• Corporate Governance
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  1. CORPORATE MANAGEMENT

    Chairman and Managing director
    The roles of the Chairman and the Managing Director are segregated and assumed by two separate individuals who have no relationship with each other to strike a balance of power and authority so that the job responsibilities are not concentrated on any one individual.

    The Chairman of the Board is responsible for taking lead of effective running of the Board.

    The Managing director is delegated with the authorities to manage the Group's business in all aspects effectively, implement major strategies, make day-to day decision and coordinate overall business operation.

  2. BOARD RESPONSIBLITLIES

    The Board is responsible for the management of the business and affairs of the Group with the objective of enhancing shareholder value and prospects in the annual and interim reports, and of other price-sensitive announcements and other financial disclosures as required under the Listing Rules, and reports to regulators any information required to be disclosed pursuant to statutory requirement.
    Management is responsible for the day-to-day operations of the Group under the leadership of the Managing Director. The Managing Director, working with the other executive directors and the executive management team of each business division, is responsible for managing the business of the Group, including implementation of strategies adopted by the Board and assuming full accountability to the Board for operations of the Group. All executive directors have made full and active contribution to the affairs of the Board and the Board always acts in the best interests of the Group.

  3. REGULAR BOARD MEETINGS

    The Board meets at least two times each year and has a formal schedule of matters referred to it for consideration and decision. Additional meetings may be convened as and when necessary. Notice of at least fourteen days is served for regular Board meetings and reasonable notice is given for all other Board meetings. Directors are consulted and provided with an opportunity to include matters into the agenda for discussion at the Board meetings. The Company Secretary assists the Chairman / Managing Director in preparing the agenda for each Board meeting and to ensure that applicable rules and regulations regarding the meetings are observed. The final agenda together with the Board papers are distributed to the Directors at least three days before the Board meetings.

  4. BOARD COMMITIEES

    Each Committee has its own defined scope of duties and terms of reference. The Company Secretary shall make available the terms of reference of the committees to any shareholder upon receipt of a request in writing from the shareholder. The members of a committee are empowered to make decisions on matters within the terms of reference of such committee. Copies of all signed minutes of the committees are sent to Directors for their record.

    a. Audit Committee
    The Audit Committee currently comprises three members, all of whom are independent non-executive directors, namely, Mr Chow Siu Ngor, Mr Yin Tat Man and Mr Tam Kam Biu William.

    The terms of reference are as follows:

    1. CONSTITUTION

    1.1 The new Committee is established pursuant to a resolution passed by the Board at itsmeeting held on 22 December 2008.

    2. MEMBERSHIP

    2.1 The members of the Committee shall be appointed by the Board from amongst the non-executive directors of the Company and a majority of the non-executive directors should be independent. At least one of the independent non-executive directors must have appropriate professional qualifications or accounting or related financial management expertise. The Committee shall have a minimum of three members or at a number in compliance of the Listing Rules’ requirement from time to time. A quorum shall be two members. The members present shall elect a chairman to preside the meeting which should be chaired by an independent non-executive director.

    3. ATTENDANCE AT MEETINGS

    3.1 Committee’s members, the Finance Director or the financial controller and a representative of the external auditors shall normally attend meetings. Other member of the Board and members of the staff with specific responsibility for the area under review by the Committee shall also have the right of attendance. However, at least once a financial year, the Committee shall meet with external auditors without executive Board members present.

    3.2 The company secretary or the assistant company secretary shall be the secretary of the Committee, where the company secretary is also an executive Board member, the company secretary can only attend meetings of the Committee in the capacity as a company secretary, and not as an executive Board member.

    4. FREQUENCY OF MEETINGS

    4.1 Meeting shall be held not less than twice each financial year. The Committee shall normally meet prior to the finalisation of both the interim and year end accounts to discuss any issues arising from them. The external auditors may request a meeting if they consider that one is necessary.

    5. AUTHORITY

    5.1 The Committee is authorised by the Board to investigate any activity within its terms of reference as set out herein and any other issues specifically delegated by the Board or may arise as a natural extension of the review of the Company’s affairs in pursuing the Committee’s duties. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

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

    6. DUTIES

    6.1 The duties of the Committee shall be:

    (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 standard. The audit committee should discuss with the external auditor before the audit commences, the nature and scope of the audit and reporting obligations, and ensure the co-ordination where more than one audit firm is involved;

    (c) to develop and implement policy on the engagement of an external auditor to supply non-audit services. For this purpose, 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 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 judgements 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 committee should focus particularly on:

    (i) any changes in accounting policies and practices;
    (ii) major judgemental areas;
    (iii) significant adjustments resulting from the audit;
    (iv) the going concern assumption and qualifications;
    (v) compliance with accounting standards; and
    (vi) compliance with Hong Kong Exchange Listing Rules and other legal requirements in relation to financial reporting;

    (e) in regard to (d) above:

    (i) members of the committee must liaise with the Company’s board of directors, senior management and the person appointed as the Company’s qualified accountant 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 qualified accountant, compliance officer or auditors;

    (f) to review the Company’s financial controls, internal controls and risk management systems;

    (g) to discuss with the management the system of internal control and ensure that management has discharged its duty to have an effective internal control system;

    (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) to discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary);

    (j) 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;

    (k) to review the Company’s statement on internal control systems (where one is included in the annual report) prior to endorsement by the Board;

    (l) (where internal audit function exists) to review the internal audit programme, ensure co-ordination between the internal and external auditors, and 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;

    (m) to ensure that the board will provide a timely response to the issues raised in the
    external auditor’s management letter;

    (n) to report to the board on the matters sets out in provision of terms of reference of
    the Committee;

    (o) to review the group’s financial and accounting policies and practices; and

    (p) to consider other topics, as defined by the Board.

    7. REPORTING PROCEDURES

    7.1 The secretary of the Committee shall circulate the minutes of meetings and reports of the
    Committee to all members of the Board.

    b. Remuneration Committee

    The Remuneration Committee has been established by the Company on 20 December 2005.

    Please refer to the following terms of reference for remuneration committee:

    (a) to make recommendations to the board on the issuer’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 should consider factors such as salaries paid by comparable companies, time commitment and responsibilities of the directors, employment conditions elsewhere in the group and desirability of performance-based remuneration;

    (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 issuer;

    (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;

    and

    (f) to ensure that no director or any of his associates is involved in deciding his own remuneration.

    C. Nomination Committee

    The Company has not established any nomination committee and would not consider establishing a nomination committee owing to the small size of the Board.  The appointment of a new director is a collective decision of the Board, taking into consideration the expertise, experience, integrity and commitment of that appointee to the relevant principal division, the Company and the Group.

    During the year , a regular board meeting was held in relation to nomination of the Chairman and Independent Non-executive director of the Company.

    Every newly appointed Director will receive a comprehensive, formal and tailored induction of the first occasion of his appointment.

  5. DIRECTORS'AND AUDITORS'ACKNOWLEDGEMENT

    All directors acknowledge their responsibility for preparing the accounts for the year ended 31st March, 2006.

    Messrs Grant Thornton the auditors of the Company, acknowledge their reporting responsibilities in the auditors'report on the financial statements for the year ended 31st March, 2006.

  6. AUDITORS'REMUNERATION

    The Group's external auditors are Messrs Grant Thornton for the year ended 31st March , 2006 , the fees paid/payable for audit service is HK$680,000.

  7. DIRECTORS'SECURITIES TRANSACTIONS

    The company has adopted the Model Code set out in Appendix 10 of The Listing Rules as the code of conduct regarding securities transactions by the Directors (the "Model Code"). All Directors have confirmed, following a specific enquiry by the Company, that they have fully complied with the required standards as set out in the Model Code during the year.

  8. INTERNAL CONTROLS

    The Board has overall responsibility for the Group's internal control Systems and through the Audit Committee, conducts reviews on the Effectiveness of these systems at least annually, covering all material controls, financial, operational and compliance controls and risk management functions. The process used in reviewing the effectiveness of these internal control systems includes discussion with management on risk areas identified by management. The purpose of the Company's internal control is to provide reasonable, but not absolute, assurance against material misstatement or loss and to manage rather than eliminate risks of failure in operational systems so that the Company's objectives can be achieved.

  9. COMMUNICATION WITH SHAREHOLDERS

    The Company endeavors to maintain a high level of transparency in communicating with shareholders. Extensive information of the Group's activities, business strategies and developments is provided, in additions to the Company's annual reports and interim reports, in our website "www.chinasolar-energy.com". Shareholders of the Company are encouraged to attend the annual general meeting of the Company which offer a valuable forum for dialogue and interaction with management. The Chairman of the Board and the chairman of the Audit Committee, or in their absence, another member of the relevant committee, are available at the annual general meeting to answer questions from shareholders on the business of the Group.