Eco World - Corporate Governance Report 2018

CORPORATE GOVERNANCE REPORT
STOCK CODE : 8206

COMPANY NAME : Eco World Development Group Berhad
FINANCIAL YEAR : October 31, 2018
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.
1
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 of Directors (“the Board”) is collectively responsible for the
application of the proper stewardship of the Group’s business and ensuring the long term
practice success of the Group as well as the delivery of sustainable value to its
stakeholders by setting goals, policies and targets within a framework
of prudent and effective controls which enables risk to be assessed and
managed.
The Board is guided by its Board Charter (“Board Charter”) which

outlines the duties and responsibilities of the Board, and matters
specifically reserved for the Board as well as to be delegated to Board
Committees, the President/Chief Executive Officer (“CEO”) and
Management.
The Board is assisted by 3 Board Committees, namely, the Audit

Committee (“the AC”), Nomination Committee (“the NC”) and the
Remuneration Committee (“the RC”).
The Board assumes, amongst others, the following principal roles and
responsibilities in discharging its leadership function and fiduciary
duties:
(a) Reviewing and adopting a strategic plan
The Board plays an active role in the formulation and

development of the Group’s strategy and monitoring its
performance and implementation.
Before the end of each financial year, the Board meets with
Management to discuss the economic outlook as well as the
Group’s annual business plan and strategy for the ensuing
financial year. The annual business plan sets out the Group’s
objectives which include performance targets and long-term
goals of the business.
2
A Board meeting was held on 11 October 2018 where
Management presented the Group’s proposed business plan for
FY2019. The Board was briefed on the economic outlook and its
potential impact on Malaysia and on the Group as well as the
proposed Group Business Plan & Strategy for FY2019 together
with the Group’s budgeted financials, liquidity, cash flows, net
debt/equity ratios, capital expenditure and manpower
requirements.
At this meeting, the Board discussed at length Management’s

views and assumptions underlying the business plan and finalised
the goals and strategies to be adopted and ensured that the
necessary resources would be in place for the Group to meet its
objectives. After deliberations, the Board approved the proposed
Group Business Plan & Strategy for FY2019.
A formal schedule of matters reserved for the Board is set out in

the Board Charter to ensure that the direction and control of the
Group are in the hands of the Board.
(b) Monitoring the conduct of business
At its quarterly meetings, the Board monitors the conduct of the

Group’s business by reviewing a presentation by Management.
The presentation usually includes the quarterly financial results,
liquidity and other financial highlights, project and operations
progress reports, market overview and sales outlook, the status
of corporate proposals, related party transactions etc so as to
enable the Board to assess if targeted objectives are being met.
The Board constantly provides guidance and constructive

feedback to Management towards the achievement of the
Group’s targeted objectives.
(c) Reviewing the adequacy and integrity of the management

information and internal control systems and identifying principal
risks and ensuring the implementation of appropriate internal
controls and mitigation measures
The Board acknowledges its overall responsibility for the Group’s

internal control and risk management systems to safeguard
shareholders’ investments and the Group’s assets.
Details of the Company’s internal control and risk management

systems are set out in the Statement on Risk Management and
Internal Control from page 69 through page 75 of the Annual
Report 2018.
3
(d) Reviewing and adopting a strategic plan which supports long-
term value creation and business sustainability
The Board is aware of the importance of business sustainability

and ensures that sustainability is embedded in the development
of the Group’s strategies, taking into account the economic,
environmental, social, cultural and governance aspects of
business operations. These strategies seek to balance the needs
and expectations of the various stakeholders such as customers,
shareholders, regulators, bankers, joint venture partners and the
communities in which the Group operates.
The Board approved the establishment of a Sustainability

Committee in FY2017 to formally reinforce the practice of
business sustainability within the Group.
(e) Succession planning
The NC is entrusted by the Board with responsibilities to oversee

the selection and assessment of Directors and Board Committees
as well as succession planning for Directors and Senior
Management.
Matters on the remuneration of Directors and Senior

Management are delegated to the RC.
A summary of the activities of the NC and the RC during the

financial year under review is set out in the NC Report and RC
Report on pages 64 and 66 of the Annual Report 2018.
(f) Ensuring effective communication with stakeholders
The Board maintains transparent and regular communication

with stakeholders to facilitate understanding of each other’s
objectives and expectations.
The Group adopts a policy of comprehensive, timely and

continuing disclosure of information to stakeholders via effective
communication channels. The Investor Relations Department
plays a critical role in facilitating investor-related activities to
enable communication of the business and strategic direction of
the Group.
An Investor Relations section is available on the Company’s

website www.ecoworld.my to provide relevant information and
materials on the Group, such as annual reports, corporate
presentations and quarterly financial results for easy accessibility
by the public. The Board also views shareholders’ general
meetings as ideal opportunities for the CEO to brief shareholders
on the Group’s projects and developments.
4
Explanation for :
departure
Large companies are required to complete the columns below. Non-large companies are encouraged
to complete the columns below.
Measure :
Timeframe :
5
Intended Outcome
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.
Explanation on : As Chairman of the board, Tan Sri Dato’ Sri Liew Kee Sin (“Tan Sri Liew”)
application of the assumes a leadership role on the Board.
practice
Tan Sri Liew was appointed Chairman of the Board on 20 March 2015.
As can be seen from his profile set out on page 37 of the Annual Report
2018, Tan Sri Liew has had a successful career as a respected property
developer for over 32 years. His years of experience has enabled him to
provide valuable guidance to the other members of the Board as well
as Management.
Tan Sri Liew is a strong believer of good corporate governance. He

works hand-in-hand with our founder, Tan Sri Abdul Rashid Bin Abdul
Manaf (“Tan Sri Rashid”) to set the correct tone from the top and guides
Management in establishing and monitoring good corporate
governance practices within the Group. As Chairman, he sets the board
agenda and ensures that Board members receive complete and
accurate information in a timely manner to enable robust and informed
discussions to take place during Board meetings. Given his vast
experience in the property sector he is able to provide effective
leadership for the Board to work constructively with Management to
formulate strategies as well as address business operations, financial
performance and risk management issues. He also sets the direction for
the Group to provide effective, transparent and regular communication
with stakeholders and ensures that their views are communicated to
the Board as a whole.
Explanation for :
departure
Measure :
Timeframe :
6
Intended Outcome
Practice 1.3
The positions of Chairman and CEO are held by different individuals.
Explanation on : The position of Chairman of the Board is held by Tan Sri Liew.
application of the
practice
The position of CEO is held by Dato’ Chang Khim Wah (“Dato’ Chang”).
Dato’ Chang was appointed as CEO on 12 December 2013.
Explanation for :
departure
Measure :
Timeframe :
7
Intended Outcome
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.
Explanation on : The Company has appointed 2 Company Secretaries namely Ms. Chua
application of the Siew Chuan (“Ms. Chua”) and Ms. Mak Chooi Peng (“Ms. Mak”). Both
practice Company Secretaries are qualified Chartered Secretaries under Section
235(2) of the Companies Act 2016. Ms. Chua is a Fellow while Ms. Mak
is an Associate member of the Malaysian Institute of Chartered
Secretaries and Administrators (“MAICSA”).
Ms. Chua has more than 35 years of experience in corporate secretarial

practice, with working knowledge across a diverse range of industries
while Ms. Mak has more than 25 years of experience in handling
secretarial matters, also with working knowledge of various industries
and government services. They currently act as Company Secretaries of
several other companies listed on Bursa Malaysia.
By virtue of their experience, the Company Secretaries have been able

to competently provide sound advice to the Board on matters relating
to the powers, roles and responsibilities of Directors, compliance with
corporate law, securities laws, listing requirements and the Malaysian
Code on Corporate Governance.
Explanation for :
departure
Measure :
Timeframe :
8
Intended Outcome
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.
Explanation on : An annual calendar of Board meetings, AC meetings and the Annual

application of the General Meeting is circulated in advance of each new year in order to
practice facilitate planning by the Directors.
Notices of meetings are circulated at least 7 clear days prior to the date
of Board meetings.
Board papers are circulated at least 5 clear days prior to the date of
Board meetings, except for those comprising financial statements
which are circulated at least 4 clear days prior to the date of Board
meetings.
Draft minutes of Board and AC meetings are circulated within one

month from the meeting dates for comments. Action items identified
during Board and AC meetings are highlighted for follow-up action by
Management.
Explanation for :
departure
Measure :
Timeframe :
9
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.
Explanation on : The Board is guided by the Board Charter which clearly defines the
application of the respective roles and responsibilities of the Board, Board committees,
practice individual Directors and Management as well as matters reserved for
the Board.
The Board Charter was last reviewed and revised on 20 September 2018
to align with the practices recommended in the Malaysian Code on
Corporate Governance (“the MCCG”) and the amended provisions in
the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Malaysia”) (“Listing Requirements”).
The Board Charter is available on the Company’s website at

www.ecoworld.my
Explanation for :
departure
Measure :
Timeframe :
10
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.
Explanation on : The Board together with Senior Management oversees the Group’s
application of the adherence to high standards of ethics and corporate behaviour. To this
practice end, the Board has established a policy to guide Directors and
employees that engenders integrity, transparency and fairness.
The Directors’ Code of Conduct and Ethics (“the Code for Directors”)
and the Code of Conduct and Business Ethics for employees (“the Code
for Employees”) have been in place since 2014. The Board last reviewed
and amended the Code for Directors at its meeting held on 20
September 2018 to incorporate the latest practices fostered by the
MCCG.
The Code for Directors, which is annexed to the Board Charter, and the
Code for Employees are available on the Company’s website at
www.ecoworld.my
Explanation for :
departure
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.
Explanation on : The Board established and implemented a Whistle Blowing Policy on 16

application of the March 2017 to enhance corporate governance practices across the
practice Group.
Reports of any misconduct must be made in writing using the

prescribed Whistleblower Reporting Form. All written reports should
be sent directly either by hand to the Company’s registered office or by
email to the dedicated whistleblowing email address at
[email protected] before it is being channelled to the
Whistleblowing Committee (“WBC”) for investigation. All reports and
information provided are treated as confidential.
The WBC assists the Board to investigate reports of misconduct

received on an independent and confidential basis. Upon completion of
each investigation, WBC updates the Board on the action taken.
The Whistleblowing Policy is available on the Company’s website at

www.ecoworld.my.
Explanation for :
departure
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 : At 26 April 2017, the date on which the MCCG came into effect, the
departure Board comprised 12 Directors, of whom 4 were Independent Directors.
Following the retirement of Tan Sri Lee Lam Thye (who was a Non-
independent Director) at the annual general meeting held on 28 March
2018, the Board took the opportunity to appoint an Independent
Director, Madam Low Mei Ling, as his replacement.
The Board now comprises 12 Directors, of which 5 are Independent

Directors.
From a practical point of view, Practice 4.1 is not a practice that may be
easily implemented within a short time.
The Board considers its current size of 12 to be optimum. Without

increasing the current Board size, the Board is required to replace 2
existing Non-independent Directors with Independent Directors in
order to meet the requirement of Practice 4.1.
The Board values the contributions of all its Non-independent Directors

as much as those of its Independent Directors, and would be
constrained to lose the services of 2 out of the 3 Non-independent
Directors if they were to be replaced. Additionally, highly competent
persons have to be readily available for appointment as replacement
Independent Directors.
The implementation of Practice 4.1 is also complicated by the need to

replace 2 male Directors with female Directors under Practice 4.5.
The Board needs to be satisfied that upon complying with Practice 4.1,
the Board as a whole would be an improved Board in all material
respects.
Please provide an alternative practice and explain how the alternative

practice meets the intended outcome.
13
Measure : The Board through the NC will continuously monitor the current
situation by:
1. searching for suitable and well qualified candidates to join the Board
as Independent Directors.
2. rigorously evaluating the performance of the Independent Directors
to ensure that they continue to be effective in spite of being in the
minority.
Timeframe : Others By FY2021
14
Intended Outcome
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 : Not applicable - No independent director(s) serving beyond 9 years
Explanation on :
application of the
practice
Explanation for :
departure
Measure :
Timeframe :
15
Intended Outcome
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 :
adoption of the
practice
16
Intended Outcome
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.
Explanation on : The Board has formalised and adopted a Board Diversity Policy on 14
application of the December 2017 which sets out the approach to diversity on the Board
practice that comprises talented and dedicated Directors with a diverse mix of
skills, expertise, experience, gender, age and independence. The
diversity collectively represented on the Board should reflect the
diverse nature of the business environment in which the Group
operates. The Board Diversity Policy is available on the Company’s
website at www.ecoworld.my.
The Board has delegated to the NC the responsibility for assessing

candidates for appointment to the Board and making
recommendations to the Board on the appropriate Board size and
composition with the ultimate decision being made by the Board as a
whole.
In assessing candidates for Senior Management positions, the Board

and the NC take into account the challenges and opportunities facing
the Group, the leadership needs of the Group and the candidate’s
technical capabilities, experience and professional qualifications and
potential for appointment to the Board in future. The Group ensures
women candidates are sought and considered as part of the
recruitment exercise. Presently women make up 47% of the Senior
Management team.
Explanation for :
departure
Measure :
Timeframe :
17
Intended Outcome
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.
Explanation on :
application of the
practice
Explanation for : At 26 April 2017, the date on which the MCCG came into effect, the
departure Board comprised 12 Directors, of whom 1 was a woman.
Following the retirement of Tan Sri Lee Lam Thye at the annual general
meeting held on 28 March 2018, the Board took the opportunity to
appoint Madam Low Mei Ling as his replacement.
The Board now comprises 12 Directors, of which 2 are women.
In order to meet the 30% requirement under Practice 4.5, the Board is
required to replace 2 male directors with female directors, assuming
the Board is to be maintained at its optimum size of 12. The Board finds
that from a practical point of view, Practice 4.5 cannot be easily
implemented within a short period of time. The implementation of
Practice 4.5 is also complicated by the need to replace 2 Non-
independent Directors with Independent Directors under Practice 4.1.
Notwithstanding the above, the Board believes in the benefits of gender

diversity within the Group. This is evident from the fact that currently
47% of the Senior Management team comprises women.
The Board has formalised and adopted a Board Diversity Policy on 14

December 2017 which sets out the approach to diversity on the Board
that comprises talented and dedicated Directors with diverse mix of
skills, expertise, experience, gender, age and independence. The Board
Diversity Policy is available on the Company’s website at
www.ecoworld.my.
Please provide an alternative practice and explain how the alternative

practice meets the intended outcome.
Measure : The Board through the NC, will continue to search for suitable and well
qualified women candidates to join the Board.
18
19
Intended Outcome
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.
Explanation on : Although Madam Low Mei Ling was recommended for appointment by
application of the existing Board members, the NC does utilise multiple channels such as
practice major shareholders, independent consultants as well as external
organisations such as Institute of Corporate Directors Malaysia (ICDM)
to identify suitably qualified candidates.
Explanation for :
departure
Measure :
Timeframe :
20
Intended Outcome
Practice 4.7
The Nominating Committee is chaired by an Independent Director or the Senior Independent
Director.
Explanation on : The NC is chaired by Dato’ Idrose Bin Mohamed who is an Independent

application of the Director.
practice
Explanation for :
departure
Measure :
Timeframe :
21
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.
Explanation on : The NC carries out an annual assessment and evaluation of the Board
application of the as a whole, the Board Committees, the Chairman of the Board,
practice Independent Directors and individual Directors.
The assessment and evaluation are carried out by way of self- and peer-
evaluation through the completion of questionnaires on a confidential
basis. The questionnaires, drafted by the NC with the assistance of the
Company Secretaries, are updated annually to continuously engage the
Directors’ perspectives on fresh and relevant areas and to ensure that
they continue to be pertinent to the requirements of the Board and the
Group.
The following 4 evaluation forms are used:
(i) Independent Director's Self-Assessment Checklist;

(ii) Director’s Self Performance Evaluation;
(iii) Board and Board Committees Performance Evaluation; and
(iv) Evaluation of the Audit Committee.
The Board and Board Committees were assessed as a whole, while

Directors were assessed individually. A scoring mechanism was used to
provide respondents with context. Some responses are anonymised
where appropriate.
The criteria for Director’s self-performance covers areas such as

contributions to matters discussed, roles and responsibilities and
overall quality of input to Board effectiveness.
For Board and Board Committee assessments, the criteria cover

structure and operations, their roles and responsibilities, succession
planning and Board governance.
Independent Directors are assessed based on their relationship with the

Group and whether they have been involved in any significant
transactions with the Group. In assessing their independence, the Board
considers the individual Independent Directors’ ability to exercise
22
independent judgement at all times and based on the criteria set out in
the Listing Requirements of Bursa Malaysia.
The evaluation results were presented to the Board on 24 January 2019.
During the aforesaid Board meeting, the Board reviewed the evaluation
results and concluded that:
• The Board was satisfied with the level of independence

demonstrated by the Independent Directors and their ability to
provide unbiased, impartial and objective opinions during
meetings and to act in the best interest of the Group.
• All Directors were of the view that each of them had performed
their respective roles and functions effectively and responsibly.
• The Directors were satisfied with the performance of the Board
as a whole.
• Each Director was satisfied with each other’s contribution in
terms of sharing their insights and actively participating in
Board and Board Committee discussions.
• All the Board Committees have discharged their roles and
responsibilities as per their terms of reference.
• The Board is generally satisfied with its current size,
composition as well as the mix of skill sets.
The Board will adopt the recommendation to appoint independent

experts periodically to facilitate objective and candid board evaluations.
Explanation for :
departure
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 6.1
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.
Explanation on : The Board has in place a Directors’ Remuneration Policy and a C-Suite
application of the Remuneration Policy for Senior Management personnel who are in the
practice C-Suite category.
The objective of these remuneration policies is to set the appropriate

levels of remuneration that allows the Group to attract and retain
talented and well-qualified people in line with the Group’s long-term
business strategies. Both the remuneration policies are periodically
reviewed by the RC to ensure their effectiveness and continued
relevance.
The Directors’ Remuneration Policy and the C-Suite Remuneration

Policy are available on the Company’s website at www.ecoworld.my.
Explanation for :
departure
Measure :
Timeframe :
24
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.
Explanation on : The Board has a RC to assist on matters relating to the remuneration of

application of the Directors and Senior Management personnel in the C-Suite category.
practice The RC is charged with the duties for developing, establishing and
implementing competitive remuneration policies and packages for
Directors and C-Suite Management personnel.
The composition and activities of the RC during the year under review
are set out in the RC report on page 66 of the Annual Report 2018.
The RC has written Terms of Reference (“TOR”) to set out the authority,
roles and responsibilities of the RC. The TOR was last reviewed and
revised on 17 January 2018 by the RC to align with the practices
recommended in the MCCG. It was thereafter approved by the Board at
its meeting held on 25 January 2018. The TOR of the RC are available on
the Company’s website at www.ecoworld.my.
Explanation for :
departure
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 7.1
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.
Explanation : The details of the Directors’ remuneration received for FY2018 are set out as below:
on
application SALARY
of the AND BENEFITS
practice BONUS FEES ALLOWANCE IN KIND TOTAL
NAME (RM) (RM) (RM) (RM) (RM)
Executive Directors1
Dato' Chang Khim Wah 3,989,662 - 207,085 204,461 4,401,208
Dato' Voon Tin Yow 8,106,260 - 304,536 501,625 8,912,421
Datuk Heah Kok Boon 1,717,424 - 123,476 25,880 1,866,780
Liew Tian Xiong 698,285 - 69,678 - 767,963
Non-Executive
Directors2
Tan Sri Abdul Rashid Bin
Abdul Manaf 247,170 90,000 80,812 417,982
Tan Sri Dato' Sri Liew
Kee Sin 247,170 95,000 3,255,247 3,597,417
Dato' Leong Kok Wah 247,170 95,000 128,231 470,401
Tan Sri Lee Lam Thye3 247,170 70,000 - 317,170
Tang Kin Kheong 327,170 165,000 - 492,170
Dato' Idrose Bin
Mohamed 247,170 165,000 - 412,170
Dato' Haji Obet Bin
Tawil 247,170 145,000 - 392,170
Dato' Noor Farida Binti
Mohd Ariffin 247,170 155,000 - 402,170
Low Mei Ling4 - 30,000 - 30,000
Note:
1 Paid by certain subsidiaries
2 Paid by the Company
3 Retired on 28 March 2018
4 Appointed on 29 March 2018
26
Explanation :
for
departure
Large companies are required to complete the columns below. Non-large companies are encouraged to
complete the columns below.
Measure :
Timeframe :
27
Intended Outcome
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.
Explanation on : The remuneration of top Senior Management personnel received for

application of the FY2018 in bands of RM50,000 are set out as below:
practice
Total Remuneration In Bands of
RM50,000 Name
RM1,800,001 to RM1,850,000 Phan Yan Chan
RM1,750,001 to RM1,800,000 Dato’ Sundarajoo A/L Somu

Datuk Hoe Mee Ling
RM1,200,001 to RM1,250,000 Ho Kwee Hong
RM1,150,001 to RM1,200,000 Yap Yoke Ching
RM1,100,001 to RM1,150,000 Low Thiam Chin
Explanation for :
departure
Measure :
Timeframe :
28
Intended Outcome

Companies are encouraged to fully disclose the detailed remuneration of each member of
senior management on a named basis.
Explanation on :
adoption of the
practice
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 8.1
The Chairman of the Audit Committee is not the Chairman of the board.
Explanation on : The Chairman of the AC is Mr. Tang Kin Kheong, who is not the Chairman
application of the of the Board.
practice
Explanation for :
departure
Measure :
Timeframe :
30
Intended Outcome
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.
Explanation on : The AC has a policy that requires a former key audit partner to observe
application of the a cooling-off period of at least 2 years before being appointed as a
practice member of the AC.
This policy is included in the TOR of the AC which is available on the

Company’s website at www.ecoworld.my.
Explanation for :
departure
Measure :
Timeframe :
31
Intended Outcome
Practice 8.3
The Audit Committee has policies and procedures to assess the suitability, objectivity and
independence of the external auditor.
Explanation on : It is the duty of the AC to annually assess the suitability, objectivity and
application of the independence of the external auditors, as set out in its TOR which is
practice available on the Company’s website www.ecoworld.my.
During its meeting held on 13 November 2018, the AC formally assessed

the suitability, effectiveness and independence of its external auditors,
namely Messrs Baker Tilly Monteiro Heng (“BTMH”).
During the aforesaid meeting, the AC collectively went through and

deliberated on each criterion set out in an External Auditors
Performance and Independence Evaluation Form which covered areas
such as calibre, quality of processes and services, competency,
independence and objectivity, audit scope and planning, fees,
communication and interaction, adequacy of experience and resources
and the provision of non-audit services.
The AC concluded that they were satisfied with the independence and
performance of BTMH and accordingly recommended the re-
appointment of BTMH as the external auditors of the Company for the
ensuing year.
Explanation for :
departure
Measure :
Timeframe :
32
Intended Outcome

The Audit Committee should comprise solely of Independent Directors.
Application : Adopted
Explanation on : All 4 members of the AC are Independent Directors.

adoption of the
practice The composition of the AC is set out in the AC Report on page 60 of the
Annual Report 2018.
33
Intended Outcome
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.
Explanation on : The Board is satisfied that the AC members possess the necessary skills
application of the to discharge its duties and are financially literate and have the ability to
practice understand matters under the purview of the AC including the financial
reporting process. The profiles of the AC members are set out in the
Annual Report 2018.
The AC members do attend training programmes and seminars to keep

themselves abreast of relevant developments in standards and
practices in accounting and auditing, listing requirements, corporate
law, risk management and changes in the business environment.
Details of the trainings or seminars attended by the AC members during

financial year 2018 are set out on page 56 of the Annual Report 2018.
Explanation for :
departure
Measure :
Timeframe :
34
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.
Explanation on : The Board has established a risk management framework that outlines
application of the the Group’s risk management system, defines Management’s
practice responsibilities and sets out the risk appetite and risk tolerance of the
Group. The framework is incorporated into the Risk Management Policy
and Guidelines (“RMPG”) which was last reviewed and revised on 28
June 2018.
The RMPG embeds the Group’s system of risk management and internal
control into an Enterprise Risk Management framework which
establishes the context of the Group’s business. It sets out the process
for risk identification, measurement and treatment with continuous
monitoring, review and communication in order to provide reasonable
assurance regarding the achievement of the Group’s objectives.
The Board has delegated the overall responsibility for the adequacy and
integrity of the Group’s risk management and internal control
framework to the AC. The AC is supported by the Risk Management
Committee (“RMC”) and Group Corporate Governance (“GCG”).
The RMC and GCG ensure that the implementation of RMPG is properly
carried out by Management throughout the Group.
Details of the risk management framework and internal control systems

are set out in the Statement on Risk Management and Internal Control
from page 69 through page 75 of the Annual Report 2018.
Explanation for :
departure
Measure :
35
Timeframe :
36
Intended Outcome
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.
Explanation on : The Group’s risk management and internal control framework are
application of the disclosed in the Statement on Risk Management and Internal Control
practice set out from page 69 through page 75 of the Annual Report 2018.
Explanation for :
departure
Measure :
Timeframe :
37
Intended Outcome

The board establishes a Risk Management Committee, which comprises a majority of
independent directors, to oversee the company’s risk management framework and policies.
Explanation on :
adoption of the
practice
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 10.1
The Audit Committee should ensure that the internal audit function is effective and able to
function independently.
Explanation on : The internal audit function is performed in-house by GCG. GCG is an

application of the independent function within the Group to assess the adequacy of
practice internal controls and to monitor if established controls are operating as
intended by applying standards on internal auditing promulgated by the
Institute of Internal Auditors (“IIA”).
Functionally, GCG reports directly to the AC. The GCG team has
unrestricted access to the AC.
All internal auditing activities are guided by the Internal Audit Charter
which defines the roles and responsibilities, scope of work,
independence and objectivity of the internal audit function. The
Internal Audit Methodology serves as a guide to the internal audit team
to ensure uniformity of approach in undertaking internal audit
engagements.
The Internal Audit Charter and Internal Audit Methodology were last
reviewed and revised on 25 June 2018 to align with the IIA’s revised
International Professional Practices Framework.
GCG carried out its activities based on a risk-based approach which is

based on an annual plan approved by the AC. The AC reviews annually
the adequacy of the scope, functions and resources of GCG to ensure
that the responsibilities of GCG are fully discharged.
The internal audit annual plan for FY2018 was reviewed and approved
by the AC on 13 December 2017.
The AC ensures that the responsibilities of GCG are properly discharged

through:
• reviewing the adequacy of the scope, functions, competency

and resources of GCG;
• reviewing the annual internal audit plan, processes and the

results of all internal audit assignments undertaken and
ensuring that appropriate actions are taken based on the
recommendations;
39
• reviewing the budget and ensuring sufficient resources are
allocated to GCG;
• ensuring that GCG is independent of the activities it audits and

that the head of GCG reports functionally to the AC directly;
• appraising the performance of GCG on an annual basis; and
• reviewing the appointment or termination of senior GCG staff

members.
On 13 November 2018, the AC completed its annual assessment of GCG

and was satisfied with the overall performance of GCG in FY2018.
In FY2018, the AC also engaged the Institute of Internal Auditors

Malaysia to perform an external Quality Assessment Review (“QAR”) on
GCG. Based on the QAR, GCG has been assessed to have generally
conformed with all applicable IIA Standards. GCG will continue to meet
or strive to exceed the IIA Standards in all key aspects.
The functions and activities of GCG during FY2018 are set out in the AC
Report on page 63 of the Annual Report 2018.
Explanation for :
departure
Measure :
Timeframe :
40
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.
Explanation on : The head of GCG is Mr Lee Choong Yin who is a permanent affiliate of
application of the the Association of Chartered Certified Accountants (“ACCA”). He is also
practice a professional member of the IIAM.
GCG comprises 8 auditors who are either degree holders or who have
passed the profession examinations of Certified Public Accountants
Australia or ACCA.
The Head of GCG and the internal auditors confirmed on an annual basis
that they are free from any relationships or conflicts of interest which
could impair their objectivity and independence.
GCG adopts the IIA’s International Standards for the Professional

Practice of Internal Auditing laid down in its International Professional
Practices Framework.
Explanation for :
departure
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 11.1
The board ensures there is effective, transparent and regular communication with its
stakeholders.
Explanation on : Effective Communication with Stakeholders

application of the
practice The Company recognises the value of transparent and effective
communication with the investment community and aims to build long-
term relationships with shareholders and investors through appropriate
channels for disclosure of information.
The Company mainly communicates with shareholders, other

stakeholders and the public through press releases, press conferences,
timely announcements and disclosures made to Bursa Malaysia.
Annual Report
The annual report is also a key communication channel between the

Company and its shareholders as well as stakeholders. It provides
insightful explanations about the Group’s performance, operations,
prospects as well as activities undertaken by the Group. The annual
report in the form of CD-ROM would be sent to shareholders.
Corporate Website
The Company’s website www.ecoworld.my serves as another

communication platform. The website comprised dedicated sections
that provides investors with detailed information on corporate,
business and governance related matters. It also incorporates an
Investor Relations section which provides all relevant information on
the Group such as annual reports, corporate presentations, company
announcements, including the quarterly results, press releases and
summary of the questions and answers brought up at general meetings.
All the information is easily accessible by the public.
Investor Relations
The Investor Relations Department also plays a critical role in facilitating

investor-related activities to enable better understanding of the
business and strategic direction of the Group. Discussions, interviews
and dialogues are held with fund managers, financial analysts,
42
shareholders and the media to convey information about the Group’s
performance, corporate strategies and other matters affecting
shareholders’ interests. During the financial year under review, the
Group conducted press, analyst and investor updates and held
meetings with fund managers and research analysts in December 2017
and June 2018.
The Group also participated in domestic and overseas roadshows, and

investor conferences in Malaysia, Singapore and Hong Kong. The
following were the key investor-related activities held during FY2018 :
Month Key Investor Relations Activities

Dec 2017 Full year 2017 results briefing and press
conference
January 2018 Investor roadshow, Kuala Lumpur (2) and
Singapore
April 2018 Investor roadshow, Hong Kong
June 2018 Half year 2018 results briefing and press
conference
July 2018 Investor roadshow, Kuala Lumpur
August 2018 Investor roadshow, Singapore
Throughout Site visits and regular meetings with institutional
FY2018 investors, fund managers and analysts
General Meetings
The Board also views shareholders’ general meetings as ideal

opportunities to communicate with shareholders where the CEO briefs
shareholders on the Group’s projects and development. The meetings
provide a forum for dialogue and interaction between the Board and
shareholders, both individuals and institutional.
While the Company endeavours to provide as much information as

possible to its shareholders and the investment community, it is also
mindful of the legal and regulatory framework governing the release of
material and price-sensitive information.
Shareholders and investors may forward any queries to the Company

via email to [email protected].
Explanation for :
departure
Measure :
43
Timeframe :
44
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.
Explanation on :
application of the
practice
Explanation for : The Board is of the view that the current disclosures and dissemination
departure of information with detailed narrative of the Group’s financial and non-
financial information to our various stakeholders are sufficient for
making informed decisions.
For example, the Annual Report contains comprehensive financial and

non-financial information such as the financial performance, future
prospects, Management’s Discussion and Analysis, Corporate
Governance Overview Statement, Statement on Risk Management and
Internal Control.
Nevertheless, the Board acknowledges that the MCCG encourages the

adoption of integrated reporting based on a globally recognised
framework to improve the quality of information available to investors
and promote greater transparency and accountability.
Recognising that integrating reporting is a journey which requires cross

functional efforts, the Company will gradually build upon the necessary
processes and systems to support the development towards integrated
reporting.
Measure : The Company will take steps to adopt the integrated reporting based
on the globally recognised framework.
45
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.
Explanation on : The Company has already applied this Practice.

application of the
practice For its 44th Annual General Meeting held on 28 March 2018, the
Company issued the notice on 23 February 2018, which represents a
notice period of 32 clear days.
The Company will continue to comply with this Practice.
Explanation for :
departure
Measure :
Timeframe :
46
Intended Outcome
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.
Explanation on : The Company is already applying this practice.

application of the
practice At the Company’s 44th Annual general Meeting held on 28 March 2018,
all the Directors were present to take questions addressed to them.
A summary of the questions raised at the 44th Annual General Meeting

and the answers provided by the Directors are published on the
Company’s website at www.ecoword.my.
Explanation for :
departure
Measure :
Timeframe :
47
Intended Outcome
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.
Explanation on :
application of the
practice
Explanation for : The Annual General Meeting of the Company have always been held in
departure in accessible locations within the Klang Valley.
The Board acknowledges that the MCCG encourages companies to

enable shareholders to remotely participate in and vote at general
meetings without being physically present. However, the Board is of the
view that the technology to support remote participation and voting in
absentia may not be cost effective.
The Board will continue to monitor developments in the market on the

use of new and more cost effective technologies to facilitate remote
participation and voting in absentia by shareholders and may consider
implementing the same in future.
Measure : Please explain the measure(s) the company has taken or intend to take
to adopt the practice.
Timeframe : Choose an item.
48
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.
Click here to enter text.
49

Eco World - Corporate Governance Report 2018

Uploaded by

Copyright:

Available Formats

Eco World - Corporate Governance Report 2018

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Eco World - Corporate Governance Report 2018

Uploaded by

Copyright:

Available Formats

CORPORATE GOVERNANCE REPORT

STOCK CODE : 8206

SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PERSUANT

The Board is guided by its Board Charter (“Board Charter”) which

The Board is assisted by 3 Board Committees, namely, the Audit

(a) Reviewing and adopting a strategic plan

The Board plays an active role in the formulation and

At this meeting, the Board discussed at length Management’s

A formal schedule of matters reserved for the Board is set out in

(b) Monitoring the conduct of business

At its quarterly meetings, the Board monitors the conduct of the

The Board constantly provides guidance and constructive

(c) Reviewing the adequacy and integrity of the management

The Board acknowledges its overall responsibility for the Group’s

Details of the Company’s internal control and risk management

The Board is aware of the importance of business sustainability

The Board approved the establishment of a Sustainability

(e) Succession planning

The NC is entrusted by the Board with responsibilities to oversee

Matters on the remuneration of Directors and Senior

A summary of the activities of the NC and the RC during the

(f) Ensuring effective communication with stakeholders

The Board maintains transparent and regular communication

The Group adopts a policy of comprehensive, timely and

An Investor Relations section is available on the Company’s

Tan Sri Liew is a strong believer of good corporate governance. He

Ms. Chua has more than 35 years of experience in corporate secretarial

By virtue of their experience, the Company Secretaries have been able

Explanation on : An annual calendar of Board meetings, AC meetings and the Annual

Draft minutes of Board and AC meetings are circulated within one

The Board Charter is available on the Company’s website at

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

Explanation on : The Board established and implemented a Whistle Blowing Policy on 16

Reports of any misconduct must be made in writing using the

The WBC assists the Board to investigate reports of misconduct

The Whistleblowing Policy is available on the Company’s website at

The Board now comprises 12 Directors, of which 5 are Independent

The Board considers its current size of 12 to be optimum. Without

The Board values the contributions of all its Non-independent Directors

The implementation of Practice 4.1 is also complicated by the need to

Please provide an alternative practice and explain how the alternative

Timeframe : Others By FY2021

Application : Not applicable - No independent director(s) serving beyond 9 years

Practice 4.3 - Step Up

Application : Not Adopted

The Board has delegated to the NC the responsibility for assessing

In assessing candidates for Senior Management positions, the Board

The Board now comprises 12 Directors, of which 2 are women.

Notwithstanding the above, the Board believes in the benefits of gender

The Board has formalised and adopted a Board Diversity Policy on 14

Please provide an alternative practice and explain how the alternative

Explanation on : The NC is chaired by Dato’ Idrose Bin Mohamed who is an Independent

The following 4 evaluation forms are used:

(i) Independent Director's Self-Assessment Checklist;

The Board and Board Committees were assessed as a whole, while

The criteria for Director’s self-performance covers areas such as

For Board and Board Committee assessments, the criteria cover

Independent Directors are assessed based on their relationship with the

The evaluation results were presented to the Board on 24 January 2019.