CORPORATE GOVERNANCE

INTRODUCTION

The Board of Directors (“the Board”) of Straits Inter Logistics Berhad (“Straits”) fully supports the recommendations of the Malaysian Code on Corporate Governance 2017 (“MCCG 2017” or “the Code”) issued by the Securities Commission and Bursa Malaysia Securities Berhad (“Bursa Malaysia”) which sets out the broad principles and recommendations for good corporate governance and best practices for listed companies.

The Board believes that good governance will help to realise long-term shareholders value, whilst taking into account the interest of other stakeholders. The Board evaluates and continues to enhance the existing corporate governance practices in order to remain relevant with developments in market practice and regulations.

The Board is pleased to present this Corporate Governance (“CG”) Overview Statement (the “Statement”) to provide an overview of the CG practices adopted by the Company in achieving the intended outcomes as set out in the new Code with reference to the following three (3) key principles:-
a) Principle A : Board Leadership and Effectiveness;
b) Principle B : Effective Audit and Risk Management; and
c) Principle C : Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders.

This overview statement is prepared in compliance with Bursa Malaysia ACE Market Listing Requirements and it is to be read together with the Corporate Governance Report 2018 of the Company (CG Report). A Statement that explains the manner in which the Company has applied the Principles and Recommendations as set out in the Code during the Financial Year Ended (“FYE”) 31 December 2018 are disclosed in the CG Report which is available on the Company’s website: https://www.straits-interlogistics.com.

This statement also serves as a compliance with Rule 15.25 of Bursa Malaysia Listing Requirements for ACE Market.

In order to provide the latest status update of the Company, this Overview Statement on Corporate Governance also includes information up to 12 April 2019.

1. PRINCIPLE A- Part I Board Responsibilities

Intended Outcome 1.0
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.

1.1 Roles & Responsibilities

The Board is accountable to the stakeholders of the Group for the overall performance of the Group. The Board’s primary role is to provide strategic leadership to the Group and ensure that the Group operates within a framework of prudent and effective controls which enables risks to be appropriately
identified, assessed and managed. The Board sets the strategic direction for the Group and ensures that the necessary resources are in place for the Group to deliver its objectives and create sustainable value for its stakeholders.

The Board is responsible for oversight and overall governance of the Group to ensure that the strategic plans of the Group is implemented and accountability is monitored effectively, whilst the Management is responsible for the day-to-day operations of the business and effective implementation of the plans and goals decided by the Board.

The Board provides insights and guidance to the Group Managing Director (“Group MD”) and Management to achieve Corporate objectives of the Group.

The Group has established a Delegated Authority Limit (“DAL”) which indicates the specific powers of the Board, the Board Committees and the Group MD. The Management has to adhere to the DAL in carrying out its day-to-day functions.

In discharging the Board’s duties and responsibilities, the Board has delegated certain duties and responsibilities to the following Board Committees to assist the Board in overseeing the Company’s affairs and in deliberation of issues within their respective functions and Terms of Reference (“TOR”), which clearly outline their objectives, duties and powers. The Chairman of each Committee will report to the Board on the outcome of the Committee’s meetings and resolutions, which would also include the key issues deliberated at the Committee’s meetings
? – Audit Committee (“AC”)
? – Nomination & Remuneration Committee (“NRC”)
? – Board Risk & Compliance Committee (“BRCC”)

1.2 Chairman and Group MD

The Board practises the separation of the positions of Chairman and the Group MD and the division in their responsibilities.

The Chairman is responsible for the leadership, governance and management of the Board, ensuring its effectiveness and assumes the formal role as the leader in chairing the Board meetings and shareholders’ meetings.

The Group MD is responsible to oversees the entire business and operations of the Group and lead the management team in the day-to-day operations of the Company, ensuring organisational effectiveness and implementation of the Board’s strategies, policies and decisions. By virtue of his position as a Board member, he also acts as the intermediary between the Board and the Senior Management Team.

The Chairman holds a Non-Executive position and the positions of Chairman and the Group MD are held by different individuals.

1.3 Qualified and Competent Company Secretaries

The Board is supported by two suitably qualified Company Secretaries who serve as corporate governance advisers to the Board. Both Company Secretaries are qualified Chartered Secretaries under Section 235(2)(a) of the Companies Act 2016. The Company Secretaries are external Company Secretaries from MegaWan Corporate Secretarial PLT with vast knowledge and experience from being in public practice and is supported by a dedicated team of company secretarial personnel.

The Board is also regularly updated and advised by the Company Secretaries on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to their duties and responsibilities. They are also responsible for ensuring the Group’s compliance with the relevant statutory and regulatory requirements.

1.4 Access to Information and Advice

In ensuring the effectiveness of the functions of the Board, all Directors have individual and independent access to the advice and support services of the Company Secretaries, Internal and External Auditors and may seek advice from the Management on issues under their respective purview and compliance with statutory obligations, Bursa Malaysia Listing Requirements for ACE Market or other regulatory requirements.

The Directors have full and unrestricted access to all information of the Group on a timely and accurate manner to enable them to discharge their roles and responsibilities effectively. In addition, the Directors have full and unrestricted access to the Company Secretaries, the External Auditors and the outsourced
Internal Auditors for advice and services.

The Board is provided with comprehensive board papers on a timely manner prior to board meetings. This is to ensure and enable the members of the Board to discharge their duties and responsibilities competently in a well-informed manner.

In most instances, the Senior Management are invited to be in attendance at Board meetings to provide insight and to furnish clarification on issues that may be raised by the Board. Every Director also has unrestricted access to all information with regard to the activities of Straits Group.

Intended Outcome 2.0
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.

2.1 Board Charter

The Board is guided by the Company’s Board Charter which outlines the roles and responsibilities, operation and processes of the Board. The roles and responsibilities of the Board include, among others, a clear division of roles and functions between the Board and the Group MD in managing the Group.

The Board Charter serves as a reference in providing guidance to Board members and Management on the fiduciary and stewardship functions of the Company’s Directors. The Board Charter incorporates provisions that provide for the clear demarcation of the respective roles and responsibilities of the Board.

The Board Charter would be reviewed periodically and updated in accordance with the needs of the Company and any new regulations. Any amendments to the Board Charter shall be approved by the Board.

The Board Charter is available on the Company’s website at https://www.straits-interlogistics.com.

Intended Outcome 3.0
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.

3.1 Directors’ Code of Ethics and Whistleblowing Policy

The Code of Ethics requires all Directors to observe high ethical business standards and to apply these values to all aspects of the Group’s business and professional practices and to act in good faith in the best interest of the Group and its shareholders.

It also entrusts Board members and employees to apply the principles and practices of good Corporate Governance in all their dealings in respect of and on behalf of the Company; to help foster a culture of honesty and accountability, and uphold the core values of integrity when dealing with ethical issues.

The Code of Ethics is published on the Company’s website at http://www.straits-interlogistics.com.

The Board has in place a Whistleblowing Policy which demonstrates high standards of ethical behaviour and integrity. Any Director or employee who knows of, or suspects, a violation of the Code of Conduct, is encouraged to whistle blow or report the violation or suspected violation through the Whistleblowing Policy of the Company.

The Whistleblowing Policy is published on the Company’s website at http://www.straits-interlogistics.com.

2. PRINCIPLE A- Part II Board Composition

Intended Outcome 4.0
Board decisions are made objectively in the best interests of the Company, taking into account diverse perspectives and insights.

4.1 Strengthen Composition of the Board

The current Board has six (6) Directors comprising one (1) Group Managing Director, one (1) Executive Director, two (2) Non-Independent & Non-Executive Directors and two (2) Independent & Non-Executive Directors.

The Independent & Non-Executive Directors are persons of calibre and credibility with the ability to exercise independent judgment in the Board without fear or favour. The independent directors participated actively in providing independent advice, views and judgement in the decision-making process, thus ensuring that a balanced and unbiased deliberation process is in place to safeguard the interest of all stakeholders. As and when a potential conflict of interest arises, it is a mandatory practice for the Directors concerned to declare their interest and abstain from the decision-making process.

The Non-Executive Directors of the Company are not involved in the day-to-day management of the Group and have the range of skills and experience which enable them to oversee business performance and provide constructive opinion, advise and judgement to ensure the interests of the Group, shareholders, employees, customers and other stakeholders in which the Group conducts its businesses are well represented and taken into account.

The two (2) Executive Directors bring with them a wide range of business experiences, technical knowledge and skills, and other knowledge and experience in the fields that are related to oil trading and bunkering services as well as business management, operations and administration within the Group. The Executive Directors take on the primary responsibility of the day-to-day running of the
Group’s business, as well as implementing the policies and decisions of the Board. They each uphold different functions of the Company and contribute cohesively to the success and well being of the Group.

The pro?le of each member of the current Board is set out in the Directors’ Pro?le of this Annual Report.

4.2. Tenure of an Independent Director

The Board does not have any Independent Director who has served more than nine (9) years as at the date of this Statement.

The Board Charter stipulates that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board subject to the director’s re-designation as a Non-Independent Director.

Otherwise, the Board must justify and seek shareholders’ approval at Annual General Meeting (“AGM”)
in the event it retains the director as an Independent Director.

4.3 Board Diversity

The Board acknowledges the importance of boardroom diversity and is supportive of the recommendation of MCCG 2017 to the establishment of boardroom and workforce gender diversity policy. In relation to recommendation on gender diversity, one of the subsidiaries consists of female Director and the senior key management also consists of female.

The Group adopts non-discriminatory policy in employing talents to fulfill its human resource needs at all levels including Board especially in ensuring gender diversity.

The evaluation of the suitability of candidates as the new Board member or as a member of the workforce is based on the candidates’ competency, skills, character, time commitment, knowledge, experience and other qualities in meeting the needs of the Group, regardless of gender.

The Group gives equal opportunities to all its employees and does not practise discrimination of any form, whether based on age, gender, race and religion, throughout the organisation.

The Board through the NRC will continue to consider the gender diversity as part of its future selection and look into having female board representation.

4.4. Foster Commitment of the Directors

The Board meets on a quarterly basis, with additional meetings convened as and when necessary.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities. All Directors have given their full commitment to the Board meeting by attending all of the Board meetings held during the FYE 31 December 2018, which are evident based on the attendance record set out in the table below. During the FYE 31 December 2018, the Board met
nine (9) times.

Besides that, the Board also approves matters through the circulation of Directors’ Circular Resolution in accordance with the Articles of Association of the Company.

The Board is satisfied with the time commitment given by the Directors. All Directors do not hold more than 5 directorships as required under Rule 15.06 of the Listing Requirements.

The attendance of all the Directors at Board meetings held during the FYE 31 December 2018 surpassed the minimum requirements stipulated under the ACE Market Listing Requirement.

4.5. Continuing Education and Training of Directors

All existing Directors have attended the Mandatory Accreditation Programme (“MAP”) as required by the Listing Requirements.

Directors are also encouraged to attend various external professional programmes deemed necessary to ensure that they keep up with the latest developments in the areas related to their duties.

All Directos had attended the following trainings:
i) Overview on Corporate Liability held on 28 November 2018.
ii) Basic introduction on Safety Management System for Vessels held on 18 March 2019.

In addition, the Directors were briefed at Board meetings and Audit Committee meetings on any updates or changes to the relevant guidelines on the regulatory and statutory requirements by the Company Secretary, Internal Auditors and External Auditors.

4.6. Re-Election of Directors

The NRC conducted an assessment of the Directors who are subject to retirement at the forthcoming Annual General Meeting (“AGM”) in accordance with the provisions of the Articles of Association of the Company and the relevant provisions under the Companies Act, 2016. In accordance with the Articles of Association, one-third (1/3) of the directors shall retire from offce and be eligible for re-election at
each AGM and all directors shall retire from offce at least once in every three (3) years but shall be eligible for re-election.

Newly appointed Directors shall hold office until the conclusion of the next AGM and shall be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meetings.

The NRC is also responsible for recommending to the Board those Directors who are eligible to stand for re-election/re-appointment.

4.7 Board Committees

The Board has also delegated certain responsibilities to other Board Committees, which operate within clearly defined terms of reference to assist in the execution of its roles and responsibilities.

The Committees of the Board are: –
i) Audit Committee (“AC”)
ii) Nomination & Remuneration Committee (“NRC”)
iii) Board Risk & Compliance Committee (“BRCC”)

Each Committee is governed by and operates within its respective Terms of Reference (“TOR”), which have been approved by the Board.

The TOR of the Board Committees are set out in the Board Charter and is available on the Company’s website at http://www.straits-interlogistics.com.

Intended Outcome 5.0
Stakeholders are able to form an opinion on the overall effectiveness of the Board and individual Directors.

5.1 Nomination and Remuneration Committee (“NRC”)

The NRC comprises the following members: –

Chairman : Ho Fook Meng
Independent & Non-Executive Director

Member : Leong Fook Heng
Independent & Non-Executive Director

Member : Tan Sri Mohd Bakri Bin Mohd Zinin
Non-Independent & Non-Executive Director

All the members are Independent Non-Executive Directors. The functions of the Nomination Committee under its TOR include, among others, assessing and recommending candidates for directorships to the Board and undertaking annual assessment of the effectiveness of the Directors individually and as a whole.

The Committee is responsible for the following:-

– Review candidates for appointment to the Board Committees, and make recommendations to the Board for approval. The review is conducted on an annual basis, and as and when the need arises, such as when a new Director is appointed.
?- Make recommendation to the Board on the eligibility of the Directors to stand for re-election at the AGM.
?- To assist the Board in recommending remuneration packages for Executive Directors and Independent Non-Executive Directors. The Board has in place remuneration policies for Directors.

The remuneration package for each individual Executive Director is structured to reflect his experience, performance and scope of responsibilities.

The remuneration of Independent Non-Executive Directors are in the form of Directors’ Fees which reflects the diverse experience, skill sets and the level of responsibilities expected of the Independent Non-Executive Directors.

During the financial year, the NRC has undertaken the following key activities in discharging its duties:

1) Reviewed and recommended Directors’ Fees and benefits payable to Independent Non-Executive Directors to the Board for recommendation and approval at the forthcoming AGM
2) Reviewed and recommended the TOR of NRC for Board’s approval
3) Reviewed and deliberated on Board and Board Committees evaluation forms and recommended to the Board for approval
4) Reviewed and recommended the re-election of Directors at the forthcoming AGM

The NRC conducts on an annual basis the following evaluations:-
?- Board and Board Committee Evaluation
– The AC’s Financial Literacy and Evaluation
– The AC Members’ Self Evaluation
– The Independent Directors’ Self-Assessment
?- Internal Audit Function Evaluation
?- External Auditor Performance and Independence Evaluation
?- Assessment form on Private Sessions with the External Auditors

5.2 Board Effectiveness Evaluation (“BEE”)

The Board has also put in place a formal process for the assessment of performance of the individual Directors, the Board as a whole and the Board Committees, as well as the independence of the Independent Directors.

The Board undertakes an annual assessment of Independent Directors and is satisfied that they continue to bring independent and objective judgement to board deliberations. Peer and selfassessment are carried out by the Directors once every year.

The Company Secretary summarises and compiles the assessments with comments by the Directors. The summaries are tabled at the NRC meeting for the NRC’s assessment and evaluation. The NRC Chairman will then report to the Board on the results of the Directors’ assessment and evaluation.

The BEE is conducted with the objectives to improve the Board’s effectiveness and to enhance the directors’ awareness on the key areas that need to be addressed.

Based on the aforesaid evaluations conducted for the FYE 2018, the NRC and the Board were satisfied with the performance of each Director, the Board as a whole, and the Board Committees.

A Director who is subject to re-election and/or re-appointment at an AGM is assessed by the NRC before a recommendation is made to the Board and shareholders.

The NRC (save for the members who abstained from deliberations on their own re-election) recommended to the Board that the following Directors who are due to retire pursuant to Article 92 of the Company’s Constitution be proposed for re-election at the forthcoming AGM:

1) Tan Sri Mohd Bakri Bin Mohd Zinin
2) Ho Fook Meng

The Board (save for the members who abstained from deliberations on their own re-election) supported the NRC’s recommendations.

3. PRINCIPLE A- Part III Remuneration - Level and Composition of Remuneration

Intended Outcome 6.0
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.

6.1 Remuneration policy

The objective of the Group’s remuneration policy is to attract and retain the Directors required to lead and control the Group effectively. In the case of Executive Directors, the components of the remuneration package are linked to corporate and individual performance. The remuneration packages for the Executive Directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain Executive Directors of high caliber to the Group.

As for Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities and participation by the particular Non-Executive Director concerned.

The Directors are satis?ed that the current level of remuneration is in line with the responsibilities expected.

The Non-Executive Directors are remunerated with Directors’ Fees which are subject to shareholders’ approval at the AGM annually in accordance with Section 230(1) of the Companies Act, 2016. In recommending the proposed Directors’ Fees, the NRC takes into consideration the qualification, duty and responsibility, and contribution required from a Director in view of the Group’s complexity, and is
guided by market norms and industry practices.

The Company will be seeking the shareholders’ approval for the Directors’ Fees and benefits payable to Non-Executive Directors for the period from the forthcoming AGM until the next AGM in 2020, for the purposes of facilitating payment of Directors’ Fees on a quarterly basis and/or as and when incurred.

Intended Outcome 7.0
Stakeholders are able to assess whether the remuneration of Directors and Senior Managementcommensurate with their individual performance, taking into consideration the Company’s performance.

7.1 Remuneration of Directors and Senior Management

(i) Details of remuneration of the Directors of the Company for the FYE 31 December 2018 are as follows:-

(i) Details of remuneration of the Directors of the Company for the FYE 31 December 2018 are as follows:-


Total Directors’ remuneration for Non-Executive Directors: RM 177,200.

(ii) Remuneration of Top Two Senior Management of the Company for the FYE 31 December 2018 are as follows:-

4. PRINCIPLE B- Part I Effective Audit & Risk Management

Intended Outcome 8.0
There is an effective and independent AC.

The Board is able to objectively review the AC’s findings and recommendations. The Company’s financial statement is a reliable source of information

8.1 Audit Committee

The existing AC comprises three (3) members as follows: –

Chairman : Leong Fook Heng
Independent & Non-Executive Director

Member : YAM Dato’ Seri Tengku Baharuddin Ibni Sultan Mahmud
Non-Independent & Non-Executive Director

: Ho Fook Meng
Independent & Non-Executive Director

The Chairman of the AC is an Independent Director and he is not the Chairman of the Board. All members of the AC are Non-Executive and majority of the members of the AC are Independent Directors.

The AC has unrestricted access to both the Internal and External Auditors, who in turn report directly to the AC. The AC has established formal and transparent arrangements to maintain an appropriate relationship with the External Auditors. This includes undertaking an annual assessment to ascertain the suitability, objectivity and independence of the External Auditors.

The AC Report is set out on page 39 to 43 of this Annual Report.

5. PRINCIPLE B- Part II Risk Management and Internal Control Framework

Intended Outcome 9.0
Company makes 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.

9.1 The Board is fully aware of its overall responsibility of continuously maintaining a sound system of internal control which covers not only financial controls but also operational and compliance controls as well as risk management, and the need to review its effectiveness regularly in order to safeguard Shareholders’ investment and the Group’s assets.

However, the Board recognises that such system is structured to manage rather than eliminate the possibility of encountering risk of failure to achieve corporate objectives.

The Board through the BRCC which comprises all Non-Executive Directors, reviews the key risks identified to ensure proper management and mitigation of risks and report to the Board as and when needed.

An overview of the Group’s risk management and internal controls is set out in the Statement on Risk Management and Internal Control (“SORMIC”) on pages 44 to 48 of this Annual Report.

The Board concluded that the risk management and internal control system of the Group are generally adequate and effective for FYE 2018.

The Composition of the BRCC is set out on page 45 of this Annual Report

The TOR of the BRCC can be found in the Company’s website at http://www.straits-interlogistics.com.

Intended Outcome 10.0
Company has an effective governance, risk management and internal control framework and stakeholders are able to assess the effectiveness of such framework.

10.1 The Board has also appointed an independent professional service provider namely Messrs. NGL Tricor Governance Sdn Bhd (“NGL”) to carry out the Internal Audit Function. The outsourced Internal Auditors report directly to the AC, providing the Board with a reasonable assurance of adequacy of the scope,
functions and resources of the Internal Audit function.

The purpose of the Internal Audit function is to provide the Board, through the AC, assurance of the effectiveness of the system of internal control in the Group. The internal controls are tested for effectiveness and efficiency by NGL. The report of the Internal Audit is tabled for the AC’s review and comments, and the audit findings will then be communicated to the Board.

During the FYE 2018, the AC had reviewed and assessed the adequacy of the scope, functions, competency and resources of the outsourced Internal Auditors and that they have the necessary authority to carry out their work.

10.2 The outsourced internal audit function is headed by Mr. Chang Ming Chew, a Director of NGL. Mr. Chang is a Certified Internal Auditor and holds a Certification in Risk Management Assurance from the Institute of Internal Auditors; professional member of the Institute of Internal Auditors Malaysia; member of the Association of Chartered Certified Accountants (UK); and member with the Malaysian Institute of Accountants (“MIA”). The outsourced Internal Auditors (“IA”) is staffed by 25 personnel as at 31 December 2018 and has assigned three (3) staff to provide internal audit services to the Company.

All the internal audit personnel involved are free from any relationships or conflicts of interest, which could impair their objectivity and independence. All the internal audit personnel are guided by International Professional Practices Framework(“IPPF”) issued by The Institute of Internal Auditors Malaysia in carrying out the Internal Audit Function.

6. PRINCIPLE C- Part I Effective Audit & Risk Management

Intended Outcome 11.0
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.

11.1 Communication with Stakeholders

The Board is committed to maintain open channels of communication by continuous disclosure and dissemination of comprehensive and timely information of the Group in its best effort to strengthen its relationship with Shareholders and Stakeholders.

As such, the Group always ensure the timely release of quarterly financial results, audited financial statements, corporate developments and announcements of the Group via the BURSA LINK, the Company’s annual reports and other circulars to Shareholders which serve as the principal channel in keeping the Shareholders and the investing public informed of the Group’s major developments and overviews of financial performance and progress throughout the year.

The Group uses a range of communications to disseminate its information to the public and this includes the uploading of all relevant information on the Group on its website at http://www.straitsinterlogistics.com.

11.2 Corporate Disclosure Policy

The Board has ensured timely disclosure of material information pertaining to the Group’s performance and operations to the public, in accordance with the disclosure requirements under the ACE Listing Requirement and other applicable laws. It has formalised a written Corporate Disclosure Policy for the Group, a copy of which is available in the Company’s website at http://www.straitsinterlogistics.com.

7. PRINCIPLE C- Part II Conduct of General Meetings

Intended Outcome 12.0
Shareholders are able to participate, engage the Board and Senior Management effectively and make informed voting decisions at General Meetings.

12.1 Shareholder Participation at General Meetings

The AGM of the Company serves as the principal forum that provides opportunity for Shareholders to raise concerns or questions.

The Company will allocate sufficient time during the AGM and Extraordinary General Meeting(s) (“EGM”) for a Question-and-Answer session whereby the Chairman together with the other Board members will be present to answer any questions and possible concerns that the shareholders may have on the
Group and its operations.

Senior Management and the Group’s External Auditors as well as the Company’s Advisers are also available to respond to Shareholders’ questions during the AGM/EGM as the case may be.

Shareholders who are unable to attend the AGM are allowed to appoint up to two proxies to attend, participate, speak and vote on their behalf.

The notice of the forthcoming 22nd AGM will be dispatched to shareholders at least 28 days before the date of the meeting as prescribed by the MCCG 2017 and the said notice will also be advertised in a nationally circulated English or Bahasa Malaysia newspaper.

12.2 Poll voting

Pursuant to Bursa Malaysia ACE Market Listing Requirements, any resolution set out in the notice of any general meeting, or in any notice of resolution which may properly be moved and is intended to be moved at any general meeting, must be voted by poll. Hence, voting for all the resolutions as set out in the forthcoming and future general meetings will be conducted as such. An Independent scrutineer will be appointed to validate the votes cast at the general meetings.

The Company had conducted the voting on all resolutions tabled during its AGM held on 27 June 2018 and EGM held 18 September 2018 and 28 January 2019 by poll accordingly.

This CG Overview Statement together with the CG Report were approved by the Board on 12 April 2019.

The primary objective of the Audit Committee (“AC”) is to assist the Board of Directors (“Board”) in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting processes and internal control systems.

The AC comprises the following members, majority of whom are Independent & Non-Executive Directors:-

1. Composition of Audit Committee

Chairman : Leong Fook Heng
Independent & Non-Executive Director

Member : YAM Dato’ Seri Tengku Baharuddin Ibni Sultan Mahmud
Non-Independent & Non-Executive Director

: Ho Fook Meng
Independent & Non-Executive Director

As a whole, the AC are qualified individuals having required skills and expertise to discharge the AC’s functions and duties. The AC’s literacy and understanding of financial reporting standards and information have contributed to meaningful discussions in overseeing the integrity of the financial reporting processes and financial statements. The AC Chairman, Mr. Leong Fook Heng is a member of the Malaysian Institute of Accountants (MIA) and Associate Member of Chartered Institute of Management Accountants (United Kingdom). In this respect, the Company complies with Rule 15.09(1) (c)(i) of the Bursa Malaysia Securities Berhad (“Bursa Malaysia”) ACE Market Listing Requirements. The performance of the AC and its members are assessed by the Board through a board committee
effectiveness evaluation.

The Group Managing Director (“Group MD”) and Financial Controller (“FC”) attended all the meetings for the purpose of briefing the AC on the activities involving their areas of responsibilities. The AC was also briefed by the External Auditors on the findings of the external audit.

The External Auditors were present at two (2) AC meetings during the financial year. At these meetings, the AC also held separate sessions with the External Auditors without the presence of the Executive Board Members and Management whereby the AC was briefed by the External Auditors on their audit findings and other observations made during their audit.

The Board is satisfied that the AC members are able to discharge their functions, duties and responsibilities in accordance with the Terms of Reference of the AC, thereby supporting the Board in ensuring appropriate Corporate Governance standards within the Group.

2. Terms of Reference (“TOR”)

The TOR of the AC is available for reference at the company’s website at http://www.straits-interlogistics.com.

3. Rights of the AC

In carrying out its duties and responsibilities, the AC will:-

a) have the authority to investigate any matter within its TOR;
b) have the resources which are required to perform its duties;
c) have full and unrestricted access to any information pertaining to the Group;
d) have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity;
e) be able to obtain independent professionals or other advice and to invite outsiders with relevant experience and expertise to attend the AC meeting (if required) and to brief the AC; and
f) be able to convene meetings with External Auditors, Internal Auditors or both, excluding the attendance of other Directors and Management of the Company, whenever deemed necessary.

4. Conduct of Meetings

a) The AC will meet at least four (4) times in each ?nancial year although additional meetings may be called at any time, at the discretion of the Chairman of the AC.

b) The quorum shall consist of a majority of independent committee members and shall not be less than two (2).

c) Recommendations to the AC are submitted to the Board for approval.

d) The Company Secretary shall be in attendance at each AC meeting and record the proceedings of the meeting thereat.

e) Minutes of each meeting shall be kept as part of the statutory records of the Company upon con?rmation by the AC and a copy shall be distributed to each member of the Board.

f) The Group MD and other Officers may be invited to attend where their presence are considered appropriate as determined by the AC Chairman.

g) The Internal Auditors and/or External Auditors have the right to appear and be heard at any meeting of the AC.

h) Upon the request of the Internal Auditors and/or External Auditors, the AC Chairman shall also convene a meeting of the AC to consider any matters the Auditors believe should be brought to the attention of the Board and/or Shareholders.

i) The AC must be able to convene meetings with External Auditors without the presence of the Executive Board Members and Management at least twice a year and whenever deemed necessary.

j) Where the AC is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of Bursa Malaysia Listing Requirements, the AC must promptly report such matter to Bursa Malaysia.

k) The attendance at any particular AC meeting by other Directors and Management of the Company shall be at the AC’s invitation and discretion and must be speci?c to the relevant meeting.

5. Summary of Activities Undertaken by the AC during the FYE 31 December 2018

The AC had held a total of seven (7) meetings during the FYE 31 December 2018 and the details of attendance of the Committee members are as follows:-


During the year under review, the following were the activities of the AC:-

5.1 Financial Reporting

a) Reviewed the unaudited quarterly financial results and Annual Audited Financial Statements of the Group prior to submission to the Board for their perusal and approval. This was to ensure compliance of the financial statements with the provisions of the Companies Act 2016, Malaysian Financial Reporting Standards, International Financial Reporting Standards and applicable Listing Requirements of Bursa Malaysia.

b) Reviewed the Annual Audited Financial statements of the Group for the FYE 31 December 2017 prior to recommending the same for the Board’s approval, taking into consideration amongst others the following:-
i) changes in or implementation of any major accounting policies and practices.
ii) significant matters highlighted including financial reporting issues, significant
judgements made by Management, significant and unusual events or transactions,
and how these matters are addressed.
iii) compliance with accounting standards, regulatory, governance and other legal
requirements.
iv) major issues the External Auditors raised, the going concern assumptions, issues, problems and reservations arising from the interim and final external audits.

5.2 External Audit

a) Reviewed the Audit Planning Memorandum with the External Auditors.

b) Reviewed the independence, objectivity and effectiveness of the External Auditors and the services provided, including non-audit services and corresponding fees.

c) Reviewed the External Auditors’ Reports in relation to audit and accounting issues arising from the audit and the Management’s responses.

d) Reviewed and recommended the re-appointment of External Auditors and the Audit Fees to the Board for its approval.

5.3 Internal Audit

a) Considered and reviewed the business processes presented by the Internal Auditors to assess the effectiveness of the internal control system.

b) Discussed and recommended the internal audit plan.

c) Reviewed the Internal Audit Reports presented on the state of internal control of the Group and steps taken by Management in response to audit findings.

d) Reviewed the adequacy of the scope, function, competency and resources of the internal audit functions.

5.4 Related Party Transactions

a) At each quarterly meeting, reviewed all related party transactions and con?ict of interest situations within the Company and the Group including for proposed transactions, procedures or course of conducts that raised questions of Management integrity in the ordinary course of business and the disclosure of such transactions in the Annual Report of the Group.

b) Reviewed the Circular to Shareholders in relation to the Proposed Renewal of Existing Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature dated 27 April 2018.

5.5 Other Activities

a) Reviewed and recommended the Corporate Governance Overview Statement, AC Report and Statement on Risk Management and Internal Control (“SORMIC”) to the Board for approval and inclusion in the 2017 Annual Report.