The focus of the Plan is principally to target selected management in key positions who are able to drive the growth of the Company
through creativity, firm leadership and excellent performance. The Company believes that it will be more effective than merely having
pure cash bonuses in place to motivate executives to work towards determined goals. The Awards given to a particular Participant under
the Plan and the number of Plan Shares will be determined at the discretion of the RC, who will take into account factors such as the
Participant’s capability, scope of responsibility and skill. In deciding on an Award to be granted to a Participant, the RC will also consider
the compensation and/or benefits to be given to the Participant under the Scheme and other share-based incentive schemes of the
Company, if any. The RC may also set specific criteria and Performance Conditions for each different department, taking into account
factors such as (i) the Group’s business goals and directions for each financial year; (ii) the Participant’s actual job scope and duties;
and (iii) the prevailing economic conditions.
In contrast, the Scheme is meant to be more of a “loyalty” driven time-based incentive program. The Scheme will be available to Directors
and the employees and will function as a generic share-based incentive scheme. In any event, the aggregate number of Plan Shares
and the Scheme Shares will be subject to the maximum limit of fifteen percent (15%) of the Company’s total issued share capital. As the
Scheme and the Plan are valid for a period of 10 years, this maximum limit of 15% of the Company’s total issued share capital allows for
a potential increase in the number of employees as our Company expands in the future.
Each of the Scheme and the Plan shall continue in force at the discretion of the RC subject to a maximum period of 10 years commencing
on the date it is adopted by the Company in general meeting, provided always that it may continue beyond the above stipulated period
with the approval of Shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.
The Company has not granted any Options or Awards since the date of approval of the Scheme and Plan. Accordingly, the disclosure
requirements under Rule 852(1)(b), (c) and (d) of the SGX-ST Listing Manual are not applicable.
Accountability And Audit
Accountability
Principle 10:
The Board should present a balanced and understandable assessment of the Company’s performance, position and prospects.
The Management will provide the members of the Board with management reports regularly. Such reports will keep the Board updated
as well as enable the members to have a balanced and objective assessment of the Group’s performance, position and prospects. The
Management will also assist the Board to provide the Shareholders with a balanced and understandable assessment of the Group’s
performance, financial position and prospects via the issuance of the Company’s annual reports and quarterly announcements of its
financial results and disclosure of other relevant information of the Group.
Risk Management And Internal Controls
Audit Committee
Principle 11:
The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of
risk management and internal controls to safeguard shareholders’ interests and the company’s assets, and should determine the
nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.
Principle 12:
The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.
The ARMC (Audit Committee was renamed to Audit and Risk Management Committee in 2012) comprises the following members, all of
whom are Independent and Non-Executive Directors:
Koh Lian Huat
Chairman and Lead Independent Director
Khor Poh Hwa
Member and Independent Director
Ong Seh Hong
Member and Independent Director
CORPORATE GOVERNANCE REPORT
Hock Lian Seng Holdings Limited
Annual report 2014
22
