Malaysian CG Regulatory Framework

What benefits can be obtained through embracing CG? Premium brands are placed by investors on companies with excellent CG practices Listed issuers will stand out, be uniquely valuable and distinguished from their competitors and be attractive to the investing community The Regulators perspective; convergence of CG standards to global best practices and transparency enables regulatory harmonization which will bring about greater cross-border activities and investor confidence Bursa Malaysias role in the enhancement of Malaysias CG regime In recognising and subscribing to the importance of CG in the context of global capital market, Bursa Malaysia has taken a leading role in enhancing the standard of the Malaysian CG practices of listed issuers. For a capital market to be globally competitive and at par with international jurisdiction, it needs to be recognised as a premier and stable market. The market needs to be regarded as well-regulated from an investor protection perspective and must meet international benchmarks in terms of standards of CG practices. As a manifestation of our commitment to elevating the standards of CG of our listed issuers, we have in April 2008 established a Corporate Governance department. The key responsibilities of the new department are as follows:Formulate short, medium and long term CG policies to achieve high standards of CG and elevate the country CG rating of Malaysia at the international level Strategise and implement appropriate measures to enhance standards of CG amongst listed issuers Lead all CG related initiatives across divisions of Bursa Malaysia to achieve high standards of CG Monitor the standards of CG, review existing plans and execute changes to raise standards of CG

CG Initiatives
The following are key initiatives which Bursa Malaysia has undertaken to raise the standard of CG practices amongst listed issuers and to improve our international CG ratings: Monitoring of adherence to CG standards by: Performing compliance reviews of CG disclosures in annual reports Bursa Malaysia reviews the listed issuers annual reports on CG disclosures as part of Bursa Malaysias

monitoring process. We also engage with the listed issuers on their disclosure shortcomings to ensure adequate and accurate information on their CG practices. Carrying out on-site examinations on selected issuers to determine substance over form issues Bursa Malaysia ascertains conformance of CG practices as disclosed or announced by listed issuers, through on-site examinations of the listed issuers which are selected based on defined indicators. Bursa Malaysia will engage with the listed issuers after the examination to ensure improvement measures and other remedial actions are undertaken. A CG Guide to encourage boards to raise the level of CG through the structuring and implementation of sound practices and processes. Bursa Malaysia has developed a practical guide to be used as a basic guide in familiarising the members of the board, managers and shareholders in relation to embracement of CG practices in substance. This is to assist the members to inculcate thoughtful governance practice as opposed to tick-the-box mentality in relation to embracement of CG practices. Collaboration with other organisations to enhance standards of CG amongst listed issuers Bursa Malaysia is collaborating with other professional bodies and industry players who are instrumental in fostering best practices towards improving CG and integrity in the business community and to explore ways to enhance the standards of CG practices of our listed issuers. Efforts to raise Malaysias CG Ratings Bursa Malaysias commitment to raise the CG rating on Malaysia is visible through our unceasing engagement and communication with international CG rating agencies. Engagements with institutional shareholders Bursa Malaysia also engages on a continuous basis with local institutional investors to draw awareness on how shareholders rights can influence company behaviour. Bursa Malaysia believes that corporate Malaysia will benefit greatly when all stakeholders play their part to raise the standards of CG.