Corporate Governance

The Board and management of the Company are committed to maintaining a high standard of corporate governance in accordance with the principles and guidelines set out in the Code of Corporate Governance issued by the Council on Corporate Disclosure and Governance ("CCDG") in 2005, to enhance long-term shareholders' value through enhancing corporate performance and accountability.

Process and procedures have been implemented and/or will be implemented and are being constantly reviewed and revised to ensure effective corporate governance.

Board Matters

Principle 1 - Board's Conduct of Affairs

The principal functions of the Board are:

• set out overall long term strategic plans and objectives for the Group and ensure that the necessary financial and human resources are in place to meet its objectives;
• establish a framework to review, access and manage internal controls and risk management; review management performance;
• ensure good corporate governance practices to protect the interests of shareholders; and
• appointment of Directors, Chief Executive Officer, Chief Financial Officer and company secretary.

The Board continues to approve matters within its statutory responsibilities. Specifically, the Board has direct responsibility for decision marking in the following:

• major investment and divestment proposals;
• material acquisitions and disposals of assets;
• material interested person transactions;
• major financing, corporate financial restructuring plans and issuance of shares; and
• proposal of dividends and other returns to shareholders.

To facilitate effective execution of its function, the Board has delegated certain functions to three Board Committees, namely the Nominating Committee, Remuneration Committee and Audit Committee. These Board Committees operate under clearly defined terms setting out its respective roles and report to the Board on the outcome and recommendations.

Three of our Directors, namely Lim Tao-E William, Choong Buat Ken and Lim Yen Heng, had undergone the appropriate training on the roles and responsibilities required of a listed company's directors. In addition, all members of the Board attended a special briefing by our lawyer, Robson Lee of Shook Lin & Bok LLP on corporate governance.

The Articles of Association of the Company provide for Directors to convene meetings other than physical meetings, by teleconferencing or videoconferencing.

There were no meetings held by the Board and the Board Committees during the financial year ended 31 December 2007 other than two verification meetings held by the Board together with the solicitors and other professionals in relation to the contents of the prospectus prepared for initial public offering of the Company.

All newly appointed directors will be briefed with background information about the Group's history and business practices. A formal letter will be sent to newly appointed directors setting out their duties and obligations in the Company.

Principle 2 - Board Composition and Guidance

The Board comprises six members of whom two are Independent Directors, two are Non-Executive Directors and two are Executive Directors as follows:

Han Keen Juan Lim Tao-E William Choong Buat Ken Lim Yen Heng Ong Chin Lin Wong Chak Weng

(Executive Chairman) (Chief Executive Officer) (Non-Executive Director, appointed on 16 November 2007) (Non-Executive Director, appointed on 16 November 2007) (Lead Independent Director, appointed on 16 November 2007) (Independent Director, appointed on 16 November 2007)

Ong Chin Lin and Wong Chak Weng are considered independent as they do not have any past or on-going business relationship with our Group and/or our Directors or substantial shareholders. Ong Chin Lin and Wong Chak Weng are neither related to each other nor to any of our Executive Directors or substantial shareholders.

The Board considers its current board size appropriate to effectively facilitate the operations of the Group and has the appropriate mix of members with the expertise and experience, in areas namely, accounting & finance, business & management, corporate governance and legal aspects.

Members of the Board are constantly in touch with the management to provide advice and guidance on strategic issues and on matters for which their expertise's advice will be constructive to the Group.

Principle 3 - Chairman and Chief Executive Officer

The Company believes in a clear division of responsibilities between the Executive Chairman and Chief Executive Officer ("CEO") to ensure appropriate balance of power, increased accountability and greater capacity of the Board for decision making.

The Executive Chairman and CEO of the Company is Han Keen Juan and Lim Tao-E William respectively. Lim Tao-E William is the nephew of Han Keen Juan. In view of the relationship between our Executive Chairman, Han Keen Juan and our CEO, Lim Tao-E William, and of the fact that they are both part of the executive management team, we have appointed Ong Chin Lin as our Lead Independent Director, pursuant to the recommendations in Commentary 3.3 of the Code of Corporate Governance 2005. In accordance with the recommendations in the said Commentary 3.3, shareholders will be able to consult the Lead Independent Director where they have concerns for which contact through the normal channels of our Executive Chairman, CEO or Chief Financial Officer has failed to resolve or for which such contact is inappropriate.

The role of the Executive Chairman in the Company includes leading the Board to ensure that all aspects of roles and agendas are effectively carried out to meet objectives of the Group, ensuring that relevant information are accurately conveyed to Directors and shareholders on a timely basis, encourage constructive relations between members of the Board and promote high standards of corporate governance.

Principle 4 - Board Membership

The Nominating Committee (the "NC") comprises Wong Chak Weng, our Independent Director as Chairman, Choong Buat Ken and Ong Chin Lin as members.

The NC will meet at least annually to discuss and review the following where applicable:

• to make recommendations to the Board on all board appointments, including re-nominations, having regard to the Director's contribution and performance and if applicable, as an Independent Director. All Directors should be required to submit themselves for re-nomination and re-election at regular intervals and at least every three years;
• to determine on an annual basis, whether or not a Director is independent;
• in respect of a Director who has multiple board representations on various companies, to decide whether or not such Director is able to and has been adequately carrying out his duties as Director, having regard to the competing time commitments he faces when serving on multiple boards;
• to decide how the Board's performance may be evaluated and propose objective performance benchmarks, as approved by the Board, that allows comparison with its industry peers, and to address how the Board has enhanced long term shareholders' value; and
• in consultation with the Board, the NC determines the selection criteria and identifies candidates with appropriate expertise and experience for the appointments of new directors, NC will nominate the most suitable candidate for appointment to the Board.

The academic and professional qualifications of the Directors are set out on page 12 of this Annual Report.

The shareholdings held by the Directors in the Company and its subsidiary companies are set out on page 25 of this Annual Report.

The Board membership mix and members considered by the NC to be independent, date of first appointment and date of last-election as Director, present and past directorships over the last preceding three years in other listed companies are set out below:

Choong Buat Ken and Ong Chin Lin are elected for retirement by rotation and re-election at the forthcoming Annual General Meeting.

Principle 5 - Board Performance

The NC will decide how the Board's performance is to be evaluated and propose objective performance criteria, subject to the approval of the Board, which address how the Board has enhanced long-term shareholders' value. The Board will also implement a process to be carried out by the NC for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual director to the effectiveness of the Board. Each member of the NC shall abstain from voting on any resolutions in respect of the assessment of his performance or re-nomination as director.

Principle 6 - Access to Information

Our Directors will be provided with the relevant board papers and information on a timely manner prior to each Board meeting. Our Directors are provided with the contact details of senior management and company secretary and have separate and independent access to such persons. Our company secretary will attend all Board meetings and ensures that all Board procedures are followed and ensure good information flows within the Board and its committees and between senior management and Non-Executive Directors. Our Directors are entitled individually or as a group, to seek independent professional advice at the expense of the Company, in furtherance of their duties.

Remuneration Matters

Principle 7 - Procedures for developing Remuneration Policies

The Remuneration Committee (the "RC") comprises all Non-Executive Directors, namely Ong Chin Lin, our lead independent Director as Chairman, Choong Buat Ken, Lim Yen Heng and Wong Chak Weng as members.

The main responsibility of the RC is to review and recommend a framework of remuneration for the Directors and key executives and determine specific remuneration packages for each Executive Director. The recommendations of the RC should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to Directors' fees, salaries, allowances, bonuses, options and benefits-in-kind shall be overseen by the RC. Each member of the RC shall abstain from voting on any resolutions and making any recommendations and/or participating in any deliberations of the RC in respect of his remuneration package.

Principle 8 - Level and Mix of Remuneration

The RC will review at least annually all aspects of remuneration, including Director's fees, salaries, allowances, bonuses and benefits-in-kind to ensure that the remuneration packages are competitive in attracting, retaining and motivating employees capable of meeting our Company's objectives and that the remuneration reflects employees' duties and responsibilities.

The Non-Executive and Independent Directors do not have any service contracts and will be paid a basic fee and additional fees for serving on any of the Committees. The Board recommends payment of such fees to be approved by shareholders at the Annual General Meeting of our Company.

Our Company has entered into service agreements with two Executive Directors, namely Han Keen Juan and Lim Tao-E William on 16 November 2007 for an initial period of three years each commencing from 16 January 2008, unless otherwise terminated by either party giving not less than six months' written notice or salary in lieu of notice. The Executive Directors will not be receiving any Directors' fees from the Company or its subsidiaries for the financial year commencing from 1 January 2008 onwards and their remuneration comprises a basic salary, a fixed bonus of an amount equivalent to two months of their basic salary and a variable performance bonus, based on the performance of our Group.

Principle 9 - Disclosure on Remuneration

Directors' Remuneration

The breakdown of the level and mix of remuneration of our Directors for the financial year ended 31 December 2007 is set out below:

Key Executives' Remuneration

To maintain confidentiality of staff remuneration, the names of the top five executives are not stated.

The remuneration for each of the top five executives (who are not directors) for the year ended 31 December 2007 falls within Band I of $250,000 and below.

The following executives are related to our Directors and their annual remuneration during the financial year ended 31 December 2007 is less than $150,000:

• Chow Hui Shien is the niece of our Executive Chairman, Han Keen Juan and cousin of our Chief Executive Officer, Lim Tao-E William.; and
• Chow Phee Liat is the nephew of our Executive Chairman, Han Keen Juan and cousin of our Chief Executive Officer, Lim Tao-E William.

Accountability and Audit

Principle 10 - Accountability

The Board is accountable to the shareholders while the management is accountable to the Board. Management provides all members of the Board with balanced and understandable management accounts of the Company's performance, position and prospects on a quarterly basis. Our Company will announce its results on a half yearly basis, and make disclosure of other relevant information of our Company via SGXNET to the shareholders. Our Company is not required to announce its results on a quarterly basis.

Principle 11 - Audit Committee

The Audit Committee (the "AC") comprises Ong Chin Lin, our Lead Independent Director as Chairman, Lim Yen Heng and Wong Chak Weng as members. Two members of the AC, Ong Chin Lin and Lim Yen Heng, have accounting and financial management expertise and experience.

The AC will meet at least quarterly to discuss and review the following where applicable:

• review audit plans with external auditors and, where applicable, internal auditors, including the evaluation of our internal control system, the audit report, the management letter and our management's response;
• review half year and full year consolidated financial statements and the external auditors' reports on those financial statements, before submission to the Board for approval;
• review and ensure co-ordination between the external auditors and our management, reviewing the assistance given by our management to the auditors, and discuss problems and concerns, if any in the absence of our management where necessary;
• review and discuss with auditors any suspected fraud, irregularity or infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our Group's operating results or financial position and our management's response;
• consider the appointment and re-appointment of the external auditors and matters relating to resignation and dismissal of the auditors;
• review the transactions falling within the scope of Chapter 9 and Rule 1010 of the Listing Manual; review any potential conflict of interest and independence of external auditors;
• undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time to time on matters arising and requiring the attention of the AC; and
• review and put in place a whistle-blowing arrangement which will be communicated to all employees where employees may, in confidence, raise any concerns or other matters to the AC and where applicable, independent investigation may be carried out.

Principle 12 - Internal Controls

In the course of the statutory audit conducted annually by our external auditors, Ernst & Young, a review of the Group's material internal controls is carried out and any material non-compliance and internal control weaknesses noted during their audit and their recommendations will be reported to the AC.

For the financial year ended 31 December 2007, the Board is of the view that, in the absence of any evidence to the contrary, the system of internal controls maintained by the Company's management is adequate.

Principle 13 - Internal Audit

The Board has decided to outsource the Company's internal audit function and is in the process of sourcing a suitable reputable certified public accounting firm to conduct a full review of our Group's internal control and accounting systems annually for two years and to report its findings to the Singapore Exchange Securities Trading Limited ("SGX-ST"). Subsequently to the reviews, the Board will request the AC to consider on a regular basis whether it is necessary for our Company to continue with such an engagement.

Communication with Shareholders

Principle 14 - Communication with Shareholders

The shareholders and members of the public will be informed promptly of all major developments of the Group. Information is communicated to the shareholders on a timely basis, through annual reports, notice of general meeting and extraordinary general meetings, if applicable, half year and full year announcement of results and other announcement or press release through SGXNET.

Principle 15 - Encourage Greater Shareholder Participation

The Annual General Meeting ("AGM") of the Company is a forum and platform for dialogue and interaction with all shareholders. The Board welcomes shareholders' feedback and direct questions regarding the Group at the AGM. The members of the Board, chairpersons of the various Board Committees and external auditors would be present at the AGM to answer questions from the shareholders.

Risk Management
(Listing Manual Rule 1207(4)(b)(iv))

Our Company does not have a Risk Management Committee. The Company regularly reviews and improves its business on operational level by taking into account the risk management perspective. The Company seeks to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks, if applicable. The Company will review all significant control policies and procedures and highlight any significant matters to the AC.

Material Contracts
(Listing Manual Rule 1207(8))

Other than those disclosed in the financial statements, the Company and its subsidiary companies did not enter into any material contracts involving interests of the Chief Executive Officer, Directors or controlling shareholders and no such material contracts still subsist at the end of the financial year.

Dealing in Securities
(Listing Manual Rule 1207(18))

In line with the internal compliance code, the Company issues memorandum to its Directors, officers, employees and associates of the Group to provide guidance with regards to dealings in securities of the Company by them, highlighting that Directors, officers, relevant employees and associates are prohibited from dealing in our Company's securities, one month before release of the half year and full year results and when in possession of price-sensitive information which is not available to the public. The Company will also send memorandum prior to the commencement of each window period as a reminder to the Directors, officers, relevant employees and associates to ensure that they comply with the code. They are also discouraged from dealing in the Company's securities on short-term considerations.