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The Company is committed to establish and uphold good corporate governance practices and procedures. The corporate governance principles of the Company emphasise an effective Board, prudent internal and risk control, transparency and accountability to its shareholders.
During the year ended 30 June 2009, being the financial year under review, the Board of Directors (the "Board") and the management of the Company have been continually reviewing and enhancing the corporate governance practices of the Company with reference to local and international standards. The Board believes that its continued efforts in enhancing the Company's corporate governance practices have contributed to the business growth of the Company and its subsidiaries (the "Group") in the past years.
Corporate Governance Practices
For the year ended 30 June 2009, the Company has applied the principles and adhered to the code provisions in the Code on Corporate Governance Practices (the "CG Code") set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time (the "Listing Rules").
The Company has also adopted an internal corporate governance code in line with the CG Code which was approved by the Board in 2005 and was subsequently revised according to amendments to the Listing Rules which took effect on 1 January 2009 (the "Internal CG Code"). The Internal CG Code aims to facilitate compliance with the CG Code and to give guidance to members of the Board and the senior management of the Company in this respect. The Board will continue to monitor and review the Company's corporate governance practices and procedures to ensure compliance with the CG Code and to enhance its practices and procedures.
Directors' Securities Transactions
The Company has adopted a code for securities transactions by Directors on the same terms as set out in Appendix 10 to the Listing Rules as amended from time to time (the "Model Code"). Each Director is specifically required to confirm with the Company that he has complied with the required standard set out in the Model Code on a regular basis. Having made such specific enquiry to each of the Directors, there has not been any non-compliance of the required standard as set out in the Model Code by any Directors in this respect.
Board of Directors
The Board currently comprises nine Executive Directors and three Independent Non-executive Directors. The Board members during the year and at present are as follows:
| Mr. CHUA Domingo |
(Chairman and Executive Director) |
| Dr. CHAN Wing Kit, Frank |
(Chief Executive Officer and Executive Director) |
| Mr. TAN Harry Chua |
(Executive Director) |
| Mr. TANENGLIAN Mariano Chua |
(Executive Director) |
| Mr. TAN Lucio Jr. Khao |
(Executive Director) |
| Mr. CHEUNG Chi Ming |
(Executive Director) |
| Mr. PASCUAL Ramon Sy |
(Executive Director) |
| Mr. CHIU Siu Hung, Allan |
(Executive Director) |
| Mr. WONG Sai Tat |
(Executive Director) |
| Mr. CHONG Kim Chan, Kenneth |
(Independent Non-executive Director) |
| Mr. SY Robin |
(Independent Non-executive Director) |
| Ms. SALAZAR Lourdes Apostol |
(Independent Non-executive Director) |
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Subsequent to the year ended date, Mr. TAN Harry Chua was appointed as addition to the Board on 25 September 2009 as Executive Director.
The Board is responsible for establishing the overall strategic development and direction of the Group, setting business objectives and development plans, monitoring the performance of the senior management, and ensuring good corporate governance. It also monitors the financial performance and the internal controls of the Group's business operations. Executive Directors are responsible for running the operation of the Group and executing the strategies adopted by the Board. The day-to-day operations of the Group is delegated to the management with department heads responsible for different aspects of the business and functions.
Non-executive Directors (including the Independent Non-executive Directors) serve the relevant function of bringing independent judgment on the development, performance and risk management of the Group through their contributions in Board meetings.
The Board considers that each Independent Non-executive Director of the Company is independent in character and judgment. The Company has received from each Independent Non-executive Director a written confirmation of his independence pursuant to Rule 3.13 of the Listing Rules.
The Board meets at least on a quarterly basis to discuss the business development, operations and financial performance of the Group. During the year, a total of five regular Board meetings were held. Details of Directors' attendance record of such regular Board meetings during the year are as follows:
| Directors |
Attendance |
| Mr. CHUA Domingo |
5/5 |
| Dr. CHAN Wing Kit, Frank |
5/5 |
| Mr. TANENGLIAN Mariano Chua |
5/5 |
| Mr. TAN Lucio Jr. Khao |
5/5 |
| Mr. CHEUNG Chi Ming |
5/5 |
| Mr. PASCUAL Ramon Sy |
5/5 |
| Mr. CHIU Siu Hung, Allan |
5/5 |
| Mr. WONG Sai Tat |
5/5 |
| Mr. CHONG Kim Chan, Kenneth |
5/5 |
| Mr. SY Robin |
5/5 |
| Ms. SALAZAR Lourdes Apostol |
5/5 |
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Notice of at least 14 days is given to all Directors for all regular Board meetings to give all Directors an opportunity to attend. All regular Board meetings adhere to a formal agenda in which a schedule of matters is addressed to the Board. All Directors have access to Board papers and related materials, and are provided with adequate information which enable the Board to make an informed decision on the matters to be discussed and considered at the Board meetings. Minutes of Board meetings are kept by the Company Secretary and are open for inspection at any reasonable time on reasonable notice by any Directors.
For qualifications, experience, expertise and relationships (if any) of the Board members and between the chairman and chief executive officer, please refer to the "Profile of Management" and the section on "Directors' interests in competing business" in the "Directors' Report" on pages 12 to 15 and pages 17 to 25 respectively of the Annual Report 2008-2009.
Chairman and Chief Executive Officer
The roles and responsibilities of the chairman (the "Chairman") and the chief executive officer (the "CEO") of the Company are segregated and separately undertaken by different officers to ensure a balance of power and authority as set out in writing in the Internal CG Code.
Mr. CHUA Domingo, the Chairman, is responsible for leading the Board, the assignment of responsibilities among members of the Board, and the proper conduct and proceedings of meetings of the Board and shareholders of the Company, and overseeing the Group's overall direction and strategic planning. In addition, the Chairman also plays a key role in driving all Directors to actively contribute to Board affairs and establishing good corporate governance practices and procedures.
Dr. CHAN Wing Kit, Frank, the CEO, is responsible for managing the business and affairs of the Company; recommending and implementing strategic, business and operational plans; directing and monitoring the activities of the Company; developing and implementing operational policies under the strategic directions adopted by the Board; developing and recommending organisational structure; managing shareholders and public relations and ensuring that the Board has all the information it requires to fulfill its duties.
Non-executive Directors
Currently, the term of appointment of all Independent Non-executive Directors are two years subject to retirement by rotation in accordance with the bye-laws of the Company.
The Company's bye-laws stipulate that every Director will be subject to retirement by rotation at least once every three years.
Remuneration of Directors
In regard of remuneration policy of Directors, the Company has established a Remuneration Committee with terms of reference, which meet the requirements as set out in paragraph B.1.3 of the CG Code.
The Remuneration Committee was established in 2005 and its members during the year and at present are as follows:
| Mr. CHUA Domingo |
(Chairman and Executive Director) |
| Dr. CHAN Wing Kit, Frank |
(Chief Executive Officer and Executive Director) |
| Mr. CHONG Kim Chan, Kenneth |
(Independent Non-executive Director) |
| Mr. SY Robin |
(Independent Non-executive Director) |
| Ms. SALAZAR Lourdes Apostol |
(Independent Non-executive Director) |
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Of the five members of the Remuneration Committee, three are Independent Non-executive Directors. No chairman has been formally appointed for the Remuneration Committee. However, a chairman will be appointed at the commencement of each meeting of the Remuneration Committee.
The Remuneration Committee is primarily responsible for reviewing, determining and/or recommending to the Board as to the Company's policy and structure for all remuneration of Directors and senior management and on establishment of a formal and transparent procedure for developing the policy on such remuneration, and to determine the specific remunerations packages of all Executive Directors and senior management.
During the year, members of the Remuneration Committee, pursuant to consent in writing by all members of the Remuneration Committee in accordance with its terms of reference, ratified the emoluments of the Directors of the Group for the year ended 30 June 2009.
Nomination of Directors
Currently, the Company does not have a nomination committee for appointment of new Directors to the Board. The responsibilities of identifying and selecting suitably qualified individuals to become members of the Board are undertaken by the Board collectively. Where the Board or a Director considers necessary or desirable to appoint a new member to the Board (whether to fill a casual vacancy or otherwise), each member of the Board may nominate suitable individual(s) as candidate(s) of member(s) of the Board for the decision of the Board.
In selecting a suitable candidate to become a member of the Board, the Board will consider various criteria such as education, qualification, experience, skills and possible contribution of such candidate.
During the year, no meeting was held by the Board of Directors in relation to the appointment and removal of Directors.
A Board meeting was held on 25 September 2009 to consider and approve, among others, the appointment of Mr. TAN Harry Chua as the Executive Director as addition to the Board effective on 25 September 2009, in which all Directors save for Mr. TANENGLIAN Mariano Chua attended the said Board meeting to approve such appointment. Mr. TAN Harry Chua will be subject to election at the forthcoming annual general meeting to be held on 30 October 2009.
Audit Committee
The Company has established an Audit Committee with terms of reference, which meet the requirements as set out in paragraph C.3.3 of the CG Code.
The Audit Committee was established in 1999 and its members during the year and at present are as follows:
| Mr. CHONG Kim Chan, Kenneth* |
(Independent Non-executive Director) |
| Mr. SY Robin |
(Independent Non-executive Director) |
| Ms. SALAZAR Lourdes Apostol |
(Independent Non-executive Director) |
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* Chairman of Audit Committee
The Audit Committee is primarily responsible for the following duties:
- to make recommendation to the Board on the appointment, reappointment and removal of the external auditors;
- to review and monitor the external auditors' independence and objectivity and the effectiveness of the audit process in accordance with applicable standard;
- to review and monitor integrity of financial statements of the Company and the Company's annual report and accounts, half-year report and to review significant financial reporting judgments contained in them; and
- to oversee the Company's financial reporting system and procedures of internal control.
None of the Audit Committee members is a former partner of the existing auditor of the Group.
During the year, two meetings have been held by the Audit Committee for reviewing the independence and re-appointment of the external auditor, the Company's financial reporting system and procedures of internal controls, the draft audited consolidated financial statements of the Company for the year ended 30 June 2008 and the draft unaudited consolidated financial statements of the Company for the six months ended 31 December 2008 for submission to the Board for discussion and approval in accordance with the terms of reference of the Audit Committee.
Details of attendance record of members in the meetings of Audit Committee during the year are as follows:
| Members |
Attendance |
| Mr. CHONG Kim Chan, Kenneth |
2/2 |
| Mr. SY Robin |
2/2 |
| Ms. SALAZAR Lourdes Apostol |
2/2 |
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Auditor's Remuneration
During the year ended 30 June 2009, audit and non-audit services were provided to the Group by Messrs. Deloitte Touche Tohmatsu, the auditor of the Company, and the amounts of remuneration paid in connection therewith are as follows:
| Services |
Amount
HK$'000 |
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| Audit services |
- Audit fees paid for final results for the year ended 30 June 2008 and provident funds of the Group
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964 |
| Non-audit services |
- Fees paid for reviewing of preliminary announcement of final results and continuing connected transactions for the year ended 30 June 2008
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70 |
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The Audit Committee is of the view that the auditor's independence was not affected by the provision of the abovementioned non-audit services to the Group.
The Board has not had any disagreement with the Audit Committee on the selection, re-appointment, resignation or dismissal of its external auditor.
Directors' and Auditor's Responsibility for Financial Statements
The Directors acknowledge their responsibility for preparing the consolidated financial statements of the Group and ensure that the preparation of the consolidated financial statements are on a going concern basis in accordance with statutory requirements and applicable accounting standards.
Auditor's statement of reporting responsibilities is set out in the "Independent Auditor's Report" on pages 26 to 27 to the Annual Report 2008-2009.
The Board is collectively responsible for ensuring clear and understandable assessment in annual/interim reports, price-sensitive announcement and other financial disclosures/reports under regulatory requirements. In addition, the Audit Committee has been established to monitor the integrity of financial statements of the Company.
Internal Controls
During the year, the Board and the Audit Committee have conducted and completed an internal review in respect of the effectiveness of the Group's system of internal control with the objectives of ensuring:
- high level management controls are adequately defined;
- operational controls are in place, sufficient and effective;
- income is properly received, recorded and supported;
- expenses are of proper nature and are properly approved; and
- assets are properly safeguarded.
Such reviews cover all material controls including financial, operational and compliance controls, and risk management functions. No material control failure or significant areas of concern which might affect the shareholders' interests were identified during the reviews.
Shareholders' Rights and Investor Relations
The Company is committed to ensure shareholders' interest. To this end, the Company communicates with its shareholders through various channels, including annual general meetings, special general meetings, annual reports, notices of general meetings, circulars sent to shareholders of the Company, announcements, press releases and other corporate communications available on the Company's website.
The Chairmen of the Board and Board committees attended the annual general meeting of the Company held on 19 December 2008 and the Chairmen of the Board committee attended the special general meeting of the Company held on 10 October 2008 to answer questions raised by the shareholders of the Company thereat. In respect of the year ended 30 June 2009, an annual general meeting of the Company will be held on 30 October 2009, at which the Company will arrange for the Chairmen of the Board and Board committees to attend and answer questions raised by the shareholders of the Company thereat.
The Company regards communication with its shareholders and investors as an important means to enhance the transparency of the Group and regularly collects views and feedback from them.
Shareholders, investors and the media can make enquiries or proposals to the Company through the following means:
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