HOME
INTRODUCTION
THE BOARD OF DIRECTORS (“THE BOARD”) OF KULIM (MALAYSIA) BERHAD IS PLEASED TO PRESENT THE CORPORATE GOVERNANCE OVERVIEW STATEMENT (“CG OVERVIEW”) WHICH PROVIDES SHAREHOLDER AND STAKEHOLDERS WITH AN OVERVIEW OF THE CORPORATE GOVERNANCE PRACTICES OF THE KULIM GROUP DURING THE FYE 2019 WITH REFERENCE TO THE KEY CORPORATE GOVERNANCE PRINCIPLES AND PRACTICES AS SET OUT IN THE MALAYSIAN CODE ON CORPORATE GOVERNANCE 2017 (“MCCG 2017”).


The Board acknowledges the importance of good corporate governance in protecting and enhancing the interest of shareholder. As such, the Board conscientiously strives to attain high business ethics and governance in conducting the day to day business affairs of the Group, in order to build a sustainable business and discharging its regulatory role.

The Board will continue its efforts in evaluating its governance practices in response to evolving best practices and the changing needs of Kulim Group. The Board shall remain committed to attaining the highest possible standards of corporate governance through the continuous adoption of the principles and best practices of the MCCG 2017 and all other applicable laws and regulations

PRINCIPLE A : BOARD LEADERSHIP AND EFFECTIVENESS
BOARD RESPONSIBILITES

The Board functions on the principle that all significant and material matters are addressed by the Board as it is accountable for the strategic management, performance monitoring and measurement, enterprise risk management, standard of conduct and critical business issues. The Board is responsible for determining the long-term direction and strategy of the Group, and creating value for shareholder. Established clear functions reserved for the Board and those delegated to Management.
The Board is responsible for the oversight and overall management of the Group by providing guidance and direction to the Management with regards to the sustainability, strategic planning, risk management, succession planning, financial and operations to meet the expectations and obligations to the shareholder.
The Board assumed the following principal responsibilities in discharging its functions:


  1. Reviewing and adopting a strategic plan for the Group and monitoring thereof, and addressing the sustainability of the Group’s business. The Board will review and approve the annual budget and strategic plan for the Group. It has in place an annual strategic planning process, whereby a comprehensive strategic plan will be tabled and debated at divisional level before the Management presents to the Board its recommended strategy and proposed business and regulatory plans. At this session, the Board reviews and deliberates upon both the Management’s and its own perspectives, as well as challenges the Management’s views and assumptions, to deliver the best outcomes.
    Additionally, on an on-going basis, the Board will assess whether the projects, purchases and sale of equity as well as other strategic consideration being proposed at Board meetings during the year are in line with the objectives and broad outline of the adopted strategic plans.
  2. Overseeing the conduct of the Group’sbusiness including the formulation of strategy and performance objectives, control and accountability systems, corporate governance framework, risk management practices and human capital management.
    At Board meetings, all operational matters will be discussed and expert advice will be sought if necessary.
    The Board oversees the performance of Management through quarterly results which is tabled during the Board meeting. The Board would then make the necessary business decisions to adapt to changing circumstances. The Management is tasked with the responsibility to keep the Board informed on all matters which may materially affect the Group and its business.
    The Management is also required to present and brief the Board on the quarterly report on the Group’s financial performance.
    The performances of the various companies and operating units within the Group represent the major element of Board’s agenda. Where and when available, data are compared against nationals trends and performance of similar companies.
  3. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures. The Group has set up a Risk Management and Compliance Committee (“RMCC”) in order to assist the Board in identifying, evaluating, reviewing and managing the principal risks and compliance management system.
    The RMCC is established primarily to assist and advise the Management Committee (“MCM”) and the Executive Director in fulfilling its corporate governance and responsibilities in relation to the Group’s management of risk, compliance with rules and regulations and its internal control structure.
    Details on the RMCC and the risk management framework are set out in the Statement of Risk Management and Internal Control of this Integrated Annual Report.
  4. Established and indentified succession plan for the Group that provide continuity in leadership within the Group The Board’s responsibility in this aspect is being closely supported by the Human Capital Management Department (“HCMD”). More importantly, after several years of continuous effort in emphasising and communicating the important of succession planning, the subject has now become an on-going agenda being reviewed at various high-level Management and operational meetings of the Group.
    Each year, HCMD was assessed the performance of the identified potential candidates undergoing the following leadership programmes:

    a. Johor Corporation Leadership Programme (“JLP”).

    The JLP is a structured leadership programme aiming to accelerate the career of high potential Senior Executives up to Senior Manager to be future leaders of Johor Corporation Group. Participants will be exposed to business challenges from different angles and will have the opportunity to share their leadership experiences. In year 2019, three (3) employees were selected for JLP Cohort IV 2019/2020 which the programme will be completed in December 2020.

    b. Advance Johor Leadership Programme (“AJLP”).

    The AJLP is one (1) year structured programmed which consists of intensive learning and development experience for high potential leaders across Johor Corporation Group. Three (3) employees of the first AJLP were completed their programme in April 2019. In 2019, the other three (3) employees were selected to undergoing AJLP II 2019/2020.
  5. Overseeing the development and implementation of a shareholder communications policy for the Group Various strategies and approaches are employed by the Group so as to ensure that shareholders are well-informed about the Group’s affairs and development.
  6. Reviewing the adequacy and integrity of the management information and internal control system of the Group The Board’s function in fulfilling the above responsibility is supported and reinforced through the various Committees established at both the Board and the Management’s level. Aided by an independent function of the Internal Audit Department, the active functioning of these Committees through their regular meetings and discussions would provide a strong check and balance and reasonable assurance on the adequacy of the Group’s internal controls. Details on the Internal Audit functions are further discussed in Audit Committee Report in this Integrated Annual Report.
BOARD COMMITTEES

The Board Committees are entrusted with specific responsibilities to oversee the Group’ s affair, with authority to act on behalf of the Board in accordance with their respective Terms of Reference. Though the duties have been delegated to respective Board Committees, the Committees have responsibilities to report and table the respective minutes to keep the Board abreast of the decisions and discussions made by each Board Committee. Currently, the Board has one (1) standing committee namely, Audit Committee. The principal function of Audit Committee is to review and report on the Group’s results, external audit procedures and internal audit function. There is a division of functions between the Board and Management. The Board is duly assisted by the key management team of the Group, comprising Executive Director, Head of Divisions and other key management of respective departments. The principal responsibilities of the Management team are as follow:

  • Developing, coordinating and implementing business and corporate strategies for the approval of the Board;
  • Assume day-to-day responsibility for the Company’s performance with relevant laws and regulations;
  • Achieve the performance targets set by the Board;
  • Communicating to the staff and implementing the strategic plan approved by the Board and any decision of the Board to ensure that the objectives of the Company that were approved by the Board are met;
  • Assisting the Board in the establishment of the Company or Group’s policies by developing such policies for the Board’s review and approval for the Company’s and Group’s adoption and implementation the approved policies; and
  • Developing effective Management information and internal control systems of the Group to ensure that the integrity and adequacy of the systems are intact.

Schedule of Matters/ Agenda Reserved for Collective Decision of the Board The authorities of the Board are specified below. The authorities may be varied from time to time as determined unanimously by the Board.

1. Conduct of Board

  • Appointment and resignation of Directors;
  • Appointment and resignation of Company Secretaries;
  • Appointment and resignation of Board Members in Board Committees;
  • Approval of terms of references of Board Committees and amendments to such items;
  • Appointment and resignation of Senior Management positions, including the Executive Directors, their duties and the continuation of their service; and
  • Disclosure of the corporate governance practices of the Company in the Integrated Annual Report.

2. Remuneration

  • Approval of the remuneration arrangements for Non-Executive Directors. The Non-Executive Directors whose remuneration is being deliberated by the Board should play no part in the deliberations;
  • Approval of the remuneration structure and policy for Executive Director and key executives; and
  • Approval of remuneration packages for Executive Director and Senior Management;

3. Operational

  • Approval of business strategy and Group’s operational plans and budgets;
  • On-going review of performance against business strategy and Group’s operational plans, including monitoring of marketing, key risks and risk management policies and actions;
  • Approval of capital expenditure;
  • Approval of asset write-off;
  • Approval of investment or divestment in a company/business/ property/ undertaking;
  • Approval of investment or divestment of a capital project which represents a significant diversification from existing business activities;
  • Approval of changes in the major activities of the Company; and
  • Approval of treasury policies and Bank mandate.

4. Financial

  • Approval of quarterly and annual financial statements based on recommendations of the Audit Committee;
  • Approval of the Integrated Annual Report and Statutory Financial Statements;
  • Approval of interim dividends, the recommendation of final dividends and the making of any other distribution;
  • Adoption of accounting policies;
  • Approval of corporate policies and procedures, including the Group’s system of internal control;
  • Review of the effectiveness of the Group’s system of internal control; and
  • Disclosure of the state of internal controls of the Group to be included in the Integrated Annual Report.

5. Other matters to be considered including:

  • The granting of powers of attorney by the Company;
  • The entering into any indemnities or guarantees;
  • Recommendations for the alteration of the Constitution of the Company;
  • Alteration of the accounting reference date, registered office and name of the Company;
  • Purchase of own shares by the Company;
  • Issuance of any debt instruments;
  • Political or charitable contributions;
  • Scheme of reconstruction or restructuring; and
  • Any other significant business decision.

Segregation of Role and Responsibilities of Chairman and Executive Director The Board is led by the Chairman, Datuk Anuar Ahmad who is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role and setting its agenda.
The Chairman is also responsible for creating an environment for open, robust and effective debate. This include ensuring, via Company Secretary, that the Directors receive accurate, timely and clear information.


The role and responsibilities of our Board Chairman and Executive Director are separate and distinct, to ensure that there is a balance of power and authority, such that no one individual has unfettered powers of decision making.


Zulkifly Zakariah is an Executive Director of the Company and leads the day-to-day management of the Group. He, together with the support of the Management team, formulate business strategies and plans so as to achieve the Group’s vision and missions, targeted growth, turnover and profitability to meet the stakeholders’ expectation. He is responsible for implementing the policies and decisions of the Board and coordinating the implementation of business and corporate strategies.


Qualified and Competent Company Secretary The Company Secretary of the Company has professional credential and is qualified to act as a Company Secretary is under Section 235(2) of the Companies Act, 2016.


The Company Secretary is an Associate member of the Malaysian Institute of Chartered Secretaries and Administrators (“MAICSA”).
The Secretary whose appointment and removal is subject to the Board’s approval, attend all Board and Board Committees’ meetings.


The Company Secretary play an advisory role to the Board and support the Board in ensuring the governance matters and Board procedures are followed and that applicable laws and regulations are complied with. The Company Secretary also facilitate the communication of key decisions and policies between the Board and Senior Management.

Access to information

The Board has direct access to the advice and services of the Secretary who is responsible to the Board for ensuring that all governance matters and Board procedures are followed and that all applicable laws and regulations are complied with.


The Chairman, assisted by the Company Secretary takes responsibility in ensuring that the Directors receive all notices, agendas and minutes of the previous meetings and supplied with pertinent information well in advance of each meeting. The agenda for each meeting shall be circulated at least seven (7) working days before each meeting to the Board Members and all those who are required to attend the meeting. Written materials including information requested by the Board from the Management and/ or external consultants shall be received together with the agenda for the meetings. The Executive Director in consultation with the Chairman would decide on the agenda and accordingly structure and prioritise the respective matters based on their relevance and importance so as to enable quality and in-depth discussion of the matters. All decisions and conclusions of the Board meetings are to be duly recorded and minutes are kept by the Company Secretary.


The Board recognises the importance of providing timely, relevant and up-to-date information in ensuring an effective decision making process by the Board. In this regard, the Board is provided with not just quantitative information but also those of qualitative nature that is pertinent and of a quality necessary to allow the Board to effectively deal with matters that are tabled in the meeting.


The duties and responsibilities of the Board of Directors are clearly defined in the Board Charter which regulates how business is to be conducted by the Board in accordance with the principles of good Corporate Governance.

Board Charter

The Board Charter addresses, which include amongst others, the Board responsibilities, Directors Code of Ethics, composition of Board, responsibilities of Chairman and Executive Director, the establishment of Board Committees, meetings, remuneration, accountability and audit, Company Secretary, conflict of interests and access to independent professional advice.
The Board Charter was last reviewed on 24 June 2014. The Board Charter will adopt any changes to the MCCG 2017, the Companies Act 2016 or any other relevant rules and regulations from time to time for best practices.


ACCESS TO INDEPENDENT PROFESSIONAL ADVICE

In discharging Directors’ duties, each member of the Board is entitled to obtain independent professional advice at the cost of the Company.


If a member considers such advice is necessary, the member shall first discuss it with the Chairman and having done so, the member shall bring this matter up to the Board. The reason(s) for seeking independent professional advice and the proposed cost involved should be presented to the Board for approval. Once Board approval is obtained, the member is free to proceed.


The member should provide proper notice to the Company Secretary of the intention to seek independent advice and shall provide the names(s) of the professional advisors that he/ she intends to contact, together with a brief summary of the subject matter for which professional advice is sought. The Company Secretary shall provide written acknowledgement of acceptance of notification. In the event that one (1) or more Directors seek to appoint one (1) or more advisors, the Chairman should take steps to facilitate discussions to arrive at a consensus. Fees for the independent professional advice will be payable by the Company but approval of the Board will be required. The above restriction shall not apply to Executive Director acting in the furtherance of their executive responsibilities and within their delegated powers.


For the purposes of this section, independent professional advice shall include legal, accounting or other professional financial advice. Independent professional advice shall exclude any advice concerning the personal interests of the Directors (such as with respect to their contracts or disputes with the Company), unless these are matters affecting the Board as a whole and have the unanimous agreement of the Board.


ACCESS TO THE MANAGEMENT

Board members must have complete unimpeded access to the Company’s Management. Board members must have unrestricted access to information pertaining to the Company including the Company’s auditors and consultants.


In accessing its rights to information and the Management, Board members must use judgement to ensure that such access is not distracting the operations of the Company and that such contact, be copied to the Executive Director and Chairman.
Furthermore, during deliberations, the Board should encourage the Management when necessary, to bring managers into Board meetings who:

  • Can provide additional insight into the items being discussed because of personal involvement in these areas; and/ or
  • Have potential for future senior managerial positions that Senior Management believes would be enhanced by exposure to the Board.

BOARD COMPOSITION

The composition of the Board will reflect the duties and responsibilities to discharge and perform as representative of the interests of the shareholders. The composition of the Board shall reflect as much as possible or practicable, proportional representation of investments in the Group. Directors are not required to hold any qualification share.


A formal invitation to join the Group as a Board member would be extended by the Chairman after approval from the Board. The Chairman should ensure that all Board members, when taking up office, are fully briefed on the terms of their appointment, duties and responsibilities. New members will also be briefed on the operations of the Group to increase their understanding of the business, environment and markets in which the Group operates. The new members will be given a copy of the Board Policy Manual, which consists of the following information:

  • Group Organisation;
  • Board Organisation;
  • Board Responsibilities;
  • Board Procedures;
  • Board’s and Director’s Evaluation; and
  • Additional information including the latest business plan and budget, the latest Integrated Annual Reports and accounts, and minutes of past three (3) Board of Directors’ meetings and applicable Committee Meetings.

The new members will be required to meet key members of the Management. Members are expected to keep themselves abreast of changes and trends in the business and with the Group’s business environment and markets and changes and trends in the economic, political, social, legal and regulatory climate that could affect the business of the Group.


In addition, the Constitution provide that the office of any Director shall become vacant if such Director:

  • Becomes bankrupt;
  • Be found to be lunatic or become of unsound mind;
  • Ceases to be a Director under the provisions of the Companies Act, 2016;
  • Be convicted of any sizeable offences; and
  • By notice in writing given to the Company, resigns from his office;
    • is removed by ordinary resolution of the Company subject to the provisions of Article 104; and
    • is absent for more than 50% of the total Board of Directors’ meeting held during a financial year.

The Board, as at the date of this Statement, consists of:

Executive Director

  • Zulkifly Zakariah

Non-Independent Executive Director

  • Idham Jihadi Abu Bakar

Independent Non-Executive Directors

  • Datuk Anuar Ahmad (Chairman)
  • Dr. Radzuan A. Rahman
  • Dato’ Sr. Hisham Jafrey
  • Kandasamy A/L Kanny

Non-Independent Non-Executive Director

  • Wan Su Ali

There were several changes to the Board composition, Dato’ Kamaruzzaman Abu Kassim had resigned from Board as Chairman/ Non-Independent Non-Executive Director (“NINED”) on 31 December 2019. Datuk Anuar Ahmad, Dato’ Sr. Hisham Jafrey and Kandasamy A/L Kanny were appointed to the Board as Independent Non-Executive Directors (“INED”) on 1 March 2020. On the same date, the Board accepted the resignation of Ahamad Mohamad, Zulkifli Ibrahim, Mohamad Salleh Mohamad Yusof and Mohd Sahir Rahmat as NINED. Meanwhile, Idham Jihadi Abu Bakar was appointed to the Board as Non-Independent Executive Director on 1 March 2020.



INDEPENDENT NON-EXECUTIVE DIRECTOR

The presence of INED provides a pivotal role in corporate accountability. The role of the INED is particularly important as they provide independent and objective view, advice and judgement, and ensures strategies proposed by the Management are thoroughly discussed and evaluated, and that the long-term interests of stakeholders are considered. The INED do not participate in operation of the Group in order to uphold their objectivity and fulfill their responsibility to provide check and balance to the Board. Currently, we have four (4) INED in the Board which are in line with Practice 4.1, that recommend the Board to have at least half of the Board is independant. The Board is presently of the view that there is no necessity to fix a maximum tenure limit for INED as there are significant advantages to be gained from the long-serving Director who possess tremendous insight and knowledge of the Company’s businesses and affairs.



BOARD DIVERSITY

The size and composition of the Board provides for a diversity of views, the desired level of objectivity and independence in Board deliberations and decision making. The Directors of the Group are persons of high integrity and caliber who come from diverse backgrounds with expertise and skills accounting, plantations, economics, taxation and legal.
The appointment of Senior Management are based on objective criteria, merit and with due regard for diversity in skills, experience, length of service and knowledge of the Group and cultural background.


FOSTER COMMITMENT OF THE DIRECTOR

The Director dedicated sufficient time to carry out their responsibilities in Board representations. The dates of the meetings of the Board for each financial year were fixed in advance for the whole year to ensure all Director’s members dates are booked and also to facilitate Management’s planning for the whole financial year. During the FYE 2019, four (4) Board Meetings have been held.


The Board is satisfied with the level of time commitment given by the Directors in the discharge of their roles and responsibilities as the Directors of the Company as evidenced by their attendance at the respective meetings office during the FYE 2019 are set out below:

295th BOD 28/02/2019 296th BOD 26/05/2019 297th BOD 08/09/2019 298th BOD 24/11/2019 Total
Dato’ Kamaruzzaman Abu Kassim P P P P 4/4
Zulkifly Zakariah P P P P 4/4
Ahamad Mohamad P P P P 4/4
Zulkifli Ibrahim P P P P 4/4
Mohd Sahir Rahmat P P P P 4/4
Dr. Radzuan A. Rahman P P P P 4/4
Mohamad Salleh Mohamad Yusof P P P P 4/4
Wan Su Ali P O P P 3/4

DIRECTORS' TRAINING

The Board is provided with opportunities to update and refresh their knowledge throughout the year, ensuring that they are able to fulfill their role as members of the Board and Committees effectively. In financial year 2019, the Directors attended various training programmes on issues relevant to the Group.


Training programmes, seminars and briefings attended by the Directors during the year were, among others:

  • Adequate Measures and Anti-Bribery Management System ISO 37001:2016
  • Johor Corporation’s Directors Conference 2019 - Corporate Governance : A Marathon Not A Sprint
  • Transfer Pricing Seminar 2019 - Inland Revenue Board
  • Managing Large Taxpayer issues - A Practitioner’s Update
  • National Tax Conference 2019 - Inland Revenue Board and Chartered Tax Institute of Malaysia
  • National Tax Seminar 2019

REMUNERATION

The Board believes that the levels of remuneration offered by the Group are sufficient to attract Directors and Senior Management, with sufficient experience and talents to contribute to the performance of the Group. Comparison with similar position within the industry is made in order to arrive at a fair rate of remuneration. The Board will determine the level of remuneration paid to members.


The details of the remuneration of each Director paid by the Company during the FYE 2019 are as follows:

Salary Allowances/ Others Emolument Bonuses Benefit In-kind Total
Executive Director RM'000
Zulkifly Zakariah 397 401 149 34 981
Non-Independent Non-Executive Directors
Dato' Kamaruzzaman Abu Kassim 37 37
Ahamad Mohamad 600 200 115 12 927
Zulkifli Ibrahim
Mohd Sahir Rahmat
Mohamad Salleh Mohamad Yusof
Wan Su Ali
Independent Non-Executive Director
Dr. Radzuan A. Rahman 16 16
Grand Total 997 617 264 83 1961

CODE OF ETHICS

The Code of Ethics sets forth the standard of conduct and culture required for all employees of the Group. It is sets out the ethical standards of conduct that all employees are expected to comply with in their dealings with colleagues, customers, shareholders, suppliers, competitors, the wider community and the environment. Among others, it also requires the employees to ensure the following:

  • Maintaining full and accurate company’s records;
  • All assets and properties of the company will be used only for the benefit of the company;
  • Always dealing with customers and suppliers based on merit and fairness;
  • Engage competitors in a fair manner and not to engage in any unfair or illegal practice in order to gain an unfair advantage;
  • Always act to ensure a workplace environment that is free from harassment and discrimination;
  • Deal with all team members with respect, courtesy and fairness;
  • Engage competitors in a fair manner and not to engage in any unfair or illegal practice in order to gain an unfair advantage; and
  • Adhere to the Group’s Code of Ethics and to submit the Ethics Declaration Form annually.

The Board has set up guidelines which are designed to legalise acceptable behaviours for the committee members to increase confidence in the Group by showing that the Board members are committed in following basic ethical guidelines in the course of discharging its duties that cover:

  • Corporate Governance;
  • Relationships: Shareholders, Employees, Creditors, Customers; and
  • Social Responsibilities and Environment.

The Directors adhere to the Code of Ethics which is contained in the Board Policy Manual comprising the important aspects of which are as follows:

  • Members must represent non-conflicted loyalty in the interests of the Group;
  • Members must avoid conflict of interest with respect to their fiduciary responsibility;
  • Members may not attempt to exercise individual authority over the Group except as explicitly set forth in the Board Policy; and
  • Members will respect the confidentiality appropriate to issues of a sensitive nature.

WHISTLE-BLOWING POLICY

The Group’s Whistle-blowing Policy covers any information or complaints received related to an “improper conduct”, committed or about to be committed. The Whistleblower Protection Act 2010 provide a safe avenue for them to make disclosure of such alleged improper conduct whistle-blowing to the relevant authorities in good faith, by protecting their identities, providing them immunity from civil and criminal proceedings and protecting them from detrimental action. The objectives of Whistle-blowing Policy are as follows:

  • Provide a channel for secure reporting against improper conducts;
  • Provide assurance to the whistle-blowing that he/ she will be protected from retaliation or reprisal; and
  • Ensure that any complaints received will be processed, proper action to be taken and ends with a systematic and effective action.

A Whistle-blowing Policy is published on the Group’s website.

ISO 37001 : 2016 ANTI BRIBERY MANAGEMENT SYSTEM

On 4 May 2018 the Parliament had passed and gazetted the new Section 17A of the Malaysian Anti-Corruption Commission (Amendment) Act 2018 on corporate liability offence for corruption and this new Section 17A will be in force in June 2020.
At the reporting date, Kulim is in the progress for certification to ISO 37001:2016 Anti Bribery Management System (“ABMS”), as one of the tools for fighting corruption and as a defence in meeting the requirement of “adequate procedures”. The process for certification commenced in November 2019 and is expected to be certified in December 2020.
The reviewing and developing of the policies related to ABMS is progressing well. These policies will set out the Group’s position on corruption in all its forms and provide guidance o how to act when subjected to potential acts of corruption that might confront the Group in its day to day operations.


A Bribery Risk Assessment was conducted to identify and evaluate the bribery exposures within the Group and mitigation plans have subsequently been developed and will be implemented in the year 2020.


Kulim has set up an Integrity Unit in November 2019 as one of its initiatives to instill the culture of integrity. The establishment of the Integrity Units is in accordance with the Prime Minister’s Directive No. 1/2018 (October 2018) on establishment of Integrity and Governance Unit in Government-Linked Companies (GLCs), companies owned by the ministry and Government Agencies including the State Government. The Integrity Unit is responsible for promoting including the state government. The Integrity Unit is responsible for promoting good governance, strengthening integrity, monitoring compliance and dealing with improper conducts.


PRINCIPLE B : EFFECTIVE AUDIT AND RISK MANAGEMENT

AUDIT COMMITTEE

The Audit Committee (“AC”) facilitates the Board of Directors to fulfill its corporate governance and overseeing responsibilities in relation to the Group’s financial reporting, internal control system, risk management and internal an d external audit functions. The AC of the Group comprises three (3) members. The AC is chaired by an Independent Non-Executive Director, Dr. Radzuan A. Rahman.


The Board has full access to both Internal and External Auditors and receive reports on all audits performed by them via the reports made by AC in Board meetings.
The Audit Committee Report for the FYE 2019 which sets out the composition, a summary of activities of the Audit Committee and internal audit function.

RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

The Board recognised that it is obliged to systematically manage and regular review its risk profile at a strategic, financial and operational level. The Board has done this by developing and adopting risk management framework that determines the process and identifies tools for releasing its objectives. Not only does it maximise its opportunities. It enhances the Company’s capability to respond timely to the changing environment and its ability to make better decision. The Statement on Risk Management and Internal Control is set out on pages 178 to 187 of this Integrated Annual Report to provide an overview of the risk management framework and state of internal control within the Group.

PRINCIPLE C : INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

Our Board is committed to adequate and timely disclosure of information, whether financial, organisational, governance or transactions related, to enable our stakeholders to assess our Group’s performance.

COMMUNICATION WITH STAKEHOLDER

The Group has been using the following formal channels to communicate with shareholders and stakeholders:

a) Integrated Annual Report

The Integrated Annual Report remains a major channel of communications disclosing information not only on the Group’s business, financials and additional information such as the Group’s mission and vision, operations performance, outlooks and Senior Management team. The Board places great importance on the contents of the Integrated Annual Report to ensure the accuracy of the information as the Integrated Annual Report is a vital source of information. Integrated Annual Reports of the Company are available at the Company’s website.

b) Audited Financial Statements

The Board is fully accountable for ensuring the Audited Financial Statements are prepared in accordance with Companies Act 2016 and Malaysian Financial Reporting Standards (“MFRS”) so as to present a true and fair view of the Group and Company’s state of affairs, results and cash flows as at the end of the accounting period. In preparing the Audited Financial Statements, the Directors are satisfied that the applicable MFRS and provisions of the Companies Act 2016 have been complied with and reasonable and prudent judgements and estimates have been made.

c) Sustainability

The Board recognises that the Company’s stakeholders are increasingly interested in understanding its approach and performance in embedding sustainability in the organisation. The Group has published a Sustainability Report which disclosed Group’s efforts and initiatives in managing its material economic, environmental and social risks and opportunities. The reporting is guided by the Global Reporting Initiative (“GRI”) standard.

RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Group were made in the ordinary course of business and on the same terms as those prevailing at the time for comparable transactions with other persons or charged on the basis of equitable rates agreed between the parties.