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INTRODUCTION

1. INTRODUCTION
   
 
The Board of Directors (“Board”) of Amalgamated Industrial Steel Berhad (“the Company”) is committed to upholding the highest standards of Corporate Governance throughout the Company and its subsidiaries (“the Group”) by applying and adopting the pertinent best practices and principles of good governance in the discharge of the Board’s duties and responsibilities and in all of the dealings with its shareholders and relevant stakeholders.

All Board members are expected to exercise their powers and judgment for proper purpose, in good faith and in the best interest of the Company and the Group. It is therefore important for all Board members to act in a professional manner, thereby upholding the core values of transparency, integrity and enterprise with due regard to their fiduciary duties and responsibilities as directors of the Company.

This Board Charter shall constitute, and form, an integral part of each Director’s duties and responsibilities.
   

KEY OBJECTIVES

2. KEY OBJECTIVES
   
  The key objectives of this Board Charter are:
   
 
a)
To specify how the Group is governed so as to promote the Group and protect and uphold the interests of shareholders as well as other stakeholders;

b)
To list out the roles and duties of the Directors and how they relate to the Group’s overall mission and goals;

c)
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;

d)
To ensure that the principles and practices of good Corporate Governance are applied in all the Directors’ dealings in respect, and on behalf of the Company and the group;

e)
To exceed “minimum legal requirements” with due consideration to recognised standards of best practices locally and internationally.


THE BOARD

3. THE BOARD
   
  a) Role and Responsibilities

 
The Board is responsible for the proper stewardship of the Group and charged with leading and managing the Group in an effective and responsible manner. Each Director has a legal duty to act in the best interest of the Group. The Directors, collectively and individually, are aware of their responsibilities to shareholders and stakeholders for the manner in which the affairs of the Group are managed. The Board is to set the Group’s values and standards and ensures that its obligations to its shareholders and stakeholders are understood and met.

The Board is to ensure the maximization of shareholders’ value and safeguarding stakeholders ’ interests including securing sustainable long-term financial results and increasing shareholder value, with proper social and environmental considerations.  Hence the Board should collectively have sound and efficient knowledge and expertise to enable effective governance and oversight. 

The Board understands the responsibility for good Corporate Governance rests with them and therefore strives to follow the principles, best practices and recommendations stated in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012 ”). The Board includes a narrative statement in the Company’s Annual Report on the extent of compliance with the principles and recommendations stated under each principle in the Statement of Corporate Governance made pursuant to the Main Market Listing Requirements (“ MMLR”).

The Company by virtue of its admission to the Official List of Bursa Malaysia Securities Berhad ( “the Exchange”), is bound by the MMLR, the Rules of the Exchange and the Rules of the Bursa Malaysia Depository Sdn Bhd.

The Board shall meet in person at least once every quarter to facilitate the discharge of its responsibilities. Members of the Management, who are not Directors, may be invited to attend and speak at meetings on matters relating to their sphere of responsibility.

Duties of the Board shall include establishing the corporate vision and mission, as well as the philosophy of the Group, setting the aims of the Management and monitoring the performance of the Management.

The Board shall assume the following specific duties:

i)

Establishing and reviewing the strategic direction of the Group;

ii)

Overseeing and evaluating the conduct of the Group’s businesses;

iii)

Identifying principal risks and ensure that these risks are properly managed;

iv)

Establishing a succession plan;

v)

Developing and implementing an investor relations programme or shareholder communication policy; and

vi)

Reviewing the adequacy and the integrity of the group’s internal control and management systems.

The Board shall establish written procedures determining which issues require a decision of the full Board and which issues can be delegated to Board Committees or the Management.

Generally, a director’s responsibilities include:

i)

To be aware of the Group’s operating environment and promote safety and soundness of the Group;

ii)

To be diligent in undertaking his duties and avoid conflict of interest situation;

iii)

To understand his oversight role and exercise independent judgment in decision making;

iv)

To devote adequate time and attention to discharge his duties and responsibilities effectively; and

v)

To contribute actively to the functions of the Board and able to provide sound and objective advice.

The Board reserves full decision-making powers on the following matters:

i)

Conflict of interest issues relating to a substantial shareholder or a Director;

ii)

Material acquisitions and disposition of assets not in the ordinary course of business;

iii)

Investments in capital projects;

iv)

Authority levels;

v) Treasury policies;

vi)

Risk management policies; and

vii)

Key human resource issues including succession planning, appointing, training, and fixing the remuneration of senior management.

The Board shall establish a procedure whereby the Directors, collectively or individually, may seek independent professional advice in furtherance of their duties at the Company’s expense.

The Board shall commit to ethical values through a Code of Business Conduct and Ethics for Directors (“Code of Conduct”) and ensures the implementation of appropriate internal systems to support, promote and ensure its compliance. The Board shall periodically review the Code of Conduct. A summary of the Code of Conduct shall be made available on the Company’s website.

The Board shall formalise the Company’s strategies on promoting sustainability, focusing on environmental, social and governance (ESG) aspects of business which underpin sustainability and discloses these policies and their implementation in the Annual Report and the Company’s website.

b) Composition and Board Balance

The Board shall consist of qualified individuals with diverse experience, background and perspective. The composition and size of the Board is such that it facilitates the making of informed and critical decisions.

 
At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members shall be Independent Directors. Where the Chairperson of the Board is not an independent Director, the majority of Board members shall be independent Directors, to ensure balance of power and authority on the Board.

 
Profile of Board members shall be included in the Annual Report and/or website of the Company.

 
In line with the recommendation of the MCCG 2012, the tenure of an Independent Director of the Company should not exceed nine (9) years. Upon completion of the nine (9) years, such Independent Director may continue to serve on the Board subject to his re-designation as a Non-Independent Director. Should the Board, based on the recommendation of the Nomination Committee, intend to retain the Independent Director, who had served a cumulative term of nine (9) years, shareholders’ approval shall be sought.

 
The Chief Executive Officer (“CEO”) is the “Executive” Director on the Board. However, the views of the Management are represented at meetings of the Board by the presence of senior executives when required.

 
Identifying individuals of suitable quality and background is essential for a high performing Board. The nomination and appointment process is crucial to strong corporate performance as well as effective accountability.

 
The Independent Directors shall provide independent judgment, experience and objectivity without being subordinated to operational considerations.

 
The Independent Directors shall help to ensure that the interests of all shareholders, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.

 
The views of the Independent Directors shall carry significant weight in the Board’s decision-making process.

 
The Board shall appoint a Senior Independent Director to whom shareholders’ concerns can be conveyed if there are reasons that contact through the normal channels of the Chairperson or the CEO/ Executive Director have failed to resolve them. The Senior Independent Director shall chair the meetings between the Non-Executive Directors where both the Chairperson and Executive Directors do not attend.

 
If, on any matter discussed at a Board meeting, any Director holds views contrary to those of any of the other Directors, the Board minutes shall clearly reflect this.

c) Appointments

 
The appointment of a new Director is a matter for consideration and decision by the full Board upon appropriate recommendation from the Nomination Committee.

 
New Directors are expected to have such expertise so as to qualify them to make a positive contribution to the Board performance of its duties and to give sufficient time and attention to the affairs of the Company.

 
The Company Secretary shall have the responsibility of ensuring that relevant procedures relating to the appointment of new Directors are properly executed.

 
Upon the appointment of a new Director, the Company Secretary shall advise the Director of his/her principal duties and responsibilities and explains the restrictions to which he or she is subject to in relation to price -sensitive information and dealings in the Company’s securities.

 
New Board Members shall be briefed on the terms of their appointment, their duties and obligations and on operations of the Group. Copies of the following shall be provided to the newly appointed Director:



i)

Board Charter;



ii)

Memorandum & Articles of Association;



iii)

Directors’ Code of Ethics; Board committees’ composition and terms of reference;



iv)

Latest business plans;



v)

Latest annual reports and financial statements; and



vi)

Organisation Chart.

The Directors’ Code of Ethics is set out in Appendix A.

 
The Company shall adopt educational/training programmes to update the Board in relation to new developments pertaining to the laws and regulations and changing commercial risks which may affect the Board and/or the Company.

 
In addition to the Mandatory Accredited Programme (MAP) as required by the Exchange, Board members are also encouraged to attend training programmes conducted by competent professionals and which are relevant to the Group’s operations and business. The Board shall assess the training needs of the Directors and disclose in the Annual Report the trainings attended by the Directors.

 
The directorships held by any Board member at any one time shall not exceed five (5) in listed companies.

 
At the time of appointment, the Board shall obtain the Director’s commitment to devote sufficient time to carry out his responsibilities.

 
Directors should notify the Chairperson before accepting any new directorship. The notification should include an indication of time that will be spent on the new appointment.

d) Re-election

All Directors shall be subjected to retirement by rotation. One-third (1/3) or the number nearest to one-third (1/3) of the Directors shall retire from office and be eligible for re-election at the AGM. Each Director shall retire from office at least once in every three (3) years and the Directors to retire each year are the Directors who have been longest in office since their last re-election.

e) Supply of Information

The Company aims to provide all Directors with timely and quality information and in a form and manner appropriate for them to discharge their duties effectively.

 
The Management shall be responsible for providing the Board with the required information in an appropriate and timely manner. The Chairperson, assisted by the Company Secretary, shall assess the type of information required to be provided to the Board. If the information provided by the Management is insufficient, the Board shall make further enquiries where necessary to which the persons responsible will respond as fully and promptly as possible.

 
A full agenda and comprehensive Board papers shall be circulated to all Directors well in advance of each Board meeting.

 
Amongst others, the Board papers shall include the following:



i)

Quarterly financial report and report on the Group’s cash and borrowing positions;



ii)

Minutes of meetings of all Committees of the Board;



iii)

A current review of the operations of the Group;



iv)

Reports on Related Party Transactions and Recurrent Related Party Transactions;



v)

Directors’ share-dealings;



vi)

Material litigations;



vii)

Updates from relevant regulatory bodies;



viii)

Reports from Internal and External Auditors; and



ix)

Annual operational and capital budgets.

Full Board minutes of each Board meeting shall be kept by the Company Secretary and are to be made available for inspection by any Director during office hours.

f) Board Diversity
The Board shall promote diversity and gender mix in its composition and gives due recognition to the financial, technical and business experience of the Directors.

The Board believes the presence of diverse nationalities and gender mix on the Board can widen the Board’s perspectives in effectively discharging its duties and responsibilities as well as assist the Board in its decision-making process in line with the challenging and evolving business environment.


CHAIRPERSON AND CHIEF EXECUTIVE OFFICER (“CEO”)

4.

CHAIRPERSON AND CHIEF EXECUTIVE OFFICER (“CEO”)

 
The Company aims to ensure a balance of power and authority between the Chairperson and CEO with a clear division of responsibility between the running of the Board and the Company’s business respectively. The positions of Chairperson and CEO shall be separated and clearly defined. The Chairperson must be a non-executive member of the Board.

  a) Chairperson

  The Chairperson represents the Board to the shareholders and is responsible for all aspects of its role. The Chairperson shall be responsible to:

 
i)

Lead the Board in setting the values and standards of the Group;

ii)

Maintain a relationship of trust with and between the Executive and Non-Executive Directors;

iii)

Ensure the provision of accurate, timely and clear information to Directors;

iv)

Ensure effective communication with shareholders and relevant stakeholders;

v)

Arrange regular evaluation of the performance of the Board, its Committees and individual Directors;

vi)

Facilitate the effective contribution of Non-Executive Directors and ensuring constructive relations be maintained between Executive and Non-Executive Directors; and

viii)

Ensure the integrity and effectiveness of the governance processes of the Board and will consult with the Board promptly over any matter that gives him/ her cause for concern.

 
The Chairperson in consultation with the CEO and the Company Secretary, shall set the agenda for Board meetings and shall ensure that all relevant issues are on the agenda.

  The Chairperson shall be responsible for managing the business of the Board to ensure that:

 
i)

All Directors are properly briefed on issues arising at Board meetings;

ii)

Sufficient time is allowed for the discussion of complex or contentious issues and, where appropriate, arranging for informal meetings beforehand to enable thorough preparation for the Board discussion; and

iii)

The issues discussed are forward looking and concentrates on strategy.

 
The Chairperson shall ensure that every Board resolution is put to vote to ensure the will of the majority prevails.

 
The Chairperson shall ensure that Executive Directors look beyond their executive functions and accept their full share of responsibilities on governance.

 
The Chairperson will have no casting vote if two (2) Directors form a quorum, or if there are only two (2) Directors competent to vote on the question at issue.

  b) Chief Executive Officer (“CEO”)

  A CEO in relation to a corporation, means the principal executive officer of the corporation for the time being, by whatever name called, and whether or not he or she is a director of the corporation.

  The CEO shall be the conduit between the Board and the Management in ensuring the success of the Group’s governance and management functions.

  The CEO shall have the executive responsibility for the day-to-day operation of the Group’s business.

  The CEO shall implement the policies, strategies and decisions adopted by the Board and providing directions in the implementation of short and long term business plan.

  The CEO shall develop and maintain effective relations with significant external agencies such as regulatory bodies, government agencies, investing public and other trade associations and institutions.

  All Board authorities conferred on the Management shall be delegated through the CEO and this will be considered as the CEO’s authority and accountability as far as the Board is concerned.

  c) Management Authorities

  The CEO is expected to act within all specific authorities delegated to him/ her by the Board.

  The CEO has the responsibility for ensuring that the assets of the Group are adequately maintained and protected, and not unnecessarily placed at risk.

  The CEO shall within the specific authorities delegated to him/ her by the Board establish a Management Committee and Risk Management Committee comprising of certain key management staff who shall be responsible, within limits of the authority determined and powers delegated by the Board of Directors from time to time.

  The terms of reference of the Management Committee and Risk Management Committee are as attached in Appendices B and C.

BOARD COMMITTEES

5. BOARD COMMITTEES
  The Board shall establish the following Board Committees with specific terms of reference:

 
a)

Audit Committee;

b)

Nomination Committee;

c)

Remuneration Committee.

  The Board shall also establish various Board Committees with specific terms of reference, to address important areas in greater detail which may not be possible at Board meeting.

  Independent and Non-Executive Directors shall play a leading role in these Committees. The Management and third parties are co-opted to the Committees as and when required.

 
a)

Audit Committee

The Audit Committee shall comprise at least three (3) members, a majority of whom are Independent Directors. All members of the Audit Committee are Non-Executive Directors.

 
No alternate Director can be appointed as a member of the Audit Committee.

 
The Chairperson of the Audit Committee shall be an Independent Director who shall be appointed by the Board.

  The Audit Committee shall undertake the following responsibilities and duties:

 
i)

Risk Management

  To review the adequacy and effectiveness of the risk management framework and policies in managing the key risks of the Group.

ii)

Financial Reporting

  To review the quarterly results and year-end financial statements prior to approval by the Board, focusing particularly on:-

 
- changes in or implementation of major accounting policies changes;

 
- significant and unusual events;

 
- the going concern assumption;

 
- significant adjustments arising from the audit; and

 
- compliance with accounting standards and other regulatory requirements.


iii)

External Audit

 
- to discuss with the external auditors, prior to the commencement of an audit, the audit plan which states the nature and scope of the audit;

 
- to consider the nomination and appointment of external auditors, as well as fixing their remuneration;

 
- to establish policies governing the circumstances under which contracts for the provision of non-audit services can be entered into and procedures that must be followed by the external auditors;

 
- to review major audit findings arising from interim and final audits, the audit report and the assistance given by the employees of the Group to the external auditors;

 
- to review with the external auditors, their evaluation of the system of internal controls, the management letter and management’s response;

 
- to monitor independence and qualification of the external auditors. The Audit Committee is to obtain written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements;

 
- to review any letter of resignation from the external auditors and any questions of resignation or dismissal; and

 
- to review whether there is reason (supported by grounds) to believe that the external auditors are not suitable for re-appointment.


iv)

Internal Audit

 
- to support and provide directions to the internal audit function to ensure its effectiveness;

 
- to review the adequacy and effectiveness of internal control systems instituted within the Group;

 
- to review the adequacy of scope, functions, competency and resources of the internal audit function and whether it has the necessary authority to carry out its work;

 
- to review the internal audit programme, processes, the results of the internal audit programme, processes or investigations undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

 
- to review the major findings of internal audit investigations and management’s response, and ensure that appropriate actions are taken on the recommendations of the internal audit function;

 
- to review any appraisal or assessment of the performance of members of the internal audit function;

 
- to approve any appointment or termination of senior staff members of the internal audit function; and

 
- to take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.


v)

Others

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

 
- to verify that the allocation of options pursuant to the Employees’ Share Options Scheme of the Company is in accordance with the criteria for allocation established under the scheme at the end of each financial year; and

 
- to promptly report to the Exchange if it is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements.



  The Audit Committee shall meet on a quarterly basis to carry out its functions. The Audit Committee shall also be responsible for recommending the person or persons to be nominated to act as the external auditor and the remuneration and terms of engagement of the external auditor.

  The Audit Committee shall 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 Board shall review the term of office and performance of the Audit Committee and each of its members at least once in every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with these terms of reference.

 
b)

Nomination Committee

The Nomination Committee shall comprise exclusively of Non-Executive Directors, a majority of whom must be Independent Directors.

 
The Chairperson of the Nomination Committee shall be the Senior Independent Director who shall be appointed by the Board.

 
The primary objectives of the Nomination Committee are to act as a committee of the full Board to assist in discharging the Board’s responsibilities in:-

i)

Assessing the existing directors’ ability to contribute to the effective decision making of the Board;

ii)

Identifying, appointing and orientating new directors;

iii)

Identifying the mix of skills and experience and other qualities the Board requires for it to function completely and efficiently;

iv)

Establishing a policy formalising its approach to boardroom diversity. The Nomination Committee shall take steps to ensure that women candidates are sought as part of its recruitment exercise.



  The Nomination Committee shall have the following responsibilities:-

i)

Recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board. In making the recommendations, the Nomination Committee should consider the candidates’

 
- skills, knowledge, expertise and experience;

 
- professionalism;

 
- integrity; and

 
- in the case of candidates for the position of independent non-executive directors, the Nomination Committee should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors;

 
- Consider in making its recommendations, candidates for directorship proposed by the CEO and, within the bounds of practicability, by any other senior executive, any director or shareholder;

 
- Recommend to the Board, directors to fill seats on Board Committee;

 
- Assess the effectiveness of the Board as a whole on an annual basis;

 
- Assess the effectiveness of the committees of the Board on an annual basis;

- Assess the contribution of each individual director on an annual basis;

- Review and recommend to the Board the required mix of skills and experience and other qualities the Board requires in order to function completely and efficiently on an annual basis;

- Assess the independency of the Independent Directors who have served a cumulative term of nine years and make recommendation and provide justification to the Board if so decided that they are to be retained as Independent Directors;

  - Develop, maintain and review the criteria to be used in the nomination, election and recruitment processes and annual assessment of directors;

  - Review and facilitate board induction and training programmes; and

  - To review board succession plans.

ii)

In the event that the Board appoints a new Chairperson, the Nomination Committee shall be guided by the following principles prior to making recommendations to the Board:

 
- That the Senior Independent Director shall lead the appointment process;

 
- That a systematic evaluation shall be undertaken to identify the skills and expertise required for the role;

 
- That all short listed candidates shall be considered with the possibility of obtaining external advice, if necessary.



  A statement about the activities of the Nomination Committee in discharge of its duties for the financial year is disclosed in the Annual Report.

c)

Remuneration Committee

The Remuneration Committee shall comprise exclusively or a majority of Non-Executive Directors.

The Chairperson of the Remuneration Committee shall be an Independent Non-Executive Director who shall be appointed by the Board.

The primary objective of the Remuneration Committee is to act as a committee of the full Board to assist in assessing the remuneration of the Directors reflecting the responsibility and commitment undertaken by the Board membership.



The Remuneration Committee shall have the following responsibilities:-

i)

Recommend to the Board the remuneration of the Executive and Non-Executive Directors;

ii)
Assist the Board in assessing the responsibility and commitment undertaken by the Board membership;

iii)
Assist the Board in ensuring the remuneration of the Directors reflects the responsibility and commitment of the director concerned.


DIRECTORS

6.
DIRECTORS
 
a) The Company aims to set remuneration at levels which are sufficient to attract and retain the Directors needed to run the Group successfully, taking into consideration all relevant factors including the function, workload and responsibilities involved, but without paying more than is necessary to achieve this goal.

b) The level of remuneration for the CEO and Executive Directors shall be determined by the Remuneration Committee after giving due consideration to the compensation levels for comparable positions among other similar Malaysian public listed companies.

c) Non-Executive Directors shall be entitled to participate in the Company’s Employee Share Options Scheme (“ESOS”) subject to approval at a general meeting. Non-Executive Directors who participated in the ESOS shall be prohibited to sell, transfer or assign the shares within one (1) year from the date of offer of such options.

d)

No Director other than the CEO and Executive Directors, shall have a service contract with the Company.

e) A formal independent review of the Directors’ remuneration shall be undertaken no less frequently than once every three (3) years or as and when necessary.

f) There shall be adequate disclosure in the Annual Report with a note on the remuneration of Directors, Board remuneration policies and procedures.

FINANCIAL REPORTING

7.

FINANCIAL REPORTING

 
a)

Transparency

  The Directors shall present a clear and balanced assessment of the Group’s financial position and future prospects that extends to the interim and price sensitive information and other relevant reports submitted to regulators.

  The Directors shall ensure that the financial statements are prepared so as to give a true and fair view of the current financial status of the Group in accordance with the approved accounting standards.

  The Group’s practice is to announce to the Exchange its quarterly financial results as early as possible within two (2) months after the end of each quarterly financial period or at such other period(s) as maybe stipulated by the Exchange from time to time.

  The Auditors’ Report shall contain a statement from the Auditors explaining their responsibility in forming an independent opinion, based on their audit, of the financial statements.

b)

Company Auditors

  The Board shall establish formal and transparent arrangements for considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the Company Auditors through its Audit Committee.

  The Audit Committee shall also keep under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the Company Auditors. The Board shall ensure that the Company Auditors do not supply a substantial volume of non-audit services to the Group.

  Appointment of the Company Auditors shall be subjected to approval of shareholders at general meetings. The Company Auditors shall retire during the annual general meetings of the Company every year and be re-appointed by shareholders for the ensuing year.

c)

Risk Management and Internal Controls

  The Board shall ensure a well-resourced internal audit function, which critically reviews all aspects of the Group’s activities and its internal controls. Comprehensive audits of the practices, procedures, expenditure and internal audit controls of all business support units and subsidiaries shall be undertaken on a regular basis. The Head of Internal Audit shall report directly to the Audit Committee.

  The Board shall ensure the system of internal controls is reviewed on a regular basis and the main features of the Company’s risk management framework and internal controls system are disclosed in the Annual report.

  The Audit Committee shall receive reports regarding the outcome of such reviews on a regular basis.

  The CEO and Chief Financial Officer/Head of Finance are to provide an assurance to the Board annually on whether the Company’s risk management and internal control system is operating adequately and effectively in all materials aspects.

GENERAL MEETINGS

8.

GENERAL MEETINGS

 
a)

Annual General Meeting (“AGM”)

  The Company regards the AGM as an important event in the corporate calendar of which all Directors and key senior executives should attend.

  The Company regards the AGM as the principal forum for dialogue with shareholders and aims to ensure that the AGM provides an important opportunity for effective communication with, and constructive feedback from, the Company’s shareholders.

  The Chairperson shall encourage active participation by the shareholders during the AGM and inform shareholders of their right to demand a poll vote at the commencement of the general meeting. The Board shall also consider adopting electronic voting to facilitate greater shareholders participation.

  The Chairperson and, where appropriate, the CEO shall respond to shareholders’ queries during the meeting. Where necessary, the Chairperson shall undertake to provide a written answer to any significant question that cannot be readily answered at the meeting.

b)

Extraordinary General Meeting (“EGM”)

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

INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

9.

INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

 
a)

The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Group and as such adopts an open and transparent policy in respect of its relationship with its shareholders and investors.

b)

The Board shall ensure the timely release of financial results on a quarterly basis to provide shareholders with an overview of the Group’s performance and operations in addition to the various announcements made during the year.

c) The Board shall ensure that the Company’s website provide easy access to corporate information pertaining to the Group and its activities and is continuously updated.

RELATIONSHIP WITH OTHER STAKEHOLDERS

10.

RELATIONSHIP WITH OTHER STAKEHOLDERS

 
In the course of pursuing the Group’s mission and goals, the Board recognises that no Company can exist by maximising shareholders’ value alone. In this regard, the needs and interests of other stakeholders shall be taken into consideration by the Board and the Management.

a)

Employees

  The Board acknowledges that the employees are invaluable resources of the Group and play a vital role in achieving the Group’s mission and goals.

  The Board is committed to promoting a safe and healthy working environment that foster mutual respect where employees irrespective of status, position and gender are treated with dignity.

b)

Environment

  The Board acknowledges the need to safeguard and minimise the impact to the environment in the course of achieving the Group’s mission and goals.

  The Board shall adopt policies and procedures as part of its commitment to protect the environment and contribute towards sustainable development.

  The Board supports initiatives on environmental issues.

c)

Social Responsibility

  The Board acknowledges that the Group should play a vital role in contributing towards the welfare of the community in which it operates.

  The Board shall adopt policies and procedures towards responsible marketing and promotion/ advertising of its products and services.

  The Board supports charitable causes and initiatives on community development projects.

COMPANY SECRETARY

11.

COMPANY SECRETARY

 
a)

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

b)

The Company Secretary shall be accountable to the Board through the Chairperson of the Board and its Committee on all governance and compliance matters.

c)

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

d)

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

 
  i)

Disclosure of interest in securities;

  ii)

Disclosure of any conflict of interest in a transaction involving the Company and the Group;

  iii)

Prohibition on dealing in securities; and

  iv)

Restrictions on disclosure of price-sensitive information.

 
e)

The Company Secretary shall keep abreast of, and inform the Board of current governance practices, changes in MMLR and the relevant regulations.

f)

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

APPLICATION OF THE BOARD CHARTER

12.

APPLICATION OF THE BOARD CHARTER

 
The principles on which this Board Charter is based are drawn and derived from the Malaysian Code on Corporate Governance 2012, Higgs Report, Main Market Listing Requirements and Corporate Disclosure Guide. The Board Charter has been prepared specifically intended to meet the requirements of the aforesaid regulations.

  The principles set out in this Board Charter are:

 
a)

Kept under review and updated as practices on Corporate Governance develop and further guidelines on Corporate Governance are issued by the relevant regulatory authorities.

b)

Applied in practice having regard to their spirit and general principles rather than to the letter alone.

c)

The Board shall endeavour to comply with the principles and practices set out in this Board Charter.

 
The provisions of this Board Charter are in addition to, and not in substitution for, any obligation imposed upon a Director by agreement, common law, equity, statute or regulation. The Directors acknowledge that compliance with this Board Charter will not relieve them from any such obligations.

REVIEW OF THE BOARD CHARTER

13.

REVIEW OF THE BOARD CHARTER

 
Directors are responsible for establishing, reviewing and updating appropriate policies, guidelines and procedures for this Board Charter. They are also required to provide advice and if appropriate, issue written opinions to Directors on matters in relation to the Board Charter that they may encounter in fulfilling their respective responsibilities.

 
The Board shall review and reassess the adequacy of the Board Charter periodically and make such amendments to the Board Charter as the Board may deem appropriate.

 
The provisions of this Board Charter can be amended and supplemented from time to time by resolution of the Board.

APPENDIX A

  APPENDIX A

  DIRECTORS’ CODE OF ETHICS

 
The directors of Amalgamated Industrial Steel Berhad hold the position of trust with the public, shareholders, other stakeholders, officers and employees as well as with each other. Therefore, it is important to establish appropriate standards of business conduct and ethical behavior to govern the exercise of the Directors’ duties and responsibilities as directors of the Company in order to uphold good corporate integrity.

  Board members are required to observe the Directors’ Code of Ethics as follows:

 
1.

Compliance at all times with this Code of Ethics and the Board Charter.

2.

Observe high standards of corporate governance at all times.

3.

Adhere to the principles of selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

4.

Act in good faith and in the best interests of the Company and Group.

5.

Not to misuse information gained in the course of duties for personal gain, nor seek to use the opportunity of the service as directors to promote their private interests or those of connected persons, firms, businesses or other organizations.

6.

Uphold accountability at all times. This includes ensuring that the Company’s resources are properly safeguarded and the Company conducts its operations as economically, efficiently and effectively as possible at all time.

7.

Board Members should not accept positions on Board Committees or working groups where a conflict of interest is likely to arise, without first declaring that interest.

8.

Declaration of any personal, professional or business interests that may conflict with directors’ responsibilities. Guidance on declaration and registration of interests is given in the section entitled “Declaration of interest” below.

9.

It is a violation of the Code for Directors to solicit or accept any gift which is deemed excessive in nature or “personal benefit” in connection with his/ her service at the Company.

For the purpose of this Code, “personal benefit” here would include but are not limited to any gifts, items of legacy, fees, rebates, rewards, commissions, services, favours, offices, employment contracts, holidays and any item where there is a likelihood that the Directors will be or will appear to have been improperly influence the objectivity of the Directors in the performance of their duties. Any other business courtesy given in an attempt to motivate the Directors to do anything that contravenes the law, regulation or the Company’s policies is also prohibited.

To this end, Directors may consult with the Chairman or the Board for advice. Directors shall not accept any personal benefit when they are placed in a position in which their views or judgement is likely to be biased.

10.

Directors are prohibited from engaging in insider trading. Restrictions apply to trading in securities of the Company while aware of confidential information about the Company that could, if it became public, affect the share price and in the securities of other companies using confidential information that the Directors have access to because of employment or service with the Company.

Insider trading is an illegal act and would expose Directors to civil and/or criminal action.

   
  Declaration of interests

  Subject to the requirements of any acts, rules or regulations that are in force from time to time and in addition to such mandatory requirements, members of the Board are required to notify the Company Secretary changes in the following:

 
1.

Shareholding in the Company and its related corporations, whether direct or indirect; and

2.

Directorships or interests in any other corporations.

  In addition to the above, member of the Board who has a material interest, either directly or through a partner, spouse or close relative, in matters being considered by, or likely to be considered by the board should declare that interest. Such declarations should describe the interest clearly and state whether it carries direct or indirect financial benefits. This requirement also applies to members of senior management.

  Relevant interests in this context are as follows:

 
1.

Executive and non-executive directorships of, significant shareholdings in, or employment by, public or private companies likely or possibly seeking to do business with the Company.

2.

Ownership or part-ownership of, or employment by, businesses or consultancies likely or possibly seeking to do business with the Company.

  Register of Interests

  The Code requires that a formal register of interests be established. The register should include details of all directorship and other relevant interests declared by Board Members and members of senior management.

  The register should be kept up-to-date through an annual survey of members’ interests, carried out by the Company Secretary.

  Conduct in Meetings

  Any Board Member who has a clear and substantial interest in a matter under consideration by the Board should declare that interest at any meeting where the matter is to be discussed, whether or not that interest is already recorded in the register. The Board Member concerned should withdraw from the meeting during the relevant discussion or decision.

  New Directorships

  Board Members should notify the Chairman before accepting any new directorships in any Public Listed companies which includes an indication of time that will be spent on the new appointment.

  Membership of Committees

  Board Members should not accept positions on Board committee or working groups where a conflict of interest is likely to arise, without first declaring that interest.

APPENDIX B

  APPENDIX B

  TERMS OF REFERENCE OF MANAGEMENT COMMITTEE

 
1.

COMPOSITION

  The Management Committee shall consist of the Chief Operating Officer/ Special Assistant to Executive Director, Head of Finance, Head of Marketing and Head of Operation under the guidance of a non-Executive Director as Chairman. If deemed fit, other additional members may be appointed into the Management Committee by the CEO/ Executive Director.

2.

MEETING

 
a.

The Management Committee shall meet at such time as the Committee deems if necessary.

b.

The quorum necessary for the transaction of the business shall be any three (3) members present.

c.

The Executive Secretary or such person as appointed by the Chairman for the purpose shall be present at all meetings of the Management Committee to record minutes of the meetings.

d.

The Management Committee shall establish its rules and procedures and fix its own agendas for the meetings.

e.

Decisions of the Management Committee shall be generally complied with and implemented and the Management Committee could, if it deems fit, stipulate directions as to the performance or implementation of its decisions.

3.

RESPONSIBILITIES

  The Management Committee shall be responsible, within the limits of the policy determined and powers delegated by the Board of Directors from time to time, for inter alia:

 
a.

Formulating Company and Group policies for recommendation to, and further consideration by the board of Directors.

b.

Implementation of key policy decisions of the Board of Directors.

APPENDIX C

  APPENDIX C

  TERMS OF REFERANCE FOR RISK MANAGEMENT COMMITTEE (“RM COMMITTEE”)

  The Board established the RM Committee in November 2007 consisting of the following members:

 
 
Chairman :Independent Non-Executive Director
Members :Non-Independent Executive Director
  : Chief Operating Officer/ Special Assistant to ED
 
  The function of the RM Committee is to assist the Board in discharging its responsibilities, particularly in:-

 
(a)

Reviewing the Group’s overall objectives by assessing the adequacy and effectiveness of risk portfolio composition and risk mitigation controls to determine the desired exposures of each major area of risk on a periodic basis.

(b)

Promoting and ensuring risk management process and culture are embedded throughout the Group.

(c)

Reviewing and assessing the adequacy of risk management policies and framework for identifying, measuring, monitoring and controlling risks as well as the extent to which these are operating effectively.

(d)

Ensuring adequate infrastructure, resources and systems are established to make risk management effective.

(e)

Identifying other corporate risks areas such as regulatory compliances, new business development and financial issues.

(f)

Establishing a task force as the main risk management unit to oversee the proper operating, reviewing and controlling of risk pertaining to functional activities.


 

 

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