The Board of Directors (“the Board”) of Pelangi Publishing Group Bhd (“PPG”) remains committed to ensure that the highest standards of corporate governance are practiced throughout PPG and its subsidiary companies (“the Group”). It continues to be fully accountable to the shareholders and stakeholders, and will be bound to continually enhance the level of corporate governance in the management of the Group’s business, its financial performance for the achievement of business profitability, preservation of long term shareholder value and the protection of shareholders’ interests, without failing to take into account the interests of other stakeholders.
Notwithstanding the Group’s structure, policies, procedures and practices that are set, PPG is still open to be reviewed for enhancement and improvement. The ultimate aim of the Board is to secure all principles and objectives to ensure transparency of management to parties who have interest in the Group.
The Board also maintains a strong leadership in the organisation to ensure efficiency, integrity, honesty and responsibility for the ethical management of the Group and the maintenance of good corporate values.
The Board Charter outlines the role, functions, composition, operation and processes of the Board. It also seeks to ensure all Board members are aware of their duties and responsibilities as Board members. The Board Charter also aims to outline the Board’s long term strategic intent of PPG.
The Board is pleased to report to the shareholders that the Group has applied the Principles of Corporate Governance and Best Practices contained in the Malaysian Code on Corporate Governance (“MCCG 2017”). The manner and extent of compliance are stated as follows:-
SECTION 1: THE BOARD OF DIRECTORS
Composition of the Board
PPG is in compliance with the Main Market Listing Requirements of Bursa Securities which require that at least two (2) directors or one-third (1/3) of the total number of Directors, whichever is higher, to be Independent Directors.
The Company recognises the contribution of Non-Executive Directors as equal Board members to the development of the Group’s strategy as well as their role in representing the interests of public shareholders and providing a balanced and independent view to the Board. No individual or group of individuals dominates the Board’s decision making and the number of directors reflects fairly the interest of the shareholders.
Board Balance and Board Effectiveness
All Board members are individuals of calibre and credibility. The composition of the Board not only reflects the broad range of experience, skills and knowledge required to successfully direct and supervise the Group’s business activities, but also the importance of independence in decision-making at the Board level.
There is also a balance in the Board because of the presence of Independent Non-Executive Directors. These Independent Non-Executive Directors are independent of the management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement. They have the capability to ensure that the strategies proposed by the Management are fully deliberated and examined in the long-term interest of the Group, as well as the shareholders, employees, customers, suppliers and the many communities in which the Group conducts its businesses.
The Nomination Committee constantly reviews the core competencies and experience of the Directors in order to enhance the Directors’ participation in the Board to suit the ever-changing standards of corporate governance. (The Board Diversity Policy is Stated in Appendix H)
The Board considers the appointment of new director upon recommendation from the Nomination Committee. In making these recommendations, the Nomination Committee will consider the skills, knowledge, expertise and experience, professionalism, integrity and their ability to discharge such responsibilities/functions as expected from independent non-executive directors. Any new director so appointed shall be subject to re-election at the next annual general meeting (“AGM”) to be held immediately following the appointment.
The PPG's Articles of Association require all Directors to retire from office at least once in three (3) years and the retiring Directors are eligible for re-election at the AGM. Directors who are appointed by the Board during the year are subject to re-election at the next AGM following their appointments.
MCCG 2017 recommends the tenure of an independent director not to exceed a cumulative term of nine years. Upon completion of the nine years, an independent director may continue to serve on the board subject to the director’s re-designation as a non-independent director. The Board must justify and seek shareholders’ approval in the event it retains as an independent director, a person who has served in that capacity for more than nine years.
MCCG 2017 recommends that if the chairman is not an independent director, then the Board should comprise a majority of independent directors to ensure balance of power and authority on the board. The Board (through the Nominating Committee) shall undertake an annual assessment of the independence of the independent directors. (The Board Assessment Policy is Stated in Appendix F)
New Directorship at Other Organisation
All Board members shall notify the Chairman of the Board before accepting any new directorships in any other organisation. Similarly, the Chairman of the Board shall also do likewise before taking up any additional appointment of directorships. The notification shall include an indication of time commitment required under the new appointment.
Roles and Responsibilities of the Board
The roles of Chairman and Group Managing Director are currently held by Datuk Sum Kown Cheek. The Board is aware that it is not compliance with the best practices of the MCCG 2017 on the separation of the roles of the Chairman and GMD.
However, The Board considers this combined position to be in the best interests of the Group in view of Datuk Sum’s entrepreneurship, business acumen and vast experience in the publishing industry. The presence of the independent directors, though not forming a majority of the Board members, is sufficient to provide the necessary checks and balances on the decision making process of the Board. The significant contributions of the independent directors in the decision making process is evidenced in their participation as members of the various committees of the Board.
Many of the responsibilities of the Board are delegated to the management. Independence from the management of the Group is a key principle to the effective functioning of the Board. The Chairman of the Board is responsible for overall management of Board activities and ensuring that the Board discharges its previously defined responsibilities.
Roles and Responsibilities of the Chairman/Group MD
The Chairman/GMD will chair all Board meetings and general meetings for the Company. The Chairman/GMD is responsible for formulating the Board’s strategic direction and planning process. Assisted by the Executive Directors and Senior Management team, he also holds primary executive responsibilities for the Group’s business performance and strategic plans, in accordance with the strategies and policies approved by the Board. He brings material and other relevant matters to the Board, for discussion or constructive debates and decision makings.
Roles and Responsibilities of the Board
The Board assumes, amongst others, the following roles and responsibilities:
The Board is supported by the Company Secretary who facilitates overall compliance with the MMLR and Companies Act, 1965 and other relevant laws and regulations. In performing this duty, the Company Secretary carries out, among others, the following tasks:
Supply of Information
The Directors are provided with an agenda and a compilation of Board papers prior to the due date of each Board Meeting.
At every Board Meeting and at any time at all, members of the senior management make themselves available to brief the Board on any specific matter essentially to assist the Directors in undertaking their duties for the Group. The Board also leverages on information technology for effective dissemination of information, making information such as Board Charter, Rights of Shareholders and Annual Reports publicly accessible on our corporate website;
All Directors have full and unrestricted access to all information of the Group, and to the advice and services of the Company Secretary who is responsible for ensuring that Board Meeting procedures are adhered to and that applicable rules and regulations are complied with. The Board assumes full responsibility in ensuring that the appointed Company Secretary is capable in discharging its duties. The Board has the liberty to seek external independent professional advice if so required.
The Board shall conduct at least four (4) scheduled meetings a year. Additional Board Meetings are held as and when required. When it is not possible to hold any meeting, a circular resolution will be passed by the Board.
Reasonable notice of meetings and the business to be considered shall be given to members of the Board. The proceedings of the Board will be governed by the Company’s Articles of Association. The Chairman, at his discretion, may invite the senior management or other senior executives or professional advisers to attend and to be heard at the Board meetings.
Appointments of the Board and Re-election
The Board has established a Nomination Committee which is responsible for recommending and nominating new Directors for appointment by the Board.
The Nomination Committee should meet not less than once a year. The primary objectives of the Nomination Committee are to ensure that the Directors bring characteristics to the Board, which provide a required mix of responsibilities, skills and experience. The Nomination Committee will also assist the Board in reviewing the appropriate balance and size of Non-Executive participation on an annual basis. The Nomination Committee will also establish procedures and processes for the annual assessment of the effectiveness of the Board as a whole, the Committee of the Board and contribution of each individual Director.
The Committee has full and unrestricted access to the Company's records, properties and personnel. The Nomination Committee may use the services of professional recruitment firms to source for the right candidate for the Directorship.
(Terms of Reference for Nomination Committee is Stated in Appendix C)
The Group acknowledges the fact that continuous education is vital for the Board members to gain insight into the state of economy, technological advances in our core business, latest regulatory developments and management strategies. Therefore, the Directors are encouraged to evaluate their own training needs on a continuous process and to determine the relevant programmes, seminars and briefings that would enhance their knowledge to enable the Directors to discharge their responsibilities more effectively.
SECTION 2: DIRECTORS’ REMUNERATION
Remuneration Policy and Procedure
The Board has established a Remuneration Committee which is responsible to review and recommend to the Board on the remuneration of the Executive Directors, according to the level of performance of the Executive Directors. The Remuneration Committee was formed on 24 May 2004.
The remuneration of Executive Directors has been structured based on two important factors, i.e. the individual and Group performance. The Remuneration Committee as a whole determines the remuneration package of the Executive and Non-Executive Directors. The individuals themselves abstain from discussion of their own remuneration. (The Board Remuneration Policy is Stated in Appendix G)
The Remuneration Committee comprises of two (2) Independent Non-Executive Directors and one (1) Executive Chairman cum Managing Director. The Remuneration Committee should meet not less than once a year. The Committee has full and unrestricted access to the Company’s records, properties and personnel.
(Terms of Reference for Remuneration Committee is Stated in Appendix D)
SECTION 3: SHAREHOLDERS
Annual General Meeting
The Annual General Meeting is the principal forum for dialogue with shareholders. The shareholders are encouraged to participate in the question and answer session. Notice of the Annual General Meeting and Annual Reports are sent out to shareholders at least 21 days before the date of the meeting.
Besides the usual agenda for the Annual General Meeting, the Board provided opportunities for the shareholders to raise questions pertaining to the business activities of the Group. All Directors are available to provide response to the questions raised by the shareholders during the meeting, and will also make recommendation on whether to carry out poll voting at the Company’s Annual General Meetings.
For re-election of Directors, the Board ensures that all relevant information regarding Directors who are retiring and who are willing to serve if re-elected is disclosed through the notice of meetings.
Items of special business included in the notice of the meeting will be accompanied by an explanatory statement to facilitate a full understanding and evaluation of the issues involved.
SECTION 4: ACCOUNTABILITY AND AUDIT
The Board is responsible to ensure that the financial statements are prepared in accordance with the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.
In preparing the annual financial statements and quarterly announcements to shareholders, the Board has:
The Audit Committee assists the Board in scrutinising the financial reports to ensure accuracy, completeness and adequacy of information before recommending to the Board for adoption.
(Terms of Reference for Audit Committee is Stated in Appendix B)
The Board maintains a sound internal control framework to safeguard the shareholders’ investment in the Group. The Statement on Internal Control furnished in Annual Reports provides an overview of the state of internal control within the Group.
With the Internal Audit
The Group has outsourced the internal audit function to an independent service provider. The Group’s Internal Audit reports directly to the Audit Committee. The Group’s Internal Audit performs its functions with impartiality, proficiency and due professional care. It undertakes regular monitoring of the Group’s key controls and procedures, which is an integral part of the Group’s system of internal control. The Group’s Internal Audit also determines the company’s level of risk tolerance and actively identifies, assess and monitor key business risks to safeguard shareholders’ investments and company’s assets.
Draft audit reports prepared by the Internal Audit are first circulated to the management i.e. the heads of departments for deliberation before necessary corrective actions are adopted by the management.
With the External Auditors
The Group through the Audit Committee has established a transparent and good working relationship with its External Auditors. The External Auditors, Messrs SJ Grant Thornton, have continued to highlight to the Group their key findings and matters that require the Committee’s attention with respect to each year’s audit on the statutory financial statement. The Audit Committee continuously reviews and monitors the suitability of its External Auditors. The role of the Audit Committee in relation to the external auditors is outlined in the Audit Committee Report in the Annual Report. (The Auditor Assessment Policy is Stated in Appendix I)
The Board observes the Company Directors’ Code of Ethics established by the Companies Commission of Malaysia.
The Board also aims to establish a corporate culture which engenders ethical conduct that permeates throughout the company, through a set of Code of Conduct, to be adhered by all individuals employed by the Group.
The Code of Conduct is a guide to assist the Group’s Directors and all levels of employees in living up to the Group’s high ethical business standards, and provides guidance on the way employees should conduct themselves when dealing with other parties doing business with the Group. It also sets out and identifies the appropriate communication and feedback channels, which facilitate whistle-blowing.
A summary of the Code of Conduct is available on the corporate website.
The Board Charter has been adopted by the Board on 22 January 2014. Any subsequent amendments to the Board Charter must be approved by the Board.
The Board Charter will be reviewed periodically by the Board, in accordance with the needs of the Group and any new regulations that may have an impact on the discharge of the Board’s duties and responsibilities.
Datuk Sum Kown Cheek
Executive Chairman and Managing Director
The following are matters which are specifically reserved for the Board and they constitute the key responsibilities of the Board:
1. Strategy Setting, Implementation and Supervisory
2. Monitoring of Financial Performance
3. Internal Control and Risk Management
4. Corporate Governance
5. Succession Planning, Self-Evaluation and Appointments
6. Remuneration Review
7. Setting of Limit of Authorities Manual (LOAM)
The Committee shall be appointed by the Board from amongst its Directors (except alternate directors) which fulfils the following requirements:-
The Board shall, within three (3) months of a vacancy occurring in the Committee which result in the number of members reduced to below three (3), appoint such number of new members as may be required to make up the minimum number of three (3) members.
The Nominating Committee shall review the term of office and performance of the Committee and each of its members annually.
Role and responsibilities of the Committee Chairman
The roles of the Committee Chairman are as follows:-
Procedure of the Audit Committee meetings
Rights of the Committee
The Committee shall:
Function of the Committee
The functions of the audit committee shall be:
The Nominating Committee shall consist of not less than two (2) members. The Nominating Committee shall comprise exclusively Non-Executive Directors with a majority of Independent Directors.
Members of the Nominating Committee shall be appointed by the Directors among their members at a Board Meeting or via a Directors’ Circular Resolution in writing.
Members of the Nominating Committee may relinquish their membership in the Committee with prior written notice to the Company Secretary and may continue to serve as Director of the Company.
The Nominating Committee was set up on the 18 August 2004.
Membership of the Nominating Committee should appear in the Directors’ Report.
The quorum for each meeting shall be all members present.
The members of the Nominating Committee shall elect a chairman who is a Senior Independent Director or Independent director.
The meetings shall be held not less than once a year. A member may at any time and the Secretary shall on the requisition of a Director, summon a meeting of the Nominating Committee.
Questions arising at any meeting of Nominating Committee shall be decided by a majority of votes and a determination by a majority of members shall for all purposes be deemed a determination of the Nominating Committee. Where necessary and appropriate, any decision of the Nominating Committee can also be made or passed by way of a written circular resolution.
In the case of an equality of votes the chairman of the meeting shall have a second or casting vote PROVIDED THAT where two (2) members form a quorum, the chairman of the meeting at which only such a quorum is present, or at which only two members are competent to vote on the question at issue, shall not have a casting vote.
The Company Secretary shall be the Secretary of the Nominating Committee. The Secretary is responsible for sending out notices of the meetings and preparing and keeping minutes of meetings. The Minutes of the Committee meeting shall be extended to all the members of the Board of Directors. The Committee shall record its conclusions in discharging its duties and responsibilities.
A meeting may be convened using telephone and/or the contemporaneous linking together by telephone, other media telecommunication or such other electronic communication media of a number of the Committee members being not less than the quorum shall be deemed to constitute a meeting of the Committee wherever in the world they are, as long as
The primary objective of the Nominating Committee is to ensure that the Directors of the Board bring character to the Board which should provide a required mix of responsibilities, skills and experience. The Nominating Committee will also assist the Board in reviewing on an annual basis the appropriate balance and size of non-executive participation and in establishing procedures and processes towards an annual assessment of the effectiveness of the Board as a whole, the Committees of the Board and contribution of each individual Director.
Where a vacancy exists or when it is considered that the Board would benefit from the services of a new Executive Director with particular skills, the Nominating Committee selects one or more candidates with the appropriate expertise and experience.
In carrying out its duties and responsibilities, the Nominating Committee will in principle have full, free and unrestricted access to the Company’s records, properties and personnel. The Nominating Committee may use the services of professional recruitment firms to source for the right candidate for directorship of sought independent professional advice.
The Remuneration Committee shall consist of not less than three (3) members, Non-Executive Directors with a majority of which shall comprise Independent Directors.
Members of the Remuneration Committee shall be appointed by the Directors among their members at a Board Meeting or via a Directors’ Circular Resolution in writing.
Members of the Remuneration Committee may relinquish their membership in the Committee with prior written notice to the Company Secretary and may continue to serve as Director of the Company.
The Remuneration Committee was set up on the 24 May 2004.
Membership of the Remuneration Committee should appear in the Directors’ Report.
The quorum for each meeting shall be a majority of members present.
The members of the Remuneration Committee shall elect a chairman from among their number who shall be an Independent Director.
The meetings shall be held not less than once a year. A member may at any time and the Secretary shall on the requisition of a member, summon a meeting of the Remuneration Committee.
Questions arising at any meeting of Remuneration Committee shall be decided by a majority of votes and a determination by a majority of members shall for all purposes be deemed a determination of the Remuneration Committee. Where necessary and appropriate, any decision of the Remuneration Committee can also be made or passed by way of a written circular resolution.
In the case of an equality of votes the chairman of the meeting shall have a second or casting vote PROVIDED THAT where two (2) members form a quorum, the chairman of the meeting at which only such a quorum is present, or at which only two members are competent to vote on the question at issue, shall have a casting vote.
A meeting may be convened using telephone and/or the contemporaneous linking together by telephone or such other electronic communication media of a number of the Committee members being not less than the quorum shall be deemed to constitute a meeting of the Committee wherever in the world they are, as long as
Executive Director shall abstain from deliberations and voting on decisions in respect of their remuneration package. The remuneration and entitlements of the Non-Executive Directors, including the Non-Executive Chairman should be a matter to be decided by the Board of Directors as a whole with the Director concerned abstaining from deliberations and voting on decisions in respect of his individual remuneration.
The Company Secretary shall be the Secretary of the Remuneration Committee. The Secretary is responsible for sending out notices of the meetings and preparing and keeping minutes of meetings. The Minutes of the Committee meeting shall be extended to all the members of the Board of Directors. The Committee shall record its conclusions in discharging its duties and responsibilities.
The primary objective of the Remuneration Committee is to act as a committee of the full Board to assist in assessing the remuneration of the directors reflecting the responsibility and commitment undertaken by the Board membership.
In carrying out its duties and responsibilities, the Remuneration Committee will in principle have full, free and unrestricted access to the Company’s records, properties and personnel. The Remuneration Committee may obtain the advice of external consultants on the appropriateness of remuneration package.
The Board Risk Management Committee shall consist of three (3) members and shall exclusively comprise Non-Executive Directors with a majority of Independent Directors.
Members of the Board Risk Management Committee shall be appointed by the Directors amongst their number at a Board Meeting or via a Directors’ Circular Resolution in writing.
Members of the Board Risk Management Committee may relinquish their membership in the Committee with prior written notice to the Company Secretary and may continue to serve as Director of the Company.
The Board Risk Management Committee is set up on 18 September 2017.
The quorum for each meeting shall be a majority of members present.
Members of the Board Risk Management Committee shall elect a Chairman from among their number who shall be an Independent Director.
Meetings of the Board Risk Management Committee shall be held at least twice a year and at such other time (s) as it deems necessary to fulfil its responsibilities. A member may at any time and the Secretary shall on the requisition of a Director/member, summon a meeting of the Board Risk Management Committee. The Committee may invite any personnel and/or independent parties to attend the meeting.
Questions arising at any meeting of the Board Risk Management Committee shall be decided by a majority of votes. A determination by a majority of members shall for all purposes be deemed a determination of the Board Risk Management Committee. Where necessary and appropriate, any decision of the Board Risk Management Committee can also be made or passed by all members by way of a written circular resolution.
In the case of an equality of votes, the Chairman of the meeting shall have a second or casting vote PROVIDED THAT where two (2) members form a quorum, the Chairman of the meeting at which only such a quorum is present, or at which only two members are competent to vote on the question at issue, shall not have a casting vote.
A meeting may be convened using telephone and/or the contemporaneous linking together by telephone, other media telecommunication or such other electronic communication media of a number of the Committee members being not less than the quorum shall be deemed to constitute a meeting of the Committee wherever in the world they are, as long as
The Company Secretary shall be the Secretary of the Board Risk Management Committee. The Secretary is responsible for sending out notices of and preparing and keeping minutes of meetings. The minutes of the Committee meeting shall be extended to all the Directors. The Committee shall record its conclusions in discharging its duties and responsibilities.
5. CIRCULAR RESOLUTION
A resolution in writing signed by a majority of all members shall be valid and effectual as if it had been passed at a meeting of the Risk management Committee. All such resolutions shall be described as “Board RMC Circular Resolutions” and shall be forwarded or otherwise delivered to the Company Secretary without delay and shall be recorded by the Company Secretary in the minutes book. Any such resolution may consist of several documents in the like form, each signed by one or more members. The expressions “in writing” or “signed” include approval by legible confirmed transmission by facsimile, telex, cable, telegram, email, or other forms of electronic communications.
The primary objectives of the Board Risk Management Committee are as follows:-
To do the followings and report the same to the Board of Directors: -
In carrying out its duties and responsibilities, the Board Risk Management Committee will in principle have full, free and unrestricted access to the Company’s records, properties and personnel. The Board Risk Management Committee may use the services of professional firms to carry out certain functions or seek independent professional advice. The Board Risk Management Committee shall make recommendations to the Board in respect of risk related matters which warrants the attention of the Board.
The terms of reference shall be reviewed from time to time to ensure that it reflects current best practice in corporate governance and risk management. Board’s approval is required for any changes in the term of reference.
Communication with Shareholders and Investors
The Board acknowledges the importance of an effective communication channel between the Board, stakeholders, institutional investors and the investing public at large to provide a clear and complete picture of the Group’s performance and position as much as possible. The company is fully committed in maintaining high standards in the dissemination of relevant and material information on the development of the Group in its commitment to maintain effective, comprehensive, timely and continuing disclosure. There has also been strong emphasis on the importance of timely and equitable dissemination of information. Disclosures of corporate proposals and/or financial results are made not only in compliance with Main Market Listing Requirement but also include additional items through media releases and are one on a voluntary basis. Whilst efforts are made to provide as much relevant and material information as possible to the shareholders and stakeholders, the Board is cognizant of the legal and regulatory framework governing the release of materials and sensitive information so as not to mislead the shareholders. Therefore, information that is price-sensitive or may be regarded as undisclosed material information about the Group, is not disclosed to any party until it is already in the public domain through disclosure. Investor information of the Company, the Annual Report, Board Charter and Code of Conduct can be accessed on the Company’s corporate website on www.pelangipublishing.com.
There are number of formal channels to account shareholders and stakeholders, particularly :-.
a) Annual Report
The Annual Report is the major channel of communication disclosing information not only on the Group’s business, financials and other key activities but also additional information such as strategies, operations, performance, challenges and its management. The Board places great importance on the content of the Annual Report to ensure the accuracy of the information as the Annual Report is a vital source of information for investors, shareholders and the general public. The contents of the Annual Report are continuously enhanced to take into account development, amongst others, corporate governance. The Board Annual Report Committee, chaired by Chairman, oversees the production of the Annual Report and reviews its contents before it is published. The complete printed version of the Annual Report is provided to all shareholders. The shareholders may also download the digital version of Annual Report from the Group’s corporate website on www.pelangipublishing.com.
b) Announcement to Bursa Securities
Announcement of quarterly financial results, circulars and various announcements are made via Bursa website in full compliance with regulatory authorities’ disclosure requirements. The same is also made available on Pelangi’s corporate website. Prior to its release, announcements intended for Bursa Securities are subject to review and approval by the Chairman or the Board, to ensure that the announcement fulfills the disclosure requirements as well as meets what is intended by management. Filings and announcements to Bursa Securities are available online at www.pelangipublishing.com.
c) Media Releases / Media Conference
Media Releases are provided to the media on all significant corporate developments and business initiatives to keep the investing community and shareholders updated on the Group’s developments. Media releases are subject to approval by the Chairman and whenever necessary, released to Bursa Securities to increase the visibility of media releases. Media Conferences have been arranged on some special occasions or some special projects communications.
d) Investor Relations
Investor relations is managed by the corporate communications department, who oversees most aspects of shareholder meetings, press conferences, investor relations sections of company websites, and company annual reports. Pelangi’s Investor relations efforts include scheduling engagement sessions with the investing community and is attended by Chairman / Group Managing Director. Such engagement sessions including conferences, newspaper interviews, press releases etc.
e) Company Corporate Website
All information on share price, financial reports, downloadable annual reports, stock exchange filings, presentations, financial calendar and ownership profile are posted on the Investor Relations section while media has its own dedicated section for media release.
1. APPOINTMENT OF DIRECTORS
Appointment of directors is a vital process as it determines the composition and quality of the board’s capacity and competencies. The formal and transparent procedures are to be established for the appointment of new directors to the board. The nominating committee should establish and recommend to the board clear and appropriate selection criteria for directorship and assess the suitability of potential candidates against the criteria set. The recommendation should be based on an annual review of the board’s required mix of skills and experiences, taking into account the current and future needs of the company. This review should be matched against the current composition of directors to identify any gaps. The existing board’s strength and weaknesses, its skill and experience gaps, its current age range and gender composition, and its aspirations for the future of the group should also be considered throughout the appointment process. The nominating committee should make comprehensive and independent assessment. In exercising objectivity in the assessment process, the committee should not be influenced by major controlling shareholders or the chairman/group managing director.
2. GUIDING PRINCIPLE AND SUITABILITY REQUIREMENTS
In determining whether a director is suitable, considerations may include, but not limited to, all or any combinations of, the person’s probity, personal integrity, reputation, competence, capability, financial integrity, as follows: -
3. ASSESSMENT OF DIRECTORS
The Nominating Committee must assess each person who is nominated as a candidate for Director and determine whether it is satisfied that the person is suitable to be and act as a Director by reference to this Policy. The appointment of the candidate as a Director is subject to the prior approval of shareholders.
Wherever possible, the appointment of the Directors must be:
4. PERFORMANCE EVALUATION
An evaluation shall be carried out by the Nominating Committee once every year, on the effectiveness of the board as a whole, the board committees and the contribution of each individual director.
Amongst the most important criteria for evaluating board performances are :-
5. EVALUATION PROCESS
A performance evaluation process of the board, its committees and individual directors with clear evaluation criteria should be established and communicated to all directors.
The following suggested steps to be taken in carrying out the evaluation process :-
6. BREACH OF THE POLICY
Non-compliance with suitability requirements of this Policy by any Director will be considered a “breach”.
A Director considered to be in breach will be provided an opportunity to submit additional information in support of his/her suitability as Director. The Nominating Committee in conjunction with Group Managing Director will consider the additional information before a final determination as to the Director’s suitability is made and a recommendation of remedial action is made.
The Board and Nominating Committee have the authority to exercise discretion in circumstances where there is evidence that a Director has breached the requirements of this Policy.
Where significant reliance is placed on information that is obtained from the person being assessed, and that information is material to the determination of the person’s suitability, the Nominating Committee are expected to take reasonable steps within permissible written laws to verify the information against independent sources.
In determining whether a person meets the suitability requirements, the considerations set out in this Policy should be assessed individually (according to their relative importance) as well as on cumulative basis. Failure to meet one indicator may not, on its own, necessarily mean failure to meet the suitability requirement. In exercising any discretion, the Nominating Committee must ensure that the objectives of this Policy are upheld. The discretion will be exercised, taking into account factors such as:-
The Nominating Committee should consider whether there have been material changes in the nature or scope of the responsibilities assumed by an individual which would call for higher standards of competence or judgement in order to properly perform the duties associated with the said position, or which may give rise to new conflicts that could impair the individual’s performance in the position.
The fact that a person may be limited financial means does not in itself, affect the person’s ability to satisfy the financial integrity criteria.
7. REVIEW OF THE POLICY
Nominating Committee will review the Policy periodically to ensure that it continues to remain relevant and appropriate.
The policy for Directors’ remuneration is to provide a remuneration package needed to attract, retain and motivate Directors of the quality required to manage the business of Pelangi Publishing Group Bhd. (“PPG”). The Company provides competitive remuneration and benefits necessary to attract and retain high quality Non-Executive Directors.
2. DIRECTORS’ REMUNERATION DETERMINANTS
The Board will determine the level of remuneration paid to Directors, taking into consideration the recommendation of the Remuneration Committee.
The level and make up of remuneration should be sufficient to attract and retain the Board members needed to run the Company successfully, but the Company should avoid paying more than necessary for this purpose.
The component parts of remuneration should be structured so as to link reward to corporate and individual performance. As for Independent Non-executive Directors, the level of remuneration should reflect the experience and level of responsibilities undertaken by the respective Independent Non-Executive Director Directors.
3. DIRECTORS’ REMUNERATION STRATEGY
(a) Executive Directors
The remuneration strategy for Executive Directors of PPG is to pay competitively and through the use of an integrated pay and benefits structure, to reward corporate and individual performance in order to contribute to the Company.
The remuneration strategy reflects the competitive nature of PPG’s operation, recognising the need to attract, motivate and retain high quality and calibre personnel.
(b) Non-Executive Directors
Non-Executive Directors will be paid directors’ fee. Additional allowance shall be paid based on their responsibilities in the Board and on the Committee and/or for any other special skills and expertise that bring to the Board. Any fee paid to an alternate Director, if any, shall be agreed between himself and Director nominating him and shall be paid out the remuneration of the latter.
Meeting allowances will be given to Director attend and present for the Board Meeting. Training related expenditure will be paid as to enable Directors to attend Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad (“Bursa Securities”). This is to enhance Directors’ skills through appropriate continuing programmes and life-long learning as to enable them effectively discharge his duties and promote active participation in the Board’s deliberation.
A formal and transparent procedure has been established by PPG for developing the policy on executive remuneration and for fixing the remuneration packages of individual Board members.
The Board should report to the shareholders on the Directors’ remuneration and this should be included in the annual report of the Company.
5. REVIEW OF DIRECTORS’ REMENURATION
Remuneration Committee (“RC”) shall review Directors’ remuneration on an annual basis as follow:
(a) Executive Directors
RC considers the market competitiveness, business results, experience and individual performance in evaluating the Executive Director’s remuneration.
(b) Non-Executive Directors
RC consider the experience, skills, and knowledge in discharging their responsibilities to the Board and their contribution to the effectiveness of the Board.
This Policy aims to set out the principles of Pelangi Publishing Group Bhd. (“PPG”) to maintain a Board with a diversity of directors.
This Policy pursue to record, more formally, the Company’s policy on board diversity and to the extent practicable, the Company will address the recommendations and commentary provided in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”).
2. PRINCIPLE AND OBJECTIVE
3. SCOPE ON BOARD DIVERSITY
The Board is of the view that it is important to promote boardroom diversity in term of gender, age, ethnicity, independence and skills and experience, the normal selection criteria based on an effective blend of competences, skills, extensive experience and knowledge of strengthen the Board should remain a priority. The Board would take into the consideration the following measures:
The Board also takes cognisant of the recommendation of the Malaysian Government to have at least 30% women as decision makers in corporate sector as promulgated by the Cabinet in 2011. This has then been highlighted again in the Corporate Governance Blueprint 2011 – Towards Excellence in Corporate Governance issued by the Securities Commission, Malaysia which stipulates a goal for women participation on boards to reach 30% by 2016. The Company will work towards to attract more women participant on the Board.
The Company is committed to provide a suitable working environment that is free from harassment and discrimination on the basis of gender, physical or mental state, ethnicity, nationality, religion, age or family status. The same principle is applied to the selection of potential candidates for appointment to the Board.
The Board is fully committed to promoting age diversity, valuing the contribution of its members regardless of age, and seek to eliminate age stereotyping and discrimination on age.
The Company does not set any specific target for the boardroom range diversity but will work towards having appropriate age diversity in the Board.
The Company does not fix age limit for its Directors given that such Directors are normally reputed and experienced in the corporate world and could continue to contribute to the Board in steering the Company.
To cope with the PPG’s businesses, we aspire to having a board of directors of different nationality or ethnic backgrounds who can contribute their knowledge and understanding of the environment.
The Board includes a balanced composition of Executive, Non-executive Directors and Independent Non-executive Directors so that there is a strong element of independence in the Board. The Independent Non-executive Directors shall be of sufficient calibre and standing for their views to carry weight.
The Board possesses a balance of skills appropriate for the requirements of the business of the Company. The Directors have a mix of finance, business, academic and management backgrounds that taken together provide the Company with considerable experience in a range of activities including varied industries, education, banking, investment, logistic and the professions.
4. MEASURABLE OBJECTIVE
5. MONITORING AND REPORTING
Pursuant to the Term of Reference of the Nomination Committee (NC), the NC is (among other things) responsible for:
The Nomination Committee will report to the Board on:
The Board has to, at least annually, assess:
6. PUBLICATION AND REVISION
A summary of this Policy, together with the measurable objective set for the implementation of this Policy will be included annually in the Corporate Governance Statement.
Any revisions to this policy as recommended by the NC will be submitted to the Board for consideration and approval.
This policy will be available on the Company’s website www.pelangipublishing.com for public information.
The Audit Committee (“AC or the Committee”) Pelangi Publishing Group Bhd (“PPG”) is responsible for assessing, reviewing and supervising the performance, suitability and independence of External Auditors. The objective of this External Auditors Assessment Policy (“the Policy”) is to outline the guidelines and procedures for the Committee to assess, monitor and review the External Auditors.
2. SELECTION AND APPOINTMENT PROCEDURE
The Board has delegated to the Committee the responsibility for the appointment, remuneration and removal of external auditor.
Pursuant to Section 172(2) of the Companies Act 1965, the Company shall at each annual general meeting appoint or re-appoint the external auditors of the Company, and the external auditors so appointed shall, hold office until the conclusion of the next annual general meeting of the Company.
The Committee will follow the following procedures for selection and appointment of new External Auditors, when they determine a need to change the External Auditors:
External Auditors must provide a fixed fee of quotation for its audit services. However, price will not be the sole determining factor in the selection of a preferred External Auditors. The Committee may delegate or seek the assistance of the Head of Finance to carry out items (a) to (c) above;
3. ASSESSMENT OF INDEPENDENCE
The External Auditors are precluded from providing any services that may impair their independence or conflict with their role as External Auditors.
In avoidance of doubt, the AC shall obtain a written assurance from the External Auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
4. NON-AUDIT ENGAGEMENT
The External Auditors can be engaged to perform non-audit engagement that are not, and are not perceived to be, in conflict with the role of the External Auditors. This excludes audit related work in compliance with statutory requirements.
The three (3) basic principles on the prohibition of non-audit engagement where External Auditors:
The External Auditors shall observe and comply with the By-Laws of the Malaysian Institute of Accountants in relation to the provision of non-audit engagement, which include the following:
All engagements of the External Auditors to provide non-audit services are subject to the approval/endorsement by the AC; and with expectation on the Management to obtain confirmation from the External Auditors on their independence which shall not be impaired by the provision of non-audit engagement.
5. ROTATION OF AUDIT PARTNER
The audit partner responsible for the External Audit of PPG and its Subsidiaries is subject to rotation at least every five (5) financial years.
6. ANNUAL REPORTING
The External Auditors will issue an annual audit planning memorandum for review and discussion with the Committee. And upon completion of annual audit, provide a management letter to the Committee upon completion of the annual audit.
6. ANNUAL PERFORMANCE ASSESSMENT
AC shall carry out annual assessment on the performance and may request the Head of Finance to join the assessment, on the suitability and independence of the External Auditors on the following areas:
8. REVIEW OF THE POLICY
AC will review the Policy periodically to ensure that it continues to remain relevant and appropriate.
Pelangi Publishing Group Bhd (“PPG or the Company”) and its subsidiaries (“the Group”) would in the ordinary course of business, enter into transactions of revenue or trading nature with a related party.
This policy is designed to ensure the related party transactions (“RPT”) are carried out in the ordinary course of business, are made at arm’s length and on normal commercial terms which are not more favourable to the related party or parties than those generally available to the public and are not on terms that are detrimental to the minority shareholders of PPG.
This policy also aims to comply with Part E, Paragraph 10.08 and 10.09 of the Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities” and other applicable laws.
The following are some of the main definitions provided by the Listing Requirements:
by the Company or its subsidiaries BUT excludes transaction entered into between the Company (or any of its wholly-owned subsidiaries) and its wholly-owned subsidiaries (Reference: Chapter 10 of the Listing Requirements);
4. POLICIES AND PROCEDURES
5. THRESHOLD FOR APPROVAL
The threshold for Recurrent Transactions will be determined by AC on a yearly basis subject to the provisions in the Listing Requirements and/or the Act, where necessary. Where any Director has an interest (direct or indirect) in any Recurrent Transactions, such Director shall abstain from deliberation and voting on the matter.
(a) Related Party Transaction (“RPT”)
The disclosure requirements of RPT as prescribed by the Listing Requirements are governed by percentage ratio threshold. In compliance to the Listing Requirements, PPG must:
If the percentage ratio for RPT is ≥ 5%, the Company must:
The independent adviser must, in relation to the transaction:
If the percentage ratio for the RPT is equal to or exceeds 25%, the Company must in addition to (i) above appoint a main adviser, who is a Principal Adviser approved by the SC.
The Principal Adviser must undertake the following:
PPG must also ensure that a director with interest, direct or indirect, must abstain from deliberation and voting on the relevant resolution in respect of the RPT at the Board meeting. In a general meeting to obtain shareholders’ approval, a director or major shareholder with any interest, direct or indirect, or person connected to them must not vote on the resolution approving the transaction.
PPG must ensure that any vote of shareholders taken at the general meeting on the resolution approving the transaction is taken on a poll.
(b) Recurrent Related Party Transaction (“RRPT”)
Paragraph 10.09 of the Listing Requirements states that a Company with an issued and paid-up capital of RM60 million and above, must immediately announce a RRPT if:
whichever is the higher.
Nevertheless, PPG may seek a mandate in respect of such RRPTs from the shareholders as long as the following conditions are met:
The mandate will, if approved by the shareholders at the annual general meeting (“AGM”), be subject to annual renewal and shall continue to be in force until the conclusion of the next AGM of the Company. Thereafter, the said mandate will lapse, unless renewed.
PPG is required to disclose the aggregate value of the RRPTs conducted pursuant to the shareholders’ mandate in the annual report, where a breakdown of the aggregate value of the RRPTs made during the financial year must be disclosed.
7. CONFLICT OF INTEREST
An employee must adhere to the highest standards of honest and ethical conduct. These include, but are not limited to, sensitivity to the existence of a conflict of interest or the appearance of a conflict of interest.
A conflict of interest exists when an employee’s personal interest interferes, or appears to interfere, in any way with the interests of the Company’s or its customers, or when an employee otherwise takes actions or has interest that may make it difficult to perform his or her Company work objectively and effectively. For example, a conflict of interest would arise if an employee, or a member of his or her family, receives improper personal benefits as a result of his/her position with the Company.
While not all-inclusive, the following examples of outside financial interests will serve to illustrate some of the types of activities that might cause conflicts of interest:
The key addressing conflicts of interest is full disclosure. Often, just disclosing the potential conflict to the Company is the only action required. If you believe you may have a potential conflict of interest, you must discuss the situation with you Manager.
8. PERIODIC REVIEW AND MODIFICATIONS
This policy shall be reviewed annually by the Board.
PPG reserves the right to modify or amend this policy at any times as it may deem necessary in order to align the policy with Listing Requirements, Companies Act 1965, Malaysia Code on Corporate Governance 2012 and any other applicable laws enforced at the time being.