Board Charter

(1) OVERVIEW

The Board of Directors (the “Board”) of Eng Kah Corporation Berhad (the “Company”) is led and directed by an experienced Board who has the overall responsibilities to oversee its business affairs.  The Board includes members of a wide range of experience and expertise in business, legal, financial and technical aspects, which are relevant for managing the Group professionally and effectively.

(2) BOARD STRUCTURE

2.1 Role

The Board assumes, amongst others, the following responsibilities:-

  • Evaluating and adopting relevant strategic plans and focus on sustainability of the business of the Company ;
  • Evaluating, overseeing and managing major business matters of the Company ;
  • Evaluating and identifying principal risks associated with the business of the Company and implementing appropriate systems to manage and mitigate these risks ;
  • Evaluating and approving relevant business ventures as well as acquisitions and disposal of assets of the Company ;
  • Evaluating and implementing succession plan, including employing and training of relevant key personnel of the Company ;
  • Evaluating the adequacy and integrity of the Company’s internal control system and management information systems ;
  • Evaluating, developing and implementing relevant investor relations programs and shareholders communication policy.
  • The Group’s Managing Director and Executive Directors are assigned with the authorities and responsibilities to implement policies as approved by the Board, as well as to oversee the day-to-day operations of the Group.
  • The Group’s Independent Non-Executive Directors are assigned with the responsibilities to provide independent views, judgments and advices in order to safeguard the interest of shareholders.

 

2.2 Board Composition And Balance

  • At least one-third of the Board comprises Independent Non-Executive Directors.
  • The Board assesses Independent Non-Executive Directors of the Company annually, to ensure that they are in the position to provide independent views, judgments and advices to the Board in order to safeguard the interest of shareholders.
  • Independent Non-Executive Directors are equal board members and provide a balanced and independent view to the Board.
  • Although the positions of Chairman and Managing Director are held by the same Board member, one-third of the Board are Independent Non-Executive Directors, who provide a check and balance in the Board and no one can dominate the Board on decision-makings.
  • The Board includes members with a wide range of experience and expertise in business, legal, financial and technical aspects, which are relevant for managing the Group professionally and effectively.
  • A Senior Independent Director has been appointed, so that shareholders’ concerns can be conveyed if attempts to express their concerns through the Chairman / Managing Director have failed to resolve them.

 

2.3 Appointments And Re-elections

The Nominating Committee shall assist the Board in identifying and recommending suitable candidate(s) with relevant qualifications and experience for the Board to consider to appoint as Board member(s).

The Articles of Association of the Company states that all the Directors of the Company are subject to retirement from office and at least one third of the Board shall retire once every three years by rotation at each Annual General Meeting (“AGM”) but shall be eligible for re-election.

New director so appointed shall be subjected to re-election at the forthcoming AGM to be held following the appointment.

The Company Secretary shall ensure that all the relevant information is obtained and the Company meets all the legal and regulatory requirements before the appointments of directors are made.

Independent Directors of the Company are being assessed by the Board annually to ensure that they are in the position to provide independent views, judgments and advices to the Board in order to safeguard the interest of shareholders.

The Independent Directors of the Company fulfill the criteria as independence as prescribed under the Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa Securities”).  The composition of the Board has also complied with the Listing Requirements which requires that at least one third (1/3) of the Board, to be Independent Directors.

 

2.4       Access To Information And Advice

All the Directors have direct access to the professional services of Company Secretary as well as other professional advisors to assist Directors in carrying out their duties.

Prior to Board meetings, all the Directors are furnished with agenda and Board papers on matters requiring considerations and discussions in advance of each meeting.  All the Directors have full access to information on issues to be discussed in meetings. The Management provides further information, when necessary, during meetings to facilitate the Directors in decisions making.

 

2.5       Directors’ Training

Besides attending the Mandatory Accreditation Program as required by Bursa Securities, the Company has been conducting In-House Training Program (“IHTP”) for Directors.  The purpose of the IHTP is to enable all the Directors to have better understanding on the business operations of the Group.  The IHTP covers the functions of accounting & finance; production; internal control; research & development and other aspects relating to the Group’s business operations and functions.  The IHTP is an important program to facilitate the Board in decision making processes as well as formulating strategic policy for the Group.  If necessary, Directors will also attend other relevant training programs to further enhance their knowledge and skills.

The Company Secretary also ensures that all the Directors are provided with information pertaining to their scope of responsibilities under the rules and regulations, and are informed of any changes in relevant rules and regulations with regards to the responsibilities of Directors.

(3) BOARD COMMITTEES

The Board has established the following committees to assist in discharging its responsibilities:-

  • Audit Committee
  • Nominating Committee
  • Remuneration Committee

Independent Non-Executive Directors play a leading role in these Committees.

Details of the membership and a summary of the terms of reference of each Committee appointed by the Board are published in the Annual Report.

(4) FINANCIAL REPORTING

The Board has the responsibility to present a clear and understandable assessment of the Group’s position and prospects in its quarterly reports to Bursa Securities and annual reports to shareholders.

The Audit Committee assists the Board in reviewing the information to be disclosed to ensure its accuracy, adequacy and completeness as well as comply with applicable approved accounting standards in Malaysia.

(5) ASSESSMENT OF SUITABILITY AND INDEPENDENT OF EXTERNAL AUDITORS

The Audit Committee has always maintained a transparent relationship with the external auditors in seeking professional advice and ensuring that the financial statements of the Group are prepared in accordance with the applicable approved accounting standards in Malaysia.

The Audit Committee has set the criteria to assess the suitability and independence of external auditors.  The Audit Committee has reviewed and assessed the external auditors in terms of independence, performance, competency and integrity, and recommended their re-appointment to the Board, upon which the shareholders’ approval will be sought at the AGM.

(6) RECOGNISE AND MANAGE RISKS

6.1       Sound Framework To Manage Risks

The Board acknowledges the importance of good corporate governance and is committed to maintain a sound system of internal control in order to safeguard the Group’s assets.

The Board has established a risk management framework and the Audit Committee continuously reviews the adequacy and effectiveness of the risk management processes within the Group.

6.2       Internal Audit Unit

The Board has established an internal audit unit that reports to the Audit Committee.  Its role is to provide the Audit Committee with regular assurance on the continuity, integrity and effectiveness of the internal control system through regular monitoring and reviewing of the internal control framework and management processes.

(7) STRENGTHEN THE RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

The AGM is a platform for dialogue and interaction with shareholders.  The Company has always taken the initiative to communicate and engage with shareholders especially during AGM.  Shareholders are always encouraged to enquire issues and discuss matters that are relevant to the business matters of the Group at the AGM. The Board has always encouraged shareholders to participate in poll voting during AGM.

Notice of AGM together with the Company’s annual report are served to shareholders of the Company at least 21 days before the meeting and shareholders who are unable to attend will have the right to appoint proxy to attend and vote on their behalf.

The Company also organizes analysts briefing as well as meetings with fund managers and investors in response to requests from institutional investors, analysts and public investors.

(8) CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

The Group always believes that apart from achieving its corporate objectives, it is also important to recognize that CSR is an ongoing commitment and it is necessary for the Group to emphasize on elements affecting its shareholders and other stakeholders, employees as well as environment and market place.

The Group has been incorporating CSR practices into its day-to-day business operations.  At the market place, the Group is committed to ensure that highest standards of corporate governance are practiced, and shareholders’ value shall be further enhanced through open and transparent business practices that are based on ethical values.

The Group is also committed to carry out its social responsibility at the workplace for employees, and recognize that it is important to provide a safe and conducive working environment for employees.  In addition, employees are employed under fair and equitable terms.  Furthermore, employees are also given equal opportunities in regards to their career advancement.  They are also given opportunities to participate in career training and development, for them to be equipped with relevant skills, knowledge as well as experience and add value to the organization when carrying out their duties.

The Group also understands the responsibility to care for environment while carrying out its business operations.  As such, the Group always takes into consideration factors in regards to safety and environment in its decision-makings.

(9) COMPANY SECRETARY

The Board is supported by qualified and competent Company Secretary who is responsible to advise and ensure that proper Board procedures are followed and in compliance with the relevant rules and regulations.

The Company Secretary plays an advisory role in all the Board meetings and ensures that all the meetings are properly convened and conducted.  All the records and minutes of Board meetings are properly recorded and maintained.

(10) REVIEW OF BOARD CHARTER

The Board will review the Board Charter periodically in order to take into account relevant corporate laws and regulations, as well as to ensure that it remains consistent with the Board’s objectives and responsibilities.