Corporate Profile
Chairman's Statement
Board of Directors
Corporate Governance
Milestones
Awards and Recognition

 

The Company is committed to maintaining good corporate governance standard and procedures to ensure the integrity, transparency and quality of disclosure in order to enhance the Shareholders’ value.

CORPORATE GOVERNANCE PRACTICES
The corporate governance principles of the Company emphasize a quality board, sound internal controls, transparency and accountability to all Shareholders.

The Company has adopted the code provisions set out in the Corporate Governance Code (the “CG Code”) contained in Appendix 14 to the Listing Rules as its own code of corporate governance. During the year ended 30 April 2017, the Company was in compliance with all relevant code provisions set out in the CG Code except for the deviations as explained below.

Code provision A.2.1 of the CG Code provides that the responsibilities between the chairman and chief executive officer should be divided. Mr. Sun Shao Feng, the chairman of the Company (the “Chairman”), currently performs the Chief Executive Officer (the “CEO”) role. The Board believes that vesting the roles of both Chairman and CEO in the same person has the benefit of ensuring consistent leadership within the Group and enables more effective and efficient overall strategic planning for the Group. The Board further believes that the balance of power and authority for the present arrangement will not be impaired and is adequately ensured by the current Board which comprises experienced and high caliber individuals with sufficient number thereof being independent non-executive Directors.

Code provision A.4.1 of the CG Code provides that non-executive directors should be appointed for a specific term and subject to re-election. Prior to 26 July 2016, Mr. Hu Ji Rong (“Mr. Hu”), an independent non-executive Director, is not appointed for a specific term, but is subject to retirement from office by rotation in accordance with the bye-laws of the Company (“Bye-laws”). On 26 July 2016, the Company has entered into a letter of appointment with Mr. Hu for a fixed term of two years commencing on 26 July 2016, which is automatically renewable for successive term of two years upon the expiry of the said term, unless terminated by not less than one month’s notice in writing served by either party on the other.

Code provision C.1.2 of the CG Code provides that management should provide all members of the board with monthly updates giving a balanced and understandable assessment of the issuer’s performance, position and prospects in sufficient details to enable the board as a whole and each director to discharge their duties under Rule 3.08 and Chapter 13 of the Listing Rules. Although the management of the Company did not provide a regular monthly update to the members of the Board, the management keeps providing information and updates to the members of the Board as and when appropriate.

Code provision E.1.2 of the CG Code provides that the chairman of the board should attend the annual general meeting. He should also invite the chairman of the audit, remuneration, nomination and any other committees (as appropriate) to attend the annual general meeting. Mr. Sun Shao Feng, the Chairman, did not attend the annual general meeting of the Company held on 30 September 2016 (the “2016 AGM”) due to dealing with his official engagement.

DIRECTORS’ SECURITIES TRANSACTIONS
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules as the code of conduct regarding Directors’ securities transactions. Having made specific enquiry of all Directors, the Directors confirmed that they have complied with the required standards as set out in the Model Code during the year ended 30 April 2017.

BOARD OF DIRECTORS
The Board is responsible for the leadership and control of the Company, and is responsible for setting up the overall strategies as well as reviewing the operation and financial performance of the Group. The Board reserved for its decision or consideration matters covering overall strategies of the Group, major acquisitions and disposals, annual budgets, annual and interim results, recommendations on Directors’ appointment or re-appointment, approval of major capital transactions and other significant operational and financial matters. The Board has delegated to the management the authority and responsibility for daily management of the Group, implementation of strategies approved by the Board, monitoring operating budgets, implementation of internal control procedures, and ensuring compliance with relevant statutory requirements and other rules and regulations. In addition, the Board has also delegated various responsibilities to the Board committees. Further details of these committees are set out in this report.

The Board currently consists of six Directors including two executive Directors and four independent non-executive Directors representing a majority of the Board:

Executive Directors
Mr. Sun Shao Feng (Chairman and CEO)
Mr. Chen Changgai

Independent Non-executive Directors
Mr. Hu Ji Rong
Mr. Wei Xiongwen
Mr. Zeng Shaoxiao
Ms. Yu Xiao Min

The Board members have no financial, business, family or other material/relevant relationships with each other. Such balanced Board is composed to ensure strong independence existed across the Board. The composition of the Board reflects the balanced skills and experience for effective leadership. The biographical details of Directors are set out on pages 46 to 49 under the section headed “Directors and Senior Management”.

Directors’ Training
According to the code provision A.6.5 of the CG Code, all directors should participate in continuous professional development to develop and refresh their knowledge and skills to ensure that their contribution to the board remains informed and relevant. The CG Committee is delegated the responsibility by the Board of reviewing and monitoring the training and continuous professional development of the Directors and senior management.

All Directors have participated in continuous professional development and provided a record of training they received for the financial year ended 30 April 2017 to the Company. During the year ended 30 April 2017, each of the Directors participated in continuous professional development by reading materials relating to the discharge of their duties and responsibilities and regulatory updates.

The Company has also continuously updated Directors on the latest developments regarding the Listing Rules and other applicable regulatory requirements, to ensure compliance and enhance their awareness of good corporate governance practices.

Chairman and Chief Executive Officer
The roles of Chairman and CEO are not separate and Mr. Sun Shao Feng currently performs these two roles.

Independent Non-executive Directors
The four independent non-executive Directors are persons of high calibre, with academic and professional qualifications in the fields of law, accounting, scientific research and development, and has extensive international business network. With their experience gained from various sectors, they provide strong support towards the effective discharge of the duties and responsibilities of the Board. Each independent non-executive Director gave an annual confirmation of his/her independence to the Company pursuant to Rule 3.13 of the Listing Rules, and the Company considers that all independent non-executive Directors are independent.

Mr. Hu Ji Rong, Mr. Wei Xiongwen, Mr. Zeng Shaoxiao and Ms. Yu Xiao Min, being all the independent non-executive Directors, were appointed for a term of 2 years and subject to retirement by rotation in accordance with the Bye-laws.

Attendance Records

  Number of attendance
Name of Directors Board Meetings General Meetings Audit Committee's Meetings Nomination Committee's Meeting Remuneration Committee's Meeting Corporate Governance Committee's Meeting
Executive Directors:            
Mr. Sun Shao Feng
(Chairman and CEO)
4/4 0/3
Mr. Chen Changgai 4/4 3/3 1/1 1/1
Independent Non-executive
Directors:
           
Mr. Hu Ji Rong 2/4 2/3 1/3 1/1 1/1 1/1
Mr. Wei Xiongwen 3/4 0/3 3/3 1/1 1/1 1/1
Mr. Zeng Shaoxiao 3/4 2/3 3/3 1/1 1/1 1/1
Ms. Yu Xiao Min 2/4 1/3

Board Meetings
The Company planned in advance four scheduled Board meetings a year at approximately quarterly intervals in order to ensure that all Directors could plan in advance their availability to attend the scheduled Board meetings. Additional meetings will be held as and when required. During the regular meetings of the Board, the Board reviewed the operation and financial performance, and reviewed and approved the annual and interim results.

During the year ended 30 April 2017, the Board held 4 meetings and passed resolutions by way of written resolutions. All Directors are given an opportunity to include any matters in the agenda for regular Board meetings, and are given sufficient time to review documents and information relating to matters to be discussed in Board meetings in advance.

Board minutes are kept by the company secretary of the Company (the “Company Secretary”) and are open for inspection by the Directors. Every Board members are entitled to have access to Board papers and related materials and have unrestricted access to the advice and services of the Company Secretary, and have the liberty to seek external professional advice upon reasonable request.

General Meetings
During the year ended 30 April 2017, 3 general meetings of the Company were held, being the 2016 AGM held on 30 September 2016 and 2 special general meetings held on 25 July 2016 and 20 January 2017 respectively.

The Board is responsible for maintaining an on-going dialogue with the Shareholders and in particular, uses annual general meetings or other general meetings to communicate with them and encourage their participation.

AUDIT COMMITTEE

The audit committee of the Company (the “Audit Committee”) currently comprises three independent non-executive Directors, namely Mr. Hu Ji Rong (as committee chairman), Mr. Wei Xiongwen and Mr. Zeng Shaoxiao.

The terms of reference of the Audit Committee adopted by the Board are aligned with the code provisions set out in the CG Code, and are currently made available on the websites of the Stock Exchange and the Company.

The Audit Committee is mainly responsible for making recommendations to the Board on the appointment, re-appointment and removal of the external auditor; reviewing, in draft form, the interim and annual reports and accounts of the Group and significant financial reporting judgements contained therein; and overseeing the Company’s financial reporting system, and the risk management and internal control systems.

During the year ended 30 April 2017, the Audit Committee held 3 meetings, at which the members of the Audit Committee principally (i) reviewed the Group’s annual financial statements for the year ended 30 April 2016 and recommend the re-appointment of the external auditors; (ii) reviewed the Group’s interim financial statements for the six months ended 31 October 2016; and (iii) recommended to the Board of the engagement of external professional party to review the Group’s internal control environment for the year ended 30 April 2017 and assist the Group to adopt and implement the Enterprise Risk Management systems. The Audit Committee focuses not only on the impact of the changes in accounting policies and practices but also on the compliance with accounting standards, the Listing Rules and other legal requirements in the review of the Company’s interim and annual reports.

The consolidated financial statements for the year ended 30 April 2017 have been reviewed by the Audit Committee and the Audit Committee is of the opinion that such financial statements are complied with applicable accounting standards, the Listing Rules and other legal requirements and that adequate disclosures have been made.

The Audit Committee also reviewed the Company’s financial controls, internal control and risk management systems and noted that review of the same shall be carried out annually.

NOMINATION COMMITTEE
The nomination committee of the Company (the “Nomination Committee”) currently consists of three independent non-executive Directors and an executive Director, namely Mr. Zeng Shaoxiao (as committee chairman), Mr. Hu Ji Rong, Mr. Wei Xiongwen and Mr. Chen Changgai.

The terms of reference of the Nomination Committee adopted by the Board are aligned with the code provisions set out in the CG Code, and are currently made available on the websites of the Stock Exchange and the Company.

The Nomination Committee is mainly responsible for reviewing the structure, size and diversity of the Board, assessing the independence of the independent non-executive Directors and making recommendations to the Board on the appointment or re-appointment of Directors and succession planning for Directors, in particular the Chairman and CEO.

The Board adopted on 2 September 2013 a board diversity policy (the “Board Diversity Policy”) and delegated certain duties under the Board Diversity Policy to the Nomination Committee. The Company recognizes and embraces the benefits of having a diverse Board to enhance the quality of its performance and hence the purpose of the Board Diversity Policy aims to build and maintain a Board with a diversity of Directors. The Board diversity would be considered from a number of aspects, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge and length of service. The Nomination Committee will discuss and review the measurable objectives for implementing the Board Diversity Policy from time to time to ensure their appropriateness and the progress made towards achieving those objectives will be ascertained. The Nomination Committee will also review the Board Diversity Policy, as appropriate, to ensure its continued effectiveness from time to time. After assessing the suitability of the Directors’ skills and experience relevant to the Company’s business, the Nomination Committee considered that the existing Board was suitably qualified with professional backgrounds and/or equipped with extensive expertise for the purposes of providing direction to and oversight of the Group’s strategic and business in achieving its objectives.

During the year ended 30 April 2017, the Nomination Committee held 1 meeting, at which the Nomination Committee reviewed the Board structure and composition, as well as recommended the re-election of retiring Directors and assessed the independence of the independent non-executive Directors.

REMUNERATION COMMITTEE
The remuneration committee of the Company (the “Remuneration Committee”) currently consists of three independent non-executive Directors and an executive Director, namely Mr. Hu Ji Rong (as committee chairman), Mr. Wei Xiongwen, Mr. Zeng Shaoxiao and Mr. Chen Changgai.

The terms of reference of the Remuneration Committee adopted by the Board are aligned with the code provisions set out in the CG Code, and are currently made available on the websites of the Stock Exchange and the Company.

The Remuneration Committee is mainly responsible for making recommendations to the Board on the Company’s policy and structure on the remuneration packages for all Directors and senior management and on the establishment of a formal and transparent procedure for developing remuneration policy.

The Remuneration Committee has adopted the approach under code provision B.1.2(c)(ii) of the CG Code to make recommendations to the Board on remuneration packages of the Directors and the senior management.

During the year ended 30 April 2017, the Remuneration Committee held 1 meeting, at which the Remuneration Committee reviewed the policy and structure of remuneration of the Directors and senior management. Apart from attending the above meeting, the members of the Remuneration Committee by passing of written resolutions made recommendation to the Board on granting of annual bonus to executive Directors and the renewal of the term of appointment of an independent non-executive Director with same remuneration level.

The Company has adopted a share option scheme on 18 October 2013 (the “Share Option Scheme”). The purpose of the Share Option Scheme is to enable the Group to grant options to the eligible participants as incentives or rewards for their contribution of the Group. Details of the Share Option Scheme are set out in the Directors’ Report. The emolument payable to Directors and senior management will depend on their respective contractual terms under service agreement/appointment letter and is fixed by the Board with reference to the recommendation of the Remuneration Committee, the performance of the Group and the prevailing market conditions.

The remuneration of the Directors and senior management of the Company for the year ended 30 April 2017, by band is set out below:

Remuneration Band Number of individuals
Nil to HK$1,000,000 9
HK$1,000,001 to HK$2,000,000 0
HK$2,000,001 to HK$3,000,000 1
Above HK$3,000,001 1

Details of the remuneration of Directors and senior management are set out in notes 9 and 10 to the consolidated financial statements.

CORPORATE GOVERNANCE COMMITTEE
The corporate governance committee (the “CG Committee”) comprises three independent non-executive Directors, namely Mr. Hu Ji Rong (as committee chairman), Mr. Wei Xiongwen and Mr. Zeng Shaoxiao.

Terms of reference of the CG Committee adopted by the Board are aligned with the code provisions set out in the CG Code.

The CG Committee is mainly responsible for developing and renewing the Company’s policies and practices on corporate governance to comply with the CG Code and other legal or regulatory requirements and making recommendations to the Board; as well as reviewing the Company’s disclosure in the Corporate Governance Report and relevant corporate governance matters.

During the year ended 30 April 2017, the CG Committee held 1 meeting, at which the CG Committee reviewed the Company’s policies and practices on corporate governance, the training and continuous professional development of Directors and the Company’s compliance with the CG Code.

AUDITORS’ REMUNERATION
During the year, the remunerations paid/payable to the Company’s auditors, HLB Hodgson Impey Cheng Limited, is set out as follows:

Services rendered Fee paid/payable  
RMB'000  
Audit services 1,392  
Non-audit services (Note) 9  
1,401  

Note: the non-audit services comprised tax advisory services.

COMPANY SECRETARY
The Company engaged an external professional company secretarial services provider, Uni-1 Corporate Services Limited (“Uni-1”), to provide compliance and full range of company secretarial services to the Group in order to assist the Group to cope with the changing regulatory environment and to suit different commercial needs.

Ms. Chan Pui Shan, Bessie (“Ms. Chan”), the representative of Uni-1, was appointed as the Company Secretary on 17 October 2015.

Mr. Cheng Kim Ping, Accounting Manager of the Company, is the primary point of contact at the Company for the Company Secretary.

According to the Rule 3.29 of the Listing Rules, Ms. Chan had taken no less than 15 hours of relevant professional training for the year ended 30 April 2017.

SHAREHOLDERS’ RIGHTS
The general meetings of the Company provide an opportunity for communication between the Shareholders and the Board. An annual general meeting of the Company shall be held in each year and at the place as may be determined by the Board. Each general meeting, other than an annual general meeting, shall be called a special general meeting.

Shareholders to convene a special general meeting
Shareholders may convene a special general meeting of the Company according to the provisions as set out in the Bye-laws and the Companies Act of Bermuda. The procedure shareholders can use to convene a special general meeting is set out in the documents entitled “Procedures for a Shareholder to Propose a Person for Election as a Director”, which is currently available on the Company’s website.

Putting enquiries by Shareholders to the Board
Shareholders may send written enquiries to the Company for the attention of the Company Secretary at the Company’s principal place of business in Hong Kong.

Procedures for putting forward proposals by Shareholders at general meeting
The number of members necessary for a requisition for putting forward a proposal at a general meeting shall be:

(a) any number of members representing not less than one-twentieth of the total voting rights at the date of the requisition; or

(b) not less than one hundred members.

A copy or copies of requisition signed by all requisitionists shall be deposited, with a sum reasonably sufficient to meet the Company’s expenses in giving notice of the proposed resolution or to circulate any necessary statement, at the Company’s registered office in the case of:

(i) a requisition requiring notice of a resolution, not less than six weeks before the meeting; and

(ii) any other requisition, not less than one week before the meeting.

The Company will verify the requisition and upon confirming that the requisition is proper and in order, the Board will proceed with the necessary procedures.

VOTING BY POLL
Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As such, all the resolutions set out in the notice of the forthcoming annual general meeting of the Company will be voted by poll.

CONSTITUTIONAL DOCUMENTS
There is no significant change in the Company’s constitutional documents during the year.

INVESTOR RELATIONS
The Company is committed to a policy of open and regular communication and reasonable disclosure of information to its Shareholders.

Information of the Company is disseminated to the Shareholders in the following manner:

  • Delivery of annual and interim reports to all Shareholders;
  • Publication of announcements on the annual and interim results on the websites of the Stock Exchange and the Company, and issue of other announcements and Shareholders’ circulars in accordance with the continuing disclosure obligations under the Listing Rules; and
  • The general meeting of the Company is also an effective communication channel between the Board and its Shareholders.

DIRECTORS’ RESPONSIBILITIES FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The Board acknowledges its responsibility to prepare the Company’s consolidated financial statements for each financial year which give a true and fair view of the state of affairs of the Group and the Company and of the results and cash flows of the Group for that year. In preparing the consolidated financial statements for the year ended 30 April 2017, the Board has selected suitable accounting policies and applied them consistently, made judgments and estimates that are prudent, fair and reasonable and prepared the accounts on a going concern basis.

The Directors are responsible for taking all reasonable and necessary steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors, having made appropriate enquiries, consider that the Group has adequate resources to continue in operational existence for the foreseeable future and that, for this reason, it is appropriate to adopt the going concern basis in preparing the consolidated financial statements.

INTERNAL CONTROL AND RISK MANAGEMENT
The Board’s Responsibilities for the Risk Management and Internal Control Systems
The Board acknowledges that it is responsible for the risk management and internal control systems and oversees such systems on an ongoing basis, while ensuring a review of the effectiveness of these systems of the Group being conducted at least annually. The scope of such review covers all material controls, including financial, operational and compliance controls. The Group’s risk management and internal control systems are designed to manage risks rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has delegated its responsibilities (with relevant authorities) of risk management and internal control to the Audit Committee, and management has provided a confirmation to the Audit Committee (and the Board) on the effectiveness of these systems for the year ended 30 April 2017.

Main Features of the Risk Management System The Company recognises that good risk management is essential for the long-term and sustainable growth of a business. The Group has established a governance structure and the major responsibilities of each role of the structure are summarized below:

Role Major Responsibilities
Board determines the business strategies and objectives of the Group, and evaluates and determines the nature and extent of the risks it is willing to take in achieving the Group’s strategic objectives;
oversees management in the design, implementation and monitoring of the risk management and internal control systems; and
oversees the Group’s risk management and internal control systems on an ongoing basis and ensures that the Company establishes and maintains appropriate and effective risk management and internal control systems.
Audit Committee reviews the effectiveness of the Group’s risk management and internal control systems at least annually, and such review should cover all material controls including financial, operational and compliance controls;
reviews the emerging risks of the Group annually, and the risk management and the internal controls in place to address those risks;
discusses the risk management and internal control systems with management of the Group to ensure that the management of the Group has performed its duty to have effective systems; and
considers major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and the management’s response to these findings.
Management designs, implements and assesses on an ongoing basis, the Group’s risk management and internal control systems;
gives prompt response to, and follow up on the investigation findings on risk management and internal control matters as delegated by the Board, on Audit Committee’s initiative or raised by the external risk management and internal control review advisor(s); and
provides confirmation to the Board and the Audit Committee on the effectiveness of the risk management and internal control systems.

Main Features of the Internal Control System
The Company has in place an internal control system which is compatible with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework. The framework enables the Group to achieve objectives regarding effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. The components of the framework are shown as follow:

Control Environment a set of standards, processes and structures that provide the basis for carrying out internal control across the Group.
Risk Assessment a dynamic and iterative process for identifying and analyzing risks to achieve the Group’s objectives, forming a basis for determining how risks should be managed.
Control Activities actions established by policies and procedures to help ensure that management directives to mitigate risks to the achievement of objectives are carried out.
Information and Communication internal and external communication to provide the Group with the information needed to carry out day-to-day controls.
Monitoring ongoing and separate evaluations to ascertain whether each component of internal control is present and functioning.

Process used to Identify, Evaluate and Manage Significant Risks

Identification identify ownership of risks, business objectives and risks that could affect the achievement of objectives.
Evaluation analyze the likelihood and impact of risks and evaluate the risk portfolio accordingly.
Management consider the risk responses, set up dedicated task force to consider relevant alleviating measures as and when necessary, ensure effective communication with the Group (including the Board) and on-going monitor the residual risks.

Process used to Review the Effectiveness of the Risk Management and Internal Control Systems and to Resolve Material Internal Control Defects
Review report of internal control and risk management systems is submitted to the Audit Committee and the Board annually. The Board, through the Audit Committee, performs a review on the effectiveness of the Group’s risk management and internal control systems, including, but not limited to, (i) the scope and quality of management’s ongoing monitoring of risks and of the internal control systems, (ii) the extent and frequency of communication of monitoring results with the Audit Committee and the Board which enables them to assess control of the Company and the effectiveness of risk management, (iii) significant control failings or weaknesses that have been identified, and (iv) the effectiveness of the Company’s processes for financial reporting and Listing Rules compliance.

The Company engaged an external advisory firm to conduct a review on the Group’s internal control environment for the year ended 30 April 2017 and assist the Group of the adoption and implementation of the Enterprise Risk Management systems. Results of the review were reported to the Audit Committee and the Board. Based on the findings and recommendations of the external advisory firm and confirmation of the management as well as the recommendation of the Audit Committee, the Board considered the risk management and internal control systems are effective and adequate. No significant areas of concern that might affect the financial, operational, compliance controls, and risk management functions of the Group were identified. The scope of such review covers the adequacy of resources, training programmes, budgets, qualifications and experience of staff of the Group’s accounting and financial reporting functions and their attitude against internal control of the Group. The Board will continue to work with the management to discuss and follow up on the status of remediation of the internal control weaknesses, if any, and to monitor the risks of the Group in the coming years.

Procedures and Internal Controls for the Handling and Dissemination of Inside Information
Certain measures have been taken from time to time to ensure that proper safeguards exist to prevent a breach of a disclosure requirement in relation to the Group, which include the following:

The access of information is restricted to a limited number of employees on a need-to-know basis. Employees who are in possession of inside information are fully conversant with their obligations to preserve confidentiality.
All employees are required to strictly adhere to the employment terms regarding the management of confidential information.
Code names are assigned to confidential projects so that any reference to them would not be linked to the projects themselves to minimize possibilities of unintentional leakage.
In addition, all employees are required to strictly adhere to the rules and regulations regarding the management of inside information, including that all employees who, because of his/her office or employment, are likely to be in possession of inside information in relation to the Company, are required to comply with the Model Code.

The Group complies with the requirements of the Securities and Futures Ordinance (“SFO”) and the Listing Rules. The Group discloses inside information to the public as soon as reasonably practicable unless the information falls within any of the safe harbours as provided in the SFO. Before the information is fully disclosed to the public, the Group ensures that the information is kept strictly confidential. If the Group believes that the necessary degree of confidentiality cannot be maintained or that confidentiality may have been breached, the Group would immediately disclose the information to the public. The Group is committed to ensure that information contained in the announcements or circulars of the Company is not false or misleading as to a material fact, or false or misleading through the omission of a material fact in view of presenting information in a clear and balanced way, which requires equal disclosure of both positive and negative facts.

INTERNAL AUDIT FUNCTION
The Company does not have an internal audit department. The Board has reviewed the need for an internal audit function and is of the view that in light of the size, nature and complexity of the business of the Group, as opposed to diverting resources to establish a separate internal audit department, it would be more cost effective to appoint external independent professionals to perform independent review of the adequacy and effectiveness of the risk management and internal control systems of the Group. Nevertheless, the Board will continue to review at least annually the need for an internal audit department.

 

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