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

1. Introduction

This Board Charter is applicable to Hup Seng Industries Bhd ("HSIB") 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:-

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

  • Malaysian Code of Corporate Governance 2017;

  • Companies Act, 2016;

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

  • Memorandum and Articles ("M&A") of the Company.

2. Roles and Responsibilities of Chairmen and Managing Director

The roles and responsibilities of Chairmen and Managing Director must be separated and held by different individuals. The responsibility of Non-Executive Chairman is primarily to ensure that conduct and working of the Board is in an orderly and effective manner whilst the Independent Non-Executive Co-Chairman is appointed to provide specific professional services, liaise with investors and deal with technical corporate matters. Meanwhile, 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.

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 assessment and internal control systems 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.

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 shall be embedded in the corporate culture to provide a healthy mix of both genders.

5. Re-Election

Article 76 of the Articles of Association of the Company provides that all the Directors of the Company shall retire from office once at least in every three (3) years but shall be eligible for re-election. The Articles of Association also provide that at the Annual General Meeting ("AGM") in every subsequent year, one-third (1/3) of the existing Directors or if their number is not three (3) or a multiple of three (3), then the number nearest to one-third (1/3) shall retire from office and be eligible for re-election.

According to Article 83 of the Articles of Association of the Company, Directors who are appointed by the Board are subject to election by shareholders at the first opportunity after their appointment.

 

6. 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) and remuneration packages (Remuneration Committee).

These 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.

 

7. Independent Directors

Independent Directors are appointed to the Board after assessing the independence of the directors by adopting the Independence Criteria as set out by the Main Market LR. 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 obtaining the approval of the Company's shareholders, the Board may recommend and provide strong justification in the event it retains an independent director who has been as an independent director for nine (9) years cumulatively.

8. 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 1965, the Listing Requirements and other rules and regulations.

 

9. 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.

 

10. 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.

 

11. 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.

 

12. 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.

 

13. 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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Hup Seng Industries Berhad  199101015786 (226098-P)  (Incorporated in Malaysia)