Hanwell Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Hanwell Group”) place great importance on high standard of corporate conduct to uphold good corporate governance. This commitment and continuous support of the Code of Corporate Governance which was revised in May 2012 (the “Code”) can be seen from the Hanwell Group efforts to promote and maintain values which emphasize transparency, accountability, integrity and proper conduct at all times in the business operations and dealings of the Hanwell Group so as to create value for its stakeholders and safeguard Hanwell Group’s assets.
The Board of Directors
The Company is headed by an effective Board of Directors (the “Board”), comprising individuals with diversified backgrounds and who collectively brings with them a wide range of experience, to lead and control Hanwell Group. The Board has established 4 Board Committees consist of Audit Committee, Nominating Committee, Remuneration Committee and Risk Management Committee which their function is defined within the respective terms of reference.
The Board of the Company consists of 9 members comprising the Executive Chairman, 1 Executive Director, 3 Independent Directors and 4 Non-Executive Directors. All Directors exercise independent judgement and make decisions objectively in the best interest of the Company.
The Board’s primary role is to protect and enhance long-term shareholder value. Apart from their statutory responsibilities, the Board performs the following roles and functions:-
providing entrepreneurial leadership, sets strategic directions and objectives for the Group;
approving major funding proposals, investment and divestment proposals of the Company;
reviewing the performance of management by establishing management’s goals and monitoring the achievement of those goals;
reviewing and endorsing the framework of remuneration for the Board and key management personnel as may be recommended by the Remuneration Committee;
supervising executive management, ensures that the Company has the necessary resources to meet its goals and establish a framework of prudent and effective controls to assess and manage risks;
overseeing the processes of risk management, financial reporting and compliance and evaluates the adequacy of internal controls;
considering sustainability issues, such as environmental and social factors, as and when necessary, as part of its strategic formulation; and
assuming the responsibilities or corporate governance
The Board has 3 Independent Directors, representing at least one-third of the Board, the criteria for independence are based on the definition given in the Code. Each Independent Director is required to complete a Director’s Independence Checklist annually to confirm his independence based on the guidelines as set out in the Code.
The Board will meet on a quarterly basis and ad-hoc Board meetings will be convened when they are deemed necessary so as to review Hanwell Group’s business operations, conduct strategic review of the business affairs and address other specific significant matters that arise.
The Board also has separate and independent access to the advice and services of the Company Secretary and management of the Company (the “Management”) at all times.
The Audit Committee
The Audit Committee (the “AC”) comprises 4 members, all of whom are Non-Executive Directors and the majority of whom, including the Chairman, are independent. The AC’s main objective is to assist the Board in fulfilling its fiduciary responsibilities relating to internal controls, overseeing the external audit process, reviewing the financial information to be disclosed to the public and ensuring that arrangements are in place for the independent investigation and follow up of reports by staff of improprieties in financial reporting and other matters. To achieve this, the AC ensures that its members have the appropriate qualifications to provide independent, objective and effective oversight.
The AC meets from time to time with Hanwell Group’s external and internal auditors and the executive management to review accounting, auditing and financial reporting matters so as to provide the necessary checks and balances to ensure that an effective control environment is maintained in Hanwell Group.
The AC has explicit authority to investigate any matter within its terms of reference and has full access to and co-operation of Management and full discretion to invite any Director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly.
The AC also meets annually with the internal auditors and the external auditors, without the presence of the Company’s Management to review the adequacy of audit arrangements, with particular emphasis on the scope and quality of their audits, and the independence and objectivity of the internal and external auditors.
The Remuneration Committee
The Remuneration Committee (the “RC”) comprises solely of Non-Executive Directors, the majority of whom, including the Chairman, are independent. The RC members are knowledgeable in the field of executive compensation and also have access to independent expert advice from external consultants, when necessary.
The RC is responsible to assists the Board in reviewing and recommending to the Board a framework of remuneration for the Board and key management personnel in the interests of improved corporate performance.
The RC’s review of remuneration packages of the Board and key management personnel by taking into account the Company relative performance and long term interests of Hanwell Group, and ensure that the interests of the Directors align with that of the shareholders. The RC also review the length of the fixed appointment period, the notice period for termination the terms of the compensation package and other terms of the service agreements of the executive directors of the Company to ensure that the terms are not onerous to the Company.
The Executive Directors of the Company do not receive Director’s fees. The remuneration packages of the Executive Directors and key management personnel comprise primarily a basis salary component and variable component which is the bonuses and other benefits. The RC is of the view that the variable component of the remuneration packages of the Executive Directors and key management personnel are moderate. At present, there is no necessity for the Company to institute contractual provisions in the service agreements or employment agreements to reclaim incentive components of remuneration paid in prior years from the Executive Directors and key management personnel in exceptional circumstances of misstatement of financial statements, or of misconduct resulting in financial loss to the Company.
The existing Hanwell Executives’ Share Option Scheme (“Scheme”) granted 8 July 2003 has expired on 8 July 2013. However the expiry of the Scheme will not affect any option granted and duly accepted but not yet exercised, whether in whole or in party by the Directors or the employees of the Group of the Company. The RC will explore a suitable incentive plan/scheme as and when it deems necessary.
In compliance with the Code, the Company has provide full disclosure of the compensation of Directors, remuneration of employees related to Directors and remuneration of top 5 key management personnel of the Company.
The RC meets at least once a year and at other times as required.
The Nominating Committee
The Nominating Committee (the “NC”) comprises 3 members, the majority of whom, including the Chairman, are independent. The NC Chairman is also a Director who has no relationship with the Company and its related corporations, its 10% shareholders or its officer and is not directly associated with a 10% shareholder.
The NC is responsible for reviewing the Board structure, size and composition having regard to the scope and nature of the operations and the core competencies of the directors as a group and other duties and obligations within its terms of reference. The NC is also responsible to determine the independence of Directors annually by taking into account the circumstances set forth in Guidelines 2.3 and 2.4 of the Code and any other salient factors.
A retiring Director is eligible for re-election by the shareholders of the Company at the AGM in accordance to the Company’s Articles of Association, and prior to nominating a retiring Director for re-election the NC will evaluate the Director’s contribution and performance. The Board and NC had developed a process of evaluation of performance of the Board and Board Committees, and Directors through establishment of quantifiable performance criteria.
The NC meets at least once a year and at other times as required.
Accountability and Audit
The Board aims to provide the shareholders with a balanced and understandable assessment of the Company’s and Hanwell Group’s performance, position and prospects.
In line with the SGX Listing Rules, the Board provides a negative assurance statement to the shareholders in respect of the interim financial statements. For the financial year under review, the Executive Director and Group Financial Controller have provided assurance to the Board on the integrity of Hanwell Group’s financial statements.
The Board provides to shareholders, on a quarterly basis, the financial statements of the Company and Hanwell Group for the first, second and third quarters of the year and for the full year, as applicable, together with a balanced review of the Company’s performance, position and prospects.
The Management provides to the Board with financial updates on the performance and position of the group to keep Board members informed and updated on a monthly basis in order that it may effectively discharge its duties. The Board is also updated from time to time on any significant events that have occurred or material to Hanwell Group during the year.
Risk Management and Internal Controls
The Board recognises that it is responsible for the overall risk management and internal controls framework, but acknowledges that no cost effective risk management and internal controls system will preclude all errors and irregularities, as the system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Company has in place a Risk Management Committee which is chaired by an Independent Director and members comprising an Executive Director and Management to assist to the Board in its oversight of risk governance and risk management of Hanwell Group. The Risk Management Committee performs its functions in accordance to the terms of reference.
The Group has introduced and implemented various new policies namely (i) Business Continuity Policy, (ii) Succession Planning Policy and (iii) Investment Policies in relation to the Financial Assets Investments and Strategic Investment for the Company.
An Enterprise Risk Management programme has been implemented to identify, prioritise, assess, manage and monitor key risks. The risk management process in place covers, inter alia, financial, operational and compliance risks faced by Hanwell Group. To ensure that risk management and internal controls processes are adequate and effective, the AC has access to independent professional service providers. The assistance of the internal and external auditors also enabled the AC to carry out assessments of the effectiveness of key internal controls during year.
Any material non-compliance or weakness in internal controls or recommendations from the internal and external auditors to further improve the internal controls was reported to AC. The AC and Risk Management Committee will follow-up on the actions taken by the Management on the recommendations made by the internal and external auditors.
Hanwell Group has adopted a constructive whistle-blowing policy and guideline in order to detect and deter any fraud or deliberate error in the preparation, evaluation, review or audit of any financial statements, financial reports and records of the Company.
Demonstrating its pledge to good corporate governance, Hanwell Group provides an avenue for employees to raise their concerns to report any possible improprieties in matters of financial reporting or other matters that they may encounter to the AC or any other committees established by the AC for such purpose without fear of reprisal. The establishment of the whistle-blowing structure also augments Hanwell Group’s ability to detect potential fraud, providing another level of comfort and assurance to investors.
Hanwell Group has an in-house internal audit function (“Internal Audit”) that is independent of the activities it audits. The Internal Audit serves to provide the Board and Management with an independent appraisal of the reliability, adequacy and effectiveness of the internal controls established by Management. Its aim is to promote internal control in Hanwell Group and to monitor the performance and effective application of internal audit procedures. It supports the Directors in assessing key internal controls through a structured review programme.
The Internal Audit reports functionally to the Chairman of the AC. The AC ensures that the Internal Audit has adequate resources and has appropriate standing within the Hanwell Group.
Shareholder Rights and Responsibilities
In line with the continuous disclosure obligations of the Company pursuant to the Listing Manual of SGX-ST, the Company is committed that all shareholders should be equally informed of all major developments of Hanwell Group which would be likely to materially affect the price or value of the Company’s shares.
The Company does not practice selective disclosure as all material and price-sensitive information is released through SGXNET and the Company recognises that regular, effective, timely and fair communication with shareholders is essential to enable its shareholders to make informed decisions about the Company.
The information is disseminated to shareholders of the Company on a timely basis through:
annual reports that are prepared and sent to all shareholders. The Board ensures that the annual report includes all relevant information about the Company and Hanwell Group, including future developments and other disclosures required by the Singapore Companies Act and Singapore Financial Reporting Standards;
quarterly announcements containing a summary of the financial information and affairs of Hanwell Group for that period;
notices of and explanatory memoranda for AGMs and Extraordinary General Meetings;
press releases on major developments of the Company and Hanwell Group;
disclosure to the SGX-ST; and
the Company’s website at http://www.hanwell.com.sg at which our shareholders can access information on the Hanwell Group.
The Company firmly believes in high standards of transparent corporate disclosure. Information is communicated to our shareholders on a timely basis.
The Company does not have a fixed policy on payment of dividends at present. The frequency, form, and amount of dividends to be declared depend on the Company’s profit, cash flow, capital requirements for investment and growth, general business conditions and other factors as the Board deems appropriate.
Dealings in Securities
In compliance with Rule 1207(19) of the Listing Manual of the SGX-ST, the Company has adopted its own internal Code of Conduct to provide guidance to all officers of the Company and its subsidiaries with regard to dealings in the Company’s securities.
The Directors and executives of the Company and of the Hanwell Group are advised, and periodically reminded, not to deal in the Company’s shares for the period commencing one month before the Company’s announcement of financial results for the year and for the period of two weeks before the announcement of the Company’s quarterly results during the year (“close window period”). The Company will notify Directors and employees of the commencement date for each close window period.
The Company has also issued a policy on Insider Trading to all employees which sets out the principles of relevant laws relating to insider trading which are applicable at all times.
Directors and executives are also expected to observe insider-trading laws at all times even when dealing with securities within the permitted trading period and they are not to deal in the Company’s securities on short-term considerations.
Interested Person Transactions
The Company is required to comply with the requisite rules under Chapter 9 of the Listing Manual issued by SGX-ST for interested person transactions. To ensure compliance with Chapter 9, the AC meets quarterly to review if the Company will be entering into an interested person transaction in order to ensure that the interested person transactions are carried out on normal commercial terms and will not be prejudicial to the interests of the shareholders.
There is no material contracts entered into between the Company or its subsidiaries during the financial year involving the interests of the Directors or controlling shareholders of the Company.