B . Remuneration of Directors and Senior Management

B.1 The level and make-up of remuneration

Principle There should be a formal and transparent procedure for setting policy on executive directors' remuneration and for fixing the remuneration packages for all directors. No director should be involved in deciding his/ her own remuneration.

The Company has established a Remuneration Committee, comprising Mr. Song Lin, the Chairman of the Board, and two independent non-executive directors, namely Mr. Fong Ching, Eddy and Mr. Anthony H. Adams. Mr. Song Lin is the Chairman of the Remuneration Committee.

The terms of reference of the Remuneration Committee include the following:

1)     to make recommendations to the Board on the Company's policy and structure for remuneration of directors and senior management and on the establishment of a formal and transparent procedure for developing the policy on such remuneration;

2)     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;

3)     to review and approve performance-based remuneration by reference to corporate goals and objectives resolved by the Board from time to time;

4)     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 Company; and

5)      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.  

The Remuneration Committee held two meetings in 2005.

Deviation: Nil

Principle

Levels of remuneration should be sufficient to attract and retain the directors needed to run the Company successfully, but the Company should avoid paying more than is necessary for this purpose. A significant proportion of executive directors' remuneration should be structured so as to link rewards to corporate and individual performance.

The total remuneration of executive directors and senior management comprises three key components, namely basic salary, annual bonus and share options. The Company's policy is to determine executive directors' and senior managers' bonus based on the Company's and individual's performance for the year. The Company has also set up share option schemes to retain the best available personnel and to provide long-term incentive to employees and to ensure the interests of the executive directors, senior managers and staff are aligned with those of the shareholders.

A. Directors
B. Remuneration of Directors and Senior Management
C. Accountability and Audit
D. Delegation by the Board
E. Communication with shareholders