Policies Archives - Page 2 of 3

External Auditors Policy

Mannju on September 20, 2022

1. Introduction

The Audit Committee of LBS BINA GROUP Berhad (“the Company”) is responsible for reviewing, assessing and monitoring the performance, suitability and independence of external auditors. The objective of this External Auditors Policy (“the Policy”) is to outline the guidelines and procedures for the Committee to assess and monitor the external auditors.

2. Scope

This Policy applies to the external auditors of LBS Group.

3. Definitions

“ Board” refers to the Board of Directors of LBS at any one time.

“Committee” refers to the Audit Committee of LBS at any one time.

“Company” refers to LBS Bina Group Berhad (Company No.: 518482-H). “LBS Group” refers LBS Bina Group Berhad and its subsidiaries.

“Policy” refers to this External Auditors Policy including any amendments made or to be made from time to time.

4. Objectives

The objective of this Policy is to outline the guidelines and procedures for the Committee to assess and
monitor the external auditors.

5. Selection & Appointment

Pursuant to Section 273 of the Companies Act 2016, the office of auditors shall cease at the conclusion of each annual general meeting. Accordingly, the members shall appoint or re-appoint the external auditors of the Company, and the external auditors so appointed shall, hold office until the conclusion of the next annual general meeting of the Company. Should the Committee determine a need for a change of external auditors, the Committee will follow the following procedures for selection and appointment of new external auditors:-

a) the Committee to identify the audit firms who meet the criteria for appointment and to request for
their proposals of engagement for consideration;

b) the Committee will assess the proposals received and shortlist the suitable audit firms;

c) the Committee will meet and/or interview the shortlisted candidates;

d) the Committee may delegate or seek the assistance of the Chief Financial Officer/Finance Director to
perform items (a) to (c) above;

e) the Committee will recommend the appropriate audit firm to the Board for appointment as external
auditors; and

f) the Board will endorse, after due consideration, the recommendation and seek shareholders’ approval for the appointment of the new external auditors and/or resignation/removal of the existing external auditors at the general meeting.

6. Selection Criteria

The Committee will evaluate potential audit firm on a number of criteria including, but not limited to:

a) Independency, objectivity and professional scepticism

b) Quality of engagement team

c) Reputation

d) Internal governance process

e) Human Resources and qualification

f) Proven and demonstrated experience in audit of listed companies

g) Cost

h) Clientele (size, spread, etc.)

7. Independence

The external auditor’s independence is a key factor in ensuring that the financial statements of the Company and its subsidiaries are true and fair, and meet high standards of financial integrity. The Committee monitors the independence of the external auditor, including any relationship with the Group or any other person or entity that may impair or compromise, or appear to impair or compromise, the external auditor’s independence. Independence may be impaired or compromised by the provision of services of a non-audit nature to LBS Group, depending on the materiality of those services and the fees charged for them. Therefore,
the external auditors are precluded from providing any services that may impair their independence or conflict with their role as external auditors.
The Committee shall obtain a written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

8. Non-Audit Services

The external auditor’s independence is a key factor in ensuring that the financial statements of the Company and its subsidiaries are true and fair, and meet high standards of financial integrity.The external auditors can be engaged to perform non-audit services that are not, and are not perceived to be, in conflict with the role of the external auditors. This excludes audit related work in compliance with statutory requirements.

The prohibition of non-audit services is based on three (3) basic principles as follows:-

a) external auditors cannot function in the role of Management;
b) external auditors cannot audit their own work; and
c) external auditors cannot serve in an advocacy role of LBS Group.

The external auditors shall observe and comply with the By-Laws of the Malaysian Institute of Accountants in relation to the provision of non-audit services, which include the followings:-

i) accounting and book keeping services;
ii) valuation services;
iii) taxation services;
iv) internal audit services;
v) information technology system services;
vi) litigation support services;
vii) recruitment services; and
viii) corporate finance services.

All engagements of the external auditors to provide non-audit services are subject to the approval/endorsement of the Committee.

Management shall obtain confirmation from the external auditors that the independence of the external auditors will not be impaired by the provision of non-audit services.

9. Rotation of Audit Partner

The audit partner responsible for the external audit of LBS Group is subject to rotation at least every five (5) financial years, followed by a two year minimum time out period during which they may not take part in the audit of the Group.

10. Annual Reporting

The external auditors shall issue an annual audit plan for review and discussion with the Committee. The external auditors shall also provide a management letter to the Committee upon completion of the annual audit.

11. Annual Assessment

The Committee shall carry out annual assessment on the performance, suitability and independence
of the external auditors based on the following four (4) key areas:-

i) quality of service;

ii) sufficiency of resources;

iii) communication and interaction; and

iv) independence, objectivity and professional scepticism.

The Committee may also request the Chief Financial Officer/Finance Director to perform the annual assessment of the external auditors.

12. Review of Policy

This Policy has been approved by the Committee and is made available for reference on Company’s corporate website and internal computer networking. It shall be reviewed by the Committee and updated whenever necessary to ensure its effective implementation.

Environmental Policy Statement

Erfan Sakib on July 7, 2022

1. INTRODUCTION

LBS Bina Group Berhad (“LBGB” or “Company”) and its subsidiaries (“LBGB Group”) recognise the potential environmental and climate change impact in all its development project sites.

2. OBJECTIVE

The objectives of this policy are amongst others, to provide guidance for LBGB Group and external stakeholders to ensure that all its development project sites to:

(i) comply to the applicable environmental legislation, regulations and standards;

(ii) adopt strategies and approaches that are aligned with LBGB Group’s commitment;

(iii) uphold with the highest standard practices; and

(iv) effectively communicate the policy, engaging both the internal and external stakeholders, while actively promoting awareness among LBGB Group and other stakeholders.

3. SCOPE

This Policy is applicable to LBGB Group’s development project sites and its external stakeholders such as supplier, vendors and business partners. Supplier is the upstream entity from the organisation (i.e., in the organisation’s supply chain), which provides a product or service that is used in the development of the organisation’s products or services such as consultants, contractors, distributors, independent contractors, licensees, manufacturers, primary producers and sub-contractors.

In accordance with LBGB Group’s commitment to the best practice on sustainability, LBGB Group also expects the external stakeholders to aspire to the same standards in their business operations included but not limited to LBGB Group’s commitment.

4. COMMITMENTS

Compliance and Continuous Improvement

LBGB Group’s unwavering commitment to compliance with environmental laws and regulations is the guiding principle. Beyond compliance, LBGB Group is dedicated to the relentless pursuit of continuous improvement in every facet of LBGB Group’s development project sites. LBGB Group takes this commitment a step further by:

(i) actively raising awareness among LBGB Group’s internal and external stakeholders, fostering a collective sense of environmental responsibility.

This steadfast commitment to compliance and continuous improvement underpins LBGB Group’s mission and vision to drive environmental sustainability and serve as a beacon of responsible corporate citizen.

In the pursuit of the objectives, LBGB Group undertakes the following:

a) Waste Management

LBGB Group is dedicated to responsible waste management, recognising the environmental impact of waste generated in its development project sites. LBGB Group’s commitment includes:

(i) minimising waste generation through efficient material use and eco-friendly materials, such as Industrialised Building System (“IBS”) precast concrete. The continued use of IBS enables raw material optimisation in a controlled environment.

(ii) adopting proper waste management including 3R practices (Reduce, Reuse and Recycle)

(iii) continuously monitoring and reporting on waste generation; and

(iv) ensuring waste collection is managed by authorised individuals or service providers.

LBGB Group’s waste management commitment involves establishing comprehensive waste management practices, setting specific diversion targets, and highlighting efforts to reduce waste in construction phases.

b) Material Management

LBGB Group is dedicated to environmentally responsible material management in alignment with the Group Sustainable Procurement Policy. LBGB Group is actively engaging with external stakeholders to promote sustainability and reduce the adverse environmental impact of products and services. This commitment includes:

(i) promoting the responsible sourcing of construction materials, including sustainable, recycled, and low-impact options;

(ii) consuming energy and resources responsibly and conservation of the same through innovative practices and procedures;

(iii) implementing detailed strategies to reduce reliance on virgin resources and minimise the carbon footprint associated with material production; and

(iv) emphasising efficient and sustainable building design with a focus on energy and resource conservation. LBGB Group adopts innovative Industrialised Building System (“IBS”) precast concrete at development project sites, whenever feasible.

c) Pollution Management

LBGB Group is committed to prevent pollution at its source whenever possible and to effectively manage it when prevention is not feasible. LBGB Group has recognised and established approaches to address its concern towards pollution prevention as developer exemplified by the following instances:

(i) banning and prohibiting activities that cause pollution to the environment such as open burning and minimising noise pollution arising from construction activities;

(ii) adopting measures to prevent pollution such as placing of diesel storage tanks within a concrete bunded area;

(iii) practising periodic and proper maintenance of the construction drainage system; and

(iv) exploring and implementing a range of measures and strategies to continue LBGB’s Group pollution prevention efforts.

d) Biodiversity Conservation

LBGB Group is unwavering in its commitment to reducing adverse environmental impact and fostering the preservation and enrichment of biodiversity across all its development project sites. LBGB Group has established approaches to address its concern towards biodiversity as developer by:

(i) adopting the principle of biodiversity mitigation hierarchy; avoidance, minimisation and restoration;

(ii) performing risk assessment by internal and external stakeholders where required;

(iii) mitigating the impact by conserving habitats, nurturing local ecosystems, and safeguarding wildlife and green spaces; and

(iv) introducing The International Union for Conservation of Nature (IUCN) Red List and local species, where suitable to its development projects.

5. REVIEW OF THE POLICY

This Policy has been approved by the Board and is available for reference in the LBGB’s corporate website and internal computer networking system.

This Policy shall be reviewed by the Board once every two years and updated whenever necessary to ensure its effective implementation. Any subsequent amendments to the Policy shall be approved by the Board upon recommendation of the Sustainability Committee.

Succession Planning Policy

Erfan Sakib on June 29, 2022

1. Introduction

Changes in management are inevitable and can present unique challenges. LBS Bina Group Berhad has established a succession plan to provide continuity in the leadership pipeline and avoid extended and costly vacancies in key positions.

Succession planning requires collaboration across the organization. It is an ongoing process to ensure that the Group identifies high-potential employees and prepare them for high-level management positions through mentoring, coaching and training to replace those key business leaders who leaves their positions.

2. Objective

(1) To ensure the stability and accountability of the Group by having a plan to support operation and service continuity when the Managing Director, Executive Directors or Senior Management leave their positions;

(2) To help the Group in preserving its information and knowledge that will be lost due to resignation, retirement or general attrition;

(3) To prepare a diverse pool of suitably qualifies and motivated employees for higher role and responsibilities; and

(4) To develop career paths for employees which will facilitate the Group’s ability to recruit, train and retain top-performing or high talent employee, by addressing competency and skill gaps.

3. Roles And Responsibilities

Key positions are identified as follows:

(a) Group Managing Director;

(b) Executive Directors; and

The Board is responsible for succession planning for the Managing Directors and Executive Directors’ position. The Board should consider either to hire or to internally promote the new Managing Director and Executive Directors, when anyone of the mentioned positions leaves and to ensure the successor has the required skills to implement the Group’s mission and vision.

Whereas, the Executive Director is responsible for the succession planning for the Head of Departments (Senior General Managers and General Managers) in the Group.

4. Succession Planning Process

(1) Identify capabilities and talent needs, based on strategic business plan and Company’s Vision and Mission;

(2) Determine the required capabilities for critical positions;

(3) List down the competency profile of the selected talents or employees;

(4) Analyse and match the competencies between the critical positions and the selected employee to identify the gaps;

(5) Provide high level development plan for the selected employees to develop into target positions;

(6) Assess the performance of the selected employees on a periodic basis; and

(7) Monitor and track the overall progress.

5. Key Success Factors

The support from the Board, Managing Director, Executive Directors and Senior Management are important for the succession planning process. This will give all employees and understanding and emphasis on the importance of succession planning to the Company.

The selected employees should be provided with adequate time for development and mentoring. Regular review and update for the succession plan is vital to ensure the hiring needs and assess the development progress of the selected candidates.

6. Review

This Policy has been endorsed by the Board. It shall be reviewed by the Nomination and Remuneration Committee (“NRC”) and updated from time to time to ensure the Group remains at the forefront of best practices in corporate governance. Any subsequent amendments to this Policy should be endorsed by the Board upon recommendation by NRC.

Remuneration Policy

Erfan Sakib on June 29, 2022

1. Introduction

The Company has formulated a policy called “Remuneration Policy” to ensure the payment of equitable, competitive remuneration to key managerial personnel, senior management and all employees of the Company which is based on individual performance, Company’s benchmark, Industry practices and performance of the Company as a whole.

2. Key Principles

The following set of principles act as guiding factors:

(a) Performance measures and targets to be aligned with the Company’s corporate strategy and its shareholders’ interest;

(b) Promote a culture of “Pay for Performance” as its business drivers; and

3. Objective And Purpose

(1) To determine remuneration based on the Company’s business outlook, financial position, growth and trends and practices on remuneration prevailing in competitive compensation;

(2) To align reward and recognition mechanism directly to the effort, performance, dedication and achievement relating to the Company’s operations;

(3) To attract, retain, motivate and promote talent and to ensure long term sustainability of talented persons and create competitive advantage; and

(4) To ‘Pay for Performance’ i.e. the remuneration shall be linked to the individual performance and to strike the right balance between fixed and variable pay reflecting short and long term performance objectives appropriate to the goals of the Company.

4. Key Managerial Personnel, Senior Management & Employees

The compensation for the key managerial personnel, senior management and employees of our organization would be guided by the external competitiveness and internal parity through annual benchmarking surveys. The remuneration structure is broadly divided into fixed and variable components. The fixed component comprises salary, allowances, perquisites, benefits-in-kind etc. The variable component comprises annual performance bonus of the individual employee and Company’s performance as a whole.

Internally, performance ratings of all employees would be spread across a normal distribution bell curve. The rating obtained by an employee will be used as an input to determine bonus payout and annual pay increases. Variable and annual pay increase will be calculated using a combination of individual performance and organizational performance. Compensation can also be determined based on identified skill sets which is critical to the success of our organization. It is determined as per management’s review of market demand and supply, Industry benchmarks etc.

The competitive comparator is selected based on Industry Relevance, Task relevance and Size of Organization.

5. Pay For Performance

A distribution bell curve is built to maintain significant differential between low, average and high performers. Remuneration Policy emphasis on performance besides taking into consideration of employees’ attendance record and disciplinary issues. The variable and annual pay increase are determined based on the standard evaluation matrix prevailing in the organization.

6. Review Policy

Anti-Bribery And Corruption Policy

Erfan Sakib on June 29, 2022

1. INTRODUCTION

LBS Bina Group Berhad (“LBGB” or “Company”) and its subsidiaries (“LBGB Group”) recognise the importance of establishing and upholding good corporate governance in its daily business operations in accordance with the highest ethical standards and in full compliance with all applicable laws, regulations and/or standards in all jurisdictions in which the Group operates.

LBGB Group has at all material times adopt a zero-tolerance approach against all forms of bribery, corruption and money laundering within LBGB Group and remains committed to strict compliance of all laws and regulations which govern LBGB Group’s business and operation and to maintain the same at the highest standards of ethical conduct and integrity, professionally and fairly.

2. OBJECTIVE

The objectives of this Policy are amongst others, to set out LBGB Group’s overall position in observing and upholding LBGB Group’s stance against bribery, corruption and money laundering in all its forms, as well as to provide guidance and information on the recognition of bribery and corruption and methods of dealing with such circumstances.

3. SCOPE

This policy applies to all Directors, employees (including employees on contract terms, temporary or short-term employees and employees on secondment) or third parties who have become aware of or are genuinely suspected on a reasonable belief to be an employee of LBGB Group that has engaged, is engaged, is preparing to engage as well as our external
stakeholders such as consultants contractors, distributors, independent contractors, licensees, manufacturers, primary producers and subcontractors to be committed for the conducts as stated below.

In accordance with LBGB Group’s commitment to the best practices on this Policy, LBGB Group also expect its external stakeholders to aspire to the same standards in their business operation.

4. DEFINITION

“Audit Committee” means the Audit Committee of LBGB.

“Board of Directors” means the LBGB Group’s Board of Directors.

“Bribery & Corruption” means any action which would be considered as an offence of giving or receiving ‘gratification’ under the Malaysian Anti-Corruption Commission Act 2009 (“MACCA”). In practice, this means offering, giving, agreeing to give, receiving, agreeing to receive, or soliciting something of value in an attempt to illicitly influence the decisions or actions of a person who is in a position of trust within an organisation.

Bribery may be ‘outbound’, where someone acting on behalf of LBGB Group attempts to influence the actions of someone external, such as a Government official or client decision maker (“external party”). It may also be ‘inbound’, where an external party is attempting to influence someone within LBGB Group which include but is not limited to a senior decision maker or someone with access to confidential information.

“Business Associate” means an external party with whom LBGB Group has, or plans to establish, some form of business relationship. This may include clients, customers, joint ventures, joint venture partners, consortium partners, outsourcing providers, contractors, consultants, subcontractors, suppliers, vendors, advisers, agents, distributors, representatives, intermediaries and investors.

“Conflict of Interest” means when a person’s own interests either influence, have the potential to influence, or are perceived to influence their decision making at LBGB Group.

“Donation & Sponsorship” means charitable contributions and sponsorship payments made to support the community.

“Gratification” is defined in the MACCA to mean the following:

(a) money, donation, gift, loan, fee, reward, valuable security, property or interest in property being property of any description whether movable or immovable, financial benefit, or any other similar advantage;

(b) any office, dignity, employment, contract of employment or services, and agreement to give employment or render services in any capacity;

(c) any payment, release, discharge or liquidation of any loan, obligation or other liability; whether in whole or in part;

(d) any valuable consideration of any kind, any discount, commission, rebate, bonus, deduction or percentage;

(e) any forbearance to demand any money or money’s worth or valuable thing;

(f) any other service or favour of any description, including protection from any penalty or disability incurred or apprehended or from any action or proceedings of a disciplinary, civil or criminal nature, whether or not already instituted, and including the exercise or
the forbearance from the exercise of any right or any official power or duty; and

g) any offer, undertaking or promise, whether conditional or unconditional, of any gratification within the meaning of any of the preceding paragraphs (a) to (f).

“Hospitality” means the considerate care of guests, which may include refreshments, accommodation and entertainment at a restaurant, hotel, club, resort, convention, concert, sporting event or other venue such as LBGB Group’s offices, with or without the personal presence of the host. Provision of travel may also be included, as may other services such as
provision of guides, attendants and escorts; use of facilities such as a spa and golf course.

“Personnel” means Directors, employees, staffs, and all individuals directly contracted to LBGB Group on an employment basis, including permanent, temporary, contract employees and interns.

5. ANTI-BRIBERY AND CORRUPTION

LBGB Group prohibits all forms of bribery, corruption and money laundering in connection with all its operations. Bribery and corruption may take the form of anything of value, such as money, goods, services,
property, privilege, employment position or preferential treatment. LBGB Group’s Personnel and its Business Associates shall not directly or indirectly, offer, give, receive or solicit any item, services or otherwise, of value, in the attempt to illicitly influence the decisions or actions
of a person in a position of trust within an organisation, either for the intended benefit of LBGB Group or the persons or the organisation involved in the transaction.

The anti-bribery and corruption statement applies equally to LBGB Group’s business dealings with commercial (‘private sector’) and Government (‘public sector’) entities, and includes their directors, officers, agents and other appointed representatives.

No employee or external party will suffer discrimination, demotion, penalty or other adverse consequences in retaliation for refusing to pay or receive bribes or participate in other illicit behaviour even if such refusal resulted in losses for LBGB’s Group.

6. RECOGNITION OF RELEVANT LEGISLATION

LBGB Group is committed to conduct its business ethically and in compliance with all applicable laws and regulations in each country and/or jurisdiction that it conducts its business in, including but not limited to MACCA, Malaysian Penal Code (revised 1977) (and its amendments), Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful
Activities Act 2001 (AMLATFA) and the Companies Act 2016 (Malaysia) or such other applicable laws in each respective country and/or jurisdiction.

In cases of conflict between mandatory law of each country and/or jurisdiction, and the principles contained in this policy herein, the former shall prevail.

7. GIFTS & HOSPITALITY

LBGB Group’s Personnel are prohibited from receiving or asking for (soliciting) gifts and/or services in any form whatsoever from external parties or otherwise. LBGB Group’s Personnel is at all circumstances prohibited from accepting gifts in the form of cash or cash equivalent, including gift certificates, loans, commissions, coupons, discounts or any other related forms from any parties whatsoever.

There are exceptions whereby receiving and provisions of the gifts are permitted in the following situation:-

a) Exchange of gifts or the corporate gifts of nominal / appropriate value at the company to company level (for example: gifts exchanged between companies as part of official visit);

b) Festive or ceremonial gifts of appropriate value during festive seasons or other ceremonial occasions;

c) Gifts given to external organisations or individual in relation to company official function, work-related conferences, corporate events and activities (for example: door gifts or commemorative gifts to all that attending the events); or

d) Corporate gifts bearing the Company’s name and logo and are of nominal / appropriate
value.

8. ENTERTAINMENT

It is a common practice within the business environment to provide entertainment to foster business relationship by providing reasonable and proportionate entertainment under appropriate circumstances. LBGB Group’s Personnel may offer appropriate and proportionate entertainment that is legal and reasonable within the scope of their work as part of business networking as well as a measure of goodwill towards the recipients. LBGB Group’s Personnel shall be guided by the following principles:

a. without the intent to exert influence or perceived as capable of influencing judgement or business decisions, to offer rewards for the improper execution of responsibilities, or to obtain preferential treatment;

b. the offering should not be extravagant or overly lavish, it should be aligned with the official designation of the recipient or to be proportionate to the occasion;

c. is in accordance with the relevant laws and policies of both the giver and receiver;

9. DONATION AND SPONSORSHIP

LBGB Group may offer charitable donations and sponsorships provided that they are ethical and legal under applicable laws and not with the intention to influence any business decisions or cause others to perceive it as such. Such charitable donations and sponsorships shall not be made in exchange for any business implications to LBGB Group

10. MONEY LAUNDERING AND TERRORISM FINANCING

An act of money laundering includes among others, engaging directly or indirectly in transactions involving proceeds from an unlawful activity, and conceals, disguises or impedes the establishment of the origin, location, movement or ownership of proceeds from an unlawful activity or instrumentalities of an offence.

An act of financing of terrorist acts include among others, dealing, provides or collects or make available directly or indirectly, any property that will be used to commit a terrorist act, providing or makes available financial services or facilities for the purpose of committing or facilitating
the commission of terrorist act or enters into an arrangement that facilitates the acquisition, retention or control by or on behalf of another person of terrorist property by any means whatsoever.

LBGB Group strictly prohibits any practices or dealings relating to money laundering and terrorism financing. LBGB Group is committed to comply fully with all relevant anti-money laundering and criminal legislations and will only conduct business with reputable customers and business partners that are not involved in any way with any dealings act of money
laundering and terrorism.

LBGB Group will neither enter into nor tolerate any arrangement which facilitates or appears to be used to facilitate any acquisition, retention, use or control of any payment (monetary or otherwise) intended to be utilised to disguise the criminal activity or conceal criminal proceeds.

11. CONFLICT OF INTEREST

Conflict of interest arises in situations where LBGB Group’s Personnel’s personal interests are interfering or are considered to have potential interference with their objectivity in performing duties or exercising judgment on behalf of LBGB Group, and in general LBGB Group’s interest.

Conflict of interest may be actual, potential or perceived, and may involve financial gain or otherwise.

All Personnel must avoid situations in which personal interest could become conflicted with their professional obligations or duties. LBGB Group’s Personnel must not use their position, official working hours, Company’s resources and assets, or information available to them for
personal gain or to the Company’s disadvantage.

All LBGB Group’s Personnel are required to immediately declare and disclose any personal, professional or business interest that may be in conflict with that of LBGB Group.

12. RECRUITMENT AND PROMOTION

LBGB Group recognises the value of integrity in its Personnel and Business Associates. LBGB Group’s recruitment, training, performance evaluation, remuneration, recognition and promotion for all LBGB Group’s Personnel, including management, shall be designed and regularly updated to recognise integrity.

Staff recruitment will adhere to approved selection criteria to guarantee the hiring of the most qualified and suitable individuals. This is essential to prevent any potential involvement of corruption in the staff hiring process. Consequently, thorough background checks will be carried out to verify that prospective staff members have not been convicted or accused of participating in any bribery or corruption cases, whether at the national or international level.

14. SYSTEMATIC REVIEW & MONITORING

LBGB Group recognises that managing an anti-bribery and corruption programme is a continuous process, risk assessment and a systematic review and monitoring process is necessary to ensure its objectives are being met. The Audit Committee will be responsible for overseeing the process of reviewing the effectiveness and compliance to the anti-bribery and corruption programme and policy. The reviews may take the form of independent audits carried out by an external party, where necessary.

15. RECORD KEEPING

LBGB Group’s Personnel must ensure that all expense claims relating to hospitality, gifts or expenses incurred to Business Associates and/or any person are submitted in accordance with the LBGB Group’s applicable policy and specifically record the reason for such expenditure. LBGB Group’s Personnel shall further ensure that all expense claims shall comply with the terms and conditions of this policy.

16. REPORTING OF POLICY VIOLATION

It is the responsibility of LBGB Group’s Personnel to prevent, detect and/or report any bribery and other forms of corruption.

Suitable reporting channels have been established and maintained for receiving information regarding violations of this Policy, and other matters of integrity provided in good faith by LBGB Group’s Personnel and Business Associates and is provided for under the Whistle Blowing Policy. For further details, the Whistle Blowing Policy of LBGB is available at the Company’s corporate website, www.lbs.com.my.

Reports made in good faith, shall be addressed in a timely manner and without incurring fear of reprisal regardless of the outcome of any investigation.

Retaliation in any form against LBGB Group’s Personnel where the person has, in good faith, reported a violation or possible violation of this policy is strictly prohibited. Any LBGB Group’s Personnel found to have deliberately acted against the interests of a person who has in good faith reported a violation or possible violation of this Policy shall be subjected to disciplinary proceedings including demotion, suspension, dismissal or other actions (including legal action) which LBGB Group may pursue.

17. TRAINING AND COMMUNICATION

LBGB Group shall periodically conducts awareness programmes for the LBGB Group’s Personnel, whenever necessary, to refresh awareness of anti-bribery and anti-corruption measures, and to continuously propagate integrity and ethics.

18. CONSEQUENCES OF NON-COMPLIANCE

LBGB Group regards bribery, acts of corruption and money laundering as serious matters and will apply penalties in the event of non-compliance to this Policy. For LBGB Group Personnel, non-compliance may lead to disciplinary action, up to and including termination of employment and potential legal actions against such Personnel in the interest of LBGB Group.

For external parties, non-compliance may lead to penalties including termination of contract. Further legal action may also be taken in the event that LBGB Group’s interests have been harmed by the results on non-compliance by individuals and organisations.

LBGB Group will provide full cooperation to the authorities in the event any LBGB Group’s Personnel or external parties are subjected to any investigations or charges in relation to any act of bribery, corruption and money laundering and/or terrorism financing.

19. REVIEW OF THE POLICY

This Policy has been approved by the Board and is available to all employees in the LBGB’s corporate website and internal computer networking system.

This Policy is also available for viewing by other stakeholders and the public in the LBGB’s corporate website. This Policy shall be reviewed by the Board once in every two years and be updated to align with the most current and relevant laws and regulations whenever necessary to ensure its effective implementation. Any subsequent amendments to the Policy shall be approved by the Board.

Whistle Blowing Policy

Erfan Sakib on June 29, 2022

1. INTRODUCTION

LBS Bina Group Berhad (“LBGB” or “Company”) and its subsidiaries (“LBGB Group”) is committed in promoting high standard of integrity and accountability as well as good corporate governance practices in managing its day-to-day businesses and operations. The Company also aims to conduct its affairs in an ethical, responsible and transparent manner. This Whistle Blowing Policy (“Policy”) is designed to allow Whistleblower, as hereinafter defined, to disclose any improper conduct in accordance with the procedures and to provide protection to the Whistleblower from reprisal as consequences of making such disclosure.

This Policy is implemented to enhance the alignment with all the existing laws, among others, the Whistleblower Protection Act 2010, Companies Act 2016, Malaysian AntiCorruption Commission Act 2009, Capital Market and Services Act 2007, Personal Data Protection Act 2010 and other applicable laws and regulations in Malaysia pertaining to the above. However, this Policy does not absolve employees and stakeholders from any statutory obligations under any Act and/or Regulation to report criminal offences and/or breaches of law to the relevant enforcement agencies.

This Policy shall be read conjunctively with LBGB Group’s existing policies and Code of Ethics as well as the procedures set out in the LBGB Group’s Employee Handbook and other internal, statutory or regulatory reporting procedures. This Policy shall not invalidate the existing policies but is aimed to provide more avenues for disclosure of improper conduct committed or about to be committed which may be harmful to the LBGB Group.

2. OBJECTIVE

The objectives of this Whistle Blowing Policy are among others to:-

a) Provide avenue for all employees and third parties to disclose any Improper Conduct (as defined hereafter) that could potentially impact the LBGB Group.

b) Provide opportunity and encourage employee to make any disclosure openly, honestly and transparency and that concerns raised will be treated fairly.

c) Provide proper internal reporting channel to make a disclosure of any Improper Conduct made under this Policy.

d) Ensure that a Whistleblower is afforded the applicable and appropriate safeguard including but not limited to confidentiality of identity and information.

e) To ensure the disclosure is made in appropriate manner. Any anonymous disclosure will not be entertained.

f) To enhance the culture of openness and transparent by encouraging Whistleblower to raise concerns regarding any form of Improper Conducts without fear.

3. SCOPE

This Policy applies to all Directors, employees (including employees on contract terms, temporary or short-term employees and employees on secondment) or third parties who have become aware of or genuinely suspect on a reasonably belief that an employee of the LBGB Group has engaged, is engaged or is preparing to engage in, or that our external stakeholders such as consultants contractors, distributors, independent contractors, licensees, manufacturers, primary producers and subcontractors are or will potentially be committing any Improper Conduct, as hereinafter defined.

4. DEFINITIONS

“Confidential Information” shall include without limitation to the following:

a) information about the identity, occupation, residential address, work address, whereabouts of or any other personal information a Whistleblower and a person against whom a Whistleblower has made a disclosure of Improper Conduct;

b) information disclosed by a Whistleblower; and

c) information that, if disclosed, may cause detriment to any person.

“Detrimental Action” shall include without limitation to the following:

a) action causing injury, loss and/or damage, physically, emotionally or otherwise;

b) intimidation and/or harassment;

c) interference with the lawful employment or livelihood of any person, including discrimination, discharge, demotion, suspension, disadvantage, termination or adverse treatment in relation to a person’s employment, career, profession, trade or business or the taking of disciplinary action; and

d) the threat to take any of the actions referred to above.

“Disciplinary Offence” means any action or omission which constitutes a breach of any laws or by-laws or discipline in LBGB Group as provided by law or LBGB Group’s code of conduct, policies and/or contract of employment, as the case may be.

“Improper Conduct” is any conduct which if proved, constitutes a Disciplinary Offence or a criminal offence. Improper Conduct includes, but not limited to, the following:

a) criminal offences, unlawful acts, fraud, corruption, bribery, criminal breach of trust, money laundering and blackmail;

b) workplace discrimination and sexual harassment;

c) failure to comply with legal or regulatory obligations;

d) misuse or misappropriation of LBGB Group’s funds or assets;

e) an act or omission which creates a substantial and specific danger to the lives, health or safety of the employees or the public or the environment;

f) unsafe work practices or substantial wasting of LBGB Group’s resources;

g) abuse of power by an officer of LBGB Group; and

h) concealment or abetment of any of the above.

“Investigating Team” means authorised persons to receive report(s) and carry out investigation on Whistleblowing matters.

“Third Party” refers to LBGB Group’ service providers, independent contractors, vendors, suppliers, customers or general public, where relevant.

“Whistleblower” is a person who disclose or reporting information or concerns on Improper Conduct in accordance with this Policy.

“Whistleblowing” is the disclosure of Improper Conduct based on one’s reasonable belief that any person has engaged, is engaging or preparing to engage in Improper Conduct. This applies even in circumstances where information regarding Improper Conduct is supposed to be treated as confidential.

5. LIMITATIONS

This Policy does not however, cover any issues, complaints or concerns in relation to:-

a) matters which are trivial or frivolous in nature;

b) matters which are motivated by malice;

c) matters pending or determined through LBGB Group’s disciplinary proceedings; and

d) matters pending or determined through any tribunal or authority or court of competent jurisdiction, arbitration or other similar proceedings.

If a Whistleblower is unsure whether a particular act or omission constitutes an Improper Conduct under this Policy, he or she is encouraged to seek advice or guidance from his/her immediate superior or Head of Department or the Head of Human Resources Department.

6. REPORTING

A disclosure of Improper Conduct shall be made to Investigating Team in writing by completing the Whistle Blowing Form. The form shall be emailed to [email protected] which is accessible by all the Designated Persons in the Investigating Team, or hand over to the Designated Persons or post/courier to :

LBS BINA GROUP BERHAD

The Whistleblowing Investigating Team
Level 1-4, Plaza Seri Setia, No. 1, Jalan SS9/2, 47300 Petaling Jaya, Selangor.

The Designated Persons of the Investigating Team are as follows:

Administrator:

1. Head of Human Resources Department
2. Head of Legal Department

Investigating Committee:

1. Chairman of Audit Committee
2. Senior Independent Non-Executive Director
3. Independent Non-Executive Director

7. PROCEDURES

a) The Whistleblower that discovers or genuinely suspects any Improper Conduct shall submit the Whistle Blowing Form disclosing his/her name, contact number, details of alleged person(s), nature of allegation and provide evidence, if possible, to the Investigating Team.

b) If the Improper Conduct involved any members of the Investigating Team, the implicated person(s) shall then be excluded from the activities of screening and subsequent follow-up actions including investigation. In the event the implicated person(s) is LBGB Group Managing Director or his family member, the Board shall replace the function of LBGB Group Managing Director under this Policy.

c) The Administrator shall within seven (7) days (or extended timeline as approved by any of the Investigating Committee) from the receipt of the Whistle Blowing Form, conduct a preliminary screening or assessment of the case and prepare a report (“Assessment Report”) to the Investigating Committee informing the result of assessment and recommend either to disregard the report or to take further action.

d) Within seven (7) days (or extended timeline as approved by any of the Investigating Committee) from the receipt of Assessment Report, so far as is practicable and reasonable, the Investigating Committee shall meet up with Administrator to discuss on the Assessment Report, after fair and due consideration, Investigating Committee has the authority to make final decision, including but not limited to, any of the following:

i) rejection of the Whistle Blowing Form, either in part of in total, if it falls outside the scope of this Policy;

ii) directing the matter or any part thereof to be dealt with under other appropriate internal procedures which includes disciplinary procedures;

iii) directing an investigation into the Whistleblowing made and, on any persons, involved or implicated;

iv) suspending the persons implicated in the Improper Conduct from work pending any further investigation and/or disciplinary procedures;

v) designating the Administrator or any other persons from within or outside of the LBGB Group to conduct investigations or take any other action pursuant to the Policy or other internal policies, rules and regulation of LBGB Group;

vi) obtaining any other assistance from third parties such as external auditors or obtaining legal advice whether from internal or external solicitors; and

vii) referring the matter to an appropriate enforcement agency, which includes the police and the Malaysian Anti-Corruption Commission.

e) The Investigating Committee may also exclude from its meetings any persons it deems appropriate, depending on the nature of the complaint.

8. CONDUCT OF INVESTIGATION

a) In the event further investigation is required, the Investigating Committee shall, as soon as practicable, conduct an investigation into the matter.

b) The Investigating Committee may compel any relevant individual/witnesses deemed relevant to the investigation of the Improper Conduct reported to disclose evidence/data/materials through interview(s). The Investigating Committee shall have absolute discretion to render any assistance, as they may deem fit, to the witness during the interview, subject to a request made by the witness.

c) All interviews and activities carried out during the course of the investigation shall be recorded and reduced to writing and filed by the Investigating Team.

d) The Investigating Committee shall have free and unrestricted access to all records of LBGB Group and shall have the authority to examine, obtain and/or make copies of all or any portion of the contents of the documents, files, desks, cabinets, and other storage facilities of LBGB Group so far as it is necessary to assist in the investigation of the Improper Conduct.

9. INVESTIGATION REPORT

Upon the completion of the investigation, the Investigating Team will submit an Investigation Report of findings to LBGB Group Managing Director or the Board of Directors, as the case may be. The Whistleblower will be notified on the outcome of the investigation by the Administrator.

The Investigation Report will contain the following sections, among others:-

a) The specific allegation(s) of Improper Conduct;

b) All relevant information/evidence received and the grounds for accepting/rejecting them. Copies of interview transcripts and any documents obtained during the course of investigation shall accompany the Investigation Report;

c) The conclusions made and the basis for the same;

d) The steps or recommendations that need to be taken by LBGB Group to prevent the Improper Conduct from continuing or re-occurring in future; and

e) Any further action to be taken by LBGB Group in respect of the perpetrator(s) of the Improper Conduct. The further action includes initiating disciplinary proceedings and referring the matter to the appropriate external authority.

In the event LBGB Group Managing Director or the Board of Directors, as the case may be, is satisfied that based on the findings and recommendations made in the Investigation Report, an Improper Conduct has been committed, the matter shall be referred to the Human Resources Department to follow up with disciplinary proceedings in accordance
with the policies of LBGB Group as well as to LBGB Group’s Legal Department for further advice. No disciplinary action, which includes suspension or termination, shall be taken without the authorisation of LBGB Group Managing Director or the Board of Directors, as the case may be.

If the Group Managing Director or the Board of Directors is not satisfied with the Investigation Report, he may instruct the Investigating Committee to proceed with further investigation.

10. REFERRAL TO EXTERNAL ENFORCEMENT AUTHORITY

Notwithstanding LBGB Group’s Legal Department’s rights to initiate any legal proceedings on behalf and in the best interest of LBGB Group against any perpetrator in relation to the Improper Conduct, LBGB Group’s Legal Department shall, when necessary or obligated by any relevant law, refer or lodge reports of the Improper Conduct to the relevant enforcement bodies or authorities.

11. CONFIDENTIALITY

a) Reasonable steps will be taken by Administrator and/or the Investigating Committee to maintain the confidentiality of Whistleblower’s identity and Confidential Information unless:-

i) the Whistleblower expressly agrees otherwise, and provides his/her agreement in writing; or

ii) otherwise required by law.

b) The Whistleblower or any person who is involved in the investigation process, shall not disseminate to third parties information regarding the Improper Conduct or any part thereof, including the status of outcome of an investigation, except:

i) to those who are authorised under this Policy;

ii) by lodging a report of the Improper Conduct directly with an enforcement agency in accordance with the Whistleblower Protection Act 2010 or any other prevailing law;

iii) in adherence to any law or in adherence to a legally binding requirement of any statutory authority; or

iv) on a strictly confidential basis to a professionally qualified lawyer for the purpose of obtaining legal advice.

c) The Whistleblower shall not:

i) Contact the suspected individual to determine facts or demand restitution; and

ii) Discuss the case, facts, suspicions, or allegations with anyone except to assist in the investigation.

12. INVESTIGATION STATUS

All inquiries concerning the status of the investigation from the person implicated, his/her attorney or representative, or the Whistleblower should be made in writing and directed to the Investigating Committee.

A written response on the request for the status of the investigation will be provided within seven (7) days (or extended deadline as approved by any one of the Investigating Committee) from the receipt of such written request, subject to any extension of time that may be granted by the Investigating Committee.

13. RECORD SAFEKEEPING

A confidential record of each disclosure will be marked ‘CONFIDENTIAL’ and stored securely by the Human Resources Department of the Company for not less than 7 years from the date the disclosure was lodged.

It is the responsibility of the Human Resources Department to be the guardian of the records and to ensure that the documents are properly filed and properly stored.

All records of disclosures made shall be managed in compliance with the provisions of the Personal Data Protection Act 2010 and other applicable laws.

14. PROTECTION

14.1 Upon making a disclosure in good faith, based on reasonable grounds and in accordance with and pursuant to this Policy, provided that the Whistleblower is an employee of LBGB Group:

a) The Whistleblower shall be protected from any Detrimental Action within the Company as a direct consequence of the disclosure, subject to the conditions fulfilled as in paragraph 14.2; and

b) The Whistleblower’s identity and such other Confidential Information of the Whistleblower shall not be disclosed save in accordance with Clause 11.

14.2 Protection to the Whistleblower will be accorded by the Company only when all the following conditions are met:

a) The disclosure is made in good faith and with reasonable grounds, is not
frivolous or vexatious or is not made maliciously with ulterior motive;

b) The Whistleblower has not communicated the disclosure to third-party not related to the disclosure; and

c) The disclosure not made for personal gain, agenda or interest.

The protection against Detrimental Action is extended to any person related to or associated with the Whistleblower that have assisted in providing relevant information to the investigation.

The identity and personal information of the Whistleblower as well as the person implicated in the disclosure may be revealed to persons involved in investigations or any other processes save as so far as is necessary to assist and/or to assist investigations.

A Whistleblower may lodge a complaint to LBGB Group, Administrator or the Investigating Committee of any Detrimental Action committed against the Whistleblower or any person related to or associated with the Whistleblower, by any personnel of LBGB Group.

A Whistleblower or any person associated with her/him who fears or has suffered Detrimental Action may submit a written request to LBGB Group, for relocation of his/her place of employment. LBGB Group shall, as far as is practicable, make arrangements for the relocation if there is a danger or likelihood of Detrimental Action and the only practical means of removing or substantially removing the danger of the effect of Detrimental Action
is by way of relocation.

The Whistleblower protection conferred under this Policy is not limited or affected notwithstanding that the disclosure of the Improper Conduct does not result in any disciplinary action of the person against whom the disclosure was made.

This Policy does not limit the protection conferred by any other written law to any person in relation to information given in respect of the commission of an offence.

The Whistleblower protection conferred under this Policy does not apply where a disclosure was made in a manner inconsistent with or not in compliance with the provisions of this Policy. Notwithstanding the above, the Whistleblower will still be conferred protection save as so far as afforded by the Whistleblower Protection Act 2010 or any other written law.

15. REVOCATION OF PROTECTION

The Company reserves the right to revoke the Whistleblower protection provided pursuant to this Policy if it is of the opinion, based on an investigation or in the course of an investigation that:

a) the Whistleblower herself/himself has participated in the Improper Conduct disclosed, except in instances where:

(i) the participation was under duress; or
(ii) in the view of LBGB Group, the participation could be justified under the circumstances.

b) the Whistleblower willfully made in his/her disclosure of Improper Conduct a material statement which he/she knows or believes to be false or did not believe to be true;

c) the disclosure is made solely with the motive of avoiding dismissal or other disciplinary action;

d) the disclosure of Improper Conduct is frivolous and/or vexatious; and/or

e) the Whistleblower, in the course of making the disclosure or providing further information, breaches the provisions of this Policy and/or commits an offence under the Whistleblower Protection Act 2010.

If the Whistleblower protection has been revoked, LBGB Group shall give a written notice to the Whistleblower of the revocation together with reasons for the same.

16. REVIEW OF POLICY

This Policy has been approved by the Board and is made available for reference in the LBGB’s corporate website and internal computer networking system.

This Policy shall be reviewed by the Board once in every two years and updated whenever necessary to ensure its effective implementation. Any subsequent amendments to the Policy should be approved by the Board upon recommendation by the Audit Committee.

WHISTLE BLOWING FORM

FLOW CHART

Term of Reference of Nomination And Remuneration Committee

Erfan Sakib on June 29, 2022

1. OBJECTIVE

The main objective of the Nomination and Remuneration Committee (“the Committee”) is to assist the Board in fulfilling its responsibilities in going through a formal process of reviewing the balance and effectiveness of its Board, identifying the skills needed and those individuals who might best provide them.

The Committee shall also assist the Board in fulfilling its fiduciary responsibilities for reviewing and making recommendations to the Board of Directors the terms of employment of and all elements of the remuneration of the Executive Directors and Senior Manager (Grade GM1 and above) of LBS Bina Group Berhad (“LBGB” or “Company”).

2. COMPOSITION

(a) The Committee shall comprise at least three (3) members, each of whom shall be appointed by the Board of Directors primarily from amongst the Independent Non-Executive Directors of the Company.

(b) The members of the Committee shall elect a Chairman from amongst their number whom shall be an Independent Non-Executive Director. In the absence of the Committee Chairman, the remaining members present shall elect one of them to chair the meeting.

3. PROCEEDINGS OF MEETING

(a) The quorum for meeting of the Committee shall be three (3).

(b) Meetings shall be held as and when appropriate, but shall not less than once in a calendar year.

(c) Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any member thereof. Notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee not less than three (3) working days prior to the date of the meeting.

(d) The Company Secretary shall be the Secretary of the Committee.

(e) A resolution in writing signed by majority the members in lieu of convening of a formal meeting shall be valid and effectual as if it had been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members.

(f) The resolution in writing and other documents signed by the members using digital signatures and/or electronic signatures shall be as valid, enforceable and effective as the original of the resolutions/documents duly sign physically provided that such digital signatures and/or electronic signatures are created in accordance with the Digital Signature Act 1997 and/or Electronic Commerce Act 2006.

(g) For good governance, each member must attend at least 50% of the meetings held within the year, failing which Board will decide on the member’s disqualification.

4. REPORTING PROCEDURES

The Secretary shall circulate the minutes of meetings of the Committee to all members of the Committee. Minutes of each meeting shall be duly entered in the book provided therefor. The Chairman shall report on each meeting to the Board.

5. AUTHORITY

The Committee is authorised by the Board to undertake the specific duties and responsibilities stated below. The Committee is also authorised to obtain external legal or other independent professional advice, as it considers necessary.

6. DUTIES AND RESPONSIBILITIES

(1) With regard to the nomination functions, the Committee shall:-

(a) regularly review the structure, size and composition of the Board and make recommendations to the Board with regard to any adjustments that are deemed necessary;

(b) be responsible for identifying and nominating for the approval of the Board candidates to fill Board vacancies as and when they arise;

(c) keep under review the core competencies and skills required of Directors to best serve the business and operations of the Company and its subsidiaries (collectively “LBGB Group” or Group”) as a whole with a view to ensure the continued ability to compete effectively in the marketplace;

(d) review the independence of Independent Directors on an annual basis;

(e) to facilitate annual evaluation and assessment of the effectiveness of the Board as a whole and the Board Committees, as well as the contributions and performance of individual Directors and Board Committee members; and

(f) To review and facilitate Board’s induction program and training needs in areas which the Directors could improve on.

(2) It shall also make recommendations to the Board:

(a) with regard to plans for succession for directors and senior management positions;

(b) with regard to the re-appointment of any non-executive director at the conclusion of his/her specified term of office;

(d) concerning the re-election by shareholders of any director under the “retirement by rotation” provisions in the Company’s Constitution;

(e) concerning any matters relating to the continuation in office as a director at any time; and

(f) any such regulations, guidelines and/or procedures to function effectively and fulfill the Committee’s objectives.

(3) The duties and functions of the Committee with regard to remuneration of the Directors shall include:-

(a) to establish and agree with the Board of Directors the framework or board policy for the remuneration of the executive directors and senior management;

(b) to provide an objective and independent assessment of benefits and incentives granted to the executive directors and senior management of the Company to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Group;

(c) within the terms of the agreed policy, recommend the total individual remuneration package of new executive director including, where appropriate, benefits and incentive payments.

(d) establish the policy for and scope of termination payments and compensation commitments;

(e) oversee any major changes in employee benefit structures throughout the Group; and

(f) ensure that provisions regarding disclosure of remuneration under the Listing Requirements of Bursa Malaysia Securities Berhad.

7. REVIEW OF TERM OF REFERENCE

This Term of Reference has been approved by the Board and is made available for reference on the Company’s corporate website and internal computer networking system.

It shall be reviewed by the Committee and update whenever necessary to ensure its effective implementation. Any subsequent amendments to the Policy should be approved by the Board upon recommendation of the Committee.

Terms of Reference Audit Committee

Erfan Sakib on June 29, 2022

1. OBJECTIVE

The main objective of the Audit Committee (“Committee”) is to assist the Board of Directors (“Board”) in fulfilling its fiduciary responsibilities relating to corporate accounting, system of internal controls, management and financial reporting practices of LBS Bina Group Berhad (“LBGB” or “Company”) and its subsidiaries (collectively “LBGB Group” or “Group”).

2. COMPOSITION

(1) The Committee shall be appointed by the Board from amongst its number and shall consist of not less than three (3) members.

(2) All the members must be Non-Executive Directors, with a majority of them being Independent Directors. Independent Director shall be one who fulfills the requirements as provided in the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa Securities”).

(3) The members of the Committee must be financially literate and at least one member:

(a) must be a member of the Malaysian Institute of Accountants (“MIA”); or

(b) must have at least three (3) years working experience and:

(i) passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(ii) must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(i) has a degree/master/doctorate in accounting or finance; or

(ii) is a member of any professional accountancy organization which has been admitted as a full member of the International Federation of Accountant; or

(d) must have at least 7 years’ experience being a chief financial officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation.

(4) Members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Director.

(5) No alternate director can be appointed as a member of the Committee.

(6) If a member of the Committee ceases to be a member resulting in the non-compliance of paragraph 1, 2 and 3 above, the Board must fill the vacancy within three (3) months.

(7) No former key audit partner shall be appointed as a member of the Committee before observing a cooling-off period of at least three (3) years.

(8) When a member ceases to be director of the Board, his membership in the Committee shall also cease accordingly.

(9) The terms of office and performance of the Committee and each of its members shall be reviewed by the Nomination and Remuneration Committee annually.

(a) Planning and conducting meetings;

(b) Overseeing reporting to the Board;

(d) Maintaining active ongoing dialogue with management and both internal and external auditors.

3. QUORUM

The quorum for meeting of the Committee shall be two (2) in which the majority present in respect of such meeting must be Independent Directors. A valid quorum shall consist of at least one (1) member who is qualified under Paragraph 15.09(1)(c) of the Listing Requirements of Bursa Securities.

4. CHAIRMAN

(1) The members of the Committee must elect a Chairman from amongst their number who is an Independent Non-Executive Director.

(2) The Chairman of the Committee shall not be the Chairman of the Board.

(3) The Chairman is responsible for ensuring the overall effectiveness and independence of the Committee:

(4) The Chairman together with other members should ensure, among others, that:

(a) The Committee is fully informed about significant matters related to the Group’s audit and its financial statements and addresses these matters;

(b) The Committee appropriately communicates its insights, views and concerns about relevant transactions and events to internal and external auditors;

(c) The Committee’s concerns on matters that may have an effect on the financial or audit of the Company are communicated to the external auditors; and

5. PROCEEDINGS OF MEETING

(1) Meeting shall be held at least four (4) times in a financial year. The Chairman of the Committee, and in consultation with the Secretary, should determine the frequency of the meetings.

(2) The Chairman may convene additional meetings at his discretion or if requested to do so by any of its member, the internal or external auditors to consider any matters within the scope and responsibilities of the Committee.

(3) Any member may participate in the meetings of the Committee by means of tele-conferencing, video conferencing or any other audio/video communication whereby all persons attending or participating the meetings can hear/see each other. The person or persons participating the meetings in the aforesaid manner shall be deemed for all purposes to be present in person at such meetings.

(4) The key management, representative of the external auditors, internal auditors, other Board members, employees and/or external independent professional advisers may attend the meetings upon the invitation of the Committee.

(5) A resolution in writing signed by majority the members in lieu of convening of a formal meeting shall be valid and effectual as if it had been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more members.

(6) The resolution in writing and other documents signed by the members using digital signatures and/or electronic signatures shall be as valid, enforceable and effective as the original of the resolutions/documents duly sign physically provided that such digital signatures and/or electronic signatures are created in accordance with the Digital Signature Act 1997 and/or Electronic Commerce Act 2006.

(7) The Company Secretary shall be the Secretary of the Committee and shall responsible, with the concurrence of the Chairman, for drawing up and circulating the agenda and the notice of meetings together with the supporting explanatory documents to members prior to the meeting.

(8) Minutes of each meeting shall be duly entered in the minutes books and safekept by the Secretary at the registered office. The Secretary shall circulate the minutes of meetings of the Committee to all members of the Committee and the Board.

(9) The Committee shall meet with the External Auditors and Internal Auditors respectively without the presence of other Board Members and Management of the Company at least twice in a financial year and whenever necessary.

(10) For good governance, each member must attend at least 50% of the meetings held within the year, failing which Nomination and Remuneration Committee will decide on the member’s disqualification.

6. AUTHORITY

The Committee shall within its terms of reference:

(1) have adequate resources which are required to perform its duties;

(2) have full access to any information as required to perform its duties;

(3) have the authority to investigate any activity within its terms of reference;

(4) have the authority to form sub-committee(s) if deemed necessary and fit;

(5) have the authority to delegate any of its responsibilities to any person or committee(s) that it deems fit; and

(6) be able to obtain independent professional or other advice and invite outsiders with relevant experience to attend the meeting of the Committee.

7. DUTIES AND FUNCTIONS

The main duties and functions of the Audit Committee shall be:

(1) Internal Audit

(a) To oversee the functions of the Internal Audit Department and ensure compliance with relevant regulatory.

(b) To review the adequacy of the scope, competency and resources of the internal audit functions and the necessary authority to carry out its work;

(c) To review the internal audit plan, process and the major findings of internal audits assessments, investigation undertaken and whether or not appropriate action is taken on recommendations, and ensure coordination between the internal and external auditors;

(d) Ensure that the internal audit function is effective and able to function independently;

(e) To assess or evaluate the performance of members of internal audit function; and

(f) To review matters concerning the employment or appointment (and re-appointment) of the in-house and/or outsourced internal audit (as the case may be) and the reasons for resignation or termination or either party.

(2) Risk Management

(a) Assist the Board in identifying the principal risks in the achievement of the Company’s objectives and ensuring the implementation of appropriate systems to manage these risks.

(b) Review and recommend the risk management policy, procedures and risk management framework for the approval and acknowledgement of the Board and provide guidance on the overall risk strategy and directives for implementation and ensure that the principles and requirements of managing risk are consistently adopted throughout the Group.

(c) Review periodically the risk management framework and risk profile and to be satisfied that the methodology employed allows the identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to minimise losses and maximise opportunities.

(d) Commission, where required, special projects to investigate, develop or report on specific aspects of the risk management processes of the Company.

(3) Internal Control

(a) Oversee the Company’s internal control structure to assure operational effectiveness and efficiency, reduce the risk of unreliable financial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance.

(b) Monitor systems and procedures, with external and internal auditors, which are designed to provide a satisfactory and effective level of internal controls, asset protection and management information.

(c) Monitor the Group’s operations via appropriate internal audit reviews, to ascertain if adequate attention is given to attributes of efficiency, effectiveness and economy.

(d) Assist the Board in setting appropriate policies on internal control system and ensure that the system is functioning adequately.

(4) External Audit

(a) To consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal of the external auditor before making recommendation to the Board;

(b) To review the external auditors’ audit scope and plan, audit report and the extend of assistance rendered by employees of the Company;

(d) To review, with the external auditor, the audit reports, the auditor’s evaluation of the system of internal control, audit plan and the assistance given by the employees to the external auditor;

(e) To discuss issues and reservations arising from the interim and final audits, and matters the auditor may wish to discuss (in the absence of Management where necessary);

(f) To review whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment; and

(g) To review the effectiveness of the external auditors, the qualifications, expertise and adequacy of resources provided by the external auditors.

(5) Financial Reporting

To review with the management the quarterly and year-end financial statements of the Company prior to the approval by the Board, focusing particularly on:

(a) Any changes in accounting policies and practices;

(b) Significant adjustments arising from the audit;

(d) Significant and unusual events;

(e) The going concern assumption; and

(f) Compliance with accounting standards and other legal requirements

(6) Related Party Transactions

To review any related party transactions and conflict of interest situation that may arise in the Company including any transactions, procedures or course of conducts that raise questions of management integrity.

(7) Other Matters

(a) To direct and where appropriate supervise any special project or investigation considered necessary;

(b) To report to the Board summarising the work performed in fulfilling the Audit Committee’s primary responsibilities; and

8. REVIEW OF TERM OF REFERENCE

This Term of Reference has been approved by the Board and is made available for reference on the Company’s corporate website and internal computer networking system.

Directors’ Code of Ethics

Erfan Sakib on June 29, 2022

Board members are required to observe the Directors’ Code of Conduct as follows:

Twelve (12) Principles

1. To observe high standards of Corporate Governance

Have a clear understanding of the aims and purpose, capabilities and capacity of the Company to observe and maintain the high standards of Corporate Governance, ethical and business conduct in the performance and exercise of their responsibilities as Directors of the Company.

2. To devote sufficient time and effort

Devote sufficient and reasonable time, effort, energy and attention to the Company to ensure diligent performance of his/her duties, including preparing for meetings and discussions thereby reviewing in advance materials distributed by the Company, if any and making reasonable inquiries; and

Should notify the Board before accepting any new Directorships in any public listed companies and the time spent on the new appointments.

3. To avoid conflict of interest

Directors have a duty to act honestly and declare any personal interests whether directly or indirectly relating to public duties and take steps to resolve any conflicts arising in a way that protects the interests of the Company;

Should dedicate their best efforts to advancing the Company’s interest and to make decisions in the best interest of the Company and independent of outside influence including but not limited to financial interests, other business interests, other employment, entertainment and gifts; and

When acting on of behalf of the Company, the Director should never accept any benefit as an inducement or reward for taking any action (or specifically not taking any action) in their official capacity as a Director and gifts other than of token value should generally be refused.

4. To avoid misuse of position and information

Never uses his/her position as Directors and improper use of any information acquired by virtue of his/her position as Director, directly or indirectly, an advantage for himself/herself or for any other person; and

Directors are prohibited from dealing in securities of the Company when he/she is in the possession of unpublished price sensitive information.

5. To ensure integrity of records

Should not place themselves under any financial or other obligation to any person that might reasonable be thought to influence them in the performance of their duties;

Should disclose immediately all contractual interests whether directly or indirectly with the Company; and

Should be willing to exercise independent judgment and, if necessary, openly oppose if the vital interest of the Company is at stake.

6. To ensure confidentiality of communication and transactions

Shall maintain confidentiality of information entrusted to them by the Company. The Company’s confidential and proprietary information shall not be inappropriately disclosed or used for personal gain or advantage.

7. To ensure compliance with applicable laws

Should have access at all times to the advice and services of the Management, Company Secretaries, Internal Auditors and External Auditors and the Board may seek any independent professional advice at the expense of the Company if required in furtherance of their duties to ensure all applicable laws, rules and regulations, confidentiality obligations, corporate policies and procedures are complied with.

8. To demonstrate openness and timeliness of communication

Subject to the restrains of all applicable laws, Directors will ensure openness and timeliness of the release of announcements and to give reasons about decision and actions.

9. To exercise duties and act honestly in the best interest of the Company

Should at all times exercise their powers of the purposes they were conferred, for the benefit, prosperity and sustainability of the Company in any transactions and to act honestly and responsibly in the exercise of his powers in discharging his duties in the best interests of the Company and the Group.

10. To uphold accountability

Uphold accountability at all times. This includes ensuring that the Company’s resources are properly safeguarded and the Company conducts its operations as economically, efficiently and effectively as possible at all time.

11. To maintain positive relationship with shareholders, employees, creditors and customers

Should be conscious of the interest of shareholders, employees, creditors and customers of the Company;

Should at all times promote professionalism and improve the competency of management and employees; and

Should ensure adequate safety measures and provide proper protection to workers and employees at the workplace.

12. Corporate Social Responsibility

Directors should be committed to acting responsibly for the Company’s actions and strive to operate in a way that encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and public as a whole.

Board Charter

Erfan Sakib on June 28, 2022

Introduction

The Board of Directors (“Board”) of LBS Bina Group Berhad (“LBGB” or “Company”) and its subsidiaries (collectively “LBGB Group” or “Group”) recognises that good corporate governance is essential for delivering sustainability, enhancing business integrity and shareholders value towards achieving the Group’s corporate vision and mission. This Board Charter is subject to the provisions of the Companies Act 2016 (“Companies Act”), the Constitution of LBGB, the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Malaysian Code on Corporate Governance (“MCCG”) and any other applicable law or regulatory requirements.

2. Objective

To promote the highest standards of Corporate Governance within the Group and to clarify, among others, the roles and responsibilities as well as fiduciary duties; various legislations and regulations affecting their conducts and application of sound corporate governance principles towards corporate accountability with the ultimate objective of maximisation of shareholders’ value and safeguarding stakeholders’ interests.

3. Board Size and Composition

3.1 Size and Mix of Skills

Pursuant to the Constitution of the Company, the Board shall not be less than three (3) directors and not more than fifteen (15). The Board has power under the Constitution to appoint directors to fill casual vacancy or as additional directors. At any one time, at least two (2) or the majority of the Board members, whichever is higher, shall be Independent Non-Executive Directors. Directors may relinquish their membership on the Board with prior written notice to the Company Secretary, subject to compliance with the provisions of the Companies Act, MMLR and the Company’s Constitution. The Board shall consist of qualified individuals with diverse set of skills, experience, background, perspective, gender, age and knowledge necessary to govern the Company. The composition and size of the Board is such that it facilitates the decision making of the Board. The Board through the Nomination and Remuneration Committee (“NRC”) shall review the size and composition of the Board and Board Committees, which include the skill sets, experience and functional knowledge of its members on a periodic basis, to ensure an appropriate balance of skills, experience and diversity.

3.2 Independence

An Independent Director shall, upon his appointment, give to Bursa Securities a letter of confirmation that he is an Independent Director as defined under Paragraph 1.01 of the MMLR. An Independent Director shall also provide to the Company an annual declaration of his independence in the form as the NRC may from time to time prescribe or approve.

3.3 Board Diversity

Board room diversity is good corporate governance. The Board shall at all times promotes and welcomes diversity and gender mix in its composition for ensuring that corporate board includes a diverse set of skills, backgrounds and knowledge which can widen the Board’s perspective in effectively discharging its duties and responsibilities as well as assists the Board in its decision-making process.

4. Roles and Responsibilities

4.1 Responsibilities of the Board

The Board takes full responsibility in leading, governing, guiding and monitoring the entire performance and enforces standards of accountability including the processes for financial reporting, risk management and compliance. The Board assumes, amongst others, the following roles and responsibilities:-

- - To formulate and evaluate the strategic plans and direction of the Group to support long-term value creation, including strategies on economic, environmental and social considerations underpinning sustainability.
  - To ensure the necessary resources are in place for the company to meet its objectives and strategic plans and lead, monitor management performance in implementing the strategic plans;
  - To oversee the conduct of the Group’s businesses and financial and nonfinancial performance;
  - To identify principal risks affecting the Group, setting the risk appetites and to ensure the implementation of appropriate internal controls and mitigation measures;
  - To promote good corporate governance culture together with senior management within the Group which reinforce ethical, accountable and profession behaviour;
  - To review challenge and decide on management’s proposals for the Group, and monitor its implementation by management;
  - To establish and review training programme and succession planning to the Board and all candidates appointed to senior management positions are of sufficient calibre;
  - To approve the change of corporate organisation structure plan including new investments or divestments both locally or abroad;
  - To oversee the development and implementation of stakeholders communication policy for the Group; and
  - To review the adequacy and the integrity of the Group’s management information and internal control system.

4.2 Matters Reserved for the Board

The following are the major matters specifically reserved for the Board:

(i) corporate strategies, plans, targets and programmes proposed by management prior to their implementation and execution;
(ii) material investments and divestments, mergers and acquisitions, corporate restructuring, both local and abroad;
(iii) appointment of new Directors, Board Committee members, Managing Director, Chief Executive Officer, Company Secretary and other senior management positions base on recommendation of the Nomination and Remuneration Committee;
(iv) annual financial statements and the quarterly financial results prior to releasing to Bursa Securities Malaysia Berhad (“Bursa Securities”);
(v) material related party transactions and capital financing;
(vi) declaration of dividend and approving dividend policy;
(vii) appointment of external auditors; and
(viii) banking facilities.

The Company has in place List of Authority Limit to guide the Board and Management on applicable threshold for relevant approving authorities.

4.3 Roles of the Chairman

The positions of Chairman and Group Managing Director (“GMD”)/ Chief Executive Officer (“CEO”) shall be held by different individuals. The roles of the Chairman and GMD/ CEO are distinct and separate to ensure balance of power and authority.

The Chairman of the Board is mainly responsible to provide leadership for the Board to perform effectively, lead the board to practice high standard of corporate governance, set the corporate cultural tone from the top, chairing Board meetings and setting Board agendas, and promoting effective Board relationships. He is also responsible for determination of strategic direction of the Group for the Board’s consideration and approval.

The Chairman acts as the Group’s primary official spokesperson and he also serves as Chair of all shareholders’ meeting of the Company

4.4 Roles of the GMD/CEO

The GMD/CEO assumes the overall responsibility for the implementation of the Group’s strategy and in carrying out the Board’s directions, managing the businesses of the Group and driving performance within strategic goals and commercial objectives. The GMD/CEO leads the management team in carrying out the corporate strategy and vision of the Group, and acts as a liaison between the Management and the Board and ensuring that key developments and/or issues are communicated to the Board accordingly.

The specific responsibilities of the Group GMD/CEO include:-

(i) Developing strategic direction, including short term and long term business plan;
(ii) Ensuring strategies and corporate policies are effectively implemented;
(iii) Ensuring Board decisions are implemented and all decisions reflect its
environment, social, governance intentions as articulated in the sustainability policy/statement;
(iv) Providing leadership by effectively communicate the vision, management culture, business strategy and sustainability to the employees;
(v) Keeping the Board fully informed of all important aspects of the Group’s operations and ensuring sufficient information is distributed to Board members; and
(vi) Ensuring the day-to-day business affairs of the Group are effectively managed.

4.5 Roles of the Senior Independent Non-Executive Director

The Board has appointed a Senior Independent Non-Executive Director (“SINED”) who acts as a designated contact to whom shareholders’ concerns or queries may be raised, as an alternative to the formal channel of communication with shareholders.

SINED shall serve as the principal conduit between the Independent Non-Executive Directors (“INEDs”) and the Chairman on sensitive issues.

4.6 Individual Directors

Directors are expected to comply with their legal, statutory and equitable duties and obligations when discharging their fiduciary duties as Directors. These duties include:

(i) acting in good faith and in the best interest of the Group;
(ii) exercise reasonable care, perform to the best of their abilities, and utilise any relevant skills, knowledge, or experience that may have;
(iii) avoid conflict of interest between personal and the Group;
(iv) Disclose interest in any transaction, arrangement, contract or proposed contract made by the Group;
(v) exercise power for a proper purpose;(vi) compliance with the Companies Act 2016, Main Market Listing Requirements (“MMLR”) of Bursa Securities, Securities Commission Act 1993 and other applicable regulatory requirements;
(vii) ensuring Board information, discussions, deliberations and decisions that are not publicly known are not used for personal interest, or their employers’ interest; and
(viii) possess reasonable level of general knowledge, skill and experience expected of a director.

5. Board Committees

5.1 Roles of the Board Committees

The Board has the right to establish Board Committees with different functions delegated to assist the Board in the discharge of its duties and responsibilities. Where a Board Committee is formed, specific terms of reference of the committee shall be established in writing to cover matters such as the objective, composition, functions, roles and responsibilities of the committee. The Chairman of the Board shall not be a member of the Audit Committee (“AC”), and NRC.

The Board has formed the following Board Committees with different functions delegated to assist the Board in carrying out its duties and responsibilities:-

(i) AC;
(ii) NRC;
(iii) Risk Management Committee (“RMC”); and
(iv) Sustainability Committee (“SC”)

The Board Committees report to the Board of their deliberations, findings and recommendations. Minutes of the Board Committees are presented at the Board meetings for further discussion and direction. While these committees have the authority to deliberate on matters delegated to them, all decisions and/or recommendations made by these Committees will be brought to the attention of the Board, who is collectively responsible for the Group’s success, business, strategy, risk management, operational and financial performance.

The terms of reference of the Board Committees shall be approved by the Board. It will be reviewed and updated as and when required and recommend the revised
terms of reference to the Board for approval.

As a matter of principle, the Board Committees have access to the appropriate external and professional advice needed to assist them in fulfilling their roles.

(i) AC

The key responsibilities of AC are to ensure high corporate governance practices whilst providing oversight on the Group’s financial reporting, disclosure, regulatory compliance, risk management and monitoring of internal control processes within the Group. The AC meets regularly amongst others to review the quarterly results, full year financial statements, audit reports which include observations pertaining to risk management and internal controls, as well as related party transactions.

(ii) RMC

The primarily responsibility of RMC is to ensure that the integrated risk management functions within the Group are effectively discharged. The RMC assists the Board in, amongst others, identifying, evaluating, monitoring and reporting of risk areas and providing control measures, recommendations and management action plans to mitigate such risks through periodic meetings and updates to the AC in a timely basis.

(iii) NRC

The members of NRC comprise entirely Non-Executive Directors with the majority being independent.

The NRC reviews the procedures for appointment of Directors and senior management personnel of the Group and their remuneration package. It also undertakes individual assessment of the members of the Board for reappointment and new appointment. The determination of the remuneration of the INED is a matter for the Board as a whole.

NRC is also tasked with the annual review of the required mix of skills, knowledge and experience and other qualification of the Board members; examine size of the Board with the optimum number of Directors on the Board to ensure its effectiveness.

(iv) SC

The primarily responsibility of the SC is to oversight the sustainability strategy and initiatives covering economic, environmental, social and governance (ESSG) aspect as well as embedding sustainability practices into the businesses of LBGB Group.

6. Board Functions

6.1 Ethics and Compliance

6.1.1 Code of Ethics for the Board

The Code of Ethics for the Board provides guidance for proper standards of
conduct, sound and prudent business practices as well as standard of ethical
behaviour for Directors, based on principles of integrity, responsibility, sincerity and corporate social responsibility.

The Board observes the following Code of Ethics:-

(i) Directors’ Code of Ethics established by the Company;
(ii) Companies Act, 2016; and
(iii) The Code of Ethics for Company Directors issued by the Companies Commission of Malaysia.

6.1.2 Duty of Care and Diligence

All directors shall at all times exercise his/her powers for a proper purpose and in good faith in the best interest of the Company. He/she shall exercise reasonable care, skill and diligence with the knowledge, skill and experience which may reasonably be expected of a Director having the same responsibilities; and any additional knowledge, skill and experience which he/she in fact has.

A director who is appointed by virtue of his position as a representative of a shareholder, must act in the best interest of the corporation in which he sits as a board member. In the event of any conflict between his/her duty to act in the best interest of the corporation and his duty to his nominator, he must not subordinate his/her duty to act in the best interest of the corporation to his/her nominator.

6.1.3 Business Judgement

A director who makes a business judgement is deemed to meet the requirements of the duty as aforesaid and the equivalent duties under the common law and in equity if he/she:-

(i) Makes the business judgement in good faith for a proper purpose;
(ii) Does not have a material personal interest in the subject matter of the business judgement;
(iii) Is informed about the subject matter of the business judgement to the extent the Director reasonably believes to be appropriate under the circumstances; and
(iv) Reasonably believes that the business judgement is in the best interest of the Company.

6.1.3 Reliance of Information Provided by Others

A Director in exercising his/her duties may merely rely on information, professional or expert advice, opinions, reports or statements including financial statements and other financial data, prepared, presented or made by:-

(i) Any officer of the Group whom the Director believes on reasonable grounds to be reliable and competent in relation to the matters concerned;
(ii) Any other person retained by the Group as to matters involving skills or expertise in relation to matters that the Director believes on reasonable ground to be within the person’s professional or expert competence;
(iii) Another director in relation to matters within the Director’s authority; or
(iv) Any committee to the Board of which the Director did not serve in relation to matters within the committee’s authority.

A Director’s reliance on information provided by others is deemed to be made on reasonable grounds if it was made in good faith; and after making an independent assessment of the information or advice, opinions, reports or statements, including financial statement or other financial data, having regard to the director’s knowledge of the Group and the complexity of the structure and operation of the Group.

6.1.5 Declaration of interests

The Directors shall also make declaration of shareholding, including related party transactions and/ or conflict of interest situations, if any, for the Company’s records purpose.

6.2 Risk Management

The Group adopts the Enterprise Risk Management (ERM) framework to manage its risks. The ERM framework requires the Group to identify, evaluate, monitor, mitigate and report all material risks associated to its business and operations. The framework provides the Board and Management with a tool to anticipate and manage both the existing and potential risks, taking into consideration the changing risk profiles and dictated by changes in business strategies, operating and regulatory environment, and functional activities from time to time.

6.3 Policy and Procedures

The Group should establish and clearly document internal policies and procedures of its major business units to serve as day-to-day operational guides to ensure compliance with internal controls and applicable laws and regulations.

The policies and procedures shall be reviewed from time to time or as and when necessary, to ensure continuous improvements in operational efficiency taking into consideration the changing industry profile on regulatory requirements, risks and internal control measures for mitigation, and new products and services.

6.4 Sustainability

The Board recognises the importance of sustainability that improves the continuous improvement process for an organisation in the modern economy which includes the sound management of people and environment, and business sustainability eventually.

The Board shall take into consideration the interests of the community, employees, environment, shareholders and other stakeholders when making business decision and managing resources in developing its sustainability strategies through internal policies which aim at securing sustainable elements to guide policies towards sustainability development. The Board should also introduce formal strategies on promoting the sustainability of the Company, with particular focus on the environmental, social and governance aspects of the business.

6.5 Stakeholder Communication

In ensuring the high standards of transparency and accountability in its communication to stakeholders as well as to potential investors, research analysts and the public, the Group has put in place an Investor Relations (IR) department in ensuring the Group’s IR message is clearly coordinated and communicated.

The IR activities are led by the Group Managing Director and supported by the IR Team and duly governed by IR Policy as its official corporate disclosure policy and procedure in disseminating corporate and material information to the investing public.

The mode of communications to shareholders and investors shall include the followings:-

(i) timely announcements and disclosures made to Bursa Securities;
(ii) regular dialogues with research analysts to explain periodical results achieved and business strategies;
(iii) press conference held to provide media opportunity to receive updates from
the Board and to address queries or areas of interest of the media; and
(iv) participates in institutional investors’ forums.

7. Board Efficiency

7.1 Selection of Candidates

The NRC is responsible for identifying and nominating suitable candidates for appointments to the Board for approval, either to fill vacancies or as addition to meet the changing needs of the Group. Before recommending an appointment to the Board, the NRC undertakes a comprehensive evaluation of the candidates. The NRC also takes into accounts the Group’s business and matches the capabilities and contribution expected for a particular appointment.

The NRC shall conduct an interaction session with the proposed candidates and assesses the candidates based on the following aspects:-

(i) Specific knowledge, skill and working experience of the candidate;
(ii) Trainings attended by the candidate;
(iii) Time commitment by the candidate;
(iv) Independence and conflict of interest;
(v) External directorships of the candidate; and
(vi) Personal and professional ethics, integrity and other expertise or knowledge
that could complement to the experience and skill sets of other Board members.

The proposed candidates are subject to bankruptcy check prior to recommend to the
Board for their appointment as the Directors.

7.2 Appointment to the Board

The appointment is conducted in accordance with the recommendation of the NRC and after deliberation and satisfaction by the Board.

7.3 Terms of Appointment
Each year, one-third (1/3) of the Directors retire from office, and being eligible, may offer themselves for re-election at the Annual General Meeting. In addition, all
Directors shall retire from office once at least, every three (3) years, but shall be eligible for re-election.

Directors appointed during the financial year hold office until the next Annual General Meeting and if eligible, may offer themselves for re-election.

The Executive Director is expected to resign from the Board in the event of his/her service contract with the Company is terminating for whatever reason.

7.4 Tenure of Independent Directors

The tenure of service of Independent Directors is capped at the maximum limit of nine (9) years as recommended by the MCCG. An Independent Director who has served the Company for nine (9) years may, subject to NRC’s recommendation and shareholders’ approval through a two-tier voting process, continue to serve the Group in the capacity of Independent Director as guided by MCCG.

The NRC undertakes assessment of the independence of the Independent Directors,
upon admission, annually and as and when new interest or relationship develops.

7.5 Directors’ Remuneration

The Group has in place a remuneration framework for Director and Key Senior Management of the Group. The framework is sufficient to attract, retain and remunerate Directors for their contribution to the Group. This framework includes fees, monthly and meeting allowances for INEDs which are based on industry standards and set by reference to the responsibilities taken on by them. In order that it remains competitive and consistent with the culture, objective and strategy of the Group, this remuneration framework is reviewed from time to time to ensure it remains the market competitiveness.

7.6 Directors’ Insurance

The Company shall make all reasonable effort to provide the Directors with, and will pay the premiums for, indemnity and insurance cover while acting in their capacities as the Directors, to the fullest extent permitted by the act and law.

7.7 Board Effectiveness

The Board recognises the importance of assessing the effectiveness of individual directors, the Board and its Committees Annually, the NRC provides a formal procedure for the assessment on the effectiveness of individual directors and the Board as a whole. This shall take the form of questionnaires comprising an evaluation by the NRC and the results of the assessment will be collected and collated by the Company Secretary, on behalf of NRC for review and to ascertain performance and effectiveness at the NRC meeting.

7.8 Board and Management

The Board delegates authority and vests accountability for the Group‘s day-to-day operations with the Key Senior Management team led by the GMD/CEO to achieve the corporate objectives.

The Board delegates the resources management to the Key Senior Management team and has unrestricted access to any information pertaining to the Company and the Group. As such, the Key Senior Management team would be invited to attend the Board Meetings as and when necessary, to furnish with explanations and comments
on the relevant agenda items tabled at the Board Meetings or to provide clarification on issue(s) that may be raised by the Directors. The Board and the Key Senior Management work together to make decisions that will result in growth of the Company, and subsequent financial benefit to shareholders.

The Company has put in place the Directors’ and Officers’ insurance coverage against liabilities arising from holding offices by virtue of their positions and in connection with the performance of their responsibilities. Nevertheless, the Directors and Officers shall not be indemnified where he/she found guilty in respect of any negligence, default, breach of duty or breach of trust.

7.9 New Directorships and Time Commitment

The Board values the experience and perspective gained by the Directors from their services on the board of other companies, organisations and associations. However, they are expected that they will always be in a position to allocate sufficient time to
meet the expectation of his/her role as Directors of the Company.

All Board members shall notify the Board before accepting appointment of any new directorships in other listed companies as long as the new directorships is not in conflict with the business and does not affect his performance while holding office as
Director of the Company. The notification shall include an indication of time that will be spent on the new appointment and to ensure that such appointments would not unduly affect his/her time commitment and responsibilities to the Board and the
Group’s corporate activities.

The Directors are guided by the requirements of MMLR of Bursa Securities on attendance of at least 50% of Board Meetings held in a financial year.

7.10 Restriction of Directorships

The limit on the number of directorships that may be held at any point of time by the Board members are not more than 5 for listed companies and no restriction of the number of directorships in non-listed companies, excluding the position on the Board of the Company which requires active involvement as a board member or such other requirements as prescribed by the MMLR.

7.11 Directors’ Training and Development

Newly appointed Directors shall attend an induction programme which is tailored to meet their individual needs. This includes meeting with Key Senior Management team to enable them to build up a detailed understanding of the Group’s business and strategies, and the risks and issues which they are faced. The induction training programme is supplemented by ongoing training and development programmes.

In addition to the Mandatory Accreditation Programme (MAP) to all the newly appointed Directors, the Board shall evaluate and determine the continuous training needs of its members from time to time in order to enhance his/her contribution to the Board and to effectively discharge his/her duties as a Board member.

MMLR of Bursa Securities mandates a statement by the Board containing a brief description on the type of trainings directors have attended for the financial year. Where any of the Directors have not attended any training during the financial year, the reasons thereof for each Director must be stated.

The Company Secretary facilitates the organisation of internal and external training programmes for Directors and keeps a complete record of the training attended by the Directors.

All Directors shall ensure that they keep abreast of regulatory changes, other developments and broad business trends. Directors may request that training programmes on specific subjects be arranged in order to facilitate them in discharging their duties effectively.

8. Company Secretary

The Board should ensure it is supported by a suitably qualified and competent Company Secretary.

The Company Secretary plays an important advisory role and as a central source of information and advice to the Board and Board Committees on issues relating to corporate compliance with the relevant laws, rules, regulations and procedures affecting the Board and the Group, as well as best practices of governance.

The Board members have unlimited access to the services of the Company Secretary and is updated with new regulatory, regulations or requirements of current developments in the regulatory framework and governance practice concerning their duties and responsibilities.

The Company Secretary shall be of a senior position with adequate authority and report directly to the Board. The appointment and removal of the Company Secretary will be subjected to the approval of the Board.

The roles and responsibilities of the Company Secretary shall include, but are not limited to the following:-

(i) Advising the Board on its roles and responsibilities;
(ii) Facilitating the orientation of new Directors and assist in Directors’ training and development;
(iii) Advising the Directors on corporate disclosures and compliance with Company and securities regulations and listing requirements including:-

• disclosure of interests in securities;
• disclosure of any conflict of interest in a transaction involving the Group;
• prohibition of dealing in securities; and
• restrictions on disclosure of price-sensitive information.

(iv) Managing processes pertaining to the directors’, Board Committees’ and shareholders’ meeting;
(v) Monitoring corporate governance development and assist the Board in applying governance practices; and
(vi) Serving as a focal point for stakeholders’ communication and engagement on corporate governance issues.

9. PROCESS OF BOARD

9.1 BOARD MEETING

(a) Frequency of Meeting

The Board shall convene at least five (5) meetings in each financial year and at any such times as it deems necessary to fulfil its responsibilities. The Board’s annual meeting calendar is prepared and circulated to Directors before the beginning of each year. It provides the scheduled dates for meetings of the Board and Board Committees, annual general meeting, as well as the closed period for dealings in securities by Directors based on the targeted date of announcement of quarterly results of the Group.

(b) Notice and Agenda of Meeting

Unless otherwise determined by Directors from time to time, at least five (5) clear days’ notice of all Directors’ meeting shall be given to all Directors. Any Director may waive notice of any meeting either prospectively or retrospectively. The Chairman of the meeting and Company Secretary shall undertake the primary responsibility of preparing the meeting’s agenda.

(c) Procedures and conduct of Meeting

The meeting shall normally be conducted face-to-face to enable effective discussion, however can be conducted via telephone conferencing, virtual and hybrid basis or other appropriate means as determined by the Board.

(d) Quorum for Board Meeting

As provided by the Constitution, the quorum shall comprise at least three (3) Directors for the time being of the Company.

(e) Attendance at Board Meeting

The office of a Director shall become vacant if a Director is absent from more than 50% of the total Board Meeting held in a calendar year.

(f) Voting

Any question arising at a Board Meeting is decided by a majority of votes and the Chairman of the meeting has a second casting vote. A Director is required to abstain from deliberation and voting in respect of any contract or proposed contract or arrangement in which he/she has direct or indirect interest.

(g) Conflict of Interest

The Directors shall comply with the Companies Act, 2016 in connection with disclosure of shareholdings and interest in the Group and interest in any contract or proposed contract with the Group, which include the nature, character and extent of any office or possession of any property, whether directly or indirectly duties or interest that might be created in conflict with his/her duty or Interest as a Director of the Company.

(h) Right of Directors to access information and advice

Management provides the Board and Board Committees with information in a form, within acceptable timeframe and quality that enable them to discharge their duties and responsibilities effectively. Directors are entitled to request and received additional information they consider necessary in order to make informed decision, including obtaining professional independent advice at the Group’s expense.

9.2 Committee Meeting

The Board Committees meet as and when the need arises, to deliberate on matters under their purview in accordance with the Terms of Reference of the committee.

9.3 Decision Making

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

Where appropriate, decisions are also taken by way of circular resolutions in between scheduled meetings. Such resolutions are signed by majority of the Directors and valid as if it has been passed at a Board Meeting duly called and constituted as provided in the Constitution.

10. Review of Board Charter

This Board Charter has been approved by the Board and is made available for reference on the Company’s corporate website and internal computer networking system.

It shall be reviewed by the Board and updated whenever necessary to ensure the Group remains at the forefront of best practices in corporate governance. Any subsequent amendments to the Board Charter should be approved by the Board.

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