CAHYA MATA SARAWAK ANNUAL REPORT 2016

A N N U A L R E P O R T 2 0 1 6 Section 06 Governance 61 Cahya Mata Sarawak Berhad exercise independent judgement and act in the best interests of the Company. In this regard, the Board, through the NRC, actively seeks to maintain a strong independent element on the Board by undertaking the following during the year 2016: • Conduct assessment of Independent Directors following the criteria guided by the definition of “independent director” under the MMLR • Annual declaration of independence Currently, the Company has one (1) long serving Independent Non-Executive Director, Y A M Tan Sri Dato’ Seri Syed Anwar Jamalullail, whose tenure is more than nine (9) years. Pursuant to its TOR and in line with Recommendation 3.1 of the Code, the NRC has assessed the independence of Y A M Tan Sri Dato’ Seri Syed Anwar Jamalullail and recommended to the Board to retain him as an Independent Non-Executive Director of the Company and tocontinue toact as Independent Chairman of the Board in view that he continues to provide strong leadership for the Board. The NRC and Board are satisfied that he is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgement, objectivity or the ability to act in the best interests of the Company. The NRC and Board have therefore recommended the proposal to re-elect him as a Director of the Company in accordance with Article 110 of the Company’s Articles of Association and to retain him to act as an independent director of the Company. In line with Recommendation 3.3 of the Code, a proposal is being submitted to shareholders for their approval at the 42 nd AGM. FOSTERING COMMITMENT Time Commitment To facilitate the Directors’ time planning, an annual meeting calendar is prepared and circulated by theGroup Company Secretary and agreed with the Directors before the commencement of each year. All the scheduled meetings dates for the Board, Board Committee and AGM, as well as the Board Strategic Retreat are set in advance in the Directors’ calendar for the year. The Board has, in place, a protocol for accepting directorships on the boards of companies outside of the Group. The protocol requires members of the Board to inform the Board prior to their acceptance of any new directorship on companies outside of the Group to ensure that the appointment is not in conflict with the Group’s business. Directors are also required to declare their directorships and/or interests in other public and private companies upon appointment and on a half- yearly basis. The Directors also notify the Company of any subsequent change in their directorships and/or interests in public and private companies. The Company will subsequently notify the other Directors upon receiving notice of such changes. None of the Directors of the Company hold more than five (5) directorships in public listed companies, in compliance with the MMLR. Directors also attend site and/or plant visits from time to time which are arranged with the respective Senior Management in the Group. In 2016, members of the Board attended an official site visit to the new Cement Plant and the launching of East Malaysia’s first integrated cement plant at CMS Clinker plant in Mambong, Kuching and on 5 September 2016 and 8 November 2016 respectively. Supply of Information to the Board Board and Board Committee meetings are conducted in accordance with a structured agenda. To provide ample time for Directors to study and evaluate the matters to be discussed and subsequently make effective decisions, the Board and Board Committee meeting notice, agenda items and papers are circulated at least one (1) week prior to the meeting. There is a schedule of matters reserved specifically for the Board’s decision which is detailed in the Group LOA Manual. This includes approval of quarterly results, strategic and/or corporate plans and budgets, acquisition and disposal of undertakings and properties of a substantial value, major investments and financial decisions, risk assessment, Senior Management recruitment, succession planning, updates on strategic investments and changes in regulatory requirements and/or guidelines, as well as significant changes to the management and control structure within the Group, including key policies, procedures and delegated authority limits. The Chairman of the respective Board Committees reports to the Board on the outcome and/or key issues deliberated by the Board Committees at the Board meetings. Any recommendations for Board approval are also presented and deliberated prior to decision making. The Board is also notified of any announcement released to Bursa Securities and the impending restriction on dealings with the securities of the Company prior to the announcement of the quarterly financial results. Meeting Attendance In 2016, the Board had five (5) scheduled Board meetings. There was no unscheduled Board meeting in 2016. Directors who are unable to attend a meeting are invited to give the Chairman their views and comments on matters to be discussed in advance. Statement on Corporate Governance