21
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
CORPORATE GOVERNANCE
STATEMENT
The Board of Frontken Corporation Berhad (the “Company”) recognises the importance of adopting high standards
of corporate governance in the Company in order to safeguard stakeholders’ interests as well as enhancing
shareholders’ value. The Directors consider corporate governance to be synonymous with four key concepts,
namely transparency, accountability, integrity as well as corporate performance.
This corporate governance statement (the “Statement”) sets out how the Company has applied the 8 Principles
of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) and observed the 26 Recommendations
supporting the Principles during the financial year. Where a specific Recommendation of the MCCG 2012 has not
been observed during the financial year under review, the non-observation, including the reasons thereof and, where
appropriate, the alternative practice, if any, is mentioned in the Statement.
Principle 1 – Establish clear roles and responsibilities
1.1 The Board should establish clear functions reserved for the Board and those delegated to
Management
To enhance accountability, the Board has established clear functions reserved for it 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 Group’s operations are in its hands. Key matters reserved for the Board include,
inter-alia, the approval of annual budgets, quarterly and annual financial statements for announcement, investment
and divestiture, as well as monitoring of the Group’s financial and operating performance. Such delineation of roles
is clearly set out in the Board Charter (the “Charter”), which serves as a reference point for Board activities.
To assist the Board in fulfilling its duties and responsibilities, the Board has established the Audit Committee,
Nomination Committee and Remuneration Committee. Each Committee is tasked with specific functions to operate
within its terms of reference, which are included in the Charter. The ultimate responsibility for decision making,
however, lies with the Board.
1.2 Board should establish clear roles and responsibilities in discharging its fiduciary and leadership functions
Reviewing and adopting a strategic plan for the Company
The strategic initiatives of the Board are deliberated at its scheduled meetings where the goals of the Group are
also discussed and formalised, culminating in the development of a comprehensive Group budget for the Board’s
approval. Resources are identified and allocated accordingly towards meeting such goals and objectives. In addition,
for any new business ventures, a proper and well researched meeting paper is required for tabling at the Board
meeting so that the matter can be deliberated and decided without delay.
Overseeing the conduct of the Company’s business
The Executive Chairman, who is also the Managing Director of the Company, leads the Board and is also involved
in the Company’s day-to-day management. He is supported by an Executive Director and a management team
in managing the Group’s business. The Board’s role is to oversee the performance of Management to determine
whether the business is properly managed. The Board gets updates from Management at the quarterly Board
meetings when reviewing the unaudited quarterly results and annual audited financial statements. During such
meetings, the Board participates actively in the discussion of the performance of the Company.
Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation
measures
The Company engaged an external service provider to assist the Board in establishing an Enterprise Risk Management
framework for the Group, formalizing, amongst others, the processes to identify, evaluate, control, report and monitor
significant business risks faced by the Group. The Board has approved the Enterprise Risk Management Framework
for adoption across the Group. The Board, via its Audit Committee, reviews the outcome of risk assessment,
including the implementation of appropriate internal controls and mitigation measures to address the risks identified.
Further details of the Enterprise Risk Management Framework are set out in the Internal Control Statement in this
Annual Report.
