Corporate Governance

INTRODUCTION

This report outlines the main corporate governance practices and procedures adopted by Southern Archipelago Ltd. (“SAL” or “Company” and together with its subsidiaries, the “Group”) with specific reference to the Code of Corporate Governance dated 6 August 2018 (last amended 11 January 2023) (“Code”). The Group and the Board of Directors (“Board”) are committed to ensure and fully supports the Principles and Provisions of the Code that forms part of the continuing obligations as described in the Singapore Exchange Securities Trading Limited’s (“SGX‐ST”) Listing Manual. The Board recognises that sound corporate governance practices are important to the proper functioning of the Group and enhances the interest of all shareholders.

This report describes the Company’s corporate governance practices that were in place throughout the financial year ended 31 December 2024 (“FY2024”), with specific reference to the Code.

The Board is pleased to confirm that the Group has adhered to the Principles and Provisions of the Code, except where otherwise explained. In areas where there are deviations from the Provisions of the Code, appropriate explanations are provided and the Company will continue to assess its needs and implement appropriate measures accordingly.

The Code

The Code is divided into five main sections, namely:
(A) Board Matters
(B) Remuneration Matters
(C) Accountability and Audit
(D) Shareholder Rights and Engagement
(E) Managing Stakeholder

(A) BOARD MATTERS

Principle 1: The Board’s Conduct of its Affairs

The company is headed by an effective Board which is collectively responsible and works with Management for
the long-term success of the company.

As of the date of this report (i.e. 4 April 2025), the Board of Directors of the Company (“Board”) comprises six
(6) members (“Directors”), namely:

Mr. Siaw Lu Howe (Independent Director and Non-Executive Chairman)
Mr. John Lee Yow Meng (Executive Director and Chief Financial Officer)
Mr. Alan Chin Yu (Executive Director)
Mr. Ng Keok Chai (Lead Independent Director)
Mr. Tan Gim Kang, Arran (Non-independent Non-Executive Director)
Mr. Aris Muhammad Rizal (Non-independent Non-Executive Director)

The profile of each Director is presented in the section headed “Board of Directors” of this Annual Report. 

SAL is headed by competent Board members with diversified backgrounds and they collectively bring with them a wide range of experience. Each Director brings to the Board specific industry knowledge and expertise.

Newly appointed Directors will be provided with a formal letter, setting out their duties and obligations and first-time Directors will be required to attend relevant training. The Company has in place general orientation-training programs to ensure that every newly appointed and incoming Director of the Company is familiar with the Group’s operations and governance practices including briefing on the Group’s financial performance, strategies and action plans, corporate strategic direction, policies and activities.

The Company will arrange for newly appointed Director who does not have prior experience as a director of a public listed company in Singapore to attend relevant training courses organised by the Singapore Institute of Directors in accordance with Rule 210(5)(a) of the Listing Manual and Practice Note 2.3.
The Directors are briefed and/or updated regularly on accounting and regulatory changes as well as changing commercial risks, where necessary, including but not limited to: (a) amendments to the SGX-ST Listing Manual and Code of Corporate Governance, (b) changes to the Companies Act 1967, (c) changes to the Financial Reporting Standards and (d) changes to Environmental, Social and Governance reporting requirements. 

The Board acknowledges the dynamic nature of the business landscape and the increasing need for companies to adopt sustainable practices. In line with this, the Board highly values the continuous professional development of its members and encourages them to attend relevant seminars and courses to stay abreast of the latest developments and changes in financial and regulatory requirements, as well as global sustainability trends and their impact on the business environment. The Company recognises the importance of supporting its members’ efforts and is committed to covering the associated costs of these events. By promoting ongoing education and awareness, the Board and Company aim to foster a culture of sustainability and responsible business practices.

Role of the Board of Directors

The Board establishes the corporate strategies for the Group and sets strategic directions and objectives for the Management, supervises them and monitors the performance of these objectives to enhance and build long term sustainable value for shareholders.

The Board has delegated the day-to-day management of the Group to the Management headed by the Executive Directors and Chief Executive Officer to facilitate effective management. The principal functions of the Board are to, inter alia:

• provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human resources are in place for the Group to meet its objectives;
• establish a framework of prudent and effective controls which enables risk to be assessed and managed including safeguarding of the shareholders’ interest and the Group’s assets;
• review and monitor the performance of Management; 
• set the Group’s values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met;
• consider sustainability issues, where applicable, in the formulation of its strategies;
• monitor and review the adequacy of the Group’s internal control systems, risk management systems,compliance and financial reporting systems;
• approve the annual budgets, business plans, major funding proposals, financial restructuring, share issuance, investment and divestment proposals; and
• review the Group’s financial performance.

The Board carries out its function directly or through various committees, which have been set up to support its role.

Each Director is expected, in the course of carrying out his duties to act in good faith and consider the interests of the Company at all times. To support this, the Board practices a code of conduct and ethics that all Directors generally follow.

The Board recognises the importance of setting the right tone-from-the-top and fostering a culture of integrity and accountability throughout the organisation. Directors facing conflicts of interest are expected to recuse themselves from discussions and decisions involving such issues to avoid any potential bias or influence on the decision-making process. By adhering to these standards, the Board ensure that their decisions are always made with the Company’s best interests in mind, and that the operations are conducted in a transparent and responsible manner.

The Board has established and delegated certain specific responsibilities to the following four (4) committees
to support the role of the Board:

• Nominating Committee (“NC”);
• Remuneration Committee (“RC”);
• Audit Committee (“AC”); and
• Environmental, Social and Governance Committee (“ESGC”)

The Board Committees function within clearly defined terms of references and operating procedures, which are reviewed on a regular basis or at least once a year. The effectiveness of the Board Committees is also constantly monitored and reviewed by the Board. The roles and responsibilities of the Board Committees are provided for in the latter sections of this report.

The Board accepts that while the Board Committees have the authority to examine particular issues and will report to the Board their decisions and recommendations, the ultimate responsibility for the final decision on all matters lies with the entire Board.

Matters Requiring the Board’s Approval

The matters which require the Board’s approval, include but are not limited to:

• statutory requirements such as approval of annual report and financial statements;
• other requirements such as interim and annual results announcements;
• financial objectives and financial performance of the Group;
• corporate strategic direction, strategies and action plans;
• the setting of policies and key business initiatives;
• major funding, material acquisition, investments, disposal and divestments and other material transactions; and
• the appointment and removal of the company secretaries.

The Board has established financial authorisation and proper approval processes pertaining to the operating and capital expenditures, including acquiring and disposing of assets and investments. This includes proper procedures, guidelines, handbooks, policies and forms that are set forth and established for guidance, monitoring and review.

Meetings of Board and Board Committees

The Board holds at least two meetings each year to approve the half year and full year results announcement of the Group. The dates of all the Board and Board Committee meetings, as well as the Annual General Meeting(“AGM”), are scheduled in advance each year, in consultation with the Board. Ad-hoc meetings are convened as and when the circumstances require. In addition to these meetings, special corporate events and actions requiring the Board’s immediate approval were discussed over electronic mails and telephonic conference.The Board and Board Committees may also make decisions by way of circulating written resolutions. The Company’s Constitution allows the Board to hold teleconference and video-conference meetings.

The Board and Board Committee meetings this year were conducted through a mixture of physical sessions and video-conferences. The number of Board and Board Committee meetings held in FY2024 and the attendance of each Director where relevant are set out below. Directors who are not members of the Board Committees had attended the Board Committee meetings by invitation:

* By invitation

Multiple Board Representations

All directors are required to declare their board representations. When a Director has multiple board representation, the NC will consider whether the director is able to adequately carry out his duties as a Director of the Company, taking into consideration the director’s number of listed company board representations and other principal commitments. The NC has reviewed and is satisfied that sufficient time and attention had been given by the Directors to the affairs of the Company during FY2024.

The Board is provided with Board papers in advance before each Board Meeting, giving the background, explanatory information and justification for each decision and mandate sought by the Management, including, where applicable, pertinent financials, to enable them to be properly informed of matters to be discussed and/or approved.

All Directors have separate and independent access to the Management team of the Group at all times and can communicate directly with the Management, the officers, the Company Secretary and external auditors as well as internal auditors and environment, social and governance consultant on all matters as and when they deem necessary. They have full access to the Company’s records and information and may obtain independent legal and other professional advice if they deem necessary in the discharge of their responsibilities properly. Such expenses are to be borne by the Company.

The Company Secretary and/or representative(s) from the Company Secretary’s office will attend the Board Meetings and Board Committee meetings and are responsible for recording the proceedings. In addition, the Company Secretary and/or her representative(s) will assist the Chairman in ensuring that Board procedures are followed and reviewed so that the Board functions effectively, and the Company’s Constitution and relevant rules and regulations, including requirements of the Singapore Companies Act and the SGX-ST, are complied with. The appointment and removal of the Company Secretary are decided by the Board as a whole.

Principle 2: Board Composition and Guidance

The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.

Board Composition and Independent Directors

For FY2024, the Board comprises six (6) Directors, two (2) of whom are Executive Directors, two (2) are Non-Independent Non-Executive Directors and two (2) are Independent Non-Executive Directors.

The Company has complied with provisions 2.3 of the Code, as non-executive directors make up the majority of the Board. 

The composition of the Board takes into consideration the nature and scope of the Group’s operations to ensure diversity and relevant skill sets for effective decision making. The Directors have varied qualifications and expertise in finance, accounting, business management, industry knowledge and strategic planning. Taking into account the scope and nature of the Group’s operations as well as the diversified background and experience of the Directors, the NC and the Board are satisfied that the composition of the Board is of an appropriate size to facilitate effective decision making in the best interests of the Company. The NC is also of the view that the current Board comprises persons who as a group provide capabilities required for the Board to be effective. The Board is aware that gender diversity on the Board is one of the recommendations under the Code to provide an appropriate balance of diversity. Although there is currently no female Director appointed to the Board, the Board does not rule out the possibility of appointing a female Director if a suitable candidate is nominated for the Board’s consideration

The Company has built a diverse, inclusive and collaborative culture. The Company continue to recognises and practices diversity on the Board, and views diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. In reviewing the Board composition and appointments, the NC takes into consideration diversity of skills, experience, background, gender, age, ethnicity and other relevant factors although merit remains the key driver.

The Company has adopted the Code’s definition of “Independent Director” and its guidance in respect of relationships which would deem a director to be regarded as non-independent. An Independent director is one who is independent in conduct, character and judgement, and has no relationship with the Company, its related corporations, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of his independent business judgement in the best interests of the Company. Two of the Board members, including the Chairman of the Board are Independent Directors, which brings a strong and independent element to the Board. The functions of examining and assessment of the Board are delegated to the NC and its responsibilities and assessment are further discussed under the Nominating Committee heading, Principle 4 and Principle 5 as below.

As part of good corporate governance, the NC also reviews annually the independence of Independent Directors to ascertain the compliance to the Code’s definition of independence. Conversely, the NC has the discretion to determine that a Director is non-independent.

In addition, the Non-Executive Directors are constructively reviewing and assisting the Board to facilitate and develop proposals on strategy and review the performance of the Management in meeting on agreed objectives and monitoring the reporting of performance. On the effectiveness, the Independent Directors have the full access and co-operation from the Company’s Management and officers including on a regular basis, presentation and review of the financial performance. The Independent Directors have full discretion to have separate meetings and to invite any Directors or officers to the meetings and to meet without the presence of Management as and when warranted by certain circumstances.

During FY2024, the Independent Directors met at least once in the absence of key management personnel to discuss matters of significance. The meetings were conducted through a mixture of physical sessions and video-conferences.

The Independent Directors namely Mr. Ng Keok Chai and Mr. Siaw Lu Howe has each confirmed that they do not have any relationship with the Company, its related corporations, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent business judgment with a view to the best interest of the Company.

The NC assesses the independence of each Director in accordance with the guidance provided in the Code and is satisfied that Mr. Ng Keok Chai and Mr. Siaw Lu Howe each meets the criterion of independent as set forth and each of them exercise independent business judgement in the best interests of the Company and its shareholders, when discharging his duties as a Director of the Company.

As at the date of this Report, none of the Independent Directors have served on the Board for more than nine (9) years.

The Board will continue to review the composition of the Board to ensure that it remains balanced and effective, and that it has the necessary skills and experience to support the Company’s growth and strategy. The Board will make necessary arrangements to release relevant announcement(s), as and when applicable to the SGX-ST for any changes of the Board composition.

Principle 3: Chairman and Chief Executive Officer (“CEO”)

There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.

The roles of the Chairman and CEO are separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making.

Mr. Siaw Lu Howe is the Independent Non-Executive Chairman (“Chairman”) of the Company and he leads the Board and is responsible for the management of the Group. As the Chairman, Mr. Siaw encourages Board’s interaction with the Management, facilitates effective contribution of Non-Executive Directors, encourages constructive relationships among the Directors and ensures that the Group complies with the Code and maintains high standards of corporate governance. In addition, he also ensures that the Directors receive accurate, timely and clear information and there is effective communication with shareholders of the Company.

The CEO is responsible for the overall management, operations, strategic planning and business expansion of the Group. He oversees the execution of the Group’s corporate and business strategies and the day-to-day operations of the Group. His performance and appointment will be reviewed periodically by the NC and his remuneration package is reviewed by the RC.

During FY2024, Mr. Bryan Nicholas Lee Mun Hei has been appointed as CEO of the Company. Mr. Siaw Lu Howe and Mr. Bryan Nicholas Lee Mun Hei are not related to each other and do not have any business relationship between them.

The Board is of the view that there is a clear division of responsibilities between the Chairman and CEO, in order to ensure that there is an appropriate balance of power, increased accountability and sufficient capacity of the Board for independent decision making.

Mr. Ng Keok Chai is the Lead Independent Director of the Company. The Lead Independent Director is available to shareholders when they have concerns in which contact through the normal channels of communication with the Non-Executive Chairman or the Management has failed to resolve, or for which such contact is inappropriate or inadequate.

Led by the Lead Independent Director, the Independent Directors of the Company would meet when necessary, without the presence of the other Executive Directors.

All the Board Committees are chaired by an Independent Director and the majority of the Board Committees consists of Independent Director and all are Non-Executive Directors.

Principle 4: Board Membership

The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.

Nominating Committee (“NC”)

As at the date of this report, the NC of the Company comprises three (3) members, namely:

• Mr. Siaw Lu Howe (Chairman);
• Mr. Ng Keok Chai; and
• Mr. Aris Muhammad Rizal.

Majority of the members of the NC, including the chairman are Independent Directors. The members meet at least once a year.

The Board is of the view that the current NC size and composition are appropriate and effective to provide the necessary objective inputs to the Board on appointment and re-appointment of Directors and other relevant matters to the Board. The Board will constantly examine the NC composition from time to time.

The NC has specific written Terms of Reference setting out their duties and responsibilities. The NC’s main principal functions are as follows:

• review and assess candidates for directorships (including executive directorships) before making recommendations to the Board for the appointment of Directors;
• ensure that new Directors are aware of their duties and obligations and decides if a Director is able toand has been adequately carrying out his duties as a Director of the Company;
• review and recommend the re-nomination/re-election/re-appointment of Directors in accordance with the Constitution and Listing Rules at each annual general meeting and having regard to the Director’s contribution and performance;
• determine annually whether a Director of the Company is independent;
• review of structure, composition, size and diversity of the Board on the adequate ability to meet the Group’s existing scope of needs and the nature of operation for effective decision making taking into consideration the changes in the nature and scope the Group’s operations as well as diversified background, qualification, experience of the Directors and regulatory environment;
• decide whether a Director is able to and has adequately carried out his duties as a Director of the Company in particular where the Director concerned has multiple board representations. Where possible, the NC shall formulate internal guidelines that can address the competing time commitments that are faced when Directors serve on multiple boards;
• decide how the Board’s performance may be evaluated and propose objective performance criteria, subject to the approval of the Board. Such performance criteria, that allow comparison with its industry peers, should be approved by the Board and address how the Board has enhanced long-term shareholders’ value. These performance criteria should not be changed from year to year and where circumstances deem it necessary for any of the criteria to be changed, the onus should be on the Board to justify such changes;
• individual evaluation should aim to assess whether each Director continues to contribute effectively and demonstrate commitment to the role (including commitment of time for Board and committee meetings, and any other duties). The Chairman of the Board should act on the results of the performance evaluation, and where appropriate, propose new members be appointed to the Board or seek the resignation of directors, in consultation with the NC;
• assess the performance of the Board as a whole and contribution of each Director to the effectiveness of the Board;
• review and make recommendation to the Board on relevant matters relating to the succession plans of the Board, in particular, the Chairman, Directors, the CEO and/or key management personnel; and
• review and make recommendations to the Board on the training and professional development programme for the Board.

• the NC evaluates the balance of skills, knowledge, experience and diversity of the Board and, in light of such evaluation and in consultation with the Board, prepares a description of the role and the essential and desirable competencies for a particular appointment;
• the NC may engage consultants to undertake research on, or assess, candidates for new positions on the Board;
• the NC meets with short-listed candidate(s) to assess their suitability and to ensure that the candidate(s) are aware of the expectations; and
• the NC makes recommendations to the Board for approval.

 

The NC establishes the process for assessing the effectiveness of the Board and for assessing the contribution by each individual Director. It also makes recommendations to the Board on re-appointments of Directors based on their contributions and performance, a review of the range of expertise, skills and attributes of current Board members, and the future needs of the Board.

 

The Board has placed each individual Director such that he is able to devote sufficient time and attention to discharge his duties and responsibilities as Directors of the Company, bearing in mind his other commitments. In considering the nomination of Directors for re-election and re-appointment, the NC will take into account, amongst others, the competing time commitments faced by the Directors with multiple board representations. 

 

In FY2024, Mr. Ng Keok Chai is the only Director holding multiple directorships in other listed companies. Majority of the Directors and Board Committee members had attended all Board and Board Committee meetings respectively. The NC has reviewed and is satisfied that sufficient time and attention had been given by all the Directors to the affairs of the Group. The NC is of the opinion that there is presently no need to implement internal guidelines to address their competing time commitments and that the current Board size is adequate for the effective functioning of the Board.

 

Pursuant to Rule 720(5) of the Listing Rules, all Directors must submit themselves for re-nomination and re-appointment at least once every three (3) years. Pursuant to the Company’s Constitution, one-third of the Directors are required to retire by rotation and submit themselves for re-election at each annual general meeting (“AGM”) of the Company. All the Directors shall retire by rotation at least once every three (3) years and such retiring Director shall be eligible for re-election.

 

On the nomination of re-election of retiring Directors, the NC would assess the performance and contribution of the Directors and subject to the NC’s satisfactory assessment, the NC would recommend the proposed re-appointment of the Directors to the Board for its consideration and approval.

 

The NC has reviewed and recommended to the Board that Mr. John Lee Yow Meng and Mr. Siaw Lu Howe be nominated for re-election at the forthcoming AGM, who are retiring pursuant to Regulation 111 of the Company’s Constitution. Both nominated Directors have expressed their willingness for re-election at the forthcoming AGM (the “retiring Directors”). The Board has accepted the NC’s recommendations and agreed that the resolutions on the re-election of the retiring Directors be tabled for shareholders’ approval at the forthcoming AGM.

 

Please refer to the Notice of AGM for the resolutions put forth in relation to the respective re-elections and details of the retiring Directors including the information required under Appendix 7F of the Listing Rules are disclosed in pages 126 to 130 of this Annual Report.

 

Key information regarding the Directors, including their present and past three years’ directorships in other listed companies are set out in the section headed “Board of Directors” of this Annual Report.

 

There is no alternate director appointed on the Board.

 

Principle 5: Board Performance

 

The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.

 

The NC has adopted a formal process to assess the effectiveness of the Board as a whole and for assessing the contribution by each individual Director. This evaluation is to be carried out at least once a year. When a Director has multiple board representations, the Director would need to ensure that sufficient time and attention is given to the affairs of each company. Nevertheless, the NC will also review and assess whether the Director is able to and has been adequately carrying out the duties as a Director of the Company. Upon assessment, the NC will make recommendations for improvement, as and when required.

 

The Chairman of the Board will act on the results of the performance evaluation and recommendation, and where appropriate, propose new members to be appointed to the Board or seek the resignation of the Directors, in consultation with the NC.

 

For FY2024, the Directors were requested to complete an assessment checklist/form which focuses on the criterion on effectiveness and efficiency on the Board’s access to information, evaluation of the size and composition of the Board, the Board’s processes, procedures and compliance, accountability, Board’s performance in connection to discharging its responsibilities and duties and Directors’ standards of conduct. In addition, the Board also considered the qualitative measures such as the effectiveness of the Board in its monitoring role and the attainment of the strategic objectives set by the Board.

 

The individual assessment would include and aim to assess efficiency and effectiveness of the Chairman and each Director’s continuous contribution to the Board and commitment to their roles and responsibilities in discharging their duties.

 

Upon reviewing the assessment, the NC is of the opinion that the Board and all its members have sufficiently contributed to the Board and Group during the year.

 

Each member of the NC shall abstain from voting on any resolutions and making any recommendations and/or participating in any deliberations of the NC in respect of the assessment of his performance or re-nomination as a Director.

 

An external facilitator to evaluate and assess the Board, its Board Committees and each Director has not been appointed as the Board believes that the quality and objectivity of the current process and evaluations implemented are sufficient and adequate.

 

Furthermore, the Board will continuously review and assess the current size and composition of the Board on the adequate ability to meet the Group’s existing scope of needs and the nature of operation for effective decision making. From time to time, the review of the appropriateness will be taking into consideration the changes in the nature and scope of the Group’s operations as well as diversified background, experience of the Directors and regulatory environment.

 

(B) REMUNERATION MATTERS

 

Principle 6: Procedures for Developing Remuneration Policies

 

The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.

 

As at the date of this report, the RC of the Company comprises three (3) members, namely:

 

• Mr. Ng Keok Chai (Chairman);
• Mr. Siaw Lu Howe; and
• Mr. Aris Muhammad Rizal.

 

All the members of RC are non-executive directors, the majority of whom, including the RC Chairman are independent.

 

The Board is of the view that the current RC size and composition are appropriate and effective to provide the necessary objective inputs to the Board on reviewing and recommending to the Board a remuneration framework for the Board, Management and key management personnel of the Company as well as other compensation related matters to the Board. The Board will examine the RC composition from time to time.

 

The RC is governed by the RC’s Terms of Reference which describes the duties and responsibilities of the RC. The duties and functions of the RC are as follows:

 

• recommend to the Board, the framework of remuneration for the Board (including non-executive directors and executive directors), the CEO (or executive of equivalent rank) and key management personnel of the Company;
• recommend specific remuneration packages for each of the Directors and key management personnel of the Group, including payment of fees to non-executive directors taking into consideration of their effort, time spent, responsibilities and contribution;
• review service contracts and/or employee contracts, where applicable;
• review the Company’s obligations arising in the event of termination of the Executive Directors and key management personnel’s contract of services, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous;
• oversee and review the administration of the employees share option scheme (and such other similar share plans as may be implemented by the Company from time to time) upon the terms of reference as defined in the said employee share option scheme and to recommend the award of share options according to the share plan. It has delegated to the Compensation Committee to administer the Southern Archipelago Employee Share Option Scheme 2023 (“SAL ESOS 2023”) and Southern Archipelago Performance Share Plan 2023 (“SAL PSP 2023”), as well as the Blumont Employee Share Option Scheme 2013 (“Blumont ESOS 2013”) which had fully vested;
• engage such professional services as RC may deem necessary to enable it to discharge its duties hereunder satisfactorily; and
• other acts as may be required to comply with the SGX-ST and the Code from time to time.

 

The RC covers all aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits-in-kind, compensation/termination and gratuities. The members of the RC shall not be involved in the discussion and decision of their own remuneration. Each member of the RC shall abstain from voting on any resolutions in respect of his own remuneration package. 

 

Termination clauses are included in the service agreements for Directors and key management personnel. The RC has reviewed and recommended to the Board, and the Board concurred that the termination clauses are fair and reasonable, and are not overly generous. There was no termination of any Directors and key management personnel during FY2024.

 

The RC may obtain independent professional advice if it deems necessary in the discharge of its responsibilities properly. Such expenses are to be borne by the Company.

 

The Board has not engaged any external remuneration consultant to advise on remuneration matters for FY2024.

 

The Non-Executive Directors are paid a fixed director’s fee for their efforts, responsibilities, time spent and contribution to the Board. Directors’ fees are recommended by the Board for approval by shareholders at the Company’s AGMs. 

 

Principle 7: Level and Mix of Remuneration

 

The level and structure of remuneration of the Board and key management personnel are appropriate and

proportionate to the sustained performance and value creation of the company, taking into account the strategic

objectives of the company.

 

The review of the remuneration packages takes into consideration the long-term interests of the Group, the performance of the Group, overall assessment of the Board, the individual assessment of each Director, level of contribution to the Company and Board, taking into account factors such as, efforts, time spent,

responsibilities and duties of the Directors, carefully evaluating the costs and benefits of each incentive before recommendation to the Board for review and approval. Nevertheless, the RC will ensure that the Independent Directors are not over-compensated to the extent that their independence may be compromised. 

 

For FY2024, the RC reviewed the compensation and remuneration packages such that the Directors and key management personnel were sufficiently compensated. In addition, the RC provided appropriate compensation packages at market rates for the Board and key management personnel of the Company to reward good performance, attract and motivate the Directors and key management personnel.

 

The Company does not use contractual provisions to allow the Company to claim incentive components of remuneration from Executive Directors and key management personnel in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial loss to the Company. The Company should be able to avail itself to remedies against the Executive Directors in the event such breach of fiduciary duties.

 

Principle 8: Disclosure on Remuneration

 

The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.

 

The Company recognises that a clear disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid/payable to the Directors and the key management personnel. 

 

The Company’s remuneration policy is to ensure that the remuneration offered is competitive and sufficient to attract, retain and motivate Directors and key management personnel with the required experience and expertise.

 

All Executive Directors do not receive Directors’ fees. The remuneration package of each of the Executive Director comprises a basic salary component and a variable component which is the annual bonus, based on the performance of the Group as a whole and their individual contribution. The performance-related

component of the remuneration package is designed to align the interests of the Executive Directors with those of Shareholders and link rewards to the Group’s financial performance. No Directors are involved in deciding their own remuneration. The RC reviews the fairness and reasonable of the termination clauses contain in the service agreements of the Executive Directors to ensure that such contracts of service are not overly generous, with an aim to be fair and avoid rewarding poor performance.

 

There were no termination or retirement benefits and post-employment benefits that are granted to the Executive Directors of the Company in FY2024.

 

Mr. Bryan Nicholas Lee Mun Hei (Chief Executive Officer (“CEO”)), Mr. John Lee Yow Meng (Executive Director and the Chief Financial Officer (“CFO”)) and Mr. Alan Chin Yu (Executive Director) each has a service agreement with the Company. The service agreement can be terminated by either party giving not less than one (1) month notice and both parties have the option to pay salary in lieu of any required notice period.

 

The Independent Directors and the Non-Executive Directors are paid fixed Directors’ fees appropriate to their level of contribution, taking into account factors such as effort and time spent, and their responsibilities on the Board and Board Committees. They do not receive any other form of remuneration from the Company. The Independent Directors have not been over-compensated to the extent that their independence is compromised.

 

The RC has proposed and recommended that the Directors’ fees of S$103,500 (similar to FY2024) for the financial year ending 31 December 2025, payable quarterly in arrears. The Board concurred with the RC’s proposal and recommended that the said Directors’ fees be tabled for shareholders’ approval at the

forthcoming AGM.

 

The Company’s share incentive award plans, SAL ESOS 2023 and SAL PSP 2023 are as described below:

 

SAL ESOS 2023

 

At the Extraordinary General Meeting held on 10 August 2023, the shareholders of the Company approved the SAL ESOS 2023, for granting non-transferable options to employees (including Executive Directors) and Non-Executive Directors of the Company.

 

The SAL ESOS 2023 is administered by the Compensation Committee which is overseen by the Remuneration Committee.

 

The SAL ESOS 2023 shall continue to be in force at the discretion of the Compensation Committee for a period of ten years from 10 August 2023. However, the period may be extended or terminated with the approval of shareholders at a general meeting of the Company and any relevant approvals which may then be required.

 

Under the SAL ESOS 2023, Market Price Options may be exercised from the 1st anniversary of the date of grant to the 5th anniversary of the date of grant for Non-Executive Directors and the 10th anniversary of the date of grant for group employees such as Executive Directors and staffs. Discounted Price Options may be exercised from the 2nd anniversary of the date of grant to the 5th anniversary of the date of grant for Non-Executive Directors and the 10th anniversary of the date of grant for group employees such as Executive Directors and staffs.

 

The subscription price for each ordinary share in respect of which an option is exercisable shall be determined

by the Compensation Committee as follows:

 

(a) fixed at the market price equal to the average of the last dealt prices for the share on the SGX-ST for the

three (3) consecutive trading days immediately preceding the date of grant of that option; or

 

(b) set at a discount to a market price, provided that the maximum discount shall not exceed twenty per

cent (20%) of the Market Price.

 

There was no share options granted under the SAL ESOS 2023 in FY2024.

 

SAL PSP 2023

 

At the Extraordinary General Meeting held on 10 August 2023, the shareholders of the Company approved the SAL PSP 2023, for granting of incentive share awards to employees (including Executive Directors) and Non-Executive Directors of the Company.

 

The SAL PSP 2023 is administered by the Compensation Committee which is overseen by the Remuneration Committee.

 

The SAL PSP 2023 shall continue to be in force at the discretion of the Compensation Committee for a period of ten years from 10 August 2023. However, the period may be extended or terminated with the approval of shareholders at a general meeting of the Company and any relevant approvals which may then be required.

 

A participants’ award under the SAL PSP 2023 will be determined at the sole discretion of the Compensation Committee. In considering an award to be granted to a participant, the Compensation Committee may take into account, inter alia, the participant’s performance and/or contribution to the Company.

 

Awards granted under the SAL PSP 2023 will typically vest only after the satisfactory completion of performance-related award conditions and/or other conditions such as vesting period(s) applicable for the release of the award. No minimum vesting periods are prescribed under the SAL PSP 2023, and the length of the vesting period(s) in respect of each award will be determined on a case-by-case basis.

 

There was no performance shares granted under the SAL PSP 2023 in FY2024.

 

Disclosure on Remuneration of Individual Director

 

The RC has reviewed and approved the remuneration packages of the Directors and key management personnel, having regard to their contributions as well as the financial performance and the commercial needs of the Company and has ensured that the Directors and key management personnel are adequately but not excessively remunerated.

 

There were no termination or retirement benefits and post-employment benefits that are granted to the Executive Directors and key management personnel in FY2024.

 

A breakdown of each individual Director’s and the CEO’s remuneration for the financial year ended 31 December 2024 of the Group is as follows:

 

 

Bryan Nicholas Lee Mun Hei is the son of Lee Teck Yuen, being 29.49% shareholder of the Company, held through his wholly-owned company, Mezzanotte Capital Pte. Ltd. through its wholly owned subsidiary, Ultimate Horizon Pte. Ltd.

 

As at the date of this Report, the Group has only one (1) Key Management Personnel (who is not a Director and/ or CEO of the Company) and the remuneration of the Key Management Personnel in FY2024 is as follows:

There is no employee of the Group who is a substantial shareholder of the Company, or an immediate family member of a Director or the CEO or a substantial shareholder whose remuneration exceeds S$100,000 for the FY2024.

 

(C) ACCOUNTABILITY AND AUDIT

 

Principle 9: Risk Management and Internal Controls

 

The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders.

 

The Board is committed to maintaining a sound system of internal controls to safeguard shareholders’ investments and the Group’s assets. The Board with the support of the AC, oversees the Management in the design, implementation and monitoring of the risk management and internal control systems including

reviewing the adequacy and effectiveness of the Company’s risk management and internal control systems.

 

The internal auditor and the external auditor conduct reviews and audits that involve testing the adequacy and effectiveness of material internal controls on key risks. Any material non-compliance or lapses in internal controls and its corresponding mitigating actions will be reported to the AC. At least annually, the Board, with the assistance from the AC, will review the adequacy and effectiveness of the Company’s risk management and internal control systems, including financial, operational, compliance and information technology risks.

 

At present, the Board relies on the internal auditor, the external auditors’ reports and management letter prepared by the external auditor to highlight any material non-compliance or weaknesses in internal controls. There were no major weaknesses in internal controls highlighted by the Group’s external auditor or the internal auditor for the attention of the AC for FY2024.

 

Based on the internal controls established and maintained by the Group, the work performed by the internal and external auditors, and reviews performed by Management and the AC, the Board with the concurrence of the AC, are of the opinion that the Group’s internal controls, addressing financial, operational, compliance and information technology controls and risk management systems, were adequate and effective as at FY2024. This is in turn supported by assurance from the Executive Directors and CFO that:

 

(a) the financial records of the Group have been properly maintained and the financial statements give a true and fair view of the Group’s operations and finances and are in accordance with the relevant accounting standards; and

 

(b) they have evaluated the adequacy and effectiveness of the Group’s risk management and internal controls and have discussed with the Company’s external and internal auditors of their reporting points and noted that there have been no significant deficiencies in the design or operation of internal controls

which could adversely affect the Group’s ability to record, process and report financial data. Accordingly, the Group’s risk management and internal control systems (including financial, operational, compliance and information technology controls) are adequate and effective.

 

In ensuring that the Group’s risks are managed adequately and effectively, risk mitigation action plans are in place to deal with matters such as operational disruptions, workplace and employee health and safety, employee availability, IT systems functionality, cyber security, access management, communication protocols and contractual and regulatory compliance, so as to mitigate and minimise the negative impact on the Group’s operations.

 

The Board notes that all internal control systems contain inherent limitations and no internal control system could provide absolute assurance against the occurrence of material errors, poor judgment in decision making, human error losses, fraud or other irregularities. However, other procedures, policies, guidelines and compliance regulations, as discussed in the Annual Report, are in place to mitigate any possible and/or suspected irregularities. Nothing has come to the attention of the AC, Board and/or the Management that there is any deficiency in the internal control systems that resulted in significant loss and/or material financial misstatements.

 

The Group is aware that each business transaction carries risk whether internally and/or externally in the form of environmental, operational, financial and/or Management decision making risk. The operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Other risks include legal risk and strategic risk (the risk of loss arising from poor strategic business decisions). The Group’s financial risk management and policies are further outlined under heading “Financial Risk Management” in the “Financial Statement” section of this Annual Report.

 

The Group regularly reviews and improves its business and operations activities to identify areas of significant business risks as well as respond appropriately to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the AC and the Board.

 

Principle 10: Audit Committee

 

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

 

As at the date of this report, the Audit Committee (the “AC”) of the Company comprises three (3) members,namely:

 

• Mr. Ng Keok Chai (Chairman);
• Mr. Tan Gim Kang, Arran; and
• Mr. Siaw Lu Howe.

 

All members of the AC are Non-Executive Directors and the majority of whom, including the AC Chairman, are independent. The members do not have any management and business relationships with the Company or any substantial shareholder of the Company. At least two (2) members, including the AC Chairman, have recent and relevant accounting or related financial management expertise or experience. None of the AC members was previously partners or directors of the Company’s external audit firm or hold any financial interest in the external audit firm.

 

The members meet at least two (2) times in a year.

 

The AC has specific written Terms of Reference setting out their duties and responsibilities. The AC’s main principal functions are as follows:

 

• assist the Board to fulfil its responsibilities for overseeing the Group’s financial reporting, operation of acceptable risk management processes and advise on internal control issues;
• serve as an independent and objective party to review financial information prepared by management prior to its release to shareholders and the general public;
• maintain channels of communication with the Board and direct communication channels with the external auditors, internal auditors and financial management, to discuss and review specific issues as appropriate;
• review the audit plan and reports of the Company’s internal and external auditors, and evaluate their reports on any recommendations on internal accounting controls arising from the audit;
• review the assistance given by the Company’s Management to the internal and external auditors;
• review the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Group and any announcements relating to the Group’s financial performance;
• review at least annually the adequacy and effectiveness of the Group’s internal control systems, including financial, operational, compliance, information technology controls and risk management systems;
• ensure that the scope of the internal and external auditors’ examination has not been unreasonably restricted by the Management;
• meet with other committees, and/or the Management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC;
• meet with the external auditor, and with the internal auditor, without the presence of the Company’s Management, at any time and preferably at least once a year;
• review legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any reports received from regulators;
• review the scope and results of the external audit, cost effectiveness and the independence and objectivity of the external auditors;
• review the nature and extent of non-audit services provided by the external auditors;
• recommend to the Board on: (i) the proposals to the shareholders on the appointment and removal of external auditors; and (ii) the remuneration and terms of engagement of the external auditors;
• report to the Board the outcome of its reviews with the external auditors into any suspected fraud or irregularity or infringement of any Singapore law, rule and regulations of which the AC is aware of, which has, or is likely to have a material impact of the listed issuer’s operating results or financial position;
• report actions and minutes of the AC to the Board with such recommendations as the AC considers appropriate;
• review the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated and properly followed up on. The Company publicly discloses, and clearly communicate to employees, the existence of a whistle-blowing policy and procedures for raising such concerns;
• review the assurance from the Executive Directors and CFO on the financial records and financial statements;
• review compliance with accounting standards, Companies Act 1967 of Singapore (the “Act”) and SGX-ST Listing Rules requirements;
• review interested person transactions, if any, in accordance with the requirements of the SGX-ST’s Listing Rules; and
• undertake generally such other functions and duties as may be required by law or the SGX-ST Listing Rules.

 

The AC has the power to conduct or authorise investigations into any matters within the AC’s scope of responsibility. The AC is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities. Such expenses are to be borne by the Company.

 

The AC has full access to and co-operation of the Management, officers, Company Secretary, Directors and relevant external regulator and/or professional parties and has full discretion to invite any Director or officer to attend its meetings, and has been given reasonable resources to enable it to discharge its functions.

 

The AC also reviews any arrangement by which staff of the Group, or any other officers, may, in confidence, raise concerns about possible and/or suspected fraud, irregularities, corruption, dishonest practices and/or improprieties in matters of financial reporting or other similar matters. The AC’s objective is to ensure that arrangements are in place for the independent investigation of such matters and for appropriate follow up action and improvements, if necessary and required.

 

PKF-CAP LLP is the external auditors of the Company. The Company’s subsidiaries in Singapore are audited by

PKF-CAP LLP whereas the overseas subsidiaries are audited by the member firms of PKF-CAP LLP.

 

The AC having regard the adequacy of the resources and experience of PKF-CAP LLP and the audit engagement partner assigned to the audit, the size and complexity of the Group being audited, and the number and experience of supervisory and professional staff assigned to the particular audit, is of the opinion that PKF-CAP LLP meets the auditing obligations of the Company and its significant subsidiaries. The Group has complied with Rules 712 and 715 of the Listing Rules in relation to the appointment of external auditors.

 

The AC assesses the independence of the external auditor annually. The aggregate amount of fees paid/payable to the external auditor of the Company for the financial year ended 31 December 2024 is S$97,200 for audit fees rendered by the external auditor to the Company and the Group during FY2024.

 

Having reviewed, amongst others, the scope and quality of the audit and the independence of the external auditor, the AC had recommended and the Board approved the nomination for re-appointment of PKF-CAP LLP as the external auditor of the Company at the forthcoming AGM, and to authorise the Directors to fix their remuneration.

 

The AC meets with the internal and external auditors at least once annually to discuss audit findings and recommendations, without the presence of the Management. For FY2024, the AC had met with the internal and external auditors once without the presence of the Management.

 

Throughout FY2024, the Board has assessed and reviewed, together with the assistance of the NC, to ensure that the members of the AC are appropriately qualified to discharge their responsibilities. The Board is opined that adequate and reasonable assistance and support has been properly rendered by the Directors, Management and officers to the AC and that the AC has effectively and efficiently contributed to the Board and the Group. During the FY2024, the AC held three (3) meetings to review and undertake the scope of work as set out above. The external auditor provides regular updates and briefings to the AC on changes or amendments to accounting standards to enable the members of the AC to keep abreast of such changes and its corresponding

impact on the financial statements, if any.

 

Whistle Blowing

 

The Company has in place a whistle-blowing policy, which provides an avenue for the staff of the Company to access the AC members and Chairman to raise concerns about improprieties. Contact details of these persons have been made available to all staff, and staff are encouraged to either email as part of the procedure to raise concerns, if any.

 

The Group undertakes to investigate complaints of suspected fraud and unethical behaviour in an objective manner. With the AC’s endorsement, proper written procedures, policies and guideline are in place for making such reports in good faith, with confidence and will be treated fairly and be protected from reprimand.

 

The objective for such arrangements is to ensure independent investigation of matters raised and to allow appropriate actions to be taken. All such investigations are undertaken directly by the AC. As at the date of this report and to the best of their knowledge and belief, nothing has come to the attention of the AC that may require any follow up and/or action plan.

 

Internal Audit

 

The Company has engaged Baker Tilly Consultancy (Singapore) Pte. Ltd. (“Baker Tilly”) as its independent internal auditor, reporting functionally to the AC and administratively to the CFO. The AC is responsible for approving the appointment, assessing the performance, and determining the remuneration of the internal auditor, ensuring its independence and effectiveness.

 

The AC reviews and approves the internal audit plan to ensure that it is comprehensive and aligned with the Group’s risk profile. In FY2024, Baker Tilly conducted an independent review of key internal controls in selected areas as determined by the AC and provided its findings, along with recommendations for enhancements, to the AC for review and approval. These recommendations aim to strengthen the Group’s internal control environment and governance framework.

 

The AC is satisfied that the internal audit function is independent, effective, and adequately resourced. The AC also notes that Baker Tilly’s internal audit team comprises experienced professionals with relevant qualifications, including Chartered Accountants and Certified Internal Auditors, ensuring that the internal

audit function is conducted with a high level of technical expertise and professionalism. Furthermore, the AC confirms that Baker Tilly meets the professional standards prescribed by internationally recognised bodies, including the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors.

 

Based on the internal audit reviews, the AC is of the view that the Group’s internal controls, including financial, operational, compliance, and information technology controls, are adequate and effective in addressing key risks. The AC also acknowledges Management’s commitment to continuously improve the internal control framework through the timely implementation of remediation measures where necessary. While no material control deficiencies were identified, the AC remains vigilant in overseeing the effectiveness of the internal control system to safeguard shareholders’ interests and the Group’s assets.

 

(D) SHAREHOLDER RIGHTS AND ENGAGEMENT

 

Principle 11: Shareholder Rights and Conduct of General Meetings

 

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 facilitates the exercise of ownership rights by all shareholders. In particular, the shareholders of the Company are sufficiently informed of changes in the Group’s business and development that are price sensitive and would be likely to materially affect the price or value of the Company’s shares and that information are communicated to the shareholders on a timely basis via the SGXNet.

 

Shareholders are given the opportunity to opine their views and seek clarification on questions regarding the Group at the AGM. All Directors, in particular the Chairman of the Board, the respective Chairman of the AC, NC, RC and ESGC, will be present and available to address shareholders’ queries at the general meetings. The external auditor will also be present to address queries regarding the conduct of the audit and the preparation and content of the auditor’s report.

 

Shareholders have the opportunity to participate effectively and to vote in AGMs. They are allowed to vote in person at a physical meeting, or by electronic means for a virtual meeting, or by their duly appointed proxy(ies). The Constitution of the Company allow shareholders of the Company to appoint not more than two (2) proxies to attend, speak and vote on their behalf at the AGMs. The Company does not implement voting in absentia by email, mail or fax due to authentication and other security related concerns. 

 

During the general meetings, the resolutions on separate issues are disclosed separately and not bundled together unless the resolutions are interdependent and linked so as to form one significant proposal and clear explanation and reasons are to be provided together with its material implications.

 

Shareholders would be informed of the rules governing such meetings and voting procedures of the general meetings. An independent polling agent is appointed by the Company for general meetings who will explain the voting procedures that govern the general meetings of shareholders. An announcement which includes the results of voting showing the number of votes cast for and against for each resolution and the respective percentage will be released via SGXNet after the general meetings.

 

The proceedings of all general meetings including substantial and relevant comments/queries from shareholders and responses exchanged between the Company and shareholders are recorded in the minutes book of the Company, and will be published on the SGXNet as well as the Company’s website. Minutes of the AGM for financial year ended 31 December 2023 (“FY2023”) had been published by the Company on its corporate website at URL https://www.southernarchipelago.com/announcements/ and on the SGXNet at URL https://www.sgx.com/securities/company-announcements within one month from the date of the AGM for FY2023.

 

The Company does not have a fixed dividend policy. The form, frequency and amount of future dividends declarations by the Company will depend on the Group’s earnings, general financial condition, results of operations, capital requirements, cash flow, general business condition, development plans and other factors as the Directors may, in their absolute discretion, deem appropriate. The Board is not recommending any dividend for FY2024, as the Board deemed more appropriate to retain the cash for the Group’s working capital purposes, after taken into account various factors including:

 

• the level of the available cash;
• the projected levels of capital expenditure and other investment plans; and
• the accumulated losses of the Company for the past years.

 

Principle 12: Engagement with Shareholders

 

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.

 

The Board is mindful of the obligation to provide regular, effective and fair communication with shareholders. In line with the continuous obligations of the Company pursuant to the Listing Rules, the Board’s policy is that all shareholders should be equally informed of all major developments and the Company will make disclosure publicly to all shareholders as soon as practicable.

 

The Board provides shareholders with an assessment of the Company’s performance, position and prospects via half-year and full year results announcements for each financial year, and other ad-hoc announcements as required by the SGX-ST. The Company does not practise selective disclosure. Price sensitive information is first publicly released through the SGXNet. In addition, the Company has taken steps to solicit and understand the

views of the shareholders through the Company website.

 

Results and annual reports are announced and/or issued within the mandatory period. All the shareholders of the Company receive the annual report and the notice of the general meetings which are available in the SGXNet and the Company’s website.

 

The FY2024 Annual Report, notice of AGM and proxy form (“AGM documents”) will be made available to shareholders through electronic means via publication on the Company’s website at the URL https://www.southernarchipelago.com/announcements/ and on the SGX website at the URL

https://www.sgx.com/securities/company-announcements. Printed copies of the Notice of AGM, Proxy Form and Request Form will be despatched to the shareholders. If the shareholders wish to receive printed copies of the Annual Report, shareholders may complete the said Request Form and follow the instructions stated therein. 

 

The shareholders can access the financial information, corporation announcements, press releases, annual reports and profile of the Group on the Company’s corporate website. 

 

Though the Company does not currently have an investor relations policy, it believes in regular, effective and fair communication with members of the investing community. As such, shareholders may contact the Company with their questions via emails at info@southernarchipelago.com and phone calls at +65 6332 9488, and the Company will respond to such questions in a timely manner.

 

 

(E) MANAGING STAKEHOLDER RELATIONSHIPS

 

Principle 13: Engagement with Stakeholders

 

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 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. In addition, the Group also issue sustainability report to keep stakeholders informed on the commitment made by the Company in fostering the creation of sustainable environment/community for the stakeholders.

 

OTHER GOVERNANCE PRACTICES

 

Material Contracts

 

There is no material contract of the Company and its subsidiaries, including loans, involving the interests of any Director or the controlling shareholders either still subsisting at the end of FY2024 or if not then subsisting, entered into since the end of the previous financial year, save as for those as announced via SGXNet and as outlined in the Annual Report under headings “Borrowings” in the “Financial Statements” section of this Annual Report.

 

Interested Person Transactions

 

The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and these interested persons transactions are conducted on an arm’s length basis and are not prejudicial to the interests of the shareholders.

 

The Board and the AC will review all interested person transactions to be entered into to ensure that the relevant rules under Chapter 9 of the Listing Manual are complied with.

 

Except those as announced via SGXNet and as outlined in the Annual Report under headings “Trade and Other Payables” and “Related Party Transactions”, there is no other interested person transaction for FY2024.

 

Dealing in Securities

 

In line with SAL’s Best Practices Guide in Dealing in Securities (the “Best Practices Guide”) adopted and reviewed from time to time, the Company has in place a code of conduct on share dealings by the Company and the Officers. This code sets out the statutory restrictions on insider trading as well as the recommendations of the Best Practices Guide on securities transactions. It has been made known that the Company and the Officers, including the Directors, staff, any relevant body corporate and officers of the Company and the Group, should not deal during the period commencing one (1) month before the announcement of the Company’s half-yearly results and one (1) month before financial year, as the case may be, and ending on the date of the

announcement of the relevant results.

 

The officers have been informed that to deal in the Company’s securities, as well as securities of other listed companies, when they are in possession of information that is not generally available but, if it were, would be likely materially to affect the price of those securities in relation to those securities and relates to any transaction (actual or expected) involving both those bodies corporate or involving one of them and securities of the other are prohibited and is a subject to the law. The Company, while having provided the window periods for dealing in the Company’s securities, has its own internal compliance code in providing guidance to its officers with regards to dealing in the Company’s securities including reminders that the law on insider trading is applicable at all times. In addition, an officer should also not deal in the Company’s securities on short-term considerations.

 

In the opinion of the AC, to the best of their knowledge and belief, the Company complies with its Best Practices Guide.

 

ADDITIONAL INFORMATION ON DIRECTORS NOMINATED FOR RE-ELECTION – APPENDIX 7.4.1 TO THE LISTING MANUAL OF THE SGX‐ST

 

Pursuant to Rule 720(6) of the Listing Manual of the SGX-ST (“Listing Rules”), the information as set out in Appendix 7.4.1 of the Listing Rules relating to Mr. John Lee Yow Meng and Mr. Siaw Lu Howe, being the Directors who are retiring in accordance with the Company’s Constitution at the forthcoming AGM, are set out below: