The Board of Directors (the “Board”) is committed to ensuring a high standard of corporate governance is practiced throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholder’s value and the financial performance of the Group.

The Board is pleased to present the following report on the application of the principles and compliance with best practices as set out in the Malaysian Code on Corporate Governance.

BOARD OF DIRECTORS

Board Composition and Balance

The Board has the ultimate and overall responsibility for the strategic direction, internal control systems, risk management, corporate governance and overseeing the investments of the Group.

The Board currently has 7 members comprising 4 Executive Directors and 3 Independent Non-Executive Directors. The Chairman of the Board is an independent non-executive director. The current composition of the Board is in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which states that at least 2 directors or 1/3 of the board of directors, whichever is higher, must be independent directors. The Board members, with different background and specialisation, collectively bring with them a wide range of experience and expertise to lead and control the Company. With their intimate knowledge of the Group’s business, all Board members are committed to take on the primary responsibilities to direct towards successful growth of the Company and ultimately the enhancement of long-term shareholders’ value.

There is a clear division of responsibilities between the Independent Non-Executive Directors and the Executive Directors to ensure a balance of authority and power. The Executive Directors are responsible for the day-to-day operations, implementation of Board policies and making operational decisions, while the Independent Non-Executive Directors play a pivotal role in ensuring corporate accountability as they provide an essential source of impartial and professional advice and judgement.

Meetings

The Board meets at least four (4) times a year at quarterly intervals with additional meetings to be convened as and when required. During the financial year ended 31 December 2009, the Board convened five (5) meetings, with details on the attendance of Directors listed below: -

Supply of Information

The Board recognises that the decision making process is highly dependent on the quality of information furnished. As such, in discharging their duties, the Directors have full and timely access to all information concerning the Company and the Group. Prior to each Board meeting, the agenda together with relevant reports and Board papers would be circulated to all Directors in sufficient time to enable effective discussions and decision making during Board meetings. In addition, the Board is also notified of any corporate announcements released to the Bursa Malaysia Securities Berhad.

All the Directors have full access to the advice and services of the Company Secretaries, senior management staff, external auditors and other independent professionals at all times in the discharge of their duties and responsibilities.

Board Committees

The Board has established and delegated specific responsibilities to 3 Committees of the Board, which operate within clearly defined written Terms of Reference. The Board Committees deliberate issues on a broad and in-debt basis before putting up any recommendation to the Board for approval.

1. Audit Committee

The Audit Committee reviews issues of accounting policy and presentation for external financial reporting, monitors the work of the internal audit function and ensures that an objective and professional relationship is maintained with the external auditors. Its principal function is to assist the Board in maintaining a sound system of internal control.

The Committee has full access to the auditors both internal and external who, in turn, have access at all times to the Chairman of the Committee. The Committee meets with the external auditors without any executive present at least twice a year.

2. Remuneration Committee

The Remuneration Committee is delegated the responsibility to develop the Group’s remuneration policy and to review and recommend to the Board the remuneration packages and terms of employment of the executive directors.

The Remuneration Committee comprises the following members: -

Nominating Committee

The Nominating Committee is delegated the responsibility to ensure a formal and transparent procedure for the appointment of new directors to the Board. The Nominating Committee will review and assess the proposed appointment of new directors, and thereupon make the appropriate recommendations to the Board for approval.

In addition, the Nominating Committee is also responsible for reviewing candidates for appointment to the Board Committees and making appropriate recommendations to the Board for approval. It is also tasked with assessing the competencies and effectiveness of the Board, the Board Committees and the performance of individual directors ensuring that the required mix of skills and experience are present on the Board.

The Nominating Committee comprises the following members:

Appointments to the Board and Re-election of Directors

There is in place a formal and transparent procedures for appointment of Directors to the Board. The proposed appointment of member(s) of the Board as well as the proposed re-election of Directors seeking re-election at the Annual General Meeting are recommended by the Nominating Committee to the Board for its approval.

The Company’s Articles of Association provides that at each Annual General Meeting, one-third (1/3) of the Directors for the time being shall retire from office and an election of Directors shall take place provided always that each Director shall retire at least once in every three (3) years but shall be eligible for re-election. Any Directors appointed during the year shall hold office only until the next Annual General Meeting and then be eligible for re-election.

The following Directors shall retire at the forthcoming Tenth Annual General Meeting of the Company. Being eligible, they have offered themselves for re-election:-

(a) Lau Kee Von
(b) Lau Pak Lam
(c) Dato’ Sri Koh Kin Lip

Directors’ Training

All the Directors of the Company have completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. All Directors are encouraged to undergo relevant training programmes from time to time to further enhance their knowledge to enable them to discharge their duties more effectively.

During the financial year ended 31 December 2009, the Directors attended individually or collectively various training programmes, conferences, seminars and courses organized by the Group, the relevant regulatory authorities and professional bodies as follows:-

• CEO course at Public University.
• Food and Food Machinery Exhibition.
• Seminar on Project Construction Process Talk.
• Seminar on Appraising for Self Improvement and the Company.
• Seminar on The inside story of the Annual Report.
• IGAF Asia Pacific Conference 2009 Singapore.
• 2010 Budget Seminar Highlights & Implications.
• 2010 Budget Talk.
• Tax Planning Knowledge & Strategy – 2010 Budget.

DIRECTORS’ REMUNERATION

The Remuneration Committee evaluates and recommends to the Board the remuneration packages of the Executive Directors. It is, nevertheless, the ultimate responsibility of the Board to approve the remuneration of the Executive Directors. The Board as a whole determines the remuneration packages of non-executive directors with the Director concerned abstaining from the deliberations on decisions in respect of his remuneration.

The aggregate remuneration of the Directors of the Company for the financial year ended 31 December 2009 is as follows:-

SHAREHOLDERS

Dialogue Between Companies And Investors

The Board is responsible for ensuring that high quality and relevant information are made available to shareholders to keep them abreast of all material business matters affecting the Group. Announcements, annual reports, quarterly financial results and other relevant information are released timely to the Bursa Malaysia Securities Berhad and are also accessible via the Company’s website at www.cocoaland.com. Any query regarding the Group may be conveyed to the following persons:-

Liew Fook Meng
Executive Director
fookmeng@cocoaland.com

Tai Chun Wah
Group Accountant
taichunwah@cocoaland.com

The Annual General Meeting

The Annual General Meeting (“AGM”) remains the principal forum for dialogue with the shareholders of the Company.

Shareholders are encouraged to attend the AGM and any other meetings of the shareholders where it provides the opportunity for shareholders to raise questions or concerns with regards to the Group as a whole. It also serves as a platform for shareholders to have direct access to the Board.

ACCOUNTABILITY AND AUDIT

Financial Reporting

In presenting the annual financial statements and quarterly announcements of financial results, the Board aims to present a balanced and meaningful assessment of the Group’s financial positions and prospects. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and accuracy of its financial reporting.

Internal Control

The Board firmly believes in maintaining a sound system of internal control with a view to safeguard shareholders’ investment and the Group’s assets. The Group’s inherent system of internal control is designed to provide reasonable and not absolute assurance against the risk of material misstatement or loss.

Relationship with Auditors

The Group has established a transparent and an appropriate relationship with the external auditors through the Audit Committee. The auditors would highlight to the Audit Committee and the Board from time to time on matters that require the Board’s attention. The Audit Committee meets the external auditors without the presence of Executive Director or the management at least twice a year.