HRnetGroup 2023 AGM

Hi everyone, I'm Rachel, Business Leader of RecruitFirst Singapore. I've been in this industry for over 10 years and I deliver a hands-on and diverse recruitment experience to my clients. I'm currently leading teams in the financial services, insurance, and consumer healthcare industry. My teams are equipped with knowledge and insights about the local talent landscapes for both the executive workforce and flexible staffing. We recruit for functions such as HR, finance, technology, supply chain, sales and BD, operations, marketing, front, middle, back office roles, and have managed nationwide recruitment projects involving deployment of over 800 manpower. So get in touch with me for a chat. My team and I are looking forward to creating the best talent solutions for you and your organization.

Hello, I'm Kelly, headhunter at RecruitFirst Indonesia. I work with many different industries, such as software development, programming engineer, sales director, national sales manager, then I work with the industries such as technology, construction and engineering, manufacturing, then pharmacy.

Hi, my name is Zoe, and I'm the General Manager of OctoMate. OctoMate is a powerful cloud-based one-stop workforce management solution that helps you to manage your employees' workflow from anywhere and anytime. We currently serve clients across various industries in Singapore, Japan, Indonesia, Thailand, Malaysia, Taiwan, as well as other countries. If you are looking for a one-stop HR management solution or an instant pay solution to give your employees early wage access, feel free to contact me and I will be more than happy to give you a demo.

Hello, I'm Olivia. I'm a headhunter from HRNet Greenwood. I specialize in IT recruitment. So as a recruitment consultant, I have experiences in managing the whole cycle of recruitment process. On the top of that, I also do business development and also client management. As a recruitment consultant, we have experiences in finding top-notch candidates for our clients. Even before our clients' companies went public. So some of the roles I've been assigned to are such as IT function executive, CTO, head of engineering, engineer manager, data roles, product roles, software development roles, and many more. So if your company has hiring needs, please do not hesitate to contact me.

Thank you. Samazamonage wo kayokei kenishite, executive no saiyouni koukenishite marimashita. Soshite suhyaku no kaishikei, naishikei no kuraento e no kouken, sousei ni no katakatano jinsei no taishitsu na fushimete, kerya appu no testaitsu, kou nakikaimo itadai te marimashita.

Watashi wa konoshigotoni okinari ga arigaito, hokuryou kanji te imasu.

Good morning, ladies and gentlemen. My name is Fazlin, and I'm the communications leader for HRNetGroup. Welcome to our virtual AGM. We're happy to have the opportunity to speak to you today, and we're so thankful that you've made some time to to join us this morning. So to start with, we'll play for you a video that we prepared to give you a quick introduction to HRNetGroup.

Hey there, we've got a great CV for you to check out, and it's from HRNetGroup. Our story began in Singapore in 1992, where our founders started with a guiding principle: to make the lives of those who cross our path better. Today, with that cornerstone in place, we are far bigger, faster, and stronger. With over 1,200 consultants in 15 cities across the region. Singapore, Kuala Lumpur, Bangkok, Jakarta, Hong Kong, Taipei, Kaohsiung, Shenzhen, Guangzhou, Chengdu, Suzhou, Shanghai, Beijing, Seoul, and Tokyo. Our twin engines of growth are professional recruitment and flexible staffing. So be it executive search or temporary and contract placements, we find exceptional talents that will make a difference to our clients. Our professional recruitment brands are HRnetOne, People Search, People First, Search Asia, Recruit Legal, HRNet Rimbone, and Reforce. As for flexible staffing, our brands are Recruit Express, Recruit First, Centrepoint Personnel, and Recruit Fast. The other brands we have include our payroll services brand YesPay and a SaaS payment solution brand Octome. We are the first recruitment company to be listed on the main board of the Singapore Exchange, and we continue to move towards global expansion through ceaseless innovation and evolution. What we do is truly life-changing work that is made possible through the clients and candidates that have crossed our paths. So, are you ready to partner with us?

Okay, so we hope that video gave you some insights into our group. So to officially kick things off this morning, it is now my pleasure to invite the Chairman for today's meeting, Ms. Adeline Sim.

Thanks, Faz, and good morning, ladies and gentlemen. I'm Adeline, the Executive Director and Chief Corporate Officer of the company, and I've been invited by the Board of Directors to assist the Chairman, Mr. Peterson, to lead the proceedings of this Annual General Meeting. So on behalf of the Board of Directors, I welcome you to our 6th Annual General Meeting and thank you very much for taking the time to join us this morning. Shareholders who are attending this meeting virtually and whose identities have been verified by the Share Registrar of the company are hereby taken as electronically present at this meeting and for quorum purpose. As it is now 10:10 AM, I hereby declare the AGM open. All eligible shareholders and proxy holders have been granted the login access to participate in today's AGM. Voting is open from now until I announce to close the poll later. To vote, click on the Access Voting Card to cast your vote for each of the resolutions. You may change your vote at any time while the poll is open by simply selecting a new choice. There will be a green tick at the corner of your voting card to indicate that your vote has been successfully submitted and received. So let me now introduce you to the directors of the company who are participating in today's live webcast. To start off with, our founding chairman, Mr. Peterson.

Hello, I hope to see you in person next year.

Looking forward.

Thank you, Peter. Next, our Executive Director and CEO of the RecruitExpress Group of Companies, Mr. J.S. Sim.

Hello, good morning. Welcome to the AGM.

Thank you, J.S. Our Independent Director and Audit and Remuneration Committee Chairman, Mei Heng.

Hello, good morning.

Thanks, Mei. And our independent director, Mr. Wallace Gao, calling in from Beijing. Good morning, I'm Wallace Gao. Thank you, Wallace. Our independent director and nomination committee chairman, Mr. Pong Chen Yi. Hi, good morning. Thanks, Pong. And our independent director calling in from Tokyo, Mr. Hank Sato. Thanks, Hank. And our independent director calling in from the UK, where it's now 3:12 AM, we have Mr. Albert Ellis. Good morning, good morning. Thanks, Albert. Joining today's meeting as well are our group CFO, Ms. Jennifer Kang. Ciao, how are you? Our company secretary, Ms. Shirley Lim. Good morning, everyone. Representatives from the auditors, Mrs. Deloitte and Touche LLP. Our share registrar, Boardroom Corporate and Advisory Services.

Good morning.

As well as our scrutineer from Moore Stephens LLP. Alright, now that we know everybody who's here this morning, we are going to proceed to a short presentation, and I shall now invite our Group CFO, Ms. Jennifer Kan, to co-present with me the unique and extraordinary features as well as the financial highlights and outlook for HRNetGroup. Great, so I'm going to start off first by bringing everyone to the COVID of our annual report. And I think you will find that it's filled with people and depicts certain landmarks. And I can assure you it's an absolutely unique piece of art, if anyone's into NFTs. So what is it? It's basically a distillation on one page of all of HRNetGroup's major business and human capital developments in the year 2022. So if I start you from the left of the picture, The building you see there is 85 Sky Tower, which is the tallest structure in Kowloon, which became our 14th city of operations when our staffing brand RecruitFirst planted its flag there. The avatar you see in front of the building is that of Lee Zong, our co-owner for RecruitFirst Kowloon. Up front, you see a lady in purple. And that's Jace Lin Chua, our Group Business Leader for RecruitFirst Singapore, which has clinched a number of significant contracts over the past year, amongst which is a 2-year contract with Singapore General Hospital and a 4-year contract with the Ministry of Education. Jace Lin has also been promoted to Group MD. Seated on the bench next to her is Miranda Chin, our Group Business Leader of HR NetOne Taipei, who was promoted along with Gong Shizhan, our Group Business Leader for PeopleSearch Shanghai. And you see Gong next to Miranda. And when a new Group Business Leader is appointed, you can be sure the unit they are leading is flying high.

Yes, that's right. And over the past year, Ping Chen of PeopleSearch Taipei also rose to become Group Business Leader, along with Asako Yoshiie of HRNetOne Japan. Meanwhile, Ruby Lim of HRNet Rimbun in Jakarta made Senior Business Leader, and Angela Kwak of HRNetOne Korea joined the ranks of Business Leaders. Congratulations to you all!

We have more good news. Right in the middle of the artwork, you'll see a happy panda, and that's because in 2022 Chengdu became our 15th city of operations when WeForce started its practice there.

We also welcome 6 new co-owners: Francis Lee of HRNetOne Shenzhen, Kelvin Rimboon of RecruitFirst Indonesia, Li Mei Chin of People First Malaysia, Karen Koh of HRNetOne Hong Kong, Ping Chen, and Miranda Chin.

Our board has also undergone a major revamp over the past year and is greatly strengthened with the addition of Hank Sato in Japan, Wallace Gao in China, Albert Ellis in the United Kingdom, and corporate finance whiz Pong Chen Yi.

To complete the picture for 2022, there is Zoe Tong that you saw earlier on, an intern with us 9 years ago who proceeded to start up a HR management SaaS app with instant pay capabilities and who returned to HRNetGroup as a co-owner when we acquired 51% of Optimate.

We hope you enjoyed that pictorial update, which has given us a very meaningful annual report cover indeed. So where did 2022 bring us? In a snapshot, 13 brands, 33 business units, in 15 cities, generating $611 million in revenue, $174 million in gross profit, and $72 million in net profit. For those of you who have been with us since our listing in 2017, you will remember we did $46 million in net profit in 2017. We are now doing $72 million. And I would really like to thank all stakeholders, especially our co-owners, leaders, consultants, and business partners who have done an incredible job. It is your personal commitment every day to keep doing better, to give it the best you have got, which powers us collectively to create ever greater value. So can we please get some thumbs up, likes, or, you know, just unmute and applause for our 1,194 people led by our 37 business co-owners whose portraits you see here.

Our business co-owners have personally invested in the business units they operate, cultivating the people, the accounts, and developing the culture of performance permeating the group's entrepreneurial DNA. In return, they enjoy annual dividends of at least 50% of the profits generated, and their business units carry a valuation of their own.

I have more good news to share. If you look at the photo, um, of this, and these are Recruiter Express Master Recruiters. Every single one of them has clocked in in excess of half a million dollars of gross profit each, with 10 of them exceeding a million dollars each in gross profit. So that's the market recognizing the value of their work, and a very key competitive edge for us are amazing people.

The PHC, or Productive Hard Count concept, is core to our business culture. Every recruiter lives and breathes by a simple formula of delivering gross profit that is 3 times their payroll cost. And this is the key to profit-sharing incentives, promotions, every quantifiable aspect of rewards and recognitions. The higher the proportion of people that are PHC, the more productive and profitable the business is. The revenue split amongst key sectors is a dynamic one. During the pandemic, we had a high contribution of 26% from healthcare. Post-pandemic, the shift then went to IT and tech, financial services, and retail and consumer. There are evergreens that would always dominate the key sectors we serve in the respective cities. But above all, we count on our entrepreneurial people on the ground to smell new cheese and pivot towards growth spots and seize opportunities. Late last year, fintech fell out of favor, and now the switch is to retail and consumer, as the years of lockdown have resulted in pent-up savings waiting to be spent. Climate change brought about new energy storage possibilities. In China today, there's more EV brands than anywhere else. So the colors in the donut that you see here will keep shifting.

Like all businesses operating at scale in this age, the software and technology powering our work is an entire subject for discussion. Some notable developments in the past year, however, include incorporating Optimate's instant pay technology into our payroll processing capabilities so as to be able to offer contractors pay on demand. Moving up the value chain, we have also launched a job portal feature on our Ease app as we move closer towards our goal of meeting the talent acquisition and management needs of all organisations.

We will now give you colour on our financials and the outlook. Our progressive performance demonstrated stability and steady delivery of top and bottom lines even as many recruiters in the industry faced tremendous volatility and turbulence.

It's at times like the present that we are reminded of the importance of having an ample amount of cash combined with our business leader co-ownership model, which puts everyone working in the company on the same page with you who own it. So our resilient business model and strong financial structure provides a moat of protection circling the group.

Along with our rising profits, we rewarded shareholders with a progressive trend of attractive returns, with ROE at 19%, dividend payout of 55% NPAT, and dividend yield of 5.1%. In 2022, we paid out dividends totalling $61.5 million, and bought back $10.1 million worth of shares under the $30 million share buyback program. These avenues for shareholders to realize value at various points in time totaled $71.6 million, equivalent to 97% of our free cash flow for 2022. We now have a share buyback balance of $17.7 million, which assures investors of the company's belief in our value, and we stand ready to make further purchases.

We intend to increase liquidity in the market through the use of Treasury shares as consideration in acquisitions and investments, as well as through employee share plans and payments in lieu.

Investors often ask us about the drivers of our business. Flexible staffing is a volume game that can only be played with deep pockets to fund the contractors' payroll for at least 60 days before we are paid. It is recurring and it rides on the contingent workforce trend. In times of uncertainty, Companies tend to opt for this method of people deployment to manage the risk. Professional recruitment rides on positive macro environments and quality service. And when wages go up, it means higher billings for us. Barriers to entry are not so robust, but it is scale that is difficult to attain. You need systems, processes, and most importantly, discipline and quality.

So we thought we'll share some operating realities for our business. Number 1 would be, you would have met many companies who don't understand why they still have trouble hiring when it seems like people are being retrenched. And fresh grads are not immediately getting soaked up by the market. The reality is that you can have people, people everywhere, but the talents with attributes that are needed are hard to come by. So we are the talent experts who help our clients acquire what they need. As the recruitment industry evolves, all jurisdictions are tightening the rules to protect their citizens, and we welcome that. As the industry gets more regulated, quality improves. For HRNetGroup, we have the scale and the depth to not only meet required standards, but to forge ahead as market leaders. 3. For many companies, DEI, or Diversity, Equity, and Inclusion, has become a requirement, but hiring to meet those targets can be a challenge. So once again, working with talent experts, in HRNetOne, PeopleSearch, and SearchAsia helps HR meet their KPIs.

Geographically, our GP contribution is almost half-half between Singapore and North Asia, and China is about 40% of North Asia. Business mix-wise, it is almost half-half between flexible staffing and professional recruitment. A majority of the flexible staffing business comes from Singapore, while majority of the professional recruitment comes from North Asia.

So we then see a glaring potential upside where we can do so much more in terms of flexible staffing for North Asia, particularly in a giant market like Greater China, where we only started dipping our toes into the flexible staffing market in 2019.

Mid to long term, we are looking at China and ASEAN. We draw inspiration on geographical tailwinds highlighted by Kishore Mahbubani, a distinguished fellow at the Asia Research Institute. He pointed out that China has crossed the tipping point with its 1.4 billion people joining the middle class, and a new spurt of growth has been created. China is pursuing the dual circulation policy because they can So China is clearly one geography we want to put our energies in. The other interesting place is ASEAN, whose combined GDP grew from $620 billion in year 2000 to $3 trillion in 2021. ASEAN's trade with China was $29 billion in year 2000 And with the FTA signed in 2002, it exploded to $669 billion in 2021, nearly double of the trade with the US. So given the close economic ties between China's 1.4 billion people and ASEAN's 680 million, and with China's expected leading position in the world, ASEAN is in a good place to benefit from China's rise.

From a business segment perspective, we have doubled down on flexible staffing and related verticals like RPOs in our newest business units. So you have RecruitFirst in Kaohsiung, RecruitFirst in Seoul, RecruitFast in Shanghai. This is happening against a backdrop of easy social acceptance of contract and temporary work, and the disorder that the world has stepped into post-COVID. With the Ukraine war, the energy crisis, rising inflation, bank failures, and retrenchments by some very big names, it just makes flexible staffing a very attractive product to companies indeed.

Short term, the global recessionary sentiment has impacted the recruitment business across the world in Q1 this year, and we were not spared. A few of our competitors have announced profit warnings, one of them axing off 300 and another one cut more than 2,000 employees in the face of the looming recession. Our China business was severely impacted in Q1 this year due to the challenges in building business pipelines in Q4 last year when COVID infection was at its peak. Some of our competitors reported as much as 44% decline in sales in China. Although post-Chinese New Year, business activities have largely resumed,— and people have gone back to offices. Hiring momentum remains mixed across sectors in China. For the short term, we believe that the macro environment continues to be challenging. First half performance is likely to be significantly lower than that of the same time last year. The next 2 months will be critical to see how first half pans out. However, looking at the pipelines for Q3, we have reason to believe that second half will have a good chance of stronger performance than first half.

All businesses go through their cycles, so startups, acquisitions, and new joint ventures serve as new sigmoid curves while mature units go through rejuvenation through succession planning, repurposing, new products, and innovation. Our 3 acquisitions in 2018 have grown 3 times in profits and brought us a return on investment of 48%. RecruitFirst Taipei and RecruitFirst Jakarta that was started in 2019 and 2020 respectively made good the volume gaps left by the phasing out of vaccination projects in Singapore last year. Last year, we also planted the seeds for RE:FORCE Chengdu and RE:RECRUIT FIRST Kaohsiung. This year, we announced RE:RECRUIT FIRST Shanghai, RE:RECRUIT FIRST Seoul, and succession planning at RE:RECRUIT FIRST Malaysia. So that's the sigmoid curve. For the next 3 years, and there will be more that we are incubating to pivot for continued growth and capture the market when it makes a meaningful rebound.

To end off today's presentation, we recap what we are known for: strong business performance as demonstrated in our P&L delivery, solid balance sheet With nearly $300 million of cash pile and zero debt position. Great returns to shareholders with high ROE and dividend yields. Scale and ability to pivot in every situation.

I think that brings us to the end of our presentation. Thank you very much, Jennifer. Thank you. We will now move into the AGM proper. So the annual report, together with the notice of the AGM dated 11th of April 2023, was published on the SGXNet and the company's corporate website. With your consent, I shall take the notice as read, and we will dispense with seeking proposers and seconders as that is purely customary and there is no legal requirement for it. All pertinent information relating to the proposed resolutions is set out in the Notice of AGM dated 11 April 2023. The AGM today is being convened and held by electronic means in accordance with the COVID-19 Order 2020. Shareholders will not be able to attend the AGM in person. As stated in the Notice of AGM, voting for the resolutions are being conducted live. So I would like to thank the shareholders who have submitted their questions in advance of today's AGM. Our responses to such questions have been published on SGXNet and our corporate website on 21 April 2023. If you have any other questions pertaining to the agenda of this AGM, we will be happy to respond to them during the live Q&A session, the instructions for which will be provided shortly. As mentioned, shareholders who are joining us on this audiovisual webcast may submit new questions related to the resolutions being tabled at the AGM through the live Q&A web chat function. Shareholders who are joining us via audio-only feed or telephone will not be able to ask live questions. We would like to seek shareholders' understanding that the new questions addressed in this live Q&A should be relevant to the resolutions being tabled. So now let me let you view a video clip illustrating how you can submit your questions and cast your votes live during this AGM.

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I hope the video is helpful, and you can start typing your questions in the text box on your screens. So questions which have already been addressed through our written responses published earlier on 21 April may not be addressed again at this AGM. And where substantially similar questions are received, we will consolidate all questions, and consequently not all questions may be individually addressed. So we seek your understanding in the interest of time. And now we'll now proceed with the Q&A session.

I'll take up the first question. The first question is regarding the items on other financial assets, including CLN, T-bills, investments. The shareholder asks, that they are not part of— well, rather the comment was that they are not part of core business. Are there any internal policy on caps on investments in them? I think we've got to separate the two categories of financial assets. Number one, the CLN and the T-bills. These are really Treasury instruments that we use to deploy excess cash while pending deployment in investments.. The second category would include HR-related marketable securities that we invest from time to time on a very opportunistic basis. And when you talk about internal policy on caps on investments, we do have internal policy on the various KPIs that we look at when we assess such investments in HR-related securities. The question asked is, I understand that second half performance in 2023 is likely to surpass first half. How about second half in 2023 versus 2022? Um, we are still in Q2, 2 more months to go before we close off first half. Um, Q3, we have certain visibility But beyond that, we cannot see how the numbers might pan out against the whole of 2022 or the second half of 2022. But the signs in Q3 are pretty positive at the moment. I want to take on another question that talks about our response to the shareholder question that first half performance is likely to be significantly lower than that of same time last year. And the question asked was, how significant is significant? More than 30% drop? And then the second question is, with this update, how confident are you to deliver another highly profitable year? I'll start by answering the second question. That is, even though we are seeing that first half and including Q1 has been very challenging, the company remains very profitable. So we are confident to deliver yet another profitable year. How high it is, we don't have visibility at this moment. And the question, um, the first question on how significant is significant, we don't have the exact numbers at the moment, so stay tuned for the announcement of our first half results sometime in August.

Maybe I can jump in with the question about whether or not we see a slowdown, because I see it on my screen. And basically, yes, I think that the reality is that Q1 and even right now in Q2, there is definitely a slowdown. If you are following other of our peers, a couple of them have already, you know, come right out to say that their numbers are down. So I think the better part of the question would be how we intend to navigate it. And being very co-owner-focused, I think you can be sure that straight away we have taken very strong measures. We have had quite a number of our business leaders voluntarily take a pay cut because they want to ensure that we're in a good place and keep costs low. As far as possible, we have shifted everything back online. So we've cancelled our D&D and gone back onto virtual because you actually save a lot of money by not using banquet space. It's in the hundreds of thousands, and it's equally effective, if not more. So if you remember when we had our highest profit year ever in our history, everything was online, and that perfectly works fine. And so we've shifted, pivoted back that way. As mentioned in the shareholder's letter also, the other thing that we're doing is to capitalise on the fact that we're very much a regional play. So to ramp up the work that our business units do across the region, because as the markets have very much localised, I think then you'll see that, you know, we have a stronger edge because you get customers who are seated in Shanghai. They're not flying as much anymore, but they still have responsibility for Jakarta, for Singapore, and for cities outside of China. And by working with us, they get their key account director working directly with them in Shanghai, and yet the quality of the work across the cities is standardized, right? So we're definitely pulling out all the stops to ensure that we make full use of the opportunities that we have. Right.

I want to take on a question that talks about page 120 of the annual report. Can management shed light on what has resulted in the net fair value loss of $10.9 million on investments in equity instruments? So I looked at page 120, The 10.9 million net fair value loss that this shareholder is talking about is actually talking about investments in equity instruments designated at fair value to OCI, other comprehensive income. And that really relates to our investment, long-term investments in Staffline and Bamboos. So, and these two investments, we actually marked it to market. So the fair value loss that you see here is really a function of the closing price of these two public listed stocks on the stock exchange. There is a related question by another shareholder who said that the equity, the quoted equity investments in past two years have been patchy and losing money. Starfly is a case in point where the diminution in value has been substantial. Going forward, would the board eschew from such equity investment and focus on M&A where you have majority control? I think our position on Starfly and Bambooz is that we are a strategic long-term investor, and as with all investments, our investment objectives are subject to regular review. In the light of any new circumstances, opportunities, or changes in the market that may impact shareholders' value. Now, as to whether we would continue to invest in such opportunities, I think we have to look at it on a case-by-case basis, whether it's going to bring value to the shareholders from a strategic standpoint or an immediate profit accretion standpoint. Adeline, do you have something to add on this?

Um, yes, I, I don't think we'll just automatically say that, oh, we won't go in for a minority stake. Um, even the case of Star Flyer, the original intent back in 2018 was potentially to, to look for a majority stake, but the market changes very rapidly and we do have to respond accordingly. So yeah, I think, you know, in each case, as Jennifer pointed out, we do have to look at it case by case to whether it makes sense for us. Yeah, I wanted to answer the next question, which was whether we have any plans to increase our public float, and the answer is yes. So I think I alluded to it earlier when we mentioned that we will be— we have been actually using it for M&A currency. So many times when we are making an acquisition, some portion consideration would actually be this co-shares, because we want everybody to be aligned. And even with our employees, Jennifer herself took her variable payment in shares the last time round when there was a variable payment made. Variable bonus. Variable bonus, yeah. And a number of our other employees as well. And we have made it, you know, it's basically an opt-in system where you can just click through on our on our employee portal in order to be paid in shares. So yes, I think we're definitely moving towards increasing the public float.

Yes, I want to take on the next question on the semiconductor industry in mainland China. So the question goes, does HRNet have business exposure to talent demand for the semiconductor industry in mainland China? This is in view of sanctions and restrictions placed on the sale of high-tech semiconductor equipment to Chinese firms and reshoring to Taiwan and the USA. Indeed, we have talent demand exposure in both mainland China as well as Taiwan. So all the more because of the sanctions and restrictions placed on the sale of high-tech semiconductor equipment to China, that China has to shore up their own internal sufficiency for the semiconductor industry. In fact, a whole ecosystem is being built or encouraged and promoted by the Chinese government in China. And we've seen reports of the Chinese government giving incentives and subsidies to build this semiconductor ecosystem within China. So that's one part of the dual circulation policy that China has. So we've got the benefits on both sides depending on where things flow. But for sure, we know that there is a captive market within China itself.

I think I can take the question on Octomate. Zoe is actually on this call. Perhaps we should just promote her to panelist. But Zoe, if I may answer on your behalf, I think the question is, um, what's our planned growth rate, uh, and, you know, total addressable market, and what's our advantage over other HRSS software? So maybe if I can give a little bit of context as in how we even came to make this investment, um, into Octomate, was, um, you might be aware that, you know, in Indonesia and India, there are lots of startups going around talking about earned wage access. Right? So basically, they would make money available to workers in advance of payday, and they charge exorbitant rates, right? So these are your minimum wage workers, and they're being taxed to access their own wages, earned wages. And when I met all these companies, I was always very uncomfortable. I felt that the karma was a bit wrong. And then I met Zoe. Zoe basically says, "No, why are we taxing the minimum wage workers? We should offer it as an employee benefit." And if you consider how much clients are actually spending on talent acquisition and retention, then this is a very small cost for them to bear. And this is public information. Well, you have Amazon, which is a client of Octomate. You have H&M in Thailand. And with one of these big clients, basically, it was proven. So Zoe's proposition was proven because there were the client and two other competitors on the same road. Interesting. The competitors decided to be a little bit funny and increase their hourly wages slightly so as to attract across the client's employees. The client's employees came right out and said, "I'd rather stay here because I can assess my wages anytime on a daily basis. If I move across, then I have to wait till the end of the month." So I think Zoe's idea that it's an employment benefit, which is a corporate expense, which then becomes negligible cost, it resounded with us. We felt that that's the right way to go. It's the same clients that we are servicing anyway. And so, you know, if your question is how fast is Octimate going to grow, then without adding stress to Zoe, I'm going to say very fast. But fundamentally, this product is a really sound product, an ethical product, sustainable product.

Yeah, I want to thank this particular shareholder Who thinks that HRNet is a good company and should do well? And that is on the background of a question that was being asked on reporting on a quarterly basis. So the question goes, in view of rapidly changing economic conditions, is the company in favor of reporting on a quarterly basis? A few good companies in stock exchange in SGX has already done this on a voluntary basis, and I think HRNet is a good company and should do so. As well. So thank you. Yes, we will consider this quarterly reporting, and at the same time, we are very mindful about the need to balance transparency and short-termism. And one of the things that we are doing is doing a lot of voluntary announcements. Like last year, we made 29 voluntary announcements on top of the regulatory requirements, with the, with the aim to give you context on our business, our people, and the general environment. And we believe that being very upfront and updating the market as soon as certain pieces of information that we think is relevant to shareholders getting a better feel of the business That's the first take on promoting transparency. So thank you, we definitely will keep that in mind and consider it.

There's a final question on dividend, would you like to address?

Yes, so the question asked was, can you share how management decides on how much to declare for interim and final dividend? Is it based on each half's performance? Technically, yes. And typically, we use the rule of thumb as a practice to distribute 50% of the net profit after tax amount after taking away exceptional items. Now, in terms of declaring interim or final numbers, the first consideration is always a mathematical one. The second consideration, of course, is also looking at the current situation, whether a certain dividend is sustainable, and to give the right message to our shareholders.

There's one last question. I think that the question is, does the company have plans to provide payroll solutions externally to customers and integrate more tightly into HR workflow solutions? And the answer is yes, actually we already do. So we do have YesPay, which provides payroll services, and our RecruitFirst, RecruitExpress, as well as Optimate itself, provide such services as well. So we are in a number of verticals apart from flexible staffing and professional recruitment. Yeah. Okay, I believe most of the questions have been addressed, and so we will then proceed with the voting. Segment of the meeting. In accordance with the SGX ST Listing Manual and the guidance issued by SGX, the resolutions as set out in the Notice of AGM dated 11 April 2023 will be voted by way of poll. The poll will be undertaken in real time by electronic means. So I would like to inform all present that in my capacity as the Chairman of the meeting, I have been appointed as a proxy by a number of shareholders, and I will vote in accordance with the wishes of these shareholders who have appointed me as proxy. For the conduct of the poll, Conveen has been appointed as the polling agent, and Moore Stephens LLP has been appointed as the scrutineers for this meeting. The validity of the proxy forms submitted by the shareholders has been reviewed, and all valid votes have been counted and verified. So we shall proceed with the formalities for the conduct of the poll after completing the business of this meeting. The first item on the agenda is to receive and adopt the Director's Statement and the audited financial statements for the financial year ended 31 December 2022, together with the auditor's report thereon. The reports and audited financial statements are set out on pages 111 to 162 of our annual report. So I propose that the Director's Statement and audited financial statements for the year ended 31 December 2022 together with the auditor's report thereon, be received and adopted. Resolution 2 is to approve the declaration of a final tax-exempt one-tier dividend of S$1.87 per ordinary share for the financial year ended 31 December 2023. 2022. I propose that the payment of a final single-tier tax-exempt 1.87 Singapore cents per ordinary share dividend payment for the financial year ended 31 December 2022 be and is hereby approved. Resolution 3: is to approve payment of additional directors' fees of S$40,000 for the financial year ended 31 December 2022, and that pursuant to Section 161 of the Companies Act 1967 and Rule 804 of the Singapore Exchange Securities Trading Limited Main Board Rules, authority be and is hereby given to the directors to allot and issue the following ordinary shares of the company to the following relevant directors at an issue price of S$0.7308 per 2022 remuneration share, such amount to be offset against the 2022 additional directors' fees payable to the relevant director. So for Mr. Gao Yong, in respect of $30,788 remuneration shares, and for Mr. Albert George Hector Ellis, in respect of $15,394 remuneration shares. I propose that the payment of additional director's fees of $40,000, including the issuance of the remuneration shares for the financial year ended 31 December 2022, be hereby approved. Moving on to agenda item 4, that is to approve the payment of directors' fees, the 2023 directors' fees of S$270,000 for the financial year ending 31 December 2023, and that pursuant to Section 161 of the Companies Act 1967, and Rule 804 of the Singapore Exchange Securities Trading Limited Main Board Rules, Authority (b) and is hereby given to the directors to allot and issue the following ordinary shares of the company out of Treasury to the following relevant directors at an issue price of S$0.7308 per 2023 remuneration share such amount to be offset against the 2023 director's fees payable to the relevant director. So this would be for Mr. Gao Yong in respect of 61,576 remuneration shares, and for Mr. Albert George Hector Ellis in respect of 61,576 remuneration shares. For Mr. Pong Chun Yi, in respect of 12,315 remuneration shares. So I propose that the payment of directors' fees of S$270,000, including the issuance of the remuneration shares 2023, for the financial year ending 31 December 2023, payable half-yearly in arrears, be and is hereby approved. We can now proceed to Item 5, Resolution 5, which is to re-elect Mr. Sim Yong Xiang as a Director of the Company. Mr. Sim, who is retiring by rotation pursuant to Article 94 of the Company's Constitution, has signified his consent to continue in office. Mr. Sim will, upon re-election as a Director of the Company, remain as an executive and non-independent director, founding chairman, and a member of the nominating committee. So I propose that Mr. Sim Yong Xiang be and is hereby re-elected as a director of the company. Thank you. We then proceed to Resolution 6, which is to re-elect Ms. Heng Suling Mei as a director of the company. Ms. May Heng, who is retiring by rotation pursuant to Article 94 of the company's constitution, has signified her consent to continue in office. Ms. May Heng will, upon re-election as a director of the company, remain as lead independent director, chairman of the audit and remuneration committees, and a member of the nominating committee. Ms. May Heng will be considered independent pursuant to Rule 7048 of the Listing Manual of the SGX ST. So I propose that Ms. Heng Siew Ling May be and is hereby re-elected as a Director of the Company. Thank you. Resolution 7 is for the re-election of Mr. Pong Chun Yi as Director. So Mr. Pong Chen Yi, who is retiring by rotation pursuant to Article 100 of the company's constitution, has signified his consent to continue in office. Mr. Pong will, upon re-election as a director of the company, remain as an independent director, chairman of the nominating committee, and a member of the audit and remuneration committees. Mr. Pong Chun Yi will be considered independent pursuant to Rule 704(8) of the Listing Manual of the SGX ST. So I propose that Mr. Pong Chun Yi be and is hereby re-elected as a Director of the Company. Thank you. Resolution 8 is to re-elect Mr. Sato Hiroshi as a director of the company. Mr. Sato Hiroshi, who is retiring by rotation pursuant to Article 100 of the company's constitution, has signified his consent to continue in office. Mr. Sato Hiroshi will, upon reelection as a director of the company, remain as an independent director and a member of the audit committee. Mr. Sato will be considered independent pursuant to Rule 7.04.8 of the Listing Manual of the SGX ST. So I propose that Mr. Sato Hiroshi be and is hereby re-elected as the Director of the Company. We will now proceed to Resolution 9, that is to re-elect Mr. Albert George Hector Ellis as a Director of the Company. Mr Albert Ellis, who is retiring by rotation pursuant to Article 100 of the company's constitution, has signified his consent to continue in office. Mr Albert Ellis will, upon re-election as a director of the company, remain as an independent director. Mr Albert Ellis will be considered independent pursuant to Rule 7048 of the Listing Manual of the SGX ST. I propose that Mr Albert George Hector Ellis be and is hereby re-elected as a director of the company. Thank you. We now have come to Resolution 10, which deals with the reappointment of the auditors of the company and to authorise the directors to fix their remuneration. Messieurs Deloitte Touche LLP, who are the auditors of the company, have expressed their willingness to continue in office. I propose that Messieurs Deloitte Touche LLP, Public Accountants and Chartered Accountants Singapore, be and are hereby reappointed as auditors of the company and to hold office until the conclusion of the next Annual General Meeting, and that the directors be authorised to fix their remuneration. Thank you. All the ordinary business as set out under Items 1 to 10 of the Notice of AGM have been duly proposed, and we will now move on to the special business. Resolution 11. This is to authorise your directors to allot and issue shares and convertible securities pursuant to Section 161 of the Companies Act 1967 and Rule 806 of the Listing Rules of SGX ST. The text of the resolution is set out in Item 11 of the Notice of AGM on pages 166 Pages 166 and 167 of our Annual Report. I propose the motion as set out under Item 11 in the notice. The last item on our agenda, Resolution 12, is to seek shareholders' approval for the proposed renewal of the share purchase mandate. Such a mandate would allow the company to hold the repurchased shares as treasury shares. The limit on the number of shares which may be purchased or acquired under this mandate is 10% of the company's issued share capital excluding treasury shares as at today. If approved by shareholders, this mandate will continue until the next AGM of the company or until it is varied or revoked by the company in general meeting. The rationale and all pertinent information relating to the proposed resolution is set out in the letter to shareholders dated 11 April 2023. I propose the motion as set out under Item 12 in the notice. So all the resolutions have now been duly proposed, and we shall now proceed to conduct the poll voting. Voting has been opened and will be closed very shortly. So if you have yet to cast your votes for the resolutions table at this AGM, please do so now. To vote, click on the Access Voting Card to cast your vote for each of the resolutions. You may change your vote at any time while this poll is still open by simply selecting your new choice. There will be a green tick at the corner of your voting card to indicate that your vote has been successfully submitted and received. If you have not already cast your votes on the real-time voting system, please do so now. The real-time voting system will be closed in 1 minute. Okay, voting is now closed and we will announce the results of the poll shortly and request your patience as the results are being tabulated. I'd like to thank everybody for your patience. It does look like all the poll results are in. Can I just ask that the screen be shared? Okay, um, if you can scroll down as well so that everyone can see that all the resolutions were carried based on the poll results, I declare all the motions carried. Um, Conveen, would you like to, yeah, let everyone see the details? So thank you very much for your support and for taking the time this morning. We have now concluded the businesses set out in the agenda, and no notice has been received for any business that may be transacted at this meeting. So I therefore declare this AGM closed, and I'm very grateful to get to spend this time with you.

Thank you, Adeline. Okay, and also before we go, we'd just like to play for you an original song that was composed and arranged and performed by our very own HRNetGroup talents. So it was done to commemorate our 30th anniversary celebrations. And once again, thank you for joining us today.

We hope to see you again next year. Starting off with just a clothes on my back and a dream to make a difference. They all say that we would one day regret, but not once have I looked back. With you by my side, I can turn any tide. The world is ours for the taking. Though the road where all might be rough and long, I'm glad that I'm walking it with you.

Now we've grown across—

the years, and we will grow for many more. The skies above are wide and clear. We are much stronger than before. Started off with just a little dream. Look how far We've come together. Now they say that we are one of the best, and no one's ever looked back. With you by my side, I can turn any tide.

The world is ours for the taking.

The road we're on might be rough and long. I'm glad that I'm walking it with you. As we sail the seven seas, looking out far towards the horizon, there is so much we have done. And so much more we will do together.

And so much more we will do together. Okay, indeed there'll be so much more that we'll do together. So have a good day everyone.

We hope to see you again next year.

Goodbye.

Thank you. Thank you.

Bye-bye.

Thank you.