Rimbunan Sawit RIMBUNAN SAWIT BERHAD (691393-U)
Sustaining Wellness
ANNUAL REPORT 2014 Contents
2 Vision & Mission 3 Locations of Operations 4 Corporate Structure 5 Corporate Information 6 Financial Highlights 7 Chairman’s Statement 11 Managing Director’s Review of Operations 13 Profile of Directors 16 Statement on Corporate Governance 29 Report of the Audit Committee Statement on Risk Management 34 and Internal Control 37 Sustainability and Corporate Responsibility 43 Financial Statements Statements of Directors’ Responsibilities for 130 Preparing the Annual Financial Statements 131 Additional Compliance Information 134 List of Properties Owned by the Group 135 Analysis of Shareholdings 139 Notice of Annual General Meeting Form of Proxy Vision Mission
- To enhance To be a leading stakeholders’ values - To provide high quality agri-business & products and services to our customers plantation group - To provide job opportunities and lifelong learning LQ$VLD3DFLÀF opportunities at the workplace and local community
2 Annual Report 2014 LOCATIONS OF OPERATIONS
Annual Report 2014 3 CORPORATE STRUCTURE
100% R.H. Plantation Sdn Bhd
100% Timrest Sdn Bhd
100% Woodijaya Sdn Bhd
100% Jayamax Plantation Sdn Bhd
100% Rimbunan Sawit Holdings Midas Plantation Sdn Bhd 100% Sdn Bhd
100% Nescaya Palma Formasi Abadi Sdn Bhd 100% Sdn Bhd
100% Lumiera Enterprise Sdn Bhd
100% Novelpac-Puncakdana Plantation Sdn Bhd
100% RSB Palm Oil Mill Sdn Bhd RIMBUNAN SAWIT BERHAD
100% Rajang Builders Sdn Bhd
100% Rajang Agrisupplies Sdn Bhd
85% Burung Tiong Helicopter Sdn Bhd
85% Baram Trading Sdn Bhd
85% PJP Pelita Biawak Plantation Sdn Bhd
70% Pelita-Splendid Plantation Sdn Bhd
60% PJP Pelita Ekang-Banyok Plantation Sdn Bhd
60% PJP Pelita Lundu Plantation Sdn Bhd
60% PJP Pelita Selangau Plantation Sdn Bhd
60% PJP Pelita Ulu Teru Plantation Sdn Bhd 4 Annual Report 2014 CORPORATE INFORMATION
Share Registrar
Bong Wei Leong Symphony Share Registrars Sdn. Bhd. (Chairman / Independent Director) Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Tiong Kiong King Jalan PJU IA/46 (Non-Independent Non-Executive Director / 47301 Petaling Jaya Vice Chairman) Selangor Darul Ehsan Tel. No. : 03-78418000 Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King Fax No. : 03-78418152 (Executive Director)
Tiong Chiong Ong Auditors (Managing Director) Crowe Horwath (AF : 1018) Tiong Chiong Ie Chartered Accountants (Non-Independent Non-Executive Director) 1st Floor No.1 Lorong Pahlawan 7A2 Tiong Ing Ming Jalan Pahlawan (Independent Director) 96000 Sibu, Sarawak
Company Secretary Stock Exchange Listing
Voon Jan Moi (MAICSA 7021367) Listed on Main Market of Bursa Malaysia Securities Berhad Stock name : RSAWIT Stock code : 5113 5HJLVWHUHG2IÀFH
North Wing, Menara Rimbunan Hijau, Principal Bankers 101, Pusat Suria Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak. RHB Bank Berhad Tel. No. : 084-218555 Malayan Banking Berhad Fax No. : 084-219555 Bank of China (Malaysia) Berhad Hong Leong Bank Berhad CIMB Bank Berhad +HDG2IÀFH Public Bank Berhad Bank Pertanian Malaysia Berhad North Wing, Menara Rimbunan Hijau, AmBank (M) Berhad 101, Pusat Suria Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak. Tel. No. : 084-218555 Fax No. : 084-219555 E-mail address : [email protected]
Annual Report 2014 5 FINANCIAL HIGHLIGHTS
REVENUE PROFIT BEFORE TAX
RM’ million 100 RM’ million 95 400 90 360 350 80 77 314 291 70 300 282
60 250 239 50
200 40 31 150 30
20 100
10 (3) 7 50 0
-10- FY2010 FY2011 FY2012 FY2013 FY2014 FY2010 FY2011 FY2012 FY2013 FY2014 (16 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (16 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (12 MTHS)
SHAREHOLDERS’ FUND TOTAL ASSET RM’ million RM’ million
900 884 882 870 874 1,800 1,612 1,614 1,643 1,568 800 1,600
700 1,400 1,304
600 1,200
500 1,000 427
400 800
300 600
200 400
100 200
0 0 FY2010 FY2011 FY2012 FY2013 FY2014 FY2010 FY2011 FY2012 FY2013 FY2014 (16 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (16 MTHS) (12 MTHS) (12 MTHS) (12 MTHS) (12 MTHS)
6 Annual Report 2014 CHAIRMAN ‘S STATEMENT
Dear Shareholders, “On behalf of the Board of Directors of Rimbunan Sawit Berhad (“RSB” or “Company”) and its subsidiaries (“the Group”), I am pleased to present to you the Annual Report and the Audited Financial Statements for the financial year ended 31 December 2014.” Bong Wei Leong Chairman, Independent Director
FINANCIAL HIGHLIGHTS
The Group recorded a revenue of RM239.7 million in 2014 which represented a decrease of 15.1% as compared to 2013 of RM282.2 million. This was mainly due to the decline in the Group’s overall sales volume of Crude Palm Oil (“CPO”), in which 46,818 metric tonnes in 2014 as compared to 69,591 metric tonnes in 2013, and Palm Kernel (“PK”), in which 10,598 metric tonnes in 2014 as compared to 16,831 metric tonnes in 2013; despite the increased of average selling price per metric tonnes for both CPO and PK for 3.1% and 31.6%, respectively; from RM2,187 and RM1,228 in 2013 to RM2,256 and RM1,617 in 2014 respectively.
7KLVJHQWOHULVHLQWKHSULFHRIFRPPRGLWLHVZDVLQÁXHQFHG by the increased demand from the emerging economies in WKHÀUVWWZRTXDUWHUVRIWKH\HDU+RZHYHUWKHKLJKLQYHQWRU\ levels of world’s CPO had caused its prices to be traded EHORZ50IRUWKHVXEVHTXHQWTXDUWHUVLQWKHÀQDQFLDO year 2014. Despite the drop in the pricing of commodities QDPHO\SDOPRLOSULFH WKH*URXS·VUHFRUGHGDJURVVSURÀW margin of 19% in 2014, which represented an increase of 5.5% from 13.5% in 2013. The decrease in the production cost also FRQWULEXWHGWRWKHKLJKHUSURÀWPDUJLQRIDVFRPSDUHG to 2013. AnnualAnnAn ual ReReportporp t2t 220140144 7 CHAIRMAN’S STATEMENT (CONT’D)
DIVIDEND
7KH%RDUGGLGQRWUHFRPPHQGÀQDOGLYLGHQGWREHSDLG for the year ended 31 December 2014.
PLANTATION OPERATION REVIEW
In 2014, the Group’s oil palm planted area has increased to 57,182 hectares as compared to 54,659 hectares in 2013 whereas the production area was 39,122 (2014) hectares, an increase of 2,255 hectares from 2013 of 36,867 hectares. However, due to the lack of harvesters and unfavourable weather condition, it has caused the plunging in the production of fresh fruit bunch (FFB) to 436,584 metric tonnes in 2014 as compared to 479,480 metric tonnes in 2013.
The Group’s palm oil mill performance indicated unfavourable prospect in 2014. The productions of CPO was 43,937 metric tonnes and PK was 10,751 metric tonnes in 2014, representing a decrease of 34% and 35% respectively from 2013. To combat the mill aging factor, major overhaul in respective areas will be performed in 2015; following the operation of the Group’s new palm oil mill. We will refurbish the existing mill to improve overall throughput DQGRLOH[WUDFWLRQHIÀFLHQF\
With the introduction of many good agricultural and PDQDJHPHQW SUDFWLFHV LQ WKH SODQWDWLRQ ÀHOG VXFK DV HQKDQFHG IHUWLOL]HU DSSOLFDWLRQ WHFKQLTXH WLPHO\ URDG maintenance & gravelling, complete harvesting rounds, standard pruning, improved worker productivity and IUHTXHQWUHYLHZRIRSHUDWLRQFDQKHOSWRPDLQWDLQKLJK RSHUDWLRQVWDQGDUGDQGHIÀFLHQF\
In countering the ever rising production costs, the management team of the Group is actively exploring IHDVLEOH LQLWLDWLYHV LQ UDLVLQJ HIÀFLHQF\ DQG SURGXFWLYLW\ throughout our operations. With close collaboration and cooperation of all stakeholders in the operation chain WKURXJK HIÀFLHQW KXPDQ DQG UHVRXUFH PDQDJHPHQW the Group will sustain and progress with improved performance.
8 Annual Report 2014 CHAIRMAN’S STATEMENT (CONT’D)
Touche as consultants for the GST impact analysis and Abeam for the system changes, in order to adapt to the UHTXLUHPHQWVDQGEHLQJ*67FRPSOLDQW
Furthermore, the setup of proposed new palm oil mill SURMHFW LQ 0LUL KDG RIÀFLDOO\ FRPPHQFHG LQ PLG RI December 2013. The Group had spent much effort in revising the design of the mill’s structure as well as to apply enhanced materials in order to improve the XVHIXOOLIHWLPHHQVXUHLWVHIÀFLHQF\DQGWKURXJKSXWDQG keeping the environment green. The brand new, rugged, HIÀFLHQW DQG HQYLURQPHQWDO IULHQGO\ PLOO LV H[SHFWHG WR EH FRPSOHWHG DQG FRPPLVVLRQHG LQ WKLUG TXDUWHU RI 2015 barring unforeseen circumstances. Technology’s advancement has pushed the Group to re-evaluate our enterprise’s strategies, product and services. To be in line with globalisation, implementation of new technology throughout the Group will help achieving greater HIÀFLHQF\DQGSURGXFWLYLW\
7KH *URXS LV FRQÀGHQW WKDW WKH FRPSOHWLRQ DQG commissioning of the new palm oil mill will fuel business CORPORATE DEVELOPMENT growth for the Group in the foreseeable future.
In 2012, the Group introduced the usage of SAP (53 )LQDQFLDOV VROXWLRQ IRU DOO DVSHFWV RI ÀQDQFH DQG OUTLOOK AND PROSPECTS control, along with the SAP Material Management & Sales Distribution solutions with standardize process of The global economic outlook remains uncertain with procurement and sales. Upon completion, the Group the recent sharp fall in the global oil prices and this has was able to utilize the system to synchronize all recurring amid mounting evidence that global supplies are far processes, feeding to one master system. outstripping demand and has had a large impact on the oil and gas sector, resulting in falling share prices With the introduction of the synchronized system, it for major oil companies worldwide. These factors, allows the business to better respond to industry and combined with the spill over effects of expansionary environmental changes, better operational and monetary policies in some developed countries have strategic alignment, improved information access further fuelled the volatility in the major commodity and communication channels, improved productivity, prices and exchange rates. These have led to experts’ improvement in risk management and ultimately concern on the possibility of economic contraction in UHGXFLQJRSHUDWLRQDOFRVWV7KLVDOORZVWKHÁH[LELOLW\DQG China which will inevitably exert the downward pressure HIÀFLHQF\ RI WKH EXVLQHVV SURFHVVHV WR EH IHOW QRW RQO\ on the demand for the global edible oil consumption from the top down process but also vice versa. and the prices of the crude palm oil will be affected accordingly. With the implementation of the GST, effective 1st April 2015, the Group has engaged Messrs. Deloitte &
Annual Report 2014 9 CHAIRMAN’S STATEMENT (CONT’D)
OUTLOOK AND PROSPECTS (CONT’D) ACKNOWLEDGEMENTS
We nevertheless believe the CPO price will not vary VLJQLÀFDQWO\IURPWKHFXUUHQWOHYHOGHVSLWHWKHIDFWWKDW it may be affected by factors including the global production and consumption rates of vegetable oil, biodiesel usage, crude oil price, soya bean oil prices and macro-economic conditions. Nonetheless, palm oil product is expected to grow with the expanding global population.
The United States’ Department of Agriculture forecasts that the palm oil price is expected to improve although global oilseed crop will expand by a slower rate. Thus, this will lower the output of vegetable oils in which will sustain palm oil prices at a favourable position.
The Malaysian Government has announced the implementation of higher biodiesel mandate to B7, a 7% palm oil blending, which will see nationwide consumption of palm oil biodiesel increases to 575,000 tonnes. Implying to our Group, Fresh Fruit Bunches yield will improve as our palm trees are reaching maturity and soon to be in line with the national target to increase the yield by 25% by the year 2020. Apart from that, it will also lead to higher Oil Extraction Rate to around 20.5% due to EHWWHUTXDOLW\IUHVKIUXLWEXQFKHV It has been a very challenging year in 2014, with relatively ORZ &32 SULFHV HVSHFLDOO\ WRZDUG WKH ODVW TXDUWHU RI 'HVSLWHRXU\RXQJSODQWDWLRQSURÀOHZHDUHORRNLQJDW the year. The Group managed to record a positive possible alternatives for our plantations such as replanting performance and endeavour to stay competitive or such to ensure our growth. Best Agriculture Practices despite the weak commodities market. are enforced and with this, we are also not diverting away from our responsibility to all stakeholders which With great respect, on behalf of RSB, I would like to also include keeping ourselves close to new Researches express my deepest gratitude to fellow Board members and Developments on palm oil trees. A recent study by who have contributed greatly to the Group with their University Sains Malaysia reveals that palm trees upon invaluable expertise and experience. My heartiest reaching 25 years, when their oil extraction diminishes, appreciation goes to the Management and staff for can be converted to other means of products using sap their commitment and dedication throughout the Group from the palm tree trunks. This breakthrough gives us the and also to all our shareholders for their strong support. alternatives to further tap our existing palm trees after Not forgetting our customers, business associates and their prime and fully utilising them to the fullest and yet *RYHUQPHQW DXWKRULWLHV IRU WKHLU HIIHFWLYH DQG HIÀFLHQW being ecology friendly. contributions in assuring the Group’s smooth operation.
Bong Wei Leong Chairman
10 Annual Report 2014 MANAGING DIRECTOR’S REVIEW OF OPERATIONS
personnel to ensure that every palm tree is healthy, receives LWVTXRWDRIIHUWLOL]HUDQGLVIUHHIURPSHVWVDQGGLVHDVHV
This standardised procedure for harvesting, manuring, ZHHGLQJDQGÀHOGXSNHHSSOXVPDLQWHQDQFHZLOOIRFXVRQ WKHHIIHFWLYHQHVVDQGHIÀFLHQF\RIUHVRXUFHXWLOLVDWLRQDQG Tiong Chiong Ong optimum output. For the year 2015, the Group will initiate QHZKDUYHVWLQJPDQXULQJDQGÀHOGXSNHHSV\VWHPDVSDUW Managing Director of the continuous improvement programme. OIL PALM PLANTATION OPERATION $VSDUWRIWKHÀHOGXSNHHSWKHLQWHUURZVLQWKHRLOSDOPÀHOGV are encouraged to be covered with soft grasses for good During the year 2014, our Group, had developed 2,892 palm growth and better fresh fruit bunch yields. Biological hectares (“Ha”) of new area for oil palm plantation, while control by using cattle for grazing is the best method to the existing planted area has expanded by 5.3% from achieve this objective. Therefore, cattle integration project 54,659 Ha to 57,182 Ha, as compared to the preceding under government subsidy program, is also applied to some year. Besides that, the Group has started scout-harvesting of the Group’s estates. The Group has planned to increase on area of 2,255 ha and the production area has increased the grazing area next year, which are programmed for from 36,867 ha in 2013, to 39,122 ha in 2014. these cattle with a grazing ratio of approximately 100 herbs: 5 Ha per day. Unfortunately, due to lack of harvesters, high workers turnover and unfavourable weather condition, fresh fruit In addition, the Group also focuses on knowledge bunch (FFB) production during the year under review had management (K-Management) and has aimed to be one decreased by 18% to 436,584 metric tonnes, from 479,480 of the best learning organisations. Agronomists and other metric tonnes in the previous year. internal experts have conducted numerous training sessions in the estates, in order to transfer the know-hows to the The unfavourable weather condition, had also caused poor management, cadets and supervisors. This has enabled the TXDOLW\RI))%SURGXFWLRQGXHWRGHOD\HGHYDFXDWLRQ$VD estate management to have enhanced understanding on result, the Group’s milling activities recorded a decrease in the principles and technical knowledge in oil palm botany, oil extraction rate from 20.56% in 2013 to 20.03% in 2014, and QXUVHU\PDQDJHPHQWSODQWLQJÀHOGXSNHHSSDOPQXWULWLRQ in palm kernel extraction rate from 5.10% in 2013 to 4.91% in weed management, water level management, ablation, 2014, respectively. Whilst the Group’s palm oil mill produced pest and diseases, and harvesting. 43,937 metric tonnes of Crude Palm Oil (CPO) and 10,751 metric tonnes of Palm Kernel (PK) in 2014, which resulted in The Group has progressively developed its in-house a decrease of 34% and 35% respectively from the previous biotechnology and analytical lab for foliar and soil analysis. year. Besides that, the Group is also actively pursuing mitigation for pest and disease on oil palm. Several rounds of pest ,QWKH\HDURXURLOSDOPSODQWDWLRQ·VDJHSURÀOHLVDV elimination campaign were programmed and carried out. follows: Most common pests to oil palm are rat, termite, wild boar and caterpillar. In order to be an environment friendly Age Hectares company, biological control is introduced in some of the *URXS·VHVWDWHVVXFKDVSODQWLQJEHQHÀFLDOÁRZHU7XUQHUD )LUVW\HDURIÀHOGSODQWLQJ Subulata and Casia Cobanensis, for the purpose of reducing One year 4,595 chemical control usage. Two years 4,889 Three years and above 44,866 Apart from that, good road accessibility is always vital for the group plantation, especially for transportation of materials Total 57,182 and passage of workers. In 2014, road maintenance expenditures caused a substantial loss for the Group. In year Immature 18,060 2015, road maintenance is programmed to be completed Mature 39,122 within the 6 months of dry period for the year. Old farm tractors are still currently being used and will eventually Total 57,182 be replaced with lighter agricultural machines phase by SKDVHLQRUGHUWRDFKLHYHPRUHHFRQRPLFDODQGHIÀFLHQW Despite all that, the Group still emphasizes on complying with production cost. The Group has started categorising for the Good Agricultural Practise set by the Group Plantation DOO LWV ÁHHW ZKHUH PDFKLQHU\ JURXS RI WKH VDPH PRGHOV LV 2IÀFH WKURXJK VWULFW DQG WKRURXJK VXSHUYLVLRQ %\ QH[W arranged and managed under the allocated estates. year, the Group will introduce “self-monitoring system” as This is to improve the machinery maintenance so that the DQHZVXSHUYLVLRQWHFKQLTXH7KLVZLOOQXUWXUHDOORYHUVHHLQJ PHFKDQLFDODQGVSDUHSDUWVGHOLYHU\FDQEHPRUHHIÀFLHQW
Annual Report 2014 11 MANAGING DIRECTOR’S REVIEW OF OPERATIONS (CONT’D)
SULRU\HDU7KLV(53V\VWHPWREHVSHFLÀF6$3KDVRIIHUHG In striving for revenue maximisation and minimising of cost, real-time integrated business management solution that intensive measures have been undertaken by benchmarking HQDEOHV IXQFWLRQDOLW\ DFURVV DOO GHSDUWPHQWV DQG RIÀFH good agricultural and management practices. With locations to manage critical business functions including guidance from these practices, it is deemed to help the purchasing, sales & distribution, human resource and Group in achieving plantation’s optimum potential yield. ÀQDQFLDOV ² DOO WKHVH HQDEOHG WKH PDQDJHPHQW WR PDNH effective decisions instantly. PALM OIL MILL OPERATION In line with the implementation of SAP, secondary The RH Plantation Palm Oil Mill (RHPOM) in Miri, Sarawak, integration database programmes also have been initiated. LV 5LPEXQDQ 6DZLW %HUKDG·V ÀUVW FRQYHQWLRQDO PLOO ZKLFK These database programmes provide basic day-to-day has started operation in October 1998. The Group has operation data for further analysis by relevant departments. extended the mill’s capacity to 80 tonnes per hour (TPH), Already rolled out and implemented secondary database and thereafter its annual capacity to 360,000 tonnes of programmes are, Vehicle Tracking System and Dashboard. Fresh Fruit Bunch (FFB). Another important matter; RSB continues to sustain all its Clean technology is one of the main focus in mill operations, developed oil palm plantations on Native Customary in line with the Group values. Methane capture facility has Rights (“NCR”) land in Sarawak by bringing social and been introduced to reduce the greenhouse gas emission HFRQRPLFEHQHÀWVWRODQGRZQHUVDQGORFDOUHVLGHQWVZKR DQG WR LPSURYH ZDVWH ZDWHU WUHDWPHQW HIÀFLHQF\ E\ are from the indigenous community of Malaysia. capturing the resulting methane biogas; which then the biogas is recycled to Gas Engine for electricity generation. There were some new projects being initiated in 2014 among In addition, polishing plant has been setup to treat the mill the RSB Group of plantations. One being the construction of HIÁXHQWEHIRUHLWVÀQDOGLVFKDUJHWRULYHUVRWKDWWKHWUHDWHG mini township at Bakong Plantation Sdn Bhd, where general water meets and complies with the safety standard set by car parks, petrol station and commercial shop lots are being Department of Environment (DOE). built as part of the centralisation strategy in terms of people expertise and logistics. Furthermore, the Group plans to invest in organic composting plant to fully utilise the by-products such as the EFB, decanter For continuous learning and training objective, the new FDNHV DQG HIÁXHQW VOXGJH LH WR FRQYHUW WKH ZDVWHV LQWR generation is vital to RSB Group as we emphasise the value added products such as organic fertiliser for estates, importance of continuous growth for the Group; internally while creating an environmental friendly work stations. and externally, RSB offers On-the-Job Training Programme to school leavers. Here, they will receive priceless experience RHPOM continues to maintain and improve its technological and knowledge shared by estate managers and staff from OLQHHIÀFLHQFLHVLQRUGHUWRPD[LPLVHWKHWKURXJKSXWDQGWR WKHZKROHHVWDWHV8SRQFRPSOHWLRQWKH\ZLOOEHFHUWLÀHG minimise the oil seepage. ÀHOGFRQGXFWRUVDQGWKLVZLOOVROYHWKHSUREOHPRIVKRUWDJH of skilled workers; this also helps the Group in building a The Group’s new palm oil mill (RSB Palm Oil Mill) construction stronger relationship with the local communities. As for project commenced on 16th December 2013, and it is our present staff, our Agronomy Department is constantly now under mechanical erection and installation stage. The organising trainings on good agriculture practices, so they RSB Palm Oil Mill (60TPH) project is a complex that focuses KDYH VXIÀFLHQW NQRZOHGJH VNLOOV DQG H[SRVXUH LQ KDQGOLQJ RQ PD[LPXP RLO UHFRYHU\ ZLWK TXDOLW\ SURGXFWV FOHDQ WKHLU WDVNV HIÀFLHQWO\ $SDUW IURP WKDW 56% *URXS DOVR technology, user friendly and zero wastage management. works closely with Open University Institution in organising 7KHPLOOLVLQWHJUDWHGZLWKXQLTXHGHVLJQLQRLOSURFHVVLQJDQG leadership training programmes and corporate education. by-product handling process that differ from conventional mills. Besides that, EFB shredder, biogas plant and organic CONCLUSION composting plant are invested and included in the mill LQ RUGHU WR LQFUHDVH PLOO HIÀFLHQF\ DQG SURÀWDELOLW\ ZKLOH 2014 had been a year full of challenges and hardship. maintaining clean environment. This 100 million ringgit Moving forward, in the beginning of the year 2015, we have project is estimated to be ready for commissioning in the VKLIWHG WR RXU QHZ FRUSRUDWH RIÀFH LQ 0HQDUD 5LPEXQDQ WKLUGTXDUWHURI\HDUZLWKHIÀFLHQF\WRH[WUDFW))%DW Hijau. With the implementation of good practices in 60 tonnes per hour. agricultural activities, human resources management, ÁHHW PDQDJHPHQW DQG FRRSHUDWLRQ IURP DOO FRPSDQLHV DEVELOPMENT IN 2014 departments and parties in the organisation, the Group is FRQÀGHQW LQ RYHUFRPLQJ WKH FKDOOHQJLQJ PDUNHW DKHDG ,QWKHFRQWLQXDWLRQRISXUVXLQJLQWHJULW\DQGHIÀFLHQF\WKH and will continue to strive for higher performance. *URXS LV JUDGXDOO\ H[SDQGLQJ LWV EXVLQHVV DQG ÀQDQFLDO system with the invaluable support of an Enterprise Resource Tiong Chiong Ong Planning (ERP) System which has been implemented in the Managing Director
12 Annual Report 2014 PROFILE OF DIRECTORS
BONG WEI LEONG TTIONGIONG KIONG KING Aged 47 / Malaysian AgedAged 667 / Malaysian Chairman /Independent Non-INon-Independentn Director NoNon-Executiven-Ex Vice ChChairmanairm
Mr. Bong Wei Leong was appointed to the Board of Mr. Tiong Kiong King is a businessman and was Rimbunan Sawit Berhad (“RSB”) on 14 February 2006 and appointed to the Board of RSB on 14 February 2006. ZDVVXEVHTXHQWO\DSSRLQWHGDV&KDLUPDQRI56%RQ 6XEVHTXHQWO\KHZDVDSSRLQWHGDV1RQ,QGHSHQGHQW December 2012. Non-Executive Vice Chairman on 15 February 2006. He is also the Chairman of Remuneration Committee Mr. Bong Wei Leong is a businessman. He graduated with and members of Audit Committee and Nomination a Bachelor of Business (Accountancy) and Bachelor of Committee. Law from Queensland University of Technology, Australia in 1993. Mr. Tiong joined the RH Group in 1975 where he has held various positions including being a Director in one 0U%RQJZDVD3DUWQHURIDSXEOLFDFFRXQWDQWVÀUPSULRU (1) of the subsidiaries of RSB since December 1997. He to starting his own practice in 2004. He has more than has more than 44 years of managerial experience in 21 years of experience in providing auditing, accounting the timber industry in various capacities. and taxation services to various clients. Mr. Tiong also sits on the boards of Subur Tiasa Holdings He is a member of the Malaysian Institute of Accountants Berhad, a public listed company and several private and the CPA Australia. Mr. Bong also sits on the boards limited companies. Currently, Mr. Tiong also held of a public listed company, CCK Consolidated Holdings key posts in several non-government organizations. Berhad and one (1) of the subsidiaries of RSB. Amongst others, he is the Honorary President for Sibu Chinese Chamber of Commerce and Industry, Vice Mr. Bong is the Senior Independent Director to whom President of World Federation of Fuzhou Association concerns regarding the Company may be conveyed. Limited, Chairman of Persekutuan Persatuan-Persatuan Foochow Sarawak, Vice President of the World He is the Chairmen of Audit Committee and Nomination Zhang Clan Association Limited and Vice President of Committee. He is also a member of Remuneration Persekutuan Klan Zhang Negeri Sarawak. Committee. 0U7LRQJKDVDWWHQGHGDOOWKHÀYH %RDUGPHHWLQJV 'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHU0U KHOG GXULQJ WKH ÀQDQFLDO \HDU HQGHG 'HFHPEHU %RQJDWWHQGHGDOOWKHÀYH %RDUGPHHWLQJVKHOG+H 2014. His shareholdings in RSB Group as at 23 April 2015 holds no share in RSB Group. are disclosed on page 137 of this annual report.
Annual Report 2014 13 PROFILE OF DIRECTOR’S (CONT’D)
TANTAN SSRIR DATUK SIR DIONG HHIEWIEW KKING TIONGTIONG CHIONG ONG @ TTIONGION HIEW KING AgedAged 556 / Malaysian AgedAged 880 / Malaysian MManaginganag Director ExExecutiveecut Director
Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King was Mr. Tiong Chiong Ong is a businessman. He was appointed to appointed to the Board of Rimbunan Sawit Berhad (“RSB”) the Board of RSB on 14 February 2006 and was then appointed RQ )HEUXDU\ DQG ZDV VXEVHTXHQWO\ DSSRLQWHG DV as Managing Director of RSB on 15 February 2006. Executive Chairman on 15 February 2006. He was redesignated as Executive Director on 19 December 2012. Tan Sri Datuk Sir Tiong is a businessman with vast and extensive experience in Mr. Tiong graduated with a Bachelor of Law and Economics various business sectors including media and publishing, oil and from Monash University, Australia in 1984 and joined RH Group JDV PLQLQJ ÀVKHU\ PDQXIDFWXULQJ LQIRUPDWLRQ WHFKQRORJ\ in 1986. Mr. Tiong started his career as a chambering student timber, tree plantation, oil palm plantation and mills. and underwent chambering at Skrine and Co. in Kuala Over the years, Tan Sri Datuk Sir Tiong has started and built up the Lumpur for nine (9) months. He is a member of CPA Australia Rimbunan Hijau Group of Companies (“RH Group”). Currently, and is a member of the Victorian and Sarawak Bar and the he is the Executive Chairman and Managing Director of RH Malaysian Institute of Accountants. *URXSDODUJHGLYHUVLÀHGFRQJORPHUDWHZKLFKKDVLQWHUHVWVLQ various businesses in Malaysia comprising of timber harvesting, processing and manufacturing of timber products, plantations Mr. Tiong has more than 23 years of experience in various and other businesses around the world. capacities in the timber and plantation and industries. He is He is the founder of an English newspaper named The National in the Chairman of RSB Risk Management Committee. He also Papua New Guinea. He is currently the President of The Chinese holds directorship in several private limited companies. Language Press Institute Limited. In June 2009, he was bestowed the Knight Commander of the Most Excellent Order of the British Under his leadership, RSB was presented the 2012 Top Award Empire (K.B.E.), which carries the title “SIR”, by Queen Elizabeth for the Best Performing Stock in the Plantation Sector by the II of the United Kingdom, in recognition of his contribution to commerce, community and charitable organisations. EDGE Billion Ringgit Club, Malaysia. In 2010, he was awarded “Malaysia Business Leadership In 2013, Mr. Tiong was presented the IPD HRD Leadership Award 2010 - The Lifetime Achievement Award” by the Kuala Award by the Institute of Professional Development, Open Lumpur Malay Chamber of Commerce, in recognition of his entrepreneurship and his contribution to the country. Tan Sri Datuk University Malaysia in acknowledgement and in recognition Sir Tiong is the Executive Chairman of Sin Chew Media Corporation of his exemplary leadership and outstanding contribution to Berhad (“Sin Chew”), a wholly-owned subsidiary of Media Chinese the promotion of Human Capital Development efforts in the International Limited, a company listed in Malaysia and Hong plantation industry. Kong. He is also the Chairman of the Board of Trustee of Yayasan Sin Chew, and currently serves as the Executive Chairman of RH Petrogas Limited, a listed company in Singapore. He also serves as 'XULQJ WKH ÀQDQFLDO \HDU HQGHG 'HFHPEHU 0U a director of other private limited companies. 7LRQJKDVDWWHQGHGDOOWKHÀYH %RDUGPHHWLQJVKHOG+LV shareholdings in RSB Group as at 23 April 2015 are disclosed 'XULQJ WKH ÀQDQFLDO \HDU HQGHG 'HFHPEHU 7DQ 6UL 'DWXN6LU7LRQJDWWHQGHGWKUHH RXWRIÀYH %RDUGPHHWLQJV on page 137 of this annual report. held. His shareholdings in RSB Group as at 23 April 2015 are disclosed on page 137 of this annual report.
14 Annual Report 2014 PROFILE OF DIRECTORS (CONT’D)
TIONGTIONG CHIONG IE TIONG ING MING AgedAged 44 / Malaysian Aged 57 / Malaysian Non-Non-IndependentI Independent Director NNon-executiveon-e Director
Mr. Tiong Chiong Ie, a businessman, was appointed to 0U7LRQJ,QJ0LQJLVDUHJLVWHUHGTXDQWLW\VXUYH\RURIWKH the Board of RSB on 14 February 2006. He graduated Board of Quantity Surveyors, Malaysia and a member of with a Bachelor of Business in Information System from the Institution of Surveyors Malaysia. He was appointed Monash University, Australia in 1994. to the Board of RSB on 14 February 2006.
Mr. Tiong joined the RH Group in 1996 and has more He graduated with a Bachelor of Building (Hons) from than 19 years of managerial experience in the timber, University of Melbourne, Australia in 1982 and began his transportation provider and shipping industry. He is also a FDUHHULQDFRQVXOWLQJTXDQWLW\VXUYH\LQJSUDFWLFHVLQFH member of Remuneration Committee. 1994. Mr. Tiong is members of Audit and Nomination Committees. He also sits on the board of Subur Tiasa Mr. Tiong holds directorships in Hornbilland Berhad Holdings Berhad. and several private limited companies. Mr. Tiong has DWWHQGHG WKUHH RXW RI ÀYH %RDUG PHHWLQJV KHOG 0U 7LRQJ KDV DWWHQGHG DOO WKH ÀYH %RDUG PHHWLQJV GXULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHU KHOGGXULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHU His shareholdings in RSB Group as at 23 April 2015 are His shareholdings in RSB Group as at 23 April 2015 are disclosed on page 137 of this annual report. disclosed on page 137 of this annual report.
Notes: a) Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King and Tiong Kiong King are brothers and is the father and uncle of Tiong Chiong Ong respectively. Both Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King and Tiong Kiong King, and Tiong Chiong Ong are the uncles and cousin of Tiong Chiong Ie respectively. Apart from these, the other Directors have no family relationship with each other or the major shareholders of RSB. b) None of the Directors have been convicted of offences within the past 10 years.
F 1RQHRIWKH'LUHFWRUVKDVDQ\FRQÁLFWRILQWHUHVWVZLWKWKH&RPSDQ\
Annual Report 2014 15 CORPORATE GOVERNANCE STATEMENT
INTRODUCTION
The Board of Directors (“Board”) of Rimbunan Sawit Berhad (“RSB” or “the Company”) recognises Corporate Governance as being vital and important to the success of RSB and its Group of Companies (“Group”) business. They are unreservedly committed to applying the principles necessary to ensure that the principles of good governance are practised in all of its business dealings in respect of its shareholders and relevant stakeholders.
This Corporate Governance Statement sets out how the Company has applied the eight (8) Principles as outlined in WKH&RGHDQGREVHUYHGWKH5HFRPPHQGDWLRQVVXSSRUWLQJWKH3ULQFLSOHVLQUHVSHFWRIWKHÀQDQFLDO\HDUHQGHG 'HFHPEHU:KHUHDVSHFLÀF5HFRPPHQGDWLRQRIWKH&RGHKDVQRWEHHQREVHUYHGGXULQJWKHÀQDQFLDO\HDU under review, the non-observation, including the reasons thereof and, where appropriate, the alternative practice, if any, is mentioned in this Statement.
1. Establish clear roles and responsibilities of the Board and Management
All Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and that the principles and practices of good Corporate Governance are applied in all their dealings in respect, and on behalf of the Company.
7KH%RDUGKDVDVVXPHGWKHIROORZLQJSULQFLSDOUHVSRQVLELOLWLHVLQGLVFKDUJLQJLWVÀGXFLDU\DQGOHDGHUVKLSIXQFWLRQV
(a) reviewing and adopting a strategic plan for the Company, including the sustainability of the Group’s businesses;
(b) overseeing the conduct of the Group’s businesses and assessing whether the businesses are being properly managed;
(c) identifying principal business risks of all aspects of the Group’s business and ensure the implementation of appropriate internal controls system and mitigating measures to effectively monitor and manage the risks;
G HQVXULQJWKDWDOOFDQGLGDWHVDSSRLQWHGWRVHQLRUPDQDJHPHQWSRVLWLRQVDUHRIVXIÀFLHQWFDOLEHUDQGWKHUHDUH programmes in place to provide for the orderly succession of senior management;
(e) overseeing the development and implementation of a shareholder communications policy; and
I UHYLHZLQJWKHDGHTXDF\DQGWKHLQWHJULW\RIWKHPDQDJHPHQWLQIRUPDWLRQDQGLQWHUQDOFRQWUROV\VWHPVRIWKH Group.
To assist in the discharge its responsibilities and facilitating its ongoing oversight of the Group, the Board has established Board Committees, namely the Audit Committee, Nomination Committee, Remuneration Committee DQG 5LVN 0DQDJHPHQW &RPPLWWHH WR H[DPLQH VSHFLÀF LVVXHV ZLWKLQ WKHLU UHVSHFWLYH WHUPV RI UHIHUHQFH DV approved by the Board and report to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.
16 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
1. Establish clear roles and responsibilities of the Board and Management (cont’d)
(i) Board Charter
To enhance accountability, the Board has established clear functions reserved for the Board and those delegated to Management. There is a formal schedule of matters reserved to the Board for its deliberation and decision to ensure the direction and control of the Company are in its hands. Generally, key matters UHVHUYHGIRUWKH%RDUGLQFOXGHLQWHUDOLDWKHDSSURYDORIDQQXDOEXGJHWVDQGVWUDWHJLFSODQTXDUWHUO\DQG DQQXDOÀQDQFLDOVWDWHPHQWVIRUDQQRXQFHPHQWPDMRULQYHVWPHQWDQGGLYHVWLWXUHPRQLWRULQJRIWKH*URXS·V ÀQDQFLDODQGRSHUDWLQJSHUIRUPDQFHLQFOXGLQJLQWHUQDOFRQWUROV\VWHPVULVNPDQDJHPHQWDQGRYHUVHHLQJ of policies. Such delineation of roles is clearly set out in the Board Charter (“the Charter”), which serves as a reference point for Board activities. The Charter provides guidance for Directors and Management regarding WKHUROHVDQGUHVSRQVLELOLWLHVRIWKH%RDUG&KDLUPDQLWV&RPPLWWHHVDQG0DQDJHPHQWWKHUHTXLUHPHQWVRI Directors in carrying out their stewardship role and in discharging their duties towards the Company as well as boardroom activities. The Charter is made available on the Company’s website www.rsb.com.my to be in line with Recommendation 1.7 of the Code and will be periodically reviewed and updated to ensure it remains consistent with the Board’s objective and responsibilities.
The Board is committed to conducting its business in accordance with the upmost standards of business ethics and complying with the law, rules and regulations. The Directors are mindful that a strong business HWKLFVDQGHIIHFWLYHDQGHIÀFLHQWPRQLWRULQJV\VWHPZLOOSURPRWHDQHWKLFDOFRUSRUDWHFOLPDWHLQIRVWHULQJ an excellent culture of corporate governance. The Board is guided by the Directors’ Code of Conduct in GLVFKDUJLQJLWVRYHUVLJKWUROHHIIHFWLYHO\7KH&RGHRI&RQGXFWUHTXLUHVDOO'LUHFWRUVWRREVHUYHKLJKHWKLFDO business standards, honesty and integrity and to apply these values to all aspects of the Group’s business and professional practice and act in good faith in the best interests of the Group and its shareholders. This Code of Conduct is also made available on the Company’s website.
The Board also encourages its employees and associates to raise genuine concerns about possible improprieties LQPDWWHUVRIÀQDQFLDOUHSRUWLQJFRPSOLDQFHVXVSHFWHGYLRODWLRQVRIWKH*URXS·V&RGHRI&RQGXFWDQGWR disclose any improper conduct or other malpractices within the Group in an appropriate way.
The Whistleblowing Policy adopted by the Company provides and facilitates a mechanism for any employee and associate to report concerns about any suspected and/or known misconduct, wrongdoings, corruption, fraud, waste and/or abuse.
The Group Managing Director is the conduit between the Board and the Management in ensuring the success of the Company’s governance and management functions. The Group Managing Director implements the policies, strategies and decisions adopted by the Board. All Board authorities conferred on the Management is delegated through the Group Managing Director and this will be considered as the Group Managing Director’s authority and accountability as far as the Board is concerned.
(ii) Sustainability of Business
The Board is mindful of the importance of business sustainability and, in conducting the Group’s business, the impact on the environmental, social and governance aspects is taken into consideration. The Group also embraces sustainability in its operations and supply chain, through its own actions as well as in partnership with its stakeholders, including suppliers, customers and other organizations. Company’s strategies on promoting sustainability has been formulated and documented.
7KH*URXS·VDFWLYLWLHVWRSURPRWHVXVWDLQDELOLW\GXULQJWKHÀQDQFLDO\HDUXQGHUUHYLHZDUHDOVRGLVFORVHGRQ pages 37 to 42 of this Annual Report.
Annual Report 2014 17 CORPORATE GOVERNANCE STATEMENT (CONT’D)
1. Establish clear roles and responsibilities of the Board and Management (cont’d)
(iii) Access to Information and Advice
Procedures to allow Directors to access to information and advice is in place. Directors are supplied with UHOHYDQW LQIRUPDWLRQ DQG UHSRUWV RQ ÀQDQFLDO RSHUDWLRQDO FRUSRUDWH UHJXODWRU\ EXVLQHVV GHYHORSPHQW and audit matters for decisions to be made on an informed basis and effective discharge of the Board’s responsibilities.
All Directors are provided with the performance and progress reports on a timely basis prior to the scheduled Board and Board Committee meetings, to facilitate decision making by the Board and to deal with matters arising from such meetings. Senior Management of the Group and external advisers are invited to attend %RDUGPHHWLQJVWRSURYLGHDGGLWLRQDOLQVLJKWVDQGSURIHVVLRQDOYLHZVDGYLFHDQGH[SODQDWLRQVRQVSHFLÀF items on the meeting agenda. Besides direct access to Management, Directors may obtain independent professional advice at the Company’s expense, if considered necessary, in accordance with established procedures as set out in the Board Charter in furtherance of their duties.
Directors have unrestricted access to the advice and services of the Company Secretary to enable them to discharge their duties effectively. The Board is regularly updated and advised by the Company Secretaries ZKRDUHTXDOLÀHGH[SHULHQFHGDQGFRPSHWHQWRQVWDWXWRU\DQGUHJXODWRU\UHTXLUHPHQWVDQGWKHUHVXOWDQW implications of any changes therein to the Company and Directors in relation to their duties and responsibilities.
(iv) Company Secretary
7KH&RPSDQ\6HFUHWDU\LVDTXDOLÀHGVHFUHWDU\DVUHTXLUHGSXUVXDQWWRWKH0DOD\VLDQ&RPSDQLHV$FW The Company Secretary is the member of the Malaysian Association of Institute of Chartered Secretaries and Administrators (MAICSA). She is competent in carrying out her work and plays supporting and advisory UROHVWRWKH%RDUGDQGWKH*URXSRQLVVXHUHODWLQJWRFRPSOLDQFHZLWKODZVDQGUHTXLUHPHQWVDVZHOODVWKH Code of Corporate Governance. She ensures adherence and compliance to the procedures and regulatory UHTXLUHPHQWVIURPWLPHWRWLPH6KHDOVRHQVXUHVWKDWPHHWLQJVDUHSURSHUO\FRQYHQHGDQGGHOLEHUDWLRQVDW PHHWLQJVDUHDFFXUDWHO\DQGVXIÀFLHQWO\FDSWXUHGDQGPLQXWHGPLQXWHVDQGVWDWXWRU\UHFRUGVDUHSURSHUO\ kept and updated.
2. Strengthen Composition of the Board
'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKH%RDUGKDVVL[ PHPEHUVFRPSULVLQJWZR ,QGHSHQGHQW Directors, two (2) Non-Independent Non-Executive Directors, one (1) Executive Director and one (1) Managing Director.
7RJHWKHUWKH'LUHFWRUVKDYHDZLGHUDQJHRIH[SHULHQFHLQUHOHYDQWÀHOGVUHTXLUHGWRVXFFHVVIXOO\GLUHFWDQG supervise the RSB Group’s business activities. The current mix of skills and experiences are vital for the effectiveness RIWKH%RDUGDQGWKHVXFFHVVRIWKH*URXS7KHSURÀOHVRIHDFK'LUHFWRUDUHSUHVHQWHGRQSDJHVWRRIWKLV annual report.
18 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
2. Strengthen Composition of the Board (cont’d)
The following Board Committees have been established to assist the Board in discharging its duties:
i) Audit Committee
The Audit Committee, formed on 2 March 2006, reviews issues of accounting policy and presentation for H[WHUQDOÀQDQFLDOUHSRUWLQJDVVHVVWKHVXLWDELOLW\DQGLQGHSHQGHQFHRIH[WHUQDODXGLWRUVPRQLWRUVWKHZRUNRI the in-house internal auditors, ensures that an objective and professional relationship is maintained with the H[WHUQDODXGLWRUVDQGWKDWFRQÁLFWVRILQWHUHVWVDUHDYRLGHG
Further details can be found in the Report of the Audit Committee as set out on pages 29 to 33 of this annual report.
ii) Nomination Committee
The Board has on 7 April 2006 set up a Nomination Committee. The members of the Nomination Committee, all of whom are non-executive Directors and a majority of whom are independent, are as follows:
Chairman : Bong Wei Leong (Senior Independent Director) Members : Tiong Kiong King (Non-Independent Non-Executive Vice Chairman) Tiong Ing Ming (Independent Director)
The Board has adopted terms of reference for the Nomination Committee, which cover, inter-alia, selecting, assessing and recommending to the Board the candidature of Directors, appointment of Directors to Board &RPPLWWHHV UHYLHZ DQQXDOO\ WKH UHTXLUHG PL[ RI VNLOOV LQWHJULW\ WLPH FRPPLWPHQW H[SHULHQFH DQG RWKHU TXDOLWLHVRIWKH%RDUGLQFOXGLQJFRUHFRPSHWHQFLHVZKLFKWKH'LUHFWRUVVKRXOGEULQJWRWKH%RDUGDQQXDO assessment of the independent directors, reviewing of succession plans for the Board and senior management, formalising the policies for Board and workforce diversity and reviewing the training needs for Directors.
The Board has yet to adopt gender and workforce diversity policy and targets. Nevertheless, the Board will continue to monitor and review the Board size and composition from time to time and ensure that women candidates are sought in the recruitment exercise. The evaluation of candidates’ suitability is solely based on their competency, character, time commitment, integrity, contribution and experience in meeting the needs of the Company, including, where appropriate, the ability of the candidates to act as Independent Directors, as the case may be. The Board will consider the diversity policy for the workforce.
7KH1RPLQDWLRQ&RPPLWWHHZLOOUHFRPPHQGFDQGLGDWHVIRUDOOGLUHFWRUVKLSVWREHÀOOHGWRWKH%RDUGZKLFK involves selection and assessment of candidates for directorships proposed by the Group Managing Director and within the bounds of practicality, by any other senior executive or any director or shareholder, interviewing or meeting up with candidates, deliberation by the Nomination Committee and recommendations by the Nomination Committee to the Board.
In reviewing and recommending to the Board any new Director appointments, the Nomination Committee considers:
(a) the candidate’s independence, in the case of the appointment of an Independent Director; E WKH FRPSRVLWLRQ UHTXLUHPHQWV IRU WKH %RDUG DQG &RPPLWWHHV LI WKH FDQGLGDWH LV SURSRVHG WR EH appointed to any of the Board Committees); (c) the candidate’s age, credentials, skills, knowledge, expertise, experience, professionalism, integrity, capabilities and such other relevant factors as may be determined by the Nomination Committee which would contribute to the Board’s collective skills; and (d) any competing time commitments, if the candidate has multiple board representations.
Annual Report 2014 19 CORPORATE GOVERNANCE STATEMENT (CONT’D)
2. Strengthen Composition of the Board (cont’d)
ii) Nomination Committee (cont’d)
The new Directors will undergo an induction programme, which includes vision and mission of the Company, corporate strategy, visits to the RSB Group’s business, and meetings with Senior Management, as appropriate, to facilitate the new Directors’ understanding of the RSB Group. The Company Secretary will ensure that all appointments of new Director are properly carried out and all legal and regulatory obligations are met.
The Board through the Nomination Committee conducted an annual assessment of the performance of the Board, as a whole, Board Committees and individual Directors, based on a self-assessment and peer approach. )URPWKHUHVXOWVRIWKHDVVHVVPHQWLQFOXGLQJWKHPL[RIVNLOOVH[SHULHQFHDQGRWKHUTXDOLWLHVSRVVHVVHGE\ Directors, the Board considered and approved the recommendations made by the Nomination Committee on the re-election and re-appointment of Directors at the Company’s forthcoming Annual General Meeting. The Nomination Committee shall assess the independence of all Independent Directors annually and report to the Board. All assessments and evaluations carried out by the Nomination Committee in the discharge of all its functions shall be properly documented.
The Nomination Committee has developed criteria for use in the recruitment and annual assessment of Directors. In evaluating the suitability of candidates, the Nomination Committee considers, inter-alia, the competency, experience, commitment (including time commitment), contribution and integrity of the candidates, and additionally in the case of candidates proposed for appointment as Independent Directors, the candidates’ independence.
'XULQJ WKH ÀQDQFLDO \HDU HQGHG 'HFHPEHU WKH 1RPLQDWLRQ &RPPLWWHH XSRQ LWV DQQXDO UHYLHZ FDUULHGRXWLVVDWLVÀHGWKDWWKHVL]HDQGFRPSRVLWLRQRIWKH%RDUGLVRSWLPXPDQGFRQGXFLYHWRHIIHFWLYH discussion and decision making. There is appropriate mix of skills, experience and core competencies in the composition of the Board and that the Board has an appropriate number of Independent Directors. The 1RPLQDWLRQ&RPPLWWHHLVDOVRVDWLVÀHGWKDWDOOWKHPHPEHUVRIWKH%RDUGDUHVXLWDEO\TXDOLÀHGWRKROGWKHLU SRVLWLRQVDV'LUHFWRUVRIWKH&RPSDQ\LQYLHZRIWKHLUUHVSHFWLYHDFDGHPLFDQGSURIHVVLRQDOTXDOLÀFDWLRQV JRRGFKDUDFWHUH[SHULHQFHLQWHJULW\FRUHFRPSHWHQFLHVDQGTXDOLWLHVDVZHOODVWKHLUWLPHGHYRWHGDQG committed to discharge their roles.
The Nomination Committee recognizes the importance of the roles the Nomination Committee plays not only in the selection and assessment of Directors but also in other aspects of corporate governance which the 1RPLQDWLRQ&RPPLWWHHFDQDVVLVWWKH%RDUGWRGLVFKDUJHLWVÀGXFLDU\DQGOHDGHUVKLSIXQFWLRQV
'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKH1RPLQDWLRQ&RPPLWWHHKDVPHWRQFH
iii) Remuneration Committee
The Remuneration Committee was established on 7 April 2006 and is principally responsible for setting the remuneration structure and policy for Executive Directors and recommending to the Board the remuneration of Directors so as to ensure that the Company is able to attract and retain its Directors needed to run the Group successfully. The components of Directors’ remuneration are structured so as to link rewards to corporate and individual performance in the case of Executive Directors. In the case of Independent Directors, the level of UHPXQHUDWLRQUHÁHFWVWKHH[SHULHQFHDQGOHYHORIUHVSRQVLELOLWLHVXQGHUWDNHQE\WKHLQGLYLGXDO,QGHSHQGHQW Director concerned.
The members of the Remuneration Committee, the majority of whom are non-executive, are as follows:
Chairman : Tiong Kiong King (Non-Independent Non-Executive Vice Chairman) Members : Tiong Chiong Ie (Non-Independent Non-Executive Director) Bong Wei Leong (Independent Director)
20 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
2. Strengthen Composition of the Board (cont’d)
iii) Remuneration Committee (cont’d)
The Board has adopted the Directors’ Remuneration Policies and Procedures, summarised as follows:
D 7KH&RPSDQ\DLPVWRVHWUHPXQHUDWLRQDWOHYHOVZKLFKDUHVXIÀFLHQWWRDWWUDFWDQGUHWDLQWKH'LUHFWRUV needed to run the Company successfully, taking into consideration all relevant factors including the function, workload and responsibilities involved, but without paying more than is necessary to achieve this goal. (b) The level of remuneration for the Group Managing Director (“GMD”) and Executive Directors are determined by the Remuneration Committee after giving due consideration to the compensation levels for comparable positions among other similar Malaysian public listed companies. (c) No Director other than the GMD and Executive Directors shall have a service contract with the Company.
7KH5HPXQHUDWLRQ&RPPLWWHHKDVPHWRQFHGXULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHU
56% UHFRJQLVHV WKH QHHG WR HQVXUH WKDW UHPXQHUDWLRQ RI 'LUHFWRUV LV DSSUHFLDWLYH DQG UHÁHFWLYH RI WKH responsibility and commitment that goes with Board membership. The Remuneration Committee recommends to the Board the remuneration package of the Directors. The fees for Non-Executive Directors are determined by the Board as a whole. Each individual Director abstained from the Board discussion and decision on his RZQUHPXQHUDWLRQ7KHUHPXQHUDWLRQSDFNDJHLVGHWHUPLQHGLQDFFRUGDQFHWRIDLUDQGHTXLWDEOHFULWHULD based on the performance of the Directors and the Directors’ Remuneration Policies and Procedures.
The Board is of the opinion that matters pertaining to Directors’ remuneration are of a personal nature. +RZHYHU LQ FRPSOLDQFH ZLWK WKH 0DLQ 0DUNHW /LVWLQJ 5HTXLUHPHQWV RI %XUVD 0DOD\VLD 6HFXULWLHV %HUKDG ´/LVWLQJ5HTXLUHPHQWµ WKHUHPXQHUDWLRQRI56%·V'LUHFWRUVIRUWKHÀQDQFLDO\HDUHQGHG'HFHPEHU in aggregate and analysed into bands of RM50,000, were as follows:
Executive Directors Non-Executive Directors (RM) (RM)
Fee 57,600 225,600 Salary 2,160,000 - Bonus 540,000 - Allowances 1,600 7,000 'HÀQHGFRQWULEXWLRQUHWLUHPHQWSODQ %HQHÀWVLQNLQG
Executive Directors Non-Executive Directors (No.) (No.)
RM1,550,000 to RM1,600,000 1 - RM1,350,000 to RM1,400,000 1 - RM100,001 to RM150,000 - 1 RM50,000 and below - 3
iv) Risk Management Committee
7KH 5LVN 0DQDJHPHQW &RPPLWWHH DVVLVWV WKH %RDUG LQ IXOÀOOLQJ LWV FRUSRUDWH JRYHUQDQFH UHVSRQVLELOLWLHV E\ monitoring, managing and mitigating the risks associated with the RSB Group’s business with a view to the long WHUPYLDELOLW\RIWKH56%*URXS'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKH5LVN0DQDJHPHQW Committee has met four (4) times.
Annual Report 2014 21 CORPORATE GOVERNANCE STATEMENT (CONT’D)
2. Strengthen Composition of the Board (cont’d)
iv) Risk Management Committee (cont’d)
The composition of the Risk Management Committee are as follows:
Chairman : Tiong Chiong Ong Members : Robert Ling Tong Ung Syed Abdullah bin Syd. Hashim Chan Geh Ming Setia ak Uliek Timothy Tiong Ing Zun
The main features of the risk management framework are as follows:
D 7RLGHQWLI\DQGPDQDJHWKHSULQFLSDOULVNVUHODWLQJWRWKHREMHFWLYHV5LVNVDUHGHÀQHGDVDQ\HYHQWWKDW can impede RSB’s ability to achieve its objectives; E 7RGHFLGHRQKRZWRGHDOZLWKWKHULVNVLGHQWLÀHGZKHWKHUWRDFFHSWUHGXFHDYRLGRUWUDQVIHUWKHULVN (c) To enforce and monitor closely all the control measures to ensure compliance by the respective estate management; (d) To conduct periodic review of the progress and communicate material risks to the Board via the Audit and Risk Management Committee; (e) To maximize yield per hectare; I 7RLPSURYHSURGXFWLRQFRVWHIÀFLHQFLHV (g) To ensure that human resource are trained, disciplined and dedicated; (h) To ensure compliance of provisions under Occupational, Health & Safety Act/Pesticide Acts as well as 'HSDUWPHQWRI(QYLURQPHQWUHTXLUHPHQW DQG (i) To manage fraud risk.
3. Reinforce Independence of the Board
The Board recognises the importance of ensuring a balance of power and authority between the Chairman and the Group Managing Director with a clear division of responsibility between the running of the Board and the Company’s business respectively. The positions of Chairman (i.e. Non-Executive Chairman) and Group Managing 'LUHFWRUDUHVHSDUDWHGDQGFOHDUO\GHÀQHG
7KH %RDUG FRQVLVWV RI TXDOLÀHG LQGLYLGXDOV ZLWK GLYHUVH H[SHULHQFHV EDFNJURXQGV DQG SHUVSHFWLYHV 7KH composition and size of the Board is such that it facilitates the making of informed and critical decisions.
)RUWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKHSRVLWLRQVRI&KDLUPDQDQG&KLHI([HFXWLYH2IÀFHURIWKH Company are held by an Independent Director and Managing Director respectively. Their roles and responsibilities DUHVHWRXWLQWKH%RDUG&KDUWHU7KH%RDUGLVRIWKHYLHZWKDWWKHFRPSRVLWLRQRI,QGHSHQGHQW'LUHFWRUVIXOÀOVWKH /LVWLQJ5HTXLUHPHQWVRI%XUVD0DOD\VLD6HFXULWLHV%HUKDG ´%XUVD6HFXULWLHVµ
7KH&KDLUPDQOHDGVWKH%RDUGDQGLVUHVSRQVLEOHIRUHQVXULQJWKHDGHTXDF\DQGHIIHFWLYHQHVVRIWKH%RDUG·V governance process and acts as a facilitator at Board meetings to ensure that contributions from Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. As to the Managing Director, supported by Executive Director, he implements the Group’s strategies, policies and decision adopted by the Board, oversees the operations and business development of the Group, provides effective leadership and ensure high management competency.
22 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
3. Reinforce Independence of the Board (cont’d)
The Independent Directors bring to bear objective and independent views, advice and judgment on interests, not only of the Group, but also of shareholders, employees, customers, suppliers and the communities in which the Group conducts its business. Independent Directors are essential for protecting the interests of shareholders DQGFDQPDNHVLJQLÀFDQWFRQWULEXWLRQVWRWKH&RPSDQ\·VGHFLVLRQPDNLQJE\EULQJLQJLQWKHTXDOLW\RIGHWDFKHG impartiality.
$OOWKH,QGHSHQGHQW'LUHFWRUVIXOÀOWKHFULWHULDVRILQGHSHQGHQFHDVGHÀQHGLQWKH/LVWLQJ5HTXLUHPHQWVDQGWKH Board Charter. The Board through the Nomination Committee has assessed the Independent Director and is VDWLVÀHGZLWKWKHOHYHORILQGHSHQGHQFHGHPRQVWUDWHGE\DOOWKH,QGHSHQGHQW'LUHFWRUVDQGWKHLUDELOLW\WRDFWLQ the best interest of the Company. The Board therefore believes that balance of power and authority exists within LWVFXUUHQWVWUXFWXUHWRVXIÀFLHQWO\HQDEOHLWWRGLVFKDUJHLWVGXWLHVREMHFWLYHO\
The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. However, upon completion of the nine (9) years, the Independent Director may continue to serve the Board subject to the Director’s re-designation as a Non-Independent Director. In the event the Director is to retain as an Independent 'LUHFWRUWKH%RDUGVKDOOÀUVWMXVWLI\DQGREWDLQVKDUHKROGHUV·DSSURYDO2XU,QGHSHQGHQW'LUHFWRUV0U%RQJ:HL Leong and Mr. Tiong Ing Ming have served as Independent Directors of the Company for a consecutive term of more than nine (9) years. However, the Board concurred that their independence as Independent Directors KDYHQRWEHHQFRPSURPLVHGLQDQ\ZD\EDVHGRQWKHIROORZLQJMXVWLÀFDWLRQVDQGUHFRPPHQGDWLRQIURPWKH Nomination Committee:
D 7KH\IXOÀOOHGWKHFULWHULDVDV,QGHSHQGHQW'LUHFWRUDVVWLSXODWHGLQWKH/LVWLQJ5HTXLUHPHQWVDQGWKHUHIRUHDUH able to offer impartial judgement and advice to the Board; (b) They remain independent and vocal, actively participated in deliberations and exercised independent judgement at Board and Board Committee meetings without compromising operational consideration. Hence, provide a check and balance to operational management; and (c) They continue to exercise independent and objective judgement in carrying out their duties as Independent Directors and they provide guidance, unbiased and independent views to many aspects of the Company and the Group’s strategy so as to safeguard the interests of minority shareholders. Their long tenure as ,QGHSHQGHQW 'LUHFWRUV KDYH QR FRQÁLFW RI LQWHUHVW RU XQGXH LQÁXHQFH IURP PDQDJHPHQW DQG LQWHUHVWHG parties.
Having considered the above, the Board had recommended both Mr. Bong Wei Leong and Mr. Tiong Ing Ming to be retained as Independent Directors of the Company and such proposal shall be tabled for shareholders’ approval at the forthcoming Annual General Meeting.
4. Foster Commitment of Directors
i) Time commitment and meetings
7KH'LUHFWRUVVKDOOGHYRWHVXIÀFLHQWWLPHDQGHIIRUWVWRFDUU\RXWWKHLUUHVSRQVLELOLWLHV7KH%RDUGVKDOOREWDLQ this commitment from Directors at the time of their appointment. Each Director is expected to commit time DVDQGZKHQUHTXLUHGWRGLVFKDUJHWKHUHOHYDQWGXWLHVDQGUHVSRQVLELOLWLHVEHVLGHVDWWHQGLQJPHHWLQJVRIWKH Board and Board Committees.
The Board acknowledges that its Directors may be invited to become directors of other companies and that exposure to other organisation can broaden the experience and knowledge of its Directors which may bring EHQHÀWVWKH*URXS'LUHFWRUVDUHWKHUHIRUHDWOLEHUW\WRDFFHSWRWKHUERDUGDSSRLQWPHQWVVRORQJDVVXFK DSSRLQWPHQWVDUHQRWLQFRQÁLFWZLWKWKHEXVLQHVVRIWKH*URXSDQGGRQRWDGYHUVHO\DIIHFWWKH'LUHFWRUV· performance and contributions as a member of the Board.
Annual Report 2014 23 CORPORATE GOVERNANCE STATEMENT (CONT’D)
4. Foster Commitment of Directors (cont’d)
i) Time commitment and meetings (cont’d)
'LUHFWRUVDUHH[SHFWHGWRKDYHVXFKH[SHUWLVHVRDVWRTXDOLI\WKHPWRPDNHDSRVLWLYHFRQWULEXWLRQWRWKH %RDUGSHUIRUPDQFHRILWVGXWLHVDQGWRJLYHVXIÀFLHQWWLPHDQGDWWHQWLRQWRWKHDIIDLUVRIWKH&RPSDQ\
$Q\ 'LUHFWRU VKDOO QRWLI\ WKH &KDLUPDQ EHIRUH DFFHSWLQJ DQ\ QHZ GLUHFWRUVKLS DQG WKH QRWLÀFDWLRQ VKDOO include the indication of time that will be spent on the new appointment.
7KXVIDUWKH%RDUGLVVDWLVÀHGZLWKWKHOHYHORIWLPHFRPPLWPHQWJLYHQE\DOOWKH'LUHFWRUVLQIXOÀOOLQJWKHLUUROHV and responsibilities as Directors of the Company. This is evidenced by their attendance at the meetings of the %RDUGDQGWKH%RDUG&RPPLWWHHV$OOWKH'LUHFWRUVKROGOHVVWKDQÀYH GLUHFWRUVKLSVLQWKHOLVWHGLVVXHUV
The Board ordinarily meets at least four (4) times a year, scheduled well in advance to facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened when urgent and important decisions need to be made between scheduled meetings. Board and Board Committees papers, which are prepared by Management, provide the relevant facts and analysis for the convenience of Directors. The meeting agenda, the relevant reports and Board papers are furnished to Directors and Board Committees PHPEHUVDWOHDVWVHYHQ GD\VEHIRUHWKHPHHWLQJWRDOORZWKH'LUHFWRUVVXIÀFLHQWWLPHWRSHUXVHIRUHIIHFWLYH GLVFXVVLRQ DQG GHFLVLRQ PDNLQJ GXULQJ PHHWLQJV $W WKH TXDUWHUO\ %RDUG PHHWLQJV WKH %RDUG UHYLHZV WKH EXVLQHVVSHUIRUPDQFHRIWKH*URXSDQGGLVFXVVHVPDMRURSHUDWLRQDODQGÀQDQFLDOLVVXHV
'XULQJ WKH ÀQDQFLDO \HDU XQGHU UHYLHZ WKH %RDUG FRQYHQHG ÀYH VFKHGXOHG %RDUG PHHWLQJV DQG WKH details of attendance of each Director are set out below:
Numbers of meetings attended
Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King 3 out of 5 Tiong Kiong King 5 out of 5 Tiong Chiong Ong 5 out of 5 Tiong Chiong Ie 3 out of 5 Bong Wei Leong 5 out of 5 Tiong Ing Ming 5 out of 5
All proceedings, matters arising, deliberations in terms of the issue discussed, and recommendations made by the Board Committees at the committees’ meetings are recorded in the minutes by the Company Secretary, FRQÀUPHGE\WKH%RDUG&RPPLWWHHVDQGVLJQHGE\WKH&KDLUPHQRIWKHVDLGFRPPLWWHHV$OOFRPPLWWHHV· meetings were attended by the Company Secretary. Upon invitation, Management representatives were present at the Board Committees’ meetings to provide additional insight into matters to be discussed during WKHVDLGFRPPLWWHHPHHWLQJVLIVRUHTXLUHG
ii) Directors’ Training
$OOWKH'LUHFWRUVKDYHDWWHQGHGWKH0DQGDWRU\$FFUHGLWDWLRQ3URJUDPPHDVUHTXLUHGE\%XUVD6HFXULWLHVDIWHU the Company is listed on the Main Market of Bursa Securities on 28 June 2006.
The Board acknowledges that continuous training and education are vital for the Board members to gain insight into the state of economy, technological advances, regulatory updates and management strategies. Directors are encouraged to attend continuous education programmes to further enhance their skills and knowledge, where relevant.
24 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
4. Foster Commitment of Directors (cont’d)
ii) Directors’ Training (cont’d)
7KHUHZHUHDOVRWHFKQLFDOEULHÀQJVXSGDWHVRQVWDWXWRU\DQGUHJXODWRU\UHTXLUHPHQWVIURPWLPHWRWLPHDWWKH Board meetings by the Company Secretaries. All Directors will continue to attend relevant training as may be UHTXLUHGIURPWLPHWRWLPHWRHTXLSWKHPVHOYHVZLWKWKHNQRZOHGJHWRGLVFKDUJHWKHLUGXWLHVPRUHHIIHFWLYHO\ and to keep abreast with regulatory and corporate governance developments in the marketplace.
The Board has assessed the training needs of the Directors. Generally, all Directors must attend at least two (2) WUDLQLQJVHPLQDUHDFK\HDU'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKH'LUHFWRUVKDYHDWWHQGHG appropriate training programmes conducted by external experts and the descriptions of the training/seminar are set out below:
Title of training/seminar Number of day(s) spent
Transfer pricing development in Malaysia 1 MIA International Accountants Conference 2014 2 %XGJHW6HPLQDU²$FFHOHUDWLQJJURZWKHQVXULQJÀVFDOVXVWDLQDELOLW\ prospering the rakyat 1 Positioning growth through innovation and talent management strategies 1 Quantity Surveying International Convention 2014 “Wind of Chance” 2 Board Chairman Series : The role of the Chairman 1
7KH &RPSDQ\ 6HFUHWDU\ FLUFXODWH WKH UHOHYDQW JXLGHOLQHV RQ VWDWXWRU\ DQG UHJXODWRU\ UHTXLUHPHQWV IURP time to time for the Board’s reference and brief the Board on these updates, where applicable. The Senior Manager (Group Accounts) and External Auditors also briefed the Board members on any changes to the )LQDQFLDO5HSRUWLQJ6WDQGDUGVWKDWDIIHFWWKH*URXS·VÀQDQFLDOVWDWHPHQWVGXULQJWKHÀQDQFLDO\HDUXQGHU review.
8SKROGLQWHJULW\LQÀQDQFLDOUHSRUWLQJE\WKH&RPSDQ\
,WLVWKH%RDUG·VFRPPLWPHQWWRSUHVHQWDFOHDUDQGEDODQFHGDVVHVVPHQWRIWKH*URXS·VÀQDQFLDOSHUIRUPDQFH DQGIXWXUHSURVSHFWVDWWKHHQGRIHDFKUHSRUWLQJSHULRGDQGÀQDQFLDO\HDUSULPDULO\WKURXJKDQQRXQFHPHQWRI WKH*URXS·VTXDUWHUO\UHVXOWVWR%XUVD6HFXULWLHVWKHDQQXDOÀQDQFLDOVWDWHPHQWVRIWKH*URXSDQGRIWKH&RPSDQ\ as well as the review of the Group’s operations and performance in the Annual Report, where relevant.
7KH%RDUGLVUHVSRQVLEOHIRUHQVXULQJWKDWWKHÀQDQFLDOVWDWHPHQWVDUHSUHSDUHGLQDFFRUGDQFHZLWKWKHDSSURYHG accounting standards to give a true and fair view of the state of affairs of the Group and of the Company as at WKHHQGRIWKHUHSRUWLQJSHULRGDQGRIWKHLUUHVXOWVDQGFDVKÁRZVIRUWKHSHULRGWKHQHQGHG
7R DVVLVW LQ LWV GLVFKDUJH RI LWV GXWLHV RQ ÀQDQFLDO UHSRUWLQJ WKH %RDUG KDV HVWDEOLVKHG DQ $XGLW &RPPLWWHH comprising exclusively Non-Executive Directors, the majority of whom are independent, with Mr. Bong Wei Leong as the Audit Committee Chairman. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Audit Committee Report on pages 29 to 33 of this Annual Report. One of the key responsibilities RIWKH$XGLW&RPPLWWHHLQLWVVSHFLÀFWHUPVRIUHIHUHQFHLVWRHQVXUHWKDWWKHÀQDQFLDOVWDWHPHQWVRIWKH*URXS DQG RI WKH &RPSDQ\ FRPSO\ ZLWK DSSOLFDEOH ÀQDQFLDO UHSRUWLQJ VWDQGDUGV LQ 0DOD\VLD DQG SURYLVLRQV RI WKH &RPSDQLHV $FW 6XFK ÀQDQFLDO VWDWHPHQWV FRPSULVH WKH TXDUWHUO\ ÀQDQFLDO UHSRUW DQQRXQFHG WR %XUVD 6HFXULWLHVDQGWKHDQQXDODXGLWHGÀQDQFLDOVWDWHPHQWV
7KH%RDUGXQGHUVWDQGVLWVUROHLQXSKROGLQJWKHLQWHJULW\RIÀQDQFLDOUHSRUWLQJE\WKH&RPSDQ\$FFRUGLQJO\WKH %RDUGLQRYHUVHHLQJWKHÀQDQFLDOUHSRUWLQJSURFHVVRIWKH&RPSDQ\KDVDGRSWHGDSROLF\WKDWWKHSURYLVLRQRI non-audit services permitted to be provided by the external auditors, does not impair the auditors’ objective, judgment and independence.
Annual Report 2014 25 CORPORATE GOVERNANCE STATEMENT (CONT’D)
8SKROGLQWHJULW\LQÀQDQFLDOUHSRUWLQJE\WKH&RPSDQ\ FRQW·G
The Board has also adopted an External Auditors Policy for the Audit Committee to assess the suitability and independence of external auditors. The External Auditors Policy has outlined the criteria and procedures for the engagement, assessment and monitoring of external auditors. The Audit Committee is responsible for reviewing, assessing and monitoring the performance, suitability and independence of the external auditors, on an annual basis.
7KHH[WHUQDODXGLWRUVKDYHFRQÀUPHGDQGDVVXUHGLQZULWLQJRIWKHLULQGHSHQGHQFHWRWKH$XGLW&RPPLWWHH7KH Audit Committee had assessed the suitability and independence of the external auditors based on the External Auditors Policy and recommended their re-appointment for the ensuing year.
'XULQJWKHÀQDQFLDO\HDUXQGHUUHYLHZWKH$XGLW&RPPLWWHHPHWZLWKWKH([WHUQDO$XGLWRUWZLFH ZLWKRXWWKH presence of the other Directors and employees of the Group.
6. Recognise and manage risks of the Group
The Board acknowledges its responsibility for the RSB Group’s system of risk management and internal control, which is designed to identify, evaluate and manage the risks of the businesses of the RSB Group, in pursuit of its REMHFWLYHV,QDGGLWLRQWKHV\VWHPRILQWHUQDOFRQWUROSUDFWLVHGE\WKH56%*URXSVSDQVRYHUÀQDQFLDORSHUDWLRQDO and compliance aspects, particularly to safeguard the RSB Group’s assets and hence shareholders’ investments. The system of internal control, by its nature, can only provide reasonable but not absolute assurance against misstatement or loss.
In executing the responsibility for the internal control system, the Board via the internal auditors and Risk 0DQDJHPHQW &RPPLWWHH KDV DGRSWHG SURFHGXUHV WR PRQLWRU WKH RQJRLQJ DGHTXDF\ DQG LQWHJULW\ RI WKH system of risk management and internal control. The effectiveness of the RSB Group’s system of risk management and internal control is reviewed on a regular basis by the Internal Auditors and Risk Management Committee.
Further details of the state of the risk management and system of internal control of the RSB Group are presented on pages 34 to 36 of this annual report.
RSB has its in-house internal audit function which is independent of the activities its audit. The Internal Audit Manager report directly to the Audit Committee. Further details of the internal audit function are outlined on pages 33 and 35 of this Annual Report.
7. Ensure timely and high quality disclosure
i) Corporate Disclosure Policy and Procedures
The Board is committed to ensuring that communications to the investing public regarding the business, RSHUDWLRQV DQG ÀQDQFLDO SHUIRUPDQFH RI WKH &RPSDQ\ DUH DFFXUDWH WLPHO\ IDFWXDO LQIRUPDWLYH FRQVLVWHQWEURDGO\GLVVHPLQDWHGDQGZKHUHQHFHVVDU\LQIRUPDWLRQÀOHGZLWKUHJXODWRULVLQDFFRUGDQFH ZLWKDSSOLFDEOHOHJDODQGUHJXODWRU\UHTXLUHPHQWV
7KH &RPSDQ\ DQQRXQFHV LWV TXDUWHUO\ DQG IXOO \HDU UHVXOWV ZLWKLQ WKH PDQGDWRU\ SHULRG 7KH ÀQDQFLDO statements and, where necessary other presentation materials presented at the Company’s general meetings, including material and price-sensitive information, are disseminated and publicly released via Bursa LINK on a timely basis to ensure effective dissemination of information relating to the Group.
26 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT (CONT’D)
7. Ensure timely and high quality disclosure (cont’d)
i) Corporate Disclosure Policy and Procedures (cont’d)
The Board places importance in ensuring disclosures made to shareholders and investors are comprehensive, accurate and on a timely and even basis as they are critical towards building and maintaining corporate FUHGLELOLW\ DQG LQYHVWRU FRQÀGHQFH $V VXFK WKH &RPSDQ\ KDV DGRSWHG D &RUSRUDWH 'LVFORVXUH 3ROLF\ and Procedures to set out the policies and procedures for disclosure of material information of the Group WRHQVXUHFRPSOLDQFHZLWKWKH/LVWLQJ5HTXLUHPHQWV7KH&RUSRUDWH'LVFORVXUH3ROLF\DQG3URFHGXUHVDUH applicable to all employees and Directors of the Group as well as those authorised to speak on their behalf.
ii) Leverage on Information Technology
In addition, the Company also put in place electronic facility to enable communication with shareholders via its website www.rsb.com.my. Shareholders can access to and obtain all information on RSB Group by accessing this website. All announcements made by the Company and information that are relevant to the shareholders and investors are available in this website.
8. Strengthen relationship between the Company and its shareholders
i) Shareholder participation at general meeting
The general meeting, which is the principal forum for shareholder dialogue, allows shareholders to review the *URXS·VSHUIRUPDQFHYLDWKH&RPSDQ\·V$QQXDO5HSRUWDQGSRVHTXHVWLRQVWRWKH%RDUGIRUFODULÀFDWLRQ At the general meeting, shareholders participate in deliberating resolutions being proposed or on the *URXS·VRSHUDWLRQVLQJHQHUDO7KH&KDLUPDQRIWKHJHQHUDOPHHWLQJLQYLWHGVKDUHKROGHUVWRUDLVHTXHVWLRQV with responses from the Board, Senior Management and external auditors. The notice of general meeting is circulated within the prescribed period before the date of the meeting to enable shareholders to go through the Annual Report, circular and papers supporting the resolutions proposed. Special business transacted at the general meeting are accompanying with the explanatory notes to facilitate full understanding of the PDWWHUVLQYROYHG([FHSWIRUWKRVHUHTXLUHGXQGHUWKH/LVWLQJ5HTXLUHPHQWVDOOWKHUHVROXWLRQVVHWRXWLQWKH notice of the general meeting was put to vote by show of hands and the outcome of the general meeting will be announced to Bursa Securities immediately.
ii) Poll voting
The shareholders were informed of their rights to demand a poll vote at the commencement of the general meetings. Shareholders are encouraged to participate through proxy voting should they be unable to attend in person.
The Chairman will declare the outcome of each resolution after proposal and secondment are done by the shareholders. The Board is of the view that with the current level of shareholders’ attendance at general PHHWLQJVYRWLQJE\VKRZRIKDQGVFRQWLQXHVWREHHIÀFLHQW7KH%RDUGZLOOHYDOXDWHWKHIHDVLELOLW\RIFDUU\LQJ out electronic polling at its general meetings if need to.
Annual Report 2014 27 CORPORATE GOVERNANCE STATEMENT (CONT’D)
8. Strengthen relationship between the Company and its shareholders (cont’d)
iii) Communication and proactive engagement with shareholders and prospective investors
The Board recognises the importance of being transparent and accountable to the Company’s shareholders and prospective investors. The various channels of communications are through meetings with institutional VKDUHKROGHUVDQGLQYHVWPHQWFRPPXQLWLHVTXDUWHUO\DQQRXQFHPHQWVRQÀQDQFLDOUHVXOWVWR%XUVD6HFXULWLHV relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website at www.rsb.com.my where shareholders and prospective investors can access FRUSRUDWHLQIRUPDWLRQDQQXDOUHSRUWVSUHVVUHOHDVHVÀQDQFLDOLQIRUPDWLRQFRPSDQ\DQQRXQFHPHQWVDQG share prices of the Company. To maintain a high level of transparency and to effectively address any issues or concerns, the Group has a dedicated electronic mail, i.e. [email protected] to which stakeholders can direct WKHLUTXHULHVRUFRQFHUQV
0U%RQJ:HL/HRQJLVWKH6HQLRU,QGHSHQGHQW'LUHFWRUGXO\LGHQWLÀHGE\WKH%RDUGWRZKRPFRQFHUQVRU TXHULHVFRQFHUQLQJWKH56%*URXSPD\EHFRQYH\HGWR
7KH&RPSDQ\·VUHVSRQVHVWRTXHULHVUDLVHGE\WKH0LQRULW\6KDUHKROGHU:DWFKGRJ*URXSZHUHDOVRVKDUHG and read out during the last annual general meeting. The Company will consider to put in place a proactive investment relations programme later.
COMPLIANCE STATEMENT
With the introduction of the new Code, the Board remains committed to inculcating good corporate governance for the Group. The Group has complied with the Code except for those disclosed in this statement. The Group will continue to endeavour to comply with all the key principles and recommendations of the Code in its effort to observe high standards of transparency, accountability and integrity.
STATEMENT ON NOMINATION COMMITTEE ACTIVITIES
'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKH1RPLQDWLRQ&RPPLWWHHKDVPHWRQFHDQGWKHDFWLYLWLHV FDUULHGRXWE\WKH1RPLQDWLRQ&RPPLWWHHGXULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUDUHDVIROORZV i 5HYLHZHGWKHPL[RIVNLOOVFKDUDFWHUH[SHULHQFHLQWHJULW\FRUHFRPSHWHQFLHVDQGRWKHUTXDOLWLHVUHTXLUHGIRUWKH Board as well as their time commitment and Board balance ii) Evaluated the performance and effectiveness of the Board including contributions of each individual director as well as the Senior Manager (Group Accounts) and the independence of the Independent Directors iii) Evaluated the performance and effectiveness of the Board Committees iv) Assessed and recommended to the Board, Directors who are due for retirement by rotation pursuant to the Company’s Articles of Association, for continuation in service as Directors v) Assessed and recommended the re-appointment of the Director pursuant to Section 129 of the Companies Act, 1965 vi) Assessed and recommended to the Board the training needs of the Directors vii) Deliberated and recommended to the Board to develop, maintain and review the criteria for recruitment process and annual assessment of Directors, criteria to assess Independent Directors viii) Discussed to formalise a policy on Board and workforce diversity
This Statement is made in accordance with the resolution of the Board of Directors dated 17 April 2015.
28 Annual Report 2014 REPORT OF THE AUDIT COMMITTEE
COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee (“the Committee”) of Rimbunan Sawit Berhad (“RSB” or “the Company”) was established on 2 March 2006 and comprises the following members:
Chairman : Bong Wei Leong (Independent Director) Members : Tiong Kiong King (Non-Independent Non-Executive Director) Tiong Ing Ming (Independent Director)
Mr. Bong Wei Leong is a member of the Malaysian Institute of Accountants, one of the associations of accountants VSHFLÀHGLQ3DUW,,RIWKH)LUVW6FKHGXOHRIWKH$FFRXQWDQWV$FW $OOPHPEHUVRIWKH$XGLW&RPPLWWHHDUHÀQDQFLDOO\ literate.
SUMMARY OF THE TERMS OF REFERENCE
(1) Membership
The Committee shall be appointed by the Board of Directors from amongst their number and shall consist of not less than three (3) members. All members of the Committee must be non-executive directors, with a majority of them being independent directors. No alternate director shall be appointed as a member of the Audit Committee.
At least one (1) member of the Committee:
PXVWEHDPHPEHURIWKH0DOD\VLDQ,QVWLWXWHRI$FFRXQWDQWV ´0,$µ RU PXVWKDYHDWOHDVWWKUHH \HDUV·ZRUNLQJH[SHULHQFHLIKHLVQRWDPHPEHURI0,$DQG PXVWKDYHSDVVHGWKHH[DPLQDWLRQVVSHFLÀHGLQ3DUW,RIWKH)LUVW6FKHGXOHRIWKH$FFRXQWDQWV$FW RU PXVWEHDPHPEHURIRQH RIWKHDVVRFLDWLRQVRIDFFRXQWDQWVVSHFLÀHGLQ3DUW,,RIWKH)LUVW6FKHGXOHRI the Accountants Act 1967; or IXOÀOV VXFK RWKHU UHTXLUHPHQWV DV SUHVFULEHG RU DSSURYHG E\ %XUVD 0DOD\VLD 6HFXULWLHV %HUKDG ´%XUVD Securities”).
If membership of the Committee for any reason falls below three (3) members, the Board of Directors shall, within WKUHH PRQWKVRIWKDWHYHQWDSSRLQWVXFKQXPEHURIQHZPHPEHUVDVPD\EHUHTXLUHGWRIXOÀOWKHPLQLPXP UHTXLUHPHQW
7KHWHUPRIRIÀFHDQGSHUIRUPDQFHRIWKH$XGLW&RPPLWWHHDQGHDFKRIWKHPHPEHUVVKDOOEHUHYLHZHGE\WKH Board of Directors at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference.
(2) Chairman
The Chairman of the Committee shall be elected from amongst their number who shall be an independent director appointed by the Board of Directors. In the absence of the Chairman of the Committee, members present at the meeting shall elect one (1) of them to chair the meeting.
(3) Secretary
The Secretary to the Committee shall be any one (1) of the joint company secretaries. In the absence of the Secretary at the meeting, the members present at the meeting shall elect any other person as the secretary of the meeting.
(4) Quorum
$TXRUXPVKDOOFRQVLVWRIDPDMRULW\RILQGHSHQGHQWGLUHFWRUVDQGVKDOOQRWOHVVWKDQWZR LQGHSHQGHQWGLUHFWRUV )RUWKHSXUSRVHRIGHWHUPLQLQJZKHWKHUWKHTXRUXPIRUWKHWUDQVDFWLRQRIWKHEXVLQHVVRIWKH&RPPLWWHHH[LVWV in the case of a meeting of committee, in addition to the members present at the meeting, any member in WHOHSKRQLFFRPPXQLFDWLRQZLWKVXFKPHHWLQJVKDOOEHFRXQWHGLQWKHTXRUXP Annual Report 2014 29 REPORT OF THE AUDIT COMMITTEE (CONT’D)
(5) Meetings and Minutes
The Committee shall hold at least four (4) meetings a year. Additional meeting may be held as and when QHFHVVDU\XSRQUHTXHVWE\DQ\&RPPLWWHHPHPEHUWKH0DQDJHPHQW,QWHUQDORU([WHUQDO$XGLWRUV7KH,QWHUQDO Audit Manager, Senior Manager (Group Accounts) are normally invited to attend the meetings. Other members of the Board of Directors, employees and representative of External Auditors shall attend the meetings upon the invitation of the Committee.
Notice of any meeting of the Committee may be given by telephone or facsimile. Notice of meeting and board papers shall be given to all members of the Committee at least 14 days and seven (7) days respectively before the date of meeting.
7KHGHFLVLRQRIWKH&RPPLWWHHVKDOOEHGHFLGHGE\DPDMRULW\RIYRWHV,QWKHFDVHRIDQHTXDOLW\RIYRWHV WKH&KDLUPDQVKDOOKDYHDVHFRQGRUFDVWLQJYRWHSURYLGHGWKDWZKHUHWZR PHPEHUVIRUPDTXRUXPWKH &KDLUPDQRIDPHHWLQJDWZKLFKRQO\VXFKDTXRUXPLVSUHVHQWRUDWZKLFKRQO\WZR 'LUHFWRUVDUHFRPSHWHQW WRYRWHRQWKHTXHVWLRQLQLVVXHWKH&KDLUPDQVKDOOQRWKDYHDFDVWLQJYRWH
Minutes of each meeting shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and shall be accepted as prima facie evidence without further proof of the facts stated therein. Such minutes of meetings shall be kept by the secretary and distributed to each member of the Committee.
A resolution in writing signed by all Committee members shall be deemed to have been passed at a meeting held on the date on which it was signed by the last member.
(6) Authority
The Committee is authorised by the Board of Directors to:
(a) investigate any activity/matter within its terms of reference and shall have unrestricted access to all employees of the Company and the Group;
(b) have the resources in order to perform its duties as set out in its terms of reference;
(c) have full and unrestricted access to any information pertaining to the Company and the Group;
(d) have direct communication channels with the external auditors and internal auditors or person(s) carrying out the internal audit function or activity;
(e) obtain external legal or other independent professional advice as necessary; and
(f) convene meetings with the external auditors and internal auditors or person(s) carrying out the internal audit function or activity or both, excluding the attendance of other Directors and employees of the Company and the Group at least twice (2) a year.
Notwithstanding anything to the contrary herein before stated, the Committee does not have executive powers and shall report to the Board of Directors on matters considered and its recommendations thereon, pertaining to the Company and the Group.
(7) Responsibility
Where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily UHVROYHGUHVXOWLQJLQDEUHDFKRIWKH0DLQ0DUNHW/LVWLQJ5HTXLUHPHQWVRI%XUVD6HFXULWLHV ´/LVWLQJ5HTXLUHPHQWVµ the Committee has the responsibility to promptly report such matter to Bursa Securities.
30 Annual Report 2014 REPORT OF THE AUDIT COMMITTEE (CONT’D)
(8) Functions and Duties
The duties of the Committee are to:
(a) consider the nomination, appointment, re-appointment, resignation and dismissal of External Auditors, the DXGLWRUV·UHPXQHUDWLRQDQGDQ\TXHVWLRQVRIUHVLJQDWLRQRUGLVPLVVDO
(b) review the nature and scope of audit plans prepared by External Auditors and Internal Auditors or person(s) carrying out the internal audit function or activity before the audit commence, and ensure co-ordination ZKHUHPRUHWKDQRQH DXGLWÀUPLVLQYROYHG
F UHYLHZ WKH DXGLW UHSRUWV SUHSDUHG E\ WKH ([WHUQDO $XGLWRUV WKH PDMRU ÀQGLQJV DQG WKH 0DQDJHPHQW·V responses thereto;
G GLVFXVVSUREOHPVDQGUHVHUYDWLRQVDULVLQJIURPWKHLQWHULPDQGÀQDODXGLWVDQGDQ\PDWWHUWKH([WHUQDO$XGLWRUV may wish to bring up;
H UHYLHZWKHTXDUWHUO\DQGDQQXDOÀQDQFLDOVWDWHPHQWVRIWKH&RPSDQ\DQGWKH*URXSSULPDULO\IRFXVLQJRQ the matters set out below, before submission to the Board of Directors for approval: FKDQJHVLQRULPSOHPHQWDWLRQRIPDMRUDFFRXQWLQJSROLF\FKDQJHV VLJQLÀFDQWDQGXQXVXDOHYHQWV DQG FRPSOLDQFHZLWKDFFRXQWLQJDQGÀQDQFLDOUHSRUWLQJVWDQGDUGVDQGOHJDOUHTXLUHPHQWV
(f) Review the internal audit programme, processes, the results of the internal audit programme and to consider WKHLQWHUQDODXGLWUHSRUWVPDMRUÀQGLQJVDQGWKH0DQDJHPHQW·VUHVSRQVHVWKHUHWRRQDQ\LQWHUQDOLQYHVWLJDWLRQV carried out by the internal auditors and ensure that appropriate action is taken by the Management in respect of the audit observations and the Committee’s recommendations;
(g) review the auditors’ evaluation of the systems of internal controls;
K UHYLHZWKHDGHTXDF\RIWKHVFRSHIXQFWLRQVFRPSHWHQF\DQGUHVRXUFHVRIWKHLQWHUQDODXGLWIXQFWLRQVDQG whether it has the necessary authority to carry out its work;
(i) review any appraisal or assessment of the performance of the members of the internal audit function;
(j) approve any appointment or termination of senior staff members of the internal audit function;
(k) be informed of any resignation of the internal audit staff members and to provide the resigning staff member an opportunity to submit his or her reasons for resigning;
(l) review the assistance given by the Company’s and the Group’s employees to the External Auditors and Internal Auditors or person(s) carrying out the internal audit function or activity;
P UHYLHZDQ\UHODWHGSDUW\WUDQVDFWLRQDQGFRQÁLFWRILQWHUHVWVVLWXDWLRQWKDWPD\DULVHZLWKLQWKH&RPSDQ\RUWKH *URXSLQFOXGLQJDQ\WUDQVDFWLRQSURFHGXUHRUFRXUVHRIFRQGXFWWKDWUDLVHVTXHVWLRQVRIWKH0DQDJHPHQW integrity;
(n) review whether there is reason (supported by grounds) to believe that the Group’s External Auditors is not suitable for re-appointment;
(o) to establish and review policies and procedures to assess the suitability and independence of External Auditors; and
(p) perform such other functions as may be agreed to by the Committee and the Board of Directors.
Annual Report 2014 31 REPORT OF THE AUDIT COMMITTEE (CONT’D)
MEETINGS AND ATTENDANCE
'XULQJ WKH ÀQDQFLDO \HDU HQGHG 'HFHPEHU VL[ $XGLW &RPPLWWHH PHHWLQJV ZHUH KHOG 7KH GHWDLOV RI attendance of each of the Committee members are outlined as follows:
Numbers of meetings attended
Bong Wei Leong 6 out of 6
Tiong Kiong King 5 out of 6
Tiong Ing Ming 6 out of 6
All proceedings, matters arising, deliberations, in terms of the issue discussed, and resolutions at the Committee PHHWLQJVDUHUHFRUGHGLQWKHPLQXWHVE\WKH&RPSDQ\6HFUHWDULHVFRQÀUPHGE\WKH&RPPLWWHHVLJQHGE\WKH Chairman of the Committee or Chairman of the meeting and reported to the Board of Directors at the Board meetings. All Committee meetings were attended by the Company Secretaries. Upon invitation, the Internal Audit Manager, Senior Manager (Group Accounts) and Senior Operation Manager were present at the Committee meetings to provide additional insight into matters to be discussed during the Committee meetings.
TRAINING
7KHGHWDLOVRIWUDLQLQJVHPLQDUDWWHQGHGE\WKHPHPEHUVRIWKH&RPPLWWHHGXULQJWKHÀQDQFLDO\HDUDUHDVIROORZV
Title of training/seminar Number of day(s) spent
Positioning growth through innovation and talent management strategies 1
Quantity Surveying International Convention 2014 “Wind of Chance” 2
Board Chairman Series : The role of the Chairman 1
SUMMARY OF ACTIVITIES OF AUDIT COMMITTEE
7KHIROORZLQJDFWLYLWLHVZHUHFDUULHGRXWE\WKH&RPPLWWHHGXULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHULQWKH discharge of its functions and duties:
(a) reviewed and approved the audit plans including scope and coverage of audit of the RSB Group with the internal and external auditors;
E UHYLHZHG DQG GHOLEHUDWHG WKH DXGLW UHSRUWV IRU WKH 56% *URXS DQG FRQVLGHUDWLRQ RI WKH PDMRU ÀQGLQJV DQG recommendations made by the internal and external auditors, and Management’s responses thereof;
F UHYLHZHGDQGGHOLEHUDWHGWKHXQDXGLWHGTXDUWHUO\UHVXOWVDQGDXGLWHGÀQDQFLDOVWDWHPHQWVIRUWKH\HDUHQGHG 'HFHPEHURIWKH&RPSDQ\DQG56%*URXSIRFXVLQJRQWKHDFFRXQWLQJSROLF\DQGÀQDQFLDOUHSRUWLQJ standards as well as the Group’s performance, prior to submission to the Board of Directors for consideration and approval;
G UHYLHZRIDQ\UHODWHGSDUW\WUDQVDFWLRQVDQGFRQÁLFWRILQWHUHVWVVLWXDWLRQWKDWPD\DULVHLQWKH&RPSDQ\DQG WKH56%*URXSLQFOXGLQJDQ\WUDQVDFWLRQSURFHGXUHRUFRXUVHRIFRQGXFWWKDWUDLVHVTXHVWLRQVRIPDQDJHPHQW integrity, prior to submission to the Board of Directors for consideration and approval;
32 Annual Report 2014 REPORT OF THE AUDIT COMMITTEE (CONT’D)
SUMMARY OF ACTIVITIES OF AUDIT COMMITTEE (CONT’D)
H UHYLHZHGDGHTXDF\RIWKHGLVFORVXUHRQUHODWHGSDUW\WUDQVDFWLRQVHQWHUHGLQWRE\WKH&RPSDQ\DQGWKH56% *URXSLQWKHTXDUWHUO\DQGDQQXDOUHSRUWVRIWKH&RPSDQ\
(f) met with the internal and external auditors twice without the presence of the other Directors and employees of RSB Group;
(g) assessed the independence and suitability of external auditors and recommended to the Board of Directors their re-appointment as external auditors and their fees;
(h) reviewed the draft Statement on Risk Management and Internal Control and draft Report of the Audit Committee prior to recommending to the Board of Directors for approval;
L UHYLHZHGWKHDGHTXDF\RIWKHVFRSHIXQFWLRQVFRPSHWHQF\DQGUHVRXUFHVRIWKHLQWHUQDODXGLWIXQFWLRQ
(j) reviewed the report on the recurrent related party transactions of a revenue or trading nature (“RRPTs”) entered into by the RSB Group pursuant to the shareholder mandate obtained at the general meetings; and
(k) reviewed the draft Circular to Shareholders in relations to the proposed shareholders mandate for the RRPTs and recommended to the Board of Directors for approval.
INTERNAL AUDIT FUNCTION
RSB Group has an in-house internal audit function to assist the Audit Committee in the discharge of its duties and UHVSRQVLELOLWLHV DQG LV SULQFLSDOO\ UHVSRQVLEOH IRU WKH LQGHSHQGHQW DVVHVVPHQW RI WKH DGHTXDF\ HIIHFWLYHQHVV DQG HIÀFLHQF\RIWKHLQWHUQDOFRQWUROV\VWHPVLQSODFHWKURXJKDV\VWHPDWLFDQGUHJXODUUHYLHZVRIPDQDJHPHQWFRQWURO and governance processes so as to provide reasonable independent assurance that such systems continue to operate satisfactorily and effectively.
The Group internal audit function adopts a risk-based auditing approach in planning and conducting audits by focusing on key risk areas. The internal audit function is independent of the activities it audits, and is responsible for the regular review and/or appraisal of the internal control, management and governance processes within the RSB Group. It operates and performs in accordance to the principles of the Internal Audit Charter.
The internal audit reports were deliberated by the Audit Committee and recommendations were duly acted upon by the Management. Currently, the Internal Audit Manager reports directly to the Audit Committee on the activities carried out by the internal audit department based on the annual audit plan duly approved by the Audit Committee.
'XULQJWKHÀQDQFLDO\HDUHQGHG'HFHPEHUWKHLQWHUQDODXGLWGHSDUWPHQWKDGXQGHUWDNHQWKHIROORZLQJ activities:
SUHSDUHWKHDQQXDODXGLWSODQIRUDSSURYDOE\WKH$XGLW&RPPLWWHH FRQGXFWHGIROORZXSYLVLWVRQWKHUHFRPPHQGDWLRQVDQGDFWLRQSODQVDJUHHGE\WKH0DQDJHPHQW UHYLHZLQJDQGDSSUDLVLQJWKHVRXQGQHVVDQGDGHTXDF\RIRSHUDWLRQDODQGRWKHUFRQWUROVRIWKH56%*URXS DQG LGHQWLI\LQJZD\VDQGRSSRUWXQLWLHVWRLPSURYHWKHHIIHFWLYHQHVVDQGHIÀFLHQF\RIWKHRSHUDWLRQVRIDQGSURFHVVHV within the RSB Group.
7KHWRWDOFRVWVLQFXUUHGIRUWKHLQWHUQDODXGLWIXQFWLRQVLQUHVSHFWRIWKHÀQDQFLDO\HDUHQGHG'HFHPEHUZDV RM440,000.00.
This Report is made in accordance with the resolution of the Board of Directors dated 17 April 2015.
Annual Report 2014 33 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTRODUCTION RISK MANAGEMENT FRAMEWORK
The Board is committed to maintaining a sound system The Board subscribes to the fact that an effective risk of risk management and internal control and good management practice is vital to the success of the corporate governance practices in the Group as set Group’s business. In view of this, there is a formal process out in this Statement on Risk Management and Internal WR LGHQWLI\ HYDOXDWH PRQLWRU DQG PDQDJH VLJQLÀFDQW Control made in compliance with Paragraph 15.26 (b) risks faced by the Group in its achievement of the RIWKH/LVWLQJ5HTXLUHPHQWVRI%XUVD0DOD\VLD6HFXULWLHV business objectives. Berhad (“Bursa Securities”) and guided by the Statement on Risk Management & Internal Control: Guidelines for The Board has, through its Audit Committee (“AC”) and Directors of Listed Issuers. Risk Management Committee (“RMC”), established a risk management and control framework implemented WKURXJKRXWWKH*URXSZKLFKLVÀUPO\HPEHGGHGLQWKH BOARD’S RESPONSIBILITY Group’s key processes. Management is responsible for identifying, evaluating, monitoring and reporting of risks The Board acknowledges its responsibility for the Group’s and internal control as well as providing assurance to the system of risk management and internal control (the Board that it has done so in accordance with the policies “system”), which includes the establishment of an adopted by the Board. Further independent assurance is appropriate control environment and framework as well provided by the Internal Audit function, which operates DVUHYLHZLQJLWVDGHTXDF\LQWHJULW\DQGHIIHFWLYHQHVVWR across the Group. safeguard shareholders’ investment and Group’s assets.
7KH %RDUG FRQWLQXRXVO\ UHYLHZV WKH DGHTXDF\ DQG RISK MANAGEMENT FUNCTION effectiveness of the Group’s risk management and internal control system which has been embedded The Risk Management Committee carried out its in all aspects of the Group’s activities and reviews the duties in accordance with its term of reference during processes, responsibilities and assesses for reasonable WKH ÀQDQFLDO \HDU 7KH 5LVN 0DQDJHPHQW &RPPLWWHH assurance that risks have been managed within the principally develops, executes and maintains the Group’s risk appetite and tolerable ranges. risk management system to ensure that the Group’s corporate objectives and strategies are achieved In view of the limitations inherent in any system of risk within the acceptable risk appetite of the Group. Its management and internal control, the Group’s system UHYLHZV FRYHU UHVSRQVHV WR VLJQLÀFDQW ULVNV LGHQWLÀHG by its nature can only reduce rather than eliminate including non-compliance with applicable laws, rules, the risk of failure to achieve the Group’s business and regulations and guidelines, changes to internal controls corporate objectives. Accordingly, the systems can and management information systems, and output from only provide a reasonable but not absolute assurance monitoring processes. against material misstatement or loss.
The Board has received assurance from the Managing Director (“MD”) that the Group’s risk management and LQWHUQDO FRQWURO V\VWHP LV RSHUDWLQJ DGHTXDWHO\ DQG effectively, in all material aspects, based on the risk management and internal control framework of the Group.
34 Annual Report 2014 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)
The principal responsibilities of the Risk Management CONTROL ENVIRONMENT AND ACTIVITIES Committee includes:- The Group’s corporate culture is embedded in its core (VWDEOLVKWKH*URXS5LVN0DQDJHPHQW)UDPHZRUN values of integrity, commitment, loyalty, excellence in 'HYHORSSURFHVVHVWRLGHQWLI\DVVHVVWUHDWPRQLWRU execution, speed or timeliness, innovativeness and cost and report on all material business risks; HIÀFLHQF\²WRDFKLHYHWKH*URXS·VYLVLRQDQGVXSSRUW 3URYLGLQJ JXLGDQFH DQG VWUDWHJLF GLUHFWLRQ WR WKH the business objectives, risk management and internal %XVLQHVV 8QLWV RQ WKH DGHTXDF\ DQG HIIHFWLYHQHVV control system. RI LQWHUQDO FRQWURO V\VWHP IRU WKH LGHQWLÀFDWLRQ DQG mitigation of material business risks; and The Audit Committee, which is chaired by an (VWDEOLVK SURFHGXUHV IRU WKH LGHQWLÀFDWLRQ RI DQG Independent Director, is tasked by the Board with the compliance with relevant laws, licensing and duty of reviewing and monitoring the effectiveness of UHJXODWRU\UHTXLUHPHQWV the Group’s system of internal control with the assistance of the in-house Internal Audit (“IA”) department. The Group will continue to monitor all major risks affecting the Group and take the necessary measures to mitigate $XGLW &RPPLWWHH PHPEHUV ZLOO PHHW TXDUWHUO\ WR WKHPDQGHQKDQFHWKHDGHTXDF\DQGHIIHFWLYHQHVVRI deliberate the internal audit reports prepared by IA the risk management and internal control system of the RQ WKH DGHTXDF\ HIÀFLHQF\ DQG HIIHFWLYHQHVV RI WKH Group. Group’s system of internal control. These reports are prepared based on the annual audit plan which has been approved by the Audit Committee. INTERNAL AUDIT FUNCTION Policies and procedures have been established for key The Board has established the Audit Committee to business processes and support functions. The Group has evaluate the internal audit function and assessing its LQ SODFH D V\VWHP WR HQVXUH WKDW WKHUH DUH DGHTXDWH effectiveness in the discharge of its responsibilities. ULVN PDQDJHPHQW ÀQDQFLDO DQG RSHUDWLRQDO SROLFLHV procedures and rules relating to the delegation and The Internal Audit Department is responsible for segregation of duties. undertaking regular and systematic review of the Group’s operations and system of internal controls based on Annual business plans and operating budgets are annual audit plans approved by the Audit Committee. prepared by business and operating units, and are 7KH,QWHUQDO$XGLWÀQGLQJVDUHGLVFXVVHGDWPDQDJHPHQW approved by the Board. Actual performance and level and actions are agreed in response to the Internal VLJQLÀFDQWYDULDQFHVDJDLQVWEXGJHWDUHPRQLWRUHGRQ Audit Function’s recommendations. The progress of an ongoing basis. implementation of the agreed actions is reviewed and YHULÀHGE\WKH,QWHUQDO$XGLW)XQFWLRQWKURXJKLWVIROORZ up reviews. The Audit Committee reviews all internal audit ÀQGLQJV PDQDJHPHQW UHVSRQVHV DQG WKH DGHTXDF\ and effectiveness of the internal controls. The Audit &RPPLWWHHUHSRUWVWRWKH%RDUGRQDTXDUWHUO\EDVLVRILWV deliberations and recommendations.
Annual Report 2014 35 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)
INFORMATION AND COMMUNICATION PROCESSES
0DQDJHPHQW DQG WKH %RDUG UHFHLYH WLPHO\ UHOHYDQW DQG UHOLDEOH PDQDJHPHQW DQG ÀQDQFLDO UHSRUWV ZKLFK DUH reviewed on a regular basis.
The Group has in place a Management Information System that captures, compiles, analyses and reports relevant data, which enables management to make business decisions in an accurate and timely manner.
MONITORING AND REVIEW
The monitoring, review and reporting procedures and systems in place give reasonable assurance that the controls DUHDGHTXDWHDQGDSSURSULDWHWRWKH*URXS·VRSHUDWLRQVDQGWKDWULVNVDUHDWDQDFFHSWDEOHOHYHO3HULRGLFIROORZ ups reviews were also carried out to determine the status of implementation of agreed corrective actions based on ÀQGLQJVUDLVHG
2YHUDOOWKHV\VWHPRILQWHUQDOFRQWURORIWKH*URXSIRUWKHÀQDQFLDO\HDUXQGHUUHYLHZZDVFRQVLGHUHGWREHDGHTXDWH and operating satisfactorily and there were no material control failures or adverse compliance events that have directly resulted in any material loss to the Group.
7KH*URXSZLOOFRQWLQXHWRUHYLHZDQGWHVWWKHHIIHFWLYHQHVVDQGHIÀFLHQF\RILWVULVNPDQDJHPHQWDQGLQWHUQDOFRQWURO system in response to change in the operating environment.
This Statement is made in accordance with the resolution of the Board of Directors dated 17 April 2015.
36 Annual Report 2014 SUSTAINABILITY & CORPORATE RESPONSIBILITY
INTRODUCTION
Rimbunan Sawit Berhad (RSB), a reputable and a prominent member of the oil palm industry, recognizes acting responsibly and sustainably creates value for the Company, its employees, customers, community and environment as a whole. Sustainability and Corporate Social Responsibility (CSR) to society has always been part of RSB’s business PRGHOWKDWEDODQFHVJURZWKDQGSURÀWDELOLW\
In 2014, RSB continues to build sustainable practices in every aspect of the Group’s business and in achieving excellence in its CSR activities.
(A) MARKETPLACE
RSB upholds its integrity in the Marketplace by focusing on the following areas:
Quality Product and Services
:H ÀUPO\ EHOLHYH LQ WKH LPSRUWDQFH RI PDLQWDLQLQJ WKH KLJKHVW VWDQGDUGV RI TXDOLW\ LQ RXU SURGXFWV 2XU 5+ Plantation Palm Oil Mill continues to maintain the ISO 9001 accreditation to ensure its products meet the highest available global standards.
The Group constantly implements continuous improvement on its business processes through its yearly assessment of contractors, consultants and service providers to ensure prompt delivery of resources by vendors and ensuring GHOLYHU\RITXDOLW\SURGXFWVDQGVHUYLFHVWRRXUFXVWRPHUV:HDUHFRPPLWWHGWRPHHWDQGHYHQH[FHHGWKH VWDQGDUGVRIDOOFHUWLÀFDWLRQVIRUWKHPDUNHWVZHRSHUDWHLQDQGZHFRQGXFWEXVLQHVVZLWKHWKLFVDQGYDOXHVWR enhance our Group’s performance.
Stakeholders Engagement
Enhancing stakeholder value has always been the core interest of the Group and consider our associates, investors, analysts, customers, partners and communities as our primary stakeholders. We recognize the importance of maintaining transparency and accountability to them. We are committed in cultivating the best practices in compliance with all laws and regulations and maintaining the highest Corporate Governance standards.
Updated investor relations information is available in the Company’s website.
Corporate Governance
In conformity with the MCCG 2012 highest corporate governance standards, we have implemented the world class SAP system which maintains a single database to preserve the originality and integrity of our information and data sources. Transactions are processed end-to-end hence eliminating data inconsistencies between sub- systems and providing information in a more reliable and accessible manner.
RSB leverages technology, such as the centralized GIS database system for better operational planning and EXGJHWLQJ 9HKLFOH 7UDFNLQJ 6\VWHP WR LPSURYH WKHLU GDLO\ ÁHHW RSHUDWLRQ DQG UHPRWH VHQVLQJ WHFKQRORJ\ WR HQKDQFHHIÀFLHQF\LQWKHPDQDJHPHQWRIDJULFXOWXUDOSUDFWLFHV
Annual Report 2014 37 SUSTAINABILITY & CORPORATE RESPONSIBILITY (CONT’D)
B) ENVIRONMENT
We have initiated a host of conservation efforts to meet the challenges and pressures of environmental CSR behaviour faced by members of the oil palm industry.
Environmental Conservation Practices
,QSUHVHUYLQJWKHHQYLURQPHQWDOVXVWDLQDELOLW\WKHJURXSKDVJRQHEH\RQGUHJXODWRU\UHTXLUHPHQWVE\FRPPLWWLQJ practices like zero-carbon emission during replanting, zero wastage mill management concepts and the reduction RIPHWKDQHHPLVVLRQIURPHIÁXHQWWUHDWPHQWDVZHOODVJRRGDJULFXOWXUDOSUDFWLFHVLQPDQXULQJDQGZHHGLQJ$OO these practices contribute towards greater environmental friendliness of palm oil production and sustainability of the palm oil industry in the long run.
Good agronomic practices are always followed in our fertilizer application whereby empty fruit bunches (EFB) DUHXVHGLQSODQWDWLRQVWRHQKDQFHVRLOIHUWLOLW\$3ROLVKLQJ3ODQWZDVFRQVWUXFWHGWRWUHDWWKHPLOOHIÁXHQWEHIRUH ÀQDOGLVFKDUJHLQWKHPLOO&OHDQWHFKQRORJ\KDVEHHQLQWURGXFHGDWDQDHURELFHIÁXHQWSRQGVWRKDUQHVVWKH methane gas (greenhouse gas) or biogas, which is recycled to gas engine for electricity generation.
Bio-Diversity Projects
In managing pest and weed control, we have introduced biological and livestock management programmes which include livestock projects and the erection of roosting posts for barn owls in our estates to minimize environmental impact caused by hazardous chemicals and pesticides. Livestock management improves soil and vegetation cover and plant, as well as, animal bio-diversity to reduce environment impact. Grazing animals can improve plant species composition by removing biomass, controlling shrub growth and dispersing seeds through their hoofs and manure and hence, reducing the use of chemical and pesticides for weeding and manuring.
Waste Handling & Recycling
RSB cares for the environment sustainability by promoting efforts in waste handling and recycling. To better utilise energy from waste material and biomass, we plan either to set up a pellet plant to recycle the empty fruit bunches (EFB) and produce pellets to be used as biomass for steam boiler or to invest in an organic composting plant to UHF\FOHWKH()%GHFDQWHUFDNHVDQGHIÁXHQWVOXGJHWRSURGXFHRUJDQLFIHUWLOLVHUIRURXUHVWDWHVDQGLPSURYHWKH soil fertility.
38 Annual Report 2014 SUSTAINABILITY & CORPORATE RESPONSIBILITY (CONT’D)
C) COMMUNITY
$VDUHVSRQVLEOHFRUSRUDWHFLWL]HQ56%VWULYHVWRLPSURYHWKHTXDOLW\RIOLIHRIWKHFRPPXQLW\LWVHUYHVE\FUHDWLQJ opportunities and bringing lasting and positive change. These have included funding and other resources towards enhancing the social well-being of the community.
Contributions to NCR Community
RSB continues to undertake the development of Native Customary Rights (“NCR”) on oil palm plantations land LQ6DUDZDNWREULQJVRFLDODQGHFRQRPLFEHQHÀWVWRODQGRZQHUVIURPWKHLQGLJHQRXVFRPPXQLW\LQWKHDUHDVRI education, infrastructure, cultural and social development initiatives.
The Group offers career opportunities to local villagers, through employment, internships, contract works, on-the- job training for youths and education opportunities with universities and institutes of higher learning.
Volunteerism & Donations
RSB supported fund-raising, donation drives, and made various contributions to charitable organisations and orphanages during the Christmas, Gawai and Hari Raya celebrations.
(PSOR\HHVZHUHHQFRXUDJHGWRSDUWLFLSDWHWKURXJKYROXQWHHULQJLQORQJKRXVHVDQGWHDFKHUV·VWDIITXDUWHUVWR UHÁHFWRXUFRPPXQLW\GXWLHVLQSURYLGLQJVKHOWHUDVZHOODVRXUFRPPLWPHQWLQSURPRWLQJVRFLDOKDUPRQ\DQG unity within the community. We also made donations to schools, especially those in the vicinity of the estates, and contributed used personal computers in encouraging digital literacy in education.
We also organised a Blood Donation Campaign and Health Screening to create awareness on the importance of a healthy lifestyle as promoted by the Ministry of Health, Sarawak.
Among highlights were school performances to promote the talents of secondary school students and RSB’s exhibits showcasing the career opportunities in the estates and palm oil mills along with a brief overview of the industry.
D) WORKFORCE
Human Capital
The Group encourages lifelong learning opportunities and provides in-house training and external courses to enhance employees knowledge and core competencies. Various professional and career enrichment programmes are held including On-the-Job Training to train school leavers to become Field Conductors; Safety & Health workshops to raise awareness and address occupational health issues and Soft Skills training to uplift managers and executives management capabilities. Familiarisation visits to estates and palm oil mills were organised for new recruits to introduce them to the plantation industry. Various workshops and consultations were organized to prepare the Company for the smooth implementation of the new tax regime in 2015.
Annual Report 2014 39 SUSTAINABILITY & CORPORATE RESPONSIBILITY (CONT’D)
D) WORKPLACE (CONT’D)
Workforce Diversity
The Group recognizes diversity of employees in terms of race, colour, gender, sexual orientation, age, language, religion, and national or social origin is vital to organization’s smooth operations and business sustainability. We are strictly against sexual harassment and discrimination in the workplace. Thus, the Group is dedicated in providing DQGQXUWXULQJDSRVLWLYHFXOWXUHDQGHQYLURQPHQWIRUDOOHPSOR\HHVWRKDYHHTXDORSSRUWXQLW\WRVWULYHDQGZRUN together in harmony to achieve corporate objective and sustainable growth.
Healthy Lifestyle Awareness Programme
In line with efforts to promote wellness and a healthy lifestyle, various activities were organized in the estates for staff and foreign workers, such as football matches to provide social, recreational and sporting opportunities aimed at fostering interaction amongst the generational work forces. RSB Club actively promoted wellness and exercise schemes through gym activities, aerobics, bowling and table tennis to create healthcare awareness DPRQJRIÀFHHPSOR\HHV$QQXDOJHQHUDOKHDOWKVFUHHQLQJVZHUHRUJDQL]HGWRLGHQWLI\VWDIIZLWKKHDOWKSUREOHPV who were then encouraged to join the Weight Loss Campaign.
Work-life Balance Living
56%KDVDGRSWHGDÀYHGD\ZRUNLQJZHHNVLQFH2FWREHUHQWLWOLQJLWVHPSOR\HHVWRVSHQGPRUHYDOXDEOH TXDOLW\WLPHZLWKWKHLUIDPLOLHVDVZHOODVSURYLGLQJH[WUDWLPHIRUWKHPWRDGRSWKHDOWK\OLIHVW\OHKDELWVVXFKDV exercises. Work-life balance includes bi-monthly mass exercise get-together which has served as a sporting, social event for employees; shorter lunch breaks with the introduction of package lunch online orders; and special staff price health food promotions. These are some measures undertaken to help its employees to stay healthy and living a work-life balance lifestyle.
Social Gatherings
Annual dinners and festive gatherings are held to bring the RSB family together in efforts to strengthen friendships and promote closer ties in a caring work environment and culture.
1HZ&RUSRUDWH2IÀFH
In the beginning of 2015, RSB proudly moved into the Menara Rimbunan Hijau, the new, iconic landmark building ZLWKJUHHQIHDWXUHV7KLVVWDWHRIDUWFRUSRUDWHEXLOGLQJLVHTXLSSHGZLWKHQHUJ\VDYLQJVPHFKDQLVPWRPLQLPLVH the impact on the environmental and to foster a greater sense of well-being among its employees.
:LWKWKLVQHZFRUSRUDWHRIÀFH5LPEXQDQ6DZLW%HUKDGKDVPRYHGLQWRDQHZHUDRILWVHYROYHPHQW
40 Annual Report 2014 SUSTAINABILITY & CORPORATE RESPONSIBILITY (CONT’D)
MARKETPLACE
ENVIRONMENT
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Annual Report 2014 41 SUSTAINABILITY & CORPORATE RESPONSIBILITY (CONT’D)
WORKPLACE Human Capital
Social Gatherings Healthy Lifestyle Awareness Programme
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42 Annual Report 2014 Financial Statements
DIRECTORS’ REPORT 44
STATEMENT BY DIRECTORS 48
STATUTORY DECLARATION 48
INDEPENDENT AUDITORS’ REPORT 49
STATEMENTS OF FINANCIAL POSITION 51
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 53
STATEMENTS OF CHANGES IN EQUITY 54
STATEMENTS OF CASH FLOWS 58
NOTES TO THE FINANCIAL STATEMENTS 61 DIRECTORS’ REPORT
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44 Annual Report 2014 DIRECTORS’ REPORT (CONT’D)
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Annual Report 2014 45 DIRECTORS’ REPORT (CONT’D)
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46 Annual Report 2014 DIRECTORS’ REPORT (CONT’D)
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48 Annual Report 2014 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF RIMBUNAN SAWIT BERHAD (691393 - U)
REPORT ON THE FINANCIAL STATEMENTS
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Annual Report 2014 49 INDEPENDENT AUDITORS’ REPORT (CONT’D) TO THE MEMBERS OF RIMBUNAN SAWIT BERHAD (691393 - U)
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1. GENERAL INFORMATION
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4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.5 FINANCIAL INSTRUMENTS (cont’d)
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4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.9 INTANGIBLE ASSETS (cont’d)
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19. BORROWINGS (cont’d)
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19. BORROWINGS (cont’d)
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20. HIRE PURCHASE OBLIGATIONS
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21. OBLIGATIONS UNDER IJARAH ARRANGEMENTS
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22. TRADE PAYABLES
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24. REVENUE
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25. FINANCE COSTS
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26. PROFIT BEFORE TAXATION
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27. INCOME TAX EXPENSE
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27. INCOME TAX EXPENSE (cont’d)
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28. EARNINGS PER SHARE
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29. DIVIDENDS
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30. ACQUISITION OF SUBSIDIARIES
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32. CASH AND CASH EQUIVALENTS
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33. DIRECTORS’ REMUNERATION (cont’d)
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34. SIGNIFICANT RELATED PARTY DISCLOSURES
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34. SIGNIFICANT RELATED PARTY DISCLOSURES (cont’d)
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35. OPERATING SEGMENTS
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36. CAPITAL COMMITMENTS
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37. CONTINGENT LIABILITIES
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38. FINANCIAL INSTRUMENTS
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130 Annual Report 2014 ADDITIONAL COMPLIANCE INFORMATION
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1. Utilisation of proceeds from corporate proposal
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Annual Report 2014 131 ADDITIONAL COMPLIANCE INFORMATION (CONT’D)
11. Recurrent related party transactions of a revenue or trading nature (“RRPT”)
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132 Annual Report 2014 ADDITIONAL COMPLIANCE INFORMATION (CONT’D)
Notes:
(A) Connected with Tan Sri Tiong, TSL, Datuk Tiong Thai King, Tiong Kiong King, Tiong Chiong Ie and Tiong Chiong Ong
(B) Connected with Tan Sri Tiong, TTSH, TSL, TTSE, Datuk Tiong Thai King, Tiong Kiong King , Tiong Chiong Ie and Tiong Chiong Ong
(C) Connected with Tan Sri Tiong, TTSH, TSL, Datuk Tiong Thai King, Tiong Kiong King, Tiong Chiong Ie and Tiong Chiong Ong
(D) Connected with Datuk Tiong Thai King
(E) Connected with Tan Sri Tiong, TSL, RHSA, Datuk Tiong Thai King, Tiong Kiong King, Tiong Chiong Ie, Tiong Chiong Ong and PAA
(F) Connected with Dato Mohamad Arif Stephen bin Abdullah
(G) Connected with Tan Sri Tiong, TTSH, TSL,TTSE, Tiong Kiong King, Tiong Chiong Ie, Tiong Chiong Ong, RHSA and KOPP
(H) Connected with Tiong Chiong Ong
(I) Connected with Tan Sri Tiong, TSL, TTSH, Datuk Tiong Thai King, Tiong Kiong King, Tiong Chiong Ie and Tiong Chiong Ong
(J) Connected with Tan Sri Tiong, TTSH, TSL, TTSE, PAA, Tiong Kiong King , Tiong Chiong Ie and Tiong Chiong Ong
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Annual Report 2014 133 LIST OF PROPERTIES OWNED BY THE GROUP
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134 Annual Report 2014 ANALYSIS OF SHAREHOLDINGS AS AT 23 APRIL 2015
Share Capital
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Distribution Schedule of Ordinary Shares
No. of Holders Holdings Total Holdings %
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Annual Report 2014 135 ANALYSIS OF SHAREHOLDINGS (CONT’D) AS AT 23 APRIL 2015
Substantial Shareholders
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Notes: (a) Deemed interested by virtue of its interest in Pemandangan Jauh Plantation Sdn Bhd and Ladang Hijau Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. (b) Deemed interested by virtue of its interests in Rimbunan Hijau Southeast Asia Sdn Bhd, Rimbunan Hijau (Sarawak) Sdn Bhd, Kendaie Oil Palm Plantation Sdn Bhd and Rejang Height Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. (c) Deemed interested by virtue of its interests in Tiong Toh Siong Holdings Sdn Bhd, Tiong Toh Siong Enterprises Sdn Bhd, Rimbunan Hijau Southeast Asia Sdn Bhd, Pemandangan Jauh Plantation Sdn Bhd and Rejang Height Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. (d) Deemed interested by virtue of its interest in Rimbunan Hijau Southeast Asia Sdn Bhd, Kendaie Oil Palm Plantation Sdn Bhd and Rejang Height Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. (e) Deemed interested by virtue of his interests in Tiong Toh Siong Holdings Sdn Bhd, Teck Sing Lik Enterprise Sdn Bhd, Tiong Toh Siong Enterprises Sdn Bhd, Pertumbuhan Abadi Asia Sdn Bhd, Rimbunan Hijau Southeast Asia Sdn Bhd, Rimbunan Hijau (Sarawak) Sdn Bhd, Kendaie Oil Palm Plantation Sdn Bhd, Pemandangan Jauh Plantation Sdn Bhd, Ladang Hijau Sdn Bhd and Rejang Height Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.
136 Annual Report 2014 ANALYSIS OF SHAREHOLDINGS (CONT’D) AS AT 23 APRIL 2015
Directors’ Interests
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Annual Report 2014 137 ANALYSIS OF SHAREHOLDINGS (CONT’D) AS AT 23 APRIL 2015
Thirty Largest Securities Account Holders
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By Order of the Board of Directors
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Annual Report 2014 141 NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
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The Nomination Committee and the Board of Directors had assessed the independence of Mr. Bong Wei Leong and Mr. Tiong Ing Ming who have served as Independent Non-Executive Directors of the Company for a consecutive term of more than nine (9) years, and recommended them to continue to act as Independent Non-Executive Directors of the Company EDVHGRQWKHIROORZLQJMXVWLÀFDWLRQV
D 7KH\IXOÀOOHGWKHFULWHULDVDV,QGHSHQGHQW'LUHFWRUDVVWLSXODWHGLQWKH/LVWLQJ5HTXLUHPHQWVDQGWKHUHIRUHDUHDEOHWR offer impartial judgement and advice to the Board; (b) They remain independent and vocal, actively participated in deliberations and exercised independent judgement at Board and Board Committee meetings without compromising operational consideration. Hence, provide a check and balance to operational management; and (c) They continue to exercise independent and objective judgement in carrying out their duties as Independent Directors and they provide guidance, unbiased and independent views to many aspects of the Company and the Group’s strategy so as to safeguard the interests of minority shareholders. Their long tenure as Independent Directors have no FRQÁLFWRILQWHUHVWRUXQGXHLQÁXHQFHIURPPDQDJHPHQWDQGLQWHUHVWHGSDUWLHV
142 Annual Report 2014 NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
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3DUDJUDSK RIWKH0DLQ0DUNHW/LVWLQJ5HTXLUHPHQWVVWDWHVWKDWZLWKUHJDUGWRUHODWHGSDUW\WUDQVDFWLRQVZKLFKDUH recurrent, of a revenue or trading nature and which are necessary for day-to-day operations (“RRPT”), a public listed company may seek a shareholder mandate.
The proposed resolution No. 9, if passed, will authorise the Company and each of its subsidiaries to enter into RRPT with the PDQGDWHGUHODWHGSDUWLHVDVLGHQWLÀHGLQSRLQW E RIWKH&LUFXODU 3DUW$ ZKLFKDUHQHFHVVDU\IRUGD\WRGD\RSHUDWLRQV of the RSB Group, provided that such transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and not detrimental to the interest of the minority shareholders.
By obtaining the Shareholder Mandate, the necessity to convene separate meetings from time to time to seek shareholders approval as and when such RRPT occur would not arise. This would reduce substantial administrative time and costs associated with the convening of such meetings without compromising on the corporate objectives of the RSB Group or adversely affecting the business opportunities available to the RSB Group.
Please refer to the Circular (Part A) for further information.
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The proposed Resolution No. 10, if passed, will renew the authority for the Company to purchase and/or hold up to ten per cent (10%) of the issued and paid-up ordinary share capital of the Company through Bursa Securities. This authority will expire at the conclusion of the next annual general meeting, unless revoked or varied by ordinary resolution passed by shareholders at general meeting.
Please refer to the Statement to Shareholders (Part B) for further information.
Annual Report 2014 143 7KLVSDJHLVLQWHQWLRQDOO\OHIWEODQN Rimbunan Sawit RIMBUNAN SAWIT BERHAD (Company No. 691393-U) (Incorporated in Malaysia) FORM OF PROXY Number of shares represented by Proxy 1
Number of shares represented by Proxy 2
*I/We ______(*NRIC/Company No. ______) of ______(full address) being a *member/members of Rimbunan Sawit Berhad hereby appoint ______(NRIC No. ______) of ______(full address) or failing *him/her, ______(NRIC No. ______) of ______(full address) or Chairman of the meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Tenth Annual General Meeting of the Company to be held on Monday, 15 June 2015 at 11.30 a.m. and, at any adjournment thereof for/against* the resolution(s) to be proposed thereat. Resolutions For Against 1. To approve the payment of directors’ fees for the financial year ended 31 December 2014.
2. To approve the proposed increase of directors’ fees for the financial year ending 31 December 2015.
3. To re-elect Tiong Chiong Ong as director.
4. To re-elect Tiong Ing Ming as director
5. To re-appoint Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King as director.
6. To re-appoint Messrs. Crowe Horwath as auditors for the ensuing year.
7. To retain Mr. Bong Wei Leong as an Independent Non-Executive Director. 8. To retain Mr. Tiong Ing Ming as an Independent Non-Executive Director.
9. To approve the proposed renewal of and new shareholder mandates for recurrent related party transactions of a revenue or trading nature.
10. To approve the proposed renewal of authority for purchase of own shares by the Company.
[Please indicate with a (X) in the space above how you wish your vote to be cast. If no specific direction as to voting is indicated, the proxy will vote or abstain as he/she thinks fit.] * Strike out whichever is not desired. (Unless otherwise instructed, the proxy may vote as hHWKLQNVÀW)
Dated this ______day of ______2015 ______Signature / common seal of shareholder(s)
Notes: 1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. To be valid, the form of proxy, duly completed must be deposited at the registered office of the Company at North Wing, Menara Rimbunan Hijau, 101, Pusat Suria Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak not less than 48 hours before the time for holding the meeting or any adjournment thereof. 3. A member of the Company entitled to attend and vote at this Annual General Meeting, shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings 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 (1) 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 5. If the appointor is a corporation, the form of proxy must be executed under its common seal or under the hand of an officer or attorney duly authorised. 6. A depositor whose name appears in the Record of Depositors as at 9 June 2015 shall be regarded as a Member of the Company entitled to attend this Annual General Meeting or appoint a proxy to attend, speak and vote on his behalf. 3OHDVHDIÀ[ stamp here
The Company Secretary Rimbunan Sawit Berhad (691393-U)
North Wing, Menara Rimbunan Hijau, 101, Pusat Suria Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak. Rimbunan Sawit North Wing, Menara Rimbunan Hijau, 101, Pusat Suria Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak. Tel. No. : 084-218 555 Fax No. : 084-219 555 E-mail address: [email protected]