BOARD OF DIRECTORS

The Board of Directors ("Board") of Sino Hua-An International Berhad ("Hua-An Group " or "the Company") regard Corporate Governance as vitally important to the success of Hua-An Group's business and unreservedly committed to applying the principles necessary to ensure that the following principles of good governance is practiced in all of its business dealings in respect of its shareholders and relevant stakeholders:

The Board is the focal point of the Company's Corporate Governance system. It is ultimately accountable and responsible for the performance and affairs of the Company.
All Board members are expected to act in a professional, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.
All Board members are responsible to the Company for achieving a high level of good governance.

Composition and Board Balance

The Board consists of qualified individuals with diverse experience, backgrounds and perspectives. The composition and size of the Board is such that it facilities the making of informed and critical decisions.
At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members are Independent Directors.
Profiles of Board members are shown at About The Management.
The Executive Chairman, Managing Director and the Executive Directors are the "Executive" Directors on the Board. However, the views of the management are represented at the meetings of the Board by the presence of senior executives when required.
Non-Executive Directors meet as a group at least once a year without the Chairman, Managing Director or Executive Directors present.
The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
The Independent Directors help to ensure that the interests of all shareholder and not only the interests of a particular fraction or group are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.
The views of the Independent Directors should carry significant weight in the Board's decision-making process.

The Board of Directors of Hua-An Group is responsible for the overall performance of the Company. It provides stewardship to the Company's strategic direction and operations in order to maximise shareholders' value.

The Board's principal functions are as follow:

Establishing and reviewing the strategic direction of the Company;
Overseeing the conduct of the Company's business to evaluate whether the business is being properly managed;
Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;
Establishing a succession plan for the Company;
Developing and implementing an investors relations programme or shareholder communications policy for the Company;
Reviewing the adequacy and the integrity of the Company's internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

BOARD COMMITTEE

The Board has delegated specific responsibilities to two (2) board committees which are Audit Committee (AC) & Nomination and Remuneration Committee (NRC). These Committees have clear defined term of reference in assisting and supporting the Board and they review specific issues delegated by the Board and to revert the Board with its recommendations. The ultimate responsibility for the final decision on all matters lies with the entire Board.

Audit Committee

The member of Audit Committee (AC) are as follow:

Dato' Mohd Shahar Bin Abdul Hamid (Chairman)
Abdul Kadir bin Md Kassim
Lim See Tow

The AC is scheduled to meet at least four (4) times in each financial year. At least two (2) members must be present and the majority of the members present must be Independent Directors. The Company Secretary shall be the Secretary of the AC.

During the financial year, the AC is scheduled to conduct three (3) meetings which will be attended by all members. The Company's external auditors and certain designated members of management will be attending some of the meetings at the invitation of the AC.

The AC is expected to discharge its duties as set out below:

Financial Results

Review and recommend to the Board for approval, the quarterly and statutory financial results of the Company and its subsidiaries, including related announcements to ensure adherence to listing requirements, the relevant laws, regulations and applicable accounting standards as well as highlight significant issues and any accounting judgements to the Board.

External Audit

Review the external auditors' report on the audit of the statutory financial statements and the unaudited quarterly financial statement of the Company. Review the independence, objectivity and effectiveness of the external auditors in meeting their responsibilities before recommending their reappointment and remuneration.

Related Parties Transactions

Review the proposed related party transactions prior to recommending to the Board for approval to ensure that the transactions on ordinary commercial terms based on the Company's practices and policies and that they are conducted at arm's length and not on terms which are more favourable to the related party than is generally available to the public and that the transactions are not detrimental to the minority shareholders.
Review procedures for securing the shareholders' mandate for Recurrent Related Party Transactions.

Internal Audit

Review and deliberate with the Board on the Company's requirement for a specific internal audit function by either setting it up in-house or outsourcing to a consultant.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (NRC) comprises of two (2) members, whom are Independent Non-Executive Directors of the Board. The NRC is responsible to:

Recommend on the appointment of Directors to the Board of the Company after taking into account the required mix of skills, expertise and experience;
Make annual assessment on the effectiveness of the Board as a whole and the contribution of each director to the effectiveness of the Board, the contribution of the Board's various committee and the performance of the Managing Director and other key Senior Management Officers;
Ensure all directors receive an appropriate continuous training programme in order to keep abreast with the latest developments in the industry;
Perform any other functions as authorised by the Board;
Recommend to the Board the remuneration of the executive directors in all its form, drawing from outside advice as necessary;
Recommend to the Board of Directors' fees, allowance and other remuneration; and perform any other function as authorised by the Board.

The member of Nomination and Remuneration Committee are as follow:

Dato' Mohd Shahar Bin Abdul Hamid
Abdul Kadir bin Md Kassim
Lim See Tow

The Board, through the Nomination and Remuneration Committee has reviewed its size and composition and is of the opinion that the current Board composition possesses the appropriate mix and competencies required to effectively lead the Company.

INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATION

Hua-An Group recognizes the need to keep communications lines clear and accessible to both investors and shareholders. Besides the mandatory reporting and the public announcements of the Company's financial results to Bursa Malaysia Securities Berhad, regulatory bodies and other relevant authorities, the Company keeps the members of the investing community and the shareholders abreast of its developments thorough press releases and active investor relations programmes.

During the financial year, the Directors and Senior Management held many meetings with financial analysts and fund managers of institutional investment funds, as well as participated in roadshows and investor conferences, domestically and internationally to discus issues and obtain feedback from the investing community.

The Annual General Meeting (AGM) is the principal forum for dialogue between the Company and its shareholders. Shareholders are given ample notice to prepare or present questions to the Board at the AGM. The AGM is also an excellent opportunity for shareholders to direct questions to the Board in relation to the Company's financial performance and the Company's activities.

The Company has also established a website, www.sinohuaan.com for shareholders and the public to gain access to corporate information and news or events related to the Company.

Investors and members of the public who wish to contact the Company on any matters relating to their shareholdings and investments can channel their enquiries through e-mail via the Company's website.