Hap Seng Plantations : Corporate Governance Report 2023

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	5138
COMPANY NAME	: Hap Seng Plantations Holdings Berhad
FINANCIAL YEAR	:	December 31, 2023

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 ("Board") of Hap Seng Plantations Holdings
application of the	Berhad ("HSP" or the "Company") is committed to foster a corporate
practice	governance culture that is grounded on the hallmarks of accountability,
	objectivity and transparency. As fiduciaries, the Board members are
	fully cognisant of the need to discharge their duties and responsibilities
	with unfettered judgment, due care and skill at all times.
	The Board is responsible for governing the business and affairs of the
	Company. The Board sets the strategic direction of HSP and monitors
	the outcome of efforts to reach that direction. The Business Plan 2024
	was approved by the Board during the Board meeting held on 20
	November 2023. The Board has also established key performance
	indicators to define, measure and monitor the performance and
	progress towards achieving the Company's goals.
	Setting the tone from above, the Board is committed to inculcate ethical
	and professional practices among the employees. Honesty and integrity
	are key values as the Board believes that the success of HSP's business
	is built on the foundation of trust and confidence.

Board Committees are established by the Board to assist the Board with oversight functions in selected responsibility areas. Managing director of the Company ("Managing Director") and executive/senior management team ("Management") are responsible for implementing policies and strategies of the Board and overseeing HSP's operations. The demarcation of responsibilities between the Board and Management is outlined in the board charter of HSP ("Board Charter"). While the Board delegates its responsibility in accordance with the matters reserved in the board charter, the Board at all times exercises oversight function of the Board Committees and Management.

Explanation for	:
departure

2

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

Measure:

Timeframe:

3

Intended Outcome

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

Practice 1.2

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

Application	:	Applied
Explanation on	:	The Board is led by Dato' Mohammed Bin Haji Che Hussein, an
application of the		independent chairman ("Chairman").
practice
		The Chairman is responsible for leading and ensuring effective conduct
		of the Board. In fulfilling this role, he amongst others carries out the
		following:
		• ensuring that appropriate procedures are in place to govern the
		Board's proceedings;
		• setting the agenda, style and tone of Board deliberations,
		facilitating effective review, analysis, discussions and contributions
		by each director with sufficient time allocated for discussion of
		complex and contentious issues, encouraging constructive debate
		so as to enable a sound decision-making process;
		• ensuring accurate and timely information, in particular about the
		performance of the Company, is furnished to Board members;
		• establishing a close relationship of trust with the Management,
		Managing Director and Board, providing support and advice while
		respecting executive responsibility and hence, fostering a
		constructive relationship or partnership between the Board and
		Management team;
		• leading efforts to fulfill the Board's training needs; and
		• chairing of general meetings, and ensuring a smooth, open and
		constructive dialogue between the Board and the shareholders;
		and establishing and monitoring good governance practices in the
		Company.
		The responsibilities of the Chairman are set out in the Board Charter.
Explanation for	:
departure

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

Measure	:
	4

Timeframe:

5

Intended Outcome

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

Practice 1.3

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

Application	:	Applied
Explanation on	:	The positions of Chairman and Managing Director are held by different
application of the		individuals (i.e. Dato' Mohammed Bin Haji Che Hussein as the Chairman
practice		and Datuk Edward Lee Ming Foo as the Managing Director).
		The Chairman leads the Board in its collective oversight of Management
		and the Managing Director focuses on the business and day-to-day
		management of the Company. The division of responsibilities between
		the Chairman and Managing Director is clearly articulated on the Board
		Charter.
Explanation for	:
departure

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

Measure:

Timeframe:

6

Intended Outcome

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

Practice 1.4

The Chairman of the board should not be a member of the Audit Committee, Nomination Committee or Remuneration Committee

Note: If the board Chairman is not a member of any of these specified committees, but the board allows the Chairman to participate in any or all of these committees' meetings, by way of invitation, then the status of this practice should be a 'Departure'.

Application	:	Departure
Explanation on	:
application of the
practice
Explanation for	:	Presently, the Chairman is a member of the Audit Committee,
departure		Nominating Committee and Remuneration Committee ("Board
		Committees").
		Although the Board acknowledges the perceived or potential risk of
		self-review by the Chairman assuming membership of the various Board
		Committees, there is no basis to conclude that such risk has been
		actualised.

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

Measure	:	Nominating Committee would review and recommend suitable Board
		members to replace of the Chairman in various Board Committees.
Timeframe	:	Others

7

Intended Outcome

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

Practice 1.5

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

Application	:	Applied
Explanation on	:	The Board is supported by professionally qualified and competent
application of the		Company Secretaries, namely, Ms Cheah Yee Leng and Ms Lim Guan
practice		Nee.
		The Board is regularly apprised and advised by the Company Secretaries
		of statutory and regulatory requirements, roles and responsibility as
		well as pertinent governance matters. In discharging their role as
		counsels to the Board, the Company Secretaries also ensures proper
		supply of relevant information as well as the accuracy and adequacy of
		meeting materials, organising and facilitating the convening of board
		meetings, meetings of the board committees, general meetings, in
		consultation with the chairman, recording of meeting minutes and
		resolutions of the Board and Board Committees. The Company
		Secretaries also serve as a focal point for stakeholders' communication
		and engagement on corporate governance issues.
		The Company Secretaries constantly keep themselves abreast of
		changes in the realm of corporate governance through continuous
		professional development. During the year 2023, they attended various
		external training in relation to changes in regulatory requirements.
		Process flows on the operational processes and procedures of the
		secretarial function have been put in place to guide the day-to-day
		running of the function. Detailed information on the functional
		accountabilities of the Company Secretaries is encapsulated in the
		Board Charter.
Explanation for	:
departure

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

Measure	:
Timeframe	:
	8

Intended Outcome

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 1.6

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

Application	: Applied
Explanation on	: Board members are given appropriate materials in advance of each
application of the	Board and Board Committee meeting. For Board meetings, these
practice	materials include but not limited to:
	• Annual and quarterly financial statements;
	• Report on current trading and business issues from the managing
	director;
	• Proposals for capital expenditures (if any);
	• Proposals for acquisitions and disposals not in the ordinary course
	of business (if any);
	• Annual budget or business plan;
	• Risk management status report;
	• Management discussion and analysis to be incorporated in the
	Company's annual report;
	• Statement on risk management and internal control;
	• Sustainability statement;
	• Corporate governance report and statement; and
	• Reports of the Board Committees.
	These meeting materials and notice to the meeting are furnished to the
	Board members at least five business days in advance of the meeting.
	Exceptions may be made in certain ad-hoc or urgent instances when
	directors unanimously consent to a shorter notice period.

In order to ensure directors are well-informed of the meeting proceedings, the minutes of the meetings are recorded by the Company Secretaries and circulated to the Board members in a timely manner upon conclusion the relevant meeting. Minutes of meetings record the decisions, including the key deliberations, rationale for each decision made, and any significant concerns or dissenting views.

Explanation for	:
departure

9

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

Measure:

Timeframe:

10