The Board of Directors of China Aviation Oil (Singapore) Corporation Ltd ("CAO") is committed to enhancing CAO's standards of board effectiveness, corporate governance and transparency. It strives to surpass the minimum requirements as prescribed by the Singapore Exchange Securities Trading Limited ("SGXST") and the recommendations of the Code of Corporate Governance (the "Code"), with the view to preserve and grow shareholder value. This is a commitment which the Board of Directors (the "Board") pays a lot of attention to post-restructuring.

To improve internal controls and corporate governance beyond adopting the recommendations of the Code, the Board constituted a Corporate Governance Assessment Committee ("CGAC") in 2005 to examine the corporate practices and governance of CAO and to make recommendations for improvement. The CGAC comprised five members:

Corporate Governance Assessment Committee

The CGAC presented its recommendations to the Board on 9 December 2005. In April 2006, the new Board accepted all the CGAC's recommendations. As at the date of this report, the Company has successfully implemented the majority of the recommendations.

This report, extracted from Annual Report 2006 , describes the Company's corporate governance practices. The Report is divided into five broad sections:

(A) Board Matters;

(B) Remuneration Matters;

(C) Accountability and Audit;

(D) Internal Controls; and

(E) Communication with Shareholders