COMPANY NAME: KGI Mutual Benefit Association Inc.
COMPANY STRUCTURE:  
  Class 1 Class 3 Class 5
  Class 2 Class 4
FINANCIAL YEAR END 2016
SECTOR Insurance MBA

PENALTY

A. Rights of shareholders
Y/N Reference/Source Document
A.1 Basic shareholder rights
   
A.1.1(P) Did the company fail or neglect to offer equal treatment for share repurchases to all shareholders? OECD Principle II (A) N/A KGI MBA is a non-profit aasociation and owned by the members
A.2 Shareholders, including institutional shareholders, should be allowed to consult with each other on issues concerning their basic shareholder rights as defined in the Principles, subject to exceptions to prevent abuse.
   
A.2.1(P) Is there evidence of barriers that prevent shareholders from communicating or consulting with other shareholders?

OECD Principle II (G)
Shareholders, including institutional shareholders, should be allowed to consult with each other on issues concerning their basic shareholder rights as defined in the Principles, subject to exceptions to prevent abuse.

N KGI MBA is a non-profit aasociation and owned by the members
A.3 Right to participate effectively in and vote in general shareholders meeting and should be informed of the rules, including voting procedures, that govern general shareholders meeting.
   
A.3.1(P) Did the company include any additional and unannounced agenda item into the notice of AGM/EGM?

OECD Principle II (C) 2

N There were no additional and unaanounced agenda item in the Notice of AGM
A.4 Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed.
   
  Did the company fail to disclose the existence of:
   
A.4.1(P) Shareholders agreement?

OECD Principle II (C) 2

N KGI MBA is a non-profit aasociation and owned by the members and there is no shareholders aggreement.
A.4.2(P) Voting cap? N The association has no voting cap since KGI MBA is owned by the members
A.4.3(P) Multiple voting rights? N  
A.5 Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed.
   
A.5.1(P) Is a pyramid ownership structure and/ or cross holding structure apparent?

OECD Principle II (D):
Capital structures and arrangements that enable certain shareholders to obtain a degree of control disproportionate to their equity ownership should be disclosed.

N/A KGI MBA is a non-profit aasociation and owned by the members
 
B. Equitable treatment of shareholders
   
B.1 Insider trading and abusive self-dealing should be prohibited.
   
B.1.1(P) Has there been any conviction of insider trading involving directors/commissioners, management and employees in the past three years?

OECD Principle III: The Equitable Treatment of Shareholders
(B) Insider trading and abusive dealing should be prohibited.

ICGN 3.5 Employee share dealing
Companies should have clear rules regarding any trading by directors and employees in the company's own securities. Among other issues, these must seek to ensure individuals do not benefit from knowledge which is not generally available to the market.

ICGN 8.5 Shareholder rights of action
... Minority shareholders should be afforded protection and remedies against abusive or oppressive conduct.

N There were no conviction of insider trading involving directors/commissioners, management and employees.
B.2 Protecting minority shareholders from abusive action
   
B.2.1(P) Has there been any cases of non compliance with the laws, rules and regulations pertaining to significant or material related party transactions in the past three years?

OECD Principle III
(B) Insider trading and abusive dealing should be prohibited

ICGN 2.11.1 Related party transactions
Companies should have a process for reviewing and monitoring any related party transaction. A committee of independent directors should review significant related party transactions to determine whether they are in the best interests of the company and if so to determine what terms are fair.

ICGN 2.11.2 Director conflicts of interest
Companies should have a process for identifying and managing any conflicts of interest directors may have. If a director has an interest in a matter under consideration by the board, then the director should not participate in those discussions and the board should follow any further appropriate processes. Individual directors should be conscious of shareholder and public perceptions and seek to avoid situations where there might be an appearance of a conflict of interest.

ICGN 8.5 Shareholder rights of action
Shareholders should be afforded rights of action and remedies which are readily accessible in order to redress conduct of company which treats them inequitably. Minority shareholders should be afforded protection and remedies against abusive or oppressive conduct.

N There were no cases of non compliance with the laws, rules and regulations pertaining to significant or material related party transactions in the past three years?
 
C. Role of stakeholders
   
C.1 The rights of stakeholders that are established by law or through mutual agreements are to be respected.
N  
C.1.1(P) Have there been any violations of any laws pertaining to labour/employment/ consumer/insolvency/ commercial/competition or environmental issues?

OECD Principle IV
(A) The rights of stakeholders that are established by law or through mutual agreements are to be respected.

N There were no violations of any laws pertaining to labour/employment/ consumer/insolvency/ commercial/competition or environmental issues
C.2 Where stakeholders participate in the corporate governance process, they should have access to relevant, sufficient and reliable information on a timely and regular basis.
   
C.2.1(P)

Has the company faced any sanctions by regulators for failure to make announcements within the requisite time period for material events?

OECD Principle IV
(B) Where stakeholders participate in the corporate governance process, they should have access to relevant, sufficient and reliable information on a timely and regular basis.

N The company has not faced any sanctions by regulators for failure to make announcements within the requisite time period for material events.
 
D. Disclosure and transparency
   
D.1 Sanctions from regulator on financial reports
   
D.1.1(P) Did the company receive a "qualified opinion" in its external audit report?

OECD Principle V: Disclosure and Transparency
(B) Information should be prepared and disclosed in accordance with high quality standards of accounting and financial and non-financial disclosures.
(C) An annual audit should be conducted by an independent, competent and qualified, auditor in order to provide an external and objective assurance to the board and shareholders that the financial statements fairly represent the financial position and performance of the company in all material respects.
(D) External auditors should be accountable to the shareholders and owe a duty to the company to exercise due professional care in the conduct of the audit.

ICGN 6.2 Annual audit
The annual audit carried out on behalf of shareholders is an essential part of the checks and balances required at a company. It should provide an independent and objective opinion that the financial statements fairly represent the financial position and performance of the company in all material respects, give a true and fair view of the affairs of the company and are in compliance with applicable laws and regulations.

ICGN 7.3 Affirmation of financial statements
The board of directors and the appropriate officers of the company should affirm at least annually the accuracy of the company's financial statements or financial accounts.

International Auditing Standard (ISA) No. 705 "Modifications to the Opinion in the Independent Auditor's Report" (2009).
Paras. 7, 8 and 9 specify the three types of modifications to the auditor's opinion; that is, Qualified opinion, Adverse opinion, and Disclaimer opinion respectively.

N
AUDITED FS
D.1.2(P) Did the company receive an "adverse opinion" in its external audit report? N
AUDITED FS
D.1.3(P) Did the company receive a "disclaimer opinion" in its external audit report? N
AUDITED FS
D.1.4(P) Has the company in the past year revised its financial statements for reasons other than changes in accounting policies? N The company has not revised its financial statements for reasons other than changes in accounting policies.
 
E. Responsibilities of the Board
   
E.1 Compliance with listing rules, regulations and applicable laws
   
E.1.1(P) Is there any evidence that the company has not complied with any listing rules and regulations over the past year apart from disclosure rules?

OECD Principle VI (D)
(7) Ensuring the integrity of the corporation’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards.

Companies are also well advised to set up internal programmes and procedures to promote compliance with applicable laws, regulations and standards, including statutes to criminalise bribery of foreign officials that are required to be enacted by the OECD Anti-bribery Convention and measures designed to control other forms of bribery and corruption. Moreover, compliance must also relate to other laws and regulations such as those covering securities, competition and work and safety conditions. Such compliance programmes will also underpin the company’s ethical code.

N/A  
E.1.2(P) Have there been any instances where non-executive directors/commissioner have resigned and raised any issues of governance-related concerns? UK CODE (JUNE 2010)
A.4.3 Where directors have concerns which cannot be resolved about the running of the company or a proposed action, they should ensure that their concerns are recorded in the board minutes. On resignation, a non-executive director should provide a written statement to the chairman, for circulation to the board, if they have any such concerns.
N There were no instance a director have resigned and raised any issues of governance related concerns
E.2 Board Appraisal
   
E.2.1(P) Does the Company have any independent directors/commissioners who have served for more than nine years or two terms (which ever is higher) in the same capacity?

OECD Principle V
(C) An annual audit should be conducted by an independent, competent and qualified, auditor in order to provide an external and objective assurance to the board and shareholders that the financial statements fairly represent the financial position and performance of the company in all material respects.

Examples of other provisions to underpin auditor independence include, a total ban or severe limitation on the nature of non-audit work which can be undertaken by an auditor for their audit client, mandatory rotation of auditors (either partners or in some cases the audit partnership), a temporary ban on the employment of an ex-auditor by the audited company and prohibiting auditors or their dependents from having a financial stake or management role in the companies they audit.

N Company Website
E.2.2(P) Did the company fail to identify who are the independent director(s) / commissioner(s)? ICGN 2.4 Composition and structure of the board
ICGN 2.4.1 Skills and experience
ICGN 2.4.3 Independence
N Company Website
E.3 External Audit
   
E.3.1(P) Is any of the directors or senior management a former employee or partner of the current external auditor (in the past 2 years)?

OECD Principle V
(C) An annual audit should be conducted by an independent, competent and qualified, auditor in order to provide an external and objective assurance to the board and shareholders that the financial statements fairly represent the financial position and performance of the company in all material respects.

Examples of other provisions to underpin auditor independence include, a total ban or severe limitation on the nature of non-audit work which can be undertaken by an auditor for their audit client, mandatory rotation of auditors (either partners or in some cases the audit partnership), a temporary ban on the employment of an ex-auditor by the audited company and prohibiting auditors or their dependents from having a financial stake or management role in the companies they audit.

N Company Website
E.4 Board structure and composition
   
E.4.1(P) Is any of the directors a former CEO of the company in the past 2 years?

 

N Company Website