AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

BOARD CHARTER

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TABLE OF CONTENTS

Pages

1. Introduction 1

2. Objectives 1

3. The Board

3.1 Key Responsibilities 2

3.2 Board Meetings 3

3.3 Board Composition 4

3.4 Independent Directors 4

3.5 Criteria and Skill Sets for Board Membership 6

3.6 Board Appointments and Removals 7

3.7 Re-election 10

3.8 Supply of Information 10

4. Chairman and Chief Executive Officer

4.1 Chairman 11

4.2 Chief Executive Officer 12

5. Board Committees 12

6. Board Evaluations, Development and Succession Plans 13

7. Conflicts of Interest 13

8. Remuneration Policy/System 14

9. Company Secretary 14

10. Responsibilities as a subsidiary 15

11. Corporate Governance Disclosures 15

12. Financial Reporting

12.1 Transparency 16

12.2 Auditors 16

13. Shareholder Communication 16

14. Relationship with Other Stakeholders

14.1 Employees 17

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14.2 Environment 17

14.3 Social Responsibilities 17

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Application 17

Appendices

A. Board Audit Committee

B. Board Risk Management Committee

C. Nomination & Remuneration Committee

D. Board Credit Risk Committee

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AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

BOARD CHARTER

1.0 INTRODUCTION The Directors of Affin Hwang Investment Bank Berhad (“the Bank”) regard corporate

governance as vitally important to the success of the Company’s business and are unreservedly committed to applying the principles necessary to ensure that the following principles of good governance is practised in all of its business dealings in respect of its shareholder(s) and relevant stakeholders:

The Board is the focal point of the Bank’s corporate governance system. It is

ultimately accountable and responsible for the performance and affairs of the Bank.

All Board members are expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.

All Board members are responsible to the Bank for achieving high level of good governance.

The Board Charter shall constitute and form an integral part of each Director’s duties and responsibilities.

2.0 OBJECTIVES The objectives of the Board Charter are to ensure that all Board members acting on

behalf of the Bank are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and that the principles and practices of good corporate governance are applied in all their dealings in respect, and on behalf of, the Bank.

In pursuit of the ideals in the Board Charter, the intention is to exceed “minimum

legal requirements” with due consideration to recognised standards of best practices locally and internationally.

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3.0 THE BOARD 3.1 Key Responsibilities

3.1.1 The Board is charged with leading and guiding the Bank in an

effective and responsible manner. Each director has a legal duty to act in the best interest of the Bank. The directors, collectively and individually, are aware of their responsibilities to shareholder(s) and stakeholders for the manner in which the affairs of the Bank are managed. The Board sets the Bank’s values and standards and ensures that its obligations to its shareholder(s) and stakeholders are understood and met.

3.1.2 The Board understands that the responsibility for good corporate governance rests with them and therefore strives to follow the principles and best practices of corporate governance.

3.1.3 The Bank complies with the various regulatory requirements and guidelines issued by Bank Negara Malaysia (“BNM”), Securities Commission, Bursa Malaysia Securities Berhad and Companies Commission of Malaysia.

3.1.4 Duties of the Board include establishing the corporate vision and mission, as well as the philosophy of the Bank, setting aims of Management and monitoring the performance of Management.

3.1.5 The Board has the overall responsibility for promoting the sustainable growth and financial soundness of the Bank, and for ensuring reasonable standards of fair dealing, without undue influence from any party. This includes a consideration of the long-term implications of the Board’s decisions on the Bank and its customers, officers and the general public. In fulfilling this role, the Board must–

a) approve the risk appetite, business plans and other initiatives which would, singularly or cumulatively, have a material impact on the Bank’s risk profile;

b) oversee the selection, performance, remuneration and succession plans of the CEO, control function heads and other members of senior management, such that the Board is satisfied with the collective competence of senior management to effectively lead the operations of the Bank;

c) oversee the implementation of the Bank’s governance framework and internal control framework, and periodically review whether these remain appropriate in light of material changes to the size, nature and complexity of the Bank’s operations;

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d) promote, together with senior management, a sound corporate culture within the Bank which reinforces ethical, prudent and professional behaviour;

e) promote sustainability through appropriate environmental, social and governance considerations in the Bank’s business strategies

f) oversee and approve the recovery and resolution as well as business continuity plans for the Bank to restore its financial strength, and maintain or preserve critical operations and critical services when it comes under stress; and

g) promote timely and effective communication between the Bank and Bank Negara Malaysia (“BNM”) on matters affecting or that may affect the safety and soundness of the Bank.

3.1.6 The Board is responsible over the Bank’s capital management as follows:-

a) Approving the capital plan as part of budget;

b) Approving significant capital raising and repayment; and

c) Reviewing and note quarterly summarised monitoring reports

on capital adequacy.

3.1.7 The Board reserves full decision-making powers on the following matters:

a) Conflicts of interest issues relating to substantial shareholder

or a director;

b) Material acquisitions and disposition of assets not in the ordinary course of business;

c) Investments in capital projects;

d) Authority levels;

3.2 Board Meetings

3.2.1 A director must devote sufficient time to prepare for and attend Board meetings, and maintain a sound understanding of the business of the Bank as well as relevant market and regulatory developments. This must include a commitment to on-going education.

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3.2.2 A director must attend at least 75% of the Board meetings held in each financial year, and must not appoint another person to attend or participate in a Board meeting on his behalf.

3.2.3 The quorum for Board meetings shall be at least half of the Board members.

3.2.4 The Board must ensure that clear and accurate minutes of Board meetings are maintained to record the decisions of the Board, including the key deliberations, rationale for each decision made, and any significant concerns or dissenting views. The minutes must indicate whether any director abstained from voting or excused himself from deliberating on a particular matter.

3.2.5 The Bank shall provide the Board with access to advice from third party experts on any matter deliberated by the Board as and when required, and the cost of such advice shall be borne by the Bank.

3.2.6 The views of Management are represented at meetings of the Board by the presence of the Chief Executive Officer as well as senior executives when required.

3.3 Board Composition

3.3.1 The Board and the Board committees must be of a size that promotes effective deliberation, encourages the active participation of all directors and allows the work of the various Board committees to be discharged without giving rise to an over-extension of directors that are required to serve on multiple Board committees.

3.3.2 The Board must consist 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.

3.3.3 The Board must not have more than one executive director,

unless BNM approves otherwise in writing.

3.4 Independent Directors

3.4.1 The Board must have a majority of independent directors at all times.

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3.4.2 The Board must determine whether an individual to be appointed as an independent director is independent in character and judgement, and free from associations or circumstances that may impair the exercise of his independent judgement. An individual must not be considered to be an independent director if he or any person linked to him–

(a) has been an executive in the last two (2) years; (b) is a substantial shareholder of the Bank or any of its

affiliates; or (c) has had a *significant business or other contractual

relationship with the Bank or any of its affiliates within the last two (2) years.

* A ‘significant business’ or ‘other contractual relationship’ is when a director,

engage in any transaction, or have been engaged in any transaction within the last two (2) years with the Bank, whether with other persons or through a firm or a company of which he is a partner, director or major shareholder, the value of which exceeds RM1 million. However, “transactions” as stated above shall exclude the following transactions:

o for personal use of the said director; o for personal investment of the said director except

for the purpose of carrying on a trade or business; or

o normal banking transactions other than loans and advances

provided that such transactions are on normal commercial terms.

However, a director will still be deemed independent if the company in which he is also a director, has loans with the Bank, provided he is

i) not a substantial shareholder of the company; or ii) not a guarantor of the loan and iii) not involved in the deliberation and decision-

making process;

3.4.3 The independent directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.

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3.4.4 The independent directors help to ensure that the interest of all shareholder(s), 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.

3.4.5 The views of the independent directors should carry significant weight in the Board’s decision-making process.

3.4.6 In order to ensure the independence of the Board as well as to encourage fresh views and ideas at the Board, the term limit for an independent director is nine (9) years.

3.4.7 An independent director must immediately disclose to the

Board any change in his circumstances that may affect his status as an independent director. In such a case, the Board must review his designation as an independent director and notify BNM in writing of its decision to affirm or change his designation.

3.5 Criteria and Skill Sets for Board Membership

3.5.1 The Board collectively should possess adequate knowledge, skills,

expertise and experience to understand the Company’s business, comply with prevailing requirements and stage of development and goals of the Bank.

3.5.2 To ensure that the Board has the required mix of skills and

experience to discharge its duties, the members of the Board should be from diverse backgrounds, with knowledge and experience in different pertinent disciplines which may include finance, accounting, banking, legal, marketing, business management/administration, information technology, investment management and risk management.

3.5.3 The following are the recommended personal qualities and core

competencies required from a director:- a) Integrity, Commitment and Ethics;

Behaving honestly in all dealings. b) Governance;

The ability to ensure the Bank performance and conformance.

c) Strategic Perspective;

The ability to understand the potential impact on the Company’s trends, opportunities, issues and events, manage priorities, and develop the optimum response consistent with the strategic capabilities of the business.

d) Business Acumen;

The ability to contribute to the Bank to create significant value.

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e) Judgement and Decision Making;

The ability to identify the principal issues and use experience and sound judgement to make appropriate decisions.

f) Teamwork;

The ability to interact with fellow Board directors and senior management as well as participates in the activities of the Board.

g) Communication; and

The ability to express ideas and opinions in a way that ensures the message gets across effectively.

h) Leadership.

The ability to inspire commitment to the Bank’s vision and values.

3.5.4 As a basis, the following “fit and proper” criteria shall be taken into

consideration:- a) his/her probity, diligence, competence and soundness of

judgement; b) his/her reputation, character, integrity (including financial

integrity) and honesty; c) his/her history of office(s) involving fraud/dishonesty/

violence; d) whether he/she has been engaged in deceitful/oppressive/

improper business practices or any practices which would discredit him/her;

e) whether he/she has been engaged/associated/had

conducted himself/herself in a manner which may cast doubt on his/her fitness, competence and soundness of judgement;

f) whether he/she has contravened any provision made by or

under any written law appearing to BNM or other relevant regulatory bodies designed for protecting members of the public against financial loss due to dishonesty, incompetence or malpractice; and

g) whether he/she has been declared a bankrupt.

3.6 Board Appointments and Removals

3.6.1 The appointment of a new director is a matter for consideration and decision by the full Board upon appropriate recommendation from the Nomination & Remuneration Committee (“NRC”).

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3.6.2 New directors are expected to have such expertise so as to qualify them to make positive contribution to the Board performance of its duties and to give sufficient time and attention to the affairs of the Bank.

3.6.3 The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new directors are properly executed.

3.6.4 Upon the appointment of a new director, the Company Secretary advises the director of his/her principal duties and responsibilities and explains the restrictions to which he or she is subject to in relation to price-sensitive information and dealings in the Company’s securities, as well as the requirements of Bursa Malaysia Securities Berhad’s Rules in relation to director’s trading. Thereafter, all directors are provided with appropriate briefings on the Bank’s affairs and up-to-date corporate governance materials published by the relevant bodies.

3.6.5 The Company arranges induction programme for newly appointed directors. The induction programme aims at communicating to the newly appointed directors, the Bank’s vision and mission, its philosophy and nature of business, current issues within the Bank, the corporate strategy and the expectations of the Bank concerning input from directors.

3.6.6 The Bank arranges educational/training programmes to update the Board in relation to new developments pertaining to the laws and regulations and changing commercial risks, which may affect the Board and/or the Bank.

3.6.7 A director must fulfil the following minimum requirements at the time of his appointment and on a continuing basis:-

i) ii)

A director must not be disqualified under section 59(1) of the Financial Services Act 2013. A director must have been assessed by the NRC to have complied with the fit and proper requirements.

iii) A director must not have competing time commitments that impair his ability to discharge his duties effectively. The directorships held by any Board member at any one time shall not exceed five (5) in listed companies.

iv) A director must not be an active politician.

v) Where a firm has been appointed as the external auditor of the Bank, any of its officers directly involved in the engagement and any partner of the firm must not serve or be appointed as a director of the Bank until at least two years after–

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(a) he ceases to be an officer or partner of that firm; or

(b) the firm last served as an auditor of the Bank.

3.6.8 i) Process for Appointment of directors Candidates for the proposed appointment as director/s

are first nominated at the NRC. The NRC assesses the candidate/s qualifications, background and experience. The Chairman of the NRC and/or the Chairman of the Board would also engage directly with the proposed candidate. If suitable, the NRC recommends the proposed appointment of the candidate as director to the Board for approval, subject to BNM’s approval.

ii) Process for Removal of directors Through the annual review of directors, ineffective

directors can be identified. Errant/unsuitable directors can be addressed by NRC at

its quarterly meetings or as and when the NRC becomes aware of such circumstances.

3.6.9 Each director must be assessed against the minimum requirements set out in paragraph 3.6.7 at least annually, and as and when the Board becomes aware of information that may materially compromise the director’s fitness and propriety, or any circumstance that suggests that the director is ineffective, errant or otherwise unsuited to carry out his responsibilities. A director must immediately disclose to the Board any circumstance that may affect his ability to meet the minimum requirements.

3.6.10 The Board must ensure that each director acknowledges the terms of his appointment, which must include– (a) the roles and responsibilities of the director, including

those arising from his membership in any Board committee;

(b) the tenure of the appointment; and (c) provisions for the director’s removal in the event that he

no longer meets the minimum requirements set out in paragraph 3.6.7 or has been assessed to be ineffective, errant or otherwise unsuited to carry out his responsibilities.

3.6.11 Unless the written approval of BNM has been obtained a director whose tenure has expired and is being proposed for reappointment must immediately cease to hold office and act in such capacity, including by participating in Board meetings or holding himself out as a director.

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3.7 Re-Election

3.7.1 All directors are subject to retirement by rotation at the Annual General Meeting of the Bank pursuant to the Constitution of the Bank.

3.7.2 For directors whose term of office as approved by BNM has not

expired at the time of the Annual General Meeting, but are required to retire either by rotation are eligible for re-election, the Bank is not required to obtain approval from BNM to reappoint them at the Annual General Meeting.

3.8 Supply of Information

3.8.1 The Bank aims to provide all directors with timely and quality information and in a form and manner appropriate for them to discharge their duties effectively.

3.8.2 Management is responsible for providing the Board with the required information in an appropriate and timely manner. The Chairman, assisted by the Company Secretary, assesses the type of information required to be provided to the Board. If the information provided by Management is insufficient, the Board will make further enquiries where necessary to which the persons responsible will respond as fully and as promptly as possible.

3.8.3 A full agenda and comprehensive Board papers are circulated to all directors well in advance of each Board meeting.

3.8.4 Amongst others, the Board papers include the following:

a) Periodic/Quarterly financial report;

b) Minutes of meetings of all Committees of the Board;

c) A current review of the operations of the Bank;

d) Reports on related party transactions and recurrent related

party transactions; e) Directors’ share-dealings, including public shareholding

spread; f) Annual Business Plans;

g) Annual Budget; and

h) Notification of Director’s Resolution in Writing.

3.8.5 Full Board minutes of each Board meeting are kept by the Bank

Secretary and are available for inspection by any director during office hours.

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4.0 CHAIRMAN AND CHIEF EXECUTIVE OFFICER The Bank aims to ensure balance of power and authority between the Chairman and

the Chief Executive Officer with a clear division of responsibility between the running of the Board and the Bank’s business respectively. The positions of Chairman and the Chief Executive Officer are separated and clearly defined.

4.1 Chairman

4.1.1 The Chairman of the Board must not be an executive, and must

not have served as a CEO of the Bank in the past five (5) years.

4.1.2 The Chairman is responsible for leadership of the Board in ensuring

the effectiveness of all aspects of its role. The Chairman is responsible for:-

a) leading the Board in setting the values and standards of the

Bank;

b) maintaining a relationship of trust with and between Executive

and Non-Executive directors; c) ensuring the provision of accurate, timely and clear

information to directors; d) ensuring appropriate procedures are in place to govern

the Board’s operation; e) ensuring decisions are taken on a sound and well-

informed basis, including by ensuring that all strategic and critical issues are considered by the Board, and that directors receive the relevant information on a timely basis;

f) encouraging healthy discussion and ensure that dissenting views can be freely expressed and discussed; and

g) leading efforts to address the Board’s developmental needs.

h) ensuring effective communication with shareholder(s) and relevant stakeholders;

4.1.3 The Chairman, in consultation with the Chief Executive Officer and the Company Secretary, sets the agenda for Board meetings and ensures that all relevant issues are on the agenda.

4.1.4 The Chairman is responsible for managing the business of the

Board to ensure that: All directors are properly briefed on issues arising at Board

meetings.

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Sufficient time is allowed for the discussion of complex or contentious issues and, where appropriate, arranging for informal meetings beforehand to enable thorough preparation for Board discussion.

The issues discussed are forward looking and concentrates

on strategy.

4.1.5 The Chairman ensures that every Board resolution is put to vote to ensure the will of the majority prevails.

4.1.6 The Chairman ensures that Management looks beyond their

executive functions and accept their full share of responsibilities on governance.

4.2 Chief Executive Officer

4.2.1 The Chief Executive Officer bears primary responsibility over the

day-to-day management of the Bank. 4.2.2 The Chief Executive Officer is the conduit between the Board and

the Management in ensuring the success of the Bank’s governance and management functions.

4.2.3 The Chief Executive Officer implements the policies, strategies and

decisions adopted by the Board. 4.2.4 All Board authorities conferred on the Management is delegated

through the Chief Executive Officer and this will be considered as the Chief Executive Officer’s authority and accountability as far as the Board is concerned.

5.0 BOARD COMMITTEES The Board has established the following Board Committees with specific

terms of reference: Board Audit Committee (Appendix A)

Nomination & Remuneration Committee (Appendix B)

Board Risk Management Committee (Appendix C)

Board Credit Review Committee (Appendix D)

The Board remains fully accountable for any authority delegated to the Board

committees.

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6.0 BOARD EVALUATIONS, DEVELOPMENT AND SUCCESSION PLANS

6.1 The Board must carry out annual Board evaluations to objectively

assess the performance and effectiveness of the Board, Board committees and individual directors. This is to enable the Board to identify areas for professional development and process improvements, having regard to the changing needs of the Bank.

6.2 The Board must dedicate sufficient resources toward the on-going development of its directors and have in place development plans for directors and regularly updating such plans to ensure that each director possesses the knowledge and skills necessary to fulfil his responsibilities.

6.3 The Board must establish and regularly review succession plans for the Board to promote Board renewal and address any vacancies.

7.0 CONFLICTS OF INTEREST 7.1 The directors must conduct their business with the highest level of

ethical values. Conflict of interest situation call into question the ability of the person involved in the conflict to act objectively in the best interest of the Bank.

7.2 A director is required to declare the nature of his interest in contract, proposed contacts, property, offices etc. with the Bank at a Board meeting as soon as practicable after the relevant facts have come to the director’s knowledge.

7.3 An existing or proposed transaction or arrangement will be considered “material” unless the director or any person linked to him cannot reasonably be expected to derive a benefit or suffer a detriment from the transaction or arrangement in a way that will place the director in a position of conflict.

A director is required to disclose to the Board the nature and extent of his interest in a material transaction or material arrangement. If such material transaction or material arrangement is being deliberated during a Board meeting, the director is to be absent from the meeting during such deliberations.

7.4

An interested director must make the disclosure by way of a written notice to all members of the Board and the Company Secretary–

(i) as soon as practicable after being aware of his interest in the

material transaction or arrangement; and (ii) if the material transaction or arrangement is being deliberated at

a Board meeting, before the commencement of that deliberation.

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7.5 Internal Policies and Procedures are in place to address potential conflicts of interest situations with guidance such as Guidelines on Credit Transactions and Exposure with Connected Parties and Related Party Transaction Policies.

7.6 A personnel from Company Secretarial Office will be responsible for

maintaining updated records on each director’s conflicts of interest.

7.7

Non-compliance will be raised in NRC for appropriate recommendation to Board for deliberation and decision. Non-compliance must be alerted to the Chief Compliance Officer.

8.0 REMUNERATION POLICY/SYSTEM 8.1 The remuneration policy of the Bank must be approved by the Board,

and be subject to periodic Board review, including when material changes are made to the policy.

8.2 The overall remuneration system for the Bank must– (a) be subject to the Board’s active oversight to ensure that the

system operates as intended;

(b) be in line with the business and risk strategies, corporate values and long-term interests of the Bank;

(c) promote prudent risk-taking behaviour and encourage individuals to act in the interests of the Bank as a whole, taking into account the interests of its customers; and

(d) be designed and implemented with input from the control

functions and the Board Risk Management Committee to ensure that risk exposures and risk outcomes are adequately considered.

9.0 COMPANY SECRETARY 9.1 The Board appoints the Company Secretary, who plays an important role,

and ensures that the Company Secretary fulfils the functions for which he/she has been appointed.

9.2 The Company Secretary is responsible for supporting the effective

functioning of the Board. In discharging this role, the Company Secretary provides counsel to the Board on governance matters and facilitates effective information flows between the Board, the Board committees and senior management.

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9.3 The Company Secretary shall keep confidential the affairs of the Bank and its officers at all times. Accordingly, where the Company Secretary also serves as Company Secretary for the Bank’s affiliates, he/she shall not disclose the affairs of the Bank or its officers to the affiliates except with the knowledge and consent of the Bank.

9.4 The Company Secretary must not have competing time commitments

that may impair his/her ability to discharge his duties effectively. Unless BNM approves otherwise in writing, the Company Secretary must devote the whole of his professional time to the affairs of the Bank and its affiliates.

9.5 The appointment and removal of the Company Secretary must be approved by the Board.

9.6 The Board members have unlimited access to the professional advice and services of the Company Secretary.

10.0 RESPONSIBILITIES AS A SUBSIDIARY

The Bank must discharge its own legal and governance responsibilities as a

separate entity, even if it is a subsidiary of another financial institution or of a foreign entity which is subject to prudential regulation. Accordingly, the Board and senior management of the Bank must validate that the objectives, strategies, plans, governance framework and other policies set at the group level are fully consistent with the regulatory obligations and the prudential management of the Bank and ensure that entity-specific risks are adequately addressed in the implementation of group-wide policies.

11.0 CORPORATE GOVERNANCE DISCLOSURES

11.1

The Bank must disclose the following information on its corporate governance policies and practices: - a) Composition

b) Function and conduct c) Overview of Internal control framework d) Qualitative and quantitative disclosures of remuneration

11.2 The Board must ensure that the corporate governance disclosures are accurate, clear and presented in a manner that is easily understood by its shareholders, customers and other relevant stakeholders.

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12.0 FINANCIAL REPORTING 12.1 Transparency

12.1.1 The Bank aims to present a clear and balanced assessment of

the Bank’s financial position and future prospects that extend to the interim and price-sensitive information and other relevant reports submitted to regulators.

12.1.2 The directors ensure that the financial statements are prepared

so as to give a true and fair view of the current financial status of the Bank in accordance with the approved accounting standards.

12.1.3 The Auditors’ Report shall contain a statement from the Auditors

explaining their responsibility in forming an independent opinion, based on their audit of the financial statements.

12.2 Auditors

12.2.1 The Board has a formal and transparent arrangement for

considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the Auditors through its Board Audit Committee.

12.2.2 The Board Audit Committee also keeps under review the scope

and results of the audit and its cost effectiveness and the independence and objectivity of the Auditors. The Bank ensures that the Auditors do not supply a substantial volume of non-audit services to the Bank.

12.2.3 Appointment of the Auditors is subject to approval of the

shareholder(s) at general meetings. The Auditors have to retire during the Annual General Meeting every year and be re-appointed by shareholder(s) for the ensuing year.

13.0 SHAREHOLDER COMMUNICATION 13.1 The Board acknowledges the need for shareholder(s) to be informed of all

material business matters affecting the Bank and as such adopts an open and transparent policy in respect of its relationship with its shareholder(s) and investors.

13.2 The Board ensures the timely release of financial results on a quarterly

basis to provide shareholder(s) with an overview of the Bank’s performance and operations.

13.3 The Bank’s website provides easy access to corporate information

pertaining to the Bank and its activities and is continuously updated.

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14.0 RELATIONSHIP WITH OTHER STAKEHOLDERS In the course of pursuing the vision and mission of the Bank, the Board recognises

that no Bank can exist by maximising shareholder(s) value alone. In this regard, the needs and interests of other stakeholders are also taken into consideration.

14.1 Employees

14.1.1 The Board acknowledges that the employees are invaluable

assets of the Bank and play a vital role in achieving the vision and mission of the Bank.

14.1.2 The Bank adopts comprehensive and documented policies and

procedures with respect to the following: a) Occupational safety and health with the objective of

providing a safe and healthy working environment for all employees; and

b) Industrial relations with the objective of managing

employees’ welfare and well-being in the work place.

14.2 Environment

14.2.1 The Board acknowledges the need to safeguard and minimise

the impact to the environment in the course of achieving the Company’s vision and mission.

14.2.2 The Bank supports initiatives on environmental issues.

14.3 Social Responsibilities

14.3.1 The Board acknowledges that the Bank should play a vital role in

contributing towards the welfare of the community in which it operates.

14.3.2 The Bank supports charitable causes and initiatives on

community development projects.

15.0 APPLICATION 15.1 The principles set out in this Board Charter are:

a) kept under review and updated as practices on Corporate Governance

develop and further guidelines on Corporate Governance are issued by the relevant regulatory authorities;

b) applied in practice having regard to their spirit and general principles

rather than to the latter alone; and

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c) summarised in the Annual Report/audited financial statements as part of a narrative statement by the Directors on Corporate Governance.

15.2 The Board endeavours to comply at all times with the principles and

practices set out in this Board Charter.

16.0

In this Board Charter, any reference to any provision of legislations, guidelines, circulars or directives shall include all amendments, modifications, consolidations or replacements as may be issued from time to time.

Appendix A

BOARD AUDIT COMMITTEE CHARTER

Board Audit Committee (BAC) has been established in compliance with Bank Negara requirements

and code on Corporate Governance.

The Chief Internal Auditor (CIA) who is designated and responsible for the performance of Internal

Audit Department (IA) and audit of Affin Hwang Capital (AHC)/ subsidiaries entities is subjected to

the Group Internal Audit Charter. The CIA must keep Group CIA (GCIA) informed on matters relating

to the exercise of its authority and performance of its function in the course of carrying out his/her

professional conduct.

The composition, quorum and meeting procedure, duties and responsibilities of the BAC are as

follows:-

COMPOSITION

The Board shall elect and appoint BAC members from amongst them.

The BAC shall comprise of at least three members.

Majority of the members should be independent non-executive directors.

The members shall elect a Chairman among them who is an independent non-executive director.

Alternate directors are not allowed to be appointed as members of the BAC.

If an BAC member resigns, retires or for any reason ceases to be member, the Board shall within

three (3) months of the event appoint a new member.

QUORUM AND MEETING PROCEDURES

Meeting shall be conducted at least four (4) times annually.

Quorum: Any two (2) directors, and the chairman must be an independent director.

DUTIES AND RESPONSIBILTIES

The primary goal of the BAC is to review the financial condition of the auditable entities, its internal

controls, performance and findings of the internal and external auditors, and to recommend appropriate

remedial action.

The primary responsibilities of the BAC are as follows:-

a) Ensure that the accounts are prepared in a timely, fair, transparent and in an accurate

manner/reliable with frequent reviews of the adequacy of provisions against contingencies and

impaired loans. Review the balance sheet and profit and loss account for submission for the Board

of Directors and ensure the prompt publication of annual accounts.

b) Ensure that prior to publication of the annual report, a complete review is done to comply with the

regulatory listing requirements.

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c) Review the effectiveness of internal audit function, the internal controls and risk management

processes including the scope of the internal audit, audit programme, functions and resources of the

internal audit and that it has the necessary authority to carry out its work, the internal audit findings,

and recommend action to be taken by management. The reports of internal auditors and the BAC

should not be subject to the clearance of the Board of Directors. The effectiveness and performance

of internal audit function are assessed against its achievement, benchmarking against best practices

or other considerations.

d) Oversee the effectiveness of Internal Audit Function :

Appoint GCIA, evaluate performance including her transfer and dismissal if warranted.

Ensure oversight on the adequacy of resources and remuneration of internal auditors.

Review and approve the audit scope, procedures and frequency.

Review key audit reports and ensure that senior management is taking necessary corrective

actions in a timely manner to address control weaknesses, non-compliance with laws,

regulatory requirements, policies and other problems identified by Internal Audit and other

control functions.

Noting significant disagreements between the Chief Internal Auditor and the rest of the

senior management team, irrespective of whether these have been resolved, in order to

identify any impact the disagreements may have on the audit process or findings.

Establish a mechanism to assess the performance and effectiveness of Internal Audit

function.

e) External Auditors

Select and recommend external auditors for appointment by the Board each year. Review with

the external auditors, the scope of their plan, the system of internal accounting controls, the

audit reports, the assistance given by the management and its staff to the auditors and any

findings and action to be taken.

Assessment on the long relationship and risk of familiarity threats.

Review the audit fees of external auditors.

Recommend removal of external auditors.

Monitoring and assessing the independence of external auditor including approving the

provision of non-audit services by external auditor.

Have direct communication channels with external auditor and meet them without the presence

of management at least annually.

Maintain regular, timely, open and honest communication with the external auditor and

requiring the external auditor to report to BAC on significant matters.

f) Review the year end financial statements before submission to the Board, focusing on:

going concern assumption.

compliance with accounting standards and other legal and regulatory requirements.

any changes in accounting policies and practices.

significant adjustments, issues and unusual events arising from the audit.

major judgemental areas.

g) Ensure and senior management act upon findings and recommendations timely on the interim and

final external audit. In this regard, also discuss on any other matter s in the absence of management,

where necessary.

h) Review the external auditors’ management letter and management’s response.

- 3 -

i) Monitor related party transactions and conflict of interest situation that may arise within the Bank

including any transactions, procedure or course of conduct that raises questions on management

integrity. Escalate to board of such transactions.

j) Review the accuracy and adequacy of the Chairman’s statement in the directors’ report, corporate

governance disclosures, interim financial reports and preliminary announcements in relation to the

preparation of financial statements.

k) Appoint another independent party with knowledge of Internal Audit to conduct review on

effectiveness of GIA’s function, if necessary. It can either be peers from within the Bank or an

external party.

l) Approve the engagement and appointment of external experts where Internal Audit lacks the

expertise and experiences.

BAC will review and ensure that such engagement includes these terms :-

Assignments, Roles and Responsibilities.

Bank or Financial Institution including regulators or external auditors has the right to audit/

access their records, audit plan, and working papers and etc.

Commitment from external experts that adequate resources will be assigned.

Authority to vary on changes of terms of engagement.

Assurance that independence and objectivity of the audit is not compromised if the Bank’s

external auditors is engaged.

The regulatory requirements on outsourcing are to be complied with.

m) Review and monitor compliance with the Board’s conflicts of interest policy, focusing on:

Identification of circumstances which constitute or may give rise to conflicts of interest.

Clear processes for directors to keep the Board informed on changes in circumstances which

may give rise to a conflict of interest.

Maintenance of records on each director’s conflict of interest.

Addressing any non-compliances with the policy.

n) Review of third-party opinions on the design and effectiveness of the Bank’s internal control

framework.

o) Islamic Operations – sought advice from Shariah Advisory on Shariah related matters to ensure

compliance with Shariah principles.

ACCESS TO STAFF AND EXPERT ADVICE

BAC may call on any staff of all the auditable entities (AHIB, AHAM and AIIMAN) for explanation

and to engage consultants for advice.

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RIGHTS OF THE BAC

The BAC shall in accordance with the procedure to be determined by the Board of Directors,

(a) have authority to investigate any matter within its terms of reference;

(b) have the resources which are required to perform its duties;

(c) have full and unrestricted access to any information/documents pertaining to AHC;

(d) have direct communication channels with the Shariah Advisory, external auditors and persons

carrying out the internal audit function or activity;

(e) be able to obtain independent professional or other advice, and

(f) be able to convene meetings with the Shariah Advisory, external auditors, wherever deemed

necessary.

Appendix B

AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

TERMS OF REFERENCE OF

NOMINATION & REMUNERATION COMMITTEE

1

AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

TERMS OF REFERENCE OF THE NOMINATION & REMUNERATION COMMITTEE (“NRC”)

1. OBJECTIVES

The NRC shall support the Board in carrying out its functions in respect of the following:-

a) appointments and removals of the Board, senior management and Company

Secretary.

b) composition of the Board.

c) performance evaluation and development of the Board, senior management and Company Secretary.

d) fit and proper assessments of the Board, senior management and Company Secretary.

e) actively overseeing the design and operation of the Bank’s remuneration system.

f) periodically review the remuneration of directors on the Board, particularly on

whether remuneration remains appropriate to each director’s contribution, taking into account the level of expertise, commitment and responsibilities undertaken.

2. MEMBERSHIP

a) The NRC shall comprise at least three (3) directors, of which all must be non-executive directors. The majority of the members must be independent directors.

b) The Chairman of the NRC shall be an independent non-executive director.

3. FREQUENCY OF MEETINGS

The NRC shall meet on a quarterly basis. The NRC shall also meet at such other times, as the Chairman of the NRC shall require.

4. NOTICE OF MEETINGS a) Meetings of the NRC shall be requisited by the Chairman of the NRC, or by

request of the Board.

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b) Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with the agenda items to be discussed, shall be forwarded to each member of the NRC, and any other person required to attend, not less than three (3) working days prior to the date of the meeting.

5. ATTENDANCE AT MEETINGS

The NRC shall have the power to request the CEO to attend its meetings. Other persons, such as the Group Chief Human Resource Officer, may also be called upon by the Chairman of the NRC to attend.

6. COMPANY SECRETARY

The Company Secretary shall be the Secretary to the meeting.

7. PROCEEDINGS OF MEETINGS

The quorum necessary for the transaction of business shall be two (2). A duly convened meeting of the NRC at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretion vested or exercisable by the NRC.

8. MINUTES OF MEETINGS

a) The Company Secretary shall minute the proceedings and resolutions of the NRC meetings, including the names of those present and in attendance.

b) Minutes of the NRC shall be tabled to the Board.

9. AUTHORITY

a) The NRC is authorised by the Board to obtain, in connection with its duties, and at the Bank’s expense, any outside legal or independent professional advice it considers to be necessary, including the advice of independent remuneration consultants, to secure the attendance of external advisers at its meetings if it considers necessary, and to obtain reliable up-to-date information about remuneration in other companies.

b) The NRC shall have full authority to commission any reports or surveys, which

it deems necessary to help it fulfil its obligations.

10. DUTIES AND RESPONSIBILITIES

The NRC shall: i) Assess at the time of the appointment of director and on a continuing basis that

all directors fulfil the following minimum requirements:- a) are not be disqualified under section 59(1) of the FSA;

3

b) complied with the fit and proper requirements;

c) must not have competing time commitments that impair his ability to discharge his duties effectively;

d) are not an active politician; and

e) where a firm has been appointed as the external auditor of the Bank, any of its officers directly involved in the engagement and any partner of the firm must not serve or be appointed as a director of the Bank until at least two years after– ● he ceases to be an officer or partner of that firm; or ● the firm last served as an auditor of the Bank.

ii) Recommend and assess the nominees to fill Board vacancies as and when they arise (including assessing directors for re-appointment before an application for approval is submitted to Bank Negara Malaysia), Board committee members as well as nominees for CEO. The actual decision as to who shall be nominated shall be the responsibility of the full Board.

iii) Ensure the appropriate size and skill sets that promotes effective deliberation,

encourages the active participation of all directors and allows the work to be discharged without giving rise to an over-extension of directors that are required to serve on multiple Board committees.

iv) Oversee the overall composition of the Board, in terms of the appropriate size and skills and the balance between executive directors, non-executive directors, independent directors and common directors through an annual review and make recommendations to the Board with regard to any changes.

v) Undertake annual Board evaluations to objectively assess the performance

and effectiveness of the Board, Board committees and individual directors. This is to enable the Board to identify areas for professional development and process improvements, having regard to the changing needs of the Bank.

vi) Establish and regularly review succession plans for the Board to promote Board renewal and address any vacancies.

vii) Be responsible in ensuring that all directors receive an appropriate continuous training programme in order for the directors to keep abreast with the latest developments in the industry and to ensure that each director possesses the knowledge and skills necessary to fulfil his responsibilities.

viii) Make recommendations to the Board concerning the re-election by

shareholders of any directors.

4

ix) Assess at the time of the appointment of the CEO and senior management and on an annual basis that the CEO and senior management fulfil the minimum requirements as set out below and as and when the Board becomes aware of information that may materially compromise the individual’s fitness and propriety, or any circumstance that suggests that the individual is ineffective, errant or otherwise unsuited to carry out his responsibilities:-

a) are not disqualified under Section 59(1) of Financial Services Act 2013;

b) complied with the fit and proper requirements;

c) are not a substantial shareholder of the Bank; and

d) additionally the CEO must devote the whole of his professional time to the service of the Bank unless the Bank approves otherwise in writing.

x) Oversee the selection, performance, remuneration and succession plans of the

CEO and other senior management. xi) Assess and recommend the remuneration for each director, senior

management and other material risk takers on an annual basis.

Appendix C

COMPANY SECRETARIAL OFFICE CSO / 2017 / FEB

TERMS OF REFERENCE OF

BOARD RISK MANAGEMENT COMMITTEE

Version 2.0

COPYRIGHT NOTICE Copyright ©

All rights reserved. This document is the property of AFFIN HWANG INVESTMENT BANK BERHAD. This document and its contents are confidential. No part of this document shall be reproduced, published in any form by any means, electronic or mechanical, including photocopy or any information storage or retrieval system. Neither shall this document nor any part of its contents be disclosed to third parties without the expressed written authorisation of AFFIN HWANG INVESTMENT BANK BERHAD.

For Internal Use Terms of Reference of Board Risk Management Committee (Version 2.0)

IV

TABLE OF CONTENTS

1.0 OVERVIEW ................................................................................................................ 1

2.0 COMPOSITION OF THE BRMC ................................................................................ 1

3.0 QUORUM OF THE BRMC ......................................................................................... 1

4.0 FREQUENCY OF BRMC MEETING .......................................................................... 1

5.0 SCOPE OF ROLES & RESPONSIBILITIES OF BRMC ............................................. 2

6.0 MINUTES OF BRMC MEETING................................................................................. 3

7.0 REVISIONS OF THE TERMS OF REFERENCE OF BRMC ...................................... 3

For Internal Use Terms of Reference of Board Risk Management Committee (Version 2.0)

Page 1 of 3

1.0 OVERVIEW 1.1 The Board Risk Management Committee (“BRMC”) is established to ensure that

the risk management framework, policies, infrastructure and controls ( including

procedures and processes) adequately protect Affin Hwang Investment Bank

Berhad (“the Bank”) against all risks, comprising but not limited to, credit risks,

market and liquidity risks, operational risks (which include legal risk and

regulatory risk), cyber risk, reputational risk and human resource risk.

1.2 Whilst BRMC represents a committee to assess the adequacy of risk

management framework, policies, infrastructure and controls (including

procedures and processes), it is not a duplicate of the Board Audit Committee

(“BAC”). Hence, the composition of BRMC shall not mirror that of BAC, although

the BRMC shall be chaired by an Independent Director. With the segregation of

functions, BRMC shall constitute an auditable area by the BAC.

2.0 COMPOSITION OF THE BRMC

2.1 The BRMC shall consist of not less than three (“3”) members comprising only

Non-Executive Directors, of which the majority of members shall be Independent

Directors. The BRMC shall be chaired by an Independent Director.

2.2 The Chief Executive Officer (“CEO”) or in his/her absence, any person so

authorised by the CEO, and Chief Risk Officer (“CRO”) or in his/her absence, any

person so authorised by the CRO, shall be in attendance at the BRMC meetings,

with the Company Secretary acting as the Secretariat.

3.0 QUORUM OF THE BRMC

3.1 Two (“2”) members present shall constitute a quorum.

4.0 FREQUENCY OF BRMC MEETING

4.1 The BRMC shall meet at least once every quarter to execute its responsibilities

and tasks.

For Internal Use Terms of Reference of Board Risk Management Committee (Version 2.0)

Page 2 of 3

5.0 SCOPE OF ROLES & RESPONSIBILITIES OF BRMC 5.1 Deliberate / review on proposals pertaining to risk management strategies, risk

tolerance, risk frameworks, policies and guidelines, and recommend to the Board

of Directors (“the Board”) for approval.

5.2 The BRMC shall not be an approving authority except for matters specified in the

BRMC’s Terms of Reference and where delegated in the Authority Manual (Part

I) approved by the Board.

5.3 Ensure that adequate and robust risk management frameworks, policies,

guidelines, infrastructure and controls (including procedures and processes)

are in place in identifying, measuring, monitoring and managing all relevant risks

relating to the Bank’s business activities.

5.4 Responsible for overseeing and evaluating risk management frameworks,

policies, guidelines, infrastructure and controls (including procedures and

processes) in respect of credit risks, market and liquidity risks, operational risks,

including anti-money laundering and counter financing of terrorism (“AML/CFT”)

risks.

5.5 Oversee and review periodic reports in respect of the Bank’s exposures

to all relevant risks across the Bank’s business activities , risk

management activities and compliance-related matters.

5.6 Oversee the Bank’s capital management to ensure its effectiveness, which

include:

(a) Review capital management standards, policies and guidelines, capital plan

and summary capital adequacy and allocation reports; and

(b) Approve the mandate of the Asset & Liability Committee (“ALCO”) to

manage the Bank’s capital.

For Internal Use Terms of Reference of Board Risk Management Committee (Version 2.0)

Page 3 of 3

5.0 SCOPE OF ROLES & RESPONSIBILITIES OF BRMC (CONT’D)

5.7 Where applicable, assist the Board in the implementation of a sound remuneration

system, by providing feedback where appropriate, with regards to the Bank’s

remuneration system taking into consideration whether the Bank’s remuneration

system is aligned to the risk-taking activities in terms of risk appetite, capital,

liquidity and likelihood and timing of earnings, without prejudice to the tasks of the

Nomination and Remuneration Committee.

5.8 Ensure that adequate AML/CFT frameworks and policies and are in place in the

Bank to protect the Bank against the risks of money laundering and terrorism

financing.

5.9 Evaluate and make recommendations to the Board on risk management

issues, the level of risk exposure and appropriate risk mitigates in relation to

credit transactions and exposures with connected parties, on a quarterly basis.

5.10 Review and concur on proposals pertaining to the introduction of new and / or

variation products and / or services for the Board’s approval.

6.0 MINUTES OF BRMC MEETING 6.1 Minutes of the BRMC shall be submitted to the Board for notification.

7.0 REVISIONS OF THE TERMS OF REFERENCE OF BRMC 7.1 Any revisions to the terms of reference of the BRMC shall be approved by the

Board.

Appendix D

AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

TERMS OF REFERENCE OF

BOARD CREDIT REVIEW COMMITTEE

1

AFFIN HWANG INVESTMENT BANK BERHAD (14389-U) (Incorporated in Malaysia)

TERMS OF REFERENCE OF BOARD CREDIT REVIEW COMMITTEE (“BCRC”) The BCRC is established to assist the Board in respect of matters relating to credit risk in the Bank’s business operations. Based on the Credit Authority Matrix approved by the board, the BCRC shall review credit / underwriting proposals which have been approved by the Group Management Loan Committee (“GMLC”). The BCRC shall operate in accordance with the powers and authority delegated to it by the Board as follows:

To consider whether to reject a credit / underwriting proposal, impose additional terms or modify the terms approved by the GMLC thereof;

To consider and if deemed fit, to approve any request to grant waivers and exemptions from complying with the Bank’s Credit Risk Policy, Discretionary Authorities and related policies and operations manuals; and

Generally to ensure that the GMLC has discharged its responsibilities in a proper manner.

Non-Veto Proposals shall be submitted to the BCRC for notification. Composition of the BCRC The BCRC shall comprise of not less than three (3) members, all of whom shall be Non-Executive Directors and at least one (1) of whom shall be an Independent Director. In the absence of the Chairman, the BCRC members present may choose one of their numbers to chair the meeting. The Chief Executive Officer (“CEO”) or in his/her absence, any person so authorised by the CEO shall be in attendance at the BCRC meetings, with the Company Secretary acting as the Secretariat. Quorum of BCRC meeting Two (2) members present shall constitute a quorum. Proceedings of BCRC The BCRC shall meet on a monthly basis in accordance with a schedule prepared by the Secretariat. The BCRC members may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit.

2

A BCRC member may at any time and the Secretariat shall on the requisition of the member summon a meeting of the BCRC. Minutes Minutes of the BCRC shall be submitted to the Board for notification.