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notes to the financial statements - Investor Relations

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CWT Limited<br />

36<br />

CORPORATE GOVERNANCE<br />

Audit Committee (AC)<br />

The AC comprised two IDs, Jimmy Yim Wing Kuen (AC Chairman) and Tan Wee Liang, and one NED, Liao Chung Lik. The role and<br />

responsibilities of <strong>the</strong> AC are described in <strong>the</strong> section on Audit Committee (Principle 12).<br />

Nominating cum Remuneration Committee (NRC)<br />

The NRC is chaired by LID Jimmy Yim Wing Kuen, who has a wealth of experience in corporate management and is not associated<br />

with a substantial shareholder. The o<strong>the</strong>r members of <strong>the</strong> NRC are ID Hu Jian Ping and NED Loi Kai Meng.<br />

The NRC covers dual roles in Direc<strong>to</strong>rs’ nomination cum evaluation and remuneration. The NRC’s functions include considering and<br />

making recommendations <strong>to</strong> <strong>the</strong> Board concerning <strong>the</strong> appointment and re-election of Direc<strong>to</strong>rs, and determining <strong>the</strong> independence<br />

of <strong>the</strong> Direc<strong>to</strong>rs; evaluating Board and individual Direc<strong>to</strong>r’s performance and effectiveness; and reviewing <strong>the</strong> board composition of<br />

<strong>the</strong> CWT Group and salary and variable bonus for Senior Management.<br />

The NRC recommends all appointments and re-appointments of Direc<strong>to</strong>rs <strong>to</strong> <strong>the</strong> Board and Board Committees. It takes in<strong>to</strong><br />

consideration whe<strong>the</strong>r Direc<strong>to</strong>rs who serve on many boards are able <strong>to</strong> commit <strong>the</strong> necessary time <strong>to</strong> discharge <strong>the</strong>ir responsibilities.<br />

The Board has determined that each Direc<strong>to</strong>r can hold up <strong>to</strong> a maximum number of 6 listed company board representations in a<br />

year. The NRC also conducts an annual review of Direc<strong>to</strong>r’s independence. Based on <strong>the</strong> Code’s criteria for independence, <strong>the</strong> NRC<br />

has ascertained that all NEDs are independent.<br />

Article 92 of <strong>the</strong> Articles requires one-third of <strong>the</strong> Board <strong>to</strong> retire by rotation at every AGM. In o<strong>the</strong>r words, no direc<strong>to</strong>rs stay in office<br />

for more than 3 years without being re-elected by shareholders. New Direc<strong>to</strong>rs are at present appointed by way of a board resolution,<br />

after <strong>the</strong> NRC approves <strong>the</strong>ir appointments. Such new Direc<strong>to</strong>rs must submit <strong>the</strong>mselves for re-election at <strong>the</strong> next AGM of <strong>the</strong><br />

Company.<br />

The NRC noted that Liao Chung Lik and Loi Pok Yen would be due for retirement as Direc<strong>to</strong>rs and stand for re-election in <strong>the</strong> next<br />

AGM. The NRC has approved <strong>to</strong> put <strong>the</strong> re-election of Liao Chung Lik and Loi Pok Yen <strong>to</strong> <strong>the</strong> shareholders for approval at <strong>the</strong> next<br />

AGM.<br />

Pursuant <strong>to</strong> Section 153 of <strong>the</strong> Companies Act (Cap. 50), Loi Kai Meng being above <strong>the</strong> age of 70 will also be subject <strong>to</strong> appointment<br />

at <strong>the</strong> next AGM by an ordinary resolution.<br />

A record of <strong>the</strong> Direc<strong>to</strong>rs’ appointment and re-appointment dates is set out on page 34.<br />

With regard <strong>to</strong> <strong>the</strong> selection of new Direc<strong>to</strong>rs, <strong>the</strong> NRC seeks <strong>to</strong> identify <strong>the</strong> desirable competencies for a particular appointment<br />

<strong>to</strong> enhance <strong>the</strong> existing board composition. The NRC may engage recruitment consultants <strong>to</strong> undertake <strong>the</strong> research on or assess<br />

candidates for new positions on <strong>the</strong> Board, or <strong>to</strong> engage such o<strong>the</strong>r independent experts as <strong>the</strong> Committee considers necessary<br />

<strong>to</strong> carry out its duties and responsibilities. The NRC meets with <strong>the</strong> short-listed Board candidates <strong>to</strong> assess <strong>the</strong>ir suitability and<br />

availability, and <strong>the</strong>n makes recommendations <strong>to</strong> <strong>the</strong> Board for its consideration and approval.<br />

Board Performance (Principle 5)<br />

The Board and <strong>the</strong> NRC will evaluate <strong>to</strong>ge<strong>the</strong>r <strong>the</strong> Board’s performance as a whole. The assessment process adopts objective<br />

performance criteria such as comparison of <strong>the</strong> Company’s performance with its industry peers. The Board’s performance targets<br />

include a measure aligned with shareholders’ interests, such as Total Shareholder Returns (TSR) and a comparison of CWT’s TSR<br />

against industry peers. The performance criteria also consider <strong>the</strong> Company’s share price performance over a three-year period visa-vis<br />

<strong>the</strong> Singapore Straits Times Index and a benchmark index of its industry peers.

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