INVESTOR RELATIONS

Corporate Governance

Singapura Finance Ltd is committed to achieving and maintaining high standards of corporate governance in order to safeguard the interest of shareholders. It adopts corporate governance practices in line with the principles and guidelines set out in the Code of Corporate Governance issued by Ministry of Finance in July 2005 ["Code"]. Although not a requirement for our finance company, the Company has taken additional measures, where possible, to adopt the key principles and guidelines on corporate governance issued by the Monetary Authority of Singapore in September 2005 ["MAS Code"] for banks and direct insurers in line with our ongoing commitment to promote the best corporate governance practices.

THE BOARD OF DIRECTORS

Code Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

Code Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board's decision making.

Code Principle 3: There should be a clear division of responsibilities at the top of the company - the working of the Board and the executive responsibility of the company's business - which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

Board Composition And Balance

The Board currently comprises six Directors, with four non-executive Directors (of which three are independent) and two executive Directors. The three non-executive and independent Directors are Mr Ong Pang Boon, Mr Phua Bah Lee and Mr Teoh Eng Hong. Mr William Ho, who was previously an executive Director, retired on 31 January 2008 and now sits on the Board as a non-executive and non-independent Director. The two executive Directors are Executive Chairman Mr Teo Chiang Long and CEO Mr Jamie Teo Miang Yeow.

Members of the Board are prominent business leaders and professionals with financial, banking and business management backgrounds. Their diverse corporate experiences as a group provide core competencies relevant to the Group's business. The Board has reviewed its composition, and is satisfied that the current size of the Board is appropriate and adequate for effective decision-making having regard to its present scale of operation. Details of Directors' professional qualifications and background can be found on pages 6 to 7.

The Board determines the Group's overall business strategy and supervises the management on the Group's business and affairs.

There will be at least two meetings a year. Apart from its statutory responsibilities, the Board approves the strategic plans, annual budget, key operational issues, loans and reviews the financial performance of the Group.

Other matters which are required to be referred to the Board for approval include:

• Quarterly/Half Yearly and Yearly Reports;
• Statutory Financial Statements;
• Major transactions, acquisitions, and funding decisions;
• Interested person transactions; and
• Risk Management strategies and Corporate Governance.

Directors Attendance at Board and Board Committee Meetings for the Period Under Review

Name of Directors	Board		Audit Committee
	No. of Meetings Held	No. of Meetings Attended	No. of Meetings Held	No. of Meetings Attended
Teo Chiang Long	4	4	-	-
Ong Pang Boon	4	4	4	4
Phua Bah Lee	4	4	4	4
Teoh Eng Hong	4	4	4	4
Jamie Teo Miang Yeow	4	4	-	-
William Ho Ah Seng	4	4	-	-

Name of Directors	Nominating		Remuneration
	No. of Meetings Held	No. of Meetings Attended	No. of Meetings Held	No. of Meetings Attended
Teo Chiang Long	-	-	-	-
Ong Pang Boon	2	2	2	2
Phua Bah Lee	2	2	2	2
Teoh Eng Hong	2	2	2	2
Jamie Teo Miang Yeow	-	-	-	-
William Ho Ah Seng	-	-	-	-

Board Committees

The Board has established six committees to enhance its effectiveness. They are the Executive Committee, Investment Committee, Nominating Committee, Remuneration Committee, Audit Committee, and Risk Management Committee.

The Executive Committee ["EXCO"] comprises of three members namely Mr Teo Chiang Long (Executive Chairman), Mr Teoh Eng Hong (Independent & non-executive Director) and Mr Jamie Teo Miang Yeow (Executive Director & CEO). The Committee acts for the Board in supervising the management of the Company's business and affairs in particular, granting of loans, guarantees or credit facilities within the authority limits delegated by the Board and approving new product proposal.

The Investment Committee ["INV"] comprises of three members namely Mr Teo Chiang Long (Executive Chairman), Mr Jamie Teo Miang Yeow (Executive Director & CEO) and Mr Desmond Tan (General Manager, Operations & Process Improvement). The INV reviews the limits of the Company's investments for approval by the Board as well as approves policies and strategies regarding these investments.

The composition and key functions of the other four committees, apart from EXCO and INV, are described in the other relevant sections of the Corporate Governance disclosure.

Training Of Directors

All new Directors will be given briefing sessions on the operations of all the key business and support units. Directors are also updated regularly on accounting and regulatory changes.

Directors may at any time request further explanations, briefings or informal discussions on any aspect of the Company operations.

Independent Members Of The Board

Independent Directors shall at all times make up at least one-third of the Board. The criterion of independence is based on the definition given in the Code. The Nominating Committee had appointed Mr Ong Pang Boon since 27 January 2006 as the lead independent Director to address any queries and shareholders' concerns.

As non-executive members of the Board, the independent Directors do not exercise management functions in the Company. However, all the Directors have equal responsibility and make contributions towards the performance of the Group.

The Board considers its non-executive Directors to be of significant influence and their views to be of sufficient weight such that no individual or small group can dominate the Board's decision-making processes.

Role Of Chairman & CEO

There is a clear division of responsibilities between the Executive Chairman and the CEO. The Executive Chairman, leads the Board to monitor and review the general progress and long-term development of the Company while the CEO manages the business of the Group and implements the Board's policies and decisions. CEO, Mr Jamie Teo Miang Yeow is the son of Executive Chairman, Mr Teo Chiang Long.

THE NOMINATING COMMITTEE ["NC"]

Code Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

Code Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

All three members of the Nominating Committee ["NC"] are independent non-executive Directors namely Mr Ong Pang Boon (Chairman), Mr Phua Bah Lee and Mr Teoh Eng Hong.

The NC's responsibilities include:

• Making recommendations to the Board on all board appointments and re-appointments;
• Considering and determining on an annual basis, whether or not a Director is independent;
• Assessing the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the Board;
• The NC in considering the re-appointment of any Director, evaluates the performance of the Director on a continuous basis. The criteria adopted in the evaluation and assessment of Board Members include attendance at the Board and Committee meetings, intensity and quality of participation at meetings, special contributions, as well as other qualitative measures such as setting of strategic directions and achievement of strategic objectives, quality of risk management and adequacy of internal controls.
• The NC in reviewing and recommending to the Board any new director appointments takes into consideration the current Board size and its mix, the additional skills and experience that will bolster the core competencies of the Board, the search process for the identification of suitable candidates and once identified, the appropriate knowledge, experience and skills of the candidates who in its opinion, are fit and proper and qualified for office. As a finance company, all new appointments to the Board are subject to the approval of the MAS.

ACCESS TO INFORMATION

Code Principle 6: In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.

All Directors have unrestricted access to the Company's records and information and receive detailed financial and operational reports from senior management during the year to enable them to carry out their duties.

Prior to each Board and Board Committee meeting, the members are provided with the meeting agenda and the relevant papers submitted by the management, containing complete, adequate and timely information to enable full deliberation on the issues to be considered at the meetings. Management staff and the Company's auditors, who can provide additional insight to the matters for discussion, are also invited from time to time to attend such meetings.

In addition, Directors have separate and independent access to the advice and services of the Company Secretary. The Company Secretary attends all Board meetings. Each Director has the right to seek independent legal and other professional advice, at the Company's expense, concerning any aspect of the Group's operations or undertakings in order to fulfil his duties and responsibilities as Director.

THE REMUNERATION COMMITTEE ["RC"]

Code Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

Code Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors' remuneration should be structured so as to link rewards to corporate and individual performance.

Code Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company's annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.

All three members of the Remuneration Committee ["RC"] are independent non-executive Directors namely Mr Phua Bah Lee (Chairman), Mr Ong Pang Boon and Mr Teoh Eng Hong.

The RC's main responsibilities are to make recommendations to the Board with regard to the remuneration of executive Directors, non-executive Directors and key executives and to ascertain that they are fairly remunerated.

The Group's remuneration policy is to provide compensation packages at market rates which reward successful performance and attract, retain and motivate managers and Directors.

The remuneration packages are approved by the Board upon recommendations by the RC. The Executive Chairman and the CEO do not participate in meetings to discuss their compensation packages.

Details of directors' remuneration for the year ended 30 June 2009 are set out below:

	Number of Directors
Remuneration Band	2009	2008
$500,000 to below $750,000	1	1
$250,000 to below $500,000	1	2
Below $250,000	4	3
	6	6

Summary compensation table for the year ended 30 June 2009.

	Base Salary	Bonus/Allowances	Board/Board Committee* Fees
	%	%	%
Teo Chiang Long	59.64	32.92	7.44
Jamie Teo Miang Yeow	57.10	36.15	6.75
Ong Pang Boon	-	-	100.00
Phua Bah Lee	-	-	100.00
Teoh Eng Hong	-	-	100.00
William Ho Ah Seng	-	-	100.00

* These fees comprise Directors' fees for the financial year ended 30 June 2009 which are subject to approval by shareholders as a lump sum at the forthcoming AGM.

The Code requires the remuneration of at least the top 5 key executives who are not Directors to be disclosed in bands of $250,000/-. The range of the remuneration of the top 5 key executives for the year ended 30 June 2009 is shown below:

	Number of Directors
Remuneration Band	2009	2008
$250,000 to below $500,000	3	3
Below $250,000	2	2
	5	5

The Code also requires the disclosure of employees who are immediate family members of a Director or the CEO, and whose remuneration exceed $150,000/- during the year in bands of $250,000/-. A sister of the Executive Chairman, Mr Teo Chiang Long is an employee of the company. Her remuneration for the year ended 30 June 2009 was within the band of $250,000/- and $500,000/-, which comprised of 64.99% of base salary and 35.01% of bonus/allowances.

THE AUDIT COMMITTEE ["AC"]

Code Principle 11: The Board should establish an Audit Committee ["AC"] with written terms of reference which clearly set out its authority and duties.

The Audit Committee ["AC"] comprises of three members who are independent non-executive Directors namely Mr Ong Pang Boon, Mr Phua Bah Lee and Mr Teoh Eng Hong.

The function of the AC is to assist the Board in fulfilling its responsibilities in providing an independent review of the effectiveness of the financial reporting process and internal control system.

Specific functions of the AC include:

• Reviewing with Management and the external auditors of financial statements issued by the Group to ensure their completeness, accuracy and fairness;
• Reviewing with the internal auditors and the external auditors of the effectiveness of the financial reporting process and material internal control systems of the Group;
• Reviewing of the scope of work of the internal auditors and of the external auditors, the level of assistance provided by Management to the internal auditors and external auditors and the receipt and consideration of the internal auditors' and external auditors' reports;
• Recommending the appointment of the external auditors;
• The AC constantly bears in mind the need to maintain a balance between the independence and objectivity of the external auditors and the desire to have work that may be best carried out by the external auditors based on value for money consideration;
• Reviewing of Management's procedures for ensuring compliance with relevant legislations and regulations issued by the regulatory bodies such as the Monetary Authority of Singapore and the SGX-ST, as well as policies, procedures and practices as established by the Board;
• Reviewing with Management of the processes and activities to ensure compliance with the Code adopted by the Board; and
• Reviewing of Interested Person Transactions.

In line with the Code, the AC has reviewed the Company's comprehensive whistle blowing policy whereby staff of the Company may, in confidence, bring attention to the AC any concern, suspected breach or fraud, or possible improprieties in matters of financial reporting or behaviour that may not be in compliance with the law and Code of Conduct of the Company. The AC is of the opinion that procedures are in place for the independent investigation of such matters and for appropriate follow up action.

The AC meets with the external and internal auditors without the presence of Management at least once during the year. Having reviewed the nature and extent of the non-audit services provided to the Group by the external auditors, the AC is of the opinion that the provision of such non-audit services would not affect the independence of the external auditors.

FINANCIAL REPORTING AND INTERNAL CONTROL

Code Principle 10: The Board should present a balanced and understandable assessment of the company's performance, position and prospects.

Code Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders' investments and the company's assets.

The Management provides all Directors periodically with accounts and reports on the Group's financial performance and commentary on the competitive conditions within the industry in which the Company operates, which are reviewed by the Board at each Board meeting prior to release of the announcements on half-yearly and full-year results of the Group. Periodic reports covering the Group's financial performance are also provided to all Board members. Apart from the periodic updates provided by the Management, the Directors may at any time seek further information from, and discussion with, the Management on the Group's operations and performance.

The Directors recognise that they have overall responsibility to ensure accurate financial reporting for the Group and for the Group's system of internal controls. The Board confirms that, with the assistance of the AC, it reviews the effectiveness of the Group's financial reporting and internal controls system, which are monitored through a programme of internal audits, and is satisfied with the adequacy of such internal controls system.

While no system can provide absolute assurance against material loss or financial misstatement, the Group's internal financial controls are designed to provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained, and that financial information used within the business and for publication is reliable and accurate. In reviewing these controls, the Directors have had regard to the risks to which the business is exposed, the likelihood of such risks occurring and the costs of protecting against them.

INTERNAL AUDIT

Code Principle 13: The company should establish an internal audit function that is independent of the activities it audits.

The Group has a well-established internal audit function with formal procedures for internal auditors to report their audit findings direct to the AC. The internal auditors report to the Chairman of the AC on audit issues and administrative matters to the Executive Chairman of the Company. The AC reviews the adequacy of the internal audit function through a review of the internal auditors' programs on a half-yearly basis and ensures that the internal audit function has adequate resources and appropriate authority to perform its functions properly.

The Group also has a separate compliance function to help ensure adherence with applicable legislation, rules and regulations in the conduct of its business.

COMMUNICATION WITH SHAREHOLDERS

Code Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Code Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The Company endeavours to communicate regularly and effectively with its shareholders. The Company announces its quarterly and full-year results within the mandatory period.

The Company does not practise selective disclosure. Price sensitive announcements are released to the public via SGXNET and such information is simultaneously posted on the Company's website at www.singapurafinance.com.sg

The Board regards the Annual General Meeting ["AGM"] as an opportunity to communicate directly with the shareholders and encourages attendance and participation in dialogue. The notice of AGM is dispatched to shareholders, together with explanatory notes on items of special business at least 14 days before the meeting. The notice, first disseminated via SGXNET, is also published in newspapers.

The Articles of Association of the Company allow a shareholder of the Company to appoint one or two proxies to attend and vote at all general meetings on his behalf.

The Chairman and other Directors attending the AGM are available to answer questions from shareholders who are present. External auditors are also present to assist Directors in addressing relevant queries by shareholders.

INTERESTED PERSON TRANSACTIONS

The Interested Person Transactions and the aggregate value of Interested Person Transactions disclosed as required under Rule 907 of the Listing Manual of the SGX-ST during the financial year ended 30 June 2009 are as follows :-

Name of Interested Person	Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders' mandate pursuant to Rule 920)	Aggregate value of all interested person transactions conducted under shareholders' mandate pursuant to Rule 920 (excluding transactions less than $100,000)
High Luck Pte Ltd	$818,557.36	NIL

The Interested Person Transactions were carried out on normal business engagements on commercial terms which are not prejudicial to the interest of the Company or its minority shareholders.

RISK MANAGEMENT

The Board is fully committed to the implementation of sound risk management policies and practices, aligned to the Group's overall business strategy and objectives. The Board determines the type and level of business risks that the Group undertakes.

The Board appointed a Risk Management Committee ["RMC"] to oversee the overall risk management of the Group's businesses and operations. The RMC comprises of five members and they are the Executive Chairman, Mr Teo Chiang Long, Executive Director & CEO, Mr Jamie Teo Miang Yeow, Executive Director, Mr William Ho Ah Seng, General Manager, Mrs Nguy Joo Tian, and Chief Financial Officer, Mr Chua Hat Eng.

The roles and responsibilities of the RMC are to formulate, review and approve the risk management policies and procedures. The RMC also monitors and manages the risk exposures for the Group. However, all major policy decisions and approval on risk exposures including loan limits are approved by the Board.

The RMC in turn appointed the Credit Control Committee, Credit Portfolio Committee, and Asset-Liability Committee to assist in fulfilling its role.

The key risks of the Group include credit risk, market risk, liquidity risk and operational risk.

Credit Risk

Counter-party and credit risk is defined as potential loss arising from any failure by customers to fulfil their obligations, as and when they fall due. Exposure in credit risks arises primarily from lending activities.

The two management committees assisting in the management of credit risk are the Credit Control Committee and Credit Portfolio Committee.

The Credit Control Committee ["CCC"] develops the credit risk management framework, policies and procedures, and recommends credit risk limits for concurrence by RMC and approval by the Board. The CCC also reviews delinquent accounts and makes decisions on recovery actions.

The Credit Portfolio Committee ["CPC"] manages risk on a portfolio-wide basis and recommends alternative portfolio strategies, analyses results of portfolio management actions, and develops portfolio limits for each portfolio segment for approval by the RMC.

Risk parameters for accepting credit risk are clearly defined, supported by written policies and processes in the Lending Guidelines to ensure the Group maintains a well diversified and high quality loan portfolio.

The credit control functions ensure that credit risks are closely monitored and managed in compliance with the Group's credit policies and guidelines.

Credit reviews are carried out regularly to proactively identify and address potential weakness in the credit process and to pre-empt any unexpected deterioration in credit quality.

Credit stress tests are also conducted regularly to analyse the impact on security values on the Group's loan portfolio.

The Group addresses credit concentration risk by setting and monitoring industry mix limits on a regular basis.

Continuous efforts are being made to further enhance the Group's credit risk management processes.

Market Risk

Market risk encompasses price and interest rate risk, which are inherent in the ordinary course of the Group's business. Market risk is defined as the uncertainty in market value of a given portfolio arising from movements in market factors including interest rates, equity prices and asset values.

The Asset-Liability Committee ["ALCO"] manages the balance sheet to achieve an optimal balance between risk and reward, with regards to structural interest rate risk, and liquidity and funding risk, determine the appropriate levels of liquidity and ensure that funding is managed cost effectively, and review contingency plan for liquidity crisis.

The Group has a comprehensive set of policies and monitoring system in place for the manage of market risk. This includes limits for funding, maturity, and repricing gaps between assets and liabilities. An additional measures used by the Group for the interest rate sensitive investments is Present Value of a Basis Point ["PV01"], which measures the change in value of the interest rate sensitive exposures resulting from one basis point increase across the entire yield curve.

The Group has purchased and is using an Asset Liability Management System to enhance its capabilities for simulation, scenario analysis and stress testing. Interest rate risk sensitivity analysis can now be performed under various interest rate scenarios using dynamic simulation modelling.

Liquidity Risk

Liquidity risk arises in the general funding of the Group's activities and in the management of its assets and liabilities. It is the Group's policy to maintain adequate liquidity at all times. The Group maintains sufficient liquidity to fund its day-to-day operations, including customers' demand for loan drawdown, as well as any unanticipated cash funding needs.

The liquidity policies and procedures and limits are in place to ensure effective liquidity management and compliance with the regulatory requirements.

Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

The Group's operational risk management has been strengthened with the introduction of risk control self assessment framework and supported by a system for this framework. Risk are categorised into categories, rating methodology is refined and key risk indicators are introduced. Action plans are formulated where residual risk remains severe after mitigating controls.

The Company recognises that risk management process is an ongoing process and will thus continuously ensure that the Company's current risk management system and processes are in line with the industry best practices.

ETHICAL STANDARD

The Company manages its business according to the core values of integrity, performance excellence, teamwork, trust and respect to which staff subscribe and are assessed on. The Company has a comprehensive whistle blowing policy for staff to bring attention to the Audit Committee any concern, suspected breach or fraud, or activity or behaviour that may not be in compliance with the law and Code of Conduct of the Company.

INTERNAL CODE ON DEALING IN SECURITIES

The Company has adopted an internal code on securities trading which provides guidance and internal regulation with regard to dealings in the Company's securities by its Directors and officers. These guidelines prohibit dealing in the Company's securities while in possession of unpublished material price-sensitive information in relation to such securities and during the period commencing one month before the date of announcement of the half-year/full-year financial results.