The Board Charter is a charter of the Board of Directors (“the Board”) of ARK Resources
Holdings Berhad (“ARHB” or “the Company”).
The Board is accountable to ARHB’s Members for the corporate governance and
performance of the ARHB Group and is also committed to achieving the highest standards of
business integrity, ethics and professionalism across the ARHB Group’s activities.
The Company would ensure that its Board Charter and other relevant documents as
required under Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(“Bursa Securities” or “the Exchange”) (“MMLR”) or recommended under the MCCG are
made available and easily accessible by its shareholders and stakeholders at ARHB’s
website at http://www.ark-resources.com.my/.
The Board Charter sets out the principal role of the Board, the demarcation of the roles,
functions, responsibilities and power of the Board and various Board Committees of the
Company.
This Charter further defines the specific responsibilities of the Board, in order to enhance
coordination and communication between the Senior Management and Board and more
specifically, to clarify the accountability of both the Board and Management for the benefit of
the Company and its shareholders.
In addition, it will assist the Board in the assessment of its own performance and of its
individual Directors.
(a) Directors’ Assessment/Board Evaluation
The Board recognises the importance of assessing the effectiveness of individual Directors,
the Board as a whole and its Committees. The Board shall review and evaluate its own
performance and the performance of its Committees on an annual basis.
(b) Roles of the Board
The Board oversees the business and affairs of the Company and will assume, amongst others, the following duties and responsibilities:
- together with senior management, promote good corporate governance culture within the Company which reinforces ethical, prudent and professional behaviour;
- reviewing, challenge and decide on management’s proposals for the Group and monitor its implementation by management;
- ensure that the overall strategic plans and direction of the Group supports long-term
value creation and includes strategies on economic, environmental and social
considerations underpinning sustainability;
- overseeing and evaluating the conduct and performance of the Company and Group;
- ensure there is a sound framework for internal controls and risk management;
- identifying the principal risks of the Company’s business and ensuring
implementation of a proper risk management system;
- set the risk appetite within which the board expects management to operate and
ensure that there is an appropriate risk management framework to identify, analyse,
evaluate, manage and monitor significant financial and non-financial risks;
- establishing a succession plan;
- overseeing the development and implementation of a shareholder communication
policy for the Company;
- reviewing the adequacy and the integrity of the management information and internal
controls system of the Company;
- ensure that the Company’s corporate disclosure are in compliance with the
disclosure requirements as set out in the MMLR; and
- ensure the Company has effective, transparent and regular communication with its
stakeholders to enable them to make informed decisions with respect to the business
of the Group, its policies on governance, the environment and social responsibility.
(c) Policy and Strategies
The following matters shall be reserved the Board’s for determination and/or approval (save
to the extent that the Board resolves that determination and/or approval of any such matter
shall be delegated to the Committees of the Board or Management):
- corporate plans and programmes;
- annual budgets, including major capital commitments;
- new ventures;
- material acquisitions and disposals of undertakings and properties;
- changes to the management and control structure within the Company and its
subsidiaries, including key policies
(d) Powers delegated to Management
The Board shall delegate to the Group Managing Director, the authority and power to
manage the Company and its businesses within levels of authority specified by the Board
from time to time. Group Managing Director may delegate aspects of his or her authority and
power but remains accountable to the Board for the Company’s performance and is required
to report regularly to the Board on the progress being made by the Company’s business
units.
(e) Roles of Chairman and Group Managing Director
The Board will ensure that its Chairman is a non-executive member of the Board. The roles
of the Chairman and Group Managing Director are distinct and separated to ensure a
balance of power and authority.
The Chairman is responsible for the overall leadership and efficient functioning of the Board.
The key roles of the Chairman, amongst others, are as follows:
- ensure that the Board functions effectively, cohesively and independently of
Management
- leading the Board in establishing and monitoring good corporate governance
practices in the Company and Group
- leading the Board, including presiding over Board meetings and Company meetings
and directing Board discussions to effectively address the critical issues facing the
Company, in addition to encouraging active participation from Board members
- promoting constructive and respectful relationship between board members and
between board members and management
- ensure that there are effective communication between the Company and/or Group
and its shareholders and relevant stakeholders
The Group Managing Director is responsible to the Board for the day-to-day management of
the Company and its subsidiaries (“the Group”). The Board gives direction and exercises
judgement in setting the Company’s objectives and overseeing their implementation. The
key roles of the Group Managing Director, amongst others, are as follows:
- developing the strategic direction of the Group
- ensure that the Company and/or the Group’s business is properly and efficiently
managed by ensuring that the executive team implements the policies and strategies
adopted by the Board and its Committees
- ensuring an effective management team below the level of the Managing Director
and to develop an active succession plan
- ensure that the objectives and standards of performance are understood by the
Management and employees
- ensure that the operational planning and control systems are in place
- monitoring performance results against plans
- taking remedial action, where necessary
(f) Board Committees
The Board may from time to time establish committees as is considered appropriate to assist
in carrying out its duties and responsibilities. The Board delegates certain functions to the
following committees with specific terms of reference as set out in the respective Appendices
to assist in the execution of its responsibilities:
- Audit Committee (Appendix B)
- Nomination Committee (Appendix C)
- Remuneration Committee (Appendix D)
The committees shall operate under clearly defined terms of reference. The committees are
authorised by the Board to deal with and to deliberate on matters delegated to them within
their terms of reference. The Chairman of the respective committee reports to the Board on
the outcome of the committee meetings and the minutes will be included in the Board
Papers for Board’s notification.
(g) Board Meetings
The Board shall schedule at least four (4) quarterly meetings annually. However, Special
Meetings may be convened as required.
The Notice of Board Meeting, full agenda and the comprehensive meeting materials shall be
circulated to all Board Members at least 5 business days in advance. Directors are expected
to review in advance any such materials in order to facilitate meaningful deliberation during
each meeting.
(h) Directors’ Remuneration
The Company shall provide a fair and reasonable, competitive, remuneration for its
executive directors to ensure that the Company attracts and retains high calibre executive
directors who have the skills, experience and knowledge to increase entity value to the
benefit of all shareholders.
The non-executive Directors will receive a fixed base fee, not by a commission or on
percentage of profits/turnover, as consideration for their Board duties. The aggregate
amount of directors’ fees to be paid to non-executive directors is subject to the approval of
the shareholders at a General Meeting.
(i) Directors’ Training and Continuing Education Programme
In addition to the Mandatory Accreditation Programme as required by the Bursa Malaysia
Securities Berhad, the Directors shall continue to update their knowledge and enhance their
skills through appropriate continuing education programmes. This will enable Directors to
effectively discharge duties and sustain active participation in the Board deliberations.
The Board will assess the training needs of the Directors from time to time and will ensure
Directors have access to continuing education programme.
(j) Internal Controls System and Risk Management Framework
The Board ensures that there is an ongoing process for identifying and managing
significant risks faced by the Group. The Board believes that maintaining a sound
system of internal control is based on a clear understanding and appreciation of the
following key elements:-
- Determining the Company’s level of risk tolerance and activity identified, assessing
and monitoring the key business risks to safeguard shareholders’ investments and
the Company’s assets;
- Commitment to articulate, implement and review the Company’s internal control
systems; and
- Periodic testing of the effectiveness and efficiency of the internal controls procedures
and processes to be conducted to ensure that the system is viable and robust.
The Board should ensure that the Management has carried out a risk assessment review
on the Company’s and Group’s operations, which covers all aspects of the business
activities. The risk profiles including its tolerance level thereof, and risk registers are
reported by the Management to the Audit Committee on an annual basis. The Chairman
of the Audit Committee reports the significant risks and control issues to the Board for its
consideration.
Enhancement to System of Internal Control
The scope of activities of the Internal Audit Function include the following:-
- Review and appraise the soundness, adequacy and application of the system of
internal controls and recommend improvements thereon;
- Ascertain the extent of compliance with established policies, procedures and
statutory requirements;
- Appraise the reliability, integrity and usefulness of financial and management
information developed;
- Review the controls for safeguarding assets and as appropriate, verify the existence
of assets; and
- Indentify ways and opportunities to improve the effectiveness and efficiency of the
operations and processes of the Group.
The adequacy and effectiveness of the internal control is assessed by adopting a
systematic approach in reviewing the Group’s business and operational control, risk
management and governance process.
Internal Audit Function
The Group has been outsourcing the Internal Audit Function to an internal audit firm to
undertake regular and systematic reviews of the system of controls. The Audit
Committee should ensure that the Internal Audit Function is carried out in accordance
with a recognised framework and able to function independently.
The Audit Committee should also ensure that the system of internal control as
established by the Management is reviewed by the internal auditors to assess the
adequacy of such internal control system in relation to the objectives and make
appropriate recommendations for improvement. The Management shall carry out at least
one cycle of internal audit for each financial year under review, and findings from the
internal audit shall be communicated to the Audit Committee for review and
endorsement.
The Audit Committee considers the report from the Internal Audit Function and
Management responses, before reporting and making recommendations to the Board in
strengthening the risk management and internal control systems.
(k) Financial Reporting
The Company aims to present a clear and balanced assessment of the Company’s financial
position and prospects for its financial statements and quarterly announcements to the
shareholders, including other price sensitive public reports and reports submitted to
regulators.
The Board will ensure that the financial statements are prepared in accordance with the
Companies Act and the applicable approved accounting standards set out by the Malaysian
Accounting Standards Board so as to present a true and fair view of the state of affairs of the
Group.
COMPANY SECRETARY
The Board appoints the Company Secretary who plays an important advisory role and
ensure that the Company Secretary fulfils its function for which he/she has been appointed.
The Company Secretary is a central source of information and advice to the Board and its
Committees on issues relating to compliance with laws, rules, procedures and regulations
affecting the Company and Group. The Company Secretary should monitor corporate
governance developments and assist the board in applying governance practices to meet
the board’s needs and stakeholders’ expectations.
The Company Secretary shall be of a senior position with adequate authority and shall report
directly to the Board. A suitably qualified Company Secretary possess the knowledge and
experience to carry out his functions. These may include knowledge in company and
securities law, finance, governance, company secretaryship and other areas of compliance
such as listing requirements. The Company Secretary should undertake continuous
professional development.
The appointment and removal of the Company Secretary will be subjected to the approval of
the Board.
The Company Secretaries carry out the following tasks:
- Attend and ensure proper conduct and procedures at all Board Meetings, Board
Committee Meetings, Annual General Meeting (“AGM”), Extraordinary General
Meeting (“EGM”) and any other meetings that require the attendance of Company
Secretary and ensure that meetings are properly convened;
- Ensure that the quarterly financial results, audited financial statements, annual reports,
circulars, etc and all relevant announcements are announced to Bursa Malaysia and
Securities Commission on a timely basis;
- Ensure that deliberations at the meetings are well captured and minuted, and
subsequently communicated to the relevant Management personnel for necessary
actions;
- Ensure that the Company complies with the Main Market Listing Requirements and the
requirements of the relevant authorities;
- Inform and keep the Board updated of the latest enhancement in corporate
governance, changes in the legal and regulatory framework, new statutory
requirements and best practices;
- Keep the Directors and principal officers informed of the closed period for trading in the
Company’s shares; and
- Ensure proper record and maintenance of the Company’s proceedings, resolutions,
statutory records, register books and documents.
GENERAL MEETINGS
General Meetings are important avenues for shareholders to exercise their ownership rights.
The Board shall facilitate the exercise of these rights and take reasonable steps to
encourage the shareholders’ participation at general meetings, by serving notices for
meetings as required by law and regulation. The Board shall disclose all relevant information
to the shareholders to enable them to exercise their rights by attending the general meetings
and vote in the appropriate manner.
With effect from 15 August 2018, all resolutions set out in the notice of any general
meetings, or in any notice of resolution which may properly be moved and is intended to be
moved at any general meeting, will be carried out by poll voting. The Board will make an
announcement of the detailed results showing the number of votes cast for and against each
resolution (together with the percentage) and the name of scrutineer who validate the votes
cast at the general meetings.
Moreover, the notice for an Annual General Meeting will be given to the shareholders at
least 28 days prior to the meeting to facilitate greater shareholders participation.
CONFIDENTIALITY AND DISCLOSURE OF INTEREST
The Directors are required to act in the best interests of the Company. The Directors also
have a duty of confidentiality in relation to the Company’s confidential information.
A Director should disclose to the Board:
- any material personal interest they have in a matter which relates to the affairs of the
Company; and
- any other interest (direct or indirect) which the Director believes is appropriate to disclose
in order to avoid any conflict of interest or the perception of a conflict of interest.
The disclosure should be made as soon as practicable after the Director becomes aware of
their interest. Details of the disclosure must be recorded in the minutes of the meeting at
which the disclosure is made or the meeting held following the disclosure.
INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Company is committed to ensure that shareholders are well-informed of all major
developments affecting the state of affairs of the Company. To achieve this, the Company
has implemented amongst others, the following:
- timely release of announcements and disclosures to Bursa Malaysia Securities
Berhad, which include quarterly financial results, material contract and any other
material information that may affect the investors’ decision making;
- conducts regular dialogues with financial analysts as a means of effective
communication that enables the Board and Management to convey information
relating to the Company’s performance, corporate strategy and other matters
affecting shareholders’ interests;
- press conference which is normally held after the Annual General
Meeting/Extraordinary General Meeting to provide the media an opportunity to
receive an update from the Board on the proceedings at the meetings and to address
any queries from the media;
- encourage full participation of shareholders at all Annual General Meetings to ensure
a high level of accountability and discussion of the Company’s strategy and goals.
The Company will also invite the external auditor to attend the Annual General
Meeting and be available to answer shareholders’ questions about the conduct of the
audit and the preparation and content of the auditor’s report; and
- publish a summary of all key matters discussed at the annual general meeting on the
Company’s website as soon as practicable after the conclusion of the annual general
meeting pursuant to the MMLR.
In addition, all Directors shall attend the general meeting and allows shareholders to raise
questions and concerns directly to the Chair of the Audit Committee, Nomination Committee,
Remuneration Committee or any other directors to provide meaningful response to questions
addressed to them
Shareholders can gain access to information about the Company including the summary of
the Group’s investor relation activities and media releases through the Company’s website,
www.ark-resources.com.my.
WHISTLE BLOWING POLICY
The Company encourages all employees and stakeholders to report any improper conduct
on the part of employees, management, directors and vendors in particular with respect of
their obligation to the Company’s interest.
The Whistle Blowing Policy is provided under
Appendix E and is made available for
reference on the Company’s website,
www.ark-resources.com.my.
CODE OF ETHICS AND CONDUCT
The Directors are expected to conduct themselves with the highest ethical standards. All
Directors and employees are expected to behave ethically and professionally at all times and
thereby protect and promote the reputation and performance of the Company.
The Group communicates the Code to all Directors and employees upon their
appointment/employment and is deemed to be part of the Terms and Conditions of Service.
The Code of Ethics as per Appendix F has been adopted by the Board on 18 April 2017 and
is made available for reference on the Company’s website,
www.ark-resources.com.my.
REVIEW OF BOARD CHARTER
The Board Charter will be reviewed by the Board, with Nomination Committee’s
recommendation, annually and updated in accordance with the needs of the Company and
any new regulations that may have an impact on the discharge of the Board’s
responsibilities.
The Board Charter is made available for reference in the Company’s website at
www.ark-resources.com.my.