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Corporate Governance Committee


The primary duties of our corporate governance committee are to oversee corporate governance matters within our Group and formulate our corporate governance policies; to receive reports from our legal department; to review the structure, size and composition (including the skills, knowledge and experience) of our Board; to assess the independence of our independent non-executive Directors; to monitor the performance of our management in relation to corporate governance matters; and to report to our Board on its findings on corporate governance and legal compliance matters. At present, our corporate governance committee consists of three members, namely Lo Wa Kei, Roy (chairman), Wen Xianjun and Shi Ketong.

China Zhongwang Holdings Limited (the “Company”)
Terms of Reference of the Audit Committee of the Board of Directors (the “Board”)



I. Constitution

The Board resolved to establish an Audit Committee (the “Committee”) under the Board at its meeting on 20 August 2008.


II. Membership

1. The Committee shall comprise no fewer than three members who must be non-executive directors;

2. The majority of the Committee members (“Member(s)”) shall be independent non- executive directors as prescribed by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) (as amended from time to time), at least one of which must be an independent non-executive director with appropriate professional qualifications or accounting or related financial management expertise as required by Rule 3.21 of the Listing Rules;

3. The Chairman of the Committee shall be appointed and removed by the Board and must be an independent non-executive director;

4. All members of the Committee shall be appointed by the Board and can be removed by the Board at its sole discretion. The Board shall follow the requirements of the Listing Rules or other laws and regulations in changing the composition of the Committee;

5. A former partner of the Company’s existing auditing firm responsible for auditing the Company’s accounts shall not act as a member of the Committee for a period of one year commencing on the date (whichever is the later) of his ceasing:

(a) to be a partner of the firm; or

(b) to have any financial or economic interest in the firm;

6. The company secretary of the Company shall be the secretary of the Committee, who must respond in detail to the queries raised by any Member regarding the meeting procedures and the authority and duties of the Committee.


III Authority

1. The Committee is authorized by the Board to investigate any activity within its terms of reference. The Committee is empowered to request any necessary information from any employee and all employees have been instructed to cooperate and accede to its requests;

2. The Committee is authorized by the Board to consult external legal or any other independent professional opinions. External parties with related experience and professional knowledge may be invited, when necessary, to attend the meetings. The Board must ensure that the Committee has sufficient resources to perform its duties. The Company shall be responsible for the payment of all relevant costs.


IV Duties

The Committee shall have the following duties:

A.Relationship with the Company’s external auditors

1. to be primarily responsible for making recommendations to the Board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and the terms of engagement of the external auditor, and any questions of its resignation or dismissal;

2. to review and monitor the independence and objectivity of the external auditor and the effectiveness of the audit process in accordance with applicable standards. The Committee may resolve to adopt the following procedures:

(a) to consider all relations between the Company and the external auditor (including the provision of non-audit services);

(b) to seek information each year from the external auditor to learn about its policy and procedures for maintaining independence and monitoring the compliance of the relevant rules; including those for rotation of audit partners and staff.

3. to discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences;

4. to develop and implement policy on the engagement of an external auditor to supply non-audit services. (For this purpose, external auditor includes any  entity  that  is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third parity knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally.) The Committee shall report to the Board, identifying and making recommendations on any matters where action or improvement is needed.

B.Review of financial information of the Company

5. to monitor integrity of financial statements of the Company and the  Company’s annual report and accounts, interim report and quarterly reports (if applicable), and to review any significant financial reporting judgments contained in them. In reviewing these accounts and reports before submission to the Board, the Committee shall focus particularly on:

(a) any changes in accounting policies and practices;

(b) major judgment areas;

(c) significant adjustments resulting from audit;

(d) the going concern assumptions and any qualifications;

(e) compliance with accounting standards; and

(f) compliance with the Listing Rules and other legal requirements in relation to financial reporting.

6.In regard to sub-paragraph B5:

(a) members of the Committee should liaise with the Board and senior management and the Committee must meet, at least twice a year, with the external auditors; and

(b) the Committee should consider any significant or  unusual  items  that  are,  or may need to be, reflected in such reports and accounts and should give due consideration to any matters that have been raised by the Company’s staff responsible for the accounting and financial reporting functions, internal control department or external auditors.

C.Oversight of the Company’s financial reporting system, internal control and risk management procedures

7. to review the Company’s financial controls, and unless expressly addressed by a separate Board risk committee, or by the Board itself, to review the Company’s risk management and internal control systems (including the review of reports prepared by internal control department on internal control procedures and criteria of the Company and its subsidiaries);

8. to discuss the risk management and internal control system with the management and to ensure that the management has performed its duty to have  effective  internal  control  systems. This discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company’s accounting and financial reporting function;

9. to consider, as delegated by the Board or on its own initiative, major investigation findings on risk management and internal control matters and management’s response to these findings;

10. where an internal audit function exists, to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and to review and monitor its effectiveness;

11. to review the Group’s financial and accounting policies and practices;

12. to review the external auditor’s management letter, any material queries raised by the auditor to management about the accounting records, financial accounts or systems of control and management’s response;

13. to ensure that the Board will provide a timely response to the issues raised in the external auditor’s management letter;

D.Other Duties

14. to report to the Board on all matters set out in the terms of reference;

15. to consider any other topics or matters, as defined by the Board;

16. to submit the internal control matters in respect of compliance issues to the Corporate Governance Committee (if applicable);

17. to review arrangements by which employees can, in confidence,  raise  concerns about possible improprieties in financial reporting, risk management, internal control or other matters. The Committee should ensure that proper arrangements are in place for the fair and independent investigation of such concerns and appropriate follow-up action;

18. to act as the key representative body for overseeing the Company’s relations with the external auditor;

19. to formulate whistleblowing policy and mechanism by which employees and others who have a relationship with the Company (such as customers and suppliers) may raise, in confidence, any concern to the Committee about possible improprieties of the Company.


V. Reporting Procedures

1. The Committee should report to the Board directly its decisions or recommendations, except for those restricted by laws and supervisory regulations;

2. The secretary of the Committee shall circulate the minutes of the Committee meetings, reports of the Committee and relevant information to all directors of the Company.


VI. Meetings of the Committee

1. Frequency

The Committee shall hold meetings over reports prepared by internal control department on internal control procedures and criteria of the Company and its subsidiaries (“Internal Control Procedure Meetings”). The Committee shall meet at least twice a year (including the Internal Control Procedure Meetings). The external auditor may request that a meeting be held if they consider it necessary.

2. Notice

Notice of any meetings of the Committee has to be given at least 5 days prior to any such meeting being held, unless all Members unanimously waive such notice. The secretary of the Committee shall ensure that all items the Members request to be discussed are included in the meeting agenda. Irrespective of the length of notice being given, attendance of a meeting by a Member shall be deemed waiver of the requisite length of notice by the Member. Notice of any adjourned meetings is not required if adjournment is for less than 5 days.

3. Quorum

The quorum of the Committee shall be:

(a) any two Members; and

(b) the majority of the attending Members being independent non-executive directors.

4. Attendance

Members may participate in a meeting in person or through a conference telephone or other communications equipment by means of which all persons participating in the meeting are capable of hearing each other.

The following persons will normally attend all the meetings of the Committee, unless requested otherwise by the Committee:

(a) external auditor;

(b) head of internal control department;

(c) Chief Financial Officer;

(d) Company Secretary.

Other members of the Board may attend meetings of the Committee although only Members are entitled to vote at such meetings.

5. Resolutions

Resolutions of the Committee shall be passed by a majority of votes or unanimous written consent. Meetings can be held in person, by telephone or by video conference.

6. Minutes

The secretary of the Committee shall keep full minutes of all Committee meetings with details on matters considered (including matters noted and objections raised by any Member) by the Committee, the relevant resolutions and the voting results. Draft and final versions of the minutes of the Committee meetings shall be sent to all Members for their review and records respectively, each within a reasonable time after the meeting.

The minutes of all of the Committee meetings shall be delivered to other Board members simultaneously when they are sent to the Committee Members.


VII. Publication of these Terms of Reference

These terms of reference will be posted on the websites of the Stock Exchange and the Company.


VIII. Miscellaneous

These Terms of Reference were passed by the Board and became effective on the day when the shares issued by the Company were first listed and traded on The Stock Exchange of Hong Kong Limited. These Terms of Reference were amended by the Board and shall be applicable to the Company’s financial year beginning on 1 January 2016 and beyond, reflecting the practice of the Committee. The Board shall have the power to amend and interpret these Terms of Reference pursuant to the amendments to the Listing Rules issued by The Stock Exchange of Hong Kong Limited from time to time.


China Zhongwang Holdings Limited(the “Company”)
Terms of Reference of the Nomination and Remuneration Committee of the Board of Directors (the “Board”)


I. Constitution
The Board resolved to establish a Remuneration Committee (the “Committee”) under the Board at its meeting held on 20 August 2008.
Pursuant to the amendment to the Listing Rules (as defined below) issued by The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 28 October 2011, the Board resolved to change the name of the Committee to Nomination and Remuneration Committee as well as to broaden its terms of reference accordingly on 28 December 2011.

II. Membership
1. The Committee is composed of three members who are directors. All members of the Committee (“Member(s)”) shall be appointed by the Board and can be removed by the Board at its sole discretion. The Board may from time to time vary the composition of the Committee as may be required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) (as amended from time to time) or applicable laws.
2. A majority of the Members shall be independent non-executive directors.
3. The chairman of the Committee shall be the chairman of the Board or an independent non-executive director appointed by the Board. The Board has the authority to remove the committee chairman appointed by it. 
4. The company secretary of the Company shall be the secretary of the Committee. The secretary of the Committee shall give detailed replies to queries raised by any Member in relation to the meeting procedures and the authority and duties of the Committee.

III. Authority
1. The Committee shall report directly to the Board and shall consult the chairman of the Board and/or the chief executive of the Company before making recommendations relating to executive directors’ remuneration. 
2. The Committee is authorised to obtain independent external professional advice and to invite external parties with relevant experience and expertise to attend its meetings where it considers necessary. The Company shall bear all related fees and expenses.  
3. The Committee should be provided with sufficient resources to perform its duties.


IV. Duties
The duties of the Committee shall include the following:
1. to regularly review the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and make recommendations on any proposed changes to the Board to complement the Company’s corporate strategy;
2. to identify individuals suitably qualified to become Board members and select or make recommendations to the Board on the selection of individuals nominated for directorships;
3. to assess the independence of the independent non-executive directors;
4. to make recommendations to the Board on the appointment or re-appointment of directors and succession planning for directors, in particular the chairman and the chief executive;
5. to make recommendations to the Board on the policy and structure of the Company for all directors’ and senior management remuneration and on the establishment of a formal and transparent procedure for developing remuneration policy;
6. to review and approve remuneration recommendations by reference to corporate goals and objectives resolved by the Board;
7. to examine and determine the remuneration packages of executive directors and senior management. These shall include any benefits in kind, pension rights and any other compensation payments (including compensation for any loss or termination of office or appointment);
8. to make recommendations to the Board on remuneration of non-executive directors; 
9. to consider salaries paid by comparable companies, time commitment, responsibilities and employment conditions elsewhere within the Group. 
10. to review and approve compensation for executive directors and senior management in respect of any loss or termination of office or appointment and report it to the Board, ensuring that such compensation is consistent with relevant contractual terms and is otherwise fair, reasonable, and not excessive;
11. to review and approve compensation arrangements for directors in respect of dismissal or removal of directors for misconduct and report it to the Board, ensuring that such compensation arrangements are consistent with relevant contractual terms and are otherwise reasonable and appropriate;
12. to ensure that no director or any of his/her associates is involved in determining his/her own remuneration;
13. to advise shareholders on votes to be taken with respect to any service contracts of directors if shareholders’ approval is required under the Listing Rules.


V. Reporting Procedures
1. The Committee shall report on its decisions or recommendations to the Board subject to legal or regulatory restrictions.
2. The Committee secretary shall circulate minutes and reports of the Committee to all members of the Board.

VI. Committee Meetings
1. Frequency
The Committee shall meet at least once a year. Additional meetings shall be held as and when the Committee sees fit.
2. Notice
Notice of any meetings of the Committee has to be given at least 5 days prior to any such meeting being held, unless all Members unanimously waive such notice. The Committee secretary shall ensure that matters raised by any Members for discussion are included in the agenda of the meeting. Irrespective of the length of notice being given, attendance of a meeting by a Member shall be deemed waiver of the requisite length of notice by the Member. The requisite notice period is not required if a Committee meeting is adjourned for less than 5 days.
3. Quorum
The quorum necessary for resolving matters during Committee meetings shall be:
(a) Any two Members; and
(b) the majority of attending Members being independent non-executive directors.
4. Resolutions
Resolutions of the Committee shall be passed by a majority of votes or unanimous written consent. Meetings can be held in person, by telephone or by video conference.
5. Minutes
The Committee secretary shall keep full minutes of all Committee meetings with details on matters considered (including matters noted and objections raised by any members) by the Committee, the relevant resolutions and the voting results. The draft and the final version of the minutes of Committee meetings shall be sent to all Members, respectively for their review and records within a reasonable time after the meeting.
The minutes of all of the Committee meetings shall be delivered to other Board members simultaneously when they are sent to the Committee Members.

VII. Publication of the terms of reference
These terms of reference will be posted on the websites of the Stock Exchange and the Company.

Strategy and Development Committee


Our strategy and development committee has three members, namely Liu Zhongtian (chairman), Lu Changqing and Wen Xianjun.

The primary functions of our strategy and development committee are to:

(a) review and formulate the strategic positioning and development plans of our Group on a regular basis and make recommendations to the Board regarding any proposed changes;

(b) review and formulate strategies for market development and operation of our Group on a regular basis and make recommendations to the Board regarding any proposed changes; and

(c) review the strategies of our Group on its material projects, business expansion, capital expenditure, asset restructuring and operation and make recommendations to the Board regarding any proposed changes.

Procedures for Election of Directors


No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that (if the Notices are submitted after the despatch of the notice of the general meeting appointed for such election) the period for lodgment of such Notice(s) shall commence on the day after the despatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.