ANNUAL REPORT

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Middle East Development Singapore ltdannual report 2007 25CORPORATE GOVERNANCESTATEMENTRemuneration of Employee who is an Immediate Family Member of a DirectorThere are currently no employees who are immediate family members of a Director or CEO whose remuneration exceeds $150,000during FY 2007.(C)ACCOUNTABILITY AND AUDITACCOUNTABILITYPrinciple 10: The Board should present a balanced and understandable assessment of the company’s performance, position andprospects.In presenting the annual financial statements and announcements of financial results to shareholders, it is the aim of the Board to provideshareholders with a balanced and understandable assessment of the Company’s and Group’s performance, position and prospects.Management provides the AC and the Board with balanced and understandable management accounts of the Company’s and Group’sperformance, position and prospects on a regular basis.AUDIT COMMITTEEPrinciple 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority andduties.The AC was reconstituted on 18 January 2007 following the appointments of Mr Tan Song Koon, Mr Hoon Tai Meng and Mr Tee Tua Baas Independent Directors on 18 January 2007. The current AC, chaired by Mr Tan Song Koon, comprises of three Independent Directors(that is Mr Tan Song Koon, Mr Hoon Tai Meng and Mr Tee Tua Ba ). The AC meets periodically at least twice yearly to review accounting,auditing and financial reporting matters so as to ensure that an effective system of control is maintained within the Group.The Company has adopted and has complied with the principles of corporate governance under the Code in relation to the roles andresponsibilities of the AC.The Board is of the view that the members of the AC are appropriately qualified, having the necessary accounting or related financialmanagement expertise or experience to discharge their responsibilities.The AC meets at least half-yearly and when circumstances require. The key functions of the AC under the Terms of Reference are, interalia:-(i)To review with the external auditors:-(a)(b)(c)(d)(e)(f)(g)(h)the audit plan, including the nature and scope of the audit before the audit commences,their evaluation of the system of internal accounting controls,their audit report,the assistance given to them by the Company’s officers,the scope and results of the internal audit procedures,the balance-sheet and profit and loss account of the Company,their management letter and Management’s response andany suspected fraud, irregularity or infringement of any Singapore law, rule or regulation, which has or is likely to have amaterial impact on the Company’s operations, results or financial position.
26Middle East Development Singapore ltdannual report 2007CORPORATE GOVERNANCESTATEMENT(ii)(iii)(iv)(v)(vi)(vii)to discuss with the external auditors any problems or concerns arising from their interim and final audits, and any other matterswhich the external auditors may wish to discuss;to ensure co-ordination where more than one audit firm is involved;to monitor the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the externalauditors and give recommendations to the Board and the Company in general meeting regarding the appointment, re-appointmentor removal of the external auditors;to ensure that the internal audit function has adequately resources and appropriate standing within the Company;to appoint any person(s) to carry out the internal audit function;to ensure that the internal auditor meets or exceeds the standards set by nationally or internationally recognized professionalbodies including the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors;(viii) to review the quarterly, half-yearly and full year financial statements of the Company and the Group, including announcementsrelating thereto, to shareholders and the SGX-ST, and thereafter to submit them to the Board for approval;(ix)(x)(xi)to review interested person transactions (as defined in the Listing Manual) and report its findings to the Board;to undertake such other reviews and projects as may be requested by the Board or as the Committee may consider appropriate;andto undertake such other functions and duties as may be required by law or by the Listing Manual, as amended from time totime.Apart from the duties listed above, the AC is given the task of commissioning investigations into matters where there is suspected fraudor irregularity, or failure of internal controls or infringement of any law, rule or regulation which has or is likely to have a material impacton the Company’s operating results or financial position, and to review its findings.The AC is in the process of setting up a whistle blowing policy whereby accessible channels are provided for employees to raise concernsabout possible improprieties in matters of financial reporting or other matters which they become aware and to ensure that:(i)(ii)(iii)independent investigations are carried out in an appropriate and timely manner,appropriate action is taken to correct the weaknesses in internal controls and policies which allowed the perpetration of fraudand/or misconduct and to prevent a recurrence, andadministrative, disciplinary, civil and/or criminal actions that are initiated following the completion of investigations are appropriatebalanced and fair, while providing reassurance that they will be protected from reprisals or victimization for whistle-blowing ingood faith and without malice.The AC will meet with the external auditors, without the presence of Management, when necessary, to review the adequacy of auditarrangement, with emphasis on the scope and quality of their audit, the independence, objectivity and observations of the auditors.Having reviewed the nature and extent of non-audit services provided by the external auditors over the year being reported on, the ACis satisfied that the rendering of such services did not affect the independence and objectivity of the external auditors.In addition, all future transactions with related parties shall comply with the requirements of the Listing Manual. As required by paragraph1(9)(e) of Appendix 2.2 of the Listing Manual, the Directors shall abstain from voting in any contract or arrangement, or proposedcontract or arrangement in which he has a personal material interest.
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Notes :1. A Shareholder entitled to
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ANNUAL REPORT

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