The Company remains committed to maintaining high standards of corporate governance and endeavours to continuously keep abreast of developing practices in corporate governance.

The framework of the Company’s corporate governance as set out in its own Code of corporate governance is substantially in line with the principles of the Singapore Code of Corporate Governance (“Code”) issued by the Singapore Exchange Securities Trading Limited (“SGX-ST”).

The following sections describe the corporate governance practices adopted by the Company.

Board's Conduct Of Its Affairs
Principle 1

The Company is headed by an effective Board which oversees the business affairs of the Company. The Board carries out this oversight function by assuming responsibility for effective stewardship and corporate governance of the Company and the Group. Its role and responsibilities include inter alia setting the overall business strategy, policies and direction for the Company and the Group.

The Board also reviews and approves key strategic and financial initiatives, the business plan and budget, quarterly, interim and annual results, and major investments and divestments.

The Board meets at least on a quarterly basis to review inter alia the Company’s quarterly results. During the last financial year, the Board held four meetings. New directors are apprised of the business activities of the Group and its strategic directions. As provided in the Company’s Articles of Association, Directors may convene Board meetings by teleconferencing or videoconferencing.

All Directors are provided with relevant information on the Company’s policies, procedures and practices relating to governance issues, including disclosure of interests in securities, dealings in the Company’s securities, restrictions on disclosure of price sensitive information and disclosure of interests relating to the Group’s businesses. Directors are also updated regularly on key regulatory and accounting changes at Board Meetings.

Currently, the Board comprises seven well-qualified members who are business leaders and professionals with financial, banking and legal backgrounds. The Board considers its present size to be appropriate after taking into account the current nature and scope of the Group’s operations. The majority of the Directors are non-executive and are considered independent by the Nominating Committee. The Nominating Committee determines annually the independence of Directors.

To assist the Board in executing its duties, the Board has delegated specific functions to the following Board committees:

1. Executive Committee: The Executive Committee is entrusted with the conduct of the Company’s business and affairs, in line with the overall strategy set by the Board. The members of the Executive Committee are Messrs Quek Leng Chan (who is the Chairman), Quek Chee Hoon (who is the Group President and Chief Executive Officer [“CEO”]) and Kwek Leng Hai, and certain key senior Management personnel. During the last financial year, the Executive Committee held six meetings.

2. Audit Committee:The members of the Audit Committee comprise Messrs Reggie Thein (who is the Chairman), Timothy Teo and Francis Siu, all of whom are nonexecutive Directors and are considered independent. As part of the Company’s corporate governance practices, the CEO participates at all Audit Committee meetings. The Audit Committee held four meetings during the last financial year.

3. Executives' Share Option Scheme ("ESOS")Committee: The ESOS Committee assists the Board in administering the ESOS. The ESOS Committee comprises Mr Sat Pal Khattar, a non-executive Director and Mr Quek Leng Chan, an executive Director.

4. Nominating Committee: This committee comprises three non-executive Directors, two of whom are considered to be independent. Mr Sat Pal Khattar chairs the Nominating Committee and the other members are Messrs Kwek Leng Hai and Timothy Teo. This committee which meets at least annually, held two meetings in the last financial year.

5. Remuneration Committee: This committee comprises two non-executive independent Directors (Mr Sat Pal Khattar who is the Chairman and Mr Reggie Thein, member) and an executive non-independent director, Mr Quek Leng Chan. The Board is of the view that the inclusion of an executive director in the Remuneration Committee is appropriate and in the best interests of the Company and its subsidiaries. The Remuneration Committee which meets at least annually, held two meetings in the last financial year.

There is a clear division of responsibilities in the respective roles and functions of the Chairman and CEO as these appointments are held separately by Messrs Sat Pal Khattar and Quek Chee Hoon respectively. The Chairman oversees the Group’s corporate governance structure and conduct, in particular, the effective functioning of the Board and its Board committees. The Chairman also ensures that shareholders’ questions and concerns are addressed at the general meetings of the Company. The CEO leads the Management team by providing entrepreneurial leadership and strategic directions. He oversees the business operations and affairs of the Group and monitors the performance of Management against pre-agreed targets.

As the Chairman is a non-executive Director, the Company Secretary assists the Chairman to schedule and prepare agendas for Board meetings. The CEO ensures the quality and timeliness of information flow between the Board and Management, which comprises key executive personnel of the Company.

The Nominating Committee reviews and recommends all new Board appointments and also the re-nomination and re-appointment of Directors to the Board. As prescribed by the Company’s Articles of Association and recommended by the Code, one-third of the Directors for the time being are required to retire from office and are subject to re-election by shareholders at the Company’s Annual General Meeting (“AGM”). All Directors also retire from office and are subject to re-election at least once in every three years. Directors of or over 70 years of age are required to be re-appointed every year at the AGM under Section 153(6) of the Companies Act.

On an annual basis, the Nominating Committee assesses the effectiveness and performance of the Board as a whole and the contributions of each Director. The assessment takes into account the performance of the Company, attendance and contributions of Directors at meetings of the Board and Board Committees and Directors’ participation in the affairs of the Company, including a review of matters such as the independence of Directors, their individual skills and experience as well as overall Board size and composition. The results of the Nominating Committee’s assessment for the financial year ended 30 June 2011 had been communicated to and accepted by the Board.

Directors have separate and independent access to Management and the Company Secretary, whose role includes inter alia ensuring that Board procedures as well as applicable rules and regulations are complied with. The Company Secretary attends all Board and Board Committee meetings. Management keeps the Board apprised of the Company’s operations and performance through regular updates and reports as well as through separate meetings and discussions. Directors may take independent professional advice at the Company’s expense, if necessary.

Internally, Management presents the Board with reports of and updates on the Company’s performance, financial position and prospects for review at each Board meeting.

Principles 7, 8 & 9

The Remuneration Committee, in consultation with the Executive Committee, reviews and recommends to the Board a framework of remuneration for the Board and key executives.

Non-executive Directors do not receive any salary. However, non-executive Directors receive directors’ fees that are based on corporate and individual responsibilities and which are in line with industry norm. The fees for the Directors for the last financial year amounted in the aggregate to S$409,916 and are subject to the approval of shareholders.

The breakdown (in percentage terms) of the remuneration of the Directors of the Company is disclosed in Note 28c to the Financial Statement. The remuneration package comprising mainly salaries and bonuses, for the top seven key executives who are not Directors of the Company, is disclosed in bands of S$250,000 so as to maintain confidentiality of staff remuneration matters. This information is contained in Note 28d to the Financial Statement.

The Company and its principal subsidiaries do not have any employees who are the immediate family members of any of the Directors or the CEO and whose remuneration exceeded S$150,000 during the last financial year.

Audit Committee And Internal Controls
Principles 10, 11, 12 & 13

The terms of reference of the Audit Committee are set out in the Company's own Code of corporate governance.

In performing its functions in the last financial year, the Audit Committee undertook, inter alia, the following:-

• reviewing the Group's quarterly, interim and final financial statements prior to submission to the Board;
• meeting with the Company's external and internal auditors, in the absence of Management;
• reviewing the independence of the Company's external auditors;
• ensuring that a review of the effectiveness of the Company’s material internal controls (including financial, operational and compliance controls, and risk management) was conducted;
• noting or reviewing interested person transactions, as recorded in the Company's Register of Interested Person Transactions;
• reviewing all non-audit services provided by the external auditors of the Company and confirming that such nonaudit services do not affect the independence of the external auditors; and
• reviewing the adequacy of the internal audit function.

The Company has put in place a whistle-blowing policy, which sets out procedures and rules for employees to raise responsibly, in confidence, concerns about possible improprieties for investigation.

The Company has an internal audit team comprising qualified personnel, which assists the Audit Committee in discharging its responsibilities. To assist the Board in inter alia, identifying, assessing and managing the significant business risks faced by the Group within its operating environment, Internal Audit reviews the Group’s enterprise risk management framework which incorporates a Risk Register to capture the risk profile of the Group and the strategy / internal controls in place to mitigate these significant business risks.

The internal mitigating controls under the risk management framework may not eliminate all risks of failure but these control mechanisms seek to provide a reasonable assurance against material misstatement or loss.

Having regard to the reviews carried out by the Audit Committee and internal auditor, the Board believes that the system of internal controls maintained by Management together with the ongoing process of identifying, assessing and managing significant risks faced by the Group, should meet the needs of the Company in its current business environment.

Principles 14 & 15

The Company ensures timely and adequate disclosure of information on matters of material impact to shareholders. Shareholders are provided with information on the Company’s financial performance, position and prospects through announcements released through SGXNet and through the Company’s annual reports, press releases to the SGX-ST and the Company’s website at http://www. guocoland.com.sg.

Shareholders are given opportunities to participate at the Company’s general meetings. The Board and Management are present at these meetings to address any questions that shareholders may have. The Company’s external auditors are also present at the Company’s annual general meetings to assist the Board in addressing any queries raised by shareholders.

The Company has in its own Code of corporate governance provided guidelines to the Company’s officers in relation to dealings in securities. These guidelines set out, inter alia, that officers should refrain from dealing in any securities of the Company at any time when in possession of unpublished price-sensitive information in relation to those securities, and during the Company’s close period which is defined as two weeks immediately preceding the announcement of the Company’s quarterly results or half yearly results and one month preceding the announcement of the annual results, as the case may be, up to and including the date of announcement of the relevant results. Officers are also reminded to refrain from dealing in the Company’s securities on short-term considerations. These guidelines have been disseminated to all directors, officers and key employees of the Group.