A . Directors
A.1 The Board
Principle
The Board should assume responsibility for leadership and control of the Company and be collectively responsible for promoting its success by directing and supervising the Company's affairs. Directors should take decisions objectively in the interests of the Company.
The Board is responsible for the Company's system of corporate governance, and is ultimately accountable for the Company's activities, strategies and financial performance.
The responsibilities of the Board include the following:
1) determine the strategies, objectives, policies, and business plans of the Company and supervise the execution of the Company's strategies;
2) supervise and control the operating and financial performance of the Company, and set appropriate risk control policies and procedures to ensure that the strategic objectives of the Company are fully implemented;
3) monitor the performance of the senior management and set appropriate remuneration of senior members of management; and
4) perfect the corporate governance structure in order to enhance communication with shareholders.
The Company has in place internal guidelines setting forth matters that require the Board's approval. Under the guidelines, development of new power plants, expansion of existing power plants and acquisition of power plants and related business and assets, as well as all commitment to term loans, among others, require the approval of the Board.
The Board is supported by four committees. Each committee has its own responsibilities, powers and functions. The chairmen of respective Committees report to the Board regularly and make recommendations on matters discussed when appropriate.
The directors' attendances at the meetings of the Board and Board Committees held in the year of 2005 are as shown below:
In accordance with the recommended best practices, the Company has arranged insurance cover in respect of legal action against its directors. The principles, procedures and arrangements set out in A.1.1 to A.1.8 are adopted by the Board and the Board Committees. Deviation: Nil The Company has fully complied with the recommended best practices.
A.2 Chairman and Chief Executive Officer
Principle
The roles of Chairman and Chief Executive Officer should be separates and should not be performed by the same individual in order to ensure that there is a balance of power and authority and that power will not be concentrated in any one individual.
The division of responsibilities between the Chairman and the Chief Executive Officer has been clearly established and set out in writing.
The Chairman of the Board of the Company is Mr. Song Lin, who is responsible for providing leadership for the Board. His duties are mainly to ensure the effective operation of the Board, and also to ensure the establishment of and compliance with the corporate governance practices and procedures. The Chairman is also responsible for ensuring that appropriate procedures are adopted to guarantee effective communications with shareholders, and that the shareholders' opinions are circulated among all Board members.
The Chief Executive Officer of the Company is Mr. Wang Shuai Ting, who is responsible for managing the Company's business and coordinating overall business operations, implementing major strategies approved by the Board and making day-to-day operation decisions.
None of the members of the Board has any connections (including financial, business, family relationship and other material/related relationships) with each other (including between the Chairman and the Chief Executive Officer).
Deviation: Nil
A.3 Composition of the Board
Principle
The Board should have a balance of skills and experience appropriate for the requirements of the business of the Company. A balanced composition of executive directors and non-executive directors helps to ensure the independence of the Board. The Board should have at least 3 independent non-executive directors, representing at least one-third of the Board.
The Board currently consists of 11 directors, of whom 6 are executive directors, 1 is non-executive director and 4 are independent non-executive directors.
Set out below are details of the composition of the Board and the Committees:
Note:
E : Executive Director
NE : Non-executive Director
ID : Independent Non-executive Director
The Company posts the latest membership of the Board on its website (www.cr-power.com), in which roles and responsibilities of the directors are set out and whether they are independent non-executive directors are noted.
Each member of the Board has different background and professional abilities. Each of them is wellexperienced in his/her respective area such as development, construction, operation as well as management of power plants, capital markets and financial management. The Company has four independent nonexecutive directors, representing at least one-third of the Board. The number of independent non-executive directors has met the code provisions. Mr. Fong Ching, Eddy is the independent non-executive director with appropriate professional qualifications as required under Listing Rules and heads the Audit Committee, which comprises only independent non-executive directors. Brief biographies of Board members are disclosed on page 16 to page 18 of this Annual Report.
Deviation: Nil
A.4 Appointments, re-election and removal of Board members
Principle
There should be a formal, considered and transparent procedure for the appointment of new directors to the Board. There should be plans in place for orderly succession for appointments to the Board. All directors should be subject to re-election at regular intervals.
The Company has established a nomination committee with specific written terms of reference. The Nomination Committee is mainly composed of independent non-executive directors. Currently, the Nomination Committee comprises three directors, namely Mr. Wang Shuai Ting as the Chairman, and Mr. Anthony H. Adams and Mr. Wu Jing Ru as members.
The main role of the Nomination Committee is to make sure the process of appointments and reappointments of the Board members are transparent and to assess effectiveness of the Board as a whole and the contribution of individual director to the effectiveness of the Board.
The responsibilities of the Nomination committee (as set out in the Company's website: www.cr-power.com) are as follows:
1) to regularly review the structure, size and composition (including skills, knowledge and experience) of the Board and make recommendations to the Board in relation to any proposed changes;
2) to identify individuals suitably qualified to become board members and select or make recommendations to the Board on the selection of individuals nominated for directorships;
3) to evaluate the independence of independent non-executive directors; and
4) to evaluate the performance of directors and make recommendations to the Board in respect of the appointment or re-appointment of directors and succession planning for directors in particular the Chairman and CEO.
The Chairman of the Committee reports the findings and recommendations of the Committee to the Board after each meeting.
In accordance with Article 120 of the Company's Articles of Association, one-third of the directors, including executive directors, non-executive directors as well as independent non-executive directors, retire and being eligible, offer themselves for re-election in the forthcoming annual general meeting of the Company.
Four of the executive directors of the Company, namely Mr. Wang Shuai Ting, Mr. Shen Zhong Min, Mr. Tang Cheng and Mr. Zhang Shen Wen, have each entered into a three-year service contract with the Company commencing from 22 August 2003.
The independent non-executive directors of the Company, namely Mr. Fong Ching, Eddy, Mr. Anthony H. Adams, and Mr. Wu Jing Ru were appointed for a term of three years commencing from 22 August 2003.
During 2005, the Nomination Committee evaluated the effectiveness of the Board as a whole and nominated Mr. Chen Ji Min and Ms. Wang Xiao Bin to be an independent non-executive director and executive director respectively and made its recommendation to the Board.
Mr. Chen Ji Min has been appointed as an independent non-executive director and Ms. Wang Xiao Bin has been appointed as an executive director of the Company with effect from 13 February 2006. There is no service agreement entered into between Mr. Chen, Ms. Wang and the Company, respectively. Pursuant to the Articles of Association of the Company, Mr. Chen and Ms. Wang will hold office until the next annual general meeting of the Company and will then be eligible for re-election.
Deviation: Nil
A.5 Responsibilities of Directors
Principle
Every director is required to keep abreast of his/her responsibilities as a director of the Company and of the conduct, business activities and development of the Company. Non-executive directors have the same duties of care and skill and fiduciary duties as executive directors.
Every newly appointed director of the Company receives a compreh | 
