Dutch Lady Milk Industries : Corporate Governance Report 2020

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	3026
COMPANY NAME	: DUTCH LADY MILK INDUSTRIES BERHAD
FINANCIAL YEAR	:	December 31, 2020

OUTLINE:

SECTION A - DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

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

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

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

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SECTION A - DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

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

Intended Outcome

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

Practice 1.1

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

Application	:	Applied
Explanation on	:	The Board plays an active role in the development of the Company's
application of the		strategy. At each Board meeting, the Managing Director reports to
practice		the Board on various management issues such as the Company's
		business performance, marketing strategies, commercial performance,
		risk management, sustainability initiatives and other matters of
		strategic importance and the Board reviews and deliberates on these
		matters. The Board also receives a comprehensive summary of the
		Company's financial performance from the Finance Director for each
		quarterly reporting period.
		In November 2020, the Board together with Management deliberated
		on the financial budget for the financial year ending 31 December
		2021 and the same was approved for implementation.
Explanation for	:
departure

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

Measure:

Timeframe:

2

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 Chairman ensures that the Company is guided by good corporate
application of the		governance practices. He facilitates robust dialogue during Board
practice		meetings and draws out diverse perspective from the Board members.
		He always encourages input and Board members are comfortable to
		challenge recommendations brought forth by Management. The
		Chairman ensures that there is a good balance between the time
		allocated to governance matters and discussions on business
		performance and strategies during Board meetings. He also ensures
		that meetings focuses on key issues and are not side tracked by
		unnecessary topics.
Explanation for	:
departure

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 1.3

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

Application	:	Applied
Explanation on	:	The roles of the Chairman and the Managing Director are separate and
application of the		there is a clear division of responsibilities between them. The
practice		Managing Director is an appointee of the major shareholder and
		heads the Management Team. He is primarily responsible for the day
		to day management of the business and operations of the Company.
		The Chairman is an independent director who has never assumed an
		executive position in the Company.
Explanation for	:
departure

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

Measure:

Timeframe:

4

Intended Outcome

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

Practice 1.4

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

Application	:	Applied
Explanation on	:	The Company Secretary is a licensed secretary qualified to act as
application of the		Company Secretary under Section 235 of the Companies Act 2016. She
practice		has legal qualifications and provides legal and company secretarial
		advice to the Company's Management Team and the Board as a
		whole. All Board members have access to the advice and services of
		the Company Secretary in carrying out their duties. The Company
		Secretary facilitates overall compliance with the Listing Requirements,
		the Companies Act 2016 and the recommendations in compliance with
		the Malaysian Code on Corporate Governance (as amended from time
		to time).
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