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TERMS OF REFERENCE OF THE EXECUTIVE COMMITTEE

INTRODUCTION

The Executive Committee (“EXCO”) whose members (which comprise of Board Members) is set-up to assist the Board of Directors (“Board”) of Pelikan International Corporation Berhad (the “Company”) to undertake responsibilities defined under this Terms of Reference:-

The terms of reference of EXCO are set out below.

1. MEMBERSHIP

The EXCO members shall be appointed by and shall have such powers as may be delegated by the Board of Directors set out herein. The EXCO shall consist of at least three (3) members. The Chairman of the EXCO shall be represented by a Non-Executive Director.

2. MEETINGS

2.1 The EXCO will establish a regular meeting schedule and will use its best efforts to meet at least once every two (2) months. All members of the EXCO shall use their best efforts to attend every meeting in person. Other members of management may also be invited to attend EXCO meetings, and such members of management shall be entitled to speak but not vote at any such meetings. For purposes of these terms of reference, “management” means any officer or employee of any Group Company who is holding an executive position.

2.2 Meeting of the EXCO can be held by giving at least seven (7) days prior written notice or such shorter notice period as may be unanimously agreed on by all members. The notice shall be accompanied by (i) a proposed agenda or statement of purpose; and (ii) where possible, copies of all documents, agreements and information to be considered at such meeting.

2.3 The EXCO will cause minutes of all meetings to be prepared by the Company Secretary and tabled for adoption at the next meeting and such adopted minutes shall be signed by the Chairman.

3. QUORUM

A quorum for an EXCO meeting shall exist when a majority of the members of the EXCO are present in person. In event the Chairman of the EXCO is not present, the members present may choose any one of the members present (save for an Executive Director) to act as Chairman for the EXCO meeting.

4. POWERS OF EXCO

4.1 EXCO shall be delegated with such powers as may be necessary in order to perform its duties but subject to the following:

(a) any limits of authority already in place or approved by the Board; and

(b) where the approval of the Board and/or shareholders is required, the EXCO can only agree to recommend to the Board for their approval and not execute or implement any such matters where the Board and/or shareholders’ approval is required pursuant to any applicable law or regulations.

In the event of any conflict between the powers as provided herein for the EXCO and any current limits of authority of the Group, the provisions herein shall prevail and the Board of each Group Company shall ensure that the limits of authority is amended to reflect the terms of reference as set out herein.

4.2 The EXCO shall amongst others:

(a) review the Group’s business strategy and make recommendations to the Board for approval;

(b) review the business plan and budgets and to monitor progress and performance of the business plan and budgets;

(c) providing direction and guidance to, and overseeing, management`s performance;

(d) review alliance, acquisition, disposals and other strategic agreements and making recommendations to the Board for approval;

(e) take any other action or assume any other powers and responsibilities that may from time to time be assigned or delegated to the EXCO by the Board.

(f) seek any information it requires from any employee in order to perform its duties and have access to all relevant records;

(g) invite any employee or other individual to attend a meeting of the EXCO; and

(h) seek outside professional advice to carry out its duties and to invite their attendance at the EXCO meeting, if necessary.

4.3 Without limiting the powers of the EXCO in paragraph 4.2 above, the EXCO shall specifically be delegated the following responsibilities which shall require the approval of the EXCO and where required in accordance with the limits of authority or otherwise, also the approval of the Board:

(a) entry into any joint venture, partnership or profit sharing agreement by the Company or any of the Group Companies;

(b) the approval of the annual operating budget (Annual Budget) or the Business Plan for the Company and its Group Companies for each financial year of the Group Company (including any amendments, modifications, addendum or additions thereto);

(c) in respect of each Group Company, the acquisition or disposal, or the agreement to acquire or dispose of any interest in any assets, real property or the acquisition, incorporation or establishment of any corporation having an interest in assets by a Group Company, accepting any form of additional liability and/or entering into any single transaction or series of transactions relating to the same subject matter, where the value exceeds EUR2 million, other than in the ordinary course of business;

(d) adoption of, or any significant change in the accounting policies of each Group Company, other than as required by law or accounting policies generally accepted in the jurisdiction applicable to such Group Company from time to time;

(e) making or permitting any Group Company to make any new investments, or acquiring or permitting any of its subsidiaries to acquire any asset in one transaction or a series of transactions for an aggregate amount exceeding EUR2 million in any year;

(f) issuing or providing or permitting any of its subsidiaries to issue or provide any form of guarantee, indemnity or other financial or non-financial support (the threshold should be EUR2 million and above) whether in a single or series of transactions relating to the same financial or non-financial support which may result in the Company or any Group Company incurring any liability in connection with any loans, credit facilities or any other financing required by any associate or subsidiary of the Company;

(g) selling, leasing, transferring, disposing or permitting any of its subsidiaries to sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions relating to the same subject matter, all or any part of its or their business or assets whether now owned or hereafter acquired for any aggregate amount exceeding EUR2 million in any year except for the sale of assets by its wholly-owned subsidiaries at arm’s length on commercial terms in the ordinary course of business; and

(h) changing or permitting any of its subsidiaries to change the nature or scope of its or their business operations which it or its subsidiaries conduct or permit any of its subsidiaries to suspend or a substantial part of the business operations which it or its subsidiaries conduct directly or indirectly.

5. DECISIONS OF EXCO

All decisions and/or actions by the EXCO shall require a simple majority vote of all members who attended and voted at the meeting. In event of a tie in votes, the Chairman will have the casting vote. Once approved by EXCO, if Board approval is also required, the matter must then be tabled to the Board of Directors.

6. CIRCULAR RESOLUTIONS

For urgent matters, a resolution in writing signed by all the members of the EXCO shall be as valid and effective as a resolution passed at a meeting of the EXCO duly convened and held. Any such resolution in writing may consist of several documents in like form each signed by one or more of the members. The expressions ‘in writing’ and ‘signed’ include approval by telefax, telex or e-mail by any such members, which approval shall be confirmed in writing by such member thereafter. The duly signed resolution shall be placed in the minute book of the EXCO.

 

All members of the EXCO undertake to support the best interest of the Company in accordance with the terms and conditions hereof. Each Member shall act in good faith towards the others in order to promote the success of the Company.