CORPORATE GOVERNANCE REPORT

Transcription

1 CORPORATE GOVERNANCE REPORT STOCK CODE 9288 COMPANY NAME FINANCIAL YEAR 30 JUNE 2018 OUTLINE SECTION A DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE Disclosures in this section are pursuant to Paragraph of Bursa Malaysia Listing Requirements. SECTION B DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PURSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA MALAYSIA Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures) of Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is only applicable for financial institutions or any or institutions that are listed on Exchange that are required to comply with above Guidelines. Definitions Except where context orwise requires, following definitions shall apply throughout this report AGM Annual General Meeting ARC The Audit & Risk Management Committee of Bonia BMSB Bursa Malaysia Securities Berhad Board The Board of Directors of Bonia Bonia or Company Bonia Corporation Berhad ( T) Bonia Group or Group Bonia Corporation Berhad and its subsidiaries CA2016 Companies Act 2016 CEO Chief Executive Officer MCCG Malaysian Code on Corporate Governance 2017 MMLR Main Market Listing Requirements of BMSB NRC The Nomination & Remuneration Committee of Bonia Page 1 of 38

2 SECTION A DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE Disclosures in this section are pursuant to Paragraph of Bursa Malaysia Listing Requirements. Every company is headed by a board, which assumes responsibility for company s leadership and is collectively responsible for meeting objectives and goals of company. Practice 1.1 The board should set company s strategic aims, ensure that necessary resources are in place for company to meet its objectives and review management performance. The board should set company s values and standards and ensure that its obligations to its shareholders and or stakeholders are understood and met. The roles and responsibilities of Board are stated in Company s Board Charter that is available on its website. The Board is to focus on governance and stewardship of business carried on by Group as a whole. With assistance of senior management, Board reviews and decide at its discretion strategy for Group from time to time, and monitor performance against those objectives in changing business environment. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 2 of 38

3 Every company is headed by a board, which assumes responsibility for company s leadership and is collectively responsible for meeting objectives and goals of company. Practice 1.2 A Chairman of board who is responsible for instilling good corporate governance s, leadership and effectiveness of board is appointed. During FY2018, Board was headed by Chiang Sang Sem, n Group Executive Chairman cum Chief Executive Director. He provided leadership and governance of Board so to create conditions for overall Board s and individual Director s effectiveness. He also ensured that key issues of Group were discussed or decided by Board in a timely manner. He provided adequate time for thorough discussion of critical and strategic issues during Board meetings. On 01 September 2018, Dato Mohamed Khadar Bin Merican assumed his role as Senior Independent Non-Executive Chairman of Company. He is acting as an independent counsellor, adviser and listener to members of Board. He takes full account of important issues facing by Group and concerns of all Directors, and ensures Board as a whole plays a full and constructive part in development and determination of Group s strategies and policies, and that Board decisions taken are in Group s best interests and fairly reflect Board s consensus. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 3 of 38

4 Every company is headed by a board, which assumes responsibility for company s leadership and is collectively responsible for meeting objectives and goals of company. Practice 1.3 The positions of Chairman and CEO are held by different individuals. During FY2018, Chiang Sang Sem was Group Executive Chairman cum CEO of Company whereas Group Managing Director position was held by a different person namely Datuk Chiang Heng Kieng. The Company d division of responsibility between Group Executive Chairman cum CEO and Group Managing Director. The responsibilities of Chairman should include leading Board in oversight of management, whilst Managing Director focused on businesses and dayto-day operation of Bonia Group and same are specified in Board Charter, which is available on Company s website under Corporate Governance section. On 01 September 2018 Chiang Sang Sem stepped down as Group Executive Chairman cum CEO and was re-designated as Founder cum Executive Director, Datuk Chiang Heng Kieng resigned as Group Managing Director and was re-designated as an Non-Independent Non-Executive Director Dato Mohamed Khadar Bin Merican took up role as Senior Independent Non-Executive Chairman and reafter, Chiang Sang Sem was appointed Group CEO to focus on dayto-day operation activities of Group on 02 October His new designation is Founder, Group CEO and Group Executive Director. Such splitting of roles is seen to enable CEO to focus on short-term priorities and Chairman to bring a longer term perspective. This also to ensure that Chair role is not cross over into performing management duties. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 4 of 38

5 Every company is headed by a board, which assumes responsibility for company s leadership and is collectively responsible for meeting objectives and goals of company. Practice 1.4 The board is supported by a suitably qualified and competent Company Secretary to provide sound governance advice, ensure adherence to rules and procedures, and advocate adoption of corporate governance best s. The Company Secretaries of Bonia namely Chong Chin Look, a member of MIA, Chok Kwee Wah, a member of MACS and Tan Kean Wai, a member of MAICSA, all are qualified to act under Section 235 of CA2016. The Company Secretaries are classified as officers of Company under CA2016. They serve as advisors to Board of Directors on matters of governance and ir duties as a director that include, inter alia, disclosure obligations, dealing with conflicts of interest, managing interests of shareholders and or stakeholders and dealing with applicable rules and regulations. They also become a communicator to regulatory authorities such as Suruhanjaya Syarikat Malaysia, BMSB, Securities Commission Malaysia and etc. The key responsibilities of Company Secretaries are advise Board on its roles and responsibilities manage board process understanding and assist Company complies with its statutory obligations organising performance reviews advise board on corporate governance matters The Company Secretaries constantly keep mselves abreast of latest changes or developments in regulatory framework and governance s through attendance of various training programmes. The training programmes attended by m are disclosed in Corporate Governance Overview Statement as contained in Annual Report 2018 of Company. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 5 of 38

6 Every company is headed by a board, which assumes responsibility for company s leadership and is collectively responsible for meeting objectives and goals of company. Practice 1.5 Directors receive meeting materials, which are complete and accurate within a reasonable period prior to meeting. Upon conclusion of meeting, minutes are circulated in a timely manner. Annual general meeting and meetings of Board and Board committees are pre-scheduled and confirmed by Board at beginning of each financial year to enable Directors to plan ir attendance. The Directors receive comprehensive meeting materials such as management reports and proposal papers in relation to agenda within a reasonable period prior to meetings to allow Directors sufficient time to review and consider matters to be discussed in meetings. Senior management or external advisors may be invited to join meetings to provide furr details or advises to Board or Board committees on matters to be deliberated. Minutes which serve as an evidence of proceedings of Board or Board committee meetings, are being circulated and confirmed by Board or Board Committees at next meeting. Thereafter, minutes are entered into Minutes Book of Company as permanent records. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 6 of 38

7 There is demarcation of responsibilities between board, board committees and management. There is clarity in authority of board, its committees and individual directors. Practice 2.1 The board has a board charter which is periodically reviewed and published on company s website. The board charter clearly identifies respective roles and responsibilities of board, board committees, individual directors and management; and issues and decisions reserved for board. The Board Charter that is available on Company s website, sets out Board s strategic intent and outlines roles and responsibilities, functions, operation and processes of Board, serves as a guidance to Board to ensure that its Board members are fully aware of ir roles and responsibilities. It acts as a source reference and primary induction literature to provide insights to prospective Board members and senior management. It also assists Board in assessment of its own performance and that of its individual directors. Periodical reviews on Board Charter will be carried out in accordance with needs of Company and any new regulations that may have an impact on discharge of Board s duties and responsibilities. In view of recent changes to CA2016, MMLR, MCCG, and/or or applicable rules and regulations, Board saw need to review its Charter in FY2019. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 7 of 38

8 The board is committed to promoting good business conduct and maintaining a healthy corporate culture that engenders integrity, transparency and fairness. The board, management, employees and or stakeholders are clear on what is considered acceptable behaviour and in company. Practice 3.1 The board establishes a Code of Conduct and Ethics for company, and toger with management implements its policies and procedures, which include managing conflicts of interest, preventing abuse of power, corruption, insider trading and money laundering. The Code of Conduct and Ethics is published on company s website. The Board observes Code of Ethics for Company Directors as prescribed by Companies Commission of Malaysia which provides guidance on standards of conduct and prudent business s as well as standards of ethical behavior to Directors. It is being published on Company s website under Corporate Governance section. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 8 of 38

9 The board is committed to promoting good business conduct and maintaining a healthy corporate culture that engenders integrity, transparency and fairness. The board, management, employees and or stakeholders are clear on what is considered acceptable behaviour and in company. Practice 3.2 The board establishes, reviews and toger with management implements policies and procedures on whistleblowing. Application Departure The Board has not established policies and procedures on whistleblowing. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. The Company is in midst of formalising its Whistleblowing Policies and Procedures for Bonia Group. Once completed, approved Whistleblowing Policy will be published on Company s corporate website. By 30 June 2019 Page 9 of 38

10 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.1 At least half of board comprises independent directors. For Large Companies, board comprises a majority independent directors. Application Departure During FY2018, re were 6 Executive Directors, 3 Independent Non- Executive Directors and an Alternate Director on Board, and it was chaired by n Group Executive Chairman cum Chief Executive Officer. To furr reinforce independence, Board was restructured on 01 September 2018 to be chaired by newly joined Senior Independent Non-Executive Chairman. He is supported by 4 Executive Directors, 2 Non-Executive Non- Independent Directors, 2 Independent Non-Executive Directors and 2 Alternate Directors. Since n, out of a total of 9 members on Board, only 4 members have executive functions. As such, Board is of its view that although number of independent directors is less than half of Board (3 over 9), its Independent Directors are adequate at present to provide necessary check and balance to Board s decision-making process. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 10 of 38

11 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.2 The tenure of an independent director does not exceed a cumulative term limit of nine years. Upon completion of nine years, an independent director may continue to serve on board as a nonindependent director. If board intends to retain an independent director beyond nine years, it should justify and seek annual shareholders approval. If board continues to retain independent director after twelfth year, board should seek annual shareholders approval through a two-tier voting process. During its meeting held in August 2017, Board has carried out an annual assessment on effectiveness and independence of Datuk Ng Peng Ng Peng Hay, Independent Director who has served Company for a cumulative term of 9 years or more, and result was satisfactory to Board. Thereafter, proposal with justifications to retain Datuk Ng Peng Ng Peng Hay as Senior Independent Executive Director was tabled and approved by shareholders of Company in Company s 26th AGM held on 28 November Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 11 of 38

12 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice Step Up The board has a policy which limits tenure of its independent directors to nine years. As stated in Company s Board Charter, those independent director(s) who has served cumulative nine (9) years term limit may, upon recommendation of Board, seek shareholders approval on his re-appointment subject but not limited to he has met independence guidelines as set out in Chapter 1 of MMLR; and he does not have any conflict of interest with Company and has not been entering/is not expected to enter into contract(s)especially material contract(s) with Company and/or its subsidiary companies. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 12 of 38

13 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.4 Appointment of board and senior management are based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender. The Board consists of qualified individuals with a mix of skills that brings indepth of knowledge, experience and perspectives to Group s business operations. Every appointment to Board have been evaluated by NRC and reafter, Board, with due consideration be given to, among ors, diverse skills, experience, integrity, competence and achievements of candidates. For appointment of senior management, Executive Directors, at ir sole discretion, assessed and determine suitability of candidates with due consideration be given to, among ors, diverse skills, experience, integrity, competence and achievements of such candidates. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 13 of 38

14 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.5 The board discloses in its annual report company s policies on gender diversity, its targets and measures to meet those targets. For Large Companies, board must have at least 30% women directors. The Board presently does not have any policy on gender diversity. During FY2018, Board comprised only male Directors. Since 01 September 2018, Board was restructured whereby re are 2 female Directors (1 Independent Non-Executive Director, and 1 alternate Director) on our Board who serve to bring value to Board discussions from different perspectives and approaches. According to our HR internal statistical report, women hold approximately 30% of senior management positions in Bonia Group. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 14 of 38

15 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.6 In identifying candidates for appointment of directors, board does not solely rely on recommendations from existing board members, management or major shareholders. The board utilises independent sources to identify suitably qualified candidates. Apart from relying on recommendations from existing Board members, senior management or major shareholders, Board, if required, will also refer to independent source, e.g. professional advisers, business associates etc. to identify suitably qualified candidates for appointment to Board. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 15 of 38

16 Board decisions are made objectively in best interests of company taking into account diverse perspectives and insights. Practice 4.7 The Nominating Committee is chaired by an Independent Director or Senior Independent Director. During FY2018, NRC was chaired by Dato Shahbudin Bin Imam Mohamad ( n Independent Non-Executive Director). On 01 September 2018, NRC was restructured to be chaired by newly joined Senior Independent Non-Executive Director namely Dato Mohamed Khadar Bin Merican. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 16 of 38

17 Stakeholders are able to form an opinion on overall effectiveness of board and individual directors. Practice 5.1 The board should undertake a formal and objective annual evaluation to determine effectiveness of board, its committees and each individual director. The board should disclose how assessment was carried out and its outcome. For Large Companies, board engages independent experts periodically to facilitate objective and candid board evaluations. During FY2018, NRC and Board carried out annual Board and committees assessments by individual directors, self and peer assessments toger with an assessment of independence of independent directors for purposes of evaluating performance of Board as a whole, Committees of Board, each of individual Board member, and independence of Independent Directors. The following key evaluation criteria have been carefully reviewed during assessments Performance of Board and Board Committees - composition, structure, processes, principal responsibilities, succession planning and governance matters. Performance of each individual Board member, and independence of Independent Directors - competence, integrity, skills, experience, commitment, contribution, conflict of interest and independence as guided by MMLR. Overall assessment results were satisfactory to both NRC, and Board. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 17 of 38

18 The level and composition of remuneration of directors and senior management take into account company s desire to attract and retain right talent in board and senior management to drive company s long-term objectives. Remuneration policies and decisions are made through a transparent and independent process. Practice 6.1 The board has in place policies and procedures to determine remuneration of directors and senior management, which takes into account demands, complexities and performance of company as well as skills and experience required. The policies and procedures are periodically reviewed and made available on company s website. The NRC was tasked to review and recommend to Board remuneration of Directors and senior management on an annual basis, to ensure that rewards commensurate with ir talent and individual performance. The affected Directors had abstained from participation in Board deliberations and decision regarding ir individual remuneration. Fees payable to both Executive and Non-Executive Directors, benefits payable to Independent Non-Executive Directors, ex-gratia payment payable to former Directors are subject to approvals by shareholders at Company s 27th AGM. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 18 of 38

19 The level and composition of remuneration of directors and senior management take into account company s desire to attract and retain right talent in board and senior management to drive company s long-term objectives. Remuneration policies and decisions are made through a transparent and independent process. Practice 6.2 The board has a Remuneration Committee to implement its policies and procedures on remuneration including reviewing and recommending matters relating to remuneration of board and senior management. The Committee has written Terms of Reference which deals with its authority and duties and se Terms are disclosed on company s website. The Board has combined roles of nomination committee and remuneration committee and established NRC to implement its policies and procedures on remuneration including reviewing and recommending matters relating to remuneration of board and senior management. The NRC Charter which deals with its authority and duties is available on Company s website. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 19 of 38

20 Stakeholders are able to assess wher remuneration of directors and senior management is commensurate with ir individual performance, taking into consideration company s performance. Practice 7.1 There is detailed disclosure on named basis for remuneration of individual directors. The remuneration breakdown of individual directors includes fees, salary, bonus, benefits in-kind and or emoluments. The details of fees and remuneration of those Directors on board during FY2018 who were also top senior management of Group (received/receivable from Company and/or its subsidiary companies) are disclosed in Company s Corporate Governance Overview Statement for FY2018 as contained in its Annual Report Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 20 of 38

21 Stakeholders are able to assess wher remuneration of directors and senior management is commensurate with ir individual performance, taking into consideration company s performance. Practice 7.2 The board discloses on a named basis top five senior management s remuneration component including salary, bonus, benefits in-kind and or emoluments in bands of RM50,000. The details of fees and remuneration of those Directors on board during FY2018 who were also top senior management of Group (received/receivable from Company and/or its subsidiary companies) are disclosed in Company s Corporate Governance Overview Statement for FY2018 as contained in its Annual Report Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 21 of 38

22 Stakeholders are able to assess wher remuneration of directors and senior management is commensurate with ir individual performance, taking into consideration company s performance. Practice Step Up Companies are encouraged to fully disclose detailed remuneration of each member of senior management on a named basis. The details of fees and remuneration of those Directors on board during FY2018 who were also top senior management of Group (received/receivable from Company and/or its subsidiary companies) are disclosed in Company s Corporate Governance Overview Statement for FY2018 as contained in its Annual Report Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 22 of 38

23 There is an effective and independent Audit Committee. The board is able to objectively review Audit Committee s findings and recommendations. The company s financial statement is a reliable source of information. Practice 8.1 The Chairman of Audit Committee is not Chairman of board. During FY2018, ARC was chaired by n Senior Independent Non- Executive Director namely Datuk Ng Peng Ng Peng Hay who was not Chairman of Board. On 01 September 2018, Lim Saw Imm, a newly appointed Independent Non- Executive Director took up chair of ARC. She is not Chairman of Board as well. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 23 of 38

24 There is an effective and independent Audit Committee. The board is able to objectively review Audit Committee s findings and recommendations. The company s financial statement is a reliable source of information. Practice 8.2 The Audit Committee has a policy that requires a former key audit partner to observe a cooling-off period of at least two years before being appointed as a member of Audit Committee. No former key audit partner of firm of External Auditors of Bonia has been appointed to ARC of Company. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 24 of 38

25 There is an effective and independent Audit Committee. The board is able to objectively review Audit Committee s findings and recommendations. The company s financial statement is a reliable source of information. Practice 8.3 The Audit Committee has policies and procedures to assess suitability, objectivity and independence of external auditor. The ARC s policies and procedures to assess suitability, objectivity and independence of External Auditors are stated in its ARC Charter. During FY2018, ARC assessed and evaluated performance, independence and suitability of External Auditors and recommended for its re-appointment to Board. After a detailed assessment at Board level, Board was satisfied with assessment result and recommended re-appointment of External Auditors to shareholders at 26th AGM of Company and this proposal was approved by members present reat. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 25 of 38

26 There is an effective and independent Audit Committee. The board is able to objectively review Audit Committee s findings and recommendations. The company s financial statement is a reliable source of information. Practice Step Up The Audit Committee should comprise solely of Independent Directors. During FY2018, ARC consisted of 3 Independent Non-Executive Directors namely Datuk Ng Peng Ng Peng Hay, Dato Shahbudin Bin Imam Mohamad and Chong Sai Sin. On 01 September 2018, ARC was restructured to be chaired by a newly joined Independent Non-Executive Director namely Lim Saw Imm who is a Fellow of Association of Chartered Certified Accountants and a Member of both Chartered Tax Institute of Malaysia and Malaysian Institute of Accountants. Or members of ARC are Dato Mohamed Khadar Bin Merican (Senior Independent Non- Executive Director) and Chong Sai Sin (Independent Non-Executive Director). Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 26 of 38

27 There is an effective and independent Audit Committee. The board is able to objectively review Audit Committee s findings and recommendations. The company s financial statement is a reliable source of information. Practice 8.5 Collectively, Audit Committee should possess a wide range of necessary skills to discharge its duties. All members should be financially literate and are able to understand matters under purview of Audit Committee including financial reporting process. All members of Audit Committee should undertake continuous professional development to keep mselves abreast of relevant developments in accounting and auditing standards, s and rules. On 01 September 2018, ARC was restructured to be chaired by a newly joined Independent Non-Executive Director namely Lim Saw Imm who is a Fellow of Association of Chartered Certified Accountants and a Member of both Chartered Tax Institute of Malaysia and Malaysian Institute of Accountants. Or members of ARC are Dato Mohamed Khadar Bin Merican (Senior Independent Non- Executive Director) and Chong Sai Sin (Independent Non-Executive Director). Dato Mohamed Khadar is a Member of both Institute of Chartered Accountants in England and Wales and Malaysian Institute of Accountants, whereas Chong Sai Sin is a member of Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants, Institute of Internal Auditors Malaysia, and Chartered Tax Institute of Malaysia respectively. All ARC members possess appropriate industry and financial experience to assist Board on strategy, risk management and financial matters of Bonia Group. They also undertake continuous professional development to keep mselves abreast of relevant developments in accounting and auditing standards, s and rules. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 27 of 38

28 Companies make informed decisions about level of risk y want to take and implement necessary controls to pursue ir objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on company s objectives is mitigated and managed. Practice 9.1 The board should establish an effective risk management and internal control framework. The Board has established an effective risk management and internal control framework as detailed in Company s Statement on Risk Management and Internal Control in its Annual Report Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 28 of 38

29 Companies make informed decisions about level of risk y want to take and implement necessary controls to pursue ir objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on company s objectives is mitigated and managed. Practice 9.2 The board should disclose features of its risk management and internal control framework, and adequacy and effectiveness of this framework. The key features of Company s risk management and internal control framework, which covers ir adequacy and effectiveness are disclosed under Statement on Risk Management and Internal Control in Company s Annual Report Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 29 of 38

30 Companies make informed decisions about level of risk y want to take and implement necessary controls to pursue ir objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on company s objectives is mitigated and managed. Practice Step Up The board establishes a Risk Management Committee, which comprises a majority of independent directors, to oversee company s risk management framework and policies. The Board has combined roles of audit committee and risk management committee and established ARC to oversee integrity of financial reporting and compliance matters, Group s risk management and internal control systems and etc. During FY2018, n ARC comprised of all 3 independent non-executive directors namely Datuk Ng Peng Ng Peng Hay, Dato Shahbudin Bin Imam Mohamad and Chong Sai Sin. After restructuring of ARC on 01 September 2018, ARC comprises of all 3 independent non-executive directors namely Lim Saw Imm, Dato Mohamed Khadar Bin Merican and Chong Sai Sin. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 30 of 38

31 Companies have an effective governance, risk management and internal control framework and stakeholders are able to assess effectiveness of such a framework. Practice 10.1 The Audit Committee should ensure that internal audit function is effective and able to function independently. The Board has outsourced its internal audit function to an independent professional firm namely M/s RMS Corporate Management Sdn. Bhd. ( RMS ) which provides support to ARC in monitoring and managing risks and internal control systems of Group. RMS reports directly to ARC. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 31 of 38

32 Companies have an effective governance, risk management and internal control framework and stakeholders are able to assess effectiveness of such a framework. Practice 10.2 The board should disclose wher internal audit personnel are free from any relationships or conflicts of interest, which could impair ir objectivity and independence; number of resources in internal audit department; name and qualification of person responsible for internal audit; and wher internal audit function is carried out in accordance with a recognised framework. The Board has obtained a confirmation from outsourced Internal Auditors, M/s RMS Corporate Management Sdn. Bhd. ( RMS ) that internal audit personnel assigned to handle internal audit function of Bonia Group for year 2017/2018 were free from any relationship and no conflict of interest with Group; Chua Siew Lien (a member of Malaysian Institute of Accountants, and an associate member of The Institute of Internal Auditors Malaysia), and Ho Yong Ling (an associate member of The Institute of Internal Auditors Malaysia) are 2 key personnel involved in internal audit function of Bonia Group; RMS has carried out internal audit function in accordance with Bonia Group s recognised framework. An annual assessment on performance and independence of RMS has been conducted and result was satisfactory to Board. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 32 of 38

33 There is continuous communication between company and stakeholders to facilitate mutual understanding of each or s objectives and expectations. Stakeholders are able to make informed decisions with respect to business of company, its policies on governance, environment and social responsibility. Practice 11.1 The board ensures re is effective, transparent and regular communication with its stakeholders. The Company recognises importance of keeping its shareholders, investors and stakeholders informed of Group s performance and corporate developments. Pertinent and updated information of Group is disseminated vide media conferences, press releases, corporate reports, circulars and announcements from time to time. The Board also leverages on its website to provide quick access to information on Group to its stakeholders. Alternatively, Group s latest announcements on financial reports and corporate developments can be retrieved from BMSB s website at Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 33 of 38

34 There is continuous communication between company and stakeholders to facilitate mutual understanding of each or s objectives and expectations. Stakeholders are able to make informed decisions with respect to business of company, its policies on governance, environment and social responsibility. Practice 11.2 Large companies are encouraged to adopt integrated reporting based on a globally recognised framework. Application N/A The Company is not considered as a Large Company as its market capitalisation is less than RM2 billion at present moment. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 34 of 38

35 Shareholders are able to participate, engage board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.1 Notice for an Annual General Meeting should be given to shareholders at least 28 days prior to meeting. The Company held its 26th AGM on 28 November The Notice of 26th AGM was dated and served to Bonia shareholders on 27 October 2017 which was more than 28 days prior to said meeting. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 35 of 38

36 Shareholders are able to participate, engage board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.2 All directors attend General Meetings. The Chair of Audit, Nominating, Risk Management and or committees provide meaningful response to questions addressed to m. All n Directors and Alternate Director attended Company s 26th AGM duly held on 28 November The n Chair of Audit & Risk Management Committee, n Chair of Nominating & Remuneration Committee, External and Internal Auditors also attended said AGM and provided meaningful response to shareholders enquiries. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 36 of 38

37 Shareholders are able to participate, engage board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.3 Listed companies with a large number of shareholders or which have meetings in remote locations should leverage technology to facilitate including voting in absentia; and remote shareholders participation at General Meetings. The Company s AGMs have been held in major towns which were easily accessible to its shareholders since its listing and not in any remote location. Large companies are required to complete columns below. Non-large companies are encouraged to complete columns below. Page 37 of 38

38 SECTION B DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PURSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA MALAYSIA Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures) of Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is only applicable for financial institutions or any or institutions that are listed on Exchange that are required to comply with above Guidelines. Page 38 of 38