Sustainable Growth and Development

ANNUAL REPORT 2015 Annual General Meeting th Venue : Igan Room, Hotel Tanahmas, Lot 277, Block 5, 19 Jalan Kampung Nyabor, 96000 Sibu, Sarawak, Malaysia. Date : 19 May 2016 Time : 2.30pm

CONTENTS

1   ‘”’‘”ƒ–‡”‘ϐ‹Ž‡ 51 Awards & Recognition 2 Corporate Information 53 Corporate Events Highlights 3 Financial Calendar 64 Financial Review by Group Financial Controller 4 Vision & Mission Statements 71 Statement on Corporate Governance 5 Management Policy 83 Additional Compliance Information Disclosures 6 5-Year Financial Highlights 85 Statement on Directors’ Responsibilities 9 Corporate Structure 86 Audit Committee 10  ‹”‡ –‘”•̵”‘ϐ‹Ž‡ 90 Statement on Risk Management 18 Message From The Executive Chairman and Internal Control 21 Review of Operations by 93 Financial Statements the Group Managing Director 209 Recurrent Related Party Transactions (‘RRPT’) 24 Logging Division 213 Properties of the Group 27 Plywood Division 218 Statistics on Shareholdings 29 Sawmilling Division 224 Notice of Annual General Meeting 30 Oil Palm Division 228 Statement Accompanying Notice of 33 Reforestation Division Annual General Meeting 35 Action Plans, Prospect & Conclusion Form of Proxy 38 Corporate Social Responsibility

COVER RATIONALE

The tree encapsulates the unity of extended family of the Group. The leaves are made out of the thumb prints of all Ta Ann staff members. Each colour represents the different level of staffs. All leaves, regardless of the sizes, signify the important role played by each staff ‹‡•—”‹‰–Š‡ ‘–‹—‘—•‰”‘™–Š‘ˆƒǤŠ‡„”ƒ Š‡••‹‰‹ˆ›–Š‡†‹˜‡”•‹ϐ‹ ƒ–‹‘‘ˆ Ta Ann’s ever growing business. The strong root system provides a solid foundation and nourishment for Ta Ann’s family tree to grow vigorously. CORPORATE PROFILE

TaTa Ann atat A Glance...Glance...

InIn the mid 1980’s, a groupgroup ooff enterprisinenterprisingg businessmen led by DatukDatuk Wahab Bin Haji Dolah, Datuk Amar Abdul Hamed Bin Haji Sepawi and Dato WongWong Kuo Hea, formed a small tradintradingg company.company. GrowinGrowingg fromfrom strengthstrength to strength,strength, the company expandeexpandedd fromfrom logginglogging operations intointo shippinshipping,g, downstream timber processinprocessing,g, f forestorest plantation, oil palm plantation and millingmilling of crude palm oil. The pioneeringpioneering spirit and exemplary inter-racial cooperation of its foundersfounders had laid a stronstrongg foundation for ggrowth.rowth. In February 11997,997, Ta Ann HoldingsHoldings Berhad waswas incorporated as a holdingholding company and listed on the Main MarketMarket of Bursa Malaysia on 23 NovemberNovember 11999.999.

TheThe principal activities ooff resource-based Ta Ann are centred aroundaround sustainable harnessinharnessingg of timbertimber resources and value addingadding downstream activities such as the manufacturingmanufacturing ofof veneer, ’Ž›™‘‘†ǡ ‘ƒ–‡†’Ž›™‘‘†ǡ‡ ‘’Ž›™‘‘†ǡŽƒ‹ƒ–‡†˜‡‡‡”Ž—„‡”ǡ’Ž›™‘‘†ǡ ‘ƒ–‡† ’Ž›™‘‘†ǡ ‡ ‘ ’Ž›™‘‘†ǡ Žƒ‹ƒ–‡† ˜‡‡‡” Ž—„‡”ǡ ϐϐ‹Žˆƒ ‡’Ž›™‘‘†ǡ„”ƒ ‹‰‹Ž ˆƒ ‡ ’Ž›™‘‘†ǡ „”ƒ ‹‰ ’Ž›™‘‘†ǡϐŽ‘‘”„ƒ•‡ǡ•ƒ™–‹„‡”ƒ•™‡ŽŽƒ•Žƒ‹ƒ–‡†‘—Ž†‹‰’Ž›™‘‘†ǡ ϐŽ‘‘” „ƒ•‡ǡ •ƒ™ –‹„‡” ƒ• ™‡ŽŽ ƒ• Žƒ‹ƒ–‡† ‘—Ž†‹‰ ’’”‘†— –•Ǥ”‘†— –•Ǥ

Ta Ann is one ofof the pioneers in forestforest plantation in Sarawak andand actively operates its forestforest plantationplantation proprogrammesgrammes whichwhich thethe Group placesplaces a strongstrong emphasis.emphasis. From thethe commitment to ensure sustainabilitsustainabilityy ooff its fforestorest resources, Ta Ann has embarkedembarked on research and develdevelopmentopment programmesprogrammes to produceproduce improvedimproved tree plantiplantingng materials such as acacia mangiummangium superbulksuperbulk whichwhich has higher yields fforor veneer production. Such initiative is in tandem with the GroGroup’sup’s plan to gradually shift to plantation-based resources.

The Group is constantly reviewingreviewing its best practices as a part ooff its absolute commitment towards sustainable development development and environmental safeguarding. safeguarding.Duedili Due diligencegence survsurveyseysare araree carried out by independent consultants prior to the commencement ooff groundground operations to ensure that any areas containing high conservation values (‘HCV’) are protected. In addition,addition, thethe GroupGroup has also iimplementedmplemented environmentallyenvironmentally friendlier terraterracce/zebrae/zebra tree pplantinglanting anandd logginglogging methodologiesmethodologies where the natural vegetationvegetation between terrterracesaces are leftleft undisturbed ttoo minimise groundground disturbance.disturbance.

‹ ‡–Š‡›‡ƒ”ʹͲͲͲǡƒŠƒ•†‹˜‡”•‹ϐ‹‡†•—„•–ƒ–‹ƒŽŽ›‹–‘‹ ‡ –Š‡ ›‡ƒ” ʹͲͲͲǡ ƒ  Šƒ• †‹˜‡”•‹ϐ‹‡† •—„•–ƒ–‹ƒŽŽ› ‹–‘ ‘‹‘‹Ž’ƒŽ’Žƒ–ƒ–‹‘•ǤŠ‡ ”‘—’Ž ’ƒŽ ’Žƒ–ƒ–‹‘•Ǥ Š‡ ”‘—’ hhasas plantedplanted over 40,000 hectares ooff oil palmspalms across Sarawak as at 31 December 2015. The GGrouproup also owns two (2)(2) palmpalm oil mills with a combined annual pprrocessingocessing ccapacityapacity of 1.2 mmillionillion tonnes ofof FFB.

 ’—”•—‹–‘ˆ ‘”’‘”ƒ–‡‘„Œ‡ –‹˜‡•ˆ‘”–Š‡„‡‡ϐ‹–•‘ˆ‹–••–ƒ’—”•—‹– ‘ˆ ‘”’‘”ƒ–‡ ‘„Œ‡ –‹˜‡• ˆ‘” –Š‡ „‡‡ϐ‹–• ‘ˆ ‹–• •–ƒ‡Š‘Ž†‡”•‡Š‘Ž†‡”•ǡƒ‹• ‘‹––‡†–‘ǡ ƒ  ‹• ‘‹––‡† –‘ providingproviding a workplaceworkplace that is conducive to career advancement aandnd growth.growth. At present, thethe GroupGroup has more than 6,700 stastaff.ff.

ANNUAL REPORT 2015 I 1 CORPORATE INFORMATION

BOARD OF DIRECTORS

Datuk Amar Abdul Hamed Bin Haji Sepawi Dato’ Awang Bemee Bin Awang Ali Basah Executive Chairman Director

Dato Wong Kuo Hea Chia Chu Fatt ƒƒ‰‹‰‹”‡ –‘”ȀŠ‹‡ˆš‡ —–‹˜‡ˆϔ‹ ‡” Director

Sa’id Bin Haji Dolah Ting Lina @ Ding Lina Executive Director Director

Datuk Abang Haji Abdul Karim Datuk Ambrose Blikau Anak Enturan Bin Tun Abang Haji Openg Director Director

CORPORATE HEADQUARTERS/ SENIOR INDEPENDENT PRINCIPAL BANKERS REGISTERED OFFICE DIRECTOR AmBank (M) Berhad No. 6, Jalan Rawang, Datuk Abang Haji Abdul Karim RHB Bank Berhad 96000 Sibu, Sarawak Bin Tun Abang Haji Openg OCBC Bank (Malaysia) Berhad Tel : 6 084-320 200 UOB (Malaysia) Berhad Fax : 6 084-313 328 Email: [email protected] Email : [email protected] [email protected]

CORPORATE OFFICE COMPANY SECRETARIES WEBSITE 6th Floor, Wisma Naim Augustine Siaw Meng Kun www.taann.com.my 2½ Mile, Jalan Rock (MAICSA No. 7011241) 93200 Kuching, Sarawak Tel : 6 082-237 533 Voon Jan Moi Fax : 6 082-237 977 (MAICSA No. 7021367) Email : [email protected]

SHARE REGISTRAR AUDITORS STOCK EXCHANGE LISTING Symphony Share Registrars Sdn Bhd KPMG, Chartered Accountants Main Market of Bursa Malaysia Level 6, Symphony House Level 6, Westmoore House Block D13, Pusat Dagangan Dana 1 Twin Tower Centre STOCK NAME Jalan PJU 1A/46 93200 Kuching, Sarawak TAANN 47301 Petaling Jaya Selangor STOCK CODE Tel : 6 03-7841 8000 5012 Fax : 6 03-7841 8008

2 I TA ANN HOLDINGS BERHAD (419232-K) FINANCIAL CALENDAR

FINANCIAL YEAR 1 January 2015 – 31 December 2015 RESULTS

First Quarter Announced on 27 May 2015 Second Quarter Announced on 28 August 2015 Third Quarter Announced on 16 November 2015 Fourth Quarter Announced on 22 February 2016

ANNUAL GENERAL MEETING To be held on 19 May 2016 DIVIDEND

Interim Single Tier Dividend 10 sen Announced on 27 May 2015 Entitlement date: 20 July 2015 Paid on 17 August 2015

Second Interim 10 sen Announced on 16 November 2015 Single Tier Dividend Entitlement date: 3 December 2015 Paid on 22 December 2015

ANNUAL REPORT 2015 I 3 VISION & MISSION STATEMENTS

CORPORATE VISION Ŷ To be a major player in the resource-based industries

Ŷ To be one of the leading players in the oil palm and tree plantation industries by adopting sustainable resource management practices

Ŷ To produce quality and price competitive products

Ŷ To be a responsible corporate citizen in support of National Development Objectives

CORPORATE MISSION Ŷ To enhance stakeholder value by producing good quality, price competitive and environmentally friendly products

Ŷ ‘ ‘•–ƒ–Ž›”‡ϐ‹‡‘—”’”ƒ –‹ ‡•ƒ•’ƒ”–‘ˆ‘—”ƒ„•‘Ž—–‡ ‘‹–‡––‘™ƒ”†• sustainability

Ŷ To integrate corporate social responsibility into our business practices and culture in partnership with our stakeholders to create shared value

4 I TA ANN HOLDINGS BERHAD (419232-K) MANAGEMENT POLICY

Ŷ TOGETHER WITH OUR CUSTOMERS

We think and act from the customers’ perspective. We listen to our customers and improve our products and services to meet their present and future needs.

Ŷ TOGETHER WITH OUR SHAREHOLDERS AND INVESTORS

‡ƒ‹–‘‡Šƒ ‡‘—” ‘”’‘”ƒ–‡˜ƒŽ—‡„›‰‡‡”ƒ–‹‰’”‘ϐ‹–•ƒ†‰‘‘†”‡–—” on investments for our shareholders and investors and by conducting business activities in an honest and responsible fashion.

Ŷ TOGETHER WITH SOCIETY

• ƒ ‰‘‘† ‘”’‘”ƒ–‡ ‹–‹œ‡ǡ ™‡ ˆ—Žϐ‹Ž ‘—” ”‡•’‘•‹„‹Ž‹–› „› –ƒ‹‰ ’”‘ƒ –‹˜‡ approaches to the social contribution activities and the conservation of our natural environment. We hold ourselves to the highest standard of ethical conduct through fair, transparent and accountable corporate activities and adopt operational procedures and practices that are consistent with the principles of good corporate governance in order to create a better society and friendly environment.

Ŷ TOGETHER WITH STAFF MEMBERS

We work towards creating a corporate culture of integrity and respect, and care for environment, and demonstrate the value we place on all staff members through fair compensation, strong benefits, and opportunities for learning, growth, and advancement.

ANNUAL REPORT 2015 I 5 5-YEAR FINANCIAL HIGHLIGHTS AS AT 31 DECEMBER

2011 2012 2013 2014 2015 RM’000 RM’000 RM’000 RM’000 RM’000

GROUP REVENUE & PROFIT

Revenue 925,639 789,936 769,920 1,011,626 1,048,285

EBITDA 300,807 168,641 209,598 281,044 346,573

”‘ϐ‹–‡ˆ‘”‡ƒš  ʹͳͺǡʹʹͲ ͹͹ǡͻͲͳ ͳͳ͵ǡͲͻͲ ͳ͸ͺǡ͵ͻ͸ ʹ͵Ͷǡͳ͸Ͳ

‡–”‘ϐ‹–ˆ‘”–Š‡‡ƒ” ͳ͸Ͳǡͺͷʹ ͷͳǡͶͷ͸ ͻʹǡ͹Ͷͻ ͳʹͷǡͶ͵ͺ ͳͻͳǡͶͻͷ

GROUP ASSETS & BORROWINGS

Total Assets 1,695,708 1,693,660 1,799,155 1,883,268 1,972,251

Cash & Cash Equivalents 180,479 130,286 260,790 319,649 323,527

Total Borrowings 450,447 473,635 518,387 516,412 455,171

EQUITY ATTRIBUTABLE TO OWNERS

Share Capital 308,981 370,736 370,736 370,736 370,736

Reserves 629,058 591,092 638,235 687,450 813,429

Equity Attributable To Owners 938,039 961,828 1,008,971 1,058,186 1,184,165

FINANCIAL RATIOS

Basic Earnings per Share (sen) 41.74* 15.54* 25.09 33.37 50.80

Gross Dividend per Share (sen) 20 5 5 20 20

Return on Equity Attributable to Owners (%) 16.5 6.0 9.2 11.7 15.9

Net Gearing (%) 28.80 35.70 25.50 18.60 11.1

Net Assets per Share (RM) 3.04* 2.59* 2.72 2.85 3.19

* Bonus issue of 1 for 5

6 I TA ANN HOLDINGS BERHAD (419232-K) 5-YEAR FINANCIAL HIGHLIGHTS (cont’d) AS AT 31 DECEMBER

REVENUE NET PROFIT FOR THE YEAR (RM’000) (RM’000)

1,100,000 200,000

1,000,000 180,000

900,000 160,000

800,000 191,495 1,048,285 140,000 1,011,626 700,000 925,639 120,000 160,852 600,000

789,936 100,000 500,000 769,920 80,000 125,438 400,000 60,000 300,000 92,749 40,000 200,000

100,000 20,000 51,456

0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

TOTAL ASSETS EQUITY ATTRIBUTABLE TO OWNERS (RM’000) (RM’000)

1,950,000 1,400,000 1,900,000 1,200,000 1,850,000

1,800,000 1,972,251 1,000,000 1,750,000 1,883,268 1,700,000

800,000 1,184,165 1,650,000 1,058,186 1,799,155 1,008,971 961,828

1,600,000 938,039 600,000 1,550,000 1,695,708 1,693,660 1,500,000 400,000 1,450,000

1,400,000 200,000 1,350,000

0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

ANNUAL REPORT 2015 I 7 5-YEAR FINANCIAL HIGHLIGHTS (cont’d) AS AT 31 DECEMBER

Composite Index & Ta Ann Share Prices (2011 - 2015)

Composite (RM) Index

8.00 2,000.00

1,800.00 7.00

1,600.00

6.00

1,400.00

5.00 1,200.00

4.00 1,000.00

800.00 3.00

600.00

2.00

400.00

1.00 200.00

0.00 0.00 -15 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Jan-11 Jun-11 Jan-12 Jun-12 Jan-13 Jun-13 Jan-14 Jun-14 Jan-15 Jun-15 Mar-11 Feb-11 Mar-12 Feb-12 Mar-13 Feb-13 Mar-14 Feb-14 Mar-15 Feb-15 Aug-11 Sep-11 Nov-11 Dec-11 Aug-12 Sep-12 Nov-12 Dec-12 Aug-13 Sep-13 Nov-13 Dec-13 Aug-14 Sep-14 Nov-14 Dec-14 Aug-15 Sep-15 Nov-15 Dec-15 May-11 May-12 May-13 May-14 May

TA ANN Share Price Composite Index Bonus Issue 1 for 5

8 I TA ANN HOLDINGS BERHAD (419232-K) CORPORATE STRUCTURE

100% BORLIN SDN. BHD. (156715-A) 100% HARIWOOD SDN. BHD. (158727-H) 100% PASIN SDN. BHD. (73540-K) 100% QUESTATE SDN. BHD. (253941-W) LOGGING DIVISION 100% RAPLEX SDN. BHD. (32618-V) 100% TANJONG MANIS HOLDINGS SDN. BHD. (219965-X) 100% WOODLEY SDN. BHD. (182700-V)

100% TA ANN PLYWOOD SDN. BHD. (208737-T) PLYWOOD DIVISION 45% M.J.WOOD CO. LTD. (0106-01-030837) TIMBER SECTOR 90.52% TA ANN TASMANIA PTY. LTD. (ACN 115743345)

SAWMILLING DIVISION 100% LIK SHEN SAWMILL SDN. BHD. (189461-H)

61% BORNEO TREE SEEDS & SEEDLINGS REFORESTATION DIVISION SUPPLIES SDN. BHD. (422257-W) 100% ZUMIDA SDN. BHD. (177917-V)

85% EUROPALM SDN. BHD. (776848-V) 100% MEGA BUMIMAS SDN. BHD. (663918-V) 85% MULTI MAXIMUM SDN. BHD. (468359-T) 67.82% PELITAMA SDN. BHD. (923846-U) 60% TA ANN PELITA ASSAN PLANTATION SDN. BHD. (838362-V) PLANTATION 55% TA ANN PELITA BALEH SDN. BHD. (643183-V) PREVIOUSLY KNOWN AS TA ANN PELITA ASAJAYA SDN. BHD. 60% TA ANN PELITA DURIN PLANTATION SDN. BHD. (814814-H) 60% TA ANN PELITA IGAN PLANTATION SDN. BHD. (705373-U) 55% TA ANN PELITA NGEMAH SDN. BHD. (1040134-A) PREVIOUSLY KNOWN AS TA ANN PELITA MATU DARO SDN. BHD PALM OIL SECTOR 60% TA ANN PELITA SILAS PLANTATION SDN. BHD. (481461-D) 100% TA ANN PLANTATION SDN. BHD. (371843-X) 85% ZUMIDA OIL PALM SDN. BHD (501264-X)

85% DARO OIL MILL SDN. BHD. (845929-P) OIL MILL 60% IGAN OIL MILL SDN. BHD. (846083-X) 100% MANIS OIL SDN. BHD. (479761-A)

PROPERTY DIVISION 100% TANAHEAD SDN. BHD. (546404-U)

ENERGY DIVISION OTHERS 100% TABES SDN. BHD. (440268-T)

60% EAGLE FOREST SDN. BHD. (918885-W) 100% IRONHEAD SDN. BHD. (1009785-V) OTHERS 100% MENYAN PLANTATION SDN. BHD. (643182-U) (DORMANT) 55% TA ANN PELITA SEBUYAU SDN. BHD. (1040136-M) (DORMANT) 100% ALDEHYDE CHEMICALS SDN. BHD. (448607-A) (DORMANT)

ANNUAL REPORT 2015 I 9 DIRECTORS’ PROFILE

Datuk Amar Abdul Hamed Bin Haji Sepawi Malaysian, Age 66, Male, Non-Independent Executive Chairman

ƒ–—ƒ”„†—Ž ƒ‡†‹•ƒ“—ƒŽ‹ϐ‹‡†ƒ†‡š’‡”‹‡ ‡†ˆ‘”‡•–‡”™‹–Š‘”‡–Šƒʹͺ›‡ƒ”•‘ˆ‡š’‡”‹‡ ‡‹Š‹•ϐ‹‡Ž†Ǥ In the past 21 years, he has been involved in activities relating to forest plantations in Australia and Sarawak. After graduating with a Bachelor of Science degree from University of Malaya, Malaysia, he pursued another Science degree majoring in Forestry from Australian National University and later obtained a Master’s degree in Forest Products Utilisation from Oregon State University, United States.

Datuk Amar Abdul Hamed was appointed as the Executive Chairman of Ta Ann Holdings Berhad since 2 October 1999. He also serves as the Chairman of the Risk Management Committee and ESOS Committee.

Datuk Amar Abdul Hamed is also the Chairman of Naim Holdings Berhad and Sarawak Plantation Berhad, companies listed on the Main Market of Bursa Malaysia. Datuk Amar Abdul Hamed also sits on the Board of Malaysian Palm Oil Board (MPOB). His extensive experiences gained as a Board member of the other public listed companies have enabled him to provide highly valued advice and support to the executive management team of the Company.

Datuk Amar Abdul Hamed was awarded The BrandLaureate Man of the Year Brand ICON Leadership Award 2015, Sarawak State Outstanding Entrepreneurship Award 2014 and Sarawak Entrepreneur of the Year 2004/2005.

Except for his interest in Mountex Sdn. Bhd., a major shareholder of the Company, Datuk Amar Abdul Hamed has no family relationship with any director or major shareholder of Ta Ann Holdings Berhad. He is deemed interested in the transactions entered into with the related parties, which are carried out in the ordinary course of business, as detailed in the note to the account and breakdown of recurrent related party transactions. Except as disclosed therein, he has no personal interest in any other business arrangement with the Company.

‡ƒ––‡†‡†ƒŽŽ•‹šȋ͸Ȍ‘ˆ–Š‡‘ƒ”†‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Executive Chairman in charge of corporate affairs and corporate development

Board Committee: ESOS Committee Chairman Risk Management Committee Chairman

10 I TA ANN HOLDINGS BERHAD (419232-K) DIRECTORS’ PROFILE (cont’d)

Dato Wong Kuo Hea Malaysian, Age 64, Male Non-Independent Group Managing Director ƒ†Š‹‡ˆš‡ —–‹˜‡ˆϔ‹ ‡”

Dato Wong Kuo Hea has been one of the entrepreneurs instrumental for expanding the Group’s business focus from a small trading company into timber and oil palm plantation company and spearheaded the commitment of the Group towards sustainable business growth. Dato Wong has 42 years of working experience in the timber industry. Other than corporate management, he has consistently involved himself in a multitude of industries and markets, forest management, timber harvesting, wood processing and oil palm plantation. Over the years under his leadership and stewardship, he has built up a strong management system within the Group and developed an effective communication platform and good business relationship with buyers and business associate. Dato Wong is continuously advancing his skills and knowledge to adapt to the ever-changing business environment. His leadership and entrepreneurial vision have been and will continue to be crucial in leading the Group into the future.

ƒ–‘‘‰™ƒ•ƒ’’‘‹–‡†ƒ•–Š‡ƒƒ‰‹‰‹”‡ –‘”ƒ†Š‹‡ˆš‡ —–‹˜‡ˆϐ‹ ‡”‘ˆƒ ‘Ž†‹‰•‡”Šƒ†•‹ ‡ 2 October 1999. He serves as a member of the Remuneration Committee, Risk Management Committee and ESOS Committee.

Except for his interest in Mountex Sdn. Bhd., a major shareholder of the Company, he has no family relationship with any director and substantial shareholder of the Company. He is deemed interested in the transactions with the related parties, which are carried out in the ordinary course of business, as detailed in the note to the account and breakdown of recurrent related party transactions. Except as disclosed therein, he has no personal interest in other business arrangement involving the Company.

‡ƒ––‡†‡†ƒŽŽ•‹šȋ͸Ȍ‘ˆ–Š‡‘ƒ”†‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: ”‘—’ƒƒ‰‹‰‹”‡ –‘”ƒ†Š‹‡ˆš‡ —–‹˜‡ˆϐ‹ ‡” in charge of operation

Board Committee: ESOS Committee Member Remuneration Committee Member Risk Management Committee Member

ANNUAL REPORT 2015 I 11 DIRECTORS’ PROFILE (cont’d)

Sa’id Bin Haji Dolah Malaysian, Age 54, Male Non-Independent Executive Director

Encik Sa’id Bin Haji Dolah graduated with a Bachelor of Civil Engineering (Hons) degree from University of Malaya and a Master’s degree in Business Administration from Edith Cowan University, Western Australia. He was appointed to the Board of Ta Ann Holdings Berhad on 2 October 1999 and has since been holding the position of an Executive Director undertaking several management and technical functions particularly in housing and construction work. He is also a member of the ESOS Committee.

Encik Sa’id is the brother of Datuk Wahab Bin Haji Dolah, a major shareholder of the Company, but has no family relationship with any director of the Company. He is deemed interested in the transactions entered into with related parties which are carried out in the ordinary course of business as detailed in the note to the account and breakdown of recurrent related party transactions. Except as disclosed therein, he has no personal interest in any other business arrangement with the Company.

‡ƒ––‡†‡†ƒŽŽ•‹šȋ͸Ȍ‘ˆ–Š‡‘ƒ”†‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Executive Director in charge of infrastructure and engineering work

Board Committee: ESOS Committee Member

12 I TA ANN HOLDINGS BERHAD (419232-K) DIRECTORS’ PROFILE (cont’d)

Datuk Abang Haji Abdul Karim Bin Tun Abang Haji Openg Malaysian, Age 69, Male Independent Senior Independent Non-Executive Director

Datuk Abang Haji Abdul Karim graduated with a Bachelor of Economics (Hons) degree from University of Malaya, Malaysia and later obtained a Master’s degree in Management from Asian Institute of Management, Philippines.

ƒ–—„ƒ‰ ƒŒ‹„†—Žƒ”‹‹•ƒ’”‘‹‡– ‘”’‘”ƒ–‡ϐ‹‰—”‡‹ƒ”ƒ™ƒǤ ‡Š‡Ž†˜ƒ”‹‘—•’‘•‹–‹‘•‹ Ž—†‹‰ President of the Sarawak Chamber of Commerce and Industry (SCCI) and is also a founding Director of BIMP-EAGA Business Council (BEBC) and BIMP-EAGA Malaysian Business Council (BEMBC) Sarawak Chapter First Chairman. He sits on the Board of Amanah Saham Sarawak (ASSAR), Employees Provident Fund (EPF) and Permodalan Satok Berhad. He is the Chairman of Brooke Dockyard and Engineering Works Corporation as well as a member of Sarawak Islamic Council and Lembaga Baitulmal and Wakaf Sarawak. He is a Co-Chairman with the State Secretary of the ƒ”ƒ™ƒ –ƒ–‡ ‡—†ƒŠ ƒ• ‘” ‡ǡ ‘ˆϐ‹ ‹ƒŽ ‡„‡” ‘ˆ –Š‡ ƒŽƒ›•‹ƒ –‡”ƒ–‹‘ƒŽ Šƒ„‡” ‘ˆ ‘‡” ‡ ƒ† Industry (MICCI) general committee representing Sarawak, member of the Board of the Malaysian Productivity Corporation as well as Sarawak Convention Bureau.

Datuk Abang Haji Abdul Karim’s extensive commercial experience and broad knowledge in the public sector enable him to provide a different perspective and independent view to the Board. He was appointed as the Senior Independent Non-Executive Director of Ta Ann Holdings Berhad since 2 October 1999. He is also the Chairman of the Audit Committee and the Nomination Committee and a member of the Remuneration Committee and Risk Management Committee.

Datuk Abang Haji Abdul Karim has no family relationship with any director or major shareholder of Ta Ann Holdings Berhad, nor any personal interest in any business arrangement involving the Company.

‡ƒ––‡†‡†ƒŽŽ‘ˆ–Š‡•‹šȋ͸Ȍ‘ƒ”†‡‡–‹‰•ƒ†–Š‡ϐ‹˜‡ȋͷȌ—†‹–‘‹––‡‡‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Senior Independent Non-Executive Director

Board Committee: Audit Committee Chairman Nomination Committee Chairman Remuneration Committee Member Risk Management Committee Member

ANNUAL REPORT 2015 I 13 DIRECTORS’ PROFILE (cont’d)

Dato’ Awang Bemee Bin Awang Ali Basah Malaysian, Age 56, Male Independent Non-Executive Director

Dato’ Awang Bemee was appointed as an Independent Non-Executive Director of Ta Ann Holdings Berhad since 2 October 1999. He is also the Chairman of the Remuneration Committee and a member of the Audit Committee, Nomination Committee and Risk Management Committee.

Dato’ Awang Bemee’s strong knowledge and extensive experience in legal practice enable him to contribute •‹‰‹ϐ‹ ƒ–Ž›–‘–Š‡‘ƒ”†Ǥƒ–‘ǯ™ƒ‰‡‡‡‘„–ƒ‹‡†Š‹•ƒ Š‡Ž‘”‘ˆƒ™•ȋ ‘•Ȍ†‡‰”‡‡ˆ”‘‹˜‡”•‹–›‘ˆ Malaya. He is an advocate and solicitor of the High Court of Borneo Sarawak. He set up Awang, Lai and Co. and is –Š‡ƒƒ‰‹‰’ƒ”–‡”‘ˆ–Š‡Ž‡‰ƒŽϐ‹”•‹ ‡ͳͻͻ͵Ǥ ‡‹•ƒŽ•‘ƒ‡„‡”‘ˆ–Š‡ƒ”ƒ™ƒ†˜‘ ƒ–‡•••‘ ‹ƒ–‹‘ǡ–Š‡ Chairman of Kuching Port Authority and a former Sarawak State Council Negeri member.

On 12 February 2009, he was conferred the Darjah Indera Mahkota Pahang (DIMP) award which carries the title ‘Dato’.’

He has no family relationship with any director or major shareholder of Ta Ann Holdings Berhad, nor any personal interest in any business arrangement involving the Company.

‡ƒ––‡†‡†ƒŽŽ‘ˆ–Š‡•‹šȋ͸Ȍ‘ƒ”†‡‡–‹‰•ƒ†–Š‡ϐ‹˜‡ȋͷȌ—†‹–‘‹––‡‡‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Independent Non-Executive Director

Board Committee: Remuneration Committee Chairman Audit Committee Member Nomination Committee Member Risk Management Committee Member

14 I TA ANN HOLDINGS BERHAD (419232-K) DIRECTORS’ PROFILE (cont’d)

Chia Chu Fatt Malaysian, Age 61, Male Independent Non-Executive Director

Mr. Chia Chu Fatt was appointed as an Independent Non-Executive Director of Ta Ann Holdings Berhad since 1 June 2008. He also serves as a member of the Audit Committee and Risk Management Committee.

ƒ ‘—–ƒ–„›’”‘ˆ‡••‹‘ǡ”ǤŠ‹ƒ‹•ƒ ‡ŽŽ‘™‘ˆ–Š‡Šƒ”–‡”‡†••‘ ‹ƒ–‹‘‘ˆ‡”–‹ϐ‹‡† ‘—–ƒ–•ȋȌǡƒ member of the Malaysian Institute of Accountants and a member of Chartered Tax Institute of Malaysia. He is also –Š‡’”‘’”‹‡–‘”‘ˆ†›Š‹ƒƬ‘Ǥǡƒ Šƒ”–‡”‡†ƒ ‘—–ƒ–•ϐ‹”™Š‹ ŠŠ‡‡•–ƒ„Ž‹•Š‡†‹ͳͻͺ͹ƒ†Šƒ•͵ͺ›‡ƒ”•‘ˆ ™‘”‹‰‡š’‡”‹‡ ‡‹ Šƒ”–‡”‡†ƒ ‘—–ƒ–•ϐ‹”•ǡ‘ˆ™Š‹ Šƒ„‘—–ˆ‘—”ȋͶȌ›‡ƒ”•™‡”‡™‹–Šƒ‡†‹—•‹œ‡ϐ‹”‹ London, England. Mr. Chia has vast accounting and risk management experience, enabling him to provide invaluable input to the Board, Audit Committee and Risk Management Committee.

Mr. Chia sits on the Board of Dayang Enterprise Holdings Berhad, a company listed on the Main Market of Bursa Malaysia. He also serves in various capacities as a Board Member of Sarawak Land Development Board, secretary of Piasau Camp Miri Nature Park Society, former Chairman of Miri Basketball Association and a former Sarawak State Legislative Council Assemblyman. He was formerly a councilor of Miri Municipal Council for 11 years.

Mr. Chia was conferred the honorary Johan Bintang Sarawak (JBS) and Ahli Bintang Sarawak (ABS) by T.Y.T Yang DiPertua Negeri Sarawak in 2010 and 1994 respectively.

He has no family relationship with any director and major shareholder of Ta Ann Holdings Berhad, nor any personal interest in any business arrangement involving the Company.

‡ƒ––‡†‡†ϐ‹˜‡ȋͷȌ‘ˆ–Š‡•‹šȋ͸Ȍ‘ƒ”†‡‡–‹‰•ƒ†ƒŽŽϐ‹˜‡ȋͷȌ‘ˆ–Š‡—†‹–‘‹––‡‡‡‡–‹‰•Š‡Ž†‹–Š‡ ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Independent Non-Executive Director

Board Committee: Audit Committee Member Risk Management Committee Member

ANNUAL REPORT 2015 I 15 DIRECTORS’ PROFILE (cont’d)

Ting Lina @ Ding Lina Malaysian, Age 60, Female Non-Independent Non-Executive Director

Ms Ting Lina @ Ding Lina was appointed to the Board of Ta Ann Holdings Berhad as a Non-Independent Non- Executive Director on 15 April 2013. She also serves as a member of the Remuneration Committee and Nomination ‘‹––‡‡Ǥ•‹ƒϐ‹”•–Œ‘‹‡†–Š‡ ”‘—’‹ͳͻͺ͸ǡƒ•ƒ†‹”‡ –‘”‘ˆ•—„•‹†‹ƒ”› ‘’ƒ‹‡•Ǥ

She holds a degree in Bachelor of Arts (Liberal Arts) from University of San Francisco in 1977. Upon returning from the United States, Ms Lina has been actively involved in overseeing operations at her family controlled companies ‹–Š‡ϐ‹‡Ž†•‘ˆ–‹„‡”„—•‹‡••ƒ†”‡ƒŽ‡•–ƒ–‡†‡˜‡Ž‘’‡–•ƒ†‹˜‡•–‡–•ǤŠ‡‹•–Š‡Š‹‡ˆš‡ —–‹˜‡ˆϐ‹ ‡” of Multiplex Realty Sdn. Bhd. since 2001, specialising in high-end and niche property developments. She is also involved in overseas property developments and investments in Singapore, London and Australia. Her extensive experience and wide exposure to the private sector, both locally and internationally, enable her to provide a different perspective and advice to the Board.

Ms Lina sits on the Board of Delta Overseas Investments Pte Ltd. She is also a director of hardware and marine engineering group, Pan Sarawak Sdn. Bhd., which is a subsidiary of a listed company, PANSAR Berhad. She also holds directorship in Pan Sarawak Holdings Sdn. Bhd. as well as in Palmhead Group of companies, a Sarawak based palm oil group.

She has no family relationship with any director or major shareholder of Ta Ann Holdings Berhad. She is deemed interested in transactions with related parties, which are carried out in the ordinary course of business, as detailed in the notes to the account and breakdown of recurrent related party transactions. Except as disclosed therein, she has no personal interest in any other business arrangements involving the Company.

Š‡ƒ––‡†‡†ƒŽŽ•‹šȋ͸Ȍ‘ˆ–Š‡‘ƒ”†‡‡–‹‰•Š‡Ž†‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Non-Independent Non-Executive Director

Board Committee: Remuneration Committee Member Nomination Committee Member

16 I TA ANN HOLDINGS BERHAD (419232-K) DIRECTORS’ PROFILE (cont’d)

Datuk Ambrose Blikau Anak Enturan Malaysian, Age 63, Male Independent Non-Executive Director

Datuk Ambrose Blikau Anak Enturan was appointed to the Board of Ta Ann Holdings Berhad as an Independent Non- Executive Director on 25 February 2015.

Datuk Ambrose holds a Masters in Business Administration from Harriot Wat University, Scotland, UK. He is the State Legislative Assemblyman for Katibas Constituency since 1991. He previously served in the state cabinet as Assistant Minister of Resource Planning and Assistant Minister of Finance from 2001 to 2006 and as Assistant Minister of Rural Development and Public Utilities from 2006 to 2009.

Datuk Ambrose currently holds the position of Executive Director in Hornbill Skyways Sdn Bhd and sits on the board of Amanah Saham Sarawak Berhad (ASSAR).

Datuk Ambrose has no family relationship with any director or major shareholder of Ta Ann Holdings Berhad, nor any personal interest in any business arrangement involving the Company.

‡ƒ––‡†‡†ƒŽŽ–Š‡ϐ‹˜‡ȋͷȌ‘ƒ”†‡‡–‹‰•Š‡Ž†•‹ ‡Š‹•ƒ’’‘‹–‡–‹–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”Ǥ

Job Function: Independent Non-Executive Director

Note: None of the Directors has had any conviction for any offence within the past 10 years.

ANNUAL REPORT 2015 I 17 MESSAGE FROM THE EXECUTIVE CHAIRMAN

Dear Shareholders,

On behalf of the Board of Directors, I present to you Ta Ann’s Annual Report for the year ended 31 December 2015.

FINANCIAL REVIEW

Š‡ ”‘—’ǯ•”‡˜‡—‡ˆ‘”–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”‡†‡†͵ͳ‡ ‡„‡”ʹͲͳͷ™ƒ•ͳǡͲͶͺǤ͵‹ŽŽ‹‘ǡͶΨŠ‹‰Š‡” ƒ• ‘’ƒ”‡†–‘–Š‡›‡ƒ”„‡ˆ‘”‡ǡ™Š‹Ž‡’”‘ϐ‹–„‡ˆ‘”‡–ƒš™ƒ•ʹ͵ͶǤʹ‹ŽŽ‹‘ǡ—’͵ͻΨˆ”‘–Š‡Ž‡˜‡Ž ƒ Š‹‡˜‡†‹ʹͲͳͶǤ‡–’”‘ϐ‹–ƒˆ–‡”–ƒš‘ˆͳͻͳǤͷ‹ŽŽ‹‘™ƒ•ͷ͵ΨŠ‹‰Š‡”›‡ƒ”‘›‡ƒ”ǡ–”ƒ•Žƒ–‹‰–‘ earnings per share of 51 sen.

Total equity grew from RM1.090 billion at the end of 2014 to RM1.218 billion in 2015 while return on equity for the year under review was 16%.

DIVIDENDS

‘”–Š‡ϐ‹ƒ ‹ƒŽ›‡ƒ”‡†‡†͵ͳ‡ ‡„‡”ʹͲͳͷǡ–Š‡‘ƒ”††‡ Žƒ”‡†ƒ†’ƒ‹††‹˜‹†‡†•‘ˆʹͲ•‡’‡” share, which translates to a yield of 3.98% based on the year end closing price. The dividend payout ratio stands at 40%.

18 I TA ANN HOLDINGS BERHAD (419232-K) MESSAGE FROM THE EXECUTIVE CHAIRMAN (cont’d)

PERFORMANCE REVIEW

Crude palm oil prices remained subdued in 2015 with prices averaging RM2,200 per metric REVENUE tonne on the back of lackluster demand coupled with high inventory levels in Malaysia. RM1,048.3 MILLION Despite uninspiring CPO prices, our palm oil By 4% compared to 2014 division posted commendable earnings driven by strong organic growth. The Group’s FFB output was up 12% to 633,143 metric tonnes in 2015 compared to 562,800 metric tonnes the preceding year. CPO production grew by 12% from 152,695 metric tonnes in 2014 to 171,482 PROFIT AFTER TAX metric tonnes in 2015. Timber prices experienced mixed performances RM191.5 MILLION in 2015 with export log prices increasing by 6% By 53% compared to 2014 to US$270 per cubic meter while plywood prices declined by 4% to US$509 per cubic meter. Nevertheless, earnings improved substantially due to the strength of the US$ vis-a-vis the Ringgit, which averaged RM4.05/US$ in 2015 as compared to RM3.25/US$ the previous year.

CORPORATE DEVELOPMENTS Ta Ann Plantation Sdn Bhd (a wholly owned subsidiary) entered into two Joint Venture Agreements with Pelita Holdings Sdn Bhd on 22 June 2015 to carry out oil palm development projects in partnership with the Sarawak state government and native land owners at Kanowit, Sibu Division containing a gross area of 17,017 hectares, of which an estimated 10,210 hectares are plantable areas; and at Batang Rajang/ Batang Baleh, Kapit Division containing a gross area of 11,178 hectares, of which an estimated 6,707 hectares are plantable areas.

The equity structure of the joint venture will consist of a 60% stake held by Ta Ann Plantation, 30% held by landowners and 10% held by Pelita Holdings Sdn Bhd.

The joint ventures will enable the Group to increase its total acreage of oil palm plantations which is in line with our corporate strategy of expanding the size and scale of our oil palm operations.

ANNUAL REPORT 2015 I 19 MESSAGE FROM THE EXECUTIVE CHAIRMAN (cont’d)

ȍcont’dȎ OUTLOOK

The Group is working towards sustainable forest The global economic outlook will be challenging ƒƒ‰‡‡– ‡”–‹ϐ‹ ƒ–‹‘ —†‡” –Š‡ ƒŽƒ›•‹ƒ in 2016 with slower growth rates in most ‹„‡” ‡”–‹ϐ‹ ƒ–‹‘  Š‡‡ ȋǮǯȌǤ Š‹• ‹• ƒ emerging economies and subdued demand for process of carrying out third party assessment for commodities across the board. sustainable forest management practices of Forest Management Unit (‘FMU’) or Forest Plantation Prospects for CPO prices should be bright in the Management Unit (‘FPMU’) in accordance with the coming year and we remain on track to achieve requirements of a prescribed standard, leading to a 15%-20% growth in FFB production volume ƒ ƒ™ƒ”† ‘ˆ ƒ ‡”–‹ϐ‹ ƒ–‡ ˆ‘” ‘”‡•– ƒƒ‰‡‡– in 2016 driven by larger matured area and ‘” ‡”–‹ϐ‹ ƒ–‡ ˆ‘” ‘”‡•– Žƒ–ƒ–‹‘ ƒƒ‰‡‡– ‹’”‘˜‡†’ƒŽƒ‰‡’”‘ϐ‹Ž‡Ǥ under the MTCS. The timber division will see some volatility in I am happy to note that both our Manis CPO mill prices as adjustments are made in the supply and Daro oil palm estate have attained Malaysian chain to cater to the expected slowdown in —•–ƒ‹ƒ„Ž‡ ƒŽ ‹Ž ȋǮǯȌ ‡”–‹ϐ‹ ƒ–‹‘Ǥ  †‡ƒ†Ǥ – ‹• Š‘’‡† –Šƒ– –Š‡ ”ƒ• ƒ ‹ϐ‹  tandem with our commitment to sustainability, we Partnership agreement (TPP) will create new ‡š’‡ – ‘”‡ ‘‹Ž ’ƒŽ •—„•‹†‹ƒ”‹‡• –‘ „‡ ‡”–‹ϐ‹‡† market opportunities, especially in the North this year. American market, which could boost the industry’s export volumes.

ACKNOWLEDGEMENTS

My gratitude and appreciation is conveyed to my fellow directors, our CEO, management and all employees for their hard work and dedication over the past year.

I also wish to take this opportunity to thank our buyers, suppliers, contractors, stakeholders and partners for their continued support.

My warmest thanks is also extended to all of you, our shareholders, who have demonstrated great ‘ϐ‹†‡ ‡‹—•ƒ†‘—”ƒ„‹Ž‹–‹‡•–‘ ‘–‹—‡ delivering growth and greater shareholder value for you.

Datuk Amar Abdul Hamed Bin Haji Sepawi Executive Chairman

20 I TA ANN HOLDINGS BERHAD (419232-K) REVIEW OF OPERATIONS BY THE GROUP MANAGING DIRECTOR

INTRODUCTION

The year 2015 was an eventful year for the Group which reorganised its timber operating procedures, stepped up harvesting and processing of our planted acacia into plywood products, commenced production of plywood ’”‘†— –•ƒ–‘—”ϐ‹”•–‘˜‡”•‡ƒ•’Ž›™‘‘†‹ŽŽǡƒ†‹–‡•‹ϐ‹‡†‡ Šƒ‹•ƒ–‹‘‘ˆˆ”‡•Šˆ”—‹–„— ŠȋǮ ǯȌŠƒ”˜‡•–‹‰Ǥ Š‡›‡ƒ”ƒŽ•‘•ƒ™–Š‡ ”‘—’ƒ Š‹‡˜‹‰”‡ ‘”†‡ƒ”‹‰ƒ†’”‘ϐ‹–Ǥ

The lower log density and smaller timber stands in the operating coupes and a revision in logging operating ’”‘ ‡†—”‡•–‘’”‡’ƒ”‡ˆ‘”ˆ‘”‡•– ‡”–‹ϐ‹ ƒ–‹‘•Ž‘™‡††‘™Ž‘‰•’”‘†— –‹‘ƒ†•ƒŽ‡•‡•’‡ ‹ƒŽŽ›‡š’‘”–•Ž‘‰•‹–Š‡ year under review.

However, the fall in log supply is a regional scenario with the diminishing timber resource, aggravated by the banning of log export by Myanmar, which resulted in higher log demand and an increase in export price.

The Group was able to maintain its timber supply for input to our plywood factory and sawmill from the following sources:

Ȉ ƒ–—”ƒŽŽ‘‰•ˆ”‘–Š‡–‹„‡”Ž‹ ‡•‡†ƒ”‡ƒ•Ǣ Ȉ ƒ–—”ƒŽƒ†’Žƒ–‡†Ž‘‰•ˆ”‘‘—”Ž‹ ‡•‡†’Žƒ–‡†ˆ‘”‡•–•Ǣ Ȉ   ‡”–‹ϐ‹‡†˜‡‡‡”‹’‘”–‡†ˆ”‘‘—”ƒ•ƒ‹ƒ˜‡‡‡”‹ŽŽ•Ǣƒ† Ȉ ‡‡‡”ˆ”‘–Š‡’”‘ ‡••‹‰‘ˆ ƒ ‹ƒŽ‘‰•ƒ–‘—”‹–—Ž—˜‡‡‡”‹ŽŽǤ

ANNUAL REPORT 2015 I 21 REVIEW OF OPERATIONS BY THE GROUP MANAGING DIRECTOR (cont’d)

In the sourcing of timber resources, the Group always ensures that only legal logs are exported or used as input ƒ–‡”‹ƒŽˆ”‘‹ŽŽ’”‘ ‡••‹‰ǤŠ‡Ž‡‰ƒŽ‹–›‘ˆ‘—”Ž‘‰•Šƒ•„‡‡ ‘ϐ‹”‡†„›ƒŽƒ›•‹ƒ–‹Ǧ‘””—’–‹‘‘‹••‹‘ (‘MACC’) in their Sarawak state wide investigation into illegal activities whose checking into companies in the Group found no evidences to show that the Group was involved in any offence under Malaysian Anti-Corruption Act 2009.

The following operational strategies were adopted by the timber sector in the year under review:

Ȉ ‡––‹‰’”‹‘”‹–‹‡•ˆ‘”Ž‘‰—–‹Ž‹•ƒ–‹‘–‘‰‡– the best value therefrom; Ȉ ‘ —•‹‰ ‹ ƒ—ˆƒ –—”‡ ‘ˆ ’”‘†— –• having faster turnover, better margin or competitive advantage or a combination thereof; Ȉ š’ƒ†‹‰ ƒ”‡– •Šƒ”‡ ‹ ‹ Š‡ ƒ”‡– and strengthening product development in new market; Ȉ ‡˜‡Ž‘’‹‰Ž‘™‡” ‘•–ƒ†‡˜‹”‘‡–ƒŽŽ› friendly plywood products with higher component of planted acacia, and Ȉ ƒƒ‰‹‰ ‡š’‘”– ’”‘ ‡‡†• ‘˜‡”•‹‘ –‘ Ringgit to maximize sales value.

In oil palm operation, emphasis was on developing and enhancing good agriculture practice, proper upkeep and ƒ‹–‡ƒ ‡ƒ†‡ Šƒ‹œ‡† ‡˜ƒ —ƒ–‹‘‡ˆϐ‹ ‹‡ ›Ǥ

In tree planting, we are at the stage of second rotational planting simultaneous with the on-going harvesting of acacia mangium from ϐ‹”•–”‘—†’Žƒ–‹‰ǤŠ‡†‹˜‹•‹‘‹•ƒŽ•‘–”‹ƒŽ’Žƒ–‹‰‡Žƒ’ƒ›ƒ tree species along the roads in the Group’s oil palm plantations, the growth of which is encouraging.

Š‡ ”‘—’‹•’”‡’ƒ”‹‰ˆ‘”ˆ‘”‡•– ‡”–‹ϐ‹ ƒ–‹‘ƒ†Šƒ•”‡˜‹‡™‡† and revised log harvesting work procedures to comply with ‡”–‹ϐ‹ ƒ–‹‘”‡“—‹”‡‡–•Ǥ”‡’ƒ”ƒ–‹‘ˆ‘”ƒŽƒ›•‹ƒ—•–ƒ‹ƒ„Ž‡ ƒŽ‹ŽȋǮǯȌ ‡”–‹ϐ‹ ƒ–‹‘‹•ƒŽ•‘‘Ǧ‰‘‹‰™‹–Š–™‘‹ŽŽ• ƒ†ƒ‘‹Ž’ƒŽ’Žƒ–ƒ–‹‘Šƒ˜‹‰ ‘’Ž‡–‡† ‡”–‹ϐ‹ ƒ–‹‘ stage two audits.

PRODUCTION VOLUME BY DIVISION SALES VOLUME BY DIVISION (2015 vs 2014) (2015 vs 2014)

700,000 700,000 600,000 600,000

500,000 500,000

400,000 400,000

300,000 300,000

200,000 200,000

100,000 100,000

0 0 Plywood Oil Palm Logging Sawmilling Plywood Oil Palm Logging Sawmilling (m3) (mt) (m3) (m3) (m3) (mt) (m3) (m3) 2014 2015 2014 2015

22 I TA ANN HOLDINGS BERHAD (419232-K)