Charters and terms of reference
Audit Committee’s Policy on Suitability, Objectivity and Independence of External Auditors
Remuneration Committee’s Terms of Reference
Audit Committee Charter
Nomination Committee’s Terms of Reference
Risk Management Committee’s Terms of Reference
Codes and Policies
Code of Conduct and Ethics
Whistle Blowing Policy
Directors’ Code of Ethics
Boardroom Diversity Policy
Corporate Governance Report 2017
Corporate Governance Overview Statement 2017
The Board firmly believes that high standards of corporate governance are essential to the sustainability of the Group’s business and the enhancement of shareholder value. In this regard, the Board is committed to ensure that the highest levels of business integrity, professionalism and ethical conduct are observed and practised throughout the entire Group, with the objective of realizing long-term value for all shareholders and stakeholders.
This Corporate Governance Overview Statement presents the key aspects/overview of our corporate governance framework and practices based on the corporate governance Principles set out in the Malaysian Code on Corporate Governance (MCCG). This statement is to be read together with our Corporate Governance Report (CG Report) which provides the application of the Practices in the MCCG during the financial year. The CG Report is available on Daibochi’s corporate website at www.daibochi.com (investor relations section) as well as via an announcement on Bursa Malaysia.
The Board is pleased to report that it had continued to uphold and practise good corporate governance in its management of the affairs of the Group during the financial year. Our efforts have been recognised as the Company was ranked among the Top 100 Companies for Overall Corporate Governance and Performance as well as among the Top 100 Companies for Good Disclosures at the Minority Shareholder Watchdog Group (MSWG)-ASEAN Corporate Governance Recognition 2017 event.
PRINCIPLE A – BOARD LEADERSHIP AND EFFECTIVENESS
1. Board Responsibilities
- Roles and Responsibilities
- Promote good corporate governance culture within the Group;
- Review, challenge and decide on Management’s proposals for the Group and monitor its implementation;
- Ensure that the strategic plan of the Group supports long-term value creation;
- Supervise and assess Management’s performance to determine whether the business is being properly managed;
- Ensure that there is a sound risk management framework and internal control systems in place to safeguard shareholders’ investments, the Group’s assets and the interest of other stakeholders;
- Succession planning of the Board and senior management;
- Ensure that there are effective communication policies with stakeholders; and
- Ensure integrity of the Group’s financial and non-financial reporting.
1.1 The Company is steered by an experienced, dynamic and well balanced Board comprising five (5) competent professionals with diverse expertise in accounting, business, financial, engineering, legal, corporate, management, business development and marketing that add value to the Group. The Board provides effective leadership by setting appropriate values and strategic direction to ensure that the objectives of the Group are achieved.
1.2 The Board has established clear roles and responsibilities and each Board member has a fiduciary duty to discharge his/her duties in the best interests of the Group at all times. The principal responsibilities of the Board include:
1.3 The Board has delegated certain functions to various Board Committees (BCs), namely, the Audit Committee (AC), Nomination Committee (NC), Remuneration Committee (RC) and Risk Management Committee (RMC). The BCs assist the Board in discharging its duties efficiently and have their own established charters/terms of reference in place, which are reviewed from time to time. The committees are chaired by an Independent Non-Executive Director (INED) of the Company to promote good governance and transparency.
1.4 The Company’s Board Charter sets out the Board’s strategic intent and outlines the Board’s roles and responsibilities. The Board Charter was reviewed in December 2017 and revisions were approved in line with the Practices in the MCCG to provide clarity and enhance certain provisions in accordance with the Board’s objectives. The Board Charter is available on the Company’s corporate website at www.daibochi.com.
Chairman and Managing Director
1.5 The position of Chairman and the Managing Director are held by two (2) individuals with distinct and separate functions to ensure an optimal balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Chairman works closely with the Managing Director and Company Secretaries on matters to be tabled at meetings and fosters constructive interactions with the shareholders at the general meetings.
1.6 The Chairman, an INED also chairs the NC, RC and RMC and is the Senior Independent Director of the Board. He is primarily responsible for the orderly conduct and workings of the Board and the effectiveness of its governance process. The Managing Director makes strategic proposals to the Board, develops the Group’s business in accordance with strategies, policies, budgets and business plans as approved by the Board; oversees operations and provides guidance and leadership to employees of the Company.
1.7 The Board drives the leadership in governance standards by promoting a strong culture of integrity, good business conduct and ethical behaviour. Management ensures that corporate governance practices are implemented throughout the entire organisation. The Company’s Code of Conduct and Ethics governs the standards of ethics and good conduct expected of Directors and employees respectively. The Directors’ Code of Ethics ensures that Board members act in accordance with the principles of sincerity, integrity, accountability and social responsibility.
1.8 The Company has a Whistleblowing Policy to provide an avenue for employees and stakeholders to report genuine concerns about unethical behaviour and improper conduct within the Company, in good faith and without fear of reprisal. This policy was revised in November 2017 to further enhance the internal control system and procedures. The codes and policy can be found on the Company’s corporate website at www.daibochi.com.
1.9 The Board, through the AC, reviews related party transactions (RPT), recurrent related party transactions (RRPT) and possible conflict of interest (COI) situations on a quarterly basis. This is to ensure that transactions are undertaken in the best interest of the Company or Group, fair, reasonable, on normal commercial terms and not detrimental to the interest of the minority shareholders. A Director who has an interest in a transaction must abstain from deliberating and voting on the relevant resolution, in respect of such transaction at the Board meeting and at the general meeting convened to consider the said matter. There were no significant RPTs, RRPTs and COI situations which arose within the Company or Group, including any transaction, procedure or course of conduct that raised questions of management integrity during the financial period under review.
1.10 Directors and principal officers of the Company who have access to material/inside information which has not been disclosed to Bursa Malaysia and the investing public are prohibited from dealing in the Company’s securities while in possession of this information. During the year, the Company Secretaries advised the Directors on trading restrictions i.e. dealings during open and closed periods in accordance with Bursa Malaysia’s Listing Requirements (Listing Requirements). Each Director also has a duty to maintain the confidentiality of information that he/she obtains by virtue of his/her position as a Director and is bound by the Company’s Corporate Disclosure Policy.
1.11 Board meetings are held at quarterly intervals and additional meetings are convened, when necessary to deliberate particular matters. Directors may convey their views to the Chairman or the Company Secretaries or participate by means of audio or visual communication in accordance with the 3rd Schedule of the Companies Act 2016 if he/she is unable to attend in person.
1.12 Board meetings are structured with a pre-set agenda. The Board meeting agenda and materials are circulated at least five (5) business days in advance of the meetings to ensure that members are fully apprised of matters arising to facilitate constructive Board discussions. Any additional information requested by Directors will also be made available. The Board has a formal schedule of matters reserved to it for deliberation and decision such as the approval of annual and interim results, major capital expenditure and investments, budgets, strategic issues affecting the business of the Group, corporate policies and procedures and corporate plans.
1.13 In addition, on important matters which require the Board’s decisions, prior briefings, if necessary, are provided or conveyed by the Executive Directors (EDs) to other Board members to ensure full knowledge and understanding, thus enhancing the members’ comprehension of Board papers before deliberations. External advisors may be invited to attend Board meetings to advise and/or furnish the Board with professional insight, information and clarification needed on relevant items on the agenda.
1.14 At the Board meetings, Directors receive briefings from Management pertaining to the operational and financial performance of the Group, updates on the Group’s competitors, risks, opportunities and challenges faced and industry developments. These enable Directors to make a balanced and informed assessment of matters to arrive at a considered decision. Nine (9) Board meetings were held in 2017 and all the Directors fulfilled the requirement stipulated by Bursa Malaysia in relation to their attendance. Directors also attended the meetings of the BCs. The frequency of Directors’ attendance at the Board meetings is set out in the Profile of Directors on pages 11 and 12 of this Annual Report.
1.15 All proceedings/minutes of the meetings are prepared and circulated in a timely manner to reflect the decision making process of the Board appropriately. Minutes of Board and BCs’ meetings are circulated to members for their perusal prior to confirmation of the minutes at the following meetings and are signed by the respective Chairpersons in accordance with the Company’s Constitution. Minutes of the AC’s proceedings are also circulated to all Board members for notation.
1.16 Decisions of the Board and BCs may also be obtained through Directors’ Circular Resolutions, where appropriate. Key matters requiring the Board/BCs’ approvals are reserved for resolution at the respective meetings to facilitate discussions amongst the members and Management as part of good corporate governance.
Access to Information
1.17 Directors have access to all information pertaining to the Group and may seek clarification from Management and the Company Secretaries in the furtherance of their duties. Procedures are also in place in the Board Charter for the Board/individual Director to seek independent professional advice at the Company’s expense, if necessary. Neither the Board nor the individual Directors sought independent professional advice during the reporting period.
1.18 Directors are expected to notify the Chairman and Company Secretaries before accepting any new directorship, including an indication of time that they will spend on their new appointment. They must not hold directorships in more than five (5) public listed companies. None of the Directors held any directorship in other public listed companies during the financial year. The schedule of Board meetings and the Annual General Meeting (AGM) is planned well in advance and distributed to the Board members in the 4th quarter of the preceding year. This is to facilitate the Directors’ time planning and to enable them to fit the meetings into their respective schedules. The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles on the Board and BCs.
Professional Development and Induction
1.19 The Board believes that continuous training for the Directors is essential to enable them to discharge their duties effectively. The Directors are empowered by the Board to evaluate and assess their own training needs on a continuous basis, whilst the Company Secretaries assist with the co-ordination of continuous training for Directors. During the financial year, the Directors assessed their own training needs and informed the Company Secretaries of training programmes that they wish to attend to upgrade themselves. Moving forward, the Directors will continue to review and evaluate their training needs to keep abreast of latest technical, industry and general economic developments to further enhance their professional skills and knowledge.
1.20 The list of trainings attended by the Directors in 2017 is set out below:
1.21 In 2017, the Company Secretaries updated the Board on the MCCG and the Companies Act 2016. During the year, Mr. Faris Cassim who was appointed as an INED was briefed by Management and furnished with induction materials to enable him to gain an understanding of the Group’s business, operations, organisation structure, corporate policies and corporate governance matters. The Company Secretaries maintain a complete record of the trainings attended by the Directors.
1.22 The Directors have access to the advice and services of qualified, experienced and competent Company Secretaries to enable them to discharge their duties effectively. The Board acknowledges the fact that the Chairman is entitled to the positive support of the Company Secretaries in ensuring the effective functioning of the Board. The Company Secretaries ensure that the Board members are kept updated on all relevant corporate laws, rules, regulations, Listing Requirements and corporate governance developments. During the year, the Company Secretaries attended trainings to keep themselves updated on relevant laws, regulations and corporate governance matters. The appointment and removal of the Company Secretaries are within the purview of the Board. The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board.
1.23 The Board is mindful that good sustainability practices are integral to the Group’s long term business growth. To this end, the Board strives to embed a strong governance culture, socially responsible values and sound environmental practices throughout the Group. The Company’s management of economic, environment and social matters for the financial year under review is reported in the Sustainability Statement in this Annual Report.
2. Board Composition
- Balanced Board
2.1 The number of Directors shall not be less than two (2) and not more than nine (9) under the Company’s Constitution. The current Board comprises a majority of INEDs: two (2) EDs and three (3) INEDs (including the Chairman). The Board is led by Mr. Heng Fu Joe (appointed as the Chairman on November 1, 2017). He is joined on the Board by Mr. Lim Soo Koon (Managing Director), Mr. Low Geoff Jin Wei (ED), Ms. Caroline Ang and Mr. Faris Cassim (INEDs).
2.2 Changes to the composition of the Board during the reporting period were as follows:
Mr. Faris Cassim was appointed as an INED on September 1, 2017. Datuk Wira Wong Soon Lim and Mr. Low Chan Tian (EDs) retired on October 1, 2017. Mr. P. James Edwin A/L Louis Pushparatnam (Chairman and INED) retired on November 1, 2017.
2.3 The Board is of the view that its composition, with an appropriate mix of INEDs and EDs is adequate for the effective discharge of its functions and responsibilities. The three (3) INEDs augment the Board’s independence and bring objective perspectives/judgment, whilst the EDs provide strong operational and financial insights into the business allowing well considered decisions to be made.
2.4 The Board believes that Independent Directors may over time develop significant insights in the Group’s business and operations and can continue to provide valuable contributions to the Board. Hence, independence of the Independent Directors must be based on their professionalism, integrity and objectivity and not merely on form i.e. the tenure/number of years that they have served on the Board. In the event the Board decides to retain any Independent Director who has served beyond nine (9) years, the Board will justify and seek shareholders’ approval in accordance with Practice 4.2 of the MCCG. None of the INEDs have served as Independent Directors for more than nine (9) years since their date of appointment.
2.5 The Board recognizes the value of having a balanced Board with members from diverse backgrounds as this would offer different viewpoints/insights which are essential to the attainment of the Group’s strategic objectives. In this regard, the NC is guided by the Board Diversity Policy (available on the Company’s website at www.daibochi.com) in ensuring that equal opportunity is provided based on merit and that no person is discriminated against on grounds of age, ethnicity, gender, religion and marital status in its recruitment and succession planning process.
2.6 The Board acknowledges the role that women with the right competencies and skills can play in contributing to diversity of perspectives in the Boardroom and senior management. In this regard, the Board has a female Director, Ms. Caroline Ang (INED) and two (2) women in the Company’s seven (7) member strong senior management team (excluding the EDs).
2.7 The Board is of the view that gender is but one aspect of diversity and whilst it is important to promote gender diversity, the selection criteria based on an effective blend of competencies, experience and skills should remain a priority. The current make-up of the Board reflects our commitment to diversity in age, gender, nationality, cultural background, skills and knowledge. On April 4, 2018, the Board revised the Board Diversity Policy and set the target of having at least one (1) woman Director on the Board. The Board is committed to take the necessary measures, through the NC, towards promoting gender diversity and appointing the best qualified person based on merit when changes in the Boardroom are contemplated in future.
2.8 The NC comprises exclusively of INEDs and is chaired by the Senior Independent Director. Mr. Faris Cassim was appointed as a NC member on September 1, 2017. The NC’s authority and duties are governed by its terms of reference, which are available on the Company’s corporate website at www.daibochi.com. The NC’s functions include recommending the appointment of Directors to the Board and BCs and conducting assessment of the Board, BCs and individual Directors to assess their effectiveness and contribution.
2.9 The NC adheres to a formal and transparent procedure for the nomination and appointment of new Directors. Prospective candidates are identified from a number of sources, but not limited to Directors’ or Management’s contacts/recommendations. All appointments are based on merit, with due consideration given to age, gender, nationality and ethnicity to augment diversity in the Boardroom. The NC will also assess whether the candidate is able to devote sufficient time to effectively discharge his/her role as a Director. The NC’s assessment process of the Board’s composition, BCs and individual Directors involves having the Directors complete questionnaires, which will then be collated by the Company Secretaries and forwarded to the NC members for their evaluation and sharing with the Board members.
2.10 The NC undertook the following key activities in respect of the financial year:
(a) Assessed Mr. Faris Cassim’s suitability to be appointed as an INED and member of the BCs before recommending to the Board for approval;
(b) Assessed Mr. Heng Fu Joe’s appointment as the new Chairman of the Board, RC, NC
and RMC and Ms. Caroline Ang’s appointment as the AC Chairperson due to Mr. James
Edwin’s (former Chairman and INED) retirement;
(c) Advised the Board on the composition of the Board and BCs as a result of the retirements of the former EDs and former Chairman;
(d) Assessed the Board’s composition and balance, effectiveness of the Board as a whole,
the BCs, performance of each individual Director, assessment of independence of the INEDs and Board diversity; and
(e) Reviewed the NC’s terms of reference in view of the MCCG and proposed revisions to
the Board for approval.
2.11 The NC also assessed Mr. Low Geoff Jin Wei and Mr. Faris Cassim who are due for re-election pursuant to Articles 103 and 94 of the Company’s Constitution at the forthcoming AGM. Having considered the review by the NC, the Board is satisfied that both Directors have met the Board’s expectations and exemplified their commitment as reflected by their professional conduct and valuable contributions to the Board. The said Directors have also allocated sufficient time and attention to the affairs of the Company and have carried out their fiduciary duties professionally. As an INED, Mr. Faris Cassim has demonstrated independent and objective judgment to Board deliberations to ensure sufficient check and balance. Hence, the Board with the abstention of the two (2) Directors unanimously recommends that the shareholders vote in favour of the re-election of the above Directors at the Company’s AGM. Please refer to Practice 5.1 of the CG Report for further information.
2.12 The Board regards succession planning as an important aspect of corporate governance. In this regard, the Board is focused in ensuring that individuals with the appropriate skills and experience are appointed to the Board and senior management. The Board, via the NC will continue to monitor succession planning to ensure continuity of talent as well as progressive and orderly renewal of the Board and senior management in achieving the Group’s vision and mission.
Detailed disclosures on the NC and its assessments are set out in relation to Practices 4.4 to 5.1 of the MCCG in the CG Report.
- 3.1 The RC consists of INEDs and its duties include reviewing and recommending matters relating to the remuneration of the Board and senior management. During the year, our Managing Director, Mr. Lim Soo Koon resigned as a member of the RC in line with the MCCG guidance to ensure the RC’s independence. Mr. Faris Cassim was appointed as a member of the RC on September 1, 2017. The RC’s terms of reference, including its policy on Directors and senior management’s remuneration are available on Daibochi’s corporate website at www.daibochi.com.
3.2 The objective of the remuneration policy is to provide a fair and sufficiently competitive remuneration package to attract, motivate and retain high calibre Directors and senior management members. The level of remuneration is determined by various factors, including the Group’s performance, industry practices and the individual’s responsibilities, performance and contributions in the achievement of strategic/corporate objectives. Directors’ remuneration is reviewed annually to ensure that it is reflective of the contribution and responsibilities of the Director concerned. None of the Directors are involved in deciding their own remuneration.
3.3 The EDs do not receive Directors’ fees from the Company and their compensation comprises salaries, bonuses, other emoluments and benefits-in-kind. INEDs receive meeting allowance, monthly allowance, yearly AC allowance (benefits) and Directors’ fees. The Board will be seeking shareholders’ approval for the fees and benefits paid/payable to INEDs at the Company’s 45th AGM pursuant to Section 230(1) of the Companies Act 2016.
3.4 The RC carried out the following key activities in respect of the financial year:
(a) Recommended to the Board the remuneration of the EDs and INEDs’ fees; and
(b) Reviewed the RC’s terms of reference in view of the MCCG and proposed revisions to
the Board for approval.
3.5 The remuneration of Directors of the Company (including the remuneration for services rendered to the Company as a Group, if any) for the financial year, on a named basis is as follows:
3.6 In addition to the remuneration package, Directors also have the benefit of Directors’ & Officers’ Insurance to ensure that they are adequately covered against liabilities in the course of performing their professional duties.
3.7 The Board notes the requirement for disclosure of the top five (5) senior management’s remuneration on a named basis and in bands of RM50,000 for corporate transparency and has considered the matter. The Board believes that such disclosure is not in the best interest of the Company/Group due to the highly confidential/sensitive nature of this information and concerns of key talent poaching in the specialised flexible packaging industry. The Board has disclosed the Company’s top five (5) senior management’s remuneration on a total basis and believes that it is adequate.
Detailed disclosures on the RC and its activities are provided in relation to Practices 6.1 to 7.2 of the MCCG in the CG Report.
PRINCIPLE B – EFFECTIVE AUDIT AND RISK MANAGEMENT
4. Audit Committee
- Composition of the AC
4.1 The AC comprises three (3) members, all of whom are INEDs. The AC Chairperson, Ms. Caroline Ang is not the Chairperson of the Board, thus ensuring the overall effectiveness and independence of the AC. The primary objective of the AC is to assist the Board in ensuring proper corporate governance in fulfilling its fiduciary responsibilities, particularly relating to business ethics, policies and practices, financial management, risk management and internal controls. The AC carries out its functions and duties in accordance with its terms of reference set out in the AC Charter, which is available on the Company’s corporate website at www.daibochi.com.
4.2 All the AC members are financially literate and are able to understand matters under the purview of the AC, including the financial reporting process. Mr. Heng Fu Joe and Ms. Caroline Ang are members of the Malaysian Institute of Accountants. Mr. Faris Cassim holds Bachelor of Laws and Bachelor of Commerce degrees. None of the AC members were previous partners or directors of the Company’s existing external audit firm. The Board is of the view that the AC members have the necessary and appropriate expertise and skills to discharge their duties effectively.
Independence of External Auditors
4.3 The Company has established an appropriate and transparent relationship with its External Auditors (EA) through the AC. The AC’s Policy on the Suitability, Objectivity and Independence of External Auditors (AC’s Policy on EA) is intended to regulate the provision of services by the EA to ensure that the EA does not perform any service that may impair its independence. In upholding audit independence, the AC’s Policy on EA stipulates that the former key audit partner shall observe a cooling-off period of at least two (2) years before being appointed as a member of the AC and this is in accordance with Practice 8.2 of the MCCG. The AC’s Policy on EA is available on the Company’s corporate website at www.daibochi.com.
4.4 The AC conducted the assessment in relation to the suitability, objectivity and independence of the EA for the financial year under review prior to recommending to the Board to seek shareholders’ approval for the EA’s re-appointment. Details of the AC’s assessment are available in Section 2.3(a) of the AC Report. The Board considered the AC’s annual assessment/evaluation and recommendation supporting the EA’s re-appointment. Being satisfied with the performance, objectivity and independence of the EA, the Board approved the AC’s recommendation on April 4, 2018 for the shareholders’ approval to be sought at the 45th AGM on the re-appointment of Messrs Grant Thornton Malaysia as EA of the Company for the financial year ending 2018.
Audit Committee’s Activities
4.5 The AC met five (5) times in 2017 and the matters deliberated included financial reporting matters, related party transactions and internal audit reports. The AC also reviewed its terms of reference and proposed revisions to the AC Charter in line with the MCCG. Furthermore, the AC assessed the performance of the EA and the Internal Auditors (IA) for the financial year. The AC met twice with the Company’s EA and once with the IA, without the presence of Management members during the reporting period.
4.6 The AC members attended trainings during the financial year to keep themselves abreast of relevant developments, including in relation to finance, accounting, audit, tax and corporate governance. The programmes attended by Mr. Heng Fu Joe, Ms. Caroline Ang and Mr. Faris Cassim are set out in the Professional Development and Induction section above. Moving forward, the AC members will continue to review their training needs to enhance their skills/knowledge in accounting and auditing standards, practices and rules to enable them to discharge their duties effectively.
Please refer to the AC Report for the detailed information of the AC, its composition and activities during the reporting period.
5. Risk Management and Internal Control Framework
- 5.1 The Board affirms its overall responsibility for the Group’s risk management and system of internal controls, including reviewing its adequacy and effectiveness in line with its business objectives. The Board has established a sound risk management framework, including an ongoing process for identifying, evaluating, mitigating/managing and monitoring the significant risks faced by the Group. This framework is supported by internal control systems, comprising effective governance mechanisms, policies and procedures as well as checks and balances embedded in the Group’s business process.
5.2 The Board is assisted by the RMC and AC in reviewing the effectiveness of the risk management and internal control systems. The RMC is chaired by Mr. Heng Fu Joe (INED) and comprises all Board members. Mr. Faris Cassim was appointed as a RMC member on September 1, 2017. The RMC supports the Board with risk governance and assists to identify, assess, manage and monitor key business risks to safeguard shareholders’ investments and assets of the Group. The RMC carries out its functions and duties in accordance with its terms of reference available on the Company’s corporate website at www.daibochi.com.
5.3 Risk areas representing challenges to the Group’s business are classified into distinct categories i.e. Sales and Marketing; Operations; Human Resource; Finance; Management Information Systems; Fraud/Theft; Technology; Quality Assurance and Procurement. During the financial year under review, the RMC assessed the Group’s risks and deliberated the key risks to be presented to the Board. The RMC also reviewed and revised its terms of reference in line with the MCCG.
5.4 The AC ensures that the internal audit function is effective and able to function independently. The objectives of the internal audit are to independently assess the system of internal controls established by the Management and to make appropriate recommendations in relation thereto. The Group’s internal audit function is carried out in accordance with the International Professional Practice Framework and has been outsourced to an independent professional firm.
5.5 During the reporting period, the IA conducted audits in relation to Strategic Management; Purchasing; Warehouse and Logistics; Product Development and Technical Support; Quality Assurance; Safety, Health and Environment; Human Resource; Information Technology and Sales and Marketing. The adequacy and effectiveness of internal controls were reviewed by the AC in relation to the internal audits in 2017. Observations arising from the internal audits together with Management’s response and corrective action plans were proposed to the AC at the AC meetings. The AC’s deliberations were then reported to the Board.
5.6 The Board is satisfied that the risk management and internal controls in place for the financial year ended December 31, 2017 are adequate and effective to safeguard shareholders’ investments, the Group’s assets and the interest of other stakeholders.
Specific disclosures on the Group’s risk management and internal control framework are available in the Risk Management and Internal Control Statement on pages 43 to 49 of the Annual Report.
PRINCIPLE C – INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
6. Communications with Stakeholders
- 6.1 The Board maintains high standards of corporate disclosure and values its dialogue with shareholders, the investment community and other stakeholders. The Company’s Corporate Disclosure Policy provides guidance to the Board, Management and employees to ensure accurate, consistent, high quality and fair disclosure of corporate information on a regular and timely basis.
6.2 There is a dedicated investor relations (IR) section on our corporate website at www.daibochi.com where annual reports, latest corporate presentations, corporate and governance matters, press releases and other information considered to be of interest to shareholders and the investment community are readily available. Investor relations’ contact information is also available in the IR section to enable shareholders/the investment community to reach the IR contact directly in the event of any enquiries.
6.3 In 2017, the Managing Director, ED and General Manager, Corporate and Finance met with analysts, fund managers, institutional shareholders and investors to provide updates on the performance, progress and developments of the Group. Investor briefings were also held on a quarterly basis in 2017 in Kuala Lumpur (city centre) in conjunction with the Group’s quarterly financial results. These platforms enable the EDs and senior management to interact with shareholders, investment community and analysts to understand their views, gather feedback and address key concerns.
7. Conduct of General Meetings
- 7.1 The AGM remains the principal forum for dialogue with shareholders as it affords them the opportunity to raise questions and seek clarifications on the Group’s operations, performance, strategies and latest development. The Company’s general meetings have always been held in the Melaka city centre to facilitate greater shareholder participation.
7.2 All the Directors were present in person to engage directly with the shareholders of the Company during the AGM and Extraordinary General Meeting (EGM) held on May 24, 2017. At the AGM, the Managing Director gave a presentation to the members, featuring an overview of the Group’s business and products; operational highlights; incorporation of the Group’s new subsidiary: Daibochi Packaging (Myanmar) Company Limited; product innovations and 2016 financial performance. Mr. Low Geoff Jin Wei (ED) presented the Company’s response to questions submitted by MSWG for the benefit of the members. The Managing Director also addressed shareholders’ queries at the general meetings. The EA was present to provide professional and independent clarification on relevant issues and concerns. The Company’s advisors were present to advise the Board and assist with shareholders’ queries in relation to the corporate proposals at the EGM.
7.3 In order to promote greater transparency, voting of resolutions at the Company’s general meetings was conducted by poll and independent scrutineers were appointed to verify the results of the poll. The poll results were announced by the Company via Bursa LINK on the same day. The AGM minutes was also uploaded on the IR section of our Company’s corporate website at www.daibochi.com for the benefit of shareholders who were unable to attend the said meeting. Testament to the Board’s commitment towards good governance in our engagement with our shareholders, the Company was awarded the Merit Award for Best AGM (Market capitalisation less than RM1 billion) in 2017 by MSWG.
7.4 The notice of the 45th AGM scheduled to be held on June 8, 2018 is dated April 30, 2018 i.e. more than 28 days prior to the AGM in line with Practice 12.1 of the MCCG. This would enable the Company’s shareholders to participate effectively and make informed decisions as they would have had ample time to peruse the Annual Report and other documentation and appoint proxies to attend the AGM if they so wish.
PARAGRAPH 15.26(a) LISTING REQUIREMENTS:
Statement of Directors’ responsibility for preparing the financial statements
- 8. The Board is required to prepare financial statements for each financial year in accordance with the Companies Act 2016. In this regard, the Directors have responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Group and the Company.
- 8.1 The financial statements have been made out in accordance with the Financial Reporting Standards and give a true and fair view of the state of affairs of the Group and Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year.
8.2 In preparing the financial statements, the Directors have:
• selected suitable accounting policies and applied them consistently;
• made judgements and estimates that are reasonable and prudent;
• ensured that all Financial Reporting Standards have been followed; and
• prepared the financial statements on a going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and Company have adequate resources to continue in operational existence for the foreseeable future.
8.3 The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard the assets of the Group to prevent and detect fraud and other irregularities.
The Board is satisfied that to the best of its knowledge, the Company is generally in compliance with the Listing Requirements and has applied the MCCG Practices relevant/applicable to the Company (except for Practices 4.5 and 7.2) for the financial year ended December 31, 2017. The Board has also attempted to provide reasonable explanations on the departures from the said Practices. Moving forward, the Board will continue with its efforts to enhance the Group’s corporate governance standards.
This Corporate Governance Overview Statement and the CG Report were approved by the Board of Directors on April 4, 2018.
Additional Compliance Information
(a) Utilisation of proceeds
The Company did not implement any fund raising exercise during the financial year.
(b) Audit and Non-Audit Fees
The amount of audit and non-audit fees paid or payable to the external auditors of the Company or its subsidiaries for services rendered for the financial year are as follows:
(c) Material contracts involving Directors and major shareholders’ interests Other than the related party transactions disclosed in this Annual Report, there were no material contracts entered into by the Company or its subsidiaries during the financial year which involved the interests of Directors or major shareholders.
REPORTS AND CIRCULARS
Kompleks Daibochi Plastic
Lot 3 & 7, Air Keroh Industrial Estate, Phase IV,
75450 Melaka, Malaysia.
T: +606 231 9779
F: +606 232 8988
Daibochi Berhad (12994-W). All Rights Reserved.