Board Charter

INTRODUCTION

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/.

PURPOSE

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.

BOARD COMPOSITION AND BALANCE
(a) Size and Composition
(b) Appointments and Re-election
(c) Independence of Director

An Independent Director is independent of management and free of any business or other relationship that could materially interfere with the exercise of unfettered and independent judgement. The Independent Directors help to ensure that the interest of all shareholders, and not only the interest of a particular group, and that all relevant matters and issues are objectively and impartially considered by the Board. The views and opinions of the Independent Directors shall carry significant weight in the Board’s decision-making process.

If, on any matter discussed at a Board Meeting, any Director holding differing views to those of any other Directors, the Board minutes shall clearly reflect this.

The Board undertakes to assess the independence of its Independent Directors upon appointment, annually and when any new interest or relationship develops.

(d) New Directorship and Time Commitment

Any Director 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.

BOARD PERFORMANCE
(a) Directors’ Assessment/Board Evaluation
(b) Roles of the Board
(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.