Board Matters

Principle 1: The Board's Conduct of its Affairs
The Board's principal functions include the formulation of the Group's strategic direction, setting its values and standards, reviewing and approving annual budgets and financial plans, and monitoring the Group's performance; approving major investments, divestments and fund-raising exercises; reviewing the Group's financial performance, risk management and corporate governance practices; approving remuneration policies and guidelines for the Board and Senior Management, appointment of Directors and the long-term succession planning for Senior Management; and ensuring the Group's compliance with all laws and regulations as may be relevant to its businesses.

The Group has adopted a set of internal controls and guidelines that set financial authorisation and approval limits for borrowings, investments, acquisitions, disposals, capital and operating expenditures. Apart from matters that specifically require the Board's approval, such as the issue of shares, dividend distributions, and other returns to shareholders, the Board approves all transactions where the value of that transaction exceeds these limits.

Two Board Committees, namely the Audit and Risk Committee ("ARC") and Nominating and Remuneration Committee ("NRC"), were constituted with clearly defined terms of reference to assist the Board in the execution of its responsibilities.

The Board conducts regular scheduled meetings on a quarterly basis. Ad-hoc meetings are convened when circumstances require. The Non-Executive Directors also set aside time to meet, without the presence of Management, to review the latter's performance in meeting goals and objectives. Telephonic attendance and video conferencing at Board meetings are permitted under the Company's Articles of Association. Details of Directors' attendance at Board and Board Committee meetings held during the year under review are provided below.

Directors are encouraged to attend programmes on Directors' duties and responsibilities where necessary. As part of the Company's ongoing familiarisation programme, Non-Executive Directors are given opportunities to visit key countries where the Group has operations and are provided with updates on new laws and regulations, as well as changing commercial risks, as deemed appropriate. Formal letters are issued to newly appointed Directors upon their appointment, including details of their duties and responsibilities as Directors.

Principle 2: Board Composition and Balance
The Board currently comprises six members, four of whom are Independent Directors. As such, there is a strong and independent element in the Board. The Independent Directors are Mr Chia Chee Ming Timothy, Mrs Fang Ai Lian, Mr Dilhan Pillay Sandrasegara and Mrs Elizabeth Sam. The Board appointed Mr Chia as the Lead Independent Director on 28 February 2007 to lead and co-ordinate the activities of the Independent Directors. Mr Chia is independent from Management and business relationships as defined under the Code.

Mrs Fang is the Chairman of Great Eastern Holdings Limited ("Great Eastern"), which provides insurance to the Group. The NRC and the Board consider Mrs Fang an Independent Director as the insurance policies with Great Eastern were taken up on the recommendation by the Group's insurance broker based on its competitive rates. Mrs Fang has abstained and will continue to abstain from any decision relating to the choice of insurers.

Mr Pillay is a managing partner of the law firm WongPartnership LLP ("WP"), which provides legal services to the Company. The NRC and the Board consider Mr Pillay an Independent Director of the Company, notwithstanding this relationship, because he does not personally provide legal services to the Company. Furthermore, Management uses market rates as benchmarks when evaluating the provision of legal services by WP. Mr Pillay has abstained and will continue to abstain from any decision relating to the Company's choice of legal counsel which is made by Management.

Mrs Sam is also an independent director of Boardroom Limited, a company listed on the Singapore Exchange Securities Trading Limited (the "SGX-ST"). Boardroom Corporate & Advisory Services Pte. Ltd., a subsidiary of Boardroom Limited, is the share registrar and transfer agent of the Company. Notwithstanding this, the NRC and the Board consider Mrs Sam independent, as the aggregate payments made to Boardroom Corporate & Advisory Services Pte. Ltd. for each of the immediately preceding and current financial year were not considered significant as defined in paragraph 2.1 (d) of the Code.

The two Executive Directors are Mr Ho KwonPing, Executive Chairman, and Mr Ariel P Vera, Group Managing Director.

The Board comprises individuals who bring with them invaluable extensive business networks and expertise in diverse fields to oversee the Group's growing businesses. The size and composition of the Board are reviewed from time to time to ensure that it has the appropriate mix of expertise, skills and attributes to lead and govern the Group effectively. The NRC is of the view that, given the size, nature and scope of the Group's operations, the current size of six Directors, of whom four are Independent Directors (that is, two-thirds of the Board), ensures that the Board possesses the required capabilities, skills and experience to discharge its duties and responsibilities effectively.

The profile of each Director is given on pages 18 and 19 of this Annual Report.

Principle 3: Role of Chairman and Chief Executive Officer
There is a clear division of responsibility between the Executive Chairman and Group Managing Director. The Executive Chairman and the Group Managing Director are not related to each other. The Executive Chairman is responsible for charting the strategic direction and growth of the Group. He also facilitates and ensures active and comprehensive Board discussions on Company matters and monitors the translation of the Board's decisions into executive actions, as well as fostering constructive dialogue with shareholders at the Company's Annual and Extraordinary General Meetings. The Group Managing Director oversees the execution of the Company's corporate and business strategies and policies, and the conduct of the Group's businesses.

Principle 4: Board Membership
The NRC comprises Independent Directors, namely Mr Chia (Chairman), Mr Pillay and Mrs Sam. Mr Chia is not associated with any substantial shareholder.

The NRC's functions include considering and making recommendations to the Board on new Board appointments, the selection of which is evaluated, taking into account various factors including the relevant expertise of the candidates and their personal contribution. Candidates may be put forward or sought through contacts and recommendations. The NRC also makes recommendations to the Board on re-appointments of Directors based on their contributions to the Group, a review of the range of expertise, skills and attributes of current Board members, and the needs of the Board as well as the remuneration of Directors and Senior Management, and determining annually the independence of the Directors. Notwithstanding some Directors' representations on other boards, the NRC is satisfied that these Directors have been able to perform their duties effectively and has endorsed the following status of the Directors following its annual review:-

Mr Ho KwonPing (Non-Independent)
Mr Ariel P Vera (Non-Independent)
Mr Chia Chee Ming Timothy (Independent)
Mrs Fang Ai Lian (Independent)
Mr Dilhan Pillay Sandrasegara (Independent)
Mrs Elizabeth Sam (Independent)

The Company's Articles of Association requires that every director retires once every three years and that one-third of directors shall retire and subject themselves to re-election by shareholders at every Annual General Meeting ("AGM") ("one-third rotation rule"). Retiring Directors are selected on the basis of their length of service since their last re-election, failing which they shall be selected by agreement or by lot.

Mr Pillay and Mr Vera will submit themselves for retirement and re-election under the one-third rotation rule at the forthcoming AGM. New Directors appointed in the year are subject to retirement and re-election by shareholders at the next AGM after their appointment.

Mrs Sam, who is over the age of 70, will submit herself for retirement and re-appointment pursuant to Section 153(6) of the Companies Act, Chapter 50 of Singapore, at the forthcoming AGM.

Principle 5: Board Performance
During the financial year, the NRC evaluated the Board's performance as a whole. All Directors assessed the effectiveness of the Board and the results were considered by the NRC, which has the responsibility of assisting the Board in the evaluation of the Board's effectiveness. Factors such as the structure and size of the Board, the manner in which the Board meetings were conducted, the Board's access to information, access to Management and external experts outside the meetings were applied to evaluate the Board's performance as a whole. The assessment of the Executive Chairman and the Group Managing Director's performances was undertaken by the NRC based on both qualitative and quantitative performance criteria, comprising profits, revenue growth and economic value added. There was no individual assessment for the Independent Directors. Each member of the NRC abstained from making any recommendations and/or participating in any deliberation of the NRC and from voting on any resolution in respect of the assessment of his own performance or re-nomination as a Director.

Principle 6: Access to Information
The Directors are provided with Board Papers in advance of each Board and Board Committee meeting to enable them to be properly informed of matters to be discussed and/or approved. Board Papers include reports on subsidiaries and associated companies, management accounts, budgets, forecasts, quarterly financial statements and management reports on the Company's projects, as well as matters for the decision or information of the Board. The Directors are also given analysts' reports so that they are apprised of analysts' views on the Company's performance.

Directors have separate and independent access to Senior Management and the Company Secretary at all times. The Company Secretary attends all Board and Board Committee meetings and is responsible for, among other things, ensuring that Board procedures are observed and that applicable rules and regulations are complied with. The appointment and the removal of the Company Secretary is a matter for the Board as a whole. The Board takes independent professional advice as and when necessary to enable it or the Independent Directors to discharge their responsibilities effectively and such costs are borne by the Company.