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Corporate Governance

The Board of Directors observes the Malaysian Code on Corporate Governance (Revised 2007) (“the Code”) and applies its principles and best practice in the Group towards achieving the optional governance framework at all times.

The Board is pleased to set out below the compliance of the Group with the Best Practices set out in Part 2 of the Code except otherwise stated.

 

DIRECTORS
  

The Board

The Board currently has eight (8) members, four (4) Executive Directors and four (4) Non-Executive Directors, three (3) of whom are Independent Non-Executive Directors. This composition has complied with the minimum one-third requirement for Independent Directors to be on the Board. The Board is led by YBhg. Tan Sri Dato’ Azizan Bin Husain, an Independent Non-Executive Director and Chairman, while the executives are led by Datuk Son Chen Chuan, the Managing Director.

Overall, the Board is responsible for the application of good corporate governance, formulation of policies and overseeing operations. The role of Chairman and Managing Director of the Company are separated to ensure a balance of power and authority. The Independent Non-Executive Chairman is responsible for the orderly conduct and effectiveness of the Board, whist the Managing Director is to delegate the Management and implementation of policies and strategies adopted by the Board and the running of operations.

The Non-Executive Directors are independent of the management and majority shareholders. Together, they play an important role by contributing their knowledge, advice and experience towards making independent judgement on issues of strategies, performance, resources and standard of conducts. The Directors’ profiles are set out on pages 11 to 13 of this Annual Report.

 

Board Meetings

During the financial year ended 31 March 2010, four (4) Board Meetings were held. Set out below is the record of attendance of the Board Members.

Name
Designation
No. of Board Meetings Attended
Percentage of Attendance (%)
Y. Bhg. Tan Sri Dato’ Azizan Bin Husain
 ChairmanIndependent Non-Executive Director
4/4
100
Datuk Son Chen Chuan
Managing Director
4/4
100
Hoo Beng Lee
Executive Director
4/4
100
Son Tong Leong
Executive Director
4/4
100
Son Tong Eng
Executive Director
4/4
100
Lim Keat Sear
Non-Executive Director
4/4
100
Lim Hwa Yu
Independent Non-Executive Director
4/4
100
Datuk Jeffery Ong Cheng Lock Independent Non-Executive Director 4/4 100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Board Committees

The following committees have been established to assist the Board to discharge its duties and responsibilities. These committees operate under the defined terms of reference.

i) Audit Committee
ii) Nomination Committee
iii) Remuneration Committee

i. Audit Committee

The composition and details of the committee are set out on pages 21 to 24 of this Annual Report.

ii. Nomination Committee

The Committee is to assess and recommend nominees to the Board, to review mix skills and experience of the Board members and the effectiveness of the Board as a whole.

The committee is made up by majority of Independent Non-Executive Directors.

Chairman
:
Y. Bhg. Tan Sri Dato’ Azizan Bin Husain (Independent Non-Executive Director)
Members
:
Lim Keat Sear (Independent Non-Executive Director)Datuk Son Chen Chuan (Managing Director)

iii. Remuneration Committee

The primary function of the Committee is to set up the policy framework and recommend to the Board on the remuneration package for the Directors.

The Committee is made up wholly of Non-Executive Directors and the majority are independent. The members of the Committee are as follows:-

Chairman
:
Lim Hwa Yu (Independent Non-Executive Director)
Members
:
Datuk Jeffery Ong Cheng Lock (Independent Non-Executive Director)Lim Keat Sear (Non-Executive Director)

There were two (2) meetings held during the financial year.

 

Supply of Information

The Directors are supplied with information on a timely basis. The agenda and Board papers are circulated to the members prior to the meeting and if required, they may request additional information or clarification from the Management. The Board has unrestricted access to any information pertaining to the Group as well as to the advice and services of the Company Secretary and independent professional advisers whenever appropriate at the Company’s expense. Members of the Board are regularly updated should there be any new statutory and regulatory requirements.

 

Retirement and Re-election

The retirement and re-election of directors are in accordance to the Articles of Association of the Company, which provides that all Directors of the Company, including the Managing Directors are subject to retirement. At every annual general meeting, at least one third in number of the Board and who have been longest in office are subject to retirement by rotation. A newly appointed director shall retire at the next coming annual general meeting. A retiring Director is eligible for re-appointment.

 

Corporate Social Responsibility

The Company recognises the importance of CSR and has taken a proactive approach wherever possible to provide monetary and products contribution to governmental departments, non-profitable and charitable organizations. The Company also organizes educational factory tours for various educational and governmental institutions.

Furtherance to the above, in support of the local institutes of higher learning, the Company accepts undergraduates to perform their industrial training in various departments at the factories owned by the Company.

The Company has contributed financial assistance to the following charitable organizations:

    1. Lion Club of Sibu Pahlawan – Donation for Philippines Typhoon Relief Mission
    2. Dana Pembangunan Pendidikan dan Kebajikan Mubarak Negeri Melaka
    3. Persatuan Peniaga Barang Makanan dan Mainan Semenanjung Malaysia Utara
    4. Pertubuhan Penganut-Penganut Tokong Lao Shi
    5. Ong Yah Hui Yang Keong
    6. Sam Tiong Keng
    7. Persatuan Ibu Bapa dan Guru Sekolah Jenis Kebangsaan (C) Yok Bin Melaka

At company level, the Company hosts its annual dinner for all its local and foreign employees to promote harmonious ties between all level of employees and as a token of recognition from the Top Management for the commitment and dedication of the employees

 

 

DIRECTORS’ REMUNERATION

The aggregate remuneration of Directors for the financial year ended 31 March 2010 are as follows:-

Directors’ fees (RM)
Salaries/Allowances
Bonuses
Benefits-in-kind
Otheremoluments
Total
Company
Subsidiaries
RM
RM
RM
(RM)
(RM)
(RM)
(RM)
Executive
80,000
96,000
1,300,000
330,000
75,628
337,540
2,219,168
Non-Executive
80,000
Nil
60,000
Nil
Nil
4,800
144,800

The number of Directors of the Company whose total remuneration fall within the following band:-

Range of Remuneration
Number of Directors
Executive
Non-Executive
Less than RM50,000
Nil
3
RM50,000 – RM100,000
Nil
1
RM100,001 – RM150,000
Nil
Nil
RM150,001 – RM200,000
Nil
Nil
RM200,001 – RM250,000
Nil
Nil
RM250,001 – RM300,000
Nil
Nil
RM300,001 – RM350,000
Nil
Nil
More than RM350,000
4
Nil

DIRECTORS’ TRAINING

The Group acknowledges the importance of continuous education and training to the Board members.

During the financial year, Datuk Son Chen Chuan, Mr. Son Tong Leong, Mr. Son Tong Eng, Mr. Hoo Beng Lee, Mr. Lim Keat Sear and Datuk Jeffery Ong Cheng Lock attended the sessions on “Engagement versus Activism – Achieving the Right Balance?” and “The Changing Landscape of Shareholder Activism – The Roles We Play” organized by the Securities Commission and Bursa Malaysia.

Tan Sri Dato’ Azizan bin Husain attended “Character First, Implementation Seminar – Character Recognition Workshop” on 25 May 2010.

Meanwhile, Mr. Lim Hwa Yu had attended the following sessions:-

  1. MIA Dialogue;
  2. Preparing for Convergence : Understanding International Financing Report Standards & International Accounting Standards
  3. Latest Development on Transfer Pricing in Malaysia and Tax Cases and Public Rulings
  4. National Seminar on Taxation 2009
  5. An overview of GST Bill (Its Impact, Policy and Implementation).

 

RELATIONSHIP WITH SHAREHOLDERS & INVESTORS

Shareholders and investors’ relationship is of a matter of importance today. Effective communication will help to enhance the confidence of the shareholders and investors towards the Company. The Board communicates information on operations, activities and performance of the Group to the shareholders, investors and public via the following:-

  1. The Annual Report, which contains the financial and operational review of the Group’s business, corporate and financial information and the information on the Board and Committees.
  2. Various announcements made to Bursa Malaysia.
  3. The website of the Company which provides the updated information of the Company such as products and activities.

The Annual General Meeting represents the principal forum for dialogue and interaction with all shareholders. At each annual general meeting, the Board presents the progress and performance of the Group’s business and invites shareholders to participate in the question and answer session.

 

ACCOUNTABILITY AND AUDIT

[hSmallFinancial Reporting[/hSmall]

The Board, assisted by the Audit Committee aims to present a balance and understandable assessment of the Company’s financial position and prospects through its annual audited financial statements and quarterly reports. A statement by the Directors of their responsibilities in relation to the financial statements is set out on page 18 of this Annual Report.

[hSmal]Internal Control and Risk Management[/hSmall]

The Board acknowledges the importance of internal controls and risk management both in the strategy and operational level. The Board recognises its responsibility for a sound internal control system covering not only financial controls but also operational and compliance controls as well as risk management.

Information on the Group’s Internal Control is presented in the Statement on Internal Control set out on pages 19 and 20 of this Annual Report.

[hSmal]Relationship with Auditors[/hSmall]

The Audit Committee maintains a transparent relationship with the internal and external auditors in seeking their professional advice and ensuring compliance with the applicable laws and regulations.

The Statement on Internal Control has been duly reviewed by the external auditor. The role of the Audit Committee in relation to the auditors is set out on pages 21 to 24 of this Annual Report.

 

STATEMENT OF DIRECTORS’ RESPONSIBILITY FOR PREPARING THE FINANCIAL STATEMENTS

In compliance with the Companies Act 1965, the Directors are responsible in the preparation of financial statements prepared for each financial year to give a true and fair view of the state of affairs of the Group and the Company and of the results and cash flow of the Group and the Company for the financial year end.

The Directors have ensured that in preparing the Financial Statements:-

  1. Suitable Accounting Policies have been adopted and applied consistently;
  2. Prudent judgment and estimates have been made, where necessary;
  3. Requirements of the MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities have been followed.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and to ensure that the Financial Statements presented comply with the requirements of the Companies Act 1965 and other regulatory requirements.

The Board of Directors accepts responsibility for the integrity and objectivity of the Financial Statements presented. The responsibility of the Auditors in relation to the Financial Statements appears in the Independent Auditors’ Report.

This statement was made by the Board of Directors in accordance with a resolution of the Board of Directors dated 7 July 2010.