Our Directors recognize the importance of incorporating elements of good corporate governance in management conducive to the protection of the interests of our Shareholders. We would adopt the following corporate governance measures in relation to managing potential conflict of interests (if any) between our Group and our Directors (including independent non-executive Directors and the Controlling Shareholders):

(a) Each Director has, pursuant to his service contract or engagement letter, covenanted with and undertaken to our Company that during the term of his/her service or appointment, he/she shall not, and shall procure that none of his/her associates shall, directly orindirectly, be engaged in or concerned with or interested in any business which is or may be in any respect in competition with the business carried on from time to time by our Group or any of the companies within our Group. However, the aforesaid restriction does not prohibit the holding (directly or through nominees) by a Director or his/her associates of any securities listed on any stock exchanges as long as not more than 5% of the total voting rights attaching to the securities of the same class shall be so held (or, if such investment or holding is over 5%, our Directors concerned should seek the Board’s prior written approval before making the relevant investment (with the relevant Director abstaining from voting) (on the condition that neither the relevant Director nor his/her associates participate in or are otherwise involved in the management of that company) and shall not restrict the holding of any securities of our Company. Subject to the exceptions as aforesaid, during the term of his/her being a Director and for a period of one year after the expiry or the termination of his/her service or appointment, a Director shall not, and shall procure that none of his/her associates will, directly or indirectly, (either alone orjointly with others or as manager or agent for any person, firm or company) engage or be engaged in Hong Kong or those regions and markets within the PRC or elsewhere in which any member of our Group operates or has operated any part of its business from time to time, whether directly or indirectly, in any business which is or may be in competition with the business carried on from time to time by our Group or any of the companies within our Group.

 

In principle, the Board will give its written approval for Directors to hold more than 5% of the total voting rights in any listed securities (“Investee Company”) when it considers that such holding will not prejudice the interest of the Company and its Shareholders as awhole. In particular, a balance of the following criteria will be taken into account:

 

(1) the revenue contributed by the competing or possibly competing sector as compared with the total revenue of the Investee Company — if the contribution is insignificant, the Board may, on balance, be more inclined to allow the 5% or more shareholding in the Investee Company;
(2) the shareholding structure of the Director concerned in the Investee Companies after such investment — if the Director concerned will become the single largest shareholder of the Investee Company, the Board may, on balance, be less inclined toallow the 5% or more shareholding in the Investee Company;
(3) the entitlement to board seat by the relevant Director in the Investee Company — if the Director concerned will also be entitled a major portion of the board seat of the Investee Company, the Board may, on balance, be less inclined to allow the 5% or more shareholding in the Investee Company; and
(4) other applicable factors (e.g. market sentiment, the development strategy of our Groupat the material time) which the Board considers relevant from time to time.

 

(b)
  1. Where a Board meeting is to be held for considering proposed transactions in which the relevant Controlling
    Shareholder(s)/Director(s) and/or their associates has a material interest, the relevant Controlling Shareholder(s) and/or the overlapping Director(s)concerned may not vote on the resolutions of the Board approving the same and shall absent themselves from participation in such meetings, nor be counted in the quorum for the voting so as to ensure the relevant matters will be considered by disinterested Directors only.

(c)
  1. Where the advice from independent professional adviser, such as that from financial adviser, is reasonably requested by our Directors (including the independent non-executive Directors), the appointment of such independent professional will be made at our Company’s expenses.

 

COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICE

The Company has adopted all the requirements of the code provisions of the Code on Corporate Governance Practices contained in Appendix 14 to the Listing Rules (the "Corporate Governance Code"). Since the Company was only listed on the Stock Exchange on 13 December 2011, the Corporate Governance Code was not applicable to the Company for the six months ended 30 September 2011. However, none of the Directors is aware of any information that would reasonably indicate that the Company or any of its Directors is not or was not, for any part of the period between the date of the Company’s listing and the date of 2011 interim report in due compliance with the code provisions of the Corporate Governance Code.

 

CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code as its own code of conduct for dealing in securities of the Company by the Directors. Since the Company was only listed on the Stock Exchange on 13 December 2011, the Model Code was not applicable to the Company for the six months ended 30 September 2011. However, having made specific enquiry of all Directors, all Directors confirmed that all dealings in the Company’s securities were disclosed in the prospectus and they have complied with the required standard set out in the Model Code since the Company’s listing.