A N N U A L

20

00

A

nn

ua

l

Re

po

rt

G

UT

HR

IE R

OP

EL

BE

RH

AD

(6710-T

)

GUTHRIE ROPEL BERHAD(6710-T)

(A Member Of The Kumpulan Guthrie Group)Wisma Guthrie, 21 Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur, Malaysia. Tel: 603-254 1644 Fax: 603-255 7934 Telex: 603-MA 30346

GUTHRIE ROPEL BERHAD(6710-T)

(A Member Of The Kumpulan Guthrie Group)

2 0 0 0 REPORT

ofSynergy

Cultures

Notice of Annual General Meeting 2

Statement Accompanying Notice of Annual General Meeting 3

Group Performance Highlights 4

Group Quarterly Performance 5

Financial Calendar 5

Group Five-Year Financial Review 6

Group Financial Highlights in Charts 7

Group Five-Year Plantation Review 8

Group Plantation Highlights in Charts 9

Statement of Value Added 10

Structure of the Guthrie Ropel Group 11

Corporate Information 12

Profile of Directors 14

Audit Committee 17

Corporate Governance 18

Statement of Directors’ Responsibilities in Respect of the Audited Financial Statements 19

Statement on Internal Controls 20

Chairman’s Statement 22

Health, Safety and Environment Policy 34

Financial Statements 35

Properties of the Group 66

Area Statement 68

Location of Estates, Mills and Factories 69

Analysis of Shareholdings 70

Share Prices and Volume Traded 72

Group Directory 73

Proxy Form •

contents

2000

annu

al r

epor

tthe coverThe Kumpulan Guthrie Group, which includes

the Guthrie Ropel Group, is set to harness the

synergy of two neighbouring cultures towards

building a more progressive region.

GUTH

RIE

ROPE

L BE

RHAD

2

Ordinary Business:● To receive and adopt the Report of the Directors and the Audited Accounts for the year ended 31 December 2000 and the Auditors’

Report thereon.

● To approve the payment of a special tax exempt dividend of 5% (5 sen per RM1.00 share) and a final dividend of 10%

(10 sen per RM1.00 share) less 28% Malaysian income tax.

● To re-elect the following Directors who retire by rotation in accordance with Article 86A of the Company’s Articles of Association:

i Encik Ong Euwan George

ii Puan Norzilah Megawati Dato’ Abdul Rahman

● To consider and, if thought fit, to pass the following Resolution:

“That pursuant to Section 129(6) of the Companies Act, 1965, YBhg. Datuk Abdullah Ali be reappointed a Director of the Company

to hold office until the next Annual General Meeting.”

● To reappoint Messrs. Ernst & Young as Auditors and to authorise the Directors to fix their remuneration.

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

Shareholders are reminded that pursuant to the Securities Industry (Central Depositories) (Amendment) (No. 2) Act, 1998 which came

into force on 1 November 1998, all shares not deposited with Malaysian Central Depository Sdn Berhad by 12.30 p.m. on 1 December

1998 and not exempted from Mandatory Deposit, have been transferred to the Minister of Finance (‘MOF‘). Accordingly, the eligibility

to attend this Meeting for such undeposited shares will be the MOF.

Notice is also hereby given that the Register of Members of the Company will be closed from 15 June 2001 to 21 June 2001

(both dates inclusive) to determine shareholders’ entitlements to the dividend payment. The special and final dividends, if approved by the

shareholders, will be paid on 13 July 2001 to shareholders whose names appear in the Register of Members (for those exempted from

Mandatory Deposit) and the Record of Depositors on 14 June 2001.

noticeOF ANNUAL GENERAL MEETING

Notice is hereby given that the Thirty Fifth Annual General Meeting of Guthrie Ropel

Berhad will be held at the Ballroom, Mezzanine Floor, Hotel Equatorial, Jalan Sultan

Ismail, 50250 Kuala Lumpur, Malaysia on Thursday, 7 June 2001 at 10.30 a.m. for

the following purposes:

3

Further notice is hereby given that a Depositor shall qualify for

dividend entitlement only in respect of:

● Shares deposited into the Depositor’s Securities Account before 12.30 p.m.

on 12 June 2001 (in respect of shares which are exempted from Mandatory

Deposit);● Shares transferred into the Depositor’s Securities Account before 12.30

p.m. on 14 June 2001 in respect of ordinary transfers; and● Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement

basis according to the Rules of the Kuala Lumpur Stock Exchange.

Shareholders are reminded that pursuant to the Securities Industry

(Central Depositories) (Amendment) (No. 2) Act, 1998 which came into force

on 1 November 1998, all shares not deposited with Malaysian Central

Depository Sdn. Berhad by 12.30 p.m. on 1 December 1998 and not exempted

from Mandatory Deposit, have been transferred to the MOF. Accordingly, the

dividends for such undeposited shares will be paid to the MOF.

By Order of the Board

Halimatus Saadiah Abdul Rabah

Secretary (LS 01389)

Megat Nazirudin Megat Shamsuddin

Secretary (LS 00139)

10 May 2001

Kuala Lumpur

Malaysia

Note:A member entitled to attend and vote at the above Meeting may appoint a proxy to attendand vote in his stead. A proxy need not be a member of the Company. The instrumentappointing the proxy must be deposited with the Company’s Share Registrar, Malaysian ShareRegistration Services Sendirian Berhad, 7th Floor, Exchange Square, Bukit Kewangan,50200 Kuala Lumpur, not less than 48 hours before the time appointed for holding theMeeting or any adjournment thereof.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERALMEETING PURSUANT TOPARAGRAPH 8.28(2) OF THELISTING REQUIREMENTS OF KUALA LUMPUR STOCK EXCHANGE

Particulars of attendance of the Directors standingfor re-election or reappointment at the four BoardMeetings held during the financial year ended 31 December 2000.

Ong Euwan GeorgeAttended Board Meetings held on 28/2/2000, 29/5/2000and 28/11/2000, all at 9.30 a.m. at the Board Room, 2nd Floor, Wisma Guthrie, 21 Jalan Gelenggang,Damansara Heights, 50490 Kuala Lumpur

Attended Board Meeting held on 28/8/2000 at 8.30 a.m.at the Board Room, 2nd Floor, Guthrie Pavillion,Persiaran B, Seksyen U8, Bukit Jelutong, 40706 ShahAlam, Selangor Darul Ehsan

Norzilah Megawati Dato’ Abdul RahmanAttended Board Meetings held on 28/2/2000 and29/5/2000, all at 9.30 a.m. at the Board Room, 2nd Floor,Wisma Guthrie, 21 Jalan Gelenggang, DamansaraHeights, 50490 Kuala Lumpur

Attended Board Meeting held on 28/8/2000 at 8.30 a.m.at the Board Room, 2nd Floor, Guthrie Pavillion,Persiaran B, Seksyen U8, Bukit Jelutong, 40706 ShahAlam, Selangor Darul Ehsan

Datuk Abdullah AliAttended Board Meetings held on 28/2/2000, 29/5/2000and 28/11/2000, all at 9.30 a.m. at the Board Room, 2nd Floor, Wisma Guthrie, 21 Jalan Gelenggang,Damansara Heights, 50490 Kuala Lumpur

Attended Board Meeting held on 28/8/2000 at 8.30 a.m.at the Board Room, 2nd Floor, Guthrie Pavillion,Persiaran B, Seksyen U8, Bukit Jelutong, 40706 ShahAlam, Selangor Darul Ehsan

4

G R O U P P E R F O R M A N C E H I G H L I G H T S

2000 1999 %RM’000 RM’000 +/(–)

FINANCIAL PERFORMANCERevenue 95,405 152,130 (37.3)Operating profit 1,936 49,823 (96.1)Profit before taxation 30,527 62,234 (50.9)Profit attributable to shareholders 28,382 60,759 (53.3)

Total assets 810,815 821,065 (1.2)Shareholders’ funds 755,355 759,001 (0.5)

Operating profit on revenue (%) 2.0 32.8 (93.9)Pre-tax profit on total assets (%) 3.8 7.6 (50.0)Pre-tax profit on average shareholders’ funds (%) 4.0 8.4 (52.4)Profit attributable to shareholders on average shareholders’ funds (%) 3.7 8.2 (54.9)

Earnings per share (sen) 22.3 47.8 (53.3)Dividend per share – gross (sen) 23.0 30.0 (23.3)Dividend cover (number of times) 1.1 2.0 (45.0)Net tangible assets per share (RM) 5.9 6.0 (1.7)

Revenue per RM of employment cost (RM) 3.5 5.7 (38.6)Value added per RM of employment cost (RM) 2.5 3.7 (32.4)

%2000 1999 +/(–)

PLANTATION PERFORMANCEOil PalmCrop – FFB (tonnes) – own 368,478 371,520 (0.8)

– outside 44,619 — 100.0

Yield per mature hectare (tonnes FFB) 19.70 20.28 (2.9)

Mill production (tonnes) – palm oil 74,084 62,669 18.2– palm kernel 26,149 21,964 19.1

Extraction rates (%) – palm oil 18.10 18.20 (0.5)– palm kernel 6.40 6.40 —

Average selling prices (RM per tonne ex-mill) – palm oil 1,015 1,486 (31.7)– palm kernel 716 1,066 (32.8)

Profit per mature hectare (RM) 326 2,881 (88.7)

RubberCrop – (’000 kgs) 2,388 5,742 (58.4)

Yield per mature hectare (kgs) 1,456 1,787 (18.5)

Average selling price – all grades (sen per kg) 250 250 —

(Loss)/Profit per mature hectare (RM) (4) 110 (39.1)

G R O U P Q U A R T E R L Y P E R F O R M A N C E

F I N A N C I A L C A L E N D A R

5

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2000RM’000 RM’000 RM’000 RM’000 RM’000

FINANCIAL PERFORMANCERevenue 27,410 23,644 22,194 22,157 95,405

Operating profit/(loss) 4,500 1,344 126 (4,034) 1,936

Profit before taxation 9,309 2,913 3,139 15,166 30,527

Profit attributable to shareholders 8,916 2,278 1,297 15,891 28,382

Earnings per share (sen) 7.0 1.8 1.0 12.5 22.3

Dividend per share – gross (sen) — 8.0 — 15.0 23.0

PLANTATION PRODUCTIONOil palm

Crop – FFB (tonnes) – own 81,401 89,244 98,555 99,278 368,478– outside 6,696 11,242 14,044 12,637 44,619

Mill production (tonnes) – palm oil 15,786 17,953 20,018 20,327 74,084– palm kernel 5,830 6,326 6,893 7,100 26,149

RubberCrop (’000 kgs) 730 604 613 441 2,388

FINANCIAL YEAR END 31 December 2000

ANNOUNCEMENT OF RESULTSFirst Quarter 29 May 2000Second Quarter 28 August 2000Third Quarter 28 November 2000Fourth Quarter 27 February 2001

PUBLISHED ANNUAL REPORT AND FINANCIAL STATEMENTSDespatch Date 10 May 2001

ANNUAL GENERAL MEETING 7 June 2001

DIVIDENDSInterim • Declaration 28 August 2000

• Record Date 28 September 2000• Payment Date 20 October 2000

Special and Final • Recommendation 27 February 2001• Record Date 14 June 2001• Payment Date 13 July 2001

6

G R O U P F I V E - Y E A R F I N A N C I A L R E V I E W

2000 1999 1998 1997 1996RM’000 RM’000 RM’000 RM’000 RM’000

REVENUEPalm products 87,575 122,301 134,089 97,030 88,125Rubber 7,830 29,829 23,446 34,383 36,494

95,405 152,130 157,535 131,413 124,619

RESULTSPalm products 5,974 52,317 66,862 41,316 33,251Rubber (4,038) (2,494) (1,314) 2,861 7,124

Plantation profit 1,936 49,823 65,548 44,177 40,375Investment income 159 1,192 1,152 464 954Finance income (net) 7,135 7,470 11,909 7,208 4,866Exceptional items 15,360 625 275 2,870 2,761Share of profit/(loss) in associated companies 5,937 3,124 36 (27) 715

Profit before taxation 30,527 62,234 78,920 54,692 49,671Profit attributable to shareholders 28,382 60,759 55,201 44,396 35,783

ASSETS EMPLOYEDProperty, plant and equipment 616,779 617,998 626,984 412,678 411,502Land held for development 13,152 14,903 14,874 2,846 2,389Associated companies 13,141 21,233 10,923 11,061 12,232Unquoted investments 258 258 258 258 258Net current assets 137,284 130,686 99,802 70,699 52,865

780,614 785,078 752,841 497,542 479,246

CAPITAL EMPLOYEDShare capital 127,036 127,036 127,036 127,036 127,036Reserves 628,319 631,965 601,136 354,609 332,876

Shareholders’ funds 755,355 759,001 728,172 481,645 459,912Deferred liabilities 25,259 26,077 24,669 15,897 19,334

780,614 785,078 752,841 497,542 479,246

PER SHARE STATISTICSEarnings – net (sen) 22.3 47.8 43.4 34.9 28.0Dividend – gross (sen) 23.0 30.0 27.0 25.0 23.0Dividend cover (number of times) 1.1 2.0 2.2 2.0 1.7Net tangible assets (RM) 5.9 6.0 5.7 3.8 3.6

financial

highlightsEarnings Per Share(Sen)

96

28.0

97

34.9

98

43.4

99

47.8

00

22.3

Dividend Per Share(Sen)

96

23.0

97

25.0

98

27.0

99

30.0

00

23.0

Net Tangible Assets Per Share(RM)

96

3.6

97

3.8

98

5.7

99

6.0

005.

9

Revenue(RM Million)

96

124.

62

97

131.

41

98

157.

54

99

152.

13

00

95.4

1

Profit Before Taxation(RM Million)

96

49.6

7

97

54.6

9

98

78.9

2

99

62.2

3

00

30.5

3

Shareholders’ Funds(RM Million)

96

459.

91

97

481.

65

98

728.

17

99

759.

00

00

755.

36

group financial

highlights in charts

8

G R O U P F I V E - Y E A R P L A N T A T I O N R E V I E W

2000 1999 1998 1997 1996

OIL PALMCrop – FFB (tonnes) – own 368,478 371,520 329,738 339,653 328,531

– outside 44,619 — — — —

Mature hectares 18,706 18,320 17,670 17,076 17,124

Immature hectares 3,988 2,865 2,998 3,177 3,190

Total planted hectares 22,694 21,185 20,668 20,253 20,314

Yield per mature hectare (tonnes FFB) 19.70 20.28 18.66 19.89 19.19

Mill production (tonnes) – palm oil 74,084 62,669 59,294 55,688 55,135

– palm kernel 26,149 21,964 20,186 18,131 18,141

Extraction rates (%) – palm oil 18.10 18.20 18.50 19.00 19.08

– palm kernel 6.40 6.40 6.30 6.19 6.28

Average selling prices

– Palm oil (RM per tonne ex-mill) 1,015 1,486 1,845 1,284 1,182

– Palm kernel (RM per tonne ex-mill) 716 1,066 982 740 805

– FFB (RM per tonne ex-estate) 204 233 467 265 230

Profit per mature hectare (RM) 326 2,881 3,798 2,420 1,942

RUBBERCrop – (‘000 kgs) 2,388 5,742 5,613 5,068 5,540

Mature hectares 1,640 3,214 3,756 3,825 3,792

Immature hectares — — 163 349 606

Total planted hectares 1,640 3,214 3,919 4,174 4,398

Yield per mature hectare (kgs) 1,456 1,787 1,494 1,325 1,461

Average selling price – all grades (sen per kg) 250 250 281 319 402

(Loss)/Profit per mature hectare (RM) (4) 110 221 748 1,879

Note:

Area statistics shown are weighted average figures.

plantation

highlightsgroup plantation

highlights in charts

Rubber Planted Area /Production(’000 Hectares / ’000 Kgs)

Immature Area in (’000) Hectares

8

12,000

Mature Area in (’000) Hectares

Production in (’000) Kgs

96

0.61

3.79

5.54

97

0.35

3.83

5.07

98

0.16

3.76

5.61

99

3.21

5.74

00

1.64

2.39

Yield Per Mature Hectare Of Rubber(Kg)

Yield Per Mature Hectare (Kgs)

96

1,46

1

97

1,32

5

98

1,49

4

99

1,78

7

00

1,45

6

Average Selling Price Realised For Rubber (sen)

Rubber (Sen Per Kg)

96

402

97

319

98

281

99

250

00

250

Oil Palm Planted Area / FFB Production(’000 Hectares / ’000 Tonnes)

Immature Area in (’000) Hectares

50

1,000

Mature Area in (’000) Hectares

Production in (’000) Tonnes

96

3.19

17.1

2 328.

53

97

3.18

17.0

833

9.65

98

3.00

17.6

732

9.74

99

2.87

18.3

237

1.52

00

4.00

18.7

136

8.48

Yield Per Mature Hectare / Extraction Rates(Tonnes FFB / %)

Yield Per Mature Hectare (Tonnes FFB)

Extraction Rate (%) - Palm Oil

Extraction Rate (%) - Palm Kernel

96

19.1

919

.08

6.28

97

19.8

919

.00

6.19

98

18.6

618

.50

6.30

99

20.2

818

.20

6.40

00

19.7

018

.10

6.40

Average Selling Prices Realised (Ex Mill) For Palm Oil And Palm Kernel (RM)

Palm Oil (RM Per Tonne)

Palm Kernel (RM Per Tonne)

96

1,18

280

5

97

1,28

474

0

98

1,84

598

2

99

1,48

61,

066

00

1,01

571

6

10

S T A T E M E N T O F V A L U E A D D E D

2000 1999RM’000 RM’000

Revenue 95,405 152,130Purchase of goods and services (56,341) (64,043)

Value added by the Group companies 39,064 88,087Investment income 159 1,192Finance income (net) 7,135 7,470Exceptional items 15,360 625Share of profit in associated companies 5,937 3,124

67,655 100,498

DISTRIBUTIONTo Employees

Employment cost 27,304 26,857

To GovernmentTaxation 2,145 1,475

To ShareholdersDividends 25,662 29,930

Retained for re-investment and future growth– Depreciation/Amortisation 9,824 11,407– Retained profit 2,720 30,829

67,655 100,498

Retained for re-investment and future growth– Depreciation / Amortisation and retained profit 12,544

To Shareholders– Dividends 25,662

To Government– Taxation 2,145

To Employees– Employment cost 27,304

2000

Retained for re-investment and future growth– Depreciation / Amortisation and retained profit 42,236

To Shareholders– Dividends 29,930

To Government– Taxation 1,475

To Employees– Employment cost 26,857

1999

DISTRIBUTION OF VALUE ADDED (RM’000)

GUTHRIE ROPEL BERHAD (Quoted on KLSE)

Kumpulan Temiang Sdn. Bhd.

Kumpulan Guthrie Berhad

100%

57.85%

Ladang Bertam

Ladang Cha’ah

Ladang Lambak / Elaeis

Ladang Pekan

Ladang Sembrong

Ladang Sungai Gemas

Ladang Sungai Labis

Ladang Tun Dr. Ismail

Kilang Kelapa Sawit Cha’ah

Ladang Bukit Asahan

Ladang Pengkalan Bukit

Ladang Temiang Renchong

Ladang Ulu Remis

Kilang Kelapa Sawit Rantau

42.15%

Public

Hock Guan Seng Plantations Sdn. Bhd.

Ladang Cenas Sdn. Bhd.

Guthrie Ropel Development Sdn. Bhd.

Guthrie Rubber Processing Sdn. Bhd.

100%

100%

100%

Guthrie Palm Products Sdn. Bhd.33%

Guthrie Assets Management Sdn. Bhd.33%

33%

Land held for development

Ladang Hock Guan Seng

Ladang Cenas

Kilang Getah Bedong

Kilang Getah Siliau

Kilang Getah Tebong

Ladang Bertam

Ladang Lambak / Elaeis

Ladang Pengkalan Bukit

11

S T R U C T U R E O F T H E G U T H R I E R O P E L G R O U P

boardof Directors SecretariesHalimatus Saadiah Abdul Rabah (LS 01389)Megat Nazirudin Megat Shamsuddin (LS 00139)

Managing AgentKumpulan Guthrie BerhadWisma Guthrie21, Jalan GelenggangDamansara Heights50490 Kuala Lumpur, MalaysiaTelephone : 603-254 1644Facsimile : 603-255 7934Telex : MA 30346Web Site : www.kumpulanguthrie.com.my

Tan Sri Dato’ Abdul Khalid Ibrahim

Ghazali Awang

Norzilah Megawati Dato’ Abdul Rahman

ChairmanTan Sri Dato’ Abdul Khalid Ibrahim

DirectorsDatuk Abdullah AliAdam @ Adham AbdullahHenry Sackville BarlowGhazali AwangNorzilah Megawati Dato’ Abdul RahmanOng Euwan George

C O R P O R A T E I N F O R M A T I O N

12

SeniorManagementof Managing AgentTan Sri Dato’ Abdul Khalid IbrahimGroup Chief Executive

Ghazali AwangExecutive Director,

Finance & Corporate Services

Ali Haji AhmadDirector, Plantation

Wong Poh WengDirector, Manufacturing &

Engineering Services

Othman WalatDirector, Plantation Advisory &

Quality Assurance

Norzilah Megawati Dato’ Abdul RahmanDirector, Corporate Business

Development & Human Resource

Wan Abdullah Wan IbrahimActing Director, Property

Registered OfficeWisma Guthrie21, Jalan GelenggangDamansara Heights50490 Kuala Lumpur, MalaysiaTelephone : 603-254 1644Facsimile : 603-255 7934Telex : MA 30346

AuditorsErnst & Young4th Floor, Kompleks AntarabangsaJalan Sultan Ismail50250 Kuala Lumpur, Malaysia

Share RegistrarMalaysian Share Registration

Services Sendirian Berhad7th Floor, Exchange SquareBukit Kewangan50200 Kuala Lumpur, MalaysiaTelephone : 603-206 8099Facsimile : 603-206 3736/206 3731

Principal BankersMalayan Banking BerhadHSBC Bank Malaysia Berhad

Date and Placeof IncorporationIncorporated on 21 June 1966 in Malaysia

Stock ExchangeListingKuala Lumpur Stock Exchange

Ong EuwanGeorge

Henry SackvilleBarlow

Datuk Abdullah Ali

Adam @ Adham Abdullah

13

14

OF DIRECTORSProfile

Tan Sri Dato’ Abdul Khalid IbrahimAge 54. Malaysian. Non-Independent Non-Executive Director and Chairman

since 24 August 1994. Attended all the four Board Meetings held in the

financial year. Group Chief Executive Officer of Kumpulan Guthrie Berhad.

Chairman of Highlands & Lowlands Berhad, Kontena Nasional Berhad,

Amanah Capital Malaysia Berhad and Amanah Smallcap Fund Berhad. Also

Director of Amanah General Insurance Berhad, Malaysia Discount Berhad,

SIRIM Berhad, Perbadanan Usahawan Nasional Berhad and Titan

Petrochemicals & Polymers Berhad. Also on the Board of Directors of

Institute of Strategic and International Studies, Malaysia and National

Productivity Centre, and member of Executive Committee of Unit Trust Fund

of Islamic Development Bank, Jeddah. Holds a Bachelor of Arts (Hons)

Economics degree from the University of Malaya and a Masters in Business

Administration from the University of Queensland, Australia. Served as a

teacher, lecturer, credit officer, corporate finance officer and held various

managerial positions in Permodalan Nasional Berhad including that of Group

Chief Executive. Not related to any director and/or major shareholder of

Guthrie Ropel Berhad except by virtue of being the Group Chief Executive

Officer and substantial shareholder of Kumpulan Guthrie Berhad. Does not

have any conflict of interest with Guthrie Ropel Berhad. He was awarded

Malaysia’s CEO of the Year 1997 Award in December 1998.

15

Ghazali AwangAge 54. Malaysian. Non-Independent Non-Executive Director since 22 November 1994. Attended all the four Board Meetings held in thefinancial year. Executive Director, Finance & Corporate Services ofKumpulan Guthrie Berhad. Also Board member of Highlands &Lowlands Berhad and BIMB Unit Trust Management Berhad. Holds aBachelor of Commerce from the University of Newcastle, Australia anda Post Graduate Diploma in Islamic Studies from the InternationalIslamic University. A Chartered Accountant (Australia) and a RegisteredAccountant with the Malaysian Institute of Accountants. Had served asan Accountant with Wilson Bishop Bowes & Craig, Treasury Accountantwith Royal Customs & Excise Department, Senior Treasury Accountantwith Federal Treasury and Accountant General Department, ChiefAccountant with Amanah Saham Nasional Berhad, Senior Manager,Finance & Administration with Permodalan Nasional Berhad and AuditManager/Chief Accountant with Shell Malaysia Ltd./Shell Malaysia. Notrelated to any director and/or major shareholder of Guthrie RopelBerhad, except by virtue of being an Executive Director and a minorityshareholder of Kumpulan Guthrie Berhad. Does not have any conflict ofinterest with Guthrie Ropel Berhad.

Datuk Abdullah AliAge 78. Malaysian. Independent Non-Executive Director since

1 July 1979. Attended all the four Board Meetings held in the

financial year. Chairman, Audit Committee of Guthrie Ropel

Berhad. Chairman of The KAB Group Berhad. Also President of

the Malaysian Branch of the Royal Asiatic Society. Holds a

Diploma in Arts from Raffles College, Singapore. Studied

Political Science at the Australian National University, Australia

and Economics at the London School of Economics, England.

Had served with The Johor Civil Service, The Malayan Civil

Service and The Malaysian Foreign Service. Prior to retirement

from Government service in June 1979, was Malaysia’s High

Commissioner to the United Kingdom and Malaysia’s

Ambassador to Ireland. Not related to any director and/or major

shareholder of Guthrie Ropel Berhad. Does not have any conflict

of interest with Guthrie Ropel Berhad.

Adam @ AdhamAbdullahAge 65. Malaysian. Independent Non-Executive Director since

22 April 1994. Attended all the four Board Meetings held in the

financial year. Adviser, Kumpulan Guthrie Berhad. Member,

Audit Committee of Guthrie Ropel Berhad. Chairman of the

Board of Trustees of the Malayan Estates Staff Provident Fund.

Obtained Cambridge School Certificate from King George V,

Seremban. Has held various managerial positions in Golden

Hope Plantations Berhad. Not related to any director and/or

major shareholder of Guthrie Ropel Berhad, except by virtue of

being appointed an Adviser of Kumpulan Guthrie Berhad. Does

not have any conflict of interest with Guthrie Ropel Berhad.

Ong Euwan GeorgeAge 45. Malaysian. Non-Independent Non-Executive Directorsince 10 January 1996. Attended all the four Board Meetingsheld in the financial year. Senior Manager, Research &Technology Analysis of Permodalan Nasional Berhad. AlsoAlternate Director of Kumpulan Guthrie Berhad and Director ofMalaysia Aica Berhad and Hap Seng Consolidated Berhad.Studied Business Studies (Accounting) at Swinburne College ofTechnology, Australia. Registered Accountant with the MalaysianInstitute of Accountants and Fellow, Certified PractisingAccountants, Australia. Had served as Credit Controller withCharles Bradburne & Co. (1930) Sdn. Bhd. and has held variousmanagerial positions in Permodalan Nasional Berhad. Notrelated to any director and/or major shareholder of GuthrieRopel Berhad, except by virtue of being aSenior Manager of Permodalan NasionalBerhad. Does not have any conflict ofinterest with Guthrie Ropel Berhad.

Norzilah MegawatiDato’ Abdul RahmannAge 41. Malaysian. Non-Independent Non-Executive Directorsince 30 March 1994. Attended three Board Meetings held inthe financial year. Director, Corporate Business Development &Human Resource of Kumpulan Guthrie Berhad. AlsoDirector of Highlands & Lowlands Berhad andAlternate Director of Kumpulan Guthrie Berhad.Holds a degree in Law from the University ofMalaya. Had served as Executive in the areasof investment analysis, money market trading,corporate secretarial and legal work withPermodalan Nasional Berhad (PNB) and asManager, Group Chief Executive’s Office ofPNB. Not related to any director and/ormajor shareholder of Guthrie Ropel Berhad,except by virtue of being a DivisionalDirector of Kumpulan Guthrie Berhad.Does not have any conflict of interestwith Guthrie Ropel Berhad.

PROFILE OFDIRECTORSHenry SackvilleBarlowAge 56. Permanent resident in Malaysia. Independent Non-

Executive Director since 28 July 1994. Attended all the four

Board Meetings held in the financial year. Member, Audit

Committee of Guthrie Ropel Berhad. Businessman. Director

of HSBC Bank Malaysia Berhad and Golden Hope

Plantations Berhad. Also a Council Member of the

Incorporated Society of Planters and Honorary Secretary of

Heritage of Malaysia Trust. Holds a Bachelor and Masters

degree in Arts from University of Cambridge. A Fellow

Chartered Accountant of the Institute of Chartered

Accountants in England and Wales. Formerly, Finance

Director of Barlow Boustead Estates Agency Sdn. Bhd. and

Joint Managing Director of Highlands & Lowlands Berhad.

Not related to any director and/or major shareholder of

Guthrie Ropel Berhad. Does not have any conflict

of interest with Guthrie Ropel Berhad.

17

A U D I T C O M M I T T E E – Composition, Terms Of Reference and Functions

CompositionThe Board shall elect an Audit Committee, comprising at least three and not more than five directors, the majority of whomshall be independent of senior management and operatingexecutives and unencumbered by any relationships that might, inthe opinion of the Board of Directors, be considered to be aconflict of interest.

Primary PurposesThe Committee shall:

● Provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accountingand reporting practices of Guthrie Ropel Berhad and all itswholly and majority-owned subsidiary companies (Group).

● Maintain, through regularly scheduled meetings, a direct lineof communication between the Board and the externalauditors as well as internal auditors.

● Avail to the external and internal auditors a privateconfidential audience at any time they desire and requestthrough the Committee Chairman, with or without the priorknowledge of Management.

● Act upon the Board of Directors’ request to investigate andreport on any issues or concerns in regard to the managementof the Group.

● Review existing practices and recommend to Management toformalise an ethics code for all executives and members ofthe staff of the Group.

FunctionsThe Committee shall review, appraise and report to the Board on:

● The quality and effectiveness of the entire accounting andinternal control system.

● The adequacy of the audit effort by both the external auditorsand the internal auditors.

● The propriety of accounting policies adopted by Managementand accepted by the external auditors, where alternatives arealso acceptable.

● The adequacy of the disclosure of information essential to a fairand full presentation of the financial affairs of the Group.

● Any significant difficulties encountered or material discoveriesmade by the external auditors or internal auditors.

● The effects of any changes in accounting principles or of anydevelopments emanating from the accounting profession orany statutory authority.

● The firm of external auditors retained by the Group, and theCommittee’s recommendation to retain or replace such firm inthe ensuing year.

MeetingsThe Audit Committee held four meetings during the financial yearended 31 December 2000 with the Executive Director, Finance &Corporate Services, and the Senior Manager, Internal Audit of theManaging Agent, Kumpulan Guthrie Berhad, and the CompanySecretary in attendance. YBhg. Datuk Abdullah Ali and Tuan HajiAdam @ Adham Abdullah each attended three meetings whilstEncik Henry Sackville Barlow attended all four meetings of theAudit Committee in 2000. Representatives of the ExternalAuditors and other officers of the Managing Agent were alsoinvited to brief the Audit Committee on specific issues. Evaluationwas made of the audit planning strategy of the Internal Auditorsand that of the External Auditors to confirm the groundwork forthe annual audit of the Group. The Audit Committee reviewed andappraised the audit reports by the Internal Auditors, the variousinternal control systems in place and the financial accounts of theGroup. Special notice was taken of significant issues arising fromthe annual audit of the Group by the External Auditors. At theconclusion of each meeting, recommendations were made forManagement to improve on internal controls, procedures andsystems of the Group, wherever appropriate.

Reports/MinutesDetailed audit reports by the Internal Auditors together withresponses by Management are circulated to all members of theAudit Committee, the Group Chief Executive and DivisionalDirectors of the Managing Agent. Minutes of meetings of theAudit Committee are circulated to all members of the Board.

Members Of The Committee

Datuk Abdullah Ali* – Chairman

Adam @ Adham Abdullah*Henry Sackville Barlow*

* Independent Non-Executive DirectorsNotePursuant to the revamped Listing Requirements of the Kuala Lumpur Stock Exchange, with effect from 1 June 2001, Tuan Haji Adam@ Adham Abdullah will be deemed a Non-Independent Non-Executive Director by virtue of being an Adviser of Kumpulan GuthrieBerhad, the holding company of Guthrie Ropel Berhad.

GUTHRIE ROPEL BERHAD applies goodcorporate governance by having in place

the processes and structure to direct andmanage the business and affairs of theCompany and its subsidiary companies

(“the Group”) towards enhancing businessprosperity and

corporateaccountability with

the ultimateobjective of realising long term shareholder

value, whilst taking into account theinterests of other stakeholders.The Board of Directors plays a primary role in

corporate governance by setting out the

strategic direction of the Group, establishing

goals and monitoring the achievement of the

goals. The Board of Directors comprises seven

non-executive Directors. Presently, three of the

non-executive Directors are independent

Directors. The Directors combined in them

expertise and experience in various fields

such as economics and investment, public

services, accounting and legal. Their expertise,

experience and background result in thorough

examination and deliberations of the various

issues and matters affecting the Group.

corporateGOVERNANCE

18

The approval of the Annual Group Budget is a significant annual

exercise by the Board in establishing the goals of the Group for

the current year. The Annual Group Budget involves an assessment

of the projected performance of the Group’s business. The Annual

Budget is revised quarterly based on the actual performance of the

preceding quarter and expectations in performance for the

subsequent quarters.

A yearly audit planning memorandum submitted by the External

Auditors of the Group to the Audit Committee sets out a Strengths,

Weaknesses, Opportunities and Threats (SWOT) Analysis for the

Group which identifies and highlights the possible options that can

be implemented to mitigate the impact of any business risks.

The External Auditors annually also issue a Management Letter

raising issues of risks affecting the operations of the Group.

The Board addresses and monitors the risks and concerns affecting

the Group through the various committees that it, as well as the

Board of the parent holding company, have established.

One third of the members of Board of Directors are required to

retire at every Annual General Meeting and be subject to

re-election. Directors who are over 70 years of age retire at every

Annual General Meeting and are subject to re-appointment by the

shareholders of the Company.

The remuneration of Directors which has been approved earlier

by shareholders is RM15,000 per annum for each Director.

The parent holding company, Kumpulan Guthrie Berhad, is the

Managing Agent for the operations of the Group and the resources

of the parent holding company are utilised in ensuring good

corporate governance.

The Board of Directors meets on a scheduled basis, at least four

times a year. At each meeting the Board considers the financial

statements and results of the Group for the period ended for each

quarter, the performance of the business of the Group, policies and

strategic issues affecting the Group’s business and factors imposing

potential risks in the business of the Group. Directors from time to

time are brought to the locations of specific estates to have a

thorough understanding of their operations. The Chairman of the

Company who is also the Group Chief Executive of the parent

holding company, Kumpulan Guthrie Berhad, has the principal

responsibility of explaining, clarifying and informing matters to the

Board of Directors.

19

● the Group, through the various committees that it, as well asthe Board of the parent holding company, had established, hasbeen able to identify business risks and ensure theimplementation of appropriate measures to manage these risks.A more structured risk management process, however, wouldneed to be established to better identify, monitor and managethe business risks affecting the Group.

Investors and Shareholders RelationshipThe Management of the Kumpulan Guthrie Group, which includesthe Guthrie Ropel Group, recognises the need for an independentthird party assessment of the Kumpulan Guthrie Group and itconducts briefings on an annual basis to analysts on the results,performance and the potential of new developments of the Group.The briefings enable a direct and frank dialogue to be establishedon the affairs of the Group with persons who are highly focusedon business affairs of corporations.

The importance of keeping shareholders informed of developmentsconcerning the Group is high on the agenda. Whilst majorshareholders have their nominees on the Board, the Group ensuresthat the minority shareholders are not left behind. The Groupreaches out to each and every shareholder through its distributionof the annual and interim reports. Much effort is undertaken by theCompany to produce an annual report which is not onlyinformative with facts and figures, and statutory reports anddisclosures, but also reader-friendly. The Board of Directorsencourages full participation by shareholders at every AnnualGeneral Meeting of the Company and every opportunity is givento the shareholders to ask questions and seek clarification on thebusiness and performance of the Group.

Pre-arranged private audience with the management and/or privatevisits to certain operating centres of the Group, upon requests, arealso available to enable shareholders and investors to have a betterunderstanding of the Group’s activities.

The Kumpulan Guthrie Group has also set up a web site to linkand reach out globally to all interested parties. Efforts are beingundertaken to update the web site with comprehensive informationon the Group.

Compliance with the Codeon Corporate GovernanceThe Group, through the shared resources of its parent holdingcompany, was substantially in compliance throughout 2000 withthe principles of corporate governance and the best practices incorporate governance, with the exceptions set out below:

● appointment of a senior independent non-executive director towhom concerns may be conveyed has not been made as it isbelieved to be not necessary since the Chairman encouragesfull discussion and deliberation of issues affecting the Groupby all the Board members.

● establishment of a Nomination Committee has not beenundertaken as there was no necessity to appoint new directors.No review was done on the present members of the Board ofDirectors as the mix of experience and expertise of the currentnumber of Directors are considered sufficient and optimum inaddressing the issues affecting the Group.

Statement Of Directors’Responsibilities In

Respect Of The AuditedFinancial Statements

Directors are required by Company Law to prepare financial

statements for each financial year which give a true and fair

view of the state of affairs of the Group and of the Company

at the end of the financial year and of the results of the Group

and of the Company for the financial year then ended.

In preparing those financial statements, the Directors have:

● adopted suitable accounting policies and then apply them

consistently;

● made judgements and estimates that are prudent and

reasonable;

● ensured applicable accounting standards have been

followed, subject to any material departures disclosed and

explained in the financial statements; and

● prepared the financial statements on the going concern

basis unless it is inappropriate to presume that the Group

and the Company will continue in business.

The Directors are responsible for keeping proper accounting

records which disclose with reasonable accuracy at any time

the financial position of the Group and of the Company and to

enable them to ensure that the financial statements comply

with the Companies Act, 1965. The Directors are also

responsible for safeguarding the assets of the Group and of the

Company and, hence, for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

Internal

20

Board CommitteesThe Board of Directors of the parent holding company has

established an Executive Committee and a Remuneration Committee.

Two members of the Board of Directors of the Company, who are

also Directors of the parent holding company, are members of the

Executive Committee. The Executive Committee meets, at least,

every quarter and examines in depth strategic matters, policies and

business risks which may affect the Kumpulan Guthrie Group, of

which the Guthrie Ropel Group is a member, such as any new

substantial investment proposed to be undertaken by the Group and

reviews the business risks and performance of those investments

which have been approved. It is also entrusted to review the terms

and conditions of service and policies affecting employees of the

Group as a whole.

The Remuneration Committee is entrusted, among others,

with examining the remuneration packages of Senior Executives of

the Group.

The Board of Directors has also established an Audit Committee.

The members and the role and function of the Audit Committee

are set out in detail on page 17 of the Annual Report. The Audit

Committee, by consideration of the auditors’ reports, both internal

and external, is able to gauge the effectiveness and adequacy of the

internal control framework and to make recommendations to the

Board of Directors for improvements.

Management CommitteeThe Group Chief Executive of the parent holding company is duly

entrusted with the day-to-day management of the Group’s affairs.

The Group Chief Executive is assisted by a Management

Committee, comprising eight senior members of the parent holding

company’s management from various divisions and five advisers.

The Management Committee which meets monthly, examines in

depth the performance of the various business units of the Group

and agrees on recommendations to enhance and improve on

operational matters affecting the Group. On matters such as major

capital expenditure and major investments or divestments, the

Management Committee deliberates and makes appropriate

recommendations to the Executive Committee and/or the Board.

Internal ControlsThe Group has a number of internal controls in place which hasbeen established by the parent holding company. This includes:

Financial and Operating ManualsThe Financial and Operating Manuals set out the policies andprocedures for day-to-day operations and act as a guideline as tothe proper measures to be undertaken in a given set ofcircumstances. The Manuals enable tasks to be carried out withina set of flexible rules with minimal supervision.

Financial Authority LimitsThe Financial Authority Limits defines revenue and capitalexpenditure for each level of management within the Group. Thisinternal control acts as a check and balance before financialexpenditure is actually incurred.

Consolidated Financial ReportingThe Group implements a financial system that captures everysingle financial transaction. From this data captured, the Groupproduces consolidated monthly management accounts and quarterlyforecast performances which allow Management to focus on areasof concern.

Tender CommitteesThe purchase of goods and services exceeding a prescribed limit isapproved by two sets of Committees, namely the Regional TenderCommittees and the Main Tender Committee. A minimum numberof three quotations are called for and tenders are awarded based onfactors such as quality, track record and speed of delivery. The Tender Committees, therefore, ensure transparency in theaward of contracts.

Consultants Appointment CommitteeThe Consultants Appointment Committee which is chaired by anon-executive director of the holding company, approves theappointment of consultants from the list of consultants who havetendered their quotations in the implementation of any particularproject. The Consultants Appointment Committee again ensurestransparency in the award of contracts to consultants.

Statement on

Controls 21

Credit CommitteesA Credit Committee, which had been established at the HeadOffice, reviews the existing credit limits and approves new creditlimits. The Credit Committee also monitors the debt collection andpayment periods.

Plantation Advisory &Quality Assurance DepartmentThe Plantation Advisory & Quality Assurance Department of theparent holding company is entrusted with achieving and maintainingperformance benchmarks for the Plantation sector. The Departmenthas embarked on an ISO accreditation achievement programme.

Mill/Estate Liaison CommitteesIn order to achieve cooperation, discussion and pro-activity whichultimately will lead to enhancement of oil extraction ratios (OER),the Group has established Mill/Estate Liaison Committees whichmeet monthly. All problems regarding delivery, quality, diversionof fresh fruit bunches (FFB) and capacity of mills are discussedopenly and solutions will be recommended by the Committees.

IT Steering CommitteeThe IT Steering Committee whose members are represented fromvarious departments including the Information Technology, Financeand Internal Audit is responsible for identifying IT needs of theGroup, agreeing on the IT projects that need to be implementedand monitors the progress of the IT projects.

Plantation Web Site Reporting SystemAll estates are required to input data in respect of their harvestingrounds and fertiliser programme into this web-based system. Theinput of such relevant data enables Management at Head Office tomonitor the progress of the estates in these two areas.

Human Resource Information SystemThere is a data base of all employees (excluding general workers)containing their status and position description. This data base ofemployee status acts as a guide in planning the manpower needsof the Group. The position description of employees has enabledemployees to understand what needs to be accomplished andachieved within their scope of responsibilities.

Standards of Business EthicsEvery employee of the Company is contractually bound to observeprescribed standards of business ethics in the manner of conductingthemselves at work and in their relationship with external partiessuch as customers and suppliers. The Company expects each andevery employee to conduct itself with integrity and objectivity andnot to place themselves in a position of conflict of interest.Employees are subjected to disciplinary measures if there aregrounds to show non-compliance of the standards of business ethics.

Internal Audit

The Guthrie Ropel Group shares the resources of theInternal Audit Department of the parent holding company.The role of the Internal Audit Department is to examine,evaluate and ensure compliance with the Group’s policies,guidelines, procedures and systems of internal controls.

The Department has also taken the role of risk management. TheDepartment assesses the consequences and evaluates theeffectiveness of the internal control system to anticipate anypotential risks and suggests any improvements required.

The Internal Audit Department conducts audit visits to all relevantcentres of the Group on a regular basis. The Management isrequired to explain any purported lack of non-compliance pursuantto the audit reports issued. The audit report and Management’sresponses are then circulated to the Group Chief Executive, therelevant Heads of Division/Department and the Audit Committee ofthe three listed companies in the Group (namely Kumpulan GuthrieBerhad, Highlands & Lowlands Berhad and Guthrie Ropel Berhad).