CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors, it is my pleasure to present the Annual Report and the Audited Financial Statements of Mentiga Corporation Berhad and its subsidiaries (“the Group”) for the financial year ended 31st December
2103.


Economic Landscape

In 2013, the global economy expanded at a modest pace amid uneven growth environment across economies. The Malaysian economy, benefitting from earlier reform and initiatives introduced by the Government, grew by 4.7% in 2013 compared with 5.6% in 2012. Manufacturing and services sectors continued to contribute significantly to the economy. However, the continued economic weakness in the advanced countries, slower- than- expected growth in regional economies have contributed in the lower prices of Malaysian key Commodities and subsequently resulted in a marked decline in Malaysia’s exports.

Moving forward, Malaysian Economy is expected to remain on a steady growth path going into 2014, expanding by 4.5-5.5%. Domestic Demand will remain the key driver of growth, albeit at a more moderate pace.

We are confident that the Group is well positioned to take advantage of the economic recovery and deliver better performance for the benefit of both the shareholders and stakeholders.


Group’s Performance


During the year under review, the Group recorded revenue of RM16,942,918 and profit after taxation of RM25,885,964 compared to revenue of RM20,317,071 and profit after taxation of RM9,124,526 in the previous year. The decrease in revenue for the current financial year were due to the lower contribution from mining and plantation sectors. The average prices of iron ore and CPO were also lower compared to the previous year. The current year profit is attributed to operations profit of RM5,696,589 and extraordinary gain of RM20,189,375 due to gain on disposal of Pekan Land.

Our wholly-owned subsidiary, Mentiga Plantation Sdn Bhd recorded a profit after taxation RM2,683,832 due to reversal of allowance for impairment loss.


Prospects

Mining activity is expected to continue contributing significantly to next year performance. We have obtained Mining Licences for three (3) new sites. Preparation to start mining at the new sites will commence soon while the income stream is expected to start from the third quarter of 2014. In addition, we will continue in timber extraction and reforestation projects. These activities will be our focus to generate continuous income streams for the group.

We have obtained land titles for agriculture land in Mukim of Penor and Mukim of Lepar both in Districts of Kuantan. Issuance of title for land in Mukim Cheka District of Jerantut is still pending approval from the state Authority. We have started developing the land into palm oil estates starting with the land in Penor. The estate has acreage of 1,064.75 Hectares (2,631acres) and the development is expected to be completed by end of 2014. Work on land in Mukim of Lepar which has acreage of 2,334.97 hectares (5,769.71 acres) is scheduled to start in 2015. These developments will increase our planted area and will ensure that our growth strategy to become a medium size plantation company will become a reality.

Going forward, barring unforeseen circumstances, the Group should achieve a favourable performance for the year 2014.


Dividend

The Board of Directors has recommended the payment of a first and final dividend of 4 sen per share on 70,000,000 ordinary shares, amounting RM2,800,000 (2012: RM2,100,000) for the financial year ended 31 December 2013. The proposed first and final dividend will be subject to the approval of shareholders at the forthcoming Annual General Meeting (“AGM”) and once approved the dividend shall be paid on 25 July 2014.


Acknowledgement


On behalf of the Board, I wish to convey my appreciation to the management and staff for their diligence, dedication, loyalty and contribution towards achieving profitability for the Group and making another successful year possible. I wish also to
express my gratitude to the shareholders, financiers, business associates, regulatory authorities and all stakeholders for their continued support and confidence for the Group.

Finally, I would like to express my appreciation to the Board Members for their contributions and unwavering support during the year. I look forward for their continued enthusiasm, wisdom and cooperation in guiding the Group through the challenges in the year ahead.

Wassalam,

YAB Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob
SDSA., SSAP., DSAP., DGSM.
Chairman

 

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