Statement of General Compliance
Mermaid Maritime Public Company Limited (“Mermaid” or the “Company”) is committed to continually enhancing shareholder value by maintaining high standards of corporate governance, professionalism, integrity and commitment at all levels, underpinned by strong internal controls and risk management systems within the Company and its subsidiaries (the “Group”).
As at 31 December 2016, Mermaid is generally in compliance with the principles and guidelines set out in the Singapore Code of Corporate Governance 2012 (the “Code”). Where there are deviations from the Code, appropriate explanations are provided. Specific disclosure in relation the Code is set forth below:
The Board oversees and manages the Company's business under the control of the resolutions of the shareholders' meeting in good faith and due care for the best interest of the Company.
The key functions of the Board are to:
The number of Board and Board committee meetings held during the financial year ended 31 December 2016, as well as the attendance of every Board member at these meetings, including participation through teleconference, is as follows.
|Type of Meetings|
|Board||Audit Com.||Rem. Com.||Nom. Com.||Exec. Com.||Risk Com.|
|Mr. Prasert Bunsumpun||8/8||-||-||-||6/6||-|
|Mr. Chalermchai Mahagitsiri||8/8||-||-||-||6/6||2/2|
|Dr. Jean Paul Thevenin||8/8||5/5||3/3||8/8||6/6||2/2|
|Mr. Chia Wan Huat Joseph*||5/5||-||-||8/8||6/6||-|
|Mr. Jitender Pal Verma*||2/2||-||-||-||2/3||-|
|Mr. Ng Cher Yan||8/8||5/5||3/3||8/8||-||2/2|
|Dr. Jan Jozef Skorupa||8/8||5/5||3/3||8/8||-||-|
|Mr. Joachim Toh Wen Keong*||1/2||2/2||1/1||3/3||-||-|
|Mr. Tay Yu-Jin*||5/6||-||-||8/8||-||-|
|*||Mr. Chia Wan Huat Joseph resigned as a Director on 28 October 2016 but remains as a member of the Executive Committee.|
|*||Mr. Jitender Pal Verma was appointed as a member of the Executive Committee on 9 August 2016 and as a Director and member of the Nomination Committee on 28 October 2016.|
|*||Mr. Joachim Toh Wen Keong retired as a Director on 26 April 2016. Prior to his retirement, he was the Chairman of the Nomination Committee and a member of the Audit Committee and Remuneration Committee.|
|*||Mr. Tay Yu-Jin was appointed as a Director and member of the Nomination Committee on 26 April 2016.|
Matters Requiring Board Approval
All acquisitions or investments, investments in securities and immovable assets, divestments, funding requests, borrowings and expenditures of the Group with a value equal to or exceeding US Dollars 25 million shall require the approval of the Board. The Executive Committee has the authority to approve such transactions below this threshold, unless they are, due to their nature, deemed to be material, in which case Board approval will be required instead.
Board Orientation and Training
The Company conducts a comprehensive induction to new Directors. This orientation program is conducted by the management of the Company to ensure that they are familiar with the Company's business and governance practices. All Board members are encouraged to receive regular training, particularly on relevant new laws, regulations and changing commercial risks, from time to time, in order to familiar with compliance, essentials of the roles of director and a member of each committee in a listed company. The Company shall be responsible the course fees.
Upon the appointment of any new Director, the Company Secretary, apart from the induction, provides an official letter to clarify the terms of appointment, the Director's roles and the disclosures to the Company towards issues of conflicts of interest and change of shareholding interests, including the Company's policies.
Board Meetings via Electronic Media
Until recently, due to limitation under Thai law, the Company and its Thai-incorporated subsidiaries did not allow for telephonic and video-conferences for its and their Board or shareholder meetings.
As a recent development, the Thailand National Council for Peace and Order announcement issued on 27 June 2014 broadly stated that "any meeting which the law requires to be held" can be conducted via electronic media.
In order for such meetings to be valid, one-third of the meeting quorum must be physically present at the same place where the meeting is held, and all meeting attendees, including those who attend via electronic means, must be in Thailand while the meeting is conducted.
The Department of Business Development (“DBD”) at the Ministry of Commerce (the main authority governing the registration of business entities in Thailand) subsequently decided that the announcement applies to directors and shareholder meetings of companies in Thailand.
This means that conducting meetings via electronic media, as well as the registration of resolutions passed at electronic meetings of directors and shareholders of both private and public limited companies, are now allowed by the DBD. In a Clarification of the DBD dated 23 September B.E. 2559 (A.D. 2016), public limited companies shall be required to amend their Articles of Association if they wish to conduct their meetings via electronic media.
Accordingly, Mermaid, as a public limited company, has started the process to amend its Articles of Association to allow for the conduct of Board and shareholder meetings via telephonic and vide-conferences in accordance with, and subject to any limitations imposed by, applicable laws and regulations in Thailand.
Mermaid's subsidiaries incorporated in Thailand, bring private limited companies, are also now able to conduct Board and shareholder meetings via telephonic and video-conferences pursuant to applicable laws and regulations in Thailand. There is no need to amend their Articles of Associations beforehand as this prerequisite only applies to public limited companies in Thailand.
Furthermore, Mermaid's subsidiaries incorporated in jurisdictions outside Thailand are also able to conduct Board and shareholder meetings via telephonic and video-conferences, to the extent permissible by applicable laws and regulations in such jurisdictions.
The Company acknowledges that the interaction with the communities in which the Company operates and its environmental and social interactions within such communities affect long-term organizational success. The Board takes into relevant consideration environmental and social aspects in its decision making processes alongside financial and governance aspects that are part of its customary and regulatory practice. As at 31 December 2016, the Company has yet to adopt a formal policy on Sustainable Reporting.
Each year, the Nomination Committee reviews and determines periodically whether or not a Director is independent and procure that at least one-third (1/3) for the Board shall comprise of Independent Directors (or such other minimum proportion and criteria as may be specified in the Code from time to time).
As at 31 December 2016, the Board comprises seven (7) Directors including three (3) Independent Directors, three (3) Non-Executive Directors, and one (1) Executive Director.
There are five (5) committees on the Board: the Audit Committee, the Nomination Committee, the Remuneration Committee, the Executive Committee and the Risk Management Committee. The Audit Committee, the Nomination Committee and the Remuneration Committee were all formed on 26 June 2007. The Executive Committee was formed on 26 June 2012. The Risk Management Committee was formed on 18 September 2013. Details of each Board Committee are as follows:
As at 31 December 2016, the Audit Committee comprises one (1) Non-Executive Director, namely Dr. Jean Paul Thevenin, and two (2) Independent Directors, namely Mr. Ng Cher Yan, and Dr. Jan Jozef Skorupa. The Chairman of the Audit Committee was Mr. Ng Cher Yan. The majority of the Audit Committee members, including the Chairman, are Independent Directors.
The Audit Committee is responsible, among other things to:
The Audit Committee takes measures to keep abreast of changes in accounting standards and issues which have a direct impact on the Company's financial statements.
As at 31 December 2016, the Remuneration Committee comprises one (1) Non-Executive Director, namely Dr. Jean Paul Thevenin, and two (2) Independent Directors, namely Mr. Ng Cher Yan, and Dr. Jan Jozef Skorupa.
The Chairman of the Remuneration Committee was Mr. Ng Cher Yan. The majority of the Remuneration Committee members, including the Chairman, are Independent Directors.
The Remuneration Committee is responsible, among other things to:
As at 31 December 2016, the Nomination Committee comprises two (2) Non-Executive Directors, namely, Dr. Jean Paul Thevenin and Mr. Jitender Pal Verma, and three (3) Independent Directors, namely, Mr. Ng Cher Yan, Mr. Tay Yu-Jin, and Dr. Jan Jozef Skorupa. The Chairman of the Nomination Committee was Dr. Jan Jozef Skorupa. He was appointed as Chairman of the Nomination Committee on 26 April 2016.
The Nomination Committee is responsible, among other things to:
As at 31 December 2016, the Executive Committee members were Mr. Prasert Bumsumpun, Mr. Chalermchai Mahagitisiri, Mr. Jitender Pal Verma, Dr. Jean Paul Thevenin and Mr. Chia Wan Huat Joseph. The Chairman of the Executive Committee was Mr. Prasert Bunsumpun. Although Mr. Chia Wan Huat Joseph resigned as a Director on 28 October 2016, he remains a member of the Executive Committee.
The Executive Committee is responsible, among other things to:
Risk Management Committee
As at 31 December 2016, the Risk Management Committee members were Dr. Jean Paul Thevenin, Mr. Ng Cher Yan, Mr. Chalermchai Mahagitsiri, and Mr. Phiboon Buakhunngamcharoen. The Chairman of the Risk Committee was Dr. Jean Paul Thevenin.
The Risk Management Committee is responsible for overseeing risk management standards, practices, and systems, among other things, to:
The Independent Directors have confirmed that they do not have any relationship with the Company, its related companies, its 10 percent shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors' independent business judgment with a view to the best interests of the Company.
None of our Directors has served on our Board beyond nine (9) years from the date of his first appointment.
Board Composition and Size
The composition of the Board is governed by various laws, listing rules, articles and best practise including, but not limited to, the following:
The Nomination Committee reviews the structure, size and composition of the Board and Board committees annually, including the skills and core competencies of its members to ensure an appropriate balance of skills and experience. The Nomination Committee is of the view that the Board is of the appropriate size and with the right mix of skills and experience given the nature and scope of the Group's operations. With majority of the Board comprising Non-Executive Directors and one-third (1/3) of the Board are Independent Directors, there is a strong and independent element on the Board. This is to ensure that there is effective representation for shareholders and issues of strategy, performance and resources are fully disclosed and examined to take into account long-term interest of the shareholders, employees, customers, suppliers and the industry in which the Group conducts its business. The Board is able to exercise objective judgment independently from management and no small group of individuals dominates the decisions of the Board.
The profile of each Director and other relevant information are set out under “the Board of Directors” section of this Annual Report.
Meeting of Directors without Management
The Non-Executive Directors met regularly without the presence of Management.
There is a clear separation of responsibilities between the Chairman and Chief Executive Officer (“CEO”) to ensure an appropriate balance of power, and increased accountability and greater capacity of the Board for independent decision making.
The Executive Chairman and the CEO of Mermaid are not related to each other. The role of the Chairman includes:
The CEO has full executive responsibilities over the business direction and operations of the Group, and is responsible for the execution of the Board's adopted strategies and policies.
The Chairman is not an Independent Director. Pursuant to the Code, where the Chairman is not an Independent Director, Independent Directors should make up at least half (1/2) of the Board. As a transitory measure, additional time has been given to implement the Board changes required to comply with this guidance. The Company therefore has up to its Annual General Meeting of Shareholders (“AGM”) in 2018 to propose to the Shareholders a revised composition of the Board such that Independent Directors should make up at least half (1/2) of the Board.
The Nomination Committee reviews and assesses candidates for directorships before making recommendations to the Board. It also reviews the retirement and re-election of Directors at each AGM under Mermaid's Articles of Association and makes recommendations to the Board.
The Nomination Committee considers that the multiple Board representation held presently by the Directors do not impede their performance in carrying out their duties to the Company. The Nomination Committee has ascertained that for the period under review, the Directors have devoted sufficient time and attention to the Company's affairs.
The Nomination Committee has conducted an annual review of Directors' independence based on the Code's criteria for independence and is of the view that Mr. Ng Cher Yan, Mr. Tay Yu-Jin and Dr. Jan Jozef Skorupa are independent. The Nomination Committee has conducted a formal assessment of the Board's performance as a whole for the financial year ended 31 December 2016.
In the selection and nomination for new Directors, the Nomination Committee taps on the Directors' resources to ensure the potential candidates possess relevant experience and have the caliber to contribute to the Company and its business, having regard to the attributes of the existing Board and the requirements of the Company. The potential candidates will go through a shortlisting process and thereafter, interviews with the shortlisted candidates. Executive recruitment agencies may also be appointed to assist in the search process where necessary. As recommended by the Nomination Committee, a new Director can be appointed by way of Board resolution. There is no alternate director on the Board.
The Chairman of the Nomination Committee, Dr. Jan Jozef Skorupa, was appointed to serve as Lead Independent Director effective 26 April 2016. The Lead Independent Director is available to shareholders where they have concerns and for which contact through the normal channels of the Chairman, the CEO or the Chief Financial Officer has failed to resolve or is inappropriate.
Newly appointed Directors serve an initial term of three (3) years, after which they are considered for re-nomination for another term. Their re-nominations are subject to the recommendations of the Nomination Committee.
The Company's Articles of Association provide that at each AGM of the Company, one-third (1/3) of the Directors for the time being, or, if their numbers is not three or a multiple of three, then the number nearest to but not less than one-third (1/3) are required to retire from office and are eligible for re-election. Retiring Directors are selected on the basis of those who have been longest in office since their last re-election, failing which they shall be selected by agreement.
New Directors appointed in the year are encouraged, but not mandated, to retire and seek re-election by shareholders at the next AGM after their appointment.
On the initiative of the Nomination Committee and in line with past practice, each Director will, on an annual basis, undertake a self-assessment exercise of the performance of the Board as a whole and of himself/herself taking into relevant consideration the roles and responsibilities of Directors pursuant to the Code and the results of the business operations. The results of the self-assessment exercise will be reported to and discussed by the Board and areas for improvement will be noted by the Board and recorded in the minutes.
Based on the reviews by the Nomination Committee, the Board is of the view that the Board and its Board Committees operate effectively and each Director is contributing to the overall effectiveness of the Board.
The Board is provided complete, adequate and timely information prior to the Board Meetings. Board meeting agenda and papers are prepared by the management and circulated to the Board in advance by the Company Secretary on an ongoing basis.
The Directors have separate and independent access to the Company Secretary. The Company Secretary is responsible for supporting the corporate secretarial functions to the Board to ensure the board procedures are followed. He also provides guidance to the Board in relation to the compliance of regulatory requirements to the Company.
The Company Secretary that presided for the year ended 31 December 2016 was appointed since 1 June 2005. The appointment and removal of the Company Secretary should be a matter for the Board as a whole.
With the approval of the Chairman, Director may seek independent professional advice, at the Company's expense, on any matter connected with the discharge of his/her responsibilities as a Director. Copies of this advice must be made available to, and for the benefit of, all Board members, unless the Chairman otherwise agrees.
The Remuneration Committee reviews matters concerning the remuneration of Board members and key executives.
The Remuneration Committee has full authority to engage any external professional advice on matters relating to the remuneration as and when the need arises and expenses of such advice shall be borne by the Company. Where such external professional is appointed, the Company shall disclose the names and firms of the remuneration consultants herein, and include a statement on whether the remuneration consultants have any relationships with the Company that will affect the independence and objectivity of the remuneration consultants.
For the financial year ended 31 December 2016, there were no remuneration consultants engaged by the Company.
The Remuneration Committee establishes a formal and transparent procedure for developing policy on executive remuneration and the remuneration packages of individual Directors of the Company, provided that no Director shall be involved in deciding his own remuneration. The Remuneration Committee shall recommend the framework and propose specific remuneration packages to the Board.
The Group's remuneration policy is to provide remuneration packages which will reward performance and attract, retain and motivate Directors and key executives to run the Group successfully. In setting the remuneration packages, the Remuneration Committee takes into consideration the pay and employment conditions within the same industry and in comparable companies, the Group's and the individual's performance.
The Non-Executive Directors and Independent Directors do not have service agreements with the Company. They are paid Directors' fees, which are determined by the Board, appropriate to the level of their contribution, taking into account factors such as the responsibilities, effort and time spent for serving the Board and Board Committees. The Non-Executive Directors and Independent Directors do not receive any other remuneration from the Company. Directors' fees are tabled periodically for shareholders' approval at the AGM.
The Company does not use contractual provisions to allow the Group to reclaim incentive components of remuneration from Executive Directors and key management personnel in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial loss to the Company. Executive Directors owe a fiduciary duty to the Company. The Company should be able to avail itself to remedies against the Executive Directors in the event of such breach of fiduciary duties.
The name and remuneration of each person who is/was a Director of the Company during the financial year ended 31 December 2016 is presented in bands.
Given the wage discrepancies within the industry and also across the industries and the competitive pressures that may result from such disclosure, the Board is of the opinion that it is in the best interest of the Company not to disclose the detailed remuneration of each individual director and the CEO to the nearest thousand dollars. The Company has instead disclosed such remuneration in bands and it is the Board's view that such disclosure would be sufficient for shareholders to have an adequate appreciation of the Company's compensation policies and practices in relation to its directors and the CEO.
|Name||Below SGD 100k||SGD 100k-200k||SGD 200k-300k||SGD 300k-400k||SGD 400k-500k|
|Mr. Prasert Bunsumpun||●||-||-||-||-|
|Mr. Chalermchai Mahagitsiri||-||-||-||●||-|
|Mr. Jitender Pal Verma||-||-||-||-||-|
|Dr. Jean Paul Thevenin||●||-||-||-||-|
|Mr. Ng Cher Yan||●||-||-||-||-|
|Mr. Tay Yu-Jin||●||-||-||-||-|
|Dr. Jan Jozef Skorupa||●||-||-||-||-|
|Mr. Toh Wen Keong Joachim||●||-||-||-||-|
|Mr. Chia Wan Huat Joseph||-||-||-||●||-|
Directors who receive remuneration as executives of the Company include Mr. Chalermchai Mahagitsiri in his capacity as Executive Vice Chairman and CEO and Mr. Chia Wan Huat Joseph as Executive Director. As executives of the Company, Mr. Chalermchai Mahagitsiri and Mr. Chia Wan Huat Joseph did not receive any Directors' fees. Mr. Jitender Pal Verma did not receive any Directors' fees or other remuneration from the Company.
For persons who served in the capacity of a Director for any part of a financial period, remuneration calculated for the purposes of the above disclosure is based on a pro-forma assessment of potential full year remuneration (i.e. the remuneration that the Director would have received if he/she had served as a Director for the full financial period).
During the financial year that ended 31 December 2016, not all Directors listed above served for the full financial period. Mr. Toh Wen Keong Joachim retired as a Director at the Annual General Meeting of Shareholders No. 01/2016 on 26 April 2016. Mr. Tay Yu-Jin was elected as a Director at the Annual General Meeting of Shareholders No. 01/2016 on 26 April 2016. Mr. Chia Want Huat Joseph served as a Director until his resignation on 28 October 2016. Mr. Jitender Pal Verma was appointed as a Director on 28 October 2016 in replacement to Mr. Chia Wan Huat Joseph.
Breakdown (in percentage terms) of each Director's remuneration earned through (1) Directors' fees, (2) base/fixed salary, (3) variable or performance-related income/bonuses, (4) benefits in kind, and (5) stock options granted and other long-term incentives.
|Mr. Prasert Bunsumpun||100%||-||-||-||-|
|Mr. Chalermchai Mahagitsiri||-||100%||-||-||-|
|Mr. Jitender Pal Verma||-||-||-||-||-|
|Dr. Jean-Paul Thevenin||100%||-||-||-||-|
|Mr. Ng Cher Yan||75%||-||-||25%||-|
|Mr. Tay Yu-Jin||79%||-||-||21%||-|
|Dr. Jan Jozef Skorupa||100%||-||-||-||-|
|Mr. Toh Wen Keong Joachim||100%||-||-||-||-|
|Mr. Joseph Chia Wan Huat||-||90%||-||10%||-|
The names and remuneration of the key executives (who are not also Directors) in bands of SGD 250,000.
|Key Executives||Below SGD 250k||SGD 250k-500k||SGD 500k-750k|
|Dr. Vincent Siaw||●||-|
|Mr. Darren Morgan||-||●|
|Mr. Graham McKnockiter||-||●|
|Mr. Phiboon Buakhunngamcharoen||●||-|
|Mr. William Macdonald||-||●|
|Mr. Paul Burger Whiley||●|
|Mr. Robert Neil Howie||●|
|Mr. Nha-Vinh Julien Nguyen||●||-|
|Mr. Raza Ullah Khan||●|
For persons who served in the capacity of a key executive (who is not also a Director) for any part of a financial period, remuneration calculated for the purposes of the above disclosure is based on a pro-forma assessment of potential full year remuneration (i.e. the remuneration that the key executive would have received if he/she had served as a key executive for the full financial period).
During the financial year that ended 31 December 2016, not all Key Executives listed above served for the full financial period. Dr. Vincent Siaw was appointed as Executive Vice President and Chief Operating Officer on 9 August 2016. Mr. Darren Morgan was appointed as Executive Vice President for Subsea Services on 8 August 2016. Mr. Graham McKnockiter was appointed as Subsea Group Regional Director for Western Hemisphere on 5 September 2016. Mr. Phiboon Buakhunngamcharoen was appointed as Acting Chief Financial Officer on 14 October 2016. Mr. Paul Burger Whiley ceased to be Executive Vice President for Subsea Services on 8 August 2016. Mr. Robert Neil Howie ceased to be Subsea Group Regional Director for Western Hemisphere on 4 September 2016. Mr. Nha-Vinh Julien Nguyen was appointed as the Chief Financial Officer on 1 January 2016 and ceased to be the Chief Financial Officer on 17 June 2016. Mr. Raza Ullah Khan was appointed as the Chief Financial Officer on 8 August 2016 and ceased to be the Chief Financial Officer on 14 October 2016.
Breakdown (in percentage terms) of each key executive's remuneration earned through (1) base/fixed salary, (2) variable or performance-related income/bonuses, (3) benefits in kind, and (4) stock options granted and other long-term incentives.
|Dr. Vincent Siaw||100%||-||-||-|
|Mr. Darren Morgan||74%||-||26%||-|
|Mr. Graham McKnockiter||100%||-||-||-|
|Mr. Phiboon Buakhunngamcharoen||82%||-||18%||-|
|Mr. William Macdonald||100%||-||-||-|
|Mr. Paul Burger Whiley||100%||-||-||-|
|Mr. Robert Neil Howie||86%||7%||7%||-|
|Mr. Nha-Vinh Julien Nguyen||87%||-||13%||-|
|Mr. Raza Ullah Khan||83%||-||17%||-|
The aggregate remuneration paid to the above key management personnel (who are not Directors) for financial year ended 31 December 2016 was SGD 2,847,137.
Remuneration of employees who are immediate family members of a Director or the Chief Executive Officer of the Company, and whose remuneration exceeds SGD 50,000 during the year.
Not applicable. There are no employees who are immediate family members of a Director or the CEO (Managing Director) of Mermaid.
Employee Share Option Plan
The Employee Share Option Plan is administered by the Remuneration Committee. The Employee Share Option Plan is to reward, retain and motivate employees of the Group who excel in their performance and encourages greater dedication, loyalty and higher standards of performance. More details of the Employee Share Option Plan are provided in the General Disclosures.
In performing the duties as required, the Remuneration Committee ensures that remuneration paid to the CEO and key executives is strongly linked to the achievement of business and individual performance targets. The performance targets as determined by the Board are set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both short- and long-term quantifiable objectives.
The Board is accountable for providing a balanced and understandable assessment of the Company's performance. The Company releases quarterly and full year financial results via SGXNet on a timely basis.
Financial report and business updates are provided to the Executive Committee members on a monthly basis in order to review and assess the operation's performance. The Executive Committee provides the updated report to the Board on a regular basis.
The Board recognizes the importance of sound internal controls and risk management practices to good corporate governance.
The Compliance and Internal Audit Department is independent of management and has a direct and primary reporting line to the Chairman of the Audit Committee. The Compliance and Internal Audit Director assists the Audit Committee in the discharge of its duties and responsibilities by being responsible for all regulatory compliances, internal audits, corporate governance matters, and risk management systems of the Company. The Company Secretary assists in overseeing compliances with all law and regulations concerning public companies.
In line with the commitment of a high standard of compliance with accounting, financial reporting, internal controls, corporate governance and auditing requirements and any legislation relating thereto, the Company has a Code of Business Conduct applicable to Company personnel covering a wide range of business practices and procedures. This includes, but is not limited to, compliance with laws, rules and regulations, conflicts of interests, insider trading, corporate opportunities, competition and fair dealing, discrimination and harassment, health and safety, environmental matters, record-keeping, financial controls and disclosures, confidentiality, protection and proper use of company assets, financial reporting and compliance.
On 18 September 2013, the Board has established a Risk Management Committee to oversee risk management standards, practices, and systems.
The Company also has a Share-Dealing and Inside Information Policy to ensure proper access and use of Company information. The said policy sets out a prohibition on dealing in Company shares on short term considerations, prohibition on dealing in Company shares prior to release of financial results, prohibition on dealing in Company shares when in possession of inside information, prohibition on giving advice in respect of dealing in Company shares using inside information, and general obligations to observe confidentiality.
The Company has also set in place a Whistleblowing Policy, providing an avenue for its employees and external parties to raise concerns and offer reassurance that they will be protected from reprisals or victimization for whistleblowing in good faith. The Policy conforms to the guidance set out in the Code which encourages employees to raise concerns, in confidence, about possible irregularities.
The Audit Committee has been working with the Compliance and Internal Audit Department to continuously improve Mermaid's internal control systems and provides progress reports to the Board on a quarterly basis.
The Risk Management Committee reviews the effectiveness of the Enterprise Risk Management system within the Group and evaluates the adequacy and effectiveness of administrative, operating, and accounting controls used by the Group.
Based on the internal controls established and maintained by the Company, the independent audits performed by the internal and external auditors and the assurance from the CEO, the CFO, and relevant management, the Board, with the concurrence of the Audit Committee, is of the opinion that the Company has in place adequate and effective internal controls addressing in all material respects the financial, operational, compliance and information technology controls, and risk management systems within the current scope of the Company's business operations.
The system of internal controls which has been put in place throughout the financial period for the Company provides reasonable, but not absolute, assurance that the Company will not be adversely affected by any event that can be reasonably foreseen as it strives to achieve its business objectives.
The Board has received assurances from the CEO and the CFO that the financial records have been properly maintained and the financial statements give a true and fair view of the Company's operations and finances. The Board has also received assurance from the CEO and CFO that the risk management and internal control systems of the Company is adequate and effective to deal with major risks relating to financial, operational and compliance aspects.
Based on the internal controls established and maintained by the Company, work performance by the internal and external auditors, and reviews performance by the Management, the Audit Committee and the Board are of the opinion that the Company's internal controls, addressing financial, operational, compliance and information technology controls, and risk management systems were adequate and effective as at 31 December 2016.
As at 31 December 2016, the Audit Committee held five (5) meetings. The management of Mermaid, including the CEO, Financial Director, Senior Finance and Accounting Manager, General Counsel, and concerned Managers also participated in those meetings when invited. Mermaid's external auditors from KPMG Phoomchai Audit Limited also participated in the meetings to review Mermaid's financial statements and reports with the Audit Committee and management during the financial year. Mermaid's Internal Audit Director and Manager attended the meetings to review the internal audit activities and results with the Audit Committee during the financial year. The meeting agenda and minutes were prepared.
The Audit Committee carried out its functions as stated in the Audit Committee's scope of responsibilities as set out in Principle 2 above.
Apart from the above functions, the Audit Committee shall commission and review the findings of internal investigations and/or review and discuss with the external auditors any matters where there is suspicion of fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation, which has or is likely to have a material impact on operating results and/or financial position. The Audit Committee will also ensure that the appropriate follow-up actions are taken. In the event that a member of the Audit Committee is interested in any matter being considered by the Audit Committee he will abstain from reviewing that particular transaction or voting on that particular resolution.
The Audit Committee meets with the external and internal auditors, in each case, without the presence of management, on a quarterly basis.
The Audit Committee is chaired by a practicing accountant with relevant qualifications and experience. The Audit Committee keeps itself appraised of changes in accounting policies and guidelines through scheduled regular updates with the internal auditor and external auditor.
The Company performs its own internal audit. The internal audit function is adequately resourced and has appropriate standing within the Company. The internal audit function is staffed with persons with the relevant qualifications and experience.
The scope of internal auditing encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the organization's governance, risk management, and internal process as well as the quality of performance in carrying out assigned responsibilities to achieve the organization's stated goals and objectives. The internal audit activities are governed itself by adherence to The Institute of Internal Auditors (“IIA”) mandatory guidance.
The internal audit reports for non-compliance and internal control weaknesses which include management's response and corrective action taken or to be taken in regard to the specific findings and recommendations are reported to the Audit Committee through periodic activity reports.
To ensure the adequacy and effectiveness of the internal audit function, the Audit Committee reviews the Internal Auditor's scope of work at least annually.
The Company continues the disclosure obligations pursuant to the SGX-ST Listing Manual to provide the adequate and timely information of all major developments to the shareholders. The Company provides information to the shareholders through SGXNet, Annual Reports and Notice of AGMs.
The Company is committed to strengthening its relationship with the investment community and believes in timely and consistent disclosure of pertinent information to enable a transparent assessment of the Company's value. The Company values dialogue with shareholders, and holds analyst briefings following announcement of its financial results.
The Company's website is an important source of information for shareholders and the investment community. Quarterly results announcements, news releases, presentation slides, annual reports and other key facts and figures about the Company are available on the website.
At the general meeting, the shareholders have the opportunity to participate and vote on the resolutions. A notice, agenda, voting procedures and papers shall be sent to the shareholders as well as releasing on the SGXNet prior to the meetings. Proxy can be given by the shareholders to attend the meeting.
In addition to the continuous announcements made through SGXNet and a corporate website, each year the Company organizes the Shareholders Forum in Singapore. At this event, the shareholders (including the Depositors), particularly those based in Singapore, would be given the opportunity to meet with the Board members and Key Executives of the Company.
On 29 February 2016, the Board of Directors proposed that no dividends shall be declared to the shareholders for the financial year ended 31 December 2015. Upon the approval from AGM No. 01/2016 dated 26 April 2016, the shareholders present had unanimously approved that no dividends be declared to the shareholders for the financial year ended 31 December 2015.
The AGM is the principal forum for dialogue and interaction with all shareholders. All shareholders will receive the notice of AGM, which is also advertised on the newspapers and issued via SGXNet. The Board welcomes questions and comments relating to the Group's business or performance from shareholders at AGMs. Shareholders are given the opportunity to air their views and direct questions to the Board on matters affecting the Group.
The Company does not practise bundling of resolutions at general meetings. Each item of special business included in the notice of the general meetings is accompanied, where appropriate, by an explanation for the proposed resolution. All Directors, including the chairman of the Board Committees, and senior management, are present at all general meetings to address shareholders' queries. External auditors will also be present at such meeting to assist the Directors to address any relevant queries from the shareholders, if necessary.
The Company prepares minutes of all general meetings that include substantial and relevant comments or queries from shareholders relating to the agenda of the meeting, and responses from the Board and Management. These minutes are available to shareholders upon their request. They are also presented at the subsequent general meeting of shareholders for adoption.
The Company has implemented the system of voting by poll at its AGM. Results of each resolution put to vote at the AGM are announced with details of percentage in favour and against. Shareholders are allowed to appoint a proxy to attend and vote in his/her stead.
On 31 July 2013, Rule 730A and Practice Note 7.5 of the Listing Manual of the SGX-ST was introduced. Rule 730A(1) and Practice Note 7.5 require (unless exempted by the Singapore Exchange) an issuer with a primary listing on the Singapore Exchange to hold its general meeting of shareholders in Singapore unless there are legal constraints preventing them from doing so, and such issuer should provide alternative modes of engagement such as webcast and information meetings so that public shareholders have access to the board and senior management.
On 23 May 2014, Mermaid announced that it had consulted with Singapore Exchange on this matter, and the Singapore Exchange advised that Rule 730A(1) of the Listing Manual is not applicable to Mermaid. Consequently, Mermaid will continue to hold its general meeting in Thailand in compliance with the Company's Articles of Association and the Thai Public Limited Companies Act B.E. 2535 (A.D.1992). For the purpose of paragraph 2.4 of Practice Note 7.5, the Singapore Exchange also advised that it has no objection to Mermaid not providing video conference and webcast facility to enable Singapore-based shareholders to follow the proceedings during its shareholder meetings in view of the legal impediments under Thai law. Mermaid shall continue to hold shareholders' forums regularly in Singapore.