OVERVIEW STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors of Protasco Berhad (“the Board”) believes in good corporate governance practices in line with the principles, requirements, and best practices specified in the Malaysian Code on Corporate Governance.


THE ROLE AND RESPONSIBILITIES OF THE BOARD

The Board is aware of its accountability to the shareholders and various stakeholders of Protasco Berhad in discharging its duty and regulatory role in building a sustainability business.

The Board is responsible for delivering shareholder value over the long term, through the Group’s culture, strategy, values and governance. The Independent Directors have a particular responsibility for challenging the Group’s strategy and monitoring the performance of Executive Directors against goals and objectives.

The Board is supported by the Audit, Nomination and Remuneration and Risk Management Committees.

Decisions on operational matters and the day-to-day management of the business are delegated to the Group Managing Director and its senior management. This includes implementing group policy and procedures, managing client and contractor service, monitoring financial performance and human resource management.

Board Charter

The Board has adopted a Board Charter which serves as a reference for the Directors.

The Board Charter sets out the roles, functions, composition, operations and processes of the Board which is intended to ensure that all the Board members are fully aware of their obligation in discharging their duties and responsibilities.

The Board Charter is available for reference at the company’s website www.protasco.com.my.

Code of Conducts

Director’s Code of Conducts is set out as the rules and values for the Directors in conducting their duties and responsibilities to the highest ethical standards.

The Director’s Code of Conduct is available for reference at the company’s website www.protasco.com.my.

Board Information

Board papers containing current and forecast results, governance, litigation and risk updates, and treasury and shareholders information are distributed in advance of the meeting to allow Directors have sufficient time for preparation. The Board received presentations from the Group Managing Director and senior management on issues within the Group.Board papers containing current quarter results, business plans, proposed projects, business risk, governance and litigation updates are distributed in advance of the meeting to allow Directors to have sufficient time for preparation. The Board received presentations from the Group Managing Director and senior management on issues within the Group

Company Secretary

Both company secretaries are qualified to act as company secretary under Section 235 of the Companies Act 2016. They are both Associates members of the Malaysia Institute of Chartered Secretaries and Administrators (“MAICSA”). The company secretaries provide support to the Board in fulfilling its fiduciary duties. They are responsible in advising the Board with regards to the Company’s constitution, Board policies and procedures, and its compliance with regulatory requirements, codes, guidance and legislations as well as best practices of corporate governance. All Directors have access to the advice and services of the company secretaries. The company secretaries ensure deliberations of Board and Board Committee meetings are well documented and maintained at the registered office of the Company.

Promote Sustainability

The Board recognises that sustainability is an integral part of its business. It supports the environmental, economic and social sustainability in its business operations.

For further information, please refer to the Sustainability Report on pages 16 to 33.

The Sustainability Policy is available for reference at the company’s website www.protasco.com.my.

Professional Advice

The Company provides the Board with full assistance and gives it complete access to necessary materials and relevant information. Together with proper counsel from qualified company secretaries and others, the Board has been able to discharge its functions properly. The Directors are also encouraged to make verifications and endorsements, and to seek external guidance.

Whistleblowing

The Board encourages employees and associates to report suspected or known misconduct, wrongdoing, corruption and instances of fraud, waste, and abuse involving the resources of the Group.

Whistleblowing Policy enables employees and associates to raise their concerns without fear.

The Whistleblowing Policy is available for reference at the company’s website www.protasco.com.my.

The following channels should be used by employees and associates to raise their concerns:

  • Via email : whistleblow@protasco.com.my
  • In writing to : The Chairman, Protasco Berhad, 2nd Floor, Corporate Block, Unipark Suria, Jalan Ikram-Uniten, 43000 Kajang, Selangor. Tel: 03 8738 3388

Composition of the Board

The Board aims to have diversity of skills, experience, knowledge and gender. The profiles of the Directors are set out on pages 34 to 41. These demonstrate a broad range of experience, expertise and sufficient calibre to bring independent judgement on issues of strategy, performance, resources and standards of conduct, which are vital to the success of the Group.

At present, there are eight members of the Board comprising five Independent Non-Executive Directors, one Non-Independent Non-Executive Director and two Executive Directors.

Appointments and Re-Election of Directors

In compliance with the Company’s Constitution, at each Annual General Meeting, one-third (1/3) of Directors or if their number is not three, the number nearest to one-third (1/3), shall retire from office at least once in three years. The Directors to retire shall be those who have been longest in office since their last re-election or appointment.

In compliance with the Company’s Constitution, at each Annual General Meeting, one-third (1/3) of Directors or if their number is not three, the number nearest to one-third (1/3), shall retire from office at least once in three years. The Directors to retire shall be those who have been longest in office since their last re-election or appointment.

Board Performance Evaluation

The Board undertakes performance evaluation annually which comprises Board assessment, self-assessment and assessment on board committees. The Chairman of the Nomination and Remuneration Committee will be presented with the analysis of the overall performance evaluation and deliberated at the Nomination and Remuneration Committee meeting. The Nomination and Remuneration Committee will access and identify areas which require improvement and recommend to the Board for action.

Independence

The Board considers that, notwithstanding their interests in the shares of the Company as set out in the Directors Interest on pages 65 to 66 of the Directors’ Report, all of the current Independent Directors are independent of the management of the Group and are free from any business or other relationship that could materially interfere with the exercise of their independent judgement.

Pursuant to the Succession Planning Policy of the Company, the tenure of Independent Director is capped at nine years of continuous service. In the event the Board intends to retain any Director as an Independent Director who has served beyond a consecutive or a cumulative term of nine years, the Board should justify and seek approval from the shareholders at the Company’s Annual General Meeting.

At the date of the Annual Report, the Board Chairman, Tan Sri Datuk Dr Hadenan Bin A Jalil (“Tan Sri Hadenan”), has served the Company for a consecutive or a cumulative term of nine years.

The Board has vide the Nomination and Remuneration Committee assessed the independence of Tan Sri Hadenan and was satisfied with his contributions and independent judgement that he brings to the Board.

The Board recommended the re-appointment of Tan Sri Hadenan as an Independent Non-Executive Director based on the justifications set out in the explanatory notes of the notice of the Annual General Meeting.

Chairman and Group Managing Director

The roles of Chairman and Group Managing Director are held by separate persons and have different responsibilities. The Chairman of the Board is an Independent Non-Executive Director.

Board Meetings

Board meeting attended in 2018
Tan Sri Datuk Dr Hadenan Bin A Jalil 5/5
Dato’ Sri Ir Chong Ket Pen 5/5
Dato’ Sri Su-Azian @ Muzaffar Bin Abd Rahman 5/5
Dato’ Mohd Hanif Bin Sher Mohamed (Retired on 30 May 2018) 3/3
Dato’ Tan Yee Boon 4/5
Mr Suhaimi Bin Badrul Jamil 5/5
Mr Ir Tan Heng Kui 5/5
Mr Lim Yew Ting 5/5
Ms Tham Wei Mei 5/5

Directors’ Training

Details of training programmes, conferences and forums attended by the Directors during the year under review are set out as follows:

Name Date Description of Training
Tan Sri Datuk Dr Hadenan Bin A Jalil 28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
Dato’ Sri Ir Chong Ket Pen 15 March 2018 Corporate Governance Briefing Sessions: Malaysian Code on Corporate Governance Reporting & Corporate Governance Guide, Bursa Malaysia.
  28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
Dato Sri Su-Azian @ Muzaffar Syah Bin Abd Rahman 28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
Dato’ Tan Yee Boon 28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
Mr Ir Tan Heng Kui 15 August 2018 Sales Tax & Service Tax: Re-introduction and Transitional Issues, Boardroom Corporate Services (KL) Sdn Bhd.
  28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
Mr Suhaimi Bin Badrul Jamil 28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
  9 & 10 October 2018 MIA International Accountants Conference 2018, Malaysian Institute of Accountants.
  17 October 2018 Deloitte MFRS 15 Revenue from Contracts with Customers, MFRS 9 Financial Instruments and MFRS 16 Leases training, Deloitte Malaysia.
Mr Lim Yew Ting 15 March 2018 Corporate Governance Briefing Sessions: Malaysian Code on Corporate Governance Reporting & Corporate Governance Guide, Bursa Malaysia.
  28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
  10 October 2018 Gearing Up For Corporate Liability, Corporate Anti-Corruption Compliance Centre
Ms Tham Wei Mei 12 & 13 March 2018 Mandatory Accreditation Programme, ICLiF.
  28 August 2018 Detecting Financial Frauds, Tricor Knowledge House Sdn Bhd.
  29 October 2018 The Independent Directors’ Programme: The Essence of Independence, ICLiF.
  18 December 2018 30% Club Board Mentoring Scheme Event, Securities Commissioner Malaysia.

FINANCIAL REPORTING

The Board takes responsibility to ensure that financial statements are prepared in accordance with the regulatory requirements and applicable financial reporting in Malaysia. The Board deliberates on financial statements and ensures that the Group has used appropriate accounting policies, supported by reasonable, and prudent judgment and estimates. The Audit Committee assists the Board by scrutinising the information to be disclosed. The Group’s financial statements are presented in pages 62 to 199 of this Annual Report.

RELATIONSHIP WITH THE AUDITORS

Through the Audit Committee, the Group has established a professional, transparent and appropriate relationship with the Group’s auditors, both internal and external, particularly in obtaining their professional advice towards ensuring full compliance with applicable accounting standards.

External Auditors

The Audit Committee met the external auditors twice during the year under review on 23 February 2018 and 22 November 2018 without the presence of the Executive Directors and Management to exchange independent views on matters which require the Committee’s attention.

The Audit Committee had assessed the suitability and independence of the external auditors. In its assessment, the Audit Committee considered several factors such as adequacy of experience, resources of the firm, the professional staff assigned to the audit, independence of Crowe Malaysia PLT and the provision of non-audit services rendered by Crowe Malaysia PLT for financial year 2018.

Crowe Malaysia PLT confirmed that they have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements for the financial year 2018.

Being satisfied with Crowe Malaysia’s PLT performance, technical competency and audit independence, the Audit Committee recommended to the Board to put forth a proposal for the re-appointment of Crowe Malaysia PLT as external auditors for financial year ending 2019 at the forthcoming Annual General Meeting.

Internal Auditors

The Board acknowledges their responsibility for the Group’s system of internal controls and reviews its effectiveness regularly via the Internal Audit Department which provides support to the Audit Committee in dispensing its responsibilities with respect to the adequacy and integrity of the system of internal controls within the Group. The internal audit function is independent of the operations of the Group and reports directly to the Audit Committee.

The works of the internal auditors during 2018 is set out in the Audit Committee Report on pages 47 to 48 in this Annual Report.

BOARD COMMITTEES

Audit Committee

The Audit Committee plays an active role in assisting the Board in discharging its responsibility. The full details of the composition, summary of the works of the Audit Committee are set out in the Audit Committee Report on page 47 of the Annual Report.

Board Risk Management Committee

The Board has established a Board Risk Management Committee to oversee the internal controls and risk management processes.

A Group Risk Management Committee is assisting the Board Risk Management Committee in identifying, mitigating and monitoring the risks of the Group.

The Group Risk Management Committee comprises management staff from the Accounts & Finance Department, Group Corporate Office and Business Units.

Significant risk matters that require the attention of the Board are reported to the Board Risk Management Committee. The Statement on Risk Management and Internal Control as set out in pages 56 to 58 of this Annual Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee assists the Board on matters relating to Board appointments including the composition of the Board Committees, reviews the performance of the Directors and Board Committees, and reviews Directors’ remunerations.

A summary of the Nomination and Remuneration Committee’s activities during the year is set out below:

  • Review the performance of the Directors and Board Committees;
  • Review the terms of office and performance of Audit Committee and each of its members;
  • Review the Directors’ fees & benefits;
  • Review the Group’s cost optimisation proposal;
  • Review the training needs of Directors; and
  • Review the Directors standing for re-election at the forthcoming Annual General Meeting.

Details of the Directors’ remuneration for the financial year ended 31 December 2018 are as follows:

directors fee

Top five Senior Management’s Remuneration for the financial year ended 31 December 2018 are as follows:

directors fee

CORPORATE DISCLOSURE

To ensure quality disclosure, the Company has a corporate disclosure policy to ensure accurate, clear and timely disclosure of material information and take reasonable steps to ensure that the general public has access to such information. The Company is committed to communicate the Company’s strategy, operational performance, financial results and other material developments to Bursa Malaysia, analysts, investors, shareholders and other stakeholders in a timely, open and comprehensive manner.

The Corporate Disclosure Policy is available at www.protasco.com.my.

GROUP CORPORATE WEBSITE

The Board is committed to leverage on information technology for effective dissemination of information in a timely manner. Protasco’s corporate website (www.protasco.com.my) provides easy access to information about the Group. Information available on the corporate website includes Protasco’s corporate profile, Board of Directors and Group senior management, financial results, annual reports, Group newsletters and latest corporate news.

In addition, stakeholders can obtain regulatory announcements made by Protasco to Bursa Malaysia at www.bursamalaysia.com.

ANNUAL REPORT

The Company’s annual report provides a comprehensive report on the Group’s operations and financial performance for the year under review. It provides full disclosure and is in compliance with the relevant regulations to ensure greater transparency. The annual report is printed in abridged format together with a digital version in CD-ROM format. An online version of the Annual Report is also available on Protasco’s corporate website.

ANNUAL GENERAL MEETING

The Annual General Meeting is the main delivery channel for dialogue with all shareholders. They are encouraged and are given opportunities to enquire about the Groups’ activities and prospects as well as to communicate their expectations and concerns.

The notices of Annual General Meeting are sent out to shareholders at least 28 days before the date of the meeting, exceeding the 21 days requirement under the Companies Act 2016 and Listing Requirements.

Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Shareholders can also contact the Company with their queries.

Shareholders are encouraged to be aware of their rights with regards to the convening of general meetings, appointment of proxies, demand for poll voting and access to information. The details of shareholder’s rights are available at www.protasco.com.my.

In line with the Listing Requirements on strengthening good Corporate Governance Practice, the Company had conducted electronic poll voting in General Meeting. An independent party was appointed to carry out the polling.

INVESTOR RELATIONS

The Company’s Investor Relations Department plays an important role in conducting regular dialogues and discussions with shareholders, fund managers, journalists and financial analysts to update them on business performance, operations and corporate developments as well as obtaining feedback and discuss matters of common interests.

In addition, the Company issues timely release of its financial results and other mandatory announcements and responds promptly to enquiries from investors, regulators, the public and financial analysts.

The Company has a dedicated website, www.protasco.com.my, designed to assist its stakeholders. The Company has subscribed to Bursa Malaysia website linking service so that the Company’s announcements made to Bursa Malaysia can be retrieved concurrently from both websites.

Investor Relations Contact:
Ho Chun Fuat, Chief Financial Officer
Tel: 603-8738 3388 Fax: 603-8926 4023
Email: ho.cf@protasco.com.my

This statement is prepared in compliance with the Main Market Listing Requirements and it is to be read together with the Corporate Governance Report 2018 of the Company which is available in Protasco Berhad’s website, www.protasco.com.my.