BOARD CHARTER

BOARD CHARTER

1. INTRODUCTION

The Board of Directors (“Board”) is accountable and responsible for the performance and affairs of AuMas Resources Berhad (“Company”), including practicing a high level of good governance. All Board members are expected to show good stewardship and act in a professional manner, as well as upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.

2. PURPOSE

This Board Charter sets out the composition, roles, responsibilities and processes of the Board and is to ensure all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members.

This Board Charter would act as a source reference and primary induction literature to provide insights to prospective Board members and senior management. In addition, it will assist the Board in the assessment of its own performance and of its individual Directors.

3. THE BOARD

3.1 Board Membership

3.1.1 Composition

The Board composition consists of a mix of knowledge, skills and expertise to effectively discharge its stewardship responsibilities in spearheading the Group’s growth and future direction.

The Company has complied with Rule 15.02 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, which requires the Board to have at least two (2) directors or one-third (1/3) of the Board are Independent Directors.

The Independent Non-Executive Chairman is responsible for the Board’s effectiveness and standard of conduct whilst the Managing Director/ Chief Executive Officer (“CEO”) have the overall responsibilities to oversee the business and operations. The clear division of responsibilities between these two roles will ensure a balance of power and authority.

All Independent and Non-Executive Directors do not participate in the day-to-day management of the Group. The Independent Non-Executive Directors have a responsibility to bring independent objective judgments to bear on the Board’s decision. The tenure of an Independent Director shall not exceed a cumulative term of 9 years.

The composition and size of the Board are reviewed from time to time to ensure its appropriateness.

3.1.2 Appointments and Re-election of Directors

All appointments of new directors to the Board are properly made with an established and transparent procedure in compliance with the relevant rules and authorities. Any appointment of additional director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix and range of expertise and experience required for an effective Board.

In accordance with the Company’s Articles of Association, at each Annual General Meeting (“AGM”), one-third (1/3) of the Directors for time being, or the number nearest to one-third (1/3) with minimum of one (1), shall retire from office and an election of Directors shall take place provided always that each Director shall retire at least once in every three (3) years but shall be eligible for re-election. A Director retiring at a meeting shall retain office until the close of the meeting whether adjourned or not. An election of Directors shall take place each year.

3.1.2 New Directorship

All Board members shall notify the Chairman of the Board before accepting any new directorship. The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company.

3.2 Board Role

3.2.1 Duties and Responsibilities

The Board duties and responsibilities are as follows:-

Reviewing and adopting strategic plan for the Company;
Overseeing the conduct of the Company’s business to evaluate whether the business is being properly managed;
Identify principal risks and ensure the implementation of appropriate systems to manage these risks;
Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management; and
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.

The Board’s role includes, but not limited to the above. The Board may choose to delegate some of these responsibilities to one or more of its Board Committees. This delegation of responsibilities will be reflected in the terms of reference of the respective Board Committees.

On the formal schedule of matters reserved to the Board, The Key matters reserved for the Board’s approval include business plan, annual budget, dividend policy, business continuity plan, new issuance of securities, business restructuring and disposal and acquisition of assets/investments.

3.3 Chairman and CEO

The Board ensures that its Chairman is a non-executive member of the Board. The role of the Non-Executive Chairman and the CEO is distinct and separate to ensure there is a balance of power and authority. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board, while the CEO has overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions. The CEO is responsible to ensure due execution of strategic goals, effective operation within the Company, and to explain, clarify and inform the Board on matters pertaining to the Company.

The responsibilities of the Chairman are as follows:-

to lead the Board and ensure its effectiveness of all aspects of its role;
to ensure the efficient organization and conduct of the Board’s function and meetings;
to facilitate the effective contribution of all Directors at Board meetings;
to promote constructive and respectful relations between Directors, and between the Board and Management; and
to ensure effective communication with shareholders and relevant stakeholders.

The responsibilities of the CEO are as follows:-

to develop and implement corporate strategies for the Company;
to supervise heads of divisions and departments who are responsible for all functions contributing to the success of the Company;
to ensure the efficiency and effectiveness of the operation for the Company;
to assess business opportunities which are of potential benefit to the Company; and
to bring material and other relevant matters to the attention of the Board in an accurate and timely manner.

3.4 Board Committees

The Board established appropriate Committees to assist in the performance of certain duties of the Board under specific terms of reference. The Committees are as follows:

Audit Committee,
Nominating Committee, and
Remuneration Committee.

The Committees shall operate under defined terms of reference. The Committees are authorized by the Board to deal with and to deliberate on matters delegated to them within their terms of reference, which are available for reference at the Company’s website at http://www.bahvest.com.my. The Chairman of the respective Committees reports to the Board on the outcome of the Committee meetings and such reports or minutes will be included in the Board papers.

3.4.1 Audit Committee

PRIMARY PURPOSES

The Audit Committee shall :

provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accounting and practices for the Company and all its wholly and majority owned subsidiaries (“Group”).
improve the Group’s business efficiency, the quality of the accounting function, the system of internal controls and audit function and strengthen the confidence of the public in the Group’s reported results.
maintain through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as internal auditors.
enhance the independence of both the external and internal auditors functions through active participation in the audit process.
strengthen the role of the independent Directors by giving them a greater depth of knowledge as to the operations of the Company and the Group through their participation in the Committee.
act upon the Board of Directors’ request to investigate and report on any issues or concerns in regard to the management of the Group.

COMPOSITION

The Audit Committee shall be appointed by the directors from amongst themselves which fulfils the following requirements:

1. The Audit Committee must be comprised of no fewer than three (3) members;

2. All Audit Committee members must be non-executive directors, with a majority of them being independent directors;

3. At least one (1) member of the Audit Committee

(i) must be a member of the Malaysian Institute of Accountants; or

(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:

(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(iii) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad (“Bursa Securities”).

4. The Chairman of the Audit Committee shall be an independent director; and

5. The alternate director shall not be a member of the Audit Committee.

AUTHORITY

The Audit Committee was formed under Chapter 15, Part C, Rule 15.09 of the Bursa Securities Listing Requirements for ACE Market (“AMLR”). The Audit Committee shall in accordance with the procedure determined by the Board and at the cost of the Company:-

(a) have explicit authority to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information which it requires in the course of performing its duties;
(d) have unrestricted access to the Chief Executive Officer and the Chief Financial Officer;
(e) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity (if any);
(f) be able to obtain independent/external professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary; and
(g) be able to convene meetings with the external auditors excluding the attendance of the executive members of the Company, whenever deemed necessary.

FUNCTIONS AND DUTIES

The functions of the Audit Committee are as follows:
1. External Audit Function

a) To review with the external auditor the following and report the same to the Board:
1. i) the external audit planning memorandum;
  ii) the evaluation of the Group’s system of internal control; and
  iii) the external audit report;
b) To consider the nomination and recommend the appointment of the external auditor and the agreement of audit fees;
c) To review the scope of audit and the general extent of the external auditor coverage;
d) To review the assistance provided by the Group’s employees to the external auditor and to provide a communication channel between the Board and the external auditor;
e) To monitor the effectiveness of the external auditor’ performance and their independence and objectivity;
f) To review all the significant issues raised by the external auditor during the interim and final audit and management’s responses, including updates on the management’s response to recommendations raised from previous audit;
g) To review any letter of resignation from the external auditor of the Company and investigate on the rationale of resignation;
h) To review whether there is any reason (supported by grounds) to believe that the external auditor is not suitable for reappointment;
i) To review the policies and procedures for assessment of sustainability and Independent of external auditors; and
j) To review the policies and procedures governing the provision of non-audit services by external auditors.

2.Internal Audit Function

a) To ensure the objectivity and independence of the appointed internal auditor and take cognizance of resignation or termination of audit firm;
b) To ensure the adequacy of the scopes, functions, competency and availability of resources and necessary independent authority to carry out its internal audit works;
c) To review internal audit plan and programs, audit processes or investigations undertaken and the result of the internal audit findings;
d) To review the coordination of the external auditor with internal auditor;
e) To review the internal audit report and evaluate the adequacy and effectiveness of the Group’s system of internal control and whether appropriate and prompt remedial actions are taken by the management based on the recommendations; and
f) To ensure major issues raised from the internal audit findings are brought to the Board’s attention and to ensure that the issues are resolved.

3.Financial Reporting Practices

To Review the quarterly results and year end financial statements, prior to the approval by the board of directors, focusing particularly on the following:
3.1) Changes in or implementation of major accounting policy changes;
3.2) Significant matters highlighted including financial reporting issue;
3.3) Significant judgements made by management;
3.4) Significant and unusual events for transaction and how these matters are addressed; and
3.5) Compliance with accounting standard and other legal requirements.

4.Related Party Transaction

To review any any related party transactions and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

5.Annual Reporting to the Board of Director

To prepare annual report to the Board the activities that it has conducted during the financial year.

6.Investigation

To review the Company’s general policies and procedures and act upon any request of the Board to investigate and report on any issues or concerns pertaining to the management of the Group.

RETIREMENT AND RESIGNATION

In the event of any vacancy in the Audit Committee resulting in the noncompliance of sub-Rule 15.09(1) of the AMLR, the Company shall fill in the vacancy within three (3) months.

MEETINGS

The committee shall meet at least four (4) times in a year or more frequently as circumstances required with due notice of issues to be discussed and shall record its conclusions in discharging its duties and responsibilities.
Quorum shall be by majority of the members who are Independent Directors.
Upon the request of any member of the Committee, the external auditors or the internal auditors, the Chairman of the Committee shall convene a meeting of the Committee to consider matters which should be brought to the attention of the directors or shareholders.
The external auditors and internal auditors have the right to appear and be heard at any meeting of the Committee and shall appear before the Committee when required to do so by the Committee.
The Committee may invite any Board member or any member of management or any employee of the Company who the Committee thinks fit to attend its meetings to assist and to provide pertinent information as necessary.
The Company must ensure that other directors and employees attend any particular Audit Committee meeting only at the Audit Committee’s invitation, specific to the relevant meeting.
The Committee shall meet with the external auditors, the internal auditors or both without executive board members present when necessary.

PROCEDURES OF AUDIT COMMITTEE

The Audit Committee may regulate its own procedures, in particular :

(a) the calling of meetings;
(b) the notice to be given of such meetings;
(c) the voting and proceedings of such meetings;
(d) the keeping of minutes; and
(e) the custody, production and inspection of such minutes.

SECRETARY

The Company Secretary or other appropriate senior officer shall be the Secretary to the Audit Committee.

3.4.2 Nominating Committee

Members
The Committee shall be appointed by the Board of Directors which shall comprise exclusively of non-executive directors, the majority of whom shall be independent directors. The Board of Directors must review annually the term of office and performance of the Committee and each of its members to determine whether such Committee and members have carried out their duties in accordance with their terms of reference.
Chairman
The Chairman shall be elected by the Committee from among their members.
Functions
The Committee shall:-
i. recommend to the Board of Directors the nomination of a person or persons to be a Board member(s) by shareholder(s) or Director(s);

ii. recommend to the board, directors to fill the seats on board committees;

iii. assess the effectiveness of the board as a whole, the committees of the board and the contribution of each existing individual director and thereafter, recommend its findings to the board;

iv. review the required mix of skills and experience and other qualities, including core competencies which non-executive directors should bring to the board and thereafter, recommend its findings to the board; and
v. review on annual basis the term of office and performance of the Audit Committee and each of its members.
Structures and Procedures
The Committee should meet regularly, with due notice of issues to be discussed and should record its conclusion in discharging its duties and responsibilities. The quorum shall be 2 members who shall be the independent directors.
The Committee should have a formal schedule of matters specifically reserved to it for decision to ensure that the direction and control of the Committee is firmly in its hands.
Access to Advice
The Committee shall have access to independent professional advice on nomination matters both within the Group and from external professionals at the Company’s expense.

3.4.3 Remuneration Committee

The function of the Remuneration Committee is to recommend to the Board, the remuneration packages of Managing Director and Executive Directors of the Company in all its forms, drawing from outside advice if necessary. The remuneration packages of Non-Executive Directors should be determined by the Board of Directors subject to the shareholders’ approval.

3.5 Processes and procedures for convening Board Meetings

The Board shall conduct at least four (4) meetings annually, with additional
meetings to be convened as and when necessary.

The agenda of the meeting is decided upon focusing on matters that requires Board decision, approval, directions and on items that are truly the Board’s responsibility.

The Secretary shall discuss with the Finance Manager on the agenda item. The final agenda for the meeting would be given to the CEO for his approval and clearance.

Any Director may request for inclusion of any matter in the agenda for a particular Board meeting. The request must be sent 10 days before the meeting for the CEO’s approval.

All Directors will be provided with the performance and progress reports prior to the Board meetings. A full agenda of the meeting and all Board papers, including relevant issues or specific matters, would be distributed to ensure Directors are well informed and have the opportunity to seek additional information, and are able to obtain further clarification from the CEO/Finance Manager, should such a need arise.

Where necessary, the services of other senior management or external consultants will be arranged to brief and help the Directors clear any doubt or concern.

The quorum necessary for the transaction of the business of the Directors shall be two (2) Directors for the time being of the Company.

Questions arising at any meeting shall be determined by a majority of votes. In the case of any equality of votes the Chairman shall have a second or casting vote except where two (2) Directors form a quorum and only such a quorum is present at the meeting or only two (2) Directors are competent to vote on the question at issue.

Directors may participate in a meeting of the Directors by means of a conference telephone or similar electronic tele-communicating equipment by means of which all persons participating in the meeting can hear each other and participates throughout the duration of the communication between the Directors and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

3.6 Directors’ Training & Continuing Education

All Directors have attended and successfully completed the Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad. Every Director will undergo continuous training to equip himself/herself to effectively discharge his/her duties as a director from time to time. The Board encourages the Directors to attend any relevant programmes to further enhance their knowledge to enable them to discharge their responsibility more effectively.

3.7 Financial Reporting

The Board has taken reasonable steps to provide a balanced and comprehensive assessment of the Group’s financial performance and prospects, primarily through the annual report and quarterly financial results. In the preparation of the financial statements, the directors have adopted suitable accounting policies and applied them consistently and made judgements and estimates that are prudent and reasonable.

4. SHAREHOLDER AND INVESTORS RELATION

The Board is committed to ensure that the shareholders and other stakeholders are well informed of major development of the Company and the information is communicated timely to them through the followings:

Annual Report; and
Various disclosures and announcements made to Bursa Malaysia Securities Berhad including the quarterly results and annual results, which are available publicly on the internet via Bursa Malaysia Securities Berhad’s website at htty://www.bursamalaysia.com.

The Group’s Annual General Meeting (AGM) is an important forum where communications with the shareholders are effectively conducted. Shareholders will be notified of the meeting together with a copy of the Group’s Annual Report at least twenty-one (21) days before the meeting. The Board will ensure that each item of special business included in the notices of the AGM is accompanied by a full explanation of the effects of any proposed resolution.

The Independent Non-Executive Chairman and the Board Members are prepared to respond to all queries and undertake to provide sufficient clarification on issues and concerns raised by the shareholders. The external auditors are also present to provide their professional and independent clarification, if required, on issues highlighted by the shareholders. The Company always maintains and promotes transparency in our business activities and to continually keep the shareholders and public well informed on the Company’s activities.

The Company also maintains a website (http://www.bahvest.com.my) which provides another communication channel for investors and shareholders to access corporate information and news related to the Group.

5. CODE OF ETHICS AND CONDUCT

Bahvest Resources Berhad and group of companies (“Bahvest Group”) Code of Ethics and Conduct (“Code”) is to be observed by all Directors and employees of the Group, and the core areas of conduct under the Code include the following:-

Conflict of interest
- Act honestly, in good faith and in the best interest of the Group;
- Use due care and diligence in fulfilling duties and responsibilities and responsibilities;
- Recognise that the primary responsibility is to the Company’s shareholder as a whole but should, where appropriate, have regards for the interest of all stakeholder of Group.
- Avoiding creating a conflict of interest, an obligation, interest, or distraction that may interfere with the independent exercise of judgment in the Group’s best Interest.
- Conduct in a professional, courteous and respectful manner and not take improper advantage of position given in a Group.
Confidential information
- Do not make improper use of confidential information acquired as a Director or employee for personal advantage or the advantage of other entity or that would be detrimental to the Group’s interest.
Inside information and securities trading
- Directors shall comply with all applicable laws relating to dealings with the securities of the Company and are prohibited to trade in the Company’s securities affected by or on behalf of a person with knowledge of relevant but non-public material information regarding the Group.
- Shall maintain confidentiality and shall not divulge or disclose any information obtained in the discharge of their duties unless otherwise required by laws and that no such information be used for personal gain.
Protection of assets
- Group’s assets must be protected and used efficiently. The Group’s assets must not be used without prior authorization. As for the Directors, Company’s time, employees or other assets must not be used for personal benefits without prior authorization from the Board or as part of a compensation or expenses reimbursement program available to all directors.
Business records and control
- Must not make or engage in any false records or communication of any kind, whether internal or external , including but not limited to false expense, attendance, production, financial, or similar report and statement false advertising, deceptive marketing practices, or other misleading representations.
Compliance to the law
- Shall stay abreast of the affairs of the Group and compliance with the relevant legislation and contractual requirement.
Personal gifting and contribution
- Shall not be influenced by receiving favours nor shall they try to improperly influence others by providing favours;
- Shall not accept gifts, benefits or entertainment from third party containing excessive values that would constitute a violation of laws or that could affect, or appear to affect, the professional judgment or create impression of improperly influencing the respective business relationship.
Sexual harassment
- Must not engage in sexual harassment, or act in a way that could be construed as such, for example by using inappropriate language, keeping or posting inappropriate materials in their work area, or inappropriate materials on their computer.
Sexual harassment
- Must not engage in sexual harassment, or act in a way that could be construed as such, for example by using inappropriate language, keeping or posting inappropriate materials in their work area, or inappropriate materials on their computer.
Outside interest
- Avoid acquiring any business interest or participating in any other activity outside the company that would, or would appear to create an excessive demand upon its time and attention thus depriving the Group of their best efforts on the job.
Air and courteous behavior
- Help create and maintain a culture of high ethical standards and commitment to compliance. A Wistleblowing Policy was adopted to ensure there is a medium to raise concerns regarding actual or suspected contravention of the company’s ethical standards without fear of reprisal.
Misconduct
- Act in Manner to enhance and maintain the reputation of the Group. Drinking, gambling, fighting, swearing and similar unprofessional activities are strictly prohibited while on the job.
Bribe and corruption
- Shall not offer, give, solicit or accept bribes in order to achieve business or personal advantages for themselves or others or engage in any transaction that can be construed as having contravened the anti-corruption laws.
- In a business relationship, no employee should directly or indirectly, accept from any third party and kind of bribes, kickbacks or any other unlawful or unethical benefit that might be seen to be an activity or behavior that could give rise to the appearance or suspicion on such conduct or the attempt thereof.
Bribe and corruption
- Any director or employees are prohibited to collect profit from illegal means and concealing the transformation of these from profit from unlawful activities and corruption into ostensibly “legitimate” assets.

The Board will review the Code periodically to ensure that it continues to remain relevant and appropriate. The Code is made available for reference in the Company’s website at http://www.bahvest.com.my.

6. REVIEW OF THE BOARD CHARTER

The Board Charter will be reviewed periodically 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 http://www.bahvest.com.my.