The core of the corporate governance structure is the board of directors. The board of directors is responsible for giving guidance and effective monitoring to senior management and is separate from the management of senior management. The board of directors is mainly responsible for determining the company's strategic direction and business plan; formulating annual financial budget, profit distribution and other major programs; approving annual and interim results; appointing professional committee members and senior management personnel; reviewing the company's basic management system; drawing for appointment and renewal Or change to the accounting firm audited by the company; listen to the work report of senior management and check the work of senior management.
Board of directors
Non-executiveDirectors
Dr. Li Yin Hui (Chairman)
Mr. Tao Kuan
Mr. Zeng Han
ExecutiveDirectors
Mr. Jiang Xiong (Honorary Chairman)
Mr. Zheng ZuHua (Chief Executive Officer)
Independent Non-Executive Directors
Dr. Loke Yu
Mr. Heng Ja Wei
Mr. Ho Man
The table below shows the composition of each of the four committees theBoard established.
|
Committee
Director |
Audit Committee |
Remuneration Committee |
Nomination Committee |
Risk Management Committee |
|
Dr. Loke Yu |
C |
C |
M |
M |
|
Mr. Heng Ja Wei |
M |
M |
C |
M |
|
Mr. Ho Man |
M |
M |
M |
M |
|
Mr. Zheng Zu Hua |
- |
M |
- |
C |
|
Mr. Jiang Xiong |
- |
- |
- |
M |
Notes:
C Chairmanof the relevant Board committee
M Memberof the relevant Board committee
Election of a director of the Company (the“Director”)
According to Article 88of the Company’s Articles of Association, no person other than a Directorretiring in accordance with the Articles of Association at a general meetingshall be eligible for election as a Director at any general meeting unless:
1. he / she isrecommended by the Directors for election; or
2. he / she is nominatedby a shareholder of the Company (other than the person to be proposed) bywritten notice giving his intention to propose such a candidate for election(the “Candidate”). Such nomination notice must be lodged at the Company’s headoffice or at its Hong Kong branch share registrar within 7 days from the dayafter the dispatch of the notice of the general meeting (or such other period,being a period of not less than 7 days, commencing no earlier than the dayafter the dispatch of the notice of such meeting and ending no later than 7days prior to the date appointed for such meeting, as may be determined by theDirectors from time to time). The nomination notice lodged must be accompaniedby:
a) A notice signed by theCandidate indicating his / her willingness to be elected in the generalmeeting.
b) A biographical detailsof the Candidate as set out in Rule13.51(2) of the Rules Governing the Listingof Securities on the Stock Exchange of Hong Kong Limited.
The nominatingshareholder notice must be a shareholder qualified to attend and vote at themeeting for which his / her nomination notice served.
Terms of office
According to Article 87of the Company’s Articles of Association, at each annual general meeting of theCompany, one-third of the Director for the time being (or, if their number isnot a multiple of three, the number nearest to but not greater than three)shall retire from office by rotation. The chairman of the Board and / or themanaging director of the Company shall not, whilst holding such office, besubject to retirement by rotation or be taken into account in determining thenumber of Directors to retire in each year. A retiring Director shall beeligible for re-election.
Committee
Terms of Reference
Audit Committee
1 Composition
1.1 The Committee must comprise non-executive directors only and themajority must be independent non-executive directors. It shall comprise aminimum of three members, at least one of whom is an independent non-executivedirector with appropriate professional qualifications or accounting or relatedfinancial management expertise as required under the Rules Governing theListing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”).
1.2 The Committee must be chaired by an independent non-executive director.
1.3 The company secretary of the Company or a person designated by theCommittee from time to time shall act as the secretary of the Committee.
2 Meetings and Quorum
2.1 The Committee shall meet at least twice a year. The external auditor mayrequest a meeting if they consider that one is necessary.
2.2 The quorum of a Committee meeting shall be two members.
2.3 At least once a year the Committee shall meet the external auditor in theabsence of the executive directors of the Company.
2.4 Any member of the Committee may attend any meeting of the Committee bymeans of telephone conference, electronic or other communication equipmentthrough which all persons participating in the meeting can communicate witheach other simultaneously and instantly and, for the purpose of counting aquorum, such attendance shall constitute presence at a meeting as if thoseattending were present in person.
2.5 The proceedings of the meetings of the Committee are governed by theprovisions contained in the Articles of Association of the Company forregulating the proceedings of the Board.
3 Authority
3.1 The Committee is authorized by the Board to conduct investigationswithin its terms of reference. It is authorized to obtain any informationnecessary from any employee of the Company and its subsidiaries (collectivelyreferred to as the “Group”).
3.2 The Committee should have access to independent professional advice ifnecessary and be provided with sufficient resources to perform its duties.
4 Duties
Relationship with theCompany’s auditor
4.1 To be primarily responsible for making recommendations to the Board onthe appointment, reappointment and removal of the external auditor, and toapprove the remuneration and terms of engagement of the external auditor, andany questions of its resignation or dismissal.
4.2 To review and monitor the external auditor’s independence andobjectivity and the effectiveness of the audit process in accordance withapplicable standards. The Committee should discuss with the auditor the natureand scope of the audit and reporting obligations before the audit commences.
4.3 To develop and implement policy on engaging an external auditor tosupply non-audit services. For this purpose, “external auditor” includes anyentity that is under common control, ownership or management with audit firm orany entity that a reasonable and informed third party knowing all relevantinformation would reasonably conclude to be part of the audit firm nationallyor internationally. The audit committee should report to the Board, identifyingand making recommendations on any matters where action or improvement isneeded.
Review of the Company’sfinancial information
4.4 To monitor integrity of the Company’s financial statements and annualreport and accounts, half-year report and, if prepared for publication,quarterly reports, and to review significant financial reporting judgementscontained in them. In reviewing these reports before submission to the Board,the Committee should focus particularly on:
(i) any changes in accounting policies and practices;
(ii) major judgmental areas;
(iii) significant adjustments resulting from audit;
(iv) the going concern assumptions and any qualifications;
(v) compliance with accounting standards; and
(vi) compliance with the Listing Rules and legal requirements in relation tofinancial reporting.
4.5 Regarding 4.4 above:
(i) members of the Committee should liaise with the Board and seniormanagement and the committee must meet, at least twice a year, with the Company’sauditors; and
(ii) the Committee should consider any significant or unusualitems that are, or may need to be, reflected in the report and accounts, itshould give due consideration to any matters that have been raised by theCompany’s staff responsible for the accounting and financial reportingfunction, compliance officer or auditors.
Oversight of theCompany’s financial reporting system and internal control procedures
(iii) To review the Company’s financial controls, internal control and riskmanagement systems;
(iv) To discuss the internal control system with management to ensure thatmanagement has performed its duty to have an effective internal control system.This discussion should include the adequacy of resources, staff qualificationsand experience, training programmes and budget of the Company’s accounting andfinancial reporting function;
(v) To consider major investigation findings on internal control matters addelegated by the Board or on its own initiative and management’s response tothese findings;
(vi) Where an internal audit function exists, to ensure co-ordination betweenthe internal and external auditors, and to ensure that the internal auditfunction is adequately resourced and has appropriate standing within theissuer, and to review and monitor its effectiveness;
(vii) To review the Group’s financial and accounting policies and practices;
(viii) To review the external auditor’s management letter, any material queriesraised by the auditor to management about accounting records, financialaccounts or systems of control and management’s response;
(ix) To ensure that the Board will provide a timely response to the issuesraised in the external auditor’s management letter;
(x) To report to the Board on the matters in the Corporate Governance Code(Appendix 14 of the Listing Rules); and
(xi) To consider other topics, as defined by the Board
4.6 To review arrangements employees of the Company can use, in confidence,to raise concerns about possible improprieties in financial reporting, internalcontrol or other matters. The Committee should ensurethat proper arrangements are in place for fair and independent investigation ofthese matters and for appropriate follow-up action.
4.7 To act as the key representative body for overseeing the Company’srelations with the external auditor.
4.8 To address and deal with other matters that may be delegated by theBoard to the Committee.
5 Reporting
5.1 The Committee shall report to the Board on aregular basis. At the next meeting of the Board following the meeting of theCommittee, the chairman of the Committee shall report to the Board its findingsand recommendations.
Remuneration Committee
1 Composition
1.1 The Committee shall comprise a minimum of three members, who shall beappointed by the Board from time to time. Majority of the members of the Committeemust be independent non-executive directors.
1.2 The Committee must be chaired by an independent non-executive director.
1.3 The company secretary of the Company or a person designated by theCommittee from time to time shall act as the secretary of the Committee.
2 Meetings and Quorum
2.1 The Committee shall meet at least once a year.
2.2 The quorum of a Committee meeting shall be two members.
2.3 Any member of the Committee may attend any meeting of the Committee bymeans of telephone conference, electronic or other communication equipmentthrough which all persons participating in the meeting can communicate witheach other simultaneously and instantly and, for the purpose of counting aquorum, such attendance shall constitute presence at a meeting as if those attendingwere present in person.
2.4 The proceedings of the meetings of the Committee are governed by theprovisions contained in the Articles of Association of the Company forregulating the proceedings of the Board.
3 Authority
3.1 The Committee is authorized by the Board to conduct investigationswithin its terms of reference. It is authorized to obtain any informationnecessary from any employee of the Company and its subsidiaries (collectivelyreferred to as the “Group”).
3.2 The Committee should consult the chairman and / or chief executive ofthe Company about their remuneration proposals for other executive directors.The Committee should have access to independent professional advice ifnecessary and be provided with sufficient resources to perform its duties.
4 Duties
4.1 To make recommendations to the Board on the Company’s policy andstructure for all directors’ and senior management remuneration and on theestablishment of a formal and transparent procedure for developing remunerationpolicy.
4.2 To review and approve the management’s remuneration proposals withreference to the Board’s corporate goals and objectives.
4.3 To make recommendations to the Board on the remuneration packages ofindividual executive directors and senior management. The remuneration packagesinclude benefits in kind, pension rights and compensation payments, includingany compensation payable for loss or termination of their office orappointment.
4.4 To make recommendations to the Board on the remuneration ofnon-executive directors.
4.5 To consider salaries paid by comparable companies, time commitment andresponsibilities and employment conditions elsewhere in the Group.
4.6 To review and approve compensation payable to executive directors andsenior management for any loss or termination of office or appointment toensure that it is consistent with contractual terms and is otherwise fair andnot excessive.
4.7 To review and approve compensation arrangements relating to dismissal orremoval of directors for misconduct to ensure that they are consistent withcontractual terms and are otherwise reasonable and appropriate.
4.8 To ensure that no director or any of his associates is involved indeciding his own remuneration.
4.9 To address and deal with other matters that may be delegated by theBoard to the Committee.
5 Reporting
5.1 The Committee shall report to the Board on aregular basis. At the next meeting of the Board following the meeting of theCommittee, the chairman of the Committee shall report to the Board its findingsand recommendations.
Nomination Committee
1 Composition
1.1 The Committee shall comprise a minimum of three members, who shall beappointed by the Board from time to time. Majority of the members of theCommittee must be independent non-executive directors.
1.2 The Committee shall be chaired by the chairman of the Board or anindependent non-executive director.
1.3 The company secretary of the Company or a person designated by theCommittee from time to time shall act as the secretary of the Committee.
2 Meetings and Quorum
2.1 The Committee shall meet at least once a year.
2.2 The quorum of a Committee meeting shall be two members.
2.3 Any member of the Committee may attend any meeting of the Committee bymeans of telephone conference, electronic or other communication equipmentthrough which all persons participating in the meeting can communicate witheach other simultaneously and instantly and, for the purpose of counting aquorum, such attendance shall constitute presence at a meeting as if thoseattending were present in person.
2.4 The proceedings of the meetings of the Committee are governed by theprovisions contained in the Articles of Association of the Company forregulating the proceedings of the Board.
3 Authority
3.1 The Committee is authorized by the Board to conduct investigationswithin its terms of reference. It is authorized to obtain any informationnecessary from any employee of the Company and its subsidiaries (collectivelyreferred to as the “Group”).
3.2 The Committee should have access to independent professional advice ifnecessary and be provided with sufficient resources to perform its duties.
4 Duties
4.1 To review the structure, size and composition (including the skills,knowledge and experience) of the Board and make recommendations on any proposedchanges to the Board to complement the Company’s corporatestrategy.
4.2 To identify individuals suitably qualified to become Board members andselect or make recommendations to the Board on the selection of individualsnominated for directorships.
4.3 To access the independence of independent non-executive directors.
4.4 To make recommendations to the Board on the appointment orre-appointment of directors and succession planning for directors, inparticular the chairman and the chief executive of the Company.
4.5 To address and deal with other matters that may be delegated by theBoard to the Committee.
5 Reporting
5.1 The Committee shall report to the Board on aregular basis. At the next meeting of the Board following the meeting of theCommittee, the chairman of the Committee shall report to the Board its findingsand recommendations.
Risk Management Committee
1 Composition
1.1 The Committee shall comprise a minimum of three members who shall bedirectors of the Company and one of them must be an independent non-executivedirector of the Company. Members of thecommittee shall be appointed by the Board from time to time.
1.2 The chairman of the Committee shall be appointed by the Board.
1.3 The company secretary of the Company or a person designated by theCommittee from time to time shall act as the secretary of the Committee.
2 Meetings and Quorum
2.1 The Committee shall meet at least once a year.
2.2 The quorum of a Committee meeting shall be two members.
2.3 Any member of the Committee may attend any meeting of the Committee bymeans of telephone conference, electronic or other communication equipmentthrough which all persons participating in the meeting can communicate witheach other simultaneously and instantly and, for the purpose of counting aquorum, such attendance shall constitute presence at a meeting as if thoseattending were present in person.
2.4 The proceedings of the meetings of the Committee are governed by theprovisions contained in the Articles of Association of the Company forregulating the proceedings of the Board.
3 Authority
3.1 The Committee is authorized by the Board to conduct investigationswithin its terms of reference. It is authorized to obtain any informationnecessary from any employee of the Company and its subsidiaries (collectivelyreferred to as the “Group”).
3.2 The Committee should have access to independent professional advice ifnecessary and be provided with sufficient resources to perform its duties.
4 Duties
4.1 To consider the overall objective andpolices of the Group’s comprehensive risk management system;
4.2 To review the Group’s risk management system, including but not limitedto risk management structure, functions and workflows, and to discuss the riskmanagement system with management to ensure that management has performed itsduty to have effective system;
4.3 To consider the Group’s risk tolerances and the emerging risks relatingto the Company’s business and strategies, and assess whether appropriatearrangements are in place to control and mitigate the risks effectively;
4.4 To have periodic assessment on the Group’srisk profile and risk management capabilities, and to make recommendations onthe improvement of the Group’s risk management systems and internal controls;
4.5 To consider major investigations findingson risk management matters as delegated by the Board or on its own initiativeand management’s response to these findings; and
4.6 To consider other topics, as defined by the Board
5 Reporting
5.1 The Committeeshall report to the Board on a regular basis. At the next meeting of the Boardfollowing the meeting of the Committee, the chairman of the Committee shallreport to the Board its findings and recommendations.
5.2 Full minutes of meetings of the Committee shall be keptby the secretary of the Committee. Draft and final versions of minutes of themeetings shall be sent to all Committee members for their comment and recordswithin a reasonable time after the meeting is held.