Corporate Governance

CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (“Board”) of Iqzan Holding Berhad (“Iqzan” or “the Company”) is committed in cultivating a responsible organisation by instilling corporate conscience through excellence in corporate governance (“CG”) standards at all times, including accountability and transparency being observed throughout the Group as a fundamental part of building a sustainable business and discharging its responsibilities to protect and enhance shareholder value and financial performance of the Group.

This Statement provides an overview on the application of principles as set out in the Malaysian Code on Corporate Governance 2017 (“MCCG” or “Code”) and the extent to which the Company has complied with the three (3) key principles and practices of the MCCG, Companies Act, 2016 (“Act”) as well as the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) during the financial year under review.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

Board Responsibilities

The Board is responsible for formulating and reviewing the strategic plans and key policies of the Company and charting the course of the Group’s business operations whilst providing effective oversight of Management’s performance, risk assessment and controls over business operations, which in compliance with Practice 1.1 of the Code. The Board is also responsible for ensuring that the Group’s internal controls, risk management processes and reporting procedures are in place as well as maintaining effective shareholders’ communication.

The Board delegates and confers some of its authorities and discretion on the Chairman, Executive Directors, and Management as well as on properly constituted Board Committees, comprising exclusively Non-Executive Directors.

Board Committees have been established to assist the Board in its oversight function with reference to specific responsibility areas. It should however be noted that at all times, the Board retains collective oversight over the Board Committees. The Board Committees consist of Audit and Risk Management Committee (“ARMC”) as well as Nomination and Remuneration Committee (“NRC”). These Committees have been constituted with clear terms of reference and they are actively engaged to ensure that the Group is in adherence with good corporate governance. At each Board meeting, the Chairmen of the respective Board Committees report to the Board on key issues deliberated at the respective Board Committees’ meetings and make recommendation to the Board for decision, where necessary. The Board Charter and terms of reference of the Board Committees are published on the Company’s website.

The Board implements a strategy planning process to oversee the matters delegated to Management and ensures the goals and targets are in line with the Company’s strategic plan and long-term objectives.

The key responsibilities of the Board include reviewing and adopting the strategic plan, overseeing the conduct of business, risk management, succession planning, overseeing the development and implementation of a shareholders’ communication policy and reviewing the internal control systems to ensure its effectiveness to mitigate the business risks. The Board is constantly mindful of the need to safeguard the interests of the Group’s stakeholders.

Overall, it is the governance responsibilities of the Board to lead and control the Group. The Board plans the strategic direction, development and control of the Group and has embraced the responsibilities listed in the MCCG to discharge its stewardship and fiduciary responsibilities. The Executive Directors are responsible for making and implementing operational and corporate decisions while the Non-Executive Directors balance the board accountability by providing their independent views, advice and judgment in safeguarding the interests of the shareholders.

During the financial year review, the Board, in addition to the above matters, has engaged an outsourced professional firm, Messrs. TRS Forensics Sdn. Bhd. as the Internal Auditors of the Company, to assist on the review of the internal control systems of the Group and aims to achieve the internal control objective of prevention and detection of any deficiency in the risk assessment and internal control procedures of the Group, as well as to review the adequacy and integrity of the internal control system of the Company, including the implantation of the code of conduct and

whistle-blowing process as well as Business Continuity Plan (“BCP”).

The Chairman of the Company leads the Board with a keen focus on governance and compliance and acts as a facilitator at Board meetings to ensure that contributions by Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. Together with the other Independent Non-Executive Directors, Yang Mulia Raja Hizad bin Raja Kamarulzaman, as the Chairman, leads the discussion on the strategies and policies recommended by Management. He chairs the meetings of the Board and the shareholders, and thus ensuring effective communication with the shareholders as well as the relevant stakeholders, which comply with Practice 1.2 of the Code.

The Company has complied with the Practice 1.3 of the Code, whereby the Chairman of the Company is Yang Mulia Raja Hizad Bin Raja Kamarulzaman, an Executive Director, while the daily operation of the Company is oversee by another Executive Director of the Company, Encik Norman Bin Zainuddin, who has the overall responsibilities over the Group’s operating units, organisational effectiveness and implementation of the Board policies and decisions.

The Chairman is primarily responsible for matters pertaining to the Board and the overall conduct of the Group and is committed to good CG practices and has been leading the Board towards high performing culture while the other Executive Director is responsible for the implementation of board policies and decisions approved by the Board and he is obliged to report to the Board at Board Meetings all material matters currently or potentially affecting the Group and its performance, including all strategic projects and regulatory development which might have an impact on the daily operation.

All decisions of the Board are made unanimously or be consensus. To ensure balance of power and authority on the Board, majority of the Board members are Non-Executive Directors. The Board is satisfied and assured that no individual or group of Directors has unfettered powers of decision that could create a potential

conflict of interest. To enhance accountability, the Board has established clear functions reserved for the Board and those delegate to the Management team. There are matters reserved to the Board for its deliberation and decision to ensure the direction and control of the Company are in its hands. The role of the Management is to support the Executive Directors and implement the running of the general operations and business of the Company, in accordance with the delegated authority of the Board.

The Board of Directors, in performing their duties, have access to the advice and services of suitably qualified Company Secretaries. The Company Secretaries act as the CG counsel and ensure good information flow within Board, Board Committees and Management. The Company Secretary attends all meetings of the Board and Board Committees whenever necessary and guides the Directors on the requirements encapsulated in the Company’s Constitution and legislative promulgations such as the Companies Act 2016, MMLR, the MCCG, etc which comply with Practice 1.4 of the Code.

All Directors have access to the advice and services of the Company Secretaries as well as to all information within the Group in ensuring the effective functioning of the Board. In addition, the Board may seek independent professional advice on specific issues at the Company’s expenses to enable it to discharge its duties in relation to the matters being deliberated, where necessary. The Group has engaged such services since May 2019 upon establishment on the new Board then.

The Directors may seek advice from Management on issues under their respective purview and interact directly with Management or request further explanation, information or updates on any aspect of the Company’s operations or business concern from them.

Schedule of Board and Committee meetings are determined in advance at the beginning of every year. This enables Management to plan ahead the yearly business and corporate affairs and ensure timely preparation of information for dissemination to the Board. The Board has a defined schedule of matters reserved for Board’s decision and that the Board papers for meetings will be circulated to the Board at least seven (7) days prior to the meeting. This is to ensure all Directors have sufficient time to obtain further explanation, where necessary, in order to be fully informed of the matters to be discussed during the meeting. The Company Secretary is entrusted to record the Board’s deliberations, in terms of issues discussed, ensures that the deliberations at Board and Board Committee meetings are well documented, and subsequently communicated to Management for appropriate actions. The minutes of the previous Board and Board Committee meetings are distributed to the Directors/ Committee prior to the meeting for their perusal before confirmation of the minutes at the commencement of the following Board meeting. The Directors may comment or request clarification before the minutes are tabled for confirmation as a correct record of the proceedings of the meeting. Management provides Directors with complete and timely information prior to meetings and on-going basis to enable them to make informed decisions, which comply with Practice 1.5 of the Code.

Demarcation of Responsibilities

The Board Charter is reviewed regularly to ensure that it complies with the best practices and regulations and thus, the last review of the Board Charter was conducted on 23 March 2018.

In discharging its duties, the Board is constantly mindful of the need to safeguard the interests of the Group’s stakeholders, which comply with Practice 2.1 of the Code. In order to facilitate the effective discharge of its duties, the Board is guided by the Board Charter, which is available on the Company’s website. The Board Charter serves to ensure that all Board members acting on behalf of the Group are aware of their expanding roles and responsibilities. It sets out the strategic intents and specific responsibilities to be discharged by the Board members collectively and individually. It also regulates on how the Board conducts business in accordance with CG principles.

On 28 April 2021, the Securities Commission Malaysia has issued an update of the MCCG, which sees the introduction of new best practices and further guidance to strengthen the corporate governance culture of listed companies, and the first batch of companies to begin reporting on their adoption of these practices will be those with financial years ending 31 December 2021 onwards. As such, the Company plans to review its current Board Charter and revise the Board Charter to be aligned with the MCCG 2021 by the end of year 2021. Further, the Board Charter would be periodically reviewed and updated in accordance with the needs of the Company and any new regulations that may have impact on the discharge of the Board’s responsibilities.

Promoting Good Business Conduct and Healthy Corporate Culture

In compliance with Practice 3.1 of the Code, the Board is committed in maintaining a corporate culture which engenders ethical conduct. The ethical standards are formalised through the Code of Ethics and Conduct which requires all Directors and Employees to observe high ethical business standards, honesty and integrity and to apply these values to all aspects of the Group’s business and professional practice and act in good faith in the best interests of the Group and its shareholders.

The Company had complied with Practice 3.2 of the Code whereby the Board has adopted a whistleblowing policy for the Group as a measure to promote the highest standard of CG. The whistleblowing policy outlines the avenues for all employees, suppliers, agents, contractors and customers of the Group to raise concerns or disclose in good faith any improper conduct within the Group and to enable prompt corrective actions and measures to resolve them effectively.

An early warning system such as a whistleblowing policy and procedure can help the Company to detect wrongdoings and alert the Company to take corrective actions before the issue turns into crisis. The Board also has established a simple procedure for whistleblowing by providing a dedicated email address (whistleblower@iqzan.com) which is accessible only by the Chairman of the Board and Chairman of the ARMC

Board Composition

The Board of the Company is currently consists of five (5) members, which made up of 2 Independent Non- Executive Directors, 1 Non-Independent Non-Executive Director and 2 Executive Directors. The Directors’ profiles are disclosed in the Annual Report 2021.

The composition of the Board fulfils the Paragraph 15.02 of the MMLR of having at least two (2) or one-third (1/3) of the Board comprising independent directors. However, the independent directors represented 40% of the Board member and this departure with Practice 4.1 of the Code. Nevertheless, the Board is helmed by an experienced Board comprising members of high calibre and integrity, and provide a wealth of knowledge, experience and skills in the key areas of accountancy, business operations and development, corporate legal, finance and risk management, amongst others. The Board is satisfied that, through the annual performance appraisal of the Board, the Board Committees and individual directors, the current board composition represents a mix of knowledge, skills and experience required to discharge the Board’s duties and responsibilities effectively.

Independence is important for ensuring objectivity and fairness in the decision making. The independence of Directors is measured based on the criteria prescribed under the MMLR of Bursa Securities, of which a Director should be independent and free from any business or other relationship that could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. In addition, to be in compliance with the criteria set out under the MMLR of Bursa Securities, the Independent Non-Executive Directors (“INEDs”) are required to declare that they will continue to bring independent and objective judgement to the Board during the review of Directors’ independence as part of the annual assessment carried out by the NRC.

The INEDs do not participate in the day-to-day management of the Company and do not involve themselves in business transactions or relationships with the Company, to ensure their objectivity would not be compromised. In staying clear of any potential conflict of interest, the INED would remain at the position of providing check and balance to the Board when discharging their duties and fulfilling their responsibilities. The Board had established separate NRC to assist the Board in ensuring its members remain relevant to the Company and the remuneration policy remains competitive to attract new talents and retain suitably qualified directors.

Currently, none of the independent directors exceed the cumulative term limit of nine (9) years. According to the Board Charter, the Board has also adopted the recommendation of the MCCG that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve the Board subject to the Director’s re-designation as a Non-Independent Non- Executive Director. Otherwise, the Board must justify and seek shareholders’ approval in the event that a Director, who has served in that capacity for more than nine (9) years, retains as an Independent Director. If the Board continues to retain the Independent Director after twelve (12) years, the Board would seek shareholders’ approval through a two-tier voting process. The Company has adopted the recommendation as per Practice 4.2 and 4.3 of the Code.

The Board acknowledges the importance of diverse Board and Senior Management. The Group strictly adhered to the practice of non-discrimination of any form, whether based on race, age, religion and gender throughout the organisation, which including the selection of Board members and its senior management.

The Board encourages a dynamic and diverse composition by nurturing suitable and potential candidates equipped with competency, skills, experience, character, time commitment, integrity and other qualities in meeting the future needs of the Company, which comply with Practice 4.4 of the Code. The Board acknowledges the importance of boardroom diversity and takes cognisance of the recommendation of the MCCG to have at least 30% of female directors as per recommendation by the Practice 4.5 of the Code. During the financial year under review, the Company has appointed Ms Kunamony A/P S.Kandiah as an Independent Non-Executive Director of the Company replacing the late Mr Ivan Radzi Bin Abdullah, the former Director. The said appointment has enhanced the gender diversity of the Board composition.

In the event of a vacancy in the Board and/or Senior Management arise, the Board, through the NRC, will still consider the female representation when suitable candidates are identified. However, the appointment of a new Board member and/or Senior Management will not be guided solely by gender but will also take into account the skills-set, experience and knowledge of the candidate. The Company’s prime responsibility in new appointments is always to select the best candidates available. Hence, the normal selection criteria based on an effective blend of competencies, skills, extensive experience and knowledge to strengthen the Board remains a priority.

In identifying candidates for appointment as Directors, the Board does not solely rely on recommendations from the existing Board members, management or major shareholders. The Board may also utilise independent sources to identify suitable qualified candidates, which complies with Practice 4.6 of the Code.

In compliance with Practice 4.7 of the Code, the NRC is chaired by Ms Kunamony A/P S.Kandiah, an Independent Non-Executive Director. The NRC comprises exclusively of Non-Executive Directors, as follows: –

• Ms Kunamony A/P S.Kandiah (Independent Non-Executive Director) – Chairman

• Mr Chua Yeong Lin (Independent Non-Executive Director) – Member

• Dato’ Ong Chek Chai (Non-Independent Non-Executive Director) – Member

Generally, the NRC would be responsible for identifying and recommending suitable candidates for Board membership and assessing the performance of each Director on an on-going basis. The Board would have the ultimate responsibility and final decision on the appointment. The assessment process shall ensure the skills matrix needed for membership of the Board reflects accurately with the long-term strategic direction and needs of the Company.

The NRC evaluates and matches the criteria of the candidate by taking into considerations the diversity, including gender, where appropriate, and recommends to the Board for appointment. In its effort to promote boardroom diversity, the NC has taken various steps to ensure women candidates are sought from various sources as part of the recruitment exercise.

The NRC would contact those candidates identified to determine interest in serving the Company. This communication would ensure the prospective Board members to have clarity on the nominating process as well as the Board/ Directors’ profiles, roles and responsibilities, expectations of time commitments and other information as required.

For any requisition of nomination by the shareholders, the NRC would also perform the same review process. However, if the requisition is by way of Sections 311 to 313 of the Companies Act 2016, the NRC would still carry out its duties if permitted by the requisitionist.

Any Director appointed during the year, either to fill a casual vacancy or as an additional Director, shall hold office only until the next AGM and shall then be eligible for re-election in accordance with the Company’s Constitution.

The Constitution states that one-third (1/3) of the Directors for the time being, or, if their number is not three (3) or a multiple of three (3), then the number nearest to one-third shall retire from office and be eligible for re-election provided always that Directors shall retire from office once at least in each three (3) years but shall eligible for reelection. A retiring Director shall retain office until the close of the meeting at which he retires. A summary of key activities undertaken by the NRC in discharging its duties during the financial year under review is set out below: –

  • Reviewed the nomination and recommendation for the appointment of Ms Kunamony A/P S.Kandiah as an Independent Non-Executive Director of the Company;
  • Reviewed and assessed the independence of Independent Directors;
  • Assessed the effectiveness of the Board as a whole, the Board Committees and the contribution of each individual Director;
  • Reviewed and assessed the term of office and performance of the ARMC and each of its members to determine the ARMC and its members have carried out their duties in accordance with their terms of reference;
  • Reviewed and recommended the re-election of Directors who are due for retirement by rotation for shareholders’ approval at the Annual General Meeting (“AGM”);
  • Reviewed and recommended the types of trainings suitable for the Board;
  • Reviewed the size and composition of the Board based on the required mix of skills, experience, knowledge and diversity; and
  • Reviewed, assessed and recommend suitable and competitive Directors’ remuneration (fees and benefits) in order to retain the Directors and attract the qualified and credible candidates to be appointed to the Board and Board Committees.

The Terms of Reference of the NRC is published in the Company website. The NRC had reviewed and nominated Dato’ Ong Chek Chai and Ms Kunamony A/P S.Kandiah to be re-elected as Directors at the forthcoming AGM of the Company and recommended the same for the Board’s approval.

Overall Board Effectiveness

The Board recognizes the recommendation of Practice 5.1 of the Code where the Board undertakes annual evaluation to determine the effectiveness of the Board. The Board evaluation comprises Board Assessment, Board Committees Assessment, Individual Assessment and Assessment of Independence of Independent Directors.

The assessment of the Board is based on specific criteria, covering areas such as the Board structure, Board operations, roles and responsibilities of the Board, the Board Committee and the Chairman’s role and responsibilities. The results of the assessment would form the basis of the NRC’s recommendation to the Board for the re-election of Directors at the AGM. Based on the annual assessment conducted, the NRC was satisfied with the existing Board composition and concluded that each Directors has the requisite competence to serve on the Board and has sufficiently demonstrated their commitment to the Company in terms of time and participation during the year under review, and recommended to the Board the re-election of retiring Directors at the Company’s forthcoming AGM. All assessments and evaluations carried by the NC in discharge of its functions were properly documented.

The attendance record of the Directors at Board and Board Committee meetings for the financial year ended 31 March 2021 is set out as follows:

Meeting AttendanceBoardARMCNRCAGM
Yang Mulia Raja Hizad Bin Raja Kamarulzaman5/5N/AN/A1/1
Norman Bin Zainuddin5/5N/AN/A1/1
Mr Chua Yeong Lin5/53/31/11/1
Dato’ Ong Chek Chai5/53/31/11/1
Ivan Radzi Bin Abdullah (appointed on 18 May 2020 and demised on 7 October 2020)3/32/21/11/1
Kunamony A/P S.Kandiah (Appointed on 4 January 2021)1/11/1N/AN/A

To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, the Directors must not hold more than five (5) directorships in public listed companies and shall notify the Chairman before accepting any new directorships. None of the Directors of the Company hold more than five (5) directorships in public listed companies.

Directors’ Training

The Board fully supports the need for its members to continuously enhance their skills and knowledge to keep abreast with the developments in the economy, industry, technology and updates on regulations, amongst others to effectively carry out their duties and responsibilities as directors and to comply with continuous training as required by the MMLR. There were also briefings by the External Auditors and the Internal Auditors and the Company Secretary on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings.

During the financial year ended 31 March 2021, the Director has attended trainings, seminars, conferences and exhibitions which he considered vital in keeping abreast with the changes in laws and regulation, business environment, and corporate government development, as detailed hereunder: –

Company DirectorDescription of Training Programme
Mr Chua Yeong Lin• 2 April 2020 – Mastering Solvency Test under Companies Act 2016

• 7 May 2020 – Tax Consideration on Remuneration for Senior Management Staff & Expatriate

• 5 June 2020 – Organization Risk Management During Covid–19

• 3 November 2020 – Fraud Risk Management Workshop

• 16 November 2020 – Seminar Percukaian Kebangsaan 2020

• 30 December 2020 – Bursa Latest Listing & Disclosure Requirement

• 16 June 21 – Share Buy-Back, and Dealings In Listed Securities, Closed
Period and Insider Trading

• 17 June 21 – MIA Virtual Conference Series: Capital Market Conference 2021

• 24 June 21 – Pre & Post Initial Public Offering Rules and Key Updates to Listing Requirements

Other than as disclosed above, some of the Directors were not able to attend any training programme during the financial year due to their busy work schedule and commitments to travel during period of global pandemic. However, the Directors have kept themselves abreast on the financial and business matters through readings to enable them to contribute to the Board. The Directors are mindful that they shall continue to participate in relevant training programme to keep abreast with new regulatory developments and on corporate governance matters, from time to time.

The Company will continue to identify suitable training for the Directors to equip and update themselves with the necessary knowledge in discharging their duties and responsibilities as Directors.

Remuneration

The NRC and the Board should ensure the remuneration policy of the Group remains supportive on the Group’s corporate objectives and aligns to the interest of shareholders. Thus, the remuneration packages of Directors and key senior management must be sufficiently attractive to attract and to retain high calibre candidates, as pursuant to the Practice 6.1 of the Code. The NRC reviews annually the Directors’ Remuneration (including Non-Executive Directors) for recommendation and approval by the Board. The Directors’ remuneration payable to the Non-Executive Directors will be tabled at the AGM for approval by shareholders.

The NRC reviews annually the performance of the Executive Directors and submits recommendations to the Board on specific adjustments in remuneration and/or reward payments that reflect their contributions for the year, and which are dependent on the performance of the Group, achievement of the goals and/or quantified organisational targets as well as strategic initiatives set at the beginning of each year, which complied with Practice 6.2 of the Code.

As for the Non-Executive Directors, the remuneration should take into account the fee levels and trends for the similar positions in the market and the time commitment required from the director. Such packages should take into consideration any additional responsibilities undertaken such as a director acting as chairman of the board, chairman of a board committee or as the senior independent director.

The Directors plays no part in determining his own remuneration and shall abstain from discussion on their own remuneration. The NRC is chaired by Ms Kunamony A/P S.Kandiah, an Independent Non-Executive Director of the Company and comprises a majority of Independent Non-Executive Directors. The NRC is guided by its terms of reference, which is available on the Company’s website.

Remuneration of Directors and Senior Management

In line with Practice 7.1 of the Code, the Board agreed to provide detailed disclosure on named basis for the remuneration of individual directors as per table set out below. Directors’ remuneration paid/payable in the financial year ended 31 March 2021 are as follows:-

Breakdown of Directors’ Remuneration (Company)

CategoryFee (RM)Salaries, Bonus and Allowances (RM)Benefits in Kinds (RM)Other Benefits, Attendance Fee (RM)
Executive Directors
Yang Mulia Raja Hizad Bin Raja Kamarulzaman60,000
Norman Bin Zainuddin30,000
     
Non-Executive Directors
Mr Chua Yeong Lin30,000
Dato’ Ong Chek Chai30,000
Ivan Radzi Bin Abdullah (appointed on 18 May 2020 and demised on 7 October 2020)  11,700   
Dato’ Sri Wan Ahmad Najmuddin Bin Mohd (appointed on 16 May 2019 & resigned on 13 May 2020)  3,750   
Kunamony A/P S.Kandiah (Appointed on 4 January 2021)7,500
TOTAL172,950

Breakdown of Directors’ Remuneration (Group)

CategoryFee (RM)Salaries, Bonus and Allowances (RM)Benefits in Kinds (RM)Other Benefits, Attendance Fee (RM)
Executive Directors
Yang Mulia Raja Hizad Bin Raja Kamarulzaman60,000
Norman Bin Zainuddin30,000
     
Non-Executive Directors
Mr Chua Yeong Lin30,000
Dato’ Ong Chek Chai30,000
Ivan Radzi Bin Abdullah (appointed on 18 May 2020 and demised on 7 October 2020)  11,700   
Dato’ Sri Wan Ahmad Najmuddin Bin Mohd (appointed on 16 May 2019 & resigned on 13 May 2020)  3,750   
Kunamony A/P S.Kandiah (Appointed on 4 January 2021)7,500
TOTAL172,950

Aggregate Directors’ Remuneration

Categories of RemunerationGroup Company 
 Executive Directors (RM)Non-Executive Directors (RM)Executive Directors (RM)Non-Executive Directors (RM)
Fee 90,00082,95090,00082,950
Salaries, Bonus and Allowances
Benefits in Kinds
Other Benefits, Attendance Fee

The Company noted that Practice 7.2 of the Code on the need for transparency in the disclosure of its key senior management remuneration, the Company is of the opinion that the disclosure of remuneration details may be detrimental to the Company’s management of its human resources due to the competitive environment for resources within the industries the Company and its subsidiaries operate in.

While the Company has set policies and procedures in setting the remuneration of key personnel, such disclosure may also be misconstrued so as to hinder its recruitment and retention of personnel.

The Company is of the view that the interest of the shareholders would not be prejudiced as a result of such nondisclosure of the Company’s top two (2) senior management personnel who are not Directors on named basis. The number of top two (2) senior management whose remuneration (comprising salary, bonus and other emoluments) for the financial year ended 31 March 2021 within the successive bands of RM50,000 is as follows:

Remuneration BandNo. of top two (2) Senior Management Personnel
Below RM50,0001
RM50,001 to RM100,000
RM100,001 to RM150,000
RM150,001 to RM200,0001
RM200,001 to RM250,000
RM250,001 to RM300,000

PRINCIPLE B : EFFECTIVE AUDIT AND RISK MANAGEMENT

Audit and Risk Management

The ARMC is relied upon by the Board to, amongst others, provide advice in the areas of financial reporting, external audit, internal control environment and internal audit process, review of related party transactions as well as conflict of interest situation. The ARMC also undertakes to provide oversight on the risk management framework of the Group.

In line with Practice 8.1 of the Code, the ARMC is chaired by an Independent Non-Executive Director who is distinct from the Chairman of the Board and all members of the ARMC are financially literate.

The composition of the ARMC, including its roles and responsibilities as well as a summary of its activities carried out in the financial year ended 31 March 2021, are set out in the ARMC Report of this Annual Report.

The composition of the ARMC are as below: –

  • Mr Chua Yeong Lin (Independent Non-Executive Director) – Chairman
  • Dato’ Ong Chek Chai (Non-Independent Non-Executive Director) – Member
  • Ms Kunamony A/P S.Kandiah (Independent Non-Executive Director) – Member

The ARMC has at least one member fulfils qualifications prescribed by the MMLR. There is a strong element of independence to fulfil their role objectively and provide a critical and sounding view in ensuring the integrity of financial controls and integrated reporting, and identifying and managing key risk.

None of the ARMC members are former key audit partners of the Group. Nevertheless, The ARMC has adopted a policy that requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the ARMC, which meets the requirement of Practice 8.2 of the Code. The said policy has been incorporated in the terms of reference of the ARMC, a copy which is available on the Company’s website. Thus far, no former key audit partner has been appointed as a Director of the Company.

In line with Practice 8.3 of the Code, the ARMC undertakes an annual assessment of the suitability and independence of the External Auditors as well as the performance of the External Auditors, including the review of calibre of the audit firm, quality of processes, audit team, independence and objectivity, audit scope and planning, audit fees and audit communications.

The ARMC is responsible for reviewing audit, recurring audit-related and non-audit services provided by the External Auditors. These recurring audit-related and non-audit services comprise regulatory reviews and reporting, interim reviews, tax advisory and compliance services. The terms of engagement for services provided by the External Auditors would be reviewed by the ARMC prior to recommending to the Board for approval. The ARMC had reviewed the provision of non-audit services by the External Auditors during the financial year and concluded that the provision of these services did not compromised with the External Auditors’ independence and objectivity as the amount of fees paid for these services was not significant as compared to the total fees paid to the External Auditors. The External Auditors had provided a confirmation of their independence to the ARMC that they had been independent throughout the conduct of audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

On the other hand, the ARMC has also sought assurance from the External Auditors, confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants (“MIA”). The External Auditors provided such declaration in their annual audit plan presented to the ARMC prior to the commencement of audit for a particular financial year.

In this regard, the ARMC has assessed the independence of Messrs. Nexia SSY PLT as the External Auditors of the Company as well as reviewed the level of non-audit services rendered by Messrs. Nexia SSY PLT to the Company for the financial year ended 31 March 2021.

Details of statutory audit, audit-related and non-audit fees paid/payable in the financial year ended 31 March 2021 to the External Auditors are set out in the Additional Information of this Annual Report.

The ARMC, having reviewed the performance of Messrs. Nexia SSY PLT, had recommended the reappointment of Messrs. Nexia SSY PLT as the External Auditors to the Board, upon which the shareholders’ approval will be sought at the forthcoming AGM.

Meanwhile, the Board of Directors, including member of the ARMC will continue to develop and update their knowledge relevant to discharge their responsibilities, as recommended in Practice 8.5 of the Code. The ARMC members are expected to be financially literate and have sufficient understanding of the Company’s business in order to continuously apply a critical and probing view on the Company’s financial reporting process, transactions and other financial information, and effectively challenge management’s assertions on the company’s financials. Where there are significant matters requiring judgement, the ARMC should ask probing questions to ascertain whether the financial statements are consistent with operational and other information known. The ARMC should review and provide advice on whether the financial statements taken as a whole provide a true and fair view of the company’s financial position and performance.

Risk Management and Internal Control Framework

The Board has overall responsibility for maintaining a sound system of risk management and internal control of the Group that provides reasonable assurance of effective and efficient business operations, compliance with laws and regulations as well as internal procedures and guidelines.

In line with Practices 9.1 and 9.2 of the Code, the ARMC oversees the risk management of the Group and advises the Board on areas of high risk faced by the Group and the adequacy of compliance and control throughout the organisation. The ARMC also reviews the action plan implemented and makes relevant recommendations to the Board to manage residual risks.

The Group has established a formal risk management framework to oversee the risks management of the Company and engaged an external consultant to assist the Company in identifying, assessing and managing the risks areas that are applicable to the Company’s business, including corruption risk, and ensure that the risk management processes are in place and functioning effectively.

The Company continues to maintain and review its internal control procedures to ensure the protection of its assets and its shareholders’ investment.

During the financial year ended 31 March 2021, the Company has outsourced its internal audit function to a professional service firm namely, Messrs. TRS Forensics Sdn. Bhd. as the Internal Auditors of the Company, to assist the ARMC in discharging its duties and responsibilities in respect of reviewing the adequacy and effectiveness of the Group’s risk management and internal control systems.

The Company continues to maintain and review its internal control procedures to ensure the protection of its assets and its shareholders’ investment. Details of the main features of the Company’s risk management and internal controls framework are further elaborated in the ARMC Report and the Statement on Internal Control and Risk Management of this Annual Report.

Governance, Risk Management and Internal Control Framework

Pursuant to Practices 10.1 and 10.2 of the Code, the Board has outsourced the Internal Audit (“IA”) function for the financial year ended 31 March 2021 to an independent provider, namely Messrs. TRS Forensics Sdn. Bhd. To provide an independent appraisal over the system of internal control of the Group to the ARMC.

The responsibilities of the Internal Auditors include providing independent and objective reports on the state of internal controls and the significant operating units in the Group to the ARMC, with recommendations for improvement to the control procedures, so that remedial actions can be taken in relation to weaknesses noted in the systems.

The engaging partner and team are free from any relationships or conflict of interests with the Company, to ensure the Internal Auditors’ objectivity and independence are not impaired.

During the financial year under review, the Internal Auditors have conducted review on the Group in accordance to the Internal Audit Plans, which have been approved by the ARMC and Board.

The Internal Auditors will perform periodic testing of the internal control systems to ensure that the system is robust. The Statement on Risk Management and Internal Control as included in this Annual Report provides the overview of the internal control framework adopted by the Company during the financial year ended 31 March 2021.

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

Communication With Stakeholders

The Board recognises the importance of being transparent and accountable to the Company’s stakeholders and acknowledges that continuous communication between the Company and stakeholders would facilitate mutual understanding of each other’s objectives and expectations.

In line with Practice 11.1 of the Code, the Board consistently ensures the supply of clear, comprehensive and timely information to their stakeholders via various disclosures and announcements including quarterly and annual financial results which provides investors with up-to-date financial information of the Group. The Company will ensure that all quarterly financial results are announced to Bursa Securities as per the MMLR and the circular issued by Bursa Securities and that the Annual Report together with the Audited Financial Statements are released within the timeframe mandated by Bursa Securities. However, with the one-month extension of time granted by Bursa Securities under the relief of Covid-19 pandemic, the Quarterly Report of the Company for the financial period ended 31 March 2021, was released on extended due date by 30 June 2021 as permitted by Bursa Securities. Towards this, the Company’s website that incorporates a corporate governance section which provides all relevant information on the Company and this corporate section enhances the investor relations function by including all the corporate documents such as Board Charter, Terms of Reference of respective Board Committees.

Further, shareholders and investors could make inquiries in respect of investor relation matter directly to the designated management personnel who responsible for investor relations matter via a dedicated e-mail address which made available on the corporate website.

To encourage greater shareholders’ participation at the AGM, the Board strive to serve at least twenty eight (28) days’ notice (longer period than 21 days’ notice, the minimum required notice period) for AGM, whenever possible. The Chairman shall ensure the Board is accessible to shareholders and an open channel of communication is cultivated. From the Company’s perspective, the AGM also serves as a forum for Directors and management to engage with the shareholders personally to understand their needs and seek for their feedback. The Board welcomes questions and feedback from the shareholders during and/or at the end of the AGM and ensures the queries raised by the shareholders are responded in a proper and systematic manner.

Conduct of General Meetings

The General Meeting is the principal forum for shareholder’s dialogue, allowing the shareholders to review the Group’s performance through the Company’s Annual Report and to raise questions to the Board for clarification.

For good corporate governance practice, the notice of the AGM and the Annual Report would be sent to all shareholders at least twenty-eight (28) days prior to the meeting so that the shareholders would be given sufficient time and notice to consider on the resolutions to be discussed at the AGM and to encourage greater shareholders’ participation at the AGM. The shareholders are thus provided with ample time to review the annual report, to appoint proxies and to collate questions to be asked at the AGM. All the Directors (including the chairman of the board committees) and the External Auditors were present in person to engage directly with and be accountable to the shareholders for their stewardship of the Company, as pursuant to the Practice 12.1 of the Code.

During the Eighteenth AGM held on 30 September 2020 (“18th AGM”), the Chairman had invited the shareholders to participate in deliberating the proposed resolutions and/or on the Group’s operations in general. The Directors and the External Auditors were all in attendance to respond to all questions raised and to provide clarification as required by the shareholders, which in line with Practice 12.2 of the Code.

To be in line with the MMLR of the Bursa Securities, the Company had implemented poll voting for all the proposed resolutions set out in the notice of the 18th AGM. Each item of special business included in the notice of AGM will be accompanied by an explanation of the said proposed resolutions. All shareholders or proxies will be briefed on the voting procedures prior to the poll voting by the Share Registrar. The Company will appoint independent scrutineers to validate the votes cast at the 18th AGM.

In view of the Covid-19 pandemic, the Company is also looking into engaging with the respective parties on the proposal on convening the forthcoming AGM via virtual meeting. The Board views that the Company could leverage on the technology to convene the forthcoming AGM which could allow all the shareholders of the Company to attend, participate, vote and to post their questions to the Board. With this, it will promote the transparency and enable the Board to further engage with the shareholders at the AGM.

The outcome of resolutions tabled and passed at the AGM will be released to Bursa Securities on the same meeting day. This CG Overview Statement was approved by the Board on 18 August 2021.

Other references:

CORPORATE GOVERNANCE REPORT (30 Aug 2021), click here.

TERMS OF REFERENCE OF THE NOMINATION COMMITTEE, click here.

TERMS OF REFERENCE OF THE NOMINATION & REMUNERATION COMMITTEE (Revised as at 23 March 2018), click here.

TERMS OF REFERENCE OF THE AUDIT COMMITTEE, click here.

TERMS OF REFERENCE OF THE AUDIT AND RISK MANAGEMENT COMMITTEE (Revised as at 23 March 2018), click here.

BOARD CHARTER, click here.

BOARD CHARTER (2018), click here.


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