BATU KAWAN BERHAD (6292-U) ANNUAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER

Transcription

1 (6292-U) ANNUAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2006

2 Contents Page Notice of Annual General Meeting 1-3 Notis Mesyuarat Agung Tahunan 4-6 Corporate Information 7 Profile of the Directors 8-10 Chairman s Review Ulasan Pengerusi Statement of Corporate Governance Statement on Internal Control Report of the Audit Committee Report of the Directors Directors Responsibility Statement 34 Income Statements 35 Balance Sheets 36 Statement of Changes in Equity of the Group 37 Statement of Changes in Equity of the Holding Company 38 Consolidated Cash Flow Statement 39 Cash Flow Statement of the Holding Company 40 Notes to the Financial Statements Statement by the Directors 68 Statutory Declaration 68 Report of the Auditors to the Members 69 Shareholding Statistics Properties of the Group 72

3 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the Forty-second ANNUAL GENERAL MEETING of the members of the Company will be held at its Registered Office, Wisma Taiko, 1, Jalan S. P. Seenivasagam, Ipoh, Perak Darul Ridzuan, Malaysia on Wednesday, 14 February 2007 at 2.15 p.m. for the following purposes:- 1. To receive and adopt the Financial Statements for the year ended 30 September 2006 and the Directors and Auditors Reports thereon. 2. To sanction the payment of a Final Dividend and a Special Dividend for the year ended 30 September (Resolution 1) (Resolution 2) 3. To re-elect the following Directors:- (a) (b) Dato Lee Hau Hian Dato Lee Soon Hian (Resolution 3) (Resolution 4) 4. To consider and, if thought fit, pass resolutions pursuant to Section 129(6) of the Companies Act, 1965 to re-appoint the following as Directors of the Company to hold office until the next Annual General Meeting of the Company:- (a) (b) R.M. Alias Tan Sri Dato Thong Yaw Hong (Resolution 5) (Resolution 6) 5. To approve Directors fees for the year ended 30 September 2006 amounting to RM534,000 (2005 : RM534,625). 6. To appoint Auditors and to authorise the Directors to fix their remuneration. 7. As SPECIAL BUSINESS, to consider and, if thought fit, pass the following as Ordinary Resolutions:- (a) PROPOSED AUTHORITY TO BUY BACK ITS OWN SHARES BY THE COMPANY THAT authority be given to the Directors for the Company to buy back such amount of ordinary shares of RM1 each in the Company ( Proposed Authority to Buy Back Shares ) as may be determined by the Directors from time to time through the Bursa Malaysia Securities Berhad ( Bursa Securities ) upon such terms and conditions as the Directors may deem fit and expedient in the best interests of the Company provided that the aggregate number of shares purchased pursuant to this resolution does not exceed approximately 3.59% of the issued and paid-up share capital of the Company (or equivalent to 10,369,000 shares in the Company based on its adjusted issued and paid-up share capital [excluding treasury shares] of 289,152,000 shares of RM1 each as at 8 December 2006) and that an amount not exceeding the total audited retained profits of the Company be allocated for the Proposed Authority to Buy Back Shares (as at 30 September 2006, the retained profits of the Company was RM335,736,000) AND THAT the Directors may resolve to cancel the shares so purchased and/or retain the shares so purchased as treasury shares which may be distributed as dividends to the shareholders of the Company and/or resold on the Bursa Securities and/or cancelled; (Resolution 7) (Resolution 8) (Resolution 9) AND THAT the Directors be and are hereby empowered to do all such acts and things to give full effect to the Proposed Authority to Buy Back Shares with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities; AND THAT such authority shall commence upon the passing of this ordinary resolution and will expire at the conclusion of the next Annual General Meeting of the Company following the passing of this ordinary resolution or the expiry of the period within which the next Annual General Meeting is required by law to be held (unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting) but not so as to prejudice the completion of a purchase by the Company before the aforesaid expiry date and, in any event, in accordance with the provisions of the guidelines issued by the Bursa Securities or any other relevant authority. 1

4 Notice of Annual General Meeting (Continued) (b) PROPOSED SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (Resolution 10) THAT subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Company and the Listing Requirements of the Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiary companies to enter into all arrangements and/or transactions as set out in PART B Section 2.2(b) of the Circular to Shareholders dated 19 December 2006 involving the interests of Directors, major shareholders or persons connected with Directors or major shareholders ( Related Parties ) of the Company and/or its subsidiary companies provided that such arrangements and/or transactions are:- (i) recurrent transactions of a revenue or trading nature; (ii) necessary for the Group s day-to-day operations; (iii) carried out in the ordinary course of business on normal commercial terms which are not more favourable to the Related Parties than those generally available to the public; and (iv) are not to the detriment of minority shareholders; ( the Mandate ); THAT such authority shall commence upon the passing of this resolution and shall continue to be in force until:- (i) the conclusion of the next Annual General Meeting of the Company following the Annual General Meeting at which such mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; (ii) the expiration of the period within which the next Annual General Meeting after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965; or (iii) revoked or varied by resolution passed by the shareholders in general meeting; whichever is the earlier; AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Mandate. 8. To transact any other ordinary business. By Order of the Board J.C. LIM LEONG SEA FOOK (Secretaries). Ipoh, Perak Darul Ridzuan, Malaysia. 19 December

5 Notice of Annual General Meeting (Continued) NOTES:- (1) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or not more than two proxies to vote in his stead. A proxy need not be a member of the Company. (2) The instrument appointing a proxy, to be valid, must be deposited at the Registered Office of the Company at Wisma Taiko, 1, Jalan S. P. Seenivasagam, Ipoh, Perak Darul Ridzuan, not less than 48 hours before the time for holding the meeting. (3) The Final Dividend and Special Dividend, if approved, will be paid on 15 March 2007 to all shareholders on the Register of Members as at 16 February A Depositor with the Bursa Malaysia Depository Sdn Bhd shall qualify for entitlement to the dividends only in respect of:- (i) (ii) securities deposited into the Depositor s Securities Account before p.m. on 14 February 2007 in respect of securities which are exempted from mandatory deposit; securities transferred into the Depositor s Securities Account before 4.00 p.m. on 16 February 2007 in respect of transfers; and (iii) securities bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad. (4) Profile of the Directors (together with their attendance in Board Meetings) standing for re-election or re-appointment as Directors of the Company under Resolutions 3 to 6 are shown on pages 8 to 10 of this 2006 Annual Report. (5) Ordinary Resolution 9 under item 7(a), if passed, is to give authority to Directors to buy back the Company s own shares. This authority will expire at the next Annual General Meeting of the Company unless earlier revoked or varied by ordinary resolution of the Company at a general meeting. (6) Ordinary Resolution 10 under item 7(b), if passed, will allow the Group to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature in the ordinary course of business made on an arm s length basis and on normal commercial terms not more favourable to the related parties than those generally available to the public, and are not to the detriment of the minority shareholders. By obtaining the Proposed Shareholders Mandate under Ordinary Resolution 10 and the renewal of the same on an annual basis, the necessity to convene separate general meetings from time to time to seek shareholders approval as and when such recurrent related party transactions occur is avoided which would reduce substantial administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. For Ordinary Resolutions 9 and 10 mentioned above, further information is set out in the Circular to Shareholders of the Company which is despatched together with the Company s 2006 Annual Report. (A proxy form is attached with this Annual Report) 3

6 Notis Mesyuarat Agung Tahunan DENGAN INI DIBERITAHU bahawa MESYUARAT AGUNG TAHUNAN pemegang-pemegang saham Syarikat yang Ke Empat Puluh Dua akan diadakan di Pejabat Berdaftar di Wisma Taiko, 1, Jalan S. P. Seenivasagam, Ipoh, Perak Darul Ridzuan, Malaysia pada hari Rabu, 14 Februari 2007 pada jam 2.15 petang untuk tujuan-tujuan berikut:- 1. Menerima dan meluluskan Penyata Kewangan bagi tahun berakhir 30 September 2006 dan Laporan Para Pengarah dan Juruaudit. 2. Meluluskan bayaran Dividen Akhir dan Dividen Khas bagi tahun berakhir 30 September (Resolusi 1). (Resolusi 2) 3. Melantik semula Pengarah-Pengarah berikut:- (a) Dato Lee Hau Hian (b) Dato Lee Soon Hian (Resolusi 3) (Resolusi 4) 4. Mempertimbangkan dan sekiranya wajar, meluluskan resolusi menurut Seksyen 129(6) Akta Syarikat, 1965 bagi melantik semula penama berikut sebagai Pengarah Syarikat untuk berkhidmat hingga Mesyuarat Agung Tahunan Syarikat tahun berikutnya:- (a) R.M. Alias (b) Tan Sri Dato Thong Yaw Hong 5. Meluluskan bayaran yuran Pengarah-Pengarah sebanyak RM534,000 bagi tahun berakhir 30 September 2006 (2005 : RM534,625). 6. Melantik Juruaudit dan memberi kuasa kepada para Pengarah menetapkan ganjaran Juruaudit. (Resolusi 5) (Resolusi 6) (Resolusi 7) (Resolusi 8) 7. Sebagai URUSAN KHAS, untuk menimbangkan dan sekiranya bersesuaian meluluskan yang berikut sebagai Resolusi-Resolusi Biasa:- (a) CADANGAN MEMBERI KUASA MEMBELI BALIK SAHAM SENDIRI OLEH SYARIKAT (Resolusi 9) BAHAWA kuasa diberi kepada Pengarah-Pengarah untuk Syarikat membeli balik saham biasa bernilai RM1 setiap satu dalam Syarikat ( Cadangan Memberi Kuasa Membeli Balik Saham ) dengan amaunnya ditentukan oleh Pengarah-Pengarah dari masa ke semasa melalui Bursa Malaysia Securities Berhad ( Bursa Securities ) mengikut syarat-syarat yang dianggap oleh Pengarah-Pengarah sesuai dan wajar demi kepentingan Syarikat tertakluk kepada jumlah saham yang dibeli melalui resolusi ini tidak melebihi anggaran 3.59% dari jumlah modal saham terbitan dan berbayar Syarikat (bersamaan dengan 10,369,000 saham Syarikat berdasarkan modal saham terbitan dan berbayar yang telah diubahsuai [tidak termasuk saham perbendaharaan] sebanyak 289,152,000 saham bernilai RM1 setiap satu pada 8 Disember 2006) dan amaun yang tidak melebihi jumlah keuntungan terkumpul Syarikat yang telah diaudit akan diperuntukkan untuk Cadangan Memberi Kuasa Membeli Balik Saham (pada 30 September 2006, keuntungan terkumpul Syarikat adalah sebanyak RM335,736,000) DAN BAHAWA Pengarah-Pengarah boleh meresolusikan untuk membatalkan saham yang dibeli dan/atau menyimpan saham yang dibeli sebagai saham perbendaharaan dimana ianya boleh diagih sebagai dividen kepada pemegangpemegang saham Syarikat dan/atau dijual semula melalui Bursa Securities dan/atau dibatalkan; DAN BAHAWA Pengarah-Pengarah diberi kuasa membuat segala tindakan dan perkara yang perlu untuk melaksanakan dengan penuh Cadangan Memberi Kuasa Membeli Balik Saham dengan penuh kuasa untuk menyetujui sebarang syarat, ubahsuaian, nilaian semula, perubahan dan/atau pindaan (jika ada) yang dikuatkuasakan oleh pihak berkuasa berkenaan; DAN BAHAWA kuasa tersebut akan bermula apabila resolusi ini diluluskan dan akan tamat pada penghabisan Mesyuarat Agung Tahunan Syarikat tahun hadapan berikutan dengan kelulusan resolusi biasa ini atau penamatan jangkamasa dalam tempoh dimana Mesyuarat Agung Tahunan hadapan yang dikehendaki oleh undang-undang perlu diadakan (kecuali dibatalkan atau diubahsuai melalui resolusi biasa pemegang-pemegang saham Syarikat dalam Mesyuarat Agung) tetapi tidak menjejaskan penyempurnaan pembelian oleh Syarikat sebelum tarikh tamat dan, dalam keadaan apa pun, seharusnya mengikut peruntukan dalam garis panduan yang dikeluarkan oleh Bursa Securities atau mana-mana pihak berkuasa berkenaan. 4

7 Notis Mesyuarat Agung Tahunan (Sambungan) (b) CADANGAN PEMEGANG-PEMEGANG SAHAM MEMBERI MANDAT UNTUK MELULUSKAN TRANSAKSI DAGANGAN SERING BERULANG DENGAN PIHAK-PIHAK YANG BERKAITAN (Resolusi 10) BAHAWA, tertakluk kepada Akta Syarikat, 1965, Tatacara dan Tataurus Syarikat dan Peraturan Bursa Malaysia Securities Berhad, kelulusan diberikan kepada Syarikat dan/atau subsidiarisubsidiarinya untuk mementerai perjanjian atau menangani transaksi dengan pihak-pihak yang berkaitan seperti yang tertera di BAHAGIAN B Seksyen 2.2(b) dalam Surat Pekeliling kepada pemegang-pemegang saham bertarikh 19 Disember 2006 yang melibatkan kepentingan Pengarah-pengarah atau pemegang saham utama atau pihak-pihak yang berkaitan dengan Pengarah-pengarah atau pemegang-pemegang saham utama ( Pihak-pihak berkaitan ) syarikat dan/atau subsidiari-subsidiarinya sekiranya transaksi-transaksi tersebut adalah:- (i) sering berulang dan bersifat dagangan; (ii) merupakan keperluan untuk urusan perniagaan harian; (iii) dilaksanakan secara perniagaan biasa seumpama transaksi dijalankan dengan pihak umum dan tidak memberikan kelebihan kepada pihak-pihak berkaitan; dan (iv) tidak merugikan atau menjejaskan kepentingan pemegang-pemegang saham minoriti; ( Mandat ); DAN BAHAWA, mandat tersebut akan berkuatkuasa sebaik sahaja resolusi ini diluluskan dan berkuatkuasa sehingga:- (i) (ii) (iii) penamatan Mesyuarat Agung Tahunan Syarikat selepas Mesyuarat Agung Tahunan pada mana mandat tersebut diluluskan bila mana ia akan luput, melainkan resolusi diluluskan untuk memperbaharui mandat, diperolehi dalam mesyuarat tersebut; tamatnya tempoh bilamasa Mesyuarat Agung Tahunan perlu diadakan mengikut seksyen 143(1) Akta Syarikat, 1965 (tetapi tidak dilanjutkan kepada lanjutan yang dibenarkan dibawah seksyen 143(2) Akta Syarikat, 1965 tersebut); atau dimansuhkan atau diubah oleh suatu resolusi yang diluluskan oleh pemegang-pemegang saham dalam mesyuarat agung; yang mana lebih terdahulu; DAN BAHAWA, Pengarah-pengarah Syarikat diberi kuasa untuk melengkapkan dan melaksanakan apa jua (termasuk menyempurnakan dokumen yang diperlukan) untuk membolehkan Mandat tersebut dikuatkuasakan. 8. Menguruskan perkara-perkara biasa lain. Dengan Perintah Lembaga Pengarah J. C. LIM LEONG SEA FOOK (Setiausaha-Setiausaha) Ipoh, Perak Darul Ridzuan, Malaysia. 19 Disember

8 Notis Mesyuarat Agung Tahunan (Sambungan) NOTA-NOTA:- (1) Seorang pemegang saham Syarikat yang berhak menghadiri dan mengundi di mesyuarat ini adalah berhak melantik seorang proksi atau tidak lebih dari dua proksi untuk menghadiri dan mengundi bagi pihaknya. Seorang proksi tidak semestinya seorang pemegang saham Syarikat. (2) Suratcara perlantikan proksi, supaya ianya sah, hendaklah sampai ke Pejabat Berdaftar Syarikat di Wisma Taiko, 1, Jalan S. P. Seenivasagam, Ipoh, Perak Darul Ridzuan, tidak kurang daripada 48 jam sebelum mesyuarat ini diadakan. (3) Dividen Akhir dan Dividen Khas, jika diluluskan, akan dibayar pada 15 Mac 2007 kepada semua pemegang-pemegang saham yang didaftarkan dalam Buku Pendaftaran Ahli seperti pada 16 Februari Seseorang pendeposit dengan Bursa Malaysia Depository Sdn Bhd hanya layak untuk menerima dividen-dividen berhubung dengan:- (i) (ii) (iii) saham yang didepositkan ke dalam akaun sekuriti pendeposit sebelum pukul petang pada 14 Februari 2007 berhubung dengan saham yang dikecualikan daripada deposit mandatori; saham yang dipindahkan ke dalam akaun sekuriti pendeposit sebelum pukul 4.00 petang pada 16 Februari 2007 berhubung dengan pindahan; dan saham yang dibeli di Bursa Malaysia Securities Berhad pada dasar bersama kelayakan menurut Peraturan Bursa Malaysia Securities Berhad. (4) Profil para pengarah (bersama dengan kehadiran mereka dalam Mesyuarat Lembaga Pengarah) yang akan dipilih atau dilantik semula sebagai pengarah-pengarah syarikat untuk resolusi-resolusi 3 hingga 6 tertera pada mukasurat 8 hingga 10 dalam Laporan Tahunan (5) Cadangan Resolusi Biasa 9 dibawah perenggan 7(a) jika diluluskan bertujuan memberi kuasa kepada para pengarah untuk membeli balik saham Syarikat pada satu masa bila mana terma dan syarat-syarat pengarah-pengarah mendapati sesuai dengan kepentingan Syarikat. Bidang kuasa ini akan luput pada Mesyuarat Agung Tahunan yang akan datang melainkan sekiranya diimansuhkan atau diubah melalui resolusi biasa Syarikat dalam suatu mesyuarat umum. (6) Cadangan Resolusi Biasa 10 dibawah perenggan 7(b) jika diluluskan akan membenarkan Kumpulan menjalankan transaksi-transaksi sering berulang bersifat dagangan dengan pihak-pihak berkaitan dalam transaksi perniagaan biasa atas syarat-syarat komersil yang tidak memberikan apa-apa kelebihan kepada pihak berkaitan dan tidak merugikan atau menjejaskan kepentingan pemegang-pemegang saham minoriti. Dengan mendapatkan mandat pemegang saham yang dicadangkan dalam Resolusi Biasa 10 dan memperbaharuinya setiap tahun, keperluan untuk mengadakan mesyuarat-mesyuarat yang berasingan dari masa ke semasa untuk mendapatkan kelulusan pemegang saham bila mana berlakunya transaksi demikian, akan dapat dielakkan. Dengan memperolehi mandat ini, masa pentadbiran, kesulitan dan perbelanjaan berkaitan dengan mengadakan mesyuarat akan dijimatkan tanpa menjejaskan objektif Korporat Kumpulan dan peluang perniagaan yang sedia ada kepada Kumpulan. Untuk Resolusi Biasa 9 dan 10, penerangan lanjut berkenaan dengan perkara-perkara tersebut di atas adalah terkandung di dalam Surat Pekeliling kepada Pemegang Saham dimana ianya telah disertakan bersama dengan Laporan Tahunan Syarikat ini untuk tahun (Sesalinan borang proksi dikembarkan bersama Laporan Tahunan ini). 6

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10 Profile of the Directors The Board of Directors comprises a Non-Executive Chairman, a Managing Director and six (6) Non-Executive Directors, four (4) of whom are independent. The Board meets quarterly and additional Board Meetings are held as and when required. The Board met four (4) times during the financial year ended 30 September Particulars of the Directors are as follows:- DATO SERI LEE OI HIAN Malaysian, aged 55, joined the Board on 1 June 1979 and is the Non-Independent Non-Executive Chairman of Batu Kawan Berhad ( BKB ). He is also the Chairman/CEO of Kuala Lumpur Kepong Berhad and a director of Yule Catto & Co. plc, which is listed on the London Stock Exchange. He is the current Chairman of the Malaysian Palm Oil Council. He also serves as a trustee of Yayasan Tuanku Bainun, Perdana Leadership Foundation, Star Foundation, Yayasan KLK and Tan Sri Lee Loy Seng Foundation and as a director of Royal Perak Golf Club Berhad. He graduated from the University of Malaya with a Bachelor of Agricultural Science (Honours) degree and obtained his Masters in Business Administration from Harvard Business School, U.S.A. Dato Lee Hau Hian and Dato Lee Soon Hian, who are also Directors of BKB, are his brothers. He is deemed connected with Arusha Enterprise Sdn Bhd, a substantial shareholder of BKB. He is deemed interested in various related parties transactions with the BKB Group. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. DATO LEE HAU HIAN Malaysian, aged 53, Managing Director of BKB, joined the Board on 20 December Dato Lee Hau Hian is a director of Kuala Lumpur Kepong Berhad and Yule Catto & Co. plc, a company listed on the London Stock Exchange. He is the President of the Perak Chinese Maternity Association and the Treasurer of the Perak Entrepreneur & Skills Development Centre. He also serves as a director of Yayasan De La Salle and is a trustee of Yayasan KLK and Tan Sri Lee Loy Seng Foundation. He graduated with a Bachelor of Science (Economics) degree from the London School of Economics and has a MBA degree from Stanford University, U.S.A. He is the brother of Dato Seri Lee Oi Hian and Dato Lee Soon Hian, who are also Directors of BKB, and is deemed connected with Arusha Enterprise Sdn Bhd, a substantial shareholder of BKB. He is deemed interested in various related parties transactions with the BKB Group. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. YM TENGKU ROBERT HAMZAH Malaysian, aged 67, Independent Non-Executive Director, joined the Board on 1 May He is the Chairman of the Audit Committee and a member of the Nomination Committee of the Board. He is also a director of Kuala Lumpur Kepong Berhad. An architect by profession, he graduated from AA School of Architecture, and is a member of Persatuan Arkitek Malaysia and Lembaga Arkitek Malaysia. He is the Chairman of T.R. Hamzah & Yeang Sdn Bhd since He has no family relationship with any director/major shareholder of BKB. He is deemed interested in various transactions between the BKB Group and certain companies carried out in the ordinary course of business by virtue of his common directorships in these companies. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. 8

11 Profile of the Directors (Continued) R.M. ALIAS Malaysian, aged 74, Independent Non-Executive Director, has served on the Board since 1 December He is the Chairman of the Remuneration Committee of the Board. He holds a Bachelor of Arts (Honours) degree from the University of Malaya, Singapore, a Certificate of Public Administration from the Royal Institute of Public Administration, London and has attended the Advanced Management Program at Harvard Business School, U.S.A. He is currently the Chairman of Highlands and Lowlands Berhad, a public listed company. In addition, he is a director of five (5) other listed companies, namely, Kuala Lumpur Kepong Berhad, Kumpulan Guthrie Berhad, Malayan Banking Berhad, Sime Darby Berhad and Cerebos Pacific Limited (Singapore). He is also a director of Mayban Fortis Holdings Berhad and a trustee of Yayasan KLK and Tan Sri Lee Loy Seng Foundation. He has no family relationship with any director/major shareholder of BKB. He is deemed interested in various transactions between the BKB Group and certain companies carried out in the ordinary course of business by virtue of his common directorships in these companies. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. TAN SRI DATO THONG YAW HONG Malaysian, aged 76, Independent Non-Executive Director, joined the Board on 23 January He is the Chairman of the Nomination Committee of the Board and a member of the Audit Committee and Remuneration Committee. Tan Sri Thong is the Co-Chairman of Public Bank Berhad and Public Mutual Berhad, Chairman of Berjaya Land Berhad and Berjaya Sports Toto Berhad. He is also a director of Kuala Lumpur Kepong Berhad, Glenealy Plantations (Malaya) Bhd, HHB Holding Bhd, Malaysian South-South Corporation Bhd, Berjaya General Insurance Berhad, Public Merchant Bank Berhad and Public Islamic Bank Berhad. He had served in the Economic Planning Unit in the Prime Minister s Department since 1957 and became its Director-General from 1971 to 1978 and served as Secretary-General, Ministry of Finance from 1979 until his retirement in He was formerly the Chairman of the Employees Provident Fund Board. He currently serves as a member on the Boards of Trustees of Program Pertukaran Fellowship Perdana Menteri Malaysia, Tun Razak Foundation, Malaysian Institute of Economic Research and Yayasan Wah Seong. He is also a member of the Working Group of the Executive Committee for the National Economic Action Council, now renamed as National Implementation Task Force, and a member of the Investment Committee for the Unit Trust Funds managed by Public Mutual Berhad. He graduated with a Bachelor of Arts (Honours) degree in Economics from University of Malaya and a Masters degree in Public Administration from Harvard University, and has attended the Advanced Management Program from Harvard Business School. Tan Sri was the Pro-Chancellor of Universiti Putra Malaysia until June He was conferred the Honorary Doctorate of Economics by Universiti Putra Malaysia on 17 September He has no family relationship with any director/major shareholder of BKB. He is deemed interested in transactions between the BKB Group and certain companies carried out in the ordinary course of business by virtue of his common directorships in these companies. He attended all the four (4) Board of Directors meetings held in the financial year ended 30 September He has not been convicted of any offence. DATO MUSTAFA BIN MOHD ALI Malaysian, aged 69, a Non-Independent Non-Executive Director, joined the Board on 31 October He is a member of the Remuneration Committee of the Board. He is a Cambridge University Economics graduate and has attended the Harvard Business School s Advanced Management Program. He served 26 years with the Malaysian Tobacco Company including a 2 1 /2 years assignment as Corporate Planning Officer at British-American Tobacco Co. London, and was its Managing Director prior to joining Sime Darby Berhad on 1 July He worked for some six years with Sime Darby in various senior management positions before his retirement in February He was a Business Adviser to Kumpulan Guthrie Bhd from April 1994 to June He is also a director of two (2) other listed companies, namely, Sime UEP Properties Berhad and Affin Holdings Berhad. He is a nominee director of Permodalan Nasional Berhad. Save as disclosed, he has no family relationship with any director/ major shareholder of BKB and does not have any conflict of interest with BKB. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. 9

12 Profile of the Directors (Continued) DATO LEE SOON HIAN Malaysian, aged 49, Non-Independent Non-Executive Director, joined the Board on 17 February He is a member of the Nomination Committee of the Board. He brings along to BKB his wide experience in manufacturing and marketing. He is the brother of Dato Seri Lee Oi Hian and Dato Lee Hau Hian who are also Directors of BKB. He is deemed interested in various related parties transactions with the BKB Group. He attended all the four (4) Board of Directors meetings held during the financial year ended 30 September He has not been convicted of any offence. YEOH ENG KHOON Malaysian, aged 59, Independent Non-Executive Director, was appointed to the Board on 24 February He is a member of the Audit Committee of the Board. He is also a director of Kuala Lumpur Kepong Berhad and a trustee of Yayasan KLK. He has previous work experience in banking, manufacturing and the retail business. He obtained a degree of Bachelor of Arts (Honours) in Economics (Business Administration) from the University of Malaya in 1968 and was called to the Bar of England and Wales at Lincoln s Inn in He has no family relationship with any director/major shareholder of BKB. He is deemed interested in various transactions between the BKB Group and certain companies carried out in the ordinary course of business by virtue of his common directorships in these companies. He has attended all the four (4) Board of Directors Meetings held during the financial year ended 30 September He has not been convicted of any offence. 10

13 Chairman s Review It is pleasing to report that the Group achieved a 10% higher pre-tax profit of RM348.9 million for the financial year ended 30 September 2006 than the previous year. Significantly higher dividends and capital gains received on our investments accounted for this improvement. Our main associated company, Kuala Lumpur Kepong Berhad ( KLK ), while benefiting from favourable rubber and palm oil prices, reported a similar level of overall profits to last year s due to lower contribution from its manufacturing sector. Profit after tax and minority interests attributable to shareholders is RM266.5 million with net earnings per share of 92.2 sen achieved for the year compared to last year s net earnings per share of 79.6 sen, a 16% increase. Your Board is recommending increased dividends for shareholders approval, comprising a final dividend of 13 sen gross, less tax and a special dividend of 30 sen gross, less tax. Together with the interim dividend of 12 sen gross paid earlier, the total dividends paid/payable in respect of the 2006 financial year will be 55 sen, a 37.5% increase over last year s total gross dividends. In addition, to reward shareholders loyalty, your Board is also recommending a Bonus Issue of 1 new share for every 2 existing shares held at an entitlement date to be announced later. The bonus shares will however not be entitled to the dividends declared for the 2006 financial year. MAIN ASSOCIATED COMPANY KLK KLK reported a slight increase in pre-tax profit of RM596.3 million compared to a restated profit of RM585.8 million for the previous year. The restatement of FY 2005 year s results was due to the early adoption of the revised Accounting Standard (FRS 121) this year. Our company s share of KLK s pre-tax profit is RM275.2 million, slightly higher than the RM268.3 million for last year. With higher rubber and palm oil prices, KLK s plantation profits reached a new record of RM469.9 million, 10% higher than the RM426.7 million achieved last year. Due to a sharp rise in rubber prices, the Company s 16,259 hectares of mature rubber was a star performer contributing RM111 million in profits, before replanting expenditure, or an increase of RM44 million. Among the plantation companies, KLK has one of the largest rubber hectares remaining. Average CPO selling price achieved was RM10/tonne higher at RM1,401 per tonne ex-mill, but there was a sharp decrease of RM114/tonne for palm kernels which resulted in a lower average selling price of RM872/tonne. Thus despite a 7.6% increase in total FFB production to 2.4 million tonnes, a lower profit contribution from the oil palm sector was reported. Unusually wet weather also caused a lower oil extraction rate of 20.5% for the year. With the strong contribution from rubber, the Peninsular estates has replaced the Sabah plantations as the largest profit contributor while contributions from the Indonesian plantations are improving due to increasing mature areas lowering their average production costs. Overall, prime age oil palms still form a relatively low 29.6% of its total planted hectarage for the KLK group, a ratio that will improve in the next few years with increasing maturity of its younger areas. Profit from the manufacturing sector was sharply lower at RM19.3 million due to several factors. There were increased competitive conditions in the oleochemical sector due to capacity increases in the industry. The newly commissioned China oleochemical subsidiary also incurred start-up losses as it needs to develop and establish a customer base there. A new start-up subsidiary involved in extraction of value-added nutrients from palm oil also incurred start-up losses. The loss-making examination glove operations were closed resulting in some write-offs on assets and stocks. Meanwhile, early next year KLK s new fatty alcohol plant, located in Port Klang, will be commissioned, moving the Group further down the value chain for oleochemicals. Property profits were higher as several phases of the housing development in Desa Coalfields were successfully completed. INDUSTRIAL OPERATIONS Overall, our chemical subsidiaries contributed pre-tax profits of RM32.0 million, slightly higher than the RM30.2 million achieved last year. Increased fuel and energy costs impacted operating margins while costs of some raw materials remained high. The Malay-Sino Chemical Industries group reported 10% better profits due to higher plant utilisation at our Lahat plant and stable product prices. The Kemaman plant continues to operate satisfactorily. The methyl chloride subsidiary has been able to develop some new export sales to supplement stagnant domestic demand for its product. 11

14 Chairman s Review (Continued) In contrast, See Sen Chemical Berhad reported lower profits due to lower prices in the second half of the year. With continued high metals prices, there has been strong refining activity at the smelters, which resulted in high production of sulphuric acid as a by-product. Such smelter acid when imported into the country has a depressing effect on domestic prices. Meanwhile sales of sulphur powder have increased in line with growing customer acceptance and development of new sales outlets. Our transport subsidiaries, despite higher fuel costs, managed to increase their turnover and their overall profit contribution due to higher demand for their services. Progressively over the last few years, the number of transport trips and tankers owned has increased significantly. INVESTMENTS During the year, we received good dividends from our 15% shareholding in Bard Sdn Bhd, a manufacturer of rubber catheters. This together with capital repayment from the on-going liquidation of a former stock-broking company investment and capital gains from disposal of an overseas investment, mentioned last year, has resulted in a sharp increase in our investment income to some RM48.1 million for the year. The conditional purchase of a 75% equity stake in PT Satu Sembilan Delapan, an Indonesia company, applying for final titles to 20,000 hectares of land in East Kalimantan, announced earlier, remains outstanding. Negotiations are ongoing to seek a higher participation in this company but based on a smaller eventual hectarage due to elimination of hilly areas. Meanwhile an oil palm nursery has been set up and clearing of part of the areas is in progress. COMMERCIAL OFFICE BUILDING Construction of the basement and ground level structure of our 11-storey commercial building in Mutiara Damansara, Selangor, is on-going though with delayed progress. On completion, construction of the building s main superstructure will commence. We expect completion of the building to be in late GENERAL The outlook for palm oil and rubber prices remain very encouraging and positive, with palm oil prices remaining buoyant sustained by strong interest from developments in the biodiesel sector. Therefore prospects for the new financial year are good. On your behalf, I would thank my fellow Board members and all group employees for their contributions during the past year. Dato Seri Lee Oi Hian Chairman 29 November

15 Ulasan Pengerusi Dengan sukacitanya kami melaporkan keuntungan sebelum cukai Kumpulan untuk tahun kewangan berakhir 30 September 2006 yang mencatatkan jumlah yang membanggakan iaitu sebanyak RM348.9 juta, 10% lebih tinggi daripada keuntungan tahun lepas. Pendapatan yang diterima dari dividen dan perolehan modal yang diterima telah menyumbang kepada kenaikan keuntungan Kumpulan. Syarikat sekutu utama kita, Kuala Lumpur Kepong Berhad ( KLK ) yang turut mendapat manfaat dari harga getah dan minyak sawit yang memberangsangkan, telah melaporkan tahap keuntungan yang sama pada keseluruhannya disebabkan oleh sektor pengilangannya yang tidak banyak membantu merangsang keuntungan kumpulannya. Keuntungan selepas cukai dan kepentingan minoriti yang boleh dibahagi kepada pemegang saham adalah berjumlah RM266.5 juta dan keuntungan sesaham meningkat 16% kepada 92.2 sen berbanding dengan keuntungan sesaham sebanyak 79.6 sen tahun lepas. Lembaga Pengarah anda telah mengesyorkan untuk kelulusan para pemegang saham dividen akhir sebanyak 13 sen kasar ditolak cukai dan dividen khas sebanyak 30 sen kasar ditolak cukai. Bersama dividen interim 12 sen kasar yang telah dibayar terdahulu, jumlah keseluruhan dividen yang dibayar/boleh dibayar bagi tahun kewangan 2006 adalah 55 sen kasar ditolak cukai yakni peningkatan sebanyak 37.5% berbanding dengan dividen kasar yang dibayar tahun lepas. Sebagai menghargai kesetiaan para pemegang saham, Lembaga Pengarah anda juga telah mengesyorkan Saham Terbitan Bonus 1 saham baru untuk setiap 2 saham yang dimiliki sekarang pada tarikh hak penerimaan terbitan yang akan diumumkan kelak. Saham terbitan bonus ini walau bagaimanapun tidak berhak untuk mendapat dividen yang telah diisytiharkan pada tahun kewangan SYARIKAT SEKUTU UTAMA KLK Syarikat sekutu utama kita, KLK telah mencatatkan keuntungan sebelum cukai sebanyak RM596.3 juta bagi tahun tinjauan, naik sedikit dari keuntungan yang dicatat semula RM585.8 juta tahun lepas. Penyataan semula keputusan tahun lalu adalah disebabkan oleh penggunaan awal Piawaian Perakaunan yang disemak semula (FRS 121). Bahagian keuntungan Syarikat kita dalam keuntungan KLK adalah RM275.2 juta, menunjukkan sedikit peningkatan dari RM268.3 juta yang dicapai tahun lepas. Dengan meningkatnya harga getah dan minyak sawit, keuntungan perladangan KLK telah mencatat rekod keuntungan RM469.9 juta, 10% lebih tinggi dari RM426.7 juta yang dicapai tahun lalu. Dengan kenaikan mendadak harga getah, ladang matang kepunyaan KLK seluas 16,259 hektar adalah merupakan penyumbang utama dengan sumbangan sebanyak RM111 juta keuntungan sebelum perbelanjaan penanaman semula, atau peningkatan sebanyak RM44 juta. Di antara syarikat-syarikat perladangan, KLK merupakan salah satu syarikat yang mempunyai baki keluasan ladang getah yang terbesar. Purata harga minyak sawit mentah adalah RM10/tan lebih tinggi pada RM1,401/tan selepas dikilang tetapi harga isirong sawit menurun sebanyak RM114/tan yang mengakibatkan harga jualan susut sehingga RM872/tan. Walaupun pengeluaran buah tandan basah meningkat sebanyak 7.6% kepada 2.4 juta tan, sektor kelapa sawit kurang memberi sumbangan dari segi keuntungan. Cuaca yang kerap hujan telah menyebabkan pengurangan dalam kadar penyarian kepada 20.5%. Dengan sumbangan cukup memberangsangkan dari hasil getah, ladang-ladang dari Semenanjung telah mengambilalih kedudukan ladang-ladang dari Sabah sebagai penyumbang utama keuntungan KLK. Manakala sumbangan dari ladang-ladang di Indonesia pula telah menunjukkan peningkatan berikutan dengan bertambahnya kawasan matang yang sekaligus menurunkan purata kos pengeluaran. Secara keseluruhan, nisbah pohon matang kelapa sawit masih di tahap rendah pada kadar 29.6% dari jumlah hektar kawasan tanaman kumpulan KLK. Nisbah ini akan bertambah apabila kawasan tanaman baru menjadi matang dalam masa beberapa tahun lagi. Keuntungan dari sektor pengilangan KLK menjunam kepada RM19.3 juta disebabkan oleh beberapa faktor. Persaingan yang cukup sengit dalam sektor oleokimia berpunca dari peningkatan kapasiti pengeluaran dalam industri. Kilang oleokimia syarikat subsidiari KLK di China telah mengalami kerugian pada peringkat awal operasinya memandangkan ianya perlu membangunkan satu asas pelanggan yang kukuh di sana. Satu lagi subsidiari yang terlibat dengan pengekstrakan nutrien nilai tambah dari minyak sawit turut mengalami kerugian. Manakala operasi sarung tangan getah yang mengalami kerugian kini telah ditutup mengakibatkan beberapa aset dan stok perlu dihapuskira. Sementara itu, pada awal tahun depan, kilang pati alkohol KLK yang terletak di Pelabuhan Kelang akan bermula operasi dan ini akan membawa Kumpulan KLK lebih berdaya saing ke arah penambahan nilai produk-produknya dalam hiliran sektor industri oleokimia. Keuntungan dari sektor hartanah telah meningkat berikutan beberapa projek di Desa Coalfields telah siap dibina. 13

16 Ulasan Pengerusi (Sambungan) OPERASI INDUSTRI Secara keseluruhannya, subsidiari-subsidiari dalam industri kimia menyumbangkan keuntungan sebelum cukai sebanyak RM32.0 juta, sedikit peningkatan berbanding RM30.2 juta yang dicapai tahun lepas. Kos tenaga dan bahan api yang telah meningkat telah membawa kesan negatif ke atas margin-margin keuntungan operasi manakala kos beberapa bahan mentah turut kekal tinggi. Kumpulan Malay-Sino Chemical Industries melaporkan peningkatan keuntungan sebanyak 10% disebabkan peningkatan dalam kecekapan penggunaan loji Lahat dan harga-harga produk yang stabil. Loji Kemaman kami terus beroperasi secara memuaskan. Subsidiari yang mengeluarkan klorida methil telah berjaya menghasilkan jualan eksport baru untuk mengimbangi permintaan domestik yang lembab dan kurang giat. Sebaliknya, See Sen Chemical Berhad melaporkan keuntungan yang lebih rendah disebabkan penurunan harga produk dalam pertengahan kedua tahun tinjauan. Dalam keadaan harga dunia logam yang tinggi, aktiviti pengilangan pesat yang dijalankan oleh pelebur-pelebur logam telah menjanakan pengeluaran asid sulfurik secara besar-besaran sebagai produk sampingan. Asid sulfurik yang sedemikian apabila diimport masuk ke dalam negara telah mengakibatkan harga domestik produk tersebut mengalami tekanan dan turun. Pada masa yang sama, jualan serbuk sulfur telah meningkat sejajar dengan penerimaan pelanggan yang semakin meluas dan perkembangan aliran jualan baru. Subsidiari-subsidiari pengangkutan kita, walaupun menghadapi kos bahan api yang lebih tinggi, berjaya meningkatkan pendapatan dan sumbangan keuntungan mereka secara keseluruhannya. Ini adalah disebabkan peningkatan dalam permintaan untuk perkhidmatan mereka. Semenjak beberapa tahun kebelakangan, jumlah perjalanan penghantaran dan kenderaan yang dimiliki telah meningkat dari tahun ke tahun. PELABURAN Dalam tahun tinjauan, Syarikat kita menerima pendapatan dividen yang cukup baik daripada pegangan saham 15% dalam Bard Sdn Bhd, pengeluar saluran getah katheter. Pendapatan ini bersama pemulangan semula modal atas pelaburan dahulu daripada pembubaran syarikat pembrokeran saham serta keuntungan modal daripada pelupusan pelaburan dalam sebuah syarikat luar negeri, sepertimana yang dinyatakan tahun lepas, telah membawa kepada peningkatan mendadak dalam pendapatan pelaburan syarikat dalam lingkungan RM48.1 juta dalam tahun tinjauan. Cadangan untuk membeli suatu kepentingan ekuiti 75% dalam PT Satu Sembilan Delapan, sebuah syarikat Indonesia yang sedang memohon geran tanah untuk 20,000 hektar tanah di Kalimantan Timur, yang diumumkan suatu ketika dahulu, masih belum dapat disempurnakan. Namun demikian, perundingan masih berjalan untuk meningkatkan tahap pelaburan dalam syarikat ini tetapi asas perundingan kini adalah berdasarkan keluasan tanah yang lebih kecil setelah mengetepikan kawasan berbukit. Pada masa yang sama, satu tapak semaian anak pokok kelapa sawit telah didirikan dan pembersihan hutan sedang dijalankan. BANGUNAN PEJABAT KOMERSIL Kerja-kerja pembinaan tingkat-tingkat bawah tanah dan tingkat bawah bangunan komersil 11 tingkat di Mutiara Damansara, Selangor sedang dijalankan walaupun mengalami penangguhan. Setelah kerja-kerja tersebut siap, pembinaan struktur utama bangunan akan dimulakan. Adalah dijangkakan bahawa bangunan ini akan siap dibina pada akhir tahun

17 Ulasan Pengerusi (Sambungan) UMUM Berdasarkan ramalan terkini, harga minyak kelapa sawit dan getah akan terus positif dan menggalakkan. Harga minyak kelapa sawit pula akan kekal tinggi ekoran dari perkembangan positif dalam sektor bio-diesel. Maka, prospek syarikat kita dalam tahun kewangan baru adalah dijangka terus memberangsangkan. Bagi pihak anda sekalian, saya merakamkan ucapan ribuan terima kasih kepada ahli-ahli Lembaga Pengarah serta kakitangan Kumpulan atas sumbangan mereka sepanjang tahun tinjauan. Dato Seri Lee Oi Hian Pengerusi 29 November

18 Statement of Corporate Governance The Board of Batu Kawan Berhad ( BKB ) is pleased to report to shareholders on the manner the Group has applied the principles, and the extent of compliance with the Best Practices of good governance as set out in Part 1 and Part 2 respectively of the Malaysian Code on Corporate Governance ( the Code ) pursuant to Paragraph of the Listing Requirements of Bursa Malaysia Securities Berhad ( the Listing Requirements ). These principles and best practices have been applied throughout the financial year ended 30 September THE BOARD OF DIRECTORS The Board has the overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and business of the Company. The Board meets at least four (4) times a year, with additional meetings convened as necessary. During the financial year ended 30 September 2006, four (4) Board meetings were held and all Directors in office attended 100% of the meetings. Details on the attendance of the Directors at Board meetings can be found in their respective profiles set out on pages 8 to 10. BOARD BALANCE The Board currently has eight (8) members, comprising seven (7) Non-Executive Directors (including the Chairman) and one (1) Executive Director, with four (4) of the eight (8) Directors being Independent Directors. Together, the Directors have a wide range of business, financial and technical experience. This mix of skills and experience is vital for the successful direction of the Group. A brief profile of each Director is presented on pages 8 to 10. The respective roles of the Chairman and the Managing Director are clearly defined, so as to ensure that there is a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct, whilst the Managing Director has overall responsibility for the operating units, organisational effectiveness and implementation of Board policies and decisions. The presence of four (4) Independent Non-Executive Directors fulfils a pivotal role in corporate accountability. Although all the Directors have an equal responsibility for the Group s operations, the role of these Independent Non-Executive Directors is particularly important as they provide unbiased and independent views, advice and judgement. SUPPLY OF INFORMATION All Directors are provided with an agenda and a set of Board papers prior to Board Meetings. They are issued in sufficient time to enable the Directors to obtain further explanation/clarification, where necessary, in order to be properly briefed before the meeting. The Board papers include, among others, the following:- (i) quarterly financial report and a report on the Group s cash and borrowings position; (ii) a current review of the operations of the Group; and (iii) minutes of meetings of all Board Committees. Directors may obtain independent professional advice in furtherance of their duties. All Directors have access to the advice and services of the Company Secretaries. AUDIT COMMITTEE The Audit Committee reviews issues of accounting policies and presentation for external financial reporting, monitors the work of the internal audit function and ensures an objective and professional relationship is maintained with the external auditors. The Audit Committee has full access to the auditors both internally and externally who, in turn, have access at all times to the Chairman of the Audit Committee. The report of the Audit Committee may be found on pages 27 to 29. NOMINATION COMMITTEE The Nomination Committee currently consists of two Independent Non-Executive Directors and one Non-Independent Non- Executive Director as follows:- Independent Non-Executive Tan Sri Dato Thong Yaw Hong (Chairman) YM Tengku Robert Hamzah Non-Independent Non-Executive Dato Lee Soon Hian 16

19 Statement of Corporate Governance (Continued) The Committee is authorised to propose new nominees to the Board and to assess the contribution of each individual Director and overall effectiveness of the Board on an on-going basis. The actual decision as to who shall be appointed a Director remains the responsibility of the full Board after considering the recommendations of the Committee. As an integral element of the process of appointing new Directors, the Committee provides an orientation and education programme for new recruits to the Board. REMUNERATION COMMITTEE The Remuneration Committee consists of two Independent Non-Executive Directors and one Non-Independent Non-Executive Director with R.M. Alias as Chairman. The Committee is responsible for setting the policy framework and for making recommendations to the Board on remuneration and other terms of employment for the Board and senior employees. The members of the Remuneration Committee are as follows:- Independent Non-Executive R.M. Alias (Chairman) Tan Sri Dato Thong Yaw Hong Non-Independent Non-Executive Dato Mustafa bin Mohd Ali The aggregate Directors remuneration paid or payable or otherwise made to all Directors of the Company who served during the financial year are as follows:- Category Fees Salaries Incentive Other Emoluments (RM 000) (RM 000) (RM 000) (RM 000) 1 Executive Director Non-Executive Directors The number of Directors whose total remuneration falls within the following bands is as follows:- Range of Remuneration Executive Director Non-Executive Directors RM60,001 to RM100,000-7 RM1,000,001 to RM1,200, The Board has considered disclosure details of the remuneration of each Director. The Board is of the view that the transparency and accountability aspects of corporate governance as applicable to Directors Remuneration are appropriately served by the range disclosure as required by the Listing Requirements. RE-ELECTION OF THE DIRECTORS In accordance with the Company s Articles of Association, all Directors who are appointed by the Board are subject to re-election by shareholders at the next Annual General Meeting immediately after their appointment. In accordance with the Articles, one-third of the remaining Directors, including the Managing Director, is required to submit themselves for re-election by rotation at each Annual General Meeting. Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act,