PART I INFORMATION REQUIRED FOR ANNOUNCEMENT OF QUARTERLY (Q1, Q2 & Q3,Q4), HALF YEAR AND FULL YEAR RESULTS

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1 Petra Foods Limited Unaudited Financial Statement and Dividend Announcement For The Year Ended 31 December 2005 (Registration no C) PART I INFORMATION REQUIRED FOR ANNOUNCEMENT OF QUARTERLY (Q1, Q2 & Q3,Q4), HALF YEAR AND FULL YEAR RESULTS 1(a) (i) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. Group Group 3 months ended 31 December Financial year ended 31 December Change Change Notes US$'000 US$'000 % US$'000 US$'000 % Sales 1 112,512 99, % 439, , % Cost of Sales 2 (88,569) (79,244) 11.8% (355,520) (310,134) 14.6% Gross Profit 23,943 20, % 83,804 73, % Other operating income % 1,321 1, % Selling and Distribution costs (10,317) (6,732) 53.3% (32,618) (25,680) 27.0% Administrative expenses (4,016) (4,639) (13.4%) (16,497) (15,477) 6.6% Finance Costs 3 (1,353) (1,692) (20.0%) (4,958) (6,907) (28.2%) Other operating expenses (378) (1,410) (73.2%) (1,169) (2,935) (60.2%) 8,326 6, % 29,883 23, % Share of results of associates 127 (59) NM 35 (273) NM Profit before tax 8,453 6, % 29,918 23, % Income tax expense (1,989) (1,781) 11.7% (6,667) (5,621) 18.6% Profit for the year 6,464 4, % 23,251 17, % Minority Interest (33.7%) % Profit attributable to equity holders of the Company 6,588 4, % 23,700 18, % EBITDA 12,353 10, % 43,560 39, % Basic Earnings per share (US cents) Diluted Earnings per share (US cents) EBITDA represents net profit before net interest expense, income tax, depreciation and amortization expense NM denotes not meaningful Explanatory Notes on Profit and Loss Note 1 - Sales 3 months ended 31 December Financial Year ended 31 December Change Change US$'000 US$'000 % US$'000 US$'000 % Cocoa Ingredients Division 73,260 66, % 301, , % Branded Consumer Division 39,252 33, % 137, , % 112,512 99, % 439, , %

2 Note 2 Cost of sales (Registration no C) Cost of sales consists of cost of goods sold, costs of processing services rendered and net gain or loss on derivatives and hedge adjustment on inventory. A breakdown of FY2005 cost of sales were as follows: 2005 US$ 000 Cost of goods sold (341,694) Cost of services (10,866) (352,560) Adjusted for: 1 Fair value hedge adjustment on inventory 2,973 1 Fair value losses on cocoa bean derivatives (1,589) 1 Fair value losses on foreign exchange derivatives (3,516) (2,132) (354,692) Net foreign exchange loss (828) Cost of sales (355,520) Note 3 - Finance Costs (Net) Financial year ended 31 3 months ended 31 December December Change Change US$'000 US$'000 % US$'000 US$'000 % Interest Expense (1,778) (1,671) 6.4% (5,307) (7,124) (25.5%) Net foreign exchange gain / (loss) 209 (21) NM (70.0%) 1 Gain on interest rate caps NM NM (1,353) (1,692) (20.0%) (4,958) (6,907) (28.2%) 1 The net fair value losses on derivatives and hedge adjustment on inventory reduced the Group s FY2005 profit after tax by US$1,613,000. 1(a)(ii) The net profit was arrived after (deducting)/ crediting the following: 3 months ended 31 December Financial Year ended 31 December Change Change US$'000 US$'000 % US$'000 US$'000 % Depreciation of property, plant and equipment (2,331) (1,858) 25.5% (8,710) (7,966) 9.3% Impairment of intangible assets (33) (249) (86.7%) (56) (1,355) (95.9%) Amortisation of intangible assets (27) - NM (355) - NM Net foreign exchange gain/(loss) 1, % (763) (76) NM Under/(Over) provision of tax in prior years 2 25 NM (59) 455 (113.0%) Gain/(loss) on disposal of property, plant and equipment 76 (183) NM 49 (40) NM Inventories written off (73) (114) (35.9%) (345) (288) 19.8% Writeback/(Allowance) for inventory obsolescence (1,042) 59 NM (1,109) (201) NM NM denotes not meaningful 2

3 1(b) (i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. The Group The Company Notes US$ 000 US$ 000 US$ 000 US$ 000 ASSETS Current assets Cash and cash equivalents 5,374 23, ,781 Trade receivables 45,033 39,084 57,736 51,005 Inventories 93, ,451 32,450 36,648 Derivative assets 1 3,423-3,423 - Other current assets 10,964 12,397 10,851 9, , , , ,188 Non-current assets Investments in subsidiaries ,015 37,900 Investments in associated companies 2,864 2,956 3,000 3,000 Property, plant and equipment 112,481 79,885 2,586 1,872 Intangible assets 11,036 11, Deferred income tax assets 1,288 1, Loans to subsidiaries ,008 9,510 Other non-current assets ,191 95,492 68,053 52,282 Total assets 286, , , ,470 LIABILITIES Current liabilities Trade payables 22,249 22,105 9,262 25,633 Other payables 13,283 7,560 1,998 1,669 Current income tax liabilities 3,323 3,108 2,753 2,064 Borrowings 63,561 72,941 21,948 16,237 Derivative liabilities 1 3,733-3, , ,714 39,694 45,603 Non-current liabilities Borrowings 24,226 26, Provisions for other liabilities and charges 2,933 2, Deferred income tax liabilities 1,297 1, ,456 30, Total liabilities 134, ,864 40,461 45,939 NET ASSETS 152, , , ,531 EQUITY Company s equity holders Share capital and share premium 95,767 95,657 95,767 95,657 Foreign currency translation reserve (5,616) (4,407) - - Other reserves 2 1, ,147 - Retained earnings 59,781 43,737 35,722 25,874 Shareholders equity 151, , , ,531 Minority interests Total equity 152, , , ,531 Notes 1. Relates to unrealised gains or losses arising from the change in fair value of derivative financial instrument as disclosed in paragraph Includes cash flow hedge reserve that records the fair value of cocoa futures, foreign currency futures and interest rate swaps which are accounted as cash flow hedges as disclosed in paragraph 5. 3

4 1(b)(ii) Aggregate amount of the group s borrowings and debt securities (Registration no C) Group Company 31-Dec Dec Dec Dec-04 US$'000 US$'000 US$'000 US$'000 Amount repayable in one year or less, or on demand 63,561 72,941 21,948 16,237 Amount repayable after one year 24,226 26, ,787 99,278 22,384 16,417 Details of collateral The Group s borrowings are secured by certain pledged deposits, trade receivables, inventories and property, plant and equipment. 4

5 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Financial Year ended 31-Dec Dec-04 Note US$'000 US$'000 Cash flows from operating activities Profit before tax 29,918 23,572 Adjustments for: Depreciation of property, plant and equipment 8,710 7,966 Amortisation of intangible assets 56 1,355 Impairment loss of intangibles Loss/(gain) on disposals of property, plant and equipment (49) 40 Interest income (147) (156) Interest expense 5,307 7,124 Net foreign exchange gains (65) (217) Share of (profit)/ loss from associated companies (35) 273 Operating cash flow before working capital changes 44,050 39,957 Change in operating assets and liabilities, net of effects from purchase of subsidiaries Inventories 14,480 (9,553) Trade and other receivables (4,434) (8,811) Fair value of inventories (4,216) - Fair value of derivatives 5,443 - Trade and other payables 2,560 6,146 Trade finance (8,633) (11,747) Cash generated from operations 49,250 15,992 Interest received Interest paid (1,754) (3,565) Income tax paid (6,601) (5,222) Net cash flow from operating activities 41,042 7,361 Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired 1 (2,833) - Purchases of property, plant and equipment (42,629) (14,880) Payments for patents and trademarks (222) (23) Proceeds from disposals of property, plant and equipment Net cash used in investing activities (45,204) (14,606) Cash flows from financing activities Recovery of IPO expenses Net proceeds from issuance of ordinary shares - 54,809 Repayments of borrowings (10,111) (21,413) Addition/(repayment) from lease liabilities net 369 (152) Interest paid (3,553) (3,559) Dividend paid to shareholders (7,358) (4,000) Decrease in fixed deposits held as collateral with financial institutions Net cash flow (used in)/ from financing activities (19,896) 26,517 Net (decrease)/increase in cash and cash equivalents (24,058) 19,272 Cash and cash equivalents at the beginning of the financial year 1,244 (18,271) Effects of exchange rate changes on cash and cash equivalents (147) 243 Cash and cash equivalents at the end of the financial period (22,961) 1,244 5

6 Cash and cash equivalents included in cash flow statement comprise the following balance sheet amounts : Financial Year ended 31-Dec Dec-04 US$'000 US$'000 Cash and bank balances 5,374 23,339 Less : Fixed deposits held as collateral with financial institutions (607) (1,254) Less: Bank overdrafts (27,728) (20,841) (22,961) 1,244 Note 1: Acquisition of Subsidiaries Petra Sime Marketing Pte Ltd and Sime Darby Marketing Sdn Bhd On 1 March 2005, the Company acquired 60% of the issued share capital of Petra Sime Marketing Pte Ltd. On 14 December 2005, the Company acquired the remaining 40% of the issued share capital of the subsidiary from the minority shareholders. Total consideration was US$2,499,000 in cash. Petra Sime Marketing Pte Ltd is involved in the marketing and distribution of healthcare products and wine and spirits. On 12 December 2005, the Company acquired 70% of the issued share capital of Sime Darby Marketing Sdn Bhd for a consideration of US$940,000 in cash. Sime Darby Marketing Sdn Bhd is involved in the marketing and distribution of pharmaceutical, healthcare and other consumer products in Malaysia. The fair value of the net assets acquired equalled the book value of the net assets. The effects of the acquisitions to the Group s financial position are as follows: 2005 US$ 000 Fair values of identifiable net assets of subsidiaries acquired Plant and equipment 83 Receivables and other current assets 3,562 Inventories 2,622 Cash 606 Payables (2,983) 3,890 Less: Minority interests and share of losses (1 March to 31 October 2005) (451) Total consideration paid in cash 3,439 Less: Cash and cash equivalents in subsidiaries acquired (606) Net outflow of cash 2,833 6

7 1(d) (i) A statement (for the issuer and group) showing either (a) all changes in equity or (b) changes in equity other than those arising from capitalization issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Consolidated Statement of Changes in Equity For Financial Year ended 31 December 2005 Attributable to equity holders of the Company The Group Balance as 31 December 2004, as previously reported Effect of changes in accounting policies Share capital and share premium Foreign Currency translation reserve Retained earnings Cash flow hedge reserve General reserve Total shareholders' equity Minority interest Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ ,657 (4,407) 43, , ,899 - Effect of adopting FRS (77) Balance at 1January 2005, restated 95,657 (4,407) 43, , ,992 Currency translation differences - (2,490) (2,490) (25) (2,515) Cash flow hedges (223) (223) (223) Net losses recognised directly in equity - (2,490) - (223) - (2,713) (25) (2,738) Net profit for the period , ,112 (325) 16,787 Total recognised gains/(losses) - (2,490) 17,112 (223) - 14,399 (350) 14,049 Final Dividend relating to 2004 paid - - (2,986) - - (2,986) - (2,986) Interim Dividend relating to 2005 paid - - (4,372) - - (4,372) - (4,372) Acquisition of a subsidiary ,019 1,019 Balance at 30 September ,657 (6,897) 53,414 (53) ,607 1, ,702 7

8 Consolidated Statement of Changes in Equity (cont d) For Financial Year ended 31 December 2005 (Registration no C) Attributable to equity holders of the Company The Group Share capital and share premium Foreign Currency translation reserve Retained earnings Cash flow hedge reserve General reserve Total shareholders' equity Minority interest Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 4Q 2005 Balance at 1 October ,657 (6,897) 53,414 (53) ,607 1, ,702 Refund of share issue expenses Currency translation differences 1,281 1, ,329 Cash flow hedges 1,328 1,328 1,328 Tax on fair value gain (128) (128) (124) (252) Net losses recognised directly in equity 110 1,281-1,200-2,591 (76) 2,515 Net profit for the period - - 6, ,588-6,588 Total recognised gains/(losses) 110 1,281 6,588 1,200-9,179 (76) 9,103 Transfer to general reserve (221) Acquisition of a subsidiary (616) (616) Balance at 31 December ,767 (5,616) 59,781 1, , ,189 8

9 1(d)(i) The Group Consolidated Statement of Changes in Equity For Financial Year ended 31 December 2004 Share capital and share premium Attributable to equity holders of the Company Convertible bonds Foreign currency translation reserve Retained earnings General reserve Total shareholders' equity (Registration no C) Minority interest Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Balance as 1 January ,425 20,000 (2,768) 29, ,500 2,202 68,702 Issue of new ordinary shares 1, ,423-1,423 Currency translation differences - - (1,551) - - (1,551) - (1,551) Net gains recognised directly in equity 1,423 - (1,551) - - (128) - (128) Net profit ,657-13,657 (242) 13,415 Total recognised gains and losses for the financial period 1,423 - (1,551) 13,657-13,529 (242) 13, interim dividend paid (4,000) - (4,000) - (4,000) Acquisition of additional interests in subsidiaries (1,423) (1,423) Balance at 30 September ,848 20,000 (4,319) 39, , ,566 4Q 2004 Balance at 1 October ,848 20,000 (4,319) 39, , ,566 Issue of new ordinary shares 20,000 (20,000) Issue of shares pursuant to the initial public offering of the Company 59, ,515 59,515 Share issue expenses (4,706) (4,706) (4,706) Currency translation differences - - (88) - - (88) 76 (12) Net gains recognised directly in equity 74,809 (20,000) (88) , ,797 Net profit ,723-4,723 (187) 4,536 Total recognised gains and losses for the financial period 74,809 (20,000) (88) 4,723-59,444 (111) 59,333 Transfer to general reserve (186) Balance at 31 December ,657 - (4,407) 43, , ,899 9

10 Statement of Changes in Equity For Financial Year ended 31 December 2005 (Registration no C) The Company Share capital and share premium Retained earnings Cash flow hedge reserve Total shareholders' equity US$ 000 US$ 000 US$ 000 US$ 000 Balance as 31 December 2004, as previously reported 95,657 25, ,531 Effect of changes in accounting policies - Effect of adopting FRS 39 - (106) Balance at 1January 2005, restated 95,657 25, ,595 Cash flow hedges - - (223) (223) Net losses recognised directly in equity - - (223) (223) Net profit for the period - 11,173-11,173 Total recognised gains/(losses) - 11,173 (223) 10,950 Final Dividend relating to 2004 paid - (2,986) - (2,986) Interim Dividend relating to 2005 paid - (4,372) - (4,372) Balance at 30 September ,657 29,583 (53) 125,187 4Q 2005 Balance at 1 October ,657 29,583 (53) 125,187 Refund of share issue expenses Cash flow hedges - - 1,328 1,328 Tax on fair value gain - - (128) (128) Net gains recognised directly in equity 110-1,200 1,310 Net profit for the period - 6,139-6,139 Total recognised gains/(losses) 110 6,139 1,200 7,449 Transfer to general reserve Balance at 31 December ,767 35,722 1, ,636 10

11 Statement of Changes in Equity For Financial Year ended 31 December 2004 (Registration no C) The Company Share capital and share premium Convertible bonds Retained earnings Total shareholders' equity US$ 000 US$ 000 US$ 000 US$ 000 Balance as 1 January ,425 20,000 16,369 55,794 Issue of new ordinary shares 1, ,423 Net gains recognized directly in equity 1, ,423 Net profit - - 7,641 7,641 Total recognised gains for the financial period 1,423-7,641 9, interim dividend paid - - (4,000) (4,000) Balance at 30 September ,848 20,000 20,010 60,858 4Q 2004 Balance at 1 October ,848 20,000 20,010 60,858 Issue of new ordinary shares 20,000 (20,000) - - Issue of shares pursuant to the initial public offering of the Company 59, ,515 Share issue expenses (4,706) - - (4,706) Net gains/(losses recognised directly in equity 74,809 (20,000) - 54,809 Net profit for the financial period - - 5,864 5,864 Total recognised gains for the financial period 74,809 (20,000) 5,864 60,673 Balance at 31 December ,657-25, ,531 11

12 1(d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. During the financial year ended 31 December 2005, there was no change in the issued and paid up share capital of the Company (2004: S$53,227,700) There were no options granted or shares issued pursuant to the Petra Foods Employees Share Option Scheme and the Petra Foods Share Incentive Plan. 2 Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed. 3. Whether the figures have been audited or reviewed, the auditors report (including qualifications or emphasis of matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. Except as disclosed in paragraph 5 below, the Company and the Group have applied consistent accounting policies and methods of computation in the preparation of the financial statements for the current reporting period compared with the audited financial statements as at 31 December If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change In 2005, the Group and the Company adopted the following Financial Reporting Standards ( FRS ) which became effective for the financial year beginning on or after 1 January FRS 39(revised 2004) Financial Instruments: Recognition and Measurement FRS 103 Business Combinations FRS 36(revised 2004) Impairment of Assets FRS 38 (revised 2004) Intangible Assets FRS 39 (revised 2004) This FRS sets out the new requirements for, among other things, the recognition and measurement of financial instruments and hedge accounting. The adoption of FRS 39 resulted in the Group recognizing derivative financial instruments as assets or liabilities at fair value. FRS 39 (revised 2004) requires derivatives to be initially recognized at fair value on the date the derivative contract is entered into and subsequently re-measured at fair value. The Standard has also expanded the definition of a derivative instrument to include derivatives embedded in non-derivative contracts. The method of recognizing the resulting gain and loss depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item hedged. 12

13 FRS 39 (revised 2004) also sets out certain conditions under which hedge accounting can be applied. If the conditions are not met, hedge accounting cannot be applied and changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognized in the income statement, without an offsetting effect from the hedged item. Accounting for derivatives financial instruments and hedging activities Derivatives are used by the Group to manage exposure to foreign exchange, interest rate and cocoa bean price risks arising from operational and financing activities. Derivatives are used for hedging purposes only. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. (a) Cocoa bean futures and forwards Cocoa bean futures, forward purchases of cocoa beans, and forward sales of butter or liquor are accounted for as derivatives under FRS 39. Coca bean derivatives are used by the Group to hedge: (i) Cocoa bean price risk arising from cocoa bean inventory Cocoa bean futures that are sold to hedge cocoa bean inventory are accounted for as fair value hedge under FRS 39 whereby: The hedging derivatives are re-measured at fair value, with any gain or loss immediately recognized in the income statement; and The cocoa bean inventory is re-measured for its change in fair value attributable to the hedged bean price risk, with any gain or loss immediately recognized in the income statement. (ii) Cost of carry and market differentials arising from future purchases of cocoa beans and future sales of cocoa products. A combination of cocoa bean futures and currency futures are used to lock in cost of carry and/or market price differentials arising from future purchases of cocoa beans and future sales of cocoa products. Such hedge relationship has been accounted as cash flow hedge under FRS 39, whereby the hedging derivatives are re-measured at fair value, with the change in fair value recognized in equity and recognized in the income statement in the same period when the hedged items affect the income statement. Cocoa bean derivatives that are not designated for hedge accounting are re-measured at fair value, with any gain or loss immediately recognized in the income statement. Previously, the hedging derivatives are accounted for on a settled basis, with any realized gain or loss charged to the income statement. The notional amounts of the forward purchases of cocoa beans and forward sales of cocoa products were also recorded as off-balance sheet items, and the fair value of these contracts were not separately recognized in the financial statements. 13

14 Accounting for derivatives financial instruments and hedging activities (Registration no C) b) Interest rate caps and swaps (i) Interest rate caps As at 1 January 2005, the Group had entered into interest rate caps and corridors (which involve purchasing a lower cap rate and selling a higher cap rate) to hedge against interest rates rising beyond a specified level in a floating rate borrowing. Under FRS 39 (revised 2004), the Group accounts for its interest rate caps as financial assets or financial liabilities at fair value through profit or loss. Previously, net premiums paid for the interest rate caps were recorded as an asset on the balance sheet at the date of purchase and amortised over the term of the options. Interest income or expense arising from the caps and corridors was recognized on an accrual basis. (ii) Interest rate swap During the financial year, the Group entered into an interest rate swap agreement, whereby it receives a variable rate equal to 6-month USD LIBOR on the notional amount and pay fixed rate interest. The swap is used to hedge a floating rate loan facility and is designated for cash flow hedge. The swap is re-measured at fair value, with the gain or loss recognized in equity. The gain or loss accumulated in equity will be transferred to the income statement in the same period when the hedged borrowing affects profit or loss. In accordance with the transitional provision of FRS 39, the comparative figures for 2004 have not been restated. On 1 January 2005, transitional adjustments were made and the effect of these adjustments affected the following balance sheet items as at 1 January Group Company US$ 000 US$ 000 (Decrease)/increase in: Derivative assets 4,215 4,215 Derivative liabilities 1,537 1,489 2,678 2,726 Increase/(decrease) in: Other payables Other current assets (3,505) (3,505) Inventory 1,243 1,243 Retained earnings (77) (106) Cash flow hedge reserve FRS 103 Until 31 December 2004, goodwill was amortised on a straight line basis over a maximum period of 10 years; and at each balance sheet date, the Group assessed if there was any indication of impairment of the cash-generating-unit to which the goodwill is attached. In accordance with the provisions of FRS 103, the Group ceased the amortization of goodwill from 1 January 2005 accumulated amortization as at 31 December 2004 has been eliminated with a corresponding decrease in the cost of goodwill; and From the financial year commencing 1 January 2005 onwards, goodwill will be tested annually for impairment, as well as when there are indications of impairment. 14

15 The following shows the effects of the new and revised FRS adopted by the Group in FY2005. This does not include the realized gain or loss on derivatives nor does it show the impact of foreign exchange forward contracts as the Group s accounting policy for these contacts in prior years has been in line with FRS 39. (a) Consolidated Income Statement for the year ended 31 December 2005 Increase / (Decrease) U$ 000 Description of change Note FRS 39 FRS 103 TOTAL (revised 2004) Cost of sales 1 (6,684) - (6,684) Other operating expenses - (1,114) (1,114) Finance cost (564) - (564) Profit before tax 7,248 1,114 8,362 Income tax expense Profit after tax 1 6,328 1,114 7,442 (b) Consolidated Balance Sheet as at 31 December 2005 Increase / (Decrease) U$ 000 Description of change Note FRS 39 (revised 2004) FRS 103 TOTAL Intangible assets - 1,114 1,114 Inventory 4,216-4,216 Other current assets (82) - (82) Derivative assets 3,423-3,423 Derivative liability 3,733-3,733 Other payables (4,699) - (4,699) Current income tax liabilities Deferred tax liabilities Cash flow hedge reserve 1,147-1,147 Retained earnings 1 6,328 1,114 7,442 Note 1 Taking into account both realised and unrealized losses on derivatives and foreign exchange forwards, the net loss on derivatives and hedged adjustment on inventory on cost of sales was US$2,132,000. Apart from FRS39 (revised 2004), FRS 103, FRS 36 (revised 2004) and FRS38 (revised 2004), the Group adopted various revisions in FRS, applicable from 1 January These do not have significant financial impact on the Group. 15

16 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. (i) (ii) 4th Quarter Financial Year Ended (1) Based on weighted average number of ordinary shares in issue (US cents) On a fully diluted basis (detailing any adjustments made to the earnings) (US cents) Notes 1. Basic earnings per share for the 4 th quarter year 2005 is computed based on 532,277,000 (4 th quarter year 2004: 429,868,000) of ordinary share in issue. 2. Dilutive earnings per share for 4th quarter year 2005 is similar to those used in calculating basic earnings per share since there were no dilutive potential ordinary shares as at 31 December 2005 following the full redemption of the convertible bonds by way of issue of shares in financial year Dilutive earnings per share for 4 th quarter year 2004 is calculated based on 429,868,000 shares by adjusting the number of ordinary shares in issue to assume conversion of all the convertible bonds issued to Canzone Limited and McKeeson Holdings Limited (as nominee of Fremont Investment Limited) and the net profit is adjusted to eliminate interest net of tax. 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on; and (b) immediately preceding financial year. Group Company 31 Dec Dec Dec Dec-04 Net asset value per ordinary share based on Issued share capital (US cents)

17 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group business. It must include a discussion of the following: - (a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on Founded in 1984, Petra Foods Limited (the Group ) is one of the world s major manufacturers and suppliers of cocoa ingredients. The Group also manufactures and/or distributes branded consumer products, primarily chocolate confectionery products, for which it is the market leader in Indonesia. The Group has two business divisions, Cocoa Ingredients and Branded Consumer. Cocoa Ingredients division is involved in the manufacture and sale of a wide range of specialty cocoa butters, liquors and cocoa powders under the Delfi brand to over 30 countries. Branded Consumer division manufactures, markets and distributes chocolate confectionery products in over 17 countries, with a portfolio of eight master brands and 19 key-sub brands and with over 300 stock keeping units. The Group also distributes a portfolio of well-known third party brands in Indonesia, Singapore and Malaysia. Review of Group Financial Performance Key Figures 4 th Quarter Financial Year Change Change US$'000 US$'000 US$'000 US$'000 Revenue Cocoa Ingredients 73,260 66, % 301, , % Branded Consumer 39,252 33, % 137, , % 112,512 99, % 439, , % EBITDA Cocoa Ingredients 7,123 5, % 25,341 22, % Branded Consumer 5,230 4, % 18,219 17, % 12,353 10, % 43,560 39, % Finance Costs (1,353) (1,692) (20.0%) (4,958) (6,907) (28.2%) Profit before tax 8,453 6, % 29,918 23, % Net Profit attributable to shareholders 6,588 4, % 23,700 18, % Key Indicators by Business Segments 4 th Quarter Financial Year Branded Consumer Change Change Gross Profit Margin 32.9% 31.7% 1.2% 31.7% 33.3% (1.6%) 6- month moving average ended 31 December Financial Year Cocoa Ingredients Change Change EBITDA per metric ton of sales volume (US$) % % 17

18 Sales (Registration no C) The Group s sales for FY2005 were up by 14.4% year-on-year (YoY) or US$55 million growth with the two core businesses benefiting from strong growth momentum. Cocoa Ingredients Division s revenue grew 13.3% to US$301.6 million on the back of the strong demand for its customized and higher value added products from its major international food & beverage customers. In addition to demand growth from key customers, the Division also penetrated new markets, as seen by 49.6% increase in turnover from the Europe and North America markets. The expanded capacity at the Malaysian plant enabled the Division to increase sales volume by 8% YoY to 114,542 metric tones for FY2005, albeit not a full year s benefit. Branded Consumer Division s FY2005 sales of US$137.7m achieved represents YoY growth of 17.1%. This growth driven by stronger second half sales achieved in Indonesia and higher regional contributions. For FY2005, the regional markets contributed 14% of total Branded Consumer Revenue, as compared to 7% last year. Revenue growth, in local currency terms, was 27% YoY as the Division continued to leverage on its strong brand equity and established distribution network to grow sales in Indonesia supported by additional capacity from the expansion of its manufacturing plants. Profitability FY2005 EBITDA increased by 9.3% YoY to US$43.6 million. Cocoa Ingredients Division s expanded capacity enabled it to derive significant economies of scale, resulting in higher EBITDA per mt of sales volume, up from US$208 per mt in 2004 to US$221 per mt in Combined with the increased sales volume and higher yield achieved, EBITDA for FY2005 was higher by 15.1% to US$25.3 million. The EBITDA growth also reflected the Group s well managed capacity expansion and utilisation, as well as strong demand for its higher value added products. Branded Consumer Division s gross profit margin of 31.7% was 1.6% point lower than FY2004. However for Q4 2005, gross margin of 32.9% was achieved, versus the 31.5% in Q The improvement can be attributed to the two price hikes implemented, the product resizing exercise and continued costs reduction efforts in our core market. FY2005 EBITDA improved slightly to US$18.2 million (+2.1% YoY) and would have been higher by US$2.2 million if not for start up losses in Malaysia. The Group s 2005 Profit before tax increased 26.9% YoY to US$29.9 million driven by a combination of the 9.3% EBITDA growth and lower interest expense arising from lower bank borrowings. Balance Sheet and Financial Position As at 31 December 2005, total shareholders equity increased by US$16.3 million to US$151.8 million. Total non-current assets increased to US$128.2 million mainly due to capacity expansion of its Cocoa Ingredient division in Malaysia and Latin America and Branded Consumer division in Indonesia. The investment in capacity expansion totaling US$42.6 million caused a lower cash and cash equivalents to US$5.4 million. The business expansion was funded partly by the Group s US$44 million cash flow generated from operations as a result of higher profitability achieved in FY2005. Total borrowings were also reduced by 11.6% from US$99.3 million as at 31 December 2004 to US$87.8 million as of 31 December As a result, the Group s gearing (computed by dividing the Group s borrowing less cash and cash equivalent by shareholders equity) improved from 55.9% to 54.1% as of 31 December

19 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. The Group s results for financial year 2005 are in line with the commentary made in paragraph 10 of the Group s Third quarter unaudited Financial Statement and Dividend Announcement. 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Barring unforeseen circumstances, the Directors are optimistic about the business prospects for both divisions. 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? Name of Dividend Interim Final Dividend Type Cash Cash Dividend Amount per Share (in Singapore cents) 1.38 cents per ordinary share (Tax exempt one-tier tax) 1.56 cents per ordinary share (Tax exempt one-tier tax) Dividend Rate (in %) 13.8% 15.6% Par value of shares S$0.10 S$0.10 Tax Rate N.A N.A (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the current financial period reported on? Name of Dividend 1 Interim Final Dividend Type Cash Cash Dividend Amount per Share US cents per ordinary share (Tax exempt one-tier tax) 0.92 Singapore cents per ordinary share (Tax exempt one-tier tax) Dividend Rate (in %) 21.97% 9.2% Par value of shares S$1 S$0.10 Tax Rate N.A N.A 1 There was no corresponding amount in Singapore cents as the dividend was paid in US cents in As of 30 June 2004, the Company s issued and paid up capital was S$30,600,000 comprising 30,600,000 ordinary shares of S$1.00 each. (c) Date payable The directors have proposed a final dividend of 0.96 US cents or 1.56 Singapore cents per share based on 532,277,000 ordinary shares issued for approval of shareholders at the Annual General Meeting on 28 April The dividend is payable on 25 May

20 (d) Books closure date The register of Members and Transfers of the Company will be closed on 11 May 2006 for the purpose of determining shareholders entitlement to the dividend. Registrable transfers received by the Company s Share Registrar, M&C Services Private Limited, 138 Robinson Road, #17-00, The Corporate Office, Singapore up to 5.00 pm on 10 May 2006 will be registered before entitlements to the dividend are determined. 13. If no dividend has been declared/recommended, a statement to that effect. Not applicable. 20

21 13. Segmental revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year. a) Primary Reporting format - Business Segment The Group is organised into two main business segments: Cocoa ingredients - manufacturing and marketing of a wide range of speciality cocoa butter, liquor and powder under the Delfi brand. Branded Consumer - manufacturing and marketing of chocolate confectionery products under a portfolio of eight master brands and 19 key-sub brands and distribution of a wide range of food products and other consumer products, including third party brands. Cocoa Branded Ingredients Consumer Group US$ 000 US$ 000 US$ 000 Year ended 31 December 2005 Sales : - external sales 301, , ,324 - inter-segment sales 14,555-14, , , ,879 Elimination operations (14,555) 439,324 Segment result 19,487 15,354 34,841 Finance expense (4,958) Share of losses of associates 35 Profit before tax 29,918 Income tax expense (6,667) Profit after tax 23,251 Minority interest 449 Net profit 23,700 Other segment items Segment assets 190,168 92, ,642 Associated companies 2,864 Unallocated assets 1,288 Consolidated total assets 286,794 Segment liabilities 78,209 51, ,985 Unallocated liabilities 4,620 Consolidated total liabilities 134,605 Capital expenditure 18,163 24,466 42,629 Depreciation 5,817 2,893 8,710 Amortisation Other non-cash expenses 1, ,722 EBITDA 25,341 18,219 43,560 21

22 a) Primary Reporting format - Business Segment (continued) Cocoa ingredients Branded consumer Group US$ 000 US$ 000 US$ 000 Year ended 31 December 2004 Sales : - external sales 266, , ,926 - inter-segment sales 19,720-19, , , ,646 Elimination operations (19,720) 383,926 Segment result 15,138 15,614 30,752 Finance expense (6,907) Share of losses of associates (273) Profit before tax 23,572 Income tax expense (5,621) Minority interest 429 Net profit 18,380 Other segment items Segment assets 212,643 55, ,705 Associated companies 2,956 Unallocated assets 1,102 Consolidated total assets 271,763 Segment liabilities 105,050 26, ,529 Unallocated liabilities 4,335 Consolidated total liabilities 135,864 Capital expenditure 8,118 6,762 14,880 Depreciation 5,168 2,798 7,966 Amortisation 1,355-1,355 Other non-cash expenses EBITDA 22,019 17,842 39,861 22

23 b) Secondary Reporting format - Geographical Segment (Registration no C) The Group s two business segments operate in the following main geographical areas: Sales Total assets Capital expenditure US$'000 US$ 000 US$'000 US$ 000 US$'000 US$ 000 Indonesia 132, , ,004 96,754 25,360 7,605 Singapore 35,333 22, , ,983 1, Japan 35,686 24, Philippines 15,782 23,508 13,542 11,596 (28) 102 Thailand 6,585 9,210 13,932 17, Malaysia 12,916 18,053 69,821 63,413 10,561 5,383 Other countries in Asia 21,102 18, Europe 67,383 56, Australia 39,747 40, North America 33,330 11, Middle East 19,548 11, South America 16,083 18,242 21,368 18,667 4, Africa 3,633 4, , , , ,905 42,629 14,880 Eliminations - - (95,240) (79,142) - 439, , , ,763 42,629 14,880 Sales are based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographic area where the assets are located. 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Please refer to paragraph 8 for analysis. 15(a) A breakdown by sales (a) (b) (a) (b) Sales reported for first half year Operating profit/loss after tax before deducting minority interest reported for the first half year FY2005 FY2004 Change US$'000 US$'000 % 216, , % 10,704 8, % Sales reported for second half year 222, , % Operating profit/loss after tax before deducting minority interest reported for the second half year 12,547 9, % 23

24 15(b) Interested Person Transactions 1 Aggregate value of all interested person transactions (excluding and transactions conducted under a shareholders' mandate pursuant to Rule 920 of the SGX-ST Listing Manual) 1 Aggregate value of all transactions conducted under a shareholders' mandate pursuant to Rule 920 of the SGX Listing Manual US$ 000 US$ 000 PT Freyabadi Indotama - Sales of goods 2,732 - Purchase of products 4,553 7,285 PT Tri Keeson Utama - Sales of goods 1,778 PT Fajar Mataram Sedayu - Sales of goods 2,230 - Purchase of goods 236 2,466 PT Sederhana Djaja - Lease of properties 82 Megawati Leman - Lease of premises 13 Note: Aggregate value of all interested person transactions include transactions less than S$100, A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year as follows: Ordinary - Interim - Proposed Final FY2005 US$ 000 FY2004 US$ 000 4,372 5,110 4,000 2,986 Preference Not Applicable Not Applicable Total 9,482 6,986 BY ORDER OF THE BOARD Lian Kim Seng/Evelyn Chuang Secretaries 24