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44 Corporate Governance COSCO Corporation (Singapore) Limited In its review, the Remuneration Committee’s objective is to establish and maintain a level of remuneration that would be appropriate to attract, retain and motivate the directors and key executives to run the Company successfully. The Company currently adopts a remuneration policy for staff consisting of a fixed component and a variable component. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus that is linked to the Company and individual performance. Another element of the variable component is the grant of share options under the Cosco Group Employees’ Share Option Schemes. The remuneration of non-executive directors is determined by the Chairman together with the other executive directors, and is based on the effort and time spent and the responsibilities of the non-executive directors. Non-executive directors are paid a basic fee and additional fees for serving on any of the Board Committees. The Chairman of each of these committees is compensated for his additional responsibilities. Such fees are approved by the shareholders of the Company as a lump sum payment at the AGM of the Company. The details of the remuneration of the Directors and key executives are as follows: DIRECTORS’ REMUNERATION Benefits Other from Stock Fees Salary Bonus Benefits Option Total Remark Executive Director above the Band of S$750,000 Note 2 Ji Hai Sheng 16.75% 22.91% 12.08% 16.94% 31.32% 100% Executive Directors in the Band of S$500,000 to S$750,000 Li Jian Xiong 8.97% 25.04% 13.55% 16.79% 35.65% 100% Ye Bin Lin 14.36% 25.34% 13.00% 11.23% 36.07% 100% Yao Hong 1.88% 27.05% 13.89% 18.67% 38.51% 100% Executive Director above the Band of S$250,000 Liu De Tian – 29.00% 17.50% 15.00% 38.50% 100% Non Executive Director in the Band of S$250,000 to S$500,000 Zhou Lian Cheng NA NA NA NA 100% 100% 500,000 shares were exercised in 2004 Non Executive Directors below the Band of S$250,000 Wei Jia Fu NA NA NA NA Note 1 NA Has not exercised the share options Sun Yue Ying NA NA NA NA Note 1 NA Has not exercised the share options Li Jian Hong NA NA NA NA Note 1 NA Has not exercised the share options Independent Directors in the Band Below S$250,000 Tom Yee Lat Shing 100% NA NA NA Note 1 100% Has not exercised the share options Dr Wang Kai Yuen 100% NA NA NA Note 1 100% Has not exercised the share options Er Kwong Wah 100% NA NA NA Note 1 100% Has not exercised the share options Executive in the Band of S$250,000 – S$500,000 Teo Chuan Teck – 39.10% 15.30% 2.60% 43.00% 100% Note 1 No benefits have been received as the stock options were not exercised in the year. Note 2 Share options granted and accepted in 2004 are not reflected as they exercisable after 2004.
45 Corporate Governance COSCO Corporation (Singapore) Limited ACCOUNTABILITY AND AUDIT Principle 10: Accountability of the Board and management The Company has adopted quarterly results reporting since the first quarter of 2003. The Company holds a media and analysts briefing of its quarterly, half-year and full-year results. The results are published through MASNET/SGXNET and news releases. All information on the Company’s new initiatives is first disseminated via MASNET/SGXNET, and subsequently via press releases. The Company communicates with its investors on a regular basis through press releases. All shareholders of the Company receive the annual report and notice of AGM. Notices for shareholders meetings are advertised in newspapers and made available on MASNET/ SGXNET. At General Meetings, shareholders are given the opportunity to express their views and ask Directors or the Management questions regarding the Company and the Group. AUDIT COMMITTEE Principle 11: Establishment of Audit Committee with written terms of reference The Audit Committee comprises the following members: Mr Tom Yee Lat Shing (Chairman) Dr Wang Kai Yuen Mr Er Kwong Wah Mdm Sun Yue Ying (Alternate: Ye Bin Lin) (Non-executive/Independent) (Non-executive/Independent) (Non-executive/Independent) (Non-executive) The role of the Audit Committee is to assist the Board of Directors in the execution of its corporate governance responsibilities within the established Board references and requirements. The financial statements, accounting policies and system of internal accounting controls are the responsibilities of the Board of Directors acting through the Audit Committee. In performing its functions during the year under review, the Audit Committee reviewed the sope of work of both internal and external auditors and the assistance given by the Company’s officers to the audits. It met with the Company’s internal and external auditors, without the presence of the Management, to review their audit plans and discuss the results of their respective examinations and their evaluation of the Group’s system of internal accounting controls. The Audit Committee also reviewed the financial statements of the Group for the financial year ended 31 December 2004 as well as the auditors’ report thereon and the first quarter, half-yearly, third quarter and annual results announcements, before they were submitted to the Board for approval. The Audit Committee also, on a quarterly basis, reviewed the recurrent interested persons transactions of the Group. This was to ensure that the methods or procedure for determining the transaction prices have not changed since the last shareholder approval and that the methods or procedures are sufficient to ensure that the transactions are carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its shareholders. The Audit Committee has full access to, and cooperation from the Management including internal and external auditors, and has full discretion to invite any director and executive officer to attend its meetings. The Audit Committee has also express power to investigate any matter brought to its attention, within its terms of reference, with the power to retain professional advice at the Company’s expense. The Audit Committee met a total of five times during the year under review. All members were present during these meetings. The Audit Committee, having reviewed the amount of non-audit services to the Group by the external auditors, is satisfied with the independence and objectivity of the external auditors and recommends to the Board of Directors, the nomination of the external auditors for re-appointment. INTERNAL CONTROLS Principle 12: Sound system of internal controls The Group maintains a system of internal controls for all companies within the Group, but recognises that no internal control system will preclude all errors and irregularities. The system is designed to manage rather than to eliminate the risk of failure to achieve business objectives. The controls are to provide reasonable, but not absolute, assurance to safeguard shareholders’ investments and the Group’s assets. With the assistance of Internal Audit, the Audit Committee and the Board of Directors review the effectiveness of the key internal controls, including financial, operational and compliance controls, and risk management on an on-going basis. There are formal procedures in place for both the internal and external auditors to report independently their findings and recommendations to the Audit Committee. The Board is satisfied that there are adequate internal controls in the Group. COSCO Corporation (Singapore) Limited Annual Report 2004
Page 1 and 2: COSCO Corporation (Singapore) Limit
Page 3 and 4: 01 Corporate Profile COSCO Corporat
Page 5 and 6: 03 Building Scale COSCO Corporation
Page 7 and 8: 05 Increasing Value COSCO Corporati
Page 9 and 10: 07 Growing Opportunities COSCO Corp
Page 11 and 12: 09 At A Glance COSCO Corporation (S
Page 13 and 14: 11 Financial Highlights COSCO Corpo
Page 15 and 16: 13 Chairman’s Letter COSCO Corpor
Page 17 and 18: 15 President’s Statement COSCO Co
Page 19 and 20: 17 President’s Statement COSCO Co
Page 21 and 22: 19 Operations Review & Geographical
Page 23 and 24: 21 Operations Review COSCO Corporat
Page 31 and 32: 29 Inside COSCO Corporation COSCO C
Page 33 and 34: 31 Inside COSCO Corporation COSCO C
Page 35 and 36: 33 Board of Directors COSCO Corpora
Page 37 and 38: 35 Board of Directors’ Profile CO
Page 39 and 40: 37 Corporate Structure COSCO Corpor
Page 41 and 42: 39 Financial Review COSCO Corporati
Page 43 and 44: 41 Corporate Governance COSCO Corpo
Page 45: 43 Corporate Governance COSCO Corpo
Page 49 and 50: 47 Corporate Governance COSCO Corpo

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