Rule 15.01A of the ACE Market Listing Requirements (“ACE LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) requires all listed corporations to: –

1. have a fit and proper policy for the appointment and re-election of directors of the listed corporation and its subsidiaries;
2. ensure the policy addresses board quality and integrity and will aid the listed corporation to comply with Rule 2.20A of the ACE LR; and
3. make available the policy on its website.

To ensure that the Board of Directors (“Board”)’s quality and integrity are maintained and up to expectations, the Board and Nominating Committee (“NC”) have adopted this Fit and Proper Person Policy (“this Policy”) to serve as guidance for the appointment and re-election of directors as well as the appointment of key management personnel to carry out their responsibilities with full competence, character, diligence, integrity and judgement.

The main objective of this Policy is to ensure that POWERTECHNIC GROUP BERHAD (“Powertechnic or the “Company”) and its subsidiaries (collectively referred to as the “Group”) are led by persons of integrity, credibility and competency.

This Policy was adopted after taking into consideration of the guidance contained in Bursa Securities Corporate Governance Guide 4^th edition and is to be read together with the Terms of Reference of NC and the Board’s Procedures for Appointment of Directors adopted by the Company.

For the purpose of this Policy, “Key Management Personnel” refer to the persons that are responsible for the management or oversight of the Group, which includes: –

1. Directors;
2. C-level employees such as Chief Executive Officer (“CEO”)/ Managing Director (“MD”), Chief Financial Officer/Group Accountant, Chief Operating Officer/Executive Director (“ED”); and
3. Key Senior Management, by whatever name called and identified by the CEO/ MD, who perform a senior management function whose primary or significant responsibility is for the management and performance of significant activities of the Group.

For the purpose of establishing whether a person is fit and proper to hold a Key Management Personnel position, the Company shall have regard to the person’s: –

(a)      Character and integrity

Person should possess personal qualities such as probity, personal integrity, financial integrity and reputation.

(b)      Experience and competence

Person should have the necessary qualifications, training and skills, possesses relevant experience and expertise and relevant past performance or track record.

(c)      Time and commitment

Person should have the ability and commitment to carry out the role.

In determining whether a person meets the fit and proper requirements, the considerations as set out above and in paragraph 4 below should be assessed individually (according to their relative importance) as well as on a cumulative basis. Failure to meet one indicator may not, on its own, necessarily mean failure to meet the fit and proper criteria. The Group shall consider the specific circumstances surrounding a person’s failure to meet specific indicators, including the lapse of time since the occurrence of events and the significance of the event from the perspective of potential risks posed to the Group. The Company should exercise the assessment objectively in the best interests of the Group and the sound conduct of the Group’s business. In conducting the assessment, the Company should consider whether there have been material changes in the nature or scope of the responsibilities assumed by a director in which higher standards of competence or judgement are required in order to properly perform the duties associated with the said position.

Any person, before being appointed as a Key Management Personnel, must be assessed to have met all the fit and proper criteria and made a declaration as set out in Appendix 1 of this Policy.

4.1       Character and integrity

In assessing a person’s level of probity, integrity and reputation, the Board and NC shall consider criteria which include, but not limited to the following: –

(i)         Probity

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

(ii)        Personal integrity

• has not perpetrated or participated in any business practices which are deceitful, corrupt, oppressive, improper (whether unlawful or not), or which otherwise reflect discredit on his/her professional conduct;
• service contract (i.e. in the capacity of management or director) had not been terminated in the past due to concerns about personal integrity; and
• has not abused his/her positions held in the company or other positions held (e.g. political appointment or public office etc) to facilitate his/her affairs or affairs of the company nor relations with the government on behalf of the company for the company in a manner that contravenes the principles of good governance.

(iii)      Financial integrity

• manages personal debts or financial affairs satisfactorily;
• demonstrates the ability to fulfil personal financial obligations as and when they fall due; and
• is financially healthy, is not an undischarged bankrupt or been a subject of a judgment debt which has not been satisfied in whole or in part and demonstrates the ability to fulfil personal financial obligations as and when they fall due, whether in Malaysia or elsewhere.

(iv)      Reputation

• is of good repute in the society, financial and business community;
• has not been the subject of civil or criminal proceedings, public sanction, penalty 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 or attributed in part to deficiencies in that person’s integrity and management capabilities.

4.2       Experience and competence

In assessing a person’s competence and capability, the Board and NC shall consider criterias which include, but are not limited to the following: –

(i)         Qualifications, training and skills

• possesses adequate education qualification that is relevant to the skill set that the person is earmarked to bring to bear onto the Group (i.e. a match to the Director, C-level employees or senior management personnel’s skill set matrix);
• has a considerable understanding of the workings of a corporation;
• possesses general management skills as well as an understanding of corporate governance and sustainability issues;
• keeps knowledge current based on continuous professional development; and
• 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 for the position

• had a career of occupying a high level position in a comparable organisation, and was accountable for driving or leading the organisation’s governance, business performance or operations; and
• possesses commendable past performance record as gathered from the results of the board effectiveness evaluation.

4.3       Time and commitment

In assessing a person’s ability and commitment to carry out the role, the Board and NC shall consider criteria which include, but are not limited to the following: –

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

• for the position of director, able to devote time as a board member, having factored in other outside obligations including concurrent board positions held by the director across listed corporations and non-listed entities (including not-for- profit organisations).

(ii)        Participation and contribution to the Board or track record

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

The Board reserves the right to review this Policy periodically to assess its effectiveness, and in any event, to maintain compliance with applicable laws and regulations or accommodate organization changes within the Group.