VOICE OF MINORITY SHAREHOLDERS WATCH
The AGM season is gaining momentum and we have attended a few AGMs. Below are some of our observations:
1. Step-up practice of 9 year tenure limit for independent directors
Step-up 4.3 of MCCG states that the board has a policy which limits the tenure of its independent directors to nine years.
Step-up practices are meant to encourage companies to go a step further in strengthening their governance practices and processes. Companies that aspire to achieve excellence in corporate governance in particular, Large Companies, should consider the adoption of Step-ups.
Some companies have erroneously stated that they have adopted the Step-up and then go on to say that beyond the 9 years they would put up the independent director’s re-appointment for shareholders’ approval at the AGM.
The Step-up prohibition is absolute in that the independent director cannot continue as an independent director after 9 years.
2. Practice 12.3 states that Large Companies with a large number of shareholders or which have meetings in remote locations should leverage technology to facilitate-
- Voting including voting in absentia: and
- Remote shareholders’ participation at General Meetings
Some companies have stated that they have adopted this practice when in fact what they have adopted was electronic voting at their General Meetings.
To-date, none of the companies we have come across has adopted Practice 12.3.
3. Practice 7.2 states that 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 band of RM 50,000.
Companies are generally reluctant to adopt this Practice and some of the reasons given for the non-adoption are the risk of staff pinching, the sensitive nature of the information and security risks. Some companies provide the total number of senior management staff and their cumulative remuneration.
This is not in compliance with the stipulated Practice. Often, their attempts to ‘explain an alternative’ fall short because the alternative is merely a narration that is not in substance an ‘alternative’ to the Practice.
MSWG TEAM
6 April 2018
MSWG’S AGM WEEKLY WATCH 9 – 13 APRIL 2018
For this week, the following are the AGMs/EGMs of companies which are in the Minority Shareholders Watch Group’s (MSWG) watch list.
The summary of points of interest is highlighted here, while the details of the questions to the companies can be obtained via MSWG’s website at www.mswg.org.my.
|
Date & Time |
Company |
Venue |
|
09.04.18 (Mon) |
Protasco Bhd |
De Centrum Tower @ De Centrum City, Jalan Ikram-Uniten, Kajang |
|
11.04.18 (Wed) |
Pharmaniaga Bhd |
Royale Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, PJ |
|
11.04.18 (Wed) |
Boustead Heavy Industries Corp. Bhd |
Royale Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, PJ |
|
12.04.18 (Thur) |
Boustead Plantation Bhd |
Royale Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, PJ |
|
12.04.18 (Thur) |
Malayan Banking Bhd |
The Malaysia International Trade and Exhibition Centre (MITEC), Jalan Dutamas, KL |
|
12.04.18 (Thur) |
KLCC Property Holdings Bhd |
Mandarin Oriental Hotel KLCC |
|
12.04.18 (Thur) |
Carlsberg Brewery Malaysia Bhd |
Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, KL |
|
12.04.18 (Thur) |
Boustead Holdings Bhd |
Royale Chulan Damansara, 2 Jalan PJU 7/3, Mutiara Damansara, PJ |
|
The points of interest to be raised: |
|
|---|---|
|
Company |
Points/Issues to Be Raised |
|
Pharmaniaga Bhd |
1. Could the Board provide an update on the proposed extension of Concession Agreement (“CA”) with Ministry of Health, Malaysia (“MOH”) which will expire on 30 November 2019? 2. The Key Audit Matters on page 113 of the Annual Report state that the carrying value of the cost of investment in the small volume injectable subsidiary was RM200 million and an impairment assessment was performed since the plant has not fully utilised its maximum capacity as most of the products are still at development stage. How was the performance of the subsidiary during the financial year under review? |
|
Boustead Heavy Industries Corp. Bhd |
The Managing Director in his Statement reported that the contribution from the Joint Venture (JV) Companies was primarily from the submarine and LCS project undertaken by Boustead DCNS Naval Corporation Sdn Bhd (“BDNC”) and Contraves Advanced Devices Sdn Bhd (CAD Group) respectively. He further stated that the Group’s current year’s profit was impacted due to liquidated damages for its In-Service Support under the RMN Scorpene Submarine contract. (a) What are the factors that contributed to the negative results of the joint ventures amounting to RM13.458 million for the FY ended 31 December 2017? (b) Which are the joint ventures that contributed to the negative results for the FY2017? (c) What are the Board’s strategies/measures for ensuring the profitability and earnings of joint ventures, moving forward? |
|
Boustead Plantation Bhd (AGM/EGM) |
What are the key sustainability initiatives that would set a new standard for the sector?
|
|
Carlsberg Brewery Malaysia Bhd |
|
|
Malayan Banking Bhd |
We refer to your “Investor Presentation - Financial Results FY2017” dated 28 February 2018 and would like to raise the following questions:- We note the “watch list” category (40%) (as stated on Page 14 on the report) on Commodities Exposure to Oil & Gas related sectors. a) What is the current loan exposure to the upstream & supporting upstream business for both the “watch list” and “normal” borrowers? b) What is the likely impact of MFRS 9 on the loan provisioning in this segment, going forward? |
|
KLCC Property Holdings Bhd |
1. What is the expected cost of achieving full Green Building Index Certification (“GBI”) for PETRONAS Twin Towers and Menara 3 PETRONAS by 2018 and what are the tangible benefits of achieving the GBI index? 2. What is the Capex for the Phase 3 refurbishment that was completed and what is the Capex for the next phase of development of Dayabumi Complex that will commence in 2018 as mentioned in the CEO’s Year In Review on page 47 of the Annual Report. What would be the additional net lettable area (“NLA”) of the Dayabumi Complex after the completion of the renovation? |
|
Boustead Holdings Bhd (AGM) |
Key Audit Matters (c) in the Independent Auditors’ Report on page 132 of the Annual Report, states certain subsidiaries have reported continuing operating losses and/or depleting shareholders’ funds. It is also stated that these are indications that the investment in them with a carrying amount of RM976.4 million may be impaired. Which are the subsidiaries referred to in the Key Audit Matters? |
LOCAL NEWS AND DEVELOPMENTS
Highlights of Bank Negara Malaysia Annual Report 2017
Wages too low, says Bank Negara
https://www.thestar.com.my/business/business-news/2018/03/31/wages-too-low-says-bank-negara/
OPR to stay above inflation level in 2018
Bank Negara raises 2018 GDP forecast for Malaysian economy
What will Lim do next?
https://www.thestar.com.my/business/business-news/2018/03/31/what-will-lim-do-next/
SP Setia slapped with second round of tax and penalties
http://www.thesundaily.my/news/2018/03/28/sp-setia-slapped-second-round-tax-and-penalties
Malaysia’s PMI slips below 50-point level again in March to 49.5
http://www.theedgemarkets.com/article/malaysias-pmi-slips-below-50point-level-again-march-495
Malaysia Feb producer prices down 3.4% on year
http://www.theedgemarkets.com/article/malaysia-feb-producer-prices-down-34-year
SC’s Deputy Chief Executive Appointed as Judicial Commissioner
https://www.sc.com.my/post_archive/scs-deputy-chief-executive-appointed-as-judicial-commissioner/
Pavilion REIT calls off placement exercise
http://www.thesundaily.my/news/2018/03/30/pavilion-reit-calls-placement-exercise
Mohd Khamil resigns as non-executive chairman of DRB-Hicom, Pos Malaysia
Court of Appeal Jails Ex-Director for Furnishing False Statements to Stock Exchange
Bursa Malaysia welcomes new incentive to boost the Leap Market
http://www.bursamalaysia.com/corporate/media-centre/media-releases/5593
We will investigate fake announcements — Bursa CEO
http://www.theedgemarkets.com/article/we-will-investigate-fake-announcements-—-bursa-ceo
GLOBAL NEWS AND DEVELOPMENTS
China's Response to U.S. Metals Tariffs Goes Into Effect Monday
http://www.theedgemarkets.com/article/chinas-response-us-metals-tariffs-goes-effect-Monday
US 4Q growth slows to 2.9%; consumer spending surges
http://www.theedgemarkets.com/article/us-4q-growth-slows-29-consumer-spending-surges
China March official services PMI edges up to 54.6
Trump escalates attack on Amazon, focussing on tax, shipping
Japan retail sales rise in February, suggest growing consumer confidence
Volkswagen shareholder against reelection of Wolfgang Porsche to board
BoJ bid to taper by stealth made tougher by supercharged yen
China launches new share listing options to attract innovative firms
Global mergers and acquisitions reach record high in first quarter
UK house price growth unexpectedly slows to 7-month low — Nationwide
US dollar share of global currency reserves hits 4-year low, says IMF
MSWG Analysts
Lya Rahman, General Manager, [email protected]
Rebecca Yap, Head, Corporate Monitoring, [email protected]
Quah Ban Aik, Head, Corporate Monitoring, [email protected]
Norhisam Sidek, Manager, Corporate Monitoring, [email protected]
Wong Kin Wing, Manager, Corporate Monitoring, [email protected]
Hoo Ley Beng, Manager, Corporate Monitoring, [email protected]
Elaine Choo, Manager, Corporate Monitoring, [email protected]
Lee Chee Meng, Manager, Corporate Monitoring, [email protected]
Abdul Halim Alias, Manager, Corporate Monitoring, [email protected]
Mustaqim Yusof, Analyst, Corporate Services, [email protected]
Muhammad Faris bin Mohamed Yusof, Analyst, Corporate Monitoring [email protected]
DISCLOSURE OF INTERESTS
• With regard to the companies mentioned, MSWG holds a minimum number of shares in all these companies covered in this newsletter.
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This newsletter and the contents thereof and all rights relating thereto including all copyright is owned by the Badan Pengawas Pemegang Saham Minoriti Berhad, also known as the Minority Shareholders Watch (MSWG).
The contents and the opinions expressed in this newsletter are based on information in the public domain and are intended to provide the user with general information and for reference only. Best efforts have been made to ensure that the information contained in this newsletter is accurate and current as at the date of publication. However, MSWG makes no express or implied warranty as to the accuracy or completeness of any such information and opinions contained in this newsletter. No information in this newsletter is intended to be or should be construed as a recommendation to buy or sell or an invitation to subscribe for any, of the subject securities, related investments or other financial instruments thereof.
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