Corporate Governance (for year 2009)

The Company is committed to raising the standard of corporate governance in order to protect the interest of its shareholders. The Board of Directors fully supports the Best Practices Guide on corporate governance as recommended by the Singapore Exchange Securities Trading Limited and has put in place various mechanisms to ensure that effective corporate governance is practised.

Board of Directors

The Board of Directors consists of members with varied experience and expertise. The Board currently comprises five members, three of whom are independent directors.

The Board is chaired by Mr Chin Siew Gim, in his capacity as the Non-Executive Chairman. Mr Chin is also considered to be an independent director. The day-to-day operational activities of the Group is handled by an Executive Management Committee, headed by the Chief Executive Officer of the Company, Mr Tan Kay Guan. None of the directors are related to one another.

Apart from its statutory responsibilities, the Board reviews and approves the Group’s strategic plans, key operational initiatives and major investment and funding decisions. It also identifies principal risks of the Group’s business and implements appropriate systems to manage those risks, reviews the Group’s financial performance and evaluates the performance and compensation of senior management personnel. These functions are carried out either directly or through Board Committees.

The Group has set up the following Board Committees to help carry out the various functions of the Board.

The Executive Management Committee comprises 4 members. It is chaired by the Chief Executive Officer of the Company and includes the Executive Vice President, the Chief Operating Officer, Microshaft Division and the Chief Financial Officer.

The Committee handles the day-to-day operational activities or the Company and its subsidiaries. The members meet on a weekly basis, attended by members who are physically available to attend the meeting.

The Audit Committee ("AC") is chaired by Mr Chin Siew Gim, the Non-Executive Chairman and an independent director and includes Prof Lai Kim Fatt and Mr Chua Khing Seng (both Independent Directors) as members.

The AC convened four meetings during the year under review, attended by members of the AC and relvant management staff. The AC has also met with the external auditors, without the presence of the Company's management, at least once a year.

The AC reviewed the following:

a) The audit plan of the external auditors;

b) The Group’s financial and operating results;

c) The announcement of the half-year and full-year results of the Company and the Group to the SGX-ST;

d) The financial statements of the Company and the consolidated financial statements of the Group before their submission to the Board of Directors and the external auditors’ report on those financial statements;

e) the Interested Person Transactions;

f) The co-operation given by the management to the external auditors; and

g) The appointment of the external auditors of the Company.

The AC has full access to and co-operation by the management. The external auditors have unrestricted access to the AC.

The AC has recommended to the Board of Directors the nomination of Ernst & Young LLP for reappointment as external auditors of the Company at the forthcoming Annual General Meeting.

The Nominating Committee is chaired by Mr Chin Siew Gim, the Non-Executive Chairman and an independent director and includes Mr Tan Kay Guan (Chief Executive Officer) and Prof Lai Kim Fatt (Independent Director) as members.

The Committee met and reviewed the following during the year:

(a) The adherence to the Code of Corporate Governance;

(b) The appointment of the new independent director;

(c) The recommendation of directors seeking re-appointment at the Annual General Meeting; 

(d) the independence of the independent directors; and

(e) the changes of senior management personnel.

The Remuneration Committee is chaired by Mr Chin Siew Gim, the Non-Executive Chairman and an independent director and includes Prof Lai Kim Fatt and Mr Chua Khing Seng (both Independent Directors) as members.

The Committee met and reviewed the following during the year:

(a) the remuneration package for executive directors and key executives; and

(b) the fees for the non-executive directors.

The Group’s remuneration policy is to provide compensation packages at market rates which reward good performance and attract, retain and motivate the directors and executives.

Remuneration paid to the directors of the Company for the year under review are as follows :

Chin Siew Gim                                                             -                     -                     100%               100%
(Non-Executive Chairman)             

Masao Okada                                                              -                     -                       -                     -
(Non-Executive Director - Resigned on 30 June 2008)

Lai Kim Fatt                                                                -                     -                    100%                100%
(Non-Executive Director)

Tan Kay Guan                                                             -                     -                       -                     -
(Executive Vice President)      

Chua Khing Seng                                                         -                     -                       -                     -
(Non-Executive Director - Appointed on 20 April 2009)
 

S$250,000 - S$499,999

Eiju Yokota                                                               96%                 -                       4%                 100%
(Executive President)

Yasufumi Tsunoda                                                      99%                 -                       1%                 100%
(Executive Vice President - Demise on 23 July 2008)                                          

Interested Person Transactions

The Company has established a procedure for recording and reporting interested person transactions. All interested person transactions are subject to review by the Audit Committee to ensure they were carried out on normal commercial terms.
During the financial year, there were no interested person transactions that exceeded the stipulated thresholds as specificed in Chapter 9 of the Listing Manual of the SGX-ST.

Communications with Shareholders

The Company does not practice selective disclosure. In line with continuous disclosure obligations of the Company pursuant to the SGX-ST’s listing Rules and the Singapore Companies Act, the Company’s policy is that all shareholders should be equally and timely informed of all major developments that impact the Group.

Information is communicated to all shareholders on a timely basis through:

a) Annual Reports that are prepared and issued to all shareholders. The Company makes every effort to ensure that all relevant information about the Group and other disclosures that are required by the SGX-ST, the Companies Act and Singapore Statements of Accounting Standard, are included in the Annual Report;

b) Periodic financial statements containing a summary of the financial information and affairs of the Group for the period that are reported through the MASNET;

c) Notices and explanatory notes for annual general meetings and extraordinary general meeting;

d) Disclosures to the SGX-ST; and

e) The Group’s website at www.giken.com.sg, at which shareholders can access information on the Group. The
    website provides, inter alia, information on the Group’s corporate disclosure, corporate data, corporate profile and   
    Annual Reports.

Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of the Group’s strategy and objectives. The Board welcomes questions from shareholders, either formally at the AGM or informally, before and after the AGM.

The AGM serves as the principal forum for shareholders to obtain information and give feedback about the Group.

The Company has devised and adopted its own internal code to provide guidance to its directors and employees on their dealings in its securities.

The Board of Director confirms that the Company has complied with the principal corporate governance recommendations set out in the existing Best Practices Guide issued by the SGX-ST, for the year under review.