WONG ENGINEERING CORPORATION BERHAD BOARD CHARTER

1. Preamble
The enhancement of corporate governance standards is vital towards achieving the objectives
of transparency, accountability and effective performance for Wong Engineering Corporation
Berhad (“the Company”) and its Group of companies (“the Group”). It is with the aim of
enshrining concepts of good governance as promulgated in the Malaysian Code on Corporate
Governance (“the Code”) that this Board Charter (“Charter”) is established.

The Charter serves as a reference point for Board activities should not be construed as a
blueprint for Board operations. Just as each organisation has its own corporate culture, the
dynamics of each Board in unique. The dynamics shift as the composition of the Board changes,
and the directors of Wong Engineering Corporation Berhad “(the Company”) should always be
open to new opportunities and ready to confront new challenges brought about by change.
This Charter is designed to provide guidance and clarity for directors and management with
regard to the role of the Board and its committees, the requirements of directors in carrying out
their role and in discharging their duties towards the company as well as the Board’s operating
practices.

2. Interpretation

2.1 In this Charter:
“Board” means the Board of directors of the Company;

“Business” means the business of the Company;

“Chairman” means the chairman of the Board and is used in a gender neutral sense;

“Company Secretary” means the Board secretary (ies) or the person(s) normally
exercising the functions of a Board secretary;

“Management” means the management personnel of the Company;

“Shareholders” means the shareholders of the Company;

“CEO” means the Chief Executive Officer of the Company;

“Independent Director” (THIS WILL HAVE TO BE AMENDED TO BE IN LINE WITH
PRACTICE NOTE 13/2002 OF THE BURSA MALAYSIA) is defined in accordance to
Paragraph 1.01 of the Listing Requirement. An independent director is a director who is
independent of management and free from any business or other relationship which
could interests of an applicant or the Company. Without limiting the generality of the
foregoing, an independent director is one who:-

a) in not an executive director of the Company or any related corporation of the
Company;

b) has not been within the last two (2) years and is not an officer (except as
independent director) of the Company or related corporation of the Company. For
this purpose, “officer” shall have the meaning given in section 4 of the Companies
Act 1965;

c) is not a major shareholder of the Company, or any related corporation of the
Company. Major shareholder shall carry the same meaning as that prescribed under
Paragraph 1.01 of the KLSE Listing Requirements;

d) is not a relative of any executive director, officer or major shareholder of the
Company or its related corporation. For this purpose, “relative” means the spouse,
parent, brother, sister, child (including adopted or step child) and the spouse of such
brother, sister or child;

e) is not acting as a nominee or representative of any executive director or major
shareholder of the company or any of its related corporation;

f) is not engaged as a professional adviser by the Company or any of its related
corporation either personally or through a firm or company of which he is a partner,
director or major shareholder, as the case may be; or

g) has not within the last two years and does not engage in any transaction with the
Company or its related corporation, whether by himself or with other persons or
through a firm of which he is a partner, director or major shareholder, as the case
may be, the value of which exceeds RM250,00.

“Listing Requirements” means the KLSE Listing Requirements.

3. Role of the Board

3.1 Stewardship of business
The group is under the effective stewardship of the Board of directors that provides the
group with business and operational direction and objective to enhance long-term
shareholder value.

3.2 Formal schedule of matters for its decision
The Board is to meet regularly with notices of issues to be discussed and record its
conclusion in discharging its duties and responsibilities. The Board should meet at least 4
times a year and the details of attendances of each individual director in respect of such
meetings held would be disclosed.

The Board should have a formal schedule of matters specifically reserved to it for decision
to ensure the direction and control of the company is firmly in its hands.

Subject to the applicable laws and Bursa Malaysia Securities Berhad (“Bursa Malaysia”)
Main Market Listing Requirements, the Board reserves full decision-making powers on
the following matters:
a) Review, approve and adopt the Company’s strategic plans and annual budgets;
b) Declaration of dividends, approval of financial statements, accounts and quarterly
reports of the Company;
c) Conflict of interest issues relating to a substantial shareholder or a Director;
d) Material acquisitions, divestment or disposition of assets not in the ordinary course
of business;
e) Material investments in capital projects;
f) Risk management and internal control policies;
g) Increase or reduction of subsidiary’s issued capital;
h) Any corporate restructuring not covered by the above-mentioned paragraphs;
i) The change of name of the Company or any of its subsidiary companies and the
establishment of any new subsidiary company;
j) Succession planning; and
k) Implementation of Shareholders’ Communication Policy.

3.3 The principal responsibilities of the Board as adopted from the Code

The Board should explicitly assume the following six specific responsibilities, which
facilitate the discharge of the Board’s stewardship responsibilities:
• Reviewing and adopting a strategic plan for the company;
• Overseeing the conduct of the company’s business to evaluate whether the business
is being properly managed;
• Identifying principal risks and ensure the implementation of appropriate system to
manage these risks;
• Succession planning. Including appointing, training, fixing the compensation of and
where appropriate, replacing senior management;
• Developing and implementing an investor relations programme or shareholder
communication policy for the company;
• Reviewing the adequacy and the integrity of the company’s internal control systems
and management information systems, including systems for compliance with
applicable laws, regulations, rules, directives and guidelines; and
• The board should undertake an assessment of its independent directors annually.

4. Board Structure
There should be a clearly accepted division of responsibilities at the head of the company,
which will ensure a balance of power and authority, such as no individual has absolute power of
decision.

The positions of chairman and CEO should be held by different individuals, and the chairman
must be a non-executive member of the board. Where roles are combined, there should be a
strong independent element on the Board. A decision to combine the roles of chairman and
CEO should be publicly explained. The number of Board members are to be in accordance to the
Company’s Constitution.

4.1 Board Balance and Mix

The Board recognizes that board diversity, comprising a balance of skills, experience, age,
cultural background and gender, is an essential element contributing to the sustainable
development of the Company. Appointment of Directors shall take into account not only
the skills, knowledge, experience, attributes and core competencies, but also the
character, expertise, professionalism, integrity and the Directors’ industry standing.

The Board should include a balance of executive directors and non-executive directors
(including independent non-executive directors) such that no individual or small group of
individuals can dominate Board’s decision making. To be effective, independent nonexecutive
directors need to make up at least one third of the membership of the Board.

Non-executive directors should be persons of calibre, credibility and have the necessary
skill and experience to bring an independent judgment to bear on the issues of strategy,
performance and resources including key appointments and standards of conduct.

The Board should identify a senior independent non-executive director of the Board in
the annual report to whom concerns may be conveyed.

The Board is of the opinion that there is no need for a formal gender diversity policy as
the Group is committed to provide fair and equal opportunities and nurturing diversity
within the Group. Evaluation of suitability of any candidate is based on the nonexhaustive
criteria as stipulated above to ensure that the candidate bring value and expertise to the Board.

4.2 Role of the chairman
In respect of the running of the Board, Chairman is primarily responsible for the
following:-
• the working of the Board;
• the balance of membership, subject to Board and shareholder approval;
• ensuring that all relevant issues are on the agenda;
• ensuring that all directors, executive and non-executive alike, are enabled and
encouraged to play their full part in its activities. This includes making certain that
directors, especially non-executive directors receive timely, relevant information
tailored to their needs and that they are properly briefed on issues arising at Board
meeting; and
• ensuring that executive directors look beyond their executive function and accept
their full share of responsibilities of governance.

4.3 Role of the Chief Executive Officer (CEO)
• To manage the business and implement policies and strategies adopted by the
Board;
• The Board, together with the CEO, should develop position descriptions for the
Board and for CEO, Involving definition of limits to management’s responsibilities;
and
• In addition, the Board should approve, or develop with CEO, the corporate
objectives, which the CEO is responsible for meeting.

4.4 Frequency of meetings
Meetings shall be held at least five (5) times a year.

5. Tenure of Directors
The Company’s Constitution provide that at the first Annual General Meeting of the company,
all the directors shall retire from office, and at the Annual General Meeting in every subsequent
year, one third of the directors for the time being, or of their number is not three (3) or a
multiple of three, then the number nearest one third shall retire from office. An election of
directors shall take place each year and all the directors shall retire from office at least in each
three (3) years but shall be eligible for re-election.

The company secretaries will ensure that all necessary information is obtained, as well as all
legal and regulatory obligations are met before the appointments are made.

The tenure of an independent director should not exceed a cumulative term of nine years
starting from the time the individual is first appointed as an independent director of a company.

Upon completion of the nine years, an independent director may continue to serve on the
board subject to the director’s re-designation as a non-independent director. The board must
justify and seek shareholders’ approval at the nearest AGM before the director reaches the nine
year term limit in the event it retains as an independent director who has served in that
capacity for more than nine years. If the Board continues to retain the independent director
after 12 years, the Board shall provide justification and seek annual shareholders’ approval
through a two-tier voting process.

Failure to seek shareholders’ approval for the extension of the tenure of any independent
director prior to the nine year term limit must be explained in the annual report. Shareholders’
approval should be sought annually after the nine year term limit.

The tenure of the Executive Director is tied to their executive office.

6. Company Secretary
Directors should appoint as secretary someone who is capable of carrying out the duties to
which the post entails and their removal should be a matter for the Board as a whole. The
Board should recognize that the chairman is entitled to the strong and positive support of the
company secretary in ensuring the effective functioning of the Board.

The company secretary’s key roles are as follows:-
• to ensure that Board procedures are followed regularly and are reviewed.
• to administer, attend and prepare minutes of the Board proceedings.
• to serve as a candidate for undertaking an advisory role in relation to the Board in respect
of compliance issues.
• to play a crucial role in encouraging compliance with law.
• to give guidance to the Board on what their responsibilities are under the rules and
regulations to which they are subject and how those responsibilities should be
discharged.
• to give advice that concerns all laws and regulations, routine filing requirements and
other administrative requirements of the Constitution.
• to monitor governance developments and assist the Board in applying governance
practices to meet the Board’s needs and shareholders’ expectations.

Every director also has unhindered access to the advice and services of the company
secretaries. The Board believes that the current company secretaries are capable of carrying out
their duties to ensure the effective functioning of the Board.

7. Board Committees
Where the Board appoints a committee, it should spell out the authority of the committee, and
in particular, whether the committee has the authority to act on behalf on the Board or simply
has the authority to examine a particular issue and report back to the Board with a
recommendation.

7.1 Audit Committee
• Membership
a) The Board should establish an audit committee of at least three directors, a
majority of whom are independent, with written terms of reference which deal
clearly with its authority and duties.
b) The chairman of the audit committee should be an independent non-executive
director.

• Objectives
An independent audit committee serves to implement and support the oversight
functions of the Board in several ways.
a) to review the company’s processes for producing financial data, its internal
controls, and the independence of the company’s external auditor, and a forum
for dialogue with the company’s external and internal auditors.
b) reinforces the independence of the company’s external auditor, and thereby
helps assure that the auditor will have free rein in the audit process. This
reinforcement is achieved in part by conferring, on an organ that is independent
of the management whose financials results are being audited, a vital role in the
retention, discharge, and compensation of the external auditor.
c) provides a forum for regular, informal and private discussion between the
external auditor and directors who have no significant relationships with
management. The provision of an institutionalized forum facilitates and indeed
encourages the external auditor to raise potentially troublesome issues at a
relatively early stage, allows the auditor to broach sensitive problems in an
uninhibited and private fashion, and gives the auditor assurance that it can
readily get a hearing in the event of disagreement with management
d) reinforces the objectivity of the internal auditing department. A working
relationship with an audit committee can increase the status and effectiveness
of the internal auditing department

• Duties
The duties of the audit committee should include the followinga)
to consider the appointment of the external auditor, the audit fee and any
questions of resignation or dismissal;
b) to discuss with the external auditor before the audit commences, the nature
and scope of the audit, and ensure co-ordination where more than one audit
firm is involved;
c) to review the quarterly and year-end financial statements of the company,
focusing particularly on:-
1) any changes in accounting policies and practices;

2) significant adjustments arising from the audit;

3) the going concern assumption;

4) compliance with accounting standards and other legal requirement.

d) to 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);
e) to review the external auditor’s management letter and management’s
response;
f) to do the following where an internal audit function exists:-
1) review the adequacy of the scope, functions and resources of the internal
audit functions, and that is has the necessary authority to carry out its
work;
2) review the internal audit programme and results of the internal audit
process and where necessary ensure that appropriate action is taken on
the recommendations of the internal audit function;
3) approve any appointment or termination of senior staff members of the
internal function;
4) inform itself of resignations of internal staff members and provide the
resigning staff member an opportunity to submit his reasons for resigning
g) to consider any related party transactions that may arise within the company or
group;
h) to consider the major findings of internal investigation and management’s
response;
i) The audit committee must have explicit authority to investigate any matter
within its terms of reference, the resources which it needs to do so and full
access to information. The committee should be able to obtain external
professional advice and to invite outsiders with relevant experience to attend if
necessary.
j) The audit committee should meet regularly, with due notice of issues to be
discussed and should record its conclusions in discharging its duties and
responsibilities.

• Frequency of meetings
Meetings shall be held at least five (5) times a year.
• Secretary
The secretary of the company shall be secretary of the committee.

• Internal Audit
a) The finance director, the head of internal audit (where such a function exists)
and a representative of the external auditors shall normally attend meetings.
Other Board members may attend meetings once a year and the committee
shall meet with the external auditors without executive board members
present.

b) The Board should disclose in an informative way, details of activities of audit
committees, the number of audit meetings held a year and details of
attendance of each individual director in respect of meetings.

c) The Board should establish an internal audit function. When an internal audit
function does not exist, the Board should assess whether there are other
means of obtaining sufficient assurance of regular review and/or appraisal of
the effectiveness of the system of internal controls within the company. The Board
should explain, in summary, the means that exist for obtaining such
assurance of regular review and/or appraisal.

d) The internal audit function should be independent of the activities they audit
and should be performed with impartiality, proficiency and due professional
care, The Board or the audit committee should determine the remit of the
internal audit function.

7.2 Nomination Committee
• Membership
a) The membership of the committee shall comprise exclusively of non-executive
directors and number at least three (3) in total.
b) The chairman of the committee shall be a non-executive director appointed by
the Board.
c) The majority of the members of the committee shall comprise independent
directors.
d) The quorum of the committee shall be two(2) members

• Secretary
The secretary of the company shall be secretary of the committee

• Advisers
The committee is authorised by the Board to seek appropriate professional advice
inside and /or outside the group as and when it considers this necessary.

• Duties
The duties of the committee shall be to:
a) Recommend to the Board, candidate for all directorships. In making the
recommendations the committee should also consider candidates proposed by
the managing director and within the bounds of practicability, by any other
senior executive, director or shareholder;
b) Recommend to the Board, directors to fill the seats on Board committees;
c) Review annually the required mix of skills and experience of the Board,
including the core competencies which non-executive directors should bring to
the board; and
d) Assess annually the effectiveness of the Board as a whole, the committees of
the Board and the contribution of each individual director.

• Minutes
The minutes of meeting of the committee shall be circulated to all member s of the
Board.

7.3 Remuneration Committee
• Boards should appoint remuneration committees, consisting wholly or mainly of
non-executive directors, to recommend to the Board the remuneration of the
executive directors in all its forms, drawing from outside advice as necessary.
Executive directors should play no part in decisions on their own remuneration.
Membership of the remuneration committee should appear in the directors’ report.

• The determination of remuneration packages of non-executive directors, including
non-executive chairman should be a matter for the Board as a whole. The individuals
concerned should abstain from discussion of their own remuneration.

• Membership
a) The members of the committee shall comprise wholly or mainly of nonexecutive
directors and number at least 3 in total.
b) The chairman of the committee shall be a non-executive director appointed by
the Board
c) The quorum of the committee shall be at least two (2) members.

• Secretary
The secretary of the company shall be the secretary of the committee.

• Attendance
The group managing director may be invited to attend meetings to discuss the
performance of executive directors and make proposals as necessary.

The committee may appoint external consultant to aid the committee in the
discharge of its duties.

• Frequency of meetings
Meetings shall be held at least two (2) times a year.

• Advisers
The committee is authorised by the Board to seek appropriate professional advice
inside and outside the group as and when it considers this necessary.

• Duties
The duties of the committee shall be to recommend to the Board the remuneration
of the executive directors in all its forms, which may include:
a) Reviewing existing or proposed share option schemes, in conjunction with the
Employee’s Share Option Scheme Committee, if one has already been set up;
b) Reviewing superannuation benefits, if deemed relevant and applicable;
c) Reviewing retirement and termination systems;
d) Considering fringe benefit issues, including benefits-in-kind;
e) Reviewing indemnity and liability insurance policies; and
f) Evaluating and proposing contractual terms in the service contracts of
executive directors.
g) Evaluating different remuneration methods and philosophies as well as
conducting studies of current industry practice.

8. The Board’s Relationship with Shareholders and Stakeholders

Board must maintain an effective communication policy that enables both the Board and
management to communicate effectively with its shareholders, stakeholders and the public
generally. This policy must effectively interpret the operations of the company to the
shareholders and must accommodate feedback from shareholders, which should be factored
into the company’s business decisions.

The channels are:-

1) Dialogue between Companies and Investors
Companies and institutional shareholders should each be ready, where practicable, to enter
into a dialogue based on the mutual understanding of objectives.

2) The AGM
Companies should use the AGM to communicate with private investors and encourage their
participation.

9. Board Processes
9.1 Board Meeting
The directors may meet together for the dispatch of business, adjourn and otherwise
regulate their meetings as they think fit. Any director may at any time and the secretary
shall on the requisition of any directors summon a meeting of the directors.
It shall not be necessary to give any director or alternate director, who has not got an
address in Malaysia, registered with the company, notice of a meeting of the directors.
Unless otherwise determined by the directors from time to time notice of all directors’
meetings shall be given to all directors and their alternates, who have a registered
address in Malaysia, Except in the case of an emergency, notice of each directors’
meeting shall served in the manner referred to in the Company’s Constitution shall apply
mutatis mutandis to the service of notice on members of the company.

The quorum necessary for the transaction of the business of the directors shall be two
and a meeting of the directors for the time being at which a quorum is present shall be
competent to exercise all or any of the powers, authorities and discretions by or under
the Constitution bested in or exercisable by the directors general.

The directors may elect a chairman of their meetings and determine the period for which
he is to hold office and unless otherwise determined the chairman shall be elected; if no
such chairman is elected, or it at any meeting the chairman is not present within ten (10)
minutes after the time appointed for holding the meeting, the directors present may
choose one of their number to be chairman of the meeting.

Subject to the Constitution, any question arising at any meeting of directors shall be
decided by a majority of votes and a determination by a majority of directors shall for all
purposes be deemed a determination of the directors. In case of an equality of votes the
chairman of the only two directors from the quorum is excluded from voting on the
question at issue.

9.2 Agenda
Careful preparation of the agenda enhances Board productivity, and strengthens its
supervisory role. At every regular Board meeting, directors should:
Discuss emerging issues that could affect the business, such as to:
• Receiving reports from the CEO on operational and performance matters and
strategic issues;
• Debate the need to review the strategic direction and supporting strategies;
• Monitor management’s performance and its explanations for variances;
• Review operations for the previous month, year-to-date, and forecast covering the
remainder of the relevant accounting period;
• Benchmark the group’s and company’s performance against competitors;
• Discuss and approve capital spending sanctions over and above delegated levels.

All these matters should be documented in the Board papers, with discussion focussing
on strategic points of particular interest and concern.
A range of others should be periodically included in the Board agenda, examples of which
are as follows:

A. Corporate planning
 Objectives
 Goals and budgets
 Acquisitions and divestments.
B. Segregation of management disciplines
 Establish and review a register of delegated authorities covering:
 Financial control
 Marketing
 Personnel/Human resources;
 Production;
 Treasure Management.
C. Monitoring budgets
 Compare budgeted to actual results, obtaining explanations for deviations and
adjustments to forecast;
 Review appropriateness and relevant of budgeting and forecasting
methodologies;
 Benchmark results against industry averages and/or best practice;
D. Strategy formulation and planning
 Evaluate corporate strategy, including:
– Diversification;
– Coordination of business segments
– Investment priorities and the allocation of resources across activities;
– Managing the scope and mix of various activities to improve performance.
– Develop/ approve long-term business strategy or scenarios based on the
company’s strategic direction.
E. Formulating and monitoring company policies
 Reinforce values and corporate code of conduct;
 Formulate and monitor policies, including:
– risk management
– delegation of Board authorities;
– quality control measures;
– backup and storage of vital records;
– disaster recovery planning;
– enterprise bargaining;
– environmental policies;
– equal opportunities;
– occupational health and safety
– terms of trade
– treasury systems and controls; and
– ensure these policies are properly documented and communicated to all
relevant personnel
F. Evaluating Management
 Formally evaluate senior management’s performance at least annually;
 Review management skills and qualifications, particularly in high-risk areas of
the business and;
 Consider succession planning for senior executives
G. Reporting controls
 Internally, review management information systems to ensure that both Board
and management are receiving relevant and reliable information; and
 Externally, review existing accounting policies against the appropriate standards,
and review the questionnaire completed by management to ensure that
published financial statements give a true and fair view of the state of affairs of
the group and company and their results and cash flows for the period reported
on.
H. Internal controls; regulatory compliance
 Review regulations affecting the group’s and company’s operations;
 Develop and review systems for monitoring regulatory compliance;
 Review compliance reports prepared by the internal audit function.
I. Internal controls; general accounting
 Evaluate the quality of accounting control systems; and
 Review audit reports, both the external auditors and internal audit function, on
internal accounting controls.
J. Internal controls; internal audit
 Review the scope and depth of coverage of the internal audit function;
 Review and discuss reports from the internal auditors in internal control
recommendations, and confirm that appropriate action has been taken; and
 Ensure that there is effective communication and liaison between the internal
and external functions.
K. Internal controls; external audit
 Review the draft letter of representation requested by the external auditors, and
confirm that the representations have been considered;
 Ensure that issues raised by external auditors have been satisfactorily resolved;
 Review the external auditors’ internal control recommendations. And ensure
appropriate actions has been taken; and
 Review minutes of audit committee meetings.
L. Internal controls; fraud
 Institute sound internal controls that are regularly reviewed by senior
management;
 Develop strategies to cost-0effectively mitigate the assessed risk of fraud;
 Ensure that a fraud risk assessment is undertaken regularly.
M. Funding
 Check key loan repayment dates to ensure the group and company do not
default;
 Invest surpluses appropriately and promptly;
 Ensure any forecast cash flow shortages are addresses;
 Review the group’s and company’s funding requirements on a continuing basis;
and
 Determine that any exchange risk, credit risk and interest rate risk associated
with any funding or replacement are acceptable.
N. Acquisitions, mergers, divestment and takeovers
 Ascertain that assets are appropriately valued, and that the company’s shares
are fairly valued by the market, to reduce susceptibility to takeover; and
 Conduct regular analysis of trading activity in the company’s shares and identify
areas of concern.
O. Reporting systems
 Ensure non-financial regulatory compliance systems are reliable, including:
– Control of dangerous and/or prohibited substances;
– Equal opportunity and anti-discrimination requirements;
– Occupational health and safety; and
– Environmental issues and waste disposal

9.3 Meeting papers
The directors shall cause minutes to be duly entered in books provided for the purpose:-
a) Of all appointment of officer;
b) Of the names of all the directors present at each meeting of the directors and of any
committee of directors and of the company in general meeting;
c) Of all resolutions and proceedings of general meetings and of meetings of the
directors and committees of directors; and
d) Of all orders made by the directors and any committee of directors.
Such minutes shall be signed by the chairman of the meeting at which the proceedings
were held or by the chairman of the next succeeding meeting.
The books containing the minutes of proceedings of any general meeting shall be kept by
the company at the registered office or the principal place of business in Malaysia of the
company, and shall be open to the inspection of any member without charge.

10. Access to Information
Directors should have access to all information within a company whether as a full Board or in
their individual capacity, in furtherance of their duties.
The Board should receive information that is not just historical or bottom line and financial
oriented but information that goes beyond assessing the quantitative performance of the
enterprise and looks at other performance factors such as customer satisfaction, product and
service quality, market share, market reactions, environmental performance and so on, when
dealing with any item on the agenda.

The Chairman of the Board shall undertake primary responsibility for organising information
necessary for the Board to deal with the agenda and for providing this information to directors
on timely basis. If the chairman is also the CEO, the Board should also have in place a procedure
to ensure that its agenda items are placed on the agenda and for providing this information to
directors.

11. Independent Professional Advice
There should be an agreed procedure for directors, whether as a full board or in their individual
capacity, in furtherance of their duties to take independent professional advice at the
company’s expense, if necessary.
All directors should have access to the advice and services of the company secretary.

12. Induction
Best Practice in Induction of Independent Directors

12.1 Objective
To provide independent directors with a rapid and valuable insight into the group and the
company, without making him or her so familiar with their operations that he or she no
longer feels able to ask naïve questions.

12.2 The Programme
Induction of independent directors may include (but not limited to) the following-
• A clear contact and covering letter;
• Time with other executive directors (in particular the chairman, the company
secretary and, if the independent directors is a functional specialist, his or her
counterpart);
• A copy of the previous Board minutes for at least the past six months, with
explanation of the background behind them;
• A copy of the business/strategic plan, together with the profile of key competitors
and their strategies;
• A copy of any significant reports by management consultant on area of Board
responsibilities;
• An opportunity to attend other key management meetings;
• An opportunity to attend presentation to the investment community;
• Visits to key sites (including overseas locations, if the business is strongly
international);
• Introduction to some key customers and suppliers;
• Invitations to company social events; such as sponsored concerts;
• A formal 1-2 day induction programme, including many of the elements above, but
also presentations from various divisions on their strengths, weaknesses and
ambitions;
• Appointment of a mentor, form among the more experienced independent directors
of the Board, for the first few months; and
• A formal personal development plan constructed to address those competencies,
where the individual is relatively weak. For example, he or she could enhance
strategic skills by being assigned to a working party to develop strategic option for
part of the business.

12.3 Induction Needs Analysis
This analysis should be conducted prior to the induction process. This is to identify the
relevant directors and their specific training needs. Various sources of information may
be used to gather information for the analysis including:
• A questionnaire issued to the directors asking them to identify their training needs on
their general knowledge of the group and company. There might be several areas
that directors know they lack knowledge:
• Data from similar industry;
• Company records and data; and
• External consultants and their training programme

12.4 Purpose of an Induction Needs Analysis are:
• Identify the directors involved and their specific needs;
• Identify the induction and training facilitator;
• Set the objective for the induction programme; and
• Decision on the duration, timing and venue for the programme.

13. Directors’ external commitment and conflict of interest

Every director shall comply with the provisions of Sections 131 and 135 of the Act in connection
with the disclosure of his shareholding and interests in the company and his interest in any
contract or proposed contract with the company and in connection with the disclosure, every
director shall state the fact and the nature, character and extent of any office or possession of
any property whereby whether directly or indirectly duties or interest might be created in
conflict with his duty or interest as a director of the company.

14. Representation of the company
Investor’s relation or information officer will be appointed in providing information on the
affairs of the company or making presentation to institution and other investor.
A direct dialogue gives investors a better appreciation of a company’s objectives, its potential
problems and the quality of its management, while also making a company aware of the
expectations and concerns of the shareholder. Two way communications between companies
and institutions is an important aspect of corporate governance because corporate managers
need full information about the assessments of institutions that hold their shares. Two way
communications such as this helps create a more stable shareholding and take a longer term
view of their investment if they have a better understanding of the corporate strategy.
We therefore encourage this relationship provided two issues are properly addressed.
The information which a company provides to an investor should not qualify as undisclosed
material information about the corporation.

Companies should endeavour to ensure that the same opportunity should be available to all
shareholders.

15. The Company’s Constitution and Management’s Limits

15.1 Limitations on directors’ powers
The directors shall not without the prior approval of the company in the general
meeting:-
• Carry into effect any proposal or execute any transaction for the acquisition of an
undertaking or property of a substantial value, or the disposal of a substantial
portion of or a controlling interest in the company’s main undertaking or property;
• Exercise any power of the company to issue shares unless otherwise permitted
under the Act;
• Subject to Section 132E of the Act, enter into any arrangement or transaction with a
director of the company or its holding company to acquire from or dispose to such a
director or person any non-cash assets of the requisite value.

15.2 Managing Director
The directors may from time to time appoint any one or more of their body to be
managing director for such period not exceeding five (5) years subject to reappointment
and upon such terms as they think fit, and may vest in such managing directors as may
appointed by them such of the powers hereby vested in the directors shall be subject to
control of the Board.

The remuneration of a managing director shall be fixed by the directors and may be by
way of salary or commission or participation in profits or otherwise or by any or all of
these modes but shall not include a commission on or percentage of turnover.
A managing director shall not, while he continues to hold that office, be subject to
retirement by rotation, and he shall not be reckoned as a director for the purpose of
determining the rotation or retirement of directors or in fixing the number of directors to
retire, but he shall, subject to the provisions of any contract between him and the
company, be subject to the same provisions as to resignation and removal as the other
directors of the company and if he ceases to hold the office of director for any cause he
shall ipso facto and immediately cease to be a managing director.

15.3 Management’s limits
The Board, together with the CEO, should develop position descriptions for the CEO,
involving definition of the limits to management’s responsibilities.

16. Review of Board Charter
This Board Charter will be reviewed every 2 years to ensure that it continues to reflect the
requirements of the Company to meet its commitment towards good corporate governance
practices and a high performance Board.