ladang perbadanan-fima berhad annual report 2005

7/30/2019 Ladang Perbadanan-Fima Berhad Annual Report 2005

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A N N U A L R E P O R T 2 0 0 5

LADANG PERBADANAN-FIMA BERHAD

Co. No. 52682-HIncorporated in Malaysia


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T

he young seedling signifies the Company's

continued growth and renewed vigor in

increasing profitability and enhancing shareholders'

value. Nurtured by 26 root s reaching far and beyond

into the fertile soil, the Compa ny is backed b y 26 years

of multi-faceted experience and knowledge in the

plant at ion business. The roots of varying degree in

thickness depict the success achieved and challenges

which the Company had faced a nd overcome since its

incorporation to a tta in the position it holds today.

The soil presented in green represents t he streng th o f

the Compa ny after 26 years in operat ion. Green, which

is synonymous with life, growth and regeneration, is

also the colour of the Company's core business

activity - cultivation of oil palms.

Set against the white background, the Company

reaffirms its commitment in embracing transparency

and high sta ndard of corporate governance.

The simplicity of t he d esign enca psulates t he

Company's clear and unhindered path towards

achieving its Vision and Mission.

CoverRationaleCoverRationale


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CONTENTS

Notice of Annual General Meeting 2

Statement Accompanying

Notice of Annual General Meeting 3

Corporate Vision and Mission 4

Corporate & Organisational Structures 5

Corporate Information 6 - 7

Directors' Profile 8 - 9

Chairman's Statement 10 - 12

Audit Committee Report 13 - 18Corporate Governance Statement 19 - 23

Internal Control Statement 24 - 25

Additional Disclosures 26 - 27

Financial Calendar 28

Financial Highlights 29

Quarterly Performance 30

Area Statement 31

Properties 32

Shareholding Statistics 33 - 34

Directors' Responsibility Statement 35

Financial Statements 36 - 62Proxy Form

AnnualReport2005


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Notice

NOTICE IS HEREBY GIVEN THAT the Twenty-Sixth Annual General Meeting of the Company will be held at Crystal 1

Ballroom, Casuarina Ipoh, 18 Jalan Raja Dr. Nazrin Shah, 30250 Ipoh, Perak, Malaysia on Saturday, 29 April 2006 at

11:00 a.m. for the following purposes:

1. To receive and consider the Audited Financial Statements for the year ended 31 December 2005 and the Reports of the

Directors and Auditors thereon.

2. To sanction the payment of a final dividend of 5 sen less 28% tax for the year ended 31 December 2005 as recommended

by the Board.

3. To re-elect YBhg. Dato' Shamsul Bahari bin Salleh Khir who retires in accordance with Article 66 of the Company's

Articles of Association.

4. To re-elect YBhg. Dato' Haji Ahmad Zakiuddin bin Harun who retires in accordance with Article 66 of the Company's

Articles of Association.

5. To re-elect Puan Sharifah Nor Hashimah binti Syed Kamaruddin who retires in accordance with Article 72 of the

Company's Articles of Association.

6. To approve the increase and payment of Directors' fees for the year ended 31 December 2005.

7. To re-appoint Messrs. KPMG Desa Megat & Co. as Auditors of the Company and to authorise the Directors to fix their

remuneration.

8. To transact any other ordinary business of the Company of which due notice shall have been given.

NOTICE OF BOOK CLOSURE

NOTICE IS HEREBY GIVEN THAT the Register of Members of the Company will be closed on 29 May 2006 for the

purpose of determining members' entitlement to the dividend. The dividend, if so approved at the Twenty-Sixth Annual

General Meeting, will be paid on 12 June 2006 to depositors registered in the Register of Depositors at the close of

business at 5:00 p.m. on 26 May 2006.

FURTHER NOTICE IS HEREBY GIVEN THAT a depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares transferred into the Depositor's Securities Account before 4:00 p.m. on 26 May 2006 in respect of transfers;

(b) Shares deposited into the Depositor's Securities Account before 12:30 p.m. on 24 May 2006 in respect of shares

exempted from mandatory deposit;

(c) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of the Bursa

Malaysia Securities Berhad.

BY ORDER OF THE BOARD

Gowrie Navaratnam

Mohd Nasir Bin Ismail

Secretaries

IPOH

28 March 2006

NOTE

A member of the Company entitled to attend and vote at this meeting is also entitled to appoint one or more proxies to attend and vote in his stead. Where

a member appoints two proxies or more, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholdings to be

represented by each proxy. A proxy need not be a member of the Company. A Proxy Form is enclosed herewith and should be completed and deposited at

the Registered Office of the Company not less than 48 hours before the time fixed for the meeting.

Annual General Meeting 2ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD

of


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Statement

1.0 DIRECTORS STANDING FOR RE-ELECTION AT THE 26TH ANNUAL GENERAL MEETING

1.1 The Directors retiring by rotation pursuant to Article 66 of the Company's Articles of Association and seeking

re-election are:

(i) Dato' Shamsul Bahari bin Salleh Khir

(ii) Dato' Haji Ahmad Zakiuddin bin Harun

1.2 The Director who was appointed during the year and seeking re-election as Director of the Company pursuant to

Article 72 of the Company's Articles of Association is:

(i) Puan Sharifah Nor Hashimah bin Syed Kamaruddin

The details of Directors standing for re-election and their shareholdings are set out in the Directors' Profile and

Shareholding Statistics appearing in the Annual Report.

2.0 ATTENDANCE OF DIRECTORS AT BOARD MEETINGS

A total of nine (9) Board Meetings were held during the f inancial year ended 31 December 2005. Detai ls of the

Directors' attendance are as listed below:

Name of Director Attendance

Dato' Shamsul Bahari bin Salleh Khir 9/9

Dato' Haji Ahmad Zakiuddin bin Harun 7/9

Dato' Jaafar bin Lajis 8/9

Kamisan bin Suja' 9/9

Yeoh Hock Thong 9/9

Sharifah Nor Hashimah bin Syed Kamaruddin (appointed 12 August 2005) 1/1

Ir. Muhammad Hafni bin Ibrahim (resigned on 30 June 2005) 6/7

Dato' Richard Ong Guan Seng (retired on 22 June 2005) 5/6

3.0 DATE, TIME AND VENUE OF THE 26TH ANNUAL GENERAL MEETING

Date : 29 April 2006

Time : 11:00 a.m.

Venue : Crystal 1 Ballroom

Casuarina Ipoh

18, Jalan Raja Dr. Nazrin Shah

30250 Ipoh

Perak, Malaysia

AccompanyingNotice of Annual General Meeting3ANNUAL REPORT 2005



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4ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADCorporate

Vision and Mission

VISION

MISSION

VISIONLADANG PERBADANAN-FIMA BERHAD strives to be a

successful, responsible and exemplary homegrown

plantation company.

MISSION Generate good earnings and steady growth to Ou rShareholders through enhancing productivity and efficiencyin the management of its plantation and milling operations,

expanding the Company's existing business and exploringnew opportunities to expanding the Company's earning

base with a view of enhancing shareholder value.

Promote a conducive and performance based workingenvironment to Our Employees while focusing on human

resource development and long-term employment.

Meet Our Customers' needs, preferences and expectations

through the provision of quality produce more efficientlythan our competitors.

Develop and maintain mutually beneficial relationship with

Our Business Associates.

Participating and contributing to Our Countrythroughprovision of employment, business opportunities and

development of agricultural land.

By being a good corporate citizen, we maintain ourcommitment to the needs of Our Environment through

responsible agronomic practices.


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&

LPF PROPERTIES SDN BHD

(100%)

MILLJET SDN BHD(40%)

ORGANISATIONAL STRUCTURE

CORPORATE STRUCTURE

BOARD OFDIRECTORSCOMPANYSECRETARY

NOMINATINGCOMMITTEE

AUDITCOMMITTEE

MANAGEMENTCOMMITTEE

RISKMANAGEMENT

COMMITTEE

TENDERCOMMITTEE

INTERNALAUDIT

RISK

MANAGEMENTUNIT

FINANCE &ADMINISTRATION

PLANTATIONOPERATIONS

MILLOPERATIONS

CorporateOrganisational

Structures5ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD


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CORPORATE PROFILE Company no. : 52682-HLegal form : Public Limited Company

Country of incorporation : Malaysia

Date of incorporation : 29 November 1979

Authorised share capital : RM150.0 million

Par value : RM1.00 per share

Paid-up share capital : RM114.3 million

Financial year end : 31 December

Principal activities : Oil palm cultivation and production and sale of crude

palm oil and palm kernel

Registered office : No. 10 Persiaran Gopeng Satu, 31350 Ipoh, Perak,

Malaysia

Telephone no. : 605-2415661 / 2411002

Facsimile no. : 605-2559846

E-mail : [email protected]

SECRETARIES Gowrie NavaratnamMohd Nasir bin Ismail

AUDITORS KPMG Desa Megat & Co., Chartered Accountants

PRINCIPAL BANKERS Bumiputra-Commerce Bank BerhadMalayan Banking Berhad

RHB Bank Berhad

SHARE REGISTRAR Symphony Share Registrars Sdn Bhd35 Jalan Hussein, 30250 Ipoh, Perak, Malaysia

Telephone no. : 605-241 5633

Facsimile no. : 605-241 5578

STOCK EXCHANGE Listing : Main Board of Bursa Malaysia Securities BerhadLISTING Sector : Plantations

Stock code : 5851

Listing date : 11 November 1994

CorporateInformation 6ANNUAL REPORT 2005



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BOARD OF DIRECTORS Dato' Shamsul Bahari bin Salleh Khir(re-designated Chairman on 10 August 2005)

Dato' Haji Ahmad Zakiuddin bin Harun

Dato' Jaafar bin Lajis

Kamisan bin Suja'

Yeoh Hock Thong

Sharifah Nor Hashimah binti Syed Kamaruddin

(appointed on 12 August 2005)

Ir. Muhammad Hafni bin Ibrahim

(resigned on 30 June 2005)

Dato' Richard Ong Guan Seng

(retired on 22 June 2005)

MANAGEMENT Dato' Shamsul Bahari bin Salleh KhirCOMMITTEE (re-designated Chairman on 10 August 2005)

Kamisan bin Suja'(appointed on 10 August 2005)

Ir. Muhammad Hafni bin Ibrahim

(resigned on 30 June 2005)

Yeoh Hock Thong

(resigned on 10 August 2005)

TENDER Dato' Jaafar bin LajisCOMMITTEE (Chairman)

Dato' Shamsul Bahari bin Salleh Khir



AUDIT Dato' Haji Ahmad Zakiuddin bin HarunCOMMITTEE (re-designated Chairman on 10 August 2005)


Yeoh Hock Thong



(appointed on 25 February 2006)

Kamisan bin Suja'



(retired on 22 June 2005 )

RISK MANAGEMENT Dato' Haji Ahmad Zakiuddin bin HarunCOMMITTEE (re-designated Chairman on 10 August 2005)

Dato' Shamsul Bahari bin Salleh KhirYeoh Hock Thong



(appointed on 25 February 2006)

Kamisan bin Suja'



(retired on 22 June 2005 )

NOMINATING Dato' Jaafar bin LajisCOMMITTEE (Chairman, appointed on 10 August 2005)


Yeoh Hock Thong



CorporateInformation7ANNUAL REPORT 2005



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KAMISAN BIN SUJA'Non-Independent, Non-Executive Director, 46 years of age, Malaysian

He was appointed a Director on 11 December 2004 and served as a member of the Audit Committee and Risk

Management Committee from 4 January 2005 to 10 August 2005. On 10 August 2005, he was appointed a member of

the Management Committee.

He holds a Bachelor of Art Architecture from Hull School of Architecture, United Kingdom and practiced architecture after

graduating until 1994 when he became involved in businesses of various activities such as contractor, project

management, turnaround management, project financing and property development.

Currently, he is the Group Senior Vice President of Pubel Berhad, a property development based company and sits on

the Board of its subsidiary companies, PuBel U-Home Everight Sdn Bhd and PuBel Project Management Sdn Bhd. He is

also a Director of Musfa & Co Sdn Bhd, a PKK Class "A" contractor.

He does not hold any directorship in any public listed company.

YEOH HOCK THONGNon-Independent, Non-Executive Director, 50 years of age, Malaysian

He was appointed a Director on 11 December 2004 and member of the Nominating Committee on 26 February 2005. He

served on the Management Committee from 4 Jan 2005 to 10 August 2005 when he was appointed a member of the

Audit and Risk Management Committees respectively.

He is a Chartered Member of the Institute of Internal Auditors and a Professional Member of the National Institute of

Accountants, Australia.

He is at present Executive Vice President of Kejuruteraan Bintai Kindenko Sdn Bhd and Director of Kamni CorporationSdn Bhd. Previous to that, he was the Group Chief Financial Officer/Executive Director of Siah Brothers Corporation

Berhad from 1997 to 2001. Between 1994 to 1997, he was the General Manager - Finance, Business Planning and

Business Development of Land and General Berhad. Prior to 1994, he held various positions in the banking and finance

industry.

He does not hold any directorship in any public listed company.

SHARIFAH NOR HASHIMAH BINTI SYED KAMARUDDINIndependent, Non-Executive Director, 45 years of age, Malaysian

A BSc in Agriculture degree holder from Universiti Putra Malaysia (formerly Universiti Pertanian Malaysia), she was appointed

to the Board on 12 August 2005 and member of the Audit and Risk Management Committees on 25 February 2006.

She served in the Ministry of Agriculture from 1986 to 1990. She was then transferred to the Perak State Government

where she served until 1997 after which she joined Perak Corporation Berhad. She currently holds the position of

Assistant General Manager, Land & Property Division.

She does not hold any directorship in any public listed company.

NOTE

Save as disclosed, all of the Directors named above do not have any conflict of interest with the Company or have any

family relationships with any Director and/or substantial shareholders of the Company. None of the Directors have been

convicted of any offence.

9ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Directors'

Profile


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Dear Shareholders,On behalf of the Board of Directors, I ampleased to presentthe Annual Report and Audited Financial Statements of

LADANG PERBADANAN-FIMA BERHAD for the financial year

ended 31December 2005.

Chairman'sStatement 10ANNUAL REPORT 2005


BUSINESS ENVIRONMENTCPO prices were on the decline in 2005 compared to the strong showing lastyear. The national average CPO price recorded for 2005 was RM1,394 permetric tonne against RM1,610 per metric tonne in 2004. Despite the

lackluster performance in the CPO market, the Board of Directors is pleasedto inform that the Company had performed reasonably well under thechallenging business environment.

FINANCIAL RESULTSThe Group is solely involved in the cultivation of oil palms and the productionand sale of crude palmoil and palmkernel. Therefore, the Company's resultsare to a certain extent determined by the prices obtained for its CPO and PK.However, the effects of the declining prices were slightly mitigated by thehigher oil extraction rates obtained.

Under the aforesaid conditions, the Group's revenue was lower by 9% atRM40.62 million compared with RM44.57 million whilst pre-tax profits droppedby 35%to RM11.61million fromRM17.80 million in 2004.

REVIEW OF OPERATIONSIn 2005, a total of 404.60 hectares was felled and replanted under theCompany's accelerated replanting programme. Another 714.30 hectares will befelled and replanted in 2006. As of end 2005, 75%of the Company's plantedhectarage consisted of mature palms whilst immature palms stood at 25%.As part of our efforts towards conservation of the environment, we haveadopted the zero-burning policy in our replanting; the felled palms were chippedand then pulverized mechanically.

With improved agronomic practices and stringent control over crop processing,higher extraction rates were attained, amidst increase in young crop fromthereplanted fields.

The Company is continuing with its efforts to increase mechanisation toimprove efficiency whilst reducing reliance on foreign labour, which remains oneof the limiting factors plaguing the industry.

Your Management initiated the integration of two of the Company's oil palmestates, Ladang Lekir I and Ladang Lekir II into a single entity to streamlineadministration and plantation management practices that emphasise oncontinuous improvements in yields and in cost efficiencies. The Estate

Management had also set up its own teamof security personnel to enhancethe security features at the Estates.


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DIVIDENDSOur dividend policy will balance the need to provide shareholders withsustainable cash returns in reward for their continued support and confidencein the Group whilst conserving adequate funds for reinvestment that arenecessary to enhance the Group's future profitability and shareholders' value.

The Board is pleased to recommend a final dividend of 5 sen less 28%tax,subject to shareholders' approval at the forthcoming Annual General Meeting.

Together with the interim dividend of 5 sen less 28% tax paid on 15September 2005, the total dividends declared for the financial year ended31December 2005 is 10 sen less 28%tax totalling RM8.23 million.

PROSPECTSThe Board has been continuosly looking into opportunities to expand theCompany's plantation base by exploring the possibility of acquiring land suitablefor oil palm cultivation. During the year under review, the Company hadreceived an offer for the purchase of 100%equity interest in two unquotedplantation based companies. As part of the terms of offer and to indicate theCompany's interest, the Company had paid a refundable earnest deposit ofRM4.8 million. The proposed purchase is being considered by the Board ofDirectors and the terms of the offer are st ill being negotiated by bothpart ies. The Company has not to-date entered into any sale and purchaseagreement with the offeror.

With regard to the CPO market, the outlook for 2006 is encouraging with

expectation of CPO price to st rengthen at above the 2005 levels, boosted byglobal demand for biodiesel, the implementation of biofuel policies in Asiancountries and increase in demands fromChina, following their uplif ting of importduties on the commodity beginning J anuary 2006.

The Board believes that under such positive market sentiments, the Companywill continue to performsatisfactorily in 2006.

CORPORATE GOVERNANCEWe have included statements on Corporate Governance and Internal Control inour Annual Report, which affirms the Board's commitment in ensuring that thehighest standards of corporate governance are practiced throughout theGroup.

11ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Chairman's

Statement


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DIRECTORATEThe year 2005 saw the departure of my predecessor, Ir. Muhammad Hafni binIbrahimas well as YBhg. Dato' Richard Ong Guan Seng, the Chairman of theAudit Committee. On behalf of the Board, I would like to convey my sincere andheart felt gratitude and appreciation for their invaluable service andcontribution over the years.

The Board extends a warmwelcome to Puan Sharifah Nor Hashimah binti SyedKamaruddin, who was appointed Director of the Company with effect from12August 2005.

ACKNOWLEDGEMENTOn behalf of the Board, I would like to express my appreciation to theManagement teamand employees who have worked tirelessly to enable theCompany to meet the challenging conditions encountered during the year.

I also wish to thank our valued shareholders, business associates and relevantgovernment authorities for their confidence, assistance and continued supportto the Group.

Finally, my special thanks to my fellow Directors for their wise counsel andsupport.

DATO' SHAMSUL BAHARI BIN SALLEH KHIRCHAIRMAN

12ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADChairman's

Statement


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The Board of Directors is pleased to present the Audit Committee Report for the year ended 31 December 2005.

1.0 COMPOSITION

The Audit Committee comprises the following members:

Chairman

Dato' Haji Ahmad Zakiuddin bin Harun (Independent, Non-Executive Director)(re-designated on 10 August 2005)

Dato' Richard Ong Guan Seng (Independent, Non-Executive Director)(retired on 22 June 2005)

Members

Dato' Shamsul Bahari bin Salleh Khir (Independent, Non-Executive Director)Yeoh Hock Thong (Non-Independent, Non-Executive Director)

(appointed on 10 August 2005)Sharifah Nor Hashimah binti Syed Kamaruddin (Independent, Non-Executive Director)

(appointed on 25 February 2006)Kamisan bin Suja' (Non-Independent, Non-Executive Director)


Secretary

Gowrie Navaratnam

2.0 MEETINGS

The Audit Committee met 4 times in the year under review and the attendance of each committee member was asfollows:

Audit Committee Members No. of Meetings Attended

Dato' Haji Ahmad Zakiuddin bin Harun 3/4

Dato' Shamsul Bahari bin Salleh Khir 4/4

Yeoh Hock Thong 1/1

Sharifah Nor Hashimah binti Syed Kamaruddin Not applicable*

Dato' Richard Ong Guan Seng 2/2

Kamisan bin Suja' 3/3

* No meetings were held after the date of her appointment.

3.0 ACTIVITIES

During the year, the main activities undertaken by the Audit Committee were as follows:

(i) Reviewed the annual audit plan with the External Auditors focusing on reporting deadlines, audit strategy andsignificant risks areas and the impact of changes in the accounting standards and regulatory requirements.

(ii) Reviewed with the External Auditors the audit report and results of their audit and assessed the assistanceand cooperation given by the Management and other employees of the Company to the External Auditorsduring the course of the audit.

(iii) Considered and reviewed the audited financial statements of the Group and the Company before recommending

the same for the Board of Directors' approval.

(iv) Reviewed the Internal Audit Department's resources requirement, programmes and plan for the financialyear and assessed the Internal Audit Department's performance.

13ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Audit

Committee Report


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(v) Received and considered reports from the Internal Audit Department on its activities and findings togetherwith recommendations and reported the same to the Board. Recommended to the Board steps to strengthen

the internal controls in the Company.

(vi) Assessed and considered the internal audit coverage on the Company's principal risk areas and the Internal

Audit Department's authority and independence in carrying out its function.

(vii) Reviewed whether Management had taken appropriate action on the recommendations of the Internal Audit

Department and assessed whether Management and other employees of the Company had given the required

assistance and cooperation to the Internal Audit Department in carrying out its function.

(viii) Reviewed and considered the quarterly results of the Group and the Company and recommended the same

to the Board for approval.

(ix) Reviewed the Company's application of the principles set out in Part 1 of the Malaysian Code on Corporate

Governance and the extent of the Company's compliance with the Best Practices set out in Part 2 of theMalaysian Code on Corporate Governance and recommended to the Board on the necessary action for

compliance.

(x) Considered and recommended to the Board the re-appointment of the External Auditors and the audit fees

to be received by them.

(xi) Reviewed the Company's compliance with applicable laws, regulations, rules, directives and guidelines.

4.0 TERMS OF REFERENCE

4.1 Composition

4.1.1 The Board of Directors shall appoint an Audit Committee from amongst themselves and shall:

(i) Comprise of no fewer than 3 members;

(ii) A majority of the members must be independent directors; and

(iii) At least one member must be a member of the Malaysian Institute of Accountants or if he is not, then he must

be a person who complies with Paragraph 15.10 of the Listing Requirements of Bursa Malaysia Securities

Berhad.

4.1.2 The Chairman, who shall be elected by the members of the Committee, shall be an independent non-executive

director.

4.1.3 No alternate director may be appointed as a member of the Committee.

4.1.4 In the event of any vacancy in the Audit Committee resulting in non-compliance with subparagraph 4.1.1,

the Company must fill the vacancy within 3 months.

4.2 Objectives

4.2.1 The primary objectives of the Audit Committee are to:

(i) Provide assistance to the Board in fulfilling its fiduciary responsibilities, particularly in the areas relating to

the Company's accounting, operation and management controls, financial reporting and business ethics

and policies.

(ii) Provide greater emphasis on the audit function by increasing the objectivity and independence of the External

and Internal Auditors and providing a forum for discussion that is independent of the Management.

(iii) Maintain through regularly scheduled meetings a direct line of communication between the Board and the

External Auditors, Internal Auditors and Financial Management.

AuditCommittee Report 14ANNUAL REPORT 2005



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4.3 Authority

4.3.1 The Audit Committee is authorised by the Board to undertake the following:

(i) Investigate any matters within its term of reference.

(ii) Have the necessary resources to perform its duties.

(iii) Have full and unrestricted access to any information and documents relevant to its activities.

(iv) Have direct communication channels with External Auditors, Internal Auditors, members of the Management

and other employees of the Company and Group.

(v) Convene meetings with or request the attendance of the External Auditors, Internal Auditors, members of the

Management and/or other employees of the Company during the Committee's meetings whenever deemed

necessary.

(vi) Obtain external legal and other independent professional advice and secure the attendance of outsiders with

relevant experience and expertise if it considers necessary.

(vii) Promptly report to Bursa Malaysia Securities Berhad matters, which result in breach in the listing requirements.

4.4 Functions

In fulfilling its primary objectives, the Audit Committee shall, amongst others, discharge the following functions and

report to the Board of Directors:

4.4.1 External and Internal Audit

The Audit Committee shall oversee all matters relating to the External and Internal Audit as outlined in

Paragraphs 4.4.1(i) to (iii) below.

(i) External Auditors

(a) Review the annual audit plan with the External Auditors prior to the commencement of the annual audit

and discuss:

The general outline of the scope and timing of the auditors' proposed coverage and reporting deadlines.

The nature of the audit procedures to be performed.

The extent of any planned reliance on the work of Internal Auditors and the anticipated effect of thisreliance on the examination.

Any significant accounting and auditing problems that the auditors may foresee.

The impact on the financial statements of any new or proposed changes in the accounting standards

or legal or regulatory requirements.

The Audit Committee may also request the External Auditors to perform additional audit work directed at

specific areas of concern.


Committee Report


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(b) Recommend to the Board the re-appointment of External Auditors on expiry of their tenure. In considering

the re-appointment, the Audit Committee shall consider whether there are any reasons (supported by

grounds) to believe that the External Auditor is not suitable for re-appointment and if justified, to recommend

to the Board for termination.

(c) Receive any letter of resignation from the External Auditors of the Company.

(d) Recommend to the Board the nomination of a person or persons for appointment as External Auditors.

(e) Recommend to the Board the audit fees to be received by the External Auditors.

(ii) Internal Audit

(a) Review the audit programme, processes and the results of the internal audit programme, processes or

investigation undertaken.

(b) Assess the adequacy of the scope, functions and resources of the internal audit function and whether it

has the necessary authority and independence to carry out its work.

(c) Review whether or not Management has taken appropriate actions on the recommendations of the

Internal Auditors.

(d) Review any appraisal or assessment of the performance of the members of the internal audit function.

(e) Approve any appointment or termination of senior staff members of the internal audit function.

(f) Be informed of resignations of internal audit staff members and provide the resigning staff member an

opportunity to submit his reasons for resigning.

(iii) Others

(a) Review the assistance and cooperation given by the Management and other employees of the Company

to the External and Internal Auditors.

(b) Upon request of the External and/or Internal Auditors, the Chairman of the Audit Committee shall convene

a meeting of the Committee, excluding the attendance of the executive members of the Committee,

whenever deemed necessary to hear and consider any matters the auditors believed should be brought

to the attention of the Committee.

4.4.2 Internal Controls and Financial Reporting

(i) Appraise with Management:

(a) The adequacy, integrity and effectiveness of the Company's internal controls in safeguarding shareholders'

investment and the Company's assets. The internal controls cover financial, operational and compliance

controls and risk management.

(b) The adequacy of compliance with applicable laws, regulations, rules, directives and guidelines.

(c) The adequacy of established policies, procedures and guidelines on the Company's accounting, financial

and operational activities.

(ii) Meet and discuss with the External and Internal Auditors on their evaluation of the Company's system of

internal control.

(iii) Consider the nature and disposition of the relevant comments appearing in the reports prepared by the

Internal Auditors and in the External Auditors' management letter and Management's response.




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4.4.3 Interim and Annual Financial Statements

(i) Review the interim financial statements of the Group and Company with Management before recommending

approval to the Board for announcement to Bursa Malaysia Securities Berhad.

(ii) Meet with the Management and External Auditors to discuss and review the annual financial statements of

the Group and the Company and the audit report of the External Auditors at the conclusion of the annual

audit before recommending to the Board for approval.

(iii) Review the nature and resolution of any significant accounting and auditing problems encountered during

the annual audit.

(iv) Review the nature of any significant adjustments, reclassifications or additional disclosures proposed by the

External Auditors that are currently significant or may become significant in the future.

(v) Review compliance with accounting standards and other legal and regulatory requirements.

(vi) Review any implementation or changes in major accounting policies, accounting standards, significant and

unusual events and/or legal and regulatory requirements during the year and the adequacy of disclosure in

the financial statements.

(vii) Review the reasons for major fluctuations in balances in the financial statements for the current year compared

to the previous year.

(viii) Review the nature of any significant and unusual events, commitments, contingent liabilities and post balance

sheet events.

(ix) Review the going concern assumption.

4.4.4 Related Party Transactions

The Audit Committee shall from time to time consider and review the nature of any related party transactions

or conflict of interest situation that may arise within the Group or the Company including any transaction,

procedure or course of conduct that raises questions of Management's integrity.

4.4.5 Other Duties and Responsibilities

The Audit Committee shall undertake any other additional duties and responsibilities as may be decided by

the Board from time to time.

4.5 Meetings

4.5.1 The Audit Committee shall hold a minimum of four (4) meetings a year, although additional meetings may becalled at any time at the Chairman of the Audit Committee's discretion.

4.5.2 Notice of meetings shall be sent at least seven (7) days before the time set for the meeting to all members

of the Committee and any persons that may be required to attend.

4.6 Attendance

4.6.1 A quorum shall comprise of at least three (3) members consisting of a majority of independent directors.

4.6.2 The other directors, members of the Management, the Head of Internal Audit and representatives of the

External Auditors may be invited to be present in the meeting for the duration where their presence is

considered relevant, as determined by the Chairman of the Audit Committee.


Committee Report


20/66

4.7 Minutes

4.7.1 The Company Secretary shall be the Secretary to the Audit Committee and shall be present at all meetings

to record minutes of the meeting.

4.7.2 Minutes of each meeting shall be kept and distributed to each member of the Audit Committee.

4.7.3 The Chairman shall report on each meeting to the Board.

4.8 Performance Evaluation

The Board shall review the terms of office and the performance of the Audit Committee and each of its members at

least once every 3 years to determine whether the Audit Committee and members have carried out their duties in

accordance with their terms of reference.

5.0 INTERNAL AUDIT FUNCTION

The Audit Committee is assisted by the Internal Audit Department in discharging its duties and responsibilities.

The Internal Audit Department adopts a risk-based approach, focusing its work mainly on key processes and principal

risk areas of the operating units and provides the Audit Committee with independent reports on the state of internal

controls of the operating units and the extent of compliance of the operating units with established policies and

procedures. The Audit Committee reports the same to the Board after reviewing and deliberating on the internal

audit reports.

During the financial year, the Internal Audit Department carried out and completed audits of the key processes and

principal risk areas and reports were issued to the process owners incorporating its findings and recommendations.

The audits focused on key controls to mitigate risks, safeguard assets, compliance with policies and procedures and

promote effectiveness of management and efficiency of operations. The Internal Audit Department also followed up

on implementation and disposition of previous significant findings and recommendations.

6.0 EMPLOYEES' SHARE OPTION SCHEME ("ESOS")

The Company has not at the moment subscribed to any share scheme for its employees.

This report is made in accordance with a resolution of the Board of Directors dated 3 March 2006.




21/66

The Board of Directors fully appreciates the importance of adopting high standards of corporate governance within the

Group. The Board views corporate governance as synonymous with three key concepts; namely transparency,

accountability as well as corporate performance.

As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form.

The Board is thus fully committed to the maintenance of high standards of corporate governance by supporting and

implementing the prescriptions of the principles and best practices set out in Parts 1 and 2 of the Malaysian Code on

Corporate Governance ("the Code"), respectively.

The Board is pleased to present the following statement, which outlines the main corporate governance practices that were

in place throughout the financial year, unless otherwise stated.

PRINCIPLES STATEMENT

The following statement sets out how the Company has applied the principles in Part 1 of the Code. The principles aredealt with under the following headings: Board of Directors, Directors' Remuneration, Shareholders and Accountability and

Audit.

1.0 BOARD OF DIRECTORS

1.1 Board Balance and Responsibilities

The Group acknowledges the pivotal role played by the Board of Directors in the stewardship of its direction and

operations, and ultimately the enhancement of long-term shareholder value. To fulfill this role, the Board is

responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals

for management and monitoring the achievement of these goals.

As at the date of this statement, the Board consists of six (6) members; comprising three (3) Independent Non-

Executive Directors and three (3) Non-Independent Non-Executive Directors.

The concept of independence adopted by the Board is in tandem with the definition of an Independent Director in

Section 1.01 of the Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Malaysia"). The key elements

for fulfilling the criteria are the appointment of an Independent Director who is not a member of management (a non-

executive Director) and who is free of any relationship which could interfere with the exercise of independent

judgement or the ability to act in the best interests of the Company. The Board complied with paragraph 15.02 of

the Listing Requirements, which requires that at least two (2) Directors or one-third of the Board of the Company,

whichever is the higher, be Independent Directors.

The Directors, with their different backgrounds and specialisation, collectively bring with them a wide range of

experience and expertise in areas such as operations, corporate affairs, finance and administration. The profile of

each Director is presented in Directors' Profile in the Annual Report.

There is a clear division of responsibilities at the head of the Company to ensure a balance of authority and power.

The Board is led by a non-executive Chairman and the day-to-day operations of the Company are overseen by the

Management Committee, on behalf of the Board.

The Board is satisfied that the current Board composition fairly reflects the investment of minority shareholders in

the Company.

1.2 Board Committees

The Board of Directors delegates certain responsibilities to the Board Committees, namely the Management

Committee, the Audit Committee, the Risk Management Committee, the Tender Committee and the Nominating

Committee in order to enhance business and operational efficiency as well as efficacy.

19ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Corporate

Governance Statement


22/66

All committees have written terms of reference. The Chairman of the various committees briefs the Board on the

outcome of the Committee meetings and minutes of these meetings are circulated to the full Board.

The members of the Board Committees are listed in the Corporate Information appearing in the Annual Report.

Management Committee

The Management Committee was established on 9 November 2000, which functions as a subsidiary of the Board

of Directors, to focus on Corporate Governance, the operational performance of the estates and mill and the

compliance of internal controls established by the Company.

The Management Committee examined in depth of the performance of the business and agreed on

recommendations to enhance and improve on operational matters affecting the Group. On matters such as

expenditure exceeding a prescribed limit, the Management Committee makes recommendation to the Tender

Committee, for their approval. In addition, the Management Committee will explore and recommend to the Board

of Directors new business ventures, expansion and diversification opportunities with the aim to enhance the growth

and performance of the Group.

Audit Committee

The Audit Committee, established on 22 August 1994 assists the Board in discharging its duty in maintaining a

sound system of internal control to safeguard the shareholders' investments and the Company's assets. The terms

of reference and activities of the Audit Committee are provided in the Audit Committee Report appearing in the

Annual Report.

Risk Management Committee

The Risk Management Committee was established on 8 October 2001 and is entrusted to formalise the

identification, measurement and control of risks that threaten the assets or earnings of the Group. For further details

on the Company's risk management, please refer to the Internal Control Statement presented in the Annual Report.

Tender CommitteeThe Tender Committee was established on 28 April 1982 and is entrusted to facilitate a fair and transparent tender

submission and review process and award of contract procedure. The Committee is responsible to ensure that the

most advantageous tenders are accepted taking into account the price and the quality of the service or product.

The Tender Committee, therefore, ensures transparency in the award of contracts.

Nominating Committee

The Nominating Committee was established on 8 October 2001 and is entrusted with the specific task of

identifying and recommending new nominees to the Board. The actual decision as to who shall be nominated

should be the responsibility of the Board as a whole after considering the recommendations of the Committee.

The Nominating Committee also reviews the mix of experience and expertise of each Director and assessed the

effectiveness of the Board as a whole and the respective Board Committees and contribution of each individual

Director.

NOMINATING

COMMITTEE

MANAGEMENT

COMMITTEE

AUDIT

COMMITTEE

RISK

MANAGEMENT

COMMITTEE

TENDER

COMMITTEE

BOARD OF DIRECTORS




23/66

1.3 Meetings

The Board ordinarily meets at least four times a year at quarterly intervals with additional meetings convened when

urgent and important decisions need to be taken between the scheduled meetings.

For the year under review, the Board had 9 meetings. Details of the Directors' meeting attendances since the last

financial year can be found in the Statement Accompanying the Notice of Annual General Meeting of the Annual

Report.

The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. All

proceedings from the Board meetings are minuted and signed by the Chairman of the meeting.

In addition, the Directors meet, review and approve all corporate announcements, including the announcement of

the unaudited interim financial statements, prior to releasing them to Bursa Malaysia.

1.4 Supply of Information

The Chairman ensures that all Directors have full and timely access to information with Board papers distributed in

advance of meetings. Every Director has also unhindered access to the advice and services of the Company

Secretaries. The Board believes that the Company Secretaries are capable of carrying out their duties to ensure the

effective functioning of the Board. The Articles of Association specify that the removal of the Company Secretary is

a matter for the Board as a whole.

Prior to the meetings of the Board and the Board Committees, Board papers which include the agenda and

information relevant to the issues of the meetings covering the areas of strategic, f inancial, operational and

regulatory compliance matters, are circulated in advance to all the Directors for their information, in order to be

properly briefed before the meeting.

Further, there is a schedule of matters reserved specifically for the Board's decision, including the approvals of

annual budgets, acquisitions and disposals of undertakings and properties of substantial value, major investments

and financial decisions and changes to management including key policies and delegated authority limits.

The Board as a whole determines, whether as a full Board, as a full Board Committee or in their individual capacity,

to take independent professional advice, where necessary and in appropriate circumstances, in furtherance of their

duties, at the Group's expense.

1.5 Directors' Training

In-house briefings were organised by the Company in 2005 to aid Board members' understanding of the Company's

business operations and financial reporting. Director's attendance at external courses was based on the training

needs of individual Directors.

A Director who was appointed in August 2005 completed her Mandatory Accreditation Programme in October 2005and shall be attending training in 2006 as determined by the Board.

1.6 Re-election

The Articles of Association provide that at the first Annual General Meeting ("AGM") of the Company, all the

Directors shall retire from office and at least one-third of the Board, are subject to retirement by rotation at each

subsequent AGM. The Directors to retire in each year are the Directors who have been longest in office since their

appointment or re-appointment. The Articles of Association also provide that all the Board members shall also

retire once at least in each three years and shall be eligible for re-election. These provide an opportunity for the

shareholders to renew their mandates. The election of each Director is voted on separately. To assist shareholders

in their decision, sufficient information such as personal profile, meeting attendance and the shareholdings in the

Group of each Director standing for election are furnished in the Annual Report, which also includes the Notice of

the AGM.

The Company Secretaries will ensure that all appointments are properly made, that all information necessary is

obtained, as well as all legal and regulatory obligations are met.




24/66

2.0 DIRECTORS' REMUNERATION

The Company pays its Directors annual fees, which are approved annually by the shareholders. Members of the

Board and Board Committees are paid allowances for each meeting they attended. In addition, members of

the Management Committee are paid allowances for their additional responsibility.

The nature and amount of each major element of the remuneration of the Directors of the Company for the financial

year ended 31 December 2005 are as follows:

(a) Aggregate remuneration of Directors categorised into the appropriate components:

Fees RM' 000 Other emoluments RM' 000 Total RM' 000

Non-Executive Directors 241 59 300

(b) The number of Directors of the Company whose total remuneration falls within the respective bands of RM50,000:

Range of remuneration Number of Non-Executive Directors

Less than RM50,000 7*

Between RM50,000 and RM100,000 1

* Includes Directors who resigned during the financial year.

3.0 SHAREHOLDERS

The policy of the Company is to maintain an active dialogue with its shareholders with the intention of giving

shareholders as clear and complete a picture of the Company's performance and position as possible.

The Annual General Meeting provides the platform for two-way communication between the Company and

shareholders. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their

behalf. At the AGM, the shareholders are encouraged to ask questions both about the resolutions being proposed

or about the Group's operations in general. Members of the Boards as well as the External Auditors of the

Company are present to answer questions raised by the shareholders.

Besides the various announcements made to Bursa Malaysia, the timely release of the unaudited interim financial

statements provides shareholders with an overview of the Group's performance and operations. Members of the

public can also access the Company's announcements and Annual Reports from the Bursa Malaysia's website.

In addition, nominees of the Company's major shareholders sit in the Board. This provides a forum for interactions

and direct communications between the Board, Management and major shareholders.

All queries from shareholders, whether by mail or telephone call, are communicated to the Company Secretaries.




25/66

4.0 ACCOUNTABILITY AND AUDIT

4.1 Financial Reporting

The Board aims to provide and present a balanced and meaningful assessment of the Group's financial performance

and prospects at the end of the financial year, primarily through the annual financial statements and unaudited

interim financial statements to shareholders as well as the Chairman's Statement in the Annual Report. The Board

is assisted by the Audit Committee to oversee the Group's financial reporting processes and the quality of its

financial reporting.

The directors' responsibility in respect of the preparation of the audited financial statements is detailed in the

Directors' Responsibility Statement included in the Annual Report.

4.2 Internal Control

The information on the Group's internal control is detailed in the Internal Control Statement appearing in the AnnualReport.

4.3 Relationship with the Auditors

Key features underlying the relationship of the Audit Committee with the External and Internal Auditors including a

summary of the activities of the Audit Committee during the year and evaluation of the independent audit process

are included in the Audit Committee Report appearing in the Annual Report.

COMPLIANCE STATEMENT

Save as disclosed below, the Group has complied with the Principles and Best Practices of the Code throughout the year:

(a) appointment of a senior independent non-executive director to whom concerns may be conveyed has not been

made as the Board believes to be not necessary since the Chairman encourages full participation during discussion

and deliberation of issues affecting the Group by all the Board members;

(b) establishment of a Remuneration Committee has not been undertaken as none of the Board members are Executive

Directors. In addition, the Board as a whole recommends the Directors' fees to be approved at the AGM and

determines the other emoluments of the Directors with the individual Director abstaining from decisions in respect

of their individual remuneration;

(c) remuneration of each member of the Board of Directors is not detailed as the Directors after due consideration, are

of the opinion that the transparency and accountability aspects of Corporate Governance as applicable to Directors'

remuneration are appropriately served by the band disclosure made in this Statement; and

(d) there is informal succession planning within the organisation whereby middle Management is constantly beingappraised to assess their capability of taking over the Senior Management's positions.

This statement is made in accordance with a resolution of the Board of Directors dated 3 March 2006.




26/66

In accordance with the principles of good corporate governance, the Board of Directors of Ladang Perbadanan-Fima

Berhad ("the Board") is pleased to provide the disclosure statement on the state of internal control of the Group for the year

under review.

RESPONSIBILITY

The Board affirms its overall responsibility for maintaining a sound system of internal control to safeguard shareholders'

investment and the Group's assets. The internal control system, by its nature, is designed to manage the Group's risks

rather than to eliminate the risk of failure to achieve business objectives of the Group. Accordingly, the system can only

provide reasonable and not absolute assurance against material misstatement, fraud or loss.

KEY ELEMENTS OF INTERNAL CONTROL FRAMEWORK

The key elements of the Group's system of internal control are summarised as follows:

1. Risk Management

The Board regards risk management as an integral part of the business operations and has adopted a risk

management framework for the Group to identify, evaluate and manage significant risks faced by the Group. The

Management of each operating units is responsible for the identification and evaluation of significant risks

applicable to their respective areas of operations and to formulate suitable internal controls to manage the risks.

For the year under review, the process was reviewed by the Board.

The Board confirms that the risk management process is in place for the financial year under review.

2. Code of Business Conduct and Ethics

All employees are required to adhere to the Code of Business Conduct and Ethics, which defines the minimum

standard of behaviour and ethical conduct for all employees of the Group.

3. Internal Audit Function

The Internal Audit function provides the Board via the Audit Committee with the independent assurance on the

adequacy and effectiveness of the internal control system within the Group. Details of the activities undertaken by

the Audit Committee and Internal Audit function are set out in the Audit Committee Report.

4. Other Key Elements of Internal Control

These include the following:

Delegation of responsibilities to Board Committees through defined terms of reference including authorisationlevels for various aspect of the business.

The Board receives and reviews the Group's financial statements including quarterly reports to Bursa Malaysia

Securities Berhad on a regular basis. The financial results are monitored against the year's budget and previous

year's results and major variances are deliberated by the Board.

Regular meetings of the Board Management Committee are conducted to review and monitor matters

pertaining to the business operations based on reports, which provide information on financial and non-financial

matters.

Comprehensive annual budgeting process requiring all operating units to submit budgets which are reviewed by

the Board Management Committee and approved by the Board.

Critical information of the Group such as financial data and human resource data are captured within the

various information systems in place to keep track of the Group's operations. Relevant information is also

obtained from external sources to monitor and benchmark the Group's performance.

InternalControl Statement 24ANNUAL REPORT 2005



27/66

Segregation of duties is in place to reduce scope for error and fraud.

Major purchases of goods and contract works are referred to the Board Tender Committee or Board of Directors

for consideration and approval.

Services of a Visiting Adviser and Mill Consultant are engaged to review and advise the Board Management

Committee on the estate and mill operations.

Adequate insurance coverage on major assets is in place to ensure that the Group's assets are sufficiently

protected against any mishap that will result in losses to the Group.

Visits by members of the Board Management Committee and Management to the operating units.

Emphasis is placed on improving the quality and ability of employees with continuing education, training and

development.

Investment proposals covering the acquisition of properties and long term investments are thoroughly

appraised by the Board.

CONCLUSION

The Board is of the view that there was no significant breakdown or weakness in the Group's system of internal control that

may result in material losses being incurred by the Group for the financial year under review.

The External Auditors have reviewed the Internal Control Statement in accordance with the Auditing Technical Release 5,

Guidance for Auditors on the review of Directors' Statement on Internal Control, for inclusion in the Annual Report 2005.

Based on their review, the External Auditors have reported that nothing had come to their attention that caused them to

believe that the said Statement was inconsistent with their understanding of the process the Board has adopted in the

review of the adequacy and integrity of the internal controls of the Group.


25ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Internal

Control Statement


28/66

1. Non-Audit Fees

Non-audit fees paid to the Company's External Auditors in the financial year ended 31 December 2005 were as

follows:

Name of Auditors Nature of Engagement RM

KPMG Desa Megat & Co. Review of Internal Control Statement 6,000

KPMG Tax Services Sdn. Bhd. Taxation Services 4,700

2. Recurrent Related Party Transactions of Revenue Nature

Recurrent related party transactions of a revenue nature of the Company for the financial year ended 31 December

2005 were as follows:

Related Party Relationship Nature of Transaction RM

Perak Meat Industries Sdn Bhd A company which Dato' Shamsul Lease rental received 3,000

Bahari bin Salleh Khir has an

interest

3. Revaluation Policy on Landed Properties

The revaluation policy of the Group in relation to landed properties is set out in the Notes to the Financial

Statements appearing in the Annual Report.

4. Sanctions and/or Penalties

During the financial year, there were no sanctions and/or penalties imposed on the Company or its subsidiary

company, Directors or Management arising from any significant breach of rules/guidelines/legislations by the

relevant regulatory authorities.

5. Profit Estimate, Forecast or Projection

The Group has not provided any profit estimate, forecast or projection in the financial year ended 31 December

2005.

6. Variation in Results

There was no major variation in results (differ by 10% or more) from unaudited results announced.

7. Profit Guarantee

The Group has not provided any profit guarantee in the financial year ended 31 December 2005.

8. Material Contracts

There were no material contracts entered into by the Company and its subsidiary company which involved

Directors' and substantial shareholders' interests either still subsisting at the end of the financial year ended 31

December 2005 or entered into since the end of the previous financial year.

AdditionalDisclosures 26ANNUAL REPORT 2005



29/66

9. Share Buyback

During the financial year under review, the Company did not exercise any share buy backs permitted by Section

67A, Companies Act, 1965.

10. Utilisation of Proceeds Raised from Corporate Proposals

There were no corporate proposals conducted in the financial year under review.

11. Options, Warrants and Convertible Securities

There were no options, warrants or convertible securities in issue in the financial year under review.

12. American Depository Receipt ("ADR") or Global Depository Receipt ("GDR") Programme

The Company did not sponsor any ADR or GDR programme during the financial year.

27ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Additional

Disclosures


30/66

Financial Events Date

Quarterly Result Announcement

1st Quarter 2005 26 May 2005

2nd Quarter 2005 10 August 2005

3rd Quarter 2005 29 November 2005

4th Quarter 2005 27 February 2006

2005 Annual Report 28 March 2006

Notice of Annual General Meeting 28 March 2006

26th Annual General Meeting 29 April 2006

Dividends

Interim

Declaration 10 August 2005

Entitlement 1 September 2005

Book Closure 2 September 2005

Payment 15 September 2005

Final*

Declaration 25 February 2006

Entitlement 26 May 2006

Book Closure 29 May 2006

Payment 12 June 2006

* Subject to shareholders' approval at the Company's 26th Annual General Meeting.

28ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADFinancial

Calendar


31/66

2001 2002 2003 2004 2005

Results (Restated)

Revenue RM'million 30.5 35.8 40.5 44.6 40.6

Profit before tax RM'million 3.5 13.9 14.7 17.8 11.6

Profit after tax RM'million 2.3 10.0 10.6 17.8 8.3

Assets and Liabilities

Share capital RM'million 114.3 114.3 114.3 114.3 114.3

Reserves RM'million 50.3 51.3 52.0 57.5 49.3

Shareholders' funds RM'million 164.6 165.6 166.3 171.8 163.6

Share Information

Basic earnings per share sen 2.04 8.77 9.27 15.57 7.25

Gross dividend per share sen 6.00 12.00 15.00 20.00 10.00

Net assets per share RM 1.44 1.45 1.46 1.50 1.43

2001 2002 2003 2004 2005

Grossdividendpershare

6.0

0

12.0

0

15.0

0

10.0

0

20.0

02001 2002 2003 2004 2005

Revenue

30.5

35.8

40.5

40.6

44.6

2001 2002 2003 2004 2005

Profitbeforetax

3.5

13.9 1

4.7

11.6

17.8

2001 2002 2003 2004 2005

Shareholders'fund

164.6

165.6

166.3

163.6

171.8

2001 2002 2003 2004 2005

Netassetspershare

1.4

4

1.4

31.4

5 1.46

1.5

0

2001 2002 2003 2004 2005

Basicearingspershare

2.0

4

8.7

79.2

7

7.2

5

15.5

7

29ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Financial

Highlights


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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 2005

Financial Performance

Revenue RM'million 8.95 11.58 12.17 7.92 40.62

Operating profit RM'million 1.99 3.56 4.00 0.98 10.53

Profit before taxation RM'million 2.30 3.87 4.21 1.23 11.61

Net profit after taxation RM'million 1.58 2.77 3.00 0.94 8.29

Basic earnings per share sen 1.39 2.42 2.62 0.82 7.25

Gross dividend per share sen 0.00 5.00 0.00 5.00 10.00

Plantation Production

Crude palm oil m/tonnes 5,651 6,464 6,934 4,483 23,532

Palm kernel m/tonnes 1,585 1,817 1,778 1,193 6,373

1st

Quarter2nd

Quarter3rd

Quarter4th

QuarterBasicearnings

pershare

1.3

9

2.4

2

0.8

2

2.6

2

Revenue

1st

Quarter2nd

Quarter3rd

Quarter4th

Quarter

8.9

5

12.1

7

11.5

8

7.9

2

1st

Quarter2nd

Quarter3rd

Quarter4th

Quarter

Profitbeforetax 2

.30

4.2

1

3.8

7

1.2

3

CPOproduction

1st

Quarter2nd

Quarter3rd

Quarter4th

Quarter

5,6

51

6,4

64

6,9

34

4,4

83

1st

Quarter2nd

Quarter3rd

Quarter4th

Quarter

PKproduction

1,5

85

1,8

17

1,7

78

1,1

93

30ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADQuarterly

Performance


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Oil Palms

Estate Mature Immature TotalHectare Hectare Hectare Hectare Hectare

Ladang Lekir 3,015.74 866.60 3,882.34 257.89 4,140.23

Ladang Changkat Chermin 1,961.03 404.60 2,365.63 175.76 2,541.39

Ladang Raja Hitam 764.70 647.50 1,412.20 77.45 1,489.65

Total 5,741.47 1,918.70 7,660.17 511.10 8,171.27

Others Total

Location Of Estates

PERAK

Ipoh

Lumut

Sitiawan

LadangRajaHitam

Ladan

g

Changkat

Cerm

in

Lada

ngLek

ir

Land Usage

Planted - Mature

Planted - Immature

Others

5 % 24 %

71 %

Age Profile

16 - 20 Years

Abo ve 20 Yea rs

0 - 10 Years

11 - 15 Years

30 %48 %

9 %13 %

31ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Area Statement

As At 31 December 2005


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Location Description & Tenure Year of Area Approximate Date of Net Book

Existing Use Expiry Age of Last Acquisition/ Value

Buildings Revaluation RM'million

Lot 3916, Mukim Lekir, Ladang Lekir Freehold - 4,140.23 21 - 24 Revalued on 26.14

Daerah Manjung, (Oil palm and hectares years 29 July 1993

Perak and Lot 67 & 68, mango plantation)

Mukim Jaya Baru,

Daerah Perak Tengah,

Perak.

Lot 65 & 66, Ladang Changkat Leasehold 2080 2,541.39 21 - 24 Revalued on 10.62Mukim Jaya Baru, Chermin hectares years 27 July 1993

Daerah Perak Tengah, (Oil palm plantation

Perak, Lot 10944, & palm oil mill)

Mukim Bota,

Daerah Perak Tengah,

Perak, P.T. 365 & 366,

Mukim Sitiawan,

Daerah Manjung,

Perak and Lot 20079,

20402 - 20406 &

20409 - 20412,

Mukim Sitiawan,

Daerah Manjung, Perak.

P.T. 344, 345 & 371, Ladang Raja Hitam Freehold - 1,489.65 24 years Revalued on 9.41

Mukim Sitiawan, (Oil palm plantation) hectares 26 July 1993

Daerah Manjung,

Perak and P.T. 86 &

Lot 7761, Mukim Beruas,

Daerah Manjung, Perak.

Head Office Head Office Freehold - 1,843.10 31 years Acquired on 0.13

H.S. (D) Ka 1132/74, (Office building) sq. metres 30 September 1993

Lot 11730S,

Bandar Ipoh,

Daerah Kinta,

No. 10,

Persiaran Gopeng Satu,

31350 Ipoh, Perak.

PropertiesAs At 31 December 2005 32ANNUAL REPORT 2005



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1. SHARE CAPITAL

Authorised share capital : 150,000,000 ordinary shares of RM1.00 each

Issued and fully paid : 114,300,000 ordinary shares of RM1.00 each

Class of shares : Ordinary share of RM1.00 each

Voting right : One vote per ordinary share

2. ANALYSIS BY SIZE OF SHAREHOLDINGS

No. of % of Total % of issued

Size of shareholdings shareholders shareholders shareholdings share capital

Less than 100 2 0.13 100 0.00

100 to 1,000 1,063 69.75 1,049,300 0.92

1,001 to 10,000 380 24.93 1,364,500 1.1910,001 to 100,000 50 3.28 1,062,500 0.93

100,001 to less than 5% of issued shares 26 1.71 33,099,600 28.96

5% and above of issued shares 3 0.20 77,724,000 68.00

Total 1,524 100.00 114,300,000 100.00

3. SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

No. of % of issued

No. Name of shareholders shares held share capital

1. Glamour Green Sdn Bhd 36,524,000 31.95

2. Taipan Heritage Sdn Bhd 27,520,000 24.08

3. Ablington Holdings Sdn Bhd 17,600,000 15.40

4. DIRECTORS' SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS' SHAREHOLDINGS

Direct Deemed Total % of issued

No. Name of Directors interest interest shareholdings share capital

1. Dato' Shamsul Bahari bin Salleh Khir - 2,000,000 2,000,000 1.75

2. Dato' Haji Ahmad Zakiuddin bin Harun 10,000 - 10,000 0.01

3. Dato' Jaafar bin Lajis - 36,524,000 36,524,000 31.954. Kamisan bin Suja' - 36,524,000 36,524,000 31.95

5. Yeoh Hock Thong - - - -

6. Sharifah Nor Hashimah binti Syed Kamaruddin - - - -

33ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Shareholding

StatisticsAs At 20 February 2006


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5. THIRTY (30) LARGEST SHAREHOLDERS AS IN THE REGISTER OF MEMBERS AND THE RECORD OF DEPOSITORS

No. of % of issuedNo. Name of shareholders shares held share capital

1. Amsec Nominees (Tempatan) Sdn Bhd 36,524,000 31.95(Ambank (M) Berhad for Glamour Green Sdn Bhd)

2. HDM Nominees (Tempatan) Sdn Bhd 23,600,000 20.65(Malaysian Assurance Alliance Berhad for Taipan Heritage Sdn Bhd)

3. Ablington Holdings Sdn Bhd 17,600,000 15.40

4. Hamidah binti Abdul Rahman 5,284,000 4.62

5. HDM Nominees (Tempatan) Sdn Bhd 3,920,000 3.43(Leong Tuck Onn for Taipan Heritage Sdn Bhd)

6. Ng Song Choon Enterprises Sdn Berhad 2,445,000 2.14

7. United Plantations Berhad 2,115,000 1.85

8. HDM Nominees (Asing) Sdn Bhd 2,000,000 1.75(DBS Vickers Secs (S) Pte Ltd for Ong Beng Huat)

9. S.B.S.K. Plantations Sdn Bhd 2,000,000 1.75

10. Malaysian Assurance Alliance Berhad 1,567,000 1.37

11. Mayban Securities Nominees (Tempatan) Sdn Bhd 1,532,000 1.34(Pledged Securities Account for Poh Gaik Lye)



14. Ong Teng Kek 1,353,000 1.18

15. RHB Capital Nominees (Tempatan) Sdn Bhd 1,119,000 0.98

(Pledged Securities Account for Leong Wei Kong)


17. TA Nominees (Tempatan) Sdn Bhd 800,000 0.70(Pledged Securities Account for Ronald Leong Vui Khiong)

18. M & A Nominee (Asing) Sdn Bhd 744,000 0.65(FRLA Services Sdn Bhd for Thomas Chua Boon Lee)

19. EB Nominees (Tempatan) Sendirian Berhad 730,000 0.64(Pledged Securities Account for Ho Soon Mei)

20. EB Nominees (Tempatan) Sendirian Berhad 670,000 0.59(Pledged Securities Account for Ong Teng Kek)

21. Cimsec Nominees (Tempatan) Sdn Bhd 500,000 0.44(EON Finance Berhad for Azian bin Osman)

22. M & A Nominee (Tempatan) Sdn Bhd 432,500 0.38(Jendarata Bernam Provident Fund)

23. Sinny United Sdn Bhd 428,800 0.38

24. RHB Capital Nominees (Tempatan) Sdn Bhd 381,000 0.33(Pledged Securities Account for Abd Aziz bin Jantan)

25. SK Capital Sdn Bhd 370,000 0.32

26. M & A Nominee (Tempatan) Sdn Bhd 320,000 0.28(United Plantations Workers Benevolent Retirement Scheme)

27. Sahamann @ Basir bin Ismail 156,000 0.14

28. Ong Tong Chen 135,000 0.12

29. Mayban Nominees (Tempatan) Sdn Bhd 123,300 0.11

(Pledged Securities Account for Thai Seong)

30. Mayban Nominees (Tempatan) Sdn Bhd 50,000 0.04(Pledged Securities Account for Cheah Siew Huen)

ShareholdingStatistics 34ANNUAL REPORT 2005


As At 20 February 2006


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The Directors are required by the Companies Act,

1965 to prepare financial statements for eachfinancial year, which give a true and fair view of the

state of affairs of the Group and the Company at

the end of the financial year and of their results and

cash flows for the financial year then ended.

In preparing the financial statements for the

financial year ended 31 December 2005, the

Directors have:

complied with the applicable approve accountingstandards in Malaysia

adopted and consistently applied appropriate

accounting policies

made judgements and estimates that are prudent

and reasonable

The Directors have responsibility for ensuring that

the Group and the Company keep accounting

records, which disclose with reasonable accuracy

the financial position of the Group and the

Company and which enable them to ensure that

the financial statements comply with the

Companies Act, 1965.

The Directors are also responsible for taking such

steps as are reasonably open to them to safeguard

the assets of the Group and the Company and to

prevent and detect fraud and other irregularities.

The Directors consider that they have pursued the

actions necessary to meet their responsibilities as

set out in this Statement.


Directors'Reponsibility Statement35ANNUAL REPORT 2005



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FinancialStatements

Directors' Report 38 - 40

Statement by Directors 41

Statutory Declaration 42

Auditors' Report 43

Balance Sheets 44

Income Statements 45

Statements of Changes in Equity 46

Cash Flow Statements 47

Notes to the Financial Statements 48 - 62


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38ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADDirectors'

Report

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the

Company for the year ended 31 December 2005.

PRINCIPAL ACTIVITIES

The Company is principally engaged in oil palm cultivation and production and sale of crude palm oil and palm kernel,

whilst the principal activity of the subsidiary is set out in Note 4 to the financial statements. There has been no significant

change in the nature of these activities during the financial year.

RESULTS

Group Company

RM'000 RM'000

Net profit for the year 8,286 8,287

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the year.

DIVIDENDS

Since the end of the previous financial year, the Company paid:

(i) a final dividend of 10 sen less 28% tax and a special dividend of 5 sen less 28% tax for the year ended 31 December 2004

amounting to RM8,229,600 and RM4,114,800 respectively on 12 July 2005; and

(ii) an interim dividend of 5 sen less 28% tax totalling RM4,114,800 in respect of the financial year ended 31 December 2005

on 15 September 2005.

The Directors recommend a final dividend of 5 sen less 28% tax in respect of the financial year ended 31 December 2005

amounting to RM4,114,800 subject to approval of the shareholders at the forthcoming Annual General Meeting.

DIRECTORS OF THE COMPANY

Directors who served since the date of the last report are:



Dato' Jaafar bin LajisKamisan bin Suja'

Yeoh Hock Thong

Sharifah Nor Hashimah binti Syed Kamaruddin (appointed on 12.08.2005)

Ir. Muhammad Hafni bin Ibrahim (resigned on 30.06.2005)

Dato' Richard Ong Guan Seng (retired on 22.06.2005)

In accordance with Article 66 of the Company's Articles of Association, Dato' Shamsul Bahari bin Salleh Khir and Dato' Haji

Ahmad Zakiuddin bin Harun retire by rotation from the Board at the forthcoming Annual General Meeting and being eligible,

offer themselves for re-election.

Sharifah Nor Hashimah binti Syed Kamaruddin, who was appointed during the year retires in accordance with Article 72 of

the Company's Articles of Association and, being eligible, offers herself for re-election.

For The Year Ended 31 December 2005


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DIRECTORS' SHAREHOLDINGS

The holdings and deemed holdings in the ordinary shares of the Company of those who were Directors at year end as

recorded in the Register of Directors' Shareholdings are as follows:

of RM 1 each

Balance at Balance at

1.1.2005 Bought Sold 31.12.2005


- held directly - - - -

- deemed interest 2,000,000 - - 2,000,000


- held directly 10,000 - - 10,000- deemed interest - - - -

Dato' Jaafar bin Lajis


- deemed interest 36,524,000 - - 36,524,000

Kamisan bin Suja'


- deemed interest 36,524,000 - - 36,524,000

None of the other Directors holding office at 31 December 2005 had any interest in the ordinary shares of the Company and

of its related corporations during the financial year.

DIRECTORS' BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any

benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors

as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the

Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial

interest, other than any deemed benefits that may accrue to certain Directors by virtue of normal trading transactions by the

Group and the Company with related parties as disclosed in Note 22 to the f inancial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the

Company to acquire benefits by means of the acquisition of shares in the Company or any other body corporate.

ISSUE OF SHARES

There were no changes in the issued and paid-up capital of the Company during the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the year.

39ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Directors'

ReportFor The Year Ended 31 December 2005


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OTHER STATUTORY INFORMATION

Before the financial statements of the Group and the Company were made out, the Directors took reasonable steps to

ascertain that:

(i) there are no bad debts to be written off and no provision need to be made for doubtful debts, and

(ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:

(i) that would render it necessary to write off any bad debts or provide for any doubtful debts, or

(ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company

misleading, or

(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of

the Company misleading or inappropriate, or

(iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial

statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which

secures the liabilities of any other person, or

(ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liabilities of any company in the Group has become enforceable, or is likely to become

enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will

or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended

31 December 2005 have not been substantially affected by any item, transaction or event of a material and unusual nature

nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of

this report.

AUDITORS

The auditors, Messrs KPMG Desa Megat & Co., have indicated their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors:


Director

Yeoh Hock Thong

Director

IPOH

Date: 3 March 2006

40ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADDirectors'

ReportFor The Year Ended 31 December 2005


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In the opinion of the Directors, the financial statements set out on pages 44 to 62 are drawn up in accordance with the

provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and

fair view of the state of affairs of the Group and of the Company at 31 December 2005 and of the results of their operations

and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

Dato' Shamsul Bahari bin Salleh KhirDirector

Yeoh Hock Thong

Director

IPOH

Date: 3 March 2006

41ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHAD Statement

By DirectorsPursuant to Section 169(15) of the Companies Act, 1965


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I, Gowrie Navaratnam, the officer primarily responsible for the financial management of Ladang Perbadanan-Fima Berhad,

do solemnly and sincerely declare that the financial statements set out on pages 44 to 62 are, to the best of my knowledge

and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the

provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )

)

abovenamed at Ipoh in the State of )

)Perak Darul Ridzuan on 3 March 2006 ) Gowrie Navaratnam

BEFORE ME:

Clarence Joseph

(No. A044)

Commissioner for Oaths

Ipoh

42ANNUAL REPORT 2005LADANG PERBADANAN-FIMA BERHADStatutory

DeclarationPursuant to Section 169(16) of the Companies Act, 1965


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We have audited the financial statements set out on pages 44 to 62. The preparation of the financial statements is the

responsibility of the Company's Directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our

opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do

not assume responsibility towards any other person for the content of this report.

We conducted our audit in accordance with approved Standards

ladang perbadanan-fima berhad annual report 2005

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