MASTER of MANAGEMENT

UNIRAZAK, KUALA LUMPUR

TERM PAPER:

A Study of FGV Holdings Berhad

(Formerly known as Felda Global Ventures Holdings Berhad)

NAME : MOHD FAZLI BIN MOHD ARSHAD

STUDENT ID. : M18701076

COURSE : ORGANIZATIONAL LEADERSHIP (QGM5094)

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ORGANIZATIONAL LEADERSHIP (QGM5094)

INTRODUCTION

The purpose of this paper is to study the FGV Holdings (Formerly known as Felda
Global Ventures Holdings) company profile and background at the current situation.
The first objective of this study is to identify the problems faced by the company. The
second objective is to study the theory related motivational and leadership impact to
the FGV Company. This study also is focused on a few issue like Mergers and
Acquisition, Cultural Diversity, Organizational Policies and Culture, Crisis of
Management and the last is Staff Ethics’ and Behaviors. We will explain and study
the effect of the mentioned issue to the FGV Holdings and try to provide
recommendation for the company to solve the problem base on the theoretical on
motivational and leadership theory.

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Table of Contents

Introduction 1

Background 3

Statement of Problem 5

Objectives of Study 11

Analysis 11

Literature Review 13

Suggestion 19

Summary of the Study 21

Conclusion 22

Reference 23

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BACKGROUND

FGV Holdings Berhad (Formerly known as Felda Global Ventures) is the one
of Malaysia's driving worldwide expanded agri-business under 6 primary business
Clusters namely: Palm Upstream, Palm Downstream, Rubber, Sugar, R&D and Agri
Services, and Transport, Logistics, Marketing and Others (TLMO). At present, this
company is the world's biggest maker of rough palm oil (CPO) and the 3rd biggest oil
palm estate administrator. With activities in excess of 10 nations crosswise over
North of America, Europe, Asia and the Middle East. FGV tries to be among of the
main 10 agribusiness aggregates on the planet by 2020. The Palm Upstream Cluster
is FGV's biggest income and structures importantly it is core to the group. This
company has complete land bank in excess of 450,000 hectares, Palm Upstream is
in charge of FGV's profile as the world's biggest CPO maker which delivers in
excess of three million tons of CPO yearly.
In other side, Palm Downstream Cluster secures the upstream tasks by giving
an ensured take-up of items. Utilizing on its verified pipeline of CPO feedstock, the
Cluster is currently wandering into increasingly creative and more extensive overall
revenue items, for example, biodiesel, tocotrienol, graphene and carbon nanotubes.
These will open new markets for FGV in higher development businesses including
aeronautics, safeguard and oil and gas. Moving in parallel to these items, FGV is
expanding its piece of the overall industry in oleo chemicals, oils and fats, and quick
moving customer products.
The Rubber Cluster also is a significant segment of their harvest
enhancement program. With just about 60 years of involvement in the elastic manor
part, FGV can take advantage of an abundance of information to get to the
developing worldwide market for handled elastic. Its market-driving elastic preparing
activities are sponsored by demonstrated elastic domain the executives and warning
administrations accreditations.
The other one is Sugar Cluster which is contributes further to the company's
victories. Through its auxiliary MSM Malaysia Holdings Bhd (MSM), FGV is
Malaysia's driving refined sugar maker. FGV directions in excess of 64 percent of the
neighbourhood refined sugar advertise with a yearly generation limit of over 1.1
million tons. In light of twofold digit development of worldwide sugar request and
FGV's extension through acquisitions and joint endeavours with provincial

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powerhouses, MSM is ready to move toward becoming Asia-Pacific's biggest sugar

centre point.

FGV’s map over the world

Supporting this companies organizations is that its reality class Research &
Development and Agri Services Cluster. It was 4 many years of innovative work
have finished in South East Asia's biggest biotechnology focus, driven by a group of
profoundly concentrated researchers. The Cluster's key goal is to produce bleeding
edge agri-business advances to improve operational execution and business usage
overall features of FGV. The organization's honor leading in Yangambi oil palm
planting material, whichever it has 40 percent piece of the overall industry in
Malaysia that is only one of R&D's creative items. The other operational Transport,
Logistics, Marketing and Others (TLMO) cluster has guarantees incorporated
inventory network support over the majority of FGV's center business exercises.

The productive, multi-billion ringgit activity has the world's biggest building and
storerooms for vegetable oil. It is additionally entrusted with associating and
controlling the progression of advantages over FGV's organizations, driving

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gathering wide efficiencies. Looking forward, the Cluster is fortifying a universal limit
by producing organizations with abroad coordinated coordinations suppliers was key
fare markets. Besides, the ongoing foundation of FGV Trading Sdn Bhd that
attention on exchanging and tolling business, they are on the road to success to
turning into a universal palm oil merchant. The company now leads the pack in
FELDA's promise to agrarian manageability by dealing with the Group's dynamic
investment in the Roundtable on Sustainable Palm Oil (RSPO).

Notwithstanding being one of RSPO's soonest individuals, FGV speaks to the

main complete palm oil store network to achieve the International Sustainability and
Carbon Certification (ISCC). This further concretes its assurance to take an
administrative position in practical activities. FGV's movement towards getting to be
one of the world's driving agri-organizations continuously 2020 will open up
worldwide conceivable outcomes and possibilities through our agri-business
arrangements. With world-class innovation and the energy of it's in excess of 19,000
skilled representatives, FGV will address the issues of green and practical planet.

STATEMENT OF PROBLEM

Mergers and Acquisition

FGV now has begun real action against 14 of their past boss and top
organization. It seem acknowledge to be responsible for a horrible game plan 4
years earlier. FGV past executive namely Isa Samad and past get-together their
president and CEO Mohd Emir Bavani, among others involved in the case. They
social occasion is attempting to recover and reveal a RM514 million mishap from its
RM1.1 billion of London-listed Asian Plantation LTD (APL) in the year of 2014. Other
two separate filling to Bursa Malaysia today, FGV was mentioned the APL case was
the fundamental finding of their legitimate and inward examinations over its past
game plans. Others joined a hypothesis involved FGV’s Cambridge Nano structures
Ltd, the verifying condominium called Troika, the rental of association cars,
adventure inti their Green Energy Sdn Bhd and the acquirement of Yapidmas farms
located in Sabah.

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Other than Isa Samad and Mohd Emir, this company moreover named their
past (CFO) Ahmad Tiffly Datuk Mohd Talha, past senior VP (SVP) Farisan Mokhtar
and past senior general chairman (SGM) Rasydan Alias Mohamed in the case. The
rest are past officials Tan Sri Sulaiman Mahbob, Datuk Omar Salim, Datuk Noor
Ehsanuddin Mohd Harun Narrashid, Datuk Yahya Jabar, Datuk Faizoull Ahmad, Tan
Sri Ismee Ismail, Tan Sri Wan Abdul Aziz Wan Abdullah, Datuk Nozirah Bahari dan
Datuk Fazlur Rahman Ebrahim.

The board of the company wishes to revive the criminological examinations

concerning the acquisitions of APL have been settled up and the APL presentation
was made as requirements. Their association brought this critical action for setback
encountered their powerlessness to discharge their specific gatekeeper commitment,
a commitment of consistency or commitment to rehearse reasonable thought, ability,
and relentlessness. FGV furthermore see that it had searched for settle against the
prosecutors hurts among others for totalling of RM514 million for an incident from the
APL obtainment. Interest and the rate of 5 percent for every annum on damages
allowed beginning from the date of the filling of the lawsuit until the date of full and
last settlement.

For the present, the association getting to the cash related impact on the
association rising up out of this suit and will make a further affirmation at some point
not long from now. FGV, in any case, said that there was no reaction of the case on
previous exercises. The company moreover tell that it was all the while during the
time spent surveying the disclosures and legal urging of various trades to be explicit
the enthusiasm for FGV Cambridge Nano systems verifying of Troika townhouse and
rental of association vehicles.

The other 2 quantifiable examinations explicitly the enthusiasm for FGV

Green Energy and the acquirement of Yapidmas farms were in progression. On-
going internal examinations concerning 6 further issues have in like manner been
endeavored. This issue falls into groupings of open credit line, poor trading practices
and poor palm oil bargains that have realized dreadful commitments of about RM100
million. Direct distinctions of obtaining contracts in burst of best practice and the
fundamental inadequacy of authorities between May 2016 and April 2018, which had

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achieved cash related disasters outperforming RM170 million over the period.

The FGV Holdings Group grasps a culture that regards and influences on the
assorted variety of their kin, clients and networks.

FGV is focused on holding fast to human rights structures characterized in the

UDHR and the ILO's Core Conventions to guarantee that working conditions are
non-exploitative. The Group's regard and duty to key human rights are epitomized in
our Group esteems, Code of Business Conduct and Ethics for Employees and
Directors, Group Sustainability Policy and the Group's Discretionary Authority Limit.
The Group Sustainability Policy, the subtleties of which are explained on page 62 of
this announcement applies to every one of our representatives, executives and all
gatherings engaged with any business dealings with FGV Group.

FGV has executed, through the Code of Business Conduct and Ethics for
Employees and Directors and Group Sustainability Policy, arrangements for
equivalent chance and forbiddance of underage specialists and will keep on
supporting the rules on human dealing and constrained work abuse, inappropriate
behavior and viciousness. Inside the Code of Business Conduct and Ethics for
Employees and Directors, representatives are permitted to shape and join worker's
organizations to can anticipate their needs all things considered. FGV knows about
its duty to secure the privileges everything being equal and will keep on effectively
connect with its representatives to guarantee that their needs, for example, wages,
safe house and access to administrations are met, and to make an amicable and
prosperous workplace.

FGV is committed to maintain the ILO and applicable tyke insurance laws and
guidelines in every nation in which the Group conducts business exercises as well as
exchanges just as help other global and nearby settlements which request that
youngsters get assurance against any types of maltreatment and misuse. The Group
organizations will guarantee that all colleagues watch the need to consent to the
important kid work laws and all FGV Group's providers and subcontractors are
disallowed from contracting representatives who are under the base lawful age.

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FGV has drawn in TFT, an association with broad information and experience
working with minimized gatherings, to direct the 'Backing for Transformation' activity
in four (4) chose locales of FGVPM, FELDA and FTPSB and spotlight on five (5)
zones influencing outside visitor laborers in oil palm ranches. The activity means to
recognize holes among strategy and usage and prescribe explicit activity intends to
address five (5) center issues, to be specific constrained reinforced work, moral
enlistment, business contract, the lowest pay permitted by law and wellbeing and
wellbeing which issues were featured by the Wall Street Journal (WSJ) on 26 July
2015.

The report from WSJ had incited RSPO to delegate Accreditation Services
International (ASI) to direct an evaluation on the charge of claims. To discover the
cases, FGV has drawn in with Wild Asia (WA) to carry on a confirmation evaluation
on the claim on both WSJ and ASI discoveries. The two discoveries are openly
accessible on FGV site. The association with TFT has empowered us to distinguish
holes in our present approach duty and practices explicitly in five (5) center regions
and embrace explicit, quantifiable and time-bound activity intend to cure the
circumstances in the accompanying four (4) explicit territories as per the United
Nations (UN) Guiding Principles on Business and Human Rights and material laws
and guidelines:

• Institutional reinforcing and authority

• Policy duty

• Due determination

• Supplier, people group and outside Stakeholders' commitment

Crisis Management in FGV Holdings.

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FGV Holdings Berhad has today started legitimate activity against 14 previous
chief and top administration it accepts to be in charge of a terrible arrangement 4
years prior. FGV namely previous director Isa Samad and previous gathering
president also their CEO Mohd Emir among the others in the claim.

The above issue gathering is trying to recuperate of RM514 million misfortune

from their RM1.1 billion of London-listed Asian Plantation (APL) in year 2014. In two
part of filling to Bursa Malaysia, the company tell the APL claim was the main reason
of its legal and inner examinations over the past arrangements. Others incorporated
a speculation into FGV Cambridge Nano frameworks Ltd. The securing of Troika
Condominiums and the rent of organization autos, venture into FGV’s Green Energy
and the procurement of Yapidmas ranches located in Sabah.

Other than Isa Samad and Mohd Emir, the company additionally named
previous (CFO) Ahmad Tiffly Datuk Mohd Talha, previous senior VP (SVP) Farisan
Mokhtar and previous senior general administrator (SGM) Rasydan Alias Mohamed
in the claim. The rest are previous executives Tan Sri Sulaiman, Datuk Omar Salim,
Datuk Noor Ehsanuddin, Datuk Yahya Jabar, Datuk Faizoull, Tan Sri Ismee Ismail,
Tan Sri Wan Abdul Aziz, Datuk Nozirah Bahari dan Datuk Fazlur Rahman Ebrahim.

The board decided and wishes to refresh that the criminological examinations
concerning the acquisitions of APL has been finished up and that the APL
declaration was made as needs be. The group organization brought this activity for
misfortune experienced their inability to release their particular guardian obligation,
obligation of constancy or obligation to practice sensible consideration, expertise and
steadiness.

FGV additionally notice that it had looked for settle against the litigants among
others harms. Totalling around RM514 million for misfortune with the APL
procurement, intrigue and the rate of 5 percent for each annum on harms granted
beginning from the date of the filling of the lawsuit until the date of last settlement.

For present, the organization getting to the money related effect on the
organization emerging from this suit and will make a further declaration sometime in
the not too distant future. FGV, anyway said that there was no effect of the claim on
existing activities. The Group likewise said it was still during the time spent
assessing the discoveries and lawful exhortation of different exchanges to be

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specific the interest in FGV Cambridge Nano frameworks securing of Troika

townhouse and rent of organization vehicles.

The other two measurable examinations specifically the interest in FGV’s

Green Energy and their procurement of Yapidmas ranches were in advancement.
On-going inward examinations concerning 6 further issues have likewise been
attempted. These issues fall into classifications of open credit lines, weak obtaining
exchanging practices and poor palm oil deals that have brought about awful
obligations of about RM100 million, direct honors of acquisition contracts in rupture
of best practice and the basic deficiency of specialists between May 2016 and April
2018, that had brought about money related misfortunes surpassing RM170 million
over the period.

Organizational Policies and culture in FGV Holdings Group.

Reasonability is fundamental for the whole deal accomplishment of FGV. To

be sensible, FGV needs to manage all potential viability risks from its own one of a
kind exercises and moreover alongside its stock system. Just in this way, FGV can
meet the routinely extending accomplices' craving and secure a better than average
market for its things and organizations while fulfilling its money related responsibility.
This requires a general procedure that isn't simply monetarily strong, biologically
neighborly and socially commendable with incredible good characteristics, yet also
fiery to be used in all FGV strength units. Pondering this the Group Sustainability
Policy (GSP) has been drafted to control every individual, claim to fame units and
related assistants in coordinating their activities in an agreeable manner.

The Group Sustainability Policies (GSP) covers:

1. FGV Groups Commitment to Sustainability: Mentions on the strategy taken by

FGV Group on the sensible use of benefits, duty with accomplices and meeting
accomplice’s necessities and wants.

2. Environmental Stewardship: Expresses in travel FGV social affair mitigates

the biological impact from its forte units in relations to managerial need, volunteer
rules, and foreseen norms.

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3. Social and Economic Responsibility: Touches on strengthening human and

social state house to delegates, brief laborers, partners and adjacent systems in and
around FGV operational zones. This fuses safe and non-discriminative working
social occasions, careful work, with respect to human rights, moral business
immediate concerning close-by system's rights.

4. Value Chain: Stresses on getting the obligation of all players in FGV's value
chain to get a handle on supportable practices in their fragment.

5. Traceability: To show FGV's devotion in ensuring rough materials are

obtained from real sources, especially oil palm things that should start from "No peat,
No Deforestation, and No Exploitation" district.

6. Governance Responsibility: States the significant substance accountable for

the viable execution of the GSP.

7. Reporting of FGV Group's Sustainability Efforts: Describes the declaring

principles of FGV's supportability execution to accomplices in fitting structure and
channels.

By having this GSP, FGV Group would be better arranged to address

noteworthy viability stresses in its forte units. With the extraordinary use of the GSP
inside the affiliation and along its value chain, FGV will more likely than not adjust
Environmental, Social and Economic needs and make a constructive outcome on
accomplices and handy business.

OBJECTIVE OF STUDY

The objectives of this study are to:

1. The first objective of this study is to identify the problems faced by the
company.
2. The second objective is to study the theory related motivational and
leadership impact to the FGV Company

ANALYSIS.

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FGV to focus on productivity, efficiency improvements.

There is a couple of examination identified with FGV need to essential centre

this year which is to proceed with their profitability and effectiveness to make
enhancements over all the organization's business tasks. Simultaneously, the
organization will strengthen endeavours ashore bank extension, improvement of high
claim to fame items and extend items geological impression over the locale.

FGV, the world's biggest rough palm oil (CPO) maker, delivers around three
million tons every year. Its foremost divisions incorporate estate, sugar just as
coordination and booster organizations. The organization's most recent yearly
incorporated report that FGV's voyage to achieve its objectives would be guided by
four key pushes to be specific:

1. Operational magnificence.

2. Moving down worth chain.

3. Growth through portfolio adjusting.

4. Optimize budgetary and human capital.

We investigate that FGV was noticed that development through portfolio

adjusting will incorporate sharp worth accretive land bank extension, synergistic key
unions in key utilization nations, starting its sugar treatment facility activity in Johor
just as developing the coordination and bolster organizations' abilities to produce
outside circumstances.

Other key centres investigate would be divestment of non-centre and non-

performing resources speculations, labour advancement and ability improvement
and upgrading the details of existing joint endeavour understandings. On another
note, dissect should bring up that FGV experienced a time of administration
challenges in 2017 that influenced the general recognition towards the organization.
In any case, FGV's board individuals' unfaltering gave approach and receptiveness
had enabled them to defeat this troublesome section and made them stronger going
ahead.

FGV should realize it isn't only "the same old thing" for boosting their forward
energy with another board piece and re-established centre around our business

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motivation to separate themselves as a dynamic, esteem driven element in the

commercial centre.

In the yearly report, Chairman Datuk Wira Azhar Abdul Hamid likewise
depicted that for the most recent year was hard for the FGV gathering and FGV
snatched the features for the wrong reasons. The outside world looked in and it
found a few holes and slips by in FGV administration, operational norms and
sometimes is their judgment.

There are likewise were disclosures that stunned their partners and fingers
were pointed in allegation at the FGV's pioneers. It was a horrible period. In any
case, all that is currently previously, a past that is behind them, which FGV will think
back upon just as exercises learned and a notice of history never to rehash.

We examine and called attention to that FGV has restored its emphasis on
system and execution the executives, stressing the need to set clear objectives and
targets. The FGV's Strategic Plan (SP20 (V2)) was endorsed by the board toward
the beginning of 2018 and they will follow execution to guarantee that FGV meets
both their forceful inner desires and those of every one of their investors too.

LITERATURE REVIEW

Who FGV Holdings, Why We Are Here

FGV works as a Malaysian-based worldwide agrarian and agri-wares

organization. FGV is the world's biggest Crude Palm Oil (CPO) maker and the third
biggest oil palm estates administrator. The foundation of FGV goes back to over 50
years prior, when the Federal Land Development Authority (FELDA) was set up. This
body was shaped as a major aspect of the Land Development Ordinance of 1956. It
meant to give land to the possibly poor, landless and country families to resettle and
create agri-based land. Through a basically overseen conspire that empowered a
dynamic and gainful network, these families' financial standing was raised because
of a steady pay.

FGV was set up in 2007 and at first worked as the business arm of FELDA.
FGV produces oil palm and elastic estate items, soybean and canola items,

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oleochemicals and sugar items. The organization was recorded on Bursa Malaysia
Securities Berhad under the Main Market on 28 June 2012. The first sale of stock,
which was the world's third biggest in 2012, raised RM10.4 billion. FGV possesses
431,622 hectares of estate land bank in Malaysia and Indonesia with 96%
comprising of oil palm and delivering 5 million tons of FFB every year.

FGV remains a basic piece of the FELDA Group as it loans backing to FELDA
pioneers through key administration administrations and practices just as
augmentation administrations and top notch planting materials. Until this point in
time, FGV represents a workforce of in excess of 18,000 representatives
incorporating the gathering, its backups, just as joint endeavour organizations and
partners.

FGV Holdings Berhad Mission & Vision.

FGV mission is their guide, which lends reason to FGV as an organization

and fills in as a rule against which we base every one of their activities and choices.
FGV vision is the system that enables them to achieve manageability and
development. FGV's procedure is outfitted towards being one of Malaysia's driving
internationally enhanced, incorporated agribusiness with long haul beneficial
development and spotlight on the extension of its business with forward-looking
items and administrations.

FGV acts mindfully towards its investors, colleagues, workers, society, and
nature in all of its business zones, locales and areas over the globe. The
organization is focused on advances and items that join the objectives of client
esteem and maintainable improvement. FGV has tasks in excess of 10 nations
crosswise over North America, Europe, Asia, and the Middle East. Applying to leap
forward innovation to make items just as having the unparalleled capacity to serve
clients over an expansive range of necessities with best practices, FGV tries to turn
into the world’s biggest socially and naturally mindful agribusiness.

FGV’s business strategy

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To adjust its vision to the present business viewpoint and to diagram its drives
toward that path. FGV expects to satisfy these activities constantly 2020 with a 360-
degree approach where each part of the organization's tasks is broke down and
enhanced. A definitive objective is to turn into a respectable and admirable
worldwide agribusiness player. To accomplish this objective, they have set up
manageability as a basic piece of the Group's system. Maintainability is never again
limited to simply the manors yet it is currently a widely inclusive measure concerning
how FGV is overseen. It is about the business having a supportability procedure that
supports our desire to be a worldwide innovator in the palm oil division.

At FGV, the consciousness of manageability is dispersed to all dimensions

inside the different Clusters in our worth chain. Notwithstanding, it is fundamental to
their prosperity that consistency is kept up in the methodology and that needs are
clung to. It is significant that bearing is built up in a way that resounds with FGV's
vision and, rouses activity in like manner.

For that reason, FGV has created five key pushes to fill in as direction for
business activities to be estimated against. Every new activity embraced must fall
inside these pushes.

1. Thriving for Operational Excellence

As an innovator in the palm oil part, FGV needs to build up proficiency in

profitability and be represented by best practices. It is natural that they convey
extraordinary quality items at focused costs utilizing the most recent advances
and ability. FGV must show excellent authority in the upkeep of their estates that
outcomes in the ideal yield. This would then convert into more noteworthy
business openings that in the end implies hearty profit and development.

2. Expansion of Core Business

Systems are borne from development intends to support development.
Fortifying FGV's centre business primes it for inside development just as an
extension for outer development. FGV keeps on growing its manor resources and
in the meantime broaden into different agribusiness crops. This will use their
centre business mastery and reinforce its market position through economies of
scale. The venture into different agribusiness crops additionally enables FGV's to
exchange between different products.

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3. Moving Down the Value Chain

FGV has situated itself to move further down the worth chain from being a
specialty player in the palm upstream business to delivering consumable
products, for example, shortening, cooking oil and ghee among others. The R&D
ventures made by FGV in growing downstream items enable them to make
advances into premium markets. The downstream items business helps in
dealing with the unpredictability in the wares markets.

4. Growth in Adjacent Fields

The fourth push includes developing in the adjacent fields which would
exchange against instability in centre business. This would enable the firm to
exploit skill created from the central business to make new income streams. FGV
has created abilities to underwrite the whole palm oil worth chain. In that
procedure, FGV has likewise created vital help administrations, for example, IT,
security, transportation and designed to deal with its ranches and tasks. The
organization has the coordination and transportation advantages for growing the
venture into incorporated coordination’s utilizing a similar centre group, working
frameworks, and idea of business. It is simply an issue of expanding the
utilization.

5. Innovation and Sustainability

Sustainability is an indispensable guardrail in FGV's development plan and is

dynamically being implanted into the organization's operational 'eco-framework'
with regards to an association's ability, money related, partners and clients.
Advancement is significant for the development of FGV. We consider
advancement to be a significant part of our development system, particularly in
growing new items and cost-sparing projects. The organization attempts
connected research and the discoveries are then used to grow further
downstream and shopper items.

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FGV has a R&D gathering that essentially audits R&D projects and drives
creative culture, in the meantime guaranteeing manageability stays one of the
fundamental criteria in our arrangements. FGV is additionally attempted the
recertification of every one of our factories so our items are perceived as Certified
Sustainable Palm Oil (CSPO) items. The reaction to these activities from different
partners has been extremely positive and empowering. FGV will keep on exhibiting
its duty to supportability by guaranteeing components of maintainability are inserted
at each dimension of the association and its basic leadership forms.

FGV Holdings Berhad (FGV) recorded a benefit before intrigue and duty (PBIT)
of RM78 million for the primary quarter of the money related year finishing December
2019, a 19% decrease from the RM96 million enlisted in the past comparing quarter.
Income for the period declined to RM3.3 billion, 9% lower than RM3.6 billion earned
in the past comparing quarter, to a great extent because of a sharp decrease in
rough palm oil (CPO) costs, and lower normal selling cost in the sugar division.

For the period under audit, CPO costs found the middle value of RM 1,986 for
each metric ton (MT), which was 20% lower than the normal CPO value
acknowledged of RM 2,472 MT for 1Q2018. Notwithstanding the sharp drop in costs,
income did not decrease couple, essentially on account of improved operational
execution and lower costs.

"The manor activities have been centered on fixing acquisition procedures

including capital and working consumptions and actualizing new entrusting
frameworks and procedures for infield laborers. These endeavors are beginning to
endure natural product," Dato' Haris Fadzilah Hassan, FGV's Group Chief Executive
Officer said. "Also, a few other bequest and processing change activities have begun
conveying results," he included.

For the quarter in survey, the Plantation Sector recorded a benefit before zakat
and assessment (PBZT) of RM40 million, up from RM19 million in the past
comparing quarter. This was accomplished on the back of a 6% expansion in new
natural product pack (FFB) creation to 1.05 million MT, from 991,000 MT in 1Q2018.
FFB yield expanded to 4.38 MT/ha, 11% up on the past comparing time frame's 3.96
MT/ha. CPO oil extraction rate (OER) indicated improvement to 20.76% from
19.75%, and hence, all out CPO generation expanded 14% to 762,000 MT,

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contrasted with 670,000 MT already. Improved generation volumes joined with

upgraded operational viability and efficiencies, brought about lower ex-factory costs
in 1Q2019 of RM 1,378 for each ton, 20% lower than RM 1,728 in 1Q2018.
Furthermore, the part's improved presentation is likewise owing to a net inversion of
debilitations of receivables adding up to RM48 million.

The Group's downstream business likewise performed better for the period
under audit. The Downstream Sector surpassed interior deals targets, principally
because of the usage of the B10 biodiesel command which happened in February
2019. In the meantime, the palm bit preparing business recorded a higher edge.

"We are deliberately surveying our downstream organizations and accept that
they will proceed to develop and contribute decidedly to FGV's exhibition," Haris
said.

The Sugar Sector recorded lost RM3 million for the quarter in audit, contrasted
with a benefit of RM22 million in the past relating quarter. This was basically due to a
11% and 15% lessening in the normal selling cost for MSM Malaysia Holdings
Berhad's household and industry parts. The exhibition was additionally affected by a
higher refining cost of RM 362 for every MT, an expansion of 12% against 1Q2018.

The Logistics and Support Businesses Sector (LSB) recorded lost RM17 million,
a sharp decay from a benefit of RM24 million in the past comparing quarter. This
was because of arrangements for the Mutual Separation Scheme (MSS) and
hindrances on past due parities in accordance with MFRS 9 prerequisites. Without
the outstanding things, the LSB area would have recorded a benefit of RM24 million
which is at standard with the benefit of the comparing year.

A few basic changes and enhancements have been made to concentrate

acquirement capacities, and half from focused cost reserve funds of RM150 million
have been distinguished through cost-control and justification works out. FGV has
additionally presented and formalized its Special Voluntary Disclosure Initiative,
Supplier Code of Conduct and Supplier Delinquency Guidelines for progressively
successful, effective and straightforward acquisition forms.

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"This monetary year has begun with clear signs that FGV is on track to
turnaround its tasks. While we keep on observing every one of our drives, FGV is
likewise investigating key activities to diminish the reliance on palm oil and the effect
of CPO costs. I am sure that we will most likely accomplish the objectives set for
FY2019," Haris included.

SUGGESTION

Stop the Decline and Drive Sustainable Growth.

Since FGV listing in 2012, their working condition has changed generously,
reflecting improvements in the worldwide economy and the issues of worry to their
Stakeholders. Following this, in 2018, together with their re-established
administration goal, FGV perceived a need to audit the presumptions and
development focal point of the Group vital targets. Accordingly, they looked into their
arrangement and figured Business Plan 2019-2021 (BP21) which will cover the
years 2019 to 2021. Their BP21 was created around the accompanying key
standards:

1. Better asset usage to produce higher profit for resources.

2. Portfolio improvements to adjust the basic wasteful aspects.

3. Value boost through incorporated business worth chain.

4. Commercially determined and responsible business basic leadership.

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ORGANIZATIONAL LEADERSHIP (QGM5094)

5. Optimising human capital potential in driving development.

FGV consider basic interior and outside variables, for example, the vital
bearing from the Board of Directors and the Management, operational difficulties and
the quickly developing industry, and market elements. In creating BP21, they led an
exhaustive investigation of their current business and resource portfolio and
distinguished the key regions for development.

FGV system was then planned to address those zones and convey feasible
qualities to their Shareholders. BP21 rotates around their business exercises with an
essential spotlight on three Sectors, to be specific Plantation, Sugar and Logistics
and Support Businesses. FGV have built up a lot of procedures for their centre
organizations and bolster capacities ordered into four Strategic Thrusts:

Operational Improvement

Spotlights on upgrades over the entirety of their activities to boost profitability,

improve quality and lower costs.

Products and Markets Penetration

Accentuates on improving an incentive in our Plantation, Sugar and Logistics and

Support Businesses Sectors by wandering into high-edge downstream items,
particular sugar and coordination’s enhancement, just as through abroad extension.

New Growth Area

Distinguish new and synergistic area of development to drive their long-term

execution.

Financial and Capability Building

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Embracing activities to improve their monetary position and human capital abilities to
drive future development, including stricter administration of their accounts and right-
measuring their workforce.

So as to guarantee BP21 presents a comprehensive perspective on their key

destinations and activities, FGV fused the Economic, Environment and Social
columns into each part of our business tasks. FGV isn't just planning to develop as
far as size yet will likewise completely augment their potential from being a
coordinated player and making manageability their most extreme need.

This guarantees the drive to accomplish our monetary objectives is offset with
proficient asset usage and severe adherence to corporate guardrails. FGV ought to
accept there are sizeable and boundless open doors ahead for them to investigate
and take advantage of, if they are strong, trained and arranged to change their
method for working together. As they are as of now a coordinated palm player, there
are more chances to extend their inventory network where higher edges and higher
worth can be caught. In any case, FGV will stay mindful on potential dangers which
could upset their advancement.

SUMMARY OF THE STUDY

There has been a developing universal enthusiasm for connections among

business and human rights. The worldwide reconciliation of economies has put
various ventures under investigation. Work dangers, for example, dishonest
contracting conditions, unsatisfactory living wages, and poor living conditions, no
opportunity of affiliation, unlawful specialists, risky working conditions, and
constrained work are a portion of the work issues found in certain enterprises, for
example, agribusiness, gadgets, pieces of clothing, toys and development.
Malaysia's ranch division isn't safe to this investigation, and its high reliance on
outside labourers and utilization of out-sourced contractual worker administrations
are normal industry rehearses that, if not observed, can prompt infringement of
fundamental human rights.

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ORGANIZATIONAL LEADERSHIP (QGM5094)

This examination inspecting and confirmation strategy was intended to give us

an understanding into the executives and operational practices and also leadership.
The appraisal time was short and with constrained examining of specialists (various
nationalities or overseen by FGV, its backups and contractual workers).
Notwithstanding, by plan, we needed to cover an expansive territory of work the
board and to have the option to check whether the issues recognized by the news
reports are apparent from the examining.

Besides, we foreseen that our discoveries would lead us towards the accompanying
ends:

1. No regions of concern were recognized (in any event for the example;
there is no affirmation that the issue may exist in different specialty units);
2. Areas of concern were distinguished, however before the board mediation,
a superior comprehension of the degree of the issue is exhorted.
3. Areas of concern were recognized and FGV is encouraged to audit and
improve the executives controls;

The second piece of the examination was to complete a starter correlation with a
set up social administration framework. The investigation incorporated an audit of
every one of the standard prerequisites, including least execution markers, and
endeavoured to score the probable dimension of consistence (low-high). The activity
was explicitly to enable us to recognize explicit holes in social administration and to
enable us to organize territories for consideration. This activity in hole and
benchmarking is valuable for any association undertaking upgrades in their social
administration frameworks.

CONCLUTION

Our investigation presumes that the present initiative leadership and the
board management can be improved. We accept that understanding worldwide work
issues requires increasingly concentrated learning and it will be a bit of leeway to
FGV on the off chance that it upgraded the specialized skill inside FGV for giving the
social administration authority required. To kick begin this voyage, we prescribe that
FGV joins to SAI's Social Fingerprinting Program, which is an asset made accessible

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to associations to benchmark current practices against more than 2,000

organizations comprehensively (crosswise over various divisions). There are
additionally instruments and assets accessible to control associations to push ahead.
At last, if these suggestions are received, the correspondence of FGV advance
(counting proportions of achievement) will bear some significance with the numerous
outside partners of FGV.

- END -

REFERENCE

https://www.thestar.com.my/business/business-news/2018/05/02/fgv-to-focus-on-
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August 29, 2018 10:38 am +08

https://www.theedgemarkets.com/article/fgv-seek-advice-possible-legal-recourse
Sulhi Azman

http://www.fgvholdings.com/wp-content/uploads/2016/10/FGV-Executive-
Summary_04032016.pdf

http://www.fgvholdings.com/wp-content/uploads/2016/12/CD-FGV-SR2014-2015.pdf

http://insage.com.my/ir/cmn/trps03/ar.aspx?Symbol=5222

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https://www.thestar.com.my/business/business-news/2018/05/02/fgv-to-focus-on-
productivity-efficiency-improvements/

https://www.nst.com.my/business/2018/05/374094/fgv-returns-profit-q1

https://www.malaysiastock.biz/GetReport.aspx?file=AR/2018/4/30/5222%20-
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https://www.theedgemarkets.com/article/fgv-chairman-azhar-says-group-now-ma-
mode

http://www.fgvholdings.com/fgv-acquires-asian-plantations-for-a-total-cash-
consideration-of-rm628-million/

https://www.nst.com.my/news/2016/05/147572/fgv-de

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