Current Composition of Board Committees

Audit Committee
Philip Tan Tee Yong	Member (Chairman)
Colin Ng Teck Sim	Member
Khoo Ho Tong	Member

Nominating Committee
Colin Ng Teck Sim	Member (Chairman)
Khoo Ho Tong	Member
Michael Mun Hong Yew	Member

Remuneration Committee
Khoo Ho Tong	Member (Chairman)
Philip Tan Tee Yong	Member
Colin Ng Teck Sim	Member

Lead Independent Director
Philip Tan Tee Yong	Chairman for Audit Committee Member of Remuneration Committee

Corporate Governance Report - Extracted from the 2008 Annual Report

1. The Board's Conduct of Affairs
2. Chairman and Chief Executive Officer
3. Lead Independent Director
4. Board Membership
5. Board Performance
6. Access to Information
7. Board Committees
8. Audit Committee
9. Remuneration Matters
10. Nominating Committee
11. Disclosure of Remuneration
12. Accountability
13. Internal Adult
14. Whistle Blower Policy
15. Internal Controls
16. Securities Trading
17. Interested Person Transactions
18. No Material Contract
19. Communication with Shareholders

Whistle Blowing Policy - Implemented on 2nd October 2006

1. Preamble
2. Reporting Of Violations
3. Internal Auditor Role
4. Acting In Good Faith

The Board and management of Aztech Systems Ltd firmly believe that good corporate governance is essential to the long term sustainability of the Company’s businesses and performance. Aztech is committed to maintaining a high standard of corporate conduct and continues to place importance on its corporate governance processes and systems so as to ensure greater transparency, accountability and protection of shareholders’ interests.

This report describes Aztech’s corporate governance practices and structures that were in place during the financial year, with specific reference made to the principles and guidelines of the Code of Corporate Governance 2005 (the “Code”). In developing and adopting the Group’s corporate governance polices and practices, Aztech has adopted a balanced approach by observing the terms and spirit of the Code.

1. The Board’s Conduct of Affairs

The Board is entrusted with the responsibility of overseeing the business and corporate affairs of the Group.
The Board’s role is to:

• approve the overall strategies and initiatives of the Group;

• regularly review the Group’s financial performance;

• ensure adequate internal controls and manage the principle risks of the Group’s businesses; and

• set standards and values and ensure that obligations to the shareholders and other stakeholders are understood and met.

The Company’s internal guidelines stipulate that all strategic investment, divestment and acquisition projects shall first be
approved by the Board.

To facilitate effective management, certain functions of the Board have been delegated to various subcommittees appointed by
the Board, namely the Nominating Committee, the Remuneration Committee and the Audit Committee.

Matters requiring the Board’s decision and approval include:

• major funding proposals, investments, acquisitions and divestments;

• material transactions of capital assets exceeding $500,000 in value;

• expenditure of the Group in excess of $500,000 which is not in the budget;

• the annual budget;

• annual and quarterly financial reports;

• internal controls and risk management strategies and execution; and appointment of Directors and key management staff,
including review of performance and remuneration packages.

Key information, as required under the Code, regarding each Director is disclosed in the Appendix of this Report. The list of directorships or chairmanships, as the case may be, held by each Director, both present and those held over the preceding three years in other listed companies is also disclosed in the said Appendix.
2. Chairman and Chief Executive Officer

Mr. Michael Mun is both the Chairman and the Chief Executive Officer of the Company.

As Chairman, Mr. Michael Mun’s major responsibilities are:

• to ensure that Board meetings are held when necessary to enable the Board to perform its duties and facilitate the Company’s operations;

• to set Board meeting agendas in consultation with the company secretary and the Executive Directors;

• to review all Board papers;

• to ensure the quantity, quality and timeliness of the flow of information between the management and the Board . In this regard, he ensures that the Board is provided with adequate information that is required to make business decisions for the Group; and

• to ensure compliance with the Company’s guidelines on corporate governance.

Being the Chief Executive Officer, Mr. Michael Mun has overall responsibility for the management and daily operation of the
Group, and is supported by the Executive Directors and management staff.

The Board has not adopted the recommendation of the Code for a separation of the offices of the Chairman and the Chief
Executive Officer. The Board is of the view that there are already sufficiently strong and independent elements on the Board to
enable independence of objective judgment on affairs and operations of the Group by members of the Board, taking into account
factors such as the number of Independent and Non-Executive Directors on the Board, the appointment of a Lead Independent
Director as stated below as well as the contributions made by each member at Board meetings.

Both the Remuneration and Audit Committees are comprised of only Independent and Non-Executive Directors and there is a
majority of Independent and Non-Executive Directors in the Nominating Committee.

In view of the above, the Board is of the opinion that the role of Mr. Michael Mun as Chairman and Chief Executive Officer of the
Company concurrently does not affect the independence of the Board.


3. Lead Independent Director

Mr. Philip Tan, upon the recommendation of the Nominating Committee, was re-elected and appointed by the Board as the Lead
Independent Director for another period of two (2) years from 2 October 2008.

The major duties and responsibilities of the Lead Independent Director are:

• to lead the Independent and Non-Executive Directors i.e. non-management directors in providing and facilitating a non-executive perspective to matters discussed by the Board. In this regard, to co-ordinate the activities of other non-management directors and chair meetings of the non-management directors;

• to promote high standards of corporate governance; and

• to undertake such further responsibilities as may be determined by the Board from time to time.


4. Board Membership

Recommendations for nominations of new directors and re-appointment of existing directors are made by the Nominating
Committee and considered by the Board as a whole. No new Director was appointed to the Board in financial year 2008.

The Nominating Committee reviews and assesses candidates for directorships (including executive directorships) before
making recommendations to the Board. The Committee is chaired by Mr. Colin Ng who is not associated with a substantial
shareholder.

In evaluating a director’s contribution and performance for the purpose of re-nomination, the Nominating Committee takes into
consideration a variety of factors such as attendance, participation and contribution.
At each Annual General Meeting (“AGM”) of the Company, not less than one third of the directors for the time being (being those
who have been longest in office since their appointment or re-election) are required to retire from office by rotation. A retiring
director is eligible for re-election by the shareholders of the Company at the AGM.


5. Board Performance

The Directors have implemented a formal process for accessing the effectiveness of the Board as a whole, and the contribution
by each individual Director to the effectiveness of the Board.

The performance criteria for the Board’s effectiveness with respect to the Board as a whole, are adequacy of the Board meetings,
Board’s independence, Board’s team spirit, Board’s decision making ability as a whole, Board’s ability to strategise and propose
sound decisions, Board’s performance in relation to identifying and handling risks, making sound business decisions and the
Board’s performance in relation to discharging its responsibility in enhancing long term shareholders’ value. The measure of
the Board’s performance is also tested through its ability to lend support to management especially in terms of strategizing and
steering the Group in the right direction.

The Board assessment exercise provides an opportunity for each Director to obtain constructive feedback on whether he or she
has discharged his or her duties effectively, and the changes which should be made to enhance the effectiveness of the Board
as a whole. The individual Director assessment exercise allows for peer review with a view to raising the quality of the Board as
a whole. The Nominating Committee has concluded that the Aztech Board was effective during the year in review and generally
performed well in all areas.


6. Access to Information

The Board receives relevant, complete and timely information prior to Board meetings and on an on-going basis. Information
presented to the Board includes explanatory information relating to matters to be discussed such as business plan, budgets,
forecasts and quarterly internal financial statements. In respect of budgets, any material variance between projections and
actual results are disclosed and explained.

The Company Secretary attends all scheduled Board and Audit Committee meetings. The Company Secretary advises the
Company on procedures and relevant company legislation, rules and regulations, which are applicable to the Company.

All Directors regularly meet the senior management on an informal basis and have access to the senior management team and
independent professional advisers such as lawyers, external auditors and the Company Secretary at all times.


7. Board Committees

The Board Committees, namely the Nominating Committee, the Remuneration Committee and the Audit Committee are
empowered to make decisions on matters within their terms of reference and applicable limits of authority.

All the Board Committees’ activities are reported to the Board.

The number of Board and Board Committee meetings held in FY2008, as well as the attendance of each Board member at these
meetings, are disclosed below:

8. Audit Committee

The Audit Committee must comprise at least three Directors, all of whom must be non-executive Directors and the majority
of whom, including the Chairman must be Independent Directors. At least two members of the Audit Committee must have
accounting or related financial management expertise or experience.

The Audit Committee comprises of 3 members; namely,

Philip Tan Tee Yong, Chairman, Independent Director

Colin Ng Teck Sim, Independent Director

Khoo Ho Tong, Independent Director


The Audit Committee has full access to internal and external auditors. The Audit Committee also has full cooperation of, and
access to the management.

The main responsibility of the Audit Committee is to assist the Board in discharging its statutory and other responsibilities relating to internal controls, financial and accounting matters, compliances and business risk managements.

The Audit Committee overseas the audit undertaken by the internal and external auditors and reviews the effectiveness of the Company’s risk management mechanisms and internal controls. The Audit Committee also reviews the quarterly and annual financial statements and reviews and approves the annual audit plan of the internal and external auditors.

The Audit Committee is responsible for evaluating the independence and objectivity of the external auditors, and the nature and extent of the non-audit services provided by the external auditors.

During the financial year, the Audit Committee reviewed the management’s assessment of fraud risk and held discussions with the management and external auditors. The Committee was satisfied with the processes put in place to mitigate fraud risk exposure of the Group.

The Audit Committee also met with the external auditors, without the presence of the management and Executive Directors
during the financial year.

9. Remuneration Matters

The Remuneration Committee comprises 3 Directors, all of whom are non-executive and independent.

The main responsibility of the Remuneration Committee is to ensure a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of each member of the Board and Senior Management. The Remuneration Committee is also tasked to administer and review the share option scheme of the Company.

The Group CEO, who is not a member of the Remuneration Committee attends meetings of the Remuneration Committee when requested. The CEO does not participate in any discussions relating to his own performance and remuneration.

The Remuneration Committee recommends to the Board, a framework of remuneration which covers all aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, share options, and benefits-in-kind and specific remuneration packages for each Director. The Remuneration Committee ensures that the remuneration of the Directors and Senior Management commensurates with their performance, giving due regard to the financial and commercial health and business needs of the Group. No Director is involved in deciding his own remuneration.

The head of Human Resources Department assists the Remuneration Committee in performing its function. The Remuneration Committee has access to expert advice in the field of executive compensation outside the Company, if required.

All Directors receive Directors’ fees in accordance with their contributions, taking into account factors such as effort and time
spent, responsibilities of the Directors and the need to pay competitive fees to attract, motivate and retain the Directors. Directors’ fees are recommended by the Board for approval at the Company’s AGM.

The remuneration for the Executive Directors and the key executives comprise a basic salary component and a variable
component, based on the performance of the Group as a whole and their individual performance. The service agreements
entered into with four (4) Executive Directors, namely Mr Michael Mun, Ms Patricia Ng, Mr Jeremy Mun and Mr Martin Chia are
for a period of three years. The service agreements provide for termination by either the Executive Director or the Company upon giving written notice of not less than six months.

The Remuneration Committee also administers the Group’s share option scheme which was implemented on 10 March 2000 as a share incentive scheme. Details of the Scheme are set out on page 41 of this Annual Report.

The information related to the remuneration of the Directors is found in a separate section of this report.

10. Nominating Committee

The Nominating Committee comprises three Directors, the majority of whom, including the Chairman of the Nominating
Committee are Independent Directors.

The responsibilities of the Nominating Committee include the following:

• review and assess candidates for directorships (including executive directorships) before making recommendations to the
Board for appointment of directors;

• review and recommend to the Board the retirement and re-election of directors in accordance with the Company’s Articles
of Associations at each AGM;

• review the composition of the Board annually to ensure that the Board has an appropriate balance of independent directors and to ensure an appropriate balance of expertise, skills, attributes, and ability among the directors; and

• review the independence of the directors.

The Nominating Committee determines whether or not a Director is independent, bearing in mind the Code’s definition of an
“Independent Director” and guidance as to relationships that exist that would deem a Director not to be independent. When deliberating as to whether or not a Director is independent, the Nominating Committee also takes into account whether a Director directly or indirectly has business relationship with the Group and if so, whether such relationship could interfere, or be reasonably perceived to interfere, with the Director’s independent judgment for the best interest of the Group. The Nominating Committee has concluded that all three (3) non-executive Directors are independent.

All new appointments of Directors are subject to the recommendation of the Nominating Committee. When recommending
any individual, the Nominating Committee ensures that the individual possesses core competencies that meet the Group’s
requirements, has relevant experience or is willing to acquire the required knowledge, has the ability to commit the time and effort to discharge his or her duties well and is a person of high integrity.

Other functions of the Nominating Committee have been described in other sections of this report.

11. Disclosure of Remuneration

The breakdown of remuneration of the Directors of the Company for the year ended 31 December 2008 is set out below:

During the year, the following Directors exercised share options and the gain from the exercise of options is as follows: -

12. Accountability

Aztech recognizes the importance of providing the Board with accurate and relevant information on a timely basis. Hence, Board
members receive quarterly financial and business updates prepared by the management. Such reports compare Aztech’s actual
performance against the budget. During Directors’ meetings, the CEO highlights key business indicators and major issues that
are relevant to Aztech’s performance and prospects.

For the financial year ended 31 December 2008, Aztech’s Executive Directors have provided confirmation to the Board on the
integrity of Aztech’s financial statements. The Board provides a negative assurance confirmation for interim financial statements,
which is supported by a negative assurance statement from the Executive Directors, in line with stock exchange requirements.

13. Internal Audit

Aztech’s Internal Auditor reports to the Audit Committee. For day-to-day issues relating to audit, the Internal Auditor reports to
the Group CEO. Aztech’s Internal Auditor adopts and complies with the Standards for Professional Practice laid down in the
Professional Practices Framework issued by The Institute of Internal Auditors. Aztech’s Internal Audit continues to meet these
standards in all aspects.

The Internal Auditor’s annual audit plan is reviewed and approved by the Audit Committee. The review conducted by Aztech’s
Internal Auditor is aimed at assisting the Board in promoting sound risk management practices through assessing the operating
effectiveness of controls that govern key business processes.

14. Whistle Blower Policy

Aztech’s whistle blower policy, which was launched in 2006, strengthens the ethical business conduct of the Group. All Directors,
officers and employees are free to report violations or suspected violations in accordance with the policy. All reports received
pursuant to the provisions of the policy are investigated by the Internal Auditor and reported to the Lead Independent Director.

Internal Controls

The Management is responsible for establishing and ensuring the Group has a system of internal controls (including the risk
management system), with oversight from the Board and Board Committees.

The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability of the
financial information and safeguard and maintain accountability of its assets.

The Board is of the view that the overall internal controls, including financial, operational and compliance controls, and risk
management systems and processes currently in place are adequate.

15. Securities Trading

In line with the SGX-ST Listing Rule 1207(18), the Group has issued guidelines on share dealings to all employees of the Group,
setting out the implications of insider trading, prohibiting securities dealings by Directors and employees whilst in possession
of unpublished price sensitive information and during the periods commencing one month before the announcement of full year
results and two weeks before the announcement of quarterly results, and ending on the day of the said announcement of the
relevant results.

16. Interested Person Transactions

All interested person transactions are subject to review by the Audit Committee.

The transactions entered into with interested persons during the financial year which fall under Rule 907 of the Listing Manual
of the SGX-ST are:-

1. Preamble

Aztech's Corporate Governance Code requires directors, officers and employees to practice honesty and integrity in fulfilling their responsibilities and complying with all applicable laws and regulations.

2. Reporting Of Violations

All directors, officers and employees shall be free to report violations or suspected violations in accordance with this Whistle Blower Policy.

No director, officer or employee, who in good faith reports a violation of the Code shall suffer retaliation or adverse employment consequence. Any officer of the Company who retaliates against any person who has reported a violation in good faith is subject to discipline up to and including termination of employment.

Employees are encouraged to raise serious concerns to their immediate supervisors. However, if they are not comfortable speaking with their supervisors or are not satisfied with the supervisor response, they can approach the head of their division or directly to the Internal Auditor, who has specific responsibility to investigate all reported violations. All finding of such reports is to be reported by the Internal Auditor directly to the Lead Director of the Board.

3. Internal Auditor Role

The Internal Auditor is responsible for investigating and resolving all reported complaints and allegations concerning violations and shall advise Lead Director of all his or her findings. The Internal Auditor shall work with the Lead Independent Director and the Group's head of human resource to address all violations so that appropriate action be taken against the perpetrator.

4. Acting In Good Faith

Anyone filling a complaint concerning a violation or suspected violation must be acting in good faith and should have reasonable grounds for believing the information disclosed indicates a violation of applicable laws and regulations . Any allegations that prove not to be substantiated and which prove to have been maliciously or knowingly to be false will be viewed as a serious disciplinary offense.