Board Charter

1. Purpose of the Board Charter

This Board Charter sets out the principles for the operation of the Board of Directors (“Board”) of PMB Technology Berhad (“PMBT” or “the Company”) and its subsidiaries (“the Group”) and describes the functions of the Board and those functions delegated to Management of the Company.

The Board has primary responsibility to shareholders for the welfare of the Company. The Board is responsible for guiding and monitoring the business and the affairs of the Company. The Company recognises the importantce of the Board in providing a sound base for good corporate governance in the operations of the Company.

This Board Charter incorporates the Principles and Practices of the Malaysian Code on Corporate Governance (“MCCG”), as considered appropriate, Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”) on corporate governance, certain aspects of the Company’s Constitution and relevant portions of the Companies Act 2016 insofar as the duties and responsibilities of Directors are concerned. This Board Charter is established to promote high standards of corporate governance and is designed to provide guidance and clarity for Directors and management with regard to the role of the Board and its committees. This Board Charter does not overrule or pre-empt the statutory requirements and other relevant statutes. This Board Charter shall form an integral part of each Director’s duties and responsibilities.

2. Composition of the Board

  1. The Board shall be of a size and composition with the benefit of diversity in perspectives and skills to understand properly and deal with the current and emerging issues of the business of the Company. Thus, the Board acknowledges the importance to promote gender diversity and does not set a restriction on having female director(s) on the Board.
  2. Pursuant to paragraph 15.02 of MMLR, the Board shall comprise at least two (2) Directors or one-third (1/3), whichever is higher, of the Board of Directors who are Independent Directors. The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
  3. In the event of any vacancy in the Board, resulting in non-compliance with Paragraph b above, the Company must fill the vacancy within three (3) months.
  4. The appointment of a new member to the Board is only made after consultation with the Nomination Committee. Further, in indentifying candidates for appointment of directors, the Board does not solely rely on recommendations from existing Board members, management or major shareholders. The Board may utilises variety of independent sources to identify suitably qualified candidates.
  5. The Board recognises the importance of having a clearly accepted division of power and responsibilities at the head of the Company to ensure a balance of power and authority. The position of Chairman and Chief Executive Officer (“CEO”) are separated and clearly defined.
  6. A Director shall inform the Board's Chairman before he/she accepts any new directorships. Each Board member must not hold directorships at more than five (5) listed issuers.
  7. The Board shall obtain time commitment from newly appointed Directors at the time of appointment.
  8. The Board shall appoint a Senior Independent Director who serves as the point of contact between the Independent Directors and the Chairman on sensitive issues, ensure all Independent Directors have an opportunity to provide input on the agenda and ensure the Independent Directors can perform their duties responsibly and with sufficient time for discussion of all agenda items.
  9. The tenure of an independent Director shall not exceed a cumulative term of nine (9) years. Upon completion of the nine (9)-year period, an Independent Director may continue to serve on the Board subject to the Director's re-designation as Non-Independent Director. The Board may, in exceptional cases and subject to the assessment of the Nomination Committee on an annual basis, recommend for an independent Director who has served a consecutive or cumulative term of nine (9) years to remain as an independent Director subject to valid justification and Shareholders' approval.

 

3. Appointments

  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. It is of essence of the Board to ensure high levels of professional skills and appropriate personal qualities are pre-requisites for such nominee.
  2. Without limiting the generality of the foregoing, the qualifications for Board membership are:
    (a) the ability to make informed business decisions and recommendationsl;
    (b) an entrepreneurial talent for contributing to the creation of shareholders' value;
    (c) sufficient available time to be able to fulfil his or her responsibilities as a member of the Board and any of the Committees to which he or she may be appointed; and
    (d) total commitment to furthering the interests of shareholders and the achievement of the Company’s goals
  3. The Baord shall undertake an assessment of its Independent Directors annually.
  4. The tenure of the Executive Directors are tied to their executive office.

4. Role of the Board

  1. The Board shall assume ultimate accountability and responsibility for the performance and affairs of the Company and shall in so doing effectively represent and promote the legitimate interests of the Company and its shareholders. The Board, at all times, shall retain full and effective control over the Company and shall direct and supervise the business and affairs of the Company. Each Director has a legal duty to act in good faith, to use reasonable care, skill and diligence and to act in the best interest of the Company.
  2. The Board shall ensure that Management has in place appropriate processes for risk assessment, management and internal controls and monitoring performance against agreed benchmarks. The Board shall work with Senior Management as collaborators in advancing the interests of the Company.
  3. The Board has delegated certain responsibilities to committees which operate in accordance with Charter approved by the Board and delegated the day to day management of the business of the Group to Management, executive officer and Group CEO subject to an agreed authority limit.
  4. The principal responsibilities of the Board including those adopted from the MCCG are among others:
    • Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;
    • Ensuring that Senior Management has the necessary skills and experience, and there are measures in place to provide for the orderly succession of Board and Senior Management;
    • Ensuring that the company has in place procedures to enable effective communication with stakeholders;
    • Ensuring that there is a sound framework for internal controls and risk management;
    • Ensure that the strategic plan of the company supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
    • Establishing and reviewing the policies and procedures on whistleblowing;
    • Monitoring and reviewing management processes aimed at ensuring the integrity of financial and other reporting;
    • Ensuring that the Company's financial statements are true and fair and conform with the accounting standards;
    • Monitoring and reviewing policies and procedures relating to occupational health and safety and compliance with relevant laws and regulations; and
    • Ensuring that the Company adheres to high standards of ethics and corporate behaviour.
  5. In overseeing the conduct of the Group’s business, the Board shall ensure that an appropriate financial planning, operating and reporting framework as well as an embedded risk management framework is established. Elements under this combined framework include the Business Plan, the budget, financial statements, divisional strategic/performance reviews reports and risk management reports.

 

5. Formal Schedule of Matters Reserved for the Board’s Decision

  1. The Board reserves full decision-making powers on the following matters:
    • Conflict of interest issues relating to a substantial shareholder or a Director including approving related party transactions;
    • Material acquisitions and disposition of assets not in the ordinary course of business including significant capital expenditures;
    • Strategic investments, mergers and acquisitions and corporate exercises;
    • Limits of authority;
    • Treasury policies;
    • Risk management policies; and
    • Key human resource issues.

6. Role of the Chairman

  1. The Chairman is responsible for leading the Board in oversight of management, representing the Board to shareholders and chairing general meeting of shareholders.
  2. Key responsibilities of the Chairman include:
    • Set the board agenda and ensure that Board members receive complete and accurate information in a timely manner;
    • Lead board meetings and discussions;
    • Encourage active participation and allow dissenting views to be freely expressed;
    • Manage the interface between Board and management;
    • Ensure appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole;
    • Lead the Board in establishing and monitoring good corporate governance practices in the Group; and
    • Ensure the integrity of the governance process and issues and other responsibilities assigned by the Board from time to time.

7. Role of the CEO

  1. The position of the CEO in essence is to ensure the effective implementation of the Group’s strategic plan and policies established by the Board as well as to manage the daily conduct of the business and affairs to ensure its smooth operations.
  2. The CEO is responsible to the Board for the following:
    • Executive management of the Group’s business covering, inter alia, the development of a strategic plan; an annual operating plan and budget; performance benchmarks to gauge management performance and the analysis of management reports;
    • Develop long-term strategic and short-term profit plans;
    • Assessing business opportunities which are potential benefit to the Company;
    • Set, review and ensure compliance with the Company’s value;
    • Direct and control all aspects of the business operations;
    • Effectively oversee the human resources of the Group with respect to key positions in the Group’s hierarchy;
    • Ensures that the Group’s Financial Reports present a true and fair view of the Group’s financial condition and operational results and are in accordance with the relevant accounting standards;
    • Assures the Group’s corporate identity, products and services are of high standards and are reflective of the market environment;
    • Be one (1) of the official spokesman for the Company and responsible for regulatory, governmental and business relationships;
    • Ensures compliance with governmental procedures and regulations;
    • Coordinates business plans with the businesses heads, coordinates management issues through the Board, and oversees divisional function groups and cost containment process in consultation with the Group Financial Controller;
    • Maintains and facilitates a positive working environment and good employee relations; and
    • Assists the Chairman in organising information necessary for the Board to deal with the agenda and for providing this information to Directors on a timely basis.

In discharging the above responsibilities, the CEO can delegate appropriate functions to the Senior Management, who shall report to the CEO.

8. Role of Independent Directors

  1. Independent Directors are those who have no direct or indirect pecuniary interest in the Company other than the remuneration for their services as members of the Board of Directors and Board committees of the Company and the Group as defined under Paragraph 1.01 of the MMLR;
  2. The role of Independent Directors is to constructively challenge and help develop proposals on strategy include, inter alia:
    • To make independent assessment of the information, reports or statements, having regard to the Directors’ knowledge, experience and competence, to provide independent view and demonstrate objectivity in reviewing and challenging the management’s proposals at meetings;
    • To devote sufficient time to update their knowledge and enhance their skills through appropriate continuing education programmes, so as to keep abreast of industry issues, market development and trend, and enable them to sustain their active participation in board deliberations; and
    • Act as a channel of communication between Management, shareholders and other stakeholders, and provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.

9. Role of Senior Independent Director

  1. The role of Senior Independent Director include, amongst others:
    • Act as a sound board for the Chairman;
    • Ensure all independent directors have opportunity to input on the agenda, and advise the Chairman on the quality, quantity and timeliness of the information submitted by - management that is necessary or appropriate for the independent directors to perform their duties effectively;
    • Consult the Chairman regarding board meeting schedules to ensure the independent directors can perform their duties responsibly and with sufficient time for discussion of all agenda items;
    • Serve as the principal conduit between the Independent Directors and the Chairman on sensitive issues; and
    • Serve as a designated contact for consultation and direct communication with shareholders on areas that cannot be resolved through the normal channels of contact with the Chairman or Group CEO.

10. Role of Directors

  1. The principal roles of directors includes, amongst others:
    • Review and adopt a strategic plan for the Company;
    • Oversee the conduct of the company’s business to evaluate whether the business is being properly managed;
    • Succession planning, including appointing, training, fixing the compensation of and, where appropriate, replacing senior management;
    • Develop and implement an investor relations programme or shareholder communication policy for the Company;
    • Review the adequacy and the integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;
    • Direct the management of the business and affairs of the Group;
    • Attend substantially all the meetings of the Board and substantially all the meetings of each Committee on which the Director serves; and
    • Review all materials provided by the Company relating to matters to be considered before attending meetings of the Board or Committees.

11. Board Processes/Procedures

Board Meetings shall be conducted in a business-like manner where all Directors are encouraged to share their views and partake in discussions.

  1. Board Meeting and Frequency
    • The Board shall meet regularly, at least on a quarterly basis. Special Board meetings shall be held in addition to the quarterly meetings as and when required. Prior notice of meetings will be given to all who are required to attend the meetings.
      The quorum for Board meetings shall be two (2).
    • The Chairman of the Board, or in his absence, a Director from amongst the Board members appointed shall preside as Chairman of the meeting.
    • Board members are required to attend the Board meetings and attendance of each individual Director in the meetings held in a financial year is required to be disclosed in the Annual Report.
    • Other senior officers may be invited to attend for particular items within their responsibility. The Board may also invite external parties such as the auditors, solicitors and consultants as and when the need arises.
    • Additional formal business is dealt with as required, whether by physical, videoconferencing or telephonic meetings, as well other electronic meetings allowed under the laws or the Company’s Constitution 
  2. Agenda
    • The notice of a Directors’ meeting shall be given in writing at least seven (7) days prior to the meeting.
    • The agenda shall include, amongst others, matters specifically reserved for the Board’s decision. The Board shall record its deliberation, in terms of the issues discussed, and the conclusions thereof in discharging its duties and responsibilities 
  3. Meeting Papers
    • Board papers and agenda items are to be circulated at least five (5) days prior to the meeting.
    • The draft minutes shall be circulated together with the Board papers at the following Board meeting. If one or more Directors request their opinion to be noted, the Company Secretary shall comply with the request 
  4. Access to Information and Independent Professional Advice
    • All Directors (executive and non-executive) have the same right of access to all information within the Group whether as a full board or in their individual capacity, in furtherance of their duties and responsibilities as Directors of the Company, subject to a formal written request to the Chairman furnishing satisfactory and explicit justification for such request.
    • All Directors shall have access to the advice and services of the Company Secretary. The Board shall recognise that the Chairman is entitled to the strong and positive support of the Company Secretary in ensuring the effective functioning of the Board.
    • The full Board or in their individual capacity, in furtherance of their duties, shall be able to obtain an independent professional advice at the Company’s expenses through an agreed procedure laid down formally.

12. Company Secretary

  1. The appointment and removal of the Company Secretary is a matter for the Board as a whole.
  2. The Company Secretary shall be suitably qualified, competent and capable of carrying out the duties required of the post.
  3. The key role of the Company Secretary shall include
    • Provide unhindered advice and services for the Directors, as and when the need arises;
    • Enhance the effective functioning of the Board;
    • Ensure regulatory compliance;
    • Advise the Board on its obligatory requirements to disclose material information to the shareholders and financial markets on a timely basis;
    • Preparing agendas and coordinating the preparation of the Board papers in a timely and effective manner;
    • Ensuring that Board procedures and applicable rules are observed;
    • Maintaining records of the Board and ensure effective management of organisation’s records;
    • Preparing comprehensive minutes to document Board proceedings and ensure conclusions are accurately recorded;
    • Facilitate the orientation of new directors and assist in director training and development;
    • Ensure availability of information required by new directors for the proper discharge of their duties;
    • Assisting the communications between the Board and Management; and
    • Providing full access and services to the Board and carrying out other functions deemed appropriate by the Board from time to time.

13. Board Committees

  1. The Board reserves the right to establish Committees from time to time in the discharge of its duties and responsibilities.
  2. Where a Committee is formed, specific terms of reference of the committee would be established to serve as a guidance note which covers matters such as the purpose, composition and functions of the committee.
  3. A number of standing committees with written terms of reference has been established namely the following:
    • Audit Committee
      Audit Committee assists in providing oversight on the Group’s financial reporting, disclosure, regulatory compliance, risk management and monitoring of internal control processes 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.
    • 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 annual assessment of the effectiveness of the Board as a whole, its Committees and the contribution of each individual Director as well as identify candidates to fill board vacancies, and nominating them for approval by the Board.
    • Remuneration Committee
      The Remuneration Committee is primarily responsible for recommending to the Board the remuneration packages of Executive Directors, Non-Executive Directors and Senior Management in all its forms, drawing from outside advice if necessary. Although the Board has granted discretionary authority to these committees to deliberate and decide on certain operational matters as set out in their respective Terms of Reference, the ultimate responsibility for final decision on all matters lies with the Board,

Although the Board has granted discretionary authority to these committees to deliberate and decide on certain operational matters as set out in their respective Terms of Reference, the ultimate responsibility for final decision on all matters lies with the Board.

14. Remuneration levels of Directors and Senior Management

  1. The Company aims to set remuneration at levels which are sufficient to attract and retain the Directors and Senior Management needed to run the Company successfully taking into consideration all relevant factors including the function, workload and responsibilities involved, but without paying more than is necessary to achieve this goal.
  2. The level of remuneration for the CEO, Executive Director and Senior Management is recommended by the Remuneration Committee to the Board after giving due consideration to the compensation levels for comparable positions among other similar Malaysian public listed companies.
  3. In fixing the remuneration to be paid to Directors who are not employees of the Group for serving on the Board and on Committees of the Board, the Board will consider the following
    • The compensation that is paid to Directors of other companies which are comparable in size to the Group.
    • The amount of time it is likely Directors will be required to devote in preparing for and attending meetings of the Board and the Committees on which they serve.
    • The success of the Company (which may be reflected in compensation related to the price of the Company’s shares).
    • If a Committee on which a Director serves undertakes a special assignment, the importance of that special assignment to the Group and its shareholders.
    • The risks involved in serving as a Director and a member of Board Committees.
  4. Fees payable to non-executive Directors shall be paid by a fixed sum and not by a commission on or percentage of profits or turnover.

15. Accountability and Audit

  1. Financial Reporting
    • The Board aims to present a clear and balanced assessment of the Group’s financial position and future prospects that extends to the annual and quarterly reports.
    • The Board ensures that the annual and interim financial statements are prepared so as to give a true and fair view of the current financial status of the Group in accordance with the approved accounting standards.
  2. Company Auditors
    • The Board has established formal and transparent arrangement for considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the Company auditors through the Audit Committee.
    • The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the Company auditors. The Audit Committee ensures that the Company auditors do not supply a substantial volume of non-audit services to the Company and any practice that departs from this has to be disclosed in the Audit Committee Report.
  3. Internal Controls and Risk Management
    • The Board has overall responsibility maintaining a system of internal controls, which provides reasonable assurance of effective and efficient operations and compliance with laws and regulations as well as with internal policies and procedures.
    • The Company has a well-resourced internal audit function, which critically 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. The outsourced internal auditors has direct access to the Board through the Chairman of the Audit Committee.
    • The Board ensures the system of internal controls is reviewed on a regular basis by the Audit Committee.
    • The AC receives reports regarding the outcome of such reviews on a regular basis.

16. The Board's Relationship with Shareholders and Stakeholders

  1. The Board shall maintain an effective communications policy that enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the general public.
  2. It is the role of the Board to ensure that the Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”) of the Company are conducted in an efficient manner and serves as a crucial mechanism in shareholder communications. Key ingredients behind this include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the AGM and EGM.
  3. The Board will focus its efforts on the following best practices to enhance the effectiveness of the General Meeting:
    • Ensure that each item of special business included in the notice to be accompanied by a full explanation of the effects of the proposed resolution;
    • For election of Directors, ensures that the notice of meeting state which Directors are standing for election with a brief description to include matters such as age, relevant experience, list of directorships, date of appointment to the Board, details of participation in board committee and the fact that a particular Director is independent;
    • Ensure that the Chairman provides reasonable time for discussion at the meeting. Where appropriate and if required, the Chairman will also undertake to provide written answer to any significant question which cannot be answered immediately; and
    • Conduct a business presentation with a question and answer session, where appropriate and if required.
  4. The CEO shall take responsibility for addressing queries from shareholders, stakeholders, analysts and press.
  5. The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Group and adopts an open and transparent policy in respect of its relationship with its shareholders and investors.
  6. The Board ensures the timely release of financial results on a quarterly basis to provide shareholders and analysts with an overview of the Group’s performance and operations in addition to the various announcements made during the year.
  7. The Group’s website, http://pmbtechnology.com/, provides easy access to corporate information pertaining to the Group and its activities and is continuously updated.

17. Induction Process

  1. The objective of the induction process is to provide Directors with a rapid and clear insight into the Group as well as keeping them abreast with development in the market place pertaining to the oversight function of Directors. This will enable the Directors to discharge their duties and responsibilities effectively.
  2. Induction of Directors may include, but not limited to, the following:
    • Furnishing of a copy of the previous board minutes for at least the past six (6) months; the business/strategic plan, pertinent Management reports; profile of key competitors and significant reports by management consultants on areas of board responsibilities;
    • PMBT Group’s code of conduct;
    • Visits to key sites; and
    • A formal one (1) to two (2) day induction programme, including the elements above, and also presentations from various divisions on their strengths, weaknesses and ambitions.

 

18. Directors' External Commitments and Conflict of Interest

  1. The Company’s Constitution stipulate that a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare his interest in accordance with the provisions of the Companies Act 2016. The Director concerned shall not participate in deliberations and shall abstain himself from voting in any matter arising thereof unless otherwise as provided for in the Constitution of the Company.
  2. Shall there be an actual, potential or perceived conflict of interest between the Company or a related corporation and a Director, or an associate of a Director such as a spouse or other family members, or a related company, the Director involved shall make full disclosure and act honestly in the best interest of the Company.
  3. An actual, potential or perceived conflict of interest shall not necessarily disqualify an individual Director from the Board provided that full disclosure of the interest has been made in good faith and with due honesty.

19. Directors’ training

  1. Directors are required to undergo the mandatory accreditation programme under the auspices of Bursa Malaysia Securities Berhad. In addition, Directors are required to attend relevant training courses or seminars at periodic intervals to keep themselves updated on developments pertaining to the oversight function of Directors as well as technical matters, for example, financial reporting standards, tax, budgets, etc. The Nomination Committee shall decide on the continuous education training programme for Directors.
  2. All trainings attended by Directors shall be disclosed in the Annual Report. In special circumstances, valid justifications for non-attendance at any training by Directors for the financial year shall also be disclosed

20. Directors’ training

  1. The Company shall consider the use of information technology in communicating with stakeholders, including a dedicated section for Investor Relations on the Company’s website. This section shall provide information such as the Board Charter and Annual Report of the Company.
  2. The Board appoints the Group CEO to speak on behalf of the Group and to manage the communication of information to investors, other stakeholders and the public in an orderly and effective manner while adhering, at all times, to relevant laws and regulatory requirements.
  3. Non-executive Directors with the possible exception of the Chairman to as far an extent as possible, shall avoid commenting on the Company to external audiences. This is to avoid confusion and to ensure that the Board speaks in one voice.

 

21. Review and Approval

This Charter and all Board Committee Charters and Policies shall be periodically reviewed and updated based on the prevailing regulatory promulgations. This Charter may be amended by the Board as it deems appropriate to ensure its relevance and effectiveness.


This Charter is reviewed and approved by the Board of Directors on 24 February 2020.

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