annual report 2013 DutaLand Berhad (7296-V)

Transcription

1 annual report 2013 DutaLand Berhad (7296-V)

2 Contents 2 Corporate Information 3 Operational and Financial Highlights 4 Chairman s Statement 8 Profile of Directors 12 Corporate Governance Statement 25 Additional Compliance Information 28 Statement on Risk Management and Internal Control 30 Audit Committee Report 35 Directors Report and Audited Financial Statements 122 Properties Held by the Group 124 Distribution Schedule of Equity Securities 127 Notice of Annual General Meeting 130 Statement Accompanying Notice of Annual General Meeting Form of Proxy

3 Corporate Information BOARD OF DIRECTORS YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Chairman YBhg Tan Sri Dato Yap Yong Seong Group Managing Director Mr Yap Wee Chun Executive Director YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus Independent Director YBhg Dato Yap Wee Keat Non-Independent Director Mr Cheong Wong Sang Independent Director Encik Hazli bin Ibrahim Independent Director CHARTERED SECRETARIES Ms Lim Yoke Si MAICSA No Ms Pang Siok Tieng MAICSA No DATE AND PLACE OF INCORPORATION 26 July 1967, Malaysia LISTING DATE 11 January 1973 COMPANY NUMBER 7296-V WEBSITE REGISTERED OFFICE Level 23, Menara Olympia No. 8, Jalan Raja Chulan Kuala Lumpur Tel : Fax : dutaland@dutaland.com.my SHARE REGISTRAR (Place where all registers of securities are kept) Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra Kuala Lumpur Tel : Fax : Website: STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad AUDITORS Messrs Ernst & Young (AF : 0039) Chartered Accountants Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Kuala Lumpur PRINCIPAL BANKERS Asian Finance Bank Berhad RHB Investment Bank Berhad RHB Bank Berhad CIMB Bank Berhad 2 DutaLand Berhad (7296-V) Annual Report 2013

4 Operational and Financial Highlights Year Ended RM Million Year Ended Year Ended Year Ended Year Ended 30 June June June June 2009 RM Million RM Million RM Million RM Million INCOME STATEMENT Revenue (Loss)/profit from operations (7.7) (Loss)/profit before taxation (19.2) (4.1) (Loss)/profit attributable to owners of the parent (18.6) (5.0) STATEMENT OF FINANCIAL POSITION Issued and paid-up capital Shareholders equity Total assets 1, , , , ,144.4 PER SHARE DATA Gross (loss)/profit per share (sen) (3)* (1)* 1* 3* 14* Net (loss)/profit per share (sen) (2.8)* (0.8)* 0.1* 1* 16* Net tangible assets per share (sen) * Based on weighted average number of shares issued during the year Revenue (RM Million) 58.3 Profit from Operations (RM Million) -7.7 Shareholders Equity (RM Million) Total Assets (RM Million) 1,050.0 Year Year Year Year DutaLand Berhad (7296-V) Annual Report

5 Chairman s Statement THE YEAR UNDER REVIEW On behalf of the board of directors of DutaLand, I am pleased to present the annual report and audited financial statements for the financial year ended. Financial Performance For the financial year under review ( FY2013 ), the Group registered total revenue of RM58.3 million, which was RM36.9 million lower than the preceding year of RM95.2 million. The deterioration of 39% was attributable to the lower revenues generated by its property division and plantation division. As compared with the previous year s revenue of RM51.1 million, the variance of RM12.7 million to RM38.4 million at the plantation division was attributed to the sharply lower average selling prices of fresh fruit bunches ( FFB ) during the year under review which arose from the worldwide decline in the price of Crude Palm Oil ( CPO ). The Group s lower revenue for the current year was also due to substantially lower revenue from its property division of RM19.8 million as compared to RM44.1 million for the previous year, a shortfall of RM24.3 million. Whereas the bulk of revenue for the previous year (RM32.0 million) was accounted for by the sale of certain vacant land, the current year s revenue was derived from the Group s commercial development project in Seremban which accounted for almost all of the division s revenue for FY2013. As a result, the Group recorded a higher loss before tax of RM19.2 million for the current FY2013 as compared with a loss before tax of RM4.1 million for the previous FY2012. YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Chairman 4 DutaLand Berhad (7296-V) Annual Report 2013

6 Chairman s Statement (cont d) Operational Review Plantations The year under review has been a challenging year for the Malaysian palm oil industry as palm oil prices declined from the build-up of stocks arising from high stockpiles, increased CPO production as well as weaker export demand. The Group s plantation assets are held under its whollyowned sub-subsidiary, Pertama Land & Development Sdn Bhd which owns about 12,000 hectares ( Ha ) of oil palm lands in the district of Labuk-Sugut and Tongod, Sabah. As at June 2013, the planted oil palm area was at 10,557 Ha of which 8,410 Ha or 80% consisted of mature area. The division has continued its effort to improve the efficiency of the estates. Following such efforts, FFB yield has improved over the previous year. For the financial year under review, the plantation division contributed RM38.4 million to the Group s revenue as compared to RM51.1 million for the previous year. The lower contribution was mainly due to the significant drop in FFB prices to RM401 per metric tonne ( MT ), a decrease of RM188 per MT or 31.9% from RM589 per MT in the preceding year, despite an increase of 10.5% in FFB production to 95,895 MT from 86,815 MT. The decline in FFB prices was in line with the average CPO price recorded in Malaysia of RM2,410 per MT during the under review which is a decline of RM700 or 23% against RM3,110 per MT during the previous year. With lower revenue and higher operating costs incurred during the year under review, the plantation division recorded a loss before tax of RM2.3 million for the current FY2013 as compared to a pre-tax profit of RM13.8 million for the previous FY2012. Property Development During the year under review, prices in the high-end residential market in prime areas such as KLCC and Mont Kiara remained flat mainly due to concerns of oversupply and the dampening effect of several cooling measures instituted by the government in recent years to curb speculative activities. The property division contributed RM19.8 million to the Group revenue for the year under review which was 55% lower than RM44.1 million reported for the previous year. The Group s commercial development project in Seremban performed well and accounted for RM18.4 million or 93% of the division s revenue for FY2013. DutaLand Berhad (7296-V) Annual Report

7 Chairman s Statement (cont d) For the year under review, the property division registered an overall loss before tax of RM4.6 million which is 67% lower than the loss before tax of RM13.9 million reported for the preceding year. The lower loss for FY2013 was mainly due to higher contributions from the commercial development project in Seremban. Furthermore the previous year s loss had included loss on disposal and impairment of RM5.7 million of certain properties. The Group s commercial development project in Seremban is being undertaken by its wholly-owned subsidiary, Oakland Holdings Sdn Bhd ( Oakland ). Revenue for the current year was mainly derived from development of Phase 4D and Phase 4E which comprises 75 units of 2-storey and 3-storey shop offices. In June 2013, Oakland completed and handed over vacant possession of Phase 4D which was fully sold. Phase 4D which comprised 38 units of 2-storey shop offices had a gross development value ( GDV ) of RM14.6 million. Phase 4E which comprises 37 units of 2-storey and 3-storey shop offices with a GDV of RM23.2 million and saw a high take-up rate of 78%, is expected to be completed by September The Kenny Heights project which is located in the affluent suburb of Sri Hartamas/Mont Kiara in Kuala Lumpur, is being undertaken on a joint venture ( JV ) basis with sister company, Olympia Industries Bhd in the ratio of 58:42 respectively with DutaLand s subsidiary taking the majority role of developer. Currently, the JV consortium has embarked on the second phase of the project which entails the development of 4 blocks (709 units) of high-end condominiums with a GDV of RM1.5 billion. To date earthworks have been undertaken on this phase. Bearing in mind the project is a long-term township development, the JV consortium is expected to review the development plans of the project to suit the changing market conditions. Significant Corporate Developments The year under review witnessed the completion of DutaLand s 6-year restructuring scheme which was implemented in April 2007 to address the Group s indebtedness which totaled RM769.1 million initially. As of end April 2013, the Company has settled all debts due and fulfilled all financial and legal obligations under the scheme. During the year under review, the Company repaid all its remaining debts outstanding under the scheme amounting to RM52.5 million nominal value comprising RM27.0 million of 2007/2013 Restructured Term Loans ( RTL ), RM13.1 million of 2007/2013 Redeemable Unsecured Loan Stocks ( RULS ), RM4.1 million of 2007/2013 Irredeemable Convertible Bonds ( ICB ) and RM8.3 million of 2007/2013 Irredeemable Convertible Unsecured Loan Stocks ( ICULS ). 6 DutaLand Berhad (7296-V) Annual Report 2013

8 Chairman s Statement (cont d) In addition, RM7,644,000 of ICB, RM275,972,365 of ICULS and USD1,320,000 (equivalent to RM4,024,020 based on the exchange rate of RM to USD1.00) of Irredeemable Exchangeable Bonds ( IEB ) were converted into 243,762,793 new ordinary shares in DutaLand on maturity date in April Following the issuance of the new shares arising from the conversion of the instruments, DutaLand s issued and paid-up capital was increased from RM602,355,246 comprising of 602,355,246 ordinary shares of RM1.00 each to RM846,118,039 comprising of 846,118,039 ordinary shares of RM1.00 each. On 6 August 2013, DutaLand entered into an agreement with Melody Hallmark Sdn Bhd ( MHSB ) to dispose of its 100% equity interest in Olympia Plaza Sdn Bhd ( OPSB ) for a sale consideration of RM50.0 million. As the Company holds 30% equity interest in MHSB, hence the net effective equity interest in OPSB divested is 70%. The transaction which netted cash proceeds of RM35.0 million to DutaLand, was completed on 3 September For the immediate future, the Group will focus on its core business areas namely the oil palm estates and property development. The Company will continue to explore ways to rationalize its operations and realize the value of its investments. Appreciation On behalf of the Board, I would like to take this opportunity to thank our shareholders, business partners and government authorities for their continuing support over the years. The Board also wishes to register its appreciation to the management and staff at DutaLand for their dedication and loyalty to the Group throughout the challenging years of the restructuring scheme which has finally been completed in April this year. In addition I wish to thank my fellow colleagues on the Board for their invaluable guidance and support in assisting me to discharge my duties as Chairman. Future Outlook With the completion of the restructuring scheme, the Group now stands on a much improved financial position as it has degeared and consolidated its debts to a manageable level. Going forward, DutaLand is well placed to chart a new course for the future ahead. YAM TENGKU DATUK SERI AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ADBUL AZIZ SHAH Chairman 19 September 2013 DutaLand Berhad (7296-V) Annual Report

9 Profile of Directors Chairman Aged 58, Malaysian YAM TENGKU DATUK SERI AHMAD SHAH IBNI ALMARHUM SULTAN SALAHUDDIN ABDUL AZIZ SHAH YAM Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah was appointed to the Board on 25 February 2009 as an Independent Non-Executive Director and was subsequently redesignated as Chairman of DutaLand Berhad on 23 November YAM Tengku Datuk Seri Ahmad Shah completed his Diploma in Business Administration from Universiti Teknologi MARA in He started his career in Charles Bradburne (1930) Sdn Bhd as a broker from 1974 to He was a Director of TTDI Development Sdn Bhd from 1978 to 2000, a Director of Sime UEP Berhad from 1983 to 1987, a Director of Sime Darby Healthcare Sdn Bhd from 2010 to 2013 and Chairman of Sime Darby Medical Centre Subang Jaya Sdn Bhd from 1987 to Presently, YAM Tengku Datuk Seri Ahmad Shah is also a Director of Global Oriental Berhad (formerly known as Equine Capital Berhad), Melewar Industrial Group Berhad and Wawasan TKH Holdings Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He is also a Director of Sime Darby Property Berhad and Recycle Energy Sdn Bhd. He is also involved in welfare organizations and is a member of the Board of Trustees of the Cancer Research Initiatives Foundation (CARIF). YAM Tengku Datuk Seri Ahmad Shah has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years (other than traffic offences, if any). YAM Tengku Datuk Seri Ahmad Shah attended all the five Board Meetings of DutaLand Berhad held in the financial year ended. Group Managing Director Aged 72, Malaysian YBHG TAN SRI DATO YAP YONG SEONG YBhg Tan Sri Dato Yap Yong Seong was appointed to the Board of DutaLand Berhad on 16 February 1993 and is a member of the Remuneration Committee of DutaLand Berhad. YBhg Tan Sri Dato Yap first ventured into the property business in the early 70 s under the Duta Group which was a pioneer in embarking on a reclamation project at the fore shore lands in Malacca which now stood the new business centre known as Melaka Raya. YBhg Tan Sri Dato Yap also sits on the Board of Olympia Industries Berhad as the Group Managing Director and on the Board of several companies within the DutaLand Berhad and Olympia Industries Berhad Groups. He is the father of YBhg Dato Yap Wee Keat and Mr Yap Wee Chun. He is also the spouse of YBhg Puan Sri Datin Leong Li Nar, a major shareholder of DutaLand Berhad. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which YBhg Tan Sri Dato Yap is deemed to be interested, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years. YBhg Tan Sri Dato Yap attended all the five Board Meetings of DutaLand Berhad held in the financial year ended. 8 DutaLand Berhad (7296-V) Annual Report 2013

10 Profile of Directors (cont d) Executive Director Aged 43, Malaysian MR YAP WEE CHUN Mr Yap Wee Chun was appointed to the Board of DutaLand Berhad on 5 September He graduated in 1990 with a Bachelor of Arts, majoring in Business Administration and Economics from Richmond University of London. Mr Yap began his career as an Officer with D & C Sakura Merchant Bank Bhd (now known as RHB Investment Bank Berhad) in Mr Yap sits on the Board of several companies within the DutaLand Berhad Group and a subsidiary in Olympia Industries Berhad Group. He is the son of YBhg Tan Sri Dato Yap Yong Seong, the Group Managing Director and YBhg Puan Sri Datin Leong Li Nar, both are major shareholders of DutaLand Berhad as well as the brother of YBhg Dato Yap Wee Keat. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which Mr Yap is deemed to be interested, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years (other than traffic offences, if any). Mr Yap attended all the five Board Meetings of DutaLand Berhad held in the financial year ended. Independent Director Aged 78, Malaysian YBHG TAN SRI DATO HAJI LAMIN BIN HAJI MOHD YUNUS YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus was appointed to the Board of DutaLand Berhad on 28 December He is the Chairman of the Audit, Nomination and Remuneration Committees of DutaLand Berhad. YBhg Tan Sri Dato Haji Lamin obtained his LLB (Honours) from the University of Singapore in 1963 and a postgraduate Diploma in Socio-Legal Studies from the University College of Wales, Cardiff, United Kingdom. Upon graduation from the University of Singapore in 1963, YBhg Tan Sri Dato Haji Lamin was admitted into the Diplomatic Service and served both locally and overseas namely, Ministry of Foreign Affairs, Malaysia and the Malaysian Embassy in Bangkok. In 1967, he began his illustrious working career in the Legal and Judicial service when he joined the Malaysian Judicial and Legal Service. He first served as Deputy Public Prosecutor in the Attorney General s Chambers, Kuala Lumpur and was later appointed Magistrate also in Kuala Lumpur. He served briefly as Acting President of the Sessions Court, Seremban before his appointment as Federal Counsel with the Ministry of Defence, Kuala Lumpur. In 1972, he was appointed Senior Assistant Registrar, High Court, Kuala Lumpur and later Deputy Public Prosecutor, Perak. In 1973, he assumed the post of Senior Federal Counsel in the Prosecution Division in the Attorney General s Chambers, Kuala Lumpur. He was appointed State Legal Advisor, Pahang in 1977 and was appointed Deputy Head of Prosecution Division, AG Chambers, Kuala Lumpur in In 1982, he returned to Pahang as Pahang State Legal Advisor and simultaneously, he was also the Judge Advocate General in the Ministry of Defence, Kuala Lumpur. In 1983, he was appointed to Solicitor General and later in 1988, he was promoted to Judge of the High Court Malaya, Pahang. In 1994, he was promoted to the position of Judge of the Federal Court. He was the first President of the Court of Appeal of Malaysia, a position that he held for almost seven years until his retirement in March 2001 after having served the six months extension as provided for under article 125 (1) of the Federal Constitution. DutaLand Berhad (7296-V) Annual Report

11 Profile of Directors (cont d) On 24 August 2005, YBhg Tan Sri Dato Haji Lamin was elected as ad litem Judge of the International Criminal Tribunal for the former Republic of Yugoslavia (ICTY) at the 59 th session of the United Nations General Assembly for a term of four years. In December 2011, he was appointed as a Judge to the Kuala Lumpur War Crimes Tribunal. From May 7 to 12, 2012, he led the panel as President to hear the case against the former United States President, George W. Bush together with seven other associates for committing the Crime of Torture. YBhg Tan Sri Dato Haji Lamin is currently a Director of Taman TAR Development Sdn Bhd. YBhg Tan Sri Dato Haji Lamin has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years (other than traffic offences, if any). YBhg Tan Sri Dato Haji Lamin attended four out of five Board Meetings of DutaLand Berhad held in the financial year ended. Non-Independent Director Aged 45, Malaysian YBHG DATO YAP WEE KEAT YBhg Dato Yap Wee Keat was appointed to the Board on 25 March 1992 and was instrumental in the property development activities of the DutaLand Berhad Group. He is also currently an Executive Director of Olympia Industries Berhad and has been responsible for the business operations of the Olympia Industries Berhad Group. He spearheads the Kenny Heights Project, a development project embarked by DutaLand Berhad through the consortium formed with Olympia Industries Berhad and which is undertaken by DutaLand Berhad sub-subsidiary, KH Land Sdn Bhd. YBhg Dato Yap obtained his LLB (Honours) degree from The London School of Economics And Political Science, United Kingdom in With the Group s investment in Automobili Lamborghini, he was appointed deputy chairman of Automobili Lamborghini from YBhg Dato Yap is also one of the founding trustees for Malaysian Tsunami Aid Foundation, Force of Nature Aid Foundation, which was established in 2005, where he sits on the Board of Trustees. YBhg Dato Yap is the eldest son of YBhg Tan Sri Dato Yap Yong Seong, the Group Managing Director and YBhg Puan Sri Datin Leong Li Nar, both are major shareholders of DutaLand Berhad. He is the eldest brother to Mr Yap Wee Chun, the Executive Director of DutaLand Berhad. YBhg Dato Yap also serves on the Board of several other private companies within Olympia Industries Berhad and DutaLand Berhad. Except for certain recurrent related party transactions of a revenue or trading nature which are necessary for the day-to-day operations of DutaLand Berhad and its subsidiaries for which YBhg Dato Yap is deemed to be interested, there are no other business arrangements with DutaLand Berhad in which he has personal interests. He has no conviction for any offences within the past 10 years (other than traffic offences, if any). YBhg Dato Yap attended all the five Board Meetings of DutaLand Berhad held in the financial year ended. 10 DutaLand Berhad (7296-V) Annual Report 2013

12 Profile of Directors (cont d) Independent Director Aged 56, Malaysian MR CHEONG WONG SANG Mr Cheong Wong Sang was appointed to the Board of DutaLand Berhad on 28 December 2001 and is a member of the Audit Committee, Nomination Committee and Remuneration Committee of DutaLand Berhad. A Certified Public Accountant (CPA) and a Certified Management Accountant (CMA) by profession, Mr Cheong has varied and extensive direct hands-on specialised business experiences, both in Malaysia and overseas. He started his early articleship training with an international accounting firm and simultaneously graduated as a Chartered Management Accountant. He specialises in turn-around situations, portfolio management, divestment exercise, Mergers & Acquisitions activities and high level negotiations involving privatisation of national projects. Prior to that, he has worked and participated as a professional manager in various senior executive positions including as director and adviser to the Board of various business entrepreneurial organisations including public listed entities in the Asia-Pacific region. Mr Cheong has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years (other than traffic offences, if any). Mr Cheong attended all the five Board Meetings of DutaLand Berhad held in the financial year ended 30 June Independent Director Aged 50, Malaysian ENCIK HAZLI BIN IBRAHIM Encik Hazli bin Ibrahim was appointed to the Board of DutaLand Berhad on 2 January 2008 and is a member of the Audit Committee and Nomination Committee of DutaLand Berhad. Encik Hazli graduated with a Bachelor of Finance with Accounting from the University of East London in 1986 and is a fellow member of the Association of Chartered Certified Accountants (ACCA). He obtained his Master of Business Administration (MBA) in 1993 from Cass Business School in London. Encik Hazli started his career in London with several chartered accountants firms. Upon his return to Malaysia in August 1994, he joined Aseambankers Malaysia Berhad, the investment banking arm of Maybank Berhad as Manager in the Corporate Finance Division. Subsequently in November 1996, he moved to Amanah Merchant Bank Berhad (now known as Alliance Investment Bank Berhad) as Assistant General Manager. He left Amanah Group in September 1998 to join Pengurusan Danaharta Nasional Berhad ( Danaharta ), a national asset management company of Malaysia as the Head of Corporate Planning, Corporate Services Division. Encik Hazli left Danaharta in October 2002 to set up Haziq Capital Sdn Bhd, a consultancy firm, specializing in corporate finance, where he is currently the Managing Director. His key areas of expertise include taking companies for listing on Bursa Malaysia Securities Berhad, corporate and debt restructuring and fund raising exercise. He is currently an Independent Non-Executive Director of Mentiga Corporation Berhad and Lebtech Berhad. He is also a Director of several private companies. Encik Hazli has no family relationship with any Director and/or major shareholder of DutaLand Berhad, has no conflict of interest with DutaLand Berhad and has no conviction for any offences within the past 10 years (other than traffic offences, if any). Encik Hazli attended all the five Board Meetings of DutaLand Berhad held in the financial year ended. DutaLand Berhad (7296-V) Annual Report

13 Corporate Governance Statement The Board of Directors ( Board ) of DutaLand Berhad ( DutaLand or Company ) is committed towards ensuring that good Corporate Governance is observed throughout the Group. Upholding integrity and professionalism in its management of the affairs of the Group, the Board aims to enhance business prosperity and corporate accountability with the ultimate objective of realising long-term shareholders value and safeguarding interests of other stakeholders. The Board will continuously evaluate the status of the Group s corporate governance practices and procedures with a view to adopt and implement the best practices in so far as they are relevant to the Group, bearing in mind the nature of the Group s businesses and the size of its business operations. The Board is pleased to disclose below how the Group has applied the principles set out in the Malaysian Code on Corporate Governance 2012 ( Code ) to its particular circumstances, having regard to the recommendations stated under each principle and the Main Market Listing Requirements ( MMLR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ) and the extent to which it has complied with the principles and recommendations for the financial year ended. BOARD OF DIRECTORS Board Charter The Board had adopted a Board Charter on 29 August 2012 which was designed to provide Directors and Officers with greater clarity regarding the expanding role of the Board, the requirements of Directors in carrying out their roles and discharging their duties to the Company, and the Board s operating practices. The Board Charter will be reviewed from time to time and updated in accordance with the needs of the Company and any new regulations that may have an impact on the roles and responsibilities of the Board. The core areas of the Board Charter include the following:- (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) Board Membership, which includes composition, appointments and re-election, independence of Director and new directorship; Board Role, which includes duties and responsibilities and matters reserved for the Board; Board Leadership which includes the Chairman and the Group Managing Director; Board Committees; Board Meetings; Directors Remuneration; Board Governance; Board Evaluation and Performance; Directors Training & Continuing Education; Board Relationship with Shareholders; Management of Risks; Share Dealings by Board Members; and Chartered Secretaries. The details of the Board Charter are available for reference in DutaLand corporate website at 12 DutaLand Berhad (7296-V) Annual Report 2013

14 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Composition and Balance The Board comprises one (1) Group Managing Director, one (1) Executive Director and a strong presence of five (5) Non-Executive Directors of whom four (4) are Independent Non-Executive Directors. Hence, the Company has fully complied with the provisions of the MMLR of Bursa Securities for independent non-executive directors to make up at least one third (1/3 rd ) of the Board membership and for a director who is qualified under Paragraph (1)(c) of the MMLR of Bursa Securities to sit on the Audit Committee. The Board is satisfied that the current composition with a balance mix of executive and non-executives members does fairly represent the investment of the majority and minority shareholders in the Company. The current Board brings with it a broad range of business, financial, technical and public service background. This balance enables the Board to provide clear and effective leadership to the Group and bring informed and independent judgement to many aspects of the Group s strategy and performance. Furthermore, the current number of Board members is conducive for efficient deliberations at Board Meetings and effective conduct of Board decision making. There is a clear division of responsibilities at the helm of the Company to ensure a balance of authority and power as the roles of the Chairman and the Group Managing Director are distinct and separate. The Chairman of the Company is an Independent Non-Executive Director which provides effective oversight over Management and reflects the Company s commitment to uphold corporate governance. The Independent Non-Executive Chairman is primarily responsible for the orderly conduct of meetings of the Board and facilitates matters between the Board and its investors. The Independent Non-Executive Chairman will also be responsible for the leadership effectiveness conduct and governance of the Board. The Group Managing Director is responsible for the development and implementation of policies/decision approved by the Board, strategy, and managing the day-to-day operations of the Group. The Group Managing Director acts as the Group s official spokesperson and is also responsible for planning the future direction of the Group for the Board s consideration and approval. The Group has complied throughout the financial year with the best practices of the Code except for the identification of a Senior Independent Non-Executive Director. Given the current composition of the Board which reflects a strong independent element and the separation of the roles of the Chairman and the Group Managing Director, the Board does not consider it necessary at this juncture to identify a Senior Independent Non-Executive Director. The Board is of the view that any concerns from shareholders can be easily brought to the attention of the Board via the Chartered Secretaries. The Board is also mindful of the recommendation of the Code on limiting the tenure of independent directors to nine (9) years of service. Each of the four (4) Independent Directors of the Company has provided an annual confirmation of his independence to the Nomination Committee and to the Board. The Nomination Committee and the Board have determined at the assessment carried out on the Independent Directors, in particular YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus and Mr Cheong Wong Sang, who have both served on the Board for more than eleven (11) years, that: a. they have no interest or ties in the Company that could adversely affect independent and objective judgement and place the interest of the Company above all other interests; b. they have met the criteria for independence as set out in Chapter 1 of the MMLR of Bursa Securities; c. they continue to remain objective and are able to exercise independent judgement in expressing their views and in participating in deliberations and decision making of the Board and Board Committees in the best interest of the Company; and d. they exercise due care as Independent Directors of the Company and carries out their profession and fiduciary duties in the interest of the Company and shareholders. DutaLand Berhad (7296-V) Annual Report

15 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Composition and Balance (cont d) The Board is of the view that there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and knowledge of the Company s affairs. Furthermore, the ability of a Director to serve effectively as an Independent Director is very much a function of his calibre, qualification, experience and personal qualities, particularly of his integrity and objectivity in discharging his responsibilities in good faith in the best interest of the Company and his duty to vigilantly safeguard the interests of the minority shareholders of the Company, has no compelling relationship to his tenure as an Independent Director. Although term limits could help to ensure that there are fresh ideas and viewpoints available to the Board, they do pose the disadvantage of losing experienced Independent Directors who overtime have developed increased insight in the Company s and/or the Group s operations and therefore, provide an increasing contribution to the effectiveness of the Board as a whole. The Board therefore opined that imposing a fixed term limit for Independent Directors does not necessarily assure independence. The Board, therefore, recommends and supports the retention of YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus and Mr Cheong Wong Sang as Independent Non-Executive Directors of the Company. The profile of the Board members are set out on pages 8 to 11 of this Annual Report. Duties and Responsibilities of the Board The Board leads the Group and is responsible for, amongst others, formulating and reviewing the overall strategic plan, key policies, control and operations of the Group, identifying risks and ensuring the existence of adequate internal controls and management systems to measure and manage risks. The presence of Independent Non-Executive Directors helps in providing an independent and constructive views, advice and opinions to the benefit of the investors, customers and other stakeholders. They also represent the element of objectivity, impartiality and independent judgment of the Board. This ensures that there is adequate check and balance at the Board level. Board Meetings and Supply of Information During the financial year ended, the Board had met five (5) times whereby all Directors have complied with the requirements in respect of Board Meeting attendance which are as follows:- Name of Director Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Number of Board Meetings Held (during tenure) Attended 5 5 Tan Sri Dato Yap Yong Seong 5 5 Yap Wee Chun 5 5 Dato Yap Wee Keat 5 5 Tan Sri Dato Haji Lamin bin Haji Mohd Yunus 5 4 Hazli bin Ibrahim 5 5 Cheong Wong Sang DutaLand Berhad (7296-V) Annual Report 2013

16 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Meetings and Supply of Information (cont d) Board Meetings are scheduled to be held regularly, at least four (4) times in a financial year with sufficient notice given for all Board Meetings of issues to be discussed. Additional Board Meetings may be called as and when significant issues arise and which require the Board s decision. The dates for Board Meetings for the ensuing financial year are scheduled well in advance and the Board has formal schedule of matters specifically reserved for the Board s discussion and/or approval. The schedule ensures that the direction and control of the Group are in the hands of the Board. All issues discussed and all decisions made during the Board Meetings will be properly recorded by the Chartered Secretaries and reviewed by the Board for completeness and accuracy. The minutes of Board Meetings are circulated to all Directors for their perusal prior to confirmation of the minutes by the Chairman of the meetings to be done at the commencement of the following Board Meeting. Senior Management staff usually attends Board Meetings for purposes of briefing the Board on various matters submitted for their consideration. The Board is satisfied with the level of commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions enclosing all relevant information to enable the Board to make informed decisions. All circular resolutions approved by the Board will be tabled for notation and confirmation at the next Board Meeting. Notices of meetings setting out the agenda and the relevant Board papers are provided to all Directors for their review in a timely manner prior to meetings. Financial and relevant information are also promptly supplied by Senior Management to the Board at each meeting for purposes of discharging their duties and responsibilities. More details affecting business units ground operations, strategies and performances are usually presented and discussed at the Management Executive Committee Meetings level held prior to the Board Meetings. Specific matters that are reserved for the full Board s decision are key corporate strategies and plan involving acquisitions and disposals of material assets, major investment decisions affecting the Group s direction and policies and approvals of all financial results and announcements. The Chairman of the Audit Committee would inform the Directors at the Board Meetings, of any salient matters raised at the Audit Committee Meetings and which require the Board s notice or direction. The Board has unrestricted and constant access to and interaction with the Senior Management of the Company and also full access to all information within the Company whether as a full Board or in their individual capacities, in furtherance of their duties. The appointment of Chartered Secretaries is based on the capability and proficiency determined by the Board. All members of the Board, whether as a whole or in their individual capacity, have access to the advice of the Chartered Secretaries on all matters relating to the Group to assist them in the furtherance of their duties. The Board is regularly updated and kept informed by the Chartered Secretaries and the Management of the requirements such as restriction in dealing with the securities of the Company and updates as issued by the various regulatory authorities including the latest developments in the legislations and regulatory framework affecting the Group. The Articles of Association of the Company permits the removal of Chartered Secretaries by the Board. Where necessary, the Directors may, whether collectively as a Board or in their individual capacities, seek external and independent professional advice from experts on any matter in furtherance of their duties as they may deem necessary and appropriate at the Company s expense. DutaLand Berhad (7296-V) Annual Report

17 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Committees The Board has also delegated specific responsibilities to Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee, all of which operate within defined terms of reference. All these Board Committees do not have executive power but report to the Board on all matters they have considered and recommended thereon. A summary of the various Board Committees at DutaLand and their compositions are as follows:- Name of Director Tengku Datuk Seri Ahmad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Audit Committee Remuneration Committee Nomination Committee Tan Sri Dato Yap Yong Seong - Member - Yap Wee Chun Tan Sri Dato Haji Lamin bin Haji Mohd Yunus Chairman Chairman Chairman Dato Yap Wee Keat Hazli bin Ibrahim Member - Member Cheong Wong Sang Member Member Member Notes: - 1. the Audit Committee is comprised exclusively Independent Directors (compliance with Paragraph of the MMLR of Bursa Securities) 2. the Remuneration Committee is comprised mainly Non-Executive Directors (as recommended in the Code) 3. the Nomination Committee is comprised entirely Independent Directors (compliance with Paragraph 15.08A of the MMLR of Bursa Securities) The Company also convenes regular Management Executive Committee Meetings which are attended by Executive Directors and Senior Management personnel at least once quarterly to review and monitor the performance of the Group s business units in meeting with its financial budgets and business targets. Audit Committee The Audit Committee takes on the role of reviewing the adequacy and integrity of the internal control system and management information system of the Company and Group. More details on the composition, terms of reference and functions of the Audit Committee are provided under the Audit Committee Report set out on pages 30 to 33 of this Annual Report. 16 DutaLand Berhad (7296-V) Annual Report 2013

18 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Committees (cont d) Nomination Committee The Nomination Committee was established by the Board on 27 February 2002 comprising entirely Independent Directors to assist the Board in carrying out the following duties:- a. To review, from time to time, the Policy Framework on the nomination and recommendation of candidates to be members of the Board. In making its recommendations, the Nomination Committee shall take into consideration candidates proposed by the Group Managing Director and, within the bounds of practicability, by any other director or shareholder. The Nomination Committee shall evaluate the candidates on the aspect of their:- - skills, knowledge, expertise and experiences; - professionalism; - integrity; and - for position of independent non-executive director, the candidates ability to discharge such responsibilities/functions independently as expected from the independent non-executive director. b. To review annually the Board s required mix of skills, experience and other qualities including the core competencies which non-executive directors should bring to the Board; c. To assess annually the effectiveness of the Board as a whole, the standing committees of the Board and the contribution of each individual Director, including the Independent Non-Executive Directors, the Group Managing Director and the Executive Director through a process directed by the Board. In line with the Code, the Nomination Committee carries out annual evaluation on the effectiveness of the Board as a whole, the various Committees and each Independent Non-Executive Directors contribution to the effectiveness of the Board s decision making process. All assessments and evaluations carried out by the Nomination Committee are properly documented. The Nomination Committee met once during the financial year ended and all the members attended the meeting. Remuneration Committee The Remuneration Committee was established by the Board on 27 February 2002 and comprises mainly Non-Executive Directors. The Remuneration Committee s main responsibility is to review and recommend to the Board the framework of Executive Directors remuneration, in particular, the remuneration packages for the Executive Directors in all its forms, drawing from outside advice, where necessary and fees payable to the Non-Executive Directors. The Board as a whole determines the remuneration package of Non-Executive Directors. The respective Directors shall abstain from deliberations in respect of their own remuneration packages. The Remuneration Committee met once during the financial year ended with full attendance of its members. DutaLand Berhad (7296-V) Annual Report

19 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Board Evaluation The Board has conducted an annual evaluation of the effectiveness of the Board and its Board Committees. The evaluation process is led by the Nomination Committee Chairman and supported by the Chartered Secretaries. The evaluation results are considered by the Nomination Committee, which then make recommendations to the Board, are aimed at helping the Board to discharge its duties and responsibilities. The evaluation of the Board is based on specific criteria, covering areas such as the Board composition and structure, principal responsibilities of the Board, the Board process, the Group Managing Director s performance, succession planning and Board governance. The 2012 performance evaluation of the Board has been structured to ensure a balanced and objective review by the Directors for the above key areas. Following the evaluation, the Board concluded that the Board as a whole and its committees had performed well, were effective and had all the necessary skills, experiences and qualities to lead the Company. The Board has also undertaken an annual assessment of the independence of its Independent Directors. The criteria for assessing the independence of an Independent Director were developed by the Nomination Committee with the support of the Chartered Secretaries which include the relationship between the Independent Director and the Company and his involvement in any significant transaction with the Company. Appointment of Directors The Board, through the Nomination Committee, will review the suitability of an individual to be appointed on the Board taking into account the skills, expertise, background and experience. The decision as to who shall be nominated remains the responsibility of the full Board after considering the recommendations of the Nomination Committee. Following appointment, new Director(s) will be duly briefed via an orientation familiarisation programme, the Company and Group s businesses, operations and management level to facilitate better understanding overall. The Board appoints its members through an independent and objective selection process. This process has been reviewed and approved by the Board. The potential candidates will be considered and evaluated by the Nomination Committee. The Nomination Committee will then recommend the candidates to be approved and appointed by the Board. The Chartered Secretaries will ensure that all appointments are properly made, all the necessary information is obtained as well as all legal and regulatory obligations are met. The Nomination Committee in evaluating the appointment of Directors look for diversity of skills and experience in its Directors and the selection is not just based on gender. DutaLand does not have a policy on boardroom diversity but believes in providing equal opportunity to all candidates based on merit. Re-appointment and Re-election of Directors As the capacity, energy and enthusiasm of a Director is not necessarily link to age, it is deemed not appropriate to prescribe age limits for the retirement of Directors. The Board believes in having a healthy mix of age and experience and therefore does not prescribe a minimum or maximum age limit for the Board apart from what is laid down under the Companies Act, DutaLand Berhad (7296-V) Annual Report 2013

20 Corporate Governance Statement (cont d) BOARD OF DIRECTORS (cont d) Re-appointment and Re-election of Directors (cont d) Pursuant to Section 129(2) of the Companies Act, 1965, Directors who have attained the age of 70 years are required to retire at every annual general meeting and may offer themselves for re-appointment to hold office until the next annual general meeting. The Articles of Association of the Company provides for all Directors to retire from office at least once every three (3) years at each annual general meeting in compliance with the MMLR of Bursa Securities. Each retiring Director is eligible for re-election. In addition, one third (1/3 rd ) of the Board, including the Group Managing Director, shall retire by rotation and shall be eligible for re-election at each annual general meeting. This provides an opportunity for the Company s shareholders to renew their mandate. The said Articles of Association also provides that a Director appointed by the Board during the financial year shall be subject to re-election at the forthcoming annual general meeting after his appointment. Retiring Directors who are seeking re-election are subject to Directors assessment overseen by the Nomination Committee. Following the assessment, the Board, on the recommendation of the Nomination Committee, make a determination as to whether it will endorse a retiring Director for re-election and/or re-appointment. Upon the recommendation of the Nomination Committee, the following Directors shall retire at the forthcoming Forty-Sixth Annual General Meeting of the Company and had offered themselves for re-election: - a. Mr Yap Wee Chun, retiring pursuant to Article 85 of the Articles of Association of the Company; b. Mr Cheong Wong Sang, retiring pursuant to Article 85 of the Articles of Association of the Company; c. YBhg Tan Sri Dato Yap Yong Seong, retiring pursuant to Section 129 of the Companies Act, 1965; and d. YBhg Tan Sri Dato Haji Lamin bin Haji Mohd Yunus, retiring pursuant to Section 129 of the Companies Act, As a policy, the Board itself would assess, evaluate and determine the independence of an Independent Director when he is due for retirement and/or re-appointment at the annual general meeting of the Company, notwithstanding that the tenure of the Independent Director has been more than nine (9) years. Directors Training All members of the Board have successfully completed the Mandatory Accreditation Programme as required by Bursa Securities. The Directors are aware and are encouraged to attend continuing education programmes, seminars and conferences to keep themselves abreast of the current developments and business environment affecting their roles and responsibilities to the Group. The Chartered Secretaries facilitate Directors attendances at external programmes and keep a complete records of the training received or attended by the Directors. DutaLand Berhad (7296-V) Annual Report