This Board Charter sets out the role, functions, composition, operation and processes of the Board by adopting the principles of good corporate governance and practice. In addition, it also assists the Board in the assessment of its own performance and its individual Directors.

This Board Charter is not an “all inclusive” document and should be read as a broad expression of principles. The Board Charter will be reviewed on a periodic basis and may be amended by the Board from time to time.

3.1. Board Membership

3.1.1 Composition

The Board shall comprise a balance of executive and non-executive directors with at least one (1) woman director, who are experienced and competent and have the time to effectively discharge their role as director of the Company.

The Constitution of the Company provides for a minimum of two (2) directors and a maximum of eleven (11) directors. Nonetheless, at least one third of the members should be independent directors. The Independent Directors provide independent judgment, experience and objectivity without subordinated to operational considerations.

They help to ensure that the interests of all shareholders are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.

The composition and size of the Board are reviewed from time to time to ensure its appropriateness.

3.1.2 Diversity

The Board recognises the value of appointing individual directors who bring a variety of diverse opinions, perspectives, skills, experiences, backgrounds and orientations to its discussions and its decision-making processes. It believes that debate at Board meetings will be more open, balanced and wide ranging if a significant degree of diversity can be achieved amongst its members. Healthy discussions involving a wide range of views will, we believe, ultimately bring about better board decisions.

All appointments to the Board will be made on merit while taking into account suitability for the role, board balance and composition, the required mix of skills, background and experience (including consideration of diversity). Other relevant matters will also be taken into account, such as independence and the ability to fulfil required time commitments in the case of non-executive directors.

The Board recognises the challenges in achieving the right balance of diversity on the Board. This will be done overtime, taking into account the present size of the Board, the valuable knowledge and experience of the present Board members and the evolving challenges to the Company over time.

3.1.3 Appointments and Re-election

The appointment of a new Director is a matter for consideration and decision by the full Board, upon the recommendation from the Nominating Committee (“NC”).

In making these recommendations, the NC will consider the required mix of skills, experience and diversity, including gender and also the Fit and Proper Policy, where appropriate, which the Director brings to the Board.

The Constitution of the Company provides that every newly appointed Director be subjected to re-election at the immediate Annual General Meeting (“AGM”). Further, one third (1/3) of the Board shallretire from office and be eligible for re-election at every AGM, and all the Directors shall submit themselves for re-election at least every three (3) years.

3.1.4 New Directorship

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. Any Director shall notify the Chairman before accepting any new directorship and the notification shall include the indication of time that will be spent on the new appointment.

3.2 Board Role

3.2.1 Duties and Responsibilities

The Board assumes, amongst others, the following duties and responsibilities: –

1. review and adopt the overall strategic plans and programmes for the Company and Group;
2. ensure the Group’s core values, vision and mission and shareholders’ interests are met;
3. establish such committees, policies and procedures to effectively discharge the Board’s roles and responsibilities;
4. ensure the Company has appropriate corporate governance structures in place including standards of ethical behaviour and promoting a culture of corporate responsibility;
5. promote better investor relations and shareholder communications;
6. review the adequacy and the integrity of the management information and internal controls systems of the Company and Group;
7. identify principal risks and ensure implementation of a proper risk management system to manage such risks; and
8. initiate a Board self-evaluation program and follow-up action to deal with issues arising and arrange for directors to attend courses, seminars and participate in development programs as the Board judges appropriate.

The Board’s role includes, but not limited to the above matters. The Board may choose to delegate some of these responsibilities to one or more of its Board Committees. This delegation of responsibilities will be reflected in the terms of reference of the respective Board Committees.

3.2.2 Matters Reserved for the Board

The following are matters which are specifically reserved for the Board:-

The Board assumes, amongst others, the following duties and responsibilities: –

1. approval of corporate plans and programmes;
2. approval of annual budgets, including major capital commitments;
3. approval of new ventures;
4. approval of material acquisitions and disposals of undertakings and properties, if need be, recommend for shareholders’ approval; and
5. changes to the management and control structure within the Company and its subsidiaries (“Group”), including key policies and delegated authority limits.

3.3 Position Description

3.3.1 The Chairman

The Board ensures that its Chairman is a non-executive member of the Board. The role of the Chairman is to ensure that the Board is functioning effectively and to undertake the following activities:

1. Instilling good corporate governance practices, leadership and effectiveness of the Board.
2. Monitor the workings of the Board, especially the conduct of Board meetings.
3. Ensure that all relevant issues for the effective running of the Company’s business are on the agenda.
4. Ensure that quality information to facilitate decision-making is delivered to Board members on a timely basis.
5. Encourage all Directors to play an active role in Board activities.
6. Chair general meetings of shareholders.

3.3.2 Managing Director

The key responsibilities of the Managing Director are:

1. develop strategic direction of the Company;
2. ensure Board decisions are implemented and Board directions are responded to;
3. provide directions in the implementation of short and long-term business plans;
4. provide strong leadership; i.e. effectively communicating a vision, management philosophy and business strategy to the employees;
5. keep Board fully informed of all important aspects of the Company’s operations and ensure sufficient information is distributed to Board members; and
6. ensure day-to-day business affairs of the Company are effectively managed.

3.3.3 Independence of Director

An independent director must fulfill the provisions and definition of independent director of the Listing Requirements at all times and must declare their independence to the Board annually.

The tenure of an independent director should not exceed a cumulative term of nine years. Upon completion of the nine years, an independent director may continue to serve on the board subject to the director’s re-designation as a non-independent director. In the event the Board retains an independent director, who has served in that capacity for more than nine years, the Board must justify and seek shareholders’ approval.

The responsibilities of an independent director are:

1. provide and enhance the necessary independence and objectivity to the board;
2. ensure effective checks and balances on the board;
3. mitigate any possible conflict of interest in policy-making process and the day-to-day management of the Company;
4. constructively challenge and contribute to the development of business strategy and direction of the Company; and
5. ensure that adequate systems and controls to safeguard the interests of the Company are in place.

3.4 Relationship between the Board and Management

The Board delegates responsibility for the operation and management of the Company business to the Managing Director and the management team.

Management is accountable to the Board and is to fulfill this responsibility through the provision of reports and briefings on a regular basis throughout the year.

Head of the respective division units and relevant management personnel may be invited to attend the Board meetings.

3.5 Board Committees

The Board may from time to time establish Committees as it is considered appropriate to assist in carrying out its duties and responsibilities. The Board delegates certain functions to the following Committees to assist in the execution of its responsibilities:-

1. Audit Committee;
2. Nomination Committee;
3. Remuneration Committee;
4. Risk Management & Sustainability Committee; and
5. Investment Committee.

The Committees shall operate under clearly defined terms of reference. The Committees are authorized by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.

The Chairman of the respective Committees shall report to the Board the outcome of the Committee meetings and such reports or minutes will be included in the Board papers.

3.6 Board Meetings

The Board shall conduct at least four (4) scheduled meetings annually, with additional meetings to be convened as and when necessary.

All Directors will be provided with performance and progress reports on a timely basis prior to the scheduled Board meetings. A full agenda of the meeting and all Board papers, including complicated issues or specific matters, would be distributed in advance to ensure Directors are well informed and have the opportunity to seek additional information, and are able to obtain further clarification from the Company Secretary, should such a need arise. Where necessary, the services of other senior management or external consultants will be arranged to brief and help the Directors to clear any doubt or concern.

3.7 Financial Reporting

In presenting the annual financial statements and quarterly announcements to the shareholders, including other price sensitive public reports and reports submitted to regulators, the Board aims to present a balanced and understandable assessment of the Group’s position and prospects.

The Board ensures that the financial statements is prepared in accordance with the Companies Act and applicable approved accounting reporting standards, so as to give a true and fair view of the state of affairs of the Group and the Company.

3.8 Directors’ Remuneration

The Remuneration Committee of the Company will review the remuneration for the Managing Directors and Senior Management on yearly basis based on the performance of the SDB Group.

In the case of Non-Executive Directors, the level of remuneration reflects the contribution and level of responsibilities undertaken by the particular Non-Executive Director.

The annual fees to be paid to non-executive Directors will be recommended by the Board of the Company and are subject to approval by shareholders through an ordinary resolution.

3.9 Directors’ Training & Continuing Education

In addition to the Mandatory Accreditation Programme as required by the Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Directors shall continue to update their knowledge and enhance theirskills through appropriate continuing education programmes and life-long learning. This will enableDirectors to effectively discharge duties and sustain active participation in the Board deliberations.

While management, Company Secretary, Internal and External Auditors will brief the Board on changes in the legislative, regulatory or industry framework which impact the Company, the Board shall assess the training needs of the Directors from time to time.

3.10 Directors’ Fit & Proper Policy

In assessing whether a person is fit and proper to be appointed/re-elected, the following criteria shall be considered:-

i) Character and Integrity

a) Probity

• is compliant with legal obligations, regulatory requirements and professional standards;
• has not been obstructive, misleading or untruthful in dealings with regulatory bodies or court.

b) Personal Integrity

• has not perpetrated or participated in any business practices which are deceitful, oppressive, improper (whether unlawful or not), or which otherwise reflect discredit on his professional conduct;
• service contract (in the capacity of management or Director) had not been terminated in the past due to concerns on personal integrity;
• has not abused other positions that he has held in a manner that contravenes the principles of good governance.

c) Financial Integrity

• manages personal debts or financial affairs satisfactorily;
• demonstrates ability to fulfil personal financial obligations as and when they fall due.

d) Reputation

• is of good repute in the financial and business community;
• has not been the subject of civil or criminal proceedings or enforcement action, in managing or governing an entity for the past 10 years; and
• has not been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management.

ii) Competency and Experience

a) Qualifications, training and skills

• possess appropriate qualification, training, skills, practical experience and commitment to effectively fulfill the role and responsibilities of the position;
• has a considerable understanding on the workings of a corporation;
• possesses general management skills as well as understanding of corporate governance and sustainability issues;
• keeps knowledge current based on continuous professional development;
• possesses leadership capabilities and a high level of emotional intelligence.

b) Relevant experience and expertise

• possesses relevant experience and expertise with due consideration given to past length of service, nature and size of business, responsibilities held, number of subordinates as well as reporting lines and delegated authorities.

c) Relevant past performance or track record

• had a career of occupying a high-level position in a comparable organization, and was accountable for driving or leading the organization’s governance, business performance or operations.

iii) Time and Commitment

a) Ability to discharge role having regard to other commitments

• is able to devote time as a Board member, having factored other outside obligations including concurrent Board positions held by the Director across listed issuers and non-listed entities (including not-for-profit organisations).

b) Participation and Contribution in the Board or track record

• demonstrates willingness to participate actively in Board activities;
• demonstrates willingness to devote time and effort to understand the businesses and exemplifies readiness to participate in events outside the boardroom;
• manifests passion in vocation of a Director;
• Exhibits ability to articulate views independently, objectively and constructively; and
• exhibits open mindedness to the views of others and ability to make considered judgment after hearing the views of others.

The Board shall place great importance in ensuring the high standards of transparency and accountability in its communication to shareholders, as well as to potential investors, analysts and the public. The shareholders shall be informed of all material matters affecting the Company and Group.

The ways of communication to shareholders and investors, amongst others, are as follows:-

1. timely announcements and disclosures made to the Bursa Malaysia, which include quarterly financial results material contract awarded, changes in the composition of the Group and any other material information that may affect investors’ decision making;
2. press conference which is normally held after each Company’s AGM and/or Extraordinary General Meeting to provide the media an opportunity to receive an update from the Board on the proceedings at the meetings and to address any query or area of interest of the media; and;
3. make available of the summary of the Group’s investor relations activities during the financial year and additional corporate information and/or disclosures of the Group for reference on the website.

The AGM is the principal forum for dialogue with shareholders. The Board also encourages shareholders to participate in the question and answer session at the AGM.

The Directors, collectively or individually, may seek independent professional advice and information in the furtherance of their duties at the Company’s expense, so as to ensure the Directors are able to make independent and informed decisions.

Directors and Key Senior Management are required to take all reasonable steps to avoid actual, potential or perceived conflict of interests with the Company’s interest.

Should there be actual, potential or perceived conflict of interest between a Company and a Director or Key Senior Management, or a person connected with Director or Key Senior Management such as a spouse, other family member, or a related Company, the interested Director or Key Senior Management shall make full disclosure in bona fide and act honestly in the best interest of the Company and shall not participate in deliberations and shall abstain himself from casting his votes in any matter arising there from.

All Directors and Key Senior Management are required to make a declaration by completing the Conflict of Interest or Potential Conflict of Interest Declaration Form every quarter and escalated to the Board of the Company and recorded by the Company Secretary.

In the performance of his/her duties, a director should at all times observe the following codes:

1. Should have a clear understanding of the aims and purpose, capabilities and capacity of the Company;
2. Should devote time and effort to attend meetings and to know what is required of the board and each of its directors, and to discharge those functions;
3. Should ensure at all times that the Company is properly managed and effectively controlled;
4. Should stay abreast of the affairs of the Company and be kept informed of the Company’s compliance with the relevant legislation and contractual requirements;
5. Should insist on being informed on all matters of importance to the Company in order to be effective in corporate management;
6. Should limit his directorship of companies to a number in which he can best devote his time and effectiveness; each director is his own judge of his abilities and how best to manage his time effectively in the Company in which he holds directorship. Directors shall notify the Board Chairman before accepting new directorship and such notification shall include indication of time to be spent on the new appointment;
7. Should have access to the advice and services of the Company Secretary, who is responsible to the board to ensure proper procedures, rules and regulations are complied with;
8. Should have access to consultancy of independent adviser and to seek independent professional advice at the expense of the Company. The director who intends to seek such consultation or advice shall notify the Company Secretary of such request. The Company Secretary shall forward the request to the Board Chairman for approval. Upon obtaining the Board Chairman’s approval, the director shall engage the services of the adviser. All advice and opinions from the advisers shall be reported to the Board of Directors;
9. Should at all times exercise his powers for the purposes they were conferred, for the benefit and prosperity of the Company;
10. Should disclose immediately all contractual interests whether directly or indirectly with the Company;
11. Should neither divert to his own advantage any business opportunity that the Company is pursuing, nor may he use confidential information obtained by reason of his office for his own advantage or that of others;
12. Should at all times act with utmost good faith towards the Company in any transaction and to act honestly and responsibly in the exercise of his powers in discharging his duties; and
13. Should be willing to exercise independent judgment and, if necessary, openly oppose if the vital interest of the Company is at stake;
14. Relationship with Shareholders, Employees, Creditors and Customers:
    1. Should be conscious of the interest of the shareholders, employees, creditors and customers of the company;
    2. Should at all times promote professionalism and improve the competency of management and employees; and
    3. Should ensure adequate safety measures and provide proper protection to workers and employees at the workplace.
15. Social Responsibilities and the Environment:
    1. Committed to conducting its business in a manner that values the environment and helps to ensure the safety and health of its Directors and employees;
    2. Should adopt an objective and positive attitude and give the utmost cooperation for the common good when dealing with government authorities or regulatory bodies;
    3. Should ensure the effective use of natural resources, and improve quality of life by promoting corporate social responsibilities; and/li>
    4. Should be more proactive to the needs of the community and to assist in society-related programmes.

The Board Charter has been updated by the Board in July 2025. Any subsequent amendment to the Charter can only be approved by the Board.

The Board Charter will be periodically reviewed and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s responsibilities.

The Board Charter is made available for reference on the Company’s website at www.sdb.com.my.