Osim FR 050407.indd

Directors’ Report (cont’d)Audit committeeThe Audit Committee (the “AC’) comprises three independent non-executive directors, one of whom is also the Chairman of the Committee.The members of the AC are:Michael Kan Yuet YunOng Kian MinKhor Peng Soon(Chairman)(Non-executive Director)(Non-executive Director)The AC performs the functions in accordance with section 201B(5) of the Singapore Companies Act, Cap. 50, including the following:• Reviews the audit plans of the internal and external auditors of the Company and ensures the adequacy of the Company’s system ofaccounting controls and the co-operation given by the Company’s management to the external and internal auditors;• Reviews the quarterly and annual fi nancial statements and the auditors’ report on the annual fi nancial statements of the Group andthe Company before their submission to the board of directors;• Reviews effectiveness of the Group and the Company’s material internal controls, including fi nancial, operational and compliancecontrols and risk management via reviews carried out by the internal auditors;• Meets with the external auditors, other committees, and management in separate executive sessions to discuss any matters thatthese groups believe should be discussed privately with the AC;• Reviews legal and regulatory matters that may have a material impact on the fi nancial statements, related compliance policies andprogrammes and any reports received from regulators;• Reviews the cost effectiveness and the independence and objectivity of the external auditors;• Reviews the nature and extent of non-audit services provided by the external auditors;• Recommends to the board of directors the external auditors to be nominated, approves the compensation of the external auditors,and reviews the scope and results of the audit;• Reports actions and minutes of the AC to the board of directors with such recommendations as the AC considers appropriate; and• Reviews interested person transactions in accordance with the requirements of the Singapore Exchange Securities Trading Limited(SGX-ST)’s Listing Manual.The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfi ed that the nature and extentof such services would not affect the independence of the external auditors. The AC has also conducted a review of interested persontransactions.The AC convened four meetings during the year with full attendance from all members. The AC has also met with internal and externalauditors, without the presence of the Company’s management, at least once a year.Further details regarding the audit committee are disclosed in the Report on Corporate Governance.Directors’ Report 69Annual Report 2006