The Group has firmly established a clear set of policies to ascertain fairness in all operations and ensure that all activities are carried out in the best interest of its shareholders.
Corporate Governance Report
(Extracted from 2015 Annual Report dated 23 March 2016)
Corporate Governance Practices
The board of directors (“Board” or “Directors”) of Shun Tak Holdings Limited (the “Company”) is committed to principles of good corporate governance standards and procedures. This report addresses the status of the Company in applying the principles and complying with the code provisions in the Corporate Governance Code (the “CG Code”) as set out in Appendix 14 of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
The Company is committed to maintaining high standards of corporate governance. Since its first launch in 2011, the Company has been one of the constituent stocks of the Hang Seng Corporate Sustainability Benchmark Index, Asia’s first benchmark series to track the performance of leading companies in corporate sustainability, with focus on environmental, social and corporate governance aspects. Hong Kong Quality Assurance Agency (“HKQAA”), the project partner with Hang Seng Indexes Company Limited since 2014, recognised the Company’s sustainability achievement and awarded an “AA” grade to the Company. The Company has also been accredited the HKQAA CSR Plus Mark by HKQAA which showcases the Company’s satisfactory sustainability performance.
The Listing Rules require every listed company to report how it applies CG Code principles and confirm that it complies with such provisions, or provide an explanation if it does not. The Board periodically reviews the Company’s practices to comply with increasingly stringent requirements and to meet rising expectations of its shareholders (“Shareholders”). A corporate governance policy outlining the Company’s corporate governance framework and practices was first adopted by the Board in 2012.
The Board is of the opinion that the Company has complied with CG Code principles and its provisions throughout the year ended 31 December 2015, except for:
Code provision E.1.2 which requires the chairman of the Board to attend the annual general meeting (“AGM”). The Group Executive Chairman was absent from the Company’s AGM on 19 June 2015 (“2015 AGM”). The Managing Director (also Chairman of the executive committee), the Deputy Managing Director and other Directors, together with the chairmen and members of the audit committee (“Audit Committee”), nomination committee (“Nomination Committee”), remuneration committee (“Remuneration Committee”) and executive committee (“Executive Committee”), were available during the meeting to answer Shareholders’ questions regarding activities of the Company and its Board committees (the “Board Committee”); and
Code provision A.5.1 which requires the nomination committee to comprise a majority of Independent Non-Executive Directors (“INED”). Late Sir Rogerio Hyndman Lobo had been an INED, chairman of the Remuneration Committee and member of the Audit Committee and Nomination Committee. He passed away on 18 April 2015. As a result, the Company was non-compliant until it appointed another INED in his place.
Following appointment of Mr. Michael Ng (an INED), effective 25 August 2015, as Chairman of the Remuneration Committee and member of the Nomination Committee, the Company was in compliance with the code provision A.5.1. The Company also complied with Rule 3.25 of the Listing Rules which requires the Remuneration Committee to comprise a majority of INEDs.
The Company also became non-compliant with Rule 3.10A of the Listing Rules which requires the Company to appoint INEDs representing at least one-third of the Board after 18 April 2015 when Sir Rogerio Hyndman Lobo passed away. When Mr. Kevin Yip was appointed as an INED effective 16 October 2015, the Company became compliant.
Model Code for Securities Transactions
Code provision A.6.4 requires directors to comply with the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules (the “Model Code”).
The Model Code was adopted by the Company as its own code of conduct for Directors’ securities transactions. All Directors expressly confirmed they had fully complied with this Code during the year ended 31 December 2015, except that the private investment office of Ms. Pansy Ho acquired 1,366,000 shares of the Company on 24 August 2015 which was within the black-out period for the Company’s 2015 interim results (which ran from 26 July 2015 to 25 August 2015). This oversight was noted and reported immediately by the Company to the Stock Exchange. The Company has reinforced to Ms. Pansy Ho’s private investment office the importance of compliance with the relevant rules and has further enhanced its internal processes on Directors’ dealings in the Company’s securities.
The key principles of good governance require the Company to have an effective Board which is collectively responsible for its success, setting the Company’s values and enhancing Shareholders’ value. Non-Executive Directors have particular responsibility to oversee the Company’s development, scrutinise its management performance, and advise on critical business issues. The Board is satisfied that it has met these requirements.
The Company has a balanced Board of Executive and Non-Executive Directors so that no individual or small group can dominate its decision-making process. To help the Board to discharge its duties and make decisions on particular aspects of the Company’s affairs, Board Committees, including Remuneration Committee, Nomination Committee, Executive Committee and Audit Committee, have been established under the Company’s Articles of Association (“Articles”). Other Board Committees may be formed from time to time. Further details about Board Committees are discussed in later part of this report.
Changes in members of the Board and Board Committees during the year ended 31 December 2015 and up to the date of this report are set out below:
Sir Rogerio Hyndman Lobo, an INED, chairman of the Remuneration Committee and member of the Audit and Nomination Committees, passed away on 18 April 2015;
Dato’ Dr. Cheng Yu Tung retired as Non-Executive Director with effect from the conclusion of the 2015 AGM on 19 June 2015;
Mr. Michael Ng was appointed as member and chairman of the Remuneration Committee, and member of the Nomination Committee, effective 25 August 2015; and
Mr. Kevin Yip was appointed as an INED with effect 16 October 2015.
As at the date of this report, the Board has 11 members composed as follows:-
Executive Directors (representing 54.55% of the total number of Directors)
Dr. Stanley Ho (Chairman)
Ms. Pansy Ho (Managing Director)
Ms. Daisy Ho (Deputy Managing Director)
Ms. Maisy Ho
Mr. David Shum
Mr. Rogier Verhoeven
Non-Executive Director (representing 9.09% of the total number of Directors)
Mrs. Louise Mok
Independent Non-Executive Directors (representing 36.36% of the total number of Directors)
Mr. Charles Ho
Mr. Norman Ho
Mr. Michael Ng
Mr. Kevin Yip
Brief biographies of Directors and relationship amongst them are set out in “Management Profile” in this annual report.
The Company has four INEDs representing more than one-third of the Board, of which two possess professional accounting qualifications. The Company received a confirmation from each of the INEDs confirming independence under Rule 3.13 of the Listing Rules. The Nomination Committee is of the view that all INEDs are independent under the Listing Rules criteria.
The roles of the Chairman and the Managing Director are separate. Dr. Stanley Ho is Chairman and mainly responsible for Board leadership; Ms. Pansy Ho, Managing Director, is responsible for overall performance of the Company and its subsidiaries (the “Group”).
The Board is responsible for overseeing the Company’s strategic development, setting appropriate policies to manage risks in pursuit of the Company’s strategic objectives, and scrutinising operational and financial performance.
Management is delegated by the Board and is principally responsible for the Group’s day-to-day operations. The Managing Director and Deputy Managing Director, working with other Executive Directors and executive management team, are responsible for managing the Group’s business; formulating policies for Board consideration; carrying out strategies adopted by the Board; making recommendations on strategic planning, operating plans, major projects and business proposals; and assuming full accountability to the Board for the Group’s operations. The Executive Directors conduct regular meetings with the management of the Group and associated companies during which operational issues and financial performance are reviewed. The Executive Directors regularly report back to the Board or on an ad hoc basis.
The Board adopted in 2013 a board diversity policy (the “Board Diversity Policy”) which sets out the approach to achieve a diverse Board in order to enhance performance quality. “Diversity” would be considered from various aspects, including gender, age, cultural and educational background, professional experience, skills, knowledge and length of service etc. Board appointments are based on meritocracy and candidates will be assessed against objective criteria, having due regard for the benefits of diversity. The Nomination Committee will monitor the implementation of the Board Diversity Policy and, for the purpose of ensuring its effectiveness, the Nomination Committee will review this Board Diversity Policy and recommend any revisions to the Board for consideration and approval, when necessary.
Board diversity is shown below. Directors’ biographical details are set out in “Management Profile” in this annual report.
|Designation||Length of service|
To ensure that the Board works effectively and discharges its responsibilities, its members are provided with monthly updates on Company’s performance, financial position and prospects. Directors have full and timely access to relevant information and are properly briefed on issues considered at Board meetings. The duty of preparing the meeting agenda is delegated to the company secretary (the “Company Secretary”). Each Director may request inclusion of items on the agenda.
To make informed decisions, Directors are given information packages analysing and explaining agenda items not less than three days before a meeting. The Company Secretary keeps Directors informed of corporate governance issues and regulatory changes and ensures that Board procedures follow the CG Code and relevant legal requirements. The Board is provided with sufficient resources to discharge its duties and, if required, an individual Director may engage independent professional advisers at the Company’s expenses to provide advice on specific matters.
If a Director has a conflict of interest in any matter under Board consideration, such matter will be dealt with by a physical Board meeting instead of written resolution. Such Director shall abstain from voting, and not be counted in the quorum, for any resolution in which he or she has a material interest.
An open atmosphere exists for Directors to contribute alternative views at meetings and major decisions are taken after full discussion. Minutes of Board and Board Committee meetings are recorded in detail with draft minutes circulated for comment before approval by Directors and Board Committee members, respectively. Minutes and written resolutions of the Board and Board Committees are kept by the Company Secretary and open for inspection by Directors. Such minutes and written resolutions are circulated to Directors at regular Board meetings.
The Company has appropriate directors’ and officers’ liability insurance for legal action against Directors.
Appointments and Re-election of Directors
All Non-Executive Directors (including INEDs) are appointed for a specific term of three years. Under the Articles, every Director, including those appointed for a specific term, is subject to retirement by rotation at least once every three years at the Company’s AGM. Any Director appointed by the Board is subject to re-election by Shareholders at the next AGM following his or her appointment. Directors who are subject to retirement and re-election at the forthcoming AGM are set out in “Report of the Directors” in this annual report.
Directors’ Induction, Business Development and Training
Each newly-appointed Director is offered training on the Company’s key areas of business operations and practices. Newly-appointed Directors are offered orientation materials that set out the duties and responsibilities of directors under the Listing Rules and relevant ordinances and regulations. Directors are provided with “A Guide on Directors’ Duties” issued by the Hong Kong Companies Registry and “Guidelines for Directors” issued by Hong Kong Institute of Directors (“HKIoD”) which set out the general principles of directors’ duties. All INEDs are given “Guide for Independent Non-Executive Directors” issued by HKIoD.
The Company encourages Directors to participate in continuing professional training and development courses to enhance their relevant knowledge and skills. The Company also updates Directors on the latest development of Listing Rules and applicable laws and regulations to facilitate awareness and ensure compliance. The Executive Committee is responsible for reviewing training and continuous professional developments of Directors and senior management. During the year, the Company provided materials on updates of laws and regulations and organised a training session on new CG Code requirements for risk management and internal controls.
According to training records provided by Directors, a summary of their training during the year is shown below:
|Directors||Type of Trainings|
|Group Executive Chairman|
|Dr. Stanley Ho||A|
|Mrs. Louise Mok||A|
|Independent Non-Executive Directors|
|Mr. Norman Ho||A, B, C|
|Mr. Charles Ho||A|
|Mr. Michael Ng||A|
|Mr. Kevin Yip||A, C|
|Ms. Pansy Ho||A, B, C|
|Deputy Managing Director|
|Ms. Daisy Ho||A, C|
|Ms. Maisy Ho||A, C|
|Mr. David Shum||A, B, C|
|Mr. Rogier Verhoeven||A|
|A:||Reading materials and/or attending training session provided/organised by the Company in relation to updates of Listing Rules, latest development of the rules, regulations and corporate governance|
|B:||Reading materials and/or attending training sessions provided/organised by other corporations relating to rules and regulations, economy, general business and corporate governance|
|C:||Attending seminar and/or conference and/or forum|
Board and Board Committee Meetings
Regular Board meetings are held at least four times every year at approximately quarterly intervals. Additional Board meetings are held if required. During the year ended 31 December 2015, five Board meetings were held.
Attendance by Directors at meetings of the Board, Audit Committee, Remuneration Committee, Nomination Committee and Annual General Meeting during the year is shown below:
|Name of Director||Board||
|Remuneration Committee||Nomination Committee||
Annual General Meeting
|(Number of Meetings Attended/Entitled to Attend)|
|Group Executive Chairman|
|Dr. Stanley Ho||1/5||n/a||n/a||n/a||0/1|
|Dato’ Dr. Cheng Yu Tung(Note 1)||0/2||n/a||n/a||n/a||0/1|
|Mrs. Louise Mok||5/5||2/2||n/a||n/a||1/1|
|Independent Non-Executive Directors|
|Sir Rogerio Hyndman Lobo(Note 2)||0/1||0/1||n/a||0/1||n/a|
|Mr. Norman Ho||4/5||2/2||1/1||2/2||1/1|
|Mr. Charles Ho||5/5||n/a||1/1||2/2||0/1|
|Mr. Michael Ng(Note 3)||3/5||2/2||1/1||1/1||1/1|
|Mr. Kevin Yip(Note 4)||2/2||n/a||n/a||n/a||n/a|
|Ms. Pansy Ho||5/5||n/a||1/1||2/2||1/1|
|Deputy Managing Director|
|Ms. Daisy Ho||5/5||n/a||1/1||2/2||1/1|
|Ms. Maisy Ho||5/5||n/a||n/a||n/a||1/1|
|Mr. David Shum||4/5||n/a||n/a||n/a||1/1|
|Mr. Rogier Verhoeven||5/5||n/a||n/a||n/a||1/1|
|Note 1:||Dato’ Dr. Cheng Yu Tung was unable to attend meetings due to health reason. He retired as a Non-Executive Director with effect from the conclusion of the 2015 AGM held on 19 June 2015.|
|Note 2:||Sir Rogerio Hyndman Lobo was unable to attend meetings due to health reason and passed away on 18 April 2015.|
|Note 3:||Mr. Michael Ng was appointed as a member and the chairman of the Remuneration Committee; and a member of the Nomination Committee, all with effect from 25 August 2015.|
|Note 4:||Mr. Kevin Yip was appointed as an Independent Non-Executive Director with effect from 16 October 2015.|
|Note 5:||Representatives of the external auditor participated in every Audit Committee Meeting and Annual General Meeting.|
Each of the Remuneration Committee, Nomination Committee, Executive Committee and Audit Committee has defined duties and responsibilities set out in its terms of reference which are no less exacting than those in the CG Code. Such terms will be regularly reviewed and updated in response to regulatory changes or Board direction. Other Board Committees for approving particular transaction, when formed, are delegated with specific duties and authorities by the Board. All Board Committees are provided with sufficient resources to discharge their duties.
The Remuneration Committee consists of five members, namely, Mr. Norman Ho, Mr. Charles Ho and Mr. Michael Ng (all being INEDs), Ms. Pansy Ho (Managing Director) and Ms. Daisy Ho (Deputy Managing Director). Mr. Michael Ng is the chairman of the Remuneration Committee.
The principal role of the Remuneration Committee is to set the Company’s remuneration and incentive policy as a whole, and review and approve remuneration proposals for Executive Directors and senior management. The emoluments of the Directors, including basic salary and performance bonus, are based on each Director’s skills, knowledge and involvement in the Company’s affairs, the Company’s performance and profitability, remuneration benchmark in the industry and prevailing market conditions. No Director has taken part in setting his or her own remuneration.
According to its terms of reference (a copy of which is posted on the websites of the Company and the Stock Exchange), the Remuneration Committee shall meet at least once a year. Additional meetings may be held as required. Decisions may also be made by circulation of written resolutions accompanied by explanatory materials. During the year ended 31 December 2015, one Remuneration Committee meeting was held whereby it (i) reviewed and recommended to the Board (for INEDs) and approved (for Executive Directors, senior management and staff) their respective remuneration packages; and (ii) reviewed and recommended to the Board a draft remuneration policy (the “Remuneration Policy”) for the Board’s consideration and approval.
The Company has adopted the Remuneration Policy which establishes a formal and transparent procedure for determining remuneration of Directors and senior management. To achieve the Company’s corporate goals and objectives, packages offered by the Group are competitive, adequate (but not excessive), in line with current market practices and able to attract, retain, motivate and reward Directors and senior management. To ensure the policy is effective, the Remuneration Committee will review the policy and recommend revisions to the Board when necessary.
Directors’ interests in the Company’s shares, underlying shares and debentures, along with interests in contracts, are set out in “Report of the Directors”. Directors’ emoluments are set out in “Notes to the Financial Statements” in this annual report.
The Nomination Committee consists of five members, namely, Mr. Norman Ho, Mr. Charles Ho and Mr. Michael Ng (all being INEDs), Ms. Pansy Ho (Managing Director) and Ms. Daisy Ho (Deputy Managing Director). Mr. Charles Ho is the chairman of the Nomination Committee.
The Nomination Committee is responsible for (i) formulating policy and making recommendations to the Board on nomination and appointment of Directors and the Board’s succession planning; and (ii) monitoring the implementation of the Board Diversity Policy and reviewing the same and recommending any revision to the Board for consideration. The Nomination Committee develops selection procedures for candidates and will consider different criteria including appropriate professional knowledge, industry experience, and the standards set forth in Rules 3.08 and 3.09 of the Listing Rules. It reviews the structure, size and composition of the Board annually to ensure that it has balanced skills and expertise to provide effective leadership to the Company. It assesses the independence of INEDs under the criteria in Rule 3.13 of the Listing Rules.
According to its terms of reference (a copy of which is posted on the websites of the Company and the Stock Exchange), the Nomination Committee shall meet as required by its work. Decision may also be made by circulation of written resolutions accompanied by explanatory materials. During the year ended 31 December 2015, two Nomination Committee meetings were held at which the Nomination Committee had (i) reviewed the structure, size, composition and diversity of the Board; the Board Diversity Policy; the Directors’ involvement in the Company’s affair; and the independence of Independent Non-Executive Directors; and made recommendations to the Board for putting forward Directors, who were subject to retirement by rotation, for re-appointment at 2015 AGM; and (ii) recommended to the Board for approval of the appointment of Mr. Kevin Yip as an INED to fill the vacancy occasioned by the passing away of Sir Rogerio Hyndman Lobo on 18 April 2015.
The Executive Committee consists of five members, namely, Ms. Pansy Ho (Managing Director), Ms. Daisy Ho (Deputy Managing Director) and Ms. Maisy Ho, Mr. David Shum and Mr. Rogier Verhoeven. Ms. Pansy Ho is the chairman of the Executive Committee. The duties and responsibilities of the Executive Committee are set out in its terms of reference. Meetings are held as required by its work.
For more efficient operation of the Board, the Executive Committee was established to make recommendations on the strategic aims, objectives and priorities of the Company and to consider and approve matters relating to the Group’s day-to-day operations.
The Executive Committee was delegated by the Board to perform corporate governance functions set out in Code Provision D.3.1 including (i) developing and reviewing the Company’s policies and practices on corporate governance and making recommendations to the Board; (ii) reviewing and monitoring training and professional development of Directors and senior management; (iii) reviewing and monitoring the Company’s policies and practices on compliance with legal and regulatory requirements; (iv) developing, reviewing and monitoring the code of conduct and compliance manual applicable to employees and Directors; and (v) reviewing compliance with the Code and disclosure in the corporate governance report. As at the date of this report, the Executive Committee has reviewed (a) the Company’s compliance with the CG Code and its disclosure in this report and (b) Directors’ training records.
In light of the CG Code amendments, effective 1 January 2016, incorporating risk management in the CG Code, the Executive Committee was delegated by the Board to (i) assist the Board in evaluating and determining the nature and extent of risks the Board is willing to take to achieve the Group’s strategic objectives; and (ii) oversee management in the design, implementation and ongoing monitoring of risk management and internal control systems and to ensure their appropriateness and effectiveness.
To oversee the Group’s strategies and development of corporate sustainability, the Executive Committee was delegated by the Board to establish a sustainability steering committee (the “Sustainability Steering Committee”). After its establishment, the Sustainability Steering Committee prepared a sustainability policy on the Company’s commitment to environmental, social and governance aspects for sustainable business growth and development. The policy was adopted by the Executive Committee in 2014 and the Company published its first sustainability report in June 2015.
The Company adopted a policy and procedure on disclosure of inside information (the “Inside Information Policy”) setting out the Group’s procedure in handling such information to ensure its equal and timely dissemination to comply with the requirements under Part XIVA of the Securities and Futures Ordinance and the Listing Rules in March 2015. The Executive Committee was delegated by the Board to monitor the Inside Information Policy and assess the nature and materiality of relevant information and determine the appropriate actions. In addition, an Inside Information Taskforce has been set up to assist the Executive Committee on disclosure matters. The Group will provide appropriate training to officers and employees likely to be in possession of inside information.
The Audit Committee consists of three members, namely, Mr. Norman Ho and Mr. Michael Ng (both being INEDs) and Mrs. Louise Mok (Non-Executive Director). Mr. Norman Ho is the chairman of the Audit Committee. The Board is satisfied that the Audit Committee members collectively possess adequate financial experience to properly discharge its duties and responsibilities. Mr. Norman Ho and Mr. Michael Ng have professional accounting qualifications required by Rule 3.10(2) of the Listing Rules, details of which are set out in their biographies in “Management Profile” in this annual report.
The Audit Committee’s primary responsibilities include reviewing the Company’s financial reports, risk management and internal control systems, and effectiveness and objectivity of the audit process.
According to its terms of reference (a copy of which is posted on the websites of the Company and the Stock Exchange), the Audit Committee shall meet at least twice a year. Decision may be made by circulating written resolutions accompanied by explanatory materials. During the year ended 31 December 2015, two Audit Committee meetings were held to review (i) the Company’s interim and year-end financial reports, particularly judgemental areas before submission to the Board; (ii) the internal audit programme (including findings and management’s responses); and (iii) PricewaterhouseCoopers' (“PwC”) confirmation of independence, its report for the Audit Committee and management’s letter of representation; and recommended the re-appointment of Company’s external auditor. The Audit Committee also reviewed and approved PwC’s annual audit and non-audit services fees for the year ended 31 December 2014, its terms of engagement as the Company’s external auditor for the year ended 31 December 2015, and its further engagement to (a) review the Company’s preliminary results announcement for the year ended 31 December 2015; and (b) report on continuing connected transactions as disclosed in this annual report. As at the date of this report, the Audit Committee also considered the annual audit and non-audit services fees for year ended 31 December 2015, and recommended the re-appointment of PwC (the retiring auditor at the forthcoming AGM) as the Company’s external auditor.
The Group’s whistleblowing policy was adopted by the Board in December 2011. With its introduction, employees are provided with a channel and guideline to report serious misconduct, malpractice or impropriety concerns internally without fear of reprisal. The Audit Committee was delegated with the overall responsibility for monitoring and reviewing the effectiveness of the Whistleblowing Policy.
For the year ended 31 December 2015, the fees paid/payable by the Group to its external auditors in respect of audit and non-audit services provided by them amounted to approximately HK$9.7 million and HK$4.9 million respectively. The non-audit services mainly included interim review, taxation and other related services.
Accountability and Audit
The Directors acknowledge their responsibility for preparing for each financial year financial statements which give a true and fair view of the state of affairs of the Company and the Group; and the Group’s profit and cash flow in accordance with Hong Kong Financial Reporting Standards, the Hong Kong Companies Ordinance and the Listing Rules. In preparing financial statements for the year ended 31 December 2015, the Directors have selected suitable accounting policies and applied them consistently. The Directors also made judgements and estimates that are prudent and reasonable and prepared the financial statements on a going concern basis. The Company announced its interim and annual results in a timely manner following the relevant periods as required by the Listing Rules.
The statement from the Company’s external auditor about the auditor’s reporting responsibilities on the Company’s financial statements is set out in “Independent Auditor’s Report” in this annual report.
Internal Control and Risk Management
The Board is responsible for ensuring the establishment of effective internal controls and risk management systems to safeguard the interests of stakeholders. These systems have been designed to ensure (i) effectiveness and efficiency of operations; (ii) proper identification and management of risks relating to the achievement of objectives; (iii) safeguarding of Group assets from misappropriation; (iv) proper maintenance of accounting records to provide reliable financial information; and (v) compliance with relevant legislation and regulations. Such systems are aimed at mitigating risks faced by the Group to an acceptable level, but not eliminating all risks. Hence, such systems can only provide reasonable but not absolute assurance that there will not be any material misstatement in the financial information and there will not be any financial loss or fraud.
The key procedures established by the Board to provide effective risk management and internal controls include (i) setting core values and beliefs which form the basis of the Group’s overall risk philosophy and appetite; (ii) defining a management structure with clear lines of responsibility and authority limits which hold individuals accountable for their risk management and internal control responsibilities; (iii) imposing an organisational structure which provides necessary information flow for risk analysis and management decision-making; (iv) imposing budgetary and management accounting controls to efficiently allocate resources and providing timely financial and operational performance indicators to manage business activities and risks; (v) ensuring effective financial reporting control to record complete, accurate and timely accounting and management information; and (vi) assuring through the Audit Committee that appropriate risk management and internal control procedures are in place and functioning effectively.
Through the Audit Committee, the Board continues to review the effectiveness of risk management and internal control systems which include financial, operational, compliance, risk identification and assessment and risk response implementation controls. This process consists of (i) assessing such systems by the Group Internal Audit Department (“GIAD”); (ii) operational management’s assurance of their maintenance of effective risk management systems and internal controls; and (iii) identifying control issues by the external auditor during statutory audit. The Audit Committee, supported by GIAD, reviews the adequacy of resources, qualifications, experiences and training requirements of staff responsible for accounting, financial reporting, treasury, financial analysis and internal audit functions.
The GIAD reports to the Audit Committee and has unrestricted access to the Group’s records and personnel. To ensure systematic coverage of all auditable areas and effective deployment of resources, a four-year strategic audit plan adopting a risk ranking methodology has been formulated. This strategic plan, revised annually to reflect organisational changes and new business development, is submitted for the Audit Committee’s approval. Ad hoc reviews will also be conducted for areas of concern identified by the Audit Committee and the management.
The GIAD reviews risk management and internal controls by (i) evaluating the control environment and risk identification and assessment processes; (ii) assessing the adequacy of risk response measures and internal controls; and (iii) testing the implementation of such measures and the functioning of key controls through audit sampling. During each audit, staff qualifications and experience as well as manpower plans and training budgets are reviewed to ensure sufficient competent staff to maintain effective risk management and internal control systems. In addition, management of key processes is required to review control framework with reference to the integrated framework of internal control recommended by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) and to confirm such systems are functioning as intended. An audit report incorporating control deficiencies and management’s rectification plans is issued for each internal audit.
The GIAD reports quarterly to the Audit Committee on the results of its assessment of risk management and internal control systems and status of implementation of follow-up actions on control deficiencies. In addition, the head of GIAD attends Audit Committee meetings twice a year to report its progress in achieving the strategic audit plan and to give a summary of the results of audit activities during the period.
For the year under review, the Board considers that the risk management and internal control systems of the Group are adequate and effective and the Company has complied with the relevant code provisions in the CG Code on internal control.
Proactive Investor Relations
The Company aims to maintain an ongoing dialogue and communication with its Shareholders. It is the Board’s responsibility to ensure satisfactory dialogue takes place. The Board adopted a shareholder communication policy setting out the Company’s principles in relation to Shareholders’ communication, with the objective to ensure direct, open and timely communications. The primary channel between the Company and Shareholders is the publication of interim reports, annual reports, circulars and notices to Shareholders. The Company’s share registrar, Computershare Hong Kong Investor Services Limited (the “Share Registrar”), serves Shareholders on all share registration matters. General meetings further provide the forum and opportunity for Shareholders to exchange views directly with the Board members.
The Company continues its proactive policy to promote investor relations by regular meetings with institutional Shareholders and research analysts. Our Investor Relations Department maintains open communications with the investment community. To ensure investors have an informed understanding of the Company’s strategies, operations and management, our management engages in proactive investor relation activities. These include participating in regular one-on-one meetings, investor conferences and international non-deal roadshows.
The Company maintains a corporate website (www.shuntakgroup.com) which provides Shareholders, investors and the public with updated information on the Group’s activities and development. Corporate information on the Group’s businesses is distributed by email to the registered mailing list which can be joined by interested parties on the Company’s website. The Company Secretary and the Investor Relations Department serve as the major channels of communication between Directors, Shareholders, investors and the public. The public is encouraged to contact the Group as appropriate.
Shareholders may at any time send their enquiries to the Board, addressed to the Company Secretarial Department or Investor Relations Department with contact details set out below:
Penthouse 39th Floor, West Tower, Shun Tak Centre
200 Connaught Road Central
|Telephone||:||(852) 2859 3111|
|Facsimile||:||(852) 2857 7181|
In relation to enquiries on the shareholding matters of the Company, Shareholders could send enquiries to the Share Registrar with their contact details set out below:
Shops 1712-1716, 17th Floor, Hopewell Centre
183 Queen’s Road East
Wanchai, Hong Kong
|Telephone||:||(852) 2862 8555|
|Facsimile||:||(852) 2865 0990|
2015 Annual General Meeting
The notice of the 2015 AGM setting out details of each proposed resolution and other relevant information as set out in the circular were distributed to all Shareholders more than 20 clear business days before the date of the 2015 AGM. Separate resolutions were proposed on each substantially separate issue, including re-election of individual Directors. In strict compliance with Rule 13.39(4) of the Listing Rules, the Company’s Articles stated that all resolutions proposed in a general meeting will be decided on poll except for procedural or administrative matters. The Share Registrar was appointed as scrutineer for vote-taking at the 2015 AGM. Procedures for conducting a poll were explained by the Share Registrar before commencement of poll voting at the 2015 AGM.
The 2015 AGM was held at Grand Ballroom, Lower Lobby, Conrad Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Friday, 19 June 2015 at 3:00 p.m. at which all resolutions were duly passed including (i) receipt of the audited financial statements of the Company for the year ended 31 December 2014 and the reports of Directors and the independent auditor; (ii) declaration of 2014 final dividend and special dividend; (iii) re-election of Mr. Michael Ng, Mrs. Louise Mok, Ms. Maisy Ho and Mr. Rogier Verhoeven as Directors of the Company; (iv) approval of the directors’ fees and authorisation to the Board to fix other directors’ remuneration; (v) re-appointment of PwC as auditor of the Company and authorisation to the Board to fix its remuneration; (vi) granting of the general mandate to the Board to repurchase the Company’s shares; (vii) granting of the general mandate to the Board to issue new shares of the Company; (viii) authorisation to the Board to extend the general mandate to issue new shares by adding the number of shares repurchased; and (ix) adoption of new Articles (the “New Articles”) of the Company.
The poll results were posted on the websites of the Company and the Stock Exchange in accordance with the Listing Rules as soon as after the closure of the 2015 AGM.
Procedures for Shareholders to Convene a General Meeting
In accordance with section 566 of the Hong Kong Companies Ordinance (Chapter 622) (the “Ordinance”), Shareholders representing at least 5% of the total voting rights of all Shareholders having a right to vote at general meetings can make a requisition to convene a general meeting. The requisition must state the objects of the meeting, and must be signed by the Shareholders concerned and deposited at the registered office of the Company for the attention of the Company Secretary. The requisition must also (a) state the name(s) of the requisitionist(s), (b) the contact details of the requisitionist(s) and (c) the number of ordinary shares of the Company held by the requisitionist(s).
Procedures for Shareholders to Put Forward Proposals at General Meeting
According to the Ordinance, Shareholder(s) representing at least 2.5% of the total voting rights of all Shareholders who have a relevant right to vote; or at least 50 Shareholders who have a relevant right to vote can submit a written request to move a resolution at the general meeting of the Company. The written request must state the resolution, accompanied by a statement of not more than 1,000 words with respect to the matter referred to in the proposed resolution, signed by the relevant Shareholder(s) and deposited at the registered office of the Company.
The Company Secretary is a full-time employee of the Company and has day-to-day knowledge of the Company’s affairs. The Company Secretary is responsible for advising the Board on governance matters. For the year under review, the Company Secretary has taken no less than 15 hours of relevant professional training.
During the year ended 31 December 2015, the Company adopted the New Articles. Major changes to the Articles include (i) amendments to reflect changes in laws, rules and regulations (such as references made obsolete by the Ordinance which came into effect on 3 March 2014); (ii) provision of increased flexibility for the Company and Shareholders; and (iii) up-date of the Articles. Adoption of the New Articles was approved by Shareholders at the 2015 AGM. A copy of the New Articles is available on the websites of the Company and the Stock Exchange.
The Company will continue to review its corporate governance practices on a timely basis and take necessary and appropriate actions to ensure compliance with the required practices and standards including code provisions in the CG Code.
Procedures For Shareholders To Propose A Person For Election As Director
Subject to the provisions under the Companies Ordinance (Cap. 622), the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the Articles of Association of the Company (the “Articles”), shareholders of the Company shall have rights to propose a person for election as a director of the Company (the “Election”) at an annual general meeting (“AGM”), provided that the total number of directors shall not exceed the maximum number fixed by or in accordance with the Articles.
Shareholder who wishes to propose a person other than a retiring director of the Company for election as a director at the AGM should deposit a written notice to that effect at the registered office (address shown below) of the Company for the attention of the Company Secretary.
Penthouse 39th Floor, West Tower, Shun Tak Centre
200 Connaught Road Central, Hong Kong
The written notice signed by the shareholder (not being the person to be proposed) qualified to attend and vote at the AGM should include the following information:
(a)the full name and address of the person proposed for election;
(b)personal biographical details of such nominated candidate as required by Rule 13.51(2) of the Listing Rules; and
(c)a written consent signed by the nominated candidate indicating his/her willingness to be elected as director.
The written notice must be lodged with the Company at its registered office during a 7-day period commencing from the day after the despatch of the notice of AGM appointed for such election (or such other period, being a period of at least 7 days commencing no earlier than the date after the despatch of the notice of AGM and ending no later than 7 days prior to the date of AGM, as may from time to time be determined by the Board and notified to the shareholders). If the written notice is lodged less than 15 business days prior to the date of the AGM, the Company will need to consider the adjournment of the AGM in order to allow shareholders 10 business days notice (or such notice period under the applicable rules and regulations) of the proposal.
Upon receipt of the signed written notice and due verifications on information provided, the Company shall provide information to shareholders regarding the proposal as soon as practicable, without prejudice to any applicable rules and regulations as effective from time to time.