Corporate Governance

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Audit Committee

Principle 10: The Board has an Audit Committee which discharges its duties objectively

During FY2020, the AC comprises three independent Non-Executive Directors, with Mr Koji Miura as Chairman, and Mr Michael Yap Kiam Siew and Mr Chan Ching Chuen as Members.

Mr Stephen Ho ChiMing was appointed a Member of the AC 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 Koji Miura – Chairman
  • Chan Ching Chuen – Member
  • Mr Stephen Ho ChiMing – Member

All the members of the AC including its Chairman are Independent.

None of the AC members were previously partners or directors of the Company’s external audit firm within a period of two (2) years commencing on the date of him ceasing to be a partner or director of the external audit firm, or hold any financial interest in the external audit firm.

The Board is of the view that the AC members are appropriately qualified, with the AC Chairman Mr Koji Miura and the AC Member Mr Stephen Ho ChiMing having the relevant accounting and/or related financial management expertise or experience as the Board interprets such qualifications to discharge their responsibilities. The AC has kept the recent and relevant accounting or related financial management expertise or experience up-todate by attending the training provided by the relevant regulatory parties.

In addition, the auditor of the Company provides update on recent developments to accounting standards to AC members on half yearly basis to ensure all AC members and management to keep abreast of the changes to accountings standards and issues which have a direct impact on financial statements.

The AC will meet periodically to, inter alia:

  1. review the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company’s financial performance;
  2. review with the internal auditor their audit plan and report to the Board at least annually the adequacy of the internal audit procedures and their evaluation of the effectiveness of the Company’s overall internal controls and risk management, including financial, operational, compliance and information technology controls;
  3. review interested person transactions, if any, to ensure that the internal control and review procedures are adhered to;
  4. review the adequacy, effectiveness, scope and results of the external audit, and the independence and objectivity of the external auditors;
  5. make recommendations to the Board on the proposals to the shareholders on the appointment, reappointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors;
  6. establish and review, on an ongoing basis, the whistleblowing policies, processes and reporting procedures of the Company;
  7. review the assurance from the Chief Executive Offi cer and Group Financial Offi cer on the financial records and financial statements; and
  8. undertake generally such other functions and duties as may be required by law or the Listing Rules.

Apart from the above functions, the AC will also commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, failure of internal controls, or infringement of any law, rule or regulation which has or is likely to have a material impact on our Company’s operating results or financial position. Each member of the AC will abstain from voting in respect of matters in which he is interested.

The AC is empowered to investigate any matter relating to the group’s accounting, auditing, internal controls and/or financial practices brought to its attention, with full access to records, resources and personnel, so as to enable it to discharge its functions properly.

For FY2020, the remuneration paid and payable to the external auditor, PricewaterhouseCoopers LLP in relation to audit and non-audit services were HK$1,265,000 and HK$37,000 respectively.

The AC, having reviewed the volume of non-audit services to the Company by the external auditors, is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. The AC has accordingly recommended to the Board that the auditor, PricewaterhouseCoopers LLP, be nominated for re-appointment as auditor at the forthcoming AGM of the Company.

The AC has confirmed the Company has complied with Rule 712 of the Listing Manual of the SGX-ST in that PricewaterhouseCoopers LLP (“PwC”) is registered with the Accounting and Corporate Regulatory Authority. The AC is satisfied that the resources and experience of PwC, the audit engagement partner and his team assigned to the audit of the Group are adequate to meet their audit obligations, given the size, nature and operations of the Group.

The Group has one Singapore subsidiary and PwC will be the appointed auditor. Other than the overseas subsidiaries which were exempted from audit requirement under their respective laws of the country of incorporation, the overseas subsidiaries of the Group are either audited by a member firm of PwC or by the suitable auditing firms in their respective country of incorporation.

The AC and the Board are satisfied that the appointment of different auditing firms for its overseas subsidiaries would not compromise the standard and effectiveness of the audit of the Company. The AC confirmed that the Company has complied with Rules 712 and 715 of the Listing Manual of the SGX-ST.

The Company has outsourced its internal audit function to an independent qualified firm of auditors Moore Stephens Advisory Services Limited, as its internal auditor, to review the effectiveness of the Company’s material internal controls.

The resulting report issued by the internal auditor is reviewed in detail by the AC in conjunction with Management. The AC will consider the effectiveness of responses / actions taken by Management on the audit recommendations and observations.

The AC is responsible for the hiring, removal, evaluation and approving the remuneration and terms of engagement of the internal auditor.

The AC reviews and approves the internal audit plan to ensure the adequacy of the scope of audit. The AC is satisfied that the internal audit function is independent, effective (given, inter alia, its adherence to standards set by internationally recognised professional bodies) and adequately resourced, has unfettered access to all of the Company’s documents, records, properties and personnel, including to the AC and has the appropriate standing in the Company to discharge its duties effectively.

In line with the Code, a private session between the AC with the external and the internal auditors is held annually to discuss any matters concerning the Company without the presence of the Management. The AC has met with the external and the internal auditors in the absence of key management personnel in FY2020.

The Company has adopted a whistle blowing policy, endorsed by the AC, where employees of the Group may in confidence, raise concerns about wrongdoing or malpractice within the Group and ensure arrangements are in place for the independent investigations of such matters and for appropriate follow up actions. . A well-defined process ensures independent investigation of such matters and the assurance that employees will be protected to the extent possible from reprisals.

For FY2020, there were no complaints, concerns of issues received by the AC.

SHAREHOLDERS’ RIGHT AND RESPONSIBILITIES

Shareholder Rights and Conduct of General Meetings

Principle 11: The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders’ rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects.

The Company respects and upholds shareholders’ rights, and tenders its communication with shareholders with care. The Board recognises and exercises its overall responsibility to shareholders, by ensuring accurate financial reporting for the Company’s overall internal control framework, including financial, operational, information technology and compliance controls, risk management policies and through systems needed to safeguard the shareholders’ investments and assets of the Company. The Company’s Bye-laws allows the attendance by nominees of shareholders at general meetings. The Company encourages and facilitates shareholder engagement and participation through its meetings and briefings.

The AGM of the Company represents the principal forum for dialogue and interaction with all shareholders. At each AGM, the Board welcomes questions from shareholders who have an opportunity to raise questions or share their views regarding the proposed resolutions and the Company’s business and affairs, either informally or formally before or at the AGM.

The Chairman of the Board Committees, Directors, senior management and external auditors will be present and available at the general meeting to attend to the queries/questions from shareholders.

All resolutions proposed at general meetings shall be put to vote by way of a poll. All votes cast, for or against or abstain, and the respective percentages, in respect of each resolution are tallied and disclosed at the meeting and an announcement with the detailed results showing the numbers of votes cast for and against for each resolution and the respective percentage will be released via SGXNet after the general meetings. Each distinct issue is proposed as a separate resolution at general meetings.

The Company has not amended its Bye-Laws to provide for absentia voting method. As the authentication of Shareholder identity information and other related security issues remain a concern, the Company has decided, for the time being, not implement voting in absentia by mail, e-mail or fax.

Minutes of general meetings including comments from shareholders and responses from the Board and Management relating to the resolutions tabled at the general meetings held by the Company will be made available to shareholders upon receipt of their request.

For FY2020, in accordance with the COVID-19 (Temporary Measures) Act 2020 and the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020 (the “Order”), the Company will apply and adopt the alternative arrangements for the convening, holding and conducting of the AGM, as set out in the second column of the First Schedule of the Order. Minutes of the AGM held on 13 August 2020 will be published on the SGXNET and also at the Company’s corporate website within one (1) month after the AGM date.

While the Company has no offi cial policy on the payment of dividends, it has consistently paid out the bulk of its profits as dividends since its listing in 2004. The amount of dividends paid each year will depend on factors that include the Group’s profit level, cash position and future cash needs.

Subject to shareholders’ approval at the forthcoming AGM, the Board has recommended a final dividend of 21HK cents per share for the financial year ended FY2020

Engagement with Shareholders

Principle 12: The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.

Engagement with Stakeholders

Principle 13: The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.

The Company engages in regular, effective and fair communication with shareholders. The Board is mindful of the obligations to provide timely information and full disclosure of material information to shareholders in accordance with the statutory requirement and the listing manual of the SGX-ST. Information is communicated to shareholders on a timely basis. All material information and financial results are released through SGXNET.

Notice of the AGM or the Special General Meeting (“SGM”), if any, and Annual Reports are issued to all shareholders of the Company. The Notice of AGM or SGM is also advertised in newspaper and announced via SGXNET. Information on major new initiatives of the Company is also disseminated via SGXNET, news release and made available on the Company’s website.

For FY2020, the Company will be relying on the Order and the Annual Report, notice of AGM and proxy form (“AGM documents”) will be available to shareholders through electronic means via publication on the company’s website and on the SGX-ST website at the URL https://www.sgx.com/securities/company-announcements. Printed copies of the AGM documents will not be sent to shareholders.

Regular meetings are held with investors, analysts, fund managers and the press. The Group also has a corporate web-site (www.azeus.com) where shareholders and members of the public are able to access up-to-date corporate information, announcements, new events related to the Group and Company’s Annual Report and sustainability report.

The Board considers the Company’s obligations to its shareholders and also the interests of its material stakeholders as the relationships with material stakeholders may have an impact on the Company’s long-term sustainability. Stakeholders are parties who may be affected by the Company’s activities or whose actions can affect the ability of the Company to conduct its activities. The Board has identified its stakeholders as customers, employees, suppliers, landlords, investors, media, government institutions and the communities. The Company maintains its Company’s website to communicate and engage with the stakeholders.

The Company also issue sustainability report to keep stakeholders informed on the commitment made by the Company in fostering the creation of long-term value for the stakeholders and sustainable development of the global economy. The sustainability report is available at the Company’s corporate website.