ANNUAL REPORT ANNUAL REPORT 2016

Transcription

1 TURIYA BERHAD (55576-A) Suite 7.3, 7th Floor, Wisma Chase Perdana, Changkat Semantan Damansara Heights, Kuala Lumpur, Malaysia Tel: Fax: Website: TURIYA BERHAD (55576-A) ANNUAL REPORT 2016 ANNUAL REPORT A

2 Contents Corporate Profile Corporate Structure Five-Year Financial Highlights Chairman s Statement Corporate Information Directors Profile Audit Committee Report Statement on Corporate Governance Statement on Directors Responsibility Statement on Risk Management and Internal Control Financial Statements List of Properties Location of Operations Analysis of Shareholdings Other Information Notice of the Annual General Meeting Statement Accompanying Notice of Annual General Meeting Proxy Form

3 2 TURIYA berhad (55576-A) Annual Report 2016 corporate profile Wisma Chase Perdana TURIYA BERHAD ( Turiya and/or the Company ) ( has a history that dates back to 1961 when it was established as a private limited company known as Sitt Tatt Sdn Bhd. After more than 20 years of growth and expansion, TURIYA was listed on the Main Board of Bursa Malaysia Securities Berhad on 19 October As at 31 March 2016, TURIYA has an authorized share capital of RM500 million and an issued and paid up capital of RM228.7 million. From its beginning as a company dealing in commodities, building materials, engine lubricants and forwarding services, TURIYA started its growth strategy by expanding into industrial gases in 1974 via a joint venture with Air Products & Chemicals, Inc USA (which was subsequently disposed off in January 2007). Thereafter, the Company ventured into industrial chemicals, label printing and welding electrodes. In 2003, TURIYA diversified its business further into the semiconductor plating services, specialty chemical manufacturing for electroplating process and production of electroplating equipments through the acquisition of three Singapore companies, namely Pyramid Manufacturing Industries Pte Ltd ( Pyramid ), CEM Machinery Pte Ltd (which was disposed on 1 October 2014) and PMI Plating Services Pte Ltd (which was dissolved on 10 March 2011).

4 TURIYA berhad (55576-A) Annual Report corporate profile (cont d) Factory/Corporate Office of Wuxi CEM Electronics Equipment Co., Ltd, P.R. China Factory of Pyramid Manufacturing Industries Pte. Ltd. Pyramid ( is principally involved in the manufacturing, distribution, research and development of specialty chemical products for the electroplating processes in the semiconductor industry. These products have wide applications in the semiconductor and electroplating industry whilst Pyramid s propriety electroplating process serves many leading customers in the semiconductor, electronics and automotive sectors. Pyramid is continuously exploring its Research and Development activities in the semiconductor chemical solutions and offers various solutions for specific customer requests. While electroplating remains as its core business, Pyramid is continues to serve both in upstream and downstream activities as well as other industries where it shares common applications. Pyramid s capability in formulating the chemistry according to customer requirements is one of its key competencies. In 2005, CEM s wholly owned subsidiary, Wuxi CEM Electronics Equipment Co. Ltd., commenced its operations to serve a niche semiconductor market in China. It has discontinued its operations since end of March Due to the cyclical nature and uncertainty in the semiconductor business, the Company diversified its earnings base into property investment. In 2009, the Company completed its acquisition of Wisma Chase Perdana (WCP). WCP is an office building strategically located in Damansara Heights, Kuala Lumpur with total nett lettable area of 245,238 square feet. It is also in the proximity of the new Pusat Bandar Damansara MRT station which is nearing completion. This building provides the Company a long term sustainable rental income. In addition, this investment has resulted in capital appreciation of the property. Moving forward, TURIYA will seek to diversify its business into other profitable growth sectors. This will provide the Company with a sound base to generate a robust yet sustainable earnings in the future.

5 4 TURIYA berhad (55576-A) Annual Report 2016 corporate structure

6 TURIYA berhad (55576-A) Annual Report five-year financial highlights Financial Year Ended 31 March # # (RM 000) Turnover Continuing operations 21,773 26,819 32,219 34,784 35,983 Discontinued operations Profit/(Loss) for the financial year attributable to: Equity holders of the Company 1,914 1,230 (27,087) (15,567) (20,431) Minority interest (69) (316) (1,120) (686) 51 Paid-up Capital 228, , , , ,728 Total Tangible Assets 179, , , , ,733 Shareholders Fund 128, , , , ,119 Earnings/(Loss) Per Share (sen) (11.84) (6.81) (8.93) Net Assets Per Ordinary Share Attributable to Equity Holders of The Company (sen) Net Tangible Assets Per Share (sen) Note: # As restated.

7 6 TURIYA berhad (55576-A) Annual Report 2016 five-year financial highlights (cont d)

8 TURIYA berhad (55576-A) Annual Report Chairman s statement On behalf of the Board of Directors, I present the Annual Report together with the Audited Financial Statements of Turiya Berhad ( Turiya or the Company ) and its Group of Companies for the financial year ended 31 March BUSINESS OVERVIEW The year commenced with a fair amount of global economic recovery. However many events thereafter including the decision by Britain to exit the European Union added some uncertainties to the existing challenges. Along with this, the economy in China took a dip. In June 2016, the World Semiconductor Trade Statistics forecast a slight growth of 2% year-on-year for both 2017 and The Klang Valley office market is expected to remain subdued during this year and in Existing office buildings have to put more effort to initiate asset enhancement through refurbishment, conversion or redevelopment to optimise the returns. Taking the advice of property agents and consultants, Turiya has proposed several upgrading works in Wisma Chase Perdana. The Company intends to replace all the air-conditioning units with more reliable and energy efficient units; refurbish the food court on level 3 as well as to consider a complete upgrade of all common areas in the building in phase one. The second phase of upgrading works would involve the façade of the building. All these will enhance the building s value and help to increase the occupancy. In addition to the upgrading works, the Group is also embarking on restructuring and re-organising its operations with the aim to significantly improve operational efficiencies.

9 8 TURIYA berhad (55576-A) Annual Report 2016 chairman s statement (cont d) FINANCIAL OVERVIEW Changes rm Million RM Million % Total Revenue (5.05) Profit/(Loss) for the Financial Year The Group recorded a revenue of RM21.77 million for the financial year ended 31 March 2016 as compared to RM26.82 million in the preceding financial year. This represents a decline of RM5.05 million or 18.83% which was mainly due to cessation of management fees and revenue from its loss making subsidiary in China and non-renewal of tenancies. However, despite the lower revenue, the group recorded a profit of RM1.85 million for the financial year, which was higher than the profit of RM0.91 million reported in the preceding financial year. DIVIDEND The Board of Directors does not recommend any dividend for the current financial year. SIGNIFICANT CORPORATE EXERCISES The following significant corporate exercises and events took place during the financial year: (i) On 30 May 2016, Turiya had announced that Turiya Technologies (Malaysia) Sdn Bhd, a wholly-owned subsidiary of Turiya has commenced members voluntary windingup pursuant to Section 254(1)(b) of the Companies Act, FUTURE PROSPECTS The management will continue its efforts on improving operational efficiency and effective cost management to maintain the Group s competitive edge in the semiconductor industry and property business. With the completion of the Mass Rapid Transit (MRT) s Damansara Heights station, the marketability of Wisma Chase Perdana is expected to improve significantly next year. The Group will continue to seek alternative sources of revenue streams.

10 TURIYA berhad (55576-A) Annual Report chairman s statement (cont d) CORPORATE SOCIAL RESPONSIBILITY Through its Corporate social responsibility programme, the Group endeavours to reach out to the underprivileged society by way of contributions through non-profit organizations. The Group also continues to demonstrate and emphasise on environmental conservation, improving air quality and reducing waste in its business. CORPORATE GOVERNANCE In line with good corporate governance principles and practices, the Board of Directors will continue to enhance its role in the company by upholding business accountability, transparency and responsibility to safeguard the interest of all the investors and preserve shareholders value. ACKNOWLEDGEMENTS On behalf of the Board of Directors, I wish to acknowledge the resignation of Mr. Ravindra Anant Khot from the Board during the year and wish to express our thanks for his contribution to the Group during his tenure as Independent Non-Executive Director. I wish to welcome Dato Mohamed Nazir Bin Nor Md who was appointed as the Group Managing Director and Mr. Abdulla Abdulaziz Ali Taleb as Independent Non-Executive Director to the Board and look forward to their contribution to the Group. On behalf of the Board of Directors, I take this opportunity to record my appreciation and gratitude to the regulatory bodies, our valued customers, suppliers, bankers, business associates and especially our shareholders for their continued support and confidence in the Group. I would also like to express my sincere appreciation to my fellow colleagues on the Board and the staff for their dedication to the Group. TAN SRI DATUK DR. MOHAN SWAMI, J.P. Executive Chairman

11 10 TURIYA berhad (55576-A) Annual Report 2016 corporate information BOARD OF DIRECTORS Executive Chairman Tan Sri Datuk Dr. Mohan Swami, J.P. Managing Director Dato Mohamed Nazir Bin Nor Md (Appointed on 26 August 2015) Independent Non-Executive Directors Mr. Jayapalasingam Kandiah Mr. Khaled Yusuf Abdulla AbdulKarim Janahi Mr. Ravindra Anant Khot (Resigned on 16 March 2016) Mr. Abdulla Abdulaziz Ali Taleb (Appointed on 24 May 2016) Non-Independent Non-Executive Director Ms. Usha Nathan A. Vaidyanathan EXECUTIVE COMMITTEE Committee Members Tan Sri Datuk Dr. Mohan Swami, J.P. (Chairman) Dato Mohamed Nazir Bin Nor Md AUDIT COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Ms. Usha Nathan A. Vaidyanathan Mr. Ravindra Anant Khot (Resigned on 16 March 2016) Mr. Abdulla Abdulaziz Ali Taleb (Appointed on 24 May 2016) NOMINATION COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Ms. Usha Nathan A. Vaidyanathan Mr. Ravindra Anant Khot (Resigned on 16 March 2016) Mr. Abdulla Abdulaziz Ali Taleb (Appointed on 24 May 2016) REMUNERATION COMMITTEE Committee Members Tan Sri Datuk Dr. Mohan Swami, J.P. (Chairman) Mr. Jayapalasingam Kandiah Mr. Ravindra Anant Khot (Resigned on 16 March 2016) INVESTMENT COMMITTEE Committee Members Dato Mohamed Nazir Bin Nor Md (Chairman) Tan Sri Datuk Dr. Mohan Swami, J.P. Mr. Jayapalasingam Kandiah RISK MANAGEMENT COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Dato Mohamed Nazir Bin Nor Md COMPANY SECRETARY Ms. Wong Youn Kim (MAICSA ) AUDITORS Baker Tilly AC (AF ) Chartered Accountants Baker Tilly MH Tower Level 10, Tower 1, Avenue 5 Bangsar South City Kuala Lumpur Telephone : Facsimile : REGISTERED OFFICE Suite 7.3, 7th Floor Wisma Chase Perdana Changkat Semantan Damansara Heights Kuala Lumpur Telephone : Facsimile : PRINCIPAL PLACE OF BUSINESSES Malaysia Turiya Berhad Suite 7.3, 7th Floor Wisma Chase Perdana Changkat Semantan Damansara Heights Kuala Lumpur Telephone : Facsimile : Singapore Turiya Technologies Pte. Ltd. No. 87, Tuas Avenue 1 Singapore Telephone : Facsimile : / U.S.A. Amcare Labs International Inc. U. Amcare Labs International c/o BusinessSuites Harborplace 111 S. Calvert St. Suite 2700 Box 672, Baltimore, MD Telephone : Facsimile : SHARE REGISTRAR Symphony Share Registrars Sdn. Bhd. Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Darul Ehsan Telephone : Facsimile : /52 PRINCIPAL BANKERS CIMB Bank Berhad Bank Kerjasama Rakyat Malaysia Berhad United Overseas Bank Ltd., Singapore DBS Bank Ltd., Singapore STOCK EXCHANGE LISTING Listed on the Main Board of Bursa Malaysia Securities Berhad on 19 October Sector : Industrial Products Stock name : Turiya Stock code : 4359

12 TURIYA berhad (55576-A) Annual Report Directors profile TAN SRI DATUK DR. MOHAN SWAMI, J.P. Executive Chairman Tan Sri Datuk Dr. Mohan Swami, J.P., a Malaysian, aged 65, was appointed to the Board of Turiya Berhad ( Turiya ) on 23 November He was subsequently appointed the Executive Deputy Chairman of Turiya on 2 April There were several re-designations until 25 August 2008 when he was appointed as the Executive Chairman till to-date. He is also the Chairman of the Executive Committee and Remuneration Committee and a member of the Investment Committee of Turiya. Tan Sri Datuk Dr. Mohan Swami graduated in Medicine from Mysore University (India) and commenced his career in 1978 in Sabah, Malaysia. He became the Assistant Director of Medical Services in 1980 and later went on to establish the largest private group medical practice in Sabah. Between 1996 and 2000, Tan Sri Datuk Dr. Mohan Swami was actively involved in International Conferences and was a member of many overseas business delegations led by various government leaders and the Prime Minister of Malaysia. He headed the Business Delegation of the G15 Conference in Harare, Zimbabwe in November He was appointed as the Honorary Consul for the Republic of Botswana in Malaysia in 1999, a position he holds till todate. He was also a member of the National Economic Consultative Council II (MAPEN II). In 2011 Perdana University, a Public Private Partnership project was established through Academic Medical Centre Sdn Bhd and he serves as the Chairman of the Board of Governors. Tan Sri Datuk Dr. Mohan Swami was awarded the BrandLaureate, (the Brand Icon Leadership Award) in 2011 and is recognised as one of Malaysia s leading philanthropist (Forbes Asia, July 2012). In April 2013, he was appointed as the Chancellor of the Swami Rama Himalayan University in India. He is also on the Board of Epsom Properties Ltd (India), a company listed on the Bombay Stock Exchange and Chennai Stock Exchange. He is deemed a major shareholder of the Company by virtue of his 100% equity interest held in Empire Holdings Ltd. He does not have any family relationship with any other director and/or major shareholder of the Company nor does he has any conflict of interest with the Company. Tan Sri Datuk Dr. Mohan Swami has not been convicted for any offence within the past 10 years.

13 12 TURIYA berhad (55576-A) Annual Report 2016 directors profile (cont d) DATO MOHAMED NAZIR BIN NOR MD Managing Director Dato Mohamed Nazir Bin Nor Md, a Malaysian, aged 39, was appointed to the Board of Turiya on 26 August 2015 as Managing Director. He is the Chairman of Investment Committee and also a member of the Executive Committee and Risk Management Committee of the Company. He was a corporate and investment banker for 6 years, having served in Public Bank and CIMB Bank (both Bumiputra-Commerce Bank and CIMB Investment Bank) before joining Sime Darby Berhad. In 2012, Dato Nazir was appointed as a Deputy General Manager in Johor Corporation and subsequently moved to Inai Kiara, where he served as the Chief Executive Officer of the investment holding Company of Inai Kiara Group for a period of 3 years. Dato Nazir is familiar with both banking and corporate sectors, specialising in refinancing, restructuring and corporate exercises. Currently, he is the Group Managing Director of Chase Perdana Sdn Bhd. Dato Nazir also serves as a Director in his private company Fawster Motorsports Sdn Bhd, an automobile workshop based in Sunway, Selangor. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

14 TURIYA berhad (55576-A) Annual Report directors profile (cont d) JAYAPALASINGAM KANDIAH Independent Non-Executive Director Mr. Jayapalasingam Kandiah, a Malaysian, aged 68, was appointed to the Board of Turiya as an Independent Non-Executive Director on 24 November He is a member of the Nomination Committee and Risk Management Committee of the Company. On 20 February 2013, he was re-designated as the Non-Independent Non-Executive Director of Turiya. He was re-designated to the Board of Turiya as an Independent Non-Executive Director on 19 May He is the Chairman of the Audit Committee, Nomination Committee and Risk Management Committee and also a member of the Remuneration Committee and Investment Committee of the Company. Mr. Jayapalasingam is a member of the Malaysian Institute of Certified Public Accountants, Malaysian Institute of Accountants and holds a Bachelor of Law Degree from University of London and possesses the Certificate of Legal Practice. He has been in practice as a Chartered Accountant since 1975 and is currently a partner in Noordin Jaafar Chartered Accountants, member firm of Nexia International. He is currently the review partner overseeing transaction services including insolvencies, mergers and restructuring. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

15 14 TURIYA berhad (55576-A) Annual Report 2016 directors profile (cont d) KHALED YUSUF ABDULLA ABDULKARIM JANAHI Independent Non-Executive Director Mr. Khaled Yusuf Abdulla Abdulkarim Janahi, a Bahraini, aged 58, was appointed to the Board of Turiya Berhad as Independent Non-Executive Director on 27 June He holds a Bachelor of Science degree in Computer Science and Accountancy from the University of Manchester, UK and a Fellow of the Institute of Chartered Accountants in England and Wales. He has more than 27 years of working experience in banking sector. Currently he is the Group Chief Executive of Dar Al-Maal Al-Islami Trust (DMI Trust, Chairman of Faisal Private Bank (Switzerland, DMI Administrative Services, Islamic Investment Company of the Gulf (Bahamas) Ltd., Solidarity Group, Naseej and Ithmaar Development Company, Bahrain. He is also the Chairman of the Executive Committee and member of the Board of Saudi Takaful Company, Saudi Arabia. Also a member of the Board of Ithmaar Bank B.S.C.,Bahrain, Faisal Islamic Bank of Egypt and Centre for International Business and Management (CIBAM) at the University of Cambridge. He serves as Director of Ithmaar Bank B.S.C., Bahrain. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

16 TURIYA berhad (55576-A) Annual Report directors profile (cont d) ABDULLA ABDULAZIZ ALI TALEB Independent Non-Executive Director Mr. Abdulla Abdulaziz Ali Taleb, a Bahraini, aged 37, was appointed to the Board of Turiya Berhad as Independent Non-Executive Director on 24 May He has more than 15 year experience in banking and currently he is heading Commercial and Financial Institutions Department of Ithmaar Bank Bahrain. Besides that Mr. Taleb has strong work experience in a number of banking functions including Islamic financial services, corporate banking, capital markets and credits. Prior to joining Ithmaar Bank he held senior positions in various banks and financial institutions including BMI Bank, First Investment Bank, Shamil Bank and Khaleej Finance & Investments. Mr. Taleb has a Bachelor Degree in Banking Finance from Kingdom University and Associate Diploma in Economics Banking and Finance from University of Bahrain. He also holds Advanced Diploma in Islamic Banking from Bahrain Institute of Banking and Finance. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

17 16 TURIYA berhad (55576-A) Annual Report 2016 directors profile (cont d) USHA NATHAN A. VAIDYANATHAN Non-Independent Non-Executive Director Ms. Usha Nathan, a Malaysian, aged 46, was appointed to the Board of Turiya on 1 March 1999 as an Alternate Director and subsequently appointed as Non-Executive Director of the Company on 16 January Thereafter on 13 July 2005, she was re-designated as an Independent Non-Executive Director of Turiya. On 10 July 2014, she was re-designated as Non-Independent Non-Executive Director of Turiya. She is the member of the Audit Committee and Nomination Committee of the Company. She holds a Bachelors Degree in Business Administration from the International Islamic University, Malaysia. She joined Chase Perdana Sdn Bhd ( CPSB ), a sister company of Turiya on 1 September 1994 in the Corporate Affairs & Business Development Department. Prior to joining CPSB, she was attached to a pharmaceutical multinational company in the Product Development Department. She is currently also a Non-Executive Director of Epsom Properties Limited, a company listed on Bombay Stock Exchange and Chennai Stock Exchange. She does not have any family relationship with any other director and/or any major shareholder of the Company nor does she has any conflict of interest with the Company. She has not been convicted for any offence within the past 10 years.

18 TURIYA berhad (55576-A) Annual Report audit committee report COMPOSITION Chairman Mr. Jayapalasingam Kandiah Independent Non-Executive Director Committee Members Hj. Jalalullail Bin Osman Independent Non-Executive Director (Retired on 26 August 2015) Ms. Usha Nathan A. Vaidyanathan Non-Independent Non-Executive Director Mr. Ravindra Anant Khot Independent Non-Executive Director (Resigned on 16 March 2016) Mr. Abdulla Abdulaziz Ali Taleb Independent Non-Executive Director (Appointed on 24 May 2016) TERMS OF REFERENCE Objectives The principal objective of the Audit Committee (or the Committee ) is to assist the Board of Directors in the effective discharge of its responsibilities for corporate governance, financial reporting to shareholders and the public and to monitor the system of internal controls of the Company. Other objectives of the Audit Committee are to: (a) provide greater emphasis on the audit function by increasing the objectivity and independence of the External and Internal Auditors and providing a forum for discussion that is independent of the Management; (b) maintain through regularly scheduled meetings a direct line of communication between the Board and the External Auditors, Internal Auditors and financial management; and (c) strengthen the role of Non-Executive Directors by improving their knowledge and understanding of the Company s operation. The Audit Committee will endeavor to adopt certain practices aimed at maintaining appropriate standards of responsibilities, integrity and accountability to all the Company s shareholders.

19 18 TURIYA berhad (55576-A) Annual Report 2016 audit committee report (cont d) MEMBERSHIP The Audit Committee shall be appointed by the Directors among their number (pursuant to a resolution of the Board of Directors) which fulfils the following requirements: (a) the Audit Committee must be composed of no fewer than three (3) members, where the majority of them should not be: Executive Directors of the Company or any related corporation; or Any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the functions of the Audit Committee. (b) all the committees members must be Non-Executive Directors, with majority of them being Independent Directors; and (c) at least one (1) member of the Audit Committee: must be a member of the Malaysian Institute of Accountants (MIA); or if he is not a member of MIA, he must has at least three (3) years working experience; and he must has passed the examination specified in Part 1 of the 1st Schedule of the Accountant Act, 1967; or he must be a member of one of the association of accountants specified in Part II of the 1st Schedule of the Accountant Act, No Alternate Director is appointed as a member of the Audit Committee. The members of the Audit Committee shall elect a Chairman from among their number who shall be an Independent Director. In the event of any vacancy in the Audit Committee resulting in the non-compliance of items (a) to (c) above, the vacancy must be filled within three (3) months of that event. The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with the Terms of Reference. FUNCTIONS OF THE AUDIT COMMITTEE The functions of the Audit Committee are as follows: (a) review the following and report the same to the Board of Directors: with the External Auditors, the Audit Plan; with the External Auditors, their evaluation of the system of internal controls; with the External Auditors, their Audit Report; the assistance given by the Company s employees to the External Auditors; and

20 TURIYA berhad (55576-A) Annual Report audit committee report (cont d) FUNCTIONS OF THE AUDIT COMMITTEE (cont d) any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of Management integrity; (b) to consider the appointment of External Auditors, the audit fee and any questions of resignation or dismissal; (c) to discuss with External Auditors before the audit commences, the nature and scope of the audit, and ensure coordination where more than one audit firm is involved; (d) to review the quarterly and year-end financial statements of the Company, focusing particularly on: any changes in accounting policies and practices; significant adjustments arising from the audit; review the reasons for the major fluctuations in financial statement balances for the current year compared to prior years; review for any unusual circumstances or situations reflected in the financial statements, including identifying any marginal operations; review the nature of any unusual or significant commitments or contingent liabilities; review of any significant differences between the Annual Report and other reports, such as reports to the regulatory agencies; review for any significant differences in format or disclosure from industry norms; the going concern assumption; and compliance with accounting standards and other legal requirements; (e) to review the External Auditors Management Letter and Management s response; (f) to consider the major findings of internal investigations and Management s response; and (g) to do the following where an internal audit function exists: review the adequacy of the scope, functions, competency and resources of the internal audit functions, and necessary authority to carry out its work; review the internal audit programme and the results of the internal audit process and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function; monitor the implementation of the audit recommendations to ensure that all the key risks and controls have been addressed; review the outsourced internal Audit Department s audit methodology in assessing and rating risks of auditable areas and to ensure that all high and critical risk areas are audited annually; and being informed of resignations of staff members and provide them the opportunity to submit reasons for resigning.

21 20 TURIYA berhad (55576-A) Annual Report 2016 audit committee report (cont d) RIGHTS OF THE AUDIT COMMITTEE The Audit Committee shall, wherever necessary and reasonable for the Company to perform its duties, in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company: (a) have authority to investigate any matter within its Terms of Reference; (b) have the resources which are required to perform its duties; (c) have full and unrestricted access to any information pertaining to the Company; (d) have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity (if any); (e) be able to obtain independent professional or other advice; (f) be able to convene meetings with External Auditors, the Internal Auditors or both excluding the attendance of other directors and employees of the listed issuer whenever deemed necessary; (g) review the Company s business ethics code, the method of monitoring compliance with the code and the disposition of reported exceptions; and (h) review policies to avoid conflicts of interest and review past or proposed transactions between the Company and members of Management. INTERNAL AUDIT FUNCTION (a) Company must establish an internal audit function which is independent of the activities it audits. (b) Company must ensure its internal audit functions reports directly to the Audit Committee. The costs incurred in discharging the internal audit function for the financial year ended 31 March 2016 amounted to RM38, MEETINGS AND MINUTES The Committee shall meet as frequently as the Chairman shall decide in order to discharge its duties but not less than four (4) times a year. In addition, the Chairman is required to call for a meeting of the Committee if requested to do so by any Committee members; any Executive Director, or the Internal or External Auditors. Two (2) members of the Audit Committee shall constitute a quorum, of whom the majority are Independent Directors. The Company Secretary shall serve as the Secretary of the Committee. The Secretary shall be responsible for keeping the minutes of meetings of the Committee, circulating them to the Committee members and other members of the Board of Directors and for following up outstanding matters.

22 TURIYA berhad (55576-A) Annual Report audit committee report (cont d) MEETINGS AND MINUTES (cont d) By invitation of the Audit Committee, the Directors and/or employees of the Company are required to attend any particular Audit Committee meeting specific to relevant issues. Representatives of the External Auditors are to be in attendance at meetings where matters relating to the audit of the statutory accounts and/or the External Auditors are to be discussed. The Senior Management and/or other appropriate officers may be invited to attend, except for those portions of the meetings where their presence is considered inappropriate, as determined by the Committee Chairman. AUDIT COMMITTEE MEETINGS There were five (5) Audit Committee meetings held during the financial year ended 31 March 2016 and the details of attendance are as set out below: Audit Committee Member Designation in the Company Attendance Mr. Jayapalasingam Kandiah Independent Non-Executive Director 5/5 Ms. Usha Nathan Non-Independent Non-Executive Director 5/5 A. Vaidyanathan Hj. Jalalullail Bin Othman Independent Non-Executive Director Osman (Retired on 26 August 2015) Mr. Ravindra Anant Khot Independent Non-Executive Director 2/5 (Resigned on 16 March 2016)

23 22 TURIYA berhad (55576-A) Annual Report 2016 audit committee report (cont d) SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE During the financial year, the main activities of the Committee included reviews of the quarterly results and the audited financial statements of the Group. The financial statements were reviewed in the presence of the External Auditors together with their report, comments and advice to ensure compliance with the applicable approved accounting standards and the provisions of the Companies Act, All internal audit reports covering financial, operational audits and compliance audits and their findings were discussed at the Committee meetings. The Committee also reviewed and approved the annual internal audit plan, held prior discussions with the External Auditors before the commencement of the statutory audit and reviewed the External Auditors Management Letter. The Audit Committee had also reviewed the terms of reference of the Audit Committee and recommended appropriate changes to the Board of Directors for approval following amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad in relation thereto. The Group outsourced its Internal Audit Department functions which reports directly to the Committee. Its principal responsibility is to conduct periodic audits in order to review the Group s internal control system and to assess the implementation of audit recommendations. The main objective of the internal audit activity is to provide reasonable assurance that the internal control system is operating satisfactorily to safeguard the Company s assets and shareholders interests. The outsourced internal audit activities are conducted by the Lefis Consulting Sdn. Bhd. based on approved Audit Plan and any ad-hoc assignments as requested by the Board or Management from time to time. Major findings and concerns of the outsourced Internal Audit firm functions are documented in the audit reports, which are tabled and discussed at the Audit Committee meetings together with appropriate corrective measures that are to be taken by the Management. Follow-up audits are conducted to assess the implementation status of audit recommendations by management. STATEMENT BY AUDIT COMMITTEE IN RELATION TO THE EMPLOYEES SHARE SCHEME OF THE COMPANY The Company has not implemented any employee share option scheme during the financial year ended 31 March 2016.

24 TURIYA berhad (55576-A) Annual Report Statement on corporate governance In line with the principles and best practices as recommended by the Malaysian Code of Corporate Governance 2012 ( MCCG 2012 or the Code ). There Board of Directors of Turiya Berhad ( the Board ) supports the principles of good corporate governance and is committed to establishment and implementation of a proper framework and controls to protect and enhance shareholders and stakeholders value and financial performance of the Group. Pursuant to Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board reports herein the manner in which the Company has applied the Principles and Recommendations under MCCG 2012 during the financial year ended 31 March 2016 and any non-observation of the recommendation of MCCG 2012, including the reasons thereof are disclosed in the statement. PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES 1.1 Clear Functions of the Board and Management The Board has established a Board Charter which is available on the corporate website. The Board Charter clearly sets out the principal role, qualification and composition of the Board, the demarcation of the roles, functions, responsibilities and powers of the Board, the Board Committees and the Management. It also defines the specific accountabilities and responsibilities of the Board to ensure smooth interaction between the Management and the Board. It also reinforces the overall accountability of the Board and Management towards the Company and stakeholders. The Board is responsible for implementing the policies and decisions of the Board, determining the Company s overall strategic directions as well as the development and control of the business operations of the Group, and ultimately the enhancement of longterm shareholders value. The Board has a schedule of matters reserved specifically for its decision which includes, among others, approval of annual and quarterly results, acquisitions and disposals as well as material agreements, major capital expenditures and strategic business plans. The Board is collectively responsible for the proper stewardship of the Group s business and the creation of long term shareholder value and financial performance of the Group. However, in the normal course of events, day to day Management of the Company are in the hands of the Management and under the Stewardship of Executive Chairman, Tan Sri Datuk Dr. Mohan Swami, J.P and Group Managing Director, Dato Mohamed Nazir Bin Nor Md. The Board will link the Company s governance and Management functions through the Executive Chairman and Group Managing Director.

25 24 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.1 Clear Functions of the Board and Management (cont d) All Board authority conferred on Management is delegated through the Executive Chairman and Group Managing Director so that the authority and accountability of Management is considered to be the authority and accountability of the Executive Chairman and Group Managing Director insofar the Board is concerned. Only decisions of the Board acting as a body are binding on the Executive Chairman and Group Managing Director. Decisions or instructions of individual Directors, officer or committees are not binding except in those instances where specific authorisation is given by the Board. The Group has established a framework to identify training plans for staff, based on competency profiling that is reviewed annually to continuously train and develop Management and staff to increase their levels of competency, skill efficiency and productivity. The Board through its Nomination Committee has issued a directive to the Senior Management to establish a succession-planning framework for the Board s deliberation for an orderly succession of Senior Management. 1.2 Clear Roles and Responsibilities Reviewing and Adopting a Strategic Plan for the Company The Board assumes full responsibilities for the overall performance of the Company and its subsidiaries by setting policies, establishing goals and monitoring the achievement of the goals through strategic action plans and careful stewardship of the Group s assets and resources. The Executive Board members regularly conduct meetings with the management to engage and review the Company s ongoing business operational plan to ensure the company is moving towards achieving Company s goals enhance shareholders and stakeholders value. Overseeing the Conduct of the Company s Business The Executive Chairman and Group Managing Director are responsible for the implementation of the Board s decisions and overall responsibilities on the day to day Management of the Company. Thereafter, the Executive Chairman and Group Managing Director shall report to the Board on all important matters pertaining to the daily operations of the Company and the Company s performances. Identifying principal risks and ensuring the implementation of the appropriate internal controls and mitigation measures.

26 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.2 Clear Roles and Responsibilities (cont d) Overseeing the Conduct of the Company s Business (cont d) Risk management, as a continuous process, plays an essential role in the Group s business operation. The Board recognizes that risk management is an integral part of the Group s business operation, and as such, has in place the tools for identifying, evaluating and managing the significant risks faced by the Group on an ongoing basis through Risk Management Committee. Details of the Group s implementation of risk management are set out in the Group s Statement on Risk Management and Internal Control on pages 40 to 42 of this Annual Report. Succession Planning The Board recognizes the important of succession planning in maintaining long-term sustainable performance and delegates the planning on succession of key personnel to the Nomination Committee. Through the Nomination Committee, the Board ensures that an appropriate succession plan is in place for member of the Board and to identify and groom senior management to maintain continuity of key positions in the day to day Management of the Company. In the succession planning program, the Nomination Committee will take into consideration the skills and depth of experience required for the Board to continue to function effectively. During the Nomination Committee Meeting, the Nomination Committee will discuss with Human Resources Department to identify key senior management position vacancies and high calibre internal candidates, including identifying the gaps in employees competency levels and training needs. Overseeing the Development and Implementation of Shareholder Communication Policy The Board recognizes the important of effective communication and proactive engagement with the shareholders and investors to keep them informed of the performance, corporate governance, business and corporate development. Therefore, the Board has within the legal and regulatory framework governing the release of material and price sensitive information, provided easy access to corporate and financial information of the Group through the following channels: Annual Report; Circulars to shareholders; Various disclosures and announcement to the Bursa Securities; and Company s website at Reviewing the adequacy and the integrity of the Management information and internal control systems of the Company.

27 26 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.2 Clear Roles and Responsibilities (cont d) Overseeing the Development and Implementation of Shareholder Communication Policy (cont d) The Board is ultimately responsible for the adequacy and integrity of the Company s internal control system. Details pertaining to the Company s internal control system and its effectiveness are available at the Group s Statement on Risk Management and Internal Control on pages 40 to 42 of this Annual Report. 1.3 Code of Ethics The Board has formalized a Directors Code of Ethics, setting out the standards of conduct expected from Directors. The Code of Ethics for Directors requires the Board to observe and display high ethical business standards and corporate behavior and to apply these values to all aspects of the Group s business and professional practice. The conduct of the Director will be consistent with their duties and responsibilities to the Company and, indirectly to Shareholders and Stakeholders. Directors will always act within any limitations imposed by the Board on its activities and decision making process. The Directors Code of Ethics is available online at Sustainability of Business The Board is mindful of the important of business sustainability and in conducting the Group business, the impact on the environment, social and governance aspect is taken in consideration. The Board is responsible to ensure that the Group s strategies promote sustainability and the impact on the environmental, social and governance aspects are taken into consideration in conducting the Group s business. 1.5 Access to Information and Advice The Board has unrestricted access to all information within the Company and the advices and services of the Company Secretary. The Directors may obtain independent professional advice in furtherance of their duties whenever necessary at the Company s expense. Each Board member receives regular reports, including a comprehensive review and analysis of the Group s performance. The Board meeting agenda and a full set of Board papers for each agenda item to be discussed are made available to the Directors prior to the meeting. They will be circulated in sufficient time to enable the Directors to obtain further explanations, where necessary, in order to be briefed properly before the meeting.

28 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.5 Access to Information and Advice (cont d) Guidelines are in place in terms of content, presentation and delivery of Board papers for each Board meeting, so as to provide the Directors with sufficient information to make informed decisions. The Board has unrestricted access to all information within the Company, whether collectively or individually, in furtherance of their duties. The Board is accorded the absolute right to consult experts or obtain external assistance for independent professional advice, where necessary, and all such expenses shall be borne by the Company. 1.6 Qualified and Competent Company Secretary The Company Secretary of the Company is qualified to act as Company Secretary under Section 139A of the Companies Act, 1965 and member of The Malaysian Institute of Chartered Secretaries and Administrators. The Board is satisfied with the performance and support rendered by the Company Secretary to the Board in the discharge of its functions. The Company Secretary through the Board ensure that the Company complies with regulatory requirements, adherence to Board policies and procedures, rules, relevant laws and best practices on Corporate Governance. The Company Secretary ensures that all Board meetings are properly convened so that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory registered of the Company. The Company Secretary also keeps abreast of the evolving capital market environment, regulatory changes and developments in Corporate Governance through update the Board timely. 1.7 Board Charter The Board Charter is the primary document setting out the roles and responsibilities of the Board. The Board Charter takes into consideration all applicable laws, rules and regulations as well as best practices. Company s Board Charter covers inter-alia board principal responsibilities, the composition, qualifications, role of Executive Chairman, Managing Director and Non-Executive Directors. In addition, it provides information on division of roles between the Board and the Board Committees and between the Board and the Management. The Company s Board Charter are adopted by the Board and will be reviewed from time to time to ensure that it remains consistent with the Board s objectives and current laws and practices. The Company s Board Charter is available online at

29 28 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD During the financial period under review, the Board consists of six (6) members comprising an Executive Chairman, one (1) Managing Director, three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. No individual or group of individuals dominates the Board s decision making process. The profile of each Director is presented on pages 11 to 16 of this Annual Report. The Company considers that its complement of Non-Executive Directors provides an effective Board with a mix of industry-specific knowledge and broad business and commercial experiences. It enables the Board to provide clear and effective leadership to the Company and to bring informed and independent judgement to many aspects of the Company s strategies and performances so as to ensure that the highest standards of conduct and integrity are maintained by the Company on a global basis. Profiles of the Board members are set out in the Directors Profile of this Annual Report. The Board has complied with the requirement of the Listing Requirements of Bursa Malaysia that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be Independent and the requirement of the Code that the Board must comprise a majority of Independent Directors where the Chairman of the Board is a Non Independent Director, as three (3) out of six (6) of its Board members are Independent, which is higher than the prescribed minimum requirements. The Company recognizes the contributions of Non- Executive Directors as equal Board members in the development of the Company s strategies, their role in representing the interests of minority shareholders and providing a balanced and independent view to the Board. All Non-Executive Directors are free from any form of relationships that could interfere with their independent judgment. The Board has taken an alternative view to the best practice requiring the Company to identify in its Annual Report a Senior Independent Non-Executive Director to whom concerns may be conveyed. The Board does not consider it necessary to make such an appointment based on the fact that shareholders already have fundamental rights to direct any areas of concern to any member of the Board, each of whom is assessable to the shareholders. The Board has delegated specific responsibilities to six (6) Board appointed Committees, namely Executive Committee, Audit Committee, Nomination Committee, Remuneration Committee, Investment Committee and Risk Management Committee, details of which are set out below. Their respective scope of authorities and responsibilities are clearly defined in their terms of reference which have been approved by the Board. 2.1 Nomination Committee should Comprise Exclusively of Non-Executive Directors, A Majority of whom must be Independent The Nomination Committee comprises two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. This Committee is empowered to bring recommendations to the Board as to the appointment of any new Executive or Non- Executive Director, provided that the Chairman of the Nomination Committee, in developing such recommendations, consults all Directors and reflects that consultation in his recommendation brought before the Board.

30 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.2 Develop, Maintain and Review Criteria for Recruitment and Annual Assessment of Directors The Nomination Committee is chaired by Mr. Jayapalasingam Kandiah and its members are Ms. Usha Nathan A. Vaidyanathan and Mr. Abdulla Abdulaziz Ali Taleb. The Nomination Committee has written terms of reference as follows: To recommend to the Board suitable candidates for Board appointments; To recommend to the Board suitable members for appointments to Board Committees; To review the required mix of skills, experiences and other qualities, including core competencies required of the Board from Non-Executive Directors; To assess the effectiveness of the Board as a whole, the Committees of the Board and the contributions of each individual Director; To recommend to the Board the continuation of office of Independent Directors whose tenure as Independent Director has exceeded a cumulative term of nine (9) years; and To facilitate relevant induction programmes for newly appointed Directors as well as continuing education programmes for existing Directors. The Nomination Committee also ensures that the Board has an appropriate balance of skills, experiences and other qualities, including core competencies that the Executive or Non-Executive Directors should bring to the Board. For this purpose, the Nomination Committee reviews the profile of the required skills and attributes of the Board members. This profile is used to assess the suitability of the candidacy of Executive or Non-Executive Directors put forward by the Directors and/or outside consultants. The Board acknowledges the recommendation of the MCCG 2012 on gender diversity. It was advocated that the Board should ensure participation of women on the Board to reach 30% by year As far as gender diversity is concerned, the Board does not have a specific policy on setting targets for women candidates. The evaluation of suitability of candidates is based on candidates competency, time commitment, character, integrity, contribution and performance. The Board, through the Nomination Committee, conducts an annual self-evaluation on its effectiveness as a whole, each individual Director and the different committees established by the Board. In relation to the year under review, the Board save for the interested Directors, is of the opinion that Mr. Jayapalasingam Kandiah, Dato Mohamed Nazir Bin Nor Md and Mr Abdulla Abdulaziz Ali Taleb the Directors who are seeking reelection at the forthcoming Annual General Meeting, have continued to give effective counsel and commitment.

31 30 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director The Remuneration Committee is primary responsible for the development and review of the remuneration policy and packages for the Board members. The remuneration policy aims to attract and retain Directors necessary for proper governance and smooth running of the Company. The Remuneration Committee comprises one (1) Executive Chairman and (1) Independent Non-Executive Director. The Remuneration Committee s principal objective is to develop, review and recommend to the Board fair remuneration packages inclusive of the annual salaries, incentive arrangements, service arrangements and other employment conditions for the Executive Directors. Information prepared by independent consultants and appropriate survey data on the remuneration practices of comparable companies are taken into consideration. The Remuneration Committee is chaired by Tan Sri Datuk Dr. Mohan Swami, J.P and its member is Mr. Jayapalasingam Kandiah. The Remuneration Committee has written terms of reference as follows: Setting up of the policy framework on the remuneration packages and benefits for Executive Directors in line with current trends in the industry; and To review the annual remuneration packages of each individual Executive Director so as to attract and retain competent executives who can add value to the Company. The Executive Director will not be present when matters affecting his own remuneration arrangements are being considered. The determination of remuneration packages of Non-Executive Directors, shall be a matter for the Board collectively. The individuals concerned shall abstain from discussion of their own remuneration. The policy of the Remuneration is in line with the Group s overall practice on compensations and benefits. This is to reward employees competitively, taking into account performance, market comparisons and competitive pressures in the industry. Whilst not seeking to maintain a strict market position, it takes into account comparable roles in similar organizations. Details of the remuneration of the Directors of the Company, whose remuneration are analyzed into bands of RM50, during the financial year ended 31 March 2016, are indicated below:

32 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director (cont d) Details of the remuneration of the Directors of the Company, whose remuneration are analyzed into bands of RM50, during the financial year ended 31 March 2016, are indicated below: Number of Directors Range of Remuneration per Annum executive Non-Executive Up to RM50,000-3 RM50,001 to RM100, RM100,001 to RM150, RM150,001 to RM200,000-1 RM200,001 to RM250, RM300,001 to RM350, RM1,200,001 to RM1,300, The Remuneration Committee considers that it is crucial to link a significant proportion of the total executive remuneration package to individual and corporate performance. It is the Committee s policy to review the proportion of the total remuneration package linked to performance to align the executive performance and reward with the interests of the shareholders. Remuneration policy and arrangements are subject to regular reviews to achieve this objective and to ensure that the Group can attract and retain executives of high caliber in a competitive business environment. The Board shall determine the fees payable to Non-Executive Directors subject to shareholders approval at the Annual General Meeting of the Company. The remuneration packages of the Directors for the financial year ended 31 March 2016 by category are as follows: Remuneration Packages Total per Annum for the Financial Year Ended 31 March 2016 (RM) Executive Directors Non-Executive Directors Directors fees - 216,000 Salary & other emoluments 1,177,060 - Benefits-in-kind 24,060 4,284 Meeting allowances 1,500 99,469 Other allowances 223,260 69,917 TOTAL 1,425, ,670

33 32 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director (cont d) The Group maintains a Directors and Officers Liability Insurance to indemnify Directors and officers of the Group against any liability incurred by them in carrying out their duties while holding office. The said persons, however, shall not be covered and indemnified in the event of any negligence, fraud, breach of trust proven against them. PRINCIPLE 3 REINFORCE INDEPENDENCE 3.1 Annual Assessment of Independent Directors The Independent Directors play a pivotal role in corporate accountability and provide unbiased and independent views and objective judgment to the Board s deliberation and decision making process, which mitigate risks arising from undue influence form interested parties. This is reflected in their membership of the various Board Committees and attendance of meetings as detailed above. 3.2 Tenure of Independent Directors The Board takes cognizance of the Code s recommendation that the tenure of an Independent Director should not exceed a cumulative term of nine years. However an Independent Director may in the interest of the Company, continue to serve on the Board upon reaching the ninth year limit subject to the Independent Director s re-designation as a Non-Independent Director. In the event the Board intends to retain the Director as Independent Director, who has served in that capacity for a period of exceeding nine years, the Board will justify and seek the shareholders approval. 3.3 Justification and Shareholders Approval to Retain an Independent Director who has Served more than Nine Years The tenure of our Independent Directors is below nine (9) years and justification is not required as of now. 3.4 Separation of Position of the Chairman and Group Managing Director (GMD) The Board is aware of the MCCG 2012, which recommends the appointment of an Independent Non-Executive Director as Board Chairman. The Board thus far is satisfied with the appointment of Executive Chairman in view of his vast experience and knowledge which is beneficial to the Group The positions of Chairman and GMD are separately held by Tan Sri Datuk Dr. Mohan Swami, J.P and as the Executive Chairman and Dato Mohamed Nazir Bin Nor Md as the GMD to ensure appropriate balance of power and authority with accountability and clear division of roles and responsibilities.

34 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 3 REINFORCE INDEPENDENCE (cont d) 3.4 Separation of Position of the Chairman and Group Managing Director (GMD) (cont d) Whilst the Code recommends that the Chairman must be a non-executive member of the Board, the Executive Chairman s position has been perceived as appropriate and of benefit to the Group and the Board given his extensive experience, knowledge, network, leadership and familiarity with the Group s business, industry and products. The Chairman also consults with the Independent Non-Executive Directors for their independent advice, opinion and views. The Chairman in overseeing and executing his executive functions ensures that the Company achieves the financial performance for each financial year, and more importantly delivers long-term and sustainable value to stakeholders. 3.5 The Board must Comprise a Majority of Independent Directors where the Chairman of the Board is not an Independent Director The Board was aware that the Code recommends that the Board must comprise a majority of independent directors where the Chairman of the Board is not an Independent Director, However, the Board considers the current size adequate given due consideration to existing scope and nature of the Group s business operations and represents fairly the interest of the shareholders. Furthermore, the Independent Non- Executive Directors express their concerns whenever necessary to ensure proper checks and balance are in place in the Board s decision-making process and implementation of policies. PRINCIPLE 4 FOSTER COMMITMENT 4.1 Board Meetings and Time Commitment The Board meets regularly on quarterly basis with additional meetings convened as and when necessary. The Board approvals are sought via circular resolutions on operational matters that require urgent Board s decisions. At each Board meeting, there is a full financial reporting and business review and discussion, including monitoring the performance to date against the budgets and financial plans that were previously approved by the Board. Sufficient information is provided to enable the Board to make informed decisions. Board papers are prepared for each Board meeting incorporating both qualitative and quantitative information for discussions and decisions. Minutes of all Board proceedings are certified as true records by the Chairman of the meetings and are properly kept.

35 34 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 4 FOSTER COMMITMENT (cont d) 4.1 Board Meetings and Time Commitment (cont d) There were a total of five (5) Board meetings held during the financial year ended 31 March Details of the Directors attendance at Board meetings are as follows: Name of Directors Designation attendance Tan Sri Datuk Dr. Mohan Swami, J.P. Executive Chairman 5/5 Dato Mohamed Nazir Bin Nor Md Managing Director 2/2 (Appointed on 26 August 2015) Ms. Usha Nathan A. Non-Independent 5/5 Vaidyanathan Non-Executive Director Mr. Jayapalasingam Kandiah Independent 5/5 Non-Executive Director Hj. Jalalullail Bin Osman Independent 2/2 (Retired on 26 August 2015) Non-Executive Director Mr. Khaled Yusuf Abdulla Independent 3/5 AbdulKarim Janahi Non-Executive Director Mr. Ravindra Anant Khot Independent 2/5 (Resigned on 16 March 2016) Non-Executive Director The Board of Directors note the Code s recommendation to notify the Chairman before any of the Directors accept any new directorship, including the indication of time that will be spent on new appointment. This requirement has been communicated to the Directors before their appointment to the Board. 4.2 Access to Continuing Education Programmes All the Directors of the Company except for the newly appointed Directors, have attended and completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia. During the financial year ended 31 March 2016, all the Directors have attended the briefings conducted by the Company Secretary and External Auditors pertaining to the updates on the Listing Requirements and Companies Act, 1965 and accounting standards. In this regards, the Board will continue to undergo relevant training programmes to further enhance their skills and knowledge to keep abreast with the latest development in the industry and regulatory requirements on an ongoing basis.

36 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING The Board is responsible to present a fair assessment of the Group s financial performance and business prospects, primarily through its Annual Audited Financial Statements, quarterly reports to Bursa Securities and Annual Report to the shareholders. The Board has to ensure that the financial statements are drawn up in accordance with provisions of the Companies Act 1965 and applicable approved accounting standards in Malaysia. In compliance with the Companies Act, 1965, the Directors are responsible for the preparation of the Financial Statements for each financial year, which gives a true and fair view of the state of affairs of the Group and the Company and of the results and cash flow of the Group and the Company for the financial year then ended. 5.1 Audit Committee Should Ensure Financial Statements Comply With Applicable Financial Reporting Standards The Board is assisted by the Audit Committee to scrutinise financial reporting for disclosure to ensure accuracy, adequacy and completeness and to oversee the Group s internal audit functions relating to the assurance of the adequacy and integrity of internal controls and monitoring of risks affecting the Group s operations. Further elaboration on the composition and activities of the Audit Committee is stated in the Audit Committee Report on page 17 to 22 in this Annual Report. 5.2 Assessment of Suitability and Independence of External Auditor The role of the Audit Committee in relation to the External Auditors and details of the responsibilities, activities and attendance of Audit Committee members at its regular meetings held during the financial year are set out in the Audit Committee Report of this Annual Report. The Company always maintains a close and transparent relationship with its External Auditors in seeking professional advice and ensuring compliance with the applicable approved accounting standards in Malaysia. In assessing the independence of the External Auditors, the Audit Committee requires written assurance confirming that they are and have been independent throughout the audit engagement with the Company pursuant to the independence criteria set out by the International Federation of Accountants and the Malaysian Institute of Accountants. Having assessed their performance, the Audit Committee will recommend their reappointment decision to the Board, upon which the shareholders approval will be sought at the Annual General Meeting.

37 36 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 6 RECOGNISE AND MANAGE RISK 6.1 Sound Framework to Manage Risks The Board recognizes the importance of maintaining the effectiveness of the Group s system of risk management processes and internal control within the Group. The Risk Management Committee was established to assist the Board s functions in identifying principal risks, ensuring the policy put in place is adequate and procedures and recommendations with regards to the management of risks and internal control are being followed through by the various business/operating units. The Risk Management Committee has been established to assist the Board in recognizing and managing risks and the members are: Name of Directors Dato Mohamed Nazir Bin Nor Md (Appointed on 26 August 2015) Mr. Jayapalasingam Kandiah Designation Managing Director Independent Non-Executive Director Information on the Group s internal controls system and risk management is presented in the Statement on Internal Control as set out on pages 40 to 42 in this Annual Report. 6.2 Internal Audit Function The Board of Directors had outsourced the Internal Audit function to a professional firm of consultants, which is independent of the activities it reviews. The Internal Audit function reviews the auditable areas based on the internal audit plan approved by the Audit Committee and Board of Directors and provides an independent assessment of the adequacy and effectiveness of the Group s internal control system. The head of outsourced Internal Audit Reports directly to the Audit Committee, which receives reports of audit findings and recommendations arising from each audit review. The Management is responsible for ensuring that corrective actions are taken on reported weaknesses and recommendations are adhered to in ensuring proper internal control systems are in place. Details of the Group s internal control processes are set out in the Statement on Risk Management and Internal Control in pages 40 to 42 of this Annual Report.

38 TURIYA berhad (55576-A) Annual Report Statement on corporate governance (cont d) PRINCIPLE 7 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 7.1 Corporate Disclosure Policy and Procedures The Board is aware of the timely and high quality disclosure of material information to the public is an integral part of the Corporate Governance framework and shall ensure compliance with the disclosure requirements as set out in the Listing Requirements of Bursa Malaysia. Procedures have been established to ensure that material and price-sensitive information are handled in a controlled manner to ensure that the prescribed guidelines are strictly adhered to. 7.2 Leverage on Information Technology for Effective Dissemination of Information The Board has established a section on the Company s website, where information on the Company s announcements to the regulators, the salient features of the Board Charter and the Company s announcements and financial information can be accessed at PRINCIPLE 8 STRENGTHEN RELASIONSHIP BETWEEN COMPANY AND SHAREHOLDERS 8.1 Encourage Shareholder Participation at General Meeting AGM represents the principal forum for dialogue and interaction with the shareholders. Beside the usual agenda for the AGM, the Board presents the progress and performance of the businesses as contained in this Annual Report and provides opportunity for shareholders to raise questions pertaining to the financial reporting and business activities of the Group. Directors are available to provide responses to questions from the shareholders during these meetings. At the previous AGM, the Executive Chairman also shared with the shareholders on the responses by the Company submitted in advance to queries raised by the Minority Shareholder Watchdog Group ( MSWG ). Notice of AGM is circulated to shareholders at least 21 days prior to the date of the meeting together with explanatory notes describing the effects of any proposed resolutions to be tabled under special business. All the resolutions set out in the Notice of the last AGM were put to vote by show of hands and were duly passed and approved. The outcome was announced to Bursa on the same day of the AGM.

39 38 TURIYA berhad (55576-A) Annual Report 2016 Statement on corporate governance (cont d) PRINCIPLE 8 STRENGTHEN RELASIONSHIP BETWEEN COMPANY AND SHAREHOLDERS (cont d) 8.2 Effective Communication and Proactive Engagement The Board recognises the importance of an effective channel of communication between the Board, the shareholders and the general investing public. The Company strives to promote and encourage bilateral communications with its shareholders through General Meetings and ensures that information is disseminated to investors, analysts and the general investing public in a timely manner. The Company also strives to maintain and promote transparency in its business activities by continually updating shareholders and investing public of any corporate developments and events pursuant to the Corporate Disclosure Policy of the Listing Requirements of Bursa Malaysia. The primary modes of dissemination of information to the shareholders on the Group s business, corporate affairs and financial information consists of Annual Reports, press releases, quarterly reports and company announcements which can be accessed from the Company s website. In order to maintain high level of transparency and to effectively address any issues of concern from anyone, the Company has a dedicated electronic mail, i.e. contactus@turiya.com.my. Pertinent corporate information of the Group and its business activities are available at COMPLIANCE WITH THE CODE The Board considers that the Group has complied substantially with the principles and recommendation as stipulated in the MCCG 2012 throughout financial year The Board will endeavor to improve and enhance the procedures from time to time. The Statement on Corporate Governance is made in accordance with the resolution passes at the Board of Directors meeting held on 13 July 2016.

40 TURIYA berhad (55576-A) Annual Report STATEMENT ON DIRECTORS RESPONSIBILITY IN RESPECT OF THE ANNUAL AUDITED FINANCIAL STATEMENTS (Pursuant to Paragraph 15.26(a) of the Listing Requirements of Bursa Malaysia) The Act places responsibility on the Directors to ensure that the financial statements provide a true and fair view of the financial position of the Group and the Company as at 31 March 2016 and of their financial performance and cash flows for the financial year then ended. The Board is satisfied that in preparing the financial statements of the Group for the financial year ended 31 March 2016, the Group has conformed to the appropriate accounting policies and applied them consistently and prudently and that measures have been taken to ensure that the accounting records are properly kept in accordance with the law. The Directors also have the general responsibility to take such steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities relevant to preparation and fair presentation of financial statements that are free from material misstatement.

41 40 TURIYA berhad (55576-A) Annual Report 2016 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Responsibility The Board has the overall responsibility to establish a sound risk management framework and internal control system by adopting best practices, instilling good risk management and implementing strong internal control systems to ensure key risk areas are managed to achieve our Group s business objectives. The Board recognises that the Group s system of internal control is designed to manage rather than eliminate the risk of failure to achieve the Group s objectives. Hence, it can only provide reasonable and not absolute assurance against material misstatement of management and financial information or against financial losses and fraud. Key Processes The Group has in place policies that serve as the guiding principles to inculcate a working culture that places high importance on professionalism, integrity and good governance. To that end, the management has put in place a sound internal control system with financial authority limits, standard operating procedures and risk management processes. 1. RISK MANAGEMENT The Group has put in place an ongoing risk management process of identifying, documenting, evaluating, monitoring and managing significant risks affecting the achievement of its business objectives throughout the financial year up to the date of approval of this statement for inclusion in the annual report. An annual review of risk profile is carried out as an integral part of the annual strategic planning cycle and accordingly certain changes to the risk management and internal control process have been made. The group employed the service of a professional services firm to provide further training on enterprise risk management and oversee the overall management of principle areas of risks that the group faces. This involved identifying the type of risk with in an enterprise, measuring those potential risks and proposing means to hedge, insure or mitigate some of the risks that impacts the future earnings of the group. This said process is reviewed by the Board in accordance with the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers. 2. INTERNAL CONTROL The process of internal control has been designed to enable the Board to monitor the Group s overall financial and operational activities, identify principal risks and ensure appropriate systems are in place to manage these risks. The Group s internal control system has been designed to manage rather than eliminate business risks and can only provide reasonable and not absolute assurance against material misstatement, loss or fraud. The Board and Management have established a process of continuously enhancing the system of internal controls as and when there are changes to the business environment or regulatory guidelines.

42 TURIYA berhad (55576-A) Annual Report STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont d) 2. INTERNAL CONTROL (cont d) In addition to ensuring compliances to a clearly defined delegation of authorities and responsibilities (to operating units), quarterly and comprehensive information are provided to the management. These include financial performance and key business indicators, a detailed budgetary process and close monitoring of results against budget, with major variances being followed up and management actions taken, where necessary. Quarterly visits by Management to operating units as well as findings from Internal Audit reviews also provide sources of information for monitoring of controls. The framework of the Group s system of internal control and key procedures include: A Management structure with clearly defined lines of responsibility and appropriate levels of delegation. Key functions such as finance, credit control, treasury, human resources and legal matters are controlled centrally. The Management determines the applicability of risk monitoring and reporting procedures and is responsible for the identification and evaluation of significant risks applicable to their areas of business together with the design and operation of suitable internal controls. Clear definitions of limits of authority and responsibilities have been approved by the Board and subject to annual reviews and enhancements. Corporate values, which emphasise on ethical behaviour and quality services, are set out in the Group s Employee Handbook and the Board Charter. 3. INTERNAL AUDIT FUNCTION The Group s internal audit function is outsourced to a professional services firm, to assist the Board and Audit Committee in providing an independent assessment on the adequacy and effectiveness of the Group s internal control system. During the financial year ended 31 March 2016, an internal audit was carried out on Rental Income and Controls Over Expenditure Cycle and the findings of the internal audit, including the recommendation on corrective actions, were presented to the Audit Committee. A follow up review has been conducted to ensure that corrective actions are properly implemented based on the agreed action plan. Based on the internal audit review conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this annual report.

43 42 TURIYA berhad (55576-A) Annual Report 2016 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont d) CONCLUSION The Board has reviewed the risk management and internal control system and is satisfied that the risk management and internal control system of the Group in place for the year under review is generally adequate and effective. The Board has also received assurance from the Executive Chairman, Group Managing Director and the Finance Manager that the Group s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. The Group s system of internal controls will continue to be reviewed, added to or updated in line with changes in the operating environment to ensure its continuing effectiveness. 4. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS As required by Paragraph of the Bursa Securities Listing Requirements, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance engagement was performed in accordance with ISAE3000, Assurance Engagement other than Audits or Review of Historical Financial Information and Recommended Practice Guide ( RPG ) 5, Guidance for Auditors on the Review of Directors Statement on Internal Control included in the Annual Report. Based on their procedures performed, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this statement is not prepared, in all material aspects, in accordance with disclosure required by paragraphs 41 and 42 of the Statement of Risk Management and Internal Controls: Guidance for Directors of Listed Issuers to be set out, nor is factually inaccurate. RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group s risk and control system.

44 financial statements Directors Report Statement by Directors Statutory Declaration Independent Auditors Report to the Members Statements of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Statement of Financial Position Consolidated Statement of Changes in Equity Statement of Changes In Equity Statements of Cash Flows Notes to the Financial Statements