Board Charter/ Term of Reference of Committees

Investor’s Relations

1. Purpose

The Charter sets out the authority, responsibilities, membership and operation of the Board of Muda Holdings Berhad (“the Company” or “Muda”).

It must be noted that the roles and responsibilities of the Board will evolve as the Company moves forward. As such, a regular review of the balance of responsibilities is seen to be appropriate to ensure that the division of the function remains appropriate to the need of the Company.

This policy statement is only a summary of the matters reserved to the Board and should therefore only be used as a general guide, which is not to be used in a legal capacity.

2. Role of the Board

  • The Board’s role is to:-
  • Act in the best interest of the Company;
  • Represent and serve the interests of shareholders by guiding and monitoring the Company’s strategies, policies and performance;
  • Set, review and monitor the Company’s value; and
  • Keep shareholders informed of the Company’s performance and major development which affect it.

3. Responsibilities of the Board

The management and control of the business of Muda is vested in the Board. The Board’s primary responsibility is to oversee Muda’s business activities and management for the benefit of Muda’s shareholders. The Board also recognises its responsibilities to Muda’s employees, the environment and communities in which Muda operates and where appropriate, other stakeholders. The Board strives to create shareholder value and ensure that shareholders’ funds are prudently safeguarded.

The key responsibilities of the Board include:-

  1. Development of corporate objectives and strategy with management and approving plans, new investments, divestments, major capital expenditure and operating expenditure and major funding activities proposed by management;
  2. Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all time the state of the health of the Company;
  3. Reviewing and approving the Company’s annual budgets, financial position, system of risk management and internal compliance and control, codes of conduct and legal compliance;
  4. Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control processes are in place and functioning appropriately;
  5. Board and Executive Management development and succession planning;
  6. Delegating appropriate powers to the executive directors and senior management to ensure that the effective day-to-day management of the business and monitoring the exercise of these powers;
  7. Ensuring that the Company and its officers act legally, ethically ad responsibly on all matters;
  8. Promote sustainability through appropriate environmental, social and governance considerations in the Company’s business strategies. Also ensure that the strategic plan of the Company supports long term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability; and
  9. Ensuring corporate accountability to the shareholders primarily through adopting an effective shareholder communication strategy, encouraging effective participation at general meetings and, through the Chairman, being the key interface between the Company and its shareholders.
    The Board may establish other policies and practices to ensure that the Board fulfils its functions and ensuring that it remains an effective decision making body.

4. Delegations

The Board retains all rights and power conferred upon it by the Company’s Articles of Association (“the Constitution”) and by law which cannot be delegated.
The Board may delegate their powers as they consider appropriate. However, ultimate responsibility for strategy and controls rests with the Board.

  • 1 Delegation to Committees

    The Board may from time to time establish committees to assist it in carrying out its responsibilities. Current standing Committees established by the Board are:-• Audit Committee
    • Executive Committee
    • Nominating Committee
    • Remuneration Committee
    • Sustainability Committee

    Each of these Committees has its own terms of reference, setting out its roles and responsibilities, compositions, structure, membership requirements and the manner in which the Committee is to operate. All terms of reference of these Committees are reviewed regularly.
    The Audit Committee comprises of four (4) members who are all Non-Executive Directors, the majority of whom are independent. The Nominating Committee comprises of three (3) members, all of whom are independent and non-executive. The Remuneration Committee comprises of three (3) members, all of whom are independent and non-executive.

  • 2 Delegation to the Managing Director

    The Board may delegate to the Managing Director all those powers and authorities required to manage and control the day to day operation of the Company. The Managing Director is responsible for the attainment of the Company’s goal and vision for the future, in accordance with the strategies, policies, programs and performance requirements approved by the Board. 

  • 3 Powers Reserved to the Board Board or its Committees include the following:-

    • Appointment and removal of Chairman of the Board;
    • Appointment and removal of the Managing Director;
    • Appointment of Directors to fill vacancy or as additional directors;
    • Establishment of Board Committees, their membership, terms of reference and delegated authorities;
    • Approval of dividends and dividend policy;
    • The issue of equity like instruments;
    • Review of corporate governance principles, policies and related public documents;
    • Approval of expenditure in excess of the monetary authority levels delegated to management;
    • Calling of meetings of shareholders;
    • Expansion of the Company’s activities into new geographic areas involving substantial risks or new, non-core an substantive businesses;
    • The remuneration of the Managing Director and Executive Directors;
    • Any changes to the authority delegated to the Managing Director and Executive Directors by the Board; and
    • Any other specific matters nominated by the Board from time to time.

5. Board Structure

The Constitution governs the regulations and proceedings of the Board.

  • 1 Board Composition

    It is intended that one third of the Board should comprise of independent non-executive directors and consists of directors with a broad range of skills, diversity, expertise and experience from a range of backgrounds.

  • 2 Chairman

    The Chairman of the Board need not be an independent director and is responsible for the leadership and management of the Board, ensuring the Board and its committees function effectively and to lead the Board in establishing and monitoring good corporate governance practices in the Company. The positions of Chairman and Managing Director should be held by different individuals.

  • 3 Independence

    The Board regularly reviews the independence of each Non-Executive Directors in the light of information available to this assessment as disclosed by each Non-Executive Director to the Board.
    A Director is considered to be independent for the purpose of service on the Board and the Board Committee if the director satisfies Paragraph 1.01 and Practice Note 13 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Listing Requirements”).

  • 4 Election and Re-election

    The Constitution, the Bursa Listing Requirements and the Companies Act, 2016 governs the election and re-election of Directors.
    New Directors are provided with formal letters setting out the key terms and conditions of their appointment.
    Directors are invited to participate in induction programs and any continuing education arranged for them.

  • 5 Meetings

    The Board is structured to facilitate the effective discharge of its duties and to add value through its deliberations. The Board shall meet at least four (4) times per year to coincide with announcement of quarterly financial results to Bursa Malaysia Securities Berhad and additional meetings will be convened as warranted by circumstances.
    Non-Executive Directors should meet without the presence of the Executive Directors or management with the external auditors at least twice a year.
    The quorum for board meetings shall be two (2) directors.
    The board should have access to all information pertaining to the Company in a timely manner for the discharge of its duties effectively. The agenda and papers for meetings should be circulated to the Directors at least five (5) business days prior to the meeting to enable the Directors to prepare for the meetings and to make an informed decision.
    The Board, through the Nominating Committee, will review the performance of the Directors retiring by rotation and seeking re-election under the Articles of Association each year, the results of which will form the basis of the Board’s recommendation to shareholders at the Annual General Meeting.

6. Senior Independent Non-Executive Director

The Senior Independent Non-Executive Director leads and coordinates the activities of the Independent Directors when necessary and appropriate.
The role of the Senior Independent Non-Executive Directors is to act as:
a sounding board for the Chairman;
an intermediary between the Independent Directors and the Chairman on sensitive issues; and
a designated contact for shareholders and other stakeholder when the normal channel of communication with Chairman or Managing Director is considered to be inappropriate or inadequate.

7. Access to Information

All Directors have access to Company employees, advisers and records. In carrying out their duties and responsibilities, Directors have access to advice and counsel from the Chairman, the Managing Director, the Company Secretaries and Group Financial Controller, and are able to seek independent professional advice at the Company’s expense, after consultation with the Chairman or the Managing Director.

8. Time Commitment

The Directors must devote sufficient time to prepare for and attend board meetings, and maintain a sound understanding of the business of the Company as well as relevant market and regulatory developments. The Directors must not hold more than 5 directorships in listed issuers to ensure that directors do not have competing time commitment that impair their ability to discharge their duties effectively.

9. Performance Evaluation

The Board through the Nominating Committee, will review the performance of the Directors retiring by rotation and seeking re-election under the Constitution each year, the results of which will form the basis of the Board’s recommendation to shareholders at the Annual General Meeting.
The Nominating Committee also assess Board’s effectiveness in the areas of composition, administration, accountability and responsibilities. The Directors’ self and peer assessment is intended to evaluate the mix of skills, experience and other relevant qualities the Directors bring to the Board, and takes into account the individual Director’s ability to exercise independent judgement at all times and to contribute to the effective functioning of the board.

10. Approval and Review of the Charter

The Board shall review the Charter periodically to ensure its relevance and effectiveness.

Terms of Reference


Membership
  1. The Committee shall be appointed by the Board from among their number and shall consist of at least 3 members, a majority of whom are independent and all of whom are non-executive directors.
  2. All members of the Committee should be financially literate and at least one member of the Committee:-
    1. Must be a member of the Malaysian Institute of Accountants; or
    2. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-
      1. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act, 1967; or
      2. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967..
  3. No alternate director shall be appointed a member of the Committee.
  4. No former key audit partner shall be appointed as the member of the Audit Committee until the lapse of at least two years cooling-off period.
  5. The members of the Committee shall select a Chairman from among their number who is an independent director and who is not the Chairman of the Board.
  6. All members of the Committee should undertake continuous professional development to keep themselves abreast of relevant developments in accounting and auditing standards, practices and rules.
  7. If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced below 3, the Board of Director shall, within 3 months of that event, appoint such number of new member as may be required to make up the minimum number of 3 members.
  8. The terms of office and performance of committee members should be reviewed by the Nominating Committee annually.

Authority
  1. The Committee is authorised by the Board to investigate any matter within its terms of reference and shall be given the full resources to perform its duties. The Committee shall have full and unrestricted access to any information pertaining to the Company and its subsidiary companies.
  2. The Committee is authorised by the Board to obtain external professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
  3. The Committee shall have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity.

Functions
  1. The functions of the Committee shall include the following:-
    1. consider the appointment of external auditor, the audit fee and any question of resignation and dismissal;
    2. discuss with the external auditor before the audit commences, the audit plan, nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;
    3. review with the external auditor, his evaluation of the system of internal controls;
    4. access the suitability, objectivity and independence of the external auditors on annual basis
    5. review the quarterly results and year end financial statements, prior to the approval of the Board of Directors, focusing particularly on:-
      • any changes in accounting policies and practices;
      • significant adjustments arising from the audit including financial reporting issues, significant judgments made by management, significant and unusual events or transactions, and how these matters are addressed;
      • compliance with accounting standards and other legal requirements.
    6. discuss problems and reservations arising from the interim and final audits and any matter the auditor may wish to discuss (in the absence of management where necessary);
    7. review the external auditor’s management letter and management’s response;
    8. review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work and to ensure that the head of internal audit function; who shall be responsible for the regular review and or appraisal of the effectiveness of the risk management, internal control, and governance process within the Company; reports directly to the Committee;
    9. review the internal audit program and results of the internal audit process and where necessary ensure that appropriate actions are taken on the recommendations of the internal audit function;
    10. review any appraisal or assessment of the performance of members of the internal audit function;
    11. approve any appointment or termination of senior staff members of the internal audit function;
    12. take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning;
    13. consider any related party transaction and conflict of interest situation that may arise within the Company or the Group;
    14. consider the major findings or internal investigations and management’s response;
    15. review and advise appropriateness of risk management and effectiveness of internal control systems of the Company and the Group based on reports and information made available to the Committee with assistance from the Internal Auditor;
    16. Consider other topics as defined by the Board of Directors;
    17. the Chairman to engage with senior management, the head of internal audit function and external auditors on regular basis to be kept informed of matters affecting the Company and its subsidiaries;
    18. To convene meetings with external auditors, the internal auditors or both, excluding attendance of other directors and employees of the Company, whenever deemed necessary; and
    19. To verify and confirm allocation of options pursuant to the Company’s share option scheme as being in compliance with the criteria set out in the By-Law of the share option scheme.

Meetings
  1. The Committee shall hold at least four (4) meetings per year to review the quarterly results, year end financial statements, audit plan and annual report of the Company and Group, and such additional meetings as the Chairperson shall decide in order to fulfill its duties. In addition, the Chairperson shall call a meeting of the Committee if requested to do so by any Committee member, the management or the internal or external auditor. The Committee may invite any person to be in attendance to assist in its deliberation.
  2. The Committee shall meet with external auditors without presence of executive board members at least twice a year.
  3. A meeting of the Committee shall be called by at least five (5) working days notice in writing or by such shorter notice with the consent of all members concerned.
  4. The Company Secretary shall be the Secretary of the Committee. The Secretary shall be responsible for keeping the minutes of meetings of the Committee and circulate them to the Committee members and to the other Board members.
  5. The quorum for the meeting shall consist of a majority of independent non-executive directors.

Terms of Reference


A

Membership
  1. The Committee shall have at least two (2) members comprising exclusively of non-executive directors of the Company, a majority of whom shall be independent directors
  2. The Senior Independent Director shall be appointed by the Board to be Chairman of the Nominating Committee.
B Secretary The Company Secretary shall act as the Secretary of the Nominating Committee.


C

Quorum

The quorum necessary for the transaction of business shall be two. A duly convened meeting of the Nominating Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers, discretion vested in or exercisable by the Nominating Committee.


D

Meetings
  1. The Nominating Committee shall agree each year the dates on which meetings are to be held that year and may meet at such other times as the Chairman of the Nominating Committee may determine.
  2. Meetings of the Nominating Committee shall be summoned by the Secretary of the Nominating Committee at the request of any member thereof.
  3. The Chief Executive Officer shall attend meetings of the Nominating Committee as required.

E

Minutes of Meeting
  1. The Secretary shall minute the proceedings and resolutions of all Nominating Committee meetings.
  2. The Minutes of the Nominating Committee meetings shall be circulated to all members of the Board after they have been approved by the Committee unless the Chairman of the Nominating Committee deems it inappropriate to do so because of the nature of any matter discussed at a particular meeting.

F

Duties
The Committee shall:–
  1. Review regularly the structure, size and composition of the Board and make recommendations to the Board with regards to any changes that it believes are necessary or desirable.
  2. Assist the Board in annual review of the required mix of skills and experience and other qualities, including core competencies, which Non-Executive Directors should bring to the Board.
  3. Prepare a description of the role and capabilities required for particular Board appointments having regard to the balance of skills, knowledge, expertise and experience of the Board.
  4. Identify and nominate for the approval of the Board suitable candidates to fill vacancies for non-executive positions on the Board as and when they arise.
  5. As part of the process for nominating candidates for appointment, obtain details of and review any interests the candidate may have which conflict or may conflict with the interests of the Company. The Nominating Committee shall consider whether despite of any such conflict, there are nevertheless grounds for recommending the candidate for appointment and for the Board to authorize the relevant conflict. The Nominating Committee shall, as part of any proposal to the Board for appointment, make recommendations as to the conditions on which any conflicts should be authorized.
  6. Review on an annual basis any Board authorization, and conditions applicable to such authorizations, in respect of interests that conflict with those of the Company. Following such review, the Nominating Committee shall make recommendations as to whether such authorizations should continue to stand and, if it is recommended that they should, the conditions that should apply.
  7. Plan for the orderly succession of new directors to the Board by reviewing on a regular basis the Company’s senior management resource and the competencies within that resource relative to the Group’s requirements and particular key Board and non-Board executive appointments.
  8. With the assistance of the Chief Executive and Chairman, identify suitable candidates to fill vacancies for executive positions on the Board and to nominate them for the Board’s approval.
  9. Recommend to the Board the membership and chairmanship of the Audit and Remuneration Committee.
  10. Nominate suitable candidates for the role of senior independent director.
  11. Review and make recommendations to the Board on the re-appointment of non-executive directors at the conclusion of their specified terms of office having given due regard to their performance and ability to continue to contribute to the Board.
  12. Consider and make recommendations to the Board on matters relating to the continuation in office at any time of any Director including the suspension or termination of services of any executive director as an employee of the Company.
  13. Annually carry out the process to assess the effectiveness of the Board as a whole, the committees of the Board and for assessing the contribution of each individual director, including independent non-executive directors, as well as the chief executive officer and to ensure that all assessments and evaluations carried out by the Committee in the discharge of all its functions is properly documented.
  14. Assist the Board in annual assessment of Director’s independence and in the assessment process the Nominating Committee be guided by the provisions of the Listing Requirements of Bursa Malaysia Securities Berhad which stipulates that an independent Director is one who:
    1. Is not an executive director of the Company.
    2. Within the last 2 years has not been employed as an officer (as defined under Section 2 of the Companies Act, 2016) of the Company.
    3. Is not a major shareholder of the Company.
    4. Is not a family member of any executive director, officer or major shareholder of the Company.
    5. Is not acting as a nominee or representative of any executive director or major shareholder.
    6. Within the last two years has not been a professional advisor to the Company and is not a partner, director or major shareholder of a firm or corporation which has provided professional advisory services to the Company.
    7. Within the last two years has not engaged personally in transactions with the Company or is not a partner, director or major shareholder of a firm or corporation which has engaged in transactions with the Company.
  15. Facilitate board induction and annual training programmes for newly appointed directors and for members of the Board respectively.
  16. Take appropriate steps to consider women candidates for Board membership to achieve the gender diversity policy as may be set by the Board from time to time.
  17. To review and recommend to the Board, the term of office and performance of the Audit Committee and each of its members annually to determine whether the Audit Committee and members have carried out their duties in accordance with their terms of reference.

Terms of Reference


Functions
  1. To review and recommend to the Board of Directors the remuneration packages of Executive Directors and senior management, taking into account the demands, complexities and performance of the Company as well as skills and experience required.
  2. To assist the Board in developing and administer a fair and transparent procedure for setting policy on remuneration of directors and senior management to ensure that remuneration packages are determined on the basis of the directors’ and senior management’s merit, qualification and competence, having regard to the Company’s operating results, individual performance and comparable market statistics.
  3. To recommend to the Board of Directors after reviewing management’s proposals:-

    1. overall annual salary increment guidelines/limits of all non-unionised staff;
    2. annual bonus limits/guidelines;
    3. ex-gratia payment for unionised staff;
    4. remuneration, benefits and other terms and conditions of employment, which have to be introduced as part of the Group’s overall human resource development plan. This would include matters such as pegging the Group salaries in line with industry standards and major changes in benefits package.
Membership
  1. The Committee shall have at least three (3) members consisting of non-executive directors and a majority of them must be Independent Directors.


Meetings & Procedures
  1. Meetings are to be held as and when necessary.
  2. The quorum for each meeting shall be two (2) members.
  3. The Remuneration Committee shall decide on its own procedures and administrative arrangements.
  4. The Chief Executive Officer shall attend and make representations at meetings, whenever business is not related to Executive Directors’ remuneration.
  5. Minutes of each meeting shall be kept by the Company Secretary as evidence that the Remuneration Committee has discharged its function.
  6. The Chairman of the Remuneration Committee will report to the Board after each Remuneration Committee Meeting.