Corporate Governance

The Board of Directors (the “Board”) of Scicom (MSC) Berhad (the “Company”) subscribes to and supports the Principles and Best Practices as set out in the Malaysian Code of Corporate Governance 2012 (the “Code”) and the governance standards prescribed in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad for the financial year ended 30 June 2016.
 

The Board recognises the importance of corporate governance and conscientiously strives to attain high business ethics and governance in conducting the day-to-day business affairs of the Company and its group of companies (the “Group”), so as to safeguard and enhance shareholder’s value, which includes protecting the interests of all stakeholders.
 

The Board believes that good corporate governance adds value to the business of the Group and will ensure that this practice continues. The Board of Directors believes in playing an active role in guiding the Management through its oversight review while at the same time steer the Group’s business direction and strategy.
 

The Board is pleased to set below the Corporate Governance Statement (the “Statement”) on how the Group has applied the Principles of the Code and the extent of compliance with the Principles and Best Practices advocated therein.

The Board comprises of competent individuals with specialised skills and knowledge providing clear and effective leadership to the Group. The Board is responsible for charting the strategic direction of the Group as well as over-seeing the conduct, performance, risk management and internal controls of the Group’s business activities. In order to ensure a constantly well balanced Board, careful consideration is given when selecting and balancing the composition of Independent and Non Independent Directors.

The Board has a formal schedule of matters requiring its decision as detailed below:

  • Reviewing and adopting the Group’s strategic direction, as proposed by the Group Chief Executive Officer (“Group CEO”). All approved strategies will then be communicated down to respective Heads of Departments for implementation;
  • Reviewing the adequacy of significant risks presented by the Audit and Risk Management Committee (“ARMC”) and in ensuring the implementation of appropriate measures to manage these risks;
  • Reviewing the adequacy and integrity of the Group’s systems of internal control and management information, including ensuring that a sound risk management framework, reporting framework and systems for compliance with applicable laws, regulations, directives and guidelines are in place;
  • Reviewing, approving and monitoring the implementation of the Group’s strategic business plans;
  • Assessing and evaluating the Group’s business and operational performance so as to ensure that the Group is on track with the strategic direction as approved by the Board;
  • Approving significant policies that may have a material impact on the Group’s business activities;
  • Approving the Group’s annual budget which includes all major capital expenditure and all new investment activities;
  • Reviewing the Group’s financial performance and position on a quarterly basis; and
  • Reviewing other significant matters that may have a material impact on the Group.
  • Reviewing succession planning including appointments, determination of compensation levels and replacement of senior management staff
  • Reviewing strategies promoting sustainability in ensuring that the Group operates its business through good processes and policies which are applied by competent and responsible employees.

The Board currently has seven (7) members, comprising one (1) Non-Independent Non-Executive Director, one (1) Non-Independent Executive Director and five (5) Independent Non-Executive Directors. This is in compliance with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Securities (the “Listing Requirements”) which requires at least one-third (1/3) of the Board to comprise of Independent Directors.

The independent Non-Executive Directors provides the necessary checks and balances in the Board’s exercise of their functions by facilitating an independent evaluation of the Board’s decisions and decision making process.

The Board believes that both genders are to be given fair and equal treatment and any new appointments to the Board shall be based solely on merit, experience, qualifications and other attributes. Currently, there is a female Director on the Board.

The Board is satisfied with the level of independence demonstrated by the Directors during the financial year and their ability to act in the best interest of the Group.

Recommendations of the Code provide that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. However, an Independent Director may continue to serve the Board subject to the Independent Director’s re-designation as Non-Independent Non-Executive Director. In the event the Board intend to retain the Director as independent after a cumulative term of 9 years, justification from the Board and shareholders’ approval at the general meeting are required. Dato’ Mohd Salleh Bin Hj Harun, Dr. Nikolai Dobberstein and Mr. Loh Lee Soon, all being Independent Non-Executive Directors had exceeded the term of 9 years during the financial year. In compliance with the Code, the shareholders of the Company during the Thirteenth (13th) Annual General Meeting held on 30th November 2015 re-elected the named Directors to continue in office as Independent Non-Executive Director until the conclusion of the next Annual General Meeting. A brief profile of the Directors is included in the Board of Directors – Profiles as set out on pages 14 to 20 of the Annual Report. The Board is well-balanced and comprises highly respected professionals of various backgrounds and industries which are relevant to the Group’s business activities. The Directors’ wide ranging experience and expertise provide the Group with the strategic thinking which is vital for the Group’s success.

None of the Non-Executive Directors participate in the Group’s day-to-day management activities. The Independent Non-Executive Directors play a pivotal role in ensuring corporate accountability and provide an essential source of impartial and professional advice and judgment to safeguard the interests of the Group and its stakeholders.

In order to achieve a balance of power and authority, there is a clear division of responsibility between the Chairman of the Board and the Group CEO, via the appointment of separate Board members to hold respective positions.

The Chairman is primarily responsible for ensuring the Board’s effectiveness, along with other areas as detailed below:

  • Ensuring proper balance in the Board’s membership, subject to the approval of the shareholders and other members of the Board;
  • Ensuring that all relevant issues are included in the Board meeting agendas;
  • Ensuring that all Directors, both Executive and Non-Executive, are enabled and constantly motivated to play their role to the fullest of their abilities. This includes ensuring that the Board members, particularly the Non-Executive Directors, continuously receive timely and relevant information tailored to their needs, and are properly briefed on issues arising, if any, during the Board meetings; and
  • Ensuring that the Executive Director constantly looks above and beyond his management function, and fully accepts his responsibilities in the area of corporate governance.

The Group CEO is responsible for the day-to-day running of the Group’s business, and ensuring that the Group’s policies and strategies as approved and adopted by the Board are implemented with the assistance of the Senior Management Team (“SMT”).

The Company has in place a Board Charter that sets out, amongst others, the responsibilities, authorities, procedures, evaluation and structure of the Board and Board Committees as well as relationship between the Board with its management and shareholders. The Board Charter is reviewed and updated periodically.

To enhance accountability, the Board Charter also sets out specific functions reserved for the Board and those delegated to the Management.

The principal functions of the Board are as follows:

  • Ensuring that the Company’s goals are clearly established and strategies are in place for achieving them;
  • Reviewing and approving major corporate strategies, plans and annual budget;
  • Monitoring the performance of the corporate strategies;
  • Approving capital expenditure, capital management and acquisitions/divestments;
  • Monitoring the performance of management in the implementation of strategies and policies.

To facilitate efficient management, the Board has approved authority to the management for certain specified activities through a clear and formally defined Limits of Authority (“LOA”), which is the primary instrument which governs and manages the business and operations decisions in the Group. Whist the objective of the LOA is to empower Management, the key principle adhered to the formulation of the LOA is to ensure that a system of internal controls and checks and balances are incorporated therein. The LOA is implemented in accordance with the Group’s policies and procedures and in compliance with the statutory and regulatory requirements. The LOA is periodically reviewed and updated to ensure relevance to the Group’s operations.

The Board meets at least quarterly to, inter alia, approve the quarterly announcements to Bursa Securities, statutory financial statements, the Group’s business plans, and also to review the Group’s financial performance and standing. Additional meetings are convened as and when necessary to deliberate on urgent matters.

Board meetings are scheduled in advance to facilitate Directors to plan ahead and to maximise participation. The agenda and a full set of Board papers are distributed prior to Board meetings to ensure that Directors have sufficient time to read and prepare for discussion at the meetings.

During the current financial year, four (4) Board meetings were held at the following venue and all the Directors attended the four (4) meetings.

Minutes of Board meetings which include a record of the decisions and resolutions of the Board meetings are maintained by the Company Secretary. The Directors have full access to the advice and services of the Company Secretary who is responsible for ensuring that Board meetings procedures are adhered to. The Company Secretary also advises the Board on matters relating to corporate compliance with relevant laws and regulations affecting the Board and the Group, as well as best practices on governance.

 

The Company’s Articles of Association require at least one-third (1/3) of the Board members to retire by rotation at the Annual General Meeting (the “AGM”), and also for all the Directors to retire once every three (3) years, of which the Directors will then be eligible to offer themselves for re-election.

 

The Directors have attended and successfully completed the Mandatory Accreditation Programme as prescribed by Bursa Securities. The Directors are also encouraged to, and have attended various conferences and seminars which are conducted both in-house and by external parties, in order to enable them to effectively discharge their duties, as well as keep abreast of the industry, regulatory and other related developments. The seminars and training courses attended by the Directors during the financial year are as listed:

 

The Directors have full, unrestricted and timely access to all information necessary for the discharge of their responsibilities. The Board is provided with the meeting agenda and Board papers, which enable the Directors to consider any matters arising and facilitate their decision-making process. The Board papers include, among others, the following documents and/or information:

  • The Group’s operational performance for the quarter and year-to-date, as compared to the pre-set budget and operational targets, including a detailed explanation of material variances between the actual and budgeted results. Performance is analysed at project and company-level;
  • A revised profitability budget based on latest events and changes in assumptions due to the prevailing environment;
  • The Group’s profitability, liquidity, financing and market-based ratios for the financial period;
  • The listing of significant planned capital expenditure and their appropriate justifications, to be tabled for approval by the Board;
  • The annual business plan and strategic initiatives are tabled for approval by the Board;
  • The Directors are regularly updated by the Company Secretary on new statutory as well as regulatory requirements relating to Director’s duties and responsibilities on the discharge of their duties as Directors of the Company. The Directors have unrestricted access to the advice and services of the Company Secretary and SMT of the Group; and
  • All the Directors, whether collectively as a Board or in their individual capacity, have access to advice and services of the Group’s Company Secretary. The Group permits an individual director or the Board as a whole to seek independent professional advice in carrying out his or their duties respectively.

In order to enhance the Board’s effectiveness as well as to comply with certain fiduciary duties, the Board has delegated the following responsibilities to standing committees, which operate within clearly defined terms of reference. The respective committees are detailed below:

  • Audit and Risk Management Committee The Audit and Risk Management Committee (“ARMC”) composition and summary of activities is included in the Audit and Risk Management Committee Report as set out on pages 57 to 60 of this Annual Report.
  • Nomination and Remuneration Committee

The Nomination and Remuneration Committee (“NRC”) was formed on 12 May 2010 and is responsible for proposing candidates for directorship and assessing the directors on an ongoing basis. The composition of the NRC complies with the requirements of paragraph 15.08A of the Main Market Listing Requirements (“MMLR”). In addition, the NRC assesses the contribution of individual Board members, the effectiveness of the Board and the Board Committees.

The NRC is responsible in determining the remuneration of the Directors and senior management staff so as to ensure that the Company attracts, retains and motivates the Directors and senior management staff of the quality needed to manage the business of the Group effectively. The remuneration scheme is reflective of the individual Director’s and senior management staff’s experience and level of responsibilities. In addition, the remuneration for the Executive Director and senior management staff is structured to link remuneration and rewards to corporate and individual performance.

The members of the NRC are as follows:

  • Dr. Nikolai Dobberstien – Independent Non-Executive Director
  • Dato’ Mohd Salleh Bin Hj Harun – Independent Non-Executive Director
  • Loh Lee Soon – Independent Non-Executive Director
  • Karen Goonting - Independent Non-Executive Director

The NRC met once during the financial year to review the Board’s structure, evaluation of Director’s performances and to review the remuneration of the Executive Director and senior management staff. The members attended all the meetings.

The Executive Director does not participate in any way in determining the individual remuneration package of the other Directors. The remuneration and benefits of the Non-Executive Directors is determined by the NRC with the individual Directors concerned abstaining from deliberating and voting on their own remuneration.

The Board is responsible for determining the remuneration scheme for its individual members. The annual fees payable to Non-Executive Directors are presented to the shareholders at the AGM for their approval. The Executive Director however, does not participate in any way when determining his remuneration package.

 

Financial Reporting

The Board aims to convey a balanced and understandable assessment of the Group’s performance and prospects in its quarterly announcements, annual reports and other public reports to the shareholders. The Board retains the responsibility for the preparation of the Group’s and Company’s financial statements. The Directors are required by the Companies Act, 1965 to prepare the Group’s and the Company’s statutory financial statements with all material disclosures, to ensure the accuracy and completeness, in compliance with MASB approved accounting standards in Malaysia for Entities Other Than Private Entities, as well as the rules and regulations under the said Act. In order to properly achieve this, the ARMC assists the Board in over-seeing the Group’s financial reporting process and the quality of its financial reporting.

The Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965, in relation to the preparation of the financial statements is set out on page 131 of the Annual Report.

 

Risk Management and Internal Controls

The Board continues to maintain and review its risk management process and internal control procedures to ensure a sound system of risk management and internal control to safeguard shareholder’s investments and the assets of the Company and the Group. In discharging its duties in ensuring the effectiveness of the Group’s systems of risk management and internal control, the Board has entrusted this responsibility to the ARMC. The scope and results of the ARMC’s review are detailed in the Internal Control Statement as set out on pages 53 to 56 of the Annual Report. 

 

Relationship with Auditors

The Board, through the ARMC, has a professional and transparent relationship with both the Group’s internal and external auditors. The internal auditors attend all ARMC meetings held on a quarterly basis and the external auditors attend the ARMC meeting twice during the financial year. Disclosure of non-audit fees is included under Additional Compliance Information as set out on page 134 of the Annual Report. Other facets of the relationship between the ARMC and both the internal and external auditors are elaborated in the Audit and Risk Management Committee Report as set out on pages 57 to 60 of the Annual Report.

The Company Secretaries are appointed by the Board and attend all Board and Board Committee meetings. They are responsible for providing Directors with advice on compliance and corporate governance issues.

The Board has unrestricted access to the advice and services of the Company Secretaries. The Company Secretaries plan an advisory role to the Board in relation to the Company’s constitution, Board’s policies, procedures and compliance with the relevant regulatory requirements including codes or guidance and legislations.

Communication between the Company and its Investors and Other Stakeholders

The Group CEO and the Chairman regularly engages in meeting with institutional investors and analyst. The objective of these meetings is to provide updates on the Group’s financial performances, corporate and regulatory developments and to address issues that the institutional investors and analyst may have with respect to the business or operations of the Group. Information on the Group’s financial performance, corporate and other matters is disseminated through press releases, press conferences, announcements made via Bursa Securities’ website, including quarterly announcements and annual reports. The Company has in place policies and procedures for compliance with the MMLR and ensures that all material information are announced immediately to Bursa Malaysia Securities Berhad as required. Scicom also maintains a website at www.scicom-intl.com, accessible by all its stakeholders and the general public, which provides pertinent and updated information on the corporate and business aspects of the Group. Any queries or concerns regarding the Group may be conveyed via e-mail at corpinfo@scicom.com.my.

 

The Annual General Meeting and Communication with Stakeholders

The Annual General Meeting (“AGM”) is the principal forum for dialogue and communications, and also offers an opportunity for the Board and the Senior Management Team (“SMT”) to interact with the shareholders. During the AGM, the Chairman, other Board members, SMT and Group’s external auditors are available to respond to any questions and queries as raised by the shareholders. Where appropriate, the Chairman will endeavour to provide the shareholders with written answers to any significant questions which cannot be readily answered during the AGM.

Shareholders are encouraged to participate in the proceedings and pose questions about the resolutions proposed and the Group’s business operations and to raise questions with regards to the Group as a whole as well as to discuss any other important matters with the Board, During the AGM there is a presentation by the Group CEO on the Group’s financial presentation. During the AGM the Chairman will invite shareholders to raise questions pertaining to the audited financials and other items for adoption at the meeting before putting the resolution to vote.

The Annual Report also plays an important part in disseminating information related to the Group’s financial performance, and operations and activities throughout the financial year.

This Statement is made in accordance with the resolution adopted by the Board at its meeting held on 26 August 2016.

1. CONSTITUTION

The Board of Directors has established a Committee of the Board to be known as the Audit and Risk Management Committee.

 

2. COMPOSITION OF AUDIT AND RISK MANAGEMENT COMMITTEE
  • The Audit and Risk Management Committee shall be appointed by the Board of Directors from amongst their members and shall consist of at least three (3) members, the majority of whom are independent directors. All members of the Audit and Risk Management Committee shall be non-executive directors.
  • At least one member of the Audit and Risk Management Committee shall be a member of the Malaysian Institute of Accountants or possess at least three (3) years’ working experience and has passed the examinations sets out in Part I of the First Schedule or a member of one of the associations of accountants set out in Part II of the First Schedule of the Accountants Act, 1967 respectively or fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).
  • No alternate Director(s) shall be appointed to be member(s) of the Audit and Risk Management Committee.
  • The members of the Audit and Risk Management Committee shall elect a Chairman from amongst its members who shall be an Independent Non-Executive Director.
  • The Board must ensure that the Chief Executive Officer shall not be a member of the Audit and Risk Management Committee.
  • The Board must review the term of office and performance of the Audit and Risk Management Committee and each of its members at least once every 3 years to determine whether such Audit and Risk Management Committee and members have carried out their duties in accordance with their terms of reference. 
 
3. MEETINGS

(a)  Frequency of Meeting

  • The Audit and Risk Management Committee shall meet not less than four (4) times a year and as many times as the Audit and Risk Management Committee deems necessary with due notice of issues to be discussed.

(b) Proceedings of Meeting

  • At least four (4) meetings are held in a year. However, meetings are also held as and when required or upon the request of the external auditors to consider any matters that the external auditors believe should be brought to the attention of the Directors and/or shareholders.
  • The quorum for meeting of the Audit and Risk Management Committee shall be two (2) members of which the majority of members’ present must be Independent Non-Executive Directors.
  • The agenda of the Audit and Risk Management Committee meetings shall be circulated before each meeting to members of the Audit and Risk Management Committee. The Audit and Risk Management Committee may require the external auditors and any officer of the Company to attend any of its meetings as it determines.
  • If at any meeting, the Chairman of the Audit and Risk Management Committee is not present within fifteen (15) minutes of the time appointed for holding the same, the members of the Audit and Risk Management Committee present shall choose one of their number who shall be an Independent Non-Executive Director to be Chairman of such meeting.
  • The Company Secretary shall be the Secretary of the Audit and Risk Management Committee.

Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the Chairman of the Audit and Risk Management Committee shall have a second or casting vote. 

(c) Attendance at Meeting

  • The presence of external auditors and internal auditors (if any) at any meeting of the Audit and Risk Management Committee can be requested if required by the Audit and Risk Management Committee.
  • Other members of the Board and officers of the Company and its Group may attend the meeting (specific to the relevant meeting) upon the invitation of the Audit and Risk Management Committee.
  • The Audit and Risk Management Committee shall meet with external auditors without Executive Directors present at least twice a year.

(d) Keeping and Inspection of Minutes

  • The Company shall cause minutes of all proceedings of the Audit and Risk Management Committee Meeting to be entered in books kept for that purpose within 14 days of the date upon when the relevant meeting was held.
  • Those minutes to be signed by the Chairman of the Audit and Risk Management Committee Meeting at which the proceedings were had or by the Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates.
  • The books containing the minutes of proceedings of the Audit and Risk Management Committee Meeting shall be kept by the Company at the place to be determined by the Board, and shall be open to the inspection of any members of the Board of Directors or Audit and Risk Management Committee members without charge.

The minutes of the Audit and Risk Management Committee Meeting shall be circulated to the members of the Board for notation. 

 

4. AUTHORITY

The Audit and Risk Management Committee shall in accordance with the procedure determined by the Board and at the cost of the Company: -

(a) have the authority to appoint the Internal Auditor of the Company and establish an internal audit function which is independent of the activities and ensure that the Internal Auditor reports directly to the Audit and Risk Management Committee;

(b) have explicit authority to investigate any matter within the terms of reference;

(c) have the resources which the Audit and Risk Management Committee requires to perform the duties;

(d) have full and unrestricted access to any information which the Audit and Risk Management Committee requires in the course of performing the duties;

(e) have unrestricted access to the Chief Executive Officer of the Company;

(f) have direct communication channels with the external auditors and persons carrying out the internal audit function or activity (if any);

(g) be able to obtain independent professional or other advice in the performance of its duties at the cost of the Company;

(h) be able to invite outsiders with relevant experience to attend its meetings, if necessary;

(i) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other executive Board members and employees of the Company, whenever deemed necessary; and

be able to oversee, consider, assess and monitor the risk management activities of the Group, approve the appropriate risk management procedures and measure the methodologies across the organisation as well as identify and manage the strategic business risks of the Group.

 

5. DUTIES AND RESPONSIBILITY

The duties and responsibilities of the Audit and Risk Management Committee shall include the following: -

(a) Matters relating to External Audit: -

  1. To consider the appointment of the external auditors, the audit fee and any question of resignation or dismissal;
  1. To review the nature, scope and quality of external audit plan/arrangements; 
  1. To review quarterly and annual financial statements of the Company, before submission to the Board, focusing in particular on the going concern assumption, compliance with accounting standards and regulatory requirements, any changes in accounting policies and practices, significant issues arising from the audit and major judgement issues;
  1. To review the external auditors’ audit report on the financial statement;
  1. To review any management letter sent by the external auditors to the Company and the management’s response to such letter;
  1. To review any letter of resignation from the external auditors;
  1. To consider and review whether there is reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment;
  1. To review the assistance given by the Company’s officers to the external auditors;
  1. To discuss problems and reservations arising from the interim and final audits on any significant audit findings, reservations, difficulties encountered or material weakness reported; and

To review any related party transaction and conflict of interest situation that may arise within the Company or group including any transaction, procedure or course of conduct that raises questions of management integrity.

(b) Matters relating to Internal Audit function, if any exists: -

  1. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that has the necessary authority to carry out the work;
  1. To review the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and where necessary ensure that appropriate actions are taken on the recommendations of the internal audit function;
  1.  To review the follow up actions by the management on the weakness of internal accounting procedures and controls;
  1. To review on all areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;
  1. To review the assistance and co-operation given by the Company and its officers to the internal auditors;
  1.    To review any appraisal or assessment of the performance of staff of the internal audit function, compliance with accounting standards and regulatory requirements, any changes in accounting policies and practices, significant issues arising from the audit and major judgement issues;
  1. To approve any appointment or termination of senior staff members of the internal audit function; and

To review any letter of resignation of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.

(c) Matters relating to Risk Management and Internal Control Functions: -

  1. To review the adequacy and integrity of internal control systems, including risk management and management of information system;
  1. To identify the principal risks in achievement of the Company’s objectives and ensure that the implementation of appropriate systems to manage these risks;
  1. To review and monitor the business and financial risks facing by the Group and to ensure that all high impact risks are adequately managed at various levels within the Group;
  1. To review and rate the risks of auditable areas and ensure that all high and critical risk areas are audited annually;
  1. To review the effectiveness of overall risk management and ensure that all the key risks and control lapses have been addressed;
  1. To oversee the risk management activities of the Group and ensure compliance and effective implementation of risk policy and objectives; and
  1. To provide assurance of the adequacy and reliability of the risk management processes in compliance with risk-related regulatory requirements.

(d) Roles and Rights of the Audit and Risk Management Committee: -       

  1. To consider and review any significant transactions which are not within the normal course of business and any related party transactions that may arise within the Company and the Group;
  1. To report to Bursa Securities on any matter reported by the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Bursa Securities Listing Requirements for Main Market; and

To carry out any other function that may be mutually agreed upon by the Audit and Risk Management Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Audit and Risk Management Committee’s duties and responsibilities.

(e) Retirement and Resignation of Member of Audit and Risk Management Committee:

      a. Retirement/Resignation

  • A member of the Audit and Risk Management Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves.

      b. Vacancy

  • In the event of any vacancy in the Audit and Risk Management Committee, the Company shall fill the vacancy within two (2) months, but in any case not later than three (3) months.
1. CONSTITUTION

The Board of Directors has established a Committee of the Board to be known as the Nominating and Remuneration Committee (“N & R Committee”).

 

2. OBJECTIVE

The primary objective of the N & R Committee is to recommend to the Board the nomination and remuneration of Executive Directors, Non-Executive Directors and Chief Executive Officer.

However, the determination of the remuneration of Non-Executive Directors, including the Non-Executive Chairman will rest as a matter for the Board as a whole. The individuals, whether Executive Directors or Non-Executive Directors, should play no part in decisions and/or approval of their own remuneration.

 

3. COMPOSITION OF THE N & R COMMITTEE
  • The members of the N & R Committee shall be appointed by the Board of Directors from amongst their members. The N & R Committee shall consist of at least two (2) members and exclusively of Non-Executive Directors, the majority of whom shall be Independent Directors.

  • The members of the N & R Committee shall elect a Chairman from amongst its members.

  • In the event of any vacancy in the N & R Committee resulting in the non-compliance of the above, the Company must fill the vacancy within two (2) months, but in any case not later than three (3) months.
  • The Board must review the term of office and performance of the N & R Committee and each of its members at least once every 3 years to determine whether such N & R Committee and members have carried out their duties in accordance with their terms of reference.

 

4. MEETINGS

(a)  Frequency of Meeting

  • The N & R Committee shall meet at least once a year and as many times as the N & R Committee deems necessary with due notice of issues to be discussed.

(b)  Proceedings of Meeting

  • The quorum for meeting of the N & R Committee shall be two (2) members and the majority of members present must be Independent Directors.
  • If at any meeting, the Chairman of the N & R Committee is not present within fifteen (15) minutes of the time appointed for holding the same, the members of the N & R Committee present shall choose one of their number to be Chairman of such meeting.
  • Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes, the Chairman of the N & R Committee shall have a second or casting vote.

(c)  Attendance at Meeting

  • Other members of the Board and officers of the Company and its group may attend the meeting (specific to the relevant meeting) upon the invitation of the N & R Committee.

 

5. DUTIES AND RESPONSIBILITIES

The duties and responsibilities of the N & R Committee shall include the following:-

(a) To identify and recommend to the Board, candidates for directorship of the Company, taking into consideration the candidates’:-

  • skills, knowledge, expertise and experience;
  • professionalism;
  • integrity; and
  •  in the case of candidates for the position of Independent Non-Executive Directors, the N & R Committee should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors;

(b) To recommend to the Board, Directors to fill the seats on Board Committees;

(c) To review annually of the required mix of skills and experiences and other qualities including core competencies which Non-Executive Directors should bring to the Board and recommend its findings to the Board;

(d) To assess annually the effectiveness of the Board as a whole, the Board Committees and the contribution of each individual Director and thereafter, recommend its findings to the Board;

(e) To recommend to the Board, the remuneration of the Executive Directors in all its forms, drawing from outside advice as necessary;

(f) To review and advise the Board on the terms of appointment and remuneration of the Chief Executive Officer;

(g) To review the annual salary increments and bonuses for the Executive Directors;

(h) To oversee any major changes in employee remuneration and benefit structures throughout the Company and the Group;

(i) To seek external advice, where necessary to recommend the remuneration package for the Directors; and

(j) To carry out any other function that may be mutually agreed upon by the N & R Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the N & R Committee’s duties and responsibilities.

 

6. RETIREMENT AND RESIGNATION OF MEMBER OF THE N & R COMMITTEE
  • A member of the N & R Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves.
Policy Statement

SCICOM is committed to promote and maintain high standards of transparency, integrity, accountability and ethics as well as good Corporate Governance practices in the conduct of its businesses and operations.

In line with these core values, SCICOM has made available an avenue for all employees and members of the public to disclose any improper conduct or malpractice committed or about to be committed to/within SCICOM Group at the earliest opportunity and to provide protection to persons making such disclosure.

 

Scope of the Policy

The scope of whistleblowing under this Policy includes:

  • Incidents of fraud, corruption or bribery;
  • Money laundering;
  • Abuse of power;
  • Conflict of interest;
  • Theft or embezzlement;
  • Misuse of Company’s property or information;
  • Breach of applicable laws and regulations;
  • Breach of SCICOM’s policies, procedures and other codes of conduct;
  • Situations which pose a danger to health, safety or any individual or significant danger to the environment;
  • Any other wrongdoing the nature of which is subject to SCICOM’s absolute discretion.

This Policy does not apply to employment issues which are to be dealt with in accordance with SCICOM’s Employee Grievance Procedure.

 

Whistleblowing Procedure

All disclosures are to be made in accordance with the SCICOM Whistleblowing Procedure as provided under this Policy.

 

Anonymity of Whistleblower

A Whistleblower is encouraged to identify himself/herself and provide contact information in his/her disclosure. Anonymous disclosures may impede an investigation and prevent SCICOM from providing the Whistleblower with the necessary protection as the Company will not know who you are.

Irrespective of this, anonymity will be maintained as permitted by law or the Whistleblower indicates that he/she no longer wishes to remain anonymous.

 

Protection to Whistleblower

A Whistleblower will be accorded the protection of confidentiality, to the extent reasonably practicable and as permitted by law. In addition, a Whistleblower who is a SCICOM employee will be protected against any adverse or detrimental actions as a result of making a disclosure under this Policy. Such protection is accorded even if the investigation later reveals that the Whistleblower was mistaken as to the facts, the rules or procedures involved.

 

Withdrawal of Disclosure Made

A Whistleblower may request the withdrawal of his/her disclosure. Such request shall be in writing in accordance with the SCICOM Whistleblowing Procedure.

SCICOM reserves the right to proceed with investigation of a disclosure even if it is subsequently withdrawn by the Whistleblower.

 

Investigation and Reporting

All disclosures will be investigated promptly by a person/party as directed by SCICOM’s Audit and Risk Management Committee (‘ARMC’). The ARMC has the authority to:

  • Determine the legitimacy of a disclosure received;
  • Direct further action;
  • Ensure all reasonable steps have been taken for a fair and unbiased investigation regarding a disclosure; and
  • Decide on the necessary action to be taken based on recommendation outlined in the investigation report.

 

Notification

The Whistleblower will be notified of the outcome of his/her disclosure.

 

This Policy may be amended from time to time.

 

Scicom's Whistleblowing Procedure