BOARD CHARTER

  1. THE BOARD

    3.1 Role
    3.1.1

    The Board is in charge of leading and managing the Company and Sunway REIT in an effective and responsible manner. It is both the legal and fiduciary duties of each Director to act in the best interest of the Company and Sunway REIT. The Directors, collectively and individually, are aware of their responsibilities to the shareholders of the Company, the unitholders of Sunway REIT and stakeholders for the manner in which the affairs of the Company and Sunway REIT are managed. The Board sets the values and standards and ensures that its obligations to its shareholders, unitholders of Sunway REIT and stakeholders are understood and met.
    3.1.2

    The Board meets at least once every quarter to facilitate the discharge of their responsibilities. Members of the Management who are not Directors may be invited to attend and speak at meetings on matters relating to their sphere of responsibility.
    3.1.3

    Duties of the Board include establishing the corporate vision and mission as well as the philosophy of Sunway REIT, providing leadership to the Manager, setting the strategic directions and overseeing the management of Sunway REIT.
    3.1.4

    The main functions and roles of the Board are as follows:

    a)

    setting and adopting the vision, mission, objectives, goals, strategic plans and policies for the Company and Sunway REIT with a view to maximising unitholders’ value whilst taking into account sustainability considerations;
    b)

    integrating considerations of sustainability with emphasis on the aspects of environmental, social and governance (ESG) and ensuring sustainable business growth in order to create sustainable long term value creation for the Company and Sunway REIT;
    c)

    overseeing and evaluating the conduct and performance of Sunway REIT against budgets;
    d)

    monitoring progress of the implementation of the strategies, budgets, plans and policies of the Company and Sunway REIT;
    e)

    overseeing the conduct of Sunway REIT’s assets to evaluate whether they are properly managed to achieve its targeted returns;

    f)

    if dentifying principal risks of the Company and Sunway REIT and ensuring the implementation of appropriate internal control systems to mitigate and manage these risks. The Board through the Risk Management Committee, sets, where appropriate, objectives, performance targets and policies to manage the key risks faced by the Company and Sunway REIT;
    g)

    considering and approving the Management’s recommendations on key issues, including assets acquisitions and divestments, funding options, asset enhancement initiatives, property development activities and significant capital expenditures;
    h)

    reviewing the adequacy and integrity of the internal control systems and management information systems of the Company and Sunway REIT, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;
    i)

    ensuring that proper and effective control systems are in place for compliance with applicable laws and regulations. The Board also sets the disclosure and transparency standards for the Company and Sunway REIT and ensures that its obligations to unitholders of Sunway REIT are understood and met;
    j)

    monitoring and keeping up to date with the changes to regulations, policies, guidelines and accounting policies. The Board is briefed on any changes to current practices at the quarterly Board meetings or circulated board papers;

    k)

    overseeing the Executive Director(s) and Chief Financial Officer’s performance and ensuring a sound succession plan for key positions within the Company, including appointing, training, fixing the compensation of and, where appropriate, replacing senior management;
    l)

    approve and recommend income distribution amounts payable to the unitholders of Sunway REIT to the trustee of Sunway REIT (the “Trustee”);
    m)

    approve and recommend the management fee payable to the Company to the Trustee;
    n)

    approve the remuneration packages of the Executive Director(s) and Chief Financial Officer as well as the appointment of new Director(s), upon the recommendation of the Nomination and Remuneration Committee;
    o)

    overseeing the development and implementation of the investor relations programme or unitholder communications policy for Sunway REIT; and

    ensuring that the sustainability strategies, priorities and targets of Sunway REIT, as well as its performance against these targets, are communicated to the unitholders and stakeholders of Sunway REIT.
    3.2 Composition and Board Balance
    3.2.1

    The Board consists of qualified individuals with diverse experiences, backgrounds and perspectives. The composition and size of the Board is such that it facilitates the making of informed and critical decisions, as well as champions diversity and inclusion.
    3.2.2

    The size of the Board shall be subject to the limit stipulated in the Articles of Association of the Company which provides that unless otherwise determined by a General Meeting, the number of Directors shall be not less than two (2) and not more than nine (9). At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members shall be Independent Directors.

    3.2.3

    The Board comprises at least 30% women directors.
    3.2.4

    The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
    3.2.5

    The Independent Directors help to ensure that the interests of all shareholders, unitholders of Sunway REIT, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.
    3.2.6

    The views of the Independent Directors should carry significant weight in the Board's decision-making process.
    3.2.7

    The Directors shall elect a Chairman among themselves who shall be a Non-Executive Director. The Chairman should not be a member of the Audit Committee or the Nomination and Remuneration Committee.

    3.2.8

    The Board shall appoint a Senior Independent Non-Executive Director who shall:

    a)

    acts as a sounding board to the Chairman, e.g. offer counsel to the Chairman on matters such as board dynamics and concerns of stakeholders;
    b)

    serves as an intermediary for other Directors when necessary, e.g. facilitate confidential discussions with Directors who may have concerns which they believe have not been properly considered by the Board or which they feel may not be appropriate to raise in open forum or with the Chairman directly;
    c)

    acts as point of contact for shareholders, unitholders of Sunway REIT and other stakeholders particularly on concerns which cannot be resolved through the normal channels of the contact with the Chairman and/or Chief Executive Officer (“CEO”); and

    d)

    provides leadership support and advice to the Board in the event that the Board is undergoing a period of stress, e.g. conflict between the Chairman and CEO or the strategy being followed by the Chairman and/or CEO is not supported by the Board.
    3.2.9

    The Board shall ensure that at least one (1) Director fulfils the following requirements of a licensed director (“Licensed Director”) as prescribed by the Licensing Handbook issued by the Securities Commission:

    a)

    possesses a minimum of ten (10) years of relevant experience in the licensed regulated activity of fund management in relation to asset management restricted to REITs (“Regulated Activity”);

    b)

    holds a Capital Markets Services Representative’s Licence for the Regulated Activity; and
    c)

    must be approved by the Securities Commission prior to undertaking his/her function as a licensed director.
    3.2.10

    The Board shall review the composition and size of the Board and Board Committees from time to time to ensure its effectiveness, particularly in terms of its leadership and oversight of sustainability issues.
    3.3 Professionalism
    3.3.1

    Directors shall at all times exercise their powers in accordance with the Companies Act 2016 for a proper purpose and in good faith in the best interest of the Company and Sunway REIT.
    3.3.2

    To ensure the quality and integrity of the Board, Directors must be persons of integrity and character. In addition, Directors are expected to display professional competence as well as ensure that their ability to discharge their duties as Directors of the Company is not affected by other directorships and commitments.
    3.3.3

    Pursuant to the CMSA, the Directors must represent and safeguard the interests of the unitholders of Sunway REIT. To this end, a Director must not:

    a)

    hold office as a director of more than one management company at any one time; and
    b)

    hold office as a member of the investment committee of a REIT operated by another management company.

    3.3.4

    The Board shall at all times act in the best interest of the unitholders of Sunway REIT, and shall endeavour to ensure that that the Company avoid any transaction or situation that would give rise to a conflict of interest between the unitholders of Sunway REIT and the Company (“COI”).

    Where a COI cannot be avoided, the Board must ensure that:

    a)

    priority is accorded to the unitholders of Sunway REIT;
    b)

    appropriate safeguards have been put in place to protect the interests of the unitholders of Sunway REIT and ensure that Sunway REIT is not disadvantaged by the transaction(s) or situation(s) concerned.

    3.3.5

    The Board has established a Code of Conduct and Business Ethics which provides the ethical framework and guidance on the standards of behaviour expected of all Directors and Employees of the Company.

    3.4 Appointments
    3.4.1

    The appointment of a new Director is a matter for consideration and decision by the full Board upon an appropriate recommendation from the Nomination and Remuneration Committee.
    3.4.2

    All new nominations received are assessed and approved by the entire Board shall be based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender; and in line with its policy of ensuring nominees are persons of sufficient calibre and experience. In assessing the suitability of a nominee, the Board shall ensure that the necessary due diligence is undertaken to ensure that the nominee is fit and proper, and suitably qualified to assume the position as a Director.
    3.4.3

    New Directors are expected to have such expertise so as to qualify them to make a positive contribution to the Board performance of its duties and to give sufficient time and attention to the affairs of the Company and Sunway REIT.
    3.4.4

    Directors are required to notify the Chairman of the Board before accepting any new directorship in public listed companies. The notification shall include an indication of time that will be spent on the new appointment. It is the responsibility of each individual Director to ensure that the directorship(s) held in listed issuer(s) at any one time do(es) not exceed the limit prescribed under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

    The Chairman shall also notify the Board if he/she has any new directorship or significant commitments outside the Company.

    3.4.5

    In identifying candidates for appointment of directors, the Board does not solely rely on recommendations from existing Board members, management or shareholders of the Company. The Board utilises independent sources to identify suitably qualified candidates.
    3.4.6

    The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
    3.5 Directors’ Training
    3.5.1

    In addition to the Mandatory Accredited Programme (MAP) as required by Bursa Securities, Board members are also encouraged to attend seminars and training programmes organised by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in laws, regulations and the business environment. The Board will assess the training needs of the Directors and disclose in the Annual Report the trainings attended by the Directors.

    A Licensed Director shall ensure that he/she complies with the requirement of the Continuing Professional Education (“CPE”) by obtaining the required CPE points, in accordance with the format specified by the Securities Commission.

    3.5.2

    The Board is also constantly updated by the Company Secretary on changes to the relevant guidelines on the regulatory and statutory requirements.
    3.6 Re-election
    3.6.1

    The Manager’s Articles of Association provides that one-third (1/3) of the Board is subject to retirement by rotation at each Annual General Meeting. The Directors to retire in each year are those who have been longest in office since their last election or appointment.
    3.6.2

    The re-election of a Director should be contingent upon satisfactory evaluation of the Director’s performance and contribution to the Board.

    3.7 Board Meetings and Supply of Information
    3.7.1

    The Board meets regularly at least once every quarter to discuss and approve the release of the quarterly and annual financial results, review acquisitions or disposals, annual budget, capital expenditure requirements, property reports, investor relations reports, performance of Sunway REIT against the approved budget. When necessary, the Board meets to review and approve asset acquisitions or disposals for recommendation to the Trustee or any other issues requiring the immediate attention of the Board.
    3.7.2

    Members of the Management who are not Directors may be invited to attend and speak at meetings relating to their sphere of responsibility.
    3.7.3

    Notices and agenda of meetings duly endorsed by the Chairman together with the relevant board papers are normally given at least five (5) business days prior to the meetings for the Board to study and evaluate the matters to be discussed.
    3.7.4

    The board papers provided include inter alia, the financial results, business plan and budget, progress report on the properties’ developments, regulatory/statutory updates, minutes of meetings of Board Committees and other operational and financial issues for the Board’s information and/or approval.
    3.8 Independence of Independent Directors
    3.8.1

    The Board, through the Nomination and Remuneration Committee, shall assess the independence of the Independent Directors annually, taking into consideration interests disclosed by the Independent Directors and having regard to the criteria for assessing the independence of Directors under the annual Board Assessment.
    3.8.2

    The tenure of an Independent Director shall not exceed a term limit of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue serving on the Board as a Non-Independent Director.
    3.9 Directors’ Assessment
    3.9.1

    The Board shall ensure that assessments of its performance including its performance against the requirements of its charter, the performance of individual Board Committees and the performance of individual Directors, are carried out annually. The assessments shall include a review of the performance of the Board in addressing the material sustainability risks and opportunities of the Company and Sunway REIT.
    3.9.2

    The performance assessment of individual Directors shall take into consideration their competencies, qualification, character, commitment, integrity, experience, contribution, performance and time expended in meeting the needs of the Company and Sunway REIT.

    3.9.3

    The Board may, upon recommendation from the Nomination and Remuneration Committee, appoint independent professional consultant to carry out the assessments.

    3.9.4

    The Nomination and Remuneration Committee shall ensure that the assessments carried out are properly documented, summarised and reported to the Board.

    3.10 Directors’ Disclosure
    3.10.1

    Directors shall at all times act honestly and use reasonable diligence in the discharge of the duties of his/her office and shall not make use of any information acquired by virtue of his/her position to gain directly or indirectly an improper advantage for himself/herself or for any other person or to cause detriment to the Company and Sunway REIT.
    3.10.2

    Every director shall comply with the provisions of Sections 219 and 221 of the Companies Act 2016 in connection with the disclosure of his/her shareholding/unitholding and interests in the Company and Sunway REIT as well as his/her interest in any contract or proposed contract with the Company and/or Sunway REIT. A director shall be deemed to have an interest in the unit(s) of Sunway REIT in similar circumstances where a person would be deemed to have an interest in a share pursuant to Section 8 of the Companies Act 2016.
    3.10.3

    In connection with the acquisition of shares/units or changes to his/her shareholding/unitholding in the Company or Sunway REIT, each Director shall give notice in writing to the Company by stating his/her name and full particulars of the acquisition of shares/unit(s) or change(s) to his/her shareholding/unitholding (as is relevant), the circumstances by which the change(s) has/have occurred, within seven (7) days of such acquisition or change (as the case may be).

    In connection with the disclosure of interest in any contract or proposed contract with the Company and/or Sunway REIT, every director shall state the fact and the nature, character and extent of any office or possession of any property whereby whether directly or indirectly, duties or interest might be created in conflict with his/her duty or interest as a Director of the Company.
    3.10.4

    Directors shall not vote in respect of any contract or proposed contract or arrangement in which he/she has directly or indirectly a personal material interest, nor shall he/she be counted for the purpose of any resolution regarding the same, in the quorum of the meeting.