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A.
STATEMENT OF CORPORATE GOVERNANCE

The Board of Directors recognises the importance of corporate governance and is taking steps to continuously evaluate and improve management practices and systems to enhance the standard of corporate governance applied by the Group. In doing so, the Board has taken guidance from the new Malaysian Code on Corporate Governance 2012 issued in March 2012 ("MCCG 2012").

Roles and Responsibilities of Board

The Board has overall responsibility for the performance and conduct of the Company and the Group. The role of the Board is to provide strategic guidance to the Company and effective oversight of its Management, for the benefits of Shareholders and other stakeholders. Day to day management is delegated to the executive directors and management under the steward of the Managing Director. The independent non-executive directors are involved in various board committees and provide an independent assessment and objective views on management proposal.

The Board has responsibilities to review and monitor corporate performance, compliance with ethical standards, principal risks and internal control system appropriate for the size and complexity of the business.

Board Composition and Balance

The Board consists of one Non-Independent Non-Executive Chairman, four Executive Directors and two Independent Non-Executive Directors. The profiles of the directors are set out in Profile of Directors section of this Annual Report. The Board is satisfied that having regard to the nature, complexity and scale of the existing business, the interests of the minority shareholders are adequately represented and protected with the current composition of the Board. The Board recognizes that independent directors bring independent and objective judgment to the Board and play a critical role in any situation where a conflict of interest may arise. The Board has assessed the independence of the independent non-executive directors, who constitute one third of the Board, and are satisfied that they have provided objective and independent judgment at board deliberations. The positions of Chairman and CEO are held by different individuals and the chairman is a non-executive director who role is to lead the Board in meetings. Although the chairman is not an independent director the Board does not comprise a majority of independent directors, the Board is satisfied that the independent directors have the skills and experience to exert their independent judgment to bear on issues of strategy, performance and resources including standards of ethics and conduct

Board Meetings

The Board holds meetings at least four times in each financial year and will hold additional meetings if the situation requires. At each meeting, the Board will consider: -

an operational report from the Managing Director;
a report on the financial performance;
specific proposals for capital expenditure and acquisitions, if any;
major issues and opportunities for the Company; and
approve the Interim Financial Reports for announcement to relevant authorities.

Supply of Information

The Directors have full and unrestricted access to all information pertaining to the Group's affairs. All Directors receive relevant board papers prior to board meetings. The contents of the board papers include agenda for the meeting, minutes of previous board meeting, reports on performance of key operating units, announcements released to Bursa Malaysia Securities Berhad and matters arising for Board deliberations.
All Directors have access to the advice and services of the Company Secretaries and the advice of such other independent professional as may be deemed necessary at the Company's expense.

Board selection and appointment

The composition of the Nomination Committee is a team of wholly Non-Executive Directors headed by a senior independent director. The Nominating Committee is responsible for the selection of directors to ensure that the members of the Board reflect a broad range of experience, skills and knowledge required to successfully direct and supervise the Group's business activities. For this purpose, the Committee regularly assesses the effectiveness of the Board as a whole and the performance of the Directors of the Company.

Re-election

In accordance to the Article 98 of the Company's Articles of Association, all Directors, including the Managing Director, shall retire from office once at least in each three-year period but shall be eligible for re-election. Additionally, where the Managing Director is appointed for a fixed term, that term shall not exceed three years.

Pursuant to Section 129 (6) of the Companies Act, 1965, directors who exceed the age of 70 years shall retire at every AGM and may offer themselves for re-election to hold office until the next AGM.

Directors’ Remuneration

The directors remuneration scheme is linked to service seniority, experience, scope of responsibilities and performance.

The composition of the Remuneration Committee is a team of wholly Non-Executive Directors and is tasked with ensuring that the remuneration package is competitive to attract and retain executive directors. The Remuneration Committee has a policy to reviews, assesses and recommends to the Board the remuneration packages of Executive Directors. The Executive Directors play no part in decisions on their own remuneration.

The remuneration packages of Non-Executive Directors are determined by the Board as a whole with the individuals concerned abstaining from discussion on their own remuneration.

Directors’ Training

All the Directors have to attend Bursa Malaysia Securities Berhad's Mandatory Accreditation Program ("MAP"). They attend further training program from time to time to keep abreast with the relevant changes and development in laws and regulations as well as the business development.

The Board on a continuous basis, evaluate and determine the training needs of all Directors to enable the Directors to effectively discharge their duties. All Directors will be considered for continuous training on yearly rotation basis.

Shareholders

The Board believes in maintaining an effective communication policy that encourages feedback and comments from shareholders during the AGM. Each item of special business included in the notice is accompanied by full explanation of the effects of a proposed resolution. In case of re-election of Directors, the relevant particulars relating to the Directors are stated to assist shareholders in making an informed decision. Communication with shareholders and the general public is also maintained through various announcements released to Bursa Malaysia Securities Berhad including the mandatory announcement of interim financial reports.

The Company has also maintained a website for shareholders and the public to access corporate information, financial statements, and announcements released to Bursa Malaysia.

The Board has appointed Haji Hussein Bin Hamzah to be the senior independent non-executive director to whom concerns may be conveyed by shareholders and the general public.

   
   
   
B.
ACCOUNTABILITY AND AUDIT
   
  Audit Committee

The full Audit Committee report including its membership, composition, roles and responsibilities are laid out in the Audit Committee Report.

Financial Reporting

The Board endeavours to present a balanced and understandable assessment of the Group's position and prospects when releasing the annual financial statements, Chairman's Statements and quarterly interim reports on consolidated results. All financial reports are reviewed by the Audit Committee before approval by the Board. One of the members of the Audit Committee is a qualified accountant and a member of the Malaysian Institute of Accountants. The responsibility of the Audit Committee in relation to the financial reporting is detailed in the Audit Committee Report.

Internal Control

The Board acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard shareholders' investment and the Group's assets. An integral part of this system of internal control is the establishment of an internal audit department that is independent of the activities they audit and is able to exercise due professional care.

Relationship with External Auditors

The duties of the Audit Committee include keeping under review the scope and results of the external audit and its effectiveness and the independence and objectivity of the auditors. The external auditors have unrestricted assess to the Audit Committee and the findings of the external auditors are reported to the Audit Committee at least twice a year.
   
   
   
C.
DIRECTORS' RESPONSIBILITY STATEMENT
   
  The Directors have overall responsibility under the Companies Act, 1965 for the preparation of annual financial statements in accordance with applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the affairs of the Company and the Group at the end of the financial year and of the results and cash flows for the year. The Directors are also required to ensure that proper accounting and other records are maintained to sufficiently explain the transactions and cause these records to be kept in such a manner as to enable them to be conveniently and properly audited.

The Listing Requirements of Bursa Malaysia Securities Berhad require that the annual audited financial statements be prepared in accordance with applicable Financial Reporting Standards in Malaysia and the Ninth Schedule of the Companies Act 1965.

In preparing the annual audited financial statements, the Directors have:-
Selected appropriate accounting policies and applied them consistently
Ensured that accounting standards adopted are in compliance with applicable Financial Reporting Standards in Malaysia and where applicable the International Accounting Standard Committee (IASC)
Made judgements and estimates that are reasonable and prudent
Ensured complete disclosures of all information required under the Companies Act 1965 and the Listing Requirements of Bursa Malaysia Securities Berhad
   
   
   
 
   
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