SECTION 1: NC COMPOSITION

Section 1: NC Composition | 3 Committee is not diluted.The Board should also explain why it has combined these functions in its corporate governance disclosure, and the arrangements made to ensure that the responsibilities of the Committees continue to be carried out effectively. 1.2.3 An NC should have at least three members, the majority of whom, including the Chairman, should be Independent Directors (IDs). The Lead ID, if any, should also be a member of the NC 2 . The designations and roles of members should be disclosed in the company’s annual report 3 . 1.2.4 It is preferable that other Committee members, who are not IDs, are Non-Independent Non-Executive Directors (NI-NEDs). This is to ensure that the NC avoids any potential conflicts of interest. 1.2.5 The Board appoints members to the NC, and may vest the NC with the authority to make certain decisions as set out in the Terms of Reference. However, the Board cannot abdicate its own responsibilities, and any delegation of authority should be disclosed 4 . 1.2.6 It is important that any delegation of authority by the Board to the NC is in alignment with the company’s constitution. Without having to obtain further Board approval, the NC should have adequate resources and authority to discharge its duties and responsibilities, including the selection and appointment of independent legal advisers, experts or consultants, whose fees, if any, are to be borne by the company 5 . To discharge its responsibilities, the NC should, insofar as legally permissible, have full access to any necessary information from within or outside the company 6 . In obtaining the information, the NC needs to ensure that the use of the information is in 2 Provision 4.2 of the Code. 3 MR 1207(10B) and CR 1204(10B). 4 Provision 1.4 of the Code. 5 Provision 1.7 of the Code. 6 Provision 1.7 of the Code. 1A-2