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REPORT
OF CORPORATE GOVERNANCE ACTIVITIES IN 2002
The Board of Directors of the Company held a total of three Board
meetings during the year. These meetings were held to approve the
annual budget, release of the half-yearly results as well as to consider
a major acquisition.
The Audit Committee is chaired by Mr Philip
Tan and includes independent directors, Dr Philip Pillai and Mr Venkatachalam
Krishnakumar who took over from Mr Lucien Wong during the year.
The Committee held ten meetings during the year. It reviewed and recommended
to the Board the release of the year-end and half-yearly financial
statements, considered and approved the 2002 Internal Audit Plan and
reviewed the details of Interested Person transactions. Delegated
the authority by the Board, the Audit Committee also met and approved
the release of the financial results for the three months ended 31
March, 2002 and the nine months ended 30 September, 2002. Audit Committee
meetings were also held to consider the appointment of new auditors
to replace Arthur Andersen who had given notice of their desire to
resign.
The Audit Committee set aside time during the year to meet with the
new auditors Messrs Ernst & Young, to seek their views on various
accounting issues and with the internal auditors on internal controls
without the presence of Management. The Audit Committee met again
with the external and internal auditors in January 2003 in the absence
of Management to discuss issues relating to the audit of the 2002
accounts.
The Audit Committee has reviewed the non-audit services provided by
the external auditors which comprise tax services and is satisfied
with the independence of the external auditors.
The Budget & Finance Committee chaired by Mr Tan Guong
Ching held three meetings during the year. The Committee reviewed
the first quarter, first half and third quarter group performance
against 2002 Plan. The Committee also reviewed the Plan for 2003.
The Business Investment/Divestment Committee
chaired by Mr Tan Guong Ching held two meetings during the year to
consider an acquisition of assets in the US and an equity investment
in a US company.
The Legal Committee is chaired by Mr Lucien
Wong. The Committee met once during the year to consider an arbitration
notice concerning one of its subsidiaries and an update on a pending
settlement case in relation to one of its subsidiaries.
The Executive Resource & Compensation Committee
("ERCC") met four times during the year. Mr Peter Seah took
over from Ms Ho Ching as Chairman of the Committee on 15 April 2002.
The activities of the ERCC included assessing the performance of key
executives and determining their compensations package for 2002 and
incentive plans for 2003 as well as succession planning for key positions.
As part of this incentive package, the Committee also granted share
options and conditional performance share awards under ST Engg's approved
share plans.
The Senior HR Committee met once during
the year. Mr Peter Seah took over from Ms Ho Ching as Chairman of
the Committee on 15 April 2002. The Committee convened a meeting during
the year to review the training and development needs as well as the
career development path of staff with potential to hold senior positions
in the Group.
The Research & Development Committee
is chaired by Prof Lui Pao Chuen. It met twice during the year to
review strategic plans. This included the building up of Centres of
Excellence to enhance and develop new capabilities to address the
changing and challenging needs of customers in the future defence
equipment market. The capability build-up and identification of Centres
of Excellence is an ongoing process. The Committee also met to select
winning projects for the ST Engg Innovation Award.
Dealings In Securities
Directors and key senior executives of the ST Engg group are prohibited
from trading in ST Engg shares two weeks before the announcement of
ST Engg's first quarter, half year, third quarter and full year results
up to the date of the announcement of the results. Additionally, all
employees and directors of the ST Engg group are required to observe
the insider trading laws at all times.
DIRECTORS' PROFILE
The names of the Directors holding office at the date of this report
are set out below together with details of their academic and professional
qualifications, date of first appointment as directors, date of last
re-election as director as well as directorships in listed companies.
Mr Peter Seah Lim Huat was appointed non-executive
Chairman on 15 April 2002. He is President and Chief Executive Officer
of Singapore Technologies Pte Ltd and also a member of the Board of
Directors. He was a banker for the past 33 years, retiring as Vice-Chairman
and Chief Executive Officer of Overseas Union Bank in 2001. Mr Seah
is Chairman of SembCorp Industries Ltd* and sits on the boards of
CapitaLand Limited*, Chartered Semiconductor Manufacturing Ltd#, ST
Assembly Test Services Ltd# and StarHub Pte Ltd. His other appointments
include being a member of the Economic Review Committee's Sub-Committee
on Policies Related to Taxation, The CPF System, Wages and Land. He
is also a member of the Institute of Defence and Strategic Studies.
Mr Seah also serves on the Board of the Government of Singapore Investment
Corporation and is Chairman of EDB Ventures Pte Ltd and EDB Ventures
2 Pte Ltd. He is also the Vice-President of the Singapore Chinese
Chamber of Commerce and Industry and Treasurer of the Singapore Business
Federation. Mr Seah was awarded the Public Service Star (Bintang Bakti
Masyarakat) for his role as Chairman of the Sub-Committee on Finance
and Banking, Committee on Singapore's Competitiveness in 1999. Mr
Seah graduated from the former University of Singapore in 1968 with
an Honours degree in Business Administration. He will be due for re-election
at this coming AGM under Article 104 of our Articles of Association.
Mr Tan Pheng Hock is the President & CEO of ST Engg and
an executive Director. He was appointed Director on 1 May 2001. He
was last re-elected as Director on 3 April 2002. Mr Tan sits on the
Board of SembCorp Marine Ltd*. Mr Tan began his career with the Group
as an engineer in Singapore Technologies Marine Ltd ('ST Marine')
in 1981. During his 16 years in
ST Marine, Mr Tan led in the computerisation of ST Marine's processes
and operations and building of a shipyard. Mr Tan's previous appointments
included Executive Vice President of
ST Marine, President of ST Kinetics, President & Chief Operating
Officer of ST Engg and
ST Engg Group President. Mr Tan holds a Bachelor of Science (Marine
Engineering) (First Class Honours) from the University of Surrey and
a Master of Science in Management from Stanford University, USA.
Mr Tan Guong Ching is currently the Permanent
Secretary of the Ministry of Home Affairs. He was appointed our non-executive
Director on 1 October 1997 and was last re-elected on 3 April 2002.
Mr Tan chairs the Boards of Directors of Power Grid Ltd, ST Telemedia
Pte Ltd and StarHub Pte Ltd and is also a Director of Singapore Power
Ltd. He holds a Master of Engineering Degree in Chemical Engineering
from McMaster University, Canada.
LG Lim Chuan Poh is the Chief of Defence Force in MINDEF. He
was appointed as our non-executive Director on 1 April 2000 and was
last re-elected on 30 March 2001 under Article 104. LG Lim is a Director
of Singapore Telecommunications Limited*. He is also a Director of
Defence Science and Technology Agency and Member of SAFRA National
Service Association Board of Governors. LG Lim obtained a Master of
Arts in Mathematics from the University of Cambridge, UK and a Master
of Business Administration from Cornell University, USA.
Professor Lui Pao Chuen is the Chief Defence
Scientist in MINDEF. He has been our non-executive Director since
1 October 1997 and was last re-elected Director on 3 April 2002. Professor
Lui sits on the management boards of various scientific and research
institutes. He is also an Adjunct Professor in the Engineering Faculty
of the National University of Singapore. Professor Lui graduated from
the former University of Singapore with a Bachelor of Science (Honours)
in Physics and obtained a Master of Science degree in Operations Research
& Systems Analysis from the U.S. Naval Postgraduate School, USA.
Dr Philip Pillai is currently the Senior
Partner of Shook Lin & Bok. He was appointed our non-executive
Director on 1 April 2000 and was last re-elected on 30 March 2001.
Dr Pillai is a Director of Hotung Investment Holdings Limited*, Lindeteves-Jacoberg
Ltd* and a Board member of the Monetary Authority of Singapore. Dr
Pillai obtained his LL.B (First Class Honours) from the former University
of Singapore, LL.M and SJD from Harvard University, USA.
Mr Philip Tan Yuen Fah is an independent
management consultant. He was appointed non-executive Director on
1 October 1997 and was last re-elected on 3 April 2002. Mr Philip
Tan is a Director of Singapore Food Industries Limited*. He is a Member
of the Accounting Standard Committee of the Institute of Certified
Public Accountants of Singapore. He holds a Bachelor of Accountancy
from the former University of Singapore and a Bachelor of Laws from
the University of Wolverhampton, UK.
Mr Winston Tan Tien Hin is the Managing Director of Corporate
Brokers International Pte Ltd. He was appointed our non-executive
Director on 1 October 1997 and was last re-elected on 3 April 2002.
Mr Winston Tan is also a Director of Enersave Holdings Ltd* and Ascendas
Pte Ltd. He is also a Member of the Salvation Army Advisory Board.
He holds a Bachelor of Science degree in Physics from the former University
of Singapore.
Mr Lucien Wong Yuen Kuai is the Managing Partner of Allen &
Gledhill. He was appointed our non-executive Director on 1 October
1997. He was last re-elected on 30 March 2001. Mr Lucien Wong is a
Director of CapitaLand Limited*, John Hancock Life Assurance Ltd,
Raffles Hotel (1886) Ltd and Raffles Investment Ltd. Mr Wong graduated
from the former University of Singapore with a Bachelor of Law (Honours).
Mr Quek Poh Huat is the President of Temasek
Holdings (Private) Limited. He was appointed our non-executive Director
on 15 April 2002. He will be due for re-election under Article 104
at our forthcoming AGM. Mr Quek is a Director of Singapore Power Ltd
and Singapore Telecommunications Limited*. He holds a Bachelor of
Science (Chemical Engineering) from the University of Leeds, UK and
a Master of Science in Management from the U.S. Naval Postgraduate
School, USA.
Mr Venkatachalam Krishnakumar is currently
the Vice President & Regional Director Operations & Technology
– Asia Pacific of Citibank. He was appointed non-executive Director
on 15 April 2002. He will be due for re-election under Article 104
at the forthcoming AGM of the Company. He holds a Bachelor of Engineering
and Master of Business Administration from IIM, India.
* listed on the Singapore Exchange Securities Trading
Limited
# listed on both the Singapore Exchange Securities Trading Limited
and NASDAQ
SENIOR MANAGEMENT PROFILE
Mr Wee Siew Kim was appointed President,
Defence Business of ST Engg on 1 May 2002. In this capacity, Mr Wee
will help to align key defence customers' interests with the overall
objectives of ST Engg. Prior to his current position, Mr Wee was President
of ST Engg's Europe operations from July 2001 where he helped spearhead
the Group's foray into Europe. Mr Wee joined ST Aero as engineer in
1984 where he contributed to the acquisition of aeroscience capabilities
and participated in the design of re-engined A-4 Skyhawks. He was
appointed President of ST Aero from December 1997 to July 2001. Mr
Wee was awarded a First Class Honours from the Imperial College of
Science & Technology, University of London, and holds a Master
in Business Administration from Stanford University. As part of his
public service, Mr Wee is also a Member of Parliament for the Ang
Mo Kio Group Representative Constituency.
Mr Tay Kok Khiang was appointed President
of Singapore Technologies Aerospace Ltd ("ST Aero") on 10
July 2001. As President of ST Aero, Mr Tay is responsible for growing
the Aerospace sector business as well as its financial and operational
performance. Mr Tay joined ST Aero as Vice President/General Manager
of ST Aerospace Engineering Pte Ltd in 1993 and held many senior management
appointments before becoming President. He was Deputy President &
Chief Operating Officer prior to his current appointment. Mr Tay holds
a Master of Science (Industrial Engineering) from the National University
of Singapore.
Mr Seah Moon Ming was appointed Managing
Director of Singapore Technologies Electronics Ltd ("ST Elect")
on 1 July 1997 and subsequently became its President on 8 December
1997. Tasked with the challenge of creating business success and wealth
for ST Elect, Mr Seah has embarked on an aggressive strategy of launching
new initiatives, regionally and internationally, to develop businesses
that add value and focus to ST Elect's current offerings. Mr Seah
was General Manager of CET Technologies, a subsidiary of ST Elect,
from July 1994 to July 1997. Mr Seah holds a Master of Science (EE)
with distinction from the Naval Postgraduate School, Monterrey, USA.
Mr Wu Tzu Chien was appointed President,
Singapore Technologies Kinetics Ltd ("ST Kinetics") on 9
February 2000. Mr Wu leads the ST Kinetics team as it addresses new
challenges in the modernisation of defence requirements worldwide
in addition to pursuing opportunities for strategic acquisitions and
partnerships and forging strategic alliances with technology partners.
Mr Wu joined the former Singapore Technologies Automotive ("ST
Auto") group in 1986. He became President of ST Auto in 1993.
He was appointed President, Chartered Industries of Singapore Pte
Ltd ("CIS") in 1999. With the acquisition of CIS by ST Auto,
ST Auto was renamed ST Kinetics and Mr Wu assumed his current position
as President, ST Kinetics. Mr Wu holds a Bachelor of Engineering from
the University of Melbourne.
Mr See Leong Teck was appointed President,
Singapore Technologies Marine Ltd ("ST Marine") on 8 December
1997.Mr See oversees ST Marine's push to be a world-class provider
of niche products and services in shipbuilding and shiprepair. Mr
See joined ST Marine as Naval Architect in the early '80s. He has
played a significant role in the achievements of ST Marine ranging
from the transfer of technology for the building of fast patrol boats
to a shipyard in India to the design and building of Landing Ship
Tanks and Patrol Vessels for the Republic of Singapore Navy. Mr See
holds a Master of Science (Naval Architecture) from the University
of London, UK and Master of Business Administration from Cranfield
School of Management, UK.
General (Retired) John G Coburn was appointed
Chairman & Chief Executive Officer of ST Engg's U.S. subsidiary,
VT Systems, Inc on 1 December 2001. Gen (Ret) Coburn joined the Group
after an illustrious career with the U.S. Department of Defence for
39 years. Prior to taking up this position, Gen (Ret) Coburn was Commanding
General of the U.S. Army Materiel Command (AMC), one of the largest
commands in the army with 60,000 personnel and activities in 40 states
and over a dozen foreign countries. Gen (Ret) Coburn holds a Juris
Doctor degree from the University of Missouri, USA.
BOARD COMPOSITION AND COMMITTEES
Denotes
C - Chairman M - Member CM - Co-opted Member
* The members of the Executive Resource and Compensation Committee
and the Nominating Committee are the same. |
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Directors'
Profile
Senior Management Profile
Board Composition And Committees
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