Contents 05 Three-Year Group Highlights 10 Corporate Structure 06 Chairman’s Statement 11 Areas of Operation 08 Board Members 12 Operational Review 09 Management Team 28 Activities 32 Financial Statements
VISION RURAL COMMUNITIES PARTICIPATING IN SALCRA DEVELOPMENT AREAS ARE ENJOYING HIGH QUALITY OF LIFE MISSION TO CONTINUE TO IMPROVE THE QUALITY OF LIFE OF OUR LAND DEVELOPMENT PARTICIPANTS BY ESTABLISHING VIABLE BUSINESS VENTURES AND SOCIAL PROGRAMMES IN HARMONY WITH THE SARAWAK GOVERNMENT’S ASPIRATIONS AND VISIONS MOTTO PERFORMANCE WITH QUALITY 02 SALCRA 2022 ANNUAL REPORT
TO RAISE PRODUCTIVITY AND OPTIMUM UTILISATION OF NCR LAND BY DEVELOPING AND MANAGING THE DEVELOPMENT OF SUCH LAND WHICH ARE HITHERTO UNDERUTILISED, UNUTILISED OR UNDEVELOPED; TO PROVIDE A REASONABLE STANDARD OF LIVING TO THE RURAL POPULATION THROUGH STABLE AND IMPROVED LEVEL OF INCOME ON SUSTAINABLE BASIS; TO PROVIDE EMPLOYMENT AND BUSINESS OPPORTUNITIES TO RURAL COMMUNITIES; TO ASSIST IN ISSUANCE OF LAND TITLE TO DEVELOPMENT PARTICIPANTS. REHABILITATE LAND FOR AGRICULTURE PURPOSES; INITIATE AND CARRY OUT PROJECTS OR SCHEMES FOR DEVELOPMENT IMPROVEMENT OF AGRICULTURE; PROMOTE AND UNDERTAKE AGRICULTURE DEVELOPMENT OR PROJECTS IN THE STATE; DEVELOP FOR AGRICULTURE ON ITS OWN OR IN AMALGAMATION WITH OTHERS IN AREAS DECLARES AS DEVELOPMENT AREA. SALCRA 2017 ANNUAL REPORT PROFESSIONALISM IN OUR WORK LOYALTY TO SALCRA AND EACH OTHER INTEGRITY IN OUR RELATIONSHIP TRUSTWORTHY IN OUR DEALINGS AND RESPONSIBILITY RESPECTING OUR CLIENTS, CUSTOMERS AND EACH OTHER CARING FOR EACH OTHER, OUR ASSETS AND ENVIRONMENT TEAMWORK IN CARRYING OUT OUR ROLES TO ACHIEVE THE GOALS COMMITMENT TO OUR OBJECTIVES, VALUES AND BELIEFS TOTAL WELLNESS IN PHYSICAL, MENTAL AND SPIRITUAL SENSE OF BELONGING AS PART OF THE BIG FAMILY OF SALCRA RECOGNITION TO OUR EFFORT AND ACHIEVEMENT SALCRA 2022 ANNUAL REPORT 03 • • • • • • • • • • OBJECTIVES CORE VALUES • • • • FUNCTIONS • • • • • OPERATING VALUES
KEY PERFORMANCE HIGHLIGHTS 04 SALCRA 2022 ANNUAL REPORT Participants Revenue RM297.21 million Profit Before Tax [Group] RM40.77 million Revenue [Group] RM1,639.03 million Planted Hectarage 51,289 hectares Nett Proceeds Payment RM75.00 million Fresh Fruit Bunch Production 352,306 metric tonnes Participant Nett Surplus RM55.28 million
KEY PERFORMANCE HIGHLIGHTS SALCRA 2022 ANNUAL REPORT 05 THREE-YEAR GROUP HIGHLIGHTS 2020 2021 2022 FINANCIAL RESULTS (GROUP) RM’000 Turnover 731,074 1,186,844 1,639,028 Profit Before Tax 5,831 50,568 40,774 Profit After Tax 3,933 48,924 9,001 2020 2021 2022 PARTICIPANTS ACCOUNT RM’000 Participants Revenue 192,311 261,278 297,212 Participants Estates Operating Surplus 56,019 129,544 139,397 Participants Nett Proceeds Payment 33,680 60,770 75,000 2020 2021 2022 PLANTED OIL PALM HECTARAGE Ha Mature 30,295 25,466 25,653 Immature 24,944 25,874 25,636 Total 55,239 51,340 51,289 2020 2021 2022 PHYSICAL PERFORMANCE Total Crop Processed (tonnes) 1,014,877 1,020,844 1,314,577 Crude Palm Oil (Produced) (tonnes) 203,198 208,293 257,205 Palm Kernels (Produced) (tonnes) 45,589 47,957 57,608 Oil Extraction Rate (%) 20.02 20.40 19.57 Kernel Extraction Rate (%) 4.49 4.70 4.38 Crude Palm Oil Average Selling Price (RM/tonne) 2,702 4,377 4,913 Palm Kernel Average Selling Price (RM/tonne) 1,527 2,809 2,880 SALCRA 2022 ANNUAL REPORT 05
CHAIRMAN’S STATEMENT OPENING REMARKS On behalf of the Board Members, I am glad to present the Annual Report and Audited Financial Statements of Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) and its Group of Companies for the financial year ended 31st December 2022. Following my appointment on 18th May 2022 as Chairman, I am looking forward to work together with the Board and Management on an exciting and new journey. I would also like to welcome our new Board Members to the Organisation. Being a new Chairman for this esteemed Statutory Body, (SALCRA) brings forth a significant responsibility for me. Taking the lead, I acknowlege the substaintial role entrusted to me and the importance of our industry in today’s global landscape. With a legacy of excellence in the oil palm sector for the past 40 over years, I am determined to upholding and advancing the values and principles that have brought us success, including sustainable practices, innovation, quality performance and a strong focus on environmental stewardship. I firmly believe in fostering a culture of collaboration, transparency and accountability within our Organisation. We will work together with dedication and a shared vision towards a consistent standards of excellence. Our stakeholders, from our dedicated workforce to supportive land development participants in which we operate, are at the heart of our success. It is my unwavering belief to nurturing these relationships and ensuring that our growth is inclusive and benefits all. FINANCIAL PERFORMANCE I am delighted to announce that Sarawak Land Consolidation and Rehabilitation Authority (“SALCRA”) recorded stellar results for the financial year ended 31st December 2022 (“FY2022”). The Authority recorded a total of RM1.64 billion in consolidated turnover for FY2022, reflecting 37.82 percent growth from the RM1.19 billion recorded the year before. The Group’s Profit Before Tax declined slightly by 19.38 percent to RM40.77 million in FY2022 from RM50.57 million in FY2021. Our participants’ estate operating surplus rose 7.61 percent to RM139.40 million in FY2022 from RM129.54 million in FY2021. The Board of Directors of the Authority declared a total Nett Proceeds of RM75.00 million to SALCRA’s land development participants, bringing the cumulative total Nett Proceeds paid to the land development participants since inception to RM1.10 billion. PALM OIL MARKET PERFORMANCE In 2022, the Malaysian palm oil industry experienced a significant surge in prices, reaching an all-time high. Total export earnings of oil palm products grew mainly due to better palm product prices. The Crude Palm Oil (CPO) average price was higher by 15.4 percent to RM5,087.50 per tonne in 2022 from RM4,407.00 per tonne in 2021. The highest price was in May at RM6,873.00 per tonne before falling by about 46 percent in the last quarter of 2022. The Authority recorded average Palm Kernel (PK) price of RM3,118.00 per tonne (2021: RM2,773.00 per tonne). Meanwhile, the price of production inputs such as fertiliser, diesel and input materials had risen sharply, driven in part by the conflict in Ukraine. The record high CPO prices were a saving grace to the industry, including SALCRA. 06 SALCRA 2022 ANNUAL REPORT
CHAIRMAN’S STATEMENT SALCRA 2022 ANNUAL REPORT 07 OIL PALM ESTATES PERFORMANCE As at 31st December 2022, the Authority had a total nett planted area of 51,289 hectares (2021: 51,340 hectares), a slight drop by 0.1 percent, due to non-replanting of certain areas. Despite the slight drop of total nett planted area, the production of Fresh Fruit Bunches (FFB) rose by 7.45 percent to 352,306 metric tonnes in 2022 compared to 327,871 metric tonnes in previous year. This partly contributes to yield improvement by 6.68 percent to 13.73 metric tonnes per hectare in 2022 (2021: 12.87 metric tonnes per hectare). PALM OIL MILLS PERFORMANCE The Authority’s milling operations are undertaken by five mills with a combined milling capacity of 270 metric tonnes per hour. The Authority’s mills, which include Bau Palm Oil Mill, Serian Palm Oil Mill, Saratok Palm Oil Mill, Lubok Antu Palm Oil Mill 1, and Lubok Antu Palm Oil Mill 2, received a total of 1.31 million tonnes of FFB, an increase of 29 percent as compared to 1.02 million tonnes in 2021. In addition, the production volumes of CPO in 2022 increased by 23 percent from 2021, resulting in a total of 257,205 metric tonnes. The Palm Kernel (PK) production also rose by 20 percent to 57,608 metric tonnes compared to previous year’s performance which recorded only 47,957 metric tonnes. This year, our average Oil Extraction Rate (OER) is recorded at 19.57 percent. The OER is slightly below the National average of 19.70 percent, but higher than the Sarawak average of 19.47 percent. Whereas for the Kernel Extraction Rate (KER), our average rate is 4.38%, which is between the National and Sarawak average of 4.86% and 4.35% respectively. OUTLOOK The outlook for the palm oil industry remains influenced by global market dynamics towards the end of the year. Recognising the uncertainties in the year ahead, we will remain committed to responsible and sustainable practices with resilience, dedication and a steadfast commitment to our core values. With continuous achievement in our Fresh Fruit Bunches (FFB) and Crude Palm Oil (CPO) production, I firmly believe SALCRA will build a future that is not only economically prosperous to the staff but also to the community of the area that SALCRA operates. APPRECIATION REMARKS I would like to take this opportunity to express my utmost gratitude and appreciate to Yang Berhormat Datuk Amar Douglas Uggah Embas for his invaluable contribution and impeccable leadership in guiding the Authority for the last three (3) years. On behalf of the Board, I wish to convey my deepest gratitude to our valued land development participants and various stakeholders for their continuous support and confidence in the Authority. I also wish to thank the Management Team and all employees of the Authority for their resilience, diligence, and commitment to our success. I look forward to their continued support as we stride towards a resilient, sustainable and profitable future together. Thank you. YANG BERHORMAT DATO SRI DR STEPHEN RUNDI ANAK UTOM Chairman
08 SALCRA 2022 ANNUAL REPORT BOARD MEMBERS YANG BERBAHAGIA DATO’ RAMLAN BIN HARUN Secretary - General, Ministry of Rural Development, Malaysia YANG BERHORMAT DATUK ROLAND SAGAH WEE INN Minister for Education, Innovation and Talent Development YANG BERHORMAT DATUK DR MALCOLM MUSSEN LAMOH Deputy Minister for International Trade, Industry and Investment YANG BERBAHAGIA DATO SRI DR WAN LIZOZMAN BIN WAN OMAR State Financial Secretary YANG BERHORMAT DATUK DR. PENGUANG MANGGIL Deputy Minister for Public Health, Housing and Local Government (Local Government) YANG BERBAHAGIA DATU EDWIN ANAK ABIT Permanent Secretary, Ministry of Food Industry, Commodity and Regional Development, Sarawak YANG BERBAHAGIA DATU SR ZAIDI BIN HAJI MAHDI Permanent Secretary, Ministry of Natural Resources and Urban Development, Sarawak YANG BERHORMAT DATO SRI DR STEPHEN RUNDI ANAK UTOM Minister for Food Industry, Commodity and Regional Development, Sarawak / Chairman of SALCRA YANG BERUSAHA TUAN LEONARD WILFRED YUSSIN Federal Finance Officer, Sarawak Sarawak Federal Treasury, Ministry of Finance, Malaysia YANG BERBAHAGIA DATUK AMAR MICHAEL MANYIN ANAK JAWONG Advisor in the Office of the Premier of Sarawak (Education)
JOSEPH BLANDOI General Manager SALCRA 2022 ANNUAL REPORT 09 MANAGEMENT TEAM RENTAP TOMMY Chief Operating Officer, Sarawak Fertilizer Sdn. Bhd. GROVER PETER GANI Chief Operating Officer, SALCRA Jaya Sdn. Bhd. MAUREEN TAMIN Technical Services and Engineering Manager SIKIN SENTOK Deputy General Manager ROBERT ENSALI Plantation Production Manager JENNIFER LENDAI KUNDAT General Administration and Quality Manager JACINTA GRALEY Head of Agronomic, Sustainability and Research HENRY DARIS Head of Participants’ Development WILL PAUL BILUN Chief Operating Officer, Palm Oil Mills ALEXANDER WONG Human Resource Manager ADDIE NGU YII EE Financial Controller JEFFERY STEPHEN BETI Plantation Development Manager
10 SALCRA 2022 ANNUAL REPORT CORPORATE STRUCTURE SUBSIDIARY COMPANY OTHER INVESTMENT KOPERASI PERMODALAN SALCRA SARAWAK BERHAD SARAWAK FERTILIZER SDN. BHD. SALCRA 100% BAU PALM OIL MILL SDN. BHD. SALCRA DCF LAKMNS 60% 20% 20% SERIAN PALM OIL MILL SDN. BHD. SALCRA GPB KPSSB 55% 35% 10% SARATOK PALM OIL MILL SDN. BHD. SALCRA WILMAR PLANTATIONS SDN. BHD. LAKMNS DCF 52% 30% 9%9% KUCHING PALM OIL INDUSTRIES SDN. BHD. SALCRA SENARI TA ANN PLANTATION SDN. BHD. PGEO 6%15% 28% 51% Abbreviations: LAKMNS : Lembaga Amanah Kebajikan Masjid Negeri Sarawak DCF : Dayak Cultural Foundation GPB : Genting Plantations Berhad KPSSB : Koperasi Permodalan SALCRA Sarawak Bhd. PGEO : PGEO Group Sdn. Bhd. SALCRA 100% SALCRA JAYA SDN. BHD.
SALCRA 2022 ANNUAL REPORT 11 AREAS OF OPERATION
ESTATES PERFORMANCE SALCRA’s total oil palm nett planted area decreased by 0.1% from 51,340 hectares in 2021 to 51,289 hectares in 2022 due to the non-replanting of certain areas. Total Oil Palm Nett Planted Area 51,289 hectares The distribution of oil palm planted area based on field categories are as follows; 24% 22% 19% 14% 8% 7% 6% 3,837 Due for Replanting 3,594 Old Mature 3,153 Scout Harvesting 7,201 Young Mature 9,968 Immature 11,021 Prime Mature 12,515 For Replanting FIELD HECTARAGE % VS MATURE Field Categories Hectare (Ha) % vs Mature % vs Total Due for Replanting 3,837 15% 8% Old Mature 3,594 14% 7% Prime Mature 11,021 43% 22% Young Mature 7,201 28% 14% Immature 9,968 - 19% Scout Harvesting 3,153 - 6% For Replanting 12,515 - 24% Total 51,289 - - OPERATIONAL REVIEW 12 SALCRA 2022 ANNUAL REPORT TOTAL OIL PALM NETT PLANTED AREA Region Hectare (Ha) Year 2022 Year 2021 Variance Bau 12,436 12,598 (162) Serian 12,634 12,537 97 Sri Aman 8,472 8,576 (104) Saratok 17,351 17,233 118 Miri & Bintulu 396 396 - Total 51,289 51,340 (51)
SALCRA 2022 ANNUAL REPORT 13 Total Fresh Fruit Bunches (FFB) Production 352,306 metric tonnes Yield Per Hectare 13.73 metric tonnes per hectare Mature Hectare 25,653 hectare OPERATIONAL REVIEW The FFB production increased by 7% in 2022 compare to 2021. The improvement of the production because of increase in young mature areas from 4,177 hectares in 2021 to 7,201 hectares, as well as better crop recovery in prime mature fields which contributed about 62% or 217,929 metric tonnes of the total production. Hectarage (Ha) 3,837 3,594 11,021 7,201 4,888 Production (MT) 29,330 42,035 217,929 54,598 8,414 Yield (MT/Ha) 7.64 11.70 19.77 7.58 1.72 Field Categories Due for Replanting Old Mature Prime Mature Young Mature Scout & For Replanting FFB PRODUCTION BY FIELD CATEGORIES ESTATE LABOUR AND MECHANISATION The general requirement for manual labour at SALCRA was 3,004 but the actual labour force was only 2,766, resulting in a shortage of 238 workers. The greatest shortfall was the harvesters, at 451 or 38% of the 1,181 total required for the year. To reduce reliance on manual labour for harvesting and field maintenance, SALCRA will continue to intensify mechanisation of field operations wherever practicable and integrate cattle into oil palm plantation. In-Field Collection Machine Harvester’s Productivity: 1.75 MT/DAY to 2.5 MT/DAY Fertilizer Spreader Worker’s Productivity: 2 HA/DAY to 6 HA/DAY Mist Blower Improved weed control: 2 HA/DAY to 5 HA/DAY Meanwhile, the total area covered by various types of mechanisation are shown below. Description 2021 2022 External Transport 31,529 33,345 Weeding 25,934 23,091 Manuring 4,436 3,575 Infield Collection 12,479 12,630 Harvesting 3,400 5,137 TOTAL AREA COVERED BY VARIOUS TYPES OF MECHANISATION
OPERATIONAL REVIEW PARTICIPANTS’ DEVELOPMENT The Authority made significant progress in enhancing the growth and development of our participants. Through various initiatives and programmes, we focused on Rural Entrepreneurship Development Programme (REDP), obtaining consent for the replanting programme and new areas, and signing the Land Development Agreement (LDA). LANDOWNERS/PARTICIPANTS In 2022, SALCRA has a total of 21,063 participants in its four (4) regions encompassing 618 villages/longhouses participating in SALCRA’s land development project. 21,063 618 NETT PROCEED PAYMENT (NPP) SALCRA Board approved a sum of RM75 million NPP 2022 to its eligible 10,649 participants, which is comparatively 19% higher than NPP 2021. Despite the shortage of workforce at the operational level, the Authority emphasised on mechanisations to ensure the workers’ high productivity and the favourable price of CPO thus enhancing the increase of NPP. DECLARED NPP 2022 RM75 MILLION PARTICIPANTS 10,649 HECTARE 26,678 LOTS 14,376 14 SALCRA 2022 ANNUAL REPORT RURAL AGROPRENEURS PROGRAMME (RAP) Rural Agropreneurs Programme (RAP) is an initiative to aid in the supply of labour to the plantations operation. This initative is to encourage local villagers especially the participants to become entrepreneurs and take up contract works in the oil palm in the oil palm estates. The programme also serves as a platform to assist the local community and participants in improving their livelihood. The selection of contractors for the RAP is based on the Procurement Guideline for Statutory Bodies and for contractors who have valid UPKJ Class F with Bumiputera status. There were 26 Agropreneurs that have registered and engaged under the RAP.
OPERATIONAL REVIEW RURAL ENTREPRENEURSHIP DEVELOPMENT PROGRAMME (REDP) The Authority continued to give one-off financial aid to the participants through REDP as part of the initiatives to improve their quality of life. Additionally, Aktiviti Ekonomi Tambahan (AET) and Sokongan Pengukuhan Keusahawanan Luar Bandar (SPKLB) were carried out. These two (2) programmes were funded by the Ministry of Rural and Regional Development (KKDW). SALCRA continued in monitoring the impacts of the REDP to the participants. 1 2 3 4 5 6 7 SALCRA 2022 ANNUAL REPORT 15 RURAL ENTREPRENEUR DEVELOPMENT PROGRAMME Project Stingless Bee Active participants Total Expenditure (RM) Median Income Avg. Additional Household Income 24 565,502 RM2,868 RM2,800 Pineapple (MD2) 8 264,109 RM540 RM1,358 Duck (Khaki Campbell) 18 419,296 RM808 RM629 Bakery 18 74,537 RM160 RM419 Tailoring 15 180,511 RM1,500 RM2,337 Mist Blower 8 112,500 RM4,274 RM14,781 Re-Start 3 37,500 RM15,060 RM22,400 Overall Total 94 1,653,955 RM1,203 RM3,478 1 2 3 4 5 6 7
OPERATIONAL REVIEW FREE, PRIOR, AND INFORMED CONSENT (FPIC) Replanting Programme The Replanting Programme consisted of 26 phases across three Rolling Plans (RP): RP1 had 10 phases, RP2 had 5, and RP3 had 11. Around 3,999 landowners signed up, totaling 4,905 lots and covering 8,589 hectares. They also agreed to plant 905 lots outside the replanting areas. PARTICIPANTS 3,999 LOTS 4,905 NEW CONSENTED LOTS 905 HECTARES 8,589 PARTICIPANT LOT HECTARE 2,500 2,000 1,500 1,000 500 0 RP1 RP2 RP3 Participant Participation 2,207 1,679 844 630 1,993 1,688 3,000 2,500 1,500 1,000 500 0 RP1 RP2 RP3 Lot Consented 2,586 2,034 1,000 729 2,531 2,140 245 35 625 2,000 New 6,000 5,000 3,000 2,000 1,000 0 RP1 RP2 RP3 Actual Consented 5,384 4,006 1,995 1,489 3,635 3,101 4,000 16 SALCRA 2022 ANNUAL REPORT
OPERATIONAL REVIEW New Area There were five (5) projects initiated to develop a total area of 16,816 hectares. 1,962 participants signed 3,926 Letters of Consent (LOCs) to join SALCRA development projects. 1,962 participants 3,926 LOCs 0 2,000 4,000 6,000 8,000 10,000 12,000 1,000 3,500 9,791 1,700 2,300 1,700 500 1,000 1,378 1,000 2,500 3,112 700 700 835 Nanga Sekuau, Sibu Sg. Arip/Sg. Bawang/Sg. Tau, Sibu Ulu Pedanum, Pakan Ulu Sungai Wak, Sarikei Pangkalan Tebang, Jagoi OPE Target 12MP Plantable (HA) Consented (HA) NEW PLANTING UNDER 12MP FREE, PRIOR AND INFORMED CONSENT (FPIC) 16,816 Ha CONSENTED FOR OIL PALM PROJECT 10,000 Ha PLANTABLE AREA 4,900 Ha DEVELOPED UNDER 12MP 0 500 1000 15000 2000 2500 Nanga Sekuau, Sibu Sg. Arip/Sg. Bawang/Sg. Tau, Sibu Ulu Pedanum, Pakan Ulu Sungai Wak, Sarikei Pangkalan Tebang, Jagoi OPE No. of LOC Signed No. of Participant 1,990 661 1,144 574 271 164 459 231 62 62 SALCRA 2022 ANNUAL REPORT 17
AHLI JAWATANKUASA PEMBANGUNAN LADANG SALCRA (AJPLS) AJPLS held 76 meetings (on a quarterly basis) across 19 estates in 2022. A total of 424 issues were raised and resolved from the overall meetings. These issues covered estate operations, land titles, policy matters, Net Proceed Payment (NPP) and Aktiviti Ekonomi Tambahan (AET). OPERATIONAL REVIEW LAND DEVELOPMENT AGREEMENT (LDA) 409 participants across the five (5) phases as per details below, signed the Land Development Agreements (LDAs) for replanting areas. Collecting Loose Fruits at Bratak Oil Palm Estate Meeting at Sedarat Memaloi Oil Palm Estate AJPLS QUARTERLY MEETINGS Sri Aman Saratok Serian Bau-Lundu LDA Signing at Kedup 2 Oil Palm Estate, Serian 180 171 103 37 58 110 Kedup 2 Ph. 1 Jagoi Ph. 1 Roban South Ph. 1 Bratak Ph. 1 Kedup 1 Ph. 2 LDA SIGNED 160 140 120 100 80 60 40 20 0 18 SALCRA 2022 ANNUAL REPORT 20 20 20 16 76
OPERATIONAL REVIEW SALCRA 2022 ANNUAL REPORT 19 PALM OIL MILLS The palm oil mills recorded a 29% increase in overall performance, processing 1,314,577 metric tonnes of FFB compared to 1,020,844 metric tonnes the previous year. Revenue also rose by 37% to RM1.45 million in 2022 from RM1.06 million the year before. However, Profit Before Tax (PBT) decreased by 67% to RM11.98 million from RM36.34 million (2021), mainly due to lower OER and KER achieved and a 42% increase in processing costs compared to the previous year. The table below showed the performance of each Palm Oil Mill, namely Saratok Palm Oil Mill Sdn. Bhd. (SAPOM), Serian Palm Oil Mill Sdn. Bhd. (SEPOM), Bau Palm Oil Mill Sdn. Bhd. (BAPOM), Lubok Antu Palm Oil Mill 1 (LAPOM 1) and Lubok Antu Palm Oil Mill 2 (LAPOM 2). Description SAPOM SEPOM BAPOM LAPOM 1 LAPOM 2 2021 288,365 226,446 233,421 109,488 163,124 FFB Processed (MT) 2022 330,256 312,348 290,357 162,551 219,065 % 14.53 37.93 24.39 48.46 34.29 2021 302.50 243.21 242.45 111.73 164.83 Revenue (RM ‘Million’) 2022 366.52 360.14 317.07 170.77 236.70 % 21.16 48.08 30.78 52.84 43.60 Earnings Before Interest 2021 15.08 8.38 8.58 3.16 1.14 and Taxes (RM ‘Million’) 2022 11.16 1.48 5.20 2.72 (8.58) % (25.99) (82.34) (39.39) (13.92) (852.63) PERFORMANCE BY EACH MILL MILLS OVERALL PERFORMANCE Description Mills Overall Performance 2021 1,020,844 FFB Processed (MT) 2022 1,314,577 % 29 2021 1.06 Revenue (RM ‘Million’) 2022 1.45 % 37 2021 36.34 Profit Before Tax (RM ‘Million’) 2022 11.98 % (67) NEW PLANTING AREAS 531 HECTARES REPLANTED AREAS 992 HECTARES NEW PLANTING AND REPLANTING PROJECTS SALCRA carried out eight (8) land development projects, planting a total of 1,523 hectares. This included 531 hectares of new planting and 992 hectares of replanted areas. The Authority has planned four (4) additional replanting projects that would commence in Quarter 3, 2023. These projects would be funded by the State Loan, High Impact Project (formerly known as the National Key Economic Area Programme) and Kementerian Kemajuan Desa dan Wilayah (KKDW).
Year 2022 also marked the completion of the first SALCRA cattle feedlot, Mayang Breeding and Fattening Farm (MBFF), after 20 years embarking in cattle-oil palm integration. The MBFF is equipped with feed processing equipment and napier plot that has the capacity to hold 300 heads of cattle. Moving forward, another two (2) feedlots would be established at Stenggang, Bau and Rimbas, Betong. These feedlots aim to provide a systematic and integrated support for cattle integeration operation as well as to increase production. 2021 16.1% CALVING RATE 2022 17.2% 24% 2021 RM0.8 Million SALES 2022 RM1.7 Million 107% LIVESTOCK PROJECT Presently, SALCRA has a total of 3,197 cattle across nine (9) estates in Bau-Lundu, Serian, Sri Aman and Saratok Region. There were 273 calf births, with a calving rate of 17.23%. This marks a 24% increase in newborn calves compared to the previous year, which saw only 220 births. The project recorded an increase of revenue by 107% compared to the previous year, from RM0.82 million to RM1.70 million. This significant increase was due to both increase in demand in the local market and limitations on imports from neighboring countries as a result of animal transboundary disease control and the COVID-19 pandemic. OPERATIONAL REVIEW 20 SALCRA 2022 ANNUAL REPORT
OPERATIONAL REVIEW SALCRA 2022 ANNUAL REPORT 21 The total surveyed area increased significantly to 2,424 hectares (1,617 lots) compared to 1,499 hectares (876 lots) in 2021. The survey recorded a 72% completion of the total output. The remaining cadastral surveys are expected to be completed by 2025. Throughout the year of 2022, a total of 835 land titles (1,082 hectares) were issued by the Land and Survey Department, bringing the total to 17,972 titles covering approximately 33,102 hectares across 19 estates and benefiting 14,086 SALCRA participants. 2,424 Hectares (1,617 Lots) Surveyed 17,972 Land Titles Issued to 14,086 Participants Engagement session with Land and Survey Department Handing Over Land Titles at Dewan Tayung Langui, Kampung Pichin, Serian ISSUANCE OF LAND TITLES The Year 2022 marked the second year of collaboration between SALCRA and Land and Survey Department in carrying out cadastral surveys within SALCRA Development Areas. INFRASTRUCTURE In 2022, a total of 47 projects valued at RM94.02 million were implemented, of which 24 were completed, 19 were still on-going and 10 were still on tender stage. The 24 completed projects were 13 roads, 9 buildings and 2 bridges. The 19 on-going projects were infrastructure and earthwork project at Rural Growth Centre at Long Lama, Miri and internally funded projects i.e. roads, mild steel bridges, crude palm oil tank storage and building construction. 10 road projects were still on tender stage. • 13 Roads • 9 Buildings • 2 Bridges • Infrastructure and Earthwork Projects at Rural Growth Centre (RGC) • Construction Works 10 Tender Stage • Road Projects 19 On-going 24 Completed 47 Projects values RM94.02 Million OPERATIONAL REVIEW
OPERATIONAL REVIEW 22 SALCRA 2022 ANNUAL REPORT 9% 74% 17% LEARNING & DEVELOPMENT PROGRAMME FOR 2022 COMPETENCY TYPES LEADERSHIP Set of skills and attribute that a leader should posses to lead a team in order to achieve organisational goals. FUNCTIONAL/ TECHNICAL Set of skills and attributes that are required to carry out a role effectively. BEHAVIOURAL Desired behaviors, attitude and personality traits of a person that drive organisation forward. TOTAL 161 1,401 1,503 310 1,862 84% NO. OF PROGRAMME (%) PARTICIPATION BY ATTENDANCE DURATION (Days/Hours) COMPETENCY (%) 373 274 29 176 932 1,048 257 1,543 96 181 24 143 83% 86% 84% HUMAN RESOURCE A. Human Capital Development The Learning and Development Programme helps the employees adapt to changes, stay updated on industry trends and contribute more effectively to the Authority’s goals. A total of 161 programmes were carried out which involved a total of 2,904 employees with an overall of 310 days and 1,862 hours respectively. The average employee competency score for the year was 84%, above the minimum score of 75%, while the employee turnover rate was 1.8%, which was below than the industry rate of 4%. B. Staff Advancement Peningkatan Secara Lantikan (PSL) Staff advancement is another focus area of the Authority in promoting eligible employees to higher grades through various channels based on merit and criteria established by the Assessment Centre. In 2022, a total of 14 staff were promoted through Peningkatan Secara Lantikan (PSL).
OPERATIONAL REVIEW SALCRA 2022 ANNUAL REPORT 23 HUMAN RESOURCE C. SALCRA Education Loan (SEL) Scheme Since its inception in 2006, the total accumulative loan approval is RM1,266,403.00 and sixty-three (63) recipients have benefited from the loan funds of which fifty-six (56) recipients have successfully completed their studies. D. Internship Programme A total of fifty-one (51) students from various higher institutions have undergone their internship programme at various operating units in SALCRA. This consisted of thirteen (13) degree students, twenty-seven (27) Diploma and eleven (11) Certificate students. E. Compensation and Remuneration for Estate Workers (CREW) The objectives of Compensation and Remuneration for Estate Workers (CREW) Programme are as follows: (i) Recruiting new workers through multiple entry channels including the appointment of recruiters for non- permanent workers (ii) Retaining workers by providing job security through the offering of stable positions under contract of service scheme (iii) Improving productivity by promoting mechanisation as an alternative to execute tasks in the estates From this programme, a total of 118 Local Workers (CREW) were recruited throughout the year of 2022. RECRUITMENT BY REGIONS Saratok Region Sri Aman Region Serian Region Bau-Lundu Region 48 21 26 23 TOTAL 118
24 SALCRA 2022 ANNUAL REPORT OPERATIONAL REVIEW SALCRA also participated in the 10th Premier of Sarawak Environmental Award. SALCRA has attained three (3) Gold Awards under the category of Large Enterprise, one (1) Merit Award under Government Sector and ten (10) Merit Awards under Medium Enterprise. SUSTAINABILITY Environmental Monitoring and Conservation SALCRA and WWF-Malaysia inked a Memorandum of Understanding (MoU) to work together towards promoting sustainability by implementing the best management practices for palm oil productions that are important for the rehabilitation and management of forested or degraded High Conservation Values (HCV) sites within existing planted areas. In continuation of the MoU, tree planting activities were conducted at Lemanak Oil Palm Estate, with support from Malesiana Tropicals Sdn. Bhd. as part of the seedlings contributor. Besides the rehabilitation and tree planting activities, SALCRA also conducted High Conservation Value (HCV) assessment involving forest inventory and wildlife identification using camera-trap and social surveys. SALCRA also carried out self-monitoring of river quality at Sg. Sebiew and Karabungan Mini Oil Palm Estates. Certification and Award As with previous years, all of SALCRA’s plantations and mills maintained their Malaysian Sustainable Palm Oil (MSPO) certification, which ensures SALCRA in producing sustainable palm oil.
SALCRA 2022 ANNUAL REPORT 25 OPERATIONAL REVIEW SAFETY & HEALTH In the SALCRA’s Safety and Health Policy, it is SALCRA policy to conduct business in such a manner that the safety and health of our employees, landowners and other parties who are involved in our business is treated with the highest priority. Management responsibilities are in synchronisation with the employer responsibilities, which are required and mentioned by Occupational Safety and Health Act (OSHA) 1994 as follows: • To provide and maintain working environment and safe system of work that are safe and without risks to health; • To provide information, instruction, training and supervision to ensure employees perform their work in a safe manner and without risks to health; and • To provide and maintain working environment that is safe and without risks to health and adequate welfare facilities. Despite diligent implementation of SALCRA’s Safety & Health Motto “SAFETY IS A WAY OF LIFE AROUND THE CLOCK”, there were twenty-five (25) occupational accidents reported for the year 2022 with eighty five (85) man-days lost. As such, to improve this situation, the need of ‘Safety and Health Culture’ is mandatory and its requires the right attitude change for each employee which sequentially will ensure safe working practices.
26 SALCRA 2022 ANNUAL REPORT OPERATIONAL REVIEW BLOOD DONATION PROGRAMME The Authority organised seven (7) Blood Donation Programmes in collaboration with local hospitals across regions. The aim was to raise awareness about blood donation and support hospitals facing blood shortages. A total of 326 participants registered, donating 253 packs of blood. The initiative, held at various SALCRA’s Operating Units, saw three (3) programmes at Headquarters and one each in Bau-Lundu, Serian, Sri Aman, and Saratok regions. ORGANISATION ANTI-CORRUPTION PLAN - PARAS 2021-2025 AND CORRUPTION RISK MANAGEMENT The Organisation Anti-Corruption Plan (OACP), known as PARAS 2021-2025 has been implemented since April 2021. There were 40 integrity, governance, and corruption risks identified during the mid-term OACP Review in March 2022, resulting in 42 initiatives for mitigation. The Corruption Risk Management (CRM) was developed in 2019 to complement OACP and to align with the requirements of subsection (5) of S.17A MACC Act 2009 for Adequate Procedures Guidelines - Risk Assessment and Systematic Review, Monitoring and Enforcement. The CRM review in July 2022 addressed 18 risks with 22 action plans.
PROFIT AFTER TAX RM0.52 MILLION REVENUE RM40.71 MILLION SALCRA JAYA SDN. BHD. For the year ended 31st December 2022, SALCRA Jaya recorded its revenue of RM40.71 million, a slight decrease of 5% or RM2.1 million compared to the previous year, RM42.81 million. The Profit After Tax (PAT) was increased by 18% from RM0.44 million last year to RM0.52 million. SALCRA Jaya maintained its balance sheet at a strong position whereby its total assets amounting to RM54.81 million compared to RM53.93 million in 2021. The shareholder’s fund grew by 1% or RM0.22 million to RM18.22 million. SARAWAK FERTILIZER SDN. BHD. A total of 66,072 metric tonnes of fertiliser were sold, marking a 5% increase from 2021. SALCRA and Sime Darby Plantation Berhad (SDPB) were the main customers, followed by the other plantation houses and smallholders. In the year of 2022, the total revenue of Sarawak Fertilizer Sdn. Bhd. increased by 77%, reaching RM177.85 million compared to RM100.24 million in 2021, that recorded its highest-ever Profit Before Tax (PBT) of RM17.95 million in 2022. OPERATIONAL REVIEW SALCRA 2022 ANNUAL REPORT 27
28 SALCRA 2022 ANNUAL REPORT ACTIVITIES 7th February 2022 Briefing to the new Minister, Yang Berhormat Dato Sri Dr Stephen Rundi Anak Utom A special briefing to the new Minister for Modernisation of Agriculture and Regional Development, Yang Berhormat Dato Sri Dr Stephen Rundi Anak Utom was held on 7th February 2022 at the Board Room, Wisma SALCRA. Among those present during the briefing were both the Deputy Ministers for Modernisation of Agriculture and Regional Development, Sarawak, Yang Berhormat Mr. Martin Ben and Yang Berhormat Datuk Dr Haji Abdul Rahman Bin Haji Ismail, the Permanent Secretary Yang Berbahagia Datu Edwin Abit, the SALCRA Management Team, Senior Officers, Mill Managers and Area Managers. 17th - 23rd June 2022 Exhibition on Post Covid-19 Development Strategy 2030 & International Digital Economy Conference Sarawak (IDECS) 2022 SALCRA participated in the two (2) exhibitions, Post Covid-19 Development Strategy (PCDS) 2030 and International Digital Economy Conference Sarawak (IDECS) 2022 at Borneo Convention Centre Kuching (BCCK). The exhibitions were held from 17th to 19th June 2022 and 21st to 23rd June 2022 respectively. Both events were officiated by the Right Honourable Premier of Sarawak, Datuk Patinggi Tan Sri (Dr) Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg.
SALCRA 2022 ANNUAL REPORT 29 29th April 2022 Visit to Long Lama Rural Growth Centre (RGC), Miri The Deputy Minister for Modernisation of Agriculture and Regional Development, Sarawak, Yang Berhormat Mr. Martin Ben and the General Manager, Mr. Joseph Blandoi went to visit Long Lama Rural Growth Centre (RGC), Miri on 29th April 2022 to monitor the progress of the construction of the Phase 2 Development Project. Also present during the visit were Telang Usan Ahli Dewan Undangan Negeri (ADUN), Yang Berhormat Tuan Dennis Ngau and Acting Resident of Miri, Mr. Baru Tai. 29th August 2022 Bursa Malaysia visit Wisma SALCRA Bursa Malaysia paid a courtesy visit to Wisma SALCRA on the 29th August 2022. The delegates were represented by Mr. Hiro Chai (third from right), Mr. Ryan Long (second from right) and Mr. Chan Yoon Sang (right). They were welcomed by the General Manager, Mr. Joseph Blandoi with some of the Management Team representatives. ACTIVITIES
30 SALCRA 2022 ANNUAL REPORT ACTIVITIES 5th October 2022 Integrity Day The Minister for Food Industry, Commodity and Regional Development of Sarawak (M-FICORD), Yang Berhormat Dato Sri Dr Stephen Rundi Utom officially launched the Ministry’s Integrity Day 2022 together with its Agencies under the Ministry; Sarawak Land Consolidation and Rehabilitation Authority (SALCRA), Sarawak Land Development Board (SLDB), Department of Agriculture (DOA), Department of Veterinary Services Sarawak (DVSS) and State Farmers’ Organisation Sarawak (PPNS) on 5th October 2022 at UCSI Hotel, Kuching. 9th - 11th September 2022 Pesta Benak Exhibition SALCRA participated in the Tidal Bore (Pesta Benak) Exhibition from 9th to 11th September 2022 at Sri Aman Waterfront. The Premier of Sarawak, Yang Amat Berhormat Datuk Patinggi Tan Sri (Dr) Abang Haji Abdul Rahman Zohari Tun Datuk Abang Haji Openg officiated the Sri Aman Pesta Benak on 10th September 2022 while the closing ceremony was officiated by Tuan Yang Terutama Yang Di-Pertua Negeri Sarawak Tun Pehin Sri Haji Abdul Taib Mahmud on 11th September 2022. 17th September 2022 Visit to SALCRA Mayang Breeding and Fattening Farm, Serian The Deputy Minister for Modernisation and Development, Yang Berhormat Mr. Martin Ben visited SALCRA Mayang Breeding and Fattening Farm in Serian on 17th September 2022. Also present during the visit the General Manager, Mr. Joseph Blandoi, Dr Adrian Susil, the Director of Department of Veterinary Sarawak, Temenggong Henry Bujang and SALCRA Staff.
Financial Statements 32 Authority Bankers 39 Consolidated Statements of Financial Position 33 Statement by Chairman and A Board Member 41 Consolidated Statements of Comprehensive Income 34 Statutory Declaration by Officer Primarily Responsible for the Financial Management of Sarawak Land Consolidation and Rehabilitation Authority 42 Consolidated Statements of Changes In Equity 44 Consolidated Statements of Cash Flows 47 Notes to the Financial Statements 32 List of Authority Board Members 35 Auditors’ Certificate
List of Authority Board Members Chairman Yang Berhormat Dato Sri Dr Stephen Rundi Anak Utom Minister for Food Industry, Commodity and Regional Development, Sarawak Members Yang Berhormat Datuk Amar Michael Manyin Anak Jawong (retired on 26th January 2023) Advisor in the Office of the Premier of Sarawak (Education) Yang Berhormat Datuk Malcolm Mussen Anak Lamoh (retired on 26th January 2023) Deputy Minister for International Trade, Industry and Investment Yang Berhormat Datuk Willie Anak Mongin (appointed on 26th January 2023) Ahli Parlimen P.198 – Puncak Borneo Yang Berhormat Encik Anyi Anak Jana (appointed on 26th January 2023) Ahli Dewan Undangan Negeri (ADUN) N.49 Ngemah Yang Berhormat Datuk Roland Sagah Wee Inn (retired and reappointed on 26th January 2023) Minister for Education, Innovation and Talent Development, Sarawak Yang Berhormat Datuk Dr Penguang Manggil (retired and reappointed on 26th January 2023) Deputy Minister for Public Health, Housing and Local Government, Sarawak Secretary-General, Federal Ministry of Rural and Regional Development, Malaysia or his representative Federal Finance Officer Sarawak, State Federal Treasury, Ministry of Finance Malaysia or his representative State Financial Secretary or his representative Permanent Secretary, Ministry of Natural Resources and Urban Development, Sarawak or his representative Permanent Secretary, Ministry of Food Industry, Commodity and Regional Development, Sarawak or his representative General Manager : Encik Joseph Blandoi Registered Office : Lembaga Penyatuan dan Pemulihan Tanah Sarawak Wisma SALCRA, No. 1, Lot 2220, Block 26, MTLD Jalan Dato’ Mohd. Musa, 94300 Kota Samarahan Peti Surat 1981, 93740 Kuching Auditor : Auditor General Malaysia Bankers : CIMB Bank : Public Islamic Bank Berhad : RHB Bank Berhad : Bank Pertanian Malaysia Berhad AUTHORITY MEMBERS/AUTHORITY BANKERS 32 SALCRA 2022 ANNUAL REPORT
STATEMENT BY CHAIRMAN AND A BOARD MEMBER SALCRA 2022 ANNUAL REPORT 33 PENYATA PENGERUSI DAN SEORANG AHLI LEMBAGA PENGARAH (AKUAN KUMPULAN) Kami, YB DATO SRI DR STEPHEN RUNDI ANAK UTOM dan YBHG. TUAN SIRAI ANAK DAHA yang merupakan Pengerusi dan salah seorang Ahli Lembaga Pengarah LEMBAGA PENYATUAN DAN PEMULIHAN TANAH SARAWAK dengan ini menyatakan bahawa, pada pendapat Lembaga Pengarah, Penyata Kewangan yang mengandungi Penyata Kedudukan Kewangan, Penyata Pendapatan Komprehensif, Penyata Perubahan Ekuiti dan Penyata Aliran Tunai yang berikut ini berserta dengan nota-nota kepada Penyata Kewangan di dalamnya, adalah disediakan untuk menunjukkan pandangan yang benar dan saksama berkenaan kedudukan LEMBAGA PENYATUAN DAN PEMULIHAN TANAH SARAWAK pada 31 Disember 2022 dan hasil kendaliannya serta perubahan kedudukan kewangannya bagi tahun berakhir pada tarikh tersebut. Bagi pihak Lembaga, Bagi pihak Lembaga, YB DATO SRI DR STEPHEN RUNDI ANAK UTOM YBHG. TUAN SIRAI ANAK DAHA Pengerusi Ahli Lembaga Pengarah Tarikh Tarikh: KUCHING, SARAWAK KUCHING, SARAWAK
STATUTORY DECLARATION 34 SALCRA 2022 ANNUAL REPORT PENGAKUAN OLEH PEGAWAI UTAMA YANG BERTANGGUNGJAWAB KE ATAS PENGURUSAN KEWANGAN LEMBAGA PENYATUAN DAN PEMULIHAN TANAH SARAWAK Saya, ENCIK JOSEPH ANAK BLANDOI, pegawai utama yang bertanggungjawab ke atas pengurusan kewangan dan rekod-rekod perakaunan LEMBAGA PENYATUAN DAN PEMULIHAN TANAH SARAWAK dengan ikhlasnya mengakui bahawa Penyata Kedudukan Kewangan, Penyata Pendapatan Komprehensif, P enyata Perubahan Ekuiti dan Penyata Aliran Tunai yang berikut ini berserta dengan nota-nota kepada Penyata Kewangan di dalamnya mengikut sebaik-baik pengetahuan dan kepercayaan saya, adalah betul dan saya membuat ikrar ini dengan sebenarnya mempercayai bahawa ia adalah benar dan atas kehendak-kehendak Akta Akuan Berkanun, 1960. Sebenarnya dan sesungguhnya ) Diakui oleh penama di atas ) di KUCHING, SARAWAK ) pada ..............……………. ) ……...………………………………… ENCIK JOSEPH ANAK BLANDOI No. K/P: 661110-13-5853 Di hadapan saya, ….…...………………………………. PESURUHJAYA SUMPAH
AUDITORS’ REPORT SALCRA 2022 ANNUAL REPORT 35
AUDITORS’ REPORT 36 SALCRA 2022 ANNUAL REPORT
AUDITORS’ REPORT SALCRA 2022 ANNUAL REPORT 37
AUDITORS’ REPORT 38 SALCRA 2022 ANNUAL REPORT
SALCRA 2022 ANNUAL REPORT 39 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 Group Authority 2022 2021 2022 2021 (Restated) Non-Current Assets: Notes RM RM RM RM Property, plant and equipment 7 372,708,087 394,255,679 237,300,318 246,529,660 Goodwill 8 - - - - Investment in subsidiaries 9 - - 48,350,003 48,350,003 Investment in associates 11 2,620,740 2,606,040 - - Other investments 12 5,119,102 5,011,252 12,627,631 12,422,721 Deferred tax assets 24 - 5,329,458 - 13,473,000 Biological assets 13 21,160,745 25,229,767 21,160,745 25,229,767 Development cost 34 449,386 294,665 - - Participants’ accounts 14 470,044,050 439,490,651 470,044,050 439,490,651 Loan due from a subsidiary 15 - - - - Loan due from a related company 15 1,422,270 1,539,498 1,422,270 1,539,498 _____________ _____________ ______________ ______________ Total Non-Current Assets 873,524,380 873,757,010 790,905,017 787,035,300 _____________ _____________ ______________ ______________ Current Assets: Inventories 16 73,920,395 59,117,670 18,241,043 17,016,638 Trade receivables 17 62,307,032 69,260,517 16,155,827 19,482,402 Other receivables, deposits and prepayments 18 17,232,076 20,232,152 4,444,670 3,930,796 Amount due from subsidiaries 9 - - 17,745,466 18,261,500 Amount due from associate 10 1,055,198 832,422 - - Loan due from a subsidiary 15 - - - 6,746,783 Loan due from a related company 15 224,853 224,853 224,853 224,853 Current tax assets 2,580,850 1,217,493 - - Other investments 12 155,638,386 113,334,234 104,090,609 70,001,272 Cash and cash equivalents 19 148,811,943 204,694,167 91,840,082 149,327,385 _____________ _____________ _____________ _____________ Total Current Assets 461,770,733 468,913,508 252,742,550 284,991,629 _____________ _____________ _____________ _____________ Total Assets 1,335,295,113 1,342,670,518 1,043,647,567 1,072,026,929 ===================== ==================== =================== ==================== Equity: Retained earnings 302,734,595 299,667,332 228,296,817 235,625,708 General reserve 21 1,214,300 1,214,300 - - Non-controlling interests 58,955,493 60,871,527 - - _____________ _____________ _____________ _____________ Total Equity 362,904,388 361,753,159 228,296,817 235,625,708 _____________ _____________ _____________ _____________ The notes on pages 49 to 104 form an integral part of these financial statements
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 Group Authority 2022 2021 2022 2021 (Restated) Non-Current Liabilities: Notes RM RM RM RM Borrowings 20 375,434,344 457,743,697 345,605,237 421,308,334 Lease liabilities 25 2,329,563 4,648,940 - - Provision for employee benefits 22 523,490 419,991 523,490 419,991 Deferred income 23 202,983,806 150,785,844 202,983,806 150,785,844 Deferred tax liabilities 24 11,438,853 - - - ______________ _____________ ____________ ____________ Total Non-Current Liabilities 592,710,056 613,598,472 549,112,533 572,514,169 ______________ _____________ ____________ ____________ Current Liabilities: Borrowings 20 139,867,685 130,854,522 92,355,388 87,513,816 Lease liabilities 25 2,334,647 2,223,180 - - Trade payables 26 108,655,466 109,664,664 43,673,456 61,047,080 Amount due to subsidiaries 9 - - 18,429,120 10,015,596 Other payables 27 123,926,348 122,595,018 105,986,114 100,084,086 Provision for employee benefits 22 4,896,523 1,981,503 3,056,111 1,981,503 Current tax liabilities - - 2,738,028 3,244,971 ______________ _____________ ____________ ____________ Total Current Liabilities 379,680,669 367,318,887 266,238,217 263,887,052 ______________ _____________ ____________ ____________ Total Liabilities 972,390,725 980,917,359 815,350,750 836,401,221 ______________ _____________ ____________ ____________ Total Equity and Liabilities 1,335,295,113 1,342,670,518 1,043,647,567 1,072,026,929 ===================== ===================== ==================== =================== The notes on pages 49 to 104 form an integral part of these financial statements 40 SALCRA 2022 ANNUAL REPORT
SALCRA 2022 ANNUAL REPORT 41 Group Authority 2022 2021 2022 2021 (Restated) Notes RM RM RM RM Revenue 28 1,639,028,623 1,186,843,651 414,098,346 281,539,596 Cost of sales ( 1,519,422,791) (1,071,941,219) ( 399,147,395) ( 257,033,745) ______________ ______________ _____________ _____________ Gross profit 119,605,832 114,902,432 14,950,951 24,505,851 Fair value gain/(loss) in other investments 33,099 (523,867) - (519,359) Other income 29 47,532,442 54,535,258 53,748,605 54,767,352 Amortisation of deferred income 23 12,215,204 7,018,544 12,215,204 7,018,544 Distribution expenses (47,022,799) (36,375,295) (2,085,436) (1,129,718) Amortisation of goodwill 8 - (400,000) - - Administrative and other expenses (78,045,588) ( 68,180,244) ( 54,762,994) (47,046,006) ______________ _____________ _____________ _____________ Profit from operations 54,318,190 70,976,828 24,066,330 37,596,664 Finance costs 31 (13,544,256) (19,963,668) (9,997,635) (17,091,551) Provision for losses of an associate 10 - (445,353) - - _____________ _____________ _____________ _____________ Profit before tax 30 40,773,934 50,567,807 14,068,695 20,505,113 Income tax expense 32 (31,772,705) (2,737,496) (21,397,586) 5,947,703 ______________ ______________ _____________ _____________ Profit/(Loss) for the year/ Total comprehensive income/(loss) for the year 9,001,229 47,830,311 (7,328,891) 26,452,816 ______________ ______________ _____________ _____________ Profit/(Loss) for the year attributable to: Non-controlling interests 5,933,966 10,766,324 - - Owners of the Authority 3,067,263 37,063,987 (7,328,891) 26,452,816 _____________ ______________ _____________ _____________ 9,001,229 47,830,311 (7,328,891) 26,452,816 _____________ ______________ _____________ _____________ Total comprehensive income/(loss) for the year attributable to: Non-controlling interests 5,933,966 10,766,324 - - Owners of the Authority 3,067,263 37,063,987 (7,328,891) 26,452,816 _____________ ______________ _____________ _____________ 9,001,229 47,830,311 (7,328,891) 26,452,816 _____________ ______________ _____________ _____________ The notes on pages 49 to 104 form an integral part of these financial statements CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Group Attributable to Owners of the Authority Retained General Non- Total equity earnings reserve controlling (Note 21) interests RM RM RM RM Restated balance as at 1 January 2022 299,667,332 1,214,300 60,871,527 361,753,159 Total comprehensive income for the year 3,067,263 - 5,933,966 9,001,229 Dividends paid on shares - - (7,850,000) (7,850,000) ______________ _____________ ____________ ____________ Balance as at 31 December 2022 302,734,595 1,214,300 58,955,493 362,904,388 ===================== ===================== ==================== =================== Group Attributable to Owners of the Authority Retained General Non- Total equity earnings reserve controlling (Note 21) interests RM RM RM RM Balance as at 1 January 2021 - As previously reported 264,396,625 1,214,300 52,785,203 318,396,128 - Prior year adjustment (1,793,280) - - (1,793,280) Restated balance as at 1 January 2021 262,603,345 1,214,300 52,785,203 316,602,848 Total comprehensive income for the year - As previously reported 38,157,727 - 10,766,324 48,924,051 - Prior year adjustment (1,093,740) - - (1,093,740) Restated total comprehensive income 37,063,987 - 10,766,324 47,830,311 for the year Dividends paid on shares - - (2,680,000) (2,680,000) _____________ ____________ ___________ ____________ Restated balance as at 31 December 2021 299,667,332 1,214,300 60,871,527 361,753,159 ==================== ==================== =================== =================== The notes on pages 49 to 104 form an integral part of these financial statements 42 SALCRA 2022 ANNUAL REPORT
SALCRA 2022 ANNUAL REPORT 43 Authority Attributable to Owners of the Authority Retained earnings RM Balance as at 1 January 2022 235,625,708 Total comprehensive loss for the year (7,328,891) ____________ Balance as at 31 December 2022 228,296,817 =================== Authority Attributable to Owners of the Authority Retained earnings RM Balance as at 1 January 2021 209,172,892 Total comprehensive income for the year 26,452,816 _____________ Balance as at 31 December 2021 235,625,708 =================== The notes on pages 49 to 104 form an integral part of these financial statements CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Group Authority 2022 2021 2022 2021 Notes RM RM RM RM Cash Flows from Operating Activities: Profit before tax 40,773,934 50,567,807 14,068,695 20,505,113 Adjustments for - Amortisation of biological assets 30 475,738 475,737 475,738 475,737 Amortisation of goodwill 30 - 400,000 - - Receivables written off 30 3,395 - - - Fair value adjustment on government loans 30 (6,519,294) (13,392,605) (6,519,294) (13,392,604) Depreciation of property, plant and equipment 30 45,435,094 44,182,567 25,837,750 25,141,000 Gain on disposal of property, plant and equipment 30 (97,398) (651,977) (97,398) (517,427) Impairment loss on property, plant and equipment 30 164,695 - - - Impairment loss on trade and other receivables 30 252,933 - 6,504 - Fair value loss on remeasurement of financial liabilities 30 - 201,491 - - Provision for losses 30 5,287,867 2,830,457 5,287,867 2,830,457 Fair value (gain)/loss in other investments 30 (33,099) 523,866 - 519,359 Interest expense 30 13,544,256 19,963,669 9,997,635 17,091,551 Interest income 30 (7,193,819) (4,061,929) (6,929,209) (3,537,565) Inventories written off 30 1,590,918 391,417 - - Property, plant and equipment written off 30 15,897 - - - Provision for employee benefits 22 3,018,519 451,742 1,178,107 451,742 Reversal of interest expense 30 - (148,415) - - Dividend income, gross 30 (92,000) (75,112) (10,042,000) (3,395,112) Amortisation of deferred income 30 (12,215,204) (7,018,544) (12,215,204) (7,018,544) Provision for impairment losses in an associate 30 - 445,353 - - Reversal of impairment losses in an associate 30 (240,579) - - - ______________ _____________ ____________ ____________ Operating profit before changes in working capital 84,171,853 95,085,524 21,049,191 39,153,707 The notes on pages 49 to 104 form an integral part of these financial statements 44 SALCRA 2022 ANNUAL REPORT
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Group Authority 2022 2021 2022 2021 Notes RM RM RM RM Cash Flows from Operating Activities (cont’d) (Increase)/ Decrease in inventories (16,414,029) 5,702,227 (1,244,791) 2,300,091 Decrease/(Increase) in trade and other receivables 9,658,227 (32,098,723) 2,571,813 (6,674,994) Decrease in amount due from subsidiaries - - - 816,034 827,761 (Decrease)/ Increase in amount due to subsidiaries - - 8,413,524 (12,529,863) Increase/ (Decrease) in trade and other payables 322,132 40,979,848 (11,471,596) 33,400,726 Increase in participants’ accounts (40,433,060) (11,465,238) (40,433,060) (11,465,238) Increase in amount due from an associate company 17,803 26,237 - - ______________ _____________ ____________ ____________ Cash flows generated from/(used in) operations 37,322,926 98,229,875 (20,298,885) 45,012,190 Taxes paid, net of refunds (16,367,751) (11,229,502) (8,431,529) (6,066,665) Interest paid (442,325) (362,248) (5,050) (120) Interest received 7,086,906 3,943,861 5,828,289 3,323,313 Dividends paid to non-controlling interest (7,850,000) (2,680,000) - - ______________ _____________ ____________ ____________ Net cash generated from/(used in) operating activities 19,749,756 87,901,986 (22,907,175) 42,268,718 ______________ _____________ ____________ ____________ The notes on pages 49 to 104 form an integral part of these financial statements SALCRA 2022 ANNUAL REPORT 45
46 SALCRA 2022 ANNUAL REPORT CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Group Authority 2022 2021 2022 2021 Notes RM RM RM RM Cash Flows from Investing Activities: Interest received - - 302,643 - Purchase of investment property (14,700) - - - Purchase of property, plant and equipment 7 (24,092,871) (28,130,270) (16,633,185) (12,947,783) Proceeds from disposal of property, plant and equipment 122,175 143,285 122,175 8,735 Decrease in biological assets 13 3,593,284 6,850,502 3,593,284 6,850,502 Increase in fixed deposits with maturity more than 3 months 12 (34,178,105) (60,018,109) (34,011,463) (57,614,383) Repayment of loan due from subsidiary - - 7,566,087 7,275,084 Share subscribed in subsidiaries - - - (3) Repayment of loan due from related company 146,061 140,442 146,061 140,442 Dividends received - - 9,742,000 3,320,000 _____________ ____________ ____________ ____________ Net cash used in investing activities (54,424,156) (81,014,150) (29,172,398) (52,967,406) _____________ ____________ ____________ ____________ Cash Flows from Financing Activities: Government grants received 23 14,355,000 18,000,000 14,355,000 18,000,000 (Increase)/ Decrease in fixed deposits pledged to banks 12 (8,126,047) 1,135,876 (77,874) (85,694) Drawdown of term loans - 74,999,950 - 74,999,950 Drawdown of trade finance 137,362,299 78,052,633 26,302,672 2,369,380 Repayment of trade finance and cashline (123,668,438) (61,659,146) (15,163,067) (1,800,866) Repayment of term loans (32,592,308) (48,085,908) (27,351,170) (38,242,132) Repayment of lease liabilities (2,207,910) (1,961,175) - - Term loan interest paid 31 (5,142,828) (5,287,409) (3,356,766) (3,688,074) Finance lease interest paid 31 (321,781) (412,362) - - Trade finance interest paid 31 (1,118,028) (509,045) (116,525) (10,753) ____________ ____________ ____________ ____________ Net cash (used in)/generated from financing activities (21,460,041) 54,273,414 (5,407,730) 51,541,811 ____________ ____________ ____________ ____________ Net (decrease)/increase in cash and cash equivalents (56,134,441) 61,161,250 (57,487,303) 40,843,123 Cash and cash equivalents brought forward 196,602,046 135,440,796 149,327,385 108,484,262 ____________ ____________ ____________ ____________ Cash and cash equivalents carried forward 19 140,467,605 196,602,046 91,840,082 149,327,385 =================== =================== =================== ===================
SALCRA 2022 ANNUAL REPORT 47 1. CORPORATE INFORMATION The Authority was established as Government Statutory Body under the Sarawak Land Consolidation and Rehabilitation Authority Ordinance, 1976. The objective of the Authority is to consolidate developing land for agriculture in Sarawak, especially Native Customary Land. The functions of the Authority are: i. To rehabilitate or develop land for agriculture:- - either on its own motion or in association with any public or private body or person or as managing agent otherwise on their behalf, any development area or land owned by or vested in the Authority; - at the request of the land owner thereof, and upon such terms and conditions as may be agreed to between the said owner and the Authority; ii. To promote and undertake agriculture development or project in the State; iii. Where any area has been declared to be Development Area, to plan and undertake the development of the land for agriculture on its own or in amalgamation with other agriculture units or agriculture public or private body; and iv. To initiate and carry out by itself or through its managing agents, projects or schemes for the development and improvement of agriculture. There have been no significant changes in the nature of these activities during the financial year. The financial statements were authorised for issue by the Board of Members in accordance with a resolution of the members on 2. COMPLIANCE WITH FINANCIAL REPORTING STANDARDS AND THE SARAWAK LAND CONSOLIDATION AND REHABILITATION AUTHORITY ORDINANCE, 1976 The consolidated financial statements of the Group and the separate financial statements of the Authority have been prepared based on the applicable approved accounting standards in Malaysia. Whilst the financial statements of the Authority need not comply with the provisions of the Companies Act, 2016, the financial statements of all its subsidiaries comply. The financial statements of the Group and the Authority comply with the Malaysian Private Entities Reporting Standard (MPERS) issued by the Malaysian Accounting Standards Board (MASB). 3. BASIS OF PREPARATION The consolidated financial statements of the Group and the separate financial statements of the Authority have been prepared using cost bases (which include historical cost, amortised cost, and lower of cost and net realisable value) and fair value bases (which include fair value basis and fair value less costs to sell basis). The consolidated financial statements of the Group comprise the Authority (as a parent) and all of its subsidiaries. Management has used estimates and assumptions in measuring the reported amounts of assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Judgements and assumptions are applied in the measurement, and hence, the actual results may not coincide with the reported amounts. The areas involving estimation uncertainties are disclosed in Note 4(v). NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
4. SIGNIFICANT ACCOUNTING POLICIES (a) Business Combinations and Consolidation (i) Business Combinations The Group applies the acquisition method to account for all business combinations. If the acquisition of an asset or a group of assets does not constitute a business, it is accounted for as an asset acquisition. The Group identifies the acquisition date of a business combination as the date on which the Group obtains control of an acquiree. Control is obtained when the group commences to have the power to direct financial and operating policy decisions of the investee so as to obtain benefits from its activities. This may require fulfilment of precedent conditions, such as completion of due diligence audit, and shareholders’ approvals if they are specified in a sale and purchase agreement. As of the acquisition date, the Group recognises, separately from goodwill, the identifiable asset acquired (including identifiable intangible assets), the liabilities assumed (including contingent liabilities) and any non-controlling interests in the acquiree. The identifiable assets acquired and liabilities assumed are measured at their acquisition-date fair values, except for those permitted or required to be measured on other bases by MPERS. Non-controlling interest at the acquisition date is measured at its acquisition date share of net assets, excluding goodwill. The cost of a business combination is measured at fair value, calculated as the sum of the acquisition-date fair value of assets transferred (including contingent consideration), the liabilities incurred to former owners of the acquiree and the equity instruments issued by the Group. Expenses incurred in connection with a business combination are capitalised in the cost of business combination. The cost of a business combination is allocated to the share of net assets acquired to determine the initial amount of goodwill on combination. In a business combination achieved in stages (including acquisition of a former associate or a former joint venture), the cost of each exchange transaction is compared with the share of net assets to determine the goodwill of each exchange transaction on a step-by-step basis. Any increase in equity interest in an investee after the acquisition date is accounted as an equity transaction between the parent and the non-controlling interests and the effect is adjusted directly in equity. If the initial accounting for a business combination is not completed by the end of the reporting period in which the combination occurs, the Group uses provisional fair value amounts for the items for which the accounting is incomplete. The provisional amounts are adjusted to reflect new information obtained about facts and circumstances that exist as of the acquisition date, including additional assets or liabilities identified in the measurement period. The measurement period for completion of the initial accounting ends after one year from the acquisition date. (ii) Subsidiaries and Basis of Consolidation The Group recognises a subsidiary based on the criterion of control. A subsidiary is an entity (including special purpose entities) over which the Group has the power to govern the financial and operating policy decisions of the investee so as to obtain benefits from its activities. In circumstances when the voting rights are not more than half or when voting rights are not the dominant determination of control, the Group uses judgements to assess whether it has de facto control, ontrol by other arrangements (including control of special purpose entities), or by holding substantive potential voting rights. On 15 October 2021, Mayang Tea Sdn. Bhd. (MTSB) had entered into voluntary winding up process and control over MTSB had ceased. As a result, it was not included in the consolidated financial statements. The financial statements of the Authority and all its subsidiaries used in the preparation of the consolidated financial statements are prepared as of the same reporting date of 31 December 2022. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 48 SALCRA 2022 ANNUAL REPORT