- TTI Annual Report 2011 - http://www.ttigroup.com/onlinereport/ar2011 -
Corporate Governance Report
Posted By admin On March 27, 2011 @ 6:11 am In | Comments Disabled
The Company is committed to a high standard of corporate governance and investor relations with a view to assuring the conduct of management of the Company as well as enhancing the interests of all shareholders. The corporate governance principles of the Company emphasize a quality Board for leadership and control of the Company, effective internal controls, transparency and accountability to all shareholders.
The Company has complied with all the code provisions of the Code on Corporate Governance Practices set out in Appendix 14 of the Listing Rules (the “Code”) throughout the year ended December 31, 2011, except none of the Directors are appointed for a specific term since they are subject to retirement by rotation and re-election in accordance with the Articles of Association of the Company. Under Article 103 of the Articles of Association of the Company, one-third of the Board must retire by rotation at each general meeting of the Company and if eligible, offer themselves for re-election.
Apart from compliance of the code provisions set out in the Code, the Company also voluntarily complied with the recommended best practices set out in the Code in order to achieve and maintain high standard of corporate governance and strike for the best interests of the Company and shareholders as a whole.
Roles and ResponsibilitiesThe board of directors (the “Board”) assumes responsibility for leadership and control of, and for promoting the success of, the Company by directing and supervising the Group affairs. Principal responsibilities of the Board including, but are not limited to, the following:-
Written procedures have been formally adopted in order to govern the delegation of daily management responsibilities to the senior management of the Group and the reservation to the Board of specifically identified matters. The written procedures are reviewed by the Board regularly.
As at the date of this report, the Board consists of five Group Executive Directors, two Non-executive Directors and four Independent Non-executive Directors. The list of Directors and their role and function are published on the Company’s website (www.ttigroup.com ) and the Stock Exchange’s website (www.hkexnews.hk ) . The composition of the Board of the Company is as follows:-
Group Executive DirectorsMr Horst Julius Pudwill (Chairman)
Mr Joseph Galli Jr (Chief Executive Officer)
Mr Kin Wah Chan (Operations Director)
Mr Chi Chung Chan (Group Chief Financial Officer)
Mr Stephan Horst Pudwill (President of Strategic Planning)
Non-executive DirectorsProf Roy Chi Ping Chung BBS JP(1)
Mr Vincent Ting Kau Cheung
Independent Non-executive DirectorsMr Joel Arthur Schleicher
Mr Christopher Patrick Langley OBE
Mr Manfred Kuhlmann
Mr Peter David Sullivan
The roles of Chairman and Chief Executive Officer of the Company have been segregated and clearly distinguished.
The roles of Chairman comprises, but are not limited to, the following:
The role of Chief Executive Officer comprises, but is not limited to, the following:
Every Director is aware that, before accepting appointment as a director, he must be able to contribute sufficient time and attention to the affairs of the Company. Orientation which details the duties and responsibilities of directors under the Listing Rules, the Company’s Articles of Association, related ordinances and relevant regulatory requirements of Hong Kong is provided for every newly appointed director. Presentations are, as necessary, given by senior executives of the Company and external professionals. Regular training and updates are offered to Directors as necessary to ensure that Directors are aware of the latest changes in the commercial and regulatory environment in which the Company conducts its business. Appropriate Directors’ and Officers’ liability insurance cover has also been arranged to indemnify the Directors and Officers of the Group for liabilities arising out of corporate activities. The coverage and the sum insured under the policy are reviewed annually. All above-mentioned arrangements aim to assist the relevant Director to discharge his duties to the Company and protect the interests of the Company and the shareholders.
All Directors are subject to retirement by rotation at least once every three years in accordance with the Company’s Articles of Association and the Listing Rules. Any Directors appointed to fill a casual vacancy would be subject to election by shareholders at the first general meeting after their appointment. The biographical details and relevant relationships are set out on pages 28 to 31 of this annual report. As at the date of this report, Independent Non-executive Directors and Non-executive Directors form the majority of the Board. The Independent Non-executive Directors representing over one-third of the Board and each of the Independent Non-executive Directors has professional financing or accounting qualifications as required under Rule 3.10 of the Listing Rules. All the Independent Non-executive Directors meet the guidelines for assessing independence set out in Rule 3.13 of the Listing Rules. The Company has received an annual confirmation of independence from each of the Independent Non-executive Directors and still considers them to be independent. Active participation of Independent Non-executive Directors and Non-executive Directors in Board and Board Committees assure the independent views and inputs to the best interests of the Company.
The Board has adopted the provisions of the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules (the “Model Code”). Specific enquiries have been made with all Directors who have confirmed that they have fully complied with the required standards as set out in the Model Code during the year ended December 31, 2011.
The Board has also adopted another code of conduct on terms no less onerous than the Model Code that applies to securities transactions of all relevant employees who may be in possession of unpublished price sensitive information in relation to the Company (the “Code for Securities Transactions by Relevant Employees”). No incident of non-compliance was noted by the Company during the year.
Both the Model Code and the Code for Securities Transactions by Relevant Employees have been published on the Company’s website (www.ttigroup.com ).
The Board is strictly committed to at least four scheduled meetings in a year and will meet more frequently as and when required. All members of the Board are given complete and reliable information in relation to the affairs of the Group, and receive the support from and access to the Company Secretary of the Company in respect of all meetings of the Board. Each Director is afforded access, on his request, to senior management of the Group and to independent professional advice on performing their duties at the Company’s expenses. All Directors receive briefings and professional development training as necessary to ensure a proper understanding of the business of the Group and their responsibilities under statute and at common law.
Four Board meetings were held in 2011. Attendance records of each Director are set out in the section “Board and Board Committee Meetings in 2011″ at the end of this report. The meeting agenda is set by the Chairman in consultation with members of the Board. Minutes of the Board and Board Committee meetings with sufficient details of matters and concerns discussed are kept in safe custody by the Company Secretary of the Company, are sent to the Directors for record and are open for inspection by the Directors.
Proposed Board, Board Committee meeting and Annual General Meeting dates for 2012 have been agreed in the last Board meeting held in 2011 to facilitate maximum attendance of Directors.
Three Board committees have been set up, namely the Audit Committee, the Nomination Committee and the Remuneration Committee. Each of these Board Committees has specific written terms of reference which deal clearly with their authority and duties and have been published on the Company’s website (www.ttigroup.com ). Independent Non-executive Directors form majority of all Board Committees except the Nomination Committee to ensure independent views and opinions contributed and expressed at the Board Committee meetings. In order to monitor and oversee the delegated authority and responsibilities, the Board received reports about the activities and decisions of the Board Committees on a regular basis. Attendance records of each Board Committee are set out in the section “Board and Board Committee Meetings in 2011″.
Audit CommitteeThe Audit Committee is comprised of three members, all of them are Independent Non-executive Directors, being Mr Peter David Sullivan, Mr Joel Arthur Schleicher and Mr Manfred Kuhlmann, and is chaired by Mr Peter David Sullivan. Each member of the Audit Committee has professional, financial, or accounting qualifications as required under Rule 3.10 of the Listing Rules.
The major objectives of the Audit Committee is to ensure the effectiveness of internal control system and compliance with the Group’s obligations under the Listing Rules and other applicable laws and regulations and to oversee the integrity of the financial statements of the Company. The Audit Committee is also directly responsible on behalf of the Board for the selection, oversight and remuneration of the Company’s external auditors; the assessment of the independence and qualifications of the external auditors; the oversight of the performance of the Company’s external auditors and the maintenance of an appropriate relationship with the external auditors.
The Audit Committee held four meetings during 2011 to review with the Group Chief Financial Officer, other senior management and the external auditors the Group’s significant financial matters, internal controls, the Company’s accounting principles and practices, risk management, financial reporting matters and findings of internal and external auditors.
Nomination CommitteeThe Nomination Committee is comprised of four members, and is chaired by Mr Horst Julius Pudwill (Chairman), the other members being Mr Vincent Ting Kau Cheung (a Non-executive Director), Mr Christopher Patrick Langley OBE and Mr Manfred Kuhlmann.
The main responsibilities of the Nomination Committee is to ensure a fair and transparent process of Board appointments, and in particular to assist the Board to identify suitably qualified candidates and make recommendations for consideration of the Board and shareholders. While considering suitable candidates of directors, the Nomination Committee would consider professional knowledge, industry experience, personal skills, ethics and integrity as well as the ability to contribute sufficient time to the Board.
The Nomination Committee held two meetings during 2011. The work performed by the Nomination Committee, with sufficient resources provided by the Company, during 2011 included:-
Remuneration CommitteeThe Remuneration Committee is comprised of five members, and is chaired by Mr Vincent Ting Kau Cheung (a Non-executive Director), the other members being Mr Christopher Patrick Langley OBE, Mr Manfred Kuhlmann, Mr Joel Arthur Schleicher and Mr Peter David Sullivan.
The Remuneration Committee has been established to assist the Board in developing and administering a fair and transparent procedure for setting policy on the overall human resources strategy of the Group as well as the remuneration of Directors and senior management of the Group, and for determining their remuneration packages, on the basis of their merit, qualifications, and competence, and having regard to the Company’s operating results, individual performance, and comparable market statistics. The Remuneration Committee reports directly to the Board on its decisions or recommendations, and consults the Chairman and/or Chief Executive Officer for the proposals of other Executive Directors’ remuneration packages with access to sufficient resources and professional advices if necessary.
The Remuneration Committee held three meetings and reviewed, among other things, the existing Remuneration Policy and made recommendations to the Board during 2011.
The Board acknowledges its responsibility for overseeing the preparation of the accounts of the Group which give a true and fair view of the Group’s state of affairs, results and cash flows for the year.
The Board will present a balanced, clear and understandable assessment of annual and interim reports, other price-sensitive announcements and other financial disclosures required under the Listing Rules, and reports to the regulators as well as information required to be disclosed pursuant to statutory requirements.
The Board is responsible for maintaining sound and effective internal control systems and approving and reviewing key internal control policies including delegated authorities, policy on market disclosure and investor relations, non-audit services and treasury management policy. The Board conducted an annual review of the effectiveness of the internal control systems of the Company during 2011. An internal control system is designed to provide reasonable, but not absolute assurance, that material misstatement or loss can be avoided, and to manage and minimize risks of failure in operational systems.
The Board, and in particular the Audit Committee, conducts a continuous review of the effectiveness of the Group’s internal control system that have been put in place. The reviews covering financial, operational, compliance controls as well as risk management performed in 2011 included:
The external auditors of the Group is Deloitte Touche Tohmatsu, and in 2011, Deloitte Touche Tohmatsu provided the following audit and non-audit services to the Group:
|Nature of Services||Amount (US$’million)|
|External Audit Services||3.2|
The other services provided by Deloitte Touche Tohmatsu comprised professional services conducted under the terms of specified engagements.
To ensure the independence of the external auditors, the nature and ratio of annual fees to external auditors for audit services and non-audit services are subject to scrutiny by the Audit Committee. All non-audit services from external auditors are regulated by a Policy on Non-Audit Services published on the Company’s website (www.ttigroup.com ).
To enhance independent reporting by external auditors of the Group, the Independent Non-executive Directors and the external auditors of the Group meet without the presence of the management of the Group every year.
The Company believes that effective communication with its shareholders and investors is important and essential. The Company holds regular meetings with institutional shareholders and analysts and encourages shareholders to attend annual general meetings to communicate with Directors and management of the Company directly.
All the Company’s circulars, announcements, notices and results of general meetings, annual and interim reports, and webcasts of results presentations at press conference, which published on the Company’s website (www.ttigroup.com ), provide timely, efficient and accurate information to the shareholders and investors.
A Policy on Market Disclosure, Investor and Media Relations, published on the Company’s website (www.ttigroup.com ), ensures that the Company complies with its disclosure obligations under the Listing Rules and other applicable laws and regulations, and that all shareholders and potential investors have an equal opportunity to receive and obtain externally available information issued by the Company.
The Company values feedback from shareholders on its efforts to promote transparency and foster investor relationships. Comments and suggestions are welcome and can be addressed to Investor Relations and Communication by mail or by email to the Company at email@example.com .
A summary of attendance of Board and Board Committee meetings in 2011 are detailed in the following table:
|Meetings attended / Held in 2011|
|Number of meetings held during the year||4||4||2||3|
|Group Executive Directors|
|Mr Horst Julius Pudwill||4/4||2/2||Mr Joseph Galli Jr||4/4|
|Mr Kin Wah Chan||4/4|
|Mr Chi Chung Chan||4/4|
|Mr Stephan Horst Pudwill||4/4|
|Prof Roy Chi Ping Chung BBS JP||4/4(1)|
|Mr Vincent Ting Kau Cheung||3/4||2/2||3/3|
|Independent Non-executive Directors|
|Mr Joel Arthur Schleicher||4/4||4/4||2/3|
|Mr Christopher Patrick Langley OBE||4/4||2/2(2)||2/2||3/3|
|Mr Manfred Kuhlmann||4/4||4/4||2/2||3/3|
|Mr Peter David Sullivan||4/4||4/4||3/3|
|Dates of meetings||January 21, 2011||January 21, 2011||March 23, 2011||March 23, 2011|
|March 24, 2011||March 22, 2011||August 16, 2011||May 20, 2011|
|May 19, 2011||May 19, 2011||August 16, 2011|
|August 18, 2011||August 16, 2011|
Prof Roy Chi Ping Chung BBS JP re-designated from Group Vice Chairman and Executive Director to Non-executive Director with effect from July 1, 2011.
Article printed from TTI Annual Report 2011: http://www.ttigroup.com/onlinereport/ar2011
URL to article: http://www.ttigroup.com/onlinereport/ar2011/mda-governance/corporate-governance-report
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