HOME | CORPORATE GOVERNANCE

The Company is committed to adopting a high standard of corporate conduct in conformity with the principles and spirit of the Code of Corporate Governance (the "Code"). This report describes the Company's corporate governance practices with specific reference to the Code.

1. BOARD MATTERS
2. REMUNERATION MATTERS
3. ACCOUNTABILITY AND AUDIT
4. COMMUNICATION WITH SHAREHOLDERS
5. INTERNAL CODE ON DEALINGS WITH SECURITIES
6. MATERIAL CONTRACTS

1.	BOARD MATTERS
1.1	The Board's function includes supervising the management of the Group's business and affairs, and approving the Group's strategic operational initiatives, major investments and capital structure. In addition to its statutory responsibilities, the Board approves the Group's financial plans and reviews its financial performance.
1.2	The Board held five meetings in 2004. The attendance of the Directors at meetings of the Board and Board Committees, as well as frequency of such meetings, are as follows: Board Board Committee Audit Committee Nominating Committee Remuneration Committee* a b a b a b a b Wong Ngit Liong 5 5 - - 2 2 3 3 Cecil Vivian Richard Wong 5 5 5 5 2 2 3 3 Koh Lee Boon 5 5 5 5 2 2 3 3 Goh Geok Ling ** 4 4 4 4 - - - - Goon Kok Loon ** 4 4 4 4 - - 2 2 Tan Choon Huat 5 5 - - - - - - Soo Eng Hiong 5 5 - - - - - - Column a : Number of meetings held while as a member Column b : Number of meetings attended * Referred to as Compensation Committee in previous years ** Appointed on 27 February 2004
1.3	The Board comprises seven directors of whom three are executive directors and four are non-executive and independent directors. Key information regarding the Directors is given on page 15 of this annual report.
1.4	The Company's Executive Chairman, Mr Wong Ngit Liong, is also the Chief Executive Officer ("CEO") of the Group. The Board believes that there is no need for the role of Chairman of the Board and the CEO to be separated as there is good balance of power and authority with all the committees chaired by independent directors.
1.5	To ensure that the Board is able to fulfill its responsibilities, Management provides annual budget figures, monthly management accounts, and other relevant information as and when required. The Directors are provided with the contact details of the Company's senior management and Company Secretary to facilitate access to them.
1.6	The Company will consider appropriate training programmes for directors to meet their relevant training needs. Orientation programmes are organized for new directors to ensure that they are familiar with the Company's business and governance policies.
1.7	The Company Secretary is present at all Board meetings. It is the responsibility of the Company Secretary to ensure that Board procedures and applicable rules and regulations are followed and complied with.
1.8	Nominating Committee ("NC")
1.8.1	The Code prescribes guidelines on various Board matters, including the Board's conduct of its affairs, its composition, membership, performance and access to information. The NC's responsibility is to oversee Board membership and monitor Board performance.
1.8.2	The NC's principal function is to: ensure that the Board comprises members with suitably diverse backgrounds in order to meet the Company's operational and business requirements; establish a formal and transparent process for the appointment of new Directors; nominate Directors retiring by rotation for re-election / re-appointment at every Annual General Meeting ("AGM") pursuant to Articles 92 and 93 of the Company's Articles and Section 153 of the Companies Act Cap 50; ensure that all Directors submit themselves for re-nomination and re-election at least once every three years; assess the Directors' independence; evaluate the Board's performance and effectiveness, and propose recommendations, if any, for the Board's approval.
1.8.3	The NC is chaired by Mr Koh Lee Boon and comprises two other members, namely Mr Cecil Vivian Richard Wong and Mr Wong Ngit Liong.
1.8.4	The NC met twice in 2004.
1.8.5	In evaluating the Board's performance, the NC uses both quantitative and qualitative assessment measurements, such as the success of the strategic and long-term objectives set by the Board, and the effectiveness of the Board in monitoring Management's performance against the goals set. The NC initiated a Board performance evaluation in 2004. Information was gathered through a questionnaire to the Directors. The evaluation concluded that: the quality of information disseminated to the Board members was good; the Board and the Company's management enjoyed a cordial relationship that encouraged communication and participation; the Board demonstrated responsibility and proactiveness; there was a high standard of conduct amongst members of the Board; the Board conducted its meetings well and decision making processes appeared satisfactory; and the Board comprised competent directors.
1.8.6	The evaluation process also recommended that: a formal evaluation process be implemented to assess the CEO's performance; and the NC initiates the planning of CEO succession.
1.8.7	The NC has nominated the directors retiring by rotation at the forthcoming AGM for re-election. In considering the nomination, the NC took into account the contribution of the directors with reference to their attendance and participation at Board and other Board committee meetings as well as the proficiency with which they have discharged their responsibilities.
2.	REMUNERATION MATTERS
2.1	Remuneration Committee ("RC")
2.1.1	The Compensation Committee was renamed Remuneration Committee in 2004. The RC is chaired by Mr Koh Lee Boon and comprises three other members, namely Mr Cecil Vivian Richard Wong, Mr Goon Kok Loon and Mr Wong Ngit Liong.
2.1.2	The RC's principal function is to: review and recommend to the Board specific remuneration packages and the terms of employment for the CEO and executive directors of the Group and for employees related to the executive directors and controlling shareholders of the Group; review the remuneration framework for the Board and the Group's key executives; and administer the Company's Executive Share Option Scheme ("ESOS"), which has been approved by shareholders of the Company.
2.1.3	The RC met three times in 2004.
2.1.4	Directors' fees are set in accordance with a remuneration framework of basic fees. Executive Directors do not receive fees. Non-Executive directors are paid fees, subject to shareholders' approval at the Annual General Meeting ("AGM"). The RC has recommended the directors' fees for 2004, subject to approval by shareholders at the Company's forthcoming AGM. A breakdown showing the level and mix of each individual Director's remuneration paid and payable for 2004 is as follows: Remuneration Band# and Name of Director Fee* % Total Basic Remuneration+ % Total Variable Remuneration** % Total Remuneration % Below S$250,000 - Goh Geok Ling - Cecil Vivian Richard Wong - Koh Lee Boon - Goon Kok Loon 100 100 100 100 - - - - - - - - 100 100 100 100 S$3,500,000 to S$3,749,999 - Soo Eng - 7 93 100 S$4,500,000 to S$4,749,999 - Tan Choon Huat - 7 93 100 S$5,250,000 to S$5,499,999 - Wong Ngit Liong - 13 87 100
2.1.5	Rather than list the names of the top five key executives who are not directors of the Company, the following table shows a group-wide cross-section of key executives' remuneration within bands of S$250,000, and a breakdown of the remuneration into fixed and variable components. This should give a macro perspective of the remuneration pattern in the Group, while maintaining confidentiality of each employee's remuneration. Remuneration Band# No. of Key Executives Total Basic Remuneration+ % Total Variable Remuneration** % Total Remuneration % Below S$250,000++ S$250,000 - S$499,999++ S$500,000 - S$749,999 S$750,000 - S$999,999 S$1,000,000 - S$1,249,999 S$1,250,000 - S$1,499,999 S$1,500,000 - S$1,749,999 S$2,000,000 - S$2,249,999 9 9 7 3 2 1 1 1 61 60 30 24 14 8 12 8 39 40 70 76 86 92 88 92 100 100 100 100 100 100 100 100 # Remuneration bands within which no directors and executives fall will not be included * Subject to approval by shareholders as a lump sum at the AGM for FY2004 + Inclusive of employer's CPF contribution ** Inclusive of employer's CPF contribution, annual wage supplement, bonuses, gains from the exercise of share options granted under the Venture Corporation Limited ESOS, and benefits in kind such as housing and car allowance ++ Includes executives who have worked with the Group for less than 1 year
2.1.6	There are no employees in the Group who are immediate family members of a director or the CEO.
3.	ACCOUNTABILITY AND AUDIT
3.1	The Board currently provides shareholders with the Company's performance, position and prospects on a quarterly basis via announcements on the SGXNET and the corporate website.
3.2	Audit Committee ("AC")
3.2.1	The AC comprises four members, all of whom are non-executive. They are Mr Cecil Vivian Richard Wong (Chariman), and Mr Koh Lee Boon, Mr Goh Geok Ling and Mr Goon Kok Loon.
3.2.2	The function of the AC is to : recommend to the Board the re-appointment of external auditors, to approve the remuneration of external auditors, and to review the scope and result of the audit and its cost effectiveness; inquire of other committees, the Management, Head of Internal Audit ("IA") and external auditors on significant risks and exposure that exist, and assess the steps Management has taken to minimize such risks to the Company; review with the Chief Financial Officer and external auditors at the completion of the quarterly reviews and annual examination: the Company's quarterly, interim and annual financial statements and related footnotes, including accounting principles; the external auditors' audit of the financial statements and reports thereto; the adequacy of the Company's system of accounting controls; the assistance given by the Management to external auditors; any related significant findings and recommendations of the external auditors and internal auditors together with Management's response thereto; and any significant changes required in the external auditors' plan, serious difficulties or disputes with Management encountered during the course of the audit and their resolution, and any other matters relating to the conduct of the audit. consider and review with Management and the Head of IA annually: significant findings during the year and Management's response thereto; the effectiveness of the Company's internal controls over management, business and service systems and practices; changes required in the planned scope of their audit plan and difficulties encountered in the course of their audit, including any restrictions on the scope of their work or access to required information; and the internal audit department budget and staffing. review legal and regulatory matters that may have a material impact on the financial statements, related exchange compliance policies, and programmes and reports reviewed from regulators; meet with the Head of IA, the external auditors, other committees, and Management in separate executive sessions to discuss issues that these groups believe should be discussed privately with the AC; and report actions and minutes of the AC to the Board with such recommendations as the AC may deem appropriate.
3.2.3	The AC met five times in 2004.
3.2.4	The AC has full access to, and the co-operation of Management. The external auditors and Head of IA have unrestricted access to the AC.
3.2.5	The AC meets with the external auditors without the presence of Management, at least once a year.
3.2.6	The AC has reviewed the Company's risk assessment, and based on management controls in place, is satisfied that there are adequate internal controls within the Company. The AC expects risk assessment to be a continuing process.
3.2.7	The AC has reviewed all non-audit services provided by the external auditors during the year and is of the opinion that the provision of such services will not affect the independence of the external auditors.
3.3	The Company's IA function was established in 2002. The IA Department reports directly to the chairman of the AC on audit matters, and to the CFO on administrative matters. The AC reviews and approves the annual IA plans and resources to ensure that the IA Department has the necessary resources to adequately perform its function.
3.4	The IA Department is responsible for reviewing the effectiveness of internal control system and procedures, such as financial, operational and compliance controls, for the Company as well as its subsidiaries (both local and overseas). The IA will meet the standards set by nationally or internationally recognized professional bodies.
4.	COMMUNICATION WITH SHAREHOLDERS
4.1	The Company conveys its financial performance, position and prospects on a quarterly basis via announcements to the SGX and the Company's corporate website. The Company also holds briefings for the media and the investment community when its results are announced.
4.2	The Company does not practise selective disclosure. Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Results and annual reports are announced or issued within the mandatory period and are available on the Company's corporate website.
4.3	The Company has a corporate communications team to communicate with investors on a regular basis and attend to their queries. Such communication is reported to the Board of Directors on a regular basis. All shareholders of the Company receive its annual report and a notice of AGM. The notice is also advertised in the newspapers. At AGMs, shareholders are given the opportunity to air their views and ask the directors, Management or external auditors questions regarding the Company. All directors, external auditors and company secretary are present at every AGM.
4.4	The Articles currently do not provide for shareholders to vote at AGMs in absentia such as by mail, email or fax. The Company will consider implementing the relevant amendment to the Articles if the Board is of the view that there is demand for the same, and after the Company has evaluated and put in place the necessary security and other measures to facilitate absentia voting and protect against errors, fraud and other irregularities.
5.	INTERNAL CODE ON DEALINGS WITH SECURITIES
5.1	An internal code on dealing in securities of the Company has been issued to directors and officers setting out the implications on insider trading. The Company's directors and officers are not allowed to deal in the Company's shares within two weeks and one month of the announcement of the Company's quarterly and full year results respectively.
5.2	The directors and officers are not expected to deal in the Company's securities on considerations of a short-term nature.
5.3	Directors and officers are required to observe insider trading provisions under the Securities Industries Act at all times even when dealing in the Company's securities within the permitted periods. Directors of the Company are required to report all dealings to the Company Secretary.
6.	MATERIAL CONTRACTS
6.1	There are no material contracts entered into by the Company or any of its subsidiaries involving the interests of the CEO or any director.