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Board Charter

BOARD CHARTER

1. Purpose
 This Board Charter (‘the Charter”) sets out the authority, responsibility, membership and operation of the Board of Directors of SEREMBAN ENGINEERING BERHAD (“the Company”), adopting principles of effective corporate governance and compliance with laws, regulations, rules, directives and guidelines applicable to the Company which include but not limited to Malaysian Code on Corporate Governance 2021,  Main Market Listing Requirements of Bursa Malaysia Securities Berhad,  the Companies Act 2016, Capital Markets and Services Act 2007 and any statutory modification amendment or re-enactment thereof for the time being in force (“Applicable Laws”).This Charter further defines the specific responsibilities of the Board, in order to enhance coordination and communication between the Management and the 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.
 2.  Authority
 The Board drives its authority to act from the Constitution of the Company  and the law and regulations governing companies in Malaysia.
3. Role Of Board
The Board’s role is to:

a) Represent and serve the interests of shareholders by overseeing and evaluating the Company’s strategies, policies and performance;
b) Monitor the Company’s performance and build sustainable value for shareholders in accordance with any duties and obligations imposed on the Board by law and the Company’s Constitution and within a framework of prudent and effective controls that enable risk to be assessed and managed;
c) Set, review and ensure compliance with the Company’s values ; and
d) Ensure shareholders are kept informed of the Company’s performance and major developments affecting its state of affairs
4. Delegation to Board Committees
The Board may from time to time establish Committees as it considers necessary or appropriate to assist in carrying out its responsibilities. The Board shall, as a minimum, establish the following Board Committees and shall adopt the respective Terms of Reference (“ToR”)  setting out matters relevant to the authority and responsibilities assigned thereto, membership and operation thereof:
  • Audit Committee (“AC”)
  • Nomination Committee (“NC”)
  • Remuneration Committee (“RC”).
The Board may also delegate specific functions to ad hoc committee(s) other than the above-mentioned as and when required. The powers delegated to these Committees are set out in the respective ToR as approved by the Board from time to time.
5. Matters Reserved for the Board
Matters which are specifically reserved for the Board or Board Committees as may be varied from time to time as determined by the Board, shall include the following.

5.1. Conduct of the Board·
a) Appointment and recommendation for removal of Directors.
b) Appointment and removal of Company Secretary(ies).
c) Formation of Board Committees and appointment and recommendation for removal of members.
d) Approval of ToR of Board Committees and amendments to such terms.
e) Approval of policies and amendments thereto from time to time to align with changes in law, governance code coupled with changes in the Group’s vision, mission and business plan. Policies made available on the Company’s website include Code of Conduct and Ethics, Whistle Blowing Policy & Procedures, Anti-bribery and Corruption Policy, Directors’ Fit and Proper Policy, Remuneration Policy, and others as required from time to time.
f) Ensure that an appropriate succession plan is in place for members of the Board and Senior Management.
5.2. Remuneration
a) Approval/recommendation of the Directors’ fee arrangements for Directors.
b) Approval of remuneration packages for Executive Directors.
c) Approval of any proposed employees’ share issuance scheme and/or amendments to the scheme, subject to other approvals that may be required by the Applicable Laws.
5.3. Operational
a) Approval of business strategy and operational plan and annual budget.
b) On-going review and supervision of performance against business strategy and operational plan, including monitoring of key risks and internal control and risk management policies and actions.
c) Approval of capital expenditure above the prescribed amount as may be determined from time to time.
d) Approval of bad debts write-off in excess of the prescribed amount as may be determined from time to time.
e) Approval of investment or divestment in a company/business/property/undertaking.
f) Approval of investment or divestment of a capital project which represents a significant diversification from the existing business activities.
g) Approval of significant changes in the activities of the Company.
h) Review investigation outcome of whistleblowing.
5.4. Financial
a) Approval of interim and annual financial statements.
b) Approval for the release of financial announcements.
c) Approval of the annual directors’ reports and statutory financial statements.
d) Adoption of accounting policies and practices, the going concern assumption and key audit matters.
e) Review and approval of the risk management strategy, policies and procedures, the management information and internal control systems of the Company and Group, evaluating the adequacy, effectiveness and the integrity thereof.
f) Any other matters requiring the Board’s approval under the limits of authority of the Company.
5.5. Corporate Matters
a) Granting of powers of attorney by the Company.
b) Recommendations for the amendment of the Constitution of the Company.
c) Amendment of the financial year end, registered office and name of the Company;
d) Purchase of its own shares by the Company.
e) Issue of any debt instruments.
f) Approval of scheme of reconstruction or restructuring.
g) Approval of interim dividends, the recommendation of final dividends and the making of any other distribution.
h) Ensure that the Company’s sustainability strategies, priorities and targets as well as performance against the targets are communicated to its internal and external stakeholders.
i) Any other matters requiring the convening of a general meeting of shareholders or any class of shareholders.
j) Any other matters as may be required by the Applicable Laws or the governing authorities.
6. Structure
The Company’s Constitution governs the regulations and proceedings of the Board. The Board, together with the NC, determines the size and composition of the Board subject to the terms of the Company’s Constitution.

6.1. Board composition
a) The Board should comprise a minimum of one third (1/3) of Independent Non-Executive Directors as defined in the Main Market Listing Requirements (“Listing Requirements”) of Bursa Securities and comprise Directors with a broad range of skills, diversity, expertise and experience from range of backgrounds.
b) The Chairman is appointed from amongst the Directors as approved by the Board. The majority shareholder may nominate the chair.
c) The Board regularly reviews the independence of each Non-Executive Director in light of information relevant to this assessment as disclosed by the individual Directors to the Board.
d) The Board only considers Directors to be independent where they are independent of Management and free from any business or other relationship that could materially interfere with or could reasonably be perceived to interfere with the exercise of their unfettered and independent judgment.
e) A Director is considered to be independent for the purposes of serving on the Board and Board committees if such Director has satisfied the standards on “independence” determinations as adopted by the Board from time to time.
f) The tenure of any Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board subject to the Director’s re-designation as a Non-Independent Director. Otherwise, the Board must justify and seek shareholders’ approval at the annual general meeting in the event it retains the directorship as an Independent Director.
g) In accordance with the Code, the Board should seek annual shareholders’ approval through a two (2) tier voting process to retain such Independent Director after the twelfth (12th) year.
h) To ensure the Directors have the time to focus and fulfill their roles and responsibilities effectively, one (1) criteria as agreed by the Board is that they must not hold directorships at more than five (5) public listed companies (“PLC”) (as prescribed in Paragraph 15.06 of the Listing Requirements). Directors are also required to notify the Chairman before accepting any new Directorship in other company and/or PLC.
i) On boardroom diversity, the Board is supportive of the gender diversity recommended by the Code. The Board, through the NC will review the proportion of the female and male Board members during the annual assessment of the Directors’ performance, after taking into consideration the appropriate skills, experience and characteristics required by the members of the Board, in the context of the needs of the Company.
6.2. Election and re-election
a) The Company complies with the Applicable Laws governing the election and re-election of Directors in addition to the provisions of the Constitution.
b) Upon election, the Directors are provided with formal letters setting out the key terms and conditions of the appointment.
6.3. Role of Chairman
a) The Chairman represents the Board to the shareholders. The Chairman is responsible for ensuring the integrity and effectiveness of the governance processes of the Board and will consult with the Board promptly over any matter that gives him cause for major concern.
b) The Chairman will act as facilitator at meetings of the Board and ensure that no Board member, whether executive or non-executive, dominates the discussion, and that appropriate discussion takes place and that relevant opinion among the members of the Board are forthcoming.
c) The key roles and accountabilities of the Chairman are as follows:

i. Providing leadership for the Board so that the Board can perform its duties and responsibilities effectively;
ii. Leading Board meetings and discussions;
iii. Providing governance in matters requiring corporate justice and integrity;
iv. Managing Board communications and effectiveness and supervision over Management;
v. Creating conditions for good decision making during Board and shareholders’ meetings;
vi. Ensuring Board proceedings are in compliance with good conduct and best practices;
vii. Protecting the interest and provide for the information needs of various stakeholders;
viii. Ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole;
ix. Maintaining good contact and effective relationships with external parties, investing public, regulatory agencies and trade associations;
x. Set board meeting agenda and ensuring that the Management provides quality of information to facilitate decision-making is delivered to the Board on a timely manner;
xi. Ensuring compliance with the Applicable Laws; and
xii. Leading the Board in establishing and monitoring good corporate governance practices in the Company.
7. Relationship of the Board and Management
Directors may delegate their power to the Management as they consider fit and appropriate.
 

The Management function is conducted by, or under the supervision of the CEO as directed by the Board and by other officers to whom the Management function is properly delegated by the CEO.

 
7.1. Position of CEO
The Board will link the Company’s governance and Management functions through the Chairman with the CEO. All Board’s authority conferred on Management is delegated through the CEO so that the authority and accountability of Management of is considered to be the authority an accountability of the CEO so far as the Board is concerned.

 
7.2. Accountability of CEO
a) The CEO is accountable to the Board for the achievement of the Company’s goals and for the observance of the Management’s authorities.
b) The CEO shall be the head of the management of the Company and in that capacity is answerable to the Board.
c) The key roles of the CEO, amongst others, include:

i. developing the strategic direction of the Company;
ii. ensuring that the Company’s strategies and corporate policies are effectively implemented;
iii. ensuring that Board decisions are implemented and board directions are adhered to;
iv. providing directions in the implementation of short and long term business plans;
v. providing strong leadership i.e. effectively communicating a vision, management philosophy and business strategy to the employees;
vi. keeping the Board fully informed of all important aspects of the Company’s operations and ensuring sufficient information is distributed to the members of the Board;
vii. ensuring high performance and productivity of top management staff by creating conditions for top management motivation, performance management and professional development;
viii. ensuring compliance with all relevant legislation and regulations by reviewing policies and monitoring compliance;
ix. developing and maintaining effective relations with significant external agencies such as regulatory bodies, government agencies, investing public and other trade associations and institutions;
x. ensuring the day-to-day business affairs of the Company is effectively managed; and
xi. ensuring the Group’s internal control and risk management systems are operating adequately and effectively, in all material aspects.
7.3. Management Authorities
The CEO is expected to act within all specific authorities delegated to him by the Board.
The assets of the Company are expected to be adequately maintained and protected, and not unnecessarily placed at risk.
7.4. Access to Information and Independent Advice 
Members of the Board should be given unrestricted access to the Company’s Management and to the information pertaining to the Company including from the Company’s auditors, company secretaries and consultants.
The Board will be supplied by the Management with information in a form, timeframe and quality that will enable the Board to discharge its duties effectively. Directors are entitled to request for additional information at any time when they think fit.
The Board or any Director is entitled to obtain independent professional advice relating to the affairs of the Group or his responsibilities at the cost of the Company. The Director shall first discuss it with the Chairman and, having done so, shall be free to proceed, where appropriate.
8. Company Secretary
a) The appointment and removal of the Company Secretary is subject to the approval of the Board. The Company Secretary plays an advisory role to the Board in relation to the Company’s Constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes of guidance and legislations.
b) The Company Secretary carries out the following tasks:

i. Attend and ensure proper conduct and procedures at all Board Meetings, Board Committee Meetings, Shareholders Meeting and any other meetings that require the attendance of Company Secretary and ensure that meetings are properly convened.
ii. Ensure that deliberations at meetings are well captured and minuted, and subsequently communicated to the relevant Management personnel for necessary actions.
iii. Ensure that the quarterly financial results, audited financial statements, annual reports, circulars, and all relevant announcements are published compliance with listing requirements.
iv. 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.
v. Keep the Directors and Senior Management informed of the closed period for trading in the Company’s shares.
9. Procedure of Meetings
9.1 Frequency of Meetings
The Board shall meet at least four (4) times a year and such additional meetings as may be required for the Board to fulfil its duties. In addition, the Chairman may call a meeting if a request is made by any Board member.
9.2 Quorum
The quorum for Board meetings shall be two (2) Directors.
The Management may be invited from time to time to Board meetings, as the Board may deem necessary.
9.3 Notice of Meetings
Reasonable notice of Board meetings shall be given in writing sent through the post, facsimile, electronic mail and by any means of telecommunication in permanent written form to all Board members, except in the case of emergency, where the Board may waive such requirement.
9.4 Voting and Proceedings of Meetings
The Board members may participate in a meeting by way of telephone and video conferencing or by means of other communications equipment whereby all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting and shall be entitled to vote or be counted in a quorum accordingly.
Questions arising at any meeting of the Board shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the Board shall have a second or casting vote. The Board member shall abstain from deliberations and voting in respect of any matter which may give rise to an actual or perceived conflict of interest situation.
9.5 Circular Resolution
A resolution in writing signed by a majority of the Board members for the time being shall be as valid and effectual as if it had been passed at a meeting of the Board duly called and constituted. Any such resolution may consist of several documents in like form, each signed by one (1) or more Board members. Any such document may be accepted as sufficiently signed by a Board member if transmitted to the Company by telex, telegram, cable, facsimile or other electrical or digital written message to include a signature of a Board member.
9.6 Minutes of Meetings
Minutes of the Board meeting shall be circulated promptly to all members of the Board. The Secretary(ies) shall keep record of all conclusions and resolutions passed at all meetings of the Board, including the names and signatures of the attendees.
The Minutes of the Board meetings shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting and if so signed, shall be conclusive evidence of the proceedings of the meeting duly held.
Full minutes of the Board meetings shall be kept by the Secretary(ies) at the registered office.
10. Investors Relation and Effective Communication
a) The Board values the importance of the dissemination of information on major developments of the Group to the shareholders, potential investors and the public in a timely and equitable manner.
b) The Board will ensure that the general meetings of the Company are conducted in an efficient manner and serve as a mode in shareholders communications. These include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the general meetings.
11. Conflict of Interest and Related Party Transactions
a) Directors are required to take all reasonable steps to avoid actual, potential or perceived conflict of interests with the Group’s interest.
b) A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company or any of its subsidiaries shall declare the Director’s interest in accordance with the Companies Act 2016.
c) Should there be actual, potential or perceived conflict of interest between a Company and a director, or a person connected with Director such as a spouse, other family member, or a related company, the interested Director shall make full disclosure in bona fide and act honestly in the best interest of the Group and shall not participate in deliberations and shall abstain himself from casting his votes in any matter arising there from.
d) Related party transactions, which include any financial transactions or conflict of interest situations between a Director/officer and the Group, shall be reported to the Board.
12. Anti-bribery and Corruption Policy
a) The Board is committed to conducting business dealings with integrity, honesty and respect. This means avoiding practices of bribery and corruption of all forms in the Group.
b) The Board established an Anti-Bribery and Corruption Policy with the aim to provide guidance to the employees and/or any person associated with the Group concerning how to deal with bribery and corruption and related issues that may arise during the course of business. It reiterates the Board’s commitment to full compliance with the Malaysian Anti-Corruption Commission (“MACC”) Act 2009 and the MACC (Amendment) Act 2018 and any other anti-bribery and corruption laws that may be applicable
c) The Board shall:

i. Oversee the Anti-bribery and Anti-Corruption Management System and assure its operational effectiveness and efficiency in protecting the Group from bribery risks and encourage legal and regulatory compliance.
ii. Encourage legal and regulatory compliance within the Group and protect the Group from bribery risks.
iii. Ensure that adequate and appropriate resources needed for the effective operation of the Anti-bribery and Anti-Corruption Management System are allocated and the dedicated Departments have the necessary status and authority to fulfil their responsibilities.
13. Board Training and Development
New Directors will be briefed on the Company’s history, business and plant visit to enable them to have in-depth understanding of the Company’s operation.
The Board shall adopt a continuous educational and training programme to update Board Members relating to new development of laws, regulations and other business and management related subjects, risks control and management subjects that may affect the Company’s business and compliance requirements.
14. Directors’ Remuneration
The Board will determine the level of remuneration of the members of the Board, taking into consideration the Remuneration Policy recommended by the RC. Executive Directors should not be involved in deciding their own remuneration. Non-executive members of the Board will be paid a basic fee as ordinary remuneration and they will also be paid a sum based on their responsibilities in Board Committees and for their attendances at meetings. The fee and any benefits payable to the Directors which is subject to the approval of the Shareholders, shall be fixed in sum and not by a commission or on percentage of profits/turnover.
 

 
15. Board and Members Assessment
a) The Chairman keeps under review, informally, the contributions made by the members of the Board. The NC is given the task to review annually the activities and effectiveness of the Board and the members of the Board. With the assistance of the Company Secretary, the Chairman of the NC oversees the overall evaluation process. The NC is required to evaluate the Board’s and Board Committees’ performance annually and report to the Board. This assessment report together with the report on the Board balance (the required mix of skills and experience and other qualities) will be discussed with the full Board. This exercise is carried out after the end of each financial year or such other time as may be deemed appropriate.
b) As required under the Listing Requirements, the Board shall through NC, review the term of office and performance of the AC and each of its members annually to determine whether the AC and its members have carried out their duties in accordance with its ToR.
16. Review and Amendment
This Charter is to be reviewed by the Board as required 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.
This Charter is made available for reference on the Company’s corporate website.

 

Updated as at 24 October 2024

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