TERMS OF REFERENCE OF
THE NOMINATION AND REMUNERATION COMMITTEE

1. OBJECTIVE

The primary objectives of the Nomination and Remuneration Committee (“Committee”) are: –

to establish a documented, formal and transparent procedure to support and advise the Board of Directors (“Board“) in fulfilling their responsibilities in overseeing the selection and assessment of the performance of the Directors and senior management of CUCKOO International (MAL) Berhad (“the Company”) and its subsidiaries (“Group”) on an on-going basis; and
to establish a documented, formal and transparent procedure to support and advise the Board in developing and reviewing the remuneration framework, policy and procedures for the Directors and senior management of the Company.

2. COMPOSITION

The members of the Committee shall be appointed by the Board from amongst themselves and shall fulfill the following requirements:

the Committee shall comprise of at least three members;
the Comittee shall comprise solely of independent directors;
the Chairman of the Commitee shall not be the Chairman of the Board;
the Chairman of the Committee must be an independent director, to be elected among the members of the Committee;
no alternate director shall be appointed as a member of the Committee.

The term of office and performance of the Committee and each of its members shall be reviewed by the Board annually to determine whether the members have carried out their duties in accordance with this Terms of Reference.

If a member of the Committee resigns or for any other reason ceases to be a member with the result that the number of members is reduced to below three, the Board shall, within three months from the date of that event, appoint such number of new members as may be required to make up the minimum number of three members.

3. AUTHORITY

The Committee is authorized by the Board and at the expense of the Group to perform the following:

to seek any information it requires from the management in order to perform its duties;
to call for any appropriate persons to be in attendance for discussion and proposal on any matters within the scope of his/her responsibilities as necessary;
to obtain, at the Company’s expense, external legal or other professional advice on any matters within this Terms of Reference including engaging independent experts to conduct the evaluation of the effectiveness of the Board, its committees and individual directors, if deemed necessary at least every three (3) years;
to deliberate and approve matters within its primary duties and responsibilities as set out in this Terms of Reference;
to be entitled to use a variety of approaches and independent sources to ensure that it is able to identify suitable qualified candidates. This may include sourcing from a Directors’ registry and open advertisements or the use of independent search firms, if so required. The Company is discouraged from appointing an active politician or a Member of Parliament, State Assemblyman or holds a position at the Supreme Council, or division level in a political party as a director on its Board; and

4. DUTIES AND RESPONSIBILITIES

In fulfilling the Company’s primary objectives, the Committee shall undertake, amongst others, the following duties and responsibilities:

Nomination matters:

to establish an appropriate (fit and proper) selection criteria and process, recruitment process and to recommend to the Board, candidates for all directorships of the Company and members of the relevant Board committees;
to formulate and undertake an annual review of the Board and senior management succession plans, taking into consideration, the present size, structure and composition of the Board and senior management as well as the required mix of skills, knowledge, experience, diversity and competency as required by the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirement”), and make recommendations to the Board with regard to any adjustments that are deemed necessary;
to facilitate an annual evaluation on the effectiveness of the Board as a whole, the various Board Committees and each individual Director’s contribution to the effectiveness of the decision-making process of the Board;
to be responsible for identifying, making recommendations and to seek approval from the Board on new candidates for election / appointment to the Board or to fill board vacancies as and when they arise, based on the fit and proper policy of the Company, and to utilise independent sources to identify suitably qualified candidates. If the selection of candidates was solely based on recommendations made by the existing Directors, senior management or major shareholders, the Committee should explain why these sources suffice and other sources were not used;
to recommend to the Board concerning the re-election / re-appointment of Directors pursuant to the provisions in the Company’s Constitution and according to the satisfactory evaluation of the Director’s performance and contribution to the Board;
to ensure that the composition of the Board is refreshed periodically;
to determine the process and checklist required for the identification of suitable candidates, ensuring that an appropriate review is undertaken to ensure the requirements and qualifications of the candidate nominated is based on a prescribed set of criteria comprising but not limited to the following:-
1. Skills, knowledge, expertise, experience, age, cultural background and gender;
2. Professionalism;
3. Integrity;
4. Existing number of directorships held;
5. Confirmation of not being an undischarged bankrupt or involved in any court proceedings in connection with the promotion, formation or management of a corporation or involving fraud or dishonesty punishable on conviction with imprisonment or subject to any investigation by any regulatory authority under any legislation; and
6. In the case of candidates being considered for the position of Independent Director, that such potential candidates have the ability to discharge such responsibilities/functions as expected from Independent Directors. Amongst others, the potential candidates must fulfil the criteria used in the definition of “Independent Directors” prescribed by the Listing Requirements and be able to bring independent and objective judgement to the Board.
Where required, the members of the Committee shall meet up with potential Director candidates to conduct a suitability assessment.

(Note: The Group practices non-discrimination in any form whether based on age, gender, ethnicity or religion throughout the organisation and this includes the selection of directors).
to integrate environmental, social and governance (“ESG”) considerations into nomination processes such as training criteria and ESG experience in order to recruit directors that will bring ESG expertise to the Board;
to review on an annual basis, the length of service of each Independent Director. The tenure of an Independent Director shall not exceed a term limit of nine years without further extension and such Independent Director will not continue to serve on the Board (whether as a Non-Independent Director or otherwise);
to undertake an annual review of the training programmes attended by the Directors for each financial year as well as to identify the training programmes required by the Directors to effectively discharge their duties and to keep them abreast with industry developments and trends;
to provide shareholders of the Company with the information they require to make an informed decision on the appointment and/or re-appointment of a Director. The information should be included in the notes accompanying the notice of the general meeting; and
to provide a report summarising its activities for the year in compliance with the Malaysian Code on Corporate Governance (“MCCG”), Listing Requirements and any relevant regulations. The report can be incorporated into the corporate governance statement in the annual report or included as a separate report.

The Chairman of the Committee shall lead the succession planning and appointment of directors, and oversee the development of a diverse pipeline for the Board and senior management succession, including the future Chairman, Deputy Chairman, Executive Directors and Chief Executive Officer, and lead the annual review of board effectiveness, ensuring that the performance of each individual director and Chairman of the Board are independently assessed.

Remuneration matters:

To ensure the establishment of a formal and transparent procedure for developing policies, strategies, and frameworks for the remuneration of executive Directors and senior management, encouraging actions that enhance the Company’s long-term objectives and value, and to develop and administer a fair and transparent remuneration policy and procedure that considers the demands, complexities, and performance of the Company in managing material sustainability risks and opportunities, as well as the required skills and experience. This includes reviewing and recommending matters relating to the remuneration of the Board and senior management, ensuring that remuneration policies and practices reflect the different roles and responsibilities of each Director and senior management based on merit, qualification, and competence, while considering the Company’s business strategy, long-term objectives, operating results, individual performance, and comparable market statistics.
The Board determines who makes up senior management and if any other group of employees should be covered by the remuneration policy and procedures. The policy and procedure shall be reviewed periodically to ensure relevance to the Group and made available on the Company’s website;
to implement the remuneration policies and procedures including reviewing and recommending to the Board on the remuneration packages of the Directors and senior management personnel in all forms, particularly on whether the remuneration remains appropriate to the contribution of each of the Directors and senior management personnel, by taking into account the level of expertise, commitment and responsibilities undertaken, with or without other independent professional advice or other outside advice, with reference to the Company’s remuneration policy and procedure;
to ensure fees and benefits payable to Directors, and any compensation for loss of employment of Executive Directors are approved by shareholders at general meetings;
to ensure that the remuneration package should be structured such that it is competitive and balance which should be sufficient to attract and retain all calibre of executive Directors and senior management;
when recommending the fee and other benefits for the independent Directors, the Committee shall ensure it does not conflict with the independent Directors’ obligations to bring objectivity and independent judgment on matters discussed at Board meetings;
to establish frequent communication with other board committees to align remuneration policies and procedures to succession plans and talent management of executives to ensure risk outcomes are adequately considered in the design of remuneration policies and procedures;
to provide a detailed disclosure of remuneration for individual Directors and top five senior management, which shall include fees, salary, bonus, benefits in-kind and other emoluments; and
to ensure that the Committee provides dedicated attention to discuss on matters relating to remuneration of directors and senior management, separate from those matters discussed under nomination matters.

5. MEETINGS OF THE COMMITTEE

The Committee shall meet at least once a year and as frequently as may be required. Additional meetings may be conducted if required.

In the event the elected Chairman is not able to attend and/or absent for a meeting, a member of the Committee shall be nominated as Chairman for the meeting. The nominated Chairman shall be an Independent Non-Executive Director.

Subject to the notice and quorum requirements as provided in the Terms of Reference, meetings of the Committee may be held and conducted through the telephone or any communication equipment which allows all persons entitled to receive notice and participate in the meeting. A person so participating shall be deemed to be present in person at the meeting venue duly convened and held and shall be entitled to vote and be counted in a quorum accordingly.

6. QUORUM

The quorum for a meeting of the Committee shall consist of two members, majority of members’ present must be Independent Directors.

7. NOTICE OF COMMITTEE MEETINGS

Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded and make available to each member of the committee, any other person required to attend and all other non-executive directors, no later than five days before the date of the meeting. Notice of the meeting shall be served either personally or by email, post or courier to the address provided by the required attendees. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.

8. SECRETARY AND MINUTES

The Company Secretary or his nominee or such other persons authorised by the Board shall act as the Secretary of the Committee. The Company Secretary shall record, prepare, and circulate the minutes of the meetings of the Committee in a timely manner and ensure that the minutes are properly kept and produced for inspection if required.

9. CIRCULAR RESOLUTION

A resolution in writing, signed or approved by letter, telegram, telex, telefax or electronic means by a majority of the Committee members for the time being entitled to receive notice of a meeting of the Committee, shall be as valid and effectual as if it had been passed at a meeting of the Committee duly convened and held. Any such resolution may consist of several documents in like form, each signed by one or more of the members of the Committee and shall be forwarded or otherwise delivered to the Company Secretary without delay and shall be recorded by the Company Secretary in the minutes book.

10. PUBLISHED AT THE WEBSITE

The written terms of reference of the Committee dealing with its authority and scope of duties must include the selection and assessment of directors, and such other information is made available on the Company’s website.

11. REVIEW OF THE TERMS OF REFERENCE

The Board shall review and assess the relevance of this Terms of Reference on a periodic basis or at a more frequent intervals as circumstances dictate to ensure that it remains consistent with the Committee’s objectives and responsibilities and aligned with the MCCG, Listing Requirements or any other regulatory requirements. The changes to this Term of Reference shall be subject to the approval of the Board.

Endorsed by the Board on: 14 August 2024

TERMS OF REFERENCE OF THE NOMINATION AND REMUNERATION COMMITTEE

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TERMS OF REFERENCE OF
THE NOMINATION AND REMUNERATION COMMITTEE