The Board of Cymao Holdings Berhad recognises the importance in achieving high standard of corporate governance and observes the Principles and Best Practices as set out in the Malaysian Code on Corporate Governance (“the Code”). The Code is observed throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and financial performance of the Group.
It is a continuing task of the Board to evaluate the Group’s corporate governance practices and procedures with a view to adopt and implement the Best Practices of the Code in their operation towards achieving the optimal governance framework.
The statements below set out the manner in which the Company has applied the Principles of the Code (revised 2007) and the extend of compliance with the Best Practices of the good corporate governance as set in Part 1 and part 2 of the Code.
BOARD OF DIRECTORS
Board Composition and
Balance
The Group is led by an effective and experienced Board comprising of members drawn from a wide spectrum of experience in relevant fields such as production, engineering, economics, accounting, finance, marketing, management and business administration. Together they bring a broad range of skills, experience and knowledge required to successfully direct, supervise and manage the Group’s business, which are vital to the success of the Group and enhancement of long term shareholders’ value.
The Board currently has six (6) Directors, comprises of one (1) Independent Non-Executive Chairman, one (1) Managing Director, two (2) Executive Directors, and two (2) Non-Executive Directors, one (1) of whom is an independent director. The Board composition complies with Paragraph 15.02 of the Listing Requirements which requires that at least two (2) or one-third (1/3) of the Board Members, whichever is higher, to be Independent Directors.
The profiles of the members of the Board are set out on pages 5 to 7 of the Annual Report.
The Board Meetings are presided by the Chairman whose role is clearly separated from the role of the Managing Director to ensure a balance of power and authority.
The Executive Directors are responsible for implementing policies and decisions of the Board, overseeing operations as well as managing development and implementation of business and corporate strategies. The Non-Executive Directors are independent of management and free from any business relationship which could materially interfere with the exercise of their independent judgement and play an important role in ensuring that the strategies proposed by the management are objectively evaluated, thus provide a capable check and balance for the Executive Directors.
Board Meetings
The Board meets at least four (4) times a year which is scheduled at quarterly basis with additional meetings convened as necessary.
The Board held five (5) meetings during the financial year ended 31 December 2010. Details of the attendance of the Directors are disclosed on page 7 of the Annual Report.
Board Committee
The Board is assisted by the Audit Committee, the Nomination Committee and the Remuneration Committee in discharging its responsibilities and duties. Each Committee is operated within the defined terms of reference which have been approved by the Board. These Committees will address issues and risks that will affect the operation of the Group and to recommend measures to the Board on mitigate such risks.
(i) Audit Committee
The composition, terms of reference and activities of the Audit Committee are presented on pages 13 to 15 of the Annual Report.
(ii) Nomination Committee
The Nomination Committee at present is comprised of three (3) Non-Executive Directors, majority of whom are independent.
The Nomination Committee held one (1) meeting during the financial year ended 31 December 2010 to propose to the Board on re-election and re-appointment of retiring Directors, to review the mix of skills of the Board, to assess the effectiveness of the Board as a whole, its committees and the contribution of each individual Director.
(iii) Remuneration Committee
The Remuneration Committee is currently made up of three (3) Non-Executive Directors, a majority of whom are independent.
The primary duty of the Remuneration Committee is to review and recommend the remuneration packages of Executive Directors are sufficiently attractive to retain such persons of high caliber, drawing from outside advice, if necessary. The Board as a whole determines the remuneration of Non-Executive Directors, and each Director is not allow to participate in discussion of his/her own remuneration.
The Remuneration Committee met twice during the financial year ended 31 December 2010 to review the remuneration packages for Executive Directors and Non-Executive Directors.
Supply of Information
Notice of meetings, setting out the agenda and accompanied by the Board papers are given to all Directors prior to each Board Meeting to enable the Directors to peruse, obtain further information and/ or seek further clarification on the matters to be deliberated.
All information within the Group is accessible to the Directors in furtherance of their duties and every Director has unhindered access to the advice and services of the Company Secretary. They are also entitled to seek independent professional advice, where necessary and in appropriate circumstances at the Group’s expense.
Directors' Training
The Group acknowledges that continuous education is vital for the Board member to gain insight into the state of economy, technological advances, regulatory updates and management strategies. All Directors completed the Mandatory Accreditation Programme (MAP) conducted by Research Institute of Investment Analyst Malaysia (RIIAM) in compliance with the Listing Requirements.
During the financial year, the Directors attended seminars and training programmes accredited by Bursa Securities as part of their obligation to constantly stay update with current issues and changes which will assist them to discharge their duties effectively. Details of the training programme attended by the Board members are disclosed on page 7 of the Annual Report.
The Board will continue to evaluate and determine the training needed by the Directors from time to time to enhance their skills and knowledge, where relevant, and to keep abreast with the new regulatory development and Listing Requirements.
Re-election of Directors
In accordance with the Company’s Articles of Association, at least one-third (1/3) or nearest to one-third (1/3) of the Directors, shall retire by rotation at each annual general meeting provided that all Directors shall retire from office once in every three (3) years. The retiring Directors shall be eligible to offer themselves for re-election. Directors who are appointed to the Board during the financial year are subject to re-election by shareholders at the annual general meeting following their appointment.
A director who is over seventy (70) years of age is required to submit himself for re-appointment and reelection annually in accordance with Section 129(6) of the Companies Act, 1965.
Directors' Remuneration
The Directors’ remuneration is determined at level which enables the Company to attract and retain Directors with the relevant experience and expertise to assist in managing the Group effectively. The aggregate of remuneration received by the Directors from the Company and its subsidiaries for the financial year ended 31 December 2010, are categorized into appropriate components as disclosed under Note 10 of the Financial Statements on page 55 of the Annual Report.
SHAREHOLDERS AND INVESTORS
The Group always recognises the importance of communications with shareholders and investors. In this respect, the Group disseminates information to its shareholders and investors through its Annual Report, timely public announcement and the quarterly financial results released by the Company to the Bursa Securities will provide the shareholders and investors with an overview of the Group’s performances and operations.
The Board recognises the use of the Annual General Meeting as a principal forum for dialogue and to communicate with shareholders. Extraordinary General Meetings are held as and when required.
The Company has maintained a website at www.cymao.com for the access of shareholders and the general public to retrieve information of the Group. Investors and members of the public who wish channel queries on matters relating to the Group may email to info@cymao.com.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Directors are required by the Companies Act, 1965 to ensure that financial statements prepared for each financial year give a true and fair view of the state of affairs of the Company and the Group. The Directors consider the presentation of the financial statements and that the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates.
The Audit Committee assists the Board by scrutinizing the information to be disclosed, to ensure accuracy and adequacy. The Group’s financial statements are presented on page 21 to 80 of the Annual Report and the Directors’ Responsibilities Statement pursuant to Paragraph 15.27(a) of the Listing Requirements is set out on page 18 of the Annual Report.
Internal Control
The Board acknowledges their responsibility for the Group’s system of internal controls which cover not only financial controls but also controls in relation to operations, compliance and risk management. A Statement on Internal Control of the Company is set out on page 17 of the Annual Report.
Relationships with Auditors
The external auditors, on completion of their annual audit, express an opinion on the annual financial statements. The Board and the Audit Committee have established a formal and transparent relationship with the external auditors. The external auditors may from time to time throughout the financial year highlight to the Audit Committee and the Board on matters that require the Board’s attention.
