For Padini and Bonia Groups, they have practicing Principle 1.1 'the board should establish clear functions reserved for the board and those delegated to management'. Padini's Chairman and Managing Directors roles are separated. The Chairman is accountable to make sure that the Board has good corporate governance procedures and practices and functions properly, providing guidance and direction to Management in order to achieve Padini's goals and objectives. Whereas, Managing Director is responsible to deal with daily operations and all the business activities. Bonia's Group roles are also clearly set out and separated between Group Executive Chairman who is also Chief Executive Officer and the Group Managing Director. There is a balance of authority and power among them. Both of Padini and Bonia groups have practicing Principle 1.1 which the roles and responsibilities of Board and Management are clearly state.
For Padini and Bonia Groups, they have practicing Principle 1.5 'the board should have procedures to allow its members access to information and advice'. Padini' each Director can access to all information within the Group, the company secretary and the senior management. Besides, when there is a need, Directors have the responsibility and right to make further inquiries or consult professional advisers. Whereas, Directors of Bonia will be provide with the timely information and related agenda that can discharge their duties effectively. Every quarter financial results, report of the Group' business progress, and reports of regulatory and audit will be provide. Besides that, Directors of Bonia can access to the information and advice of internal and external auditors, company secretaries and other independent professionals. Both of the Groups have practicing this principle that the Board can access to all information and can seek advice in carrying out their duties.
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Principle 2.1 'the board should establish a Nominating Committee which should comprise exclusively of non-executive directors, a majority of whom must be independent'. Currently, Padini has a stable Board composition, thus the Board do not consider it is necessary to establish a Nomination Committee. However, Padini mentioned that a Nomination Committee will establish when there is a need. Whereas, Bonia's Nomination Committee comprise three Independent Non-Executive Director currently whom are Lim Fong Boon, Chong Sai Sin, and Datuk Ng Peng Hong @ Ng Peng Hay who also Chairman of Bonia. Padini does not establish a Nomination Committee, while the Nomination Committee of Bonia comprise exclusively of Independent Non-Executive Director.
Principles 2.2 'the Nominating Committee should develop, maintain and review the criteria to be used in the recruitment process and annual assessment of directors'. For Bonia, a Nomination Committee help to identify relevant and suitable expertise and skill need by the Board, to review the Board size, structure and composition, and to select suitable candidates to join the Board. Besides, The Nomination Committee also assesses each individual Director's performance and suggests filling the seat in the respective Committees according to their expertise. Moreover, the Nomination Committee review annually that what mix of skills and experiences and other qualities that need to bring to the Board, for instance, the core competencies of Non-Executive Directors. Furthermore, they will review and plan training programs for the Board. Whereas, Padini currently does not have Nomination Committee.
Principles 2.3 'the board should establish formal and transparent remuneration policies and procedures to attract and retain directors.' Currently, Board of Padini does not have Remuneration Committee. Thus Padini Director's remuneration is determined by the whole Board through the employment contrast. At the Annual General Meeting, Board will recommend and after approved by shareholders, Non-Executive Directors will be given Directors' fees. The remuneration package of Executive Directors includes salaries, fees and allowances, bonus, benefit in kind, and statutory contribution. While, Non Executive Directors are only get fees and allowances. Whereas, Bonia have three Remuneration Committees and all of them are Non-Executive Directors. The remuneration package of Bonia is same as Padini, also Directors' fees are paid when get the approval from shareholders. Although Padini does not have Remuneration Committee but Board will discuss and recommend, while Bonia has Remuneration Committee. Both of them establish formal and transparent remuneration policies and procedures to attract and retain directors.
For Padini and Bonia Groups, they have practicing Principle 5.1 'the Audit Committee should ensure financial statements comply with applicable financial reporting standards'. Audit Committee of Padini has the responsibility to overseeing the Group's financial report quality and the Directors of Padini responsible to make sure that the annual financial statements are prepared that comply with the provisions of the Companies Act 1965 and accounting standards in Malaysia. Whereas, Bonia' Directors ensure that Bonia Group has used appropriate accounting policies in preparing financial statement with the cautious and reasonable adjudication. Besides that, also ensure meet the accounting standards with explanation in the notes to the financial statements. Both of the Groups meet the financial reporting standard and make it reliable.
Always on Time
Marked to Standard
For Padini and Bonia Groups, they have practicing Principle 6.2 'the board should establish an internal audit function which reports directly to the Audit Committee'. For Padini and Bonia, every quarter the internal audit function will reports directly to the Audit Committee its findings and recommendation on risk control procedures. Audit Committees taken into account the risk change that may exposed to the Group. Audit Committees need to review and approve the internal audit plan to ensure effective internal control system and its activities independently objectively assure the system to continue operate satisfactory. Audit Committee review the findings and recommendations with Management. Both of them reports to Audit Committees the risk and resolution of management, internal control system and governance system.
For Padini and Bonia Groups, they have practicing Principle 5.2 'the Audit Committee should have policies and procedures to assess the suitability and independence of external auditors'. Audit Committee of Padini and Bonia review the external auditor's financial year ended 30 June 2011 audit plan to make sure that it adequately covers all the activities of Groups. Besides, review and discuss the problems and result arising in financial statements from their audit and the resolution of such issues that mention in the report. This is to make sure that external audit is engage in accordance with all the relevant regulatory and professional requirements. Besides that, review external auditor's independence and performance before reappointment and compensation. Audit Committee can report to the Board when found that the external auditor is not suitable for reappointment. Through these policies both of the Group access the independent and suitability of external auditors. This make the audit function more effectively.
For Padini and Bonia Groups, they have practicing Principle 6.1 'the board should establish a sound framework to manage risks'. Padini provide a control of environment and framework. Padini Group's internal control is maintain through having clearly defined responsibilities, limit of authority and lines of reporting and review periodically to support strong control of environment. Besides that, internal policies and procedures regularly updated to identifying the risk and deal with the operational deficiencies. This enhance risk management framework, supporting the activities of the Group. For Bonia, delegation responsibility also defined. Besides, the actual performance will review against target result and take corrective action to mitigate risks. Moreover, Bonia have regular scheduled management meetings to report, discuss and to plan. Both of the Group have an effective internal controls system to implement own sound framework and manage risk.
Both of the Padini and Bonia have practicing Principle 1.7 'the board should formalise, periodically review and make public its board charter'. For Padini, all of following were formalised, periodically review and stated in the annual report such as Padini's roles of Chairman and Managing Directors are separate and have their own responsibilities. Besides, is the establishment of Padini's Audit Committee which comprise three members whom all are Independent Non-Executive Director. Moreover, Board of Padini meets regularly throughout the year. During the financial year ended 30 June 2011, six Board meetings were held. The number and the attendance of Board meetings held were also stated. Whereas, division of responsibility of Bonia' Board was also review and stated. Annual report also shown that Bonia have numeration, remuneration and audit committee. Besides, there were four Board Meetings held during the financial year ended 30 June 2011.