Oriental Holdings Berhad (5286-U)

The Board of Directors (the “Board”) recognises the importance of adopting high standards of corporate governance within the Group. The Board views corporate governance as synonymous with four key concepts, namely transparency, accountability, integrity as well as corporate performance to maximize stockholder’s value.

As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form. The Board is fully committed to the maintenance of high standards of corporate governance by supporting and implementing the prescriptions of the Principles and Best Practices set out in Parts 1 and 2 of the Malaysian Code on Corporate Governance (the “Code”) respectively.

The Group recognises the vital role played by the Board in the stewardship of its direction and operations, and ultimately the enhancement of long-term shareholder value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including strategic direction, establishing goals for Management and monitoring the achievement of these goals.

The Board has formalised a Board Charter which amongst others provides guidance for Directors and Management with regards to the role of the Board and its Committees, the requirements of Directors in carrying out their stewardship role and in discharging their duties towards the Group, Board’s operating practices as well as delineates a formal schedule of matters reserved for the Board’s decision.

Additionally, the Board also deliberated and approved an Investment Policy which serve to provide a clear guidance on investment appraisal covering feasibility evaluation, review and approval, implementation, monitoring and reporting of investment outcome against target.

The Performance Coordinating Team (“PCT”) has been established to review and report the operational and financial performance of their respective business divisions to the Executive Committee (“EXCO”) in assisting them to discharge their oversight role of the Group business activities. The Key Performance Indicator (“KPI”) reporting is conducted on a quarterly basis.

The Board ordinarily meets at least four (4) times a year at quarterly intervals with additional meetings convened when urgent and important decisions need to be taken between the scheduled meetings. During the financial year, the Board met on five (5) occasions, where it deliberated upon and considered a variety of matters including the Group’s financial results, major investments and strategic decisions on the direction of the Group.

The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. All proceedings from the Board meetings are recorded and the minutes thereof signed by the Chairman of the meeting.

	Director	Attendance
Chairman (Executive)	Dato’ Loh Cheng Yean	4/5
Group Managing Director	Dato’ Robert Wong Lum Kong, DSSA, JP	5/5
Group Managing Director	Dato’ Lim Su Tong @ Lim Chee Tong	5/5
Executive	Loh Kian Chong (appointed on 15 May 2009)	3/3
Non-Executive	Dato’ Dr. Tan Chong Siang	5/5
Non-Executive	Sharifah Intan binti S.M.Aidid	5/5
Non-Executive	Shoichi Harada (appointed on 29 April 2009)	4/4
Non-Executive	Atsushi Fujimoto (resigned on 29 April 2009)	0/2
Non-Executive	Diong Chin Teck @ Tiong Chin Sang (resigned on 27 August 2009)	4/4
Independent Non-Executive	YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen bin Tengku Ismail	5/5
Independent Non-Executive	Tunku Dato’ Dr. Ismail bin Tunku Mohammad Jewa (demised on 19 August 2009)	1/3
Independent Non-Executive	Dato’ Loh Say Bee	5/5
Independent Non-Executive	Mary Geraldine Phipps (appointed on 14 August 2009)	2/2

The Audit Committee has written terms of reference to discharge its responsibilities and the Board receives reports of its proceedings and deliberations. The Chairman of the Audit Committee reports to the Board the outcome of the Committee meetings and matters from such reports is incorporated in the minutes of the full Board meeting.

In accordance with the revised Code, Audit Committee should comprise no fewer than 3 members and must be fully non-executive directors with a majority of them being independent directors. In line with the revised Code, all 3 members of the Audit Committee are Independent Non-Executive which also satisfies the test of independence under the Paragraph 15.09 of the Listing Requirements. The role of the Audit Committee and its function is explained on pages 39 to 43 of this annual report.

The Nominating Committee comprising exclusively non-executive directors, a majority of whom are independent, as summarised in the table below with the responsibility for proposing new nominees to the Board and for assessing directors on an ongoing basis.

During the financial year, the Nominating Committee Members met on one (1) occasion to deliberate and assess the effectiveness of the Board as a whole, the committees of the Board, and the contribution of each individual director. All assessment and evaluations carried out by the Nominating Committee in discharging its duties are documented in the minutes of meeting. The details of each of the Nominating Committee Members’ meeting attendance during the financial year are as follows:

The Board appoints its members through a formal and transparent selection process which is consistent with the Articles of Association of the Company. This process has been reviewed, approved and adopted by the Board. All new appointees will be considered and evaluated by the Nominating Committee for the candidates’ ability to discharge responsibilities as expected from them. The committee will then recommend the candidates to be approved and appointed by the Board. The Company Secretary will ensure that all appointments are properly made and that legal and regulatory obligations are met.

The Remuneration Committee comprises one Independent Non-Executive Directors namely Tengku Rithauddeen and two Non-Independent Non-Executive Directors, Puan Sharifah Intan Binti S M Aidid and Dato’ Dr. Tan Chong Siang. The details of each of the Remuneration Committee Members’ meeting attendance during the financial year are as follows:

At the date of this statement, the Board consists of ten (10) members comprising three (3) Independent Non-Executive Directors, four (4) Executive Directors and three (3) Non-Executive Directors. A brief profile of each Director is presented on pages 14 to 19 of this Annual Report.

The concept of independence adopted by the Board is in tandem with the definition of an independent Director in Section 1.01 of the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and PN No. 13/2002. The key elements of fulfilling the criteria are the appointment of Directors who are not members of Management (Non-Executive Directors) and who are free of any relationship which could interfere with the exercise of independent judgment or the ability to act in the interests of the Company. The Board complies with paragraph 15.02 of the LR, which requires that at least two Directors or one-third of the Board of the Company, whichever is higher, are Independent Directors.

The Directors, with their different backgrounds and specialisations, collectively bring with them a wide range of experience and expertise in areas such as finance, corporate and legal affairs, marketing and operations. The Executive Directors are responsible for implementing the policies and decisions of the Board, overseeing the operations as well as coordinating the development and implementation of business and corporate strategies. The Independent Non-Executive Directors bring to bear objective and independent judgment to the decision making of the Board and provide a capable check and balance for the Executive Directors.

The Non-Executive Directors contribute significantly in areas such as policy and strategy and performance monitoring. Together with the Executive Directors who have an intimate knowledge of the business, the Board is constituted of individuals who are committed to business integrity and professionalism in all its activities.

There is a clear division of responsibilities at the head of the Company to ensure a balance of authority and power. The Board is led by Dato’ Loh Cheng Yean as the Executive Chairman whilst the executive management of the Company is led by Dato’ Robert Wong Lum Kong, DSSA, JP, Dato’ Lim Su Tong @ Lim Chee Tong and Loh Kian Chong, the Executive Directors. The Board has also identified YM Tengku Tan Sri Dato’ Seri Ahmad Rithauddeen Bin Tengku Ismail as the Senior Independent Non-Executive Director to whom concerns of Directors may be conveyed.

The Board recognises that the decision-making process is highly contingent on the strength of information furnished. As such, Directors have unrestricted access to any information pertaining to the Group.

The Chairman, with the assistance of the Company Secretary, ensures that all Directors have full and timely access to information with Board papers distributed in advance of Board meetings. This ensures that Directors have sufficient time to appreciate issues deliberated at Board meeting and expedites the decision-making process.

Every Director also has unhindered access to the advice and services of the Company Secretary. The Board believes that the current Company Secretary is capable of carrying out her duties to ensure the effective functioning of the Board. The Articles of Association specify that the removal of the Company Secretary is a matter for the Board as a whole.

Prior to meetings of the Board and the Audit Committee, appropriate documents which include the agenda and reports relevant to the issues of the meetings covering the areas of strategic, financial, operational and regulatory compliance matters, are circulated to all members to obtain further explanation, where necessary, in order to be properly briefed before the meetings.

In respect of soliciting independent professional advice, the Board as a whole will determine, whether as a full Board or in their individual capacity, to take this measure where necessary and under appropriate circumstances in furtherance of their duties. The independent professional advice, where obtained, will be at the Company’s expense. Nevertheless, where necessary and under appropriate circumstances in furtherance of his duties, a Director may do so with the prior consent of the Board.

The Board as a whole, ensures that it recruits to the Board only individuals of sufficient caliber, knowledge and experience to fulfill the duties of a Director appropriately. The board ensures a continuous training programme is in place for new and existing members of the Board. Furthermore the new members of the Board also receive briefing on the Group’s operations and visit the Group’s premises to enhance their knowledge on the Group’s operations. This is geared towards ensuring that new Directors are able to appreciate the Group’s operating environment and business dynamics and therefore able to contribute effectively in the Board’s deliberation.

As at the date of this Statement, all Directors have attended and successfully completed the Mandatory Accreditation Programme (MAP). During the year, the Directors have pursued relevant courses and attended seminars to keep abreast with industry, regulatory and compliances issues, trends and best practices. Seminars and training programmes attended by the Directors for the year are as follows:

The Company Secretary also circulates relevant guidelines to update the Directors on statutory and regulatory requirements changes from time to time. The Directors will continue to undergo other relevant training programmes to further enhance their skills and knowledge, as appropriate.

The Articles of Association provide that all Directors are subject to retirement and at least one third of the Board is subject to retirement by rotation at each Annual General Meeting (“AGM”). The Directors to retire in each year are those who have been longest in office since their appointment or re-appointment. A retiring Director is eligible for re-appointment. New Directors appointed to the Board shall also retire at the Annual General Meeting following their appointment. In any of the circumstances, the Directors are eligible for re-election. This provides an opportunity for shareholders to renew their mandate.

The election of each Director is voted on separately. To assist shareholders in their decision, sufficient information such as personal profile, meetings attendance and the shareholdings in the Group of each Director standing for election are furnished in the Annual Report accompanying the Notice of AGM.

The Remuneration Committee is responsible for recommending the remuneration framework and the remuneration packages of Executive Directors to the Board, to ensure the rewards are linked to their performance and contributions to the Group’s growth and profitability in order to align the interest of the Directors with those of shareholders. The Committee also ensures the level of remuneration for Executive Directors are linked to their level of responsibilities undertaken and contribution to the effective functioning of the Board. None of the Executive Directors participated in any way in determining their individual remuneration.

Type of remuneration	Executive Directors RM’000	Non-Executive Directors RM’000	Total RM’000
Fees	641	506	1,147
Salaries	2,092	-	2,092
Other emoluments	5,513	33	5,546
Total	8,246	539	8,785

	Number of directors
	Executive	Non-executive
RM 0- RM 50,000 RM 50,001 - RM 100,000	- -	3* 4
RM 100,001- RM 150,000	-	1
RM 1,000,001 - RM 1,050,000 RM 1,100,001 - RM 1,150,000	1 1	- -
RM 2,900,001 - RM 2,950,000	1	-
RM 3,150,001 - RM 3,200,000	1	-
	4	8

The Board strives to maintain an active dialogue with stockholders through the Annual Report, AGM and Extraordinary General Meetings. It has been the Company’s practice to send the Notice of AGM and related papers to stockholders at least twenty-one (21) working days before the meeting. At the AGM, the stockholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations in general.

In addition, the Company makes various announcements through Bursa Securities, in particular, the timely release of quarterly financial results within two months from the close of a particularfinancial quarter.

While the Company endeavours to provide pertinent information to its stockholders and stakeholders, it is mindful of the legal and regulatory framework governing the release of material and price-sensitive information. In any of the circumstances, the Directors are cautious not to provide undisclosed material information about the Group and frequently stress the importance of timely and equal dissemination of information to stockholders and stakeholders.

During the AGM, the Board takes the opportunity to present a comprehensive review of the progress and performance of the Group. The stockholders are given both the opportunity and the time to seek clarifications or raise questions on the agenda items of the general meetings, where the Board would respond with the appropriate answers.

The Company’s website at www.ohb.com.my contains vital information concerning the Group which is updated on a regular basis and stockholders are able to put questions to the Company through the website.

The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcements of results to Bursa Securities as well as the Chairman’s statement and review of operations in the Annual Report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.

The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and their financial performance and cash flows for the year then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.

The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Board acknowledges its responsibilities for the Group’s systems of internal control covering not only financial controls but also operational controls, compliance controls and risk management.

Key features underlying the relationship of the Audit Committee with the internal and external auditors are included in the Audit Committee Report as detailed on pages 39 and 40 of this Annual Report.

A summary of the activities of the Audit Committee during the financial year, including the evaluation of the independent audit process, is set out in the Audit Committee Report on pages 39 and 40 of this Annual Report.

The Board and Management strive to maintain a professional and transparent relationship with the external auditors in the conduct of the audit and towards ensuring compliance with the requirements of the appropriate accounting standards. Additionally, the Audit Committee has been explicitly accorded the power to communicate directly with the external auditors.