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. The Board is free to seek clarification and information from the Management on all matters within their purview. 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 allow the Directors to participate in the Board meeting 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 fi nal 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 fulfill 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 of the Company. 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.

Professor Chee Yeow Meng, an Independent Director, was appointed to the Board on 6 September 2023 and he had completed the Listed Entity Director Programme conducted by the Singapore Institute of Directors, within one year from his date of appointment.

Apart from Professor Chee Yeow Meng, there was no other new Director appointed during FY2024.

All the Directors have completed the mandatory sustainability training courses to equip themselves with the basic knowledge on sustainability matters.

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 FY2024, 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 Board or Board Committee members.

During FY2024 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 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 FY2024 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 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 provide appropriate level of independence and diversity of thought and background and 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 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 2024 are disclosed in the Directors’ Statement of the Audited Financial Statements for the FY2024.

The Company recognises the importance and benefits of diversity in all ways, including gender, age, background and other distinguishing factors/qualities.

The Company has in place a Board Diversity Policy (the “policy”) that addresses diversity in terms of experience, skills, gender, age, tenure, and qualities, as well as any other relevant aspects of diversity. The 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 Policy to ensure that the Board 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 Board currently consists of Directors from different age group with diverse skills, knowledge, expertise and experience as detailed in the “Board of Directors” sections of this Annual Report. Even though the Board currently has no female representation on the Board, the Board believe that diversity is not merely limited to gender or any other personal attributes. The benefits of Board diversity are harnessed when the directors adopt an independent mindset when carrying out their responsibilities. To leverage diverse perspectives, the Board strives to cultivate an inclusive environment where all directors are able to speak and participate in decision making. Each director has been appointed on the strength of his calibre, experience and stature and is expected to bring a valuable range of experiences and expertise to contribute to the development of the Group’s strategies and the performance of its business. Having said so, the Board endeavors to achieve one (1) female representative on the board with the right skill sets, experience and/or industry knowledge, while maintaining an appropriate mix of Board members. The Company will tap the Directors’ contacts, social networks for professionals and if necessary, engage external search firms, among others, in identifying suitable candidates when the need arises.

The NC, having conducted its reviews, was satisfied that current Board members consist of a group with diverse professional expertise and possess the relevant core competencies in areas such as accounting, banking and finance, strategic planning, investment, business management and administration, engineering technology and economics, industry knowledge or experience. In particular, the Executive Directors of the Company, possess good industry knowledge while the Independent Directors, who are professionals in their own fields, are able to take a broader view of the Group’s activities, contribute their valuable experiences and provide independent judgment during Board deliberations. The Board, taking into account the view of the NC, considers that the current composition of the Board and Board Committees comprise a balance and mix of skills, experiences and individual attributes which promote the effectiveness of the Board as a whole and that of the Board Committees, and the current size of the Board is appropriate in leading and governing the Company effectively considering the scope and nature of its operation. The Board met its objectives in ensuring diverse skills and experience given that the existing Board members comprise of Directors with a mix of expertise and knowledge and diverse background.

The Board does not propose to set specific diversity targets or concrete timelines for achieving board diversity targets. Instead, the Company takes the approach that maintaining a satisfactory level of diversity is an ongoing process which may need to be updated as the business of the Group develops. The NC will review the Policy as and when appropriate to ensure its effectiveness and will discuss any revisions that may be required and recommend any such revisions to the Board for consideration and approval.

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 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 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 Professor Chan Ching Chuen, Mr Stephen Ho ChiMing and Professor Chee Yeow Meng 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 FY2024, the Independent Directors met once in the absence of key management personnel.

During FY2024, the Independent Director who have served on the Board for more than nine years is Professor Chan Ching Chuen. In assessing his independence, 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 he have served on the Board.

In view of this, having considered the above the NC and the Board have determined that, Professor Chan Ching Chuen’s tenure in office have not affected his independence or ability to bring about independent and considered judgement in the discharge of his duties as members of the Board. Professor Chan Ching Chuen 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 his judgement. Professor Chan Ching Chuen continues to provide stability to the Board and the Company has benefited greatly from his experience and expertise. Furthermore, his 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 him the opportunity to bring the full breadth and depth of their business experience to the Company.

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 sufficient 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 effectiveness 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 Officers 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.

The Board has established the NC who has been tasked with the authority and responsibility to devise an appropriate process to review and evaluate the performance of the Board as a whole and each of the Board Committees.

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

• Professor 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 FY2024, the NC has reviewed the independence of the Independent Directors namely Professor Chan Ching Chuen, Mr Stephen Ho ChiMing and Professor Chee Yeow Meng 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 (“2024 AGM”), the Directors who are subject to retirement by rotation and eligible for re-election are Mr Michael Yap Kiam Siew, Professor Chan Ching Chuen and Professor Chee Yeow Meng.

Professor Chan Ching Chuen has indicated to the Board his decision not seeking re-election at the 2024 AGM. Professor Chan Ching Chuen has served as an Independent Director of the Company for more than nine years from the date of his first appointment, on 1 February 2008. In the spirit of good corporate governance, and to facilitate the Board renewal, Professor Chan Ching Chuen will retire as a director at the 2024 AGM. His retirement is also in line with the listing rule requirements announced on 11 January 2023 by the Singapore Exchange Regulation limiting the tenure of independent directors to 9 years. Upon retirement, Professor Chan Ching Chuen will also relinquish his positions as the Chairman of the Nominating Committee and a member of the Audit Committee and Remuneration Committee at the conclusion of the AGM.

For Mr Michael Yap Kiam Siew and Professor Chee Yeow Meng, they each has consented to stand for re-election. The NC has recommended for Mr Michael Yap Kiam Siew and Professor Chee Yeow Meng to be nominated for re-election at the 2024 AGM. In making the recommendation, the NC had considered their overall contributions and performance and competencies in fulfilling 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 Directors 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.

With the impending retirement of Professor Chan Ching Chuen at the conclusion of the 2024 AGM, the NC and the Board have commenced the process of sourcing for suitable candidate to fill the membership of the Board and Board Committees so as to ensure compliance with the relevant Listing Rules and the Code. The Company will make the appropriate announcement(s) to to update shareholders on the reconstitution of the Board and Board committees when there are further material development.

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 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 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 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.

The Remuneration Committee (“RC”) is established for the purposes of ensuring that there is a formal and transparent process for fixing the remuneration packages of individual Directors and key executives and makes recommendations to the Board on all remuneration matters. The RC has a formal set of terms of reference approved by the Board.

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

• Professor Chee Yeow Meng– Chairman
• Mr Stephen Ho ChiMing –Member
• Professor Chan Ching Chuen – Member

All the RC members including its Chairman are Independent Directors. 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 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.

The Board has not engaged any external remuneration consultant to advice on the remuneration matters in FY2024.

Recommendations of the RC are submitted to the Board for endorsement. None of the RC members or Directors are involved in deliberations in respect of any remuneration, compensation or any form of benefit to be granted to him or someone related to him. Each member of the RC will abstain from voting on any resolution in respect of his own remuneration package.