Kwantas Corporation Berhad

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KWANTAS CORPORATION BERHAD

Board Charter

Introduction

Good corporate governance is recognized globally as the fundamental to every organization to achieve its competitiveness, sustainability and growth. The Board of Directors of Kwantas Corporation Berhad is collectively responsible for the overall conduct and success of the Group in a challenging environment with a view to enhance prosperity and value to Shareholders, whilst not forgetting interest of other stakeholders. The Board members are therefore expected to perform their duties with the upmost integrity, honesty and in a professional manner in accordance with the law.

Purpose

This Board Charter is intended to outline the roles and responsibilities, Board structure and processes of the Board so as to enhance the communication and coordination between the Board and the Management in discharging their duties and responsibilities.

Interpretations

In this Charter :-

"Board" means the Board of Directors of the Company;

"Business" means the business of the Company and all its subsidiaries;

"Company" means Kwantas Corporation Berhad (Co. No. 356602-W);

"Director(s)" means members of the Board;

"Group" means the Company and all its subsidiaries;

"Management" means the management personnel of the Group; and

"Shareholder(s)" means the shareholders of the Company.

Roles and Responsibilities

The Board establishes a clear role and responsibility in discharging its fiduciary duty. The Board assumes, amongst others, the following roles and responsibilities in respect of the Group:

i)		to provide continuity for the entire Group;
ii)		to formulate a clear vision and strategic directions to govern the Group;
iii)		to review and adopt the Group's strategic plans;
iv)		to acquire sufficient resources for the Group's operations and to finance them adequately;
v)		to identify and evaluate principal risks involved and to seek appropriate experts' advice to make an effective decision in the best interest of the Group;
vi)		to establish a succession planning for key Management positions;
vii)		to maintain a sound system of internal controls and to review its adequacy and integrity to safeguard Shareholders' investments and the Group's assets;
viii)		to give a true and fair view of the financial position of the Group;
ix)		to oversee the conduct and running of the Group's day-to-day business in the buoyant economy;
x)		to oversee and promote effective development and communications with shareholders;
xi)		to approve on key transactions such as major acquisitions and disposals, major investments and divestments, audited financial reports and other substantial decisions that will impact the Group's undertakings and properties; and to act bona fide and use reasonable diligence in the discharge of fiduciary and leadership functions.

Board Structure

I.Composition

The Board will decide on what it considers as an appropriate size apart from bringing a wide range of business, industrial and financial experience for the Board to facilitate effective decision making. The Articles of Association of the Company provided for a minimum of two (2) and a maximum of nine (9) Directors. The Board currently consists of eight (8) members, of whom three (3) are Independent Non-Executive Directors. The number and composition of the Board membership are reviewed on a regular basis so as to be in line with the size, nature and complexity of the Group's operations.

II.Appointment

The appointment of new Director to the Board is a formal and transplant process. The Nominating Committee ("NC") is established and delegated the responsibility for making recommendations for any appointments to the Board. The NC comprised exclusively of Non-Executive Directors, all of whom are independent. New nomination of Director will first go to the NC. The NC empowered to assess the required mix of skills, competency, integrity and experience to be brought to the Board. The NC will assess the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the Board annually.

The NC is also charged with the responsibility of determining annually whether an Independent Director can continue to bring independent and objective judgement to Board deliberations. Pursuant to Recommendations 3.2 of the Malaysian Code on Corporate Governance 2012, tenure of an Independent Director is capped at nine (9) years since appointment as Independent Director. The Board will justify the continuity of such Independent Director by making recommendation to and seeking approval of the Shareholders in a general meeting to be remained as an Independent Director.

There is a balance in the Board because of the presence of strong and independent element of having Independent Directors making up to one-third (1/3) of the Board. There is also a clear division of responsibility between the Chairman and the Group Chief Executive Officer to ensure balance of power and authority, such that no one individual represents a considerable concentration of power. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Group Chief Executive Officer has overall responsibilities to oversee the daily operational functions of the operating units, strategic planning, organisation effectiveness and implementation of policies and decisions of the Board. Division of responsibilities is reviewed regularly so as to ensure the needs of the organization are met.

III.Re-election

In accordance with the Company's constitutions, all the Directors shall retire and be eligible for re-election by rotation at each Annual General Meeting ("AGM") at least once in every three (3) years. In addition, one third (1/3) of the Board members shall retire by rotation and shall be eligible for re-election at each AGM. Director who has attained the age of seventy (70) years old is subjected to re-appointment by Shareholders annually in accordance to Section 129 of the Companies Act, 1965.

IV.Role of Chairman

The Board will elect a Chairman from among the Directors and the person so appointed shall be a Non-Executive member of the Board. The Chairman assumes a leadership role in the Board by helping the Board fulfills the goals it sets through effective governance processes and represents the Board to the Shareholders and other stakeholders. The role of the Chairman is to oversee the orderly conduct and effectiveness of the Board by ensuring a cohesive working relationship between members of the Board.

The Chairman shall also preside at Board and Shareholders meetings and shall ensure the conduct and proceedings thereof comply with good conduct and practices. He acts as a facilitator at the meetings and ensures no dominant discussions are on-going for logical and understandable outcomes.

V.Role of Group Chief Executive Officer

The role of the Group Chief Executive Officer serves as a conduit between the Board and the Management and is primarily responsible for the effective implementation of the day-to-day management of the business in accordance with the strategies and policies approved and adopted by the Board. He leads the Executive Directors of the Company in making and implementing the day-to-day decisions on business operations, managing resources and risks in pursuing the corporate objectives of the entire Group. He continuously improves, develops and drives changes for the growth and profitability of the Group apart from ensuring an effective Management team and skills are putting in place for its development and succession.

VI.Role of Executive Directors

The Executive Directors are involved in the leadership roles overseeing the day-to-day operations and management within their specific areas of expertise or assigned responsibilities. They represent the highest level of the Company and are decision makers on matters within their scope under the leadership of the Group Chief Executive Officer.

VII.Role of Non-Executive Directors

Non-Executive Directors are not involved in the day-to-day management of the Group but they will play key supporting roles, contribute knowledge and experience towards the formulation of policies and decision-making process within their particular expertise and experience. The roles of Non-Executive Directors are largely encompassing the monitoring of Group's performance and providing checks and balances and ensuring high standards of corporate governance are adhered to.

VIII.Company Secretary

Company Secretary of the Company is appointed and removed by the Board. The Company Secretary who is qualified, experienced and competent, plays an important role in supporting the Board by ensuring adherence to the Company's policies and procedures. The Company Secretary is also responsible to update the Board on any new changes and development to the statutory or regulatory requirements pertaining to the duties and responsibilities of Directors where necessary.

IX.Board Committees

The Board may from time to time establish Committees as it deems appropriate to assist in the discharge of its duties and responsibilities.

The Board has so far established the following Committees, namely :-

a) Audit Committee

b) Nomination Committee

c) Remuneration Committee

Each Committee shall operate within its own specific terms of reference as approved by the Board. Such terms of reference of the Committees shall be reviewed periodically and amended accordingly after approval is obtained from the Board.

The Chairman of the respective Committees will report and update the Board on significant issues and concerns discussed and where appropriate, make the necessary recommendations to the Board.

Board Procedures

I.Board Meeting

    Board meeting is convened to discuss and consider various matters including the Group's quarterly financial results, performance review, major investment decisions, future business planning, major operational and financial issues. Salient matters that required the Board's notice or direction will be highlighted during the Board meeting. All pertinent issues discussed at the meeting in arriving the decisions and conclusions are properly recorded by the Company Secretary by way of minutes of meetings.

    The Board will convene meetings minimally four (4) times a year, with additional informal meetings and discussions to be convened as and when necessary. The daily operational matters that require urgent and immediate Board decision will be sought via Directors' Circular Resolutions, supported by full detail information.

II.Agenda and Meeting Papers

    Notice of meetings setting out the agenda together with the relevant Board papers are circulated to Directors insufficient time to enable them to peruse, obtain additional information and/or seek further clarification on the matters to be deliberated.

III.Access To Information And Independent Advice

    Directors shall have unrestricted access to all Company's information and records that are pertinent to the discharge of their duties and responsibilities.

    Directors shall also have access to advice and services of the Company Secretary and any other independent professional advice at the cost of the Company in carrying out their duties.

Directors' Training And Continuing Education

Directors are required under the auspices of Bursa Malaysia Securities Berhad to undergo the Mandatory Accreditation Programme. In addition, Directors are encouraged to attend a continuous education or suitable training programme each year to keep themselves updated and equipped with the requisite knowledge and competencies to make effective contribution to the Board.

Authority

Memorandum and Articles of Association of the Company together with other prevailing laws and regulations governing companies in Malaysia have derived authority for the Board to act diligently.

Code of Ethics

The Company has formalized a set of the guiding principles to govern the standard of ethics and good conduct expected of Directors of the Company. Directors of the Company should observe the codes in the discharging of their duties from time to time.

Review of the Board Charter

The Board will assess the adequacy of this Board Charter periodically and will take into consideration the needs of the Group as well as any latest development in rules and regulations that may have impact over the Board’s duties and responsibilities.

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