BOARD MATTERS

The Board’s Conduct of its Affairs

Principle 1: The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

The Board supervises the management of the business and the affairs of the Company and the Group. Apart from its fiduciary duties and statutory responsibilities, it also focuses on formulating the strategic direction and policies of the Company and the Group, paying particular attention to the growth of the Group and its financial performance. It has delegated the formulation of business policies and day-to-day management to the Executive Directors.

The principal functions of the Board are to:

1. provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human resources are in place for the company to meet its objective
2. establish a framework of prudent and effective controls which enables risks such as financial, operational, information technology and compliance to be assessed and managed, including safeguarding of shareholders’ interests and the company’s assets;
3. review management performance;
4. identify the key stakeholder groups and recognise that their perceptions affect the Company’s reputation;
5. set the Company’s values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met; and
6. consider sustainability issues, e.g. environmental and social factors, as part of its strategic formulation.

The Board meets at least twice a year to review and deliberate on the key activities and business strategies of the Group, including reviewing and approving acquisitions and financial performance, and to endorse the release of the interim and annual results. Ad hoc meetings are held as and when circumstances require, such as to address significant transactions or issues. Where physical meetings are not possible, timely communication with members of the Board and Board Committees can be achieved through electronic means and circulation of written resolutions for approval by the Board or relevant Board Committees. The Company’s Bye-Laws provides for Directors to participate in Board by means of teleconference, video-conferencing and visual equipment

To assist the Board in fulfilling its responsibilities, the Management provides the Board with management reports containing complete, adequate and timely information prior to Board meetings and as and when the need arises. Papers containing relevant background or explanatory information required to support the decision-making process, are prepared for each Board meeting and are normally circulated in advance of the meeting.

The Board is also provided with updates on the relevant new laws, regulations and changing commercial risks in the Company’s operating environment. Orientation to the Company’s business strategies and operations is conducted as and when required.

To assist in the efficient implementation and execution of its responsibilities, the Board has established an Audit Committee, a Nominating Committee and a Remuneration Committee. specific responsibilities, which are outlined in the respective Terms of Reference, have been delegated to each of the committees. Each Board Committee will report to the Board and makes its recommendations to the Board on matters under its purview. The Board accepts that while these Committees have the authority to examine particular issues and will report to the Board their decisions and recommendations, the ultimate responsibility for the final decision on all matters lies with the entire Board.

The Board through the Nominating Committee ensures that it recruits to the Board only individuals of sufficient calibre, knowledge and experience to fulfil the duties of a Director appropriately. Newly appointed directors are briefed on the Group’s business activities and governance practices and provided with information on their duties and obligations as a director under the Bermuda law. A formal letter of appointment will also be sent to any newly appointed Director setting out his/her duties and obligations upon his/her appointment.

For newly appointed Director who does not have prior experience as a director of a public listed company in Singapore, he/she will attend relevant training courses organised by the Singapore Institute of Directors as required under Rule 210(5)(a) of the Listing Manual and in accordance with Practice Note 2.3 as prescribed by the SGX-ST, as well as other courses relating to accounting, legal and industry-specific knowledge, where appropriate, organised by other training institutions, in connection with their duties, and such training will be funded by the Company.

There was no new Director appointed during FY2023.

Regular training, particularly on risk management, corporate governance and key changes in the relevant regulatory requirements and financial reporting standards, will be arranged and funded by the Company for all Directors, from time to time. During FY2023, Directors are provided with briefings and updates on (i) the developments in financial reporting and governance standards; (ii) changes in the relevant laws and regulations pertaining to the Group’s business and changing commercial risks and business conditions of the Group by the Management during the Board Committee meetings; and (iii) changes to the Listing Manual of the SGX-ST by the Company Secretary, so as to enable them to make well-informed decisions and to properly discharge their duties as the Board or Board Committee members.

During FY2023, the number of meetings held by the Board and its committees and the details of the attendances are as follows:

Notes: *- by invitation

Key matters that are specifi cally reserved for the Board’s consideration and decision include, but are not limited to, corporate planning, material acquisitions and disposals of assets, corporate or fi nancial restructuring, share issuances, formulation of any dividend policy or the change of such dividend policy, declaration of dividends and determining the remuneration policy for the Directors.

All Directors have separate and independent access to senior management and to the Company Secretary. The Company Secretary or his representatives administer, attend, and prepare minutes of the Board meetings, and assist the Chairman in ensuring that the Board procedures are followed and reviewed so that the Board functions effectively. The Company Secretary or his representatives also advise the Board on governance matters, and assist the Board on compliance with the Company’s Bye-Laws and relevant rules and regulations, including requirements of the Listing Manual of the SGX-ST.

The appointment and the removal of the Company Secretary is a matter for consideration for the Board as a whole

The Board, in the furtherance of their duties, may either individually or as a group, to take independent professional advice at the expense of the Company.

Board Composition and Guidance

Principle 2: The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.

As at FY2023 the Board comprised of two (2) Executive Directors and three (3) Independent Directors.

Provision 2.2 of the Code recommends that Independent Directors make up a majority of the Board where the Chairman is not independent. In the case of the Company, the Chairman is not independent as he is an Executive Director. In complying with Provision 2.2. of the Code, Independent Directors make up a majority of the Board and the majority of each of the Board Committees. There are sufficient safeguards and checks to ensure that the process of decision-making by the Board is independent and based on collective decisions without any individual or small group of individuals exercising any considerable concentration of power or influence.

Provision 2.3 of the Code recommends that Non-Executive Directors make up majority of the Board. The Company complies with Provision 2.3 of the Code as the Non-Executive Directors, who are also Independent Directors, chair the Board committees, are independent and are able to provide the appropriate level of independence and diversity of thought and background and to make decisions in the best interests of the Company. The Board has always discussed important issues robustly and have always been able to reach a consensus on the votes without having to rely on any majority votes to decide nor having an individual or small group of individuals dominate the Board’s decision-making process.

A brief profi le of each Director is presented in the profi le of Board of Directors section of this Annual Report and their shareholdings in the Company and its subsidiaries as at 31 March 2023 are disclosed in the Directors’ Statement of the Audited Financial Statements for the FY2023.

The Company recognises the importance and benefits of diversity in all ways, including gender, age, background and other distinguishing factors/qualities. Diversity on the Board is an essential element to support the attainment of the Company’s strategic objectives for sustainable and balanced development.

The Board is committed to ensuring diversity on the Board and the Board’s policy in identifying director nominees is primarily to have an appropriate mix of members with complementary skills, experience, core competencies of accounting or fi nance, legal and regulatory, business or management experience, industry knowledge and strategic planning, regardless of gender to avoid groupthink and foster constructive debate.

As at the date of this Report, the Company has formalised and maintained a Board Diversity Policy that addresses diversity in terms of experience, skills, gender, age, tenure, and qualities, as well as any other relevant aspects of diversity. The Board Diversity Policy also sets out the approach which the Company takes towards diversity on its Board. The Company believes in diversity and values the benefits diversity can bring to the Board in its deliberations and the Board’s effectiveness – in particular, it believes that a balance and mix of skills, experiences and individual attributes of Board members which shape the composition and promote the effectiveness of the Board as a whole and that of the Board committees, will support the Company’s achievement of strategic objectives and long-term sustainable development and success.

The Board observes and applies the Board Diversity Policy to ensure that the Board will have an appropriate level of diversity of thought and background in its composition to enable it to make decisions in the best interests of the Company. While it is important to promote boardroom diversity in terms of gender, ethnicity and age, the Board believes that the normal selection criteria based on independence, skills, knowledge and experience should remain a priority.

The Nominating Committee (“NC”) will review the composition of the Board on an annual basis to ensure compliance with the Code, and that the Board has the appropriate balance and diversity of skills, experience, gender, age, and knowledge. The Board collectively possesses the necessary core competencies for eff ective functioning and decisionmaking.

The Board’s objective in identifying director nominees is primarily to have an appropriate mix of members with complementary skills, core competencies and experience for the Company. The Company continues to be receptive to achieving greater gender diversity and representation on the Board to complement the core competencies of the Board as a whole. The Board will seek to incorporate diversity aspects as and when the opportunity arises, instead of adhering to a fi xed timeline for diversity targets. The Board will ensure that it has the flexibility to improve its diversity without compromising board efficiency. The NC will deliberately determine, from time to time, the results of its review on rejuvenating and refreshing the Board composition in its recommendation for the appointment of new directors and/or the re-appointment of incumbent directors bearing in mind the salient factors set out under the provisions in the Code as well as all other relevant circumstances.

The Board has examined its current size and is of the view that it is an appropriate size for effective decisionmaking, taking into account the scope and nature of the operations of the Company. The current Board composition provides a diversity of skills, experience and knowledge to the Company including accounting, finance, strategic planning, investment, business management and administration, industry knowledge, engineering technology and economics.

In determining the independence of the Independent Directors, the Board takes into account the existence of relationships or circumstances, including those identified by the Code and the Listing Manual of the SGX-ST that are relevant in its determination as to whether a Director is independent. The NC has reviewed and confirmed the independence of the Independent Directors in accordance with the Code and the Listing Manual of the SGX-ST.

The Board assesses the independence of each Director in accordance with the guidance provided in Code 2018 as well as Rule 210(5)(d) of the Listing Rules. An Independent Director is one who is independent in conduct, character and judgement and has no relationship with the Company, its related corporations, its substantial shareholders or its Officers that could interfere, or be reasonably perceived to interfere, with the exercise of his/her independent business judgement in the best interests of the Company.

On an annual basis, each Independent Director is required to complete a “confirmation of Independence” form to confirm his independence. The said form was drawn up based on the definitions and guidelines set forth in the Code. The Directors are required to disclose to the Board any such relationship as and when it arises and the Board will state the reasons if it determines that a director is independent notwithstanding the existence of a relationship or circumstances which may appear relevant to the Board’s determination.

The NC will also examine the different relationships identified by Code that might impair each Independent Director’s independence and objectivity and concluded that all the Independent Directors are able to exercise independent business judgement in the best interests of the Company and its shareholders.

The Independent Directors have confirmed their independence in accordance with the Code and Rule 210(5)(d) of the Listing Rules.

As at the date of this Report, the NC has reviewed the independence status of the Independent Directors and is satisfied that Mr Koji Miura, Mr Chan Ching Chuen and Mr Stephen Ho ChiMing are independent in accordance with the Provision 2.1 of the Code and Rule 210(5)(d) of the Listing Rules. The Independent Directors will meet up when necessary to discuss concerns or matters such as the effectiveness of management, without the presence of Management. During FY2023, the Independent Directors met once in the absence of key management personnel.

During FY2023, the Independent Directors who have served on the Board for more than nine years are Mr Koji Miura and Mr Chan Ching Chuen. In assessing the independence of these Independent Directors, the NC, with the concurrence of the Board, is of the view that one should consider the substance of their professionalism, integrity and the objectivity and not merely based on the number of years that they have served on the Board.

In view of this, having considered the above and weighing the need for progressive refreshing of the Board, the NC and the Board have determined that during FY2023, Mr Koji Miura and Mr Chan Ching Chuen’s tenure in offi ce have not aff ected their independence or ability to bring about independent and considered judgement in the discharge of their duties as members of the Board. They had provided a strong independent element on the Board, being free from any business or other relationship, which could materially interfere with the exercise of their judgement. These Directors continue to provide stability to the Board and the Company has benefi ted greatly from the presence of individuals who are specialists in their own fi eld. Furthermore, their length of service on the Board has not only allowed them to gain valuable insight into the Group, its business, markets, and industry, but has also given them the opportunity to bring the full breadth and depth of their business experience to the Company.

On 11 January 2023, Singapore Exchange Regulation (SGX RegCo) had announced that it will limit to nine (9) years the tenure of independent directors serving on the board of issuers listed on SGX-ST. The new requirements impose a hard tenure limit for Independent Directors of nine years, beyond which such directors will no longer be considered independent. However, such directors may continue to be considered independent until the conclusion of the next Annual General Meeting of the issuer. To provide issuers suffi cient time for board appointments, SGX RegCo has established transitional arrangements and will implement the nine-year limit at the issuer’s AGMs for the financial year ending on or after 31 December 2023. During the transitional period, long-serving Independent Directors whose tenure exceeds the nine-year limit may continue to be considered independent until the conclusion of the next AGM of the issuer for the fi nancial year ending on or after 31 December 2023.

As at the date of this Report, Mr Koji Miura and Mr Chan Ching Chuen have served the Board beyond nine (9) years since their appointments, The Board takes note of the requirements of the SGX-ST and together with the NC, are currently in the process of reviewing the Board’s renewal and composition, which will be carried out in stages. The Board has commenced the process of identifying suitable candidate(s) and will make the appropriate announcement(s) to update the shareholders on the Board renewal and re-composition of the Board and Board Committees in due course.

Chairman and Chief Executive Officer (“CEO”)

Principle 3: There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.

Mr Lee Wan Lik (“Mr Lee”) is the Group’s Executive Chairman and Mr Michael Yap Kiam Siew (“Mr Yap”) is the CEO of the Company. Mr Lee and Mr Yap are not related to each other. There is a clear division of responsibilities between the Executive Chairman and the CEO to ensure that there is an appropriate balance of power, accountability and suffi cient capacity of the Board for independent decision-making.

Mr Lee being the Executive Chairman, is responsible for the workings of the Board, ensuring the integrity and eff ectiveness of its governance process. He leads the Board discussion and ensures that Board meetings are convene when necessary and sets the meeting agenda in consultation with the CEO. The Executive Chairman, with the assistance of the CEO, Group Financial Controller and Company Secretary, ensures that Board members are provided with adequate and timely information.

Mr Michael Yap, the CEO is responsible for the business and operational decisions of the Group. He is assisted by the Executive Director and a group of Executive Offi cers in carrying out his executive duties and responsibility in the operation and businesses of the Group.

The Board is satisfied that there is sufficient transparency and accountability in view of the distinction of responsibilities.

Mr Stephen Ho ChiMing is the Lead Independent Director (“Lead ID”) of the Company. Mr Stephen Ho ChiMing is available to shareholders where they have concerns where contact through the normal channels of the Chairman, CEO or Group Financial Controller has failed to resolve or for which such contact is inappropriate. He will also facilitate periodic meetings with the other Independent Directors in board matters, when necessary, and provides feedback to the Executive Chairman after such meeting.

His other specific roles as Lead ID are as follows:

1. act as liaison between the Independent Directors and the Executive Chairman and CEO and lead the Independent Directors to provide non-executive perspectives in circumstances where it would be inappropriate for the Executive Chairman to serve in such capacity and to contribute a balanced viewpoint to the Board;
2. advise the Executive Chairman of the Board as to the quality, quantity and timeliness of the information submitted by Management that is necessary or appropriate for the Independent Directors to effectively and responsibly perform their duties; and
3. assist the Board and Company officers in better ensuring compliance with and implementation of corporate governance.

Board Membership

Principle 4: The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.

As at the date of this Annual Report, the members of the Nominating Committee (“NC”) are as follows:

• Mr Chan Ching Chuen – Chairman
• Mr Stephen Ho ChiMing – Member
• Mr Lee Wan Lik – Member

Majority of the members of the NC including its Chairman are independent.

The NC makes recommendations to the Board on the following matters:

1. to review the structure, size and composition of the Board and the Board Committees;
2. to review board succession plans for directors, in particular, the Chairman and for the CEO;
3. to evaluate the performance of the Board and Board Committees as a whole;
4. to review training and professional development programs for the Board;
5. to make recommendations to the Board on the appointment and re-appointment of directors (including alternate directors, if applicable) including making recommendations on the composition of the Board and the balance between Executive and Non-Executive Directors appointed to the Board;
6. to review and assess the independence of each Director; and
7. to decide whether or not a Director is able to and has been adequately carrying out his duties as a Director of the Company, particularly when he has multiple board representations and/or a conflict of interest.

The NC has adopted the Code’s definition and criteria for independence. Each Independent Director is required to submit a Confirmation of Independence Form annually for the NC’s review.

During FY2023, the NC has reviewed the independence of the Independent Directors namely Mr Koji Miura, Mr Chan Ching Chuen and Mr Stephen Ho ChiMing according to the criteria set out in the Code. These Directors have demonstrated strong independence in character and judgement over the years in discharging their duties and responsibilities as Independent Directors. They continue to express their individual viewpoints, debate on issues, objectively scrutinise and challenge Management’s proposals as well as participate in discussions on business activities and transactions involving confl icts of interests and other complexities.

Having considered the above, the NC is of the view that all the Independent Directors are independent. All three directors have abstained from any discussion and recommendation in respect of their own independence.

None of the above three Independent Directors are related to, and do not have any relationship with, the Company, its related corporations, its substantial shareholders, or its officers or are in any circumstances that could interfere, or be reasonably perceived to be interfered, with the exercise of their independence business judgement with a view to the best interests of the Company. The Board has concurred with the NC’s assessment.

Subject to the Board’s approval, the NC will also decide on how the Board’s performance is to be evaluated and propose objective performance criteria which are dependent on how the Board has enhanced long-term shareholder value. Appointments to the Board are made on merit and against objective performance criteria.

To help build a culture of performance and stewardship amongst its Board members, the Group ensures that all the Directors step down and offer themselves for re-election at regular intervals of at least once every three (3) years. The Company’s Bye-Laws provide that at least one-third of the directors for the time being (or if their number is not three or a multiple of three, then the number nearest to but not less than one third) shall retire from office by rotation.

For the forthcoming Annual General Meeting (“AGM”), Mr Lee Wan Lik and Mr Koji Miura are subject to retirement by rotation and eligible for re-election

The NC has recommended for Mr Lee Wan Lik to be nominated for re-election. In making the recommendation, the NC had considered his overall contributions and performance and competencies in fulfi lling his responsibility as Director to the Board. The Board has accepted the NC’s recommendation. Please refer to the notice of AGM for the resolutions put forth in relation to the re- elections and details of the retiring Director including the information required under Rule 720(6) of the Listing Manual, as disclosed in the section on Disclosure of Information on Director’s Seeking Re-election in this corporate governance report.

Mr Koji Miura has indicated to the NC and the Board that he will not be seeking re-election at the AGM in order to facilitate Board renewal in line with the good governance practice and to allow for more time to focus on his other commitments. Mr Koji Miura will retire as an Independent Director of the Company and concurrently relinquish his roles as Chairman/member of the Board Committees of the Company at the conclusion of the AGM.

The Board and the NC are currently in the process of reviewing the Board’s composition and looking to appoint a new Independent Director to fi ll the membership of the Board and Board Committees to ensure compliance with the relevant Listing Rules and the Code, including to meet the requirement of Rule 704(8) of the Listing Rules to fi ll the vacancy in the AC so as to ensure that it comprises not less than three members, within two months, but in any case not later than three months, as well as Provision 4.2 and 6.2 of the Code to fi ll the vacancy in the NC and RC to meet the requirement of a minimum number of three members.

There is no alternate director appointed to the Board as at the date of this Annual Report.

In the selection and nomination for new directors, the NC identifi es the key attributes that an incoming director should have, based on attributes of the existing Board and the requirements of the Group and the salient factors set out in the Board Diversity Policy. After endorsement by the Board of the key attributes, the NC taps on the resources of the directors’ personal contacts for recommendations of potential candidates. The potential candidates will go through a short-listing process. Interviews are then set up with the short-listed candidates for the NC to assess them before a decision is made.

A newly appointed Director will have to submit himself for retirement and election at an AGM immediately following his appointment and thereafter, be subjected to retirement by rotation.

Each member of the NC has abstained from voting on any resolution with respect to the assessment of his own performance for re-nomination as a Director.

The Board has set the maximum number of 10 listed company board representations that any Director of the Company may hold at any one time. All Directors have complied with this requirement. A Director with multiple board representations is expected to ensure that sufficient time and attention is given to the aff airs of the Company. The NC is of the view that the number of directorships a Director can hold and his principal commitments should not be prescriptive as the time commitment for each board membership will vary.

The NC, having considered the confi rmations received from the Independent Directors, is of the view that the other board representations and principal commitments of the Independent Directors do not hinder them from carrying out their duties to the Company. The NC is satisfi ed that sufficient time and attention have been accorded by these Independent Directors to the aff airs of the Company. The Board concurred with the NC’s views.

Please refer to the Profile of Board of Directors as set out on page 8 to 9 of the Annual Report for key information on the Directors.

Board Performance

Principle 5: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.

The NC will assess the effectiveness of the Board and its board committees as a whole.

The NC, in considering the re-appointment of a Director, will evaluate the performance of the Director’s contributions such as his or her attendance record at meetings of the Board and the Board Committees, active participation during these meetings and the quality of his or her contributions. The NC has initiated the assessment of the effectiveness of the Board as a whole on an annual basis. The evaluation of the Board’s performance is conducted by means of a questionnaire which is then collated and the findings analysed and discussed. The results of the Board’s performance assessment are reviewed and circulated to the Board for consideration. Recommendations to further enhance the effectiveness of the Board are implemented as appropriate.

The Board has allocated budgets for directors to attend training and will make recommendations to the Board on the training and professional development programmes for the Board members.

REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 6: The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.

As at the date of this Annual Report, the members of the Remuneration Committee (“RC”) are as follows :

• Mr Stephen Ho ChiMing – Chairman
• Mr Koji Miura – Member
• Mr Chan Ching Chuen – Member

All the RC members including its Chairman are Independent Directors. The RC is responsible for:

The RC is responsible for:

1. reviewing and recommending to the Board a remuneration framework for the Board key management personnel;
2. review and recommending to the Board the specific remuneration package for each Director and each of the key management personnel;
3. considering all aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefi ts-in-kind; and
4. reviewing the Company’s obligations arising in the event of termination of the Executive Directors’ and Key Management Personnel’s contracts of services to ensure that such contracts contain fair and reasonable termination clauses which are not overly generous, with a view to being fair and avoiding the reward of poor performance.

The RC can access to expert advice in the field of Executive compensation outside the Company, as and when required. Such expenses are to be borne by the Company.

The Board has not engaged any external remuneration consultant to advice on the remuneration matters in FY2023.