MobileOne Ltd is committed to ensuring a high standard of corporate governance within the Group to protect the interests of its shareholders and maximise long-term shareholder value. This report describes the Company’s corporate governance processes and activities with specific reference to the Code of Corporate Governance established by the Singapore Corporate Governance Committee and relevant sections of the Listing Manual issued by the Singapore Exchange Securities Trading Limited ”SGX-ST“.


    (Code of Corporate Governance Principles 1, 2,4, 6 & 10)

The Board of Directors is accountable to the shareholders and oversees the management of the business and affairs of the Group. Key roles of the Board include approving the Group’s objectives, strategic directions and major corporate policies; monitoring and reviewing financial and operating performance; approving annual budgets, and major funding and investment proposals; ensuring an effective risk management framework is in place; and appointing Board Directors and key managerial personnel. Material transactions that require Board approval are capital expenditure in excess of S$5 million and operating expenditure in excess of S$3 million.

Currently the Board comprises twelve Directors, all of whom save for the Chief Executive Officer (“CEO”) are non-executive and five of whom are independent. The Board consists of respected individuals from different backgrounds and whose core competencies, qualifications, skills and experience are extensive and complementary. Details of the Directors’ academic and professional qualifications and other appointments are set out in Particulars of Directors & Senior Management section of the Annual Report.

To facilitate effective management, certain functions have been delegated to various board committees, namely the Nominating Committee, Remuneration Committee and Audit Committee, each of which has its own written terms of reference. Members of the Board and each board committee through 2005 are set out below:

N: Non-independent
I: Independent

¹ Mr Michael John Grant resigned as a Director of the Company with effect from 27 October 2005.
² Messrs Ganen Sarvananthan and Yusof Annuar Yaacob were appointed as Directors of the Company with effect from 16
  November 2005.

At least one-third of the Directors retires at the Annual General Meeting each year. The dates of initial appointment and most recent re-election of the Directors are set out below:

In order to ensure that the Board is able to fulfil its responsibilities, prior to the Board meetings, management provides the Board with financial and operating reports reviewing performance in the most recent quarter, and papers containing relevant background or explanatory information required to support the decision-making process. Directors are also provided with monthly management financial statements setting out actual against budget as well as previous year’s comparatives and explanations on any material variances.

All Directors have separate and independent access to senior management and to the Company Secretaries. The Company Secretaries administer, attend and prepare minutes of Board meetings, and assist the Chairman in ensuring that Board procedures are followed and reviewed so that the Board functions effectively, and the Company’s Memorandum and Articles of Association and relevant rules and regulations, including requirements of the Companies Act and SGX-ST, are complied with. They also act as the primary channel of communication between the Company and the SGX-ST.

Should Directors, whether as a group or individually, need independent professional advice in the furtherance of their duties, the cost of such professional advice is borne by the Company.

The Board meets at least once every quarter. Additional meetings may be held as and when necessary to consider substantive matters that require attention before the next scheduled meeting. During the year, six Board meetings were held. The Company’s Articles of Association provide for telephonic and videoconference meetings. The number of Board meetings held in the year, as well as the attendance of every Board member at those meetings was as follows:

¹ Number of meetings held since Messrs Ganen Sarvananthan and Yusof Annuar Yaacob’s appointment as Directors of the
  Company with effect from 16 November 2005.

Briefings were also held during the year to ensure that Directors were updated on latest compliance requirements as well as industry developments.

    (Code of Corporate Governance Principle 3)

Mr Lim Chee Onn is the Chairman of the Company and Mr Neil Montefiore is the Chief Executive Officer (“CEO”). They each perform separate functions to ensure that there is an appropriate balance of authority and responsibilities, and that accountability and independent decision-making are not compromised.

    (Code of Corporate Governance Principles 4 & 5)

The NC comprises entirely independent Directors, namely Dr Thio Su Mien (NC Chairman), Mr Reggie Thein and Mr Patrick Yeoh Khwai Hoh. The NC, which has written terms of reference approved by the Board, performs the following functions:

The number of NC meetings held in 2005 and the attendance of each member at those meetings were as follows:

On 30 August 2005, SunShare Investments Ltd (“SunShare”) submitted to the Chairman of the Board and Chairman of the NC a request for the appointment of 2 of their nominees as directors to the Board on the basis that SunShare would be a substantial shareholder of the Company, subject to IDA’s approval of SunShare’s shareholding in the Company which was subsequently obtained. After due consideration by the NC, the NC recommended to the Board the appointment of Messrs Ganen Sarvananthan and Yusof Annuar Yaacob as Directors of the Company. The Board accepted the recommendations of the NC, subject to IDA’s approval. Messrs Ganen Sarvananthan’s and Yusof Annuar Yaacob’s appointment as Directors of the Company was effective on 16 November 2005.

The NC also initiated and supervised an exercise to evaluate the Board’s and individual Director’s performance. The objective of the exercise was to identify and prioritise areas for continuous improvement to the Board’s effectiveness.

For this purpose, the NC appointed an independent consultant to conduct the evaluation process. For the evaluation of the Board as a whole, this was based on the framework established and used in the previous year, while for the evaluation of individual Directors a new framework was developed as this was the inaugural individual evaluation undertaken. The consultant provided summarised findings, interpretation of findings and preliminary recommendations for the Board’s consideration.

All Directors assessed the Board as a whole on each of the following seven parameters:
• Board composition and independence
• Board role and functioning
• Information management
• Managing company performance
• Managing risk and adversity
• Developing company leadership
• Corporate integrity and social responsibility
• Direction development and management

In addition, the contribution of each individual Director to the effectiveness of the Board was assessed by their peers on the Board. The evaluation was based on the following six parameters:
• Contribution
• Knowledge and abilities
• Teamwork
• Integrity
• Personal commitment
• Overall effectiveness

The Board expects to carry out evaluation of the Board as a whole and self-evaluation exercises annually to identify areas of improvement and as a form of good Board management practice.

    (Code of Corporate Governance Principles 7 & 8)

In 2005, the RC comprised Mr Hsuan Owyang, Mr Roger Barlow, Mr Low Huan Ping and Mr Teo Soon Hoe, all of whom are Non-executive Directors and independent of management and free from any business or relationships which may materially interfere with the exercise of their independent judgement. The RC is chaired by Mr Owyang who is an independent Director.

The Director of Human Resources assists the RC in the execution of its functions and the RC has access to external expert advice, if required.

The RC, which has written terms of reference approved by the Board, performs the following functions:

The number of RC meetings held in 2005 and the attendance of each member at those meetings were as follows:

    (Code of Corporate Governance Principles 8 & 9)

The Company sets remuneration packages to ensure that it is competitive and sufficient to attract, retain and motivate Directors and senior management of the required experience and expertise to run the Group successfully.

In setting remuneration packages for Directors and officers of the Group, the pay and employment conditions within the industry and in comparable companies are taken into consideration.

Directors’ fees are subject to shareholder approval at the Annual General Meeting. Each Non-executive Director is paid a fixed fee, the amount of which takes into account the level of responsibilities held. The framework for determining fees paid to each Non-executive Director in 2005 was as follows:

The annual remuneration of Non-executive Directors for 2005 was as follows:

¹ Prorated based on 300 days as Mr Michael John Grant resigned as a Director of the Company with effect from 27 October 2005.
² Prorated based on 46 days as Messrs Ganen Sarvananthan and Yusof Annuar Yaacob were appointed as Directors of the
   Company with effect from 16 November 2005.

For each non-independent Director, fees were paid to the relevant shareholder nominating him.

In setting the remuneration packages of the Company’s CEO and senior management, performance-related elements are incorporated in order to align interests with those of shareholders and link rewards to corporate and individual performance. The level and mix of the annual remuneration of the Company’s CEO and Executive Director, and each of the top five members of senior management (who are not also Directors), in bands of S$250,000, are set out below:

In February 2005, options were granted to the above members of the senior management team as part of the Company’s Share Option Scheme, further details of which can be found on pages 58 to 59 of the Financial Report.

    (Code of Corporate Governance Principles 11, 12 & 13; Listing Manual Rule 1207(6))

The AC comprises Mr Reggie Thein as Chairman, Mr Arthur Seet Keong Hoe, Dr Thio Su Mien and Mr Patrick Yeoh Khwai Hoh as members, all of whom are Non-executive Directors and a majority of whom, including the Chairman, are independent. Two of the members, including the Chairman, are qualified accountants.

The AC, which has written terms of reference approved by the Board, performs the following delegated functions:

The number of AC meetings held in 2005 and the attendance of each member at those meetings were as follows:

The AC had full access to and cooperation from the Company’s management, and internal and external auditors. The Chief Executive Officer, Chief Financial Officer and General Managers from the Finance Department, as well as the internal and external auditors, attended the meetings of the AC. The AC also had full access to the internal and external auditors without the presence of management.

During the year, the AC reviewed the financial statements of the Group quarterly before submitting them to the Board for its approval and the announcement of the financial results. The AC also reviewed and monitored the Group’s financial condition, internal and external audits, exposure to risks and the effectiveness of the Group’s system of accounting, internal controls and risk management programme.

The AC considered the volume of non-audit services provided by the external auditors to the Group, and being satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, confirmed their re-nomination.

    (Listing Manual Rule 1207(4)(d))

The Company has in place a company-wide Enterprise Risk Management (“ERM”) programme, which encompasses operational risk, financial risk, business risk and strategic risk, and which has accountability clearly assigned across all departments / functional units. Each department / functional unit in the company has in place an ERM plan, whereby risks pertaining to it are identified, degree of impact assessed, priorities assigned according to likelihood of occurrence and impact on the department / unit, and risk response action points developed to mitigate the risks.

The ERM plan is reviewed annually and simulation test exercises are conducted regularly to test staff familiarity with the plan. On the operational side, a company-wide Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) are in place to address operational exigencies. Like the ERM, the BCP and DRP are subject to regular review and exercises are also conducted to test staff response to emergencies like fire.

To further improve the Company’s ERM programme, an independent consultant was engaged by the Company to conduct a third-party review of the ERM programme. Specifically, the objectives of the review were to assess the adequacy of the existing ERM framework and make recommendations to address any gaps and areas for improvement; develop a reporting framework to assist Directors in fulfilling their duties in respect of risk management; and develop a communication plan to promote awareness of risk management within the organisation.

The review concluded that the Company’s ERM framework has in place the essential principles and processes to identify, monitor and treat risks across the business. In addition, recommendations were made by the consultant to strengthen the ERM programme, including, among other things, improvements to processes and reporting framework; the setting up of a Corporate Risk Management Team comprising senior management staff with direct reporting line to Audit Committee to better focus on risk management; and the development of a Risk Management Policy and Manual to formalise and document the structure, roles and responsibilities, processes and reporting requirements.
The Company is in the process of implementing the consultant’s recommendations.

    (Code of Corporate Governance Principle 12)

The Board believes that, in the absence of any evidence to the contrary, the system of internal controls maintained by the Group’s management and in place throughout the year and up to and as of the date of this report, is adequate to meet the needs of the Group in its current business environment. The Audit Committee has reviewed the effectiveness of internal controls.

The system of internal controls provides reasonable, but not absolute, assurance that the Group will not be adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives.

However, the Board notes that no system of internal controls could provide absolute assurance in this regard, or absolute assurance against the occurrence of material errors, poor judgement in decision-making, human errors, losses, fraud or other irregularities.

    (Code of Corporate Governance Principle 13)

The Company has an internal audit function that is independent of the activities it audits.

The Internal Auditor reports primarily to the Chairman of the AC and administratively to the CEO. The Internal Auditor meets the standards set by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors and Information Systems Audit and Controls Association.

The AC reviews, on an annual basis, the adequacy of the internal audit function. The AC has reviewed and is satisfied that the Company’s internal audit function is adequately resourced and has appropriate standing within the Company.

       (Code of Corporate Governance Principle 10, 14 & 15)

A number of communication channels are used to account to shareholders for the performance of the Company. These include the annual report, quarterly results and other announcements made through the SGXNET, press releases and the Company’s website, as well as through the Annual General Meeting (AGM). Presentations given at appropriate intervals to representatives of the investment community are also made available on the Company’s website.

During the year, the Company continued to release information on its quarterly, interim and full-year results within three weeks from the close of the relevant period in the form of financial statements, management’s discussion and analysis of performance and outlook, and a presentation containing highlights and a review of financial and operating performance. Information on major new initiatives through the year was also made public as soon as feasible. In addition, the Company participated in several investor conferences, including an SGX Investment Seminar in June 2005 which attracted over 300 private investors, and presentations done were made available on the Company’s website.

The Annual Report and notice of AGM were sent to all shareholders two weeks prior to the AGM which was held on 31 March 2005. Under Article 65 of the Company’s Articles of Association, shareholders may vote in person or by proxy and equal effect is given to votes whether cast in person or by proxy. During the AGM, shareholders had the opportunity to voice their views and direct questions to Directors, including the Chairman and the chairmen of the Board committees, as well as to senior management.

Last but not least, through its Investor Relations team, the Company managed ongoing communication with the investment community throughout the year and responded diligently and promptly to all enquiries from shareholders, analysts and other interested parties.

       (Listing Manual Rule 710(2))

The Group has issued a Code for Dealings in M1 Shares (“the Code”) for the guidance of Directors, management and officers. The Code, which is based on SGX-ST Best Practices Guide with respect to dealings in securities, stipulates that Directors, management and officers of the Group who have access to price-sensitive and confidential information are not permitted to deal in the Company’s shares during the periods commencing one month before the announcement of the Group’s half and full year results and two weeks before the announcement of the Group’s first and third quarter results and ending on the date of the announcement of such results; or when they are in possession of unpublished price-sensitive information on the Group. The Code is incorporated as part of the Group’s Human Resources Manual and is available on the Intranet accessible by all staff. A reminder is also circulated to Directors, management and officers every quarter before the commencement of the period during which dealings in shares are prohibited and to those with access to price-sensitive and confidential information.

       (Listing Manual Rule 907 & 1207(8))

Interested person transactions carried out during the financial year by the Group were as follows:

* The Company does not have a shareholders’ mandate pursuant to Rule 902 of the Listing Manual of the SGX-ST
^ As defined in Chapter 9 of the Listing Manual of the SGX-ST

The companies referred to above have, on 28 October 2005, become “interested persons” as defined in Chapter 9 of the Listing Manual of the SGX-ST.

Save for the interested person transactions disclosed above, there were no other material contracts entered into by the Company and its subsidiaries involving the interests of its Chief Executive Officer, Directors or controlling shareholders, which are either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.