Corporate Governance
   
Statistics on
Shareholdings

Corporate Governance
Financial Performance

 

 
   
   
 

STATEMENT ON CORPORATE GOVERNANCE

 

The Board of Directors is pleased to report on the manner in which the Principles and Best Practices of Corporate Governance are applied and the extent of compliance therewith as set out in the Malaysian Code on Corporate Governance (“the Code”) pursuant to Paragraph 15.26 of the Listing Requirements of Bursa Malaysia Securities Berhad throughout the financial year ended 31 December 2008.

 

 

A.      A.         DIRECTORS

 

The Board

 

The Company is headed by a Board of Directors which leads the Company. At the date of this Annual Report, the Board has 6 members comprising a Chief Operating Officer (“COO”) cum Executive Director, 2 Executive Directors and 3 Non-Executive Directors (including the Chairman) all of whom are independent. Together the Directors have wide ranging business and financial experience.

 

There is clear distinction between the role of the Chairman, the COO cum Executive Director and the 2 Executive Directors. The Chairman is primarily responsible for the orderly conduct and effective running of the Board. The COO cum Executive Director has overall responsibility for the development and implementation of the Group’s broad strategies and plans as well as the Group’s business operations and organizational effectiveness. The 2 Executive Directors take charge of the management of the Group’s corporate and financial affairs, accounts and operations.

 

The Independent Non-Executive Directors fulfill an independent pivotal role in corporate accountability. They provide unbiased and independent views, advice and judgment in ensuring that the strategies proposed by the Management are fully discussed and examined taking into account the long term interest of not only the Group but also of all parties affected by the Group’s activities. Tan Sri Dato’ Nik Ibrahim Kamil, the Independent Non-Executive Chairman, assumes the role of Senior Independent Non-Executive Director.

 

The Board explicitly assumes the following specific responsibilities:-

  • Reviewing and adopting strategy plans for the Group;

  • Overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being properly managed;

  • Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;

  • Reviewing the adequacy and effectiveness of the Group’s internal control system and management information system including systems for compliance with applicable laws, standards, regulations, rules and guidelines;

  • Determining succession plans for Senior Management; and

  • Developing and implementing an appropriate investor relations programme or shareholders’ communication policy for the Company.

Board Meetings

 

The Board meets at least 5 times a year with additional meetings convened when necessary. Meetings are scheduled early in the year. Due notice is given for all scheduled meetings and additional meetings. Where appropriate, decisions are taken by way of circular resolutions during the period between the scheduled meetings.

 

During the financial year ended 31 December 2008, the Board held 5 meetings. The attendance of the Directors at the Board meetings held are as follows:-

 

Directors

No. of Board meetings attended

 

 Tan Sri Dato’ Nik Ibrahim Kamil

5/5

 Zakaria Merican Bin Osman Merican

5/5

 Mohd Harris Bin Pardi

5/5

 Fong Heng Leong

5/5

 Sak Swee Sang

5/5

 Dato’ Yusof Annuar Bin Yaacob*

Nil

 Karuppannan A/L Palaniappan**

Nil

 

         *   Vacated office on 1 January 2009

            ** Appointed to the Board subsequent to the financial year ended 31 December 2008

 

Supply of Information

 

Board papers are forwarded to all Board members in advance of each meeting. The agenda for each meeting are accompanied by the minutes of preceding meetings of the Board and Board Committees, reports on the Group’s financial performance and relevant proposal papers (if any).

 

In addition, the Board has a Schedule of Matters reserved specifically for its deliberation and decision which includes the approval of strategic plan, acquisitions or disposals of investments, major corporate proposals, annual and quarterly financial results, key financial and operating policies, significant capital or operating expenditures and related party transactions.

 

Senior Management staff as well as advisers and professionals appointed to act for the Company on corporate proposals to be undertaken by the Company are invited to attend Board meetings to furnish the Board with their views and explanations on proposals tabled to the Board and to provide clarification on issues that may be raised by any Director.

 

All information within the Group are accessible to the Directors in furtherance of their duties as Directors and all Directors have access to the services of the Company Secretary.

 

Should the need arise, each Director has the right at the Company’s expense to seek external independent legal and other professional advice concerning any aspect of the Group’s operations or undertakings in order to fulfill their duties and responsibilities as Directors of the Company.

 

Appointments to the Board and Re-election 

 

The Company has in place a formal procedure for the appointment of new Directors. All new candidates to the Board are first reviewed and considered by the Nomination Committee before making a recommendation to the Board for appointment.

 

The Company’s Articles of Association provide that all Directors shall retire from office once at least in each 2 years but shall be eligible for re-election. The Articles also provides that all newly appointed Directors shall hold office until the next Annual General Meeting and shall be eligible for re-election.

 

Directors’ Training and Education

 

On joining, all new Directors are given background information describing the Company and its activities. Site visits are arranged whenever necessary.

 

The Directors do attend and participate in programmes and forums, from time to time, relating to risk management, leadership and governance as well as changes to laws and regulations.

 

Directors’ Remuneration

 

The Remuneration Committee is entrusted with the role of recommending suitable policies in respect of salary packages for the Executive Directors. The current salary packages comprise a combination of basic salary and a variable performance incentive.

 

All Directors are paid a meeting allowance for attendance at each Board and Board Committee meetings. All Non-Executive Directors are paid Directors’ fees. These fees are recommended by the Remuneration Committee and submitted to the Board for endorsements. These Directors’ fees to be paid for any 1 year are submitted for shareholders’ approval at the Annual General Meeting.

 

The aggregate Directors’ remuneration paid to the Directors of the Company for the financial year ended 31 December 2008 are disclosed in the financial statements.

 

 

B.         BOARD COMMITTEES

 

The Board has delegated specific functions and responsibilities to 3 Board Committees, namely the Audit Committee, the Nomination Committee and the Remuneration Committee in discharging its duties. These Committees examine specific issues and report to the Board with their recommendations. The ultimate responsibility for decision making lies with the Board.  

 

Audit Committee

 

The Audit Committee currently comprises 3 Independent Non-Executive Directors. The terms of reference and a summary of the activities of the Audit Committee for the financial year ended 31 December 2008 are set out in the Audit Committee’s Report of the Annual Report 2008.

 

Nomination Committee and Remuneration Committee

 

The Nomination Committee is responsible for making recommendations to the Board on all new Board and Board Committee appointments.

 

The Remuneration Committee is responsible for recommending to the Board a framework of remuneration for the Directors and the Executive Directors which is submitted to the whole Board for endorsement. The Remuneration Committee reviews and approves recommendations on remuneration policies and packages for Directors in the interest of improved corporate performance.

 

   

C.         SHAREHOLDERS

 

Communication with Shareholders and Investors

 

The Company recognises the importance of communications with its shareholders. It achieves this by way of communication channels such as announcements through Bursa Malaysia Securities Berhad, circulars, press releases, Annual Reports as well as through its general meetings. Through such channels, the Company is able to provide an overview of the Group’s performance and operation and to disclose material information.

 

In addition, the Company has a website, www.ocbb.com.my which provides an avenue for information to shareholders and investors at large.

 

The Annual General Meeting (“AGM”) remains the principal forum for dialogue with shareholders where they are accorded the opportunity to raise questions on the agenda items of the AGM. The Chief Operating Officer and Executive Directors and where appropriate, the Chairman of the Board, are available to respond to shareholders’ queries during the Meeting.

 

 

D.      D.         Accountability and Audit

 

Financial Reporting

 

In presenting the quarterly and annual financial statements to shareholders and investors, the Board aims to present a balanced, clear and meaningful assessment of the Group’s financial position, performance and prospects.  The Audit Committee assists in reviewing the information disclosed to ensure accuracy and adequacy.

 

Internal Control System

 

The Board acknowledges its responsibilities for the Group’s system of internal control covering not only financial controls but also operational and compliance controls as well as risk management. The internal control system involves each business and key management from each business. It should be noted that the system can only provide reasonable, and not absolute, assurance against material misstatement or loss.

 

The Group engages an external independent firm of professionals to provide the Audit Committee and the Board independent and objective reports on the Group’s management, records, accounting policies and controls. The scope of its internal audit function includes evaluation of the processes by which risks are identified, assessed and managed and assurance that controls which are implemented are appropriate and can effectively address acceptable risk exposures. The internal audit also ensures that recommendations to improve controls are followed through by the Management.

 

Relationship with the External Auditors

 

The Board has established formal and transparent arrangements to maintain an objective and professional relationship with the Company’s External Auditors, Messrs SJ Grant Thornton, in seeking its professional advice and ensuring compliance by the Company with the applicable accounting standards in Malaysia as well as the auditors’ professional requirements.

 

Messrs SJ Grant Thornton reports to the shareholders of the Company on its opinion which are included as part of the Group’s financial reports with respect to their audit on each year’s statutory financial statements.