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  INTRODUCTION
 
 


The Board Charter sets out the principal functions, authority, composition, roles and responsibilities of the Board of Directors of CSC Steel Holdings Berhad (“CHB” or “Company”) to assist the Board members to be aware of their duties and responsibilities.

  PRINCIPAL RESPONSIBILITIES OF THE BOARD
 
 

Business Performance

  • Reviewing and approving major business plans of the Group which are more than 5% of the Group’s NTA and direction of the Company;
  • Overseeing and evaluating overall performance of the Company and the Group;
  • Evaluating and approving major capital expenditures and all major corporate transactions.

Risk Management and Internal Control System

  • Reviewing the principal risks of the Group and to ensure the implementation of appropriate internal control and risk management system.

Integrity of Financial Reporting

  • Reviewing the adequacy and the integrity of the management information and internal controls system of the Group;
  • Ensuring regulatory compliance with applicable laws, regulations, rules, directives and guidelines.

  ROLES OF CHAIRMAN AND GROUP MANAGING DIRECTOR
 
 

The Role of Chairman
The Chairman should undertake, amongst others, the following responsibilities:

  • Monitoring the workings of the Board, especially the conduct of board meetings;
  • Ensuring the provision of accurate, timely and clear information to members of the Board;
  • Ensuring the integrity and effectiveness of the governance process of the Board;
  • Encouraging all directors to play an active role in board activities; and
  • Ensuring effective communication with shareholders and relevant stakeholders.

The Role of Group Managing Director (GMD)
The key duties and responsibilities of GMD are as follows:

  • Developing the strategic direction of the Group, with consultation and approval of the Board;
  • Ensuring the effective implementation of the Group’s business plan and policies to achieve the corporate objectives;
  • Overseeing the day-to-day running of the business and executing the board’s instructions;
  • Monitoring performance results against business plans; and
  • Ensuring compliance with governmental procedures and regulations as well as good governance practices.
  BOARD COMPOSITION
 
 

Number of Directors
The Board determines the Board size and composition, subject to limits imposed by the Company’s Articles of Association. The Articles of Association provides for a minimum of two (2) directors and a maximum of nine (9).

Independent and Make-up
The Main Market Listing Requirements (“MMLR”) of Bursa Malaysia stipulates that at least one-third (1/3) or at least two (2) Directors of the board of directors of a listed issuer, whichever is higher, must be independent directors. The Board shall comply with Bursa Securities LR as may be amended from time to time in respect of the composition of the Board.

Recommendation 3.2 of the Malaysian Code on Corporate Governance 2012 (the “MCCG 2012”) recommends that the tenure of an independent director should not exceed a cumulative term of nine (9) years.

Upon completion of the nine (9) years, an independent director may continue to serve on the board subject to that director’s re-designation as a non-independent director. However, Recommendation 3.3 of the MCCG 2012 recommends that the board may retain as an independent director, a person who has served in that capacity for more than (9) years provided the shareholders’ approval has been obtained.

Appointments and Re-election to the Board
The Articles of Association of the Company provides that all directors, including the managing director, shall retire from office at least once every three (3) years and all retiring directors shall be eligible for re-election at the annual general meeting (“AGM”) in which they retire. A retiring director shall remain in office until the close of the meeting at which he retires.

The Articles further provide that directors who are appointed by the Board during the financial period before an AGM are subject to retirement and shall be eligible for re-election by the shareholders at the immediate coming AGM of the Company to be held following the new directors’ appointment.

Roles of Board Committees
The Board has established the following committees which shall be operated under clearly defined terms of reference:
(a) Audit Committee;
(b) Nominating Committee

The Chairman of the respective Committees has an obligation to report and update the Board on their deliberations, findings and recommendations.

  Audit Committee
The main purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities relating to accounting and reporting practices of the Group.

The Audit Committee shall collectively discharge the following functions:
  1. review and report the Group’s financial statements to the Board for the Board’s assessment and approval;
  2. Determine whether management has implemented policies ensuring the Group’s risks are identified and evaluated and that entered contracts in placed are adequate and effective to address the risks.
  3. recommend the nomination of a person or persons as external auditors.
  4. report promptly to the Exchange where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.
  Nominating Committee
The role of the Nominating Committee is to ensure that the Group recruits, retains, trains and develops the best available executive and non executive directors and manage board renewal and seccession effectively. The Committee is also required to evaluate the effectiveness of the Board as a whole, the various committees of the Board and to assess the contribution of each individual director to the effectiveness of the Board’s decision-making process on an annual basis.

  DIRECTOR’S TRAINING
 
 


The Board does not pre-determine formal training programme for the Directors, each of them is aware of the need to continually undergo training appropriate to their needs in line with Paragraph 15.08 (3) of Bursa’s MMLR. The Nominating Committee has been tasked to review the training programme for the Board.

  BOARD MEETINGS
 
 

Proceeding
The Board may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. A Director may, whenever he thinks fit, and the Secretary shall on his requisition summon a meeting of the Directors.

Notice of Meeting
Prior to the convening of a Board meeting, the notice and agenda for that Board meeting is transmitted to each Board member followed shortly with hard copies of the relevant Board Papers.

The Board Papers contain information pertinent to the matters to be deliberated at the coming meeting and any other details or information the Directors may additionally require on the agenda items, would be furnished upon request.

Quorum for Board Meeting
Under the Articles of Association, the quorum for the Board meeting shall be 3 members.

Frequency of Meeting
The Board, chaired by the Group Managing Director, meets on a quarterly basis where one of the key agenda is to review and approve the quarterly results of the Group prior to its release to the public. Additional ad-hoc meetings may be called should the need arise.

  COMPANY SECRETARIES
 
 


The Company Secretaries’ primary role is to advise the Board and its Committees on issues relating to compliance with Bursa Securities LR, laws, rules, procedures and regulations affecting the Company and the Group.

  MATTERS RESERVED FOR THE BOARD
 
 

The following are matters reserved for collective decision of the Board which may be varied from time to time as determined by the Board:-

  1. Approval of limits of Authority including any amendments thereto.
  2. Approval of material acquisition or disposal.
  3. Approval of audited account and quarterly financial results and statements.
  4. Approval of New business activities in non-traditional areas within the objects of the Company.
  5. Approval of Interim Dividends.
  6. Approval of Terms of reference of Board Committees, including Board Charter.
  7. Appointment and/or removal of Company Secretary.
  8. Appointment or removal of External Auditors and approval of Auditors’ remuneration.
  9. Approval of changes to share capital and/or debt structure in relation to macro structure such as debt equity ratio setting, overall debt amount – does not pertain to individual debt facilities, unless amount is over limit of the operating Company’s limits of authority.
  10. System Approvals (new or change to existing systems) which are fundamental to the operation of the business.
  11. Review of Related Party Transactions (“RPT’s) or Non-Mandated Recurrent RPTs in accordance to Bursa Listing’s requirements.
  12. Approval of opening or closing of bank accounts.
  13. Authorised Signatories for the operation of bank accounts including any amendments thereto.
  14. Approval of Terms of Appointment of Executive and non-Executive Directors.
  15. Approval of formation/dissolution of Company.
  16. Approval of changes in group structure e.g. acquisition and disposal of subsidiaries, issuance of new share capital.
  17. Approval of Memorandum and Articles of Association including any amendments thereto.
  18. Approval of the giving of any guarantee (with the exception of bank guarantee in connection with the operating business) or indemnity or the creation or issue of any debenture, mortgage, charge or other security or interest over its assets by the Company.
  CORPORATE ETHICS
 
 


The Group is committed in maintaining the highest standards of business ethics. The Code of Conduct serves as a guideline for all the employees to ensure the highest level of transparency and accountability within the organization and in our dealings with external parties.

Standard Ethical Codes of Conduct for Directors of the Company
These standards have been especially established in order to promote honest and ethical conduct on the part of directors as well as to establish sound corporate governance.

In the execution of their duties, the directors should have as their objective the pursuit of the Company’s overall benefit, and must not damage Company’s rights and interests for the benefit of a specific individual or specific group; moreover, when executing their duties, they should treat all stakeholders fairly. Directors should faithfully execute their duties in the interests of the Company. Director shall bear the obligation to preserve the confidentiality of the Company’s secret information, except when publication is authorized or required by law, and they must not use said secret information to seek personal gain for themselves or third parties.

Directors should ensure the interests of the Company, and should respect the interests of its stakeholders including relationship banks, creditors, employees, consumers, suppliers, subsidiary companies and the community. Directors should also observe laws concerning insider trading and other securities law concerning equity trading and the handling of confidential business information; such personnel who are in possession of important unpublished information must not engage in related securities trading.

  RISK MANAGEMENT
 
 


The Board recognises that an important element of a sound system of internal control is to have in place a risk management practice for identifying, evaluating and managing significant risks faced by the Group systematically during the financial year under review.

On the strategic level, strategic business strategies are formulated by Managing Director and Senior Management and presented to the Board for review to ensure proposed strategies are in line with the Group’s risk appetite with update of the implementation progress of the strategies approved being presented by the Senior Management in subsequent Board’s meetings for the Board to follow-up and review.

On the daily basis, the respective Heads of Department are responsible for managing the risk of their department. Changes in the key business risks faced by the Group or emergence of new key business risks and the corresponding internal controls are discussed during management meetings.

  CORPORATE SOCIAL RESPONSIBILITY
 
 


The CHB Group is a good and reputable corporate who takes great pride and diligence in preserving and sustaining the environment in the conduct of its business activities.

The Group Sustainability Report is available at www.cscmalaysia.com.

  REVIEW OF BOARD CHARTER
 
 


The Board Charter will be reviewed from time to time and make necessary amendment as it deems appropriate.



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