Annual Report 2019

CORPORATE GOVERNANCE REPORT FAR EAST CONSORTIUM INTERNATIONAL LIMITED 132 The Board presents this Corporate Governance Report in the Company’s annual report for the year ended 31 March 2019. CORPORATE GOVERNANCE PRACTICES OF THE COMPANY The Company recognizes the importance of maintaining good corporate governance practices. The Board sets policies and implements corporate governance practices appropriate to the conduct of the Group’s business. The Company has applied the principles as set out in the CG Code during the year ended 31 March 2019. In the opinion of the Board, the Company has complied with the code provisions (the “Code Provisions”) set out in the CG Code during the year ended 31 March 2019, except for the deviation from Code Provision A.2.1. Key corporate governance principles and practices of the Company as well as details of the foregoing non-compliance and deviations of Code Provisions are summarized below. A. THE BOARD A.1 Responsibilities and Delegation The Board is responsible for the management and control of the business and affairs of the Group, and oversees the Group’s business strategic direction and performance, with the objectives of promoting the success of the Group and enhancing Shareholder value. Directors carry out their duties in good faith and in the interests of the Company and its Shareholders. They have access to relevant information as well as the advice and services of the Company Secretary and senior management. They are also able to seek independent professional advice in appropriate circumstances at the Company’s expense, upon reasonable request made to the Board. The Board reserves its decision on all major policy, strategy, financial and risk management and control matters. The day-to-day management, administration and operations of the Group are delegated to the Executive Committee and senior management. The delegated functions and responsibilities are periodically reviewed. Approval has to be obtained from the Board or Executive Committee prior to any significant transactions being entered into by the senior management team. A.2 Board Composition The Board currently comprises eight Directors, five are Executive Directors and three are Independent Non-executive Directors. The composition of the Board is set out in the “Corporate Information” section of this annual report. The respective profiles of the current Directors and the relationship among them are disclosed in the “Profile of Directors and Senior Management” section of this annual report. The list of directors (by category) is also disclosed in all corporate communications issued by the Company from time to time pursuant to the Listing Rules. The Independent Non-executive Directors are expressly identified in all corporate communications of the Company. Pursuant to Rule 3.10(1) of the Listing Rules, every board of directors of a listed issuer must include at least three Independent Non-executive Directors. Pursuant to Rule 3.21 of the Listing Rules, the audit committee of a listed issuer must comprise a minimum of three members. Pursuant to Rule 3.25 of the Listing Rules, the remuneration committee of a listed issuer must comprise a majority of Independent Non-executive Directors. Throughout the year ended 31 March 2019, the Company has met the Listing Rules requirements of appointing Independent Non-executive Directors representing at least one-third of the Board with one of them possessing appropriate professional qualifications and accounting and related financial management expertise. Following the passing away of Mr. Peter Man Kong WONG, the number of Independent Non-executive Directors was below the minimum number prescribed under Rule 3.10(1) of the Listing Rules. The number of members of the audit committee of the Company was reduced to two which was below the minimum number prescribed under Rule 3.21 of the Listing Rules and the relevant terms of reference of the Company. The number of members of the remuneration committee of the Company was reduced to two, which was below the composition requirement of the remuneration committee under Rule 3.25 of the Listing Rules and was below the minimum number prescribed under the relevant terms of reference of the Company. In addition, the Company has received from each of the Independent Non-executive Directors an annual written confirmation of independence pursuant to Rule 3.13 of the Listing Rules. The Company considers all of them are independent.