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1.1 The Board Charter sets out the principal functions, composition, roles and responsibilities of the Board of Directors (“Board”) of Ygl Convergence Berhad and its Group (“YGL”).
1.2 The Board is primarily responsible for ensuring that YGL has in place an appropriate corporate governance structure focused on creating, safeguarding and enhancing shareholders’ value.
1.3 The Board is responsible for ensuring that YGL is in compliance with laws and regulations and ethical obligations to all legitimate stakeholders who are likely to have a social, environmental, economic or financial impact from YGL’s actions.
1.4 The Board has a duty to ensure that appropriate accountability and internal control systems are in place.
1.5 This charter states YGL’s commitment to corporate governance. It is not an all inclusive document and should be read as a broad expression of principles. The Board will review this charter on an annual basis or as and when it is necessary.
1.6 The Board recognizes the value of good governance and endorses the Malaysian Code On Corporate Governance 2012 which focuses on strengthening the efficiency and effectiveness of the board in carrying out their fiduciary duties and responsibilities.
2.1 The objectives of the Board Charter are to ensure that the members of the Board are aware of their roles, duties and responsibilities and apply the principles and practices of good corporate governance in providing stewardship to YGL.
3.1 As a public company listed on the Malaysian Stock Exchange, YGL must comply with the Companies Act, 1965 and the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) as well as all other applicable laws and regulations and their subsequent amendments thereto.
3.2 As a company operating in the Asia Pacific region, namely Singapore, Thailand, Hong Kong and China, YGL must ensure that it is aware of and complies with all applicable laws in those jurisdictions.
4.1 The Board is responsible for the overall performance of YGL and accountable to its shareholders and other stakeholders. The roles and responsibilities include the following:-
a) Review and set the strategic direction of YGL
b) Review and monitor the implementation of long and short term plans in line with corporate strategies
c) Review and monitor the overall business and assess executive management performance
d) Oversee the resources of YGL, capital management, acquisition and divestiture
e) Identify risk areas of YGL, review and monitor risk mitigation measures.
f) Review the integrity and adequacy of internal control and accountability system
g) Review security of management information system
h) Review and approval of financial reports and corporate information to the market
i) Oversee compliance with listing requirements for timely reporting and continuous disclosure of relevant information.
j) Oversee compliance with tax, legal and regulatory obligations and codes of conduct.
k) Develop succession planning for Board and Executive Management
l) Oversee the investors’ relation program to establish effective communication with shareholders.
5.1 The Directors may exercise all such powers of the Company and do all such acts on behalf of the Company in managing the business of the Company within the scope of the Company’s Memorandum and Articles of Association (“M&A”) and the Companies Act, 1965 and their subsequent amendments thereto.
5.2 The Board must establish a clear written procedure for matters requiring the Board’s approval and matters delegated to the Board Committees or Management.
5.3 The Board has the full power in making decisions with regards to the following matters:-
a) Conflict of interest relating to a substantial shareholder or a Director
b) Material acquisitions and disposals of assets not in the ordinary course of business of YGL
c) Investment in other companies, major capital projects and expenditure
d) Corporate strategies
e) Treasury policies
f) Risk management policies
g) Any other issues which may be decided by the Board from time to time
5.4 The Directors shall at all times:-
a) Exercise due care and diligence
b) Act in good faith and in the best interest of YGL
c) Not improperly use his/her position or misuse information of YGL; and
d) Commit the time necessary to discharge effectively his/her role as a Director.
5.5 The Independent Non-Executive Directors shall:-
a) Confer at each Board Committee Meeting without the presence of the management.
b) Provide independent judgment and impartial view point in deliberating board matters
c) Ensure that the interests of all shareholders are taken into consideration by the Board
5.6 All Directors are entitled to be heard at all meetings and should bring an objective judgment to bear in decision making.
5.7 The Board shall establish appropriate communication and response channel which incorporate whistle blowing policy.
5.8 The following matters are within the purview for the Board’s decision:-
a) Approval of quarterly results for submission to Bursa Securities
b) Approval of Directors’ Report and Audited Financial Statements and authorization of signatory Statement by Directors and Statutory Declaration
c) Approval of agendas for annual general meeting and extraordinary general meeting
d) Approval for payment of interim dividend
e) Recommendation of payment of final dividend for shareholders’ approval
f) Approval for formation of Board Committees and committee members
g) Approval for appointment, resignation and retirement of Directors
h) Approval for appointment and resignation of Company Secretary
i) Approval for joint ventures, acquisition and disposal of a business undertaking or property of substantial value
j) Approval of related party transactions and recurrent related party transactions
k) Approval of circulars and prospectus to shareholders
l) Approval of annual report including the mandatory statements in content
m) Approval for issuance of shares pursuant to mandate from shareholders
n) Proposal of directors’ fees for shareholders’ approval
o) Proposal of increase in share capital for shareholders’ approval
p) Recommendation of changes to company’s name, amendments to Articles of Association for shareholders’ approval
q) Review of fair representation of minority shareholders’ investment in the company
r) Review Board size, competencies and assessment of effectiveness of the Board
s) Approval of new business ventures which are different from the existing business
t) Approving opening and closing of bank accounts and authorized signatory
u) Approval of credit facilities and corporate guarantees
v) Recommendation of appointment, re-appointment or resignation of external auditors for shareholders’ approval
w) Recommendation of appointment, re-appointment or termination of internal auditors
x) Approval for change of registered office and share registry
y) Approval for creation of charge or debenture
z) Approval of any other matters that the Board deems necessary
6.1 The provision of the Company’s Articles of Association states that the number of Directors (other than alternate Directors) shall not be subject to any maximum but must not be less than two.
6.2 The provision of Paragraph 15.02 of the Bursa Malaysia Securities Berhad Listing Requirements states that at least one third of the Board shall comprise of Independent Non-Executive Directors. In the event that the number is not three or multiple of three, then the number nearest to one third shall be used.
6.3 The composition of the Board shall reflect the level of investment in the Company by shareholders apart from the largest shareholders.
6.4 In compliance with the above, the Board currently comprises five Directors :-
a) Two Executive Directors (who are the Chief Executive Officer and Chief Financial Officer); and
b) Three Independent Non-Executive Directors
6.5 One of the Independent Non-Executive Directors must be a member of the Malaysian Institute of Accountants, while the other Directors must possess a balance mixture of knowledge and expertise to contribute to the effectiveness of the Board.
6.6 There should be a division in the roles between the Chairman and the Chief Executive Officer to ensure separation of responsibilities and a balance of control. Due to the small Board size, currently the Chief Executive Officer also assumes the role of the Chairman.
7.1 The Chairman is responsible for:-
a) Leadership of the Board
b) Promoting constructive and respectful relations among Board members
c) Maintaining relationship of trust between the Board and management
d) Ensuring timely and accurate dissemination of information to Board members
e) Overseeing the board in the effective discharge of its supervisory role
f) Facilitating the effective contributions of all Directors
g) Arranging regular and effective evaluations of the Board’s performance
7.2 The Chairman, in consultation with the Company Secretary and Executive Directors, is responsible for:-
a) Overseeing the efficient organisation and conduct of the Board’s functions and meetings;
b) Briefing of all Directors in relation to issues arising at meetings;
c) Ensuring that complex issues are allowed sufficient time and prior discussion in preparation for Board meeting
d) Ensuring every Board resolution is put to vote by the Directors to confirm that the will of majority prevails
e) Casting decisive vote in the event of equal number of votes
8.1 The CEO plays a vital role in connecting corporate governance with the management functions of the Company such that operation plans are carried out in congruence with the directives of the Board.
8.2 The CEO is responsible for the day to day management and operations of the business of YGL with all powers, discretions and delegations authorised, from time to time, by the Board.
8.3 The CEO is accountable to the Board for all the directives delegated to the Management. The CEO and management team formulate strategies, policies and plans to be implemented in YGL in the direction of the Company’s goals.
8.4 At each meeting where the Board approves the quarterly and annual financial statements, the CEO will brief the Board as to the overall and segmental performance of the group as well as corporate and business development.
The Board has established two Committees to assist it in fulfilling its duties and responsibilities. The two Committees are:-
a) Audit Committee
b) Nomination Committee
Each Committee has its roles and responsibilities and has been granted certain delegations.
Each Committee has an obligation to report on its meetings to the Board and minutes of all committee meetings are tabled and made available to all Directors.
The Audit Committee assists the Board in regards to the financial reporting, audit and risk management, including:-
a) Oversee the integrity of YGL’s financial reporting
b) Ensure compliance of financial reporting to applicable accounting and reporting standards
c) Evaluate the effectiveness of YGL’s enterprise wide risk management and internal control framework
d) Ensure compliance with legal and regulatory obligations
e) Evaluate the internal and external audit processes
f) Oversee the independence of the external auditors
g) Oversee the competence of the internal auditors
h) Verify the allocation of employees’ share option scheme (“ESOS”) in compliance with the criteria as stipulated in the by-laws of ESOS of YGL, if any
i) Establish policy governing the circumstances under which the contact in relation to the provision of non-audit services can be entered into by the Group with its external auditors and procedures that need to be adhered
j) Review the adequacy and effectiveness of risk management and internal control systems instituted within the Group.
The Nomination Committee assists the Board in regards to appointment, re-election and performance of directors, including:-
a) Evaluate the skills, knowledge, expertise, professionalism, integrity, attitude of candidates
b) Evaluate the independence and capability of candidates for independent non-executive director
c) Recommend candidates for all directorships to the Board
d) Propose suitable directorship for Board Committees
e) Develop criteria for annual board evaluation
f) Consider diversity obligations
g) Director’s induction programs and continuing development
h) Review succession plan of the Board
10.1 The Directors are expected to restrict their involvement in businesses that can lead to conflict of interest with YGL. In the event that a conflict of interest situation exists, the Director shall disclose the nature of his/her interest whether direct or indirect in any contract or proposed contract entered into with the Company and give due notice so as to enable the Company to comply with the provisions of the Companies Act, 1965. The Director shall then excuse himself/herself from Board discussion and abstain fro voting in respect of those matters.
10.2 Independent Directors are in the capacity to exercise their duties unfettered by any business or other relationships and express their opinions at the board table free of concern about their position or the position of any third party.
10.3 Any Director on the Board of another entity is expected to excuse him or herself from any meeting where that entity’s commercial relationship with YGL is directly or indirectly discussed.
10.4 Should any Director have any concern about his/her independence, he/she must immediately raise the issue with the Board. Relevant disclosure information must be made available to the Board and Company Secretary.
10.5 Directors are to inform the Board prior to accepting any new appointment to any entity’s board.
10.6 Where the independent status of a Director is lost, this is to be disclosed to Bursa Securities in a timely manner.
11.1 The Company’s Articles of Association states that at the first annual general meeting of the Company, all the Directors shall retire from office. In accordance with Articles 29.1 of the Company’s Article of Association, an election of the Directors shall take place at the Annual General Meeting in every subsequent year, one third of the Directors for the time being or if their number is not three or a multiple of three, then the number nearest to one third, shall retire from office. Provided always that all Directors shall retire from office once at least in each three years but shall be eligible for re-election. A retiring Director shall retain office until the close of the meeting at which he/she retires whether adjourned or not.
11.2 The Directors to retire in each year shall be those who, being subject to retirement by rotation, have been longest in office since their last election or appointment, but as between persons who became or were last re-elected Directors on the same day, those to retire shall be determined by lot. Article 29.6 of the Company’s Articles of Association also provides that a newly appointed Director shall hold office only until the next Annual General Meeting and shall be eligible for re-election, and shall not be taken into account in determining the Directors who are to retire by rotation at the meeting.
11.3 Directors who have attained the age of seventy years shall retire pursuant to Section 129(2) of the Companies Act, 1965 and subject to re-appointment pursuant to Section 129(6) of the Companies Act, 1965.
11.4 The Nomination Committee is responsible to review and recommend any appointment of new Directors and the re-election or re-appointment of Directors who are retiring pursuant to the Company’s Articles of Associations and Section 129 of the Companies Act, 1965 to the Board for approval.
11.5 The ACE Market Listing Requirements of Bursa Securities provides that at any one time, a Board member shall not hold more than five directorships in listed companies.
11.6 The Board should be of a size and composition that is conducive to making decisions expediently, with the benefit of a variety of knowledge, skills and perspectives, and in the best interest of the YGL as a whole rather than of individual shareholders or other stakeholders.
11.7 The Board shall have the power to immediate remove any Director who is in breach of his/her fiduciary duties, the provisions of the Companies Act, 1965, other laws or code of conducts.
12.1 In the event of emergency circumstances a Director may nominate a person, not being a Director, to act as his/her alternate and remove such alternate Director at his/her discretion subject to the approval of the Board. The Director appointing an alternate person shall in writing notify the Board in regards to entitlement to payment of remuneration otherwise payable to the appointor. Any fee payable to the alternate Director shall be agreed upon between the alternate Director and the appointor and to be paid out of the remuneration of the latter.
12.2 The alternate Director shall be entitled to receive notices of all meetings and to attend, speak and vote at any such Board meetings at which his/her appointor is not able to be physically present. Any such appointment of alternate Director may be revoked at any time by the appointor or by the Board and shall be effected by a notice in writing to the Company Secretary. If the appointor of an alternate Director for any reason ceases to be a Director, the alternate Director shall by that very fact cease to be an alternate Director.
13.1 The office of Director shall be vacated in the following circumstances:-
a) Upon his/her attainment of the age of seventy years;
b) If he/she ceases to be a Director by virtue of the Companies Act, 1965;
c) If he/she resigns from office and send by hand, written notices of such resignation at the Registered Office;
d) If he/she is removed from office of Director by resolution of the Board in general meeting of which special notices have been given;
e) If he/she becomes of unsound mind during his/her term of office; or
f) If he/she becomes prohibited from being a Director by reason of any order made under the provisions of the Companies Act, 1965or contravenes Section 130 of the Companies Act, 1965
14.1 The Directors shall be remunerated for their services rendered. The Independent Non-Executive Directors do not have any service contract with the Company.
14.2 The fees payable to Directors shall be determined and approved pursuant to an ordinary resolution passed by the Company in the annual general meeting.
14.3 Fixed sum of fees are payable to Independent Non-Executive Directors for their services rendered. If a Director only holds office for part of the period in respect of which such fees are payable, he/she shall be entitled only to a proportion of the fees related to the period during which he/she has held office.
14.4 The salaries payable to Executive Directors for their services rendered shall commensurate with the level of work in their respective positions.
15.1 The Company Secretaries play an important role in advising, assisting and facilitating the Board and Board Committees in maintaining good corporate governance and fulfilling their obligations to statutory requirements. The Board must have access to the advice and services of the Company Secretary in discharging their duties and responsibilities. The functions of the Company Secretaries amongst others include:-
a) Attend and ensure the proper conduct of procedures at the Annual general Meetings, Extraordinary Meetings, Board Meetings, Board Committee Meetings and any other meetings.
b) Keep full board minutes of each Board meeting.
c) Keep and maintain proper documentation of statutory records, register books, corporate papers and other relevant documents
d) Advise the Board on matters pertaining to compliance with statutory laws and regulations such as the Companies Act, 1965, ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, relevant guidelines and directives.
e) Safeguard the interests of the Company and Board
15.2 Written Resolutions:-
a) Are to be sent to all Directors
b) Are not to be implemented if any Director advises that they have any reservations about the proposed Resolution (in which case the matter is to be considered at the next Board Meeting); and
c) Are not to be implemented until assented to by a majority of the Directors
16.1 The Board should understand the structure of YGL business operations and key developments affecting YGL’s directions. The Board may receive periodic presentations to assist it in achieving such an understanding.
16.2 The Management must provide the Board and Board Committees with relevant information in a form, quality and timeframe that enable them to effectively discharge their responsibilities and duties.
16.3 Directors are entitled to request and receive such additional information as they consider necessary to support informed decision making. Any Director has the authority to seek any information or additional information he/she requires from any employee of YGL and all employees must comply with such requests. Any significant issues raised by a Director are to be communicated to the Chairman, Chief Executive Officer or Company Secretaries.
16.4 All Directors are to receive copies of a full agenda and comprehensive Board papers prior to each Board meeting. The Company Secretaries shall keep full board minutes of each Board meeting.
17.1 A Director seeking independent advice must first discuss the request with the Board and after deliberation, may seek such independent legal, financial or other advice deemed necessary in furtherance of the Board’s duties.
17.2 The Board will facilitate obtaining such advice and where appropriate, disseminate the advice to all Directors.
18.1 All Directors must attend the Mandatory Accreditation Programme as required by Bursa Securities on all directors of listed companies.
18.2 Directors are encouraged to attend workshops, seminars, conferences and other training programme from time to time, to equip themselves with latest knowledge pertaining to corporate governance, legal and regulatory requirements as part of the Board’s continuing development effort aims at enhancing the effectiveness of the Board in discharging their duties and responsibilities.
19.1 YGL is required to present a true and fair assessment of its financial position, performance and prospect through four quarterly financial results, the requisite announcements and the annual financial report to Bursa Securities.
19.2 The Board is responsible to ensure that the financial statements contain clear and accurate financial information to reflect the financial status of YGL and the financial reporting is done within the stipulated timeframe.
19.3 The Audit Committee assists the Board in reviewing and scrutinizing the financial information to ensure that the financial statements are prepared in accordance with approved accounting standards, in compliance with disclosure requirements, contain adequate and accurate financial information and commentary to reflect YGL’s activities and results.
19.4 The Annual Report shall incorporate a Corporate Governance Statement by the Board.
20.1 The External Auditors report directly to the Audit Committee who in turn makes recommendations to the Board in regards to financial reporting, application of approved accounting standards, disclosure requirements, internal control principles and related matters.
20.2 The External Auditors are invited to attend Audit Committee Meetings twice in a year to present their audit memorandum, review financial results, discuss about audit findings, accounting policies and internal control issues. The External Auditors may also be invited to attend other meetings as and when necessary.
20.3 The External Auditors must attend the Annual General Meeting of YGL and be available to answer questions (if any) about the conduct of the audit, content of the Auditor’s Report, accounting policies adopted by YGL and the independence of the external auditor in relation to the conduct of the audit.
20.4 Appointment of the Company’s External Auditors is subject to the approval of the shareholders at the Annual General Meeting. The External Auditors have to retire during the Annual General Meeting and re-appointed by the shareholders for the following year. The Board is authorized by the shareholders to determine the External Auditors’ remuneration.
21.1 The Board recognizes the importance of internal audit functions to ensure that the control measure and procedures for all areas of the business operations are in place and working effectively. The Board ensures that the internal control system is reviewed on a regular basis and corrective actions are undertaken timely.
21.2 The Board understands that the operation of YGL business is not large enough to warrant the separate establishment of an internal audit department within YGL. As such the internal audit functions are outsourced to an independent professional firm to review and scrutinize the internal control processes.
21.3 The Internal Auditors report directly to the Audit Committee who in turn holds discussion with the Board in regards to improving internal controls policies, measures and procedures based on the outcome and recommendations of inter audit reports.
22.1 As part of the Board’s commitment towards maintaining an appropriate shareholder communications policy which is designed to promote effective communication with shareholders , the Board has undertaken the followings:-
a) Ensuring timely release of financial results and corporate announcements to provide shareholders with information in regards to YGL’s financial performance and corporate developments.
b) Setting up of YGL’s homepage at www.yglworld.com where the shareholders and public at large can obtain information about YGL’s group structure, products and services, expertise, success stories, annual reports, and other business information.
d) Encouraging effective participation of shareholders at general meetings
e) Creating public awareness from time to time by media release on YGL branding, and major corporate exercise.
f) Direct sending of shareholder materials from the Company Secretaries
23.1 The Board shall meet at least four times a year and has a formal agenda for matters reserved for the Board’s decision. Additional Board meetings may be held as and when required. The quorum for the Board meeting shall be three members.
23.2 The notices of meetings together with the relevant board papers compiled by the Company Secretary shall be circulated to all the Directors at least seven clear days before the meeting unless the Directors agree to a shorter notice.
23.3 In the event that the Chairman is not present within fifteen minutes after the time for holding the meeting, the Directors shall choose one of the present members to act as Chairman and commence meeting.
23.4 No Director shall vote in respect of any contract or proposed contract or arrangement in which he/she is directly or indirectly interested unless such arrangements involve rights issue, bonus issue and dividend payment.
23.5 A resolution in writing signed or approved by letter, facsimile or email by the majority of the Directors who are present in Malaysia shall be valid and effectual as if it had been passed at a meeting of the Directors.
25.1 At least once in each financial year, the Board shall review this Charter and make any necessary amendments thereto including those in order to comply with the ACE Market Listing Requirements.
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