Corporate
Governance Report

The Board of Directors is accountable to the shareholders as fiduciaries and oversees the management of the business and affairs of the Group and the Company. Key roles of the Board include providing entrepreneurial leadership, approving the Group’s and the Company’s objectives and strategic directions; monitoring and reviewing the performance of the Group and the Company; approving annual budgets and investment proposals; monitoring the effectiveness of the Group’s and the Company’s risk management framework; reviewing management performance and appointing Directors.

To facilitate effective management, certain functions have been delegated to various Board Committees, namely the Nominating Committee, Remuneration Committee, Audit Committee and Risk Committee, each of which has its own written terms of reference. The Board members and Board Committee members are set out below:

Quarterly Board and Board Committee meetings are scheduled yearly in advance to facilitate attendance by all Directors. Additional meetings are scheduled in between to provide technical updates and to facilitate discussion or deliberations on strategic or compliance matters as required and where necessary. The non-executive Directors meet privately without the presence of management, typically at Board and Board Committee meetings. The independent Directors also meet without the presence of other Directors where circumstances warrant such discussions.

During the year, seven (7) Board meetings were held, in addition to the meetings by each of the Company’s Board Committees which are held no less than four (4) times a year. This included special board meetings which were called to ensure full discussion and deliberation of specific matters which arose in the course of the financial year, and a full-day off-site Board meeting dedicated to a focused discussion and review by Management and the Board on the Company’s strategic direction and plans.

To allow for participation by Directors who due to unforeseen circumstances are unable to attend in person, the Company’s Constitution provides for telephonic and videoconference meetings. The number of applicable Board meetings held in 2017 and the attendance of every Board member at those meetings applicable to them are as follows:

Material transactions that require Board approval are capital expenditure in excess of S$5 million and operating expenditure in excess of S$3 million. The Board also approves key matters such as the Company’s strategic direction, risk appetite, annual operating plan, financial statements, dividend payouts, material acquisitions and disposals, Board & Key Management succession plans (including remuneration matters) and employee long-term incentive schemes.

An internal policy on Directors’ conflict of interests further requires Directors to refrain from participation in board discussions and decision-making on a particular agenda when they have conflicts of interest. Each Director (including new incoming Directors) expressly acknowledges and signs off on the policy.

There are also policies in place to ensure compliance with legislative and regulatory requirements.

For newly-appointed Directors, the Company will send a formal letter of appointment to explain their duties and responsibilities as Directors. All newly-appointed Directors undergo a comprehensive orientation programme including management presentations on the businesses, strategic plans and objectives of the Group and the Company, and site visits to the Company’s call, data and network operating centres.

All current Directors have prior experience as a director on a listed company, or experience in other major companies and/or from their professional engagements, which equips them to meet the demands of their roles on the board of a listed company.

Directors are provided with continuing education or briefings and updated on relevant developments such as changes in financial reporting standards and developments which have direct impact on financial statements, corporate governance, changes in laws and regulations, risks identification, as well as industry trends and updates. During the year, external consultants were invited to the Company’s Board meetings to brief and share insights with Directors in areas such as corporate governance, cyber awareness and technology risks. In addition, Directors are invited from time to time to attend professional programs for Directors conducted by the Singapore Institute of Directors, and other relevant bodies.

Taking into account a retirement at the coming AGM¹, the Board comprises ten Directors, all of whom are non-executive except for the Chief Executive Officer (CEO), and six of whom are independent. The independent Directors make up 60% of the Board, as identified in Section 1 above. The Board does not have any alternate Directors.

The Nominating Committee conducted its annual review of the independence of each of the Directors as at 31 December 2017, taking guidance from the CG Code, and was satisfied that the Board is in compliance with the CG Code. This process included a review of each Director’s and his/her immediate family members’ interests in and business relationships (if any) with the Company and/or Group, and declarations of independence in the form of a questionnaire.

As at the date of this report, two of the independent Directors would have served more than 9 years since their appointment. The Board has taken steps to renew and refresh the Board, including the appointment of one new independent Director who overlaps with the current independent Director in transition, while the search is ongoing for the other renewal.

Having taken into account inter alia the scope and nature of the operations of the Company, the Board considers its current Board size optimal and of a scale which facilitates effective decision-making.

The Board comprises respected individuals from different backgrounds, genders and whose core competencies, qualifications, skills and experience are extensive, diverse yet complementary. 20% of the Board comprises female Directors with complementary skill sets, a proportion that compares favourably with the average among companies listed in Singapore. Details of how the Nominating Committee considers and assesses suitable Director candidates, and the steps taken by the Board to achieve the balance and diversity necessary to maximise its effectiveness are set out under Guidelines 4.6 & 4.7 below (Process for selection, appointment and re-appointment of Directors and nomination process).

Further details of the Directors’ academic and professional qualifications and other appointments are set out under the “Profile of Directors” and “Particulars on Directors” sections of the Annual Report.

Non-executive Directors constructively challenge and help develop and fine tune proposals on strategy, as well as review the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance. Where appropriate, Management is excused from meetings involving the non-executive Directors to facilitate open and frank discussions in the interests of the Company.

Mr Danny Teoh Leong Kay is the current non-executive Chairman of the Company and Ms Karen Kooi Lee Wah is the CEO. Each performs separate functions to ensure that there is an appropriate balance of authority and responsibilities, and that accountability and independent decision-making are not compromised. The Chairman and the CEO are not related.

The Chairman leads the Board and is instrumental in ensuring board effectiveness and its governance processes. Under his leadership, he promotes a culture of openness and debate among the Board and encourages constructive relations within the Board and between the Board and Management. The Chairman guides a clear strategic direction for the Company, whilst respecting the executive responsibility of the CEO and engages with members of senior management regularly to develop a keen understanding of the Group’s business and the various external factors that impact the Group’s business and its growth.

The Board has not appointed a lead independent Director as the roles of the Chairman and the CEO are distinctly separate. The Chairman is not part of the executive management; the Board has a strong element of independence with six out of ten Directors being independent; and Board discussions are open and frank. The Board will review the need for a lead independent Director as part of its continuous assessment of best practices in corporate governance.

During the year, the independent Directors unanimously appointed a lead independent director to guide and represent the view of the independent Directors on a specific matter impacting the interests of the Company and its minority shareholders.

The NC comprises four members, three of whom are independent, including its Chairman. The NC members are Mr Chow Kok Kee, Mr Huang Cheng Eng, Ms Elaine Lee Kia Jong and Mr Danny Teoh Leong Kay.

The number of applicable NC meetings held in 2017 and the attendance of each member at those meetings are as follows:

The NC, which has written terms of reference approved by the Board, performs the following functions taking into account the relevant principles in the CG Code and other salient factors:

As part of the process for the re-appointment of Directors, at least one-third of the Directors are required to retire by rotation (based on who have been longest in office since their last re-election or appointment) at the Annual General Meeting (AGM) each year. These Directors may, if eligible, offer themselves for re-election. Consequently, all Directors, including the CEO are required to stand for re-election at least once every 3 years. The dates of initial appointment and last re-election or re-appointment of the Directors are set out below:

The NC determines on an annual basis the independence of a Director taking guidance from the CG Code on the definition of an “independent” Director and existence of relevant relationships or circumstances. The NC reviewed the independence of the Directors and arrived at its conclusions regarding each Director as set out in Section 1. The independent Directors are independent from the major shareholders.

The Board accepted, as a guide, the NC’s recommendation that a Director of the Company should not have more than six listed company board representations and other principal commitments, taking into consideration the definition of “principal commitments” in the CG Code. After considering the competing time commitments faced by Directors who serve on multiple boards and who have other principal commitments, the Board, in concurrence with the NC, determined that in fact, all the Directors have less than six listed company board representations and other principal commitments, and that the Directors were able to and have been adequately carrying out their respective duties and responsibilities as Directors of the Company.

The Board does not have any alternate Directors.

Due diligence is conducted on potential candidates. Upon shortlisting, the NC, in consultation with the Board Chairman, evaluates and interviews candidates to assess their suitability and whether the candidates understand the roles and responsibilities involved in their appointments. The NC thereafter makes the final recommendation to the Board with details of the candidate’s resume and due diligence results.

Key information regarding the Company’s Directors and pertinent details in respect of Directors submitted for re-appointment are set out in the Notice of AGM with the relevant resolution and the Annual Report, for shareholders to make an informed decision.

During the year, the NC supervised an exercise to evaluate the Board’s, the Board Committees’ and individual Director’s performance. The objective of the exercise was to identify and prioritise areas for continuous improvement to the Board’s effectiveness.

For the purpose of the evaluation exercise, an independent consultant was appointed to conduct the evaluation process. The evaluation of the Board as a whole (including Board Committees) and evaluation of individual Directors were based on the framework established and used in the previous years and as updated by the NC. The consultant provided summarised findings, interpretation of findings and preliminary recommendations for the Board’s consideration. In addition, the Company also appointed an independent advisor to provide valuable insight to the Chairman and the Board on the results of the evaluation. The NC, in consultation with the Board, assessed the independence of both the consultant and the advisor. The consultant and the advisor do not have any other direct connection with the Company or any of its Directors.

All Directors assessed the Board as a whole on each of the following parameters:

These parameters are pre-approved by the Board. They allow for comparison with industry peers and seek to address how the Board has enhanced long-term shareholder value. The parameters are used consistently from year to year to allow for comparison, and reviewed yearly to ensure the Board assessment takes into account relevant developments including those in the Company and in the industry.

In addition, the contribution of each individual Director to the effectiveness of the Board was assessed by his/her peers on the Board. The evaluation was based on the following five parameters:

The Board expects to carry out evaluation of the Board as a whole (including Board Committees) and self-evaluation exercises annually to identify areas of improvement and as a form of good Board management practice. Following each evaluation, the Chairman works closely with the NC in considering whether any actions are needed to improve Board effectiveness.

To enable the Board to fulfil its responsibilities, Directors are provided with timely information prior to board meetings and on an ongoing basis. These include monthly management financial statements setting out actual against budget, as well as previous year’s comparatives and explanations on any material variances. In addition, management provides the Board with financial and operating reports reviewing performance in the most recent quarter, and relevant background or explanatory information required to support the decision-making process on a regular and timely basis. Directors and senior management can securely access and read Board and Board Committee papers prior to and at meetings via tablet devices. The Board has separate and independent access to Management.

All Directors have separate and independent access to senior management, and to the Company Secretary whose appointment and removal are decided by the Board. The Company Secretary administers, attends and prepares minutes of Board and Board Committee meetings, and assists the Chairman in ensuring that Board procedures are followed and reviewed so that the Board functions effectively, and the Company’s Constitution and relevant rules and regulations, including requirements of the Companies Act, the Securities and Futures Act and SGX-ST, are complied with. The Company Secretary also acts as the primary channel of communication between the Company and the SGX-ST.

Should Directors, whether as a group or individually, need independent professional advice in the furtherance of their duties; the cost of such professional advice is borne by the Company.

The RC comprises Mr Moses Lee Kim Poo as Chairman, Mr Danny Teoh Leong Kay, Mr Low Huan Ping, Mr Chow Kok Kee, Mr Alan Ow Soon Sian and Mr Tan Wah Yeow, all of whom are non-executive Directors. Mr Moses Lee Kim Poo, Mr Chow Kok Kee, Mr Alan Ow Soon Sian and Mr Tan Wah Yeow are the independent Directors on the RC.

The RC, which has written terms of reference approved by the Board, performs the following functions taking into account the relevant principles in the CG Code and other salient factors:

The number of applicable RC meetings held in 2017 and the attendance of each member at those meetings are as follows:

The Director of Human Resource assists the RC in the execution of its functions, utilising established and relevant remuneration consultancy surveys and market information where applicable. The RC has access to external expert advice, if required.

The Company sets remuneration packages to ensure that they are competitive and sufficient to attract, retain and motivate Directors and senior management of the required experience and expertise to run the Group successfully. Remuneration packages include Directors’ fees, salaries, allowances, bonuses, grant of shares, and benefits-in-kind.

In setting remuneration packages for Directors and officers of the Group, the pay and employment conditions within the industry and in comparable companies are taken into consideration.

Directors’ fees are subject to shareholders’ approval at the AGM. Each non-executive Director is paid a fixed fee, the amount of which takes into account the level of responsibilities held.

In light of the challenging operating environment, the Board of Directors collectively volunteered for a reduction in fees, to show solidarity as a Group to manage cost and to meet the challenges ahead.

The framework for determining fees payable to each non-executive Director for 2017 is as follows:

The RC also approves the remuneration of the senior management on an annual basis. In determining the remuneration packages of the CEO and senior management, performance-related elements, including financial indicators, are incorporated in order to align interests with those of shareholders and link rewards to corporate and individual performance. In determining the actual quantum of variable component of remuneration, the RC had taken into account the extent to which the performance conditions have been met. The RC is therefore of the view that remuneration is aligned to performance in 2017.

The Company has contractual provisions in place allowing it to reclaim incentive components of remuneration from key management personnel in exceptional circumstances of misconduct resulting in financial loss to the Company.

The annual remuneration of non-executive Directors payable for 2017 is as follows:

For each non-independent non-executive Director, fees are paid in accordance with the instructions of the relevant shareholder nominating him.

In view of the increased competitive pressures for talent within the industry, the remuneration paid to the CEO and the top five key management personnel are disclosed in bands. In 2017, the level and mix of the annual remuneration of the CEO and Executive Director, and each of the top five members of senior management (who are not also Directors), in bands of S$250,000, are set out below:

The Company does not have any employee who is an immediate family member of a Director or the CEO in 2017.

The Board provides a balanced and clear assessment of the Company’s performance, position and prospects to its shareholders in a timely manner.

To enable the Board to fulfil its responsibilities, Directors are provided with monthly management financial statements setting out actual against budget, as well as previous year’s comparatives and explanations on any material variances. In addition, management provides the Board with financial and operating reports reviewing performance in the most recent quarter, and relevant background or explanatory information required to support the decision-making process on a regular and timely basis.

The Company’s quarterly results are released to shareholders after close of trading hours immediately after each of the Company’s quarterly board meetings. In addition to the detailed financial results, presentation slides setting out the key financial information in a concise and reader-friendly manner are also made available to shareholders.

Where there is any other material information in the course of the financial year, these are also promptly made known to shareholders through the SGXNet.

Written policies and undertakings to ensure compliance with legislative and regulatory requirements, including the securities exchange listing rules have been established, and include :

The Company is committed to continually improve its approach to maintaining a sound system of risk management in order to ensure that it has a strong, integrated risk and compliance culture.

The Board, assisted by the Risk Committee, has general oversight of the Company’s risk management system and mitigation strategies. This includes review of the Company’s portfolio of risks and assessing the appropriateness of management’s response to risk exposures. A senior management executive team is responsible for driving the risk management processes and ensuring compliance throughout the Company. Risk accountability is clearly assigned across all departments and functional units.

Details with regard to the Risk Committee can be found at Section 11.4 of this Corporate Governance report.

The internal controls, including financial, operational, compliance and information technology controls, and risk management systems are continually reviewed by the Board to improve consistency and effectiveness of risk identification and assessment across the Company.

As part of the Company’s ongoing efforts to ensure its internal control and risk management systems are adequate and effective, the Company also has in place policies such as the Information Security Policy and the Personal Data Protection Policy to ensure employees are properly guided on best practices and their legal obligations in these risk areas.

Risk training programmes are also conducted on an ongoing basis to inculcate and reinforce a proactive risk management culture within the Company. These include conduct of exercises to enhance knowledge of response plans and procedures and improve coordination, so as to prepare the teams to respond effectively in the event of any service incidents. Regular and mandatory online e-training programs in the areas of cybersecurity and personal data protection were also conducted throughout the year. Employees were assessed on their awareness and response in these areas, and follow-up steps taken where gaps were identified. Separately, in recognition of the Company’s capabilities and efforts in promotion of safety and health standards at the workplace, the Company also attained bizSAFE certification.

During the year, the Company further strengthened operational risk mitigation mechanisms in various areas including cybersecurity and network infrastructure resiliency.

Quarterly updates on the Company’s overall risk profile, emerging risks, regulatory updates and cybersecurity matters are provided by Management to the Board. In addition, major incidents (together with root cause analysis and mitigation measures) are also reported to the Board.

Overall, the Board considers that the Company, in its risk management system, adopts a prudent and proactive approach to achieve an optimal balance between risks and returns, mitigating key risks and maximising opportunities, thereby enhancing the Company’s decision-making capabilities and organisational resilience.

Based on the work performed by the internal and external auditors, and the reviews performed by management, the Board, with the concurrence of the Audit Committee, is of the opinion that, as at the date of this report, the Group’s and the Company’s internal controls are adequate to address the above-mentioned risks of the Group and the Company in its current business environment.

In arriving at this view, the Board had considered inter alia the following, the risk management evaluation, internal controls implementation, internal auditors’ reports, and audits undertaken by the external auditors.

The system of internal controls provides reasonable, but not absolute, assurance that the Group and the Company will not be adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives.

However, the Board notes that no system of internal controls could provide absolute assurance in this regard, or absolute assurance against the occurrence of material errors, poor judgement in decision-making, human errors, losses, fraud or other irregularities.

The Board receives assurance from the CEO and Chief Financial Officer during the meetings of the Board, Audit and Risk Committees:

The Risk Committee was established by the Board on 16 July 2012 to assist the Board in discharging its duties to shareholders on risk management, and to help improve Board monitoring of the risk management system, framework and processes of the Group and the Company. The Risk Committee comprises Mr Low Huan Ping as Chairman, Mr Alan Ow Soon Sian, Mr Huang Cheng Eng, Mr Lionel Lim Chin Teck and Mr Tan Wah Yeow as members, all of whom are non-executive Directors and four of whom are independent Directors.

The Risk Committee, which has written terms of reference approved by the Board, performs the following functions taking into account the principles set out in the Code and other salient factors:

The number of Risk Committee meetings held in 2017 and the attendance of each member at those meetings are as follows:

The AC comprises Mr Alan Ow Soon Sian as Chairman, Mr Chow Kok Kee, Ms Elaine Lee Kia Jong and Mr Tan Wah Yeow as members, all of whom, including the Chairman, are non-executive independent Directors. Three of the members, including the Chairman, have accounting, tax or related financial management expertise or experience.

The AC, which has written terms of reference approved by the Board, performs the following functions taking into account the relevant principles set out in the CG Code and other salient factors:

The number of applicable AC meetings held in 2017 and the attendance of each member at those meetings were as follows:

The AC considered the volume of non-audit services provided by the external auditor to the Group and the Company, and being satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditor, confirmed their renomination. The aggregate amount of fees paid to the external auditor in 2017 and a breakdown of the fees paid in respect of audit and non-audit services is stated in the notes to the financial statements.

In the appointment of Ernst & Young LLP (an audit firm registered with the Accounting & Corporate Regulatory Authority) as Auditor for the Company and its subsidiaries, the Group and the Company have complied with Rules 712 and 715 of the Listing Manual.

The Group and the Company subscribe to a high standard of corporate governance, with a “zero tolerance” policy on fraud, corruption and other forms of unethical behaviour or conduct.

The Group and the Company has in place policies and processes that manage risk, deter fraud and ensure accountability and integrity. Employees are encouraged to report suspicious or irregular behaviour they encounter in the course of work. The Group and the Company will keep confidential the identity of any whistle-blower. The Company does not disregard anonymous complaints, but gives them due regard.

Acts that violate the M1 Policy for Disclosure of Reportable Conduct include:

The Group and the Company will investigate allegations raised, and firm action will be taken to deal with corrupt behaviour or illegal acts. Significant cases will be escalated to members of senior management and the Board of Directors, and/or referred to the appropriate authorities, such as the Singapore Police Force, Commercial Affairs Department or Corrupt Practices Investigation Bureau.

Individuals who make a report under this Policy will be protected from reprisal if he/she:

If there are any attempts at reprisal against the whistle-blower, he/she will be given the opportunity to bring the matter to the attention of the appropriate level of senior management and/or the Audit Committee Chairman.

The AC reviewed the financial statements of the Group and the Company before submitting them to the Board for its approval and the announcement of the financial results. The AC also reviewed and monitored the Group’s and the Company’s financial condition, internal and external audits, and the effectiveness of the Group’s and the Company’s system of accounting and internal controls. The following key audit matters were discussed between external auditors and management, and reviewed by the AC:

None of the AC members were formerly partners or directors of the Company’s external auditors.

The Group and the Company has an in-house internal audit function that is independent of the activities it audits. The head of internal audit reports functionally to the AC Chairman and administratively to the CEO. The hiring, removal and evaluation of the head of internal audit is approved by the AC. Guided by the Internal Audit Charter approved by the AC, the function provides independent, objective assurance and advisory services designed to add value to the organisation’s internal controls.

During the year, activities performed by the internal audit function include evaluations of internal control and risk management, as well as compliance with applicable regulations and adherence to established policies. An annual work plan, approved by the AC, is formulated to guide the year’s assurance and advisory activities. Audit projects are prioritised based on a risk and control assessment framework with the priority given to higher risk areas which are reviewed half-yearly.

Reports of completed audit projects are submitted to the AC for deliberation with copies extended to the CEO and relevant senior management officers. Key observations and recommendations are discussed during AC meetings. Implementation of audit recommendations is tracked and reviewed to ensure proper closure. The AC is furnished with a summary of implementation status every quarter.

The internal audit function has access to the AC and to the relevant documents, records, properties and personnel of the Group and the Company. The internal audit methodologies are aligned to the standards of internationally recognised professional bodies including The Institute of Internal Auditors.

The AC annually reviews the adequacy and effectiveness of the internal audit function to ensure that the function has appropriate standing within the organisation and is resourced with qualified professional staff.

Communication with shareholders and the investment community forms an integral part of the Group’s and the Company’s corporate governance and commitment to transparent, comprehensive and prompt disclosure. Various communication channels are used to inform shareholders about the performance of the Group and the Company and to provide updates on pertinent developments. These include annual reports, quarterly results and other announcements made through the SGXNet, press releases and the Company’s website, as well as through the AGM.

Presentations given at appropriate intervals to representatives of the investment community, audio webcasts and call transcripts of quarterly results presentations, including question and answer sessions, are made available and updated regularly on a dedicated Investor Relations link (https://www.m1.com.sg/aboutm1/investors) of the Company’s corporate website. Up-to-date information such as the Investor Relations contact, the Company’s vision and mission statements and the Group structure, can also be found on the Company’s corporate website. Other useful information, such as the Company’s Annual reports (since 2003 to date), its Corporate Governance Report and Supplier Code of Conduct are also readily accessible by shareholders from the Company’s corporate website and/or our Annual Report.

In 2017, the Group and the Company continued to release its quarterly and full year results within one month from the end of the relevant financial period, in the form of a press release, financial statements containing management’s discussion and analysis of performance and outlook, and a presentation containing highlights and a review of financial and operating performance. Conference calls with media and analysts were held jointly immediately after the release of results. Audio webcasts of these events were made available on the Company’s website. Information on major new initiatives by the Group and the Company was also made public as soon as feasible.

The Company participated in several investor conferences and roadshows during the year, and discussions were based on publicly-available materials and information. The Company does not practise selective disclosure, and is mindful of the remedial action required to make public disclosure as soon as practicable, should there be an event of inadvertent disclosure.

The Group and the Company view the AGM as an important platform for shareholders to engage in interactive and open dialogue with the Board and senior management. The last AGM, held on 12 April 2017, was well attended by Board members including the Chairman, CEO, and senior management. The respective Chairmen of the Audit, Nominating, Risk and Remuneration Committees, and the external auditors were also all present. The Annual Report and Notice of AGM were sent to all shareholders three weeks prior to the last AGM, to give shareholders sufficient time to review the information. During the AGM, shareholders had the opportunity to voice their views and direct questions regarding the Group and the Company to Directors, including the Chairman and the chairmen of the Board Committees, as well as to the Company’s senior management.

The Company appointed an independent party to count and validate the votes, and disclosed the voting and vote tabulation procedures used before the AGM proceeded. There are provisions in the Company’s Constitution which allow for absentia voting, and shareholders who hold shares through nominees are allowed to appoint more than two proxies or to attend the AGM as observers. All resolutions were put to vote by electronic polling at the last AGM, and announcements of the detailed results showing the number of votes for and against each separate resolution for each substantial issue and the respective percentages were also made at that AGM and announced via the SGXNet on the same day. Minutes of the AGM that include substantial and relevant comments and queries from shareholders relating to the agenda of the meeting, responses from the Board and senior management, and the attendance of the Board members and senior management, was promptly prepared by the Company post-AGM and made available to shareholders upon request.

The Group and the Company managed ongoing communication with the investment community throughout the year and responded diligently and promptly to all enquiries from shareholders, analysts and other interested parties, through a dedicated Investor Relations team. All enquires are responded to within two working days.

M1 is committed to creating long-term value for shareholders. This is exhibited through our long-standing policy of maintaining a sustainable dividend payout ratio and returning excess cash to shareholders in the absence of value-enhancing opportunities. Dividend payments have been timely and were made to shareholders within 30 days after the declaration of interim dividends and/or shareholders’ approval of final dividends in 2017. Barring unforeseen circumstances, we propose to maintain a dividend payout ratio of 80% of net profit after tax for 2018.

The Group and the Company have issued a Code for Dealings in M1 Shares (M1 Code) for the guidance of Directors, management and other officers. The M1 Code, which is based on the SGX-ST Listing Rule 1207(19) with respect to dealings in securities, stipulates that Directors, management and other officers of the Group and the Company who have access to price-sensitive and confidential information are not permitted to deal in the Company’s shares during the periods commencing two weeks before the announcement of the Group’s and the Company’s first, second and third quarter results and one month before the announcement of the Group’s and the Company’s full year results and ending on the date of the announcement of such results; and when they are in possession of price-sensitive and confidential information, in accordance with the laws of insider trading.

The M1 Code also includes the prohibition that an officer should not deal in the Company’s shares on short-term considerations. The M1 Code is incorporated as part of the Group’s and the Company’s Human Resource Manual and is available on the Intranet accessible by all staff. A reminder is also circulated to Directors, management and other officers every quarter before the commencement of the period during which dealings in shares are prohibited and to those with access to price-sensitive and confidential information.

The Group and the Company have a Code of Conduct which all employees are required to adhere to. The key tenets of this Code, which is available on the Company’s Intranet, include the following:

The Group and the Company purchase the following key products and systems from time to time, to support its business operations:

The Group’s and the Company’s procurement function adheres to a transparent procurement process, and suppliers are selected based on merit or criteria such as vendor experience and track record, ability to meet the required specifications, price competitiveness, and level of after-sales support.

To further enhance ethical practices on the part of the Group’s and the Company’s suppliers, the M1 Supplier Code of Conduct was introduced in January 2015. This Code sets out the Group’s and the Company’s expectations of its suppliers, including their compliance with all applicable laws, prohibition on illegal or unethical behaviour such as bribery and corruption, and protection of customer data.

For financial details of the Group’s and the Company’s procurement, please refer to the Financial Statements of this Annual Report, under Fixed assets and Inventories.

Management identifies and discloses the IPTs entered into by the Company and the Group on a monthly basis. On a quarterly basis, Internal Audit independently reviews the IPT balances. The review ensures the accuracy and completeness of the IPT disclosures and determines whether the IPT reporting requirements under the Listing Manual rules have been adhered to. The review is submitted to the Audit Committee.

Interested person transactions carried out during the financial year ended 31 December 2017 by the Group and the Company were as follows: