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Corporate Governance

Board Charter

Objective

To be a leading multinational organisation in biscuits, cookies, snacks and beverage mix.
 

Mission

To offer tasty and wholesome biscuits, cookies, snacks and beverages to consumers, safekeep the best interest of shareholders and reward employees fairly.
 

Corporate Philosophy

  • Manufacture and distribute quality, delicious, reliable and consistent products;

  • Consume quality, reliable and consistent raw materials.

  • Ensure all products produced by Hup Seng Group are HALAL certified by authorised Islamic certification bodies.

  • Converse environment by consciously adopting the most energy efficient way in operation while minimising waste.

  • Safeguard shareholders' value by constantly attaining short and long term sales and profit growth.

 

Board Charter

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1. Introduction

This Board Charter is applicable to Hup Seng Industries Bhd ("HSIB" or the "Company") and all three of its subsidiaries, namely Hup Seng Perusahaan Makanan (M) Sdn. Bhd. ("HSPM"), Hup Seng Hoon Yong Brothers Sdn. Bhd. ("HSHY") and In-Comix Industries Sdn. Bhd. ("In-Comix"). Collectively, they are referred as the Group.


The Board of Directors shall achieve and maintain sound corporate governance by monitoring the internal control system and establishing a corporate culture of fairness, accountability, transparency, and continuous improvement within the Group. The Board members shall discharge their duties by optimising the operations of the Company and its subsidiaries in order to maximise shareholders' values. As such, objective, mission and corporate philosophy are established as a guide for the Board and management of the Group.

This Board Charter enlisted the duties and responsibilities, functions, composition, operation and processes of the Board with reference but not limited to the following applicable laws, rules and regulations in Malaysia:-

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  • Malaysian Code of Corporate Governance 2021 (effective from 28 April 2021);

  • Companies Act 2016;

  • Main Market Listing Requirements ("LR") of Bursa Malaysia Securities Berhad ("Bursa Securities");

  • Malaysia Anti-Corruption Commission Act 2009 (“MACC”);

  • Constitution of the Company.

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The Board Charter has been endorsed by the Board and subject to review periodically to ensure its relevance.

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2. Roles and Responsibilities of Chairman and Managing Director

The roles and responsibilities of Chairman and Managing Director are separated and held by different individuals.  The Non-Executive Chairman primarily ensures that conduct and working of the Board is in an orderly and effective manner while the Managing Director manages the daily running of business and implementation of Board policies within the Group.  The Managing Director is accountable for the profitable operation and strategic development of the Group, and obliged to refer major matters back to the Board.

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The responsibilities of Chairman are:- 

  • providing leadership for the Board so that the Board can perform its responsibilities effectively; 

  • setting the Board agenda and ensuring that Board members receive complete and accurate information in a timely manner; 

  • leading Board meetings and discussions; 

  • encouraging active participation and allowing dissenting views to be freely expressed; 

  • managing the interface between Board and management; 

  • ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole; and 

  • leading the Board in establishing and monitoring good corporate governance practices in the Company and the Subsidiaries.

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3. Duties and Responsibilities of the Board

The Board of Directors leads, manages and monitors the Group’s strategic planning, financial and operational management, risk management and internal control systems, governance of sustainability and succession planning.

 

The Board of Directors takes on the following responsibilities to discharge its functions and duties:-

  • Set out and review strategic plan(s) for the Group;

  • Direct and monitor business operations of the Group while assessing if the businesses are properly managed;

  • Keep track of the risk management practices of the Group and monitor the implementation of internal control systems to mitigate identified risks;

  • Establish sound and effective Board Committees;

  • Review the adequacy and integrity of the business practices of the Group to ensure compliance with applicable laws, regulations, rules and guidelines;

  • Promote good corporate governance culture together with Senior Management, which reinforces ethical, prudent and professional behaviour within the Company and the Subsidiaries;

  • Review, challenge and decide on management’s proposals for the Company and the Subsidiaries, and monitor the implementation process carried out by the management;

  • Ensure that the strategic plan of the Group supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;

  • Supervise and assess management performance to determine whether the business is being properly managed;

  • Ensure a sound framework for risk management and internal control;

  • Understand the principal risks of the Group’s business and recognise that business decisions involve the taking of tolerable and appropriate risks;

  • Set the risk appetite within which the Board expects management to operate and ensure that there is an appropriate risk management framework to identify, analyse, evaluate, manage and monitor significant financial, strategic, operational risks;

  • Ensure that Senior Management has the necessary skills and experience, and there are measures in place to provide for the orderly succession of Board and Senior Management;

  • Ensure that the Group has in place procedures to enable effective communication with stakeholders; and

  • Ensure the integrity of the Group’s financial and non-financial reporting.

 

4. Board Composition

The Board shall keep a fair mix of Board members who have various professional expertise, industrial knowledge and working experience in various fields that contribute effectively to the formulating as well as the achieving of corporate goals and strategic plans of the Group. The Board must meet the requirements imposed by Bursa Securities of having at least one-third of its Board members being Independent Non-Executive Directors. This board structure provides an effective balance of corporate accountability to the Group as the Independent Directors contribute their independent judgment and knowledge to the management whilst the Executive Directors conduct their day-to-day duties.

Gender diversity is embedded in the corporate culture to provide a healthy mix of both genders.

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5. Board Committees

The Board of Directors has established Board Committees to deal with important and core matters such as account, financial and internal audit of the Group (Audit Committee), human resources and succession planning (Nominating Committee), remuneration packages (Remuneration Committee), risk management and sustainability management (Risk Management and Sustainability Committee).

 

Terms of Reference of Audit Committee, Nominating Committee and Remuneration Committee can be found here.

 

The Board Committees have the authority to examine specific issues within their respective terms of reference as approved by the Board of Directors and subsequently report to the Board with their findings and recommendations.  Meetings of the Board Committees are minuted and included as agenda items for deliberation at the meeting of the Board of Directors.  The final decision rests upon the Board of Directors.

 

6. Independent Directors

Independent Directors are appointed to the Board after assessing the independence of the directors by adopting the Independence Criteria as set out in Main Market Practice Note 13.

 

Tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. After the ninth year, an independent director may continue to serve the Board subject to the director’s re-designation as a non-independent director. Subject to the annual approval of the Company’s shareholders, the Board may recommend and provide strong justification to retain an independent director who has been as an independent director beyond nine (9) years cumulatively. In the case of retaining an independent director with tenure of more than nine (9) years, an annual shareholders’ approval ought to be sought through a two-tier voting process.

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A Senior Independent Director (“SID”) shall be appointed and the role of the SID is as follows:-  

  • A sounding board for the Chairman;

  • An intermediary for other Directors when necessary; and

  • The point of contact for shareholders and other stakeholders.

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7. Role of the Company Secretary

The Board shall appoint suitably qualified and competent Company Secretary who is accountable to the Board and is responsible for: 

  • preparing meeting agendas;

  • co-ordinating Board and Committee meetings as well as General Meetings and preparing the minutes thereafter;

  • advising the Board on procedural and regulatory requirements;

  • attending to all statutory and other filings as well as ensuring compliance with the statutory requirements of the Companies Act 2016, the Listing Requirements and other rules and regulations.

 

8. Directors' access to Advice and Information

The Board members have full and unrestricted access to all information pertaining to the Group’s business affairs.  When necessary, the Board members may seek external professional advice, whether as a full Board or in their individual capacity, to enable them to discharge their duties with adequate knowledge at the expense of the Company.  All directors may gain full access to the advice and services of the Company Secretary, who is responsible for advising and ensuring that Board procedures are followed and that relevant rules and regulations are complied with.  The Company Secretary attends all Board meetings, and all proceedings and conclusion from the Board meetings are minuted and signed by Chairman.

 

9. Mandatory and Continued Education Programme

Directors are encouraged to attend any form of training to enhance their knowledge and expertise in relations to the industry, laws and regulations, business environment and etc., to enable them to discharge their duties. To date, all existing Directors have attended the Mandatory Accreditation Programme ("MAP") and sufficient Continuing Education Programme ("CEP") as required by Bursa Securities.

Directors are updated on the recent developments in the areas of statutory and regulatory requirements from briefings by the External Auditors, Company Secretary and the Internal Auditors during the Committee and Board Meetings.

 

10. Board Meetings

The Board meetings are scheduled in advance, and are held at least once every quarter, to deliberate on business operations and developments, review performance and risk of business, financial performance of the Group, propose dividend, approve the release of the quarterly and full year results and discuss corporate exercises in the best interest of the shareholders and the Group.

 

The Board meets the requirements imposed by Bursa Securities of having one-third of its Board members being Independent Non-Executive Directors. This board structure provides an effective balance of corporate accountability to the Group as the Independent Directors contribute their independent judgment and knowledge to the management whilst the Executive Directors conduct their day-to-day duties.

 

11. Remuneration of Directors and Senior Management Officers

Remuneration Committee of the Company will review the performance and commitment of the Group's Directors and senior management officers and ensuring their remuneration package reflects their involvement, responsibility undertaken, contributions and level of performance for the year. Then, the Remuneration Committee will recommend to the Board on the appropriateness of the remuneration package of the Directors and senior management officers based on their review.

Remunerations and fee of individual board members are disclosed in the Annual Report.

 

12. Investors Relations

The Annual Report, press release as well as disclosures and announcements to Bursa Securities, such as quarterly and annual financial results are the primary means of communication between the Company and shareholders. The Board acknowledges the importance of disseminating information adhering to the disclosure requirements of the Bursa Securities to the shareholders on a timely basis and consequently ensures that the investors are well informed of any major developments of the Group. Notice of the AGM is issued to the shareholders at least 21 days prior to the date of AGM, in which separate resolutions to be proposed at the AGM for each distinct issue are provided.

The AGM serves as the primary forum to foster dialogue with shareholders. The Board ensures that adequate time is allocated for the question and answer session so that shareholders can clarify matters in relation to resolutions being proposed at the meeting as well as operational and corporate affairs. Upon request, the Directors will also meet up with the investors, press and investment analysts, and disseminate information adhering to the disclosure requirements of Bursa Securities.

While conducting presentations and interviews, the Board takes necessary precautions to ensure that price sensitive and information regarded as material undisclosed information about the Group is not revealed until after the prescribed announcement to the Bursa Securities has been made. With all the above means, the Company strives to ensure that an open and transparent channel of communication is maintained with its shareholders, institutional investors and the investing public at large.

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This Board Charter was reviewed and approved by the Board of Directors on 10 November 2021.

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