Board Charter

The Board of Directors of Ajiya Berhad (“Ajiya” or the “Company”) recognizes the importance of corporate governance and is committed to apply the principles and practices in the Malaysian Code of Corporate Governance (“MCCG” or the “Code”).

This Board Charter incorporates the Code, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”), the Companies Act 2016 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.

The objectives of this Board Charter are to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislation and regulations affecting their conduct and that the principles and practices of good Corporate Governance are applied in all their dealing on behalf of the Company.

This Charter is a source of reference and primary induction document to assist the Board in the performance of their fiduciary duties as Directors of the Company.

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 The Board shall, from time to time, review its size and composition to ensure an appropriate balance of skills, experience and diversity.
3.2.14 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).
 
3.2.2 Independence
3.2.21 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. 
3.2.22 In accordance with the Malaysian Code on Corporate Governance 2017, the tenure of an Independent Director shall not exceed a cumulative term of nine years. Upon completion of nine years, the Independent Director may continue to serve on the Board subject to the Director’s re-designation as Non–Independent Director. The Board may, subject to the assessment of the Nominating Committee, recommend for such Director to remain as Independent Director subject to shareholders’ approval.
3.2.23 If the Board continues to retain the Independent Director after the twelfth year, the Board should seek annual shareholders’ approval through a two-tier voting process. 
 
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 is of the view that, while it is important to promote gender diversity on the Board, the selection criteria based on merit and contribution that the candidate will bring to the Board remain our priority. Hence, the Board does not set any specific target for female directors on the Board but the Board endeavours to promote more female directors on the Board. 
3.2.33 To pursue the objective of gender diversity, the Nomination Committee is to ensure that all Board recruitment and succession planning process are conducted in a manner that promote female diversity. 
 
3.3 Re-election
3.3.1 Pursuant to the Company’s Constitution, all Directors shall retire from office once at least in each three (3) years but shall 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 at every Annual General Meeting at least one third of the Directors shall retire and 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 Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
3.4.4 The Board is guided by the approved Nomination Policy for the recruitment of new Directors.
 
3.5 Duties and Responsibilities
3.5.1 Board Roles
3.5.11 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.
3.5.12 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.
3.5.13 The principal responsibilities of the Board includes the following:
  • review and adopt the overall strategic direction of the Group; and ensure that the strategic plans supports long term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
  • 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.
  • ensure the senior management has the necessary skills and experience, and there are measures in place to provide for the orderly succession of the Board and 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.
3.5.14 The Board reserves full decision-making powers on the following matters:-
  • material acquisition and disposition of assets not in the ordinary course of business;
  • approval of corporate plans and new ventures;
  • approval of changes of major activities of the Group
  • approval of board policy and procedures
  • declaration of dividends
  • appointment of Directors and Board Committees members
3.5.2 Role of Chairman
3.5.21 The Board ensures that its Chairman is a non-executive member of the Board.
3.5.22 The roles of the Non-Executive 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.
3.5.23 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.
  • promotes effective communication with stakeholders and that their views are communicated to the Board.
3.5.3 Role of Managing Director
3.5.31 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.
3.5.32 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.
3.5.4 Role of Independent Directors
3.5.41 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.
3.6 Board Meetings
3.6.1 Frequency of Meetings and Attendance
3.6.11 The Board shall convene at least five (5) meetings in each financial year with additional meetings to be convened as and when necessary.
3.6.12 Each Director is required to attend at least 50% of the Board meetings held in each financial year. Attendance of each Director in the meetings will be disclosed in the Annual Report.
3.6.13 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.
3.6.14 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.
 
3.6.2 Meeting Agenda and Board Papers
3.6.21 The meeting agenda and detailed Board papers will be distributed to all Directors 7 days prior to the meetings.
3.6.22 Full Board minutes of each Board meeting are kept by the Company Secretary and are available for inspection by the Directors.
 
3.7 Board Committees
3.7.1 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.
3.7.2 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 and the independence of internal and external auditors.
3.7.3 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, individual Director and individual Committee members.
3.7.4 Remuneration Committee
          The Remuneration Committee review and implement policy and procedures governing the remuneration for Directors and key senior management. 
3.7.5 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.
 
3.8 Directors’ Training and Continuing Education
3.8.1 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. 
3.8.2 The Board will 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.
 
3.9 Induction Plan
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 will be arranged. This include factory visits and briefing by Managing Director and senior management to 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.      

 
3.10 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 and 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 Remuneration packages are commensurate with individual performance which take into account the level of responsibilities, skill and experience as well as the Group’s business results. 
3.11.2 Directors’ fees and benefits are subject to approval by shareholders at Annual General Meeting.
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. 
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 Meetings of Members
5.2.1 The Company regards the Meetings of Members 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 Meetings of Members are conducted in an efficient manner and the Chairman encourages shareholders’ participation at the said meetings.
5.2.3 The following practices are 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.
5.2.4 The Annual Reports and minutes of Meetings of Members are available on the website of the Company.
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.
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.
8.1 Directors are required to comply with the procedures and requirements of the MMLR when dealing in the securities of the Company. 
 
8.2 A Director is required to notify the Company Secretary in connection with the disclosure of his shareholding in the Company and its related corporation, whether direct or indirect.
 
8.3 Every Director or person connected with a Director such as the family members, or a body corporate associated with the Director or trustee (as defined under S197(1) of the Companies Act 2016), 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.   
 
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 while the contract is being considered at the Board meeting and shall not vote on the contract or proposed contract.
9.1 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.
 
9.2 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.
 
The Code of Ethics and Conduct and the Anti-Bribery and Anti-Corruption Policy are available for reference on the Company’s website at www.ajiya.com.
10.1 The Board Charter is 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 on the Company’s website at www.ajiya.com.