The Board of Directors (“the Board”) of Anzo Holdings Berhad (formerly known as Harvest Court Industries Berhad)(“the Company”) collectively leads and is responsible for the success of the Company and its subsidiary and associate companies (“the Group”) by providing entrepreneurial leadership and direction as well as supervision of the management.The Board has primary responsibility for the governance and management of the Company, and fiduciary responsibility for the financial and organisational health of the Company.
This Board Charter serves as a source reference and primary induction literature, providing insights to existing and prospective board members to assist the Board in the performance of their fiduciary duties as directors of the Company. It will also assist the Board in the assessment of its own performance and of its individual Directors.
2. BOARD STRUCTURE
2.1 Board Balance and Mix
- The number of directors shall be not less that two (2)but not more than nine (9)as set out in the Company’s Articles of Association.
- In accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad(“LR”), the Company must ensure that at least two (2)directors or one-third (1/3)of the Board of Directors of the Company, whichever is the higher, are independent directors. If the number of directors of the Company is not three (3)or a multiple of three (3), then the number nearest one-third (1/3)must be used.
- In the event of any vacancy in the Board, resulting in non-compliance with the LR, the Company must fill the vacancy within three (3) months.
- All newly appointed directors shall retire and be re-elected by the shareholders at the next annual general meeting of the Company and shall then eligible for re-election.
2.2 Tenure of Directors
- Pursuant to the Company’s Articles of Association, one-third (1/3) of the directors for the time being, or, if their number is not a multiple of three, the number nearest to one-third (1/3) with minimum of one (1), shall retire from office, and an election of directors shall take place at each annual general meeting of the Company. Each director shall retire once in every three (3) years but shall be eligible for re-election.
- The directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who became directors on the same day those to retire (unless they otherwise agree among themselves) be determined by lot.
- Any director appointed by the Board during the financial year shall hold office only until the next annual general meeting of the Company and shall then be eligible for re-election, but shall not be taken into account in determining the number of directors who are to retire by rotation at such meeting.
- Directors who are of or over the age of seventy (70) years shall also retire from office and be eligible for re-appointment at the annual general meeting pursuant to Section 129(6) of the Companies Act, 1965.
- The tenure of an independent director should not exceed a cumulative terms of nine (9) years. Upon completion of nine (9) years, an independent director may continue to serve on the Board subject to the directors’ re-designation as a non-independent director. For the Board to justify and seek shareholders’ approval for retaining a person who has served in that capacity for more than nine (9)years, as an independent director, the Nomination Committee/Board must conduct a rigorous review to determine whether the Director is independent in character and judgment, taking into account the need for progressive refreshing of the Board.
- The independence of each director is reviewed at least annually and individual directors do not participate in assessing their own independence.
2.3 Boardroom Diversity
- The Board is committed to maintaining an environment of respect for people regardless of their gender in all business dealings and achieving a workplace environment free of harassment and discrimination on the basis of gender, physical or mental state, ethnicity, nationality, religion, age or family status. The same principle is applied to the selection of potential candidates for appointment to the Board.
- The strategic intent of the Company’s Boardroom Diversity is to attract, retain and develop a diverse team of skilled people who are increasingly engaged towards the delivery of the Company’s strategies. This revolves around the following initiatives:
• Identifying and balancing the different skills and industry experiences, backgrounds and gender of Directors;
• Retaining Directors based on merit, in the context of skills, time commitment and experiences; and
• Providing a safe and healthy environment for the views of Board members to be heard, their concerns attended to and where, bias, discrimination and harassment on any matter are not tolerated.
- The Board takes cognisant of the recommendation of the Malaysian Government to have at least 30% women as decision makers in corporate sector as promulgated by the Cabinet in 2011. This has then been highlighted again in the Corporate Governance Blueprint 2011 –Towards Excellence in Corporate Governance issued by the Securities Commission, Malaysia which stipulates a goal for women participation on boards to reach 30% by 2016.The Board will take the necessary measures to attract women participation on the Board.
- The Board acknowledges the importance to promote gender diversity, the normal selection criteria based on an effective blend of competencies, skills, extensive experience and knowledge to strengthen the Board should remain a priority. Thus the Company does not setany specific target for female directors in the Gender Diversity Policy and will actively work towards having more female directors on the Board.
- Selection of candidates will be based on a range of diversity perspectives, including but not limited to professional experiences, business experiences, skills, knowledge, gender, age, ethnicity and educational background. The ultimate decision will be based on merit and contribution that the selected candidates will bring to the Board. The Board’s composition (including gender, ethnicity and age) will be disclosed in the Company’s Annual Report.
2.4 Disqualification or Vacation of Office
- The office of Directors shall become vacant if the Director :
• he becomes bankrupt or makes any arrangement or composition with his creditors during his term of office;
• he is found to be insane or becomes of unsound mind or becomes a person whose person or estate is liable to be dealt with in any way under the law relating to mental disorder during his term of office;
• he becomes prohibited by law from acting as a Director;
• he is convicted of any seizable offence;
• he resigns from office by notice in writing given to the Company;
• he is removed from office by resolution of the Company in general meeting of which special notice has been given; or
• he is absent from Board meetings for a period of more than six (6) months without special leave of absence from the other Directors and such Directors have passed a resolution that he has by reason of such absence vacated his office.
- A Director will also vacate office should he be absent from more than 50% of the total board of directors’ meetings held during a financial year. Each Board member is expected to achieve at least 50% attendance of total Board Meetings in any applicable financial year with appropriate leave of absence be notified to the Chairman and/or Company Secretaries, where applicable.
2.5 New Directorships
- All Board members shall notify the Chairman of the Board before accepting any new directorship. The notification shall include an indication of time that will be spent on the new appointment.
- The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company.
- As prescribed under the LR, each Board member must not hold directorships at more than five (5) public listed companies.
2.6 Company Secretary
- The appointment and removal of the Company Secretary is a matter for the Board as a whole.
- The Board recognises the fact that the Company Secretary should be suitability qualified and capable of carrying out the duties required.c)The office of the Company Secretary shall be vacated if the Company Secretary resigns by notice in writing to the Company left at the Registered Office of the Company. Where a Company Secretary gives notice of resignation to the Directors, the Company Secretary shall cease to act as Company Secretary with immediate effect or on the date specified in such notice (as the case may be).
2.7 Board Committee
- As part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions to certain Committees with each operating within its clearly defined terms of reference.
- The Board has established the following Committees to assist the Board in the execution of its duties:
ii)Nomination and Remuneration Committee; and
iii)Share Issuance Scheme Committee
- The roles and responsibilities of above Committees are set out in the terms and reference of each Committee.
- The Chairman of the relevant Board Committees will report to the Board on the key issues deliberated by the Board Committees at the Board meetings.
3. ROLES AND RESPONSIBILITIES OF BOARD
3.1 A Director shall at all times exercise his powers for a proper purpose and in good faith in the best interest of the Company and shall act honestly and use reasonable care, skill and diligence in the discharge of the duties of his office and shall not make use of any information acquired by virtue of his position to gain directly or indirectly an improper advantage for himself or for any other person or to cause detriment to the Company.
3.2 A Director shall at all times avoid conflicts of interest, and shall as soon as practicable after the relevant facts have come to his/her knowledge, declare the nature of his/her interest at a meeting of the directors of the Company. Every Director shall give notice to the Company of such events and matters relating to him/her as may be necessary or expedient to enable the Company and its officers to comply with the requirements of the Companies Act, 1965 (“CA”).
3.3 In line with the MCCG, the Board of Directors has the following key responsibilities :
- Review and approve the annual corporate plan for the Group, which includes the overall corporate strategy, sustainability strategy, business development and marketing plan, human resources plan, IT plan, financial plan, budget, regulatory plan and risk management plan;
- Review and approve strategic initiatives including corporate business restructuring or streamlining and strategic alliances;
- Oversee the conduct of the Group’s businesses to evaluate whether the businesses are being properly managed;
- To ensure that the Company has appropriate corporate governance structures in place including standards of ethical behaviour and promoting a culture of corporate responsibility;
- Identify principal risks and ensure the implementation of appropriate systems to manage these risks;
- Approve the nomination, selection, succession policies, and remuneration packages for the Board members, Board Committee members, Nominee Directors on the functional Boards of the subsidiaries and the Principal Officers, and the annual manpower budget for the Group, including managing succession planning, appointing, training, fixing the compensation of, and where appropriate replacing senior management or key management personnel;
- Approve the appointment, resignation or removal of Company Secretaries of the Company;
- Develop and implement an “investor relations program me” or “shareholder communications policy”for the Group;
- Review the adequacy and integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines (including the securities laws, CA, and LR);
- Review and approve the Financial Statements encompassing annual audited accounts and quarterly reports, dividend policy, credit facilities from financial institutions and guarantees;
- Review and approve the Audit Committee Report and Statement of Risk Management and Internal Control for the Annual Report;
- Prepare a Corporate Governance Statement on compliance with the MCCG for the Annual Report;
- Review and approve investment policies and guidelines for the Company’s surplus funds, asset allocation policy and policy on exposure limits on investment with banking institutions;
- Review and approve the capital expenditure, purchase of fixed assets, operating expenditure, variation order and any other matters in accordance with the Authority Limits Document;
- Approve the appointment of external auditors and their related audit fees; and
- Initiate a Board self-evaluation program and follow-up action to deal withissues arising and arrange for directors to attend courses, seminars and participate in development programs as the Board judges appropriate.
3.4 The following are matters which are specifically reserved for the Board :
- approval of corporate plans and programmes;
- approval of annual budgets, including major capital commitments;
- approval of new ventures;
- approval of material acquisitions and disposals of undertakings and properties; and
- changes to the management and control structure within the Company and its subsidiaries (“the Group”), including key policies, delegated authority limits.
3.5 The Directors have individual and independent access to the advice and dedicated support services of the Company Secretary in ensuring the effective functioning of the Board. The Directors may seek advice from the management on issues under their respective purview. The Directors may also interact directly with, or request further explanation, information or updates, on any aspect of the Company’s operations or business concerns from the management.
3.6 In addition, the Board may seek independent professional advice at the Company’s expense on specific issues to enable the Board to discharge its duties in relation to the matters being deliberated. Individual Directors may also obtain independent professional or other advice in furtherance of their duties, subject to approval by the Chairman or the Board, depending on the quantum of the fees involved.
4. CHAIRMAN OF THE BOARD
4.1 The Board shall appoint one (1) person from amongstits members as the Chairman of Board and the elected Chairman must be Independent Non-Executive Director.
4.2 The Chairman leads the Board with a keen focus on governance and compliance. His roles/responsibilities include, inter alia:
- to provide leadership of the Board;
- to overseeing the Board in effective discharge of its fiduciary duties.
- to promote constructive and respectful relations between Board members and between the Board and Management;
- to lead and ensure efficient and effective conduct of the Board’s meetings;
- to brief all the directors in relation to issues arising at meetings;
- to schedule regular and effective evaluations ofthe Board’s performance; and
- to commit time necessary to discharge effectively his role as Chairman.
5. SEPARATION OF FUNCTIONS BETWEEN THE CHAIRMAN AND MANAGING DIRECTOR
5.1 The roles of the Chairman and Managing Directorof the Company are distinct. The distinct and separate roles of the Chairman and Managing Director, with a clear division of responsibilities, ensurea balance of power and authority, such that no one individual has unfettered powers of decision-making.
5.2 Managing Director is the highest ranking officer across the Group. He is responsible for the day-to-day business of the Group, within the authorities as delegated by the Board. The primary job tasks for the Managing Director are as follows:
- Strategy development, monitoring and tracking;
- Business development;
- Performance management;
- Human resources management;
- Risk management; and
- Stakeholder management.
6. ROLE OF NON-EXECUTIVE DIRECTORS / INDEPENDENT NON-EXECUTIVE DIRECTOR
6.1 Non-Executive Directors are persons of calibre, credibility and have the necessary skill and experience to bring an independent judgement to bear on the issues of strategy, performance and resources, including key appointments and standards of conduct.
6.2 Independent Non-Executive 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.
6.3 The role of the Non-Executive Directors / Independent Non-Executive Directors is to constructively challenge and help develop proposals on strategy include, inter alia:
- to make an independent assessment of the information, reports or statements, having regard to the directors’ knowledge, experience and competence, to provide an 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.
7. SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
7.1 The Board shall appoint amongst its members a Senior Independent Non-Executive Director to act as an additional safeguard and to serve as a fallback point of contact for investors and shareholders when the normal channel of communication is considered to be inappropriate or inadequate.
7.2 The Senior Independent Non-Executive Director shall have specific responsibilities which include, to:
- Serve as a designated contact for consultation and direct communication with shareholders on areas that cannot be resolved through normal channels of contact with the Chairman or Managing Director;
- Serve as the principal conduit between the Independent Directors and the Chairman on sensitive issues;
- Receive report(s) made by employees or external parties for the purpose of whistle blowing in the form as prescribed under the Whistle Blowing Policy of the Group, and thereafter submit the same to the Audit Committee Chairman with an opinion as to whether the report is frivolous or vexatious based on alleged facts;
- Ensure all Independent Directors have the opportunity to provide 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; and
- Consult with the Chairman regarding Board meeting schedules to ensure Independent Directors can perform their duties responsibly and with sufficient time for discussion of all agenda items.
8. BOARD PROCESSES
8.1 Board Meetings
- The Board shall meet at least four (4)times in a financial year, although additional meetings may be called at any time at the Chairman’s discretion.
- The quorum of Board meeting is two (2)members, present in person, majority of members present must be Independent Non-Executive Directors.
- Proceedings of all meetings are minuted and signed by the Chairman of the meeting. Minutes of all Board meetings are circulated to the directors and approved by the Board at the subsequent meeting.
- Actions on all matters arising from any meeting are reported at the following meeting.
- The Board may invite external parties such as auditors (both internal and/orexternal auditors), solicitors or consultants as and when the need arises. Suchinvited parties may attend part or all of the Board Meeting at the discretion of the Board.
- Any Director who has a direct or deemed interest in the subject matter to be deliberated abstains from deliberation and voting on the same during the meeting.
- In the event the elected Chairman is not able to attend a meeting, a member of the Board shall be nominated as Chairman for the meeting. The nominated Chairman shall be an Independent Non-Executive Director.
- The Board meeting may be held and conducted through the telephone or any communication equipment which allows all persons participating in the meeting to hear each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in a quorum accordingly.
- A resolution in writing, signed by a majority of the directors present in Malaysia for the time being entitled to receive notice of a meeting of the Board, shall be as valid and effectual as if it had been passed at a meeting of the directors duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more of the members of the Board. The resolutions are to be recorded in the Company’s minutes book kept by the Company Secretary.
8.2 Notices of Meetings
- Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member no later than seven (7) days before the date of the meeting.
- As a best practice and allow ample time for directors to study and evaluate the matters to be discussed and subsequently make effective decisions, the Board paper and agenda items shall be circulated at least seven (7) days prior to the meeting.
8.3 Access to Information
- The Board should have access to all information pertaining to the Company and advice / services of the Company Secretary and Senior Management staff in the Group in a timely manner for the discharge of its duties effectively.
- The Board may whether as a full Board or in their individual capacity, seek independent professional advice, including the internal and external auditors, at the Company’s expense to enable the directors to discharge their duties with adequate knowledge on the matters being deliberated.
- The Board acknowledges that confidential information received in the course of exercise of the Board duties remains the property of the Group, whether it relates to the Group or another entity. It will not be disclosed unless either the Chairman of the Board has so authorised in writing or disclosure is required by law.
9. DIRECTORS’ TRAINING
9.1 The Directors shall be regularly updated by the Company Secretary, the External Auditors or the Internal Auditors on new statutory, corporate and regulatory developments relating to directors’ duties and responsibilities or the discharge of their duties as directors of the Company.
9.2 The Board should on continuing basis evaluate and determine the training needs of each Director, particularly on relevant new law and regulations and essential practices for effective corporate governance and risk management to enable the Directors to effectively discharge their duties.
10. DIRECTORS’ REMUNERATION
10.1 The remuneration policy of the Company is based on the philosophy of giving higher weight age on performance-related bonuses. These are entrenched in the remuneration policy for Executive Directors, which are reviewed annually by the Nomination and Remuneration Committee. The performance of Directors is measured by the Directors’ contribution and commitment to both the Board and the Company. The Executive Directors’ remuneration will depend on the performance of the Group.
10.2 In the case of Non-Executive Directors, the level of remuneration reflects the contribution and level of responsibilities undertaken by the particular Non-Executive Director.
10.3 The Board will determine the level of remuneration for each board member, taking into consideration the recommendations of the Nomination and Remuneration Committee.
10.4 The Directors shall be paid all their travelling and other expenses properly and necessarily expended by them in and about the business of the Company including their travelling and other expenses incurred in attending board meetings of the Company.
10.5 The Directors concerned shall abstain from voting or discussing their own remuneration.
11. CODE OF CONDUCT AND ETHICS
11.1 The Directors are to maintain the highest degree of integrity and professionalism while at the same time promoting transparency and accountability in their actions.
11.2 The Company has in place “Code of Conduct and Ethics” which is formulated to enhance the standard of corporate governance and behaviour through:
- Establishing standards of ethical conduct for Directors based on acceptable beliefs and values;
- Upholding the spirit of social responsibility and accountability in line with the legislations, regulations and guidelines governing the Group; and
- Documenting and emphasising to the Directors, the integral obligation of each Director in performing his/her duty, toact in a manner that is lawful, honest, ethical and free from any conflict of interest or perceived conflict of interest.
12. WHISTLE BLOWING POLICY
12.1 The Company has in place “Whistle Blowing Policy” to manage improper conduct on the part of the Directors, if any. This policy covers areas from lodging of reports to investigation and corrective actions that are required to be taken.
12.2 Director’s improper conduct is generally described as any conduct by a Director which if proved constitutes a criminal offence or any conduct that constitutes a wrongdoing or malpractice and may include any of the following:
- The breach of any law, regulation or rule that is applicable to the Company. For example, a breach of insider trading laws;
- Any criminal act, including criminal breach of trust, extortion and sabotage;
- Any act that is likely to cause significant financial loss or costs to the Company including any intentional misrepresentation of the Company’s financial statements;
- Any other action that would cause significant harm to the Company or to any person(s); and
- The deliberate concealment of information concerning any of the matters listed above.
12.3 The Board has overall responsibility for this policy and shall oversee the implementation of this policy.
13. RELATIONSHIP WITH SHAREHOLDERS
13.1 The Board will maintain an effective communications policy that enables both the Board and Management to communicate effectively with shareholders and the general public.
13.2 The Board will ensure that the General Meetings of the Company are conducted in an efficient manner and serve as a mode in shareholders communications. These include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the General Meetings.
14. REVIEW OF BOARD CHARTER
14.1 The Board Charter shall be reviewed by the Board annually to ensure its relevance inassisting the Board to discharge its duties with the changes in the corporate laws and regulations that may arise from time to time and to remain consistent with the Board’s objectives and responsibilities.
The primary objective of the Audit Committee are :
- to establish a documented, formal and transparent procedure to assists the Board in fulfilling its fiduciary responsibilities relating to corporate accounting, financial reporting practices, system of risk management and internal control, the audit process and the process of monitoring compliance with laws and regulations;
- to provide greater transparency on the audit functions by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the management; and
- to maintain open communication through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and financial management.
- The members of Audit Committee shall be appointed by the Board from amongst the Directors of the Company and shall comprise of at least three (3) members, all of whom must be Non-Executive Directors, with a majority of them being independent. The Board shall at all the times ensure that at least one (1) member of the Audit Committee:
i) must be a member of the Malaysian Institute of Accountants (“MIA”); or
ii) if he is not a member of the MIA, he must have at least three (3) years’ working experience and:
a) passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
b) must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or
iii) fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.
- The Audit Committee shall elect a Chairman from among its members and the elected Chairman shall be an Independent Director.
- No alternate director shall be appointed as a member of the Audit Committee.
- The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board annually to determine whether the members have carried out their duties in accordance with their terms of reference.
- All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.
- If a member of the Audit Committee resigns or for any other reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board shall, within three (3) months from the date of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members.
- The Audit Committee is authorised by the Board to investigate any matter within the Audit Committee’s terms of reference. It shall have full and unrestricted access to any information pertaining to the Group and shall have the resources it requires to perform its duties. All employees of the Group are required to comply with the requests made by the Audit Committee.
- The Audit Committee is authorised by the Board to obtain external legal or independent professional advice and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary, the expenses of which will be borne by the Company.
- The Audit Committee shall have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity.
- The Audit Committee shall be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary, in order to enable the Audit Committee and the external auditors or the internal auditors or both, to discuss problems and reservations and any other matter the external auditors or internal auditorsmay wish to bring up to the attention of the Audit Committee.
- The Internal Auditors report directly to the Audit Committee and shall have direct access to the Chairman of the Audit Committee on all matters of control and audit. All proposals by management regarding the appointment, transfer and removal of senior staff members of the Internal Audit of the Group shall require prior approval of the Audit Committee. The Audit Committee is also authorised by the Board to obtain information on any resignation of internal audit staff members and provide the staff member an opportunity to submit his reasons for resigning.
4. DUTIES AND RESPONSIBILITIES
In fulfilling its primary objectives, the Audit Committee shall undertakes, amongst others, the following duties and responsibilities :
(a) Financial Reporting
To review the quarterly and annual financial statements of the Group prepared by the management, where necessary, together with the external auditor, focusing particularly on:
- Any significant changes to accounting policies and practices;
- significant matters highlighted including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed;
- Significant adjustments arising from the audit;
- Compliance with accounting standards and other legal requirements; and
- Going concern assumption.
(b) Risk Management and Internal Control
- To consider the effectiveness of the internal control system and risk management framework adopted within the Group and to be satisfied that the methodology employed allows identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to mitigatelosses and maximize opportunities;
- To assess processes and procedures to ensure compliance with all laws, rules and regulations, directives and guidelines established by the relevant regulatory bodies; iii)To ensure that the system of internal control is soundly conceived and in place, effectively administered and regularly monitored;
- To cause reviews to be made of the extent of compliance with established internal policies, standards, plans and procedures;
- To obtain assurance that proper plans for control have been developed prior to the commencement of major areas of change within the Group;
- To recommend to the Board steps to improve the system of internal control derived from the findings of the internal and external auditors and from the consultations of the Audit Committee itself; and
- To report to the Board of Directors any suspected frauds or irregularities, serious internal control deficiencies or suspected infringement of laws, rules and regulations which come to its attention and are of sufficient importance to warrant the attention of the Board.
(c) Internal Audit Function
- To review the effectiveness of internal audit function, including the ability, competency and qualification of the internal audit team and/or outsourced internal auditors (if any) to perform its duties;
- To review the adequacy of the scope, functions competency and resources, and that it has the necessary authority to carry out its work;
- To review and approve the internal audit plan and the internal audit report and, where necessary, ensure that appropriate actions are taken on the recommendations madeby the internal audit function;
- To receive and review on a regular basis the reports, findings and recommendations of the internal audit team and/or outsourced internal auditors and to ensure that appropriate actions have been taken to implement the audit recommendations;
- To ensure the internal audit team and/or outsourced internal auditors has full, free and unrestricted access to all activities, records, property and personnel necessary to perform its duties;
- To review any matters concerning the employment or appointment (and re-appointment) of the in-house and/or the outsourced internal auditors (as the case may be) and the reasons for resignation or termination of either party; and
- To request and review any special audit which the Committee deems necessary.
(d) External Audit
- To review the external auditors’ audit plan, nature and scope of the audit plan, audit report, evaluation of internal controls and co-ordination of the external auditors;
- To review the annual performance assessment, including the suitability and independence of the external auditors and make recommendations to the Board, the appointment or re-appointment of the external auditors;
- In assess or determine the suitability and independence of the external auditors, the Audit Committee shall take into consideration of the following :
• the adequacy of the experience and resources of the external auditors; ? the external auditor’s ability to meet deadlines in providing services and responding to issues in a timely manner as contemplated in the external audit plan;
• the nature of the non-audit services provided by the external auditor and fees paid for such services relative to the audit fee; and
• whether there are safeguards in place to ensure that there is no threat to the objectivity and independence of the audit arising from the provision of non-audit services or tenure of the external auditor.
- To review any matters arising concerning the appointment and re-appointment, audit fee and any questions of resignation or dismissal of the external auditors;
- To review the external auditor’s audit report, and management letter and management’s response to the management letter;
- To be advised of significant use of the external auditors in performing non-audit services within the Group, considering both the types of services rendered and the fees, such that their position as auditors are not deemed to be compromised;
- To review the external auditors’ findings arising from audits, particularly any comments and responses in audit recommendations as well as the assistance given by the employees of the Group in order to be satisfied that appropriate action is being taken; and
- To review with the external auditors for the Statement on Risk Management and Internal Control of the Group for inclusion in the Annual Report.
(e) Related Party Transactions/ Conflict of Interest Situations
To review any related party transactions and conflict of interest situations that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity.
(f) Audit Reports
To prepare the annual Audit Committee report to the Board which includes the composition of the Audit Committee, its terms of reference, number of meetings held, a summary of its activities and the existence of internal audit services and summary of the activities for inclusion in the Annual Report and to review the Board’s statements on compliance with the Malaysian Code of Corporate Governance for inclusion in the Annual Report.
(g) Other matters
- To verify the allocation of options pursuant to the Share Issuance Scheme or the allocation of shares pursuant to any incentive plan for employees of the Group at the end of each financial years as being in compliance with the criteria which is disclosed to the employees and make a statement in the Annual Report that such allocation has been verified;
- To exercise its powers and carry out its responsibilities as my be required from time to time under the Whistle blower Policy of the Group; and
- To carry out any other function that may be mutually agreed upon by the Audit Committee and the Board.
5. MEETINGS OF THE COMMITTEE
The Audit Committee shall meet at least four (4) times in a financial year, although additional meetings may be called at any time at the Audit Committee Chairman’s discretion. Other than in circumstances which the Chairman of the Audit Committee considers inappropriate, the Executive Directors, Group Accountants, the representatives of the internal auditors and external auditors will attend any meeting of the Audit Committee to make known their views on any matter under consideration by the Audit Committee or which in their opinion, should be brought to the attention of the Audit Committee. Other Board members, employees and external professional advisers shall attend any particular meetings upon invitation by the Audit Committee. Where necessary, the Audit Committee shall meet with the external auditors without the present of any Executive Directors and members of the managemet.
In the event the elected Chairman is not able to attend a meeting, a member of the Audit Committee shall be nominated as Chairman for the meeting. The nominated Chairman shall be an Independent Non-Executive Director.
Subject to the notice and quorum requirements as provided in the Terms of Reference, meeting of the Audit Committee may be held and conducted through the telephone or any communication equipment which allows all persons participating in the meeting to hear each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in a quorum accordingly.
The quorum for a meeting of the Audit Committee shall consist of not less than two (2) members, majority of members present must be Independent Non-Executive Directors.
7. NOTICE OF MEETINGS
Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the committee, any other person required to attend and all other non-executive directors, no later than seven (7) days before the date of the meeting. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.
8.SECRETARY AND MINUTES
The Company Secretary or his nominee or such other persons authorised by the Board shall act as the Secretary of the Audit Committee. The Company Secretary shall record, prepare and circulate the minutes of the meetings of the Audit Committee and ensure that the minutes are properly kept and produced for inspection if required. The Audit Committee shall report to the Board and the minutes of each meeting shall be tabled to the Board for notation.
9. CIRCULAR RESOLUTION
A resolution in writing, signed by a majority of the Audit Committee members present in Malaysia for the time being entitled to receive notice of a meeting of the Audit Committee, shall be as valid and effectual as if it had been passed at a meeting of the Audit Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more of the members of the Audit Committee.
10. REVISION AND UPDATES
This Terms of Reference will be reviewed and updated at least once a year to ensure it remains consistent with the Audit Committee’s objectives and responsibilities.
The principle of this code is based on principles in relation to sincerity, integrity, responsibility and corporate social responsibility
This Code of Conduct and Ethicsis formulated to enhance the standard of corporate governance and corporate behavi our with the intention of achieving the following aims:
- To establish a standard of ethical behaviour for directors based on trustworthiness and values that can be accepted, are held or upheld by any one person.
- To uphold the spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating a company.
In the context of this code, a company director means any person who holds the position of director in a corporation irrespective of any designation used, including anyone who follows the directives and advice of a corporate director and who usually takes action, as well as an in-turn or substitute director. A director also includes both executive and non-executive directors as well as executive and non-executive chairpersons.
(4) CODE OF CONDUCT AND ETHICS
In the performance of his duties, a director should at all times observe the following codes:
4.1 Corporate Governance
- Should have a clear understanding of the aims and purpose, capabilities and capacity of the company;
- Should devote time and effort to attend meetings and to know what is required of the board and each of its directors, and to discharge those functions;
- Should ensure at all times that the company is properly managed and effectively controlled;
- Should insist on being kept informed on all matters of importance to the company in order to be effective in corporate management;
- Should stay abreast of the affairs of the company and be kept informed of the company’s compliance with the relevant legislation and contractual requirements;
- Should limit his directorship of companies to a number in which he can best devote his time and effectiveness; each director is his own judge of his abilities and how best to manage his time effectively in the company in which he holds directorship;
- Should have access to the advice and services of the company secretary, who is responsible to the board to ensure proper procedures, rules and regulations are complied with;
- Should at all times exercise his powers for the purposes they were conferred, for the benefit and prosperity of the company;
- Should disclose immediately all contractual interests whether directly or indirectly with the company;
- Should neither divert to his own advantage any business opportunity that the company is pursuing, nor may he use confidential information obtained by reason of his office for his own advantage or that of others;
- Should at all times act with utmost good faith towards the company in any transaction and to act honestly and responsibly in the exercise of his powers in discharging his duties; and
- Should be willing to exercise independent judgment and, if necessary, openly oppose if the vital interest of the company is at stake.
4.2 Relationship with Shareholders, Employees, Creditors and Customers
- Should be conscious of the interest of shareholders, employees, creditors and customers of the company;
- Should at all times promote professionalism and improve the competency of management and employees;
- Should ensure adequate safety measures and provide proper protection to workers and employees at the workplace; and
- Should protect employee from reprisal for whistle blowing.
4.3 Social Responsibilities and the Environment
- Should ensure the effective use of natural resources, and improve quality of life by promoting corporate social responsibilities;
- Should adopt an objective and positive attitude and give the utmost cooperation for the common good when dealing with government authorities or regulatory bodies;
- Should be more proactive to the needs of the community and to assist in society-related programmes in line with the aspirations of the concept of “Caring Society”;
- Should ensure that the activities and the operations of the company do not harm the interest and well-being of society at large and assist in the fight against inflation; and
- Should ensure that necessary steps are taken in accordance with the law to properly wind-up or strike off the company register if the company has not commenced business or has ceased to carry on business and is not likely to commence business in the future or resume business as the case may be.
The primary objective of the Nominating and Remuneration Committee (“Committee”) are :
- to establish a documented, formal and transparent procedure to support and advise the Board of Directors (“Board”) in fulfilling their responsibilities to shareholders in ensuring the Board are comprised of individuals with an optimal mix of qualifications, skills and experience; and
- to establish a documented, formal and transparent procedure for assessing and reviewing the remuneration packages of Executive Directors, Non-Executive Director and Principal Officers that link rewards to corporate and individual performance.
The members of the Committee shall be appointed by the Board from amongst the Directors of the Company and shall comprise of at least two (2) members, all of whom must be Non-Executive Directors, with a majority of them being independent.
The Committee shall elect a Chairman from among its members and the elected Chairman shall be an Independent Non-Executive Director.
No alternate director shall be appointed as a member of the Committee. The term of office and performance of the Committee and each of its members shall be reviewed by the Board annually to determine whether the members have carried out their duties in accordance with their terms of reference.
If a member of the Committee resigns or for any other reason ceases to be a member with the result that the number of members is reduced to below two (2), the Board shall, within three (3) months from the date of that event, appoint such number of new members as may be required to make up the minimum number of two(2) members.
- The Committee is authorised to seek any information it requires from management of the Company in order to perform its duties.
- The Committee is authorised to call for any appropriate person or person to be in attendance to make presentations or furnish or provide independent advice on any matters within the scope of responsibilities.
- The Committee is authorised by the Board to obtain, at the Company’s expense, external legal or other professional advice on any matters within its terms of reference.
4. DUTIES AND RESPONSIBILITIES
In fulfilling its primary objectives, the Committee shall undertakes, amongst others, the following duties and responsibilities :
- The Committee shall undertake an annual review of the Board’s succession plans, taking into consideration, the present size, structure and composition of the Board and Board Committees as well as the required mix of skills, experience and competency required and make recommendations to the Board with regard to any adjustments that are deemed necessary;
- The Committee has to facilitate the evaluate the effectiveness of the Board as a whole, the various Committees and each individual Director’s contribution to the effectiveness on the decision making process of the Board;
- The Committee shall give full consideration to succession planning for Directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the company, and the skills and expertise needed on the Board in the future;
- The Committee shall be responsible for identifying and make recommendation to the Board on new candidates for election / appointment to the Board or to fill board vacancies as and when they arise;
- The Committee shall ensure that orientation and education programmes are provided for new members of the Board;
- The Committee shall recommend to the Board concerning the re-election/re-appointment of Director to the Board pursuant to the provisions in the Company’s Article of Association;
- In determining the process for the identification of suitable candidates, the Committee will ensure that an appropriate review is undertaken to ensure the requirement and qualification of the candidate nominated based on a prescribed set of criteria comprising but not limited to the following :
a) Skills, knowledge, expertise and experience;
d) Existing number of directorships held;
e) Confirmation of not being an undischarged bankrupt or involved in any court proceedings in connection with the promotion, formation or management of a corporation or involving fraud or dishonesty punishable on conviction with imprisonment or subject to any investigation by any regulatory authority under any legislation; and
f) In the case of candidates being considered for the position of independent director, such potential candidates have the ability to discharge such responsibilities/functions as expected from independent non-executive directors. Amongst others, the potential candidates must fulfil the criteria used in the definition of “independent directors” prescribed by the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and being able to bring independent and objective judgement to the Board.Where required, the members of the Committee would meet up with potential candidates for the position of director to conduct an assessment of the suitability.(Note: The Group practices non-discrimination in any form whether based on age, gender, ethnicity or religion throughout the organisation and this includes the selection of directors).
- The Committee shall undertake an annual review of the training programmes attended by the Directors for each financial year as well as the training programmes required to aid the Directors in the discharge of their duties as Directors and to keep abreast with industry developments and trends;
- The Committee shall review and recommend to the Board the framework of remuneration of the Executive Directors and Principal Officers, taking into account the performance of the individual, the inflation price index and information from independent sources on the rates of salary for similar jobs in selected group of comparable companies;
- The Committee shall review and determine the annual salary increment, performance bonus, and short term/long term incentives (including share grant and bonus) for Executive Directors and Principal Officers depending on various performance measurements of the Group;
- The Committee shall review and determine the other benefits in kind for the Executive Directors and Principal Officers;
- The Committee shall review the Group’s compensation policy and ensure alignment of compensation to corporate performance, and compensation offered in line with market practice;
- The Committee may recommend the engagement of external professional advisors to assist and/or advise the Committee and the Board, on remuneration matters, where necessary; and
- The Committee shall provide a report summarising its activities for the year in compliance with the Malaysia Corporate Governance Code, Listing Requirements and any relevant regulations. The report can be incorporated into the corporate governance statement in the annual report or included as a separate report.** Subject to shareholders’ approval in the general meeting, the Board as a whole determines the level of remuneration of the Non-Executive Director of the Company. The review of the remuneration of the Non-Executive Director should take into consideration fee levels and trends for similar positions in the market, time commitment required from the director and any additional responsibilities undertaken such as a director acting as chairman of a board committee or as the senior independent non-executive director.The individuals concerned should abstain from discussion of their own remuneration.
5. MEETINGS OF THE COMMITTEE
The Committee shall meet at least once a year and as frequently as may be required.
In the event the elected Chairman is not able to attend a meeting, a member of the Committee shall be nominated as Chairman for the meeting. The nominated Chairman shall be an Independent Non-Executive Director.
Subject to the notice and quorum requirements as provided in the Terms of Reference, meeting of the Committee may be held and conducted through the telephone or any communication equipment which allows all persons participating in the meeting to hear each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote and be counted in a quorum accordingly.
The quorum for a meeting of the Committee shall consist of not less than two (2) members, majority of members present must be Independent Non-Executive Directors.
7.NOTICE OF MEETINGS
Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the committee, any other person required to attend and all other non-executive directors, no later than seven (7) days before the date of the meeting. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.
8.SECRETARY AND MINUTES
The Company Secretary or his nominee or such other persons authorised by the Board shall act as the Secretary of the Committee. The Company Secretary shall record, prepare and circulate the minutes of the meetings of the Committee and ensure that the minutes are properly kept and produced for inspection if required.
9. CIRCULAR RESOLUTION
A resolution in writing, signed by a majority of the Committee members present in Malaysia for the time being entitled to receive notice of a meeting of the Committee, shall be as valid and effectual as if it had been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more of the members of the Committee.
10.REVISION AND UPDATES
This Terms of Reference will be reviewed and updated at least once a year to ensure it remains consistent with the Committee’s objectives and responsibilities.
The Board of Directors (“the Board”) of Anzo Holdings Berhad (formerly known as Harvest Court Industries Berhad)(“the Company”) is committed to achieving and maintaining the highest standard of work ethics in the conduct of business in line with the code of conduct & ethics and good corporate governance practices, the Company and its subsidiaries (“the Group”) encourage its employees to report suspected and/or known misconduct, wrongdoings, corruption and instances of fraud, waste, and/or abuse involving the resources of the Group.
This policy is to provide an avenue for all employees of the Group and members of the public to disclose any improper conduct in accordance with the procedures as provided for under this policy and to provide protection for employees and members of the public who report such allegations.
The policy is designed to support to the following:
- Be committed to the Company’s business ethics of Honesty, Integrity and Transparency;
- To provide a transparent and confidential process for all parties to give information on non-compliances to the Code of Ethics and Conduct, or any misconduct regardless of his or her position, to an independent party to investigate the allegations and take the appropriate actions; and
- To uphold the moral duty being a Company by protecting the interest of all its stakeholders.
DEFINITION OF REPORTED MISCONDUCT
An improper conduct is any act or omission, which if proven, will constitute an act of misconduct pursuant to the Group’s Code of Conduct and Ethics and/or a criminal offence under the relevant law in force and may be divided into the following categories:
1. General Misconduct
- use of vulgar or abusive language/behaviour against fellow colleagues or a superior or any person having business with the Company;
- intentional insubordination or disobedience whether alone or on combination with others to any lawful and reasonable instructions of a superior or those acting under the instruction of a superior, which the employee is required to follow;
- intentional slow-down of work and/or influence others to do so or conduct that is disrupting other colleagues;
- threatening or use of violence and or oppression against another employee or persons having dealings with the Company;
- use of Company’s property or facilities for purposes of committing or attempting or preparing to commit a misconduct; and
- sexual harassment by or any person(s) employed is strictly prohibited. The provisions contained in the “Code of Practice on the Prevention and Eradication of Sexual Harassment in the Workplace” issued by the Malaysia Ministry of Human Resource are to be observed.
2. Unlawful/ Illegal Conduct/Intention
- Fraudulent case;
- Dishonesty, corruption, bribery, blackmail;
- Failure to comply with any legal/regulatory obligation;
- Breach of law, rules and regulation; and
- Cheating, theft and corruption.
3. Unprocedural Conduct/Act
Actions/conduct which violates clearly communicated procedures that governing operations of the Company and such procedures are important for good governance and breaching may expose the Company to risk of loss or actual loss.
4. Conflict of Interest
- All employees are not allowed by knowingly place him/herself in a position conflict with the interest/ statutory duties in the Company and shall at all time, avoid being caught in situation of conflict of interest;
- Employees has to ensure that their personal financial circumstances and transactions do not jeopardise their independent judgement or adversely affect their job performance; and
- Employees must not have any direct or indirect involvement in other employment (remunerated or otherwise) except otherwise agreed by the management.
5. Unethical Conduct
- Caused damage to the environment;
- Religious or racial or sexual discrimination;
- Serious non-professional or non-ethical behavior; and
- Caused danger to the health and safety of any individual.
The above list is not exhaustive and includes any act or omissions, which if proven, will constitute an act of misconduct under the Company’s Code of Conduct and Ethics or any criminal offence under relevant legislations in force.
CONFIDENTIALITY AND ANONYMITY
All whistle blowing reports are treated as confidential and or anonymous and not to reveal the blower’s identity, if so wish. However, such consultation will not take place in the event the disclosure of identity is required by law. The whistle-blower is to be given an assurance that his/her identity will be only known be a few top management on a need to know basis and the outcome of the investigation will be fed back to the whistle-blower. This is to encourage and give confidence to the whistle-blower that the complaint will be investigated.
All whistle blowing reports have to be made in good faith with reasonable belief that the information and allegation is true and not frivolously/ maliciously and not for personal gain; otherwise, disciplinary action may be taken against an employee whistle-blower.
PROTECTION TO WHISTLE-BLOWER
This policy provides assurance that the whistle-blower, if an employee of the Company, shall be protected against reprisals or retaliation, and immunity from disciplinary action from the whistle-blower’s immediate supervisor or department/division head or any other person exercising power or authority over the whistle-blower in his/her employment, provided that:
- only genuine concerns are reported, and the report is madein good faith with a reasonable belief that the information and any allegation in it are substantially true, and the whistle-blower does not provide false or misleading information knowingly, negligently or recklessly in the report;
- the disclosure is not made with malicious intent or ill will;
- the disclosure is not frivolous or vexatious; and
- the report is not made for personal gain or agenda.
We trust that every whistle-blower must conduct themselves with high integrity and responsibility. To establish a sound relationship of trust, individuals who make disclosures are encouraged to identify themselves and their contact (phone number/email). This is especially so when more detail information is required. Whenever necessary, the whistle-blower may be required to stand as a witness for the Company for the appropriate disciplinary action to be effective.
All information received will be treated with strictest confidentiality.
1. For Employees to Make Reports
- Any concern should be reported to the immediate supervisor. However, if it is not possible or appropriate to do so, the concern should then be reported to the Group Managing Director.
- Any concern that deemed not appropriate to be reported in accordance to para 1(a) above should be raised to the attention of the Chairman.
- Upon receipt of the concern, the Group Managing Director or the Chairman (depending on who is the recipient of the reporting) shall set up an investigating team to conduct investigation on the issue/concern raised.
- The progress of the investigation shall be reported to the Group Managing Director or the Chairman
- Upon completion of the investigation, the Investigators shall submit their full report together with recommendation to the Group Managing Director or the Chairman.
- Actions mandated shall be carried out accordingly.
- If the whistle blower is not satisfied with the way the concern/matter is dealt with, he/she can escalate the report to the Audit Committee Chairman. The Audit Committee will deliberate the matter reported and decide on the appropriate action.
2. For Stakeholders to Make Reports
Stakeholders, who have suspected fraud, misconduct or any integrity concerns, are encouraged to fill up a Whistle Blowing Report Form as attached and email to:
Attention: Datuk Chai Woon Chet
Designation : Group Managing Director