Risk, Governance and Sustainability Committee

OBJECTIVES OF THE RISK, GOVERNANCE & SUSTAINABILITY COMMITTEE ("RGSC")

(i) Provides assistance to the Board of Directors (“Board“) in discharging its oversight responsibilities and fulfilling its fiduciary responsibilities in formulating, overseeing as well as inculcating a sound enterprise risk management framework and systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines in order to manage the overall risk exposure of Dagang NeXchange Berhad (“DNeX“) and its subsidiaries (collectively, “DNeX Group” or the “Group“)

(ii) Provide oversight on the Group’s anti–bribery and anti–corruption framework and initiatives as well as the potential risks arising from non–compliant practices in line with the applicable laws and regulatory requirements on anti- corruption including the Malaysian Anti–Corruption Commission (“MACC”) Act, 2009.

(iii) Assist the Board in providing oversight, advice and direction in the development, implementation and monitoring of the Group’s Sustainability strategies, framework, policies and initiatives covering Environmental, Social and Governance (“ESG“) aspects as well as embedding Sustainability practices into the businesses

MEMBERSHIP

(i) The RGSC shall consist of a minimum of three (3) members, of which a majority must be independent directors. All members of the RGSC should be non–executive directors.

(ii) The members of the RGSC shall elect a Chairman from among themselves who shall be an independent non–executive director and the Chairman so elected will continue to chair the RGSC until his resignation from the RGSC or until the members of the RGSC decides to elect another member as Chairman.

(iii) Vacancies in the RGSC must be filled within three (3) months. The Nomination and Remuneration Committee will review and recommend to the Board for approval, another director to fill up such vacancies.

(iv) The terms of office and performance of the RGSC must be reviewed by the Board once every three (3) years.

(v) Alternate directors are not eligible to become members of the RGSC.

(vi) All members of the RGSC, including the Chairman, will hold office only so long as they serve as Directors of the Company.

(vii) Members of the RGSC may relinquish their membership in the RGSC with prior written notice to the Company Secretary and may continue to serve as a Director of the Company.

(viii) All RGSC Members including the Chairman should be persons of good social standing and possess relevant skills and good track record in the corporate or business field.

FUNCTIONS OF THE RGSC

3.1 Risk Management

3.1.1 Assist the Board in determining the Company’s level of risk tolerance and actively identify, assess and monitor key business risks to safeguard shareholders‘ investments and the Company’s assets.

3.1.2 Assist the Board in ensuring that there exist adequate and effective systems of governance, control and risk management.

3.1.3 Assist the Board in identifying the principal risks in the achievement of the Company’s objectives and ensuring the implementation of appropriate systems to manage these risks.

3.1.4 Review and recommend:

the risk management policy;
procedures and risk management framework for the approval and acknowledgment of the Board;
provide guidance on the overall risk strategy and directives for implementation;
ensure that the principles and requirements of managing risk are consistently adopted throughout the Group in accordance with ISO 31000:2018.

3.1.5 Review periodically the risk management framework and risk profile and to be satisfied that the methodology employed allows the identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to minimize risk and maximize opportunities.

3.1.6 Review the relevant statements for inclusion into the Company’s Annual Report including the Statement on Risk Management and Internal Control and such other statements which are mandated by Bursa Malaysia Securities Berhad or related to governance and risk management and recommend such statement(s) to the Board for approval.

3.2 Business Continuity Management (“BCM“)

3.2.1 Review the framework, the plan and the scope as well as the effectiveness of the BCM functions in accordance with ISO 22301.

3.2.2 Review and deliberate reports on business continuity testing results and recommendations.

3.3 Anti–Bribery and Anti–Corruption (“ABAC“) Governance

3.3.1 Assist the Board in its oversight of the Group’s ABAC governance and compliance framework and in ensuring that best practices of ABAC management system is established, implemented, maintained and reviewed to adequately address the Group’s bribery and corruption risks, including the Group’s ABAC Framework and Policy.

3.3.2 Assist the Board in promoting the appropriate ABAC culture within the Group.

3.3.3 Assist the Board in ensuring the alignment of ABAC Framework and Policy to the strategy of the Group.

3.4 Sustainability

3.4.1 Review and recommend Sustainability policies, strategies, roadmaps and frameworks to the Board for approval, to create positive impacts on ESG material matters.

3.4.2 Review and recommend to the Board, the proposal by Management on Sustainability initiatives, in alignment with the overall Group Sustainability Framework, including the achievement or revision of Sustainability targets and commitments.

3.4.3 Provide oversight to ensure that good ESG practices are promoted, in place and applied consistently

3.4.4 Review the relevant statements for inclusion into the Company’s Annual Report including the Sustainability Statement, or the Company’s Sustainability Report and such other statements which are mandated by Bursa Malaysia Securities Berhad or related to Sustainability and recommend such statement(s) to the Board for approval.

3.5 To consider other matters as defined by the Board.

POWERS OF THE RGSC

To enhance the effectiveness of the RGSC in the discharge of its duties, the RGSC will have the following rights:–

(i) Authority to investigate any matter within its Terms of Reference and to appoint such investigator(s), as appropriate.

(ii) To have access to resources that are required to perform its duties.

(iii) Full, free and unrestricted access to any information, records, properties and personnel of the Company and other companies in the Group.

(iv) Have direct communication with the Risk and Business Process Management (“RBPM“) and Corporate Communications and Branding (Sustainability) (“CCB“) departments/functions.

(v) To obtain external professional advice and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

(vi) The attendance of any particular RGSC meeting by other directors and employees shall be at the RGSC’s discretion; and must be specific to the relevant meeting.

FREQUENCY AND ATTENDANCE AT RGSC MEETINGS

(i) The RGSC shall convene meetings as and when required. The quorum shall comprise a majority of independent directors.

(ii) Recommendations of the RGSC are submitted to the Board for approval.

(iii) A resolution in writing signed or assented to by any means of electronic communication by a majority of the RGSC members, and who are sufficient to form a quorum, shall be valid and effective as if it had been passed at a meeting of the RGSC duly called and constituted. All such resolution shall be forwarded or otherwise delivered to the Secretary without delay and shall be recorded by them in the Company’s Minutes Book. Any such resolution may consist of several documents in like form each signed by one (1) or more RGSC members.

(iv) A meeting of the RGSC may be convened using any technology or method, which enables all persons participating in the meeting to communicate with each other. A person so participating shall be deemed to be present in person at such meeting and shall be counted in a quorum and be entitled to vote.

(v) Minutes of each meeting should be kept and distributed to each member of the RGSC. The Secretary to the RGSC should be the Company Secretary.

SUPPORT

The Company Secretary shall provide the necessary support to enable members of the RGSC to discharge their functions effectively.

POSITION DESCRIPTIONS

CHAIRMAN OF THE RGSC

The following are the main duties and responsibilities of the RGSC Chairman.

(i) Assists the RGSC to fulfil the goals it sets by assigning specific tasks to members of the RGSC and identifies guidelines for the conduct of the members and ensures that each member is making a significant contribution.

(ii) Looks to the Company Secretary for guidance to the RGSC on what their responsibilities are under the rules and regulations to which they are subject to and how those responsibilities should be discharged. The compliance advice should extend to embrace all laws and regulations and not merely the routine filing requirements and other administrative requirements of the Companies Act, 2016.

(iii) Provides a reasonable time for discussion at the meeting. Organises and presents the agenda for regular or special committee meetings based on input from members and ensures that all relevant issues are on the agenda. In addition, the Chairman should encourage a healthy discussion on the issues brought before the RGSC.

(iv) Provides leadership to the Committee and ensures proper flow of information to the RGSC, reviewing the adequacy and timing of documentation.

(v) Secures good corporate governance and ensures that members look beyond their RGSC function and accept their full share of responsibilities of governance materials in support of management’s proposals.

(vi) Manages the processes and working of the RGSC and ensures that the RGSC discharges its responsibilities in accordance with the Terms of Reference. Appropriate procedures may involve the RGSC meeting on a regular basis without the presence of management.

(vii) Ensures that consensus is reached on every RGSC resolution and where considered necessary, call for a vote and to ensure that it is the will of the majority that prevails. Dissenting

(viii) Engages on a continuous basis with senior management, such as the Chairman of the Company, Group Managing Director, Executive Director(s), Group Chief Executive Officer (or a person of similar capacity), Group Chief Financial Officer (or a person of similar capacity) and the Head of RBPM (or a person of similar capacity) and Head of CCB (or a person of similar capacity) in order to be kept informed of matters affecting the Company.

2. RGSC MEMBERS

Each RGSC member is expected to:

(i) Provide individual external independent opinions to the fact–finding, analysis and decision–making process of the RGSC, based on their experience and knowledge.

(ii) Consider viewpoints from the other RGSC members; make decisions and recommendation for the best interest of the Company and the Group collectively.

(iii) Keep abreast of the latest corporate governance guidelines and best practices in relation to the RGSC and the Board as a whole.

(iv) Continuously seek out best practice in terms of the processes utilised by the RGSC, following which these should be discussed with the rest of the RGSC for possible adoption

REVISION OF THE TERMS OF REFERENCE

(i) Any revision or amendment to the Terms of Reference, as proposed by the RGSC, shall first be presented to the Board for its approval.

(ii) Upon the Board’s approval, the said revision or amendment shall form part of this Terms of Reference and this Terms of Reference shall be considered duly revised or amended.

REVISION OF THE TERMS OF REFERENCE