Report on Corporate Governance

Asia Vets Holdings Ltd. (the “Company”) was admitted to the Official List of the SGX-Catalist on 19 July 2010.

The board of directors of the Company (the Board) believes in having high standards of corporate governance and is committed to ensuring that effective self-regulatory corporate practices exist to protect the interests of shareholders of the Company (the “Shareholders”) and maximise long-term Shareholders’ values.

In accordance with Rule 710 of the Singapore Exchange Securities Trading Limited (SGX-ST) Listing Manual Section B: Rules of Catalist (the “Catalist Rules”), the following report describes the Company’s corporate governance practices for the financial year ended 31 December 2020 (“FY2020”) with specific reference to the Principles and Provisions set out in the Code of Corporate Governance 2018 which was revised and issued on 6 August 2018 (the Code).  

The Board is pleased to report that, for FY2020, the Company has complied with the Principles of the Code, and the Provisions of the Code (except where otherwise explained). In areas where the Company’s practices vary from any Provisions of the Code, the Company has stated herein the Provision of the Code from which it has varied, and appropriate explanations are provided for the variation, and how the practices the Company had adopted are consistent with the intent of the relevant Principle of the Code. The Company will continue to assess its needs and implement appropriate practices accordingly.

Principle 1: The Board’s Conduct of 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

Provision 1.1

Principal Duties of the Board

The Company is headed by an effective Board to lead and control the Company. The Board has the overall responsibility for corporate governance, strategic direction and investments of the Company. Each individual director of the Company (“Director”) is obliged to act in good faith and exercise independent judgment in the best interests of Shareholders at all times.

The Board’s principal functions include:

  • determining, reviewing and approving the strategic objectives and directions of the Company, annual budgets, major investments, divestments and funding proposals;
  • overseeing the business and affairs of the Company, establishing with the management of the Company (the “Management”) the strategies and financial objectives to be implemented by the Management, and monitoring the performance of the Management;
  • establishing a framework of prudent and effective controls which enables risk to be assessed and managed, including safeguarding of Shareholders’ interests and the Company’s assets;
  • setting the Company’s values and standards (including ethical standards), and ensuring that obligations to Shareholders and other stakeholders are understood and met;
  • reviewing Management performance, the Company’s financial performance, risk processes and systems, human resource requirements and corporate governance practices;
  • considering sustainability issues, e.g. economic, social and governance factors, as part of its strategic formulating; and
  • identifying the key stakeholder groups and recognising that their perceptions affect the Company’s reputation.

All Directors must objectively discharge their duties and responsibilities at all times as fiduciaries in the interests of the Company and hold Management accountable for performance. 

 

Code of Business Conduct and Ethics

The Company has established a Code of Business Conduct and Ethics that sets the principles of the code of business conduct and ethics which applies to all employees of the Group. Directors, key management personnel and employees of the Group are expected to observe and uphold the highest possible standards of ethical, moral and legal business conduct and to be in compliance with the law and regulations at all times and all places in the world.

 

Conflict of Interests

Each Director is required to promptly disclose any conflict or potentially conflict of interest, whether direct or indirect, in relation to a transaction or proposed transaction with the Group as soon as is practicable after the relevant facts have come to his or her knowledge. On an annual basis, each Director is also required to submit details of his or her associates for the purpose of monitoring interested persons transactions. Where a Director has a conflict or potentially conflict of interest in relation to any matter, he or she should immediately declare his or her interest when the conflict-related matter is discussed, unless the Board is of the opinion that his or her presence and participation is necessary to enhance the efficacy of such discussion. Nonetheless, he or she should abstain from voting in relation to the conflict-related matters.

 

Provision 1.2

Appointment Letter

Newly appointed Directors will be provided a formal letter of appointment setting out among other matters, the roles, obligations, duties and responsibilities of the Director as a member of the Board

 

Directors’ Orientation and Training

All newly appointed Directors will be given appropriate briefings by the Management on the business activities of the Company, its strategic directions and the Company’s corporate governance policies and practices. Directors will also be given the opportunity to visit the Group’s operational facilities and to meet with the Management to gain a better understanding of the Group’s business operations. The Company will also arrange for first-time Directors to attend the relevant training in relation to the roles and responsibilities of a director of a listed company, organised by the Singapore Institute of Directors (“SID”) as required under Rule 406(3)(a) of the Catalist Rules, as well as other courses relating to areas such as accounting, legal and industry specific knowledge as appropriate, organised by other training institutions. The training of Directors will be arranged and funded by the Company.   

Existing Directors will be updated regularly on accounting and regulatory changes by the Company’s external auditors, continuing sponsor and company secretary, and are encouraged to attend workshops, seminars and training, to enhance their skills and knowledge, or on relevant new laws, regulations and changing commercial risks, and such training will be funded by the Company.

 

Seminars and Trainings attended by Directors in FY2019

The details of updates, seminars and training programmes attended by the Directors in FY2020 include, amongst others:-

  • updates on developments in financial reporting, where relevant, by the external auditors of the Company; and
  • updates on regulatory announcements, guidance and/or amendments to the Catalist Rules and the Code, where relevant, by the continuing sponsor of the Company.

 

Provision 1.3

Matters Requiring the Board’s Approval

The Group has adopted internal guidelines governing matters that require the Board’s approval which has been clearly communicated to the Management.

The Board has identified, without limitation, the following matters that require its approval:

  • declaration of dividends and other returns to shareholders
  • major corporate policies on key areas of operation;
  • major funding proposals or bank borrowings;
  • corporate or financial restructuring and share issuances;
  • mergers and acquisitions;
  • material acquisitions and disposals;
  • approval of transactions involving interested person transactions; and
  • appointments of new Directors.

 

Provision 1.4

Delegation by the Board

To assist the Board in the discharge of its functions, the Audit Committee, the Nominating Committee and the Remuneration Committee (collectively, “Board Committees”) have been constituted with written terms of reference which clearly sets out the authority and duties. These terms of reference are reviewed on a regular basis, along with the respective Board Committees’ structures and membership, to ensure their continued relevance, taking into consideration the changes in the governance and legal environment. Any change to the terms of reference for any Board Committee requires the specific written approval of the Board. Matters which are delegated to the Board Committees for more detailed appraisals are reported to and monitored by the Board.

Please refer to the various Principles in this Corporate Governance Report for further information on the names of the members of the respective Board Committees, their terms of reference and the activities of the respective Board Committees.

 

Provision 1.5

Board and Board Committees Meetings and Attendance

The Board meets at least two (2) times a year, and as warranted by particular circumstances, as deemed appropriate by the Board members. Directors are free to discuss and voice their concerns on any matter raised at the Board meetings. Telephonic and video-conference meetings of the Board are allowed under the Company’s Constitution. All Directors are provided with the agenda and a set of the Board papers prior to the Board meeting. These are issued in advance to give the Directors sufficient time to better understand the matters to be discussed and to obtain further clarifications or explanations at the Board meeting where necessary. The Company and the Board acknowledge that an unimpeded flow of relevant information in a timely manner is crucial for the Board to be effective in discharging its duties and responsibilities.

The attendance of the Directors at meetings of the Board and Board Committees for FY2020 is set out as follows:

 

 

 

 

 

Name of Directors

Board

Audit Committee

Nominating Committee

Remuneration Committee

No. of meetings held while being a member

 

No. of meetings attended

No. of meetings held while being a member

 

No. of meetings attended

No. of meetings held while being a member

 

No. of meetings attended

No. of meetings held while being a member

 

No. of meetings attended

Tan Tong Guan

2

2

2 *

  1 *

 1 *

Tan Geok Moey

2

2

2

2

1

1

1

1

Teo Yi-Dar

2

2

2

2

1

1

1

1

Kim Seah Teck Kim

2

2

2

2

1

1

1

1

Henry Tan Song Kok1

2

2

2

2

1

1

1

1

        *           Attended by invitation.

        1                Mr Henry Tan Song Kok was appointed as an Independent Director of the Company, Chairman of the Audit Committee and a member of the Nominating Committee and the Remuneration Committee on 1 January 2020.

 

Multiple Board Representations

All Directors are required to declare their board representations. Where a Director has multiple board representations, and in considering the nomination of Directors for appointment, the Nominating Committee will evaluate whether or not the Director is able to and has been adequately carrying out his or her duties as a Director, as well as sufficient time and attention are given to the affairs of the Company, taking into consideration the Director’s number of listed company board representations and other principal commitments.

The Nominating Committee noted that some Directors have other principal commitments, while others have both multiple listed company board representations and other principal commitments. In particular, the Nominating Committee noted that each of Mr Teo Yi-Dar and Mr Henry Tan Song Kok holds a significant number of such listed company board representations and other principal commitments. Notwithstanding, the Nominating Committee noted the aforesaid Directors’ commitments and contributions to the Company, which are evident in their level of attendance and active participation at Board and Board Committee meetings. Based on the above, the Nominating Committee has reviewed and is of the opinion that all the Directors are able to and have adequately carried out their duties as Directors of the Company, as well as sufficient time and attention are given by the Directors to the affairs of the Company in FY2020. In view of the above, the Board (with the concurrence of the NC) is of the view that there is no need to implement internal guidelines (such as implementing a limit on the maximum number of listed company board representations which any Director may hold) to address competing time commitments. The Board believes that each individual Director is best placed to determine and ensure that he/she is able to devote sufficient time and attention to discharge his/her duties and responsibilities as a Director, bearing in mind his/her other commitments. The Board and the NC will review the requirement to determine the maximum number of listed company board representations as and when they deem fit.

 

Provision 1.6

Access to Information

The Board is provided with complete, accurate, and adequate information in a timely manner, prior to Board meetings and on an on-going basis, to enable it to fulfill its responsibilities. Such information includes background or explanatory information relating to matters to be brought before the Board, copies of disclosure documents, budgets, forecasts and monthly internal financial statements. In respect of budgets, any material variance between the projections and actual results will be disclosed and explained. Such information is provided to the Directors to enable them to keep abreast of the Company’s operational and financial performance and position and to facilitate better-informed decision-making.

 

Provision 1.7

Access to Management and Company Secretary

The Directors have separate and independent access to the Management and the company secretary at all times. The company secretary and/or his or her representatives attend all Board meetings to ensure that Board procedures are followed and that applicable rules and regulations, including the requirements of the Companies Act (Chapter 50) of Singapore and the Catalist Rules are complied with. Under the direction of the Chairman, the company secretary’s other responsibilities include ensuring good information flows within the Board and Board Committees and between the Management, the Non-Executive Director and the Independent Directors, as well as facilitating orientation and assisting with professional development as required. The appointment and the removal of the company secretary is a matter for the Board as a whole.

 

Independent Professional Advice

Should the Directors, whether as a group or individually, need independent professional advice in furtherance of their duties and responsibilities, the Company will appoint such professional adviser to render the appropriate professional advice. The cost of such professional advice will be borne by the Company.

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

Provision 2.1

Director’s Independence

The criterion for independence is based on the definition set out in the Code and Practice Guidance, and taking into consideration whether the Director falls under any circumstances pursuant to Rule 406(3)(d) of the Catalist Rules. The Board considers an “independent” Director as one who 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 the Director’s independent business judgment with a view to the best interests of the Company.

The Nominating Committee, shall conduct an annual review to determine the independence of the Directors according to the Code and its Practice Guidance, as well as Rule 406(3)(d) of the Catalist Rules. In its review, the Nominating Committee shall consider all nature of relationships and circumstances that could influence the judgement and decisions of the Directors before tabling its finding and recommendations to the Board for approval.

The Independent Directors (namely Mr Teo Yi-Dar, Mr Kim Seah Teck Kim and Mr Henry Tan Song Kok) have confirmed that they or their immediate family members do not have any relationship with the Company or any of 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 interests of the Company, and do not fall under any of the circumstances pursuant to Rule 406(3)(d) of the Catalist Rules. The Independent Directors do not own shares of the Company and are not in any foreseeable situation that could compromise their independence of thought and decision. The Board, based on the review conducted by the Nominating Committee, has determined that the said Directors are independent.

None of the Independent Directors has served on the Board beyond nine (9) years from the date of their first appointments.

 

Provision 2.2

Proportion of Non-Executive Independent Directors

In view that the Chairman and the Chief Executive Officer is the same person, the Board comprises a majority of three (3) Directors (out of a five (5) member Board) who are Non-Executive Independent Directors. With this, there is a strong and independent element on the Board, and no individual or group of individuals dominates the Board’s decision making.

 

Provision 2.3

Proportion of Non-Executive Directors

The Board comprises a majority of four (4) Directors (out of a five (5) member Board) who are Non-Executive Directors.

 

Provision 2.4

Board Composition and Size

The Board currently comprises five (5) members, one (1) of whom is an Executive Director and four (4) of whom are Non-Executive Directors, of which three (3) are Independent Directors.  

The Board members as of the date of this report are:

Tan Tong Guan                                    Executive Chairman and Chief Executive Officer

Tan Geok Moey                                   Non-Executive Director

Teo Yi-Dar                                            Lead Independent Director

Kim Seah Teck Kim                            Independent Director

Henry Tan Song Kok                          Independent Director

The Nominating Committee is responsible for examining the size and composition of the Board and Board Committees. Having considered the scope and nature of the Group’s businesses, the requirements of the business and the need to avoid undue disruptions from changes to the composition of the Board and Board Committees, the Board, in concurrence with the Nominating Committee, is of the view that its current size, as well as the current size and composition of the Board Committees, are appropriate to facilitate effective decision making, and provide sufficient diversity of expertise to lead and govern the Company effectively.

 

Board Diversity

The Nominating Committee will periodically review the competencies of the Directors to ensure effective governance of the Company and contribution to the Board. To address the dynamic business environment, the Nominating Committee will recommend the Board to consider the appointment of new Director(s) that has/have the required skillset, expertise, experience and knowledge as and when it deems necessary. The Board and the Board Committees comprise persons who as a group provide an appropriate balance and diversity of skills, experience and knowledge to the Company, as well as provide a diversity of gender with one (1) female Director who is a Non-Executive Director.  The Directors, as a group, provide core competencies such as accounting or finance, business or management experience, legal, industry knowledge, strategic planning experience and customer-based experience or knowledge required for the Board to be effective.  A brief profile of each Director is set out on pages 6 to 8 of the Annual Report.  Information of the interests of the Directors who held office at the end of the financial year in shares, debentures and share options in the Company and its related corporations (other than the wholly-owned subsidiaries) are set out in the Directors’ Statement on page 44 of the Annual Report.

 

Provision 2.5

Meeting of Non-Executive Director and Independent Directors without Management

The Non-Executive Director and the Independent Directors will assist to develop proposals on strategies and goals for the Company and regularly assess the performance of the Management in meeting the agreed goals and objectives, and monitor the reporting of performance. The Non-Executive Director and the Independent Directors are encouraged to meet, without the presence of the Management, so as to facilitate a more effective check on the Management. They will meet on a need-basis without the presence of the Management to discuss on arising issues.

Principle 3: Chairman and Chief Executive Officer

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

Provision 3.1

Separation of the Role of Chairman and Chief Executive Officer

The roles of the Chairman and the Chief Executive Officer are currently held by Mr Tan Tong Guan. The Board is of the opinion that it is not necessary to separate the roles of the Chairman and the Chief Executive Officer after taking into account the current size, scope and the nature of the operations of the Company, and with the strong presence of Independent Directors on the Board.  The Board is of the view that there are sufficient safeguards and checks to ensure that the process of decision making by the Board is independent and based on collective decisions without any individual or group of individuals exercising any considerable concentration of power or influence and there is accountability for good corporate governance.  There is an appropriate balance of power and authority given that the majority of the members (including the respective Chairman) of the Board Committees are independent and that a majority of the Board comprises Independent Directors. Taking into account the above, the Board is of the view that the Company complies with Principle 3 of the Code.

 

Provision 3.2

Role of Chairman and Chief Executive Officer

As Executive Chairman of the Board, Mr Tan Tong Guan leads the Board and is responsible for the management of the Board. When setting the agenda, he ensures that adequate time is available for discussion of all agenda items, in particular strategic matters. The Executive Chairman encourages Board’s interaction with the Management, facilitates effective contribution of Non-Executive and Independent Directors, encourages constructive relations among the Directors and promotes high standards of corporate governance. In addition, the Executive Chairman ensures that the Directors receive accurate, timely and clear information and there is effective communication with Shareholders.

The Executive Chairman, being the Chief Executive Officer, is also in charge of charting the business direction as well as corporate planning and strategic developments of the Company and the Group.

 

Provision 3.3

Lead Independent Director

As the roles of the Chairman and the Chief Executive Officer are held by the same person, Mr Teo Yi-Dar has been appointed as the Lead Independent Director of the Company as recommended by the Code, to provide leadership in situations where the Chairman, who is not independent, is conflicted. As the Lead Independent Director, Mr Teo is available to address the concerns of Shareholders and when contact through the normal channels of communication to the Chairman and Chief Executive Officer or the Chief Financial Officer has failed to satisfactorily resolve their concerns or when such contact is inappropriate or inadequate.

The Independent Directors led by the Lead Independent Director, are encouraged to meet periodically without the presence of the Management where necessary. The Lead Independent Director will also provide feedback to the Chairman after such meetings.   

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

Provision 4.1 and 4.2

Nominating Committee Composition

The Nominating Committee comprises the following members, all of whom are non-executive and the majority, including the Chairman, are independent:

Kim Seah Teck Kim (Independent Director)                          Chairman

Teo Yi-Dar (Lead Independent Director)                                 Member

Tan Geok Moey (Non-Executive Director)                              Member

Henry Tan Song Kok (Independent Director)                        Member

 

Roles and Duties of Nominating Committee

The Nominating Committee has written terms of reference that sets out its duties and responsibilities. Amongst them, the Nominating Committee is responsible for:

  • reviewing board succession plans for Directors, in particular, the Chairman and the Chief Executive Officer;
  • creating a formal and transparent process for the appointments and re-nominations of members of the Board and to evaluate the performance of the Board as a whole, its Board Committees and the contribution of individual Directors to the effectiveness of the Board;
  • affirming annually the independence of the Directors; and
  • reviewing training and professional development programs for the Board.

The Nominating Committee is scheduled to meet at least once a year. Each member of the Nominating Committee shall abstain from voting on any resolution in respect of the evaluation of his/her performance or re-nomination as a Director.

 

Provision 4.3

Nomination and Selection of Directors

For new appointments to the Board, the Nominating Committee will consider the Company’s current Board size and its composition and decide if the candidate’s background, expertise and knowledge will complement the skills and competencies of the existing Directors on the Board. The candidate must be a person of integrity and must be able to commit sufficient time and attention to the affairs of the Company, especially if he is serving on multiple boards. The Nominating Committee will ensure that new Directors are aware of their duties and obligations.

If a vacancy arises under any circumstances, or where it is considered that the Board would benefit from the services of a new Director, the Nominating Committee, in consultation with the Board, will determine the selection criteria and select the appropriate candidate for the position. The search for a suitable candidate is drawn from the contacts and networks of existing Directors.  The Nominating Committee can also approach relevant institutions such as the Singapore Institute of Directors, professional organisations or business federations to source for a suitable candidate.   

 

Re-election of Directors

In accordance with the Code and Rule 720(4) of the Catalist Rules, all Directors shall submit themselves for re-nomination and re-election at least once every three (3) years. Pursuant to Regulation 95 of the Company’s Constitution, at least one-third of the Directors will retire at the annual general meeting of the Company (“AGM”) each year. In addition, Regulation 101 of the Company’s Constitution provides that a newly appointed Director can only hold office until the next AGM and then be eligible for re-election but shall not be taken into account in determining the number of Directors who are to retire by rotation. The Nominating Committee is charged with the responsibility of re-nomination having regard to the Director’s contribution and performance (e.g. attendance, preparedness, participation and candour) including, if applicable, as an Independent Director.

The Nominating Committee has recommended to the Board that Ms Tan Geok Moey and Mr Teo Yi-Dar (collectively, the “Retiring Directors”) be nominated for re-election at the upcoming AGM. In making the recommendation, the Nominating Committee had considered each of the Retiring Directors’ contribution and performance to the Board and the Group. The Retiring Directors, being the members of the Nominating Committee, have each abstained from making any recommendation and/or participating in any deliberation of the Nominating Committee in respect of the assessment of their own performance or re-election as a Director.

Ms Tan Geok Moey will, upon re-election as a Director, remain as Non-Executive Director, and a member of the Audit Committee, the Nominating Committee and the Remuneration Committee. Mr Teo Yi-Dar will, upon re-election as a Director, remain as Lead Independent Director, Chairman of the Remuneration Committee and a member of the Audit Committee and the Nominating Committee.

Pursuant to Rule 406(3)(d)(iii) of the Catalist Rules which will take effect from 1 January 2022, a director will not be independent if he/she has served for an aggregate of more than nine (9) years unless his/her continued appointment as an independent director has been sought and approved in separate resolutions by (a) all shareholders; and (b) shareholders, excluding the directors and chief executive officer of the issuer, and associates of such directors and chief executive officer (the “Two-Tier Voting”). For the purpose of the resolution referred to in (b), the directors and chief executive officer of the issuer, and their respective associates, must not accept appointment as proxies unless specific instructions as to voting are given. Such resolutions approved by a Two-Tier Voting may remain in force for three (3) years from the conclusion of the AGM following the passing of the resolutions or the retirement or resignation of the director, whichever the earlier.

The Board (with the concurrence of the Nominating Committee) has recommended that the approval of Shareholders be sought through a Two-Tier Voting process at the forthcoming AGM for the continuation of office of Mr Teo Yi-Dar as an Independent Director of the Company. Mr Teo Yi-Dar would have served as an Independent Director of the Company for an aggregate term of more than nine (9) years on 22 February 2022 (since the date of his first appointment on 22 February 2013), and would not be considered independent unless his continued appointment as an Independent Director of the Company has been sought and approved by a Two-Tier Voting process prior to 22 February 2022 (which is before the date by which the next AGM is required to be held).

The Board (with the concurrence of the Nominating Committee) has determined that Mr Teo Yi-Dar continues to remain objective and independent-minded in Board deliberations. His vast experience enables him to provide the Board and the various Board Committees on which he serves, with pertinent experience and competence to facilitate sound decision-making and that his length of service does not in any way interfere with his exercise of independent judgment nor hinder his ability to act in the best interest of the Company.

Details of the Retiring Directors seeking for re-election at the upcoming AGM are set out on pages 35 to 42 of the Annual Report in compliance with the Rule 720(5) of the Catalist Rules.

 

Provision 4.4

Review of Directors’ Independence

As set out under Provision 2.1 of the Code above, on an annual basis, the Nominating Committee is required to determine the independence status of the Directors, bearing in mind the circumstances set forth in the Code, Rule 406(3)(d) of the Catalist Rules and any other salient factors. For FY2020, the Nominating Committee has reviewed and determined that the Independent Directors (namely Mr Teo Yi-Dar, Mr Kim Seah Teck Kim and Mr Henry Tan Song Kok) are independent. Each of the Independent Directors, being members of the Nominating Committee, has abstained and not participated in the review and determination in respect of himself.

Currently, there is no alternate Director on the Board.

 

Provision 4.5

Directors’ Time Commitments

The Nominating Committee ensures that new Directors are aware of their duties and obligations. For re-nomination and re-appointment of Directors, the Nominating Committee takes into consideration the competing time commitments faced by Directors and their ability to devote appropriate time and attention to the Group.

Please refer to the section entitled “Directors Profile” of the Annual Report for the listed company directorships and principal commitments of each Director.

As set out under Provision 1.5 of the Code above, the Nominating Committee has reviewed and is of the opinion that the Directors are able to and have adequately carried out their duties as Directors of the Company, as well as sufficient time and attention are given by the Directors to the affairs of the Company, in FY2020.  Each of the Independent Directors, being members of the Nominating Committee, has abstained and not participated in the review and determination in respect of himself.

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

Provisions 5.1 and 5.2

The Board and the Nominating Committee strive to ensure that Directors on the Board possess the experience, knowledge and skills critical to the Company’s business so as to enable the Board to make sound and well-considered decisions.

The Nominating Committee had carried out an annual performance evaluation process to assess the effectiveness of the Board as a whole and its Board Committees. The purpose of the evaluation process is to increase the overall effectiveness of the Board and its Board Committees. Each Director completes an evaluation form to assess the overall effectiveness of the Board as a whole and its Board Committees. The appraisal process for the Board focused on the evaluation of factors such as the composition of the Board, the Board’s accessibility to information, Board procedures and accountability, communication with key management personnel and Directors’ standards of conduct. The appraisal process for the Board Committees, on the other hand, focused on the evaluation of the respective Board Committees structure, conduct of meetings, measurement and monitoring of Board Committees performance. The results of these evaluations are reviewed and used constructively by the Nominating Committee to identify areas of improvements and recommending appropriate course of action to the Board. Based on the results collated from the evaluations, the Nominating Committee is of the view that the overall effectiveness of the Board as a whole and the Board Committees has been satisfactory for the financial year.

The Nominating Committee had decided unanimously, that the Directors will not be evaluated individually as it is more appropriate and effective to assess the overall effectiveness of the Board as a whole, bearing in mind that each Director contributes in different ways to the success of the Company and Board decisions are made collectively. In addition, the factors taken into consideration for each Director’s re-nomination are the extent of his/her attendance, participation and contribution in the proceedings of the meetings.

The results of these evaluations are reviewed and used constructively by the Nominating Committee to identify areas of improvements and recommending appropriate course of action to the Board.

For FY2020, the Nominating Committee has not engaged any external facilitator to assist in the assessment of the performance of the Board and the Board Committees.

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

Provision 6.1, 6.2 and 6.3

Remuneration Committee Composition

The Remuneration Committee comprises the following members, all of whom are non-executive and the majority, including the Chairman, are independent:

Teo Yi-Dar                   (Lead Independent Director)              Chairman

Kim Seah Teck Kim    (Independent Director)                       Member

Tan Geok Moey           (Non-Executive Director)                    Member

Henry Tan Song Kok  (Independent Director)                       Member

 

Roles and Duties of Remuneration Committee and Remuneration Framework               

The Remuneration Committee has written terms of reference that sets out its duties and responsibilities. Amongst them, the Remuneration Committee is responsible for:

  • recommending to the Board a general framework of remuneration for the Directors and key management personnel, and determine specific remuneration packages for each Director, and the recommendations of the Remuneration Committee are submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits-in-kind will be covered by the Remuneration Committee; and
  • performing an annual review of the remuneration of employees related to the Directors and substantial Shareholders to ensure that their remuneration packages are in line with the Company’s staff remuneration guidelines and commensurate with their respective job scope and level of responsibilities. It will also review and approve any bonuses, pay increases and/or promotions for these employees.

The Remuneration Committee will also review the Company’s obligations under the service agreements entered into with the Executive Director and key management personnel that would arise in the event of termination of these service agreements. This is to ensure that such service agreements contain fair and reasonable termination clauses which are not overly generous. The Remuneration Committee aims to be fair and avoid rewarding poor performance.

The Remuneration Committee is scheduled to meet at least once a year. Each member of the Remuneration Committee shall abstain from voting on any resolution in respect of his/her remuneration package or that of employees related to his/her.

 

Provision 6.4

Engagement of Remuneration Consultants

The Remuneration Committee, if necessary, may seek external expert advice of which the expenses will be borne by the Company. For FY2020, the Remuneration Committee has not sought external advice nor appointed remuneration consultants in considering the remuneration of all Directors.

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

Provisions 7.1 and 7.3

As part of its review, the Remuneration Committee ensures that remuneration packages are comparable within the industry and with similar companies. The Remuneration Committee considers the Company’s relative performance and the contributions and responsibilities of the individual Directors.

 

Policy in respect of Executive Director’s and other key management personnel’s remuneration

The Company advocates a performance-based remuneration system that is flexible and responsive to the market, the Company’s and the individual employee’s performance. The total remuneration mix comprises annual fixed cash and annual performance incentive. The annual fixed cash component comprises the annual basic salary plus any other fixed allowances. The Company believes in promoting commitment and motivation by aligning incentives with performance, so as to be able to attract, retain and motivate talents without being excessive, and thereby maximise value for Shareholders.

The Company currently does not have any long-term incentive scheme.

The Executive Director does not receive Director’s fees. The Executive Director is paid pursuant to his service agreement.

The Company’s wholly-owned subsidiary, AVH Animal Ark Pte. Ltd., has also entered into a service agreement with Dr Lin Chung Chieh Eugene (“Dr Eugene Lin”) (a key management personnel of the Group). Pursuant to the service agreement, Dr Eugene Lin will commit to an employment period of at least 30 months following completion of the acquisition on 13 August 2018, with automatic renewals for successive periods of 36 months thereafter on the same terms unless otherwise agreed in writing between the Company and Dr Eugene Lin or terminated in accordance with the service agreement.  Dr Eugene Lin will be paid a monthly remuneration, to be reviewed from time to time by the Remuneration Committee, and a discretionary bonus of such amount and at such intervals as AVH Animal Ark Pte. Ltd. may in its absolute discretion determine. The service agreement also provides for, inter alia, use of intellectual property, certain restrictive covenants (including non-compete obligation), and grounds of termination. Except where AVH Animal Ark Pte. Ltd. has the right to terminate Dr Eugene Lin’s employment with immediate effect, either party may terminate the employment by give the other six (6) months’ notice in writing, provided that Dr Eugene Lin shall not terminate the employment for the first 30 months following completion of the acquisition, and shall not pay salary in lieu of the required period of notice.

Having reviewed and considered the variable components in the remuneration packages of the Executive Director and key management personnel, the Remuneration Committee is of the view that there is presently no urgent need for the Company to consider the use of contractual provisions to allow the Company to reclaim incentive components of remuneration from Executive Director and key management personnel in exceptional circumstances of misstatement of financial results or misconduct resulting in financial loss to the Company.

 

Provision 7.2

Policy in respect of remuneration for Non-Executive Director and Independent Directors

Non-Executive Director and Independent Directors do not have service agreements with the Company. They are compensated based on fixed Directors’ fees, which are determined by the Board, after the recommendation by the Remuneration Committee, based on their contribution, taking into consideration factors such as effort, time spent and responsibilities of the Non-Executive and Independent Directors. The Chairman of each Board Committee is paid an additional fee, and the Chairman of Audit Committee is paid a higher fee than the Chairman of the other Board Committees in view of the higher responsibility carried by that office. The proposed Directors’ fees are subject to approval by Shareholders at the AGM. Non-Executive and Independent Directors do not receive any other remuneration from the Company.

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

Provisions 8.1 and 8.3

Remuneration Policy and Criteria

As set out under Provisions 7.1 and 7.3 of the Code above, the Company advocates a performance-based remuneration system that is flexible and responsive to the market, the Company’s and the individual employee’s performance. The total remuneration mix comprises annual fixed cash and annual performance incentive. The annual fixed cash component comprises the annual basic salary plus any other fixed allowances.

 

Remuneration of Directors and key management personnel

The level and mix of remuneration of the Company’s Directors and key management personnel (who are not Directors or the Chief Executive Officer) for FY2020 are as follows:

Remuneration band and Name of Director

Base/Fixed salary*

(%)

Bonus

 

(%)

Directors’ fees**

(%)

Benefits-in-kind

(%)

Total

 

(%)

 

Directors

 

 

 

 

 

 

Between S$250,000 and S$500,000

 

 

 

 

 

 

Tan Tong Guan

97

3

100

 

 

 

 

 

 

 

 

Below S$250,000

 

 

 

 

 

 

Teo Yi-Dar

100

100

 

Tan Geok Moey

100

100

 

Kim Seah Teck Kim

100

100

 

Henry Tan Song Kok

100

100

 

 

 

 

 

 

 

 

 

 

Remuneration band and
Name of Key Management Personnel***

Base/Fixed salary*

(%)

Bonus

 

(%)

Benefits-in-kind

(%)

Total

 

(%)

Between S$250,000 and S$500,000

 

 

 

 

Lin Chung Chieh Eugene

100

100

 

 

 

 

 

Below S$250,000

 

 

 

 

Xue Ru

85

15

100

 

 

 

 

 

                     

*  These amounts are inclusive of employer’s CPF contribution.

** The proposed Directors’ fees for FY2020 is subject to Shareholders’ approval at the forthcoming AGM.  

*** The Group has only two (2) key management personnel (who are not Directors or the Chief Executive Officer) during FY2020.

The Board believes that it is for the benefit of the Company not to disclose in absolute number and in aggregate, the remuneration breakdown of the Directors as well as the aggregate total remuneration paid to the key management personnel (who are not Directors or the Chief Executive Officer), due to its sensitive nature and concerns of poaching. After taking into account the reasons for non-disclosure stated above, the Board is of the view that the current disclosure of the remuneration presented herein in this report is sufficient to provide Shareholders information on the Group’s remuneration policies, as well as the level and mix of remuneration. Accordingly, the Board is of the view that the Company complies with Principle 8 of the Code.

The Company currently does not have an employee share option scheme or performance share plan in place.

 None of the Directors (including the Chief Executive Officer) and the key management personnel (who are not Directors or the Chief Executive Officer) of the Company has received any termination, retirement, post-employment benefits for FY2020.

The Board has not included a separate annual remuneration report to Shareholders in the Annual Report on the remuneration of the Directors and the key management personnel (who are not Directors or the Chief Executive Officer) as the Board is of the view that the matters which are required to be disclosed in such annual remuneration report have already been sufficiently disclosed in the Annual Report and in the financial statements of the Company.

 

Provision 8.2

Remuneration of Substantial Shareholder or Immediate Family Members of Director and Chief Executive Officer

The level and mix of remuneration of the employees of the Company who are substantial Shareholders for FY2020 are as follows:

Remuneration band and
Name of Employees who are substantial Shareholders

Base/Fixed salary*

(%)

Bonus

 

(%)

Benefits-in-kind

(%)

Total

 

(%)

Between S$250,000 and S$500,000

 

 

 

 

Lin Chung Chieh Eugene

100

100

 

 

 

 

 

Below S$250,000

 

 

 

 

Poh E-Lynn Elaine

100

100

 

 

 

 

 

*  These amounts are inclusive of employer’s CPF contribution.

Save as disclosed above, there is no employee of the Company who is a substantial Shareholder, or is an immediate family member of any Director, the Chief Executive Officer or a substantial Shareholder, and whose remuneration exceeded S$100,000 during FY2020. “Immediate family member” refers to the person’s spouse, child, adopted child, step-child, sibling and parent.

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

Provisions 9.1 and 9.2

The Company has established an enterprise risk management framework and register to identify, manage and monitor the business and operating risks impacting the Company on an on-going basis. The Board has overall responsibility for the governance of risk and with the support of the Audit Committee, oversees the design, implementation and monitoring of the risk management and internal control systems.

The Audit Committee will review the reports submitted by the independent internal auditors relating to the adequacy and effectiveness of the Group’s significant internal controls (including financial, operational, compliance and information technology controls) and risk management systems. The Audit Committee will also review the effectiveness of the actions taken by the Management on the recommendations made by the independent internal auditors in this respect. 

On an annual basis, the Board will review the adequacy and effectiveness of the internal controls (including financial, operational, compliance and information technology controls) and risk management systems to ensure that they are able to meet the needs of the Group in its current business environment.

For FY2020, the Board has received assurance (i) from the Chief Executive Officer and Chief Financial Officer that the financial records have been properly maintained and the financial statements give a true and fair view of the Company’s operations and finances; and (ii) from the from the Chief Executive Officer and the key management personnel that the Company’s risk management and internal control systems are effective and adequate.

The Board and the Audit Committee have reviewed the adequacy and effectiveness of the Group’s internal controls (including financial, operational, compliance and information technology controls) and risk management systems in all material aspects. As part of the annual statutory audit of the financial statements, the external auditors will highlight any material weaknesses in financial controls over the areas that are significant to the audit. Such material internal control weaknesses noted during their audit and recommendations, if any, by the external auditors are reported to the Audit Committee. The Audit Committee will follow up on the actions taken by the Management in response to the recommendations made by the external auditors. The Audit Committee have reviewed the follow up reports submitted by the independent internal auditors and reviewed the effectiveness of the actions taken by the Management on the recommendations made by the independent internal auditors in this respect.  

Based on the internal controls established and maintained by the Company, work performed by the independent internal auditors and the external auditors, reviews performed by the Management and assurance received from the Chief Executive Officer, Chief Financial Officer and key management personnel, the Board, with the concurrence of the Audit Committee, is of the opinion that the Group’s internal controls (including financial, operational, compliance and information technology controls) and risk management systems are adequate and effective for FY2020.

The Board will consider the necessity of establishing a separate Board risk committee as and when it deems necessary.

The Board and the Audit Committee note that all internal control systems contain inherent limitations and no systems of internal controls could provide absolute assurance against the occurrence of material errors, poor judgement in decision making, human errors, losses, fraud or other irregularities.

Principle 10: Audit Committee

The Board has an Audit Committee which discharges its duties objectively

Provisions 10.2 and 10.3

Audit Committee Composition

The Audit Committee comprises the following members, all of whom are non-executive and the majority, including the Chairman, are independent:

Henry Tan Song Kok (Independent Director)                       Chairman

Teo Yi-Dar                  (Lead Independent Director)              Member

Tan Geok Moey          (Non-Executive Director)                    Member

Kim Seah Teck Kim    (Independent Director)                       Member

At least two members of the Audit Committee have accounting and related financial management expertise and experience. None of the members of the Audit Committee are former partners or directors of the Company’s existing audit firm (a) within a period of two years commencing on the date of their ceasing to be a partner of the audit firm and (b) for as long as they have any financial interest in the auditing firm.

 

Provision 10.1

Roles and Duties of Audit Committee

The Audit Committee has explicit authority to investigate any matter within its terms of reference, full access to and co-operation by the Management, full discretion to invite any person including Director or key management personnel of the Company to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The Audit Committee will assist the Board in discharging its responsibility to safeguard the assets of the Company, maintain adequate accounting records, and develop and maintain effective systems of internal control, with the overall objective of ensuring that the Management creates and maintains adequate and effective control environment in the Company. The Audit Committee will provide a channel of communication between the Board, the Management and the external auditors on matters relating to audit.

The Audit Committee has written terms of reference that sets out its duties and responsibilities. Amongst them, the Audit Committee is responsible for:

  • reviewing the scope and results of the audit and its cost effectiveness;
  • reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any results announcements in respect of the Company’s financial performance, where the external auditors in their audit of the Company’s year-end financial statements, raise any significant issues which have a material impact on the interim financial statements or financial updates previously announced by the Company;
  • making recommendations to the Board on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors;
  • reviewing with the external auditors the audit plan, their evaluation of the financial controls over the areas that are significant to the audit, their letter to the Management and the Management’s response;
  • reviewing the half yearly and annual financial statements and results announcements before submission to the Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards and compliance with the Catalist Rules and any other relevant statutory or regulatory requirements;
  • reviewing annually the adequacy and effectiveness of the Company’s internal controls (including financial, operational, compliance and information technology controls), as well as risk management policies and systems established by the Management. The Audit Committee will also ensure co-ordination between the external auditors and the Management, and review the assistance given by the Management to the external auditors, and discuss problems and concerns, if any, arising from audits, and any matters which the external auditors may wish to discuss (in the absence of the Management, where necessary);
  • reviewing key financial risk areas, with a view to providing an independent oversight on the Company’s financial reporting, the outcome of such review to be disclosed in the annual report or, where the findings are material, announced immediately via SGXNet;reviewing and discussing with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which have or are likely to have a material impact on the Company’s operating results or financial position, and the Management’s response;
  • reviewing and establishing procedures for receipt, retention and treatment of complaints received by the Company regarding, inter alia, criminal offences involving the Company or its employees, questionable accounting, auditing, business, safety or other matters that impact negatively on the Company;
  • reviewing the Company’s compliance with relevant government regulations and licensing requirements;
  • undertaking such other reviews and projects as may be requested by the Board, and report to the Board its findings from time to time on matters arising and requiring the attention of the Audit Committee; and
  • reviewing interested person transactions (if any) falling within the scope of Chapter 9 of the Catalist Rules;reviewing potential conflicts of interest (if any)reviewing with the internal auditor, their internal audit plans and their evaluation of the adequacy and effectiveness of the internal control and accounting system before submission of the results of such review to the Board for approval;
  • generally, undertaking such other functions and duties as may be required by statute or by the Catalist Rules, or by such amendments as may be made thereto from time to time.

The Audit Committee shall also commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on the operating results and/or financial position of the Company. In the event that a member of the Audit Committee is interested in any matter being considered by the Audit Committee, he will abstain from reviewing that particular transaction or voting on that particular resolution.

 

Provision 10.4

Internal Audit Function

The current size of the operations of the Group does not warrant the Group to have an in-house audit function. The internal audit function of the Group has been outsourced to Ardent Business Advisory Pte. Ltd., an independent accounting and auditing firm. The internal auditor’s primary line of reporting is to Chairman of the Audit Committee. The Audit Committee will review the internal audit plan to ensure that the scope is adequate and covers the review of the significant business functions of the Company and all internal audit findings and recommendations are submitted to the Audit Committee for deliberation with copies of these reports extended to the relevant key management executives. The Audit Committee approves the appointment, termination, evaluation and fees of the internal audit firm.

The internal auditor is guided by the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

The Company cooperates fully with the internal auditor in terms of allowing unfettered access to all the Company’s documents, records, properties and personnel, including access to the Audit Committee.

The Audit Committee has reviewed with the internal auditors their audit plan and their evaluation of the system of internal controls and has evaluated their audit findings and Management’s responses to those findings, the adequacy and effectiveness of material internal controls, (including financial, operational, compliance and information technology controls) and risk management systems of the Company and the Group for FY2020. The Audit Committee is satisfied that the outsourced internal audit function is independent, adequately resourced, effective and has the appropriate standing within the Group. The Audit Committee is also of the view that the outsourced internal audit function is adequately staffed with persons with relevant qualifications and experience and adheres to professional standards including those promulgated by The Institute of Internal Auditors. 

The Audit Committee will annually, review the independence, adequacy of resources and effectiveness of the internal audit function and ensure that it has appropriate standing within the Group.

 

External Audit Function

The Audit Committee will review the independence and objectivity of external auditors annually after taking into account all audit and non-audit services provided to the Company. Having considered the breakdown of fees paid to the external auditors as detailed on page 34 of the Annual Report and compliance with Singapore Accountants (Public Accountants) Rules, as well as the nature and extent of such services, the Audit Committee is satisfied that such services will not prejudice the independence and objectivity of the external auditors. The external auditors have also confirmed their independence in this respect, and that they are registered with the Accounting and Corporate Regulatory Authority and approved under the Accountants Act. 

After considering the adequacy of the resources and experience of the external auditors’ firm and the audit partner-in-charge assigned to the audit, the firm’s other audit engagements, the size and complexity of the Group and the number and experience of supervisory and professional staff assigned to the particular audit, the Audit Committee has recommended to the Board the nomination and re-appointment of Ernst & Young LLP as the external auditors for the Company’s audit obligations for the financial year ending 31 December 2021, at the forthcoming AGM.

In appointing the auditing firms for the Company and its subsidiaries, the Company has complied with Rules 712 and 715 of the Catalist Rules for FY2020.

 

Provision 10.5

Meeting Auditors without the Management

In performing its functions, the Audit Committee and Management meet with the external and internal auditors to discuss and evaluate the internal controls of the Group and review the overall scope of both external and internal audits. At least once a year and as and when required, the Audit Committee meets with the external and internal auditors without the presence of Management, to review any matters that might be raised privately.

For FY2020, the Audit Committee has met with the external auditors and the independent internal auditors once, without the presence of the Management.

 

Key Audit Matters

The Audit Committee is kept abreast by the external auditors on regulatory changes and updated accounting standards during the Audit Committee meetings.

The Audit Committee has reviewed the key audit matters disclosed in the external auditors’ report and is of the view that there is no material inconsistency between the audit procedures adopted by the external auditors and the Management’s assessment.

 

Whistle Blowing Policy

The Company has put in place a whistleblowing policy, whereby anyone may, in good faith and in confidence, raise concerns or observations about possible corporate malpractices and improprieties in financial reporting or other matters directly to Mr Teo Yi-Dar, the Lead Independent Director. No such whistleblowing report was received for FY2020.

The Audit Committee will review the policy and arrangements by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The objective of the Audit Committee will be to ensure that arrangements are in place for the independent investigation of such matters and for appropriate follow-up actions. No such matter was raised by any staff of the Company for FY2020.

 

Audit Committee Activities

In FY2020, the Audit Committee had, among others, carried out the following activities:

  • reviewed the half-year and full-year financial statements announcements of the Group, and recommended to the Board for approval and release via the SGXNet;
  • reviewed the adequacy and effectiveness of the Group’s internal controls (including financial, operations, compliance and information technology controls), and risk management systems;
  • reviewed and approved the annual audit plan of the external auditors;
  • reviewed the independence of the external auditors;
  • reviewed the annual re-appointment of the external auditors and determined their remuneration, and made a recommendation for the Board’s approval; and
  • reviewed and approved the audit plan of the internal auditors;
  • met with the external auditors and internal auditors once without the presence of the Management.

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

Provisions 11.1, 11.2, 11.3 and 11.4

All Shareholders are informed of shareholders’ meetings through notices contained in annual reports or circular sent to all Shareholders. These notices are also published in the newspapers and posted onto SGXNet. Shareholders are encouraged to attend the Company’s general meetings and to participate effectively in and vote at general meetings of Shareholders to ensure a high level of accountability and to stay informed of the Company’s strategies and growth plans and establish and maintain regular dialogue between the Company and Shareholders, to gather views and inputs, and address Shareholders’ concerns. The chairpersons and/or members of the Board, Audit Committee, Remuneration Committee and Nominating Committee and the external auditors are normally available at Shareholders’ meetings to address any Shareholders’ queries, including those relating to the conduct of audit and the preparation and content of the auditors’ report.

If any Shareholder is unable to attend, he/she is allowed to appoint up to two (2) proxies to vote on his/her behalf at the meeting through proxy forms sent in advance. The Company’s Constitution currently does not allow a member to appoint more than two (2) proxies to attend and vote at the same general meetings and for other absentia voting methods such as by mail, electronic mail, fax and/or other methods. With effect from 3 January 2016, the Companies Act (Chapter 50) of Singapore was amended, amongst others, to allow certain members, defined as “relevant intermediary” to attend and participate in general meetings. Relevant intermediary includes corporations holding licences in providing nominee and custodial services and CPF Board which purchases shares on behalf of the CPF Investors.

For FY2020, due to the COVID-19 outbreak and the circuit breaker put in place by the Singapore Government, the Company’s last AGM held on 3 June 2020 (“2020 AGM”) was held by way of electronic means, through “live webcast” and “audio-only means”, pursuant to the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020 (“COVID-19 Order”). The notice of AGM was not published in the newspaper, but was instead disseminated to Shareholders through publication on SGXNet and the Company’s corporate website, in accordance with the alternative arrangements for holding of the AGM pursuant to the COVID-19 Order. The Company had also published a notice to Shareholders, together with the notice of AGM, detailing the alternative arrangements for the 2020 AGM, during the COVID-19 pandemic.

Pursuant to Part 4 of the COVID-19 (Temporary Measures) Act 2020, a member of the Company (whether individual or corporate and including a relevant intermediary) entitled to vote at the AGM must appoint the Chairman of the AGM to act as proxy and direct the vote at the AGM. In appointing the Chairman of the AGM as proxy, a member (whether individual or corporate and including a relevant intermediary) must give specific instructions as to voting, or abstentions from voting, in the form of proxy, failing which the appointment will be treated as invalid. Shareholders participated in the 2020 AGM via electronic means, voting by appointing the Chairman of the 2020 AGM as proxy and their questions (if any) in relation to any resolution set out in the notice of AGM were sent to the Company in advance of the 2020 AGM, and responses to the questions were provided via announcement on SGXNet and the Company’s corporate website. The Company did not receive any question from Shareholders before the 2020 AGM.

All Directors, Management, Company Secretary, external auditors and the Company’s continuing sponsor were present at the 2020 AGM. Save for the 2020 AGM, there were no other general meetings of the Company held during FY2020.

Each item of special business included in the notice of the general meetings will be accompanied by full explanation of the effects of a proposed resolution. Separate resolutions are proposed for each substantially separate issue at general meetings.

The Company understands that it should put all resolutions to vote by poll. In the event a poll is conducted, the Company will make an announcement of the detailed results showing the numbers of votes cast for and against each resolution and the respective percentages

 

Provision 11.5

Minutes of General Meetings

The Company prepares minutes of general meetings that include substantial and relevant comments or queries from Shareholders relating to the agenda of the meeting, and responses from the Board and the Management. Minutes of the 2020 AGM held in FY2020 had been published by the Company on its corporate website and on the SGXNet within one (1) month from the date of the 2020 AGM.

 

Provision 11.6

Dividend Policy

The Company does not have a policy on payment of dividends. The issue of payment of dividend is deliberated by the Board annually having regard to various factors. For FY2020, the Company had proposed a first and final tax exempt (one-tier) cash dividend of 0.20 Singapore cents per ordinary share, subject to the approval of Shareholders at the forthcoming AGM.

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

Provisions 12.1, 12.2 and 12.3

The Board believes in regular, timely and effective communication with Shareholders. Shareholders are kept informed of all important developments concerning the Company through timely dissemination of information via SGXNet announcements, press releases, annual reports and various other announcements made whenever necessary.

The Company will voluntarily announce interim updates on useful and relevant information in addition to the mandatory financial statements to provide Shareholders a better understanding of the Company’s performance. The Board will consider whether interim updates should be provided to Shareholders, and the appropriate frequency of the updates.

The AGM is the principal forum for dialogue between the Company and Shareholders, to gather views and inputs, and address Shareholders’ concerns. The Company recognises the value of feedback from Shareholders. During the general meetings, Shareholders are given ample time and opportunities to air their views and concerns. All the Directors will endeavour to attend the general meetings, and Shareholders will be given the chance to share their thoughts and ideas or ask questions relating to the resolutions to be passed or on other corporate and business issues. Please refer to Principle 11 above for information on the proceedings of the 2020 AGM held in FY2020.

Presently, the Company does not have an investor relations policy or protocol in place nor a dedicated investor relations team. The Company will assess the need to establish an investor policy or protocol or investor relations team as and when it deems necessary. Notwithstanding so, taking into account the communication and dialogue with Shareholders taken by the Company as set out above, the Board is of the view that the Company complies with Principle 12 of the Code.

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

Provisions 13.1 and 13.2

Stakeholders’ Engagement

The Group has regularly engaged its stakeholders through various medium and channels to ensure that the business interests are aligned with those of the stakeholders, to understand and address the concerns so as to improve services and products’ standards, as well as to sustain business operations for long-term growth.

The stakeholders have been identified as those who are impacted by the Group’s business and operations and those who are similarly are able to impact the Group’s business and operations. The Group has also undertaken a process to determine the economic, environmental, social and governance issues, which important to these stakeholders.

Detailed approach to the stakeholder engagement and materiality assessment will be disclosed in the Group’s sustainability report for FY2020, which will be published by the Company on SGXNet by 31 May 2021, to keep stakeholders informed on the Group’s business and operations.

 

Provision 13.3

Corporate Website

The Company maintains a corporate website at http://asiavets.com to communicate and engage with stakeholders. The corporate website provides, among others, announcements, annual reports, and financial information of the Group, stock information of the Company, as well as the profiles of the Group, the Directors and the key management personnel.

 

Dealings in Securities

The Company observes closely the best practices on dealings in securities (“Securities Dealings Best Practices”) in compliance with Rule 1204(19) of the Catalist Rules. The Securities Dealings Best Practices provide guidance to the Directors and employees of the Company with regard to dealing in the Company’s securities.

The Company issues circulars or electronic mails to its Directors, key management personnel and employees that they must not trade in the shares of the Company during the period commencing one (1) month before the release of the half year and year-end results and ending on the date of such announcements. In addition, Directors and key management personnel are expected to observe insider trading laws at all times even when dealing in securities within the permitted trading period. They are discouraged from dealing in the Company’s shares on short term considerations.

 

Interested Person Transactions

The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the Audit Committee and that the transactions are carried out on normal commercial terms and shall not be prejudicial to the interests of the Company and its minority Shareholders. When a potential conflict of interest arises, the Director concerned takes no part in discussions nor exercises any influences over other members of the Board.

During the financial year under review, there have been no interested person transactions entered into by the Group that requires disclosure pursuant to the Catalist Rules.

 

Material Contracts

Other than disclosed in the audited financial statements and the service agreement between the Executive Director and the Company, there were no material contracts (including loans) entered into by the Company or its wholly-owned subsidiary involving the interests of the Chief Executive Officer, any Director or controlling Shareholders, which are either still subsisting as at the end of FY2020 or if not then subsisting, entered into since the end of the previous financial year.

 

Fees Paid to External Auditors

Ernst & Young LLP, the external auditors, rendered the following services (and charged the fees) set out below for FY2020:

     
   

2020

   

S$’000

Audit fees         

 

80

Non-audit fees:

   

   Agreed upon procedures on half-year review

 

5

 

 

 

   Tax returns compliance service – Current year

 

9

 

 

 

Total audit and non-audit fees

 

94

The Audit Committee has reviewed all non-audit services (described above) provided by Ernst & Young LLP and is of the view that they did not affect the independence of Ernst & Young LLP, as it has complied with Singapore Accountants (Public Accountants) Rules.

 

Non-Sponsorship fees 

With reference to Rule 1204(21) of the Catalist Rules, there were no non-sponsorship fees payable or paid to ZICO Capital Pte. Ltd. in FY2020.

Additional information on directors nominated for re-election – Appendix 7f to the Catalist Rules

Pursuant to Rule 720(5) of the Catalist Rules, the information as set out in Appendix 7F to the Catalist Rules relating to Mr Teo Yi-Dar and Ms Tan Geok Moey, being the Directors who are retiring in accordance with the Company’s Constitution at the forthcoming AGM, is set out below:

Name of Director

 

Teo Yi-Dar                 

 

Tan Geok Moey

 

 

 

 

 

Date of first appointment

 

22 February 2013

 

15 March 2010

 

 

 

 

 

Date of last re-appointment
(if applicable)

 

3 June 2020

 

20 April 2018

 

 

 

 

 

Age

 

49

 

60

 

 

 

 

 

Country of principal residence

 

Singapore

 

Singapore

 

 

 

 

 

The Board’s comments on this re-election (including rationale, selection criteria, and the search and nomination process)

 

The Board of Directors of the Company has accepted and approved the Nominating Committee’s recommendation, who has reviewed and considered Mr Teo’s contributions and performance as an Independent Director of the Company. Mr Teo, being a member of the Nominating Committee, has abstained from making any recommendation and/or participating in any deliberation of the Nominating Committee and the Board in respect of the assessment of his own performance or re-election as a Director.

 

The Board of Directors of the Company has accepted and approved the Nominating Committee’s recommendation, who has reviewed and considered Ms Tan’s contributions and performance as the Non-Executive Director of the Company. Ms Tan, being a member of the Nominating Committee, has abstained from making any recommendation and/or participating in any deliberation of the Nominating Committee and the Board in respect of the assessment of her own performance or re-election as a Director.

 

 

 

 

 

Whether appointment is executive, and if so, the area of responsibility

 

Non-Executive

 

Non-Executive

 

 

 

 

 

Job title

 

Lead Independent Director, Chairman of the Remuneration Committee, and a member of the Audit Committee and Nominating Committee

 

Non-Executive Director, and a member of the Audit Committee, the Remuneration Committee and the Nominating Committee

 

 

 

 

 

Professional qualifications

 

Chartered Financial Analyst, CFA Institute

Master of Science (Applied Finance), National University of Singapore

Master of Science (Industrial and Systems Engineering), National University of Singapore

Bachelor of Engineering (Electrical), National University of Singapore

 

Bachelor of Accountancy, National University of Singapore

 

 

 

 

 

Working experience and occupation(s) during the past 10 years

 

 

1999 to 2016:
SEAVI Advent Management Pte Ltd, Investment Manager

2016 to 2018:
Kenyon Group Limited, Director

2018 to Present:
Altair Capital Advisors Pte Ltd, Director

 

February 1991 to Present:
Tan Gee Beng Private Limited, Director

 

 

 

 

 

Shareholding interest in the listed issuer and its subsidiaries

 

No

 

Yes

Deemed interest in 57,539,331 ordinary shares (39.37%) of the Company

 

 

 

 

 

Any relationship (including immediate family relationships) with any existing director, existing executive officer, the issuer and/or substantial shareholder of the listed issuer or of any of its principal subsidiaries

 

Nil

 

Ms Tan is a controlling Shareholder of the Company, via her deemed interest in the 57,539,331 ordinary shares of the Company held by Tan Gee Beng Private Limited by virtue of Section 7 of the Companies Act (Chapter 50) of Singapore.

Ms Tan is also related to other controlling Shareholders of the Company, namely Tan Gee Beng Private Limited, Mr Tan Tong Guan (who is also the Executive Director and Chief Executive Officer of the Company) and Ms Tan Yoke Hong. Ms Tan is a director of Tan Gee Beng Private Limited, and she is the sister of Mr Tan Tong Guan and Ms Tan Yoke Hong.

 

 

 

 

 

Conflict of interest (including any competing business)

 

Nil

 

Nil

 

 

 

 

 

Undertaking (in the format set out in Appendix 7H) under Rule 720(1) has been submitted to the listed issuer

 

Yes

 

Yes

 

 

 

 

 

Other Principal Commitments Including Directorships

 

Past (for the last 5 years)

Directorships

  • Bayston Investments Limited
  • Pleasant Way Analyse Development Limited
  • Guotaiqixing Biomedical International (Singapore) Pte. Ltd.
  • HG Metal Pte Ltd
  • Niho (Singapore) Pte Ltd
  • SACLP Investments Limited
  • SAP Investments Limited
  • TFSA Investments Ltd
  • Value Plus Investment Limited
  • W Capital Markets Pte. Ltd.

Other Principal Commitments

Nil

 

Present

Directorships

  • Aldersgate Holdings Limited
  • Altair Capital (I) Ltd
  • Altair Capital Advisors Pte Ltd
  • Altair Capital General Partner Ltd
  • Altair Fund (I) Pte. Ltd.
  • Asia Vets Holdings Ltd
  • AVH Animal Ark Pte Ltd
  • Beijing Denox Environment & Technology Co., Ltd.
  • China Yuanbang Property Holdings Limited
  • Ciena Enterprises Limited
  • Clear Vision Ventures Limited
  • Denox Environmental & Technology Holdings Limited
  • Fortune Knight International Limited
  • Gold Future Investment Limited
  • HG Construction Steel Pte Ltd
  • HG Metal Distribution Sdn Bhd
  • HG Metal Investments Pte Ltd
  • HG Metal Manufacturing Ltd
  • HG Metal Manufacturing Sdn Bhd
  • Hongyin Resources (HK) Co Limited
  • Jin Heng Li Hardware Sdn Bhd
  • Kenyon Group (Asia) Pte Ltd
  • Kenyon Group Limited
  • Motto Auction Pte Ltd
  • Myghty (Yangon) Limited
  • Myghty Holdings Pte Ltd
  • Oriental Metals Pte Ltd
  • Penyao Environmental Protection Co., Ltd.
  • PT HG Metal Distribution Indonesia
  • SEAVI Advent Asia Investments (III) Ltd
  • Sirius Vega Pte Ltd
  • Sin Heng Heavy Machinery Limited
  • Springhaven Holdings Limited
  • TEE International Limited
  • Top Rich Investment Limited
  • TPSC Asia Group Holding Limited
  • TPSC Asia Pte Ltd
  •  TPSC Holdings Pte Ltd
  •  Tramore Global Limited
  • United Hope Pte Ltd
  • Yangzijiang Shipbuilding (Holdings) Ltd.

 

Other Principal Commitments

  • Altair Capital Advisors Pte Ltd, Director

 

Past (for the last 5 years)

Directorships

  • Smartflex Technology Pte Ltd
  • NZ First Properties Pte Ltd

Other Principal Commitments

Nil

 

Present

Directorships

  • Tan Gee Beng Private Limited
  • TGB Properties Pte Ltd
  • TGB Properties (NZ) Pte Ltd
  • Wellington First Properties (NZ) Pte Ltd
  • Cosmos Investment Pte Ltd
  • Tan Gee Beng (Hong Kong) Ltd

 

Other Principal Commitments

Nil

 

 

 

 

 

Disclose the following matters concerning an appointment of director, chief executive officer, chief financial officer, chief operating officer, general manager or other officer of equivalent rank. If the answer to any question is “yes”, full details must be given.

(a) Whether at any time during the last 10 years, an application or a petition under any bankruptcy law of any jurisdiction was filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within 2 years from the date he ceased to be a partner?

No

No

(b) Whether at any time during the last 10 years, an application or a petition under any law of any jurisdiction was filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within 2 years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency?

No

No

(c) Whether there is any unsatisfied judgment against him?

No

No

(d) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose?

No

No

(e) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach?

No

No

(f) Whether at any time during the last 10 years, judgment has been entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or he has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part?

No

No

(g) Whether he has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust?

No

No

(h) Whether he has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust?

No

No

(i) Whether he has ever been the subject of any order, judgment or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity?

No

No

(j) Whether he has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of :—

(i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or

(ii) any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or

(iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or

(iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, in connection with any matter occurring or arising during that period when he was so concerned with the entity or business trust?

Yes.

Mr Teo Yi-Dar was appointed to the board of directors of TEE International Limited (“TIL”) as a non-executive non-independent director on 7 September 2020.

Prior to his appointment, TIL had received an order dated 4 March 2020 from the Commercial Affairs Department (“CAD”) to produce various categories of documents to CAD to assist with an investigation relating to matters involving TIL and certain employees of TIL. The CAD investigation is still ongoing.

No

(k) Whether he has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Monetary Authority of Singapore or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere?

No

No