1. Purpose of the Board Charter

This Board Charter sets out the principles for the operation of the Board of Directors (“Board”) of Selangor Properties Berhad (“SPB” or “the Company”) and its subsidiaries (“the Group”) and describes the functions of the Board and those functions delegated to the Management of the Company.

The Board has primary responsibility to shareholders for the welfare of the Company. The Board is responsible for guiding and monitoring the business and the affairs of the Company. The Company recognises the importance of the Board in providing a sound base for good corporate governance in the operations of the Company. This Board Charter is established to promote high standards of corporate governance and is designed to provide guidance and clarity for Directors and Management with regards to the roles of the Board and its committees. This Board Charter does not overrule or pre-empt the statutory requirements and other relevant statutes. This Board Charter shall form an integral part of each Director’s duties and responsibilities. To the extent of any conflict between the terms of this Board Charter and the Company’s Articles of Association, the latter shall prevail.

2. Composition of the Board
    • 2.1.The Board shall be of a size and composition with the benefit of diversity in perspectives and skills to understand properly and deal with the current and emerging issues of the business of the Company.
    • 2.2.At least half of the Board of Directors are Independent Directors. The appointment of a new member to the Board is only made after consultation with the Nominating Committee. Appointment of board member(s) and senior management are based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender.
    • 2.3.In identifying candidates for appointment of Directors, the Board does not solely rely on recommendations from existing board members, Management or major shareholders. The Board may seek assistance/advice from independent bodies/parties to identify suitably qualified candidates.
    • 2.4.The Board recognises the importance of having a clearly accepted division of power and responsibilities at the head of the Company to ensure a balance of power and authority. The position of Managing Director (“MD”) is optional and should the need to appoint a MD arise, the position of the MD shall be held by an individual other than the Chairman. A Director shall inform the Board’s Chairman before he/she accepts any new directorships in other Public Listed Companies. Each Director must not hold more than five (5) directorships in listed issuers.
    • 2.5.The Board shall obtain time commitment from newly appointed Directors at the time of appointment.
    • 2.6.The Board shall appoint a Senior Independent Director who serves as the point of contact between the Independent Directors and the Chairman on sensitive issues, ensure all Independent Directors have an opportunity to provide input on the agenda and ensure the Independent Directors can perform their duties responsibly and with sufficient time for discussion of all agenda items.
    • 2.7.The tenure of an Independent Director shall not exceed a cumulative term limit of nine years. Upon completion of the nine years, an Independent Director may continue to serve on the Board as a Non-Independent Director. The Board may, in exceptional cases and subject to the assessment of the Nominating Committee on an annual basis, recommend for an Independent Director who has served a consecutive or cumulative term of nine years or more to remain as an independent Director subject to Shareholders’ approval.
3. Role of the Board
    • 3.1.The Board shall reserve a formal schedule of matters for its collective decision as appended in Appendix I.
    • 3.2.The principal responsibilities of the Board including those adopted from the MCCG are:
    • together with senior management, promote good corporate governance culture within the Group which reinforces ethical, prudent and professional behaviour;
    • review, challenge and decide on Management’s proposals for the Group, and monitor its implementation by Management;
    • ensure that the strategic plan of the Group supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
    • supervise and assess Management’s performance to determine whether the business is being properly managed;
    • ensure there is a sound framework for internal controls and risk management;
    • understand the principal risks of the Company’s business and recognise that business decisions involve the taking of appropriate risks;
    • 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 risks;
    • 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;
    • ensure that the Group has in place procedures to enable effective communication with stakeholders; and
    • ensure the integrity of the Group’s financial and non-financial reporting.
    • 3.3.In overseeing the conduct of the Group’s Business, the Board shall ensure that an appropriate financial planning, operating and reporting framework as well as an embedded risk management framework is established.
4. Role of the Chairman at Board level

The Chairman is primarily responsible for:

    • 4.1.providing leadership for the Board so that the Board can perform its responsibilities effectively;
    • 4.2.setting the Board agenda and ensuring that Board members receive complete and accurate information in a timely manner;
    • 4.3.leading Board meetings and discussions;
    • 4.4.encouraging active participation and allowing dissenting views to be freely expressed;
    • 4.5.managing the interface between Board and Management;
    • 4.6.ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole;
    • 4.7.leading the Board in establishing and monitoring good corporate governance practices in the Company;
    • 4.8.guiding and mediating Board actions with respect to organisational priorities and governance concerns; and
    • 4.9.performing other responsibilities assigned by the Board from time to time.
5. Role of the Chairman in Management
    • 5.1.The executive position of the Chairman as the Head of the Management, in essence is to ensure the effective implementation of the Group’s Business Plan and policies established by the Board as well as to manage the daily conduct of the business and affairs to ensure its smooth operation.
    • 5.2.The Chairman is responsible to the Board for the following:
    • executive management of the Group’s business covering, inter alia, the development of a strategic plan; an annual operating plan and budget; performance benchmarks to gauge Management’s performance and the analysis of management reports;
    • developing long-term strategic and short-term profit plans;
    • set, review and ensure compliance with the Company’s core values;
    • directing and controlling all aspects of the business operations;
    • effectively oversee the human resources of the Group with respect to key positions in the Group’s hierarchy;
    • ensures that the Group’s Financial Reports present a true and fair view of the Group’s financial condition and operational results and are in accordance with the relevant accounting standards;
    • developing long-term strategic and short-term profit plans;
    • assures the Group’s corporate identity, products and services are of high standards and are reflective of the market environment;
    • be the official spokesman for the Company and responsible for regulatory, governmental and business relationships;
    • ensures compliance with governmental procedures and regulations;
    • coordinates business plans with the businesses heads, coordinates management issues through the Board, and oversees divisional function groups and cost containment process in consultation with the Director of Finance;
    • maintains and facilitates a positive working environment and good employee relations; and
    • organises information necessary for the Board to deal with the agenda and for providing this information to Directors on a timely basis.
In discharging the above responsibilities, the Chairman can delegate appropriate functions to the other members of Management, who shall report to him.
6. Role of Individual Directors

The principal roles of individual Directors include, amongst others:

  • review and adopt a strategic plan for the Company;
  • oversee the conduct of the Company’s business to evaluate whether the business is being properly managed;
  • ensure succession planning, including appointing, training, fixing the compensation of and, where appropriate, replacing senior management;
  • develop and implement an investor relations programme or shareholder communication policy for the Company; and
  • review the adequacy and the integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
7. Role of Independent Director

The role of Independent Directors is to constructively challenge and help develop proposals on strategy include, inter alia:

  • to make independent assessment of the information, reports or statements, having regard to the Directors’ knowledge, experience and competence, to provide independent view and demonstrate objectivity in reviewing and challenging Management’s proposals at meetings;
  • to devote sufficient time to update their knowledge and enhance their skills through appropriate continuing education programmes, so as to keep abreast of industry issues, market development and trend, and enable them to sustain their active participation in Board deliberations; and
  • act as a channel of communication between Management, shareholders and other stakeholders, and provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.
8. Role of Senior Independent Director

The Board may appoint a Senior Independent Director to whom shareholders’ concerns can be conveyed if there are reasons that contact through the normal channels of the Chairman have failed to resolve them.

The role of Senior Independent Director include, amongst others:

  • act as a sound board for the Chairman;
  • ensure all Independent Directors have opportunity to input on the agenda, and advise the Chairman on the quality, quantity and timeliness of the information submitted by Management that is necessary or appropriate for the Independent Directors to perform their duties effectively;
  • consult the Chairman regarding Board meeting schedules to ensure the Independent Directors can perform their duties responsibly and with sufficient time for discussion of all agenda items;
  • serve as the principal conduit between the Independent Directors and the Chairman on sensitive issues; and
  • serve as a designated contact for consultation and direct communication with shareholders on areas that cannot be resolved through the normal channels of contact with the Chairman.
9. Board Processes

Board Meetings shall be conducted in a business-like manner where all Directors are encouraged to share their views and partake in discussions.

    • 9.1.Frequency
    • 9.1.1.The Board shall meet regularly, at least on a quarterly basis. Special Board meetings shall be held in addition to the quarterly meetings as and when required. Prior notice of meetings will be given to all who are required to attend the meetings.
    • 9.1.2.Board members are required to attend the Board meetings and attendance of each individual Director in the meetings held in a financial year is required to be disclosed in the Annual Report.
    • 9.1.3.Other senior officers may be invited to attend for particular items within their responsibility. The Board may also invite external parties such as the auditors, solicitors and consultants as and when the need arises.
    • 9.2.Agenda
    • 9.2.1.The notice of a Directors’ meeting shall be given in writing at least
      seven (7) days prior to the meeting.
    • 9.2.2..The agenda shall include, amongst others, matters specifically reserved for the Board’s decision. The Board shall record its deliberation, in terms of the issues discussed, and the conclusions thereof in discharging its duties and responsibilities.
    • 9.3.Meeting Papers
    • 9.3.1.Board papers and agenda items are to be circulated at least five (5)
      business days prior to the meeting.
    • 9.3.2.The minutes of Board meetings shall be prepared within fourteen (14) days following a Board meeting. The draft minutes shall be circulated together with the Board papers at the following Board meeting. If one or more Directors request their opinion to be noted, the Company Secretary shall comply with the request.
    • 9.4.Access to Information and Independent Professional Advice
    • 9.4.1.All Directors (executive and non-executive) have the same right of access to all information within the Group whether as a full board or in their individual capacity, in furtherance of their duties and responsibilities as Directors of the Company, subject to a formal written request to the Chairman furnishing satisfactory and explicit justification for such request.
    • 9.4.2.All Directors shall have access to the advice and services of the Company Secretary. The Board shall recognise that the Chairman is entitled to the strong and positive support of the Company Secretary in ensuring the effective functioning of the Board.
    • 9.4.3.The full Board or in their individual capacity, in furtherance of their duties, shall be able to obtain an independent professional advice at the Company’s expenses.
10. Company Secretary
    • 10.1.The Company Secretary shall be suitably qualified, competent and capable of carrying out the duties required of the post.
    • 10.2.The
      key role of the Company Secretary shall include:
    • manage all Board and Committee meeting logistics, attend and record minutes of all Board and Committee meetings and facilitate Board communications;
    • advise the Board on its roles and responsibilities;
    • facilitate the orientation of new directors and assist in director training
      and development;
    • advise the Board on corporate disclosures and compliance with company and securities regulations and listing requirements;
    • manage processes pertaining to the annual shareholder meeting;
    • preparing agendas and coordinating the preparation of the Board papers
      in a timely and effective manner;
    • ensure that Board procedures and applicable rules are observed;
    • monitor corporate governance developments and assist the Board in applying governance practices to meet the Board’s needs and stakeholders’ expectations;
    • serve as a focal point for stakeholders’ communication and engagement on corporate governance issues;
    • assist the communications between the Board and Management; and
    • provide full access and services to the Board and carrying out other
      functions deemed appropriate by the Board from time to time.
11. Board Committees
    • 11.1.The Board reserves the right to establish Committees from time to time in the discharge of its duties and responsibilities.
    • 11.2.Where a Committee is formed, specific terms of reference of the Committee would be established to serve as a guidance note which covers matters such as the purpose, composition and functions of the Committee.
    • 11.3.A number of standing committees with written terms of reference has been established namely the following:
    • a)Audit & Risk Management Committee (“ARMC”)
    • The ARMC assists in providing oversight on the Group’s financial reporting, disclosure, regulatory compliance, risk management and monitoring of internal control processes within the Group. The ARMC reviews the quarterly financial results, unaudited and audited financial statements, internal and external audit reports as well as related party transactions.

      To provide oversight of the risk management framework and policies of the Group, the ARMC:

    • i)ensures that Management maintains a sound system of risk management and internal controls to safeguard shareholder’ investments and the Group’s assets; and
    • i)determines the nature and extent of significant risks which the Group is willing to take in achieving its strategic objectives.
    • b)Nominating Committee
    • The Nominating Committee oversees matters relating to the nomination of new Directors, annually reviews the required mix of skills, experience and other requisite qualities of Directors as well as the annual assessment of the effectiveness of the Board as a whole, its Committees and the contribution of each individual Director as well as identify candidates to fill board vacancies and nominating them for approval by the Board.

    • b)Remuneration Committee
    • The Remuneration Committee is primarily responsible for recommending to the Board the remuneration of the Executive Chairman, Executive Directors, Non-Executive Directors and Senior Management in all its forms, drawing from outside advice if necessary.

12. The Board’s Relationship with Shareholders and Stakeholders
    • 12.1.The Board shall maintain an effective communication policy that enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the general public.
    • 12.2.All Directors shall attend the Annual General Meeting and Extraordinary General meeting as it is the role of the Board to ensure that the General Meetings of the Company are conducted in an efficient manner and serves as a crucial mechanism in shareholder communications. Key ingredients behind this include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the General Meetings.
    • 12.3.The Board will focus its efforts on the following best practices to enhance the effectiveness of the General Meeting:
    • ensure that each item of special business included in the notice to be accompanied by a full explanation of the effects of the proposed resolution;
    • encourage poll voting on substantive resolution and make an announcement of the detailed results showing the number of votes cast for and against each resolution;
    • ensure that the Chairman of the General Meetings provides reasonable time for discussion at the meeting. Where appropriate and if required, the Chairman of the General Meetings will also undertake to provide written answer to any significant question which cannot be answered immediately; and
    • conduct a business presentation with a question and answer session, where appropriate and if required.
    • 12.4.The Chair of the Board, Audit and Risk Management, Nominating and Remuneration Committees shall take responsibility for addressing queries from Shareholders, stakeholders and analysts.
13. Induction Process
    • 13.1.Induction of Directors may include, but not limited to, the following:
    • furnishing of a copy of the previous board minutes for at least the past six (6) months; the Business/strategic plan, pertinent management reports; profile of key competitors and significant reports by management consultants on areas of board responsibilities;
    • visits to key sites; and
    • a formal one (1) to two (2) day induction programme, including the elements above, and also presentations from various divisions on their strengths, weaknesses and ambitions.
14. Representation of the Company

The Board appoints the Chairman or such persons as he deems fit to speak on behalf of the Group and to manage the communication of information to investors, other stakeholders and the public in an orderly and effective manner while adhering, at all times, to relevant laws and regulatory requirements.

15. Periodic Review

This Charter and all Board Committees’ Charters and Policies shall be reviewed annually by the Board.

This Charter is dated 26 June 2018.

APPENDIX I

MATTERS RESERVED FOR COLLECTIVE DECISION OF THE BOARD

The authorities of the Board, which may be varied from time to time as determined by the Board, are as follows:

  1. Conduct of the Board
  2. Appointment and recommendation for the removal of Directors.
  3. Appointment and removal of Company Secretaries.
  4. Appointment of Board committees and members.
  5. Approval of terms of reference of Board committees and amendments to such terms.
  6. Appointment of senior executive positions, including that of the Executive Chairman, Managing Director, Chief Executive Officer and Executive Directors of the Company and their duties and the continuation (or not) of their service.

Remuneration

  1. Approval/recommendation of the directors’ fee/remuneration arrangements for Non­ Executive Directors
  2. Approval of the remuneration structure and policy for the Executive Chairman, Managing Director, Chief Executive Officer and Executive Directors.
  3. Approval of the remuneration packages of the Executive Chairman, Managing Director, Chief Executive Officer and Executive Directors.
  4. Approval of any proposed employees’ share option scheme and/or amendments to the scheme, subject to other relevant approvals that may be required by law or regulations.

Operational

  1. Approval of Group’s business strategy and operational plan and annual budget.
  2. Review of operational performance against Group’s business strategy and operational plan, including monitoring of key risks and risk management policies and actions.
  3. Approval of the Limits of Authority for the Company.
  4. Approval of capital expenditure where such amounts exceed the Management’s limits of authority.
  5. Approval of bad debts write-off where such amounts exceed the Management’s limits of authority.
  6. Approval of investment or divestment in a company/business/property/undertaking.
  7. Approval of investment or divestment of a capital project which represents a significant diversification from the existing business activities.
  8. Approval of changes in the major activities of the Company or Group.
  9. Approval of treasury policies and bank mandate.

Financial

  1. Approval of interim and annual financial statements.
  2. Approval for the release of financial announcements.
  3. Approval of the annual Directors’ Report, Annual Report and Statutory Audited Accounts.
  4. Approval of interim dividends, the recommendation of final dividends and the making of any other distribution.
  5. Adoption of accounting policies.
  6. Review the effectiveness of the Group’s system of internal control (which is delegated to the Audit Committee which in turn reports to the Board on its findings).
  7. Approval of financing facilities and arrangements.

Other Matters

  1. The granting of powers of attorney by the Company.
  2. The entering into of any indemnity or guarantee by the Company.