CORPORATE GOVERNANCE & FINANCIAL REPORT 2019
CORPORATEGOVERNANCE& FINANCIALREPORT2019
2 - 32CORPORATE GOVERNANCE OVERVIEW STATEMENTA View from the ChairmanGovernance at a GlanceLeadership and EffectivenessAccountabilityEngagementAdditional DisclosureAudit Committee ReportNomination and Compensation Committee Report33 - 38STATEMENT ON RISK MANAGEMENT ANDINTERNAL CONTROL39 - 42FINANCIAL PERFORMANCEKey HighlightsFinancial CalendarGroup Financial Highlights5 Years’ StatisticsINSIDETHISREPORTENHANCING QUALITY OFLIFE AND CONTRIBUTING TOA HEALTHIER FUTUREAs we pursue our aspirations, weare ever-mindful of our purpose.This is intrinsic to our commitments,inspiring us as individuals, sustainingus as a company, and allowing us tocontribute to society in meaningfulways. This subsequently propels thelong-term growth of the business.43 - 129FINANCIAL STATEMENTSDirectors’ ReportStatements of Financial PositionStatements of Profit or Loss and Other ComprehensiveIncomeConsolidated Statement of Changes in EquityStatement of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsStatement by DirectorsStatutory DeclarationIndependent Auditors’ Report130 - 133OTHER INFORMATIONShareholdings StatisticsList of Properties Held
Nestlé(Malaysia)BerhadCORPORATE GOVERNANCEOVERVIEW STATEMENTA VIEW FROM THE CHAIRMANOur good corporate governance standards create value for ourbusiness in various ways, specifically by supporting our: sustained financial performance; high quality and nutritious products for our consumers; and talent attraction and retention.A CULTURE ROOTED IN ETHICS AND VALUESNestlé has a groupwide culture that aligns productivity andperformance with ethical practices and social consciousness. TheGroup operates within a clear ethics framework, aligned to its values,and we take a zero-tolerance approach to corruption and collusion.The Nestlé Code of Business Conduct guides the way we go aboutdischarging our responsibilities. Ongoing ethics training amongemployees and the signing of an Integrity Pledge by all Directors andemployees provide constant reinforcement.Dear Shareholders,Good corporate governance is central to our approach toenhance the creation of value in the short, medium and longterm for the benefit of all stakeholders of Nestlé (Malaysia)Berhad (“Company”). The Board of Directors (“Board”)and the Management Team are committed to policiesand practices that meet high levels of compliance andtransparency in disclosure.Nestlé has a rich and proud history of success and achievementscreated by thousands of committed people over many years.Nestlé (Malaysia) Berhad and its group of companies (“Group”) aremanaged with honesty and integrity.Nestlé’s values and culture are centered on the unwavering goalto improve the lives of our consumers. These foundations havesustained our business despite adverse macroeconomic conditions.CREATING VALUE WITH GOOD CORPORATE GOVERNANCEBy upholding the highest possible corporate governance standards,Nestlé gives all its stakeholders confidence that it is a well-governedand well-managed company.2The Board is able to focus on the business and make well-informeddecisions that are in the Company’s best interests, by ensuring thatour structured governance frameworks are firmly in place, andthat all practical details of the different governance processes areincorporated.The Group’s legal compliance programme ensures compliance withthe applicable range of laws and regulations and Nestlé’s policiesand guidelines. Each division, comprising of the Business Units andFunctions has a designated Compliance Champion which overseesand monitors compliance. In addition, internal audits are undertakenin all operations to assess their effectiveness. Where required,external compliance assessments are undertaken.Regulatory developments are monitored on an ongoing basis andthe Company proactively engages with regulators through variousindustry and stakeholders engagement. This supports industryadvocacy effects, but also to ensure a common interpretation ofrequirements and therefore understanding the controls needed tocomply.More Information on Our Compliance Culture can be read on page 4 to 5of this reportOUR REPORTWe have structured our Report to reflect the themes of the MalaysianCode on Corporate Governance (“MCCG”). It provides an overviewof the works undertaken by the Board and its Committees in fulfillingour governance responsibilities and describes how the principles andprovisions of the MCCG have been applied by the Company during theyear ended 31 December 2019.The Board will continue to strengthen the Group’s governanceprocesses to ensure that the business as a whole is aligned with bestpractices and that our approach to disclosure remains timely andtransparent.Y.A.M. Tan Sri Dato’ Seri Syed Anwar JamalullailChairmanThis Corporate Governance Overview Statement should be read with the Corporate Governance Report, which is available on the Company’s website at www.nestle.com.my
CorporateGovernance& FinancialReport 2019CREATING VALUE THROUGH BRAND TRUSTWe recognise the importance of trust in the brand. It is important that the Board and all employees of the Group are guided by theNestlé Corporate Business Principles (“NCBP”) to ensure all our practices are consistent with our values and principles. The NCBPalso focuses on work place practices and ethics, employee relations and employee human rights. The ten principles of the NCBP canbe summarised as follows:WE DELIGHT CUSTOMERSNutrition, Health and WellnessConsumer Communication Nestlé Principles on Nutrition, Health and Wellness Quality Assurance and Product Safety Nestlé Quality Policy Nestlé Nutrition Quality PolicyWE CARE ABOUT PEOPLENestlé Consumer Communication PrinciplesNestlé Policy on Nutrition and Health ClaimsNestlé Nutritional Profiling SystemNestlé Nutritional CompassThe World Health Organization (“WHO”) International Code ofMarketing of Breast-milk Substitutes (“WHO Code”) Nestlé Privacy PolicyWE DEVELOP RESPONSIBLE PARTNERSHIPSHuman Rights in Our Business ActivitiesSupplier and Customer Relations Nestlé Responsible Sourcing StandardUnited Nations Global CompactInternational Labour Organisation (“ILO”) Conventions 87, 138, 182United Nations Convention of the Rights of the Child: Article 32The Organisation for Economic Co-operation and Development(“OECD”) Guidelines for Multinational Enterprises 2000 ILO Declaration on Multinational Enterprises 2006Leadership and Personal ResponsibilityAgriculture and Rural Development Nestlé Policy on Environmental SustainabilityWE PROMOTE SUSTAINABILITY Nestlé Management and Leadership Principles Nestlé Code of Business Conduct Nestlé Human Resources PolicyClimate Warning-Plastic Waste and BiodiversitySafety and Health at WorkWater Nestlé Policy on Safety and Health at Work Nestlé Policy on Environmental Sustainability Nestlé Commitments on Water Nestlé Policy on Environmental Sustainability3
Nestlé(Malaysia)BerhadCORPORATE GOVERNANCEOVERVIEW STATEMENTNESTLÉ CODE OF BUSINESS CONDUCTCOMPLIANCE FRAMEWORK STRUCTUREThe Nestlé Code of Business Conduct (“NCBC”) details theconduct and responsibilities of the Board and all employees.The Compliance Steering Committee, chaired by the Chief Executive Officer (“CEO”) is responsible for settingthe direction of the Group’s Compliance Framework and to support the successful execution of a ComplianceProgramme. The Compliance Programme covers among others, the implementation of internal policies andprocedures for compliance with applicable laws, rules and regulations, the evaluation and discussion ofcurrent compliance topics, the Group’s internal controls, identification of gaps and risks within the Group andthe continuous implementation of employee awareness and engagement activities.The NCBC is premised on three basic principles:(a) avoidance of any conduct that could damage or createrisk to the Group or its reputation;(b) legal compliance and honesty, to place the Group’sinterests ahead of personal or other interests; and(c) guidance on how the Board and Group’s employeesshould behave.The Directors of the Company have a duty to declareimmediately to the Board should they be interested in anytransaction to be entered into directly or indirectly with anyentities within the Group.Individual committees are then formed separately to support and implement the Compliance Programmeand directions of the Compliance Steering Committee. For example, for compliance with the Personal DataProtection Act 2010, a Personal Data Committee comprising of business controllers of relevant business andfunction units was formed to ensure the Group’s data privacy compliance plans are effectively implemented.The progress of the implementation of the Compliance Programme is then reported to the ComplianceSteering Committee.For the financial year ended 31 December 2019, the Compliance Steering Committee convened threemeetings.ENSURING CONTINUED VTHROUGH OUR COMPWHISTLEBLOWINGNESTLÉ MALAYSIA ANTI-CORRUPTION, GIFTS &ENTERTAINMENT GUIDELINESTo support good corporate governance practices, manage risks anddemonstrate accountability, the Group has in place a whistleblowingprocedure which allows employees, suppliers or third parties toreport any potential non-compliance incident within the Group.The Nestlé Malaysia Anti-Corruption, Gifts & EntertainmentGuidelines (“Guidelines”) aims to maximise the impact of Nestléglobal policies on bribery and corruption, in particular the NestléCorporate Business Principles and Nestlé Code of BusinessConduct by localising it into the local environment, for it to bemore practical and effective. This ensures that the highest level ofbusiness integrity is maintained by the employees, the Board andthird parties in conducting their business with the Group.Employees are encouraged to speak up and raise any suspicions ofwrongdoing, malpractice or impropriety in the management of theGroup’s business. Besides being able to raise issues directly to theirline managers or the Market Compliance Officer, employees can lodgea report through the Group’s Non-Compliance Hotline, by telephone,webmail or email. Suppliers and third parties may also avail themselvesto a similar whistleblowing hotline called Tell-Us, by telephone, webmailor email.The identity of the whistleblower is safeguarded at all times and isprotected from coercion, retaliation or reprisal for their cooperation. Forthis purpose, the Non-Compliance Hotline and Tell-Us are operated byan independent third party service provider. All reports will be properlyinvestigated and treated with confidence by the Business Ethics & FraudCommittee.In 2019, six non-compliance complaints were received under thewhistleblowing system, all of which have been duly investigated andnecessary actions have been taken.Non-Compliance Hotline (Employees)Dial:1800-88-4307 (Access code : 41830)Email: .speakupfeedback.eu/web/nm34k/my(Access Code: 41830)4Tell Us (External)Dial:1800-88-4307 (Access Code: 91738)Email: feedback.eu/web/A2VY73(Access Code: 91738)The Group issues regular communications on its stand againstcorruption to its employees. The Nestlé Malaysia Anti-Corruption,Gifts & Entertainment Guidelines (For Customers & Suppliers)which embeds the Group’s position against corruption, is clearlycommunicated to the public in the Nestlé corporate website.In view of the new Section 17A of the Malaysian Anti-CorruptionCommission Act 2009 (“MACC Act”), which introduces corporateliability provision for bribery and corruption, the Group is takingsteps to further strengthen its current processes and procedures toensure adequate procedures are in place when this new provisiontakes effect.
CorporateGovernance& FinancialReport 2019NESTLÉ RESPONSIBLESOURCING STANDARDThe Nestlé Responsible Sourcing Standard describes the requirements and ways of working that the Group applies together with upstream supply chain third partiesto ensure sustainable long-term supply and to achieve the Group’s purpose, especially to continually reduce any impact on the planet’s resources. This documentsets out ways of working with regards to sourcing and production. It begins with the Group to suppliers, through intermediaries and all the way back to the originsof the goods and services purchased.The Nestlé Responsible Sourcing Standard replaces previous versions of the Nestlé Supplier Code, the Nestlé Responsible Sourcing Guideline and the NestléCommitment on the Responsible Use of Materials from Agricultural Origin. It contributes to the implementation of the Group’s commitment to the OECD Guidelinesfor Multinational Enterprises, the Core Conventions of the International Labour Organization, and the United Nations Sustainable Development Goals (“SDGs”).D VALUE CREATIONMPLIANCE CULTURECONSUMERSNESTLÉ MALAYSIA CHARTER: INFANT FORMULA POLICYGuided by the Nestlé Quality Policy and the Nestlé Consumer CommunicationPrinciples, the Group’s products and brands are developed, manufactured andmarketed in a responsible manner. In order to achieve the Group’s vision ofuncompromising quality, the Group maintains one toll free consumer hotline1 800 88 3433 for all its products with the objective of effectively attending andresponding to consumer complaints and feedback in a timely manner.The Group strongly supports the WHO Code that aims to protect,promote and support breastfeeding. In further conformity withthe Malaysia Code of Ethics for the Marketing of Infant Foods andRelated Products (“Malaysia Code of Ethics”) which seeks to regulateappropriate marketing, distribution and proper use of breast milksubstitutes, the Group has adopted the Nestlé Malaysia Charter:Infant Formula Policy to ensure that its efforts will respect a mother’sfreedom of choice and will not in any way undermine the superiorityof breast milk.COMPETITION LAW AND ANTI-TRUST POLICYThe Group continuously implements its own competition law training programmes forits employees across various business units and functions.As part of the Group’s continuous efforts to instill a strong culture of complianceand values throughout the organisation, the Group has since circulated its own“Handbook on Competition/Anti-trust Law”, educational and informative competitionlaw compliance materials to its employees.In 2019, the Group has also extended its co-operation and assistance to the MalaysiaCompetition Commission (“MyCC”) in its nationwide market review conducted on thefood sector under the Competition Act 2012.The Group will continue to roll-out compliance programmes to ensure that the Group’sexisting business transactions and practices continue to adhere to current competitionlaws and are conducted within the framework of the Nestlé Group Antitrust LawPolicy.WHO CODE OMBUDSPERSON SYSTEMThe Group has an internal WHO Code Ombudsperson System inplace to monitor and strengthen its implementation of the NestléMalaysia Charter: Infant Formula Policy. The system allows anyof the Group’s employees to alert the Group via the appointedOmbudsperson of potential policy violations or raise concerns withregards to the marketing of Infant Nutrition products in a confidentialway and outside the line management structure.PERSONAL DATA PROTECTIONBUSINESS ETHICS & FRAUD COMMITTEE (“BEFC”)A BEFC is responsible to review all complaints and/or allegations lodged via theNon-Compliance Hotline, Tell-Us or any other avenues (e.g. phone, letter, e-mail).This committee, consisting of senior managers of the Group and chaired by theCEO, ensures an investigation is conducted, reviews the investigation and decideson the next course of action based on the nature of the violation. Reports andupdates are presented and discussed at the Audit Committee meetings prior topresentation to the Board.The Nestlé Malaysia Personal Data Guidelines outlines therequirements for the Group and its employees in handling and usingpersonal data in compliance with the Personal Data Protection Act2010 (“PDPA”).The Group continuously keeps its privacy practices updated withcontinuous engagement with the relevant business units andfunctions which process personal data.5
Nestlé(Malaysia)BerhadCORPORATE GOVERNANCEOVERVIEW STATEMENTGOVERNANCEAT A GLANCEBOARD AND BOARD COMMITTEEMEETING ATTENDANCE 2019Name of MembersBOARD OF DIRECTORS4Independent1Non-Independent2Executive DirectorsDIVERSITY OF AGE5172Y.A.M. Tan Sri Dato’ SeriSyed Anwar JamalullailChairmanNon-Independent Non-Executive DirectorDato’ Mohd. Rafik Bin Shah MohamadIndependent Non-Executive DirectorTan Sri Datuk (Dr.) Rafiah Binti SalimIndependent Non-Executive DirectorDato’ Frits van DijkIndependent Non-Executive DirectorDIVERSITY OF TENUREDato’ Dr. Nirmala MenonIndependent Non-Executive Director43%Less than5 years57%More than6 yearsJuan AranolsExecutive DirectorChief Executive OfficerCraig ConnollyExecutive DirectorChief Financial OfficerSKILL AND EXPERIENCE OF DIRECTORSNATIONALITYEconomic and Financial AcumenMalaysianDutchSpanishAustralianStrategy and RiskSales and MarketingLegalBOARD ROLES AND THEIR RESPONSIBILITIESChairmanResponsible for the operation andleadership of the Board, ensuring itseffectiveness and setting its agenda.6Chief Executive OfficerResponsible for leading and managingthe Group’s business within a set ofauthorities delegated by the Board andfor the implementation of the Group’sstrategy and policy.Independent DirectorsThe primary responsibility ofIndependent Non-Executive Directoris to protect the interests of minorityShareholders and other stakeholders.
CorporateGovernance& FinancialReport 2019BOARDAUDITCOMMITTEE5 out of 54 out of 42 out of 25 out of 54 out of 42 out of 25 out of 54 out of 42 out of 24 out of 5*-1 out of 2*5 out of 5--5 out of 5--5 out of 5--NOMINATION ANDCOMPENSATION COMMITTEE*absent due to medical reasonsGlobal ExperienceMedical and HealthInsurancePublic Policy and RegulatoryGovernanceHuman ResourcesCorporate KnowledgeInvestor BusinessExecutive DirectorsResponsible in implementingstrategic direction, operationaldecisions and managing theday-to-day responsibilities ofthe Group, within the set ofauthorities delegated bythe Board.Non-Executive DirectorsPlay a key role in providinga solid foundation for goodcorporate governance andensure that no individual orgroup dominates the Board’sdecision-making.Company SecretaryPlays an advisory role tothe Board in relation to theCompany’s policies andprocedures, and compliancewith the relevant regulatoryrequirements.98%MEETING ATTENDANCERATE7
Nestlé(Malaysia)BerhadCORPORATE GOVERNANCEOVERVIEW STATEMENTLEADERSHIP AND EFFECTIVENESSTHE BOARDTrust is the commonality that runs through everything we do, and we have aresponsibility to look after the relationships we have with all our stakeholders.The Board and the CEO, together with the Executive Leadership Team, areresponsible for upholding good corporate governance and they instil a cultureof upholding the Group’s code of ethics. The Group will do what is required touphold its integrity and reputation, without exception and with the understandingthat effective corporate governance within an ethical environment creates valuefor all stakeholders.The role of the Board is regulated in aformal Board Charter, which definesits authority and power. While retainingoverall accountability, the Board hasdelegated authority to the CEO to runthe day-to-day affairs of the Group.The CEO is supported by the ExecutiveLeadership Team. The Board alsocreated Board Committees to enablethe Board to discharge its duties andresponsibilities properly and to fulfil itsdecision-making process effectively.The Board plays a pivotal role in strategyplanning and establishing benchmarks tomeasure the Group’s strategic objectives.The Executive Directors implementstrategies and operational decisions, andthe Non-Executive Directors provide anindependent perspective and complementthe skills and experience of the ExecutiveDirectors. They assess strategy andperformance, internal control andrisk management, governance andsustainability efforts of the Group.NESTLÉ’SGOVERNANCESTRUCTUREAND PRACTICESCREATE VALUEFOR ALL ITSSTAKEHOLDERSBY:Protecting the futureof the Group throughits sustainablepracticesEnsuring the integrityand quality of financialreportingBuilding legitimacythrough ethicalleadershipMaintaining goodreputation throughresponsible behaviourThe Board Charter is available on theCompany’s website at www.nestle.com.myThere are a number of matters which are specifically reserved for the Board’s approval, these include:81Review, approve and adopt the Company’sstrategic plans and annual budgets.2Declaration of dividends, approval of financialstatements, accounts and quarterly reports of theCompany.5Significant capital investment and disposal ofmaterial assets from the existing business to athird party.6Increase or reduction of the Company’ssubsidiary(ies)’s issued capital.
CorporateGovernance& FinancialReport 2019BOARD COMMITTEESThe Board has established two BoardCommittees with delegated authorityfrom the Board. Each Board Committee ischaired by a Non-Executive Director.The Audit CommitteeThe Audit Committee’s main objective isto assist the Board in fulfilling its oversightresponsibilities, in particular, evaluatingthe adequacy and efficiency of accountingpolicies, internal controls and financialand corporate reporting processes. Inaddition, the Audit Committee assesses theeffectiveness of the internal auditors andthe independence and effectiveness of theexternal auditors.The Nomination and CompensationCommitteeThe Nomination and CompensationCommittee’s main objective is to assist theBoard in ensuring that the Board comprisesof individuals with the necessary skills,knowledge and experience for the effectivedischarge of its responsibilities; and inmatters relating to the remuneration ofthe Board, the Management Team andemployees of the Group.As part of its nomination functions,it is responsible for assessing theindependence of Non-Executive Directors,evaluating the Board effectivenessand identifying suitable candidatesfor appointment to the Board. TheNomination and Compensation Committeealso recommends to the Board there-election/retention of Directors andreviews the succession planning for theDirectors and the Nestlé LeadershipTeam. Under its remuneration function,the Committee is empowered by theBoard to assess and approve the broadremuneration strategy for the employeesof the Group and review the remunerationpackage for the Executive Directors, theNestlé Leadership Team and the NonExecutive Directors.COMMITMENTAll members of the Board are committedand devoted to carrying out their roles andresponsibilities.To facilitate the Directors’ planning, anannual meeting calendar is preparedand given to the Directors at least eightmonths in advance before the beginningof each new financial year. Wheneverany directions or decisions are requiredurgently from the Board, in addition to thescheduled meetings, special meetings ofthe Board are convened by the CompanySecretary after consultation with theChairman. Decisions of the Board aremade unanimously or by consensus. Whereappropriate, decisions may be taken by wayof Directors’ Written Resolutions betweenthe scheduled and special meetings. In2019, seven Written Resolutions rangingfrom administrative to operational issueswere approved by the Board.The Board has set procedures in place formembers to comply with before acceptingany new external board appointment. TheChairman and the CEO will decide on theacceptance of the request and consider ifthere is a potential conflict in the pendingappointment. It will also be tabled at theNomination and Compensation Committeemeeting notwithstanding Paragraph 15.06of the Listing Requirements which allowsfor a Director to sit on the board of up to fivepublic listed companies. Such notificationof new directorship is expected to includehis/her continued time commitment to theBoard.Annually, the Directors will declare theirdirectorships in other companies andorganisations and give assurance ontheir time commitments in carrying outtheir duties and responsibilities to theCompany.None of the Directors hold more than fivedirectorships in any other public listedcompanies at any point of time.3Acquisition, divestment or closure of business.4Establishment of new substantial businesses.7Any other form of corporate restructuring notpreviously listed.8The change of name of any company withinthe Group and establishment of any newsubsidiary company.9
Nestlé(Malaysia)BerhadCORPORATE GOVERNANCEOVERVIEW STATEMENTTo enable the Board to discharge its duties, all Directors receive appropriate information in advance for the Board meetings. At least 14 days prior to each Boardand Board Committee meetings, a notice and the structured agenda, as approved by the respective Chairman of the Board or the Board Committees, will be issuedby the Company Secretary to the respective members and attendees. The Board and Board Committee papers, reading materials are generally forwarded to theDirectors at least five business days prior to the Board or Board Committee meetings for the Directors to have an understanding of the subject matter, be preparedto deal with matters to be discussed at the meetings and to enable the Board and Board Committees to make effective decisions.STRATEGYFINANCIAL Review and approve theGroup’s strategies and plans,and the implementationthereof.Receive updates on thebusiness and operationalactivities.Receive updates on thedivestment of the Chilled Dairybusiness.Receive updates on thedivestment of the PetalingJaya factory. Review and approve the cumulative full year results for the financial year ended31 December 2018 and approve the cumulative 1st half year results for the financialyear ended 31 December 2019.Review and approve the Directors’ Report and Audited Accounts for the financial yearended 31 December 2018.Review and approve the Quarterly Results.Review the report on the Company’s quarterly and previous year’s performance andoutlook for the year.Review the solvency position of the Company and approve dividend payments.Review and approve the financial results announcements.GOVERNANCE 10Note the Company’s announcements to Bursa MalaysiaSecurities Berhad (“Bursa Malaysia”).Reaffirm the Directors’ Written Resolutions passed by theBoard.Note the Minutes of Meetings of the Audit Committee, theNomination and Compensation Committee meetings.Review and approve the Board Committees’ reports andrecommendations.Review and approve the Board Charter, Terms ofReference of the Audit Committee and the Nomination andCompensation Committee.Review and approve the Diversity Policy.Review and approve the Remuneration Policy.Review and approve the Corporate Governance Reportand the Annual Report 2018.Review the Board Effectiveness Evaluation (“BEE”)Review and approve the 2019 Board ImprovementProgramme pursuant to the findings of the 2018 BEE.Review the composition and skills of the Board and BoardCommittees.Review the performance and effectiveness of the Board,Board Committees and individual Directors.Review and note the NCBC, NCBP and Anti-CorruptionGuidelines.Recommend the re-appointment of the Group’s externalauditors for the financial year ending 31 December 2019and for the Directors to fix their remuneration.Review of the Group’s compliance with the Main MarketListing Requirements of Bursa Malaysia (“ListingRequirements”).BOARD IDURING T Note the amendments/updates to the Listing Requirements andCompanies Act 2016.Note Section 17A of the MACC Act.Review the submission of the semi-annual returns to BursaMalaysia Securities Berhad.Review the compliance with the MCCG and Companies Act 2016.Review the MCCG gap assessment and evaluate the next stepstherefrom.Receive updates from the Creating Shared Value Council.Receive updates on WHO Code Compliance.Review the effectiveness of the Board meetings.Approve the Board Agenda for 2020.
CorporateGovernance& FinancialReport 2019Presentations to the Board and the Board Committees are prepared and delivered in a manner that ensures clear and adequate understanding of the subjectmatter. For any urgent matters, and for additional documents that are sent less than five business days, the Management Team will take the Board through thedocuments for a more detailed explanation.RISK MANAGEMENT AND INTERNAL CONTROL Review of the Malaysian Accounting Standards Boardand other relevant legal and regulatory requirements withregards to the quarterly and year-end financial statements.Review and approve the general budget.Review and approve the capital expenditure budget.Receive updates on taxes, including Sales & Service Tax(“SST”) & Sugar Sweetened Beverages Tax.Receive updates on the Recurrent Related PartyTransactions by the Group.Receive updates on the quarterly Nestlé S.A. results. Receive updates on Enterprise Risk Management,mitigating measures and updates.Review the cyber security risks of the Group.Review the regulatory landscape risks impacting thebusiness.Receive report on major litigation, claims and/or issueswith substantial financial impact (if any).Receive updates on the distributors’ credit risks andmanagement.Review and approve the Statement of Risk Managementand Internal Control for the Annual Report.Review the reports of the Nestlé Internal Audit, therecommendations and management responses.Review the reports of the external auditors.SHAREHOLDERS & ENGAGEMENTD IN ACTIONG THE YEAR Review and approve the Circular to Shareholders inrelation to the Proposed Renewal of Shareholders’Mandates for Recurrent Related Party Transactions of arevenue or trading nature.Review the preparation for the 2019 Annual GeneralMeeting.Receive updates on Quarterly Analyst & Investorbriefings.LEADERSHIP & PEOPLE Review the Board succession plans, Board compositionand Board Diversity
This Corporate Governance Overview Statement should be read with the Corporate Governance Report, which is available on the Company’s website at www.nestle.com.my Dear Shareholders, Good corporate governance is central to our approach to en
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