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. Each Director has a legal duty to act in the best interest of the Company and Sunway REIT. The Directors, collectively and individually, are aware of their responsibilities to shareholders, 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 and strategic plans for the Company and Sunway REIT with a view to maximising unitholders’ value;
    b) 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 properties to evaluate whether they are properly managed to achieve its targeted returns;
    f) identifying 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; and
    l) overseeing the development and implementation of the investor relations programme or unitholder communications policy for 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.
    3.2.2 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 Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
    3.2.4 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.
    3.2.5 The views of the Independent Directors should carry significant weight in the Board's decision-making process.
    3.2.6 The Directors shall elect a Chairman among themselves who shall be a Non-Executive Director.
    3.2.7

    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.
    3.2.8 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.
    3.2.9 The Board shall review the composition and size of the Board and Board Committees from time to time to ensure its effectiveness.
    3.3 Appointments
    3.3.1 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.
    3.3.2 All new nominations received are assessed and approved by the entire Board in line with its policy of ensuring nominees are persons of sufficient calibre and experience.
    3.3.3 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.
    3.3.4 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.

    The Chairman Shall Also Notify The Board If He/She Has Any New Directorship Or Significant Commitments Outside The Company.
    3.3.5 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.
    3.3.6 The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
    3.4 Director’s Training
    3.4.1 In addition to the Mandatory Accredited Programme (MAP) as required by Bursa Malaysia Securities Berhad (“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.
    3.4.2 The Board is also constantly updated by the Company Secretary on changes to the relevant guidelines on the regulatory and statutory requirements.
    3.5 Re-election
    3.5.1 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 Board Meetings and Supply of Information
    3.6.1 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 of Sunway REIT (“Trustee”) or any other issues requiring the immediate attention of the Board.
    3.6.2 Members of the Management who are not Directors may be invited to attend and speak at meetings relating to their sphere of responsibility.
    3.6.3 Notices and agenda of meetings duly endorsed by the Chairman together with the relevant board papers are normally given at least one (1) week prior to the meetings for the Board to study and evaluate the matters to be discussed.
    3.6.4 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.
    3.7 Independence of Independent Directors
      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.

    The Board, through the Nomination and Remuneration Committee, shall re-assess the independence mindset of Independent Directors who have served the Board beyond 9 years in order to affirm that the concerned Independent Directors continued to act objectively and independently.
    3.8 Directors’ Assessment
      The Board undertakes an annual assessment of its performance including its performance against the requirements of its charter, the performance of individual Committees and the performance of individual Directors.

    A separate performance assessment for each individual director, taking into consideration their competencies, qualification, character, commitment, integrity, experience, contribution, performance and time expended in meeting the needs of the Company and Sunway REIT, shall be undertaken annually by the Nomination and Remuneration Committee.

    The assessments and evaluations carried out by the Nomination and Remuneration Committee shall be properly documented, summarised and reported to the Board.
    3.9 Directors’ Disclosure
      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.

    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 and in connection with the disclosure, 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.

    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.