OUR VISION - gentingplantations.com

1 OUR VISIONWe strive: To become a leader in the plantation industry. To embark aggressively onto value-added downstream manufacturing activities which are synergistic to our core business. To enhance return on the company land bank through property development activities. To adopt a market-driven and customer-oriented approach, with emphasis on product quality and diversity. To strengthen our competitive position by adopting new technologies and people are the key to achieving the company s VISION , we are committed to develop our employees and create a highly motivating and rewarding environment for PROFILEG enting Plantations, a subsidiary of Genting Berhad, commenced operations in 1980. It has a landbank of about 64,600 hectares in Malaysia and some 183,000 hectares (including the Plasma scheme) in Indonesia. It owns seven oil mills in Malaysia and four in Indonesia, with a total milling capacity of 550 metric tonnes per hour.

2 In addition, our Group has ventured into the manufacturing of downstream palm-based products. Genting Plantations has also diversified into property development to unlock the value of its strategically-located landbank and has invested significantly in biotechnology in a major effort to apply genomics-based solutions to increase crop productivity and sustainability. GENTING PLANTATIONSCONTENTS02 Chairman s Statement/ Penyata Pengerusi/ 12 Board of Directors14 Directors Profile22 Management & Corporate Information 24 Corporate Diary26 financial Highlights27 Five-Year Summary29 List of Group Properties30 Location of Group Properties32 Management s Discussion and Analysis of Business Operations and financial Performance35 Operational Review42 Sustainability Statement44 Highlights of Group s Key Sustainability Performance45 Corporate Governance Overview Statement66 Audit and Risk Management Committee Report70 Statement on Risk Management and Internal Control73 Directors Report and Statement by Directors financial StatementS.

3 82 Income Statements83 Statements of Comprehensive Income84 Statements of financial Position88 Statements of Changes in Equity92 Statements of Cash Flows95 Notes to the financial Statements162 Statement on Directors Responsibility 162 Statutory Declaration163 Independent Auditors Report168 Analysis of Shareholdings/ Warrantholdings175 Notice of Annual General Meeting180 Statement Accompanying Notice of Annual General Meeting Form of Proxy Group Offices and Operating UnitsGENTING PLANTATIONS BERHAD | ANNUAL REPORT 201702 Dear Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report and audited financial Statements of Genting Plantations Berhad ( the Company ) and its subsidiaries ( our Group ) for the year ended 31 December OVeRVieWThe year 2017 marked an upturn in fortunes for the industry, which witnessed a tangible recovery in crop production from the effects of drought in the preceding years along with higher crude palm oil ( CPO ) prices from sustained global demand, with a peak at the start of the year lending momentum to strengthened year-on-year prices.

4 Despite the uptick in fresh fruit bunch ( FFB ) production, the higher price level further underscored continued global demand for palm oil as an essential commodity for edible and non-edible better weather conditions amid an increase in harvesting areas and higher-yielding maturity profiles in Indonesia, the Group registered a 17% increase in fresh fruit FFB output against 2016 to million metric tonnes ( mt ). Group FFB yield also improved in 2017 averaging mt per hectare against mt per hectare in the previous Group s average CPO price achieved for the year rose 3% to RM2,715 per mt from RM2,631 per mt in 2016, while average palm kernel prices achieved closely matched that of the previous year, recording RM2,443 per mt. For 2017 , our Group recorded billion in revenue and a pre-tax profit of million. In comparison, revenue and pre-tax profit was billion and million respectively in 2016. The higher year-on-year revenue was mainly driven by a commendable showing from the Plantation Division from the positive factors mentioned earlier while the Downstream Manufacturing Division was another key contributor following the commencement of its 600,000 mt per annum capacity palm oil refinery in early 2017 .

5 Collectively, both these Divisions recorded billion in revenue while Group pre-tax profit was buoyed by contributions from our Plantation Division, particularly the Indonesian operations, which registered a 38% year-on-year increase in FFB SSTATEMENTANNUAL REPORT 2017 | GENTING PLANTATIONS BERHAD03 DiViDenDSGenting Plantations is committed to reward our shareholders with continuous returns in the form of dividends, whilst simultaneously recognising the need to maintain sufficient reserves to support our Group s future growth objectives. Accordingly, the Board of Directors has recommended a final single-tier dividend of sen per ordinary share for the 2017 financial year. The Board has also declared a special single-tier dividend of sen per ordinary share. Should the final dividend be approved by shareholders, total dividend (including the interim dividend of sen) for the 2017 financial year will amount to sen per ordinary share.

6 In comparison, the total dividend for the 2016 financial year amounted to sen per ordinary cORe ValUeSThe principles and values espoused by our beloved Founder, the late Tan Sri Lim Goh Tong, namely Hard Work, Honesty, Harmony, Loyalty and Compassion have always been embedded in our work culture and business practices and are now known collectively as the Genting Core 28 February 2018 would have been our Founder s 100th birthday and 10 years after his passing, it is timely and fitting that we remember his legacy and his core values that have proven to be invaluable for the growth and global expansion of the Genting Group. By celebrating Founder s Day every February 28th, we humbly remind ourselves that these values are wise and enduring, reliable and Board and management recognise that the longevity of the palm oil industry and the sustainability of our Group are predicated on preserving the inherent value in each of the Genting Core Values, and are of one mind that these values aptly represent the core philosophy and guidance for our Group s forward mileStOneSFor the 2017 financial year, our Group implemented additional value-accretive measures across all our business divisions.

7 Recognising Indonesia as the fulcrum for our Group s mainstay Plantation Division, our Group has expanded our landbank in Kalimantan by more than 19,200 hectares (including areas allocated to Indonesia s Plasma scheme) via the acquisition of an effective 85% equity interest in PT Kharisma Inti Usaha from Lee Rubber Company (Pte) Ltd, which also added a fourth palm oil milling facility to our Group s asset base in Indonesia. The resulting increase in our Group s planted hectarage from this acquisition will undoubtedly boost our Group s FFB production in the years Group s Downstream Manufacturing Division saw the commissioning of its 72%-owned palm oil refinery in January 2017 , the result of collaboration with its joint venture partner, the Musim Mas Group, which is a leading integrated palm oil producer with a worldwide market reach. Along with the existing 300,000 mt per annum capacity biodiesel plants which form part of our presence in the Palm Oil Industrial Cluster (POIC) Lahad Datu in Sabah, this new palm oil refinery exemplifies our Group s diversification further downstream of the supply our Group s Property Division, operating conditions for the year 2017 remained challenging amid the generally soft property market outlook.

8 Despite these challenging conditions, our Property Division did well to register an increase in sales for both its Genting Indahpura and Genting Pura Kencana projects, underlining our property buyers confidence in these affordably-priced and conveniently-located residential and commercial the year, our Group celebrated the opening of Genting Highlands Premium Outlets , the second establishment under our joint venture with the Simon Property Group after Johor Premium Outlets . Genting Highlands Premium Outlets is by all accounts unique with its location set amidst the cool and scenic hilltop destination that is Genting Highlands, placing it firmly on the list of attractions to visitors of Resorts World Genting. This new retail landmark has outperformed expectations within its first six months of operations and is expected to cement our Group s retail business footprint alongside Johor Premium Outlets.

9 Palm Oil S FUtURe anD SUStainaBilitYThe year 2017 was the centennial commemoration of the first commercialisation of the oil palm in Malaysia, a resounding affirmation of the enduring role that this golden crop has as a cornerstone of Malaysia s economy with the country being the second largest palm oil producer in the believe that the long-term prospects of the palm oil industry are indeed very promising as oil palm grows in production, commercial viability and increasing global recognition as a superior resource in all aspects of modern life from consumer products and biofuels to high-value specialty chemicals and olefins. However, we foresee potential challenges for the year ahead with the industry forecasting rising production and crop yields as supply normalises, which if not matched by incremental exports would give rise to higher palm oil stockpiles resulting in prices that are expected to average at lower levels compared to 2017 .

10 The Malaysian palm oil industry will continue to face operational challenges particularly in securing sufficient manpower to cope with the increase in crop S STATEMENTGENTING PLANTATIONS BERHAD | ANNUAL REPORT 201704 Furthermore, markets with significant domestic oilseed industries may continue to apply protectionist stances causing downward pressure on CPO prices. Another key development that may impact palm oil s longer-term outlook was the landmark vote at the start of 2018 by the European Union (EU) Parliament towards banning palm oil imports for biofuel programmes by such as trade protectionism and manpower shortages aside, our Group recognises the challenge for future growth coming from the broadening requirements for accountability from various stakeholders on the palm oil industry s sustainability policies and practices. We are proud to say that the sustainability agenda is and remains a central tenet to our Group s corporate Group upholds self-regulation and adopts best practices as evidenced by our ongoing certification by the Roundtable of Sustainable Palm Oil (RSPO), and are committed to the Malaysian Government s mandate for all palm oil producers in Malaysia to be fully compliant to the Malaysian Sustainable Palm Oil (MSPO) certification by the end of 2019.