DIRECTORS’ FIT AND PROPER POLICY

1.0 PURPOSE

The objective of the Directors’ Fit and Proper Policy (“Policy”) is to guide the Nomination Committee (“NC”) and the Board of Directors (“Board”) of Seremban Engineering Berhad (“SEB” or “the Company”) in their review and assessment of potential candidates for appointment as directors as well as directors who are seeking for re-election in SEB and its subsidiaries (the “SEB Group”).

2.0 APPLICABILTY

2.1 The policy shall be applicable to the group of SEB and its subsidiaries.

2.2 This policy shall be read together with:

• the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”)
• the Malaysia Code on Corporate Governance (“MCCG”) issued by the Securities Commission of Malaysia

3.0 FIT AND PROPER CRITERIA

In determining a person’s competency and capability, the Nomination Committee shall have regard to matters including, but not limited to:

1. Probity, personal integrity and reputation – person must have the personal qualities such as honesty, integrity, diligence, independence of mind and fairness.
2. Financial integrity – person must manage his debts or financial affairs prudently.
3. Competence and capability – person must have the necessary skills, experience, ability and commitment to carry out the role.

3.1 The assessment of Key Responsible Persons in the SEB Group should be assessed based on the following criteria:

a) Character and integrity:

(i) Probilty

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

(ii) Personal integrity

• has not perpetrated or participated in any business practices which are deceitful, oppressive improper (whether unlawful or not), or which otherwise reflect oppressive improper (whether unlawful or not), or which otherwise reflect discredit on his professional conduct;
• service contract (i.e., 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 (i.e., political appointment) to facilitate government relations for the company in a manner that contravenes the principles of good governance.

(iii) Financial integrity

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

(iv) 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;
• has not been substantially involved in the management of a business or company which has failed (including a GN3 or PN17 company), where that failure has been occasioned in part by deficiencies in that management.

b) Experience and competence:

(i) Qualifications, training and skills

• possesses education qualification that is relevant to the skill set that the director is earmarked to bring to bear onto the boardroom (i.e., a match to the board skill set matrix);
• 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.

(ii) 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.

(iii) 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;
• possesses commendable past performance record as gathered from the results of the board effectiveness evaluation.

c) Time and commitment

(i) Ability to discharge role having regard to other commitments

• 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 organizations).

(ii) 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 the vocation of a director;
• exhibits ability to articulate views independently, objectively and constructively;
• exhibits open mindedness to the views of others and ability to make considered judgment after hearing the views of others.

4. EVALUATION OF A CANDIDATE FOR DIRECTORSHIP OR RE-APPOINTMENT OF DIRECTOR

4.1 The NC will evaluate candidates for new appointment as Directors based on the fit and proper criteria as spelt out in 3.0 above before recommending to the Board for approval.
4.2 For re-appointment of Directors, the Directors will be evaluated based on the Board Evaluation Form. The NC has the power not to recommend to the Board the reappointment of retiring Directors who do not meet the policy requirements.
4.3. For new appointments, the candidates are required to complete the Candidate for Directorship profile. The candidates will also be required to complete a self-declaration of fit and proper form and authorise the Company to perform background check, if necessary, which may cover previous employment verification, professional reference checks, education confirmation and/or criminal record and credit checks.
4.4 The information gathered from the assessments shall be for the NC’s strict use for the purpose of the assessment and not for public disclosure.

5. POLICY SUBJECT TO PERIODICAL REVIEW

5.1 The NC is responsible for regular reviews of the Policy and making any recommended changes as and when it deemed fit. The Policy shall be aligned to any legal or regulatory changes and the best practices under the MMLR and MCCG respectively.
5.2 The changes to the terms of the Policy shall be subject to the approval of the Board.

The Directors’ Fit and Proper Policy has been adopted by the Board on 30 Jun 2022.