Updated on 23 April 2019

BOARD CHARTER

OF

BUMI ARMADA BERHAD

(Company No. 370398-X)
Board Charter – Index

1. Introduction and Objectives

2. Vision & Mission, Core Values and Guiding Principles

2.1 Vision & Mission
2.2 Core Values / Ethos
2.3 Guiding Principles

3. Responsibilities of the Board

3.1 Powers of the Board
3.2 Principal Responsibilities
3.3 Division of Roles and Responsibilities
3.4 Board Committees
3.5 Schedule of Matters Reserved for the Board
3.6 Relationship of Board with Management
3.6.1 Delegation of Authority – Limits of Authority
3.6.2 Support of Company Secretary
3.7 Ethics and Compliance
3.7.1 Code of Business Conduct and Ethics for Directors
3.7.2 Code of Ethics for Employees
3.8 Stakeholder Communication
3.9 Corporate Disclosure Policy and Procedure
3.10 Corporate Sustainability

4. The Board
4.1 Board Composition
4.1.1 Number of Directors
4.1.2 Personal Particulars and Qualification Standards
4.1.3 Independence
4.1.4 Diversity
4.1.5 Review of Board Composition
4.2 Nomination and Selection of Candidates
4.3 Appointment to Board
4.4 Terms of Appointment
4.5 Tenure
4.6 Rotation and Retirement
4.7 Vacation of Office
4.8 Removal
4.9 Limits on Directorships
4.10 Annual Assessment
4.11 Succession Planning
4.12 Induction
4.13 Continuing Development and Training
4.14 Access to Information
4.15 Independent Professional Advice

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5. Board Meetings
5.1 Calling of Meetings
5.2 Notice of Meetings
5.3 Schedule and Frequency of Meetings
5.4 Supply of Papers
5.5 Quorum of Board Meetings
5.6 Attendance at Board Meetings and Time Commitment
5.7 Proceedings
5.8 Decision Making and Circular Resolution
5.9 Voting
5.10 Committee Meetings
5.11 Minutes

6. Disclosure by Directors
6.1 Conflict of Interest
6.2 Related Party Relationships
6.3 Dealings and Interest in Securities
6.4 Undertaking to Bursa Malaysia Securities Berhad

7. Administrative
7.1 Application
7.2 Annual Review
7.3 Amendment of Charter
7.4 Publication of Charter

Appendix A Detailed roles and responsibilities of the Chairman, Chief Executive Officer and Non-
Executive and Independent Directors

Appendix B Detailed roles and responsibilities of a Company Secretary

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Board Charter

1. Introduction and Objectives

The Board of Directors (“Board”) of Bumi Armada Berhad (“Company”) has overall responsibility
for the proper conduct of the Company’s business and assumes responsibility for effective
stewardship and control of the Company’s assets and is a key decision-making body of the
Company.

The Board Charter (“Charter”) lays down clearly the responsibilities, functions and terms of
reference within which the Board, Board Committees and individual Directors play their roles
distinct from the management (“Management”). Its essence is as follows:

• it is subject to the provisions of relevant legislations, regulations, The Malaysian Code on

Corporate Governance (“CG Code”) and other codes of conduct and the Constitution of
the Company (“Constitution”):
• it sets out the duties and processes of the Board which all Board members are to be aware
of;
• it will act as a source of reference to prospective Board members;
• it is a means of providing Directors serving and coming on board, clarity as to their roles
and responsibilities and principal matters reserved for the Board, the Board Committees
and as to the different roles they as Directors; and
• the process by which the Board and Board Committees function including the scheduling,
calling and convening of Board meetings and other matters affecting their affairs and for
them to play an effective role.

2. Vision & Mission, Core Values and Guiding Principles

The Company has in place a Vision and Mission and is guided by certain Core Values which the
organisation strives towards. It subscribes to values of good governance and responsible
corporate conduct/behaviours and aims to achieve excellence in its business, operational and
corporate dealings.

2.1 Vision & Mission

VISION
To be the preferred provider of offshore production and support services to our clients.

MISSION
• To operate and deliver on our commitments to the satisfaction of our stakeholders,
safely, on time and within budget.
• To add value by effectively managing risks through a hands-on approach
• To continuously improve our capabilities and to apply the lessons learnt to the way
we work
• To ensure good governance in all our practices, reduce our environmental footprint,
support our local communities and promote social sustainability awareness
wherever we operate.

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 2.2 Core Values

The four core values of the Group can be represented by “SURE” as an acronym
(a) Safe
(b) United
(c) Responsible
(d) Excellent

2.3 Guiding Principles

The Board regards the guiding principles to be:

(a) Integrity and Ethics: In all its dealings, the Board shall conduct itself with integrity
and ethics, in the best interest of the Company, its shareholders, and fairly to its
minority shareholders, employees and other stakeholders. In this regard, the
Directors shall also be guided by a Code of Business Conduct and Ethics for
Directors.

(b) Transparency: The Board is committed to ensuring proper governance of its

business and affairs by adhering to laws and regulations and adequate and timely
disclosures of relevant information as applicable which are pertinent to its
stakeholders.

(c) Responsibility and Accountability: In order to have accountability for outcomes

of actions to the relevant stakeholders, the Board believes it is imperative for there
to be clear lines of responsibilities and authorities. In this regard, the Board has
adopted certain principal responsibilities and has provided for clear lines of
responsibilities and authorities have been established for the Board, Chairman,
Board Committees, Non-Executive Directors, CEO and Management. This will hold
Management accountable to the Board and the Board accountable to the
shareholders and other stakeholders where relevant. Directors shall also apply
proper skill, care and diligence in carrying out their statutory and fiduciary duties to
the Company and other stakeholders.

(d) Leadership and Controls: The Board shall provide leadership and direction to the
Company, establish its objectives and set the strategies to achieve its objectives
through proper oversight and controls. Directors shall use appropriate controls to
protect, preserve and enhance value for shareholders and in providing effective
stewardship in this regard.

3. Responsibilities of the Board

3.1 Powers of the Board

The Board has all the powers necessary for managing and for directing and supervising
the management of the business and affairs of the Company as prescribed under the
Companies Act 2016 (“Act”) and the Constitution subject to any modifications, exceptions
or limitations contained in the Act or the Constitution.

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 In exercising their powers, Directors should have regard to Section 213 of the Act which
states that a Director of a Company shall at all times:
• exercise his powers for a proper purpose and in good faith in the best interest of the
Company;
• exercise reasonable care, skill and diligence with the knowledge, skill and
experience which may reasonably be expected of a Director having the same
responsibilities and
• apply any additional knowledge, skill and experience which the Director in fact has.

In addition to the above, in exercising his powers, a Director should also have regard to
the following:
• Use of good business judgment;
• Proper and good reliance on information provided by others;
• His responsibility as Director;
• His responsibility for actions of delegate; and
• Prohibition against improper use of Company’s property, position, corporate
opportunity or competing with the Company.

3.2 Principal Responsibilities of the Board

In performing and discharging its responsibilities and facilitating its ongoing oversight of
the Company, the Board’s role includes, but is not limited to the matters in this section.

In order to ensure effective discharge of the Board’s functions, the Board has assumed the
following 8 principal responsibilities:

(a) Setting Group’s strategic aims, reviewing and adopting and monitoring the
implementation of a strategic plan for the Group - The Board has responsibility
for setting the Group’s strategic aims in meeting obligations to shareholders and
stakeholders, support long terms value creation and includes strategies on
economic, environmental and social considerations underpinning sustainability. The
Board continuously reviews, challenges and approves Management’s proposal on
strategic plans for the Company and its subsidiaries. The Board is also responsible
for monitoring the implementation of the strategic plan by Management.

(b) overseeing the conduct of the Group’s business - The Board is responsible for
the oversight of the performance of the Management to determine whether the
business is being properly managed

(c) identifying principal risks and ensuring the implementation of appropriate

controls and mitigation measure - The Board is responsible for understanding the
principal risks of all aspects of the Company’s business and recognise that business
decisions involve the taking of appropriate risks, in achieving a proper balance
between risk incurred and potential returns to shareholders and ensure that there
are systems in place which effectively monitor and manage these risks

(d) succession planning - The Board is responsible for ensuring that all candidates
appointed to senior management positions are of sufficient calibre and shall ensure
that there are programmes in place to provide for the orderly succession of senior
management.

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 (e) overseeing the development and implementation of a shareholder’
communications policy for the Group - The Board is responsible for ensuring that
the Company has in place a policy to enable effective communication with its
shareholders and other stakeholders. Such policy shall include how feedback
received from stakeholders is considered by the Company when making business
decisions

(f) reviewing the adequacy and the integrity of Management and internal control
systems of the Group - The Board is responsible for ensuring that there are sound
framework of reporting on internal controls, financial and non-financial matters and
regulatory compliance

(g) providing leadership and assurance on effective management and monitoring

of health, safety and environment risks - The Board is responsible for ensuring
that the Company implements a management system relating to Health, Safety,
Security, Environment and Quality (“HSSEQ”) based on the goal of zero harm to
personnel, with safety risks being As Low As is Reasonably Practicable (“ALARP”)
in respect of major accident hazards and the adoption of Best Available Technology
(“BAT”) and practices to minimise harmful emissions to the environment.

(h) promoting good corporate governance culture within the Group which
reinforces ethical, prudent and professional behaviour - The Board, together
with senior management, is responsible for fostering a healthy corporate
governance culture which is founded on the principles of transparency, objectivity
and integrity. The Board continues to set the “tone from the top” by formalising and
committing to ethical values.

Recommended changes may be made from time to time to suit the circumstances or
changes in governing regulations.

3.3 Division of Roles and Responsibilities

There are distinct divisions of roles and responsibilities between the Board, Board
Committees, the Chairman of the Board, the Senior Independent Director, the CEO,
Executive and Non-Executive Directors and Management. The positions of Chairman and
CEO shall be held by separate individuals, for check and balance. The Chairman is
presently an Independent Non-Executive Director and should continue to be he held by an
Independent Non-Executive Director.

The Chairman is responsible for creating the conditions necessary for overall Board and
individual Directors effectiveness, drawing on their respective knowledge, experience and
skills.

His role includes:

• providing leadership at Board level;
• setting the tone for Board discussions and deliberations with a view to promoting
effective decision-making and performance monitoring to promote the success of
the Group;

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 • setting the tone for the Company’s values and standards to ensure that obligations
to its shareholders and other stakeholders are understood and met.
• reviewing with the Board the organisational structure including the composition of
Board Committees with the assistance of the Nomination and Corporate
Governance Committee (“NC”) with the objective to see if it serves the needs of the
Company and Board;
• setting the Board agenda with input and advice from the CEO (with primary focus
on strategy, value creation, governance and accountability) and ensuring timely flow
of high quality supporting information;
• together with the Board and based on the work of Board Committees, determining
the nature and extent of risk appetite of the Company;
• ensuring there is a proper selection, and assessment process and training
programmes for Directors;
• together with the other Board Members monitoring the implementation of Board
decisions and directions and performance of Management; and
• presiding over shareholder meetings and representing the Company at certain key
events.

The Senior Independent Director acts as an additional safeguard and point of contact for
investors and shareholders.

His/ her role includes:

• serving as a sounding board for the Chairman
• serving as the principal conduit between independent directors and the Chairman
on sensitive issues;
• acting as an intermediary for other directors where necessary; and
• the point of contact for shareholders and other stakeholders on areas that may not
be appropriate to be communicated to either the Chairman or the CEO.

The CEO, whether or not an Executive Director, on the other hand has overall
responsibilities:
• for the direction, performance of the operational, business and support units and
achievement of the corporate and commercial objectives of the Group including
managing the expansion and optimisation of revenue and earnings of each of the
businesses and enhancing the capital value of the Group;
• for working with and advising the Board in defining the strategic, corporate and
commercial objectives of the organisation, preparing its business and operational
plans and seeing to their implementation as well as the implementation of the
policies, directives and decisions as approved by the Board.
• for providing leadership to Management and having direct oversight for the
operational, financial, organisational and corporate performance and effectiveness
striving for operational excellence, driving and supporting health, safety, security,
environment and quality initiatives as well as commitment to corporate sustainability.

The detailed roles and responsibilities of the Chairman, Chief Executive Officer (“CEO”)
and Non-Executive and Independent Directors are broadly set out in Appendix A hereto.

3.4 Board Committees

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 3.4.1 The Board may carry out its responsibilities and functions directly, or through Board
Committees or Management by way of delegation as they think fit and may from
time to time revoke such delegation.

3.4.2 Each Board Committee whether standing or ad hoc shall have and function within
their own remits as approved by the Board.

3.4.3 The following are and shall be the standing committees of the Board:
(a) Audit Committee;
(b) NC;
(c) Remuneration Committee; and
(d) Risk Management Committee.

3.4.4 These Committees assist the Board in reviewing, scrutinising and submitting
matters within their purview and make decisions and/or recommendations to the
Board as thought fit, for the Board’s consideration and approval. The ultimate
responsibility for the final decision on all matters, however, lies with the entire Board
after considering recommendations by the Committees.

3.4.5 Each committee is governed by the Terms of Reference duly approved by the Board.

3.5 Schedule of Matters Reserved for the Board

In discharging its responsibilities, the Board has reserved decision making responsibility
for certain key matters to ensure the control of the Company is vested with it. A Schedule
of Matters Reserved for the Board has been adopted and shall be reviewed and revised
from time to time as necessary.

Amongst others, the following are some key matters reserved for the Board:

• Budget Approvals;
• Changes to the Constitution;
• Changes to Management and Control Structure
• Major Acquisitions and Disposals;
• Strategy Setting;
• Business Plans;
• New Business and ventures;
• Investments and divestments;
• Significant Major Related Party Transactions;
• Opening and closing of bank accounts and authorising signatories to the same;
• Terms of Reference of Board Committees;
• Terms of Appointment of Executive and Non-Executive Directors;
• Limits of Authority;
• Alterations of Capital and new issuance of securities;
• Corporate Restructurings;
• Modification of Class Rights;
• Appointment and Vacation of office of Directors;
• Matters relating to Loans, Borrowings and giving of guarantees; and
• Other transactions requiring Board and Shareholders approvals.

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3.6 Relationship of Board with Management

3.6.1 Delegation of Authority – Limits of Authority (“LOA”)

In order for efficient functioning of the Company, the Board shall delegate powers
authorities and discretion to Management by way of properly framed and formulated
Manual on LOA with the requisite control and check and balance. Matters beyond
the limits allocated to Management shall be vested with the Board.

The LOA shall be reviewed and revised from time to time to suit changes in the
operational, organisational and regulatory circumstances. All revisions to the LOA
must be brought to the attention of and have the approval of the Board or to any
Board Committee as authorised by the Board.

In delegating its powers or authorities, the Board shall ensure that the delegates
have the necessary competency skills for exercising their delegated duties.

3.6.2 Support of Company Secretary

Directors understand that the Company, being a public listed company has a need
for a qualified and competent Company Secretary to support and advise the Board
and management towards fulfilling the primary responsibility of ensuring compliance
with provisions of companies and securities laws and regulations. In the
appointment of a Company Secretary, the Board recognises the need for such
person to be suitably qualified and competent in the manner prescribed under the
Act and has the depth of experience and expertise to provide sound governance
advice, ensure adherence to rules and procedures, and advocate adoption of
corporate governance best practices to support the Board and the Company.

All Directors shall have access to the advice and services of the Company Secretary
who ensures that proper processes and procedures are in place and adhered to
towards fulfilling the primary responsibility of compliance and to facilitate the
effective functioning of the Board, including the convening, conduct and record of
proceedings and decisions of the Board and Board Committees.

The duties of a Company Secretary, among others, are to:

• advise the Board members on their duties and obligations, the appropriate
requirements, disclosures and procedures to be established in relation
thereto including the management of their meetings;
• ensure statutory records of the Company are properly maintained and
relevant disclosures, submissions and filings are made on a timely fashion to
the regulators on behalf of the Company and the Board;
• manage processes pertaining to the general meeting of the shareholders;
• monitor corporate governance developments and assists the Board in
applying governance practices to meet the Board’s needs and stakeholders’
expectations; and
• serve as a focal point for stakeholders’ communication and engagement on
corporate governance issues.

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 The detailed roles and responsibilities of a Company Secretary are set out in
Appendix B hereto.

The appointment and removal of the Company Secretary is a matter for the Board
as a whole.

3.7 Ethics and Compliance

3.7.1 Code of Business Conduct and Ethics for Directors

The Board has established a standard of ethical behaviour for directors based on
trustworthiness and values that can be accepted, are held or upheld by any one
person and to uphold the spirit of responsibility and social responsibility in line with
the legislation, regulations and guidelines for managing a company.

The Code of Business Conduct and Ethics for Directors is available on the
Company’s corporate website.

3.7.2 Code of Ethics for Employees

The Board is also responsible to ensure employees are governed by and made
aware of and declare compliance with a formal Code of Ethics for Management to
ensure systems and processes are in place to ensure compliance and impose
attendant penalties for non-compliance.

To reinforce the standards prescribed in the Code, the Board has also established
a Whistle Blowing Policy and Procedure to promote responsible corporate conduct
across the Group.

The Code of Ethics for Employees is available on the Company’s corporate website.

3.8 Stakeholder Communication

As the Board is accountable to the shareholders and other stakeholders, the Board places
importance on how information and decisions which will have an impact on them are
disseminated and communicated to them.

The Board is committed to transparency and accountability in its disclosures to promote

effective communication with its shareholders and other stakeholders from time to time.

An effective communication policy enables both the Board and Management to

communicate effectively with its shareholders, stakeholders and the public generally. This
policy effectively interprets the operations of the Company to the shareholders and
accommodates feedback from shareholders, which are then factored into the Company’s
business decisions.

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 3.9 Corporate Disclosure Policy and Procedure

The Board understands the need for timely and accurate disclosures in compliance with
the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad
(“Bursa Securities”) and for proper procedures and processes to be in place in ensuring
the maintenance of confidentiality and proper handling of material price sensitive
information, prior to them being announced to Bursa Securities.

As such, a Corporate Disclosure Policy and Procedures to meet compliance under the
MMLR and ensure good governance practices has been developed.

3.10 Corporate Sustainability

In recognising there is increased focus on the way business is run with attention given to
how businesses impact the economy, environment and society, a sustainability committee
has been set up to oversees the corporate substantiality initiatives. Regular updates are
provided to the Board on the progress of such initiatives which the Board can provide
feedback and advice.

4. Managing Board Affairs and Ensuring Board Efficiency

4.1 Board Composition

4.1.1 Number of Directors

The Constitution specifies that the number of Directors shall not be less than 3 nor
more than 15. Until otherwise determined by the Company in general meeting the
number of Directors shall be as stated above.

4.1.2 Personal Particulars and Qualification Standards

The Board shall comprise of a fair balance of Executive, Non-Executive and

Independent Directors to equitably represent the interests of the Company, the
shareholders (both minority and majority) and other stakeholders and shall satisfy
the requirements under the MMLR that at least one-third of the Board be comprised
of Independent Directors as well as the provisions of the CG Code. The Company
has established a set of criteria to assess the Independence of Directors with
reflecting back to the CG Code and MMLR.

Any new developments or circumstances or conflicts that may affect the role a
Director serves in will be taken into cognisance and assessed to ensure these do
not contravene any statutory or regulatory requirements or compromise the
effectiveness of the role. Each Director undertakes to disclose any interest in or
changes thereto in shares or pecuniary interests or in any circumstances which
affect their roles or gives rise to conflict as and when they occur and on a timely
basis.

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 The qualifications and working or professional experience possessed by Directors
reflect the education and mix of skills and competencies desired by the Board to
achieve success. Each Director must exercise good business judgment and must
be a person of integrity.

The Board welcomes and encourages diversity in its membership and in the Board
Committees to the extent it will enable the Board to meet and achieve its wider
corporate and strategic aspirations and objectives. The current Board has a
composition of Directors with a fair mix in terms of qualifications, skills,
competencies and gender diversity, age and nationality to contribute towards those
aspirations.

4.1.3 Independence

The Board has in place a policy and a criterion for independence of Independent
Directors, as prescribed in the MMLR and any applicable regulations from time to
time. The Independent Directors are to disclose circumstances that may arise which
may impair their independence from time to time.

The Independent Directors provide an effective check and balance in the functioning
of the Board. They shall play a pivotal role in corporate accountability as they provide
unbiased and independent views, advice, opinions and judgment at Board and
Board Committee deliberations, with regard to the interest of minority shareholders
and other stakeholders. None of the Non-Executive Directors participates in the day-
to-day management of the Group.

4.1.4 Diversity

A Boardroom Diversity Policy which addresses the current diversity gaps has been
adopted and will be reviewed from time to time. Its main aim is to identify what
attributes are lacking from the current Board to make it more diversified as to and to
seek out excellent and right people in the industry and business the Company is in
and to lead the Company to achieve its commercial and corporate goals.

4.1.5 Review of Board Composition

The NC shall be responsible for the review and recommendation of the composition
and membership of the Board and Board Committees and their remits and shall from
time to time, recommend any relevant proposals to the Board for consideration and
further action.

4.2 Nomination and Selection of Candidates

The NC shall formulate the nomination and selection policies for appointment to the Board
and Board Committees and shall recommend to the Board the candidates for directorships
to be filled by the shareholders or the Board.

In making its recommendations, the NC shall identify the existing gaps, consider the
candidates’ skills, knowledge, expertise and experience, professionalism and integrity.
Once a candidate is selected for the said position, the NC is to conduct a fit and proper

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 assessment determining the candidates’ ability to discharge such responsibilities /
functions as are expected before interacting with the candidate(s). From there, NC will
then deliberate and make its recommendations to the Board.

Nomination and Selection Framework:

Identification of Gaps / Skills

Search for potential Candidates

Fit and Proper Assessment

Interaction with Candidates

NC Deliberation

Recommendation for Board Approval

In addition to reviewing the composition and determining if additional Board members are
required, the NC shall also ensure that at least one-third of the Board is independent and
that the investment(s) of the minority shareholders are fairly reflected in the Board.

4.3 Appointment to Board

The appointment of a new Director to the Board will be done in line with Rules 116 and
132 of the Constitution and is a matter for consideration and decision by the full Board
upon appropriate recommendation of the NC.

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.

4.4 Terms of Appointment

Each Director will have his/her terms of appointment which will set out the scope and
powers of his / her duties. Directors are expected to adhere to the scope therein and to
fully understand his / her roles and responsibilities.

4.5 Tenure

A Director can only serve in an independent capacity for a term of nine years as provided
for under the criteria for independence assessment as prescribed under the CG Code.

Although long tenure may incline towards or be perceived as compromising independence,

the Board will review its position and criteria from time to time to ensure that Independent
Directors who have the necessary knowledge, skills and competencies and exercise
independent and objective judgement, play their part effectively on the Board in the best

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 interest of the Company and satisfy the independence criteria are not excluded based
merely on the nine-year tenure criteria.

If the Board is satisfied that an Independent Director meets the qualifications and criteria
in the preceding paragraph and intends to retain him on the Board, the approval of
shareholders will be procured annually at the general meeting to allow for the continued
service beyond 9 years, as required. However, the Board will consider the demands of
local and global standards of governance in this regard, before making any such
recommendation. The Director concerned will abstain from any deliberations at the Board
or Board Committee levels on his proposed retention.

4.6 Rotation and Retirement

At the annual general meeting in every year, one-third of the Directors for the time being
or, if their number is not 3 or a multiple of 3, then the number nearest to one-third, shall
retire from office Provided Always that all Directors including Managing Director and
Executive Directors shall retire from office once at least in each 3-years but shall be eligible
for re-election. A retiring Director shall retain office until the conclusion of the annual
general meeting at which he retires. Election of Directors shall take place each year at the
Company’s annual general meeting subject as mentioned.

The Directors to retire in every year shall be those who have been longest in office since
their last election, but as between Directors of equal seniority, the Directors to retire shall
(unless they otherwise agree among themselves) be determined from among them by lot.

4.7 Vacation of Office

The office of Director shall become vacant if the director

(a) falls within the circumstances set out in section 208 of the Act
(b) is absent from more than 50% of the total board of directors’ meetings held during
a financial year; or
(c) is convicted by a court of law, whether within Malaysia or elsewhere, in relation to
the offences set out in below:
(i) has been convicted by a court of law, whether within Malaysia or elsewhere,
of an offence in connection with the promotion, formation or management of
a corporation;
(ii) has been convicted by a court of law, whether within Malaysia or elsewhere,
of an offence, involving bribery, fraud or dishonesty or where the conviction
involved a finding that he acted fraudulently or dishonesty; or
(iii) has been convicted by a court of law of an offence under the securities laws
or the corporation laws of the listed issuer’s place of incorporation,

If the office of a Director is vacated for any reason, he shall cease to be a member of any
committee or sub-committee of the Board.

4.8 Removal

The Company may by ordinary resolution of which special notice has been given, remove
any Director before the expiration of his period of office, pursuant to the Act,
notwithstanding any provisions of the Constitution or of any agreement between the
Company and such Director but without prejudice to any claim he may have for damages

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 for breach of any such agreement. The Company may by ordinary resolution appoint
another person in place of a Director so removed from office and any person so appointed
shall be subject to retirement by rotation at the same time as if he had become a Director
on the day on which the Director in whose place he is appointed was last elected a Director.
In default of such appointment, the vacancy so arising may be filled by the Directors as a
casual vacancy.

4.9 Limits on Other Directorships and commitment of time for Board’s affairs

Directors shall be aware of the limits of directorships they can have in public listed
companies quoted on Bursa Securities. The Company Secretary shall obtain updates of
the other directorships of Directors every quarter to monitor compliance with the limit.

They are also required to ensure they commit time and effort for the Board and Board
Committee meetings and other affairs of the Board in an effective way.

Protocol in accepting directorship

The Director concerned must notify the Board Chairman prior to accepting any new
directorship outside the Group and indicate the amount of time that is expected to be spent
on the new appointment. In the case of the Board Chairman considering any new
directorship, he shall notify the Senior Independent Director prior to accepting the new
directorship.

4.10 Annual Assessment

The Board, Board Committees’ and Directors’ performance will be assessed annually
based on the expectations set out in this Charter. With the various positions held by each
Director on the Board and Board Committees and the roles the different Board Committees
play, they are expected to meet the expectations set for each position as these are crucial
to the long-term success of the Company.

The Board may undertake this assessment internally or through the engagement of
external professional consultants to develop the criteria for such assessment as
recommended by the NC. The Board has also adopted a policy and procedure and criteria
for the assessment of independence of Independent Directors. The policy and procedure
also provide for assessment to be undertaken when new members are to be appointed to
the Board in an independent capacity, prior to their appointment. The policy and criteria
will be reviewed from time to time.

4.11 Succession Planning

The Board acknowledges that succession planning is essential for the sustainability and
continued success of the organisation. Besides having programmes to identify, the Board,
with the assistance and recommendation of the NC shall source and develop talents of the
right calibre for key positions at senior and middle management levels for future
succession. The Board, through the NC, shall also focus on planned succession at the
helm of the Company for the longer term.

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4.12 Induction

The Company has put in place a Directors’ Induction and Training Policy & Programme for
new Directors to guide and enlighten the new Directors on the business and dealings of
the Company.

The Policy has been developed in relation to the knowledge enhancement of Directors and
to create awareness in them of their various duties, responsibilities and obligations on their
personal capacity as Directors.

4.13 Continuing Development and Training

The Board encourages Directors to attend educational / training programmes to keep

themselves abreast of and updated in relation to new developments pertaining to the laws
and regulations and changing commercial environment and risks which may affect the
Board and/or the Company.

In addition to the Mandatory Accredited Programme (MAP) as required by the Bursa

Securities, Board members are also encouraged to attend training programmes conducted
by highly competent professionals and which are relevant to the Company’s operations
and business and to keep abreast with latest developments. The Board will assess the
training needs of the Directors and disclose in the Annual Report the training attended by
the Directors.

The Company Secretaries facilitate the organisation of internal training programmes and
Directors’ attendance at external programmes, and keep a complete record of the training
received or attended by the Directors.

4.14 Access to Information

The Board members have unrestricted access to information required to enable them to
discharge their duties in accordance with established procedures. Directors may access
such information as they individually or collectively consider necessary to fulfil their
responsibilities and permit independent judgment in decision making.

Directors shall be entitled to have access to members of the senior management at any
time to request for relevant and additional information in accordance with Board approved
procedure.

4.15 Independent Professional Advice

The Board has agreed to a protocol for access to information pertaining to the Company
and for seeking independent professional advice necessary for the Board and Board
Committee members to discharge their duties effectively and in furtherance of their duties.
Any expenses incurred in seeking such advice are borne by the Company.

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5. Board Meetings

5.1 Calling of Meetings

A Director may, and the Secretary at the request of a Director shall, summon a meeting of
the Directors at any time provided reasonable notice is given. Regular meetings are
scheduled up front in every calendar year.

5.2 Notice of Meetings

Notice of a meeting of the Directors is deemed to be duly given to a Director if it is given

to him personally or by electronic communication to an address given by him to the
Company for that purpose or sent in writing to him at his last-known address or another
address given by him to the Company for that purpose. A Director may waive the
requirement that notice be given to him of a meeting of the Directors, either prospectively
or retrospectively provided that the waiver is made and signed by the Director in writing.

5.3 Schedule and Frequency of Meetings

Board meetings are scheduled at the onset of the calendar year and an annual Schedule
of Meetings with an indication of the key business items for each meeting is circulated to
all Directors.

The Board meets at least five times a year, with additional meetings convened when
decisions on urgent matters are required between scheduled meetings. Upon consultation
with the Chairman and the CEO, due notice is given to all Directors of all meetings.

5.4 Supply of Papers

Regular and ad-hoc reports are provided to all Directors to ensure that they are apprised
on key strategic, financial, business, operational, legal, regulatory, corporate human
resource and social responsibility matters in a timely manner and to enable them to make
meaningful and effective decisions. Procedures have been established concerning the
content, presentation and timely delivery of papers for each Board and Board Committee
meetings as well as for matters arising from such meetings. The Company Secretary
assists in the management and coordination of this process.

Actions on all matters arising from any meeting are reported at the following meeting. The
Directors also have access to the Company Secretary and any advisor, should they need
to do so.

5.5 Quorum of Board Meetings

The quorum necessary for the transaction of the business of the Directors shall be 2.

5.6 Attendance at Board Meetings and Time Commitment

All Directors have to comply with the requirement of attendance at a minimum of 50%
attendance at Board meetings as provided for in the MMLR.

15
 All Directors must demonstrate their commitment to the business of the Board and Board
Committees and affairs of the Company, by making time for all meetings and key events,
towards fulfilling their roles and responsibilities as Directors of the Company. Commitment
to the time necessary to carry out their duties as Directors will be a condition of their
appointment.

5.7 Proceedings

The Directors may meet for the despatch of business at such time and place, adjourn and
otherwise regulate their meetings and proceeding as they think fit. A Director may at any
time summon a meeting of the Directors.

5.8 Decision Making and Circular Resolutions

All strategic decisions and business decisions are made at Board Meetings after due
processes, discussions and deliberations.

Where appropriate, decisions may also be taken by way of circular resolutions in between
Scheduled meetings. Such resolutions are signed by all the Directors (other than those
who may have an interest or conflict with the matter being decided upon) and valid as if it
has been passed at a Board Meeting duly called and constituted.

All such resolutions shall be described as "Directors' Circular Resolutions" and shall be
forwarded or otherwise delivered to the Secretary without delay, and shall be recorded by
the Secretary in the Company's Minutes Book. Any such resolution may consist of several
documents in like form, each signed by one or more Directors or their alternates.

5.9 Voting

Any questions arising at a Board Meeting is decided by a simple majority of votes and the
Chairman has a second and casting vote. A Director is required to abstain from
deliberations and voting in respect of any contract or proposed contract or arrangement or
transaction in which he / she has direct or indirect interest. A Director may cast a dissenting
vote and the minutes should properly record any dissenting views or vote of such Director.

5.10 Board Committee Meetings

The Board Committees generally meet quarterly or as prescribed under their respective
Terms of Reference, at the minimum unless any Committee decides to meet more
frequently as deemed necessary, to deliberate on matters under their purview. Board
Committees which meet quarterly, normally hold their meetings at least one day before or
on the same day as the quarterly scheduled Board meetings.

5.11 Minutes

The Directors shall cause minutes to be duly entered in books provided for the purpose –
(a) of all appointments of managers and secretaries;
(b) of the names of all the Directors present at each meeting of the Directors and of any
Committee of Directors and of the Company in general meeting;

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 (c) of all resolutions and proceedings of general meetings and of meetings of the
Directors and Committees of Directors; and
(d) of all orders made by the Directors and any Committee of Directors.

Such minutes shall be signed by the Chairman of the meeting at which the proceedings
were held or by the Chairman of the next succeeding meeting and if so signed, shall be
conclusive evidence of the proceedings to which it relates without any further proof of the
facts thereon stated. The minutes shall be maintained by the Company Secretary.

6. Disclosure by Directors

Directors shall take cognisance of all disclosure obligations.

6.1 Conflict of Interest

In respect of potential conflicts of interest, the Board must be comfortable that there is no
undue risk involved and that all conflicts and related party transactions are disclosed and
are strictly dealt with in accordance with the provisions of the Act and MMLR.

The Act requires directors to act honestly and use reasonable diligence in the discharge
of their duties at all times. It further prohibits the improper use of information obtained by
virtue of their position as directors to obtain, directly or indirectly, an advantage for
themselves or for others, or to cause harm to the Company.

Directors also owe fiduciary duties to the Company to:

(a) act in good faith in the company’s interests;
(b) exercise due care and skill in the discharge of their duties; and
(c) avoid conflict between their duties and their private interests, among other things.

The Act and the MMLR subject the Directors to disclosure requirements.

Every Director shall comply with the provisions of Sections 221 and 219 of the Act in
connection with the disclosure of his/her interest contracts or proposed contract with the
Company and in connection with the disclosure of the fact and the nature, character and
extent of any office or possession of any property whereby whether directly or indirectly,
duties or interests might be created in conflict with his duty or interest as a Director of the
Company as well as any interest or changes in shares or options of the Company or
personal particulars of the Director.

6.2 Related Party Relationships

Directors must disclose the name(s) of any related party and nature of the related party
relationship where conflict exists, irrespective of whether or not there have been
transactions between the related parties.
If there have been transactions between related parties, during the existence of a related
party relationship, Directors must disclose the following among others:
(a) the name of the transacting related party;
(b) a description of the relationship between the parties;
(c) a description of the nature of transactions;

17
 (d) value of the transactions either as an amount or as an appropriate proportion;
(e) any other elements of the related party transactions necessary for an understanding
of the financial statements;
(f) amounts written off or written back in the period in respect of debts due from or to
related parties.

6.3 Dealings and Interest in Securities

Substantial shareholders, Directors and senior executives of the Company are regarded
as insiders under the Act, the MMLR and/or the Capital Markets and Services Act 2007,
and are prohibited from making improper use of the information obtained by virtue of their
position in order to obtain an advantage for themselves or any other person.

However, Directors are limited in their ability to deal in the Company's shares by reason of
their position as insiders and or while in possession of insider information.

Pursuant to Chapter 14 of the MMLR, Directors and principal officers of the Company are
restricted from dealing in securities of the Company during closed periods (as defined
under the MMLR, which will be notified to the Directors from time to time) and when in
possession of material unpublished price sensitive information affecting the Group,

Directors may deal in the shares of the Company during the closed periods subject to
complying with the following conditions:

(a) Before any proposed dealing in the shares of the Company, a written notice of
intention to deal with the shares must be given to the Company.

(b) Upon receipt of the notice, the Company will immediately make an announcement
to Bursa Securities, with among others, the following information:
• The director's current shareholdings in the Company; and
• The director's intention to deal in shares of the Company during closed period.

(c) The proposed dealing could only be effected after one (1) full market day from the
date of the announcement made pursuant to paragraph (a) above.

(d) a written notice of dealing in shares of the Company must be given to the Company
within one (1) full market day after the dealing and the Company will immediately
make an announcement of such dealing to Bursa Securities. The following
information should be included in the notice and announcement:
• date of dealing;
• consideration for the dealing; and
• number of shares purchased or disposed, both in absolute terms and as a
percentage of all issued shares of that class.

For dealings outside closed periods, Directors must give written notice of the dealing to
the Company within 3 market days after the dealing, and the Company will make an
immediate announcement to Bursa Securities of such dealing.

Directors who possess inside information relating to the Company must not deal in the
shares of the Company.

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 6.4 Undertaking to Bursa Securities

It is a requirement for the Directors to give an undertaking to Bursa Securities within 14

days or other such period as prescribed from the date of appointment that they will comply
with the requirements under the MMLR.

7. Administrative

7.1 Application

The principles set out in this Charter are applied in practice having regard to their spirit and
general principles rather than to the letter alone; and the Board endeavours to comply at
all times with the principles and practices set out in this Charter.

7.2 Periodic Review

This Charter will be periodically reviewed to ensure the needs of the Company are met as
well as to encompass any development in rules and regulations that may have an impact
on the discharge of the Board’s duties and responsibilities.

7.3 Amendment of Charter

The Board will make any necessary amendments to ensure they remain consistent with
the Board’s objectives, current laws and governance practices. Any updates to the
principles and practices set out in this Charter will be made available on the Company’s
corporate website.

7.4 Publication of Charter

This Charter was adopted by the Board and is published on the Company’s Website for
easy access and viewing and as required under the CG Code.

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Appendix A

1. Chairman

The Chairman primarily focus on

• Uphold the highest standards of integrity and probity.
• Lead the Board in establishing and monitoring good corporate governance practices and
systems in the Company.
• Set the agenda, style and tone of board discussions to promote effective decision making
and constructive debate.
• Encourage active participation and dissenting views to be freely expressed. He also
ensures Board decisions are made on a sound and well-informed basis;
• Ensure that they are fully informed about all issues on which the board will have to make
a decision, through briefings with the CEO, the company secretary, and members of the
senior management as appropriate.
• Ensure clear structure for, and the effective running of, Board committees.
• Ensure effective implementation of board decisions.
• Promote effective relationships and open communication between executive and non-
executive directors both inside and outside the boardroom, ensuring an appropriate
balance of skills and personalities.
• Build an effective and complementary board, and with the NC, initiate change and plan
succession in board appointments (except that of a successor as Chairman) subject to
board and shareholder approval.
• With the assistance of the company secretary, promote the highest standards of corporate
governance, seeking compliance with the Combined Code. If full compliance is not
possible, ensure that the reasons for non-compliance are fully understood, agreed by the
board and explained to shareholders.
• Ensure an appropriate balance is maintained between the interests of shareholders and
other stakeholders (employees, customers, suppliers and the community).
• Ensure the long-term sustainability of the business.
• Ensure the continual improvement in quality and calibre of the executives.
• Establish a close relationship of trust with the CEO, and Chief Financial Officer (“CFO”),
providing support and advice while respecting executive responsibility.
• Provide coherent leadership of the company, including, in conjunction with the Chief
Executive, representing the company to customers, suppliers, governments, shareholders,
financial institutions, the media, the community and the public.

The Chairman is responsible for:

➢ Meetings
• Chairing board and general meetings.
• Running the board and ensuring its effectiveness in all aspects of its role, including
regularity and frequency of meetings.
• Setting the board agenda, taking into account the issues and concerns of all board
members. The agenda should be forward looking, concentrating on strategic matters.
• Ensuring that there is appropriate delegation of authority from the board to executive
management.

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 • Ensuring that the directors receive accurate, timely and clear information, including that on
the company’s current performance, to enable the board to make sound decisions, monitor
effectively and provide advice to promote the success of the company.
• Managing the board to allow enough time for discussion of complex or contentious issues.
The Chairman should ensure that directors (particularly non-executive directors) have
sufficient time to consider critical issues and obtain answers to any questions or concerns
they may have and are not faced with unrealistic deadlines for decision making.

➢ Directors
• providing leadership at the Board level in ensuring the Board is able to effectively discharge
its responsibilities;
• setting the tone for the Company’s values and standards to ensure the obligations to its
shareholders and other stakeholders are understood and met;
• working together with the Board and based on the work of the Board Committees,
determine the nature and extent of risk appetite of the Group;
• working with the Board in ensuring there are proper selection, assessment and training
programmes for the Directors;
• Facilitating the effective contribution of non-executive directors and encouraging active
engagement by all members of the board.
• Ensuring constructive relations between the executive and non-executive directors.
• Holding meetings with the non-executive directors without the executives present.

➢ Induction, development and performance evaluation

• Ensuring that new directors participate in a full, formal and tailored induction programme,
facilitated by the company secretary.
• Ensuring that the development needs of directors are identified and, with the company
secretary having a key role, that these needs are met. The directors should be able to
continually update their skills and the knowledge and familiarity with the company required
to fulfil their role on the board and its committees.
• Identifying the development needs of the board as a whole to enhance its overall
effectiveness as a team.
• Ensuring the performance of the board, its committees and individual directors are
evaluated at least once a year and acting on the results of such evaluation by recognising
the strengths and addressing the weaknesses of the board. Where appropriate, through
the NC, proposing that new members be appointed to the board or seeking the resignation
of others.

➢ Relations with shareholders

• Ensuring effective communication with shareholders.
• Maintaining sufficient contact with major shareholders to understand their issues and
concerns, in particular discussing governance, strategy and remuneration with them.
• Ensuring that the views of shareholders are communicated to the board as a whole so that
all directors develop an understanding of their views.

➢ AGM
• Arranging for the Chairmen of board committees to be available to answer questions at
the AGM and for all directors to attend.

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2. Chief Executive Officer

Chief-Executive

The Chief Executive is accountable and reports to the board and is responsible for running the
group’s business.

The Chief Executive is responsible for the following, within the authority limits delegated
to them by the Board:

➢ Business Strategy and Management

• Developing group objectives and strategy having regard to the group’s
responsibilities to its shareholders, customers, employees and other stakeholders.
• The successful achievement of objectives and execution of strategy following
presentation to, and approval by, the board.
• Recommending to the board an annual budget and 5 years financial plan and
ensuring their achievement following board approval.
• Optimising as far as is reasonably possible the use and adequacy of the group’s
resources.

➢ Investment and Financing

• Examining all trade investments and major capital expenditure proposed by
subsidiary companies and the recommendation to the group board of those which,
in a group context, are material either by nature or cost.
• Identifying and executing acquisitions and disposals, approving major proposals or
bids.
• Leading geographic diversification initiatives.
• Identifying and executing new business opportunities outside the current core
activities.

➢ Risk Management and Controls

• Managing the group’s risk profile, including the health, safety, security and
environmental performance of the business, in line with the extent and categories
of risk identified as acceptable by the board.
• Ensuring appropriate internal controls are in place.
➢ Board Committees
• Making recommendations on remuneration policy, executive remuneration and
terms of employment of the senior executive team, including the company secretary
to the Remuneration Committee.
• Making recommendations to the NC on the role and capabilities required in respect
of the appointment of executive directors.

➢ Communication
• Providing a means for timely and accurate disclosure of information, including an
escalation route for issues.
• Ensuring effective communication with shareholders.

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 ➢ Others
• Setting group HR policies, including management development and succession
planning for the senior executive team and approving the appointment and
termination of employment of members of that team.

The duties to fulfil these responsibilities include:

• Leading the executive directors and the senior executive team in the day to day running of
the group’s business, including chairing the Executive Committee and communicating its
decisions/recommendations to the board.
• Ensuring effective implementation of board decisions.
• Regularly reviewing the operational performance and strategic direction of the Company’s
business.
• Regularly reviewing the group’s organisational structure and recommending changes as
appropriate.
• Formalising the roles and responsibilities of the senior executive team, including clear
delegation of authorities.
• Supervising the activities of subsidiary companies’ most senior executives.
• Developing senior teams within subsidiaries and ensuring succession planning.
• Developing the following policies for board approval and then implementing them.
• Formulating and establishing Codes of ethics and sound business practices
• Formulating and establishing policies, risk controls and standards for Health, Safety,
Security, Environment and Quality Management (to be reviewed annually)
• Formulating and establishing an Investor Relations and Communications policy (including
procedures for the release of price sensitive information)
• Formulating and establishing a Corporate Sustainability policy
• Ensuring that all group policies and procedures are observed and conform to the best
practice standards.
• Together with the Chairman, providing coherent leadership of the Company, including,
representing the Group to customers, suppliers, government, shareholders, financial
institutions, employees, the media, the community and the public.
• Keeping the Chairman informed on all important matters.

3. Non-Executive and Independent Directors

The Non-Executive (“NE”) and Independent Directors are responsible for the following, within the
authority limits delegated to them by the Board:
• Review, approve or disapprove Management’s corporate strategy proposal. In doing so,
they should bring objectivity and breadth of judgement to the strategic planning process,
as they are not involved in the day to day management of the business. If they are to
independently judge the merits of a Management’s proposal concerning strategic or
business plans, they need to evaluate elements, which should be taken into account in the
process of creating the strategic plan for the Company. They are also responsible in
monitoring Management’s success in implementing the strategy.
• Oversee the conduct of the Company’s business and to evaluate whether the business is
properly managed. In this respect, they must ensure that there are objectives in place
against which Management’s performance can be measured.
• Develop position descriptions for the Board and for the CEO together with the CEO and
the full Board, involving definition of the limits to Management’s responsibilities. In addition,
the NE Directors should approve, or develop with the CEO, the corporate objectives, which
the CEO is responsible for meeting.

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• Ensure the highest calibre of Senior Management when appointing, training, assessing
and providing for succession. The key to the effective discharge of this particular task is to
provide for the best CEO for the job.
• Represent their interests on the Board in the case of NE Directors representing substantial
shareholders and to provide a balanced and independent view to the Board. Independent
Non-Executive Directors (“INED”) however should bring independence of judgement and
objectivity to Board deliberations.
• Acquire and provide the necessary skill and experience to bring an independent judgement
to bear on the issues of strategies, performance and resources including key appointments
and standards of conduct.
• Keep abreast of issues relating to the Company between meetings.
• Meet regularly with the Board, with due notices of issues to be discussed and should record
its conclusions in discharging its duties and responsibilities. The NE Directors and INEDs
should be required to disclose the number of Board meetings held in a year and the details
of attendance of each individual Director in respect of meetings held to enable
shareholders to evaluate the commitment of a particular Director to the affairs of the
Company.
• Committed to a collective decision-making process.
• Ensure that at the notice of meetings state which Directors are standing for election or re-
election with a brief description to include matters such as age, relevant experience, list of
directorships, date of appointment to the Board, details of participation in Board
committees and the fact that a particular director is independent in the case of re-election
of Directors.
• Appoint as the Company Secretary someone who is capable of carrying out the duties to
which the post entails and their removal should be a matter for the Board as a whole.
• Acknowledge the recommendations for improving the quality of Annual General Meetings
as set forth by the Code, the NE Director and INED should ensure that each item of special
business included in the notice must be accompanied by a full explanation of the effects
of a proposed resolution.
• Maintain an effective communications policy that enables both the Board and Management
to communicate effectively with its shareholders, stakeholders and the public generally.
This policy must effectively interpret the operations of the Company to the shareholders
and must accommodate feedback from shareholders, which should be factored into the
Company’s business decisions. The NE Director, INED and/or Management should also
conduct a business presentation with a question and answer session.

Outline rules to determine the materiality of any transaction and should establish clearly which
transactions require multiple Board signatures. Board should also agree on the procedures to be
followed especially when decisions are required between Board meetings. In addition, provide a
formal schedule of matters specifically reserved to the Board should be maintained for its decision
to ensure that the direction and control of the Company are firmly in its hands.

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Appendix B

Company Secretary

The role of a Company Secretary includes:

(i) Corporate governance advisory

(a) ensuring that adequate processes and procedures are in place and adhered to for the
effective functioning of the Board;
(b) advising the Board on various matters including Directors’ duties, disclosure obligations,
compliance with companies and securities laws, regulatory requirements and corporate
governance developments;
(c) assist the Board in applying governance practices to meet the Board’s needs and
stakeholders’ expectations;
(d) facilitating training programme for Directors and induction programme for new Directors;

(ii) Compliance advisory

(a) providing updates and assist the Board and management with reviewing regulatory
requirements related to company and securities regulations and listing requirements as
well as analysis of status of compliance and action plans;
(b) advising the Board on disclosure requirements relating to material information to
shareholders and regulators in a timely manner;
(c) notifying the Board of any possible non-compliance issues;
(d) establishing guidelines on dealing in shares pursuant to MMLR;

(iii) Information flows and meetings

(a) setting the agenda, convening, facilitating proper conduct and recording proceedings and
decisions of the Board and Board Committees;
(b) ensuring an appropriate level of communication between the Board and its committees
and between senior management and the Non-Executive Directors;

(iv) Regulatory compliance

(a) ensuring statutory and meeting records of the Company are properly maintained;
(b) ensuring relevant disclosures, submissions and filings are made in a timely manner to the
regulators on behalf of the Company and the Board;

(v) Stakeholder communication

(a) managing processes pertaining to the annual shareholder meeting; and
(b) serve as a focal point for stakeholders’ communication and engagement on corporate
governance issues.

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