board Charter

INTRODUCTION

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 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)

 

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 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:

  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 (The Corporate Disclosure Pilicy is Stated in Appendix E)

  10. All duties outlined in Schedule of Matters Reserved to the Board (The Schedule Of Matters Reserved to the Board is stated in 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.

(Terms of Reference for Nomination Committee is Stated in Appendix C)

 

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 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

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.

(Terms of Reference for Audit Committee is Stated in Appendix B)

 

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 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)

 

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

appendix g

Board Assessment Policy

appendix b

Terms of Reference for Audit Committee

appendix h

Board Remuneration Policy

appendix c

Terms of Reference for Nomination Committee

appendix i

Board Diversity Policy

appendix d

Terms of Reference for Remuneration Committee

appendix j

Auditor Assessment Policy

appendix e

Terms of Reference for Board Risk Management Committee

appendix k

RRPT & Conflict of Interest Policy

appendix f

Corporate Disclosure Policy