• Reports of meetings of committees of the Board, including matters requiring the full Board’s deliberation and approval;
• Performance reports of the Group, which include information on financial, strategic business issues, major operational issues and updates; and
• Board papers for other matters for discussion/approval.

⁽¹⁾ Dato’ Seri Abdul Azim bin Mohd Zabidi was the Chairman of the Board until 22 February 2021 and had resigned as Independent Non-Executive Director with effect from 22 February 2021.
⁽²⁾ Mr Melton Martin had resigned as Independent Non-Executive Director with effect from 23 February 2021.
⁽³⁾ Mr Michael @ Radio bin Luban has not attended any Board meeting held during the financial year ended 31 December 2020 as he was appointed as Board member of the Company with effect from 23 February 2021.
⁽⁴⁾ Madam Agnes Soei-Tin Lamey was redesignated from an Independent Non-Executive Director to Non-Independent Non-Executive Director with effect from 25 March 2021.

1.2 Board Composition

The Board consisted of five (5) members, comprising three (3) Independent Non-Executive Directors, one (1) Non-Independent Non-Executive Director and one (1) Managing Director.

The present composition of the Board is in compliance with Paragraph 15.02 of the MMLR and the Code as more than half of its members are Independent Directors. The Board members have diverse backgrounds and experiences in various fields. Collectively, they bring a broad range of skills, experience and knowledge to direct and manage the Group’s businesses.

The Board is satisfied that, through the annual performance appraisal of the Board, the Board Committees and individual directors, the current board composition represents a mix of knowledge, skills and experience required to discharge the Board’s duties and responsibilities effectively.

A brief profile of each Director is presented on pages 13 to 15 of this Annual Report.

1.3 Board Balance and Independence

The composition of the Board is fundamental to its success in providing strong and effective leadership. The Board comprises a strong mix of experienced individuals with the majority being Independent Non-Executive Directors who offer external perspectives on the business and constructively challenge to the Executive Director(s), particularly in developing the Group’s business strategies.

The presence of a majority of Independent Non-Executive Directors provides effective check and balance in the functioning of the Board to safeguard the interests of shareholders and all other stakeholders.

Independence is important for ensuring objectivity and fairness in board’s decision making. All Independent Directors comply with the criteria of ‘independent directors’ as prescribed in MMLR.

The Board, through the NRC, assesses the independence of Independent Directors annually. The criteria for assessing the independence of an Independent Director include the relationship between the Independent Director and the Company and its involvement in any significant transaction with the Company.

The Board is satisfied with the level of independence demonstrated by the Independent Directors and their ability to act in the best interest of the Company and/or the Group as all of the Independent Directors have satisfactorily demonstrated that they are independent from Management and free from any business or other relationship with the Group that could materially affect or interfere with the exercise of objective and independent judgement to act in the best interest of the Group.

1.4 Tenure of Independent Directors

The Company had adopted the recommendation of the Code that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve the Board subject to the Director’s redesignation as a Non-Independent Non-Executive Director. The Board will seek shareholders’ approval in the event that a Director, who has served in that capacity for more than nine (9) years, retains as an Independent Director. For a Director retained as an Independent Director after the twelfth (12) years, the Board shall seek shareholders’ approval annually through a two-tier voting process as provided under the Code.

The Company does not have tenure limits for Independent Directors and the Board is of the opinion that the ability of an Independent Director to exercise his/her independence and objective judgment in Board deliberations shall not be a function of his/ her length of service as an Independent Director.

The NRC had reviewed and recommended to the Board for Datuk Yap Pak Leong, who has served the Company for the tenure of more than twelfth (12) years to continue to serve as an Independent Director of the Company, subject to annual shareholders’ approval through a two-tier voting process as stipulated in the Code.

1.5 Board Diversity and Senior Management Team

The Board acknowledges the importance of diverse Board and Senior Management. The Group strictly adhered to the practice of non-discrimination of any form, whether based on race, age, religion and gender throughout the organisation, which including the selection of Board members. The Board encourages a dynamic and diverse composition by nurturing suitable and potential candidates equipped with competency, skills, experience, character, time commitment, integrity and other qualities in meeting the future needs of the Company.

1.6 Board Gender Diversity

The Board acknowledges the importance of boardroom diversity and the recommendation of the Code pertaining to the establishment of a gender diversity policy.

The Board encourages and supports more women participation in the Company’s decision-making positions whilst it continues to strive towards 30% women participation in the Board Composition. Currently out of the five (5) Directors, one (1) is woman.

1.7 Board Appointment Process

The Company has in place formal and transparent procedures for the appointment of new Directors and Senior Management i.e. Board Diversity Policy. The Company strictly adhered to the practice of non-discrimination of any form, whether based on race, age, religion and gender throughout the organisation, which includes the selection of Board members. The Board encourages a dynamic and diverse composition by nurturing suitable and potential candidates equipped with competency, skills, experience, character, time commitment, integrity and other qualities in meeting the future needs of the Company.

As for the appointment of Independent Non-Executive Directors, the NRC evaluates the ability to discharge such responsibilities before making recommendation to the Board.

The Board has entrusted the NRC with the responsibility to review candidates for the Board and key Management positions and to determine remuneration packages for these appointments. The NRC is also entrusted to the nomination, selection, remuneration and succession policies for the Group.

On 22 February 2021, the NRC had reviewed and assessed the suitability of the appointment of Mr Michael @ Radio bin Luban as an Independent Director of the Company in line with the objective as set out in the Board Charter in term of experience skills, knowledge, age and gender diversity and succession planning.

1.8 Re-Election of Directors

Any Director appointed during the year is required under the Company’s Constitution to retire and seek re-election by the shareholders at the following AGM immediately after their appointment. The Constitution also require that one-third (1/3) of the Directors including the Managing Director retire by rotation and seek re-election at each AGM and that each Director shall submit himself/herself for re-election at least once in every three (3) years.

This provides an opportunity for shareholders to renew their mandates. The election of each Director is voted on separately. To assist shareholders to renew their decision, sufficient information such as personal profile, meetings attendance and the shareholdings of each Director standing for election are available in the Annual Report.

At the forthcoming AGM, the Directors retiring by rotation pursuant to Clause 97 of the Company’s Constitution and Para 7.26 of the Main Market Listing Requirements and who have offered themselves for re-election are Datuk Yap Pak Leong and Madam Agnes Soei-Tin Lamey.

Mr Michael @ Radio bin Luban was appointed to the Board on 23 February 2021 and shall retire and be eligible for re-election under Clause 104 at the forthcoming AGM.

The profiles of the above-named Directors who are standing for re-election are set out in pages 13 to 15 of this Annual Report.

2.1 Annual Evaluation

On annual basis, the relevant assessment and review forms / questionnaires in relation to the board evaluation will be circulated to all the Directors to complete in advance of the meeting of the NRC in order to collate the assessment results for the NRC’s review.

The Board, through the NRC, had established criteria to ensure board composition and diversity with right mix of knowledge, skills and competency for which performance evaluation are to be based upon. The criteria adopted for the board’s performance evaluation includes board mix and composition, directors’ training, independence, quality of information, board proceedings, board’s roles and responsibilities and the Chairman’s roles and responsibilities. Annual board review was conducted by the NRC to assess and evaluate the board’s effectiveness base on the above criteria during the financial year.

In addition, peer review of the knowledge and skill sets of fellow directors is required to be performed by each director based on evaluation criteria established, which includes integrity, professionalism, knowledge, performance and participation during board meetings, contribution and board relationship. Peer review of directors was conducted by the NRC during the financial year.

As for the performance evaluation of board committees, the Board assesses the performance of the AC and NRC based on the recommended evaluation criteria adopts from Corporate Governance Guide issued by Bursa Securities, which includes committees’ composition, contribution to the board’s decision making, expertise, appointment as well as timeliness and quality of communication and minutes. The NRC has concluded review of the performance of the board committees.

Based on the above assessments, the NRC was satisfied with the existing Board composition and was of the view that all Directors and Board Committees of the Company had discharged their responsibilities in a commendable manner and had performed competently and effectively. The Board is of the view that its present size and composition is optimal based on the Group’s operations and that it reflects a fair mix of financial, technical and business experiences that are important to the stewardship of the Group.

The NRC also undertakes yearly evaluation of the performance of the CFO, whose remuneration is directly linked to performance, based on the score sheet. For this purpose, the performance evaluation for the year 2020 of the CFO was reviewed by the NRC on 22 February 2021.

2.2 Directors' Training

The Board fully supports the need for its members to continuously enhance their skills and knowledge to keep abreast with the developments in the economy, industry, technology and updates on regulations, amongst others to effectively carry out their duties and responsibilities as directors and to comply with continuous training as required by the MMLR.

Most of the Directors have completed the Mandatory Accreditation Programme as prescribed by Bursa Securities, save as the newly appointed Director, Mr Michael @ Radio bin Luban and he has registered to the MAP training on 31 May 2021 to 2 June 2021. There were also briefings by the External Auditors and the Internal Auditors and the Company Secretary on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings.

During the financial year, the Directors had attended training courses, conferences and seminars conducted by various external professionals to enhance their knowledge and expertise, and the Board will continue to evaluate and determine the training needs of its Directors on an ongoing basis.

The training course, conferences and seminar attended by the Directors during the financial year were as follows:

The Company will continue to identify suitable training for the Directors to equip and update themselves with the necessary knowledge in discharging their duties and responsibilities as Directors.

The Directors are encouraged to attend briefing, conferences, forums, trade fairs (locally and internationally), seminars and training to keep abreast with the latest developments in the industry and to enhance their skills and knowledge.

The AC is relied upon by the Board to, amongst others, provide advice in the areas of financial reporting, external audit, internal control environment and internal audit process, review of related party transactions as well as conflict of interest situation.

The AC comprises three (3) members, and all members are Non-Executive Directors, with the majority of Independent Directors. The AC is chaired by an Independent Non-Executive Director, who is distinct from the Chairman of the Board and all members of the AC are financially literate. None of the members was a former key audit partner of the Company’s external auditors.

The composition of the AC, including its roles and responsibilities as well as a summary of its activities carried out during financial year 2020, are set out in the AC Report on pages 62 to 66 of this Annual Report.

The AC has adopted a policy that requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the AC and the said policy has been incorporated in the Terms of Reference of the AC.

The Board considered the suitability and independence of the External Auditors during the discussion of the Group Audit Plan for the financial year ended 31 December 2020. The factors that take into account including the adequacy of experience and resources of the firm and professional staff assigned to the audit and the level of non-audit services to be rendered by the External Auditors to the Group for the financial year under review.

The Board is aware of the potential conflict of interest situation that may arise if the Company’s External Auditors are engaged to provide non-audit services to the Group. The External Auditors have reviewed the non-audit services provided to the Group during the year and that to the best of their knowledge, the non-audit services did not impair their independence. The Company also discloses fees received by the External Auditors for non-audit work for the financial year under review in Additional Disclosure Requirements.

On 22 February 2021, the AC had conducted an annual assessment of the timeliness, competence, audit quality and resource capacity of Baker Tilly Monteiro Heng PLT in relation to the audit, the nature and extent of the non-audit services rendered and the appropriateness of the level of fees.

The AC had also obtained assurance confirming that the External Auditors are independent in accordance with the terms of all relevant professional and regulatory requirements.

The Board aims to present a balanced and meaningful assessment of the Group’s position and prospects, primarily through the annual financial statements and the quarterly announcement of results.

Before the financial statements are drawn up, the Directors take the necessary steps to ensure that the Group had used all the applicable accounting policies and supported by reasonable and prudent judgements and estimates. All accounting standards which the Board considers to be applicable, have been followed, subject to any explanations and material departures disclosed in the notes to the financial statements.

The AC comprises three (3) members, all non-executive, a majority of whom (including the Chairman of the AC) are independent. The members of the AC of the Company comprised at least one member with the requisite accounting qualification based on the requirements of the MMLR of Bursa Securities. All members of the AC are financial literate. The members bring with them invaluable recent and relevant managerial and professional expertise in accounting, auditing and related financial management domains.

The Board has established a transparent relationship with the Company’s External Auditors and Internal Auditors via the AC who has explicit authority to communicate directly with them. The External Auditors confirmed to the AC of their independency at each financial year and during their presentation of relevant audit Memorandum.

The External Auditors are working closely with the Internal Auditors and Tax Consultants, without compromising their independence. Their liaison with the Internal Auditors is to achieve the main objective of avoiding duplication of efforts to maximise audit effectiveness and efficiency. The External Auditors will continue to review all Internal Audit reports and discuss findings with the Internal Auditors.

The Board has the overall responsibility to ensure that sound and effective risk management and internal control systems are maintained, while Management is responsible for designing and implementing risk management and internal control systems to manage risks. Sound and effective systems of risk management and internal control are designed to identify and manage the risk of failure to achieve business objective.

The Board is responsible for the Group’s risk management and internal control systems and for reviewing their effectiveness. The Risk Assessment Management Committee supports the Board in monitoring the Company risk exposures, the design and operating effectiveness of the underlying risk management and the internal control systems. Thereafter, the Risk Management Committee will report to the Board after due review of the effectiveness of the Group’s risk management and internal control by the AC.

The risk management processes in identifying, evaluating and managing significant risks facing by the Company are embedded into the operating and business processes. These processes are undertaken by the CEO and Management in their course of work. Key matters covering the financial performance, operating, market, regulation and compliance, environment and etc. are reviewed and deliberated in the Business Risk Assessment Management Committee.

The Board has been integrating the risk issues into their decision-making process whilst maintaining the flexibility to lead the business of the Group through the ever-changing internal and external environments.

The Company continues to maintain and review its internal control procedures to ensure the protection of its assets and its shareholders’ investment.

Details of the main features of the Company’s risk management and internal controls framework are further elaborated in the AC Report and the Statement on Internal Control.

The Board recognises the importance of good corporate governance and is committed to maintaining a sound system of internal controls and risk management. This includes the establishment of an appropriate control environment and risk management framework, processes and structures, and a continuous review of the adequacy and integrity of the said systems to safeguard shareholders’ investment and the Group’s assets.

The Statement on Risk Management and Internal Control set out on pages 56 to 61 of this Annual Report provides an overview of the state of internal controls within the Group.