PPB GROUP BERHAD INVESTOR HANDBOOK 2005

PPB GROUP BERHAD INVESTOR HANDBOOK 2005

CONTENTS

4 introduction5 corporate profile6 mission statement7 corporate history9 corporate objectives10 corporate structure12 board of directors17 group management team21 activities22 amusement centre operations24 animal feed milling26 chemicals manufacturing28 cinema operations30 commodity trading32 consumer products distribution34 contract manufacturing

36 edible oils refining38 engineering services40 environmental engineering,

waste management & utilities42 flour milling44 glove manufacturing46 livestock farming48 oil palm plantations50 packaging52 property development54 sugar refining56 group financial highlights58 5-year group statistics60 financial performance62 movements in share capital64 dividend record65 investor relations schedule for 2006

ACTIVITIES

22

55

4

As part of PPB’s investor relations programme,we are publishing our fifth Investor Handbook tokeep shareholders and the investing publicinformed of PPB Group’s diversified activities.The Investor Handbook is updated yearly anddistributed with the Annual Report. We trust itwill serve as a convenient reference guide forthe reader to better understand PPB, tointerpret its results and to appraise its futuregrowth and direction.

Through this better understanding, both thecorporation and its shareholders are able towork together to build and grow PPB to enable itto provide increasing returns to its shareholders.

PPB Group is constantly seeking to expand itscore businesses and to invest in businesses whichare synergistic to its existing operations in orderto maintain its competitive edge in the marketand to provide sustainable shareholder valuegrowth.

Datuk Oh Siew NamExecutive Chairman

INTRODUCTION

5

• PGEO Group which processes more than 3.0million mt of edible oils per year is one of the largest palm oil refiners in the country with six refineries in Peninsular and East Malaysia.

• PPB Oil Palms Group is one of the more efficient producers of crude palm oil in the country. It has a total land bank of 363,238 hectares in East Malaysia and Indonesia of which 86,627 hectares have been planted and owns nine crude palm oil millswith a total milling capacity of 2 million mt of freshfruit bunches per annum.

• Chemquest Group is engaged principally in environmental engineering, infrastructure and wastemanagement and has successfully commissioned 20water projects and 50 wastewater treatment plantsfor various types of industries throughout Malaysia.

As one of the more diversified conglomerates inSoutheast Asia, PPB’s success over the years hasshown that its strategic acquisitions and jointventures were in the right direction.

Today, PPB ranks among the top companies listed onthe Bursa Malaysia Securities Berhad with a marketcapitalisation of RM4.9 billion. Its total assets andturnover for the last financial year ended 31 December2005 amounted to RM6.4 billion and RM11.0 billionrespectively. The Group currently employs more than20,000 employees for its domestic and overseasoperations.

CORPORATEPROFILE

PPB Group Berhad was incorporated in Malaysia inNovember 1968 and was subsequently listed on thethen Stock Exchange of Kuala Lumpur and Singaporewith an issued and paid capital of RM15 million in May1972.

The Company has grown from its initial business ofcane cultivation and sugar milling to become a majorconglomerate engaged in diverse businesses. TheGroup’s operations now include sugar refining; grainstrading, flour and feed milling; edible oils processing;oil palm plantations; environmental engineering andwaste management; film exhibition and distribution;property ownership and development; and commoditytrading.

PPB Group has positioned itself to be a market leaderin all its core businesses. Its core businesses areoperated by the following :-

• Malayan Sugar Manufacturing Company Berhad,operator of the region’s largest sugar refinery in Prai which supplies about 50% of the local market requirements.

• FFM Group, a major producer of flour and animal feed owning a total of four flour mills and five feed mills located throughout the country. The FFM Group supplies more than 40% of the country’s flour requirements.

MISSIONSTATEMENT

Striving continually to strengthen our position as a market leader in

our core businesses

to expand intoother relatedactivities to increaseshareholder value.

&

7

CORPORATEHISTORY

In 1987, PPB made a takeover offer for FFM Berhad (formerly known asFederal Flour Mills Berhad), enabling PPB to further diversify into flour andanimal feed milling, edible oils processing and commodity trading.

In the same year, PPB finalized an agreement with Golden Harvest(International) Ltd of Hong Kong to establish Golden Screen Cinemas SdnBhd (GSC) then known as Golden Communications (M) Sdn Bhd. In 1990,PPB acquired Borneo Filem Organization (M) Sdn Bhd (now known as PPBLeisure Holdings Sdn Bhd) and merged its cinema operations under GSC.

In a concerted effort to diversify the Group’s revenue base and to reduceits dependency on food operations, PPB in 1993 subscribed for 40% equityinterest in Chemquest Sdn Bhd (Chemquest) which is involved inenvironmental engineering, infrastructure, waste management, trading ofchemicals and contract manufacturing. PPB’s stake in Chemquest increasedto 55% in 1998.

PPB’s involvement in the sugar industry began as early as 1968 with the cultivation and milling of sugarcane in Chuping, Perlis.

In 1976, PPB acquired Malayan Sugar Manufacturing Company Berhad (MSM) and through MSM, PPBbecame indirectly involved in the hotel industry, polybags manufacturing and bulking operations.

PPB’s investment in oil palm cultivation began in 1986 through the establishment of Saremas Sdn Bhdto develop an oil palm plantation in Sarawak and in the following year, PPB acquired a 60% equityinterest in Sapi Plantations Sdn Bhd to operate an oil palm project in Sabah. In 1995, PPB expanded itsoil palm operations to Indonesia with a 70% equity interest in PT Tidar Sungkai Sawit (PTSS). In 1997,PPB’s oil palm plantations in East Malaysia were merged under PPB Oil Palms Berhad (PPBOP) which wassubsequently listed on the KLSE (now known as Bursa Malaysia) on 5 August 1997.

8

In 2000, PPB undertook a series of corporate restructuring exercises to streamline itsoperations which included the transfer of PTSS to PPBOP; injection of PT HealthcareGlovindo and Minsec Engineering Services to Chemquest; and the establishment of PGEOGroup to consolidate the edible oils refining operations held under FFM and PPBOP. To betterreflect its activities, the name of the Company was changed from “Perlis PlantationsBerhad” to “PPB Group Berhad”.

In 2004, PPB successfully privatized FFM Berhad under a members’ scheme of arrangementunder Section 176 of the Companies Act 1965, making it a wholly-owned subsidiary from a54.23% subsidiary.

As PPB continues to expand in its core businesses and improve on efficiency andproductivity, it is ready to capitalize on any new investment opportunities especially inbusinesses which are strategic to its current operations to enable the Group to achievefurther success.

CORPORATEHISTORY

9

CORPORATEOBJECTIVES

CREATE WEALTH FOR SHAREHOLDERSTo reward its shareholders through attractivedividends or capital issues.

PRACTISE GOOD CORPORATE GOVERNANCETo observe the highest standard of transparency,accountability and integrity in all its businesspractices and corporate performance.

FOCUS ON CORE BUSINESSESTo focus on expanding its core businesses whichinclude sugar refining; grains trading, flour andanimal feed milling; edible oils refining; oil palmplantations and environmental engineering,infrastructure and waste management services.

STRENGTHEN MARKET POSITIONTo further strengthen its leadership position in all itscore businesses.

MAINTAIN SUSTAINABLE GROWTHTo focus on sustainable growth in the NTA andearnings of the Group.

UTILISE SYNERGIESTo leverage on the strong and committedmanagement team from the various operations andto ensure integration of group activities to maximize synergies.

EXPAND TO OVERSEAS MARKETTo expand its activities to China and other ASEANcountries to provide earnings growth.

STAY COMMITTED AS A RESPONSIBLE CORPORATECITIZENTo be a responsible corporate citizen focused onimproving the quality of life of others throughfinancial grants, corporate sponsorships and in-kinddonations.

IMPROVE EFFICIENCY & PRODUCTIVITYTo further develop its standards in design,production, distribution and marketing in order tomeet market requirements.

SECURE FUTURE GROWTHTo seek and capitalize on investment opportunitiesas well as explore new market segments bothdomestically and regionally for business andrevenue growth in the years ahead.

10

SUGAR

Malayan Sugar 100%Manufacturing Co Bhd

(Sugar refining)

Kilang Gula Felda 50%Perlis S/B

(Sugar milling & refining)

PLANTATIONS

PPB Oil Palms Berhad 55.7%-Listed on Bursa Malaysia

(Investment holding)

Sapi Plantations S/B 100%Reka Halus S/B 70%Kiabau Plantations S/B 100%Sabahmas Plantations S/B 100%Sri Kamusan S/B 100%Sekar Imej S/B 100%Ribubonus S/B 100%Ceramilek S/B 89.8%Saremas S/B 100%Suai Plantations S/B 100%Segarmas Plantations S/B 100%Suburmas Plantations S/B 70%Suburmas Palm Oil Mill S/B 53%Clonal Palms S/B 70%PT Mustika Sembuluh 90%PT Kerry Sawit Indonesia 90%PT Tidar Sungkai Sawit 100%Saratok Palm Oil Mill S/B 30%

(Oil palm cultivation)

GRAIN, FLOUR & FEED MILLING

FFM Bhd 100%(Investment holding & flour milling)

Johor Bahru Flour Mill S/B 100%FFM Flour Mills (S'wak) S/B 100%Vietnam Flour Mills Ltd 100%Kerry Flour Mills Ltd 43.4%

(Flour milling)

FFM Marketing S/B 100%(Consumer products distribution)

JBFM Feedmill S/B 100%FFM Feedmills (Sabah) S/B 100%FFM Feedmills (S’wak) S/B 100%

(Animal feed processing)

FFM Farms S/B 100%(Livestock farming)

Kuok Oils & Grains Pte Ltd 28%(Commodity trading)

EDIBLE OILS REFINING & TRADING

PGEO Group S/B 100%(Investment holding)

PGEO Edible Oils S/B 100%Sandakan Edible Oils S/B 100%Bintulu Edible Oils S/B 100%Lahad Datu Edible Oils S/B 45%KOG Edible Oils BV 35%

(Edible oils processing)

PGEO Energy S/B 100%(Renewable energy production)

CORPORATESTRUCTURE

AS AT 31 MARCH 2006

11

PROPERTIES

PPB Hartabina S/B 100%(Property development)

Cathay Screen 66.2% Cinemas S/B

(Property owners)

ENTERTAINMENT

PPB Leisure Holdings S/B 100%(Investment holding)

Golden Screen Cinemas S/B 54.2%(Cinema operations)

Kerry Leisure Concepts S/B 50%(Amusement centre operations)

MANUFACTURING & SERVICES

Chemquest S/B 55%(Investment holding)

Chemical Waste Management S/B 99%(Waste management &

environmental engineering)

Asia Pacific Microspheres S/B 100%(Microspheres manufacturing)

Malayan Adhesives & Chemicals S/B 96.9%(Adhesives manufacturing)

JER Envirotech S/B 50%(Wood-plastic composites manufacturing)

Products Manufacturing S/B 70%(Contract manufacturing)

Sitamas Environmental Systems S/B 70%(Refuse disposal services)

PT Healthcare Glovindo 100%(Glove manufacturing)

Minsec Engineering Services S/B 100%(Engineering services)

Tego S/B 79.9%(Polybag manufacturing)

Note: The above chart features only the main operating companies and percentages indicate the Group’s equity interest held.

12

QUALIFICATIONS AND EXPERIENCE• Bachelor of Engineering (Honours) degree in

Electrical Engineering from the University of Canterbury, New Zealand

• Assistant Controller of Telecom Malaysia for 5 years before joining FFM Berhad Group in 1968

• Managing Director of FFM Berhad from 1982 to 2002 and appointed as Executive Chairman in 2002

• Board member of Bank Negara Malaysia since 1989

• Served as a member of the Capital Issues Committee and the National Economic Consultative Council II (MAPEN II)

OTHER DIRECTORSHIPS• FFM Berhad (Executive Chairman)• Kuok Foundation Berhad• Penerbangan Malaysia Berhad• PPB Oil Palms Berhad (Chairman)

DATUK OH SIEW NAMExecutive Chairman

Member of Remuneration Committee

DATE OF APPOINTMENTDirector - 2 March 1988

Executive Chairman - 1 July 2004

AGE - 67

QUALIFICATIONS AND EXPERIENCE• Bachelor of Arts (Honours) degree in Economics

from the University of Malaya

• Joined Malayan Sugar Manufacturing Company Berhad in 1965 and held several senior managerial positions before being appointed as Director in 1989 and Executive Chairman in 2000

OTHER DIRECTORSHIPS• Jerneh Asia Berhad (Chairman)• Jerneh Insurance Berhad (Chairman)• Kuok Foundation Berhad• Malayan Sugar Manufacturing Co. Bhd

(Executive Chairman) • Malaysian Bulk Carriers Berhad• Tradewinds (M) Berhad

DATO' LIM CHEE WAHDeputy Chairman

DATE OF APPOINTMENTDirector - 2 March 1988

Deputy Chairman - 1 July 2004

AGE - 66

BOARDOF DIRECTORS

13

QUALIFICATIONS AND EXPERIENCE• Bachelor of Arts and Bachelor of Arts (Honours)

degrees from the University of Malaya, Singapore

• Post Graduate Course in Public Administration at Cambridge University, England

• Former Sarawak State Financial Secretary

OTHER DIRECTORSHIPS• Cahya Mata Sarawak Berhad• CMS Steel Berhad (Chairman)• CMS Trust Management Berhad• MISC Berhad• PPB Oil Palms Berhad• Rashid Hussain Berhad

DATO SRI LIANG KIM BANGChairman of Audit and

Remuneration Committees Member of Nomination Committee

DATE OF APPOINTMENT4 January 1995

AGE - 69

QUALIFICATIONS AND EXPERIENCE• Extensive experience and knowledge in

commerce, industry, building as well as trading and has been the Managing Director of Petaling Garden Berhad since 1963

OTHER DIRECTORSHIPS• Petaling Garden Berhad• Malayan United Industries Berhad

ANG GUAN SENGChairman of Nomination Committee

Member of Audit and Remuneration Committees

DATE OF APPOINTMENT8 July 1998

AGE - 67

BOARDOF DIRECTORS

14

QUALIFICATIONS AND EXPERIENCE• Fellow of the Chartered Association of Certified

Accountants, United Kingdom

• Fellow of the Chartered Institute of Management Accountants, United Kingdom

• Member of the Malaysian Institute of Accountants

• Honorary Fellow of the Malaysian Institute of Taxation

• Former Director-General of Inland Revenue, Malaysia

• Former Accountant-General of Malaysia

OTHER DIRECTORSHIPS• Amanah Saham Mara Berhad • Camerlin GroupBerhad • Gamuda Berhad • Gran Asia CorporationBerhad • Jerneh Asia Berhad • Jerneh InsuranceBerhad • K&N Kenanga Berhad • K&N KenangaHoldings Berhad • Kenanga Unit Trust Berhad • Panasonic Manufacturing Malaysia Berhad • PPBOil Palms Berhad • Southern Steel Berhad • TasekCorporation Berhad

YM RAJA DATO' SERI ABDULAZIZ BIN RAJA SALIM

Member of Audit and Nomination Committees

DATE OF APPOINTMENT12 May 2003

AGE - 67

QUALIFICATIONS AND EXPERIENCE• Member of Malaysian Institute of Accountants

• Member of Malaysian Institute of Certified Public Accountants

• Member of Certified Public Accountants, Australia

• Fellow of the Institute of Certified Public Accountants, Singapore

• Was actively involved in FFM Group operations and was Deputy Managing Director of FFM from 1998 to 2000

• Executive Chairman of PPB Oil Palms Berhadfrom 2000 to 2004

OTHER DIRECTORSHIPS• Jerneh Asia Berhad • Jerneh Insurance Berhad • Tradewinds (M) Berhad

TAN YEW JINExecutive Director

Chairman of Risk Advisory Committee

DATE OF APPOINTMENTDirector - 12 May 2001

Executive Director - 25 August 2004

AGE - 64

BOARDOF DIRECTORS

15

QUALIFICATIONS AND EXPERIENCE• Bachelor of Engineering (Honours) in Electrical

Engineering from the University of Malaya

• Held several senior managerial positions in the FFM Berhad Group and is presently the Managing Director of FFM Berhad

OTHER DIRECTORSHIPS• FFM Berhad

TAN GEE SOOI

DATE OF APPOINTMENT28 July 2004

AGE - 61

QUALIFICATIONS AND EXPERIENCE• Bachelor of Arts (Honours) degree from the

University of Malaya, Singapore• Joined the Malaysian Civil Service as Assistant

Secretary in the Prime Minister's Department in 1959 and held the position of Deputy Secretary-General before retiring in 1990

• Former Secretary-General of the Ministry of Housing & Local Government

• Former Secretary-General of the Ministry of National & Rural Development

• Chairman of Malaysian Election Commission from 1990 to 1999

• Independent Non-Executive Director of FFM Berhad from 1999 to 2004

• Former General Manager of Klang Port Authority

OTHER DIRECTORSHIPS• Nil

DATUK HARUN BIN DINMember of Audit Committee


AGE - 71

BOARDOF DIRECTORS

16

QUALIFICATIONS AND EXPERIENCE• Fellow of the Chartered Institute of Logistics

and Transport

• Associate Member of the Institute of Industrial Engineers, Australia

• Served the Lembaga Pelabuhan Klang for 33 years and was the General Manager prior to his retirement in November 1997

• Independent Non-executive Director of FFM Berhad from 1997 to 2004

OTHER DIRECTORSHIPS• Nil

DATUK RAJASINGAM A/LMAYILVAGANAM

Member of Audit Committee


AGE - 63

BOARDOF DIRECTORS

17

DATUK OH SIEW NAM

(refer to page 12)

TAN GEE SOOI

(refer to page 15)QUALIFICATIONS AND EXPERIENCE• Bachelor of Engineering (Honours) degree in

Electrical Engineering from the New South Wales University, Australia

• Masters in Engineering Science from Sydney University, Australia

• Registered Professional Engineer (PE)

• Member of the Institution of Engineers

• Joined MSM in 1974 as an Instrument Engineer involving mainly in the implementation ofautomatic/computer control and mechanization of sugar refinery operations before becoming the Factory Manager in 1988

• Managing Director of Chemquest Group from1993 to 2002

CHUA SAY SINManaging Director of

Malayan Sugar ManufacturingCo. Berhad (MSM)

YEAR OF JOINING PPB GROUP - 1974

AGE - 59

GROUP MANAGEMENT TEAM

18

QUALIFICATIONS AND EXPERIENCE• Bachelor of Engineering (Honours) degree in

Electrical Engineering from the University of Liverpool

• Masters of Business Administration from Brunel, University of London

• Registered Professional Engineer (PE) with theBoard of Engineers

• Member of the Malaysian Institute of Engineers

• 25 years of experience in general management, project management, procurement and management information systems in the Power,Oil & Gas, Water and Environmental EngineeringIndustries

QUALIFICATIONS AND EXPERIENCE• National Certificate in Agriculture from

Monmouthshire Institute of Agriculture

• Higher National Diploma in Business Management from Oxford College of Technology (now known as Oxford Brokes University)

• Member of Royal Agriculture College in Rural Estate Management, United Kingdom

• Joined Dunlop Estates Berhad upon his graduation and served for about 21 years wherehe held the post of Plantations Controller

KHOO ENG MINManaging Director of

PPB Oil Palms Berhad Group


AGE - 64

LEONG YEW WENGManaging Director of Chemquest Sdn Bhd


AGE - 46


19

QUALIFICATIONS AND EXPERIENCE• Member of the Malaysian Institute of

Accountants

• Member of the Malaysian Institute of Certified Public Accountants

• Currently the General Manager of Hillcrest Garden Sdn Bhd

QUALIFICATIONS AND EXPERIENCE• Bachelor of Business Administration degree

(Summa Cum Laude) from the University ofMontevallo, USA

• Oversees the corporate affairs and investor relations of PPB Group as well as the Group’s leisure operations.

EAPEN THOMASExecutive Director of

PPB Hartabina Sdn Bhd


AGE - 58

KOH MEI LEEChief Executive of Golden ScreenCinemas Group & Senior Manager

(Corporate Affairs) of PPB Group Berhad


AGE - 41

GROUP MANAGEMENT

TEAM

20

QUALIFICATIONS AND EXPERIENCE• Bachelor of Economics (Honours) degree in

Business Administration from the University of Malaya

• Oversees the secretarial matters and general administrative functions of PPB Group

QUALIFICATIONS AND EXPERIENCE• Fellow of Institute of Chartered Accountants in

England and Wales

• Member of the Malaysian Institute of Accountants

• Member of the Malaysian Institute of Taxation

• Bachelor of Arts (Honours) degree in Business Studies from the University of West of England, Bristol

• Worked in auditing, merchant banking and stockbroking and a public listed company prior to joining PPB Group Bhd

TAN TEONG BOONCompany Secretary of

PPB Group Berhad


AGE - 59

LEONG CHOY YINGChief Financial Officer of PPB Group Berhad &

Director of FFM Berhad


AGE - 40


22 amusement centre operations24 animal feed milling26 chemicals manufacturing28 cinema operations30 commodity trading32 consumer products distribution34 contract manufacturing36 edible oils refining38 engineering services40 environmental engineering,

waste management & utilities42 flour milling44 glove manufacturing46 livestock farming48 oil palm plantations50 packaging52 property development54 sugar refining

ACTIVITIES22

55

22

BACKGROUND INFORMATION

Established in 1993, Kerry Leisure Concepts Sdn Bhd (KLC) is anequal joint venture between PPB Leisure Holdings Sdn Bhd andKerry Leisure Concepts Pte Ltd, Singapore. KLC operates one ofthe largest chains of family entertainment centres in Malaysiaknown as “Fireworks Fun Centre” and has a total of six centreslocated in Klang Valley (2), Johor Bahru (3) and Sungei Petani (1)with sizes ranging from 4,500 sf to 10,000 sf.

KLC also operates a children playland and 40 kiddie rides locatedin various shopping complexes, supermarkets and hypermarketsin Klang Valley, Johor Bahru, Sungei Petani and Penang.

Amongst the rides and games available at all Fireworks FunCentres and Children Playlands in the country are:-

• Simulator games• Dance / Music games• Redemption games• Carnival games• Children interactive games• Touch screen games• Video simulator games• Kiddie rides• Ballpools and Playports• Bumper cars

AMUSEMENTCENTRE OPERATIONS

23

MAJOR ACTIVITIES IN 2005

In 2005, KLC upgraded the video simulators, redemption and carnival games at its various centres to offercustomers the latest games. In the same year, KLC ceased its children playland operation at Tesco, Klang.

EXPANSION/FUTURE PLANS

KLC will be opening two new Fireworks Fun Centres located in Shah Alam and Johor Bahru by mid-2006.

KLC is constantly looking for viable locations specifically in the Klang Valley and Penang for new centresand plans to expand its playland and kiddie ride operations in new hypermarkets.

24


FFM Group in which PPB has 100% equity interest, ranks as oneof the biggest feed millers in Malaysia and currently operates sixfeed mills in Peninsular and East Malaysia. The mills arestrategically located in Prai, Port Klang, Pasir Gudang, KotaKinabalu and Kuching with a combined production capacity of125 mt per hour.

The Group manufactures over 300,000 mt of animal feedsannually which accounts for approximately 10% of the localmarket requirement.

FFM’s animal feed is marketed under its own brand name“Friendship” and is available in mash, crumble and pelletexpanded form. The products are categorized into:-

• Broiler feeds• Domestic broiler feeds• Poultry feeds• Duck feeds• Ruminant feeds• Quail feeds• Rabbit feeds

ANIMALFEED MILLING

25

FFM’s subsidiaries which are involved in the animal feed business are :-

• JBFM Feedmill Sdn Bhd• FFM Feedmills (Sabah) Sdn Bhd• FFM Feedmills (Sarawak) Sdn Bhd• Johor Bahru Flour Mill Sdn Bhd


In December 2005, a new feed mill with a mixing and pelletising line at Pulau Indah, Port Klang wascompleted.

EXPANSION / FUTURE PLANS

FFM plans to complete the relocation of its feed pelletising lines from South Port to Pulau Indah by the2nd Quarter of 2006.

26


Asia Pacific Microspheres Sdn Bhd [APM], a wholly-ownedsubsidiary of Chemquest Sdn Bhd, is the only producer ofphenolic thermoset microspheres in the world. These productsare used for specialty applications in the aerospace, automobile,marine, defense, electronic, coating and adhesive sectors. APMalso produces contact adhesive resins for the local market aswell as for export to North America, South America, Europe andthe Asia Pacific region.

Malayan Adhesives & Chemicals Sdn Bhd (MAC), a 96.86%subsidiary of Chemquest, manufactures adhesives, resins,additives and formaldehyde, which are marketed to the localwood-based and paper industries.

The manufacturing plants of both APM and MAC are located inShah Alam, Selangor. Both companies received the ISO 9002certification which was upgraded to the ISO 9001-2000.

CHEMICALSMANUFACTURING

27


A new joint venture company, JER Envirotech Sdn Bhd (JESB), in which APM has 50% equity interest wasestablished in April 2005 to manufacture wood-plastic composites for re-export to North America. Theproducts from JESB are used in the housing, transportation, automotive parts and household applianceindustries.

During the year, MAC expanded its resin production capacity by 56% with the addition of a productionkettle to produce resins for the MDF and chipboard industries.

In December 2005, APM acquired an additional 45% equity interest in MAC bringing its total equity interestto 96.86% in MAC. It is anticipated that the balance of 3.14% will be acquired in 2006 to make MAC awholly-owned subsidiary of APM.


To meet with expanded demand for wood-plastic composites, JESB will double its production capacity inmid-2006 with the installation of a second line and has plans to install a third line towards the end of2006.

28


Golden Screen Cinemas [GSC], a 54.2% subsidiary of PPB LeisureHoldings Sdn Bhd, currently operates the largest cinema chain inMalaysia with a total of 108 screens at 18 locations, all of whichare located in prime sites in major cities nationwide.

GSC is also the top distributor of Chinese and independentEnglish films in the country.

Locations No. of Screens No. of Seats1. Mid Valley Megamall, Kuala Lumpur 18 2,8992. One Utama New Wing, Petaling Jaya 13 2,1683. Gurney Plaza, Penang 12 1,8334. Berjaya Times Square, Kuala Lumpur 9 1,5705. The Summit, USJ 7 1,2516. Pelangi Leisuremall, Johor Bahru 5 2,3617. IOI Mall, Puchong 5 1,3178. Kuantan Megamall, Kuantan 5 9489. Terminal 1, Seremban 4 1,08610. Cheras Leisuremall, Kuala Lumpur 4 1,42311. Shaw Centrepoint, Klang 4 1,00612. Mahkota Parade, Malacca 4 80913. GSC, Kota Kinabalu 3 1,64814. Ipoh Parade, Ipoh 3 80315. Capitol Cinema, Selayang 3 75016. Plaza, Bukit Mertajam 3 70717. Central Square, Sungei Petani 3 66618. Summit Parade, Batu Pahat 3 678

Total 108 23,923

CINEMAOPERATIONS

29


GSC together with its equal joint venture partner, Berjaya Times Square Sdn Bhd, opened a 9-screencineplex at Berjaya Times Square, Kuala Lumpur on 27 January 2005. The cineplex has a total seatingcapacity of 1,570 and is the first to introduce a 48-seater Premiere Class Hall in Klang Valley. The PremiereHall features wide-backed twin seats with generous leg room to provide viewing comfort to customers.

On 23 June 2005, GSC opened its 18th cineplex at 1 Utama (New Wing) in Petaling Jaya. The 13-screencineplex is furnished with 2,168 seats, a 30-seater Gold Class, International Screens, THX halls and specialfacilities for wheelchair bound patrons. GSC 1 Utama seats have been custom designed with comfortablehigh-back seats and generous leg room for maximum comfort.


GSC targets to open three new cineplexes in Klang Valley and Kota Kinabalu in the next 2 years which willfurther reinforce its long-term commitment in the film industry in Malaysia.

In its aim to enhance the cinema going experience for its patrons, GSC continually upgrades its cinemafacilities and introduces innovative products.

30


Kuok Oils & Grains Pte Ltd (KOG), a 28% associate of PPB Group,is a commodity trading cum investment holding company whichhas interest in edible oils and grains processing plants in China,Vietnam, Indonesia, Germany, the Netherlands and Bangladesh.

KOG actively trades in palm oil, soyabean oil, rapeseed oil,coconut and palm kernel oil as well as grains namely, soyabeans,canola and maize.

KOG Group is involved in the processing of edible oils and thedistribution and marketing of these oils in bulk and in consumerpacked oil products.

COMMODITYTRADING

31


During the year, KOG Group built its presence in Europe through the establishment of an edible oilsprocessing facility in the Netherlands and the improvement of an existing refinery cum specialty fats plantin Germany.


KOG Group plans to expand its existing operations in China, Vietnam and Europe.

32


FFM Marketing Sdn Bhd (FMSB), a wholly-owned subsidiary of FFMGroup, was set up in 1993 to market a wide range of fast-movingconsumer products under its own brand names as well as otherlocal and international brands.

In addition, FMSB is also responsible for marketing productsproduced by the FFM Group such as flour, feed, day-old-chicksand table eggs.

FMSB owns eleven (11) warehouses located in Prai, Ipoh, Sg.Buloh, Melaka, Kuantan, Johor Bahru, Kota Bharu, Kuching, Sibu,Kota Kinabalu and Sandakan covering a total warehousing area of288,000 sq. ft.

Others• Flour (in 25kg bag and in bulk)• Feed (in bags and in bulk)• Day-old-chicks• Table eggs (in 30’s)

FFM Group's own brands/products are as follows : -

Fast-moving consumer goods (consumer packs)• Anchor - packaged flour• Blue Key - packaged flour• Muhibah - packaged flour• Blue Team - shortening and margarine• Neptune - blended cooking oil• Seri Murni - double fractionated 100% palm based vegetable oil• Krystal - 100% pure corn oil / sun flower oil / canola oil• Marina - canned sardines / mackerels / tuna / baked beans / peas• Marina - frozen food• Seri Murni - premium / standard eggs• Seri Murni – curry pastes• Shamu - canned nata-de-coco in syrup, pineapple juice & jelly cups

CONSUMERPRODUCTS DISTRIBUTION

33

FMSB’s external agency product portfolio consists of :

• Johnson & Johnson - baby care / personal care• Clorox - liquid bleach • Bluebell - household care and floor care• Guard - shoe care• Glads - wraps / bags• Spin - detergents• Blacktop - insecticide/mosquito coils


In April 2005, FMSB took over the distribution of a new energy drink and launched a range of “OrangKampung” herbal energy drinks with two major selling variants, “Orang Kampung Tongkat Ali” and “OrangKampung Kacip Fatimah” drinks targeted to the Malay market.


Whilst the implementation of the new RM4.0 million Movex Java business solutions is still in progress, FMSBhad successfully introduced the hand-held PDA’s for the van sales team in Johor Bahru, Malacca and KualaLumpur to further improve their efficiency and ensure better monitoring and control.

FMSB will continue to improve its process flow and supply chain management to enhance its position inthe marketing and distribution of fast moving consumer goods.

FMSB is also exploring opportunities to expand its frozen / fresh food business which is growing rapidly.

• Star Brand - culinary essence and colourings• Lingham - chilli sauces• V-Soy - soyabean milk• Nekta - concentrated / ready to drink

Kiwi Fruit Juice• Orang Kampung - herbal energy drinks

34


Products Manufacturing Sdn Bhd (PM), a 70% subsidiary ofChemquest Sdn Bhd, was acquired by PPB Group in 1993 toprovide contract manufacturing services for cosmetics, toiletriesand household products industries.

PM’s factory located at Jalan Kepong, Kuala Lumpur is equippedwith high-tech machineries and a qualified workforce. PMproduces a variety of products such as creams, cold and hot mixliquids, lotions, gels, powders and pastes for the hair care, skincare, baby care, body care, household and car care market.

PM has been accredited with the Good Manufacturing Practicestatus since 1995 by Malaysia’s Ministry of Health as its factorycomplies with the requirements of the Drug and CosmeticsRegulations Act, 1994.

CONTRACTMANUFACTURING

35


There were no major activities during the year.


PM is constantly seeking business opportunities to expand its operations and to venture into other relatedmarkets.

36


PGEO Group Sdn Bhd [PGSB] is a major edible oils refiner andexporter in Malaysia, processing more than 3 million mt of edibleoils per year.

PGSB and its associate operate six refineries in Malaysia with acombined production capacity of about 12,780 mt per day.About 90% of the Group’s production is exported to India, China,Middle East, Pakistan, EU countries, USA and Russia whilst thebalance is sold locally.

PGSB Group’s activities are vertically integrated from theconversion of crude oils into refined oil products to productionof shortening and hydrogenated products, cocoa butter replacersand other specialty fats which are marketed in bulk, drums andconsumer packs.

The location of PGSB’s operations are set out below:-

Edible Oils Refining - Prai, Lumut, Pasir Gudang, Bintulu, Sandakan and Lahad Datu

Dry Fractionation - Prai, Lumut, Pasir Gudang, Bintulu, Sandakan and Lahad Datu

Palm Kernel Crushing - Bintulu, Sandakan and Lahad Datu

Hydrogenation - Pasir Gudang

Texturising - Pasir Gudang

Palm Kernel Oil Fractionation - Pasir Gudang

Calcium Salts Manufacturing - Pasir Gudang

Biomass-fired Steam - LumutGenerator Plant

EDIBLE OILS REFINING

37

The Group’s equity interest in PGSB’s subsidiaries and associates are as follows :-

Group’s Equity Interest• PGEO Edible Oils Sdn Bhd (PGEO) 100%• Sandakan Edible Oils Sdn Bhd (SEO) 100%• Bintulu Edible Oils Sdn Bhd (BEO) 100%• PGEO Energy Sdn Bhd (PESB) 100%• SEO Energy Sdn Bhd 100%• Green Universe Sdn Bhd 100%• Volac Ingredients Sdn Bhd 51%• Lahad Datu Edible Oils Sdn Bhd 45%• KOG Edible Oils BV, Netherlands 35%


In February 2005, PESB completed the construction of a Biomass-fired Steam Generator Plant in Lumut.The biomass renewable energy production reduces the use of mineral fuel oil and production cost.

BEO expanded the production capacity of its kernel crushing plant in Bintulu in April 2005 and acquired a10-acre land also in Bintulu in June 2005 for expansion purposes.

In the year, PGEO expanded the production capacity of its hydrogenation plant and constructed the 3rddry fractionation plant for the production of specialty fats. Both plants are located in Pasir Gudang.

SEO acquired 12 acres of industrial land in Sandakan in June 2005 for the expansion of its manufacturingfacilities.


For 2006, PGEO Group will be carrying out several upgrading works to ensure that its productiontechnology is ahead or at least in tandem with global standards and its products are in compliance withcurrent and future customer requirements. PGEO Group’s second renewable energy production project inSandakan will be completed in mid-2006.

The Group is constantly exploring new opportunities in the oleochemical and biodiesel industries and willcontinue to emphasize on research and development to identify other downstream or value addedproducts that will create new markets for the Group.

38


Minsec Engineering Services Sdn Bhd (MES), a 100% subsidiary ofChemquest Group, provides services in engineering design,equipment fabrication, installation, plant operation, trainingand maintenance to clients in Malaysia and Asia Pacific.

MES is also involved in turnkey construction of palm oil and sugarmills, bulking and storage facilities, factory buildings and ethanoland formalin plants in Malaysia and Indonesia.

MES core business lies in the construction of palm oil mills.Todate, MES has constructed numerous mills in East Malaysia andsuccessfully completed several large expansion and refurbishingworks in the agricultural sector.

ENGINEERING SERVICES

39


The major projects undertaken by MES during the year with a total contract value of RM103 million areas follows :-

• Construction of a warehouse building and upgrading and expansion works of a flour mill for FFM Berhadat Pulau Indah;

• Upgrading and expansion works at Central Sugar Refinery;• Civil works for a new kernel crushing plant for Sandakan Edible Oils Sdn Bhd in Sandakan, Sabah;• Construction of a 60 tph expandable to 120 tph palm oil mill for RH Selangau Palm Oil Mill, Sarawak;• Construction of a 60 tph expandable to 120 tph palm oil mill for PT Mustika Sembuluh in Sampit,

Kalimantan;• Supply sugar refinery equipment to PT Permata Dunia Sukses Utama, Indonesia; and • Various upgrading and expansion works for oil palm plantations in Sabah and Sarawak


MES plans to supply co-generation and composting plants for palm biomass projects.

40


Chemical Waste Management Sdn Bhd [CWM], a 99% subsidiary ofChemquest Group is a leading service provider for waterresource engineering, wastewater / sewage treatment and solidwaste management.

CWM provides the following services :-

• Build, commission and manage various water treatment facilities for household and industrial consumption.

• Construct wastewater treatment plants for various types of industries.

• Construct sewage treatment plants for municipal authorities.• Infrastructure development.• Collect and dispose industrial and residential solid waste on

large scale for various municipalities in Malaysia.

To date, CWM has successfully commissioned more than 20 waterprojects throughout Malaysia and 50 wastewater treatmentplants for various types of industries.

ENVIRONMENTALENGINEERING, WASTE

MANAGEMENT & UTILITIES

41


For 2005, CWM completed four projects with a total contract value of RM109.0 million as follows :-

• Construction of a pumping station for the Bukit Badong Distribution and Supply System;• Replacement and upgrading of transformers for the Raw and Treated Water Pumping Stations at the

Sungai Semenyih Water Treatment Plant;• Upgrading and rehabilitation of the Chemical Plant at the Sungei Semenyih Treatment Plant; and• Desludging system at the Sungai Semenyih Water Treatment Plant.

CWM currently has five on-going projects with a total contract value of RM150.0 million and has secured twoDesign and Build projects in Penang with a total contract value of RM114.0 million during the year as follows :-

• Potable ultra-filtration treatment plant in Bukit Pancor which will be the first municipal plant in Malaysia using membrane technology; and

• Sewage treatment plant in Jelutong, reputed to be the largest sewage treatment plant in Malaysia and the largest sequencing batch reactors (SBR) plant in Asia.


CWM will continue its efforts to seek opportunities to expand its range of services, explore new marketslocally and overseas, harness new technologies as well as leverage on strategic partnerships forsustainable growth.

42


FFM Berhad (FFM) commenced its wheat milling operations in1966 with a single 150 mt per day wheat flour mill in South Port,Klang. Today, FFM Group has grown to become the largest flourmiller in Malaysia supplying more than 40% of the country’swheat flour requirements. Its milling complexes are strategicallylocated in South Port, Port Klang; Pasir Gudang, Johor Bahru;Pulau Indah, Port Klang; Kuching, Sarawak; and Vietnam with atotal milling capacity of 2,430 mt per day.

FFM expanded its operations overseas to Vietnam through its100% subsidiary, Vietnam Flour Mills Ltd, which operates a 400-mt flour mill in My Xuan, Vung Tau Province in 2001. The flourproduced by the plant is presently marketed under the brandnames of Red Key, Blue Key and Twin Globe.

In 2004, FFM Group acquired 43.35% equity interest in KerryFlour Mills Limited which enabled FFM Group to expand its wheatflour milling activity to Thailand.

Products produced for the domestic market include:-

• Wheat Flour – Bread, Noodles, Biscuits, Cakes, All-Purpose• Specialty Wheat Flour Products – Semolina, Special Wholemeal• Other Wheat Specialty Products – Wheat, Food Bran, Wheat Germ• Bread Improvers & Premixers – Cake Donut, Yeast-Raised Donut

FLOUR MILLING

43

FFM’s subsidiaries and associate which are engaged in flour milling are as follows :-

• Johor Bahru Flour Mill Sdn Bhd• FFM Flour Mills (Sarawak) Sdn Bhd• Vietnam Flour Mills Limited• Kerry Flour Mills Limited


In November 2005, FFM commenced operations of its 2nd flour mill with a daily wheat milling capacity of500 mt at Pulau Indah bringing the total milling capacity at Pulau Indah to 1,000 mt.


FFM plans to expand its flour milling operations and intends to construct a 360 tpd wheat flour mill in Prai,Province Wellesley.

44


PT Healthcare Glovindo [Glovindo], a 100% subsidiary ofChemquest Group, operates a latex examination glove factory inMedan, Sumatra with seventeen dipping lines and an annualproduction capacity of 900 million pieces.

Glovindo produces pre-powdered and powder-free latexexamination gloves for medical and industrial use. All productsare exported mainly to the United States, Europe and LatinAmerica. Glovindo’s own brand known as “MEDIQUEST” is soldto Portugal and Greece.

In 1997, Glovindo received the ISO 9002 certification for itsproducts.

PRODUCTION RESULTS

NO. OF GLOVES

2005 2004

Total Production 1,165 million 686 million

GLOVEMANUFACTURING

45




Glovindo is studying the possibility of installing a biomass boiler at its factory to augment the supply offuel oil. An additional three production lines will be constructed once the supply of fuel and electricitypower have been stabilized.

46


Established in 1993, FFM Farms Sdn Bhd (FFM Farms), a wholly-owned subsidiary of FFM Berhad, currently operates a table egglayer farm in Trong, Perak and two broiler breeder farms locatedat Sua Betong, Negeri Sembilan and Gurun, Kedah.

The two breeder farms have a total production capacity of 3million broiler day-old-chicks per month. Quality day-old-chicksare produced through a combination of good farming practices,hatchery management and usage of good breeds.

Its layer farm is located on a 550-acre site and is capable ofproducing 20 million table eggs per month. Some of these aremarketed under the “Seri Murni” premium eggs label.

FFM Farms also produces an organic fertilizer using pure chickenmanure that has been completely composted. The fertilizer issold under the “Origanic” brand name.

LIVESTOCK FARMING

47


Both of FFM Farms in Gurun and Trong received accreditation from the Department of Veterinary Services,Ministry of Agriculture under the “Skim Amalan Ladang Ternakan (SALT)” for good animal husbandrypractice, bio-security and infrastructure, flock health management and disease control in 2005.

FFM Farms also launched the sale of “Seri Murni Vitamin E Enriched” premium eggs in April 2005.


FFM Farms will continue to source for suitable lands for the expansion of its farming operations. Plans areunderway to increase the capacity of its organic fertilizer production in Trong Layer Farm. FFM Farms willbe introducing smaller 2 kg pack “Origanic” organic fertilizer to nurseries and home gardens.

In line with the Group’s strategy to invest in downstream activities for synergistic growth, FFM is planningfor a meat processing plant in Pulau Indah for which approval for building plans is being processed by thevarious departments of Majlis Perbandaran Klang.

48


Oil palm plantation operations represent one of the corebusinesses of the Group and they are held through its 55.6%subsidiary, PPB Oil Palms Bhd (PPBOP).

PPBOP produces FFB in its plantations and also purchases outsideFFB which are processed at its nine mills located in Sabah (5),Sarawak (3) and Indonesia (1) with a total milling capacity of 2.0million mt of FFB per annum.

AREA STATEMENT - 2005(All figures in ha) East Malaysia Indonesia Total

2005 2004 2005 2004 2005 2004Total Area 80,017 80,017 283,221 113,970 363,238 193,987Total Plantable Area 68,152 67,083 224,716 89,150 292,868 156,233Mature 54,456 53,829 9,160 7,948 63,616 61,777Immature 8,152 7,221 14,859 10,113 23,011 17,334

PRODUCTION - 2005East Malaysia Indonesia Total

Estates 2005 2004 2005 2004 2005 2004FFB (‘000 mt) 1,279.1 1,143.9 162.8 124.6 1,441.9 1,268.4Yield per mature ha (mt) 23.5 21.2 17.8 15.7 22.7 20.5

MillsCPO (‘000 mt) 357.9 307.1 37.3 31.3 395.2 338.4OER (%) 21.9 21.7 21.8 22.4 21.9 21.7KER (%) 4.7 4.5 4.2 4.4 4.6 4.5

AVERAGE SELLING PRICES2005 2004

Crude Palm Oil (RM/tonne) Nett 1,349 1,610Palm Kernel Oil (RM/tonne) Nett 950 971Fresh Fruit Bunches (RM/tonne, ex-estate) 270 331

OIL PALM PLANTATIONS

49

AGE PROFILE OF PALMS AS AT 31 DECEMBER 2005

Age of Palms East Malaysia Indonesia Totalha ha ha %

Immature - Up to 3 years 8,152 14,859 23,011 26.6Young - 4 to 6 years 8,889 3,925 12,814 14.8Prime ] 7 to 10 years 18,150 4,451 22,601 26.1

] 11 to 14 years 16,872 784 17,656 20.4] 15 to 20 years 9,267 - 9,267 10.7

Old Above 20 1,279 - 1,279 1.5

Total 62,608 24,019 86,627 100.0


In 2005, PPBOP acquired “Izin Lokasi” for 169,251 ha of land in Central Kalimantan for oil palm cultivationincreasing its total land bank in Central Kalimantan to 273,005 ha. The total area is subject to issue offinal “Hak Guna Usaha” from the authorities.

During the first half of 2005, PPBOP commissioned its ninth CPO mill of 40 tph at Sri Kamusan, Sabah andit is the first PPBOP mill to incorporate a composting plant which eliminates the discharge of treated milleffluent into waterways like conventional mills.

PPBOP commenced the construction of two CPO mills during the year at Ribubonus estate in Sabah andMustika Sembuloh estate in Central Kalimantan. Both mills are expected to be operational before end-2006.


For the next five years, PPBOP will focus on its expansion programme in Central Kalimantan where about20,000 to 25,000 ha of oil palm per annum will be developed to provide better economy of scale for itsoperations in Central Kalimantan.

50


CONSUMER PACKAGINGPGEO Edible Oils Sdn Bhd [PGEO] ventured into consumerpackaging in 1986 with the packing of edible oils into tin cansand PVC bottles. Today, PGEO owns filling lines to pack bottlesand containers of various sizes ranging from 250 ml of PETbottles to 25 kg HDPE containers. The packed products are eitherexported to overseas markets or distributed locally under“Neptune” and “Seri Murni” brands.

STEEL DRUM MANUFACTURINGPGEO manufactures 210-litre steel drums for local and exportmarkets. It operates two drum assembly lines with a combinedcapacity of 800 drums per hour. The drums are internally unlinedor coated with epoxy and externally sprayed with stoving paint.

POLYBAG MANUFACTURING Tego Sdn Bhd (Tego), a 79.9% subsidiary of FFM Bhd, is theleading producer of commercial polypropylene (PP) andpolyethylene (PE) bags.

Its manufacturing facilities occupy a total of 16 acres ofindustrial land in the Senawang Industrial Estate and SenawangIndustrial Park in Negeri Sembilan. Its subsidiary, Tefel PackagingIndustries Co Ltd is located on a 4-acre site in Yangon, Myanmar.

PACKAGING

51

Tego manufactures the following products for the local and export market:-

• Woven polypropylene (PP) and polyethylene (PE) bags• PP and PE fabrics• Technical fabrics• Kraft paper bags with PP/PE lamination• PP rope and sewing yarn• FIBC bulker bags• Geotextiles• Weedtex• Webbing• PE blown film products• High tenacity PP/PE multifilament yarn

In 1995, Tego received the ISO 9002:1994 Quality Management Systems certification which was upgradedto ISO 9001:2000 in year 2002.




In April 2006, Tego is expected to complete the expansion works of its Myanmar plant which will increaseproduction capacity of FIBC bags to meet customers’ demand.

52


PPB Hartabina Sdn Bhd (PPBH), a wholly-owned subsidiary of PPBis principally involved in residential and commercialdevelopment as well as property management.

Currently, PPBH is developing 52.6 acres of prime hill land inTaman Segar, Cheras and manages its own shopping complex“Cheras LeisureMall”.

Other active property companies under PPB Group includeSeletar Sdn Bhd (Seletar), Cathay Screen Cinemas Group (CSC)and Shaw Brothers (M) Sdn Bhd (SBM) in which PPB has 100%,66.2% and 34% equity interest respectively.

CSC and SBM are owners of several prime commercial propertiesin the country.

PPB Group’s major commercial properties are as follows:

Lettable Average Monthly Owners Area(sf) Rental (RM/sf) Occupancy (%)

Cheras Leisuremall PPBH 260,960 5.76 100Cheras Plaza PPBH 101,504 1.26 87Damansara Jaya shophouses CSC 50,450 1.63 100Shaw Centrepoint SBM 230,785 3.91 97Shaw Parade SBM 156,419 1.71 95

PROPERTYDEVELOPMENT

53


During the year, PPBH completed the construction of 78 units of apartments known as “Segar Courts” inTaman Segar, Cheras which will be handed over to the purchasers by May 2006.

Seletar launched its Phase 2 residential development in Bedong, Kedah comprising 30 units of single-storeyterrace Type A1 in April 2005.


PPBH will be launching a high-end residential development in Bukit Tengah, Seberang Prai in 2006. In thesame year, PPBH will also be launching its 38 units of bungalows located on a 20-acre prime land in BukitSegar, Cheras.

Besides actively developing its current land bank and looking for new land banks, PPBH provides projectmanagement services to the Group for their development projects.

54


Malayan Sugar Manufacturing Company Bhd (MSM), a wholly-owned subsidiary of PPB, operates the region’s largest sugarrefinery which is located at Prai, Province Wellesley with amelting capacity of 2,000 mt of raw sugar per day. The millproduces various types of sugar for industrial and householdconsumption for the domestic and overseas markets as follows :-

Industrial products Household products

P1, P1M, PIS, PXX, IG,Caster, PF, P2, P3, P3H,P4, PB, Icing

Coarse granulated sugar,fine granulated sugar,caster sugar, cube sugar,sachet sugar, icing sugar,soft brown sugar

Kilang Gula Felda Perlis Sdn Bhd (KGFP), a 50:50 joint venture between PPB and FELDA, operates an integratedsugar mill to process sugar cane from the combined plantations of approximately 9,000 hectares in Chuping,Perlis. The mill has a milling capacity of 5,500 mt of cane per day and a melting capacity of 650 mt of raw sugarper day.

At present, both MSM and KGFP produce more than 650,000 mt of refined sugar per annum and supply about 60%of the domestic sugar requirements.

SUGARREFINING

55


MSM continuously upgrades its operations to increase production efficiency and during the year investedRM12.5 million to increase its refined sugar storage capacity, improve its filtration capacity and upgradeother plant and machineries.


For 2006, MSM plans to spend RM19.8 million to increase its melting capacity and improve its packingoperations.

56

Quarter 1st 2nd 3rd 4th 12 monthsFinancial period ended 31.3.05 30.6.05 30.9.05 31.12.05 31.12.05 31.12.04 Change(All figures in RM million)

INCOME STATEMENTRevenue 2,584.422 2,732.364 2,503.876 2,867.228 10,687.950 10,999.682 -2.83%Profit from operations 136.471 105.669 124.509 150.129 516.778 601.970 -14.15%Profit before taxation 154.700 160.475 150.518 162.949 628.642 733.508 -14.30%Profit after taxation 108.731 116.917 117.887 124.700 468.235 549.716 -14.82%Net profit for the period 86.981 101.640 97.883 108.075 394.579 400.664 -1.52%

BALANCE SHEETCurrent assetsInventories 818.394 801.319 936.454 947.886 947.886 950.604 -0.29%Trade receivables 530.481 555.689 513.293 375.157 375.157 412.929 -9.15%Cash, bank balances and deposits 605.095 652.092 652.685 752.839 752.839 537.728 40.00%Others 350.527 372.601 349.174 383.068 383.068 445.820 -14.08%Total current assets 2,304.497 2,381.701 2,451.606 2,458.950 2,458.950 2,347.081 4.77%

Current liabilitiesTrade payables 347.851 309.573 267.000 239.258 239.258 277.927 -13.91%Short term bank borrowings 254.882 306.502 384.679 367.081 367.081 358.232 2.47%Others 242.873 246.462 237.839 262.625 262.625 296.443 -11.41%Total current liabilities 845.606 862.537 889.518 868.964 868.964 932.602 -6.82%

Non-current assetsProperty, plant and equipment 2,671.899 2,707.977 2,709.262 2,780.267 2,780.267 2,642.271 5.22%Associates 601.579 608.837 619.109 633.826 633.826 598.741 5.86%Jointly controlled entities 38.638 38.736 39.153 40.151 40.151 38.867 3.30%Other investments 452.248 416.066 414.290 413.442 413.442 452.320 -8.60%Goodwill 34.163 34.286 33.105 32.413 32.413 34.687 -6.56%Others 21.239 9.872 10.918 10.264 10.264 19.945 -48.54%Total non-current assets 3,819.766 3,815.774 3,825.837 3,910.363 3,910.363 3,786.831 3.26%

Non-current and deferred liabilitiesLong-term bank borrowings 156.444 165.322 158.939 149.438 149.438 149.751 -0.21%Others 317.878 322.133 326.837 332.102 332.102 312.076 6.42%Total non-current and deferred liabilities 474.322 487.455 485.776 481.540 481.540 461.827 4.27%

Minority interest 801.543 789.614 792.450 803.656 803.656 779.395 3.11%

GROUPFINANCIAL HIGHLIGHTS

57

GROUPFINANCIAL

HIGHLIGHTS

Quarter 1st 2nd 3rd 4th 12 monthsFinancial period ended 31.3.05 30.6.05 30.9.05 31.12.05 31.12.05 31.12.04 Change(All figures in RM million)

Share capital 592.750 1,185.500 1,185.500 1,185.500 1,185.500 592.750 100.00%Reserves 3,410.042 2,872.369 2,924.199 3,029.653 3,029.653 3,367.338 -10.03%Shareholders' equity 4,002.792 4,057.869 4,109.699 4,215.153 4,215.153 3,960.088 6.44%

RATIOS #Return on net assets (pre-tax) (%) 3.22 6.50 9.50 12.53 12.53 15.48Return on net assets (post tax) (%) 2.26 4.65 7.01 9.33 9.33 11.60 Return on equity (%) 2.17 4.65 6.97 9.36 9.36 10.12 Earnings per share * (sen) 7.34 15.91 24.17 33.28 33.28 37.90 -12.19%Profits before tax over revenue (%) 5.99 5.93 5.95 5.88 5.88 6.67 Interest coverage (times) 41.59 41.93 43.33 41.53 41.53 49.59 -16.25%Current ratio (times) 2.73 2.76 2.76 2.83 2.83 2.52 12.30%Long-term debt/Equity (%) 3.91 4.07 3.87 3.55 3.55 3.78 Net assets per share * (RM) 4.05 4.09 4.14 4.23 4.23 4.00 5.75%Net dividend per share * (sen) 0.00 3.60 3.60 14.40 14.40 11.85 21.52%

STOCK MARKET INFORMATIONShare price * (RM) 3.35 3.72 4.24 4.16 4.16 3.40 22.35%Market capitalisation (RM million) 3,971 4,410 5,027 4,932 4,932 4,031 22.35%PE ratio (times) 11.42 11.69 13.16 12.50 12.50 8.97

# Performance ratios are based on cumulative quarter to-date.* The comparative figures have been adjusted for the effect of the 1 for 1 Bonus Issue which was completed on

22 June 2005.

58

5-YEARGROUP STATISTICS

Year ended 31 December(All figures in RM million) 2001 2002 2003 2004 2005

INCOME STATEMENTRevenue 5,629.093 7,857.980 9,319.768 10,999.682 10,687.950 Profit from operations 235.119 377.813 554.572 601.970 516.778 Profit before taxation 321.566 500.747 707.360 733.508 628.642 Profit after taxation 248.262 378.492 536.882 549.716 468.235 Net profit for the year 170.302 242.996 371.253 400.664 394.579

BALANCE SHEETCurrent assetsInventories 590.229 729.666 810.429 950.604 947.886 Trade receivables 369.025 368.193 423.760 412.929 375.157 Cash, bank balances and deposits 492.913 478.532 724.579 537.728 752.839 Others 411.279 392.051 333.583 445.820 383.068 Total current assets 1,863.446 1,968.442 2,292.351 2,347.081 2,458.950

Current liabilitiesTrade payables 260.343 266.600 296.295 277.927 239.258 Short term bank borrowings 469.605 383.244 390.942 358.232 367.081 Others 272.550 283.750 294.981 296.443 262.625 Total current liabilities 1,002.498 933.594 982.218 932.602 868.964

Non-current assetsProperty, plant and equipment 2,375.236 2,384.123 2,478.584 2,642.271 2,780.267 Associates 675.320 687.849 535.668 598.741 633.826 Jointly controlled entities 0.671 0.314 27.547 38.867 40.151 Other investments 242.384 236.655 412.098 452.320 413.442 Goodwill 39.073 37.093 34.779 34.687 32.413 Others 15.153 23.859 24.129 19.945 10.264 Total non-current assets 3,347.837 3,369.893 3,512.805 3,786.831 3,910.363

Non-current and deferred liabilitiesLong-term bank borrowings 32.824 78.148 83.877 149.751 149.438 Others 68.778 252.362 268.313 312.076 332.102 Total non-current and deferred liabilities 101.602 330.510 352.190 461.827 481.540

Minority interest 1,331.655 1,372.859 1,482.721 779.395 803.656

59

5-YEARGROUP STATISTICS

Year ended 31 December(All figures in RM million) 2001 2002 2003 2004 2005

Share capital 490.623 490.623 490.623 592.750 1,185.500 Reserves 2,284.905 2,210.749 2,497.404 3,367.338 3,029.653 Shareholders' equity 2,775.528 2,701.372 2,988.027 3,960.088 4,215.153

CASHFLOW POSITIONOperating 310.143 332.512 527.441 442.849 592.734 Investing (192.439) (80.867) (137.036) (488.770) (213.356)Financing (100.506) (270.227) (140.809) (149.525) (160.977)Net increase/(decrease) in cash and 17.198 (18.582) 249.596 (195.446) 218.401

cash equivalents

RATIOSReturn on net assets (pre-tax) (%) 7.83 12.29 15.82 15.48 12.53Return on net assets (post tax) (%) 6.04 9.29 12.01 11.60 9.33 Return on equity (%) 6.14 9.00 12.42 10.12 9.36 Earnings per share * (sen) 17.36 24.77 37.84 37.90 33.28 Profits before tax over revenue (%) 5.71 6.37 7.59 6.67 5.88 Interest coverage (times) 24.34 37.10 62.60 49.59 41.53 Current ratio (times) 1.86 2.11 2.33 2.52 2.83 Long-term debt/Equity (%) 1.18 2.89 2.81 3.78 3.55 Net assets per share * (RM) 4.19 4.15 4.56 4.00 4.23 Operating cashflow per share * (RM) 0.32 0.34 0.54 0.42 0.50

STOCK MARKET INFORMATIONShare price * (RM) 1.66 1.97 3.28 3.40 4.16 Market capitalisation (RM million) 1,629 1,933 3,214 4,031 4,932PE ratio (times) 9.56 7.95 8.67 8.97 12.50

DIVIDENDGross dividend per share * (sen) 8.75 23.25 12.50 15.00 20.00 Net dividend per share * (sen) 7.00 21.50 10.26 11.85 14.40 Payout ratio of Group's earnings (%) 40.33 86.82 27.12 35.06 43.26 Payout ratio of Company's earnings (%) 49.09 97.57 72.27 75.40 115.90 Gross dividend yield (%) 5.27 11.80 3.81 4.41 4.81 Net dividend yield (%) 4.22 10.91 3.13 3.49 3.46

* The comparative figures have been adjusted for the effect of 1 for 3 Bonus Issue in 2001 and 1 for 1 Bonus Issue in 2005.

60

PPB Group Berhad

Listed subsidiary :-PPB Oil Palms Berhad

Non-listed subsidiaries :-FFM BerhadMSM GroupChemquest GroupPPB Leisure GroupPPB Hartabina Sdn Bhd

Revenue

2005 2004RM'000 RM'000

10,687,950 10,999,682

583,740 588,440

9,309,557 9,590,646 780,680 717,294 327,554 361,283 123,276 106,824 40,796 77,512

Profit Before Tax

2005 2004RM'000 RM'000

628,642 733,508

204,329 264,304

284,116 237,159 146,512 187,359 44,902 38,094 20,297 13,673 14,884 24,066

FINANCIALPERFORMANCE

61

Net Profit

2005 2004RM'000 RM'000

394,579 400,664

139,625 186,866

188,092 148,738 118,834 149,926 34,127 29,890 7,601 3,907

10,498 15,485

Earnings Per Share

2005 2004Sen Sen

33.28 37.90

31.35 41.95

84.30 66.66 326.83 412.34 21.88 19.16 15.57 8.00 15.00 22.12

Net Assets Per Share

2005 2004RM RM

4.23 4.00

3.10 2.93

9.37 8.82 22.33 20.44 1.70 1.56 2.27 2.10 1.67 1.59

FINANCIALPERFORMANCE

62

No.of Ordinary Cumulative TotalDate of Shares of RM1.00 Issued and Paid-Up

Allotment Consideration Each Allotted Share Capital (RM)

01.11.1968 Cash Subscription 2 2 31.12.1969 Cash Subscription 900,000 900,002 17.01.1971 Cash Subscription 1,650,000 2,550,002 31.03.1971 Cash Subscription 5,950,000 8,500,002 01.12.1971 Cash Subscription 1,500,000 10,000,002 23.03.1972 Cash Subscription 750,000 10,750,002 31.03.1972 Cash Subscription 1,249,998 12,000,000 22.05.1972 Cash - Public Issue 3,000,000 15,000,000 18.04.1974 1 for 3 Rights Issue at par 5,000,000 20,000,000

08.09.1976 Acquisition of 35,468,000 shares in 53,202,000 73,202,000 Malayan Sugar ManufacturingCompany Berhad (MSM)

20.09.1976 Acquisition of 640,000 shares in MSM 960,000 74,162,000

19.12.1979 Acquisition of 4,000,482 Mineral 8,000,964 82,162,964 Securities Malaysia Bhd (now knownas Minsec Properties Bhd [Minsec])shares from Chinteik Brothers (Singapore)Co. Pte Ltd

09.02.1980 Acquisition of 1,061,878 Minsec shares 2,123,756 84,286,720 pursuant to acceptances of TakeoverOffer dated 12-12-1979

01.04.1980 Compulsory Acquisition of remaining 91,280 84,378,000 45,640 Minsec shares pursuant toSection 180 of the Companies Act, 1965

07.05.1981 2 for 5 Bonus Issue 33,751,200 118,129,200

15.06.1981 1 for 10 Rights Issue at RM4.00 per share 8,437,800 126,567,000

MOVEMENTSIN SHARE CAPITAL

63

No.of Ordinary Cumulative TotalDate of Shares of RM1.00 Issued and Paid-Up

Allotment Consideration Each Allotted Share Capital (RM)

08.11.1982 Special Issue to Bumiputeras at 1,200,000 127,767,000 RM4.60 per share

07.05.1983 Special Issue to Bumiputeras at 1,200,000 128,967,000 RM4.60 per share

11.06.1984 Acquisition of 34% in Shaw Brothers 8,654,000 137,621,000 (M) Sdn Bhd (SBM) in exchange for PPB shares

10.12.1987 Acquisition of 33,874,052 shares in 28,792,944 166,413,944 Federal Flour Mills Berhad (now known asFFM Berhad [FFM]) pursuant to acceptancesof Takeover Offer dated 22-10-1987

10.12.1987 Acquisition of 53,813,885 shares in 16,144,166 182,558,110 Rasa Sayang Beach Hotels (Pg) Berhad(RSBH) (now known as Shangri-la Hotels(Malaysia) Berhad) pursuant to acceptances of Takeover Offer dated 22-10-1987

04.02.1988 Compulsory Acquisition of remaining 1,425,562 183,983,672 4,751,875 RSBH shares pursuant toSection 180 of the Companies Act, 1965

08.09.1989 1 for 3 Bonus Issue 61,327,890 245,311,562 18.09.1992 1 for 5 Bonus Issue 49,062,312 294,373,874 24.07.1996 1 for 4 Bonus Issue 73,593,469 367,967,343 23.11.2001 1 for 3 Bonus Issue 122,655,781 490,623,124 17.08.2004 Privatisation of FFM by way of 102,126,817 592,749,941

a members' scheme of arrangementunder Section 176 of the CompaniesAct 1965, comprising of a share exchange on the basis of one (1) new PPB shareplus cash of RM2.00 for every one (1)FFM share.

15.06.2005 1 for 1 Bonus Issue 592,749,941 1,185,499,882

MOVEMENTSIN SHARE CAPITAL

64

DIVIDEND RECORD

Issued Gross Net Payout ratio Payout ratioFYE Capital dividend* dividend* Company Group

31 Dec '000 Sen RM'000 Sen RM'000 % %

1996 367,967 6.00 58,875 4.20 41,212 91.2 18.5

1997 367,967 6.00 58,875 4.26 41,801 13.3 25.1

1998 367,967 6.00 58,875 4.32 42,390 93.7 38.3

1999 367,967 9.00 88,312 6.48 63,585 67.9 33.0

2000 367,967 7.50 73,593 5.93 58,139 49.6 23.8

2001 490,623 8.75 98,125 7.00 68,688 49.1 40.3

2002 490,623 23.25 228,140 21.50 210,968 97.6 86.8

2003 490,623 12.50 122,656 10.26 100,675 72.3 27.1

2004 592,750 15.00 177,825 11.85 140,482 75.4 35.1

2005 1,185,500 20.00 237,100 14.40 170,712 115.9 43.3

* the dividend rates have been adjusted for the effect of 1 for 3 Bonus Issue in 2001 and 1 for 1 Bonus Issue in 2005.

65

2006 Events

Mar Publication of Investor Update for the 4th Quarter Report ended 31 December 2005Press and Analyst Briefing

Apr Publication of Annual Report and Investor Handbook for 2005

May Annual General MeetingPress release on the 1st Quarter Results of 2006

Aug Press release on the 2nd Quarter Results of 2006

Sep Publication of Investor Update for Interim Report ending 30 June 2006Press and Analyst Briefing

Nov Press release on 3rd Quarter Results of 2006

INVESTOR RELATIONSSCHEDULE FOR 2006

NOTES

NOTES

17th Floor, Wisma Jerneh, 38 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.

Telephone : 603-2141 2077 Facsimile : 603-2141 8242 e-mail: [email protected] website: www.ppbgroup.com

PPB GROUP BERHAD (8167-W)

Date post:	04-Feb-2017
Category:	Documents
Upload:	vudang
View:	240 times
Download:	4 times

PPB GROUP BERHAD INVESTOR HANDBOOK 2005

Documents