Corporate Governance

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Audit Committee

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

As at the date of this Annual Report, the members of the AC 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 to date 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 the 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 Officer and Group Financial Officer 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 the 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 FY2022, the remuneration paid to the external auditor, PricewaterhouseCoopers LLP (“PwC”) in relation to audit services was HK$1,365,000. There were no non-audit fees paid to the external auditor in FY2022. The AC has reviewed and is satisfied that the external auditor is independent.

The AC has recommended and the Board has approved the nomination for the re-appointment of PwC as the external auditors of the Company at the forthcoming AGM.

The AC has confirmed the Company has complied with Rule 712 of the Listing Manual of the SGX-ST in that 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.

PwC is the appointed external auditors of the Company and its Singapore-incorporated subsidiary. 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 Advisory Services Limited (“Moore Advisory”), as its internal auditor, to review the effectiveness of the Company’s material internal controls.

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.

During FY2022 Moore Advisory reviewed key internal controls in selected areas as advised by the AC and reported its findings together with recommendation on areas for improvement to the AC for review. The resulting report is reviewed in detail by the AC in conjunction with Management. The AC considers the effectiveness of responses/ actions taken by Management on the audit recommendations and observations.

For FY2022 the AC is satisfied that Moore Advisory had been able to discharge its duties effectively as the Internal Auditor. Moore Advisory has unfettered access to all of the Company’s documents, records, properties and personnel, including to the AC. Moore Advisory has adequate resources to perform its functions effectively and it is independent from the activities that it audits and has appropriate standing within the Group. The AC is satisfied that the internal audit function is independent, effective and adequately resourced.

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 FY2022.

The Company has put in place a whistleblowing policy which sets out the procedures for a whistleblower to make a report on misconduct or wrongdoing relating to the Company and its offi cers. The policy protects the identification of the whistleblower and ensures that the identity of the whistleblower is kept confidential to ensuring the protection of the whistleblower against any detrimental and unfair treatment. The policy had been circulated to all employees for implementation. It has been put in place to encourage and provide a channel to employees and any other persons to report, in good faith and in confidence, concerns about possible fraud, improprieties, fraudulent activities or malpractices or other matters within the Group in a responsible and effective manner. The objective of such an arrangement is to ensure independent investigation of such matters and for appropriate follow up action.

The AC has reviewed the whistleblowing policy that the Group has established and is responsible for the oversight and monitoring of whistleblowing. The Company has arrangements and processes to facilitate independent investigation of such concerns and for appropriate follow-up action. Concerns may be raised either verbally or in writing, and any person receiving such concern raised should inform the Azeus Global HR Manager, and/or the Chairperson of the Audit Committee (contact details of whom are set out in the whistleblowing policy). The AC upon receipt of the complaints or allegations, determines if an investigation is necessary.

All whistleblowing reports will be handled confidentially, except as necessary or appropriate to conduct investigation and to take remedial action, in accordance with the applicable law and regulations. The identity of the whistleblower making the allegation will be kept confidential and confined to disclosures on a need-to-know basis to the AC, the investigating team, the Board of Directors of the Company and any party to whom the identity of the whistleblower is required to be disclosed by law.

For FY2022, there were no complaints nor 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 briefi ngs.

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.

In 2021, the Company conducted its first hybrid AGM which was held both physically (“physical AGM”) and via electronic means (“virtual AGM”) adhering to the COVID-19 (Temporary Measures) (Control Order) Regulations 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”) respectively.

The AGM was conducted using the AGM@Convene platform which enabled shareholders who attended the virtual AGM to have real-time two-way interaction with the Company’s management and Board of Directors, and also provides the option of live voting and interactive video question and answer session with the Board, in addition to the written questions. The hybrid AGM provide a channel for shareholders (either at the physical venue or at the virtual meeting) to interact with the Company’s Board of Directors and Senior Management.

The Company will be holding its AGM via Hybrid mode for the FY2022.

Minutes of the AGM 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 official 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 HK$1.62 per share for the financial year ended FY2022.

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 FY2022, the Company will be relying on the Order and the Company’s Bye-Law, in which the Annual Report, notice of AGM, proxy form and Circular (for the renewal of share buy-back mandate) (“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.