GINV.L Regulatory News (GINV)

6 May 2020

Global Invacom Group Limited

("Global Invacom", the "Company" or the "Group")

Response to Queries from SGX-ST

Regarding 2019 Annual Report and Accounts

The Board of Directors (the "Board") of the Global Invacom would like to offer its response to the following queries raised by the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 4 May 2020 and to provide additional information in relation to the Company's annual report ("Annual Report") for the financial year ended 31 December 2019 ("FY2019").

SGX-ST's Queries:

Listing Rule 710 requires issuers to explicitly state, when deviating from the provisions prescribed in the Code of Corporate Governance 2018 (the "Code"), an explanation on how the practices it had adopted are consistent with the intent of the relevant principle. In this regard:

Query (i)

(i) Provision 3.1 of the Code states that:

"The Chairman and Chief Executive Officer ("CEO") are separate persons to ensure an appropriate balance of power, increased accountability, and greater capacity of the Board for independent decision-making."

We note that the Company has not complied with Provision 3.1 of the Code as the Company's Chairman and CEO position is filled by the same person.

Where the Company's practices deviate from the provisions of the Code, please explicitly state the provision from which it has deviated from and explain how the practices it had adopted are consistent with the intent of Principle 3 of the Code, which requires a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision making.

Company's response to Query (i):

The Company believes that combining the roles of Chairman and CEO, under an executive who is knowledgeable in the business of the Group, provides the Group with strong and consistent leadership and allows for more effective planning and execution of long-term business strategies. Mr Taylor's dual role as Executive Chairman and CEO enables the Group to conduct its business efficiently and ensures that its decision-making process is not be unnecessarily hindered.

The Board currently consists of seven Directors, of whom three are Independent Directors, with one Non-Independent, Non-Executive Director. There are currently four Non-Executive Directors on the Board. The Board believes that there are adequate safeguards and checks in place to ensure that the process of decision making by the Board is independent, objective and based on collective decision making without Mr Taylor exercising any undue influence on any decision made by the Board.

The Nominating Committee from time to time, reviews the need to separate the roles of Chairman and CEO and will make its recommendations, as appropriate and needed.

In addition, Mr John Lim Yew Kong, who is the Lead Independent Director of the Company, would address the concerns, if any, of the Company's shareholders on issues that cannot be appropriately dealt with by the Executive Chairman. Where appropriate and necessary, the Independent Directors would meet without the presence of the other Directors, for the Lead Independent Director to provide any feedback to the Chairman.

As such, the Company is of the view that the intent of Principle 3 of the Code is met as no one individual of the Board has unfettered powers of decision making.

Query (ii)

(ii) Provision 8.1 of the Code states that:

"The company discloses in its annual report the policy and criteria for setting remuneration, as well as names, amounts and breakdown of remuneration of:

(a) each individual director and the CEO; and

(b) at least the top five key management personnel (who are not directors or the CEO) in bands no wider than S$250,000 and in aggregate the total remuneration paid to these key management personnel."

We note the Company's disclosure on remuneration at pages 31 and 32 of the annual report for FY2019. Where the Company's practices deviate from the provisions of the Code, please explicitly state the provision from which it has deviated from and explain how the practices it had adopted are consistent with the intent of Principle 8 of the Code, which requires transparency on the Company's remuneration policies, level and mix of remuneration, the procedure for setting remuneration and the relationships between remuneration, performance and value creation.

Company's response to Query (ii):

On page 31 of the Annual Report, the Company discloses the names, amounts and breakdown of remuneration of the Executive Directors, CEO and key management personnel in bands of S$250,000. The variation from Provision 8.1 of the Code of not disclosing the exact remuneration amount of the Executive Directors is in view of the niche market in which Global Invacom operates. The Group believes that the exact disclosure of remuneration of Executive Directors who hold knowledge particular of this market and of the Group would significantly increase the risk of employment offers from the Group's competitors and therefore may seriously affect its competitive edge as well as the proprietary knowledge held within the Group.

The Company has on page 31 of the Annual Report FY2019, under the header "Level and Mix of Remuneration", disclosed the remuneration policy for Executive Directors and key management personnel which comprises a fixed and a variable component. The fixed component is in the form of a base salary. The variable component is in the form of a cash bonus scheme that is results-based with a trigger set around three key targets, two of which were financial, based on revenue and profit before tax, and one based on new product introduction.

The Company has also disclosed on page 31 of the Annual Report FY2019 that the Group's long-term incentive schemes to be granted are based on participants achieving pre-set operating unit financial goals, individual performance, as well as achieving corporate financial goals. The important terms of the Group's long-term incentive schemes, Global Invacom Share Option Scheme 2013 and Global Invacom Performance Share Plan 2013 are disclosed in Notes 4 and 5 of the Directors' Statement as set out in the Annual Report.

The Company believes that the information disclosed provides investors with insights as to the remuneration policies, procedure of setting remuneration and the relationships between remuneration, performance and value creation, and that the intent of Principle 8 of the Code is met. The remuneration policy, relationships between remuneration, performance and value creation and procedure for setting remuneration applicable to the Executive Directors are sufficiently described above and the level and mix of remuneration is disclosed on pages 31 and 32 of the Annual Report FY2019.

BY ORDER OF THE BOARD

Anthony Brian Taylor

Executive Chairman

6 May 2020

For further information, please contact:

About Global Invacom Group Limited

Global Invacom is a fully integrated satellite equipment provider with six manufacturing plants across China, Israel, Malaysia, UK and the US. Its customers include satellite broadcasters such as BSkyB of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks.

Global Invacom provides a full range of antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in military, medical, and consumer electronics industries. Following the acquisition in 2015 of Global Skyware, a leading US‐based designer and supplier of satellite antennas products and services, the Company became the world's only full‐service outdoor unit supplier.

Global Invacom is listed on the Mainboard of the Singapore Exchange Securities Trading Limited and its shares are admitted to trading on the AIM Market of the London Stock Exchange.

For more information, please refer to www.globalinvacom.com