Holy cow, that is a really old version of the power manager. Just as a
disclaimer, we're not doing maintenance releases for previous versions.

I've looked into the source of 1.0.11 and locking the screen upon
closing the lid is the default action, so the fact that you don't have
an entry for that in your settings.xml file is ok. The on-battery
setting also looks ok, cause suspend has the value 1.

I've browsed through the git history of xfpm since 1.0.11 but couldn't
see any relevant commits for your bug. However I vaguely remember having
problems myself on 12.04.

The current LTS release, 14.04, has a newer version of xfpm and also
uses other software for suspend (the aforementioned logind). You could
try whether that helps.

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https://bugs.launchpad.net/bugs/1014891

Title:
  Laptop doesn't suspend when power is unplugged while lid is closed

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