parties to understand the impacts of the
UP with the collaboration of Bank Simpanan Nasional changes. It also gives an opportunity for both parties to
has initiated the Automated Teller Machine (ATM) work collectively to avoid or mitigate negative impacts as
services at Ulu Bernam and UIE Estates, which provide much as possible.
workers with personal banking services in a swift,
convenient and secure manner. Western Union visits Consultative practices that result in good industrial
selected estates to provide remittance services for the relations help to provide positive working environments,
convenience of our guest workers. reduce turnovers and minimize operational disruptions.
Banking facilities provided within the premises of the estate Guest workers arriving at the Kuala Lumpur International
for the conveniences of our workers. Airport being greeted and briefed by UP’s Sr. Manager of
HRESH, Mr. Norhazizi Nayan.
UP Group (Malaysia) 2018 2017 2016

% of staff as members of All Malayan
76 76 -
Estates Staff Union (AMESU)
% of workers as members of National
16 14 23
Union of Plantations Workers (NUPW)
% of workers as members of Food
45 57 -
Industry Employees’ Union
UP Group (Indonesia) 2018 2017 2016
% of workers as members of Union* 6 5 100
*In Indonesia, the union committee has been re-established and membership drive is in progress.
59
Social Amenities
4. Social Care and Workers’ Welfare
Our commitment towards providing quality The Community Halls on our estates continue to
housing and social amenities and to maintain be put to good use providing our employees with
the highest possible welfare standards for the vastly improved facilities for special functions such as
families of our workforce weddings, engagements and other religious ceremonies.
Several new staff quarters and modern employees’houses

Social Commitments were built during 2018 in line with the Company’s goal
to provide its employees with the best housing facilities
Providing and improving social amenities remains within the industry.
very much a hallmark within our Group. Continuous
improvements were made during 2018 to maintain the Upgrading of our guest workers living quarters which
highest possible welfare standards for our workforce. our Company embarked on in 2010 has progressed
well with the first two apartment blocks completed in
For babies and young children UP continues to provide 2011. These have provided the finest living facilities
and maintain crèches for personalised childcare thereby in our industry with a living area of 150m2 per unit
ensuring that employees are comfortable about their encompassing 3 bedrooms, 1 kitchen, 2 bathrooms and a
children while at work. large hall and patio. More than Two (2) additional terrace
apartment blocks have been built in UIE providing first
Today, our Group has 9 Primary Schools and 7 class housing facilities for 64 employees during 2018.
Kindergartens which are maintained by the Company,
providing education for more than 500 children ranging Sporting Activities
from age of 5 to 12 years. Bus subsidies for school children
above the age of 12 years old are also provided for. We encourage our employees to participate in sporting
and social activities by providing facilities such as
Places of worship for our employees, Group Hospitals football fields, community halls, badminton courts,
& Clinics and an Old Folks Home to care for the aged tennis court and futsal court etc. During the year several
and the homeless as well as a fully operational Danish intercompany badminton and football tournaments
Bakery are also a part of UP’s care and commitment were arranged providing fun and team work outside
towards the wellbeing of its employees. office hours.
In addition, 49 scholarships were granted to children In addition, annual sports days are held at selected
of our employees during 2018 thereby enabling these estates to enhance friendship and community spirit
students to pursue their tertiary studies. through sports.
School children celebrating Independence Day at Jendarata Estate on the 31 August 2018.
60
UP Football Team, Jendarata FC emerged champions in The current bakery manager Mr. Jayarama Reddy and
the Lower Perak District League Championship held on his team, do not only cater for the employees and the
12 January 2019, after a number of tough matches to the public but also is a proud supplier of high quality bread,
delight of supporting fans and players. pastries, cakes and biscuits to the many guests who visit
United Plantations as well as certain outlets throughout
Bernam Bakery Malaysia.
Bernam Bakery located on Jendarata Estate UP, 160km In January 2018, Mr. Vagn Nielsen, a Master Baker and
north of Kuala Lumpur, renowned for its Danish pastries a retired lecturer from Holstebro Bakery School in
and hand-made cookies, was the brainchild of our late Denmark was invited to Bernam Bakery to train and
Tan Sri Dato’ Seri B. Bek-Nielsen. work together with our local bakery team to help ensure
that the quality in the final product is assured and found
It was established in 1982, purely out of necessity, to to be consistent.
teach the local employees how to make good wholesome
bread, for the local community, who found the quality Mr. Vagn Nielsen is a former student and friend of the
of bread they bought from various dealers to be inferior, late Mr. Robert Pedersen and it is therefore most pleasing
thus a scheme was created to enable the employees of that he has agreed to be associated with Bernam Bakery
the plantation to purchase quality bread. as a visiting Bakery Adviser together with his wife Mrs
Else Nielsen going forward.
The bakery, which is equipped with the most modern
Danish machinery, was constructed within five months. United Plantations Berhad – Old Folks Home
Tan Sri Dato’ Seri B. Bek-Nielsen enlisted the help of his
good friend, the late Robert G. Pedersen, a master baker Our corporate culture is deeply embedded in our
and retired lecturer from Holstebro Bakery School in traditional values and legacy the Company’s founders
Denmark, to train our local employees on the traditional introduced nearly 113 years ago.
art of baking original Danish bread and cookies on a no
cost basis. It was amazing to see how the bakers became The Old Folks Home was officially opened by Minister
proficient within 6 months, thus providing our labour of Labour, YBhg Tan Sri V. Manikavasagam on 17 March
force with wholesome and nutritious secret recipes of 1967 on Jendarata Estate and is the only one of its kind
bread and cookies of excellent quality, using shortenings in this industry.
produced by our refinery, Unitata.
Set in a peaceful environment, it caters for the retired
The transfer of Danish Technology in the Baking Industry, and aged employees who are given free boarding, food
took many years of dedicated work under the watchful and medical care. A full time caregiver is also provided
eyes of the master baker. for the Home.
The Bakery Manager of Bernam Bakery, Mr. Jayarama Reddy and in the centre, the Danish Master baker Mr. Vagn Nielsen and his wife
Mrs Else Nielsen who periodically visit Bernam Bakery to help uphold the quality of baking and transferring new technologies and
practices on to the employees at the Bakery.
61
Fostering goodwill amongst local communities through sports.
62
Places of worship provided for all employees of different faith.
63
Benevolent Fund payments to our long serving employees in appreciation for their dedicated and loyal services.
Annual Benevolent Payments who are loyal and have served the Group for 10 years
and above and in addition to the workers entitlement
Annual benevolent payments as well other compassionate under their respective collective agreements. Over the
and educational payments made by the Group to workers last 3 years, an average of RM295,000 per annum was
amounted to RM1,036,556 during 2018. The payments paid out from this scheme.
made through our various Benevolent and Educational
Schemes are as follows: The objective of the 2 education and welfare funds
to grant scholarships for suitably qualified workers
1. UP Workers Benevolent Retirement Scheme children or dependants, and other benefits such
(established in 1985) as welfare and medical costs to deserving cases
irrespective of race, religion or creed.
2. UP Education and Welfare Fund (established in 1986)
The following tables summarises the annual benevolent
3. UIE (M) Education and Welfare Fund (established in payments made in the last 3 years. During the year, 66
1997) retired workers received retirement gratuity, 49 school
children received scholarships, 383 school children
The objective of the UP Workers Benevolent Retirement received bus subsidies and there were 93 beneficiaries
Scheme is to provide retirement benefits to workers from donations given by the Group.
Social Commitments of the Group

2018 2017 2016
Grand Total RM
RM RM RM
Hospital & Medicine for Employees, Dependents 2,424,918 2,400,609 2,229,584 7,055,111
& Nearby Communities
Retirement Benevolent Fund * 531,338 101,866 252,500 885,704
298,841 298,269 299,824 896,934
Education, Welfare, Scholarships & Other
Bus Subsidy for School Children 206,377 215,545 244,916 666,838

External Donations 127,359 120,008 302,997 550,364
New Infrastructure-Road, TNB and 772,903 1,132,292 298,461 2,203,657
Water–Supply for domestic use
Employee Housing 7,134,389 11,879,818 5,937,022 24,951,229
Infrastructure Projects, Buildings, Community 2,508,547 6,773,589 1,502,571 10,784,707
Halls, Places of Worship
Provision of Social Amenities 5,158,811 6,195,586 5,396,162 16,750,559
Total 19,163,483 29,117,582 16,464,037 64,745,102
64
Environmental Commitments of the Group
2018 2017 2016
Grand Total RM
RM RM RM
6,680,501 5,147,810 6,395,566 18,223,877

Environment Friendly Operational Activities
Environment Friendly Project (Biogas, Biomass- 1,577,752 9,030,692 1,346,254 11,954,698

others)
758,797 658,062 584,061 2,000,919
Biodiversity & Conservation (Forest reserve,
Endangered Tree Species Projects, Collaboration
with Copenhagen Zoo)
Total 9,017,050 14,836,564 8,325,881 32,179,494
* The above payments are in addition to the regulatory contributions by the Group to the Employees’ Provident Fund, Social
Security Contributions and other benefits.
Training and Development of Employees annual trainings programmes with the participation of
(GRI 404-1, GRI 404-2, GRI 410-1, GRI 412-2) neighbouring communities.
In UP our human capital is indispensable and our approach An employee who knows that he needs to wear his
is “Reach, Teach” as well as “Reach and Remind’. Training Personal Protective Equipment (PPE) during his operation
schedules are prepared for our employees annually in the at the site without being monitored/presence of his
respective Estates and other Departments to ensure that superiors is what internalizing the awareness altogether.
the various trainings are being carried out on a regular Nevertheless, the trainings need to be constantly carried
basis throughout the year. out as human nature also tends to take things for granted.
This is monitored and verified internally by the HRESH The competence and skills of the Group’s employees
team and also through external auditors during RSPO/ are the main contributors to Operational Success. This,
MSPO/ISPO annual audits. As for Staff and Executive undoubtedly, also helps them to enhance their capabilities
levels, trainings are generally conducted on a group basis. and build capacity. Life-long learning, through training
These trainings cover Occupational Safety & Health, programme, conferences and seminars which are relevant
Human Rights, Best Agriculture & Management Practices to the Group’s businesses are identified on an going
and Industrial Laws and others. needs basis and the Company allocates a dedicated
training budget to support the continuous development
With 85% of our workforce being guest workers and of our employees.
with 20% annual turnover it is imperative that on the
job trainings and re-trainings are constantly conducted. The training’s effectiveness transpires in the awareness of
The scope further widens for certain type of categories, our employees during unannounced internal audits and
for instance, fire drills are being held periodically as per performance monitoring.
The Chief Executive Director of UP addressing all officers within the Group during the annual field day held at Ulu Bernam Estate on 22
September 2018.
65
5. Occupational Safety and Health
(GRI 403-4)
We are committed to securing the safety
and health of all our employees at work and
strive to maintain a safe and healthy working
environment for our employees, customers and
public
We value our work place safety and health as being

Training of employees working with pesticides is a continuous and
of paramount importance for all our employees and
weekly process in United Plantations.
our respective Managers/Heads of Departments are
responsible in implementing this policy. Chemical Health Risks Assessment (CHRA)
For further details on our Occupational Safety And Health CHRA and Medical Surveillance programmes are regularly
Policy, please refer to http://www.unitedplantations. carried out for all employees engaged in handling pesticide
com/sustainability/pdf/Occupational%20Safety%20 and other chemicals. In this context, training programmes
&%20Health%20Policy.pdf in the use of personal protective equipment for workers
exposed to hazardous chemicals are regularly conducted
Estate Group Hospitals and documented and have been a vital part of our operations
for many years. Audiometric tests and fire drills are also
The Company operates two well-equipped estate group conducted on a regular basis. These are kept up to the mark
hospitals in Malaysia and a modern Health Care Centre by the periodic workplace inspections carried out by the
in Indonesia with trained resident Hospital Assistants Company’s Safety and Health Officers. CHRA renewal are
supervised by Medical Doctors. conducted every five years and we are on schedule.
Regular inspections of the employees’ housing are made Hazard Identification, Risk Assessment and Risk Control
by the Hospital Assistant to ensure that sanitation, (HIRARC)
health and drainage standards are maintained according
to the Company’s policies. In recent years, HIRARC has become fundamental to the
planning, management and the operation of a business as a
Human Resources and Environment, Safety & Health basic risk management practice. In line with our approach of
(HRESH) Department preventive measures as a way of providing safe workplaces,
we have conducted HIRARC on all our operations. With
The HRESH Department is responsible for formulating HIRARC, we were able to identify hazards, analyse and
and developing policies and policies and procedures assess their associated risks and then apply suitable control
which are aligned with objectives and core values of the measures. We are pleased to report further positive changes
Group in respect to managing people, workplace culture in our working environment with the introduction of
and the environment. HIRARC. Every three years or whenever there are changes
in the process or activities the HIRARC shall be reviewed.
The key HR functions include recruitment, selection, The records shall be maintained for at least three years
training, succession planning, welfare and safety. (in some cases legislative requirement will determine the
minimum time to retain records).
Besides managing HR, the Department is responsible
for driving the sustainability agenda of the Group, which Fatal Accident Rate (FAR)
includes ensuring that the Group conducts its business (GRI 403-2)
in a responsible manner that adheres to global standards
and meets stakeholders’ expectations. Fatal Accident Rate calculation is as per the below
formula(Malaysian OSH Act 1994 JKKP8)
The team also engages in strategic partnerships to
strengthen the sustainability practices of the Group. Fatality Rate @
Fatal Accident Rate (FAR) =
The Company’s Safety and Health Officer makes periodic
workplace inspections. Safety Committee meetings are No. of fatalities x 1000
held in accordance with Department of Safety & Health Annual average of No. employees
(DOSH) regulations.
Our aim is to avoid all incidents that put our employees
Safety operating procedures and system checks for all at risk and to achieve zero fatalities. Every fatality is
processes and equipment are in place and product quality followed by a thorough review of the cause and action
standards are stringently maintained in a responsible undertaken to eliminate the factors involved. All
manner. reviews have been reinforced with continued efforts in
66
the training and retraining on the use of appropriate
6. Fighting the Haze and Preventing Fires
protective equipment in order to minimize risks. Every
tragic accident is formally investigated and the Group There shall be no use of open burning/fire in
ensures that the necessary bereavement arrangements new or ongoing operations for land preparation,
are handled compassionately. Compensation under the land management, waste management, or
Government’s ‘Foreign Worker Compensation Scheme’ any other reason other than justified and
or SOCSO are provided to the bereaved family. documented cases of phytosanitary emergency.
Fatal Accident Rate (FAR)
In 2014 and 2015, South East Asia experienced some of the
2018 2017 2016 worst incidences of haze caused by the widespread forest
Fatal/1000 Employees* 0.19 0 0.21 fire in Indonesia, which were exacerbated by the El Niño
* For Malaysian operation only. weather phenomenon.
Lost Time Injury Frequency Rate (LTIFR)
(GRI 403-3) The causes of fires vary greatly. The impacts can be
catastrophic, including loss of life and loss of primary
LTIFR refers to Lost Time Injury Frequency Rate, the biodiversity. We understand that fires present long-term
number of lost time injuries occurring in the work place commercial risks and potential costs are high.
per 1 million man-hours worked. From the table below
(year 2018) shows that 6.56 lost time injuries occurred on Wider risks also include threats to national climate change
our jobsite every 1 million man-hours worked. goals, environmental sustainability and poverty reduction.
Lost Time Injury Frequency Rate calculation is as per the Zero Burning Policy
below formula (Malaysian OSH Act 1994 JKKP8)
We will be conducting a series of community
Frequency Rate @ workshops to educate our local communities about the
Lost Time Injury Frequency Rates (LTIFR) = environmental and social consequences of slash-and-
burn farming, as well as to promote alternative methods
No. of accident x 1,000,000 of land clearance.
Total man-hours worked
Our goal is the total eradication of fire as a means to
In 2018, 49 % of accidents involved harvesting clear land by the local communities. We conduct periodic
operations (thorn pricks, debris falling into eyes, fire drills to ensure the preparedness of our emergency
cutting stalk, fronds falling on body, 16 % commuting response team (ERT) as well as functionality of the
accidents and 35 % others (factory operations, tractor firefighting equipment. This year we did short period
and lorry related, slipped and fall, hand tools related as of drought in Indonesia. There were some isolated fire
well as sundry works). We are introducing a behavioral incidents which burnt approximately 30 Ha of grassland.
safety approach to further enhance the safety culture in However the fire was immediately extinguished by our
the Group. ERT in PTSSS.
Lost Time Injury Frequency Rate (LTIFR) Hectares Burnt In Fires
2018 2017 2016 2018 2017 2016
Frequency/Million Hours* 6.56 9.04 14.3 Non Planted 31.20 6.00 30.89
* For Malaysian operation only. Planted 0.55 1.16 107.14
Total 31.75 7.16 138.03
Workers with high incidence or high risk of diseases
related to their occupation in 2018 Outer Ring Range of )500 m
(GRI 403-3)
Workers with high incidence of 2018 2017 2016
Workers with high risk of diseases
diseases
1 )1
Outer ring )500
NIL NIL *Small farmer’s Nil *Small farmer’s
m (Ha)
field field
Fire drill conducted in Runtu Estate with external stakeholders. Training session conducted for our Emergency Response Team.
67
A pair of majestic Changeable Hawk Eagle (Nisaetus
cirrhatus) spotted resting on a forest tree at PT SSS.
68
Environment
(GRI 102-12, GRI 102-13, GRI 102-15, GRI 103-2)
UP strives towards being recognized as the leader in sustainable agricultural practices, environmental
performance whilst safeguarding natural resources and respecting the balance between economy
and ecology. We focus on continuous improvement in order to minimize waste and our overall
carbon footprint and through investments and a dedicated Group Sustainability Committee, we have
introduced policies to break the link between palm oil and deforestation.
UP – A responsible producer of Palm Oil Environment Footprint
As a responsible producer of Palm Oil, UP strives towards

being selected as a preferred supplier of superior quality,
certified and segregated palm oil traceable back to the
plantations.
We fully adhere to the principles & criteria of the RSPO UP is very much aware of the footprint it leaves on the
and have voluntarily incorporated higher standards that environment. Our group therefore constantly strives
amongst others ensures: towards reducing variables that impact the environment
negatively. Focus on reducing GHG, energy, water and
o No deforestation waste is therefore a vital part of UP’s environmental
policy.
o No new development on peat soils
The following pages describe UP’s various environmental
o Reduction of Greenhouse Gasses (GHG) projects, policies and commitments in place as well as
progress made.
o Increased focus and respect for local and indigenous
communities including smallholders and benefit of Environment Policies in place
their socio-economic development.
i) Zero-burn policy (1989)
We are committed to Responsible Agricultural Practices
and strive towards finding the right balance between ii) No primary forest clearing policy (1990)
Economic, Social and Environmental aspects of our
business. iii) No bio-diesel production /supply policy (2003)
Committed to Continuous Improvement iv) No HCV forest clearing policy (2005)
UP’s objective is to become even more environmentally v) Methane capturing policy (2006)
friendly by being committed to continuous improvement. In
order to achieve progress various environmental projects are vi) No Paraquat use policy (2010)
implemented, consumption and emissions are monitored,
and best practices are identified by benchmarking aspects vii) No new planting on peat policy (2010)
of our operations internally and externally.
viii) High Carbon Stock Assessment & Land Use
To further emphasise our commitment on sustainability Change Analysis for new plantings to prevent
UP has since becoming the World’s first RSPO certified deforestation (2014)
plantations in 2008 as well as achieving, in 2017, the
World’s second RSPO NEXT Certification and the For additional information, please refer to our website:
first for Asia Pacific and Africa, introduced additional www.unitedplantations.com
environmental policies and focused on further improving
our good agricultural practices that go beyond the
RSPO’s existing principles and criteria.
Sustainable Development
Economic Social
S.T.T.T*
Environmental
*Sustainability through Transparency, Traceability & Trust 69

The Lima Blas jungle sanctuary which was set aside in 1926.
7. Biodiversity and Conservation o We want to ensure that our agricultural operations

(GRI 304-2, GRI 304-3, GRI 304-4) comply with the following criteria:
Efforts undertaken by the UP Group to conserve
- No development on high carbon stock forests (HCS)
jungle reserves and wildlife sanctuaries as well
as promoting green corridors as part of our
- No development on high conservation value
commitment to the environment
forest areas (HCV)
- No new development on peatland regardless of

UP receives a Special Recognition Award for Land Use depth
and Biodiversity efforts
- Not to operate or develop within international or
During an event hosted by PricewaterhouseCoopers nationally designated protected areas
(PWC) on 29 January 2019, it was gratifying that years
of environmental focus resulted in UP receiving a - Compliance with all relevant laws and National
special recognition award for its efforts on land use and Interpretation of RSPO Principles and Criteria.
biodiversity. Continuous focus to develop and strengthen
this area of importance will continue going forward. We strive to maintain an open and dynamic approach
towards continuous improvements in respect of
Environmental and Biodiversity Policy HCV, HCS and GHG Emissions to strengthen our
policy on No Deforestation.
We at United Plantations Berhad are committed to
sustainable development through protection of the o Continuously working to mitigate our water footprint
environment and conservation of biodiversity. Our related to our operations, maintaining buffers along
objectives: - natural waterways, harvesting rainwater, frugal
water usage, monitoring of its quality and judicious
o Conducting our operations under the best principles use of pesticides and weedicides.
of agriculture, that is compatible with the natural
environment and in full support of Integrated Pest o We are committed to reduce and phase-out
Management techniques and Best Management chemicals that fall under the WHO Class 1A & 1B
Practices for all over areas including existing and Stockholm or Rotterdam Conventions. We will
plantations on peat. continue working with stakeholders to determine
and implement alternative pest control strategies
o Promoting the conservation and development of to totally phase-out these chemicals when effective
biodiversity within our group of plantations. and suitable alternatives are available.
70
o Continuously working on sound soil management including lowland forest, freshwater swamp forest,
e.g. determining appropriate amount and tropical heath forest which is called “kerangas”, peat
composition of nutrients based on annual leaf swamp forest, mangrove forest, and coastal forest.
nutrient analysis, empty fruit bunches systematically
applied in field, planting of leguminous cover crops. Tanjung Puting was originally declared as a game reserve
o Continuously working towards a dynamic and in 1935 and a National Park in 1982. It covers a total area
innovative waste management and utilization of 415,040 hectares.
system aimed towards zero waste and recycling.
The best known animals in Tanjung Puting are the
o Continuously focusing on promoting new orangutans, made famous through the long-term efforts
technologies with low environmental impact as well of the Orangutan Research and Conservation Program
as reducing greenhouse gas (GHG) emissions. (predecessor to OFI), based at the landmark Camp Leakey
research station.
o Removal of native tree species and capturing,
poaching and hunting of animals, especially Tanjung Puting is also the habitat for proboscis monkeys as
Endangered, Rare and Threatened species are well as clouded leopards, civets, Malaysian sun bears, mouse
prohibited. However, we respect the traditional deers, barking deers, sambar deers, and the wild cattle
rights of indigenous groups and communities to known as banteng. Tanjung Puting hosts over 230 species
hunt in legal, non-commercial and sustainable of birds, including hornbills, deep forest birds, and many
manner without involving Endangered, Rare and wetland species.
Threatened species and jeopardizing long-term
viability of the species. Endangered and Protected Species
o We will strive to commit our employees, contractors, UP has a policy of “zero tolerance” to the killing of
suppliers, trading partners and stakeholders to endangered and protected species, herein also orang-
adhere to this policy and thereby focus on traceability utan, Pongo pygmaeus.
within our supply chain.
Staff that are directly or indirectly involved with the
Adjacent Protected and Conservation Areas killing of and/or solicitation of killing, trading and
(GRI 304-1) harvesting of endangered and protected species, be
it plants or animals, will be dismissed immediately. To
Our Kumai Estate in PTSSS is approximately 2km away the best of our knowledge, illegal killing and capture of
from the famous Tanjung Puting National Park which orang-utans has not taken place on any of the properties
is known to have a large diversity of forest ecosystems, under the legal management /jurisdiction of UP.
71
Biodiversity and Partnership o Biodiversity (Fauna and Flora)
COPENHAGEN o Habitat and Ecosystem
Conservation of jungle reserves and wildlife sanctuaries o Forestry and Rehabilitation
as well as promoting green corridors are examples of o Hydrology and Limnology
our commitment to the environment. To date, United o GIS and Mapping
Plantations has set aside more than 7,500 Ha of land for o Integrated Pest Management
conservation purpose representing approximately 16% of o RSPO and ISPO
our total planted area in order to encourage biodiversity o Protection and Monitoring
and wildlife on our estate. In Indonesia, UP has set o Community Outreach
approximately 40% of its land concession for the purpose
of conservation. Biodiversity Department
Riparian reserves are maintained to preserve flora and The completion of the BioD office took place in a very
fauna, provide wildlife corridors, ensure water quality and short period of time and this remarkable achievement
prevent erosion. In order to develop effective conservation is a testament to the hard work and commitment by all
strategies, we need the assistance of experts in these involved. The new BioD office was laid as part of the Lada
fields who have established a series of collaborations Estate field office and was officially opened in September
and partnerships. One such partner is Copenhagen Zoo 2011, when the BioD made a short presentation to Her
(CPH Zoo) which was initiated in 2007 and officially Royal Highness Princess Benedikte of Denmark, UP’s
established on 1 October 2010 through a Memorandum of senior management, Copenhagen Zoo’s vice-director
Understanding (MOU) between UP and CPH Zoo. Mr. Bengt Holst, and other prominent guests at the new
auditorium.
In order to better manage our large conservation areas, UP
set up its Biodiversity Department (BioD) under the purview One of the key components in making the BioD a
of Dr. Carl Traeholt, our Group’s Chief Environmental success which is our common goal, was to develop
Advisor a month later. It marked an important milestone internal capacity to manage and conserve UP’s ecological
for the Company’s target of producing certified sustainable resources, and to make first-hand information about
palm oil in Indonesia and being able to document the biodiversity assets easily available.
environmental integrity of its Indonesian operations.
This is possible with the current BioD consisting of Dr.
The Biodiversity team consists of a Division manager Carl Traeholt, our Group’s Chief Environmental Advisor,
with solid natural resources management experiences, Mr. Bjorn Dahlen Environmental Advisor, Mr. Muhd
supported by five subject specialists and five field staff. This Silmi, Manager BioD and essential topic specialists,
is supplemented by additional contract-workers when the such as a limnologist, a forester/botanist, zoologist,
need arises. The team is responsible for mainstreaming herpetologist and a database officer. These subject
environmental concerns into standard operational specialists are supported by two chief rangers and a
procedures and focus on activities primarily within the number of ranger assistants, as well as a native tree
following areas: nursery manager.
The Company’s Biodiversity Team headed by Dr. Carl Traeholt from Copenhagen Zoo (3rd from left) and Pak Muhammad Silmi the
Biodiversity Manager (far left) flanked by the Executive Director of UP, Mr. Loh Hang Pai (2nd from left), Dato’Carl Bek-Nielsen
(4th from left), Mr. Aseervatham, Manager Runtu Estate (2nd from right) and the President Director, PT SSS Mr. Muhammad Ratha
72 during a field visit where issues relating to conservation, rehabilitation and outstanding issues were discussed.
Leopard cats are excellent rat-predators. An adult cat will kill and eat more than two rats on average per day.
Biodiversity Department’s activities in 2018 Prionailurus bengalensis, as predator of rats to replace the
By Dr. Carl Traeholt and Mr. Muhd Silmi environmentally detrimental chemical control.
United Plantations’ Biodiversity Division was created in The work with the sumatran cobra (Naja Sumatrana) and
2011, exactly eight years ago. In this period of time, the king cobra (Ophiophagus hannah), the world’s largest
Division has undertaken an impressive amount of activities venomous snake, has not only produced some amazing
in support of the company’s commitment of producing results. It has attracted one of the World’s best known
sustainable palm oil. In the past, many exciting activities and respected herpetologists, Romolus Whitaker, who
and accomplishments have been reported. For example, continues to grace UP/PTSSS in Kalimantan and offer
the Biodiversity Division has worked with leopard cats, support and capacity building every year.
Dr. Rom Whitaker visits our Indonesian estates and has been instrumental in guiding the Company’s biodiversity department in
its extensive studies on the king cobra. (Insert picture -BioD Team implanting radio transmitters.)
73
Orangutans are regularly recorded in PT SSS’ conservation forests. Now begins the huge task of managing the population.
The Biodiversity Division has also undertaken numerous Biodiversity in PTSSS

cameratrap surveys, bird and tree surveys to document the
biodiversity within the company’s conservation areas. The To date, the BioD has recorded a stunning 67 species of
BioD has recorded many of Borneo’s endangered species mammals, 179 bird species, 46 reptiles, 22 amphibians
to date, among them Asia’s only great ape, the orangutan, and 78 fish. This is expected to increase significantly in
Pongo pygmaeus. the future as more surveys are completed, especially with
regards to bats. Many of these are listed as either critically
While these are exciting and inspiring stories about exotic endangered (Cr), endangered (E) or vulnerable (Vu) on
species, the BioD is about far more than that. An entire the International Conservation Union’s Red List (IUCN).
host of other activities commenced right from the modest
beginning in 2011, including developing a GIS database In addition, a total of 285 plant species have been recorded,
that incorporates literally all the team’s recorded data, with more than 100,000 seeds and seedlings collected
be it from camera trap pictures, radio-tracking locations, and propagated in two purpose made tree nurseries,
number of tree seeds collected, time and place of illegal before being out-planted in rehabilitation areas. Whereas
logging to recovery of aquatic fauna. Most of these stories some activities associated with this enormous database
are rarely told, however, some of these will be revealed in relate to RSPO compliance, many goes well and beyond
the following. compliance activities.
Bats constitute a very important trophic layer in any ecosystem. They are the only flying mammals and predate on a host of insects. The
BioD team has commenced a dedicated bat survey.
74
The first record of the rare flat-headed cat (Prionailurus planiceps) in Runtu Estate.
In 2018, the BioD recorded two new exciting discoveries. Another very exciting record is the return of the Borneo
First of all, the team captured on camera a flat-headed clouded leopard, Neofelis diardi to the rehabilitation site
cat, Prionailurus planiceps. It is the size of a domestic cat Field 86 in Lada Estate. It is the largest terrestrial predator
and is the rarest cat species in SE Asia and is listed as on Borneo, weighing up to 30kg and is an expert tree-
Endangered on the IUCN Red List. climber as well. Hence, it is also known as the “tree-
leopard”.
It is found in peat-forest and wetlands and, in contrast to most
other cat species, the flat-headed cat has semi-webbed feet, The return of this magnificent cat to Field 86 is a wonderful
is an excellent swimmer and loves water. It feeds mainly on testament to the positive restoration of the area after
aquatic animals such as fish, amphibians and small reptiles. almost 10 years of work.
The clouded leopard (Neofelis Diardi), recorded for the first time in field 86.
75
The red durian, (Durio dulcis), is now extremely rare in Borneo. The BioD has now propagated hundreds of this species and will continue
to collect more fruits in the future.
The Borneo red durian, Durio dulcis, used to be The question remains if the restoration and rehabilitation
widespread across most of Borneo’s lowland areas. Local process has had its desired effects i.e. mitigate flooding
people consider it the sweetest of all durians, however, and bring back biodiversity?
the tree has also very high timber value and the past 20
years’ massive deforestation have resulted in the species To date, it is very pleasing to report back that there has
becoming increasingly rare. been no flooding in adjacent areas ever since corrective
measures were installed.
Today, this once common wild durian is listed as
“Vulnerable” on the IUCN Red List. Concurrently, the BioD has monitored the biodiversity
throughout the years, both with regards to regrowth
The BioD team identified a local villager who still as well as species composition of understory birds. The
had a single tree standing adjacent to Runtu Estate’s latter is a good measure of “health” for rainforests as
conservation forest. Learning that the owner planned these are sensitive to any habitat disturbances.
to fell it for timber, the BioD team purchased as many
fruits as possible, making it financially beneficial for the The data collected show a positive recovery i.e. many
owner to keep the tree. Subsequently, the BioD team trees planted almost 10 years ago are now 10-12m tall
has propagated almost a thousand seedlings that will be and the area, once a wasteland, is now covered with
out-planted for the benefit of both humans and wildlife vegetation other than lalang and invasive ferns.
in the future.
The area oozes with birds quipping and our results
Rehabilitation – a measure of success that there are now 24 species of birds inhabiting Field
86, compared to nil in 2011 (graph on page 77) This,
Rehabilitation of tropical rainforest and wetland is combined with the new record of clouded leopard, is a
a monumental task that takes years of dedication, success-story in the making and a testament to long-
innovation and hard work. There is no existing “hand term dedication to such tasks.
book” to facilitate this process, simply because tropical
rainforest loss is a relatively new phenomenon and Behind all this, there lies an enormous amount of work.
rehabilitation has not been undertaken sufficiently long The rehabilitation process began with revisiting old
term to provide solid results of “dos and don’ts”. satellite images of the area, including adjacent areas, to
be able to restore the stream to its original flow as well
The BioD team commenced on rehabilitating a sensitive as to assess the type of habitat it was before mistakenly
wetland, Field 86, in Lada Estate in 2011. The need being cleared. Subsequently, the BioD developed a list
for this was a combination of the field being sensitive of tree species to plant in the area, choosing a range of
biodiversity area as well as important for managing/ species suitable for this type of habitat and with a value
prevent flooding of planted area further downstream. for wildlife too.
76
Biodiversity Manager, Mr. Muhammad Silmi, in front of a Rengas tree taken in 2014 (left) and again in 2019 (right) showing the successful
rehabilitation process of tree species.
This was to ensure that, not only will the area be restored, Today, similar processes are taking place in many other
but it will also be enriched and become a small important areas. The challenges and difficulties varies from site to
natural oasis in the middle of a sea of plantations. Then site, however, sustained dedication and hard work will
began a dedicated search for the desired tree species produce the desired results too. For some sites, the BioD
in adjacent forest tracts, collection and propagation of will venture into “Phase 2” of the rehabilitation process,
tens of thousands of seeds, followed by out-planting which is to enrich the habitat with species that provide
of tens of thousands of seedlings and finally a constant edible fruits and leaves for wildlife. One can only marvel
monitoring of growth rate, mortality rate and leaf area at nature’s resilience and ability to recover, if only humans
in test plots. are willing to dedicate ourselves to the task and provide
the necessary circumstances for this to take place.
For the first 3-5 years, the BioD also had to “clean” the
area around each tree for weed, to prevent small, still Dr Carl Traeholt
fragile, seedlings from being outcompeted by weeds UP Group Chief Environmental Advisor
and climbers. All this was undertaken in knee-deep and
water, using machetes, GPS, measuring tape and Mr. Muhd Silmi
notebooks. Manager Biodiversity Division
From zero birds in Year 1, the BioD has monitored the bird community in Lada’s Field 86 annually. Once the trees reach a
height of about 2m (Year 5), there has been a steady increase of species.
77
An aerial photograph of Field 86, Lada Estate Div II. From planted land, the area is now covered with trees as tall as the surrounding palms
indicating the importance of rehabilitation. As an example the recorded bird species has increase significantly in the current area.
78
Various types of wildlife including five monkey species captures from our BioD Department’s camera traps.
79
An aerial view of UIE’s Lagoon Tree Reserve, an oasis of flowering tree and fruits, shelter and food supply for birds and mammals.
Tree Reserves The Anak Macang Riverbank Reserve.
The Lagoon Tree (‘Kingham-Cooper’) Reserve. This 5.85 kilometres strip of land along the southern
boundary to Anak Macang River (which is not permitted
This 7.50 hectare area established in 2008 started as a to be cultivated with commercial crops, as regulated
barren piece of land surrounding the Lagoon (man- by the RSPO, and which has to revert back to natural
made-lake supplying UIE Palm Oil Mill with processing vegetation).
water requirements).
Since 2011, it has been enriched with a variety of
The Lagoon Tree Reserve had since been planted with jungle tree species and become a pleasant, diverse
several thousand local trees, and now resembles a area for biodiversity. Numerous valuable hard-wood
natural thick jungle, with over 250 diverse species and (Dioterocarpaceae species like Anisoptera Marginata,
12,000 trees at this area alone. from James Kingham’s Nursery. Penawar Hutan Sdn.
Bhd.) as well as Hopea species and Shorea species from
A major source of planting material, serves as a gene- the UIE Nursery have been planted here.
bank for the on-site Nursery to germinate harvested
seeds and for growing the saplings to be planted on this To date, well over 3000 trees have been planted along the
Estate, as well as the other Estates in the Group to be Anak Macang Riparian Reserve, adding to the variety of
able to establish its own reserve areas. wild trees available for the desired range of Biodiversity.
The Lagoon is well stocked with a variety of local fish The main focus during 2018 has been the harvesting and
species, attracting numerous bird types (fish eagles, raising of tree seeds to the sapling stage, for transplanting
kingfishers, bee eaters, egrets & herons) as well as and supplying the other Estates in the Group, which
mammals such as the Malayan Otter. one day should replicate the project commenced on
UIE in 2008. The trees serve “a 360 degree purpose”: not
Main-Office Tree Parks. only being admired as magnificent life form but also
to provide future generations of planting material for
Extending beyond the Lagoon, are a number of other propagation and conservation.
fields planted with more diverse trees, emphasis on rare
and valuable hardwoods such as the Dipterocarpaceae To date, over 18,500 trees have been planted on UIE in
Family (Shorea, Hopea, and Dipterocarpus). the numerous Parks and Reserves which will no doubt
be a lasting legacy for generations to come.
Additionally, a variety of “food chain” species have been
planted to provide food & nesting for birds, habitat for Geoffrey Cooper
wildlife. Estates Director, Downriver
80
The indigenous jungle tree nursery at UIE(M) where thousand of jungle tree seedlings are raised every year.
Riparian rehabilitation at the Anak Macang. Today more than 3,000 indigenous and rare jungle trees have been planted to intensify the old
riparian reserve.
81
8. Deforestation and High Carbon Stock are being implemented and therefore in compliance
when the new development starts. One of the outputs of
UP is fully committed to its NO deforestation the NPP is a report that proposes how and where new
policy and contributes to the protection of critical oil palm plantings should proceed, or not, for a given
ecosystems and biodiversity in and around management area. The NPP report is posted on the RSPO
the landscapes where we operate. By strictly website for public consultation for a duration of 30 days.
avoiding land clearing in High Carbon Stock Planting and any associated development (such as road
areas, UP ensures that it is in full compliance to development) can only begin once the NPP is completed
its NO deforestation policy of July 2014 and RSPO approval is granted.
High Conservation Value (HCV) Assessment

New Planting Procedure (NPP) and Responsible land
use planning As a member of RSPO, UP is 100% committed to
embrace and implement the sustainability concepts
The RSPO New Planting Procedure (NPP) consists outlined in the RSPO Principles and Criteria (P&C). In
of a set of comprehensive and participatory technical line with the RSPO P&C as well as Indonesian laws,
assessments and verification activities to be conducted Environmental Impact Assessments (EIA’s) and HCV
by growers and certification bodies (CB) prior to a new Assessments were conducted prior to commencing
oil palm development, in order to help guide responsible plantation development by UP.
planting.
UP has not only followed the recommendations of
The NPP applies to any development of new plantings, these assessments but expanded the scope to include
regardless of size (Ha). The intention is that new oil palm much larger conservation areas than that stipulated in
plantings will not negatively impact primary forest, HCV, the EIA and HCV assessments. To date more than 7,500
HCS, fragile and marginal soils or local people’s lands. Ha are set aside as conservation areas in line with the
UP subscribes and supports this stance. Company’s policy to maintain and manage the ecological
integrity of the landscape in which UP operates its palm
The Main Assessments of the NPP are as follows: oil plantations, as well as to provide necessary habitat
for endangered and critically endangered species that
o Soil suitability and topographic surveys are found in or adjacent to UP properties.
o Social Environmental Impact Assessments (SEIA)
o HCV and HCS assessments High Carbon Stock (HCS) Assessment
o Stakeholder engagement, including Free, Prior and
Informed Consent (FPIC) Since 2014 UP has introduced a High Carbon Stock
o Land Use Change Analyses (LUCA) Policy to all its future developments. HCS Assessment is a
o GHG assessments methodology that distinguishes forest areas for protection
from degraded lands with low carbon and biodiversity
A successful implementation of the NPP ensures that all values that may be developed. The methodology
the indicators of the RSPO Principles and Criteria (P&C) was started by Golden Agri-Resources(GAR) and
82
Greenpeace during the development of GAR´s Forest The methodology respects local community rights
Conservation Policy, with the aim to ensure a practical, through its integration with enhanced Free Prior and
transparent, robust, and scientifically credible approach Informed Consent (FPIC) procedures, and respecting
that is widely accepted to implement commitments community land use and livelihoods.
to halt deforestation in the tropics, while ensuring the
rights and livelihoods of local peoples are respected. It requires participatory community-land use planning
Since 2010, the HCS approach has had separate and management, applies conservation planning tools
expert reviews and inputs from multiple stakeholders to the identified HCS forest areas, and combines with
to develop a methodology which is a practical tool to mapped community land use, HCV, peatland and riparian
address the need for forest protection within agricultural areas to delineate areas for conservation, restoration,
development. community land use, and/or areas potentially available
for plantation development.
”The amount of carbon and biodiversity stored within
an area of land varies according to the type of vegetative The HCS Approach is a breakthrough for plantation
cover. The HCS Approach stratifies the vegetation in an companies and manufacturers who are committed
area of land into six different classes using analyses of to breaking the link between deforestation and land
satellite data and ground survey measurements. These development in their operations and supply chains. The
six classes are: High Density Forest, Medium Density approach represents the first practical methodology that
Forest, Low Density Forest , Young Regenerating Forest, has been tested and developed in active concessions in
Shrub, and Cleared/Open Land. The first four classes are Asia and Africa with input from a variety of stakeholders.
considered potential High Carbon Stock forests. It is a relatively simple tool that plantation companies
can use for new developments while ensuring that
Each vegetation class is validated through calibration forests are protected from conversion.
with carbon stock estimates in the above-ground tree
biomass and field checks. Community land rights and Identification of HCS forests can also help governments
uses are mapped, and the HCS forest patches are further fulfil commitments to reduce greenhouse gas emissions
analysed via a Decision Tree to identify viable and resulting from deforestation because it allows the
optimal forest areas for potential protection and areas mapping of forest areas that should be conserved (thus
for development. preventing GHG emissions).
The consolidated map which integrates the results of the patch analysis (HCS area), peat mapping, HCV assessment and
FPIC study in Kumai.
83
As of November 2016, the HCS Approach converged with how development and conservation can go hand in
the HCS+ and following the release of the HCV-HCS hand for the benefit of the local community and the
Assessment Manual in November 2017, which requires all environment.
HCS Approach assessments to be conducted as integrated
HCV-HCS Assessments, UP will also only appoint licensed Environmental concerns
HCV assessors and HCS registered assessors for future
joint assessments if new developments are to take place. Oil palms are highly efficient producers of vegetable oil,
(source: www.highcarbonstock.org) requiring less land than any other oil-producing crop.
Despite being one of the more sustainable sources of
UP’s HCS assessment and Plasma development plans vegetable oil, there is concern that the growing demand
for food and biofuel could lead to rapid expansion of
In adhering to UP’s No Deforestation Policy of July 2014 palm oil production and result in serious environmental
and minimizing its Carbon Footprint, UP in October and social consequences.
2014, requested Daemeter Consulting to perform
a Land Use Change analysis as part of RSPO’s New NGOs and Palm Oil
Planting Procedure (NPP).
Palm oil producers worldwide, continue to be exposed
Daemeter Consulting is a leading consulting firm to much criticism by predominantly Western Non-
promoting sustainable development through Governmental Organizations (NGOs). Their accusations
responsible and equitable management of natural take the form of generalized views that disregard the
resources, particularly in Asia’s emerging economies. positive socio-economic impact of the industry and
(For more info see: www. daemeter.org) continue to highlight mainly allegations of deforestation,
environmental degradation, social conflicts and economic
The Objective was to produce a land use map indicating problems.
exactly which areas ideally should be set aside for
conservation and what areas UP could develop solely Nonetheless, dialogue with NGOs in a constructive
for its Plasma commitments in the Kumai Concession atmosphere of goodwill and fairness is essential in
area. order to pursue the process of achieving a balance
between the natural environment and habitat as
UP has since then fully adhered to the Assessments well as the need for economic development. Those
conclusions and recommendations and the plasma dedicated to this cause always need to be aware of the
development project in the Kumai concession area has other side’s case and thereby do their best to remain
progressed well during 2018, and is a fine example of objective.
Conservation and development going hand in hand based on the NPP and HCS assessments.
84
Consequently, the RSPO promotes sustainable palm oil Deforestation – How to balance Development &
production practices that help to considerably reduce Conservation
deforestation, preserve biodiversity and respect the livelihoods
of rural communities. UP has a clear commitment against deforestation
as enshrined in several of our policies: ’No primary
The Challenges of Protecting Forest Areas from forest clearing policy (1990), ‘No HCV forest clearing
Development policy (2005)’ and ‘High carbon stock assessment &
land use change analysis for new plantings (2014)’.
As of 2017, more than 5 million hectares of forest is
estimated to have been spared from oil palm development Whilst a certain portion of oil palm cultivation, just
in Indonesia. like all other agriculture, is a result of land use change,
it is incorrect to single out the oil palm industry as the
This is largely attributed to the individual NDPE lightning rod for the world’s growing anger on global
commitments of key companies within the sector, alongside warming and deforestation. Globally, according to
government policies. However, ensuring that these areas the Food & Agricultural Organisation (FAO), about
are not converted in the future remains a challenge. 12 million hectares of forests are cleared every year.
The pressure for further land use change by other producers Between 1990 to 2018, more than 375 million hectares of
and sectors that have not subscribed to global sustainability forest were cleared and converted into other uses such
standards continues to grow. as commercial ranching, agriculture, town expansion as
well as infrastructural projects amongst others.
Companies with NDPE commitments currently account
for approximately 2/3 of the combined refining capacities of Oil palm areas globally have increased from 3.7
Indonesia and Malaysia, which still leaves a leakage market million hectares in 1990 to 20 million hectares
of approximately 1/3 of the refining capacity annually. in 2018 or a net increase of 16.3 million hectares
or equal to less than 5% of the total deforestation
Stakeholders from the goverments, private sector, industries, from 1990 to 2018. Nevertheless, whilst fully
civil society, markets and the public must continue working supporting and recognising that ongoing initiatives
together to close this gap. must be intensified to minimise the impacts of
Ecology and Economy- riparian reserve being maintained alongside Sg Bernam at the Jendarata Bulking Installation.
85
(mha = million hectares)
63 mha
10 mha
13 mha
8 mha
6 mha
5 mha
4 mha
3 mha
1 mha
Total Forest Loss (between 1990 to 2008) =

113 million Ha
Beef = 63 mha Soy = 13 mha Pig & Poultry = Maize = 8 mha Palm oil = 6 mha Others = 13 mha
(55%) (11.5%) 10 mha (7%) (5.3%) or 1/10 of Beef (11.5%)
(8.8%)
deforestation and greenhouse gas emissions, An article by the USC states,

there is an acute need by the NGO fraternity and
scientific network including politicians in the West Quote: “I don’t want to go overboard with the mea
to direct their attention on other areas which have culpa here. Companies have to take responsibility to
a disproportionally greater impact on deforestation their actions, and their lack of action. They can’t just say
and greenhouse gas emissions. “The NGO community made me do it”. But the Climate
Focus Report and the new data from the Amazon
In this context, it was with much interest that the US NGO, demonstrate forcefully that when we get the priorities
The Union of Concerned Scientist (UCS) who on the 14th wrong, there are consequences”: Unquote
of December 2016 published an article entitled “Ending
Tropical Deforestation. Earlier in the same article it is also stated that
Have we got our Priorities Backwards?”in which concluded Quote: “The data is pretty clear: by far the biggest driver
that the NGO fraternity including the UCS had got their of deforestation is beef. Soy is second, but far behind in
priorities wrong. The findings concluded that the main terms of importance and palm oil and wood products
drivers of commodity-based deforestation were in fact not are even smaller drivers, causing only about a tenth as
palm oil production but several other commodities. much deforestation as beef”: Unquote
86
Nevertheless, little Norway today produces about 2
9. GHG Emissions, Discharges & Waste million barrels of crude oil per day.
Management
(GRI 302-1, GRI 302-2, GRI 302-4, GRI 306-1) This alone is equal to 913,194 MT of CO2 emissions/day
or similar to the CO2 (eq.) emitted from clearing 1793
Investments and efforts undertaken to reduce
hectares of tropical jungles per day or a deforestation
GHG emissions, and in promoting green energy
rate of 650,000 hectares per year. However no one seems
starting with the Biomass Reciprocating Boilers
to address this acute problem.
and Biogas Plants
What we therefore need much more of is a balanced
Much more attention must be directed towards the approach to what we all have to do to help minimise the
adverse impacts of fossil fuel usage and minimising impacts of deforestation and greenhouse gas emissions
this as about 65% of all CO2 (eq.) emissions still come and not just a selected few.
from burning fossil fuels. The world purchases about 93
million barrels of crude oil per day (equal to about 130.1 There must be a “commensurate effort” failing which
million MT per day). trust will be eroded and goals will not be reached.
In connection with the above it is important to apply Indeed, things should be put in perspective and
more pressure on mineral oil producers as the impact acknowledgement given to the fact that palm oil
on greenhouse gas emissions is larger than what production is not the main cause of deforestation.
most people believe. As an example, it is worthwhile Nevertheless whilst recognizing that ongoing initiatives
mentioning a small country like Norway who has often must be intensified to minimize the impact of not just
wished to be seen as the stewards when minimising agriculture but all activities that in one way or the other
deforestation and greenhouse gas emissions. contribute to deforestation and global warming.
87
The latest and largest Biogas Plant built in 2017/2018 located at the Optimill and generating electricity which is used internally.
88
89
United Plantations’ Carbon Footprint Initiatives Protocol’s ambitions of reducing GHG emissions in
industrialized countries by at least 5% below the 1990
Since 2005 UP has actively been pursuing means of levels in the commitment period 2008-2012.
identifying ways to reduce its Greenhouse Gas (GHG)
emissions and with that its reliance on fossil fuels. Time series of GHG emissions from palm oil at United
Plantations Berhad
Life Cycle Assessment (LCA)
(GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-4, GRI 305-5, GRI 307-1) Below, time series of GHG emissions from palm oil at
UP are presented. The time series for NBD palm oil at
In 2006 following the completion of the world‘s first UP show reductions at 46% (without iLUC) and 40%
panel reviewed Life Cycle Assessment (LCA) study on (with iLUC) from 2004 to 2018. When including nature
the “cradle to grave” production of 1 MT of refined palm conservation, the reduction is 54%.
oil, various areas were identified within our production
chain, which could mitigate GHG emissions. Target 2025
For example, the world’s first comprehensive LCA in With more initiatives and further investments between
accordance with ISO 14040 and 14044 International 2019-2025, our internal goal is to reduce UP’s Carbon
Standards on palm oil was finalized in 2008 and Footprint per MT of refined palm oil produced by 60%
subsequently underwent a critical panel review. before the end of 2025 when compared with previous
2004 levels (with iLUC and nature conservation).
Further annual updates to this LCA were carried out by
2.0-LCA Consultant Dr. Jannick Schmidt from Aalborg, Emissions Reductions & Biogas Plants
Denmark until the latest update undertaken in, the (GRI 302-3, GRI 302-4)
period January to February 2019 thereby providing
management with a detailed and clear overview of the Since 2005, significant investments have been made
development in the Company’s efforts to reduce its in promoting green energy starting with the initial
carbon footprint since 2014. Biomass Reciprocating Boiler cum Power Plant and the
first Biogas Plants built and commissioned in 2006.
The updated LCA has indeed helped to identify additional
areas in need of further improvement within our Group. These projects combined have since helped to
Our Company continues to remain at the very forefront significantly reduce our emissions of CO2 by 70% and
in terms of implementing GHG reducing projects within CH4 by 80% at the respective operating units thereby
the Plantation Industry which will supersede the Kyoto paving the way for additional green investments.
4.00 GHG emissions (incl. iLUC & Nature Conservation)
3.50
Indonesia incl.
3.00
in study
kg CO2-eq./kg NBD oil
2.58
2.47 2.43
2.50 2.35
2.3
2.01 1.98
2.00
1.76 1.73
1.66 1.61 1.61
1.49 1.54
1.50
1.00
54 % reduction 1.18
0.50
0.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
7,500 ha conservation in the land bank in Indonesia
Time-series for NBD Palm Oil at United Plantations Berhad (with iLUC and nature conservation) for year 2004-2018
90
Indonesian Palm Oil Mill and Biogas Plant (GRI 302-3) utilising the biogas to offset fossil fuel consumption by
generating electricity.
To further reaffirm our commitment towards reducing
our GHG emissions, our 4th Biogas Plant, the first of its The final approval from the Energy Commission was
kind in Central Kalimantan was commissioned in June obtained in October 2016, the electrical protection system
2013 at our Company’s Palm Oil Mill in Indonesia. was commissioned on 10th November 2016 and supply
to the grid commenced in November 2016. The quantum
The fifth and final biogas plant was commissioned in of renewable energy generated in 2018 was however
2018 and this has resulted in all mills in our Group having lower than the previous year as a result of problems with
methane capture facilities in the form of Biogas plants. the bacteria flora which was later resolved.
United Plantations Biogas to Grid Project Biomass Reciprocating Boiler
Since the UIE biogas plant began operation in 2010, the The first Biomass Reciprocating Boiler (BRB1) was
biogas generated at the mill was either flared or used as successfully commissioned in 2006 and supplied green
a substitute fuel in the mill boiler. steam to Jendarata Palm Oil Mill as well as the Unitata
Refinery, thus playing a crucial role in reducing the fossil
In order to further improve our carbon footprint and to fuel consumption at the refinery.
better utilise this resource, a Power Purchase Agreement
was signed in December 2015 between TNB and UP, Since then the company has built another 7 biomas
whereby UIE has been given the right to generate reciprocating boilers and commissioned 6 of them with
electricity and sell electricity back to the National grid. the last one at UIE(M) scheduled for commissioning in
the month of March 2019.
In this connection, the biogas generated from the biogas
plant (capacity 600m3/hour) is scrubbed to remove the All the biomass boilers are equipped with the VORSEP
hydrogen sulphide and then used as fuel to generate dust particle minimizing system, and an automatic fuel
electricity via a newly installed 1.2MW Biogas Engine, feeding system with greater energy efficiency and a
minimising the need for the closed flaring operation and lower labour requirement.
The new biomass Reciprocating Boiler at the Optimill commissioned in November 2017.
91
Isokinetic Monitoring of Gaseous Emissions from the Malaysian Operations and the Indonesian mill without the
Palm Oil Mills VORSEP System were as tabulated.
(GRI 305-7)
In all cases the average dust concentrations were
In conformance to the Department of Environment’s below the limit of 0.4g/Nm3 set by the Department of
stipulations as well as to monitor the quality of our gaseous Environment as per the Environment Quality Act, 1978
emissions, flue gas compositions were regularly checked in Malaysia and the 0.3g/Nm3 set by the Peraturan
by certified assessors throughout 2018. The average dust Menteri Negara Lingkungan Hidup No. 07 Tahun 2007
concentration in the flue gases of four palm oil mills in UP’s in Indonesia.
Palm Oil Mill Average Dust Concentration (g/Nm3)
Jendarata
BRB 1 and 2 0.191
Ulu Bernam
Boiler 2 0.129
Ulu Basir
Boiler 4 0.121
UIE
Boiler 1 & 3 0.131
Lada
Boiler 1 & 2 0.153
VORSEP Dust Collector System at Ulu Basir Mill and among others requires a cleaner emission standard from
Jendarata Mill the boiler with the following conditions: -
The VORSEP dust collector system was installed on i) The dust concentration emitted from the stack
our Biomass Reciprocating boiler at Ulu Basir Palm Oil should not be more than 0.150g/Nm3
Mill replacing the old conventional multi-cyclone dust
collector system. ii) The smoke should not exceed shade No. 1 on the
Ringlemann chart and should be less than 20% opacity
This unit was commissioned in the beginning of June
2015 whilst the unit at Jendarata Palm Oil Mill was Today all of UP’s palm oil mills have introduced the
commissioned in September 2017. VORSEP dust collector system. However only 3 of UP’s
4 Malaysian mills have commissioned the VORSEP
These units were installed primarily to meet the DOE’s system with the UIE(M) only expecting to commission
Environmental Quality Act (Clean Air Regulation) 2014 the VORSEP system by April 2019.
92
Production and Level of Utilisation of Oil Palm Biomass Residues in UP in 2018
(Dry Matter Basis-Malaysian Operations)

Quantity Quantity
%
Biomass Produced Utilised Method of Utilisation
Utilisation
(MT) (MT)
Trunks and fronds 152,954 152,954 100 Mulch
at replanting
Pruned fronds 294,091 294,091 100 Mulch and erosion mitigation
Spent male flowers 28,278 28,278 100 Organic matter recycled on land
Fibre 68,928 68,928 100 Fuel & mulch in nursery
Shell 38,282 38,282 100 Fuel & mulch for polybag seedlings
POME 26,473 24,487 92 Biogas generation, nutrient source, field
irrigation and base for organic fertiliser
production
EFB 78,089 78,089 100 Mulch and Fuel
Total 687,095 685,109 - -
Level of utilisation =99.7%
In 2018, a total of 687,095 MT of biomass residues were enriching our soils and displacing the use of fossil fuels
generated through the various field and mill operations whilst adding value to the biomass generated.
of the Company’s Malaysian operations. From these a
very high ratio of 99.7% of the total biomass generated, To further enhance biomass utilisation, another three
or 685,109 MT were utilised with most of the residues units of Biomass Reciprocating Boilers were installed
recycled as organic matter back to the fields, used as and commissioned at our UIE palm oil mill, and the
organic mulch in the nursery or as fuel source, thereby Optimill in 2018.
(Dry Matter Basis-Indonesian Operations: Lada and Runtu Estates)

Quantity Quantity
%
Biomass Produced Utilised Method of Utilisation
Utilisation
(MT) (MT)
Trunks and fronds - - - -
at replanting
Pruned fronds 91,957 91,957 100 Mulch and erosion mitigation
Spent male flowers 8,842 8,842 100 Organic matter recycled on land
Fibre 24,385 24,385 100 Fuel & mulch in nursery
Shell 15,456 15,456 100 Fuel & mulch for polybag seedlings
POME 7,231 6,689 93 Biogas generation, nutrient source, field
irrigation
EFB 29,544 29,544 100 Mulch and Fuel
Total 177,415 176,873 - -
Level of utilisation =99.7%
Our Indonesian operations generated a total of 177,415 99.7%) was utilised through recycling in the field and
MT of biomass dry matter in 2018. Even though the as an energy source with all the added benefits to the
quantum is lesser than what is generated in Malaysia, environment.
a very high proportion of these biomass (176,873 MT or
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Fertilizer Equivalent and Monetary Value of Oil Palm Biomass Residues Recycled on Land
in UP in 2018
(Malaysian Operations)
Quantity Fertiliser Equivalent (MT)
Biomass Method of Utilised on
Residues Utilisation Dry Basis Rock Muriate
Urea Kieserite
(MT) Phosphate of Potash
Trunks & fronds

at replanting Mulch 152,954 1,912 642 2,460 1,173
Pruned fronds Mulch 294,091 6,630 2,157 5,607 3,671
Spent male flowers Organic Matter 28,278 910 602 1,673 868
EFB Mulch 64,561 1,123 473 3,120 717
Digested POME Biogas 24,487 852 539 1,339 980
generation &
Irrigation
Total (MT) 564,371 11,427 4,413 14,199 7,409
Monetary value (RM) 13,482,814 1,390,274 15,974,512 4,667,306
Total monetary value RM 35,514,906
(Indonesian Operations - Lada and Runtu estates)

Quantity Fertiliser Equivalent (MT)
Biomass Method of Utilised on
Residues Utilisation Dry Basis Rock Muriate
Urea Kieserite
(MT) Phosphate of Potash
Trunks & fronds

at replanting Mulch - - - - -
Pruned fronds Mulch 91,957 2,073 674 1,753 1,148
Spent male flowers Organic Matter 8,842 284 188 523 271
EFB Mulch 28,487 495 209 1,376 317
Digested POME Biogas 6,689 233 147 366 268
generation &
Irrigation
Total (MT) 135,975 3,085 1,218 4,018 2,004
Monetary value (RM) 4,029,803 670,314 5,301,091 1,727,872
Total monetary value RM 11,729,080
With our commitment to sustainability and good The fertiliser equivalent of the material recycled on
agricultural practices, the recycling of field and mill land is of the order of 37,448 MT of NPKMg fertiliser
biomass residues back to the oil palm land remains a which in itself has a monetary worth of RM35.51
cornerstone in UP. These measures have been shown million at the 2018 fertiliser prices.
to maintain and even improve soil fertility in the long
term and enhance palm growth and oil yield. For our Indonesian operations, a total of 135,975 MT
of biomass was recycled onto plantations land. This
In 2018, the total organic matter recycled on land in is equivalent to adding 78,866 MT of organic carbon
UP amounted to 564,371 MT of dry matter which is to enrich the land which on a hectare basis is akin
equivalent to 327,335 MT of carbon. At this rate, we to returning 16 MT of organic matter (or over 9 MT
are returning close to 17 MT of organic matter or organic carbon) to the land.
around 10 MT of carbon to each hectare of land, over
the period of a year, thereby helping to replenish the On the more sandy soils in Indonesia such inputs will
soil carbon stock with a significant impact on soil have a significant influence on improving long term soil
health. health. The nutrient content in these recycled biomass is
equivalent to 10,325 MT of inorganic NPKMg fertilisers,
Upon mineralisation, the organic residues release with a value equivalent to RM11.73 million at 2018
substantial quantities of previously locked plant prices.
nutrients to the soil which is available for palm uptake.
94
Biogas Engines at the Optimill supplying electricity to
the UniFuji Refinery.
95
The Optimill and Unifuji project encompassing an example of the “circular economy”. An enormous effort was undertaken by many
to complete this state of the art project.
The Optimill Project
In 2015 the Board of UP decided to build a new Palm The UniFuji Refinery project, which is a 50:50 JV
Oil Mill, called the “Optimill”, with the most modern between UP and Fuji Oil, was therefore conceptually
equipment and technologies available in the industry agreed upon in 2016 after which the initial foundation
and incorporating this into a layout that would not only works and site preparations began.
mirror the Danish Dairy Industry standards but also be
a perfect example of the circular economy. During the second half of 2018, the JV materialized
into a super modern and efficient integrated refinery
By choosing the right location and capacity for the setup including a solvent fractionation plant in the Ulu
Optimill it has enabled UP to close two of its older mills Bernam Area of Lower Perak providing employment for
and process the crop from approximately 18,000Ha of about 60 people.
UP´s land. In addition, it was agreed that UP should
explore the opportunities to utilize the enormous The state-of-the-art factory is a result of two companies
amount of biomass that would be available from the coming together with a shared goal of producing value
new Mill. This amongst others would include an added palm components based solely on UP’s certified
adjacent Biogas Plant thereby closing the loop and sustainable and traceable palm oil and Fuji’s expertise
mitigating greenhouse gas emissions considerably as is on technical capabilities.
the case at all of UP’s other Palm Oil Mills.
With the completed projects depicted in the picture
The Optimill, being the biggest engineering project above, UP and Fuji Oil have taken a giant leap forward
undertaken in UP’s 113 year history was completed on the in terms of encompassing and amalgamating the most
29th November 2017. modern equipment and technologies available in the
industry and marrying this into a layout which today
The UniFuji Project is a perfect example of what the circular economy can
look like.
With the large amounts of renewable energy available from
the Optimill, UP managed to pursue a collaboration with The Projects are testimony to the fact that no one in
the Japanese Company, Fuji Oil as they had been looking the top is stronger than the pyramid of people who
to expand their refining business to produce value added support them. Both UP´s and Fuji´s appreciation goes
palm fractions made from RSPO certified plantations. The out to the team involved for their admirable dedication
common objective was to do this without the use of fossil and commitment which exemplifies the spirit of being
fuels as well as complying with the highest possible food “second to none”.
safety and quality standards in the world.
96
Development stages of the Optimill and Unifuji project.
97
Inauguration of The Optimill and UniFuji Refinery
On 17 January 2019, the Optimill as well as the Unifuji Refinery project were officially inaugurated by our gracious
guest of honour His Majesty Sultan Nazrin Muizzuddin Shah, Deputy Yang Di-Pertuan Agung and Duli Yang Maha
Mulia Raja Permaisuri Perak Darul Ridzuan Tuanku Zara Salim.
Various pictures taken on the 17 January 2019 providing a lasting memory on a most eventful day.
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His Majesty Sultan Nazrin Muizzuddin Shah, Deputy Yang Di-Pertuan Agung, the Mentri Besar of Perak, Dato’ Seri Ahmad Faizal bin
Azumu and YB Teresa Kok being briefed on the project by Dato’Carl Bek- Nielsen.
Members of the TEAM in commemoration of a grand and memorable opening ceremony on 17 January 2019.
UNIFUJI
UNITED PLANTATIONS BHD. UNIFUJI SDN. BHD. FUJI OIL HOLDINGS INC.
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The EXCOM Members, Mr. Martin Bek-Nielsen, Dato’
Carl Bek-Nielsen and Mr. Loh Hang Pai flanked by the
President Director Mr. Muhammad Ratha , Manager of
Lada Estate, Mr. Ramadevan on a field visit in Janaury
2019.
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In addition, leguminous cover crops are established in all
10. Water Impacts our immature plantings to conserve moisture.
Relates to UP’s measure to preserve and protect
In this context, it is important to mention that except for
waterways and manage the use of water the nursery areas, none of United Plantations’ planted
throughout our organisation areas under oil palms or coconuts are irrigated. All our
areas are under rain-fed agriculture, thus making use
of whatever water comes naturally from above. We are
Introduction continuously working to mitigate our water footprint
related to mill waste, maintaining buffers along natural
Plants obtain almost all the water they require from waterways, harvesting rainwater, frugal domestic water
the soil. Of the enormous quantities taken up, only a usage and judicious use of pesticides and weedicides.
fraction of one percent is retained in the plant tissues.
Yet this minute fraction is all important for growth. Water The consumptive use of water (evapotranspiration) of
is required for a number of physiological functions, our crops ranges from 120-150 mm per month. To meet
including manufacture of carbohydrates, maintenance these requirements, the monthly rainfall should equal
of hydration of the protoplast and for the transport of or preferably exceed this figure, failing which moisture
nutrients. stress would occur. The rainfall in the UP Group ranges
from 1,600 to 2,500 mm per year, with the average
Today’s water management challenges and tomorrow’s being 2,000 mm. Monthly distribution is reasonably
differ greatly from those of the last decades. A growing uniform, but drought does occur when some estates
number of poor people and continued environmental receive less than 100 mm of rainfall over 2-4 months
degradation imply that the finite natural resources as experienced in 2015. Weirs have been constructed
available to humans and ecosystems will not support across the collection drains to harvest rainfall and hold
business as usual for much longer. Thinking differently of back water to raise the water table.
water is a requirement if we want to reverse these trends
and achieve our triple goal of food security, poverty Hydrology and Limnology
reduction and conserving environmental integrity.
Clean water is critical to sustain all kinds of life form on
Farming feeds the world, but it depends on vital resources Earth. In rural Indonesia thousands of local residents are
such as water. Irrigation for agriculture consumes 2/3 dependent on water supplies from lakes and rivers.
of the world’s fresh water but non-irrigated agriculture
today produces about 60% of the world’s food. Maintaining a clean and uninterrupted supply of water
constitutes one of the most critical components in
Experts have concluded that agricultural output will sustainable palm oil production.
need to double by 2050 to feed a growing world. We
will, in other words, not only need to produce more from The Biodiversity team has developed a “Hydrology map”
each hectare of land but also get more from each drop and identified a number of permanent sites for sampling
of water. water quality. Using state-of-the-art equipment, the
team measures and records organic, inorganic and
United Plantations fully appreciates that much more can physical pollution parameters in the field.
be done in terms of water productivity.
Potential trace elements and toxins are measured with
In order to maximize the available water resources, a spectrophotometer in the laboratory. In the event of
United Plantations has, since 1913, gone to great length a sudden deterioration in water quality, the team will
to construct an extensive system of watergates, bunds, identify the source of pollution and initiate a process to
weirs, canals and drains hereby enabling us to harvest rectify the problem.
and optimize the usage of rain water.
The water reservoir at Jendarata Estate. An effective drip irrigation system at Ulu Bernam nursery.
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A large water pump to help mitigate periodic flooding at Runtu Estate, Kalimantan.
This includes identifying any unusual organic

contamination, usually due to empty fruit bunches that
have mistakenly slid into a stream or if an unusual high
level of inorganic contamination is detected, it is usually a
result of excessive wash-out of fertilizer.
Such information is communicated to the respective

estate manager, allowing them to rectify a potential
problem within a very short time period.
In our pursuit to conserve this depleting precious gift,

every effort is being done to educate our residents to
be frugal on its usage. Old water pipes, water tanks,
faulty taps are being replaced from time to time to arrest
leakages.
We aim to reduce the consumption in the coming years

with more awareness programmes.
Erosion Monitoring Plots

Laboratory assistant conducting analysis at our PT SSS chemistry
To better understand the dynamics of soil, water and laboratory.
nutrient loss that can occur on our property, several
erosion monitoring plots measuring 6m X 20m were set Per Capita Domestic Water Consumption Per Day
up in one of our estates on slightly sloping land under
mature oil palm. 2018 2017 2016
Malaysian
Thereafter the amount of soil loss, surface runoff and operations 69 58 61
nutrient losses in each of these fractions are being (gallons)
closely monitored to determine the major routes of soil, Indonesian
water and nutrient loss. operations 76 66 NA
(gallons)*
Such studies illuminate the areas of major nutrient loss
*2014-2016 flowmeters were progressively installed in our
is through surface run-off for which mitigating measures Indonesian operations (Lada and Runtu Estates) as the
can be developed to minimise the depletion of these housing complex was being expanded.
vital natural resources.
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Effects of Moisture Stress
11. Peat Development
The Group has committed to no new Moisture stress causes reduction in cell division and cell
development on peatland regardless of depth elongation – two important growth processes. Its effect on
since 2010. However, the management plans oil palm and coconuts is summarized in the table given.
are in place and being implemented on
existing plantations on peat
Water Management
Water management is particularly important on the

acid sulphate and peat soils. These soils are fragile and
if over drained, they will rapidly deteriorate. On the acid
sulphate soils, the water level should be maintained up
to the jarosite layer, submerging the pyrite (FeS2) and
preventing it from oxidizing to sulphuric acid, which can
cause a steep drop in the pH.
Weirs for Moisture Conservation
To conserve moisture during dry periods, a series of weirs

are constructed across the collection drains to hold back Water tanks are supplied for harvesting rain water.
water and raise the water-table to within 50-75 cm from the
surface. The weirs are made of wood, concrete or they can Rain Harvesting (GRI 303-3)
simply be sandbags. The concrete structures are either built
on site or they are precast and placed into position. As part of our effort to conserve water resources and
minimise wastages we have embarked on a programme to
To regulate the height of the water table, wooden planks are fit workers’ housing with tanks to store harvested rain water
slotted into the desired level. Except for periodic flushing which is especially beneficial during periods of prolonged
of acidic water during the rainy seasons, the blocks are dry weather
maintained at the predetermined level at all times.The density
of weirs varies with the soil type, slope, rainfall and cropping Mill Water Consumption Rate
system. On the average, one weir is provided for every 40
to 60 hectares or every 600-1,000m along the collection Water consumption rate in our Indonesian operation has
drain. Assisted by the water gates at the discharge ends of improved over the recent years whereas the mill water
the main drains, the weirs are very effective in minimizing consumption rate in our Malaysian operations has also
the adverse effects of the moisture stress. United Plantations improved with the phasing out of the older mill and the
has recently engaged an external consultant to undertake a commissioning of the new Optimill.
peat drainability study in our Malaysian operations to better
understand the hydrological characteristics of our peat areas.
Monitoring of meteorological parameters
Weather stations have been setup at strategically important

locations throughout our Group.These provide a large amount Mill water consumption rate in processing fresh
of micro-climate information critical to, particularly, make fruit bunches (MT water/MT FFB processed)
accurate fire-risk predictions. Being able to predict the risk 2018 2017 2016
of fire allows the management in each estate to implement
proactive measures, to prevent and minimize the risk of fire, as Malaysia 1.5 1.8 1.7
well as to be on high alert with firefighting equipment, in case Indonesia 1.2 1.4 1.3
of fire outbreak.
Effects of Moisture Stress on Oil Palm and Coconut

Oil Palm i Accumulation of unopened spears
ii Reduced leaf production
iii Drying and snapping of leaves
iv Abortion of inflorescence
v Affects sex differentiation favouring male flower production
vi Reduced oil/bunch yield
Coconuts i Premature nut fall
ii Reduced nut yield
iii Reduced nut size
iv Reduced copra/nut
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materials. Today, UP’s use of pesticide is 4-6 times lower
12. Pesticides and Chemical Usage per tonne of oil produced compared to Rapeseed farmers
(GRI 301-1) and about 32 - 44 times lower compared to Soybean
Conducting our operations under the best farmers.
principles of agriculture, and to reduce chemical
and pesticides usage thereby minimising the Establishing Beneficial Flowering Plants
impact to the natural environment
To date a total of 262,905 broadleaf flowering plants
have been planted in our Malaysian and Indonesian
UP has a strong commitment to Integrated Pest plantations to encourage parasite and predator
Management (IPM), and in line with the Principles and activities which is a vital cog of our IPM programme.
Criteria of the RSPO we are continuously working on
reducing the usage of pesticides. Our employees’ safety There has been a steady increase in the number of
is a top priority and in this connection all sprayers are beneficial plants which were planted in our Malaysian
trained extensively and are required to use full Personal and Indonesian properties over the last few years.
Protective Equipment.
However due to replanting activities in most of the
According to CropLife International, a global federation Malaysian estates as well as the loss of beneficial
representing the plant science industry, 42% of crop plants to flood, beneficial plants numbers have
production throughout the world is lost as a result been set back for some years although numbers are
of insects, plant diseases and weeds every year. In the expected to further rise in the coming years.
tropics crop losses can reach as high as 75%.
Malaysia Indonesia
Careful use of pesticides can deliver substantial benefits
Cassia cobanensis - 43,219 planted - 14,712 planted
for our society through increasing the availability of
good quality and more affordable priced food products. Tunera subulata/ulmifolia - 97,756 planted - 76,866 planted
However, pesticides are inherently dangerous and it is Antignon leptosus - 13,986 planted - 77 planted
in everyone’s interest to minimize the risk they pose to Carambola sp - 3,892 planted -
people and the environment. Others - 3,763 planted - 8,634 planted
Total 162,616 planted 100,289 planted
Integrated Pest Management (IPM)
IPM, means a pest management system that in Surveillance and Monitoring of Pest Outbreaks
the context of the associated environment and the
population dynamics of the pest species, utilizes all The key to minimizing both the economic impact of
suitable techniques and methods in as compatible a pest and environmental impacts from excessive use of
manner as possible and maintains the pest population pesticides is by regular surveillance and monitoring.
at levels below those causing economically unacceptable
damage or loss. Treatment is only carried out when the damage exceeds
established critical thresholds. Several census gangs are
Source: FAO deployed on each estate to survey the extent of pest
infestation.
Our commitment towards continuous improvements has
resulted in minimizing the usage of pesticides in relation This is coupled with regular aerial reconnaissance in
to other major oil seed crops, primarily through Good order to track and pre-empt pest build-up thereby more
Agricultural Practices and improvement in planting effectively treating potential outbreaks.
United Plantations Palm Oil United Plantations Palm Oil

(Malaysian Operations*) Soybean** Sunflower** Rapeseed** (Indonesian Operations*) Soybean** Sunflower** Rapeseed**
2018 2017 2016 2018 2017 2016

Pesticides / Pesticides /
Herbicides 0.702 0.66 0.83 29 28 3.73 Herbicides 0.12 0.14 0.18 29 28 3.73
(kg per MT oil) (kg per MT oil)
*Includes palm oil + palm kernel oil (UP, 2016-2018 - Malaysian operations) *Includes palm oil + palm kernel oil (UP, 2016-2018 - Indonesian operations:
** Data from FAO, 1996 - Pesticide data for rapeseed updated in 2010 Lada and Runtu Estates)
** Data from FAO, 1996 - Pesticide data for rapeseed updated in 2010
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Rhinoceros beetle grubs thriving on rotting organic matter. A rhinoceros beetle adult attracted to an oil palm seedling
Use of biological pesticides and pheromones For example, leopard cat (Prionailurus bengalensis) is
one of the key-predators of rats and other small rodents,
First line treatment against leaf pests i.e. Nettle Caterpillar and preliminary studies on the effect of these cats as rat-
and Bagworm is by biological treatment in the form of controllers in a plantation landscape is ongoing.
Bacillus thuringiensis. The use of pheromones to trap
Rhinoceros Beetles thus reducing the dependency on The results have been very promising, and UP’s
chemical pesticides is also encouraged on all estates. biodiversity team is currently exploring ways to enrich
the habitat conditions for leopard cats, to maximise the
Besides trapping out the beetles, pheromone traps also population density and thereby reduce the effect of rat
provide management with statistical information of the damage.
severity of the beetle problem and supplements the chemical
spraying operations to minimise beetle damage. Apart from leopard cats, the team also records ecological
parameters along with the effect on rat populations of
Overpopulation of rats, beetles and various kinds of weeds other predators such as barn owls (Tyto alba), spitting
can have profound negative impact on production and cobra (Naja sumatrana) and water monitor lizards
yield. UP Group attempts to minimize the usage of chemical (Varanus v. salvator).
control-agents where possible, and the BioD undertakes
a number of research projects to maximise the usage of
biological control agents where possible.
Mr. Shimizu (left) the CEO of Fuji Oil and Mr. Mikey (2nd) from the right being shown how Integrated Pest Management is applied in the
use of pheromone traps on Jendarata Estate.
105
The following pages provide an overview of some of the methods to reduce pesticide usage as well as
ongoing research within our biodiversity team and UPRD:
5-Step Integrated Pest Management Programme approach taken to contain and/or control Bagworm
outbreak thus limiting the usage of monocrotophos:
1) Integrated Pest Management

E.g. planting of beneficial plants to enhance the natural parasitic and predator activities against bagworm.To date
more than 262,905 beneficial broadleaf flowering plants have been planted in both Malaysia and Indonesia.
2) On-going Monitoring
Census gangs deployed on each estate who take random frond samples in a pre-determined pattern throughout
each estate. These fronds are subjected to insect counts and damage assessments by trained personnel.
3) Aerial Surveillance
Regular aerial reconnaissance is carried out to better detect, pre-empt and treat potential outbreaks.
4) Use of biological control agents

E.g. Bacillus thuringiensis as the first line of treatment against an outbreak.
5) Final Resort
As a final resort and only when Steps 1 to 4 have proven to be futile in containing or controlling the natural
equilibrium between pest and beneficial predator, our trained personnel intervenes with the specific treatment of
trunk injection using monocrotophos.
Mowing of Harvesters’ Paths Monocrotophos
Blanket weeding is discouraged, soft weeds with shallow Monocrotophos is a class 1B insecticide which is permitted in
root system which do not grow to excessive heights are Malaysia for trunk injection of palms affected by bagworm.
encouraged outside the weeded palm circle. Harvesters’ Foliar application usage was banned by the Malaysian
paths are mowed. This practice maintains a flora which is Government in 1996. Efforts to source and evaluate
favourable to natural enemies of crop pests and reduces alternatives for the Class 1B insecticide, monocrotophos,
soil loss. have been ongoing since 2006 and are still being pursued
together with several multinational chemical companies,
Use of Safer Class 3 & 4 pesticides wherever possible amongst others Bayer and BASF (Germany), Syngenta
(Switzerland), Cheminova (Denmark) and Sumitomo
In line with the RSPO’s continuous improvements (Japan) and Rainbow Agrosciences (China).
initiative the Company’s Group Sustainability
Committee monitors and reviews the pesticide So far, we have not been able to meet our internal goals of
usage, exploring avenues to reduce overall pesticide phasing out monocrotophos as the agrochemical industry has
usage as well as evaluating alternative safer not been able to identify an effective and suitable alternative
pesticides. In this context, UP has since February that is able to effectively control bagworm. This conclusion
2008 been working towards minimizing the usage is shared by all the leading multinational chemical producers
of Paraquat, which has been documented in the present in Malaysia.
annual RSPO Surveillance Audits.
Monocrotophos will therefore still be used in very limited
In May 2010, Management took the decision to quantities for trunk injection only and solely as a last resort
voluntarily phase out the usage of Paraquat, a goal in the company’s 5-Step Integrated Pest Management
which was realized with effect from October 2010. Programme when all other attempts to contain or control
Spreaders are used to apply fertilisers evenly and in a cost Palms defoliated by bagworm outbreak.
effective manner.
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A widely planted beneficial plant – Antigonon leptosus. Sycanus predating on a leaf eating caterpillar.
a bagworm outbreak have been exhausted. This is in full November 2013. It is an offence under the Plant Quarantine
compliance with all relevant rules and regulations in Malaysia Act 1976 if this dangerous pest is left without any control and
as well as with the RSPO Principles & Criteria. can be fined up to RM10,000.
In 2018, monocrotophos usage was halved from the previous Outbreaks of bagworms continue to occur in the
year due to improved pest situation in our Malaysian estates. properties neighbouring UP in the State of Perak, West
Prior to this outbreak the Company has successfully reduced Malaysia. This is of great concern as it is important
its use of monocrotophos as an active ingredient basis by that concerted effort by the government authorities,
approximately 53% since 2006. neighbouring smallholders and other plantations are
put in place in an attempt to eradicate this serious pest.
Much progress and efforts are being made to continue this
positive trend. In this connection, the collaboration with the UP is working closely together with its neighbours
Centre of Agriculture Biosciences International (CABI) in as well as the authorities in the form of the Malaysian
relation to management of bagworm in oil palm through Palm Oil Board (MPOB) to achieve positive progress
an integrated ecological approach with biological control on this concerning issue. UP has extended its service to
agents such as predators and other entomopathogens was the neighbouring plantations the use of its airstrips for
formalized in 2011 for a two-year study aerial bagworm control and also taking the plantation
managers for aerial reconnaissance flights to monitor
The objective of the study is to develop an effective strategy the extent of bagworm infestations in the region.
to manage bagworm pests through the mass breeding
and release of biological control agents such as predators As can be seen in the table below, the quantity of
complemented with the application of entomopathogens in agrochemicals (fertilizer nutrients and pesticide/
affected fields. Arising from this collaboration, efforts to rear herbicide) per tonne of oil produced in oil palm cultivation
and propagate a number of predator species in a purpose- at UP over the last three years remain substantially lower
built insectary since 2012 are continuing. than annual oilseed crops such as soybean, sunflower
and rapeseed, a reflection on the resource utilization
The eventual benefit of this endeavour may lead to efficiency of the oil palm crop.
sustainable bagworm control requiring minimal intervention
with chemical insecticides. Pesticide usage has seen a slight increase in 2018 due to
higher herbicide usage as a result of weather conditions
Bagworm is an endemic pest in Lower Perak and the Federal favourable to weed growth.
Government has gazetted this as a “Dangerous Pest” on 15
Agrochemical and Energy Inputs in the Cultivation of Oil Palm and Other Oilseed Crops
(GRI 301-2, GRI 302-1)
Per tonne oil basis
Input Oil Palm*
Soybean** Sunflower** Rapeseed**
2018 2017 2016
Fertiliser nutrients
Nitrogen (N-kg) 19 14 20 315 96 99
Phosphate (P2O5-kg) 10 11 9 77 72 42
Potash (K2O-kg) 44 35 47 NA NA NA
Magnesium (MgO-kg) 7 6 7 NA NA NA
Pesticides/Herbicides (kg) 0.70 0.66 0.83 29 28 3.73
Energy (GJ) 0.76 0.67 0.97 2.90 0.20 0.70
* includes palm oil + palm kernel oil (UP, 2016-2018- Malaysian Operations)
** Data from FAO,1996 - Pesticide data for rapeseed updated in 2010.
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Biological Control Agents to Substitute for Chemical lasting weed control was extensively tested in our
Insecticides fields and was found to be able to slash the number
of herbicide rounds from four rounds a year with the
Leaf eating pest outbreaks in immature oil palms will standard herbicide mix to two rounds a year with the
need to be treated with insecticides. The use of biological Indaziflam combination.
insecticides such as Bacillus thuringiensis is encouraged
at this young crop stage to minimise collateral damage This confers the clear benefit of almost halving the
on beneficial insects in the field as well as to reduce herbicide input in a field and greatly improving labour
dependency on chemical insecticides. productivity where this approach has been adopted.
Our use of biological insecticides is as recorded below Calibration for Pesticide Application Equipment
although the quantity used is also dependent on the
incidence of pest outbreaks which was less prevalent in The Company engages the services of equipment
2018 than during 2016. suppliers to regularly monitor the calibration of the
equipment to avoid application error (under and over
2018 2017 2016 applications) and safety to operators.
Malaysia 288 50 4,250
Indonesia 0 0 0
Regular training and refresher courses are implemented,
Quantity (kg) of Bacillus thuringiensis applied in our Malaysian and
all of which are audited by accredited auditors of the
Indonesian operations RSPO every year.
Harnessing advances in pesticide technology to reduce Chemical Health Risk Assessment (CHRA)
herbicide inputs in mature oil palm
In line with the Use and Standards of Exposure of
In the wet tropics, weed species rapidly cover the ground Chemicals Hazardous to Health (USECHH) Regulations
and if left unchecked, will encroach into palm circles to 2000, UP first appointed a certified assessor to conduct
compete with the palms for nutrients and water as well CHRA in 2004, for all chemicals utilized in the respective
as interfere with field operations. plantations, oil mills and refinery.
Consequently, herbicides are an important tool to keep It is being reviewed every 5 years by the assessor as
the palm circles weed free. Of the total pesticides used in stipulated in the Regulations and annual medical health
a mature field, herbicides will therefore account for more surveillance is conducted on all spray operators.
than half of the total pesticide load.
As can be seen in table below, the quantity of agrochemicals
Thus any improvement in the length of control for weeds (fertilizer nutrients and pesticide/ herbicide) per tonne
will contribute significantly to a reduction in pesticide of oil produced in oil palm cultivation at UP over the
use for mature palms. last three years remain substantially lower than annual
oilseed crops such as soybean, sunflower and rapeseed,
Over the years United Plantations has actively co- a reflection on the resource utilization efficiency of the
operated with leading agrochemical manufacturers to oil palm crop.
evaluate a range of herbicidal compounds.
Direct fossil fuel consumption in 2018 increased slightly
Arising from the close collaboration with Bayer from 2017 due to increased field operations and mill
CropScience a new compound, Indaziflam, with long construction activities.
Standard 4
rounds/Yr
2018 2017 2016
1.6
1.4 Malaysia 2.91 2.51 2.46
1.2 ,QGD]LÀDP
1 rounds/Yr
Indonesia 0.69 0.78 0.86
0.8
0.6 46% Reduction of overall herbicide usage (kg a.i./Ha/year) in mature
0.4 Reduction
oil palm planting with the introduction of Indaziflam herbicide in
0.2 2016 onwards.
0
Significant reduction of herbicide usage in mature fields with the

use of Indaziflam herbicide compared to the standard herbicide
combination.
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Rats eat both palm fruits and male flowers as indicated above. Barn owls are the best partners to oil palm growers due to their ability to
adapt well in oil palm plantations, significantly reducing rat population and usage of rodenticides.
Biological pest control of rats
Rats thrive in the oil palm ecosystem with an abundance The barn owls are medium sized (34-36cm) with
of food source (palm shoots, fruit mesocarp, kernels, weevil long legs that have feathers all the way down to their
grubs etc.) as well as plentiful harborage amongst the cut grey toes. The owls have large, round heads without
frond heaps. The common rat species encountered in an oil ear tufts and pale heart-shaped facial disc. The owls
palm field are the Malaysian wood rat (Rattus tiomanicus), ingest the rats whole and use their digestive juices
paddy field rat (Rattus argentiventer) and the house rats to dissolve the nutrients of the fleshy parts. The
(Rattus rattus diardii). tougher indigestible parts such as the bones, skulls
are regurgitated out.
With its prolific reproductive rate, whereby a sexually
mature female could conceive multiple times a year and Barn owl population in tandem with preys’
produce an average of 8 pups in each litter, rat populations availability can be expanded in the plantation by
can mushroom and threaten the oil palm plantings within construction of boxes at vantage points – about 5
a short time, given the right conditions. meters from the ground and shaded by the palms’
canopies.
Various researchers have estimated crop loss caused by
rats feeding on fruit mesocarps to be able to reduce oil A zinc baffle or collar should be placed on the pole
yield by 5 – 10% (Wood, 1976; Liau, 1990). Badly gnawed to prevent snakes etc. from predation of the owl’s
male and female inflorescences, as well as young palms eggs and new born chicks. These boxes should be
killed by rat attacks further contribute to crop loss. inspected regularly and repaired where necessary in
order to optimize its’ occupancy.
Barn Owls
At United Plantations, the barn owl is the first line
The Barn owl is a much-loved countryside bird by oil palm of defence against this serious pest. Where owls
planters as it predates on rats, resulting in major reduction of could not cope with the high rat population, first
rodent damage. It is also one of the most widely distributed generation rat baits such as warfarin are employed
birds in the world. to selectively bring down the population. Warfarin
baits are preferred as they are relatively safer to
This bird is the best partner to growers due to its ability to barn owls than second generation rat baits. Based
adapt well to oil palm plantations. It survives on a staple diet on the low usage of rodenticides in the past years,
of 99% rats. It is estimated that a pair of barn owls together we can infer that the barn owl programme has been
with its chicks consume about 800 to 1,000 rats per year. fairly successful in keeping rats under control.
Year 2018 2017 2016
Total Boxes 2,491 2,393 2,284
Total Area Under Owl (Ha) 32,322 31,308 31,040
Box to land ratio in Scheme 12.98 13.08 13.59
% Occupancy in Scheme 54.16 52.57 47.00
Total Planted Area (Ha) 35,813 34,808 36,496
Box to land ratio over Total Planted Area 14.38 14.55 15.98
Rodenticide ai/planted Ha (kg/Ha) 0.0008 0.0007 0.0012
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Using leopard cats (Prionailurus bengalensis) as biological pest control of rats in UP Kalimantan estates. Shown here are tagging with
radio collar for tracking their ranging behaviour.
Leopard cats The cats are strictly nocturnal and prefer to hide and
rest in thick bush, primarily consisting of sword-fern
Since its formation in 2011, the BioD in UP/PTSSS ( Nephrolepis sp) during day-time, but forage both on
has recorded a surprising number of leopard cats, the ground and in the palm canopy at night. Some
Prionailurus bengalensis, in the estates. The species is preliminary results conclude that leopard cats can feed,
common throughout Southeast Asia in undisturbed as reproduce and thrive in a palm oil estate, with a mean
well as altered habitats. They are common in some oil home range (95% MCP) for male leopard cats 1.39 km2
palm estates; however, little is understood about their (n = 5; SD = 1.40 km2 ) and a mean home range of female
role as rat predators in a plantation landscape although cats smaller at 1.26 km2 (n = 4; SD = 0.36 km2). In areas
studies have shown that rats and mice constitute 93% where rats constitute the main prey, leopard cats eat an
of the leopard cat’s mammalian diet (Rajaratnam et average of 2-3 rats per day. Amphibians, snakes and
al.,2007). Field observations demonstrate there is a birds are also on the menu.
negative relationship between cat numbers and rat
population, with high abundance of cats associated With a body weight range of 2.5-4.0 kg leopard cats are
with low rat numbers and vice versa (Silmi et al., 2013). expected to consume more food than the much lighter
barn owl, a factor which may be favourable in its role as
To date, nine individual leopard cats have been collared a rat control agent (Silmi et al., 2013).
and continuously tracked for 23 months, during which
we collected a total of 1,500 GPS locations. These are Our observations reveal that leopard cats can reproduce
used for estimating the respective cats’ home-ranges rapidly with some females giving birth to 4 cubs, with
and dispersal patterns. reproduction cycle every five to six months.
Relative Abundance Indices
19.46
12.77
9.34
7.96
Relative abundance is the percent composition of an organism of a particular kind relative to the total number
of organisms in the area. The trendline shows the cat abundance increasing in the past three years which
indicate that leopard cats adapt well within PT SSS’ oil palm plantation habitat.
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Conversion to Energy Saving T5 Fluorescent Lamps To date 99% of the T8 lights at the Unitata refinery
and another 60% of the lights in several estates
As part of our efforts to improve energy efficiency which numbered in excess of 4,000 lights have been
and to reduce wastages, there is an on-going exercise converted to T5 lighting, resulting in an energy
to replace the existing T8 fluorescent lamps with the saving of 92.5 kW.
newer T5 lamps.
Going forward the Company is also actively exploring
Some advantages of the T5 tubes are: other energy efficient measures.
o A 25% gain in luminous efficacy vis a vis T8 Recycling of pesticide containers and scheduled wastes
lamps (GRI 306-2, GRI 306-4)
o Light output that is closer to natural light To avoid contaminating the environment and prevent
spectrum which is beneficial to human health misuse of pesticide containers and other scheduled wastes
we have been collecting and disposing off triple rinsed
o Less heat emitted during operation, with pesticide containers, spent lubricants, used batteries and
potential saving in air conditioning costs spent fuel filters through certified waste managers. The waste
managers will either safely recycle these items or dispose of
o Minimal (5%) degradation in lumen output them in accordance with government regulations.
over the life of the lamp as opposed to 20%
degradation for the T8 lamps There is no deemed hazardous waste under the terms of
the Basel Convention Annex I, II, III, and VIII, that were
o Does not require replacing existing fixtures transported, imported, exported, or treated.
Triple rinsed plastic pesticide containers (MT) Used batteries (pieces)

2018 2017 2016 2018 2017 2016
UPB 29 25 27 UPB 161 263 284
PTSSS 1.8 1.9 0.5 PTSSS 15 9 47
Spent lubricants (lit) Spent fuel filters (pieces)

2018 2017 2016 2018 2017 2016
UPB 46,909 38,441 47,987 UPB 4,021 3,732 4,736
PTSSS 3,242 5,775 3,585 PTSSS 175 508 358
Temporary storage unit for used pesticides containers and schedule waste prior to recycling.
111
Community
Our business provides livelihood to families, small businesses and organisations in and around the plantations
resulting in many people depending on our Group. Maintaining a good relationship with our local communities
are therefore a key priority to our organisation.
Contributions to Society and the Local Community

13.Community Welfare
Our commitment to promoting socio-economic Today, our Group has 9 Primary Schools and 7
policies and progress in the local communities Kindergartens on its properties which are maintained
we operate in by the Company, providing education for more than
500 children ranging from age of 5 to 12 years from
within and outside the plantations.
UP has an obligation to monitor and manage any impact
our operations might have on these communities and Estate Group Hospitals
at the same time ensure that our local communities
receive financial, social support and benefit by The Company operates two well-equipped estate
developing the local communities in which we operate group hospitals in Malaysia and Indonesia with trained
by creating jobs, paying taxes and doing business with resident Hospital Assistants supervised by a Medical
local enterprises. Doctor.
Through respect and engagement with the local Regular inspections of the employees’ housing are made
communities, important and continued integration by the Health Care Team to ensure that sanitation,
being a key factor for the plantations’ future success. health and drainage standards are up kept according to
the Company’s policies.
Social Commitments
In addition, we also organize visits by our medical staff
Our Company’s commitment towards providing to the neighbouring villages for the benefits of the local
and improving social amenities remains very much a communities.
hallmark within our Group. Continuous improvements
were made during 2018 to maintain the highest Medical services are open to our rural neighbours
possible welfare standards for our workforce and ensure who in the past lacked access to basic healthcare and
high standard educational facilities for the children. immunisation programmes.
Scholarships are provided to needy children among the
Indonesian villages in which we operate. We also organize visits by our medical staff to the
neighbouring villages for the benefits of the local
Infrastructure investment and support communities. Medical services are open to our rural
neighbours who in the past lacked access to basic
Supporting the surrounding communities in the form healthcare and immunisation programmes.
of investments in infrastructure projects, participation
in cultural and sports events as well as religious
ceremonies are important avenues to build up a sense of
togetherness between the company and neighbouring
communities in Indonesia.
We finance and provide services to improve rural

communities’ access to services and markets, as well
as to create employment. Our initiatives include the
construction, maintenance and renovation of roads,
bridges, places of worship, and community facilities
such as community halls, sports and cultural facilities.
The clinic providing medical care to our workers and residents on
Jendarata Div III and Alfa Bernam as well as Unitata.
112
Kindergarten children joyfully posing for a photoshoot.
Of key importance has been the collaboration between UP
14. Free Prior Informed Consent and the local communities, especially the ex-landowners
(GRI 412-1, GRI 413-1, GRI 413-2)
or tenants and their testators as well as the various
Our commitment in Indonesia to the principles stakeholders from the villages in the designated area.
of Free, Prior and Informed Consent and to
adhere to these principles in all our negotiations The land tenure study and mapping
and interactions with stakeholders
The land tenure study, including the mapping of the
FPIC and Lingkar Komunitas Sawit (LINKS) land, provided important information about the history
of the Communities’ land tenure. According to the
In order to fulfil one of the key requirements of the findings of the land tenure study there were 332 family
HCV/ HCS studies in relation to the area identified for groups of the ex-land owners or tenants and their
plasma development, UP has cooperated with LINKS testators, who used to be the holders of the land of
since September 2014 and is fully committed to RSPO ±2,500 Ha in Kumai Estate.
New Planting Procedures for Oil Palm.
The land tenure and mapping study revealed information
LINKS is an independent NGO providing social on overlapping claims and individual land owners not
consulting services with the aim of supporting multi- willing to participate in the plasma development plans.
stakeholder efforts in achieving economic and social These areas together with the identified conservation
justice in the palm oil sector of Indonesia. areas have been set aside from the total identified
concession of area, leaving approximately 450Ha
LINKS completed their consulting services with PTSSS available for new Plasma development.
in September 2017 and has done a very good job
assisting UP in complying with a proper FPIC process The below diagram indicates the various steps to the
and necessary planning for the Plasma development FPIC process which ultimately will enable the potential
plans in Kumai. establishment of the Plasma plantations.
Engagement, Stakeholder Identification and FPIC The above approach have paved the way for a structured
Training plasma process enabling further areas to be developed
for the benefit of the local community as described
Since 2014, LINKS has worked on social research under the plasma development section on page 119.
and mapping, information dissemination, conflict
mediation and training of FPIC related issues for the For further details on the FPIC reports, please refer
local communities, UP’s employees and the local to http://www.unitedplantations.com/sustainability/
government in preparation for our Group’s new Plasma community_fpic_external.asp
development plans.
Various steps to the FPIC process
114
Going forward it is important for all of the stakeholders Making the HCV, HCS and FPIC approach a requirement
involved to comprehend that the whole HCS study for certification under the RSPO NEXT and the revised
including the process of FPIC does not end with the RSPO P&C 2018 and as part of purchasing policies
signing of the Plasma Agreement. of large companies, it is a good move to prevent and
minimize deforestation in specific concessions and
The monitoring and evaluation of progress is important areas. We subscribe to the above in our new oil palm
and will be carried out routinely in order to identify issues plantings and aim to fully comply in our sourcing of
and find solutions together thereby maintaining a good crop from third parties in the not too distant future. is
relationship and a successful Plasma collaboration project. a good move to prevent and minimize deforestation in
specific concessions and areas.
Sustainability development and forest protection
can be achieved by effectively implementing the We subscribe to the above in our new oil palm plantings
processes summarized in the below diagram. HCV, and aim to fully comply in our sourcing of crop from
HCS assessments (HCS Converged Approach) and third parties in the not too distant future.
FPIC processes must be integrated together with the
other information specified above in order to develop However, it should be acknowledged that unless
appropriate development options. (HCS Converged government support and local people and communities
Approach) and FPIC processes must be integrated can see their own economic interest and historic
together with the other information specified above in entitlements better met through forests set aside and
order to develop appropriate development options. protected for the long term rather than the short-term
gain, it will be difficult to prevent deforestation no
The diagram below indicates the many important matter how good intentions companies may have.
processes and inputs required in order to make an
effective land use plan for concession areas. Operations with significant actual and potential
negative impacts on local communities. (GRI 413-2)
Balancing the effects of land conversion to oil palm
on global climate issues with potential local/regional We conduct annually the Environmental Impacts
socio-economic benefits are extremely challenging, Assessment (EIA) and Social Impacts Assessment
given the vastly differing spatial and temporal scales (SIA) and the positive impacts are further replicated
involved and the different metrics used to measure and enhanced.
these impacts.
The negative impacts such as unpleasant odour from
This is only possible by using a comprehensive approach the effluent pond are mitigated by various action plans
to land development decisions that integrates relevant such as installation of aeration devices and the Biogas
social, economic and environmental inputs via multi- Plant. The rehabilitation of riparian is in progress to
stakeholders negotiations. mitigate water pollution.
HCS Converged Approach

- CHG Emissions maps
Other Assessments for varying thresholds
- Land capability
- Risks to soil/water
- Regional biodiversity Community
Goals
Government Policies
Relevant to Integrated Assessment &
Development Options HCV
Land Development
Company
FPIC
Goals
Multi-Stakeholder Negotiations
Agreed Land Development Decisions
Implementation Plan
t$MFBSHPBMTTPDJBM FDPOPNJD FOWJSPONFOU
t%FUBJMFEQSPDFEVSFTGPSIPXUPBDIJFWFUIFTFHPBMT
115
A dialogue session on land matters was held on the 10 October 2018, between Mr, Martin Bek-Nielsen, Director of Finance & Marketing
together with Prof Dr. Ir. Sigit Hardwinarto, M Agr Direktur Jendral Planology Kehutanan and Tata Lingkungan and Dr. Ir. Bambang
Soepijanto Ex- Direktur Jendral Planology Kehutanan dan Tata Lingkungan, and our Management Team at PTSSS, Mr. Muhammad Ratha,
President Director and Ibu Dewi Suyatman, Sr. Manager Legal & Corp Affairs.
“Koperasi” for worker’s daily provision at PT SSS. Free program “Posyandu“ for pre and post natal care.
CSR project for the “masyarakat.” Scholarships to local students who excelled in their studies.
116
miscommunication, cases of wrongful compensation
15. Grievance Resolution amounts and frivolous claims.
Our obligation to a mutually agreed and
documented system to deal with complaints It is however extremely important that land disputes are
and grievances, which is implemented and taken seriously and are well documented in order to ensure
accepted by all parties transparency and evidence in connection with various
ongoing cases.
Land Disputes in Indonesia UP has been involved with several thousand land deals
with the local community and whilst most cases of disputes
In Indonesia land disputes are inevitable and part of have been amicably resolved, there still exists unresolved
managing plantations in the country. To minimize land cases that are in the process of being resolved based on
issues, important free, prior and informed consent sessions facts and full transparency under our Standard Operating
with stakeholders are conducted as a vital part of sustainable Procedure (SOP) for Land Disputes Settlement as per FPIC.
plantation development.
For further details on SOP for Land Dispute Settlement as
Land disputes can be based on many different variables per FPIC, please refer to http://www.unitedplantations.com/
and reasons. Some cases are genuine and can be due to sustainability/pdf/Land%20Dispute%20Resolution%20
historical reasons, bad heritage, misunderstanding and Flow%20Chart.pdf
Summary of Disputed, Resolved and Settled Cases from 2016 to 2018 (PT SSS)
Year Resolved/Settled Cases Estate Disputed area (Ha)

2016 16 Lada Estate 18.14
2016 2 Runtu Estate 606.50
2016 4 Arut/Kumai Estates 17.05
2017 15 Lada Estate 65.78
2018 2 Lada/Arut Estates 1.33
Total 39 708.80
Hectarage
Date Claim Name of Nature/Status of Dispute
Cert/SKT Blk/Flds Claimant’s Progress To date
Submitted Claimants Docs Status of Docs & Facts
Demand
Completion Stage
o The process of transferring
ights at the BPN
Jaka 30 certs 39 TKD (6 Requesting for Plasma. o Still waiting for the draft
15-Sep-14 Cert 88
Suherman @ 2 Ha people) Documents incomplete release of rights and power
from the land owner
(cooperative management)
117
Continuous Stakeholder Engagement in an affective, timely and appropriate manner that is
open and transparent to any affected parties.
UP has engagements with various stakeholders in
and around our areas of operation. Our engagement External Stakeholders
approach varies from formal to informal.
They are Statutory Bodies, Indigenous People, Local
All enquiries by stakeholders are recorded and monitored Communities, Smallholders, Independent FFB Suppliers,
in order to resolve any ongoing issues as sustainable Other Suppliers, Local and National NGOs.
development cannot be achieved without engagement
with stakeholders. Internal Stakeholders
Grievance Procedure for Stakeholder Issues (GRI 102-53) All employees of United Plantations Berhad and their
respective Trade Unions.
Under our RSPO framework, we are obligated to deal
with issues openly. RSPO Principle 1 states the need for a Procedure for Handling External Stakeholders’ Issues
commitment to transparency. RSPO Principle 6.3 further (GRI 102-53)
states that there is a mutually agreed and documented
system for dealing with complaints and grievances, The Company Secretary of United Plantations Berhad
which is implemented and accepted by all parties. will be responsible for the handling of all enquires
and grievances against the Company. The stakeholder
This procedure is given to ensure that local and other may lodge their enquiries/grievances to respective
interested parties understand the communications and Estate Manager or Head of Department or direct to the
consultation process for raising any issues with UP. Company Secretary. The Company Secretary’s address is
as follows:-
UP accepts its responsibility as a corporate citizen and
wants local communities to be aware and involved in The Company Secretary
the communications and consultation methods it uses, United Plantations Berhad
thereby aiming to resolve grievances (including those Jendarata Estate
originating from employees) through a consultative 36009 Teluk Intan
process and realizes that any system must resolve Perak Darul Ridzuan, Malaysia
disputes in an effective, timely and appropriate manner Tel : 05-6411411; Ext – 215/334
that is open and transparent to any affected party. Fax: 05-6411876
Email: [email protected]
Recognising the value and importance of communication
and consultation in clearing up misunderstanding/ For further details on our grievance redressal procedure,
conflicts/grievances or raising any issues with United please refer to http://www.unitedplantations.com/
Plantations Berhad, the following procedure is adopted, sustainability/community_grievance_redressal.asp
Meeting with local community on allocation of Plasma lot.
118
To date 1316.36Ha of Plasma have been developed
16. Plasma Development (for Indonesia) for 804 smallholders and another additional 618.99
Our obligation in Indonesia, to help smallholders hectares is expected to be provided and developed for
to develop their land including land preparation, the communities surrounding the Company’s properties
for cultivation of oil palms to uplift the living during 2019 to 2020. All 804 smallholders are directly
standards of the local communities supported by the Company. Partnership with the local
communities is crucial to achieve success in Indonesia
and it is therefore of utmost importance that the local
communities also benefit from UP’s development.
Plasma Schemes / Outgrowers Scheme
Smallholders’ Field Day
The Indonesian Government’s objective is to ensure the
establishment of Plasma Projects equivalent to 20% of a Oil palm smallholders have a critical role in helping
Company’s planted area. At our Indonesian Plantations, us achieve our sustainability goals, they are part of the
we are actively involved with Plasma Scheme which are supply chain providing an estimated 40% of world palm
designed to assist smallholders to become independent oil production.
plantation growers.
The RSPO defines smallholders with less than 50
Under the Plasma Scheme, UP helps smallholders to hectares of cultivated land and are mostly family-
develop their land, including land preparation and for run, with some sustenance farming to support basic
cultivation of oil palms. Once developed, the plantation needs. As part of our Company’s involvement, UP
is managed by the Company for one cycle after which continuously engages with smallholders. The recent
it will be handed over to the smallholder for self- Smallholder’s Field Day was held on 17th November
management. During the first cycle, proceeds from the 2018. We invited 150 smallholders from local districts
Plasma-areas minus development costs, is paid to the to visit our plantations to get a better understanding of
farmers by the Company. good agricultural practices, sustainability initiatives and
environmental protection.
We expect the scheme to provide more opportunities for
the smallholders and help alleviate poverty. With this We are pleased to inform that 101 smallholders or equivalent
programme, we hope to steer them away from illegal to 67% of the smallholders attended the Smallholders Field
logging as well as slash-and-burn activities that can Day. The smallholders were given training sessions in safe
have a huge negative impact on the environment. In handling of pesticides with appropriate Personal Protective
the early years of plantation development, before the oil Equipment (PPE), effective use of pre-emergent herbicides
palm trees reach maturity, the livelihood of smallholders for less chemical usage, integrated pest management (IPM)
is supported through employment by the Company. mechanized harvesting in order to assist them with their
agricultural interests. In addition, demonstration on fire
They typically work as employees on our plantations, combat procedures were carried out to further enhance
while they at the same time get an understanding of the awareness of neighbouring smallholders in case
oil palm cultivation and best management practices. of fire incidence and were informed to contact UP for
The Company provides the smallholders with sufficient emergency assistance within the close vicinity.
resources and is committed to buy their FFB at
government determined rates. To assist them, we provide Food Security
vital training on plantation management practices and
financial arrangements. To ensure local food security, as part of the FPIC process,
participatory Social Impact Assessments (SIA) and
UP’s commitment to Plasma Project participatory land-use planning with local peoples, the
full range of food provisioning options are considered.
The Company’s internal Plasma team has taken over the There is transparency of the land allocation process. The
responsibility of the various plasma projects from our intent is to ensure food security and land use choices are
external plasma consultant Mr. Rudolf Heering who has considered as part of the formal FPIC process, prior to new
retired in August 2015. Further progress has been made developments. For further details on food security, please
in 2018 with more than 31.23Ha of new plasma areas refer to http://www.unitedplantations.com/sustainability/
having been planted. community_fpic_new_planting.asp
Smallholders’ Field Day which was held on 17 November 2018, had participants from local districts visiting our plantation to get a better
understanding on good agricultural practices, sustainability initiatives and environmental protection. 119
The fractionation plant at UniFuji Refinery Complex.
Marketplace
(GRI 102-15, GRI 103-2)
Through investment in our people, technology and focus on our supply chain UP is committed to providing high
quality certified sustainable and traceable Palm Oil products and services to customers worldwide. We aim for
continuous improvement and work towards building long-term relationships through interaction and discussions
about sustainability, global, trends, health and nutrition with customers, suppliers, business partners and other
stakeholders in the marketplace.
By interactions with customers and other stakeholders, a deep understanding of this responsibility has been developed
and provides a healthy avenue for continuous improvement in quality and food safety by minimizing risks throughout
the supply chain. Furthermore, UP has gained much knowledge on market trends and have become more capable of
responding to them.
17. Product Quality

Quality is an integral part of UP’s corporate
culture. It is our strong objective to deliver
premium quality products and services that are
safe and based on a high level of responsibility
Quality Policy
It is the Policy of UP to produce high quality palm oil, palm kernels, coconuts and their derived products to the total
satisfaction of our worldwide valued customers.
Our Quality Philosophy Includes:-
UU pholding the name and reputation of UP as a top producer of high quality palm products.
NN urturing a diligent work force who takes pride in contributing to the development of the Company.
II nitiating and innovating positive, progressive work ethics, methods and incorporating a winning culture.
TT raining of personnel is the key to upgrading our skills and keeping in trend with the marketplace.
EE nsuring that only high quality palm products are produced, to the satisfaction of our customers’ needs.
DD elivering decisive efforts in Research and Development to continuously improve our working methods,
efficiency and product quality.
UP recognizes the importance of safeguarding its customers by ensuring the highest standards in quality as well as
environmental and social care.
Our quality focus starts from our Research Department and continues through every aspect of our agricultural, milling and
downstream activities until the final product is delivered to our customers. The diagrams shown on pages 130 to 132 provide
a clear overview of the many steps involved in ensuring palm oil products of high quality.
121
Interesterification and packaging of specialty fats and
%GTVKſECVKQPUHQT(QQF5CHGV[5WUVCKPCDKNKV[ oils.
and Others (GRI 416-1, GRI 417-1)
Our Commitment towards food safety and Through process controls and a disciplined
sustainable and consistent high quality products manufacturing culture, we ensure that quality
through relevant international certifications assurance procedures are in place in order to comply
with customer requirements.
Unitata Berhad – Quality Policy Consumers today have an increased focus on safety and
health as well as producing food through a transparent and
Unitata is committed to producing high quality
li palm traceable supply chain based on optimum processes that
oil products which are safe for human consumption focuses on reducing processing aids, water and energy and
and meets the statutory and legal requirements and the overall GHG footprint. Furthermore, it is important
overall satisfaction of our customers. for consumers that social care for employees as well as
protection of forests, including High Carbon Stock and
As part of our commitment to uphold Unitata’s High Conservation Value areas are associated with the food
historical standing as a high quality producer, much they choose to buy.
emphasis is placed on quality assurance throughout
the various stages in the refinery. To keep up with increasing demands on traceability in
the supply chain, we have obtained numerous local and
This is evidenced through our continuous investments international certifications as follows: ISO 9001, HACCP,
in the latest process technology and high-end Halal, Kosher, BRC, SEDEX, FDA, RSPO SCCS, GMP,
sophisticated analytical equipment providing accurate MeSTI and MPCA. In addition to that, Unitata had
and timely controls to ensure customer satisfaction in successfully obtained GMP+B2 Feed Certification Scheme
relation to high quality and food safety. in September 2017 for supply of acid oils into Europe for
feed industry. GMP+B2 provides assurance of feed safety in
Edible Oil Refining and Specialty Fats Production all links of the feed chain.
Attention to quality, investment in production facilities As a requirement for the above-mentioned certifications,
and ongoing product development are priorities in order Unitata is audited annually by the various certification
for Unitata to meet challenging and changing customer bodies and by customers. In 2018, 8 certification audits
demands. and 3 customer audits have been conducted. In addition,
In order to cater for the growing demand of Unitata has audited and assessed key suppliers of raw
high quality products our refinery is equipped materials, packaging, and ingredients. All raw materials,
with automated manufacturing processes such as packaging materials and ingredients are certified as food
Neutralization, Bleaching, Deodorization, Fractionation, grade.
Unitata’s Task Force meeting.
122
Furthermore, we have established and validated our process the background knowledge for mitigation work. In
controls to consistently minimize the risk of contaminants June 2016 collaboration work was initiated by the
and meet acceptable food safety standards. American Oil Chemist Society in developing statistical
measurements for a new analytical method called AOCS
Unitata also stresses on the element of food defence as Cd30-15: Analysis of 2-and 3-MCPD Fatty Acid Esters
part of product security. This assures the protection of and Glycidyl Fatty Acid Esters in Oil-Based Emulsions.
our products from malicious contamination, adulteration
or theft. Unitata was one of the 17 internationally recognized
laboratories, after a screening process, to participate in
All packed products are traceable to the raw materials, this collaboration. The new method has been endorsed
additives and packaging materials used via batch and included in the AOCS compendium of Official
and code numbers on the labels. The labels meet Methods in July 2107.
the requirements of the Malaysian Food Act and the
requirements of the respective export markets. As part of establishing credence on the accuracy and
precision over the analytical protocols the laboratory
Relevant food safety training is of high priority for all voluntarily and successfully participated in proficiency
employees in order to keep abreast with the increasingly Performance Assessment Scheme (FAPAS) held in
demanding food safety requirements. September 2017.
LOW 3-MCPD, Glycidyl Esters and MOSH & MOAH During 2018 further improvements and fine tuning of
the Laboratory equipment has taken place and enabled
3-MCPD and Glycidyl Esters are contaminants formed an even greater level of quality assessment.
during the processing (refining) of edible oils and fats
and have become a topic of concern for vegetable oil MOSH & MOAH
refiners and consumers based on a report published by
the European Food Safety Authority (EFSA) in May 2016. Of nearly equal repute in being a contaminant to final
oils and fats is the new and emerging contaminant called
The EFSA Panel on Contaminants in the Food Chain Mineral Oil Hydrocarbons (MOH). It encompasses
(CONTAM Panel) published the results of its assessment two main sub groups namely saturated hydrocarbons,
of the safety of 3-MCPD and Glycidyl esters with respect MOSH and aromatic hydrocarbons, MOAH. The two are
to human health. generally present at a ratio of 80/20 with MOAH trailing
behind MOSH.
Available evidence from animal studies indicates
that kidney toxicity is the most critical health effect of MOSH is believed to accumulate in human tissues and
3-MCPD in rats. Using this data, EFSA established a cause adverse effects to the liver while MOAH, the
tolerable daily intake (TDI) for 3-MCPD for humans greater menace of the two, is reported to be genotoxic
which represents the maximum amount that can be carcinogens - causing damage to the DNA leading to
consumed daily over a lifetime without being harmful to cancer. Hitherto, there has been no binding threshold
health. It includes a very large margin of safety. limits set by the EU legislature save for Germany, who is
leading the way in drafting out their own national plan.
The TDI for 3-MCPD has been calculated as 0.8
micrograms per kilogram of body weight per day (μg/ Regulations from member states such as Germany
kg bw per day.) quite often end up being adopted by the greater Europe
– a trend which we have seen in the past. Currently,
With the combination of premium quality fruit bunches customers favour suppliers whose thresholds, through
derived from our own plantation on UP combined consensus, are guided by the rule as low as reasonably
with Unitata’s processing know-how, we have been achievable, ALARA.
able to produce refined palm oil with levels of 3-MCPD
and Glycidyl Esters which for over 20 years have been While not compelled by legislation it remains chiefly
considerably lower than the industry’s norm, including fiduciary to be prepared for the future challenge. In this
the TDI levels mentioned above. respect a task force on MOSH/MOAH chaired by the
CED was set up in 2018 to undertake the study of this
The decades’ old sound practices have to-date built subject in view of meeting the ALARA levels. Since then,
a scaffold for research to intensify focus on mitigating baseline occurrence of the contaminants has been drawn
contaminants to near non-detection. and ensuing mitigation efforts have been carried out
both through the mill and the refinery. The committee
Whilst the majority of refineries as time passed opted continues to meet on a quarterly basis to monitor the
for easier and cheaper refining methodologies, Unitata levels within the group.
has firmly stood by her charter to place quality above all
else and maintained her position as a leader within the As a result of our stringent quality controls and
refining industry when it comes to sourcing the highest assessments, UP and Unitata are able to meet stringent
possible quality of palm components. customer demand for oils used in the production of
infant formulas. We are committed to further reduce
The company’s decision to invest in a modern laboratory, the levels of these contaminant to the benefit of the
the Nair’s Wing, was an integral part in securing customers globally.
123
Target rate:
> 80%
Customer Satisfaction Besides that, Unitata also adopts an on-going

(GRI 102-43, GRI 102-44) communication method with the existing customer to keep
them engaged with their products. Regular communication
At Unitata, the annual customer satisfaction survey with customers enables Unitata to develop products and
is used to measure how our finished products meet provide the necessary service to ensure a continuous
our customer’s expectations. This annual survey is customer satisfaction which cannot be taken for granted in
an important measure in relation to our continuous the competitive business of refining.
improvement attitude and provides us with an important
understanding of our service and collaboration with our Non-compliance with regulations concerning product
customers based on their valuable feedback. labelling. (GRI 417-2)
The survey focuses on three key areas which are: Unitata had received a cargo detention notice
from the US FDA authority in March 2017 for
(i) Quality of Product supply of our packed products due to insufficient
(ii) Quality of Service nutritional information on product labelling.
(iii) Delivery timeliness Necessary changes to the nutritional information
on our product labelling was made based on FDA
The results are analyzed and tabulated in an appropriate recommendations to ensure that future exports are
graphical form for presentation at the management in full compliance with the FDA regulations. Since
review meetings as well as during the various certification then, there have been no further issues in terms of
audits throughout the year. export of our packed products into USA.
Meeting key customers globally is an important part of UP’s downstream business.

124
19. Sustainability and Traceable Supply Chains Origin of FFB Processed at UP Mills
Our Commitment to ensure that the certified 1%
sustainable palm oil and palm kernel oil used in 7%
the production of finished goods actually came
from sustainable sources 20%
The interest for certified sustainable and segregated palm 72%

oil is increasing as many global brand manufacturers have
committed to only use RSPO certified and segregated
palm oil solutions.
Own estates (certified), Malaysia Own estates (conventional), Indonesia
This development combined with new labelling rules Plasma, Indonesia Third party, Indonesia
introduced in Europe effective December 2014 has

increased demand further.
Traceability at UP
(a) Upstream Operations (United Plantations)
One of Unitata’s key commitments to its customers is
to ensure that our finished products can be traced back Traceable to Plantations
to its origins, namely palm oil mills and further to the List of Mills
Own Crop (FFB) Outside Crop (FFB)
plantation level.
Jendarata 100% Nil
The purpose is to ensure greater transparency in our Ulu Basir 100% Nil
supply chain. Unitata is currently in a favourable
Ulu Bernam 100% Nil
position to meet this growing demand due to the direct
link with UP’s supply of RSPO certified sustainable and UIE 100% Nil
segregated palm oil traceable back to the plantations. PTSSS 100% 100%
The tables to the right indicate that crop processed in all

our mills in Malaysia and Indonesia can be traced back
to the plantations.
(b) Downstream Operations (Unitata)
Today 100% of UP’s total production of CPO is traceable
back to the plantations. Traceable Traceable
Raw
Refinery to to
material
Mill Plantations
In Malaysia, all CPO used at our Refineries can be traced Unitata CPO 100% 100%
back to the mills and plantations. CPO produced in
Indonesia is sold to neighbouring refineries as we don’t
have any downstream operations in the country.
All UP’s PK can be traced back to the plantations, All CPO produced in Malaysia is RSPO certified and
however, as the PK produced by UP is insufficient to segregated. In Indonesia, we have undergone RSPO
cater for the needs of our refinery’s use of crude palm certification for part of our plantations (with HGU
kernel oil, we currently source significant volumes which certificates) and have received RSPO certification for
we are only able to trace back to the mills. these areas in 2018.
Going forward, we will be working with third party Full certification and production of RSPO certified
suppliers to increase the percentage of crude palm kernel and segregated palm oil traceable to the mill and
oil that can be traced back to the plantations in line with plantations is expected to be reached in 2020 for all
increased customer demand for traceability. our plantations areas in line with receiving the final
land titles (HGU certificates) for all our Indonesian
Our assurance for the level of traceability is based on our properties.
ability to identify the parent company, the mill name,
mill coordinates, mill certification status from suppliers In this connection, we are increasing awareness by
and plantations from where the crop (FFB) is produced. retraining and audits within all operational areas
of our group. The results of these measures will
United Plantations is committed to moving towards full be monitored and incorporated in our efforts for
segregation and traceable supply chain models and is continuous improvements, and highlighted in our
therefore slowly reducing mass balance and Greenpalm future reports.
solutions.
125
The weighbridge at the UniFuji Refinery.
Supply Chain Certification
In 2008, before RSPO Supply Chain Certification was Unitata had their first verification audit by one of their
introduced, Unitata was the first Company to ship key customers for supply of RSPO certified material in
refined RSPO certified segregated palm oil to customers November 2017.
worldwide which was verified by independent surveyors.
The audit was conducted independently by a third
In December 2010, Unitata received its Supply Chain party auditor appointed by the customer . It was a full
Certification and have since been able to handle and traceability audit on the origin of materials supplied by
deliver first class sustainably certified and segregated Unitata Bhd.
palm and palm kernel oil solutions to customers
worldwide based on the RSPO supply chain traceability It was a successful audit and the auditor concluded that
system. the material sourced by the customer is 100% traceable
throughout the supply chain.
The RSPO cooperates with the traceability service
provider, UTZ who through the RSPO Palm Trace system
ensures that the necessary traceability is in place in order
for proper certification of palm and palm kernel oil that
is used in the refining process.
The supply chain certification is the buyers’ and

consumers’ guarantee that the palm oil or palm kernel
oil used in the production of finished goods actually
comes from the claimed RSPO source.
This requires records to be kept to demonstrate the

volume of CPO or CPKO sold as sustainable oil does
not exceed the amount produced by the upstream RSPO
certified mills.
A well laid out warehouse for packed products at Unitata.
126
20. Evaluation of Supplier/Contractors’ c) Protect from any forms of discrimination (Major)
Sustainability Commitment
(GRI 308-1, GRI 407-1, GRI 408-1, GRI 409-1, GRI 412-3, d) Equal remuneration (Major)
GRI 414-1)
e) Fair employment contract as per legislation (Major)
As an important step towards improving our
sustainability within economic, environmental and f) Fire safety plan (Minor)
social areas of our business, we have invited our
suppliers and contractors to join us along the journey. g) Business conduct (Major)
Prior to any formal engagement with suppliers or
contractors within our Group, a screening process by h) Energy consumption (Minor)
distributing a self-assessment questionnaire against
social and environment aspect is carried out. i) Zero burning (Major)
Our aim is to improve sustainability in our supply j) No deforestation (Major)

chain and ensure our suppliers and contractors
collaborate with us in the compliance of company k) Reduction in GHG (Minor)
policy as well as legal requirements. The scope of
self-assessment includes: l) No new development in HCV/HCS/Peat areas (Major)
a) Safety and Health (Major) The process to prioritize and assess our suppliers and
contractors as flowchart below:
b) No child labor (Major)
Distributing self-assessment questionnaires.
Analyse the level of compliance upon return of self-assessment questionnaire.
Suppliers /Contractors evaluated for compliance on Major indicators will be given priority for trading.
Suppliers/Contractors with room for improvements will be further coached and evaluated annually.
Suppliers and Contractors Assessed – United Plantations Bhd

Number of key suppliers 45
Number of key suppliers assessed 35
Percentage of key suppliers assessed (%) 77.78
Number of key contractors 140
Number of key contractors assessed 110
Percentage of key contractors assessed (%) 78.57
*Up to October 2018.
Please log into the link below to view the Assessment Questionnaire:
http://www.unitedplantations.com/sustainability/marketplace_assessment.asp
127
21. Commodity Prices 22. Currency Fluctuation
Prices of commodities are mainly the result of future Managing adverse foreign exchange fluctuations based
expectations of Supply and Demand. Managing fluctuating on Board policies is an important part of our business in
commodity prices based on Board policies is an important order to in order to protect shareholder value
part of our business in order to protect shareholder value
Malaysia produces about a third of all palm oil in the For the export-oriented Refining Industry In which
world. Total palm oil production in Malaysia for 2018 was Unitata operates, a weak Malaysian Ringgit against
19.52 million tons with around 15% of the palm oil being the USD has been an advantage as most of our costs
consumed directly in the country. are denominated in Ringgit whilst our sales prices
are denominated in USD. More Ringgit per USD has
Because Malaysia is so dependent on exports, palm oil therefore benefited Unitata when USD sales have
prices in Malaysia are very much driven by international taken place.
supply and demand.
With margin pressure in the Malaysian Refining
Palm oil is traded in three forms: the physical market, Industry due to the fierce competition specifically
the futures market and the paper market. Palm oil prices from Indonesia, it is extremely important that
in the physical, futures and paper market are different currency fluctuations are managed in order to
because of transparency, liquidity and ease of execution. safeguard profits and minimize risks.
Numerous variables impact the prices of commodities In the same manner as with commodities, the Group
as indicated below. As this is an area of high risk, uses forward currency hedges to manage some of the
much focus is being directed towards safeguarding the transactions exposure.
exposure to our business in connection with fluctuations
in Commodity Prices. Control and monitoring procedures are similar to
what is done under commodities and is elaborated
Risks are an inevitable part of Unitata’s business where further under the section “Statement on Risk
price risk is considered to be of major significance. Management and Internal control” on pages 149 to
In connection with price risk, both outright prices and 151.
market structure (inverse/carry) are risks which need to
be monitored, mapped and most importantly, dealt with.
The Group uses the physical market, the futures market
and the paper market to manage some of the transaction
exposure.
However, strict control and monitoring procedures

include, amongst others, setting of trading limits
approved by the Board and monitored closely by the
Audit Committee through management reporting
and both Internal and External Audits conducted
frequently.
128
Bottling of Nutrolein Golden Palm Oil under stringent
hygienic conditions at our filling plant at Unitata.
Commitment to quality
Good agricultural practices
Seed
Research and Development
Production
Nursery Nurturing the palms in the initial year
Land Preparation &

Selecting the best palms for planting
Planting
Cover crop establishment fixating Nitrogen,

Immature Palm
suppressing weeds, keeping the soil moist
Upkeep &
and reducing erosion during the first 3 years
Maintenance
before maturity
Mature Palm
Optimizing field practices
Upkeep &
ensuring high yields
Maintenance
Harvesting of
Harvesting of Fresh Fruit Bunches (FFB),
Fresh Fruit
ensuring timely harvesting every two weeks
Bunches (FFB)
Transport of FFB Quick evacuation of FFB after

to the Palm Oil harvesting ensures the best raw materials
Mill for further processing at the palm oil mills.
130
Quick evacuation and processing at the palm oil mill
540 kms of Light Rail System ensuring

FFB transportation quick transportation and good quality
to the Palm Oil Mill FFB, minimizing the environmental
impact whilst being cost effective.
FFB are weighed before further

Milling Operation
processing
Quick processing ensures high quality

Sterilizers crude palm oil. Railway wagons with FFB
enter directly into sterilizers
Screw press station separates crude

Screw Press
palm oil from cooked fruitlets, leaving
station
shell, kernel and fibre
Purifying station ensures final step

Purifying station of crude palm oil production
removing remaining residue and moisture
High quality crude palm oil is stored

Storage Tanks
before being pumped to Unitata Refinery
Receiving high quality crude palm oil

Crude palm Oil
is a vital part of being able to supply
arrives via pipelines
high quality end products to customers
to Unitata Refinery
worldwide.
131
Food safety and quality focus at the refinery
High grade quality raw materials are

Receiving high
checked on arrival and pumped into
quality raw
designated and secured storage tanks for
materials
further processing
Pre-refining high Raw materials are prepared for further

quality raw processing by removing impurities and
materials contaminants
Pre-refined oils undergo various processing

Processing and stages, and are finally refined to produce
final refining tailor made high quality products to meet
customer requirements
Storing of Processed and refined oils are stored in

processed and secured and designated tanks and are
refined oils checked for final quality
Filling and Processed and refined oils are blended into

packing of specialty fats and filled in our automated
processed and filling lines under strictly controlled
refined oils hygienic conditions.
Storing of packed Packed products are securely stored in

products prior to designated warehouses which are under a
delivery controlled environment
Processed and refined oils are delivered in

road tankers, ISO tanks and flexi-tanks to
Delivering bulk and local and export markets
packed products to
customers
Packed products of various packaging are
delivered via trucks and containers to local
and export markets
132
Global Reporting Initiative (GRI) Content Index
(GRI 102-55)
This report has been prepared in accordance with the GRI Standards: Core option. The following summary table
details the location of specific disclosures throughout the report.
GRI Standards Description Reference Section / Reasons for Omission Page
Number
GRI 102: General Disclosures

1. Organizational Profile
102-1 Name of the organisation Front Cover Front Cover
102-2 Activities, brands, products and services Report of the Directors 3, 6, 8
102-3 Location of headquarters Corporate Information 4
102-4 Location of operations Locations of Estates, Factories and Holdings Last page
Planted areas – 31st December 2018 (Map)
102-5 Ownership and legal form Corporate Information – Notes to the Financial Statements 174
102-6 Markets served Geographical Segments – Notes to the Financial 220

Statements
102-7 Scale of the organisation Notes to the Financial Statements 174
102-8 Information on employees and other workers Employees 56
102-9 Supply chain UP & Sustainability Certifications 51

Marketplace 121
102-10 Significant changes to the organization and its supply chain There were no changes during the reporting period 5
regarding size, structure, ownership or supply chain.
However, changes in the senior management team are
featured in Executive Committee and Senior Management.
102-11 Precautionary Principle or approach Statement on Corporate Governance 142
102-12 External initiatives UP & Sustainability Certifications 51
Environment 69
102-13 Memberships of associations UP & Sustainability Certifications 51
Environment 69
In addition to the above, UP has memberships in Malaysian
Palm Oil Association (“MPOA”), Palm Oil Refiners
Association of Malaysia (“PORAM”)
2. Strategy
102-14 Statement from senior decision-maker Message from the CED 31
102-15 Key impacts, risks, and opportunities Engaging Our Stakeholders 41
Materiality 43
Employees 56
Environment 69
Community 112
Marketplace 121
3. Ethics and Integrity
102-16 Values, principles, standards, and norms of behaviour Statement on Corporate Governance 142
Employees (Whistle blower Policy) 55
102-17 Mechanisms for advice and concerns about ethics Employees (Whistle blower Policy) 55
4. Governance
102-18 Governance structure Corporate Governance Overview Statement 142
Governance Structure 38
102-19 Delegating authority Governance Structure 38
102-20 Executive-level responsibility for economic, environmental, Governance Structure 38
and social topics
102-21 Consulting stakeholders on economic, environmental, and Stakeholders Engagement 41
social topics
102-22 Composition of the highest governance body and its Governance Structure 38
committees
102-23 Chair of the highest governance body Corporate Governance Overview Statement 142
Chair of the highest governance body is the Chairman of
the Board, who is independent and non-executive
102-24 Nominating and selecting the highest governance body Nomination Committee – Corporate Governance Overview 142
Statement
102-25 Conflicts of interest Corporate Governance Overview Statement 142
102-26 Role of highest governance body in setting purpose, values, Corporate Governance Overview Statement 142
and strategy
133
GRI Standards Description Reference Section Page
Number
GRI 102: General Disclosures (Contd.)
4. Governance
102-27 Collective knowledge of highest governance body Corporate Governance Overview Statement 132
102-28 Evaluating the highest governance body’s performance Corporate Governance Overview Statement 142
Statement on Risk Management and Internal Control
Audit Committee Report 149
102-29 Identifying and managing economic, environmental, and Governance Structure 38
social impacts
102-30 Effectiveness of risk management processes Corporate Governance Overview Statement 142
102-31 Review of economic, environmental, and social topics Corporate Governance Overview Statement 142
102-32 Highest governance body’s role in sustainability reporting Governance Structure 38
102-33 Communicating critical concerns Governance Structure 38
102-34 Nature and total number of critical concerns Governance Structure 38
102-35 Remuneration policies Remuneration Committee - Statement on Corporate 143
Governance
102-36 Process for determining remuneration Remuneration Committee - Statement on Corporate 143
Governance
102-37 Stakeholders’ involvement in remuneration Remuneration Committee - Statement on Corporate 143
Governance
102-38 Annual total compensation ratio Confidentiality constraints
102-39 Percentage increase in annual total compensation ratio Confidentiality constraints
6. Reporting Practice
102-40 List of stakeholder groups Stakeholders Engagement 41
102-41 Collective bargaining agreements Employees 56
102-42 Identifying and selecting stakeholders Stakeholders Engagement 41
102-43 Approach to stakeholder engagement Stakeholders Engagement 41
102-44 Key topics and concerns raised Stakeholders Engagement 41
Employees 56
Environment 69
Community 112
Marketplace 121
6. Reporting Practice
102-45 Entities included in the consolidated financial statements Financial Statements 159-235
102-46 Defining report content and topic Boundaries About This Report 30
Stakeholders Engagement 41
Materiality 43
102-47 List of material topics Materiality 43
102-48 Restatements of information There is no restatement of information.
102-49 Changes in reporting No significant changes
102-50 Reporting period About This Report 30
102-51 Date of most recent report Annual Report 2017
102-52 Reporting cycle About This Report 30
102-53 Contact point for questions regarding the report Procedure for Handling External Stakeholders Issues 118
102-54 Claims of reporting in accordance with the GRI Standards Global Reporting Initiative Index 133
102-55 GRI content index Global Reporting Initiative Index 133
102-56 External assurance About This Report 30
GRI 103: Management Approach
103-1 Explanation of the material topic and its Boundary Materiality 43
103-2 The management approach and its components Corporate Governance Overview Statement 142
Materiality 43
Employees 56
Environment 69
Community 112
Marketplace 121
103-3 Evaluation of the management approach Materiality 43
Employees 56
Environment 69
Community 112
Marketplace 121
134
Number
GRI 201: Economic Performance
201-1 Direct economic value generated and distributed Financial Statements and Notes to the Financial Statement 159-235
201-2 Financial implications and other risks and opportunities Confidentiality constraints
due to climate change
201-3 Defined benefit plan obligations and other retirement plans Financial Statements
201-4 Financial assistance received from government Confidentiality constraints
GRI 202: Market Presence
202-1 Ratios of standard entry level wage by gender compared to Employees (Paying Fair wages and Employees Benefits) 56
local minimum wage
202-2 Proportion of senior management hired from the local Employees 56
community Our policy is to hire employees with attitudes and skills
enabling them to develop a long-term relationship, with no
discrimination towards the employee’s race, colour, religion,
gender, national origin, ancestry, disability, marital status
and sexual orientation.
GRI 203: Indirect Economic Impacts
203-1 Infrastructure investments and services supported Employees 56
Community 112
203-2 Significant indirect economic impacts Information unavailable
GRI 204: Procurement Practices
204-1 Proportion of spending on local suppliers We endeavour to support local suppliers in the countries we
operate in, which is Malaysia and Indonesia.
GRI 205: Anti-corruption
205-1 Operations assessed for risks related to corruption Information unavailable
205-2 Communication and training about anti-corruption policies Code of Ethics and Business Conduct 55
and procedures
205-3 Confirmed incidents of corruption and actions taken Information unavailable
GRI 206: Anti-competitive Behaviour
206-1 Legal actions for anti-competitive behaviour, anti-trust, Information unavailable
and monopoly practices
GRI 301: Materials
301-1 Materials used by weight or volume Agrochemical and Energy Inputs in the Cultivation of Oil 104
Palm and Other Oilseed Crops - Environment
301-2 Recycled input materials used Production and Level of Utilisation of Oil Palm Biomass 94
Residues - Environment
301-3 Reclaimed products and their packaging materials Information unavailable
GRI 302: Energy
302-1 Energy consumption within the organization GHG emissions, discharges and waste management 88
302-2 Energy consumption outside of the organization GHG emissions, discharges and waste management 88
302-3 Energy intensity Emission reductions and Biogas plants 91
302-4 Reduction of energy consumption GHG emissions, discharges and waste management 88
302-5 Reduction in energy requirements of products and services Information unavailable
GRI 303: Water
303-1 Water withdrawal by source Information unavailable
303-2 Water sources signifcantly affected by withdrawal of water Information unavailable
303-3 Water recycled and reused Rain Harvesting 103
GRI 304: Biodiversity

304-1 Operational sites owned, leased, managed in, or adjacent Adjacent Protected & Conservation Areas - Environment 71
to, protected areas and areas of high biodiversity value
outside protected areas
304-2 Significant impacts of activities, products, and services on Biodiversity & Conservation 70
biodiversity
304-3 Habitats protected or restored Biodiversity & Conservation 70
304-4 IUCN Red List species and national conservation list Biodiversity & Conservation 70
species with habitats in areas affected by operations
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions Life Cycle Assessment 90
305-2 Energy indirect (Scope 2) GHG emissions Life Cycle Assessment 90
305-3 Other indirect (Scope 3) GHG emissions Life Cycle Assessment 90
305-4 GHG emissions intensity Life Cycle Assessment 90
135
Number
GRI 305: Emissions
305-5 Reduction of GHG emissions Life Cycle Assessment, Emissions Reductions & Biogas 90
Plant
305-6 Emissions of ozone-depleting substances (ODS) Not applicable
305-7 Nitrogen oxides (NOX), sulphur oxides (SOX), and other Isokinetic Monitoring of Gaseous Emissions from the Palm 93
significant air emissions Oil Mills, VORSEP Dust Collector System
GRI 306: Effluents and Waste
306-1 Water discharge by quality and destination GHG emissions, discharges and waste management 88
306-2 Waste by type and disposal method Recycling of Pesticide Containers and Scheduled Wastes - 111
Environment
306-3 Significant spills Information unavailable
306-4 Transport of hazardous waste Recycling of Pesticide Containers and Scheduled Wastes - 111
Environment
306-5 Water bodies affected by water discharges and/or runoff Information unavailable
GRI 307: Environmental Compliance
307-1 Non-compliance with environmental laws and regulations None. LCA
GRI 308: Supplier Environmental Assessment
308-1 New suppliers that were screened using environmental Evaluation of Suppliers/Contractors’ Sustainability 127
criteria Commitment - Marketplace
308-2 Negative environmental impacts in the supply chain and Information unavailable
actions taken
GRI 401: Employment
401-1 New employee hires and employee turnover Employees – Group Employees 2016-2018. UP Group 56
Employees
401-2 Benefits provided to full-time employees that are not Human and Workers’ Rights - Employees 57
provided to temporary or part-time employees
401-3 Parental leave Information unavailable
GRI 402: Labor/Management Relations
402-1 Minimum notice periods regarding operational changes Human and Workers’ Rights - Employees 57
GRI 403: Occupational Health and Safety
403-1 Workers representation in formal joint management– Freedom to Join Unions - Employees 59
worker health and safety committees
403-2 Types of injury and rates of injury, occupational diseases, Fatal Accident & Lost Time Injury Frequency – 66
lost days, and absenteeism, and number of work-related Occupational Safety & Health – Employees
fatalities
403-3 Workers with high incidence or high risk of diseases related Lost Time Injury Frequency Rate - Employees 67
to their occupation
403-4 Health and safety topics covered in formal agreements with Occupational Safety & Health Policy - Employees 66
trade unions
GRI 404: Training and Education
404-1 Average hours of training per year per employee Training and Development of Employees – Employees 65
404-2 Programs for upgrading employee skills and transition Training and Development of Employees – Employees 65
assistance programs
404-3 Percentage of employees receiving regular performance and Information unavailable
career development reviews
GRI 405: Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees Equal Treatment - Employees 55
405-2 Ratio of basic salary and remuneration of women to men Equal Treatment - Employees 55
Average Earning - Employees 58
GRI 406: Non-discrimination
406-1 Incidents of discrimination and corrective actions taken Equal Treatment - Employees 55
GRI 407: Freedom of Association and Collective Bargaining
407-1 Operations and suppliers in which the right to freedom of Evaluation of Suppliers/Contractors’ Sustainability 127
association and collective bargaining may be at risk Commitment - Marketplace
GRI 408: Child Labor
408-1 Operations and suppliers at significant risk for incidents of Evaluation of Suppliers/Contractors’ Sustainability 127
child labor Commitment - Marketplace
GRI 409: Forced or Compulsory Labor
409-1 Operations and suppliers at significant risk for incidents of Evaluation of Suppliers/Contractors’ Sustainability 127
forced or compulsory labor Commitment - Marketplace
136
Number
GRI 410: Security Practices
410-1 Security personnel trained in human rights policies or Training Hours - Employees 65
procedures
GRI 411: Rights of Indigenous Peoples
411-1 Incidents of violations involving rights of indigenous Information unavailable
peoples
GRI 412: Human Rights Assessment
412-1 Operations that have been subject to human rights reviews FPIC - Community 114
or impact assessments
412-2 Employee training on human rights policies or procedures Training and Development of Employees 65
412-3 Significant investment agreements and contracts that Evaluation of suppliers/contractors sustainability
include human rights clauses or that underwent human commitments-marketplace
rights screening
GRI 413: Local Communities
413-1 Operations with local community engagement, impact FPIC, Land Dispute - Community 114, 117
assessments, and development programs
413-2 Operations with significant actual and potential negative FPIC - Community 114
impacts on local communities
GRI 414: Supplier Social Assessment
414-1 New suppliers that were screened using social criteria Evaluation of Suppliers/Contractors’ Sustainability 127
Commitment - Marketplace
414-2 Negative social impacts in the supply chain and actions Information unavailable
taken
GRI 415: Public Policy
415-1 Political contributions Confidentiality constraints
GRI 416: Customer Health and Safety
416-1 Assessment of the health and safety impacts of product and At Unitata, all products are significantly important and 127
service categories may give health and safety producing ingredients to food
producers
416-2 Incidents of non-compliance concerning the health and Information unavailable
safety impacts of products and services
GRI 417: Marketing and Labelling
417-1 Requirements for product and service information and Certification for Food Safety, Sustainability and Others - 121
labelling Marketplace
GRI 417: Marketing and Labelling
417-2 Incidents of non-compliance concerning product and Certification for Food Safety, Sustainability and Others - 121
service information and labelling Marketplace
417-3 Incidents of non-compliance concerning marketing Information unavailable
communications
GRI 418: Customer Privacy
418-1 Substantiated complaints concerning breaches of customer Personal Data Protection 55
privacy and losses of customer data
GRI 419: Socioeconomic Compliance
419-1 Non-compliance with laws and regulations in the social Information unavailable
and economic area
137
Glossary
Biodiversity (BioD) The diversity (number and variety of species) of plant and animal life within a region.
Biological oxygen demand The amount of oxygen used when organic matter undergoes decomposition by micro- organisms. Testing for BOD is done to assess the
(BOD) amount of organic matter in water.
Carbon Footprint A measure of the total amount of greenhouse gases, including carbon dioxide, methane and nitrous oxides, emitted directly or indirectly by
an organisation, event, product or person.
Child Labour According to the International Labour Organization (ILO) core labour standards, minimum age should not be less than 16 years old.
CO2 Equivalents Carbon dioxide equivalents (CO2eq) provide a universal standard of measurement against which the impacts of releasing (or avoiding the
release of) different greenhouse gases can be evaluated.
Crude Palm Oil (CPO) Oil produced from oil palm fruits in milling process.
Creating Shared Value (CSV) A responsibility to manage our resources resourcefully and engage in activities that optimize return for shareholders and the society we operate in.
Deforestation Defined by UP as direct human-induced conversion of forest to non-forests, with an exception for small scale low intensity subsistence
conversion by indigenous peoples and forest dependent traditional communities (consistent with RSPO P & C as well as Indonesian laws,
Environmental Impact Assessments (EIA) and High Conservation Value Assessment (HCV).
Effluents Water discharged from one source into separate body of water, such as mill process water.
Employees Our Employees are our core assets and human capital management is considered an integral and vital part of our operations.
Environment UP’s commitment in constantly striving towards reducing variables that impact the environment negatively.
Forced Labour A person who is coerced to work under the threat of violence, intimidation, or undue stress of penalty.
Free, Prior and Informed The principle that a community has the right to give or withhold its consent to proposed projects that may affect the lands they customarily
Consent (FPIC) own, occupy or otherwise use.
Fresh fruit Bunches (FFB) Bunch harvested from the oil palm tree. The weight of the fruit bunch ranges between 10 kg to 40 kg depends on the size and age.
Global Reporting initiative (GRI) A multi-stakeholder standard for sustainability reporting, providing guidance on determining report content and indicators.
Greenhouse Gas (GHG) Greenhouse gas or carbon emissions are gasses in an atmosphere that absorb and emit radiation within the thermal infrared range. This
emissions process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth’s atmosphere are water vapor,
carbon dioxide, methane, nitrous oxide, and ozone.
GreenPalm Is a certificate trading system that allows manufacturers and retailers to purchase GreenPalm certificates from an RSPO certified palm oil
growers to offset each tonne of palm oil and palm kernel oil they use. A book-and-claim supply chain system.
High Conservations Value The concept of High Conservation Value Forests (HCVF) was first developed by the Forest Stewardship Council (FSC) in 1999 as their ninth
(HCV) principle. The FSC defined HCVF as forests of outstanding and critical importance due to their environmental, socio-economic and cultural
biodiversity and landscape value.
High carbon stock (HCS) The HCS Approach is a methodology to avoid deforestation in land development. The approach stratifies the vegetation on an area of land
into different classes using analyses of satellite images and field plot measurements. Each vegetation class is validated through calibrating it
with carbon stock estimates in the above-ground tree biomass.
Hak Guna Usaha(HGU) The right to enjoy immovable property of another person with the obligation to pay the annual income to the landowner.
ILO (International Labour Is a tripartite world body representative of labour, management and government, and is an agency of the United Nations. It disseminates
Organisation) labour information and sets minimum international labour standards called “conventions”, offered to member nations for adoption.
Integrated Pest management A pest management system that in context of the associated environment and the population dynamics of the pest species utilizes all
(IPM) suitable techniques and methods in as compatible a manner as possible and maintains the pest population at levels below those causing
economically unacceptable damage and loss.
IUCN Red List Based in Switzerland, the International Union for Conservation of Nature and Natural Resources (also known as The World Conservation Union) is an
organisation involved in the preservation of natural resources. IUCN publishes the Red Data Book, which lists the endangered species of every nation.
Identity Preserved/ IP Certified sustainable palm oil is physically separated from other certified and non-certified palm oil throughout the supply chain, i.e from
the RSPO mill through to the end-user.
Oil Extraction Rate The amount of oil extracted from oil palm fruit at a mill. Crude palm oil (CPO) is extracted from the flesh; palm kernel oil (PKO) from the nut.
Mass Balance Certified sustainable palm oil and non-certified palm oil is mixed to avoid the cost of keeping the two quantities controlled. The mass balance
system is constructed in such a way that volumes of RSPO certified products shipped will never exceed volumes received by the end-user.
Mature Oil Palm After planting, the oil palm tree is classified as immature until fresh fruit bunches are produced, which is approximately 30 months later,
whereupon the oil palm tree is classified as mature.
Non-governmental Is used in this report to refer to grassroots and campaigning organisations focused on environmental or social issues.
organisation (NGO)
Palm oil Mill effluent (POME) By-product of processed fresh fruit bunch (FFB).
Peat Peat is an accumulation of partially decayed vegetation matter. Peat forms in wetlands or peat lands, variously called bogs, moors, muskegs,
pocosins, mires, and peat swamp forests.
Plasma schemes A programme initiated by the Indonesian government to encourage the development of smallholders’ plantations with the assistance and
cooperation of plantation companies (the nucleus) which assist and support the surrounding community plantations (the plasma).
Palm Kernel (PK) Seed of the oil palm fruit, which is processed to extract palm kernel oil and other by-products.
Palm Kernel (PK) Seed of the oil palm fruit, which is processed to extract palm kernel oil and other by-products.
Roundtable on sustainable A non-governmental multi-stakeholder organisation based in Kuala Lumpur, Malaysia. The organisation has developed a certification
palm oil (RSPO) scheme for sustainable palm oil.
Social Impact Assessment A process of analysing, monitoring and managing the intended and unintended, both positive and negative social consequences of
planned interventions (policies, programs, plans, projects) and any social change processes invoked by the interventions. Its primary
purpose is to bring about a more sustainable and equitable biophysical and human environment.
Segregated/ SG Certified sustainable palm oil is physically separated from non-certified palm oil throughout the entire supply chain.
Stakeholders Any group or individual who are affected by or can affect a company’s operations.
Sustainability A term expressing a long-term balance between social, economic and environmental objectives. Often linked to Sustainable Development
which is defined as “Development that meets the need of current generations without compromising the needs of future generations”
Traceability Traceability is the capability to track sustainable palm oil along the entire supply chain.
Toxicity Toxicity measures the degree to which a substance is harmful to living organisms.
138
Ripe fresh fruit bunches ready to be harvested.
139
Corporate Governance Overview Practice 12.3
Statement
Listed companies with a large number of shareholders
(GRI 102-18, GRI 102-23, GRI 102-24, GRI 102-25 to 28, GRI or which have meetings in remote locations should
102-11, GRI 102-30, GRI 102-31)
leverage technology to facilitate–
The Board of Directors recognizes the importance o including voting in absentia; and
of good corporate governance and continues to o remote shareholders’ participation at General
be committed to ensure that high standards of Meetings.
corporate governance are practiced throughout
the Group to deliver long term sustainable value Please refer to the CG Report for the detailed
to the shareholders and other stakeholders. With explanations for the departures and the practices
the publication of Malaysian Code on Corporate and measures put in place to apply the departed
Governance 2017 (MCCG 2017) and in accordance practices. This is our commitment to promote effective
to the guidance given by Bursa through its circular governance to support better decision-making and
titled “Amendments to Bursa Malaysia Securities accountability which in turn shall instill stakeholder
Berhad Main Market Listing Requirements” confidence and trust in the Company. In addition to
dated 29 November 2017, the Board of Directors the above analysis on the compliance of MCCG 2017,
are pleased to present the corporate governance to further strengthen the Corporate Governance
overview statement. The detailed explanation on the practices, the Company has adopted the following
application of the corporate governance practices practices in the financial year 2018.
are reported under Corporate Governance Report
(“CG Report”) as published in the Company’s A) Board Charter
website.
The Board Charter sets out the Board’s strategic intent
The Company as at the date of this Corporate and outlines the Board’s roles and responsibilities.
Governance Overview statement has applied The Charter elaborates the fiduciary and leadership
all of the practices in MCCG 2017 except for the functions of the Board and serves as a primary reference
followings: for prospective and existing Board members and senior
management. The Charter is reviewed periodically
Practice 4.1 to ensure it complies with current legislation and
best practices. The Board Charter was reviewed and
At least half of the board comprises independent updated on 24 February 2018 and can be viewed at the
directors. For Large Companies, the board comprises a Company’s website at www.unitedplantations.com.
majority independent directors.
B) Strengthen Composition
Practice 4.2
Specific responsibilities are delegated to Board
The tenure of an independent director does not exceed Committees where appropriate. The Board
a cumulative term limit of nine years. Upon completion Committees comprise Nomination Committee,
of the nine years, an independent director may continue Remuneration Committee, Audit Committee and
to serve on the board as a non-independent director. If Executive Committee. Each Committee operates
the board intends to retain an independent director within its respective Terms of Reference which have
beyond nine years, it should justify and seek annual been approved by the Board.
shareholders’ approval. If the board continues to
retain the independent director after the twelfth B1.1 Nomination Committee (GRI 102-24)
year, the board should seek annual shareholders’
approval through a two-tier voting process. The Nomination Committee is responsible to
make recommendations to the Board regarding the
Practice 4.5 appointment of directors, evaluation of the skills,
experience, competencies of the Directors, diversity of
The board discloses in its annual report the company’s the Board’s composition. The Nomination Committee
policies on gender diversity, its targets and measures consists of 3 members, who are all Independent, Non-
to meet those targets. For Large Companies, the Executive Directors. The full report of the Nomination
board must have at least 30% women directors. Committee can be found from pages 155 to 156 of this
Corporate Governance Overview Statement 2018.
Practice 11.2
Large companies are encouraged to adopt integrated

reporting based on a globally recognised framework.
142
B1.2 Remuneration Committee and Directors All directors are paid annual fees. The Chairman
Remuneration (GRI 102-35, GRI 102-36, GRI 102-37) and members of the Audit Committee receive
additional fees taking into account the nature of their
The Remuneration Committee consists entirely of responsibilities. Members of other Board committees
three (3) non-executive directors, all of whom are do not receive any additional fees.
independent Directors. Its primary function is to review
and recommend the remuneration for the Company’s The directors’ fees are reviewed by the Board only when
executive directors. it deems necessary, subject however to approval by the
shareholders at the A.G.M.. The amount is related to
The members of the Remuneration Committee are their level of responsibilities. Periodical review of the
stated herebelow:- fees is undertaken based on market information on
directors’ fees. A fixed meeting attendance allowance is
Ybhg. Tan Sri Datuk Dr. Johari bin Mat (Chairman) paid for all attendances at Board and Board Committee
(Independent, Non-Executive Director) meetings except for the Executive Committee meetings.
Y. Hormat Dato’ Jeremy Derek Campbell Diamond The Remuneration Committee held one (1) meeting
(Independent, Non-Executive Director) during the financial year ended 31 December 2018 to
deliberate on the new service contract of one (1) of the
Mr. R. Nadarajan executive directors and made their recommendation to
(Independent, Non-Executive Director) the Board.
It is the Remuneration Committee’s usual practice to The aggregate remuneration for the year for the
draw information on the Company’s remuneration following directors are as shown in the table below.
policy from the Executive Committee to assist them
with their duties. Executive directors do not participate B1.3 Audit Committee
in the deliberations of the Remuneration Committee.
The Audit Committee consists entirely of three
Only the executive directors have contracts of service (3) non-executive directors as required under the
which are normally reviewed every three years. The Main Market Listing Requirements, all of whom are
executive directors’ salaries are linked to their position, independent directors.
seniority, experience and the Company’s overall
profitability which would vary from year to year. The The Terms of Reference includes scope, functions
salary components are determined in accordance with the and activities. The activities of the Audit Committee
Company’s established remuneration policy for executive during the financial year 2018 have been described
directors. The remuneration packages are sufficiently at length in a separate statement in this Annual
attractive to attract and retain executive directors. Report. (pages 151 to 154).
Directors’ Fees Meeting

Basic Additional Benefits- Other Attendance
Company Subsidiaries Salary Remuneration in Kind Benefits Allowance Total
(RM) (RM) (RM) (RM) (RM) (RM) (RM) (RM)

Ybhg. Tan Sri Datuk Dr. Johari bin Mat
(Chairman, Independent, Non-Executive) 165,000 - - - - - 10,500 175,500
Ybhg. Dato’Carl Bek-Nielsen
(Chief Executive Director) 100,000 28,000 240,000 1,480,000 56,649 324,340 7,500 2,236,489
Mr. Ho Dua Tiam
(Executive) 100,000 - 153,600 1,070,450 41,735 208,568 7,500 1,581,853
Mr. Ahmad Riza Basir
(Independent, Non-Executive) 110,000 - - - - - 16,500 126,500
Y. Hormat Dato’Jeremy Derek Campbell Diamond
Mr. Martin Bek-Nielsen
(Executive) 100,000 23,000 228,000 1,378,500 53,190 305,245 7,500 2,095,435
Mr. Loh Hang Pai
(Executive) 100,000 - 136,800 669,600 29,205 145,920 7,500 1,089,025
Mr. R. Nadarajan
Madam Rohaya binti MohammadYusof
(Non-Independent, Non-Executive) 100,000 - - - - - 7,500 107,500
Mr. Jorgen Belle
(Non-Independent, Non-Executive) wef 21.05.2018 61,290 - - - - - 3,000 64,290
Total 1,066,290 51,000 758,400 4,598,550 180,779 984,073 106,500 7,745,592
143
B1.4 Executive Committee Following this division of responsibilities at the head
of the Company we have in the Board’s composition
The Executive Committee consists of executive included a balance of executive and independent
directors only. The scope, functions and activities non-executive directors so that no one group would
are given in the Terms of Reference approved by the dominate the decision making process.
Board.
For the financial year 2018, your Board consists of ten
It is responsible to oversee the day-to-day (10) directors, four (4) of whom are executives who
management of the Group’s operations which have an intimate knowledge of the business. Amongst
include review of the annual revenue and capital the remaining six (6) non-executive directors, four (4) of
budgets before presenting to the Board, reviewing them are independent directors. The Board is satisfied
the monthly, quarterly and annual results of that the current board size fulfills its requirements
the Company and Group and comparing them adequately.
with the respective business units budgets and
taking remedial actions for budget variances, The composition of the Board reflects a mix of skills
implement policies and procedures approved by and experience and other qualities which non-
the Board, implement recommendations of the executive directors should bring to the Board. Due to
Audit Committee, identify key risks annually and the diversified backgrounds and their independence,
implement mitigating actions where practicable, the non-executive directors are ably engaged in
recommend expansion and diversification healthy discussions and debates with the executive
plans, implement policies for succession, labour directors at the Board meetings which are conducive
recruitment, replanting and replacement of plant for an effective Board.
and machinery, and the review of research policies
and projects. The independent directors play a pivotal role in
the Board’s responsibilities. However, they are not
The Executive Committee has established the accountable and responsible for the day to day running
Group Sustainability Committee which reviews of the business, which is the role of the executive
sustainability issues concerning the environment, directors.
social/community, employees and market place.
The Sustainability Report has been included in a The independent non-executive directors are actively
separate statement in this Annual Report. involved in various Board committees and contribute
significantly to areas such as performance monitoring
The Executive Committee has access to the and enhancement of corporate governance by
services of the Company Secretary who records providing independent assessment and opinions on
and maintains minutes of Executive Committee proposals put forward by the executive directors and
meetings. act as a check and balance for the executive directors.
The Executive Committee met formally 3 times The Board has established a formal and transparent
during the year 2018, and the minutes thereof were policy for the role of the executive and non-executive
included in the Board files for information and directors.
deliberation by the Board.
Biographies of the Directors as given in this Annual
All the executive directors attended all 3 meetings. Report, show the necessary depth to bring experience
The Executive Committee also met informally to and judgment to bear on the collective decision making
deal with matters that required prompt response processes of the Board.
and decisions.
The Board’s composition fairly represents the
C. Reinforce Independence ownership structure of the Company with appropriate
representatives from the two largest shareholders.
C.1 Board Balance and Independence of Directors There are adequate number of representatives on the
Board who fairly reflect the interests of the minority
The Company has an effective Board entrusted with shareholders.
leadership responsibilities by its shareholders. It is headed
by a Chairman who is independent of management and The Board has established position descriptions for
whose key role is the stewardship of the Board. the role of each of the executive director who has
specific management responsibilities for the day to day
The Chief Executive Director on the other hand is running of the business.
the head of management whose key responsibilities
are to run the business and implement the policies The Company has included a Group Philosophy
and strategies approved by the Board. Due to their Statement in the inside cover of this Annual Report and
contrasting roles at the head of the Company, the two it has clearly described its objectives in the statement on
roles are not combined. sustainability to which the Board is deeply committed.
144
One of the recommendations of the MCCG 2017 states experience and skills and not gender alone. It also took
that the tenure of an independent director should not note that the recommendation in the MCCG 2017 is
exceed a cumulative term of nine (9) years. only a guideline and not mandatory.
However, the Nomination Committee and the Board The Board is of the view that it is important to recruit
have determined at the annual assessment carried out and retain the best available talent regardless of gender,
that Tan Sri Datuk Dr. Johari bin Mat and Dato’ Jeremy ethnicity and age to maximize the effectiveness of the
Derek Campbell Diamond who has each served on Board.
the Board for seventeen (17) years and Mr. Ahmad
Riza Basir who has served on the Board for eighteen Although the Company does not have a formalised
(18) years, remain objective and independent in Board gender diversity policy alongside targets and
participating in the deliberations and decision making measures, the issue of diversity is discussed and given
of the Board and Board Committees. prominence during deliberations by the Nomination
Committee and the Board.
The length of their service on the Board does not
interfere with their exercise of independent judgment The appointment of Puan Rohaya binti Mohammad
and act in the best interest of the Group notably in Yusof to the Board on 30 November 2017 in place of Dato’
discharging their roles, in the case of Tan Sri Datuk Dr. Mohamad Nasir Bin Ab. Latif represents the Board’s
Johari bin Mat, as Chairman of the Board, Chairman commitment to consider women directors on the Board.
of the Remuneration Committee and Chairman of
the Nomination Committee, in the case of Dato’ The Board shall increase woman board representation
Jeremy Derek Campbell Diamond as the Chairman as and when there is vacancy as well as when suitable
of the Audit Committee as well as the member of the and qualified candidates are identified.
Remuneration and Nomination Committees, and in
the case of Mr. Ahmad Riza Basir as the member of the D. Foster Commitment
Audit Committee.
The Non-Executive Directors are expected to commit
Each of the above three (3) independent directors has approximately 30 to 45 days in a year of his time to
provided an annual confirmation of his independence the Group. Time spent include not only formal board
to the Nomination Committee and the Board. The meetings but also Board committees, discussion with
Board has recommended the continuation of these management, dealing with the authorities, professional
3 directors as independent directors of the Company and education and Company functions. The Board is
as the Board believes that it is in the best position to satisfied with the level of time commitment given by each
evaluate and determine whether any independent of the directors towards fulfilling their roles on the Board
director can continue acting in the best interest of and Board Committees.
the Group and bringing unbiased and professional
judgement to Board deliberations. The Board meets not less than four (4) times a year
to review and approve the quarterly results for
The Board has to balance the need to continue with announcements. The Board meetings for the ensuing
Directors who have intimate knowledge of the Group’s year are fixed in advance. Notice of meetings and the
business and fresh perspective which new candidates agenda are given in a timely manner.
may bring.
Standard matters set out in the agenda for the Board
The Board has re-assessed the timeline set in meetings are as follows:-
the previous year on limiting the tenure of the
independent Board members and views that with the 1) Matters arising from the previous minutes of the
recent expansion of the Group’s business following the Board and Committees of the Board
acquisition of the additional plantation land, the Group
will require a stable board, particularly of Independent 2) Monthly, Quarterly and Yearly Financial
Directors who have a good understanding of the Statements and financial forecasts/projections
Group’s core business operations, to strategize the new
development and bring it to fruition in the next 4-5 3) Matters relating to the business namely finance,
years. land matters, staff & labour, succession planning,
budgets, production, marketing and others
As such, the Board has moved the timeline for limiting
the tenure of the independent directors from end 2021 4) New Investments
to end 2023. This will allow the Board to concentrate
on the business operations to enhance the value of the 5) Subsidiary Companies
Group.
6) Sustainability Issues
The Nomination Committee recognized that the
Board diversity should be in tandem with expertise, 7) General
145
During the year under review five (5) Board meetings E. Integrity in Financial Reporting
were held and the directors’ attendances thereat are
summarized herebelow:- The Board in compliance with paragraph 15.26a of Bursa
Malaysia’s Main Market Listing Requirements issues a
Statement explaining its responsibility for preparing the
Directors No. of Meetings
annual audited financial statements. The Board is required
Attended Held by law to prepare financial statements for each financial
year which will give a true and fair view of the state of
Ybhg. Tan Sri Datuk Dr. Johari bin Mat 5 5 affairs of the Group and of the Company at the end of
-Chairman the financial year in a manner which is comprehensive
Ybhg. Dato’Carl Bek-Nielsen 5 5 and transparent. In the preparation of the financial
Mr. Ho Dua Tiam statements, the directors will consider compliance with
5 5
all applicable Financial Reporting Standards in Malaysia
Mr. Ahmad Riza Basir 5 5 and the provisions of the Companies Act 2016.
Y. Hormat Dato’Jeremy Derek Campbell 5 5
Diamond E.1 Internal Control
Mr. Martin Bek-Nielsen 5 5
Mr. Loh Hang Pai 5 5 The Board recognizes its responsibility for the group’s
system of internal controls. In this connection, the Audit
Mr. R. Nadarajan 5 5 Committee conducts an annual review of the adequacy
Madam Rohaya binti MohammadYusof 5 5 and effectiveness of the system of internal controls and
Mr. Jorgen Belle 2* 5 renders a statement to the shareholders to this effect.
* Since his appointment on 21 May 2018.
In this connection, the Audit Committee is assisted by
an in-house internal audit department and an external
The directors are also mindful of their continuous independent professional firm who conduct regular
training requirements. Directors are encouraged to reviews of the internal controls and report to the Audit
attend various external and internal professional Committee directly. The external auditors are appointed by
programs relevant and useful in contributing to the the Board to review the Statement of Internal Control and
effective discharging of their duties as directors. to report thereon.
The Company Secretary facilitates programme E.2 Relationship with the Auditors
registration for interested directors and would maintain
such records of the programmes and their attendance The Board maintains a formal procedure of carrying out
thereat. All directors are allowed to choose courses/ an independent review of all quarterly reports and annual
seminars of relevance in discharging their duties. audited financial statements by the Audit Committee, at its
meetings. The external auditors and representatives of the
The Board, with the input from the Company Secretary, management are present to answer questions and provide
assessed the training needs of individual directors explanations to the Audit Committee.
and satisfied that all directors have met their training
needs. Relevant training programmes, seminars and The activities of the Audit Committee have been described
conferences attended by Directors during the financial at length in a separate statement given in this Annual
year ended 31 December 2018 were: Report.
1) Bursa Malaysia’s Annual Palm & Lauric Oils F. Recognize and Manage Risks
Conference & Exhibition: Price Outlook 2018 (POC
2018) - 5-7 March 2018 The Board, assisted by the Audit Committee, reviews the
risk management policies formulated by management,
2) Corporate Governance Briefing – MSSG Reporting headed by the Executive Director, Finance & Marketing,
& CG Guide-28 February 2018 and makes relevant recommendations to the management.
The Group continues to maintain and review its internal
3) Audit Committee Institute Breakfast Roundtable control policies and procedures to ensure, as far as possible,
2018 by KPMG - 19 March 2018 to protect the Group’s assets.
4) Introduction to Corporate Liability Provision by The Board has established internal audit function,
MICG – 6 September 2018 complimented by an in-house team and an external
professional firm. Both the internal audit teams report
5) Mandatory Accreditation Programme (MAP) by direct to the Audit Committee.
Bursa Malaysia -12 to 13 November 2018
Details of the Group’s internal control system and
6) Roundtable on Sustainable Palm Oil (RT16)-12 to framework are set out in the Statement on Risk
15 November 2018 Management and Internal Control.
146
G. Timely and High Quality Disclosures directed to Dato’ Carl Bek-Nielsen, Chief Executive
Director and Mr. Martin Bek-Nielsen, Executive
The Group has in place a procedure for compliance Director (Finance & Marketing).
with the Listing Requirements. The Company Secretary
reviews all announcements to ensure accuracy and Besides the above, the Board believes that the Company’s
compliance. The Board reviews and approves all Annual Report is a vital source of essential information
quarterly and other important announcements. The for shareholders and investors and other stakeholders.
Board is mindful that information which is material is The Company strives to provide a high level of reporting
announced immediately. and transparency as an added value for users.
The Group has designated executive directors as H.2 The Annual General Meeting (A.G.M.)
spokespersons in the handling of discussions and
disclosures with investors, fund managers and the The A. G. M. is an excellent forum for dialogue
public. with all shareholders for which due notice is
given. The shareholders are given the opportunity
The Company has a website www.unitedplantations. to vote on the regular businesses of the meeting,
com where all the Company’s announcements, viz. consideration of the financial statements,
corporate information and updates are posted. consideration and approval of a final dividend,
consideration and approval of directors and
H. Strengthen Relationship Between the Company auditors fees, re-election of directors and special
and Shareholders business if any.
H.1 Communications and Investor Relations The Chairman explains the voting procedure before
the commencement of the A.G.M. The shareholders
The Board acknowledges the need for an effective present are given the opportunity to present their
communication policy with shareholders and investors views or to seek more information. The resolutions
as the same intimate relationship that exists with passed at the meeting are released to Bursa Malaysia
management is usually lacking with shareholders in a timely manner.
with the exception of the controlling shareholders
who are represented on the Board. The Company’s Kindly take note that pursuant to paragraph 2.19
website: www.unitedplantations.com and the stock of the Main Market Listing Requirements and
exchange websites: www.bursamalaysia.com. are used Article 162 of the Company’s Constitution and in
as a forum to communicate with shareholders and line with UP’s “Go Green” initiatives, the Notice of
investors where they can access corporate information, A.G.M, Proxy Form and Circular to Shareholders
company’s announcements, corporate proposals, can be downloaded from our website at www.
quarterly and annual reports, etc. unitedplantations.com.
The Company’s executive directors hold bi-annual All Board members, Senior Executives from the
briefings at its Headquarters with institutional Finance Department and the External Auditors
investors, market analysts and fund managers. are present to respond to questions from the
Questions relating to these announcements can be shareholders during the A.G.M..
Shareholders registration done electronically prior to attending AGM e-voting in progress.

the general meeting.
147
Statement On Directors’ Responsibility As At 31 December 2018
The Board is required under paragraph 15.26(a) of also consider that all applicable Financial Reporting
the Main Market Listing Requirements of Bursa Standards in Malaysia have been complied with and
Malaysia to issue a statement explaining its confirm that the financial statements have been
responsibility for preparing the annual audited prepared on a going concern basis.
financial statements.
The Directors are responsible for ensuring that the
The Directors are required by law to prepare Company keeps accounting records which disclose
financial statements for each financial year which with reasonable accuracy at any time the financial
give a true and fair view of the financial position position of the company and which enable them
of the Group and of the Company as at the to ensure that the financial statements comply with
financial year end and of the results and cashflows the provisions of the Companies Act, 2016.
of the group for the financial year then ended.
The Directors are also responsible for taking such
The Directors consider that, in preparing the steps that are reasonably open to them to safeguard
financial statements of United Plantations Berhad the assets of the Group and to prevent and detect
for the financial year ended 31 December 2018 the fraud and other irregularities.
Group has used appropriate accounting policies,
consistently applied and supported by reasonable The Auditors’ responsibilities are stated in their
and prudent judgment and estimates. The Directors report to the shareholders.
Mr. P, Seker, Director of Engineering, Upstream giving a briefing to the members of the Board in the Power Control Room
at the Optimill.
148
Statement On Risk Management and Internal Control
The Board of Directors (“the Board”) of United operational, financial, tax-related and legal risks faced by
Plantations Berhad (“the Group”) recognizes the Group. This includes examining principal business
its responsibility for the Group’s system of Risk risks in critical areas, assessing the likelihood of material
Management and Internal Control (RMIC) for the exposures and identifying the measures taken and the
review of its adequacy and effectiveness, whilst the time frame to mitigate and minimize these risks. The
role of management is to implement the Board’s process is undertaken by a Risk Management Committee
policies on risks and controls. A sound system of RMIC headed by the Executive Director, Finance & Marketing
includes the establishment of an appropriate control and comprising executives of the Company and a written
environment and framework, encompassing financial, report is submitted to the Board. Management proactively
operational and compliance controls and management reviews the measures taken to manage those identified
of risks throughout its operations in order to protect its risks on a timely and consistent manner.
shareholders’ value and the Group’s assets as well as
other stakeholders’ interests, at the same time. Other Key Elements Of RMIC
The Risk Management Framework is embedded in Other key elements of the Group’s system of internal
its culture as documented in the Group Sustainability control are as follow:
System Framework as illustrated on page 39. The o Defined management structure of the Group and
Risk Management Framework overlaps with the clear delegation of authority to committees of the
Sustainability Governance Management Structure. Board and management where authority levels
have been clearly established;
Risk Management Framework
o Established operating policies and procedures
Board of Directors with respect to key operational areas are
continuously reviewed and updated by
management to reflect changing risk profile;
Executive Committee
o Comprehensive financial and operational
reports, including key performance indicators
Group Sustainability Committee are reviewed against prescribed budgets and
(GSC) parameters by management and executive
directors on a monthly and daily basis where
applicable;
Risk Management Committee
o Regular meetings are held between the executive
directors and management to deliberate on
Risk Management Approach Group strategies and policies, operational and
financial performance and other key issues;
Because of the limitations that are inherent in any
system of RMIC, such systems are designed to manage o An annual budgetary process whereby each
and mitigate risks that may impede the achievement operating entity submits a budget and business
of the Group’s business objectives. Accordingly, the plan to the executive committee for consolidation,
system of RMIC provides only reasonable and not review and approval, which is then tabled to the
absolute assurance against material misstatement, Board for deliberation;
error or loss. The concept of reasonable assurance also
recognizes that the cost control procedures should not o It is the responsibility of each employee to report
exceed the expected benefits. any potential shortcomings in the internal controls
in relation to their respective responsibilities;
Assurance from Management
o An internal audit function that is outsourced
The Board has received assurances from the Chief to an independent professional firm, KPMG
Executive Director and the Executive Director, Finance which reports directly to the Audit Committee.
& Marketing, that the Group’s system of RMIC is In addition, the Group also has a group internal
operating adequately and effectively in all material audit department to complement the reviews by
aspects. the independent professional firm. Based on a
risk- based audit plan, the internal audit function
Internal Control And Risk Management performs regular reviews of critical business
processes to identify any significant risks, assess
The Board regards risk management as an integral part the effectiveness and adequacy of the system of
of business operations. There is in place a formal process RMIC and where necessary, recommend possible
to identify, evaluate and manage significant strategic, improvements;
149
o Each subsidiary of the group is (as a minimum o Insufficient and inexperienced labour force
requirement) subjected annually to scrutiny of its
financial statements by an external auditor, any The plantation industry in Malaysia, which is
comments relating to this external audit are passed labour intensive, is facing a shortage of field
on to the management in the form of a“management workers, harvesters and collectors. This is an ever-
letter”. No significant shortcomings in internal present risk which is constantly being monitored
controls have been found in the past; and by the Company. The Company is looking to recruit
more guest workers from Bangladesh and India
o The Audit Committee, on behalf of the Board, to alleviate the dependence on Indonesian guest
receives reports from both the internal and workers, and to have a more balanced spread of
external auditors and regularly reviews and holds guest workers in the Company’s estates. At the
discussions with management on the actions same time, the Company is focused on reducing
taken on identified RMIC issues. The role of the labour dependency by introducing automation and
Audit Committee is further elaborated in the Audit productivity increases within all operation areas
Committee Report on pages 151 to 154. There is no where possible.
material joint venture that has not been dealt with
as part of the Group for the purpose of Statement o Political instability and uncertainties in local
on Risk management and Internal Control regulatory and practices
Risk Management Activities This is a risk area which is closely monitored by the
Group, as changes in legislations in labour policies,
No major weaknesses in the system of internal controls land and environmental laws can have a significant
were identified during the year, nor have any of the reported impact on the Group’s business. The Group has
weaknesses resulted in material losses or contingencies established good contacts with the local and
requiring disclosure in the Group’s Annual Report. Those central governments and is updated with the latest
areas of non-compliance with the procedures and policies prevailing laws and regulations. In Malaysia, the
and those which require improvements as highlighted by change in Government in 2018 brings concern over
the internal and external auditors during the period have uncertainty of government policies such as taxation,
been, or are being addressed. The Board confirms that trade and investments which could significantly
its risk management and internal control systems which impede business decisions In Indonesia, the
were operational throughout the financial year and up to issuance of Hak Guna Usaha (“HGU”) for 6,004 ha
the date of approval of the Annual Report are adequate places the Group’s assets in a more secure position.
and effective to safeguard the Group’s assets.
o Risks in the refinery industry
The Board remains committed towards operating a
sound system of RMIC and therefore recognizes that the This risk pertains to the refinery operations in
system must continuously evolve to support the type of one of the Company’s subsidiary, Unitata Berhad.
business and size of operations of the Group. As such, The refinery industry is a challenging industry
the Board, in striving for continuous improvement will with tight margins and high competition amongst
put in place appropriate action plans, when necessary, to its players. Unitata Berhad has managed these
further enhance the Group’s system of RMIC. risks with efficient operations and selected niche
products to stay competitive, and by staying
The significant risks identified for the financial year vigilant of the latest developments both in the local
2018 and 2017 are outlined below: and international markets. As sales are primarily
US Dollar denominated, the currency risks are
o Fluctuating commodity prices managed by a Board approved hedging policy.
This is the risk faced by the Company due to The commissioning of the Unifuji plant in 2018 will
fluctuating commodity prices, namely crude palm oil further enhance the Group’s position in the global
prices. The Company uses a Board-regulated forward oil & fats industry
sales policy to manage this risk. The anti-palm lobby
in the European Union (“EU”) is to be taken in o Increasing labour costs
cognizance. The aversion of using palm oil for biofuels
productions is a factor to watch in the EU. The risk of increasing costs, especially labour costs is
an ever-present one. In view of the rising costs, the
o Adverse foreign exchange fluctuations Company is constantly improving its productivity
through efficient management of its labour force and
The Company is exposed to fluctuation in foreign mechanization in selected operational areas including
currency exchange differences due to its Indonesian consolidation and automation of the mills to be more
Rupiah denominated loan to its Indonesian labour efficient.
subsidiary. This loan is a long term loan and as such,
the Company feels that the currency fluctuations
will even-out in the long term.
150
The labour cost of the Group will increase with the effectiveness of the Groups’ risk management and
new Malaysian Government’s pledge to increase the internal control system including the assessment and
minimum wage. To mitigate this, Management will opinion by the Directors and management thereon.
continue to increase mechanization and focus on The report from the External Auditors was made
productivity. solely for and directed solely to the Board of Directors
in connection with their compliance with the listing
o Extreme weather conditions requirements of Bursa Malaysia Securities Berhad and
for no other purpose or parties. The External Auditors
This is a risk identified in view of the ramifications do not assume responsibility to any person other than
of extreme weather conditions on the palm oil yield. the Board of directors in respect of any aspect of this
During 2016, it had been evident that this risk had report.
a significant impact on the Company’s profitability.
Water management is in place to mitigate the effects of Audit Committee Report
drought and flooding to a certain extent. Fire brigade
team was introduced in Indonesia. Fire safety plan is Members of the Audit Committee:
in place with regular fire drills conducted to ensure Y. Hormat Dato’ Jeremy Derek Campbell Diamond
preparedness of Emergency Response Team (“ERT”) (Chairman – appointed on 31-7-2001)
in the event of fire or flood. (Independent, Non-executive Director)
o RSPO certification risk Mr. Ahmad Riza Basir
(appointed on 19-6-2004)
The Group’s downstream operations are totally (Independent, Non-executive Director)
dependent on selling RSPO-certified oils. Any non-
conformities during the certification audits is taken Mr. R. Nadarajan
seriously to safeguards our certification. (appointed on 1-6-2013)
(Independent, Non-executive Director)
o CPO and refined oils quality in relation to
contaminants The Audit Committee consists entirely of independent
non-executive directors. One of the members (Mr. R.
In the past 10 years, more focus on contaminants in Nadarajan) is an associate member of the Chartered
the refined oils have surfaced. Therefore, high quality Institute of Management Accountants, United
produce is key for our downstream operations success. Kingdom and a member of the Malaysian Institute of
Special focus on low 3MCPD, Glycidol and Mineral Accountants. This meets the requirement of the Bursa
Oil Hydrocarbon have increased lately. Mapping Securities Listing Requirements which requires at least
contaminants risks in the mills and refineries is taking one qualified accountant as a member of the Audit
place and processing methods are being monitored to Committee.
safeguard quality.
1) Objectives
Review of the statement by External Auditors
The Committee operates under the Terms and Reference
The external auditors have performed limited assurance
of Audit Committee containing requirement as spelt
procedures on this Statement on Risk Management
out by Bursa Malaysia and the Terms of Reference is
and Internal Control pursuant to the scope set out in
posted under Corporate Information section of the
Assurance Practice Guide 3, Guidance for Auditors
Company’s website at www.unitedplantations.com.
on Engagement to Report on the Statement on Risk
Management and Internal Control included in the
The Terms of Reference prescribes the Committee’s
Annual Report issued by the Malaysian Institute of
scope of responsibilities and the primary objectives of
Accountants (“MIA”) for inclusion in the Group’s
the Committee are:
Annual Report for the year ended 31 December 2018
and reported to the Board that nothing has come to
a) To assist in discharging the Board’s responsibilities
their attention that causes them to believe that the
as they relate to the Group’s management including
statement intended to be included in the Annual
risk management, internal controls, accounting
Report is not prepared, in all material respects, in
policies and financial reporting;
accordance with the disclosures required by paragraph
41 and 42 of the Guidelines, nor is the Statement
b) To provide, by way of regular meetings, a line of
factually inaccurate.
communication between the Board and the external
and internal auditors;
RPG 5 does not require the External Auditors to
consider whether the Directors’ Statement on Risk
c) To oversee and review the quality of the audits
Management and Internal Control covers all risks and
conducted by the external and internal auditors; and
controls, or to form an opinion on the adequacy and
151
d) To enhance the perceptions held by interested vi. Reviewed and assessed the trading manual
parties, such as shareholders, regulators, creditors limits for the Group.
and employees, of the credibility and objectivity of
the financial reports. vii. Reviewed the acquisition of 8,999 acres of oil
palm lands from Pinehill Pacific Berhad
2) Activities of the Audit Committee during
the year viii. Reviewed the application of hedge accounting
for the Group’s crude palm oil production
The Committee held six (6) meetings in the year under the Malaysian Financial Accounting
2018 to conduct and discharge its functions in Standard 9 for financial instruments.
accordance with the Terms of Reference mentioned
above. Details of Directors’ attendances at Audit b) External Audit
Committee meetings are as follows:
i. Reviewed with the external auditor:-
Name of Directors No. of meetings
Attended Held o The Audit Planning Memorandum and
scope of work for the year; and
Y. Hormat Dato’ Jeremy Derek
6 6
Campbell Diamond
o The Results of the audit, the relevant
Mr. Ahmad Riza Basir 6 6 audit reports and Management Letters
Mr. R. Nadarajan 6 6 together with the Management’s
responses and comments to the findings.
The Audit Committee met on a scheduled
basis. The Financial Controllers were invited to ii. Assessed the independence and objectivity
attend the meetings. The internal and external of the external auditors during the year and
auditors were also invited to discuss their audit prior to reappointment. The assessment is
findings, management letters, Audit Planning based on the private discussions, quality of
Memorandum and other matters deemed relevant. issues raised in their report and their level
of participation on issues discussed during
During the scheduled meetings, the members of the quarterly meetings they attended.
the Audit Committee also had two (2) sessions The Committee also received from the
with the internal and external auditors without the external auditors their policies and written
presence of the Management. confirmation regarding their independence
and the measures used to control the quality
During the year, the Committee carried out the of their work;
following activities:
iii. Evaluated the performance and effectiveness
a) Internal Audit (IA) (Both in-house and outsourced) of the external auditors and made
recommendations to the Board of Directors
i. Reviewed the annual audit plans for 2018 to on their reappointment and remuneration;
ensure adequate scope, coverage of the activities and
of the Company and the Group and the resource
requirements and budget of in-house Internal iv. Evaluated and assessed the issues arising
Audit department to carry out its functions; from the implementation of SST and the
documentation of the resolutions with the
ii. Reviewed the Internal Audit reports, audit Customs;
recommendations and Management’s
responses to these recommendations (further c) Financial Reporting
details provided under item 5);
Reviewed the quarterly unaudited financial results
iii. Reviewed the status report on corrective and the annual audited financial statements of the
actions implemented by Management to Company and the Group prior to recommending
rectify the outstanding audit issues to ensure them for approval by the Board of Directors.
control lapses are addressed;
The Committee, in the current year, reviewed
iv. Instructed the conduct of investigations on only the first three quarters of the unaudited
activities within its terms of reference; and quarterly financial results as the fourth quarter
announcement had been dispensed with as
v. Evaluated the performance and effectiveness approved by Bursa, the approval is on the condition
of the outsourced internal auditors, KPMG that the full financial report is announced within
Management & Risk Consulting Sdn. Bhd. two months from the close of the financial year
(“KPMG”) and the in-house internal auditors. end.
152
The review was to ensure that the financial whenever improper, illegal and dishonest acts are
reporting and disclosures are in compliance with: reported.
i. Provisions of the Companies Act, 2016; The Group Internal Audit Department is headed
by a qualified accountant and supported by 2
ii. Listing Requirements of Bursa Malaysia executives and 2 staffs with experiences in the
Securities Berhad; audit and estate operations. The Internal Audit
programmes are tailored specifically based on the
iii. Applicable approved accounting standards in risk areas identified by the Executive Committee
Malaysia; and and Audit Committee with emphasis on
operational weaknesses identified and prevalent
iv. Other legal and regulatory requirements. in the plantation industry. This will ensure that
the audit programme add value to management
d) Related Party Transactions decision making.
During the year the Management had reported to The internal auditors review the effectiveness of the
the Audit Committee the related party transactions internal control structures of the Group’s activities
which were recurrent in nature as disclosed under focusing on high risk areas as determined using a
Note 26 of the financial statements. There were risk-based approach.
no other related party transactions entered into
by the Company and the Group. All operating units are audited at least once over a two
year period by the in-house internal auditors, and at
e) Annual Report least once over a three year period by the outsourced
internal auditors (excluding foreign operations).
o Reviewed with the external auditors, their
evaluation and report of the state of risk The internal audits cover the review of the
management and internal control of the adequacy of risk management, operational
Group and reported the results thereof to the controls, compliance with established procedures,
Board of Directors. guidelines and statutory requirements, quality of
assets and management efficiency, amongst others.
o Reviewed the Audit Committee Report, These audits are to ensure that the established
Overview Statement on Corporate controls are appropriate, effectively applied and
Governance, Corporate Governance Report achieve acceptable risk exposures consistent with
and Statement on Risk Management and the Group’s risk management policy. In performing
Internal Control and recommended the such reviews, recommendations for improvement
reports to the Board for publication in the and enhancements to the existing system of
2018 Annual Report. internal controls and work processes are made.
f) Risk Assessment and Management All auditing activities are conducted in line with the
Group’s objectives and policies, in accordance with
Reviewed and discussed with Management the applicable laws and regulations, and as guided by
outcome of the exercise to identify, evaluate and Code of Ethics and International Standards for the
manage significant strategic, operational, financial, Professional Practice of Internal Auditing.
hedging, trading, tax-related and legal risks faced
by the Group. The report was compiled annually For the year 2018, the activities undertaken by the
and presented to the Audit Committee for further internal auditors were as follows:
deliberations on the adequacy and effectiveness
of the actions taken. In particular, the new joint a) Developed an audit plan using risk-based
venture with Fuji Oil Group was discussed and the approach, and carried out the assignments
ongoing status reported on quarterly basis during according to the audit plan for the year;
the Audit Committee meetings.
b) Conducted ad-hoc assignments as instructed
3) Internal Audit Function by the Audit Committee;
The Committee is supported by the in-house Group c) Recommended improvements and

Internal Audit Department and the outsourced enhancements to the existing system of
internal auditors, KPMG in the discharge of its internal controls and work procedures/
duties and responsibilities. The internal auditors processes;
provide independent and objective assessment
on the adequacy and effectiveness of the risk d) Conducted investigation into activities or
management and internal controls. The in-house matters as instructed by the Audit Committee
internal auditors also carry out investigative audits and Management;
153
e) Performed a review and assessment exercise and enhancement to the fixed assets management
to identify, evaluate and manage significant system. The findings are expected to be rectified in
strategic, operational, financial, hedging, trading, the respective operating units and follow-up audits
tax-related and legal risks faced by the Group; are done to confirm this.
and
For the outsourced internal audits, 5 (2017: 6) audit
f) Preparation of Audit Committee Report and engagements were completed/ongoing in 2018,
Statement on Risk Management and Internal encompassing 0 (2017: 1) Palm Oil Mill audit, 4
Control for the Company’s Annual Report. (2017: 4) Estate audits and also the Refinery audit.
A total of 24 (2017: 26) audit engagements (in- The audit objectives are to independently assess
house internal audits) were completed in 2018. The the system of internal control as established by
in-house internal audit team visited 2 Palm Oil Mills Management, the adequacy and integrity of such
(2017: 2) and 5 Estates (2017: 6) in 2018 to conduct internal control system versus the objectives
internal auditing on the financial and operational served, and to make appropriate recommendation
aspects of the operations with particular emphasis thereof. Material findings include among others
on cash management, stocks, reporting and fixed enhancement to the crude palm oil and palm
assets. In addition, 9 special audits (2017:11) were kernel dispatches, enhancement to stock count
conducted primarily focusing on the audits of seed practices and stock management procedures. The
production, sludge oil sales, cash handling, bulking audit engagements are performed on a rotational
installation operation and the review of Plant & basis to ensure that all business units will be
Vehicle Maintenance system (2017: focusing on the audited at least once every 2 years.
cash handling, CCTV review, vehicles maintenance
costs and foreign workers recruitments). Any control and procedural weaknesses
identified were discussed with Management
Furthermore 7 follow up audits (2017: 6) and remedial measures instituted to address the
were performed including surprise coconut weaknesses identified. The Audit Committee
counts and follow-up audits on previous audit will review the audit report presented and the
recommendations and 1 Refinery audit (2017: Management’s responses to ensure that material
1 bulking installation audit). Material findings findings are adequately addressed. Some follow
include among others weaknesses in existing up audit works were done subsequently for
petty cash management, enhancement in payment material findings to ensure adherence to the
procedures, weaknesses in stock management audit recommendation if any.
A total of 29 (2017: 32) audit engagements (combined in-house and outsourced internal audits) were
completed in 2018, categorized as follows:
Internal Audits completed in 2018 by Internal Audits completed in 2018 by

In-house Internal Audit Team Out-sourced Internal Auditors, KPMG
ϭ
ZĞĮŶĞƌǇ͕
Mills, 2
ZĞĮŶĞƌǇ͕ϭ
Follow up, 7
Estates, 5
ƐƚĂƚĞƐ͕ϰ
Special, 9
154
Nomination Committee Report
The members of the Nomination Committee (NC) as 1.2 To recommend to the Board, Directors to fill
at the end of financial year 2018 were as follows:- the seats on Board Committees.
Ybhg. Tan Sri Datuk Dr. Johari bin Mat (Chairman) 1.3 To review annually the Board’s required mix
(Independent, Non-Executive Director) of skills and experience and other qualities, including
core competencies which the Board members should
Y. Hormat Dato’ Jeremy Derek Campbell Diamond bring to the Board and Committees to best serve the
(Independent, Non-Executive Director) business and operations of the Group as a whole.
Mr. R. Nadarajan 1.4 To assist the Board by formulating and

(Independent, Non-Executive Director) periodically reviewing the criteria and procedure to
be carried out by the Committee for assessing the
The principal function of making recommendations effectiveness of the Board and Board Committees as a
for new appointments to the Board is delegated to the whole.
Nomination Committee.
1.5 To assess the board balance by reviewing the
The NC consists entirely of non-executive directors as size, structure and composition of the Board.
required under the Main Market Listing Requirements,
all of whom are independent directors. 1.6 To assess the independence of the independent
directors annually and to recommend to the Board
The Committee has access to the services of the whether an independent director may continue to
Company’s Secretary who would record and maintain serve on the Board as an independent director, after his
minutes of meetings and obtain information for the tenure has exceeded a cumulative term of nine years.
purpose of meeting statutory obligations as well as
obligations arising from Bursa Malaysia’s Main Market 1.7 To consider directors who are due to retire on
Listing Requirements. rotation at the AGM and recommend their re-election.
Objectives 1.8 To develop, review and monitor the policies

and approach towards boardroom diversity.
The primary objectives of the Committee are:
1.9 To review and assess the effectiveness of the
a) to assist in discharging the Board’s responsibilities Board’s succession plan.
as they relate to the Group’s board renewal and
succession planing; 1.10 To review the adequacy of the Terms of
Reference in the light of new practices and regulatory
b) to assess the effectiveness of the Board and requirements to ensure that the Committee is operating
Committees; and at maximum effectiveness, and to recommend changes
as and when required.
c) to assess the contributions of individual directors.
1.11 To perform such other functions relating to
the foregoing as the Board may, from time to time,
Terms of Reference request.
The duties of the Committee: Activities of the NC during the year
1.1 To consider, in making its recommendations In 2018, the NC met 2 times and the attendance of
to the Board, candidates proposed by any director members of the Committee was as follows:-
or shareholder or consultant, for all directorships. In
making the recommendations, the NC shall consider
the candidates’:
Name of Directors No. of meetings
o skills, knowledge, expertise and experience; Attended Held
o professionalism; Ybhg. Tan Sri Datuk Dr. Johari bin Mat
o integrity; and 2 2
(Chairman, Independent, Non-Executive)
o in the case of candidates for the position of Y. Hormat Dato’Jeremy Derek Campbell Diamond
independent directors, the NC shall also evaluate the 2 2
(Independent, Non-Executive)
candidates’ ability to discharge such responsibilities
Mr. R. Nadarajan
or functions as expected from independent non- 2 2
(Independent, Non-Executive)
executive directors.
155
The NC held one meeting in March 2018 for Board and the Committees, and the contributions of
evaluation and selection of candidate for the each individual director were deliberated.
Board. Selection of candidates to be considered
for appointment as directors is facilitated through The Committee reached the conclusion that the Board
recommendations from members of the Board and/or Committees and the directors in their individual
shareholders, industry acquaintance, consultants etc capacity supported the current needs of the Board. For
to gain access to a wide pool of potential candidates. the three (3) independent directors who have exceeded
the nine (9) years tenure on the Board, namely Tan Sri
The NC will then meet with the proposed Datuk Dr. Johari bin Mat, Dato’ Jeremy Derek Campbell
candidates to assess their suitability in terms of age, Diamond and Mr. Ahmad Riza Basir the NC (with
qualifications, experience, expertise, any potential absention of interested individuals) had reviewed
conflict of interest and leadership quality before their attendance, participation in Board deliberations,
recommending them for appointment to the Board. including Board Committees and concluded that
all of them remain objective and independent and
The NC held another meeting in December 2018 for their lengths of service do not interfere with their
the purpose of making an assessment of individual exercise of independent judgement and accordingly
directors and board committees, for considering recommended to the Board to propose to the
the re-election of directors who are due to retire shareholders to retain them as independent directors.
on rotation at the A.G.M., and the continuation in
office as independent directors for the independent The Company will seek the shareholders’ approval for
directors who have exceeded tenure of nine (9) years. these independent directors. When deliberating on
the performance of a particular Director who is also a
Under Article 108 of the Company’s Constitution member of the NC, that member abstained from the
one-third of the directors shall retire from office at discussions.
the A.G.M. and are eligible to seek re-election.
The NC also reviewed the required mix of skills and

qualities that non-executive directors should bring to
the Board. An assessment on the effectiveness of the
Member of our Company’s Auxiliary Police Force attending the monthly drill at Jendarata.
156
Additional Disclosures
Pursuant to the listing requirements of Bursa Malaysia Non-audit fees paid and payable to Company and
Securities Berhad, additional disclosures by the Group Subsidiaries’ external auditors for the financial
for the year ended 31 December 2018 are as follows :- year were as follows:-
1) Utilization of proceeds raised from Corporate RM

Proposals Tax services 66,900
There were no issue of shares during the financial 3) Cost of Internal Audit
year.
RM 646,261 was incurred by the Group in the
2) Non-audit fees paid to External Auditors Financial year for its outsourced internal audit and
in-house internal audit department.
Dato’ Carl Bek-Nielsen together with visitors Mr and Mrs Ekdahl at the screw-press station in the Jendarata palm oil mill in early
November 2018
157
Oil Palm, the highest oil yielding crop in the world.
Financial Statements
For the year ended 31 December 2018
Contents
Report of the Directors 160-165
Statements of Comprehensive Income 166-167
Statements of Financial Position 168-169
Consolidated Statements of Changes in Equity 170
Statements of Changes in Equity - Company 171
Cash Flow Statements 172-173
Notes to the Financial Statements 174-229
Statement by Directors 230
Statutory Declaration 230
Report of the Auditors 231-235
159
Report Of The Directors For The Year Ended 31 December 2018
The Directors have pleasure in submitting for your There were no material transfers to or from reserves or
consideration their 98th annual report together with the provisions during the financial year other than as disclosed
audited financial statements of the Group and of the in the statements of changes in equity.
Company for the year ended 31 December 2018.
In the opinion of the Directors, the results of the operations
Principal Activities of the Group and of the Company during the financial
year have not been substantially affected by any item,
The Company carries on the business of oil palm and transaction or event of a material and unusual nature,
coconut cultivation and processing on its plantations in other than as disclosed in the financial statements.
Peninsular Malaysia.
Group’s Plantation Properties
The Company also has an active Research Centre providing
improved planting material for the Group’s estates as well The Group’s plantation properties at the end of the year
as for the Malaysian agricultural sector in general. were as follows:
The subsidiary companies are primarily engaged in the

following activities:
(a) Business of oil palm cultivation and processing in Malaysia Hectares

Indonesia. UIE estates 10,369
Jendarata 6,336
(b) Refining of palm oil, manufacturing edible oils, fats,
cocoa butter substitute and trading in crude palm oil Kuala Bernam 830
and palm kernel products. Sungei Bernam 2,276
Ulu Bernam 3,198
(c) Handling and storage of vegetable oil and molasses.
Changkat Mentri 2,551
(d) Trading, marketing and investment holding. Ulu Basir 3,991
Sungei Erong 3,620
There have been no significant changes in the nature of Sungei Chawang 3,281
these activities during the year.
Seri Pelangi 1,422
Financial Results Lima Blas 2,892
Sub-total 40,766
Group Company
RM’000 RM’000 Indonesia
PT Surya Sawit Sejati (planted area) 9,098
Profit after taxation 374,100 273,572 Plasma 1,259
Attributable to:
Conservation 8,239
Equity owners of the parent 372,417 273,572 Buildings & others 70
Non-controlling interests 1,683 - Sub-total 18,666
Total 374,100 273,572 Total 59,432
160
Dividends Treasury Shares

Dividends paid by the Company since the end of the The shareholders of the Company, by a
previous financial year were as follows: resolution passed at the Annual General Meeting held on
18 June 2005, approved the Company’s plan to purchase
(a) A final single-tier dividend of 20 sen per share up to 10% of the issued and paid-up share capital of the
amounting to RM41,558,498 in respect of the previous Company. The authority granted by the shareholders
financial year was paid on 18 May 2018. was subsequently renewed during subsequent Annual
General Meetings, including the last meeting held on 24
(b) A special single-tier dividend of 100 sen per share April 2018. Notwithstanding the above, the Company
amounting to RM207,792,492 in respect of the in exercising this mandate shall ensure that the public
previous financial year was paid on 18 May 2018. spread shall not fall below 25% as required under the
Main Market Listing Requirements of Bursa Malaysia
(c) An interim single-tier dividend of 20 sen per share Securities Berhad.
amounting to RM41,558,498 in respect of the current
financial year was paid on 12 December 2018. As at 31 December 2018, the number of treasury shares
held remained at 341,774 shares as there were no share
(d) A special single-tier dividend of 10 sen per share buy-back nor any cancellation, re-sale or distribution
amounting to RM20,779,249 in respect of the current or distribution of treasury shares in the current year.
financial year was paid on 12 December 2018. These treasury shares were held in accordance with the
requirement of Section 127 of the Companies Act 2016.
At the forthcoming Annual General Meeting, a final
single-tier dividend of 20 sen per share amounting to The Company has the right to cancel, resell these shares
RM41,558,498 and a special single-tier dividend of 90 and/or distribute these shares as dividends at a later date.
sen per share amounting to RM187,013,243 in respect As treasury shares, the rights attached to voting, dividends
of the year ended 31 December 2018 on the ordinary and participation in other distribution are suspended.
shares in issue at book closure date will be proposed
for shareholders’ approval. The financial statements As at the end of the financial year, the number of
for the current financial year do not reflect these ordinary shares in issue after deducting treasury shares is
proposed dividends. Such dividends, if approved by 207,792,492 ordinary shares.
the shareholders, will be accounted for in shareholders’
equity as an appropriation of retained profits in the next
financial year ending 31 December 2019.
161
Directors
The names of the Directors of the Company in office since The name of the director of a subsidiary of the Company
the date of the last report and at the date of this report are: since the beginning of the financial year to the date of this
report, not including those directors listed above is:
Ybhg. Dato’ Carl Bek-Nielsen* Mr. Geoffrey Ian George Cooper
Mr. Ho Dua Tiam*
Mr. Ahmad Riza Basir The following Directors who held office at the end of
Y.Hormat Dato’ Jeremy Derek Campbell Diamond the financial year had according to the register required
Mr. Martin Bek-Nielsen* to be kept under Section 59 of the Companies Act 2016
Mr. Loh Hang Pai an interest in shares of the Company and its subsidiary
Mr. R Nadarajan companies, as stated below:
Madam Rohaya binti Mohammad Yusof
Mr. Jorgen Balle (Appointed on 21 May 2018)
* These Directors are also directors of the

Company's subsidiaries
Number of Shares
% of Issued
1 January 31 December
Bought Sold Share
2018 2018
Capital*
The Company:
Ybhg. Tan Sri Datuk

Dr. Johari bin Mat
- held directly 90,000 - - 90,000 0.04
- deemed interested 10,000 - - 10,000 -
Ybhg. Dato’ Carl Bek-Nielsen

- held directly 2,392,491 20,000 - 2,412,491 1.16
*1
- deemed interested 99,371,429 - - 99,371,429 47.82
Mr. Ho Dua Tiam

- held directly 707,400 - - 707,400 0.34

- held directly 70,500 10,000 - 80,500 0.04
Y. Hormat Dato’ Jeremy Derek

Campbell Diamond
- held directly 14,000 2,000 - 16,000 0.01
- deemed interested 263,000 66,000 - 329,000 0.16

- held directly 552,389 - - 552,389 0.27
*2
- deemed interested 99,329,371 - - 99,329,371 47.80
Mr. Loh Hang Pai

- held directly 26,000 17,000 - 43,000 0.02
162
Notes:
*1
Dato’ Carl Bek-Nielsen
9,718,571 shares - Deemed interested in the shares registered in the name of United
International Enterprises Limited
89,607,800 shares - Deemed interested in the shares registered in the name of Maximum Vista
Sdn. Bhd.
45,058 shares - Deemed interested through immediate family members.
99,371,429 shares
*2
9,718,571 shares - Deemed interested in the shares registered in the name of United
International Enterprises Limited
89,607,800 shares - Deemed interested in the shares registered in the name of Maximum Vista
Sdn. Bhd.
3,000 shares - Deemed interested through immediate family members.
99,329,371 shares
* calculated based on 207,792,492 shares which do not include 341,774 treasury shares.
By virtue of their interest in the shares of United Since the end of the previous financial year, no Director
International Enterprises Limited and Maximum Vista has received or become entitled to receive any benefits
Sdn. Bhd., Dato' Carl Bek-Nielsen and Mr. Martin Bek- (other than a benefit included in the aggregate amount
Nielsen are also deemed to have interest in the shares of of emoluments received or due and receivable by the
all the subsidiary companies of the Company to the extent Directors shown in the financial statements or the fixed
the Company has an interest in them. salary of a full-time employee of the Company) by reason
of a contract made by the Company or a related corporation
The remaining Directors in office at the end of the financial with any Director or with a firm of which the Director is
year did not have any interest in shares in the Company or a member or with a company in which the Director has a
its related corporations during the financial year. substantial financial interest except as disclosed in Note
26 to the financial statements.
Neither at the end of the financial year, nor at any time
during the year, did there subsist any arrangement to
which the Company was a party, whereby the Directors
might acquire benefits by means of the acquisition of
shares or debentures of the Company or any other body
corporate.
163
Directors’ indemnity
There was no amount of insurance premium paid or payable for the directors or officers of the Company in respect of
their liability for any act or omission in their capacity as directors or officers of the Company or in respect of costs incurred
by them in defending or settling any claim or proceedings relating to any such liability for the financial period.
Other statutory information

(e) As at the date of this report there does not exist:
(a) Before the statements of comprehensive income and
statements of financial position of the Group and (i) any charge on the assets of the Group and of the
of the Company were made out, the Directors took Company which has arisen since the end of the
reasonable steps: financial year which secures the liabilities of any
other person; or
(i) to ascertain that proper action had been taken
in relation to the writing off of bad debts and (ii) any contingent liability in respect of the Group
the making of allowance for doubtful debts and and of the Company which has arisen since the
satisfied themselves that there were no known end of the financial year.
bad debts and that adequate allowance had been
made for doubtful debts; and (f) In the opinion of the Directors:
(ii) to ensure that any current assets which were (i) no contingent or other liability has become
unlikely to realise their values as shown in the enforceable or is likely to become enforceable
accounting records in the ordinary course of within the period of twelve months after the end
business had been written down to an amount of the financial year which will or may affect the
which they might be expected so to realise. ability of the Group and of the Company to meet
its obligations when they fall due; and
(b) At the date of this report, the Directors are not aware
of any circumstances which would render: (ii) no item, transaction or event of a material and
unusual nature has arisen in the interval between
(i) it necessary to write off any bad debts or the the end of the financial year and the date of this
amount of allowance for doubtful debts in the report which is likely to affect substantially the
financial statements of the Group and of the results of the operations of the Group and of
Company inadequate to any substantial extent; the Company for the financial year in which this
and report is made.
(ii) the values attributed to current assets in the

financial statements of the Group and of the
Company misleading.
(c) At the date of this report, the Directors are not

aware of any circumstances 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.
(d) At the date of this report, the Directors are not aware
of any circumstances not otherwise dealt with in this
report or financial statements of the Group and of the
Company which would render any amount stated in
the financial statements misleading.
164
Indemnity to auditors
To the extent permitted by law, the Company has
agreed to indemnify its auditors, Ernst & Young, as
part of the terms of the audit engagement against
claims by third parties arising from the audit (for an
unspecified amount). No payment has been paid to
indemnify Ernst & Young during the financial period.
Auditors and auditors' remuneration

The auditors, Ernst & Young, have expressed their
willingness to continue in office.
Auditors' remuneration of the Group and Company

are RM621,000 and RM318,000 respectively.
Signed on behalf of the Board in accordance with a

resolution of the Directors dated 23 February 2019.
TAN SRI DATUK }

DR. JOHARI BIN MAT }
}
}
}
} Directors
}
DATO’ CARL BEK-NIELSEN }
Jendarata Estate,
36009 Teluk Intan,
Perak Darul Ridzuan,
Malaysia.
165
Statements Of Comprehensive Income
For The Year Ended 31 December 2018
Group Company
2018 2017 Changes 2018 2017 Changes

Note RM’000 RM’000 (%) RM’000 RM’000 (%)
Revenue 4 1,305,591 1,474,323 (11.4) 575,318 591,914 (2.8)

Other income 38,571 38,857 (0.7) 5,310 12,342 (57.0)
1,344,162 1,513,180 (11.2) 580,628 604,256 (3.9)
Changes in finished goods (21,709) (17,904) 21.3 10,497 (9,199) 214.1

Raw materials and consumables used (466,475) (628,238) (25.7) - (5,015) (100.0)
Depreciation of property,
plant and equipment (84,861) (84,114) 0.9 (56,961) (55,117) 3.3
Amortisation of land use rights (1,091) (688) 58.6 - - -
Staff costs 5 (176,757) (164,440) 7.5 (131,951) (118,806) 11.1
Other expenses (128,700) (139,815) (7.9) (70,975) (73,387) (3.3)
Profit from operations 5 464,569 477,981 (2.8) 331,238 342,732 (3.4)

Finance costs 6 (25) (22) 13.6 (20) (19) 5.3
Investment and interest income 7 30,239 26,112 15.8 26,022 20,047 29.8
Share of results of joint venture 14 (3,911) (101) 3,772.3 - - -
Profit before taxation 490,872 503,970 (2.6) 357,240 362,760 (1.5)

Taxation 8 (116,772) (109,288) 6.8 (83,668) (73,275) 14.2
Net profit for the year 374,100 394,682 (5.2) 273,572 289,485 (5.5)
Attributable to:
Equity owners of the parent 372,417 392,980 (5.2) 273,572 289,485 (5.5)
Non-controlling interests 1,683 1,702 (1.1) - - -
374,100 394,682 (5.2) 273,572 289,485 (5.5)
Earnings per share (sen) 9 179 189 (5.3)
The accompanying notes form an integral part of the financial statements.
166
Statements Of Comprehensive Income
Group Company
2018 2017 Changes 2018 2017 Changes

RM’000 RM’000 (%) RM’000 RM’000 (%)
Net profit for the year 374,100 394,682 (5.2) 273,572 289,485 (5.5)
Other comprehensive income:
Items that will be reclassified subsequently

to profit or loss:
Currency translation differences
- subsidiaries (5,801) (13,884) (58.2) - - -
Cash flow hedge
- changes in fair value 463 - - - - -
Tax expense relating to components
of other comprehensive income (111) - - - - -
(5,449) (13,884) (60.8) - - -
Items that will not be reclassified subsequently

to profit or loss:
Actuarial changes on defined retirement
benefit obligations 1,617 - - - - -
1,617 - - - - -
Total other comprehensive loss

for the year (3,832) (13,884) (72.4) - - -
Total comprehensive income for the year 370,268 380,798 (2.8) 273,572 289,485 (5.5)
Total comprehensive income

attributable to:
Equity owners of the parent 368,851 379,493 (2.8) 273,572 289,485 (5.5)
Non-controlling interests 1,417 1,305 8.6 - - -
370,268 380,798 (2.8) 273,572 289,485 (5.5)
167
Statements Of Financial Position
As At 31 December 2018
Group
As at 1 January
2018 2017 2017
Note RM’000 RM’000 RM’000
Assets
Non-Current Assets
Property, plant and equipment 10 (a) 1,493,021 1,474,059 1,419,373
Land use rights 10 (b) 38,105 34,115 36,192
Associated company 13 50 50 50
Joint venture 14 25,988 29,899 -*
Derivatives 29 (g) 1,582 3,417 -
Deferred tax assets 20 3,631 3,524 1,732
1,562,377 1,545,064 1,457,347
Current Assets
Biological assets 11 28,509 31,388 28,262
Inventories 15 152,866 156,833 189,958
Trade and other receivables 16 236,108 237,588 293,239
Prepayments 3,218 3,211 2,475
Tax recoverable 2,273 3,848 6,247
Derivatives 29 (g) 17,238 20,244 3,456
Cash and bank balances 17 (a) 202,389 473,711 272,292
Short term funds 17 (b) 713,411 377,874 418,622
1,356,012 1,304,697 1,214,551
Total Assets 2,918,389 2,849,761 2,671,898
Equity and Liabilities
Equity attributable to owners of the parent
Share capital 18 (a) 390,054 390,054 208,134
Treasury shares 18 (b) (8,635) (8,635) (8,635)
Reserves 19 2,199,670 2,142,506 2,183,893
2,581,089 2,523,925 2,383,392
Non-controlling interests 7,828 6,893 5,588
Total Equity 2,588,917 2,530,818 2,388,980
Non-Current Liabilities
Deferred tax liabilities 20 145,991 140,380 123,764
Retirement benefit obligations 21 13,615 13,626 13,254
Derivatives 29 (g) - 1,115 178
159,606 155,121 137,196
Current Liabilities
Trade and other payables 22 137,329 137,749 114,403
Tax payable 22,451 13,333 16,152
Retirement benefit obligations 21 1,234 971 749
Derivatives 29 (g) 8,752 11,658 14,312
Bank borrowings 23 100 111 106
169,866 163,822 145,722
Total Liabilities 329,472 318,943 282,918
Total Equity and Liabilities 2,918,389 2,849,761 2,671,898
* The carrying amount of the investment in joint venture as at 1 January 2017 was RM1.00.
168
Statements Of Financial Position
As At 31 December 2018
Company
As at 1 January
2018 2017 2017
Assets
Non-Current Assets
Property, plant and equipment 10 (a) 1,233,833 1,202,432 1,096,422
Subsidiary companies 12 355,540 379,865 404,826
Associated company 13 50 50 50
Joint venture 14 30,000 30,000 -*
1,619,423 1,612,347 1,501,298
Current Assets
Biological assets 11 24,910 26,614 21,743
Inventories 15 40,956 33,232 42,821
Trade and other receivables 16 118,170 78,456 168,743
Prepayments 402 399 86
Cash and bank balances 17 (a) 85,209 371,285 152,566
Short term funds 17 (b) 337,652 136,224 273,194
607,299 646,210 659,153
Total Assets 2,226,722 2,258,557 2,160,451

Share capital 18 (a) 390,054 390,054 208,134
Treasury shares 18 (b) (8,635) (8,635) (8,635)
Reserves 19 1,609,628 1,647,743 1,779,138
Total Equity 1,991,047 2,029,162 1,978,637

Deferred tax liabilities 20 139,095 129,338 114,977
Retirement benefit obligations 21 5,773 5,672 6,910
144,868 135,010 121,887
Current Liabilities
Trade and other payables 22 69,997 86,460 46,631
Tax payable 19,898 7,276 12,703
Retirement benefit obligations 21 912 649 593
90,807 94,385 59,927
Total Equity and Liabilities 2,226,722 2,258,557 2,160,451
169
Statements Of Changes In Equity
Attributable to equity owners of the parent

Group Non-distributable Distributable
Cash Foreign
flow currency
Share hedge Share Capital translation Treasury Retained Non-
capital reserve premium reserve reserve shares profits controlling Total
Note (Note 18(a)) (Note 19) (Note 19) (Note 19) (Note 19) (Note 18(b)) (Note 19) Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2017 208,134 - 181,920 21,798 - (8,635) 1,980,175 2,383,392 5,588 2,388,980
for the year - - - - (13,487) - 392,980 379,493 1,305 380,798
Dividends, representing total
transaction with owners of
the parent 24 - - - - - - (238,960) (238,960) - (238,960)
208,134 - 181,920 21,798 (13,487) (8,635) 2,134,195 2,523,925 6,893 2,530,818

Transfer pursuant to S618(2)
of CA 2016* 181,920 - (181,920) - - - - - - -
At 31 December 2017 390,054 - - 21,798 (13,487) (8,635) 2,134,195 2,523,925 6,893 2,530,818
At 1 January 2018 390,054 - - 21,798 (13,487) (8,635) 2,134,195 2,523,925 6,893 2,530,818
for the year - 352 - - (5,535) - 374,034 368,851 1,417 370,268
Dividends, representing total
transaction with owners of
the parent 24 - - - - - - (311,687) (311,687) - (311,687)
Dividends to non-controlling
shareholders of a subsidiary - - - - - - - - (482) (482)
At 31 December 2018 390,054 352 - 21,798 (19,022) (8,635) 2,196,542 2,581,089 7,828 2,588,917
Note: * Pursuant to Section 618(2) of the Companies Act 2016 ("CA 2016"), any outstanding share premium and capital redemption reserve accounts shall
become part of Share Capital.
170
Statements Of Changes In Equity
Company Non-distributable Distributable

Cash flow
hedge Share Treasury Retained
Share capital reserve premium shares profits
Note (Note 18(a)) (Note 19) (Note 19) (Note 18(b)) (Note 19) Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2017 208,134 - 181,920 (8,635) 1,597,218 1,978,637
Total comprehensive
income for the year - - - - 289,485 289,485
Dividends, representing
total transaction with
owners of the parent 24 - - - - (238,960) (238,960)
208,134 - 181,920 (8,635) 1,647,743 2,029,162

Transfer pursuant to
S618(2) of CA 2016* 181,920 - (181,920) - - -
At 31 December 2017 390,054 - - (8,635) 1,647,743 2,029,162
At 1 January 2018 390,054 - - (8,635) 1,647,743 2,029,162
Total comprehensive
income for the year - - - - 273,572 273,572
Dividends, representing
total transaction with
owners of the parent 24 - - - - (311,687) (311,687)
At 31 December 2018 390,054 - - (8,635) 1,609,628 1,991,047
Note: * Pursuant to Section 618(2) of the Companies Act 2016 ("CA 2016"), any outstanding share premium and capital
redemption reserve accounts shall become part of Share Capital.
171
Cash Flow Statements
Group Company
2018 2017 2018 2017

Note RM’000 RM’000 RM’000 RM’000
Cash Flows From

Operating Activities
Receipts from customers 1,348,013 1,485,596 573,619 591,819

Payments to suppliers (485,374) (643,955) - (5,621)
Payments of operating expenses (273,747) (229,644) (197,714) (118,341)
Payments of taxes (101,234) (95,370) (61,289) (64,341)
Other receipts 35,524 51,427 2,787 9,317
Net cash generated from

523,182 568,054 317,403 412,833
operating activities
Cash Flows From

Investing Activities
Proceeds from sale of property, plant

and equipment 3,047 12,105 2,746 245
Investment in a joint venture - (30,000) - (30,000)
Interest income 34,151 22,049 19,281 13,607
Net change in deposits with licensed
banks with tenure more than 3 months 301,808 (196,541) 244,613 (156,613)
Net change in short term funds (335,537) 40,748 (201,428) 136,970
Dividend received from a
subsidiary company - - 3,500 6,000
Redemption of RCCPS - - 25,000 25,000
Deposit placed for purchase of land (41,357) - (41,357) -
Purchase of property, plant
and equipment (a) (133,976) (146,245) (106,907) (132,540)
Land use rights payment made (5,901) (1,170) - -
Net cash used in investing activities (177,765) (299,054) (54,552) (137,331)
172
Cash Flow Statements
Group Company
2018 2017 2018 2017

Note RM’000 RM’000 RM’000 RM’000
Cash Flows From

Financing Activities
Interest paid (25) (22) (20) (19)

Dividends paid (311,687) (238,960) (311,687) (238,960)
Dividends paid to non-controlling
(482) - - -
shareholders of a subsidiary
Inter-company balances - - (2,200) 50,728
Associated company balances (7) 7 (7) 7
Joint venture balances (2,719) (25,152) 9,600 (25,152)
Net cash used in financing activities (314,920) (264,127) (304,314) (213,396)
Net increase/(decrease) in cash and

30,497 4,873 (41,463) 62,106
cash equivalents
Cash and cash equivalents

120,792 115,919 75,672 13,566
at the beginning of year

(b) 151,289 120,792 34,209 75,672
at end of year
(a) Total purchases of property, plant and equipment during the year 2018 were made up of purchases which were fully paid
in cash, and payments amounting to RM13,237,000 in relation to the amounts included in sundry payables in 2017 (total
purchases of property, plant and equipment in 2017 for the Group and the Company amounted to RM175,582,000 and
RM161,877,000 respectively, out of which RM146,245,000 for the Group and RM132,540,000 for the Company were fully
paid for in cash and the remaining amounts were included in sundry payables).
(b) Analysis of cash and cash equivalents:

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Deposits with licensed banks 145,729 443,429 82,719 369,660

Cash at banks and in hand 56,660 30,282 2,490 1,625
Bank overdrafts (100) (111) - -
202,289 473,600 85,209 371,285
Less: Deposits with licensed banks

with tenure more than 3 months (51,000) (352,808) (51,000) (295,613)

at end of year 151,289 120,792 34,209 75,672
173
Notes To The Financial Statements
1. Corporate Information
The Company carries on the business of oil palm and coconut cultivation and processing on its plantations in Peninsular
Malaysia. The Company also has an active Research Centre providing improved planting material for the Group’s estates
as well as for the Malaysian agricultural sector in general. The principal activities of the subsidiary companies, joint
venture and associated company are as disclosed in Note 3.
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 and principal place of business is located at Jendarata
Estate, 36009 Teluk Intan, Perak Darul Ridzuan.
The number of employees at 31 December 2018 for the Group was 6,508 (2017: 6,825) and for the Company was 4,936
(2017: 5,223).
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
Directors dated 23 February 2019.
2. Significant Accounting Policies

2.1 Basis of Preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the requirements
of the Companies Act 2016.
For all periods up to and including the year ended 31 December 2017, the Group and the Company prepared
its financial statements in accordance with Financial Reporting Standards ("FRS"). These financial statements for
the year ended 31 December 2018 are the first the Group and the Company have prepared in accordance with
MFRS, including MFRS 1 - First-time Adoption of Malaysian Financial Reporting Standards, MFRS 9 Financial
Instruments, MFRS 15 Revenue from Contracts with Customers and MFRS 141 - Agriculture. Please refer to Note
2.2 for information on the Group's and the Company's adoption of MFRS and the impact of transition to MFRS.
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting
policies below.
The financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest
thousand (“RM’000”) except when otherwise indicated.
2.2 First-time adoption of Malaysian Financial Reporting Standards
These financial statements for the year ended 31 December 2018 are the first the Group and the Company have
prepared in accordance with MFRS, including MFRS 1 - First-time Adoption of Malaysian Financial Reporting
Standards, MFRS 9 Financial Instruments, MFRS 15 Revenue from Contracts with Customers and MFRS 141 -
Agriculture. For periods up to and including the year ended 31 December 2017, the Group and the Company
prepared its financial statements in accordance with Financial Reporting Standards ("FRS Framework").
Accordingly, the Group and the Company have prepared financial statements that comply with MFRS applicable
as at 31 December 2018, together with the comparative period data for the year ended 31 December 2017, as
described in the summary of significant accounting policies. In preparing the financial statements, the Group’s and
the Company's opening statements of financial position was prepared as at 1 January 2017, the Group’s and the
Company's date of transition to MFRS. This note explains the principal adjustments made by the Group and the
Company in restating its FRS financial statements, including the statements of financial position as at 1 January
2017 and the financial statements for the year ended 31 December 2017.
174
(a) Reconciliation of equity as at 1 January 2017 (date of transition to MFRS)
Group
Remeasure- MFRS as at
FRS ments 1 January
2017
Assets
Non-Current Assets
Biological assets (i) 448,731 (448,731) -
Property, plant and equipment 970,642 448,731 1,419,373
Land use rights 36,192 - 36,192
Associated company 50 - 50
Joint venture -* - -*
Derivatives - - -
Deferred tax assets 1,732 - 1,732
1,457,347 - 1,457,347
Current Assets
Biological assets (i) - 28,262 28,262
Inventories 189,958 - 189,958
Trade and other receivables 293,239 - 293,239
Prepayments 2,475 - 2,475
Tax recoverable 6,247 - 6,247
Derivatives 3,456 - 3,456
Cash and bank balances 272,292 - 272,292
Short term funds 418,622 - 418,622
1,186,289 28,262 1,214,551
Total Assets 2,643,636 28,262 2,671,898
Share capital 208,134 - 208,134
Treasury shares (8,635) - (8,635)
Reserves (ii) 2,162,723 21,170 2,183,893
2,362,222 21,170 2,383,392
Non-controlling interests 5,344 244 5,588
Total Equity 2,367,566 21,414 2,388,980
Deferred tax liabilities (i) 116,916 6,848 123,764
Retirement benefit obligations 13,254 - 13,254
Derivatives 178 - 178
130,348 6,848 137,196
Current Liabilities
Trade and other payables 114,403 - 114,403
Tax payable 16,152 - 16,152
Retirement benefit obligations 749 - 749
Bank borrowings 106 - 106
145,722 - 145,722
Total Equity and Liabilities 2,643,636 28,262 2,671,898
175
Company
FRS ments 1 January
2017
Assets
Non-Current Assets
Subsidiary companies 404,826 - 404,826
Joint venture -* - -*
1,501,298 - 1,501,298
Current Assets
Inventories 42,821 - 42,821
Prepayments 86 - 86
637,410 21,743 659,153
Total Assets 2,138,708 21,743 2,160,451
Share capital 208,134 - 208,134
Reserves 1,762,613 16,525 1,779,138
Total Equity 1,962,112 16,525 1,978,637
116,669 5,218 121,887
Current Liabilities
Tax payable 12,703 - 12,703
59,927 - 59,927
176
(b) Reconciliation of equity as at 31 December 2017
Group
FRS ments 31 December
2017
Assets
Non-Current Assets
Property, plant and equipment 1,029,474 444,585 1,474,059
Land use rights 34,115 - 34,115
Joint venture 29,899 - 29,899
Deferred tax assets 3,524 - 3,524
1,545,064 - 1,545,064
Current Assets
Inventories 156,833 - 156,833
Prepayments 3,211 - 3,211
Tax recoverable 3,848 - 3,848
1,273,309 31,388 1,304,697
Total Assets 2,818,373 31,388 2,849,761
Share capital 390,054 - 390,054
Reserves (ii) 2,118,878 23,628 2,142,506
2,500,297 23,628 2,523,925
Non-controlling interests 6,714 179 6,893
Total Equity 2,507,011 23,807 2,530,818
147,540 7,581 155,121
Current Liabilities
Tax payable 13,333 - 13,333
Bank borrowings 111 - 111
163,822 - 163,822
177
Company
2017
Assets
Non-Current Assets
Subsidiary companies 379,865 - 379,865
Joint venture 30,000 - 30,000
1,612,347 - 1,612,347
Current Assets
Inventories 33,232 - 33,232
Prepayments 399 - 399
619,596 26,614 646,210
Total Assets 2,231,943 26,614 2,258,557
Share capital 390,054 - 390,054
Reserves 1,627,516 20,227 1,647,743
Total Equity 2,008,935 20,227 2,029,162
128,623 6,387 135,010
Current Liabilities
Tax payable 7,276 - 7,276
94,385 - 94,385
178
(c) Reconciliation of profit or loss and comprehensive income for the year ended 31 December 2017
Group
2017
Revenue 1,474,323 - 1,474,323

Other income (i) 37,577 3,126 40,703
1,511,900 3,126 1,515,026

Changes in finished goods (17,904) - (17,904)
Raw materials and
consumables used (628,238) - (628,238)
Amortisation of biological assets (29,692) 29,692 -
plant and equipment (54,422) (29,692) (84,114)
Amortisation of land use rights (688) - (688)
Staff costs (166,286) - (166,286)
Other expenses (139,815) - (139,815)
Profit from operations 474,855 3,126 477,981

Finance costs (22) - (22)
Investment and interest income 26,112 - 26,112
Share of results of joint venture (101) - (101)
Profit before taxation 500,844 3,126 503,970

Taxation (108,555) (733) (109,288)
Net profit for the year 392,289 2,393 394,682
Other comprehensive income:

Foreign currency translation,
representing net other
comprehensive income for the
year, to be reclassified to profit and
loss in subsequent period, net of tax (13,884) - (13,884)
Total comprehensive income for the year 378,405 2,393 380,798
179
Company
2017
Revenue 591,914 - 591,914

Other income (i) 9,317 4,871 14,188
601,231 4,871 606,102

Changes in finished goods (9,199) - (9,199)
Raw materials and
consumables used (5,015) - (5,015)
Amortisation of biological assets (21,539) 21,539 -
plant and equipment (33,578) (21,539) (55,117)
Staff costs (120,652) - (120,652)
Other expenses (73,387) - (73,387)
Profit from operations 337,861 4,871 342,732

Finance costs (19) - (19)
Investment and interest income 20,047 - 20,047
Profit before taxation 357,889 4,871 362,760

Taxation (72,106) (1,169) (73,275)
Net profit for the year 285,783 3,702 289,485
Other comprehensive income - - -
Total comprehensive income for the year 285,783 3,702 289,485
180
Notes to the reconciliation of equity as at 1 January 2017 (date of transition to MFRS) and 31 December 2017 and
profit or loss and comprehensive income for year ended 31 December 2017.
The significant accounting policies adopted in preparing the financial statement are consistent with those of the
audited financial statement for the year ended 31 December 2017, except as discussed below:
(i) Bearer plants and biological assets
Prior to the adoption of the Amendments to MFRS 141, all the new replanting and pre-cropping expenditure
incurred from land clearing to the point of maturity were capitalised as biological assets and amortised at
maturity of the useful economic lives of the crops.
Upon the adoption of the Amendments to MFRS 141, the Group and Company are required to measure
biological assets separately from bearer plants. New replanting and pre-cropping expenditure are classified
as bearer plants and would be accounted for the same as property, plant and equipment under MFRS 116,
whereas the produce growing on the bearer plants falls within the scope of MFRS 141 Biological Assets and
valued at fair value. The resulting adjustments were recognised against retained earnings.
The impact arising from the change is summarised as follows:
Group Company
31 December 1 January 31 December 1 January
2017 2017 2017 2017
RM’000 RM’000 RM’000 RM’000
Current Asset
Biological assets 31,388 28,262 26,614 21,743
Non-Current Liability
Deferred tax 7,581 6,848 6,387 5,218
Statement of comprehensive income

Fair value gain Not Not
in biological assets 2,393 applicable 3,702 applicable
(ii) Cumulative translation differences
The cumulative translation differences for all foreign operations are deemed to be zero at the date of transition
to MFRS, 1 January 2017. The entire balance of RM9,188,000 for the Group in the exchange translation
reserve at the date of transition has been transferred to retained profits.
181
2.3 Standards issued but not yet effective
The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group's
and the Company's financial statements are disclosed below. The Group and the Company intend to adopt these
standards if applicable, when they become effective.
Effective for annual periods

beginning on or after
o MFRS 9 Prepayment Features with Negative Compensation

(Amendments to MFRS 9) 1 January 2019
o MFRS 16 Leases 1 January 2019
o MFRS 128 Long-term lnterests in Associates and Joint Venture
o Annual Improvements to MFRS Standards 2015 - 2017 cycle 1 January 2019
o MFRS 119 Plan Amendment, Curtailment or Settlement
o IC Interpretation 22 Foreign Currency Transactions and
Advance Consideration 1 January 2019
o MFRS 17 Insurance Contracts 1 January 2021
o Amendments to MFRS 10 and MFRS 128: Sale or Contribution
of Assets between an Investor and its Associate or Joint Venture Deferred
The directors expect that the adoption of the above standards and interpretations will not have material impact on
the financial statements in the period of initial application except as discussed below:
MFRS 16 Leases
MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease,
IC Interpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation
and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar
to the accounting for finance leases under MFRS 117.
At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset
representing the right to use the underlying asset during the lease term. The right-of-use asset is initially measured
at cost and subsequently measured at cost (subject to certain exceptions), less accumulated depreciation and
impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at
present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for
interest and lease payments, as well as the impact of lease modifications.
Classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as
operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will be
presented as financing cash flows) and an interest portion (which will be presented as operating cash flows).
Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue
to classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of
leases: operating and finance leases. MFRS 16 also requires lessees and lessors to make more extensive disclosures
than under MFRS 117.
MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not
before an entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a
modified retrospective approach.
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2.4 Summary Of Significant Accounting Policies

(a) Subsidiary Companies And Basis Of Consolidation
(i) Subsidiaries
Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so
as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group has such power over another
entity.
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is included in profit or loss.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries
as at 31 December 2018. Control is achieved when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if and only if the Group has:
(a) Power over the investee (i.e. existing rights that give it the current ability to
direct the relevant activities of the investee),
(b) Exposure, or rights, to variable returns from its involvement with the investee,and
(c) The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
(a) The contractual arrangement with the other vote holders of the investee,
(b) Rights arising from other contractual arrangements, and
(c) The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
statements of financial position and statements of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of
the Group are eliminated in full on consolidation.
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A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
(a) Derecognises the assets (including goodwill) and liabilities of the subsidiary,
(b) Derecognises the carrying amount of any non-controlling interests,
(c) Derecognises the cumulative translation differences recorded in equity,
(d) Recognises the fair value of the consideration received,
(e) Recognises the fair value of any investment retained, and
(f) Recognises any surplus or deficit in profit or loss.
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
(iii) Transactions with non-controlling interests
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by
the Group and are presented separately in profit or loss of the Group and within equity in the consolidated
statements of financial position, separately from parent shareholders’equity. Transactions with non-controlling
interests are accounted for using the entity concept method, whereby, transactions with non-controlling
interests are accounted for as transactions with owners. On acquisition of non-controlling interests, the
difference between the consideration and book value of the share of the net assets acquired is recognised
directly in equity. Gain or loss on disposal to non-controlling interests is recognised directly in equity.
(b) Associated Companies
Associated companies are entities in which the Group has significant influence and that is neither a subsidiary
company nor an interest in a joint venture. Significant influence is the power to participate in the financial and
operating policy decisions of the investee but not in control or joint control over those policies.
Investments in associated companies are accounted for in the consolidated financial statements using the
equity method of accounting. Under the equity method, the investment in associated company is carried in the
consolidated statement of financial position at cost adjusted for post-acquisition changes in the Group’s share of
net assets of the associated company.
The Group’s share of the net profit or loss of the associated company is recognised in the consolidated profit
or loss. Where there has been a change recognised directly in the equity of the associated company, the Group
recognises its share of such changes. In applying the equity method, unrealised gains and losses in transactions
between the Group and the associated company are eliminated to the extent of the Group’s interest in the
associated company. After application of the equity method, the Group determines whether it is necessary to
recognise an impairment loss on its investment in its associated company. The associated company is equity
accounted for from the date the Group obtains significant influence until the date the Group ceases to have
significant influence over the associated company.
Goodwill relating to an associated company is included in the carrying amount of the investment and is not
amortised. Any excess of the Group’s share of the net fair value of the associated company’s identifiable assets,
liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of
the investment and is instead included as income in the determination of the Group’s share of the associated
company’s profit or loss in the period in which the investment is acquired.
184
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated
company, including any long-term interest that, in substance, form part of the Group’s net investment in the
associated company, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the associated company.
The most recent available audited financial statements of the associated companies are used by the Group in
applying the equity method. Where the dates of the audited financial statements used are not coterminous with
those of the Group, the share of results is arrived at from the last audited financial statements available and
management financial statements to the end of the accounting period. Uniform accounting policies are adopted
for like transactions and events in similar circumstances.
In the Company’s separate financial statements, investments in associated companies are stated at cost less
impairment losses. On disposal of such investments, the difference between net disposal proceeds and their
carrying amounts is included in profit or loss.
(c) Joint Venture
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that
is subject to joint control, and a jointly controlled entity is a joint venture that involves an unincorporated entity
or the establishment of a separate entity in which each venturer has an interest.
Investment in joint venture is accounted for in the consolidated financial statements using the equity method of
accounting as described in Note 2.4(b). Adjustments are made in the Group’s consolidated financial statements
to eliminate the Group’s share of intragroup balances, income and expenses and unrealised gains and losses on
transactions between the Group and its joint venture.
The financial statements of the joint venture are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies into line with those of the Group.
In the Company’s separate financial statements, investment in joint venture is stated at cost less impairment
loss. On disposal of such investment, the difference between net disposal proceeds and their carrying amount is
included in profit or loss.
(d) (i) Property, Plant and Equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. 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 are
charged to the income statement during the financial period in which they are incurred.
Subsequent to recognition, property, plant and equipment except for freehold land and capital work-in-
progress are stated at cost less accumulated depreciation and any accumulated impairment losses. Freehold
land and capital work-in-progress are stated at cost less any accumulated impairment losses.
185
The cost of freehold land initially acquired is allocated between the land, buildings and biological assets
elements in proportion to the relative fair values for the interests in the land element, buildings element and
biological assets element. Freehold land has an unlimited useful life and therefore is not depreciated. Long
term leasehold land is depreciated over the period of the lease which range from 50 years to 99 years. Capital
work-in-progress are also not depreciated as these assets are not available for use. Other property, plant and
equipment are depreciated by equal annual instalments over their estimated economic lives based upon the
original cost or deemed cost on a straight line basis to write off the cost of each asset to its residual value over
the estimated useful life. The principal annual depreciation rates used are:
Buildings 2% - 5%
Bulking installations 5%
Railways over 25 years or 4%
Rolling stock over 14 years or approximately 7.14%
Plant and machinery 5% - 20%
Furniture and office equipment 10% - 20%
Motor vehicles, tractors and implements 12.5% - 25%
Aircrafts 5%
Spare parts which are held for use in the production or supply of goods or services and are expected to be
used during more than one period, and thus are classified under property, plant and equipment. The cost will
be charged out to income statement when the spare parts are utilised.
The residual value, useful life and depreciation method are reviewed at each financial year end to ensure
that the amount, method and period of depreciation are consistent with previous estimates and the expected
pattern of consumption of the future economic benefits embodied in the items of property, plant and
equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and
the net carrying amount is recognised in the profit or loss.
Bearer plants comprise pre-cropping expenditure incurred from land clearing to the point of maturity. Such
expenditure is capitalised and is amortised at maturity of the crop at the following rates which are deemed as
the useful economic lives of the crop:
Pre-cropping expenditure - oil palm over 20 years or 5%

Pre-cropping expenditure - coconut palm over 30 years or approximately 3.33%
(ii) Land Use Rights
Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at
cost less accumulated amortisation and accumulated impairment losses. The land use rights are amortised
over their lease terms.
(e) Biological assets
Biological assets comprised produce growing on bearer plants. Biological assets are classified as current assets
for bearer plants that are expected to be harvested and sold or used for production on a date not more than 4
weeks after the reporting date.
Biological assets are measured at fair value less costs to sell. Any gains or losses arising from changes in the fair
value less costs to sell are recognised in profit or loss.
186
(f) Inventories
Agricultural produce stocks are stated at net realisable value at the reporting date.
All other inventories are valued at the lower of cost and estimated net realisable value. Cost includes the actual
cost of materials, labour and appropriate production overheads and is determined on a weighted average basis.
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.
(g) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected
amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates
that have been enacted at the reporting date.
Deferred tax is provided for using the liability method. In principle, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the
initial recognition of an asset or liability in a transaction which is not a business combination and at the time of
the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or
the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in the income statement, 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 in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred tax is included in the resulting
goodwill or negative goodwill.
(h) Foreign Currencies

(i) Functional And Presentation Currency
The individual financial statements of each entity in the Group are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated
financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional
currency.
(ii) Foreign Currency Transactions
In preparing the financial statements of the individual entities, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange
rates prevailing at the dates of the transactions. At each reporting date, monetary items denominated in
foreign currencies are translated at the rates prevailing on the reporting date. Non-monetary items carried at
fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when
the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated to the functional currency at exchange rates ruling on the transaction dates.
Exchange differences arising on the settlement of monetary items or on the translation of monetary items,
are included in profit or loss for the period except for exchange differences arising on monetary items that
form part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign
currency translation reserve within equity until the disposal of the foreign operations, at which time they are
recognised in profit or loss. Exchange differences arising on monetary items that form part of the Company’s
net investment in foreign operation are recognised in profit or loss in the Company’s separate financial
statements or the individual financial statements of the foreign operation, as appropriate.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
the profit or loss for the period except for the differences arising on the translation of non-monetary items
in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such
non-monetary items are also recognised directly in equity.
187
(iii) Foreign Operations
The results and financial position of foreign operations that have a functional currency different from the
presentation currency ("RM") of the consolidated financial statements are translated into RM as follows:
(a) Assets and liabilities for each statements of financial position presented are translated at the closing
rate prevailing at the reporting date;
(b) Income and expenses for each profit or loss are translated at average exchange rates for the year,
which approximates the exchange rates at the dates of the transactions; and
(c) All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and
liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and
translated at the closing rate at the reporting date.
The principal exchange rates used for currency ruling at the reporting date are as follows:
2018 2017
RM RM
1 United States Dollar (USD) 4.1360 4.0475
100 Indonesian Rupiah (IDR) 0.0288 0.0298
(i) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow
to the enterprise and the amount of the revenue can be measured reliably.
(i) Sale of goods
Revenue from sale of produce stocks and finished goods is recognised when the significant risk and rewards
of ownership of the produce stocks and finished goods have passed to the buyer.
(ii) Interest income
Interest is recognised on a time proportion basis that reflects the effective yield on the asset.
(iii) Dividend income
Dividend income from investment is recognised when the right to receive payment is established.
(iv) Revenue from services

Revenue from services is recognised when services are rendered.
(v) Rental income

Rental income is recognised on a time proportion basis.
188
(j) Employee Benefits

(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which
the associated services are rendered by employees of the Group. Short term accumulating compensated
absences such as paid annual leave are recognised when services are rendered by employees that increase
their entitlement to future compensated absences, and short term non-accumulating compensated absences
such as sick leave are recognised when the absences occur.
(ii) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities or funds and will have no legal or constructive obligation to pay further
contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years. Such contributions are recognised as an expense in the
income statement as incurred. As required by law, companies in Malaysia make such contributions to the
Employees Provident Fund (“EPF”). In addition, the Group also contributes to a defined contribution fund
set up for certain eligible employees of the Group.
(iii) Defined benefit plans
The Company and certain subsidiary companies provide for retirement benefit for their eligible employees
on unfunded defined benefit plans in accordance with the terms of employment and practices. The Group’s
obligations under these plans are determined internally using the Projected Unit Credit Method based on
certain actuarial assumptions where the amount of benefits that employees have earned in return for their
services rendered is estimated.
Full provision is recognised for retirement benefit payable to all eligible employees. Should an employee leave
before attaining the retirement age, the provision made for the employee is written back. Actuarial gains or
losses are recognised as income or expense immediately through OCI. Past service costs are recognised
immediately.
(k) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, including
land clearing and planting up to the time of maturity, which are assets that necessarily take a substantial period
of time to get ready for their intended use are added to the cost of those assets until such time as the assets are
substantially ready for their intended use. Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
All other borrowing costs are recognised in the profit or loss in the period in which they are incurred.
(l) Impairment Of Non-Financial Assets
At each reporting date, the Group reviews the carrying amounts of its assets, other than inventories, assets
arising from employee benefits and financial assets, to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, impairment is measured by comparing
the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of an asset’s
fair value less cost to sell and value in use, which is measured by reference to discounted future cash flows.
Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit to
which the asset belongs and prorated to the asset by reference to the cost of the asset to the cost of the cash-
generating unit.
189
An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued
amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available
previously recognised revaluation surplus for the same asset.
Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment
losses recognised for the asset no longer exist or have decreased. The reversal is recognised to the extent of the
carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no
impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the
asset is carried at revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to
revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously
recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in
the income statement.
(m) Financial Assets
Financial assets are recognised in the statements of financial position when, and only when, the Group or the
Company becomes a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the
categories include available for sale investments and loans and receivables.
(i) Financial assets at amortised cost

The Group and the Company measure financial assets at amortised cost if both of the following conditions
are met:
o The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; and
o The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and
are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
(ii) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily
required to be measured at fair value. Financial assets are classified as held for trading if they are acquired
for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded
derivatives, are also classified as held for trading unless they are designated as effective hedging instruments.
Financial assets with cash flows that are not solely payments of principal and interest are classified and
measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria
for debt instruments to be classified at amortised cost or at fair value through OCI, as described above,
debt instruments may be designated at fair value through profit or loss on initial recognition if doing so
eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair
value with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments which the Group and the Company had not irrevocably elected
to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
190
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of
the consideration received and any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the period generally established by regulation or convention in the marketplace concerned. All regular way
purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the
Group and the Company commit to purchase or sell the asset.
(n) Impairment Of Financial Assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired.
The Group and the Company recognise an allowance for expected credit losses (ECLs) for all debt instruments
not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group and the Company expect to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables, other receivables and inter-company balances, the Group and the Company apply a
simplified approach in calculating ECLs. Therefore, the Group and the Company do not track changes in credit
risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group and the
Company have established a provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.
(o) Cash And Cash Equivalent

Cash and cash equivalents represent cash on hand and at banks and short term deposits with a maturity of three
months or less that are readily convertible to known amount of cash which are subject to an insignificant risk of
changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.
(p) Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and
the definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when,
and only when, the Group or the Company becomes a party to the contractual provisions of the financial
instrument. Financial liabilities are classified as either payables, interest-bearing borrowings or other financial
liabilities.
(i) Payables
Payables are recognised initially at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest method.
(ii) Interest-bearing borrowings
Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction
costs.
(iii) Other financial liabilities
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
191
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts
is recognised in profit or loss.
(q) Equity Instruments
Ordinary shares are classified as equity. The transaction costs of an equity transaction, other than in the context
of a business combination, are accounted for as a deduction from equity, net of tax. Equity transaction costs
comprise only those incremental external costs directly attributable to the equity transaction which would
otherwise have been avoided. Costs of issuing equity securities in connection with a business combination are
included in the cost of acquisition. Dividends on ordinary shares are recognised in equity in the period in which
they are declared.
(r) Financial Assets Or Financial Liabilities At Fair Value Through Profit Or Loss
Financial assets or financial liabilities at fair value through profit or loss include financial assets and liabilities
held for trading and short term funds.
Financial assets or financial liabilities held for trading are derivatives. The Group uses derivatives such as forward
foreign exchange contracts and commodity futures contracts to hedge the Group’s exposure to foreign currency
and commodity price fluctuations.
Such derivatives are measured at fair value at each reporting date. The fair values of derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any
gains or losses arising from changes in fair value on derivatives are recognised in profit or loss.
The fair values of the forward foreign exchange contracts have been calculated using the rates quoted by the
Group’s bankers to terminate the contracts at the reporting date and the fair value of the commodity futures
contracts are calculated using future market prices quoted by the Group’s broker as at reporting date.
Short term funds are investments in income trust funds carried in the statements of financial position at fair
value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance
income (positive changes in fair value) in the statements of profit or loss.
(s) Research And Development Costs

All general research and development costs are expensed as incurred.
(t) Operating Leases - The Group As Lessee

Operating lease payments are recognised as an expense on a straight line basis over the term of the relevant
lease.
(u) Government grants

Grants that compensate the Group for replanting expenses incurred are credited against the pre-cropping
expenditure and are amortised over the economic life of the crop.
Grants received as incentives by the Group are recognised as income in the periods the incentives are receivable
where there is reasonable assurance that the grant will be received.
192
(v) Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as commodity futures contracts, to hedge its commodity
price risks. Such derivative financial instruments are initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship
to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking
the hedge.
Beginning 1 October 2018, the documentation includes identification of the hedging instrument, the hedged
item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets
the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the
hedge ratio is determined).
A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
o There is ‘an economic relationship’ between the hedged item and the hedging instrument.
o The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship.
o The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the Group actually hedges and the quantity of the hedging instrument that the Group actually
uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
Cash flow hedge
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge
reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash
flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item.
The Group uses commodity futures contracts for its exposure to volatility in the commodity prices. The ineffective
portion relating to commodity contracts is recognised in other operating income or expenses. Refer to Note 29
(g) for more details.
The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged
transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount
accumulated in equity is removed from the separate component of equity and included in the initial cost or
other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be
recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-financial
asset or non-financial liability subsequently becomes a firm commitment for which fair value hedge accounting
is applied.
If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain
in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be
immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged
cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of
the underlying transaction as described above.
193
2.5 Significant Accounting Estimate
The key assumptions concerning the future and other key source of estimation uncertainty at the reporting date,
that have significant risk of causing material adjustment to the carrying amount of assets and liabilities within the
next financial year are discussed below:
(i) Impairment of property, plant and equipment
Assets are tested for impairment when indications of potential impairment exist. Indicators of impairment
which could trigger an impairment review include evidence of obsolescence or physical damage, a significant
fall in market values, significant underperformance relative to historical or projected future operating results,
significant changes in the use of assets or the strategy of the business, and significant adverse industry or
economic changes. Recoverable amounts of assets are based on management’s estimates and assumptions
of the net realisable value, cash flows arising from the future operating performance and revenue generating
capacity of the assets and cash operating units, and future market conditions. Changes in circumstances may
lead to changes in estimates and assumptions, and result in changes to the recoverable amounts of assets and
impairment losses needed.
(ii) Bearer plants
Bearer plants comprise pre-cropping expenditure incurred from land clearing to the point of maturity. Such
expenditure is capitalised and is amortised at maturity of the crop over the useful economic lives of the crop.
Management estimates the useful economic lives of the Group's and the Company's oil palms and coconut
palms to be 20 years and 30 years respectively.
(iii) Biological Assets
The biological assets of the Group comprise of fresh fruit bunch ("FFB") and coconut prior to harvest. The
valuation model to be adopted by the Group considers the present value of the net cash flows expected to be
generated from the sale of FFB and coconut.
To arrive at the fair value of FFB, the management considered the oil content of the unripe FFB and derived
the assumption that the net cash flow to be generated from FFB prior to more than 4 weeks to harvest to be
negligible, therefore quantity of unripe FFB on bearer plants of up to 4 weeks prior to harvest was used for
valuation purpose. The value of the unripe FFB was estimated to be approximately 49% for FFB that are 3 to 4
weeks prior to harvest and 83% for FFB that are 1 to 2 weeks prior to harvest, based on actual oil extraction rate
and kernel extraction rate of the unripe FFB from tests. Costs to sell, which include harvesting and transport
cost, are deducted in arriving at the net cash flow to be generated.
To arrive at the fair value of coconuts, the management derived the assumption that the net cash flow to be
generated from coconuts prior to more than 4 weeks to harvest to be negligible, therefore quantity of unripe
coconuts on bearer plants of up to 4 weeks prior to harvest was used for valuation purpose.
194
3. Group Structure
The subsidiary companies are as follows:
Company Country of Percentage Percentage of Activities

incorporation of equity equity held by (see below)
and principal held by the non-controlling
place of Group* interest*
business
2018 / 2017 2018 / 2017
% %
Unitata Berhad Malaysia 100 - (a)

Butterworth Bulking Installation Sdn. Bhd. Malaysia 100 - (b)
Bernam Advisory Services Sdn. Bhd. Malaysia 100 - (c)
Berta Services Sdn. Bhd. Malaysia 100 - (e)
PT. Surya Sawit Sejati ("PT SSS1") Indonesia 95 5 (d)
PT. Sawit Seberang Seberang ("PT SSS2") Indonesia 93 7 Dormant
Bernam Agencies Sdn. Bhd. Malaysia 100 - (e)
United International Enterprises (M) Sdn. Bhd. Malaysia 100 - Dormant
* equals to the proportion of voting rights held
The subsidiary companies are primarily engaged in the following activities:
(a) Refining of palm oil, manufacturing edible oils, fats, cocoa butter substitute
and trading in crude palm oil and palm kernel products.
(b) Handling and storage of vegetable oil and molasses.
(c) Trading, marketing and investment holding.
(d) Business of oil palm cultivation and processing in Indonesia.
(e) Investment holding.
195
The joint venture is as follows:
Company Country of incorporation Percentage of equity Principal

and principal place of held by the Group* Activities
business 2018 2017
% %
Refining of palm oil and

Unifuji Sdn. Bhd. Malaysia 50 50
trading of palm oil products
The joint venture is accounted for using the equity method.
The associated company is as follows:
Company Country of incorporation Percentage of equity Principal

and principal place of held by the Group* Activity
business 2018 2017
% %
Bernam Bakery Sdn. Bhd. Malaysia 30 30 Dormant
The associated company is accounted for using the equity method.
The financial statements of the joint venture and the associated company are coterminous with those of the Group.
All subsidiaries and associated company are audited by Ernst & Young, Malaysia other than PT SSS1 and PT SSS2, which
are audited by a member firm of Ernst & Young Global in Indonesia.
4. Revenue
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Revenue from contracts with customers consists
of the following and excludes, in respect of the
Group, intragroup transactions:
Sales proceeds of produce stocks 402,296 414,273 575,318 591,914
Sales proceeds of finished goods 901,629 1,058,592 - -
Rendering of services 1,666 1,458 - -
1,305,591 1,474,323 575,318 591,914

Disaggregation of revenue from
contracts with customers
Upstream (Plantations)
- Malaysia 246,187 224,514 575,318 591,914
- Indonesia 156,109 189,759 - -
Downstream (Refinery)
- Malaysia 901,629 1,058,592 - -
Other operations 1,666 1,458 - -
1,305,591 1,474,323 575,318 591,914
The timing of revenue recognition is at a point in time.
196
5. Profit From Operations

Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Profit from operations is arrived at, after charging:

Directors’ remuneration
- fees 1,117 786 1,066 735
- emoluments 6,392 5,069 6,261 4,946
- others 187 154 107 82
Auditors’ remuneration
- statutory audit: current year 446 446 310 310
- non-audit service 8 8 8 8
- statutory audit fee received by a
member firm of EY Global 167 179 - -
Write-down of inventories 10,602 - - -
Impairment of property, plant and equipment 4,243 - - -
Loss on disposal of property, plant and equipment 2,699 432 2,699 432
Fair value loss in biological assets 2,707 1,745 1,704 -
Unrealised foreign exchange loss 3,023 12,203 - -
Realised foreign exchange loss 1,281 2,135 - -
Impairment on plasma debt 221 - - -
Rental of premises 214 218 - -
Rental of equipment 1,624 1,683 52 44
Profit from operations is arrived at, after crediting:

Reversal of impairment on plasma debt - 276 - -
Rental income 95 89 95 89
Profit on disposal of property, plant
and equipment 253 41 - -
Fair value gain in biological assets - 4,871 - 4,871
Reversal on impairment on investment in subsidiary - - 675 39
Unrealised foreign exchange gain 1,577 14,030 - -
Realised foreign exchange gain 8,156 10,783 - -
197
Staff costs of the Group and of the Company incurred during the financial year consist of the following:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Wages and salaries 147,865 138,096 111,049 100,676

Social security cost 2,109 1,736 387 375
Retirement benefit costs
- defined contribution plans 6,935 6,503 5,932 5,499
- defined benefit plans (Note 21) 2,611 1,323 484 (981)
Other staff related expenses 17,237 16,782 14,099 13,237
176,757 164,440 131,951 118,806
Included in staff costs of the Group and of the Company are executive directors’ emoluments amounting to RM6,392,000
and RM6,261,000 respectively (2017: RM5,069,000 and RM4,946,000 respectively).
In addition to contribution to the Employees Provident Fund, the Group also contributes to a defined contribution fund
set up for certain eligible employees of the Group.
6. Finance Costs
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Finance costs consist of interest expenses on:

- bank overdraft/bankers acceptances 25 22 20 19
7. Investment And Interest Income

Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Dividend income from a subsidiary company - - 10,500 3,000

Interest income from deposits with licensed banks 29,792 26,032 15,374 15,605
Interest income from loan granted to subsidiary - - 2 1,362
Interest income from advances to joint venture 447 80 146 80
30,239 26,112 26,022 20,047
198
8. Taxation
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Current income tax:

Income tax 114,091 93,584 74,880 57,926
(Over)/under provision in prior year (2,164) 1,366 (969) 988
111,927 94,950 73,911 58,914
Deferred tax (Note 20):

Relating to origination and reversal
of temporary difference 5,355 13,919 10,267 13,952
(Over)/under provision in prior year (510) 419 (510) 409
4,845 14,338 9,757 14,361
Total income tax expense 116,772 109,288 83,668 73,275
Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2017: 24%) of the estimated assessable
profit for the year. The deferred tax computation is based on this rate.
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of the Company is as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Profit before taxation 490,872 503,970 357,240 362,760
Taxation at Malaysian statutory tax

rate of 24% (2017: 24%) 117,809 120,953 85,738 87,062
Effect of different tax rates in other countries 394 584 - -
Income not subject to tax (6,574) (5,789) (4,870) (2,284)
Expenses not deductible for tax purposes 7,937 6,952 4,399 2,297
Utilisation of double deduction for research
and reinvestment allowance (120) (15,197) (120) (15,197)
(Over)/under provision of deferred tax in prior year (510) 419 (510) 409
(Over)/under provision of income tax in prior year (2,164) 1,366 (969) 988
Tax expense for the year 116,772 109,288 83,668 73,275
199
9. Earnings per share
The calculation of earnings per share is based on net profit for the year attributable to equity holders of the Company
of RM372,417,000 (2017: RM392,980,000) divided by the weighted number of ordinary shares of 207,792,492 (2017:
207,792,492) in issue during the year after deducting treasury shares of 341,774 (2017: 341,774).
Group
2018 2017
sen sen
Basic earnings per share 179 189
The Group has no potential ordinary shares in issue as at reporting date and therefore, diluted earnings per share has
not been presented.
10. (a) Property, Plant And Equipment
Group
Long term Capital

Freehold leasehold Bearer Plant and work-in- Spare
land land plants Buildings machinery progress* Parts Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2018 204,413 385,314 895,134 305,528 793,744 12,820 1,171 2,598,124
Additions - - 39,610 13,396 47,902 19,831 - 120,739
Transfer to plasma at cost - - (267) - - - - (267)
Disposals - - (31) (1,363) (39,325) - - (40,719)
Reclassifications - - - 5,269 9,356 (14,625) - -
Exchange differences - - (5,606) (2,260) (3,190) (41) (10) (11,107)
Net movement for the year - - - - - - 205 205
At 31 December 2018 204,413 385,314 928,840 320,570 808,487 17,985 1,366 2,666,975
Accumulated depreciation and

impairment losses
At 1 January 2018
Accumulated depreciation - 66,761 450,549 169,667 437,088 - - 1,124,065
Accumulated impairment losses - - - - - - - -
Depreciation for the year - 4,118 30,183 9,672 40,888 - - 84,861

Impairment - - - - 4,243 - - 4,243
Disposals - - - (750) (34,476) - - (35,226)
Exchange differences - - (1,744) (503) (1,742) - - (3,989)
At 31 December 2018 - 70,879 478,988 178,086 446,001 - - 1,173,954
Net book value

At 31 December 2018 204,413 314,435 449,852 142,484 362,486 17,985 1,366 1,493,021
200
Group
Long term Capital

land land plants Buildings machinery progress* Parts Total
Cost
At 1 January 2017 204,413 385,314 875,226 295,476 640,289 71,719 1,397 2,473,834
Additions - - 39,815 14,971 111,966 8,830 - 175,582
Transfer to plasma at cost - - (1,912) - - - - (1,912)
Disposals - - - (108) (2,138) (11,792) - (14,038)
Reclassifications - - - 2,105 53,682 (55,787) - -
Exchange differences - - (17,995) (6,916) (10,055) (150) (30) (35,146)
Net movement for the year - - - - - - (196) (196)
At 31 December 2017 204,413 385,314 895,134 305,528 793,744 12,820 1,171 2,598,124
Accumulated depreciation
At 1 January 2017 - 62,643 426,495 162,042 403,281 - - 1,054,461
Disposals - - - (84) (1,458) - - (1,542)
Exchange differences - - (5,638) (1,628) (5,702) - - (12,968)
At 31 December 2017 - 66,761 450,549 169,667 437,088 - - 1,124,065
Net book value

At 31 December 2017 204,413 318,553 444,585 135,861 356,656 12,820 1,171 1,474,059
Under Indonesian laws, the plantation owners are obliged to assist the local communities by assisting them to develop
plasma smallholdings. The area of plasma required is 20% of the planted area and this is one of the conditions which
must be fulfilled by all plantation owners before the issuance of HGU (lease certificates) of the estate lands by the
authorities. The Group is in the process of complying with this condition. The transfer cost is recoverable from the
sales of the crops to our mill.
* Capital work-in-progress of the Group mainly consists of construction of plants and buildings at the following
locations:
2018 2017
RM’000 RM’000
In the estates of the Company in Peninsular Malaysia 13,140 7,472
In Unitata Berhad 3,757 4,207
In PT SSS1, Central Kalimantan, Indonesia 1,088 1,141
17,985 12,820
201
Company
Long term Capital

land land plants Buildings machinery progress parts Total
Cost
At 1 January 2018 203,848 385,314 749,429 204,599 527,889 7,472 262 2,078,813
Additions - - 37,449 10,815 39,738 5,668 - 93,670
Disposals - - - (1,338) (37,777) - - (39,115)
Net movement for the year - - - - - - 137 137
At 31 December 2018 203,848 385,314 786,878 214,076 529,850 13,140 399 2,133,505
At 1 January 2018 - 66,761 400,602 140,228 268,790 - - 876,381
Disposals - - - (733) (32,937) - - (33,670)
At 31 December 2018 - 70,879 423,519 145,322 259,952 - - 899,672
Net book value

At 31 December 2018 203,848 314,435 363,359 68,754 269,898 13,140 399 1,233,833
Cost
At 1 January 2017 203,848 385,314 712,637 191,141 368,949 56,654 335 1,918,878
Additions - - 36,792 12,590 107,181 5,314 - 161,877
Disposals - - - (108) (1,761) - - (1,869)
Reclassifications - - - 976 53,520 (54,496) - -
Net movement for the year - - - - - - (73) (73)
At 31 December 2017 203,848 385,314 749,429 204,599 527,889 7,472 262 2,078,813
At 1 January 2017 - 62,643 379,063 135,142 245,608 - - 822,456
Disposals - - - (84) (1,108) - - (1,192)
At 31 December 2017 - 66,761 400,602 140,228 268,790 - - 876,381
Net book value

At 31 December 2017 203,848 318,553 348,827 64,371 259,099 7,472 262 1,202,432
202
10. (b) Land Use Rights

Group
2018 2017
RM’000 RM’000
At 1 January 34,115 36,192

Additions 5,901 1,170
Amortisation for the year (1,091) (688)
Exchange differences (820) (2,559)
At 31 December 38,105 34,115
The additions during the year includes the payment of premium for obtaining the HGU (lease certificates) of the
estate lands from the authorities.
11. Biological assets

Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Carrying amount at 1 January 31,388 28,262 26,614 21,743

Fair value changes (2,707) 3,126 (1,704) 4,871
Exchange differences (172) - - -
Net book value at 31 December 28,509 31,388 24,910 26,614
FFB production (MT) 1,008,063 957,472 785,559 753,673

Coconut production (nuts '000) 71,423 75,252 71,423 75,252
The biological assets of the Group and the Company

comprise of:
Oil palms 22,468 25,592 18,869 20,818
Coconut palms 6,041 5,796 6,041 5,796
28,509 31,388 24,910 26,614
The biological assets of the Group comprise of oil palm fresh fruit bunches ("FFB") and coconuts prior to harvest. The
valuation model to be adopted by the Group considers the present value of the net cash flows expected to be generated
from the sale of FFB and coconuts.
To arrive at the fair value of FFB, the management considered the oil content of the unripe FFB and derived the assump-
tion that the net cash flow to be generated from FFB prior to more than 4 weeks to harvest to be negligible, therefore
quantity of unripe FFB on bearer plants of up to 4 weeks prior to harvest was used for valuation purpose. The value of the
unripe FFB was estimated to be approximately 49% for FFB that are 3 to 4 weeks prior to harvest and 83% for FFB that are
1 to 2 weeks prior to harvest, based on actual oil extraction rate and kernel extraction rate of the unripe FFB from tests.
Costs to sell, which include harvesting and transport cost, are deducted in arriving at the net cash flow to be generated.
To arrive at the fair value of coconuts, the management derived the assumption that the net cash flow to be generated
from coconuts prior to more than 4 weeks to harvest to be negligible, therefore quantity of unripe coconuts on bearer
plants of up to 4 weeks prior to harvest was used for valuation purpose.
The change in fair value of the biological assets in each accounting period is recognised in profit or loss.
The Group’s and the Company’s biological assets were fair valued within Level 3 of the fair value hierarchy. Fair value
assessments have been completed consistently using the same valuation techniques.
203
The key assumptions used to determine the fair value are as follows:
2018 2017
Oil palms
Areas (Ha) 38,661 38,419
Average FFB selling price (RM/MT) 468 569
Coconut palms
Areas (Ha) 3,085 2,965
Average selling price (RM/nut) 1.05 1.06
Sensitivity Analysis
A 10% increase/decrease in the average oil palm fresh fruit bunches (FFB) selling price (RM/MT) and average selling
price of coconuts (RM/nut) would result in the following to the fair value of the biological assets:
2018 2017
RM’000 RM’000
10% increase 3,165 3,396

10% decrease (3,165) (3,396)
12. Subsidiary Companies
Investment in subsidiary companies Company
2018 2017
RM’000 RM’000
Unquoted shares at cost 44,451 44,451

Less: Accumulated impairment losses (13,711) (14,386)
30,740 30,065
Unquoted Redeemable Cumulative Convertible Preference Shares:
As at 1 January 349,800 374,800
Redemption (25,000) (25,000)
As at 31 December 324,800 349,800
Total 355,540 379,865
The Company had in the previous years subscribed to a total of 424,800,000 RCCPS issued by the following subsidiary
companies. In the current year, 25,000,000 RCCPS were redeemed by Unitata Berhad leaving a balance of 324,800,000
RCCPS as at end of the year (2017: 25,000,000 RCCPS were redeemed by Unitata Berhad).
(i) 278,813,000 issued by Bernam Advisory Services Sdn. Bhd.. These funds, in turn, were used to provide a loan to PT SSS1.
(ii) 45,987,000 issued by Berta Services Sdn. Bhd.. These funds, in turn, were used to provide a loan to PT SSS2.
(iii) 100,000,000 issued by Unitata Bhd.. The proceeds from the issue were used to settle the advances from the Company.
With the redemption of 25,000,000 RCCPS in the current year, the RCCPS have been fully redeemed.
204
The salient features of the RCCPS issued by the companies are as follows:
(a) Each RCCPS entitles the holder the right to be paid, out of such profits available for distribution, a cumulative
dividend at a rate as the issuer of the RCCPS shall decide from time to time.
(b) Each RCCPS entitles the holder the right to vote if there is any resolution for the winding up of the company,
reduction of the capital, declaration of dividend on any RCCPS or if a resolution affects the special rights and
privileges attached to the RCCPS.
(c) The RCCPS are redeemable at the option of the issuer for RM1.00 for every RCCPS held.
(d) The RCCPS are convertible at the option of the issuer into ordinary shares on the basis of one ordinary share for
every RCCPS held.
(e) Each RCCPS entitles the holder the right on winding up or other return of capital (other than the redemption of the
RCCPS) to receive, in priority of the ordinary shareholders of the company.
The non-controlling interests in respect of PT SSS1 and PT SSS2 are not material to the Group. Hence, summarised
financial information of these two subsidiaries are not presented.
13. Associated Company
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Investment in an associated company
Unquoted shares, at cost 101 101 101 101
- Share of post-acquisition losses and reserves

(see Note (i) below) (51) (51) - -
- Accumulated impairment losses - - (51) (51)
50 50 50 50
Group
2018 2017
RM’000 RM’000
Represented by:
Share of net assets 50 50
Note (i):
Share of post-acquisition losses and reserves is arrived at as follows:
Profit for the year - -

Share of accumulated losses (51) (51)
(51) (51)
205
14. Joint Venture
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 30,000 30,000 30,000 30,000

Share of post-acquisition losses and reserves (4,012) (101) - -
25,988 29,899 30,000 30,000
Analysed as:
Unquoted shares, at cost
At 1 January 30,000 -* 30,000 -*
Acquisition during the year - 30,000 - 30,000
At 31 December 30,000 30,000 30,000 30,000
Share of post-acquisition reserve:

At 1 January (101) - - -
Share of results (3,911) (101) - -
At 31 December (4,012) (101) - -
* In 2016, the Company had entered into an agreement to form a joint venture with an investment amount of RM1. The
joint venture is accounted for using the equity method.
The Group has joint control on its joint arrangement as unanimous consent is required for relevant activities from the
parties sharing control under the contractual arrangement.
The joint arrangement is structured via a separate entity and provide the Group with the rights to the net assets of the
entity under the arrangement. Therefore, the entity is classified as a joint venture of the Group.
(a) Details of the Group's joint venture is as follows:
% of ownership interest
Accounting
Principal place of business/ held by the Group
Company model
Country of incorporation 2018 2017 applied
Unifuji Sdn. Bhd. Malaysia 50 50 Equity method
This joint venture has the same reporting period as the Group. No quoted market price is available for the shares of
Unifuji Sdn. Bhd. as the Company is a private company.
Unifuji Sdn. Bhd. is private limited company incorporated and domiciled in Malaysia. The registered office and
principal place of business is located at Jendarata Estate, 36009 Teluk Intan, Perak.
The principal activities of the joint venture are that of refining palm oil and trading of palm oil products.
The joint venture is audited by Ernst & Young, Malaysia.
206
(b) Summarised financial information of Unifuji Sdn. Bhd. is set out below. The summarised information represents the
amounts in the financial statements of the joint venture and not the Group's share of those amounts.
(i) Summarised statement of financial position
2018 2017
RM’000 RM’000
Assets
Current assets 36,756 5,367
Non-current assets 172,834 86,870
Total assets 209,590 92,237
Equity and liabilities

Equity 51,976 59,798
Current liabilities 56,233 32,439
Non-current liabilities 101,381 -
Total equity and liabilities 209,590 92,237
(ii) Summarised statement of comprehensive income
2018 2017
RM’000 RM’000
Revenue 14,491 -
Loss for the year (7,822) (202)
Total comprehensive loss for the year (7,822) (202)
(iii) Reconciliation of the summarised financial information presented above to the carrying amount of the
Group's interest in the joint venture.
2018 2017
RM’000 RM’000
Net assets at 1 January 59,798 -*

Issuance of share - 60,000
Total comprehensive loss for the year (7,822) (202)
Net assets at 31 December 51,976 59,798

Interest in joint venture (%) 50 50
Carrying value of Group’s interest in joint venture 25,988 29,899
* RM 2
207
15. Inventories
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
At net realisable value:

Produce stocks 31,193 19,528 22,972 12,475
At cost:
Estate stores 27,687 27,809 17,984 20,757
Raw materials 30,057 11,656 - -
Finished goods 59,603 92,037 - -
Inventory-in-transit - 728 - -
Consumables 4,326 5,075 - -
121,673 137,305 17,984 20,757
152,866 156,833 40,956 33,232
16. Trade And Other Receivables

Group Company
2018 2017 2018 2017
Note RM’000 RM’000 RM’000 RM’000
Current
Trade receivables
Third parties 127,280 168,602 1,804 105
Due from subsidiary companies (b) - - 35,426 40,628
Due from joint venture (d) 6,432 - - -
Trade receivables, net (a) 133,712 168,602 37,230 40,733
Other receivables
Due from subsidiary companies (b) - - 13,368 1,210
Due from an associated company (c) 15 8 15 8
Due from joint venture (d) 21,440 25,152 15,581 25,152
Deposits (e) 41,744 980 41,443 83
Sundry receivables 39,937 43,365 10,533 11,270
103,136 69,505 80,940 37,723
Less: Allowance for impairment:

Sundry receivables (740) (519) - -
102,396 68,986 80,940 37,723
Total trade and other receivables 236,108 237,588 118,170 78,456

Add: Cash and bank balances (Note 17(a)) 202,389 473,711 85,209 371,285
Total loans and receivables 438,497 711,299 203,379 449,741
The average credit terms granted to the Group's customers are 10 to 75 days (2017: 10 to 75 days).
208
(a) Trade receivables
Ageing analysis of trade receivables

The ageing analysis of the Group’s and the Company’s trade receivables is as follows:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Neither past due nor impaired 133,149 168,224 37,047 40,733
1 to 30 days past due not impaired 488 193 183 -

31 to 60 days past due not impaired 30 56 - -
563 378 183 -

Allowance for expected credit losses - - - -
133,712 168,602 37,230 40,733
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with
the Group. More than 93% (2017: 98%) of the Group trade receivables arise from customers with more than three
years of business relationships with the Group.
None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the
financial year.
Receivables that are past due but not impaired
The Group has trade receivables amounting to RM563,000 (2017: RM378,000) that are past due at the reporting date
but not impaired. These receivables are unsecured.
(b) Due from subsidiary companies (trade and non-trade)
The amounts due from subsidiary companies are unsecured. The trade debt due from a subsidiary company has a
repayment term of 30 days and the overdue trade debt bears an average interest of approximately 3.95% per annum
(2017: 3.37% per annum). All other amounts are repayable on demand and non-interest bearing.
(c) Due from an associated company
The amount due from an associated company is interest free, unsecured and repayable on demand.
(d) Due from joint venture (trade and non-trade)
The amount due from joint venture is unsecured. The trade debt due from joint venture has a repayment term of 30
days and the overdue trade debt bears an average interest of approximately 3.95% per annum (2017: Nil as there
were no trade debts). All other amounts are repayable on demand and bear an average interest of approximately
3.95% per annum.
(e) Deposits
Included in deposits of the Group is RM261,000 (2017: RM836,000) being deposit placed with a broker for Bursa
Malaysia Derivatives Bhd. for crude palm oil futures and RM41,357,000 (2017: Nil) being deposit placed for the
purchase of land as disclosed in Note 31.
209
17. (a) Cash And Bank Balances

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Cash at banks and on hand 56,660 30,282 2,490 1,625

Deposits with licensed banks 145,729 443,429 82,719 369,660
Cash and bank balances (Note 16) 202,389 473,711 85,209 371,285
The weighted average interest rates during the financial year as at 31 December 2018 were as follows:
Weighted average
interest rates
2018 2017
% %
Deposits with licensed banks 3.82 3.94
(b) Short Term Funds

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Short term funds 713,411 377,874 337,652 136,224
Short term funds are investments in income trust funds in Malaysia. The trust funds invest in highly liquid assets
which are readily convertible to known amount of cash with insignificant changes in value.
The weighted average interest rates during the financial year as at 31 December 2018 were as follows:
Weighted average
interest rates
2018 2017
% %
Short term funds 3.42 3.26
210
18. (a) Share Capital

Number of ordinary shares Amount
2018 2017 2018 2017

Unit’000 Unit’000 RM’000 RM’000
Issued and fully paid:

At 1 January 208,134 208,134 390,054 208,134
Transfer of share premium * - - - 181,920
At 31 December 208,134 208,134 390,054 390,054
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual
assets.
* Pursuant to Section 618(2) of the Companies Act 2016 which came into operation on 31 January 2017, any
outstanding share premium and capital redemption reserve accounts shall become part of share capital.
(b) Treasury Shares
The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe
the purchase of treasury shares is in the best interests of the Company and its shareholders. The Company has the
right to cancel, resell and/or distribute these shares as dividends at a later date. As treasury shares, the rights attached
to voting, dividends and participation in other distribution are suspended.
As at 31 December 2018, the number of treasury shares held remained at 341,774 shares as there were no share buy-
back nor any cancellation, re-sale or distribution or distribution of treasury shares in the current year. These treasury
shares were held in accordance with the requirement of Section 127 of the Companies Act 2016.
Cost
No of shares RM'000
2018
As at the beginning/end of the financial year 341,774 8,635
2017
As at the beginning/end of the financial year 341,774 8,635
The share buy-back was financed by internally generated funds.
211
19. Reserves
Group Company
2018 2017 2018 2017
Note RM’000 RM’000 RM’000 RM’000
Distributable
Retained profits (a) 2,196,542 2,134,195 1,609,628 1,647,743
Non-distributable
Cash flow hedge reserve (b) 352 - - -
Capital reserve (d) 21,798 21,798 - -
Foreign currency translation reserve (e) (19,022) (13,487) - -
3,128 8,311 - -
Total 2,199,670 2,142,506 1,609,628 1,647,743
The nature and purpose of each category of reserve are as follows:
(a) Retained profits
The entire retained earnings can be distributed as dividend under the single tier system.
(b) Cash flow hedge reserve
The effective portion of the gain or loss on a hedging instrument is recognised in OCI in the cash flow hedge reserve.
The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on a hedging instrument and the
cumulative change in fair value of the hedged item.
(c) Share premium
Pursuant to Section 618(2) of the Companies Act 2016 ("CA 2016"), any outstanding share premium and capital
redemption reserve accounts became part of Share Capital in 2017.
(d) Capital reserve
The capital reserve is in respect of bonus shares issued by subsidiary companies out of their retained earnings.
(e) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from that of the Group’s
presentation currency. It is also used to record the exchange differences arising from the translation of monetary
items which form part of the Group’s net investment in foreign operations.
212
20. Deferred taxation

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
At 1 January 136,856 122,032 129,338 114,977

Recognised in profit or loss (Note 8) 4,845 14,338 9,757 14,361
Exchange differences 659 486 - -
At 31 December 142,360 136,856 139,095 129,338
Presented after appropriate offsetting

as follows:
Deferred tax liabilities 145,991 140,380 139,095 129,338
Deferred tax assets (3,631) (3,524) - -
142,360 136,856 139,095 129,338
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as
follows:
Deferred tax liabilities of the Group:
Accelerated
Biological Capital Others Total
Assets Allowances
RM’000 RM’000 RM’000 RM’000
At 1 January 2018 7,581 137,204 3,367 148,152

Recognised in profit or loss (660) 7,629 (3,367) 3,602
Exchange differences (43) - - (43)
At 31 December 2018 6,878 144,833 - 151,711
At 1 January 2017 6,848 125,689 - 132,537

Recognised in profit or loss 733 11,515 3,367 15,784
Exchange differences - - - (169)
At 31 December 2017 7,581 137,204 3,367 148,152
213
Deferred tax assets of the Group:
Retirement
Benefit Others Total
Obligations
RM’000 RM’000 RM’000
At 1 January 2018 (3,466) (7,830) (11,296)

Recognised in profit or loss (110) 1,353 1,243
Exchange differences 50 652 702
At 31 December 2018 (3,526) (5,825) (9,351)
At 1 January 2017 (3,359) (7,146) (10,505)

Recognised in profit or loss (220) (1,057) (1,277)
Exchange differences 113 373 486
At 31 December 2017 (3,466) (7,830) (11,296)
Deferred tax liabilities of the Company:
Accelerated
Biological capital Total
Assets allowances
RM’000 RM’000 RM’000
At 1 January 2018 6,387 125,018 131,405

Recognised in profit or loss (409) 9,915 9,506
At 31 December 2018 5,978 134,933 140,911
At 1 January 2017 5,218 111,960 117,178

Recognised in profit or loss 1,169 13,058 14,227
At 31 December 2017 6,387 125,018 131,405
Deferred tax assets of the Company:
Retirement
Benefit Others Total
Obligations
RM’000 RM’000 RM’000
At 1 January 2018 (1,517) (550) (2,067)

Recognised in profit or loss (87) 338 251
At 31 December 2018 (1,604) (212) (1,816)
At 1 January 2017 (1,801) (400) (2,201)

Recognised in profit or loss 284 (150) 134
At 31 December 2017 (1,517) (550) (2,067)
214
21. Retirement Benefit Obligations

The Company and certain subsidiary companies pay retirement benefits to their eligible employees in accordance with
the terms of employment and practices. These plans are generally of the defined benefit type under which benefits
are based on employees’ years of service and at predetermined rates or average final remuneration, and are unfunded.
From the financial year 2011 onwards, the subsidiaries in Indonesia provided employee benefits under the Labour
Law No.13. No formal independent actuarial valuations have been undertaken to value the Group’s obligations under
these plans but are estimated by the Group, except for the obligations of PTSSS1 where an independent actuarial
valuation is used. The obligations of the Group are based on the following actuarial assumptions:
2018 2017
% %
Discount rate in determining the actuarial

present value of the obligations 6.0 - 7.5 6.0 - 7.5
The average rate of increase in future earnings 4.0 - 10.0 4.0 - 10.0
Turnover of employees 10.0 - 20.0 10.0 - 20.0
The amounts recognised in the statements of financial position are determined as follows:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Present value of unfunded defined

benefit obligations 14,849 14,597 6,685 6,321
At 1 January 14,597 14,003 6,321 7,503

Provision during the year (Note 5) 2,611 3,169 484 865
Write back during the year - (1,846) - (1,846)
Paid during the year (402) (276) (120) (201)
Actuarial changes during the year (1,617) - - -
Exchange difference (340) (453) - -
At 31 December 14,849 14,597 6,685 6,321
Analysed as:
Current 1,234 971 912 649
Non-current:
Later than 1 year but not later than 2 years 1,150 515 488 335
Later than 2 years but not later than 5 years 1,547 1,997 973 926
Later than 5 years 10,918 11,114 4,312 4,411
13,615 13,626 5,773 5,672
14,849 14,597 6,685 6,321
215
Sensitivity analysis
The impact on changes of each significant actuarial assumption as at the end of the reporting period is as follows:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Discount rate increase by 1% (1,422) (1,495) (571) (570)

Discount rate decrease by 1% 1,624 1,730 670 670
The average rate of increase in future

earnings increase by 1% 707 810 8 29
The average rate of increase in future
earnings decrease by 1% (655) (743) (8) (29)
Turnover of employees increase by 1% (187) (124) (52) (26)

Turnover of employees decrease by 1% 81 79 30 26
22. Trade And Other Payables

Group Company
2018 2017 2018 2017
Note RM’000 RM’000 RM’000 RM’000
Current
Trade payables
Third parties (a) 14,623 33,522 483 197
Other payables
Due to subsidiary companies (b) - - 1,528 3,242
Advances from customers 831 828 831 828
Accruals 51,654 44,886 31,573 37,169
Sundry payables 70,221 58,513 35,582 45,024
122,706 104,227 69,514 86,263
Total trade and other payables 137,329 137,749 69,997 86,460

Add: Bank borrowings (Note 23) 100 111 - -
Total financial liabilities carried at amortised cost 137,429 137,860 69,997 86,460
(a) Trade payables
Trade payables are non-interest bearing and the average credit terms granted to the Group and the Company range from
30 to 60 days (2017: 30 to 60 days).
(b) Due to subsidiary companies

Amounts due to subsidiary companies are interest free, unsecured and repayable on demand.
216
23. Bank Borrowings

Group
2018 2017
RM’000 RM’000
Bank overdraft - unsecured 100 111
The interest rate applicable to the bank borrowings for the year was 7.40% (2017: 6.70%) per annum.
24. Dividends
Group / Company
Net Dividends
Amount
per Share
2018 2017 2018 2017
RM’000 RM’000 sen sen
Final single-tier dividend paid in

respect of previous financial year:
- 20 sen per share
(2017: 20 sen per share) 41,558 41,558 20.00 20.00
Special single-tier dividend paid in
respect of previous financial year:
- 100 sen per share
(2017: 65 sen per share) 207,792 135,065 100.00 65.00
Interim single-tier dividend in
respect of current financial year:
- 20 sen per share
(2017: 20 sen per share) 41,558 41,558 20.00 20.00
Special single-tier dividend in
respect of current financial year:
- 10 sen per share
(2017: 10 sen per share) 20,779 20,779 10.00 10.00
311,687 238,960 150.00 115.00
At the forthcoming Annual General Meeting, a final single-tier dividend of 20 sen per share amounting to RM41,558,498
and a special single-tier dividend of 90 sen per share amounting to RM187,013,243 in respect of the year ended 31
December 2018 on the ordinary shares in issue at book closure date will be proposed for shareholders’ approval. The
financial statements for the current financial year do not reflect these proposed dividends. Such dividends, if approved by
the shareholders, will be accounted for in shareholders’ equity as an appropriation of retained profits in the next financial
year ending 31 December 2019.
25. Significant Inter-Company Transactions

Company
2018 2017
RM’000 RM’000
Sale of raw materials to a subsidiary company 329,130 367,400

Sale of biomass and biogas steam to a subsidiary company 1,724 1,878
Interest charged to a subsidiary company 2 1,362
All transactions with the subsidiary companies are undertaken in the ordinary course of business and have been
established on terms and conditions that are not materially different from those obtainable in transactions with unrelated
parties.
217
26. Significant Related Party Transactions
(a) Related Party Transactions
The Group entered into transactions with International Plantations Services Limited (IPS), a company incorporated
in Bahamas. This company is deemed to be a related party by virtue of common directorship held by certain directors
in IPS and the Group.
In addition to the inter-company balances and transactions detailed in Notes 12, 16, 22 and 25 of the financial
statements, the Group and the Company had the following transactions with related parties during the year:
Nature Of Transactions Amount Billed Amount Billed

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Sale of plant and equipment to

Unifuji Sdn. Bhd. 219 11,792 219 -
Interest income from advances to
Unifuji Sdn. Bhd. 447 80 146 80
Service fees paid to IPS 83 83 83 83
The Directors are of the opinion that the above related party transactions are undertaken in the ordinary course of
business and have been established on terms and conditions that are not materially different from those obtainable
in transactions with unrelated parties.
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Amount outstanding at 31 December:

Due from IPS 67 24 67 24
The outstanding balances at the reporting date in relation to related party transactions are included in other
receivables (Note 16).
(b) Compensation of key management personnel
The remuneration of key management during the year was as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Short-term employee benefits 5,396 4,268 5,396 4,268

Post employment benefits:
Defined contribution plan 865 678 865 678
Directors fees 451 331 400 280
Others 110 96 30 24
6,822 5,373 6,691 5,250
218
27. Segmental Information
For management purposes, the Group is organised into business units based on their products and services, and has
three reportable operating segments as follows:-
(a) The plantations segment carries on the business of oil palm and coconut cultivation and processing on its plantations
in Peninsular Malaysia and Kalimantan, Indonesia. Under this segment, there is also an active Research Centre
providing improved planting material for the Group’s estates as well as for the Malaysian agricultural sector in
general.
(b) The palm oil refining segment which carries on the business of palm oil processing, manufacturing of edible oils, fats,
cocoa butter substitute and trading in crude palm oil and palm oil products.
(c) The other segments consist of bulking facilities which carry on the business of handling and storage of vegetable oils
and molasses and holding companies for subsidiaries in Indonesia which are also involved in marketing and trading
of the Group’s products.
The Group’s principal activities are the cultivation and processing of oil palm and coconut on plantations in Peninsular Malaysia
and Indonesia. The activities of the subsidiary companies (except Unitata Berhad) are all incidental to the main activity and in
terms of revenue, profit contribution and assets employed, they are insignificant. Inter-segment sales at fair market values have
been eliminated.
The principal activity of Unitata Berhad is palm oil refining and its ancillary activities.
The analysis of Group operations is as follows:
(i) Business segments
Plantations Palm Oil Refining Other Segments Elimination Consolidated

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Revenue and expenses

Revenue:
External sales 402,296 414,273 901,629 1,058,592 1,666 1,458 - - 1,305,591 1,474,323
Inter-segment sales 329,130 367,400 - - - - (329,130) (367,400) - -
Total revenue 731,426 781,673 901,629 1,058,592 1,666 1,458 (329,130) (367,400) 1,305,591 1,474,323
Results:
Segment results/
operating profit 396,164 405,341 72,560 86,450 (4,155) (13,810) - - 464,569 477,981
Investment and
interest income 16,260 17,935 2,599 714 18,544 21,217 (7,164) (13,754) 30,239 26,112
Interest expense (7,185) (12,411) (4) (1,365) - - 7,164 13,754 (25) (22)
Share of results of
joint venture - - (3,911) (101) - - - - (3,911) (101)
Income taxes (99,581) (87,805) (16,431) (21,107) (760) (376) - - (116,772) (109,288)
Net profit for the year 374,100 394,682
219
Plantations Palm Oil Refining Other Segments Elimination Consolidated

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Assets and liabilities

Segment assets 2,082,926 2,080,911 460,403 437,718 349,022 301,183 - - 2,892,351 2,819,812
Investment in an
associated company - - - - 50 50 - - 50 50
Investment in a
joint venture - - 25,988 29,899 - - - - 25,988 29,899
Consolidated total assets 2,918,389 2,849,761
Segment liabilities 270,632 252,481 58,606 66,160 234 302 - - 329,472 318,943
Consolidated total liabilities 329,472 318,943
Other information
Capital expenditure * 108,541 171,871 17,965 4,873 134 8 - - 126,640 176,752
Depreciation 74,297 73,852 10,511 10,223 53 39 - - 84,861 84,114
Amortisation 1,091 688 - - - - - - 1,091 688
Other significant non-cash
expenses:
Net write-down of
inventories - - 10,602 - - - - - 10,602 -
Net realised foreign
exchange (gain)/loss - - (8,156) (10,783) 1,281 2,135 - - (6,875) (8,648)
Net unrealised foreign
exchange (gain)/ loss - (1) (1,577) (14,029) 3,023 12,203 - - 1,446 (1,827)
(ii) Geographical segments
In determining the geographical segments of the Group, revenue is based on the geographical location of customers.
Total assets and capital expenditure are based on the geographical location of assets:
Malaysia Indonesia Europe United States Others Consolidated

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue 623,651 680,080 156,109 189,759 347,365 481,413 5,566 59,491 172,900 63,580 1,305,591 1,474,323
Total assets 2,589,242 2,500,031 258,390 273,317 40,114 52,587 151 7,835 30,492 15,991 2,918,389 2,849,761
Capital expenditure * 111,769 166,758 14,871 9,994 - - - - - - 126,640 176,752
* Capital expenditure presented above consist of the following items as presented in the consolidated statement of
financial position:
Group
2018 2017
Note RM’000 RM’000
Property, plant and equipment 10 (a) 120,739 175,582
Land use rights 10 (b) 5,901 1,170
126,640 176,752
(iii) Information about a major customer
Revenue from one major customer amounted to RM742,085,000 (2017: RM961,186,000), arising from sales by the
palm oil refining segment.
220
28. Capital Commitments

Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Capital expenditure approved by the

Directors but not contracted 100,332 116,111 72,721 96,806
Capital expenditure contracted but
not provided for 11,604 17,650 11,342 15,220
111,936 133,761 84,063 112,026
29. Financial Instruments
(a) 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 business whilst managing its interest rate, liquidity, foreign exchange, commodity price
and credit risks. The Group operates within clearly defined guidelines that are approved by the Board.
During the year, the Group entered into commodity futures contracts. Control and monitoring procedures include,
amongst others, setting of trading limits and the manner and timing of management reporting. Such derivative
trading is also under the close supervision of the executive committee. These control procedures are periodically
reviewed and enhanced where necessary in response to changes in market condition.
(b) Interest rate risk
The Group's primary interest rate risk relates to short term fixed rate term deposits with licensed banks and negotiable
papers issued by licensed banks. The Group does not hedge this exposure. The maturity periods are mixed such that
the Group's cash flow requirements are met while yielding a reasonable return. The effective interest rates are as
disclosed in Note 17.
The Group’s bank borrowings are insignificant to hedge. The effective interest rate is disclosed in Note 23.
Sensitivity analysis for interest rate risk
At the reporting date, if interest rates had been 10 basis points higher/lower, with all other variables held constant,
the Group’s profit net of tax would have been RM803,000 (2017: RM669,000) higher/lower, arising as a result of
higher/lower interest income from deposits with licensed banks, and the Group’s retained earnings would have
been RM803,000 (2017: RM669,000) higher/lower. The assumed movement in basis points for interest rate sensitivity
analysis is based on the currently observable market movements.
(c) Foreign exchange risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates.
The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency
other than the respective functional currencies of Group entities, primarily RM and Indonesian Rupiah (“IDR”). The
foreign currencies in which these transactions are denominated are mainly US Dollars (“USD”).
Approximately 61% (2017: 65%) of the Group’s sales are denominated in foreign currencies whilst almost 51%
(2017: 66%) of costs are denominated in the respective functional currencies of the Group entities. The Group’s trade
receivable and trade payable balances at the reporting date have similar exposures.
221
The Group and the Company also hold cash and cash equivalents denominated in foreign currencies for working
capital purposes. At the reporting date, such foreign currency balances amounted to RM35,239,000 (2017:
RM2,166,000) and RM93,000 (2017: RM308,000) for the Group and the Company respectively.
Foreign currency transactions denominated in IDR are not hedged while transactions in USD are hedged by forward
currency contracts, whenever possible. The forward currency contracts must be in the same currency as the hedged
item. It is the Group’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged item
to maximise hedge effectiveness.
At 31 December 2018, the Group hedged 100% (2017: 100%) and 0% (2017: 0%) of its foreign currency denominated
sales and purchases respectively, for which firm commitments existed at the reporting date, extending to January
2020 (2017: January 2020).
The Group is also exposed to currency translation risk arising from its net investments in Indonesia.
The net unhedged financial assets of the Group that are not denominated in their functional currencies are as
follows:
Indonesian
Rupiah Total
Functional currency of the Group RM’000 RM’000
At 31 December 2018:
Ringgit Malaysia denominated advances to foreign subsidiaries 82,266 82,266
At 31 December 2017:
Ringgit Malaysia denominated advances to foreign subsidiaries 106,248 106,248
The Group had entered into forward currency contracts with the following notional amounts and maturities:
Maturities
Total
Within 1 year up notional
1 year to 5 years amount
Currency RM’000 RM’000 RM’000
As at 31 December 2018:
Forwards used to hedge receivables USD 383,898 8,564 392,462
Forwards used to hedge receivables USD 344,162 57,023 401,185
The net recognised loss as at 31 December 2018 on forward exchange contracts used to hedge receivables and
payables as at 31 December 2018 amounted to RM3,132,000 (31 December 2017: net recognised loss RM18,267,000).
222
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in
the USD and IDR exchange rates against the functional currencies of the Group entities, with all other variables
held constant.
Group
2018 2017
RM’000 RM’000
Profit net of tax Profit net of tax
USD/RM
- strengthened 3% (11,664) (11,414)
- weakened 3% 11,664 11,414
IDR/RM
- strengthened 3% 2,419 3,097
- weakened 3% (2,419) (3,097)
(d) Credit risk
Credit risks, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and
monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group's associations to
business partners with high creditworthiness. Except for the amount due from a major customer of the palm oil
refinery unit, the Group has no other significant concentration risk that may arise from exposures to a single debtor
or to a group of debtors. Trade receivables are monitored on an ongoing basis via Company management reporting
procedures (with the exception of fixed deposits and short term funds invested in income trust funds). The average
credit terms granted to the Group's customers are 10 to 75 days.
Credit risk of commodity futures contracts arises from the possibility that a counterparty may be unable to meet the
terms of a contract in which the Group and the Company have a gain position. This amount will increase or decrease
over the life of the contracts, mainly as a function of maturity dates and market prices.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying
amount of each class of financial assets recognised in the statements of financial position, including derivatives with
positive fair values.
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the trade receivables of its operating segments
on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are
as follows:
Group
2018 2017
RM’000 % of total RM’000 % of total
By Segment:
Plantations 7,834 5.86% 2,211 1.31%

Palm Oil Refining 125,700 94.01% 166,254 98.61%
Others 178 0.13% 137 0.08%
133,712 100.00% 168,602 100.00%
At the reporting date, approximately 86% (2017: 87%) of the Group’s trade receivables were due from a major
customer of the palm oil refinery unit.
223
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 16. Deposits with
banks and other financial institutions, investment securities and derivatives that are neither past due nor impaired
are placed with or entered into with reputable financial institutions or companies with high credit ratings and no
history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 16.
(e) Liquidity risk
The Group actively manages its cash flows by monthly forecasts of funding requirements. As part of its prudent
liquidity management, the Group maintains sufficient levels of cash or cash equivalents, banking facilities of a
reasonable level to meet its working capital requirements. As far as possible, the Group funds significant long term
investments with internal funding to achieve overall cost effectiveness.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group's and the Company's liabilities at the reporting date
based on contractual undiscounted amounts.
On demand
or within 1 to 5 Over 5
1 year years years Total
RM'000 RM'000 RM’000 RM’000
Group
2018
Financial liabilities:
Trade and other payables 137,329 - - 137,329
Derivatives 8,752 - - 8,752
Bank borrowings 100 - - 100
Total undiscounted financial liabilities 146,181 - - 146,181
2017
Derivatives 11,658 1,115 - 12,773
Bank borrowings 111 - - 111
Total undiscounted financial liabilities 149,518 1,115 - 150,633
224
On demand
or within 1 to 5 Over 5
1 year years years Total
RM'000 RM'000 RM’000 RM’000
Company
2018
2017
(f) Market risk
Market risk is the potential change in value caused by movement in market prices. The contractual amounts stated
under Note 29(g) provide only a measure of involvement in these types of transactions.
Sensitivity analysis for market price risk
At the reporting date, if the value of the derivatives as stated under Note 29(g) had been 3% higher/lower, with all
other variables held constant, the Group’s profit net of tax and OCI would have been RM241,000 (2017: RM237,000)
higher/lower, arising as a result of higher/lower fair value gains on held for trading/hedging commodity future
contracts, and the Group’s retained earnings would have been higher/lower by the same amount, arising as a result
of an increase/decrease in the fair value of the aforementioned commodity futures contracts. As at the reporting date,
the impact of changes in the commodity future market, with all other variables held constant, is immaterial to the
Group’s profit net of tax and equity.
225
(g) Derivatives
Contract/Notional Assets Liabilities
Group Amount
RM’000 RM’000 RM’000
2018
Current
Non-hedging derivatives:
Forward currency contracts 383,898 2,866 -
Commodity futures contracts 308,961 8,434 (8,752)
Hedging derivatives:
Commodity futures contracts 141,008 5,938 -
17,238 (8,752)
Non-Current
Forward currency contracts 8,564 266 -
Commodity futures contracts 6,586 467 -
Hedging derivatives:
Commodity futures contracts 10,466 849 -
1,582 -
Total derivatives 18,820 (8,752)
2017
Current
Commodity futures contracts 806,741 5,394 (11,658)
20,244 (11,658)
Non-Current
Commodity futures contracts 149,535 - (1,115)
3,417 (1,115)
Total derivatives 23,661 (12,773)
226
Derivatives not designated as hedging instruments

The Group uses forward currency contracts and commodity futures contracts to manage some of the transaction
exposure, as well as to take advantage of favourable market conditions. The forward currency contract is not
designated as cash flow or fair value hedges and is entered into for periods consistent with currency transaction
exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting.
Forward currency contracts are used to hedge the Group’s sales and purchases denominated in USD for which firm
commitments existed at the reporting date, extending to January 2020 (2017: January 2020) (Note 29(c)).
During the financial year, the Group recognised a gain of RM10,068,000 (2017: gain of RM10,888,000) arising from
fair value changes of derivative contracts. The fair value changes are attributable to changes in commodity prices and
forward exchange rates.
Derivatives designated as hedging instruments
Cash flow hedge
Commodity price risk
Commencing from 1 October 2018, the Group has designated certain commodity futures contracts as hedging
derivatives to reduce the volatility attributable to price fluctuations of crude palm oil ("CPO"). Hedging of the price
volatility of forecast CPO is in accordance with the risk management strategy outlined by the Board of Directors.
There is an economic relationship between the hedged items and the hedging instruments as the terms of the
commodity price and commodity forward contracts match the terms of the expected highly probable forecast
transactions (i.e., notional amount and expected payment date). The Group has established a hedge ratio of 1:1
for the hedging relationships as the underlying risk of the commodity price and commodity forward contracts are
identical to the hedged risk components. To test the hedge effectiveness, the Group uses the hypothetical derivative
method and compares the changes in the fair value of the hedging instruments against the changes in fair value of
the hedged items attributable to the hedged risks.
The hedge ineffectiveness can arise from:
o Differences in the timing of the cash flows of the hedged items and the hedging instruments.
o Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and hedging
instruments.
o The counterparties’ credit risk differently impacting the fair value movements of the hedging instruments and
hedged items.
o Changes to the forecasted amount of cash flows of hedged items and hedging instruments.
The Group is holding the following commodity forward contracts:

Maturity
Less than 6 to 12 More than Total

6 months months 12 months
Commodity forward contracts
Notional amount (in MT) 4,250 57,475 4,325 66,050
Notional amount (in RM'000) 8,861 132,147 10,466 151,474
Average hedged rate (in RM'000 per MT) 2.08 2.30 2.42 2.29
There is no amount recognised for the change in fair value used for measuring ineffectiveness in profit or loss in
the current financial year.
227
The impact of hedged items (net of tax) on the statements of financial position is, as follows:
Cash flow
hedge reserve
RM’000
As at 31 December 2018
CPO 352
Determination of fair value
Fair value of the commodity futures contracts is determined by reference to the difference between the contracted
rate and the forward rate as at the reporting date.
Fair value of the forward currency contracts is determined by reference to the difference between the contracted
rate and the market rate as at the reporting date.
(h) Fair value of financial instruments
The Group and the Company use the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation techniques:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: techniques for which all inputs that have a significant effect on the recorded fair value are observable, either
directly or indirectly; and
Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on
observable market data.
The Group held the following financial instruments carried at fair value in the statements of financial position:
Assets/
(liabilities) Level 1 Level 2 Level 3
RM’000 RM’000 RM’000 RM’000
31 December 2018
Fair value through profit or loss:
Biological assets 28,509 - - 28,509
Short term funds 713,411 713,411 - -
Commodity futures contracts 6,936 6,936 - -
Forward currency contracts 3,132 - 3,132 -
31 December 2017
Fair value through profit or loss:
Biological assets 31,388 - - 31,388
Short term funds 377,874 377,874 - -
Commodity futures contracts (7,379) (7,379) - -
Forward currency contracts 18,267 - 18,267 -
228
30. Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains acceptable capital ratios in order
to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions or
expansion plans of the Group. The Group may adjust the capital structure by issuing new shares, returning capital to
shareholders or adjusting dividend payment policies. No changes were made in the objectives, policies or processes
during the years ended 31 December 2018 and 31 December 2017.
The Group includes within net debt, bank borrowings (bank overdraft) and trade and other payables, less cash and bank
balances. Capital includes equity attributable to the owners of the parent.
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Debt
Bank borrowings 100 111 - -
Trade and other payables 137,329 137,749 69,997 86,460
137,429 137,860 69,997 86,460

Less: Cash and bank balances (202,389) (473,711) (85,209) (371,285)
Net surplus of cash and bank

balances over debt (64,960) (335,851) (15,212) (284,825)
Equity attributable to the owners

of the parent 2,581,089 2,523,925 1,991,047 2,029,162
Total capital 2,581,089 2,523,925 1,991,047 2,029,162
Capital and net surplus of cash

and bank balances over debt 2,646,049 2,859,776 2,006,259 2,313,987
Gearing ratio - - - -
There are no externally imposed capital requirements.
31. Significant event during the reporting period
On 21 September 2018, the Company entered into 3 conditional sale and purchase agreements (“SPAs”) with Pinehill
Pacific Berhad’s group of companies to purchase agriculture lands measuring approximately 8,999 acres together with
a palm oil mill in Daerah Hilir Perak for a total combined purchase consideration of RM413.57 million (“Proposed
Acquisition”). Barring unforeseen circumstances, this Proposed Acquisition is expected to be completed by March/
April 2019.
229
Statement By Directors
Pursuant to Section 251(2) of the Companies Act 2016
We, TAN SRI DATUK DR. JOHARI BIN MAT and DATO’ CARL BEK-NIELSEN, being two of the Directors of United
Plantations Berhad, do hereby state that, in the opinion of the Directors, the accompanying financial statements set out on
pages 166 to 229 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as at 31 December 2018 and of the results and the cash flows of the Group and of
the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 23 February 2019.
TAN SRI DATUK DATO’ CARL BEK-NIELSEN

DR. JOHARI BIN MAT
Jendarata Estate
36009 Teluk Intan,
Malaysia.
Statutory declaration
Pursuant to Section 251(1)(b) of the Companies Act 2016
I, NG ENG HO the Officer primarily responsible for the financial management of United Plantations Berhad, do solemnly
and sincerely declare that the accompanying financial statements set out on pages 166 to 229 are in my opinion 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.
Subscribed and solemnly declared by

the abovenamed NG ENG HO at
Teluk Intan in the State of Perak Darul Ridzuan
on 25 February 2019. NG ENG HO
Before me,
Siti Suhadah Bt Shoeb

Commissioner For Oaths,
Teluk Intan,
Malaysia.
230
Independent auditors’ report to the members of United Plantations Berhad
(Incorporated in Malaysia)
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of United Plantations Berhad, which comprise the statements of financial position
as at 31 December 2018 of the Group and of the Company, and the statements of comprehensive income, statements of
changes in equity and statements of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies as set out on pages 166 to 229.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and
the Company as at 31 December 2018 and of their financial performance and their cash flows for the year then ended in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act 2016 in Malaysia.
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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, 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 as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit of the financial statements section
of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed
to respond to our assessment of the risks of material misstatement of the financial statements of the Group and of the
Company. The results of our audit procedures, including the procedures performed to address the matters below, provide the
basis for our audit opinion on the accompanying financial statements.
231
Revenue Recognition
(Refer to Notes 2.4(i) and 4 to the financial statements)
Revenue from sale of finished goods recognised by the Group during the year amounted to RM902 million. Given the nature
of the manufacturing operations of the Group, we identified revenue recognition in respect of sale of finished goods to be
an area of audit focus as we consider the high volume of transactions for numerous types of finished goods produced by
the Group to be a possible cause of higher risk of material misstatements in the timing and amount of revenue recognised.
Specifically, we focused our audit efforts to determine the possibility of overstatement of revenue.
How our audit addresses this matter
Our audit procedures for revenue recognition included testing the Group’s internal controls over timing and amount of
revenue recognised. We inspected the terms of significant sales contracts to determine the point of transfer of significant risk
and rewards. We have independently obtained third party confirmation of sales for the year from a key customer. We have
also inspected documents which evidenced the delivery of goods to customers. We also focused on testing the recording of
sales transactions close to the year end, including credit notes issued after year end, to establish whether the transactions were
recorded in the correct accounting period.
Valuation of Biological Assets – Oil Palms

(Refer to Notes 2.2, 2.4(e), 5 and 11 to the financial statements)
The fair value of the Group’s and the Company’s Biological Assets – Oil Palms amounts to RM22.5 million and RM18.9 million
respectively as of December 31, 2018.
The biological assets of the Group and of the Company mainly comprise oil palm fresh fruit bunches ("FFB") prior to harvest.
These biological assets are measured on initial recognition and at the end of each reporting period at its fair value less cost
to sell. The agricultural produce harvested from the Group’s and the Company’s biological assets are measured at its fair
value less cost to sell at the point of harvest. Such measurement is the cost at that date when the Group and the Company
determine the costs of their inventories.
The valuation model adopted by the Group considers the present value of the net cash flows expected to be generated from
the sale of FFB. To arrive at the fair value less cost to sell of the biological assets, the management considered the oil content
at the various stages of the unripe FFB.
We focused on the valuation of the Group’s and the Company’s biological assets as significant judgments were involved in
the assessment of oil content of the various stages of the unripe FFB, which may cause possible variations in the fair value less
cost to sell of the biological assets.
How our audit addresses this matter
Our audit procedures to address this area of focus included amongst others:
(a) We obtained an understanding of the methodology adopted by the management in estimating the fair value less cost of
sell of the biological assets and assessed whether such methodology is consistent with those used in the industry; and
(b) We evaluated the management’s assumptions on oil content at the various stages of the unripe FFB by comparing to a
published research paper on the correlation between oil content and stage of maturity of FFB. We read the published
research papers to obtain an understanding of the methodology adopted and the data used in the research.
We also focus on the adequacy of the note disclosures concerning those key assumptions to which the valuation of the fair
value of biological asset is most sensitive.
232
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 information
included in the annual report, but 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, 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 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 intends to liquidate the Group or the Company or
to cease operations, or has no realistic alternative 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
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.
233
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,
we exercise professional judgment 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 director’s 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 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 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 and the Company to cease to
continue as a going concern.
(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 and business activities
within the Group to express an opinion on the consolidated financial statements. 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.
234
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 3 to the financial statements.
Other matters
(a) As stated in Note 2.2 to the financial statements, United Plantations Berhad adopted Malaysian Financial Reporting
Standards and International Financial Reporting Standards on 1 January 2018 with a transition date of 1 January 2017.
These standards were applied retrospectively by 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 December 2017 and 1 January
2017, and the statements of profit or loss and other comprehensive income, statements of changes in equity and
statements of cash flows of the Group and of the Company for the year ended 31 December 2017 and 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 year ended 31 December 2018, in these
circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 January 2018 do
not contain misstatements that materially affect the financial position as at 31 December 2018 and financial performance
and cash flows for the year then ended.
(b) 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.
ERNST & YOUNG HOH YOON HOONG

AF: 0039 No. 02990/08/2020 J
Chartered Accountants Chartered Accountant
Kuala Lumpur, Malaysia

23 February 2019
235
Shareholders Information As At 31 January 2019
Issued Capital : No. of shares 208,134,266 (including 341,774 treasury shares)

Class of Shares : Ordinary Shares
Voting Rights : One Vote per ordinary share
Categories Of Shareholders As At 31 January 2019

Size of Holdings No. of % of No. of % of Issued
Holders Holders Shares Capital *
Less than 100 shares 186 5.01 4,337 0.00

100 to 1,000 shares 1,874 50.46 1,336,634 0.64
1,001 to 10,000 shares 1,315 35.41 4,731,001 2.28
10,001 to 100,000 shares 266 7.16 8,116,064 3.91
100,001 to less than 5% of issued shares 67 1.80 52,179,650 25.11
5% and above of issued shares 6 0.16 141,424,806 68.06
Total 3,714 100.00 207,792,492 100.00
Substantial Shareholders As At 31 January 2019

Name of Shareholder Direct Interest % of Issued Deemed Interest % of Issued
No. of Shares Capital * No. of Shares Capital *
1. Maximum Vista Sdn. Bhd. (MVSB) 89,607,800 43.12 - -

2. Employees Provident Fund Board 28,005,148 13.48 - -
3. Perbadanan Pembangunan Pertanian Negeri Perak 13,065,158 6.29 330,000*5 0.16
(Perbadanan)
4. AmanahRaya Trustees Berhad - Amanah Saham Malaysia 10,746,700*6 5.17 - -
5. United International Enterprises Limited (UIEL) 9,718,571 4.68 89,607,800* 1 43.12
6. C & M Holding Limited (C & M HL) - 0.00 99,326,371*2 47.80
7. Brothers Holding Ltd (BHL) - 0.00 99,326,371* 2 47.80
8. Ybhg. Dato' Carl Bek-Nielsen 2,419,491 1.16 99,371,429*3 47.82
9. Mr. Martin Bek-Nielsen 552,389 0.27 99,329,371* 4 47.80
*Notes
(1) Deemed interest by virtue of substantial shareholdings in MVSB.
(2) Deemed interest by virtue of substantial shareholdings in MVSB and UIEL.
(3) Deemed interest by virtue of substantial shareholdings in MVSB, UIEL and through immediate family members.
(4) Deemed interest by virtue of substantial shareholdings in MVSB, UIEL and through immediate family members.
(5) Deemed interest by virtue of shares held by subsidiary company of Perbadanan.
(6) Direct interest in the shareholdings in UP registered in the name of AmanahRaya Trustees Berhad.
Directors’ Shareholdings As At 31 January 2019
Name of Director Direct Interest % of Issued Deemed Interest % of Issued
No. of Shares Capital * No. of Shares Capital *
Ybhg. Tan Sri Datuk Dr. Johari Bin Mat 90,000 0.04 10,000 0.00
Ybhg. Dato' Carl Bek-Nielsen 2,419,491 1.16 99,371,429 47.82
Mr. Ho Dua Tiam 707,400 0.34 - -
Mr. Ahmad Riza Basir 80,500 0.04 - -
Y. Hormat Dato' Jeremy Derek Campbell Diamond 16,000 0.01 336,000 0.16
Mr. Martin Bek-Nielsen 552,389 0.27 99,329,371 47.80
Mr. Loh Hang Pai 43,000 0.02 - -
Mr. R. Nadarajan - - - -
Madam Rohaya binti Mohammad Yusof - - - -
Mr. Jorgen Balle - - - -
236
Shareholders Information
Thirty (30) Largest Shareholders As At 31 January 2019
Name of Shareholder No. of Shares % of Issued
Capital*
1. Maximum Vista Sdn Bhd 86,891,100 41.82
2. Citigroup Nominees (Tempatan) Sdn Bhd 27,071,648 13.03
Employees Provident Fund Board
3. Perbadanan Pembangunan Pertanian Negeri Perak 13,065,158 6.29
4. Amanahraya Trustees Berhad 10,746,700 5.17
Amanah Saham Malaysia
5. United International Enterprises Limited 9,694,656 4.67
Amanah Saham Bumiputera 3 - Didik
7. HSBC Nominees (Asing) Sdn Bhd 2,783,900 1.34
BPSS Lux For Aberdeen Global - Asian Smaller Companies Fund
8. Maximum Vista Sdn Bhd 2,716,700 1.31
Amanah Saham Bumiputera 2
10. BHR Enterprise Sdn Bhd 2,422,440 1.17
11. Ybhg. Dato' Carl Bek-Nielsen 2,334,491 1.12
Exempt An for Danske Bank A/S (Client Holdings)
13. DB (Malaysia) Nominee (Asing) Sdn Bhd 1,674,600 0.81
BNYM SA/NV For First State Investments ICVC - Stewart Investors
Asia Pacific Sustainability Fund
14. Citigroup Nominees (Tempatan) Sdn Bhd 1,500,000 0.72
Kumpulan Wang Persaraan (Diperbadankan) (Aberdeen)
Exempt An For The Bank of New York Mellon SA/NV (Jyske Clients)
BPSS LDN For Aberdeen Standard Asia Focus Plc
BNYM SA/NV For Nykredit Bank A/S
JPMCB NA For Pacific Assets Trust Plc
19. KAF Nominees (Tempatan) Sdn. Bhd. 1,147,012 0.55
Bernam Nominees (Tempatan) Sdn Bhd for
Jendarata Bernam Provident Fund
Amanah Saham Malaysia 3
21. Citigroup Nominees (Tempatan) Sdn Bhd 933,500 0.45
Employees Provident Fund Board (Aberdeen)
22. Mr. Ho Dua Tiam 707,400 0.34
23. KAF Nominees (Tempatan) Sdn. Bhd. 675,000 0.32
United Plantations Berhad Education And Welfare Fund
24. Amanahraya Trustees Berhad 662,200 0.32
Public Islamic Select Treasures Fund
25. Citigroup Nominees (Asing) Sdn Bhd 647,272 0.31
Exempt An for Citibank N.A (Nordea DK/CL)
26. Citigroup Nominees (Asing) Sdn Bhd 598,746 0.29
Exempt An For UBS Switzerland AG (Clients Assets)
27. Mr. Martin Bek-Nielsen 552,389 0.27
28. M & A Nominee (Tempatan) Sdn Bhd 501,200 0.24
Jendarata Bernam Provident Fund
29. Maybank Nominees (Tempatan) Sdn Bhd 450,000 0.22
MTrustee Berhad for Tenaga Nasional Berhad Retirement Benefit Trust
Fund (FM-Aberdeen) (419500)
30. KAF Nominees (Tempatan) Sdn. Bhd. 448,000 0.22
United Plantations Workers Benevolent Retirement Scheme
184,180,061 88.64
* calculated based on 207,792,492 shares which do not include 341,774 treasury shares
237
Comparative Statistics - 10 Years
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Year ended 31 December RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s RM’000’s
Balance Sheet Analysis
Issued Capital 390,054 390,054 208,134 208,134 208,134 208,134 208,134 208,134 208,134 208,134
Reserve 2,191,035 2,133,871 2,154,088 2,027,264 1,916,377 1,985,150 1,942,594 1,788,252 1,563,935 1,430,011
Non-Controlling Interests 7,828 6,893 5,344 3,158 2,417 1,076 420 207 505 125
Funds Employed 2,588,917 2,530,818 2,367,566 2,238,556 2,126,928 2,194,360 2,151,148 1,996,593 1,772,574 1,638,270
Property, Plant and Equipment 1,493,021 1,474,059 1,419,373 1,361,608 1,320,082 1,298,495 1,296,787 1,280,031 1,229,419 1,168,201
Land Use Rights 38,105 34,115 36,192 33,890 32,042 31,110 34,071 31,763 30,794 31,173
Other Non-Current Assets 31,251 36,890 1,782 6,496 21,147 17,114 9,829 7,811 9,600 10,603
Current Assets 1,356,012 1,304,697 1,186,289 1,074,585 960,481 1,049,281 1,030,654 880,664 736,347 627,011
Total Assets 2,918,389 2,849,761 2,643,636 2,476,579 2,333,752 2,396,000 2,371,341 2,200,269 2,006,160 1,836,988
Less: Liabilities 329,472 318,943 276,070 238,023 206,824 201,640 220,193 203,676 233,586 198,718
Net Assets Employed 2,588,917 2,530,818 2,367,566 2,238,556 2,126,928 2,194,360 2,151,148 1,996,593 1,772,574 1,638,270
Other Data
Profit Before Tax 490,872 503,970 417,935 375,997 355,604 340,476 454,239 491,541 349,460 372,797
Tax 116,772 109,288 87,128 83,566 76,233 87,989 111,688 117,955 84,753 91,913
Net Profit 374,100 394,682 330,807 292,431 279,371 252,487 342,551 373,586 264,707 280,884
Non-Controlling Interests (1,683) (1,702) (1,319) (881) (1,341) (656) (310) 365 (400) 591
Profit attributable to equity owners
of the Parent 372,417 392,980 329,488 291,550 278,030 251,831 342,241 373,951 264,307 281,475
Earnings Per Share (in sen) 179.00 189.00 158.56 141.00 134.00 121.00 165.00 180.00 127.00 134.95
Net Dividend Rate
(Ordinary Share)
- Interim and Final 140.00% 150.00% 115.00% 90.00% 165.00% 93.87% 93.75% 90.00% 67.50% 52.50%
Share Prices On
The Bursa Malaysia Securities Berhad
Highest 29.10 28.98 28.44 28.00 29.50 33.26 28.00 21.16 17.70 14.00
Lowest 25.00 26.82 24.62 23.38 22.96 24.70 19.16 16.00 13.32 9.70
Production -Malaysia
Palm Oil - own - Tonnes 168,680 158,060 134,999 151,988 144,162 146,962 161,407 165,408 164,066 198,883
Palm Kernel - own - Tonnes 36,789 35,373 29,631 34,256 33,885 35,118 40,331 42,163 42,522 53,134
Coconuts - Nuts ('000) 71,423 75,252 86,052 77,501 68,424 74,678 74,110 71,763 83,331 75,541
FFB Yield per hectare - Tonnes 26.67 25.46 21.11 24.24 22.97 22.42 25.05 25.16 24.61 29.05
CPO Yield per hectare - Tonnes 5.73 5.34 4.64 5.32 5.09 4.95 5.48 5.47 5.28 6.31
Palm Oil extraction rate -% 21.47 20.97 21.97 21.95 22.17 22.07 21.86 21.73 21.46 21.73
Palm Kernel extraction rate - % 4.68 4.69 4.82 4.95 5.21 5.27 5.46 5.54 5.56 5.81
Coconuts Yield per hectare - Nuts 23,154 25,345 30,305 27,747 25,056 26,858 26,077 24,771 28,135 22,616
Cost Of Production - Malaysia ** RM RM RM RM RM RM RM RM RM RM
Palm Oil - Per Tonne 1,188 1,197 1,221 1,032 1,064 1,006 894 817 768 678
Palm Kernel - Per Tonne 388 386 365 318 316 298 270 233 213 170
Average Sales Price
Palm Oil - Per Tonne 2,606 2,578 2,424 2,163 2,353 2,702 3,017 3,050 2,408 2,242
Palm Kernel - Per Tonne 1,992 2,650 2,138 1,493 1,774 1,283 1,584 2,168 1,532 1,031
Production -Indonesia *
Palm Oil - own - Tonnes 51,049 47,459 44,143 48,159 41,440 36,529 35,182 24,747 5,435 -
Palm Kernel - own - Tonnes 9,071 8,387 7,948 8,266 7,044 6,793 6,679 4,277 830 -
FFB Yield per hectare - Tonnes 24.69 22.56 19.53 20.02 16.86 15.84 17.50 16.22 14.98 -
CPO Yield per hectare - Tonnes 5.66 5.25 4.81 5.03 4.24 3.88 4.27 3.84 2.12 -
Palm Oil extraction rate -% 22.92 23.29 24.62 25.15 25.17 24.41 24.38 23.80 21.23 -
Palm Kernel extraction rate - % 4.08 4.12 4.43 4.32 4.28 4.54 4.63 4.14 3.24 -
Cost Of Production - Indonesia RM RM RM RM RM RM RM RM RM
Palm Oil - Per Tonne 1,253 1,471 1,570 1,374 1,319 1,396 1,434 1,862 1,983 -
Palm Kernel - Per Tonne 430 517 479 496 521 509 516 413 828 -
Average Sales Price
Palm Oil - Per Tonne 2,003 2,572 2,316 2,002 2,301 2,179 2,381 2,553 2,755 -
Palm Kernel - Per Tonne 1,356 2,049 1,899 1,198 1,305 997 1,032 1,247 2,000 -
Notes:
* Production of CPO and PK commenced in July 2010. ** Cost of production figures include depreciation.
238
Group Properties As At 31 December 2018
Pro p e rti e s T e nu re Are a In D e s cri p ti o n Age In Ne t T a ngi b l e
He cta re s Ye a rs As s e t Va l u e
RM ' 000
Jendarata Estate Leasehold Registered Office - 1,369 sq.m. 54 2,382
36009 Teluk Intan Expiring on: Research Station - 1,070 sq.m. 53 1,473
Perak Darul Ridzuan 15.01.2062 594.50 Oil Palm & Coconut Estate 114,469
07.06.2104 611.65 Palm Oil Mill 10,032 84 6,323
07.06.2104 34.81 Biomass Plant sq.m. 13 7,059
20.11.2067 982.19
22.08.2068 149.67
Yr to Yr 33.62
Freehold 3,929.19
Kuala Bernam Estate Freehold 829.60 Coconut Estate 11,771
Batu 18, Jalan Bagan Datoh
36300 Sungai Sumun
Perak Darul Ridzuan
Sungei Bernam Estate Leasehold Coconut Estate 44 29,553
Sungai Ayer Tawar Expiring on:
45200 Sabak Bernam 28-03-2056 1.32
Selangor Darul Ehsan Freehold 2,274.76
Ulu Bernam Estate Freehold 3,102.28 Oil Palm Estate 58,660
36500 Ulu Bernam Yr to Yr 95.31 Optimill/Biogass/Unifuji - 545,100 sq.m. 1 32,052
Perak Darul Ridzuan
Changkat Mentri Estate Leasehold Oil Palm Estate 16,721
36500 Ulu Bernam Expiring on:
Perak Darul Ridzuan 26.11.2067 1,538.61
01-10-2081 162.94
HMS 1.21
HMS 105.50
Freehold 742.27
Ulu Basir Estate Leasehold Oil Palm Estate 51,010
36500 Ulu Bernam Expiring on: Palm Oil Mill - 6,352 sq.m. 29 747
Perak Darul Ridzuan 26-11-2067 11.40
20-01-2087 2,468.00
08.12.2099 163.30
Yr to Yr 129.48
Freehold 1,218.62
Sungei Erong Estate Leasehold Oil Palm Estate 40,582
36500 Ulu Bernam Expiring on:
Perak Darul Ridzuan 02.11.2064 53.89
08-04-2033 809.37
Freehold 2756.74
Sungei Chawang Estate Freehold 3,280.76 Oil Palm Estate 42,645
36500 Ulu Bernam
Perak Darul Ridzuan
Seri Pelangi Estate Leasehold Oil Palm Estate 10,319
Batu 11 3/4 Expiring on:
Jalan Bidor 15.06.2068 1,418.90
36000 Teluk Intan Freehold 2.82
Perak Darul Ridzuan
Lima Blas Estate Freehold 2,891.89 Oil Palm Estate 140,078
Lot 1899, Mukim Ulu Bernam
35800, Hulu Selangor, Selangor.
UIE Leasehold Oil Palm Estate 411,014
Pantai Remis Expiring on: Palm Oil Mill - 6,148 sq.m. 27 1,263
Perak Darul Ridzuan 23.12.2103 10,359.26
Freehold 9.94
Unitata Berhad Freehold 18.45 Palm Oil and
36009 Teluk Intan Palm Kernel Oil Buildings 44 30,405
Perak Darul Ridzuan Refinery Complex
Bernam Bakery Freehold 0.45 Bakery 34 193
36009 Teluk Intan
Perak Darul Ridzuan
Butterworth Leasehold Bulking & Storage &
Bulking Installation Expiring on: Rigging Facilities
4536 Deep Water Wharf 31-08-2019 0.84 46 144
12100 Butterworth
PT Surya Sawit Sejati Leasehold Oil Palm Estate 161,338
Pengakalan Bun, Central Expiring on: Palm Oil Mill - 90,000 sq.m. 9 6,682
Kalimantan, Indonesia 24.09.2040 2,508.47
** 16,157.29
Notes :
* Estate Includes Land, Pre-cropping Cost and Buildings ** awaiting issue of lease
239
Group's Plantation Properties As At 31 December 2018
Kuala Sungei Ulu Changkat Ulu Sungei Sungei Seri Lima PT Surya
Jendarata Bernam Bernam Bernam Mentri Basir Erong Chawang Pelangi Blas UIE Sawit Sejati
Hect. Hect. Hect. Hect. Hect. Hect. Hect. Hect. Hect. Hect. Hect. Hect. Total
OIL PALM :
Mature 4,412 2,081 2,270 3,427 3,500 3,147 1,016 2,590 7,120 9,098 38,661
Immature-Planted 2016 192 21 311 87 799 1,410
Immature-Planted 2017 267 564 8 6 470 1,315
Immature-Planted 2018 415 395 94 321 155 569 1,949
Sub-Total 5,286 3,061 2,364 3,738 3,508 3,240 1,337 2,745 8,958 9,098 43,335
COCONUT :
Mature 107 811 2,167 3,085

Immature-Planted 2015 52 52
Immature-Planted 2016 161 274 435
Immature-Planted 2017 299 36 250 585
Immature-Planted 2018 131 265 396
Sub-Total 698 811 2,255 789 4,553

OTHER AREAS:
Other Crops 15 15
Plasma Areas 1,259 1,259
Conservation (Jungle areas,
shrub land, swamps &
wetlands) 12 99 91 8,239 8,441
Buildings,roads,drains,
air-strip,nurseries,
toddy tapping areas,
railway, OPTIMILL etc. 337 19 21 137 175 253 112 41 85 48 531 70 1,829
TOTAL 6,336 830 2,276 3,198 2,551 3,991 3,620 3,281 1,422 2,892 10,369 18,666 59,432
Oil Palm
%
Age in years Hectares Under crop
4-5 6,661 15
6-8 7,520 17
9 - 18 20,496 48
19 and above 3,984 9
Mature 38,661 89
Immature 4,674 11
Total 43,335 100
240
Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN that the 98th Annual General Meeting of the Company will be
held at Jendarata Estate, 36009 Teluk Intan, Perak Darul Ridzuan, Malaysia on Tuesday, 23
April 2019 at 10.00 a.m. for the purpose of considering the following business:-
Ordinary
Resolutions
1. To receive and consider the financial statements for the year ended 31 1
December 2018 together with the Reports of the Directors and the Auditors
thereon.
2. To approve the payment of a Final Single-tier dividend of 20sen and a 2

Special Single-tier dividend of 90sen for the year ended 31 December 2018.
3. To approve Directors’ fees (inclusive of Board Committees’ fees) of 3

RM1,117,290 for the financial year ended 31 December 2018.
4. To approve the Directors' benefits (other than Directors' fees) of RM106,500 4

for the financial year ended 31 December 2018.
5. To re-elect as Director, Ybhg. Tan Sri Datuk Dr. Johari bin Mat who retires 5
by rotation pursuant to Article 107 of the Company’s Constitution.
6. To re-elect as Director,Ybhg. Dato’ Carl Bek-Nielsen who retires by rotation 6

pursuant to Article 107 of the Company’s Constitution.
7. To re-elect as Director, Mr R. Nadarajan who retires by rotation pursuant to 7

Article 107 of the Company’s Constitution.
8. To re-elect as Director, Mr. Jorgen Balle who retires pursuant to Article 100 8
of the Company’s Constitution.
9. To re-appoint Messrs. Ernst & Young as auditors of the Company for the 9
year 2019 and to authorize the Directors to fix their remuneration.
As Special Business
To consider and if thought fit, to pass the following ordinary resolutions:
(i) Proposed Continuation in Office as Independent Non-Executive

Directors
241
10. “That Ybhg. Tan Sri Datuk Dr. Johari bin Mat having served as Independent 10
Non-Executive Director for a cumulative term of more than 9 years,
continue to act as Independent Non-Executive Director of the Company.”
11. “That Mr. Ahmad Riza Basir having served as Independent Non-Executive 11
Director for a cumulative term of more than 9 years, continue to act as
Independent Non-Executive Director of the Company.”
12. “That Y. Hormat Dato’ Jeremy Derek Campbell Diamond having served 12
as Independent Non-Executive Director for a cumulative term of more
than 9 years, continue to act as Independent Non-Executive Director of
the Company.”
(ii) Proposed Renewal of Authority for Purchase of Own Shares
13. “THAT, subject to the Companies Act, 2016 (“the Act”)(as may be amended, 13
modified or re-enacted from time to time), the Company’s Constitution,
the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(“Bursa Malaysia”) and approvals of all relevant governmental and/or
regulatory authorities, where applicable, the Company be and is hereby
authorized to purchase and/or hold such amount of ordinary shares in
the Company ("Proposed Share Buy-Back") as may be determined by the
Directors of the Company from time to time and upon such terms and
conditions as the Directors may deem fit and expedient in the interest
of the Company provided that the aggregate number of ordinary shares
purchased and/or held pursuant to this resolution shall not exceed ten
per centum (10%) of the total number of issued shares of the Company at
any given point in time and an amount of funds not exceeding the total
retained profits of the Company based on the audited financial statements
for the financial year ended 31 December 2018 be utilized by the
Company for the Proposed Share Buy-Back AND THAT at the discretion
of the Directors of the Company, the ordinary shares of the Company to
be purchased may be cancelled and/or retained as treasury shares and
subsequently distributed as dividends, transfer the shares for the purposes
of or under an employees share scheme that has been approved by the
shareholders, transfer the shares as purchase consideration or resold on
Bursa Malaysia or be cancelled AND THAT the Directors of the Company
be and are hereby empowered generally to do all acts and things to give
effect to the Proposed Share Buy-Back AND THAT such authority shall
commence immediately upon passing of this ordinary resolution until:
(i) the conclusion of the next Annual General Meeting of the Company
(“AGM”) in 2020 at which time it will lapse, unless by a resolution
passed at the meeting, the authority is renewed, either unconditionally
or subject to conditions; or
242
(ii) the expiration of the period within which the next AGM is required to
be held pursuant to Section 340(2) of the Act (but shall not extend to
such extension as may be allowed pursuant to Section 340(4) of the
Act); or
(iii) revoked or varied by resolution passed by the shareholders in general

meeting, whichever is earlier; but not so as to prejudice the completion
of purchase(s) by the Company before the aforesaid date and in any
event, in accordance with the provisions in the guidelines issued by
Bursa Malaysia and/or by any other relevant authorities.”
(iii) Authority for Directors to issue shares pursuant to Sections 75 and 76

of the Companies Act, 2016
14. “THAT, pursuant to Sections 75 and 76 of the Companies Act, 2016 and 14
subject always to the approval of the relevant authorities, the Directors
be and are hereby authorised to issue shares in the Company from time
to time and upon such terms and conditions and for such purposes as
the Directors may deem fit provided that the aggregate number of shares
issued pursuant to this resolution does not exceed 10% of the total
number of issued shares of the Company for the time being AND THAT
the Directors be and are also authorised to obtain the approval for the
listing of and quotation for the additional shares so issued on the Bursa
Malaysia Securities Berhad and that such authority shall continue in force
until the conclusion of the next annual general meeting of the Company.”
243
Notice on Entitlement and payment of Final Dividend and Special Dividend
NOTICE IS HEREBY GIVEN THAT the Final Single-tier dividend of 20sen and a
Special Single-tier dividend of 90sen, if approved at the 98th Annual General Meeting
will be paid on 15 May 2019 to shareholders whose names appear in the Record of
Depositors and the Register of Members at the close of business on 29 April 2019.
A Depositor shall qualify for entitlement only in respect of :-
(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on
29 April 2019 in respect of transfers; and
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis
according to the Rules of Bursa Malaysia Securities Berhad.
By Order of the Board
NG ENG HO
Company Secretary
Jendarata Estate,
36009 Teluk Intan,
Malaysia
25 February 2019
244
Notes
1. A member of the Company entitled to attend and vote at the meeting

is entitled to appoint a proxy or proxies to vote in his stead other than an
exempt authorized nominee who may appoint multiple proxies in respect of
each Omnibus account held. A proxy need not be a member of the Company.
If you wish to appoint as your proxy someone other than the Chairman or
Vice Chairman of the meeting, cross out the words "The Chairman" or "Vice
Chairman" of the meeting and write on the lines the full name and address of
your proxy.
2. The instrument appointing a proxy must be deposited at the Registered Office

of the Company at Jendarata Estate, 36009 Teluk Intan, Perak Darul Ridzuan,
Malaysia not less than 48 hours before the time set for the meeting. The number
of shares to be represented by the proxy should be stated in the proxy form.
3. Where this Form of Proxy is executed by a corporation, it must be either under

seal or under the hand of any officer or attorney duly authorised.
4. A proxy may vote or abstain from voting as he thinks fit on a specified resolution,
if no indication is given on the proxy form by the member appointing the proxy.
Voting on all resolutions to be proposed at the AGM will be by way of a poll.
5. In the case of joint shareholders the proxy form signed by the first named
registered shareholder on the register shall be accepted to the exclusion of the
other registered shareholder(s). If voting is in person(s) the vote of the first
shareholder who tenders the vote shall be taken.
6. For shares listed on Bursa Malaysia Securities Berhad, only a depositor whose
name appears on the Record of Depositors as at 17 April 2019 shall be entitled
to attend the said meeting or appoint a proxy or proxies to attend and/or vote
on his/her behalf.
245
Notes on the Special Business
For Ordinary Resolutions 10 - 12 Proposed Continuation in office as Independent Non-

Executive Directors
The Nomination Committee and the Board has assessed the independence of the Directors
who have served as Independent Non-Executive Directors of the Company for a cumulative
term of more than 9 years and recommend them to continue to act as Independent Non-
Executive Directors of the Company.

His vast experience and diversified background has contributed significantly to the performance
monitoring and enhancement of good corporate governance. In his capacity as Chairman of
the Company for the past 16 years, he has provided leadership, independent views, objective
assessments and opinions. He has been with the Company for more than 17 years and is
familiar with the Company’s business operations.

A lawyer by training, his experience, expertise and independent judgment has contributed
to the effective discharging of his duties. He has devoted sufficient time and attention to his
professional obligations for informed and balanced decision making as an Independent Non-
Executive Director. He has been with the Company for more than 18 years and is familiar with
the Company’s business operations.
Y. Hormat Dato’ Jeremy Derek Campbell Diamond

A planter by profession, his vast knowledge acquired during his tenure within the plantation
industry has enabled him to provide the Board with a diverse set of experience and expertise.
His role as Chairman of the Audit Committee is one that he has discharged with due care and
diligence. He has carried out his professional duties as an Independent Non-Executive Director
in the best interest of the Company. He has been with the Company for more than 17 years
and is familiar with the Company’s business operations.
For Ordinary Resolution 13 - Please refer to explanatory information in the Circular to

Shareholders dated 25 February 2019.
For Ordinary Resolution 14 - The Board continues to consider strategic opportunities to broaden
the earnings potential of the Company and this may involve equity deals which may require
the Company to issue new shares. If passed, the Shareholders’ Mandate to grant authority for
Directors to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016 will provide
flexibility to the Directors to undertake any possible fund raising activities, including but not
limited to further placing of shares for the funding of the Company’s future investment projects,
working capital and/ or acquisitions, by issuance of shares at any time up to an aggregate
amount not exceeding 10% of the total number of issued shares of the Company for the time
being for such purposes as the Directors consider would be in the best interest of the Company.
The Company did not utilize the Shareholders’ Mandate that was approved at the 97th Annual
General Meeting. This authority, unless revoked or varied by the Company at a general meeting,
will expire at the conclusion of the next annual general meeting of the company.
246
98TH ANNUAL GENERAL MEETING
Venue : Borge Bek-Nielsen Auditorium (UPRD)
Date : 23 April 2019
Time : 10:00 am
PLUS HIGHWAY (AH2) PLUS HIGHWAY (AH2) FROM

FROM PENANG/IPOH FROM KUALA LUMPUR KLANG
KUALA SELANGOR
BIDOR TOWN SEKINCHAN
BIDOR SABAK BERNAM
KFC TELUK INTAN
TELUK INTAN For GPS/Map NavigaƟon
P. PANGKOR
LUMUT to UP Main Entrance
(EXIT TO 130)
(EXIT TO 58) scan YR code on the leŌ or
use coordinates as beloǁ
3.9183, 100.94927 BERNAM
SABAK BERNAM BAKERY
TO
TELUK INTAN BAGAN DATUK RESEARCH
SITIAWAN AGM
( у 41 KM ) DEPARTMENT UNITATA
LUMUT (UPRD)
(EXIT TO A147)
FROM UNITED TO
TELUK INTAN PLANTATIONS HUTAN
( у 14 KM ) MELINTANG
PUSPAKOM SMK SAINS
TELUK INTAN TO SK SG BULOH SJK(C) TO SIMPANG

TOWN SITIAWAN YEONG SENG BAGAN EMPAT
LUMUT DATUK TOWN
2019
FINANCIAL DEC
FINANCIAL CALENDAR YEAR END 31 2018
ANNOUNCEMENT FIRST SECOND THIRD

OF ANNUAL REPORT 2018 QUARTER QUARTER QUARTER
2019
FEBRUARY APRIL JULY NOVEMBER
ANNOUNCEMENTS
OF RESULTS 25 23 29 11
NOTICE OF ANNUAL ANNUAL GENERAL

2019 GENERAL MEETING MEETING
PUBLISHED FEBRUARY APRIL

ANNUAL REPORT
AND FINANCIAL
STATEMENTS
25 23
ENTITLEMENT PAYMENT
ANNOUNCEMENT
DATE DATE
2018
NOVEMBER NOVEMBER DECEMBER
INTERIM
DIVIDEND 12 27 12
ENTITLEMENT PAYMENT
ANNOUNCEMENT
DATE DATE (TENTATIVE)
2019
FEBRUARY APRIL MAY
FINAL
DIVIDEND 25 29 15
Subsidiary Companies
Oil Palm Estate
Coconut Estate
Palm Oil Mill
Refinery
Bakery
Biogas Plant
Unifuji Sdn Bhd

Planted Area (Hectares) 31 December 2018
Palm oil mill
Biogas plant
UIE 8,958 789 - 9,747
Jendarata 5,286 698 15 5,999
Kuala Bernam - 811 - 811
Sungei Bernam - 2,255 - 2,255
Ulu Bernam 3,061 - - 3,061
Changkat Mentri 2,364 - - 2,364
Ulu Basir 3,738 - - 3,738
Sungei Erong 3,508 - - 3,508
Sungei Chawang 3,240 - - 3,240
Seri Pelangi 1,337 - - 1,337
Lima Blas 2,745 - - 2,745
PT SSS 9,098 - - 9,098
TOTAL (Hectares) 43,335 4,553 15 47,903
Location of Company Owned Mills

No. Name of Mill Location Latitude Longitude
1 Jendarata N 3°51’14” E 100°58’06”

2 Ulu Basir N 3°43’28” E 101°15’21”
3 Ulu Bernam Optimill N 3°46’19” E 101°13’14”
4 UIE N 4°26’53” E 100°43’11”
5 PT. SSS S 2°35’24” E 111°46’16”
Ulu Bernam Optimill

A pair of Buffy Fish Owl (Ketupa ketupu) with colourful plumage perching atop a vigorous palm tree in Jendarata.

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ANNUAL REPORT

Sustainable Palm Oil for the World

We strive towards being recognized as second to none within the plantation

1,104 kg CO2 and green house gases

Brief History and Principal Business Activity 2

UP’s Palm Oil Business Activities 3

Management Discussion and Analysis 14 - 28

Sustainability Report 2018 29 - 141

Corporate Governance Overview Statement 142 - 147

Statement on Directors’ Responsibility 148

Statement on Risk Management and Internal Control 149 - 151

Audit Committee Report 151 - 154

Nomination Committee Report 155 - 156

Additional Disclosures 157

Financial Statements 159 - 235

Shareholders Information 236 - 237

Comparative Statistics 238

All Properties of the Group 239

Group’s Plantation Properties 240

Notice of Annual General Meeting 241 - 246

Founded on Danish and Malaysian Expertise and Resources, United Plantations

UP possesses considerable know-how in plant breeding, agronomy and tissue

Its subsidiary companies are engaged in several downstream activities such as

Through its focus on Corporate Social Responsibility and Creating Shared

Pre & Main Nursery

External Production Transport Own Production

External Plantations UP Group

Palm Oil Mill Effluent (POME) Shells, Fibre & EFB

Biogas Plant Recycled Recycled Bio-Mass Boiler

Palm Kernels Palm Kernel Crushing Plant

Crude Palm Palm Kernel

Specialty fats Animal Feed

Internal* : Within the UP Group.

Country of Incorporation Malaysia

Company Secretary Mr. Ng Eng Ho

Registered Office and United Plantations Berhad

Auditors Ernst & Young

Principal Bankers Malaysia

Stock Exchange Listing Malaysia

Executive Committee (EXCOM)

Dato' Carl Bek-Nielsen

Martin Bek-Nielsen Loh Hang Pai

D. Jeevan Dharmapalan Lee Kian Wei

Ridzuan Bin Md. Isa Patrick Kanan R. Siva Subramaniam S. Kumaresan

L. Makesyarang Khor Boon Wah

Lim Chin Ching Appala Naidu Marie Wong Foo Hin

Ir V. Renganathan G. Padmanathan N. Saravanaganes Goh Kheng Wee

Palm Oil Refining and Others

Senthamarai Selvi Suganthi Krishnan Soo Yook Kee Muhammad Silmi

Jayarama Reddy Kapil Punj

Plantations United Plantations Berhad (Malaysia)

Issued Capital (no. shares) 208m

PT Surya Sawit Sejati (Indonesia)

Unitata Berhad (Malaysia)

Bernam Agencies Sdn. Bhd.

Butterworth Bulking Installation

Bernam Advisory Services Sdn. Bhd.

Berta Services Sdn. Bhd.

General Shareholding Structure

25.10% 49.25% 25.65%