A Audit Committee of our directors has been formed by our board of directors on 25th October 2007, which comprises of the following members, all of whom are non-executive directors and majority of whom including the Chairman are independent:

Mr. Huang Yuan Chiang (Chairman) (Non-executive/Independent)

Mr. John Walter Sinders Jr. (Non-executive/Independent)

Mr. Pushpatraj Shivlal Shah (Non-executive)

The duties of our Audit Committee include:

• assisting our board of directors in discharging its statutory responsibilities on financing and accounting matters;
• reviewing significant financial reporting issues and judgments to ensure the integrity of the financial statements and any formal announcements relating to financial performance;
• reviewing the scope and results of the audit and its cost effectiveness, and the independence and objectivity of the external auditors;
• reviewing the adequacy of our internal controls comprising internal financial controls, operational and compliance controls, and risk management policies and systems established by the management, ensuring that such review of the effectiveness of the internal controls is conducted at least annually;
• reviewing any interested person transactions as defined in the SGX-ST Listing Manual. See “Interested Person Transactions and Potential Conflicts of Interests;”
• reviewing the effectiveness of our internal audit function;
appraising and reporting to our board of directors on the audits undertaken by the external auditors and internal auditors, the adequacy of disclosure of information, and the appropriateness and quality of the system of management and internal controls; and
• making recommendations to our board on the appointment, reappointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor.

Apart from the above functions, our Audit Committee will also commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls, or infringement of any law, rule or regulation which has or is likely to have a material impact on Mercator Group’s operating results or financial position. Each member of our Audit Committee will abstain from voting in respect of matters in which he is interested.

Our Audit Committee will have free and full access to the management as well as the internal and external auditors. The Audit Committee at its sole discretion may invite any director and/or executive and/or officer to attend its meetings and seek any information from them as it may deem necessary. If required, our Audit Committee shall be entitled to obtain advice or consultative help from external consultants or professionals at our Company’s expense.

Any member of our Audit Committee who is interested in any matter placed before the Audit Committee, shall abstain from discussion and voting in respect of such matters in which he has an interest. Each of the directors shall also abstain from voting on any contract or arrangement or proposed contract or arrangement in which he has a personal material interest. Also, all future transactions with related parties shall comply with the requirements of the Listing Manual.