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 objectives;
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.

During FY2020, there was no new Director appointed to the Board of Directors.

On 20 April 2020, Mr Stephen Ho ChiMing was appointed the new Lead Independent Director of the Company. Mr Stephen Ho ChiMing has no prior experience as a director of a public listed company in Singapore, accordingly, the Company will arrange for Mr Stephen Ho ChiMing to attend the training courses conducted by the Singapore Institute of Directors as prescribed by the SGX-ST.

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 FY2020, 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) the revised Code and 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 Board or Board Committee members

During FY2020, 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 specifically reserved for the Board’s consideration and decision include, but are not limited to, corporate planning, material acquisitions and disposals of assets, corporate or financial restructuring, share issurances, 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 eff ectively. 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.

During FY2020, the Board comprised fi ve (5) members, two (2) of whom are Executive Directors and three are Independent Directors. The Company has complied with provisions 2.2 and 2.3 of the Code, as Non-Executive and Independent Directors make up the majority of the Board.

The Independent Director Mr Michael Yap Kiam Siew was re-designated as an Executive Director and Deputy Board Chairman of the Company on 20 April 2020. Concurrent to this appointment, he had relinquished his positions as the Lead Independent Director, Chairman of the Remuneration Committee and Member of the Audit and Nominating Committees.

With eff ect from the same date, the Company had appointed Mr Stephen Ho ChiMing as the Lead Independent Director, Chairman of the Remuneration Committee and a Member of the Audit and Nominating Committees in place of Mr Michael Yap Kiam Siew.

With the above re-composition of the Board and as at the date of this Annual Report, the Board comprises six (6) members, three (3) of whom are Executive Directors including the Chairman of the Board and three (3) are 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 order to address the issue of independence given that the Chairman is not independent, the Independent Directors make up half of the Board and the majority of each of the Board Committees. Taking into account the above, the Board is of the view that the Company complies with Principle 2 of the Code as 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. A brief profile of each Director is presented in the profile of Board of Directors section of this Annual Report and their shareholdings in the Company and its subsidiaries as at 31 March 2020 are disclosed in the Directors’ Statement of the Audited Financial Statements for the FY2020.

The Board has examined its size and is of the view that it is an appropriate size for effective decision-making, taking into account the scope and nature of the operations of the Company.

The Board is committed to ensuring diversity on the Board including but not limited to appropriate balance and mix of skills, knowledge, experience, gender, age and the core competencies of accounting or finance, legal and regulatory, business or management experience, industry knowledge, and strategic planning to avoid group think and foster constructive debate.

The current Board comprises of one (1) female Director and fi ve (5) male Directors with diversity of expertise and knowledge in areas such as accounting, finance, strategic planning, investment, business management and administration, human resources, industry knowledge, engineering technology and economics.

The Nominating Committee is responsible for reviewing the composition of the Board to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The Board in consultation with the Nominating Committee has reviewed its composition and is satisfied that such composition ensures that there is adequate representation in respect of potential issues and challenges, without compromising the Board’s effectiveness and participation in decision-making. Objectivity on issues deliberated by the Board is assured, given that the half of the Board are Non-Executive Directors who are independent of management and are also independent in terms of character and judgement.

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.

During FY2020, the Independent Directors who have served on the Board for more than nine years are Mr Koji Miura, Mr Michael Yap Kiam Siew (*prior to his redesignation as an Executive Director and Deputy Board Chairman on 20 April 2020) 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 which 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 FY2020, Mr Koji Miura, Mr Michael Yap Kiam Siew* and Mr Chan Ching Chuen’s tenure in office have not affected 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 benefited greatly from the presence of individuals who are specialists in their own field. 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.

In accordance with Rule 210(5)(d)(iii) of the Listing Manual of the SGX-ST, the continued appointment of an independent director after the director has served on the Board for an aggregate period of more than 9 years will be subject to a two-tier vote and approval must be sought in separate resolutions by (a) all shareholders and (b) shareholders excluding the directors and the chief executive oficer of the Company and their associates. The Company will have up to 1 January 2022 to comply with this requirement and will endeavour to seek the above approvals at the Company annual general meeting for the financial year 2021.

The Independent Directors will meet up when necessary without the presence of Management, to facilitate a more effective check on the Management. During FY2020, the Independent Directors met once in the absence of key management personnel.

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.

The Group’s Executive Chairman, Managing Director and CEO is Mr Lee Wan Lik, who is responsible for the day-to-day operations of the Group, as well as monitoring the quality, quantity and timeliness of the flow of information between the Board and the Management. Mr Lee is the founder of the Group and has played a key role in developing the Group’s business. He is being assisted by a group of Executive Directors and Executive officers in carrying out his executive duties and responsibility for the Group’s operation and business. Through the Group’s success and development in these few years, Mr Lee has demonstrated his vision, strong leadership and enthusiasm in this business.

The NC, with the concurrence of the Board is of the opinion that vesting the roles of both Chairman and CEO in the same person who is knowledgeable in the business of the Group provides strong and consistent leadership, thus allowing for more effective planning and execution of long term business strategies. As such, there is no need for the role of the Chairman and CEO to be separated. The NC will review the need to separate the roles from time to time and make its recommendations accordingly. The role of Mr Lee as the Executive Chairman and CEO of the Company does not affect the independence of the Board as even though the Independent Directors do not make up more than half of the Board as at the date of this Annual Report, following the re-composition of the Board in April 2020, as the majority of the Board Committees including the respective Board Committees’ Chairman are Independent Directors.

Taking cognizance that the Chairman and the CEO are the same person, the Board has since financial year ended 31 March 2015, appointed Mr Michael Yap Kiam Siew as the Lead Independent Director (“LID”) of the Company. Following the redesignation of Mr Michael Yap Kiam Siew as an Executive Director and Deputy Board Chairman of the Company on 20 April 2020, Mr Stephen Ho ChiMing was appointed the LID 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 CFO 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 LID 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.

During FY2020, the Nominating Committee (“NC”) comprises Mr Chan Ching Chuen as Chairman, Mr Michael Yap Kiam Siew and Mr Lee Wan Lik as members. Mr Stephen Ho ChiMing was appointed a member of the NC on 20 April 2020 in place of Mr Michael Yap Kiam Siew.

• 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; and
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 confl ict 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 FY2020, the NC has reviewed the independence of the Independent Directors 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 conflicts 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”), the NC has recommended that Mr Koji Miura and Mr Lee Wan Lik (who will retire pursuant to Bye-Law 104 of the Company’s Bye-Laws), and Mr Stephen Ho ChiMing (who will retire pursuant to Bye-Law 117 of the Company’s Bye-Laws) to be nominated for re-election. In making the recommendation, the NC had considered the Directors’ overall contributions and performance and competencies in fulfilling their responsibilities as Directors to the Board.

For Mr Stephen Ho ChiMing who had joined the Board on 20 April 2020, the NC’s recommendation had taken into consideration his qualification, expertise, past experiences and his contributions since he was appointed a Director of the Company.

The NC has recommended the re-election of the retiring Directors and the Board has accepted the NC’s recommendation. Please refer to the notice of AGM for the resolutions put forth in relation to their respective reelections and details of the retiring Directors including the information required under Rule 720(6) of the Listing Manual, as disclosed in Appendix A to this corporate governance report.

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 identifies the key attributes that an incoming director should have, based on attributes of the existing Board and the requirements of the Group. 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 affairs 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 confirmations 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 satisfied 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 10 of the Annual Report for key information on the Directors.

Board Performance

Principle 5: The Board undertakes a formal annual assessment of its eff ectiveness 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 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.

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.

During FY2020, the Remuneration Committee (“RC”) comprises Mr Michael Yap Kiam Siew as Chairman and Mr Koji Miura and Mr Chan Ching Chuen as members. All of them are Independent Directors of the Company.

Mr Stephen Ho ChiMing was appointed as Chairman of the RC on 20 April 2020 in place of Mr Michael Yap Kiam Siew. He is also the Lead Independent Director of the Company.

As at the date of this Annual Report, the members of the RC are as follows. :

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

All the NC members including its Chairman are Independent Directors.

The RC is responsible for:

1. review 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 benefits-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.