distribute all or part of its own shares as dividends to the company's shareholders; At the 21st Annual General Meeting, no one ran for director of the company.
5 YEARS KEY STATISTICS
DEPUTY CHAIRMAN’S STATEMENT
Dear valued shareholders,
The outlook for the palm oil industry remains optimistic as operations resume, producer production improves and consumption in traditional markets increases. The price of crude palm oil (“CPO”) is expected to remain high in the first half of 2021 due to tight supply-demand dynamics, but will moderate in the second half of 2021.
DEPUTY CHAIRMAN’S STATEMENT (cont’d)
Malaysia's economic recovery in 2021 is expected to be gradual, with growth partly driven by a low base effect from 2020. The strong momentum was supported by several factors, namely a shortage of palm oil production, stockpiling from China, a shortage of the production of competing oils, the exemption of palm oil export duties in Malaysia and the La Niña weather.
PROFILE OF DIRECTORS
PUAN SRI DATIN CHAN PUI LEORN
LOW QUEK KIONG
PROFILE OF DIRECTORS (cont’d)
LOW KUECK SHIN
LOW KWEK LEE
LOW KUEK KONG
LOH WANN YUAN
Dato' Ali was an officer in the Malaysian Armed Forces until his retirement in July 1997. Dato' Ali is not related to any director or significant shareholder of Harn Len and has no conflict of interest in any business arrangement involving the company.
LAW PIANG WOON
He is chairman of the remuneration committee and also sits on the audit committee and the nomination committee. In addition, he is also a council member of the Johor Bahru Chinese Chamber of Commerce and Industry and a committee member of its youth department.
MOHAMED AKWAL SULTAN
He is currently the Managing Director of My Tech Division Sdn Bhd, a company involved in one-stop HR solutions, software development and IT solutions. In addition to his leadership of the Company, he is also an Independent Non-Executive Chairman of Eastland Equity Bhd, a Main Board listed company.
LOW KOK YONG
Mohamed Akwal Sultan Mohamad (En Akwal), aged 67, a Malaysian male, was appointed to the Board of Directors of Harn Len as an independent non-executive director on 28 March 2014. He is not related to any director or significant shareholder of Harn Len and have no conflict of interest in any business agreement involving the Company.
LOW KOK YAOW
KEY MANAGEMENT OFFICERS
LOW YEW YERN
MDM LAI NYUK FAH
MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT
The group's net assets improved by 38.8% to RM311.6 million in FY2020 compared to RM224.5 million in FY2019, mainly contributed by stronger net liquidity from the LH disposal and subsequent reduction in loans and borrowings and other debt. The Group continues to maintain a prudent and prudent approach to managing its capital resources to meet operational requirements and capital expenditure from time to time.
MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT (cont’d)
EBITDA turned positive at RM139.8 million as the group's strategies to manage costs and increase productivity helped improve performance. As at 31 December 2020, the group's total planted area was higher at 17,091 hectares due to the completion of planting on some land previously developed in Sarawak. This segment mainly derives rental income from the letting of the group's commercial and industrial properties, which includes the group's flagship building, Johor Tower.
As the COVID-19 pandemic emerged as an additional challenge to the Group's operations and the implementation of the Strategic Turnaround Plan, the Group has incorporated such considerations into business strategies and implementation. To date, the Group's focus on its strategic priorities has strengthened its financial position and ongoing initiatives have been and are being undertaken to rationalize operating costs and drive productivity. Against this backdrop, the Board adopts a cautious stance towards the overall market condition, while continuing to undertake a cautious and vigilant approach to strengthen the Group's operational foundations through cost rationalization and performance optimization measures.
CORPORATE GOVERNANCE OVERVIEW STATEMENT
CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)
- REMUNERATION
- DIRECTORS’ RESPONSIBILITY FOR PREPARING THE ANNUAL AUDITED FINANCIAL STATEMENTS
- COMMUNICATION WITH STAKEHOLDERS
- CONDUCT OF GENERAL MEETINGS
In the performance of its duties, the Board has full and unrestricted access to information pertaining to the company and directors are entitled to obtain independent professional advice at the Company's expense. The profile of each Director is set out on pages 14 to 19 of the Company's 2020 Annual Report. At the end of the financial year under review, the Board has three (3) INEDs, who have individually served for more than twelve (12) years as Independent Directors.
They have shown their commitment to the Company by attending all the meetings of the Board and Board Committees of which they are members. The Council advocates fair and equal participation and opportunities for all individuals of the right caliber. The remuneration is determined on the basis of relevant market relationships, performance of the Group and individuals, qualifications and experience.
SUSTAINABILITY REPORT
SUSTAINABILITY REPORT (cont’d)
COMPOSITION
The Company has established an Audit Committee ("Committee") in accordance with Clause 15.09(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities"). The Board of Directors (“the Board”) appoints members of the committee from among its members who meet the following requirements:. a) The committee must consist of at least three (3) members.
MEETINGS
ROLES AND RESPONSIBILITIES
AUDIT COMMITTEE REPORT
AUTHORITY
SUMMARY OF WORKS DURING THE FINANCIAL YEAR
AUDIT COMMITTEE REPORT (cont’d)
SUMMARY OF WORKS DURING THE FINANCIAL YEAR (cont’d)
The principal activities undertaken by the Committee during the financial year and up to the date of this report are summarized as follows: (Continued). Dates for audit committee meetings are pre-scheduled and communicated to the auditors in advance to prepare audit review memorandum, audit planning memorandum and audited financial statements for presentation to the audit committee in order to meet relevant deadlines. The group entrusted the internal audit to the independent internal audit services provider Ernst &.
The main function of internal audit is to undertake systematic reviews of the internal control system within the Group in accordance with an approved internal audit plan, in order to provide assurance that such system is adequate and functioning as intended. The Internal Auditor's responsibilities are to provide independent and objective reports on the state of internal controls of the various operating units within the Group to the Audit Committee and to provide recommendations for improving control procedures, in order to take corrective actions to mitigate the observed weaknesses. in the system and controls of the relevant operating units. Details of internal audit activities and scope of coverage, including cost incurred for the outsourced internal audit function, are set out in the Risk Management and Internal Control Statement included in this Annual Report.
REVIEW OF THE AUDIT COMMITTEE
Bursa Securities also requires that such statement include sufficient and meaningful information to enable shareholders and other interested parties to make an informed assessment of the main features and adequacy of the listed issuer's risk management and internal control system as a group. Pursuant to the above, the Board of Directors of Harn Len Corporation Berhad (the "Company") issues this statement setting out the nature and scope of the risk management and internal control system of the Group (comprising the Company and all its subsidiaries) for the financial year then ended December 31, 2020, and until the date of approval of this statement for inclusion in the company's annual report. The Board of Directors recognizes its overall responsibility for the Group's system of risk management and internal control to protect shareholders' investments and the Group's assets, including reviewing the adequacy and operational effectiveness of this system in meeting the Group's corporate objectives.
The Board must disclose the characteristics of its risk management and internal control framework, and the adequacy and effectiveness of this framework. In light of the limitations inherent in any system of risk management and internal control, the Group's system of risk management and internal control is designed to manage the risk of failure to achieve the Group's corporate objectives, rather than to to call The Group's system of risk management and internal control can therefore only provide reasonable, but not absolute, assurance against any material misrepresentation, financial loss or fraudulent activity.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Main Market Listing Requirements ("Listing Requirements") of Bursa Malaysia Securities Berhad ("Bursa Securities") provide that the Board of Directors ("Board") of a listed issuer must issue a statement on the state of risk management and internal control of the listed issuer as a group (hereinafter known as the "Statement on risk management and internal control" or the "Statement"). This statement has considered and included the mandatory content announced in the "Statement on Risk Management and Internal Control - Guidelines for Directors of Listed Issuers", a publication of Bursa Securities which seeks to provide guidance to listed issuers in the preparation of the the declaration. Applying Practice 9.1 of the MCCG, the Board formalized an Enterprise Risk Management Framework ("ERM Framework" or "Framework") in 2007 with the assistance of a reputable consulting firm to provide insight into how relevant risk management policies and procedures could be developed in the group.
This framework, which, among other things, sets out policies and guidelines to streamline the group's risk management efforts and activities in a structured and holistic way to safeguard the shareholders' and the group's investments. Risk management is embedded in the Group's key business processes through its ERM Framework, which, among other things, delineates a step-by-step approach to identifying and evaluating risks faced by business units and the Group. In order to streamline risk management processes and activities, the board has developed the above-mentioned ERM Framework, which must be adhered to by business units across the group.
STATEMENT OF RISK MANAGEMENT AND INTERNAL CONTROL
Audit and Non-Audit Fees
Employees’ Share Scheme (ESS)
ADDITIONAL COMPLIANCE INFORMATION
- Employees’ Share Scheme (ESS) (cont’d)
- Contracts Relating to Loan
- Recurrent Related Party Transactions (“RRPT”) of Revenue Nature
- Utilisation of Proceeds
The amount of audit and non-audit fees incurred by the Group during the year for the financial year ended December 31, 2020 is as follows. The following material contracts were entered into within the two (2) years immediately preceding the date of this 2020 Annual Report. Further information about the ESS is set out in the Directors' Report and Note 28 to the Audited Financial Statement for the 2020 financial year in this Annual Report.
There were no contracts relating to a loan by the Company and its subsidiaries in respect of the preceding item. The details of the recurring related party transactions of income or trade in nature undertaken by the Company during the financial period are disclosed in Note 29 to the financial statements. The proceeds of RM2,800,000 obtained from the Private Placement completed on 14 July 2020 were fully utilized for general working capital within the time frame of three months from the date of listing of the Placement Shares.
ADDITIONAL COMPLIANCE INFORMATION (cont’d)
