Corporate Governance
Corporate Governance Overview Board of Directors & Board Committee Committee Member List of Directors & Their Roles and Functions Code of Corporate Governance & Procedures for Election of Directors Memorandum and Articles of Association Board Diversity Policy Shareholder Communication Policy

Committee Member

Purpose

The purpose of setting up the Audit Committee is to assist the board of directors of Yuzhou Group Holdings Company Limited in considering how the Board should apply financial reporting and internal control principles and for maintaining an appropriate relationship with the Company’s auditors.

Composition

The Audit Committee shall comprise a minimum of three members consisting of non- executive directors only and a majority of which must be independent non-executive directors of the Company. The Audit Committee must comprise of at least one independent non-executive director who has appropriate professional qualifications or accounting or related financial management expertise as required under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. A quorum shall be two members.

The chairman of the Audit Committee shall be appointed by the Board and must be an independent non-executive director.

Meetings

The Audit Committee shall meet at least twice annually or more frequently if circumstances require and shall act by unanimous written consent. The Board, any audit committee member and the external auditors may request a meeting if they consider that one is necessary.

The financial director of the Company, the head of internal auditor and a representative of the external auditors shall normally attend meetings. Other Board members shall also have the right of attendance. However, at least once a year the Audit Committee shall meet with the external and internal auditors without executive directors present.

The Chairman (or in his or her absence, a member designated by the Chairman) shall preside at all meetings of the Audit Committee. The Chairman shall be responsible for leading the Audit Committee, including scheduling meetings, preparing agendas and making regular reports to the Board.

The company secretary of the Company shall be the secretary of the Audit Committee.

Access

The Audit Committee shall have full access to management and may invite members of management or others to attend its meetings. The Audit Committee shall consult the chairman and/or chief executive officer of the Company about their proposals relating to financial reporting and internal control matters and the Company’s relationship with the Company’s auditors.

Reporting Procedures

The Audit Committee shall evaluate and assess the effectiveness of the Audit Committee and the adequacy of these Audit Committee Terms of Reference on an annual basis and recommend any proposed changes to the Board.

Minutes of meetings of the Audit Committee (draft and final versions) and the record of individual attendance at such meetings shall be prepared by the Company Secretary which shall be sent to all members of the Audit Committee and members of the Board as soon as practicable after the conclusion of any meeting of the Audit Committee.

Authority

The Audit Committee is authorized by the Board to investigate any activity within these terms of reference. It is authorized to seek any information it requires from any employee and all employees will be directed to co-operate with any request made by the Audit Committee.

The Audit Committee is authorized by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise at meetings of the Audit Committee if it considers this necessary.

The Audit Committee shall be provided with sufficient resources to discharge its duties.

Responsibilities and Duties

The duties of the Audit Committee shall include the following:
  • (a)
    To be primarily responsible for making recommendation to the Board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of resignation or dismissal of that auditor;
  • (b)
    To review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Audit Committee should discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences;
  • (c)
    To develop and implement policies regarding the engagement of an external auditor to supply non-audit services. For this purpose, an external auditor shall include any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party having knowledge of all relevant information would reasonably conclude as part of the audit firm nationally or internationally. The Audit Committee should report to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken;
  • (d)
    To monitor the integrity of financial statements of the Company and the Company’s annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In this regard, in reviewing the Company’s annual report and accounts, half-year report and, if prepared for publication, quarterly reports before submission to the Board, the Audit Committee should focus particularly on:
    (i) Any changes in accounting policies and practices;
    (ii) Major judgmental areas;
    (iii) Significant adjustments resulting from the audit;
    (iv) The going concern assumptions and any qualifications;
    (v) Compliance with accounting standards; and
    (vi) Compliance with the Listing Rules and other legal requirements in relation to financial reporting;
  • (e)
    In relation to paragraph (d) above: (i) members of the committee must liaise with the Company’s board of directors and senior management and the committee must meet, at least once a year, with the Company’s auditors; and (ii) the committee should consider any significant or unusual items that are, or may need to be, reflected in such reports and accounts and must give due consideration to any matters that have been raised by the Company’s staff responsible for the accounting and financial reporting function, compliance officer or auditors;
  • (f)
    To review the Company’s financial controls, internal control and risk management systems;
  • (g)
    To discuss with management the system of internal control and ensure that management has discharged its duty to have an effective internal control system including the adequacy of resources, qualifications and experience of staff of the Company’s accounting and financial reporting function, and their training programs and budget;
  • (h)
    To consider any findings of major investigations of internal control matters as delegated by the Board or on its own initiative and management’s response;
  • (i)
    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 the effectiveness of the internal audit function;
  • (j)
    To review the Group’s financial and accounting policies and practices;
  • (k)
    To review the external auditor’s management letter, any material queries raised by the auditor to management in respect of the accounting records, financial accounts or systems of control and management’s response;
  • (l)
    To ensure that the Board will provide a timely response to the issues raised in the external auditor’s management letter;
  • (m)
    To report to the Board on the matters set out in the Code on Corporate Governance Practices (Appendix 14 of the Listing Rules);
  • (n)
    To review arrangements by which employees of the Company may, in confidence, raise concerns about possible improprieties in financial reporting, internal control or other matters and to ensure that proper arrangements are in place for the fair and independent investigation of such matters and for appropriate follow-up action;
  • (o)
    To act as the key representative body for overseeing the Company’s relationship with the external auditor;
  • (p)
    To review ongoing connected transactions of the Company and ensure compliance with terms of approval by shareholders of the Company; and
  • (q)
    To consider such other matters as the Board may from time to time determine.
Terms of Reference of the Audit Committee

Purpose

The purpose of the Remuneration Committee is to assist the board of directors of Yuzhou Group Holdings Company Limited in determining the policy and structure for the remuneration of executive directors, evaluating the performance of executive directors and senior management, reviewing incentive schemes and directors’ service contracts and fixing the remuneration packages for all directors and senior management.

Composition

The Remuneration Committee shall be appointed by the Board from time to time and shall consist of not less than three directors, a majority of which shall be independent non-executive directors who shall meet and maintain the independence requirements from time to time as stipulated in the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. A quorum shall be two members. The Board shall appoint one member of the Remuneration Committee as the chairman.

Each member of the Remuneration Committee shall disclose to the Remuneration Committee:
(a) Any personal financial interest (other than as a shareholder of the Company) in any matter to be decided by the Remuneration Committee; or
(b) Any potential conflict of interest arising from a cross-directorship.

Any such member shall abstain from voting on resolutions of the Remuneration Committee in relation to which such interest exists from participating in the discussions concerning such resolutions, and shall (if so required by the Board) resign from the Remuneration Committee.

Meetings

The Remuneration Committee shall meet at least twice annually, or more frequently if circumstances require.

The Chairman (or in his or her absence, a member designated by the Chairman) shall preside at all meetings of the Remuneration Committee. The Chairman shall be responsible for leading the Remuneration Committee, including scheduling meetings, preparing agendas and making regular reports to the Board.

The company secretary of the Company shall be the secretary of the Remuneration Committee.

Access

The Remuneration Committee shall have full access to management and may invite members of management or others to attend its meetings. The Remuneration Committee shall consult the chairman and/or chief executive officer of the Company about their proposals relating to the remuneration of other executive directors.

Reporting Procedures

The Remuneration Committee shall evaluate and assess the effectiveness of the Remuneration Committee and the adequacy of these Remuneration Committee Terms of Reference on an annual basis and recommend any proposed changes to the Board.

Minutes of meetings of the Remuneration Committee and the record of individual attendance at such meetings shall be prepared by the Company Secretary which shall be sent to all members of the Board as soon as practicable after the conclusion of any meeting of the Remuneration Committee.

Authority

The Remuneration Committee is authorized by the Board to determine the remuneration payable to executive directors and members of senior management, the emolument policies and the basis for determining such emoluments. It shall ensure that no director should be involved in deciding his own remuneration.

The Remuneration Committee is authorized by the Board to obtain professional advice and assistance from internal or external legal, accounting or other advisors at the expense of the Company if necessary.

The Remuneration Committee shall be provided with sufficient resources to discharge its duties.

Responsibilities and Duties

The Remuneration Committee shall perform the following duties:
  • (a)
    To make recommendations to the Board on the Company’s policy and structure for all remuneration of directors and senior management and on the establishment of a formal and transparent procedure for developing policy on such remuneration;
  • (b)
    To have the delegated responsibility to determine the specific remuneration packages of all executive directors and senior management, including benefits in kind, pension rights and compensation payments, including any compensation payable for loss or termination of their office or appointment, and make recommendations to the Board of the remuneration of non-executive directors. The Remuneration Committee shall consider factors such as salaries paid by comparable companies, time commitment and responsibilities of the directors, employment conditions of the Company and its subsidiaries and the desirability of performance-based remuneration. The Remuneration Committee shall also ensure that the levels of remuneration should be sufficient to attract and retain the directors needed to run the Company successfully but should avoid paying more than is necessary for this purpose;
  • (c)
    To review and approve performance-based remuneration by reference to corporate goals and objectives resolved by the Board from time to time;
  • (d)
    To review and approve the compensation payable to executive directors and senior management in connection with any loss or termination of their office or appointment to ensure that such compensation is determined in accordance with relevant contractual terms and that such compensation is otherwise fair and not excessive for the Company;
  • (e)
    To review and approve compensation arrangements relating to dismissal or removal of directors for misconduct to ensure that such arrangements are determined in accordance with relevant contractual terms and that any compensation payment is otherwise reasonable and appropriate;
  • (f)
    To ensure that no director or any of his associates is involved in deciding his own remuneration; and
  • (g)
    To advise shareholders of the Company on how to vote with respect to any service contracts of directors that requires shareholders’ approval in accordance with the Listing Rules.
Terms of Reference of the Remuneration Committee

Purpose

The purpose of the Nomination Committee is to identify, screen and recommend to the board of directors appropriate candidates to serve as directors of Yuzhou Group Holdings Company Limited, to oversee the process for evaluating the performance of the Board and to develop, recommend to the Board and monitor nomination guidelines for the Company.

Composition

The Nomination Committee shall be appointed by the Board from time to time and shall consist of not less than two independent non-executive directors, each of whom shall meet the independence requirements from time to time as stipulated in the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

A majority of the members of the Nomination Committee should be independent non–executive directors. A quorum shall be two members. The Board shall appoint one member of the Nomination Committee as the chairman.

Meetings

The Nomination Committee shall meet at least once annually, or more frequently if circumstances require and shall act by unanimous written consent.

The Chairman (or in his or her absence, a member designated by the Chairman) shall preside at all meetings of the Nomination Committee. The Chairman shall be responsible for leading the Nomination Committee, including scheduling meetings, preparing agendas and making regular reports to the Board.

The company secretary of the Company shall be the secretary of the Nomination Committee.

Access

The Nomination Committee shall have full access to management and may invite members of management or others to attend its meetings. The Nomination Committee will consult the chairman and/or chief executive officer of the Company about their proposals relating to the selection and appointment of directors.

Reporting Procedures

The Nomination Committee shall evaluate and assess the effectiveness of the Committee and the adequacy of these Nomination Committee Terms of Reference on an annual basis and recommend any proposed changes to the Board.

Minutes of meetings of the Nomination Committee and the record of individual attendance at such meetings shall be prepared by the Company Secretary which shall be sent to all members of the Board as soon as practicable after the conclusion of any meeting of the Nomination Committee.

Authority

The Nomination Committee is authorized by the Board to determine the procedures, process and criteria to be adopted for purposes of selecting and recommending candidates for directorship and shall be provided with sufficient resources to discharge its duties, including but not limited to obtaining professional advice and assistance from internal or external legal, accounting or other advisors at the expense of the Company if necessary.

Responsibilities and Duties

The Nomination Committee shall perform the following duties:
  • (a)
    To review the structure, size and composition and diversity (including without limitation, gender, age, cultural and educational background, ethnicity, professional and industry experience, skills, knowledge and length of service) of the Board at least annually and to make recommendations on any proposed changes to the Board to implement the Company’s corporate strategy;
  • (b)
    To develop the criteria for identifying and assessing the qualifications of and evaluating candidates for directorship;
  • (c)
    To identify individuals who are qualified/ suitable to become a member of the Board and to select or make recommendations to the Board on the selection of individuals nominated for directorships. In identifying suitable candidates, the Nomination Committee shall consider candidates on merit and against the objective criteria, with due regard for the benefits of diversity on the Board;
  • (d)
    To review the Board Diversity Policy, as appropriate; and review the measurable objectives that the Board has set for implementing the Board Diversity Policy, and monitor the progress on achieving the objectives; and make disclosure of its review results in the Corporate Governance Report annually;
  • (e)
    To assess the independence of independent non-executive directors to determine their eligibility;
  • (f)
    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, taking into account the Company’s corporate strategy and the mix of skills, knowledge, experience and diversity needed in the future;
  • (g)
    To review and assess the adequacy of the corporate governance guidelines of the Company and to recommend any proposed changes to the Board for approval; and
  • (h)
    To do such things to enable the Nomination Committee to discharge its powers and functions conferred on it by the Board.
Terms of Reference of the Nomination Committee

Purpose

The purpose of the Sustainability Committee (the “Committee”) is to provide assistance and advice to the board of directors (the “Board”) of Yuzhou Group Holdings Company Limited (the “Company”) in monitoring the decisions and practices of management in achieving the Company’s goal to be a sustainable organization.

Composition

The Committee is a committee of the management of the Company.

The Committee shall consist of not less than three members, which shall include the chief executive officer. Other members of the Committee shall be such members of the senior management of the Company as may be selected by the chief executive officer.

The composition of the Committee shall be reviewed annually by the chief executive officer to ensure an appropriate balance and representation of expertise and experience.

The Committee comprises the chief executive officer, and the senior management who are in charge of: President’s Office, Design Management Center, Human Resources Center, Cost Management Center, Management Committee for Tender-based Procurement, Operation Management Center, Sales Management Center, Department of Branding Management, Regulations Governing Auditing and Supervision Center, and Department of Corporate Finance and Investor Relations.

The Board shall appoint one member of the Committee as the chairman (the “Chairman”).

Meetings

Meetings will be held at least twice annually, or more frequently if circumstances require.

The secretary of the Committee will be appointed by the Committee from time to time.

The secretary of the Committee shall be responsible for circulating the agenda for meetings, together with any relevant papers or reports. The secretary shall also keep minutes of the Committee meetings. Draft and final versions of minutes of the meetings shall be sent to all Committee members for their comments and records within a reasonable time after the meeting.

The Committee may invite such persons from within or outside of the Company to attend meetings as it deems appropriate.

Access

The Committee shall have full access to management and may invite members of management or others to attend its meetings. The Committee will consult the chairman of the Board and/ or the chief executive officer of the Company about their recommendations relating to the environment, health and safety and community relations.

Responsibilities and Duties

The Committee shall perform the following duties:–
  • (a)
    To review, and suggest any changes to, the Company’s strategy in respect of sustainable development (the “SD Strategy”) from time to time (including approving targets or key initiatives recommended by the working groups referred to in 12(b) below); ensure that the Company’s operations and practices are carried out in line with the SD Strategy;
  • (b)
    to review on an annual basis the management approach and performance of the Company in achieving targets or undertaking key initiatives recommended by the following six working groups which are responsible for their respective aspects of sustainable development:–
    (i) the Employee Safety and Health Working Group;
    (ii) the Anti-Corruption Management Working Group;
    (iii) the Environmental Performance Working Group;
    (iv) the Social Performance Working Group;
    (v) the Governance Performance Working Group; and
    (vi) the Sustainable Development Communication and Engagement Committee;
  • (c)
    To review any significant risks, opportunities or investments in connection with the implementation of the SD Strategy, and approve any material matters (whether financial or otherwise) arising from such review;
  • (d)
    To review and approve the annual Environmental, Social and Governance Report and any relevant ancillary public documents; and
  • (e)
    To report relevant matters of significance relating to sustainable development to the Board through its Chairman.
Terms of Reference of the Sustainability Committee