Corporate Governance

The Board of Directors of Gunung Capital Berhad (“Gunung”) is committed to ensure that high standards of corporate governance are practiced throughout the Group and that integrity and fair dealing are paramount in all its activities with the objective of protecting the Group’s assets and enhancing shareholders’ value.

This Statement sets out the manner in which the Group has applied and the extent of compliance with the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2012 (MCCG 2012) for the financial year ended 31 December 2014.

Establish Clear Roles and Responsibilities

The Board is responsible for ensuring that shareholders’ value and interests are protected and enhanced. Various processes and systems are in place to assist the Board in carrying out their stewardship responsibility. The processes include the following:-

Clear Functions of the Board and Management

There is a clear separation of functions between the Board and Management. The Board adopts the concept of independence in tandem with the definition of “Independent Director” in Section 1.01 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). Although the position of Chairman and Chief Executive Officer are held by the same individual, it does not mean that independence is compromised. The Board is satisfied with the composition and good mix with three (3) Executive Directors and three (3) Independent Non-Executive Directors. The composition and number of Directors reflect the fair representation of all shareholders’ interest and investment. The Independent NonExecutive Directors with their different background and professions collectively form an effective Board with a mix of industry-specific knowledge and broad business and commercial experience. This balance enables the Board to provide strong and effective leadership and form an independent judgement with regards to various aspects of the Company’s business strategies and performance so as to ensure that the Group achieves the highest standards of performance, accountability and ethical behavior.

Board Duties and Responsibilities

The Board has the overall responsibility for controlling and overseeing the business affairs of the Group to ensure proper management. This includes adopting strategic plans, approving key business initiatives, major investments and fundin decisions, reviewing financial performance and developing corporate objectives. The Board’s role is to provide leadership of the Group within a framework of prudent and effective controls whilst ensuring risks are consistently assessed and controlled. Generally, the Board must ensure that the Company is being managed and its business conducted in accordance with high standards of accountability and transparency. It also determines succession plans for senior management and ensures adequate internal controls to identify and manage risks.

The roles and functions of the Board including the executive and non-executive Directors are clearly defined in the Board Charter which regulates how business is to be conducted by the Board in accordance with the principles of good corporate governance.

The Board has delegated certain responsibilities to the Audit Committee, Nomination Committee and Remuneration Committee. All committees have clearly defined terms of reference. The Chairman of the various committees will report to the Board the outcome of the committee meetings.

Formalised Ethical Standards through Code of Conduct

The Company has formalized a Code of Conduct for the Group. The objective of the Code of Conduct is to set out the ethical standards to all employees in their dealings with fellow colleagues, customers, shareholders, suppliers, competitors, the wider community and the environment.

Every employee must display and behave in a manner which is consistent with the Group’s philosophy and core values.

The following Code of Conduct must be adhered to at all times by all employees within the Group:-

  • Demonstrating commitment
  • Living the core values of the Group
  • Avoiding conflict of interest
  • Preventing bribery and corruption
  • Practicing confidentiality and data protection
  • Communicating externally and internally with ethics and within authority
  • Protecting company assets and resources
  • Giving equal opportunity, non-discrimination and fair employment
  • Ensuring safety and protecting the environment
  • Prohibiting insider trading

Strategies Promoting Sustainability

The Board promotes good corporate governance in the application of sustainability practices. The Board oversees the conduct of the Group’s business to evaluate whether the business is being managed sustainably with regards to the economy, social and environment.

Employees are rewarded for productivity improvements and contribution towards the achievement of the Group’s immediate and long-term objectives. The rewards encompass not only compensation and benefits but also performance recognition and professional development and career progression.

Access to Information and Advice

All scheduled meetings held during the year were preceded by a formal notice issued by the Company Secretary in consultation with the Chairman. The Chairman ensures that all Directors have full and timely access to information, with Board Papers distributed in advance of meetings. The notice for each of the meetings is accompanied by the minutes of preceding board meetings, together with relevant information and documents for matters on the agenda to enable the Directors to consider and deliberate knowledgeably on issues and facilitate informed decision making.

The Directors have access to all information within the Group in furtherance of their duty. All directors have unrestricted access to the advice and services of the Company Secretary and, whether as a full board or in their individual capacities, directors are also at liberty to take independent professional advice on any matter connected with the discharge of their responsibilities as they may deem necessary and appropriate, at the Company’s expense.

Qualified and Competent Company Secretary

The Company Secretary provides a central source of guidance and advice to the Board, on matters of ethics and good corporate governance. The Company Secretary is required to provide the directors, collectively and individually, with detailed guidance on their duties and responsibilities. The Company Secretary assists in determining board agenda, formulating governance, coordinates board assessment process and other board-related matters.

The Company Secretary ensures that all Board meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory register of the Company. The Company Secretary also keeps abreast of the evolving capital market environment, regulatory changes and developments in Corporate Governance through continuous training.

Board Charter

A Board Charter had been established and approved by the Board on 15 May 2013. The objectives of the Board Charter are to ensure that all Board members are aware of their duties and responsibilities as Board members, the various legislations and regulations affecting their conduct and that the principles and practices of good Corporate Governance are applied in all dealings by Board members individually and/or on behalf of the Group.

The Board Charter focuses on:

  • Boards’ roles and responsibilities;
  • Boards’ composition and balance;
  • Boards’ performance;
  • Boards’ meetings;
  • Remuneration policies;
  • Access to information and independent advice;
  • Financial reporting;
  • Stakeholder communication;
  • Company Secretary; and
  • Conflict of interest.

Strengthen Composition

Appointments to the Board and Re-election

Procedures relating to the appointment and re-election of Directors are contained in the Company’s Articles of Association. All Directors shall retire from office at least once every three (3) years but shall be eligible for re-election. Newly-appointed directors shall hold office until the next Annual General Meeting (AGM) and shall then be eligible for re-election.

The Directors who are due for re-election and/or re-appointment at the Annual General Meeting will first be assessed by the Nomination Committee, which will then submit its recommendation to the Board for deliberation and endorsement. Thereafter, shareholders’ approval will be sought for the re-election and/or re-appointment.

The Board continuously reviews its size and composition with particular consideration on its impact on the effective functioning of the Board.

Recruitment Process and Annual Assessment

The MCCG 2012 endorses as good practice, a formal procedure for appointment to the Board, with a Nomination Committee (“NC”) making recommendations to the Board. The NC carries out an annual review on the size and composition of the Board to ensure the selection of Board members with different mix of skills and core competencies necessary for the Board to discharge its duties effectively

The responsibilities of the NC include:-

  • Formulating the nomination, selection and succession policies for members of the Board
  • Making recommendations to the Board on new candidates for appointment and the reappointment/re-election of Directors to the Board
  • Reviewing the required mix of skills, experience and other qualities of the Board annually
  • Reviewing and recommending to the Board the appointment of members of Board Committees established by the Board annually
  • Establishing a set of performance criteria to evaluate the performance of each member of the Board, and reviewing the performance of the members of the Board
  • Ensuring that relevant education programmes are provided for new members of the Board, and reviewing the Directors’ continuing training programmes

The NC comprises two (2) Independent Non-Executive Directors.

Remuneration Policies and Procedures

The Directors are provided with appropriate directors’ fees subject to the approval of shareholders at the Annual General Meeting (“AGM”) and a meeting allowance for meetings attended.

The Remuneration Committee (“RC”) is entrusted with the role of determining and recommending suitable policies in respect of remuneration packages for Non-Executive Directors and Executive Directors of the Group to ensure that rewards commensurate with their experience and individual performances. The RC consists of two (2) Independent NonExecutive Directors and an Executive Director.

The Board as a whole determines the remuneration of Executive Directors based on experience and level of responsibilities undertaken. Each individual Director shall abstain from discussion pertaining to his own remuneration.

The Board is of the view that the disclosure of remuneration by appropriate components and bands are sufficient to meet the objectives set out in the Listing Requirements of Bursa Securities.

The details of the remuneration of the Directors of the Company for services rendered to the Group for the financial year ended 31 December 2014 are as follows:-

Executive Directors (RM) Non-Executive Directors (RM)
Remuneration
- Fees for financial year ended 31.12.2013 63,750 90,000
- Salaries & Other Emoluments 1,009,909 17,500

The number of Directors whose remuneration falls under the following remuneration bands:

Remuneration Bands Number of Directors
Executive Non-Executive
Below RM50,000 1 3
RM500,001 - RM550,000 1 -
RM750,001 - RM800,000 1 -

Reinforce Independence

Assessment of Independence Annually

The Board adopts the concept of independence in tandem with the definition of Independent Director in Section 1.01 of the Listing Requirements of Bursa Securities through the assistance of the NC. The Board also carries out an annual assessment of the independence of its independent directors.

All Directors retire by rotation and their respective re-election is subject to the shareholders’ approval at the AGM.

Tenure of Independent Directors

One of the recommendations of the MCCG 2012 states that the tenure of an independent director should not exceed a cumulative term of 9 years. However, the Nomination Committee has determined at the annual assessment carried out that Mr. Peter Wong Hoy Kim, who has served on the Board for more than 11 years, remain objective and independent in participating in the deliberations and decision making of the Board and Board Committees. The length of his service on the Board does not interfere with their exercise of independent judgment and act in the best interest of the Group notably in discharging his roles as the member of the Audit Committee, Nomination Committee and Remuneration Committee.

Shareholders’ Approval for the Re-Appointment of Non-Executive Director

The Board has reviewed and satisfied with the professional skill, contribution and independent judgement and that Mr. Peter Wong Hoy Kim is continuing with his appointment in the Board. Therefore, the Board recommends and proposes to his re-appointment as Independent Non-executive Director of the Company, to be tabled for shareholders’ approval at the forthcoming 20th AGM.

Composition of the Board

The Board has a balanced composition of Executive and Independent Non-Executive Directors such that no individual or group of individuals can dominate the Board’s decision-making powers and processes.

The Directors of the Group do not hold more than 5 directorships in public listed companies as prescribed by Bursa Securities Listing Requirement.

The Board currently consists of six (6) members; comprising three (3) Executive Directors (including Executive Chairman) and three (3) Independent Non-Executive Directors.

Board Meetings and Time Commitment

Board meetings are held at quarterly intervals with additional meetings held whenever necessary. Five (5) Board meetings were held during financial year ended 31 December 2014.

At each quarterly meeting, the Board deliberated upon a variety of issues including the Group’s financial results, corporate development, strategic decisions, business plan and directions of the Group, operational issues and compliance matters.

All the Directors have complied with the requirement to attend at least 50% of the Board meetings held in the financial year pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their duties and responsibilities as Directors of the Company. This is evidenced by their attendances at the Board and various Board Committees meetings held during the year.

In addition, all the Directors of the Company do not hold directorships of more than five (5) public listed companies and thus, able to commit sufficient time to the Company.

The attendance record of the Directors at Board meetings is as set out below: -

Directors Meeting Attendance
Dato’ Syed Abu Hussin bin Hafiz Syed Abdul Fasal 5/5
Iskandar Ibrahim 5/5
Peter Wong Hoy Kim 5/5
Shaiful Annuar bin Ahmad Shaffie 5/5
Malik Parvez Ahmad bin Nazir Ahmad 4/5
Beroz Nikmal bin Mirdin 5/5

Directors’ Training

The Directors have participated in relevant training programmes to keep abreast with the relevant changes in laws, regulations and development in the business environment. The Directors will continue to attend other training courses to equip themselves effectively and discharge their duties as Director on a continuous basis in compliance with Paragraph 15.08 of Bursa Securities Listing Requirements.

During the financial year ended 31 December 2014, all the Directors of the Company attended the following training programme and seminars:-

Directors Details of Training
Dato’ Syed Abu Hussin bin Hafiz Syed Abdul Fasal Overview of Goods & Services Tax (GST)
Iskandar Ibrahim Overview of Goods & Services Tax (GST)
Peter Wong Hoy Kim Overview of Goods & Services Tax (GST)
Shaiful Annuar bin Ahmad Shaffie Environmental Law in Global Society
Malik Parvez Ahmad bin Nazir Ahmad Managing Stakeholders’ Expectations in The Fast Changing Business Trends towards Value Creation
Overview of Goods & Services Tax (GST)
Beroz Nikmal bin Mirdin Overview of Goods & Services Tax (GST)

Uphold Integrity in Financial Reporting

Compliance with Applicable Financial Reporting Standards

The Board ensures the integrity of the Group’s financial reporting and fully recognises that accountability in financial disclosure forms an integral part of good corporate governance practices. The Board is responsible for ensuring that financial statements prepared for each financial year give a true and fair view of the Group’s state of affairs. The Directors took due care and reasonable steps to ensure that the requirements of accounting standards were fully met. Quarterly financial statements were reviewed by the Audit Committee and approved by the Board of Directors prior to their release to Bursa Securities.

Assessment of Suitability and Independence of External Auditors

The Audit Committee undertakes an annual assessment of the suitability and independence of the external auditors. Having assessed their performance, the Audit Committee will recommend their decision to the Board, upon which the shareholders’ approval will be sought at the AGM.

Recognise and Manage Risks

Framework to Manage Risks

The Board has established a sound framework to manage risks within the Group. The risk management and internal control system is regularly reviewed by Management and relevant recommendations is made to the Audit Committee and Board for approval. The Company continues to maintain and review its internal control procedures to ensure that its assets and its shareholders’ investments are protected.

Internal Audit Function

The Board has established an internal audit function within the Company, which reports directly to the Audit Committee. Details of the Group’s internal audit function are set out in the Audit Committee Report of this Annual Report.

The Statement on Risk Management and Internal Control of this Annual Report provides an overview of the state of internal control within the Group.

Ensure Timely and High Quality Disclosure

Corporate Disclosure Policy

The Group has in place a procedure for compliance with the Listing Requirements of Bursa Securities. The Company Secretary reviews all announcements to ensure accuracy and compliance. The Board reviews and approves all quarterly and other important announcements. The Board is mindful that information which is material is announced immediately

Besides that, the Board believes that the Company’s Annual Report is a vital source of essential information for shareholders and investors and other stakeholders. The Company strives to provide a high level of reporting and transparency as an added value for users.

Leverage on information technology

The Group maintains the following website that allows all shareholders and investors access to information about the Group:

www.gunung.com

Strengthen Relationship between Company and Shareholders

Shareholder Participation at General Meetings

The Board acknowledges the importance of effective communication with shareholders and the investment community, and adheres strictly to the disclosure requirements of Bursa Securities. The Board also recognises the importance of maintaining transparency and accountability to its shareholders and investors.

Quarterly reports on the Group’s results and announcements can be accessed from Bursa Securities’ website. In addition, the Group’s Annual Report contains a review of its financial performance, supported by facts and statistics. The AGM is the principal forum for dialogue with shareholders.

Shareholders are notified of the meeting and provided with a copy of the Annual Report at least 21 days before the meeting. At the AGM, the Board provides an opportunity for shareholders to raise questions pertaining to the business activities of the Group. All Directors are available to respond to questions from shareholders during these meetings. The external auditors are also present to provide professional and independent clarification on issues and concerns raised by the shareholders.

Poll Voting

The shareholders are given the opportunity to vote on the regular businesses of the AGM, viz. consideration of the financial statements, consideration and approval of directors’ fees, re-election of directors, re-appointment/appointment of auditors and special business if any, by a show of hands. In specific cases where required, the result would be determined by a poll.

The Chairman will explain the voting procedure before the commencement of any general meeting. The Board is mindful on the new requirement of mandatory poll voting on the resolution approving related party transactions pursuant to Paragraph 10.08(7A) of Bursa Securities Listing Requirement.

Communication and Engagements with Shareholders

As there may be instances where investors and shareholders may prefer to express their concerns to the Legal & Corporate Services unit of the Company, the Board has appointed Encik Syed Amir Nidzamuddin, the Head of Legal & Corporate Services to handle the concerns may be directed. At all times, investors and shareholders may contact the Company Secretary for information on the Group.

Any queries or concerns relating to the Group may be conveyed to the following persons:

  1. Encik Syed Amir Nidzamuddin
    Legal & Corporate Services
    Tel : 03-88618271
    Fax : 03-88618274
    Email : office@gunung.com.my
  2. Mr Eric Toh/Ms Jesslyn Ong
    Company Secretaries
    Tel : 04-28246055
    Email : cosec@gunung.com.my

COMPLIANCE STATEMENT

The Company is committed to achieving high standards of corporate governance throughout the Group and to the highest level of integrity and ethical standards in all its business dealings.

In this regard, the Board considers that the Group has complied substantially with the principles and recommendations as stipulated in the MCCG 2012 throughout the financial year ended 31 December 2014.

This Statement was made in accordance with a resolution of the Board of Directors at a meeting held on 28 April 2015.