Board Charter

The enhancement of corporate governance standards is vital towards achieving the objectives of transparency, accountability and effective performance for Ajiya Berhad ("Ajiya" or the "Company") and its subsidiaries (the "Group").

This Charter shall constitute and form an integral part of each Director's terms of appointment.

This Charter does not overrule or pre-empt the statutory requirements of Directors enshrined in the Companies Act 1965, the income tax Act 1967 and other relevant statutes, including the conduct of the Board as stipulated in the Articles of Association of the Company.

This Charter provide guidance for Directors regarding the role of the Board and its Committees in carrying out their stewardship role as well as upholding the core values of integrity with due regard to their fiduciary duties and responsibilities.

This Charter is a source reference and primary induction program to provide insights to prospective Board members and senior management.

3.1 Composition and Board Balance

3.1.1 The Board recognises and embraces the benefits of having a diverse Board, and sees increasing diversity at Board level as an essential element in maintaining a competetive advantage.
3.1.2 The Board consists of qualified individuals with diverse skill, experiences, knowledge and perspectives. The composition and size of the Board issuch that it facilitates the decision making of the Company.
3.1.3 Whilst the Board endeavours to promote gender diversity towards having more female directors on the Board, the Board is of the view that the normal selection criteria based on an effective blend of competencies, skills, expertise, experience and knowledge to strengthen the Board remain the priority.
3.1.4 The Company’s Articles of Association allow a minimum of three (3) and a maximum of eleven (11) Directors. The Board shall, from time to time, review its size and composition to ensure its appropriateness.
3.1.5 The Board recognises the importance of independence and objectivity in the decision making process. At least one-third of the Board shall consist of Independent Non- Executive Directors or a minimum of two (2), whichever is the higher. 
3.1.6 Chairman of the Board must be a non-executive member and the Nomination Committee must be chaired by Senior Independent Director.
3.1.7 The Independent Directors provide independent judgement, experience and objectivity without subordinated to operational considerations.
3.1.8 The Independent Directors help to ensure that the interests of all shareholders, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartialconsideration by the Board. 
3.1.9 Profiles of Board members are included in the Annual Report of the Company.

 

3.2 Role of the Board

3.2.1 The Board is charged with leading and managing the Company in an effective and responsible manner. Each Director has a legal duty to act in the best interest of the Company. The Directors, collectively and individually, are aware of their responsibilities to shareholders and stakeholders for the manner in which the affairs of the Company are managed.
3.2.2 The Board understands that the responsibility for good Corporate Governance rests with them and therefore strives to follow the principles and best practices stated in the MCCG. The Board includes a narrative statement in its Company's Annual Report on the extent of compliance with the principles and best practices in Corporate Governance pursuant to Paragraph 15.26 of the LR.
3.2.3 The Company complies with the various guidelines issued by Bursa Securities and the SC relating to disclosure and internal audit functions. The established internal audit functions shall be independent of the activities it audits and identify a head of internal audit who reports directly to the Audit Committee.
3.2.4 The Board has delegated certain responsibilities to committees which operate in accordance with the Charter and policies approved by the Board and delegated the day to day management of the business of the Group to Group Managing Director and senior management.
3.2.5 Directors should notify the Chairman or the Company Secretary before he/she accept any new directorship in other public listed company. The directorships held by any Board member in public listed companies at any one time shall not exceed five (5).
3.2.6 The principal responsibilities of the Board are:
  • to review the strategic direction of the Company and adopt business plan proposed by the management and to monitor the implementation of the strategic plan;
  • to oversee the conduct of the Company's businesses;
  • to ensure that the Company's strategies promote sustainability;
  • to identify principal business risks and ensure implementation of appropriate systems to manage these risks;
  • to consider and implement succession planning for senior management;
  • to develop and implement an investors relations and shareholder communication policy for the Company;
  • to review the adequacy and the integrity of the Group's management information and internal control systems;
3.2.7 The Board reserves full decision-making powers on the following matters:
  • material acquisitions and disposition of assets not in the ordinary course of business
  • approval of new ventures;
  • approval of corporate plans and programmes; and
  • risk management policies.

3.3 Chairman and Group MD

3.3.1 The Board ensures that its Chairman is a non-executive member of the Board.
3.3.2 The role of the Non-Executive Chairman and the Group MD 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, while the Group MD has overall responsibility for the day-to-day management of the business and implementation of the Board's policies and decisions. The Group MD is responsible to ensure due execution of strategic goals, effective operation within the Company and to explain, clarify and inform the Board on matters pertaining to the Company.
3.3.3 The responsibilities of the Chairman, amongst others, are as follows:-
  • to lead the Board and ensure its effectiveness of all aspect of its role;
  • to ensure efficient organization and conduct of Board meetings;
  • to facilitate the effective contribution of all Directors at Board meetings;
  • to promote constructive and respectful relations between Directors;
  • representing the Board to shareholders and chairing general meeting of shareholders.
3.3.4 The responsibilities of the Group MD, amongst others, are as follows:-
  • to develop and implement corporate strategies for the Group;
  • to ensure the Group's vision and mission, profitability and return on capital are achieved;
  • to effectively oversee the human resources of the Group;
  • to ensure the efficiency and effectiveness of the operation for the Group;
  • to assess business opportunities which are of potential benefit to the Group; and
  • to bring material and other relevant matters to the attention of the Board in an accurate and timely manner.

3.4 Appointments && Induction Plan

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 making these recommendations, the Nomination Committee will consider the required mix of skills, experience and diversity, including gender.
3.4.2 New Directors are expected to have such expertise so as to qualify them to make a positive contribution to the Board performance of its duties and to devote sufficient time and attention to the affairs of the Company.
3.4.3 The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
3.4.4 Upon appointment, the new Director will be provided with a clear insight about the Group, amongst other, the following:
  • an understanding about the Group's vision and mission
  • the business environment and development in the market in which the Group operates
  • Board minutes, code of conduct and policies on areas of board responsibilities.
  • visits to the Company's plant.

3.5 Directors' Training

In addition to the Mandatory Accredited Programme (MAP) as required by the Bursa Securities, Directors are required to attend relevant training courses/seminars to keep them abreast with current development on technical matters for knowledge and skills enhancement. The Board will assess the training needs of the Directors and ensure its members have access to appropriate continuing education programmers. Trainings attended by the Directors during the year will be disclosed in the Annual Report.

3.6 Tenure of Directors

3.6.1 Pursuant to the Company's Articles of Association, every newly appointed Director is subjected to re-election at the immediate Annual General Meeting. Further, one third or number nearest to one third of the Board shall retire from office and be eligible for re-election at every Annual General Meeting, and all the Directors shall retire from office once at least in each three (3) years butshall be eligible for re-election.
3.6.2 There is a maximum age of 70 years for Directors. However, a Director who has attained the age of 70 years may be re-appointed as a Director until the next Annual General Meeting provided that the resolution must be passed by a majority of not less than three quarters (3/4) of such members of the Company present and voting who, being entitled to do so, vote in person or by proxy at the General Meeting of the Company.
3.6.3 The tenure of an Independent Director shall not exceed a cumulative term of 9 years. The Board may, in exceptional cases and subject to the assessment of the Nominating Committee on annual basis, recommend for such Director to remain as Independent Director subject to shareholders' approval.

 

3.7 Directors Remuneration

3.7.1 The Board as a whole will determine the level of remuneration paid to its Directors.
3.7.2 The performance of Directors is measured by the Directors' contribution and commitment to the Company.
3.7.3 The Executive Directors' remuneration will depend on the performance of the Group which are reviewed annually by the Remuneration Committee.
3.7.4 Directors' fees will be endorsed by the Board and subject to approval from shareholders at Annual General Meeting.

 

3.8 Succession Planning

3.8.1 The Board as a whole shall be responsible for selecting its own members and in recommending them for election or re-election by the Company's Shareholders.
3.8.2 The Board has delegated the screening process to the Nomination Committee.
3.8.3 The Group Managing Director shall be responsible for setting the direction and monitoring the implementation of management and executive succession planning.

 

3.9 Access To Information and Independent Advice

3.9.1 The Board should have access to all information pertaining to the Company. Management should supply accurate and complete information to the Board in a timely manner to enable the Board to discharge its duties effectively.
3.9.2 The Board as well as any Director may seek independent professional advice relating to the affairs of the Group or his 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.
3.9.3 The Board members have unlimited access to the professional advice and services of the Company Secretary.

 

3.10 Board Meetings

3.10.1 Meetings will be conducted at least on a quarterly basis. Notice of meeting will be circulated to all Directors prior the meetings.
3.10.2 Board members are required to attend the Board meetings. The attendance of each Director in the meetings held in a financial year is required to be disclosed in the Annual Report.
3.10.13 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.
3.10.4 A full agenda and comprehensive Board papers will be distributed to all Directors in advance of each Board meeting. The Board shall record its deliberations, in terms of the issues discussed and the conclusions thereof in discharging its duties and responsibilities.
3.10.5 Full Board minutes of each Board meeting are kept by the Company Secretary and are available for inspection by any Director during office hours.
4.1 The Board has established the following Board Committees to assist in the execution of its responsibilities with specific terms of reference.

 

4.2 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, internal and external audit reports as well as related party transactions.

 

4.3 Nomination Committee
The Nomination Committee oversees matters relating to the nomination of new Directors, annually reviews the required mix of skills, experience and other requisite qualities of Directors as well as the assessment of the effectiveness of the Board as a whole, its Committees and the contribution of each individual Director. The Nomination Committee must be chaired by Senior Independent Director.

 

4.4 Remuneration Committee
The Remuneration Committee is primarily responsible for examining and making recommendation to the Board the remuneration packages for Directors.

5.1 Transparency

5.1.1 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.
5.1.2 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.

 

5.2 External Auditors

5.2.1 The Audit Committee keeps under review the scope and results of the audit and its cost effectiveness and the suitability, independence and objectivity of the External Auditors.
5.2.2 The Board understands the independence of External Auditors can be impaired by the provision of non-audit services to the Company. The Company ensures that the Company Auditors do not supply a substantial volume of non-audit services to the Company.
5.2.3 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.
5.2.4 Appointment of the Company Auditors is subject to approval of shareholders at General Meetings. The Company Auditors have to retire during the AGM every year and be re-appointed by shareholders for the ensuing year.

 

5.3 Internal Controls and Risk Management

5.3.1 The Board has empowered the Audit Committee with the duty of reviewing and monitoring the effectiveness of the Group's system of internal control and risk management.
5.3.2 The Company has a well-resourced internal audit function, which reviews all aspects of the Company's activities and its internal controls. Comprehensive audits of the practices, procedures, expenditure and internal controls of all business and support units and subsidiaries are undertaken on a regular basis.
5.3.3 The Group has an ongoing process where regular meetings between the key management staff are conducted for identifying, evaluating and managing the significant risks affecting the environment of its business objective. This process has been in place throughout the financial year. The process is reviewed by the Board and is in accordance with the guidelines 'Statement of Internal Control: Guidance for Directors of the Public Listed Companies'.
6.1 The Company regards the General Meetings as an important event in the corporate calendar of which all Directors and key management executives should attend.
6.2 The Company regards the General Meetings as the principal forum for dialogue with shareholders which provides an important opportunity for effective communication with the Company's shareholders.
6.3 The Chairman encourages participation by the shareholders at the General Meetings.
7.1 The Board shall place great importance in ensuring the high standards of transparency and accountability in its communication to shareholders, as well as to potential investor, analysts and the public. The shareholders shall be informed of all material matters affecting the Group.
7.2 The Annual General Meeting and Extraordinary General Meeting serves as a main mechanism in shareholders communication. The Board encourages shareholders to participate in the question and answer session at the general meetings.
7.3 Other ways of communication to shareholders and investors, are as follows:-
a) timely announcement and disclosures made to the Bursa Malaysia Securities Berhad, which includes quarterly financial results, to provide shareholders with an overview of the Company performance and operation and any other material information that may affect investors' decision making;
b) regular dialogues with financial analysts;
c) press interview which is normally held after each AGM 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;
d) the Company's website provides easy access to corporate information pertaining to the Company and its activities and is continuously updated.
8.1 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 compliance with laws, rules, procedures and regulations and other governance matters affecting the Company.
8.2 The key responsibilities of the Company Secretary include:
a. advise the Board on governance issues;
b. ensure compliance of listing and related statutory obligations;
c. attend Board, Committees and general meetings, and ensure the proper recording of minutes;
d. ensure proper upkeep of statutory registers and records;
e. assist in the preparation for and conduct of meetings.

The Code of Ethics and Conduct is to be observed by the Directors and employees of the Group. The Board will review the Code regularly to ensure it continues to remain relevant and appropriate. The Code is available for reference in the Company's website at www.ajiya.com

10.1 The Board Charter are approved and adopted by the Board.
10.2 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.
10.3 The Board Charter is made available for reference in the Company's website at www.ajiya.com.