Board Matters

Principle 1: The Board’s Conduct of its Affairs
The Board oversees and approves the formulation of the Group’s overall long-term strategic objectives and directions, and sets its values and standards. It is responsible for the Group’s overall performance objectives, financial plans and annual budget; major investments, divestments and funding proposals; financial performance reviews, risk management and corporate governance practices; and ensuring the Group’s compliance with laws and regulations as may be relevant to the business. The Board also approves the policies and guidelines of the remuneration for the Board and Senior Management as well as the appointment of Directors and the long-term succession planning for Senior Management.

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. In addition to 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 a transaction exceeds these limits.

Principle 2: Board Composition and Balance
Presently, the Board comprises six Directors, four of whom are Independent Directors. As such, there is a strong and independent element on the Board. The Independent Directors are Mr Chia Chee Ming Timothy, Mr Dilhan Pillay Sandrasegara, Mrs Elizabeth Sam and Mrs Fang Ai Lian. 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 of the Company. Mrs Fang was appointed as an Independent Director and ARC Chairman on 1 May 2008. Both Mr Chia and Mrs Fang are independent from Management and business relationships as defined under the Code.

Another Independent Director, Mr Pillay, is the managing partner of the law firm WongPartnership LLP, 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. Mr Pillay has abstained and will continue to abstain from any discussion and decision relating to the Company’s choice of legal counsel which is decided by Management. Furthermore, Management uses market rates as benchmarks when evaluating the provision of legal services to our Group by WongPartnership LLP.

Mrs Sam, an Independent Director, is also an independent director of Boardroom Limited, a company listed on the SGX-ST. Boardroom Corporate & Advisory Services Pte. Ltd., a subsidiary of Boardroom Limited, is the share registrar and transfer agent of our 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 the financial year ended 31 December 2008 were not significant.

The remaining Directors are executives of the Company. They are Mr Ho KwonPing, Executive Chairman, and Mr Ariel P Vera, Group Managing Director.

Our Directors bring with them invaluable extensive business networks and expertise in diverse fields. The size and composition of our Board is reviewed on an annual basis by the NRC to ensure that it has the appropriate mix of expertise and experience to lead and govern the Group effectively. The NRC also determines, on an annual basis, whether or not a Director is independent as defined under the Code. The NRC is of the view that, given the size, nature and scope of the Group’s operations, the current size of six Directors out of which four are Independent Directors (that is, two-thirds of the Board), ensures that the Board possesses the required capabilities, skills and experience for it to discharge its duties and responsibilities effectively. A brief profile of each Director is given on pages 16 and 17 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.

Our 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. Our Group Managing Director executes the
Board’s decisions and is responsible for implementing the Group’s strategies and policies, and the conduct of the Group’s business.

In the year under review, the number of Board and Board Committee meetings held and attended by each Board member is as follows:

1 By invitation
2 Resigned as ARC Member on 13 August 2008
3 Resigned as ARC Chairman but remained as ARC Member
4 Appointed Board Member on 1 May 2008
5 Appointed ARC Chairman on 1 May 2008

Principle 4: Board Membership
Our NRC, established on 23 March 2004, comprises three Independent Directors with Mr Chia as the Chairman and Mr Pillay and Mrs Sam as members. Mr Chia is not associated in any way to a 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, Board evaluation and remuneration of Directors and Senior Management, and determines 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)
Mr Dilhan Pillay Sandrasegara (Independent)
Mrs Elizabeth Sam (Independent)
Mrs Fang Ai Lian (Independent)

The Company’s Articles of Association require one-third of directors to 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 Ho and Mr Chia 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 Fang, who was appointed on 1 May 2008, will submit herself for retirement and re-election by shareholders at the forthcoming AGM.

Mrs Sam who has attained the age of 70 years 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
As was done in FY2007, 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. Except for the Executive Directors, there was no individual assessment for the rest of the Directors. The Board, with the input of the NRC, will review whether or not to implement assessment of the performance of individual Directors for FY2009 and if so, the feasibility of undertaking such a performance evaluation internally or whether to appoint external consultants to advise the Board and/or to assist with implementation of the process. Each member of the NRC abstained from making any recommendation 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 meeting agenda and Board materials prior to all Board and Board Committee meetings. This is sent sufficiently in advance to enable the Directors to be properly informed of matters to be discussed and/or approved. Board papers include regular items such as budget, forecasts and quarterly financial statements, as well as quarterly management reports on the Company’s projects and matters for the decision or information of the Board. In respect of the budget, any material variance between the budget, the latest forecast and the actual results are disclosed and explained. From time to time, Management will brief the Directors at Board meetings when there are changes in regulations and/or accounting standards, which would have an impact on the disclosure obligations or the financial position of the Company. The Directors are also given analysts’ reports so that they are apprised of analysts’ views on the Company’s performance.

As a general rule, Board and Board Committee papers are distributed to the Directors a week before the meeting. When necessary, Senior Management participates in Board meetings to provide additional insights.

The 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 the Board's procedures are observed and that applicable rules and regulations are complied with. The appointment and the removal of the Company Secretary is a matter of 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.