about us - Corporate Governance
 
 
 

The Board is committed to continuously and consistently raising the level of corporate governance practices of the Company to protect the interest of shareholders and to promote investor confidence.

The Company confirms that it has adhered to the principles and guidelines as set out in the 2005 Code of Corporate Governance (“Code”), where applicable, and has specified and explained the areas of non-compliance.


Board of Directors

The Board comprises the following members:

Executive:

Mr. Koh Kian Kiong (Executive Chairman & CEO)
Ms Koh Maggie
Ms Chng Geok (CFO)
Mr. Sanjeev Gupta (COO) (Appointed on 1 April 2007)
Mr. Lim Joo Suan (Appointed on 28 January 2008)


Non-Executive and Independent:

Mr. Heng Lee Seng
Mr. Hoon Tai Meng
Mr. Chan Lay Ho

The number of Board and Board committee meetings held in the year and the attendance of each director, where relevant, are set out as follows:

 
  Board Audit Nominating Remuneration
  No. of
Meetings
Attendance No. of
Meetings
Attendance No. of
Meetings
Attendance No. of
Meetings
Attendance
Mr. Koh Kian Kiong 5 5 - - 1 1 - -
Ms Koh Maggie
5 5 - - - - - -
Ms Chng Geok 5 5 - - - - - -
Mr. Sanjeev Gupta* 5 3 - - - - - -
Mr. Lim Joo Suan** 5 0 - - - - - -
Mr. Heng Lee Seng 5 5 2 2 1 1 2 2
Mr. Hoon Tai Meng 5 5 2 2 1 1 2 2
Mr. Chan Lay Ho 5 5 2 2 - - 2 2
* Appointedon 1 April 2007.
** Appointed on 28 January 2008.

Principle 1: The Board’s Conduct of its Affairs

The principal functions of the Board are:
  • approving the Group’s policies, strategies and financial objectives of the Company and monitoring the performance of Management;
  • overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance;
  • approving the nominations of Board of directors and appointment of key personnel;
  • approving annual budgets, major funding proposals, and investment and divestment proposals; and
  • assuming responsibility for corporate governance and compliance with the Companies Act and the rules and requirements of regulatory bodies.

To facilitate effective management, certain functions have been delegated to various Board Committees, each of which has its own written terms of reference and whose actions are reported to and monitored by the Board.

The Company’s Articles of Association (“Articles”) allow Board meetings to be conducted by way of teleconferencing to maximise Board participation.

The Company also has in place a budget for directors’ training programmes. This is utilised for directors’ participation in industry conferences and seminars and application to courses of instruction/training programmes in connection with their duties as directors. The budget may be utilised by each director subject to the approval of the Chairman.

New directors to be appointed in the future will be provided with a letter of appointment setting out their duties, obligations and terms of appointment.

Principle 2: Board Composition and Balance

As at year end, the Board had comprised 3 Independent Directors and 4 Executive Directors. Following the appointment of Mr Lim Joo Suan as an Executive Director of the Company on 28 January 2008, the total number of Executive Directors has increased to 5. The Board complies with the recommendation in the Code for at least one-third of the Board to comprise of Independent Directors.

The independence of each director is reviewed annually by the Company’s Nominating Committee (“NC”). The NC adopts the Code’s definition of what constitutes an independent director in its review, and further ensures that no individual or group of individuals dominate the Board’s decision making process.

The non-executive directors contribute to the Board process by monitoring and reviewing Management’s performance against goals and objectives. Their views and opinions provide alternative perspectives to the Group’s business and they bring independent judgement to bear on business activities and transactions involving conflicts of interest and other complexities.

Key information regarding the Directors is set out on page 12 of the Annual Report. The NC is of the view that the current Board members provide core competencies necessary to meet the Company's needs.

Principle 3: Role of Chairman and Chief Executive Officer

Mr. Koh Kian Kiong is the Executive Chairman and CEO. As one of the founders of the Group, Mr. Koh has been responsible for leading the Board and has assumed full executive responsibilities over the directions and operational decisions of the Group since 1974.

The Board is of the view that having Mr Koh assume the roles of both Chairman and CEO has not compromised accountability and independent decision-making as there is a sufficient number of Independent Directors on the Board to exercise objective judgement on decisions. Notwithstanding that the Company has benefited from having an Executive Chairman who is knowledgeable about the businesses of the Company, the Board is looking into the issue of CEO succession and the segregation of the two positions.

The Chairman ensures that Board meetings are held when necessary. The Chairman reviews Board papers before they are presented to the Board and ensures that Board members are provided with complete, adequate and timely information. Members of Management who can provide additional insight into the matters to be discussed are invited to attend the relevant Board meeting.

Principle 6: Access to Information

The Company recognizes that the flow of accurate and timely information is important for the Board to be effective in the discharge of its duties. Accordingly, it endeavours to meet the information needs of the Directors, such as requests for further explanations, briefings or informal discussions on any aspect of the Company's operations or business issues. The Directors are provided with the contact details of the Company's senior Management and Company Secretary to facilitate access to information.

The Board seeks independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. Subject to the approval of the Chairman, directors, whether as a group or individually, may seek and obtain independent professional advice to assist them in their duties, at the expense of the Company.

The Company Secretary attends all Board meetings and is responsible for ensuring that Board procedures are followed and that all relevant statutes, rules and regulations, including requirements of the SGX-ST, are complied with. She is also the primary channel of communication between the Company and the Singapore Exchange Securities Trading Limited ("SGX-ST").

The appointment and the removal of the Company Secretary is a Board matter.

Executive Committee

The Executive Committee (“EC”) comprises the following directors:

Mr. Koh Kian Kiong
Ms Koh Maggie
Ms Chng Geok
Mr Sanjeev Gupta
Mr Lim Joo Suan (Appointed on 26 February 2008)

The EC meets regularly and performs the following functions:

  • Approves investment/divestment proposals within 5% of NTA;
  • Reviews and submits the Group’s business plans to the Board;
  • Establishes guidelines and approval limits for the management and operation of the Group’s businesses;
  • Reviews budget against performance of each business unit;
  • Ensures that interested person transactions are undertaken at arm’s length and on commercial terms;
  • Oversees and implements appropriate systems to manage risks.

Nominating Committee
Principle 4: Board Membership
Principle 5: Board Performance


The members of the Company’s Nominating Committee (“NC”) are:

Mr. Hoon Tai Meng (Chairman)
Mr. Heng Lee Seng
Mr. Koh Kian Kiong

A majority of the NC members, including the Chairman of the NC, are non-executive independent directors
and are not related to any substantial shareholder of the Company.

The duties of the NC are as follows:
  • To review annually the independence of each director with reference to the criteria set out in the Code;
  • To review all nominations for new appointments and re-appointments of directors and put forth their recommendations for approval by the Board;
  • To determine whether a director is able to and has been adequately carrying out his duties as a director of the Company, particularly, when a director has multiple Board representations.
The NC will be formalizing the process for selection and appointment of new Directors. The NC will also consider the appropriateness of issuing letters of appointment to Directors setting out their duties, obligations and terms of appointment.

The NC has reviewed the independence of each Director for the financial year ended 31 December 2007 in accordance with the Code's definition of independence and is satisfied that more than one-third of the Board comprises Independent Directors.

In accordance with the Company's Articles, each Director has to retire at least once every three years by rotation and all newly-appointed Directors have to retire at the next Annual General Meeting ("AGM") following their appointments. The retiring Directors may offer themselves for re-election. Mr Hoon Tai Meng, Ms Chng Geok and Ms Koh Maggie will retire by rotation in accordance with Article 91 of the Company's Articles. Mr Lim Joo Suan will retire in accordance with Article 97 of the Company's Articles. The NC has recommended their nomination for re-election. The Board has accepted this recommendation and accordingly, the retiring Directors will be offering themselves for re-election at the forthcoming AGM.

The dates of initial appointment and last re-election of each director are set out below:
 
Name Position Date of initial appointment Date of last re-election
Mr. Koh Kian Kiong Executive Chairman & CEO 13 November 1999 26 April 2007
Ms Koh Maggie Executive Director 13 November 1999 27 April 2006
Ms Chng Geok Executive Director 1 January 2005 28 April 2005
Mr Sanjeev Gupta Executive Director & COO 1 April 2007 26 April 2007
Mr Lim Joo Suan Executive Director 28 January 2008 -
Mr Heng Lee Seng Independent Director 22 August 2000 26 April 2007
Mr Hoon Tai Meng Independent Director 22 August 2000 28 April 2005
Mr Chan Lay Ho Independent Director 2 May 2006 26 April 2007
 
The NC has in place a Board performance evaluation process where the effectiveness of the Board as a whole is assessed. This annual evaluation exercise provides an opportunity to obtain constructive feedback from each Director on whether the Board's procedures and processes allowed him to discharge his duties effectively and to propose changes which may be made to enhance Board effectiveness as a whole.

Audit Committee
Principle 10: Accountability and Audit
Principle 11: Audit Committee
Principle 12: Internal Controls
Principle 13: Internal Audit


The members of the Company’s Audit Committee (“AC”) are:

Mr. Heng Lee Seng (Chairman)
Mr. Hoon Tai Meng
Mr. Chan Lay Ho

The AC comprises entirely of Non-executive and Independent Directors. All members are Certified Public Accountants and are appropriately qualified to discharge their responsibilities and capable of exercising sound and independent judgement.

The key responsibilities of the AC include the following:
  • to review the scope, audit plans, results and effectiveness of the external and internal auditors;
  • to review interested person transactions in accordance with the requirements of the Listing Rules of the SGX-ST;
  • to review and recommend to the Board the release of the financial statements;
  • to review and recommend the re-appointment of the external auditors;
  • to review the independence of the external auditors annually;
  • to review all non-audit services provided by the external auditors to determine if the provision of such services would affect the independence of the external auditors.

The AC is empowered to investigate any matter relating to the Group's accounting, auditing, internal controls and financial practices brought to its attention, with full access to records, resources and personnel, to enable it to discharge its functions properly. It has full access to and the co-operation of Management, including the internal auditors, and has full discretion to invite any Director or executive officer to attend its meetings.

The Group has an Internal Audit department which reports primarily to the Chairman of the AC. The AC ensures that the team is adequately resourced and has the appropriate standing within the Group. It also reviews and approves the annual internal audit plan proposed by the Head of the Internal Audit department who is a Certified Public Accountant. The Head of the Internal Audit department, like the external auditors, reports independently their findings and recommendations to the AC.

In performing its functions, the AC reviews the overall scope of both internal and external audits, and the assistance given by Management to the auditors. The AC also met with the internal and external auditors without the presence of Management to discuss the results of their respective audit findings and their evaluation of the Group's system of accounting and internal controls.

The AC has reviewed the Group’s risk management policies and, based on the audit reports and management controls in place, is satisfied that there are adequate internal controls in the Group.

The AC has adopted a whistle-blowing programme to encourage and to provide a channel for Group employees to report and to raise, in good faith and in confidence, their concerns about possible improprieties in matters of financial reporting or other matters.

The AC is also satisfied with the independence and objectivity of the external auditors and has recommended to the Board the re-appointment of Ernst & Young as the Company's external auditors at the forthcoming AGM.

Remuneration Committee
Principle 7: Procedures for Development of Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure of Remuneration


The members of the Company’s Remuneration Committee (“RC”) are:

Mr. Heng Lee Seng (Chairman)
Mr. Hoon Tai Meng
Mr. Chan Lay Ho

The RC comprises entirely of Non-executive and Independent Directors.

The RC has access to external professional advice on remuneration matters, if required.

The RC, through a competitive and appropriately structured framework of remuneration, aims to motivate and retain executives and ensure that the Company is able to attract talents in the market in order to maximise shareholder value. In consultation with the Chairman of the Board, the RC will:

 
  • recommend to the Board a framework of remuneration for executive directors and senior Management of the Company that is aligned with the interests of shareholders and ensure that such remuneration is appropriate to attract, motivate and retain the right talents for the Group;
  • review and recommend to the Board for their endorsement the annual remuneration packages for executive directors, senior Management and employees related to directors or, controlling shareholders of the Group, which include a performance-related variable bonus component; and
  • decide on the early termination compensation of directors.

The Company adopts a remuneration policy for Executive Directors and key Management staff comprising a fixed component and a variable component. The fixed component is in the form of a base salary and fixed bonus. The variable component is in the form of profit-sharing or a variable bonus that is linked to the performance of the Company and the individual. The Executive Directors' service contracts are renewed on an annual basis.

As part of its review, the RC covers all aspects of remuneration, including but not limited, to Directors’ fees, salaries, allowance, bonuses and benefits-in-kind.

The RC ensures that the remuneration packages of employees related to Executive Directors and controlling shareholders of the Group are in line with the Group's staff remuneration guidelines and commensurate with their respective job scopes and levels of esponsibilities.

There is 1 key executive of the Group who is an immediate family member of the CEO and whose remuneration exceeded S$150,000 in 2007.

Non-executive Directors' fees are set in accordance with a remuneration framework comprising a basic fee, and incremental fixed fees for assuming additional responsibilities such as the chairing Board Committees. The Non-executive Directors' fees proposed are subject to shareholders' approval at the AGM.

The Company does not have a long-term incentive or share option scheme in place.

 

Communication with Shareholders
Principle 10: Accountability and Audit
Principle 14: Communication with Shareholders
Principle 15: Greater Shareholder Participation


The Board is mindful of its obligation to provide timely disclosure of material information. The Board is accountable to the shareholders while Management is accountable to the Board.

The Company does not practise selective disclosure. Announcements, including interim and full-year results, are released through SGXNET and news releases. The Company has engaged the services of a public relations company to facilitate the dissemination of information to investors and the public since becoming publicly listed in 2000. All shareholders of the Company receive a copy of the Company’s Annual Report of the Company and the Group.

At general meetings, shareholders are given the opportunity to express their views and ask questions regarding the Group and its businesses.

Resolutions on each distinct issue are tabled separately at general meetings.

The Chairmen of the AC, NC and RC are present to address questions at the Company’s AGMs. The Company’s external auditors are also present to assist the Directors in addressing any relevant queries
from shareholders.

Dealings in Securities
The Company has adopted a policy to govern conduct in the dealing of the securities of the Company for Directors and officers of the Group. Under this policy, Directors and officers are not permitted to deal in the Company’s securities while in possession of price-sensitive information and for the periods commencing 2 weeks before the release of half-yearly results and 1 month before the release of full-year results.

Interested Person Transactions
The Company has adopted an internal policy in respect of any transactions with interested persons and has set out the procedures for review and approval of the Company’s interested person transactions. All interested person transactions are subject to review by the AC.

The Company confirms that the aggregate value of all interested person transactions during the financial year under review is less than S$100,000.

Material Contracts
No material contracts were entered between the Company and any of its subsidiaries with any Director or controlling shareholder during the financial year ended 31 December 2007.

Risk Management
As the Company does not have a risk management committee, the AC and Management assume the responsibility of the risk management function. Management reviews regularly the Company’s business and operational activities to identify areas of significant risks, as well as appropriate measures to control and mitigate these risks. Management reviews all significant policies and procedures and highlights all
significant matters to the Board and the AC.

 
 
      
 
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