SALCRA Annual Report 2022

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Business Combinations and Consolidation (continued) (ii) Subsidiaries and Basis of Consolidation (continued) The consolidated financial statements are prepared using uniform accounting policies for like transactions, other events and conditions in similar circumstances. The carrying amount of investment in each subsidiary of a parent in the Group is eliminated against the parent’s portion of equity in each subsidiary. The consolidated financial statements combine line-to-line items of assets, liabilities, equity, income, expenses and cash flows of the Authority and all its subsidiaries. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statements of comprehensive income from the effective date of acquisition (which is the date the Group assumes control of an investee) or up to effective date of disposal (which is the date the Group ceases to have control of an investee). All intra-group balances and transactions are eliminated in full on consolidation. Unrealised profits and losses arising from intra-group transactions are also eliminated in full on consolidation, except when an unrealised loss is an impairment loss. When the Group ceases to control a subsidiary, the difference between the proceeds from the disposal of the subsidiary and its carrying amount at the date that control is lost is recognised in profit or loss in the statements of comprehensive income as a gain or loss on disposal of the subsidiary. The cumulative amount of any exchange differences that relate to a foreign subsidiary recognised in other comprehensive income is not reclassified to profit or loss on disposal of the subsidiary. If the Group retains an equity interest in the former subsidiary, it is accounted for as a financial asset (provided it does not become an associate or a joint venture). The carrying amount of the investment retained at the date that the entity ceases to be a subsidiary is regarded as the cost on initial measurement of the financial asset. Any decrease in equity stake in a subsidiary that does not result in a loss of control is accounted for as an equity transaction and the financial effect is adjusted directly in the consolidated statements of changes in equity. (iii) Non-controlling interests Non-controlling interests in a partly-owned subsidiary represents its share of net assets, other than goodwill, of the subsidiary and is presented as a component of equity separately from owners’ equity. Non-controlling interest is initially measured at acquisition-date share of net assets other than goodwill as of the acquisition date and is subsequently adjusted for the changes in the net assets of the subsidiary after the acquisition date. The group treats a change in a parent’s controlling interest in a subsidiary that does not result in a loss of control as a transaction with equity holders in their capacity as equity holders. Accordingly, the carrying amount of the non-controlling is adjusted to reflect the change in the parent’s interest in the subsidiary’s net assets. Any difference between the amount by which the non-controlling interest is so adjusted and the fair value of the consideration paid or received, if any, is recognised directly in equity and attributed to the owner of the parent. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 49

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Business Combinations and Consolidation (continued) (iv) Associates The Group recognises an associate based on the criterion of significant influence. Significant influence exists when the Group has the power to participate in the financial and operating policy decisions of the investee but has no control or joint control of those policies. This is normally (though not necessarily) accomplished when the Group directly or indirectly through subsidiaries, holds 20 per cent or more of the voting rights of the investee. When the Group’s voting rights in an investee are less than 20 per cent, the Group assesses whether it has significant influence by examining all relevant facts and circumstances, including the existence of potential voting rights that are substantive, representation on the board members, participation in policy-making processes, material transactions between the Group and the investee, interchange of managerial personnel and provision of essential technical information. The Group may sometimes hold an insignificant equity interest in an investee to cement a trading relationship and is represented on the board of directors of the investee. If the Group’s representation on the board members is solely for the purpose of protecting the value of the investment rather than participation in the policy decisions, the investee is not classified as an associate. The Group measures all investment in associates using the equity method. Equity Method In the consolidated financial statements of the Group, investment in associates is accounted for under the equity method. Under this method, on initial recognition, the investment in an associate or a joint venture is measured at cost. Subsequently, the carrying amount is increased or decreased to recognise the Group’s: (i) share of the investee’s profit or loss through profit or loss; (ii) share of the investee’s other comprehensive income through other comprehensive income; and (iii) share of the investee’s changes in other net assets through equity. In applying the equity method, the Group uses the financial statements of its associates as of the same date as the financial statements of the Group. If the Group’s share of losses of an associate equals or exceeds the carrying amount of its investment in the investee, the Group discontinues recognising its share of further losses. After the Group’s interest is reduced to zero, it recognises additional losses by a provision only to the extent that it has incurred legal or constructive obligations or has made payments on behalf of the investee. Unrealised gains and losses arising from transactions between the Group and its associates are eliminated partially to the extent of the Group’s interests in the associates, except when there are indications of impairment losses. This partial elimination principle applies to a transfer of non-monetary assets to an associate in exchange for equity interests in the investee. (b) Separate Financial Statements In the separate financial statements of the Authority, investments in subsidiaries and associates are measured at cost less any accumulated impairment losses. Cost at initial recognition comprises cash, and fair values of other considerations transferred and liabilities assumed, and it includes acquisition-related expenses. Dividend declared by an investee is recognised as income when the Authority’s right to receive dividend has been established, which is generally the date the dividend is appropriately authorised by the investee. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 50 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Foreign Currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rate at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date the fair value was determined. In the consolidated financial statements, foreign currency exchange gains and losses arising from monetary item that forms part of the Group’s net investment in a foreign operation (i.e. a receivable from or a payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future) are recognised in other comprehensive income, and are presented in the foreign currency translation reserve (“FCTR”) in equity. The foreign currency differences accumulated in equity is not reclassified to profit or loss on disposal of the net investment. In the separate financial statements, all foreign currency differences are recognised in the statements of comprehensive income. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to RM at exchange rates at the dates of the transactions. (d) Property, Plant and Equipment (PPE) Operating tangible assets that are used for more than one accounting period in the production and supply of goods and services, for administrative purposes or for rental to others are recognised as property, plant and equipment when the Group and the Authority obtain control of the assets. The assets, including major spares, stand-by equipment and servicing equipment, are classified into appropriate classes based on their nature. Any subsequent replacement of a significant component in an existing asset is capitalised as a new component in the asset and the old component is derecognised. All property, plant and equipment are initially measured at cost. For a purchased asset, cost comprises purchase price plus all directly attributable costs incurred in bringing the asset to its present location and condition for management’s intended use. For a self-constructed asset, cost comprises all direct and indirect costs of construction (including provision for restoration and cost of major inspection) but excludes internal profits. For an exchange of non-monetary asset that has a commercial substance, cost is measured by reference to the fair value of the asset received. For an asset transferred from a customer or a grantor, cost is measured by reference to the fair value of the asset. All property, plant and equipment are subsequently measured at cost less accumulated depreciation and accumulated impairment losses. Freehold land and capital work-in-progress are not depreciated but are subject to impairment test if there is any indication of impairment. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 51

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Property, Plant and Equipment (PPE) All other property, plant and equipment are depreciated by allocating the depreciable amount of a significant component or of an item over the remaining useful life. The depreciation methods used and the useful lives of the respective classes of property, plant and equipment are as follows: Method Useful life Land Straight-line Remaining lease term Buildings Straight-line 5 - 10% Plant, machinery and equipment Straight-line 10 - 20% Furniture, fittings and office equipment Straight-line 10 - 20% Infrastructure and loading ramp Straight-line 5 - 10% Mobile equipment Straight-line 20% At the end of each reporting period, the residual values, useful lives and depreciation methods for the property, plant and equipment are reviewed for reasonableness. Any change in estimate of an item is adjusted prospectively over its remaining useful life, commencing in the current period. Fully depreciated assets are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these assets. Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and the net carrying amount is recognised in the statements of comprehensive income. (e) Biological Assets The biological assets of the Group comprise: (i) bearer biological plants of oil palm; (ii) non-bearer biological plant of bamboo and gaharu. Bearer plants of oil palms are measured at cost less accumulated amortisation and accumulated impairment losses. Cost of bearer plants consists of accumulated plantation development costs incurred from commencement of planting of seedlings up to maturity of the crop cultivated. Capitalisation of plantation development and other operating costs ceases upon commencement of commercial harvesting, which is 3 years for oil palms. The bearer plants of oil palm are amortised on the straight-line basis over the estimated useful life of 25 years. The amortisation method and the useful life of a crop in each are (determined by fields of planting or replanting) are reviewed at the end of each reporting period, and any change in estimate is applied prospectively over the remaining useful life of the crop, commencing in the current period. When a bearer crop has reached the end of its useful life and is replanted, the carrying amount of the old bearer crop is derecognised, and the new bearer crop is treated as a replacement of the old bearer crop and capitalised. The non-bearer plant of bamboo and gaharu are measured at cost less accumulated amortisation and accumulated impairment losses. Cost of non-bearer plants consists of accumulated plantation development costs incurred from commencement of planting of seedlings up to maturity of the crop cultivated, which is 7 years. Capitalisation of plantation development and other operating costs ceases upon maturity of the crop. The amortisation method and the estimated useful lives of the non-bearer plants are as follows: Method Useful life (years) Bamboo Straight-line 30 Gaharu Straight-line 30 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 52 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) Goodwill and Other Intangible Assets (i) Goodwill and Bargain Purchase The Group does not recognise internally generated goodwill. In a business combination accounted for under the acquisition method, purchased goodwill is recognised as an asset as of the acquisition date, measured at the difference between cost of investment and share of net assets acquired. Non-controlling interests’ share of goodwill is not recognised. In the rare occasion when the share of net assets acquired exceeds the cost of combination, a reassessment of the acquisition-date accounting is performed, and any remaining excess is recognised immediately in the statements of comprehensive income as a bargain purchase gain and attributed to the owners of the parent only. Purchased goodwill, including goodwill on acquisition of an interest in an associate, is amortised on the straight-line basis over 10 years and is subject to impairment test whenever there is any indication of impairment. (ii) Research and Development Costs All research costs and development costs are recognised as an expense when incurred, except for development cost that is part of the cost of a recognised asset, in which case, the cost is capitalised in that recognised asset. (g) Construction Contracts The Group’s contract accounting is usually applied separately to each construction contract with a customer. However, when a contract covers a number of assets, the construction of each asset is treated as a separate contract when: (a) separate proposals have been submitted for each asset; (b) each asset has been subject to separate negotiation, and the contractor and customer are able to accept or reject that part of the contract relating to each asset; and (c) the costs and revenues for each asset can be identified. Conversely, a group of contracts, whether with a single customer or with several customers, is treated as single construction contract when: (a) the group of contracts is negotiated as a single package; (b) the contracts are so closely related that they are, in effect, part of a single project with an overall profit margin; and (c) the contracts are performed concurrently or in a continuous sequence. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period. The stage of completion is measured by the proportion that costs incurred for work performed to date bear to the estimated total costs. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable and contract costs are recognised as an expense in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue on a contract, the expected loss is recognised as an expense immediately, with a corresponding provision for an onerous contract. When the aggregate of: (i) costs incurred; plus (ii) recognised progressive profits; less (iii) recognised foreseeable losses exceed the progress billings to date of contracts with customers, the excess is recognised and presented as a gross amount due from customers (a current asset). Conversely, when that aggregate is less than the progress billings, the shortfall is recognised and presented as a gross amounts due to customers (a current liability). NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 53

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Inventories Agricultural produce is measured at fair value less costs to sell at point of harvest. Processed agricultural commodities are measured at fair value less costs to sell on completion of production in accordance with well- accepted industry practices. Fair value is determined using a quoted price in an active market. All other inventories are measured at the lower of cost and net realisable value (which is the estimated selling price less costs to complete and sell). Cost comprises purchase price and directly attributable costs of bringing the inventories to their present location and condition. For manufactured goods, cost includes conversion costs of labour and variable and fixed production overheads. For items of inventory that are individually significant or are segregated for individual projects, cost is measured using the specific identifiable method. For homogeneous items of inventory, cost is determined by the weighted average cost formula. Net realisable value is determined on an item-by-item basis or on group of similar items basis. (i) Participants’ Accounts Participant accounts comprise revenue derived from sales of produce less development cost, and distribution to the participants and allocation of fund to replanting reserve and general reserve. When development costs exceed surplus generated from sales of crops, the balance represents a debt due from the scheme participants. When the surplus exceed the development costs, the balance represent an amount owing to the scheme participant. Expenditure incurred by the Group and the Authority in developing the land schemes is stated at cost. (j) Cash and cash equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank balances and fixed deposits pledged with licensed banks. (k) Impairment of Non-Financial Assets An impairment loss arises when the carrying amount of a Group’s and Authority’s asset exceeds its recoverable amount. For the purpose of impairment testing of non-financial assets, goodwill is allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of business combinations. At the end of each reporting date, the Group and the Authority assess whether there is any indication that a stand-alone asset or a cash-generating unit may be impaired by using external and internal sources of information. If any such indication exists, the Group and the Authority estimate the recoverable amount of the asset or cash-generating unit. If an individual asset generates independent cash inflows, it is tested for impairment as a stand-alone asset. If an asset does not generate independent cash inflows, it is tested for impairment together with other assets (including any allocated goodwill) in a cash-generating unit, at the lower level in which independent cash inflows are generated and monitored for internal management purposes. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and the value in use. The Group and the Authority determine the fair value less costs to sell of an asset or a cash-generating unit in a hierarchy based on: (i) price in a binding sale agreement; (ii) market price traded in an active market; and (iii) estimate of market price using the best available information. The value in use is estimated by discounting the net cash inflows (by an appropriate discount rate) of theasset or unit, using reasonable and supportable management’s budgets and forecasts of five years and extrapolation of cash inflows for periods beyond the five-year forecast or budget. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 54 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Impairment of Non-Financial Assets (continued) For an asset measured on a cost-based model, any impairment loss is recognised in profit or loss. For a property, plant and equipment measured on the revaluation model, any impairment loss is treated as a revaluation decrease. For a cash-generating unit, any impairment loss is first allocated to reduce the carrying amount of goodwill allocated to the unit, if any, and the balance of the impairment loss is then allocated to the other assets of the unit pro rata based on the relative carrying amounts of the assets. The Group and the Authority reassess the recoverable amount of an impaired asset or a cash-generating unit if there is any indication that an impairment loss recognised previously may have reversed. Other than goodwill, any reversal of impairment loss for an asset carried at a cost-based model is recognised in profit or loss, subject to the limit that the revised carrying amount does not exceed the amount that would have been determined if no impairment loss had been recognised previously. Impairment loss of goodwill is not reversed. (l) Financial Instruments (i) Initial Recognition and Measurement The Group and the Authority recognises a financial asset or a financial liability (including derivative instruments) in the statements of financial position when, and only when, an entity in the Group and the Authority becomes a party to the contractual provisions of the instrument. On initial recognition, all financial assets (including intra-group loans and advances) and financial liabilities (including intra-group payables) are measured at fair value, which is generally the transaction price, plus transaction costs if the financial asset or financial liability is not measured at fair value through profit or loss. For instruments measured at fair value through profit or loss, transaction costs are expensed to profit or loss when incurred. For intra-group loans and advances, and other contractual arrangements, that constitute a financial transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. (ii) Derecognition of Financial Instruments For derecognition purposes, the Group and the Authority first determine whether a financial asset or a financial liability should be derecognised in its entirety as a single item or derecognised part-by-part of a single item or of a group of similar items. A financial asset, whether as a single item or as a part, is derecognised when, and only when, the contractual rights to receive the cash flows from the financial asset expire, or when the Group and the Authority transfer the contractual rights to receive cash flows of the financial asset, including circumstances when the Group and the Authority act only as a collecting agent of the transferee, and retain no significant risks and rewards of ownership of the financial asset or no continuing involvement in the control of the financial asset transferred. A financial liability is derecognised when, and only when, it is legally extinguished, which is either when the obligation specified in the contract is discharged or cancelled or expires. A substantial modification to the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. For this purpose, the Group and the Authority consider a modification as substantial if the present value of the revised cash flows of the modified terms discounted at the original effective interest rate differs by 10% or more when compared with the carrying amount of the original liability. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 55

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Financial Instruments (continued) (iii) Subsequent Measurement of Financial Assets For the purpose of subsequent measurement, the Group and the Authority classify financial assets into three categories, namely: (i) financial assets at fair value through profit or loss; (ii) financial assets at amortised cost; and (iii) equity instruments at cost less impairment. After initial recognition, the Group and the Authority measure investments in unit trusts at their fair values by reference to the active market prices. The investment in unquoted preference shares is measured at amortised cost whose fair value cannot be reliably measured. Investments in unquoted equity instruments and whose fair value cannot be reliably measured are measured at cost. Other than financial assets measured at fair value through profit or loss, all other financial assets are subject to review for impairment in accordance with Note 4(l)(vii). (iv) Subsequent Measurement of Financial Liabilities After initial recognition, the Group and the Authority measure all financial liabilities at amortised cost using the effective interest method, except for government loans which existed as at the date of transition (i.e. 1 January 2015). In accordance with Section 35.9 of MPERS, the Group and the Authority shall not retrospectively change the accounting for government loans which existed at the date of transition. As allowed by Section 35.9(f), the Group and the Authority shall use its previous GAAP carrying amount of the government loans at the date of transition to MPERS, as the carrying amount of the government loans at that date and the Group and the Authority shall not recognise the benefit of any government loan at a below-market rate of interest as a government grant. Government loans received after the date of transition are measured using the requirements in Section 11 Basic Financial Instruments and Section 24 Government Grants. (v) Fair Value Measurement of Financial Instruments The fair value of a financial asset or a financial liability is determined by reference to the quoted market price in an active market, and in the absence of an observable market price, by a valuation technique as described in Note 4(u). (vi) Recognition of Gains and Losses Fair value changes of financial assets and financial liabilities classified as at fair value through profit or loss are recognised in statements of comprehensive income when they arise. For financial assets and financial liabilities carried at amortised cost, a gain or loss is recognised in the statements of comprehensive income only when the financial asset or financial liability is derecognised or impaired, and through the amortisation process of the instrument. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 56 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Financial Instruments (continued) (vii) Impairment and Uncollectability of Financial Assets The Group and the Authority apply the incurred loss model to recognise impairment losses of financial assets. At the end of each reporting period, the Group and the Authority examine whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Evidences of trigger loss events include: (i) significant difficulty of the issuer or obligor; (ii) a breach of contract, such as a default or delinquency in interest or principal payment; (iii) granting exceptional concession to a customer; (iv) it is probable that a customer will enter bankruptcy or other financial reorganisation; (v) the disappearance of an active market for that financial asset because of financial difficulties; or (vi) any observable market data indicating that there may be a measurable decrease in the estimated future cash flows from a group of financial assets. For a non-current loan and receivable carried at amortised cost, the revised estimated cash flows are discounted at the original effective interest rate. Any impairment loss is recognised in profit or loss and a corresponding amount is recorded in a loss allowance account. Any subsequent reversal of impairment loss of the financial asset is reversed in the statements of comprehensive income with a corresponding adjustment to the allowance account, subject to the limit that the reversal should not result in the revised carrying amount of the financial asset exceeding the amount that would have been determined if no impairment loss had been recognised previously. For short-term trade and other receivables, where the effect of discounting is immaterial, impairment loss is tested for each individually significant receivable wherever there is any indication of impairment. Individually significant receivables for which no impairment loss is recognised are grouped together with all other receivables by classes based on credit risk characteristics and aged according to their past due periods. A collective allowance is estimated for a class group based on the Group’s and the Authority’s experiences of loss ratio in each class, taking into consideration current market conditions. For an unquoted equity instrument measured at cost less impairment, the impairment is the difference between the asset’s carrying amount and the best estimate (which will necessarily be an approximation) of the amount (which might be zero) that the Group and the Authority expect to receive for the asset if it were sold at the reporting date. The Group and the Authority may estimate the recoverable amount using an adjusted net asset value approach. (m) Leased assets (i) Finance lease Leases in terms of which the Group or the Authority assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequently to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are recognised as expenses in the statements of comprehensive income in the periods in which they are incurred. Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as investment property which is held to earn rental income or for capital appreciation or for both. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 57

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Leased assets (continued) (ii) Operating Lease Leases, where the Group or the Authority does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Payments made under operating leases are recognised in the statements of comprehensive income on a straight-line basis over the term of the lease, except for lease arrangement where the operating lease payments are structured to increase in line with expected general inflation. Lease incentives received are recognised in the statements of comprehensive income as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to the statements of comprehensive income in the reporting period in which they are incurred. Leasehold land which in substance is an operating lease is classified as prepaid lease payments. (n) Income Tax Tax payable is determined by each individual entity in the Group. Current tax for current and prior periods, to the extent unpaid, is recognised as a current tax liability. If the amount already paid in respect of current and prior period exceeds the amount due for those periods, the excess is recognised as a current tax asset. Current tax liability/(asset) is measured at the amount the entity expects to pay/ (recover) using tax rates and laws that have been enacted or substantially enacted as of the reporting date. A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from: (a) the initial recognition of goodwill; or (b) 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/(loss) nor taxable profit/(loss). The exceptions for initial recognition differences include items of property, plant and equipment that do not qualify for capital allowances and acquired intangible assets that are not deductible for tax purposes. However, taxable temporary differences related to investments in subsidiaries and branches are not recognised if the parent or an entity in the Group is able to control the timing of the reversal of the temporary differences and is probable that the temporary differences will not be reversed in the foreseeable future. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit/(loss) nor taxable profit/(loss). The exceptions for the initial recognition differences include non-taxable Government grants received and reinvestment allowances and investment tax allowances on qualifying property, plant and equipment. However, for deductible temporary differences related to investments in subsidiaries and branches, a deferred tax asset is recognised to the extent that, it is probable that the temporary differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. A deferred tax asset is also recognised for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. Unused tax credits do not include unabsorbed reinvestment allowances and unabsorbed tax allowances because the Group treats these as part of the initial recognition differences. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 58 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (n) Tax Assets and Tax Liabilities Deferred taxes are measured using tax rates (and tax laws) that have been enacted or substantially enacted at the end of the reporting period. The measurement of deferred taxes reflects the tax consequences that would follow from the manner in which an entity in the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets or liabilities. For an investment property, measured at fair value, if the owner-entity in the Group does not have a business model to hold the property solely for rental income, the deferred tax liability on the fair value gain is measured on the presumption that the property is recovered through sale at the end of the reporting period. At the end of the reporting period, the carrying amount of a deferred tax asset is reviewed, and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of a part or all of that deferred tax asset to be utilised. Any such reduction will be reversed to the extent that it becomes probable that sufficient taxable profit will be available. A current or deferred tax is recognised as income or expense in profit or loss for the period, except to the extent that the tax arises from items recognised outside profit or loss. For an income or expense item recognised in other comprehensive income, the current or deferred tax expense or tax income is recognised in other comprehensive income. For items recognised directly in equity, the related tax effect is also recognised directly in equity. Deferred tax assets and liabilities arising from a business combination, including tax effects of any fair value adjustment, are recognised as part of the net assets acquired. (o) Employee Benefits The Group and the Authority recognise a liability when an employee has provided service in exchange for employee benefits to be paid in the future and an expense when the Group and the Authority consume the economic benefits arising from service provided by an employee in exchange for employee benefits. (i) Short-Term Employee Benefits Wages and salaries are usually accrued and paid on a monthly basis and are recognised as an expense, unless they relate to cost of producing inventories or other assets. Paid absences (annual leave, maternity leave, paternity leave, sick leave, etc.) are accrued in each period if they are accumulating paid absences that can be carried forward, or in the case of non-accumulating paid absences, recognised as and when the absences occur. Bonus payments are recognised when, and only when, the Group has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. (ii) Post-Employment Benefits- Defined Contribution Plans As required by law, the Group and the Authority make contribution to the State pension schemes, namely, the Employees Provident Fund (“EPF”) and Pension Fund, which are recognised as an expense in the statements of comprehensive income as incurred. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 59

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Provisions The Group and the Authority recognise a liability as a provision if the outflows required to settle the liability are uncertain in timing or amount. A provision for warranty costs, restoration costs, restructuring costs, onerous contracts or lawsuit claims is recognised when the Group and the Authority have a present legal or constructive obligation as a result of a past event, and of which the outflows of resources on settlement are probable and a reliable estimate of the amount can be made. No provision is recognised if these conditions are not met. Any reimbursement attributable to a recognised provision from a counter-party (such as an insurer) is not off-set against the provision but recognised separately as an asset when, and only when, the reimbursement is virtually certain. A provision is measured at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. For a warranty provision, a probability-weighted expected outcome of the resources required to settle the obligation is applied, taking into account the Group’s and the Authority’s experiences of similar transactions and supplemented with current facts and circumstances. For a restoration provision, where a single obligation is being measured, the Group and the Authority use the individual most likely outcome as the best estimate of the liability by reference to current prices that contractors would charge to undertake such obligations, and taking into account likely future events that may affect the amount required to settle an obligation. For an onerous contract, a provision is measured based on the amount by which costs to fulfil the contract exceed the benefits. For a lawsuit provision, a probability-weighted expected outcome is applied in the measurement, taking into account past court judgements made in similar cases and advice of legal experts. A provision is measured at the present value of the expenditure expected to be required to settle the obligation using a discount rate that reflects the time value of money and the risk that the actual outcome might differ from the estimate made. The unwinding of the discount is recognised as an interest expense. (q) Investment property Investment property which is held to earn rentals or for capital appreciation or both, is measured initially at its cost. Transaction costs are included in the initial measurement. After recognition as investment property, items of investment property whose fair value can be measured reliably without undue cost or effort are measured at fair value at each reporting date with changes in fair value recognised in profit or loss. If a reliable measure of fair value is no longer available without undue cost or effort for an item of investment property measured at fair value, it is thereafter accounted for as property, plant and equipment in accordance with Section 17 of the MPERS. The carrying amount of the investment property on that date becomes its cost. (r) Borrowing Costs The Group and the Authority do not recognise Government grants, including non-monetary grants at fair value, until there is reasonable assurance that the Group and the Authority will comply with the conditions attaching to the grants and the grants will be received. The Group’s and the Authority’s Government grants include Government assistance for participation in social projects in undeveloped areas which may have no conditions specifically relating to the Group’s and the Authority’s operating activities. On initial recognition of a Government loan at below-market interest rate, the difference between the nominal value of the loan and its fair value is treated as a deferred income and amortised to the statements of comprehensive income annually at an amount equivalent to the interest expense incurred over the term of the loan. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 60 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r) Borrowing Costs (continued) A grant that takes the form of a transfer of a non-monetary asset, such as a land, is measured at the fair value of the asset if the fair value is readily determinable. Otherwise, it is recorded at the nominal amount paid. Grants related to non-monetary assets and other grants received but not yet recognised in the statements of comprehensive income are presented as a deferred income and recognised in profit or loss on a straight-line basis over the useful lives of the related assets or over the terms of the grants received, whichever is applicable. (s) Borrowing Costs Borrowing costs of the Group and the Authority include interest on loans, finance lease liabilities and interest expense of other debt instruments calculated using the effective interest method. All borrowing costs are recognised as an expense when incurred except for the government loans as disclosed in Note 20 (ii). (t) Revenue Recognition and Measurement The Group’s revenue comprises sales of crude palm oil and palm kernel, fresh fruit bunches, fertilizer, provision of transportation services for agricultural products and services of engineering contracts with customers. The Group and the Authority measure revenue from a sale of goods or a service transaction at fair value of the consideration received or receivable, which is usually the invoice price, net of any trade discounts and volume rebates given to the customer. For a multiple-element contract with a customer, the fair value of the consideration receivable is allocated to the identifiable elements on the relative stand-alone selling price basis. Revenue from a sale of goods and services is recognised when: (a) the Group or the Authority has transferred to the buyer the significant risks and rewards of ownership of the goods; (b) the Group or the Authority retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of the revenue can be measured reliably; (d) it is probable that the economic benefits associated with the transaction will flow to the Group or the Authority; and (e) the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from other incidental agricultural activities is recognised when services are rendered. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, and associated costs. For rendering of a construction service in respect of land development, road upgrading and construction of plantation staff quarters and bridges that is performed over time, when the outcome of the contract can be estimated reliably, revenue is recognised over time by reference to the stage of completion of the contract at the end of the reporting period. The method used to measure the stage of completion is the proportion that costs incurred to date bear to the estimated total costs of the contract. When the outcome of a service contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Other income items of the Group, presented separately from revenue, are recognised using the following bases: (a) Interest income from a debt instrument is recognised using the effective interest method; (b) Rental income is recognised on an accrual basis when the services are rendered; and (c) Dividend from an equity investment is recognised when the Group’s or the Authority’s right, as a shareholder of the investee, is established, which is the date the dividend is appropriately authorised. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 61

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (u) Fair Value Measurement For assets, liabilities and equity instruments (whether financial or non-financial items) that require fair value measurement or disclosure, the Group and the Authority establish a fair value measurement hierarchy that gives the highest priority to quoted prices (unadjusted) in active markets for identical assets, liabilities or equity instruments and the lowest priority to unobservable inputs. A fair value measurement of an item is estimated using a quoted price in an active market if that price is observable. The active market is principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability; and for which the Group and the Authority can enter into a transaction for the asset or liability at the price in that market at the measurement date. In the absence of an active market price, the fair value of an item is estimated by an established valuation technique using inputs from the marketplace that are observable for substantially the full term of the asset or liability. In the absence of both market price and observable inputs, a fair value measurement of an item is estimated by an established valuation technique using unobservable inputs, including internally developed assumptions that are reasonable and supportable. (v) Critical Judgements and Estimation Uncertainties (i) Judgements and Assumptions Applied Classification of Finance and Operating Leases The Group and the Authority classifies a lease as a finance lease or an operating lease based on the criterion of the extent to which significant risks and rewards incidental to ownership of the underlying asset lies. As a lessee, the Group and the Authority recognises a lease as a finance lease if it is exposed to significant risks and rewards incidental to ownership of the underlying asset. In applying judgements, the Group and the Authority considers whether there is significant economic incentive to exercise a purchase option and any optional renewal periods. A lease is classified as a finance lease if the lease term is for at least 75% of the economic life of the underlying asset, the present value of the lease payments is at least 90% of the fair value of the underlying asset, or the identified asset in the lease is a specialised asset which can only be used substantially by the lessee. All other leases that do not result in a significant transfer of risks and rewards are classified as operating leases. The Group and the Authority classifies a lease of land as a finance lease if the fair value of the leasehold land is 90% or more of the fair value of an equivalent freehold land or if the lease period, determined at the inception of the lease, is 50 years or more. Leases of land that do not meet any of these criteria are classified as operating leases. (ii) Estimation Uncertainties The measurement of some assets and liabilities requires management to use estimates based on various observable inputs and other assumptions. The areas or items that are subject to significant estimation uncertainties of the Group and the Authority are in measuring: (a) provisions; (b) value-in-use of non-financial assets in impairment testing; (c) impairment losses of financial assets; (d) depreciation of property, plant and equipment; (e) measurement of income taxes; (f) measurement of defined benefit liabilities; (g) impairment or write-down of slow-moving and obsolete inventories; and (h) measurement of revenue and expenses in construction contracts. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 62 SALCRA 2022 ANNUAL REPORT

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) Critical Judgements and Estimation Uncertainties (continued) (ii) Estimation Uncertainties (continued) (a) Measurement of a Provision The Group and the Authority use a “best estimate” as the basis for measuring a provision. The management evaluates the estimates based on the Group’s and the Authority’s historical experiences and other inputs or assumptions, current developments and future events that are reasonably possible under the particular circumstances. In the case when a provision relates to large population of customers (such as a warranty provision), a probability-weighted estimate of the outflows required to settle the obligation is used. In the case of a single estimate (such as a provision for environmental restoration costs), a referenced contractor’s price or market price is used as the best estimate. If an obligation is to be settled over time, the expected cash outflows are discounted at a rate that takes into account the time value of money and the risk that the actual outcome might differ from the estimate made. (b) Determining the Value-in-Use The Group and the Authority allocate goodwill to cash-generating units for the purpose of impairment testing. In determining the value-in-use of a cash-generating unit, management uses reasonable and supportable inputs about sales, costs of sales and other expenses based upon past experiences, current events and reasonably possible future development. Cash flows are projected based on those inputs and discounted at an appropriate discount rate(s). The actual outcome or event may not coincide with the inputs or assumptions and the discount rate applied in the measurement, and this may have a significant effect on the Group’s and the Authority’s financial position and results. (c) Impairment losses of Financial Assets The Group and the Authority recognise impairment losses for loans and receivables using the incurred loss model. Individually significant loans and receivables are tested for impairment separately by estimating the cash flows expected to be recoverable. All others are grouped into credit risk classes and tested for impairment collectively, using the Group’s and the Authority’s past experiences of loss statistics, ageing of past due amounts and current economic trends. The actual eventual losses may be different from the allowance made and this may affect the Group’s and the Authority’s financial position and results. (d) Depreciation of Property, Plant and Equipment The cost of an item of property, plant and equipment is depreciated on the straight-line method or another systematic method that reflects the consumption of the economic benefits of the asset over its useful life. Estimates are applied in the selection of the depreciation method, the useful lives and the residual values. The actual consumption of the economic benefits of the property, plant and equipment may differ from the estimates applied and this may lead to a gain or loss on an eventual disposal of an item of property, plant and equipment. (e) Measurement of Income Taxes Significant judgement is required in determining the Group’s and the Authority’s provision for current and deferred taxes because the ultimate tax liability for the Group and the Authority as a whole is uncertain. When the final outcome of the tax payable is determined with the tax authorities in each jurisdiction, the amounts might be different from the initial estimates of the tax payable. Such differences may impact the current and deferred tax in the period when such determination is made. The Group and the Authority will adjust for the differences as over or under provision of current or deferred taxes in the current period in which those differences arise. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 63

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Critical Judgements and Estimation Uncertainties (ii) Estimation Uncertainties (continued) (f) Defined Benefit Liabilities or Assets The measurement of the present value of defined benefit obligations is based on a number of assumptions and factors. The assumptions used in the measurements of the defined benefit costs and the related liabilities include projected employee salaries, employee turnover, inflation, interest cost and an appropriate discount rate. Any changes in these assumptions will have an impact on the carrying amount of the defined benefit obligations. (g) Impairment or Write-Down of Slow-Moving and Obsolete Inventories The Group and the Authority write down its slow-moving and obsolete inventories based on assessment of their fair value less costs to sell. Inventories are written down when events and circumstances indicate that the carrying amounts may not be recoverable. Management uses its judgement to analyse past sales trend and current economic trends to evaluate the adequacy of the impairment loss for slow-moving and obsolete inventories. The actual impairment loss can only be confirmed in any subsequent sales of those inventories and this may differ from the estimates made earlier. This may affect the Group’s and the Authority’s financial position and results. (h) Measurement of Revenue and Expenses in Construction Contracts The Group and the Authority applies the percentage of completion method to account for all of its construction contracts with customers. This method requires reliable estimation of future outcomes that invariably must rely on estimates of state of completion, future revenues, future costs, and collectability of progress billing. Internal budgets and forecasts are used in these estimates. The actual outcome will only be known when a contract is completed and all units sold to customers, and this actual outcome may not coincide with the estimates made. (i) Deferred Tax Assets Deferred tax assets are recognised for unabsorbed tax losses, unutilised capital allowance and temporary deductible differences. As those deferred tax assets can only be recognised to the extent that it is probable that future taxable profit will be available against which the unused tax credits can be utilised, management’s judgement and estimation are required to assess the probability of future taxable profits. Management’s assessment is constantly reviewed and deferred tax assets are recognised if it becomes probable that future taxable profits will allow the deferred tax asset to be recovered. In previous financial year, the management had recognised in total RM13,473,000 deferred tax assets in the financial statements as the management assessed it is probable to have such taxable profits available to utilise the unused tax credits due to significant increase in profit as a result of significant increase in world crude palm oil price. Nevertheless, during the financial year, the market price of crude palm oil has decreased and it is forecasted to be further decreased in the year 2023. Due to decreased in crude palm oil price and increase in production costs, the management is of the view that it is not probable to have future taxable profits to utilise the unused tax credits. In view of the changes of the management estimates, the tax expenses for the current financial year increased by RM13,473,000 due to derecognition of the deferred tax assets recognised in previous financial year. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 64 SALCRA 2022 ANNUAL REPORT

5. GROUP STRUCTURE AND CHANGES Composition of the Group The Group comprises the parent, Sarawak Land Consolidation And Rehabilitation Authority and seven direct subsidiaries as at the end of the current financial year. Details of the entities in the Group are as follows: Parent’s effective Principal place ownership Principal Activities of business 2022 2021 Parent - Sarawak Land Consolidate developing land Malaysia Consolidation And for agriculture in Sarawak, Rehabilitation Authority especially Native Customary Land Direct subsidiaries: Bau Palm Oil Mill Sdn. Bhd. Operation of a palm oil mill Malaysia 60% 60% Saratok Palm Oil Mill Sdn. Bhd. Operation of a palm oil mill Malaysia 52% 52% Serian Palm Oil Mill Sdn. Bhd. Operation of a palm oil mill Malaysia 55% 55% Sarawak Fertilizer Sdn. Bhd. Fertilizer production Malaysia 100% 100% SALCRA Jaya Sdn. Bhd. Agricultural related activities Malaysia 100% 100% and farm engineering works SALCRAFARM Sdn. Bhd. Dormant Malaysia 100% 100% SALCRA Livestock Development Sdn. Bhd. Dormant Malaysia 100% 100% The financial statements of the above subsidiary companies are not audited by the Auditor General of Malaysia. 6. INVESTMENT IN ASSOCIATES Ownership Associates Principal Activities Principal place interest of business 2022 2021 #Salmaq Sdn. Bhd. Operation of waste Malaysia 40% 40% management treatment plant #Associate which relies on continued financial support from the Authority and ultimate holding corporation to continue operating on a going concern basis. Share of Losses of Associate The share of losses accounted for Salmaq Sdn. Bhd. has exceeded the Group’s interest in the associate by RM1,377,242 (2021: RM1,617,821). Therefore, the excess losses are recognised as share of losses in the amounts due from associate in accordance with MPERS Section 14.8(h) as disclosed in Note 10 to the financial statements. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 65

66 SALCRA 2022 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Group Cost At 1 January 2022 Additions Disposals Written off Transfers Reclassifications Adjustments At 31 December 2022 Accumulated Depreciation At 1 January 2022 Charges for the year Disposals Written off Reclassifications Adjustments At 31 December 2022 At 1 January 2022 Impairment losses for the year Reversal At 31 December 2022 Net Carrying Amount At 31 December 2022 At 31 December 2021 Depreciation charges for 2021 Note 30 30 RM 71,563,760 - - - - - - 71,563,760 (10,467,279) (907,661) - - - - (11,374,940) - - - - 60,188,820 61,096,481 (2,706,820) RM 379,069,539 300,665 (1,413,875) (3,391,236) 1,568,820 - (87,559) 376,046,354 (225,026,281) (12,492,570) 1,399,716 961,952 - 87,559 (235,069,624) (2,759,721) - 2,483,952 (275,769) 140,700,961 151,283,537 (9,797,475) Land Buildings RM 436,080,379 7,982,914 (3,461,799) (24,590,222) 1,144,646 (42,712) 3,679 417,116,885 (302,409,024) (25,104,958) 3,460,884 8,781,940 28,591 (3,679) (315,246,246) (15,802,102) (164,695) 15,747,434 (219,363) 101,651,276 117,869,253 (24,341,670) RM 32,708,453 282,000 (91,336) (272,916) 68,600 42,712 167,617 32,905,130 (25,649,894) (1,339,542) 89,542 263,200 (28,591) (168,917) (26,834,202) - - -- 6,070,928 7,058,559 (1,984,843) RM 86,225,333 - (445,773)- 1,579,215 - (1,200) 87,357,575 (52,582,108) (4,076,810) 437,872 - - 1,200 (56,219,846) - - - - 31,137,729 33,643,225 (4,260,968) RM 37,537,989 4,823,844 (1,028,234) - - - - 41,333,599 (35,722,663) (1,513,553) 1,028,226 - - 1,300 (36,206,690) - - - - 5,126,909 1,815,326 (1,090,791) RM 21,589,861 10,703,447 - - (4,361,281) - - 27,932,027 - - - - - - - (100,563) - - (100,563) 27,831,464 21,489,298 - RM 1,064,775,314 24,092,870 (6,441,017) (28,254,374) - - 82,537 1,054,255,330 (651,857,249) (45,435,094) 6,416,240 10,007,092 - (82,537) (680,951,548) (18,662,386) (164,695) 18,231,386 (595,695) 372,708,087 394,255,679 (44,182,567) Plant, machinery and equipment Furniture, fittings and office equipment Infrastructure and loading ramp Mobile equipment Work-in- progress Total 7. PROPERTY, PLANT AND EQUIPMENT

SALCRA 2022 ANNUAL REPORT 67 Authority Cost At 1 January 2022 Additions Disposals Transfers At 31 December 2022 Accumulated Depreciation At 1 January 2022 Charges for the year Disposals At 31 December 2022 Net Carrying Amount At 31 December 2022 At 31 December 2021 Depreciation charges for 2021 Note 30 30 RM 48,221,773 - - - 48,221,773 (6,670,573) (638,609) - (7,309,182) 40,912,591 41,551,200 (2,437,768) RM 304,117,330 195,955 (1,413,875) 1,568,820 304,468,230 (181,758,131) (9,830,112) 1,399,716 (190,188,527) 114,279,703 122,359,199 (7,033,603) Land Buildings RM 158,773,858 5,901,973 (3,461,799) 283,204 161,497,236 (119,959,872) (9,359,818) 3,460,884 (125,858,806) 35,638,430 38,813,986 (9,312,185) RM 26,077,449 107,957 (91,336) 68,600 26,162,670 (21,554,725) (1,042,862) 89,542 (22,508,045) 3,654,625 4,522,724 (1,581,217) RM 82,940,332 - (445,773) 1,579,215 84,073,774 (49,564,537) (4,062,845) 437,872 (53,189,510) 30,884,264 33,375,795 (4,193,780) RM 27,607,077 3,370,619 (1,028,234) - 29,949,462 (26,575,523) (903,504) 1,028,226 (26,450,801) 3,498,661 1,031,554 (582,447) RM 4,875,202 7,056,681 - (3,499,839) 8,432,044 - - - - 8,432,044 4,875,202 - RM 652,613,021 16,633,185 (6,441,017) - 662,805,189 (406,083,361) (25,837,750) 6,416,240 (425,504,871) 237,300,318 246,529,660 (25,141,000) Plant, machinery and equipment Fur niture, fittings and office equipment Infrastructure and loading ramp Mobile equipment Work-in- progress Total 7. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

7. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Certain land titles for landed properties of the Authority have yet to be issued by the relevant authorities with net book value of RM16,531,471 (2021: RM16,619,026). Included in property, plant and equipment are the following fully depreciated assets which are still in use: Group Authority 2022 2021 2022 2021 RM RM RM RM At cost :- Buildings 123,435,240 124,652,211 112,582,857 109,812,908 Plant, machinery and equipment 145,059,694 172,154,272 89,567,391 88,921,327 Furniture, fittings and office equipment 9,422,641 9,700,510 8,360,912 7,899,437 Infrastructure and loading ramp 19,406,904 19,420,869 24,193,243 19,205,086 Mobile equipment 24,180,353 23,593,693 21,683,774 21,494,275 ____________ ____________ ____________ ____________ 321,504,832 349,521,555 256,388,177 247,333,033 ================== ===================== ================== ================== Group Authority Additions of PPE are financed by way 2022 2021 2022 2021 of:- RM RM RM RM Cash 24,092,870 28,130,270 16,633,185 12,947,783 HP creditors - 1,032,700 - - ____________ ____________ ____________ ____________ Additions to PPE 24,092,870 29,162,970 16,633,185 12,947,783 ================== ===================== ================== ================== 8. GOODWILL Group 2022 2021 RM RM Balance at 1January - Gross carrying amount - 25,386,181 - Accumulated amortisation - (24,986,181) ____________ ____________ Carrying amount at 1 January - 400,000 Less: Amortisation expense for the year (Note 30) - (400,000) ____________ ____________ Balance at 31 December - - ================= ================= Net carrying amount: Gross carrying amount - 400,000 Less: Accumulated amortisation - (400,000) ____________ ____________ Balance at 31 December - - ================= ================= The purchased goodwill arose from the previous acquisition of equity interests in Sarawak Fertilizer Sdn. Bhd., a subsidiary. The goodwill was tested for impairment at the end of the reporting period. An impairment loss is the amount by which the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of an asset or a cash generating unit (“CGU”) is the higher of its fair value less costs to sell or its value in use. The recoverable amounts of cash-generating units have been determined based on the value in use method. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 68 SALCRA 2022 ANNUAL REPORT

9. INVESTMENTS IN SUBSIDIARIES Authority 2022 2021 RM RM Unquoted shares, at cost Balance at 1 January 48,350,003 48,350,000 Acquisition during the year - 3 _____________ ____________ Net carrying amount at 31 December 48,350,003 48,350,003 ================== ================== Amount Due from Subsidiaries The amounts due from subsidiaries are as follows:- Authority Note 2022 2021 RM RM Portion bearing financing costs : - Current 15 - 6,746,783 - Non-current 15 - - ____________ ____________ - 6,746,783 Portion free from financing costs (Current) 37.2 17,745,466 18,261,500 ____________ ____________ Total amount due from subsidiaries 17,745,466 25,008,283 ================= ================= The non-financing portion represents trade and non-trade transactions which are unsecured, interest free and repayable on demand. The portion bearing financing costs bear interest at rates of 4% (2021: 4%) per annum. Amount Due to Subsidiaries The amount due to subsidiaries is as follows:- Authority 2022 2021 RM RM Current Amount due to subsidiaries (Note 37.2) 18,429,120 10,015,596 ================= ================= The amount due to subsidiaries is unsecured, interest free and repayable on demand. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 69

10. INVESTMENT IN ASSOCIATES Group 2022 2021 RM RM Unquoted shares, at cost 400,000 400,000 Share of post-acquisition losses in an associate (400,000) (400,000) ____________ ____________ Net carrying amount at 31 December - - ____________ ____________ Represented by:- Share of net tangible assets - - ================= ================= Amount Due From An Associate Group 2022 2021 RM RM Amount due from an associate 2,432,440 2,450,243 Share of post-acquisition results in an associate (Note 6): - Balance at 1 January (1,617,821) (1,172,468) - Provision for impairment losses for the year (Note 30) - (445,353) - Reversal of impairment losses for the year (Note 30) 240,579 - Balance at 31 December (1,377,242) (1,617,821) ____________ ____________ Total amount due from an associate, net (Note 37.2) 1,055,198 832,422 ================= ================= The amount due from an associate is unsecured, interest free and repayable on demand. Please see further details in Note 6. 11. INVESTMENT PROPERTY Group 2022 2021 RM RM Land and building, at fair value : Balance at 1 January 2,606,040 2,606,040 - Addition 14,700 - ____________ ____________ Balance at 31 December 2,620,740 2,606,040 ================= ================= The land and building are located at Lot 176, Gading-Lundu Land, which is a short term leasehold land expiring on 31 December 2024. The renewal of the leasehold land agreement are in progress. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 70 SALCRA 2022 ANNUAL REPORT

12. OTHER INVESTMENTS Group Authority 2022 2021 2022 2021 RM RM RM RM Financial assets: (a) Derivative instruments at fair value through profit and loss - Unit trusts in Malaysia (Note 37.2) 875,597 842,498 - - ____________ ____________ ____________ ____________ (b) Debt instruments at amortised cost Redeemable preference shares, at nominal amount - - 7,555,632 7,555,632 Add: Accumulated amortisation of discount At 1 January - - 698,335 573,183 Interest income for the year - - 330,159 325,152 Interest received during the year - - (200,000) (200,000) At 31 December - - 828,494 698,335 ____________ ____________ ____________ ____________ Amortised cost at 31 December - - 8,384,126 8,253,967 ____________ ____________ ____________ ____________ (c) Debt instruments at amortised cost Borneo Eco Fish Sdn. Bhd. (“BEF”) redeemable preference shares, at nominal amount 4,600,000 4,600,000 4,600,000 4,600,000 Less: Fair value adjustment At 1 January 519,359 - 519,359 - Fair value loss during the year - 519,359 - 519,359 At 31 December 519,359 519,359 519,359 519,359 ____________ ____________ ____________ ____________ Add: Accumulated amortisation of discount At 1 January 88,113 - 88,113 - Interest income for the year 166,751 163,225 166,751 163,225 Interest received during the year (92,000) (75,112) (92,000) (75,112) At 31 December 162,864 88,113 162,864 88,113 ____________ ____________ ____________ ____________ Amortised cost at 31 December 4,243,505 4,168,754 4,243,505 4,168,754 ____________ ____________ ____________ ____________ (d) Fixed deposits with maturity more than 3 months 109,196,214 75,018,109 99,625,846 65,614,383 Fixed deposits pledged to licensed banks 46,442,172 38,316,125 4,464,763 4,386,889 ____________ ____________ ____________ ____________ 155,638,386 113,334,234 104,090,609 70,001,272 ____________ ____________ ____________ ____________ (e) Equity instruments at cost less impairment - unquoted - At cost 4,540,000 4,540,000 4,540,000 4,540,000 - Accumulated impairment losses (4,540,000) (4,540,000) (4,540,000) (4,540,000) ____________ ____________ ____________ ____________ - - - - ____________ ____________ ____________ ____________ Total other investments, net (Note 37.2) 160,757,488 118,345,486 116,718,240 82,423,993 ================== ===================== ================== ================== NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 71

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 72 SALCRA 2022 ANNUAL REPORT 12. OTHER INVESTMENTS (CONTINUED) Group Authority 2022 2021 2022 2021 RM RM RM RM The other investments are analysed as follows : Current 155,638,386 113,334,234 104,090,609 70,001,272 Non-current 5,119,102 5,011,252 12,627,631 12,422,721 ____________ ____________ ____________ ____________ 160,757,488 118,345,486 116,718,240 82,423,993 ================== ===================== ================== ================== On 17 February 2016, the Authority subscribed 10,000,000 redeemable preference shares of RM1 each at the interest rate of 2% per annum redeemable upon maturity of 15 years from the date of allotment in Sarawak Fertilizer Sdn. Bhd. These redeemable preference shares have been classified as a financial liability of the subsidiary and hence, it is classified as a financial asset of the Authority accordingly. On 9 March 2021, the Authority had entered into a Joint Venture and Shares Subscription Agreement with Borneo Eco Fish Sdn. Bhd. (“BEF”). Under the Agreement, the Authority had subscribed for the Preference Shares of Four Million Six Hundred Thousand (4,600,000) at the value of RM1.00 per share in BEF, by way of injecting the assets. The Authority shall be paid the dividend of 2% for the first (5) years and 4% for the sixth (6th) to fifteen (15th) year. The fixed deposit interest rates of the Group and the Authority during the financial year range from 2.40% to 3.70% (2021: 1.60% to 1.89%) per annum. The maturities of deposits of the Group and the Authority as at 31 December 2022 range from 1 to 12 (2021: 1 to 12) months respectively. Included in fixed deposits pledged to licensed banks for the Group and the Authority are short term deposits amounting to RM46,442,172 (2021:RM38,316,125) and RM4,464,763 (2021: RM4,386,889) respectively which are pledged as security for the bank overdraft facility. The bank overdraft bears interest at 3.91%-4.50% (2021: 10.60%) per annum.

Hectares Immature crop Mature crop Total hectares At 1 January: Gross carrying amount Accumulated amortisation Net carrying amount Development cost during the year Amortisation charges for the year (Note 30) Decrease in nursery Net carrying amount at 31 December Gross carrying amount Accumulated amortisation Net carrying amount NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 73 Oil Palm and Nursery 2022 Bamboo and Gaharu Total 2021 Bamboo and Gaharu Total Group and Authority 38 477 515 23 - 23 61 477 538 23 - 23 111 431 542 88 431 519 13. BIOLOGICAL ASSETS The biological assets of the Group and the Authority measured using the cost model comprise oil palm, nursery, bamboo and gaharu. The fair value of these biological assets cannot be measured reliably without undue cost or effort because an external professional valuation would involve significant costs that substantially exceed the benefits to users, there are no comparable market prices and significant uncertain variables would be needed to perform an internal valuation. Oil Palm and Nursery Oil Palm and Nursery RM 2022 Bamboo and Gaharu RM Total RM 2021 Bamboo and Gaharu RM Total RM Group and Authority Oil Palm and Nursery RM 27,365,690 (2,326,413) 25,039,277 464,795 (475,738) (4,060,386) 20,967,948 23,770,099 (2,802,151) 20,967,948 190,490 - 190,490 2,307 - - 192,797 192,797 - 192,797 27,556,180 (2,326,413) 25,229,767 467,102 (475,738) (4,060,386) 21,160,745 23,962,896 (2,802,151) 21,160,745 174,876 - 174,876 15,614 - - 190,490 190,490 - 190,490 34,406,682 (1,850,676) 32,556,006 351,252 (475,737) (7,201,754) 25,229,767 27,556,180 (2,326,413) 25,229,767 34,231,806 (1,850,676) 32,381,130 335,638 (475,737) (7,201,754) 25,039,277 27,365,690 (2,326,413) 25,039,277

14. PARTICIPANTS’ ACCOUNTS Group and Authority 2022 2021 Non-current RM RM Development costs (including capitalised interest) 1,203,021,454 1,118,295,447 Participants’ revenue accounts (1,514,721,712) (1,383,805,264) Distribution to participants 1,103,665,553 1,022,771,609 Replanting funds (107,734,962) (121,500,542) General reserve (73,155,286) (70,098,244) ______________ ______________ 611,075,047 565,663,006 Provision for losses (cocoa estates) (53,244,624) (53,244,624) Provision for losses (Batang Ai) (14,445,393) (14,445,393) Provision for losses (Oil Palm Estate) (Note 30) (35,870,959) (30,583,092) Net Proceed Payment (NPP) (pending landownership, due to refund) (13,263,745) (10,219,530) NPP from general reserve (23,684,903) (17,159,729) Pre-operating costs (521,373) (519,987) ______________ ______________ Net carrying amount at 31 December 470,044,050 439,490,651 =============== =============== The development projects or schemes carried out by the Group and the Authority are normally affected through land development agreements made with the land owners or schemes participants. Funds for the development of the various schemes are mainly sourced from the State and Federal Governments and financial institutions. The development costs and related interest expenses, computed in accordance with the rate specified in the respective loan agreements, are charged to the scheme participants. Revenue derived from the sale of the produce less direct and indirect costs, and interest charged are on account of the scheme participants and reflected in the participants’ revenue accounts. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 74 SALCRA 2022 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 75 14. PARTICIPANTS’ ACCOUNTS (CONTINUED) A summary of the participants’ accounts by estates is set out below: – Hectarage Group and Authority 2022 2022 2021 HA RM RM Oil Palm Estates Batang Ai 2,020 5,402,954 6,321,848 Lemanak - Replanting 1,951 27,514,925 33,656,410 Batang Ai - Replanting - 12,028,154 13,526,934 Batu Kaya - (7,234,108) (7,234,108) Batu Kaya - Replanting 1,785 22,033,557 23,997,317 Pakit/Undup - 5,913,613 5,913,613 Pakit/Undup - Replanting 2,630 55,382,725 60,062,042 Memaloi 1,158 14,426,560 13,341,458 Memaloi - Replanting - 20,225 12,402 Kumpang - 56,892 56,892 Roban South 2,210 16,033,972 13,589,130 Roban South - Replanting 656 28,871,394 24,501,275 Roban North 4,828 67,190,588 57,984,675 Roban North - Replanting - 24,813,253 28,734,701 Saratok 3,019 36,295,325 28,299,736 Saratok - Replanting 1,036 62,730,290 51,960,453 Saribas 3,654 71,791,829 62,262,185 Saribas- Replanting 2,479 57,161,384 45,860,978 Kedup 1 and 2 902 (11,130,186) (15,071,934) Kedup 1 and 2 - Replanting 2,104 43,038,054 33,673,802 Melikin 2,947 36,060,324 31,775,656 Mongkos 110 (20,315,091) (19,784,121) Mongkos - Replanting 284 4,482,493 353,150 Ta’ee 1,183 3,060,042 5,463,316 Ta’ee - Replanting - 441 441 Simunjan - 7,305 7,305 Jagoi 1,287 7,001,576 9,375,843 Jagoi - Replanting 475 9,065,486 6,636,970 Bratak 1,341 (4,581,315) (3,548,390) Bratak - Replanting 406 6,375,690 4,162,956 Undan, Stenggang and Sebako 4,161 (22,990,427) (21,879,880) Undan, Stenggang and Sebako - Replanting 370 8,016,901 6,437,418 _____________ _____________ _____________ Sub-total : 42,996 558,524,825 500,450,473 Less : Proceeds from disposal of Raya Estate (2,997,471) (2,997,471) NPP (pending landownership, due to refund) (13,263,745) (10,219,530) NPP from General Reserve (23,684,903) (17,159,729) Provision for losses of oil palm estates (35,870,959) (30,583,092) Replanting Reserve (12,663,697) - _____________ _____________ 470,044,050 439,490,651 _____________ _____________

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 76 SALCRA 2022 ANNUAL REPORT 14. PARTICIPANTS’ ACCOUNTS (CONTINUED) A summary of the participants’ accounts by estates is set out below: – Hectarage Group and Authority 2022 2022 2021 HA RM RM Cocoa Estates Batang Ai 420 12,192,047 12,192,047 Paku/Layar 1,126 12,430,746 12,430,746 Ta’ee 697 10,431,501 10,431,501 Ta’ee Extension 264 3,147,147 3,147,147 Bajo 325 3,801,188 3,801,188 Sebako 367 3,148,776 3,148,776 Krokong 259 2,741,628 2,741,628 Pantu 267 2,631,713 2,631,713 Awek _____________ 214 _____________ 2,719,878 _____________ 2,719,878 3,939 53,244,624 53,244,624 Less: Provision for losses in cocoa estates - (53,244,624) (53,244,624) _____________ _____________ _____________ Total Cocoa Estates 3,939 - - Less: Replanted with oil palm (2,919) - - _____________ _____________ _____________ 1,020 - - _____________ ____________ ____________ Rubber Estates Batang Ai Resettlement Scheme 1,053 14,445,393 14,445,393 Less: Provision for losses - (14,445,393) (14,445,393) _____________ _____________ _____________ 1,053 - - _____________ _____________ _____________ Total participants’ accounts 45,069 470,044,050 439,490,651 ===================== ================== ================== The cocoa estates have been abandoned since 1993 and 2,919 hectares have been replanted with oil palms. SALCRA has submitted an application to the relevant State authority to absorb the cost incurred in respect of the Batang Ai Resettlement Scheme (Rubber Estates). Also, during the 104th Board Meeting held on 24th February 2020, the Board had resolved to approve the proposal to write-off the loan. Provision for loss totalling RM14,445,393 was taken up in financial year 2009.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 77 14. PARTICIPANTS’ ACCOUNTS (CONTINUED) The respective revenue accounts for the year are summarised below: – Group and Authority 2022 2021 RM RM Oil Palm Estates Sales of fresh fruit bunches 297,212,380 261,278,051 Less : Harvesting cost (25,559,578) (20,017,487) Transportation cost (22,852,839) (17,812,534) Manuring cost (31,818,758) (32,243,166) Estate maintenance (26,653,417) (18,331,872) Administration cost (33,552,960) (26,630,293) _____________ ____________ Gross surplus to the participants 156,774,828 146,242,699 Less : Finance charges (17,378,048) (16,698,323) Transfers to general reserve (9,744,868) (6,977,472) _____________ _____________ Participants’ revenue for the year 129,651,912 122,566,904 Less: Distributions to participants (74,368,771) (60,668,126) _____________ _____________ Net surplus to the participants 55,283,141 61,898,778 ================== ================== Current Year Declared Distribution From current year operation 74,368,771 60,668,126 From General Reserve 631,229 102,000 ____________ ____________ Current year distribution 75,000,000 60,770,126 Distribution related to prior years From General Reserve 5,893,945 101 ____________ ____________ Total Distribution 80,893,945 60,770,227 ================= =================

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 15. LOAN DUE FROM A SUBSIDIARY AND A RELATED COMPANY Authority 2022 2021 RM RM Loan due from a subsidiary Principal term loan 36,000,000 36,000,000 Capitalised interest 5,248,961 5,248,961 ____________ _____________ 41,248,961 41,248,961 ____________ _____________ Loan repayment at 1 January (33,682,874) (26,407,790) Loan repayment received during the year (7,566,087) (7,275,084) Loan repayment at 31 December (41,248,961) (33,682,874) ____________ _____________ Term loan principal at 31 December - 7,566,087 Add : Outstanding loan interest - 302,643 ____________ _____________ Total term loan at 31 December - 7,868,730 Less : Accumulated impairment losses : At 1 January (8,294,740) (8,393,087) Impairment losses for the year - 98,347 At 31 December (8,294,740) (8,294,740) Add : Accumulated amortisation of discount : At 1 January 7,172,793 7,271,140 Over amortisation in previous years - (223,499) Interest income for the year (Note 29, 30) 1,121,947 125,152 At 31 December 8,294,740 7,172,793 ____________ _____________ Loan due from a subsidiary at amortised cost (Note 9) (Note 37.2) - 6,746,783 ================ ================= Current portion - 6,746,783 Non-current portion - - ____________ _____________ - 6,746,783 ================ ================= The loan due from a subsidiary is for a term of 10 (2021: 10) years, unsecured and repayable in cash. The interest rates charged on loan to a subsidiary is 4% (2021: 4%) per annum. Authority 2022 2021 RM RM Loan due from a related company Loan due from a related company, at cost 1,823,757 1,969,818 Less: Accumulated impairment losses (176,634) (205,467) ____________ ____________ Loan due from a related company at amortised cost (Note 37.2) 1,647,123 1,764,351 ================ ================= Current portion 224,853 224,853 Non-current portion 1,422,270 1,539,498 ____________ ____________ 1,647,123 1,764,351 ================ =============== The loan due from a related company is for a term of 15 years (2021: 15 years), unsecured and repayable in cash. The interest rate charged on the loan is at 4% (2021: 4%) per annum. 78 SALCRA 2022 ANNUAL REPORT

16. INVENTORIES Group Authority 2022 2021 2022 2021 RM RM RM RM At cost: Crude palm oil 9,976,341 10,837,423 3,687,237 3,191,910 Palm kernel 2,024,802 3,253,728 871,875 1,112,497 FFB unprocessed 834,774 1,819,837 459,702 703,987 Fertilisers 25,301,126 14,906,520 9,376,686 7,908,212 Raw materials, fertiliser 28,001,765 20,244,115 - - Spare parts 1,759,871 1,703,692 998,034 1,005,027 Trading goods 1,118 1,118 - - Production supplies 2,690,220 2,283,700 - - Work-in-progress - Spillages - 571,213 - - Chemicals 2,132,967 2,524,227 2,047,893 2,461,775 General stores 458,901 512,693 232,532 341,193 Fuel and lubricants 951,000 671,894 779,574 504,527 Cover crops 16,920 16,920 16,920 16,920 ____________ ____________ ____________ ____________ Gross inventories 74,149,805 59,347,080 18,470,453 17,246,048 Provision for slow moving inventories (229,410) (229,410) (229,410) (229,410) ____________ ____________ ____________ ____________ Total inventories, net 73,920,395 59,117,670 18,241,043 17,016,638 ================== ===================== ================== ================== 17. TRADE RECEIVABLES Group Authority 2022 2021 2022 2021 RM RM RM RM Third parties 66,726,106 73,433,163 16,155,827 19,482,402 Less : Accumulated impairment losses (4,419,074) (4,172,646) - - ____________ ____________ ____________ ____________ Total trade receivables, net (Note 37.2) 62,307,032 69,260,517 16,155,827 19,482,402 ================== ===================== ================== ================== NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 79

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 18. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM Non-trade receivables 4,542,703 4,861,856 1,141,672 1,211,762 Interest receivables 884,684 580,678 671,940 413,841 Dividend receivables 167,112 75,112 167,112 75,112 Deposits 2,359,473 4,635,254 664,813 676,523 Education loans 562,007 560,281 562,007 560,281 Sundry advances 1,287,752 1,595,519 513,089 411,919 Staff advances 35,207 6,244 35,207 2,809 Staff loans 310,021 133,466 177,546 133,466 Less: Accumulated impairment losses (453,594) (447,090) (66,134) (59,630) ____________ ____________ ____________ ____________ Total classified as financial assets (Note 37.2) 9,695,365 12,001,320 3,867,252 3,426,083 Prepayments 7,536,711 8,230,832 577,418 504,713 ____________ ____________ ____________ ____________ Total other receivables, deposits and prepayments, net 17,232,076 20,232,152 4,444,670 3,930,796 ================== ===================== ================== ================== 19. CASH AND CASH EQUIVALENTS The Group’s cash management policy is to use cash and bank balances and bank overdrafts to manage cash flows to ensure sufficient liquidity to meet the Group’s obligations. The components of cash and cash equivalents consist of: Group Authority 2022 2021 2022 2021 RM RM RM RM Cash and bank balances 14,286,527 33,565,288 2,153,143 7,243,184 Fixed deposits with maturity of 3 months or less 134,525,416 171,128,879 89,686,939 142,084,201 ____________ ____________ ____________ ____________ Total cash and cash equivalents disclosed on consolidated statements of financial position (Note 37.2) 148,811,943 204,694,167 91,840,082 149,327,385 Less : Bank overdrafts (Note 20) (8,344,338) (8,092,121) - - ____________ ____________ ____________ ____________ Total cash and cash equivalents disclosed on consolidated statements of cash flows 140,467,605 196,602,046 91,840,082 149,327,385 ================== ===================== ================== ================== The fixed deposits’ interest rates of the Group and the Authority during the financial year range from 2.40% to 3.70% (2021: 1.40% to 2.05%) per annum respectively and the maturities of deposits of the Group and the Authority as at 31 December 2022 range from 1 to 3 (2021: 1 to 3) months respectively. The bank overdraft bears interest at 3.91% - 4.50% (2021: 10.60%) per annum. 80 SALCRA 2022 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 20. BORROWINGS Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM Bank overdrafts (Note 19) (Note 37.2) 8,344,338 8,092,121 - - Trade finance (Note 37.2) 44,051,120 29,208,462 11,708,119 568,514 ____________ ____________ ____________ ____________ 52,395,458 37,300,583 11,708,119 568,514 ____________ ____________ ____________ ____________ Term loans - State Government (unsecured) 243,992,682 247,019,077 243,992,682 247,019,077 - Federal Government (unsecured) 193,665,733 210,142,406 193,665,733 210,142,406 - Commercial (secured) 102,288,118 116,526,155 65,634,053 73,482,155 ____________ ____________ ____________ ____________ Total term loans 539,946,533 573,687,638 503,292,468 530,643,638 Fair value adjustment on Government loans (Note 23) (77,039,962) (22,390,002) (77,039,962) (22,390,002) ____________ ____________ ____________ ____________ Total term loans, net (Note 37.2) 462,906,571 551,297,636 426,252,506 508,253,636 ____________ ____________ ____________ ____________ Total borrowings (Net): 515,302,029 588,598,219 437,960,625 508,822,150 ================== ===================== ================== ================== Current portion: - Due within 12 months 139,867,685 130,854,522 92,355,388 87,513,816 ____________ ____________ ____________ ____________ Non-current portion: - Due after 12 months 375,434,344 457,743,697 345,605,237 421,308,334 ____________ ____________ ____________ ____________ Total current and non-current 515,302,029 588,598,219 437,960,625 508,822,150 ================== ===================== ================== ================== On initial recognition of a Government loan at below-market interest rate, the difference between the nominal value of the loan and its fair value is treated as a deferred income and amortised to profit or loss annually at an amount equivalent to the interest expense incurred over the term of the loan. i. Loan Principals Included in the loans from State Government are as follows: - a. State Government Interest No. of Repayment Group and Authority p.a installment period 2022 2021 RM RM *Mayang Tea Sdn. Bhd. Free 6 annual 21.12.1987 - 1992 6,497,000 6,497,000 Ta’ee & Paku/Layar Cocoa Free 9 annual 31.12.1988 - 1996 280,444 280,444 *Batang Ai Resettlement Scheme 1 4% 12 annual 08.03.1992 - 2003 13,549,468 13,549,468 *Batang Ai Resettlement Scheme 2 4% 12 annual 22.11.1999 - 2010 1,164,730 1,164,730 Sarawak Fertilizer Sdn. Bhd. 4% 6 annual 29.08.2015 - 2021 6,995,273 6,995,273 LAPOM 1 & LAPOM 2 4% 7 annual 09.09.2022 - 2026 13,365,537 16,391,932 Projek Tanam Semula Sawit SALCRA 4% 15 annual 19.06.2027 - 2042 200,000,000 200,000,000 ____________ ____________ 241,852,452 244,878,847 ================== ================== *Loan outstanding for Mayang Tea projects and Batang Ai rubber resettlement schemes where the projects have been surrendered back to landowners. The Authority’s Board Members have resolved to approve the proposal to write off the loans during its 104th Board Meeting. SALCRA 2022 ANNUAL REPORT 81

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 82 SALCRA 2022 ANNUAL REPORT 20. BORROWINGS (CONTINUED) i. Loan Principals (continued) Included in the loans from State Government are as follows: - b. Federal Government Interest No. of Repayment Group and Authority p.a installment period 2022 2021 RM RM **Ta’ee & Paku/Layar Cocoa 1 Free 9 annual 29.12.1989 - 1997 7,311,111 7,311,111 **Bajo Cocoa Estate 1 Free 15 annual 31.12.1995 - 2009 322,000 322,000 **Bajo Cocoa Estate 2 Free 15 annual 31.07.1996 - 2010 857,900 857,900 **Ta’ee & Paku/Layar Cocoa Waived 15 annual 22.10.1999 - 2013 4,400,000 4,400,000 **Ta’ee Extension Waived 15 annual 22.10.1999 - 2013 2,242,760 2,242,760 **Bajo Cocoa Estate 3 Waived 15 annual 22.10.1999 - 2013 1,500,000 1,500,000 **Bajo Extension Waived 15 annual 22.10.1999 - 2013 2,606,300 2,606,300 **Krokong Waived 15 annual 22.10.1999 - 2013 2,528,230 2,528,230 **Pantu/Lingga Waived 15 annual 22.10.1999 - 2013 2,096,330 2,096,330 **Awek/Kalaka Waived 15 annual 03.02.2000 - 2015 2,017,510 2,017,510 Kalaka/Saribas IADP 2 4% 18 annual 01.02.2004 – 2021 - 1,261,420 Serian & Bau/Lundu 2 4% 18 annual 05.01.2004 – 2021 - 6,664,332 Serian & Bau/Lundu 3 4% 18 annual 14.07.2010 – 2027 6,384,330 7,363,226 Penyatuan Ladang 4% 18 annual 01.03.2011 – 2028 14,608,091 16,483,979 Melugu - Skrang 4% 18 annual 13.09.2014 - 2031 4,130,737 4,478,001 Sri Aman Replanting 4% 13 annual 07.01.2020 - 2031 15,688,760 17,114,220 Serian & Bau/Lundu 4 4% 13 annual 07.01.2020 - 2031 6,783,323 7,399,646 Penyatuan Ladang 2 4% 8 annual 30.05.2022 - 2027 5,385,633 6,341,723 *** Ladang Sawit Betong 4% 6 annual 15.12.2022 - 2027 2,547,714 3,000,000 *** Ladang Sawit Saratok 4% 6 annual 15.12.2022 - 2027 1,698,476 2,000,000 *** Penyatuan Ladang 3 4% 16 Semi-annual 29.12.2022 - 2028 6,284,100 7,048,000 *** Tanam Semula Sri Aman 4% 26 Semi-annual 29.12.2022 – 2034 6,015,996 6,400,000 *** Ladang Mudong/Selalang 4% 13 annual 31.12.2023 – 2035 2,700,000 2,700,000 *** Ladang Batu Chelum 4% 13 annual 31.12.2023 – 2035 2,160,000 2,160,000 *** Ladang Jaong/Pantu 4% 13 annual 31.12.2023 - 2035 1,277,968 1,277,968 *** Tanam Semula Saratok 4% 26 annual 15.07.2022 - 2035 14,650,714 15,100,000 *** Penyatuan Ladang Loan 4 4% 16 Semi-annual 30.06.2023 - 2030 500,000 500,000 *** Ladang Kelapa Sawit Betong 2 4% 12 Semi-annual 30.06.2023 - 2028 2,500,000 2,500,000 *** Ladang Kelapa Sawit Saratok 2 4% 12 Semi-annual 30.06.2023 - 2028 2,500,000 2,500,000 *** Projek Tanam Semula Sawit Saratok 4% 26 Semi-annual 02.12.2024 - 2036 12,250,000 12,250,000 *** Projek Tanam Semula Sawit Sri Aman 4% 26 Semi-annual 02.12.2024 - 2036 3,860,000 3,860,000 *** Projek Tanam Baru Bau/Lundu 4% 13 annual 10.01.2024 - 2037 5,200,000 5,200,000 *** Projek Sisa Sawit 4% 7 annual 02.12.2023 - 2030 16,634,250 16,634,25 *** Projek Tanam Semula Sawit Batu Kaya 3 4% 16 Semi-annual 24.12.2024 - 2032 4,079,000 4,079,000 *** Projek Tanam Semula Sawit Rimbas 4% 16 Semi-annual 24.12.2024 - 2032 11,358,500 11,358,500 *** Projek Tanam Semula Sawit Pakit 4 & 5 4% 16 Semi-annual 24.12.2024 - 2032 9,238,000 9,238,000

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 83 20. BORROWINGS (CONTINUED) i. Loan Principals (continued) b. Federal Government Interest No. of Repayment Group and Authority p.a installment period 2022 2021 RM RM *** Projek Tanam Semula Sawit Kedup, Serian 4% 16 Semi-annual 24.12.2024 - 2032 9,348,000 9,348,000 ___________ ___________ 193,665,733 210,142,406 ================= ================= ** Failed Cocoa project loan agreements were signed in 1983. The Authority’s Board Members have resolved to approve the proposal to write off the loans during its 104th Board Meeting. The Authority has applied the waiver from Government on the long overdue loans of Batang Ai Resettlement Scheme 1 and Batang Ai Resettlement Scheme 2 which were due for repayment in year 2003 and 2010 respectively. However, the Authority has yet to receive the Government’s approval in relation to the waiver of the loans. Due to the pending approval, the Authority is unable to expense off the interest capitalised in the borrowings in accordance with MPERS Section 25. This exception has been disclosed in the accounting policy on borrowing costs in Note 4 (s). *** The loan is still under grace period. IADP - Integrated Agricultural Development Project c. Bank Pertanian Interest No. of Repayment Group and Authority Malaysia Bhd. p.a installment period 2022 2021 RM RM Lubok Antu Palm Oil Mill 2 4.51 180 2017 - 2033 66,633,935 73,482,155 ___________ ___________ 66,633,935 73,482,155 ___________ ___________ Total loan principals 502,152,120 528,503,408 Interest capitalised 2,140,230 2,140,230 ___________ ___________ Total loan principals and interest capitalised 504,292,350 530,643,638 ================= ================ i. Capitalised Interest Group and Authority Principal Cumulative Total Cumulative capitalised capitalised interest interest 2022 2022 2022 2021 RM RM RM RM Batang Ai Resettlement Scheme 1 13,549,468 1,771,677 15,321,145 1,771,677 Batang Ai Resettlement Scheme 2 1,164,730 368,553 1,533,283 368,553 Sarawak Fertilizer Sdn. Bhd. 28,562,667 - 28,562,667 - ____________ ____________ ____________ ____________ 43,276,865 2,140,230 45,417,095 2,140,230 ================== ===================== ================== ==================

20. BORROWINGS (CONTINUED) iii. Repayable Within 12 Months 2022 Authority Due in Due in 1986 - 2022 2023 Total State Government RM RM RM Mayang Tea Sdn. Bhd. 6,497,000 - 6,497,000 Ta’ee & Paku/Layar 280,444 - 280,444 Batang Ai Resettlement Scheme 1 15,321,145 - 15,321,145 Batang Ai Resettlement Scheme 2 1,533,283 - 1,533,283 Sarawak Fertilizer Sdn. Bhd. 6,995,273 - 6,995,273 LAPOM 1 & LAPOM 2 - 3,147,451 3,147,451 Federal Government Cocoa Loan 25,882,141 - 25,882,141 Serian/Bau Oil Palm Complex 3 870,235 1,018,051 1,888,286 Penyatuan Ladang-Ladang 1,667,658 1,950,924 3,618,582 Melugu - Skrang 308,716 361,154 669,870 Projek Penanaman Semula Sri Aman 1 - 1,482,478 1,482,478 Serian & Bau/Lundu 4 - 640,976 640,976 Penyatuan Ladang 2 - 994,334 994,334 Penyatuan Ladang 3 - 794,762 794,762 Projek Penanaman Semula Sri Aman 2 - 399,518 399,518 Projek Penanaman Semula Saratok - 923,996 923,996 Projek Ladang Kelapa Sawit Betong - 470,377 470,377 Projek Ladang Kelapa Sawit Saratok - 313,585 313,585 Penyatuan Ladang Loan 4 - 54,193 54,193 Ladang Kelapa Sawit Betong 2 - 376,565 376,565 Ladang Kelapa Sawit Saratok 2 - 376,565 376,565 Ladang Mudong/ Selalang - 162,388 162,388 Ladang Batu Chelum - 129,910 129,910 Ladang Jaong/ Pantu - 76,862 76,862 Commercial Loan Bank Pertanian Malaysia Bhd. - 7,617,285 7,617,285 59,355,895 21,291,374 80,647,269 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 84 SALCRA 2022 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 85 20. BORROWINGS (CONTINUED) iii. Repayable Within 12 Months (continued) 2021 Authority Due in Due in 1986 - 2021 2022 Total State Government RM RM RM Mayang Tea Sdn. Bhd. 6,497,000 - 6,497,000 Ta’ee & Paku/Layar 280,444 - 280,444 Batang Ai Resettlement Scheme 1 15,321,145 - 15,321,145 Batang Ai Resettlement Scheme 2 1,533,283 - 1,533,283 Sarawak Fertilizer Sdn. Bhd. 6,995,273 - 6,995,273 LAPOM 1 & LAPOM 2 - 3,026,395 3,026,395 Federal Government Cocoa Loan 25,882,141 - 25,882,141 Kalaka/Saribas Integrated Agricultural Development Project (IADP) 2 1,261,420 - 1,261,420 Serian & Bau/Lundu 2 6,664,332 - 6,664,332 Serian/Bau Oil Palm Complex 3 870,235 978,896 1,849,131 Penyatuan Ladang-Ladang 1,667,658 1,875,889 3,543,547 Melugu - Skrang 308,716 347,264 655,980 Projek Penanaman Semula Sri Aman 1 - 1,425,459 1,425,459 Serian & Bau/Lundu 4 - 616,323 616,323 Penyatuan Ladang 2 - 956,090 956,090 Penyatuan Ladang 3 - 763,900 763,900 Projek Penanaman Semula Sri Aman 2 - 384,004 384,004 Projek Penanaman Semula Saratok - 449,286 449,286 Projek Ladang Kelapa Sawit Betong - 452,286 452,286 Projek Ladang Kelapa Sawit Saratok - 301,524 301,524 Commercial Loan Bank Pertanian Malaysia Bhd. - 8,086,339 8,086,339 67,281,647 19,663,655 86,945,302 21. GENERAL RESERVE Group The general reserve consists of a capital redemption reserve of a subsidiary previously created for the redemption of Saratok Palm Oil Mill Sdn. Bhd. (SaPOM)’s 7% redeemable preference shares in year 2000.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 86 SALCRA 2022 ANNUAL REPORT 22. PROVISION FOR EMPLOYEE BENEFITS Group Authorit 2022 2021 2022 2021 Unutilised annual leave RM RM RM RM At 1 January 1,981,503 1,384,673 1,981,503 1,384,673 (Decrease)/ Increase for the year (144,696) 596,830 (212,799) 596,830 ____________ ____________ ____________ ____________ At 31 December 1,836,807 1,981,503 1,768,704 1,981,503 ____________ ____________ ____________ ____________ Gantian Cuti Rehat (GCR) At 1 January - - - - Increase for the year 1,287,407 - 1,287,407 - ____________ ____________ ____________ ____________ At 31 December 1,287,407 - 1,287,407 - ____________ ____________ ____________ ____________ Gratuity At 1 January 419,991 565,079 419,991 565,079 Increase/ (Decrease) for the year 103,499 (145,088) 103,499 (145,088) ____________ ____________ ____________ ____________ At 31 December 523,490 419,991 523,490 419,991 ____________ ____________ ____________ ____________ Bonus At 1 January - - - - Increase for the year 1,633,309 - - - ____________ ____________ ____________ ____________ At 31 December 1,633,309 - - - ____________ ____________ ____________ ____________ Tax penalty At 1 January - - - - Increase for the year 139,000 - - - ____________ ____________ ____________ ____________ At 31 December 139,000 - - - ____________ ____________ ____________ ____________ Total 5,420,013 2,401,494 3,579,601 2,401,494 ================== ===================== ================== ================== Current 4,896,523 1,981,503 3,056,111 1,981,503 Non-current 523,490 419,991 523,490 419,991 ____________ ____________ ____________ ____________ 5,420,013 2,401,494 3,579,601 2,401,494 ================== ===================== ================== ================== 23. DEFFERRED INCOME Group and Authority 2022 2021 RM RM Total grants received Note Balance at 1 January 425,262,743 397,599,947 Received during the year 14,355,000 18,000,000 Reversed to development cost (4,591,794) (6,400,054) Fair value adjustment on Government loans 20 54,649,960 16,062,850 ____________ ____________ 489,675,909 425,262,743 ____________ ____________ Grants transferred to profit or loss Balance at 1 January 274,476,899 267,458,355 Grants transferred to profit or loss for the year 30 12,215,204 7,018,544 ____________ ____________ 286,692,103 274,476,899 ____________ ____________ Net carrying amount Balance at 31 December 202,983,806 150,785,844 ================== ==================

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 87 24. DEFERRED TAX (ASSETS)/ LIABILITIES Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM Balance as at 1 January (5,329,458) 9,895,521 (13,473,000) 4,023,772 Recognised in the statements of comprehensive income (Note 32) 16,768,311 (15,224,979) 13,473,000 (17,496,772) ____________ ____________ ____________ ____________ Balance as at 31 December 11,438,853 (5,329,458) - (13,473,000) ================== ===================== ================== ================== Presented after appropriate offsetting as follows:- Deferred tax assets (1,478,444) (53,772,558) - (49,450,707) Deferred tax liabilities 12,917,297 48,443,100 - 35,977,707 ____________ ____________ ____________ ____________ 11,438,853 (5,329,458) - (13,473,000) ================== ===================== ================== ================== The components and movement of deferred tax liabilities and deferred tax assets during the financial year prior to offsetting are as follows: - Property, plant and Biological equipment assets Others Total RM RM RM RM Deferred Tax Liabilities of the Group:- At 1 January 2022 (Restated) 43,442,266 - 5,000,834 48,443,100 Recognised in the statements of comprehensive income (30,524,969) - (5,000,834) (35,525,803) ____________ ____________ ____________ ___________ At 31 December 2022 12,917,297 - - 12,917,297 ================== ===================== ================== ================= Restated : At 1 January 2021 38,308,165 6,525,276 - 44,833,441 Recognised in the statements of comprehensive income 5,134,101 (6,525,276) 5,000,834 3,609,659 ____________ ____________ ____________ ____________ At 31 December 2021 43,442,266 - 5,000,834 48,443,100 ================== ===================== ================== ==================

Deferred Tax Assets of the Group:- At 1 January 2022 (Restated) Recognised in the statements of comprehensive income At 31 December 2022 Restated : At 1 January 2021 Recognised in the statements of comprehensive income At 31 December 2021 Property, plant and Biological equipment assets Receivables Others Total RM RM RM RM RM Deferred Tax Liabilities of the Authority:- At 1 January 2022 30,604,107 - - 5,373,600 35,977,707 Recognised in the statements of comprehensive income (30,604,107) - - (5,373,600) (35,977,707) ____________ ____________ ____________ ____________ ____________ At 31 December 2022 - - - - - ================== ================== ===================== ================== ================== At 1 January 2021 27,888,799 6,525,276 268,185 - 34,682,260 Recognised in the statements of comprehensive income 2,715,308 (6,525,276) (268,185) 5,373,600 1,295,447 ____________ ____________ ____________ ____________ ____________ At 31 December 2021 30,604,107 - - 5,373,600 35,977,707 ================== ================== ===================== ================== ================== NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 88 SALCRA 2022 ANNUAL REPORT Provisions RM Unabsorbed capital allowances RM Unutilised tax losses RM Others RM Total RM 24. DEFERRED TAX (ASSETS)/ LIABILITIES (CONTINUED) Biological assets RM (2,781,640) 1,319,640 (1,462,000) (1,521,940) (1,259,700) (2,781,640) (48,432,579) 48,416,135 (16,444) (31,158,617) (17,273,962) (48,432,579) (2,000,000) 2,000,000 - (1,335,000) (665,000) (2,000,000) - - - (922,363) 922,363 - (53,772,558) 52,294,114 (1,478,444) (34,937,920) (18,834,638) (53,772,558) (558,339) 558,339 - - (558,339) (558,339)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 89 Deferred Tax Assets of the Authority:- At 1 January 2022 Recognised in the statements of comprehensive income At 31 December 2022 At 1 January 2021 Recognised in the statements of comprehensive income At 31 December 2021 Group Authority 2022 2021 2022 2021 RM RM RM RM Subject to agreement with Inland Revenue Board:- Unutilised tax losses 26,516,538 26,516,538 26,516,538 26,516,538 Unabsorbed capital allowances 168,352,690 150,406,534 168,352,690 152,801,200 Infrastructure allowances 5,042,612 5,042,612 5,042,612 5,042,612 ____________ ____________ ____________ ____________ 199,911,840 181,965,684 199,911,840 184,360,350 ================== ===================== ================== ================== The unutilised tax losses is allowed to be utilised for 10 (2021:10) consecutive years of assessment while the unabsorbed capital allowances is allowed to be carried forward indefinely. The deferred tax assets relating to unutilised tax losses, unabsorbed capital allowances and infrastructure allowances are not recognised because it is not yet probable that sufficient future taxable profit will be available to offset against the unutilised tax losses, unabsorbed capital allowances and infrastructure allowances carried forward as at the reporting date. Provisions RM Unabsorbed capital allowances RM Others RM Total RM 24. DEFERRED TAX (ASSETS)/ LIABILITIES (CONTINUED) Biological assets RM (25,397,634) 25,397,634 - (467,940) (24,929,694) (25,397,634) (23,121,968) 23,121,968 - (29,000,000) 5,878,032 (23,121,968) (372,766) 372,766 - (1,190,548) 817,782 (372,766) (49,450,707) 49,450,707 - (30,658,488) (18,792,219) (49,450,707) (558,339) 558,339 - - (558,339) (558,339)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 90 SALCRA 2022 ANNUAL REPORT 25. LEASE LIABILITIES Group 2022 2021 RM RM Net carrying amounts included in the class of property, plant and equipment - Mobile equipment 8,682,746 8,258,022 _____________ ____________ Lease liabilities: Future lease payments payable: - Not later than one year 2,534,752 2,533,716 - Later than one year and not later than five years 2,425,710 4,942,944 _____________ ____________ Total future minimum lease payments 4,960,462 7,476,660 Less: Future finance charges (296,252) (604,540) _____________ ____________ Present value of finance lease payments (Note 37.2) 4,664,210 6,872,120 Payment due within 12 months as current (2,334,647) (2,223,180) _____________ ____________ Non-current liabilities of lease liabilities 2,329,563 4,648,940 ================== ================== Group 2022 2021 RM RM The lease liabilities are analysed as follows : Current liabilities 2,334,647 2,223,180 Non-current liabilities 2,329,563 4,648,940 _____________ ____________ 4,664,210 6,872,120 ================== ================== Lease payable loan bore interest at 2.90% (2021: 2.90%) per annum. The lease payables are secured by the financial institution’s charge over the asset under the arrangement. 26. TRADE PAYABLES Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM Trade payables 65,861,230 48,894,538 879,220 276,954 Distributions due to participants 42,794,236 60,770,126 42,794,236 60,770,126 ____________ ____________ ____________ ____________ Total trade payables, net (Note 37.2) 108,655,466 109,664,664 43,673,456 61,047,080 ================== ===================== ================== ================== 27. OTHER PAYABLES Group Authority 2022 2021 2022 2021 RM RM RM RM Refundable deposits 272,911 239,282 - - Retention monies payable 14,842,198 9,269,982 10,425,683 8,512,510 Non-trade payables 35,088,095 35,845,760 29,928,318 26,284,583 Other payables 3,891,608 2,914,437 3,902,608 2,925,437 Audit fees payable 156,396 162,047 59,996 60,547 Other accruals 69,675,140 74,163,510 61,669,509 62,301,009 ____________ ____________ ____________ ____________ Total other payables, net (Note 37.2) 123,926,348 122,595,018 105,986,114 100,084,086 ================== ===================== ================== ==================

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 91 28. REVENUE Group Authority 2022 2021 2022 2021 RM RM RM RM Revenue from: - Sales of crude palm oil 1,256,545,978 914,955,992 360,848,200 240,243,609 - Sales of palm kernel 164,608,681 134,530,145 45,462,117 33,934,074 - Sales of fresh fruit bunches 10,310,122 5,171,879 7,788,029 7,361,913 - Sales of fertilisers 177,849,436 98,104,419 - - - Transportation income 10,595,710 9,060,497 - - - Engineering works - 279,747 - - - Land development 19,118,696 24,740,972 - - ____________ ____________ ____________ ____________ Total revenue, net of discount and refunds 1,639,028,623 1,186,843,651 414,098,346 281,539,596 ================== ===================== ================== ================== 29. OTHER INCOME Group Authority 2022 2021 2022 2021 RM RM RM RM Interest income - short term deposits 7,008,113 3,856,205 5,291,397 2,717,635 - staff loans 3,329 3,246 3,329 3,246 - term loans to a subsidiary, a related company and an associate 78,793 84,410 78,793 275,117 - preference shares to a subsidiary company - - 200,000 200,000 - term loans to a related company (MPERS S.11) 28,833 29,954 28,833 29,954 Interest income (MPERS) 74,751 88,114 204,910 213,266 Fair value gain on loan from subsidiary - - 1,121,947 98,347 Fair value adjustment on Government loans 6,519,294 13,392,605 6,519,294 13,392,605 Gain on disposal of property, plant and equipment 121,491 726,724 121,491 592,174 Sundry income 33,249,350 36,036,541 29,132,019 32,929,631 Rental income, net of reversal 115,909 93,932 1,004,592 920,265 Gross dividend income - Dividend income from subsidiaries - - 9,950,000 3,320,000 - Dividend income from other investments 92,000 75,112 92,000 75,112 Reversal of interest expense (MPERS) - long term payable - 148,415 - - Reversal of allowance of impairment losses 240,579 - - - ____________ ____________ ____________ ____________ Total other income 47,532,442 54,535,258 53,748,605 54,767,352 ================== ===================== ================== ==================

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 92 SALCRA 2022 ANNUAL REPORT 30. PROFIT BEFORE TAX Profit before tax has been arrived at: Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM After charging: Allowance for impairment of financial assets - Trade and other receivables 252,933 - 6,504 - - Property, plant and equipment 164,695 - - - Amortisation of biological assets (Note 13) 475,738 475,737 475,738 475,737 Amortisation of goodwill (Note 8) - 400,000 - - Auditors’ remuneration - statutory audit 156,396 164,171 59,996 62,671 Auditors’ remuneration - overprovision in prior year (1,175) - (2,675) - Depreciation of property, plant and equipment (Note 7) 45,435,094 44,182,567 25,837,750 25,141,000 Directors’ remuneration 3,219,901 2,644,256 971,642 430,643 Interest expense 13,544,256 19,963,668 9,997,635 17,091,551 Rental expenses 1,808,913 716,519 316,995 243,547 Lease rental of land 211,400 211,400 5,400 5,400 Staff costs ** 76,928,646 66,320,865 49,800,515 41,471,781 Loss on disposal of property, plant and equipment 24,093 74,747 24,093 74,747 Provision for impairment losses in an associate (Note 10) - 445,353 - - Legal and professional charges 481,795 145,170 48,286 44,062 Provision for losses (Note 14) 5,287,867 2,830,457 5,287,867 2,830,457 Fair value loss on other investments - 523,867 - 519,359 Fair value loss on remeasurement of financial liabilities - Long term payable - 201,491 - - Inventories written off 1,590,918 391,417 - - Receivables written off 3,395 - - - Property, plant and equipment written off 15,897 - - -

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 93 30. PROFIT/(LOSS) BEFORE TAX (CONTINUED) Group Authority 2022 2021 2022 2021 RM RM RM RM and crediting:- Interest income (Note 29) - short term deposits 7,008,113 3,856,205 5,291,397 2,717,635 - staff loans 3,329 3,246 3,329 3,246 - term loans to a subsidiary and a related company 78,793 84,410 78,793 275,117 - term loans to a related company (MPERS S.11), net of reversal 28,833 29,954 28,833 29,954 - preference shares to a subsidiary company - - 200,000 200,000 Interest income (MPERS) (Note 29) 74,751 88,114 204,910 213,266 Fair value adjustment on Government loans (Note 29) 6,519,294 13,392,605 6,519,294 13,392,605 Rental income (Note 29) 115,909 93,932 1,004,592 920,265 Gain on disposal of property, plant and equipment (Note 29) 121,491 726,724 121,491 592,174 Management fees income 1,832,602 907,904 3,821,052 2,896,354 Dividend income, gross from (Note 29):- - subsidiaries - - 9,950,000 3,320,000 - other investments 92,000 75,112 92,000 75,112 Amortisation of deferred income (Note 23) 12,215,204 7,018,544 12,215,204 7,018,544 Reversal of impairment losses in an associate (Note 10) 240,579 - - - Reversal of interest expense (MPERS) - long term payable (Note 29) - 148,415 - - Fair value change in other investment 33,099 - - - ================== ===================== ================== ================== **The employee benefits expenses of the Group and the Authority comprise: Group Authority 2022 2021 2022 2021 RM RM RM RM Wages and salaries 65,637,365 59,173,669 41,216,013 36,964,906 Employees’ Provident Fund (“EPF”) 5,939,078 4,781,184 4,016,079 2,736,378 SOCSO contributions 632,413 361,862 413,199 109,386 Pension fund 995,351 1,104,586 995,351 1,104,586 Staff welfare 1,317,583 899,564 753,017 556,525 ____________ ____________ ____________ ____________ Total employee benefits expenses 74,521,790 66,320,865 47,393,659 41,471,781 ================== ===================== ================== ==================

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 94 SALCRA 2022 ANNUAL REPORT 30. PROFIT/(LOSS) BEFORE TAX (CONTINUED) Group Authority 2022 2021 2022 2021 RM RM RM RM Number of employees as at 31 December Executive 176 173 140 134 Non-Executive 858 882 687 725 ____________ ____________ ____________ ____________ 1,034 1,055 827 859 ================== ===================== ================== ================== Number of employees as at 31 December On Employees Provident Fund (“EPF”) 923 912 716 716 On Pension Fund 111 143 111 143 ____________ ____________ ____________ ____________ 1,034 1,055 827 859 ================== ===================== ================== ================== 31. FINANCE COSTS Group Authority 2022 2021 2022 2021 RM RM RM RM Term loan interest 5,142,828 5,287,409 3,356,766 3,688,074 Lease liability interest 321,781 412,362 - - Overdraft interest 369,261 320,517 5,050 120 Cashline interest 73,064 41,731 - - Trade finance interest 1,118,028 509,045 116,525 10,753 Interest expenses - MPERS S.11 6,519,294 13,392,604 6,519,294 13,392,604 ____________ ____________ ____________ ____________ Total finance costs 13,544,256 19,963,668 9,997,635 17,091,551 ================== ===================== ================== ================== 32. INCOME TAX EXPENSE Group Authority 2022 2021 2022 2021 (Restated) RM RM RM RM Current tax expense:- Income tax:- For the financial year 13,638,065 13,468,058 8,040,111 7,057,471 Under/(Over) provision in prior year 1,366,329 4,494,417 (115,525) 4,491,598 ____________ ____________ ____________ ____________ 15,004,394 17,962,475 7,924,586 11,549,069 ================== ===================== ================== ================== Deferred tax expense/(credit) (Note 24):- For the financial year 14,962,755 (6,536,575) 11,805,205 (8,982,000) Under/(Over) provision in prior year 1,805,556 (8,688,404) 1,667,795 (8,514,772) ____________ ____________ ____________ ____________ 16,768,311 (15,224,979) 13,473,000 (17,496,772) ================== ===================== ================== ================== Total income tax expense for the year 31,772,705 2,737,496 21,397,586 (5,947,703) ================== ===================== ================== ==================

32. INCOME TAX EXPENSE (CONTINUED) A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Authority is as follows: Group 2022 2021 (Restated) RM RM Profit before tax 40,773,934 50,567,807 ____________ ____________ Taxation at statutory tax rate of 24% (2021: 24%) 9,785,744 12,136,274 Adjustments:- Non-taxable income (4,974,206) (2,577,276) Tax-exempt income (825,531) - Expenses not deductible for tax purposes 23,945,506 3,586,857 Utilisation of capital allowances and losses (2,953,536) - Unutilised capital allowance carried forward (524,624) - Under/(Over) provision of income tax in prior year 1,366,329 4,494,417 Under/(Over) provision of deferred tax in prior year 1,805,556 (8,688,404) Deferred tax assets not recognised 3,732,358 - Utilisation of previously unrecognised unabsorbed capital allowance 52,250 (6,214,372) Other statutory income 362,859 - ____________ ____________ Total income tax expense for the year 31,772,705 2,737,496 ================== ================== Authority 2022 2021 RM RM Profit before tax 14,068,695 20,505,113 ================== ================== Taxation at statutory tax rate of 24% (2021: 24%) 3,376,487 4,921,227 Adjustments:- Non-taxable income (4,519,655) (2,577,276) Expenses not deductible for tax purposes 17,256,126 2,953,836 Under/(Over) provision of income tax in prior year (115,525) 4,491,598 Under/(Over) provision of deferred tax in prior year 1,667,795 (8,514,772) Deferred tax assets not recognised 3,732,358 - Utilisation of previously unrecognised unabsorbed capital allowance - (7,222,316) ____________ ____________ Total income tax expense for the year 21,397,586 (5,947,703) ================== ================== 33. GOVERNMENT OPERATING GRANTS There has been no State Government Operating Grant received since 2007 by the Group and the Authority. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 SALCRA 2022 ANNUAL REPORT 95

34. DEVELOPMENT COST Group 2022 2021 RM RM Balance at 1 January 294,665 106,515 Recognised during the year 154,721 188,150 ____________ ____________ Balance at 31 December 449,386 294,665 ================== ================== The development cost incurred is in respect of the proposed business plan of SALCRA Jaya Sdn. Bhd. for the development of a Transit Logistic Hub in Samarahan, Sarawak. 35. SIGNIFICANT COMMITMENTS (a) Capital Commitments Capital commitments relate to the Group’s and the Authority’s commitments for capital expenditures for the acquisition and development of biological assets, property, plant and equipment and other long-term assets. At the end of the year, the Group and the Authority have made commitments for the following capital expenditures: Group Authority 2022 2021 2022 2021 RM RM RM RM Capital expenditures approved by directors/ board members: Approved and contracted for 22,023,393 21,443,734 2,697,763 152,553 Approved but not contracted for 1,924,625 1,924,625 - - ____________ ____________ ____________ ____________ 23,948,018 23,368,359 2,697,763 152,553 ================== ===================== ================== ================== (b) Operating lease commitments Group 2022 2021 RM RM Not later than 1 year 605,894 372,100 Later than 1 year but not later than 5 years 2,742,029 663,440 ____________ ____________ 3,347,923 1,035,540 ================== ================== 36. RELATED PARTY DISCLOSURES (i) Control Relationship The names of the subsidiaries in the Group are disclosed in Note 5. (ii) Key Management Personnel Compensation The Group’s directors and the Authority’s board members and other key management personnel compensation, including compensation paid to management entities that provide key management personnel services, for the year ended 31 December 2022 and the comparative prior year are as follows: - Group Authority 2022 2021 2022 2021 RM RM RM RM Total compensation 3,219,901 2,644,256 971,642 430,643 ================== ===================== ================== ================== NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 96 SALCRA 2022 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 36. RELATED PARTY DISCLOSURES (CONTINUED} (iii) Related Party Transactions The Authority’s related party transactions for the year ended 31 December 2022 and the corresponding comparative prior year are as follows: Authority 2022 2021 RM RM Sales of fresh fruit bunches (1,891,628) (2,746,657) Purchase of fresh fruit bunches 6,688,139 4,365,635 Purchase of fertiliser 2,069,654 1,037,584 Rental income (895,243) (829,143) Fund management fee received (192,851) (180,450) Marketing fee received (2,275,080) (1,808,000) Loan interest receivable /received (200,000) (417,512) Transportation services 1,367,303 1,017,923 Supply of plantation machinery 4,452,860 2,378,069 Accommodations 38,550 80,450 ================== ================== (a) Sales of goods from: Authority 2022 2021 RM RM Authority’s own estate 1,891,628 2,746,657 ================== ================== The sales of fresh fruit bunches have been transacted mainly at the current prices prevailing at the dates of the transactions in the normal course of business of the Authority. (b) Purchases of goods from: Authority 2022 2021 RM RM Entities over which the Authority has control or significant influence 8,757,793 5,403,219 ================== ================== The purchases of goods relate to purchases of fresh fruit bunches and fertiliser (2021: fresh fruit bunches and fertiliser). They were transacted mainly at the current prices prevailing at the dates of the purchases. The credit terms of the purchase were 1 month (2021: 1 month). The balance unpaid at the end of the year for the Authority was RM202,652 (2021: RM715,105), which was accumulated in the subsidiaries’ current payables. No interest was charged for the subsidiaries’ current payables. SALCRA 2022 ANNUAL REPORT 97

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 36. RELATED PARTY DISCLOSURES (CONTINUED) (iii) Related Party Transactions (Continued) (c) Services provided to: Authority 2022 2021 RM RM Entities over which the Authority has control or significant influence 2,467,931 1,988,450 ================== ================== The fund management fee and marketing fee charged to subsidiaries were based on agreed terms between the Authority and the respective subsidiaries. The fund management fee is charged at 5% on the total interest income earned on the deposits of the subsidiaries, whereas the marketing fee is charged at RM10 per metric tonne (MT) of crude palm oil (CPO) and palm kernel (PK) sold on behalf of the subsidiaries. They were payable within a month of the services provided. The balance unpaid at the end of the year of the Authority was RM844,212 (2021: RM607,450). No interest was charged for the related party current receivables. (d) Services provided from: Authority 2022 2021 RM RM Entities over which the Authority has control or significant influence 5,858,713 3,476,442 ================== ================== The service provided to the Authority during the year is transportation services, supply of plantation machinery and accommodations (2021: transportation services). The transportation services were charged by the subsidiaries for transporting the PK on behalf of the Authority. The balance unpaid at the end of the year of the Authority was RM1,403,583 (2021: RM1,734,777). No interest was charged for the related party current payables. (e) Rental income Authority 2022 2021 RM RM Entities over which the Authority has control or significant influence 895,243 829,143 ================== ================== Rental income was derived from rental of lands and buildings to the subsidiaries and was collected yearly. The rent charged was based on negotiated terms agreed in advance. The balance unpaid at the end of the year of the Authority was RM297,772 (2021: RM265,071). No interest was charged for the related party current payables. (f) Interest income Authority 2022 2021 RM RM Entities over which the Authority has control or significant influence 200,000 417,512 ================== ================== Interest income was derived from loan to subsidiaries at the rates ranging from 4% to 6% (2021: 4% to 6%) per annum. 98 SALCRA 2022 ANNUAL REPORT