Board Charter

1. INTRODUCTION

The Directors of UMS Holdings Berhad ('UMS' or 'the Company') regard Corporate Governance as vitally important to the success of UMS's business and are unreservedly committed to applying the following principles of good governance in all of its business dealings in respect of its shareholders and relevant stakeholders:-

1.1 The Board is the focal point of the Company's Corporate Governance system. It is ultimately accountable and responsible for the performance and affairs of the Company;

1.2 All Board members are expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities;

1.3 All Board members are responsible to the Company for achieving a high level of good governance;

1.4 In carrying out its responsibilities, the Board undertakes to secure the interests of shareholders as well as the employees, suppliers and customers and the broader community – honestly, diligently, fairly and in accordance with all applicable laws;

1.5 The Board Charter shall continue and form an integral part of each Director's duties and responsibilities.

This Board Charter is not a total document and should be read as an expression of principle for optimising corporate performance and accountability. The Board will review and update (if necessary) the Board Charter on an annual basis.

2. OBJECTIVES

The objectives of this Board Charter are to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and that the principles of good corporate governance are applied in all their dealings in respect and on behalf of the Company.

3. THE BOARD

3.1 Role of the Board

The basic responsibility of the Directors is to exercise their business judgement to act in what they reasonably believe to be in the best interest of the Company, its shareholders and its stakeholders.

The Board's responsibilities encompass the following:

3.1.1 Lead and manage the Company in an effective and responsible manner;

3.1.2 Establish the corporate vision and mission, as well as the philosophy of the Company, setting the aims of the management and monitoring the performance of the management;

3.1.3 Monitor financial outcomes and the integrity of internal and external reporting, in particular approving annual budgets and longer term strategic and business plans;

3.1.4 Assess the effectiveness of the Board of Directors as a whole, the Committees of the Board and the contribution of each director;

3.1.5 To identify principal risks and to ensure the implementation of appropriate systems to protect the Company's assets and to minimise the possibility of the Company operating beyond acceptable risk parameters;

3.1.6 To keep pace with the modern risk of business and other aspects of governance that encourage enhancement of effectiveness in the Board and management;

3.1.7 To review the adequacy and integrity of the Group's internal control systems and management information systems including systems for compliance with applicable laws, regulations, rules, directives and guidelines;

3.1.8 Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing Board and the key management;

3.1.9 Establish and review annually corporate communication policies with respect to the following;

  1. How the Company interacts with analysts, investors, other key stakeholders and the public
  2. Measures for the Company to comply with its continuous and timely disclosure obligations

3.1.10 For each member of the Board of Directors, acting as representatives of the Company in;

  1. Enhancing the organisation's public image, reputation and credibility
  2. Providing contacts or network for the Company
  3. Being loyal to the Company
  4. Supporting the decisions of the majority of the Board of Directors and
  5. Identifying, evaluating and carrying out profitable business opportunity for the Company, as well as providing the Company with information on the market in which it operates;

3.1.11 Ensure all new directors receive comprehensive orientation to fully understand the role of the Board of Directors and its Committees, as well as the contribution individual directors are expected to make (including, in particular, the commitment of time that the Company expects from its directors) and the nature and operation of the Company's business.

3.1.12 In discharging its duties, the Board of Directors may engage the services of outside advisors at the expense of the Company. The Board also allows, any Board committee or Director to engage the services of an outside advisor at the expense of the Company, to adequately carry out such committee's or Director's duties, where the circumstances so warrant, subject to the Board of Directors' approval.

3.2 Board Structure

3.2.1 The Regulations governing the management of UMS are found in the Company's Articles of Association which stipulate amongst others, the appointment and number of Directors, the election of Chairman of the Board; who will preside at all Board meetings, the appointment of Managing Director and rotation of Directors, etc.

3.2.2 Although the Board is made up of a variety of Directors with different roles and responsibilities, there is no distinction in their accountabilities to the Company.

3.3 Composition and Board Balance

3.3.1 The number of Directors shall not be less than 2 and not more than 10 unless otherwise determined by a General Meeting, as stipulated in the Company's Articles of Association. At least 1/3 of the Board members are Independent and Non-Executive.

3.3.2 The Board membership should reflect a greater board diversity with an appropriate balance between executives possessing extensive direct experience and expertise in the core business activities of the Company, and non-executives who have outstanding track records and reputations attained at the highest levels of business and commerce generally, and who are able to bring to the Board a broad range of general commercial expertise and experience.

3.3.3 The Board is the Company's decision making body. It is therefore imperative that the Board should be sized in a manner most effective to facilitate decision-makings and deliberation processes.

4.1.8 Help guide the Group on long term strategic opportunities and represent the Group with key industry, civic and philanthropic constituents;

4.1.9 Promote the highest standards of integrity, probity and corporate governance of the Group;

4.1.10 Ensure that General Meetings of the Company are conducted efficiently and that shareholders have adequate opportunity to air their views and obtain answers to their queries.

4.2 Role of the Managing Director

The MD leads the management team. The Board holds the MD accountable for the performance of the management team. The key roles of the MD are:

4.2.1 Manage the Group's business and ensure that operational planning and control systems are in place;

4.2.2 Accountable and responsible for the Group's operations and financial performance. Formulate and recommend business and financial strategies and plans to develop the Company's business and to implement these plans to achieve agreed performance targets;

4.2.3 Lead management and employees and express his clear leadership;

4.2.4 Prepare and implement strategic plans;

4.2.5 Submit and implement acquisition/investment proposals;

4.2.6 Develop an organizational structure with the necessary succession planning

4.2.7 Promote communications internally and externally for the Group as the chief communicator by monitoring the goals, visions, missions and challenges;

4.2.8 Maintain a friendly environment and develop organisation culture, values and reputation in its markets;

4.2.9 Have a good corporate social responsibility program for shareholders, staff, customers, suppliers, partners and regulatory/official bodies;

4.2.10 Ensure the executive team implements the decisions of the Board and its Committees;

4.2.11 Assist the Chairman in drawing up the agenda for the Board meetings by providing input in relation to important strategic issues facing the business;

4.2.12 Highlight and update the Chairman on complex and sensitive issues that might affect the Company and/or the Group and maintain a consistent dialogue with the Chairman; and

4.2.13 To lead the Group to meet its vision and missions.

5. BOARD COMMITTEES

5.1 To assist the Board in fulfilling its duties and responsibilities, the Board has established the following Committees;-

5.1.1 Audit Committee

5.1.2 Nomination Committee

5.1.3 Remuneration Committee

5.2 All Committees have Terms of Reference which have been approved by the Board.

5.3 The Board can establish other Committees on ad hoc basis as and when required.

6. BOARD MEETINGS

6.1 The Board should meet in person as least once every quarter to facilitate the discharge of their responsibilities.

6.2 It is expected that each Director makes every effort to attend each Board meeting and each meeting of any committee on which he/she sits.

6.3 Each Director should be familiar with the agenda for each meeting, having carefully reviewed all materials distributed in advance of the meeting, and be prepared to participate meaningfully in the meeting and to discuss all scheduled items of business.

6.4 Members of the management who are not directors may be invited to attend and speak at meetings on matters relating to their sphere of responsibilities.

6.5 The Company Secretary should support the effectiveness of the Board by monitoring that Board policies and procedures are followed and co-ordinate the completion and despatch of Board agendas, briefing papers and minutes of proceedings. The Company Secretary should be responsible to the Board, through the chairperson on all governance matters and for meeting statutory reporting requirements in accordance with the relevant legislation.

7. GENERAL MEETINGS

7.1 Annual General Meeting (AGM)

7.1.1 The Company regards the AGM as an important event in the corporate calendar of which all Directors should attend.

7.1.2 The Chairman should encourage active participation by the shareholders during the AGM.

7.1.3 The Chairman and, where appropriate, the MD should respond to shareholders' queries during the meeting. Where necessary, the Chairman should undertake to provide a written answer to any significant question that cannot be readily answered at the meeting.

7.2 Extraordinary General Meeting

7.2.1 The Directors will consider requisitions by shareholders to convene an EGM or any other urgent matters requiring immediate attention of the Company.

8. INVESTORS RELATIONS AND SHAREHOLDER COMMUNICATION

8.1 The Board ensures the timely release of financial results on a quarterly basis to provide shareholders with an overview of the Company's performance and operations in addition to the various announcements made during the year.

8.2 A press interview will be held on ad hoc basis whereby the MD will give a press release stating the Company's results, its prospects and outline any specific event for notation.

8.3 The Company's website provides easy access to corporate information pertaining to the Company and its activities and is continuously updated.

9. RELATIONSHIP WITH OTHER STAKEHOLDERS

It is the Company's accountability to integrate responsible ethical practices into all aspects of the business operations to ensure long-term sustainability of business of the Company. The Company encourages the practice of high ethical standards and upgrade the Company's level of Corporate Conduct to cover four (4) main criteria as follows:-

9.1 Market Place

9.1.1 The Company is committed to uphold the corporate responsibility practices and to enhance the economic responsibilities by creating a good return to safeguard its shareholders' investment.

9.1.2 The Company is responsible to strive to develop and provide products and services which offer value in terms of price, quality, safety and environment impact.

9.1.3 The Company acknowledges the importance of good corporate governance and ensures the adherence to the Malaysian Code on Corporate Governance and to comply with all listing requirements, rules and regulations.

9.2 Work Place

9.2.1 The Company acknowledges that the employees are valuable assets and play a vital role in achieving the vision and mission of the Company.

9.2.2 The Company adopts comprehensive and documented policies and procedures with respect to the following:-

  1. Occupational safety and health with the objective of providing a safe, conducive and healthy working environment for all employees; and
  2. Industrial relations with the objective of managing employees' welfare and well-being in the workplace.

9.3 Environment

9.3.1 The Company acknowledges the need to safeguard and minimize the impact to the environment in the course of achieving the Company's vision and mission.

9.3.2 The Board adopts comprehensive and documented policies and procedures as part of its commitment to protect the environment and contribute towards sustainable development.

9.3.3 The Board supports initiatives on environment issues.

9.4 Community

9.4.1 The Board shall ensure the Company plays a vital role in contributing towards the welfare of the community in which it operates.

9.4.2 The Board shall ensure that the Company supports charitable causes and initiatives on community development projects.

10. COMPANY SECRETARY

10.1 The Board appoints the Company Secretary, who plays an important advisory role, and ensure that the Company fulfils the functions for which he/she has been appointed.

10.2 The Company Secretary is accountable to the Board through the MD on all governance matters.

10.3 The Company Secretary is a central source of information and advice to the Board and its Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company.

10.4 The Company Secretary should advise Directors of their obligations to adhere to matters relating to:

10.4.1 Disclosure of interest in securities

10.4.2 Disclosure of any conflict of interest in a transaction involving the Company

10.4.3 Prohibition on dealing in securities

10.4.4 Restrictions on disclosure of price-sensitive information

10.5 The Company Secretary must keep abreast of, and inform, the Board of current corporate governance practices.

10.6 The Board members should have unlimited access to the professional advice and services of the Company Secretary.