OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 151 150 PERENNIAL HOLDINGS PRIVATE LIMITED ANNUAL REPORT 2025 Corporate Governance Internal Approvals The Group has established internal guidelines setting forth matters that require the Board’s approval, including business strategies and proposals, investment acquisitions and disposals, borrowings and financing arrangements, budgets, project development and capital and operating expenditures. Such matters which have been approved by the Board are clearly communicated to Management in writing. These internal guidelines are set out in the Financial Authority Limits (“FAL”), which provide clear guidelines on the approval matrix for all financial matters and ensure that appropriate controls and decision-making are consistently applied throughout the Group. The FAL is reviewed and updated periodically to ensure operational relevancy with respect to the changing needs of the Company and the Group as a whole. The Board approves the FAL and any changes thereto. Apart from matters that specifically require the Board’s approval, the Board has delegated its authority to approve major transactions (such as capital investments, acquisitions and disposals, capital expenditure and expenses) below certain threshold limits to the EC and Management. Approval sub-limits are also provided at the Management level to facilitate operational efficiency. Financial Reporting The Board is updated quarterly on the Group’s financial performance in respect of key operational activities. These reports provide explanations for material variances in financial performance in comparison with budgets and the actual performance of corresponding periods in the preceding year or quarter, as well as an updated full-year forecast. BOARD COMMITTEES To assist the Board in discharging its duties and responsibilities, the Board has delegated special authorities to the Board Committees, namely, the NRC, the CDC and the EC. The Board Committees have been constituted with clear written terms of reference approved by the Board, setting out their composition, authority, and duties, including reporting back to the Board, and may decide on matters within their respective terms of reference and applicable limits of authority. All terms of reference are reviewed and updated when necessary to ensure their continued relevance. Notwithstanding the delegation of authority to the Board Committees, the ultimate responsibility for decision- making and oversight rests with the Board as a whole. (i) The Nominating and Remuneration Committee: The NRC is established to ensure a formal and transparent process in developing remuneration policy and in determining the remuneration packages of KMP. The NRC also makes recommendations to the Board on matters relating to: 1. the review of succession plans for the Executive Chairman and CEO, and KMP; 2. the review of training and professional development programmes for the Board and KMP, where relevant and necessary; and 3. the appointment of Directors (including Alternate Directors, if any). The members of the NRC are: • Mr Kuok Khoon Hong (Chairman) • Mr Ron Sim • Mr Fang Fenglei (ii) The Corporate Disclosure Committee: The CDC is established to assist the Board in reviewing the adequacy of corporate disclosures to the investment community, bankers, employees, customers, and the general public. The CDC reviews and approves the release of material information to the public relating to the Group. These include but are not limited to the following: • information on major transactions or projects; • press releases on transactions or projects which are promotional in nature; and • annual reports and sustainability reports. The members of the CDC are: • Ms Teo La-Mei • Mr Pua Seck Guan (iii)The Executive Committee: The EC is established to assist the Board in approving key strategic decisions, ensuring that the Group achieves its desired performance objectives and enhances long-term shareholder value. The EC provides overall direction on the Group’s business plans and oversees the general management of the Group, and may: • review and recommend the Group’s corporate values, corporate strategy, corporate objectives and performance targets; • review and evaluate new business opportunities and recommend strategic business proposals, due consideration given for sustainability issues comprising material environment, social and governance factors, including climate change, to the Board for approval; • review, approve and recommend major transactions below S$30 million; • guide senior management on business, strategic and operational issues; and • perform such other duties as the Board may delegate from time to time. The members of the EC are: • Mr Kuok Khoon Hong (Chairman) • Mr Ron Sim • Mr Yang Huanan • Mr Pua Seck Guan PROCEDURES FOR DEVELOPING REMUNERATION POLICIES The Nominating and Remuneration Committee The NRC’s responsibilities include: • review and recommend the remuneration framework for the Board and KMP; • consider, review and approve and/or vary (if necessary) the entire specific remuneration package and service contract terms for each KMP, having regard to the executive remuneration policy within the Group; • consider and approve termination payments, retirement payments, gratuities, ex-gratia payments, severance payments and other similar payments to KMP; • review the on-going appropriateness and relevance of executive remuneration policy and other benefit programmes; • review and approve the design of incentive plans and determine each year whether awards will be made under each of these plans; • review and approve guidelines pertaining to variable bonus, annual increment, and incentive plans annually; and • review and approve each award as well as the total proposed awards under each plan in accordance with the rules governing each plan. The NRC recommends for the Board’s endorsement, a framework of remuneration which covers all aspects of remuneration, including but not limited to salaries, allowances, bonuses, benefits-in-kind and specific remuneration packages for the Executive Chairman and CEO, and KMP. Non-Executive Directors do not receive remuneration from the Company. The NRC aims to build a capable and committed management team through competitive compensation packages and progressive policies which are aligned with the longterm interests and risk policies of the Group, and which can attract, retain, and motivate a pool of talented employees to drive business growth and strategy, while creating long-term shareholder value. The NRC also reviews the Group’s potential obligations and liabilities arising from any termination of the employment contract of the Executive Chairman and CEO, and KMP. The NRC is of the view that the termination clauses are fair and reasonable as such contracts only contain the standard clause on notice period for termination with the appropriate period of notice, taking into account the seniority of the relevant employee. In the deliberation of remuneration matters, none of the NRC members is involved in deciding any remuneration, compensation, incentives, or any form of benefits to be granted to himself. In discharging its duties, the NRC may seek advice from HR and external consultants whenever necessary. Remuneration for the Executive Chairman and Chief Executive Officer and Key Management Personnel The Group advocates a remuneration system that is flexible and responsive to market conditions, as well as a remuneration framework that is based on the key principle of aligning compensation to business performance and strategic objectives. Such performance-centric remuneration is linked to the achievement of corporate and individual performance targets, both in terms of short and longterm quantifiable objectives, as well as to support the ongoing enhancement of shareholder value. The remuneration system also takes into account the value creation capability of the Executive Chairman and CEO, and KMP. The Board determines value creation to be the amount of value-add contributed by the individual, including but not limited to deal introduction to the Group, costsavings ideas and novel initiatives which have the potential of improving the performance of the Group. In designing the remuneration structure, the NRC seeks to ensure that the level and mix of remuneration is competitive and relevant in attracting, motivating and retaining employees. The NRC also ensures that the remuneration structure is aligned with the interests of the stakeholders and promotes long-term success and sustainable growth of the Group. The balance between fixed and variable compensation elements changes according to the individual employee’s performance, value creation, seniority and department, so as to incentivise employees into adopting appropriate risk behaviour and to remain focused on prudent risk management. The NRC considers the mix of fixed and variable compensation to be appropriate for the Group and for each individual role. The remuneration structure also takes into account the Group’s risk policies and risk tolerance limits, as well as the time horizon of risks, in order to build sustainable leadership and business in the long term. The NRC is satisfied that there are adequate risk mitigation features in the Group’s remuneration structure with prudent funding of annual cash compensation. The NRC is also of the view that the overall level of remuneration is not considered to be at a level which is likely to promote behaviour contrary to the Group’s risk profile. The NRC also has the discretion to claw back any incentives awarded earlier if an executive is subsequently found to be involved in misconduct or fraud resulting in financial loss to the Group. The NRC will continue to undertake periodic reviews of compensation-related risks. In determining the remuneration of KMP, the Group leverages external consultants’ data on pay benchmarks as guidance and compares itself against peer companies and comparably-sized local listed companies with which the Group competes for talent and capital. The NRC is of the view that the remuneration of KMP is competitive and fair, and they have met their respective performance targets. Level and Mix of Remuneration The remuneration mix for KMP comprises two key components: fixed and variable compensation. These components comprise various elements which ensure a close linkage between total compensation and the achievement of long-term business objectives, thereby driving sustainable performance for the Group. As part of the Group’s formal succession planning, HR assists in identifying the critical positions at the management level. The requirements of and gaps in these positions are determined before mapping succession to the pipeline of internal high-potential executive talents that have been identified. HR recognises the need to support identified talents within the Group’s international talent pipeline with developmental efforts to prepare them for designated roles with adequately designed and implemented career development plans. These plans include on-the-job assignments, job rotations, international assignments and assuming larger or different roles in the organisation. HR also reviews and surveys the practices of other corporations and harmonises best practices that are suited to the Group’s culture, structure and strategy. Fixed Compensation (i) Base Salary and Compulsory Employer Contribution Base salary is determined by benchmarking against similar and comparable industries, taking into account an individual’s responsibilities, competencies, performance, value creation, qualifications and experience. (ii)Market-Related Benefits The market-related benefits provided are comparable with local market practices. Variable Compensation The variable compensation is designed to support the Group’s business strategy and the ongoing creation of shareholder value through the delivery of annual financial and operational objectives. (i) Annual Performance Incentive This is a short-term incentive that is linked to the achievement of pre-agreed financial and non-financial performance targets for the Group and KMP. Groupwide performance targets are dependent on factors such as business performance, profitability, and operational growth. Individual performance targets are set at the beginning of each financial year and are aligned to the overall strategic, financial and operational goals of the Group. This encourages day-to-day behaviour and actions that are aligned towards the creation of value for shareholders and stakeholders. In determining the cash payout quantum for KMP, the NRC takes into account overall business performance and individual performance, amongst other considerations. (ii)Long-Term Incentive Plan This is a long-term incentive plan introduced in 2021 which is designed to motivate, reward and retain high performing KMP by incentivising the long-term commitment of such employees. The NRC takes into account business performance and individual performance to determine the eligibility and the quantum payable. NON-EXECUTIVE DIRECTORS Except for the Executive Chairman and CEO, all other Directors are Non-Executive Directors. With their experience and expertise in their respective fields, they provide valuable advice and guidance to the Board. In addition, they also provide an independent check on Management. The Executive Chairman and CEO works together with the Non-Executive Directors to build a sustainable business and the long-term success of the Company. EXECUTIVE CHAIRMAN AND CEO The Executive Chairman and CEO is responsible for providing the Group with strong leadership and leading the Board in discharging its duties effectively. He also ensures the effective functioning
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