Full Annual Report 2006 - Singapore Technologies Engineering

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101 Directors’ Report AS AT 31 DECEMBER 2006 (Currency – Singapore dollars unless otherwise stated) SHARE PLANS (continued) (c) PSP (continued) The medium-term stretched targets measured over a three-year performance period are set based on ST Engineering Group corporate objectives. The performance measures used in PSP grant up to financial year 2004 are ST Engineering Group Total Shareholders’ Return (“TSR”) against the MSCI Asia Pacific ex Japan Industrial Index, Value Added per Employment Cost and EVA Spread. Pursuant to the PSP for the financial year 2006, conditional awards aggregating 2,450,000 performance shares were made to 40 key executives of the ST Engineering Group, as part of the incentives plan to motivate key executives of the ST Engineering Group. The key executives include Mr Tan Pheng Hock, an executive Director of the Board, who was conditionally awarded 250,000 performance shares. This conditional award is for the performance qualifying period of 2006 to 2008. With effect from financial year 2005, the performance measures are ST Engineering Group TSR against the MSCI Asia Pacific ex Japan Industrial Index, EVA Spread and EPS Growth. A minimum threshold performance is required for any performance share to be released and the actual number of performance shares to be released is capped at 150% of the conditional award. On 20 February 2006, 805,000 new shares were awarded upon the partial achievement of one of the three targets set for a grant of conditional award relating to the performance cycle from 2003 to 2005. The balance of the conditional award covering the period from 2003 to 2005 has thus lapsed. The total number of shares in the remaining awards which are granted conditionally for the performance periods 2004 to 2006, 2005 to 2007 and 2006 to 2008 respectively, not due to be released yet, total 6,740,000. Depending on the actual performance, the total release of awards will range from zero to a maximum of 11,175,000 shares. AUDIT COMMITTEE The Audit Committee comprises three independent non-executive directors, one of whom is also the Chairman of the Committee. The members of the Audit Committee at the date of this report are as follows: Koh Beng Seng Dr Philip Nalliah Pillai Venkatachalam Krishnakumar (Chairman) The financial statements, accounting policies and system of internal accounting controls are the responsibility of the Board of Directors acting through the Audit Committee. The Audit Committee met during the year to review the scope of the internal audit functions and the scope of work of the statutory auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s officers to the auditors. The consolidated financial statements of the Group and the financial statements of the Company were reviewed by the Audit Committee prior to their submission to the directors of the Company for adoption. In addition, the Audit Committee has reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set up by the Group and the Company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions. The Audit Committee has recommended to the Board of Directors that the auditors, Ernst & Young, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
THE WINNING SPIRIT ST Engineering AR 2006 102 Directors’ Report AS AT 31 DECEMBER 2006 (Currency – Singapore dollars unless otherwise stated) AUDITORS Ernst & Young have expressed their willingness to accept re-appointment as auditors of the Company. On behalf of the Board of Directors Peter Seah Lim Huat Director Tan Pheng Hock Director Singapore 13 February 2007
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THE WINNING SPIRIT ANNUAL REPORT 20
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THE WINNING SPIRIT ST Engineering A
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197 SGX Listing Manual Requirements
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199 Shareholding Statistics AS AT 5
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201 SECTORAL FINANCIAL REVIEW - AER
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203 SECTORAL FINANCIAL REVIEW - AER
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205 SECTORAL FINANCIAL REVIEW - ELE
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211 SECTORAL FINANCIAL REVIEW - LAN
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215 SECTORAL FINANCIAL REVIEW - MAR
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221 Group Structure - Singapore Tec
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225 CORPORATE INFORMATION BOARD OF
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SINGAPORE TECHNOLOGIES ENGINEERING
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Full Annual Report 2006 - Singapore Technologies Engineering

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