守则一

守则一: 董事会对其职务的管理

The principal functions of the Board are:

1. to provide entrepreneurial leadership and approve the broad policies, strategies and financial objectives of the Company and monitor the performance of the Management;
2. to ensure that necessary financial and human resources are in place for the Company to meet its objectives;
3. to oversee the processes for evaluating the adequacy of internal controls, financial reporting and compliance;
4. to approve the appointment of directors to the Board and the appointment of key personnel;
5. to approve annual budgets, major funding proposals, investment and divestment proposals;
6. to assume responsibility for corporate governance; and
7. to set the Company’s values and standards, and ensure that obligations to shareholders and others are understood and met.

Matters which are specifically referred to the Board for decision are those involving approval of accounts and results announcements, dividend payments or other returns to shareholders, corporate or financial restructuring and share issuance, material acquisitions and disposal of assets.

The Board conducts regularly scheduled meetings on a quarterly basis. Ad-hoc meetings are convened when circumstances require. The Company’s articles of association provide for meetings by means of teleconference. The attendance of the directors at meetings of the Board and Board committees for the financial year ended 30 June 2011 is as follows.

Directors’ Attendance at Board & Committee Meetings

* Mr Robert James Yee Sang Eu resigned as a member of the Compensation Committee with effecft from 3 May 2011.
** Mr Malcolm Man-Chung au resigned as a director with effect from 25 august 2011.
*** Mr Matthew J. Estes was appointed as a director with effect from 29 october 2010.
He was appointed as a member of the Compensation Committee with effect from 3 May 2011.

The Company provides facilities such as the conduct of internal courses for the directors to meet their training needs. Directors are also provided regular update, briefing from time to time by professional advisors, auditors and management on new laws, rules, regulations, listing requirements, governance practices, changes in accounting standards and business and risk management issues applicable or relevant to the performance of their duties and responsibilities as directors. A new director is given orientation on the Group’s businesses. The Company adopts a policy whereby directors are encouraged to request for further explanations, briefings or informal discussions on the Company’s operations or business with the Management.

二

守则二: 董事会结构与指引

The Board currently has six (6) directors, comprising three (3) independent directors and three (3) executive directors.

The profile of directors are provided under the Board of directors section.

The Board comprises directors who as a group provide core competencies such as accounting or finance, business or management experience, industry knowledge and strategic planning experience. This enables the Board to interact and work with Management through an open exchange of ideas and views to help shape the strategic process. To assist in the execution of its responsibilities and to comply with the requirements, the Board has established sub-committees: an audit Committee, a nominating Committee, a Strategic direction Committee and a Compensation Committee, under which the Executives’ Share option Scheme Committee functions as a sub-committee. These committees function within clearly defined terms of reference and operating procedures, which are reviewed on a regular basis. The effectiveness of each committee is also constantly monitored.

The Board’s structure, size and composition is reviewed annually by the nominating Committee ("NC"). The NC is of the view that the current size of the Board is appropriate to facilitate effective decision making, taking into account the nature and scope of the Group’s operations. As more than one-third of the members of the Board is independent, the NC is satisfied that there is sufficient independent element within the Board to ensure objective judgment is exercised on corporate affairs.

三

守则三: 董事会主席及集团总裁职务

The roles of the Chairman of the Board and Chief Executive officer are held by two separate individuals. Mr Robert James Yee Sang Eu is the Chairman of the Board of directors. He assumed an executive role in the Group with effect from 1 March 2011. Mr Richard Yee Ming Eu is the CEO of the Group. Mr Robert James Yee Sang Eu and Mr Richard Yee Ming Eu are cousins.

The Board is of the opinion that despite both the Chairman and the Group CEO being Executive directors, with the composition of the Board comprising more than one-third Independent directors and the presence of a lead Independent director as discussed below, there are sufficient checks and safeguards to ensure that the process of decision making by the Board is independent and based on shared agreement without any individual exercising any significant concentration of control or authority.

In addition, the responsibilities of the Chairman and the Group CEO are clearly defined. The Group CEO is the most senior executive in the Company and bears responsibility for the Company’s business, while the Chairman is responsible for the leadership of the Board. The Chairman schedules board meetings and sets board agenda in consultation with the Group CEO. The Chairman reviews most board papers before they are submitted to the Board and ensures that all Board members are provided with complete, adequate and timely information. As a matter of practice, board papers are sent to directors approximately seven days in advance for directors to be adequately prepared for the meetings.

The Group CEO executes decisions taken by the Board and is responsible for the day-to-day operations of the Company. The Group CEO presides over a Management Committee ("MC") consisting of the Executive directors, Chief Financial officer, Chief Scientific officer, Managing directors and Group General Managers. In setting the business direction of the Company, the MC convenes meetings as and when necessary to review the Group’s operational performance and evaluates new projects and investment opportunities. In line with good corporate governance principles, the Board has also set up a Strategic direction Committee which comprised Mr Robert James Yee Sang Eu, dr Jennifer Gek Choo lee and Mr Malcolm Man-Chung au during the financial year ended 30 June 2011. The said Committee was reconstituted on 25 august 2011 and now comprises all the members of the Board. The primary role of this Committee is to work with Group CEO and MC to set the strategic direction of the Group.

Lead Independent Director

Dr Jennifer Gek Choo lee, a non-executive director was appointed as lead Independent director in 1 January 2010 to lead and co-ordinate the activities of the non-executive directors.

The lead Independent director assists the Chairman and the Board to assure effective corporate governance in managing the affairs of the Board and the Company. She presides at meetings of the Board in the absence of the Chairman and sets the agendas and serves as chairman of the meetings of the non-executive directors. The lead Independent director is the principal liaison on Board issues between the non-executive directors and the Chairman.

四，五

守则四: 董事会成员

守则五: 董事会表现

Nominating Committee

1. Ian Wayne Spence (Chairman) (Independent)
2. Dr Jennifer Gek Choo Lee (Independent)
3. Malcolm Man-Chung Au (Independent)

1. Ian Wayne Spence (Chairman) (Independent)
2. Dr Jennifer Gek Choo Lee (Independent)
3. Richard Yee Ming Eu (Executive)

The NC Chairman is not, or is not directly associated with, a substantial shareholder.

The NC’s principal functions are:

1. to identify candidates and review all nominations for the appointment or re-appointment of members of the Board of Directors; the Chief Executive Officer of the Company; senior executive staff; members of the various Board committees, for the purpose of proposing such nominations to the Board for its approval;
2. to set criteria for identifying candidates and reviewing nominations for the appointments referred to in paragraph 1;
3. to determine annually the independence of the directors. If the NC determines that a director is independent, notwithstanding that he has one or more of the relationships (as set forth in Guidance Note 2.1 of the Code), it will disclose in full the nature of the director’s relationship and bear responsibility for considering him independent;
4. to decide how the Board’s performance may be evaluated and propose objective performance criteria for the Board’s approval;
5. to decide whether a director is able to and has been adequately carrying out his or her duties as a director of the Company particularly when the director has multiple board representations;
6. to assess annually the effectiveness of the Board as a whole, and the contribution by each individual director to the effectiveness to the Board which enables the NC to identify areas for future improvement to the Board’s effectiveness and recommendations are made to the Board for consideration;
7. to oversee the management, development and succession planning of the Group.

New directors are at present appointed by the Board, after the NC recommends their appointment. Such new directors are required to submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company. The NC assesses and recommends to the Board, Directors who retire pursuant to the Articles of Association of the Company and stand for re-election at the next AGM.

六

守则六: 查阅信息

Directors are provided with background and other relevant information to support decision making. Management provides the Board with monthly financial reports and quarterly management reports. The directors have also been provided with email particulars and telephone numbers of the Company’s Group General Managers to facilitate access.

The Company Secretary attends all board meetings and is responsible for ensuring that the Company complies with the statutory requirements of the Companies Act. Together with the management staff, the Company Secretary is responsible for compliance with all other rules and regulations that are applicable to the Company.

In the furtherance of their duties, the directors may seek independent advice, if necessary, at the Company’s expense.

Changes to regulations and accounting standards are closely monitored by Management. Directors are briefed either during Board meetings or by the Company Secretary of these changes especially where these changes have an important bearing on the Company’s or directors’ disclosure obligations.

七，八，九

守则七: 薪酬政策程序

守则八: 薪酬水平

守则九: 薪酬披露

The members of the Compensation Committee (“CC”) are as follows:

1. Dr Jennifer Gek Choo Lee (Chairman) (Independent)
2. Ian Wayne Spence (Independent)
3. Matthew J. Estes (Independent) (appointed on 3 May 2011)

Mr Robert James Yee Sang Eu relinquished his role as a member of CC with effect from 3 May 2011.

The CC’s principal responsibilities are to review the annual remuneration package of the executive directors and fees for Board members. The review covers all aspects of remuneration, including but not limited to directors’ fees, salaries, bonuses and benefits in kind based on the performance of the Group and the individual. The recommendations are submitted to the Board for endorsement.

The CC reviews the remuneration of the senior management of the Group and approves the framework of remuneration for the entire organization including the structuring of the incentive plans. The review takes into consideration the Company and the individual’s performance and the contributions to the business. The Group seeks to offer a competitive level of remuneration to attract, motivate and retain senior management of the required competency to run the Group successfully.

The Company adopts a remuneration policy that comprises a fixed as well as a variable component. The fixed component is in a form of base salary and benefits while the variable component is in a form of performance bonus and grant of shares and share options under the Company’s Employees’ Share option Scheme (“ESOS”) and performance Share plan (“PSP”).

A sub-committee under the purview of the CC administers the ESOS and PSP and comprises:

1. Dr Jennifer Gek Choo Lee
2. Ian Wayne Spence
3. Robert James Yee Sang Eu
4. Richard Yee Ming Eu
5. Robert James Yee Sang Eu (resigned w.e.f. 3 May 2011)

More details on the ESOS and PSP are provided in the Directors’ Report.

An executive director is paid a basic salary and a performance related bonus. Adjustments to the remuneration package of an executive director are subject to review and approval by the Board of Directors. Under the terms of the agreement, the Chairman is paid a flat fee and there is no performance-related element. Since Mr Robert James Yee Sang Eu assumed an executive role in the Group in addition to his role as Chairman of the Board on 1 March 2011, the payment of his Director’s Fee ceased effective 1 March 2011. Non-executive directors have no service contracts.

The table below shows breakdown of Directors’ Remuneration (in percentage terms)

1. Name of Directors	Renumeration Bands $	Salary %	Bonus %	Directors Fee %	Other Benefits* %	Total %
   Richard Yee Ming Eu	500,000 to 749,999	67	31	-	2	100
   Clifford Yee Fong Eu	250,000 to 499,999	76	19	-	5	100
   Robert James Yee Sang Eu	0 to 249,999	68	-	32	-	100
   Dr Jennifer Gek Choo Lee	0 to 249,999	-	-	100	-	100
   Ian Wayne Spence	0 to 249,999	-	-	100	-	100
   Matthew J. Estes	0 to 249,999	-	-	100	-	100
   Malcolm Man-Chung Au	0 to 249,999	-	-	100	-	100
   * excluding share options which are disclosed in Directors’ Report

    

2. The table below shows the range of gross remuneration received by key executives (who are not directors of the Company) of the Group

   Number of executives of the Group in remuneration bands	2011
   $250,000 to $499,999	5
   Below $250,000	22
   Total	27

    

3. Other than Robert James Yee Sang Eu, Richard Yee Ming Eu and Clifford Yee Fong Eu who are first cousins, no employee of the Company and its subsidiaries is an immediate family member of a Director or the CEO of the Company.

十，十四，十五

守则十: 责任制

守则十四: 与股东沟通

守则十五: 股东的深入参与

The Company holds briefings for the media and the analysts on its half-year and its full-year results. The results announcements are released through the SGXNET system and via news releases, and are also posted on the Company’s website. All material information relating to the Company is disseminated via SGXNET followed by a news release. All announcements, including the Annual Report, are available on the Group’s website at www.euyansang.com.

The Company has an investor relations team headed by the Chief Executive Officer and assisted by the Chief Financial Officer whose function is to communicate with investors and attend to their queries. Shareholders of the Company receive the annual report and notice of AGM. At AGMs, shareholders are given the opportunity to ask the Management questions regarding the Company and to air their views.

十一

守则十一: 审计委员会

The Audit Committee (“AC”) comprises three (3) independent directors. The composition of the AC, during the financial year ended 30 June 2011, was as follows:

1. Ian Wayne Spence (Chairman) (Independent)
2. Dr Jennifer Gek Choo Lee (Independent)
3. Malcolm Man-Chung Au (Independent)

During the year, the AC met with the Group’s external auditors and the internal auditors to review the audit plans and the reports of the external auditors and internal auditors. It had also evaluated the adequacy of the internal controls of the Company with the auditors and discussed their findings with the Management. The AC reviewed the quarterly (Q1, Q2 & Q3), half-year and full-year results announcements before their submission to the Board for approval.

The principal functions of the AC are:

1. to review the audit plans and findings of the external auditors;
2. to review the quarterly (Q1, Q2 & Q3), half-yearly and full year results announcement to ensure integrity of the financial statements and announcements prior to submission to the Board for approval and release;

3. to evaluate the adequacy of the internal control systems of the Company by reviewing the written reportsfrom the external auditors;

4. to review the Company’s risk management processes;
5. to review related party transactions, if any;
6. to review the scope and results of the audit and its cost effectiveness, and the independence and objectivity of the external auditors annually; and
7. to recommend to the Board on the appointment, re-appointment and removal of the external auditor and approving the remuneration and terms of engagement of the external auditor.

To create an environment for open discussion on audit matters, the AC meets with the external and internal auditors, without the presence of Management, at least once a year.

Management has put in place a Whistle Blowing Policy, whereby employees of the group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matters and for appropriate follow up action.

The AC has reviewed the non-audit services provided by the external auditors for FY2011 and is satisfied that such services would not affect the independence of the external auditors. Accordingly, it has recommended the reappointment of Messrs Ernst & Young LLP as Auditors of the Company at the forthcoming Annual General Meeting.

The AC is authorized to investigate any matter within its terms of reference and has been given full access to and cooperation from Management to enable the committee to fulfill its responsibilities effectively. The AC has full discretion to invite any director or any executive to attend its meetings.

十二，十三

守则十二: 内部控制

守则十三: 内部审计

The Company has outsourced its Internal Audit (“IA”) function. The scope of the internal audit is:

1. to review the effectiveness of the Group’s material internal controls;
2. to provide assurance that key business and operational risks are identified and managed;
3. to determine that internal controls are in place and functioning as intended; and
4. to evaluate that operations are conducted in an effective and efficient manner.

Material non-compliance and internal control weaknesses noted during the internal audit and the recommendations thereof are reported to the Chairman of the AC as part of the review of the Group’s internal control system. For non-compliance of administrative matters, the matter is reported to the CEO. The AC reviews the Internal Auditor’s reports. To ensure the effectiveness and adequacy of the internal audit function, the AC reviews the Internal Auditor’s scope of work on an annual basis.

Securities Transactions

The Company has issued a policy on securities dealing by officers of the Company and its subsidiaries (comprising directors and key personnel) in the form of a Code of Best Practices on Securities Dealings (the “Code”) to govern and regulate transactions relating to securities of the Company. The Code was based on the best practices on dealings in securities issued by the SGX-ST and has been circulated to all relevant parties.

Under the Code, officers are prohibited from dealing in securities of the Company on short term considerations and during the period commencing two (2) weeks before the announcement of the Company’s financial statements for each of the first three quarters of its financial year and one month before the announcement of the Company’s full year financial statements.

Material Contracts

There were no material contracts of the Company or its subsidiaries involving the interests of any directors or controlling shareholders subsisting as at the financial year ended 30 June 2011.