United Plantations Berhad : Corporate Governance Overview Statement

UNITED PLANTATIONS BERHAD

(Company no. 191701000045 (240-A))

Jendarata Estate • 36009 Teluk Intan • Perak Darul Ridzuan • Malaysia

CORPORATE GOVERNANCE OVERVIEW STATEMENT

UNITED PLANTATIONS BERHAD

Corporate Governance Overview Statement

The Board of Directors recognizes the importance of good corporate governance and continues to be committed to ensure that high standards of corporate governance are practiced throughout the Group to deliver long term sustainable value to the shareholders and other stakeholders. With this in mind the Board of Directors are pleased to present the corporate governance overview statement which takes guidance from the key CG principles as set out in the Malaysian Code on Corporate Governance (MCCG). The Management with the support of the Board has since 2019 embedded important element of integrated reporting by incorporating a Value Creation Modal in the Annual Report. However, the target of fully adopting integrated reporting in 2021 has to been deferred to 2022 due to pandemic which is beyond the control of the Management.

The detailed explanation on the application of the corporate governance practices are reported under Corporate Governance Report ("CG Report") which is published on the Company's websitewww.unitedplantations.com.

The Company as at the date of this Corporate Governance Overview statement has applied all of the practices in MCCG 2021 except for the followings:

Practice 1.4

The Chairman of the board should not be a member of the Audit Committee, Nomination Committee or Remuneration Committee

Practice 5.2

At least half of the board comprises independent directors. For Large Companies, the board comprises a majority of independent directors.

Practice 5.3

The tenure of an independent director does not exceed a cumulative term limit of nine years. Upon completion of the nine years, an independent director may continue to serve on the board as a non-independent director. If the board intends to retain an independent director beyond nine years, it should provide justification and seek annual shareholders' approval through a two-tier voting process.

Practice 5.9

The board comprises at least 30% women directors.

Practise 6.1

The Board should undertake a formal and objective annual evaluation to determine the effectiveness of the Board, its committees and each individual director. The Board should disclose how the assessment was carried out and its outcome, actions taken and how it has

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or will influence board composition. For Large Companies , the board engages independent experts periodically to facilitate objective and candid Board evaluation.

Practice 12.2

Large companies are encouraged to adopt integrated reporting based on a globally recognised framework.

A) Board Charter

The Board Charter sets out the Board's strategic intent and outlines the Board's roles and responsibilities. The Charter elaborates the fiduciary and leadership functions of the Board and serves as a primary reference for prospective and existing Board members and senior management. The Charter is reviewed periodically to ensure it complies with current legislation and best practices. The Board Charter was reviewed and updated on 20 February 2021 and can be viewed at the Company's website atwww.unitedplantations.com .

B) Strengthen Composition

Specific responsibilities are delegated to Board Committees where appropriate. The Board Committees comprises of Nomination Committee, Remuneration Committee, Audit and Risk Committee and Executive Committee. Each Committee operates within its respective Terms of Reference which have been approved by the Board.

B1.1 Nomination Committee

The Nomination Committee is responsible to make recommendations to the Board regarding the appointment of directors, evaluation of the skills, experience, competencies of the Directors, diversity of the Board's composition. The Nomination Committee consists of 3 members, who are all Independent, Non-Executive Directors. The full report of the Nomination Committee can be found from pages 119 to 120 of this Corporate Governance Overview Statement 2021.

B1.2 Remuneration Committee and Directors Remuneration

The Remuneration Committee consists entirely of three (3) non-executive directors, all of whom are independent Directors. Its primary function is to review and recommend the remuneration for the Company's executive directors.

The members of the Remuneration Committee are stated herebelow:-

Ybhg. Dato' Mohamad Nasir bin Ab. Latif (Chairman) (Independent, Non-ExecutiveDirector)

Y. Hormat Dato' Jeremy Derek Campbell Diamond

(Independent, Non-Executive Director)

Mr. R. Nadarajan

(Independent, Non-Executive Director)

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It is the Remuneration Committee's usual practice to draw information on the Company's remuneration policy from the Executive Committee to assist them with their duties. Executive directors do not participate in the deliberations of the Remuneration Committee.

Only the executive directors have contracts of service which are normally reviewed every three years. The executive directors' salaries are linked to their position, seniority, experience and the Company's overall profitability which would vary from year to year. The salary components are determined in accordance with the Company's established remuneration policy for executive directors. The remuneration packages are sufficiently attractive to attract and retain executive directors. All directors are paid annual fees. The Chairman and members of the Audit and Risk Committee receive additional fees taking into account the nature of their responsibilities. Members of other Board committees do not receive any additional fees. The directors' fees are reviewed by the Board only when it deems necessary, subject however to approval by the shareholders at the A.G.M.. The amount is related to their level of responsibilities. Periodical review of the fees is undertaken based on market information on directors' fees. A fixed meeting attendance allowance is paid for all attendances at Board and Board Committee meetings except for the Executive Committee meetings. The Remuneration Committee held one (1) meeting during 2021 to deliberate on the new service contract of one executive director as well as bonuses for the executive director and made their recommendation to the Board. The aggregate remuneration for the year for the following directors are as shown in the table below.

	Directors' Fees			Bene-		Meeting
		Subsidi-
				fits-in	Other	Attendance
	Company	aries	Salary*	Bonus	Kind	Benefits	Allowance	Total
	(RM)	(RM)	(RM)	(RM)	(RM)	(RM)	(RM)	(RM)
Ybhg.Tan Sri Datuk Dr. Johari bin Mat
(rtd 22 April 2021)	50,630	-	-	-	-	100,000	3,000	153,630
Ybhg.Dato'' Mohamad Nasir bin Ab. Latif
(Chairman, Independent, Non-Executive)
(wef 22 April 2021)	145,055	-	-	-	-	8,703	9,000	162,758
Ybhg. Dato' Carl Bek-Nielsen
(Chief Executive Director)	100,000	25,000	1,890,000	78,750	64,120	323,722	6,000	2,487,592
Mr. Ho DuaTiam
(Non-Independent,Non-Executive)	100,000	-	-	-	-	-	6,000	106,000
Mr.Ahmad Riza Basir
(Independent, Non-Executive)	110,000	-	-	-	-	-	13,500	123,500
Y. Hormat Dato' Jeremy Derek Campbell Diamond
(Independent, Non-Executive)	120,000	-	-	-	-	-	16,500	136,500
Mr. Martin Bek-Nielsen
(Executive Director)	100,000	23,000	1,770,000	75,250	60,361	303,127	6,000	2,334,738
Mr. Loh Hang Pai
(Executive Director)	100,000	-	1,006,500	100,000	38,163	190,935	6,000	1,441,598
Mr. R. Nadarajan
(Independent, Non-Executive)	110,000	-	-	-	-	-	16,500	126,500
Madam Rohaya binti MohammadYusof
(Non-Independent,Non-Executive)	100,000	-	-	-	-	-	6,000	106,000
Mr. Jorgen Belle
(Non-Independent,Non-Executive) wef 21.05.2018	100,000	-	-	-	-	-	6,000	106,000
Ms. Belvinder Kaur a/p C Nasib Singh
(Independent, Non-Executive)	15,342	-	-	-	-	-	1,500	16,842
Total	1,151,027	45,000	4,666,500	254,000	162,645	926,488	96,000	7,301,660

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B1.3 Audit Committee

The Audit and Risk Committee consists entirely of three (3) non-executive directors as required under the Main Market Listing Requirements, all of whom are independent directors. The scope and functions of the Audit and Risk Committee are as spelt out under the Terms of Reference. The activities of the Audit and Risk Committee during the financial year 2021 have been described at length in a separate statement in this Annual Report. (pages 115 to 118).

B1.4 Executive Committee

The Executive Committee consists of executive directors only. The scope and functions of the Executive Committee are as stated in the Terms of Reference approved by the Board. It is responsible to oversee the day-to-day management of the Group's operations which includes reviewing of the annual revenue and capital budgets before presenting to the Board, reviewing the monthly, quarterly and annual results of the Company and Group and comparing them with the respective business units budgets and taking remedial actions for budget variances, implement policies and procedures approved by the Board, implement recommendations of the Audit and Risk Committee, identify key risks annually and implement mitigating actions where practicable, recommend expansion and diversification plans, implement policies for succession, labour recruitment, ensure continuity of business during pandemic, replanting and replacement of plant and machinery, and the review of research policies and projects.

The Executive Committee has established the Group Sustainability Committee which reviews sustainability issues concerning the environment, social/community, employees and market place. The Sustainability Report has been included in a separate statement in this Annual Report.

The Executive Committee has access to the services of the Company Secretary who records and maintains minutes of Executive Committee meetings. The Executive Committee met formally 2 times during 2021, and the minutes thereof were included in the Board file for information and deliberation by the Board. All the executive directors attended all 2 meetings. The Executive Committee also met informally on more than 20 occasions during the year to deal with matters that required prompt response and decisions.

C. Reinforce Independence

C.1 Board Balance and Independence of Directors

The Company has an effective Board entrusted with leadership responsibilities by its shareholders. It is headed by a Chairman who is independent of management and whose key role is the stewardship of the Board. The Chief Executive Director on the other hand is the head of management whose key responsibilities are to run the business and implement the policies and strategies approved by the Board. Due to their contrasting roles at the head of the Company, the two roles are not combined.

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