SIME DARBY GROUP s EXPERIENCE

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1 Osman Ahmad Principal Office Sime Darby Insurance Pte Ltd 05 th July 2014 (Bangi,Selangor) SIME DARBY GROUP s EXPERIENCE INSURANCE EFFECTIVENESS IN CLIMATE CHANCE ADAPTATION AND DISASTER RISKS RECDUCTION

2 Sime Darby Plantation - Contents Sime Darby Group Core Business Sime Darby Plantation (Up and Downstream) Sime Darby Plantation Upstream Sime Darby Plantation Achievement Climate Change/Disaster Risk Insurance Is The Answer Claims / Losses Moving Forward Question and Answer

3 Sime Darby Group Core Business SIME DARBY GROUP PLANTATION PROPERTY MOTORS INDUSTRIAL ENERGY & NON-CORE UTILITIES Business Activities

4 Sime Darby Plantation (Up & Downstream)

5 Sime Darby Plantation (SDP)- Downstream SDP Downstream Operation Food and Non-Food Based Segments. Food based, cooking oil, margarine, shortening and cooking fats. 8 Refineries o Malaysia, Singapore. Thailand, Vietnam, Netherlands and South Africa. Non Food Based Biodiesel and Oleochemicals. Biodiesel and Plant in Malaysia Oleochemicals Plant in Malaysia, Germany, USA and Canada.

6 Sime Darby Plantation (Upstream)

7 Sime Darby Plantation - Location

8 Sime Darby Plantation (SDP)- Upstream SDP Upstream Operation Agriculture Based Segments. SDP one of the largest Palm Oil producer in the world. About 2.47 million tons or 5.00% of the world s crude palm oil (CPO) annually. Total of 205 Estates (Oil Palm Plantation) Worldwide. Sime Darby Operations Include: Development of Oil Palm Plantation Cultivation of Oil Palms Management of Estates Milling of Fresh Fruit Bunches (FFB) of CPO and Crude Palm Kernel Oil (CPKO) Total Land Bank More Than 860,000 Hectares Malaysia - 350,000 Hectares (320,000 Hectares Planted) Indonesia - 290,000 Hectares (200,000 Hectares Planted) Liberia - 220,000 Hectares (10,00 Hectares Planted)

9 Sime Darby Plantation Historical Achievements 1. Zero Burning Introduced in 1989 by Sime Darby Adopted as National standard in 1997 Adopted by ASEAN in 2003 Innovative, pollution free, recycles nutrients and no fallow period Awarded the Global 500 Roll of Honour at Rio de Janerio in 1992 by the United Nation Environment Programme (UNEP)

10 Sime Darby Plantation Historical Achievements

11 Sime Darby Plantation Historical Achievements

12 Sime Darby Plantation Historical Achievements

13 Sime Darby Plantation Historical Achievements 2. High Quality Planting Materials Seed producer for oil palm & rubber since 1924 and 1921 respectively. Fresh fruit bunch (FFB) potential yield has risen from15 mt/ha to 30 mt/ha for oil palm and oil extraction rate (OER) of 16% has risen to 22%. Holds 30% of market share of oil palm seeds sales in Malaysia. Ranked first in Malaysian Palm Oil Board (MPOB) trials in 1992 and Produced rubber PB260 planting material which is widely found in rubber plantation nowadays. Leader in high quality oil palm and rubber planting materials.

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16 Sime Darby Plantation Historical Achievements 3. Integrated Pest Management Leader in oil palm estate pests and disease management. To date, over 500,000 ha of oil palm in Sime Darby has been managed under this regime for Oryctes rhinoceros, leaf pests (bagworms and nettle caterpillars), rats and Ganoderma. Promotes the usage of beneficial plants for control of leaf pests. Verified pathogenicity of Ganoderma through Koch s Postulates in oil palm and provide better understanding of effective disease management.

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18 Sime Darby Plantation Historical Achievements 4. Water Management System Leader in oil palm estate water management. Water management system was introduced for acid sulphate oil palm soils in 6,600 Ha (Carey Island) and 12,500 Ha, peat soils (Lavang Estate, Sarawak). Improvement in yield by more than 10% has been recorded.

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20 Sime Darby Plantation Historical Achievements 5. Utilisation of POME, EFB and Compost Empty fruit bunch (EFB) and palm oil mill effluent (POME) are used as organic fertilisers/manure in plantations. Conversion of EFB and POME into compost. Developed and registered as Clean Development Mechanism (CDM) for compost with Danish Development Cooperation (DANIDA).

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22 Sime Darby Plantation Historical Achievements 6. Red Palm Olien A fully refined palm oil rich in natural carotenoids and tocopherol/ tocotrienols. Used as a natural food colorant, frying and baking. The frying time is shortened, producing a more desirable french fries colour with decreased acryl amide levels. Customers: Britannia (United Kingdom), Sumitomo (Japan) and Hudson & Knight (South Africa)

23 Sime Darby Plantation R&D

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30 Climate Change/Disaster Risk Managed/Reduction

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33 Insurance Is The Answer

34 Interest Insured ESTATE Growing Trees MILLS Building Plant & Machinery Equipment HUMAN Staffs Support Staff

35 Insurance Coverage A. Growing Trees 1. Material Damage BASIC COVERAGE Fire and Lightning Animal Damage Flood, Windstorm RSMD, Aircraft Damage Earthquake, Volcanic Eruption or other convulsion and nature Plants & Planting cost (less than 1 year old) Up Keeping Cost

36 Insurance Coverage A. Growing Trees 2. Business Interruption Loss of Revenue

37 Insurance Coverage B) MILLS 1. Material Damage Building Fire & Perils Business Interruption Plant, Machinery, Equipment & Boiler Fire & Perils Accidental Theft Machinery Breakdown / Loss of Profit Boiler

38 Insurance Coverage C) HUMAN Group Term Life / Group Personal Accident/Others Group Medical D) TRANSPORTATION Motor / Equipment Used In Public / Private Marine Cargo Land/Sea Transit

39 Insurance Coverage E) LIABILITY Public Liability & Others Product Liability

40 Rating

41 Insurance Coverage As per agreed values basis per hectare Sum Insured GROWING TREES Rating As per Tariff Basic Rates As Per Attachment

42 Sime Darby Plantation Section 14 (RFT) Insurance of Growing Trees 1. SUM INSURED AGE OIL PALM (Value In RM Per Hectare) 0 1 Year 2, Years 3, Years 4, Years 5, Years 5,255 Over 5 Years 5,255 Average no. of trees per hectare 140

43 Sime Darby Plantation Insurance of Growing Trees 2. RATING Code (for statistical purpose) Perils Covered 5004 Oil Palm 1. Fire & Lightning 0.45% 2. Animal damage: a) Plants less than 2 years old b) Plants over 2 years old 0.05% 0.025% 3. Flood 0.10% 4. Windstorm 0.10% 5. Riot, Strike, Malicious Damage 0.03% 6. Aircraft Damage 0.01%

44 Sime Darby Plantation Oil Palm VALUE OF TREES PER HECTARE (Breakdown) / RM Particular 0 1 Year 1 2 Years 2 3 Years 3 4 Years Felling, Clearing ploughing Plants & Planting 800 Cover Crop Unkeep - Manuring Overheads ,220 (2,020) 1,070 1,220 Value brought forward 2,220 3,290 4,510 - T.S.I 2,220 3,290 4,510 5, Note: 1. Mature trees S.I per ha - RM5, Number of trees per ha Average value per mature tree - RM Big plantation companies normally plant pure cover crops

45 Claims/Losses

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56 Sime Darby Plantation Contingency Strategy Participate on Risk Exposure Partly Self Retention Captive / Saving [Sime Darby Insurance (Labuan) Pte Ltd]

57 Sime Darby Plantation Captive Arrangement SD Plantation Insurers Insurance Co. 70% Sime Darby Insurance (Labuan) Pte Ltd Captive 30% 1. Reinsurance Retro Cover To Protect SDIPL Balance Sheet 2. Average Saving Annually USD2 Million

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