COROPRATE GOVERNANCE CODE
The Board and management of the Company are committed to enhancing corporate governance standard and ensure that the Group’s business and decision making processes are regulated in a proper and prudent manner, in compliance with all relevant code provisions as set out in the Corporate Governance Code (the “Code”) in Appendix 14 of the Listing Rules.
The Directors, individually and collectively, are committed to act in good faith in the best interests of the Company and its shareholders.
The Board is responsible for performing the corporate governance functions of the Company in accordance with the Code, including determining the Group’s corporate governance policies, and reviewing and monitoring the corporate governance practices of the Group.
The Board is responsible for the management of the business and affairs of the Group with the objective of enhancing shareholders value and presenting a balanced, clear and understandable assessment of the Company’s performance, position and prospects in the annual and interim reports, and of other inside information announcements and accounting policies, and reports to regulators any information required to be disclosed pursuant to the relevant statutory requirements.
The Board has fiduciary duty and statutory responsibility towards the Company and the Group. Other responsibilities include, formulation of the Group’s overall strategy and policies, setting corporate and management targets and key operational initiatives, monitoring and control of operational and financial performance, and approval of budgets and major capital expenditures, major investments, material acquisitions and disposals of assets, corporate or financial restructuring, significant operational, financial and management matters.
The Board delegates day-to-day management of the business of the Group to the management of the business of the Group to the management of the relevant principal subsidiaries and certain specific responsibilities to audit committee, remuneration committee, nomination committee and the Investment and Management Committee (“IMC”). These committees have specific functions and authority to examine issues and report to the Board with their recommendations (if appropriate). The final decision rests with the Board, unless otherwise provided for in the terms of reference of the relevant committee.
The Company has arranged appropriate liability insurance cover for liabilities in respect of legal actions against Directors arising out of corporate activities. The insurance coverage is reviewed regularly.
The company secretary of the Company (‘Company Secretary”) provides the Directors with updates on developments regarding the Listing Rules and other applicable regulatory requirements. Any Director may request the Company Secretary to arrange for independent professional advice at the expense of the Company to assist the Directors to effectively discharge their duties to the Company.
The independent non-executive Directors serve the important function of ensuring and monitoring the basis for an effective corporate governance framework. Each of the independent non-executive Directors has to provide an annual confirmation of his/her independence to the Company. The Board considers that each of the independent non-executive Directors is independent in character and judgment and that they all meet the specific independence guidelines as set out in Rule 3.13 of the Listing Rules.
All Directors are regularly updated on governance and regulatory matters. There is an established procedure for Directors to obtain independent advice where necessary at the expense of the Company in discharging of their duties to the Company.
The Board meets at least four times each year to review the overall strategy and to monitor the operation as well as the financial performance of the Group. Additional meetings may be convened to approve any notifiable transaction and shares issuance. Notice of at least fourteen days is served for regular board meetings. Reasonable notice would be given for all other special board meetings which are not held regularly. The chairman of the Board is primarily responsible for drawing up and approving the agenda for each board meetings in consultation with all Directors and ensure that all Directors are properly briefed on issues arising at board meetings. Agenda and accompanying board papers in respect of board meetings are sent out in full to all Directors within a reasonable time before the date of every board meetings to all them to review these documents in advance. Minutes of all board meetings, the remuneration committee, the nomination committee, the audit committee and the IMC are kept by the Company Secretary and the Directors may inspect these minutes at any time during office hours upon giving reasonable notice. Minutes of all committee, the nomination committee, the audit committee and the IMC, have recorded in sufficient detail the matters considered by the Board and the board committees, including any concerns raised by Directors or Dissenting view expressed. Draft and final versions of these minutes were sent to all Directors for their comment and records respectively, normally within 10 days after the relevant meeting was held.
BOARD OF DIRECTORS DIVERSITY POLICY
The company understands the benefits of diversified board members to improve the quality of company performance. The company adopted the board of directors diversity policy on 28 August 2013. This policy stipulates that the nomination committee of the company reviews and evaluates the composition of the board of directors, makes recommendations to the board of directors on the appointment of new directors of the company, and conducts an annual review of the effectiveness of the board of directors, so as to achieve the goal of diversified board members.
According to Code Provision A.6.5, all directors should participate in continuous professional development, develop and update their skills and skills.
After accepting the appointment, new directors will obtain a set of entry information documents, which contain all major legal and listing rules requirements, as well as guidelines on the responsibilities and obligations of directors. The information documents also include the latest financial statements of the company and corporate governance practices adopted by the board of directors.
The company also continues to provide directors with the latest information on the listing rules and other applicable regulatory requirements to ensure that directors comply with these rules and raise their awareness of good corporate governance practices, and issue circulars or (if appropriate) to directors. Guidelines to ensure they understand the best corporate governance practices.
APPOINTMENT AND RE-ELECTION OF DIRECTORS
According to the company's articles of association, any new director appointed by the board of directors (whether to fill a temporary vacancy or add to the existing board of directors) must retire and be re-elected by shareholders at the next general meeting of shareholders after his appointment. At each annual general meeting of the company, one-third of the directors at that time (or, if the number of directors is not a multiple of three-thirds, the number closest to one-third but not more than one-third) must Retires and can be re-elected.
All directors shall retire by rotation and be re-elected by shareholders at least once every three years at the annual general meeting.
THE COMMITTEES UNDER THE BOARD
As an integral part of good corporate governance, the board of directors has established the following committees with clear terms of reference.
The Company has established an audit committee in compliance with Rule 3.21 of the Listing Rules. The audit committee supervises the company's financial reporting procedures, risk management and internal control systems. The management of the company is responsible for preparing the financial statements of the group and the external auditors are responsible for reviewing the financial statements of the group. The members of the audit committee independently review the financial statements and supervise the company's financial reporting and internal control systems to assist the board of directors in fulfilling their responsibilities. The audit committee submits a report on its findings to the board of directors after each meeting of the audit committee.
The Company has established a nomination committee with terms consistent the Code Provisions A.5.1 to A.5.6. The written terms of reference of the nomination committee have included the duties as set out in the relevant Code Provisions.
The Nomination Committee holds meeting at least once a year. The Nomination Committee, among other things, review the composition of the Board, consider the independence of the Independent Non-executive Directors, the retirement of directors and the resignation and the appointment of the Independent Non-executive Directors.
The Company has established a remuneration committee to deal with matters of remuneration and compensation arrangement of Directors and senior management.
The terms of reference of the Remuneration Committee follow the guidelines set out in the Code and it is mainly responsible for making recommendations to the Board on the Company’s policy for the remuneration of Directors and senior management. The Remuneration Committee shall meet at least once a year.
Investment and Management Committee
The principal role and function of the IMC includes act as a delegate for the Board generally; make decisions and resolutions, and to exercise all powers of the Board on all matters of the Group in relation to its daily operation and investment activities; and make recommendations to the Board concerning matters of corporate significance not otherwise dealt by any other committees of the Board.