Chairman s Statement

Transcription

1 Chairman s Statement Westin Melbourne, Australia The Westin Melbourne is a full service, luxury 5-star hotel with 262 rooms and is located in the Central Business District of Melbourne. The hotel underwent a major refurbishment of its 262 rooms. Westin Melbourne celebrated its 10th anniversary with a re-launch after the refurbishment. The Westin Melbourne achieved the highest Average Daily Rate and Revenue Per Available Room exceeding its competitive set by A$60.73 and A$53.28 respectively, this is an increase of 1.2% and 3.4% over the previous year. CORPORATE GOVERNANCE Good corporate governance plays a key role in the Group's growth and development. We will continue to improve on transparency and corporate governance processes in the interest of our shareholders. PROSPECTS AND OUTLOOK Aava Whistler, Canada Aava Whistler, our 4-star hotel with 193 guest rooms opened its doors in November 2009, which was a busy holiday season. It benefited from the Winter Olympics in February 2010 that created tremendous energy and positive enthusiasm. Aava Whistler achieved 3 Diamond rating by the AAA/CAA, 4 Peak Rating by Tourism Whistler and top 10 placements on Trip Advisor in Whistler. It was also voted Ò Snowboarders ChoiceÓ Hotel and the most bike friendly hotel in Whistler. Swissôtel Merchant Court, Singapore Swiss tel Merchant Court (Ò SMCÓ ), a deluxe 476 room hotel with an MRT station at its doorsteps is ideally located at the crossroads of Clarke Quay, the Chinatown historic district and the financial district in Singapore. In year 2010, SMC won 8 awards including the Excellent Service Award 2010, HotelClub Hotel Awards 2010 for Outstanding Service in Singapore and Agoda Gold Circle Award 2010 whilst the hotelõ s restaurant, Blue Potato was awarded Singapore Tatler Best Restaurant 2010 and Singapore Service Star Occupancy, Average Daily Rate and Revenue Per Available Room increased 14.5%, 3.8% and 18.9% respectively. The increase in the hotelõ s occupancy was the highest in its competitive set. Globally, the developing economies are advancing at a more robust pace compared to the more advanced economies. Asia has benefitted from the influx of capital and liquidity and Asian economies will drive global growth this year owing to the buoyant economic activities. Similarly, many emerging and developing economies have seen strong growth and low unemployment rate. However, the rising cost pressure is a challenge for these developing economies as prices of crude oil and other commodities stay elevated. Based on IMFÕ s April 2011 World Economic Outlook, global growth will probably advance by 4.4% in 2011 on the back of the strong growth of 6.5% for the emerging and developing economies. 26 TA Enterprise berhad Annual Report 2011

2 Chairman s Statement Meanwhile, the IMF projects that the advanced economies will grow at an average of 2.4% this year. The advanced economies are experiencing rising confidence with an improving employment market and manufacturing activities. The leading indicator also suggests a rebound to growth following the US housing bubble crisis and financial meltdown. Rising energy, commodity and food prices will be the global challenges ahead. Inflationary pressure is expected to broaden and further tightening of monetary policies is expected for developing economies as consumption improves in tandem with its growth advantage. In contrast, inflation in advanced economies particularly the US will remain under control amid weak labour market conditions. The main challenges for the developed countries are to preserve fiscal credibility, to implement an effective and comprehensive reform of the financial sector and to reduce the high unemployment rate. The aftermath of the Japan earthquake on the other hand posts uncertainties in terms of international trade. Global trade with Japan will be affected should Japanese businesses and manufacturers be slow in resuming their usual operations. As to whether Malaysia could benefit from the quake effect in terms of manufacturing production and Electric & Electronic exports depends highly on the manufacturing capacity and also the sourcing of raw materials. Cumulatively, Japan accounted for 11.5% of MalaysiaÕ s total exports as at YTD February Imports on the other hand contributed 12.2% to MalaysiaÕ s total imports to date. In terms of net exports, Malaysia had maintained a sustainable surplus totalling RM2.0 billion with Japan as at YTD February Economic activities in Malaysia were robust during the start of the year, specifically in the manufacturing segment which was boosted by local and external consumption demand. Meanwhile, the downside risk to the economy is exacerbated by the rise in cost push pressure and higher input prices. Despite government subsidies, inflation is gradually trending upwards. We believe measures to boost domestic expansion via various Economic Transformation Related projects will play a dominant role in achieving our 2011 GDP growth forecast of 6.0% on the back of a still tame inflation of 3.5%. A normalisation of the Overnight Policy Rate to 3.5% by end 2011 will be the important catalyst to lead to the strengthening of the ringgit to our year-end-target of RM2.80 per USD. The positive impact from domestic expansion, still vibrant corporate earnings, robust consumption and private investment, return of foreign funds to capitalise on our strengthening ringgit and the listing of various government-linked companies are expected to drive greater capital market activities. These factors augur well for us as they will translate into consistently higher volume for our stockbroking business while contributing to the wealth effect that will support our high-end property development. The notable recovery in the global economy is a catalyst in improving our recurring earnings from our property investments in Canada, Singapore, Australia and China. ACKNOWLEDGEMENT On behalf of the Board, I would like to express our appreciation to all our valued shareholders, business partners, clients, financiers and all government authorities for your support and trust in our Group. I also wish to thank our remisiers, agents, management team and staff of TA Group for their commitment and invaluable contribution that have seen us through the good and tough years. Last but not least, I would like to record my appreciation to every board member of TAE and its subsidiaries for your continued advice, guidance, support and cooperation throughout the year. Datuk Tiah Thee Kian Non-Independent Non-Executive Chairman TA Enterprise berhad Annual Report

3 Corporate Social Responsibility As a key Value of the TA Group, Corporate Social Responsibility is one of the key activities with which TA gives back to society. TA S CORPORATE SOCIAL RESPONSIBILITY TO THE COMMUNITY As part of TAÕ s drive to take care of the underprivileged, aged, the abandoned and abused street children and orphans, the Group works together with Gethsemane Medical Care to set up TA Mobile Community Clinic (TA Mobile Clinics). With the idea of Ô Mobilizing Hope and Transforming LivesÕ the TA Mobile Clinic was established in 2007 to provide various forms of free medical care and treatment to the more needy community regardless of race, language and religion. TA Group passionately believes in a culture of loving others and has been collaborating with Gethsemane Medical Care to create a sustainable healthcare programme for the community by converting an ambulance van into a mobile clinic to reach out to the underprivileged in remote areas. For the year 2010, TA Mobile Clinic has completed 32 medical camps. The last clinic for the year was held on 27 November 2010, at an Orang Asli Village at 19 km, Jalan Tapah. TA Mobile Clinic is usually held over the weekends and many volunteers contribute their time and effort by going in teams of 2 or 3 doctors and 10 volunteers to give medical assistance. With the professional guidance and support of a team of dedicated doctors at Gethsemane Medical Care, TA Mobile Clinic as a social service provider has greatly impacted and transformed many lives. This growing ministry transcends all boundaries as free medical care is also given to the many foreign workers and refugees in our country. For the year 2011, many medical camps were set up since January at various strategic places to help the Myanmar refugees, Nepalese workers, orang asli communities and the poorer segment of the country. In late January, 2011, a medical team also went to Dhaka, Bangladesh on a medical mission. The TA Group of Companies brought Early Christmas Cheer for Children when invited the children of Sanctuary Care Centre, Shepherd Centre, Grace Community Centre and Gethsemane Medical Care to a movie screening on 11th December 2010 at the TGV cinema at KLCC to usher in the Christmas season. Datuk Tony Tiah, Non-Independent Non-Executive Chairman and Datin Alicia Tiah, Managing Director & Chief Executive Officer of TA Enterprise were present at the event just to share the happy moments with the children. As a corporate organization, we believe in bringing joy and laughter into the lives of the less fortunate especially during festive seasons so that they may feel the love and care. The childrenõ s excitement was evident on their faces as they lined up for the delicious popcorn and coke. The exuberance of the children and their happy faces in turn touched the staff who were present to assist them. 28 TA Enterprise berhad Annual Report 2011

4 Corporate Social Responsibility The movie screened was from the latest instalment of The Chronicles of Narnia called Ò The Voyage of the Dawn TreaderÓ The characters in the movie, Edmund, Lucy, Eustace and King Caspian were thrown into a sea of captivating and amazing adventures and confronted with unimaginable obstacles. There were also many live action animations which generated much excitement and delight. TA S CORPORATE SOCIAL RESPONSIBILITY TO THE ENVIRONMENT TA has consistently strived to strike a balance between the environment and its developments. In allocating 7-acres of the 48-acre Damansara Avenue development at Sri Damansara as an urban park, it allows us to stand proud to be a conscientious developer which seeks to not just maximize profits but also care for the surrounding well-being of the area. The focus on utilizing natural lighting for common areas and the use of environmental friendly materials coupled with a rain water recycling system in our future projects allow us to care for the environment by reducing the carbon footprint of our projects. In addition, the materials used in construction will be carefully chosen to ensure that they follow these green guidelines. These green features not only save energy but also save cost. TA S CORPORATE SOCIAL RESPONSIBILITY TO IT S HUMAN RESOURCES TA values its human resources and knows that it is its one pillar which gives it a competitive edge over its peers in the industry. With numerous executive education programs implemented over the year to upgrade the skill sets of its employees, we have seen a marked improvement not just in overall competence but also the confidence to take up tasks that were once daunting. As a corporate organization, we believe in bringing joy and laughter into the lives of the less fortunate especially during festive seasons so that they may feel the love and care. Datuk Tony Tiah, Non-Independent Non-Executive Chairman, Datin Alicia Tiah, Managing Director & Chief Executive Officer of TA Enterprise In appreciation of the dedication shown by the employees to the continued success of the TA Group a fun family day was organized at the Desa Waterpark. It was a day where over 600 employees and their families were able to mingle between departments, compete against each other in challenging water-based games and come out with a sense of camaraderie of which great companies are built. TA Enterprise berhad Annual Report

5 Focussed on PEOPLE In TA Group, it is our culture to constantly encourage a progressive work environment where new ideas, inputs, opinions and suggestions are highly cherished and favoured. 30 TA Enterprise berhad Annual Report 2011

6 5 - YEAR GROUP FINANCIAL SUMMARY YEAR ENDED 31 JANUARY (RM '000) (RM '000) (RM '000) (RM '000) (RM '000) OPERATING RESULTS Revenue 618, , , , ,520 Profit before tax ^ 139, , , , ,115 Profit after taxation ^ 106, ,751 92, , ,735 Profit attributable to equity holders of the parent ^ 81,371 95,026 91, , ,063 KEY FINANCIAL POSITION DATA Total assets 4,423,472 4,345,578 2,669,180 3,087,499 2,932,810 Cash and cash equivalents * 257, , , , ,347 Total liabilities 1,750,121 1,726, , ,315 1,061,694 Total borrowings** 756, , , , ,081 Paid up share capital 1,711,910 1,711,910 1,427,405 1,426,971 1,328,475 Shareholders' equity 1,496,377 1,533,311 2,065,153 2,134,062 1,863,072 SHARE INFORMATION Per share (sen) - Earnings (Basic) Earnings (Fully diluted) Net tangible assets ^^ Gross dividends Share price as at 31 January (RM) Market capitalisation (RM'000) 1,369,528 1,198, ,991 1,797,983 1,169,058 FINANCIAL RATIOS Return on total assets (%) 1.8% 2.2% 3.4% 7.3% 4.5% Return on shareholders' equity (%) 5.4% 6.2% 4.5% 10.5% 7.1% Gearing ratio (times) Price to earnings ratio (times) Dividend payout ratio (%) 61.2% 55.2% 52.2% 47.5% 52.2% * Comprises of short term funds but excluding monies held in trust, Housing Development Accounts and pledged for bank guarantees. ** Secured foreign currency denominated term loan, revolving credit and short term borrowings. ^^ Net tangible assets = total assets - total liabilities - intangible assets - deferred tax assets + deferred tax liabilities. Restated for FY'07 on intangible assets. TA Enterprise berhad Annual Report

7 5 - YEAR GROUP FINANCIAL SUMMARY Revenue and Profit After Tax Financial Years PAT Revenue RM Million Earnings Per Share and Gross Dividends Per Share Financial Years Gross dividends per share Earnings Per Share Sen Shareholders' Equity, Total Assets and Total Liabilities ,750 1,496 4,423 Financial Years ,727 1,533 2,065 2,134 2,669 3,087 4,346 Total assets Total liabilities Shareholders' equity ,062 1,863 2, ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 RM Million Profit After Tax (attributable to equity holders of the parent) and Year-End Share Price RM Million PAT Share price Financial Years 32 TA Enterprise berhad Annual Report 2011

8 SEGMENTAL ANALYSIS Segment Assets RM( 000) Revenue RM( 000) Malaysia Malaysia 2,017,758, 46.52% Hong Kong 266,947, 43.14% Hong Kong 729,900, 16.83% 5,903, 0.14% Australia Canada 124,010, 20.04% Australia Canada 71,276, 1.64% 923,322, 21.29% 189,042, 4.36% 399,952, 9.22% British Virgin Islands Others Singapore 5,349, 0.86% 173,523, 28.04% 4,156, ,837, 7.25% British Virgin Islands Singapore Segment Assets RM( 000) Revenue RM( 000) 2,027,837, 47.53% Malaysia Hong Kong 246,374, 56.34% Malaysia 19,770, 4.52% 775,316, 18.17% Australia 29,565, Hong Kong 6.76% 77,270, 1.81% 926,346, 21.71% 5,080, 0.12% 27,036, 0.63% 427,477, 10.02% Canada British Virgin Islands Others Singapore 7,991, 1.83% 133,587, 30.55% Australia Canada Singapore Segment Assets RM( 000) Revenue RM( 000) Malaysia 1,859,906, 70.88% 51, 0.00% Hong Kong 419,160, 78.29% 2,539, 0.10% 16, 0.00% Malaysia 59,158, 27,469, 2.25% Australia 5.13% Hong Kong 344,554, 13.13% Canada 76,631, Australia 14.31% 269,746, British Virgin Islands Canada 10.28% 12,150, 87,938, 3.35% 2.27% Others South Africa South Africa TA Enterprise berhad Annual Report

9 SEGMENTAL ANALYSIS RM Million RM Million 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, ,700 1,600 1,500 1,400 1,300 1,200 1,100 1, (100) (200) (300) (100) (200) (300) 2011 Revenue, Net Segment Results and Net Segment Assets Revenue, Net Segment Results and Net Segment Assets Stockbroking and financial services 354 Stockbroking and financial services Investment holding (354) 43 2 (5) Investment holding (288) 334 Credit and lending 222 Credit and lending 2009 Revenue, Net Segment Results and Net Segment Assets 650 Property investment 667 Property investment 566 Property development 1, Property development ,643 Hotel operations Hotel operations 3 (2) Others 42 Others Revenue Net Segment Results Net Segment Assets Business Segments Revenue Net Segment Results Net Segment Assets Business Segments 440 RM Million Revenue Net Segment Results Net Segment Assets (10) (60) Stockbroking and financial services 0 4 Investment holding (35) Credit and lending (51) TA Enterprise berhad Annual Report Property investment Property development Hotel operations Others Business Segments

10 Statement on Corporate Governance Corporate Governance is the process and structure used to direct and manage the business and affairs of the Company towards enhancing both business prosperity and corporate accountability. Its ultimate objective is to realise the long term shareholdersõ value whilst taking into account the interests of various stakeholders. The Board of Directors is committed in ensuring that Õ The Principles and Best Practices of the Malaysian Code on Corporate Governance (the Ò CodeÓ )Õ are observed and practised as a fundamental part of discharging its responsibilities to protect and enhance shareholdersõ value. In preparing this report, the Board has considered the application of the principles of the Code and the extent of its compliance with the Best Practices of the Code. DIRECTORS A. Composition of the Board As at the date of this statement, the Board consists of nine (9) members; comprising a Non-Independent Non-Executive Chairman, three (3) Executive Directors, a Non-Independent Non-Executive Director and four (4) Independent Non-Executive Directors. With almost half of the Board comprising of Independent Directors, it brings objective and independent judgement elements into the decision making process of the Board. The Board had examined its size and felt that its current Board size of 9 members comprising almost fifty percent Independent Non-Executive Directors is effective and appropriate. The Directors through their vast experiences and qualifications in economics, accounting, stockbroking, finance, legal and business management provide effective contribution and support to the functions of the Board. They bring with them a broad range of skills, experiences and knowledge required to successfully direct and supervise the GroupÕ s business activities which are vital to its success. A brief profile of each Director is presented on pages12 to 20 of this Annual Report. There is a clear division of responsibilities at the helm of the Group to ensure a balance of authority and power. The Non-Independent Non-Executive Chairman, who is not previously a Chief Executive Officer is responsible in ensuring Board effectiveness in constructive deliberation of the corporate direction of the Group. The Non-Independent Non-Executive Chairman also ensures all Board members receive sufficient information on financial and non-financial matters to enable an informed decision to be made by the Board of Directors. Whereas the Managing Director & Chief Executive Officer is responsible for the day-to-day operational management of the Group and its businesses as well as implementation of the BoardÕ s policies and decisions. The executive power of the Managing Director & Chief Executive Officer and the Executive Directors is balanced by the presence of Independent Non-Executive Directors who exercise their independent judgement on issues of strategy, standards of conduct, resources, processes and safeguarding of interests of minority shareholders. From an investor relation perspective, all queries and concerns of shareholders and public in general, are directed to our Independent Non-Executive Director, Mr Jory Leong Kam Weng. B. Board Responsibilities The Board has the overall responsibility for corporate governance, strategic direction and overseeing the investment and business of the Group. The Board maps out the GroupÕ s medium and long term strategies in addition to its responsibility to review the ManagementÕ s action plans. The BoardÕ s other primary duties are to conduct regular review of the GroupÕ s business operations and performances and to ensure that effective controls and systems exist to measure and manage business risks. TA Enterprise berhad Annual Report

11 Statement on Corporate Governance The number of DirectorsÕ meetings and attendance for the financial year in review are as set out below: - Number of Board Meetings Held During Directors Tenure in Attended Office Datuk Tiah Thee Kian 5 5 Datin Tan Kuay Fong 5 5 Zainab Binti Ahmad 5 5 DatoÕ Sri Mohamed Bin Abid 5 5 Peter U Chin Wei 5 5 Jory Leong Kam Weng 5 5 Christopher Koh Swee Kiat 5 5 Datin Rahmah Binti Mahmood 5 5 Yaw Chun Soon 5 4 The Board has set up several Board Committees as well as Management Committees to assist the Board in discharging its duties and responsibilities. The functions and terms of reference of the Board Committees and Management Committees together with the authority delegated by the Board to these committees are clearly defined in their respective terms of reference. Board Committees include the Audit Committee, Nomination Committee and Remuneration Committee. Management Committees comprise of Option Committee, Stockbroking Management Committee, TA Investment Management Committee, Group Investment Committee, Corporate Governance Committee, Tax Planning Committee, Information Technology Management Committee, Futures Management Committee, Risk Management Committee and Proprietary Trading Investment Committee. The Management Committees meet from time to time to discuss, deliberate, consider and submit proposals on issues of financial performance, tax planning, risk management, information technology support, corporate governance issues, business development, investment activities, stockbroking and unit trust operations as well as asset and fund management. The Board receives regular status reports, updates and briefing from these committees. Where necessary, these committees make recommendations to the Board for their final decision. The Board had implemented a process for annual assessment of the effectiveness of the Board as a whole, the Board committees, and for assessing the contribution of each individual Director. This annual process will be carried out by the Nomination Committee. C. Supply of Information Board meetings are held to review Management reports on the progress of business operations and to consider, and if deemed fit, to approve such proposals that requires the sanction of the Board. The agenda of the Board meetings together with its detailed reports, proposition papers and other relevant information on matters requiring the consideration of the Board are circulated to all Directors for their perusal and consideration well in advance of each Board meeting. There is a schedule of matters reserved specifically for the BoardÕ s deliberation and decision which includes the overall Group strategy, acquisition and disposal of material assets and approval of corporate plans, financial statements, budgets and dividends. The Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions are being concluded. All proceedings from the Board meetings are recorded and confirmed by the Chairman of the meeting. The Board has access to all information within the Group and also to the advice or services of the Company Secretary and Senior Management in carrying out their duties. The Directors seek external professional advice, if required. D. Appointments of the Board and Re-election The appointment of any new member(s) to the Board and Board Committees is proposed and recommended by the Nomination Committee. The actual decision as to who should be nominated should be the responsibility of the full board after considering the recommendations of the Nomination Committee. The 36 TA Enterprise berhad Annual Report 2011

12 Statement on Corporate Governance Nomination Committee considers and recommends technically competent persons with integrity and a strong sense of professionalism to be appointed to the Board of the Company. The Nomination Committee had met once with full attendance and passed three (3) resolutions during the financial year. The members of the Nomination Committee which is wholly comprised of Independent Non-Executive Directors are as follows: Peter U Chin Wei ( Chairman) Jory Leong Kam Weng Christopher Koh Swee Kiat Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director The key salient terms of reference of the Nomination Committee are in its Ò Functions, Duties and ResponsibilitiesÓ as set out below: (i) To recommend to the Board candidates for all directorships of the Company by considering the following attributes of the candidates: Skills, knowledge, expertise and experience; Professionalism; Integrity In the case of candidates for the position of Independent Non-Executive Directors, the Nomination Committee will evaluate the candidatesõ ability to discharge such responsibilities/functions as expected from an Independent Non-Executive Director. (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) To evaluate and consider the nominated candidates for directorships proposed by the Managing Director & Chief Executive Officer, any director or shareholders and/or senior executive. To recommend to the Board the nominated Directors to fill the seats on the Board Committees. To appraise each individual Director, including Independent Non-Executive Directors, as well as the Managing Director & Chief Executive Officer in terms of his experience, knowledge, credibility and credential and assess their effectiveness and contribution in carrying out their obligations and duties as a Board member of the Company. To examine the ability of each Director to contribute to the effective decision making process of the Board and ensure that the Board of the Company are functioning actively, efficiently and effectively in all its decision making. To review the mix of skills, experience, qualities and core competencies which each Non-Executive Directors shall bring to the Board for it to function effectively and efficiently. To implement the relevant policies, criterias and procedures set by the Board for the nomination, appointment and election of Directors. To ensure that all selection and nomination of candidate for directorship by the Board are for the benefit of the Company and that such nominations and appointments are carried out expediently and in compliance with all laws, rules, requirements, regulations and guidelines set by the relevant authorities and the Board from time to time. To assess the effectiveness of the Board as a whole and the committees of the Board. The Board, through the Nomination Committee had reviewed the required mix of skills and experience and other qualities including core competencies which its existing Non-Executive Directors bring to the Board. TA Enterprise berhad Annual Report

13 Statement on Corporate Governance Through its Annual Assessment and Evaluation Exercise, the Nomination Committee had conducted the assessment of the effectiveness of the Board as a whole, the efficiency of the Board Committee and the contribution of each individual Director. The Directors are due for retirement by rotation in accordance with the Articles of Association of the Company and at least once in every three (3) years. They also submit themselves for re-election by the shareholders during Annual General Meetings. E. Directors Training All the members of the Board had attended and completed the Mandatory Accreditation Programme as prescribed by Bursa Malaysia Securities Berhad. During the financial year, the Directors had attended the in-house training programme on Structured Products Ð Boon or Bane for Corporations conducted by Finance Management and Training Consultancy Services (FMTCS) Sdn Bhd. Apart from the above, the directors are encouraged to attend seminars and other training programmes to keep abreast with the development in the industry and in the market place. Relevant guidelines on statutory and regulatory requirements were circulated to the Board from time to time for the BoardÕ s references. F. Directors Code of Conduct The Board had adopted a DirectorsÕ Code of Conduct which outlines the conduct required of the Board members individually in order for them to discharge their duties in a professional, honest and ethical manner. DIRECTORS REMUNERATION A Remuneration Committee is authorised by the Board to assess and review the remuneration packages of the Executive Directors including their fees and subsequently furnishes recommendations to the Board on specific adjustments in remuneration to commensurate with the respective contributions of the Directors. However, the remuneration for the Independent Non-Executive Directors is determined by the Board as a whole. Recommendations of the Remuneration Committee will be reported to the Board for their final decision. In determining the DirectorsÕ remuneration, the Board also takes into consideration the pay and employment conditions within our industry. The Annual Assessment and Evaluation Exercise conducted by the Nomination Committee forms the basis for determining or reviewing the Executive DirectorsÕ remuneration which is linked to their individual performance and contributions as well as the CompanyÕ s performance. The members of the Remuneration Committee, which is wholly comprised of Independent Non-Executive Directors, are as follows: Peter U Chin Wei ( Chairman) Jory Leong Kam Weng Christopher Koh Swee Kiat Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director The Remuneration Committee had passed two (2) resolutions upon reviewing the remuneration packages of directors during the financial year. 38 TA Enterprise berhad Annual Report 2011

14 Statement on Corporate Governance The functions, duties and responsibilities of the Remuneration Committee which form the fundamentals of its terms of reference, are set out below: (i) (ii) (iii) (iv) (v) To recommend to the Board the appropriate remuneration packages for the Executive Directors, including but not limited to the following:- annual salary increment annual bonus employment benefits rewards and compensation profit sharing scheme Employee s Option Scheme To formulate policies, guidelines and set criterias for remuneration packages for the Executive Directors; To ensure that the Executive Directors are fairly and appropriately remunerated according to the general market sentiments or conditions; To ensure that all necessary actions are taken expediently by the Board to offer appropriate rewards, benefits, compensation and remuneration to ensure that the Company attracts and retains the individual Directors needed to run the Company successfully; and To ensure that all remuneration packages and benefits given to the Directors are in compliance with all laws, rules, requirements, regulations and guidelines set by the relevant authorities and the Board from time to time. The remuneration of the Directors of the Company during the financial year is disclosed in Note 35 of the Audited Financial Statements. COMMUNICATION WITH SHAREHOLDERS AND INVESTORS The Board recognises the importance of maintaining effective communication with its shareholders. Thus, the annual report contains reports on results and progress of the business. In addition, the shareholders and investors have timely and convenient access to public information on the TA Group via the CompanyÕ s website at its annual report, circulars to shareholders and Bursa LINK for corporate announcements and quarterly financial results. The main forum for dialogue with shareholders is during the Annual General Meeting. At each Annual General Meeting, the Board presents the progress and performance of the business and encourages shareholders to participate in a question and answer session. Directors and senior management staff are available to respond to shareholdersõ questions during the meeting. Extraordinary General Meetings are held as and when required. The Company maintains a website at that allows shareholders and investors to gain access to information about the Group as well as to direct their queries and feedback to the Board of Directors and/or management through the , investorrelations@ta.com.my posted at the aforesaid website. The GroupÕ s strategy and future plans on the financial services are focus on developing and strengthening our niche market segments and to improve our existing services and products. We will continuously roll out innovative products and services to maintain our competitiveness and market position. COMPANY S DIVIDEND POLICY Since year 2007, the Company had adopted a dividend policy which will pay the shareholders consistent yearly dividends ranging between 40% and 60% of the GroupÕ s net profit for that financial year subject to the availability of cash reserves and the GroupÕ s requirement to retain cash in the business for future expansion or investments. TA Enterprise berhad Annual Report

15 Statement on Corporate Governance Subsequently, on 14 May 2010, the Company announced the change of dividend policy as follows:- Existing policy Revised policy 40% - 60% of the GroupÕ s Profit 40% - 60% of the GroupÕ s PAT excluding TA After Tax (Ò PATÓ ) Global Berhad GroupÕ s PAT but including dividend receivable from TA Global Berhad for the same financial year. TA Global Berhad is a property subsidiary of the Company and it was listed on the Main Market of Bursa Malaysia Securities Berhad on 23 November TA Global Berhad has its own dividend policy of 20% - 50%. ACCOUNTABILITY AND AUDIT A. Financial Reporting The Board is responsible for ensuring the proper maintenance of accounting records of the Group. The Audit Committee assists the Board in reviewing the quarterly reports to Bursa Malaysia and the annual report to shareholders to ensure its accuracy, adequacy and completeness. The Statement by Directors pursuant to Section 169 of the Companies Act 1965 is set out on page 58 of this Annual Report. B. Internal Control The Board acknowledges its responsibility for the GroupÕ s systems of internal controls and risk management and for reviewing the effectiveness of those systems. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives. Any system can only provide a reasonable but not absolute assurance against material misstatement, loss or fraud. The Board is ultimately responsible for the GroupÕ s system of internal controls while the CompanyÕ s Managing Director & Chief Executive Officer, Yg Bhg Datin Tan Kuay Fong, is responsible in managing the internal controls of the TA Group. Her profile is presented on page 13 of this Annual Report. Information on the GroupÕ s internal control is presented in the Statement on Internal Control laid out on pages 47 to 50 of this Annual Report. The Company Secretary, Ms Kimmy Khoo Poh Kim, is overseeing the GroupÕ s legal and regulatory compliance. She is also the bearer of Corporate Governance standards and framework and advises the Board on such issues. Ms Kimmy Khoo, aged 47, holds a Bachelor of Arts (Hons) Degree from the University of Malaya. She is an affiliate member of the Malaysian Institute of Chartered Secretaries and Administrators and also holds a Company Secretary Licence issued by the Companies Commission of Malaysia. In her 20 over years of experience with the TA Enterprise Berhad Group, Ms Kimmy Khoo has garnered extensive management skills, knowledge and exposure in several industries such as stockbroking, investment management, hospitality, property development and property management. She is also responsible for the GroupÕ s Risk Management function. The risk factors of the TA GroupÕ s businesses are identified as follows:- Credit and Default Risk associated with counterparties default Market Risk associated with fluctuation in market prices or values affecting the value of clients collaterals and investments Competitor Risk from existing competitors and new entrants Economic Risk associated with the economy conditions and capital market Liquidity Risk when there is no counterparty for a transaction, resulting in the Group being unable to liquidate the securities concerned 40 TA Enterprise berhad Annual Report 2011

16 Statement on Corporate Governance Exposure Risk associated with large counterparty exposure or large exposure to a single security resulting in the Financial Services Group being unable to liquidate its position Settlements Risk of the Group not being able to receive funds or instruments from its counterparty at the expected time Operations Risk associated with technical or systems failures, fraud, human error, systems defects or control problems Cash Flow Risk associated with the ability of fulfilling financial obligations Legal Risk that the losses which the Group will suffer as a result of inadequate or fraudulent documentation of transactions C. Relationship with Auditors The role of the Audit Committee in relation to external auditors may be found in the Report on Audit Committee set out on pages 43 to 46 The external auditors meet with the Audit Committee to present the scope of the financial audit and to review the results of the said audit after the conclusion of the audit. The Audit Committee also meets with the external auditors at least twice a year without the executive Board members being present. The Company has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia. COMPLIANCE STATEMENT The Board considers that it has complied with Ò The Best Practices of the CodeÓ for the financial year ended 31 January OTHER INFORMATION A. Shares Buy-Back There was no Shares Buy-Back scheme in place during the financial year ended 31 January B. Options, Warrants or Convertible Securities Exercised There were no options, warrants or convertible securities exercised during the financial year ended 31 January C. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme The Company has not sponsored any ADR or GDR programme. D. Sanctions and/or Penalties Imposed Save as disclosed previously, the Company is not aware of any other sanctions or penalties imposed on the Company, its subsidiaries, Directors or management by the relevant regulatory bodies that have been made public which have yet to be disclosed. E. Non-Audit Fees The amount of non-audit fees paid to the External Auditors, Messrs. Ernst & Young, by the Group and the Company for the financial year amounted to RM26,000 and RM5,000 respectively. F. Material Contracts Involving Directors and Major Shareholders Interest Save as disclosed below, there were no material contracts during the current financial year, entered into by the Company or its subsidiaries involving the interests of Directors or major shareholders. TA Enterprise berhad Annual Report

17 Statement on Corporate Governance Share Purchase Agreement dated 11 March 2010 entered into between the Company and TA Global Berhad (Ò the PurchaserÓ ) for the proposed disposal of the entire issued shares of Quayside Gem Limited, a company incorporated in Mauritius, comprising 50,569,495 ordinary shares of US$1.00 each for a consideration of RM651,831,492 (Ò DisposalÓ ). Yg Bhg Datuk Tiah, the Non-Independent Non-Executive Chairman and substantial shareholder of the Company, is also the Executive Chairman and substantial shareholder of the Purchaser and is therefore deemed to have vested interest in the Share Purchase Agreement dated 11 March 2010 mentioned above. Yg Bhg Datin Tan Kuay Fong is also deemed to have vested interest in the Share Purchase Agreement dated 11 March 2010 mentioned above, by virtue of her being the spouse of Yg Bhg Datuk Tiah and being the Director in both the Company and the Vendor. The Disposal was completed on 17 August G. Variation in Results There were no variances of 10% or more between the audited results of the financial year and the announced unaudited results. H. Profit Guarantee During the financial year, there were no profit guarantees given by the Company. I. Revaluation Policy on Landed Properties The Group does not revalue its landed properties classified as Property, Plant and Equipment, Investment Property, Land Held for Property Development, Property Development Costs, Properties Held for Resale, Land Held for Resale and Non-Current Asset Classified as Held for Sale. J. Utilisation of Proceeds There was no utilisation of proceeds during the financial year ended 31 January K. Profit Estimate, Forecast or Projection The Company did not release any profit estimates, forecast or projections for the financial year ended 31 January This statement had been approved by the Board of Directors on 20 May TA Enterprise berhad Annual Report 2011

18 Report on Audit Committee 1. MEMBERSHIP AND ATTENDANCE The Audit Committee (Committee) was set up on 26 May The Committee comprises the following members all of whom are Independent Non-Executive Directors. Details of attendance of each member at Committee meetings held during the financial year are as follows: - Composition of Audit Committee Peter U Chin Wei Chairman / Independent Non-Executive Director Jory Leong Kam Weng Member / Independent Non-Executive Director Christopher Koh Swee Kiat Member / Independent Non-Executive Director Number of Committee Meetings Held During Attended Tenure in Office Mr Peter U Chin Wei is a Fellow of the Institute of Chartered Accountants in England and Wales. Mr Jory Leong Kam Weng is a Certified Public Accountant of CPA Australia and a Chartered Accountant of the Malaysian Institute of Accountants (Ò MIAÓ ). Mr Christopher Koh Swee Kiat holds an ACCA postgraduate diploma in Accounting and Finance. 2. COMPOSITION AND TERMS OF REFERENCE 2.1 Members i. The Committee shall be appointed by the Board pursuant to a Board Resolution. ii. iii. It shall comprise of at least three (3) members, all members must be non-executive directors, with a majority of them being independent directors. At least one member of the Committee: must be a member of the MIA; if he/she is not a member of the MIA, he/she must have at least 3 years working experience and : he/she must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or he/she must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad. 2.2 Chairman The Chairman of the Committee shall be an independent non-executive director nominated by the Board and shall be appointed amongst the members. 2.3 Objectives i. To provide an additional assurance to the Board by giving objective and independent review of financial, operational and administrative controls and procedures. ii. iii. iv. To assist the Board in establishing and maintaining internal controls for areas of risk as well as safeguarding of assets. To assess and supervise the quality of audits conducted by the internal and external auditors. To reinforce the independence of the companyõ s external auditor, and ensure that the auditors have free reign in the audit process. TA Enterprise berhad Annual Report

19 Report on Audit Committee v. vi. To provide a forum for regular, informal and private discussions between the external auditor and directors who have no significant relationships with management. To reinforce the objectivity of the internal audit department. 2.4 Authority i. The Committee is authorised by the Board to investigate any activities within its terms of reference. ii. iii. iv. v. vi. It shall have the resources which are required to perform its duties and full and unrestricted access to any information pertaining to the Company. It shall also have the authority to obtain independent legal or other professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. It shall also have the power to establish Sub-Audit Committee(s) and delegate its powers to such Sub-Audit Committee(s) for the purpose of carrying out certain investigations on behalf of the Committee in such manner as the Committee shall deem fit and necessary and, to appoint such officers of the Group as members of the Sub-Audit Committee(s). It shall have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity. It shall be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the listed issuer, whenever deemed necessary. 2.5 Functions, Duties and Responsibilities i. To review with the external and/or internal auditors their audit plans, reports and evaluation of the system of internal controls. ii. iii. iv. v. vi. vii. viii. ix. To review the scope of the internal audit program and procedures, consider the result of the internal audit investigations and assess the management's response and actions to rectify any reported shortcoming. To evaluate the adequacy and effectiveness of internal control systems as well as the administrative, operating and accounting policies. To review the assistance given by the officers of the Group to the auditors. To review the quarterly result, half-yearly, annual and consolidated financial statements and thereafter to submit them to Board, focusing particularly on any changes in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; compliance with accounting standards and other legal requirements. To review any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity. To identify and direct any special project or investigations deemed necessary. To nominate a person or persons as the Company's external auditors. To consider the audit fee and any questions of resignations or dismissal. To discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved. 44 TA Enterprise berhad Annual Report 2011

20 Report on Audit Committee x. xi. xii. xiii. xiv. xv. xvi. To discuss problems and reservations arising from the interim and final audits, and any other matter the auditor may wish to discuss (in the absence of management where necessary). To review the external auditorõ s management letter and managementõ s response. To carry out such other functions and consider other topics, as may be agreed upon with the Board. To review reports and consider recommendations of the Sub-Audit Committee(s), if any. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work. To review any letter of resignation from the external auditors and any resignation of the internal auditors of the Company. To review whether there is reason (supported by grounds) to believe that the CompanyÕ s external auditor is not suitable for re-appointment. 3. SUMMARY OF ACTIVITIES OF AUDIT COMMITTEE The Committee meets at least four (4) times annually, or more frequently as circumstances dictate. As part of its duty to foster open communication, the Head of Internal Audit, the relevant heads for the departments being audited (if required) and representatives of the external auditors (if required) will normally attend the meetings. Other Board members and/or officers of the Company or Group may attend meetings upon specific invitation of the Committee. Besides reviewing the year end financial statements, the Committee met five (5) times during the year for the following purposes: To review the financial statements before the quarterly announcements to Bursa Malaysia Securities Berhad. To discuss the audit plan with external auditors and scope for the year as well as the audit procedures to be utilised. To discuss with internal auditors on its audit plan, processes and scope, adequacy of resources and co-ordination with external auditors. To review the operational and investigation reports prepared by the internal auditors on the state of internal control of the Group. To review the follow-up audit reports prepared by the internal auditors ascertain if the responsible operating units rectified the findings noted in the audit reports. 4. SUMMARY OF ACTIVITIES OF INTERNAL AUDIT FUNCTION The Group has an established internal audit department, which assists the Committee in the discharge of its duties and responsibilities. The Committee is aware that an independent and resourceful internal audit function is essential in ensuring that the internal control system is effective. The main role of the internal audit function is to review the effectiveness of the internal control system and this review is performed in an impartial, proficient and professional manner. The internal audit department covers the review and the adequacy of risk management; operational controls; compliance with established procedures, guidelines and statutory requirements; quality of assets management efficiency. A risk-based approach is adopted for all audit programs. These audit programs ensure that the instituted controls are appropriate effectively applied and reduce the risk of exposures to an acceptable level which is consistent with the GroupÕ s risk management policy. Where there is any area concerned the Senior TA Enterprise berhad Annual Report