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 2019, Mermaid is generally in compliance with the principles and guidelines set out in the Singapore Code of Corporate Governance 2018 (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 Board is collectively responsible and works with management for the long-term success of the Company.
The key functions of the Board are to:
- be responsible for the overall management and strategic direction for the Group;
- perform duties with knowledge, competence, transparency, due care and accountability for the Company and its shareholders;
- bring in expertise, capability and experience that are beneficial to the Company’s operations;
- have leadership skills, vision and independent decision-making ability to ensure the utmost benefit to the Company and the shareholders; and
- meet on a regular basis to review and monitor the Company’s financial position, management performance and business operation.
In performing the key functions above, the Board sets an appropriate tone-from-the-top and the desired organizational culture and ensures proper accountability within the Company. Directors facing conflicts of interest recuse themselves from discussions and decisions involving the issues of conflict. The Board has also put in place a Code of Business Conduct setting out the Company’s business ethics.
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 raise awareness of compliance, essentials of the roles of a director and a member of each committee in a listed company. The Company shall be responsible for 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.
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.
All members of the Board have served the Company for several years and therefore understand the Company’s business and their directorship duties.
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.
The membership of the Board Committees are as follows:
|Name||Type of Meetings|
|Board||Audit Com.||Nom. Com.||Rem. Com.||Exec. Com.||Risk Com.|
|Mr. Prasert Bunsumpun||Chair||-||-||-||Chair||-|
|Mr. Chalermchai Mahagitsiri||Member||-||-||-||Member||Member|
|Dr. Jean Paul Thevenin||Member||Member||Member||Member||Member||Chair|
|Mr. Jitender Pal Verma||Member||-||Member||-||Member||-|
|Dr. Jan Jozef Skorupa*||Member||Member||Chair||Member||-||-|
|Mr. Tang Kee Fei||Member||Chair||Member||-||-||Member|
|Mr. Tay Yu-Jin||Member||-||Member||Chair||-||-|
*Also Lead Independent Director
Details of each Board Committee are as follows:
As at 31 December 2019, the Audit Committee comprises one (1) Non-Executive Director, namely Dr. Jean Paul Thevenin, and two (2) Independent Directors, namely Mr. Tang Kee Fei and Dr. Jan Jozef Skorupa. The Chairman of the Audit Committee was Mr. Tang Kee Fei. The majority of the Audit Committee members, including the Chairman, are Independent Directors.
The Audit Committee is responsible, among other things to:
- review significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company’s financial performance;
- review the quarterly financial statements prior to approving or recommending their release to the Board, as applicable;
- oversee the performance and effectiveness of the Group's risk management systems and internal controls;
- review the assurance from the Chief Executive Officer (“CEO”) and the Chief Financial Officer on the financial records and financial statements;
- make recommendations to the Board on the proposals to the shareholders on the appointment and removal of external auditors and the remuneration and terms of engagement of the external auditors;
- review the adequacy, effectiveness, independence, scope and results of the external audit and the Company’s internal audit function;
- review the qualification, independence and performance of the external auditors and non-audit services rendered by the external auditors;
- review the policy and arrangements for concerns about possible improprieties in financial reporting or other matters so that they may be safely raised, independently investigated and appropriately followed up on;
- review Interested Persons Transactions (“IPT”) and Related Party Transactions (“RPT”); and
- oversee the Internal Audit Department.
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 2019, 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. Tang Kee Fei, Mr. Tay Yu-Jin, and Dr. Jan Jozef Skorupa. The Chairman of the Nomination Committee was Dr. Jan Jozef Skorupa.
The Nomination Committee is responsible, among other things, to:
- review succession plans for Directors and, in particular, the Chairman, the CEO and key management personnel;
- establish the process and criteria for evaluation of the performance of the Board, its Committees and Directors;
- identify and/or make recommendations to the Board on all candidates nominated for appointment to the Board;
- review Board structure, size, composition, core competencies and performance from time to time;
- review the training and professional development programs for the Board and its Directors;
- review all candidates nominated for key management positions in the Company; and
- determine annually whether or not a Director is independent.
As at 31 December 2019, the Remuneration Committee comprises one (1) Non-Executive Director, namely Dr. Jean Paul Thevenin, and two (2) Independent Directors, namely Mr. Tay Yu-Jin and Dr. Jan Jozef Skorupa.
The Chairman of the Remuneration Committee was Mr. Tay Yu-Jin. The majority of the Remuneration Committee members, including the Chairman, are Independent Directors.
The Remuneration Committee is responsible, among other things, to:
- recommend to the Board a framework of remuneration for the Directors and key executives of the Company;
- determine performance-related elements of remuneration for the Board’s consideration; and
- administer the share award or bonus schemes, if any.
As at 31 December 2019, the Executive Committee comprises three (3) Non-Executive Directors, namely Mr. Prasert Bunsumpun, Mr. Jitender Pal Verma and Dr. Jean Paul Thevenin, and one (1) Executive Director namely Mr. Chalermchai Mahagitsiri. The Chairman of the Executive Committee was Mr. Prasert Bunsumpun.
The Executive Committee is responsible, among other things, to:
- approve transactions with a value of up to US Dollars 25 million;
- exercise powers of the Board to act upon any specific matters delegated by the Board from time to time;
- consider the Company’s business plan and annual budget for recommendation to the Board; and
- consider the overall performance of the Company and provide recommendations to enhance performance.
Risk Management Committee
As at 31 December 2019, the Risk Management Committee comprises one (1) Independent Director namely Mr. Tang Kee Fei, one (1) Non-Executive Director namely Dr. Jean Paul Thevenin, one (1) Executive Director namely Mr. Chalermchai Mahagitsiri who is also the CEO, and Mr. Phiboon Buakhunngamcharoen who is the Chief Financial Officer. The Chairman of the Risk Committee was Dr. Jean Paul Thevenin.
The Risk Management Committee is responsible, among other things, to:
- review and propose for approval from the Board on principles, policies, strategies, processes, and control frameworks for the management of key risks faced by the Group;
- review, consider and/or make recommendation to change the level of risk taken by the Group for approval from the Board;
- delegate its powers and discretions to executives of the Company with or without the authority to sub-delegate further; and
- regularly coordinate with the Audit Committee by sharing information about risks and internal control potentially affecting the Group’s business.
The number of Board and Board committee meetings held during the financial year ended 31 December 2019, as well as the attendance of every Board member at these meetings, including participation through teleconference, is as follows.
|Name||Type of Meetings|
|Board||Audit Com.||Nom. Com.||Rem. Com.||Exec. Com.||Risk Com.|
|Mr. Prasert Bunsumpun||6/6||-||-||-||7/7||-|
|Mr. Chalermchai Mahagitsiri||6/6||-||-||-||7/7||2/2|
|Dr. Jean Paul Thevenin||6/6||4/4||1/1||1/1||7/7||2/2|
|Mr. Jitender Pal Verma||6/6||-||1/1||-||7/7||-|
|Dr. Jan Jozef Skorupa||6/6||4/4||1/1||1/1||-||-|
|Mr. Tang Kee Fei||6/6||4/4||1/1||-||-||2/2|
|Mr. Tay Yu-Jin||6/6||-||1/1||1/1||-||-|
Review of Company Performance
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. Such reports and business updates compare Mermaid’s actual performance against the budget and highlight key business drivers/indicators and any major issues that are relevant to Mermaid’s performance, position and prospects. The Executive Committee provides the updated report to the Board on a regular basis.
Voluntary Announcement of Quarterly Reports
On 9 January 2020, Singapore Exchange Regulation (“SGX RegCo”) announced changes to quarterly reporting (“QR”) requirements. Effective 7 February 2020, the risk-based approach to QR replaces the previous reporting requirement based on companies meeting, among other things, a certain minimum market capitalization.
Following this announcement, it is no longer mandatory for the Company to report its financials on a quarterly basis. In the interest of continuing to keep shareholders and stakeholders informed on the Company’s performance and to continue to engage with investors on the Company’s long-term business strategy, the Company shall continue to release its quarterly results via SGXNet on a voluntary basis.
Access to Information
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 by the Group.
The Company Secretary that presided for the year ended 31 December 2019 was re-appointed since 11 October 2019. The appointment and removal of the Company Secretary is a matter for the Board as a whole.
With the approval of the Chairman, Directors 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.
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 if appropriate). The Nomination Committee also seeks to ensure that the size of the Board is conducive for effective discussion and decision-making.
As at 31 December 2019, the Board comprises seven (7) Directors including three (3) Independent Directors, three (3) Non-Executive Directors, and one (1) Executive Director.
The Independent Directors have each declared that they are independent in conduct, character and judgment, and have no relationship with the Company, its related corporations, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of their independent business judgment in the best interest of the Company.
None of the Directors have served on the 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 Board shall comprise of not less than five (5) persons (Section 67 of the Thai Public Companies Act B.E. 2535 (A.D. 1992) and Article 13 of the Articles of Association);
- not less than half (1/2) of the total number of Directors shall be resident in Thailand (Section 67 of the Thai Public Companies Act B.E. 2535 (A.D. 1992) and Article 13 of the Articles of Association);
- the Board shall comprise at least two (2) Independent Directors (Rule 210(5)(c) of the Listing Manual of the SGX-ST);
- at least two (2) Independent Directors shall be resident in Singapore (Rule 221 of the Listing Manual of the SGX-ST);
- Independent Directors should make up a majority of the Board where the Chairman is not independent (Principle 2, Guideline 2.2 of the Code);
- Non-Executive Directors should make up a majority of the Board (Principle 2, Guideline 2.3 of the Code);
- the Audit Committee should comprise at least three (3) Directors, a majority of whom, including the Chairman, should be Independent and all of whom should be Non-Executive Directors (Principle 10, Guideline 10.2 of the Code);
- the Nomination Committee should comprise at least three (3) Directors, a majority of whom, including the Chairman, should be Independent (Principle 4, Guideline 4.2 of the Code);
- the Remuneration Committee should comprise at least three (3) directors, a majority of whom, including the Chairman, should be Independent and all should be Non-Executive Directors (Principle 6, Guideline 6.2 of the Code);
- the Risk Management Committee should comprise at least four (4) members of which two (2) should be Non-Executive Directors and the other two (2) should be the CEO and Chief Financial Officer (Section 3.2 of the Risk Management Committee Charter); and
- the Lead Independent Director should be appointed where the Chairman is not an Independent Director (Principle 3, Guideline 3.3 of the Code) and should also be a member of the Nomination Committee (Principle 4, Guideline 4.2 of the Code).
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.
A majority of the Board comprises Non-Executive Directors and one-third (1/3) of the Board are Independent Directors. 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 Chairman is not an Independent Director. Pursuant to Guideline 2.2 of the Code, where the Chairman is not an Independent Director, Independent Directors should make a majority of the Board. The Nomination Committee considers that there remains a strong and independent element on the Board notwithstanding the Chairman not being an Independent Director as at 31 December 2019.
The Company is committed to building a diverse, inclusive and collaborative culture. The Company recognizes and embraces the benefits of diversity on the Board, and views diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. In reviewing the Board composition and appointments, the Nomination Committee takes into consideration diversity of skills, experience, background, gender, age, ethnicity and other relevant factors although merit remains the key driver.
The profile of each Director and other relevant information on the Directors are set out in the sections on “Board of Directors” and “General Disclosures” in this Annual Report.
Meeting of Directors without Management
The Non-Executive Directors and Independent Directors met regularly where necessary without the presence of management. The chairman of such meetings provide feedback to the Board and/or Chairman, as appropriate.
There is a clear separation of responsibilities between the Chairman and the CEO to ensure an appropriate balance of power, and increased accountability and greater capacity of the Board for independent decision making. The Chairman provides support and advice to, and acts as a sounding board for the CEO, while respecting executive responsibility. The CEO takes into relevant consideration the views of the Chairman in decision-making and therefore no one individual has unfettered powers of decision-making.
The Chairman and the CEO of Mermaid are not related to each other. The role of the Chairman includes:
- leading the Board to ensure its effectiveness on all aspects of its role;
- setting the agenda and ensuring adequate time is available for discussion of all agenda items, in particular strategic issues;
- promoting a culture of openness and debate at the Board;
- ensuring that the Directors receive complete, adequate and timely information;
- ensuring effective communication with shareholders;
- encouraging constructive relations within the Board and between the Board and management;
- facilitating the effective contributions of Non-Executive Directors; and
- promoting high standards of corporate governance.
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 of the Nomination Committee, Dr. Jan Jozef Skorupa, was appointed to serve as Lead Independent Director effective 26 April 2016. The Lead Independent Director provides leadership in situations where the Chairman is conflicted. The Lead Independent Director is also available to shareholders where they have concerns and for which contact through the normal channels of the Chairman or the management has failed to resolve or is inappropriate.
The Nomination Committee comprise at least three (3) Directors, the majority of whom, including the Nomination Committee Chairman, are independent. The Lead Independent Director is also a member of the Nomination Committee.
Process for Selection, Appointment and Re-Appointment of Directors
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 Annual General Meeting (“AGM”) under Mermaid’s Articles of Association and makes recommendations to the Board on the same.
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. Upon recommendation by the Nomination Committee, a replacement Director can be appointed by way of Board resolution but any new Director shall be appointed by shareholder resolution alone. There is no alternate director on the Board.
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 during the year are encouraged, but not mandated, to retire and seek re-election by shareholders at the next AGM after their appointment.
Review of Independence
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 Dr. Jan Jozef Skorupa, Mr. Tang Kee Fei and Mr. Tay Yu-Jin are independent. The Independent Directors are required, from time to time, to disclosed to the Board their relationships with the Company, its related corporations, its substantial shareholders or its officers which may affect their independence.
Listed Company Directorships and Principal Commitments
The listed company directorships and principal commitments of each Director as at 31 December 2019 is set out below:
|Other Listed Company Directorships|
|Mr. Prasert Bunsumpun||TKS Technologies Plc.
PTT Global Chemical Plc.
Nok Airlines Plc.
Thoresen Thai Agencies Plc.
Intouch Holdings Plc.
|Mr. Chalermchai Mahagitsiri||Seven Utilities and Power Plc.
PM Thoresen Asia Holdings Plc.
Unique Mining Services Plc.
Thoresen Thai Agencies Plc.
Thai Film Industries Plc.
|Dr. Jean Paul Thevenin||PM Thoresen Asia Holdings Plc.
Thoresen Thai Agencies Plc.
|Mr. Jitender Pal Verma||PM Thoresen Asia Holdings Plc.
Thoresen Thai Agencies Plc.
|Dr. Jan Jozef Skorupa||None.|
|Mr. Tang Kee Fei||None.|
|Mr. Tay Yu-Jin||None.|
|Mr. Prasert Bunsumpun||None.|
|Mr. Chalermchai Mahagitsiri||President & CEO, Thoresen Thai Agencies Plc.|
|Dr. Jean Paul Thevenin||Non-Executive Director, Thoresen Thai Agencies Plc.|
|Mr. Jitender Pal Verma||Executive Director & Group CFO, Thoresen Thai Agencies Plc.|
|Dr. Jan Jozef Skorupa||Managing Director, Clesol Co., Ltd.|
|Mr. Tang Kee Fei||General Manager, Asiatech Energy Pte. Ltd.|
|Mr. Tay Yu-Jin||Partner, Mayer Brown LLP|
The Nomination Committee considers that the other board representations and principal commitments 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.
On the initiative of the Nomination Committee and in line with past practice, each Director, on an annual basis, undertakes a self-assessment exercise of the performance of the Board as a whole, of each of its Committees, and of himself/herself taking into relevant consideration the roles and responsibilities of Directors pursuant to the Code and the results of the Company’s business operations. The self-assessment exercise is facilitated by the Internal Auditor. The results of the self-assessment exercise are then reported and discussed by the Board and areas for improvement 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 Committees operate effectively and each Director is contributing to the overall effectiveness of the Board.
The Remuneration Committee has a formal and transparent procedure for developing policies on Director and executive remuneration, and for fixing the remuneration packages of individual Directors and key management personnel. The Remuneration Committee recommends the framework for and proposes specific remuneration packages to the Board. The Remuneration Committee considers all aspects of remuneration, including termination terms, to ensure that they are fair. No Director is involved in deciding his or her own remuneration.
The Remuneration Committee comprises at least three (3) Directors. All members of the Remuneration Committee are non-executive Directors, the majority of whom, including the Remuneration Committee Chairman, are independent.
The Remuneration Committee has full authority to engage any external professional advice on matters relating to remuneration as and when the need arises and expenses of such advice shall be borne by the Company. For the financial year ended 31 December 2019, there were no remuneration consultants engaged by the Company.
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 level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the Company, taking into account the strategic objectives of the Company and prevailing market conditions.
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 CEO and other key management personnel’s remuneration comprises a base/fixed salary and a variable bonus component. The Company has a bonus scheme to link rewards to corporate and individual performance. Such performance-related compensation is aligned with the interests of shareholders and other stakeholders and promotes the long-term success of the Company. 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-term and long-term quantifiable objectives.
The Remuneration Committee considers that the remuneration of Non-Executive Directors is appropriate to the level of contribution, taking into account factors such as effort, time spent, and responsibilities, and that the remuneration to Directors, the CEO and other key management personnel is appropriate to attract, retain and motivate the Directors to provide good stewardship of the Company and the CEO and other key management personnel to successfully manage the Company for the long term.
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. In any case, Executive Directors owe a fiduciary duty to the Company. The Company would be able to avail itself to remedies against the Executive Directors in the event of such breach of fiduciary duties.
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. The Company had in the past actively implemented Employee Share Option Plans. All previous plans have since expired and there are no active Employee Share Option Plans during the financial year ended 31 December 2019. More details of the Employee Share Option Plans are provided in the section on “General Disclosures” of this Annual Report.
The name and remuneration of each person who is/was a Director of the Company during the financial year ended 31 December 2019 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||-||-||-||-||●|
|Dr. Jean Paul Thevenin||●||-||-||-||-|
|Mr. Jitender Pal Verma||-||-||-||-||-|
|Dr. Jan Jozef Skorupa||●||-||-||-||-|
|Mr. Tang Kee Fei||●||-||-||-||-|
|Mr. Tay Yu-Jin||●||-||-||-||-|
The only Director who receives remuneration as an executive of the Company is Mr. Chalermchai Mahagitsiri in his capacity as Executive Vice Chairman and CEO. As an executive of the Company, Mr. Chalermchai Mahagitsiri did not receive any Director’s fees. Mr. Jitender Pal Verma did not receive any Directors’ fees or other remuneration from the Company.
In the case of 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). All Directors served for the full financial period ended 31 December 2019.
Breakdown (in percentage terms) of each Director’s remuneration earned through  Directors’ fees,  base/fixed salary,  variable or performance-related income/bonuses,  benefits in kind, and  stock options granted and other long-term incentives.
|Mr. Prasert Bunsumpun||100%||-||-||-||-|
|Mr. Chalermchai Mahagitsiri||-||100%||-||-||-|
|Dr. Jean-Paul Thevenin||100%||-||-||-||-|
|Mr. Jitender Pal Verma||-||-||-||-||-|
|Dr. Jan Jozef Skorupa||100%||-||-||-||-|
|Mr. Tang Kee Fei||78%||-||-||22%||-|
|Mr. Tay Yu-Jin||100%||-||-||-||-|
The names and remuneration of the top five key executives (who are not also Directors or the CEO) in bands of SGD 250,000.
|Key Executives||Below SGD 250k||SGD 250k-500k||SGD 500k-750k|
|Dr. Vincent Siaw||●||-||-|
|Mr. Phiboon Buakhunngamcharoen||●||-||-|
|Ms. Thanyada Apichotthanachai||●||-||-|
|Mr. Mark Midgley||-||-||●|
|Mr. Philippe Jean Paul Grasset||-||●||-|
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 2019, not all Key Executives listed above served for the full financial period. Mr. Philippe Jean Paul Grasset was appointed Deputy Chief Executive Officer on 1 October 2019.
Breakdown (in percentage terms) of each key executive’s remuneration earned through  base/fixed salary,  variable or performance-related income/bonuses,  benefits in kind, and  stock options granted and other long-term incentives.
|Dr. Vincent Siaw||96%||4%||-||-|
|Mr. Phiboon Buakhunngamcharoen||83%||5%||13%||-|
|Ms. Thanyada Apichotthanachai||86%||4%||10%||-|
|Mr. Mark Midgley||86%||-||14%||-|
|Mr. Philippe Jean Paul Grasset||100%||-||-||-|
The aggregate remuneration paid to the above key management personnel (who are not Directors or the CEO) for financial year ended 31 December 2019 was SGD 1,554,683.25.
Names and remuneration of employees who are substantial shareholders of the Company, or are immediate family members of a Director, the CEO or a substantial shareholder of the Company, and whose remuneration exceeds SGD 100k during the year.
Not applicable. There are no employees who are immediate family members of a Director, the CEO or a substantial shareholder of the Company for the financial year ended 31 December 2019.
The Board recognizes the importance of sound internal controls and risk management practices to good corporate governance. The Board is responsible for the governance of risk and ensures that management maintains a sound system of risk management and internal controls, to safeguard the interests of the Company and its shareholders. All material decisions of the Board take into relevant consideration the nature and extent of risks which the Company is willing to take in achieving its strategic objectives and value creation.
The Internal Audit Department is independent of management and has a direct and primary reporting line to the Chairman of the Audit Committee. The 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.
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 Audit Committee has been working with the Internal Audit Department to continuously improve Mermaid’s internal control systems and provides progress reports to the Board on a quarterly basis.
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 Whistleblowing Policy has the objective of encouraging employees to raise legitimate concerns, in confidence, about possible irregularities.
The Risk Management Committee oversees risk management standards, practices, and systems. The Risk Management Committee periodically 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.
The Board has received assurances from the CEO and the Chief Financial Officer that the Company’s financial records have been properly maintained and the financial statements give a true and fair view of the Company’s operations and finances as at 31 December 2019.
The Board has also received assurances from the CEO and Chief Financial Officer that the internal controls (including financial, operational, compliance and information technology controls) and risk management systems were adequate and effective as at 31 December 2019 to address the risks that the Company considers relevant and material to its operations.
Based on the internal controls established and maintained by the Company, work performed by the internal and external auditors and the assurances from the CEO, the Chief Financial Officer, and relevant management, the Board, with the concurrence of the Audit Committee, is of the opinion that the Company’s internal controls (including financial, operational, compliance and information technology controls) and risk management systems were adequate and effective as at 31 December 2019 to address the risks that the Company considers relevant and material to its operations.
The systems of risk management and internal controls of 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 also notes that no system of risk management and internal controls can provide absolute assurance in this regard, or against poor judgement in decision-making, human error, losses, fraud or other irregularities.
The Audit Committee comprises at least three (3) Directors, all of whom are non-executive and the majority of whom, including the Audit Committee Chairman, are independent. At least two (2) members, including the Audit Committee Chairman, have recent and relevant accounting or related financial management expertise or experience.
The Audit Committee carried out its functions as stated in the Audit Committee’s scope of responsibilities as set out in Principle 1 above. The Audit Committee meets with the external and internal auditors, in each case, without the presence of management, on a quarterly basis.
As at 31 December 2019, the Audit Committee held four (4) meetings. The management of Mermaid, including the CEO, Chief Financial Officer and other relevant management 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 relevant management during the financial year. Mermaid’s internal auditor 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.
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 applicable law, rule or regulation, which has or is likely to have a material impact on operating results and/or financial position of the Company. The Audit Committee shall 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 shall abstain from reviewing that particular transaction or voting on that particular resolution.
The Audit Committee is chaired by a chartered management 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 Audit Committee does not comprise former partners or directors of the Company’s existing auditing firm or auditing corporation: (a) within a period of two (2) years commencing on the date of their ceasing to be a partner of the auditing firm or director of the auditing corporation; and in any case, (b) for as long as there have been any financial interest in the auditing firm or auditing corporation.
The Company performs its own internal audit. The primary reporting line of the Internal Audit Department is the Audit Committee, which also decides on the appointment, termination and remuneration of the head of the Internal Audit Department. The Internal Audit Department and has unfettered access to all the Company’s documents, records, properties and personnel, including the Audit Committee, and has appropriate standing within the Company. The Internal Audit Department 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. Based on the reviews, the Audit Committee is of the view that the internal audit function is independent, effective and adequately resourced.
Mermaid is committed to delivering high standards of corporate disclosure and transparency in its communications with shareholders, analysts and other stakeholders. Mermaid provides regularly relevant information regarding its strategy, performance and prospects to aid shareholders and investors in their investment decisions.
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 various channels including, but not limited to, SGXNet, Annual Reports, Notice of AGMs and its corporate website.
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 corporate website at www.mermaid-group.com.
At the general meeting, the shareholders have the opportunity to participate and vote on the resolutions. A notice, agenda, voting procedures and papers are sent to the shareholders as well as released on SGXNet prior to the meetings. Proxy can be given by the shareholders to attend the meetings.
The Annual General Meeting (“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.
The Company expects all Directors, including the Chairman of the Board Committees, and senior management, to be 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. At AGM No. 01/2019 held on 23 April 2019, all Directors were in attendance, either in person or via teleconference.
The Company has implemented the system of voting by poll at its general meetings. Results of each resolution put to vote at the general meetings 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.
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.
On 28 February 2019, due to the consolidated net losses of the Company and in order to preserve financial resources to support a potential business turnaround, among other things, the Board of Directors proposed that no dividends shall be declared to the shareholders for the financial year ended 31 December 2018. Subsequently, at AGM No. 01/2019 dated 23 April 2019, the shareholders present had unanimously approved that no dividends be declared to the shareholders for the financial year ended 31 December 2018.
The Company does not have a dividend policy. However, it adopts a guideline that, subject to other factors that the Board considers appropriate based on the financial status and business outlook of the Company, at least 25 percent of the Company’s consolidated annual net profits should be distributed as dividends to its shareholders.
The Company publishes on a quarterly basis through SGXNet an analyst presentation accompanying the financial statements summarizing financial and business highlights for that quarter. The Company has an Investor Relations Department that remains accessible to handle queries from shareholders and the general public and is the contact point to accommodate exchange of views. The Investor Relations Department can be contacted at +662-255-3115 or at firstname.lastname@example.org whereby shareholders can approach the Company with questions or other queries and through which the Company may respond.
To provide equal participation opportunity for all shareholders, each year the Company organizes a 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 Board members and key executives of the Company. At each Shareholders Forum, the Company delivers a presentation to update shareholders on Mermaid’s progress over the past year and provide adequate time to shareholders to address queries and concerns about Mermaid. The Company organized its last Shareholders Forum in Singapore on 25 March 2019.
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 meetings 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.
Meetings via Electronic Media
The Thailand National Council for Peace and Order announcement issued on 27 June 2014 and the Clarification of the Department of Business Development (“DBD”) dated 23 September B.E. 2559 (A.D. 2016) broadly stated 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. However, public limited companies shall be required to amend their Articles of Association if they wish to conduct their meetings via electronic media.
In order for such meetings via electronic media 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.
As soon as the applicable Thai laws and regulations allow for the participants to attend the meetings via electronic media without their physical presence in Thailand, the Company shall start the process to amend its Articles of Association to allow for the conduct of Board and shareholders meetings via telephonic and video-conferences in accordance with, and subject to any limitations imposed by, applicable laws and regulations in Thailand.
Mermaid’s subsidiaries incorporated in Thailand, being private limited companies, are 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.
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 Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the Company are served. The Company regularly engages with its material stakeholder groups to manage its relationships with such groups. These material stakeholder groups comprise key customers, key suppliers, substantial shareholders, financial institutions, quality, health, safety and environmental organizations, and the local communities. The Company maintains a corporate website at www.mermaid-group.com as the first interface of information and communication with its stakeholders.
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.
The Company has adopted a formal policy on sustainable reporting and reports on its environmental, social and governance (“ESG”) information on an annual basis. For more information, please see the “Sustainability Report” section of this Annual Report.