Sunny Tew

CORPORATE GOVERNANCE STATEMENTPrinciple 2 :Board’s CompositionThe Board currently consists of four Executive Directors, one Non-Executive Director andthree Independent Directors. At least one third of the Board is made up of IndependentDirectors. The independence of each director is reviewed annually.As provided for in the Company’s Articles of Association, one-third of the Board willretire and be eligible to seek re-election at each Annual General Meeting (“AGM”).Directors appointed by the Board during the financial year are subject to re-election byshareholders at the following Annual General Meeting.The Directors bring with them considerable experience in the steel industry, financialand business. The profile of each Director is provided in page 12 of the Annual Report.Principle 3 : Chairman and Chief Executive Office (“CEO”)There is a distinctive separation of responsibilities between the Chairman and the CEO.This is to ensure there is balance of power and authority at the top of the Company.The posts of Chairman and CEO are held by Mr. Tan Chan Too and Mr. Wee Piewrespectively.The Chairman schedules Board meetings and ensures the effective execution of Boarddecisions. The agenda for meetings is prepared in consultation with the Chairman andCEO.The CEO bears executive responsibility for the Group’s business. The CEO overseesthe daily running of the Group’s operations and is responsible to execute strategies andpolicies adopted by the Board.Principle 4 : Board MembershipThe Nominating Committee (“NC”) makes recommendations to the Board on all Boardappointments. The NC comprises the following three members:Mr Ooi Seng Soon ( Chairman ) : Independent DirectorMr Gui Kim Young @ Gui Kim Gan : Independent DirectorMr Wee Piew : CEOThe NC has adopted its terms of reference that describes the responsibilities of itsmembers. The NC is responsible for the identification and selection of new directors.The NC make recommendations to the Board on all Board appointments, review allnominations having regard to directors’ contributions and past performance, to assessthe effectiveness of the Board as a whole. The NC also determines annually whether ornot a director is independent.In considering the appointment of any new director, the NC ensures that the newdirector possesses the necessary skills, knowledge and experience that could facilitatethe Board in the making of sound and well-considered decisions.Under the Articles of Association of the Company, one-third of the directors shall retireby rotation. All retiring directors are eligible for re-election.18 HG METAL MANUFACTURING LIMITED ANNUAL REPORT 2007