CORPORATE GOVERNANCE REPORT

STOCK CODE : 7235

COMPANY NAME : Superlon Holdings Berhad
FINANCIAL YEAR : April 30, 2020

OUTLINE:

SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing
Requirements.

SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES

PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA
MALAYSIA
Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures)
of the Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is
only applicable for financial institutions or any other institutions that are listed on the
Exchange that are required to comply with the above Guidelines.

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SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing
Requirements.

Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.

Practice 1.1
The board should set the company’s strategic aims, ensure that the necessary resources are
in place for the company to meet its objectives and review management performance. The
board should set the company’s values and standards, and ensure that its obligations to its
shareholders and other stakeholders are understood and met.

Application : Applied

Explanation on : The Board sets the strategic direction of the Group, establishes the
application of the mission and visions for the management and continuously monitors
practice its performance so as to protect and enhance shareholders’ value.
The Board is responsible for the preparation of the Company’s and
Group’s financial statements in accordance with the provisions of
the Companies Act 2016 (“Act”) and the applicable approved
accounting standards in Malaysia, overall strategic planning, risk
management, system of internal controls, succession planning,
investor relations programme, sustainability as well as the
corporate governance within the Group.

The Board is committed to practising good corporate governance to

steer the Superlon Group towards enhancing business value and
long term value for its stakeholders as the underlying principle in
discharging its responsibilities.

The Board delegates some of its authorities and discretion to the

Managing Director cum CEO, Executive Directors and management
as well as the Board Committees.

To assist the Board in fulfilling its roles, the board has three (3)
committees, namely Audit Committee, Nomination Committee and
Remuneration Committee, to support and assist in discharging its
fiduciary duties and responsibilities. The respective functions and
terms of reference and authority of the board committees have
been defined by the Board. The committees report and make
recommendations to the Board on matters delegated to them for
deliberation. The ultimate responsibility for the final decisions on all
matters lies with the Board.

As and when necessary, the Board conducts a review of the

delegation of responsibilities for the Company to adapt dynamically

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to the changing circumstances.

The Board assumes the following responsibilities, amongst others:-

(a) Reviewing and adopting the Company’s strategic plans

The Board has in place a strategy planning process, wherein

financials and strategies are presented for discussion quarterly
and the Management reports on the results and challenges met.
The Board objectively reviews and monitors the implementation
of the plan by management and provides input and feedback to
the management. Budgets are prepared periodically for the
Board to assess the anticipation and to head towards the best
outcome.

(b) Overseeing the conduct of the Company’s business

The Board oversees the performance of the Management by

reviewing the actual performance and financial ratios of the
Group, and provides guidance to the Management on measures
to be undertaken to improve business performance and
minimise risk areas.

(c) Identifying principal risks and ensuring the implementation of

appropriate internal controls and mitigation measures

The Audit Committee, external auditors and internal auditors

assist the Board to oversee the risk management and internal
control framework of the Group. High risk areas are highlighted
and the adequacy of compliance and internal controls
throughout the organisation are reported to the Audit
Committee and the Board.

(d) Succession planning

The Nomination Committee review potential candidates for the

Board. The organisation chart is periodically reviewed to ensure
that candidates of sufficient calibre are in place to manage the
business and that there is orderly succession of senior
management.

(e) Overseeing the development and implementation of a

shareholder communication policy for the Company

The Board acknowledges the importance of timely

dissemination of information to its shareholders.
Announcements on the major events of the Company and
financial releases provide the shareholders and potential
investors with update of the Group’s activities and financial
performances. The General Meetings act as the principal forum
of dialogue with shareholders. Shareholders are notified of the

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 meeting and provided with a copy of the Company’s Annual
Report and/or Circular to Shareholder prior thereto in
accordance with the stipulated period set out in Main Market
Listing Requirements (“LR”) of Bursa Malaysia Securities Bhd
(“Bursa Securities”) and the Act in order to enable shareholders
to fully evaluation the resolutions being proposed. At each
AGM, the Board presents the Group’s results and shareholders
are given the opportunities to raise questions pertaining to the
Group, the resolutions being proposed and the business of
Superlon in general. Members of the Board and the auditors of
the Company are available at the AGM to respond to all queries
and to provide clarification on issues and concerns raised by the
shareholders. The Company has a website where access to its
Annual Reports, announcements, quarterly financial results and
other relevant information.

Mr Lin, Po-Chih, an Independent Director, together with Mr Liu

Han-Chao, the Executive Director, represent Superlon to whom
concerns of the shareholders and other stakeholders may be
conveyed.

(f) Reviewing the adequacy and the integrity of the management

information and internal controls system of the Company

The Board outsourced the internal audit functions to an

external party to ensure the adequacy and integrity of the
Company’s internal control functions. Further details of the
internal control systems are set out in the Statement on Risk
Management and Internal Control.

A Board Charter is established to outline the Board’s duties and

responsibilities and state Superlon’s commitment to corporate
governance and aims to ensure that appropriate accountability
and control systems are in place. The Board Charter, which will
be reviewed by the Board as and when required, is published on
the corporate website.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

4
Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.

Practice 1.2
A Chairman of the board who is responsible for instilling good corporate governance
practices, leadership and effectiveness of the board is appointed.

Application : Applied

Explanation on : Mr Chun Kwong Pong leads the Board as the Chairman of the
application of the Company. His profile can be found in the Company’s Annual Report.
practice
As depicted in the Board Charter, the Chairman is mainly responsible
for:-
(a) the overseeing and leadership of the board in the effective
discharge of its supervisory role of the Superlon Group;
(b) the efficient organization and conduct of the Board’s functions
and meetings;
(c) briefing the Directors in relation to issues arising at meetings;
and
(d) promotion of constructive and respectful relations between
board members (within the board and with the management)
and facilitate the effective contribution of all Directors.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

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Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.

Practice 1.3
The positions of Chairman and CEO are held by different individuals.

Application : Applied

Explanation on : The positions of Chairman and Managing Director/CEO of Superlon are

application of the held by different individuals. Mr Chun Kwong Pong is the Chairman
practice whilst Madam Liu Lee, Hsiu-Lin @ Jessica H. Liu is the Managing
Director cum Chief Executive Officer.

There is a clear distinction of roles and responsibilities between the

Chairman and the Managing Director, which are outlined in the Board
Charter. The Chairman of the Board is non-executive. The Chairman is
primarily responsible for Board effectiveness and conduct whilst the
Managing Director is responsible for the day-to-day business affairs
overseeing the operating units, organisational effectiveness and
implementation of Board policies and decisions.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

6
Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.

Practice 1.4
The board is supported by a suitably qualified and competent Company Secretary to provide
sound governance advice, ensure adherence to rules and procedures, and advocate
adoption of corporate governance best practices.

Application : Applied

Explanation on : The Board is supported by two Company Secretaries who are qualified
application of the to hold the positions under Section 235 (2) of the Act.
practice
Ms Ng Mei Wan (MIA 28862) is a Chartered Accountant registered
with the Malaysian Institute of Accountants and Ms R. Malathi A/P
Rajagopal (MAICSA 7054884) is a Chartered Secretary registered with
the Malaysian Institute of Chartered Secretaries and Administrators.

The Company Secretaries attend and ensure that all Board meetings
are properly convened and that accurate and proper records of the
proceedings and resolutions passed are taken and maintained in the
statutory registers of the Company. The Board relies on the Company
Secretaries for advice on its roles and responsibilities, corporate
disclosures, compliance on and updates on new regulations issued by
the regulatory authorities, particularly on:
(a) the Act;
(b) the LR;
(c) Malaysian Code of Corporate Governance.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

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Intended Outcome
Every company is headed by a board, which assumes responsibility for the company’s
leadership and is collectively responsible for meeting the objectives and goals of the
company.

Practice 1.5
Directors receive meeting materials, which are complete and accurate within a reasonable
period prior to the meeting. Upon conclusion of the meeting, the minutes are circulated in a
timely manner.

Application : Applied

Explanation on : In furtherance of their duties, all Directors have complete and

application of the unrestricted access to information pertaining to the Group. The
practice Directors are given an agenda with the relevant information to be
deliberated on five business days prior to the Board meetings. Minutes
for every Board meeting are circulated to all Directors for their perusal
prior to confirmation and adoption at the following Board meeting.
Upon confirmation of the minutes, the Chairman will sign the minutes
as a correct record of the proceedings of the meeting. Matters arising
from meeting discussions are highlighted until they are resolved.

The Chairman leads the presentation of Board papers and discussion.

Relevant Executive Directors will explain and discuss pertinent issues.
All Directors are entitled to call for additional clarification and
information to assist them in matters that require their decision-
making. Time is also allocated at each meeting for Directors to raise
matters not covered by the formal agenda.

All Directors have unrestricted access to the advice of the company

secretaries and external auditors whether as a full board or in their
individual capacity, in the furtherance of their duties.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

8
Intended Outcome
There is demarcation of responsibilities between the board, board committees and
management.

There is clarity in the authority of the board, its committees and individual directors.

Practice 2.1
The board has a board charter which is periodically reviewed and published on the
company’s website. The board charter clearly identifies–
 the respective roles and responsibilities of the board, board committees,
individual directors and management; and
 issues and decisions reserved for the board.

Application : Applied

Explanation on : A Board Charter is established to state the roles and responsibilities of

application of the the Board, the committees and Superlon’s commitment to corporate
practice governance and aims to ensure that appropriate accountability and
control systems are in place. The Board Charter sets out the
governance structure, authority and terms of reference of the Board
and its committees and the management (comprising the Managing
Director and Executive Directors). The Board Charter is published on
the corporate website and review is done from time to time as and
when required. The Board Charter assists the Board in the assessment
of its own performance and that of its individual directors. It also
contains matters which the Board reserves full decision-making
powers on.

The roles and responsibilities of the management are determined by

the Executive Directors and the section on Directors’ training and
continuing education are available on the Annual Report of the
Company, which is accessible through our corporate website.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

9
Intended Outcome
The board is committed to promoting good business conduct and maintaining a healthy
corporate culture that engenders integrity, transparency and fairness.

The board, management, employees and other stakeholders are clear on what is considered
acceptable behaviour and practice in the company.

Practice 3.1
The board establishes a Code of Conduct and Ethics for the company, and together with
management implements its policies and procedures, which include managing conflicts of
interest, preventing the abuse of power, corruption, insider trading and money laundering.

The Code of Conduct and Ethics is published on the company’s website.

Application : Applied

Explanation on : The Code of Conduct is set by the Company to provide employees of

application of the Superlon with guidance on the standards of behaviour expected of
practice them in performing their duties of employment and in their dealings
with fellow employees, clients, suppliers and member of the
community.

The main areas of conduct under the Code are as follows:-

1) Anti-corruption and bribery
2) Confidentiality of information
3) Conflict of interest
4) Duty of care
5) Ethics and honesty
6) Harassment and discrimination
7) Health and safety
8) Quality products
9) Feedback Channel

During FYE2020, the Company formulated the Anti-Bribery and

Corruption (“ABC”) Policy as testimony to its commitment to conduct
business in an honest and ethical manner. The ABC Policy applies to all
employees and any potential/existing business associates engaged in
activities with the Group. The Company has an Integrity Team to
attend to the anti-bribery and corruption compliance matters, in
furtherance of the corporate liability provision of the Malaysian Anti-
Corruption Commission Act.

The Code of Conduct and the ABC Policy can be found on the
corporate website.

Explanation for :
departure

10
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

11
Intended Outcome
The board is committed to promoting good business conduct and maintaining a healthy
corporate culture that engenders integrity, transparency and fairness.

The board, management, employees and other stakeholders are clear on what is considered
acceptable behaviour and practice in the company.

Practice 3.2
The board establishes, reviews and together with management implements policies and
procedures on whistleblowing.

Application : Applied

Explanation on : A Feedback Channel guidance is detailed in the Company’s Code of

application of the Conduct and Whistleblowing Policy and Procedure. The Feedback
practice Channel is intended to be used for employees to voice out serious and
sensitive concerns, including those relating to financial reporting,
unethical or illegal conduct. The letter or e-mail are to be directed to
the Chairman of the Board and/or Chairman of the Audit Committee,
who are both non-executive.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

12
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.1
At least half of the board comprises independent directors. For Large Companies, the board
comprises a majority independent directors.

Application : Departure

Explanation on :
application of the
practice

Explanation for : Currently, 3 out of 8 directors on our Board are Independent Directors.
departure
The Board has decided that there is a good balance of members who
are executive, non-executive and independent directors such that no
one individual or a small group of individuals can dominate the
Board’s decision-making process. Material audit, risk management,
remuneration and nomination matters are tabled for the approval of
pertinent Board Committees comprising all or majority of Independent
Directors, which act as the first tier to consider those matters prior to
making recommendation for Board’s approval.

The Independent Directors comply the independence standards

prescribed under the Listing Requirements of Bursa Securities.

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure : The Board will regularly review its Board composition and if viewed to
be beneficial to the Group, the Nomination Committee will assess
suitable candidates to be appointed as Independent Directors of the
Company.

Timeframe : Ongoing

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Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.2
The tenure of an independent director does not exceed a cumulative term limit of nine years.
Upon completion of the nine years, an independent director may continue to serve on the
board as a non-independent director.

If the board intends to retain an independent director beyond nine years, it should justify and
seek annual shareholders’ approval. If the board continues to retain the independent director
after the twelfth year, the board should seek annual shareholders’ approval through a two-
tier voting process.

Application : Applied

Explanation on : The Board assesses the Independent Directors based on the following
application of the justifications:-
practice 1) He/she has fulfilled the criteria under the definition of an
Independent Director as stated in the LR, and thus, the person
would be able to function as check and balance, provide a
broader view and brings an element of objectivity to the
Board;
2) During his/her tenure in office, the person has not developed,
established or maintained any significant relationship which
would impair the person’s independence as Independent
Director with the Executive Directors and major shareholders
other than normal engagements and interactions on a
professional level consistent and expected of him/her to carry
out his/her duties as Independent Non-Executive Director and
chairman of the Board and Audit Committee;
3) During his/her tenure in office, the person has not transacted
or entered into any transactions with, nor provided any
services to the Company and its subsidiaries, within the scope
and meaning as set forth under Paragraph 5 of Practice Note
13 of the LR;
4) The person is currently not sitting on the board of any other
public and/or private companies having the same nature of
business as that of the Company and its subsidiaries;
5) Other than Director’s fees and allowances paid in accordance
with the industry norm and within the acceptable market
rates which have been duly disclosed in the Annual Report,
there are no other incentives or benefits of whatsoever nature
that had been paid to him/her by the Company during his/her
tenure in office as Independent Non-Executive Director in the
Company; and
6) The person’s qualifications and vast experience in respective
fields are invaluable to the Group. He/she has detailed
knowledge of the Group and has proven commitment and
competency to effectively oversee and advise the Board.

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 The Nomination Committee had assessed the independence of all
Independent Non-Executive Directors during FY 2020. The Nomination
Committee and the Board are of the view that the Independent
Directors have been discharging their responsibilities independently of
management and major shareholders.

Currently, none of the Independent Directors have served the Board

beyond 9 years. For the time being, the Board does not limit the
tenure of Independent Directors.

In the event any Independent Directors are proposed by the Board to

be retained after 9 years, the Board shall seek the shareholders’
approval with justification to be provided.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

15
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.3 - Step Up

The board has a policy which limits the tenure of its independent directors to nine years.

Application : Not Adopted

Explanation on : The Board values the contribution by the Directors based on their
adoption of the experience and knowledge. Other factors such as independence,
practice qualification, due care exercised, attributes, necessary in discharging
their roles, understanding of the Company’s business, diversity in
knowledge and views are prioritised by the Board ahead of the tenure.

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Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.4
Appointment of board and senior management are based on objective criteria, merit and with
due regard for diversity in skills, experience, age, cultural background and gender.

Application : Applied

Explanation on : In view that Superlon consists of a lean management team and the
application of the principal activities are in a specialised industry, no pre-fixed criteria for
practice recruitment is viewed necessary to be established. This creates
flexibility for the Nomination Committee to seek different candidates
who would have the skill matrix to support the long term strategic
direction and needs of the Company. The Nomination Committee
evaluates the qualification and experience of the candidates vis-a-vis
the Company’s requirements and where appropriate recommends to
the Board for appointment. Due consideration is given to the Board
mix, the experience, expertise and personal qualities of the candidates
as well as the gender diversity policy. The Company practices equal
employment opportunity, where there is no discrimination when it
comes to employing suitable candidates to join the company.

All new Director(s) duly appointed by the Board are subsequently

recommended for re-election at the next AGM. All new Directors
attend the mandatory programme by Bursa Securities to familiarise
themselves with the additional requirements for a listed company. The
Company’s Constitution provides that 1/3 of the Board is subject to
retirement by rotation at each AGM and each Director shall retire
once at least in every three years but shall be eligible for re-election.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

17
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.5
The board discloses in its annual report the company’s policies on gender diversity, its
targets and measures to meet those targets. For Large Companies, the board must have at
least 30% women directors.

Application : Applied

Explanation on : The gender diversity policy of the Company and its implementation
application of the are disclosed in the Annual Report 2019.
practice
The Board is supportive of gender diversity within the Group.
Currently, the Company’s Managing Director and one of the
Independent Directors are female which amounts to 25% female
representation in Board. In addition, female participation of more than
50% is evidenced in the office workforce. The Nomination Committee
will advocate the Company’s policy of identifying and recruiting the
best qualified candidates including women candidates via equal
opportunities to serve on its Board and key management in the event
of recruitment.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

18
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.6
In identifying candidates for appointment of directors, the board does not solely rely on
recommendations from existing board members, management or major shareholders. The
board utilises independent sources to identify suitably qualified candidates.

Application : Departure

Explanation on :
application of the
practice

Explanation for : The Nomination Committee evaluates the nominations by the

departure members of the Board, management and various other sources. The
Committee also make recommendations to the Board on new
candidates for appointment and re-election to the Board.

The Board has in the past found suitable candidates for Executive
Directorships from within the company.

The Board currently does not utilise open advertisements and

independent search firms in nominating candidates for directorships
but will do so if necessary.

However, in the event candidates sourced within internal contacts are

unsuccessful, the Board is open to seek independent sources to
identify new candidates.

Notwithstanding the sources, the selection and assessment criteria for

the appointment of new directors are based on the candidates’ skills,
qualifications, background, integrity and professionalism. In addition,
the assessment for Independent Directors would include the
independence test required under the Listing Requirements of Bursa
Securities.

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure : The Company shall opt to utilise the independent sources to identify
suitably qualified candidates when its existing internal network is
exhausted.

Timeframe : Ongoing

19
Intended Outcome
Board decisions are made objectively in the best interests of the company taking into
account diverse perspectives and insights.

Practice 4.7
The Nominating Committee is chaired by an Independent Director or the Senior Independent
Director.

Application : Applied

Explanation on : The Nomination Committee is chaired by Mr Lin, Po-Chih, who is an

application of the Independent Non-Executive Director of the company.
practice

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

20
Intended Outcome
Stakeholders are able to form an opinion on the overall effectiveness of the board and
individual directors.

Practice 5.1
The board should undertake a formal and objective annual evaluation to determine the
effectiveness of the board, its committees and each individual director. The board should
disclose how the assessment was carried out and its outcome.

For Large Companies, the board engages independent experts periodically to facilitate
objective and candid board evaluations.

Application : Applied

Explanation on : Assessment and recommendation to the Board of new candidates for

application of the the appointment as directors is to be made by the Nomination
practice Committee. The newly appointed directors will retire at the first AGM
and are eligible for reappointment.

The Company’s Constitution provides that all Directors are to retire by

rotation at intervals of not less than three years at each AGM. The
directors to retire in each year are the directors who have been
longest in office since their appointment or re-appointment. A retiring
director is eligible for re-appointment.

The Nomination Committee has reviewed the performance of the

Board and Board Committees based on performance evaluations
conducted by the Board collectively during the financial year and was
of the view that the Board and Board Committees have discharged
their responsibilities effectively. The various areas assessed include
board structure, board operation, management relationship, board
roles and responsibilities, board committees and corporate
governance. The Nomination Committee had also discussed and
recommended the changes in Board composition, the appointment of
new Independent Directors, retiring Directors eligible for re-election,
continuing independence of Independent Directors and continuing
education programmes was undertaken.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

21
Intended Outcome
The level and composition of remuneration of directors and senior management take into
account the company’s desire to attract and retain the right talent in the board and senior
management to drive the company’s long-term objectives.

Remuneration policies and decisions are made through a transparent and independent
process.

Practice 6.1
The board has in place policies and procedures to determine the remuneration of directors
and senior management, which takes into account the demands, complexities and
performance of the company as well as skills and experience required. The policies and
procedures are periodically reviewed and made available on the company’s website.

Application : Applied

Explanation on : The remuneration of the Executive Directors is recommended to the

application of the Board by the Remuneration Committee so as to attract, retain,
practice motivate and incentivise Directors of the necessary calibre needed to
lead the Superlon Group successfully.

For Executive Directors, the component parts of the remuneration are

structured so as to incentivise the individual according to the
performance of the Group. The Remuneration Committee is to
recommend to the Board the framework and remuneration package
for each Executive Director. The Remuneration Committee meets
periodically to consider all aspects of the Executive Directors’
performance for recommendation of remuneration, drawing external
advice when necessary.

In the case of Non-Executive Directors, the level of remuneration is

based on their level of responsibilities. The determination of
remuneration packages of Non-Executive Directors, including the Non-
Executive Chairman, is decided by the Board as a whole. The fees for
the Non-Executive Directors are not linked to the financial results of
the Company. Non-Executive Directors are not entitled to any
performance bonus nor any incentive arrangements.

The Director’s fees and allowances are subject to the prior approval of
the shareholders at the AGM.

The policies and procedures to determine the remuneration are

detailed in the Terms of Reference of the Remuneration Committee
available on the corporate website.

Explanation for :
departure

22
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

23
Intended Outcome
The level and composition of remuneration of directors and senior management take into
account the company’s desire to attract and retain the right talent in the board and senior
management to drive the company’s long-term objectives.

Remuneration policies and decisions are made through a transparent and independent
process.

Practice 6.2
The board has a Remuneration Committee to implement its policies and procedures on
remuneration including reviewing and recommending matters relating to the remuneration of
board and senior management.

The Committee has written Terms of Reference which deals with its authority and duties and
these Terms are disclosed on the company’s website.

Application : Applied

Explanation on : The objective of the remuneration policies is to attract and retain

application of the suitable directors to lead and control the Group effectively. Generally,
practice the remuneration of directors reflects the level of responsibility and
commitment that goes with the Board’s membership.

The Remuneration Committee consists only of non-executive

directors, of whom a majority are Independent Directors.

The Terms of Reference of the Remuneration Committee is detailed

on the corporate website.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

24
Intended Outcome
Stakeholders are able to assess whether the remuneration of directors and senior
management is commensurate with their individual performance, taking into consideration
the company’s performance.

Practice 7.1
There is detailed disclosure on named basis for the remuneration of individual directors. The
remuneration breakdown of individual directors includes fees, salary, bonus, benefits in-kind
and other emoluments.

Application : Applied

Explanation on : The breakdown of the remuneration of each individual Director of the

application of the Company for the financial year under review is provided in the
practice Corporate Governance Overview Statement of the Annual Report.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

25
Intended Outcome
Stakeholders are able to assess whether the remuneration of directors and senior
management is commensurate with their individual performance, taking into consideration
the company’s performance.

Practice 7.2
The board discloses on a named basis the top five senior management’s remuneration
component including salary, bonus, benefits in-kind and other emoluments in bands of
RM50,000.

Application : Departure

Explanation on :
application of the
practice

Explanation for : The aggregate remuneration of the top five senior management of the
departure Group is not disclosed on the Company’s Annual Report taking into
consideration the highly competitive industry in which the Group is
operating and challenges faced in talent management and retention.

For purposes of shareholders’ analysis, the total salaries in the Group

analysed by category is disclosed in the Annual Audited Accounts.

The disclosure of the employees’ salaries of the Group in the audited

accounts allows stakeholders to make an appreciable link between the
remuneration and the performance of the Group. The Board believes
that the disclosure contained in the Annual Audited Accounts would
be sufficient to provide pertinent insights to shareholders on the
remuneration of the senior management.
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

26
Intended Outcome
Stakeholders are able to assess whether the remuneration of directors and senior
management is commensurate with their individual performance, taking into consideration
the company’s performance.

Practice 7.3 - Step Up

Companies are encouraged to fully disclose the detailed remuneration of each member of
senior management on a named basis.

Application : Not Adopted

Explanation on :
adoption of the
practice

27
Intended Outcome
There is an effective and independent Audit Committee.

The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.

Practice 8.1
The Chairman of the Audit Committee is not the Chairman of the board.

Application : Applied

Explanation on : The Chairman of the Board and the Chairman of the Audit Committee
application of the are different individuals. Both are non-executive and the Chairman of
practice the Audit Committee is independent.

The Chairman of the Board is Mr Chun Kwong Pong while the

Chairman of the Audit Committee is Ms Chee Chung Yen.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

28
Intended Outcome
There is an effective and independent Audit Committee.

The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.

Practice 8.2
The Audit Committee has a policy that requires a former key audit partner to observe a
cooling-off period of at least two years before being appointed as a member of the Audit
Committee.

Application : Applied

Explanation on : Practice 8.2 has been incorporated into the Terms of Reference of
application of the Audit Committee. Todate, no former key audit partner has been
practice appointed as a member of the Audit Committee.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

29
Intended Outcome
There is an effective and independent Audit Committee.

The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.

Practice 8.3
The Audit Committee has policies and procedures to assess the suitability, objectivity and
independence of the external auditor.

Application : Applied

Explanation on : The Audit Committee has unrestricted access to any information

application of the pertaining to the Company and has direct communication channels
practice with the external and internal auditors, when applicable and to the
senior management of the Group.

The Audit Committee also has direct oversight of the audit of the
Group and annually assesses the suitability, objectivity and
independence of the external auditors and internal auditors.

The duties and responsibilities of the Audit Committee are set out in
the Terms of References, made available on the corporate website.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

30
Intended Outcome
There is an effective and independent Audit Committee.

The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.

Practice 8.4 - Step Up

The Audit Committee should comprise solely of Independent Directors.

Application : Adopted

Explanation on :
adoption of the
practice

31
Intended Outcome
There is an effective and independent Audit Committee.

The board is able to objectively review the Audit Committee’s findings and
recommendations. The company’s financial statement is a reliable source of information.

Practice 8.5
Collectively, the Audit Committee should possess a wide range of necessary skills to
discharge its duties. All members should be financially literate and are able to understand
matters under the purview of the Audit Committee including the financial reporting process.

All members of the Audit Committee should undertake continuous professional development
to keep themselves abreast of relevant developments in accounting and auditing standards,
practices and rules.

Application : Applied

Explanation on : The Audit Committee comprises of all Independent Non-Executive

application of the Directors. All members of the Committee possess a wide range of
practice necessary skills to discharge its duties and are financially literate to
carry out their duties.

The Chairman of the Audit Committee, Ms Chee Chung Yen is a

member of the Malaysian Institute of Accountants or otherwise a
person approved under Paragraph 15.09 (1)(c)(ii) or (iii) of the LR.

The Audit Committee assists the Board in its responsibility to oversee

and scrutinise the financial reporting and the effectiveness of the
internal controls of the Group. Audit Committee members have from
time to time attended various relevant training programmes, seminars
and trades shows organised by relevant regulatory authorities and
professional bodies to broaden their knowledge and to keep abreast
with the relevant changes in law, regulations and the business
environment.

For the FYE2020, all members attended training on, inter-alia, the
MACC Corporate Liability training.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

32
33
Intended Outcome
Companies make informed decisions about the level of risk they want to take and implement
necessary controls to pursue their objectives.

The board is provided with reasonable assurance that adverse impact arising from a
foreseeable future event or situation on the company’s objectives is mitigated and managed.

Practice 9.1
The board should establish an effective risk management and internal control framework.

Application : Applied

Explanation on : The Board is committed to maintain a sound system of risk

application of the management and internal controls to safeguard the assets of Superlon
practice and shareholders’ investments as stipulated by the Malaysian Code of
Corporate Governance and guided by the Statement on Risk
Management and Internal Control: Guidelines for Directors of Listed
Issuers.

The Board regards risk management as an integral part of the business

operations and has approved the framework adopted by the Group to
manage its risks. The Group implements an on-going process of
identifying, evaluating, monitoring and managing significant risks that
may affect the Group in achieving its business objectives throughout
the financial year under review. This process is periodically reviewed
by the Internal Auditors and recommendations are made to the
management and reported to the Audit Committee on areas requiring
improvement where necessary.

The Board recognises that the system is designed to manage within an

acceptable risk profile, rather than eliminate the risk of failure to
achieve the business objectives of the Group. Therefore, the internal
controls can only provide reasonable and not absolute assurance
against the occurrence of any material loss or failure. The Group will
continue to take appropriate measures to strengthen the internal
control environment and processes through an optimal balance
between control costs and benefits.

The Board had received assurance from the Managing Director and
the Finance Director that, to the best of their knowledge, the Group’s
risk management and internal control system is operating adequately
and effectively in line with the Group’s objectives, in all material
aspects.
Explanation for :
departure

34
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

35
Intended Outcome
Companies make informed decisions about the level of risk they want to take and implement
necessary controls to pursue their objectives.

The board is provided with reasonable assurance that adverse impact arising from a
foreseeable future event or situation on the company’s objectives is mitigated and managed.

Practice 9.2
The board should disclose the features of its risk management and internal control
framework, and the adequacy and effectiveness of this framework.

Application : Applied

Explanation on : The following factors were considered in the risk assessment and are
application of the documented in the Group’s risk management framework:-
practice - The nature of risks facing the Group;
- The extent of risks which it regards as acceptable for the
Group to bear;
- The likelihood of the risks concerned materializing; and
- The Group’s ability to reduce the incidence of risks that may
materialise and their impact on the business.

The Head of each business unit participates in the identification as

part of the management’s risk management initiatives. Any new
significant risks identified and the corresponding internal controls
implemented are discussed during periodic management meetings.
These are brought to the attention of the Executive Directors, Audit
Committee and/or the Board at their scheduled meetings. The Group’s
key risk profile is updated regularly wherein risks identified are
prioritised in terms of possibility of occurrence and the potential
impact to the Group’s operation should the risks materialise.

Other key elements of the system of internal control of the Group are
disclosed in the Statement of Risk Management and Internal Controls
in the Annual Report.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

36
Intended Outcome
Companies make informed decisions about the level of risk they want to take and implement
necessary controls to pursue their objectives.

The board is provided with reasonable assurance that adverse impact arising from a
foreseeable future event or situation on the company’s objectives is mitigated and managed.

Practice 9.3 - Step Up

The board establishes a Risk Management Committee, which comprises a majority of
independent directors, to oversee the company’s risk management framework and policies.

Application : Adopted

Explanation on : The Risk Management role is covered by the Audit Committee which
adoption of the comprises of Independent Directors.
practice

37
Intended Outcome
Companies have an effective governance, risk management and internal control framework
and stakeholders are able to assess the effectiveness of such a framework.

Practice 10.1
The Audit Committee should ensure that the internal audit function is effective and able to
function independently.

Application : Applied

Explanation on : The internal audit function is outsourced to an external consultant

application of the firm, i.e. Matrix Corporate Consultancy Sdn Bhd, which reports to the
practice Audit Committee and assists the Board of Directors in monitoring and
managing risks and internal controls. The principal role of the internal
audit includes:-
- Assisting the Board in the review of the adequacy, integrity
and effectiveness of the system of internal controls of the
Group to enable the Board to prepare the Statement on Risk
Management and Internal Control in the Annual Report;
- Performing risk assessment of the Group to identify and
evaluate the principal risk factors and ensuring the
implementation of appropriate internal control processes and
procedures to mitigate these risks;
- Allocating adequate audit resources, in accordance with the
internal audit plan reviewed by the Audit Committee, to carry
out internal audits on key operations of the Group so as to
provide the Board with effective and efficient audit coverage;
and
- Providing independent and objective reports on the state of
internal controls of the various operating units within the
Group to the Audit Committee so that remedial actions and
continuous improvements can be taken in relation to any
weaknesses noted in the systems and controls of the
respective operating units.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

38
Intended Outcome
Companies have an effective governance, risk management and internal control framework
and stakeholders are able to assess the effectiveness of such a framework.

Practice 10.2
The board should disclose–
 whether internal audit personnel are free from any relationships or conflicts of
interest, which could impair their objectivity and independence;
 the number of resources in the internal audit department;
 name and qualification of the person responsible for internal audit; and
 whether the internal audit function is carried out in accordance with a recognised
framework.

Application : Applied

Explanation on : The Group has outsourced its internal audit function to an

application of the independent consulting firm, i.e. Matrix Corporate Consultancy Sdn
practice Bhd. The team is headed by the firm partner, Jean Wong, who is an
approved licensed auditor and a Chartered Accountant registered with
Malaysia Institute of Accountants. The manager in charge is Mr Chong
Yaw Huei who is a Fellow member of ACCA and a member of
Malaysian Institute of Accountants.

The internal audit personnel are free from any relationships or

conflicts of interest, which could potentially impair their objectivity
and independence.

The Internal Audit practices adopted by the internal auditors conform

with the International Standards for the Professional Practice of
Internal Auditing.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

39
Intended Outcome
There is continuous communication between the company and stakeholders to facilitate
mutual understanding of each other’s objectives and expectations.

Stakeholders are able to make informed decisions with respect to the business of the
company, its policies on governance, the environment and social responsibility.

Practice 11.1
The board ensures there is effective, transparent and regular communication with its
stakeholders.

Application : Applied

Explanation on : The Board acknowledges the importance of an effective, transparent

application of the and regular communication with its stakeholders. As a public listed
practice company, the Company has put in place procedures to abide by the
corporate disclosure requirements of material information as set out
by Bursa Securities. The Board members are kept informed of material
matters which require public disclosures and they approve the
announcement of material matters prior to public disclosure. The
Board is mindful that material information is to be announced timely
and that confidential information should be sensitively handled to
avoid leakages leading to improper use of such information. In such
circumstance, the Company will also closely monitor the market
activity of its securities during a period where information is withheld.
Where it is believed that such information has inevitably been leaked,
immediate announcement will be made.

Superlon’s website consists of the relevant corporation information

including the board charter, terms of reference of the board
committees, key policies of the Company, annual report, etc.
Shareholders and investors are also kept informed of all major
developments within the Group by way of announcements via the
BURSA LINK.

The Company values constant dialogue and is committed to clear

communication with its shareholders and investors. In this respect, as
part of the Group’s active investor relations programme, the Company
also engages with fund managers, financial analysts, shareholders and
the media from time to time.

In addition, written questions raised by the Minority Shareholders

Watch Group were presented to the shareholders at the AGM
together with the Company’s response.
Explanation for :
departure

40
Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

41
Intended Outcome
There is continuous communication between the company and stakeholders to facilitate
mutual understanding of each other’s objectives and expectations.

Stakeholders are able to make informed decisions with respect to the business of the
company, its policies on governance, the environment and social responsibility.

Practice 11.2
Large companies are encouraged to adopt integrated reporting based on a globally
recognised framework.

Application : Departure

Explanation on :
application of the
practice

Explanation for : The Group is not under the category of large companies as defined in
departure the MCCG 2017, and hence this is deemed not applicable.

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

42
Intended Outcome
Shareholders are able to participate, engage the board and senior management effectively
and make informed voting decisions at General Meetings.

Practice 12.1
Notice for an Annual General Meeting should be given to the shareholders at least 28 days
prior to the meeting.

Application : Applied

Explanation on : The notice for the upcoming Annual General Meeting of the Group in
application of the 2020 was distributed to the shareholders together with the Annual
practice Report on 21 August 2020, giving at least 28 days’ notice prior to the
meeting.

Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

43
Intended Outcome
Shareholders are able to participate, engage the board and senior management effectively
and make informed voting decisions at General Meetings.

Practice 12.2
All directors attend General Meetings. The Chair of the Audit, Nominating, Risk Management
and other committees provide meaningful response to questions addressed to them.

Application : Applied

Explanation on : All Directors were present at the last AGM to engage directly with and
application of the be accountable to the shareholders for their stewardship of the
practice Company. The Directors, all other committee members, and external
auditors were in attendance to respond to the shareholders’ queries.
The AGM (and any other general meetings) also serves as a forum for
the Board to engage with the shareholders personally to obtain their
views and feedback.
Explanation for :
departure

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

44
Intended Outcome
Shareholders are able to participate, engage the board and senior management effectively
and make informed voting decisions at General Meetings.

Practice 12.3
Listed companies with a large number of shareholders or which have meetings in remote
locations should leverage technology to facilitate–
 including voting in absentia; and
 remote shareholders’ participation at General Meetings.

Application : Departure

Explanation on :
application of the
practice

Explanation for : The Group held its General Meetings in Klang where the location is
departure accessible. Shareholders who drive there are given free parking as
well.

Shareholders who are unable to attend the AGM in person can

authorise another person as their proxy/proxies to cast votes on
his/her behalf.

Large companies are required to complete the columns below. Non-large companies are
encouraged to complete the columns below.
Measure :

Timeframe :

45
SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES
PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA
MALAYSIA

Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures)

of the Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is
only applicable for financial institutions or any other institutions that are listed on the
Exchange that are required to comply with the above Guidelines.

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