Corporate Governance Practices
The Company is committed to maintaining and upholding guidelines and procedures for stringent corporate governance. The principle of the Company’s corporate governance is to promote effective internal control measures and to increase the transparency and accountability of the Board to all shareholders.
The Company has adopted the provisions set out in the Code on Corporate Governance Practices (the “Code”) contained in Appendix 14 of the Listing Rules. The Company periodically reviews its corporate governance practices to ensure its continuous compliance with the Code.
Compliance with the Model Code by Directors
The Company has adopted the Model Code for Directors’Securities Transactions (the “Model Code”) as set out in Appendix 10 of the Listing Rules as its code of conduct regarding directors’ securities transactions.Directors are reminded of their obligations under the Model Code on a regular basis.
Compliance with the Code on Corporate Governance Practices
The Company has complied with the Code since the Listing except for the deviation from provision A.2.1 of the Code.
Provision A.2.1 of the Code stipulates that the roles of chairman and chief executive officer should be separated and should not be performed by the same person. The Company deviates from this provision because Mr. Liu performs both the roles of chairman of the Board and the president (i.e. the chief executive officer) of the Company. Mr. Liu is the founder of the Group and has extensive experience in the enterprise operation and management in general. Given the current stage of development of the Group, the Board believes that vesting the two roles in the same person provides the Company with strong and consistent leadership and facilitates the implementation and execution of the Group’s business strategies, which is in the best interests of the Company. The Board shall nevertheless review the structure from time to time in light of prevailing circumstances.
The Board has set up Audit Committee, Remuneration Committee, Corporate Governance Committee and Strategy and Development Committee (collectively the “Board Committees”). The Board Committees are provided with sufficient resources to discharge their duties and, upon reasonable request, are able to seek independent professional advice in appropriate circumstances, at the Company’s expenses.
(a) Audit Committee
The audit committee (“Audit Committee”) comprises three members who are all independent non-executive Directors, namely, Mr. Wong Chun Wa (chairman), Mr. Wen Xianjun and Mr. Shi Ketong. None of them is a member of the former or existing auditors of the Company.
(b) Nomination and Remuneration Committee
We have established a remuneration committee (“Remuneration Committee”) in accordance with the requirements of Appendix 14 of the Listing Rules. Members of the Remuneration Committee comprise Mr. Wen Xianjun (chairman), Mr. Liu and Mr. Shi Ketong.
(c) Corporate Governance Committee
We have established a corporate governance committee (“Corporate Governance Committee”). Members of the Corporate Governance Committee consist of three independent non-executive Directors of the Company, namely Mr. Lo Wa Kei, Roy (chairman), Mr. Wen Xianjun and Mr. Shi Ketong.
(d) Strategy and Development Committee
We have established a strategy and development committee (“Strategy and Development Committee”). Members of the Strategy and Development Committee include Mr. Liu (chairman), Mr. Lu Changqing and Mr. Wen Xianjun.