Provision 6.3 of the Code: RC to consider and ensure all aspects of remuneration are fair The RC considers all aspects of remuneration (including Director’s fees, salaries, allowances, bonuses, options, share-based incentives and awards, benefits in kind and termination payments) in the review of remuneration packages for the Directors and executive officers with an aim to be fair and to avoid rewarding poor performance, before making any recommendation to the Board. The Independent Directors receive Directors’ fees in accordance with their contributions, taking into consideration factors such as effort and time spent and their responsibilities. The Directors’ fees are recommended by the RC and endorsed by the Board for approval by shareholders of the Company at the annual general meetings. Except as disclosed in this Annual Report, the Independent Directors did not receive any other remuneration from the Company. The terms of employment for the Managing Director, such as monthly base salary, annual wage supplement and benefits that commensurate with his position, are stipulated in the service agreement (“Service Agreement”). The Managing Director also participates in a profit-sharing scheme that is pegged to the Group’s profitability. The Managing Director does not receive Directors’ fees and there are no post-retirement and severance benefits except the common practice of giving notice or salary in lieu of notice in the event of termination. The Service Agreement is valid for 3 years. Provision 6.4 of the Code: Expert advice on remuneration The members of the RC are familiar with executive compensation matters as they have prior experience in managing businesses and/ or are holding other directorships. The RC has access to expert advice regarding executive compensation matters, if required. The Board did not engage any external remuneration consultant to advise on remuneration matters for FY 2025. Level and Mix of Remuneration Principle 7: The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company. Provision 7.1 and 7.3 of the Code: Remuneration of Executive Directors and key management personnel are appropriately structured to link rewards to performance In setting remuneration packages, the Company takes into account pay and employment conditions within the same industry and in comparable companies, as well as the Group’s relative performance and the performance of the Managing Director and key management personnel. The remuneration package is designed to allow the Company to better align the interests of the Managing Director and key management personnel with those of shareholders and link rewards to corporate and individual performance. The Company also ensures that the remuneration is appropriate to attract, retain and motivate the Directors to provide good stewardship of the Company and key management personnel to successfully manage the Company for the long term. Remuneration for the Managing Director comprises a basic salary component and a variable component that is pegged to the performance of the Group as a whole. Having reviewed the variable component in the remuneration packages of the Managing Director and key management personnel, the RC is of the view that it is not necessary to institute contractual provisions to reclaim incentive components of remuneration from the Managing Director and key management personnel in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial losses to the Group. The Company believes that there are alternative legal avenues to these specific contractual provisions that will enable the Company to recover financial losses arising from such exceptional events from the Managing Director and key management personnel. The Company does not offer any employee share scheme. The RC may consider other forms of long-term incentive schemes for key management personnel when necessary. MEGACHEM LIMITED ANNUAL REPORT 2025 62 CORPORATE GOVERNANCE REPORT
RkJQdWJsaXNoZXIy NTM2MDQ5