BOARD CHARTER
1. RESPONSIBILITY & ACCOUNTABILITY
The Board of Directors ("the Board") is accountable and responsible to ensure proper management of the business of Sungei Bagan Rubber Company (Malaya) Berhad ("the Company" or "Sg Bagan") including the adequacy and integrity of its risk management and internal control system.
All Board members are expected to show good stewardship and act in a professional manner, as well as upholding the core values of integrity with due regards to their fiduciary duties and responsibilities.
2. PURPOSE
This Board Charter sets out the role, functions, composition, operation and processes of the Board as to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as a Board member.
This Board Charter acts as a source of reference and to provide insights to prospective Board members and Senior Management. It is also to assist the Board in the assessment of its own performance and of individual Directors.
3. THE BOARD
Board Membership
LEE SOO HOON - 71
Independent Non-Executive Director
Work Experience/Occupation
a) Partner of Ernst & Young, Singapore (1978 - 1997)
b) Independent Director of Singapore Public Companies
c) Provides management and financial consultancy services
Qualification/Professional body
a) F.C.A. Institute of Chartered Accountants in England and Wales
b) Member of Singapore Institute of Certified Public Accountants Member of Malaysian Institute of Certified Public Accountants
c) Member of Malaysian Institute of Accountants
d) Member of Singapore Institute of Directors
Date of Appointment
19 October 2001
Details of any board committee to which Director belongs
a) Chairman of Audit Committee
b) Member of Remuneration Committee
c) Member of Nomination Committee
Directorship in other listed companies
a) IPC Corporation Ltd
b) CSE Global Ltd
c) Transview Holdings Ltd
d) Kuchai Development Berhad
e) Kluang Rubber Company (Malaya) Berhad
f) G.K. Goh Holdings Ltd
g) Heatec Jietong Holdings Ltd
h) LMIRT Management Ltd
LEE CHUNG-SHIH - 51
Non-Independent Non-Executive Director
Work Experience/Occupation
a) Executive Director, Public Unlisted Real Estate Investment Company
b) Director, Public Unlisted Licenced Trust Company
Qualification/Professional body
B. Sc., International Business
Date of Appointment
19 February 1990
Directorship in other listed companies
a) Kuchai Development Berhad
b) Kluang Rubber Company (Malaya) Berhad
LIEW CHUAN HOCK - 52
Position Independent Non-Executive Director
Work Experience/Occupation
a) Vice President Institutional Sales, HwangDBS Investment Bank Berhad.
Holds dealers representative licence
b) Executive Director, Britac Bhd
c) Head of Institutional Sales, Sime Securities Sdn Bhd
d) Head of Institutional Sales, HLG Securities Bhd
Qualification/Professional body
a) Masters in Business Administration, University of Manchester
b) B.Sc. (Eng.) Hons.
Date of Appointment
18 November 2002
Details of any board committee to which Director belongs
a) Chairman of Remuneration Committee
b) Member of Audit Committee
c) Member of Nomination Committee
d) Member of Investment Committee
Directorship in other listed companies
a) Kuchai Development Berhad
b) Kluang Rubber Company (Malaya) Berhad
HUANG YUAN CHIANG - 54
Position Independent Non-Executive Director
Work Experience/Occupation
Mr Huang is a lawyer by training and an investment banker by vocation. His career in investment banking spanned 12 years and he has held senior management positions with various international banks including Standard Chartered Bank, HSBC, Bankers Trust and Deutsche Bank. His last position at Bankers Trust was Managing Director, overseeing the Mergers & Acquisitions Division of Bankers Trust for Singapore, Malaysia, Thailand, Indonesia, Philippines and India.
Qualification/Professional body
a) Bachelor of Laws (LL.B) Monash University
b) Bachelor of Economics (B.Ec) Monash University
Date of Appointment
18 November 2003
Details of any board committee to which Director belongs
a) Chairman of Nomination Committee
b) Chairman of Investment Committee
c) Member of Audit Committee
d) Member of Remuneration Committee
Directorship in other listed companies
a) Kuchai Development Berhad
b) Kluang Rubber Company (Malaya) Berhad
c) MTQ Corporation Limited
d) Mercator Lines (Singapore) Limited
e) Hwa Hong Corporation Limited
WILLIAM WONG TIEN LEONG - 54
Position Independent Non-Executive Director
Work Experience/Occupation
a) Partner of Francis Khoo & Lim
b) Independent Director of a Singapore Public-Listed Company
Qualification/Professional body
Bachelor of Laws (LLB) National University of Singapore
Date of Appointment
7 December 2011
Details of any board committee to which Director belongs
a) Member of Audit Committee
b) Member of Nomination Committee
c) Member of Investment Committee
d) Member of Remuneration Committee
Directorship in other listed companies
a) Kuchai Development Berhad
b) Kluang Rubber Company (Malaya) Berhad
Board Composition
Sg Bagan is led and managed by experienced Directors who have vast expertise in the wood-based panel industry, business, finance, management, marketing and law. Their skills and experience are what is needed to lead the Group to achieve its vision.
The Board comprises five (5) members made up of one (1) Non-Executive Director and four (4) Independent Non-Executive Directors. Composition reflects a balance within executive directors and non- executive directors and complies with Main Market Listing Requirements of Bursa Securities which requires at least one-third (1/3) of the Board to be Independent Directors.
Senior Independent Non-Executive Director which is identified by the Board is Mr Lee Soo Hoon as to whom shareholders' concerns may be conveyed or where it could be inappropriate for the concerns to be dealt with by the Executive Directors.
Board Meetings
The Board shall conduct at least four (4) scheduled meetings annually, with additional meetings to be convened as and when necessary. Besides Board meetings, the Directors also attend investment meetings, where Directors deliberate on the Group's participation in investments. Threshold of these investments will be reviewed as and when the Board deems necessary.
Appointments and Re-election
Appointment of a new Director is a matter for consideration and decision by the full Board, upon the recommendation from the Nomination Committee ("NC"). In making these recommendations, the NC will consider the required mix of skills, experience and diversity, including gender, where appropriate, which the Director in consideration can contribute to the Board.
The Articles of Association of the Company provides that every newly appointed Director be subjected to re-election at the immediate Annual General Meeting ("AGM"). Further, one third (1/3) of the Board shall retire from office and be eligible for re-election at every AGM, and all the Directors shall submit themselves for re-election at least every three (3) years.
Independence of a Director
The Board assesses the independence of Independent Directors annually by taking into consideration their background, disclosed interests, family relationship and other the criteria set by the Nomination Committee for assessing the independence of Directors.
The tenure of an Independent Director shall not exceed a cumulative term of 9 (nine) years and if continued on the board as Independent Director, the Board shall seek shareholder's approval or the said director will be re-designated as a Non-Independent Director.
New Directorship
Any Director accepting new directorship in other companies will be required to make known to the Board prior to his/her new appointment and give commitment to the Board that his/her time for attending board meetings will not be compromise in any manner. The Chairman is also required to notify the Board if he has any new directorship or significant commitments outside the Company.
Continuing Education Programs
All Directors must complete the Mandatory Accreditation Programs and Continuing Education Programs prescribed by Bursa Securities.
All Directors are encourage to undergo relevant trainings and seminars at the Company's expense to further enhance their knowledge and to keep themselves abreast with developments in the market place, i.e. relevant new regulations, legislation and changing commercial risks whilst discharging their duties.
Board Duties and Responsibility
The Board's responsibility as a whole is to ensure the adequacy and integrity of the Group's risk management and its internal control system and being collectively responsible for the success of the Group. The Board of Directors has been entrusted with the responsibility of:
- establish a sound framework to manage risk;
- approve the Internal Audit Functions that reports to the Audit Committee,
- approving a sustainable business strategy;
- approving dividends to be declared;
- approving financial statements and accounting policies of the Group;
- approving acquisition, disposal or closure of any business;
- approving capital investment or disposal of tangible assets;
- approving borrowings or grants;
- approving giving of Guarantee or Comfort Letters;
- approving credit facilities;
- approving corporate restructuring.
- approving annual budgets, including major capital commitments;
- approving new / expansion of business ventures;
- approving and limiting management's authorities including key policies and
- the Board is also responsible to ensure that the financial statements is prepared in accordance with the Companies Act and applicable approved accounting reporting standards, so as to give a true and fair view of the state of affairs of the Group.
Chairman
The Chairman's responsibilities are to provide leadership to the Board, facilitate the meeting process, setting the agenda for all Board of Directors meetings and ensure that the Board and its Committees function effectively.
The responsibilities of the Chairman, amongst others, are as follows:-
(1) to lead the Board and ensure its effectiveness of all aspects of its role;
(2) to ensure the efficient organization and conduct of the Board's function and meetings;
(3) to facilitate the effective contribution of all Directors at Board meetings;
(4) to promote constructive and respectful relations between Directors, and between the Board
and Management; and
(5) to ensure effective communication with shareholders and relevant stakeholders.
Board Committees
The Board delegates certain functions to the following Committees to assist in the execution of its responsibilities:-
(i) Audit Committee;
(ii) Nomination Committee;
(iii) Remuneration Committee.
AUDIT COMMITTEE
Audit Committee was established on 1995 with the following terms of reference. The current composition of the Audit Committee Mr Lee Soo Hoon the Chairman and committee members are Mr Liew Chuan Hock, Mr Huang Yuan Chiang and Mr William Wong Tien Leong.
Meetings
Quarterly meetings are convened as scheduled without the presence of the Executive Directors. Besides these scheduled meetings, the Audit Committee also attends meetings to deliberate on the Group's participation in investments or major project.
Membership Requirement
The Committee Members are appointed by the Board from amongst its Directors excluding alternate directors to fulfill the following requirements:
(1) the audit committee must be composed of no fewer than three (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 finance literate; and
(3) at least one member of the audit committee:
(a) must be a member of the Malaysian Institute of Accountants; or
(b) if he/she is not a member of the Malaysian Institute of Accountants, he/she must have at least 3 years' working experience and:
(aa) he/she must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967; or
(bb) he/she must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967.
(c) fulfills such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad ("Bursa Securities").
The members of the Committee shall elect a chairman from among their number who shall be an independent director.
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 Board shall review the term of office and performance of the Committee and each of its members at least once every three (3) years.
Activities of Audit Committee
The Audit Committee duties are as follows:-
1. Reviewed and discussed the unaudited quarterly financial reports of the Group prior to presentation to the Board of Directors for approval and subsequent announcements.
2. Reviewed the external auditors' scope of work and their audit plan and discussed results of their examination and recommendations.
3. Reviewed with the external auditors the audited financial statements for the financial year ended 30 June 2013 the results of the audit, audit report and recommendation prior to the approval of the Board and subsequent announcements.
4. Reviewed and discussed the new developments on accounting standards issued by the Malaysian Accounting Standards Board and its adoption and impact to the Group's and Company's financial statements.
5. Reviewed the internal audit plan and programme for the financial year under review.
6. Reviewed the reports prepared by the outsourced internal auditors on the state of internal controls of the Group.
7. Reviewed the related party transactions and conflict of interest situations that arose within the Group for compliance with the Listing Requirements of Bursa Malaysia.
8. Reviewed the extent of the Group's compliance with the relevant provisions set out under the Malaysian Code on Corporate Governance 2012 for the purpose of preparing the Corporate Governance Statement and Statement on Risk Management and Internal Control pursuant to the Listing Requirements of Bursa Malaysia.
9. Reviewed the information covering the financial performance against the budget of the estate together with key operational performance indicators on quarterly basis.
10. Reviewed the proposed audit fees for the external auditors in respect of their audit of the Group.
11. Considered the re-appointment of the external auditors and the outsourced internal auditors.
NOMINATION COMMITTEE
The Nomination Committee was set up on 18 February 2002 and comprised Independent Non-Executive Directors. Currently, the members of the Nomination Committee are Mr Huang Yuan Chiang the Chairman and the members are Mr Lee Soo Hoon, Mr Liew Chuan Hock and Mr William Wong Tien Leong.
The Nomination Committee shall ensure that the Board of Directors brings required character to the Board that comprises of mix skills, gender and experience. The Nomination Committee also assist the Board in reviewing on an annual basis, for an appropriate balance and size of non-executive participation, establishing procedures and processes towards an annual assessment on the effectiveness of the Board as a whole, the Committee of the Board and the contribution of each individual Director including Independent Non- Executive Directors.
REMUNERATION COMMITTEE
The Remuneration Committee was set up on 18 February 2002 and currently has four (4) members, purely Independent Non-Executive Directors. Chairman of the Remuneration Committee is Mr Liew Chuan Hock and its members are Mr Huang Yuan Chiang, Mr Lee Soo Hoon and Mr William Wong Tien Leong.
Directors' Remuneration
The level of remuneration reflects the contribution and level of responsibilities undertaken by the Non-Executive Director.
The Remuneration Committee reviews and asses the appropriate remuneration of each Director based on the criteria set and forward to the Board who ultimately decides on the remuneration of each Director. Directors' fees are endorsed by the Board for approval by shareholders in Annual General Meeting.
Individual Directors are not permitted to participate in discussion and decision of their own remuneration.
4. COMPANY SECRETARY
The Company Secretary plays an important advisory role and is a source of information and advice to the Board and Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company and Group.
The Board has appointed a Company Secretary who is considered capable of carrying out the duties to which the post entails, and the removal of the Company Secretary shall be a matter for the Board as a whole.
The Company Secretary shall be of a senior position with adequate authority and shall report directly to the Board.
The seven (7) specific responsibilities of the Company Secretary are as follows:-
Ø advise the Board and Management on governance issues;
Ø ensure compliance of listing and related statutory obligations;
Ø attend Board, Committees and general meetings, and ensure the proper recording of minutes;
Ø ensure proper upkeep of statutory registers and records;
Ø assist Chairman in the preparation for and conduct of meetings;
Ø assist Chairman in determining the annual Board plan and the administration of other strategic issues; and
Ø assist in the induction of new directors, and continuously update the Board on changes to listing rules, other related legislations and regulations.
5. INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Board strictly adheres to the disclosure requirements of Bursa Securities and recognizes the importance of timely and equal dissemination of information to shareholders including potential investors, analysts and the public. The method of communication to shareholders and investors, amongst others, are as follows:-
(a) timely announcements and disclosures made to the Bursa Malaysia Securities Berhad, which includes quarterly financial results, changes in the composition of the Group and any other material information that may affect investors' decision making;
(b) the AGM is the principal forum for dialogue with shareholders. Shareholders are notified of the meeting and provided with a copy of the Company's Annual Report at least 21 days prior date of Annual General Meeting. Board members are available to respond to all queries and undertake to provide sufficient clarification on issues and concerns raised by the shareholders. The external auditors are also present to provide their professional and independent clarification on queries raised by shareholders. Status of all resolutions proposed at the AGM is announced to Bursa Securities at the end of the meeting day.
(c) participates in several institutional investors' forums/dialog both locally and outside Malaysia;
(d) Our website: chairman@sungeibagan.com is available for access of information by shareholders and the public. Information posted on the website is updated periodically and
(e) for any feedbacks or enquiries, shareholders can directed them to the company's or directly to our Senior Independent Non- Executive Director chairman@sungeibagan.com.
6. ACCESS TO INFORMATION AND INDEPENDENT ADVICE
Access to Information
The Directors, collectively or individually, are free to seek independent professional advice and information in the furtherance of their fiduciary duties at the Company's expense, so as to ensure the Directors are able to make independent and informed decisions for the Company as well as the shareholders.
Independent Advice
Any Director when in need of such professional advice or service shall make known to the Board of his or their intention and purpose, thereafter with the assistance from the Company Secretary, Director or Directors can proceed to obtain or seek such independent professional advice or service needed at the Company's expense.
7. CODE OF CONDUCT & BUSINESS ETHICS
The Code of Conduct & Business Ethics ("the Code") is to be observed by all Directors and employees of the Group. The Management shall review and update the Code regularly to ensure that it continues to remain relevant and appropriate. The Code is made available for reference on the Company's website at chairman@sungeibagan.com
8. REVIEW OF THE BOARD CHARTER
The Board Charter has been adopted by the Board on 10 October 2013 and any subsequent amendment to the Charter will be approved by the Board. The Board Charter will be reviewed and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board's duties or responsibilities.
This Board Charter is made available for reference on the Company's website at 28 November 2013
