Corporate governance practices
The Company is committed to maintaining a high standard of corporate governance. It is believed that high standards of corporate governance provide a framework and solid foundation for the promotion of high standards of accountability, transparency and responsibility to the shareholders of the Company (the “Shareholders”). The Company has adopted the Corporate Governance Code and Corporate Governance Report (the “Corporate Governance Code”) as set out in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) as its own code to govern its corporate governance practices. The Board also reviews and monitors the practices of the Company from time to time with the aim of maintaining and improving the standard of corporate governance practices.

Board Responsibilities
The Board is responsible for leading and controlling the Company and overseeing the Group’s businesses, strategic decisions and financial performances. The chairman of the Board is responsible for the overall corporate strategy, planning and business performance of the Group, and for the implementation of each resolution put forward at general meetings and Board meetings, while the chief executive officer is responsible for overseeing the overall business of the Group, including devising and implementing business and development strategies and targets. Major corporate matters that are specifically delegated by the Board to the senior management include preparation of interim and annual reports and announcements, execution of business strategies and initiatives adopted by the Board, implementation of adequate systems of internal controls and risk management procedures and compliance with relevant laws, rules and regulations.

Board committees
The Board has established four committees, namely the audit committee, the remuneration committee, the nomination committee and the investment committee, to supervise various matters of the Group. To establish effective communication channels between each committees and the management, the Company established an internal coordination and support team to facilitate access to more independent and objective information for the Directors.

Audit committee
The roles and functions of the audit committee are, among other things, to review and monitor the financial reporting process of the Group, internal control and the review of the financial statements of the Company. The audit committee meets the external auditors of the Company regularly and discusses the review process and accounting matters.
The audit committee comprises two independent non-executive Directors, Mr. Chen Shimin and Mr. Wang Yi, and one non-executive Director, Mr. Ye Weigang Greg. The audit committee is chaired by Mr. Chen Shimin, who possesses the appropriate professional qualifications and extensive experience in, and knowledge of, finance and accounting as required under Rule 3.10 of the Listing Rules. All members of the audit committee hold the relevant industry and financial experience necessary to advise the Board on strategies and other related matters. None of the members of the audit committee is a former partner of or connected with the Company’s existing external auditors.

Remuneration committee
The remuneration committee was established on 19 August 2010 with the written terms of reference which was prescribed in accordance with the Listing Rules. The roles and functions of the remuneration committee are, among other things, to make recommendations on the remuneration package of the Directors and senior management, the execution of which is subject to the approval of the Board. In addition, the remuneration committee also evaluates the performance of the senior management of the Group and determines its remuneration structure.
The remuneration committee comprises three independent non-executive Directors, Mr. Wang Yi, Mr. Zhang Xuejun and Mr. Chen Shimin. The remuneration committee is chaired by Mr. Wang Yi.

Nomination committee
The nomination committee was established on 19 August 2010. The roles and functions of the nomination committee are, among other things, to formulate of the policies on Director nomination for the Board’s consideration and to implement the Director nomination policies approved by the Board, including the review of Board composition annually, identification of eligible persons for the position of Director, monitor the Directors’ succession plans and assessment of the independence of the independent non-executive Directors.
The nomination committee comprises two independent non-executive Directors, Mr. Zhang Xuejun and Mr. Chen Shimin and one executive Director, Mr. Gong Renyuan. The nomination committee is chaired by Mr. Zhang Xuejun.

Investment committee
Investment committee was established on 28 June 2011, and is responsible for advising the Board on investment of fixed assets (both tangible and intangible), equity, debt, financial securities, restructuring and joint ventures.
The investment committee comprises of three independent non-executive Directors, Mr. Zhang Xuejun (Chairman), Mr. Wang Yi and Mr. Chen Shimin; one non-executive Director, Mr. Ye Weigang Greg; and one executive Director, Mr. Xiang Jie.

Internal Control
The audit department of the Company regularly conducted comprehensive audit on the internal control system of the Company and its subsidiaries and submitted the “Report on Internal Control” for the Board’s review. The Board is responsible for the internal control system and reviewing its effectiveness and it also reviews the efficiency of the internal control system of the Group, which covers all material controls including financial, operational and compliance controls and risk management functions, to prevent unauthorized use or sale of assets, to ensure the proper filing of accounting records and the providing of reliable financial information for internal use or for release, and to ensure that the applicable laws, regulations and rules are complied with. The procedure reasonably ensures the non-occurrence of significant error, loss or fraud.