TERMS OF REFERENCE FOR THE BOARD OF DIRECTORS AND THE MANAGEMENT OF SA SA INTERNATIONAL HOLDINGS LIMITED

Transcription

1 TERMS OF REFERENCE FOR THE BOARD OF DIRECTORS AND THE MANAGEMENT OF SA SA INTERNATIONAL HOLDINGS LIMITED (together with its subsidiaries, the COMPANY unless the context otherwise requires) A. INTRODUCTION 1. These Terms of Reference are adopted by the board ( Board ) of directors ( Directors ) of the Company by resolution passed on 20 February 2017 to set out the types of decisions that should be taken up by the Board or delegated to the Management respectively. The Company should review these arrangements periodically to ensure that they remain appropriate to the Company s needs. D.1.2 B. RESPONSIBILITIES, ACCOUNTABILITIES AND CONTRIBUTIONS OF THE BOARD AND THE MANAGEMENT D.1.3 The Board 2. The Board is collectively responsible for the management and operations of the Company and its subsidiaries (collectively Group ). The business and affairs of the Group should be under the direction of and should vest with the Board. The Company should be headed by an effective Board which should assume responsibility for its leadership and control and be collectively responsible for promoting and contributing to its success by directing and supervising its affairs in a responsible and effective manner. The Board accepts that it is ultimately responsible for the performance and affairs of the Group. The Board may delegate all or any of its duties and powers to board committees as it sees fit but it shall remain ultimately responsible for the acts and omissions of those to whom it has delegated responsibilities. R The Board is elected by and is ultimately accountable to the shareholders and is the ultimate decision making body of the Group except for those matters reserved for shareholders by the Articles of Association of the Company and the Listing Rules. 4. Each Director has a duty to act in good faith and takes decisions objectively in the best interests of the Company. The Directors are aware of their collective and individual responsibilities to all shareholders in the manner in which the affairs of the Company are managed, controlled and operated. A.1 Principle 5 The duties and types of decision which should be taken up by the Board are, but not limited to, the following: 5.1 Corporate Goals and Objectives, etc to set the Company s vision and mission, and values and standards; to set the objectives, responsibilities and functions of the Board; Page 1 of 5

2 (iii) to set the objectives, responsibilities and functions of the Management; and (iv) to establish corporate goals and objectives, long-term business model and strategy for delivering the Company s objectives (corporate strategy). C Group s business to make decisions on material acquisitions and disposals of assets, investments, capitals projects, authority levels, major treasury policies, risk management policies and key human resources issues. 5.3 Monitoring Performance to conduct a regular evaluation of its own performance; and to monitor the performance of the Management with reference to the Group s corporate goals and objectives, business plan, departmental working plan and related key performance indicators as determined and approved by the Board or a Board Committee from time to time. B Financial Reporting and Internal Controls to approve annual budget and long-term plans of the Group with power to delegate such responsibilities to one or more Board Committees; is responsible for evaluating and determining the nature and extent of the risks it is willing to take in achieving the Company s strategic objectives, and ensuring that the Company establishes and maintains appropriate and effective risk management and internal control (iii) to oversee management in the design, implementation and monitoring of the risk management and internal control systems, and seek confirmation from the management on the effectiveness of these (iv) (v) to oversee the Company s risk management and internal control systems on an ongoing basis, ensure that a review of the effectiveness of the risk management and internal control systems of the Group has been conducted at least annually and report to shareholders that it has done so and on the relevant findings in the Corporate Governance Report of the Company. The review should cover all material controls, including financial, operational and compliance controls. The Board s annual review should, in particular, ensure the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company s accounting, internal audit and financial reporting functions; and through the Audit Committee of the Company, to establish formal and transparent arrangements to consider how it will apply financial reporting and internal control principles and to maintain an appropriate relationship with the Company s external auditors. C.2.1 C.2.2 C.3 Principle 5.5 Corporate Governance to consider and determine issues which are the responsibility of the Board pursuant to the Company s Memorandum and Articles of Association, relevant laws, regulations and Listing Rules in force from time to time under which the Group is governed; Page 2 of 5

3 to delegate its power and authority to the relevant committee of the Board in respect of the management and operation of the Company as and when appropriate, and give them sufficiently clear terms of reference to enable them to perform their functions properly; (iii) to regularly review the contribution required from a Director to perform his responsibilities to the Company, and whether he is spending sufficient time performing them; (iv) to present a balanced, clear and understandable assessment in annual and interim reports, other price-sensitive announcements and other financial disclosures required by the Listing Rules; (v) to establish written guidelines no less exacting than the Model Code (as set out in the Listing Rules) for relevant employees in respect of their dealings in the Company s securities; (vi) to be responsible for performing or delegating the responsibilities to a committee or committees the corporate governance duties as follows: (a) to develop and review an issuer s policies and practices on corporate governance and make recommendations to the Board; (b) to review and monitor the training and continuous professional development of Directors and senior management; (c) to review and monitor the Company s policies and practices on (d) compliance with legal and regulatory requirements; to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and Directors; and (e) to review the Company s compliance with the code and disclosure in the Corporate Governance Report. (vii) to approve the selection, appointment or dismissal of the Company Secretary as required under the Listing Rules; and (viii) to determine any matters involving a conflict of interest for a substantial shareholder or a Director. D.2.1 A.1 Principle C.1.5 A.6.4 D.3.2 D.3.1(a) D.3.1(b) D.3.1(c) D.3.1(d) D.3.1(e) F.1.2 A Delegation of powers to Management to delegate aspects of its management and administration functions to the Management and give clear directions as to the Management s powers, in particular, where Management should report back and obtain prior Board approval before making decisions or entering into any commitments on the Company s behalf. D.1 Principle D Relationship with Stakeholders The Management to oversee the Company s relationships with stakeholders, such as shareholders, suppliers, customers, the community, interest groups and other parties who have a legitimate interest in the responsible conduct of the Group s business; and to maintain an on-going dialogue with shareholders and in particular, to use annual general meetings or other general meetings to communicate with them and encourage their participation, and to establish a shareholders communication policy and review it on a regular basis to ensure its effectiveness. E.1 Principle E While the Board retains oversight responsibility, certain of the management and administration functions have to be delegated by the Board to the Management. The Board diligently monitors the Management s performance in that regard but responsibility for conducting the Company s day-to-day management of business Page 3 of 5 A.2 Principle

4 rests with the Management. The Management is ultimately accountable to the Board. 7. The Management, consisting of Chief Executive Officer, the executive committee of the Board ( Executive Committee ) along with other senior management members, should be responsible for contributing to the success of the implementation of the corporate strategy and directions as determined by the Board from time to time. In doing so, they must apply business principles and ethics which are consistent with those expected by the Board and shareholders of the Company. 8. The Board delegates management and administrative functions to the Management for their conduct of the day-to-day operations of the Company effectively, legally and ethically. As such, the Management should be aware of the material risks and issues faced by the Company and that they should carefully supervise the Company s financial reporting systems and processes. The Board and individual Directors should be given contact details of and have separate and independent access to the Company s senior management. A The duties and responsibilities which should be taken up by the Management are, but not limited to, the following: 9.1 Corporate Goals and Objectives, etc to develop, prepare and implement business and execution proposals, strategic plans and annual operating plans in line with the corporate goals and objectives of, and with risks acceptable to, the Company for approval by the Executive Committee on behalf of the Board or by the Board directly. 9.2 Financial Reporting, Risk Management and Internal Controls to prepare annual budget, long-term plan and implementation plan for review by the Executive Committee and approval by the Board; to determine the policies or methods for planning, budgeting and financial control for the Group; (iii) to determine the systems and policies regarding the operational, financial, economic, pricing and administrative aspects of the business of the Group; (iv) to advise the Board from time to time to adopt appropriate accounting methods, standards and policies in the preparation of financial statements for the Group (including overseas offices); (v) to determine the procedure for allocating resources to and (vi) withdrawing them from business units; to analyze the results of performance of the Group and compare them against the budget, and take appropriate actions to ensure that the performance is in line with budget; (vii) to report to the Executive Committee, the Audit Committee or the Board on the results of the performance of the Group; (viii) to monitor risks and to design, implement and monitor the risk management and internal control systems on an ongoing basis, and to provide confirmation to the Board on the effectiveness of these (ix) (x) to respond to queries raised by the external auditors about accounting records, financial accounts or systems of control; to discuss the risk management and internal control systems with the Audit Committee to ensure that the Management has performed its duty to have effective systems or procedures, and to implement and further develop such systems and procedures as necessary. The Page 4 of 5 C3.3(k) C3.3(g)

5 discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company s accounting and financial reporting function; (xi) to ensure that the external auditor attend the annual general meeting to answer questions about the conduct of the audit, the preparation and content of the auditors report, the accounting policies and auditor independence; (xii) to determine security policies for various operational aspects of the Group; and (xiii) to approve internal documents concerning matters within the authority of the Management. E Overseas offices to set up a sufficient number of collective executive bodies of overseas offices, determine their authorities, appoint personnel to such bodies, set up systems to regulate their operations and decide on the closure of such bodies; to approve appointments of candidates, and removal or dismissal of personnel for the senior executive positions of overseas offices; and (iii) to approve and amend, if necessary, overseas offices budgets. 9.4 Relationship with the Board to supply the Board and its committees in a timely manner with appropriate and adequate information in the form and quality to enable the Directors to perform their duties and responsibilities, to monitor the performance of the Company and to make informed decisions. The information supplied must be complete and reliable; to provide sufficient explanation and information to the Board to enable it to make an informed assessment of financial and other information put before it for approval; (iii) to provide all members of the Board with monthly updates giving a balanced and understandable assessment of the Company s performance, position and prospects in sufficient detail to enable the Board as a whole and each Director to discharge their duties under the Listing Rules; (iv) to provide a comprehensive, formal and tailored induction on appointment of Directors, and subsequently such briefing and professional development as is necessary to ensure that the Directors have a proper understanding of the Company s operations and business and are fully aware of their responsibilities under statute and common law, the Listing Rules, legal and other regulatory requirements and the Company s business and governance policies; and (v) to handle such other matters (including matters about shareholders, human resources of the Company, organizational and technical support to the Group s activities) that are delegated by the Board from time to time. A.7 Principle A.7.2 C.1.1 C.1.2 A.6.1 C. LANGUAGE VERSION 10. The text of these Terms of Reference appears in both English and Chinese languages. In case of discrepancy, the English version shall prevail. Page 5 of 5