Board Directors Directors - malaysiastock.biz Group Managing Director/Chief Executive Officer of the...

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Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat

Non-Independent Non-Executive Chairman

Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat, 58, a Malaysian, was appointed to the Board on �5 July �008 as Non-Independent Non-Executive Chairman. Tan Sri Aseh is also the Chairman of the Option Committee. Tan Sri Aseh obtained his Bachelor of Economics (Honours) degree from the University of Malaya in �974 and obtained his Master in Public Administration degree from the University of Southern California, USA in �984. In year �007, he received his PhD (Honorary) in International Relations from the Lim Kok Wing University of Creative Technology, Cyberjaya.

Upon his graduation in �974, Tan Sri Aseh joined the Ministry of Finance as Assistant Secretary. Prior to his retirement in October �007 as Secretary General of the Ministry of Home Affairs, he held various positions in the civil service, ranging from Principal Assistant Secretary in the Education Services Commission, serving Sarawak and Sabah for 7 years from 1977 to �98�, and other various positions in the Ministry of Home Affairs before being appointed Deputy Director-General of Immigration Malaysia and thereafter, Director-General of Immigration Malaysia.

Tan Sri Aseh is active in community services and is currently the Chairman of RELA Cooperative, Chairman of FAM Monitoring Committee, President of Rifle Association Malaysia, President of Tiara Golf & Country Club Melaka, Advisor of PAPITA (Singer Association of Malaysia) and Chairman of the Parents and Teachers Association (PIBG) of SMK

Putrajaya since 2001. Tan Sri Aseh was also active in the Administrative and Diplomatic Service (ADS) and was its longest serving President

from 2001 to 2008. Prior to his appointment as President, he was an EXCO member and thereafter made Vice President of the ADS.

Tan Sri Aseh does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Tan Sri Aseh attended all six (6) Board meetings held subsequentheld subsequent to his appointment as Chairman of the Company during the financial year under review.

Particulars of other directorships in public companies:* MWE Holdings Berhad (Chairman)* Stemlife Berhad (Chairman)* Lion Diversified Holdings Berhad

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Dato’ Syed Faisal Albar bin Syed A.R Albar

Group Managing Director/ Chief Executive Officer

Dato’ Syed Faisal Albar, 43, a Malaysian, was appointed to the Board on � November �008 as the Group Managing Director/Chief Executive Officer of the Company. Dato’ Syed Faisal is a member of the Option Committee.

Dato’ Syed Faisal is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and a member of the American Institute of Certified Public Accountants (AICPA).

He started his career with Pricewaterhouse (now PricewaterhouseCoopers) Kuala Lumpur in 1991. He served with Pricewaterhouse, San Francisco, California, USA in 1995 before returning to Kuala Lumpur in 1997. Dato’ Syed Faisal joined The New Straits Times Press (Malaysia) Berhad (NSTP) in May 2000 as Financial Controller and was appointed Chief Executive Officer/ Executive Director of NSTP in 2003; a position which he held until October 2008.

Dato’ Syed Faisal does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Dato’ Syed Faisal attended all three (3) Board meetings held subsequent to his appointment asheld subsequent to his appointment as Group Managing Director/Chief Executive Officer of the Company during the financial year under review.

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Datuk Abu Huraira bin Abu Yazid

Executive Director / Group Chief Operating Officer

Datuk Abu Huraira bin Abu Yazid, 56, a Malaysian, was appointed to the Board on 30 October �00� as a Non-Executive Director and on 6 December 2005, he was re-designated as Executive Director/Group Chief Operating Officer of Pos Malaysia Group. Datuk Abu is a member of the Option Committee.

Datuk Abu is a Business Administration graduate of the University of Malaya and was in the card business for the past 20 years. He commenced his career in Malayan Banking Berhad in �976 and was responsible for establishing and managing its card business in 1980. This was also the first full-fledged card centre in Malaysia.

Consequently, he was headhunted to set up and manage other credit card centres: The Chase Manhattan Bank – Credit Card Centre (1986), Citibank Berhad – Bankcard Centre (1988), Public Bank Card Services Division - last post was the General Manager of Public Bank Card Services Division (�99�).

On 1 August 2000, he was appointed Chief Executive Officer of Bank Simpanan Nasional and remained in that position until July, �004.

Datuk Abu does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Datuk Abu attended eleven (11) out of twelve (12) Board meetings held during the financial year under review.held during the financial year under review.

Particulars of other directorships in public companies:* Pos Malaysia & Services Holdings Berhad* Transmile Group Berhad* Pos Malaysia Holdings Berhad

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Datuk Low Seng Kuan

Senior Independent Non-Executive Director

Datuk Low Seng Kuan, 62, a Malaysian, was appointed to the Board on � July �99�. He is the Company’s Senior Independent Non-Executive Director. Datuk Low is the Chairman of the Audit Committee and a member of the Board Nomination and Remuneration Committee.

Datuk Low is a Chartered Accountant by profession and is a member of the Malaysian Institute of Accountants and has more than 30 years of experience in the manufacturing industry. He graduated from the Footscray Institute of Technology (Victoria University) in Business Studies (Accountancy) and the Royal Melbourne Institute of Technology (RMIT) in Industrial Accountancy.

Datuk Low is currently the Managing Director of Malaysian Sheet Glass Sdn Bhd. He also serves on the Board of a number of private and government-linked corporations. He is the former President of the Federation of Malaysian Manufacturers (FMM) and is currently the Vice-President of FMM. Datuk Low is a member of the Malaysian Industrial Development Authority (MIDA), Malaysian Institute of Economic Research (MIER) and Transparency International Malaysia.

Datuk Low does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Datuk Low attended all twelve (12) Board meetings held during attended all twelve (12) Board meetings held during the financial year under review.

Particulars of other directorships in public companies:* Sunway Holdings Incorporated Berhad* Logos Institute Berhad* Be in Health Berhad

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Dato’ Krishnan a/l Chinapan

Independent Non-Executive Director

Dato’ Krishnan a/l Chinapan, 63, a Malaysian, was appointed to the Board on � July �99�. He is an Independent Non-Executive Director. Dato’ Krishnan is a member of the Board Nomination and Remuneration Committee and the Tender Board Committee.

Dato’ Krishnan is currently a Director of National Land Finance Co-Operative Society Limited, Nalfin Realities Sdn Bhd and Apollo Medical Centre TTDI. Dato’ Krishnan was a Senator in the Parliament from �986 to �99�.

Dato’ Krishnan does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Dato’ Krishnan attended eight (8) out of twelve (12) Board attended eight (8) out of twelve (12) Board meetings held during the financial year under review.

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Puan Sri Datuk Nazariah binti Mohd Khalid


Puan Sri Datuk Nazariah binti Mohd Khalid, 59, a Malaysian, was appointed to the Board on �3 August �007 as an Independent Non-Executive Director. She is the Chairperson of the Board Nomination and Remuneration Committee and a member of the Tender Board Committee.

Puan Sri Datuk Nazariah graduated with a Bachelor of Arts (Honours) degree from the University of Tasmania, Australia and holds a Master of Business Administration degree from the Michigan State University, USA. She joined the Malaysian Civil Service in �97� and served in various capacities prior to her last post as the Director General of the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) in the Prime Minister’s Department.

Puan Sri Datuk Nazariah does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. She has not been convicted of any offence within the past 10 years.

Puan Sri Datuk Nazariah attended all twelve (12) Board meetings held during the financial year under review.

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Dato’ Ibrahim Mahaludin bin Puteh


Dato’ Ibrahim Mahaludin bin Puteh, 58, a Malaysian, was appointed to the Board on �� August �007 as a Non-Independent Non-Executive Director. On �5 February �009, he was re-designated as Independent Non-Executive Director. Dato’ Ibrahim is a member of the Tender Board Committee, Board Nomination and Remuneration Committee and the Option Committee.

Dato’ Ibrahim holds a Bachelor of Arts (Honours) degree from the University of Malaya and a Master of Business Administration degree from the Manchester Business School, University of Manchester, United Kingdom.

Dato’ Ibrahim is currently the Group Chairman of Syarikat Prasarana Negara Berhad, a position which he held since � June �008 and Chairman of Computer Forms (Malaysia) Berhad since � December �008. Prior to that, Dato’ Ibrahim had served in various divisions at the Ministry of Finance since �974 including as Senior Adviser to the Executive Director for South East Asia at the World Bank Group in Washington D.C. His last post prior to his retirement from the Ministry of Finance in 2008 was the Deputy Secretary General (Policy) in the Ministry of Finance.

Dato’ Ibrahim does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past �0 years.

Dato’ Ibrahim attended eight (8) out of twelve (12) Board attended eight (8) out of twelve (12) Board meetings held during the financial year under review.

Particulars of other directorships in public companies:* Syarikat Prasarana Negara Berhad (Group Chairman).* Computer Forms (Malaysia) Berhad (Chairman)

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Wee Hoe Soon @ Gooi Hoe Soon


Mr Wee Hoe Soon @ Gooi Hoe Soon, 49, a Malaysian, was appointed to the Board on 13 August 2007 as an Independent Non-Executive Director. He is a member of the Audit Committee and the Option Committee.

Mr Gooi is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He has more than �0 years of experience in the fields of accounting and corporate finance and was Finance Director of several private and public listed companies.

He had been instrumental in the successful implementation of several corporate exercises, which included merger and acquisition and corporate debt restructuring exercises undertaken by public listed companies.

In 1999, Mr Gooi was appointed to the Board of AvenueMr Gooi was appointed to the Board of Avenue was appointed to the Board of Avenue Capital Resources Berhad as a Non-Executive Director and subsequently appointed as Group Managing Director in �00� and Deputy Chairman in �004, holding this last post until 2006. He was also a CEO/Executive Director –Dealing of Avenue Securities Sdn Bhd.

Mr Gooi does not have any family relationship with any does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Mr Gooi attended all twelve (12) Board meetings held attended all twelve (12) Board meetings heldheld during the financial year under review.

Particulars of other directorships in public companies:* Hup Seng Industries Berhad* Winsun Technologies Berhad* Kobay Technology Berhad* EON Bank Berhad* MIMB Investment Bank Bhd

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Tunku Mahmood Fawzy bin Tunku Muhiyiddin

Non-Independent Non-Executive Director

Tunku Mahmood Fawzy bin Tunku Muhiyiddin, 51, a Malaysian, was appointed to the Board on 13 August �007 as a Non-Independent Non-Executive Director. Fawzy Muhiyiddin is a member of the Audit Committee and Board Nomination and Remuneration Committee.

Fawzy Muhiyiddin holds a Bachelor of Arts (Honours) holds a Bachelor of Arts (Honours) degree in Business Studies from the Polytechnic of Central London, a Master of Business Administration degree from the Warwick University and a Diploma in Marketing from the Chartered Institute of Marketing. He is also a member of the Malaysian Institute of Management. He has worked in the United Kingdom, New Zealand, South Africa and Malaysia in a variety of senior management positions that span �� years.

Fawzy Muhiyiddin does not have any family relationship does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past �0 years.

Fawzy Muhiyiddin attended eleven (11) out of twelve (12) Board meetings held during the financial year under review.

Particulars of other directorships in public companies:* Telekom Malaysia Berhad

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Abdul Hamid bin Sh Mohamed


Encik Abdul Hamid bin Sh. Mohamed, 43, a Malaysian, was appointed to the Board on �3 August �007 as an Independent Non-Executive Director. He is a member of the Audit Committee.

Encik Abdul Hamid is currently the Executive Director of Symphony House Berhad. Immediately preceding his appointment at Symphony, he was the Chief Financial Officer of the Kuala Lumpur Stock Exchange (KLSE), now known as Bursa Malaysia Berhad. He joined KLSE in �998 as Senior Vice President, in charge of the Strategic Planning & International Affairs Division and was promoted to Deputy President (Strategy and Development) in 2002. He was re-designated to Chief Financial Officer in 2003. During his five years with the KLSE Group, he held diverse roles and had experience in strategy, corporate finance, business transformation, finance and administration, treasury, external affairs and public relations. He led KLSE’s acquisitions of KLOFFE and COMMEX and their merger to form MDEX, and the acquisition of MESDAQ. He also led KLSE’s demutualisation exercise.

Encik Abdul Hamid started his career in the accounting firm Messrs Lim Ali & Co. / Arthur Young, before moving on to merchant banking with Bumiputra Merchant Bankers Berhad. He later moved on to the Amanah Capital Malaysia Berhad Group, an investment banking and finance group, where he led the corporate planning and finance functions until 1998 when he joined the KLSE.

Encik Abdul Hamid does not have any family relationship with does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

Encik Abdul Hamid attended ten (10) out of twelve (12) Board attended ten (10) out of twelve (12) Boardattended ten (10) out of twelve (12) Board meetings held during the financial year under review.

Particulars of other directorships in public companies:* Symphony House Berhad* Genesis Malaysia Maju Fund Limited (listed on the London Stock Exchange)* Hartalega Holdings Berhad* SILK Holdings Berhad (formerly known as Sunway Infrastructure Bhd)

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Eshah binti Meor Suleiman

Non-Independent Non-Executive Director

Puan Eshah Meor Suleiman, 55, a Malaysian, was appointed to the Board on �5 February �009 as Non-Independent Non-Executive Director. She is also the Chairperson of the Tender Board Committee and member of the Board Nomination and Remuneration Committee and the Option Committee.

Puan Eshah obtained her Bachelor of Economics (Honours) degree from the University of Malaya in �980 and obtained her Masters in Business Administration (Finance) from the Oklahoma City University, U.S.A in �994.

She started her career in �98� as Assistant Director (Macro Economic Section) Economic Planning Unit of the Prime Minister’s Department before serving as Assistant Secretary at the Government Procurement Division, Ministry of Finance in middle of �99�. Puan Eshah later held various positions in the Government Ministries. In September �006, she was promoted to her current position as Under Secretary of Investment, Minister of Finance (Incorporated) and Privatisation Division of the Ministry of Finance.

Puan Eshah does not have any family relationship with any director and/or substantial shareholder of the Company or any conflict of interest with the Company. She has not been convicted of any offence within the past 10 years.

Particulars of other directorships in public companies:* Global Maritime Ventures Berhad* Telekom Malaysia Berhad (Alternate Director)

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Senior Management

Group Chief, Strategy & PlanningJezilee Mohamad Ramli, 45, joined Pos Malaysia Berhad as the Group Chief, Strategy and Planning effective 3 February �009. He is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and also a member of the American Institute of Certified Public Accountants (AICPA).

He started his career with Price Waterhouse (now known as PricewaterhouseCoopers) in 1989. In 1992, he moved to Arab Malaysian Merchant Bank (now known as AmInvestment Bank) and was attached to the Corporate Finance department. He later joined The New Straits Times Press (Malaysia) Berhad (NSTP Group) in 1993 and was appointed the Chief Financial Officer in 2003, a position that he held for the last six years. During his tenure with the NSTP Group, he was transferred to its wholly owned general insurance subsidiary, AMI Insurans Berhad, (now known as CIMB Aviva), as the General Manager, Finance and Services where he served from �999 to �003.

Jezilee M. Ramli

Dato’ Syed Faisal Albar

Group Managing Director/ Chief Executive Officer

Datuk Abu Huraira bin Abu Yazid

Executive Director / Group Chief Operating Officer

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Senior Management

Hj Nadza Abdul

Dato’ Hj Mohd. Derus Harun

Chief Operating Officer, PosLajuHj Nadza Abdul, 41, is the Chief Operating Officer (COO) of PosLaju, the courier arm of Pos Malaysia. He joined Pos Malaysia in �003 as the General Manager in the Office of the Managing Director/CEO. In 2005, he was made the Head of Corporate Planning & Strategic Business and in �007, he became the COO of PosLaju. While at Pos Malaysia, he has also overseen the Property Department and the Procurement & Contracts Unit.

He represents Pos Malaysia as a director on the boards of Digicert (M) Sdn Bhd, Elpos Print Sdn Bhd, CEN Sdn Bhd, PosPay Exchange Sdn Bhd and PSH Express Sdn Bhd. He graduated with a BBA (Finance) from the University of Houston (Texas) in 1992 and an MBA from the University of Warwick (UK) in 1996. Before Pos Malaysia, he had worked at UEM Group Berhad, at Asian International Merchant Bankers Berhad and at Gulf States Asphalt Co. Inc (Texas).

Chief Operating Officer, PosLogistikDato’ Hj Mohd Derus, 53, joined Pos Malaysia in March �979. He graduated in 1978 with a Bachelor of Arts from the University of Malaya. He later obtained a Diploma in Management of Science from INTAN in �985. He also obtained a Master in Business Administration from Oklahoma City in �990.

He represents Pos Malaysia as a director on the boards of Datapos (M) Sdn Bhd and CEN Sdn Bhd. He is currently the Chief Operating Officer of PosLogistik since October 2007. Formerly, he was the Chief Operating Officer of Datapos (M) Sdn. Bhd. Prior to the two appointments, he had served in various departments within Pos Malaysia Group.

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Mearia Hamzah

Chief Operating Officer, PosNiagaMearia Hamzah, 44, is the Chief Operating Officer of PosNiaga. She joined Pos Malaysia on � September �004 as Deputy General Manager, Corporate Planning & Business Evaluation Unit.

She graduated with an MBA (Accounting & Finance) from the University of New Haven, Connecticut USA in 1998 and a BSc (Accounting) from the State University of New York, USA. In 2006, she was made the Head of Business, PosNiaga and in 2008, she became the Chief Operating Officer of PosNiaga.

Before joining Pos Malaysia, she worked at Malton Berhad/Paracorp Berhad, Land & General Berhad, Bank of Commerce (M) Berhad and Arthur Andersen & Company. Her work experience includes Audit & Financial Advisory Services, Corporate Banking, Corporate & Strategic Planning and Property Investment & Development.

Chief Financial OfficerMohd Lutfi Mat Lazim, 43, is the Chief Financial Officer of Pos Malaysia. He joined the Company on 16 November 2007. He is a Fellow of the Association of Chartered Certified Accountants (United Kingdom).

He joined Data Power Sdn Bhd as System Accountant in September 1990. In May 1992, he moved on to become the Corporate Banking Officer of Bank Bumiputera (M) Berhad. Prior to joining Pos Malaysia, he was with PLUS Expressways Berhad Group (PLUS) from 2003 to 2007.

Whilst in PLUS, he was appointed Manager of Treasury in June 1998. In July 1999, he was promoted to the position of Senior Manager, Corporate Affairs Department and in January 2001, he was promoted to the position of General Manager, Finance. He was subsequently promoted as Senior General Manager of the Finance Division and held the position until he left the company in �007.

Mohd Lutfi Mat Lazim

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Kedah/Perlis : Jaafar Abdul RahmanPulau Pinang : Hj Abdul Hadi HamidPerak : Mohd Azizi Mohd Sanusi

State Managers

Senior Management

Mohd Rosdeen HassanInformation, Communication & Technology

Dr. R. Hanafi AbdullahHuman Resource & Administration

Sabrina Albakri Abu BakarLegal & Secretarial

Bahaman KamaruzzamanTransformation Management Office

Mohd Rizal HamzahGroup Procurement

Nuranisah Mohd AnisCorporate Risk Management

Salamah SamsudinCustomer Service

Aziz ManasInternal Audit

Selangor : Hj Wan Sharpudin Wan RamliWPKL : Hj Wan Mohd Zain Wan MamatNegeri Sembilan : Lee Pow Choy

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Datin Rohaiza HashimCorporate Communications

Hj Ithnin Hj TalibSecurity & Investigation

Chum Choy HanInternational & Regulatory Affairs

Shahri JikunProperty & Corporate Insurance

Balqais YusoffCorporate Planning & Strategic Business

Dato’ Noor Azli OthmanDigicert (M) Sdn Bhd

Raja Nur Izah Raja JaafarPSH Express Sdn Bhd

Mohd Ripin KusnanDatapos (M) Sdn Bhd

Melaka : Baharum SaidJohor : Jumaat RebutPahang : Othman Abdullah

Terengganu : Hj Mohd Aziz SulongKelantan : Hj Anuwar Mohd AkhirSarawak : Hj Mohd Nasir IsmailSabah : Salleh Ibrahim

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Our CommitmentTOC

Encouraging positive enthusiasm- PINTAR motivational camp

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Corporate Social Responsibility Statement

Achieving value through social responsibility2008 saw Pos Malaysia continuing its aspirations towards becoming a better corporate citizen. Despite the challenging environment and economic backdrop in which the company operates in, Pos Malaysia believes in giving more and caring for the community and the nation. Together, Pos Malaysia delivers despite challenges by creating value through sustainable development.

A careful balance between corporate profitability and giving back to the nationPos Malaysia is much more than a postal company. By facilitating the flow of mail, goods, information and funds, we help individuals, communities and companies, large and small, thrive in today’s increasingly competitive marketplace. Our business also benefits employees, shareholders and communities through wages, taxes, dividends and charitable contributions. Our goal is not only to run a financially sound business but one that is also socially responsible, to ensure our ongoing ability to positively impact the stakeholders with whom we interact every day.

As at the end of �008, Pos Malaysia employed �6,��5 people. We invested RM5�3.3 million in our employees nationwide, which is 55.7% of total annual revenue. This investment includes RM�0�.5 million in benefits, healthcare benefits and retirement plan expenses. Pos Malaysia offers employees a great place to work. All our full-time employees receive comprehensive health

benefits for employees and their families as well as pension and/or Employees Provident Fund (EPF) benefits.

Community developmentIn �008, Pos Malaysia Berhad adopted the Paediatric ward at the University Malaya Medical Centre. The adoption initiative entails the interior renovation of two rooms at the ward, namely the Play Room and the Examination Room. To make this happen, Pos Malaysia contributed RM�8,000 to redesign and refurbish the rooms to create a vibrant environment for children.

At 3.30am December 6, Bukit Antarabangsa was rocked with a massive landslide. The tragedy cost the lives of 4 residents, with another 93 displaced for weeks. Pos Malaysia was there to provide basic facilities to the families and residents that were displaced, and also aided by distributing basic necessities. Pos Malaysia also managed to amass RM�0,000 to relief the plight of those affected.

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Concurrently, Pos Malaysia also contributed RM30,000 whilst working with Khazanah Nasional Berhad for their Disaster Relief and Recovery Network. The Disaster Relief and Recovery Network recently assisted flood victims in Pahang.

Universal Service Obligation (USO)As the entrusted USO provider, Pos Malaysia is responsible to ensure that all �7.3 million Malaysians have access to basic postal services at affordable rates. This includes servicing the remotest areas which may not be economically viable. In this respect, Pos Malaysia guarantees delivery of postal items to all nooks and corners of the country such as Long Pasia and Long Lama, Sarawak.

Kebangsaan Kuala Perai, Bagan Dalam, Pulau Pinang. Pos Malaysia donated a sum of RM30,000, of which the money was channeled through activities such as motivational camps held at Dusun Minda Resort, Kuala Nerang, Kedah, and rewarding 72 top students with educational trips. Prominent locations visited were KL Tower, Pos Malaysia’s Mail Processing Centre (MPC), Hutan Lipur Bukit Nanas, Telecommunications Museum and Radio Television Malaysia (RTM).

Sustainable growth with minimal environmental impactIn �008, Pos Malaysia continued its comprehensive fleet modernisation programme that commenced in �007. The programme would see a total of 3,900 motorcycles and 600 delivery vans replaced. During �008, a total of �,458 motorcycles and 213 delivery vans were delivered. Pos Malaysia’s fleet modernisation was not only necessary, but would also have a tremendous positive impact as the new vehicles are expected to have more efficient fuel consumption, thereby lowering emissions level.

Being compassionate towards the poor and underprivilegedPos Malaysia, in collaboration with various agencies and parties such as Ministry of Energy, Water and Communication, have held numerous session with the community and the underpriviledged through Buka Puasa sessions, ‘Sehari bersama Pelanggan’ and donation drives for the needy. Pos Malaysia celebrated 60 orphans from Rumah Anak Yatim & Miskin Baitu Saidati Khadijah, Gombak and 50 OKUs from Taman Sinar50 OKUs from Taman Sinar Harapan Cheras during the Majlisduring the Majlis Buka Puasa in �008, and handed contributions during the events.

Being supportive and nurturing excellence in educationThe PINTAR (Promoting Intelligence, Nurturing Talent, Advocating Responsibility) programme is one of the initiatives that stems from the GLC Transformation (GLCT) Programme. It redefines school adoption programmes in line with the Government’s call under the Ninth Malaysia Plan (9MP) and �006 Budget on public-private partnerships for sustainable development.

In �008, Pos Malaysia continued its support to its adopted schools under the PINTAR programmes. They are Sekolah Menengah Kebangsaan Sungai Acheh, Nibong Tebal and Sekolah

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Championing a better work environmentAs we continue to increase the level of technological sophistication in our operations, the primary job of our employees involves delivering nearly �.3 billion items each year. Because of the physical nature of our occupation, safety is a significant challenge and a top priority. The fleet replacement programme that began in �007 will help provide new and safer vehicles for the daily use of all our employees. To raise awareness on the safety of our postmen, various courses on Occupational Safety and Hazard (OSHA) were conducted at our training centre, Institut Latihan Pos (ILP) and also at state levels.

Pos Malaysia also strives to provide an encouraging and secure working environment. The remodelling of our branches provides for a better and more conducive working environment for all our employees and customers.

Promoting Employee to Entrepreneur Rationalisation (PETER)PETER is a transformational programme for the retail arm of Pos Malaysia as part of the company’s efforts to promote entrepreneurship among the Post Masters, who operate the one-man Post Office outlets. It is estimated that in developed countries more than 80% of postal branches are run by third party (entrepreneur). PETER was designed not only to mirror this performance but also to encourage our staff to embark on new business opportunities.

As of December �008, �9 staffs of Pos Malaysia rose to the challenge, and participated in this programme. They were given a mutual separation scheme as well as training and guidance necessary to embark on the journey.

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Corporate Governance Statement

Pos Malaysia Berhad (“Pos Malaysia” or “the Company”), a Government-linked Company (“GLC”), its Board of Directors (“Board”) and Management remain committed to upholding and continuously improving good corporate governance practices throughout the Pos Malaysia Group of Companies (“Group”) for protection and greater creation of shareholders and other stakeholders’ values and also maintaining integrity, trust and confidence in the Company.

The key to good governance lies in getting an effective Board in place. The Board realizes that to be effective, the Board must progress to be performing from just conforming. It subscribes to the belief that improving the effectiveness of the Board to best practice standards is a continuous journey.

As one of the GLCs in Malaysia, Pos Malaysia has, apart from abiding to the principles and best practices as set out in the Malaysian Code on Corporate Governance (“the Code”), subscribed to most of the guidelines introduced by the Putrajaya Committee on GLC High Performance (“PCG”) in enhancing Board Effectiveness. These guidelines as codified in the Green Book reinforce the recommendations contained in the Code.

Board Effectiveness Assessment (“BEA”)

As at the end of the financial year ended 31 December 2008, all the nine (9) Key Improvement Initiatives (“KIIs”) which were formulated after the conduct of the Board Effectiveness Assessment in late 2006 to further improve the overall Board effectiveness, have been duly implemented. Notwithstanding the same, the Board continues to review gaps within the Board and formulate ways to further improve its efficiency and effectiveness as an on-going process.

For the financial year under review, an assessment of the Board effectiveness was conducted. As an effective way of discovering and reviewing the gaps, the Board Nomination and Remuneration Committee (“BNRC”) which is tasked with conducting assessment of the Board effectiveness, reviews on an annual basis, the contents of the Questionnaire which is used as the tool to assess Board effectiveness. The Questionnaire is produced by Management after taking into account the principles and guidelines

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under the Code as well as the Green Book and the same are customized for Pos Malaysia’s purpose and requirements. It is reviewed and modified from time to time to cater to the changing needs of the Company. All inputs from the Board members pursuant to the Questionnaire will be deliberated by the BNRC and subsequently, the Board. Thereafter, new KIIs to address the gaps identified will be developed by Management and thereafter recommended by the BNRC to the Board for implementation. This is in line with the recommendation under the Green Book.

Apart from the initiative to enhance Board effectiveness in the financial year under review, the Board received updates on a quarterly basis on the improvement initiatives undertaken by the Company pursuant to other guidelines and best practices launched by the PCG under the GLC Transformation Programme.

The Board is now pleased to report to the shareholders in greater detail on the manner how the Group has applied the principles of the Code and the extent of compliance with the best practice provisions of the Code.

A. BOARD OF DIRECTORS

Principal Responsibilities of the Board

The Board, which is appointed by the shareholders, is entrusted with dealing and controlling the Group and overseeing the business of the Group, which includes optimizing long-term financial returns and shareholders’ wealth creation.

As a fundamental part of discharging the Board’s responsibilities in order to protect and enhance stakeholders’ values and financial performance of the Group, the Board of Directors continuously acts to improve and refine management practices and systems and ensures that the Group has strong internal controls and processes in place to implement the principles and concepts of good governance.

The duties, responsibilities, powers and functions of the Board are governed by the Articles of Association of the Company (“Company Articles”), the Companies Act �965 and Companies (Amendment) Act �007 (collectively the “Companies Act”), Bursa Malaysia Securities Berhad Listing Requirements (“Bursa Securities Listing Requirements”) and other relevant laws, rules, and regulatory guidelines that are in force. The Board is also governed by its Board Policy Manual, which aims to assist Board members to better appreciate their roles and responsibilities. With an appropriate understanding of its role, the Board will be better equipped to meet its responsibilities of ensuring achievement of the long-term objectives of the Group.

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Under the Pos Malaysia Board Policy Manual, the Board will direct and supervise management of the business and affairs of the Group including the following:-

(i) Ensure that the Group’s goals are clearly established and that a strategic plan is in place to achieve the said goals;

(ii) Establish policies for strengthening the performance of the Group including ensuring that the Management is proactively seeking to build the business through innovation, initiative, technology, new products and the development of business capital;

(iii) Adopting performance measures to monitor implementation and performance of the strategies, policies and plans;

(iv) Oversee the conduct of the Group’s business to evaluate whether the business is being properly managed;

(v) Ensure that the Group has appropriate business risk management processes, including adequate control environment be it the internal control systems or management information systems and systems for compliance with applicable laws, rules and regulations;

(vi) Appoint Board Committees to address specific issues, consider recommendations of the Board Committees and discuss problems and reservations arising from the Committees’ deliberations;

(vii) Ensure that the statutory accounts of the Group are fairly stated and conform with the relevant regulations including acceptable accounting policies;

(viii) Ensure that there is in place an appropriate succession planning mechanism for members of the Board and Senior Management;

(ix) Ensure that the Group adheres to high standards of ethics and corporate behaviour including transparency in the conduct of business;

(x) Ensure that there is in place an appropriate public relations and communications programme; and

(xi) Ensure there is a Schedule of Matters reserved for collective decision of the Board.

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The Schedule of Matters reserved for collective decision of the Board is enshrined in the Company’s Discretionary Authority Limits, which provides the overall internal authority limits applicable to the Company.

Board Balance and Composition of the Board

The Company Articles stipulate that the Board shall not comprise less than two (2) nor more than twelve (��) members. The Board currently consists of eleven (��) members, comprising a Non Independent Non-Executive Chairman, a Group Managing Director/Chief Executive Officer (“GMD/CEO”), an Executive Director/Group Chief Operating Officer (“ED/GCOO”), two (2) Non-Independent Non-Executive Directors and six (6) Independent Non-Executive Directors. With more than half of the Board members comprising Independent Directors, the Company has exceeded the compliance level set under the Bursa Securities Listing Requirements, which requires one-third of the Board to comprise Independent Directors.

The Board is of the opinion that the current size and composition of the Board is well balanced and the Board is able to properly discharge its responsibilities in an effective manner. The Board members’ varied skills and breadth of experience are relevant and important for effective management of the Group’s business. Details of the Board members’ skills and experience are outlined in the Profile of Directors contained in this Annual Report.

There is a clear separation of responsibilities between the Chairman and the GMD/CEO and a balance of power is maintained in the Company so that no one individual has unfettered powers of decision.

The Chairman of the Board is responsible for representing the Board to shareholders. The Chairman is responsible for ensuring integrity and effectiveness of the governance process of the Board and will consult the Board promptly over any matter that gives him cause for concern. The Chairman will act, as facilitator at Meetings of the Board to ensure that no Board member, whether executive or non-executive, dominates the discussion, that appropriate discussion takes place and that relevant opinions among Board members are forthcoming. The Chairman will also ensure that discussions result in logical and understandable outcomes, which will lead to decisions of the Board.

On the other hand, the GMD/CEO manages the overall business and oversees the day-to-day operations of the Group and is accountable to the Board for the overall organization, management and staffing of the Group and for its procedures in financial and operational matters, including conduct and discipline. The authority limits of the GMD/CEO are enshrined in the Company’s Discretionary Authority Limits (“DAL”) duly approved by the Board. In the absence of the GMD/CEO, duties and responsibilities associated with the role of the GMD/CEO are delegated to the ED/GCOO of the Company.

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The six (6) Independent Non-Executive Directors of the Company are independent from Management and are able to exercise independent judgment and provide positive participation in all the Board deliberations. They also play a pivotal role in the provision of unbiased and independent views, advice and judgment as well as safeguard the interests of other parties such as the minority shareholders and other stakeholders. Khazanah Nasional Berhad, the largest shareholder of the Company has nominated Y.M Tunku Mahmood Fawzy bin Tunku Muhiyiddin as its nominee on the Board while Puan Eshah binti Meor Suleiman (“Puan Eshah”) has been appointed on �5 February �009 as the appointed representative of the Ministry of Finance, Malaysia on the Board of Pos Malaysia in place of Dato’ Ibrahim Mahaluddin bin Puteh (“Dato Ibrahim”). Pursuant to this, Dato’ Ibrahim, upon him being qualified to act as an Independent Director, has been re-designated by the Board as Independent Non-Executive Director of the Company simultaneously upon the appointment of Puan Eshah.

Datuk Low Seng Kuan is the Company’s Senior Independent Non-Executive Director, to whom concerns may be conveyed by shareholders and/or members of the public. Datuk Low has been a Director of the Company since � July �99� and he is also the Chairman of the Audit Committee. The Senior Independent Non-Executive Director represents the interest of minority shareholders and the general public by exercising independent judgment and providing advice to safeguard the interests of the minority shareholders, stakeholders and the general public at large as well promoting good governance practices within the Company and the Board.

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Board Meetings and Supply of Information to the Board

During the financial year ended 31 December 2008, twelve (12) Board meetings were held and the attendance of the Board members was as follows:-

Directors No of meetings attended Percentage

Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat ( Appointed w.e.f. 15 July 2008)

6 out of 6 �00 %

Dato’ Syed Faisal Albar bin Syed A.R Albar(Appointed w.e.f. 1 November 2008)

3 out of 3 �00%

Datuk Abu Huraira bin Abu Yazid �� out of �� 9�%

Dato’ Ibrahim Mahaludin bin Puteh 8 out of �� 67%

Datuk Low Seng Kuan �� out of �� 00%

Dato’ C. Krishnan 8 out of �� 67%

Puan Sri Datuk Nazariah binti Mohd Khalid �� out of �� 00%

Wee Hoe Soon @ Gooi Hoe Soon �� out of �� 00%

Tunku Mahmood Fawzy bin Tunku Muhiyiddin �� out of �� 9�%

Abdul Hamid bin Sh Mohamed �0 out of �� 83%

A schedule for Board Meetings and Board Committee meetings for the whole financial year is prepared in advance and tabled to the Board in the month of January every year for approval of the Board. Generally, the Board is scheduled to meet once a month with additional meetings convened as and when deemed necessary.

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For each Board and Board Committee meeting, the meeting agenda together with the relevant papers and supporting documents relating to the agenda items are circulated to Board members and/or Board Committee members, whichever the case may be, at least five (5) days before each meeting while Management strives to improve circulation of Board papers to seven (7) days before each meeting. The Board papers are issued in advance to enable the Directors to obtain further information, where necessary, in order to be properly briefed and informed before the meetings.

All Board decisions are clearly recorded in the minutes, including the rationale for each decision, along with clear actions to be taken. Relevant board decisions are communicated to Management verbally within one (1) working day of the Board meeting and relevant extracts of the minutes are distributed to Management within three (3) working days after the Board meeting.

Board papers are prepared based on a standard format to ensure consistency in the presentation of facts and to further ensure all necessary information is provided to the Board. Each Board paper for approval contains comprehensive information on the objective of the paper, background information, financial effects of the proposal made, issues for consideration including issues on risk management, other options for consideration, disclosure of interest of a Director or a major shareholder (if applicable), recommendation from Management and action sought from the Board. During meetings, Management and/or advisors (as and when necessary) make presentation on the papers tabled to the Board to facilitate the Board in its decision-making.

The quality of information received by the Board has a direct impact on the quality of decisions made by the Board. The Board has, therefore adopted a rating process for papers and presentations by Management at each Board meeting whereby the Board members provides constructive feedback on the quality of information and analysis received in the Board papers tabled and presentations made through the filling out of a Board Paper Evaluation Form by the Board members at the end of each Board Meeting. This process has helped Management to continuously improve the quality of Board papers. The Directors have access to all information within the Group, to the extent that the information required is pertinent to the discharge of their duties as Directors and is for the benefit of the Group. In order to ensure the Board is consistently and promptly updated on the Group’s performance, the Board receives a Corporate Performance Report from Management on a periodical basis. Each report contains information on the Group’s year-to-date performance and up-dates on action plans under the Company’s Business Plan.

In addition, all Directors have access to the advice and services of the Company Secretary and may seek independent professional advice should the need arises. In an effort to further enhance the services of the Company Secretary to the Board, the Board members provide their respective feedback on the Company Secretary’s current service level through an Internal Customer Satisfaction Survey designed specifically for the Company Secretary.

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Appointment of Board Members

As Pos Malaysia is a GLC, the Minister of Finance (Incorporated), which is a body corporate established under the Minister of Finance (Incorporated) Act �957 (Amended �989) (“Special Shareholder”), holds one (�) Special Rights Redeemable Preference Share (“Special Share”) in the Company. Under the Company Articles, the Special Shareholder has the right from time to time to appoint up to six (6) persons as Director of the Company (“Appointed Director”) including appointment of the Chairman of the Board and the Group Managing Director/Chief Executive Officer.

During the financial year under review, Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat was appointed as the new Non-Independent Non-Executive Chairman of the Company effective 15 July 2008. Subsequently, Dato’ Syed Faisal Albar bin Syed A.R Albar was appointed as the new Group Managing Director/Chief Executive Officer of the Company effective 1 November 2008.

On 25 February 2009, Puan Eshah was appointed to the Board as a Non-Independent Non-Executive Director of the Company.

Notwithstanding the right of the Special Shareholder to appoint Appointed Directors, there is a formal and transparent procedure in place for the appointment of Board members. The BNRC is responsible for the deliberation and proposal of suitable candidates, taking into account the required mix of skills, caliber, experience and other qualities for appointment of any proposed director including the Appointed Directors on the Board before recommendation is made to the Board for approval. The Committee is also responsible for reviewing the composition and effectiveness of the Board and the contributions of each individual Director including the Appointed Directors, on an annual basis.

The BNRC is also tasked with reviewing the performance evaluation of the GMD/CEO, ED/GCOO and Chief Level Officers of the Company namely the Chief Operating Officers, Group Chief Strategy and Planning and the Chief Financial Officer. The BNRC is to also ensure that the level and composition of remuneration are structured so as to link rewards with corporate and individual performance.

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Re-election of Directors

The Company Articles require all Directors of the Company to retire by rotation at least once in every three (3) years but are eligible for re-election at the Company’s Annual General Meeting (“AGM”).

As such, in accordance with the Company Articles, all Directors, including the Appointed Directors Appointed Directors retire from office at least once in each three (3) years and at least one-third of the number of Directors is subject to retirement by rotation at each AGM but shall be eligible to offer themselves for re-election.

Details of the Directors seeking re-election at the forthcoming AGM such as their age, qualification, working experience, other directorships of public companies and position in the Company are disclosed in the Profile of Directors contained in this Annual Report.

Directors’ Training

The Board recognizes the importance of training as a continuous education process for the Directors in order to ensure that the Directors stay abreast with the latest developments and changes in laws and regulations, business environment and challenges and to equip them with the necessary knowledge and know how to enable the Directors to fulfill their responsibilities and effectively discharge their duties.

As an integral element of the process of recruiting new Board members, new Directors will undergo appropriate orientation in respect of the business of the Group. All the Directors have attended the Mandatory Accredition Programme.

For the financial year under review, talks were organized in December 2008 for the Board and Senior Management members of the Company as part of the Company’s in-house training programme. The talks under the programme were given by renowed speakers and covered a range of topics, namely Human Resource Transformation, Postal Transformation-What Pos Malaysia Can Learn from Its Peers, Branding in Operation and Pos Malaysia-The Perspective of a Minority Shareholder and �009 Economic Outlook.

Apart from the abovementioned Programme, the Directors also attended other training programmes organized by external training organizers namely Updates on Corporate Governance Regulatory Framework and Current Issues, Talent Powered Organization and Creating Value Through Strategic Financial Management. In year �008, some Directors also visited postal organisations in Argentina, Abu Dhabi (United Arab Emirates), Egypt and France to gain more knowledge on the processes and operations of the foreign postal organisations.

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Board Committees

In accordance with the Company Articles, the Board delegates certain responsibilities to Board Committees with specified terms of reference and responsibilities.

In the financial year under review, there were five (5) Board Committees namely the Audit Committee, BNRC, Tender Board Committee, Option Committee and Finance & Investment Committee (“FIC”). However, effective 11 December 2008, the FIC has been dissolved by the Board as the main objective of the FIC, that is to look into monetization of assets of the Pos Malaysia Group, has been fulfilled.

(i) Audit Committee

The Audit Committee comprises four (4) Non-Executive Directors, of which, three (3) members including the Chairman of the Committee are Independent Directors. The members are as follows:-

(a) Datuk Low Seng Kuan (Chairman/Senior Independent Non-Executive Director)

(b) Mr. Wee Hoe Soon @ Gooi Hoe Soon (Independent Non-Executive Director)

(c) Y.M Tunku Mahmood Fawzy bin Tunku Muhiyiddin (Non-Independent Non-Executive Director)

(d) Encik Abdul Hamid bin Sh Mohamed (Independent Non-Executive Director)

All the Audit Committee members are financially literate and have strong management experience. Datuk Low Seng Kuan, Chairman of the Committee is a Chartered Accountant with the Malaysian Institute of Accountants (MIA) and is currently the Managing Director of Malaysia Sheet Glass Sdn Bhd. Mr. Wee Hoe Soon @ Gooi Hoe Soon is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants (MIA) and has vast experience in the fields of accounting and corporate finance. Encik Abdul Hamid bin Sh Mohamed is a Fellow of the Association of Chartered Certified Accountants (ACCA) and is currently Executive Director of Symphony House Berhad, a Main Board listed company, while Y.M Tunku Mahmood Fawzy bin Tunku Muhiyiddin has vast experience in investments and management and is currently Executive Director of Investments, Khazanah Nasional Berhad.

The principal functions and duties of the Audit Committee are as follows:-

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• Review the quarterly results and annual financial statements of the Company and Group prior to the approval of the Board.

• Assess the quality and effectiveness of the systems of internal control and the efficiency of the Group’s operations, particularly those relating to areas of significant risks.

• Assess the internal process for determining and managing key risks other than those that are dealt with by other specific Board committees.

• Review the evaluation by the internal and external auditors of the Group’s system of internal control and thereafter report the same to the Board.

Further details on the Audit Committee including its activities during the year under review are contained in the Audit Committee Report of this Annual Report.

(ii) Board Nomination and Remuneration Committee

The BNRC comprises six (6) Non-Executive Directors, of which, four (4) members including the Chairperson of the Committee are Independent Directors. The members are as follows:-

(a) Puan Sri Datuk Nazariah binti Mohd Khalid (Chairperson/ Independent Non-Executive Director)

(b) Datuk Low Seng Kuan (Senior Independent Non-Executive Director)

(c) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director)(Re-designated w.e.f 25 February 2009)

(d) Y.M Tunku Mahmood Fawzy bin Tunku Muhiyiddin (Non-Independent Non-Executive Director)

(e) Dato’ C. Krishnan a/l Chinapan (Independent Non-Executive Director)(f) Puan Eshah binti Meor Suleiman

(Non-Independent Non-Executive Director)(Appointed w.e.f 25 February 2009)

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The principal functions and duties of the BNRC are as follows:-

• Propose to the Board suitable candidates for appointment as Directors including membership and Chairmanship of Board Committees.

• Review on an annual basis the Board structure, size and composition.

• Propose Succession Planning for the Executive Directors and Chief Level Officers of the Company.

• Assess on an annual basis the effectiveness of the Board as a whole, the Board Committees and the contribution of each individual Director.

• Recommend to the Board the remuneration framework for the Executive Directors and to further recommend remuneration package and terms of employment of the Executive Directors and Chief Level Officers of the Company.

• Recommend to the Board performance contracts and key performance indicators (KPI) for the Executive Directors and Chief Level Officers.

(iii) Tender Board Committee

The Tender Board Committee comprises four (4) Non Executive Directors, of which three (3) members are Independent Directors. The members are as follows:-

(a) Puan Eshah binti Meor Suleiman (Chairperson/Non-Independent Non-Executive Director)(Appointed w.e.f 25 February 2009)

(b) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director)(Re-designated w.e.f 25 February 2009)

(c) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director)

(d) Dato’ C. Krishnan a/l Chinapan(Independent Non-Executive Director)

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The principal functions and duties of the Tender Board Committee are as follows:-

• Examine and where appropriate, approve awards of contracts for supply of goods, works or services within limits authorised in the DAL.

• Review selection for the appointment for successful tenderer for both close and open tender applications.

(iv) Option Committee

The Option Committee comprises six(6) Directors, of which two (2) members are Independent Directors. The members are as follows:-

(a) Tan Sri Dato’ Seri (Dr.) Aseh bin Haji Che Mat (Chairman/Non-Executive Non-Independent)

(b) Dato’ Ibrahim Mahaludin bin Puteh (Independent Non-Executive Director)(Re-designated w.e.f 25 February 2009)

(c) Dato’ Syed Faisal Albar bin Syed A.R Albar(Group Managing Director/Chief Executive Officer)

(d) YBhg Datuk Abu Huraira bin Abu Yazid (Executive Director/Group Chief Operating Officer)

(e) Mr. Wee Hoe Soon @ Gooi Hoe Soon (Independent Non-Executive Director)

(f) Puan Eshah binti Meor Suleiman (Non-Independent Non-Executive Director)(Appointed w.e.f 25 February 2009)

The principal functions and duties of the Option Committee are as follows:-

• Administer the Company’s Employee Share Option Scheme (“ESOS”) in accordance with the objectives and regulations as stated in the ESOS Bye-Laws.

• Recommend to establish, amend and revoke any rules or arrangement relating to the ESOS.

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B. DIRECTORS’ REMUNERATION

The Board through the BNRC ensures that the level of remuneration of the Executive Directors is sufficient to attract and retain the Executive Directors to manage the Group successfully. The level and make up of the remuneration is structured so as to link rewards with corporate and individual performance. The BNRC determines the performance contracts and targets and structure the rewards for the Executive Directors’ performance against these targets. The performance of the Executive Directors and key senior management positions are measured via key performance indicators that are structured early in the year to measure the performance of the key personnel.

Meanwhile, the Board as a whole determines the fees payable to Non-Executive Directors and any increase in Directors’ fees shall be subject to shareholders’ approval at the Company’s AGM. The Non-Executive Directors are paid meeting allowance for every Board Meeting that they attend and the Company also reimburses reasonable expenses incurred by the Directors in the course of their performance of duties as Directors.

Details of the remuneration of the Directors of Pos Malaysia for the financial year under review are as follows:-

Category(Director)

FeesRM’000

Salaries & Bonus RM’000

AllowanceRM’000

Total RM’000

Executive - 9�8 78 �,006

Non-Executive 363 - �6� 5�4

Total 363 928 239 1,530

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The remuneration band of the Directors of Pos Malaysia for the financial year under review are as shown below:-

Range of RemunerationNumber of Directors

Executive Non-ExecutiveBelow RM50,000 - 3

RM50,001 – RM100,000 - 6*RM100,001 – RM250,000 � -RM250,001 – RM300,000 - -RM300,001 – RM350,000 �** -RM350,001 – RM400,000 - -RM400,001 – RM450,000 - -RM450,001 – RM500,000 - -RM500,001 – RM550,000 - -RM550,001 – RM600,000 � -

* This includes the remuneration of a Director who had resigned from Pos Malaysia Board w.e.f 17 June 2008.**This was the remuneration band of the former GMD/CEO of the Pos Malaysia Group until his resignation

w.e.f 2 May 2008. C. RELATIONSHIP AND COMMUNICATION WITH INVESTORS AND SHAREHOLDERS

Investor Relations and Shareholder Communication

The Board acknowledges the importance of communication with investors and shareholders. The Group has been communicating with shareholders and investors via prompt announcements through quarterly financial reports, distribution of annual reports, quarterly announcements, relevant circulars and press releases. In addition, the Company conducts briefings and dialogues with financial analysts on a frequent basis to keep potential investors informed of the activities of the Group.

The Company’s website, www.pos.com.my also provides an avenue for keeping the general public updated on the activities of the Company. The website is a source of information on the Group’s financial results, services and products, annual reports, press releases, events, newsletters, media highlights, and other relevant information.

In the financial year under review, representatives from Khazanah Nasional Berhad, the largest shareholder of Pos Malaysia, had visited the Company as part of the GLC Transformation Road Show. The visit included a site visit to some of the facilities of Pos Malaysia as well as a dialogue with the Board and Senior Management of Pos Malaysia on inter alia the challenges faced by Pos Malaysia.

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General Meetings

The Company’s general meetings serve as the principal forum for communicating with the shareholders of the Company. At general meetings, shareholders have direct access to the Directors and are given ample opportunity and time to raise questions or seek further information from the Directors regarding the Group’s activities, financial performance and prospects as well as raise any issues of concern regarding the Group. Besides the Directors, the Senior Management and the external auditors of the Company are present at the meetings to assist in providing the necessary responses to queries from the shareholders. Prior to tabling of proposed resolutions at an AGM, the shareholders are also presented with a summary of the Group’s performance on the financial year under review by way of a slide presentation by the GMD/CEO.

D. ACCOUNTABILITY AND AUDIT

Financial Reporting

The Company’s financial statements are drawn up in accordance with the provisions of the Companies Act, �965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board. In presenting the annual financial statements and quarterly announcements of results to shareholders, the Board aims to present a balanced and understandable assessment of the Group’s position and prospects. In this regard, the Board also ensures that the Group uses acceptable accounting policies for its financial statements, consistently applied and supported by reasonable and prudent judgment and estimates.

The Audit Committee assists the Board by first reviewing the financial statements to ensure completeness, accuracy and validity prior to adoption of the statements by the Board and subsequent release to Bursa Malaysia Securities Berhad.

The Board also approves the Company’s Annual Budget and Business Plans and carries out periodic review on the progress made by the business units.

The Directors’ Responsibility Statement in respect of the Audited Financial Statement as required under Paragraph �5.�7(a) of the Bursa Securities Listing Requirements is contained in this Annual Report.

Internal Control

The Board has an overall responsibility for maintaining a sound system of internal control to provide reasonable assurance of the effectiveness of the Group’s business operations and risk management.

The Group’s state of internal control is as set out in the Statement of Internal Control contained in this Annual Report.

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Compliance

Pos Malaysia is licensed under the Postal Services Act �99� to carry out postal services in Malaysia. As such, Pos Malaysia is subject to the provisions of the Postal Services Act �99�, terms and conditions set out in the license granted under the Postal Services Act �99� and all rules and regulations on postal services set out under the Postal Services Act �99�. Pos Malaysia is also subject to the relevant Universal Postal Union Conventions and Regulations.

The Company Secretary assists the Board in ensuring compliance by the Company and the Board of Directors with the Companies Act, Bursa Securities Listing Requirements and other securities laws, rules and regulations. The Board is apprised of the latest amendments in respect thereof from time to time and its application to the Company and/or the Board. As and when necessary, the Company also seeks clarification through professional opinions on the extent of application of certain obligations and/or duties enshrined in the said laws, rules and regulations especially when it concerns duties of directors.

On the other hand, the Company’s Internal Audit assists the Board and Management in ensuring compliance by the Company with other relevant laws, rules and regulations applicable to the operations of the Company including compliance with the relevant laws, rules and regulations governing the postal business and the Company’s internal policies and procedures in respect thereof. The Internal Audit conducts regular audit checks on the Strategic Business Units and other support departments and divisions on a periodical basis and thereafter tables its audit reports to the Audit Committee for deliberation.

The Company also has an International and Regulatory Affairs Department, which serves as a platform for the Company to engage with the Malaysian Communication and Multimedia Commission, which is the regulator of the postal services in Malaysia and other relevant authorities and/or government bodies to establish and develop the postal regulatory framework for Malaysia.

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Relationship with Auditors

The Company through the Audit Committee has an appropriate and transparent relationship with the external auditors. In the course of audit of the Group’s operations, the external auditors highlights to the Audit Committee and the Board, matters that require the Board’s attention. The external auditors also report on their findings pertaining to their annual audit to the Audit Committee.

Further, the external auditors will meet the Audit Committee members without the presence of Management pursuant to Paragraph �5.�8 of the Bursa Securities Listing Requirements. During the financial year under review, the external auditors had two (2) meetings with the Audit Committee members without the presence of Management. Thereafter, the Audit Committee shares and discusses with Management all concerns raised by the external auditors (if any) pertaining to the Group. Thereafter, the necessary action plans will be formulated and be implemented by Management.

Pursuant to the requirement under Paragraph �5.�6 of the Bursa Securities Listing Requirements, the Board is pleased to report that the Company has applied the principles set out in Part � of the Code and that the Board continues to adopt and comply with the best practices in corporate governance set out in Part � of the Code.

E. NEW INITIATIVES

In the financial year under review, two (2) new initiatives were introduced and implemented by the Company as an effort to further enhance good governance within the Group. The initiatives were led by Datuk Low Seng Kuan, the Company’s Senior Independent Director and have received positive response from the relevant stakeholders. The initiatives were as follows:-

(i) Whistleblowing Policy

In an effort to inculcate a culture of openness in Pos Malaysia whereby all employees of Pos Malaysia are encouraged to practise honesty and integrity in fulfilling their responsibilities as well as comply with applicable laws, regulations, procedures and internal company policies, Pos Malaysia has launched a Whistleblowing Policy. Under the said policy, all employees can officially report under a secured and confidential environment, genuine concerns which they may have on any malpractice or suspected malpractice without fear of victimization or subsequent discrimination. These malpractices will be investigated upon according to the Whistleblowing Policy and Procedures and the relevant disciplinary action will thereafter be taken against the wrong-doers.

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(ii) Integrity Pact

In an effort to fight corruption and other improper advantages including collusion especially in the procurement activities, Pos Malaysia has launched an Integrity Pact which contains a process between Pos Malaysia and all intended bidders, contractors and consultants of Pos Malaysia to curb these unhealthy practices. The Integrity Pact procedures are applicable to tenderers, pre-qualification or consultancy services and will form part of the terms and conditions of each contract or tender documents. It contains obligations to the effect that neither side shall pay, offer or accept bribes, or collude with competitors to obtain the contract. Sanctions under the Integrity Pact range from termination of the contract, liability for damages, to blacklisting of bidders, contractors or consultants involved in these activities.

(This Statement is made in accordance with a resolution of the Board of Directors dated 23 March 2009).

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Statement of Internal Control

Introduction

THE BOARD OF DIRECTORS (‘the Board’) as guided by the Bursa Malaysia Securities Berhad’s Statement of Internal Control – Guidance for Directors of Public Listed Companies is pleased to provide the following Director’s Statement of Internal Control which outlines the nature and scope of internal control of the Group during the period under review.

Responsibility

The Board is responsible for ensuring that a sound system of internal control to safeguard shareholder’s interest and Company’s assets is maintained. The Board affirms its overall responsibility for the Group’s system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity.

As there are limitations that are inherent in any system of internal control, this system is designed to manage rather than eliminate risks that may hinder the achievement of the Group’s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss. The system of internal control covers all aspects of the business including strategic, financial, operational, compliance controls and risk management procedures.

Risk Management Framework

Policy

The Board subscribes to the fact that an effective risk management practice is a critical component of a sound system of internal control. Accordingly, the Board confirms that there is in place a formal and on-going process to identify, evaluate and manage significant risks faced by the Group that may impede the achievement of the Group’s objective throughout the year.

The Board has a stewardship responsibility to both understand these risks, communicating the requirements of this policy and to guide the organisation in dealing with these risks.

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The policy of the Board is:

• To manage risks proactively;• To manage risks pragmatically, to acceptable levels given the particular circumstances of each

situation;• To require that all papers that are put to the Board by Management relating to strategy, key

project approvals, significant action or investment must include a risk assessment summary;• To manage risk routinely and in an integrated and transparent way in accordance with good

governance practices;• To require that an effective and formalised ERM framework is established and maintained by

PMB.

Reporting Structure

Upon the appointment of PMB’s new Group Managing Director/ Chief Executive Officer, Dato’ Syed Faisal Albar bin Syed A.R. Albar in November �008, the Risk Management Committee (“RMC”) composition has been reshuffled which comprise of the Chief Operating Officers of the Strategic Business Units and Heads of the main Corporate Functions as follows:

Chairman: Dato’ Syed Faisal Albar bin Syed A.R. Albar-Group Managing Director/CEO

Members: • Datuk Abu Huraira bin Abu Yazid – Executive Director/ Group Chief Operating Officer• Dato’ Mohamed Hazlan bin Mohamed Hussain- Chief Operating Officer, PosMel (resigned wef 31.03.2009)• Dato’ Mohd Derus bin Harun - Chief Operating Officer, PosLogistik • Ahmad Nadzarudin bin Abdul Razak -Chief Operating Officer, PosLaju • Mearia bt. Hamzah - Chief Operating Officer, PosNiaga • Mohd Lutfi bin Mat Lazim – Chief Financial Officer• Mohd Rosdeen bin Hassan – Chief Information Officer• R.Hanafi bin Abdullah – Group Head, Human Resource And Administration• Bahaman bin Kamaruzzaman – Group Head, Transformation Management Office

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The RMC will take up its principal roles and responsibilities as follows:

§Monitor policy implementation and the continuous development of the risk management in the organisation;

§Formulate policy, business rules, processes and structures to meet policy implementation needs;

§Implement the processes and resource the structures; §Agree with risk parameters and controls;§Initiate and conduct business within agreed risk constraints and business rules; §Ensure that periodical risk reports are submitted accurately and in a timely manner to the Audit to the Audit

Committee and Board; and§Articulate and challenges the key risks, controls and elements of better practice and also offers

support and advice.

The Corporate Risk Management Department (“CRMD”) will act as a support for the RMC in monitoring,ct as a support for the RMC in monitoring, analysing and reporting of the risks identified enterprise-wide and would be the facilitator in the riskfacilitator in the risk assessment process. CRMD will ccontinuously evaluate the risk policy and procedures, and initiatecontinuously evaluate the risk policy and procedures, and initiate improvements by maintaining awareness of trends and developments in risk management that may have significant impact to the organization.

Risk owners and co-owners have been identified to ensure that the risk registers and risk profiles are updated accordingly. The risk registers and risk profiles of each SBUs, departments and the main subsidiary companies are updated quarterly and the consolidated reports are tabled to the RMC and the Audit Committee.

The Group Internal Audit (“IA”), which is an independent, unbiased function will be involved in validating the results of the ERM processes. The IA function examines the risk management systems for the completeness, comprehensiveness, and reliability, besides verifying the ERM system for adequacy and effectiveness.

Moving forward, the Board and the Management of PMB will continuously review and enhance the ERM framework to ensure that PMB’s ERM practices are aligned with the latest ERM development and best practices.

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Control Environment

The control environment sets the tone of the organization and influencing the control consciousness of its Group personnel. It is the foundation for all components of internal control, providing discipline and structure. Control environment factors include the integrity, ethical values and competency of the Group personnel; management’s philosophy and operating style; the way the management assigns authority and the responsibility, organize and develops its Group personnel; and the attention and direction provided by the Board of Directors. The Group is committed in ensuring that a proper control environment is maintained. Among the measures taken are regular internal audit visits to appraise and review the systems of internal controls to ensure that these controls are effective and working as intended.

Other Key Elements of Internal ControlThe other key elements of the Group’s internal control systems are described below:

§The roles and responsibilities of the Board of Directors, Risk Management Committee, Business and Support Units and State offices in respect of Risk Management are defined in the Risk Management Policy.

§The lines of responsibility and frequency of reporting of risks are also defined in the Risk Management Policy.

§Operating policies and procedures, which incorporate regulatory and internal requirements, are prescribed in Operating Procedures and Circulars. The documents are updated as and when necessary to meet the continually changing operational needs.

§The Board meets at least quarterly to review the Group’s operational and financial performance against approved budget, approve quarterly report to Bursa Malaysia Securities Berhad and deliberate on issues that require the Board’s approval. In addition, the Board is also updated on the changes in the business environment that may adversely affect business performance and relevant actions taken.

§The Audit Committee, together with the Internal Audit Department provides an independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system and advises management on areas that require improvement.

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The monitoring, review and reporting arrangements in place give reasonable assurance that the structure of controls and its operations are appropriate to the Group’s operations and that risks are at an acceptable level throughout the Group. However, the arrangements do not eliminate the possibility of human error or deliberate circumvention of control procedures by employees.

The Board believes that the development of the system of internal control is an ongoing process and has taken steps throughout the year to improve its internal control system and will continue to do so.

Weakness in Internal Control That Result In Material Losses

To the best of the Board’s knowledge, there were no material losses or material fraud incurred during the period under review as a result of weaknesses in internal control. Management continues to take measures to improve and strengthen the internal control environment.

(This Statement is made in accordance with the resolution of the Board of Directors dated 23 March �009)

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Directors’ Responsibility statement

Pursuant to Paragraph �5.�7(a) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors is required to include a statement in the Company’s Annual Report explaining its responsibility for preparing the annual audited financial statements.

In preparing the financial statements of the Company and the Group for the financial year ended 31 December 2008, the Directors are satisfied that the Company and the Group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. The Directors are also satisfied that all applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, �965 have been complied.

The Directors are responsible for ensuring that the Company and companies within the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and of the Group. In addition, the Directors are responsible to take such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

(This Statement is made in accordance with a resolution of the Board of Directors dated 23 March 2009.)

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Additional Compliance Information

1. Utilisation of Proceeds

During the financial year ended 31 December 2008, there were no proceeds raised by the Company from any corporate proposals.

2. Share buy-back

During the financial year under review, the Company has not exercised any share buy-back permitted by Section 67A of the Companies Act, �965.

3. Options, Warrants or Convertible Securities

a. Employee Share Option Scheme (ESOS)

The details of the ESOS are disclosed under Notes to the Financial Statements of this Annual Report.

b. Warrants

During the financial year, the Company did not issue or exercise any warrants or convertible securities.

4. American Depository Receipt (ADR)/ Global Depository Receipt (GDR)

During the financial year ended 31 December 2008, the Company did not sponsor any ADR and GDR.

5. Sanctions and/or Penalties

During the financial year under review, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies.

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Additional Compliance Information

6. Variation in Results

There is no variance in the Company’s audited financial results for the financial year ended 3� December �008 from the unaudited results as previously announced. The Company has not released or announced any estimated profit, financial forecast and projection in the financial year ended 3� December �008.

7. Profit Guarantee

During the financial year ended 31 December 2008, the Company did not give any profit guarantee.

8. Material Contracts

There were no material contracts entered into by the Company or its subsidiaries involving the directors and substantial shareholders, either still subsisting at the end of the financial year ended 31 December 2008 or entered into since the end of the previous financial year.

9. Revaluation Policy

During the financial year ended 31 December 2008, the Company did not have any revaluation policy on landed properties.

10. Non-Audit Fees

The amount of non-audit fees paid and payable to external auditors by the Group for the financial year ended 31 December 2008 is RM762,026 which includes the risk diagnostic review on shared banking services and investigative review on investment in associate and other investment.

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Audit Committee Report

The Board of Directors of Pos Malaysia is pleased to present the report on the Audit Committee of the Board for the financial year ended 31st December �008.

MEMBERS AND MEETINGS

The Audit Committee of Pos Malaysia had convened seven (7) meetings during the financial year under review. The details of the Pos Malaysia Audit Committee members and the attendance of their meetings are as follows:

Membersa) Datuk Low Seng Kuan

(Independent Non-Executive Director)Chairman

b) Wee Hoe Soon @ Gooi Hoe Soon(Independent Non-Executive Director)

Member

c) Tunku Mahmood Fawzy bin Tunku Muhiyiddin(Non-Independent Non-Executive Director)

Member

d) Abdul Hamid bin Sh Mohamed(Independent Non-Executive Director)

Member

Attendance of Meetings

Members Total

a) Datuk Low Seng Kuan 7 / 7

b) Mr Wee Hoe Soon @ Gooi Hoe Soon 7 / 7

c) YM Tunku Mahmood Fawzy bin Tunku Muhiyiddin 6 / 7

d) Encik Abdul Hamid bin Sh Mohamed 7 / 7

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TERMS Of REfERENCE

The Terms of Reference of the Audit Committee had been amended to be in line with the Listing Requirements of Bursa Malaysia Securities Berhad and the Malaysian Code on Corporate Governance. The Terms of Reference of the Audit Committee are as follows:-

Composition of Committee

The Audit Committee shall be appointed by the Board of Directors upon recommendation of the Board Nomination and Remuneration Committee which fulfils the following requirements:-

• The Audit Committee shall consist of not less than three (3) members;• All the members of the Audit Committee must be non-executive directors, with a majority of

them being independent directors as defined under the Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”);

• At least one (�) member of the Audit Committee must meet the criteria set by the Listing Requirements as follows:-

o Must be a member of the Malaysian Institute of Accountants; oro If he/she is not a member of the Malaysian Institute of Accountants, he must have at

least three (3) years working experience; ando He/she must have passed the examinations specified in Part I of the 1st Schedule of the

Accountants Act 1967; or he/she must be a member of one (1) of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

o Fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad.

• The members of the Audit Committee shall elect a Chairman from amongst themselves who shall be an Independent Director

• No Alternate Director should be appointed as a member of the Audit Committee.• In the event of any vacancy in the Audit Committee resulting in the non-compliance of the

Listing Requirements pertaining to composition of the Audit Committee, the Board of Directors shall within three (3) months of that event fill the vacancy.

• The Audit Committee members shall collectively:-(a) Have knowledge of the industries in which the Group operates; and(b) Have the ability to understand key business and financial risks as well as related controls

and control processes.

• All members of the Audit Committee shall also be financially literate i.e. have the ability to read and understand fundamental financial statements, including a Company’s balance sheet, income statement, statement of cash flow and key performance indicators.

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Audit Commitee Meetings

The Audit Commitee Meetings shall be held not less than four (4) times a year. In addition to the members of the Audit Committee, the meeting shall be attended by the Managing Director/Group Chief Executive Officer, Chief Financial Officer and Chief Internal Auditor. Other members of the Board, senior management and external auditors’ representatives may attend the meetings upon invitation of the Audit Committee. The auditors, both internal and external, may request a meeting if they deem necessary.

The quorum for a meeting of the Audit Committee shall comprise a majority of Independent Directors from amongst its members. In the absence of the Chairman, the members present shall elect a chairman for the meeting from amongst the member present. Minutes of each meeting shall be kept and distributed to each member of the Audit Committee and of the Board. The Audit Committee shall report on each meeting to the Board. The Secretary to the Audit Committee shall be the Company Secretary or any other person as the Committee may decide.

Rights and Authority

The duties of the Audit Committee shall be in accordance with the same procedures adopted by the

Board:-

• Have authority to investigate any activity within its Terms of Reference;

• Have the resources which are required to perform its duties;

• Have full and unrestricted access to any employee and information pertaining to the Group. All documents of the Group shall be made accessible to the Audit Committee and all employees are directed to co-operate with the request made by the Audit Committee;

• Have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity for the Group; and

• Be able to engage independent professional advisers or other advisers and to secure attendance of other third parties with relevant experience and expertise if it considers necessary.

Notwithstanding anything to the contrary, the Audit Committee does not have executive powers and shall report to the Board of Directors on matters considered and its recommendation thereon, pertaining to the Group and the Company.

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Review of the Audit CommitteeThe performance of the Audit Committee and each of the members shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with their Terms of Reference in the Corporate Governance Statement.

RESPONSIBILITIES AND DUTIES

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

a. Risk Management

To review the adequacy and effectiveness of Enterprise Risk Management (ERM), reporting structures, risk profiles and governance processes.

b. Internal Audit

• To approve the appointment, replacement and dismissal of the Chief Internal Auditor and its deputy;

• To review the adequacy of the scope, functions, competency and resources of Internal Audit Department and that it has the necessary authority to carry out its work;

• To review and approve the Annual Risk Based Audit Plan, Key Performance Indicators and subsequently appraise the performance of the IAD.

• To monitor the effectiveness in the implementation of the Whistleblowing Policy and procedure and other related governance processes;

• To review the internal audit reports on significant/ major audit findings and management’s responses to ensure that appropriate and adequate remedial actions are taken by the management; and

• To review the systems of internal controls with the auditors.

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c. External Audit

• To review the external auditors’ audit plan, scope of their audits and their management letters and ensure appropriate and adequate remedial actions are taken by management on significant lapses in controls and procedures that are identified;

• To assess the performance of the external auditors and make recommendations to the Board of Directors on their appointment and removal;

• To recommend the nomination of external auditors, their audit fees and resignation or dismissal of external auditors and thereafter report the same to the Board;

• To review the quarterly and annual financial statements of the Group and the Company focusing on the matters set out below, and thereafter submits them to the Board:-

• Any changes in or implementation of major accounting policies and practices;

• Major judgmental areas, significant and unusual events;

• Significant adjustments arising from the audit;

• Going concern assumption; and

• Compliance with Accounting Standards and regulatory requirements.

• To discuss problems and reservations arising from the interim and final audits and any matter the external auditors may wish to discuss.

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d. Other matters

• To review related party transactions entered into by the Group and the Company and to ensure that such transactions are undertaken on the Group’s normal commercial terms and that the internal control procedures with regards to such transactions are sufficient.

• Any other functions as may agreed to by the Committee and the Board.

• Where the Audit Committee is of the view that a matter reported to the Board of Directors has not been satisfactorily resolved resulting in a breach of the listing requirements of Brusa Malaysia Securities Berhad, the Committee has the responsibility to properly report such matter to Brusa Malaysia Securities Berhad.

SUMMARY OF ACTIVITIES

During the year, the Audit Committee carried out the following activities:-

Financial Reporting

a. Reviewed quarterly and annual financial reports of the Group and the company prior to submission to the Board of Directors for approval. The review was to ensure that the financial reporting and disclosure are in compliance with;

• Provisions of the Companies Act, 1965;

• Listing requirements of Bursa Malaysia Securities Bhd;

• Applicable approved accounting standards in Malaysia; and

• Other legal and regulatory requirements.

In the review of the annual audited financial statements, the Audit Committee discussed with Management and the external auditors, the accounting principles and standards that were applied and their judgment of the items that may affect the financial statements.

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Internal Audit

a. Reviewed the risk based annual audit plan to ensure adequacy of the scope and coverage of major risk areas of the Group;

b. Reviewed the Key Performance Indicators of Internal Audit Department and appraised the department’s performance and competency level;

c. Reviewed the effectiveness of the audit process, resource requirements for the year;

d. Reviewed the internal audit reports which were tabled during the year, the audit recommendations made and management’s responses to these recommendations where appropriate, the committee has directed management to rectify and improve internal controls and Standard Operating Procedures based on the internal auditor’s recommendations and suggestions for improvement;

e. Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses had been addressed; and

f. Monitored internal audit activities and the staffing requirements, skills and the core competency of the Internal Auditors.

External Auditors

a. Reviewed the external auditors:-

• their audit plan, audit strategy and scope of work for the year;

• the results of annual audit, their audit reports and management letter together with management’s response to the findings of the external auditors;

b. Evaluated the performance and the effectiveness of the external auditors and made recommendations to the Board of Directors on their appointment and remuneration.

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Related Party Transactions

Review related party transactions entered into by the Group and the company and the disclosure of such transactions as per the regulatory requirements.

INTERNAL AUDIT FUNCTION

The Audit Committee is assisted by the Internal Audit Department to effectively discharge its duties and responsibilities. The Internal Audit Department reports directly to the Audit Committee. In �008, there were seven (7) Audit Committee meetings held to deliberate on major audit findings. In general, the Internal Audit Department provides an independent assurance on the adequacy and effectiveness of internal controls, corporate risk management and overall governance processes.

Annually, the Internal Audit Department prepares a risk based audit plan and presents to the Audit Committee for approval. In view of scarce resources, the risk based audit plan gives priority and focuses on company’s top risks identified by the management.

The audit scope includes performing audit reviews at Strategic Business Units (SBUs), States Management Offices, Support Services Departments and subsidiaries.

The audits cover the reviews on:-

1. the adequacy of internal controls;

2. the effectiveness and efficiency of operations;

3. the accuracy of financial and operational information;

4. the compliance with internal policy & procedure, regulatory and statutory requirements;

5. the adequacy and effectiveness of IT systems in supporting operations; and

6. the effectiveness of risk management processes and the implementation of controls by management to mitigate company’s major risks.

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The Internal Audit Department also conducted ad-hoc assignments and investigation audits requested by the Audit Committee and management. Further, Internal Audit Department conducts regular follow-up on the closing of audit issues with input from the management. In ensuring effective communication of audit issues to all operational areas and prompt closing of audit issues, meetings were held with the management on a regular basis. Management is responsible for ensuring that corrective actions on reported weaknesses and suggested improvements as recommended are taken within the required timeframe.

The Internal Audit Department also provides consultancy services to the management in evaluating the risk exposures of new business products and projects prior to implementation and ensures that controls are in place to mitigate risks identified. The Internal Audit Department assisted the management in setting up Whistleblowing policy and introduced “Integrity Pact” for big tenders to improve transparency and integrity of tendering processes.

The Internal Audit Department independently reviews the risk management governance processes to ensure their adequacy and effectiveness and reports to the Audit Committee on a periodical basis.

_____________________

Datuk Low Seng KuanChairman

Audit Committee

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