BOARD OF DIRECTORS CHARTER

 

1. PURPOSE

This Board Charter clearly sets out the respective roles, responsibilities and authorities of the Board of Directors (both individually and collectively) and Management of Uchi Technologies Berhad (“UCHITEC”, “the Company” or “the Group”) and its subsidiaries in setting a direction, the management and the control of the organization.

 

This Board Charter serves a number of important functions, amongst others:

• assists the Company’s leadership in delivering good governance;
• documents the policies that the Board has decided upon to meet its legal and other responsibilities;
• serves as a reminder for the Board of the legal framework within which it operates;
• is a point of reference for dispute;
• serves as an induction tool for new directors and senior Managers;
• greatly assists in establishing effective operating procedure for a Board; and
• develops a shares understanding of the Board’s role throughout the Company.

 

2. REFERENCE

2.1 Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”)

2.2 Bursa Corporate Governance Guide

2.3 Malaysian Code on Corporate Governance

 

3. DEFINITIONS/ABBREVIATIONS

3.1 Board – Uchitec Board of Directors

 

4. PRINCIPAL RESPONSIBILITIES 

4.1. Board’s Responsibilities 

The Board of Directors is responsible to provide direction, set the Company’s value & standards and supervise the management of the business and affairs of the Company so as to ensure that its obligations to shareholders and other stakeholders are met.  

 

The Board explicitly assumes the specific duties and responsibilities as follows: 

(1) together with Management, promotes good corporate governance within the Company which reinforces ethical, prudent and professional behavior;

• foster a healthy corporate governance culture which is founded on the principles of transparency, objectivity and integrity. The Board sets “the tone from the top” by formalizing and committing to ethical values and to the extent feasible, satisfies itself as to the integrity of the Board members and Management to create a culture of integrity throughout the Company.
• Overseeing the conduct of the company’s business to evaluate whether the business is being properly managed notwithstanding that each of the subsidiaries has a separate Board of Directors, which include managing conflicts of interest, preventing the abuse of power, fraud, bribe and corruption, insider trading and money laundering.
• review reports of the Nomination & Remuneration Committee concerning the Company’s approach to corporate governance.
• review reports of the Nomination & Remuneration Committee that evaluate the director independence standards established by the Board and the Board’s ability to act independently from Management in fulfilling its duties.
• adopt written Code of Conduct and Ethics applicable to directors, officers and employees of the Company. The Board shall periodically review reports of the Audit Committee relating to compliance with, or material deficiencies from, the Code and approve changes it considers appropriate. The Board shall review reports from the Audit Committee concerning investigations and any resolutions of complaints received under the Code.
• review and assess the adequacy of its Charter from time to time, as required, to ensure compliance with any rules and regulations promulgated by any regulatory body and approve any modifications to this Charter as considered advisable.
• Periodic review and approve Code of Ethics to align with the changes in law, governance code coupled with the changes in Company’s vision, mission and business plan.

(2) direct and periodically review an anti-corruption compliance programme such as clear policies and objectives that adequately addresses corruption risk.

 

(3) review, challenge and decide on Management’s proposals for the Company, and monitor its implementation by Management;

• The Board shall bring objectivity and breadth of judgment by scrutinizing Management’s proposals and satisfy itself that Management has taken into account all appropriate considerations in tabling the proposals.
• The Board shall demarcate the day-to-day operational functions of the Management and the overall responsibilities of the Board by clarifying the duties and responsibilities of both parties.
• The Board shall ensure that the goals and targets set for Management are met and in line with the Company’s long-term objectives.

 (4) ensure that the strategic plan and operation of the Company support long-term value creation and include strategies on economic, environmental and social consideration underpinning sustainability;

• The Board shall have in place a sound Sustainability Policy to deal with sustainability-related issues, which can significantly impact the Company’s risk profile, potential liabilities, reputation and overall value.

(5) supervise and assess Management performance to determine whether the business is being properly managed;

• The Board must ensure that there are measures in place against which Management’s performance can be assessed. The Board is obligated to oversee the performance of Management whilst maintaining a relationship that is supportive yet vigilant. The Board shall put in place key performance indicators for Management to ensure the Management’s strategy and performance are aligned with the Company’s strategic objective. The KPIs should relate with the Company’s business activities, the targets set by the Board and the Company’s objectives.
• The KPIs may include the following:
  • Financial performance and targets;
  • Strategic performance in line with the Company’s strategic plan and direction including short, medium and long-term value of the business;
  • Operational performance; and
  • Corporate culture of the Company.
• receiving and considering reports from the Nomination & Remuneration Committee on the performance of the Board, Board Committee and individual Directors.

 (6) ensure there is sound framework for internal control and risk management;

• the Board shall periodically review reports provided by Management of principal risks associated with the Company’s business and operations, review the implementation by Management of appropriate systems to manage these risks and review reports by Management relating to the operation of, and any material deficiencies in, these systems.

 (7) understand the principal risk of the Company’s business and recognize that business decisions involve the taking of appropriate risk;

• The Board shall be cognizant of the significant financial and non-financial elements that could result in exposures and alter the risk profile of the Company. 

 

(8) set the risk appetite within which the Board expects Management to operate and ensure that there is an appropriate risk management framework to identify, analyse, evaluate, manage and monitor significant financial and non-financial risk;

 

(9) ensure that Senior Management has the necessary skills and experience and there are measures in place to provide for the orderly succession of Board and Senior Management;

• the Board shall be satisfied that there are plans in place to provide for the orderly succession of Board members and Senior Management including the appointment, training and monitoring of such persons.
• The Board shall ensure that candidates appointed to Senior Management positions are of sufficient caliber and that the collective competence of Senior Management would allow them to effectively lead the operations of the Company.
• The Board shall review a report of the Nomination & Remuneration Committee concerning the Company’s approach to Board and Executive compensation.

 (10) ensure that the Company has in place procedures to enable effective communication with stakeholders;

• The Board has adopted a Disclosure Policy for the Company. The Board, in conjunction with Executive Board, shall periodically review the Company’s overall Disclosure Policy, including measures for receiving feedback from the Company’s stakeholders, and Management’s compliance with such policy. The Board shall, if advisable, approve material changes to the Company’s Disclosure Policy.
• The Board has to approve the Whistleblowing policy and procedure to encourage employees to report any legitimate concerns over any wrongdoing to the Company relating to unlawful conduct, financial malpractice or dangers to the public or the environment within as well as any suspected and/ or real corruption incidents.
• The Company endeavors to keep its shareholders informed of its progress through an annual report, annual information form, quarterly interim reports and periodic press releases. In addition, the Company shall maintain on its website a contact email address that will permit shareholders to provide feedback.
• The Board shall promote effective and timely communication with its stakeholders. The procedures in this regard should include how feedback received from its stakeholders is considered by the Company when making business decisions.

(11) ensure that the Company is providing assurance to its internal and external stakeholders that it is operating in compliance with its policies and any other applicable regulatory requirements. Including the establishment of a “tone from the top” and spearheading the Company’s efforts to improve on its corruption risk management framework, internal control system, review and monitoring as well as training and communication;

 

(12) review and/ or acknowledge on the investigation outcome of whistleblowing issues, results of fraud, illegal acts or suspected violations of the Company policies involving all employees, Management and Directors;

 

(13) ensure the integrity of the Company’s financial and non-financial reporting;

• The Board should ensure that there is a sound framework on corporate reporting, including financial and non-financial reporting. Due cognizance should be given to the disclosures on corporate governance, sustainability and other non-financial aspects.

Whilst the Board may appropriately delegate its authority to Board Committees or Management, it should not abdicate its responsibility and should at all-time exercise collective oversight of the Board Committee and Management.

 

The Board should not delegate matters to Board Committee to an extent that would significantly hinder to reduce the Board’s ability to discharge its functions.

 

4.2. Role of Board Members’ and Management 

4.2.1. Role of Chairman 

The Chairman is responsible for:

(a) providing leadership for the board so that the Board can perform its responsibilities effectively;

• ensures that the Board plays a full and constructive part in the determination of the Company’s strategies and policies, and that Board decisions taken are in the Company’s best interests and fairly reflect Board’s consensus; and
• ensures that procedures are in place to govern the Board’s operations.

(b) setting board agenda and ensuring that Board members receive complete and accurate information in a timely manner;

• plans the Board meeting agenda in advance alongside the Company Secretary and the Managing Director. Other directors and key members of Management may also be consulted;
• ensures the provision of accurate, timely and clear information to the other directors; and
• ensures all directors are properly briefed on issues arising at Board meetings in a timely manner.

(c) leading Board meetings and discussions;

• ensures that adequate time is available for thorough deliberation of key issues; and
• ensures that decisions are taken on a sound and well-informed basis, including by ensuring that all strategic and critical issues are considered by the Board.

(d) encouraging active participation and allowing dissenting views to be freely expressed;

• promotes a culture of openness and debate whilst ensuring that no one director dominates the discussions; and
• obtains suggestions and comments from directors and encourages those who are less vocal to be more proactive in providing views.

(e) managing the interface between Board and Management;

• acts as the main conduit between Management and the Board; and
• develops a positive relationship with the Managing Director.

(f) ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole;

• acts as a spokesperson for the Board; and
• acts as the main representative of the Company alongside the Managing Director at shareholders’ meetings and on other occasions where key or major actions are taken or statements are made in the name of the Company.

(g) leading the Board in establishing and monitoring good corporate governance practices in the company.

• leads the creation of an effective corporate governance system, including the establishment of Board and Committee Charters, a Committee structure and induction as well as ongoing education programmes for directors; and
• oversees and facilitates Board, Committee and Board member evaluation reviews and successions planning alongside the Chairman of the Nomination & Remuneration Committee.

4.2.2. Role of Managing Director & Executive Director 

The Managing Director reports to the Chairman of the Board whilst leading the Executive Directors in the followings:

(a) Formulating and successfully implementing company strategies and policy; and 

(b) Directing strategy towards the profitable growth and operation of the company; and

(c) Developing strategic operating plans that reflect the longer-term objectives and priorities established by the Board; and

(d) Ensuring that the Company is positioned to attract and retain employees with the skills required to implement the strategic plans of the Company; and

(e) Maintaining an ongoing dialogue with the Chair of the Board; and

(f) Putting in place adequate operational planning and financial control systems; and

(g) Ensuring that the operating objectives and standards of performance are not only understood but owned by the management and other employees; and

(h) Closely monitoring the operating and financial results against plans and budgets; and

(i) Taking remedial action where necessary and informing the Board of significant changes; and

(j) Maintaining the operational performance of the company; and

(k) Assuming full accountability to the Board for all company operations; and

(l) Managing investor relations for the Company; and

(m) Building and maintaining an effective executive team; and

(n) Ensuring Board of Directors are provided with accurate and clear information in a timely manner in order to promote effective decision-making by the Board; and

(o) Ensuring all material matters affecting the Company are brought to the attention of the Board. 

 

4.2.3. Role of Individual Director 

 The role of directors includes:

(a) Showcase critical thinking in setting goals and strategies during board meetings. The personal needs of a Director cannot supersede the needs of the Board. Questions on business operations that lead to insights into strategy, performance, investment decisions, hiring or removal of key personnel and risk assessment must take priority.

(b) Contributing to Board activities to the best of their abilities and with the level of skill and care expected;

(c) Discharging their duties in good faith and honestly in the best interests of the Company;

(d) Using the powers of office for proper purpose, in the best interests of the Company as a whole;

(e) Acting with the required care and diligence, be able to challenge assumptions underlying the strategies proposed and demonstrating commercial reasonableness in their decisions;

(f) Avoiding conflict of interest, not allowing personal interests, or the interests of any associated person, to conflict with the interests of the Company;

(g) Not making improper use of information gained through their position of director;

(h) Making reasonable enquiries to ensure that the Company is operating effectively, efficiently and legally toward achieving its objectives;

(i) Undertaking diligent analysis of all proposals placed before the Board;

(j) Serving on Board committee as required;

(k) Participating in the appointment of new directors and directors’ performance evaluation;

(l) Acting in accordance with the duties and obligations imposed on them and the Board by the constitution and the law;

(m) Ensure that the minutes of meetings accurately reflect the deliberations and decisions of the Board, including whether any director abstained from voting or deliberating on a particular matter; and

(n) Refrain from any activity or behavior that could raise the perception or suspicion of any corrupt conduct or the attempt thereof.

 

In addition to the role of individual directors above, a Senior Independent Non-Executive Director shall act as a point of contact for shareholders and other stakeholders with concerns which have failed to be resolved or would not be appropriate through the normal channel of the Managing Director, Executive Director or Management of the Company.

 

4.2.4. Role of Management 

The Management is responsible to:

(a) Collect, scrutinize and elucidate strategic options to the Board for its review and consideration.

(b) Recommend the Company corporate strategy to the Board for approval and upon approval, implement the corporate strategy.

(c) Assume day-to-day responsibility for the Company’s conformance with relevant laws and regulations and its compliance framework.

(d) Achieve the performance targets set by the Board.

(e) Develop, implement and manage the Company’s internal control and risk Management framework.

(f) Develop, implement and update the Company’s policies, procedures and systems.

(g) Be alert to relevant trends in the industry and the Company’s operating environment.

(h) Provide sufficient and relevant information to the Board to enable the Board to effectively discharge its responsibilities.

(i) Act as a conduit between the Board and the Company.

(j) Manage the Company’s human, physical and financial resources to achieve the Company’s objectives.

 

4.2.5. Role of Company Secretary 

The Company Secretary is generally responsible for carrying out the administrative and statutory requirements of the Board by:

(a) managing all Board and Committee meeting logistics, attend and record minutes of all Board and Committee meetings and facilitate Board communications;

• coordinating the development of the agenda in a timely and effective manner for approval by the Chairman;
• ensure the timely dispatch of the agenda and board papers;
• ensure minutes of meetings are entered into the books within 14 days upon conclusion of the meeting.

(b) advise the Board on its roles and responsibilities;

(c) facilitate the orientation of new directors and assist in director training and development;

(d) advise the Board on corporate disclosures and compliance with company and securities regulations and listing requirements;

(e) manage processes pertaining to the annual shareholders’ meeting;

(f) monitor corporate governance developments and assist the Board in applying governance practices to meet the Board’s needs and stakeholders’ expectations;

(g) serve as a focal point for stakeholders’ communication and engagement on corporate governance issues.

 

5. COMPOSITION & BOARD BALANCE 

5.1 Size of the Board

(a) The number of Directors of the Company (disregard Alternate Directors but including Executive Directors) shall be at least 2 and not more than 15. The exact number of Directors within such range shall be fixed from time to time by resolution of the Board.

(b) The Board shall endeavor to meet a target of at least 30% women Directors on the Board to bring in a diversity of perspectives and encourage women participation during Board deliberation and decision-making process whilst achieving the Malaysian Government’s aspiration for 30% women participation at the boardroom level.

 

5.2 Composition of the Board  

The Board must ensure that at least two (2) or one-third (1/3), whichever is higher of the Board of Directors, are Independent Directors.

 

The Board’s standards for determining the independence of a Director is set forth in Appendix I to this Charter. The Nomination & Remuneration Committee will review such standards at least annually and recommend any appropriate changes to the Board for consideration.

 

5.3 Chair of the Board 

The position of Chairman and Managing Director should be held by different individuals. This is to ensure a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

 

The Chairman of the board preferably not be a member of the Audit Committee, Nomination Committee or Remuneration Committee. This is to ensure there is check and balance as well as objective review by the board.

 

5.4 Selection of Directors 

In identifying candidates for appointment of Directors, the Board shall not only rely on recommendations from existing Board members, Management or major shareholders. The Board shall utilize independent sources to identify suitably qualified candidates.

 

The Board adopts the Company’s Corporate Human Resource Policy to provide a diversity and equality work environment throughout the Company that is free of discrimination of any form whether based on an individual’s gender, race, ethnicity, age and religion. As such, the evaluation of the suitability of Board composition shall purely be based on the candidates’ competency, skills, character, time, commitment, knowledge, experience and other qualities in meeting the needs of the Company.

 

Nominees for directorship will be recommended to the Board by the Nomination & Remuneration Committee in accordance with the policies and principles set forth in its charter. The invitation to join the Board should be extended by the Board itself, by the Chairman of the Nomination & Remuneration Committee and the Chairman of the Board.

 

The Board is responsible for nominating members to the Board and for filling vacancies on the Board, in each case based upon the recommendation of the Nomination & Remuneration Committee.

 

5.5 Director Qualification 

5.5.1 Basic Requirements 

All the Directors shall be natural person and there shall be no shareholding qualification for Directors.

 

No person shall be appointed or allowed to act as a Director of the Company or be involved whether directly or indirectly in the Management of the Company, including acting in an advisory capacity in relation to the Company, if he-

 

(a) is an undischarged bankrupt;

(b) has been convicted of an offence relating to the promotion, formation or management of a corporation;

(c) has been convicted of an offence involving bribery, fraud or dishonesty;

(d) has been convicted of an offence under section 213, 217, 218, 228 and 59 of the Companies Act 2016; or

(e) has been disqualified by the Court under section 199 of the Companies Act 2016.

 

5.5.2 Desirable Characteristics 

A description of desirable characteristics that the Nomination & Remuneration Committee and the Board should evaluate when considering candidates for nomination as Directors are set forth on Appendix II to this Charter. The Nomination & Remuneration Committee will review such characteristics at least annually and recommend any appropriate changes to the Board for consideration.

 

5.5.3 Service on Other Board 

Directors may serve on the boards of other public companies provided that:

 

(a) The Director must not hold more than 5 directorships in listed issuers.

(b) These commitments do not materially interfere and are compatible with their ability to fulfill their duties as a member of the Board.

(c) These commitments do not create any actual or apparent conflicts of interest and impairments to the Director’s status as an Independent Director.

 

Directors must advise the Chair in writing in advance of accepting an invitation to serve on the board of another public company.

 

5.5.4 Disqualification and Removal of Directors 

The Constitution of the Company prescribed that the office of a Director shall be vacated if the Director:-

• Becomes bankrupt or enters into any arrangement or composition with his creditors generally.
• Cease to be a Director by virtue of any provision of the Act or becomes prohibited by law from being a Director.
• Becomes unsound mind or lunatic in Malaysia or elsewhere or an order is made by any court or other competent authority claiming jurisdiction in that behalf on the ground (however formulated) of mental disorder for his detention or for the appointment of a committee or other person (by whatever name called) to exercise powers with respect to his property and/or affairs.
• Is removed from office by ordinary resolution of the Company.
• Is convicted of any offence (whether in Malaysia or elsewhere) involving fraud or dishonesty or of an offence (whether in Malaysia or elsewhere) punishable on conviction with imprisonment for 3 months of more.
• Resigns his office by notice in writing to the Company.
• Is absent from more than 50% of the total Board of Directors’ meetings held during a financial year.

 

5.6 Board Appointment and Remuneration 

Directors shall be issued with Letter of Appointment and other relevant policies/procedures of the Company including Code of Conduct, to familiarize each new Director with his powers, duties, responsibilities and accountabilities and other matters relating to his appointment.

 

The form and amount of Director’s compensation is determined by the Board based on the Directors Remuneration Policy.

 

5.7 Retirement and Re-Election 

In accordance with the Company’s Constitution, one third of the Board members are required to retire at every Annual General Meeting and be subject to re-election by shareholders. Newly appointed directors shall hold office until the next following Annual General Meeting and shall then be eligible for re-election by shareholders.

 

Director who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years are required to submit themselves for re-appointment annually. If the board intends to retain an independent director beyond nine (9) years, it should justify and seek annual shareholders' approval through a two-tier voting process. If the Board intends to retain an independent director beyond twelve (12) years, the independent director need to be re-designated to a non-independent director.

 

5.8 Resignation from the Board 

Any Director may resign at any time by giving notice in writing or by electronic transmission to the Chairman of the Board and the Secretary of the Company. Such resignation shall take effect upon acceptance by the Board or upon receipt thereof or at any later time specified therein; and unless otherwise specified therein.

 

6 BOARD’S AUTHORITY 

6.1 The Board derives its authority from the Constitution of the Company and the relevant laws.

 

6.2 The Board of Directors is the ultimate decision making body of the Company except for matters reserved for the Company.

 

6.3 Consistent with the Board’s power to delegate to the Management the day-to-day operation of the Company’s business, the Board shall exercise judgment in establishing and revising the delegation of authority for Board Committee and Management. The delegation could be for authorization of expenditures, approval of credit facilities and for other corporate actions. Such delegation may be approved and expressed under various policies of the Company. The thresholds for the identified authorities will depend upon the operating requirements of the Company.

 

6.4 A schedule of reserved matters to be deliberated at the Board and not to be delegated is listed in Appendix III.

 

6.5 Committees of the Board 

6.5.1 The Board is authorized to establish Board Committee to assist the Board in the discharge of its duties.

 

6.5.2 Subject to applicable law, the Board may establish other Board Committees or merge or dissolve any Board Committee at any time.

 

6.5.3 Committee Charters 

Each Committee will have its own charter. The charter will set forth the purposes, goals and responsibilities of the Committees as well as qualifications for Committee membership, procedures or Committee member appointment and removal, committee structure and operations and committee reporting to the Board.

 

The Board has approved charters for each established Board Committee and shall approve charters for any Board Committee created in the future.

 

6.5.4 Delegation to Committees 

The Board has delegated to the applicable committee those duties and responsibilities set out in each Board Committee’s charter.

 

6.5.5 Committee Composition 

The Board shall appoint, as required, the members and a chair of each committee, after receiving recommendations from the Nomination & Remuneration Committee.

 

6.5.6 The recommendations of the Committees will be referred to the Board. In the event that the Board is unable to approve a decision of the Committee, the matter will be referred back to the Committee for further consideration.

 

6.6 The Board shall have unrestricted access to Management and employees of the Company. Any meetings or contacts that a Director wishes to initiate may be through the Managing Director or directly by the Director. The Directors will use their judgement to ensure that any such contact is not disruptive to the business operations of the Company and will, where appropriate, copy the Managing Director on any written communications between a Director and Supervisory Board and employees of the Company.

 

6.7 The Board shall have the authority to retain external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors. The Company shall provide appropriate funding, as determined by the Board, for the services of these advisors.

 

6.8 The Board reports to and is accountable to the shareholders of the Company.

 

7 OPERATION OF THE BOARD  

7.1. Board Meetings; Attendance at General Meetings 

7.1.1. The Chairman of the Board or Committee is responsible for ensuring Board or Committee effectiveness.

 

7.1.2. The Board of Directors meets at least four times a year, with additional meetings convened as necessary. It has a formal time schedule that is pre-determined in advance. The Committee is authorized to regulate its own frequency and calling of meetings.

 

7.1.3. Directors are expected to attend at least 50% of Board meetings and meetings of the Committees on which they serve. Directors should spend the time necessary and meet as frequently as necessary to properly discharge their responsibilities.

 

7.1.4. The Board may from time to time invite corporate officers, other employees and advisors to attend Board or Committee meetings whenever deemed appropriate.

 

7.1.5. Directors are encouraged to attend all general meetings of shareholders.

 

7.2. Appointment of Company Secretary 

The appointment and removal of the Company Secretary is subject to the approval of the Board. The Board recognizes the fact that the Company Secretary should be suitably qualified and competent Company Secretary to provided sound governance advice, ensure adherence to rules and procedures, and advocate adoption of corporate governance best practices.

 

7.3. Voting Rights 

7.3.1 A duly convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Board.

 

7.3.2 Any attendee who is not a member of the Board shall not vote on any matter coming before the Board for a vote.

 

7.3.3 All decisions of the Board will be based on a simple majority of the members present at the meeting in person. In the event of a tie, the Chairman of the Board will have a casting vote.

 

7.3.4 The Board may adopt resolutions by correspondence, including mail, electronic or fax correspondence, provided that in order for resolutions to be taken in this manner to be valid, they shall be approved by all the members.

 

7.4. Agenda Items for Board or Committee Meetings 

7.4.1 The Chairman will establish the agenda for each Board meeting. Each Director is free to suggest the inclusion of items on the agenda and is free to bring up, at any Board meeting, subjects that are not on the agenda for that meeting. The Company Secretary shall be responsible to draw up a detailed agenda and to the extent feasible, supporting documents and proposed resolutions, and circulate it at least five business days in advance before each meeting to the Board or Committee members. Directors should review these materials in advance of the meeting. Subject to any applicable notice requirements, Directors having items to suggest for inclusion on the agenda for future Board or Committee meetings should advise the Chairman well in advance of such meeting.

 

7.4.2 A range of matters that should be periodically included in a Board meeting (non-exhaustive) are as follows:

• Business planning;
• Direction and strategy formulation, including review;
• Risk Management issues and resolution;
• Budget, approval and monitoring against actual performance, including variance reporting;
• Funding requirements;
• Formulation and monitoring of key company policies;
• Evaluation of Management’s performance;
• Corporate exercises;
• Regulatory changes that impact the company’s business;
• Emerging business issues;
• Corporate disclosures and announcements;
• Investor and stakeholder relations;
• Litigation matters against the company;
• Board, committee, individual director performance assessment; and
• Board, committee, individual director training, education and development.

 

7.5 Board Resolutions and Minutes 

7.5.1 The Company Secretary shall minute the proceedings and resolutions of all Board and its Committee meetings. Upon conclusion of the meeting, all Directors shall ensure that the minutes of meetings accurately reflect the deliberations and decisions of the Board or Board Committee, including whether any director abstained from voting or deliberating on a particular matter.

 

7.5.2 Minutes of meetings shall be entered into the books within 14 days of the relevant meeting date.

 

7.5.3 Minutes will be tabled for endorsement at the subsequent meeting by the Company Secretary and approved by the Chairman of the Board of Directors and the members present at the meeting.

 

7.5.4 Content of meeting minutes (non-exhaustive) shall include the followings:

• The name of the Company;
• The time, date and place at which the meeting was held (including the time at which the meeting was opened and closed);
• Names of those present and in attendance, as well as any apologies (for absence or lateness);
• Those who arrived or left during the meeting and the time at which they did so;
• The agenda and other materials that the Board members received either before or during the meeting;
• What was decided and why-resolutions passed and actions to be taken by the Board and delegates (including deadlines);
• Fundamental questions raised and key points of discussions;
• Any dissent, abstentions and reasons provided for them. (A Director who objects to any resolution adopted by the Board shall have his objection recorded in the minutes); and
• Any conflicts of interest including what the conflict was and how the Board handled the situation.

7.5.5. All resolutions by circulation should be tabled at the subsequent Board meeting for ratification.

 

8. Director Orientation and Education 

8.1 All Directors are required to attend the Mandatory Accreditation Program and complete within the stipulated timeframe as per paragraph 2.2, Practice Note 5 of Listing Requirements.

 

8.2 The Chair will provide induction for newly appointed Directors in order to orientate themselves in the new environment and ensure that they understand:

• their role and responsibilities;
• the Board’s expectations in terms of their knowledge contribution;
• the nature of the company’s business;
• current issues faced; and
• strategies adopted by the Company.

 

8.3 Essential information contained in the induction programme are:

• Corporate information-company history, product and services information, strategic and business plans, financial accounts, major shareholders, corporate communications, business and industry environment, industry players, risk profile and appetite;
• Corporate governance framework-board charter, code of conduct and ethics, annual work plan, Board and Directors’ details, committee structure and terms of reference, board processes, assurance providers, resources available, key stakeholders, policies and procedures; and
• Management information-names and background of Senior Management, organizational and Management structure outline.

 

8.4 In order to facilitate the Directors’ fulfillment of their responsibilities regarding continuing education and to enhance each Director’s knowledge of the Company, the Company’s business operations and the latest developments in corporate governance, it is appropriate for the Company to provide Directors with the followings:

 

• Educational programs supplemental to the initial orientation to explain the Company’s business operations, including its technology, products and market position.
• Access to, or notice of, continuing educational programs that are designed to keep Directors abreast of the latest developments in corporate governance matters and critical issues relating to the operations of public company boards.
• Material that contains information pertaining to:
  • the Company’s industry; and
  • comparisons of the Company with its major competitors, if any.
• Periodic visits to operating units, plants and laboratories, normally as part of regularly scheduled Board meetings
• A legal review for the Board, at least annually, of:
  • the status of major litigation;
  • Compliance with significant regulatory requirements affecting the Company; and
  • corporate governance matters.

 

9. Executive Board Evaluation and Management Succession 

9.1 Board evaluation is an essential process for the Board to examine itself to ensure that the Board is operating efficiently and effectively. This evaluation process allows the Board to address issues such as leadership, delegation of duties and responsibilities and reviews of existing processes within the Board.

 

9.2 The Board shall perform a self-evaluation on an annual basis. The Board shall annually review its Charter and its own effectiveness and composition; and initiate suitable steps for any amendments.

 

9.3 The evaluation process shall also cover the review of the performance of each individual Board member, his attendance and his constructive involvement in discussions and decision making.

 

9.4 The Board will also review self-evaluations of the Board Committee and consider appropriately any recommendations arising out of such evaluation.

 

9.5 While the evaluation is a responsibility of the entire Board, it will be organized and assisted by the Nomination & Remuneration Committee.

 

9.6 The Board will evaluate the potential successor and approve Management succession strategies and plans for the Executive Board of the Company. The Executive Board should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

 

10. CODE OF CONDUCT, CONFLICTS OF INTEREST, INSIDER TRADING 

10.1 The members of the Board should ensure that they conduct their affairs with a high degree of integrity, taking note of applicable laws, codes and regulations.

 

10.2 The Board has approved a Code of Conduct for Directors and employees.

 

10.3 A separate Whistle Blowing Policy covering Directors and all the employee of the Company is adopted.

 

10.4 A Director shall declare to the Board any personal interest, whether direct or indirect, he may have in matters brought before the Board. This declaration shall be recorded in the minutes and the interested Director shall not participate in the debates or voting on the resolutions to be adopted in this respect.

 

10.5 Any decision to enter into transactions, under which the Directors would have conflicts of interest that are material, shall be formally and unanimously approved by the full Board. Directors must inform the entire Board of (potential) conflicts of interest in their activities with, and commitments to other organisations as they arise and abstain from voting on the matter. This disclosure must include all material facts in the case of a contract or transaction involving the Directors.

 

10.6 The Board of Directors has established Insider Trading Policy with the primary objective of preventing abuse of inside information.

 

11. COMMUNICATION WITH STAKEHOLDERS 

11.1. The Company has established Corporate Disclosure Policy to ensure informative, timely and accurate disclosure of material information concerning the Company to the public.

 

11.2. The Board will ensure that the Annual General Meeting (AGM) is conducted in an efficient manner and serves as a crucial mechanism in active shareholder communications. Key ingredients behind this include the supply of comprehensive timely information to shareholders and the encouragement for their active participation in the AGM.

 

11.3. Shareholders are invited by the Chairman to attend the AGM. The Chairman and other Directors attend the AGM and will be available to answer any questions.

 

11.4. The Company is at all times mindful and conscious of its regulatory and statutory obligations regarding dissemination of information to its stakeholders.

11.5. The Company maintains a corporate website at www.uchi.net to provide all relevant information about the Company and is accessible by the public.

 

Appendix I

 

INDEPENDENT DIRECTOR 

 

Independent director means a director who is independent of Management and free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of the Company. Without limiting the generality of the foregoing, an independent director is one who:

 

(a) Is not an executive director of the Company or any related corporation of the Company (each corporation is referred to as “said Corporation”);

 

(b) Has not been within the last 3 years and is not an officer (except as a non-executive director) of the said Corporation. For this purpose, “officer” has the meaning given in section 2 of the Companies Act 2016;

 

(c) Is not a major shareholder of the said Corporation;

 

(d) Is not a family member of any executive director, officer or major shareholder of the said Corporation;

 

(e) Is not acting as a nominee or representative of any executive director or major shareholder of the said Corporation;

 

(f) Has not been engaged as an adviser by the said Corporation under such circumstances as prescribed by the Exchange or is not presently a partner, director (except as an independent director) or major shareholder, as the case may be, of a firm or corporation which provides professional advisory services to the said Corporation under such circumstances as prescribed by the Exchange; or

 

(g) Has not engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange or is not presently a partner, director or major shareholder, as the case may be, of a firm or corporation (other than subsidiaries of the Company) which has engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange.

 

The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. Should the Board intends to retain the Director as Independent after he/she has served a cumulative term of nine (9) years, the Board must justify and seek annual shareholders' approval through a two-tier voting process. If the Board intends to retain an independent director beyond twelve (12) years, the independent director need to be re-designated to a non-independent director.

 

In assessing whether the long-serving independent director continues to be “independent in mind”, the Board should consider if the said Director displays the following key characteristics:

(a) possesses sufficient self-esteem and confidence to stand up for an independent point of view;

(b) approaches any transaction that requires Board’s approval with a watchful eye and an inquiring mind (professional scepticism);

(c) is unafraid to express an unpopular stance on issues or express disagreement on matters and actively pursues them with the rest of the Board and with the management; and

(d) does not shy away from asking hard and uncomfortable questions during Board deliberations and willing to delve deeper if the responses provided are not satisfactory.

 

 

 

Appendix II

 

 

Desirable Characteristics of Directors

 

1. Personal Characteristics

• Integrity and Accountability: Ethical standards, integrity and strength of character in his or her personal and professional dealings and a willingness to act on and be accountable for his or her decisions
• Informed Judgment: Demonstrate intelligence, wisdom and thoughtfulness in decision making. Demonstrate a willingness to thoroughly discuss issues, ask questions, express reservations and voice dissent
• Financial Literacy: An ability to read and understand balance sheet, income and cash flow statements. Understand financial ratios and other indices for evaluating Company performance.
• Mature Confidence: Assertive, responsible and supportive in dealing with others. Respect for others, openness to others’ opinions and the willingness to listen.
• High Standards: History of achievements that reflect high standards for himself or herself and others.

 

2. Core Competencies

• Accounting and Finance: Experience in financial accounting and corporate finance, especially with respect to trends in debt and equity markets. Familiarity with internal financial controls.
• Business Judgment: Record of making good business decisions and evidence that duties as a Director will be discharged in good faith and in a manner that is in the best interests of the Company
• Management: Experience in corporate Management. Understand Management trends in general and in the areas in which the Company conducts its business
• Crisis Response: Ability and time to perform during periods of both short-term and prolonged crisis.
• Industry/Technology: Unique experience and skills in an area in which the Company conducts its business, including science, manufacturing and technology relevant to the Company.
• International Markets: Experience in global markets, international issues and foreign business practices.
• Leadership: Understand and possess skills and have a history of motivating high-performing, talented managers.
• Strategy and Vision: Skills and capacity to provide strategic insight and direction by encouraging innovations, conceptualizing key trends, evaluating strategic decisions, and challenging the Company to sharpen its vision.

 

3. Commitment to the Company

• Time and Effort: Willing to commit the time and energy necessary to satisfy the requirements of the Board and Board Committee membership. Expected to attend and participate in all Board meetings and Board Committee meetings in which they are a member. Encouraged to attend all annual meetings of shareholders. A willingness to rigorously prepare prior to each meeting and actively participate in the meeting. Willingness to make himself or herself available to Management upon request to provide advice and counsel.
• Awareness and Ongoing Education: Possess, or be willing to develop, a broad knowledge of both critical issues affecting the Company (Including industry, technology and market specific information), and director’s roles and responsibilities (Including the general legal principles that guide board members.
• Other Commitments: In light of other existing commitments, ability to perform adequately as a Director, including preparation for and attendance at Board meetings and annual meetings of the shareholders, and a willingness to do so.

 

4. Team and Company Considerations

• Balancing the Board: Contributes talent, skills and experience that the Board needs as a team to supplement existing resources and provide talent for future needs.
• Diversity: Contributes to the Board in a way that can enhance perspective and judgment through diversity in gender, age, ethnic background, geographic origin, and professional experience (public, private, and non-profit sectors). Nomination of a candidate should not be based solely on these factors.

 

 

Appendix III

 

Schedule of Matters Reserved for the Board

 

1. Strategy and Management

1.1 Responsibility for the overall leadership of the Company and setting the Company’s values and standards

1.2 Approval of the Group’s long-term objectives and overall business strategy

1.3 Approvals of the annual operating and capital expenditure budgets and any material changes to them

1.4 Oversight of the Group’s operating ensuring: Competent and prudent Management Safe and secure operations Sound planning Maintenance of sound Management and internal control systems; Adequate accounting and other records; and Compliance with statutory and regulatory obligations.

1.5 Review of performance in the light of the Group’s strategic aims, objectives, business plans and budgets and ensuring that any necessary corrective action is taken

1.6 Extension of the Group’s activities into new business or geographic areas

1.7 Any decision to cease to operate all or any material part of the Group’s business

2. Structure and Capital

2.1 Changes relating to the Group’s capital structure including reduction of capital, share issues (except under employee share option scheme), share buy backs (including the use of treasury shares) and entering into any material debt and financing arrangements.

2.2 Major changes to the Group’s corporate structure, including but not limited to acquisitions and disposals of shares which are material relative to the size of the Group in question (taking into account initial and deferred consideration).

2.3 Changes to the Group’s Management and control structure

2.4 Any changes to the company’s listing or its status as a plc

3. Financial Reporting and Control

3.1 Approval of the half-yearly report, interim Management statements and any preliminary announcement of the final results.

3.2 Approval of the annual report and accounts (including the corporate governance statement and directors’ remuneration report)

3.3 Approval of the dividend policy

3.4 Declaration of the interim dividend and recommendation of the final dividend

3.5 Approval of any significant changes in accounting policies or practices

3.6 Approval of treasury policies (including foreign currency exposure and the use of financial derivatives)

3.7 Approval of material unbudgeted capital or operating expenditures (outside pre-determined tolerances)

4. Internal Controls

4.1 Ensuring maintenance of a sound system of internal control and risk Management including: Approving the company/groups risk appetite statements; Receiving reports on, and reviewing the effectiveness of the Group’s risk and control processes to support its strategy and objectives, including the Groups Risk Register; Approving procedures for the detection of fraud and the prevention of bribery; Undertaking an annual assessment of these processes; and Approving and appropriate statement for inclusion in the annual report.

4.2 Determining the nature and extent of the significant risks the Group is willing to take in achieving its strategic objectives.

5. Contracts (above 5% of consolidated total assets)

5.1 Approval of major capital projects (and oversight over execution and delivery)

5.2 Contracts which are material strategically or by reason of size, entered into by the Company (or in case of a subsidiary, recommendation for approval) in the ordinary course of business, for example bank borrowings and acquisitions or disposals of fixed assets above xx million (including intangible assets such as intellectual property save for assets acquired in the normal course of business

5.3 Contracts of the company (or any subsidiary) not in the ordinary course of business, for example loans and repayment, foreign currency transactions; major acquisitions or disposals

5.4 Major investments (including the acquisition or disposal of interests of more than (3) percent in the voting shares of any Company or the making of any takeover offer)

6. Communication

6.1 Ensuring a satisfactory dialogue with shareholders based on the mutual understanding of objectives.

6.2 Approval of resolutions and corresponding documentation to be put forward to shareholders at a general meeting.

6.3 Approval of all circulars, prospectuses and listing particulars (approval of routine documents such as periodic circulars about scrip dividend procedures or exercise of conversion rights could be delegated to a committee.)

6.4 Approval of press releases concerning matters decided by the Board.

7. Board membership and other appointments

7.1 Changes to the structure, size and composition of the board following recommendations from the Nomination & Remuneration committee

7.2. Ensuring adequate succession planning for the Board and consult with Senior Management over the succession planning for Executive Committee members so as to maintain an appropriate balance of skills and experience within the company and on the Board.

7.3 Appointments to the Board, following recommendations by the Nomination & Remuneration Committee

7.4 Selection of the Chairman of the Board and the Executive Board

7.5 Appointment of the Senior Independent Director to provide a sounding board for the Chairman and to serve as intermediary for the other director when necessary

7.6 Membership and chairmanship of Board Committees following recommendations from the Nomination & Remuneration Committee

7.7 Continuation in office of directors at the end of their term of office, when they are due to be re-elected by shareholders at the AGM and otherwise as appropriate.

7.8 Continuation in office of any director at any time, including the suspension of the company, subject to the law and their service contract

7.9 Appointment or removal of the company secretary

7.10 Appointment, reappointment or removal of the external auditor to be put to shareholders for approval in general meeting, following the recommendation of the Audit Committee.

7.11 Appointments to Board of subsidiaries

8. Remunerations

8.1 Determining the remuneration policy for the Directors, company secretary and other senior executives following recommendations from the Nomination & Remuneration Committee

8.2 Determining the remuneration of the non-executive directors, subject to the shareholder approval as appropriate, following recommendations from the executive directors

8.3 Determining the remuneration of the Executive Directors, following recommendations from the Nomination & Remuneration Committee.

8.4 The introduction of new share incentive plans or major changes to existing plans, to be put to shareholders for approval

9. Delegation of Authority

9.1 The division of responsibilities between the Chairman and the Managing Director (and other executive directors) which should be clearly established, set out in writing and agreed by the Board

9.2 Approval of the delegated levels of authority, including the Managing Director authority limits (which must be in writing)

9.3 Establishing Board Committees and approving their terms of reference, and approving material changes thereto.

9.4 Receiving reports from Board Committees on their activities

10. Corporate Governance Matters

10.1 Undertaking a formal and rigorous annual review of its own performance, that of its committees and individual directors, and the division of responsibilities.

10.2 Determining the independence of non-executive directors in light of their character, judgment and relationships

10.3 Considering the balance of interests between shareholders, employees, customers and the community.

10.4 Review of the Group’s overall corporate governance arrangements

10.5 Receiving reports on the views of the Company’s shareholders to ensure that they are communicated to the Board as a whole.

10.6 Authorising conflicts of interest where permitted by the Company’s Constitution.

11. Policies

11.1 Approval of policies, including amongst others: Code of Conduct; Insider Trading Policy; Whistleblowing Policy; Anti-Bribery and Corruption Policy; Health and Safety Policy; Environment and Sustainability Policy; and Corporate Social Responsibility Policy;

12. Other

12.1 Approval of the appointment of the Group’s principal professional advisers.

12.2 Prosecution, commencement, defence or settlement of litigation, or an alternative dispute resolution mechanism (involving above 5% of consolidated total assets or being otherwise material to the interest of the Group)

12.3 Approval of the overall levels of insurance for the Group including directors’ & officers liability insurance (and indemnification of directors)

12.4 Major Changes to the rules of the Groups’ pension scheme, or changes of trustees or (when this is subject to the approval of the company) changes in the fund management arrangements

12.5 Any decision likely to have a material impact on the Company or Group from any perspective, including, but not limited to, financial, operational, strategic or reputational.

12.6 This schedule of matters reserved for Board decisions.

 

Matters which the Board considers suitable for delegation are contained in the terms of reference of its committees.

 

The Board will receive reports and recommendations from time to time on any matter which it considers significant to the Group.