Solutions for Sustainable Urbanisation - UNLEASH
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Solutions for
Sustainable Urbanisation
Report to Shareholders 2017
Vision Mission Operating Principles
A global company at the forefront Guided by our operating principles 1 Best value propositions
of our chosen industries, shaping and core values, we will deliver to customers.
the future for the benefit of all our solutions for sustainable 2 Tapping and developing best
stakeholders – Sustaining Growth, urbanisation profitably, safely
talents from our global workforce.
Empowering Lives and Nurturing and responsibly.
Communities. 3 Cultivating a spirit of innovation
and enterprise.
4 Executing our projects well.
5 Being financially disciplined to
earn best risk-adjusted returns.
6 Clarity of focus and operating
within our core competence.
7 Being prepared for the future.
Keppel is a multi-business company committed
to providing robust solutions for sustainable
urbanisation. We are driving value creation
by enhancing collaboration and harnessing
synergies within the Group.
Focused on being at the forefront of our chosen
industries, we are sharpening our competitive
edge and developing new platforms for growth.
Governance & Sustainability
Sustainability Highlights
We place sustainability at the heart of our strategy,
delivering solutions for sustainable urbanisation
while creating enduring value for our stakeholders –
Sustaining Growth, Empowering Lives and
Nurturing Communities.
Sustainability Framework
Sustaining (PSRZHULQJ Nurturing
*URZWK Lives &RPPXQLWLHV
Our commitment to business People are the cornerstone As a global citizen, Keppel
excellence is driven by our of our businesses. believes that as communities
unwavering focus on strong thrive, we thrive.
corporate governance and As an employer of choice,
prudent risk management. we are committed to grow We engage and nurture
and nurture our talent pool communities wherever we are,
Resource efficiency is our through continuous training and with the aim of achieving a
responsibility and makes good development to help our people sustainable future together.
business sense. reach their full potential.
As leaders in our businesses,
Innovation and delivering quality We want to instil a culture of we support industry initiatives
products and services sharpen safety so that everyone who and encourage open dialogue
our competitive edge. comes to work goes home safe. to promote growth.
For more information, For more information, For more information,
go to: pages 64-97 go to: pages 98-99 go to: page 100
62
Keppel Corporation Limited | Report to Shareholders 2017
Managing Sustainability
We drive our businesses to deliver solutions for sustainable urbanisation
and create shared value for our stakeholders.
Our Sustainability Framework articulates management and monitoring of the material Stakeholder Engagement
our commitment to deliver value to all our (QYLURQPHQWDO6RFLDODQG*RYHUQDQFH (6* Collaboration with stakeholders supports
stakeholders through Sustaining Growth factors of the Company, and take them into us in addressing sustainability challenges.
in our businesses, Empowering Lives consideration in the determination of the We promote ongoing communication and
of people and Nurturing Communities Company's strategic direction and policies. active engagement with our stakeholders.
wherever we operate.
The Group Sustainability Steering Stakeholder relations, including
Our management systems, policies and Committee, chaired by Keppel Corporation's engagement with customers, employees,
guidelines, including our Employee Code of CEO Loh Chin Hua and comprising senior investors, media, government agencies
Conduct; Health, Safety and Environment management from across the Group, and communities where we operate, are
Policy, and Supplier Code of Conduct, translate provides guidance on the Group’s managed by departments at the corporate
our principles into practice by setting sustainability strategy while the Working level, as well as by functional divisions and
standards both for our Company and those Committee, comprising discipline-specific volunteer committees across our business
whom we work with. working groups, executes and reports on units worldwide.
the Group’s efforts.
We publish sustainability reports annually, We also engage with stakeholders on
and the next report will be published in Material Issues broader issues through our membership
May 2018. Our sustainability reports draw A robust process was undertaken to identify and support of multi-stakeholder initiatives.
on internationally-recognised standards of and prioritise the Company’s material ESG These include Global Compact Network
reporting, including the Global Reporting issues. The assessments were based on the Singapore to advance the United Nations
,QLWLDWLYH *5, DQGDUHH[WHUQDOO\DVVXUHG foundational principles of inclusivity and Global Compact initiative and its 10
in adherence to the AccountAbility AA1000 materiality outlined in the AccountAbility principles, Singapore Institute of Directors
$VVXUDQFH6WDQGDUG 6LQFH $$3ULQFLSOHV6WDQGDUG DVZHOODV to uphold high standards of corporate
our report has been brought in line with the the GRI Principles for Defining Report Content governance, as well as Workplace Safety and
new sustainability reporting requirements – stakeholder inclusiveness, sustainability Health Council to build industry capabilities
by the Singapore Exchange. context, materiality and completeness. to better manage safety and health at work.
This section contains a summary of our The process was supported by an independent Best Practices
approach on sustainability issues that are most consultant and involved stakeholder Keppel Corporation has been part of the
material to our business and stakeholders. consultations, workshops for senior widely respected Dow Jones Sustainability
management, an assessment of long-term Index for five consecutive years. We participate
Management Structure global trends and an internal review of our in the CDP (formerly Carbon Disclosure
Sustainability issues are managed and businesses. The key material ESG issues for 3URMHFW DQGDUHOLVWHGRQDQXPEHURI
communicated at all levels of the Group. The Keppel Corporation were reviewed by the other sustainability indices and rankings,
Keppel Corporation Board and management Steering and Working Committees in 2017 including MSCI Global Sustainability Index,
regularly review as well as oversee the and deemed to remain relevant. Euronext Vigeo Eiris Index – World 120 and
all four sustainability indices launched by the
Singapore Exchange in 2016.
Keppel Corporation was conferred the Best
Workforce award and received Special
Keppel Corporation Material Issues Recognition for Strategy and Sustainability
Management at the Sustainable Business
Tier 1: Issues of Critical Importance Awards 2017. The Awards, organised by
Global Initiatives in partnership with
PwC Singapore, recognise businesses
with sustainable business practices.
Keppel Corporation was also awarded
Winner of the inaugural Sustainability
Corporate (FRQRPLF Safety & Product (QYLURQPHQWDO Award at the Securities Investors Association
Governance Sustainability Health ([FHOOHQFH 3HUIRUPDQFH
6LQJDSRUH WK,QYHVWRUV &KRLFH$ZDUGV
The Award honours companies with a
strong commitment towards corporate
Tier 2: Issues of High Importance
responsibility.
Labour Practices & &RPPXQLW\ Supply Chain &
+XPDQ5LJKWV 'HYHORSPHQW Responsible
3URFXUHPHQW
63
Governance & Sustainability
Corporate Governance
The Board and management of Keppel *RYHUQDQFH)UDPHZRUN KCL’s governance The Chairman takes a leading role in the
Corporation Limited (“KCL” or the structure is as follows: Company’s drive to achieve and maintain a
ŕ&RPSDQ\Ŗ ILUPO\EHOLHYHWKDWDJHQXLQH high standard of corporate governance with
commitment to good corporate governance Dr Lee Boon Yang is the non-executive and the full support of the directors, Company
is essential to the sustainability of the independent Chairman of the Company. Secretaries and management.
Company’s businesses and performance, Mr Loh Chin Hua is the CEO of the Company.
and are pleased to confirm that the To assist the Board in the discharge of
Company has adhered to the principles The Chairman, with the assistance of the its oversight function, various board
and guidelines of the Code of Corporate Company Secretaries, schedules meetings committees, namely the Audit, Board Risk,
Governance 20121 WKHŕ&RGHŖ and prepares meeting agenda to enable Nominating, Remuneration, and Board
the Board to perform its duties responsibly Safety Committees, have been constituted
The following describes the Company’s having regard to the flow of the Company’s with clear written terms of reference. All the
corporate governance practices with specific operations. He sets guidelines on and board committees are actively engaged
reference to the 2012 Code. monitors the flow of information from and play an important role in ensuring good
management to the Board to ensure that corporate governance in the Company and
Board’s Conduct of Affairs all material information is provided in a within the Group. The responsibilities and
Principle 1: timely manner to the Board for the Board to authority of the board committees are set
Effective board to lead and control make good decisions. He also encourages out in their respective terms of reference
the Company constructive relations between the Board VHH$SSHQGL[IRUGHWDLOV
Principle 3: and management, and between the
Chairman and Chief Executive Officer should executive and non-executive directors. The CEO, assisted by the management
in principle be separate persons to ensure At annual general meetings and other team, makes strategic proposals to the
appropriate balance of power, increased shareholders’ meetings, the Chairman Board and after robust and constructive
accountability and greater capacity of the board ensures constructive dialogue between board discussions, executes the agreed
for independent decision making shareholders, the Board and management. strategy, manages and develops the
Group’s businesses and implements the
Board’s decisions. He is supported by
management committees that direct and
guide management on operational policies
and activities, which includes:
Investments & Major Projects Action
Governance Framework 2017 Committee (IMPAC), which guides the
Group to exercise the spirit of enterprise
as well as prudence to earn optimal
risk-adjusted returns on invested
CHAIRMAN
capital for our chosen lines of business,
taking into consideration the risks, in a
controlled manner;
Nominating Audit Internal Management Development Committee
Committee Committee Audit
(MDC), which nominates candidates
as nominee directors to the boards of
Board Risk each unlisted company or entity that
BOARD
Committee
the Company is invested in (“Investee
&RPSDQ\Ŗ VRDVWRVDIHJXDUGWKH
Remuneration Board Safety Company’s investment. In respect of
Committee Committee ,QYHVWHH&RPSDQLHVWKDWDUH D OLVWHG
RQDVWRFNH[FKDQJH E PDQDJHUV
or trustee-managers of any collective
CHIEF EXECUTIVE investment schemes, business trusts
OFFICER or any other trusts which are listed on a
VWRFNH[FKDQJHRU F SDUHQWFRPSDQLHV
of the Company’s core businesses,
the Committee will recommend the
Corporate Central Finance
IMPAC candidates for the approval of the
Functions Committee
Nominating Committee. The MDC also
provides inputs, guidance and direction
Group IT Steering
Committee on operational policies and human
Sustainability
Steering resources/organisational matters;
Management
Committee
Committees
Central Finance Committee, which
reviews, guides and monitors financial
policies and activities of Group
Group Regulatory Group companies;
Compliance Regulatory
Management
Enterprise Risk Management Committee,
Compliance
Committee2 Working Team2 which drives and coordinates the
Group’s risk management efforts,
and implements the Enterprise Risk
Management framework and processes;
64
Keppel Corporation Limited | Report to Shareholders 2017
Group Regulatory Compliance 5HYLHZ3URFHVV A process is in place of board and board committee meetings
Management Committee (Group to support the Board in reviewing and held in FY 2017, as well as the attendance of
RCMC), which articulates the monitoring the Group’s strategic plans, each Board member at these meetings, are
Group’s commitment to regulatory including providing directors with the disclosed in Table 1 on page 66 of this report.
compliance, directs and supports necessary context and opportunity to
the development of over-arching undertake effective and robust deliberation If a director were unable to attend a board
compliance policies and guidelines, and debate. In this regard, a two-day off-site or board committee meeting, he/she would
and facilitates the implementation board strategy meeting is organised still receive all the papers and materials for
and sharing of policies and procedures annually for in-depth discussion on strategic discussion at that meeting. He/she would
across the Group2; issues and direction of the Group. This is review them and advise the Chairman
Group Regulatory Compliance Working followed by an update of each business or board committee chairman of his/her
Team (Group RCWT), which supports unit’s strategic plans for alignment with the views and comments on the matters to be
the Group RCMC and oversees the Group’s strategy. To support the Board’s discussed, so that they may be conveyed to
development and review of over-arching oversight of the implementation of the other members at the meeting.
compliance policies and guidelines strategic plans, one business unit is invited
for the Group, as well as reviewing to each quarterly Board meeting to present ,QWHUQDO/LPLWVRI$XWKRULW\ The Company
training and communication on its plans and current challenges, and to has adopted internal guidelines setting
programmes2; provide the Board an opportunity to perform forth matters that require board approval.
Keppel IT Steering Committee, which an in-depth review into each of the Group’s 8QGHUWKHVHJXLGHOLQHV D QHZLQYHVWPHQWV
provides strategic information core businesses. RULQFUHDVHLQLQYHVWPHQWV E DFTXLVLWLRQ
WHFKQRORJ\ ,7 OHDGHUVKLSDQGHQVXUHV DQGGLVSRVDORIDVVHWVDQG F FDSLWDO
IT strategy alignment in achieving ,QGHSHQGHQW-XGJPHQW All directors are equipment purchase and/or lease, exceeding
business strategies; and expected to exercise independent judgment $30 million by any Group company (not
Group Sustainability Steering Committee, in the best interests of the Company. This is VHSDUDWHO\OLVWHG DQGDOOFRPPLWPHQWVWR
which sets the sustainability strategy and one of the performance criteria for the peer term loans and lines of credit from banks
leads performance in key focus areas. and self assessment on the effectiveness of and financial institutions by the Company,
the individual directors. Based on the results require the approval of the Board. Each
Board Matters of the peer and self assessment carried out Board member has equal responsibility
Role: The principal functions of the Board by the directors for FY 2017, all directors have to oversee the business and affairs of the
are to: discharged this duty consistently well. Company. Management, on the other hand,
is responsible for the day-to-day operation
• decide on matters in relation to the Conflicts of Interest: Every director is and administration of the Company in
Group’s activities which are of a required to declare any conflict of interest accordance with the policies and strategy set
significant nature, including decisions in a transaction or proposed transaction by the Board.
on strategic directions and guidelines with the Company as soon as is practicable
and the approval of periodic plans and after the relevant facts have come to his/ Director Orientation: A formal letter is sent
major investments and divestments; her knowledge. On an annual basis, each to newly-appointed directors upon their
• oversee the business and affairs of the director is also required to submit details appointment explaining their duties and
Company, establish, with management, of his/her associates for the purpose of obligations as a board director. All newly-
the strategies and financial objectives monitoring interested persons transactions. appointed directors receive a director tool-kit
to be implemented by management, and undergo a comprehensive orientation
and monitor the performance of Meetings: The Board meets six times programme which includes site visits and
management; a year and as warranted by particular management presentations on the Group’s
• set the Company’s values and standards circumstances. Board meetings are businesses, strategic plans and objectives.
LQFOXGLQJHWKLFDOVWDQGDUGV scheduled and circulated to the directors
• oversee processes for evaluating the prior to the start of the financial year to Training: The directors are provided
adequacy of internal controls, risk allow directors to plan ahead to attend such with continuing education in areas such
management, financial reporting and meetings, so as to maximise participation. as directors’ duties and responsibilities,
compliance, and satisfy itself as to the Telephonic attendance and conference corporate governance, changes in
adequacy of such processes; via audio-visual communication at board financial reporting standards, changes
• assume responsibility for corporate meetings are allowed under the Company’s in the Companies Act, continuing listing
governance; and constitution. Further, the non-executive obligations and industry-related matters,
• consider sustainability issues such directors meet without the presence of so as to update and refresh them on
as environmental and social factors management after each board meeting as matters that may affect or enhance their
as part of its strategic formulation. well as on a need-be basis. The number performance as board or board committee
%RDUG6WUDWHJLF5HYLHZ The Board
periodically reviews and approves the
Group’s strategic plans. In FY 2014, the
1
Board approved the Group’s Vision 20203 The Code of Corporate Governance 2012 issued by the Monetary Authority of Singapore on 2 May 2012.
2
The Group RCMC and Group RCWT were set up in October 2015 and operationalised in 2016.
which sets out the vision, operating 3
With effect from FY 2014, and following a review and update in FY 2017, the vision of the Company is to be
principles and values of the Group, and the a global company at the forefront of its chosen industries, shaping the future for the benefit of all its
roadmap4 to take the Group’s businesses stakeholders – Sustaining Growth, Empowering Lives and Nurturing Communities. Guided by our operating
principles and core values, the Company’s mission is to deliver our solutions for sustainable urbanisation
into 2020 to achieve faster growth, build profitably, safely and responsibly.
a stronger Keppel that fully captures the 4
7KLVURDGPDSLQFOXGHVIRXUEURDGDUHDVIRUVXVWDLQDEOHJURZWK %XVLQHVV 6HWWLQJWKHRYHUDUFKLQJVWUDWHJLHV
significant synergies within and among its WDUJHWVDQGNH\DFWLRQVWREHXQGHUWDNHQE\WKHEXVLQHVVXQLWV 3HRSOH %XLOGLQJDUREXVWVXFFHVVLRQ
SLSHOLQHDQGFRQWLQXHGVWURQJHPSOR\HHVDWLVIDFWLRQ 3URFHVV 3XUVXLQJH[FHOOHQFHLQVDIHW\SURGXFWLYLW\
Group companies, and fully develop the DQGLQQRYDWLRQ DQG &RUSRUDWH&LWL]HQU\ )RUPDOLVLQJDQGIXUWKHURUJDQLVLQJFRPPXQLW\RXWUHDFKHIIRUWVWR
potential of its people. positively impact communities in which the Group operates.
65
Governance & Sustainability
Corporate Governance
Table 1
Board Committee Meetings
Board
Meetings Audit Nominating Remuneration Safety Risk
Lee Boon Yang ɴɶ - ɷ ɺ ɷ -
Loh Chin Hua ɴɶ - - - ɷ -
Tow Heng Tan ɴɳ - ɷ ɹ - ɶ
Alvin Yeo Khirn Hai ɴɵ ɸ ɶ - - -
Tan Ek Kia ɴɶ ɸ - - ɷ ɷ
Danny Teoh ɴɶ ɸ - ɸ - ɷ
Tan Puay Chiang ɴɶ - ɷ - ɷ ɷ
Till Vestring ɴɶ - ɷ ɺ - -
Veronica Eng ɴɵ ɷ - - - ɶ
1RRI0HHWLQJV+HOG ɴɶ ɸ ɷ ɺ ɷ ɷ
members. A training programme is also Directors’ Independence Checklist and non-independent under the 2012 Code.
in place for directors in areas such as their actual performance on the Board Mr Tow Heng Tan was previously the Chief
accounting, finance, risk governance and and board committees. Investment Officer of Temasek Holdings
management, the roles and responsibilities 3ULYDWH /LPLWHG ŕ7HPDVHNŖ +HFHDVHGWR
of a director of a listed company and In this connection, the Committee (save for be employed by Temasek since 2012 and is
industry specific matters. In FY 2017, Mr Alvin Yeo who abstained from deliberation currently the Chief Executive Officer of Pavilion
some KCL directors attended talks on LQWKLVPDWWHU QRWHGWKDW0U$OYLQKeppel Corporation Limited | Report to Shareholders 2017
%RDUG&RPSHWHQF\ The Nominating for the non-executive directors to familiarise E ,QWKHOLJKWRIVXFKUHYLHZDQGLQ
Committee is satisfied that the Board and themselves with the management team consultation with management, the
the board committees comprise directors so as to facilitate the Board’s review of the NC assesses if there is any inadequate
who, as a group, provide an appropriate Group’s succession planning and leadership representation in respect of any of those
balance and diversity of skills, experience, development programme. attributes and if so, determines the role
gender, knowledge of the Group, core and the desirable competencies for a
competencies such as accounting or finance, 1RQH[HFXWLYH'LUHFWRUVŔ0HHWLQJV particular appointment.
business or management experience, The non-executive directors set aside time F ([WHUQDOKHOS IRUH[DPSOHIURP
human resources, risk management, at each scheduled quarterly meeting to the Singapore Institute of Directors,
technology, mergers and acquisitions, meet without the presence of management search consultants, or through open
legal, international perspective, industry to discuss matters such as board processes, DGYHUWLVHPHQW PD\EHXVHGWRVRXUFH
knowledge, strategic planning experience corporate governance initiatives, matters for potential candidates if need be.
and customer-based experience or which they wish to discuss during the Directors and management may also
knowledge, required for the Board and the board off-site strategy meeting, succession make recommendations.
board committees to be effective. planning and leadership development, G 1&PHHWVZLWKWKHVKRUWOLVWHG
and performance management and FDQGLGDWH V WRDVVHVVVXLWDELOLW\DQGWR
In this respect, the Nominating Committee remuneration matters. Such meetings HQVXUHWKDWWKHFDQGLGDWH V LVDUHDZDUH
recognises the merits of gender diversity may also be scheduled on a need-be basis. of the expectations and the level of
in relation to the composition of the Board commitment required.
and, in identifying suitable candidates for Board Membership H 1&PDNHVUHFRPPHQGDWLRQVWRWKH
new appointment to the Board, would Principle 4: Board for approval.
ensure that female candidates are included Formal and transparent process for the
for consideration. Having said that, gender appointment and re-appointment of directors The Board believes that orderly succession
is but one aspect of diversity and new to the Board and renewal is achieved as a result of
directors will continue to be selected based careful planning, where the appropriate
on objective criteria set as part of the Nominating Committee composition of the Board is continually
process for appointment of new directors The Company has established a under review.
and Board succession planning. In FY 2017, 1RPLQDWLQJ&RPPLWWHH 1& WRDPRQJ
there was one female director out of a total other things, make recommendations Criteria for Appointment
of nine directors. to the Board on all board appointments of New Directors
and oversee the Board and senior All new appointments are subject to the
%RDUG,QIRUPDWLRQ The Board and management’s succession and leadership recommendation of the NC based on the
management fully appreciate that development plans. The NC comprises following objective criteria:
fundamental to good corporate governance entirely of non-executive directors, four out
is an effective and robust Board whose RIILYHRIZKRP LQFOXGLQJWKH&KDLUPDQ DUH ,QWHJULW\
members engage in open and constructive independent, namely: ,QGHSHQGHQWPLQGHGQHVV
debate and challenge management on its 'LYHUVLW\ŝ3RVVHVVFRUHFRPSHWHQFLHV
assumptions and proposals, and that for • Mr Tan Puay Chiang that meet the needs of the Company
this to happen, the Board, in particular, the Independent Chairman and complement the skills and
non-executive directors, must be kept • Dr Lee Boon Yang competencies of the existing directors
well-informed of the Company’s business Independent Member on the Board
and affairs, and be knowledgeable about • Mr Tow Heng Tan $EOHWRFRPPLWWLPHDQGHIIRUWWRFDUU\
the industry in which the businesses Non-Executive and out duties and responsibilities effectively
operate. The Company has therefore Non-Independent Member 7UDFNUHFRUGRIPDNLQJJRRGGHFLVLRQV
adopted initiatives to put in place processes • Mr Alvin Yeo ([SHULHQFHLQKLJKSHUIRUPLQJ
to ensure that the non-executive directors Independent Member companies
are well supported by accurate, complete • Mr Till Vestring )LQDQFLDOO\OLWHUDWH
and timely information, have unrestricted Independent Member
access to management, and have sufficient Re-nomination of Directors
time and resources to discharge their The responsibilities of the NC are set out on The NC is also charged with the responsibility
oversight function effectively. pages 79 and 80 herein. of re-nomination having regard to the
director’s contribution and performance
These initiatives include regular informal Process for appointment of new (such as attendance, preparedness,
meetings for management to brief the directors and Board succession SDUWLFLSDWLRQDQGFDQGRXU ZLWKUHIHUHQFH
directors on prospective deals and potential planning to the results of the assessment of the
developments at an early stage before The NC is responsible for reviewing the performance of the individual director by
formal board approval is sought, and succession plans for the Board. In this his/her peers.
the circulation of relevant information on regard, it has put in place a formal process
business initiatives, industry developments, for the renewal of the Board and the The directors submit themselves for
and analyst and press commentaries on selection of new directors. The NC leads re-nomination and re-election at regular
matters in relation to the Company or the the process and makes recommendations intervals of at least once every three years.
industries in which it operates. A two- to the Board as follows: Pursuant to the Company’s constitution,
day off-site board strategy meeting is one-third of the directors retire from office
organised annually for in-depth discussion D 1&UHYLHZVDQQXDOO\WKHEDODQFHDQG at the Company’s annual general meeting,
on strategic issues and direction of the diversity of skills, experience, gender and a newly-appointed director must submit
Group, to give the non-executive directors and knowledge required by the Board himself/herself for re-election at the annual
a better understanding of the Group and its and the size of the Board which would general meeting immediately following his/
businesses, and to provide an opportunity facilitate decision making. her appointment.
67Governance & Sustainability
Corporate Governance
Annual Review of Board Committees Director” is a person who, at the request )RUPDO3URFHVVDQG3HUIRUPDQFH&ULWHULD
Composition of KCL, acts as director (whether executive The evaluation processes and performance
The NC reviews the composition of the RUQRQH[HFXWLYH RQWKHERDUGRIDQRWKHU criteria are disclosed in the Appendix to
board committees on an annual basis to FRPSDQ\RUHQWLW\ ŕ,QYHVWHH&RPSDQ\Ŗ this report.
ensure that they comprise members with to oversee and monitor the activities of
the necessary qualifications and skills to the relevant Investee Company so as to Objectives and Benefits: The board
discharge their responsibilities effectively. safeguard KCL’s investment in the company. assessment exercise provides an
opportunity to obtain constructive feedback
Annual Review of Directors’ The purpose of the policy is to highlight from each director on whether the Board’s
Independence certain obligations of a person while acting procedures and processes allow him/
The NC is also charged with determining in his/her capacity as a Nominee Director. her to discharge his/her duties effectively
the “independence” status of the directors The policy also sets out the internal process and the changes which should be made
annually. Please refer to page 66 herein on for the appointment and resignation of to enhance the effectiveness of the Board
the basis of the NC’s determination as to a Nominee Director. The policy would be and/or board committees. The assessment
whether a director should or should not be reviewed and amended as required to take exercise also helps the directors to focus
deemed independent. into account current best practices and on their key responsibilities. The individual
changes in the law and stock exchange director assessment exercise allows for peer
Annual Review of Directors’ requirements. review, with a view to raising the quality
Time Commitments of board members. It also assists the NC
The NC has adopted internal guidelines Key Information Regarding Directors in determining whether to re-nominate
addressing competing time commitments The following key information regarding directors who are due for retirement at
that are faced when directors serve on directors is set out in the following pages the next annual general meeting, and in
multiple boards and/or have other principal of this Annual Report: determining whether directors with multiple
commitments. board representations are nevertheless able
Pages 20 to 23: Academic and professional to and have adequately discharged their
The NC determines annually whether a qualifications, board committees duties as directors of the Company.
director with other listed company board VHUYHGRQ DVDPHPEHURU&KDLUPDQ
representations and/or other principal date of first appointment as director, Access to Information
commitments is able to and has been date of last re-election as director, Principle 6:
adequately carrying out his/her duties as a directorships or chairmanships both Board members to have complete, adequate
director of the Company. The NC takes into present and past held over the preceding and timely information
account the results of the assessment of five years in other listed companies and
the effectiveness of the individual director, other major appointments, whether As a general rule, board papers are
the level of commitment required of the appointment is executive or non-executive, required to be distributed to the directors at
director’s other principal commitments, whether considered by the NC to be least seven days before the board meeting
and the respective directors’ actual conduct independent; and so that the members may better understand
and participation on the Board and board the matters prior to the board meeting and
committees, including availability and Pages 103 to 104: Shareholding in the discussion may be focused on questions
attendance at regular scheduled meetings Company and its subsidiaries. that the directors may have. Directors are
and ad-hoc meetings, in making this provided with tablet devices to enable
determination. Board Performance them to access and read the board papers.
Principle 5: However, sensitive matters may be tabled
In respect of FY 2017, the NC was of the view Formal assessment of the effectiveness of at the meeting itself or discussed without
that each director has given sufficient time the Board and Board Committees and the any papers being distributed. Managers
and attention to the affairs of the Company contribution by each director to the effectiveness who can provide additional insights into the
and has been able to discharge his/her of the Board matters at hand would be present at the
duties as director effectively. The NC noted relevant time during the board meeting.
that based on the attendance of board and The Board has implemented formal The directors are also provided with the
board committee meetings during the year, processes for assessing the effectiveness names and contact details of the Company’s
all the directors were able to participate of the Board as a whole and its board senior management and the Company
in at least a substantial number of such committees, the contribution by each Secretaries to facilitate direct access to senior
meetings to carry out their duties. The NC individual director to the effectiveness of management and the Company Secretaries.
also noted that, based on the Independent the Board, as well as the effectiveness of
Co-ordinator’s Report on individual director the Chairman of the Board. The Company fully recognises that
assessment for FY 2017, all the directors the flow of relevant information on an
performed well. The NC was therefore Independent Co-ordinator: To ensure accurate and timely basis is critical for
satisfied that in FY 2017, where a director had that the assessments are done promptly the Board to be effective in the discharge
other listed company board representations and fairly, the Board has appointed an of its duties. Management is therefore
and/or other principal commitments, the independent third party (the “Independent expected to provide the Board with accurate
director was able and had been adequately &RRUGLQDWRUŖ WRDVVLVWLQFROODWLQJDQG information in a timely manner concerning
carrying out his/her duties as a director analysing the returns of the board members. the Company’s progress or shortcomings
of the Company. Mrs Fang Ai Lian, former Chairman, Ernst & in meeting its strategic business objectives
Young and Great Eastern Holdings Ltd, and or financial targets, and other information
Nominee Director Policy currently Advisor to Far East Organisation, relevant to the strategic issues facing
At the recommendation of the NC, the was appointed for this role. Mrs Fang Ai Lian the Company.
Board approved the adoption of the KCL does not have business relationships or any
Nominee Director Policy in January 2009. other connections with the Company which Management also provides the Board
For the purposes of the policy, a “Nominee may affect her independent judgment. members with management accounts
68Keppel Corporation Limited | Report to Shareholders 2017
on a monthly basis and as the Board may Remuneration Committee fee for services performed on board
require from time to time. Such reports 7KH5HPXQHUDWLRQ&RPPLWWHH 5& committees. The Chairman of each
keep the Board informed, on a balanced comprises entirely non-executive directors, board committee is also paid a higher
and understandable basis, of the Group’s three out of four of whom (including the fee compared with the members of the
performance, financial position and &KDLUPDQ DUHLQGHSHQGHQW QDPHO\ respective committees in view of the greater
prospects. responsibility carried by that office. The
• Mr Till Vestring non-executive directors participated
The Company Secretaries administer, Independent Chairman in additional ad-hoc meetings with
attend and prepare minutes of board • Dr Lee Boon Yang management during the year and are not
proceedings. They assist the Chairman Independent Member paid for attending such meetings. Executive
to ensure that board procedures (including • Mr Danny Teoh directors are not paid directors’ fees.
but not limited to assisting the Chairman Independent Member
to ensure timely and good information flow • Mr Tow Heng Tan The RC, in consultation with Aon Hewitt,
to the Board and board committees, Non-Executive and conducted a review of the non-executive
and between senior management and Non-Independent Member directors’ fee structure in 2017. The review
the non-executive directors, and facilitating took into account a variety of factors,
orientation and assisting in the professional The RC is responsible for ensuring a formal including prevailing market practices and
GHYHORSPHQWRIWKHGLUHFWRUV DUHIROORZHG and transparent procedure for developing referencing directors’ fees against comparable
and regularly reviewed to ensure effective policy on executive remuneration and for EHQFKPDUNV ORFDOO\DQGLQWKHUHJLRQ DV
functioning of the Board, and that the determining the remuneration packages of well as the roles and responsibilities of the
Company’s constitution and relevant rules individual directors and senior management. Board and board committees. Recognising
and regulations, including requirements The RC assists the Board to ensure that that directors have ongoing oversight
of the Companies Act, Securities & Futures remuneration policies and practices are responsibilities towards the Company,
Act and Listing Manual of the Singapore sound in that they are able to attract, retain a revised directors’ fee structure was
([FKDQJH6HFXULWLHV7UDGLQJ/LPLWHG ŕ6*;Ŗ and motivate without being excessive, and developed, comprising only basic fees for
are complied with. They also assist the thereby maximise shareholder value. The RC the Board, as well as additional fees for
Chairman and the Board to implement recommends to the Board for endorsement a services performed on board committees.
and strengthen corporate governance framework of remuneration (which covers all Attendance fees were removed from the
practices and processes with a view to aspects of remuneration including directors’ non-executive directors’ fee structure from
enhancing long-term shareholder value. fees, salaries, allowances, bonuses, grant of 2017 onwards. The 2017 total fees for
They are also the primary channel of VKDUHVDQGEHQHILWVLQNLQG DQGWKHVSHFLILF non-executive directors are lower than
communication between the Company remuneration packages for each director 2016’s total fees (before the 10% voluntary
and the SGX. and the key management personnel. The IHHUHGXFWLRQDJUHHGWRLQ
RC also reviews the remuneration of senior
The appointment and removal of the management and administers the KCL Share The directors’ fee structure is set out in
Company Secretaries are subject to Option Scheme in respect of the outstanding Table 2 on page 70 of this report.
the approval of the Board. options granted prior to the termination of
the KCL Share Option Scheme in 2010, the Each of the non-executive directors
Subject to the approval of the Chairman, the .&/5HVWULFWHG6KDUH3ODQ WKHŕ.&/563Ŗ LQFOXGLQJWKH&KDLUPDQ ZLOOUHFHLYH
directors, whether as a group or individually, and the KCL Performance Share Plan of his/her total directors’ fees in cash
may seek and obtain independent WKHŕ.&/363Ŗ ,QDGGLWLRQWKH5&UHYLHZV ŕ&DVK&RPSRQHQWŖ DQGLQWKHIRUP
professional advice to assist them in their the Company’s obligations arising in the RI.&/VKDUHV ŕ5HPXQHUDWLRQ6KDUHVŖ ERWK
duties, at the expense of the Company. event of termination of the executive amounts subject to adjustment as described
directors’ and key management personnel’s EHORZ 7KHDFWXDOQXPEHURI5HPXQHUDWLRQ
Remuneration Matters contract of service, to ensure that such Shares, to be purchased from the market
Principle 7: contracts of service contain fair and on the first trading day immediately after
The procedure for developing policy on reasonable termination clauses which are the date of the Annual General Meeting
executive remuneration and for fixing not overly generous. ŕ7UDGLQJ'D\Ŗ IRUGHOLYHU\WRWKHUHVSHFWLYH
remuneration packages of individual directors non-executive directors, will be based on
should be formal and transparent The RC has access to expert advice from the market price of the Company’s shares
Principle 8: external remuneration consultants where on the SGX on the Trading Day. The actual
The level and structure of director fees are required. In FY 2017, the RC sought views on number of Remuneration Shares will be
aligned with the long-term interest of the market practice and trends from external rounded down to the nearest thousand
Company and appropriate to attract, retain remuneration consultants, Aon Hewitt. The and any residual balance will be paid in
and motivate directors to provide good RC undertook a review of the independence cash. Such incorporation of an equity
stewardship of the Company and objectivity of the external remuneration component in the total remuneration of
consultants through discussions with the the non-executive directors is intended
The level and structure of key management external remuneration consultants, and has to achieve the objective of aligning the
remuneration are aligned with the long-term confirmed that the external remuneration interests of the non-executive directors with
interest and risk policies of the Company and consultants had no relationships with those of the shareholders’ and the long-term
appropriate to attract, retain and motivate the Company which would affect their interests of the Company. The aggregate
key management to successfully manage independence and objectivity. directors’ fees for non-executive directors
the Company is subject to shareholders’approval at the
Principle 9: Annual Remuneration Report Annual General Meeting. The Chairman
There should be clear disclosure of Policy in respect of Non-Executive and the non-executive directors will abstain
remuneration policy, level and mix of Directors’ Remuneration from voting, and will procure their respective
remuneration, and procedure for setting Each non-executive director’s remuneration associates to abstain from voting in respect
remuneration comprises a basic fee and an additional of this resolution.
69Governance & Sustainability
Corporate Governance
Table 2
Basic Fee (per annum)
Board Chairman ɽɺɸɳɳɳɳ DOOLQ
Board Member ɽɴɳɻɳɳɳ
Additional Fees for Membership in Board Committees (per annum)
Chairman Member
Audit Committee ɽɹɺɳɳɳ ɽɶɹɳɳɳ
Board Risk Committee ɽɹɺɳɳɳ ɽɶɹɳɳɳ
Remuneration Committee ɽɷɺɳɳɳ ɽɶɴɳɳɳ
Board Safety Committee ɽɷɺɳɳɳ ɽɶɴɳɳɳ
Nominating Committee ɽɷɳɳɳɳ ɽɵɷɳɳɳ
Remuneration policy in respect of relevant industry market median. The size of LLL 6WDNHKROGHUV DQG LY 3HRSOH
Executive Directors and other Key the Company's annual performance bonus Some of the key sub-targets within
Management Personnel pot is determined by the Group’s financial each of the scorecard areas include
The Company advocates a performance- and non-financial performance, and is key financial indicators, safety goals,
based remuneration system that is highly distributed to employees based on their risk management, compliance and
flexible and responsive to the market, individual performance. The KCL Share Plans controls measures, corporate social
Company’s, business unit’s and individual are in the form of two share plans approved responsibilities activities, employee
employee’s performance, and is aligned by shareholders, the KCL RSP and the KCL PSP. engagement, talent development
with shareholders’ interests. A portion of the annual performance bonus and succession planning;
is granted in the form of deferred shares that LL 7KHIRXUVFRUHFDUGDUHDVKDYHEHHQ
In designing the remuneration structure, the are awarded under the KCL RSP. The KCL PSP chosen because they support how
RC seeks to ensure that the level and mix of comprises performance targets determined the Group achieves its strategic
remuneration is competitive, relevant and on an annual basis. The KCL RSP and KCL objectives. The framework provides
appropriate in finding a balance between PSP are long-term incentive plans which a link for staff to understand how
current versus long-term remuneration, vest over a longer term horizon. Executives they contribute to each area of the
and between cash versus equity incentive who have a greater ability to influence Group scorecard, and therefore to the
remuneration. outcomes have a greater proportion of their Company’s overall strategic
overall remuneration at risk. goals. This is designed to achieve
In 2016/2017, the RC undertook a a consistent approach and
comprehensive review of the total The RC exercises broad discretion and understanding across the Group.
remuneration structure. With the assistance independent judgement in ensuring that The RC reviews and approves the
of Aon Hewitt, the RC revised the total the amount and mix of remuneration is scorecard annually;
remuneration structure to reflect the aligned with the interests of shareholders F E\VHOHFWLQJSHUIRUPDQFHFRQGLWLRQV
following four key objectives: and promotes the long-term success of the for the KCL PSP awards, such as Total
Company. The mix of fixed and variable Shareholder Return, Return on Capital
D 6KDUHKROGHU$OLJQPHQW 7RLQFRUSRUDWH reward is considered appropriate for the Employed and Net Profit that are
performance measures that are aligned Group and for each individual role. aligned with shareholder interests;
to shareholders’ interests G E\UHTXLULQJWKRVH.3,VRUFRQGLWLRQV
E /RQJWHUP2ULHQWDWLRQ 7RPRWLYDWH The remuneration structure is directly linked to be met in order for the At Risk
employees to drive sustainable to corporate and individual performance, components of remuneration to be
long-term growth both in terms of financial and non-financial awarded or to vest; and
F 6LPSOLFLW\ 7RHQVXUHWKDWWKH performance. This link is achieved in the H E\IRUIHLWLQJWKH$W5LVNFRPSRQHQWV
remuneration structure is easy to following ways: of remuneration when those KPIs
understand and communicate to or conditions are not met at a
stakeholders D E\SODFLQJDVLJQLILFDQWSRUWLRQRI satisfactory level.
G 6\QHUJ\ 7RIDFLOLWDWHWDOHQWPRELOLW\ executives’ remuneration at risk
and enhance collaboration across ŕ$W5LVNFRPSRQHQWŖ DQGVXEMHFWWR The RC also recognises the need for a
businesses a vesting schedule; reasonable alignment between risk and
E E\LQFRUSRUDWLQJDSSURSULDWHNH\ remuneration to discourage excessive
The revised total remuneration structure SHUIRUPDQFHLQGLFDWRUV ŕ.3,VŖ IRU risk taking. Therefore, in determining the
comprises three components; that is, annual awarding of annual performance bonus: remuneration structure, the RC had taken into
fixed cash, annual performance bonus, L 7KHUHDUHIRXUVFRUHFDUGDUHDV account the risk policies and risk tolerance
and the KCL Share Plans. The annual fixed that the Company has identified as of the Group as well as the time horizon of
cash component comprises the annual key to measuring the performance risks, and incorporated risk-adjustments into
basic salary plus any other fixed allowances, RIWKH*URXSŝ L )LQDQFLDODQG the remuneration structure through several
which the Company benchmarks with the %XVLQHVV'ULYHUV LL 3URFHVV initiatives, including but not limited to:
70Keppel Corporation Limited | Report to Shareholders 2017
D SUXGHQWIXQGLQJRIDQQXDOSHUIRUPDQFH personnel are remunerated partially in the management and employees. The KCL RSP
bonus; form of shares in the Company and are applies to a broader base of employees
E JUDQWLQJDSRUWLRQRIWKHDQQXDO encouraged to hold such shares while they while the KCL PSP applies to a selected
performance bonus in the form of remain in the employment of the Company. group of key management personnel.
deferred shares, to be awarded under They are also required to hold a minimum The range of performance targets to be set
the KCL RSP; number of shares under the share ownership under the KCL PSP emphasise stretched
F YHVWLQJRIFRQWLQJHQWVKDUHDZDUGV guideline which requires them to maintain a or strategic targets aimed at sustaining
under the KCL PSP being subject to KPIs beneficial ownership stake in the Company, longer-term growth.
and/or performance conditions being thus further aligning their interests with
met; and shareholders. The RC has the discretion not to award
G SRWHQWLDOIRUIHLWXUHRIYDULDEOHLQFHQWLYHV variable incentives in any year if an executive
in any year due to misconduct. The directors, the CEO and the key is directly involved in a material restatement
management personnel (who are not of financial statements, in misconduct
The RC is of the view that the overall level of GLUHFWRUVRUWKH&(2 DUHUHPXQHUDWHGRQDQ resulting in restatement of financial
remuneration is not considered to be at a earned basis and there are no termination, statements, or in misconduct resulting in
level which is likely to promote behaviours retirement and post-employment benefits financial loss to the Company. Outstanding
contrary to the Group’s risk profile. that are granted over and above what has performance bonuses, KCL RSP and KCL PSP
been disclosed. are also subject to RC’s discretion before
In determining the actual quantum of further payment or vesting can occur.
variable component of remuneration, the Long-term Incentive Plans
RC had taken into account the extent to KCL Share Plans Details of the KCL Share Plans are set out on
which the performance conditions, set forth The KCL Share Plans are put in place to pages 104 to 106 and 134 to 136.
above, have been met. The RC is therefore increase the Group’s effectiveness in its
of the view that remuneration is aligned to continuing efforts to reward, retain and Level and mix of remuneration of
performance during FY 2017. motivate employees to achieve superior Directors and Key Management
performance and to motivate them to Personnel (who are not also Directors
In order to align the interests of the continue to strive for long-term shareholder or the CEO) for the year ended
executive director and key management value. The KCL Share Plans also aim to 31 December 2017
personnel with that of shareholders, the strengthen the Group’s competitiveness in The level and mix of each of the directors’
executive director and key management attracting and retaining talented key senior remuneration are set out below:
Base/Fixed Performance-Related Benefits- Contingent Total
Salary Cash Bonuses Earnedɴ Directors’ Total Feesɵ in-Kind awards of sharesɶ Remuneration
ɽ ɽ ɽ ɽ ɽ ɽ
Cash Shares
componentɷ componentɷ PSP RSP
5HPXQHUDWLRQ
1DPHRI'LUHFWRU
Loh Chin Huaɸ ɴɳɻɵɷɹɳ ɴɺɸɹɸɹɺ – – n.m.ɹ ɴɺɵɵɹɳɳ ɵɴɴɶɷɸɵ ɹɹɺɸɳɺɼɺ
Lee Boon Yang – – ɸɵɸɳɳɳ ɵɵɸɳɳɳ – – – ɺɸɳɳɳɳ
Tow Heng Tan – – ɴɶɼɶɳɳ ɸɼɺɳɳ – – – ɴɼɼɳɳɳ
Alvin Yeo Khirn Hai – – ɴɴɺɹɳɳ ɸɳɷɳɳ – – – ɴɹɻɳɳɳ
Tan Ek Kia – – ɴɸɻɼɳɳ ɹɻɴɳɳ – – – ɵɵɺɳɳɳ
Danny Teoh – – ɴɹɼɷɳɳ ɺɵɹɳɳ – – – ɵɷɵɳɳɳ
Tan Puay Chiang – – ɴɸɳɸɳɳ ɹɷɸɳɳ – – – ɵɴɸɳɳɳ
Till Vestring – – ɴɵɸɶɳɳ ɸɶɺɳɳ – – – ɴɺɼɳɳɳ
Veronica Eng – – ɴɷɺɺɳɳ ɹɶɶɳɳ – – – ɵɴɴɳɳɳ
Notes:
1.
The RC is satisfied that the quantum of performance-related cash bonuses earned by the executive director was fair and appropriate taking into account the extent to
which his KPIs for FY 2017 were met.
2.
7KHGLUHFWRUVŔWRWDOIHHVDPRXQWWR ZKLFKLVORZHUWKDQŔVWRWDOIHHV EHIRUHWKHYROXQWDU\IHHUHGXFWLRQ 7KHGLUHFWRUVŔWRWDOIHHVDUH
subject to shareholders’ approval at the Company’s Annual General Meeting.
3.
Shares awarded under the KCL PSP are subject to pre-determined performance targets over a three-year performance period. As at 28 April 2017, being the grant date for
the contingent awards under the KCL PSP, the estimated value of each share was $5.22. As at 23 February 2018, being the grant date for the contingent deferred shares
award under the KCL RSP, the estimated value of each share was $7.76. For the KCL PSP, the figures are based on the value of the PSP shares at 100% of the award and the
figures may not be indicative of the actual value at vesting which can range from 0% to 150% of the award.
4.
The amounts stated may be adjusted as indicated on pages 69 to 70 of this report.
5.
Mr Loh Chin Hua’s monthly base salary had been reduced by 10% with effect from 1 October 2016.
6.
n.m. – not material
7.
Total remuneration shown above for Mr Loh Chin Hua does not include vested share of carried interests for funds created during the time he was Managing Director at
Alpha Investment Partners. These carried interests are only earned at the end of the fund life and depends entirely on the actual performance of the funds after they have
been liquidated.
71Governance & Sustainability
Corporate Governance
PSP and RSP Shares granted and vested for the Executive Director are shown below:
Contingent Value of Contingent Value of
Awards Number of PSP Shares Awards Number of RSP Shares
PSP Vesting of PSP PSP Shares Vested RSP Vesting of RSP RSP Shares Vested
Awards Date Shares Vested ɽɻ Awards Date Shares Vested ɽɻ
1DPHRI([HFXWLYH
Director
Loh Chin Hua ɵɳɴɷ ɵɻ)HE ɳWR ɳ ɳ ɵɳɴɷ ɵɺ)HEɵɳɴɸ ɴɸɳɳɳɳ ɸɳɳɳɳ ɷɶɻɳɳɳ
Awards ɵɳɴɺ ɵɺɳɳɳɳ Awards ɵɹ)HEɵɳɴɹ ɸɳɳɳɳ ɵɹɸɸɳɳ
ɼ0DUɵɳɴɺ ɸɳɳɳɳ ɶɶɺɸɳɳ
ɵɳɴɸ ɵɻ)HE ɳWR – – ɵɳɴɸ ɵɹ)HEɵɳɴɹ ɴɸɳɳɳɳ ɸɳɳɳɳ ɵɹɸɸɳɳ
Awards ɵɳɴɻ ɶɶɳɳɳɳ Awards ɼ0DUɵɳɴɺ ɸɳɳɳɳ ɶɶɺɸɳɳ
ɵɻ)HEɵɳɴɻ – –
ɵɳɴɹ ɵɻ)HE ɳWRɼ – – ɵɳɴɹ ɼ0DUɵɳɴɺ ɴɻɳɳɳɳ ɹɳɳɳɳ ɷɳɸɳɳɳ
Awards ɵɳɴɼ ɷɸɳɳɳɳ Awards ɵɻ)HEɵɳɴɻ – –
ɵɻ)HEɵɳɴɼ – –
ɵɻ)HE ɳWRɴɳ
ɵɳɵɵ ɴɴɵɸɳɳɳ
ɵɳɴɺ ɵɻ)HE ɳWR – – ɵɳɴɻ ɵɻ)HEɵɳɴɻ ɵɺɵɶɸɵ – –
Awards ɵɳɵɳ ɷɼɸɳɳɳ Awards ɵɻ)HEɵɳɴɼ – –
ɵɻ)HEɵɳɵɳ – –
Notes:
8.
The value of the shares vested under KCL PSP and RSP is computed based on the market price of the shares when the shares are credited to the employee’s CDP account.
The RC is satisfied that the value of the shares vested under the KCL PSP and RSP to the executive director was fair and appropriate taking into account the extent to which
his KPIs and performance conditions for FY 2017 were met.
9.
Refers to contingent shares awarded under the KCL PSP.
10.
Refers to one-time contingent shares awarded under the KCL PSP – TIP.
7KHWRWDOUHPXQHUDWLRQSDLGWRWKHNH\PDQDJHPHQWSHUVRQQHO ZKRDUHQRWGLUHFWRUVRUWKH&(2 LQ)Keppel Corporation Limited | Report to Shareholders 2017
Remuneration of employees who The Board, supported by the Audit The AC met with the external auditors five
are immediate family members of a &RPPLWWHH $& DQG%RDUG5LVN&RPPLWWHH times, and with the internal auditors five
Director or the Chief Executive Officer %5& RYHUVHHVWKH&RPSDQ\ŔV.HSSHOŔV times during the year, and at least one of
No employee of the Company and its System of Management Controls Framework these meetings was conducted without the
subsidiaries was an immediate family WKHŕ)UDPHZRUNŖ ZKLFKRXWOLQHVWKH presence of management.
member of a director or the CEO and whose Company’s internal control and risk
remuneration exceeded $50,000 during management processes and procedures The AC reviewed and approved the Group
the financial year ended 31 December 2017. to, among others, ensure compliance with internal auditor’s plan to ensure that
“Immediate family member” means the legislative and regulatory requirements. the risk-based plan sufficiently covered
spouse, child, adopted child, step-child, Details of the Framework are set out on the effectiveness of controls to mitigate
brother, sister and parent. pages 74 and 75 of this Annual Report. the significant risks of the Company.
Such significant controls comprise
Details of the KCL Share Plans Audit Committee financial, operational, compliance and IT
The KCL Share Plans, which have been The AC comprises the following non-executive controls. All significant audit findings and
approved by shareholders of the Company, directors, all of whom are independent: recommendations put up by the internal
are administered by the RC. Please refer to and the external auditors were forwarded
pages 104 to 106 and 134 to 136 of this Annual • Mr Danny Teoh to the AC, and discussed at AC meetings.
Report for details on the KCL Share Plans. Independent Chairman
• Mr Alvin Yeo The AC also reviewed and approved the
Accountability and Audit Independent Member Group external auditor’s audit plan for the
Principle 10: • Ms Veronica Eng year. The AC also undertook a review of
The Board should present a balanced and Independent Member the independence and objectivity of the
understandable assessment of the Company’s • Mr Tan Ek Kia external auditors through discussions with
performance, position and prospects Independent Member the external auditors, as well as reviewing
Principle 12: the non-audit fees awarded to them, and
Establishment of Audit Committee with Mr Danny Teoh and Ms Veronica Eng have has confirmed that the non-audit services
written terms of reference recent and relevant accounting and related performed by the external auditors would
financial management expertise and in- not affect their independence. For details
The Board is responsible for providing a depth experience. Mr Alvin Yeo has in-depth of fees payable to the auditors in respect of
balanced and understandable assessment knowledge of the responsibilities of the AC, audit and non-audit services, please refer
of the Company’s and Group’s performance, and practical experience and knowledge to Note 24 of the Notes to the Financial
position and prospects, including interim of the issues and considerations affecting Statements on page 155.
and other price sensitive public reports, and the Committee from serving on the audit
UHSRUWVWRUHJXODWRUV LIUHTXLUHG committee of other listed companies. Mr The Company has complied with Rules 712,
Tan Ek Kia, who is a seasoned executive and Rule 715 read with 716 of the SGX Listing
The Board has embraced openness in the oil and gas and petrochemicals Manual in relation to its auditing firms.
and transparency in the conduct of the businesses and had held senior positions in
Company’s affairs, whilst preserving the Shell, has sufficient financial management The AC also reviewed the adequacy of
commercial interests of the Company. knowledge and experience to discharge the internal audit function and is satisfied
Financial reports and other price his responsibilities as a member of the that the team is adequately resourced
sensitive information are disseminated to Committee. Mr Danny Teoh, Mr Tan Ek Kia and has appropriate standing within the
shareholders through announcements via and Ms Veronica Eng are also members Company. The internal audit team attends
SGXNET, press releases, the Company’s of BRC, with Ms Veronica Eng being the the Company’s and the Group’s key strategy
website, public webcast and media and Chairman of the BRC. sessions and executive meetings, and is
analyst briefings. staffed with professionals with sufficient
None of the members of the AC were partners expertise in corporate governance, risk
The Company’s Annual Report is accessible or directors of the Company’s existing management, internal controls, and other
on the Company’s website, and can be external auditors within the last 12 months relevant disciplines. The AC also reviewed
viewed or downloaded from the Annual and none of the members of the AC hold the training costs and programs attended by
Report microsite at www.kepcorp. any financial interest in the auditing firm. the internal audit team to ensure that their
com/annualreport2017/. In line with the technical knowledge and skill sets remain
Company’s drive towards sustainable The AC’s primary role is to assist the Board current and relevant.
development, the Company encourages to ensure integrity of financial reporting and
shareholders to read the Annual Report that there is in place sound internal control The AC has reviewed the “Keppel Whistle-
on the Company’s website. Shareholders systems. The Committee’s responsibilities %ORZHU3ROLF\Ŗ WKHŕ3ROLF\Ŗ ZKLFKSURYLGHV
may, however, request for a physical copy are set out on page 79 herein. for the mechanisms by which employees
at no cost. and other persons may, in confidence, raise
The AC has explicit authority to investigate concerns about possible improprieties
Management provides all members of the any matter within its responsibilities, full in business conduct, and was satisfied
Board with management accounts which access to and co-operation by management that arrangements are in place for the
present a balanced and understandable and full discretion to invite any director or independent investigation of such matters
assessment of the Company’s and Group’s executive officer to attend its meetings, and and for appropriate follow-up action. To
performance, position and prospects on reasonable resources (including access to facilitate the management of incidences
a monthly basis and as the Board may H[WHUQDOFRQVXOWDQWV WRHQDEOHLWWRGLVFKDUJH of alleged fraud or other misconduct,
require from time to time. Such reports its functions properly. The Company has an the AC is guided by a set of guidelines to
keep the board members informed of the internal audit team, which together with the ensure proper conduct of investigations
Company’s and Group’s performance, external auditors, report their findings and and appropriate closure actions following
position and prospects. recommendations to the AC independently. completion of the investigations, including
73You can also read
