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BOARD CHARTER

POLICY ON CORPORATE GOVERNANCE OF PELANGI PUBLISHING GROUP BHD

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.


PURPOSE

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.


PRINCIPLE STATEMENT

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 2012”). 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.


Board Membership

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 2012 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 2012 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. (Refer 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 Mr Sum Kown Cheek. The Board is aware that it is not compliance with the best practices of the MCCG 2012 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 Mr 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:

  1. Reviewing and adopting a strategic plan for the Group, with objectivity and has taken into account all appropriate considerations;
  2. Ensuring the Group’s long term strategic plans promote sustainability, with attention to the aspects of environmental, social and governance (ESG);
  3. Overseeing the conduct of the Group’s business to determine whether the business is being properly managed. The Board also ensures measurements are in place against which management’s performance can be assessed;
  4. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures;
  5. Establishing a corporate culture which engenders ethical conduct that is being practiced across the Group (Summary of the Code of Conduct is set out on the corporate website)
  6. Succession planning, by ensuring appointed senior management positions are of sufficient calibre and programmes are in place for orderly succession of senior management;
  7. Developing and implementing effective shareholder communications policy for the Group. This includes ensuring feedback from all stakeholders are being considered when making business decisions.
  8. Reviewing the adequacy and the integrity of the management information and internal controls system of the Group
  9. Reviewing, adopting and implementing appropriate corporate disclosure policies and procedures (Refer Appendix E)
  10. All duties outlined in Schedule of Matters Reserved to the Board (Refer Appendix A)

Company Secretary

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:

  1. Statutory duties as specified under the Companies Act, 1965 and MMLR;
  2. Attending Board and Board Committee meetings and ensuring that the Board meetings are properly convened and proceedings are properly recorded;
  3. Ensuring timely communication of Board level decisions to Management;
  4. Ensuring that all appointments to the Board and Committees are properly made;
  5. Maintaining records for the purposes of meeting statutory obligations;
  6. Facilitating the provision of information as may be requested by the Directors from time to time;
  7. Supporting the Board in ensuring adherence to Board policies and procedures.

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.


Board Meetings

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

Nomination Committee

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.

Please refer to Appendix C for Terms of Reference of Nomination Committee.


Directors’ Training

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 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. (Refer Appendix G)

Please refer to Appendix D for Terms of Reference of Remuneration Committee.


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

Financial Reporting

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:

  • Ensured that all applicable accounting standards and the Listing Requirements of Bursa Securities have been applied and followed consistently;
  • Made reasonable and prudent judgments and estimates; and
  • Prepared financial statements on the going concern basis, having made adequate resources to continue its operations for the foreseeable future.

Audit Committee

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.

Please refer to Appendix B for Terms of Reference of Audit Committee.


Internal Control

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.


RELATIONSHIP WITH AUDITORS

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 Ernst & Young, 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.


CODE OF CONDUCT

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.


REVIEW OF THE BOARD CHARTER

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

 

APPENDIX A

SCHEDULE OF MATTERS RESERVED TO THE BOARD

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

  1. To review the Group’s strategic direction, including the approval of corporate exercises or restructuring plans
  2. To monitor the implementation of the strategic plan by management

2. Monitoring of Financial Performance

  1. To review, monitor and approve the Group’s financial statements
  2. To ensure proper procedures are put in place and that the financial statements (including quarterly/yearly announcements to Bursa Securities) of the Group are reviewed for integrity and approved for timely lodgement with, and/or release to, the various authorities and market
  3. To approve capital expenditure and/or disposal of capital items sanctioned over and above delegated levels i.e. amount involved exceeds a pre-determined threshold given to management
  4. To conduct a review of the Company’s funding requirements on a continuing basis, including significant treasury matters, approval of financing arrangements, cheques and other signatories
  5. To determine dividend policy and the amount, nature and timing of dividends to be paid

3. Internal Control and Risk Management

  1. To determine the company’s level of risk tolerance and actively identify, assess and monitor key business risks to safeguard shareholders’ investments and the company’s assets
  2. To appraise the company’s major risks and oversee that appropriate risk management and internal control procedures are in place
  3. To ensure proper implementation and review the Company’s internal controls system
  4. To select, appoint and terminate the external auditor
  5. Oversight of the Board Audit Committee’s evaluation of auditor’s performance and ongoing independence

4. Corporate Governance

  1. To establish and maintain corporate governance standards, including but not limited to the standards prescribed by the applicable laws from time to time

5. Succession Planning, Self-Evaluation and Appointments

  1. To assume the responsibility of ensuring a succession plan is in place including appointing, training, fixing the compensation of and, where appropriate, replacing senior management. The Board will work with the Nomination and Remuneration Committee on succession planning
  2. To review succession plans for the Group Managing Director (GMD)
  3. To appoint Directors to fill casual vacancies on the Board

6. Remuneration Review

  1. To review and approve Non-Executive Directors’ Board and Committee fees, subject to the Board fees approved by shareholders
  2. To determine the corporate goals and objectives relevant to the remuneration of the Group Managing Director (GMD) and evaluating the performance of the Group Managing Director (GMD) in light of these objectives
  3. To consider and approve the Group’s Remuneration Policy

7. Setting of Limit of Authorities Manual (LOAM)

  1. To review and approve the Limit of Authorities of the management

APPENDIX B

TERMS OF REFERENCE FOR AUDIT COMMITTEE

Membership

The Committee shall be appointed by the Board from amongst its Directors (except alternate directors) which fulfils the following requirements:-

  1. the audit committee must be composed of no fewer than 3 members of whom a majority of the audit committee must be independent directors;
  2. all members of the audit committee should be non-executive directors and financially literate; and
  3. at least one (1) member of the Committee;
    1. must be a member of the Malaysian Institute of Accountants; or
    2. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:
      • he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967; or
      • he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967.
    3. fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”)

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.

Procedure of the Audit Committee meetings

  1. The members of the Committee shall elect a Chairman from among their numbers who is an Independent Director. The Board shall, within three (3) months of a vacancy occurring in the chairmanship, elect a new Chairman from among their numbers who is an Independent Director.
  2. The Company Secretary shall be the Secretary to the Committee. The Secretary shall circulate minutes of the Committee meeting to all members of the Board.
  3. The Committee shall meet not less than four (4) times a year and report to the Board of Directors.
  4. Written notice of the meeting together with the agenda shall be given to the members of the Committee; the external auditors and any other person invited to attend the meeting, where applicable.
  5. The quorum for meetings of the Committee shall be two (2) members and shall comprise of independent directors.
  6. A representative of the external auditors, the head of internal audit and the Finance Manager should normally attend meetings. Any other Directors, employees and any other persons, where applicable, shall attend any particular Committee meeting only at the Committee’s invitation, specific to the relevant meeting.
  7. The Chairman shall convene a meeting of the Committee if requested to do so in writing by any member, the management, or the internal or external auditors to consider any matters within the scope and responsibilities of the Committee.
  8. 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
    1. the quorum of Committee is met;
    2. at the commencement of the meeting each Committee member acknowledges his presence thereof to all the other members taking part and such participation shall be deemed to be his presence in person;
    3. each of the Committee members taking part is able to be heard and hear each of the other members subject as hereinafter mentioned throughout the meeting; and
    4. the Committee members present at the commencement of the meeting do not leave the meeting by disconnecting the telephone, but the meeting shall be deemed to have been conducted validly notwithstanding that the telephone or electronic communication media is accidentally disconnected during the meeting and provided that no discussions or decisions should be made in respect of matters by the members during the disconnection and that if the telephone or electronic communication media cannot be re-connected at all, the meeting shall then be adjourned.
  9. The Committee should meet with the external auditors without executive board members present at least twice a year.

Rights of the Committee

The Committee shall:

  1. have explicit authority to investigate any matter within its term of reference;
  2. have the resources which are required to perform its duties;
  3. have full and unrestricted access to any information pertaining to the Company;
  4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity (if any);
  5. be able to obtain independent professional or other advice; and
  6. be able to convene meetings with external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

 Function of the Committee

The functions of the audit committee shall be:

  1. To review the following and report the same to the Board of Directors –
    1. with the external auditors, the audit plan;
    2. with the external auditors, his evaluation of the system of internal controls;
    3. with the external auditors, his audit report;
    4. the assistance given by the employees of the Company to the external auditor;
    5. the quarterly results and the year-end financial statements, prior to the approval by the Board of Directors, focusing particularly on:
      • changes in or the implementation of major accounting policy changes;
      • significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed ;
      • compliance with accounting standards and other legal requirements;
    6. any related party transactions and conflict of interest situation that may  arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;
    7. any letter of resignation including the written explanations of the resignation from the external auditors of the Company; and
    8. whether there is reason (supported by grounds) to believe that the Company's external auditors are not suitable for re-appointment.
  2. To do the following, in relation to the internal audit function:-
    1. review the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its works;
    2. review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;
    3. review any appraisal or assessment of the performance of members of the internal audit function;
    4. approve any appointment or termination of senior staff members of the internal audit function; and
    5. take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.
  3. To recommend the nomination of a person or persons as external auditors and the external audit fee.
  4. To carry out other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Company’s duties and responsibilities.
  5. To verify the criteria for allocation of options pursuant to a share scheme for employee.  

APPENDIX C

TERMS OF REFERENCE FOR NOMINATION COMMITTEE

1. COMPOSITION

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.

2. QUORUM

The quorum for each meeting shall be all members present.

3. CHAIRMAN

The members of the Nominating Committee shall elect a chairman from among their number who shall be a non-executive director.

4. MEETINGS

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.

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.

5. OBJECTIVES

The primary objective of the Nominating Committee is to ensure that the Directors of the Board bring characteristics to the Board, which provides 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.

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.

6. RESPONSIBILITIES

  1. Examine the size of the Board with a view to determine the number of Directors on the Board in relation to its effectiveness.
  2. Review annually its required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors should bring to the Board and disclose the same in the Annual Report.
  3. Recommend suitable orientation, educational and training programmes to continuously train and equip the existing and new Directors.
  4. Review the Board’s succession plan.                 
  5. Identifying the Directors who are due for re-election by rotation or re-appointment pursuant to the Company’s Articles of Association or other prevailing law. 
  6. Assess annually the performance and effectiveness of the Board as a whole, the committees of the Board and the contribution of each individual Director based on the process implemented by the Board.
  7. Assess and recommend to the Board, the continuation of terms of office of Independent Directors in compliance with MCCG 2012.
  8. Recommend to the Board, candidates for all directorship proposed by the Chief Executive Officers and, within the bounds of practicability, by any other senior executive or any director or shareholder to be filled by the shareholders or the Board and Directors to fill the seats of the Audit, Nominating, Remuneration and other Committees.

7. POWER

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.

APPENDIX D

TERMS OF REFERENCE FOR REMUNERATION COMMITTEE

1. COMPOSITION

The Remuneration Committee shall consist of not less than three (3) members, wholly or mainly shall comprise of Non-Executive 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.

2. QUORUM

The quorum for each meeting shall be a majority of members present.

3. CHAIRMAN

The members of the Remuneration Committee shall elect a chairman from among their number who shall be a non-executive director.

4. MEETINGS

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.

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.

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.

5. OBJECTIVES

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.

6. RESPONSIBILITIES

  1. Recommend to the Board the remuneration of the Executive and Non-Executive Directors.
  2. Assist the Board in assessing the responsibility and commitment undertaken by the Board membership.
  3. Assist the Board in ensuring the remuneration of the directors reflects the responsibility and commitment of the director concerned.

7. POWER

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.

APPENDIX E

CORPORATE DISCLOSURE POLICY

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.

APPENDIX F

BOARD ASSESSMENT POLICY

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: -

  1. whether the person possesses the appropriate qualifications, knowledge, skills, experience, competence, diligence, character, honesty and integrity to competently discharge the duties of the role;
  2. whether the person has the appropriate qualification, training, skills, practical experience and commitment to effectively fulfill the role and responsibilities of the position and in the case of directors, having regard to their other commitments;
  3. whether the person has satisfactory past performance or expertise in the nature of the business being conducted;
  4. whether the person is or has been the subject or any proceedings of a disciplinary or criminal nature, or has been notified of any impending proceedings or of any investigations, which might lead to such proceedings;
  5. whether the person has contravened any provision made by or under any written law designed to protect members of the public against financial loss due to dishonesty, incompetence or malpractice;
  6. whether the person has contravened any of the requirements and standards of a regulatory body, professional body, government or its agencies;
  7. whether the person, or any business in which he has a controlling interest or exercises significant influence, has been investigated, disciplined, suspended or reprimanded by a regulatory or professional body, a court or tribunal, whether publicly or privately;
  8. whether the person has been engaged in any business practices which are deceitful, oppressive or otherwise improper (whether unlawful or not), or which otherwise reflect discredit on his professional conduct;
  9. whether the person has been dismissed, asked to resign or have resigned from employment or from a position of trust, fiduciary appointment or similar position because of questions about his honesty and integrity;
  10. whether the person has been associated, in ownership or management capacity, with a company, partnership or other business association that has been refused registration, authorization, membership or a license to conduct any trade, business or profession, or has had that registration, authorization, membership or license revoked, withdrawn or terminated.
  11. whether the person has held a position of responsibility in the management of a business that has gone into receivership, insolvency, or involuntary liquidation while the person was connected with that business;
  12. whether the person has been a director of, or directly concerned in the management of, any corporation which is being or has been wound up by a court or other authority competent to do so within or outside Malaysia, or of any licensed institution, the license of which has been revoked under any written law;
  13. whether the person has failed to effectively addressed any significant business conduct issues and has ensured that a sound framework was implemented to promote the responsible and fair treatment of consumers;
  14. whether, in the past, the person has acted unfairly or dishonestly in his dealings with his customers, employer, auditors and regulatory authorities;
  15. whether the person has at any time shown a strong objection or lack of willingness to cooperate with regulatory authorities and failure to comply with legal, regulatory and professional requirements and standards, including compliance with tax requirements and obligations;
  16. whether the person has contributed significantly to the failure of an organization or a business unit;
  17. whether the person has at any time shown strong objection or a lack of willingness to maintain effective internal control systems and risk management practices;
  18. whether the person is free from any business or other relationship which could materially pose a conflict of interest or interfere with the exercise of his judgment when acting in the capacity of a key management position which would be disadvantageous to the Company or the Company’s interest.
  19. whether the person has acted in a manner which may cast doubt on his fitness to hold the position or acted in blatant disregard for proper professional conduct, especially in dealings with participants, claimants and customers;
  20. whether the person has been and will be able to fulfil his financial obligations, whether in Malaysia or elsewhere, as and when they fall due; and
  21. whether the person has been the subject of a judgment debt, which is unsatisfied, either in whole or in part, whether in Malaysia or elsewhere.

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:

  1. assessed by the Nominating Committee/Board of Directors; and
  2. reassessed at any time whenever the Nominating Committee becomes aware of information that may materially compromise a breach in this Policy.

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 :-

  • Individual board members’ understanding of the group’s mission and strategic plan;
  • Board members’ understanding and knowledge of the company’s business ;
  • Readiness to ask management probing questions or interrogate management when required ; and
  • Particular knowledge that board members bring to add value to the company.

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 :-

  • Determine the key functions and responsibilities of the board, the various committees and individual directors. Identify the key performance indicators for directors in order for effective and meaningful evaluations to take place ;
  • Agree on criteria to be used for evaluations and ensure all directors are informed that they will be evaluated. These criteria should reflect the company’s current and expected position in the market. Each director should be evaluated on the right mix of skills, experience and knowledge relevant to the company ;
  • Perform evaluation based on the criteria collectively agreed by all Directors. The results thereof should be explained to the directors, allowing them to know their standing;
  • Take action on the outcome of evaluation by recommending remedial measures pertaining to areas of governance where the board has not done well.
  • Recommend to restructure the board and its committees , including their functions, where they have been deemed ineffective;
  • Implement a training and development plan to enhance each director’s performances ; and
  • Summarise the performance evaluation process and report to the board.

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:-

  1. position and role of the key responsible person in the Company;
  2. materiality of the breach;
  3. elapsed time since the breach;
  4. repetition or duration of the behaviour that resulted in the breach; and
  5. potential risks posed to the Company.
  6. 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.

APPENDIX G

BOARD REMUNERATION POLICY

1. INTRODUCTION

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 Numeration 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 Winning Organisation Strategy. The remuneration strategy reflects the competitive nature of PPG’s operation, recognising the need to attract, motivate and retain high quality and calibre personnel. Executive Directors who are full times employees of the Company receive no additional compensation and fees for serve as a Director.

    (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.

4. REPORTING

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.