Corporate Governance

(A) Board Matters

Principle 1 : Board's Conduct of its Affairs

Board duties and responsibilities

Our Board is collectively responsible for, and works with Management to achieve, the long-term success of our Company and value creation for our shareholders. Our Board is responsible for guiding our overall strategic direction, corporate governance, setting organisational culture and providing oversight in the proper conduct of the business of our Company and our subsidiaries (“Group”). Our Board supervises the achievement of Management’s performance targets which align the interests of our Board and Management with that of the shareholders, whilst balancing the interests of all shareholders. Our Board also sets the tone for our Group in respect of organisational culture and values, and ensures proper accountability within our Group. Our Company has in place an internal code of business conduct and ethics which sets out the professional and ethical framework to guide our behaviour and within which business decisions should be made at our Company. Please also refer to the sections “Whistleblowing Policy” and “Anti-Corruption Policy” on pages 49 to 50 for further information.

Our Board meets regularly to review our key activities and business strategies. Regular Board meetings are held quarterly to deliberate on strategic matters and policies, including significant acquisitions and disposals, the annual budget, review the performance of the business and approve the release of the first quarter and third quarter business updates and half-year and full-year financial results. Where necessary, we convene additional Board sessions to address significant transactions or developments. Where a physical Board meeting is not possible, timely communication with members of our Board is effected through electronic means, which include electronic mail, teleconference and/or videoconference. Our Constitution provides for Directors to participate in meetings by teleconference or videoconference. Where necessary, Management will arrange to brief each Director, before seeking our Board’s approval.

Unless delegated, all transactions of our Company are approved by our Board. Material items that require Board approval include the following:

• Strategic direction of our Group
• Corporate strategies and policies
• Annual operating and capital budgets of our Group
• Release of business performance updates for first and third quarters
• Release of half-year and full-year financial results
• Annual report and financial statements
• Convening of shareholders’ meetings
• Recommendations of dividend payments and other distributions to shareholders
• Issue of shares
• Material acquisitions and disposals of assets
• Capital and operating expenditure above specified limits
• Investments and divestments above specified limits
• Interested person transactions
• Board assurance framework
• Banking facilities
• Sustainability reporting

All Directors are required to act objectively in the best interests of our Company as fiduciaries at all times. Consistent with this principle, any Director who has an interest or relationship that is likely to interfere or impact on his/her independence or conflict with a subject under discussion or consideration by our Board is required to immediately declare his/her interest or relationship or conflict and, if required by our Board, abstain from participation in further discussion and/or voting on the matter.

Access to information

We recognise the importance of the provision of complete, adequate and timely information relating to our Group to our Board in order to enable our Directors to make informed decisions and discharge their duties and responsibilities. Management provides our Board members with monthly business and financial reports that include updates on our key operational activities and financial performance, a comparison of our actual performance with budget, and highlighting key business indicators and major issues that are relevant to our performance, position and prospects. The monthly flow of information and reports allows our Directors to make informed decisions and also to keep abreast of key challenges and opportunities between our Board meetings.

The agenda and Board papers for Board meetings are circulated to our Directors prior to the Board Meetings to facilitate review and preparation for the Board meetings. During the quarterly Board meetings, Management will typically provide our Board with an update on our Group’s business and operations in the relevant quarter and the financial performance for that quarter, and any other significant matters or issues that may have arisen. This provides our Board with continuous oversight of the progress of our business and financial performance throughout the financial year, and also an opportunity for active engagement between our Board and Management.

Aside from Board meetings, frequent dialogue takes place between Management and members of our Board, and our Executive Director and President & Chief Executive Officer (“President & CEO”) encourages all Directors to interact directly with all members of our Management team.

Our Board has separate and independent access to our Senior Management and the Company Secretary at all times and are free to conduct independent or collective discussions with Management and the Company Secretary and seek independent professional advice, if necessary, at our Company’s expense on any area of interest or concern. The appointment and removal of the Company Secretary are subject to the approval of the Board.

Board committees

Our Board has established an Executive Committee (“EC”) to oversee major business and operational matters. Our EC comprises Ronald Seah Lim Siang, Stephen Geoffrey Miller, Yeo Siew Chye Stephen and Ho Koon Lian Irene. Management regularly consults and updates our EC on all major business and operational issues.

Our Board is also supported by other Board committees which are delegated with specific responsibilities, being the Audit Committee (“AC”), the Risk and Sustainability Committee (“RSC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”). The RSC was established by our Board as a new committee in FY2023 with a view to having a more holistic view of, and integrated approach to, managing sustainability and the governance of risks. Each of these Board committees has its own terms of reference that set out its authority and duties. A description of, among other things, the composition, duties and activities of the Board committees is set out under:

• in respect of the NC, “Principle 4: Board Membership” and “Principle 5: Board Performance”;
• in respect of the RC, “Principle 6: Procedures for Developing Remuneration Policies” and “Principle 7: Level and Mix of Remuneration”;
• in respect of the RSC, “Principle 9: Risk Management and Internal Controls”; and
• in respect of the AC, “Principle 10: Audit Committee”.

Delegation of authority

Our Board, upon the recommendation of our AC, has adopted a comprehensive set of internal controls, which sets out the authority and approval limits for capital and operating expenditure, investments and divestments, bank borrowings and cheque signatories arrangements at Board level. Authority and approval sub-limits are also provided at Management levels to facilitate operational efficiency.

Understanding of Directors’ roles

Our Board implements measures with a view to ensuring that both newly appointed as well as existing Directors are familiar with our Group’s business and operations as well as their duties and responsibilities as directors.

In relation to new Directors, our practice is to issue a letter of appointment setting out their duties and obligations as executive directors, non-executive directors or independent directors (as the case may be) upon their appointment. New Directors are given briefings by Management on the business activities of our Group and its strategic directions. New Directors are also given manuals containing, among others, relevant information on our Group and information about their statutory and other responsibilities as Directors. Unless our NC assesses that training is not required for a newly appointed Director because he or she has other relevant experience (which basis of assessment will be disclosed in accordance with the SGX-ST Listing Manual (“Listing Manual”)), newly appointed Directors who have no prior experience as directors of a listed company will also be required to attend relevant training as prescribed by the Listing Manual.

During FY2023, Pauline Wong Mae Sum, Shailesh Anand Ganu and Lim Yong were appointed as Executive Director and President & CEO, Non-Executive and Independent Director and Non-Executive and Non-Independent Director respectively. As Shailesh Anand Ganu and Lim Yong were new to our Group, they were provided with briefings from Management on our Group’s objectives, strategic directions, key business strategies and plans, operational activities and processes. As Pauline Wong Mae Sum and Lim Yong have no prior experience as a director of a listed company, they were provided with a briefing on the duties and responsibilities of a director of a listed company as well as the principal laws and regulations applicable to a listed company. Our Company will also arrange for them to attend the relevant courses conducted by the Singapore Institute of Directors (“SID”) as prescribed by the Listing Manual within one year of his or her appointment.

On an ongoing basis, our Board as a whole is kept up-to-date on pertinent developments in our Group’s business and operations, as well as the industry and legal and regulatory environment in which our Group operates. In particular, Management monitors changes to regulations and accounting standards closely. Updates and briefings on regulatory requirements are conducted either during Board sessions or by circulation of papers. Directors are also encouraged to attend seminars and training (including those conducted by the SID in conjunction with SGX-ST) that may be relevant to their duties and responsibilities as directors, at our Company’s cost, to continually develop and refresh their professional knowledge and skills and to keep themselves abreast of relevant developments in our Group’s business and the regulatory and industry-specific environments in which our Group operates. This enables our Directors to serve effectively and contribute to our Board. Our Directors are regularly provided with a list of upcoming seminars and trainings conducted by the SID and/or SGX-ST.

Principle 2: Board Composition and Guidance

Board composition

To be effective, we believe our Board should comprise a majority of Non-Executive Directors independent of Management, with the right core competencies and appropriate balance and diversity of skills, knowledge and experience and other aspects of diversity, such as gender and age, from time to time determined by our Board to enable them to contribute effectively. At the beginning of FY2023, our Board comprised seven (7) Directors, all of whom were Non-Executive Directors, and a majority of whom were Non-Executive and Independent Directors. During the course of FY2023, the following changes were made to the composition of our Board (collectively “Change in Board Composition”):

• in July 2023, Shailesh Anand Ganu and Lim Yong were appointed as Non-Executive and Independent Director and Non-Executive and Non-Independent Director respectively, while Lim Chai Hock Clive stepped down as Non-Executive and Non-Independent Director;
• in October 2023, Pauline Wong Mae Sum was appointed as Executive Director, concurrently with her appointment as President & CEO following the retirement of Vincent Lim Shuh Moh; and
• in December 2023, Nicholas Tan Kok Peng stepped down as Non-Executive and Independent Director.

Following the Change in Board Composition, our Board currently comprises eight (8) Directors, being four (4) Non-Executive and Independent Directors, three (3) Non-Executive and Non-Independent Directors, and one (1) Executive Director.

Board independence

As noted above, there were changes in the composition of our Board in the course of FY2023. Throughout these changes, our Board at all times comprised either all or a majority Non-Executive Directors, with Non-Executive and Independent Directors comprising a majority or at least half of our Board. Our Board believes that there was at all times a strong and independent element on our Board.

Following the Change in Board Composition, as from 1 January 2024, our Board comprises eight (8) Directors, seven (7) of whom are Non-Executive Directors. There are currently four (4) Non-Executive and Independent Directors, namely Ronald Seah Lim Siang1, Cheah Sui Ling, Yeo Siew Chye Stephen and Shailesh Anand Ganu, which comprise half of our Board. Our Board is led by our Chairman, Ronald Seah Lim Siang, who is currently also a Non-Executive and Independent Director¹. Our Board continues to be able to exercise objective judgement on corporate affairs independently, in particular, from Management given that a majority of our Board comprises Non-Executive Directors and half of our Board comprises Non-Executive and Independent Directors. This helped to ensure a strong element of independence in all our Board’s deliberations.

Our Board, taking into account the views of our NC, assesses the independence of each Director annually in accordance with the guidance in the Code of Corporate Governance and Practice Guidance to the Code of Corporate Governance (“Practice Guidance”). Based on such assessment, and taking into account the guidance in the Code of Corporate Governance and the Practice Guidance, our Board has determined Ronald Seah Lim Siang, Cheah Sui Ling, Yeo Siew Chye Stephen and Shailesh Anand Ganu to be independent. However, Ronald Seah Lim Siang will be re-designated as Non-Executive and Non-Independent Director following the conclusion of the Annual General Meeting (“AGM”) to be held on 24 April 2024 pursuant to the transitional arrangements applicable to an independent director who has served as an independent director for an aggregate period of more than 9 years. Please see further the section “Selection, appointment and re-appointment of Directors” under “Principle 4: Board Membership” on the intention to change the composition of our Board following the re-designation of Ronald Seah Lim Siang as Non-Executive and Non-Independent Director.

Please see further the section “Assessment of Independence” under “Principle 4: Board Membership” on details of the assessment of the independence of our Independent Directors.

Board diversity

We recognise the benefits of diversity in terms of skills, knowledge and experience, as well as broader aspects of diversity such as gender and age, and believe that an appropriate balance of diversity will raise the level of Board discussions, enhance the decision-making process and better support our Company in achieving our strategic objectives.

Prior to the Change in Board Composition, our Board comprised seven (7) Directors who were business leaders and professionals of high calibre and integrity, collectively with a broad range of core competencies and skills, knowledge and experience in banking and finance, investment, business and management, accounting and financial management, risk management, and relevant industry experience (including information, communications and technology). Shailesh Anand Ganu and Lim Yong were appointed as Non-Executive and Independent Director and Non-Executive and Non-Independent Director respectively in July 2023, while Pauline Wong Mae Sum was appointed as an Executive Director and President & CEO in October 2023. Based on the recommendation of our NC, our Board was of the view that the appointment of Shailesh Anand Ganu, Lim Yong and Pauline Wong Mae Sum brings further diversity and adds depth to our Board. Please see the section “Selection, appointment and re-appointment of Directors” under “Principle 4: Board Membership” on the considerations taken into account in relation to their appointment. The profiles of our current Directors are found on pages 6 to 9 of this Annual Report.

Prior to the Change in Board Composition, our Board comprised four (4) Non-Executive and Independent Directors (i.e. Ronald Seah Lim Siang, Nicholas Tan Kok Peng, Cheah Sui Ling and Yeo Siew Chye Stephen) and three (3) Non-Executive and Non-Independent Directors (i.e. Stephen Geoffrey Miller, Ho Koon Lian Irene and Lim Chai Hock Clive), and included two (2) female Directors (i.e. Cheah Sui Ling and Ho Koon Lian Irene), one of whom served as a member of our EC and both of whom served as members of our AC.

Following the Change in Board Composition, our Board comprises four (4) Non-Executive and Independent Directors (i.e. Ronald Seah Lim Siang, Cheah Sui Ling, Yeo Siew Chye Stephen and Shailesh Anand Ganu), three (3) Non-Executive and Non-Independent Directors (i.e. Stephen Geoffrey Miller, Ho Koon Lian Irene and Lim Yong) and one (1) Executive Director (i.e. Pauline Wong Mae Sum). The appointment of Pauline Wong Mae Sum as Executive Director and President & CEO also adds an additional female Director to our Board and brings the total number of female Directors to three (3), or 37.5%, which exceeds the target set by the Council for Board Diversity for female board representation of 25% by 2025.

Prior to the Change in Board Composition, our Directors had varying age profiles ranging from 50s to 70s, and had served on our Board for varying tenures. Pursuant to the Change in Board Composition, with the appointment of three (3) new Directors, including one (1) Director who is in his 30s, there is now greater diversity in terms of age profile and tenures. This reflects the continuous efforts of the Board renewal process, with a higher proportion of Directors who are younger and have served a shorter tenure in office following the Change in Board Composition.

The following charts reflect the diversity profiles of the Board prior to the Change in Board Composition, and after the Change in Board Composition (as from 1 January 2024):

The current composition of our Board enables Management to benefit from an external diverse and objective perspectives of issues from our Board. It also enables our Board to interact and work with Management through a robust exchange of ideas and views to help shape strategic directions. This, coupled with a clear separation of the role of our Chairman and our President & CEO, provides a healthy professional relationship between our Board and Management, with clarity of roles and robust oversight. In addition, our Non-Executive and Non-Independent Directors and Non-Executive and Independent Directors also meet separately, whether formally or informally, without the presence of our Executive Director or Management on a regular basis and also as and when the need arises, and the chairman of such meetings will provide feedback to our Board and/or Chairman as appropriate.

Board Diversity Policy

Our Board has adopted a formal Board Diversity Policy for promoting diversity on our Board. The Board Diversity Policy provides, among other things, that:

• Our Company recognises that a Board comprising appropriately qualified members with a broad range of relevant skills, knowledge and experience, and other aspects of diversity such as gender and age, will bring diversity of thought and different perspectives to Board discussions, avoid group-think and enhance the decision-making process of our Board. Our Company believes that a diverse Board is essential to the effective governance of our business and ensuring long-term sustainable growth. Accordingly, our Company is committed to promoting diversity on our Board.
• Our Board will consider all aspects of diversity, including educational background, skills, industry and business experiences, gender, age, ethnicity and culture, geographical background and nationalities, tenure of service, and other distinguishing qualities of the members of our Board.
• In particular, our Board has identified the diversity in terms of skills, experience, independence, gender, age and tenure as important aspects of diversity that are elaborated on in the Board Diversity Policy. In relation specifically to gender diversity, our Board believes that there should be female representation on our Board and will strive to:
  • ensure that female candidates are included for consideration by our NC whenever it seeks to identify a new Director for appointment to our Board;
  • ensure that if external search consultants are engaged to identify candidates for appointment to our Board, the consultants will be asked to present female candidates for consideration; and
  • align with the target set by the Council for Board Diversity for female board representation to the extent reasonably practicable.
• The consideration and selection of candidates for appointment to our Board will ultimately be based on merit, with the objective of achieving the appropriate mix and balance of skills, experience and diversity of perspectives on our Board that will meet the requirements of our Company from time to time.
• In the implementation of the Board Diversity Policy, our NC will consider and, if appropriate, set qualitative and quantitative objectives for promoting and achieving diversity on our Board, taking into account our Directors’ mix of background, skills, experiences and qualities that our Board requires to function competently and efficiently in the context of the scope and nature of our Company’s business and operations and the corporate strategy.

Our Board is of the view that the current Board members, collectively as a group, provide an appropriate mix and balance of diversity of skills, experience, independence, gender, age and tenure. In arriving at this view, our Board has taken into account the Change in Board Composition in the course of FY2023.

Lim Chai Hock Clive, who has been a Director since 1999, stepped down as part of the Board renewal process. Lim Yong, who was appointed as Non-Executive and Non-Independent Director, brings with him a fresh perspective given his age and background in portfolio management. Shailesh Anand Ganu, who was appointed as Non-Executive and Independent Director, brings with him extensive experience in the areas of executive compensation, board advisory and ESG, and has been appointed as the Chairman of the RSC. Pauline Wong Mae Sum, who has been with the Company since 1999 and last held the position of Senior Vice President, Personal Communications Solutions Services Division, was appointed as President & CEO-designate in July 2023 and worked alongside Lim Shuh Moh Vincent for transition purposes. She assumed the position of President & CEO and was concurrently appointed as an Executive Director in October 2023.

At the same time, the Change in Board Composition has resulted in a higher proportion of Directors who are younger and have served a shorter tenure in office. Specifically, the percentage of Directors below the age of 60 years old has increased from 28.6% in FY2022 to 50.0% in FY2023, while the percentage of Directors who have served for five (5) years or less has increased from 42.9% in FY2022 to 62.5% in FY2023. Our Board further noted that female representation on our Board has increased from 28.6% to 37.5%, which exceeds the target of 25% of female representation by 2025 set by the Council for Board Diversity. Nonetheless, in order to emphasise our Board’s commitment to gender diversity, our Board continues to target to maintain female representation on our Board at a minimum of 25%. As our Board is of the view that there has already been an ongoing Board renewal process for the past couple of years and the current Board members, collectively as a group, provide an appropriate mix and balance of diversity of skills, experience, independence, gender, age and tenure, our Board has not set any further diversity targets. Our Board will also continue to consider diversity in relation to any future changes to the composition of our Board, taking into account the Board Diversity Policy.

Principle 3: Chairman and President & Chief Executive Officer

We believe there should be a clear separation of the roles and responsibilities between our Chairman and the President & CEO. Our Chairman and the President & CEO are separate persons and are not related to each other in order to maintain an effective balance of power, increased accountability and greater capacity of our Board for independent decision making.

Our Chairman is Ronald Seah Lim Siang, who is currently a Non-Executive and Independent Director. Our Chairman leads our Board and ensures that our Board members work together with Management, with the capability and moral authority to engage and contribute effectively and constructively on various matters, including strategic issues and business planning processes.

Our President & CEO, Pauline Wong Mae Sum, is also an Executive Director and is charged with full executive responsibility for the running of our businesses, making operational decisions and implementing business directions, strategies and policies. Our President & CEO is supported on major business and operational issues by the oversight of our EC.

Our Board is not required to have, and does not have, a lead independent director as our Chairman, Ronald Seah Lim Siang, is currently a Non-Executive and Independent Director. However, Ronald Seah Lim Siang will be re-designated from Non-Executive and Independent Director to Non-Executive and Non-Independent Director upon conclusion of the AGM to be held on 24 April 2024, and there will be further changes to the composition of our Board and our Board Committees. Please see further the section “Selection, appointment and re-appointment of Directors” under “Principle 4: Board Membership” on the intention to change the composition of our Board following the re-designation of Ronald Seah Lim Siang as Non-Executive and Non-Independent Director, including the appointment of a lead independent director.

Principle 4: Board Membership

Board and Board committees

We believe that Board renewal must be an ongoing process, to ensure good governance, and maintain relevance to the changing needs of our Company and the business of our Group. As required by our Constitution, our Directors are subject to retirement and re-election by shareholders as part of the Board renewal process. Nominations and election of Board members are the prerogatives and rights of all our shareholders.

In carrying out its functions, our Board is supported by key Board committees, namely the AC, the RSC, the RC, the NC and the EC. Each of our Board committees has been established with clear charters setting out their respective areas of authority, terms of reference and committee procedures. Other Board committees can be formed from time to time to look into specific areas as and when the need arises. Membership in the different committees is carefully managed to ensure that there is equitable distribution of responsibilities amongst Board members, to maximise the effectiveness of our Board and foster active participation and contribution from Board members. Diversity of experiences and appropriate skills are also considered, along with the need to ensure appropriate checks and balances between the different Board committees.

Details of frequency and participation at our Board, AC, RSC, RC, NC, EC and general meetings for FY2023 are set out in Table 1.

Table 1: FY2023 – Directors’ Attendance at Board, Board Committees and AGM

Nominating Committee

Our NC is chaired by a Non-Executive and Independent Director, Ronald Seah Lim Siang, and also comprises Yeo Siew Chye Stephen (Non-Executive and Independent Director) and Stephen Geoffrey Miller (Non-Executive and Non-Independent Director). The members of our NC are all Non-Executive Directors, a majority of whom (including the Chairman) are Non-Executive and Independent Directors.

Our NC’s responsibilities include:

• making recommendations to our Board on the selection, appointment and re-appointment of our Company’s Directors;
• determining the independence of a Director on an annual basis;
• deciding how our Board’s performance and the performance of our Chairman, Board committees and each individual Director are to be evaluated;
• making recommendations to our Board on the review of board succession plans for Directors and Key Management Personnel (defined as the President & CEO and other persons having authority and responsibility for planning, directing and controlling the activities of our Company); and
• making recommendations to our Board on training and professional development programs for our Board.

Selection, appointment and re-appointment of Directors

Our Company has in place a process for selecting and appointing new Directors as well as for the re-appointment of retiring Directors.

In proposing candidates for appointment as new Directors or existing Directors for re-election pursuant to their retirement by rotation or retirement following appointment to fill a casual vacancy, our NC considers several criteria, including the composition, the diversity and the need for progressive renewal of our Board. Our NC will review the core competencies and mix of skills, knowledge and experience of our existing Directors, so as to identify any specific attributes that are required and/or desired at Board level and consider whether and how the skills, knowledge and experience of the candidate or existing Director being considered for re-election will complement, add to and/or enhance the skillsets and core competencies of our Board. Our NC will review the principal commitments (including listed directorships) of the candidate or existing Director being considered for re-election, so as to assess his or her ability to adequately carry out his or her duties and responsibilities as a Director. In relation to existing Directors being considered for re-election, our NC will also consider his or her commitment, contribution and performance (including attendance, preparedness, participation and candour) at meetings of our Board and Board committees. With the adoption of the Board Diversity Policy as described in the section “Board Diversity Policy” under “Principle 2: Board Composition and Guidance”, our NC will also take into account diversity considerations by reference to the Board Diversity Policy. This ensures that the Board composition reflects an appropriate mix having regard to skills, experience, expertise, diversity and independence, which enables our Board to stay engaged and agile in meeting the needs of our Group.

In relation to the appointment of a new Director, potential candidates may be proposed by existing Directors, Management or through third-party referrals. External consultants are engaged to assist with the selection process, if necessary. As part of the process, short-listed candidates will be required to furnish their curriculum vitae stating in detail (among other things) their educational and professional qualifications, working experience, employment history, current and past directorships and current principal commitments and, in the case of a candidate being considered for appointment as a Non-Executive and Independent Director, factors that will affect independence. Our NC takes an active role in screening short-listed candidates, including interviewing the candidates. Our NC will carefully evaluate each potential candidate and such evaluation will, where appropriate, extend to whether he or she has fully discharged his or her duties and obligations during his or her previous directorship of any listed company, has previously served on the board of any company with an adverse track record or a history of irregularities, has been under investigation by any professional association or regulatory authority, or has resigned from the board of any such company for any reason that may cast doubt on his or her ability to act as a Director.

As part of the Board renewal process, Lim Chai Hock Clive, who is also our Controlling Shareholder and had served on our Board since 1999, stepped down from our Board in July 2023. Lim Yong, who is Lim Chai Hock Clive’s son, was appointed as a Non-Executive and Non-Independent Director.

Shailesh Anand Ganu was proposed by our existing Directors to be appointed as an additional Director to our Board in view of his extensive experience in the areas of executive compensation, board advisory and ESG. He has been appointed as Chairman of the newly established RSC. He was identified through internal referral, and no search consultant was involved in the process of his appointment.

Lim Shuh Moh Vincent retired as President & CEO in FY2023 after leading our Company for 10 years. Our Company engaged an external independent international executive search firm to source for a suitable candidate. After an extensive search, Pauline Wong Mae Sum was eventually identified from within our Group to assume the position of President & CEO. In making this decision, our NC and our Board had considered her qualifications, experience and performance previously as Senior Vice President, TeleChoice, in leading the Personal Communications Solutions Services Division.

Our Constitution requires one-third of our Directors to retire and subject themselves to re-election by shareholders at every AGM (“one-third rotation rule”). In other words, no Director stays in office for more than three (3) years without being re-elected by our shareholders.

In addition, a newly-appointed Director is required to submit himself or herself for retirement and re-election at the AGM immediately following his/her appointment. Thereafter, he or she is subject to the one-third rotation rule.

Pursuant to the one-third rotation rule, Stephen Geoffrey Miller, Ho Koon Lian Irene and Ronald Seah Lim Siang will retire by rotation at the AGM to be held on 24 April 2024. Stephen Geoffrey Miller and Ronald Seah Lim Siang will be subject to re-election by shareholders at the AGM. Ho Koon Lian Irene, who has served on our Board since May 2015, has decided not to seek re-election as a Director as part of the Board renewal process. Pursuant to Regulation 105 of our Company’s Constitution, Pauline Wong Mae Sum, Shailesh Anand Ganu and Lim Yong will retire and will be subject to re-election by shareholders at our AGM to be held on 24 April 2024 as they were appointed in the course of FY2023.

Upon re-election:

• Stephen Geoffrey Miller will remain as Deputy Chairman and Non-Executive and Non-Independent Director, and a member of our EC.
• Ronald Seah Lim Siang will cease to be a Non-Executive and Independent Director and will be re-designated as a Non-Executive and Non-Independent Director, pursuant to the transitional arrangements applicable to an independent director who has served as an independent director for an aggregate period of more than 9 years. He will remain as Chairman of our Board and our EC, and a member of our RSC after conclusion of the AGM to be held on 24 April 2024. With the re-designation of our Chairman, Ronald Seah Lim Siang, as a Non-Executive and Non-Independent Director upon the conclusion of the AGM to be held on 24 April 2024, our Board will appoint two (2) additional Non-Executive and Independent Directors, to take effect immediately after the conclusion of the AGM, so that our Board will eventually comprise a majority of Non-Executive and Independent Directors. In addition, a Lead Independent Director will also be appointed as our Chairman will be a Non-Executive and Non-Independent Director. The appointments and resulting changes to the composition of the Board and the Board Committees are expected to be finalised and announced before conclusion of the AGM.
• Pauline Wong Mae Sum will remain as an Executive Director and President & CEO.
• Shailesh Anand Ganu will remain as a Non-Executive and Independent Director and Chairman of our RSC.
• Lim Yong will remain as a Non-Executive and Non-Independent Director and a member of our RSC.

Our Board has considered our NC’s recommendation and assessment of each of these Director’s skills, knowledge and experience, as well as the overall size, composition and diversity of skillsets of our Board, and is satisfied that each of these Directors will continue to contribute to our Board and to the combination of skills, knowledge, experience and diversity required on our Board. Please see the section “Additional Information in relation to Directors Standing for Re-election” for further information.

Assessment of independence

Our Board, taking into account the views of our NC, assesses the independence of each Director annually in accordance with the guidance in the Code of Corporate Governance and Practice Guidance. In accordance with the Code of Corporate Governance, a Director is considered independent if he or she is independent in conduct, character and judgement, and has no relationship with our Company, our related corporations, our substantial shareholders or our officers that could interfere, or be reasonably perceived to interfere, with the exercise of his or her independent business judgement in the best interests of our Company.

Our Board and our NC also take into account the existence of relationships or circumstances, including those identified by the Practice Guidance and the Listing Manual, in assessing the independence of a Director. Such relationships or circumstances include the employment of a Director by our Company or any of our related corporations during the financial year in question or in any of the previous three (3) financial years, a Director being on our Board for an aggregate period of more than nine (9) years, the acceptance by a Director of any significant compensation from our Company or any of our subsidiaries for the provision of services during the financial year in question or the previous financial year, other than compensation for board service, and a Director being related to any organisation to which our Company or any of our subsidiaries made, or from which our Company or any of our subsidiaries received, significant payments or material services during the financial year in question or the previous financial year.

To facilitate the assessment of the independence of our Directors, each Director is required to promptly disclose to our Board any relationship or change in circumstances which may lead to his or her status as Non-Executive and Independent Director being affected.

Based on the declarations of independence provided by our Directors and taking into account the guidance in the Code of Corporate Governance and the Practice Guidance, our Board has determined that Ronald Seah Lim Siang, Cheah Sui Ling, Yeo Siew Chye Stephen and Shailesh Anand Ganu are independent. However, as noted above, Ronald Seah Lim Siang will cease to be considered independent upon the conclusion of the AGM to be held on 24 April 2024.

Assessment of Directors’ Commitment

Our NC assesses annually whether a Director is able to and has been adequately carrying out his or her duties and responsibilities as a Director and, in particular, whether a Director who serves on multiple boards is able to commit the necessary time and attention to serve on our Board. In this regard, our NC has established an internal guideline that (a) a Director holding a full time position should not be a director of more than four (4) listed companies; and (b) a “professional” Director should not be a director of more than six (6) listed companies. However, our NC recognises that the individual circumstances and capacity of each Director are different and there may be circumstances in which a different limit on board appointments is appropriate. As such, our NC has the discretion to deviate from this guideline on a case-by-case assessment.

The directorships of our Directors in other listed companies and their principal commitments are set out in their respective profiles on pages 6 to 9 of this Annual Report. All of our Directors currently fall within the internal guideline in terms of directorships in other listed companies.

Our NC is of the view that, during FY2023, our Directors have devoted sufficient time and attention to the affairs of our Company and have been able to discharge their duties and responsibilities as Directors effectively. Our NC has also reviewed and is satisfied that none of our Directors held such a significant number of listed company directorships and other principal commitments as to potentially affect their ability to serve on our Board and, in particular, that those Directors who hold multiple listed company directorships and other principal commitments have devoted sufficient time and attention to the affairs of our Company and adequately discharged their duties and responsibilities as Directors during FY2023.

Principle 5: Board Performance

We believe that Board performance is ultimately reflected in our business performance. Our Board should ensure compliance with applicable laws and all Board members should act in good faith, with due diligence and care, in our best interests and the best interests of our shareholders.

Our Board, through the delegation of its authority to our NC, has used its best efforts to ensure that our Directors are equipped with the necessary background, experience and expertise in technology, business, finance and management skills to make valuable contributions and that each Director brings to our Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

Our NC has implemented a framework for assessing Board performance and diversity, and undertakes regular reviews of the performance and diversity of our Board, our Chairman, our Board committees and each individual Director, with inputs from our other Board members. The results of the Board appraisal exercise, which is conducted at least once annually, are circulated to all Directors for information and feedback. The information gleaned from the completed Board appraisal exercise(s) are taken into consideration by our NC, in determining whether there are any changes needed to the appraisal system, prior to the commencement of the next Board appraisal cycle.

Our Board has completed its appraisal exercise for FY2023. Our NC is satisfied that for FY2023, our Board and Board committees were effective in the discharge of their respective duties and responsibilities. The results of our NC’s assessment were communicated to and accepted by our Board. No external facilitator was used in FY2023.

 

 

(B) Remuneration Matters

Principle 6: Procedures for Developing Remuneration Policies

Principle 7: Level and Mix of Remuneration

Principle 8: Disclosure on Remuneration

Remuneration Committee

We believe that a framework of remuneration for our Senior Management and key staff should not be taken in isolation. It should be linked to the development of our Senior Management and key staff to ensure that there is a continual development of talent and renewal of strong and sound leadership for our continued success. For this reason, our RC oversees the compensation package for our Senior Management and key staff.

Our RC is responsible for reviewing cash and long-term incentive compensation policies for our President & CEO, Senior Management and key staff. Our RC is chaired by a Non-Executive and Independent Director, Ronald Seah Lim Siang, and also comprises Yeo Siew Chye Stephen (Non-Executive and Independent Director) and Stephen Geoffrey Miller (Non-Executive and Non-Independent Director). The members of our RC (including the Chairman) are all Non-Executive Directors, a majority of whom (including the Chairman) are Non-Executive and Independent Directors. From time to time, we may co-opt an outside member into our RC to provide additional perspectives on talent management and remuneration practices.

Our RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. Aon Solutions Singapore Pte. Ltd. (“Aon”) was appointed to provide professional advice on certain human resource matters. Aon only provides human resource consulting services to our Company and has no other relationships with our Company. In its deliberations, our RC takes into consideration industry practices and norms in compensation. Our Executive Director and President & CEO is not present during the discussions relating to her own compensation, and terms and conditions of service, and the review of her performance. However, our Executive Director and President & CEO will be in attendance when our RC discusses the policies and compensations of our Senior Management and key staff, as well as major compensation and incentive policies such as share options, stock purchase schemes, framework for bonus, staff salary and other incentive schemes.

All decisions at any RC meeting are decided by a majority of votes of RC members present and voting (the decision of our RC shall at all times exclude the vote, approval or recommendation of any member having a conflict of interest in the subject matter under consideration).

Our RC is guided by its terms of reference which are aligned with requirements under the Code of Corporate Governance.

Our RC’s responsibilities include:

1. reviewing and recommending to our Board the cash and long-term incentive compensation policies and framework and fee schedule for Directors and Key Management Personnel of our Company;
2. administering and reviewing any proposed amendments to the TeleChoice Restricted Share Plan, the TeleChoice Performance Share Plan and such other similar share schemes or plans that may be adopted by our Company from time to time;
3. reviewing and recommending to our Board for approval, on an annual basis, the specific remuneration packages of each Director and the Key Management Personnel of our Company. Where our RC deems appropriate, it may, in consultation with the Chairman of our Board, make the relevant recommendations in respect of the remuneration of Director or Key Management Personnel, to the entire Board for approval; and
4. undertaking such other reviews and projects as may be requested by our Board and report to our Board its findings from time to time on matters which require the attention of our RC.

The term “Key Management Personnel” means the President & CEO and other persons having authority and responsibility for planning, directing and controlling the activities of our Company.

Management Remuneration Policy and Framework

Remuneration for Key Management Personnel comprises a fixed component, a variable cash component, a share-based component and benefits-in-kind, as elaborated below:

• A.Fixed Component:

  The Fixed Component comprises the annual base salary, annual wage supplement and monthly allowances.

• B. Variable Cash Component:

  The Variable Cash Component, including the Performance Bonus and the Discretionary Bonus, is a remuneration component linked to the achievement of annual performance targets for each Key Management Personnel as agreed with our Board at the beginning of each financial year. Performance objectives aligned to the overall business metrics and strategic goals of our Company are cascaded down throughout the organisation through the use of Performance Scorecards, thereby creating greater alignment between the performance of our Company, business units and the individual employees. These performance objectives could be in the form of both quantitative and qualitative measures which are aligned to our Company’s business strategy. In determining the final payout for each Key Management Personnel, the RC considers the overall performance of our Company, funding affordability and individual performance.

• C. Share-Based Component:

  The aggregate number of new shares to be issued, when aggregated with existing shares (including treasury shares, if any, and cash equivalents) delivered and/or to be delivered pursuant to the TeleChoice Restricted Share Plan (as amended) (“TeleChoice RSP”) and the TeleChoice Performance Share Plan (as amended) (“TeleChoice PSP”) (collectively referred to as “Share Plans”) then in force, shall not exceed fifteen per cent (15%) of the total number of issued shares (excluding treasury shares and subsidiary holdings, if any) from time to time. To align the interest of the Key Management Personnel and that of shareholders, the Key Management Personnel are required to retain a certain percentage of shares acquired through the Share Plans, up to the lower of: (1) a percentage of total number of shares acquired under the Share Plans for FY2007 and onwards based on position level; or (2) the number of TeleChoice shares to be retained in order to meet the minimum value, which is set at a percentage of annual base salary based on position level.

  Please refer to the section on Equity Compensation Benefits in the Directors’ Statement on pages 116 to 119 of this Annual Report for the details of the Share Plans as well as awards granted under the Share Plans.

  TeleChoice RSP
  Under the TeleChoice RSP, conditional awards vest over a three-year period, once the RC is, at its sole discretion, satisfied that the performance and extended service conditions are attained. For RSP grants for 2017 onwards, the total number of shares to be awarded depends on the level of attainment of the individual performance targets.

  TeleChoice PSP
  Under the TeleChoice PSP, conditional awards of shares are granted. Awards represent the right of a participant to receive fully paid shares upon the participant achieving certain pre-determined performance targets which are set based on corporate objectives aimed at sustaining longer-term growth. After the awards vest, the shares comprised in the awards are issued at the end of the performance and/or service period once our RC is, at its sole discretion, satisfied that the prescribed performance targets have been achieved. The actual number of shares given will depend on the level of achievement of the prescribed performance targets over the performance period, currently prescribed to be a three-year period. No shares will be delivered if the threshold performance targets are not achieved, while up to 1.5 times the number of shares that are the subject of the award will be delivered if the stretched performance targets are met or exceeded. The performance measures used in the TeleChoice PSP grants are Total Shareholder Return against Cost of Equity Hurdles (i.e. measure of absolute performance) (“ATSR”), Relative Total Shareholder Return against the FTSE Straits Times All Share Index (i.e. measure of relative performance), and Return on Capital Employed (i.e. measure of capital efficiency). For the purpose of grant of awards under the TeleChoice PSP in FY2023, our RC decided to replace the performance measure of ATSR with net profit before tax (“NPBT”), as it was felt that a non-market metric such as NPBT will be better able to motivate executives and achieve the objectives of the TeleChoice PSP. Our Company has attained an achievement factor which is reflective of not meeting the pre-determined target performance levels based on the performance period from FY2021 to FY2023.ng the pre-determined target performance levels based on the performance period from FY2019 to FY2021.

• D. Benefits-In-Kind:

  Benefits provided are comparable with local market practices and include non-cash benefits such as leave, medical benefits and handphones.

In performing the duties as required under its terms of reference, our RC ensures that remuneration paid to the Key Management Personnel is strongly linked to the achievement of business and individual performance targets, industry practices and compensation norms and the need to ensure the continuing development of talents. The performance targets as determined by our RC are set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both short-term and long-term quantifiable objectives. Our RC also considers the tight talent market for Senior Management in setting total compensation levels. Our RC is satisfied that the level and mix of remuneration is appropriate and is aligned with pay-for-performance principles.

Under the Code of Corporate Governance, the compensation system should take into account the risk policies of our Company, be symmetric with risk outcomes and be sensitive to the time horizon of risks. Our RC has reviewed the various compensation risks that may arise and introduced mitigating policies to better manage risk exposures identified. Our RC also undertakes periodic reviews of the compensation related risks.

From FY2014, our Company has implemented a contractual “Clawback” provision in the event that an Executive Director or Key Management Personnel of our Company engages in fraud or misconduct, which results in restatement of our Company’s financial results or a fraud/misconduct resulting in financial loss to our Company. Our Board may pursue to reclaim the unvested components of remuneration from an Executive Director or Key Management Personnel from all incentive plans for the relevant period, to the extent such incentive has been earned but not yet released or disbursed. Our Board, taking into account our RC’s recommendation, can decide whether and to what extent, such recoupment of the incentive is appropriate, based on the specific facts and circumstances of the case.

Remuneration of Management

Details of remuneration paid to our President & CEO and top five (5) Key Management Personnel for FY2023 are set out in Table 2 below. The table below reflects more than five (5) Key Management Personnel as it includes Key Management Personnel who have retired or resigned and Key Management Personnel appointed in their place in FY2023.

Table 2: FY2023 – President & Chief Executive Officer and Top Five (5) Key Management Personnel’s Remuneration

Notes:

1. Remuneration Bands:
   “A” refers to remuneration between S$1 and S$250,000.
   “B” refers to remuneration between S$250,001 and S$500,000.
   “C” refers to remuneration between S$500,001 and S$750,000.
   “D” refers to remuneration between S$750,001 and S$1,000,000.
2. Lim Shuh Moh Vincent retired as President & CEO with effect from 14 October 2023. The information reflects his remuneration for the period up to 14 October 2023.
3. The information reflects Pauline Wong Mae Sum’s remuneration as Senior Vice President, Personal Communications Solutions Services Division prior to 14 October 2023, and as President & CEO and concurrently Executive Director with effect from 14 October 2023.
4. Lee Yoong Kin resigned as Senior Vice President, Network Engineering Services Division with effect from 30 April 2023. The information reflects his remuneration up to 30 April 2023.
5. David Ho resigned as Senior Vice President, Info-Communications Technology Services Division with effect from 3 January 2024.
6. The information reflects Jessie Sng’s remuneration as Vice President, Personal Communications Solutions Services Division prior to 1 October 2023, and as Senior Vice President, Personal Communications Solutions Services Division with effect from 1 October 2023.
7. The information reflects Suwanto Santoso’s remuneration as Vice President, Network Engineering Services Division prior to 1 October 2023 and as Senior Vice President, Network Engineering Services Division with effect from 1 October 2023.
8. Retired as Vice President, Human Resource, with effect from 31 December 2023.

For FY2023, the aggregate total remuneration paid to the President & CEO and top five (5) Key Management Personnel (who are not Directors) (including Key Management Personnel who have retired or resigned and Key Management Personnel appointed in their place) amounted to approximately $3,746,706.

For competitive reasons, we have disclosed the remuneration of our Executive Director and President & CEO only in bands of $250,000. Our Board notes that this Report has already disclosed the policy and framework for remuneration of Management, including details on the different components of the remuneration. Our Board is of the view that the disclosure of such information, together with disclosure of the remuneration of our Executive Director and President & CEO in bands of $250,000 with a breakdown of the level and mix of the remuneration in the above table, provide shareholders with sufficient insight into the compensation of our Executive Director and President & CEO and is consistent with the intent of Principle 8.

For FY2023, there were no termination, retirement and post-employment benefits granted to Key Management Personnel, except for a one-off ex-gratia payment to each of Lim Shuh Moh Vincent and Goh Song Puay upon their retirement in recognition of their dedication and contribution that was approved by the RC.

There is no employee who is a Substantial Shareholder, or an immediate family member of a Director or the President & CEO or a Substantial Shareholder, whose remuneration exceeds $100,000 a year.

Remuneration for Non-Executive Directors

We remunerate our Non-Executive Directors with Directors’ fees which take into account the nature of their responsibilities. The remuneration structure is based on a scale of basic retainer fees as Director and additional fees for serving on Board Committees as set out in Table 3 below. The Directors’ remuneration for FY2023 will be subject to shareholders’ approval at the forthcoming AGM.

Table 3: FY2023 – Scale of Fees

In respect of FY2023, the NC and the RC had the same members, i.e. Ronald Seah Lim Siang as Chairman, and Yeo Siew Chye Stephen and Stephen Geoffrey Miller as members. They have agreed to waive their fees as Chairman and members of the NC, and will receive only fees as Chairman and members of the RC. They will continue to receive fees as members of our Board and other Board Committees (where relevant).

To align the interests of our Directors to that of our shareholders, Directors who served on our Board during FY2023 (other than Lim Chai Hock Clive and Lim Yong, in respect of whom please refer to the paragraph below) will be remunerated as to approximately 70 percent (70%) of his/her total Director’s remuneration in cash and approximately 30 percent (30%) of his/her total Director’s remuneration in the form of a restricted share award pursuant to the TeleChoice RSP. The number of shares to be awarded will be based on the volume-weighted average price (“VWAP”) of a share listed on the SGX-ST over the 14 market days commencing on (and including) the first ex-dividend date that immediately follows the date of this AGM (and in the event that no dividend is declared at such last concluded AGM, the VWAP of a share listed on the SGX-ST over the 14 market days commencing after the date of such last concluded AGM). The number of shares to be awarded will be rounded down to the nearest thousand shares, and any residual balance settled in cash. The restricted share awards will consist of the grant of fully paid shares, without any performance or vesting conditions attached. However, in order to encourage alignment of interests of our Directors with the interests of shareholders, a Director is required to hold such number of shares equivalent to at least (a) the prevailing annual basic Board retainer fee, based on the VWAP of a share listed on the SGX-ST over the 14 market days from (and including) the first ex-dividend date (if any) following the date of our Company’s last concluded AGM (and in the event that no dividend is declared at such last concluded AGM, the VWAP of a share listed on the SGX-ST over the 14 market days commencing after the date of such last concluded AGM); or (b) the total number of shares awarded to that Director under the TeleChoice RSP (as amended) for FY2013 and onwards, whichever is lower. Notwithstanding the foregoing, a Director is permitted to dispose of all of his or her shares after the first anniversary of the date of his or her cessation as a Director of our Company.

In relation to Lim Chai Hock Clive, he has resigned as a Director with effect from 7 July 2023 and will be entitled to a pro-rated amount of his Director’s remuneration. In relation to Lim Yong, he was appointed as a Director with effect from 7 July 2023 and will be entitled to a pro-rated amount of his Director’s remuneration. It is proposed that the entire amount of the pro-rated Director’s remuneration of each of Lim Chai Hock Clive and Mr Lim Yong for FY2023 be paid to him in cash in full. Lim Chai Hock Clive is a controlling shareholder of our Company, while Lim Yong is the son, and therefore an associate, of Lim Chai Hock Clive. As such, the approval of independent shareholders by way of a separate resolution for the grant of the specific number of share awards to each of Lim Chai Hock Clive and Lim Yong is required under Rule 853 of the Listing Manual. However, as the number of share awards to be granted to Lim Chai Hock Clive and Lim Yong would have been computed only after the date of the AGM (as described above), such number of awards would not be known until after the AGM, and it is therefore not possible to seek approval for the grant of the specific number of share awards to them at the AGM. In view of the difficulties that our Company would face in complying with Rule 853 of the Listing Manual for the grant of share awards to Lim Chai Hock Clive and Lim Yong, our Company is therefore proposing to pay them in cash in full instead.

The following Table 4 shows the total composition of Directors’ remuneration for FY2023.

Table 4: FY2023 – Directors’ Remuneration

 

 

(C) Accountability and Audit

Principle 9: Risk Management and Internal Controls

Our Board has overall responsibility for the management of risks, including the determination of the nature and extent of the significant risks which our Company is willing to take in achieving its strategic objectives and value creation. Prior to the establishment of our RSC in July 2023, our AC assisted our Board in carrying out its responsibility of overseeing our Group’s risk management and internal controls.

In July 2023, our Board established the RSC as a new Board committee to assist our Board in fulfilling its oversight responsibilities in relation to risk management and sustainability. Our RSC will also work together with our AC to review the adequacy and effectiveness of our Company’s internal controls and risk management systems, including financial, operational, compliance and information technology controls, with our AC focusing primarily on financial-reporting risks.

Our RSC is chaired by a Non-Executive and Independent Director, Shailesh Anand Ganu, and also comprises Ronald Seah Lim Siang (Non-Executive and Independent Director) and Lim Yong (Non-Executive and Non-Independent Director).

Our RSC will review and assess our Company’s risk management framework, policies and processes, identify and evaluate key risks, and provide guidance and recommendations to enhance our Company’s sustainability practices.

Our RSC’s responsibilities include:

1. identifying and inventorising all risks faced by our Group but our RSC may direct oversight of certain categories of risks to be allocated to other Board committees as appropriate, assessing and monitoring such risks and identifying and evaluating the effectiveness of risk mitigation strategies;
2. maintaining oversight of the sustainability reporting of our Company, considering ESG risks and opportunities for our Group and monitoring the integration of ESG considerations into our Company’s decision-making process.

Our Group has in place an Enterprise Risk Management (“ERM”) Framework, which governs the process of identification, prioritisation, assessment, management and monitoring of key financial, operational, compliance and IT risks to our Group. The key risks of our Group are deliberated by Management and reported to our RSC. Integral to the ERM is a Group-wide system of internal controls.

Our Board, with the advice of our RSC, determines our Group’s level of risk tolerance and risk policies and our RSC and AC oversee Management in the design, implementation and monitoring of the risk management and internal control systems. Our Board, our RSC and our AC are supported by Management and various independent professional service providers such as external and internal auditors to review the adequacy and effectiveness of our Group’s risk management and internal controls systems.

As part of the risk management process, Management will identify the key risk factors that are faced by our Group in our business and operations, categorise them according to financial, operations, compliance and IT risks, rank the risk factors in terms of their relative importance, likelihood of occurrence and potential impact to our Group should such risks materialise, and implement the internal controls and other risk mitigating practices which may be in place to address such risks. The risk management framework is reviewed, considered and approved by our RSC at least on a half-yearly basis and as and when it becomes necessary to do so.

Management, under the supervision of our RSC, is responsible for the effective implementation of risk management strategies, policies and processes based on the risk management framework to facilitate the achievement of business plans and goals. Key risks, mitigating measures and management actions are continually identified, reviewed and monitored by Management.

Our internal auditors, Ernst & Young Advisory Pte. Ltd., conduct audits that involve testing the effectiveness of the material internal control systems within our Group, relating to financial, operations, compliance and IT risks. Any material non-compliance or lapses in internal controls are reported to our AC and RSC (as appropriate), including the remedial measures recommended to address the risks identified. Our AC and RSC (as appropriate) also review the adequacy and timeliness of the actions taken by Management in response to the recommendations made by our internal auditors. To facilitate their work, our internal auditors are invited to attend all AC meetings so that they would be familiar with the business and operations of our Group and better understand the key risks faced by our Group and concerns of our AC. Our AC will work together with our RSC, where necessary, to address any issues identified in the course of the internal audit. In addition, control self-assessment in respect of the key risk factors identified in the risk management framework is conducted by Management on a periodic basis to evaluate the adequacy and effectiveness of the risk management and internal control systems.

Our Board, with the concurrence of our RSC and our AC, commented that our Group’s internal controls and risk management systems are adequate and effective in addressing the financial, operational, compliance and IT risks of our Group. Our Board acknowledges that it is responsible for our Group’s overall risk management and internal control system framework, but recognises that there is no system that will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

Our Board has received the following assurances from:

• the President & CEO and the Chief Financial Officer (“CFO”) that the financial records have been properly maintained and the financial statements give a true and fair view of our Group’s operations and finances; and
• the President & CEO and other relevant Key Management Personnel that our Group’s risk management and internal control systems are effective and adequate.

Principle 10: Audit Committee

Audit Committee

In FY2023, our AC comprised three (3) Non-Executive Directors, two of whom (including the Chairman) were Non-Executive and Independent Directors. Our AC members were Nicholas Tan Kok Peng as Chairman, Cheah Sui Ling and Ho Koon Lian Irene. Our AC members brought with them invaluable professional and managerial expertise in the accounting and financial sectors.

After Nicholas Tan Kok Peng stepped down from our Board at the end of FY2023 pursuant to the Change in Board Composition, Cheah Sui Ling was appointed as Chairman of our AC and our Non-Executive and Independent Director, Yeo Siew Chye Stephen, was appointed as a member of our AC. Ho Koon Lian Irene continues to be a member of our AC.

Our AC’s responsibilities include reviewing our annual audit plan, internal audit processes, the adequacy and effectiveness of internal controls and Interested Person Transactions for which there is a shareholders’ mandate renewable annually. In addition, our AC will also work together with our RSC to review the adequacy and effectiveness of our Company’s internal controls and risk management systems, including financial, operational, compliance and information technology controls, with our AC focusing primarily on financial-reporting risks.

Our AC has separate and independent access to the external and internal auditors, without the presence of our President & CEO and other Senior Management members, in order to have free and unfettered access to information that our AC may require.

Our AC has full authority to commission and review findings of internal investigations into matters where there is any suspected fraud or irregularity or failure of internal controls or violation of any law likely to have a material impact on our operating results. Our AC is also authorised to investigate any matter within its charter with the full co-operation of Management. Our AC reviews and approves the half-yearly and annual financial statements and the appointment and re-appointment of the external auditors before recommending them to our Board for approval, and approves the appointment of the internal auditors.

In FY2023, our AC held five (5) meetings and met with the external and internal auditors without the presence of Management, at least once during the year, to discuss matters it believes should be raised privately.

External auditors

Our Board is responsible for the initial appointment of the external auditors. Shareholders then approve the appointment at the AGM of our Company. The external auditors hold office until its removal or resignation. Our AC assesses the external auditors based on the requirements of the Listing Manual as well as other factors such as the performance and quality of its audit and its independence and objectivity, and recommends its appointment to our Board.

Our AC also reviews the nature and extent of non-audit services, if any, provided by the external auditors during the year to assess the external auditors’ independence, adequacy and effectiveness. For details of fees payable to the auditors in respect of audit and non-audit services, please refer to Note 24 of the financial statements on page 175 of this Annual Report. Having noted that no non-audit services were provided by the external auditors in FY2023 that would impair their independence, and that Rules 712 and 715 of the Listing Manual have been complied with, our AC has recommended to our Board that KPMG LLP be nominated for re-appointment as the external auditors at the next AGM. To further maintain the independence of KPMG LLP, our AC ensures that the audit partner in-charge of our Group is rotated every five (5) years. The audit partner in-charge was last rotated for the financial year ended 31 December 2019. None of our Directors (including our AC members) or Senior Management is or has in the past two (2) years been a former partner, director or employee of our Group’s external auditors.

Financial Reporting

The AC reviewed the draft financial statements and half-year results before recommending their approval to our Board. As part of this review, our AC considered significant accounting policies, estimates and significant judgements. Our AC also reviewed reports on findings from internal and external audits.

The key audit matters (“KAM”) in relation to the financial statements considered by our AC and how these were addressed are summarised as follows:

All of the matters considered above were discussed with our Executive Director and President & CEO and our CFO and the external auditors. Our AC was satisfied that each of the matters set out above has been appropriately tested and reviewed by the external auditors and the disclosures relating to each of these matters made in the financial statements were appropriate.

Internal Auditors

The internal audit function of our Group is carried out by the internal auditors, Ernst & Young Advisory Pte. Ltd., an independent firm. The internal auditors are guided by the Standards for Professional Practice of Internal Auditing, prescribed by the Institute of Internal Auditors.

Our AC conducts a review of the adequacy, effectiveness, scope and independence of the internal audit function annually to ensure that the internal auditors have direct and unrestricted access to the Chairman of our Board and our AC and that our Group maintains an effective internal audit function that is adequately staffed and independent of the audited activities. Our AC will work together with our RSC, where necessary, to address any issue identified in the course of the internal audit. Our AC, together with our RSC, is satisfied that the internal audit function is independent, effective and adequately resourced to perform its functions effectively.

The internal auditors report functionally to our AC and administratively to our Executive Director and President & CEO and our CFO. Our AC approves the appointment, termination and remuneration of the internal auditors.

The primary role of the internal audit function is to help to evaluate the adequacy and effectiveness of our Group’s controls and compliance processes. Our Group’s internal audit approach is aligned with our Group’s Risk Management Framework by focusing on key financial and compliance risks. The annual internal audit plan is established in consultation with, but independent of, Management. The annual internal audit plan is then reviewed and approved by our AC. All internal audit findings, recommendations and status of remediation, are circulated to our AC, our Executive Director and President & CEO and relevant Senior Management every quarter.

The internal auditors present the internal audit findings to our AC each quarter. Our AC meets with the internal auditors at least once a year, without the presence of Management. The internal auditors have unfettered access to all our Group’s documents, records, properties and personnel, including access to our AC, and has appropriate standing within our Group.

 

 

(D) Shareholders Rights and Engagement

Principle 11: Shareholder Rights and Conduct of General Meetings

Principle 12: Engagement with Shareholders

Principle 13: Engagement with Stakeholders

Our Company respects and upholds shareholders’ rights to be treated fairly and equally. We uphold and promote the right of shareholders to be sufficiently informed in a timely manner of corporate developments, undertakings and events that impact our Company or our business and shareholder interests. We also engage shareholders through various communication channels consistently.

Shareholder Rights and Conduct of General Meetings

Our Company is committed to ensuring that material information is disclosed in compliance with the Listing Manual, the Code of Corporate Governance and the Practice Guidance on an adequate, accurate and timely basis to facilitate shareholders’ ability to make informed investment decisions.

Our Company also supports the principle under the Code of Corporate Governance to encourage greater shareholders’ participation at general meetings. Separate resolutions are proposed on each separate issue at our general meetings. To enhance transparency in the voting process, our Company has implemented poll voting for all resolutions tabled at our general meetings. A registered shareholder who is not a relevant intermediary may appoint not more than two (2) proxies to attend and vote at our general meetings. A registered shareholder who is a relevant intermediary may appoint more than two (2) proxies to attend and vote at our general meetings, but each proxy must be appointed to exercise the rights attached to a different share or shares held by such shareholder. Our Constitution also confers on our Directors the discretion to approve and implement, subject to appropriate security measures, such voting methods to allow members who are unable to vote in person at any general meetings the option to vote in absentia, including by mail, electronic mail or facsimile. Our Company has not implemented voting in absentia by mail, electronic mail or facsimile due to concerns relating to the authentication of shareholder identity and other related security and integrity issues.

Shareholders are given the opportunity at our general meetings to share their view and raise queries to our Directors and Senior Management on matters relating to our Company and our operations. All Directors together with Senior Management attend our general meetings, and the external auditors are also invited to be present at our general meetings to assist in answering questions from our shareholders relating to the conduct of the audit and the preparation and content of the auditors’ report. The company secretary prepares minutes of our general meetings, which capture the essence of the comments or queries from meeting attendees and responses from our Board and Senior Management. The results showing the number of votes cast for and against each resolution and the respective percentages are announced via SGXNET on the same day of the general meeting. Minutes of general meetings are made available on SGXNET and on our Company’s website, http://www.telechoice.com.sg.

Due to the COVID-19 situation and in accordance with the various legislative measures passed and implemented to allow alternative arrangements for general meetings of companies, we had held our AGM in 2020, 2021 and 2022 by electronic means. In 2023, with the improving COVID-19 situation, we held our FY2022 AGM in physical form for the first time since then. This provided us with the opportunity to meet and interact with, and answer questions from, our shareholders directly. Shareholders were also afforded the opportunity to:

• submit questions in advance; and
• appoint the Chairman of the AGM as proxy to attend, speak and vote on their behalf at the AGM.

All of our Directors as well as our President & CEO attended the AGM.

In 2024, our AGM for FY2023 will be held in a wholly physical format and there will be no option for shareholders to participate virtually. Shareholders may participate in our FY2023 AGM by (a) attending our FY2023 AGM in person; (b) submitting questions to the Chairman of the meeting in advance of, or live at, our FY2023 AGM; and (c) voting at our FY2023 AGM themselves or through duly appointed proxy(ies).

Engagement with Shareholders and Stakeholders

We believe in engaging with shareholders, and analysts and other stakeholders (the “investment community”) consistently. Our Investor Relations (“IR”) team is the main intermediary between the Company and our shareholders and the investment community and facilitates effective and regular communication with them. The IR team also keeps our Board and Senior Management apprised of the investment community’s views and sentiments.

Our Company communicates to our shareholders our major corporate and financial announcements, including first quarter and third quarter business updates, half-year and full-year financial results as well as share price or trade sensitive information, press releases, presentations, and distribution of notices via SGXNET and our Company’s website which is updated on a regular basis. As our Company has been placed on the Watch-List on 5 December 2023, in accordance with Rule 1313(2) of the Listing Manual, we will, while we remain on the Watch-List, provide a quarterly update on our efforts and the progress made in meeting the exit criteria of the Watch-List. Both current information and archives of previously announced information can be found on our Company’s website. Shareholders and the investment community may also opt to sign up for our IR email alert service available on our Company’s website to be kept informed of the latest updates. Shareholders and the investment community may contact the IR team via email at enquiry@telechoice.com.sg who will respond promptly and effectively.

Our Company also actively engages our shareholders via AGM and Extraordinary General Meetings (if necessary) and holds analyst briefings following the release of our half-year and full-year financial results. Annual reports and/or circulars and notices of general meetings are made available to shareholders via electronic communications and/or printed copies. Notices of general meetings are issued to shareholders (including foreign shareholders) at least 14 days prior to the scheduled meetings, providing ample time for shareholders to review the documents ahead of the meetings and appoint their proxies to attend the meetings if they wish. As part of our commitment towards more environmental-friendly and sustainable practices, our annual reports and circulars are available online at our Company’s website.

The Company is cognisant of the importance of generating returns to shareholders. Since FY2004, our Board has set a benchmark to propose and pay annual dividends of at least 30% of our annual net profit after tax, subject to our Group’s earnings, cash flow and capital requirements. In determining the dividend, our Board balances the need for a satisfactory return to shareholders against our Company’s investment requirement to ensure sustainable growth. Any dividend payouts are clearly communicated to shareholders via the financial results and cash dividend announcements through SGXNET and our Company’s website.

Dealing in securities

To help ensure compliance with the applicable securities and insider trading laws, including the best practices set out in the Listing Manual, we have adopted and implemented our Guidelines on Dealing in Securities of TeleChoice (“Guidelines”). We send regular compliance notices to all Directors and employees. In accordance with Rule 1207(19) of the Listing Manual, all our Directors and employees are prohibited from dealing in our securities during the period of two (2) weeks before the respective announcement of our first quarter and third quarter business updates, and one (1) month before the announcement of our half-year and full-year financial results. Restrictions are lifted from the date of the announcement of the respective results. Similar dealing restrictions also apply in our Company’s acquisition of its securities pursuant to its share purchase mandate. All our Directors and employees, and those of our subsidiaries and associates, are advised not to deal in our securities on short term considerations and are also advised to comply with the Guidelines and observe applicable insider trading laws at all times.

WHISTLEBLOWING POLICY

In line with our commitment to a high standard of internal controls and our zero tolerance approach to fraud, we have put in place a whistle blower policy (“Whistleblowing Policy”) providing employees a direct channel to our AC, for reporting misconduct or wrongdoing relating to our Group and its officers, including suspected fraud and possible impropriety in financial reporting, unethical conduct, dishonest practices or other similar matters. Our AC is responsible for overseeing and monitoring whistleblowing pursuant to the Whistleblowing Policy.

We have established a process whereby whistleblowing reports can be sent to our current internal auditor, Ernst & Young Advisory Pte. Ltd. (“EY”), which has been designated as an independent function to channel and escalate all whistleblowing reports to our AC. Upon receipt of any reports, our AC will determine the course of action to take, which may include:

• conducting its own investigation or review;
• instruct the relevant members of Management to conduct investigation or review;
• engage EY to investigate whistleblowing reports made in good faith;
• report the matter to the authorities if there is reason to believe that a crime has been committed.

Based on the results of the relevant investigation or review, our AC will determine what remedial or other action would be appropriate to be taken.

The Whistleblowing Policy aims at encouraging the reporting of misconduct or wrongdoing. The Whistleblowing Policy provides for the confidentiality of the identity of the whistleblower, and also prohibits any form of discrimination, detrimental or unfair treatment, retaliation and/or harassment against a whistleblower.

The Whistleblowing Policy is available on our intranet and website for easy access by all employees and the public.

ANTI-CORRUPTION POLICY

Anti-Corruption Policy

To further emphasise the importance of corporate governance, we have introduced an Anti-Corruption Policy in October 2018 which was subsequently updated in November 2021. All new employees are required to read, understand and be assessed on these policies as part of the onboarding process. There were no incidents of corruption during this period that has a material impact on our Group’s operating results or financial position.