Magnum : 2023 Corporate Governance Report

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	3859
COMPANY NAME	:	Magnum 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.

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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 is collectively charged with the responsibility
application of the			of leading and managing the business and affairs of the
practice			Group in an effective manner. Each director has a legal
			duty to act in good faith and in the best interest of the
			Company at all times.
			The Board assumes, among others, the following principal
			duties and responsibilities:
			(a)	Establishing the corporate vision and mission, as
				well as the philosophy of the Group;
			(b)	Reviewing, adopting and monitoring the overall
				strategies and direction of the Group including
				setting performance objectives and approving the
				annual operating budgets for the Group as well as
				ensuring that the strategies promote good
				corporate governance culture and sustainability;
			(c)	Overseeing the conduct and performance of the
				Group's businesses to evaluate whether the
				businesses are being properly managed. This
				includes ensuring the solvency for the Group and
				the ability of the Group to meet its contractual
				obligations and to safeguard its assets;
			(d)	Identifying principal risks and ensuring the
				implementation of appropriate systems to manage
				these risks;
			(e)	Succession planning for the Board and Senior
				Management, including appointing, training, fixing
				the compensation of, and where appropriate,
				replacing Key Senior Management;
			(f)	Developing and implementing an investor relations
				programme or stakeholders' communications policy
				for the Group to ensure an effective, transparent
				and regular communication with its stakeholders;
			(g)	Reviewing the adequacy and the integrity of the
				Group's internal control systems and management
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information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;

• 1. Overseeing the operation of the Group's Enterprise Risk Management Framework, assessing its effectiveness and reviewing any major/significant financial and non-financial risks facing the Group;
  2. Review and support the World Lottery Association's Responsible Gaming Framework established to ensure compliance to the comprehensive set of standards related to social responsibility;
  3. Review and ensure Management compliance to the World Lottery Association-Security Control Standards:2020 and ISO/IEC 27001:2013 standards, which entails putting in place an Information Security Management System (ISMS) with additional lottery related controls implemented; and
  4. Review the overall corporate governance performance of the Company to ensure that the Company is attuned with the evolving expectations of stakeholders, regulatory changes and market dynamics whilst remaining relevant to the needs of the Company's business and core values.
• Every year, the Board meets at least five times to discharge its duties and responsibilities in a transparent and objective manner with integrity, transparency, accountability and professionalism to safeguard the interest of all stakeholders and enhance shareholders' value as well as for long-term sustainability and growth.
• The Chairman ensures that decisions are made on a sound and well-informed basis and ensures all strategic and critical issues are considered and discussed by the Board and that all Directors received clear, relevant and comprehensive information on a timely basis.
• The Executive Directors formulate and initiate corporate proposals and business strategies for Board's discussion, approval and adoption. Thereafter, they will oversee and monitor the implementation of the Board's procedures and policies within the budgeted resources approved by the Board.
• The Board receives updates from the Management on the Group's operations and performance as well as the status of implementation of the Board's policies and decisions during the Board Meetings.
• Annual key performance indicators are set for important tasks and communicated to Management, and will be periodically reviewed during monthly Management's meeting and any critical unresolved issues will be escalated to the Board for decision during its quarterly meeting.

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• The Board reviews and approves the Group's capital expenditures, operational and other supplemental budgets annually to ensure that the necessary resources are in place for the Group to meet its objectives.
• Apart from the four Board Committees, sub-committees such as Management Risk Committee, Information Security Committee, and ESG Committee have been established to assist and complement the Board and its Committees in the execution of its responsibilities.
  The Board is aware that this delegation of work does not abdicate its responsibilities and such delegations do not in any way hinder nor reduce the Board's ability to discharge its function efficiently.
• Since year 2013, the Group has adopted a Business Continuity Plan and Disaster Recovery Plan in line with the World Lottery Association-Security Control Standard/ISO 27001 which is reviewed annually and tested at least once a year.
• The Directors published the Group's vision and mission statements as well as the core values on the Company's Integrated Annual Report and website to promote and implement good corporate culture within its Group which reinforces ethical, prudent and professional behaviour with emphasis on customer-centricity.
• The Directors also published its Board Charter, Code of Business Conduct and Ethics, its Committees' Terms of Reference, Directors' Fit and Proper Policy and other official corporate frameworks on the Company's website to ensure its obligations to its stakeholders are understood and met.

Explanation for	:
departure

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

Measure :

Timeframe :

4

Intended Outcome

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

Practice 1.2

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

Application	:	Applied
Explanation on	:	The Board is led by a Non-Executive Chairman, Tan Sri Dato'
application of the		Surin Upatkoon. The key roles and responsibilities of the Non-
practice		Executive Chairman are clearly set out and established in the
		Board Charter which include, among others, the following:
		(a)	responsible for the leadership, effectiveness, conduct and
			instilling good corporate governance practices of the
			Board;
		(b)	managing the Board's communications and the Board's
			effective supervision over the Management;
		(c)	enduring orderly conduct and proceedings of the Board
			and general meeting;
		(d)	ensuring Board proceedings are in compliance with good
			conduct and best practices;
		(e)	encouraging active participation and allowing dissenting
			views to be freely expressed;
		(f)	protecting the interest and provide for the information
			needs of various stakeholders; and
		(g)	maintaining good contact and effective relationships with
			external parties and investing public.
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

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 position of Chairman is held by Tan Sri Dato' Surin
application of the		Upatkoon and the Executive Directors are Dato' Lawrence Lim
practice		Swee Lin and Krian Upatkoon. The roles, responsibilities and
		authority of the Chairman and the Executive Directors are
		clearly segregated and defined in the Board Charter which is
		made available on the Company's website.
		In summary, the Chairman of the Board provides overall
		leadership to the Board in decision making, instilling good
		corporate governance practices and is primarily responsible for
		the orderly conduct and working of the Board.
		The Executive Directors are responsible for the day-to-day
		running of the Group's business and the implementation of
		Board's policies and decisions.
		The distinct and separate roles with clear division of
		responsibilities in the Board ensure a balance of power and
		authority at all times, such that no one individual has
		unfettered decision-making powers.
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	:	Applied
Explanation on	:	The Chairman of the Board had in March 2023 relinquished his
application of the		positions as the Chairman and member of the Remuneration
practice		Committee. Since March 2023, he no longer sits in any Board
		Committees.
Explanation for	:
departure

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

Measure :

Timeframe :

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 suitably qualified and competent
application of the		Company Secretaries. Every Director also has ready and
practice		unhindered access to the advice and services of the Company
		Secretaries. Both Company Secretaries are qualified to act as
		company secretary and meet the requirement under Section
		235 of the Companies Act 2016. They also hold valid practising
		certificates issued by the Registrar of Companies under Section
		241 of the Companies Act 2016.
		The Company Secretaries play an advisory role to the Board
		particularly with regard to the Company's constitution, Board
		policies and procedures, corporate governance issues and
		Directors' responsibilities in complying with regulatory
		requirements, codes, guidance and legislation.
		The Company Secretaries also regularly update the Board on
		changes to statutory and regulatory requirements and advise
		the Board on the impact, if any, to the Company and the Board.
		The Company Secretaries attend all Board and Board
		Committees meetings as well as general meetings and ensure
		that deliberations and decisions are well documented and kept,
		and subsequently communicated to the relevant Management
		for appropriate actions.
		The Company Secretaries also serve notices to the Directors
		and principal officers to notify and periodically remind them of
		the closed periods for dealings in the Company's shares
		pursuant to the provisions under the Listing Requirements. In
		addition, they work closely with Management to facilitate the
		flow of timely and accurate information to the Board.
		The Company Secretaries constantly keep themselves abreast
		of the evolving capital market environment, regulatory changes
		and developments through attendance at relevant conferences
		and continuous training programmes.
		The Board is satisfied with the support and performance
		provided by the Company Secretaries in assisting the Board to
		discharge its duties.
Explanation for	:
departure
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Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure :

Timeframe :

9

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	:	The Board recognises that decision making process is highly
application of the		dependent on the quality of information furnished. As such, the
practice		Board expects and receives adequate, timely and quality
		information on an ongoing basis to enable the Board to
		discharge its duties effectively.
		The Board receives updates from the Management on the
		Group's operations and performance as well as the status of
		implementation of the Board's policies and decisions during the
		Board Meetings.
		Prior to a Meeting, a formal agenda and the relevant proposal
		papers together with supporting documents are provided to the
		Board members not less than five business days or a shorter
		period where deliberations involve price-sensitive information
		in accordance with the listing requirements, before the relevant
		Board and Board Committee meetings to ensure that they have
		sufficient time to peruse, deliberate, obtain additional
		information and/or seek further clarification on the mattes to
		be tabled at the meetings.
		The Board meetings are chaired by a Non-Executive Chairman,
		who is responsible to ensure that each of the agenda is
		adequately reviewed and thoroughly deliberated within a
		reasonable time frame. The Board meetings' dates of the
		Company are planned ahead of schedule and a commitment is
		obtained from the Directors on their availability to attend the
		Board meetings.
		Where a director is directly or indirectly interested in any
		transaction entered into by the Company, he/she has a duty to
		make an immediate declaration to the Board and he/she is
		required to abstain from deliberations and decisions of the
		Board on the transaction.
		The Chairman shall cause minutes to be duly entered in the
		books provided for the purpose of all resolutions and
		proceedings of all meetings of the Board. The minutes of the
		Board meeting shall be signed by the Chairman of the meeting
		at which the proceedings were held or by the Chairman of the
		next succeeding meeting and if so signed, shall be conclusive
		evidence without any further proof of the facts thereon stated.
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