Dear Valued Shareholders,
On behalf of the Board of Directors of Greenyield Berhad and its Subsidiaries (“Greenyield or the “Group”), it gives me pleasure to present to you the Annual Report and Audited Financial Statements for the financial year ended 31 July 2016.
The commodity market remained generally weak during the financial year ended 31 July 2016. This was reflected in the reduced demand for the Group's agriculture chemicals and fertilizers. The large amount of rubber withheld from the global rubber market further subdued the economic activity despite the slight increase in rubber price. For the financial year ended 31 July 2016, the overall revenue was lower than the previous financial year. Nevertheless the Group managed to remain fairly profitable due to innovative and dedicated staff putting in extra hours of diligent work to resolve and mitigate negative factors.
For the financial year ended 31 July 2016, the Group recorded a lower revenue of RM37.30 million as against RM 44.58 million for the previous financial year. The profit before tax was RM 3.63 million as compared to RM 6.31 million in the financial year 2015. The revenue obtained from the plantation segment showed a decrease from the previous year, while the non-plantation segment showed an increase from the previous financial year.
The revenue from the plantation business segment was RM 16.49 million as against RM 28.39 million in the financial year 2015. In the case of non-plantation segment, the revenue was RM 20.81 million as compared to RM 16.19 million achieved in the previous year.
Research And Development
The Group has invested an expenditure of RM 0.46 million in Research and Development activities, which is equivalent to 1.23% of the revenue recorded for the financial year ended 31 July 2016.
A major thrust of the R&D activities for year under review was the development and evaluation of Biofertilizers for plantation crops and horticultural plants. This is in keeping with the Group’s efforts to broaden the current product range while taking advantage of the growing demand for Biofertilizers. It is expected going forward that Biofertilizers will be a key product for the Plantation segment. Modified organic potting mixture which can compete in the market in terms of pricing has been launched. R&D efforts have also resulted in the development of an improved Latex Coagulant which should find greater market acceptance. The R&D activities are ongoing to develop an enhanced Ethephon Plus formulation which will enable the group to retain its significant share of the latex stimulant market in Malaysia and overseas. To enable wider acceptance of two products by the agricultural sector, namely Green Plus, a foliar nutrient formulation, and Frumone a product to induce flowering & fruiting, R&D activities have been intensified to test these products on a wider range of crops namely coffee, cocoa, tea and pepper. In addition preliminary studies have been initiated to develop new products such as rat baits which indicatively have an appreciable market in Malaysia.
For the non-plantation business segment, the Group focuses on improving the formulation of existing composite material as well as formulating new composite material. The Artstone plant pots are now available in selected Aeon outlets.
Business Outlooks And Prospects
The Group has started to generate revenue from its plantation, derived from tapping of 200 hectares in Melati Aman. Currently, the Group has on its own and via a joint venture, 2,800 hectares of rubber in the state of Kelantan, and almost 2,400 hectares have been planted.
For the non-plantation business segment, the Group has seen steady growth in revenue for plant pots since 2009. The Group will intensify its efforts to market its products in the local and international markets.
The Board anticipates improvement on the Group’s performance in the forthcoming financial year, and foresees growth in revenue from both plantation and the non-plantation sectors.
The Board of Directors aims to maintain the Company’s policy of stable dividend payout to shareholders. The Board has proposed to declare a single-tier final dividend of 0.60 sen per ordinary share for the financial year end 31 July 2016, subject to the approval of the shareholders at the forthcoming Fourteenth Annual General Meeting.
The Company has not implemented any new corporate proposals during the financial year ended 31 July 2016. The Board will explore any related business operations and credible investment opportunities to improve the Group’s performance as well as enhance shareholder value.
I wish to acknowledge the employees whose dedication and perseverance have contributed to sustainable growth of the Group, and ensured its commitment to be a trusted and reliable partner to the Companies we served globally. On behalf of the Board, I would like to express our thanks and appreciation to our shareholders, customers, business associates, financiers, suppliers and regulatory authorities for their continued support and understanding extended to us during the year.
Dr Zainol Bin Md Eusof