1. INTRODUCTION

The Board of Directors (“Board”) of DKLS Industries Berhad (“Company”) values the contributions of the Directors and Senior Management of the Company and its subsidiaries (collectively, the “Group”) and is determined to establish a fair and transparent procedure for developing policy on the remuneration of the directors and senior management benchmarked against industry standards and market competitiveness in light of the performance of the Group in the industry.

2. OBJECTIVE

This Remuneration Policy (“Policy”) for Directors and Senior Management sets out guiding principles in determining the remuneration of Directors and Senior Management within the Group. It aims to attract and retain talents to ensure that the Group is spearheaded by a team comprising of high caliber and experienced individuals to achieve the Group’s long term goals.

3. APPLICATION AND GOVERNANCE OF POLICY

• The Nomination and Remuneration Committee (“NRC”) should establish a clear, fair and transparent remuneration policy and procedures for the Directors and Senior Management and assist the Board in implementing such policies and procedures including reviewing and recommending matters relating to the remuneration of Directors and Senior Management.
• Executive Directors do not form part of the composition of the NRC. As such, Executive Directors play no part in the deliberation or decision-making of their own remuneration matters but may attend the NRC meetings at the invitation of the Chairman of the NRC, if their presence is required.

4. INTERPRETATION AND ROLES

5. REMUNERATION PACKAGE

The composition of the Directors’ and Senior Management’s remuneration are as follows:

1. Fixed Salaries and Benefits For Executive Directors and Senior Management
• Salaries of Executive Directors and Senior Management are recommended by the NRC to the Board for approval, with reference to market benchmarks of similar industry and roles of comparable level at the point of appointment, whilst taking into account the following factors:
• Experience, Qualification and Knowledge
• Skills Set and Expertise
• Scope of duty and responsibilities
• Common benefits such as annual leave, employer’s contribution to EPF and appropriate insurance coverage are offered to Executive Directors and Senior Management who are eligible for the same. Other benefits such as motor vehicle related benefits are offered on a case to case basis if considered appropriate for the individual’s role.
• Fixed salaries of Executive Directors shall not include a commission on or percentage of turnover.
• Fixed salaries are to be paid monthly.
• The remuneration package of Executive Directors are reviewed by the NRC and recommended to the Board for approval at the end of each financial year.


2. Annual Performance Bonus
• Annual Performance Bonus may be offered to Executive Directors and Senior Management at the Company’s discretion to support the delivery of short term operational, financial and strategic goals.
• Annual Performance Bonus offered to Executive Directors is subject to review by the NRC and recommended to the Board for approval, which will be determined based on the Executive Director’s performance measured through Key Performance Indicators (KPI).
• The performance evaluation measured against KPI is not exhaustive and other determining factors and circumstances may be considered if deemed necessary and appropriate.
• The bonus levels and the appropriateness of performance review measures and guiding factors for Executive Directors are reviewed and recommended to the Board for approval by the NRC annually to ensure they continue to support the strategy and long term objectives of the Company.


3. Director's Fees and Benefits for Non-Executive Directors
• Non- Executive Directors receive directors’ fees payable in arrears by monthly installments and benefits such as meeting allowance for attendance of meetings, which are presented to the shareholders at the Annual General Meeting for their approval. Directors who are shareholders shall abstain from voting at the Annual General Meeting to approve their fees.
• Fees payable to Non-Executive Directors shall be by a fixed sum, and not by a commission on or percentage of profits or turnover .

6. REMUNERATION PROCEDURES

The remuneration package for Senior Management will be reviewed by the NRC and recommended to the Board for approval at the point of their appointment.

The NRC shall review annually the remuneration of the Directors in line with this Policy and submit its recommendations to the Board.

The Board shall recommend the Directors’ fees and other benefits payable to Non-Executive Directors to the shareholders for approval at the Annual General Meeting.

7. REVIEW AND ACCESS TO POLICY

• This Policy will be reviewed as and when necessary by the NRC and recommended for Board approval from time to time to ensure that it remains current, equitable, competitive, relevant and in line with market and industry practices.
• This policy is developed in line with the Malaysian Code on Corporate Governance requirements and will be made available on the Company website.