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their audit to the independent directors of theAudit Committee.The Committee was briefed by Arthur Andersen, thenew auditors for the Group on their roles andresponsibilities and the planned audit approach withspecial attention on risk areas and activities of theGroup.The Committee also addressed IT securityissues and improvements to IT security infrastructureand controls to constantly ensure a secure operatingenvironment.The Budget & Finance Committee held three meetingsduring the year.The Committee comprises Mr TanGuong Ching as Chairman, Mr Philip Tan, Mr LucienWong, all of whom are independent members and MrBoon Swan Foo.The Committee held three meetings during the year.During the year, the Committee reviewed and approvedthe Group’s contractual and legal policies checklist to aidcontract negotiators in addressing critical issues andcontaining major risk factors affecting the Group’sliabilities during contract negotiations.The checklist isbeing reviewed regularly.The Committee also reviewed unusual liability issuesin contract terms with major customers, factoringarrangement with subcontractors and factoring companies,risk management in new e-bidding car tradingsystem and counter-risk measures.The Committee further reviewed the Group’s forexposition. No major issue was brought to its attention.The Technology Committee is chaired by Mr Peter Hoand consists of Prof Lui Pao Chuen and Mr Boon SwanFoo.The Committee met three times during the year toreview technology development plans of the Groupfrom the development of identified technologies to thebuildup of capabilities for cross-learning and applicationin each of the sectors.The Research & Development Committee is chaired byProf Lui Pao Chuen and comprises Mr Winston Tan andMr Boon Swan Foo. It held three meetings during theyear.The Committee reviewed R&D initiatives for1999 and the Group’s R&D Plan for 2000 with theobjective of strengthening core competencies andsustaining core engineering expertise.The ST EnggInnovation Award to encourage research anddevelopment efforts and sharing continued into itssecond year.The Senior HR Committee is chaired by Ms Ho Chingand consists of Mr Boon Swan Foo, Mr Tan Guong Chingand Mr Peter Ho.The Committee met once during theyear to discuss proposed changes in senior appointmentsas well as training and development of senior staff andstaff with potential for senior positions in the Group.STATEMENT OF COMPLIANCEThe Board of Directors confirms that during the yearended 31 December 2000, the Company has compliedwith the ST Engg Corporate Governance Policy whichis modelled on the principles of the SGX BestPractices Guide.Activities involved the quarterly and half year review offinancial results in relation to the budget, e-businessinitiatives and five-year forecast of each sector as well asthe annual budget process.The Business Investment/Divestment Committeecomprises Mr Tan Guong Ching, Chairman andMr Winston Tan who are independent members, MrPeter Ho, MG Lim Chuan Poh and Mr Boon Swan Foo.Mrs Lim Hwee Hua, a director of ST Kinetics, is a cooptedmember.The Committee held one meeting duringthe year to review a strategic investment proposal by thesubsidiaries.The fact that the Committee had only onemeeting this year is by no means a reflection of lack ofinvestment opportunities. In March 2000, the Boardraised the approval limit for investments by the DeputyChairman & CEO to S$25m. Furthermore investment/acquisition opportunities under review are not raised tothe Committee at the preliminary stage.The Legal Committee, which met thrice during the year,comprises Mr Lucien Wong as Chairman, Mr Boon SwanFoo, Mr Philip Tan and Mr Winston Tan. Assoc Prof TanCheng Han, a Director of ST Aero, is a co-optedmember.The Legal Committee’s objective is to providelegal guidance and directions on all important legalmatters of the Group.The Risk Review Committee is chaired by MG LimChuan Poh and members consist of Mr Winston Tan, DrPhilip Pillai, Mr Chang See Hiang (co-opted member andBoard member of ST Marine) and Mr Boon Swan Foo.The Compensations Committee is chaired by Ms HoChing with Mr Ng Kee Choe and Mr Fock Siew Wah(co-opted) as independent members.The Committeemet twice during the year to assess the performance ofkey executives, determine the bonus award for 1999,review salaries and approve the incentives plan for keyexecutives for Year 2000. Mr Fock stepped down fromthe Committee at the end of the year.We are grateful tohim for his contribution and time.The ESOS Committee is chaired by Ms Ho Ching andconsists of Mr Ng Kee Choe and Mr Tan Guong Chingwho are independent members.The Committee mettwice during the year to decide on option grants.Following the approval in November 2000 of theST Engg Share Plans, the functions of both the ESOSCommittee and the Compensations Committee havebeen merged under the Executive Resource &Compensation Committee (ERCC).The ERCC comprises Ms Ho Ching as Chairman, MrNg Kee Choe and Mr Tan Guong Ching.The Tenders Committee comprises a rolling list of anythree Directors and the CEO.The Committee met twicelast year to discuss various issues relating to the US Bionixprogramme such as programme schedules, strategies, riskfactors, costing, funding, pricing, strategy, payment termsand projected financial impact.The Meetings were chairedby Mr Tan Guong Ching and attended by Mr LucienWong, Mr Winston Tan and Mr Boon Swan Foo.178 • visionadditional information • 179