business as cashflow generator Bisnes Perladangan Sebagai Penjana Aliran Tunai

Transcription

1 plantation business as cashflow generator Bisnes Perladangan Sebagai Penjana Aliran Tunai The Group s Plantation Business had contributed total revenue of RM66.89 million with an operating profit of RM11.50 million from RM11.33 million recorded in Higher Fresh Fruit Bunches (FFB) productivity of 97,939 metric tonnes in 2006 against 90,960 metric tonnes in 2005 and strong rebound in rubber prices had contributed to an improvement of the Plantation Business profit that enabled the Company to cushion the impact from the loss incurred by the Palm Oil Mill operations. The lower OER for the year and lower average CPO prices traded by the Company compared with the higher national average prices recorded by Malaysian Palm Oil Board (MPOB) had resulted in an operating loss of the Palm Oil Mill. However, steps have been taken to address this setback and improvement is expected to be reflected in the Company s performance going forward. 34 Sindora Berhad (13418-K)

2 Corporate Statement penyata korporat B i s n e s Pe r l a d a n g a n Ku m p u l a n t e l a h menyumbang perolehan berjumlah RM66.89 juta dengan keuntungan operasi sebanyak RM11.50 juta pada tahun 2006 berbanding RM11.33 juta yang dicatat pada tahun Pengeluaran Buah Tandan Segar (BTS) yang meningkat kepada 97,939 tan metrik pada tahun 2006 berbanding 90,960 tan metrik pada tahun 2005 serta harga getah yang lebih kukuh telah menyumbang kepada peningkatan keuntungan Bisnes Perladangan. Peningkatan ini membolehkan Syarikat mengurangkan kesan negatif daripada kerugian yang ditanggung oleh operasi Kilang Minyak Sawit. Kadar Perahan Minyak (OER) yang lebih rendah bagi tahun 2006 dan purata harga minyak sawit mentah (MSM) yang lebih rendah diniagakan berbanding dengan harga purata MSM nasional yang dicatatkan oleh Lembaga Minyak Sawit Malaysia (MPOB) telah menyumbang kepada kerugian operasi Kilang Minyak Sawit. Walau bagaimanapun, langkah-langkah wajar telah diambil untuk menangani kerugian yang dialami oleh Kilang Minyak Sawit dan usaha-usaha peningkatan dijangka akan membuahkan hasil di tahun-tahun yang mendatang. Dalam tahun yang ditinjau, pihak pengurusan telah menjalankan pelbagai usaha, yang antara lain termasuk mempertingkatkan produktiviti dan pengeluaran dengan memaksimumkan sepenuhnya kapasiti Kilang Minyak Sawit. Ini berjaya dicapai melalui pembelian BTS dari pembekal luar secara agresif di mana pada tahun 2006, 50.78% daripada 198,989 tan BTS yang diproses oleh kilang adalah dari sumber luar. Bekalan BTS Kumpulan pula adalah dari dua ladang miliknya yang meliputi kawasan seluas 5,890 hektar, terdiri daripada 3,939 hektar Ladang Sindora di Kluang, Johor dan 1,951 hektar di Ladang Sungai Simpang Kiri, Batu Pahat, Johor. w w w. s i n d o r a. c o m. m y 35

3 Among others, the management had taken the initiatives to improve the production and productivity by utilising fully the Palm Oil Mill capacity. This was achieved through aggressive purchase of external crops whereby during the year, 50.78% of 198,989 tonnes of FFB processed by the Mill were from external sources. The Group s supply of FFB was from its own two estates covering an area of 5,890 hectares comprising 3,939 hectares at Ladang Sindora in Kluang, Johor and 1,951 hectares at Ladang Sungai Simpang Kiri in Batu Pahat, Johor. Sindora s Palm Oil Mill has the capacity to process 40 tonnes of FFB per hour or 200,000 tonnes annually. With OER recorded at 18.56%, the Mill produced 36,926 tonnes of CPO in 2006 against 38,792 tonnes with OER at 19.34% in Palm Kernel (PK) also recorded a declining trend with extraction rate of 5.13% in 2006 compared with 6.02% in Dependency on external crops and long-term effects of high CPO prices will be an uphill battle for the mill to sustain its profitability given the highly competitive FFB purchasing costs that led to higher production costs. The replanting programmes in Ladang Sg Simpang Kiri were carried out on an average of 300 hectares per year as scheduled and are expected to be fully completed by Meanwhile, Ladang Sindora started its replanting programmes in 2006 and are projected to be fully completed by Sindora had benefited from the impact of buoyant rubber prices as global demand had outpaced supply during the year. The Company s rubber estate covering an area of 421 hectares at Ladang Sindora had contributed higher operating profit of RM1.36 million, despite lower output of 419,757 kg in 2006 compared with 559,221 kg in 2005 due to higher average price at RM7.13 per kg against RM4.69 per kg in Various measures were pursued towards the continuous improvement in the efficiency and productivity level by ensuring optimum capacity utilisation and more effective cost control measures at both plantations. Programmes such as yield improvement, replanting, waste management systems, mechanisation and cloned breeding development had been implemented. The management agent, EPA Management Sdn Bhd (EPA) has also conducted research into plant breeding, fertilisers, crop protection and agronomy for the plantation operations. The Group s Bio-Composting Plant at the mill that has started its operation since July 2005 is progressing smoothly and a testimony of the Group s commitment in caring for a healthier environment. The Bio-Composting Plant is producing a technologically sound, economically feasible and environmentally friendly palm oil waste management solution by converting the Palm Oil Mill Effluent (POME) and Empty Fruit Bunches (EFB) to high nutrient value compost. This system adopts Mill Integrated Waste Management Systems (MIWAMAS) that offers an effective solution to the perennial problems of mill-waste disposal. The compost has been used as substitute for high costing chemical-based fertilisers that has directly reduced the overall operating costs of the Plantation Business. Production volume in 2006 was 17,979 tonnes and the compost was entirely applied at both plantations for the oil palm manuring. Overall, the Plantation Business is expected to continue to contribute much needed cashflows and profit to the Group to meet its future requirements in view of the upward trend in CPO prices. The Group will continuously review and strengthen the plantation operations to achieve greater efficiency of scale and scope as well as the possibility of unlocking its plantation assets for maximum gain. 36 Sindora Berhad (13418-K)

4 Corporate Statement penyata korporat Kilang Minyak Sawit Sindora mempunyai kapasiti untuk memproses 40 tan BTS sejam atau 200,000 tan setiap tahun. Dengan catatan OER sebanyak 18.56%, kilang tersebut telah mengeluarkan 36,926 tan MSM pada tahun 2006 berbanding 38,792 tan dengan OER pada kadar 19.34% dalam tahun Isirong Sawit (PK) turut mencatat penurunan dengan kadar perahan sebanyak 5.13% pada tahun 2006 berbanding 6.02% pada tahun Pergantungan yang tinggi ke atas bekalan BTS dari pihak luar dan kesan jangka panjang harga MSM yang terus meningkat menjadi cabaran besar kepada kilang untuk mengekalkan keuntungannya terutama dengan kos pembelian BTS yang amat kompetitif yang secara langsung meningkatkan kos pengeluarannya. Program penanaman semula di Ladang Sg Simpang Kiri telah dijalankan pada kadar purata 300 hektar setahun seperti yang dijadualkan dan dijangka akan selesai sepenuhnya menjelang tahun Dalam pada itu, Ladang Sindora juga telah memulakan program penanaman semulanya pada tahun 2006 dan dijangka akan selesai sepenuhnya menjelang tahun Sindora telah memperolehi manfaat daripada kesan harga getah yang tinggi disebabkan oleh permintaan global yang meningkat berbanding bekalan pada tahun Ladang getah Syarikat yang meliputi kawasan seluas 421 hektar di Ladang Sindora telah menyumbangkan keuntungan yang lebih tinggi iaitu sebanyak RM1.36 juta, walaupun jumlah pengeluaran sebanyak 419,757 kg pada tahun 2006 adalah lebih rendah berbanding 559,221 kg pada tahun Ini dicapai hasil daripada harga purata yang lebih tinggi iaitu RM7.13 sekilogram berbanding RM4.69 sekilogram pada tahun Pelbagai langkah telah diusahakan ke arah peningkatan tahap kecekapan dan produktiviti secara berterusan dengan memastikan penggunaan kapasiti secara optimum dan langkah kawalan kos secara berkesan di kedua-dua ladang. Program-program seperti peningkatan hasil, penanaman semula, sistem pengurusan bahan buangan, mekanisasi dan penyelidikan dan pembenihan klon yang bermutu tinggi telah dilaksanakan. Ejen pengurusan, EPA Management Sdn Bhd (EPA) telah turut menjalankan penyelidikan terhadap penambahbaikan tanaman, baja, perlindungan tanaman dan agronomi bagi operasi perladangan. Kilang Baja Kompos yang telah memulakan operasinya sejak bulan Julai 2005 berjalan dengan lancar dan merupakan bukti kepada komitmen dan keprihatinan Kumpulan terhadap pemuliharaan alam sekitar yang lebih sihat. Kilang Baja Kompos ini menggunakan penyelesaian pengurusan bahan buangan minyak sawit yang canggih dari segi teknologi, berdaya maju dari segi ekonomi dan mesra alam dengan menukar Sisa Buangan Kilang Minyak Sawit (POME) dan Tandan Buah Kosong (EFB) menjadi kompos dengan nilai nutrien yang tinggi. Sistem ini menerimapakai Sistem Pengurusan Bahan Buangan Kilang Bersepadu (MIWAMAS) yang menyediakan penyelesaian berkesan kepada masalah-masalah pelupusan bahan buangan kilang yang berulang. Kompos tersebut digunakan untuk menggantikan baja kimia berkos tinggi yang secara langsung telah mengurangkan keseluruhan kos operasi Bisnes Perladangan. Hasil pengeluaran pada tahun 2006 adalah sebanyak 17,979 tan dan kompos ini telah digunakan secara menyeluruh di kedua-dua ladang untuk kerjakerja pembajaan penanaman kelapa sawit. Secara keseluruhan, Bisnes Perladangan dijangka akan terus menyumbang kepada aliran tunai dan keuntungan Kumpulan yang amat diperlukan untuk memenuhi keperluan masa depannya berikutan peningkatan trend harga MSM. Kumpulan akan terus mengkaji dan mengukuhkan operasi perladangannya untuk mencapai kecekapan skala dan skop serta mengkaji kemungkinan untuk mencairkan aset-aset perladangannya bagi mendapatkan keuntungan maksimum. w w w. s i n d o r a. c o m. m y 37

5 CORPORATE DEVELOPMENT Through Intrapreneur Venture Business, Sindora has continued to seek, explore and seize new business opportunities, strengthening its strategic advantages and positioning as well as sustaining its value creation and corporate growth. During the year, Sindora continued to pursue acquisitions and strengthening of existing businesses that consequently resulted in strong and stable footings. Thus far, Sindora had acquired eight companies involved in the manufacturing and services sectors with total investments of RM74.05 million. The acquired companies were AmanahRaya JMF Asset Management Sdn Bhd; Pro Office Solutions Sdn Bhd, Tepak Marketing Sdn Bhd, Willis (Malaysia) Sdn Bhd, Metro Parking (M) Sdn Bhd, EPASA Shipping Agency Sdn Bhd, MM Vitaoils Sdn Bhd and the latest, E.A. Technique (M) Sdn Bhd, a shipping company. Meanwhile, Sindora Timber Sdn Bhd, was also transformed into an Intrapreneur Venture investment in 2005, after undergoing total revamp of the Group s timber activities. Also, in the year under review, Sindora had formalised the proposed acquisition of 90% equity interest in a bio-medical device company, GranuLab (M) Sdn Bhd, that will produce and commercialise synthetic bone graft known as GranuMaS TM. The proposed venture is expected to receive approvals from relevant authorities in the second quarter of Acquisition of E.A. Technique (M) Sdn Bhd Sindora had successfully acquired 51% equity interest in E.A. Technique (M) Sdn Bhd (EA Tech) at a cost of RM38.25 million on 26 December The purchase consideration for the sales of shares was satisfied by a combination of internally generated fund and bank borrowings. EA Tech, a modest-sized shipping company, presented a very commendable track record in terms of its financial performance and business prospects. Thus, its acquisition fits well with the overall objective of Intrapreneur Venture concept to boost the profit contribution of the Group and diversify its business risks. EA Tech, which started its business in 1993 has a paid-up capital of RM19.42 million and is an owner and manager of a pool of oil tankers and fast crew boat for charter in the lucrative oil and gas transport activities. It currently has three oil tankers, one liquefied petroleum gas carrier, two harbour tugboats, a security boat and two fast crew boats. It is also in the midst of constructing a double hull tanker with 5,500 deadweight tonnes (DWT) capacity which is expected to be seaborne in August This new vessel would enable EA Tech to further increase its capacity to have a strong fleet to serve Malaysia and neighbouring ASEAN countries. EA Tech generally enters into four types of contracts with its clients namely time charter, Contract of Affreightment (COA), Consecutive Voyage Charter (CVC) and spot charter to balance its revenue risk profile. The acquisition of EA Tech would enable Sindora to expand into a new business segment in shipping industry which presented tremendous growth prospects. In 2006, EA Tech registered PBT of RM10.16 million, on the back of revenue amounting to RM45.04 million. EA Tech aims to diversify its customers base to cover regional major players in the oil and gas industry. The company has also put forth plans to replace and increase its existing fleet of vessels to meet increasing demand. Penetration into other market segments of the tanker business will also be viewed particularly in larger sized vessels up to 50,000 DWT. Diversification from its existing tanker business into the provision of services for upstream oil and gas activities will also be viewed involving survey vessels, straight supply vessels, anchor handling tug supply vessels, fast crew boats and multipurpose vessel. Due to its rapid business expansion, EA Tech is expected to enlarge its paid up capital to improve its shareholders funds position to balance its financing needs. In order to focus on its core business, EA Tech had to dispose its 40% equity interest in a bunkering activities company, EA Bunkering Services Sdn Bhd, to the other shareholders on 23 March Year Parking Concession Agreement at Persada Johor International Convention Centre On 15 August 2006, Sindora had entered into a 15-year concession agreement with Johor Corporation (JCorp) to manage, operate and maintain car parking facilities at the newly opened Persada Johor International Convention Centre, Johor Bahru together with Metro Parking (M) Sdn Bhd and Puteri Hotels Sdn Bhd (Puteri Hotels) for a concession consideration of RM15.0 million. 38 Sindora Berhad (13418-K)

6 Corporate Statement penyata korporat PEMBANGUNAN KORPORAT Melalui Bisnes Intrapreneur Venture, Sindora sentiasa mengenalpasti dan merebut peluang bisnes baru, mengukuhkan kelebihan dan kedudukan strategiknya serta mengekalkan penambahan nilai dan pertumbuhan korporat. Pada tahun yang ditinjau, Sindora meneruskan usaha pengambilalihan dan pengukuhan bisnes sedia ada, yang memungkinkannya terus mengukuh dan menstabilkan kedudukan dayamaju bisnesnya. Sejauh ini, Sindora telah mengambilalih lapan buah syarikat yang terlibat di dalam sektor perkilangan dan perkhidmatan dengan jumlah pelaburan sebanyak RM74.05 juta. Syarikat-syarikat yang diambilalih tersebut adalah AmanahRaya JMF Asset Management Sdn Bhd; Pro Office Solutions Sdn Bhd, Tepak Marketing Sdn Bhd, Willis (Malaysia) Sdn Bhd, Metro Parking (M) Sdn Bhd, EPASA Shipping Agency Sdn Bhd, MM Vitaoils Sdn Bhd dan yang terbaru, E.A. Technique (M) Sdn Bhd, sebuah syarikat perkapalan. Sementara itu, Sindora Timber Sdn Bhd pula telah diklasifikasikan sebagai syarikat Bisnes Intrapreneur Venture pada tahun 2005, selepas melalui penyusunan semula aktiviti dan operasi perkayuan Kumpulan. Pada tahun yang ditinjau juga, Sindora telah menandatangani perjanjian pengambilalihan 90% kepentingan dalam sebuah syarikat pengeluar peralatan bio perubatan, GranuLab (M) Sdn Bhd, yang akan menghasil dan mengkomersialkan produk sintetik tisu tulang tiruan yang dikenali sebagai GranuMaS TM. Cadangan pengambilalihan tersebut dijangka akan mendapat kelulusan yang diperlukan daripada pihak berkuasa pada suku kedua tahun Pengambilalihan E.A. Technique (M) Sdn Bhd Sindora telah berjaya mengambilalih 51% kepentingan ekuiti dalam E.A. Technique (M) Sdn Bhd (EA Tech) dengan kos sebanyak RM38.25 juta pada 26 Disember Pembelian saham tersebut telah dibiayai melalui dana dalaman dan pinjaman bank. EA Tech, sebuah syarikat perkapalan bersaiz sederhana, mempunyai rekod pencapaian yang amat baik dari segi prestasi kewangan dan prospek perniagaannya. Justeru, pengambilalihan tersebut adalah amat bersesuaian dengan objektif keseluruhan konsep Intrapreneur Venture untuk meningkatkan sumbangan keuntungan kepada Kumpulan dan mempelbagaikan risiko bisnesnya. EA Tech, yang memulakan perniagaannya pada tahun 1993, mempunyai modal berbayar sebanyak RM19.42 juta dan merupakan pemilik dan pengurus kapal tangki dan bot pengangkutan pekerja untuk disewa kepada syarikat pengeluar petroleum dan gas. Pada masa ini, ia mempunyai tiga buah kapal tangki, sebuah kapal pengangkut gas petroleum cair, dua buah bot tunda, sebuah bot keselamatan dan dua buah kapal pengangkutan pekerja. Syarikat ini juga sedang membina sebuah kapal tangki berkapasiti 5,500 tan (DWT) yang dijangka akan mula beroperasi pada Ogos Kapal baru ini akan membolehkan EA Tech meningkatkan lagi kapasitinya agar ia berupaya memiliki rangkaian kapal bagi membolehkannya menawarkan khidmat kepada negara-negara serantau ASEAN yang lain. Secara umumnya, EA Tech mempunyai empat jenis kontrak yang berbeza dengan pelanggan-pelanggannya iaitu Sewaan Mengikut Masa, Kontrak Pengangkutan (COA), Sewaan Perjalanan Berterusan (CVC) dan Sewaan Mengikut Perjalanan yang bertujuan untuk mengimbangi profil risiko dan pulangannya. Pengambilalihan EA Tech akan membolehkan Sindora melibatkan diri dalam industri perkapalan yang dijangka mempunyai prospek pertumbuhan yang amat memberangsangkan. Pada tahun 2006, EA Tech telah mencatat keuntungan sebelum cukai sebanyak RM10.16 juta, daripada jumlah perolehan sebanyak RM45.04 juta. EA Tech berhasrat untuk mempelbagaikan profil pelanggannya yang merangkumi syarikat-syarikat utama dalam industri minyak dan gas serantau. Syarikat tersebut juga merancang untuk menukar dan menambah bilangan kapal sedia ada bagi memenuhi permintaan yang semakin meningkat. Penglibatan di dalam segmen kapal tangki bersaiz besar akan turut dikaji khususnya bagi kapal-kapal bersaiz sehingga 50,000 DWT. Selain daripada kepelbagaian perkhidmatan kapal tangki sedia ada, EA Tech juga sedang mengkaji kemungkinan untuk menerokai bidang penyediaan perkhidmatan bagi aktiviti huluan industri minyak dan gas termasuk kapal-kapal pengukur, bot tunda, kapal pengangkutan pekerja dan kapal untuk pelbagai kegunaan. Pengembangan bisnesnya yang pantas dijangka akan memerlukan EA Tech untuk meningkatkan modal berbayarnya bagi mengimbangi keperluan kewangan serta mengukuhkan kedudukan dana pemegang sahamnya untuk tujuan pembiayaan pinjaman. EA Tech telah mengambil langkah untuk menumpukan kepada aktiviti terasnya dalam sektor perkapalan dengan menjual 40% kepentingan ekuitinya di dalam EA Bunkering Services Sdn Bhd, sebuah syarikat yang menjalankan aktiviti simpanan dan jualan minyak secara pukal kepada rakan usahasamanya pada 23 Mac Perjanjian Konsesi 15 Tahun Tempat Letak Kereta di Pusat Konvensyen Antarabangsa Persada Johor Pada 15 Ogos 2006, Sindora telah memeterai satu perjanjian konsesi 15 tahun dengan Johor Corporation (JCorp) untuk mengurus, mengendali dan menyelenggara kemudahan tempat letak kereta di Pusat Konvensyen Antarabangsa Persada Johor, Johor Bahru (Persada Johor) yang baru dibuka, dengan Metro Parking dan Puteri Hotels Sdn Bhd (Puteri Hotels) dengan pertimbangan harga sebanyak RM15.0 juta. w w w. s i n d o r a. c o m. m y 39

7 JCorp is the owner of Persada Johor which in turn grants Sindora the right to occupy the concession parking areas and the sole exclusive rights to operate and manage the parking facilities. Sindora in turn appointed its subsidiary, Metro Parking as the operator of the parking areas. The parking facilities accommodated a total of 1,418 parking bays of which 1,086 bays are covered multi-storey parking space. Under the concession agreement, Sindora is entitled to a guaranteed return by Puteri Hotels that ranges between RM1,752,440 RM2,952,440 per annum over the 15 years period. On top of this guarantee, Sindora will also be sharing the operating profit of the parking concession with JCorp and Metro Parking on the basis of 30%, 30% and 40% respectively. The concession agreement was effected beginning November 2006 and is expected to contribute positively to the earnings of the Group in the future. 3. Proposed Acquisition of 90% Equity in GranuLab (M) Sdn Bhd Sindora had on 25 November 2006 entered into an agreement to acquire 90% equity of GranuLab (M) Sdn Bhd (GranuLab) at a consideration of RM270,000 on the condition that GranuLab is granted the sole commercialisation rights by SIRIM Berhad (SIRIM) to produce and market a medical device of synthetic bone graft under the trademark of GranuMaS TM. Sindora had identified the key intrapreneur, En Romli Ishak, the Managing Director of GranuLab, to play a critical role in the initiation of this project especially on close liaisons with SIRIM on the product s research and development and implementation of the product s commercialisation. GranuMaS TM is a product under the Intensification of Research Priority Area (IRPA) scheme that was funded by Ministry of Science, Technology and Innovation (MOSTI). The project was the outcome of joint research effort between SIRIM, Malaysian Institute of Nuclear Technology (MINT), Universiti Sains Malaysia (USM), Universiti Kebangsaan Malaysia (UKM) and International Islamic University of Malaysia (IIUM) to conduct a study on producing Bone Graft Substitutes for surgical applications in normal bone procedure for Orthopaedics, ENT, dentistry, plastic surgery and Maxillofacial surgeries. GranuMaS TM contains similar chemical composition to the human bone s mineral substance and its usage can assist in the growth of new bones as well as accelerate the process of bone repair. JCorp adalah pemilik Persada Johor yang memberi hak eksklusif konsesi tersebut kepada Sindora untuk mengendali dan menguruskan kemudahan tempat letak kereta berkenaan. Sindora kemudiannya telah melantik syarikat anaknya, Metro Parking untuk menguruskan konsesi tersebut. Kemudahan tempat letak kereta ini memuatkan sebanyak 1,418 ruang letak kereta yang mana, 1,086 ruang adalah ruang tempat letak kereta bertingkat. Di bawah perjanjian konsesi tersebut, Sindora diberi jaminan pulangan oleh Puteri Hotels yang berjumlah antara RM1,752,440 RM2,952,440 setahun sepanjang tempoh 15 tahun. Selain daripada jaminan tersebut, Sindora akan turut berkongsi keuntungan operasi daripada konsesi ini dengan JCorp dan Metro Parking, masingmasing pada kadar 30%, 30% dan 40%. Perjanjian konsesi tersebut berkuatkuasa mulai bulan November 2006 dan dijangka menyumbang secara positif kepada keuntungan Kumpulan pada masa depan. 3. Cadangan Pengambilalihan 90% Kepentingan dalam GranuLab (M) Sdn Bhd Pada 25 November 2006, Sindora telah memeterai perjanjian untuk mengambilalih ekuiti sebanyak 90% di dalam GranuLab (M) Sdn Bhd (GranuLab) dengan pembayaran sebanyak RM270,000 dengan syarat bahawa GranuLab diberi hak sebagai pengeluar tunggal oleh SIRIM Berhad (SIRIM) bagi mengeluar dan memasarkan produk sintetik tisu tulang tiruan di bawah jenama GranuMaS TM. Sindora telah mengenalpasti Encik Romli Ishak, Pengarah Urusan GranuLab sebagai intrapreneur yang bertanggungjawab untuk memainkan peranan penting dalam pelaksanaan pengkomersialan produk ini. GranuMaS TM adalah satu produk di bawah skim Penumpuan Penyelidikan Bidang Utama (IRPA) yang dibiayai oleh Kementerian Sains, Teknologi dan Inovasi (MOSTI). Projek tersebut adalah hasil daripada usaha penyelidikan bersama antara SIRIM, Institut Teknologi Nuklear Malaysia (MINT), Universiti Sains Malaysia (USM), Universiti Kebangsaan Malaysia (UKM) dan Universiti Islam Antarabangsa Malaysia (IIUM) untuk menghasilkan produk sintetik tisu tulang tiruan bagi kegunaan prosedur pembedahan tulang untuk Ortopedik, GranuMaS TM is the first locally produced medical device by local scientists, developed by SIRIM that had received international accreditation. Currently, GranuLab is in negotiation to lease a production facility that will be located at Technology Park Malaysia (TPM), Bukit Jalil, Kuala Lumpur. Full production is expected to commence by year end Sindora Berhad (13418-K)

8 Corporate Statement penyata korporat Telinga, Hidung dan Tekak (ENT), pergigian, pembedahan plastik dan pembedahan Maxillofacial. GranuMaS TM mengandungi komposisi kimia yang serupa dengan unsur galian dalam tulang manusia dan kegunaannya boleh membantu pertumbuhan tulang baru serta mempercepatkan proses pemulihan tulang. GranuMaS TM adalah peralatan perubatan yang pertama dihasilkan oleh para saintis tempatan, dibangunkan oleh SIRIM dan telah menerima akreditasi antarabangsa. Kini, GranuLab sedang berbincang untuk menyewa sebuah kemudahan pengeluaran yang akan ditempatkan di Taman Teknologi Malaysia (TPM), Bukit Jalil, Kuala Lumpur. Proses pengeluaran dijangka akan bermula menjelang akhir tahun GranuLab telah mengenalpasti hospital-hospital kerajaan dan swasta, klinik surgeri pakar dan pengedar peralatan perubatan sebagai sasaran pasarannya. Dalam masa akan datang, syarikat akan menumpukan usahanya untuk menembusi pasaran antarabangsa khususnya di negara-negara ASEAN dan Timur Tengah. GranuLab has identified government and private hospitals, specialist surgical clinics and medical devices distributors as targeted market segments. In the medium term, the company will concentrate its effort to position the product in international markets especially ASEAN and Middle Eastern countries. The project is eligible to be registered under Bio Nexus status, which will exempt the company from tax for 10 years. The project is also eligible for a government grant from Malaysian Technology Development Corporation (MTDC) for a maximum of RM4.0 million for the purpose of financing the production lab and its facilities. 4. Proposed Increase of Paid Up Capital Through Renounceable Two Call Rights Issue of New Ordinary Shares Together With Free Detachable Warrants Sindora s rapid expansion of its Intrapreneur Venture Business in viable and profitable enterprises, require substantial and continuous funding. In the meantime, expected cashflows from Plantation Business had been and will be utilised for ongoing replanting programmes. The Company has therefore laid plans to meet the cashflow gap through increase in paid up capital. The paid up capital will be enlarged to RM254.4 million, which include million rights shares and 52.8 million shares upon full exercise of the warrants. The implementation of this proposed exercise will enable the Company to fulfill its two-prong strategies in meeting its cashflow gap and liquidity of its shares in circulation. This is also expected to stimulate investor s confidence which in turn is anticipated to be reflected in the market value of the Company. The move is also expected to improve Sindora s market capitalisation, strengthen its balance sheet and enhance its future borrowing capacity. The enlarged paid up capital will provide the required fund to facilitate Intrapreneur Venture Business expansion apart from meeting its other capital requirements. The proposal is expected to be carried out in third quarter of Projek berkenaan layak didaftarkan di bawah status Bio Nexus, yang diberi pengecualian cukai selama 10 tahun. Projek ini juga layak untuk memperolehi geran kerajaan daripada Perbadanan Pembangunan Teknologi Malaysia (MTDC) dengan jumlah maksimum sebanyak RM4.0 juta untuk membiayai makmal pengeluaran dan kemudahan-kemudahan yang berkaitan. 4. Cadangan Peningkatan Modal Berbayar Melalui Dua Panggilan Terbitan Hak Boleh batal saham baru biasa beserta dengan waran percuma boleh pisah Untuk mengembangkan dan meningkatkan pertumbuhan Bisnes Intrapreneur Venture yang terbukti menguntungkan memerlukan pembiayaan yang besar dan berterusan. Namun, aliran tunai yang dihasilkan daripada Bisnes Perladangan semakin menyusut disebabkan keperluan program penanaman semula secara berterusan. Justeru, Syarikat telah merancang untuk mengatasi kekurangan aliran tunai ini melalui cadangan peningkatan modal berbayarnya. Modal berbayar akan ditingkatkan kepada RM254.4 juta, yang meliputi juta saham hak dan 52.8 juta saham waran selepas dilaksanakan sepenuhnya. Pelaksanaan ke atas cadangan ini akan membolehkan Syarikat memenuhi strategi serampang dua matanya bagi mengatasi kekurangan aliran tunai dan kecairan sahamnya di pasaran. Ini juga dijangka akan merangsang keyakinan pelabur yang kemudian dapat diterjemahkan melalui peningkatan nilai saham Syarikat di pasaran. Langkah tersebut juga dijangka akan memperbaiki kedudukan modal pasaran Sindora, mengukuhkan kunci kira-kiranya dan mempertingkatkan kapasiti pinjaman masa depannya. Melalui peningkatan modal berbayar, dana yang diperolehi akan membantu Sindora mengembangkan Bisnes Intrapreneur Venturenya selain daripada memenuhi keperluan modalnya yang lain. Cadangan tersebut dijangka akan dapat dilaksanakan pada suku ketiga tahun w w w. s i n d o r a. c o m. m y 41

9 42 Sindora Berhad (13418-K)

10 Corporate Statement penyata korporat Operations Review of intrapreneur venturecompanies Tinjauan operasi Syarikat-syarikat Intrapreneur venture 1. Pro Office Solutions Sdn Bhd Pro Office Solutions Sdn Bhd (POSSB) is a Business Process Outsourcing (BPO) company that is principally involved in the provision of integrated outsourcing solutions in Data and Document Processing (DDP) to financial institutions, telecommunication, insurance and Government Link Companies. Pressure on margin with relatively low volume, increased operational cost and keen competition amongst industry players due to easy entry into the DDP business had affected performance of POSSB during the year. In 2006, POSSB recorded PBT of RM1.41 million against RM3.05 million in 2005, a reduction of 53.8% in tandem with lower revenue of RM16.95 million compared with RM20.06 million in Pro Office Solutions Sdn Bhd Pro Office Solutions Sdn Bhd (POSSB) terlibat dalam perkhidmatan Pemprosesan Data dan Dokumen (DDP) secara bersepadu kepada institusi kewangan, telekomunikasi, insurans dan Syarikat Berkaitan Kerajaan. Margin keuntungan dan nilai jualan yang semakin mengecil, kos operasi yang meningkat dan persaingan sengit di pasaran ekoran dari penyertaan yang semakin bertambah dari kalangan syarikat-syarikat baru yang menceburi industri ini telah menjejaskan secara langsung prestasi POSSB. Pada tahun 2006, POSSB telah mencatatkan keuntungan sebelum cukai sebanyak RM1.41 juta berbanding RM3.05 juta pada tahun 2005, pengurangan pada kadar 53.8%, sejajar dengan jumlah perolehan yang lebih rendah sebanyak RM16.95 juta berbanding RM20.06 juta pada tahun w w w. s i n d o r a. c o m. m y 43

11 Despite its ability in retaining all its major clients, especially telecommunication providers and financial institutions, the company still had to face keen competition and margin reduction as most clients had adopted a more liberal approach in outsourcing their DDP services to mitigate risks on relying upon limited service providers by awarding contracts through open tenders to multiple service providers. Nevertheless, due to POSSB s competency and competitiveness in providing high quality services, the company had successfully positioned itself as amongst the top service providers in the country. In a continuous effort to sustain and improve upon its performance and competitiveness, POSSB had diversified into other valueadded and complementary services such as total outsourcing of Mailroom Management, Direct Marketing, Handmail/Admail and Courier/Parcel Services. POSSB also provided electronic campaign management, data extraction, creation and delivery via electronic media such as SMS Express. POSSB continues to improve its services delivery standards in order to meet increasingly demanding needs of its clients in a highly competitive business. 2. Tepak Marketing Sdn Bhd Tepak Marketing Sdn Bhd (Tepak) which operates in Pasir Gudang, Johor is fast gaining reputation as a reliable, efficient and professional contract manufacturer in tea blending and packaging. For the last 16 years, the company has established strong business relationship with Unilever Holdings (M) Bhd (Unilever) for Lipton tea products which is a testament of Unilever s confidence in Tepak s ability to deliver continuous excellent service. Tepak had also diversified its business profile by introducing beverages under the Zippie brand that included carbonated drinks in PET bottles and cans and mineral water, known as Zippie Cool. This will at the same time mitigate risks of relying upon a single customer base. The company registered RM14.01 million of revenue in 2006, a reduction of 4.19% from RM14.63 million recorded in Consequently, the company registered a lower PBT of RM0.26 million against RM0.46 million registered previously. Contract manufacturing activities of Lipton tea products was the sole contributor to profit and had sustained itself as the pillar of financial strength for Tepak. Zippie has yet to show favourable performance and contribute positively to the company as it needs a longer gestation period in positioning itself as a preferred brand in the market. Tepak is striving to increase its market share and propelling its ascent in the local beverage industry, by allocating more resources to develop Zippie s presence through aggressive marketing and promotion. Emphasis will be given to position Zippie as a brand to be reckoned with by strengthening its distribution networks that covers wider regional territories throughout Malaysia. Brand campaign and new flavours introduced concurrently for maximum effect is expected to translate into better acceptance and market growth. Among the credentials achieved by the company thus far were MS ISO 9001:2000 since 1999, Supplier Quality Management Program (SQMP) critical preferred vendor, Safety, Health and Environment (SHE) Audit conformance and Halal certification by Jabatan Kemajuan Islam Malaysia (JAKIM). All certificates are audited and reviewed periodically by local and international consultants. Going forward, the company s strategies and focus will be on controlling costs, improving financial results, brand penetration and exposure apart from securing new contract manufacturing jobs. Effective marketing campaign of Zippie will enable Tepak s brand to evolve further by capitalising on its established brand name. No effort will be spared in increasing Tepak s competitiveness and the company is confident that its effort will bear the desired results in the immediate future. In an effort to strengthen the operations, the management had viewed several possibilities of business collaboration and/ or establish smart partnerships with other service providers. On a broader scale, the company is also actively looking for new possibilities and chances of merging or acquiring another service provider with a view of expanding its business. 44 Sindora Berhad (13418-K)

12 Corporate Statement penyata korporat sebelum cukai yang dicatat juga menurun kepada RM0.26 juta berbanding RM0.46 juta pada tahun sebelumnya. Aktiviti perkilangan kontrak produk teh Lipton adalah penyumbang tunggal kepada keuntungan dan telah berjaya mengekalkan prestasi tersebut untuk terus membantu mengukuhkan kedudukan kewangan Tepak. Walaupun berjaya mengekalkan semua pelanggan utama, khususnya syarikatsyarikat penyedia telekomunikasi dan institusi kewangan, namun POSSB masih berdepan dengan cabaran persaingan yang getir dan pengurangan margin. Tambahan pula kebanyakan pelanggan telah menerimapakai pendekatan yang lebih liberal dalam pemberian tender perkhidmatan DDP kepada syarikat-syarikat yang terlibat dalam perkhidmatan DDP melalui tender terbuka kepada lebih daripada satu syarikat. Pendekatan ini diambil bagi mengurangkan risiko pergantungan ke atas penyedia perkhidmatan yang terhad. Walau bagaimanapun, disebabkan oleh kebolehan dan kelebihan daya saingnya dalam menyediakan perkhidmatan berkualiti tinggi, POSSB berjaya menempatkan diri sebagai antara penyedia perkhidmatan pilihan yang terkemuka negara. Dalam usaha berterusannya untuk mengekal dan mempertingkatkan prestasi dan daya saing, POSSB telah mempelbagaikan perkhidmatannya kepada profil bisnes yang boleh mewujudkan tambahan nilai dan sokongan kepada bisnes sedia ada seperti penyumberluaran menyeluruh bagi Perkhidmatan Pengurusan Mel, Pemasaran Langsung, Handmail/ Admail dan Perkhidmatan Kiriman Cepat/ Bungkusan. POSSB turut menyediakan pengurusan kempen secara elektronik, pengklasifikasian data, penyediaan dan penghantaran data melalui media elektronik seperti SMS Ekspres dan lainlain. POSSB terus mempertingkatkan piawaian penyediaan perkhidmatannya untuk memenuhi permintaan yang semakin bertambah daripada para pelanggannya dalam suasana perniagaan yang semakin kompetitif ini. Ke arah memperkukuhkan operasinya, p e ngurusan telah mengenalpasti pelbagai strategi termasuk kemungkinan menjalinkan usahasama bisnes dan/atau perkongsian pintar dengan penyediapenyedia perkhidmatan yang berkaitan. Dalam konteks yang lebih luas, POSSB juga sentiasa mencari peluang-peluang baru untuk tujuan penggabungan atau pengambilalihan mana-mana penyedia perkhidmatan dengan matlamat untuk mengembangkan bisnesnya. 2. Tepak Marketing Sdn Bhd Tepak Marketing Sdn Bhd (Tepak) yang beroperasi di Pasir Gudang, Johor, semakin dikenali sebagai sebuah pengilang kontrak yang cekap dan profesional dalam menyediakan perkhidmatan mengadun dan membungkus teh. Sejak 16 tahun yang lalu, syarikat tersebut telah menjalinkan hubungan bisnes yang kukuh dengan Unilever Holdings (M) Bhd (Unilever) bagi produk teh Lipton yang menjadi bukti keyakinan Unilever terhadap kemampuan Tepak untuk menyediakan perkhidmatan yang cemerlang secara berterusan. Tepak juga telah mempelbagaikan asas perniagaannya dengan memperkenalkan minuman di bawah jenama Zippie yang meliputi minuman berkarbonat dalam botol dan tin serta air mineral yang dikenali sebagai Zippie Cool. Pada masa yang sama, usaha ini akan dapat mengelakkannya daripada terlalu bergantung kepada pelanggan tunggal. Tepak telah mencatat perolehan sebanyak RM14.01 juta pada tahun 2006, menurun sebanyak 4.19% daripada RM14.63 juta yang dicatat pada Keuntungan Zippie masih belum berupaya untuk menunjukkan prestasi yang menggalakkan untuk menyumbang secara positif kepada syarikat kerana ia memerlukan tempoh yang lebih panjang untuk memantapkan kedudukannya sebagai jenama pilihan dalam pasaran. Tepak sedang berusaha untuk meningkatkan saiz pasarannya, justeru, melonjakkan kedudukannya di dalam industri minuman tempatan, dengan memperuntukkan lebih banyak sumber untuk mengetengahkan jenama Zippie melalui usaha pemasaran dan promosi secara agresif. Penekanan akan diberi untuk memperkukuhkan kedudukan Zippie sebagai jenama yang terkenal dengan mewujudkan rangkaian pengedarannya yang lebih meluas merangkumi segmen pasaran di seluruh Malaysia. Kempen penjenamaan dan pengenalan perisa baru telah dibuat secara serentak untuk meningkatkan penerimaan dan pertumbuhan pasaran yang lebih baik. Antara kejayaan yang telah dicapai oleh Tepak termasuklah pengiktirafan MS ISO 9001:2000 yang diterima sejak tahun 1999, vendor pilihan utama oleh Program Pengurusan Kualiti Pembekal, pematuhan Audit Keselamatan, Kesihatan dan Alam Sekitar (SHE) serta pensijilan Halal oleh Jabatan Kemajuan Islam Malaysia (JAKIM). Kesemua sijil diaudit dan dikaji secara berkala oleh syarikat perunding tempatan dan antarabangsa. Untuk melangkah dengan lebih jauh ke hadapan, strategi dan fokus syarikat telah dirangka untuk mengawal kos, mempertingkatkan prestasi kewangan, menembusi dan mengetengahkan jenama dan produk Zippie, selain daripada usaha mendapatkan kontrak baru. Kempen pemasaran yang berkesan akan membolehkan jenama Zippie keluaran Tepak berkembang dengan lebih jauh. Tepak akan terus berusaha untuk mempertingkatkan daya saingnya dan yakin bahawa usaha ini akan membuahkan hasil yang dikehendaki dalam tempoh jangka masa terdekat. w w w. s i n d o r a. c o m. m y 45

13 3. Metro Parking (M) sdn bhd and its Group of Companies Metro Parking (M) Sdn Bhd (Metro Parking), a leading parking operator in the country with 30% market share, has established its presence regionally. As at March 2007, the company and its subsidiaries manage a total of 80,670 parking bays from 193 contracts located across Malaysia, Singapore, Brunei, Indonesia and the Philippines. Metro Parking has vast experience in managing various types of car parks including at airport locations, office buildings, shopping complexes, hotels, transport terminals, wet markets, hospitals, open site, jetty terminal, sport centres, recreational areas as well as for local council s street parking. Among its prime contracts are the Kuala Lumpur Sentral Station (KL Sentral) in Malaysia, Shaw Centre in Singapore, Brunei International Airport, The Enterprise Centre in the Philippines and Golden Boutique Hotel in Indonesia. For 2006, Metro Parking Group recorded its highest achievement in history with revenue of RM86.83 million and PBT of RM2.09 million against RM83.06 million in revenue and RM1.51 million PBT last year. This commendable achievement was due to Group-wide consolidation effort in reviewing unprofitable parking contracts, increasing revenues through better collection systems, procuring more profitable parking contracts, and generally higher contributions from all its subsidiaries. 3. Metro Parking (M) Sdn Bhd dan Syarikat dalam Kumpulannya Metro Parking (M) Sdn Bhd (Metro Parking), sebuah pengendali tempat letak kereta yang terkemuka negara dengan menguasai 30% saiz pasaran, turut berjaya mengukuh dan mengembangkan operasinya di rantau ini. Metro Parking dan syarikat-syarikat subsidiarinya sedang menguruskan sejumlah 80,670 ruang letak kereta daripada 193 kontrak yang terletak di seluruh Malaysia, Singapura, Brunei, Indonesia dan Filipina. Metro Parking mempunyai pengalaman yang luas dalam mengurus pelbagai jenis tempat letak kereta termasuk di lapangan terbang, bangunan pejabat, kompleks membeli belah, hotel, terminal pengangkutan, pasar, hospital, tapak terbuka, terminal jeti, pusat sukan, kawasan rekreasi dan tempat letak kereta jalanan milik majlis perbandaran. Antara kontrak-kontrak utamanya adalah Stesen Sentral Kuala Lumpur (KL Sentral) di Malaysia, Shaw Centre di Singapura, Lapangan Terbang Antarabangsa Brunei, The Enterprise Centre di Filipina dan Hotel Golden Boutique di Indonesia. Bagi tahun 2006, Kumpulan Metro Parking telah mencatatkan pencapaian tertinggi dalam sejarahnya dengan kutipan perolehan sebanyak RM86.83 juta dan keuntungan sebelum cukai sebanyak RM2.09 juta berbanding perolehan bernilai RM83.06 juta dan keuntungan sebelum cukai sebanyak RM1.51 juta pada tahun lepas. Pencapaian yang memberangsangkan ini adalah hasil daripada langkah yang diambil di semua peringkat operasi Kumpulan termasuk mengkaji semula dan menamatkan kontrak-kontrak tempat letak kereta yang tidak menguntungkan, meningkatkan perolehan melalui sistem pungutan yang lebih baik, mendapatkan lebih banyak kontrak tempat letak kereta yang menguntungkan dan sumbangan yang lebih tinggi secara umumnya daripada semua syarikat subsidiari. 46 Sindora Berhad (13418-K)

14 Corporate Statement penyata korporat Revenue and PBT achievement of Metro Parking Group can be summarised as follows: Pencapaian perolehan dan keuntungan sebelum cukai Kumpulan Metro Parking boleh diringkaskan seperti berikut: No. of car mar 2007 Bil. Tempat Letak mac 2007 Revenue Perolehan Profit Before Tax Keuntungan Sebelum Cukai (RM 000) (RM 000) (RM 000) (RM 000) Metro Parking (M) Sdn Bhd ,430 41, Metro Parking (S) Pte Ltd 38 32,492 27, Metro Parking (B) Sdn Bhd 12 5,479 5, Metro Parking (P) Inc. 26 4,688 3, PT Metro Penata Sarana (122) (198) Metro Equipment Systems Sdn Bhd 1, (77) SPMS Sdn Bhd * 1, (337) (Inter-company adjustment) (Penyelarasan antara Syarikat) (1,850) 2,205 (482) 448 total ,825 83,055 2,092 1,510 Note/Nota: * SPMS Sdn Bhd Smart Parking Management Systems Sdn Bhd In tandem with the objective to grow the business further and complement its existing parking operations, Metro Parking (M) had acquired 70% equity in Smart Parking Management Systems Sdn Bhd (SPMS) in March SPMS is the sole distributor for Malaysia of high end computerised automated parking equipment and access control systems from Austria under the brand name of Skidata. This move allows Metro Parking Group the opportunity to secure high profile projects due to the flexibility of the systems to be easily integrated with the existing parking systems and equipment. Due to the vast potential of Skidata, Metro Parking has put in place its plans to expand the distributorship to Philippines and Indonesia. In the local arena, Metro Parking has secured several high profile parking contracts such as Queensbay Mall with 2,500 parking bays, which is the biggest mall in the northern region of Peninsular Malaysia, as well as 1,418 bays at Persada Johor International Convention Centre using Skidata systems and equipment. Sejajar dengan matlamat untuk membangunkan bisnesnya dan menyokong operasi tempat letak kereta sedia ada, Metro Parking (M) telah mengambilalih 70% kepentingan dalam Smart Parking Management Systems Sdn Bhd (SPMS) pada bulan Mac SPMS adalah pengedar tunggal di Malaysia bagi pembekalan peralatan tempat letak kereta automatik berkomputer dan sistem kawalan akses yang canggih dari Austria di bawah jenama Skidata. Langkah ini akan memberi Kumpulan Metro Parking peluang untuk mendapatkan projekprojek berprofil tinggi hasil daripada fleksibiliti sistem tersebut yang mudah dipadankan dengan sistem dan peralatan tempat letak kereta sedia ada. Disebabkan oleh potensi besar Skidata, Metro Parking telah mengambil langkah untuk mengembangkan rangkaian pengedaran peralatan tersebut ke Filipina dan Indonesia. Di Malaysia, Metro Parking telah dilantik dan diberi kepercayaan untuk menguruskan beberapa tempat letak kereta berprofil tinggi seperti di Queensbay Mall yang merupakan pusat membeli belah terbesar di utara Semenanjung Malaysia, dengan ruang letak kereta sebanyak 2,500 serta Pusat Konvensyen Antarabangsa Persada Johor dengan ruang letak kereta sebanyak 1,418 yang menggunakan sistem dan peralatan Skidata. w w w. s i n d o r a. c o m. m y 47

15 Metro Parking Group has also developed various in-house systems for the management and operations of car parks Group-wide such as Accounting System, Customer and Debtors Database Management System and Survey, and Development Costing System which had given Metro Parking Group distinct advantage over its competitors. In 2006, Metro Parking Group continued garnering prestigious a wards as manifestation of its excellent services. Metro Parking (Malaysia) recently was awarded a Certificate of Excellence in the category of Export Services from the Ministry of International Trade and Industry (MITI). Meanwhile, Metro Parking (Philippines) had also received various prestigious awards among others, Most Outstanding Innovative Car Park and Most Outstanding Managed Car Park (National) by Asian Star Brand Award of Asia Executive Magazine, The Philippines Brand Excellence Award and 2006 Philippines Award for Most Admired Companies and Brand in the Philippines by McCallum and Trout Global Associates, LA VECO Business Consulting and Philippines Best Research Council. Metro Parking Group s excellent service performance was further recognised when Metro Parking (Singapore) was awarded with two Silver Awards for Excellence Services in Singapore. Metro Parking Group planned to expand its business activities domestically and internationally, with Hong Kong identified as its next base of operations. The Philippines and Indonesia markets have also been earmarked for aggressive expansion to tap the vast opportunities present in those countries. In all its international ventures, Metro Parking Group will continue to act judiciously to ensure minimal risks and exposure for maximum returns to all its stakeholders. Kumpulan Metro Parking telah membangunkan pelbagai sistem dalaman untuk pengurusan dan operasi tempat letak kereta di seluruh Kumpulan seperti Sistem Perakaunan, Sistem Pengurusan Pangkalan Data dan Kajian Pelanggan serta Si Berhutang, dan Membangunkan Sistem Mengira Kos yang telah memberikan Kumpulan Metro Parking kelebihan berbanding dengan pesaing-pesaingnya. Pada tahun 2006, Kumpulan Metro Parking terus merangkul anugerah-anugerah berprestij sebagai bukti kecemerlangan perkhidmatannya. Baru-baru ini, Metro Parking (Malaysia) telah dianugerahkan Sijil Kecemerlangan dalam kategori Perkhidmatan Eksport daripada Kementerian Perdagangan Antarabangsa dan Industri (MITI). Selain itu, Metro Parking (Philippines) telah turut menerima pelbagai anugerah berprestij yang mana antara lain, Tempat Letak Kereta Berinovasi Paling Cemerlang dan Pengurusan Tempat Letak Kereta Paling Cemerlang (Nasional) oleh Asian Star Brand Award daripada Asia Executive Magazine, The Philippines Brand Excellence Award dan 2006 Philippines Award bagi Syarikat dan Jenama Paling Disegani di Filipina oleh McCallum and Trout Global Associates, LA VECO Business Consulting dan Philippines Best Research Council. Prestasi perkhidmatan cemerlang Kumpulan Metro Parking terus menerima pengiktirafan apabila Metro Parking (Singapore) dianugerah dengan dua Silver Awards for Excellence Services di Singapura. 48 Sindora Berhad (13418-K)

16 Corporate Statement penyata korporat 4. EPASA Shipping Agency Sdn Bhd EPASA Shipping Agency Sdn Bhd (EPASA) is principally involved in freight forwarding, shipping and logistics services, based in Pasir Gudang. Its clients include major shipping companies with international affiliation such as Mitsui OSK Lines, China Shipping, Evergreen, DiPerdana, Kontena Nasional and other clientele that includes Antara Steel Mills Sdn Bhd, Behn Meyer and FPM (M) Sdn. Bhd. EPASA s container yard in Pasir Gudang, which is capable of accommodating 10,000 TEUs per month, is equipped with modern facilities and recognised as among the preferred logistics providers. In order to be more competitive and to meet increasing demand for the logistics services, the company will be expanding its container yard capacity adjacent to its current premises that can accommodate additional up to 10,000 TEUs per month. Kumpulan Metro Parking merancang untuk mengembangkan aktiviti perniagaannya di peringkat domestik dan antarabangsa, dengan Hong Kong dikenalpasti sebagai pangkalan operasi yang seterusnya. Filipina dan Indonesia juga termasuk di dalam rancangan pengembangan secara agresif bagi memanfaatkan peluang yang besar di negara-negara tersebut. Dalam semua penerokaannya di peringkat antarabangsa, Kumpulan Metro Parking akan terus menjalankan operasinya dengan lebih berhati-hati bagi memastikan risiko dan pendedahan yang minimum untuk memperolehi pulangan maksimum bagi semua pihak yang berkepentingan. 4. EPASA Shipping Agency Sdn Bhd EPASA Shipping Agency Sdn Bhd (EPASA) yang berpangkalan di Pasir Gudang, terlibat sebagai ejen perkhidmatan pengurusan penghantaran dan perkapalan serta mengendalikan perkhidmatan logistik perkarangan kontena. Para pelanggannya meliputi syarikat perkapalan terkemuka antarabangsa seperti Mitsui OSK Lines, China Shipping, Evergreen, DiPerdana, Kontena Nasional dan pelangganpelanggan lain termasuk Antara Steel Mills Sdn Bhd, Behn Meyer dan FPM (M) Sdn. Bhd. Perkarangan simpanan kontena EPASA di Pasir Gudang, yang mampu mengendalikan 10,000 TEU sebulan, dilengkapi dengan kemudahan moden dan diiktiraf sebagai antara penyedia logistik yang utama. Untuk meningkatkan daya saing dan memenuhi permintaan yang semakin bertambah bagi perkhidmatan logistik, EPASA akan mengembangkan kapasiti perkarangan simpanan kontenanya bersebelahan dengan premis sedia ada dengan tambahan kapasiti sehingga 10,000 TEU sebulan. Its ability to provide integrated and excellent services was translated into an increase of 21.73% in revenue from RM5.23 million in 2005 to RM6.37 million in Its PBT had also increased substantially by 97.35% from RM0.32 million in 2005 to RM0.63 million in Its logistics operation accounted for RM3.36 million or 52.87% of the company s revenue in 2006, while the balance came from freight forwarding activities. The container yard operations handled 118,183 TEUs or 7.36% more in 2006 compared to 110,074 TEUs in In order to continue its stellar performance, the company planned to diversify its earnings base by venturing into haulage business. The proposed haulage services will complement its logistic activities and provide an option for its clients to gain access to a more efficient and competitive integrated forwarding services. To minimise risks and exposure as well as improve the company s viability, the new venture will initially cater to EPASA s existing clients, mainly within Pasir Gudang and Tanjung Pelepas areas. The company could utilise its past experience in managing container and general cargo transport activities to facilitate the mobilisation of these new services. Other effort to improve its service quality included installation of a new software system which will enable an integrated, web-based paperless work environment which is in line with its customers requirement. Kemampuannya untuk menyediakan perkhidmatan bersepadu dan cemerlang terbukti dengan kenaikan perolehannya sebanyak 21.73% daripada RM5.23 juta pada tahun 2005 kepada RM6.37 juta pada tahun Keuntungan sebelum cukai juga turut melonjak pada kadar 97.35% daripada RM0.32 juta pada tahun 2005 kepada RM0.63 juta pada tahun Operasi logistiknya berjaya menyumbang sebanyak RM3.36 juta atau 52.87% daripada perolehan syarikat pada tahun 2006, manakala selebihnya disumbangkan oleh aktiviti pengurusan penghantaran. Operasi perkarangan simpanan kontena telah mengendalikan 118,183 TEU atau 7.36% lebih tinggi pada tahun 2006 berbanding 110,074 TEU pada tahun Bagi meneruskan prestasi cemerlangnya, syarikat merancang untuk mempelbagaikan asas pendapatannya dengan melibatkan diri dalam perkhidmatan pengangkutan (haulage). Perkhidmatan yang dicadangkan ini akan menjadi pelengkap kepada aktiviti logistik yang sedia ada dan seterusnya menawarkan kepelbagaian perkhidmatan yang bersepadu dengan lebih cekap dan berdaya saing kepada para pelanggannya. Untuk meminimumkan risiko dan pendedahan kewangan serta mempertingkatkan daya maju syarikat, pelaburan ini akan dibuat secara berperingkat-peringkat dengan mengambil kira keperluan permintaan daripada pelanggan EPASA yang sedia ada serta permintaan tambahan daripada pelanggan yang beroperasi di sekitar Pasir Gudang dan Tanjung Pelepas. Usaha juga diambil untuk mempertingkatkan kualiti perkhidmatannya melalui pemasangan sistem perisian baru yang lebih kemaskini dan berupaya mengintegrasikan kerja-kerja berasaskan web sejajar dengan keperluan para pelanggannya. w w w. s i n d o r a. c o m. m y 49

17 5. Sindora Timber Sdn Bhd 2006 was a challenging year for Sindora Timber Sdn Bhd (STSB) in view of its inability to procure new logging concession that subsequently resulted in the cessation of its sawmilling activities. Sawmilling had in the past been the main profit contributor to the company. Rationalisation and restructuring exercises undertaken to improve performance need time to produce a turnaround and create the desired impact. In the year under review, STSB had therefore recorded a dismal performance with a loss of RM2.63 million on the back of RM14.59 million revenue compared with PBT of RM0.11 million and revenue of RM17.09 million in High raw material costs, low quality sawn timber combined with depressed margin in a highly volatile export market had contributed to the loss position of the company. A continuous effort to improve efficiency and performance have been taken through outsourcing and contracting out certain activities and processes at door manufacturing and laminated scantlings operations to create value to the timber business. Other measures undertaken included improvement in asset utilisation through renting out the sawmilling machinery to external party, refocus on profitable core activities in laminated scantlings and mouldings and right sizing of manpower as well as other cost cutting measures. Towards the end of the year, another bold move was taken involving the implementation of the Intrapreneur Scheme at the ex-logging Heavy Machinery Unit which was left idle after the cessation of the logging activities in This unit is now a full fledged earthwork contracting company as a newly formed subsidiary of STSB, named General Access Sdn Bhd. Efforts to secure contracts within the Group s estates and with external parties were continuously pursued and the initiatives and commitment of the Intrapreneur is expected to create value and contribute positively to the Group in the upcoming years. 5. Sindora Timber Sdn Bhd 2006 merupakan tahun yang sangat mencabar bagi Sindora Timber Sdn Bhd (STSB) berikutan tiada lagi konsesi pembalakan baru yang diluluskan oleh kerajaan negeri yang mengakibatkan STSB terpaksa memberhentikan aktiviti pengilangan kayu bergergajinya. Aktiviti pengilangan kayu bergergaji merupakan penyumbang utama keuntungan syarikat selama ini. Langkah penyusunan dan penstrukturan semula yang telah dilaksanakan untuk mempertingkatkan prestasi, memerlukan masa yang lebih panjang untuk menghasilkan pemulihan dan kesan positif yang diharapkan. Pada tahun yang ditinjau, STSB telah mencatat prestasi yang tidak memberangsangkan dengan kerugian sebanyak RM2.63 juta daripada perolehannya sebanyak RM14.59 juta berbanding keuntungan sebelum cukai sebanyak RM0.11 juta dan perolehan sebanyak RM17.09 juta pada tahun Kos bahan mentah yang tinggi, kayu bergergaji berkualiti rendah serta margin yang rendah dalam pasaran eksport yang sangat kompetitif serta sukar diramal telah menyumbang kepada prestasi yang tidak memberangsangkan tersebut. Usaha berterusan telah diambil untuk memperbaiki tahap kecekapan dan prestasi termasuk mencari sumber dari pihak luar dan melantik kontraktor secara upah kerja mengikut output bagi beberapa aktiviti dan proses tertentu dalam operasi pengeluaran pintu dan beruti berlapis ke arah menambah nilai keseluruhan bisnes perkayuan tersebut. Langkah-langkah lain yang diambil untuk meningkatkan produktiviti dan mengurangkan kos termasuk mempertingkatkan penggunaan aset melalui penyewaan jentera pengilangan kayu bergergaji yang tidak digunakan kepada pihak luar, memfokus semula kepada aktiviti teras yang menguntungkan terutamanya dalam aktiviti beruti berlapis dan kayu kumai serta pengecilan saiz tenaga kerja mengikut keperluan semasa. Menjelang akhir tahun 2006, satu langkah berani dan inovatif telah diambil melibatkan pelaksanaan Skim Intrapreneur di Unit Jentera Pembalakan Berat yang tidak beroperasi selepas pemberhentian aktiviti pembalakan pada tahun Unit tersebut kini menjadi syarikat anak STSB yang baru 50 Sindora Berhad (13418-K)

18 Corporate Statement penyata korporat ditubuhkan yang dikenali sebagai General Access Sdn Bhd dan merupakan sebuah syarikat yang menjalankan aktiviti kontrak kerja tanah. Usaha untuk mendapatkan kontrak di dalam ladang-ladang Kumpulan dan pihak luar telah dijalankan secara berterusan dan inisiatif serta komitmen Pengurus Usahawan dijangka akan menambah nilai dan menyumbang secara positif kepada Kumpulan pada tahuntahun yang akan datang. Tumpuan paling utama adalah mempertingkatkan keuntungan dan menambah nilai bagi keseluruhan rantaian nilai bisnes perkayuan. Walau bagaimanapun, pelbagai cabaran getir perlu dihadapi dan ditangani oleh STSB terutamanya pengaruh dan kesan persekitaran luaran yang tidak menentu dalam industri perkayuan secara keseluruhan. Ekoran daripada cabaran dan tekanan yang tidak menentu ini, Kumpulan telah memutuskan untuk mengkaji semula sepenuhnya kedudukan strategiknya dalam aktiviti perkayuan bagi mengelakkan syarikat terus mengalami kerugian hasil penurunan nilai aktiviti ini. The immediate focus would be in improving earnings and creating value for the entire value chain of the timber business. However, in view of the tough challenges that STSB had to endure due to the fact that the external environment poses strong long term challenges to the overall timber industry, and in order not to destroy value further, the Group has decided to totally review its strategic position in the company. 6. Willis (Malaysia) Sdn Bhd Willis (Malaysia) Sdn Bhd (Willis) continues to remain as the top performer among Intrapreneur Venture companies within the Group. It operates as an insurance broker providing insurance and reinsurance broking and risk management consulting services. Since its establishment, Willis has had the experience of providing services to a wide-range of clientele, including among them corporations involved in large construction projects, aviation, marine, petrochemicals, power and telecommunication, privatised water utility, hospitality, financial institutions and risk management. The company has charted remarkable performance in the year under review, buoyed by strong growth in the general insurance sector with higher premiums recorded in all its major business portfolios. This resulted in higher revenue of RM24.33 million and PBT of RM16.46 million, which was a significant milestone in Willis s profit record achievement in its 30-year history. Comparatively, Willis registered revenue and PBT of RM19.72 million and RM11.95 million respectively in the previous year. The success of the company can be attributed to its continued commitment to provide innovative and creative solutions to all its clients with excellent service from a pool of well trained, highly professional and forward looking management and staffs. Willis also continues to benefit from its international partner, Willis International through its expertise and on-going product development capabilities in the insurance business. The continued liberalisation of the insurance industry provides many challenges as well as opportunities. The company is well prepared to meet such challenges and will benefit from the opportunities presented. 6. Willis (Malaysia) Sdn Bhd Willis (Malaysia) Sdn Bhd (Willis) kekal sebagai syarikat berprestasi paling tinggi di kalangan syarikat-syarikat Bisnes Intrapreneur Venture di dalam Kumpulan. Ia beroperasi sebagai broker insurans yang menyediakan perkhidmatan pembrokeran insurans dan penginsuranan semula serta perundingan pengurusan risiko. Sejak ditubuhkan, Willis berpengalaman dalam menyediakan perkhidmatan kepada pelbagai pelanggan, termasuk antaranya syarikat yang terlibat dalam projekprojek pembinaan yang besar, penerbangan, marin, petrokimia, tenaga dan telekomunikasi, penswastaan bekalan air, hospitaliti, institusi kewangan dan pengurusan risiko. Syarikat tersebut telah mencatat prestasi yang mengkagumkan pada tahun yang ditinjau berikutan pertumbuhan kukuh dalam sektor insurans am dengan premium yang lebih tinggi dicatat dalam semua portfolio perniagaan utamanya. Willis telah berjaya menjana perolehan yang lebih tinggi sebanyak RM24.33 juta dan keuntungan sebelum cukai sebanyak RM16.46 juta, yang merupakan rekod kejayaan cemerlang pencapaian keuntungan Willis dalam sejarahnya selama 30 tahun. Secara perbandingan, Willis telah mencatat perolehan sebanyak RM19.72 juta dan keuntungan sebelum cukai sebanyak RM11.95 juta pada tahun Kejayaan tersebut adalah hasil daripada komitmen berterusan dalam menyediakan penyelesaian berinovatif dan kreatif kepada semua pelanggan melalui perkhidmatan cemerlang yang diberikan oleh pihak pengurusan dan anggota pekerjanya yang terlatih serta mempunyai profesionalisma yang tinggi dan berpandangan jauh. Willis juga akan terus memperolehi manfaat daripada rakan kongsi antarabangsanya iaitu Willis International, melalui kepakaran dan kemampuan pembangunan produk berterusannya dalam bisnes insurans. Liberalisasi industri insurans yang berterusan memberikan pelbagai cabaran serta peluang. Syarikat sentiasa bersedia untuk menghadapi cabaran tersebut dan akan memanfaatkan peluang-peluang yang terbuka luas. w w w. s i n d o r a. c o m. m y 51

19 7. MM Vitaoils Sdn Bhd The acquisition of MM Vitaoils Sdn Bhd (MM Vitaoils) in 2005 has enabled Sindora to expand into food-based manufacturing business and take advantage from the growing demand for edible oils and fats. MM Vitaoils manufactures cooking oils, margarine, vegetable ghee, and shortening mainly for exports. The company currently produces and exports over 20 brands of quality edible oil products of which more than 98% are exported under various brand names that included Marvelloso, Palmas, Serimas, Qualitaste and Blossommm. MM Vitaoils current export market covers more than 40 countries mainly in Europe and the Eastern European countries like Romania, Albania, Ukraine, Bulgaria, Russia, Kazakhstan and Uzbekistan. During the year under review, MM Vitaoils registered RM55.75 million in revenue, with PBT of RM2.90 million. This performance improvement was mainly due to availability of much needed working capital and a change in its business approach by shifting product focus from liquid cooking oils to edible fats, comprising margarine, pastry margarine, ghee and shortening, which generated higher margin. Apart from that, MM Vitaoils has increased its plant capacity with a fully automated processing line that produced a range of edible fats products to meet the increasing worldwide demand. Furthermore, the production lines are equipped with Supervisory Control and Data Acquisition (SCADA) system as a controller to reduce the initial set-up difficulty and avoid human error. MM Vitaoils continues its pursuit of producing excellent quality products that are domestically and internationally recognised and accepted. Towards this end, MM Vitaoils was awarded with various quality certifications including ISO 9001:2000, Good Manufacturing Practice (GMP), Hazard Analysis Critical Control Point (HACCP) and U.S. Food and Drug Administration (FDA). MM Vitaoils Serimas is also recognised as the World s Best Brands in the Asia Pacific Award for Best Brands in Consumer Palm Cooking Oil from the Brand Laureate and recently, it was awarded 2006 Industrial Excellence Award from the Ministry of International Trade and Industry. Moving forward, MM Vitaoils priority will be in improving its productivity and efficiency to ensure that it meets its financial obligation and enhance its performance for value creation and maximum returns to all its stakeholders. 8. AmanahRaya JMF Asset Management Sdn Bhd AmanahRaya JMF Asset Management Sdn Bhd (AR-JMF) is involved in fund management and its related services and the company is licensed to deal in securities as well as provide corporate advisory, custodian and nominee services. In the year under review, AR-JMF managed to record significant increase of 97.40% in revenue and other operating income to RM12.93 million against RM6.55 million in 2005, while its PBT has also increased by 92.15% from RM2.48 million in 2005 to RM4.76 million in The significant improvement in performance was mainly due to its substantial access to a larger fund size from Amanah Raya Berhad (ARB), a public trustee company that had bought 55% interest of AR-JMF from Sindora in late AR-JMF s fund size under its management has subsequently ballooned to RM5 billion at the end of 2006 compared with RM300 million prior to being a subsidiary of ARB. The entry of ARB into AR-JMF has also given the latter an opportunity to expand its business portfolio. Currently AR-JMF is entrusted with the task of managing ARB funds, AmanahRaya Real Estate Investment Trust (AmanahRaya REIT) and the Kumpulan Wang Bersama Fund. The Kumpulan Wang Bersama Fund size alone has grown substantially from RM1.70 billion at the end of 2004 to RM3.67 billion as at 31 December Sindora Berhad (13418-K)

20 Corporate Statement penyata korporat Penyeliaan dan Pemerolehan Data (SCADA) sebagai mekanisma untuk melancarkan perjalanan operasi pengeluaran dan mengurangkan kesilapan manusia. MM Vitaoils akan meneruskan usahanya untuk mengeluarkan produk-produk berkualiti tinggi yang diiktiraf dan diterima di dalam negara serta di peringkat antarabangsa. Sejauh ini, MM Vitaoils telah dianugerahkan dengan pelbagai pengiktirafan kualiti termasuk ISO 9001:2000, Amalan Perkilangan Terbaik (GMP), Titik Kawalan Kritikal Analisis Bahaya (HACCP) dan U.S. Food and Drug Administration (FDA). Serimas keluaran MM Vitaoils juga telah diiktiraf sebagai Jenama Terbaik Dunia di dalam Anugerah Jenama Terbaik Asia Pasifik bagi Barangan Pengguna Minyak Masak Sawit daripada the Brand Laureate dan barubaru ini, ia telah dianugerahkan dengan Anugerah Kecemerlangan Perindustrian 2006 daripada Kementerian Perdagangan Antarabangsa dan Industri. Untuk melangkah dengan lebih jauh ke hadapan, keutamaan MM Vitaoils adalah untuk meningkatkan produktiviti dan kecekapan bagi memastikan supaya ia memenuhi obligasi kewangannya dan mempertingkatkan prestasi untuk menambah nilai dan pulangan maksimum bagi semua pihak berkepentingannya. 7. MM Vitaoils Sdn Bhd Pengambilalihan MM Vitaoils Sdn Bhd (MM Vitaoils) pada tahun 2005 telah membolehkan Sindora berkembang ke dalam bisnes perkilangan berasaskan makanan dan memanfaatkan pertambahan permintaan bagi minyak dan lelemak makanan. MM Vitaoils mengeluarkan minyak masak, marjerin, minyak dan lelemak sayuran terutamanya untuk pasaran eksport. Pada masa ini, MM Vitaoils mengeluarkan dan mengeksport lebih 20 jenama produk berkualiti yang mana lebih 98% dieksport di bawah jenama Marvelloso, Palmas, Serimas, Qualitaste dan Blossommm. Produk keluaran MM Vitaoils dieksport ke lebih 40 buah negara yang kebanyakannya tertumpu di negaranegara Eropah dan Eropah Timur seperti Romania, Albania, Ukraine, Bulgaria, Rusia, Kazakhstan dan Uzbekistan. Pada tahun yang ditinjau, MM Vitaoils mencatat perolehan sebanyak RM55.75 juta dengan keuntungan sebelum cukai sebanyak RM2.90 juta. Peningkatan prestasi ini berpunca daripada kecukupan modal kerja yang amat diperlukan daripada pembiayaan pinjaman bank dan perubahan dalam pendekatan perniagaannya dengan mengalihkan fokus produk daripada minyak masak kepada lelemak seperti marjerin, marjerin pastry dan minyak sapi yang menjana margin keuntungan yang lebih tinggi. Selain daripada itu, MM Vitaoils juga telah meningkatkan kapasiti kilangnya dengan pemasangan fasiliti pemprosesan secara automatik yang mampu mengeluarkan pelbagai produk lelemak untuk memenuhi keperluan permintaan dunia yang kian meningkat. Fasiliti pengeluaran itu juga dilengkapi dengan sistem Kawalan 8. AmanahRaya JMF Asset Management Sdn Bhd AmanahRaya JMF Asset Management Sdn Bhd (AR-JMF) terlibat dalam pengurusan dana dan perkhidmatan berkaitan. Syarikat tersebut mempunyai lesen untuk berurusan dalam sekuriti serta menyediakan khidmat nasihat, perkhidmatan penjagaan dan penamaan korporat. Pada tahun yang ditinjau, AR-JMF berjaya mencatat kenaikan perolehan yang ketara sebanyak 97.40% dan pendapatan operasi lain sebanyak RM12.93 juta berbanding RM6.55 juta pada tahun 2005, manakala keuntungan sebelum cukai juga telah meningkat sebanyak 92.15% daripada RM2.48 juta pada tahun 2005 kepada RM4.76 juta pada tahun Peningkatan ketara prestasi tersebut sebahagian besarnya disebabkan oleh akses kepada dana yang lebih besar daripada Amanah Raya Berhad (ARB), sebuah syarikat pemegang amanah awam yang telah membeli 55% kepentingan AR-JMF daripada Sindora pada penghujung tahun Saiz dana AR-JMF di bawah pengurusannya telah berkembang kepada RM5 bilion pada akhir tahun 2006 berbanding RM300 juta sebelum ia menjadi syarikat anak ARB. w w w. s i n d o r a. c o m. m y 53

21 As Managers of AmanahRaya REIT, which is listed on the Main Board of Bursa Malaysia Securities Berhad, AR-JMF is responsible to ensure the optimal performance of the REIT and enhancement of the quality of portfolio of the real estate assets to provide stable distributions of returns to the unitholders. AR-JMF has a team of highly qualified investment specialists with years of experience in the local and international financial markets to support its business growth and expansion. This will enable AR-JMF to continue delivering consistent returns whilst building value for all its clients investments as reflected in its 10- year track record of meeting and exceeding clients investment expectations. The prospect for AR-JMF remains bright due to the increasing demand for asset management services. Its excellent track record in delivering above expectation fund performance is a key factor that will continue to aid AR-JMF in registering commendable performance in the years to come. Penyertaan ARB ke dalam AR-JMF juga telah memberi AR-JMF peluang untuk mengembangkan portfolio bisnesnya. Pada masa ini AR-JMF telah diberi tugas untuk menguruskan dana ARB, Dana Amanah Pelaburan Hartanah AmanahRaya (AmanahRaya REIT) dan Dana daripada Kumpulan Wang Simpanan Pekerja. Saiz Dana Kumpulan Wang Bersama sahaja telah melonjak daripada RM1.70 bilion pada akhir tahun 2004 kepada RM3.67 bilion pada 31 Disember Sebagai Pengurus AmanahRaya REIT, yang disenaraikan di Papan Utama Bursa Malaysia Securities Berhad, AR-JMF bertanggungjawab memastikan supaya prestasi optimum REIT dan peningkatan kualiti portfolio aset hartanah bagi membolehkan pengagihan pulangan yang stabil kepada para pemegang unit. AR-JMF mempunyai satu kumpulan pengurusan dan anggota pekerja yang berkelayakan dengan pengalaman yang luas dalam pasaran kewangan tempatan dan antarabangsa. Ini akan membolehkan AR-JMF terus menyediakan pulangan secara konsisten dan pada masa yang sama, membina nilai bagi semua pelaburan untuk pelanggannya seperti yang dibuktikan daripada rekod pencapaian 10 tahunnya di mana AR-JMF telah berjaya memenuhi dan memberi pulangan melebihi jangkaan para pelanggannya. Prospek AR-JMF kekal cerah berikutan peningkatan permintaan bagi perkhidmatan pengurusan aset. Rekod pencapaiannya yang cemerlang merupakan faktor penting yang akan terus membantu AR-JMF menjadi pilihan pelabur dan seterusnya mencatat prestasi yang lebih baik pada tahun-tahun yang akan datang. Impact of New Financial Reporting Standards Kesan Piawaian Laporan Kewangan Baru In line with the objective to streamline the Malaysian Accounting Standards to be at par with the International Financial Reporting Standards, the Malaysian Accounting Standards Board (MASB) has introduced and approved new or revised Financial Reporting Standards (FRS) of which a number of standards are applicable to Sindora. The impact is reflected in Sindora s financial statements for the year ended 31 December With the implementation of the FRS, a number of the Group s accounting policies was changed in It has also resulted in several adjustments of the Group s financial results for Among the key areas which impacted the Group s results are the cessation of annual goodwill amortisation, capitalisation of the replanting expenditure which was previously expensed out, presentation of minority interest, share of net after-tax results of associates, and other disclosures. Adoption of the new FRS has also resulted in a retrospective change in the accounting policy relating to the classification of Sindora s investment in properties. Selaras dengan objektif untuk memperkemaskan Piawaian Perakaunan Malaysia agar setaraf dengan Piawaian Laporan Kewangan Antarabangsa, Lembaga Piawaian Perakaunan Malaysia (MASB) telah memperkenal dan meluluskan Piawaian Laporan Kewangan (FRS) baru atau yang telah disemak semula di mana beberapa piawaian tersebut perlu digunapakai oleh Sindora. Implikasi daripada piawaian tersebut telah diambilkira di dalam penyata kewangan Sindora bagi tahun berakhir 31 Disember Dengan pelaksanaan FRS, beberapa dasar perakaunan Kumpulan telah berubah pada tahun Ia juga telah menyebabkan beberapa penyelarasan dalam keputusan kewangan Kumpulan bagi tahun Antara implikasi FRS yang mendatangkan kesan kepada kedudukan kewangan Kumpulan adalah perubahan terhadap pelunasan muhibah tahunan yang telah dihentikan, perbelanjaan penanaman semula yang sebelum ini dikira sebagai perbelanjaan yang kini diklasifikasikan semula sebagai perbelanjaan modal, pengelasan semula kepentingan minoriti, pembahagian keuntungan bersih selepas cukai bagi syarikat-syarikat bersekutu, dan beberapa perkara berkaitan perakaunan yang lain. FRS baru yang diterimapakai juga telah menyebabkan perubahan retrospektif dalam dasar perakaunan berkaitan pengkelasan pelaburan hartanah Sindora. 54 Sindora Berhad (13418-K)

22 Corporate Statement penyata korporat ISO CERTIFICATION During the year, the Company was successfully accredited with ISO 9001:2000 under the scope of Provision of Investment and Monitoring of Business and Subsidiaries from SIRIM. This signifies that the Company has put in place a system of standard quality to monitor and assess its investments in the Intrapreneur Venture companies. Sindora Palm Oil Mill is also certified with MS ISO 9001:2000 and it is in the process of obtaining ISO 14001:2004 certification for Environmental Management from SIRIM. The certification is expected to be granted in Both accreditations are testimonies to the Company s firm commitment towards upholding quality culture in all its business undertakings to empower its people and ultimately maximise returns to all its stakeholders. HUMAN RESOURCE DEVELOPMENT The Group s business infrastructure and human capital were re-organised and realigned to enable the Group to better respond to challenges apart from strengthening its monitoring and control measures, especially over the Intrapreneur Venture companies. Professionalism and talent among all employees Group-wide have been nurtured to their full potential in pursuit of organisational goals. The Group, which is involved in highly diversified activities, demanded that it needs to be equipped with employees of the right blend of professionalism, knowledge, skills, common corporate values and attitude in order to achieve greater heights. Sindora recognises the importance of realigning its human resources with business priorities as business dynamism cannot thrive without solid manpower know-how and skills from diverse background. Measures taken included new recruitment, redeployment of executives within the Group and knowledge enhancement through training, courses and seminars. Employees are strongly encouraged to pursue life-long learning and attain professionally accredited qualifications such as MBA, CIA, MIA and CPA. At the senior management and directorate level, continuing educational enhancement programmes on corporate governance, fiduciary management and effective budgetary guidelines, as well as mergers and acquisitions skills and techniques featured strongly in the development agenda and goals for the year. The Group has also put in place second liners in respective Intrapreneur Venture companies as its measure to groom successors. To complement the Group s effort in establishing potential successors, the Group may take advantage of its access to a pool of Intrapreneurs groomed by JCorp under its Intrapreneur Equity Participation Scheme. PENSIJILAN ISO Pada tahun ini, Syarikat telah berjaya diakreditasi dengan ISO 9001:2000 di bawah skop Peruntukan Pelaburan dan Pemantauan Bisnes dan Syarikat Subsidiari daripada SIRIM. Ini menunjukkan bahawa Syarikat telah berjaya melaksanakan satu sistem kualiti mengikut piawaian bagi memantau dan menilai pelaburannya di dalam syarikat-syarikat Bisnes Intrapreneur Venture. Kilang Minyak Sawit Sindora juga diiktiraf dengan MS ISO 9001:2000 dan ia sedang dalam proses untuk mendapatkan pensijilan ISO 14001:2004 bagi Pengurusan Alam Sekitar daripada SIRIM. Pensijilan tersebut dijangka akan dapat diperolehi pada tahun Kedua-dua akreditasi tersebut adalah bukti komitmen teguh Syarikat dalam mengekalkan budaya kualiti dalam semua aktiviti perniagaannya di kalangan anggota pekerja dan sebagai usaha ke arah memaksimumkan pulangan kepada semua pihak yang berkepentingan. PEMBANGUNAN SUMBER MANUSIA Infrastruktur bisnes dan modal insan Kumpulan telah disusun semula dan diselaraskan bagi membolehkan Kumpulan bertindak balas dengan lebih baik terhadap cabaran serta mengukuhkan langkah-langkah pemantauan dan kawalan, khususnya ke atas syarikat-syarikat Bisnes Intrapreneur Venture. Profesionalisma dan bakat di kalangan anggota pekerja di segenap lapisan telah dipupuk untuk merealisasikan sepenuhnya potensi mereka dalam usaha mencapai matlamat organisasi. Aktiviti Kumpulan yang pelbagai, memerlukan satu kumpulan anggota pekerja yang dilengkapkan dengan pelbagai latar belakang dan tahap profesionalisma, pengetahuan, kemahiran, nilai korporat yang seragam dan sikap yang sesuai untuk mencapai kejayaan yang lebih cemerlang. Sindora sedar tentang peri pentingnya menyelaraskan sumber manusia secara optimum dengan keperluan perniagaan kerana dinamisma bisnes tidak dapat berkembang tanpa kehadiran sumber manusia yang berpengetahuan dan berkemahiran tinggi dari pelbagai latar belakang. Langkah-langkah yang diambil termasuk pengambilan pekerja baru, penempatan semula para eksekutif di dalam Kumpulan dan peningkatan pengetahuan melalui latihan, kursus dan seminar. Anggota pekerja amat digalakkan untuk meneruskan p e n i n g k a t a n k e m a h i r a n d a n pengetahuan melalui pembelajaran secara berterusan dan mendapatkan kelayakan profesional yang diakreditasi seperti MBA, CIA, MIA dan CPA. Di peringkat pengarah dan pengurusan kanan, program peningkatan pendidikan berterusan berhubung tadbir urus korporat, pengurusan fidusiari dan garis panduan perancangan strategik serta kemahiran dan teknik pengambilalihan dan penggabungan syarikat amat diutamakan dalam agenda dan matlamat pembangunan sumber manusianya. Kumpulan juga telah menempatkan para eksekutif sokongan di setiap syarikat Bisnes Intrapreneur Venture sebagai langkah untuk memupuk dan membina barisan pengurusan pelapis. Dalam hal ini, Kumpulan juga akan mengambil peluang dan memanfaatkan sepenuhnya akses kepada kumpulan Usahawan Dalaman yang dilahirkan oleh JCorp di bawah Skim Intrapreneur Milikan Ekuiti. w w w. s i n d o r a. c o m. m y 55

23 As an improvement drive for operational efficiency and individual accountability throughout the Group, performance appraisal was adopted and individual Key Performance Indicators (KPIs) was used as a basis in determining emoluments, rewards and incentives of the management and staffs. These KPIs are set out based on pre-determined objectives and targets that are mutually agreed by both employees and the companies. This approach is more market-driven to improve motivation and enhance commitment of everyone involved to positively contribute towards targeted achievement of the Group. Dalam usaha untuk meningkatkan kecekapan operasi dan kebertanggungjawaban individu di semua syarikat di dalam Kumpulan, penilaian prestasi dan Petunjuk Prestasi Utama (KPI) telah diterimapakai dan digunakan sebagai asas dalam menentukan pakej emolumen, ganjaran dan insentif bagi pengurusan dan anggota pekerja. KPI tersebut telah ditetapkan berdasarkan objektif dan sasaran yang telah ditentukan terlebih dahulu dan dipersetujui bersama oleh Pengurus Usahawan dan syarikat. Pendekatan yang lebih berasaskan pasaran ini bertujuan untuk mempertingkatkan motivasi dan meninggikan komitmen semua pihak yang terlibat agar menyumbang secara positif ke arah pencapaian sasaran Kumpulan. Jumlah anggota pekerja Kumpulan pada 31 Disember 2006 adalah seramai 2,367 orang berbanding 2,139 pada tahun sebelumnya, meningkat 10.66% hasil daripada pengambilalihan EA Tech dan pengembangan syarikat-syarikat Bisnes Intrapreneur Venture sedia ada. Total staff strength of the Group as at 31 December 2006 was 2,367 compared with 2,139 in the previous year, an increase of 10.66% due to acquisition of EA Tech and expansion of existing Intrapreneur Venture companies. Continuous quality improvement programmes were also implemented throughout the year. This commitment to quality is a reflection of the Group s on-going quality drive and with the concerted effort from all management and staff, it will continue to carve high level achievements in quality competitions. At the same time, annual ICC competitions and Suggestion Scheme will continue to be developed as the platform to build and challenge all the staff and management in thinking out of the box for problem solving and generating new ideas and work methods. The Group s continued survival and future success in sustaining high level performance and achievements will be guided more by the entrepreneurial capabilities of its leadership and the initiative and drive of its management teams. The spirit of enterprise will continue to be cultivated, especially on the part of the intrapreneurs leading Sindora s Intrapreneur Venture companies. At the same time, priorities will be set to develop and grow talented executives to spearhead various business units, not only to ensure continuity but also to chart new paths for future corporate growth. Program peningkatan kualiti telah turut dilaksanakan secara berterusan sepanjang tahun. Komitmen terhadap kualiti ini dapat dilihat melalui pengembelingan usaha bersepadu pihak pengurusan dan anggota pekerjanya. Peningkatan pencapaian kualiti dapat direalisasikan melalui pelbagai gerakan aktiviti kualiti yang dianjurkan oleh Kumpulan. Pada masa yang sama, pertandingan ICC tahunan dan Skim Cadangan Cempaka akan terus dikembangkan sebagai platform untuk membina dan menggalakkan semua anggota pekerja dan pengurusan supaya dapat berfikir secara lebih kreatif di dalam menyelesaikan masalah serta menjana idea-idea dan kaedah kerja yang baru dan kemaskini. Kesinambungan dan kejayaan Kumpulan dalam mengekalkan prestasi dan pencapaian peringkat tertinggi adalah bergantung kepada kemampuan keusahawanan dan inisiatif serta daya usaha kumpulan pengurusannya. Semangat keusahawanan akan terus dipupuk, khususnya di kalangan Pengurus Usahawan yang menerajui syarikat-syarikat Intrapreneur Venture Kumpulan Sindora. Pada masa yang sama, keutamaan turut diberikan terhadap pembangunan keusahawanan di kalangan eksekutif yang menunjukkan bakat dan keinginan untuk mengetuai pelbagai unit bisnesnya, bukan sahaja untuk memastikan kesinambungan, malah sebagai langkah jangka panjang untuk memastikan pertumbuhan korporat secara berterusan. 56 Sindora Berhad (13418-K)

24 Corporate Statement penyata korporat Outlook for 2007 Tinjauan tahun 2007 The Malaysian Economy The Malaysian economy is expected to maintain its growth momentum in 2007, despite increasing challenges due to wide global imbalances and high interest rates. GDP growth for 2007 is expected to be 6%, driven mostly by private domestic demand. In particular, private consumption is expected to remain strong due to higher disposable income, stable employment and modest inflation outlook. Private investment is also expected to gather greater momentum in 2007 in line with expected sustained domestic investments and inflows of foreign direct investments in manufacturing and services sectors. External demand is expected to improve based on the projection that growth in the global economy will be sustained at 2.6%. In line with the positive growth outlook, Malaysia s economic fundamentals are expected to remain healthy with unemployment and inflation rates to remain low at manageable levels. Malaysia s external position, based on the projected large surplus in the balance of payments, is projected to remain strong. Intrapreneur Venture as Growth Drivers Amidst the positive growth outlook, the Group s Intrapreneur Venture companies are expected to enhance cost efficiencies in the production and delivery of goods and services to the customers. Sindora will continue to capitalise on the strong economic fundamentals to expand and grow its core business entities in Intrapreneur Venture. The acquisitions of Intrapreneur Venture companies have proven successful and yielded splendid financial results overall as expected. The Group s intrapreneurs have laid down plans to grow their respective businesses to become more robust and profitable in the years to come. At the same time, the Group s own financial stability, manageable gearing and consistent profit track record will allow it to continue to provide institutional support and empowerment, lend credibility and enhance confidence all round. The Intrapreneur Venture concept has been widely accepted by the business community and this can be seen from encouraging responses and greater willingness on the part of successful entrepreneurs to buy into Sindora s Intrapreneur Venture Scheme and come on board. The circumstances are therefore favourable towards enabling the intrapreneurs to fully express their entrepreneurial talent and skills, grow their respective businesses and sustain the creation of future value. The Group will therefore continue to strengthen its strategic corporate positioning for long term growth through the chosen Intrapreneur Venture approach. Its continual commitment to improvement in business infrastructure and human capital will enable it to better respond to challenges. The Group expects to be on a more sustainable growth path, drawing drive and energy from inner corporate strengths coupled with the strong domestic economic momentum. Ekonomi Malaysia Ekonomi Malaysia dijangka akan mengekalkan momentum pertumbuhannya pada tahun 2007, walaupun cabaran yang semakin getir terpaksa dihadapi disebabkan oleh ketidakseimbangan global dan kadar faedah yang tinggi. Pertumbuhan KDNK bagi tahun 2007 dijangka pada kadar 6%, didorong sebahagian besarnya oleh permintaan domestik swasta. Secara khususnya, penggunaan swasta dijangka kekal kukuh disebabkan oleh pendapatan boleh belanja yang lebih tinggi, pasaran pekerjaan yang stabil dan unjuran inflasi yang sederhana. Pelaburan swasta juga dijangka akan mencatat momentum yang lebih mantap pada tahun 2007, sejajar dengan jangkaan pelaburan domestik yang mampan dan aliran masuk pelaburan langsung asing ke dalam sektor perkilangan dan perkhidmatan. Permintaan luaran dijangka akan mengalami peningkatan berdasarkan kepada unjuran bahawa ekonomi global akan kekal pada tahap 2.6%. Sejajar dengan tinjauan pertumbuhan yang positif tersebut, asas ekonomi Malaysia dijangka akan kekal teguh dengan kadar pengangguran dan inflasi kekal rendah di tahap yang boleh diurus. Kedudukan luaran Malaysia berdasarkan kepada unjuran lebihan yang besar dalam imbangan pembayaran dijangka kekal kukuh. Bisnes Intrapreneur Venture sebagai Pemangkin Pertumbuhan Persekitaran dan pertumbuhan ekonomi yang diramal positif memungkinkan syarikat-syarikat Bisnes Intrapreneur Venture Kumpulan mempertingkatkan kecekapan dan selanjutnya mengurangkan kos dalam setiap proses pengeluaran barangan dan perkhidmatan kepada pelanggan. Sindora akan terus memanfaatkan asas ekonomi yang kukuh ini untuk memperluas dan mengembangkan aktiviti terasnya di dalam Bisnes Intrapreneur Venture. Pengambilalihan syarikat-syarikat Bisnes Intrapreneur Venture telah terbukti berjaya dan menghasilkan keputusan kewangan yang membanggakan secara keseluruhan sebagaimana yang dijangkakan. Para Pengurus Usahawan Kumpulan telah merangka rancangan untuk mengembangkan perniagaan masing-masing agar menjadi lebih mantap dan menguntungkan pada tahun-tahun mendatang. Pada masa yang sama, kekukuhan kewangan, kadar gearan yang munasabah dan rekod pencapaian keuntungan Kumpulan yang konsisten akan membolehkannya terus memberikan sokongan dan dorongan institusi serta memberi lebih tanggungjawab, autonomi dan kredibiliti kepada semua segmen Bisnes Intrapreneur Venturenya. Konsep Bisnes Intrapreneur Venture telah diterima secara meluas oleh komuniti bisnes dan ini boleh dilihat daripada maklumbalas yang memberangsangkan di kalangan para usahawan yang menunjukkan keyakinan untuk menyertai Skim Bisnes Intrapreneur Venture Sindora. Keadaan yang amat memberangsangkan ini membolehkan para usahawan dalaman terus mempamerkan bakat dan kemahiran keusahawanan mereka sepenuhnya dalam usaha mengembang serta menambah nilai perniagaan masing-masing di masa depan. Justeru, Kumpulan akan terus mengukuhkan kedudukan strategik korporatnya untuk mencapai pertumbuhan jangka panjang melalui pendekatan Bisnes Intrapreneur Venture yang dilaksanakan. Komitmen berterusan Kumpulan untuk mempertingkatkan infrastruktur bisnes dan sumber manusia akan membolehkan ia bertindak balas secara lebih berkesan dalam menghadapi sebarang cabaran. Kumpulan menjangka akan merintis pertumbuhan yang lebih mampan, memanfaatkan dorongan dan tenaga daripada kekuatan dalaman korporat serta momentum ekonomi domestik yang kukuh. w w w. s i n d o r a. c o m. m y 57

25 Plantation Business as Cashflow and Income Generator The prospects of Plantation Business remain promising as in the near term, it will benefit directly from the strengthening of palm oil market fundamentals and favourable CPO prices that analysts predicted will average between RM1,600 and RM1,800 per metric tonne in High demand for CPO in bio-diesel and higher prices of soyabean and rapeseed oils in US and Europe had strengthened the CPO prices. Higher palm oil prices should contribute positively towards the Group s bottom line and much needed cashflows. The Group s aim towards higher value addition and growth of the Plantation Business will be on the back of higher CPO output as well as improved productivity and expanded matured areas. Price of rubber, which is trading at a 20-year high, is expected to trend upwards at least over the next two years. The price increases were mainly driven by strong demand from newly emerging economies like China and India as well as potential shortage in global production. Strong palm oil and rubber markets fundamentals, coupled with wealth of technical expertise and experience of the appointed management agents, EPA Management Sdn Bhd, have provided the Group with immediate access to quality markets, synergistic advantages and competitive edge that will finally contribute towards maximum value creation. CONCLUSION In its pursuit of business growth, Sindora will adhere to good corporate governance practices, internal control system, sound risk management and prudent financial policies and practices in order to support sustainable long-term growth and profitability of the Group for the benefit of all stakeholders. The Group will always be mindful of the need to meet the rising expectations of its shareholders, customers, management and staff as well as regulators in sustaining longterm growth and enhancing value all round. Maximising shareholders value is the Group s topmost priority. Thus, the Group will judiciously evaluate all potential acquisitions to add and bolster its revenue streams with further acquisitions to be very much influenced by achievable return on investments, effective cost controls and presence of strong entrepreneurial and business management capabilities. The Group will continue to provide an integrated platform for all its operating businesses to maximise synergies, and further develop networks and effectively enhance asset values all round. The Group is mindful of its Corporate Social Responsibility and is committed to continue to support and encourage worthy social causes as part of the Group s contribution to society and nation building. Networking with and providing strategic support to meet the needs of high performance non-governmental organisations (NGOs) will enhance the Group s corporate reputation and standing. Sindora s priority, however, will continue to be given to causes associated with programmes to develop and nurture entrepreneurial talent from among young Malaysians. The selection of NGOs with definite entrepreneur development agendas was deliberate, as these causes are closely aligned with the fundamental aims of the Group s own Intrapreneur Venture Business. Indeed, the Group is well-positioned to seize opportunities provided by the sustained economic growth and the new economic landscape that is emerging, which incidentally favours organisations that are entrepreneurial, innovative, focused and empowered as well as those that are strong, competitive, resilient and up to the challenge. The new corporate critical mass acquired through Intrapreneur Venture investments provide the Group with greater economies of scale that does not exist before; and the Group must capitalise from its greater reach and access to more formidable business and corporate networks that are now available. Thus, barring unforeseen circumstances, the Group is optimistic in delivering better performance in In the medium term, the Group is confident in gaining significant benefits from its investments and on-going efforts in enlarging and integrating all its Intrapreneur Venture operations. Prospek Bisnes Perladangan Prospek Bisnes Perladangan kekal kukuh di mana dalam tempoh yang terdekat, ia akan memperolehi manfaat secara langsung daripada pengukuhan asas pasaran minyak sawit dan harga MSM yang menggalakkan di mana para penganalisis meramalkan bahawa ia akan berada di tahap purata antara RM1,600 dan RM1,800 setiap tan metrik pada tahun Permintaan yang tinggi bagi MSM dalam bio-diesel dan harga minyak soya dan minyak sesawi yang lebih tinggi di Amerika Syarikat dan Eropah telah membantu melonjakkan harga MSM. Harga minyak sawit yang lebih tinggi akan menyumbang secara positif kepada asas Kumpulan dan aliran tunai yang amat diperlukan. Hasrat Kumpulan untuk mencapai tambahan nilai dan pertumbuhan yang lebih tinggi daripada Bisnes Perladangan adalah sejajar dengan jangkaan pengeluaran MSM yang juga lebih tinggi serta produktiviti yang telah meningkat dan kawasan matang yang lebih luas. Harga getah yang berada di paras tertinggi dalam tempoh 20 tahun, dijangka akan terus meningkat untuk tempoh sekurang-kurangnya dua tahun yang akan datang. Peningkatan harga tersebut sebahagian besarnya didorong oleh permintaan yang kukuh daripada kemunculan ekonomi baru seperti China dan India serta kemungkinan kekurangan bekalan dalam pengeluaran global. Asas pasaran minyak sawit dan getah yang kukuh, berserta kepakaran teknikal dan pengalaman yang luas ejen pengurusan yang dilantik, EPA Management Sdn Bhd, telah memberikan Kumpulan akses langsung kepada pasaran yang berkualiti, kelebihan sinergi dan kelebihan daya saing yang akhirnya akan menyumbang ke arah penciptaan nilai yang maksimum. KESIMPULAN Dalam usaha Kumpulan mencapai pertumbuhan bisnes, Sindora akan mematuhi amalan tadbir urus korporat terbaik, sistem kawalan dalaman, pengurusan risiko yang berwibawa dan dasar serta amalan kewangan yang berhemah untuk menyokong pertumbuhan dan keuntungan jangka panjang Kumpulan yang mampan bagi faedah semua pihak yang berkepentingan. Kumpulan akan sentiasa memberi perhatian terhadap keperluan untuk memenuhi harapan yang semakin tinggi di kalangan para pemegang sahamnya, pelanggan, pengurusan dan anggota pekerjanya serta pihak berkuasa yang berkaitan dalam mengekalkan pertumbuhan jangka panjang dan mempertingkatkan nilai secara keseluruhan. 58 Sindora Berhad (13418-K)

26 Corporate Statement penyata korporat Memaksimumkan nilai pemegang saham akan menjadi agenda utama Kumpulan. Justeru, Kumpulan akan menilai secara saksama semua pengambilalihan baru untuk menambah dan mengukuhkan lagi aliran perolehannya. Usaha pengambilalihan seterusnya akan banyak bergantung kepada tahap pulangan pelaburan yang boleh dicapai, kawalan kos secara berkesan dan kesanggupan serta kemampuan Pengurus Usahawan untuk menjayakan bisnes. Kumpulan akan terus menyediakan infrastruktur bisnes yang lebih kondusif dan bersepadu kepada semua operasi bisnesnya untuk memaksimumkan sinergi, mengembangkan lagi rangkaian dan mempertingkatkan nilai aset secara berkesan dari semua segi. Kumpulan menyedari Tanggungjawab Sosial Korporatnya (CSR) dan sentiasa komited untuk terus menyokong dan terlibat secara langsung dalam aktiviti-aktiviti sosial yang bersesuaian sebagai sebahagian daripada sumbangan Kumpulan kepada pembangunan masyarakat dan negara. Jaringan yang dijalinkan dengan pelbagai organisasi bukan kerajaan (NGO) yang bereputasi tinggi dan mampu memberi sokongan strategik untuk kepentingan bersama akan membantu mempertingkatkan reputasi dan kedudukan korporat Kumpulan. Selanjutnya, Sindora akan terus memberi keutamaan untuk membina jaringan dengan badan-badan yang terlibat secara langsung dengan program-program untuk membangun dan memupuk bakat-bakat keusahawanan dari kalangan generasi muda Malaysia. Kumpulan memilih NGO yang mempunyai agenda pembangunan keusahawanan yang jelas kerana usaha-usaha ini mempunyai kaitan yang rapat dengan matlamat asas Bisnes Intrapreneur Venture Kumpulan sendiri. Kumpulan sememangnya berada di kedudukan yang baik untuk merebut peluang yang tersedia melalui pertumbuhan ekonomi yang mampan dan kemunculan persekitaran ekonomi baru yang memberi manfaat kepada organisasi yang berteraskan keusahawanan, berinovasi, fokus dan cergas serta kukuh, berdaya saing, kental serta sanggup menghadapi cabaran. Pelaburan Bisnes Intrapreneur Venture yang diperkenalkan sesungguhnya telah membolehkan Kumpulan mencapai skala ekonomi yang lebih besar di samping menyediakan akses kepada lebih banyak bisnes yang menguntungkan bagi memanfaatkan rangkaian korporat yang wujud pada masa kini. ACKNOWLEDGEMENT PENGHARGAAN On behalf of the Board of Directors, we wish to express our deepest appreciation to the management and staff of the Group at all levels for their contribution, untiring commitment, dedication and loyalty in contributing to the commendable performance of the Group during the year. We also wish to express our gratitude to our shareholders for their continued support and confidence in the Group which has spurred us to continue enhancing the Group s long-term value appreciation. As always, we remain grateful to all our valued customers, business partners and associates, bankers, government institutions and relevant regulatory authorities who have been extremely supportive of the Group. Bagi pihak Lembaga Pengarah, kami ingin mengucapkan setinggi-tinggi penghargaan kepada pihak pengurusan dan anggota pekerja Kumpulan di semua peringkat atas sumbangan, komitmen yang tidak berbelah bahagi, dedikasi dan kesetiaan dalam menyumbang kepada prestasi Kumpulan yang membanggakan pada tahun ini. Kami juga ingin mengucapkan ribuan terima kasih kepada para pemegang saham atas sokongan dan keyakinan berterusan mereka terhadap Kumpulan yang telah memberikan semangat untuk kami terus mempertingkatkan nilai jangka panjang Kumpulan. Sebagaimana lazimnya, kami turut juga menyampaikan ucapan terima kasih dan penghargaan tulus ikhlas kepada para pelanggan, rakan kongsi bisnes dan syarikat-syarikat bersekutu yang kami hargai, bank-bank, institusi kerajaan dan pihak-pihak berkuasa yang sentiasa memberi sokongan padu kepada Kumpulan. TAN SRI DATO MUHAMMAD ALI HASHIM Chairman/Pengerusi Justeru, kecuali berlaku peristiwa yang di luar jangkaan, Kumpulan yakin akan dapat mencapai prestasi yang lebih baik pada tahun Dalam jangka masa sederhana, Kumpulan yakin akan memperolehi manfaat besar daripada pelaburan dan usaha berterusannya dalam memperkembang dan menyepadukan semua operasi Bisnes Intrapreneur Venturenya. ROZAN BIN MOHD SA AT Managing Director/Pengarah Urusan w w w. s i n d o r a. c o m. m y 59

27 criteria for acquisitions/investments kriteria pengambilalihan/pelaburan Intrapreneur Venture Business as the core business thrust of the Group had acquired and will continue to venture to acquire profitable and fundamentally sound businesses to ensure continuity in adding value and generating wealth for long-term investment returns. In achieving this fundamental goals, the Group has laid down its selection criteria that emphasised on strict financial parameters, solid business performance and strong management capabilities as follows: Financial Parameters Strong past ROE performance Minimum past and future PAT of more than RM500,000 Consistent dividend contributions Manageable gearing position Healthy cashflow and income stream Positive Economic Value Added (EVA) improvement Business Aspects Operating in a growth industry with potential for further growth Among key players and command significant presence Competitive and able to increase market share Focused and operating in a specialised, even simple business Management Aspects The Intrapreneur Manager(s) possess the relevant knowledge and know-how Possess competency in relevant business activity Ability and willingness to spearhead the company for long term business presence Established business and management systems and structure Priority will be given to companies that offer the highest prospects for growth and expansion in the immediate future. The acquisition process is offered to enterprises that fulfil all the stringent selection criteria that were formulated. Bisnes Intrapreneur Venture sebagai bisnes teras Kumpulan telah dan akan terus mengenalpasti syarikat-syarikat yang berdaya maju dan menguntungkan serta berpotensi untuk diambilalih agar dapat menyumbang ke arah penambahan nilai dan penjanaan kekayaan bagi memastikan pulangan pelaburan secara berterusan. Untuk mencapai matlamat asas ini, Kumpulan telah menggariskan kriteria pemilihan yang ketat dan menekankan kepada aspek kewangan yang teguh, prestasi bisnes yang memberangsangkan dan pengurusan yang mantap sebagaimana berikut: Aspek Kewangan Prestasi Pulangan Ekuiti yang teguh Purata pencapaian minima Keuntungan Selepas Cukai tahunan melebihi RM500,000 Sumbangan dividen yang konsisten Kadar gearan yang terkawal Aliran tunai dan sumber pendapatan yang mantap Kedudukan Nilai Ekonomi Ditambah (EVA) yang positif Aspek Bisnes Beroperasi dalam industri yang berdaya maju dan berpotensi untuk terus berkembang Antara peneraju utama dan menguasai pasaran Berdaya saing dan mampu meningkatkan penguasaan pasaran Mengendalikan bisnes yang khusus dan mudah difahami Aspek Pengurusan Pengurus Usahawan memiliki pengetahuan dan kepakaran dalam bisnes berkaitan Mempunyai kemahiran dalam bidang bisnes yang diceburi Mampu dan sanggup untuk menerajui syarikat dan terus mengembangkan bisnes dalam tempoh jangka panjang Mempunyai sistem dan s t r u k t u r b i s n e s s e r t a pengurusan yang mantap Keutamaan akan diberikan kepada syarikat-syarikat yang menawarkan p r o s p e k p e r t u m b u h a n d a n pengembangan dalam tempoh yang singkat. Proses pengambilalihan ini ditawarkan kepada syarikat kecil dan sederhana (IKS) yang memenuhi kesemua kriteria pemilihan yang telah dirumuskan. 60 Sindora Berhad (13418-K)

28 Corporate social Responsibilities tanggungjawab sosial korporat The Group is mindful of its Corporate Social Responsibility (CSR) obligations and is committed to continue to support and encourage worthy social causes as part of the Group s contribution to society and nation building. It is very conscious of its responsibilities to ensure that its business objectives and corporate success are achieved based on methods and approaches that are aligned with universal values that will, in the long run, benefits the society at large. Sindora adopts a much broader dimension to its corporate obligations in meeting with the aims and objectives of its CSR to add value to Malaysia s social asset so critical for nation building and uplifting the quality of life. The Group strongly believes that it should bring positive impact through enriching the larger community, contributing to nation building as well as giving back to society in terms of higher levels of social achievements and greater significance to the meaning of life. Sindora chose to render its CSR obligations entrepreneurially, and as a testimony to this solid commitment in discharging its CSR, Sindora is involved in as many as 18 Non Government Organisations (NGOs). Sindora s approach to its involvement in these NGOs is basically founded on corporate and commercial principles with efficiency, effectiveness, results and performance being the primary features. One of Sindora s significant CSR programme in 2006 is its involvement in Corporate Bureau of Malaysian Islamic Chamber of Commerce (MICC). Through the Corporate Bureau of MICC, Sindora strives to build a larger business network among businessmen to enable them to expand their businesses with smart partnerships. The principle objectives of MICC s Corporate Bureau aimed at mobilising support and participation of the Malaysian corporate sector in taking the lead and driving the future strategic direction of business and the nation s economic well-being. Kumpulan sedar akan Tanggungjawab Sosial Korporatnya (CSR) dan komited untuk terus menyokong dan memainkan peranan aktif terhadap usaha-usaha kemasyarakatan yang dianggap penting sebagai sebahagian daripada sumbangan Kumpulan terhadap pembangunan masyarakat dan negara. Kumpulan amat menyedari akan tanggungjawabnya untuk memastikan supaya objektif bisnes dan kejayaan korporat yang dicapai adalah berdasarkan kaedah dan pendekatan yang selaras dengan nilainilai sejagat, di mana dalam jangka masa panjang, memberi manfaat secara langsung kepada masyarakat umum. Sindora menerimapakai satu dimensi yang lebih luas di dalam tanggungjawab korporatnya bagi memenuhi matlamat dan objektif CSR untuk menambah nilai kepada aset sosial negara yang kritikal bagi pembangunan dan peningkatan kualiti hidup. Kumpulan sesungguhnya percaya bahawa ia perlu menyumbang kepada pembangunan negara dan masyarakat dari segi pencapaian sosial yang lebih cemerlang dan membawa makna yang lebih besar kepada kehidupan masyarakat. Sindora memilih untuk menunaikan tanggungjawab CSRnya melalui pendekatan secara keusahawanan, dan sebagai bukti kepada komitmen yang teguh di dalam melaksanakan CSRnya, Sindora telah melibatkan diri secara langsung di dalam 18 Organisasi Bukan Kerajaan (NGO). Penglibatan Sindora di dalam NGO ini secara umumnya dilaksanakan berasaskan kepada prinsip-prinsip korporat dan komersial dengan menitikberatkan tahap kecekapan, keberkesanan, prestasi dan manfaat sebagai ciri-ciri utama. Salah satu daripada program CSR utama pada tahun 2006 adalah penglibatannya dalam Biro Korporat Dewan Perdagangan Islam Malaysia (DPIM). Melalui Biro Korporat DPIM, Sindora berusaha membina jaringan bisnes yang lebih meluas di kalangan usahawan bagi membolehkan mereka mengembangkan perniagaan melalui perkongsian pintar. Objektif utama Biro Korporat DPIM adalah bertujuan untuk menggalakkan w w w. s i n d o r a. c o m. m y 61

29 Entrepreneurial development programmes organised to help entrepreneurs develop and improve their entrepreneurial talent, skills and knowledge featured prominently in the CSR activities undertaken in In the year under review, Sindora had participated in numerous programmes and seminars organised by MICC that generated participation not only from local but also regional entrepreneurs. One of the key events in 2006 was the trade mission from Saudi Arabia, led by His Majesty King Abdullah Bin Abdul Aziz Al Saud, the King of Saudi Arabia. The programme was attended by guest of honour, the Prime Minister of Malaysia, Dato Seri Abdullah Hj Ahmad Badawi. Sindora, as a member of MICC, participated in the business networking programmes of the event. Sindora had also participated in programmes organised by MICC s Corporate Bureau in collaboration with Jabatan Kemajuan Islam Malaysia (JAKIM), Jabatan Standard Malaysia and various state governments under the Islam Hadhari concept as promoted by the Government to establish Malaysia as a regional halal hub. Sindora was one of the sponsors in Halal Food Realisation Seminar 2006: Menjana Peluang Perdagangan Melalui MS1500: 2004 Standard Halal, held in Kedah, Sabah, Penang and Terengganu. The Group was also one of the prominent sponsors in a Seminar on Ninth Malaysia Plan Empowering GLCs Up The Economic Value Chain at Putra World Trade Centre, Kuala Lumpur, in July 2006, which was jointly organised by MICC s Corporate Bureau and Gemaputera, supported by the Ministry of Entrepreneur & Cooperative Development (MECD). The seminar had atttracted more than 200 participants, mainly entrepreneurs and representatives from various government agencies. In its endeavour to instill interest in business and inculcate a business culture among young Malaysians, the Group is actively involved in Siswa Bistari, a programme for undergraduates of Universiti Teknologi Mara (UiTM), organised and designed by BISTARI of Johor Corporation to accomplish the ultimate goal of spawning the growth of entrepreneurial energies, harnessing talent, creativity and innovation amongst the students, in order to equip them with appropriate fundamental skills, attitude and motivation for business. Sindora is the main sponsor of this programme and one of its subsidiaries, Tepak Marketing Sdn Bhd, is actively involved as one of the mentors of this programme. The Group believes it is both an obligation and an honour and part of the Group s commitment to pursue social responsibilities through corporate means and strictly business-driven sokongan dan penyertaan sektor korporat dalam menerajui dan menggembeling usaha ke arah mewujudkan hala tuju bisnes yang lebih mampan demi kemakmuran ekonomi negara pada masa depan. Program pembangunan usahawan yang dianjurkan adalah bertujuan untuk membantu membangun dan mempertingkatkan bakat, kemahiran dan pengetahuan keusahawanan mereka, yang jelas dapat dilihat melalui penglibatannya di dalam aktiviti-aktiviti CSR yang dijalankan pada tahun Sindora telah mengambil bahagian di dalam pelbagai program dan seminar anjuran DPIM yang telah dapat menarik penglibatan bukan sahaja dari usahawan tempatan, malah dari sekitar rantau ini. Pada tahun 2006 Sindora juga telah terlibat secara langsung dalam salah satu aktiviti penting melibatkan misi dagangan dari Arab Saudi yang diketuai oleh Duli Yang Maha Mulia Raja Abdullah Bin Abdul Aziz Al Saud, Raja Arab Saudi. Malaysia sebagai tuan rumah telah diketuai oleh Perdana Menteri, YAB Dato Seri Abdullah Hj Ahmad Badawi. Sebagai ahli DPIM, Sindora telah mengambil bahagian dalam program jaringan bisnes yang dianjurkan sempena misi dagangan tersebut. Sebagai ahli Biro Korporat DPIM yang aktif, Sindora turut terlibat di dalam pelbagai program Biro Korporat DPIM yang dianjurkan secara usahasama dengan pelbagai agensi kerajaan termasuk Jabatan Kemajuan Islam Malaysia (JAKIM), Jabatan Standard Malaysia dan beberapa kerajaan negeri di bawah konsep Islam Hadhari seperti yang dianjurkan oleh Kerajaan, dalam matlamatnya untuk menjadikan Malaysia sebagai hab halal serantau. Sindora merupakan salah satu penaja Seminar Kesedaran Makanan Halal 2006: Menjana Peluang Perdagangan Melalui Piawaian Halal MS 1500:2004, yang diadakan di negeri Kedah, Sabah, Pulau Pinang dan Terengganu. Kumpulan juga telah terlibat secara aktif serta menjadi antara penaja utama Seminar Jihad Ekonomi bertajuk Rancangan Malaysia Ke Sembilan - Memperkasakan GLC ke arah Membina Rantaian Nilai Ekonomi di Pusat Dagangan Dunia Putra, Kuala Lumpur, pada bulan Julai 2006 yang dianjurkan oleh Biro Korporat DPIM dengan kerjasama Gemaputera dan disokong oleh Kementerian Pembangunan Usahawan & Koperasi (MECD). Seminar tersebut telah berjaya menarik lebih 200 peserta yang sebahagian besarnya terdiri daripada usahawan dan wakil-wakil pelbagai agensi kerajaan. Sesi jaringan bisnes turut berjaya dianjurkan dan memberi kesempatan serta peluang kepada usahawan untuk berinteraksi dan membina jaringan bisnes. Dalam usahanya untuk memupuk minat, kesedaran dan menerapkan budaya perniagaan di kalangan golongan muda Malaysia, Kumpulan telah terlibat secara aktif di dalam Siswa Bistari, sebuah program khusus bagi para pelajar peringkat ijazah yang dipelopori dan dianjurkan oleh BISTARI Johor Corporation untuk mencapai matlamat mencetuskan daya keusahawanan, memanfaatkan bakat, kreativiti dan inovasi di kalangan para pelajar untuk mempersiapkan mereka dengan kemahiran, sikap dan motivasi yang wajar untuk menjadi usahawan. Program perintis Siswa Bistari telah berjaya dilaksanakan di Universiti Teknologi Mara (UiTM), cawangan Segamat. Sindora merupakan penaja utama program ini dan salah sebuah syarikat anaknya, Tepak Marketing Sdn Bhd, turut terlibat secara aktif sebagai salah satu daripada mentor program tersebut. 62 Sindora Berhad (13418-K)

30 corporate social responsibilities tanggungjawab sosial korporat approach. In order to inculcate entrepreneurial skills in young Malaysians, Sindora provides entrepreneurial coaching to student entrepreneurs of Sekolah Menengah Kebangsaan Seri Pinang and Sekolah Menengah Bandar Tenggara (2), Bandar Tenggara, Kulai, Johor, under the Tunas Bistari programme, an entrepreneurial development programme for secondary school students. Stronger networking will continue to be fostered with business oriented NGOs like JCorp Intrapreneur (M) Bhd (JIMB) as a potential source in developing a Business Commercial and Industrial Community (BCIC) in line with the Group s determination to enhance Malaysia s economic development through monetary and non-monetary support of its various programmes. JIMB, as the main liaison body for all Johor Corporation s intrapreneur companies, acts to foster and establish business links that are concerned and interested in business development throughout Malaysia. Sindora Group continued to participate in other social projects for the benefits of the society at large. In 2006, Sindora took part and sponsored several fund raising projects to help the underprivileged and less fortunate through a TV1 programme entitled Tijarah Ramadhan during the month of Ramadhan. The programme drew high ratings and was successful in generating contributions from various corporate entities and the public to the cause of the underprivileged. Apart from the public broadcasted event, Sindora was also active in a fund raising event for the construction of a Waqaf An-Nur Hospital in Pasir Gudang, the first charitable waqaf hospital in Malaysia. The objective of its establishment is to provide affordable healthcare treatment and services to the underprivileged and needy. The Group acknowledges that its employees interest and welfare are important aspects not to be ignored in its pursuit to enhance value and maximise returns to all its stakeholders. Activities involving sports and recreation through Kelab Keluarga Sindora (KKS) were successful in developing harmony among employees through a culture of sharing values and promoting sense of ownership and camaraderie. At the end of 2006, Johor was hit with the worst flood tragedy in its history, with some of the Group s employees in its Plantation Business at Sungai Simpang Kiri Estate, stranded without aid for days on end. To relieve them from their suffering, Sindora had sent in a rescue mission with much needed food supplies and medical aid. To further enhance its caring programme for the employees, the Company had implemented Baktiladang Housing Scheme in both its estates, which aims to elevate the standard of living of the plantation workers. The scheme entitled the workers to own a three bedroom semi-detached house after a minimum of 10 years continuous service. The Company had constructed 73 houses to be allocated to the eligible plantation workers under this scheme. The Company is also providing a total of 286 units of staff quarters to accommodate its palm oil mill and plantation workers. Sindora s priority will continue to be given to causes associated with programmes to develop and nurture entrepreneurial talent among Malaysians. The selection of NGOs with definite entrepreneur development agendas will continue to be deliberate, as these causes are closely aligned with the fundamental aims of the Group s own Intrapreneur Venture Business. Networking with and providing strategic support to meet the needs of high performance NGOs will enhance the Group s corporate reputation and standing. Kumpulan turut terlibat dalam memupuk kemahiran keusahawanan di kalangan pelajar di bawah program Tunas Bistari, sebuah program khusus pembangunan keusahawanan bagi para pelajar peringkat sekolah menengah. Kumpulan telah terlibat secara langsung sebagai mentor bagi dua buah sekolah - Sekolah Menengah Kebangsaan Seri Pinang, Bandar Tenggara, dan Sekolah Menengah Bandar Tenggara (2), Bandar Tenggara, Kulai, Johor. Jaringan bisnes yang lebih kukuh akan terus dipupuk dengan pelbagai NGO yang berorientasikan keusahawanan dan bisnes seperti JCorp Intrapreneur (M) Bhd (JIMB) yang mampu menjadi penggerak ke arah mewujudkan Masyarakat Perdagangan dan Perindustrian Bumiputera (MPPB), sejajar dengan usaha Kumpulan untuk mempertingkatkan pembangunan ekonomi Malaysia melalui pelbagai program yang dianjurkannya. Sebagai sebuah badan yang menyelaras kesemua syarikat intrapreneur Johor Corporation, JIMB berperanan mengukuh dan mewujudkan hubungan dan jaringan bisnes di kalangan komuniti bisnes di seluruh Malaysia. Kumpulan Sindora terus mengambil bahagian di dalam aktiviti sosial untuk manfaat dan faedah masyarakat secara umum. Pada tahun 2006, Sindora telah mengambil bahagian dan menaja beberapa projek amal pengumpulan dana bantuan untuk mereka yang kurang bernasib baik dan yang memerlukan termasuk program bertajuk Tijarah Ramadhan dalam bulan Ramadhan yang disiarkan di TV1. Program tersebut mendapat sambutan yang menggalakkan dan berjaya mengumpul dana daripada pelbagai entiti korporat dan orang ramai. Selain daripada itu, Sindora juga aktif dalam acara mengumpul dana bagi tabung pembinaan Hospital Waqaf An-Nur di Pasir Gudang yang merupakan hospital waqaf pertama di Malaysia. Objektif penubuhannya adalah untuk menyediakan rawatan dan perkhidmatan kesihatan yang murah kepada mereka yang kurang bernasib baik dan yang memerlukan. Kumpulan mengakui bahawa kepentingan dan kebajikan pekerjanya adalah satu aspek penting yang tidak boleh diabaikan dalam usahanya mempertingkatkan nilai dan memaksimumkan pulangan kepada semua pihak yang berkepentingan. Aktiviti-aktiviti yang melibatkan sukan dan rekreasi telah dianjurkan oleh Kelab Keluarga Sindora (KKS) dan berjaya menyumbang ke arah keharmonian anggota pekerja melalui pembentukan budaya perkongsian nilai serta memupuk semangat kekitaan dan kerjasama berpasukan. Pada akhir tahun 2006, Johor telah dilanda tragedi banjir yang buruk dalam sejarahnya, yang turut melibatkan keluarga anggota pekerja Kumpulan, baik di peringkat Bisnes Perladangan mahupun di syarikat anaknya yang lain. Untuk mengurangkan penderitaan mereka, Sindora telah turut mengambil inisiatif untuk terlibat sama dalam misi menyelamat serta menghantar bantuan bekalan makanan dan perubatan yang amat diperlukan. Pelaksanaan Skim Perumahan Baktiladang di kedua-dua ladang miliknya yang bermatlamat untuk meningkatkan taraf kehidupan para pekerja ladang merupakan satu lagi usaha keprihatinan Syarikat dalam menjalankan CSRnya. Di bawah skim ini, peserta adalah layak untuk memiliki rumah berkembar tiga bilik selepas berkhidmat sekurang-kurangnya selama 10 tahun. Syarikat telah membina sebanyak 73 buah rumah di bawah skim ini dan turut menyediakan sebanyak 286 unit perumahan pekerja untuk menempatkan para pekerja kilang minyak sawit dan ladangnya. Sindora akan terus memberi keutamaan kepada program yang membangun dan memupuk bakat keusahawanan di kalangan rakyat Malaysia. Penglibatan di dalam beberapa NGO yang mempunyai agenda pembangunan usahawan yang khusus sengaja dirancang kerana usaha tersebut adalah sejajar dengan matlamat asas Bisnes Intrapreneur Venture Kumpulan sendiri. Jaringan bisnes dan sokongan strategik untuk memenuhi keperluan NGO yang berprestasi tinggi akan meningkatkan lagi reputasi dan kedudukan korporat Kumpulan. w w w. s i n d o r a. c o m. m y 63

31 DESCRIPTION/PERKARA RM 000 RM 000 RM 000 RM 000 RM 000 Results/Keputusan Revenue/Perolehan 205, , ,681 88,273 56,588 Cost of Sales/Kos Jualan (168,898) (172,026) (94,030) (63,007) (42,478) Gross Profit/Keuntungan Kasar 36,738 36,278 44,651 25,266 14,110 Profit Before Tax/Keuntungan Sebelum Cukai 14,487 13,965 19,473 9,637 2,359 Profit After Tax/Keuntungan Selepas Cukai 11,886 10,391 12,613 6,138 1,014 Net Profit for the Year after Minority Interest/ 10,758 10,007 12,575 5,993 1,014 Keuntungan Bersih Selepas Kepentingan Minoriti Group Assets/Aset Kumpulan Fixed Assets/Aset Tetap 309, , , , ,699 Current Assets/Aset Semasa 79,923 61,222 59,496 45,264 45,132 Investment/Pelaburan 26,303 15,389 4,514 3, Estate Development Expenditure (Biological Assets)/ Perbelanjaan Pembangunan Ladang (Aset Biologi) 19,258 17,396 31,088 30,498 29,995 Intangible Assets/Aset Tidak Ketara 29,581 Goodwill on Consolidation/Muhibah daripada Penyatuan 5,774 5,545 4,004 Deferred Tax Assets/Aset Cukai Tertunda 197 1,000 1,425 1,478 1,246 Total Assets/Jumlah Aset 389, , , , ,912 Current Liabilities/Tanggungan Semasa 69,351 48,877 34,758 17,767 5,178 Net Current Assets/Aset Semasa Bersih 10,572 12,345 24,738 27,497 39,954 Financed by/dibiayai oleh Share Capital/Modal Saham 96,000 96,000 96,000 96,000 96,000 Reserves/Rizab 69,047 58,043 83,256 77,514 85,383 Treasury Shares/Saham Perbendaharaan (2,596) (1,324) Shareholders Equity/Ekuiti Pemegang Saham 165, , , , ,383 Minority Interests/Kepentingan Minoriti 33,043 3,255 3,370 2,814 Total Equity/Jumlah Ekuiti 198, , , , ,383 Borrowings/Pinjaman 98,324 8,349 4, Deferred Tax Liabilities/Tanggungan Cukai Tertunda 23,577 24,591 20,211 21,101 20,351 Non-Current Liabilities/Tanggungan Bukan Semasa 121,901 32,940 24,242 22,008 20, ,991 19, , , , REVENUE (RM 000) PEROLEHAN (RM 000) , , , , ,588 PROFIT BEFORE TAX (RM 000) KEUNTUNGAN SEBELUM CUKAI (RM 000) , , , , ,359 TOTAL ASSETS (RM 000) JUMLAH ASET (RM 000) , , , , , Sindora Berhad (13418-K)

32 DESCRIPTION/PERKARA RM 000 RM 000 RM 000 RM 000 RM 000 Average Capital Employed/Purata Modal Diguna 319, , , , ,734 Financial Ratios/nisbah Kewangan Profitability Ratios/nisbah Keuntungan Return on Total Assets (%)/Pulangan atas Jumlah Aset (%) Gross Profit Margin (%)/Margin Keuntungan Kasar (%) Earnings per Share (sen)/pendapatan Sesaham (sen) Valuation Ratios/nisbah Penilaian Net Dividend per Share (sen)/dividen Bersih Sesaham (sen) Net Tangible Assets per Share (sen)/aset Ketara Bersih Sesaham (sen) Price to Earnings Multiple (sen)/harga kepada Pendapatan Berganda (sen) Capital Adequacy Ratios/nisbah Kecukupan Modal Return on Average Equity (%)/Pulangan kepada Purata Ekuiti (%) Return on Capital Employed/Pulangan atas Modal Diguna group s financial Performance summary ringkasan prestasi kewangan kumpulan SHAREHOLDERS EQUITY (RM 000) EKUITI PEMEGANG SAHAM (RM 000) , , , , ,383 EARNINGS PER SHARE (SEN) PENDAPATAN SESAHAM (SEN) NET TANGIBLE ASSETS PER SHARE (RM 000) ASET KETARA BERSIH SESAHAM (RM 000) w w w. s i n d o r a. c o m. m y 65

33 summary of group s 5 years segmental financial performance ringkasan prestasi kewangan kumpulan mengikut segmen untuk 5 tahun Revenue/Perolehan RM 000 RM 000 RM 000 RM 000 RM 000 Intrapreneur Venture Business/Bisnes Intrapreneur Venture 138, , ,793 28,451 Plantation Business/Bisnes Perladangan 66,886 69, ,059 59,683 45,844 Timber Business/Bisnes Perkayuan 17,731 12,664 10,744 Elimination/Penyelarasan (90,902) (12,525) Sindora Berhad Group/Kumpulan Sindora Berhad 205, , ,681 88,273 56,588 Profit/(Loss) from Operations/Keuntungan/(Kerugian) Operasi Intrapreneur Venture Business/Bisnes Intrapreneur Venture 9,313 9,776 4,451 1,197 Plantation Business/Bisnes Perladangan 11,504 11,327 16,039 11,111 6,164 Timber Business/Bisnes Perkayuan (2,882) (1,712) (9,525) Investment/Pelaburan 4,765 8,087 (583) Elimination/Penyelarasan (6,531) (9,581) 6,296 Group s Profit from Operations/ Keuntungan Operasi Kumpulan 20,817 21,103 15,842 9,102 2, REVENUE (RM 000) PEROLEHAN (RM 000) PROFIT FROM OPERATIONS (RM 000) KEUNTUNGAN DARIPADA OPERASI (RM 000) 138, % 9, % 66, % 11, % Intrapreneur Venture Business Bisnes Intrapreneur Venture Plantation Business Bisnes Perladangan 66 Sindora Berhad (13418-K)

34 Announcements Pengumuman January/Januari Change in the boardroom as Datuk Johan Jaaffar was appointed as the Independent and Non-Executive Director of Sindora Berhad on 1 January Perubahan komposisi lembaga pengarah dengan perlantikan Datuk Johan Jaaffar sebagai Pengarah Bebas Bukan Eksekutif Sindora Berhad pada 1 Januari January/Januari Distribution of Treasury Shares and book closure date for the entitlement of the Treasury Shares on the basis of One existing ordinary share of RM1.00 each held by Sindora Berhad pursuant to its share-buy back scheme (Treasury Share) for every 20 existing ordinary shares of RM1.00 each held by its shareholders (Distribution of Treasury Shares), fractions of Treasury Shares are to be disregarded. A total of 4,571,393 treasury shares were distributed to entitled shareholders in relation to the Distribution of Treasury Shares. Pengagihan Saham Perbendaharaan dan tarikh penutupan buku bagi kelayakan Saham Perbendaharaan pada asas Satu saham biasa sedia ada berharga RM1.00 sesaham yang dipegang oleh Sindora Berhad menurut skim pembelian balik sahamnya (Saham Perbendaharaan) bagi setiap 20 saham biasa sedia ada berharga RM1.00 sesaham yang dipegang oleh para pemegang sahamnya (Pengagihan Saham Perbendaharaan), sebahagian kecil daripada saham perbendaharaan ini akan diabaikan. Sebanyak 4,571,393 saham perbendaharaan telah diagihkan kepada para pemegang saham yang layak berhubung Pengagihan Saham Perbendaharaan. 22 March/Mac Proposal renewal of shareholders mandate for the purchase of the Company s own shares in accordance with Section 67A of the Companies Act, 1965, the Articles of Association of the Company and the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities Listing Requirements) and renewal of shareholders mandate for recurrent related party transactions of a revenue and/or trading nature pursuant to Paragraph of the Bursa Securities Listing Requirements. Cadangan pembaharuan mandat pemegang saham untuk pembelian saham Syarikat selaras dengan Seksyen 67A Akta Syarikat, 1965, Tataurusan Pertubuhan Syarikat dan Keperluan Penyenaraian Bursa Malaysia Securities Berhad (Keperluan Penyenaraian Bursa Securities) dan pembaharuan mandat pemegang saham bagi urusniaga pihak berkaitan yang berulangan berbentuk perolehan dan/atau perdagangan menurut Perenggan Keperluan Penyenaraian Bursa Securities. 16 May/Mei Announcement of Notice of Book Closure. Pengumuman Notis Penutupan Buku. 19 July/Julai Pursuant to Part C of Chapter 9, Paragraph 9.04 (e) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors wishes to announce that Sindora has secured a loan facility from Malaysian Industrial Development Finance Berhad amounting to RM10 million which will be utilised for working capital purposes. Menurut Bahagian C Bab 9, Perenggan 9.04 (e) Keperluan Penyenaraian Bursa Malaysia Securities Berhad, Lembaga Pengarah ingin mengumumkan bahawa Sindora telah memperolehi kemudahan pinjaman daripada Malaysian Industrial Development Finance Berhad berjumlah RM10 juta yang akan digunakan untuk tujuan modal kerja. 11 August/Ogos Sindora has entered into a conditional Sale and Purchase Agreement (SPA) with Abdul Hak Bin Mohd Amin, Hamidah Bt Omar and Zulkifli Bin Mohd Amin to acquire 6,901,779 ordinary shares of RM1.00 each in E.A. Technique (M) Sdn Bhd representing 51% equity interest for a purchase consideration of RM38,250,000 to be satisfied by cash. Sindora telah memeterai Perjanjian Jual Beli bersyarat (SPA) dengan Abdul Hak Bin Mohd Amin, Hamidah Bt Omar dan Zulkifli Bin Mohd Amin untuk mengambilalih 6,901,779 saham biasa berharga RM1.00 sesaham dalam E.A. Technique (M) Sdn Bhd yang meliputi kepentingan ekuiti sebanyak 51% bagi pertimbangan harga berjumlah RM38,250,000 yang akan dibayar dengan wang tunai. 15 August/Ogos Sindora has entered into a 15-year concession agreement with Johor Corporation and Metro Parking (M) Sdn Bhd, to manage, operate and maintain a multi-storey car park together with other parking facilities at Persada Johor International Convention Centre in Johor Bahru for a concession consideration of RM15 million to be settled by way of cash. Sindora telah memeterai perjanjian konsesi selama 15 tahun dengan Johor Corporation dan Metro Parking (M) Sdn Bhd, untuk mengurus, mengendali dan menyelenggara sebuah tempat letak kereta bertingkat berserta dengan kemudahan tempat letak kereta yang lain di Pusat Konvensyen Antarabangsa Persada Johor di Johor Bahru untuk pertimbangan harga berjumlah RM15 juta yang akan dibayar secara tunai. w w w. s i n d o r a. c o m. m y 67

35 12 October/Oktober The Board of Directors of Sindora has announced that the Company has secured a fixed rate term loan of RM40 million (the Facility) under a Primary Collateralised Loan Obligations (PCLO) Program arranged by Alliance Investment Bank Berhad (formerly known as Alliance Merchant Bank Berhad). The issuer under the PCLO Program is Idaman Capital Berhad. The PCLO Program was completed on 10 October 2006 when the Facility becomes unconditional. The Facility is for a period of five years and is granted to Sindora on an unsecured basis. The purpose of the Facility is for the working capital and general corporate purposes of Sindora Berhad. Lembaga Pengarah Sindora telah mengumumkan bahawa Syarikat telah memperolehi pinjaman berjangka kadar tetap sebanyak RM40 juta (Kemudahan) di bawah Program Obligasi Pinjaman Bercagar Utama (PCLO) yang diatur oleh Alliance Investment Bank Berhad (dahulu dikenali sebagai Alliance Merchant Bank Berhad). Penerbit di bawah PCLO tersebut adalah Idaman Capital Berhad. PCLO telah diselesaikan pada 10 Oktober 2006 apabila Kemudahan tersebut menjadi tidak bersyarat. Kemudahan tersebut adalah untuk tempoh lima tahun dan diberikan kepada Sindora atas asas tidak bercagar. Tujuan Kemudahan tersebut adalah untuk kegunaan modal kerja dan urusan korporat umum Sindora Berhad. 8 November/November Sindora announced that Sindora Timber Sdn Bhd, its 90% owned subsidiary, had on 8 November 2006 acquired the entire issued and paid-up share capital of General Access Sdn Bhd (Newco), a company incorporated in Malaysia, for a cash consideration of RM2.00. Newco was incorporated on 18 September 2006 and is currently dormant. The authorised share capital of Newco is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, whilst its issued and paid-up share capital comprises of two ordinary shares of RM1.00 each, fully paid. Newco is expected to venture into contracting services and other related activities. Sindora mengumumkan bahawa pada 8 November 2006, Sindora Timber Sdn Bhd, syarikat subsidiari dengan pemilikan ekuiti sebanyak 90% telah mengambilalih keseluruhan modal saham diterbit dan berbayar dalam General Access Sdn Bhd (Newco), sebuah syarikat yang diperbadankan di Malaysia, pada pertimbangan harga sebanyak RM2.00. Newco telah diperbadankan pada 18 September 2006 dan kini ia dorman. Modal saham yang dibenarkan bagi Newco adalah sebanyak RM100,000 yang terdiri daripada 100,000 saham biasa berharga RM1.00 sesaham, manakala modal saham diterbit dan berbayarnya terdiri daripada dua saham biasa berharga RM1.00 sesaham telah dibayar penuh. Newco dijangka akan menerokai perkhidmatan kontrak dan aktiviti berkaitan lain. 25 November/November Sindora had on 25 November 2006 entered into a conditional share sale agreement with Yurlida Binti Mohd Zain, Romli Bin Ishak and Muhammad Nor Anuar Bin Hashim to acquire, in total 90,000 ordinary shares of RM1.00 each in GranuLab, representing 90% of the issued and paid-up share capital of GranuLab, for a purchase consideration of RM270,000 or RM3.00 per share. Pada 25 November 2006, Sindora telah memeterai satu perjanjian jual beli bersyarat dengan Yurlida Binti Mohd Zain, Romli Bin Ishak dan Muhammad Nor Anuar Bin Hashim untuk mengambilalih, sejumlah 90,000 saham biasa berharga RM1.00 sesaham di dalam GranuLab, mewakili 90% daripada modal saham diterbit dan berbayar GranuLab, untuk pertimbangan harga sebanyak RM270,000 atau RM3.00 sesaham. 21 December/Disember Sindora had proposed on renounceable two-call rights issue of 105,600,000 new ordinary shares of RM1.00 each in Sindora (Rights Shares), on the basis of 11 Rights Shares for every 10 existing ordinary shares of RM1.00 each in Sindora Shares, together with one free detachable warrant for every two Rights Shares subscribed. Sindora telah mencadangkan penerbitan hak dua panggilan boleh batal sebanyak 105,600,000 saham biasa baru Sindora berharga RM1.00 Sesaham Hak, pada asas 11 Saham Hak bagi setiap 10 saham biasa sedia ada berharga RM1.00 sesaham dalam Saham Sindora, berserta dengan satu waran boleh pisah percuma untuk setiap dua Saham Hak yang dilanggan. 22 December/Disember Announcement of Notice of Book Closure. Pengumuman Notis Penutupan Buku. 26 December/Disember All the conditions precedent in the Sale and Purchase Agreement in relation to the Proposed Acquisition of 6,901,779 ordinary shares of RM1.00 each in E.A. Technique (M) Sdn Bhd representing 51% equity interest, have been fulfilled and the Proposed Acquisition has been completed on 26 December Semua syarat yang digariskan di dalam Perjanjian Jual Beli berhubung Cadangan Pengambilalihan saham biasa sebanyak 6,901,779 berharga RM1.00 sesaham dalam E.A. Technique (M) Sdn Bhd yang meliputi 51% kepentingan ekuiti, telah dipenuhi dan Cadangan Pengambilalihan tersebut telah diselesaikan pada 26 Disember November/November All the conditions precedent as per the Concession Agreement has been fulfilled subsequent to the issuance of the temporary certificate of fitness for the occupation on Persada Johor International Convention Centre and its concession parking areas at Jalan Abdullah Ibrahim, Johor Bahru in relation to the Proposed Concession Agreement. Semua syarat yang digariskan di dalam Perjanjian Konsesi telah dipatuhi selepas memperolehi sijil kelayakan menduduki sementara Pusat Konvensyen Antarabangsa Persada Johor dan kawasan tempat letak kereta konsesinya di Jalan Abdullah Ibrahim, Johor Bahru berhubung Cadangan Perjanjian Konsesi. 68 Sindora Berhad (13418-K)

36 Awards, recognition andcertification Anugerah, pengiktirafan dan pensijilan The Group s relentless pursuit of excellence in all aspects of its business and operations is evident in the numerous awards and accolades accorded to the Group. The awards had enhanced the Group s reputation and corporate image as a profitable, strong and reliable business entity and a stepping stone which motivates the Group for continued improvement in its strive for excellence. Usaha mencapai kecemerlangan Kumpulan yang berterusan dalam segala aspek bisnes dan operasi dapat dilihat melalui pelbagai anugerah dan pengiktirafan yang diberi kepada Kumpulan. Anugerah ini telah meningkatkan reputasi dan imej korporat Kumpulan sebagai entiti bisnes yang berdaya maju, kukuh dan berwibawa dan pencapaian ini akan mendorong Kumpulan untuk terus maju demi mencapai kecemerlangan. Anugerah Mekar Johor Corporation Image & Presentation Evaluation Anugerah Kualiti Laman Web Kumpulan Johor Corporation 2006 Sindora Berhad 2006 Philippine Awards for Most Admired Companies and Brand in the Philippines Anugerah Filipina 2006 bagi Syarikat dan Jenama Paling Diminati di Filipina Metro Parking Management (Philippines) Inc. Most Outstanding Innovative Car Park - Asian Star Brand in the Asia Brand Excellence Awards Tempat Letak Kereta Paling Berinovatif Anugerah Jenama Terkemuka di dalam Anugerah Kecemerlangan Jenama Asia Metro Parking Management (Philippines) Inc. Excellent Service Award Silver Excellent Service Awards Anugerah Kecemerlangan Perkhidmatan Anugerah Perak Kecemerlangan Perkhidmatan Metro Parking (S) Pte Ltd Anugerah Mekar Johor Corporation Image & Presentation Evaluation Anugerah Kualiti Laman Web Kumpulan Johor Corporation 2006 Willis (M) Sdn Bhd Most Outstanding Managed Car Park (National) - Asian Star Brand Award (Philippines) in the Philippine Brand Excellence Award Pengurusan Tempat Letak Kereta Terkemuka (Nasional) Anugerah Jenama Terkemuka (Filipina) di dalam Anugerah Kecemerlangan Jenama Asia Metro Parking Management (Philippines) Inc. Anugerah Mekar Johor Corporation Image & Presentation Evaluation Anugerah Kualiti Laman Web Kumpulan Johor Corporation 2006 Metro Parking (S) Pte Ltd w w w. s i n d o r a. c o m. m y 69

37 Finalist of the National Award for Management Accounting 2006 Finalis Anugerah Kebangsaan Management Accounting 2006 MM Vitaoils Sdn Bhd The 4th Asia Pacific/Malaysia e-entrepreneur Award 2005 Excellence Brand MM Vitaoils Sdn Bhd SMB Recognition Award Series for Export Excellence Award Anugerah Bersiri Pengiktirafan SMB untuk Anugerah Kecemerlangan Eksport MM Vitaoils Sdn Bhd 2005 National Product Quality Excellence Award Philippines Best Car Park Anugerah 2005 National Product Quality Excellence Filipina Tempat Letak Kenderaan Terbaik Makati City Awards The National Council for Product and Service Quality and/dan Consumer Today Metro Parking Management (Philippines) Inc. Superbrand Malaysia 2005 MM Vitaoils Sdn Bhd MITI Industry Excellence Award Anugerah Kecemerlangan Industri Kementerian Perdagangan Antarabangsa dan Industri MM Vitaoils Sdn Bhd International Quality Crown Award London 2006 Anugerah International Quality Crown London 2006 MM Vitaoils Sdn Bhd The Golden Bull Award 2005 The 3rd Malaysia s 100 Outstanding SME s 100 SME Cemerlang di Malaysia kali ke-3 MM Vitaoils Sdn Bhd Selangor Industry Award 2005 Quality Management Excellence Award Anugerah Industri Selangor 2005 Anugerah Kecemerlangan Pengurusan Kualiti MM Vitaoils Sdn Bhd 2005 Philippine Marketing Excellence Award Most Outstanding Innovative Car Park Anugerah 2005 Philippine Marketing Excellence Tempat Letak Kenderaan Paling Berinovatif Metro Parking Management (Philippines) Inc. 25th International Golden Award for Food & Beverages Anugerah Emas Antarabangsa Makanan dan Minuman kali ke-25 MM Vitaoils Sdn Bhd. Malaysian Business Ethics Excellence Award 2005 Anugerah Kecemerlangan Etika Bisnes Malaysia 2005 MM Vitaoils Sdn Bhd First Runner-Up (Golden Award) Cross Functional Team (XFT) Naib Johan (Anugerah Emas) Kumpulan Cross Functional (XFT) Hari Mekar Johor Corporation Kumpulan Rafflesia, Sindora Timber Sdn Bhd 70 Sindora Berhad (13418-K)

38 award, recognition and certification anugerah, pengiktirafan dan pensijilan Third Place Cempaka Category Tempat Ketiga Kategori Cempaka Hari Mekar Johor Corporation Kumpulan Suria Sindora Timber Sdn Bhd Intrapreneur of the Year Award (JCorp Group) En Bukhari Abd Rahman, 5th JCorp Intrapreneur (M) Bhd Annual Conference 2005 Anugerah Intrapreneur Tahunan (Kumpulan JCorp) En Bukhari Abd Rahman Persidangan Tahunan ke-5 JCorp Intrapreneur (M) Bhd Tahun 2005 ISO 9001:2000 Management of Car Parks ISO 9001:2000 Pengurusan Tempat Letak Kereta Metro Parking Management (Philippines) Inc. MS ISO 9001:2000 Quality Management Systems Requirements: Processing of Fresh Fruit Bunches to Crude Palm Oil and Palm Kernel Sindora Palm Oil Mill MS ISO 9001:2000 Sistem Pengurusan Kualiti Keperluan: Pemprosesan Buah Tandan Segar kepada Minyak Sawit Mentah dan Isirong Sawit Kilang Minyak Sawit Sindora Champion in ICC Technical Category Juara dalam Kategori Teknikal ICC Hari Mekar Johor Corporation Sindora Timber Sdn Bhd ISO 9001:2000 Production of Cooking Oils, Margarine, Ghee and Shortening ISO 9001:2000 Pengeluaran Minyak Masak, Marjerin, Minyak Sapi Sayuran dan Lelemak MM Vitaoils Sdn Bhd Outstanding Corporate Governance Practices Awards 5th JCorp Intrapreneur (M) Sdn Bhd Annual Conference 2005 Anugerah Amalan Tadbir Urus Korporat Cemerlang, Persidangan Tahunan ke-5 JCorp Intrapreneur (M) Sdn Bhd Tahun 2005 Pro Office Solutions Sdn Bhd MS ISO 9001:2000 Quality Management Systems Requirements: Blending and Packing of Tea MS ISO 9001:2000 Sistem Pengurusan Kualiti Keperluan: Pengadunan dan Pembungkusan Teh Tepak Marketing Sdn Bhd ISO 9001:2000 Manufacturing of Furniture, Kiln Drying and Rubberwood Treatment ISO 9001:2000 Pembuatan Perabot, Tanor Pengeringan dan Pengawetan Kayu Getah Sindora Timber Sdn Bhd Best 10 Innovative and Creative Circle (ICC) Group in Technical Category, National ICC Convention Kumpulan Innovative and Creative Circle (ICC) 10 Terbaik dalam Kategori Teknikal, Konvensyen ICC Peringkat Nasional Sindora Timber Sdn Bhd Overall Best Performance Mill (JCorp Group) Sindora Palm Oil Mill Kilang Minyak Sawit Terbaik Keseluruhan (Kumpulan JCorp) Kilang Minyak Sawit Sindora w w w. s i n d o r a. c o m. m y 71

39 statement on Corporate governance Penyata tadbir urus Korporat The Board of Directors (the Board) of Sindora Berhad (Sindora or the Company ) recognises that the practice of good Corporate Governance in conducting the business and affairs of Sindora Group is a critical element for Sindora Group s continued growth and success. This will not only safeguard and enhance the shareholders value but also protect the interest of other stakeholders. Lembaga Pengarah Sindora Berhad (Sindora atau Syarikat) mengiktiraf peri pentingnya amalan Tadbir Urus Korporat yang mantap dalam menjalankan bisnes dan hal ehwal Kumpulan Sindora bagi memastikan pertumbuhan dan kejayaan berterusan. Ianya bukan sahaja melindungi dan meningkatkan nilai para pemegang saham, malah turut juga menjaga dan memelihara kepentingan semua pihak yang berkepentingan. Set out below is a statement on how Sindora has applied the Principles as set out in Part 1 and the extent of compliance with The Best Practices as set out in Part 2 of the Malaysian Code of Corporate Governance (the Code). THE BOARD OF DIRECTORS Composition and Balance The Board of Sindora Berhad s (the Board) composition is made up of professionals with a wide range of knowledge and experience in business, operational and financial affairs. Its members are drawn from various background bringing depth and diversity in experience, knowledge and perspective to set forth a synergy of strength in charting a clear direction for the Group. The Board comprises four non-independent and three independent directors. This is in compliance with the Listing Requirements (LR) of Bursa Malaysia Securities Berhad (Bursa Malaysia) that requires that at least one third of the total number of directors should be independent. The roles of the Chairman and Managing Director are clearly segregated with defined responsibilities so as to ensure a balance of power and authority. The Managing Director is responsible for implementing the policies and decisions of the Board. His primary responsibility is to ensure management s competency including the identification of an effective succession plan to sustain continuity. Directorship in Other Companies As required by the LR, none of the Directors of the Company holds more than 10 directorships in public listed companies and more than 15 in non-public listed companies. This ensures that their commitment, resources and time are focused to enable them to discharge their duties effectively. Berikut adalah penyata mengenai bagaimana Sindora telah mempraktikkan prinsip-prinsip seperti yang digariskan di dalam Bahagian 1 dan tahap pematuhan terhadap Amalan Terbaik sebagaimana yang terkandung di dalam Bahagian 2 Kod Tadbir Urus Korporat Malaysia (Kod). LEMBAGA PENGARAH Komposisi dan Keseimbangan Lembaga Pengarah Sindora Berhad (Lembaga Pengarah) terdiri daripada para profesional yang memiliki pengetahuan dan pengalaman yang luas dari pelbagai bidang merangkumi aspek bisnes, operasi dan hal ehwal kewangan. Ia dianggotai oleh ahli-ahli yang mempunyai pelbagai latar belakang yang mempunyai pengalaman dan pengetahuan yang luas dari perspektif yang berbeza yang saling melengkapi dan membentuk sinergi yang kukuh dalam menentukan halatuju Kumpulan dengan jelas. Lembaga Pengarah dianggotai oleh empat pengarah bukan bebas dan tiga pengarah bebas. Komposisi ini adalah mematuhi Keperluan Penyenaraian (LR) Bursa Malaysia Securities Berhad (Bursa Malaysia) yang mensyaratkan supaya sekurangkurangnya satu per tiga daripada keahlian Lembaga Pengarah adalah terdiri daripada Pengarah Bebas. Pengerusi dan Pengarah Urusan mempunyai peranan yang berbeza dengan tanggungjawab yang ditakrif dengan jelas bagi memastikan keseimbangan tugas dan tanggungjawab. Pengarah Urusan berperanan untuk melaksanakan dasar dan keputusan yang dibuat oleh Lembaga Pengarah. Tanggungjawab utama beliau adalah untuk memastikan pembentukan kumpulan pengurusan yang cekap dan kompeten termasuk mengenalpasti kumpulan pengurusan pelapis yang berwibawa untuk mengekalkan kesinambungan bisnes Kumpulan. Perwakilan sebagai Pengarah dalam Syarikat-syarikat Lain Sebagaimana yang disyaratkan oleh LR, Pengarah Syarikat tidak dibenarkan untuk memegang lebih daripada 10 jawatan pengarah di dalam syarikat tersenarai awam (PLC) atau lebih daripada 15 di dalam syarikat yang tidak tersenarai di Bursa Malaysia. Ini adalah untuk memastikan bahawa Pengarah Syarikat dapat menumpukan komitmen, sumber dan masa mereka bagi membolehkan pelaksanaan tugas secara berkesan. 72 Sindora Berhad (13418-K)

40 Statement on corporate governance penyata tadbir urus korporat responsibility of the board The Board has the ultimate and overall responsibility for the effective control of the Group. As prescribed by the Code, the Board assumes six principle responsibilities in discharging its statutory and fiduciary duties. This includes responsibility in determining the Group s strategic plan for business performance; overseeing the conduct of the Company s business; identifying principle risks and ensure implementation of appropriate systems and control to manage these risks; succession planning of CEO and senior management; developing and implementing investor relations programme; and last but not least reviewing the adequacy and integrity of the Company s internal control systems as well as management information system, including system for compliance with applicable law, regulation, directive and guidelines. Tanggungjawab Lembaga Pengarah Lembaga Pengarah bertanggungjawab sepenuhnya dan menyeluruh di dalam memastikan bahawa Kumpulan mempunyai sistem kawalan yang efektif. Sebagaimana yang dinyatakan di dalam Kod, Lembaga Pengarah berpegang kepada enam tanggungjawab utama dalam melaksanakan tanggungjawab berkanun dan fidusiarinya. Ini termasuklah tanggungjawab dalam merumus perancangan strategik Kumpulan; mengawalselia tatacara bisnes Syarikat; mengenal pasti risiko-risiko utama dan memastikan pelaksanaan sistem dan kawalan yang bersesuaian untuk mengurus risiko; perancangan penggantian Ketua Eksekutif dan pengurusan kanan; merangka dan melaksanakan program perhubungan pelabur; dan akhir sekali, mengkaji kecukupan dan kewibawaan sistem kawalan dalaman Syarikat serta sistem pengurusan maklumat, termasuk sistem pematuhan terhadap undang-undang, peraturan, arahan dan garis panduan yang berkaitan. Board Meetings/Mesyuarat Lembaga Pengarah The Board meets regularly on a quarterly basis with additional meetings convened for specific matters when necessary. There were four Board Meetings and two Special Board Meetings conducted and the following are the details of attendance of each Director in the year under review: Lembaga Pengarah bermesyuarat sekali setiap suku tahun dan jika perlu, mesyuarat khas Lembaga Pengarah akan diadakan bagi membincangkan perkara-perkara tertentu. Pada tahun yang ditinjau, empat Mesyuarat Lembaga Pengarah dan dua Mesyuarat Khas Lembaga Pengarah telah diadakan dan butir-butir kehadiran oleh setiap ahli Lembaga Pengarah di mesyuarat-mesyuarat tersebut adalah seperti jadual di bawah: Director Number of meetings and ATTENDANCE PERCENTAGE/Peratusan Pengarah Bilangan Mesyuarat dan Kehadiran (%) Tan Sri Dato Muhammad Ali Hashim 6/6 100 Rozan Bin Mohd Sa at 6/6 100 Tan Sri Datuk Arshad Ayub* 6/6 100 Kua Hwee Sim* 6/6 100 Hj. Esa Bin Mamek 6/6 100 Halmi Bin Jasmin 6/6 100 Datuk Johan Bin Jaaffar* 6/6 100 (appointed on 1 January 2006/dilantik pada 1 Januari 2006) Note: * denotes independent members of the Board. Nota: * Pengarah Bebas. w w w. s i n d o r a. c o m. m y 73

41 Appointment and Re-election of Directors The Board of Directors of the Company has delegated to the Nomination and Remuneration Committee of Johor Corporation (JCorp Group NRC) the responsibility in proposing respective new nominees for the Board and assessing the Directors on an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of JCorp Group NRC. In accordance with the Company s Article of Association, at least one third of the directors are required to retire from office at each Annual General Meeting (AGM) and can offer themselves for re-election at the AGM, including the Managing Director, who shall retire from office at least once every three years but shall be eligible for re-election. Hj Esa Mamek and Halmi Jasmin were re-elected during AGM held on 20 June Meanwhile, Tan Sri Dato Muhammad Ali Hashim and Kua Hwee Sim will retire at the forthcoming AGM scheduled on 27 June 2007 and offer themselves for re-election. Directors over 70 years of age are required to submit themselves for re-appointment annually in accordance with section 129(6) of the Companies Act, At present, only Tan Sri Datuk Arshad Ayub is subjected to this requirement. Directors who are appointed during the financial year are subject to re-election by the shareholders at the next AGM held following their appointment (Article 93). Datuk Johan Jaaffar, who was appointed on 1 January 2006 was re-elected during the AGM held on 20 June Board Committees i) Nomination and Remuneration Committee ii) In line with JCorp s Group-wide corporate practice, Sindora s Nomination and Remuneration Committees (NRC) were dissolved on 21 September 2005 and the functions and responsibilities are now vested with JCorp Group NRC. Sindora is directly represented at the JCorp Group NRC by its Chairman and Managing Director who are respectively the Chairman and official member of JCorp Group NRC. This approach in centralising NRC functions at JCorp Group is not an uncommon practice among top global companies and leading Multi National Corporations. The prime consideration is the strategic advantage that the centre provides by allowing wider access and greater reach to a much larger pool of talent, skills and expertise as well as to benchmark remunerations on a Group-wide basis. Audit Committee The Audit Committee (AC), chaired by Tan Sri Datuk Arshad Ayub, comprises 3 members, 2 of which are Independent Directors. The committee meets on a scheduled basis at least 4 times a year. The function and activities carried out by the committee during the year under review are contained in the Audit Committee Report as presented on page 87 to 89 of this Annual Report. Perlantikan dan Pemilihan Semula Pengarah Lembaga Pengarah Syarikat telah mempertanggungjawabkan Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp untuk mencadangkan pencalonan baru bagi Lembaga Pengarah dan menilai setiap Pengarah secara berterusan. Walau bagaimanapun, keputusan akhir untuk pemilihan calon pengarah adalah terletak di bawah bidang kuasa Lembaga Pengarah setelah mempertimbangkan syor-syor yang dikemukakan oleh Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp. Sekurang-kurangnya satu pertiga daripada Pengarah disyaratkan untuk bersara daripada jawatan masing-masing pada setiap Mesyuarat Agung Tahunan (AGM). Para Pengarah yang bersara boleh menawarkan diri mereka untuk dilantik semula semasa AGM selaras dengan Tataurusan Pertubuhan Syarikat. Pengarah Urusan perlu bersara setiap tiga tahun dan layak untuk dilantik semula. Hj Esa Bin Mamek dan Halmi Bin Jasmin telah dipilih semula pada AGM yang telah diadakan pada 20 Jun Sementara itu, Tan Sri Dato Muhammad Ali Hashim dan Kua Hwee Sim akan bersara pada AGM akan datang yang dijadualkan pada 27 Jun 2007 dan menawarkan diri mereka untuk pemilihan semula. Pengarah yang berusia lebih daripada 70 tahun dikehendaki menawarkan diri mereka untuk dilantik semula pada setiap tahun sejajar dengan Seksyen 129(6) Akta Syarikat, Pada masa ini hanya Tan Sri Datuk Arshad Ayub sahaja yang tertakluk kepada syarat tersebut. Para Pengarah yang dilantik pada tahun kewangan ini tertakluk kepada perlantikan semula oleh para pemegang saham pada AGM berikutnya yang diadakan selepas perlantikan mereka (Artikel 93). Datuk Johan Jaaffar, yang dilantik pada 1 Januari 2006, telah dilantik semula pada AGM yang telah diadakan pada 20 Jun Jawatankuasa Lembaga Pengarah i) Jawatankuasa Pencalonan dan Imbuhan Sejajar dengan amalan dan pendekatan korporat Kumpulan JCorp, Jawatankuasa Pencalonan dan Imbuhan Sindora telah dibubarkan pada 21 September 2005 dan fungsi serta tanggungjawab tersebut kini diambilalih oleh Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp. Sindora diwakili secara langsung di dalam Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp oleh Pengerusi dan Pengarah Urusannya yang mana, masing-masing memegang jawatan Pengerusi dan ahli rasmi Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp. Tindakan yang diambil dengan menggabungkan fungsi Jawatankuasa Pencalonan dan Imbuhan di peringkat Kumpulan JCorp adalah satu amalan yang lumrah di kalangan syarikat-syarikat antarabangsa yang ternama dan terkemuka. Pertimbangan utama dan kelebihan strategik ekoran dari langkah penggabungan tersebut adalah akses kepada peluang mendapatkan individu yang berbakat, berkemahiran dan berkepakaran tinggi yang mampu diketengahkan oleh Kumpulan JCorp di samping menyelaraskan asas imbuhan yang lebih seragam dan kemaskini dalam Kumpulan berasaskan pasaran. Considering its important roles under the governance framework, the committee had conducted a self-assessment of its effectiveness. The evaluation summarises key principles and best practices that were aligned to Chapter 15 of Listing Requirements, the Code and the Guidance and is provided for AC Members use in assessing the committee s performance. It was extracted from Audit Committee Effectiveness What Works Best (3rd Edition) published by PricewaterhouseCoopers (PwC) and sponsored by the Institute of ii) Jawatankuasa Audit Jawatankuasa Audit (AC) yang dipengerusikan oleh Tan Sri Datuk Arshad Ayub, adalah terdiri daripada tiga orang ahli yang mana dua daripada mereka adalah Pengarah Bebas. Jawatankuasa bermesyuarat secara berjadual sekurang-kurangnya empat kali setahun. Fungsi dan aktiviti yang dijalankan oleh jawatankuasa pada tahun yang ditinjau terkandung di dalam Laporan Jawatankuasa Audit yang dibentangkan di muka surat 87 hingga 89 dalam Laporan Tahunan ini. 74 Sindora Berhad (13418-K)

42 Statement on corporate governance penyata tadbir urus korporat Internal Auditors (IIA) Research Foundation, USA. The evaluation covers areas on Financial Statements; Risk Management and Internal Control; Compliance and Ethics; Oversight of Management and Internal Audit; Relationship with External Auditors; Committee Composition; Training; Resources and Special Investigations; Charter and Evaluation; and Meetings. Directors Training All Directors have successfully attended the Mandatory Accreditation Programme as prescribed by Bursa Malaysia. The Board fully supports the need to enhance their skills and knowledge by attending relevant education programmes and seminars to keep abreast with development in the related industries even though with effect from 1 January 2005, it is no longer mandatory for directors to accumulate a specified amount of Continuing Education Programme (CEP) points annually. Supply of Information The Board has full and unrestricted access to all information pertaining to the Group s businesses and affairs. The Board and its Committees may also seek independent professional advice at the Company s expense in the course of discharging its duties. Board s Effectiveness The Board forms an important structure/platform of the overall sound internal control system. Beginning 2007, JCorp Group NRC has adopted a standardised format for the evaluation of the Board of Directors. One of the evaluations is extracted from Corporate Governance and the Board What Works Best published by PwC and sponsored by IIA Research Foundation, USA. The evaluation covers areas on Strategy and Planning; Risk Management; Tone at the Top; Measuring and Monitoring Performance; Transformational Transactions; Management Evaluation; Compensation and Succession Planning; Transparency; and Board Dynamics. DIRECTORS REMUNERATION Procedure JCorp Group NRC is responsible for making recommendations on the framework, policy and procedures to determine and review the specific remuneration package of the Executive Directors and senior executives of JCorp Group, which includes Sindora Group. The objectives of the remuneration policy are: To ensure that individual rewards and incentives fairly relate to the performance of the individual, the Company and the interests of shareholders; and To attract and retain the most qualified and experienced senior executives. The Committee seeks independent advice, where appropriate, and has information on compensation and salary levels of other companies in similar industry of comparable size, for executives with similar skills, qualifications and experience for the purpose of reviewing the staffs salaries and benefits Group-wide. Memandangkan pentingnya peranan serta fungsinya di bawah rangka kerja tadbir urus, Jawatankuasa telah menjalankan penilaian sendiri terhadap keberkesanannya. Penilaian ini merumuskan prinsip penting dan amalan terbaik yang diselaraskan dengan Bab 15 Keperluan Penyenaraian, Kod dan Panduan serta disediakan untuk kegunaan Ahli-ahli AC dalam menilai prestasi Jawatankuasa. Prinsip dan amalan tersebut diambil daripada Audit Committee Effectiveness What Works Best (3rd Edition) yang diterbitkan oleh PricewaterhouseCoopers (PwC) dan ditaja oleh Institute of Internal Auditors (IIA) Research Foundation, Amerika Syarikat. Penilaian tersebut meliputi bidang-bidang berhubung Penyata Kewangan; Pengurusan Risiko dan Kawalan Dalaman; Pematuhan dan Etika; Pengawasan Pengurusan dan Audit Dalaman; Perhubungan dengan Juruaudit Luar; Komposisi Jawatankuasa; Latihan; Sumber dan Penyiasatan Khas; Piagam dan Penilaian; serta Mesyuarat. Latihan Pengarah Semua Pengarah telah menghadiri Program Akreditasi Mandatori seperti yang disyaratkan oleh Bursa Malaysia. Lembaga Pengarah menekankan kepada peri pentingnya meningkatkan kemahiran dan pengetahuan mereka melalui programprogram pendidikan dan seminar yang berkaitan supaya mereka sentiasa mengikuti perkembangan dalam industri-industri yang berkaitan, walaupun berkuatkuasa mulai 1 Januari 2005, para pengarah tidak lagi dikehendaki secara mandatori untuk mengumpul jumlah mata yang tertentu pada setiap tahun dalam Program Pendidikan Berterusan (CEP). Penyediaan Maklumat Lembaga Pengarah bebas untuk mendapatkan semua maklumat berkaitan bisnes dan hal ehwal Kumpulan. Lembaga Pengarah dan Jawatankuasa-jawatankuasanya juga boleh mendapatkan nasihat juruperunding profesional bebas dalam melaksanakan tugas mereka di mana perbelanjaan tersebut ditanggung oleh Syarikat. Keberkesanan Lembaga Pengarah Lembaga Pengarah merupakan struktur/landasan yang penting dalam memastikan sistem kawalan dalaman yang berkesan. Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp telah menerima pakai satu format borang yang seragam dalam sistem penilaian Lembaga Pengarah mulai tahun Salah satu daripada komponen penilaian tersebut dirujuk daripada Corporate Governance and the Board What Works Best yang diterbitkan oleh PwC dan ditaja oleh IIA Research Foundation, Amerika Syarikat. Penilaian tersebut merangkumi bidang-bidang Strategi dan Perancangan; Pengurusan Risiko; Tatacara Pengendalian Lembaga Pengarah; Mengukur dan Memantau Prestasi; Urusan Transformasi; Penilaian Pengurusan; Imbuhan dan Program Pelapis; Ketelusan; dan Dinamik Lembaga Pengarah. IMBUHAN PENGARAH Prosedur Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp bertanggungjawab mengemukakan syor-syor berhubung rangka kerja, polisi dan prosedur untuk mengkaji dan menentukan pakej imbuhan yang khusus bagi para Pengarah Eksekutif dan eksekutif kanan Kumpulan JCorp termasuk Kumpulan Sindora. Objektif polisi imbuhan tersebut adalah untuk: Memastikan supaya setiap ganjaran dan insentif adalah berdasarkan prestasi individu, Syarikat dan kepentingan para pemegang saham; dan Menarik dan mengekalkan pengurusan kanan yang berkelayakan dan berpengalaman. Sekiranya perlu, Jawatankuasa akan mendapatkan khidmat penasihat bebas dan mendapatkan maklumat berhubung tahap pampasan dan gaji di kalangan syarikatsyarikat lain dalam industri yang sama bagi para eksekutif mengikut kemahiran, kelayakan dan pengalaman yang serupa untuk tujuan penilaian semula gaji dan manfaat anggota pekerja Kumpulan. w w w. s i n d o r a. c o m. m y 75

43 Level and Make-up Directors fees are nominal and are limited to immediate compensation. Changes in the form and amount of directors compensation are determined by JCorp Group NRC/full Board, taking into consideration that the fees should be of no consequence to any director serving the Company. The Board critically reviews any amounts that a director might receive directly or indirectly from the Company, as well as any charitable contributions the Company may make to organisations with which a Director is affiliated. The Company does not purchase liability insurance for its Directors or officers. The Managing Director s remuneration comprises basic salary and other emoluments. Other customary benefits to the Group are made available as appropriate. Non-Executive Director s remuneration is based on a standard fee. An additional fee is also paid for each attendance to the Board and Audit Committee meetings. Tahap dan Bentuk Imbuhan Jawatankuasa Pencalonan dan Imbuhan Kumpulan JCorp / Lembaga Pengarah akan menentukan perubahan di dalam bentuk dan jumlah bayaran pengarah dengan mengambilkira bahawa yuran berkenaan tidak akan menjejaskan mana-mana pengarah yang sedang berkhidmat dengan Syarikat. Lembaga Pengarah akan mengkaji dengan teliti sebarang jumlah yang mungkin diterima secara langsung atau tidak langsung oleh seseorang pengarah daripada Syarikat, serta apa-apa sumbangan amal yang mungkin dikeluarkan oleh Syarikat kepada mana-mana organisasi yang berkaitan dengan seseorang Pengarah. Para Pengarah dan pegawai Syarikat tidak dilindungi oleh insurans liabiliti. Imbuhan kepada Pengarah Urusan meliputi gaji asas dan imbuhan lain. Manfaat lazim yang lain bagi Kumpulan telah disediakan berdasarkan kesesuaian. Imbuhan untuk para Pengarah Bukan Eksekutif adalah berdasarkan kepada yuran yang seragam. Setiap kehadiran di dalam mesyuarat Lembaga Pengarah dan Jawatankuasa Audit melayakkan pembayaran yuran tambahan kepada Pengarah. Directors Remuneration/Imbuhan Lembaga Pengarah Details of remuneration paid to each Director during the financial year 2006 are as follows: Butiran imbuhan yang dibayar kepada setiap Pengarah pada tahun kewangan 2006 adalah seperti berikut: MEETINGS allowance Directors Salary* Directors fees elaun benefit-in-kind total pengarah gaji* yuran pengarah mesyuarat manfaat jumlah RM RM RM RM executive/eksekutif Rozan Bin Mohd Sa at 308,920 42,000-47, ,076 Non-executive/Bukan eksekutif Tan Sri Dato Muhammad Ali Hashim - 56,000 3,000-59,000 Tan Sri Datuk Arshad Ayub - 28,000 4,000-32,000 Datuk Johan Bin Jaaffar - 24,000 2,800-26,800 Kua Hwee Sim - 28,000 4,000-32,000 Hj. Esa Bin Mamek - 28,000 2,400-30,400 Halmi Bin Jasmin - 28,000 3,600-31,600 * Includes fixed allowance and employer s contribution to EPF. * Termasuk elaun tetap dan caruman majikan kepada KWSP. INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATION Sindora adopts an open and transparent policy in respect of its relationship with its shareholders, investors and stakeholders. Different channel of communications are optimised to provide shareholders, investors and stakeholders with a balanced and comprehensive view of Sindora Group s performance. The Board and Management ensure accurate, clear, relevant and sufficient announcements are made to Bursa Malaysia to enable shareholders and investors to make informed decision. PERHUBUNGAN PELABUR DAN KOMUNIKASI DENGAN PEMEGANG SAHAM Sindora menerima pakai dasar yang terbuka dan telus berkaitan perhubungan dengan pemegang saham, pelabur dan pihak yang berkepentingan. Pelbagai saluran komunikasi digunakan secara optimum untuk menyebarkan maklumat yang seimbang dan menyeluruh mengenai prestasi Kumpulan Sindora kepada para pemegang saham, pelabur dan pihak yang berkepentingan. Lembaga Pengarah dan pihak pengurusan memastikan pengumuman yang tepat, jelas, relevan dan lengkap dikeluarkan kepada Bursa Malaysia bagi membolehkan para pemegang saham dan pelabur membuat keputusan yang tepat. 76 Sindora Berhad (13418-K)

44 Statement on corporate governance penyata tadbir urus korporat Sindora communicates with its shareholders and investors through Annual and Extraordinary General Meetings (AGM/EGM), Annual Reports and its website. Annual General Meeting The AGM serves as the principal forum for dialogue with shareholders. The role of the Board is to ensure that the AGMs are conducted in an efficient manner, which includes supply of timely and relevant information to shareholders and encouragement of active participation at the AGM. The annual report is sent to all shareholders each year and shareholders are free to contact the Company at all times. The Company s website, also provides easy and quick access to the latest financial, corporate and other significant information on the Group s various activities. ACCOUNTABILITY AND AUDIT In presenting the quarterly results and annual financial statements to shareholders, the Directors aim to present an accurate and balanced assessment of the Group s financial position and prospects. The Audit Committee reviews both the annual financial statements and quarterly reports to ensure that appropriate accounting policies are consistently applied and supported by reasonable and prudent judgment, and all accounting standards which the Board considers to be applicable have been followed. Internal Control The Board acknowledges its full responsibility to ensure a sound system of internal control covering the financial, operational and compliances aspect of the business. The Statement of Internal Control that provides an overview of the state of internal control is set out on page 79 to 83. Relationship with Auditors The Board, through the Audit Committee, maintains a transparent and appropriate relationship with the Group s internal and external auditors. The role of the Audit Committee in relation with the Auditors is illustrated in the Audit Committee Report set out on page 87 to 89. COMPLIANCE TO THE CODE The Board is of the opinion that Sindora Group had complied with the principles and best practices of Corporate Governance throughout the financial year ended 31 December ADDITIONAL INFORMATION Apart from providing the shareholders and the stakeholders at large with an overview of the state of corporate governance practices of the Company, the following is also disclosed for shareholders information: Management s Succession The Company does not anticipate that the Managing Director will retire other than due to disability. He reports to the Board on executive management s succession planning programmes. Sindora menyalurkan maklumat dan berkomunikasi dengan para pemegang saham dan pelaburnya antara lain melalui AGM dan Mesyuarat Agung Tahunan Luarbiasa, Laporan Tahunan dan laman web. Mesyuarat Agung Tahunan (AGM) AGM merupakan satu forum utama bagi menggalakkan komunikasi di antara para Pengarah Syarikat dengan para pemegang saham. Peranan Lembaga Pengarah adalah untuk memastikan supaya AGM berjalan dengan lancar, termasuk penyediaan maklumat yang tepat pada masanya dan relevan kepada pemegang saham serta menggalakkan penyertaan aktif pemegang-pemegang saham di dalam AGM. Laporan tahunan dihantar kepada semua pemegang saham pada setiap tahun dan mereka bebas untuk menghubungi Syarikat pada bila-bila masa. Laman web Syarikat di turut menyediakan akses yang mudah, pantas serta kemaskini mengenai maklumat kewangan, korporat dan yang berkaitan dengan aktiviti Kumpulan. kebertanggungjawaban DAN AUDIT Dalam membentangkan keputusan suku tahunan dan penyata kewangan tahunan kepada pemegang-pemegang saham, para Pengarah berusaha memastikan pembentangan kedudukan kewangan Kumpulan dan prospek adalah tepat dan seimbang. Jawatankuasa Audit menilai penyata kewangan tahunan dan laporan suku tahunan bagi memastikan supaya polisi perakaunan yang bersesuaian digunakan secara konsisten serta disokong oleh pertimbangan yang berpatutan dan berhemah, dan mematuhi kesemua piawaian perakaunan yang difikirkan sesuai oleh Lembaga Pengarah. Kawalan Dalaman Lembaga Pengarah bertanggungjawab sepenuhnya untuk memastikan bahawa sistem kawalan dalaman yang mantap meliputi aspek kewangan, operasi dan pematuhan dalam menjalankan bisnes. Penyata Kawalan Dalaman yang menerangkan aspek kawalan dalaman secara terperinci dibentangkan di muka surat 79 hingga 83. Perhubungan dengan Juruaudit Lembaga Pengarah, melalui Jawatankuasa Audit, mengekalkan hubungan yang telus dan wajar dengan juruaudit dalaman dan juruaudit luar. Peranan Jawatankuasa Audit berhubung dengan Juruaudit adalah sepertimana dinyatakan di dalam Laporan Jawatankuasa Audit di mukasurat 87 hingga 89. PEMATUHAN TERHADAP TADBIR URUS KORPORAT Lembaga Pengarah berpendapat bahawa Kumpulan Sindora telah mematuhi semua prinsip dan amalan terbaik dalam Tadbir Urus Korporat sepanjang tahun kewangan berakhir 31 Disember MAKLUMAT TAMBAHAN Selain daripada menyediakan satu tinjauan menyeluruh berhubung amalan tadbir urus korporat Syarikat kepada para pemegang saham dan pihak berkepentingan, perkara-perkara berikut turut didedahkan untuk makluman para pemegang saham: Barisan Pengurusan Pelapis Syarikat tidak menjangkakan bahawa Pengarah Urusan akan bersara melainkan atas sebab-sebab ketidakupayaan. Beliau melapor terus kepada Lembaga Pengarah berhubung program penyediaan barisan pengurusan pelapis. w w w. s i n d o r a. c o m. m y 77

45 Share Buy-Backs In the year under review, the Company had repurchased 1,292,200 units of its own shares for a total consideration of RM1,579,324 (including commission) or RM1.22 per share. The highest and lowest price paid for the purchases during the year were RM1.25 and RM1.15 respectively. All the shares purchased during the year were retained as treasury shares and none was cancelled. Non-Audit Fees The amount of non-audit fees paid by the Group to external auditors and other consultants for the financial year ended 31 December 2006 were as follows: Pembelian Semula Saham Dalam tahun yang ditinjau, Syarikat telah membeli semula 1,292,200 unit sahamnya sendiri berjumlah RM1,579,324 (termasuk komisyen) atau RM1.22 sesaham. Harga tertinggi dan terendah yang digunakan untuk pembelian semula sepanjang tahun masing-masing adalah RM1.25 dan RM1.15. Kesemua saham yang dibeli semula pada tahun ini disimpan sebagai saham perbendaharaan dan tiada yang dibatalkan. Yuran Bukan Audit Jumlah yuran bukan audit yang dibayar kepada juruaudit luar dan konsultan oleh Kumpulan bagi tahun kewangan berakhir 31 Disember 2006 adalah seperti berikut: Services/perkhidmatan RM Advisory and Consultancy Fees/Yuran Nasihat dan Perundingan 443,694 Financial and Legal Due Diligence/Audit Ketekunan Kewangan dan Perundangan 231,849 Valuation/Khidmat Jurunilai 36,920 Tax Consultancy/Yuran Perundingan Cukai 8,400 Internal Control Review/Pernilaian Kawalan Dalaman 5,000 TOTAL/Jumlah 725,863 This statement is made in accordance with the resolutions of the Board of Directors dated 22 March Penyata ini disediakan selaras dengan resolusi Lembaga Pengarah bertarikh 22 Mac TAN SRI DATO MUHAMMAD ALI HASHIM Chairman/Pengerusi ROZAN BIN MOHD SA AT Managing Director/Pengarah Urusan 78 Sindora Berhad (13418-K)

46 statement on internal control penyata kawalan dalaman The Board of Directors of Sindora Berhad (the Board) recognises the critical roles of corporate governance and a sound internal control to safeguard the interest of shareholders and other stakeholders. The Board is pleased to present the following report on the state of principles and applications of the internal controls of Sindora Berhad (Sindora) in accordance to Paragraph 15.27(b) of the Listing Requirements of Bursa Malaysia. BOARD S RESPONSIBILITY The Board s primary role is to oversee and review the adequacy and effectiveness of the internal controls and risk management procedures across the various operating subsidiaries in the Group. The Board has in place, an ongoing process for identifying, evaluating and managing the significant risks faced by Sindora Group and this is regularly reviewed by the Board, through the Audit Committee, in accordance with the Statement on Internal Control: Guidance For Directors of Public Listed Companies (the Guidance). Any systems of internal control, due to its inherent limitations, are only designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss. In making this Statement, pursuant to Paragraph 46 of the Guidance, the Board has excluded the assessment of controls on associate companies Willis (Malaysia) Sdn Bhd, MM Vitaoils Sdn Bhd and AmanahRaya JMF Asset Management Sdn Bhd (AR-JMF). Sindora is represented in the Board of these associate companies by the Managing Director of the Company. INTERNAL CONTROL FRAMEWORK The Board adopted Sponsoring Organisations of the Treadway Commission s (COSO) Internal Control Integrated Framework since Internal control is defined as a process, effected by Sindora s Board and Management, designed to provide reasonable assurance regarding the achievement of the Company s objectives, which focuses on four fundamental elements as follows: Lembaga Pengarah Sindora Berhad (Lembaga Pengarah) mengiktiraf kepentingan tadbir urus korporat dan kawalan dalaman yang mantap untuk melindungi kepentingan para pemegang saham dan pihak berkepentingan lain. Lembaga Pengarah dengan sukacitanya membentangkan laporan berhubung dengan prinsip dan amalan kawalan dalaman Sindora Berhad (Sindora), selaras dengan Perenggan (b) Keperluan Penyenaraian Bursa Malaysia. TANGGUNGJAWAB LEMBAGA PENGARAH Peranan utama Lembaga Pengarah adalah untuk mengawalselia dan mengkaji kecukupan dan keberkesanan prosedur kawalan dalaman dan pengurusan risiko di dalam Kumpulan Sindora. Lembaga Pengarah telah menyediakan satu proses berterusan untuk mengenalpasti, menilai dan menguruskan risiko-risiko utama yang dihadapi oleh Kumpulan. Lembaga Pengarah, melalui Jawatankuasa Audit, mengenalpasti secara berterusan tahap keberkesanan proses tersebut selaras dengan Penyata Kawalan Dalaman: Panduan untuk Pengarah Syarikat-syarikat Senarai Awam (Panduan Pengarah). Sistem kawalan dalaman ini diolah sebaik mungkin untuk mengurus risiko dalam usaha mencapai objektif korporat. Sehubungan dengan itu sistem ini hanya berupaya menyediakan kawalan dalaman yang efektif tetapi tidak menolak kebarangkalian berlakunya salahnyata atau kerugian yang ketara. Lembaga Pengarah ingin memaklumkan bahawa menurut Perenggan 46 Panduan Pengarah, penyata ini tidak meliputi penilaian kawalan bagi syarikat-syarikat sekutu, iaitu Willis (Malaysia) Sdn Bhd, MM Vitaoils Sdn Bhd dan AmanahRaya JMF Asset Management Sdn Bhd (AR-JMF). Penilaian kawalan terhadap syarikatsyarikat sekutu tersebut adalah melalui penglibatan Pengarah Urusan Sindora di dalam Lembaga Pengarah syarikat-syarikat berkenaan. RANGKA KERJA KAWALAN DALAMAN Lembaga Pengarah telah menerima pakai garis panduan yang ditetapkan oleh Committee of Sponsoring Organisation of the Treadway Commission s (COSO) Internal Control Integrated Framework sejak Kawalan dalaman ditakrif sebagai satu proses yang dikuatkuasakan oleh Lembaga Pengarah dan Pengurusan Sindora, di mana ianya diolah untuk memastikan objektif Syarikat tercapai dan tertumpu kepada empat elemen asas sebagaimana berikut: Information & Communication Maklumat & komunikasi Monitoring Pemantauan Control Environment Persekitaran Kawalan Control Activities Aktiviti Kawalan Risk Assessment Penilaian Risiko w w w. s i n d o r a. c o m. m y 79

47 CONTROL ENVIRONMENT The Board has clear strategies in dealing with the significant risks that have been identified. The Group s structure has been established with clearly defined lines of responsibility, limits of authority and accountability aligned to business and operations requirements that support the maintenance of an effective control environment. 1. RISK ASSESSMENT Enterprise-Wide Risk Management (EWRM) For the financial year under review, the Board is satisfied that the Group s objectives are adequately supported by strategic business plans and budgets. The Group has in place an effective risk management policy together with effective mechanisms to anticipate and respond to changes. The Group had established an EWRM framework which was adopted from the Australian/New Zealand Standard (AS/NZS) EWRM provides a structured approach to identify, evaluate and mitigate the risk exposure of performing various activities within the Group. The Chief Risk Officer (CRO) is responsible to oversee the implementation of EWRM at Group level with the support of Risk Officers from each Operating Unit. Risk Policy The main underlying principles of Group s risk policy are: Informed risk management element of Group s business strategy. Effective risk management that provides greater assurance of the Group s vision and strategy to be achieved. Each business unit and division is expressly responsible for managing the risks associated with its respective business and investments project. PERSEKITARAN KAWALAN Lembaga Pengarah menggariskan strategi yang jelas untuk menangani risiko-risiko utama. Struktur Kumpulan adalah berasaskan kepada skop tanggungjawab yang telah ditetapkan, had-had kuasa dan kebertanggungjawaban yang ditakrif dengan jelas, selaras dengan keperluan bisnes dan operasi bagi memastikan persekitaran kawalan yang berkesan. 1. PENILAIAN RISIKO Enterprise-Wide Risk Management (EWRM) Lembaga Pengarah berpuashati bahawa pada tahun dinilai, objektif Kumpulan disokong dengan sewajarnya melalui perancangan bisnes strategik dan bajet. Kumpulan telah mewujudkan polisi pengurusan risiko yang efektif beserta mekanisma yang berkesan untuk menjangkakan dan bertindakbalas terhadap sebarang perubahan dan kemungkinan. Kumpulan telah mewujudkan rangka kerja EWRM yang berpandukan kepada sistem Australian/New Zealand Standard (AS/NZS) EWRM menyediakan pendekatan yang rapi untuk mengenalpasti, menilai dan mengurangkan pendedahan terhadap risiko dalam melaksanakan pelbagai aktiviti Kumpulan. Ketua Pegawai Risiko (CRO) yang juga merupakan Pengurus Besar Syarikat, dengan bantuan Pegawai-pegawai Risiko daripada setiap Unit Operasi, bertanggungjawab untuk mengawalselia pelaksanaan EWRM di peringkat Kumpulan. Polisi Risiko Prinsip-prinsip asas utama polisi risiko Kumpulan adalah: Pemahaman unsur pengurusan risiko berkaitan dengan strategi bisnes Kumpulan. Pengurusan risiko yang berkesan bagi memastikan pencapaian wawasan dan strategi Kumpulan. Setiap Unit Bisnes dan Bahagian bertanggungjawab untuk mengurus risiko-risiko berkaitan dengan bisnes dan projek pelaburan masing-masing. ENTERPRISE-WIDE RISK MANAGEMENT STRUCTURE/ STRUKTUR PENGURUSAN RISIKO KUMPULAN Board of Directors Lembaga Pengarah Audit Committee Jawatankuasa Audit Internal Audit/Audit Dalaman Teraju Strategic Risk/Risiko Strategik Financial Risk/Risiko Kewangan Risk Management Committee Jawatankuasa Pengurusan Risiko Corporate Office/Pejabat Korporat Financial Risk/Risiko Kewangan Operational Risk/Risiko Operasi Hazard Risk/Risiko Bahaya Operating Unit A/Unit Operasi A Operating Unit B/Unit Operasi B Operating Unit C/Unit Operasi C Intrapreneur Venture Pro Office Solutions Tepak Marketing Metro Parking EPASA Shipping Sindora Timber E.A. Technique Plantation/Perladangan Financial Risk/Risiko Kewangan Operational Risk/Risiko Operasi Hazard Risk/Risiko Bahaya Strategic Risk/Risiko Strategik Financial Risk/Risiko Kewangan Operational Risk/Risiko Operasi Hazard Risk/Risiko Bahaya 80 Sindora Berhad (13418-K)

48 statement on internal control penyata kawalan dalaman All material risks are to be identified, analysed, managed, monitored and reported. Risks have been identified and analysed to determine the significance of the risk, the likelihood of occurrence and the controls established to address them. The risk architecture covers all risk categories strategic, financial, operational and hazards. Key Performance Indicators (KPI) The adoption of KPI is another tool to mitigate risks and it has proven successful due to the fact that risks associated with respective Operating Units have already been considered in determining the KPIs. Through KPIs, all operations are aligned with the organisation s goals and objectives. 2. CONTROL ACTIVITIES Policies, control objectives and internal controls have been designed and implemented for each risk. Internal controls are effected through policy manuals, organisation charts, job descriptions, operating instructions, delegations, authorisation, etc. Sindora has successfully obtained MS ISO 9001:2000 in provisions of investment and monitoring of businesses and subsidiaries. Tea blending and packaging processes, kiln drying and wood treatment activities, and management of car parks are also ISO 9001:2000 certified. Internal control is designed to ensure all activities and operations of the organisation are in compliance with policies and statutory obligations and include segregation of duties, reconciliation, inspections, security of assets and cash. Appropriate control activities are in place to safeguard funds and assets of the organisation and to ensure they are used ethically, economically, efficiently and effectively. 3. INFORMATION AND COMMUNICATION There is a clear line of communication throughout the organisation and with stakeholders. Employees regularly receive information and direction on matters, which has direct impact on the operations of the business units and the organisation. Formal and informal communication initiatives include, among others, strategic plans, vision and mission statements, specific and ad hoc reports, briefings, meetings and discussions, website, circulars and news bulletins, training and induction programmes. 4. MONITORING In addition to the on-going processes, independent evaluations of the control activities are performed regularly to ensure their effectiveness and relevance. Internal Audit Function The Internal Audit of the Group supervises the observance of internal control policy and procedures by performing regular reviews of the business processes. Audits on Operating Units are carried out on risk-based approach. The Audit Committee (AC) on a quarterly basis, reviews matters on internal controls, and consistently evaluates the effectiveness and adequacy of the Group s internal control system. Setiap risiko utama perlu dikenalpasti, dianalisa, diurus, dipantau dan dilaporkan. Risiko dikenalpasti dan dianalisa bagi menentukan tahap risiko berkenaan, kebarangkalian ianya terjadi dan kawalankawalan yang diwujudkan untuk menanganinya. Sistem pengawalan risiko meliputi semua kategori risiko strategik, kewangan, operasi dan bahaya. Petunjuk Prestasi Utama (KPI) Penggunaan KPI adalah satu lagi mekanisma untuk mengurangkan risiko dan ianya terbukti berkesan kerana risiko-risiko yang dikaitkan dengan setiap Unit Operasi telah pun diambilkira dalam menentukan KPI. Penentuan KPI dan pelaksanaannya diselaraskan dengan matlamat dan objektif organisasi. 2. AKTIVITI KAWALAN Kesemua dasar, objektif kawalan dan kawalan dalaman telah diolah dan dilaksanakan bagi setiap risiko. Kawalan dalaman dikuatkuasakan melalui manual polisi, carta organisasi, skop kerja, manual operasi, pembahagian tugas tanggungjawab serta mandat dan lain-lain. Sindora telah berjaya diakreditasi dengan ISO 9001:2000 di dalam kategori Peruntukan Pelaburan dan Pemantauan Bisnes dan Syarikat- Syarikat Anak. Beberapa aktiviti di peringkat syarikat-syarikat anak termasuk proses mengadun dan membungkus teh, aktiviti tanur pengeringan dan pengawetan kayu, dan pengurusan tempat letak kereta juga telah memperolehi pensijilan ISO 9001:2000. Kawalan dalaman diwujudkan untuk memastikan supaya semua aktiviti dan operasi dalam organisasi mematuhi dasar dan keperluan berkanun serta meliputi pembahagian tugas, penyesuaian, pemeriksaan, keselamatan aset dan wang tunai. Aktiviti kawalan yang sewajarnya dilaksanakan untuk melindungi sumber dan aset organisasi dan bagi memastikan ianya digunakan secara beretika, ekonomikal, cekap dan berkesan. 3. MAKLUMAT DAN KOMUNIKASI Terdapat saluran komunikasi yang jelas di seluruh organisasi dan pihak berkepentingan. Anggota pekerja menerima maklumat dan arahan secara kerap berhubung dengan hal-hal yang mendatangkan kesan langsung terhadap operasi Unit-Unit Bisnes dan organisasi. Komunikasi yang rasmi dan tidak rasmi meliputi antara lainnya perancangan strategik, penyata wawasan dan misi, laporan khusus dan ad hoc, penerangan, mesyuarat dan perbincangan, laman web, pekeliling dan buletin, serta program-program latihan dan induksi. 4. PEMANTAUAN Penilaian bebas dijalankan secara kerap bagi memastikan keberkesanan dan kesesuaian aktiviti-aktiviti kawalan. Fungsi Audit Dalaman Audit Dalaman Kumpulan memantau kepatuhan terhadap polisi dan prosedur kawalan dalaman dengan melaksanakan penilaian secara kerap ke atas proses bisnes. Audit ke atas Unit-unit Operasi dilaksanakan berdasarkan kepada kaedah mengenalpasti risiko. Jawatankuasa Audit (AC) akan mengkaji secara suku tahunan, halhal berhubung kawalan dalaman, dan menilai secara berterusan keberkesanan dan kecukupan sistem kawalan dalaman Kumpulan. w w w. s i n d o r a. c o m. m y 81

49 GOVERNANCE COMMITTEES Whilst the Board maintains full control of the Group s direction over strategic, financial, organisational and compliance issues, it has delegated to the Management the implementation of the internal control system. Accordingly, the Management has established various committees to discharge its roles and responsibilities as follows: Jawatankuasa Tadbir Urus Lembaga Pengarah menentukan sepenuhnya halatuju Kumpulan berkaitan isu-isu strategik, kewangan, organisasi dan pematuhan, manakala pihak pengurusan pula dipertanggungjawabkan untuk melaksanakan sistem kawalan dalaman. Pihak pengurusan telah mewujudkan beberapa jawatankuasa untuk menjalankan peranan dan tanggungjawabnya sebagaimana berikut: Teraju Management Committee Meeting Mesyuarat Jawatankuasa Pengurusan Lembaga Korporat Governance Committees Jawatankuasa Tadbir Urus Induk Perjawatan Investment Committee Jawatankuasa Pelaburan Risk Management committee Jawatankuasa Pengurusan Risiko TERAJU It is the highest management decision-making committee that focuses on strategic issues and policies, including financial matters and Board s decisions. MANAGEMENT COMMITTEE MEETING (MCM) It focuses on operational issues and monitors the implementation of decisions by the Board, the Audit Committee and TERAJU. INVESTMENT COMMITTEE It functions primarily to assess and evaluate new projects/investment proposals for recommendations to TERAJU and the Board. RISK MANAGEMENT COMMITTEE It oversees the implementation of the EWRM process, including identification of risks, development of risk management strategies, implementation and monitoring of EWRM activities. INDUK PERJAWATAN It evaluates and proposes on issues, policies and strategies related to human resource management of the Group. LEMBAGA KORPORAT It focuses on corporate matters including financial performance of the Group. Mesyuarat Jawatankuasa Pengurusan Tertinggi (TERAJU) Mesyuarat Jawatankuasa pengurusan tertinggi yang membuat keputusan dan memfokus isu-isu strategik dan dasar, termasuk halhal kewangan dan keputusan Lembaga Pengarah. Mesyuarat Jawatankuasa Pengurusan (MCM) Memfokus isu-isu operasi dan memantau pelaksanaan keputusan Lembaga Pengarah, Jawatankuasa Audit dan TERAJU. Jawatankuasa Pelaburan Fungsinya tertumpu kepada penilaian dayamaju cadangan projek/pelaburan baru untuk disyorkan kepada TERAJU dan Lembaga Pengarah. Jawatankuasa Pengurusan Risiko Pelaksanaan proses EWRM, termasuk mengenal pasti risiko, mewujudkan strategi pengurusan risiko, pelaksanaan dan pemantauan aktiviti-aktiviti EWRM. Jawatankuasa Pengurusan Sumber Manusia (INDUK PERJAWATAN) Penilaian dan cadangan berhubung isu, polisi dan strategi berkaitan pengurusan sumber manusia Kumpulan. Lembaga Korporat Memfokus kepada hal-hal korporat termasuk prestasi kewangan Kumpulan. 82 Sindora Berhad (13418-K)

50 statement on internal control penyata kawalan dalaman OTHER OVERSIGHT FUNCTIONS Internal Quality Audits (IQAs) are performed regularly to ensure conformance to systems and procedures of ISO standards. Such conformance is further ensured through surveillance audits by numerous external parties. Pemantauan di Peringkat Syarikat Anak Di peringkat syarikat-syarikat anak, Audit Kualiti Dalaman (IQA) dilaksanakan secara kerap bagi memastikan pematuhan terhadap sistem dan prosedur mengikut piawaian ISO. Pematuhan tersebut diperkukuhkan lagi melalui audit oleh pelbagai pihak luar. Operating Unit/Unit Operasi Scope/Skop Oversight Function/Fungsi Pemantauan Sindora Timber Sdn Bhd Kiln Drying and wood treatment activities SGS Yarsley (M) Sdn Bhd Aktiviti tanur pengeringan dan pengawetan kayu Audio Metric Test SGS Yarsley (M) Sdn Bhd Ujian Audio Metrik Tepak Marketing Sdn Bhd Company procedures and food safety system SIRIM QAS International Sdn Bhd Prosedur Syarikat dan sistem keselamatan makanan Quality Dossier including HACCP audits by Unilever (M) Sdn Bhd SIRIM QAS International Sdn Bhd Quality Dossier termasuk audit HACCP oleh Unilever (M) Sdn Bhd Metro Parking (M) Sdn Bhd Company procedures in management of car parks SIRIM QAS International Sdn Bhd Prosedur dalam pengurusan tempat letak kereta SIRIM QAS International Sdn Bhd Pro Office Solutions Sdn Bhd Monthly service performance audit Major clients Audit bulanan prestasi perkhidmatan Pelanggan-pelanggan utama REGULATORS AND EXTERNAL AUDITORS The external auditors are engaged to express an opinion on the financial statements of the Company and the Group. They discussed with Management on the financial statements of the Company and the Group and presented their audit findings to the Audit Committee. Operating Units are also subjected to periodical inspections by various authorities and agencies such as the Department of Occupational Safety and Health, Fire and Rescue Department, Department of Environment, Land Office, and other relevant authorities to ensure satisfactory compliance. REVIEW BY THE EXTERNAL AUDITORS The External Auditors have reviewed this Statement pursuant to Paragraph of the Listing Requirements and in accordance with Recommended Practise Guides (RPG) 5, Guidance for Auditors on the Review of Directors Statement on Internal Control, and reported that nothing has come to their attention that cause them to believe that this Statement is inconsistent with their understanding of the processes that the Board has adopted in reviewing the adequacy and integrity of the system of internal control. ASSURANCE The Board is of the opinion that the state of existing internal controls is appropriate and effective, and that risks are within an acceptable level throughout the Group s businesses. This Statement, signed on behalf of the Board of Directors, is in accordance with a resolution of the Board of Directors dated 22 March Pihak Berkuasa Dan Juruaudit Luar Juruaudit luar dilantik untuk memberikan maklumbalas ke atas penyata kewangan Syarikat dan Kumpulan. Laporan kewangan Syarikat dan Kumpulan dibincangkan dengan pihak pengurusan, manakala penemuan audit dibentangkan kepada Jawatankuasa Audit. Unit-Unit Operasi juga tertakluk kepada pemeriksaan berkala oleh pihak berkuasa dan agensi seperti Jabatan Keselamatan dan Kesihatan Pekerjaan, Jabatan Bomba dan Penyelamat, Jabatan Alam Sekitar, Pejabat Tanah dan lain-lain pihak berkuasa berkaitan bagi memastikan pematuhan berada di tahap yang memuaskan. PENILAIAN OLEH JURUAUDIT LUAR Juruaudit Luar telah meneliti Penyata Kawalan Dalaman ini menurut Perenggan Keperluan Penyenaraian dan selaras dengan Recommended Practice Guides (RPG) 5, Guidance for Auditors on the Review of Directors Statement on Internal Control. Juruaudit Luar juga telah melaporkan kepada Lembaga Pengarah bahawa menurut pemerhatian mereka Penyata ini adalah selari dengan proses-proses yang telah diterimapakai oleh Lembaga Pengarah dalam mengkaji kecukupan dan kewibawaan sistem kawalan dalaman. Jaminan Lembaga Pengarah berpendapat bahawa sistem kawalan dalaman yang sedia ada adalah bersesuaian dan berkesan, dan risiko di seluruh bisnes Kumpulan berada di tahap yang terkawal. Penyata yang ditandatangani bagi pihak Lembaga Pengarah ini adalah selaras dengan resolusi Lembaga Pengarah bertarikh 22 Mac w w w. s i n d o r a. c o m. m y TAN SRI DATO MUHAMMAD ALI HASHIM Chairman/Pengerusi ROZAN BIN MOHD SA AT Managing Director/Pengarah Urusan 83

51 Additional Disclosure pendedahan maklumat tambahan UTILISATION OF PROCEEDS The Company has not implemented any fund raising exercise during the financial year. PENGGUNAAN KUTIPAN DANA Syarikat tidak melaksanakan sebarang cadangan mendapatkan pembiayaan dana dalam tahun kewangan yang dikaji. OPTION, WARRANTS OR CONVERTIBLE SECURITIES No options, warrants or Convertible Securities were exercised during the financial year. OPSYEN, WARAN ATAU SEKURITI BOLEH TUKAR Tiada sebarang opsyen, waran atau Sekuriti Boleh Tukar dilaksanakan dalam tahun kewangan AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR) The Company has not sponsored any ADR or GDR programme during the financial year. SANCTIONS AND/OR PENALTIES There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by any regulatory bodies during the financial year. VARIATION IN RESULTS There were no material variation between the audited results for the financial year ended 31 December 2006 and the unaudited results previously released for the financial quarter ended 31 December PROFIT GUARANTEE There were no shortfall in the profit guarantee received by the Company in the financial year ended 31 December MATERIAL CONTRACTS Save as disclosed below, there was no other material contracts entered into by the Company and/or its subsidiaries involving Directors and major shareholders interests subsisting at 31 December 2006 or entered into since the end of the previous financial year ended 31 December (i) (ii) Johor Land Berhad, via a letter dated 27 February 2006 has agreed to extend the approval period of the proposed Development Agreement with Pembinaan Prefab Sdn Bhd to 31 August Johor Land Berhad, via a letter dated 23 August 2006 has agreed to extend the approval period of the said agreement to 28 February AMERICAN DEPOSITORY RECEIPT (ADR) ATAU GLOBAL DEPOSITORY RECEIPT (GDR) Syarikat tidak menaja sebarang program ADR atau GDR dalam tahun kewangan SEKATAN DAN/ATAU PENALTI Tiada sekatan dan/atau penalti yang telah dikenakan ke atas Syarikat dan syarikat-syarikat anaknya, para Pengarah atau pihak pengurusan oleh mana-mana pihak berkuasa dalam tahun kewangan. PERBEZAAN PADA KEPUTUSAN KEWANGAN Tiada perbezaan ketara antara keputusan beraudit bagi tahun kewangan berakhir 31 Disember 2006 dengan keputusan tidak diaudit yang telah diumumkan sebelumnya bagi suku tahun kewangan berakhir 31 Disember JAMINAN KEUNTUNGAN Tidak terdapat kekurangan jaminan keuntungan yang diterima oleh Syarikat dalam tahun kewangan berakhir 31 Disember KONTRAK-KONTRAK PENTING Kecuali yang dinyatakan di bawah, tiada sebarang kontrak penting lain yang telah dimeterai oleh Syarikat dan/atau syarikat-syarikat anaknya yang melibatkan kepentingan para Pengarah dan pemegang saham utamanya setakat 31 Disember 2006 atau sejak akhir tahun kewangan yang lalu berakhir 31 Disember (i) (ii) Johor Land Berhad, melalui satu surat bertarikh 27 Februari 2006 telah bersetuju untuk melanjutkan tempoh kelulusan bagi Perjanjian Pembangunan dengan Pembinaan Prefab Sdn Bhd hingga 31 Ogos Johor Land Berhad, melalui satu surat bertarikh 23 Ogos 2006 telah bersetuju untuk melanjutkan tempoh kelulusan bagi perjanjian yang sama hingga 28 Februari Sindora Berhad (13418-K)

52 additional disclosure pendedahan maklumat tambahan (iii) Sindora has on 11 August 2006 entered into a conditional Sale and Purchase Agreement with Abdul Hak Bin Mohd Amin, Hamidah Bt Omar and Zulkifli Bin Mohd Amin to acquire 6,901,779 ordinary shares of RM1.00 each in E.A. Technique (M) Sdn Bhd (EA Tech) representing 51.0% equity interest for a purchase consideration of RM38,250,000 to be satisfied by cash (Proposed Acquisition). (iii) Pada 11 Ogos 2006, Sindora telah memeterai Perjanjian Jual Beli (SPA) bersyarat dengan Abdul Hak Bin Mohd Amin, Hamidah Bt Omar dan Zulkifli Bin Mohd Amin untuk mengambilalih 6,901,779 saham biasa berharga RM1.00 sesaham dalam E.A. Technique (M) Sdn Bhd (EA Tech) yang merupakan 51.0% kepentingan ekuiti dengan pertimbangan harga sebanyak RM38,250,000 yang telah dibayar secara tunai (Cadangan Pengambilalihan). (iv) (v) Sindora had on 15 August 2006, entered into a 15-year concession agreement with Johor Corporation and Metro Parking (M) Sdn Bhd, to manage, operate and maintain a multi-storey car park together with other parking facilities at Persada Johor International Convention Centre in Johor Bahru for a concession consideration of RM15.0 million to be settled by way of cash. Sindora had on 25 November 2006 entered into a conditional share sale agreement (SSA) with Yurlida Binti Mohd Zain, Romli Bin Ishak and Muhammad Nor Anuar Bin Hashim (collectively the Vendors) to acquire, in total 90,000 ordinary shares of RM1.00 each in GranuLab (M) Sdn Bhd, representing 90% of the issued and paid-up share capital of GranuLab, for a purchase consideration of RM270,000 or RM3.00 per share (Proposed Acquisition). After the completion of the Proposed Acquisition, Sindora is also entitled to subscribe for up to an additional 3,150,000 new shares at par value, representing 90% of the additional 3,500,000 new shares to be issued by GranuLab to increase its issued and paid-up share capital up to RM3,600,000. SHARE BUY-BACKS During the financial year, the Company repurchased from the open market a total of 1,292,200 of its issued ordinary shares. As at the end of the financial year 31 December 2005, the Company had repurchased 4,572,100 units of its issued shares from the open market. A total of 4,571,393 units of the treasury shares were distributed to entitled shareholders on 10 February 2006 which resulted in the balance of 1,292,907 units as at 31 December 2006 after the purchase of 1,292,200 units in between February and April The total shares repurchased are being held as treasury shares and carried at cost in accordance with the requirement of Section 67A of the Companies Act, The details of the repurchase are as follows: (iv) (v) Pada 15 Ogos 2006, Sindora telah memeterai perjanjian konsesi 15 tahun dengan Johor Corporation dan Metro Parking (M) Sdn Bhd, untuk mengurus, mengendali dan menyelenggara tempat letak kereta bertingkat berserta dengan kemudahan yang berkaitan di Pusat Konvensyen Antarabangsa Persada Johor di Johor Bahru dengan pertimbangan harga berjumlah RM15.0 juta yang dilunaskan secara tunai. Pada 25 November 2006, Sindora telah memeterai perjanjian penjualan saham (SSA) bersyarat dengan Yurlida Binti Mohd Zain, Romli Bin Ishak dan Muhammad Nor Anuar Bin Hashim (secara kolektif dikenali sebagai Vendor) untuk mengambilalih sebanyak 90,000 saham biasa berharga RM1.00 sesaham dalam GranuLab (M) Sdn Bhd, meliputi 90% modal saham terbitan dan berbayar di dalam GranuLab, dengan pertimbangan harga sebanyak RM270,000 atau RM3.00 sesaham (Cadangan Pengambilalihan). Selepas penyelesaian Cadangan Pengambilalihan tersebut, Sindora juga berhak untuk melanggan sehingga 3,150,000 tambahan saham baru pada nilai tara, meliputi 90% daripada 3,500,000 tambahan saham baru yang akan diterbitkan oleh GranuLab untuk meningkatkan modal saham terbitan dan berbayarnya sehingga RM3,600,000. PEMBELIAN BALIK SAHAM Dalam tahun kewangan 2006, Syarikat telah membeli balik 1,292,200 saham biasa terbitannya daripada pasaran terbuka. Sehingga akhir tahun kewangan 31 Disember 2005, Syarikat telah membeli balik 4,572,100 unit saham terbitannya daripada pasaran terbuka. Sebanyak 4,571,393 unit saham perbendaharaan telah diagihkan kepada para pemegang saham yang layak pada 10 Februari 2006 di mana baki saham yang tinggal adalah sebanyak 1,292,907 unit pada 31 Disember 2006 selepas pembelian 1,292,200 unit antara bulan Februari dan April Kesemua saham yang dibeli balik dipegang sebagai saham perbendaharaan dan dibawa pada kos selaras dengan keperluan Seksyen 67A Akta Syarikat, Butir-butir pembelian semula tersebut adalah seperti berikut: Quantity/ Average Market Price/ Total Consideration/ Month/Bulan Kuantiti Purata Harga Pasaran Jumlah Pembayaran 2006 (RM) (RM) Feb/Feb 58, , Mar/Mac 554, , Apr/Apr 679, , Total/Jumlah 1,292, ,579, The Board of Directors of Sindora Berhad is pleased to recommend for shareholders approval a payment of dividendin-specie through the distribution of treasury shares, amounting approximately to 2.82%, together with a final dividend of 2.18% less tax payable before end of July 2007 which will result in a total gross dividend payment of 10% for the financial year ended 31 December Lembaga Pengarah Sindora Berhad dengan sukacita mengesyorkan untuk kelulusan para pemegang saham, pembayaran dividend-in-specie melalui pengagihan saham perbendaharaan, dengan anggaran jumlah 2.82%, tertakluk kepada harga pasaran saham pada hari pengagihan tersebut, berserta dividen akhir sebanyak 2.18% ditolak cukai, yang akan dibayar sebelum akhir bulan Julai 2007 di mana jumlah pembayaran ini akan menghasilkan dividen kasar sebanyak 10% bagi tahun kewangan berakhir 31 Disember w w w. s i n d o r a. c o m. m y 85

53 statement on Directors responsibilities penyata Tanggungjawab pengarah Pursuant to Paragraph 15.27(a) of the Listing Requirements of Bursa Malaysia Securities Berhad. The Directors consider that in preparing the financial statements of the Group and of the Company for the financial year ended 31 December 2006, the Group and the Company have used appropriate accounting policies, consistently applied and supported by reasonable and prudent of judgements and estimates. The Directors also consider that all applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standard Boards have been followed and confirm that the financial statements have been prepared on a going concern basis. The Directors are responsible for ensuring that the Company and its subsidiaries keep accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Signed on behalf of the Board of Directors in accordance with their resolution dated 22 March Selaras dengan Perenggan 15.27(a) Keperluan Penyenaraian Bursa Malaysia Securities Berhad. Para Pengarah menganggap dalam menyediakan Penyata Kewangan Syarikat dan Kumpulan bagi tahun kewangan berakhir 31 Disember 2006, Syarikat dan Kumpulan telah menggunapakai dan mematuhi polisi perakaunan yang bersesuaian secara konsisten dan disokong oleh anggaran dan pertimbangan yang wajar. Para Pengarah juga beranggapan bahawa kesemua piawaian perakaunan yang diluluskan oleh entiti selain daripada entiti swasta yang dikeluarkan oleh Lembaga Piawaian Perakaunan Malaysia telah dipatuhi dan mengesahkan bahawa Penyata Kewangan tersebut telah disediakan mengikut dasar berterusan. TAN SRI DATO MUHAMMAD ALI HASHIM Chairman/Pengerusi Para Pengarah bertanggungjawab untuk memastikan bahawa Syarikat dan kesemua syarikat anaknya menyimpan rekod perakaunan yang mendedahkan secara wajar dan tepat pada setiap masa kedudukan kewangan Kumpulan dan Syarikat yang membolehkannya memastikan kesemua penyata kewangan tersebut mematuhi peruntukan-peruntukan di bawah Akta Syarikat, Para Pengarah juga bertanggungjawab untuk mengambil langkah yang sewajarnya bagi melindungi aset milik Kumpulan dan mencegah serta mengesan sebarang penipuan dan menyimpang dari kebiasaan. Ditandatangani bagi pihak Lembaga Pengarah mengikut resolusi bertarikh 22 Mac ROZAN BIN MOHD SA AT Managing Director/Pengarah Urusan 86 Sindora Berhad (13418-K)

54 Audit Committee Jawatankuasa Audit The Audit Committee (AC or the Committee) was established on 2 May 1995 to act as a committee of the Board of Directors. Jawatankuasa Audit (AC atau Jawatankuasa) telah ditubuhkan pada 2 Mei 1995 untuk bertindak sebagai Jawatankuasa kepada Lembaga Pengarah. OBJECTIVES OF THE AUDIT COMMITTEE The primary objective of the Audit Committee is to assist the Board of Directors (the Board) in discharging its statutory duties and responsibilities relating to accounting and reporting practices and ensuring sufficiency and effectiveness of the Group s internal control measures. It reviews the financial information to be provided to the shareholders and others as well as reviews the system of internal controls which the Management and the Board have established. COMPOSITION The members of Audit Committee shall be appointed by the Board from amongst its members and shall consists of not less than three of whom a majority shall not be executive directors of the Company and shall not have a relationship which in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the functions of Audit Committee. The Company Secretary shall be the secretary of the Committee. The Committee currently comprises three non-executive directors, two of whom including the Chairman are independent non-executive directors. The members are: Chairman Tan Sri Datuk Arshad Ayub Independent Non-Executive Director Members Kua Hwee Sim Independent Non-Executive Director Halmi Bin Jasmin Non-Independent Non-Executive Director AUTHORITY The Committee is authorised by the Board to: i. Investigate any matter within its terms of reference. OBJEKTIF JAWATANKUASA AUDIT Objektif utama Jawatankuasa Audit adalah untuk membantu Lembaga Pengarah menjalankan tugas dan tanggungjawab berkanunnya berkaitan amalan perakaunan dan laporan serta memastikan kecukupan dan keberkesanan langkah-langkah kawalan dalaman Kumpulan. Ia mengkaji maklumat kewangan untuk dikemukakan kepada pemegang-pemegang saham dan lain-lain pihak berkepentingan, termasuk menilai sistem kawalan dalaman yang telah ditentukan oleh pihak Pengurusan dan Lembaga Pengarah. KOMPOSISI Ahli-ahli Jawatankuasa Audit adalah dilantik oleh Lembaga Pengarah dari kalangan ahli-ahlinya dan terdiri tidak kurang daripada tiga orang, yang mana majoriti daripada mereka adalah Pengarah Bukan Eksekutif Syarikat dan tidak mempunyai sebarang perhubungan, yang pada pendapat Lembaga Pengarah, akan menjejaskan pelaksanaan pertimbangan bebas dalam menjalankan fungsi Jawatankuasa Audit. Setiausaha Syarikat bertindak sebagai setiausaha Jawatankuasa. Jawatankuasa sedia ada terdiri daripada tiga orang pengarah bukan eksekutif, yang mana dua orang daripada mereka, termasuk Pengerusi, adalah pengarah bebas bukan eksekutif. Ahli-ahli Jawatankuasa adalah sebagaimana berikut: Pengerusi Tan Sri Datuk Arshad Ayub Pengarah Bebas Bukan Eksekutif Ahli-ahli Kua Hwee Sim Pengarah Bebas Bukan Eksekutif Halmi Bin Jasmin Pengarah Bukan Bebas Bukan Eksekutif bidang KUASA Jawatankuasa diberi kuasa oleh Lembaga Pengarah untuk: i. Menyiasat apa jua perkara dalam bidang kuasanya. ii. Gain an unrestricted access to any information pertaining to the Group. ii. Memperolehi maklumat berkaitan Kumpulan tanpa sebarang sekatan. iii. Channel direct communication with the external auditors and person(s) carrying out the internal audit functions or activities. iv. Obtain external legal or other independent professional advice if it considers necessary. iii. Berkomunikasi secara langsung dengan juruaudit luar dan mana-mana individu yang menjalankan fungsi atau aktiviti audit dalaman. iv. Mendapatkan khidmat nasihat professional yang bebas sekiranya perlu. w w w. s i n d o r a. c o m. m y 87

55 RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties, the Committee shall: i. Review and approve scope and nature of audit, audit plan and audit reports of the Company and the Group. ii. Assess and review the adequacy and effectiveness of internal control system and accounting control procedures of the Company/Group and in particular review the external auditors management letters and management response. iii. Review the adequacy of the scope, functions and resources of the Company s internal audit department and ensure that it has the necessary authority to carry out its work. iv. Evaluate the quarterly interim results and annual financial statements of the Company, focusing particularly on: Any changes in accounting policies and practices. Significant adjustments arising from the external audits. Compliance with accounting standards and other legal requirements. v. Analyse the audit report and findings with the external auditors. vi. Review the follow-up actions taken by the Management on findings and recommendations by both the internal and external auditors. vii. Recommend to the Board on the appointment and resignation of the external auditors, the audit fees and other related matters. viii. Review any related party transactions and conflict of interest situation that may arise within the Company or the business units. TANGGUNGJAWAB DAN TUGAS Dalam melaksanakan tanggungjawab dan tugasnya, Jawatankuasa hendaklah: i. Mengkaji dan meluluskan skop dan bentuk audit, pelan audit, dan laporan audit bagi Syarikat dan Kumpulan. ii. Menilai dan mengkaji kecukupan dan keberkesanan sistem kawalan dalaman dan prosedur kawalan perakaunan Syarikat/Kumpulan, khususnya mengkaji laporan pengurusan juruaudit luar dan tindakan pengurusan. iii. Mengkaji semula kecukupan skop, fungsi-fungsi dan sumber jabatan audit dalaman serta memastikan ia mempunyai bidang kuasa yang diperlukan dalam melaksanakan tugas mereka. iv. Mengkaji keputusan laporan kewangan suku tahunan dan penyata kewangan tahunan Syarikat, dengan menitikberatkan kepada: Sebarang perubahan dalam dasar dan amalan perakaunan. Pelarasan penting yang timbul daripada audit luar. Pematuhan terhadap piawaian perakaunan dan keperluan perundangan lain. v. Menganalisa laporan audit dan sebarang penemuan dengan juruaudit luar. vi. Mengkaji tindakan susulan yang dilaksanakan oleh pihak pengurusan berhubung penemuan dan saranan oleh juruaudit dalaman dan luar. vii. Mengesyorkan kepada Lembaga Pengarah berhubung perlantikan dan perletakan jawatan juruaudit luar, yuran audit dan perkara-perkara lain yang berkaitan. viii. Mengkaji sebarang urusniaga pihak berkaitan dan percanggahan kepentingan yang mungkin timbul di dalam Syarikat atau unit-unit bisnes. ix. Report to the Board on a regular basis on the major events covered by the Committee and make recommendations to the Board and Management concerning these matters. ix. Melapor kepada Lembaga Pengarah secara kerap berhubung perkara-perkara penting yang diuruskan oleh Jawatankuasa dan mengemukakan saranan kepada Lembaga Pengarah dan pihak pengurusan berkaitan perkara ini. x. Perform any other functions as determined by the Audit Committee and the Board of Directors. x. Melaksanakan sebarang fungsi lain seperti yang ditentukan oleh Jawatankuasa Audit dan Lembaga Pengarah dari masa ke semasa. 88 Sindora Berhad (13418-K)

56 audit committee jawatankuasa audit MEETINGS AND ACTIVITIES The Audit Committee shall meet at least four times a year. The Managing Director, General Manager, Finance Manager, Internal Audit Manager and representatives from respective business units and/or subsidiaries and associates, if necessary, shall normally be invited to attend the meeting. The Committee may also request any member of the Management and representatives of the External Auditors and Management Agent to be present at the Committee meetings. The attendance of each member of the Committee is as follows: MESYUARAT DAN AKTIVITI Jawatankuasa Audit hendaklah bermesyuarat sekurang-kurangnya empat kali setahun. Pengarah Urusan, Pengurus Besar, Pengurus Kewangan, Pengurus Audit Dalaman dan wakil-wakil dari unit bisnes yang berkaitan dan/atau syarikat-syarikat anak dan sekutu, sekiranya perlu, akan dijemput untuk menghadiri mesyuarat. Jawatankuasa juga boleh meminta mana-mana pihak pengurusan dan wakil-wakil Juruaudit Luar serta Ejen Pengurusan untuk menghadiri mesyuarat Jawatankuasa. Kehadiran setiap ahli Jawatankuasa adalah seperti berikut: DATE OF MEETING/tarikh mesyuarat Directors 23 Feb May Aug Nov 2006 Pengarah 23 Feb Mei Ogos Nov 2006 Tan Sri Datuk Arshad Ayub Kua Hwee Sim Halmi Bin Jasmin SUMMARY OF ACTIVITIES During the financial year ended 31 December 2006, the activities of the Audit Committee included the following: i. Review the findings of the internal audit functions and ensure appropriate actions were taken and recommendations implemented. ii. Assess and review the unaudited quarterly results, annual audited accounts and any related announcements prior to Board s approval and subsequent release to Bursa Malaysia. iii. Review with external auditors the results and issue from audit findings and resolutions of such issues and management letter including management response. iv. Evaluate and approve Internal Audit Department s annual audit plan, including its resources and training needs. v. Review, analyse, deliberate and monitor the Group s Enterprise- Wide Risk Management (EWRM) which includes key operational and strategic risks and actions taken to address and mitigate such risks. vi. Assess the Corporate Governance and Internal Control Statements to be included in the Group s Annual Report. vii. Report to the Board on a regular basis on major events covered by the Committee and make recommendations to the Board and Management concerning these matters. viii. Perform any other activities as outlined in the Audit Charter, or any other activities the Board deems necessary, including but not limited to the Company s legal and regulatory compliance. RINGKASAN AKTIVITI Pada tahun kewangan berakhir 31 Disember 2006, aktiviti-aktiviti Jawatankuasa Audit termasuk perkara-perkara berikut: i. Mengkaji penemuan oleh fungsi audit dalaman dan memastikan supaya tindakan yang sewajarnya diambil dan cadangan dilaksanakan. ii. Menilai dan mengkaji pencapaian kewangan suku tahunan yang belum diaudit,akaun beraudit tahunan dan sebarang pengumuman berkaitan, sebelum diluluskan oleh Lembaga Pengarah dan kemudian dilaporkan kepada Bursa Malaysia. iii. Mengkaji bersama juruaudit luar, keputusan dan isu-isu daripada penemuan audit dan penyelesaian isu-isu tersebut serta laporan pengurusan termasuk tindakan pengurusan. iv. Menilai dan meluluskan rancangan audit tahunan jabatan audit dalaman, termasuk keperluan sumber dan latihannya. v. Mengkaji, menganalisa, membincang dan memantau Enterprise-Wide Risk Management Kumpulan yang meliputi risiko utama bagi operasi dan strategik dan tindakan yang diambil untuk menangani dan mengurangkan risiko-risiko tersebut. vi. Menilai Penyata Tadbir Urus Korporat dan Kawalan Dalaman yang dimuatkan di dalam Laporan Tahunan Kumpulan. vii. Melapor kepada Lembaga Pengarah secara kerap berhubung perkara-perkara penting yang diuruskan oleh Jawatankuasa dan mengemukakan cadangan kepada Lembaga Pengarah dan pihak Pengurusan berkaitan perkara tersebut. viii. Melaksanakan sebarang aktiviti lain seperti yang digariskan di dalam panduan Piagam Audit, atau sebarang aktiviti-aktiviti yang dianggap perlu oleh Lembaga Pengarah, termasuk dan tidak terhad kepada pematuhan undang-undang dan peraturan Syarikat. w w w. s i n d o r a. c o m. m y 89

57 sustainable Sindora is committed in creating a n d m a i n t a i n i n g a q u a l i t y environment throughout the Group in its effort to strengthen its corporate success. Sustainable environmental development is mainly observed in its oil palm and rubber plantations and biocompost production activities. Commitments which is pursued through a team effort includes delivering value to its stakeholders, creating a healthy and safe workplace for its employees and the society at large as well as maintaining the plantations as an eco-friendly business. To protect the environment, Sindora has complied with Environment Quality Act 1974, Pesticide Act 1974, Poison Act 1952, Occupational Safety and Health Act 1994 and other applicable regulations and requirements imposed by various relevant authorities. Among the initiatives undertaken are preventing pollution, minimising soil erosion and land contamination as well as other potential adverse environmental impact arising from the Company s operations, products and services. Specific focus was given on preparation of land for replanting, cultivation, fertilisers application, harvesting of oil palm fresh fruit bunches, tapping of latex, production of bio-compost and the general administration of the plantations. Sindora also strives for continuous improvement in its environmental performance by adopting ISO Environmental Management System. An Environmental Policy has also been used to provide the framework for setting and reviewing the environmental objectives and targets periodically. Sindora amat komited dan berusaha secara berterusan untuk mewujudkan dan mengekalkan persekitaran yang berkualiti di peringkat Kumpulan yang merupakan antara faktor penting bagi memastikan kesinambungan kejayaan korporatnya. Pembangunan alam sekitar yang mampan diamalkan khususnya dalam aktiviti perladangan kelapa sawit dan getah serta pengeluaran baja kompos. Komitmen yang diusahakan secara berpasukan ini memberi kesan secara langsung di dalam meningkatkan nilai kepada para pemegang sahamnya, mewujudkan tempat kerja yang sihat dan selamat untuk anggota pekerja dan masyarakat secara amnya serta mengekalkan perladangan sebagai satu bisnes yang mesra alam. Dalam usaha memelihara alam sekitar, Sindora telah mematuhi Akta Kualiti Alam Sekitar 1974, Akta Racun Perosak 1974, Akta Racun 1952, Akta Keselamatan dan Kesihatan Pekerjaan 1994 dan peraturan serta keperluan berkaitan lain yang dikuatkuasakan oleh pihak-pihak berkuasa yang berkenaan. Antara inisiatif yang dijalankan adalah pencegahan pencemaran, meminimumkan hakisan dan pencemaran tanah serta kesan-kesan alam sekitar berbahaya lain yang timbul daripada operasi, produk dan perkhidmatan Syarikat. environmental development pengekalan pembangunan alam sekitar Tumpuan yang khusus diberikan kepada penyediaan tanah untuk penanaman semula, penyemaian, pembajaan, aktiviti memetik buah tandan segar kelapa sawit, penorehan getah, pengeluaran baja kompos dan pentadbiran am perladangan. Sindora juga berusaha untuk mempertingkatkan secara berterusan prestasi alam sekitarnya dengan menerimapakai Sistem Pengurusan Alam Sekitar ISO Satu Dasar Alam Sekitar telah turut digunakan untuk menyediakan rangka kerja bagi penetapan dan pengkajian matlamat dan sasaran alam sekitar secara berkala. Dasar Alam Sekitar telah didokumentasi, dilaksana, dipelihara dan dihebahkan kepada semua anggota pekerja. Para pekerja digalakkan untuk menjalankan aktiviti mereka secara berhemah dan lebih bertanggungjawab terhadap alam sekitar. Dasar Alam Sekitar juga dipanjangkan kepada orang ramai dan pihakpihak lain yang berminat untuk berurusan secara langsung dengan Sindora. 90 Sindora Berhad (13418-K)

58 sustainable environmental development pengekalan pembangunan alam sekitar The Environmental Policy has been documented, implemented, maintained and communicated to all employees. Workers are encouraged to conduct their business activities in an environmentally responsible manner. The Environmental Policy has also been made available to the public and any other parties who express interest in Sindora s business activities. The Company also reviews, adopts and implements good agricultural and manufacturing practises through environmental management programmes. On-site waste has also been reduced, reused and recycled, wherever practicable, and waste is being disposed off safely without causing detrimental effects to the environment. Zero burning technique adopted by the oil palm estates for the replanting programmes has contributed to a cleaner environment and replenished the soil fertility with higher presence of organic substance. Sindora Timber Sdn Bhd (STSB) has implemented and sourced its timber raw materials from sustainable forest management system and certified sources. The aim is to position itself within the rapidly changing marketplace and foster environmental consciousness within the organisation. STSB s move is in line with the National Forestry Policy (NFP) that proposed to give effect to ecologically sustainable forest management. In conclusion, Sindora has incorporated in all its operations a sustainable development that contributes to environmental progress that meets all stakeholders aspirations and its obligation as a responsible corporate citizen. Syarikat turut mengkaji, menerimapakai dan melaksanakan amalan pertanian dan perkilangan yang baik melalui program-program pengurusan alam sekitar. Bahan buangan di tapak terbuka juga telah dikurangkan, diguna dan dikitar semula sekiranya bersesuaian dan bahan buangan dilupus secara selamat tanpa mencemarkan alam sekitar. Teknik pembakaran sifar yang diterimapakai oleh ladang-ladang kelapa sawit bagi program penanaman semula telah menyumbang kepada alam sekitar yang lebih bersih dan memulihkan kesuburan tanah dengan kehadiran unsur organik yang lebih tinggi. Sindora Timber Sdn Bhd (STSB) telah melaksanakan dan mendapatkan sumber kayu balaknya daripada sistem pengurusan hutan yang mampan dan dari sumber-sumber yang diiktiraf. Langkah ini memberi kelebihan kepada STSB dalam menghadapi saingan di dalam pasaran yang dinamik serta memupuk kesedaran peri pentingnya pengekalan alam sekitar di dalam organisasi. Langkah ini adalah sejajar dengan Dasar Perhutanan Negara (NFP) yang menggariskan pelaksanaan pengurusan hutan mampan yang baik dari segi ekologi. Secara keseluruhannya, Sindora telah berjaya menerapkan pembangunan dan pemuliharaan alam sekitar yang mampan di dalam semua operasi, justeru, menyumbang kepada perkembangan alam sekitar yang memenuhi aspirasi semua pihak yang berkepentingan di samping memenuhi kewajibannya sebagai warga korporat yang bertanggungjawab. w w w. s i n d o r a. c o m. m y 91

59 occupational safetyand health pematuhan terhadap keselamatan dan kesihatan pekerjaan Sindora Group recognises the importance in providing a safe and healthy working environment for its employees. Safety and health of the Group s workers are assured through the establishment of Sindora s Occupational Safety and Health Administration mission. The Group is steadfast in its objective to uphold the mission through setting and enforcing standards; providing training, outreach, and education; establishing partnerships; and encouraging continual improvement in workplace safety and health. Sindora takes priority in ensuring a safe working environment and excellent occupational health of its workers, as the Group aims to achieve Zero Accident and Zero Illness throughout all of its subsidiaries. As a step of precautionary measure to prevent and eliminate risk of any occupational accidents, injuries and health hazard, Safety and Health Committees were formed in each operational unit to continuously monitor and oversee employees activities. Safety and Health Committee meetings were held at each operational unit at least once in every three months and act as an avenue to mitigate and resolve any issues pertaining to the employees safety and health matters. compliance Kumpulan Sindora menyedari peri pentingnya menyediakan persekitaran kerja yang selamat dan sihat untuk para pekerjanya. Keselamatan dan kesihatan pekerja Kumpulan dipastikan melalui pembentukan misi Pentadbiran Keselamatan dan Kesihatan Pekerjaan Sindora. Kumpulan berpegang teguh kepada matlamatnya untuk mencapai misi tersebut melalui pembentukan dan penguatkuasaan piawaian; menyediakan latihan, program pendedahan dan pendidikan; mewujudkan kerjasama; dan menggalakkan kesinambungan peningkatan dalam keselamatan dan kesihatan tempat kerja. Memastikan persekitaran kerja yang selamat dan kesihatan pekerjaan yang cemerlang bagi para pekerjanya adalah perkara yang diutamakan oleh Sindora sejajar dengan matlamat Kumpulan untuk mencapai Kemalangan Sifar dan Penyakit Sifar di seluruh syarikat subsidiarinya. Sebagai langkah berjaga-jaga untuk mengelak dan menghapuskan risiko berlakunya sebarang kemalangan, kecederaan dan bahaya kesihatan, Jawatankuasa Keselamatan dan Kesihatan telah dibentuk di dalam setiap unit operasi untuk sentiasa memantau dan mengawasi aktiviti anggota pekerja. Mesyuarat Jawatankuasa Keselamatan dan Kesihatan diadakan di setiap unit operasi sekurang-kurangnya tiga bulan sekali dan bertindak sebagai cara untuk mengurang dan menyelesaikan sebarang isu berkaitan hal-hal keselamatan dan kesihatan pekerja. Kumpulan turut menjalankan tanggungjawabnya dalam memastikan supaya setiap syarikat subsidiari dan unit bisnesnya mematuhi semua peraturan berkaitan keselamatan dalam operasi harian mereka. Untuk mempertingkatkan lagi pengetahuan dan kesedaran para pekerja berhubung keselamatan dan kesihatan pekerjaan, Kumpulan telah menyediakan satu siri program berkala dan kursus-kursus latihan bagi pekerja, seperti latihan kebakaran dan memadam api, penilaian risiko kesihatan bahan kimia, sesi taklimat bagi para pemandu forklift serta kursus bantuan kecemasan asas. The Group also carried out its responsibility in ensuring that each of its subsidiary and business unit complies with all regulations pertaining to safety in their daily operations. To further enhance the workers knowledge and awareness on occupational safety and health, the Group provides an occasional series of programmes and training courses for the staff, such as fire drill and fire fighting training, chemical health risk assessment, briefing session for forklift drivers and basic first aid course. In ensuring that their daily operations are safe from any potential hazards and injuries, Pro Office Solutions Sdn Bhd has equipped its premises with relevant security features. As an added safety measure, each employee is provided with an access card to enter specialised rooms that are filled with machinery and equipment, besides installation of safety alarm. Bagi memastikan supaya operasi harian mereka selamat daripada kemungkinan bahaya dan kecederaan, Pro Office Solutions Sdn Bhd telah memperlengkapkan premisnya dengan ciri-ciri keselamatan yang diperlukan. Selain daripada pemasangan sistem penggera, sebagai satu langkah keselamatan tambahan, setiap pekerjanya diberi kad akses untuk memasuki bilik-bilik tertentu yang mempunyai mesin dan peralatan. Tepak Marketing Sdn Bhd menggunakan piawaian keselamatan antarabangsa yang ketat di seluruh proses pengilangannya. Ini termasuk pelaksanaan prosedur Program Pengurusan Kualiti Pembekal (SQMP) yang dikenakan oleh Unilever (Holdings) Berhad bagi vendor-vendor terpilih. Sebagai langkah untuk mengelakkan pencemaran terhadap produk pengeluarannya, aktiviti pemprosesan dan keluaran produknya diaudit dan dikaji secara berkala. Bagi proses pembungkusan teh, prosedur 92 Sindora Berhad (13418-K)

60 occupational safety and health compliance pematuhan terhadap keselamatan dan kesihatan pekerjaan Throughout all of its manufacturing processes, Tepak Marketing Sdn Bhd has employed stringent international safety standards. This includes the implementation of Supplier Quality Management Program (SQMP) procedures for critical preferred vendors imposed by Unilever (Holdings) Berhad. As a step to avoid contamination to the end-products, the processing line and end products are audited and reviewed periodically. For the production process of tea packaging, the standard operating procedures need to be adhered to by the workers in order to protect the workers from unwanted exposure such as tea dust. By nature of its operation, Sindora Timber Sdn Bhd is exposed to high risk in its working environment. However, Safety and Health programmes had been successfully implemented to counteract this situation. To raise the employees awareness on the effect of noise from the working environment, the company had conducted an annual audiometric test which was supervised by health professionals. The test is to determine whether the workers are being adequately protected against overexposure to loud noise. The company will rectify any abnormalities found in the baseline tests or audiograms. In addition to the steps taken, the company also performs regular safety inspections throughout the factory and surrounding area. In addition, the Group s Occupational Safety and Health awareness has been further instilled through the annual inspection by the Department of Safety and Health (DOSH). MM Vitaoils has taken the extra mile in providing the safety and health measures for its employees, by registering the company with the Selangor Occupational Safety and Health Department (OSHA) since At the same time, the company also registered some of its factory machinery with OSHA. Policies on safety and health had also been formulated at the workplace to reinforce the importance of employees safety and health. The company also ensures that all of its workers and employees adhere to the rules and regulations. MM Vitaoils had also set up Health and Safety Club in 2004, in compliance with OSHA Act The company also updates the staff on current safety information or news through s, information boards, and safety talks. The Group acknowledges that the responsibility for the safety and health of its employees are not only vested upon the employees themselves, but also requires full commitment and continuous support from all stakeholders of the Group, which also includes the management and staff, business partners such as contractors, customers, and other individuals who are involved directly or indirectly with the Group s activities. Besides providing the basic health requirements, employees within the Group that suffers serious injuries and in need of specialist medical treatment, are also equipped with 24-hour specialist health coverage under the Prisihatin Scheme. Thorough investigations and analysis are done for any accidents occurrence, to minimise the likelihood of recurrence by acknowledging any lessons learned from the incident. Proper tools and attire are being provided to the workers as preventive measure against any hazards at the workplace. At the plantations, in-house clinics were set up in Sindora Estate and Sungai Simpang Kiri Estate to cater to the health needs of the estate workers. Apart from all these efforts implemented by the Group, the employees are still fully responsible in adopting precautionary measures in preventing any work related accidents or mishaps. operasi piawaian perlu dipatuhi oleh para pekerja untuk melindungi mereka daripada pendedahan pencemaran yang tidak diingini, contohnya pendedahan kepada habuk teh. Operasi Sindora Timber Sdn Bhd (STSB) sentiasa terdedah kepada persekitaran kerja yang berisiko tinggi. Walau bagaimanapun, programprogram Keselamatan dan Kesihatan telah berjaya dilaksanakan untuk mencegah keadaan ini. Bagi meningkatkan kesedaran di kalangan anggota pekerjanya berhubung kesan bunyi bising di tempat kerja, STSB menjalankan ujian audiometrik tahunan yang diselia oleh para profesional kesihatan untuk menentukan sama ada para pekerjanya dilindungi dengan secukupnya daripada terdedah kepada pencemaran bunyi yang kuat. Langkah pembetulan akan diambil sekiranya terdapat sebarang penemuan luar biasa di dalam ujian yang dijalankan. STSB turut menjalankan pemeriksaan keselamatan secara kerap di seluruh kilang dan kawasan di sekelilingnya. Kesedaran berhubung Keselamatan dan Kesihatan Pekerjaan dalam Kumpulan juga telah diterapkan dengan lebih mendalam melalui pemeriksaan tahunan oleh Jabatan Keselamatan dan Kesihatan (DOSH). MM Vitaoils juga telah melaksanakan usaha tambahan dalam menyediakan langkah-langkah keselamatan dan kesihatan bagi anggota pekerjanya melalui pendaftaran syarikat tersebut dengan Jabatan Keselamatan dan Kesihatan Pekerjaan Selangor (OSHA) sejak tahun Pada masa yang sama, syarikat itu juga telah mendaftarkan beberapa mesin kilangnya dengan OSHA. Dasar berhubung keselamatan dan kesihatan juga telah dirumuskan di tempat kerja untuk memantapkan kepentingan keselamatan dan kesihatan pekerja. MM Vitaoils turut memastikan supaya semua pekerjanya mematuhi undang-undang dan peraturan yang berkaitan. MM Vitaoils juga telah menubuhkan Kelab Kesihatan dan Keselamatan pada tahun 2004 sebagai mematuhi Akta OSHA Ia turut memaklumkan sebarang maklumat atau berita berkaitan keselamatan melalui e-mel, papan maklumat dan ceramah keselamatan. Kumpulan mengakui bahawa tanggungjawab terhadap keselamatan dan kesihatan pekerjanya bukan hanya terletak kepada pekerja itu sendiri, malah turut memerlukan komitmen penuh dan sokongan berterusan daripada semua pihak yang berkepentingan termasuk pihak pengurusan dan pekerja dan rakan kongsi perniagaan seperti kontraktor, pelanggan dan individu-individu lain yang terlibat secara langsung atau tidak langsung dengan aktiviti Kumpulan. Selain daripada menyediakan keperluan kesihatan asas, anggota pekerja Kumpulan yang mengalami kecederaan serius dan memerlukan rawatan perubatan pakar boleh mendapatkan rawatan tersebut sekiranya anggota pekerja terbabit mencarum di bawah Skim Prisihatin Kumpulan Johor Corporation. Penyiasatan dan analisa yang teliti dilaksanakan terhadap sebarang kemalangan, untuk meminimumkan kemungkinan kejadian yang sama berulang dengan mengambil pengajaran daripada kejadian berkenaan. Peralatan dan pakaian yang sesuai disediakan kepada pekerja sebagai langkah pencegahan terhadap sebarang perkara yang membahayakan di tempat kerja. Klinik-klinik dalaman dibina di Ladang Sindora dan Ladang Sungai Simpang Kiri untuk memenuhi keperluan kesihatan para pekerja ladang. Selain daripada usaha-usaha yang dilaksanakan oleh Kumpulan, anggota pekerja adalah bertanggungjawab sepenuhnya dalam mengamalkan langkah berjaga-jaga bagi mencegah sebarang kemalangan atau perkara yang tidak diingini berlaku di tempat kerja. w w w. s i n d o r a. c o m. m y 93

61 Calendar of Significant Events Kalendar Peristiwa Penting January/Januari 3 January/Januari Launching of 10 municipal car parks managed by Metro Parking (B) Sdn Bhd, a subsidiary of Metro Parking (M) Sdn Bhd. Pelancaran 10 buah tempat letak kereta majlis perbandaran yang diuruskan oleh Metro Parking (B) Sdn Bhd, sebuah syarikat subsidiari Metro Parking (M) Sdn Bhd. 28 January/Januari Sindora participated in a trade mission to Jakarta, organised by the Corporate Bureau of Malaysian Islamic Chamber of Commerce (MICC). Sindora mengambil bahagian dalam misi dagang di Jakarta, anjuran Biro Korporat Dewan Perdagangan Islam Malaysia (DPIM). 30 January/Januari Sindora Berhad, as a member of MICC, participated in business networking programmes in tandem with the visit of Saudi Chambers of Commerce and Industry members to Malaysia. Attended by guests of honour, Malaysian Prime Minister, YAB Dato Seri Abdullah Hj Ahmad Badawi and King of Saudi Arabia, King Abdullah Bin Abdul Aziz Al Saud. Sebagai ahli DPIM, Sindora Berhad telah mengambil bahagian dalam program jaringan bisnes bersempena dengan misi dagangan ahli Dewan Perniagaan dan Industri Saudi ke Malaysia sebagai tuan rumah yang telah diketuai oleh tetamu kehormat iaitu Perdana Menteri Malaysia, YAB Dato Seri Abdullah Hj Ahmad Badawi dan Duli Yang Maha Mulia Raja Arab Saudi, Raja Abdullah Bin Abdul Aziz Al Saud. 30 January/Januari 14 February/Februari February/Februari 14 February/Februari Sindora Berhad held an Enterprise-Wide Risk Management program at Sindora Corporate Office. Sindora Berhad telah mengadakan program Enterprise-Wide Risk Management di Pejabat Korporat Sindora February/ Februari Sindora Berhad participated in the annual International Kite Festival in Pasir Gudang, Johor. Sindora Berhad mengambil bahagian di dalam Festival Layang-layang Antarabangsa tahunan di Pasir Gudang, Johor. 27 February/Februari Metro Parking Management (Philippines) Inc., a subsidiary of Metro Parking (M) Sdn Bhd, was certified with ISO 9001:2000 by TUV Philippines Inc. Metro Parking Management (Philippines) Inc., sebuah syarikat subsidiari Metro Parking (M) Sdn Bhd, telah diberi pengiktirafan ISO 9001:2000 oleh TUV Philippines Inc February/Februari 94 Sindora Berhad (13418-K)

62 calendar of significant events kalendar peristiwa penting March/mac 6 March/Mac 1 March/MAC Metro Parking (M) Sdn Bhd officially acquired 70% equity in Smart Parking Management Systems Sdn Bhd. Metro Parking (M) Sdn Bhd mengambilalih 70% ekuiti di dalam Smart Parking Management Systems Sdn Bhd. 6 March/MAC MM Vitaoils Sdn Bhd was honoured with a Golden Award for Food & Beverages by Trade Leader s Club in Barcelona, Spain. MM Vitaoils Sdn Bhd telah dianugerahkan dengan Golden Award for Food & Beverages oleh Trade Leader s Club di Barcelona, Sepanyol. 10 March/MAC Sindora Berhad and JIMB co-organised the Annual Employees Meeting (PEDOMAN Meeting) with the theme of Integration and the Power of Networking at Puteri Pacific Hotel, Johor Bahru. Sindora Berhad dan JIMB menganjurkan secara bersama Mesyuarat Tahunan Anggota Pekerja (Mesyuarat PEDOMAN) dengan tema Integration and the Power of Networking di Hotel Puteri Pacific, Johor Bahru. 1 March/Mac 10 March/Mac April/April 6 April/April Metro Parking Management (Philippines) Inc. was awarded with Most Outstanding Managed Car Park Award in National Category by the Philippines Star Brand. It was also awarded with The Most Outstanding Innovative Car Park by the Asian Star Brand Award. Metro Parking Management (Philippines) Inc. dianugerahkan dengan Most Outstanding Managed Car Park Award in National Category oleh Philippines Star Brand. Ia turut dianugerahkan dengan The Most Outstanding Innovative Car Park oleh Asian Star Brand Award. 10 April/April Tepak Marketing Sdn Bhd participated and sponsored Zippie drinks for Maulidur Rasul celebration at Masjid Jamek Pasir Gudang, Johor. Tepak Marketing Sdn Bhd mengambil bahagian dan menaja minuman Zippie bagi sambutan Maulidur Rasul di Masjid Jamek Pasir Gudang, Johor. 22 April/April Sindora Sports and Recreational Club organised Majlis Maulidur Rasul at Sindora Timber Complex, Bandar Tenggara, Johor. Kelab Sukan dan Rekreasi Sindora menganjurkan Majlis Maulidur Rasul di Kompleks Perkayuan Sindora, Bandar Tenggara, Johor. 6 April/April 22 April/April May/Mei May/Mei Tepak Marketing Sdn Bhd held a Zippie promotion at 3rd Malaysia International Halal Showcase (MIHAS) 2006 at The Mines International Exhibition and Convention Centre, Kuala Lumpur. Tepak Marketing Sdn Bhd mengadakan promosi Zippie semasa Pameran Halal Antarabangsa Malaysia (MIHAS) 2006 kali ke-tiga bertempat di Pusat Pameran dan Konvensyen Antarabangsa The Mines, Kuala Lumpur. w w w. s i n d o r a. c o m. m y 95

63 June/Jun July/Julai 1 june/jun Safety, Health and Environment (SHE) Audit was conducted at Tepak Marketing Sdn Bhd by Unilever (M) Holdings Bhd. Audit Keselamatan, Kesihatan dan Alam Sekitar (SHE) telah dijalankan di Tepak Marketing Sdn Bhd oleh Unilever (M) Holdings Bhd. 20 june/jun 33rd Annual General Meeting of Sindora Berhad was held at Puteri Pacific Hotel, Johor Bahru. Mesyuarat Agung Tahunan Ke-33 Sindora Berhad telah diadakan di Hotel Puteri Pacific, Johor Bahru. 6 7 July/Julai Sindora Berhad took part in a Seminar on 9th Malaysia Plan: Empowering GLCs Up The Economic Value Chain at Putra World Trade Centre, Kuala Lumpur, which was jointly organised by Corporate Bureau of MICC and Gemaputera, and supported by the Ministry of Entrepreneur & Cooperative Development (MECD). Sindora Berhad mengambil bahagian di dalam Seminar Jihad Ekonomi bertajuk Rancangan Malaysia Ke-9: Memperkasakan GLC ke arah Membina Rantaian Nilai Ekonomi di Pusat Dagangan Dunia Putra, Kuala Lumpur yang dianjurkan secara bersama oleh Biro Korporat DPIM dan Gemaputera, serta disokong oleh Kementerian Pembangunan Usahawan & Koperasi (MECD). 12 July/Julai Sindora Berhad s representatives extended contribution as part of its charity drive under Tijarah Ramadhan programme to raise fund for the underprivileged as the Company is one of the sponsors. Wakil-wakil Sindora Berhad menyampaikan sumbangan sebagai sebahagian daripada usaha kebajikannya di bawah program Tijarah Ramadhan untuk mengumpul dana bagi mereka yang kurang bernasib baik di mana Syarikat adalah salah satu daripada penajanya. 20 June/Jun 18 July/Julai EPASA Shipping Agency Sdn Bhd increased its paid-up capital from RM0.15 million to RM0.50 million. EPASA Shipping Agency Sdn Bhd telah meningkatkan modal berbayarnya daripada RM0.15 juta kepada RM0.50 juta. 28 July/Julai Metro Parking (M) Sdn Bhd conducted its 1st Executive Appreciation Programme held at Pangkor Island Beach Resort, with participations by representatives from all of Metro s branches and subsidiaries in Malaysia and overseas. Metro Parking (M) Sdn Bhd menjalankan Program Penghargaan Eksekutif yang pertama di Pangkor Island Beach Resort, dengan penyertaan daripada wakil-wakil semua cawangan Metro dan syarikat-syarikat subsidiari di Malaysia dan luar negara. 28 July/Julai Sindora Berhad participated in a fund raising programme for Klinik Waqaf An-Nur and Hospital Waqaf. Sindora Berhad telah mengambil bahagian di dalam program mengumpul dana bagi Klinik Waqaf An-Nur dan Hospital Waqaf. 12 July/Julai 28 July/Julai 5 6 august/ogos August/Ogos Sindora Sports and Recreation Club, emerged as champion in the Creative Raft Competition, organised by Persatuan Pelayaran Negeri Johor at Tanjung Langsat Port, Johor. Kelab Sukan dan Rekreasi Sindora telah muncul sebagai johan dalam Pertandingan Rakit Kreatif yang dianjurkan oleh Persatuan Pelayaran Negeri Johor di Pelabuhan Tanjung Langsat, Johor. 96 Sindora Berhad (13418-K)

64 calendar of significant events kalendar peristiwa penting August/Ogos 11 august/ogos Sindora Berhad entered into an agreement to acquire 51% equity in E.A. Technique (M) Sdn Bhd involving the purchase of 6,901,779 units of shares worth RM38.25 million. Sindora Berhad telah memeterai satu perjanjian untuk mengambilalih 51% kepentingan ekuiti di dalam E.A. Technique (M) Sdn Bhd yang melibatkan pembelian 6,901,779 unit saham bernilai RM38.25 juta. 15 August/Ogos Sindora Berhad entered into a 15-year concession agreement with Johor Corporation and Metro Parking (M) Sdn Bhd to manage, operate and maintain a multi-storey car park at Persada Johor International Convention Centre, Johor Bahru. Sindora Berhad memeterai perjanjian konsesi 15 tahun dengan Johor Corporation dan Metro Parking (M) Sdn Bhd untuk mengurus, mengendali dan menyelenggara sebuah tempat letak kereta bertingkat di Pusat Konvensyen Antarabangsa Persada Johor, Johor Bahru august/ogos Sindora Berhad participated in the 6th Annual Conference of JCorp Intrapreneur (M) Bhd (JIMB) at Nexus Karambunai Resort, Kota Kinabalu, Sabah. Sindora Berhad mengambil bahagian dalam Persidangan Tahunan Ke-6 bagi JCorp Intrapreneur (M) Bhd (JIMB) di Nexus Karambunai Resort, Kota Kinabalu, Sabah. 11 August/Ogos August/Ogos 31 August/Ogos Sindora Sports and Recreational Club organised a Family Motivation Camp at Starhill Golf Resort, attended by 200 staffs and their families. Johor Bahru Motivational speakers from Yayasan Pembangunan Keluarga Darul Takzim was invited to the program. Kelab Sukan dan Rekreasi Sindora telah menganjurkan Kem Motivasi Keluarga di Starhill Golf Resort, Johor Bahru yang telah dihadiri oleh 200 orang anggota pekerja serta keluarga mereka. Penceramah motivasi daripada Yayasan Pembangunan Keluarga Darul Takzim telah dijemput menyertai program tersebut. 31 August/Ogos September/September 1 4 September/September 29 September/September 1 4 September/ September Under the Tunas Bistari program, Sindora Berhad provided entrepreneurial coaching for SMK Seri Pinang, Bandar Tenggara, in the Medaniaga Bistari 2006, held at Plaza Kotaraya, Johor Bahru. Di bawah program Tunas Bistari, Sindora Berhad telah menyediakan latihan keusahawanan bagi SMK Seri Pinang, Bandar Tenggara, dalam Medianiaga Bistari 2006 yang diadakan di Plaza KOTARAYA, Johor Bahru. 26 September/September Sindora Berhad attended the launching ceremony of Tijarah Ramadhan programme at Putrajaya International Convention Centre, Kuala Lumpur. Sindora Berhad menghadiri majlis pelancaran program Tijarah Ramadhan di Pusat Konvensyen Antarabangsa Putrajaya, Kuala Lumpur. 29 September/September Extraordinary General Meeting of Sindora Berhad held at Puteri Pacific Hotel, Johor Bahru for the proposed acquisition of 51% equity of E.A. Technique (M) Sdn Bhd and 15-year Parking Concession at Persada Johor International Convention Centre. Mesyuarat Agung Luar Biasa Sindora Berhad telah diadakan di Hotel Puteri Pacific, Johor Bahru bagi cadangan pengambilalihan 51% kepentingan ekuiti dalam E.A. Technique (M) Sdn Bhd dan Konsesi Tempat Letak Kereta selama 15 tahun di Pusat Konvensyen Antarabangsa Persada Johor. w w w. s i n d o r a. c o m. m y 97

65 November/November 9 november/november Metro Parking (S) Pte Ltd received 2 Silver Excellence Awards, organised by SPRING Singapore, in an event that was held at Kallang Stadium, Singapore. Metro Parking (S) Pte Ltd telah menerima 2 Anugerah Kecemerlangan Perak, anjuran SPRING Singapura dalam satu majlis yang diadakan di Stadium Kallang, Singapura. 11 november/november Hari Raya Gathering at Sindora Berhad s Corporate Office in Johor Bahru. Perhimpunan Hari Raya di Pejabat Korporat Sindora Berhad di Johor Bahru. 15 november/november Supplier Quality Management Program (SQMP) Audit by Unilever (M) Holding Bhd at Tepak Marketing Sdn Bhd. Audit Program Pengurusan Kualiti Pembekal (SQMP) dilaksanakan oleh Unilever (M) Holding Bhd di Tepak Marketing Sdn Bhd November/November 9 November/November 11 November/November november/november GranuLab (M) Sdn Bhd participated in the National Healthcare Conference 2006, organised by KPJ Healthcare Berhad, which was held at Persada Johor International Convention Centre, Johor Bahru, and was officiated by YAM Raja Zarith Sofiah Binti Almarhum Sultan Idris. GranuLab (M) Sdn Bhd mengambil bahagian di dalam Persidangan Prisihatin Kesihatan Kebangsaan 2006, anjuran KPJ Healthcare Berhad, yang telah diadakan di Pusat Konvensyen Antarabangsa Persada Johor, Johor Bahru, dan telah dirasmikan oleh YAM Raja Zarith Sofiah Binti Almarhum Sultan Idris. 25 november/november Signing Ceremony between Sindora Berhad and GranuLab (M) Sdn Bhd, held at Persada Johor International Convention Centre, Johor Bahru. Majlis Menandatangani Perjanjian antara Sindora Berhad dengan GranuLab (M) Sdn Bhd di Pusat Konvensyen Antarabangsa Persada Johor, Johor Bahru. 25 November/November 27 november/november As a testimony to its quality drive, Sindora Berhad and JIMB has jointly organised Quality Day at KOMTAR, Johor Bahru. Sebagai bukti komitmen Sindora Berhad dalam usaha kualitinya, Syarikat dan JIMB telah menganjurkan secara bersama Hari Kualiti di KOMTAR, Johor Bahru november/november ISO Audit by SIRIM QAS International at Tepak Marketing Sdn Bhd. Audit ISO oleh SIRIM QAS International di Tepak Marketing Sdn Bhd. 98 Sindora Berhad (13418-K)

66 calendar of significant events kalendar peristiwa penting December/Disember 1 december/disember Metro Parking (M) Sdn Bhd started its operations at Queensbay Mall, Penang. Metro Parking (M) Sdn Bhd memulakan operasinya di Queensbay Mall, Pulau Pinang. 4 december/disember MM Vitaoils Sdn Bhd was awarded with the International Quality Crown Award for its Outstanding Commitment to Quality and Excellence in the realm of Customer Satisfaction, Leadership, Innovation and Efficiency, as established in the QC100 TQM model, by the Business Initiative Directions (BID) in London. MM Vitaoils Sdn Bhd dianugerah dengan International Quality Crown Award bagi Komitmen Cemerlang terhadap Kualiti dan Kecemerlangan dari segi Kepuasan Pelanggan, Kepimpinan, Inovasi dan Kecekapan, seperti yang dinyatakan di dalam model QC100 TQM, oleh Business Initiative Directions (BID) di London. 7 december/disember MM Vitaoils Sdn Bhd was selected as one of Finalist of the National Award for Management Accounting (NafMA) 2006 by the Malaysian Institute of Accountants (MIA) and the Chartered Institute of Management Accountants (CIMA) Malaysian Division in Kuala Lumpur. MM Vitaoils Sdn Bhd dipilih sebagai salah satu peserta akhir dalam Anugerah Kebangsaan bagi Akaun Pengurusan (NafMA) 2006 oleh Institut Akauntan Malaysia (MIA) dan Chartered Institute of Management Accountants (CIMA) Bahagian Malaysia di Kuala Lumpur. 4 December/Disember 7 December/Disember december/disember Sindora Sports and Recreational Club conducted a Motivasi Kecemerlangan Camp at Sindora Timber Complex, attended by 25 children of the employees of Sindora Berhad and Sindora Timber Sdn Bhd. The camp was conducted by Putera Nusantara with the cooperation of Universiti Malaya undergraduates. Kelab Sukan dan Rekreasi Sindora menjalankan Kem Motivasi Kecemerlangan di Kompleks Perkayuan Sindora yang telah dihadiri oleh 25 orang anak-anak kakitangan Sindora Berhad dan Sindora Timber Sdn Bhd. Kem tersebut telah dikendalikan oleh Putera Nusantara dengan kerjasama para pelajar ijazah pertama Universiti Malaya december/disember ISO Audit by SIRIM QAS International at Sindora Berhad for certification on Provision of Investment and Monitoring of Business and Subsidiaries. Audit ISO oleh SIRIM QAS Inetrnational di Sindora Berhad untuk pensijilan berhubung Peruntukan Pelaburan dan Pemantauan Bisnes dan Syarikat Subsidiari december/disember Hari Mekar Johor Corporation organised by Damansara Assets Sdn Bhd, in which teams from Sindora-JIMB Group won in the Quality Poster category, awarded Gold Award as first runner up in Cross Functional category, and as second runner up in Cempaka Suggestion Scheme category. Hari Mekar Johor Corporation yang dianjurkan oleh Damansara Assets Sdn Bhd, di mana kumpulan daripada Sindora-JIMB telah memenangi kategori Poster Kualiti dan memperolehi Anugerah Emas sebagai pemenang tempat kedua dalam kategori Cross Functional dan tempat ketiga dalam kategori Skim Cadangan Cempaka. 26 december/disember 51% equity interest of E.A. Technique (M) Sdn Bhd was officially acquired by Sindora Berhad. Sindora Berhad telah secara rasmi mengambilalih 51% kepentingan ekuiti dalam E.A. Technique (M) Sdn Bhd. 26 December/Disember December/Disember w w w. s i n d o r a. c o m. m y 99

67 100 Sindora Berhad (13418-K)

68 financial statements 102 Directors Report 106 Statement by Directors 106 Statutory Declaration 107 Report of the Auditors 108 Balance Sheets 109 Income Statements 110 Consolidated Statement of Changes in Equity 111 Statement of Changes in Equity 112 Cash Flow Statements 114 Notes to the Financial Statements w w w. s i n d o r a. c o m. m y 101

69 directors report for the year ended 31 december 2006 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 PRINCIPAL ACTIVITIES The principal activities of the Company consist of investment holding and operations of oil palm plantations, palm oil milling and rubber estate. The principal activities of its subsidiaries are disclosed in Note 8 to the financial statements. There has been no significant change in the nature of these activities during the financial year. Results Group RM 000 Company RM 000 Profit/(Loss) for the year 10,758 (11,179) Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements. Dividends Since the end of the previous financial year, the Company paid: i) an interim dividend of 8.8% less 28% tax per ordinary shares, totalling RM6,060,000 in respect of the year ended 31 December 2005, by way of distribution of one existing ordinary share of RM1 each held by the Company pursuant to its treasury shares for every twenty existing ordinary shares held by shareholders, on 10 February 2006; ii) iii) a final dividend of 2.6% less 28% tax per ordinary share totalling RM1,773,000 in respect of the year ended 31 December 2005 on 28 July 2006; and an interim dividend of 5% less 28% tax per ordinary share totalling RM3,399,000 in respect of the year ended 31 December 2006 on 23 February Directors of the Company Directors who served since the date of the last report are: Tan Sri Dato Muhammad Ali Hashim Tan Sri Datuk (Dr) Arshad Ayub Rozan bin Mohd Sa at Datuk Johan bin Jaaffar Hj. Esa bin Mamek Kua Hwee Sim Halmi bin Jasmin 102 Sindora Berhad (13418-K)

70 directors report for the year ended 31 december 2006 Directors interests The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations of those who were Directors at year end as recorded in the Register of Directors Shareholdings are as follows: Number of ordinary shares of RM1.00 each At At 1 January 31 December Names of Directors Interest 2006 Bought Sold 2006 Company Tan Sri Dato Muhammad Ali Hashim Direct 69,300 3,465 72,765 Tan Sri Datuk (Dr) Arshad Ayub Direct 232, , ,040 Deemed 703, , ,350 Rozan bin Mohd Sa at Direct 2, ,045 Subsidiary Metro Parking (M) Sdn. Bhd. Halmi bin Jasmin Direct 100, ,000 Related Companies KPJ Healthcare Berhad Tan Sri Dato Muhammad Ali Hashim Direct 81,100 81,100 Deemed 12,000 12,000 Tan Sri Datuk (Dr) Arshad Ayub Direct 386, ,000 Deemed 733, ,000 Rozan bin Mohd Sa at Direct 3,300 3,300 Johor Land Berhad Tan Sri Dato Muhammad Ali Hashim Direct 46,000 54, ,360 Tan Sri Datuk (Dr) Arshad Ayub Direct 49, , ,980 Deemed 273, , ,690 Kua Hwee Sim Direct 9,000 9,000 Rozan bin Mohd Sa at Direct 4, ,950 Hj. Esa bin Mamek Direct Number of ordinary shares of RM0.50 each At At 1 January 31 December Names of Directors Interest 2006 Bought Sold 2006 Related Companies Kulim (Malaysia) Berhad Tan Sri Dato Muhammad Ali Hashim Direct 284, ,000 Deemed 16,400 6,000 22,400 Tan Sri Datuk (Dr) Arshad Ayub Direct 882, ,950 Deemed 1,383,200 1,383,200 Rozan bin Mohd Sa at Direct 1,800 1,800 Hj. Esa bin Mamek Direct 1,400 1,400 The other Director holding office at 31 December 2006 does not have any interest in the ordinary shares of the Company and of its related corporations during the year. w w w. s i n d o r a. c o m. m y 103

71 directors report for the year ended 31 december 2006 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. 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 or debentures of the Company or any other body corporate. Issue of shares There were no changes in the authorised, 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 financial year. Other statutory information Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision has been 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 the amount written off for bad debts, or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent; or ii) iii) iv) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or 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 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 liability 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, except for the effects arising from the change in accounting policies as disclosed in the financial statements, the results of the operations of the Group and of the Company for the year ended 31 December 2006 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. 104 Sindora Berhad (13418-K)

72 directors report for the year ended 31 december 2006 Significant events The Company i) On 11 August 2006, the Company had entered into a conditional Sale and Purchase Agreement with Abdul Hak bin Mohd Amin, Hamidah bt Omar and Zulkifli bin Mohd Amin to acquire 6,901,779 ordinary shares of RM1.00 each in E.A Technique (M) Sdn. Bhd. representing 51% equity interest in E.A Technique (M) Sdn. Bhd. for a purchase consideration of RM38,250,000 to be satisfied by cash. The acquisition was completed on 26 December 2006; ii) iii) iv) On 15 August 2006, the Company had entered into a 15-Year Concession Agreement with Johor Corporation and Metro Parking (M) Sdn. Bhd. to manage, operate and maintain a multi storey car park together with other parking facilities at Persada Johor International Convention Centre in Johor Bahru for a concession consideration of RM15 million to be settled by way of cash; On 28 August 2006, the Company had entered into a first supplementary concession agreement with Johor Corporation, Metro Parking (M) Sdn. Bhd. and Puteri Hotels Sdn. Bhd. in respect of the management, operation and maintenance of the four (4) parking facilities at Persada Johor International Convention Centre in Johor Bahru; On 25 November 2006, the Company had entered into a conditional Sale and Purchase Agreement with Romli bin Ishak, Yurlida binti Mohd Zain and Muhammad Nor Annuar bin Hashim to acquire 90,000 ordinary shares of RM1.00 each in GranuLab (M) Sdn. Bhd. representing 90% equity interest in GranuLab (M) Sdn. Bhd. for a purchase consideration of RM270,000 to be satisfied by cash. The proposal is expected to be completed by the second quarter of 2007; and v) The Company proposed renounceable two-call rights issue of 105,600,000 new ordinary shares of RM1.00 each in Sindora ( Rights Shares ) at an indicative issue price of RM1.00 per Rights Share, on the basis of eleven (11) Rights Shares for every ten (10) existing ordinary shares of RM1.00 each in Sindora ( Sindora Shares ), together with one (1) free detachable warrant ( Warrant ) for every two (2) Rights Shares subscribed ( Proposed Rights Issue with Warrants ). The proposal is expected to be completed by the third quarter of Subsidiary, Metro Parking (M) Sdn. Bhd. i) On 28 March 2005, the Company approved the increase in the paid-up share capital of its subsidiary, PT. Metro Penata Sarana, from 50,000 ordinary shares of USD1 each to 200,000 ordinary shares of USD1 each by way of cash payment and capitalisation of advances. During the financial year, the Company acquired the additional 150,000 shares of USD1 each for a total consideration of USD150,000 (equivalent to RM567,957) via cash payment of USD81,748 (equivalent to RM309,529) and capitalisation of advances due from subsidiary of USD68,252 (equivalent to RM258,428); and ii) On 20 September 2005, the Company entered into a Sale and Purchase Agreement to acquire 70% equity interest in Smart Parking Management Systems Sdn. Bhd., a company incorporated in Malaysia, representing 70,000 ordinary shares of RM1 each for a total cash consideration of RM500,000. The acquisition was completed on 1 March The additional acquisition resulted in a goodwill of RM584,448. Subsequent events The Company On 22 March 2007, the Company entered into a conditional Share Purchase cum Subscription Agreement with Johari Bin Ma arof, Laili Binti Ismail and Hayati Binti Jalaludin for acquisition of 1,856,992 ordinary shares of RM1.00 each and subscription of 1,166,667 new ordinary shares of RM1.00 each in J.M. Permata Sdn. Bhd. for a total cash consideration of RM11,141,952 and RM7,000,002 respectively. Subsidiary, E.A. Technique (M) Sdn. Bhd. On 15 March 2007, the Company entered into a conditional Sale and Purchase Agreement with Mohd Zain Bin Abdullah to dispose 1,037,600 ordinary shares of RM1.00 each representing 40% equity interest in E.A. Bunkering Services Sdn. Bhd. for cash consideration at RM1.15 per share totalling RM1,193,240. Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: Tan Sri Dato Muhammad Ali Hashim Johor Bahru 4 April 2007 Rozan bin Mohd Sa at w w w. s i n d o r a. c o m. m y 105

73 statement by Directors pursuant to section 169(15) of the Companies Act, 1965 In the opinion of the Directors, the financial statements set out on pages 108 to 157, are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2006 and of the results of their operations and cash flows for the financial year ended on that date. Signed in accordance with a resolution of the Directors: Tan Sri Dato Muhammad Ali Hashim Rozan bin Mohd Sa at Johor Bahru 4 April 2007 Statutory Declaration pursuant to section 169(16) of the Companies Act, 1965 I, Rosnah binti Basok, the officer primarily responsible for the financial management of SINDORA BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 108 to 157 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, Subscribed and solemnly declared by the abovenamed in Johor Bahru in the state of Johor on 4 April Rosnah binti Basok Before me, 106 Sindora Berhad (13418-K)

74 report of the Auditors to members of Sindora Berhad (incorporated in Malaysia) We have audited the financial statements set out on pages 108 to 157. 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 to any other person for the content of this report. We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion: (a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of: i) the state of affairs of the Group and of the Company as at 31 December 2006 and of the results of their operations and cash flows for the financial year ended on that date; and ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and (b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act. The subsidiaries in respect of which we have not acted as auditors are identified in Note 8 to the financial statements and we have considered their financial statements and the auditors reports thereon. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under sub-section (3) of Section 174 of the Act. The previous years financial statements of the Group and of the Company were audited by another firm of accountants. kpmg Firm Number: AF 0758 Chartered Accountants Lee Soon Teck Partner Approval Number: 1587/06/08 (J) Johor Bahru, 4 April 2007 w w w. s i n d o r a. c o m. m y 107

75 balance sheets as at 31 December 2006 Assets Group Company Note RM 000 RM 000 RM 000 RM 000 Property, plant and equipment 3 146,493 49,489 19,126 32,865 Intangible assets 4 29,581 5,774 15,139 Biological assets 5 19,258 17,396 19,258 17,396 Prepaid lease payments 6 87,587 88,845 82,373 83,497 Investment properties 7 3,040 15,785 Investments in subsidiaries 8 56,822 20,057 Due from subsidiaries 14 1,002 20,985 Investments in associates 9 17,413 14,102 15,200 15,200 Other investments 10 5,850 1,287 5,850 1,287 Deferred tax assets , Total non-current assets 309, , , ,026 Prepaid lease payments 6 1,272 1,539 1,124 1,124 Inventories 12 13,251 10,781 1,530 1,114 Trade and other receivables 13 26,030 16,822 2,144 1,466 Due from related companies 14 8,095 15,174 6,457 10,738 Property classified as held for sale Tax recoverable 1, ,453 Cash and cash equivalents 16 29,904 16,001 13,093 6,027 Total current assets 79,923 61,222 24,929 21,922 Total assets 389, , , ,948 Equity Share capital 96,000 96,000 96,000 96,000 Reserves 69,047 58,043 62,438 71,623 Total equity attributable to shareholders of the Company 165, , , ,623 Minority interest 33,043 3,255 Total equity , , , ,623 Liabilities Loans and borrowings 18 98,324 8,349 47,821 1,574 Due to a subsidiary 14 1,364 1,392 Deferred tax liabilities 11 23,577 24,591 23,440 24,023 Total non-current liabilities 121,901 32,940 72,625 26,989 Trade and other payables 19 29,702 23,140 4,705 4,798 Loans and borrowings 18 28,701 16,721 11,420 8,268 Due to holding corporation 14 4, , Due to related companies 14 1,573 2, Due to Directors 36 Taxation 602 Dividend payable 4,173 6,388 3,399 6,060 Total current liabilities 69,351 48,877 24,421 19,336 Total liabilities 191,252 81,817 97,046 46,325 Total equity and liabilities 389, , , ,948 The accompanying notes form an integral part of the financial statements 108 Sindora Berhad (13418-K)

76 income statements for the year ended 31 December 2006 Group Company Note RM 000 RM 000 RM 000 RM 000 Revenue , ,304 74,029 77,683 Cost of sales (168,898) (172,026) (54,398) (56,830) Gross profit 36,738 36,278 19,631 20,853 Other income 3,490 3,681 2,228 1,443 Distribution expenses (2,721) (2,328) (984) (1,004) Administration expenses (15,662) (18,557) (4,904) (4,780) Other expenses (11,516) (8,225) (22,227) (3,011) Results from operating activities 10,329 10,849 (6,256) 13,501 Finance costs (2,579) (1,215) (1,525) (275) Operating profit/(loss) 21 7,750 9,634 (7,781) 13,226 Share of profit after tax and minority interest of equity accounted associates 6,737 4,331 Profit/(Loss) before tax 14,487 13,965 (7,781) 13,226 Tax expense 22 (2,601) (3,574) (3,398) (4,292) Profit/(Loss) for the year 11,886 10,391 (11,179) 8,934 Attributable to: Shareholders of the Company 10,758 10,007 (11,179) 8,934 Minority interest 1, Profit/(Loss) for the year 11,886 10,391 (11,179) 8,934 Basic earnings per ordinary share (sen) The accompanying notes form an integral part of the financial statements w w w. s i n d o r a. c o m. m y 109

77 consolidated statement of changes in equity for the year ended 31 December 2006 Attributable to shareholders of the Company Non-distributable distributable Exchange Share Share Treasury Revaluation fluctuation Retained Minority Total Note capital premium shares reserves reserves earnings Total interest equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Group At 1 January 2005 As previously reported 96,000 11,107 (2,596) 27,059 (33) 45, ,660 3, ,030 Effect of change in accounting policy 33 (19,459) (19,459) (19,459) At 1 January 2005, restated 96,000 11,107 (2,596) 27,059 (33) 25, ,201 3, ,571 Profit for the year 10,007 10, ,391 Treasury shares acquired (3,465) (3,465) (3,465) Net gain not recognised in the income statements: Exchange differences on translation of a foreign subsidiary Disposal of shares in subsidiary (275) (275) (499) (774) Dividends to shareholders 24 (9,438) (9,438) (9,438) At 31 December ,000 11,107 (6,061) 26,784 (20) 26, ,043 3, ,298 At 31 December 2005 As previously reported 96,000 11,107 (6,061) 26,784 (20) 44, ,536 3, ,791 Effect of change in accounting policy 33 (18,493) (18,493) (18,493) At 31 December 2005, restated but before opening balance adjustment 96,000 11,107 (6,061) 26,784 (20) 26, ,043 3, ,298 Effect of adopting FRS (1,352) 2, At 1 January 2006, restated 96,000 11,107 (6,061) 25,432 (20) 28, ,909 3, ,164 Profit for the year 10,758 10,758 1,128 11,886 Treasury shares acquired (1,579) (1,579) (1,579) Net gain not recognised in the income statements: Exchange differences on translation of a foreign subsidiary Acquisition of subsidiaries 29,079 29,079 Dividends to shareholders 24 6,060 (5,172) 888 (419) 469 At 31 December ,000 11,107 (1,580) 25, , ,047 33, ,090 The accompanying notes form an integral part of the financial statements 110 Sindora Berhad (13418-K)

78 statement of changes in equity for the year ended 31 December 2006 Company At 1 January 2005 Non-distributable distributable Share Share Revaluation Treasury Retained Total Note capital premium reserves shares earnings equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 As previously reported 96,000 11,107 28,447 (2,596) 59, ,814 Effect of change in accounting policy 33 (19,460) (19,460) Effect of adopting FRS (1,762) (1,762) At 1 January 2005, restated 96,000 11,107 26,685 (2,596) 40, ,592 Profit for the year 8,934 8,934 Treasury shares acquired (3,465) (3,465) Dividends to shareholders 24 (9,438) (9,438) At 31 December ,000 11,107 26,685 (6,061) 39, ,623 As previously reported 96,000 11,107 28,447 (6,061) 58, ,878 Effect of change in accounting policy 33 (18,493) (18,493) Effect of adopting FRS (1,762) (1,762) At 31 December 2005, restated 96,000 11,107 26,685 (6,061) 39, ,623 Effect of adopting FRS (5,591) 8,276 2,685 At 1 January 2006, restated 96,000 11,107 21,094 (6,061) 48, ,308 Loss for the year (11,179) (11,179) Treasury shares acquired (1,579) (1,579) Dividends to shareholders 24 6,060 (5,172) 888 At 31 December ,000 11,107 21,094 (1,580) 31, ,438 The accompanying notes form an integral part of the financial statements w w w. s i n d o r a. c o m. m y 111

79 cash flow statements for the year ended 31 December 2006 Cash Flows from Operating Activities Group Company RM 000 RM 000 RM 000 RM 000 Profit/(Loss) before tax 14,487 13,965 (7,781) 13,226 Adjustments for:- Amortisation on prepaid lease payments 1,281 1,272 1,124 1,124 Amortisation on intangible assets Depreciation of property, plant and equipment 8,583 8,863 2,917 3,515 Amortisation of biological asset 1,197 1,276 1,197 1,276 Diminution in investment 1,521 1,021 Allowance for diminution in other investments Dividend income from other investment (55) (55) Dividend income (7,146) (8,522) Finance costs 2,579 1,215 1, Loss/(Gain) on disposal of property, plant and equipment 56 (159) (24) Interest income (519) (245) (450) (51) Property, plant and equipment written off Gain on disposal of a subsidiary and investment (891) (900) Reversal of allowance for diminution in value of other investment (326) (326) Impairment loss on property, plant and equipment 85 Impairment on goodwill 76 Bad debts written off 11 Deposits forfeited 29 Share of results in associates (6,737) (4,331) Unrealised loss on foreign exchange 10 Operating profit/(loss) before changes in working capital 20,874 21,824 (7,307) 11,062 Change in inventories (1,822) (1,004) (416) (215) Change in trade and other receivables (5,182) 3,123 (678) (43) Change in trade and other payables 3, (93) 522 Change in amount due from/(to) subsidiaries 19,955 3,510 Change in amount due to holding corporation 4, , Change in amount due from/(to) related companies 6,396 (9,362) 4,516 (4,257) Change in amount due to Directors 36 Cash generated from operations 27,901 15,337 20,429 10,663 Dividend received 5,141 5,560 Interest paid (2,579) (1,215) (1,525) (275) Tax paid (2,793) (7,573) (1,360) (4,278) Net cash from operating activities 22,529 6,549 22,685 11,670 The accompanying notes form an integral part of the financial statements 112 Sindora Berhad (13418-K)

80 cash flow statements for the year ended 31 December 2006 Group Company Note RM 000 RM 000 RM 000 RM 000 Cash flows from investing activities Acquisition of property, plant and equipment 25 (4,696) (11,466) (1,284) (2,716) Acquisition of intangible assets (15,306) (15,306) Cash paid for acquisition of biological assets (3,059) (2,618) (3,059) (2,618) Acquisition of subsidiaries, net of cash acquired (33,540) (1,930) (38,286) (2,100) (Disposal)/Acquisition of other investment (4,237) 17 (4,237) 17 Acquisition of associates (9,500) (9,500) Acquisition of prepaid lease payments (24) (Increase)/Decrease in pledged deposits placed with licensed banks (2,254) 379 Proceeds from disposal of share in subsidiary Proceeds from disposal of subsidiaries, net of cash disposed 1,104 4,400 Proceeds from disposal of property, plant and equipment Interest received Dividend received from other investment Investments in associates 4,464 4,104 Investments in subsidiaries (76) Net cash used in investing activities (57,761) (19,075) (61,667) (12,365) Cash flows from financing activities Proceeds from term loan 57,912 5,244 46,247 2,042 (Repayment)/Proceeds of short term borrowings (7,719) 6,955 3,152 5,100 Proceeds from sale/(repurchase of) treasury shares 4,482 (3,465) 4,482 (3,465) Payment of finance lease liabilities (453) (1,922) (11) Dividends paid to shareholders of the Company (7,833) (6,768) (7,833) (6,768) Dividends paid to minority interest (419) (458) Net cash from/(used in) financing activities 45,970 (414) 46,048 (3,102) Net increase/(decrease) in cash and cash equivalents 10,738 (12,940) 7,066 (3,797) Effects of exchange rate changes (25) (18) Cash and cash equivalents at 1 January 11,067 24,025 5,980 9,777 Cash and cash equivalents at 31 December 21,780 11,067 13,046 5,980 Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts: Cash and bank balances 18,496 14,328 7,046 5,980 Deposits with licensed banks 8, ,000 Bank overdrafts (5,023) (4,087) 21,780 11,067 13,046 5,980 The accompanying notes form an integral part of the financial statements w w w. s i n d o r a. c o m. m y 113

81 notes to the financial statements 31 December 2006 Sindora Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of Bursa Malaysia Securities Berhad. The addresses of its registered office and principal place of business are as follows: Registered office 13th Floor, Menara Johor Corporation KOTARAYA Johor Bahru Johor Darul Takzim Principal place of business 9C, 9th Floor, Menara Ansar 65, Jalan Trus Johor Bahru Johor Darul Takzim The consolidated financial statements as at and for the year ended 31 December 2006 comprise the Company and its subsidiaries (together referred to as the Group) and the Group s interest in associates. The principal activities of the Company consist of investment holding and the operations of oil palm plantations, palm oil milling and rubber estate. The principal activities of its subsidiaries are disclosed in Note 8. The holding and ultimate holding corporation of the Company is Johor Corporation, a body corporate established under the Johor Corporation Enactment (No. 4 of 1968) (as amended by Enactment No. 5 of 1995). 1. Basis of preparation (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the Companies Act, The MASB has issued the following Financial Reporting Standards (FRSs) and Interpretations that are effective for annual periods beginning on or after 1 January The Group and the Company has chosen to early adopt FRS 117, Leases which is effective for annual periods beginning on or after 1 October The following new FRSs and Interpretations have not been applied in preparing these financial statements: Standard/Interpretation Effective Date FRS 124, Related Party Disclosures 1 October 2006 FRS 139, Financial Instruments: Recognition and Measurement To be announced Amendment to FRS , Employee Benefits Actuarial Gains and Losses, Group Plans and Disclosures 1 January 2007 FRS 6, Exploration for and Evaluation of Mineral Resources 1 January 2007 Amendment to FRS 121, The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operation 1 July 2007 IC Interpretation 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities 1 July 2007 IC Interpretation 2, Members Shares in Co-operative Entities and Similar Instruments 1 July 2007 IC Interpretation 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds 1 July Sindora Berhad (13418-K)

82 notes to the financial statements 31 December Basis of preparation (cont d) (a) Statement of compliance (cont d) Standard/Interpretation Effective Date IC Interpretation 6, Liabilities arising from Participating in a Specific Market-Waste Electrical and Electronic Equipment 1 July 2007 IC Interpretation 7, Applying the Restatement Approach under FRS Financial Reporting in Hyperinflationary Economies 1 July 2007 IC Interpretation 8, Scope of FRS 2 1 July 2007 The Group and the Company plan to apply FRS 124 and the Amendment to FRS initially for the annual period beginning 1 January 2007 and to apply the rest of the applicable FRSs except for FRS 139 which its effective date has yet to be announced for the annual period beginning 1 January The impact of applying FRS 124, FRS 139 and the Amendment to FRS on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed by virtue of the exemptions given in the respective standards. FRS 6, IC Interpretation 1, 2, 5, 6, 7 and 8 are not applicable to the Group and the Company. Hence, no further disclosure is warranted. The initial application of the other standards and interpretations are not expected to have any material impact on the financial statements of the Group and of the Company. The effects of adopting the new/revised FRSs in 2006 are set out in Note 33. The financial statements were approved by the Board of Directors on 4 April (b) (c) (d) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the notes to the financial statements. Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Company s functional currency. All financial information are presented in RM, has been rounded to the nearest thousand, unless otherwise stated. Use of estimates and judgements The preparation of financial statements requires management to make judgements estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes: Note 4 measurement of the recoverable amounts of cash-generating units Note 7 investment properties Note 11 recognition of unutilised tax losses and capital allowances Note 12 inventory write-down Note 26 business combinations w w w. s i n d o r a. c o m. m y 115

83 notes to the financial statements 31 December Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities, unless otherwise stated. Certain comparative amounts have been reclassified or re-presented to conform to the current year s presentation. (see Note 34) (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Company previously accounted for investment in certain subsidiaries under revaluation policy. During the year, the Company adopted new accounting policy to account for all investment in subsidiaries at cost. Investments in subsidiaries are stated in the Company s Balance Sheet at cost less impairment losses. (ii) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). The consolidated financial statements include the Group s share of the income and expenses of the equity accounted associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Investments in associates are stated in the Company s Balance Sheet at cost less impairment losses. (iii) Minority interest Minority interests at the balance sheet date, being the portion of the net identifiable assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet and statement of changes in equity within equity, separately from equity attributable to the equity shareholders of the Company. Minority interests in the results of the Group are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between minority interests and the equity shareholders of the Company. Where losses applicable to the minority exceed the minority s interest in the equity of a subsidiary, the excess, and any further losses applicable to the minority, are charged against the Group s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group s interest is allocated with all such profits until the minority s share of losses previously absorbed by the Group has been recovered. (iv) Changes in Group composition Where a subsidiary issues new equity shares to minority interest for cash consideration and the issue price has been established at fair value, the reduction in the Group s interests in the subsidiary is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in the income statement. When the Group purchases a subsidiary s equity shares from minority interest for cash consideration and the purchase price has been established at fair value, the accretion of the Group s interests in the subsidiary is accounted for as a purchase of equity interest for which the acquisition method of accounting is applied. 116 Sindora Berhad (13418-K)

84 notes to the financial statements 31 December Significant accounting policies (cont d) (a) Basis of consolidation (cont d) (iv) Changes in Group composition (cont d) The Group treats all other changes in group composition as equity transactions between the Group and its minority shareholders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves. (v) Transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statement. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the balance sheet date, except for goodwill and fair value adjustments arising from business combinations before 1 January 2006 which are reported using the exchange rates at the dates of the acquisitions. The income and expenses of foreign operations, are translated to RM at exchange rates at the dates of the transactions. On disposal, accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale. (c) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are stated at cost/valuation less accumulated depreciation and impairment losses. The Group has availed itself to the transitional provision when the MASB first adopted IAS 16, Property, Plant and Equipment in Freehold land and buildings were first revalued in 1995 and no later valuation has been recorded for these property, plant and equipment (except in the case of impairment adjustments based on a valuation). Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. w w w. s i n d o r a. c o m. m y 117

85 notes to the financial statements 31 December Significant accounting policies (cont d) (c) Property, plant and equipment (cont d) (ii) Depreciation (cont d) Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land is not depreciated. Property, plant and equipment under capital-in-progress are not depreciated until the assets are ready for their intended use. The estimated useful lives for the current and comparative periods are as follows: Buildings and structures Plant and machinery Motor vehicles, office equipment, furniture and fittings 5 50 years 5 20 years years (d) Biological assets Biological assets are stated at cost less accumulated depreciation and impairment losses. Biological assets comprise plantation development expenditure. New planting expenditure incurred on land clearing, upkeep of immature palms/trees and interest incurred during the immature period are capitalised under Plantation Development Expenditure. Upon maturity, all subsequent maintenance expenditure is charged to revenue. Oil palm is considered mature 4 years after the month of planting. Rubber tree is considered mature 7 years after the month of planting. In prior years, the Group stated its estate development expenditure in Malaysia at cost and applied the capital maintenance method in its treatment of Plantation Development Expenditure incurred. New planting expenditure incurred were capitalized and subsequent replanting expenditure was charged to income statement as incurred. With effect from 1 January 2006, the Group changed its accounting policy on Plantation Development Expenditure from capital maintenance method to amortisation method wherein planting expenditure are capitalised and amortised over its estimated economical life of the biological assets from the maturity date. This change in accounting policy was recognised retrospectively and comparative figures have been restated. Plantation Development Expenditure of oil palm and rubber estates will be amortised on a straight line basis over 20 and 18 years respectively being their current expected useful lives. Plantation Development Expenditure of timber will be charged to the Income Statement at the time of logging and sale. (e) Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Prepaid lease payments Leases, on land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided. The Company had previously classified a lease of land as finance lease and had recognised the amount of prepaid lease payments as property within its property, plant and equipment. On early adoption of FRS 117, Leases, the Group treats such a lease as an operating lease, with the unamortised carrying amount classified as prepaid lease payments in accordance with the transitional provisions in FRS A. The Company had previously revalued its leasehold land and has retained the unamortised revalued amount as the surrogate carrying amount of prepaid lease payments in accordance with the transitional provisions in FRS A. Such prepaid lease payments is amortised over the lease term. 118 Sindora Berhad (13418-K)

86 notes to the financial statements 31 December Significant accounting policies (cont d) (f) Intangible assets (i) Goodwill Goodwill arises on the acquisition of subsidiaries and associates. For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group s interest in the fair values of the net identifiable assets and liabilities. With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is allocated to cash-generating units and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence of impairment. Acquisition of minority interest Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange. (ii) (iii) (iv) Other intangible assets Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Subsequent expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill with indefinite useful lives are tested for impairment annually and whenever there is an indication that they may be impaired. Other intangible assets are amortised from the date that they are available for use. The estimated useful lives are as follows: Concession rights 15 years (g) Investments in debt and equity securities Investments in debt and equity securities are recognised initially at fair value plus attributable transaction costs. Subsequent to initial recognition: Investments in non-current equity securities other than investments in subsidiaries, associates, are stated at cost less allowance for diminution in value, Investments in non-current debt securities are stated at amortised cost using the effective interest method less allowance for diminution in value, All current investments are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investments. w w w. s i n d o r a. c o m. m y 119

87 notes to the financial statements 31 December Significant accounting policies (cont d) (g) Investments in debt and equity securities (cont d) Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities and noncurrent debt securities other than investment in subsidiaries, associates and jointly-controlled entities, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement. All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) the recognition of an asset on the day it is received by the entity, and b) the derecognition of an asset and recognition of any gain or loss on disposal on the date it is delivered. (h) (i) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Receivables Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established. Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts. Receivables are not held for the purpose of trading. (j) Investment properties Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. These include land held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. In the previous years, all investment properties were included in property, plant and equipment stated at cost. Following the adoption of FRS 140, Investment Property, all investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in the income statement. When an item of property, plant and equipment is transferred to investment properties following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in the income statements. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through the income statement. When an item of inventory or property development is transferred to investment properties following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to the transfer and its fair value is recognised in the income statement. When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair value at the date of reclassification becomes its cost for subsequent accounting. An external, independent valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group s investment property portfolio every year. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. 120 Sindora Berhad (13418-K)

88 notes to the financial statements 31 December Significant accounting policies (cont d) (j) Investment properties (cont d) In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows to arrive at the property valuation. Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the market s general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property. When rent reviews or lease renewals are pending with anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices have been served validly and within the appropriate time. (k) Non-current assets held for sale Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group s accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss. In the previous years, non-current assets held for sale (or disposal group) were not classified separately on the balance sheet and were measured in accordance with the respective accounting policy. Following the adoption of FRS 5, Non-current Assets Held for Sale and Discontinued Operations, non-current assets held for sale (or disposal group) are classified separately as current assets/liabilities. This change in accounting policy is applied prospectively from 1 January (l) (m) (n) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits. Payables Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity. Impairment of assets The carrying amounts of assets except for financial assets, inventories, deferred tax assets and non-current assets (or disposal groups) classified as held for sale are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, recoverable amount is estimated at each reporting date. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cashgenerating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis. w w w. s i n d o r a. c o m. m y 121

89 notes to the financial statements 31 December Significant accounting policies (cont d) (n) Impairment of assets (cont d) The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised, unless it reverses an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where an impairment loss on the same revalued asset was previously recognised in the income statement, a reversal of that impairment loss is also recognised in the income statement. (o) Share capital (i) Shares issue expenses Incremental costs directly attributable to issue of shares and share options classified as equity are recognised as a deduction from equity. (ii) Repurchase of share capital When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. (p) Tax expense Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences arising from: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax liability is recognised for all taxable temporary differences. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. (q) Revenue (i) Goods sold Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. 122 Sindora Berhad (13418-K)

90 notes to the financial statements 31 December Significant accounting policies (cont d) (q) Revenue (cont d) (ii) Services rendered Revenue from mailing and printing services are recognised as and when the services are rendered. Revenue from shipping and forwarding services are recognised as and when the services were performed. Revenue represents gross billings from rendering agency, logistic, forwarding and handling customs documentation net of discounts. (iii) (iv) Rental income Rental income from investment property is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Dividend income Dividend income is recognised when the right to receive payment is established. (r) (s) Loans and borrowings Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the loans and borrowings using the effective interest method. Interest income and borrowings costs Interest income is recognised as it accrues, using the effective interest method. All borrowing costs are recognised in the income statement using the effective interest method, in the period in which they are incurred except to the extent that they are capitalised as being directly attributable to the capital projects which necessarily takes a substantial period of time to be prepared for its intended use. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use are interrupted or completed. (t) Lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. (u) Employee benefits Short term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-incentives scheme if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The Group s contribution to the Employee s Provident Fund are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations. w w w. s i n d o r a. c o m. m y 123

91 notes to the financial statements 31 December Significant accounting policies (cont d) (v) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. (w) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. 3. Property, plant and equipment Motor vehicles, office equipment, Capital Land and Plant and furniture in buildings machinery and fittings progress Total RM 000 RM 000 RM 000 RM 000 RM 000 Group Cost/Valuation At 1 January ,323 35,709 50, ,848 Effect of adopting FRS 117 (103,438) (103,438) At 1 January 2005, restated 31,885 35,709 50, ,410 Acquisition of subsidiaries Disposal of subsidiary (1,443) (1,443) Additions 5,322 5,950 2, ,164 Disposals (5,699) (1,279) (6,978) Written off (24) (68) (92) Translation differences (70) (27) (97) At 31 December 2005, restated 37,207 35,866 50, ,148 Effect of adopting FRS 140 (2,000) (2,000) At 1 January 2006, restated 35,207 35,866 50, ,148 Additions 216 2,132 2, ,696 Acquisition through business combination ,649 1,635 19, ,729 Disposals (1,447) (214) (1,661) Written off (6) (2,911) (2,917) Transfers (612) Reclassification 29,327 (29,327) Exchange differences At 31 December , ,117 22,009 19, ,176 Representing items at: Cost 21, ,117 22,009 19, ,219 Directors valuation 13,957 13,957 35, ,117 22,009 19, , Sindora Berhad (13418-K)

92 notes to the financial statements 31 December Property, plant and equipment (cont d) Motor vehicles, office equipment, Capital Land and Plant and furniture in buildings machinery and fittings progress Total RM 000 RM 000 RM 000 RM 000 RM 000 Depreciation and impairment losses At 1 January 2005 Accumulated depreciation 25,006 23,088 36,738 84,832 Accumulated impairment losses ,006 23,142 36,738 84,886 Effect of adopting FRS 117 (11,914) (11,914) At 1 January 2005, restated 13,092 23,142 36,738 72,972 Acquisition of subsidiaries Disposal of subsidiaries (653) (653) Depreciation charge 1,454 5,752 1,657 8,863 Disposal (5,358) (1,194) (6,552) Written off (5) (5) Translation differences (121) (19) (140) At 31 December 2005 Accumulated depreciation 14,546 23,356 36,571 74,473 Accumulated impairment losses At 31 December 2005, restated 14,546 23,410 36,571 74,527 Effect of adopting FRS 140 (15) (15) At 1 January 2006, restated 14,531 23,410 36,571 74,512 Depreciation charge 1,457 5,438 1,688 8,583 Acquisition through business combination 11 13, ,580 Disposals (1,073) (214) (1,287) Written off (6) (2,911) (2,917) Reclassification 18,604 (18,604) Impairment loss Exchange difference At 31 December 2006 Accumulated depreciation 15,999 60,162 17,383 93,544 Accumulated impairment losses Carrying amounts 15,999 60,283 17,401 93,683 At 31 December , ,834 4,608 19, ,493 At 31 December ,529 12,456 13, ,489 w w w. s i n d o r a. c o m. m y 125

93 notes to the financial statements 31 December Property, plant and equipment (cont d) Motor vehicles, office equipment, Capital Land and Plant and furniture in buildings machinery and fittings progress Total RM 000 RM 000 RM 000 RM 000 RM 000 Company Cost/Valuation At 1 January ,195 22,452 11, ,446 Effect of adopting FRS 117 (96,173) (96,173) At 1 January 2005, restated 36,022 22,452 11, ,273 Additions 537 1,002 1, ,019 Disposals (333) (333) Written off (24) (68) (92) At 31 December 2005, restated 36,559 23,430 12, ,867 Effect of adopting FRS 140 (19,171) (19,171) At 1 January 2006, restated 17,388 23,430 12, ,696 Additions ,284 Written off (6) (2,901) (2,907) Transfer (612) At 31 December ,668 24,348 10,057 52,073 Representing items at: Cost 14,771 24,348 10,057 49,176 Directors valuation 2,897 2,897 17,668 24,348 10,057 52,073 Depreciation At 1 January ,723 13,383 10,094 47,200 Effect of adopting FRS 117 (10,428) (10,428) At 1 January 2005, restated 13,295 13,383 10,094 36,772 Depreciation charge 1,418 1, ,515 Disposals (280) (280) Written off (5) (5) At 31 December 2005, restated 14,713 14,874 10,415 40,002 Effect of adopting FRS 140 (7,065) (7,065) At 1 January 2006, restated 7,648 14,874 10,415 32,937 Depreciation charge 796 1, ,917 Written off (6) (2,901) (2,907) At 31 December ,444 16,375 8,128 32,947 Carrying amounts At 31 December ,224 7,973 1,929 19,126 At 31 December ,846 8,556 1, , Sindora Berhad (13418-K)

94 notes to the financial statements 31 December Property, plant and equipment (cont d) Group Company RM 000 RM 000 RM 000 RM 000 Carrying amounts of land and buildings At valuation Freehold land 1,349 1,349 Leasehold land 4,755 Buildings 6,688 7,740 1,622 7,740 At cost Buildings 13,105 13,440 7,602 8,002 19,793 22,529 9,224 21,846 Revaluation The Group s and the Company s freehold land and buildings including the buildings on leasehold land were revalued in 1995 by independent professional qualified valuers using an open market value method. Had the freehold land and buildings been carried under the cost model, their carrying amounts would have been included in the financial statements at the end of the year would be as follows: Group Company RM 000 RM 000 RM 000 RM 000 Freehold land Leasehold land 1,249 Buildings 5,263 5, ,978 5,263 6, ,380 Assets under hire purchase Included in property, plant and equipment of the Group are plant and machinery and motor vehicles acquired under lease agreements with a net book value of RM4,847,000 (2005: RM5,300,000) and RM427,000 (2005: RM355,000) respectively. Security At 31 December 2006, property, plant and equipment of the Group with a carrying amount of RM77,668,000 (2005: RM5,461,000) are pledged for borrowings (see Note 18). Others Included in property, plant and equipment of the Group and of the Company are fully depreciated assets which are still in use costing RM19,703,000 (2005: RM22,478,000) and RM15,133,000 (2005: RM17,897,018) respectively. w w w. s i n d o r a. c o m. m y 127

95 notes to the financial statements 31 December Intangible assets Concession Note Goodwill right Total RM 000 RM 000 RM 000 Group Cost At 1 January ,230 6,230 Acquisition during the year 1,491 1,491 Disposal of subsidiary (575) (575) At 31 December 2005/1 January ,146 7,146 Acquisition through business combination 26 8,744 8,744 Other acquisition during the year 15,306 15,306 At 31 December ,890 15,306 31,196 Amortisation and impairment loss At 1 January Amortisation charge At 31 December 2005/1 January ,372 1,372 Amortisation charge Impairment loss At 31 December 2006 Accumulated amortisation 1, ,539 Accumulated impairment loss Carrying amounts 1, ,615 At 31 December ,442 15,139 29,581 At 31 December ,774 5, Sindora Berhad (13418-K)

96 notes to the financial statements 31 December Intangible assets (cont d) Concession right RM 000 Company Cost Other acquisition during the year/at 31 December ,306 Amortisation Amortisation charge/at 31 December Carrying amounts At 31 December ,139 At 31 December 2005 Amortisation and impairment charge The amortisation and impairment loss are recognised in other expenses in the income statement. Impairment testing for cash-generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group s operating divisions which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. The aggregate carrying amount of goodwill allocated to respective subsidiaries represent individual business unit are as follows: RM 000 RM 000 Contract packing of tea Bulk mailing and printing services 1,931 1,931 Parking operator 2,347 1,839 Shipping and forwarding agent 1,333 1,333 Provision of sea transportation and related services 8,160 14,442 5,774 The recoverable amount for the above was based on its value in use and was determined by discounting the future cash flows generated from the continuing use of those units and was based on the following key assumptions: Cash flows were projected based on actual operating results and a 5 year forecast and projection Revenue was projected at anticipated annual revenue growth of approximately 5% 22% per annum Budget gross profit margins were projected at annual rate of 16% 39% per annum A pre-tax discount rate of 8% was applied in determining the recoverable amount of the unit. The discount rate was estimated based on the Group s existing rate of borrowing The values assigned to the key assumptions represent management s assessment of future trends in the industry. w w w. s i n d o r a. c o m. m y 129

97 notes to the financial statements 31 December Biological assets Plantation Plantation Plantation development development development expenditure expenditure expenditure oil plam rubber timber Total RM 000 RM 000 RM 000 RM 000 Group/Company Cost At 1 January ,488 4, ,088 Effect of change in accounting policy (813) (813) At 1 January 2005, restated 25,675 4, ,275 Effect of change in accounting policy 2,618 2,618 Written off (1) (1) At 31 December 2005/1 January ,293 4, ,892 Addition 3, ,059 At 31 December ,322 4, ,951 Amortisation At 1 January 2005 Effect of change in accounting policy 13, ,220 At 1 January 2005, restated 13, ,220 Effect of change in accounting policy 1, ,276 At 31 December 2005/1 January , ,496 Amortisation charge 1, ,197 At 31 December ,681 1,012 16,693 Carrying amounts At 31 December ,641 3, ,258 At 31 December ,662 3, ,396 Included in estate development expenditure of the Group and of the Company are depreciation capitalised during the financial year amounting to RM91,000 (2005: RM98,000). Included in plantation development expenditure of the Group/Company is the following expenses capitalised: Personnel expenses RM 000 RM 000 Contribution to Employee s Provident Fund Wages, salaries and others Sindora Berhad (13418-K)

98 notes to the financial statements 31 December Prepaid lease payments Leasehold land Leasehold land unexpired Unexpired period less period more than 50 years than 50 years Total RM 000 RM 000 RM 000 Group At cost At 1 January 2005 Effect of adopting FRS 117 6,111 97, ,438 At 1 January 2005/31 December 2005, restated 6,111 97, ,438 Additions Reclassified to property held for sale (267) (267) At 31 December ,111 97, ,194 Amortisation At 1 January 2005 Effect of adopting FRS 117 1,224 10,558 11,782 At 1 January 2005, restated 1,224 10,558 11,782 Amortisation charge 132 1,140 1,272 At 31 December 2005/1 January ,356 11,698 13,054 Amortisation charge 132 1,149 1,281 At 31 December ,488 12,847 14,335 Carrying amounts At 31 December ,623 84,236 88,859 At 31 December ,755 85,629 90,384 Represented by: RM 000 RM 000 Non-current 87,587 88,845 Current 1,272 1,539 88,859 90,384 w w w. s i n d o r a. c o m. m y 131

99 notes to the financial statements 31 December Prepaid lease payments (cont d) Leasehold land unexpired period more than 50 years RM 000 Company At cost At 1 January 2005 Effect of adopting FRS ,173 At 1 January 2005, restated 96,173 At 1 January 2006/31 December ,173 Amortisation At 1 January 2005 Effect of adopting FRS ,428 At 1 January 2005, restated 10,428 Amortisation charge 1,124 At 31 December 2005/1 January ,552 Amortisation charge 1,124 At 31 December ,676 Carrying amounts At 31 December ,497 At 31 December ,621 Represented by: RM 000 RM 000 Non-current 82,373 83,497 Current 1,124 1,124 83,497 84, Sindora Berhad (13418-K)

100 notes to the financial statements 31 December investment properties Group RM 000 RM 000 At 1 January Effect of adopting FRS 140 1,853 Change in fair value 1,187 At 31 December 3,040 Included in the above are: Freehold land 2,360 Buildings 680 At 31 December 3,040 Company RM 000 RM 000 At 1 January Effect of adopting FRS ,106 Change in fair value 3,679 At 31 December 15,785 Included in the above are: Freehold land 2,360 Leasehold land with unexpired lease period of less than 50 years 5,900 Buildings 7,525 At 31 December 15,785 Investment properties comprise freehold land, leasehold land and factory building that are leased to a subsidiary and third parties. Subsequent renewals are negotiated with the lessee and no contingent rents are charged. The fair value of the investment properties at 31 December 2006 is determined using the comparison and cost method based on independent professional valuation made by chartered valuation surveyors/registered valuers in C H Williams Talhar & Wong. Security At 31 December 2006, investment properties of the Group and of the Company with a carrying amount of RM3,040,000 (2005: RM2,617,000) and RM3,040,000 (2005: RM1,853,000) respectively are charged to a bank for term loan facility granted to the Company. w w w. s i n d o r a. c o m. m y 133

101 notes to the financial statements 31 December Investments in subsidiaries Company RM 000 RM 000 Unquoted investment at cost 65,392 27,105 Less: Accumulated impairment (8,570) (7,048) 56,822 20,057 The subsidiaries, are as follows: Effective Place of Ownership Name of Company Principal Activities incorporation interest Direct subsidiaries % % Sindora Wood Products Sdn. Bhd. Property letting Malaysia Sindora Timber Products Sdn. Bhd. Dormant Malaysia Sindora Trading Sdn. Bhd. Dormant Malaysia Sindora Development Sdn. Bhd. Investment of property Malaysia Sindora Timber Sdn. Bhd. Timber logging, processing and sale of sawn timber, Malaysia timber doors, laminated timber scantling and trading of wood products Pro Office Solutions Sdn. Bhd.* Bulk mailing and printing services Malaysia Tepak Marketing Sdn. Bhd.* Contract blending and packing of tea Malaysia and producing carbonated drinks Epasa Shipping Agency Sdn. Bhd.* Shipping and forwarding agent Malaysia E.A. Technique (M) Sdn. Bhd.* Provision of sea transportation and related services Malaysia 51 Metro Parking (M) Sdn. Bhd.* Parking operations and the provision of Malaysia related consultancy services Subsidiaries of Metro Parking (M) Sdn. Bhd. Metro Parking (S) Pte. Ltd.* Parking operator and consultancy services Republic of Singapore Metro Parking (Brunei) Sdn. Bhd.* Parking operator and other transport related services Negara Brunei Darussalam Metro Equipment Systems (M) Trading or parking and other related Malaysia Sdn. Bhd.* equipments Metro Parking (Sabah) Sdn. Bhd.* Parking operator and other transport related services Malaysia Metro Parking Management Parking operator and other transport related services Malaysia (Philippines) Inc.* PT Metro Penata Sarana* Parking operator, consultancy services and Malaysia transport related services Smart Parking Management Trading of parking and other related equipments Malaysia 70 Systems Sdn. Bhd.* * Audited by other firms of accountants. 134 Sindora Berhad (13418-K)

102 notes to the financial statements 31 December Investments in associates Group Company RM 000 RM 000 RM 000 RM 000 In Malaysia: Unquoted shares at cost 15,200 15,200 15,200 15,200 Share of post-acquisition reserves 2,213 (1,098) 17,413 14,102 15,200 15,200 Summarised financial information of the associates, which are incorporated in Malaysia, are as follows: Effective ownership Total Total interest Revenue Profit assets liabilities (%) (100%) (100%) (100%) (100%) Name of company RM 000 RM 000 RM 000 RM Willis (Malaysia) Sdn. Bhd ,330 11,867 40,373 (27,943) AmanahRaya JMF Asset Management Sdn. Bhd. 20 8,371 3,278 6,010 (2,497) MM Vitaoils Sdn. Bhd.* 35 55,746 2,740 59,874 (41,986) 2005 Willis (Malaysia) Sdn. Bhd ,722 8,730 29,916 (21,433) AmanahRaya JMF Asset Management Sdn. Bhd. 20 2,282 1,731 7,680 (3,845) MM Vitaoils Sdn. Bhd.* 35 28,027 1,980 37,038 (21,892) * The financial statements have not been audited. As such, the management accounts have been used for consolidation. 10. Other investments Group/Company RM 000 RM 000 In Malaysia: Quoted share in Malaysia, at cost 15,313 15,076 Less: Allowance for diminution in value (13,463) (13,789) 1,850 1,287 Unquoted subordinated bond 4,000 Market value: 5,850 1,287 Quoted share in Malaysia 1,988 1,046 Investment in unquoted Subordinated Bond is in accordance with the condition set in the Facility Agreement as detailed in Note 18. w w w. s i n d o r a. c o m. m y 135

103 notes to the financial statements 31 December Deferred tax assets and liabilities Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Group Company RM 000 RM 000 RM 000 RM 000 Deferred tax assets (197) (1,000) (739) Deferred tax liabilities 23,577 24,591 23,440 24,023 23,380 23,591 23,440 23,284 Property, plant and equipment capital allowances 1,735 2, revaluation 16,644 17,560 17,536 17,560 Unabsorbed capital allowances (88) (1,000) Biological assets 5,069 4,744 5,069 4,744 Others 20 23,380 23,591 23,440 23,284 Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items in certain subsidiaries: Group RM 000 RM 000 Deductible temporary differences 1,623 Unabsorbed capital allowances 8,284 8,276 Unutilised tax losses 19,967 18,284 29,874 26,560 The deductible temporary differences, unutilised tax losses and unabsorbed capital allowances do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the subsidiaries can utilise the benefit there from. The above unutilised tax losses carry-forwards and unabsorbed capital allowances carry-forwards will not be available to the Group if there is a substantial change in shareholders (more than 50%). 12. Inventories Group Company RM 000 RM 000 RM 000 RM 000 Finished goods 7,966 6,563 Work-in-progress Raw materials 2,121 2,822 General spare parts and fuel 1, Chemicals and fertilisers Crude Palm Oil and Palm Kernel 1, , ,251 10,781 1,530 1,114 The write-down of finished goods to net realisable value amounted to RM559,000 (2005: NIL). 136 Sindora Berhad (13418-K)

104 notes to the financial statements 31 December Trade and other receivables Group Company RM 000 RM 000 RM 000 RM 000 Trade receivables 14,757 8, Less: Allowance for doubtful debts (1,061) 13,696 8, Other receivables 4,474 9,180 1,378 1,187 Less: Allowance for doubtful debts (236) (1,318) 4,238 7,862 1,378 1,187 Deposits 5,089 Prepayments 3,007 8,096 26,030 16,822 2,144 1,466 Trade and other receivables of the Group denominated in currencies other than the functional currency comprise RM562,000 (2005: RM193,000) of trade receivables denominated in US Dollar, RM303,000 (2005: NIL) denominated in Euro and RM238,000 (2005: RM218,000) denominated in SGD. 14. Due from/to ultimate holding corporation/related companies/subsidiaries The amounts due from/to ultimate holding corporation/related companies/subsidiaries are unsecured, interest free and have no fixed terms of repayment. 15. Property classified as held for sale The property is in respect of leasehold lands that the Company is committed to sell. On 20 August 2003, the Company has entered into an agreement to sell the leasehold lands to a related company at an expected selling price of RM856,079. However, the Company is in the process of getting all the necessary approvals from the relevant government authorities and expected to receive all approvals in It consists of the following: Group RM 000 RM 000 Prepaid property lease payments Cash and cash equivalents Group Company RM 000 RM 000 RM 000 RM 000 Cash and bank balances 18,496 14,328 7,046 5,980 Deposits with licensed banks 11,408 1,673 6, ,904 16,001 13,093 6,027 The deposits of the Group and of the Company of RM3,101,000 (2005: RM846,891) and RM47,000 (2005: RM47,000) are pledged to licensed banks as security for bank guarantee facilities granted to the Group and the Company. w w w. s i n d o r a. c o m. m y 137

105 notes to the financial statements 31 December Capital and reserves Share capital Group and Company RM 000 RM 000 Ordinary shares of RM1.00 each: Authorised 200, ,000 Issued and fully paid 96,000 96,000 Reserves Group Company RM 000 RM 000 RM 000 RM 000 Non-distributable Share premium 11,107 11,107 11,107 11,107 Treasury shares (1,580) (6,061) (1,580) (6,061) Revaluation reserves 25,432 26,784 21,094 26,685 Exchange fluctuation reserve 51 (20) Distributable 35,010 31,810 30,621 31,731 Retained earnings 34,037 26,233 31,817 39,892 69,047 58,043 62,438 71,623 Treasury shares The shareholders of the Company, by a special resolution passed in a general meeting held on 20 June 2006, renewed their approval for the Company s plan to repurchase its own shares. The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. During the financial year, the Company repurchase 1,309,000 (2005: 2,734,200) of its issued share capital from the open market. The average price paid for the shares repurchased was RM1.20 (2005: RM1.27) per share. The repurchase transactions were financed by internally generated funds. The shares repurchased were retained as treasury shares. During the year, the Company re-issued 4,571,393 treasury shares to the shareholders as an interim dividend by way of distribution of one existing ordinary share of RM1 each held by the Company pursuant to its treasury shares for every twenty existing ordinary shares held by shareholders totalling RM6,060,000 in respect of the year ended 31 December At 31 December 2006, the Group held 1,292,907 (2005: 4,572,100) of the Company s shares. Section 108 tax credit and tax exempt account Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt account to frank the payment of dividends out of its entire retained earnings at 31 December Revaluation reserve The revaluation reserve relates to the revaluation of property, plant and equipment prepaid lease payments. 138 Sindora Berhad (13418-K)

106 notes to the financial statements 31 December Loans and borrowings This note provides information about the contractual terms of the Group s and the Company s interest-bearing loans and borrowings. For more information about the Group s and the Company s exposure to interest rate and foreign currency risk, see Note 32. Non-current Secured Group Company RM 000 RM 000 RM 000 RM 000 Term loans 49,351 5, ,342 Finance lease liabilities 2,094 2, Unsecured Term loans 46,879 46,879 Current Secured 98,324 8,349 47,821 1,574 Term loans 8,562 1, Finance lease liabilities 1,879 1, Unsecured Revolving credits 7,508 7,508 7,508 7,508 Term loans 3,121 3,121 Bankers acceptance 2,608 1,855 Bank overdraft 5,023 4,087 28,701 16,721 11,420 8, ,025 25,070 59,241 9,842 Terms and debt repayment schedule Year of Carrying Under Over Group maturity amount 1 year years years 5 years 2006 RM 000 RM 000 RM 000 RM 000 RM 000 Unsecured bankers acceptances 2,608 2,608 Unsecured bank overdraft 5,023 5,023 Unsecured revolving credits ,508 7,508 Secured term loans ,913 8,562 8,636 33,659 7,056 Unsecured term loans ,000 3,121 6,879 40,000 Secured finance lease liabilities ,973 1,879 1,025 1, ,025 28,701 16,540 74,728 7,056 w w w. s i n d o r a. c o m. m y 139

107 notes to the financial statements 31 December Loans and borrowings (cont d) Year of Carrying Under Over maturity amount 1 year years years 5 years 2005 RM 000 RM 000 RM 000 RM 000 RM 000 Unsecured bankers acceptances 1,855 1,855 Unsecured bank overdraft 4,087 4,087 Unsecured revolving credits ,508 7,508 Secured term loans ,194 1,447 1,673 2,239 1,835 Secured finance lease liabilities ,426 1,824 1,526 1,076 Company ,070 16,721 3,199 3,315 1,835 Unsecured revolving credits ,508 7,508 Secured term loans , Secured finance lease liabilities Unsecured term loans ,000 3,121 6,879 40, ,241 11,420 7,612 40,209 Unsecured revolving credits ,508 7,508 Term loans , ,342 Secured finance lease liabilities ,842 8,268 1, Finance lease liabilities Finance lease liabilities are subject to a fixed interest rate at 2.28% 2.90% (2005: 2.28% 5.13%) per annum and are payable as follows: Minimum Minimum lease lease payments Interest Principal payments Interest Principal RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Group Less than one year 2, ,879 2, ,824 Between one and five years 2, ,091 2, ,290 More than five years , ,973 4, ,426 Company Less than one year Between one and five years Sindora Berhad (13418-K)

108 notes to the financial statements 31 December Loans and borrowings (cont d) Security The term loans are secured over property, plant and machinery of RM77,668,000 (2005: RM5,461,000). On 19 September 2006, the Company entered into a Facility Agreement with a licensed bank and a bond issuer ( Issuer ) for an unsecured fixed rate term loan facility of RM40 million ( the Facility ). The salient terms of the Facility Agreement are as follows: i) the Facility is repayable in one lump sum at the end of five (5) years from the drawdown date of 10 October 2006; ii) the interest rate is fixed at 7.45% per annum and the interest is payable at six (6) monthly intervals from the date of drawdown; iii) the Facility is unsecured; and iv) as a condition of the Facility, the Company shall subscribe for the Subordinated Bond of RM4 million (Note 10). Subordinated bonds are asset backed securities issued by the Issuer pursuant to the Primary Collateralised Loan Obligation Transaction, which shall rank after the Super Senior Bonds, the Senior Bonds and the Mezzanine Bonds in terms of priority. 19. Trade and other payables Group Company RM 000 RM 000 RM 000 RM 000 Trade payables 16,306 11,188 1,338 2,132 Other payables and accrued expenses 13,396 11,952 3,367 2,666 29,702 23,140 4,705 4,798 Payables denominated in currencies other than the functional currency comprise RM1,783,000 (2005: RM1,641,000) of trade payables denominated in US Dollar and RM735,000 (2005: RM138,000) of trade payables denominated in Pound Sterling. 20. Revenue Group Company RM 000 RM 000 RM 000 RM 000 Sale of: Crude Palm Oil and Palm Kernel 63,893 66,538 63,893 66,538 Logs, sawn timber, treated timber and door 14,592 17,087 Rubber 2,993 2,623 2,993 2,623 Dividend income 7,143 8,522 Intrapreneur venture companies: Tea and carbonated drinks 14,015 14,627 Mailing and printing 16,947 20,061 Fund management 1,348 Parking collection and management fees 86,825 83,055 Shipping and forwarding fee 6,371 2, , ,304 74,029 77,683 w w w. s i n d o r a. c o m. m y 141

109 notes to the financial statements 31 December Operating profit/(loss) Group Company RM 000 RM 000 RM 000 RM 000 Operating profit/(loss) is arrived at after charging/(crediting) Audit fees Current year Underprovision in prior years 6 Amortisation of intangible assets Allowance for doubtful debts Subsidiaries 20,539 Others 104 Allowance for diminution in investment in subsidiaries 1,521 1,021 Allowance for diminution in other investments Bad debts written off 11 Depreciation of property, plant and equipment 8,583 8,863 2,917 3,515 Amortisation of biological assets 1,197 1,276 1,197 1,276 Directors remuneration Fees Other emoluments Contributions to Employee s Provident Fund Impairment on goodwill 76 Impairment loss on property, plant and equipment 85 Property, plant and equipment written off Rental of land and buildings 45,566 43, Rental of machinery and equipments 36 Loss/(Gain) on disposal of property, plant and equipment 56 (159) (17) (24) Personnel expenses (excluding Executive Directors): Contributions to Employee s Provident Fund 2,253 2, Wages, salaries and others 28,222 29,346 7,691 4,062 Gratuity benefits 1,990 1,990 Bad debts recovered (458) (458) Gain on disposal of a subsidiary and investment (891) (900) Interest income (519) (245) (450) (51) Rental received (159) (219) (217) (219) Reversal of allowance for diminution in value of other investments (326) (326) Write down of finished goods 559 Unrealised loss on foreign exchange 10 Management fee received (12) The estimated monetary value of Directors benefits-in-kind of the Group/Company are RM47,000 (2005: RM20,000). 142 Sindora Berhad (13418-K)

110 notes to the financial statements 31 December Tax expense Group Company RM 000 RM 000 RM 000 RM 000 Tax expense Malaysian tax Current year 3,079 2,616 4,409 3,819 (Over)/Underprovision in prior years (516) 4 (173) (13) 2,563 2,620 4,236 3,806 Foreign tax Current year Overprovision in prior years (5) (25) ,130 3,060 4,236 3,806 Deferred tax (income)/expense Origination of temporary differences (154) (95) (394) (34) (Over)/Underprovision in prior years (375) 609 (444) 520 (529) 514 (838) 486 Tax expense 2,601 3,574 3,398 4,292 Share of tax of equity accounted associates 2,133 1,443 Total tax expense 4,734 5,017 3,398 4,292 Reconciliation of effective tax expense Profit/(Loss) for the year 11,886 10,391 (11,179) 8,934 Total tax expense 4,734 5,017 3,398 4,292 Profit/(Loss) before tax 16,620 15,408 (7,781) 13,226 Tax calculated using Malaysian tax rate of 28% (2005: 28%) 4,654 4,314 (2,179) 3,707 Non deductible expenses 2,067 1,762 7, Effect of income tax rate 20% (123) (117) Effect of different tax rate in other countries Effect of change in tax rate* (830) 10 (830) Non taxable income (699) (1,471) (103) (390) Utilisation of current year reinvestment allowances (90) (57) Utilisation of previous unrecognised tax losses unabsorbed capital allowances (119) (256) Deferred tax not recognised during the year Others (95) 5,630 4,429 4,015 3,785 w w w. s i n d o r a. c o m. m y 143

111 notes to the financial statements 31 December Tax expense (cont d) Group Company RM 000 RM 000 RM 000 RM 000 Reconciliation of effective tax expense (cont d) (Over)/Underprovision in prior years (896) 588 (617) 507 Tax expense 4,734 5,017 3,398 4,292 * With effect from year of assessment 2007, corporate tax rate is at 27%. The Malaysian Budget 2007 also announced the reduction of corporate tax rate to 26% in Consequently deferred tax assets and liabilities are measured using these tax rates. 23. Basic earnings per ordinary share Basic earnings per share The calculation of basic earnings per share at 31 December 2006 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding calculated as follows: Group RM 000 RM 000 Profit attributable to ordinary shareholders 10,758 10,007 Numbers Numbers Weighted average number of ordinary shares Number of shares in issue at beginning of year ( 000) 96,000 96,000 Effect of treasury shares held ( 000) (1,691) (4,572) Weighted average number of ordinary shares in issue ( 000) 94,309 91,428 Basic earnings per ordinary share (sen) Dividends Dividends recognised in the current year by the Company are: Sen per Total date of share amount payment (net of tax) RM Interim 3.6 3, February Final 1.8 1, July Interim 6.7 6, February Final 3.6 3,378 8 July ,172 9, Sindora Berhad (13418-K)

112 notes to the financial statements 31 December Acquisition of property, plant and equipment During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM4,696,000 (2005: RM14,164,000) and RM1,284,000 (2005: RM3,019,000) of which NIL (2005: RM2,698,000) and NIL (2005: RM303,000) was acquired under finance leases. 26. Acquisition of a subsidiary Business combination On 26 December 2006, the Group acquired 51% of the shares in E.A. Technique (M) Sdn. Bhd. for RM38,250,000 satisfied in cash. The subsidiary is involved in provision of sea transportation, shipping and freight and time charter services, ship management and related services. If the acquisition had occurred on 1 January 2006, management estimates that consolidated revenue would have been RM250,681,000 and consolidated profit for the year would have been RM22,042,000. The acquisition had the following effect on the Group s assets and liabilities on acquisition date: Pre acquisition Fair Recognised carrying value value on amount adjustment acquisition RM 000 RM 000 RM 000 Property, plant and equipment 3 78,545 24, ,148 Investment in an associate 1,038 1,038 Inventories Receivables, deposits and prepayments 4,141 4,141 Cash and cash equivalents 4,973 4,973 Loans and borrowings (51,279) (51,279) Payables and accruals (3,155) (3,155) Net identifiable assets and liabilities 34,912 24,603 59,515 Less: Minority interest share of acquisition (29,163) Goodwill on acquisition 8,160 Consideration paid, satisfied in cash 38,512 Cash acquired (4,973) Net cash outflow 33,539 On 20 September 2005, a subsidiary entered into a sale and purchase agreement to acquire 70% equity interest in Smart Parking Management Systems Sdn. Bhd., a company incorporated in Malaysia, representing 70,000 ordinary shares of RM1 each for a total cash consideration of RM500,000. The acquisition was completed on 1 March The additional acquisition resulted in a goodwill of RM584,448. The effect of the acquisition on the Group s assets and liabilities on acquisition was not material to the results and financial position of the Group. The values of assets and liabilities recognised on acquisition are their estimated fair values. The fair value of the property, plant and equipment acquired was determined based on independent valuers report. w w w. s i n d o r a. c o m. m y 145

113 notes to the financial statements 31 December Operating leases Leases as lessee Non-cancellable operating lease rentals are payable as follows: Group Company RM 000 RM 000 RM 000 RM 000 Less than one year 44,825 44, Between one and five years 121, , More than five years 6,328 10, , , The Group leases a number of buildings under operating leases. The leases typically run for a period of between 2 to 5 years with renewal option included in the contracts. Certain contracts include escalation clauses or contingent rental arrangements computed based on sales achieved while others include fixed rentals for an average of 3 years. There are no restrictions placed upon the Group by entering into these leases. The Group also leases various plant and machinery under cancellable operating lease agreements. The Group is required to give a 3-month notice for the termination of those agreements. The Company leases office under operating leases. The leases typically run for a period of 3 years with one year renewal option included in the contracts. Lease payments are increased every 4 years to reflect market rentals. None of the leases includes contingent rentals. The lease payments and contingent rent recognised in profit or loss during the financial year are disclosed in Note 21. Leases as lessor The Company leases out its investment properties under operating leases (see Note 7). The future minimum lease payments under noncancellable leases are as follows: Group/Company RM 000 RM 000 Less than one year Between one and five years Capital commitments Group Company RM 000 RM 000 RM 000 RM 000 Capital expenditure commitment Plant and machinery Contracted but not provided for 19, Sindora Berhad (13418-K)

114 notes to the financial statements 31 December Contingent liabilities Group RM 000 RM 000 Secured Bank guarantee extended to third parties in respect of rental for parking space 2,633 2,536 Corporate guarantee given by subsidiaries to third parties 4,445 4,160 7,078 6, Related parties Controlling related party relationships are as follows: i) Subsidiaries as disclosed in Note 8. Significant related party transactions of the Group and of the Company other than those disclosed elsewhere in the financial statements are as follows: Other related party transactions Group Company RM 000 RM 000 RM 000 RM 000 Holding Company Administrative, Secretarial and Corporate fee payable Acquisition of subsidiaries 2,100 2,100 Subsidiaries Dividend receivable 1,743 1,456 Contract services payable Mailing fee payable 14 Rental receivable 57 Associates Dividend receivable 5,403 4,680 5,400 4,680 Insurance Service Payable Related Companies EPA Management Sdn. Bhd. Management fee payable 1,555 1,780 1,555 1,780 Sales 66,886 65,534 66,886 65,534 w w w. s i n d o r a. c o m. m y 147

115 notes to the financial statements 31 December Related parties (cont d) Group Company RM 000 RM 000 RM 000 RM 000 Johor Logistics Management fees payable Rental payable Management fee receivable 12 Logistic income receivable 3,360 2,912 Logistic expense payable Johor Land Berhad Mailing fee receivable Makmuran Sawmill Sdn. Bhd. Sale of goods 137 3,542 Management fee receivable 162 Purchase of goods 795 Kulim (Malaysia) Berhad Mailing fee payable PT Andalas Lumber Products Sale of goods 915 Purchase of goods 1, Johor Tea Sdn. Bhd. Sale of goods 219 Johor Land Manufacturing Sdn. Bhd. Sale of goods 278 Purchase of property, plant and equipment 4 Natural Soaps Sdn. Bhd. Agency fee receivable 288 Forwarding and documentation fee receivable 66 Natural Oleochemicals Sdn. Bhd. Agency fee receivable 429 Forwarding and documentation fee receivable 100 Johor Foods Sdn. Bhd. Contract services receivable 38 Damansara Assets Sdn. Bhd. (formerly known as Harta Consult Sdn. Bhd.) Rental payable Sindora Berhad (13418-K)

116 notes to the financial statements 31 December Related parties (cont d) Group Company RM 000 RM 000 RM 000 RM 000 Johor Tropical Products Sdn. Bhd. Rental payable Pro-Office Services Sdn.Bhd. Rental payable 110 Pelaburan Johor Berhad Mailing fee payable 96 Pro-Office Shoppe Sdn. Bhd. Mailing fee payable Mailing fee receivable 7 These transactions have been entered into in the normal course of business and have been established under negotiated terms. 31. Segment reporting Segment information is presented in respect of the Group s business segment. The primary format, business segments, is based on the Group s management and internal reporting structure. Inter-segment pricing is determined based on an arm s length basis or negotiated terms. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period. Business segments The Group comprises the following main business segments: Plantation The cultivation of oil palm and palm oil milling and rubber estate. Intrapreneur Venture Investment holding in companies Geographical segments Geographical segment is not presented as the Group s customers and assets are principally operating in Malaysia. w w w. s i n d o r a. c o m. m y 149

117 notes to the financial statements 31 December Segment reporting (cont d) Intrapreneur Plantation Venture Eliminations Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Business segments Revenue from external customers 66,886 69, , , , ,304 Segment result 11,504 11,327 2,576 5,445 14,080 16,772 Unallocated expenses (3,751) (5,923) Results from operating activities 10,329 10,849 Share of profit of associates 6,737 4,331 Finance costs (2,579) (1,215) Profit before tax 14,487 13,965 Tax expense (2,601) (3,574) Profit after tax 11,886 10,391 Minority interests (1,128) (384) Profit for the year 10,758 10,007 Segment assets 161, , ,458 69, , ,013 Investment in associates 17,413 14,102 17,413 14,102 Total assets 389, ,115 Segment/Total liabilities 37,805 36, ,447 45, ,252 81,817 Capital expenditure 1,284 3,019 3,412 11,145 4,696 14,164 Depreciation and amortisation 5,909 4,541 5,319 7,460 11,228 12,001 Non-cash expenses/(income) other than depreciation and amortisation (165) (165) 150 Sindora Berhad (13418-K)

118 notes to the financial statements 31 December Financial instruments Financial risk management objectives and policies Exposure to credit, foreign currency, liquidity and interest rate risks arise in the normal course of the Group s and of the Company s business. The Group s and the Company s policies for managing the risks are summarised below: Credit risks At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Foreign currency risk The Group operates internationally and is exposed to various currencies, mainly US Dollar, Singapore Dollar, Brunei Dollar, Phillipines Peso and Indonesia Rupiah. Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales give rise to foreign exchange exposures. The management believes that the foreign exchange risks is minimal. The Group does not hedge its financial assets and liabilities denominated in foreign currencies. Liquidity risk The Group and the Company monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the operations and to mitigate the effects of fluctuation in cash flow. Interest rate risk The Group s and the Company s investment in fixed-rate debt securities and its fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group s and Company s investments in variable-rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short term receivables and payables are not exposed to interest rate risk. There is no formal hedging policy with respect to interest rate exposure. Exposure to interest rate risk is monitored on an ongoing basis and the Group and the Company endeavour to keep the exposure at an acceptable level. Effective interest rate and repricing analysis In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at the balance sheet date and the periods in which they mature, or if earlier, reprice. Average effective lease Group interest Less than Over 2006 rate Total 1 year years years 5 years % RM 000 RM 000 RM 000 RM 000 RM 000 Fixed rate instruments Unquoted subordinated bond ,000 4,000 Deposits with licensed banks ,408 11,408 Secured term loans (57,913) (8,562) (8,636) (33,659) (7,056) Unsecured term loans (50,000) (3,121) (6,879) (40,000) Bankers acceptances 3.92 (2,608) (2,608) Finance lease liabilities (3,973) (1,879) (1,025) (1,069) Bank overdraft 6.90 (1,223) (1,223) (100,309) (5,985) (16,540) (70,728) (7,056) w w w. s i n d o r a. c o m. m y 151

119 notes to the financial statements 31 December Financial instruments (cont d) Effective interest rate and repricing analysis (cont d) Average effective lease Group interest Less than Over 2006 rate Total 1 year years years 5 years % RM 000 RM 000 RM 000 RM 000 RM 000 Floating rate instruments Bank overdraft (3,800) (3,800) Revolving credit 7.75 (7,508) (7,508) 2005 Fixed rate instruments (11,308) (11,308) Deposits with licensed banks ,673 1,673 Term loans (7,194) (1,447) (1,673) (2,239) (1,835) Bankers acceptances 3.92 (1,855) (1,855) Finance lease liabilities (4,426) (1,824) (1,526) (1,076) Floating rate instruments (11,802) (3,453) (3,199) (3,315) (1,835) Bank overdraft (4,087) (4,087) Revolving credit (7,508) (7,508) (11,595) (11,595) Average effective Company interest Less than rate Total 1 year years years % RM 000 RM 000 RM 000 RM 000 Fixed rate instruments Unquoted subordinated bond ,000 4,000 Deposits with licensed banks ,047 6,047 Secured term loan 4.31 (1,342) (700) (642) Unsecured term loans (50,000) (3,121) (6,879) (40,000) Finance lease liabilities 2.90 (391) (91) (91) (209) (41,686) 2,135 (7,612) (36,209) 152 Sindora Berhad (13418-K)

120 notes to the financial statements 31 December Financial instruments (cont d) Effective interest rate and repricing analysis (cont d) Average effective Company interest Less than rate Total 1 year years years % RM 000 RM 000 RM 000 RM 000 Floating rate instruments Revolving credit (7,508) (7,508) 2005 Fixed rate instruments Deposits with licensed banks Secured term loans 4.31 (2,042) (700) (1,342) Finance lease liabilities 2.90 (292) (60) (62) (170) Floating rate instruments (2,287) (713) (1,404) (170) Revolving credit (7,508) (7,508) Fair values Recognised financial instruments The carrying amounts of the current financial assets and liabilities approximate their fair values due to the relatively short term nature of these financial instruments. The carrying amount of term loan, being floating rate term loan, approximate fair value as its effective interest rate changes accordingly to movements in the market interest rate. No disclosure of fair value is made for non-current amounts due to/from subsidiary companies as it is not practicable to determine their fair value with sufficient reliability since the amounts are interest free and have no fixed terms of repayment. However, the Group does not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would eventually be received or settled. It was not practicable to estimate the fair value of investment in unquoted subordinated bonds. The fair value of other financial assets and liabilities, together with the carrying amounts shown in the balance sheets, are as follows: Carrying Fair Carrying Fair amount value amount value Group RM 000 RM 000 RM 000 RM 000 Financial liabilities Fixed rate term loan 107, ,408 7,194 7,047 Finance lease liabilities 3,973 3,963 4,426 4,413 w w w. s i n d o r a. c o m. m y 153

121 notes to the financial statements 31 December Financial instruments (cont d) Recognised financial instruments Carrying Fair Carrying Fair amount value amount value RM 000 RM 000 RM 000 RM 000 Company Financial liabilities Fixed rate term loan 51,342 51,252 2,042 2,042 Finance lease liabilities Changes in accounting policies The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31 December The changes in accounting policies arising from the adoption of FRS 3, Business Combinations, FRS 136, Impairment of Assets, FRS 138, Intangible Assets, FRS 5, Non-current Assets Held for Sale and Discontinued Operations, FRS 140, Investment Property, FRS 117, Leases and FRS 127, Consolidated and Separate Financial Statements are summarised below: FRS 3, Business Combinations, FRS 136, Impairment of Assets and FRS 138, Intangible Assets The adoption of FRS 3, FRS 136 and FRS 138 has resulted in a change in the accounting policy for goodwill. The change in accounting policy is made in accordance with their transitional provisions. Goodwill is stated at cost less accumulated impairment losses and is no longer amortised. Instead, goodwill impairment is tested annually, or when circumstances change, indicating that goodwill might be impaired. This has resulted in the cessation of amortisation of goodwill with effect from 1 January Had there not been a change in accounting policy, the net profit attributable to shareholders for the financial year ended 31 December 2006 would reduce by RM687,000. This change in accounting policy has no material impact on earnings per share. FRS 5, Non-current Assets Held for Sale and Discontinued Operations Assets held for sale are presented separately on the face of the balance sheet. The assets held for sale are those in which the amounts will be recovered principally through a sale transaction rather than through continuing use. The change in accounting policy is made in accordance with their transitional provisions. FRS 140, Investment Property In accordance with the transitional provision, the difference between the fair value of the property at the date of transition, 1 January 2006 and the carrying amount under the cost model is adjusted against the opening retained earnings. FRS 127, Consolidated and Separate Financial Statements The adoption of FRS 127 has resulted in a change in the accounting policy for investment in subsidiary. Investment in subsidiary is stated at cost instead of at valuation. This has resulted in the reversal of revaluation surplus arising from revaluation of investment in subsidiary retrospectively and the comparative have been restated. 154 Sindora Berhad (13418-K)

122 notes to the financial statements 31 December Changes in accounting policies (cont d) FRS 101, Presentation of Financial Statements Biological Assets Plantation development expenditure ( PDE ) previously classified under property, plant and equipment is now presented separately as Biological Assets on the face of the balance sheet. Comparatives have been restated. The change in accounting policy from capital maintenance method to amortisation method had the following impact on the financial statements RM 000 RM 000 Income statement for the year ended 31 December Decrease in cost of sales 1,832 1,342 Increase in tax expense (513) (376) Increase in profit attributable to shareholders 1, Balance sheet at 31 December Cumulative increase in deferred tax liabilities 5,257 4,744 Cumulative decrease in biological assets (11,917) (13,748) Earnings per share In basic earning per share (sen) FRS 117, Leases In prior year, the Group and the Company had classified leasehold land as finance lease and had recognised the amount of prepaid lease payments of property within its property, plant and equipment. On early adoption of FRS 117, Leases, the Group and the Company treats such a lease as an operating lease, with unamortised carrying amount classified as prepaid lease payments in accordance with transitional provision in FRS A. Such prepaid lease payments are amortised on a straight line basis over the remaining useful lease term of the land of 71 to 80 years. w w w. s i n d o r a. c o m. m y 155

123 notes to the financial statements 31 December Comparative figures Certain comparative figures have been reclassified as a result of changes in accounting policies as stated in Note 33 and to conform with the presentation requirements of FRS 101. Group Company As As As previously As previously restated stated restated stated RM 000 RM 000 RM 000 RM 000 Balance sheets Property, plant and equipment 49, ,873 32, ,486 Biological assets 17,396 31,144 17,396 31,144 Prepaid leased payments 90,384 84,621 Investments in subsidiaries 20,057 41,412 Due from subsidiaries 20,985 Prepaid leased payments 1,539 1,124 Reserves 58,043 82,597 71,623 97,939 Treasury shares (6,061) (6,061) Due to a subsidiary 1,392 Deferred tax liabilities 24,591 19,847 24,023 19,279 Income statements Revenue 208, ,300 77,683 68,157 Cost of sales 172,026 (164,632) 56,830 (50,735) Other income 3,681 1,443 7,573 Distribution expenses (2,328) (1,241) (1,004) Administration expenses (18,557) (30,425) (4,780) (15,229) Other expenses (8,225) (5,212) (3,011) Tax expense (3,574) (4,641) (4,292) (1,524) Basic earnings per ordinary share (sen) Statement of changes in equity Retained earnings at 1 January ,664 45,123 40,396 59,856 Retained earnings at 31 December ,233 44,726 39,892 58,385 Revaluation reserves at 1 January 2005/31 December ,685 28, Sindora Berhad (13418-K)

124 notes to the financial statements 31 December Significant events The Company i) On 11 August 2006, the Company had entered into a conditional Sale and Purchase Agreement with Abdul Hak bin Mohd Amin, Hamidah bt Omar and Zulkifli bin Mohd Amin to acquire 6,901,779 ordinary shares of RM1.00 each in E.A Technique (M) Sdn. Bhd. representing 51% equity interest in E.A Technique (M) Sdn. Bhd. for a purchase consideration of RM38,250,000 to be satisfied by cash. The acquisition was completed on 26 December 2006; ii) iii) iv) On 15 August 2006, the Company had entered into a 15-Year Concession Agreement with Johor Corporation and Metro Parking (M) Sdn. Bhd. to manage, operate and maintain a multi storey car park together with other parking facilities at Persada Johor International Convention Centre in Johor Bahru for a concession consideration of RM15 million to be settled by way of cash; On 28 August 2006, the Company had entered into a first supplementary concession agreement with Johor Corporation, Metro Parking (M) Sdn. Bhd. and Puteri Hotels Sdn. Bhd. in respect of the management, operation and maintenance of the four (4) parking facilities at Persada Johor International Convention Centre in Johor Bahru; On 25 November 2006, the Company had entered into a conditional Sale and Purchase Agreement with Romli bin Ishak, Yurlida binti Mohd Zain and Muhammad Nor Annuar bin Hashim to acquire 90,000 ordinary shares of RM1.00 each in GranuLab (M) Sdn. Bhd. representing 90% equity interest in GranuLab (M) Sdn. Bhd. for a purchase consideration of RM270,000 to be satisfied by cash. The proposal is expected to be completed by the second quarter of 2007; and v) The Company proposed renounceable two-call rights issue of 105,600,000 new ordinary shares of RM1.00 each in Sindora ( Rights Shares ) at an indicative issue price of RM1.00 per Rights Share, on the basis of eleven (11) Rights Shares for every ten (10) existing ordinary shares of RM1.00 each in Sindora ( Sindora Shares ), together with one (1) free detachable warrant ( Warrant ) for every two (2) Rights Shares subscribed ( Proposed Rights Issue with Warrants ). The proposal is expected to be completed by the third quarter of Subsidiary, Metro Parking (M) Sdn. Bhd. i) On 28 March 2005, the Company approved the increase in the paid-up share capital of its subsidiary, PT. Metro Penata Sarana, from 50,000 ordinary shares of USD1 each to 200,000 ordinary shares of USD1 each by way of cash payment and capitalisation of advances. During the financial year, the Company acquired the additional 150,000 shares of USD1 each for a total consideration of USD150,000 (equivalent to RM567,957) via cash payment of USD81,748 (equivalent to RM309,529) and capitalisation of advances due from subsidiary of USD68,252 (equivalent to RM258,428); and ii) On 20 September 2005, the Company entered into a Sale and Purchase Agreement to acquire 70% equity interest in Smart Parking Management Systems Sdn. Bhd., a company incorporated in Malaysia, representing 70,000 ordinary shares of RM1 each for a total cash consideration of RM500,000. The acquisition was completed on 1 March The additional acquisition resulted in a goodwill of RM584, Subsequent events The Company On 22 March 2007, the Company entered into a conditional Share Purchase cum Subscription Agreement with Johari Bin Ma arof, Laili Binti Ismail and Hayati Binti Jalaludin for acquisition of 1,856,992 ordinary shares of RM1.00 each and subscription of 1,166,667 new ordinary shares of RM1.00 each in J.M. Permata Sdn. Bhd. for a total cash consideration of RM11,141,952 and RM7,000,002 respectively. Subsidiary, E.A. Technique (M) Sdn. Bhd. On 15 March 2007, the Company entered into a conditional Sale and Purchase Agreement with Mohd Zain Bin Abdullah to dispose 1,037,600 ordinary shares of RM1.00 each representing 40% equity interest in E.A. Bunkering Services Sdn. Bhd. for cash consideration at RM1.15 per share totalling RM1,193,240. w w w. s i n d o r a. c o m. m y 157

125 share performance charts /Carta prestasi saham 1,500 1,200 1, Kuala Lumpur Composite Index for the period from 31 January 2002 to 30 April Indeks Komposit Kuala Lumpur bagi tempoh 31 Januari 2002 hingga 30 April Point /Mata Kuala Lumpur Composite Index/Indeks Komposit Kuala Lumpur Million Shares /Juta Saham Volume traded for the period from 31 January 2002 to 30 April Jumlah diniagakan bagi tempoh 31 Januari 2002 hingga 30 April Volume Traded/Jumlah Diniagakan Price /Harga (RM) High/Tinggi : 1.37 Low/Rendah : 1.05 Close/Tutup : 1.16 Share prices (High and Low) and Closing Prices for the period from 31 January 2002 to 30 April Harga Saham (Tinggi dan Rendah) dan Harga Penutup bagi tempoh 31 Januari 2002 hingga 30 April High/Tinggi Low/Rendah Closing Price/Harga Penutup Share Price Performance/Prestasi Harga Saham (RM) High/Tinggi Low/Rendah Close/Tutup Sindora Berhad (13418-K)

126 shareholdings statistics as at 25 April 2007/statistik pemegang saham pada 25 April 2007 Authorised Share Capital/Modal Saham Dibenarkan : RM200,000,000 Issued and Fully Paid-Up Capital/ : RM 96,000,000 less 1,588,407 Treasury Shares/ Modal Diterbitkan dan Berbayar Penuh Saham Perbendaharaan = 94,411,593 Class of Shares/Jenis Saham : Ordinary Share of RM1 each/saham Biasa RM1 sesaham VOTING RIGHT OF SHAREHOLDERS/HAK MENGUNDI PEMEGANG SAHAM Every member of the Company present in person or by proxy shall have one vote on a show of hand and in the case of a poll shall have one vote for every share of which he/she is the holder. Setiap ahli Syarikat yang hadir secara peribadi atau secara proksi adalah berhak ke atas satu undi melalui undian tangan dan sekiranya undian dibuat secara bertulis (poll), ahli-ahli berhak ke atas satu undi untuk setiap satu unit saham yang dipegang. BREAK DOWN OF SHAREHOLDINGS/PECAHAN PEGANGAN SAHAM Size of Shareholdings/ No. of Shareholders/ No. of Shares/ Saiz Pegangan Saham Bil. Pemegang Saham % Bil. Saham % Less than 100/Kurang dari , , , ,001 10,000 2, ,012, , , ,607, ,001 to less than 5% of Issued Capital/ 100,001 hingga kurang daripada 5% Modal Diterbitkan ,982, % and above of Issued Capital/ 5% dan lebih daripada Modal Diterbitkan ,746, TOTAL/JUMLAH 3, ,411, TOP THIRTY SECURITIES ACCOUNT HOLDERS/TIGA PULUH PEMEGANG AKAUN SEKURITI UTAMA (Without aggregating the securities from different securities accounts belonging to the same depositor)/ (Tanpa mengagregat sekuriti daripada akaun sekuriti yang berlainan yang dimiliki pendeposit yang sama) Name No. of Shares Nama Bil. Saham % 1 Johor Corporation 37,885, Johor Corporation 17,561, Yeoh Kean Hua 6,300, PRB Noms (T) Sdn Bhd A/C Rubber Industry Smallholders Development Authority 2,025, Johor Capital Holdings Sdn Bhd 1,960, Permodalan Nasional Berhad 1,260, Johor Corporation 1,139, Johan Enterprise Sdn Bhd 1,134, Yeoh Meng Ghee 1,071, Zalaraz Sdn Bhd 1,000, M & A Nom (A) Sdn Bhd A/C Pedigree Limited 966, Johor Ventures Sdn Bhd 913, Johor Capital Holdings Sdn Bhd 787, Pristine Bay Sdn Bhd 600, PRB Noms (T) Sdn Bhd A/C Rubber Industry Smallholders Development Authority 577, Yeoh Phek Leng 528, Kulim (Malaysia) Berhad 525, Yeoh Swee Leng 516, M & A Nom (T) Sdn Bhd A/C Titan Express Sdn Bhd 430, Yeoh Tiong Ghee 420, w w w. s i n d o r a. c o m. m y 159

127 shareholdings statistics as at 25 April 2007/statistik pemegang saham pada 25 April 2007 TOP THIRTY SECURITIES ACCOUNT HOLDERS/TIGA PULUH PEMEGANG AKAUN SEKURITI UTAMA (cont d/samb.) (Without aggregating the securities from different securities accounts belonging to the same depositor)/ (Tanpa mengagregat sekuriti daripada akaun sekuriti yang berlainan yang dimiliki pendeposit yang sama) Name No. of Shares Nama Bil. Saham % 21 Arshad bin Ayub 357, Amanah Raya Noms (T) Sdn Bhd A/C Dana Johor 287, Southern Noms (T) Sdn Bhd A/C Chin Keo Chin Key Soo 269, Lim Chee Yong 240, HSBC Noms (A) Sdn Bhd A/C Exempt An for Morgan Stanley & Co. International Limited 220, Public Noms (T) Sdn Bhd A/C Surinder Singh a/l Wassan Singh (E-IMO) 202, Soh Tik Siew 194, HSBC Noms (A) Sdn Bhd A/C Exempt An for HSBC Private Bank (Suisse) S. A. (Spore TST ACCL) 190, Central Kedah Plywood Factory Sendirian Berhad 189, Public Noms (T) Sdn Bhd A/C Tee See Kim (E-TSA) 155, SUBSTANTIAL SHAREHOLDERS/PEMEGANG SAHAM UTAMA Name No. of Shares Nama Bil. Saham % 1 Johor Corporation 3 a/cs 56,585, Johor Corporation Group Johor Capital Holdings Sdn Bhd 2 a/cs 2,747,535 Johor Ventures Sdn Bhd 2 a/cs 929,825 Pristine Bay Sdn Bhd 600,600 Kulim (Malaysia) Berhad 525,000 4,802, Yeoh Kean Hua 6,300, ANALYSIS OF SHAREHOLDERS/ANALISA PEMEGANG SAHAM No. of Shareholders No. of Shares Bil. Pemegang Saham % Bil. Saham % Malaysian/Warga Malaysia Bumiputra ,608, Others/Lain-lain 2, ,751, Foreigners/Asing ,051, TOTAL/JUMLAH 3, ,411, Sindora Berhad (13418-K)

128 list of Group s landed properties Net Book Built-up Approximate Value as at Land Area Area Age of 31 December Location/ (Hectares/ (Hectares/ Property 2006 Property Description Address 000 Sq. Ft.) 000 Sq. Ft.) Tenure (Year) RM 000 Mukim of Rengam, Kluang, Ladang Sindora, KB 539 Johor (Sindora Estate) Kluang, Johor 3,939/ 27.03/ 99 years lease expiring 19 60,663 Oil palm and rubber 24 Jan 2086 plantations Palm oil mill 16/ /120.7 No separate title 8 6,407 (Part of Sindora Estate) Mukim of Cha ah Bahru Ladang Sungai Simpang Kiri Batu Pahat, Johor KB 103 (Sungai Simpang Kiri Estate) Cha ah Oil palm plantation Johor 2,371.7/ 4.67/ 99 years lease expiring 7, 24 25, Mar 2081 and 28 and 22 Dec 2077 Mukim of Ulu Sungai Johor Lot 1384, 45th Km Kota Tinggi, Johor Industrial Area Phase 1 Bandar Tenggara Vacant land for 20 units Kulai, Johor /68 n.a 99 years lease expiring of terrace houses 18 Apr 2085 Vacant land for 28 units /176 n.a 99 years lease expiring 5 63 of terrace houses 15 Aug 2099 Industrial land and buildings 2.56/ 60 years lease expiring Nov 2059 Industrial land and buildings /2,344 / years lease expiring 26 9,488 for office and factory 30 Jan 2041 Factory building/ /5 /5 60 years lease expiring moulding factory 30 Jan unit of double-storey No. 1, /6 /3 99 years lease expiring bungalow (staff resident) Jalan Temenggong Apr 2085 Bandar Tenggara Kulai, Johor Mukim of Plentong No. 6, 6A, 6B, 37, 37A, Johor Bahru, Johor 37B, 41, 41A, 41B Jalan Perang 4 units of 3 storey Taman Pelangi /8 /18 Freehold 25 3,040 shophouses Johor Bahru Mukim of Tebrau No. 17, Jalan Resam / /2.5 Leasehold PTD 57100, Greenplain Greenplains Ulu Tiram Taman Bukit Tiram Johor Ulu Tiram Ulu Tiram, Johor w w w. s i n d o r a. c o m. m y 161

129 list of Group s landed properties Net Book Built-up Approximate Value as at Land Area Area Age of 31 December Location/ (Hectares/ (Hectares/ Property 2006 Property Description Address 000 Sq. Ft.) 000 Sq. Ft.) Tenure (Year) RM 000 Tepak Marketing Mukim of Plentong / years lease expiring Mukim of Plentong Plo 398, Jalan Perak / Apr 2050 Plo 398, Jalan Perak Pasir Gudang Pasir Gudang Industrial Area Industrial Area Johor Johor Tepak Marketing Mukim of Plentong / years lease expiring Mukim of Plentong Plo 399, Jalan Perak / Apr 2050 Plo 399, Jalan Perak Pasir Gudang Pasir Gudang Industrial Area Industrial Area Johor Johor Wisma Pro Office No. 6 Jln SBC 6 /2.8 Freehold 2 4,408 Pro Office Solutions Sdn Bhd Taman Sri Batu Caves HSD , PT Batu Caves Mukim of Batu Caves Selangor Gombak District, Selangor 162 Sindora Berhad (13418-K)

130 senarai hartanah Kumpulan Jangkaan Nilai K keluasan Kawasan usia Buku Bersih Tanah Dibina harta 31 Disember Lokasi/ (Hektar/ (Hektar Hakmilik/ Milikan 2006 Keterangan Tanah Alamat 000 Kps.) 000 Kps.) Pegangan (Tahun) RM 000 Mukim Rengam Ladang Sindora Kluang, Johor KB 539 (Ladang Sindora) Kluang Ladang kelapa sawit Johor 3,939/ 27.03/ Pajakan 99 tahun 19 60,663 dan getah tamat 24 Jan 2086 Kilang Kelapa Sawit 16/ /120.7 Tiada suratan 8 6,407 (Sebahagian hakmilik tersendiri Ladang Sindora) Mukim Cha ah Bahru Ladang Sungai Simpang Kiri Batu Pahat, Johor KB 103 (Ladang Sungai Cha ah Simpang Kiri) Johor Ladang Kelapa Sawit 2,371.7/ 4.67/ Pajakan 99 tahun 7, 24 25,652 tamat dan Mar 2081 dan 22 Dis 2077 Mukim Ulu Sungai Johor Lot 1384, Km 45 Kota Tinggi, Johor Kawasan Perindustrian Fasa 1 Tanah kosong dimiliki Bandar Tenggara /68 Pajakan 99 tahun untuk pembangunan Kulai, Johor tamat 20 unit perumahan 18 Apr 2085 Tanah kosong dimiliki /176 Pajakan 99 tahun 5 63 untuk pembangunan tamat 28 unit perumahan 15 Ogos 2099 Tanah perindustrian 2.56/ Pajakan 60 tahun dan bangunan tamat 24 Nov 2059 Tanah perindustrian /2,344 /857 Pajakan 60 tahun 26 9,488 dan bangunan yang tamat digunakan sebagai 30 Jan 2041 pejabat dan kilang Bangunan kilang/kilang /5 /5 Pajakan 60 tahun kayu kumai tamat 30 Jan 2041 w w w. s i n d o r a. c o m. m y 163

131 senarai hartanah Kumpulan Jangkaan Nilai K keluasan Kawasan usia Buku Bersih Tanah Dibina harta 31 Disember Lokasi/ (Hektar/ (Hektar Hakmilik/ Milikan 2006 Keterangan Tanah Alamat 000 Kps.) 000 Kps.) Pegangan (Tahun) RM unit banglo dua tingkat No. 1, /6 /3 Pajakan 99 tahun (kediaman anggota pekerja) Jalan Temenggong 10 tamat Bandar Tenggara 18 Apr Kulai Johor Mukim Plentong No. 6, 6A, 6B, 37, 37A, 37B, Johor Bahru, Johor 41, 41A, 41B Jalan Perang 4 unit rumah kedai Taman Pelangi /8 /18 Milikan Bebas 25 3,040 tiga tingkat Johor Bahru Mukim Tebrau No. 17, Jalan Resam / /2.5 Pegangan Pajak PTD 57100, Greenplain Greenplains Ulu Tiram Taman Bukit Tiram Johor Ulu Tiram Ulu Tiram, Johor Tepak Marketing Mukim Plentong /2.41 Pajakan 60 tahun Mukim Plentong Plo 398 /25.9 tamat Plo 398, Jalan Perak Jalan Perak 18 Apr 2050 Kaw. Perindustrian Kaw. Perindustrian Pasir Gudang Johor Pasir Gudang, Johor Tepak Marketing Mukim Plentong /2.41 Pajakan 60 tahun Mukim Plentong Plo 399 /25.9 tamat Plo 399, Jalan Perak Jalan Perak 18 Apr 2050 Kaw. Perindustrian Kaw. Perindustrian Pasir Gudang Johor Pasir Gudang, Johor Wisma Pro Office No. 6 Jln SBC 6 /2.8 Milikan bebas 2 4,408 Pro Office Solutions Sdn Bhd Taman Sri Batu Caves HSD , PT Batu Caves Mukim Batu Caves Selangor Daerah Gombak, Selangor 164 Sindora Berhad (13418-K)

132 proxy form I/We* of (FULL NAME IN CAPITAL LETTERS) (ADDRESS) being a member/members* of SINDORA BERHAD, hereby appoints/appoint* the Chairman of the meeting or of (FULL NAME) as my/our* Proxy to attend and vote for me/us* and on my/our* behalf at the Thirty Fourth (34th) Annual General Meeting of the Company to be held on Wednesday, 27 June 2007 at noon or at any adjournment thereof. Should you desire to direct your Proxy how to vote on the Resolutions set out in the Notice of Meeting and as summarised below, please indicate with an X in the appropriate space. If no specific direction as to voting is given, the Proxy will vote or abstain at his/her* discretion. RESOLUTION for AGAINST No. 1 To receive and adopt the Report and Audited Financial Statements (Resolution 1) No. 2 To approve final dividend (Resolution 2) No. 3 To re-elect the following Directors: i. Tan Sri Dato Muhammad Ali Hashim (Resolution 3) ii. Kua Hwee Sim (Resolution 4) iii. Tan Sri Datuk Arshad Ayub (Resolution 5) No. 4 To approve Directors Fees (Resolution 6) No. 5 To re-appoint Messrs KPMG and Auditors (Resolution 7) No. 6 To renew Share Buy-Back authority (Resolution 8) No. 7 To approve issuance of shares (Resolution 9) * Delete where applicable Number of Shares held (units) Signed this day of Signature of Shareholder(s)/ Common Seal of Appointer Notes: 1. A Member who is entitled to attend and vote at this meeting, is entitled to appoint a proxy and vote instead of him. A proxy may but need not be a Member of the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a Corporation/Company either under seal or in some other manner approved by its Board of Directors. Where a member appoints two proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. 3. The instrument appointing a proxy must be deposited at the registered office of the Company, at 13th Floor, Menara Johor Corporation, KOTARAYA, Johor Bahru, Johor not less than forty eight (48) hours before the time appointed for holding the meeting or any adjournment thereof. w w w. s i n d o r a. c o m. m y

133 SINDORA BERHAD 13th Floor, Menara Johor Corporation KOTARAYA, Johor Bahru Johor STAMP

134 borang proksi Saya/Kami* dari (nama penuh dengan huruf besar) (alamat) sebagai ahli/ahli-ahli* syarikat SINDORA BERHAD, dengan ini melantik Pengerusi Mesyuarat atau dari dari (nama penuh) sebagai Proksi saya/kami* untuk menghadiri dan mengundi mengikut arahan yang tertentu di atas resolusi-resolusi bagi pihak saya/kami* di dalam Mesyuarat Agung Tahunan Yang Ke Tiga Puluh Empat (34) yang akan diadakan pada hari Rabu, 27 Jun 2007, jam tengahari dan sebarang penangguhan mesyuarat. Jika anda ingin mengarahkan Proksi Syarikat anda mengikut arahan yang tertentu di atas resolusi-resolusi yang tercatat di dalam Notis Mesyuarat, tandakan X di tempat yang berkenaan. Jika arahan tertentu tidak diberi, Proksi Syarikat anda akan mengundi mengikut budibicaranya sendiri. RESOLusi menyokong menentang No. 1 Menerima dan meluluskan Laporan dan Penyata Kewangan Beraudit (Resolusi 1) No. 2 Meluluskan dividen akhir (Resolusi 2) No. 3 Melantik semula Pengarah-pengarah berikut: i. Tan Sri Dato Muhammad Ali Hashim (Resolusi 3) ii. Kua Hwee Sim (Resolusi 4) iii. Tan Sri Datuk Arshad Ayub (Resolusi 5) No. 4 Meluluskan Yuran Pengarah (Resolusi 6) No. 5 Melantik semula Tetuan KPMG sebagai Juruaudit (Resolusi 7) No. 6 Memperbaharui bidangkuasa membeli-balik Saham (Resolusi 8) No. 7 Meluluskan Penerbitan Saham-saham (Resolusi 9) * Potong yang tidak berkenaan Bilangan Saham (Unit) Ditandatangani pada haribulan Tandatangan Pemegang Saham/ Cop Mohor Pelantik Nota: 1. Seorang Ahli yang berhak menghadiri dan mengundi dalam Mesyuarat ini berhak melantik seorang proksi untuk menghadiri bagi pihak dirinya. Seorang proksi tidak semestinya seorang Ahli Syarikat. 2. Suratcara perlantikan proksi hendaklah dibuat secara bertulis oleh pelantik atau wakil mutlak yang berkuasa atau jika pelantik adalah sebuah Perbadanan/Syarikat, suratcara mestilah disempurnakan di bawah meteri Perbadanan/Syarikat atau lain-lain cara yang diluluskan oleh Lembaga Pengarah. Apabila seorang Ahli melantik dua orang proksi perlantikan tersebut tidak akan diterima sebagai sah melainkan setelah dinyatakan bilangan saham yang akan diwakili oleh mereka. 3. Suratcara perlantikan proksi hendaklah sampai di Pejabat Berdaftar Syarikat, di Tingkat 13, Menara Johor Corporation, KOTARAYA, Johor Bahru, Johor tidak lewat dari empat puluh lapan (48) jam sebelum Mesyuarat ditetapkan atau sebarang penangguhan mesyuarat. w w w. s i n d o r a. c o m. m y

135 SINDORA BERHAD Tingkat 13, Menara Johor Corporation KOTARAYA, Johor Bahru Johor SETEM

136 SINDORA BERHAD (13418-K) 9C Level 9, Menara Ansar 65, Jalan Trus, Johor Bahru, Johor, Malaysia Tel : Fax :