Statement on Corporate Governance

The Board of Directors of Padiberas Nasional Berhad (the Board) is committed in ensuring that the Group practices a good corporate governance in conducting the Group affairs with full transparency, integrity and professionalism towards enhancing business prosperity and corporate accountability with the ultimate objective to safeguard the interest of all stakeholders.

A. BOARD OF DIRECTORS

The Board retains effective control of the Company. This includes determining the Groups overall strategic plans, performing periodic reviews of business and financial performance, adopting practical risk management and internal controls.

In carrying out these duties and responsibilities, the Board is assisted by five (5) Board Committees, which operate within clearly defined terms of reference. The Committees deliberate the proposals in depth before any recommendation being put up to the Board. The Board Committees are:-

i. Audit Committee;
ii. Executive Committee;
iii. Nomination Committee;
iv. Remuneration Committee; and
v. Tender Committee.

Board Meetings and Supply of Information to the Board

The Board meets on scheduled basis, at least four (4) times a year, where it deliberated upon and considered variety of matters such as the Groups financial performance and review of operation of the Company.

Board meetings are structured with a set of agenda. The Board papers are circulated prior to the meeting to enable the Board to understand each matter to be deliberated at the Board meeting and expedite decision-making process.

Appointment of Board Members

The Nomination Committee recommends the proposed appointment of a new member of the Board.

The duties and responsibilities of the Nomination Committee are as follows:

Evaluate suitability of candidates against the organisations objectives, goals and business nature based on the selection criteria and other means deemed necessary;
Review contribution of individual Directors and effectiveness of the Board as a whole with its mix of skills and experience and other qualities, including independent non-executive directors as well as chief executive officer;
Make recommendations to the Board on candidates for directorship for both the executive and non-executive on the Board of the Company and its Group;
Recommend suitable orientation, educational and training programmes to continuously train and equip both existing and new Directors; and
Examine the size of the Board to determine its effectiveness.

Re-election

In accordance with the Companys Articles of Association, one-third (1/3) of the Board or if their number is not a multiple of three (3), the number nearest to, but not exceeding one third shall be subject to retirement by rotation at each Annual General Meeting. In any case, each Director shall retire from office at least once every three (3) years. These retiring Directors shall be eligible for re-election.

B. DIRECTORS REMUNERATION

The Remuneration Committee consists exclusively of Non-Executive Directors. The Remuneration Committee is responsible in recommending Groups framework, policy and procedures used to determine and review specific remuneration packages of the Managing Director as well as the senior key management of the Group. Directors do not participate in decisions involving their own remuneration packages.

C. SHAREHOLDERS

The Company acknowledges the importance of communication channel between the Board, shareholders and other stakeholders. The annual reports, quarterly financial results, press release and corporate announcements are the primary modes of disseminating information on the Groups performance and operation.

It has been the Companys practice to send the Notice of Annual General Meeting (AGM) and related papers to shareholders at least twenty-one (21) days before the meeting. At the AGM, the shareholders are encouraged to ask questions both about the resolutions being proposed or about the Companys operations in general. A press conference is normally held immediately after the AGM for the Board to clarify and explain any issues raised.

D. ACCOUNTABILITY & AUDIT

Financial Reporting

The Board aims to provide and present a balanced and meaningful assessment of the Companys and Groups financial performance and prospects, primarily through the annual financial statements, quarterly announcement of results to shareholders as well as the Chairmans statement and review of operations in the Annual Report. The Board is assisted by the Audit Committee to oversee the Groups financial reporting processes and the quality of its financial reporting to ensure accuracy, adequacy and completeness.

Relationship with the External Auditors

The Board through the establishment of Audit Committee maintains a formal and transparent arrangement with the Companys Auditors. The external auditors independently report their conclusions and recommendation to the Audit Committee and from time to time, bring to the attention, of any significant deficiency in the Groups system of control.

Note: Refer to our current Annual Report for the full disclosure of our main corporate governance practices that were in place for the financial year 31 December 2008.