Governance & Responsibilities

Board Charter

INTRODUCTION

The Board of Directors of Ajiya Berhad (“Ajiya” or the “Company”) is collectively responsible for the sustainable performance of the Company and its subsidiaries (“the Group”). The Board is also ultimately responsible for the corporate governance and management of the Group.

This Board Charter incorporates the requirements of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”), the Companies Act 2016, the Malaysian Code on Corporate Governance (“MCCG” or the “Code”) and the Constitution. To the extent of any conflict between the terms of the Board Charter and the relevant statutory regulations, the provision of statutory regulations prevail.

OBJECTIVES

This Charter set out the key roles and responsibilities of the Board. It is a source of reference and primary induction document to assist the Board in discharging their fiduciary duties as Directors of the Company.

THE BOARD

3.1 Board Structure

3.2 Composition

3.2.1 Size and Mix of Skills

3.2.11 The Board composition shall reflect a balance mix of qualified individuals with diverse skill, experiences, knowledge and perspectives. The composition and size of the Board is such that it facilitates the decision making of the Company.
3.2.12 Until otherwise determined by a general meeting, the Company’s Constitution provides for a minimum of three (3) and a maximum of eleven (11) Directors.
3.2.13 To ensure a balance view at all Board deliberations, at least one-third of the Board shall consist of Independent Non-Executive Directors or a minimum of two (2), whichever is the higher.
3.2.14 Further, the Board ensure there is at least one woman Director on the Board and endevours to promote 30% women participation on its Board in line with Government’s aspiration.
3.2.15 The Chairman should not be a member of the Audit Committee, Nomination Committee, Remuneration Committee and Risk Management Committee.
3.2.16 At least one of the Independent Non-Executive Director must have appropriate professional qualifications or accounting or related financial management expertise as required under the MMLR.
3.2.17 No former audit partner shall be appointed as Director or member of the Audit Committee unless he has observed a cooling-off period of at least three (3) years before appointment.
3.2.18 No person shall be appointed as a Director on the Board or continue to serve as a Director if the person is or becomes an active politician. A person is considered an active politician if he is a member of Parliament, State Assemblyman or holds a position at the Supreme Council or division level in a political party.
3.2.19 The Board through the Nomination Committee shall, from time to time, review its size and composition to ensure an appropriate balance of skills, experiences and diversity.

 

3.2.2 Independence

3.2.21 A newly appointed Independent Director shall provide to the Company a letter of confirmation of “Independence” as prescribed under the MMLR.
3.2.22 All Independent Directors shall provide to the Company on annual basis, a declaration of his independence in a form or such other documents as the Board may from time to time prescribe or approve.
3.2.23 The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. If the Board intends to retain such Director as Independent Director without re-designation as Non-Independent Director, the Board must justify itself that the independency and objectivity of such Independent Director is not compromised and to seek annual shareholders’ approval through a two-tier voting process.
3.2.24 Nevertheless, the maximum tenure of an Independent Director shall not more than a cumulative tenure of twelve (12) years from the date of appointment as Independent Director. He shall vacate his office or to be re-designated as Non-Independent Director.

 

3.2.3 Diversity

3.2.31 The Board recognizes the benefits of having a diverse Board. The Board is mindful of various diversity factors to strengthen the Board composition. Appointments to the Board are based on merit basis, skills and experience with consideration being given to the attributes of the candidate, without discrimination to gender, age, religion and ethnic.
3.2.32 The Board has established the Diversity Policy in applying the principles of diversity for recruiting, developing and appointing Board members.

 

3.3 Re-election

3.3.1 Pursuant to the Company’s Constitution, one third of the Directors of the Company for the time being shall retire by rotation at the Annual General meeting and be eligible for re-election.
3.3.2 Every newly appointed Director during the year is subjected to re-election at the next Annual General Meeting following his/her appointment.
3.3.3 The Constitution further provides that all Directors shall retire from office once at least in each three (3) years and shall be eligible for re-election.

 

3.4 New Appointment

3.4.1 The appointment of a new Director is a matter for consideration and decision by the full Board upon appropriate recommendation from the Nomination Committee. In evaluating the suitability of candidates, the Nomination Committee will consider the benefit of all aspects in order to maintain an appropriate range and balance of skills, expertise, experience and independence including the diversity of gender, ethnicity and age of each candidate.
3.4.2 In identifying the candidates for appointment as Directors, other than relying on the recommendations from the existing Board members, Management and/or major shareholders, the Nomination Committee will also explore independent sources to identify suitably qualified candidates.
3.4.3 The Board is guided by the approved Nomination Policy for recruitment of new Directors.

 

3.5 Director’s Fit and Proper Requirements

3.5.1 All members of the Board are required to have the necessary qualities, competencies and experience to perform the duties and responsibilities as a Director in the most effective manner.
3.5.2 The fit and proper assessment on any person identified to be appointed as a Director or to continue holding the position as a Director shall be conducted prior to the appointment or proposed re-election/re-appointment as a Director.
3.5.3 The Nomination Committee shall be guided by the Directors’ Fit and Proper Policy in conducting the above fit and proper assessment.
3.5.4 The fit and proper criteria includes the following:
  • Character and Integrity;
  • Experience and Competence; and
  • Time and Commitment.

 

3.6 Duties and Responsibilities

3.6.1 Board Roles

3.6.11 A Director shall at all times exercise his power for a proper purpose and in good faith in the best interest of the Company and shall act with reasonable care, skill and diligence in the discharge of his duty and shall not make use of any information acquired by virtue of his position to gain directly or indirectly, a benefit for himself or any other person or cause detriment to the Company.
3.6.12 The Board has delegated certain responsibilities to Board Committees which operate in accordance with its Terms of Reference approved by the Board and delegated the day-to-day management of the Group’s business to the Managing Director and Management.
3.6.13 The principal responsibilities of the Board includes the following:
  • Review, adopt and monitor the overall corporate strategy, direction and budget of the Group; and ensure that the strategic plans supports long term value creation;
  • together with the Management, take responsibility on sustainability governance including setting the Group’s sustainability strategies, priorities and targets;
  • promoting, together with senior management, a sound corporate governance culture within the Group which reinforces ethical, prudent and professional behavior;
  • oversee and evaluate the conduct of business of the Group which includes supervision and assessment of Management’s performance to determine whether the business is properly being managed;
  • understand the principal risks of the Group, set the risk appetite within which Management is expected to operate and ensure there is an appropriate risk management framework to identify, analyse, manage and monitor these risks;
  • review the adequacy and integrity of the financial and non-financial reporting of the Group.
  • approve the appointment, succession plans and remuneration of the Directors.
  • ensure the key senior management has the necessary skills and experience, and there are measures in place to provide for the orderly succession of key senior management;
  • develop and implement investor relation and shareholders communication policy; and
  • ensure there is a sound framework for internal control and risk management system which enable risks to be assessed and managed.
  • Approve the appointment of external auditors.
3.6.14 The Board reserves full decision-making powers on the following matters:
  • material acquisition and disposition of assets not in the Group’s ordinary course of business;
  • approval of corporate plans and new ventures of the Group
  • approval of changes of major activities of the Group
  • approval of board policy and procedures
  • declaration of dividends
  • approval of financial statements and quarterly results
  • appointment of Directors and Board Committees members
  • any matters as may be required by the applicable laws and regulations

 

3.6.2 Role of Chairman

3.6.21 The roles of the Chairman and the Managing Director are distinct and separate to ensure there is a balance of power and authority. The Chairman is responsible for the leadership, effectiveness conduct and governance of the Board.
3.6.22 The responsibilities of Chairman includes, amongst others:
  • provides leadership for the Board and ensure the Board perform its responsibilities effectively;
  • ensures the Board play constructive part in determination of the Group’s strategy direction and the decision fairly reflect the Board’s consensus;
  • ensures effective functioning and smooth conduct of Board meetings;
  • leading the Board in establishing and monitoring good corporate governance practices in the Company;
  • promotes constructive and respectful relations between Directors, and between the Board and Management;
  • encourages active participation of Board members and allowing dissenting views to be freely expressed;
  • plans and ensures the agenda of Board meetings contain all relevant issues, together with the Managing Director and Company Secretaries;
  • chairing meetings of Members and acts as representative of the Board to shareholders, together with the Managing Director;
  • Ensure General Meetings support meaningful engagement between Board, senior managements and shareholders;
  • promotes effective communication with stakeholders and that their views are communicated to the Board.

 

3.6.3 Role of Managing Director

3.6.31 The Managing Director has the overall responsibility for the day-to-day management of the Group’s business and implementation of the Board’s policies and decisions. The Managing Director ensures due execution of strategic goals, effective operation within the Group and to explain, clarify and inform the Board on matters pertaining to the Group. The Managing Director is accountable to the Board for the achievement of the Group’s vision and mission.
3.6.32 The responsibilities of Managing Director includes, amongst others:
  • develop corporate strategies of the Group and to implement such corporate strategies as approved by the Board;
  • ensure the Group’s vision and mission, profitability and return on capital are achieved;
  • effectively oversee the human resources and succession planning of the Group;
  • provide direction for the implementation of business plans in a cost effective manner;
  • ensure business operations are conducted in compliance with the relevant laws and regulations;
  • exploring business opportunities which are of potential benefit to the Group;
  • ensure financial management is performed at highest level of integrity and that the business affairs are conducted in an ethical manner;
  • acting as the primary spokesperson for the Group and communicate with investors and stakeholders in an orderly manner and shall be mindful of the regulatory requirements governing the release of material and price sensitive information.

 

3.6.4 Role of Independent Directors

3.6.41 The role of Independent Directors includes, amongst others:
  • provide independent judgement, experience and objectivity without subordinated to operational considerations;
  • ensure the interests of all shareholders are taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.
  • constructively challenge and contribute to the development of the business strategies and direction of the Group;
  • ensure there are adequate systems, controls and check and balance to safeguard the interests of the Group and all stakeholders.

 

3.7 Board Meetings

3.7.1 Frequency of Meetings and Attendance

3.7.11 The Board shall convene at least five (5) meetings in each financial year with additional meetings to be convened as and when necessary.
3.7.12 Each Director is required to attend at least 50% of the total Board meetings held in each financial year. As provided in the Main Market Listing Requirement, a Director should vacate office should he be absent from more than 50% of the total Board Meetings held during the financial year. Attendance of each Director in the meetings will be disclosed in the Annual Report.
3.7.13 An annual meeting calendar is prepared and circulated in advance of each new financial year. The meeting calendar provides the scheduled date for meetings of Board and Board Committees, Annual General Meeting and closed period for dealing in the Company securities by Directors.
3.7.14 Where necessary, senior management may be invited to attend meetings for particular items within their responsibility. The Board may also invite external consultants as and when the need arises.

3.7.15Board meetings could be conducted physically and/or via electronic means where the Directors may receive agenda and meeting papers online or in digital format and participate in meetings via audio or video conferencing.

3.7.16 The Board may exercise control on matters that require its approval by way of circular resolutions.

 

3.7.2 Meeting Agenda and Board Papers

3.7.21 The meeting agenda and detailed Board papers will be distributed to all Directors 7 days prior to the meetings.
3.7.22 Full Board minutes of each Board meeting are kept by the Company Secretary and are available for inspection by the Directors.

 

3.8 Board Committees

3.8.1 The Board may establish Committees as is considered appropriate to assist in carrying out its duties and responsibilities. The Board delegates certain responsibilities to the Committees which operate within the defined Terms of Reference in the execution of its duties and responsibilities.
3.8.2 Audit Committee
Audit Committee assists in providing oversight on the Group’s financial reporting, disclosure, regulatory compliance and monitoring of internal control processes and risk management within the Group. The Audit Committee reviews the quarterly financial results, unaudited and audited financial statements, related party transactions, conflict of interest situations and the independence of internal and external auditors.
3.8.3 Nomination Committee.
The Nomination Committee oversees matters relating to the appointment of new Director, re-election and re-appointment of Directors. The Nomination Committee is also responsible to review the Board composition and effectiveness of the Board, its Committees, individual Director, individual Committee members as well as succession planning of key senior management.
3.8.4 Remuneration Committee
The Remuneration Committee review and implement policy and procedures governing the remuneration for Directors and Key Senior Management.
3.8.5 Risk Management Committee
The Risk Management Committee is responsible to identify, recommend and review the principles, framework and process for managing risk within the Group.

 

3.9 Directors’ Induction Plan, Training and Continuing Education

3.9.1 Newly appointed Director has to complete Mandatory Accredited Programme in compliance with the MMLR.
3.9.2 The Company Secretary will provide to the new Director the Director Induction Manual. This Manual will include the following documents :-
  • Board Charter
  • Meeting Timetable
  • Minutes of the last Board Meeting
  • Latest Annual Report
  • Minutes of last Board Committee Meeting, if the new Director is also a member of the Board Committee, where relevant.
3.9.3 A visitation to plants and briefing by Managing Director/senior management enable the new Director to gain an understanding of the Group’s corporate strategies, businesses operations as well as the structure and management of the Group.     
3.9.4 In addition to the Mandatory Accredited Programme required by the MMLR, Directors are required to attend training and seminars to keep abreast with current development in relation to the changing business risks and regulatory updates for business acumen, professionalism and knowledge enhancement.
3.9.5 The Board through the Nomination Committee, assess the training needs of the Directors from time to time. Training attended by the Directors during the year will be disclosed in the Annual Report.

 

3.10 Board and Board Committees Evaluation

3.10.1 The Board with the assistance from the Nomination Committee, shall undertake an annual assessment to review the performance and effectiveness of the Board, Board Committees, individual Directors, individual Committee members.
3.10.2 The Board assess the independence of the Independent Directors annually by taking into consideration of the Independent Director’s ability to exercise independent and objective judgement, fit and proper, contribution and participation in the Board deliberations.

 

3.11 Directors Remuneration

3.11.1 The Remuneration Committee is responsible for reviewing the Remuneration Policy and making recommendation on Directors’ remuneration to the Board for consideration.
3.11.2 The remuneration for Non-Executive Directors consist of fees and meeting allowances. Executive Directors are entitled to fees, meeting allowances, salary, bonus, incentive and other benefits. All Directors are also entitled to reimbursement of travelling or other expenses incurred in the course of their duties as Director.
3.11.3 The review of remuneration may be undertaken annually taken into account the Directors’ fiduciary duties, the Group’s business performance and industry trends.
3.11.4 Directors’ fees and benefits are subject to approval by shareholders at Annual General Meeting. Director who is also a shareholder and his/her person connected with shall be abstained from voting on his/her remunerations at the Annual General Meeting.

ACCOUNTABILITY AND AUDIT

4.1 Financial Reporting

4.1.1 In presenting the annual financial statements and quarterly announcements to the shareholders, including other price sensitive information and relevant reports submitted to regulators, the Board aims to present a balanced and understandable assessment of the Group’s position and prospects.
4.1.2 The Directors ensure that the financial statements are prepared in accordance with the approved accounting standards, so as to give a true and fair view of the state of affairs of the Group.
4.1.3 The Audit Committee assisted the Board to oversee the Group’s financial reporting processes.

 

4.2 External Auditors

4.2.1 The Board maintains a formal relationship with the External Auditors and seeks their professional advice to ensure the accounting standards are complied with.
4.2.2 The Audit Committee keeps under review the scope and results of the audit and its cost effectiveness, suitability, independence and objectivity of the External Auditors.
4.2.3 The Audit Committee meets with the External Auditors without the presence of executive board members at least twice a year.
4.2.4 The Board understand the independence of External Auditors can be impaired by the provision of non-audit services to the Company. Prior to the provision of any non-audit services by the External Auditors, the Audit Committee will review and approve the acceptance of such engagements.
4.2.5 To provide support for an assessment on independence, a written assurance is obtained from the External Auditors confirming they are, and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

 

4.3 Internal Controls and Risk Management

4.3.1 The Board has the overall responsibility of maintaining a sound internal control and risk management system for the Group.
4.3.2 The Company through the internal audit function, review the adequacy and effectiveness of the risk management and internal controls system.

INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATION

5.1 Communication with Shareholders and Investors

5.1.1 The Board shall maintain an effective communication with its shareholders, investors, analysts and the public.

5.1.2 The Board ensures timely release of announcement to the Bursa Malaysia Securities Berhad, which includes quarterly financial results, annual reports and circulars to provide shareholders with an overview of the Company performance and operation and any other material information that may affect investors’ decision making.

5.1.3 Other ways of communication to shareholders and investors, are as follows:
  • regular dialogues with financial analysts;
  • press interview, where necessary, to provide the media an opportunity to receive an update from the Board on the Company’s performance and to address any queries or areas of interest of the media;
  • the Company’s website provides easy access to corporate information pertaining to the Company and its activities and is continuously updated.
5.1.4 Whilst the Directors endeavor to provide information to its shareholders, research analysts and the press, the Directors are mindful of the legal requirement governing the release of material and price-sensitive information.

 

5.2 General Meetings

5.2.1 The Company regards the General Meetings as an important event for dialogue with shareholders where the Directors are present in person to engage directly with the shareholders.

5.2.2 The Board ensures the General Meetings are conducted in an efficient manner and the Chairman encourages shareholders’ participation at the said meetings.
5.2.3 The following practices will be implemented to enhance the effectiveness of the Meetings of Members :
  • ensure that each special business in the notice of meeting to be accompanied by a statement regarding the effects of the proposed resolution.
  • conduct a business presentation with question and answer session, where appropriate and if required.
  • the engagement with shareholders should be interactive and include robust discussion on among others the Group’s financial and non-financial performance as well as the Group’s long-term strategies.
  • shareholders should also be provided with sufficient opportunity to pose questions during the meeting and all questions should receive a meaningful response.
  • ensure minutes of the General Meetings are circulated to shareholders or uploaded onto the Company’s website no later than 30 business days after the General Meetings.

 

COMPANY SECRETARY

6.1 The Company Secretary plays an important advisory role and is a source of information and advice to the Board and Committees on issues relating to corporate governance best practices, corporate disclosure obligations, Board policies and procedures and compliance with statutory and regulatory requirements.

6.2 The key responsibilities of the Company Secretary include:
  • advises the Board on corporate governance issues;
  • advises the Board on disclosure and compliance with securities regulations and listing requirements;
  • attends Board, Committees and general meetings, and ensure the proper recording of minutes;
  • ensures proper upkeep of statutory registers and records;
  • facilitates the induction training of new Directors.

 

6.3 All Directors shall have full access to the advice and services of the Company Secretary.

ACCESS TO INFORMATION AND INDEPENDENT ADVICE

7.1 The Directors have the right to access to all information pertaining to the Group’s business affairs in the discharge of their duties.

7.2 The Board as well as any Director may seek independent professional advice relating to the affairs of the Group or his/her responsibilities as a Director, at the Company’s expense. If a Director considers such advice is necessary for the benefit of the Company, such Director shall first discuss with the Chairman. The Director must also ensure that it is practicable and the cost is reasonable.

DIRECTORSHIP AND DISCLOSURE OF INTEREST

8.1 Directors should devote sufficient time to carry out their responsibilities. A Director shall not hold more than five (5) directorships in listed corporations, as prescribed by the MMLR.

8.2 Directors should notify the Chairman or the Company Secretary their directorship in other listed and non-listed companies and any changes thereof.

8.3 The Companies Act 2016 provided that a Director or person connected with a Director (such as family members, or a body corporate associated with the Director or trustee), who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company and or its subsidiaries shall, as soon as practical after the relevant facts have come to the knowledge of the Director, declare the nature of his interest to the Board.

8.4 The Director concerned shall be counted only to make the quorum at the meeting of the Board but shall not participate in any discussion and shall not vote on the contract or proposed contract.

DEALING IN SECURITIES

9.1 Directors are required to comply with the procedures and requirements of the MMLR when dealing in the securities of the Company.

9.2 A Director is required to notify the Company Secretary his shareholding in the Company and any changes thereof, whether direct or indirect.

ETHICS AND INTEGRITY

10.1 All Board members are expected to act in a professional manner and upholding the core values of integrity with due regard to their fiduciary duty and responsibilities at all times in their actions.

10.2 The Company has established the following Code/Policy to be observed by the Directors and employees of the Group:
  • Code of Ethics and Conduct

The Code of Ethics and Conduct provides guidance for proper standards of ethical conduct and sound and prudent business practices for Directors and employees based on principles of integrity, responsibility, trust, discipline and diligence.

  • Stay Honest, Be Corrupt Free

The Anti-Bribery and Anti-Corruption Policy sets out the principles of Ajiya in upholding its position on bribery and corruption practices in relation to its business. It also provides guidance to prevent and address improper solicitation, bribery and corruption activities.

  • Whistleblower Policy

The Whistleblower Policy govern the reporting and handling of suspected and/or known misconducts, wrongdoing, corruption and instances of fraud and abuse involving the resources of the Group.

 

10.3 The Code of Ethics and Conduct, Anti-Bribery and Anti-Corruption Policy as well as Whistleblower Policy are available for reference on the Company’s website at www.ajiya.com.

REVIEW OF THE BOARD CHARTER

11.1 The Board Charter is approved and adopted by the Board.

11.2 The Board Charter will be periodically reviewed and updated in accordance with the needs of the Company and any new regulations issued by the relevant authorities.

11.3 The Board Charter is made available for reference on the Company’s website at www.ajiya.com.