The Group is committed to good corporate governance and managing its affairs in a fair and transparent manner to create long-term sustainable value for the Company’s shareholders and the wider community through ethical and responsible business practices. This report describes the Company’s Corporate Governance Framework, Policies, Procedures and Standards (collectively the “Code”) adopted by the Group during FY2019.

Myanmar‘s
Most Transparent Company
FMI ranked Top 3
on Pwint Thit Sa Report
since 2017

Myanmar’s Best
Disclosure Practice
Award 2019

FMI has acceded to the
UN Global Compact
since November 2012 and is committed
to promote global corporate responsibility
with 10 guiding principles

FMI Governance Structure

FMI Board

There is a clear separation of roles and responsibilities in the Board so that no one individual represents a considerable concentration of power. The Audit and Risk Management Committee (“ARMC”), Nominating Committee (“NC”) and Remuneration Committee (“RC”, and collectively, the “Board Committees”) comprise Non-Executive Directors only.

The Group believes that an active, well-informed and accountable Board is essential to uphold high standards of corporate governance.

The principal functions of the Board include:

  1. providing entrepreneurial leadership, setting strategic objectives and ensuring that the necessary financial and human resources are in place for the Company to meet its objectives;
  2. establishing a framework of prudent and effective controls which enables risks to be assessed and managed, including the safeguarding of shareholders’ interests and the Company’s assets;
  3. reviewing the performance of the FMI’s management team (the “Management”)
  4. identifying the key stakeholder groups and recognising that their perceptions affect the Company’s reputation;
  5. setting the Company’s values and standards (including ethical standards);
  6. ensuring that obligations to shareholders and other stakeholders are understood and met; and
  7. considering sustainability issues, such as environmental and social factors, as part of its strategic formulation.

The Board undertakes the responsibility of overseeing the corporate performance of the Company and is accountable to shareholders for the processes and structure of directing and managing the business and affairs of the Company. The Management remains accountable to the Board, and is responsible for the day-to-day operations and administration of the Company in accordance with the policies and strategies set by the Board. In support of this, the Board has established a framework of effective risk management that allows it to assess and manage the risks associated with the Company’s businesses.

The Management recognises the importance of providing the Board with timely and accurate information and keeps the Board informed of any material developments. The Board reviews and approves the Company’s annual financial statements and aims to provide shareholders with a balanced and clear assessment of the Company’s financial position.

The Board reviews all decisions that may have a material impact on the Company’s financial position or earnings. In addition, the Board also recommends the declaration of dividends for approval by shareholders, and approves the publishing of the financial statements, the acquisition or disposal of key assets and the nomination of Directors. The Board’s advice is sought on all key financial decisions, strategies, and projects with special attention given to the Board’s opinion on the impact of the Management’s decisions on the local community.

U Theim Wai is the Executive Chairman of the Company.

As the Executive Chairman, he plays an instrumental role in providing the Company with strong leadership and vision, assisting the Board in developing policies and strategies, and ensuring that these are implemented effectively, as well as to promote high standards of corporate governance.

The Executive Chairman bears primary responsibility for the workings of the Board by ensuring effectiveness in all aspects of its role, including setting the agenda for Board meetings with input from Management and exercising control over the quality, quantity and timeliness of information flow between the Board and Management to encourage constructive relations within the Board and between the Board and Management. To promote a culture of openness and debate at the Board, he ensures that adequate time is available for discussion of all agenda items and strategic issues, and also facilitates the effective contribution of Non-Executive Directors. At the AGM and other shareholder meetings, he plays a pivotal role in fostering constructive dialogue between shareholders, the Board and Management.

U Kyi Aye
Chairman

Prof. Dr. Yi Yi Myint
Member

U Than Aung
Member

The ARMC is appointed by the Board of Directors from amongst the members of the Board. The ARMC plays a key role in assisting the board in areas such as independent advice, assurance, and assistance to the Board on the Company’s risk, compliance, control, governance framework, and its external accountability responsibilities including in relation to financial statements. The ARMC reviews the half-yearly and annual financial statements of the Group before submission to the Board for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards as well as compliance with any stock exchange and statutory/regulatory requirements.

The ARMC directs and works with Management to develop and review policies and processes to address and manage identified areas of risk in a systematic and structured manner in achieving the Board’s strategic objectives. The ARMC also oversees and advises the Board on the current risk exposures and future risk strategy of the Company. Under the Company’s constitution, the ARMC generally undertake such other functions and duties as may be required by statute or the relevant securities rules, and the board by such amendments made thereto from time to time and require the attention of the ARMC.

U Myat Thin Aung
Chairman

Prof Dr. Yi Yi Myint
Member

U Kyi Aye
Member

The RC is appointed by the Board of Directors from amongst the members of the Board. The RC considers and makes recommendations to the Board concerning the Company’s remuneration policy, level and mix of remuneration and procedure for setting remuneration. The RC ensure that remuneration arrangements support the overall strategic goals of the Company and enable the recruitment, retention and motivation of Directors and senior management personnel while also complying with the requirements of rules and regulation. The RC also reviews the Company’s obligations arising in the event of termination of the Executive Director’s or Management’s service agreements, to ensure that such service agreements contain fair and reasonable termination clauses.

The RC ensures that the level and structure of remuneration offered will be appropriate to the responsibilities undertaken and the level of contribution to the Company; and after taking into account factors like the industry and comparable company standards, the Company’s performance and the individual’s performance. The RC covers all aspects of remuneration including but not limited to Directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind to successfully manage the Company.

Prof. Dr. Aung Tun Thet
Chairman

U Than Aung
Member

U Linn Myaing
Member

The NC makes recommendations to the Board on all matters relating to the appointment of Directors. The NC also works with the Board to determine the appropriate qualifications, skills and experience for the Board as a whole and its individual members with the objective of creating a diverse Board comprised of individuals with experience in finance, business, government, and education. Any appointment or removal of a Director is subject to approval from the entire Board to develop and maintain a formal and transparent process. The Company is strongly committed to fostering diversity and inclusion on its Board, leveraging on the collective strength of its members who possess diverse abilities, knowledge, skills and professional experiences which could contribute to spurring innovative thinking and sustainable competitive advantages for the long-term growth and success of the Company.

The NC regularly reviews the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to any changes. The committee has the duty to ensure all Directors submit themselves for re-nomination and re-appointment at regular intervals and at least once every 3 years. The NC further keep under review the leadership needs of the Company, both executive and non-executive, with a view to ensuring the continued ability of the Company to compete effectively in the marketplace.

With Non-Executive Directors in the majority, the Board maintains a strong independence. The Non-Executive members of the Board bring a diverse set of experiences and opinions that help to create an environment of independent thinking. Any decision involving an Executive Director or company related to an Executive Director is made with the concerned Executive Director abstaining from voting and not participating in deliberations. This ensures that Board decisions are made in accordance with the interests of all stakeholders and that no individual dominates the Board’s decisions.

The Company conducts an induction programme for newly appointed Directors which seeks to familiarise Directors with the Group’s businesses, board processes, internal controls and governance practices. It includes site visits, Management presentations on the Group’s businesses, strategic plans and objectives, meetings with Management and briefings on key areas of the Company’s operation.

FMI’s Directors attending Directors and Officers Duties under the new Myanmar Companies Law Training delivered by Baker & McKenzie on Sept 18th, 2018

Directors are encouraged to attend seminars, conferences and workshops to supplement and keep themselves updated with current market/industry information and to ensure continuous professional development at the Company’s expense.

The Board comprises 8 Directors, with 6 Non-Executive Directors and 2 Executive Directors. The Non-Executive Directors have strong experiences in entrepreneurship, finance and academia which allows for effective decision making. The Company benefits from a diverse range of objective perspectives with highly respected members of the community as Board members.

The Directors that serve the Company are:

Executive Directors

U Theim Wai @ Serge Pun
U Tun Tun

Non-Executive Directors

U Myat Thin Aung
U Than Aung
Prof. Dr. Aung Tun Thet
U Kyi Aye
U Linn Myaing

FMI Governance

All Directors are encouraged to voice their views on the Management’s decisions and share opinions during Board meetings. The Board seeks to create a receptive environment where perspectives can be voiced openly. Having the benefit of outside perspectives and experiences, Non-Executive Directors are especially encouraged to speak their minds to ensure the Company’s decisions accurately account for different interests. Non-Executive Directors may also meet and communicate outside of Board meetings in order to discuss Company matters in an independent setting.

Composition of the Board and Board Committees

NameDate of First AppointmentLast – Re-electionBoardARMCRCNC
U Theim Wai @ Serge Pun 12 Sep 20042016Chairman---
U Tun Tun17 Nov 20092017Member---
U Myat Thin Aung31 Jul 19922017Member-Chairman-
U Than Aung31 Jul 19922017MemberMember-Member
Prof. Dr. Aung Tun Thet3 Dec 20132018Member--Chairman
U Kyi Aye5 Nov 20152016MemberChairmanMember-
U Linn Myaing2 Jul 20122018Member---

Dates for Board meetings are communicated to all Directors in advance. Meetings are convened when material developments in the Company’s affairs are likely to occur, and meetings are held at the Company’s registered office. All materials required for proper consideration of issues affecting the Company are sent to Directors in advance to allow them to carefully consider the proper course of action. The Board meets to decide the date on the Annual General Meeting and Board Committees usually meet before the formal Board meeting, or whenever the need arises. The recommendations of the Board Committees are placed before the Board for approval.

Board Attendance of Meetings

 Board MeetingAudit & Risk Management
Committee Meeting
Nominating
Committee Meeting
Remuneration
Committee Meeting
28th Annual
General Meeting
Total number of meetings held21111
Executive Directors
U Theim Wai @ Serge Pun 2N.A.N.A.N.A.1
U Tun Tun2N.A.N.A.N.A.1
Daw Zarchi Tin *2N.A.N.A.N.A.N.A.
Non-Executive Directors
U Myat Thin Aung2N.A.N.A.11
U Than Aung211N.A.1
Prof. Dr. Yi Yi Myint21N.A.11
Prof. Dr. Aung Tun Thet2N.A.1N.A.1
U Kyi Aye21N.A.11
U Linn Myaing 2N.A.1N.A.1

Directors’ Attendance for FY2019 is set out above.
* Daw Zarchi Tin was appointed as a new Board member with effect from July 2018.
** U Linn Myaing was re-designated from Executive Director to Non-Executive Director with effect from July 2018.
*** U Nyunt Tin resigned from the Board with effect from November 2018.
**** Prof. Dr. Kyaw Yin Hlaing resigned from the Board with the effect from May 2019.

Remuneration of Executive Directors

Remuneration
Band & Name of Director
Base/Fixed SalaryVariable Component Or Bonuses (%)Benefits-in-kind, Allowance And
Other Incentives
Total
PaidDeferred
Executive Directors
MMK 250 Million – MMK 520 Million
Daw Zarchi Tin

22%

-

-

78% *

100%
MMK 140 Million – MMK 250 Million
U Theim Wai @ Serge Pun
U Tun Tun

-
78%

84%
-

-
-

16%
22% *

100%
100%

* Include the shares award as per the Company’s Employee Share Incentive Scheme.

Remuneration of Non-Executive Directors

 FeeOther Benefits
Basic Retainer Fee
Non-Executive Director10,000,000Nil
Fee for Appointment to Audit and Risk Management Committee
Committee Chairman2,000,000Nil
Committee Member1,000,000Nil
Fee for Appointment to Nominating Committee and Remuneration Committee
Committee Chairman1,500,000Nil
Committee Member1,000,000Nil

The fee structure of the Non-Executive Directors for FY2019.

SHAREHOLDERS HAVING MORE THAN 5% INTEREST

As of 31 March 2020  

NAMES OF SHAREHOLDERSHAREHOLDING INTERESTS
No.%
THEIM WAI @ SERGE PUN9,008,50633.23%
YANGON LAND CO., LTD.8,001,53329.51%

*No other Board member and senior executive holds more than 5% of FMI shareholdings.

The Company has engaged Myanmar Vigour & Associates Limited (“Deloitte Myanmar”) as its external auditor, to audit the accounts of the Company and all its subsidiaries. The report of the external auditor is set out in the Independent Auditor’s Report section of the FY2019 Annual Report.

In compliance with the Securities and Exchange Law and the Securities and Exchange Rule issued by Ministry of Finance, and the regulations issued by Securities and Exchange Commission of Myanmar, the Company strictly prohibits insiders such as members of the Board and employees in special positions with undisclosed material information related to business or financial situation of the Company from buying or selling securities for its own account or for other persons, disclosing or providing material information and giving advice to other persons to buy or sell securities based on unpublished material information.

The Board ensures from time to time that internal rules in place are reviewed and developed to prevent insider trading, and employees get the necessary training to protect insider information from accidental disclosures to the public.

Corporate Governance Manual

As of Nov 2018