Current Composition of Board Committees

Corporate Governance Report - Extracted from the 2007 Annual Report

1. Board of Directors
2. Chairman and CEO
3. Lead Independent Director
4. Nominating Committee
5. Board Performance
6. Access to Information
7. Remuneration Matters
8. Audit Committee
9. Accountability
10. Whistle Blower Policy
11. Internal Controls
12. Internal Audit
13. Interested Person Transactions
14. No Material Contracts
15. Communication with Shareholders
16. Dealing in Securities

Whistle Blowing Policy - Implemented on 2nd October 2006

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

Corporate Governance Report

1. Board of Directors (The Code - Principles 1, 2, 4 & 10)

The Board oversees the business affairs of Aztech and is collectively responsible for the success of the Group. The principal functions of the Board are: -

• make decision on matters relating to the Group’s activities which are of significant nature;
• oversee the business and affairs of the Group;
• establish with Management the strategies and objectives to be implemented and monitor the performance of Management;
  
• ensure that adequate internal controls, risk management policies, and financial reporting processes are in place and are implemented; and
  
• review the financial performance of the Group.

Matters requiring the Board’s decision and approval include:

• major funding proposals, investments, acquisitions and divestments;
• material transaction of capital assets exceeding value of $500,000;
  
• 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.

To assist the Board in discharging its function, various Board Committees, namely the Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration Committee (“RC”) have been formed with clear terms of reference.

The number of Board and Board Committee meetings held in FY2007, as well as the attendance of each Board
member at these meetings, are disclosed below:

Key information, as required under the Code, regarding each Director is disclosed in Board of Directors. 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 CEO (The Code - Principle 3)

Mr Michael Mun is the Chairman and CEO of the Group. He bears responsibility for the functioning of the Board. The Board confirms that there is no concentrated power in the hands of one individual and there is independent decision-making in the Aztech Board for the following reasons:

• there is a strong independent element on the Aztech Board;
  
• the independent Directors actively participate during Board meetings;
  
• the independent Directors freely discuss and review all proposals of the Management and on all matters of the business of the Group;
  
• to enhance the independence of the Board, a Lead Independent Director has been appointed to coordinate the activities of the independent Directors and act as the principle liaison between the independent Directors and the Chairman on sensitive issues; and
  
• the Lead Independent Director discusses issues with other Independent Directors, both during and
  outside Board meetings on important issues affecting the affairs of the Group.

In the case of Aztech, the Board is of the firm and unanimous view that it is in the best interests of the Company to continue to have an Executive Chairman who is knowledgeable about the businesses of the Company. Therefore a single leadership structure, where the Chairman and CEO is the same individual is to the benefit of the Group.

The Chairman, with the assistance of the Company Secretary, schedules meetings and prepares meeting agendas to enable the Board to perform its duties responsibly having regard to the Group’s business and operations. The Chairman sets guidelines on and monitors the flow of information from Management to the Board to ensure that all material information is provided timely to the Board to make good decisions.

The Chairman briefs the Directors on prospective deals and potential developments at an early stage before
formal board approval is sought on a regular basis. He also ensures that relevant information on business
and corporate activities are continuously circulated to Board members so as to enable them to be updated.
The Chairman also ensures effective communication with shareholders.

3. Lead Independent Director (The Code - Principle 3)

Mr Philip Tan, an independent non-executive Director was appointed as the Lead Independent Director on October 2, 2006 for a term of two (2) years.

4. Nominating Committee (The Code - Principle 4)

The NC comprises of 3 members; namely,

The term of reference of the NC are disclosed in the Appendix 1 hereto. There were 2 meetings of the NC held during the year in review.

The NC also determines annually whether each Director is able to and has been adequately carrying out his or her duties as a Director of the Company. The NC took into account the results of the assessment of the effectiveness of each individual Director and the respective Directors’ conduct on the Board in making this determination. For a Director who has multiple board representations, the NC reviewed whether or not the Director was able to and had been adequately carrying out his or her duties as Director of the Company.

To ensure that the assessment is done fairly, each member of the NC completes his assessment independently and without consultation with the other members. The results of the assessment are then tabled at a meeting of the NC and evaluated. The NC was satisfied that all the Directors had adequately carried out their duties as Director.

The Nominating Committee is also entrusted with the responsibility of re-nomination having regard to the Director’s contribution and performance (such as attendance, preparedness and participation), with reference to the results of the assessment of the individual Director by his peers for the previous financial year.

The Directors submit themselves for re-nomination and re-election at regular intervals of at least once every three years. Pursuant to the Company’s Articles of Association, one-third of the Directors retire from office at the Company’s annual general meeting, and a newly appointed Director must submit himself or herself for re-election at the annual general meeting immediately following his appointment.

The NC determines on an annual basis whether or not a Director is independent, bearing in mind the Code’s definition of an “Independent Director” and guidance as to relationships of that exist that would deem a Director not to be independent. When deliberating as to whether or not a Director is independent, the NC 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 NC concluded that all three (3) nonexecutive
Directors are independent.

All new appointments of Directors are subject to the recommendation of the NC. When recommending any individual, the NC ensures that the individual posses core competencies that meet the Group’s requirement, has relevant experience or 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.

5. Board Performance (The Code - Principle 5)

The Director have implemented formal processes 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 strategize and propose sound business directions, Board’s performance in relation to identifying and handling risks and the Board’s performance in relation to discharging its responsibility in enhancing long term shareholders’ value.

The Board assessment exercise provided an opportunity to each Director to obtain constructive feedback on whether he or she discharges 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 allowed for peer review with a view to raising the quality of Board as a whole. The NC concluded that the Aztech Board was effective during the year in review and performed generally well in all areas.

6. Access to Information (The Code - Principle 6)

As a general rule, Board papers are required to be sent to Directors before the Board meeting so that the Directors may better understand the matter prior to the meeting and discussion may be focused on questions that the Board has about the Board papers. Where required, Management staff would be present at the relevant time during the Board meeting to provide additional information to the Board.

The Company fully recognises that the continual flow of relevant information on an accurate and timely basis is critical for the Board to be effective in the discharge of its duties. The Management, under the supervision of the Chairman provides the Board with accurate information in a timely manner concerning the Group’s progress or shortcomings in achieving its strategic business objectives or financial targets and other information relevant to the strategic issues facing the Group.

Management also provides the Board members with Management accounts on a regular basis. The Management account reports the Group’s performance, financial position and prospects, consolidated profit and loss accounts, analysis of sales by segment and analysis of key customers. Explanation is also given for significant variances to the budget and the performance of the Group for the same period in the previous year.

The Company Secretary administers, attends and prepares agenda and minutes of all Board meetings. She ensures that the Company’s memorandum and articles of association and relevant rules and regulations, including requirements of the Companies Act, Securities & Futures Act, and Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX”) are complied with. She also assists the Chairman and the Board to implement and strengthen corporate governance practices and processes with a view to enhancing longterm shareholder value. The Directors have separate and independent access to the Company Secretary. The
appointment and removal of the Company Secretary are subject to the approval of the Board.

Subject to the approval of the Chairman, the Directors, whether as a group or individually, may seek and obtain
independent professional advice to assist them in their duties at the expense of the Company.

7. Remuneration Matters
Procedures for Developing Remuneration Policies (The Code - Principle 7)

The term of reference of the RC are disclosed in the Appendix 1 hereto. There were 3 meetings of the RC held during the year in review. The Remuneration Committee is responsible for ensuring a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors and Senior Management.

The Remuneration Committee recommends to the Board, a framework of remuneration which covers all aspects of remuneration, including but not limited to Director’s 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 our Human Resources Department assists the RC in performing its function. The RC has access to expert advice in the field of executive compensation outside the Company, if required.

Level and Mix of Remuneration (The Code - Principle 8)

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 ESOS are set out on page 37 of this Annual Report.

Disclosure on Remuneration (The Code - Principle 9)

The breakdown of remuneration of the Directors of the Company for the year ended 31 December 2007 is set out below:

For the Financial Year ended 31 December 2007, except for Mr Michael Mun Hong Yew and Mr Jeremy Mun Weng Hung (whose remunerations disclosed above), no employee of Aztech Group, whose remuneration exceed $150,000, was an immediate family member of a Director. Immediate family means spouse, child, adopted child, stepchild, brother, sister or parent. Mr Jeremy Mun Weng Hung is the son of Mr Michael Mun Hong Yew.

The remuneration band of Top 5 Key Executives of the Group (who are not Directors) are set out below:

Note:
For competitive reasons, the Company is not disclosing the identity of the Top 5 Key Executives and the percentage breakdown of their remuneration.

8. Audit Committee (The Code - Principle 11 & 12)

The AC comprises of 3 members; namely,

The term of reference of the AC are disclosed in the Appendix hereto. There were 6 meetings of the AC held during the year in review.

The Chairman, Mr Philip Tan and another member, Mr Khoo has accounting and finance related management expertise. The third member, Mr Colin Ng has expertise in law and business. The Board is of the view that the AC members have the relevant expertise to discharge the function of an AC.

The AC has full access to and co-operation of the Company’s Management and the internal auditors and has full discretion to invite any officer of the Group to attend its meetings. The auditors, both internal and external, have unrestricted access to the AC. All required resources have been made available to the AC to enable it to discharge its duties. The AC will meet the external auditors, and with the internal auditors, without the presence of Management, at least annually.

The Company’s external auditors carry out, in the course of their annual statutory audit, a review of the effectiveness of the Company’s material internal controls, including financial, operational and compliance controls, and risk management to the extent of the scope of audit as laid out in their audit plan. Material non-compliance and internal control weakness noted during the audit, and the auditors’ recommendations to address such non-compliance and weakness are reported to the AC. Our Management implements the
external auditors’ recommendations after discussion with the AC.

9. Accountability (The Code - Principle 10)

The Management provides the Board with management and financial information, which includes quarterly management accounts, which is compared to approved budgets and previous year’s results, forecasts for profit and cash flow and borrowing levels. The Board reviews and approves the Group’s annual budget.

10. Whistle blower policy (The Code - Principle 11.7)

Our 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 provision of the policy are investigated by the internal auditor and reported to the Lead Independent Director.

11. Internal Controls (The Code - Principle 12)

The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability of the financial information and to safeguard and maintain accountability of its assets. The Group has placed relevant procedures to identify major business risk and evaluate potential financial effects. There are also procedures for the authorisation of capital expenditures and investment.

The Board is of the view that the overall internal controls and processes currently in place are adequate.

12. Internal Audit (The Code - Principle 13)

The Internal Audit function is headed by the Internal Auditor. The Internal Auditor reports directly to the Chairman of the AC on audit matters, and to the CEO on administrative matters. The AC reviews the scope and methodology adopted by the Internal Auditor in discharging duties. All Internal Auditors’ reports are sent directly to the Chairman of AC and copied to the other AC members. It is the Group’s policy to support the Internal Audit activities to meet and comply with acceptable internal audit standards and practices.

13. Interested Person Transactions (The Listing Manual - Rule 907, 1207 (16))

The Company has adopted an internal policy in respect of any transactions with interested persons. All transactions with interested persons are reviewed by the Board. Details of such transactions are disclosed in the financial statements.

During the year under review, there were no interested person transactions exceeding S$100,000. Further, there
were no interested person transactions entered into under shareholders’ mandate pursuant to Rule 920.

14. No Material Contracts (The Listing Manual – Rule 1207(8))

Since the end of financial year 2006, the Company and its subsidiaries did not enter into any material contracts in which the CEO, Directors or Controlling Shareholders has any interest and no such material contracts subsist at the end of financial year 2007.

15. Communication with Shareholders (The Code –Principle 14 & 15)

The Company communicates information to shareholders and the investing community through announcements that are released to the SGX-ST via SGXNET which are then immediately posted on the Company’s website www.aztech.com. Such announcements include the quarterly and full-year results, material transactions, and other developments relating to the Group.

All shareholders of the Company are sent a copy of the Annual Report and notice of the Annual General Meeting (“AGM”). The notice of AGM which sets out all items of business to be transacted at the AGM, is released on the SGXNET and also advertised in a major newspaper.

The Company’s main forum for dialogue with shareholders takes place at its AGM, where Directors, Management and the external auditors are in attendance. At the AGM, shareholders are given the opportunity to air their views and questions regarding the Company.

16. Dealing in Securities (The Listing Manual – Rule 1207(18))

The Group’s policies on share dealing have been issued to all Directors and key officers of the Group. The Company’s officers are not allowed to deal in the Company’s shares 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 (1) month for the half-year or full year financial results. This restriction ends on the date of the announcement of the relevant results.

All officers of the Group are required on an annual basis to submit a written confirmation of their compliance
with the internal guidelines.

Pavani Nagarajah
Company Secretary
March 11, 2008

Whistle Blowing Policy

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.