Practice 7.1 of the Malaysian Code on Corporate Governance (“MCCG”) recommends that the board of directors of a company (“Board”) should establish a policy formalizing its approach to determine the remuneration package which takes into account the demands, complexities and performance as well as skills and experience of the directors and senior management. The remuneration policies and practices should appropriately reflect the different roles and responsibilities of non-executive directors, executive directors and senior management.

Fair remuneration is critical to attract, retain and motivate directors and senior management. The remuneration package should take into account the complexity of the company’s business and the individual’s responsibilities. In addition, the remuneration should also be aligned with the business strategy and long-term objectives of the company.

In determining the appropriate level of remuneration for directors and senior management, the Board should also take into consideration the Company’s performance in managing material sustainability risks and opportunities. The remuneration and incentives for independent directors should not conflict with their obligation in bringing objectivity and independent judgment on matters discussed.

This Remuneration Policy (“Policy”) applies to the Executive Directors (“ED”), Non-Executive Directors (“NED”) and Senior Management (“Senior Management”) of POWERTECHNIC GROUP BERHAD (“Powertechnic or the “Company”).

This Policy is designed to support the Company’s key strategies, create a strong performance- oriented environment which is able to attract, motivate and/or retain talents of high calibre. This Policy shall adhere to the following key principles:-

• The total remuneration shall be set at levels that are competitive and comparable with the relevant market and industry;
• The Group’s performance in managing material sustainability risks and opportunities should be taken into consideration;
• EDs’ remuneration shall be performance-based;
• Incentive plans, performance measures and targets shall be aligned with shareholders’ interest in mind;
• Provide an appropriate level of transparency to ensure this Policy underlying the EDs’, NEDs’ and Senior Management’s remuneration is understood by investors; and
• Ensure a level of equity and consistency.

a)          Fixed Remuneration for Executive Directors

The fixed salary is determined according to:-

• The scope of the duty and responsibilities;
• The competence and experiences required;
• The ethical values, internal balances and strategic targets of the Company;
• The corporate and individual performance
• The achievements of the EDs in the Company; and
• Current market rate within the industry and in comparable companies.

b)          Bonus/ Performance Incentives for EDs and Senior Management

The bonus/ performance incentives in the case of EDs and Senior Management is designed to reward, retain and motivate the individual and will depend on the outstanding performance as well as the personal contribution. The bonus/ performance incentives is granted depending on the performance of the Company and its subsidiaries (collectively referred to as “the Group”). An annual assessment is made to ensure that all Factors including measurables and indirectly measurables are considered

c)          Fixed Fee for Members of Board of Directors (in particular, Non-Executive Directors)

Fees payable to NED shall be by a fixed sum, and not by a commission on or percentage of profits or turnover. The fixed fee is determined according to:-

• Be on par with the rest of the market rate;
• Reflect the qualifications and contribution required in view of the Group’s complexity;
• The extent of the duty and responsibilities; and
• The number of Board meetings and Board committees’ meetings.

d)          Fixed Remuneration for Senior Management

The fixed salary is determined according to:-

• The scope of the duty and responsibilities;
• The competence and experiences required;
• The corporate and individual performance;
• Individual’s overall contribution to the Company’s strategy and operation; and
• Current market rate within the industry and in comparable companies.

e)          Other Benefits and Allowances

The benefits and allowances which should be decided by the Board as a whole upon the recommendation of the Remuneration Committee include:-

• Allowance of the Chairman of the Board, chairmanship and memberships of Board committees;
• Meeting allowance;
• Expenses such as, travelling and entertainment expenses incurred in the course of their duties as Directors of the Company (“Directors”); and
• Benefit in kind such as, motor vehicle, petrol, driver and accommodation and such other benefits deemed appropriate and in line with industry standards.

On an annual basis, the Remuneration Committee shall discuss and agree on all measurable objectives for offering fair remuneration packages for EDs, NEDs and Senior Management, and recommend them to the Board for adoption. No Director shall participate or vote on the deliberations and decisions concerning his/her own remuneration.

The Board is free to seek to improve one or more aspects of the remuneration packages and measure the progress accordingly. On this, the Board may seek professional advice from outside sources to assist the Board in formulating an attractive compensation and benefits package that aims to attract, retain and motivate talents.

Disclosure of Directors’ remuneration shall be made in the corporate governance report/ corporate governance overview statement in the Company’s annual report. Such a report/ statement shall include details of the Directors’ remuneration in accordance with the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad.

The Remuneration Committee should conduct a periodic review of the criteria to be used in recommending the remuneration package and will be amended as appropriate to align with the current market practices and requirements of the MCCG. Any requirement for amendment shall be deliberated by the Remuneration Committee, and any recommendation for revisions shall be presented to the Board for approval. The latest copy of this policy shall be made available on the Company’s website.