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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
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.
CORPORATE GOVERNANCE
STATEMENT