OPTIMIZING OPPORTUNITIES

Transcription

1 OPTIMIZING OPPORTUNITIES ANNUAL 20 REPORT 14

2 CONTENTS 2 Notice of Annual General Meeting 5 The Company 6 Corporate Information 8 Group Financial Highlights 9 Group Structure 10 Chairperson s Statement 18 Board of Directors 20 Directors Profile 34 Key Management 36 Profiles of Key Management 38 Location of Operations 39 Business Activities of Tanah Makmur Berhad 46 Audit Committee Report 52 Corporate Governance Statement

3 63 Statement on Risk Management and Internal Controls 66 Corporate Social Responsibility 68 Additional Compliance Information 71 Financial Calendar 71 Statement of Directors' Responsibility in Respect of The Annual Audited Financial Statements 72 Financial Statements 172 Information on Substantial Shareholders 173 Shareholdings Statistics 174 Directors Interest in Shares 175 List of Thirty Largest Shareholders 177 Material Properties Held by The Group COVER RATIONALE In 2014, Tanah Makmur Berhad's growth momentum continues at an impressive pace. Our ability to fully optimize the opportunities that have come our way has resulted in significant expansion. Our desire to enhance shareholder s value is balanced by our genuine concern for the environment. Emerging from a challenging operating environment in 2013, the values of our plantations have increased, amidst further launchings of properties and the humanising of our business operations to spur growth. Guided by our corporate vision, we are advancing into a promising future. Proxy Form

4 Page 2 Annual Report 2014 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the sixth Annual General Meeting of Tanah Makmur Berhad ( Tanah Makmur or the Company ) will be held on Tuesday, 16th June 2015 at am at Meranti Room 1, Hyatt Regency Kuantan Resort, Telok Chempedak, Kuantan, Pahang Darul Makmur to transact the following purposes: AGENDA As Ordinary Business 1. To receive the Audited Financial Statement for the financial year ended 31 December 2014 together with the Reports of the Directors and Auditors thereon.(please refer to Note A) 2. To re-elect the following Directors each of whom retires pursuant to Article 95 of the Company s Articles of Association: 2.1 YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah Ordinary Resolution YBhg. Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman Ordinary Resolution 2 3. To re-elect Puan Darawati Hussain binti Dato Seri Abdul Latiff who retires pursuant to Article 101 of the Company s Articles of Association. Ordinary Resolution 3 4. To re-elect YM Tengku Dato Zubir bin Tengku Dato Ubaidillah who retires pursuant to Article 105 of the Company s Article of Association. Ordinary Resolution 4 5. To approve the payment of Directors fees for the financial year ended 31 December Ordinary Resolution 5 6. To re-appoint Messrs. Ernst & Young as Auditors for the ensuing year and to authorise the Directors to fix their remuneration. Ordinary Resolution 6 As Special Business To consider and if thought fit, to pass the following resolutions with or without any modification: 7. General Authority For The Directors To Issue Shares Pursuant To Section 132D Of The Companies Act, 1965 That subject to the Companies Act, 1965, the Articles of Association of the Company and the approvals from Bursa Malaysia Securities Berhad and other relevant government/regulatory authorities, where such approval is necessary the Directors of the Company be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965, to issue new ordinary shares of RM0.50 each in the Company at any time upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued and paid-up share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. Ordinary Resolution 7 By Order of the Board SUZILAH BINTI HAJI WAHID (LS ) TEH FOO HOCK (MIA 10750) Company Secretaries Kuantan 22 May 2015

5 Page 3 Annual Report 2014 Notice of Annual General Meeting Notes on Proxy: 1. Only members whose names appear in the Record of Depositors on 9 June 2015 (General Meeting Record of Depositors) shall be eligible to attend and vote at the meeting as well as for appointment of proxy(ies) to attend and vote on his/her stead. 2. A member of the company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. 3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised or where the appointment is executed by a corporation, it must be either under seal or under the hand of its attorney duly authorised. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at a meeting. 4. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting. 5. Where the holder or the authorised nominee shall be entitled to appoint not more than two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies to attend and vote at the same meeting such appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy. 6. Where a member of the Company is an authorised nominee as defined under the Securities Industries (Central Depositories) Act, 1991 ( SICDA ), it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 7. Where a member of the Company is an exempt authorised nominee as defined under the SICDA which holds ordinary shares in the Company for multiple beneficial owners in one 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 SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 8. The instrument of proxy must be deposited at the Registered Address of the Company at Bangunan Tanah Makmur, No. 1, Jalan Besar, Kuantan, Pahang Darul Makmur at least forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

6 Page 4 Annual Report 2014 Notice of Annual General Meeting Explanatory Notes on the Ordinary Business/Special Business: Item 1 of the Agenda A. Agenda item No. 1 is meant for presentation and discussion only as under the provisions of Section 169(1) of the Companies Act, 1965, the Audited Financial Statements do not require the formal approval of shareholders and hence, the matter will not be put forward for voting. Item 7 of the Agenda B. Authority To Issue Shares Under Section 132D The ordinary resolution proposed under Agenda 7 if passed, will give the Directors of the Company, from the date of the 6th Annual General Meeting, authority to issue and allot shares up to 10% of the issued and paid-up share capital of the Company for such purposes as the Directors in their absolute discretion consider to be in the interest of the Company, without having to convene a General Meeting. This authority unless revoked or varied at a General Meeting will expire at the next Annual General Meeting. * The general mandate for issue of shares is a new mandate. The general mandate sought will enable the Directors of the Company to issue and allot shares, including but not limited for further placing of shares for purpose of funding investment(s), working capital and/or acquisitions, at any time to such persons in their absolute discretion without convening a general meeting as it would be both costs and time-consuming to organise a general meeting.

7 Page 5 Annual Report 2014 THE COMPANY Our Company was incorporated in Malaysia under the Companies Act 1965 as a private limited company on 18 December 2008 under the name of Kreatif Selaras Sdn Bhd and we commenced our business on 5 May On 17 October 2013, our name was changed to Tanah Makmur Sdn Bhd and on 29 November 2013, our Company was subsequently converted into a public limited company and assumed its present name of Tanah Makmur Berhad. Our Group is principally involved in the cultivation of oil palms and its ancillary activities comprising the operation of our palm oil mill and compost plant. Our Group is also involved in other non-oil palm related activities such as property development in Pahang, Malaysia.

8 Page 6 Annual Report 2014 CORPORATE INFORMATION BOARD OF DIRECTORS Non-Independent Non-Executive Chairman YAM Tengku Tan Sri Dr. Hajjah Meriam binti Sultan Haji Ahmad Shah Designated as Chairman on 24 September 2013 Managing Director YM. Tengku Dato Zubir bin Tengku Dato Ubaidillah Non-Independent Non-Executive Director YM. Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim YH. Dato Wan Bakri bin Wan Ismail Appointed as Director on 3 December 2013 Independent Non-Executive Director YBhg. Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman Appointed as Director on 3 December 2013 YH. Dato Cheong Keap Tai Appointed as Director on 3 December 2013 YH. Dato Dr. Zaha Rina binti Zahari Appointed as Director on 3 December 2013 YH. Dato Thavalingam a/l C. Thavarajah Appointed as Director on 3 December 2013 Puan Darawati Hussain binti Dato Seri Abdul Latiff Appointed as Director on 9 June 2014 YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim Tuan Haji Abdul Rahim bin Abdullah Alternate Director to YH Dato Wan Bakri bin Wan Ismail Appointed on 11 November 2014 COMMITTEES OF THE BOARD AUDIT COMMITTEE Chairman YH. Dato Cheong Keap Tai Members YH. Dato Dr. Zaha Rina binti Zahari YH. Dato Thavalingam a/l C Thavarajah REMUNERATION COMMITTEE Chairman YBhg. Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman Members YM. Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim YH. Dato Cheong Keap Tai NOMINATING COMMITTEE Chairman YH. Dato Thavalingam a/l C. Thavarajah Members YM. Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim Puan Darawati Hussain binti Dato Seri Abdul Latiff COMPANY SECRETARIES Suzilah binti Haji Wahid (LS ) Teh Foo Hock (MIA 10750) Dr. Nicholas Langley Boden Resigned on 12 May 2014

9 Page 7 Annual Report 2014 Corporate Information REGISTERED OFFICE Bangunan Tanah Makmur No. 1, Jalan Besar Kuantan Pahang Darul Makmur Tel : Fax : / tm@tanahmakmur.com Website : SHARE REGISTRAR Tricor Investor & Issuing House Services Sdn. Bhd. (formerly known as Equiniti Services Sdn. Bhd.) Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra Kuala Lumpur Tel : Fax : is.enquiry@my.tricorglobal.com AUDITORS Ernst & Young Unit 10 D-J, Level 10, Menara Zenith Jalan Putra Square Kuantan Pahang Darul Makmur Tel : Fax : INVESTOR RELATIONS ZJ Communique Suite 22B, 22nd Floor Sunway Tower No. 86, Jalan Ampang Kuala Lumpur Tel : Fax : wailuon@zj.com.my PRINCIPAL BANKERS i) Maybank Islamic Berhad Wisma KCCCI, Lot 46 & 47 Section 18, Jalan Bukit Ubi Kuantan Pahang Darul Makmur Tel : Fax : ii) CIMB Islamic Bank Berhad Jalan Bank Kuantan Bangunan BCB Lot 32, Jalan Bank Kuantan Pahang Darul Makmur Tel : Fax : VALUERS Azmi & Co. (Pahang) Sdn. Bhd. No. A13, 2nd Floor, Jalan Tun Ismail Kuantan Pahang Darul Makmur Tel : Fax : LEGAL ADVISORS i) Noorhuda & Partners B 8028, Tingkat 2 Sri Kuantan Square Jalan Teluk Sisek Kuantan Tel : Fax : ii) Kadir Andri & Partners Level 10, Menara BRDB 285, Jalan Maarof Kuala Lumpur Tel : Fax : STOCK EXCHANGE LISTING Main Market Bursa Malaysia Securities Berhad Listed on 17 July, 2014 Share code : 5251

10 Page 8 Annual Report 2014 GROUP FINANCIAL HIGHLIGHTS RM 000 RM 000 RM 000 RM 000 Revenue 388, , , ,424 EBITDA 112,007 75,639 94, ,910 Profit Before Tax 97,339 61,682 83, ,967 Profit After Tax 72,401 44,691 65,714 85,379 Shareholders Equity 418, , , ,395 RM RM RM RM Net Assets Per Share Net Earnings Per Share Weighted average No. of Shares Issue* 372,089, ,019, ,019, ,019,592 (No. of units) * Adjusted for subdivision of shares to RM0.50 each respectively. REVENUE (RM 000) EBITDA (RM 000) , , , , , , , ,910 PROFIT BEFORE TAX (RM 000) SHAREHOLDERS EQUITY (RM 000) 14 97, , , , , , , ,395

11 Page 9 Annual Report 2014 GROUP STRUCTURE Tanah Makmur Group of Companies are mainly involved in Plantation and Property Development as follows;-

12 Page 10 Annual Report 2014 CHAIRPERSON S STATEMENT Assalamualaikum wbt. and warm greetings. ON BEHALF OF THE BOARD OF DIRECTORS, IT IS MY GREAT PLEASURE TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF TANAH MAKMUR BERHAD (THE COMPANY) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014 (FYE 2014) FOLLOWING THE SUCCESSFUL LISTING OF THE COMPANY ON MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD ON 17 JULY 2014.

13 Page 11 Annual Report 2014 Chairperson s Statement The Company's listing exercise involved initial public offering ("IPO") of million ordinary shares which comprises public issue of million new shares and an offer for sale of million existing shares at an offer price of RM1.25 per share, raising RM65.18 million for the group. The retail offering registered an oversubscription rate of times where the price soared 55% to RM1.94 at the end of closing on debut. FINANCIAL PERFORMANCE For FYE 2014, Tanah Makmur s revenue increased 60% to RM389 million from RM243 million in FYE This was attributable to a 205% increase in revenue from property development segment to RM109 million as well as an 8% increase in revenue from plantation segment to RM194 million. Ancillary to the property development segment, mining of bauxite which commenced in April 2014, recorded a revenue of RM86 million for the FYE In line with increase in revenue, profit attributable to equity holders of the Group increased 26% to RM54 million. Earnings per share increased 38% to 18 sen in FYE 2014 from 13 sen in FYE 2013, accordingly. Shareholders funds improved to RM418 million as at 31 December 2014 as compared to RM323 million as at 31 December Net assets per share attributable to equity holders of Tanah Makmur increased to RM122 million from RM0.93 million in the previous corresponding period. Cash and bank balances increased to RM111 million as at 31 December 2014 from RM47 million a year ago mainly due to proceeds raised from IPO as well as an impressive increase in positive net cash flows from operations. As Chairperson, I am pleased with the group s operational and financial performances. PRE-TAX PROFIT UP 26%

14 Page 12 Annual Report 2014 Chairperson s Statement OPERATIONAL REVIEW PLANTATION The Group operates 13 plantation estates in Pahang with aggregate of 17, ha of plantation lands comprising 11, ha owned and 6, ha leased from Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang ( LKPP ). We have planted 15, ha out of the total plantable area of 17, ha, covering 90% area in total. As at 31 December 2014, 33% of total planted areas are prime mature (9-18 years), 18% young mature (4-8 years) and 17% old mature (19-25 years) and 32% immature. During the FYE 2014, we have planted of 1,973 ha of oil palm (new planting). Our fresh fruit bunches (FFB) production for the FYE 2014 was cautiously noted with a decline of 10.60% to 207,947 mt from 232,605 mt recorded last year due to extreme climate change of wet weather from January March 2014, followed by dry weather until October 2014, and subsequently heavy rainfall from mid-dec 2014 in Pahang. Nonetheless, our FFB yield of mt for the said period is higher than the averages for Pahang (18.41 mt), Peninsular Malaysia (18.23 mt) as well as Sabah and Sarawak (18.98 mt) and Malaysia (18.63 mt). The Group ventured into production of crude palm oil (CPO) with the commissioning of the palm oil mill and compost plant in July Palm kernel (PK) recovery rate was maintained at 5.97% for both FYE 2013 and Oil extraction rate decreased 0.05% to 19.93% in FYE 2014 from 19.98% in the previous year. However, 100% utilization rate of palm oil mill contributed to 20% and 31% increase in PK production and CPO production respectively in FYE PK and CPO production were 11,399 mt and 41,448 mt respectively for the FYE Planted Area as at Financial Year End % 32% PROPERTY DEVELOPMENT We are developing KotaSAS Township measuring 1,500 acres over a span of 15 years within Ladang Bukit Goh in Kuantan for its local community. The township project is a development of residential, commercial, institutional and government premises which can be easily accessed via the East-Coast Expressway and Kuantan By-Pass. As part of our social responsibility, we have allocated areas to develop three primary and two secondary schools, recreational parks, lakes and sports facilities. 33% 18% Immature (0-4 years) Young Mature (4-8 years) Prime Mature (9-18 years) Old Mature (19-25 years)

15 Page 13 Annual Report 2014 Chairperson s Statement We launched 360 units of properties which comprises 320 residential units and 40 units of shop lots at average price of RM312,500 and RM950,000 respectively in December This is our first launch of commercial properties since our venture into property development in We achieved a remarkable take-up rate of 80% for residential and 60% for commercial property for the RM138 million properties launched within one month of the sales launch. To date, we have cumulatively sold properties worth RM468 million. We are proud of our capability to complete and deliver projects ahead of schedule. Among our completion total of 6 development projects from Precinct 1 to Precinct 3 (Phase 2), 2 property projects were on time, 3 projects were one (1) month ahead of schedule whilst 1 project was two (2) months ahead of schedule. Bauxites were discovered during the clearing of certain parts of the land within our Ladang Bukit Goh, Kuantan for our property development activities. Total tonnage of bauxite deposits on the said land is estimated at 1.4 million tons. Since April 2014 we exported a total of 684,389 mt of washed bauxite in FYE Bauxite prices were relatively stable at US$45 to US$47 a tonne throughout FYE Profit Guarantee from Tanah Makmur Perkasa Sdn Bhd In respect of the development agreement dated 8 January 2014 which was subsequently substituted by the amended restated development agreement dated 12 May 2014 ( Development Agreement ) between KotaSAS Sdn Bhd (KotaSAS) and Tanah Makmur Kota SAS Sdn Bhd (Tanah Makmur KotaSAS), it has been agreed upon that both parties shall jointly undertake the development and completion of the Development Project, with Tanah Makmur KotaSAS being the master developer. Pursuant to the above mentioned agreement, Tanah Makmur KotaSAS shall also procure Tanah Makmur Perkasa Sdn Bhd to provide guarantee to KotaSAS that the Aggregate of the cost of the development land and 60% of the development profit that shall be attributable to KotaSAS for five (5) financial years (commencing 1 January 2013 untill 31 December 2017) shall not be less than RM110,000, Total Financial year ended 31 December RM million Yearly minimum guaranteed entitlement comprising the following: Land Cost (1) % of profit before tax (2) Total Notes: (1) The land cost as set out in the table above is the capped amount in so far as it it concerns the determination of whether the yearly minimum guaranteed entitlement is met ( Land Const ). Any amount actually recognised by KotaSAS and Tanah Makmur KotaSAS as Land Cost in any financial year which is in excess of the yearly guaranteed Land Cost will be ignored and shall not be used to determine whether the yearly minimum guarantee entitlement is met. (2) The 60% of profit before tax ( Landowner s Portion ) as set out in the table above shall refer to the profit before tax disclosed in the audited financial statements of Tanah Makmur KotaSAS for each of the financial years. The Landowner s Portion is the minimum amount in so far as it concerns the determination of whether yearly minimum guaranteed entitlement is met. In determining whether the yearly minimum guaranteed entitlement is met, if; (i) (ii) The landowner s Portion in any financial year is in excess of the yearly minimum guaranteed Landowner s Portions as set out in the table above for that year; and the Land Cost actually recognised by KotaSAS in that year is lesser than the yearly guaranteed Land Cost as set out in the table above for that year, then, any amount in excess of the yearly minimum guaranteed Landowner s Portion for that year can be used to top up the deficiency in the Land Cost actually recognised by KotaSAS and Tanah Makmur KotaSAS in that year.

16 Page 14 Annual Report 2014 Chairperson s Statement On behalf of the board of Directors, I would like to inform that there is no shortfall in both the aggregate cost of the development land and 60% of the development profit attributable to KotaSAS for the financial years ended 31 December 2013 and PROSPECTS Our plantation segment is expected to achieve a higher FFB production as more planted areas are entering into their prime age profiles in financial year ending 2015 ( FYE 2015 ). In addition, we are expecting CPO production to increase in the coming year following the anticipated of higher supply of FFB and the expansion of palm oil mill from the current capacity of 30 tonnes per hour ( tph ) to 45 tph which will be completed by We plan to do replanting a total of 1,378.7 ha in will be carried out in three of our plantation estates Ladang Charuk Puting, Ladang Empang Jaleh and Ladang Lembah Klau. We are targeting new plantings of 1, ha which comprises of two plantation estates Ladang Alur Seri and Ladang Ulu Lepar. We have identified two (2) potential plantation lands in Kampong Bongsu and Ulu Lepar with land sizes measuring approximately 1,214 ha and 1,436 ha respectively. We are collaborating with LKPP to secure the acquisition of these lands from the State Government of Pahang. Our property development business has unbilled sales of approximately of RM118 million as at 31 December The Group has total undeveloped landbanks of acres which comprises acres and acres for residential and commercial development respectively for the next 5 10 years for a potential Gross Development Value (GDV) of up to RM 3.00 billion from the presently estimated RM 1.80 billion, taking into consideration the improvements to our property development plans that we have made on the assumption of the relocation of the new State Administrative Complex and a State Assembly Hall to our KotaSAS Township, and favourable market demand for our properties. Encouraged by a strong take-up rate for the properties launched in December 2014, the Group will be launching another 774 residential properties amounting to a GDV of RM355 million until

17 Page 15 Annual Report 2014 Chairperson s Statement November However, the number of the property units to be launched and the estimated GDV for the year will be lower if the prevailing market demand for the properties in Kuantan is not conducive, which will result in the launches being deferred to the subsequent year. Tanah Makmur, via a 65%-owned subsidiary, Kreatif Sinar Gabungan Sdn Bhd, had received a letter of intent for a RM399 million project to build the Sultan Ahmad Shah State Administrative Complex in KotaSAS Township from the State Government of Pahang on 8 December Final decision on awarding the said project is expected in the 2nd half of If the development project of the new State Administrative Complex of the State Government of Pahang is not awarded to us or there is a delay in the award of the said project to us, then the expected returns to our shareholders for these project will not be realised or may be affected. DIVIDENDS Following increase in Tanah Makmur s earnings, a single tier interim dividend of six (6) sen per share for the FYE 2014 was paid on 8 October This represented a dividend payout of 44% against earnings. For the FYE 2015, Tanah Makmur had declared a single tier interim dividend of six (6) sen per share payable on 29 May 2015 which translated into a 4% dividend yield based on the share price of RM1.50. ACKNOWLEDGEMENT On behalf of the Board of Directors, I would like to thank the management and staff of Tanah Makmur Group for their commitment and excellent dedication to the Group. In addition, I would like to take this opportunity to acknowledge the support, prudent counsel and valuable insights extended to me by my fellow Board members throughout the year. My heartfelt gratitude goes to the newly appointed independent directors for their valuable contribution to the Group. I would also like to extend my sincere appreciation to our business associates and partners, government authorities and regulatory bodies, banker and legal advisers. Finally, I am grateful for the unwavering support of all our valued shareholders throughout the year. Our hardwork, initiatives and efforts begun to bear fruit as we achieved improved financial performance for the FYE I look forward to the continued business growth of Tanah Makmur Group delivering sustainable returns to our shareholders. Thank you. YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah Chairperson

18 IMPROVING PEFORMANCE THROUGH TRAINING Our employees are constantly trained and motivated in order for them to perform at their best.

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20 Page 18 Annual Report 2014 BOARD OF DIRECTORS

21 Page 19 Annual Report 2014 Board of Directors YAM Tengku Tan Sri Dr. Hajjah Meriam binti Sultan Haji Ahmad Shah Chairman, Non-Independent Non-Executive Director 02 YM. Tengku Dato Zubir bin Tengku Dato Ubaidillah Managing Director 03 YM. Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim Non-Independent Non-Executive Director 04 YH. Dato Wan Bakri bin Wan Ismail Non-Independent Non-Executive Director 05 YBhg. Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman Independent Non-Executive Director 06 YH. Dato Cheong Keap Tai Independent Non-Executive Director 07 YH. Dato Dr. Zaha Rina binti Zahari Independent Non-Executive Director 08 YH. Dato Thavalingam a/l C. Thavarajah Independent Non-Executive Director 09 Puan Darawati Hussain binti Dato Seri Abdul Latiff Independent Non-Executive Director Not in picture: 10 YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim 11 Tuan Haji Abdul Rahim bin Abdullah Alternate Director to YH Dato Wan Bakri bin Wan Ismail

22 Page 20 Annual Report 2014 DIRECTORS PROFILE YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Ahmad Shah Chairperson, Non Independent Non-Executive Director YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah aged 60 is the Chairman and a Non-Independent Non-Executive Director of the Company. Tengku Tan Sri (Dr) Hajjah Meriam was conferred an Honorary Doctorate of Leadership in Social Development from Lim Kok Wing University in 2013 for her distinguished social contribution. She started her career as the Executive Vice Chairman of T.A.S Industries Sdn Bhd on 1 September She then joined the Board of Kurnia Setia Berhad on 27 June 2005 until 27 May Subsequent to the Privatisation of Kurnia Setia, YAM Tengku Tan Sri (Dr) Hajjah Meriam assumed the positions of Deputy Chairman of Tanah Makmur on 31 January 2011 and thereafter as the Chairman on 24 September Currently, she also sits on the Board of Directors of various private limited companies and several voluntary organisations. YAM Tengku Tan Sri (Dr) Hajjah Meriam attended all six (6) Board Meetings of the Company held during the financial year ended 31 December 2014.

23 Page 21 Annual Report 2014 Directors Profile YM Tengku Dato' Zubir bin Tengku Dato' Ubaidillah Managing Director YM Tengku Dato' Zubir bin Tengku Dato' Ubaidillah aged 52 was appointed to the Board on 27 October 2010 and has been the Managing Director of the Company since 30 November He graduated with a Bachelor of Science (Computer Science) from California State University, Chico, USA in YM Tengku Dato Zubir started his career in 1986 with Petroliam Nasional Berhad ( PETRONAS ) as an information system executive. He was then promoted to the position of head of computer operation in PETRONAS. In 1988, he joined the Road Builder (M) Holdings Berhad s group of companies as the Corporate Affairs Manager and was appointed as their Group General Manager, property division in 1994 to From 1998 to 2004, he was involved in his own private businesses which include the construction of East Coast Expressway, trading in construction materials and quarrying. He joined Kurnia Setia Berhad on 1 July 2005 as the General Manager of Corporate Development and on 1 January 2006 he was appointed as the Chief Operating Officer. On 8 November 2008, he assumed the position of Managing Director of Kurnia Setia Berhad. Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, YM Tengku Dato Zubir was transferred to Tanah Makmur Berhad and assumed the current position as the Managing Director of Tanah Makmur Berhad. Currently, he is the Chairman, Executive Director and a director of various subsidiaries within Tanah Makmur Group of Companies and hold directorship in several private limited companies. YM Tengku Dato Zubir attended all six (6) Board Meetings held during the financial year ended 31 December 2014.

24 Page 22 Annual Report 2014 Directors Profile YM Tengku Dato' Sri Ahmad Faisal bin Tengku Ibrahim Non-Independent Non-Executive Director YM Tengku Dato' Sri Ahmad Faisal bin Tengku Ibrahim aged 49 was appointed as a Non-Independent Non-Executive Director on 31 January Tengku Dato Sri Ahmad Faisal is a member of the Remuneration and Nominating Committee. He is also the Chairman of Kreatif Selaras Mining Sdn Bhd and a Director of Tanah Makmur KotaSAS Sdn Bhd, subsidiaries of Tanah Makmur Berhad. He graduated with a Bachelor of Science (Hons) Degree from the London School of Economics, United Kingdom in He began his career in 1988 as a dealers representative with RHB Securities Berhad until 1990 and thereafter with PB Securities Berhad from 1991 to He assumed the position as a Chief Executive Officer in Kitaran Ventures Sdn Bhd from 1997 to He also held directorships in ING Bhd from 1994 to 2012, Ekovest Berhad from 1995 to 1998, Nanyang Press Holdings Berhad from 1996 to 2001, Putrajaya Perdana Berhad from 2008 to 2009 and EON Capital Bhd from 2010 to Currently, he sits on the Board of Directors of several private limited companies. YM Tengku Dato Sri Ahmad Faisal attended all six (6) Board Meetings of the Company held during the financial year ended 31 December 2014.

25 Page 23 Annual Report 2014 Directors Profile YH Dato Wan Bakri bin Wan Ismail Non-Independent Non-Executive Director YH Dato Wan Bakri bin Wan Ismail aged 60 was appointed as a Non-Independent Non-Executive Director on 3 December He is the representative from Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP). He graduated with a Bachelor of Social Science majoring in Political Science from Universiti Sains Malaysia in He started his career with LKPP as a supervisor in 1980 and was then promoted as Executive Administration Officer in He was appointed as Administration Manager in 2002 and as Finance Manager in He assumed the position of Deputy General Manager of LKPP in 2011 until his promotion to the position of General Manager in YH Dato Wan Bakri has more than 30 years experience in agriculture industry primarily in the field of oil palm. Currently, YH Dato Wan Bakri also sits on the Board of Directors of Astral Asia Berhad, Far East Holdings Berhad and hold directorship in various subsidiaries of LKPP. YH Dato Wan Bakri attended five (5) out of six (6) Board Meetings of the Company held during the financial year ended 31 December 2014.

26 Page 24 Annual Report 2014 Directors Profile YBhg Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman Independent Non-Executive Director YBhg Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman aged 69 was appointed to the Board as an Independent Non-Executive Director on 3 December Tan Sri Dato Sri Abdul Aziz is the Chairman of the Remuneration Committee. He graduated with a Bachelor of Commerce from University of New South Wales, Sydney, Australia in He is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants (MIA). He was a consultant with Price Waterhouse & Co (Sydney) Australia from 1969 to He then joined Malaysian Airlines System Berhad as Finance Manager from 1972 to Soon after that, he assumed the position of Managing Director of Bank Kerjasama Rakyat Malaysia Berhad (now known as Bank Rakyat Berhad) from 1981 to He has served as Chairman and Board member of several government institutions before venturing into politics and public service as the Pahang State Assemblyman, State Executive Councillor and Deputy Chief Minister of Pahang. He was a Senator of Malaysian Parliament for a maximum period of two terms. Tan Sri Dato Sri Abdul Aziz held directorship in the Federal Land Development Authority (FELDA) from 1986 to 1991, Chairman of Mentiga Corporation Berhad from 1989 to 1993 and the Chairman of Far East Holdings Berhad from 1991 to In the field of education, Tan Sri Dato Sri Abdul Aziz also sits on the Board of University Malaysia Pahang and International Islamic University Malaysia. Currently, Tan Sri Dato Sri Abdul Aziz sits on the Board of Directors of Affin Islamic Bank Berhad, Chuan Huat Resources Berhad, Asian Healthcare Group Berhad and various private limited companies. YBhg Tan Sri Dato Sri Abdul Aziz attended four (4) out of six (6) Board Meetings held during the financial year ended 31 December 2014.

27 Page 25 Annual Report 2014 Directors Profile YH Dato Cheong Keap Tai Independent Non-Executive Director YH Dato Cheong Keap Tai aged 66 was appointed to the Board as an Independent Non-Executive Director on 3 December Dato Cheong is the Chairman of Audit Committee and also a member of the Remuneration Committee. He graduated with a Bachelor of Accountancy from the National University of Singapore in He is a Chartered Accountant and a member of Malaysian Institute of Accountants (MIA), a member of the Malaysian Institute of Certified Public Accountants (MICPA) and a member of the Malaysia Association of the Institute of Chartered Secretaries and Administrators (MAICSA). He is also a member of the Chartered Tax Institute of Malaysia (CTIM), a member of the Institute of Cooperatives Auditors and a Licensed Tax Agent. He began his career as a member of the audit staff in Coopers & Lybrand, Malaysia in 1974 to 1986 and subsequently as the Executive Director and Partner of Coopers & Lybrand in 1986 to Upon its merger with Pricewaterhouse, he was the Executive Director and Partner of PricewaterhouseCoopers and Chairman of the Governance Board of PricewaterhouseCoopers until his retirement in December He held directorship in Cement Industries of Malaysia Berhad from 2001 to 2009, Opus Group Berhad from 2007 to 2009 and Opus International Group Plc from 2001 to Currently, he is a Partner of Ash ari Cheong Chartered Accountants and hold directorship in YTL Corporation Berhad, YTL Land & Development Berhad, YTL e-solutions Berhad, Gromutual Berhad and several private limited companies. YH Dato Cheong attended all six (6) Board Meetings of the Company held during the financial year ended 31 December 2014.

28 Page 26 Annual Report 2014 Directors Profile YH Dato Dr Zaha Rina binti Zahari Independent Non-Executive Director YH Dato Dr Zaha Rina binti Zahari aged 53 was appointed to the Board as an Independent Non-Executive Director on 3 December Dato Dr Zaha Rina is a member of the Audit Committee. She obtained her BA (Hons) Accounting and Finance from Leeds Metropolitan University, United Kingdom in 1984, a Master of Business Administration from University of Hull, United Kingdom in 1991 and a Doctorate in Business Administration in 2002, focusing on capital markets research and specialising in derivatives from the same university. She started her career as a finance executive in Sri Communication Engineering Sdn Bhd in 1984 and assumed the position of Director of Finance and Administration in Sri Communication Group until Dato Dr Zaha Rina has more than 20 years of experience in the financial, commodities and security industry. She has previous Board appointments at the Commodity and Monetary Exchange of Malaysia (COMMEX) from 1993 to 1996 and assumed the position of Chief Operating Officer (COO) of Kuala Lumpur and Financial Futures Exchange (KLOFFE) and Malaysian Derivatives Exchange (MDEX) in She was then appointed as the Head of Exchanges, managing the operations of KLSE (now known as Bursa Securities), MESDAQ, MDEX and Labuan International Financial Exchanges in September 2003, prior to KLSE s demutualisation. In 2004 until 2006, she assumed the position of Chief Executive Officer of RHB Securities Sdn Bhd. She was also the consultant to Financial Technologies Middle East for the setting up of Bahrain Financial Exchange (BFX) which was launched in January Prior to this, she was with RBS Group in Singapore from August 2007 to May She has been a director of MAA Takaful Bhd from 2008 to 2012, EON Capital Bhd and EON Bank Bhd from 2010 to 2011, MIMB Investment Bank Berhad from 2011 to 2013 and Zurich Insurance Malaysia Berhad from 2012 to Currently, Dato Dr Zaha Rina sits on the Board of Directors of Hong Leong Industries Berhad, Pacific & Orient Berhad, Manulife Holdings Berhad and several other private limited companies. Dato Dr Zaha Rina attended all six (6) Board Meetings of the Company held during the year financial year ended 31 December 2014.

29 Page 27 Annual Report 2014 Directors Profile YH Dato Thavalingam A/L C. Thavarajah Independent Non-Executive Director YH Dato Thavalingam A/L C. Thavarajah aged 49 was appointed to the Board as an Independent Non-Executive Director on 3 December Dato Thavalingam is the Chairman of Nominating Committee and a member of the Audit Committee. He graduated with a Bachelor of Law from Liverpool Polytechnic, United Kingdom in 1988 and was subsequently called to the Bar at Gray s Inn, London, United Kingdom in He was then called to the Malaysian Bar in He commenced his legal practice in Messrs Shearn Delamore & Co after he was called to the Malaysian Bar. He became a partner at Messrs Zaid Ibrahim & Co from 2000 to He is currently a partner with Messrs Lee Hishamuddin Allen & Gledhill. He also sat on the board of director of Gading Sari Aviation Services Sdn Bhd from 2010 to YH Dato Thavalingam had been appointed by the Government in 2008 to serve on the National Labour Advisory Council for a two-year term. He was also the honorary secretary of the Malaysian Employers Federation from 2006 to He currently sits on the Editorial Advisory Board of the Industrial Law Reports. Dato Thavalingam attended all six (6) Board Meetings held during the year financial year ended 31 December 2014.

30 Page 28 Annual Report 2014 Directors Profile Darawati Hussain binti Dato Seri Abdul Latiff Independent Non-Executive Director Puan Darawati Hussain binti Dato Seri Abdul Latiff aged 45 was appointed to the Board as an Independent Non-Executive Director on 9 June Puan Darawati Hussain is a member of the Nominating Committee. She graduated with a Bachelor Degree in Economics and Accountancy from Durham University, United Kingdom in 1991 and a Master in Business Administration from London Business School, United Kingdom in She had also obtained the Chartered Financial Analyst (CFA) qualification in She started her career in 1991 as an Executive of Corporate Finance/advisory with Commerce International Merchant Bankers Berhad and subsequently left as a Manager in She then spent five years from 1997 to 2001 in London where she was a European Equities Portfolio Manager in Mondrian Investment Partners Limited, a fund management company. In September 2001, she rejoined CIMB group to set up and develop the private equity arm, where she was the Head of Private Equity and Venture Capital of CIMB until August 2012, overseeing a private equity portfolio of more than 50 companies that operate in different sectors and in various stages of business maturity. Subsequently, she was made head of Co-investor and Fund Relations of CIMB Group Strategy and Strategic Investments (CIMB GSSI) until April Puan Darawati Hussain is presently a business entrepreneur in investment and property investment. Currently, she sits on the Board of Director of Masterskill Education Group Berhad and several other private limited companies. Puan Darawati Hussain attended two (2) out of three (3) Board Meetings held during the financial year ended 31 December 2014 subsequent to her appointment to the Board on 9 June 2014.

31 Page 29 Annual Report 2014 Directors Profile YM Tengku Dato' Sri Uzir bin Tengku Dato Ubaidillah Alternate Director to YM Tengku Dato' Sri Ahmad Faisal bin Tengku Ibrahim Non-Independent Non-Executive Director YM Tengku Dato' Sri Uzir bin Tengku Dato Ubaidillah aged 56 was appointed to the Board as a Non-Independent Non-Executive Director on 3 December He is an Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim. He graduated with a Bachelor of Science (Hons) Degree in Civil Engineering from the University of London, United Kingdom in He started his career in Jabatan Kerja Raya as the Design and Research Section Geotechnical Engineer in He was then promoted to the position of Assistant Resident Engineer under Felda Unit of Jabatan Kerja Raya in 1984 until He joined Road Builder (M) Sdn Bhd as a Director from 1988 to 1999 and he also held the position of Director of Road Builder (M) Holdings Berhad between 1992 and He was also the Director cum Group Chief Executive officer of Malaysian Investment Corporation Berhad from 1990 to He joined Kurnia Setia Berhad on 19 November 2004 as a non-executive Director, a nominee of HRH Tengku Abdullah Ibni Sultan Haji Ahmad Shah. Subsequent to the Privatisation of Kurnia Setia Berhad, YM Tengku Dato Seri Uzir bin Tengku Dato' Ubaidillah was transferred to Tanah Makmur Berhad and assumed the position of Executive Director of Tanah Makmur on 1 January He resigned on 3 December 2013 from his position of Executive Director of Tanah Makmur and on the same day he was appointed as the Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim. Currently, he is a director of Kumpulan Unik BBP Sdn Bhd, a position he holds since 1997, an Executive Chairman of WZ Satu Berhad and he also sits on the Board of Directors of various private limited companies. YM Tengku Dato Sri Uzir did not attend any Board Meeting of the Company held during the financial year ended 31 December 2014 subsequent to his appointment as an Alternate Director. Tuan Haji Abdul Rahim bin Abdullah Alternate Director to YH Dato Wan Bakri bin Wan Ismail Non Independent Non-Executive Director Tuan Haji Abdul Rahim bin Abdullah aged 54 was appointed to the Board as a Non-Independent Non-Executive Director on 11 November He is an Alternate Director to YH Dato Wan Bakri bin Wan Ismail, representing LKPP Negeri Pahang (LKPP). He graduated with a Bachelor Degree in Agricultural Science from University Putra Malaysia in He started his career in the government sector in 1984 as an Agricultural Officer of Lembaga Padi Negeri Pahang and in 1989 he joint LKPP as a Senoir Agricultural Officer. He was then promoted to an Administrative Officer grade N48 in 2011 and to grade N52 in Tuan Haji Abdul Rahim was promoted to Deputy General Manager of LKPP in 2014 until present. He sits on the Board of several subsidiary companies of LKPP. Tuan Haji Abdul Rahim did not attend any Board Meeting of the Company held during the financial year ended 31 December 2014 subsequent to his appointment as an Alternate Director.

32 Page 30 Annual Report 2014 Directors Profile 1. Family relationship with Director and/or Major Shareholder Save as disclosed below, none of the Directors of the Company have any family relationship with the other Directors and/or major shareholders of the Company or have any conflict of interest with the Company: a) YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah (i) sisters to KDYTM Tengku Abdullah Ibni Sultan Haji Ahmad Shah; a major shareholder of the Company (ii) director and shareholder of TAS Industries Sdn Bhd; a major shareholder of the Company (iii) related to YM Tengku Dato Zubir bin Tengku Dato Ubaidillah and YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim (iv) related to YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah; an alternate director and major shareholder of the Company b) YM Tengku Dato Zubir bin Tengku Dato Ubaidillah (i) related to YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah and YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim (ii) brother to YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah; an alternate director and major shareholder of the Company (iii) related to KDYTM Tengku Abdullah Ibni Sultan Haji Ahmad Shah; a major shareholder of the Company c) YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim (i) related to YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah and YM Tengku Dato Zubir bin Tengku Dato Ubaidillah (ii) related to YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah; an alternate director and major shareholder of the Company (iii) related to KDYTM Tengku Abdullah Ibni Sultan Haji Ahmad Shah; a major shareholder of the Company d) YH Dato Wan Bakri bin Wan Ismail (i) representative of LKPP Negeri Pahang; a major shareholder of the Company e) YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah (Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim) (i) brother to YM Tengku Dato Zubir bin Tengku Dato Ubaidillah (ii) related to YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah and YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim (iii) related to KDYTM Tengku Abdullah Ibni Sultan Haji Ahmad Shah; a major shareholder of the Company f) Tuan Haji Abdul Rahim bin Abdullah (Alternate Director to YH Dato Wan Bakri bin Wan Ismail) (i) Representative of LKPP Negeri Pahang; a major shareholder of the Company 2. All the Directors are Malaysian and maintain a clean record with regards to convictions for offences within the past 10 years

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34 VISIONARY PLANNING ENSURES SUCCESS Through detailed planning, we are able to ensure that KotaSAS will be a flourishing township and self-contained community.

35 ADDITIONAL INFORMATION FINANCIAL REPORT ACCOUNTABILITY BUSINESS REVIEW NOTICE

36 Page 34 Annual Report 2014 KEY MANAGEMENT YM. TENGKU DATO ZUBIR BIN TENGKU DATO UBAIDILLAH MR. TEH FOO HOCK Managing Director Chief Financial Officer ALIAS BIN AWANG SUZILAH BT. HAJI WAHID General Manager, Estate Development Company Secretary ABDUL RAZAK BIN MD. YUSOF MOHD AZMI BIN BUSU AZLAN SHAH BIN MOHD YUSOH General Manager, Finance & Accounts Senior Manager, Finance & Accounts Senior Project Manager

37 Page 35 Annual Report 2014 Key Management TUMARAN BIN WONGSO ASHRAF BIN ABBAS Head of Human Resources and Administration Head of Corporate Development MOHD AZMAILI BIN ISMAIL Head of Internal Audit KOTASAS SDN BHD YM TENGKU AMIR NASSER IBNI TENGKU IBRAHIM Head of KotaSAS, Administration & Finance SRI JELUTUNG PALM OIL MILL SDN BHD HISHAMUDDIN BIN MOHD YUNUS Head of Palm Oil Mill Operations MOHD FARIZAN BIN MOHD DALIMI Head of KotaSAS, Technical Aspects & Projects

38 Page 36 Annual Report 2014 PROFILES OF KEY MANAGEMENT YM Tengku Dato Zubir bin Tengku Ubaidillah is the Managing Director of Tanah Makmur Berhad. For details of YM Tengku Dato' Zubir bin Tengku Ubaidillah, please refer to page 21 of this Annual Report. Teh Foo Hock is the Chief Financial Officer and Joint Company Secretary of Tanah Makmur Berhad. He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants (MIA) since He is also an associate member of the Malaysian Institute of Taxation since 1997 and the Institute of Internal Auditors of Malaysia since He started his career with the Messrs. Coopers & Lybrand (now known as PricewaterhouseCoopers) ( PwC ) in He held a few positions in PwC, including audit senior and audit supervisor. He joined Kinsteel Berhad in May 1997 as a Group Accountant. In 2002, his job responsibility was expanded to include Head of Treasury and held the role as a Joint Company Secretary of Kinsteel Berhad from August 2012 to September On 1 May 2014, he joined Tanah Makmur Berhad and assumed his current position. Suzilah binti Haji Wahid is our Company Secretary. She pursued the professional course of Institute of Chartered Secretaries and Administrators in University Teknologi MARA and in 1985 furthered the said course in London School of Accountancy, United Kingdom. In 1992, she obtained her licence to act as Company Secretary from the Companies Commissions of Malaysia and she is also an associate member of the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). She began her career in 1987 with LKPP Negeri Pahang as the Group Company Secretary where she served for more than 8 years. She subsequently joined Kurnia Setia Berhad as the Group Company Secretary on 7 November Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, she was transferred to Tanah Makmur Berhad and assumed her current position. Abdul Razak bin Md Yusof is our General Manager, Finance and Accounts. He graduated with a Diploma in Accountancy from University Teknologi Mara in 1991 and obtained a Bachelor of Accountancy (Honours) from the same university in He is a member of the Malaysian Institute of Accountants (MIA) since April He started his career in 1978 with Syarikat Ladang LKPP Sdn Bhd. He then joined Kurnia Setia Berhad in 1984 as a special grade accounts clerk and in 1992 he was then promoted to an Account Executive. In 1995, he was appointed as an Assistant Account Manager and subsequently as Finance Manager in In 2008, he was then promoted to a Senior Finance Manager. Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and assumed his current position on 1 July Alias bin Awang is our General Manager, Plantation. He graduated with a Diploma in Planting Industry Management from University Technology Mara in 1989 and in 2012 he obtained a Master of Business Administration from University Utara Malaysia. He started his career in 1990 with Golden Hope Berhad as a Cadet Assistant Manager. In 1991, he then moved to Austral Enterprises Berhad as an Assistant Manager. He later joined Kosma Plantation Berhad from 1999 to He assumed the position of a Plantation Manager of IOI Corporation Berhad from 2002 to He joined Kurnia Setia Berhad as the Head of plantation development in Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and assumed his current position on 1 July Azlan Shah bin Haji Mohd Yusoh is our Senior Project Manager. He graduated with a Bachelor of Science in Land Surveying and Mapping Science from University of Newcastle-upon-Tyne, United Kingdom in He began his career in 1997 with Highway Development Corporation Sdn Bhd. In 2002 he joined Tastu Bina Sdn Bhd as an Administration and Safety Manager. From 2002 to 2005, he was the Head of plant, machinery and equipment of BBP Bina Sdn Bhd. He joined Kurnia Setia Berhad as the Project Manager in 2006 and was promoted to the position of a Senior Project Manager on 1 April He also holds directorships in several subsidiary companies of Tanah Makmur Berhad. Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and assumed his current position.

39 Page 37 Annual Report 2014 Profiles of Key Management Mohd Azmi bin Busu is our Senior Manager, Finance and Accounts. He graduated with a Degree in Accountancy, University Utara Malaysia in He is a member of the Malaysia Institute of Accountants (MIA) since He started his career in 1996 with Automotive Manufacture Malaysia Sdn Bhd, a subsidiary of DRB Hicom Bhd. In 2003, he assumed the position of an Accountant with Pengangkutan Petikemas Sdn Bhd. In 2004, he joined Kuantan Medical Centre Sdn Bhd, a subsidiary of TDM Bhd until He then joined Kuala Terengganu Specialist Hospital Sdn Bhd acting as General Manager from 2007 until He then joined Prizams Petrochem Sdn Bhd and held position as a General Manager until In 2011, he joined Tanah Makmur Berhad as an Assistant Manager, Finance and Account and subsequently in 2012 he was promoted to Senior Assistant Manager. He was then promoted to Finance and Account Manager in 2013 and subsequently assumed the current position in January Tumaran bin Wongso is the Head of Human Resources and Administration. He graduated with a Bachelor of Applied Science from Universiti Sains Malaysia in He began his career on 1 June 1985 with Syarikat Ladang LKPP Sdn Bhd as a Plant Operating Officer. In 1993, he joined Kurnia Setia Berhad as a Human Resources and Administration Manager. Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and assumed the current position. Ashraf bin Abbas is the Head of Corporate Development. He graduated with a Bachelor of Science in Business Administration from California State University, Sacramento, USA in He began his career with Kewangan Usaha Bersatu Berhad as Credit and Marketing Officer in He joined Malaysia Building Society Berhad in 1993 as a Branch Manager. He then joined Kurnia Setia Berhad as an Audit Executive in From 2006 to 2009, he was the Assistant Manager of corporate development and was promoted to Corporate Development Manager on 1 April Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and assumed the current position. Mohd Azmaili bin Ismail is the Head of Internal Audit. He graduated with a Bachelor of Management (Honours) from Open University, Kuala Lumpur in He is an associate member of the Institute of Internal Auditors Malaysia since September He began his career in 1984 with Syarikat Ladang LKPP Sdn Bhd. In 1992, he joined Kurnia Setia Berhad as a special grade accounts clerk and was promoted to an Internal Audit Executive in In 2004, he was then promoted to an Assistant Manager, Internal Audit. Subsequent to the Privatisation of Kurnia Setia Berhad in 2010, he was transferred to Tanah Makmur Berhad and promoted to the current position in July Mohd Farizan bin Md Dalimi is the Head of KotaSAS Sdn Bhd, in charge of technical aspects and projects. He graduated with a Bachelor of Civil Engineering from Universiti Teknologi Malaysia in He began his career in 2002 with Kumpulan Unik BBP Sdn Bhd as a Project Engineer until During his employment with Kumpulan Unik BBP Sdn Bhd, he was involved in several projects in relation to PLUS Expressways, East Coast Expressway and project work under Jabatan Kerja Raya Malaysia. In July 2011, he joined Tanah Makmur as the Project Manager and was subsequently promoted to the current position in August YM Tengku Amir Nasser Ibni Tengku Ibrahim is the Head of KotaSAS Sdn Bhd, in charge of administration and finance. He graduated with a Bachelor in Business and Marketing Management from Oxford Brookes University, United Kingdom in He interned with ING Funds in 2007 and was involved in promoting financial products. In 2010, he joined Parish Capital Advisors Europe LLP as a trainee. In January 2012, he joined Tanah Makmur as the Project Manager. He was subsequently promoted to the current position in January Hishamuddin bin Mohd Yunus is the Head of Palm Oil Mill Operations. He graduated with a Diploma in Mechanical Manufacturing from Universiti Teknologi Mara in 1998 and a Diploma in Palm Oil Milling Technology and Management from Malaysia Palm Oil Board in He obtained a second grade Steam Engineer Certification from the Department of Safety and Health of Malaysia in He began his career in 2002 with Kumpulan Guthrie Berhad as an Assistant Manager and was promoted to the position of Mill Manager in 2006 under the same company. In 2012, he joined Prosper Group of Companies as their Mill Manager. In May 2013, he then joined Sri Jelutung Palm Oil Mill Sdn Bhd, a subsidiary company of Tanah Makmur Berhad and assumed the current position.

40 Page 38 Annual Report 2014 LOCATION OF OPERATIONS PERLIS KEDAH PENANG KELANTAN TERENGGANU PERAK PAHANG PAHANG SELANGOR FEDERAL TERRITORY NEGERI SEMBILAN LEGEND MALACCA PLANTATION LOCATION MILLING LOCATION DEVELOPMENT LOCATION JOHORE

41 Page 39 Annual Report 2014 BUSINESS ACTIVITIES OF TANAH MAKMUR BERHAD PLANTATIONS The oil palm plantation business is our Group's core activity. Our oil palm plantation actvities are carried out by Tanah Makmur Bhd, Alur Gemilang Sdn Bhd, Alur Seri Sdn Bhd, Sri Jelutung Palm Oil Mill Sdn Bhd and Alur Lestari Sdn Bhd. As of to date, our group have 13 plantation estates in the State of Pahang with a total land area of 17, ha comprising 11, ha that we own and 6, ha of LKPP - leased land. Below are the statistics for our plantation divison. TMB Group Total Hectare Statement as at 31 December 2014 No. Items 2014 (ha) 2013 (ha) Total Hectare according to Land Title 17, , Total Planted 15, , Matured 10, , Immature 4, ,141.86

42 Page 40 Annual Report 2014 Business Activities of Tanah Makmur Berhad TMB Group FFB Production and Yield Per Hectare From 2011 to 2014 Year Total FFB Matured Yield/ha (m/t) Hectare (m/t) , , , , , , , ,

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44 Page 42 Annual Report 2014 Business Activities of Tanah Makmur Berhad OIL MILL Our oil mill operation is under Sri Jelutung Palm Oil Mill Sdn. Bhd. (SJPOM). SJPOM is a 100% subsidiary of Tanah Makmur Berhad. The principal activities of SJPOM are production of crude palm oil (CPO) and cultivation of oil palms. At present SJPOM mill capacity is at 30tph. However, it is being upgraded to 45tph and the proceses is expected to be completed in the 2nd quarter of Having our own palm oil mill, we would have a better control over the milling process, which in turn will give us a higher OER obtained from our palm oil mill, compared to the OER used in determining the price paid for purchase of FFB. SJPOM began its operations in July Below are the performance statistics for SJPOM since it began its operation. SJPOM Performance Period FFB CPO PK OER KER Year (m/t) (m/t) (m/t) (%) (%) , , , , , , (6 months) 69, , , Notes: FFB - Fresh Fruit Bunches CPO - Crude Palm Oil PK - Palm Kernel OER - Oil Extraction Rate KER - Kernel Extraction Rate

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46 Page 44 Annual Report 2014 Business Activities of Tanah Makmur Berhad DEVELOPMENT AND CONSTRUCTION Our construction and development activities is under KotaSAS Sdn. Bhd. The principal activities of KotaSAS are construction and property development. KotaSAS was set up to develop TMB's 1,500 acres of TMB existing plantation land known as Ladang Bukit Goh into a residential and commercial properties. It is situated 13 minutes from Kuantan town. The construction and development of the township began in We began our property development with residential properties. Our initial commercial properties was launched in December Below are the KotaSAS sales statistics from 2011 to Sales Report by Year Year Total Units Total Units Sold Sales Revenue Types* RM ,648, SSLH/SSSD/ SHOP ,998, DSLH/SSSD/ DSSD/2.5SSD ,541, SSLH/SSSD/ DSLH ,195, SSLH/SSSD * Notes: SSLH - Single Storey Link House SSSD - Single Storey Semi Detached DSLH - Double Storey Link House DSSD - Double Storey Semi Detached

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48 Page 46 Annual Report 2014 AUDIT COMMITTEE REPORT MEMBERS The Audit Committee was established on 9 January The members of the Audit Committee during the financial year ended 31 December 2014 are as follows: Chairman YH. Dato Cheong Keap Tai (Independent Non-Executive Director) Members YH. Dato Dr. Zaha Rina binti Zahari (Independent Non-Executive Director) YH. Dato Thavalingam C. Thavarajah (Independent Non-Executive Director) TERMS OF REFERENCE 1. Composition of Members The Audit Committee (the Committee) shall be appointed by the Board of Directors from amongst their members and shall comprise no fewer than three (3) members, all of whom must be Non-Executive Directors with a majority of them shall be Independent Directors. At least one member of the Audit Committee: (a) Must be a member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and: (i) (ii) he must have passed the examinations specified in part 1 of the First Schedule of the Accountants Act 1967; or he must be a member of one of the associations of accountants specified in Part 11 of the First Schedule of the Accountants Act 1967; or (b) fulfills such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad. No alternate director of the Board shall be appointed as a member of the Audit Committee. The composition of the Audit Committee satisfy the requirements prescribed in paragraphs and of the Listing Requirements. In the event of any vacancy in the Committee resulting in the non-compliance of sub-paragraph 15.09(1) of the said requirements, the Company must fill the vacancy within three (3) months. 2. Authority and Rights The Committee shall have the following authorities as authorized by the Board: (a) to examine or investigate any matter within its terms of reference; (b) to seek or obtain any information relevant to its activities or investigation from employees of the Company and Group;

49 Page 47 Annual Report 2014 Audit Committee Report (c) to have the necessary resources which are reasonable to carry out its duties and is authorised to obtain such independent professional advice as it considers necessary; (d) to consider other matters as may be directed by the Board from time to time; (e) to communicate directly or to convene meetings with the External Auditors, the officers carrying out the Internal Audit function or both, excluding the attendance of other directors and employees of the Group whenever deemed necessary but at least twice a year. 3. Duties, Functions and Responsibilities The Committee shall undertake the following duties, functions and responsibilities: 3.1 Financial Reporting (a) Review the quarterly financial results and annual financial statements prior to its recommendation to the Board for approval which include: 3.2 External Audit changes in or implementation of major accounting policies and practices; significant and unusual events; the accuracy and adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the Company and the Group; compliance with applicable approved accounting standards, other statutory and legal requirements and the going concern assumption. (a) (b) (c) (d) (e) (f) Review the audit plan, scope of audit and audit report with the external auditors; Review with the external auditors their evaluation of the system of internal controls, during the course of their audit, including any significant suggestions for improvements and management s response; Recommend the nomination of a person or persons as external auditors and the audit fee; Review any letter of resignation from the external auditors of the Company; Review whether there is reason (supported by grounds) to believe that the Company s external auditors are not suitable for re-appointment; Review any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the external auditors.

50 Page 48 Annual Report 2014 Audit Committee Report 3.3 Internal Audit (a) (b) (c) Review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work; Review the internal audit programme, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function; Review any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the internal auditors. 3.4 Related Party Transactions (a) Review any related party transaction and conflict of interest situation that may arise within the Company/Group and any related parties outside the Company/Group including any transaction, procedure or course of conduct that raises questions of management integrity. 3.5 Other Matters (a) (b) Carry out any other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company/Group and ensure the effective discharge of the Committee s duties and responsibilities; Prepare an annual report to the Board that provides among other matters, a summary of the activities carried out by the Committee during the year. 4. Meetings and Attendance Meeting shall be held not less than four times a year and additional meetings are held as and when required. The External Auditors may request a meeting if they consider the said meeting is necessary. The majority of members present must be Independent Directors to form a quorum in respect of a meeting of the Committee. The Chief Financial Officer, Senior Finance Manager and the Head of Internal Audit normally attend meetings. The Managing Director and other Board members appropriate employees and external auditors may attend meetings upon the invitation of the Audit Committee. The committee shall meet with the External Auditors without executive board members or management present at least twice a year. The Secretary of the Company, shall serve the Audit Committee as Secretary. The Committee may establish any regulations from time to time to govern its administration.

51 Page 49 Annual Report 2014 Audit Committee Report SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE The Chairman of the Audit Committee reports regularly to the Board on the activities carried out by the Audit Committee in the discharge of its duties and responsibilities as set out in the Terms of Reference. The Audit Committee met at scheduled times with due notices of meetings issued and with agenda planned and itemised so that matters were deliberated in a focused and detailed manner. During the financial year 2014, the Committee held a total of five meetings. The details of attendance of each member at the Audit Committee Meetings was as follows: Number of Meetings Audit Committee Members Held Attended YH. Dato Cheong Keap Tai 5 5 YH. Dato Dr. Zaha Rina binti Zahari 5 5 YH. Dato Thavalingam a/l C. Thavarajah 5 5 The Audit Committee met with the External Auditors without the presence of the Management twice during the financial year to discuss any matters presented and had reported that there were no restrictions on the scope of their audit. In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the financial year ended 31 December 2014: 1. Financial Reporting (a) (b) Reviewed the quarterly financial results for announcements to Bursa Malaysia Securities in compliance with the Financial Reporting Standards before recommending them for Board s approval; Reviewed the annual audited financial statements with the External Auditors before recommending them for Board s approval. The review was inter-alia, to ensure compliance with:- - provisions of the Companies Act, 1965; - Listing Requirements of the Bursa Malaysia Securities Berhad; - the updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board. 2. External Audit (a) (b) (c) Reviewed the annual Audit Plan covering the nature and scope of audit strategy for the financial year; Reviewed the results and issues arising from the audit by External Auditors for the financial year and the resolution of issues highlighted in their report to the Audit Committee and the Management s responses; Reviewed and approved the External Auditors terms of engagement and evaluated the External Auditors performance before recommending to the Board for re-appointment and their remunerations.

52 Page 50 Annual Report 2014 Audit Committee Report 3. Internal Audit (a) (b) (c) Reviewed the annual Internal Audit Plan for the Group to ensure adequate coverage over the activities of the Company and its respective subsidiaries; Reviewed the internal audit reports which highlighted internal audit observations and recommendations relating to the operations of the company and its subsidiaries. When necessary, the Committee has instructed Management to take corrective actions to address the weaknesses raised in the said reports; Reviewed the competency of the internal audit, including monitoring the progress of recruitment. 4. Reviewing Internal Controls The effectiveness of the Company s System of Internal Controls are reviewed periodically by the Audit Committee. The review covers the financial, operational and compliance controls as well as Risk Management issues identified by the Internal Audit Division. Where necessary, the Committee requested action to be taken by the Management to rectify and improve the System of Internal Controls and procedures including measures to strengthen the estates management and suggestion for improvement, based on the Internal Auditors recommendations and suggestion. 5. Related Party Transactions Assist to review all significant Related Party Transactions and Recurrent Related Party Transaction entered by the Group and the Company, to ensure that such transactions are undertaken at arm s length basis on normal commercial terms which are not detrimental to the interest of the minority shareholders of the Company or possible conflict of interest situations within the Company or Group. 6. Annual Report Reviewed the Audit Committee Report and Statement on Risk Management and Internal Controls and recommended to the Board for approval prior to their inclusion in the company s Annual Report. 7. Training During the financial year, the Audit Committee members attended various conferences, seminars and training programmes. The trainings attended by the Committee members during the financial year ended 31 December 2014 is reported in the Statement on Corporate Governance on pages 52 to 62 of this Annual Report.

53 Page 51 Annual Report 2014 Audit Committee Report INTERNAL AUDIT FUNCTION 1. Role The Internal Audit Department assists the Committee in the discharge of its duties and responsibilities. Its role is to assure that the System of Risk Management and Internal Control is functioning as intended, identified any significant weaknesses, the impact it could have and the actions to be taken to rectify them. The Internal Audit also provides an independent and objective assessment of the adequacy and effectiveness of risk management and controls and Corporate Governance processes of the Group. The Internal Audit carries out the audits of the various applications of the Estate Computer Systems. The Internal Audits Department also provide the independent and objective reports on the estates and subsidiaries management, operations and accounting policies. The Internal Audit Department provide reports directly to the Audit Committee on the effectiveness and the adequacy of the System of Risk Management and Internal Controls to the AC. The Head of Internal Audit is assisted by at least 5 internal audit executives and 1 clerk that made up the Internal Audit Department. The internal audit annual Audit Plan and human resource requirements are prepared annually to ensure that the internal audit function is adequately resourced with competent and proficient internal auditors and are approved by the Audit Committee. 2. Activities The Internal Audit Department conducted independent reviews of the Group s operational activities. During the financial year, the Internal Audit has undertaken the following main activities: carried out audits according to the Audit Plan approved by the Audit Committee and reported the findings, recommendations and management s corrective action to the Audit Committee every quarterly review of estates and mill performance, field conditions and follow-up audits to determine that correction actions have been taken on the findings reported by the Internal Audit formulated Internal Audit standard operation procedures based on careful planning and appraising the usefulness of Estate Computer Systems (ECS) and Central Reporting Systems (CRS) of the Group The Internal Audit had reported to the Audit Committee all their findings, recommendations and management responses thereto and actions on material findings adequately addressed by the Management during the year. The Group s internal audit function is carried out by the In-House internal audit department and the expenses incureed in carrying out its duties and responsibilities for the year 2014 is amounting to RM82, STATEMENT BY THE BOARD This Report is made in accordance with a resolution of the Board of Directors and approved at the Board Meeting dated 27 April 2015.

54 Page 52 Annual Report 2014 CORPORATE GOVERNANCE STATEMENT The Board of Directors of Tanah Makmur Berhad (the Company) is fully committed to ensure that an appropriate and sound practices in Corporate Governance as set out in the Malaysian Code on Corporate Governance 2012 (the Code) are applied throughout Tanah Makmur Berhad Group of Companies. The Company was listed on the Main Market of Bursa Malaysia Securities Berhad on 17 July 2014 and up to the date of this statement, Tanah Makmur Group (the Group) has been improving the Group s policies, internal guidelines and processes. The Board is satisfied that the Company and Group have complied with the principles and recommendations of the Code for the financial year ended 31 December The Board is pleased to present the following statements, which outline the main corporate governance practices that were in place throughout the financial year. 1.0 ROLES AND RESPONSIBILITIES 1.1 Functions of the Board and Management Tanah Makmur Berhad is led by an effective Board which sets policies that will enable them to guide the Company to achieve its goals. The Board is collectively responsible for the Group s strategic plans, business performance, risk management, internal controls and statutory matters. The Board is responsible for the oversight and overall management of the Company. The Board has a fiduciary duty to act in good faith and in the best interests of the Group.The executive director has direct responsibility and accountability for the business operations. The executive director and non executive directors collectively bring a wide range of technical skills, experience and independence in judgements and decision making to support the needs of the Group. The Board has established functions and decisions which are reserved for the Board that maybe delegated to specific Board committees and those which are delegated to the Management. There is a clear segretation between the roles and responsibilities of the Chairman and Managing Director as set out in the Board Charter. The Chairman is responsible for the leadership and governance of the Board, ensuring its effectiveness and assumes the formal role as the leader in chairing all Board meetings and shareholders meeting. The Managing Director is responsible for the day to day management of the business and operations of the Group and implementation of Board strategies, policies and decisions. By virtue of his position as a Board member, he also acts as the intermediary between the Board and Management. The Managing Director is assisted by a team of Management. Regular reporting is made to the Board on the Company s overall performance. 1.2 Roles and Responsibilities The Board has wide responsibilities which include the following key responsibilities: a) Reviewing and adopting a strategic plan for the company The Board plays an important and active role in the development of the Company s strategy. Management presents to the Board its strategy and business and regulatory plans for each financial year and such time necessary for any revision thereon which are reviewed and discussed before being adopted.

55 Page 53 Annual Report 2014 Corporate Governance Statement b) Overseeing the conduct of the business of the company Management s performance under the leadership of Managing Director, who kept the Board informed of the progress of significant operational issues and their impact to the overall Company s performance. c) Developing and implementing Investor relations programme and shareholder communication policy The Company endeavours to build investor confidence through good Corporate Governance practices and have communicated effectively to all stakeholders, covering shareholders institutional investors and the investing public and others. d) Reviewing the adequacy and integrity of management information and internal control systems The Board is responsible for maintaining a sound system of Risk Management and Internal Controls to safeguard the shareholders investments and interests and the Group assets and for the reviewing of the adequacy and integrity of the Company s risk management and internal control systems. Details of risk management and internal control systems and their effectiveness are stated in Statement on Risk Management and Internal Controls. e) Sucession planning for senior management The Nominating Committee is responsible for reviewing candidates for key management position. It is also responsible for formulating nomination, selection and succession policies for members of the Board and Board Committees and key management personnel. 1.3 Formalised ethical standards The Board has adopted and adhered to the Code of Ethics, which sets out the standards of conduct expected from Directors. The Code of Ethics for Directors includes principles relating to Directors duties, conflict of interest, prohibited activities and dealings in securities. 1.4 Promoting Sustainability The Group is conscious of the environment effects of the business and believe sustainability is important for the future success of the Company and the Group and have operated their businesses responsibly in areas of environment, social and economic. The Group is committed to maintain healthy relationships within its community. 1.5 Qualified Company Secretaries and Access to information The Company Secretaries of the Company are qualified to act under Section 139A of the Companies Act The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board in the discharge of its functions. The Company Secretaries ensure that all Board meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory register of the Company. The Company Secretaries also keep abreast of the evolving capital market environment, regulatory changes and developments in corporate governance through continuous training and update the Board regularly.

56 Page 54 Annual Report 2014 Corporate Governance Statement The Board is supported by the Company Secretaries in the discharge of its functions and able to access company information in a timely and more efficient manner, thus improving Board performance. The Company Secretaries constantly advise and updated the Board on statutory and regulatory requirements pertaining to their duties and responsibilities. Complete and unrestricted access is provided to the Board, either collectively or in their individual capacities by Senior Management on specific matters. The Directors may obtain independent professional advice in furtherance of their duties whenever necessary at the Company s expense. 1.6 Board Charter The Board has formerly adopted a Board Charter taking consideration all the applicable laws, rules and regulations as well as best practices to provide guidance to the Board in the fulfilment of its roles, duties and responsibilities. The Charter also elaborates the fiduciary and leadership functions of Directors, division of responsibilities, powers demarcation, procedures and serves as a primary reference for prospective and existing Board members and management. The Board Charter is available on Tanah Makmur Berhad s corporate website at STRENGTHEN COMPOSITION 2.1 Board Committees In discharging its fiduciary duty, the Board is assisted by Board Committees which operate within the defined terms of reference. The Independent Directors are actively involved in various Board Committees and they provide independent assessment and opinion. The following committees were established to assist the Board in the discharge of its duties and also to monitor risks Audit Committee (established in January, 2014) The composition and terms of reference of this Committee together with its report are presented on pages 46 to 51 of the Annual Report Nominating Committee (established in January, 2014) The Nominating Committee consist of the following: Chairman Members YH Dato Thavalingam a/l C. Thavarajah (Independent Non-Executive Director) YM. Tengku Dato Sri Ahmad Faisal bin tengku Ibrahim (Non-Independent Non-Executive Director) Puan Darawati Hussain binti Dato Seri Abdul Latiff (Independent Non-Executive Director)

57 Page 55 Annual Report 2014 Corporate Governance Statement The function of the Nominating Committee, amongst others, is to recommend to the Board candidates for directorships or Board Committee members. In addition, the Committee reviews the profile of the skills and experience of each individual director of the Board of Directors and various Committees and to assess the effectiveness of the Board as a whole. Annually, the Nominating Committee reviews the overall composition of the Board in terms of appropriate size, required mix of knowledge, skills, experiences and core competencies and adequacy of balance between Executive Directors and Independent Non-Executive Directors. As part of the recruitment process and annual assessment of directors, the Nominating Committee will review the professionalism, integrity, honesty, competency, commitment, contribution and performance and ensure no conflict of interest arises that would impair their ability to represent the interest of the Company s shareholders and stakeholders and to fulfill the responsibilities of a director. The Nominating Committee also evaluated the effectiveness of the Board as a whole, the various Committees and assessing the contribution of each individual director. Good and effective communications were established among Board members and Board Committee members on official and unofficial basis and major policies and corporate proposals are discussed and scrutinised before putting to a vote. For the financial year ended 31 December 2014, the Committee held three (3) meetings. The Committee meets on a need basis Re-Election of Directors In accordance with the Articles 101 of the Company s Articles of Association, all Directors who are appointed by the Board are subject to re-election by the shareholders at the next Annual General Meeting held following their appointments. Managing Director is also subject to re-election by rotation once every three (3) years to comply with Article 105 of the Company s Articles of Association. Directors who are subject to re-appointment or re-election at the Annual General Meeting ( AGM ) will be assessed by the Nominating Committee, whose recommendations will be submitted to the Board for decision, and thereafter to be tabled to shareholders for approval at the AGM Remuneration Committee The Remuneration Committee consists of the following: Chairman Member YBhg Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman (Independent Non-Executive Director) YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim (Non-Independent Non-Executive Director) YH Dato Cheong Keap Tai (Independent Non-Executive Director) With the recommendation from the Remuneration Committee, the Board, as a whole, determines the remuneration of each Director. The Board is mindful that a fair remuneration is critical to attract, retain and motivate Directors of the Company. The Company pays its Non-Executive Directors annual fees which are approved annually by the shareholders. The Directors received allowances for each meeting that they attend. For the financial year ended 31 December 2014, the Committee held two (2) meetings. The Committee keep abreast of the remuneration packages for Board Members to ensure that they commensurate with the scope of responsibility held.

58 Page 56 Annual Report 2014 Corporate Governance Statement The main duties and functions of the Remuneration Committee include, amongst others to recommend to the Board the policy framework for Directors remuneration as well as the terms of service of Executive Directors and Senior Management of the Company, bonus plans for the Group and to execute other related functions to achieve the objective of the establishment of the Remuneration Committee. 2.2 Recruitment and Annual Assessment of Directors Gender Diversity Policy The Board is aware of the gender diversity policy as set out in Recommendation 2.2 of the Malaysian Code on Corporate Governance The Company has appointed three capable and competent women directors with the combination of skill, experience and strength in the qualities necessary to strengthen the composition of the Board. 2.3 Remuneration Policies The Remuneration Committee carries out the annual review of the overall remunerations policy for Directors, Managing Directors and Key Senior Management Officer whereupon recommendations are submitted to the Board for approval Non-Executive Directors The Non-Executive Directors remuneration package reflects the experience, expertise and level of responsibilities undertaken by the Non-Executive Directors.This enables the Non-Executive Directors to maintain independence and impartiality in making decisions affecting the future direction of the Company. The remuneration of all Directors is decided by the Board collectively after the review by the Remuneration Committee Executive Directors The remuneration for the Executive Director is generally set to provide market competitiveness to attract and retain Executive Director of a good caliber to competently manage the Company. The basic salary of the Executive Director is fixed for the year and any revision of the basic salary will be reviewed and recommended by the Remuneration Committee and approved by the Board Members, taking into account the individual performance. Details of Directors remuneration for the financial year ended 31 December 2014, distinguishing between Executive and Non-Executive Directors are set out below: Directors Remuneration Executive Director Non-Executive Directors Total RM RM RM Annual Fees * 75, , ,000 Salaries 446, ,100 Bonus 280, ,000 Allowances 52, , ,200 Other emoluments 125,316 52, ,316 Total (RM) 979, ,400 1,926,616

59 Page 57 Annual Report 2014 Corporate Governance Statement Breakdown of Directors Remuneration for the financial year ended 31 December 2014, in successive bands of RM50,000 which comply with Bursa Malaysia Listing Requirements are shown below: Remuneration Number of Directors Below RM50,000 1 ** RM50,001 - RM100,000 3 RM100,001 - RM150,000 4 RM150,001 - RM200,000 - RM200,001 - RM250,000 1 RM950,001 - RM1,000,000 1 * The Annual Fees will be subjected to the approval at the Annual General Meeting ** Dr Nicholas Langley Boden resigned on 12 May REINFORCE INDEPENDENCE 3.1 Board Balance and Composition Tanah Makmur Berhad has complied with the Best Practices in Corporate Governance embodied in Part 2 of the Malaysian Code on Corporate Governance. The Board is made up of a combination of Executive Director with intimate knowledge of the business and Non-Executive Directors who contribute effectively to the proceedings of the Board. Under the Company s Articles of Association, the number of Directors shall not be less than two (2) and not more than fourteen (14). As at the date of this statement, there are nine (9) members of the Board comprising the Chairman, who is a Non-Independent Non-Executive Director, a Managing Director, five (5) Independent Non-Executive Directors and two (2) Non-Independent Non-Executive Directors. The composition is in compliance with paragraph of the Bursa Malaysia Securities Berhad Listing Requirements. Together, the Directors bring a wide spectrum of business acumen, financial experience, skills and perspective necessary to carry out the Group s business operations. The views of the Independent Non-Executive Directors on the Board carry significant weight in the Board s decision-making process. A brief profile and status of each Director is presented on pages 20 to 29 of this Annual Report. 3.2 Tenure of Independent Directors The Code recommends that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. However, an Independent Director may continue to serve on the Board upon reaching the 9 years limit subject to the Independent Director s re-designation as a Non-Independent Non-Executive Director. In the event the Board intends to retain the Director as Independent after the latter has served a cumulative term of nine (9) years, the Board must justify the decision and seek shareholders approval at general meeting. As the date of this Statement, none of the Independent Directors has exceeded the 9 years independence tenure.

60 Page 58 Annual Report 2014 Corporate Governance Statement 4.0 FOSTER COMMITMENT 4.1 Board Meetings The Board holds at least six regular scheduled meetings annually with additional meetings for particular matters convened as and when deemed necessary. At Board Meetings, performance and resources of the Group are being reviewed and evaluated particularly in comparison to stated goals and budgets. Special Board Meetings are convened between the scheduled meetings to consider urgent proposals or matters that require expedition s decision or deliberation by the Board. All the pertinent issues discussed at Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretaries by way of minutes of meetings. The Directors commitment in carrying out their duties and responsibilities is affirmed by their attendance at the Board Meetings held during the financial year ended 31 December 2014 as reflected below: Name of Directors Attendance at Board Meetings (during the Directors tenure) YAM Tengku Tan Sri (Dr) Hajjah Meriam binti Sultan Haji Ahmad Shah 6 out of 6 YM Tengku Dato Zubir bin Tengku Dato Ubaidillah 6 out of 6 YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim 6 out of 6 YBhg Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman 4 out of 6 YH Dato Wan Bakri bin Wan Ismail 5 out of 6 YH Dato Cheong Keap Tai 6 out of 6 YH Dato Dr Zaha Rina binti Zahari 6 out of 6 YH Dato Thavalingam a/l C. Thavarajah 6 out of 6 Puan Darawati Hussain binti Dato Seri Abdul Latiff (2) 2 out of 3 Dr Nicholas Langley Boden (1) 2 out of 2 (1) Resigned on 15 May 2014 (2) Appointed on 9 June 2014

61 Page 59 Annual Report 2014 Corporate Governance Statement 4.2 Directors Training The Directors are mindful that they should receive appropriate continuous training and encourage to attend and will continue to attend seminar and briefings in order to broaden their perspectives and that they keep abreast on various issues facing the changing business environment and regulatory requirements. All Directors have attended the Mandatory Accreditation Programme (MAP) prescribed by the Bursa Malaysia Securities Berhad. Conferences, seminars and training programmes attended by the Directors during the financial year ended 31 December 2014 are as follows: Name of Directors Conferences, Seminars and Training Programmes Date YAM Tengku Tan Sri Dr Hajjah Meriam binti Sultan Haji Ahmad Shah YM Tengku Dato Zubir bin Tengku Dato Ubaidillah YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim YBhg Tan Sri Dato Sri Abdul Aziz bin Abdul Rahman YH Dato Wan Bakri bin Wan Ismail IPO Dialogue with Securities Commission Mandatory Accreditation Programme IPO Dialogue with Securities Commission IPO Dialogue with Securities Commission IPO Dialogue with Securities Commission Half Day Talk on Corporate Governance for Directors and Senior Management Advocacy Sessions on Corporate Disclosure for Directors The 16 th Malaysian Strategic Outlook Conference 2014 Open Office Pengurusan Kanan LKPP One Day Seminar On Promoting WAQF As A Mainstream Tool In The National Economic Policy Pembangunan Individu Organisasi Berintegriti Dalam Perkhidmatan Awam Mandatory Accreditation Programme 11 th ISP Plantation Industry : Sustaining The Competitive Edge Symposium Kebangsaan Konservasi Melestari Khazanah Warisan Negara Bengkel Perancangan Strategik LKPP Negeri Pahang July August July July July August September January March April May June June August September 2014

62 Page 60 Annual Report 2014 Corporate Governance Statement Name of Directors Conferences, Seminars and Training Programmes Date YH Dato Dr Zaha Rina binti Zahari YH Dato Cheong Keap Tai YH Dato Thavalingam a/l C. Thavarajah Puan Darawati Hussain binti Dato Seri Abdul Latiff YM Tengku Dato Sri Uzir bin Tengku Dato Ubaidillah (Alternate Director to YM Tengku Dato Sri Ahmad Faisal bin Tengku Ibrahim) Tuan Haji Abdul Rahim bin Abdullah (Alternate Director to YH Dato Wan Bakri bin Wan Ismail) 28 th Asia-Pacific Roundtable IPO Dialogue with Securities Commission Corporate Directors Advanced Programme : Strategy & Risk Global Economic Symposium (GES) 2014 A Telecommunication/broadcasting and Content Programme organise by Ministry of Communication & Multimedia Malaysia A Holistic Approach-Global Estate Planning for High-Net- Worth Families CEO Forum 2014 Ivey Asia Leadership Programme Wealth Management-Private Banking, Investment Decisions and Structured Financial Products Equity Portfolio Strategy & Global Market Moving Events Integrating Corporate Governance with Business Acumen and Corporate Disclosur National Tax Conference 2014 MIA International Accountants Conference 2014 Goods and Services Tax (GST) Training Course Goods and Services Tax (GST) Training Course IPO Dialogue with Securities Commission Mandatory Accreditation Programme Advocacy Sessions on Corporate Disclosure for Directors IPO Dialogue with Securities Commission Mandatory Accreditation Programme Advocacy Sessions on Corporate Disclosure for Directors IPO Dialogue with Securities Commission Advanced Corporate Tax Planning The 16 th Malaysia Strategic Outlook Conference 2014 Open Office Untuk Pengurusan Kanan LKPP One Day Seminar Promoting Waqf As A Mainstream Tool In The National Economis Policy Powering Organization Through Strategic Thinking Simposium Kebangsaan Konservasi 2014 Melestari Khazanah Warisan Negara Konsultasi Pengurusan Teknologi Pertanian 2014 Mandatory Accreditation Programme 2-4 June July August September September September September October November November May August November December December July August September July August September July August January March April April August August December 2014

63 Page 61 Annual Report 2014 Corporate Governance Statement 5.0 UPHOLD INTERGRITY IN FINANCIAL REPORTING Financial Reporting The Board aims to present a balanced, cleared and meaningful assessment of the Company and Group s financial performance and prospects in all their reports to the shareholders, investors and regulatory authorities. This assessment is provided in the Annual Report through the Chairman s Statement and the brief information on the Group of Tanah Makmur Berhad s plantation and downstream activities and on the property development activities. A yearly Audit Planning Memorandum submitted by the Internal and External Auditors to the Audit Committee sets out an analysis of the strength, weaknesses and opportunities of the Group which identifies and highlights the possible options that can be implemented to mitigate the impact of any business risks. a) Audit Committee The Group s financial reporting and internal control system is overseen by the Audit Committee Chairman together with the Audit Committee Members, which comprises of three (3) Independent Non-Executive Directors. The Audit Committee meets quarterly and additional meetings are held as and when required. During the financial year ended 31 December 2014, a total of five (5) Audit Committee meetings were held. The Audit Committees Term of Reference and activities are summarised in the Report on the Audit Committee as stated on page 46 to 51 of this Annual Report. b) Internal Auditors The Internal Audit function is independent of the activities, they audit proficiently and with due professional care. The Internal Audit Review highlights major weaknesses in control procedures and makes recommendations for improvements. The statement of Internal Controls is set out on page 63 to 65 of the Annual Report. c) External Auditors The External Auditors fill an essential role for the shareholders by enhancing the reliability of the Group's financial statements. The External Auditors have an obligation to bring any significant weaknesses in the Group s system of control and compliance to the attention of the Management and if necessary to the Audit Committee and the Board. The Audit Committee (AC) undertook an annual assessment of the suitability and independence of the external auditors in accordance with the independence criteria set out by the Malaysian Institute of Accounts. Having assessed their performance, the AC will recommend their re-appointment decision to the Board, upon which the shareholders approval will be sought at the Annual General Meeting.

64 Page 62 Annual Report 2014 Corporate Governance Statement 6.0 RECOGNIZE AND MANAGE RISK 6.1 Sound Framework To Manage Risk The Company continues to maintain and review its internal control procedures to ensure, as far as possible, the protection of its assets and its shareholders investments. 6.2 Internal Audit Function The Board has established an internal audit function within the Company, which is led by the Head of Internal Audit who report directly to the Audit Committee. Details of the Company s internal control system and framework are set out in the Statement on Risk Management and Internal Control and Audit Committee Report of this Annual Report. 7.0 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 7.1 Corporate Disclosure Policy The Board recognizes the importance of keeping investors informed of the group s business and corporate developments. Tanah Makmur Berhad always strive to make timely public announcement through the Bursa Malaysia of all major developments within the Group. 8.0 STRENGTHEN RELATIONSHIP WITH SHAREHOLDERS 8.1 Encourage shareholder participation at General Meeting Tanah Makmur Berhad recognizes the importance in promoting an effective communications channel with its shareholders. An effective communications are aimed to provide its shareholders with transparent and accurate information of the Group s financial performance and position. The comprehensive Annual Report of the Company is printed in English and Bahasa Malaysia. The Annual General Meeting is the principal avenue for dialogue and interaction with the shareholders of the Company. Every opportunity is given to the shareholders to ask question and seek clarification on the business and performance of the Company and Group. COMPLIANCE STATEMENT Tanah Makmur Berhad complies with the disclosure guidelines and regulations of Main Market Listing Requirements Bursa Malaysia Securities Berhad and the Statement on the Company s Corporate Governance practices is made in compliance with Paragraph and 15.08A of the Main Market Listing Requirement. This statement was approved by the Board on 27 April 2015.

65 Page 63 Annual Report 2014 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLS The Board of Directors of Tanah Makmur Berhad is pleased to provide the following Statement on Risk Management and Internal Controls which outlines the scope and internal controls of Tanah Makmur Group for the financial year ended 31 December This statement is issued pursuant to paragraph (b) of the Main Market Listing Requirements Bursa Malaysia Securities Berhad. The Board, the Management and all level of employees understand the importance of an effective internal control system to the organisation. The Company and its subsidiaries continuously identify, evaluate and monitor risks that could affect the Group. BOARD RESPONSIBILITIES The Board acknowledges its responsibility for maintaining a sound system of risk management and internal controls within the organisation and its effectiveness to safeguard the shareholders investment and the Group s assets. The Group s system of internal controls can only reduce but not eliminate the possibility of poor judgement in decision making, human errors and the occurrence of unforeseeable circumstances. Internal controls can only provide reasonable but not absolute assurance against material misstatement or losses. The instituting of such internal controls are implemented through the conduct of internal audits on a regular basis on all operating units, estates and subsidiaries within the Group, the internal control system of the estates through the Central Reporting System and the Estate Computer System and implementation of various risk management policies and procedures. The Audit Committee supports the Board oversight function on risk management and internal controls and assisted in identifying and assessing the risks and reviewed the procedures of internal controls to mitigate and control these risks. Management is responsible for implementing the Board s framework, policies and procedures on the risk and internal controls. The Group s internal control systems are operating adequately and effectively in all material aspects throughout the financial year ended 31 December INTERNAL CONTROL PROCESSES The Internal Audit function is provided by the Internal Audit Department of the holding company, Tanah Makmur Berhad based on the plan approved by the Audit Committee to undertake regular and systematic review of the risk management and internal controls processes to provide the Audit Committee with sufficient assurance that the systems of internal controls are effective in addressing the risk identified. The review of the internal control is an on-going processes with all the senior management members within the Group and is co-ordinated by the Internal Audit Department which reported periodically to the Audit Committee. Audit Committee The Audit Committee assisted in the review of the effectiveness of the Company s system of internal controls periodically. The review covers the financial, operational and compliance controls as well as risk management issues identified by the Internal Audit Department. The Audit Committee meet every quarter to discuss matters raised by the Management of Tanah Makmur Group on business and operational matters including potential risk and control issues. The Audit Committee has full and unimpeded access to both the Internal as well as the External Auditors.

66 Page 64 Annual Report 2014 Statement On Risk Management And Internal Controls Internal Audit The Internal Audit Department is a separate department independent of the Management and it assists the Audit Committee in the discharge of its duties to review and monitor the internal control procedures. Its main function is to carry out the operational audits of the Group s activities carried out by the various entities to assess the effectiveness of the internal controls procedures that are in place so that an effective and efficient internal control system can be maintained. The Internal Audit Department conducts audit visits to all estates, the mill, housing project sites of the Company and subsidiary companies on a regular basis and report their findings to the Audit Committee on a quarterly basis. Internal audit also conducts subsequent follow-up work to check that Management has dealt with the recommendations satisfactorily. Management Management is responsible to implement the Board s policies on risk, control and to uphold all good corporate governance and practices. The Managing Director is duly entrusted with the day-to-day management of the Group s affairs, assisted by senior members of the management from various departments to ensure effective management and supervision of all activities of the Group and in particulars on the plantation and property operations. The Group s performance is monitored through a budgeting system that requires the management to identify and evaluate all risks and all material variances to be identified and investigated monthly by the Management for appropriate corrective measures to be taken. Various sub-committees within the Management have been set up such as the tender committee and foreign workers committee. Experienced key personnel are appointed to the various sub-committees with appropriate empowerment to ensure effective management and supervision of business operations. The Group s guidelines for hiring and termination of staff, rewarding remuneration and benefits, performance appraisals and other human resource procedures are set up in the Service Circular (Pekeliling Perkhidmatan) to ensure that staff have proper guidelines in carrying out their responsibilities. Operational policies are documented in operations manuals such as the Estates Operation and Financial Manual which are continuously revised and updated to meet operational needs. Operating policies, procedures, memorandum and circulars are continuously updated and documented and form an integral part of the internal control system. RISK MANAGEMENT The Board is satisfied that the process of identifying, evaluating and managing of the significant business risks encountered by the Group is generally in place and has been carried out satisfactorily as an on-going process by the Management to improve the effectiveness of the internal controls system. The Board is also committed to improve the existing processes by which risks are identified, assessed and controlled through its numerous committees.

67 Page 65 Annual Report 2014 Statement On Risk Management And Internal Controls ADEQUACY AND EFFECTIVENESS OF RISK MANAGEMENT AND NTERNAL CONTROLS The Audit Committee, the Internal Audit function of the Group and the Management have provided the Board with assurance that the group risk management and internal controls are operating adequately and effectively, in all material aspect. Taking into consideration the assurance from the Audit Committee and the Management Team, the Board is of the view that the system of risk management and internal controls is in place for the year under review and is sound and adequate to safeguard the group s assets. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The External Auditors have reviewed this statement and have reported to the Board that the statement appropriately reflects the processes that the Board has adopted in reviewing the adequacy and integrity of the system of internal controls. This statement is made in accordance with a resolution of the Board of Directors dated 27 April 2015.

68 Page 66 Annual Report 2014 CORPORATE SOCIAL RESPONSIBILITY Caring for our community A company s performance should be measured not just according to the economic value it has created but also its impact on society and the environment. The Board of Tanah Makmur Berhad (Tanah Makmur) acknowledges the importance of Corporate Social Responsibility (CSR) as an extension of the group s efforts in fostering a strong corporate governance culture. Caring for our Environment We are mindful that some aspects of the plantation and mill management could have environmental and conservation impacts. As such, prior to any expansion of our plantation and mill operations, we will undertake an assessment to identify any potential negative impact on the environment in our day to day operations. To create awareness of the effects of deforestation, Tanah Makmur practices environmentally friendly methods such as zero burning within the estates for clearing of new land for new planting or clearing old oil palms for replanting programme where cut oil palm fronds will be stacked across slopes to prevent soil erosion and empty fruit bunches to be used as organic fertilizers or compost. We do not permit any sewage and liquid effluent generated from site activities to flow from the site onto any adjoining land or allow any waste matter to be deposited anywhere within the site or any adjoining land. Our priorities are the preservation and protection of waterways. Areas are set aside as water catchments in all our plantations to supply operational needs.

69 Page 67 Annual Report 2014 Corporate Social Responsibility Charity The Company endeavour to contribute to the society and play a role as a caring corporate citizen in the community through donations and sponsors to the disabled, orphanage, sports associations and among others the Sultan Ahmad Shah Environmental Trust, the Bakasa Children s Charity and recently to the Pahang flood victim. Donations were also made to schools for their building funds and sports day. Education The Company contributed annually to schools in the vicinity of our estates for Parent Teachers Association funds, under the programs for excellence examination results. Free transportation is provided for school going children to the nearest schools. We also contributed to Yayasan Istana Abdul Aziz and Akademi Menara Gading, a non-profit organisation that also conduct classes for the disadvantaged students at learning centres and students at rural areas. Employee Welfare The Group continues to place high emphasis on developing its human capital. As at 31 December 2014, the Group has a total of 1,519 workforce. The workforce consist of 29% Malaysian and 5.8% of female. As a progressive and equal opportunity employer, we thrive on meritocracy, empowering woman who make up 1.5% of the group s management and rewarding individuals based on their knowledge, capability and contributions to the Group. The Group has embarked on refurbishment of its workers quarters, provide free/subsidised electricity and free water supplies to the employees in the estates and mills with objective of providing the residents with better living conditions. The health and safety of all our employees are also our priority. We are committed in ensuring a healthy and safe workplace for our employees and the general public. The Group also covers Group Personal Accidents insurances for all its employees and Foreign Workers Compensation Scheme for the foreign workers. The needs of staff should not be overlooked whilst the group carried out the CSR activities, we also have in place funds for our employees and their immediate family members for educational purposes and natural disaster. CSR will be an on-going commitments