WOODLANDOR HOLDINGS BERHAD ( D)

Transcription

1 WOODLANDOR HOLDINGS BERHAD ( D) ANNUAL REPORT 2016

2 CONTENTS Notice of the 21 st Annual General Meeting 2 Corporate Information 5 Profile of the Members of the Board 6 Chairman s Statement and Management Discussion & Analysis 8 Report of the Audit Committee 10 Corporate Governance Statement 13 Additional Compliance Information 21 Directors Responsibility Statement 22 Statement on Risk Management and Internal Control 23 Financial Statements 24 Properties Held by the Group 79 Shareholding Statistics 80 List of 30 Largest Shareholders 81 Form of Proxy

3 WOODLANDOR HOLDINGS BERHAD ( D) NOTICE OF 21 ST ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Twenty-first Annual General Meeting of the Company will be held at Ballroom 2, Level LG, Eastin Hotel, No. 13, Jalan 16/11, Pusat Dagangan Seksyen 16, Petaling Jaya, Selangor Darul Ehsan on Thursday, 8 June 2017 at a.m. to transact the following businesses:- AGENDA 1. To receive the Audited Financial Statements for the financial year ended 31 December 2016 and the Reports of Directors and Auditors thereon. (Please refer to Explanatory Notes) 2. To approve the payment of Directors fees for the financial year ended 31 December Ordinary Resolution 1 3. To re-elect Mun Li Choo retiring in accordance with Article 80 of the Company s Articles of Association. Ordinary Resolution 2 4. To re-appoint the following Directors of the Company:- (i) Mr. Chay Ng Ordinary Resolution 3 (ii) Mr. Lim Soo Hee Ordinary Resolution 4 5. To re-appoint Morison Anuarul Azizan Chew as Auditors of the Company and authorise the Directors to determine their remuneration. Ordinary Resolution 5 As Special Business to consider and if thought fit, to pass the following Ordinary Resolutions, with or without modifications:- 6. AUTHORITY TO ALLOT AND ISSUE SHARES IN GENERAL PURSUANT TO SECTIONS 75 and 76 OF THE COMPANIES ACT, 2016 Ordinary Resolution 6 THAT pursuant to Sections 75 and 76 of the Companies Act, 2016 and subject to the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon such terms and conditions and for such purposes as the Directors, may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company. 7. APPROVAL TO CONTINUE IN OFFICE AS INDEPENDENT DIRECTOR Ordinary Resolution 7 THAT Mr. Lim Soo Hee who has served the Board as the Independent Non-Executive Director of the Company for a cumulative term of more than nine years since 30 August 2001 be and is hereby retained as the Independent Non-Executive Director of the Company. 8. To transact any other business of which due notice shall have been received. 2

4 ANNUAL REPORT 2016 NOTICE OF 21 ST ANNUAL GENERAL MEETING BY ORDER OF THE BOARD LEE WAI NGAN (LS ) TAN KOK SIONG (LS ) Secretaries Petaling Jaya Dated: 28 April 2017 NOTES: 1. Only members whose names appear in the Record of Depositors as at 1 June 2017 shall be entitled to attend, speak and vote at the Annual General Meeting. 2. A member entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his/her stead. A proxy may but need not be a member of the Company. 3. Where a member appoints two (2) proxies to attend and vote at the meeting, such appointment shall be invalid unless the member specifies the proportion of his/her shareholding to be represented by each proxy. 4. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. 5. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised. 6. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certified copy thereof, must be deposited at the Registered Office of the Company at Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, Kuala Lumpur not less than forty eight (48) hours before the time appointed for holding the Twenty-first Annual General Meeting or any adjournment thereof. Explanatory notes on Ordinary and Special Business:- Item 1 of the Agenda - Audited Financial Statements The Audited Financial Statements laid at this meeting pursuant to Section 340(1)(a) of the Companies Act, 2016 are meant for discussion only. It does not require shareholders approval, and therefore, shall not be put forward for voting. Ordinary Resolutions 3 and 4 Re-appointment of Directors With the coming into force of the Companies Act, 2016 on 31 January 2017, there is no age limit for directors. At the Twentieth Annual General Meeting of the Company held on 16 June 2016, Mr. Wang Hak Wong Hak Tham, Mr. Chay Ng and Mr. Lim Soo Hee, who are all above the age of 70, were re-appointed pursuant to Section 129 of the Companies Act, 1965 to hold office until the conclusion of the Twenty-First Annual General Meeting. Their term of office will end at the conclusion of the Twenty-First Annual General Meeting. Mr. Chay Ng and Mr. Lim Soo Hee, have offered themselves for re-appointment at the Twenty-First Annual General Meeting. Mr. Wang Hak Wong Hak Tham has indicated that he does not wish to seek re-appointment. Accordingly, he will be retire at the conclusion of the Twenty-First Annual General Meeting. The proposed Ordinary Resolutions 3 and 4, if passed, will enable Mr. Chay Ng and Mr. Lim Soo Hee to continue to act as Directors of the Company and they shall be subject to retirement by rotation at a later date. 3

5 WOODLANDOR HOLDINGS BERHAD ( D) NOTICE OF 21 ST ANNUAL GENERAL MEETING Ordinary Resolution 6 Authority to Issue Shares At last year s Annual General Meeting, mandate was given to Directors to issue and allot no more than 10% of the issued share capital of the Company. However, the mandate was not utilised and accordingly will lapse at the forthcoming Annual General Meeting. As such, the Board would like to seek for a renewal of the mandate. The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to issue and allot not more than 10% of the issued share capital of the Company subject to the approvals of all the relevant governmental and/or other regulatory bodies and for such purposes as the Directors consider would be in the best interest of the Company. The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions. This authorisation will, unless revoked or varied by the Company in a general meeting, expire at the next Annual General Meeting of the Company. Ordinary Resolution 7 Approval to Continue in Office as Independent Director The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Mr. Lim Soo Hee who has served as Independent Director of the Company for a cumulative term of more than nine years and recommend him to continue to act as Independent Director of the Company based on the following justifications:- a. He is a member of the Malaysian Institute of Accountants and the Chartered Tax Institute of Malaysia. He has vast experience in accounting practices. He fulfills the criteria under the definition of Independent Director as defined in the Bursa Malaysia Securities Berhad Main Market Listing Requirements and he would be able to provide proper checks and balances, thus bringing an element of objectivity to the Board of Directors; b. He has been with the Company for more than nine years and therefore understand the Company s business operations which enable him to participate actively and contribute during deliberations or discussions at Audit Committee, Nomination Committee, Remuneration Committee and Board Meetings; c. With his vast experience in accounting and finance, he would be able to provide constructive opinions and exercise independent judgement and has the ability to act in the best interest of the Company; d. He has contributed sufficient time and efforts and attended all the Audit Committee, Nomination Committee, Remuneration Committee and Board Meetings for informed and balanced decision making; and e. He has exercised due care during his tenure as Independent Director of the Company and carried out his professional duty in the interest of the Company and shareholders. 4

6 ANNUAL REPORT 2016 CORPORATE INFORMATION BOARD OF DIRECTORS Dato Seri Mun Weng Sum Executive Chairman Mun Li Choo Executive Director Wang Hak Wong Hak Tham Senior Independent Non-Executive Director Lim Soo Hee Independent Non-Executive Director Chay Ng Independent Non-Executive Director AUDIT COMMITTEE Wang Hak Wong Hak Tham Senior Independent Non-Executive Director Lim Soo Hee Independent Non-Executive Director Chay Ng Independent Non-Executive Director NOMINATION COMMITTEE Chay Ng Chairman / Independent Non-Executive Director Lim Soo Hee Member / Independent Non-Executive Director Wang Hak Wong Hak Tham Member / Senior Independent Non- Executive Director REMUNERATION COMMITTEE Lim Soo Hee Chairman / Independent Non- Executive Director Wang Hak Wong Hak Tham Member / Senior Independent Non-Executive Director AUDITORS Morison Anuarul Azizan Chew (AF001977) Chartered Accountants 18 Jalan 1/64, Off Jalan Kolam Air / Jalan Ipoh, Kuala Lumpur. Tel: Fax: SECRETARIES Lee Wai Ngan (LS ) Tan Kok Siong (LS ) REGISTRAR Systems Associates Sdn Bhd ( A) Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, Kuala Lumpur Tel: Fax: PRINCIPAL BANKERS Affin Bank Berhad Malayan Banking Berhad CIMB Bank Berhad Public Bank Berhad REGISTERED OFFICE Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, Kuala Lumpur Tel: Fax: STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad Stock Name : WOODLAN Stock Code :

7 WOODLANDOR HOLDINGS BERHAD ( D) PROFILE OF THE MEMBERS OF THE BOARD DATO SERI MUN WENG SUM Aged 44, Male Malaysian Executive Chairman Dato Seri Mun was appointed to the Board on 18 April He holds a Bachelor Degree in Accounting from the University of Essex, England and a Master of Business Administration from Preston University, USA. Upon graduation he had a short stint with a professional accounting firm in England before joining the Company s Finance Department. He is also the Business Development Director of the Group. Dato Seri Mun attended five (5) out of five (5) Board Meetings held in the financial year ended 31 December He is the brother of Ms Mun Li Choo, the Executive Director. He does not have any conflict of interest and/or personal interest in any business arrangement or material contract involving the Company or its subsidiaries either still subsisting at the end of the financial year ended 31 December 2016 or entered into since the end of the previous financial year. He has no conviction for any offences within the past ten (10) years other than traffic offences. MUN LI CHOO Aged 46, Female Malaysian Executive Director Ms Mun was appointed to the Board on 20 April She holds a Bachelor Degree in Commerce majoring in Marketing from the Curtin University of Technology, Perth, Australia. She joined Woodlandor Wood Products Sdn Bhd, a wholly-owned subsidiary of the Company as Export Marketing Executive on 1 April 1997 in the Furniture Division. She was promoted to Acting General Manager on 1 May 2003 and subsequently on 1 March 2008, she was appointed as the General Manager of the Furniture Division. Since 2010, she manages the overall operations of the subsidiary. Ms Mun attended five (5) out of five (5) Board Meetings held in the financial year ended 31 December She is the sister of Dato Seri Mun Weng Sum, the Executive Chairman. She does not have any conflict of interest and/or personal interest in any business arrangement or material contract involving the Company or its subsidiaries either still subsisting at the end of the financial year ended 31 December 2016 or entered into since the end of the previous financial year. She has no conviction for any offences within the past ten (10) years other than traffic offences. WANG HAK WONG HAK THAM Aged 75, Male Malaysian Senior Independent Non-Executive Director Mr Wang was appointed to the Board on 18 April He is an Associate of Chartered Institute of Secretary and Administrator and Chartered Institute of Banker, both of London. He started his career as a bank officer in 1962 and has since established a long and fruitful service in the banking industry spanning about 34 years. His last position with the bank before his retirement in 1996 was General Manager of Banking and Operations. He is presently a Director of Paos Holdings Berhad, a company listed on the Main Market of Bursa Malaysia Securities Berhad. Mr Wang attended five (5) out of five (5) Board Meetings held in the financial year ended 31 December He is currently the Chairman of the Audit Committee and a member of the Nomination and the Remuneration Committees respectively. Concerns of any shareholder/investor may be conveyed to Mr Wang who has also been nominated by the Board as the Senior Independent Non-Executive Director of the Company. He is not related to any substantial shareholder or Directors of the Company or its subsidiaries. He does not have any conflict of interest and/or personal interest in any business arrangement or material contract involving the Company or its subsidiaries either still subsisting at the end of the financial year ended 31 December 2016 or entered into since the end of the previous financial year. He has no conviction for any offences within the past ten (10) years other than traffic offences. 6

8 ANNUAL REPORT 2016 PROFILE OF THE MEMBERS OF THE BOARD LIM SOO HEE Aged 72, Male Malaysian Independent Non-Executive Director Chay Ng Aged 73, Male Malaysian Independent Non-Executive Director Mr Lim was appointed to the Board on 30 August Mr Lim holds a Bachelor Degree in Accounting from Nanyang University, Singapore and a Master of Business Administration from Ohio University, USA. He is a fellow of the Association of Chartered Certified Accountants, UK and a member of the Malaysian Institute of Accountants and the Chartered Tax Institute of Malaysia. He has served in a number of commercial firms holding various positions such as Administration and Finance Manager and Corporate Finance Manager. Since 1987, he runs his own management consultancy firm. Mr Lim attended four (4) out of five (5) Board Meetings held in the financial year ended 31 December He is currently the Chairman of the Remuneration Committee and a member of the Audit and the Nomination Committees respectively. He is not related to any substantial shareholder or Directors of the Company or its subsidiaries. He does not have any conflict of interest and/or personal interest in any business arrangement or material contract involving the Company or its subsidiaries either still subsisting at the end of the financial year ended 31 December 2016 or entered into since the end of the previous financial year. He has no conviction for any offences within the past ten (10) years other than traffic offences. Mr Chay was appointed to the Board on 27 August He holds a two years study certificate of Economic from Nanyang University, Singapore and a Master of Business Administration from Honolulu University, USA. He has been the Chairman of Forerank Corporation Sdn Bhd, Forerank Travel Sdn Bhd and Aigner Technologies (M) Sdn Bhd. Prior to that he was also on the Board of various private companies. He has vast experience in travel line. Mr Chay attended four (4) out of five (5) Board meetings held in financial year ended 31 December He is currently the Chairman of the Nomination Committee and a member of the Audit Committee. He is not related to any substantial shareholder or Directors of the company or its subsidiaries. He does not have any conflict of interest and /or personal interest in any business arrangement or material contract involving the Company or its subsidiaries either still subsisting at the end of the financial year ended 31 December 2016 or entered into since the end of the previous financial year. He has no conviction for any offences within the past ten (10) years other than traffic offences 7

9 WOODLANDOR HOLDINGS BERHAD ( D) CHAIRMAN S STATEMENT AND MANAGEMENT DISCUSSION & ANALYSIS Dear Value Shareholders, on behalf of the Board of Directors, It is my pleasure to present to you the Annual Report and Audited Financial Statements of Woodlandor Holdings Berhad and its Group of companies for the financial year ended 31 December FINANCIAL PERFORMANCE The Group recorded sales revenue of RM million for the year ended 31 December 2016 indicating a slight increase of 1% compare RM million for the previous year. The increase in revenue was mainly due to incremental revenue from manufacturing division which contributed 87% of total revenue while trading division contributed the balance 13%. The Group achieved it net profit after tax of RM2.072 million for the year 2016 compare to RM0.549 million in year OVERVIEW The economic conditions in Malaysia in year 2016 were challenging with low GDP, in particular the inflationary cost pressure brought on by higher raw material prices coupled with lower growth for the year. Weak external demands and a slowdown in domestic consumption had also contributed to the weaker sentiments. REVIEW OF OPERATIONS AND TREND In the current financial year under review, the Group had continued to focus on its manufacturing segment by enhancing its product development to improve its product range. Due to prevailing market conditions, the Group has intensified its effort to improve productivity, operation efficiency and cost-effectiveness through manufacturing in product mixed. Although, these saving partially were offset by an increase in labour cost attributable to the hike in foreign workers levy and imposition of minimum wage rates by the Malaysia government in year As a result, the gross profit margin had increased 6.2 percentage points compare to last financial year. Excluding other operating expenses of RM4.272 million in current year with a marginal increased compare to RM4.009 million in year 2015, the Group has managed to reduce its selling and marketing expenses by 9% to RM1.726 million and finance cost by 17.1% to RM0.296 million in year 2016 under review. Despite the current lackluster economic sentiment, Woodlandor is cautiously of riding through these uncertainties. Looking ahead, the Group strive to achieve revenue growth. We will also focus on operational efficiency through cost control measures for the production process at our manufacturing plants. GOING FORWARD The Group is expected to operate in a very challenging economic outlook in 2017, the labour costs are expected to continue trending upwards, also confronted by the persistently weak sentiment in the lackluster real estate and property sector, couple with the inflation hike and the decreasing ringgit posed serious challenges on the Malaysia economy and overall trading sentiments. However, the Group will try to strive to continue to improve its efficiency. These include strengthening our brand positioning and focus on better margin product mix to improve the Group s profitability. 8

10 ANNUAL REPORT 2016 CHAIRMAN S STATEMENT AND MANAGEMENT DISCUSSION & ANALYSIS CORPORATE SOCIAL RESPONSIBILITY Community The Group made contributions and donations to numerous organisations such as National Council for the Blind and other non-governmental organisations for cultural activities. Employees The Group continued to provide employees with the necessary training and development in order to improve and enhance their skills and knowledge by attending seminars and courses offered by professional bodies including subjects in Finance and Accounting, Human Resources, Management and Marketing. The Group continued to maintain a safe and healthy working environment for all employees and workers through various measures. Looking ahead, the Group will continue to carry out its corporate social responsibility as part of its good business practices. DIVIDEND The Board does not recommend any dividend for the year ended 31 December APPRECIATION On behalf of the Board of Directors, I would like to express our sincere appreciation to the management and staff of the Group for their contributions, commitment and dedication in a challenging year. Our appreciation is also accorded to our valued customers, business partners, financiers and shareholders for their continued support and confidence towards our Group. Dato Seri Mun Weng Sum Executive Chairman 9

11 WOODLANDOR HOLDINGS BERHAD ( D) REPORT OF THE AUDIT COMMITTEE The Board of Directors of Woodlandor Holdings Berhad is pleased to present the report of the Audit Committee for the financial year ended 31 December MEMBERSHIP AND ATTENDANCE During the financial year ended 31 December 2016, a total of five (5) Audit Committee meetings were held. The details of attendance of the Audit Committee ( Committee ) members are as follows: Composition of Audit Committee Attendance of Meetings Wang Hak Wong Hak Tham Chairman / Senior Independent Non-Executive Director 5/5 Lim Soo Hee Member / Independent Non-Executive Director 4/5 Chay Ng Member / Independent Non-Executive Director 4/5 Composition The Audit Committee shall be appointed by the directors from amongst themselves and its number shall not be less than three (3) members and all members must be non-executive directors, with a majority of whom shall be independent nonexecutive directors. The Chairman of the Audit Committee shall be an Independent Director. Authority a. The Committee is authorised by the Board, in accordance with the procedures to be determined by the Board and at the cost of the Company:- (i) (ii) to investigate any activity within its Terms of Reference. It is authorised to seek any information it requires from any employees and all employees are directed to co-operate with any request made by the Committee; and to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. b. The Committee may communicate directly with the external auditors and person(s) carrying out the internal audit function or activity (if any). Terms of Reference The Terms of Reference of the Audit Committee are made available on the Company s website at Functions The functions of the Committee shall be:- 1. to review the following and report the same to the Board of Directors :- (a) (b) (c) (d) with the external auditors, the audit plan, the evaluation of the system of internal controls, the audit report and the assistance given by the employees of the company to the external auditors; the assistance given by the employees of the listed issuer to the external auditor; the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work; any appraisal or assessment of the performance of members of the internal audit function; 10

12 ANNUAL REPORT 2016 REPORT OF THE AUDIT COMMITTEE (e) (f) (g) (h) approve any appointment or termination of senior members of the internal audit function; the internal audit program, processes, the results of the internal audit review and investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function; the quarterly results and year-end financial statements, before the approval by the board of directors, focusing particularly on (i) changes in or implementation of major accounting policy changes; (ii) significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed; and (iii) compliance with accounting standards and other legal requirements; and any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity. 2. the Committee shall convene meetings with the external auditors, the internal auditors or both, excluding the attendance of the senior management. 3. to recommend the re-appointment / nomination of auditors and to review any letter of resignation from the external auditors of the company. 4. to verify the allocation of options to eligible employees under the Employees Share Option Scheme ( ESOS ). 5. to consider the nomination of a person or person(s) as auditors. 6. to undertake such other functions as may be agreed to by the Committee and the Board of Directors. Meetings Meetings shall be held not less than four times a year subject to the quorum of at least two (2) independent directors or more frequently as circumstances required or upon the request of any member of the Committee, the external auditors or the internal auditors with due notice of issues to be discussed and shall record its conclusions in discharging its duties and responsibilities. The Committee may invite any Board member or any member of management or any employee of the company who the Committee deems fit to attend its meetings to assist and to provide pertinent information as necessary. ACTIVITIES OF THE COMMITTEE DURING THE YEAR In accordance with the terms of reference of the Committee, the following activities were carried out by the Committee during the financial year ended 31 December 2016 in discharging its duties:- (i) (ii) (iii) (iv) Reviewed periodic and annual audit plans set during the financial year for the Company and the Group, prepared by both the internal and external auditors; Reviewed periodic and annual audit reports on the Company and its subsidiaries prepared by the internal and external auditors and considered the findings by the auditors and management s responses thereto; Reviewed quarterly financial reports and the annual audited financial statements of the Company and the Group prior to submission to the Board for consideration and approval; Reviewed and assessed the adequacy of the Internal Control and Risk Management procedures of the Company and the Group and report any weakness or inadequacy to the Board; 11

13 WOODLANDOR HOLDINGS BERHAD ( D) REPORT OF THE AUDIT COMMITTEE (v) (vi) Reviewed all related party transactions entered into by the Group and the Company to ensure that the transactions entered into were at arm s length basis and on normal commercial terms; Met with the external auditors twice a year without the presence of any executive director and management personnel. INTERNAL AUDIT FUNCTION For the financial year ended 31 December 2016, the Group has outsourced its internal audit functions and the internal audit costs for the financial year 2016 was RM32, The internal audit activities are aligned with the Group s business risks and the following Internal Audit Charter has been adopted by the Company for the internal auditor:- INTERNAL AUDIT CHARTER Mission The mission of the Internal Auditor is to independently ascertain whether the ongoing processes for controlling operations throughout the Woodlandor Group, are adequately designed and functioning in an effective manner. Scope of Activities The Internal Auditor s scope of activities is to ascertain, through selective testing, that the processes for controlling, as they have been designed and represented by management, are adequate and functioning in an effective manner to ensure: Resources are adequately protected; Significant financial, managerial and operating information are accurate and reliable; and Employees actions are in compliance with the Woodlandor Group s policies, standards, procedures, and applicable laws and regulations. Accountability The Internal Auditor, in the discharge of its duties, shall be accountable to the Audit Committee of the Woodlandor Group to: Provide an assessment of the adequacy and effectiveness of the organisation s processes for controlling its activities for the financial year under review; Report significant issues related to the processes for controlling the activities of the organisation and provide information concerning such issues; and Provide information on the status and results of the internal audit review on a quarterly basis. Independence To provide for the independence of the Internal Audit function, Internal Audit personnel report functionally to the Audit Committee. Whenever necessary, the Audit Committee shall meet with the internal auditors without the present of executive Board members or management personnel, to allow the Audit Committee and the internal auditor to communicate independently. 12

14 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT The Board of Directors ( Board ) of Woodlandor Holdings Berhad recognises its responsibilities for good corporate governance and is committed to ensuring that a high standard of corporate governance is practised throughout the Group as a fundamental part of discharging its responsibilities. The Board is pleased to report that measures have been taken to ensure that the principles and best practices set out in the Malaysian Code on Corporate Governance 2012 ( Code ) are observed and practised throughout the Group. (A) DIRECTORS (i) The Board The Board is responsible to the shareholders for the strategic direction and proper management of the business of the Company and the Group with the objective of creating and enhancing shareholders value. To achieve that objective, the Board reserves certain strategic and financial matters for its collective decisions. The Board has approved a board charter ( Board Charter ) which sets out the composition, roles and responsibilities and processes of the Board. The Board Charter is made available for reference in the Company s website at Time commitment Directors are expected to give sufficient time and attention to carry out their responsibilities. The Board Charter sets out a policy where a director shall notify the Chairman officially before accepting any new directorships in other companies and the noti fication shall explain the expectation and an indication of time commitment that will be spent on the new appointments. The Directors have demonstrated their ability to devote sufficient time and commitment to their roles and responsibilities Board meetings The Board meets at least four (4) times a year, with additional meetings convened when necessary. Five (5) Board Meetings were held during the financial year ended 31 December Details of the attendance of the Directors are as follows: Name Total Meetings Attended Dato Seri Mun Weng Sum 5/5 Mun Li Choo 5/5 Wang Hak Wong Hak Tham 5/5 Lim Soo Hee - 4/5 Chay Ng - 4/5 All existing Directors have attended the Mandatory Accreditation Programme as required by Bursa Securities. The Directors continue to attend relevant seminars and programmes to keep their knowledge and expertise updated. 13

15 WOODLANDOR HOLDINGS BERHAD ( D) CORPORATE GOVERNANCE STATEMENT During the financial year ended 31 December 2016, the Directors, have attended the development and training programme as below: No. Name of Director Course Attended Date 1. Dato Seri Mun Weng Sum Leadership Excellence From The Chair I Am Ready to Manage Risk The 8th World Chinese Economic Summit & How To Leverage on AGMs for Better Engagement with Shareholders 2. Mun Li Choo Business Opportunities & Challenges for Manufacturer Wang Hak Hak Tham Fraud Risk Management Workshop Lim Soo Hee The Cybersecurity Threat And How Board Should Mitigate The Risks Chay Ng How To Leverage on AGMs for Better Engagement with Shareholders Fraud Risk Management Workshop The Company will continue to arrange further development and training programmes for the Directors in order to update and enhance their skills and knowledge, which are important for carrying out their role effectively as a director. (ii) Board Balance Board Composition The Company is led and managed by a Board comprising five (5) members with a wide range of business, banking, accounting, financial and technical background. The Board currently consists of the Executive Chairman (also the Chief Executive Officer) with one (1) Executive Director and three (3) Independent Non-Executive Directors. The Company has met the Bursa Malaysia Securities Berhad ( Bursa Securities ) Listing Requirements ( Listing Requirements ) in respect of having at least one third (1/3) of the membership of the Board comprising independent directors. The composition of the Board reflects a sufficiently wide and relevant mix of backgrounds, skills and experience vital for the successful direction and management of the Group s business operations. A brief profile of each Director is set out in pages 6 and 7 of this Annual Report. The Executive Directors have the responsibility of making and implementing operational decisions and running of the Group s business. The Non-Executive Directors play key supporting roles, contributing their knowledge, skills and experience towards the formulation of strategies and policies and in the decision making process. Where a potential conflict of interest may arise, it is mandatory practice for the director concerned to declare his interest and abstain from deliberations of the Board on the matter. The Executive Chairman assumes the position of Chief Executive Officer as he brings with him a wealth of about 16 years experiences in wood working industry and a calibre to ensure that strategies and policies approved by the Board are effectively implemented. Nonetheless, the number of Non-Executive Directors constituting 60% of the Board bringing strong independent views, judgement, knowledge, experience and support to the Board s deliberation to ensure a balanced Board decision making process. Taking into consideration the experience of the Executive Chairman/Chief Executive Officer, the relatively small business operations of the Group and other factors stated above, the Board considers that the departure from the recommended practice of separating the functions of the Chairman and that of the Chief Executive Officer is appropriate in the circumstances. 14

16 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT Since 27 November 2001, the Company has appointed Mr Wang Hak Wong Hak Tham as the Senior Independent Non-Executive Director available for communication for any concerns of the Board and investors/shareholders. The Board has full and unrestricted access to the advice and services of the Company Secretary to enable them to discharge their duties effectively. The Company Secretary attended all Board meetings and together with the Directors are responsible for the proper conduct of the meetings according to the applicable rules and regulations. The Company Secretary regularly updates the Board on new rules and regulations issued by regulatory authorities. Board Committees Apart from the Audit Committee which was established in 1997, the Board had in November 2001 established the Nomination Committee and Remuneration Committee. The members of these Committees are as follows: Nomination Committee Chay Ng Chairman (Independent Non-Executive Director) Lim Soo Hee Member (Independent Non-Executive Director) Wang Hak Wong Hak Tham Member (Senior Independent Non-Executive Director) The duties of the Nomination Committee include considering candidates for Board vacancies and recommending all appointments to the Board. The Board will consider such recommended appointment and approve if they are found to be appropriate and suitable. The terms of reference of the Nomination Committee have been adopted by the Board and can be obtained from the Company s website at www. woodlandor.com.my. The summary of the activities of the Nomination Committee during the financial year are as follows:- Review the mix of skill and experience and other qualities of the Board. Assess the effectiveness of the Board as a whole, the Board committees and the Directors. Discuss the Company s Directors retirement by rotation. Discuss the re-appointment of the Company s Independent Directors who have served the Company for more than 9 years. Criteria for recruitment and assessment The Board nomination process is to facilitate and provide a guide for the Nomination Committee to identify, evaluate, select and recommend to the Board the candidate to be appointed as a director of the Company. The Board has established a nomination process of board members to facilitate and provide a guide for the Nomination Committee to identify, evaluate, select and recommend to the Board the candidate to be appointed as a director of the Company. The Board does not set specific criteria for the assessment and selection of director candidate. However, the consideration would be taken on the need to meet the regulatory requirement such as Companies Act, 1965 and Main Market Listing Requirements, the achievement in the candidate personal career, integrity, wisdom, independence of the candidate, ability to make independent and analytical inquiries, ability to work as a team to support the Board, possession of the required skill, qualification and expertise that would add value to the Board, understanding of the business environment and the willingness to devote adequate time and commitment to attend to the duties/functions of the Board to select the suitable candidate. 15

17 WOODLANDOR HOLDINGS BERHAD ( D) CORPORATE GOVERNANCE STATEMENT The Nomination Committee is responsible to recommend identified candidate to the Board to fill vacancy arises from resignation, retirement or any other reasons or if there is a need to appoint additional director with the required skill or profession to the Board in order to close the competency gap in the Board identified by the Nomination Committee. The potential candidate may be proposed by existing director, senior management staff, shareholders or third party referrals. Upon receipt of the proposal, the Nomination Committee is responsible to conduct an assessment and evaluation on the proposed candidate. The assessment/evaluation process may include, at the Nomination Committee s discretion, reviewing the candidate s resume, curriculum vitae and other biographical information, confirming the candidate s qualifications and conducting legal and other background searches as well as formal or informal interview at the Nomination Committee s discretion. The Nomination Committee would also assess the candidate s integrity, wisdom, independence, ability to make independent and analytical inquiries, ability to work as a team to support the Board, understanding of the business environment and the willingness to devote adequate time and commitment to attend to the duties/functions of the Board. Upon completion of the assessment and evaluation of the proposed candidate, the Nomination Committee would make its recommendation to the Board. Based on the recommendation of the Nomination Committee, the Board would evaluate and decide on the appointment of the proposed candidate. The Chairman of the Board would then make an invitation or offer to the proposed/potential candidate to join the Board as a director. With the acceptance of the offer/invitation, the candidate would be appointed as director of the Company. Annual Assessment of Existing Directors The director who is subject to re-election and/or re-appointment at next Annual General Meeting shall be assessed by the Nomination Committee before recommendation is made to the Board and shareholders for the re-election and/or re-appointment. Appropriate assessment and recommendation by the Nomination Committee would be based on the yearly assessment conducted. Assessment on Independence of Directors Criteria have been set to assess the independence of candidate for directors and existing directors based on the guidelines set out in the Listing Requirements. On an annual basis, the Directors are required to confirm their independence by completing the independence checklist. Gender Diversity Policy A diversity policy has been established by the Board. The Board endeavours to have diversity of the Board as well as its workforce in terms of experience, qualification, ethnicity and age. During selection process, any list of proposed candidates to the Board shall consist of woman candidates, wherever reasonably possible. The Nomination Committee is responsible in ensuring that diversity objectives are adopted in board recruitment, board performance evaluation and succession planning processes. 16

18 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT Remuneration Committee Lim Soo Hee Chairman (Independent Non-Executive Director) Wang Hak Wong Hak Tham Member (Senior Independent Non-Executive Director) The duty of the Remuneration Committee is to ensure that the remuneration of the directors commensurate with the skills, experience and responsibility of the directors. The directors concerned would abstain from discussion pertaining to their own remuneration. The terms of reference of the Remuneration Committee has been adopted by the Board. The Board has established a Remuneration Committee policy and procedure to facilitate the Remuneration Committee to review, consider and recommend to the Board for decision the remuneration package of the Executive Directors. Retirement and Re-election of Directors In accordance with the Company s Articles of Association, directors shall retire from office at least once in every three years. At every Annual General Meeting, one third (1/3) of the directors for the time being shall retire from office and be eligible for re-election. Directors who are appointed by the Board are subject to election by the shareholders at the Annual General Meeting held following their appointments. (iii) Supply of Information The Board and its committees are provided with notices and written reports and supporting information covering various aspects of the Group s operation and performance at least 7 days before the meeting date to ensure that they have sufficient time to study them and be prepared for discussion. The Board has access to all staff for any information pertaining to the Group s affairs. All directors have access to the advice and services of the Company Secretaries who are responsible for ensuring that Board procedures are followed. In addition, directors have access to independent professional advice in appropriate circumstances at the Company s expense in furtherance of their duties in accordance to procedure set by the Board. (B) Directors Remuneration Remuneration of Executive Directors The remuneration of the Executive Directors shall be reviewed and proposed by Executive Committee ( EXCO ) to the Remuneration Committee for their consideration and recommendation to the Board. Annual Bonus The Executive Directors shall be entitled to participate in the Company s annual cash bonus. The amount of bonus shall be proposed by the EXCO to the Remuneration Committee for their consideration and recommendation to the Board. Other benefits Executive Directors shall also be entitled to other benefits provided to employee of the Company and other additional benefits if so proposed by the EXCO to the Remuneration Committee for their consideration and recommendation to the Board. 17

19 WOODLANDOR HOLDINGS BERHAD ( D) CORPORATE GOVERNANCE STATEMENT Remuneration for Non-Executive Directors The remuneration of non-executive directors proposed by the EXCO is determined by the Board which comprises the following: Director Fee Meeting Allowance Other benefits Non-executive directors receive fees. The fees are to be determined and recommended by the Board and to be approved by shareholders. The non-executive directors of the Company will receive meeting allowance for attending Board Committee meetings and Board meetings. The meeting allowance is to be determined by the Board. The non-executive directors of the Company are also entitled to other benefits if so proposed by the EXCO for recommendation to the Board for decision. The Directors may be remunerated by a fixed sum (for Non-Executive Director) or by a percentage of profits (for Executive Directors) or otherwise as may be determined by the Board for the performance of extra services or to make any special exertions in going or residing away from his usual place of business or residence for any purpose of the Company or giving special attention to the business of the Company. Such remuneration may be either in addition to or in substitution for his or their share in the remuneration from time to time provided for the directors. Such remuneration would be proposed by the EXCO to the Remuneration Committee for their review, consideration and recommendation to the Board for decision. Aggregate remuneration of directors categorised into appropriate components and remuneration bands for the financial year ended 31 December 2016 are as follows: TABLE A Remuneration Component Executive Directors (RM) Non- Executive Directors (RM) Fees 48,000 72,000 Salaries & Allowances 1,232,560 NIL Bonuses 165,200 NIL Benefits In Kind 22,300 NIL Total 1,468,060 72,000 TABLE B Remuneration Component (RM) Executive Directors (Number of) Non- Executive Directors (Number of) Below 50,000 NIL 3 650, ,000 1 NIL 750, ,000 1 NIL Total 2 3 There were no directors whose total remuneration during the financial year ended 31 December 2016 falls within the bands of 50, ,000 and RM700, ,

20 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT (C) SHAREHOLDERS The Company has implemented a shareholder communications policy to ensure effective communication with its shareholders. Communication between the Company and its shareholders are done in the following manner:- (i) Dialogue between the Companies and Investors The Group recognises the importance of accountability to its shareholders through proper and timely dissemination of information on the Group s performance and major developments via appropriate channel of communication. Dissemination of information includes the distribution of the Annual Report and relevant circulars, issuance of press releases inclusive of quarterly financial performance of the Group to Bursa Securities and the public. In addition, the Group has established a website at which shareholders can access for information. (ii) Annual General Meeting ( AGM ) The AGM is a platform for the Board and shareholders to communicate on the Group s performance. At the AGM, shareholders are encouraged to seek clarification on any matters pertaining to the business and financial performance of the Group. Any item of special business included in the notice of the meeting will be accompanied by a full explanation of the effect of the proposed resolution which is then separately voted on. The shareholders are informed of their right to demand for poll prior to the commencement of each general meeting. (D) Sustainability Stakeholder Relations The Company will engage with stakeholders clearly, honestly and respectfully. The Company is committed to timely and meaningful dialogue with all stakeholders, including shareholders, customers, employees, governments, regulators and landowners, among others. Employee Relations The Company will ensure that employees are treated fairly and with dignity and consideration for their goals and aspirations and that diversity in the workplace is embraced. The Company is committed to providing equal opportunity in all aspects of employment and will not engage in or tolerate unlawful workplace conduct, including discrimination, intimidation, or harassment. Human Rights The Company recognises that governments have the primary responsibility to promote and protect human rights. The Company will work with governments and agencies to support and respect human rights within our sphere of influence. The Company will not tolerate human rights abuses, and will not engage or be complicit in any activity that solicits or encourages human rights abuse. The Company will always strive to build trust, deliver mutual advantage and demonstrate respect for human dignity and rights in all relationships it enters into, including respect for cultures, customs and values of individuals and groups. 19

21 WOODLANDOR HOLDINGS BERHAD ( D) CORPORATE GOVERNANCE STATEMENT (E) Accountability and Audit (i) Financial Reporting In presenting the annual financial statements and quarterly announcement of results to shareholders, the Board aims to present a balanced and understandable assessment of the Group s position and prospects. The Board also ensures that the Group used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgement and estimates. Subject to any explanation and material departures disclosed in the notes to the financial statements, all accounting standards which the Board considers to be applicable have been followed. The Audit Committee also assists the Board in ensuring accuracy and adequacy of information by reviewing and recommending for adoption such information for disclosure. (ii) Internal Control The Statement on Risk Management and Internal Control set out on page 23 of this Annual Report provides an overview of the System of Internal Control of the Group. (iii) Relationship with Auditors The Company has put in place the policies and procedures to assess the sustainability and independence of external auditors. The Audit Committee meets with the external auditor at least twice a year to discuss their audit plan, audit findings and the Company s financial statements. At least twice a year and whenever necessary, the Audit Committee shall meet with the external auditors without the present of executive Board members or management personnel, to allow the Audit Committee and the external auditor to communicate independently. The Audit Committee considered the provision of non-audit services provided by the external auditors during the financial year and concluded the provision of these services did not compromise the external auditors independence and objectivity as the amount of fees paid for these services were no significant as compared to the total fees paid to the external auditors. The role of the Audit Committee in relation to the external auditors is stated on pages 10 to 12 of this Annual Report. (F) Corporate Disclosure The Company has implemented a corporate disclosure policy to ensure accurate, clear, timely and complete disclosure of material information necessary for informed meeting and take reasonable steps to ensure that all who invest in the Company s securities enjoy equal access to such information to avoid an individual or selective disclosure. (G) Compliance with the Code The Board strives to ensure that the Company complies with the Principles and Best Practices of the Code. The Board will endeavour to improve and enhance the procedures from time to time to comply with the Best Practices of the Code. 20