Senior Management’s Remuneration There is a framework in place which defines the IHH Remuneration philosophy and includes compensation tools such as pay ranges (based on market data) of different levels of Senior Management according to job grade structure and location. A review of the job grade structure has been undertaken to enable consistent adoption and application across the Group. The Company’s remuneration policy is based on competitive and market-aligned guidelines, taking into account the different levels of Senior Management according to roles, responsibilities and levels of accountability. The Board determines all bonuses and share-based payments, where applicable, at the recommendation of the NRC. This is done after reviewing the individual performance appraisals and achievements of the key performance indicators of the Group’s Balanced Scorecard, which was approved by the Board. This ensures that the remuneration packages for our Senior Management are fair, equitable, competitive and commensurate with their individual performance, taking the Group’s performance into consideration. Principle B – Effective Audit and Risk Management 1. Audit Committee The AC plays a crucial role in assisting the Board to fulfil its oversight responsibilities through review of financial information and provides an unbiased review of the effectiveness and efficiency of the Group’s internal controls. Besides these, the AC also reviews and reports to the Board, any COI situation that arose, persist or may arise together with the measures taken to resolve, eliminate or mitigate such conflicts. The AC comprises four INEDs from diverse backgrounds with extensive experience in healthcare, banking, business strategy, risk management, legal, cybersecurity and corporate governance. All the AC members are financially literate, competent and are able to understand matters under the purview of the AC including the financial reporting process. Review of External Auditors In line with market practice, the Company performs a major review of our external auditors every five years, except for under certain circumstances as determined by the Board. Management assesses the industry expertise and experiences, technical competencies, Group coordination and approach to the Group audit process, audit quality, transparency and professional conduct, track records, fees, quality of audit findings, other non-services provided and audit firm’s independence and subsequently recommends their appointment or reappointment to the AC for consideration. As per the Policy in the Independence of Auditors and the Efficiency of Audits, which was revised and approved by the Board in March 2023, the permitted non-audit services for the external auditors are confined to those services that will not undermine the independence of the auditors. There is a prescribed limit for the total remuneration for non-audit services against the total fees of the external auditors in each year to avoid creating a condition of financial dependency and self-interest which will threaten the independence of auditors. On an annual basis, Management will review the service levels of the auditors, agree on amendments to their scope of work to address new developments in the business and recommend their reappointment to the AC. The annual evaluation of the external auditors is also carried out via evaluation forms by the GCEO, Group Chief Financial Officer, Group Head, Internal Audit and the AC. The evaluated areas include objectivity and independence, technical competence and ability, understanding of IHH Group’s businesses and industry, resources assigned and capability of the engagement partner and engagement team, as well as the ability to provide constructive observations, recognise implications and make recommendations in areas needing improvement, particularly with respect to the organisation’s internal control system over financial reporting. The AC and Management also took into consideration the information presented in the external auditors’ Annual Transparency Report when evaluating the external auditors. Oversight of Financial Reporting The Board, assisted by the AC, oversees the financial reporting processes and the quality of the financial reporting by the Group. The AC reviews the quarterly financial results and audited financial statements which are then approved by the Board before their release to Bursa Securities and Singapore Exchange Securities Trading Limited (SGX). Review of Conflict of Interest The AC reviews and reports to the Board, any COI situation that arose, persist or may arise together with the measures taken to resolve, eliminate or mitigate such conflicts in accordance with the MMLR, Bursa Securities’ Guidance on COI (ICN 1/2023) as well as IHH’s COI Policy. On a quarterly basis, the AC reviews the COI declarations received from the Directors and key senior management (KSM) and ensures that appropriate measures have been taken to mitigate the conflicts. The Directors and KSM would provide periodic disclosure to ensure that the COI has been declared and reviewed. At the employees’ level, the COI is governed by the Company’s Code of Conduct which is administered by the Human Resources department. Please refer to the following reports/ statements as contained in this Annual Report for further details: • Directors’ Responsibility Statement for the audited financial statements of the Company and the Group on page 124; • Company and the Group financial statements for financial year ended 31 December 2023 on pages 126 to 248; and • AC Report on pages 106 to 108. Annual Report 2023 97
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