Statement of Corporate Governance
The Board of Directors (‘Board’) is responsible for the corporate governance of the Company. Corporate Governance is a matter of high importance and is undertaken with due regard to the Company’s stakeholders. The Board supports good corporate governance to be a fundamental part of the culture and the business practices of the Company. The Board considers that the Company has, throughout the year, complied with the Malaysian Code on Corporate Governance (‘Code’).
Board Structure
The Company is headed by the Board that focuses, leads, strategise and controls the direction of the Company. The Board is also responsible for the Company’s systems of internal control and risk management and for reviewing the effectiveness of those systems.
The Board operates as a single team, with a balanced mix of executive, non-executive and independent non-executive directors, so that there is no domination by a group or an individual in decision-making. The seven members of the Board comprise four independent non-executive directors, an executive director and two non-independent non-executive directors. The Chairman of the Board, Mr. Kwek Leng Peck is a non-independent non-executive director. The Independent Non-Executive Directors of the Board meets the criteria of the Code and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (‘Bursa Securities’). More than half of the Board is made up of independent non-executive directors who provide and bring with them experience and independent judgement gained at the most senior levels.
There is a clear division of responsibilities between the Non-Independent Non-Executive Chairman and the Executive Director to ensure a balance of power and authority. The Chairman heads the Board while the senior management members reports to the Executive Director/ Acting Group Chief Executive Officer and takes on the primary responsibility of executive management as authorised by the Board and to oversee the operations of the Company. During the financial year, one member of the Board has resigned as Executive Director and one new member has been appointed to the Board subsequently as an Independent Non-
Executive Director. Dato’ Khoo Peng Lai is also the Senior Independent Non-Executive Director to whom concerns on issues affecting the Company may be conveyed.
Together, the Board brings with them a wide range of experience in international business operations and strategy, marketing, financial, technical and international affairs necessary to ensure effective Board processes. A brief profile of each member of the Board is listed on pages 4 to 5 of the Annual Report.
The process of any appointment to the Board is fundamental towards enhancing governance. The Board’s Remuneration and Nomination Committee, comprising a majority of independent non-executive directors, is responsible for proposing, assessing and recommending candidates for all directorships to the Board. Under the Company’s Articles of Association, all members of the Board are required to retire, by rotation, once every three years. The members to retire in each year are the members who have been the longest in office since their appointment or re-appointment.
The individual members of the Board have attended various seminars, forums, talks and other programmes to keep abreast with relevant developments in the business environment as well as new regulatory requirements in their capacity as a director on the Board of the Company or as a director of other companies or listed issuers, both local and foreign. In addition, the Board is kept updated through internal circulars by the Company Secretary of relevant changes in regulatory requirements.
During the financial year ended 31 December 2010, the directors of the Company attended various training programmes and seminars which cover the following topics and newly appointed Directors have attended the Mandatory Accreditation Programme:
• The Irish Chamber of Commerce Talk on “What Future for Europe and the Euro?”
• 12th International Surveyors’ Congress – Reaching 50 and Surviving Ahead
• 18th World Congress of Accountants 2010
• Global outlook 2010 “Changing tides: Navigating the next wave”
• Global outlook 2010 “The global economy: balancing risks and opportunities”
• SID-KPMG luncheon talk on “Dos and Don’ts for M&A in China”
• Latest developments in corporate governance and new rules and regulations
• Stephen King luncheon presentation “Wrestling with Debt”
• SGX-SID listed company Directors Programme “LCD Module 3: Risk Management Essentials”
Meetings
The Board ordinarily meets four times per calendar year at quarterly intervals, with additional meetings convened when necessary. The meetings are scheduled in advance at the beginning of the year. During the financial year ended 31 December 2010, four meetings were convened and held. The attendance of each member of the Board is listed on the Director’s Profile on pages 4 and 5 of the Annual Report.
The Directors are supplied with information for each meeting in a timely manner in order to discharge their duties. Together with the agenda and notice of meeting, a set of board papers is issued to all members of the Board prior to and in advance of each meeting. All members of the Board have access to all information of the Company and to the advice and services of the Company Secretary and, if need be, the Board can obtain independent professional or other advice from external resources at the cost of the Company.
Board Committees
To assist in the execution of the Board’s responsibilities, the Board Audit and Risk Management Committee and the Remuneration and Nomination Committee have been established by the Board. The Remuneration and Nomination Committee, which is made up of a majority of independent non-executive directors, takes on the task of proposing, assessing and recommending candidates for directorships. The Board Audit and Risk Management Committee are made up wholly of independent non-executive directors and its Chairman is an Independent Non-Executive Director who is a member of the Institute of Chartered Accountants in Australia.
Director Remuneration
The Remuneration and Nomination Committee was formed by the Board to evaluate and recommend to the Board the remuneration of the Executive Director and senior management members. Determination on remuneration of Non-Executive Directors is a matter for the Board as a whole with the member of the Board concerned abstaining from deliberations and voting in respect of his own remuneration.
The aggregate remuneration of directors for the financial year is disclosed on page 53 of the financial statements in the Annual Report.
Shareholders
The Board acknowledges the need for shareholders and investors to be informed in a timely manner of all material information in relation to the Company. Various corporate announcements and timely release of quarterly financial results, the annual audited financial statements and annual report keep shareholders and investors fully informed about the performance and operations of the Company. The public, shareholders and investors can also access the Company’s website at www.tasekcement.com through the Internet for information on the Company and current and past records of its financial performance and its announcements.
The Company’s Annual General Meeting is an open forum for the Board and shareholders to communicate with each other. This presents an opportunity for shareholders to ask questions or seek clarification on the performance of the Company. The Notice of Meeting is circulated to all shareholders at least 21 clear days before the Meeting and shareholders are encouraged to attend the meeting. The Company, where it deems it practicable to do so, will enter into a dialogue with its institutional shareholders based on mutual understanding of objectives and entertains visits from shareholders, other fund managers or analysts.
Accountability and Audit
Responsibility statement by Directors on the preparation of the financial statements
The Board is required by law to prepare financial statements for each accounting period to prescribed accounting standards, where applicable, that gives a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results of the Group and of the Company for the period then ended.
In preparing the financial statements, the Board has:
- adopted and consistently applied suitable accounting policies and any new standards;
- made judgements and estimates that are prudent and reasonable;
- followed applicable accounting standards, subject to any material departures disclosed and explained in the notes to the financial statements; and
- prepared the financial statements on a going concern basis; unless it is inappropriate to presume that the Group and the Company will continue in business.
The Board is responsible for ensuring proper accounting records are kept, which disclose with reasonable accuracy at any time, the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the relevant laws and regulations. The Board is further responsible for taking reasonable steps to safeguard the assets of the Group and of the Company, and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Relation with the Auditors
A summary of the activities of the Board Audit and Risk Management Committee during the financial year are set out in the Board Audit and Risk Management Committee’s Report on pages 10 to 11 of the Annual Report.
The Committee maintains an appropriate relationship with the external auditors that is formal and transparent. Key features underlying the relationship of the Board Audit and Risk Management Committee with the Company’s external auditors are included in the Committee’s terms of reference on pages 10 to 11 of the Annual Report. The Committee meets with the external auditors at least twice a year without the presence of executive management. From time to time, the external auditors highlight matters that require attention to the Board Audit and Risk Management Committee and the Board.
Statement on Internal Controls
The Statement on Internal Control, set out on pages 16 to 17 of the Annual Report, provides an overview of the Company’s state of internal control. The Company’s system of internal controls and risk management framework are designed to manage, rather than eliminate, the risk of failure to achieve business objectives; any system can provide only reasonable and not absolute assurance against material misstatement or loss.
Material Contracts
Save for the following, the Company has not entered into any contract which is or may be material, not being contracts entered into in the ordinary course of business, during the financial year.
On 10 August 2010, the Company’s wholly-owned subsidiary, Posek Pembangunan Sdn. Bhd. entered into a Sale and Purchase Agreement with Steven Shanker A/L Chawapati (NRIC No. 740515-07-5305) for the sale of a piece of land in Seberang Prai for a consideration of RM2.64 million upon the terms and conditions of the Sale and Purchase Agreement.
On 13 July 2010, the Company’s wholly-owned subsidiary, Tasek Plantation Sdn. Bhd. entered into a Conditional Sale and Purchase Agreement with Ngan Yin Groundnut Factory Sdn. Bhd. (Company No. 24765-P) of No. 11A, Jalan Lasam, Ipoh, Perak to sell its oil palm estate known as Gunong Kuang Estate comprising Lot Nos. 12397, 15474, 36233, 17286, 34582, 34057 & 34059, all in the Mukim of Hulu Kinta, District of Kinta, Perak for a total cash consideration of RM53,888,999-00 only upon the terms and conditions of the Conditional Sale and Purchase Agreement.
On 27 May 2010, the Company announced the termination of the conditional Sale and Purchase Agreement with Loo An Swee and Tan Swee Tiang relating to the sale and purchase of the whole of the issued capital of Gridland Sdn. Bhd. (“GSB”), and proposed the acquisition of the whole issued share capital of PR Engineering Sdn Bhd (“PRE”) comprising 500,000 ordinary shares of RM1.00 each for a cash consideration of RM14.2 million by entering into a Sale and Purchase Agreement with Loo An Swee and Tan Swee Tiang (collectively the “Guarantors”) and GSB (“Seller”). PRE is a private limited company incorporated in Malaysia under the Companies Act, 1965 and a wholly-owned subsidiary of GSB with an issued and paid-up share capital of 500,000 ordinary shares of RM1.00 each. PRE is the sole legal and beneficial owner of a limestone hill held under HS (D) 180252 PT 21302 Mukim Sungai Raya, Daerah Kinta, Negeri Perak and HS (D) 180253 PT 21303 Mukim Sungai Raya, Daerah Kinta, Negeri Perak.
Statement on Corporate Responsibility
The Company has and is practising corporate responsibility towards its employees and workers, the community and to the environment. The Company continues to maintain its ISO 14001 and OHSAS 18001 certifications in its efforts to systematically address its responsibility for health, safety and environment. In its effort to minimise any adverse impact on the environment, it is continuously exploring and procuring suitable waste products from various companies for use as alternative fuel or raw material in its manufacturing processes. It is also constantly upgrading its plant to reduce carbon footprints, heat generation and dust emissions. Additionally, the Company has produced, sold and encourage customers to use bagged blended cement in order to reduce carbon emissions. During the year, the Company also conducted charity event and visits to old folks’ homes, orphanages, welfare homes, handicapped and disabled children’s homes.
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