'NACRA 2004 Award Presentation Ceremony -
Speech by Mr Lam Kee Soon, Chairman, NACRA 2004 Adjudication Commitee'
Address by : Mr Lam Kee Soon
Date : 30 November 2004
Yang Berhormat Datuk Haji Mohd
Shafie bin Haji Apdal,
Menteri Perdagangan Dalam Negeri dan Hal Ehwal Pengguna
Yang Berusaha Encik Ken Pushpanathan,
Pengerusi Jawatankuasa Penganjur NACRA 2004
Yang Berusaha Encik Foo Sheh Loon
Ketua Eksekutif, MIM
Dif - Dif Kehormat
Wakil Media Massa
Tuan - Tuan dan Puan - Puan yang dihormati
sekalian
Ladies and Gentlemen
I bid you all a very good evening. Yet again,
we meet at the flagship event dedicated to promote excellence in corporate reporting. The
National Annual Corporate Report Awards (NACRA) with its theme - "Towards
Excellence", is not new to most of the Malaysian aspiring companies. Organised annually, the main objective of NACRA is
to promote the highest standards in the presentation and reporting of financial and other
information of corporate organisations. This
is to enhance the reporting regime towards greater transparency and ultimately achieving
international recognition of the high standards of financial reporting in Malaysia.
It is my great pleasure to announce to you,
in a short while, the winners of this prestigious award.
As the chairman of the adjudication
committee, I would like to mention the additions and changes that have been incorporated
into this year's awards. Before I do that, I would like to share with you the
adjudication process and some key observations of the Adjudication Panel.
A total
of 13 awards will be presented tonight, which are divided into 5 categories, namely:
O Overall Excellence Award
O Industry Excellence Awards
O Presentation Awards, comprising an Award each
for Best Annual Report in Bahasa Malaysia and Best Designed Annual Report
O Special Award for Non-Listed Organisations,
and
O Environmental Reporting Award.
We would also be presenting a Certificate of Merit to all finalists in
recognition of the high quality of their annual reports.
Ladies and Gentlemen
A special recognition goes to the panel of
adjudicators consisting of 74 members drawn from the securities industry, accountancy
profession, commerce and industry and academic institutions. I wish to express my heartfelt gratitude to all
the adjudicators for their hard work and tireless effort.
Without their valuable contribution, we will not be able to announce the
winners of NACRA tonight.
The NACRA adjudication process consists of
two levels of assessment, i.e. the preliminary
screening and the detailed adjudication. All annual reports are required to meet the
following criteria before they qualify for detailed adjudication:
O Promptness of publication
O Unmodified auditor's report i.e. a clean auditor's report
O Compliance with applicable approved
accounting standards
O Availability of at least 3 years'
financial highlights and historical summary
O Information on shareholders statistics
O Name of company secretary, registered address
and registrar's address
O Particulars of company's properties
O Report of Audit Committee
O Statement of Internal Control
O Statement of Corporate Governance
O Availability of annual report in Bahasa
Malaysia
O Annual report contains no addendum
O No public sanction by the Bursa Malaysia or
the Securities Commission on the company's affairs
O The companies are not under Section 176
scheme or Bursa Malaysia PN 4
All companies listed on Bursa Malaysia
automatically qualified for the NACRA competition and will undergo a preliminary screening
process before being qualified for detailed adjudication.
Non listed companies and other organisations will have to complete an entry
form, to be submitted with 30 copies of the published report to the NACRA Adjudication
Committee.
As of December 31, 2003, a total of 846
companies' were listed on the Bursa Malaysia and MESDAQ, of which 565 companies or
67% were listed on the Main Board, 249 companies or 29% on the Second Board and 32
companies or 4% listed on the MESDAQ.
Out of this, only 70 companies or 8.2% passed
the preliminary screening and qualified for detailed adjudication. These consisted of 68 companies or 12% of the
companies from the Main Board, 2 companies or 1% from the Second Board. None of MESDAQ listed companies qualified, thus no
winner for the newly introduced Industry Excellence Award for Companies Listed on
the MESDAQ market this year.
The detailed adjudication process was carried
out in two stages. At the first stage, the
annual reports were assessed within industry groups.
The annual report which achieves the highest level of overall excellence
within an industry group is adjudged the winner of the Industry Excellence Award. Those reports which were nominated by the industry
group adjudicators for the Overall Excellence Award and Presentation Awards were subject
to a second round of detailed adjudication. This
was carried out by an independent panel of adjudicators appointed by the Adjudication
Committee.
Ladies and Gentlemen
Over the years, I have observed the same
reasons as to why the rest of the companies failed in their bid for the award. Based on our overall findings, during the
adjudication process, it was noticed that most companies failed to qualify for detailed
adjudication due to the absence of a Bahasa Malaysia (BM) version of the annual reports. Thus, participating companies are encouraged and
strongly recommended to produce BM version of their annual reports. Having Bahasa Malaysia version is a pre-requisite
for participation in the NACRA competition.
Second, due to the companies' failure to
disclose their financial highlights and historical summary for the past 3 years. And, third, the companies fail to qualify because
of the incomplete disclosure of their Audit Committee information.
Another aspect that I wish to highlight
concerns the marking process. Previously, the emphasis has always been on the voluntary
disclosure / voluntary adoption of transitional standards.
By end of 2003, a total of 30 standards out of 32 issued by the Malaysian
Accounting Standard Board (MASB), have been effective.
Thus, for this year, the emphasis has shifted from voluntary disclosure to
mandatory compliance based on the code of governance and listing requirements of the MASB.
This year the Design Adjudicators saw a
better selection of annual reports competing for
the NACRA Best Designed Annual Report. As you
may verily agree, annual reports are getting thicker and technical to read as a result of
mandatory compliance. The challenge for
participants is to make those reports useful and reader-friendly to users. A number of corporations have trimmed the shape
of their annual reports so as not to look overwhelming and overbearing on the reader. Pos Malaysia employees I am sure, welcome the
lighter weight of these annual reports while environmentalists appreciate the corporate
social responsibility (CSR) on the part of these companies.
One company even decided to provide a Quick Sheet that offered the reader an
Executive Summary of the company's key performance results (KPRs). The judges commend this far sightedness in making
the annual report reader-friendly, is refreshing and able to mesmerise the attention of
their readers.
I must say that the standard and quality of
the annual reports of Malaysian companies have improved significantly over the years. The competition was very stiff and the panel of
adjudicators has had a very challenging task in selecting the Overall Excellence Award winner,
as the gap differentiating the winner from its nearest competitors was tight. I am pleased to mention that we can see lot of
thought and effort has been put into the production of the annual reports, both in terms
of content and design and not forgetting the financial costs involved. Highly reflective of qualities such as aesthetics,
accuracy and compliance to requirements, the adjudication process from the previous years
keeps getting more challenging.
But, what makes the winner stands out and
what is their recipe for excellent corporate reporting?
This year's winner gets strong points by revealing relevant financial
and corporate information which exceeds the mandatory requirements especially in
highlighting the performance of the company for the year.
They also managed to come up with a comprehensive report on its audit
committee and corporate governance. In fact,
it is this value-added attention to such finer details that helped tip this year's
winner to win the award.
An annual report is a vital tool of
communication and therefore, the standard of reporting should be absolute and not
compromised. It is hope that by sharing the
above, more companies will be able to qualify for the detailed adjudication process years
to come.
Although the majority of the NACRA
participants are public-listed companies, the Organising Committee has always encouraged
the participation of non-listed companies and other organisations. These include charitable bodies, non-profit
organisations and public sector business enterprises.
However, the number of participants in this category is still not
encouraging and I would like to take this opportunity to invite more non-listed companies
as well as public sector business enterprises to take part in future NACRA competitions.
Ladies and Gentlemen
We have now come to the highlight of the
event, that is the AWARD PRESENTATION. It is
my great pleasure to invite Yang Berhormat Datuk Shafie Apdal, Minister of Domestic Trade
and Consumer Affairs, accompanied by Mr Ken Pushpanathan, Chairman of the NACRA Organising
Committee, and Mr Foo Sheh Loon, Chief Executive Officer, MIM, to the stage, to present
the 2004 National Annual Corporate Report Awards.
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