SCGM Bhd

Lot 3304 Batu 24 1/2 Jalan Kulai - Air Hitam

81000 Kulai, Johor Malaysia

Tel: +607-6522288       Fax: +607-6522299

Email: ir@scgmbhd.com

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Wednesday, 26 April 2017

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Statement of Corporate Governance

 

 

STATEMENT ON CORPORATE GOVERNANCE

The Board of SCGM Bhd (“the Group”) will endeavour to comply with all the key Principles and Best Practices of the Malaysian Code on Corporate Governance 2012 (“the Code”) in its effort to observe high standards of transparency, accountability and integrity. SCGM is committed to practice high standard of corporate governance to ensure effective self-regulatory corporate practices exist to protect the stakeholders’ interests.

 

The following paragraphs describe how the Group has applied the Principles of the Code and how the Board has complied with the Recommendations set out in the Code for the financial year ended 30 April 2016.

 

A. THE BOARD OF DIRECTORS

 

1. The Board and its Responsibilities

 

 The Board is responsible for the overall corporate governance, strategic direction, formulation of policies and overseeing the businesses of the Group. The Board leads and supervises the management of the business and affairs of the Group in enhancing long term shareholders’ value and sustaining the stakeholders’ interests.

 

  1. Board Composition

 

The Board consists of seven (7) members comprising the Executive Chairman, Managing Director, two (2) Executive Directors and three (3) Independent Non-Executive Directors. The present Board composition complies with the Listing Requirements of the Bursa Malaysia.

 

 

The profiles of the Directors are set out on pages 104 to 114 in this Annual Report.

 

The Board comprises of business entrepreneurs and professionals drawn from various backgrounds, with a diverse range of know-how, experiences and knowledge; provides the relevant skills, expertise and experience for making sound investment decisions and manage the Group's business operations. With the diversified and vast experiences of the board members, the Board is competent to discharge its duties and responsibilities and safeguard shareholders’ value.

 

The Group does not have a policy on diversity of gender, ethnicity and age but the Board composition is based on merits, experience and their commitment and contribution to the Group. The Board will continue to provide equal opportunity to competent candidates and will look into setting the policy on diversity of gender diversity.

 

  1. Goals and Responsibilities

 

The roles of the Chairman and Managing Director are separate with clear division of responsibilities between them to ensure balance of power and authority.

 

The Board recognises the key role it plays in charting the strategic direction of the Company and has assumed the following principal responsibilities in discharging its fiduciary and leadership functions:

 

  • reviewing and adopting a strategic plan for the Company, addressing the sustainability of the Group’s business;

  • overseeing the conduct of the Group’s business and evaluating whether or not its businesses are being properly managed;

  • identify principal business risks faced by the Group and ensuring the implementation of appropriate internal controls and mitigating measures to address such risks;

  • ensuring that all candidates appointed to senior management positions are of sufficient calibre, including the orderly succession of senior management personnel;

  • overseeing the development and implementation of a shareholder communications policy, including an investor relations programme for the Company; and

  • reviewing the adequacy and integrity of the Group’s internal control and management information systems.

 

To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee, to examine specific issues within their respective terms of reference as approved by the Board and report to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.

 

The Chairman is responsible for the Group’s future business and strategy plan, setting goal to achieve the mission and vision. He provides leadership and governance of the Board, ensuring its effectiveness and assumes the formal role as the leader in chairing all Board meetings and shareholders’ meetings. He leads the Board in overseeing Management and principally ensures that the Board fulfills its obligations and as required under the relevant legislations.

 

 Some of the specific responsibilities of the Chairman include to:-

 

  1. Manage Board meetings and boardroom dynamics by promoting a culture of openness and debate where Directors are encouraged to provide their views;

  2. Work closely with the Managing Director to ensure provision of accurate, timely and clear information to facilitate the Board to perform effectively, able to make informed decisions and to monitor the effective implementation of the Board’s decisions;

  3. To provide his view and decision objectively; and

  4. Ensure meetings of the shareholders are conducted in an open and proper manner with appropriate opportunity for them to ask questions.

  5. As Group’s official spokesperson.

 

 The Managing Director is responsible for the management of the Group’s business and marketing strategy to meet the Group’s budget and target sales, organisational effectiveness and implementation of Board strategies, policies and decisions.

 

The Board has also appointed the Independent Non-Executive Director, Wong Tun Boon, as the Senior Independent Director to whom concerns may be conveyed.

 

The duties of Executive Directors include implementation of decisions and policies approved by Board, overseeing and running the Group's day to day business, and also coordinating business and strategic decisions. Each Executive Director is responsible for the respective business unit that there is no overlapping of each role and duty.

 

 The Non-Executive Directors are independent from management and are free from any business or other relationships that could materially interfere with the exercise of independent judgment. They scrutinize the decision taken by the Board, and provide constructive opinions and objectively challenge the management’s proposal and decision. While the Board is responsible for creating the framework and policies within which the Group should be operating, the management is accountable for the execution of the expressed policies and attainment of the Group’s expressed corporate objectives. This demarcation reinforces the supervisory role of the Board.

 

The Board also assumes various functions and responsibilities that are required of them by regulatory authorities, as specified in guidelines and directives issued from time to time.

 

  1. Board Charter

 

The Board Charter was reviewed on 23 June 2016. The Board Charter sets outs the Board roles and responsibility.

 

  1. Independence

 

The Group measures the independence of its Directors based on the criteria prescribed under the Main Market Listing Requirement (“Main LR”) in which a Director should be independent and free from any business or other relationship that could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. Objective assessment of the independence of Directors based on the provisions of the Main LR is carried out before the appointment of Directors and re-affirmed annually.

 

One of the recommendations of the Code states that the tenure of an independent director should not exceed a cumulative term of over 9 years. As of to date, the three independent directors have served the Board for a cumulative term of nine years. The Company will seek for shareholders’ approval on the retention of the three independent directors at the forthcoming Annual General Meeting.

 

 The Board considered the current size and composition of the Board a balanced mix of professionals and entrepreneurs who have a diverse range of know-how and experiences in relevant fields. The Board is of the view that with the current Board size, there is a balance of power and authority on the Board between the Non-Independent and Independent Directors. The Board is assisted by the Nomination Committee to review the Board size and composition annually.

 

 

  1. Code of Ethics and Whistleblowing Policy

 

 

The Board has finalised and approved the Code of Ethics and Whistleblowing policy on 23 June 2016.

 

  1. Schedule of Matters Reserved for Board

 

Append below is a list of matters reserved for Board Committee, where there is doubt regarding a matter/an issue, it shall be referred to the Chairman:

 

  1. Business plan and changes thereon;

  2. Introduction of new business or termination of existing business;

  3. Budget and significant CAPEX;

  4. Quarterly, annual unaudited and audited financial statements;

  5. Proposed dividend/Dividend policy;

  6. Approval of significant changes in accounting policies and practices;

  7. Remuneration of auditors;

  8. Recommendations for appointment, reappointment and dismissal of auditors;

  9. External and internal audit plans;

  10. Report and findings of auditors;

  11. Property, plant and equipment written off and/or disposals;

  12. Bank borrowings;

  13. Changes in the mode of operations of bank accounts;

  14. Debt, loan agreements and working capital facilities for the Group;

  15. Financial instruments and derivatives;

  16. Increase in authorised, issued and paid up share capital, including share buy-back, capitalisation of reserves;

  17. Related party transactions;

  18. Directors’ remunerations and fees;

  19. Changes in organisational and management structure

  20. Misconduct and disciplinary matters;

  21. Changes in key positions;

  22. Appointment of power of attorney;

  23. Risk management framework;

  24. Internal control systems;

  25. Board committees’ terms of reference and changes thereto;

  26. Convening Annual General Meeting/Extraordinary General Meeting;

  27. Key statements of Annual Report;

  28. Changes to the Memorandum and Articles of Associations;

  29. Appointment and termination of Company Secretary and/or Share Registrars;

  30. Change of registered office;

  31. Change of Company’s name.

 

2. Board Meetings

 

Board meetings are scheduled in advance at the beginning of the new financial year to enable Directors to plan ahead and fix the scheduled meetings. The Board meets at least four times a year. Special Board meetings to deliberate on corporate proposals or urgent issues which require the Board’s consideration and decision will be held as and when necessary. Financial and operation plan will be reviewed and discussed at each regular scheduled meetings. Other items reviewed would include business performance of the Group, against plan previously approved by the Board, review and approve quarterly and annual financial statements, corporate exercises and other proposals that require the approval of the Board. Senior management and advisers may be invited to attend Board meetings, where necessary, to provide additional information and insights on the relevant agenda items tabled at Board meetings.

 

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors. In any given circumstances, in accordance with the provision of the Main LR, members of the SCGM Board are expected to serve in no more than five public listed companies.

 

The Board met four (4) times during the financial year ended 30 April 2016. Details of each director’s attendance for the financial year ended 30 April 2016 are as follows:-

 

 

Name Attendance

 

Dato’ Sri Lee Hock Seng 4/4

 

Dato’ Sri Lee Hock Chai 4/4

 

Dato’ Sri Lee Hock Guan 4/4

 

Lee Hock Meng 4/4

 

Wong Tun Boon 4/4

 

Tang Nai Soon 4/4

 

Amrik Singh Harcharan Singh 4/4

 

 

3. Supply of Information

 

The Board meeting agenda and meeting papers are distributed 5 days prior to the meetings of the Board to ensure that Directors have sufficient time to deliberate the matters and effective discussion at the meetings. The Board members are supplied with full and timely information to enable them to discharge their duties.

 

 Presentations to the Board are prepared and delivered in a manner that ensures clear and adequate presentation of the subject matter. For accessibility and more effective administration of the board papers, it is made accessible electronically through secured means. All issues raised, discussions, deliberations, decisions and conclusions including dissenting views made at Board meetings with clear actions to be taken by responsible parties are recorded in the minutes.

 

All Directors have unrestricted and complete access to the information and are entitled to obtain full disclosure from the management. Directors may also interact directly with, or request further explanation, information or update on any aspects of the Group’s operations from the management.

 

In addition, the Board also has access to the advice and services of the Company Secretary who is responsible for ensuring that Board Meeting procedures are followed and that applicable rules and regulations are complied with. The proceedings and resolutions reached at each Board meeting are recorded in the Minutes Book kept at the registered office by Company Secretary. Besides Board meetings, the Board also exercises control on matters that requires its approval through the circulation of Directors’ resolutions.

 

As the Group’s quarterly results is one of the regular annual schedule of matters which is tabled to the Board for approval at the quarterly Board meetings, notices on the closed period for trading in SCGM’s securities are also circulated to remind Directors, key management personnel and principal officers who are privy to any sensitive information and knowledge in advance of whenever the closed period is applicable based on the targeted date of announcement of the Group’s quarterly results. This is to comply with the Main LR and the Capital Markets & Services Act 2007 requirements where key management personnel and principal officers of the Group are prohibited from trading in securities or any kind of property based on price sensitive information which has not been publicly announced within 30 calendar days before the targeted date of announcement of the quarterly results up to the date of announcement. In 2016, none of the Directors and principal officers dealt in SCGM’s securities during the closed period.

 

The Board will seek for independent professional advice, if necessary, at the Company's expense from time to time to enable the Board to discharge its duties in relation to matters being deliberated.

 

 

4. Nomination Committee

 

The present members of the Nomination Committee are as follows:

 

    1. Mr. Tang Nai Soon (Chairman)

    2. Mr. Amrik Singh Harcharan Singh

    3. Mr.Wong Tun Boon

 

The Nomination Committee comprise exclusively of Independent Non-Executive Directors. The terms of reference of Nomination Committee are as follows:

 

i)

Nomination and recommendation for appointment of the Board members;

ii)

Consider and recommend Board candidates for directorship;

iii)

To develop, maintain and review the criteria to be used in the recruitment process and annual assessment of directors;

iv)

Recommend to the board, candidates for re-election of directors by shareholders under the annual re-election provisions or retirement;

v)

Periodically report to the board on succession planning for the board chairman, directors and key management personnel;

vi)

Annually review the time required of non-executive and independent directors; and

vii)

Annually review the required mix of skills, experience, diversity and other qualities, including core competencies and effectiveness of the board, as a whole, the board committees and the contribution of each individual director.

 

 The process for Board appointment is as follows:

 

  1. Identify the vacancy;

  2. Identify the candidates;

  3. Evaluate of suitability of candidates;

  4. Meet shortlisted candidates;

  5. Find deliberation by the Nomination Committee; and

  6. Recommend to the Board.

 

 The Nomination Committee will hold a meeting at least once a year, additional meetings can be scheduled if necessary or upon request by any of its members. The minutes of the meeting of the Nomination Committee are circulated to all the members and it is properly kept at the registered office by Company Secretary.

 

Activities of the Nomination Committee for the financial year

 

 The members of the Committee reviewed the composition, mix of skills and independence of the Board. There is a process in place on the yearly review on the balance Board composition and Directors’ evaluation. The Board composition comprises of professional such as laws, accountant and business entrepreneur.

 

 The Nomination Committee assess the individual Directors through the Director Evaluation Form under the criteria of integrity and ethics, governance, strategic perspective, adding value, judgment and decision-making, teamwork, communication and commitment. The assessment of the Board is based on specific criteria, covering areas such as the Board structure, Board operations, roles and responsibilities of the Board, the Board Committee and the Chairman’s role and responsibilities.

 

The respective Director will abstain from evaluating their own Board performance. The Nomination Committee will rate the Board performance evaluation based on the consensus amongst the Nomination Committee. The Nomination Committee Chairman will make the appropriate recommendation to the Board. The Final decision is with the Board.

 

6. Directors' Training

 

The Board members shall appraise and keep abreast with the developments in the regulations and statutes relevant to the industry and to further enhance their skills and knowledge by attending the relevant seminars, training programmes, conferences, etc, from time to time.

 

Description of the type of training attended by the Director for financial year ended 30 April 2016 is as follows:-

 

 

Seminar/Training Programme

Date

Dato’ Sri Lee Hock Seng

 

  • Corporate Directors Advanced Programme (CDAP) ‘Mergers & Acquisitions’ by MINDA

  • FSCC 22000 Internal Audit Training by EmreST

  • FSCC 22000 Implementation Training by EmreST

  • FSCC 22000 Documentation Training by EmreST

  • Introduction to FSSC 22000 Responsibilities & Awareness Training by EmreST

  • ISO9001:2015 Implementation & Internal Audit Training by EmreST

20 & 21 October 2015

 

 

14 & 15 July 2015

 

1 & 2 August 2015

 

4 & 5 August 2015

 

24 & 25 October 2015

 

 

 

9 & 23 April 2016

 

Dato’ Sri Lee Hock Chai

 

  • Focus Group Series: Corporate Governance Disclosures by MINDA

  • Corporate Directors Onboarding Programme (CDOP) 2015 by MINDA

  • FSCC 22000 Internal Audit Training by EmreST

  • FSCC 22000 Implementation Training by EmreST

  • FSCC 22000 Documentation Training by EmreST

  • Introduction to FSSC 22000 Responsibilities & Awareness Training by EmreST

  • ISO9001:2015 Implementation & Internal Audit Training by EmreST

8 March 2016

 

25 & 26 November 2015

 

14 & 15 July 2015

 

 

1 & 2 August 2015

 

4 & 5 August 2015

 

24 & 25 October 2015

 

 

9 & 23 April 2016

 

Dato’ Sri Lee Hock Guan

 

  • Ring the Bell for Gender Equality”

  • Corporate Directors Onboarding Programme (CDOP) 2015 by MINDA

  • FSCC 22000 Internal Audit Training by EmreST

  • FSCC 22000 Implementation Training by EmreST

  • FSCC 22000 Documentation Training by EmreST

  • Introduction to FSSC 22000 Responsibilities & Awareness Training by EmreST

  • ISO9001:2015 Implementation & Internal Audit Training by EmreST

11 March 2016

25 & 26 November 2015

 

14 & 15 July 2015

 

1 & 2 August 2015

 

 

4 & 5 August 2015

 

24 & 25 October 2015

 

 

9 & 23 April 2016

Lee Hock Meng

 

  • FSCC 22000 Internal Audit Training by EmreST

  • FSCC 22000 Implementation Training by EmreST

  • FSCC 22000 Documentation Training by EmreST

  • Introduction to FSSC 22000 Responsibilities & Awareness Training by EmreST

  • ISO9001:2015 Implementation & Internal Audit Training by EmreST

14 & 15 July 2015

 

1 & 2 August 2015

 

4 & 5 August 2015

 

24 & 25 October 2015

 

 

 

9 & 23 April 2016

 

Wong Tun Boon

  • National GST Conference 2015 by ctim

  • Seminar Percukaian Kebangsaan 2015 by LHDN Malaysia

  • Risk Management And Internal Control Workshop: Workshop for Audit Committee Members by CG Board Asia Pacific & Bursa Malaysia

25 & 26 August 2015

 

9 November 2015

 

7 April 2016

 

 

 

Tang Nai Soon

  • Malaysia’s Economic Outlook Seminar by MCA School of Political Studies

  • Audit Oversight Board New Auditors’ Report – Sharing the UK Experience by Bursa Malaysia

  • Risk Management And Internal Control Workshop: Workshop for Audit Committee Members by CG Board Asia Pacific & Bursa Malaysia

  • Conference on the Belt and Road Initiative by MCA’s Institute of Strategy Analysis and Policy Research

25 October 2015

 

13 January 2016

 

 

7 April 2016

 

 

 

9 April 2016

Amrik Singh Harcharan Singh

  • Risk Management And Internal Control Workshop: Workshop for Audit Committee Members by CG Board Asia Pacific & Bursa Malaysia

7 April 2016

 

 

 The Board of Directors will continue to evaluate and determine the training needs that will assist the Directors in discharging of their duties.

 

7. Qualified and competent Company Secretary

 

The Directors have unrestricted access to the advice and services of the Company Secretary to enable them to discharge their duties effectively. The Board is regularly updated and advised by the Company Secretary who is qualified, experienced and competent on statutory and regulatory requirements, and the resultant implications of any changes therein to the Company and Directors in relation to their duties and responsibilities. The Company Secretary advises the Board on matters relating to corporate governance, compliance with the Main LR, Capital Markets and Services Act 2007 and Companies Act 1965, preparation and conduct of the Board, Committee and General Meetings.

 

 B. DIRECTORS' REMUNERATION

 

1. The Level and Make-up

 

The remuneration policy of the Group for the Executive Chairman and the Executive Directors are structured to link rewards to corporate and individual performance in order to retain staff with the relevant skills and experience to meet the challenges of the Group. For Non-Executive Directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the particular Non-Executive Director concerned.

 

 2. Remuneration Committee

 

 The Remuneration Committee is authorised by Board to establish formal and transparent remuneration policies and procedures to attract and retain directors.

 

The present members of the Remuneration Committee are as follows:

 

 

    1. Mr. Wong Tun Boon (Chairman)

    2. Dato’ Sri Lee Hock Seng

    3. Mr. Tang Nai Soon

 

 

The terms of reference of Remuneration Committee are as follows:

 

  1. Set, review, recommend and advise the policy framework on all elements of the remuneration such as reward structure, fringe benefits and other terms of employment of Executive Chairman, Managing Director and Executive Directors having regard to the overall Group policy guidelines/framework;

  2. Advise the Board on the performance of the Executive Chairman, Managing Director and Executive Directors and an assessment of his/her entitlement to performance related pay; and

  3. Review and propose the remuneration package of the Executive Directors and senior management staff.

 

 

The remuneration policy of the Group for all Executive Directors and senior management shall be recommended by the Remuneration Committee for the Board’s approval with the Directors concerned abstaining from deliberations and voting on decisions in respect of their individual remuneration. The fees payable to the Independent Non-Executive Directors shall be recommended by the Board subject to the approval of shareholders at Annual General Meeting.

 

 

The Committee meets at least once a year, additional meetings can be scheduled if necessary. No Director shall take part in decisions pertaining to his own remuneration.

 

 

3. Disclosure

 

The details of the Directors' remuneration for the financial year ended 30 April 2016 in respective bands of RM50,000 are as follows: -

 

Range of Remuneration

Executive

Non-Executive

RM50,000 & below

-

3

RM650,001 to RM700,000

1

-

RM750,001 to RM800,000

2

-

RM800,001 to RM850,000

1

-

 

The following table outlines the remuneration of the Directors is categorised below:

 

NO.

NAME OF DIRECTORS

FEE (RM)

SALARY (RM)

BONUS (RM)

ALLOWANCE (RM)

TOTAL AMOUNT (RM)

SCGM

SUBSIDIARY

SCGM

SUBSIDIARY

SCGM

SUBSIDIARY

SCGM

SUBSIDIARY

EXECUTIVE DIRECTORS

 

 

 

 

 

 

 

 

1

Dato’ Sri Lee Hock Seng

-

-

-

720,000.00

-

100,000.00

-

-

820,000.00

2

Dato’ Sri Lee Hock Chai

-

-

-

684,000.00

-

100,000.00

-

-

784,000.00

3

Dato’ Sri Lee Hock Guan

-

-

-

684,000.00

-

100,000.00

-

-

784,000.00

4

Lee Hock Meng

-

-

-

600,000.00

-

75,000.00

-

-

675,000.00

INDEPENDENCE AND NON-EXECUTIVE DIRECTORS

 

 

 

 

 

 

 

5

Tang Nai Soon

24,000.00

-

-

-

-

-

1,000.00

-

25,000.00

6

Wong Tun Boon

24,000.00

-

-

-

-

-

1,000.00

-

25,000.00

7

Amrik Singh Harcharan Singh

24,000.00

-

-

-

-

-

1,000.00

-

25,000.00

 

 

C. RELATIONSHIP WITH SHAREHOLDERS

 

The Board maintains an effective communications policy that enables both the Board and the management to communicate effectively with its shareholders and the public. The policy effectively interprets the operations of the Group to the shareholders and accommodates feedback from shareholders, which are factored into the Group's business decision.

 

The Chairman is officially appointed as the authorised person to speak and release the public information for and on behalf of the Group.

 The Board communicates information on the operations, activities and performance of the Group to the shareholders, stakeholders and the public through the following:

 

    1. The Annual Report, which contains the financial and operational review of the Company and the Group's business, corporate information, financial statements and information on Audit Committee and Board of Directors;

    2. Announcements made to the Bursa Malaysia, which includes announcements on quarterly financial results, circular and various announcements made via Bursa Link in full compliance with regulatory authorities’ disclosure requirements;

    3. Annual General Meeting, the primary engagement platform between the Board and shareholders of the Group;

    4. Quarterly results and Investors’ Briefing, SCGM hold the investors’ briefing which chaired by the Chairman immediately after the release of quarterly results to Bursa Securities to facilitate timely publication and/or dissemination of analysts’ reports to the investing community;

    5. The Corporate’s website - https://www.scgmbhd.com/; and

    6. Media release.

 The General Meeting serves as an important means for shareholders' communication. Notice of the Annual General Meeting and Annual Reports are sent to shareholders twenty one (21) days prior to the meeting. At each Annual General Meeting, the Board presents the performance and progress of the t Group and provides shareholders with the opportunity to raise questions and seek clarification on the business activities pertaining to the Group, agenda of the meetings and its proposed resolutions. The Chairman and the Board will respond to the questions raised by the shareholders during the Annual General Meeting. The Board ensures each item of special business included in the notice will be accompanied by an explanatory statement on the effects of the proposed resolution.

 

In line with good corporate governance and amendments to the Main LR, all resolutions tabled at general meetings held on or after 1 July 2016 will be voted by way of poll.

 Matters reserved for shareholders’ approval at Annual General Meeting include the following:-

 

  1. Adoption of Audited Financial Statements;

  2. Distribution of final dividends; if any;

  3. Re-election of Directors;

  4. Payment of Directors’ fees; and

  5. Appointment/re-appointment of external auditors.

 

D. ACCOUNTABILITY AND AUDIT

 

The Board aims to present a balanced and understandable assessment of the Company and the Group's position and prospect through the annual financial statements and quarterly announcements of results to the Bursa Malaysia. The Directors are responsible in ensuring that the annual financial statements are prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.

 

 

1. Audit Committee

 

 The Board is assisted by the Audit Committee in supporting oversight functions of the Board on the Group’s financial reporting, risk management and internal control systems and ensuring high corporate governance practices.

 

The members of the Audit Committee are as follows:

 

a. Mr. Wong Tun Boon (Chairman)

 

b. Mr. Tang Nai Soon

 

c. Mr. Amrik Singh Harcharan Singh

 

The terms of reference, details of the composition and the summary of work of the Audit Committee during the financial year are set out in the Audit Committee Report included in this Annual Report.

 

 2. Financial Reporting

 

 The Directors are committed to ensure the Group has adopted appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates and all applicable approved accounting standards for the preparation of the audited financial statements and quarterly announcement of results. In this respect, the Board through the Audit Committee oversees the process and the integrity and quality of financial reporting, annually and quarterly. The Audit Committee, in this respect, assists the Board by reviewing the financial statements and quarterly announcements of results to ensure completeness, accuracy and adequacy before recommending the same for the Board’s approval.

 

The Directors, in preparation of the financial statements, have requested the Auditors to take whatever steps and to undertake whatever inspections they consider to be appropriate to enable them to render their audit report. The Directors are responsible to ensure the annual financial statements are prepared in accordance with the provision of the Companies’ Act, 1965 and applicable approved accounting standards in Malaysia, so as to give a true and fair view of the state of affairs of the Group and the Company.

 

A statement by the Directors of their responsibilities in preparing the financial statements is set out separately on page 137 of this Annual Report.The details of the Company’s and Group’s financial statements for the financial year ended 30 April 2016 can be found on page 28 to 98 of the Annual Report.

 

3. Relationship with Auditors

 

The Audit Committee manages and maintains a transparent and professional relationship with its external and internal auditors on behalf of the Board. The Audit Committee considers the re-appointment, remuneration and terms of engagement of the external and internal auditors annually.

 

The Audit Committee meets with the external and internal auditors to discuss their audit plans, audit findings and other special matters that require the Board’s attention and the financial statements. The external and internal auditors attend Audit Committee Meetings of the Company whenever requested to do so.

 

Assessment of Suitability and Independence of External Auditors

 

The Audit Committee reviews and monitors the suitability and independence of the external auditors. The external auditors have confirmed that they were, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

 

The external auditors can be engaged to perform non-audit services if there are clear efficiencies and value-added benefits to the Group and a detailed review of non-audit fees paid to the external auditors is undertaken by the Audit Committee. These procedures are in place to ensure that neither their independence nor their objectivity is put at risk, and steps are taken to ensure that this does not impede the external auditors audit works. The Audit Committee remains confident that the objectivity and independence of the external auditors are not in any way impaired by reason of the non-audit services provided to the Group.

 

The Audit Committee would meet the external auditors to review the scope of audit process, the audit findings and the audited financial statements, without any presence of the Executive Director and the Management. The external auditors are invited to attend the AGM of the Group and are available to the shareholders’ questions on the conduct of the statutory audit and the preparation and contents of their audit report.

 

Details of statutory audit, audit-related and non-audit fees paid/payable in the financial year ended 30 April 2016 to the external auditors are set out below:-

 

 Fees paid/payable to SJ Grant Thornton RM’000

 

Audit Fees 59

 

Audit Related Fees1 7

 

Tax and tax related services2 13

 

 

1 Fees incurred in connection with performance of review of consolidation accounts and review of Statement of Risk Management and Internal Control

 

2 Fees incurred for assisting the Group in connection with tax compliance and advisory services

 

 

4. Internal Control

 

 The Board recognises the importance of sound internal control for good corporate governance. As such, an internal audit function is continuously reviewed and strengthened. The internal audit function was outsourced to a professional firm to assist the Audit Committee in reviewing the internal control of the Group and to highlight areas for management and operational improvement.

 

 The state of internal control of the Group is explained in greater detail on page 138 and 142 of this Annual Report.

 

 

 

E. ADDITIONAL INFORMATION

 

1. Material Contracts involving Directors’ and Major Shareholders’ Interest

 

 There were no material contracts entered into by the Company and its subsidiary involving the Directors’ and major shareholders’ interest during the financial year.

 

 2. Utilisation of Proceeds

 

 The status of utilisation of proceeds arising from Private Placement as at 30 April 2016 is as follows:-

 

 

 

Purposes

Proposed Utilisation Amount

 

Actual Utilisation Amount

Intended Timeframe

For

 

 

Balance

 

RM’000

 

RM’000

 

RM’000

%

 

 

 

 

 

 

 

Capital expenditure

22,000

 

6,075

Within 24 months

15,925

72.4%

Working capital

8,920

 

8,352

Within 12 months

568

6.4%

Estimates expenses for Private Placement

 

400

 

 

393

 

Within 1 month

 

7

 

1.8%

 

 

 

 

 

 

 

 

31,320

 

14,820

 

16,500

52.7%

 

 As disclosed in the Proposal in relation to the Private Placement dated 12 November 2015, any differences between the illustrated proceeds stated in the Proposal and the actual proceeds raised from the Proposed Private Placement (which is dependent on the final issue price of the Placement Shares and the final number of Placement Shares issued) as well as any differences in the actual expenses in relation to the Proposed Private Placement shall be adjusted to the allocation for working capital requirements of the Group.

 

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