SOHO 中国 - Ir
Company Overview
SOHO China is China’s largest and the only pure prime office developer, which is also acclaimed in China and internationally for iconic, landmark design with a strong track record of profitability. As one of the earliest and most profitable industry leaders focused on central Beijing and Shanghai, SOHO China covers a full range of business of development, leasing, property management and property investment.
The Company has a development portfolio of 5.4 million square meters, above 3.0 million square meters completed. Shifting from “build to sell” to “build to hold” to seize the long-term value of its properties, the Company is holding 1.7 million square meters of prime office spaces in Beijing and Shanghai for investment.
Company Profile
Founded in 1995 by Chairman Pan Shiyi and CEO Zhang Xin, SOHO China focuses on developing and holding high-profile branded commercial properties in Beijing and Shanghai. The Company rolled out high-quality, innovative products in prime locations and translated the innovative designs into iconic real estate which possesses strong appeal to property investors and the local businesses and customer bases. SOHO China’s properties have already become landmark buildings in the city’s modern skyline. As the largest prime office developer in Beijing and Shanghai, SOHO China developed commercial property of 54 million square feet. In 2015, the Company launched SOHO 3Q, and now it has become the largest shared office community in China.
On October 8, 2007, SOHO China was successfully listed on the Stock Exchange of Hong Kong (Stock Code: 410), raising proceeds of USD 1.9 billion. It has the distinction of being Asia’s largest commercial real estate IPO as of today. The Company was also named as one of the "Most Admired Companies" in China by FORTUNE (China edition) Magazine for six times since 2006.
Chairman's Statement
Dear Friends,
During 2011, China’s real estate industry experienced unprecedented challenges and tests. Starting from January, a series of tightening policies were implemented. In particular, policies aiming to restrict purchases and prices extended from first-tier cities to more than 40 cities throughout the country. To further curb the currency liquidity, the People’s Bank of China raised the reserve requirement ratio (RRR) six times in a row and the RMB benchmark deposit and loan interest rates of financial institutions three times during the Year. The accumulative effects of various control policies became obvious and the transaction volume of properties dropped substantially during the second half of the Year. According to the figures announced by the CREIS, as compared with the same period in 2010, the overall transaction volume of real estate market of first-tier cities decreased by approximately 19.49% and the overall transaction volume of real estate market of the second-tier cities dropped by approximately 18.01% in 2011. This further tightened the capital of developers.
Under this stern condition, the Group witnessed that there were more companies starting to sell their high-quality assets in the market. These high-quality assets, including land and completed commercial properties, provided ample opportunities for the Group to enrich its land reserve. 2011 was a year of harvest for SOHO China. Supported by the prudent financial principles and healthy capital position, the Group had accomplished acquisitions with total amount exceeding RMB15 billion during the Period, marking a record high annual acquisition amount. The new land and projects acquired during the Year were all concentrated in superior locations with convenient transportation in Shanghai. Within merely two years, the Group has obtained 10 projects in Shanghai, including two in the prime precincts on the Bund. Thanks to these two prime properties, SOHO China will become the largest landlord on the Bund of Shanghai. Currently, the Group has accomplished balanced development between Beijing and Shanghai, and laid down solid foundation for further expansions in these areas. The successful expansion of SOHO China is not mere coincidence with more availability of land and projects resulting from mar it is, to a larger extent, attributable to the Group’s long-held stable and healthy financial principles and prudent acquisition strategies, which have kept the Group ready to seize any favorable opportunities.
Highly appreciated by the capital market, the Group successfully secured a syndicated loan amounting to US$605 million at a relatively low cost from 11 banks in mid-2011, while most developers worried about their capital conditions and funding channels. The abundant capital provided strong and solid support to the Group for future acquisitions, development and operations.
In regard to property sales, the Group achieved a total contract sales amount of approximately RMB10.9 billion in 2011. Though the commercial sector was not touched by any curbing measures applied to the residential sector, the Group did not have any new available-for-sale properties in the first half of the Year. There were three new projects launched in the second half of 2011, among which Danling SOHO was launched in July, with approximately 91% of the total area being sold out on the opening day and all offices were sold out, clinching sales of approximately RMB1.45 billion. Wangjing SOHO was launched in August with sales amounting to RMB2.6 billion within a week. Nevertheless, entering September, the market liquidity began to shrink, which affected the Group’s sales.
On the other hand, the Group has observed that demand for commercial properties in Beijing and Shanghai is very strong. According to the market data released by CB Richard Ellis, for the fourth quarter of 2011, the rent of prime offices in Beijing and Shanghai increased by approximately 50.8% and 16.9%, respectively year on year, recording a historical high rental level. Occupancy rate also surged at the same time with certain offices located in prime locations in Beijing and Shanghai nearly fully rented. The sizzling rental market once again proved that the value of commercial properties was well recognized by the market. Notwithstanding such huge demand, market supply was still limited, especially the supply for strata titled commercial properties.
The Group believes that once the liquidity loosens or market regains its confidence, the sales of commercial properties will quickly return, driven by the demand for commercial properties. Although the market liquidity remains tight, the Group anticipates that the situation will improve within this year. The Group has strong confidence in 2012 contract sales and is more prepared. Unlike in 2011, the Company is well equipped with sales projects in 2012. Currently, the total saleable amount of the projects is approximately RMB24 billion, and in the second half of 2012, the Group expects to obtain sale permits for another two projects (namely, Sky SOHO and SOHO Century Plaza), and the total saleable property amount for 2012 is expected to exceed RMB30 billion.
The Group believes that there will be more acquisition opportunities in 2012. The Group will continue to focus on the best commercial opportunities in Beijing, Shanghai and other first-tier cities. With RMB15.7 billion capital in hand and with SOHO China’s net cash position, SOHO China is still the only serious buyer.
The Company’s acquisition target for 2012 is RMB10 billion and the Group will adhere to its existing business model, make due and careful choices and continue to acquire assets with high quality to increase the value of the Company.
Innovation has always been the soul of SOHO China. We have been cooperating with world-renowned architects so as to create the most unique and functional buildings. In terms of project construction, we have applied advanced system and techniques. Specifically, we introduced the BIM system and apply it in the areas of design, construction and project management, thus enhancing efficiency and ensuring construction qualities through more effective cooperation between design, budgeting, procurement, construction and sales departments. Advanced techniques are indispensable for realizing innovative design, being well equipped with innovative idea and state-of-the-art technology makes our products become more unique and stylish.
Temporary difficulties and tests will not shake our confidence in and focus on commercial properties. SOHO China will utilize its advantages to seize market opportunities and create more material and spiritual wealth for the Company and the society through constant innovations and developments.
14 March 2012
Corporate Information
Executive Directors
Mr. Pan Shiyi (Chairman)
Mrs. Pan Zhang Xin Marita (Chief Executive Officer)
Ms. Yan Yan (President)
Ms. Tong Ching Mau (Chief Financial Officer)
Members of the Audit Committee
Sun Qiang Chang (Chairman)
Cha Mou Zing, Victor
Xiong Ming Hua
Members of the Nomination Committee
Pan Shiyi (Chairman)
Cha Mou Zing, Victor
Xiong Ming Hua
Principle Place of Business in Hong Kong
Times Square
1 Matheson Street
Causeway Bay
Hong Kong Branch Share Registrar and Transfer Office
Computershare Hong Kong Investor Services Limited
17th Floor Hopewell Centre
183 Queen&s Road East
PricewaterhouseCoopers
22/F, Prince’s Building
10 Chater Road
Principal Banker
Agricultural Bank of China Limited
Bank of China Limited
Bank of Communications Co., Ltd.
China Everbright Bank Company Limited
China Merchants Bank Corporation Ltd.
Industrial and Commercial Bank of China Ltd.
Standard Chartered Bank(Hong Kong) Ltd.
The Hong Kong and Shanghai Banking Corporation Limited
Independent non-executive Directors
Mr. Sun Qiang Chang
Mr. Cha Mou Zing, Victor
Mr. Xiong Ming Hua
Members of the Remuneration Committee
Cha Mou Zing, Victor (Chairman)
Sun Qiang Chang
Xiong Ming Hua
Authorised Representitives
Pan Zhang Xin Marita
Mok Ming Wai
Registered Office
Cricket Square
Hutchins Drive P.O. Box 2681
Grand Cayman, KY1-1111
Cayman Islands
Company Secretary&
Mok Ming Wai
Corporate Headquarters
11F, Section A
Chaowai SOHO
No. 6B Chaowai Street
Chaoyang District
Beijing 100020, China
Cayman Islands Principal Share Registrar and Transfer Office
Royal Bank of Canada Trust Company (Cayman) Limited
4th Floor, Royal Bank House
24 Shedden Road, George Town
Grand Cayman KY1-1110
Cayman Islands
Hong Kong Legal Advisor
Stephenson Harwood
18th Floor, United Centre
95 Queensway
Stock Code
Directors and Senior Management
Our Directors are appointed by ordinary resolutions of our Shareholders or by the Board of Directors to fill vacancies on the Board or to add to the existing Board. At each annual general meeting one-third (or, if the number is not a multiple of three, the number nearest to but not greater than one-third) of the Directors in office at the relevant time shall retire by rotation but are eligible for re-election and re-appointment.
Our Board of Directors is responsible and has general powers for the management and conduct of our business.
Under Cayman Islands law, each of our Directors owes fiduciary duties to the Company to act in good faith in what he considers is the best interests of the Company as a whole and his power must be exercised for a proper purpose.
The following table sets forth certain information concerning our Directors and executive officers.
Chief Executive Officer
Mrs. Pan Zhang Xin Marita
Mrs. Pan Zhang Xin Marita, aged 51, is an executive Director and the Chief Executive Officer of the Company. Ms. Zhang co-founded Redstone Industry Co., Ltd., the predecessor of the Company, in 1995 and has since led, together with her husband Mr. Pan Shiyi, the development of all of the Company’s projects.
Ms. Zhang was selected by the Davos World Economic Forum as a Young Global Leader in 2005, and her efforts to promote the development of architecture in Asia, earned her the Special Prize to an Individual Patron of Architectural Award at la Biennale di Venezia in 2002. Ms. Zhang has been listed repeatedly among the world’s most powerful women in business by publications including the Forbes Magazine, Fortune and the Financial Times Newspaper. Recognized as a key opinion leader in business, design and architecture, Ms. Zhang sits on the Council on Foreign Relations Global Board of Advisors and the Harvard University Global Advisory Council.
In 2005, Ms. Zhang and her husband Pan Shiyi established the SOHO China Foundation, a charity organization guided by the mission of advancing education as a means to alleviate poverty. In 2014, the SOHO China Foundation launched the SOHO China Scholarships, a USD100 million initiative supporting underprivileged Chinese students who wish to pursue education at leading international universities.
Ms. Yan Yan
Ms. Yan Yan, aged 53, is an executive Director and the Company’s President. She is responsible for the business development and overall management of the Company. Ms. Yan joined the Company in December 1996 and had acted as the Company’s Chief Operating Officer and Chief Financial Officer prior to her present position. Ms. Yan received a Bachelor of Civil Engineering degree from Tianjin University in 1986. She has over twenty years of relevant experience in the real estate development industry in China.
CHIEF FINANCIAL OFFICER
Ms. Tong Ching Mau
Ms. Tong Ching Mau, aged 47, is an executive Director and the Chief Financial Officer of the Company. Ms. Tong is responsible for financial management, investor relations and corporate finance of the Company. Ms. Tong has served the Company for more than ten years in total. Prior to joining the Company in 2002, Ms. Tong worked in the investment banking division of Credit Suisse First Boston in New York. Ms. Tong left the Company in 2014 and prior to rejoining the Company in 2016, Ms. Tong was the vice general manager of Red Star Macalline Group Corporation Ltd. Ms. Tong received a Master of Business Administration degree from Yale University, and a Master and a Bachelor degree of Economics from Fudan University in Shanghai.
Mr. Cha Mou Zing Victor
Mr. Cha Mou Zing Victor, aged 67, is an independent non-executive Director. He is the deputy chairman and managing director of HKR International Limited (Hong Kong Stock Code: 00480) and an alternate independent non-executive director of New world development Company Limited (Hong Kong Stock Code: 0017).
Mr Cha is the Chairman of both the Hong Kong Arts Festival and the Hong Kong - Japan Business Co-operation Committee of Hong Kong Trade Development Council. He is a board member of the trustee of the Cha Foundation, Executive Committee member of Qiu Shi Science and Technologies Foundation and trustee of the Sang Ma Trust Fund. The Hong Kong Polytechnic University conferred the title of University Fellowship to Mr. Cha in 2010 in recognition of his contributions to the university and the community. Mr. Cha graduated from Stanford University with an MBA degree and is a Sloan Fellow of the University. He also holds a Bachelor of Science degree from the University of Wisconsin.
Mr. XIONG Ming Hua
Mr. Xiong Ming Hua, aged 52, is an independent non-executive Director. Mr. Xiong is the founder and chairman of seven Seas Partners, a venture capital firm focusing on investing cross border technology companies in the United States and China. Mr. Xiong was the Former Chief Technology Officer for Tencent Holdings Limited (a company listed on the Hong Kong Stock Exchange, Stock Code: 700) from 2005 to 2013, where he was responsible for product strategy planning of the overall platform, new product innovation, research and development of core technologies, and management for engineering excellence. Previously he worked at Microsoft Corporation for 9 years as program management in Internet Explorer, Windows and MSN product groups, and as founding director of MSN China Development Center. Prior to that, Mr. Xiong worked as staff programmer of Internet Division of IBM Corporation in New York. Mr. Xiong received his Bachelor of Engineering Degree in Information System Engineering from National University of Defense Technology in 1987 and a Master of Science Degree in Information Retrieval from Chinese Defense Science and Technology Information Center in Beijing in 1990.
Vice President
Ms. Ni Kuiyang
Ms. Ni Kuiyang, aged 40, is our Vice President and is responsible for accounting and cash management of the Company. Ms. Ni joined the Company in July 2008 and since then has acted as our finance manager, finance director and Vice President. Ms. Ni Kuiyang received her Bachelor Degree in Accounting from China University of Petroleum in 1999 and is a CPA holder. Prior to joining the Company, Ms. Ni worked for a listed company and an asset management company. Ms. Ni has extensive experience in accounting and financial management.
Vice President
Mr. Qian Ting
Mr. Qian Ting, aged 40, is our Vice President and is responsible for property leasing of the Company. Mr. Qian joined the Company in October 2002 and has acted as the director of our leasing department. Mr. Qian received his Bachelor’s Degree in Trade and Economy from Renmin University of China in 2000. Mr. Qian has 17 years’ experience in property leasing in China.
Vice President
Ms. Xu Jin
Ms. Xu Jin, aged 45, is our Vice President and is responsible for property management of the Company. Ms. Xu joined the Company in February 2001 and since then has acted as director of human resources department, director of procurement department and Vice President. Ms. Xu received a Bachelor of Engineering Management degree from Beijing Wuzi University in 1994. She has over twenty years of relevant experience in the real estate development industry in China.
The Company is committed to upholding high standards of corporate governance which, it believes, is crucial to the development of the Company and safeguarding the interests of the Shareholders of the Company. The Company has adopted sound governance and disclosure practices, and is committed to continuously improving these practices and inculcating an ethical corporate culture.
Under the terms of reference, the duties of the Board in respect of corporate governance are as follows:
1. to develop and review the policies and practices on corporate governance of the G
2. to review and monitor the training and continuous professional development of Directors a
3. to review and monitor the Group’s policies and practices on compliance with legal and reg
4. to develop, review and monitor the code of conduct and compliance manual (if any) applicable to Dir and
5. to review the Company’s compliance with the Corporate Governance Code and disclosure in the corporate governance report of the Company.
In the opinion of the Directors, the Company had been in compliance with the code provisions of the Corporate Governance Code (the “Corporate Governance Code”) as set out in Appendix 14 to the Listing Rules during the Year.
COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS (THE “MODEL CODE”)
The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as the code of conduct for securities transactions carried out by the Directors. The Company had made specific enquiry to all Directors and all Directors confirmed that they had complied with the required standard as set out in the Model Code throughout the Year.
BOARD OF DIRECTORS
The Board is responsible for the leadership and control of the Company and is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs. Under the leadership of the Chairman, the Board is also responsible for approving and overseeing the overall strategies and policies of the Company, approving the annual budget and business plans, assessing the Company’s performance and supervising the work of the senior management.
The running of the day-to-day businesses of the Company is delegated by the Board to the management who is working under the leadership and supervision of the Board committees except that authority is reserved for the Board to approve interim and annual financial statements, dividend policy, annual budgets, business plan, and significant operational matters.
The Board currently comprises seven Directors, including four executive Directors, namely Mr. Pan Shiyi (Chairman), Mrs. Pan Zhang Xin Marita (Chief Executive Officer), Ms. Yan Yan and Ms. Tong Ching M and three independent non- executive Directors, namely Mr. Sun Qiang Chang, Mr. Cha Mou Zing, Victor and Mr. Xiong Ming Hua (details of their biographical information are set out in the section headed “Biographies of Directors and members of senior management” of this annual report).
Regular Board meetings are held at least four times a year (at quarterly intervals) and any ad hoc meeting will be held when necessary. At least fourteen days notice will be given to all the Directors prior to any regular Board meeting and any relevant materials to be presented to a Board meeting will be provided to Directors at least three days before such Board meeting. The Directors are appointed by Shareholders of the Company through ordinary resolutions or appointed by the Board to fill any casual vacancies on the Board or for new additions to the Board. At each annual general meeting, one-third (or, if the number is not a multiple of three, the number nearest to but not less than one-third) of the Directors for the time being shall retire from office by rotation but are eligible for re-election and re-appointment.
The Chairman of the Board, Mr. Pan Shiyi, is the husband of Mrs. Pan Zhang Xin Marita, an executive Director and the Chief Executive Officer. Save as disclosed above, the Board members have no financial, business, family or other material/relevant relationships with each other.
The Board is established in accordance with the provisions of Rules 3.10 and 3.10A of the Listing Rules. Of the three independent non-executive Directors appointed, at least one or more are equipped with financial expertise and the number of independent non-executive Directors represented at least one-third of the Board.
The Board’s composition demonstrates a balance of core competence with regard to the business of the Company, so as to provide effective leadership and the required expertise to the Company.
Liability insurance for Directors and senior management officers was maintained by the Company with coverage for any legal liabilities which may arise in the course of performing their duties.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The Chairman of the Board and the Chief Executive Officer are currently two separate positions held by Mr. Pan Shiyi and Mrs. Pan Zhang Xin Marita respectively with clear distinction in responsibilities. The Chairman of the Board is responsible for the management and leadership of the Board to formulate overall strategies and business development directions for the Company, to ensure adequate, complete and reliable information is provided to all Directors in a timely manner, and to ensure that issues raised at the Board meetings are explained appropriately. The Chief Executive Officer is responsible for the day-to-day management of the business of the Company, implementation of the policies, business objectives and plans set by the Board, and is accountable to the Board for the overall operation of the Company.
INDEPENDENT NON-EXECUTIVE DIRECTORS
The independent non-executive Directors were appointed for a term of three years, subject to retirement by rotation at the annual general meeting and being eligible, to offer themselves for re-election.
Pursuant to the guidelines provided in Rule 3.13 of the Listing Rules, the Company has received the confirmation of independence from each of the independent non-executive Directors, and thus the Board considers such Directors to be independent persons. The Board believes that the independent non-executive Directors are able to offer independent opinions on the Company’s development strategy, risk management and management process, etc. so that the interests of the Company and all Shareholders will be taken into consideration and duly safeguarded.
Board meetings
During the Year, five Board meetings were held and below is the attendance of each of the Directors at the Board meetings:
Attendance/No. of Meetings
Executive Directors
Pan Zhang Xin Marita
Ching Mau (appointed on 18 May 2016)
Independent non-executive Directors
Qiang Chang
Mou Zing, Victor
the Board meetings, the senior management of the Company provided each Director
with timely information regarding the business activities and developments of
the Company and met with independent non-executive Directors to seek their
views on the business development and operational matters of the Company.
PROVISION AND USE OF INFORMATION
of all Board meetings and meetings of the Board committees are kept by
designated secretaries, and will be available for inspection by any Director
after giving reasonable notice.
Directors are entitled to receive advice and services from the Company
Secretary to ensure due compliance with the terms of reference of the Board.
o Directors
may have recourse to seek independent advice from professionals as appropriate
and such fees incurred shall be borne by the Company.
AUDIT COMMITTEE
Audit Committee comprises three independent non-executive Directors, namely Mr.
Sun Qiang Chang, Mr. Cha Mou Zing, Victor and Mr. Xiong Ming Hua. The Audit
Committee is chaired by Mr. Sun Qiang Chang, who has the appropriate accounting
and financial management expertise as required under Rule 3.10(2) of the
Listing Rules.
Audit Committee is authorized by the Board to review the relevant financial
reports and to give recommendations and advices, its duties include:
1. Relationship with the Company’s auditors
The duty to make recommendations
to the Board on the appointment, re-appointment or removal o to review and monitor the external auditors’ independence and
objectivity and the effectiveness
to develop and
implement policies on the engagement of the external auditors for provi to meet with the external auditors and discuss matters relating
to the audit, if necessary, in the absence of the management of the Company.
2. Review of financial information of the Company
The duty to monitor the
integrity of financial statements of the Company as set out in the Company’s
annual reports and accounts and half-yearly reports, and to review any
significant views of financial reporting contained in them.
3. Monitor the Company’s financial reporting system, risk management and internal control systems
Each of the Company’s
operational departments has established internal audit and supervisory
functions for its operating procedures. The Audit Committee will also review
the financial control, internal control and risk management systems to ensure
adequate resources, including that sufficient staff with qualifications and
experience in accounting and financial reporting, as well as training programs
and budgets are allocated to operate the internal control procedures
effectively.
In 2016, two meetings were held
by the Audit Committee and below is the attendance of each of the committee
Committee Members
Attendance/No. of Meetings
Qiang Chang (Chairman)
Mou Zing, Victor
Audit Committee had reviewed the internal audit plan report submitted by the
internal audit department and the risk management and internal control systems,
and recommended the Board on risk management and internal control matters. The
Audit Committee has also reviewed the adequacy of resources, the interim
results for the period ended 30 June 2016 and the audited consolidated annual
results of the Company for the year ended 31 December 2016 and considered that
the Company had complied with all applicable accounting standards and
requirements and had made adequate disclosure.
Audit Committee has reviewed the auditors’ fee for the year 2016, and
recommended the Board to re-appoint PwC as the auditors of the Company for the
year 2017, which is subject to the approval of shareholders of the Company at
the forthcoming AGM.
REMUNERATION COMMITTEE
remuneration committee of the Company (the “Remuneration Committee”) comprises
three independent non-executive Directors, namely Mr. Cha Mou Zing, Victor, Mr.
Sun Qiang Chang, and Mr. Xiong Ming Hua. The Remuneration Committee is chaired
by Mr. Cha Mou Zing, Victor. The Remuneration Committee is mainly responsible
for determining remuneration packages of individual executive Directors and
senior management of the Company, appraising the performance of the executive
Directors and senior management of the Company and making recommendations for
their remuneration arrangements, as well as for assessing and making
recommendations for staff benefits to the Board.
the Year, one meeting was held by the Remuneration Committee and below is the
attendance of each of the committee members:
Committee Members
Attendance/No. of Meeting
Mou Zing, Victor (Chairman)
Qiang Chang
complete record of the minutes of the Remuneration Committee meetings is kept
by the Company Secretary. The Remuneration Committee had reviewed the Company’s
remuneration policies, the terms of the service contracts and the performance
of all executive Directors and the senior management. In the opinion of the
Remuneration Committee, the remuneration payable to all executive Directors and
the senior management is in accordance with the terms of the service contracts,
such remuneration is fair and reasonable, and does not create any additional
burden for the Company.
Remuneration
details of each Director for the year of 2016 are set out in the section headed
“Directors’ remuneration” of the Directors’ Report and Note 31 to the audited
consolidated financial statements.
NOMINATION COMMITTEE
nomination committee of the Company (the “Nomination Committee”) comprises two
independent non-executive Directors and one executive Director, namely Mr. Pan
Shiyi, Mr. Cha Mou Zing, Victor and Mr. Xiong Ming Hua. The committee is
chaired by Mr. Pan Shiyi. Details of the authorities and duties of the
Nomination Committee are set out in its terms of reference. Its roles are
highlighted as follows:
to review the structure, size and composition
(including the skills, knowledge and experience) of the Board at least annually
and make recommendations to the Board on any proposed changes to the Board to
complement the Company’
to identify individuals suitably qualified to
become members of the Board and select or make recommendations to the Board on
the selection of individuals nominat
to assess the independence of the independent
non-executive D
to make recommendations to the Board on the
appointment or re-appointment of Directors and succession planning for
Directors in particular the chairman and chief executive of the C
to conform to any requirement, direction, and
regulation that may from time to time be prescribed by the Board or contained
in the constitution of the Company or imposed by the Listing Rule and
to ensure the chairman of the Committee, or in
the absence of the chairman, another member of the Committee or failing this
his duly appointed delegate, to be available to answer questions at the annual
general meeting of the Company.
the Year, two meetings were held by the Nomination Committee and below is the
attendance of each of the committee members:
Committee Members
Attendance/No. of Meeting
Shiyi (Chairman)
Mou Zing, Victor
the Year, the Nomination Committee had discussed the structure, number of
employees and composition of the Company.
PROCEDURE FOR NOMINATION OF DIRECTORS
When there is a vacancy in the Board, the
Board evaluates the balance of skills, knowledge and experience of the Board,
and identifies any special requirements for the vacancy (e.g. independence
status in the case of an independent non-executive Director).
Prepare a description of the role and
capabilities required for the particular vacancy.
Identify a list of candidates through
personal contacts/recommendations by Board members, senior management, business
partners or investors.
Arrange interview(s) with each candidate for
the Board to evaluate whether he/she meets the established written criteria for
nomination of Directors. One or more members of the Board will attend the
interview.
Conduct verification on information provided
by the candidate.
Convene a Board meeting to discuss and vote
on which candidate to nominate or appoint to the Board.
CRITERIA FOR NOMINATION OF DIRECTORS
1. Common criteria for all Directors
Character and integrity.
Willingness to assume board fiduciary
responsibilities.
Satisfying the present needs of the Board for
particular experience or expertise.
Relevant experience, including experience at
the strategy/policy setting level, high level managerial experience in a
complex organization, industry experience and familiarity with the products and
processes used by the Company.
Significant business or public experience
relevant and beneficial to the Board and the Company.
Breadth of knowledge about issues affecting
the Company.
Ability to objectively analyse complex
business problems and exercise sound business judgement.
Ability and willingness to contribute special
competencies to Board activities.
Fit into the Company’s culture.
2. Criteria applicable to non-executive Directors/independent non-executive Directors
Willingness and ability to make sufficient
time commitment to the affairs of the Company in order to effectively perform
the duties of a Director, including attendance at and active participation in
Board and Board committee meetings.
Accomplishments of the candidate in his/her
Outstanding professional and personal
reputation.
The candidate’s ability to meet the
independence criteria for Directors under the Listing Rules.
BOARD DIVERSITY POLICY
Company adopted the Board Diversity Policy (the “Policy”) on 20 August 2013.
Policy sets out the approach to achieve diversity on the Board, details of
which are set out below.
Policy Statement
Company is committed to equality of opportunity in all aspects of its business
and does not discriminate on the grounds of race, gender, disability,
nationality, religious or philosophical belief, age, sexual orientation, family
status or any other factors.
Company continuously seeks to enhance the effectiveness of its Board and to
maintain the highest standards of corporate governance and recognizes and
embraces the benefits of having a diverse Board. The Company believes that a
diversity of perspectives can be achieved through taking into account a range
of factors, including but not limited to gender, age, cultural and educational
background, ethnicity, professional experience, skills, knowledge and length of
service. The Company sees promoting diversity of perspectives at the Board
level as an essential element in supporting the achievement of its business and
strategic objectives and maintaining its sustainable development.
Measurable Objectives
Nomination Committee has primary responsibility for identifying qualified
candidates to become members of the Board and, in carrying out this
responsibility, will give adequate consideration to this Policy. Board
appointments will continue to be made on the basis of merit and candidates will
be considered against objective criteria, with due regard for the benefits of
diversity on the Board.
DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Directors are responsible for supervising the preparation of the annual
accounts, which give a true and fair view of the state of affairs, the
operating results and the cash flows of the Group for the Year. In preparing
the accounts for the year ended 31 December 2016, the Directors have selected
suitable accounting policies and adopted appropriate accounting standards.
Based on judgements and estimates that are prudent and reasonable, the
Directors had ensured that the accounts are prepared on the going concern
basis. The Directors have confirmed that the consolidated financial statements
of the Group are prepared in compliance with the statutory requirements and
appropriate accounting standards.
INTERNAL CO***OL AND RISK MANAGEMENT
Board acknowledges its responsibility for overseeing the risk management and
internal control systems of the Group and reviewing their effectiveness at
least annually through the Audit Committee. The Audit Committee assists the
Board in fulfilling its oversight and corporate governance roles in the Group’s
financial, operational, compliance, risk management and internal controls, and
the resourcing of the finance and internal audit functions.
Group has established an organizational structure with defined levels of
responsibility and reporting procedures. The Risk Management and Compliance
department and the Group Internal Audit assist the Board and/or the Audit
Committee in the review of the effectiveness of the Group’s risk management and
internal control systems on an ongoing basis. The Directors through the Audit
Committee are kept regularly apprised of significant risks that may impact on
the Group’s performance.
Appropriate
policies and controls have been designed and established to ensure that assets
are safeguarded against improper use or disposal, relevant rules and
regulations are adhered to and complied with, reliable financial and accounting
records are maintained in accordance with the relevant accounting standards and
regulatory reporting requirements, and key risks that may impact on the Group’s
performance are appropriately identified and managed. Nevertheless, the systems
and internal controls can only provide reasonable and not absolute assurance
against material misstatement or loss, as they are designed to manage, rather
than to eliminate the risk of failure to achieve business objectives.
Group’s risk management framework is guided by the “Three Lines of Defense”
model as shown below:
Risk Management and Compliance department, which co-ordinates enterprise risk management
activities and reviews significant aspects of risk management for the Group,
reports to the Audit Committee at each regularly scheduled meeting including,
amongst other things, significant risks of the Group and the appropriate
mitigation and/or transfer of identified risks. The operating units of the
Group, as risk owners, identify, evaluate, mitigate and monitor their own
risks, and report such risk management activities to the Risk Management and
Compliance department on a half-yearly basis.
Group Internal Audit reports to the Audit Committee at each regularly scheduled
meeting throughout the year the results of their activities during the
preceding period pertaining to the adequacy and effectiveness of internal
controls, including but not limited to, any indications of failings or material
weaknesses in those controls.
Group Internal Audit adopts a risk-and-control-based audit approach. The annual
work plan of the Group Internal Audit covers major activities and processes of
the Group’s operations, businesses and service units. Special reviews are also
performed at the management’s request. The results of these audit activities
are communicated to the Audit Committee. Audit issues are tracked, followed up
for proper implementation, and their progresses are reported to the Audit
Committee periodically.
Group Internal Audit provides independent assurance to the Board, the Audit
Committee and the executive management of the Group on the adequacy and
effectiveness of internal controls for the Group. The Head of Group Internal
Audit reports directly to the Chairman of the Audit Committee, the Chief
Executive Officer and the Chief Financial Officer of the Group.
senior management of the Group, supported by the Risk Management and Compliance
department and the Group Internal Audit, is responsible for the design,
implementation and monitoring of the Group’s risk management and internal
control systems, and for providing regular reports to the Board and/or the
Audit Committee on the effectiveness of these systems.
Group adopts the principles of ISO
Risk Management - Principles and
Guidelines as its approach to manage its business and operational risks. The
following diagram illustrates the key processes used to identify, evaluate and
manage the Group’s significant risks:
Group has adopted policies and procedures for assessing and, where prudent,
improving the effectiveness of its risk management and internal control
systems, including requiring the executive management of the Group to regularly
assess and at least annually to personally certify that such matters are
appropriate and functioning effectively in the belief that this will enhance
the corporate governance of the Group and its business practices in the future.
Group has embedded its risk management and internal control systems into the
core operating practices of the business. On an ongoing basis, the respective
operating units of the Company will review and assess the status of potential
risks which may impact on their ability to achieve their business objectives
and/or those of the Company. This review process includes assessment as to
whether the existing risk management and internal control systems continue to
remain relevant, adequately address potential risks, and/or should be
supplemented. The results of these reviews are recorded in the operating units’
risk registers for monitoring and incorporated into the Group’s consolidated
risk register for analysis of potential strategic implications and for regular
reporting to the senior management and Directors of the Company.
Audit Committee has established and oversees a whistleblower policy and a set
of comprehensive procedures whereby employees, customers, suppliers and other
concerned parties can report any actual or suspected occurrence of improper
conduct involving the Company, and for such matters to be investigated and
dealt with efficiently in an appropriate and transparent manner. The Chairman
of the Audit Committee has designated the Head of Group Internal Audit to
receive on his behalf any such reports, to oversee the conduct of subsequent
investigations, and to provide information, including recommendations arising
from any investigations to them for consideration by the Audit Committee.
Group regulates the handling and dissemination of inside information as set out
in the Corporate Responsibility Policy and various subsidiary procedures to
ensure inside information remains confidential until the disclosure of such
information is appropriately approved, and the dissemination of such
information is efficiently and consistently made.
2016, the Risk Management and Compliance department has worked closely with the
operating units, senior management, and the Directors to enhance the Group’s
risk management and internal control systems. Such activities included, amongst
other matters, increasing the number of training session
further standardization of risk reporting language, classification, more closely aligning the assessment of internal controls with
t and increasing the depth and frequency of interaction
with the designated Directors on the Group’s risk management and internal
control systems’ design, operation, and findings. The Risk Management and
Compliance department has presented update reports to the Board and the Audit
Committee on the monitoring of the risk management and assisted the Directors
in the review of the effectiveness of the risk management and internal control
systems of the Group during the Year.
2016, the Group Internal Audit conducted selective reviews of the effectiveness
of the risk management and internal control systems of the Group over
financial, operational and compliance controls with emphasis on information
technology and security, data privacy and protection, business continuity
management and procurement. Additionally, the heads of major business and
corporate functions of the Group were required to undertake control self-assessments
of their key controls. These results were assessed by the Group Internal Audit
and reported to the Audit Committee, which then reviewed and reported the same
to the Board. The Audit Committee and the Board were not aware of any areas of
concern that would have a material impact on the financial position or results
of operations of the Group and considered the risk management and internal
control systems to be generally effective and adequate including the adequacy
of resources, staff qualifications and experience, training programs and budget
of the accounting, internal audit and financial reporting functions.
addition to the review of the risk management and internal control systems
undertaken within the Group, the external auditors also assessed the adequacy
and effectiveness of certain key risk management and internal controls as part
of their statutory audits. Where appropriate, the external auditors’
recommendations are adopted and enhancements to the risk management and
internal controls will be made.
AUDITORS’ REMUNERATION
is the independent external auditors of the Company. The remuneration amounts
paid and payable by the Company to PwC for their services rendered for the year
ended 31 December 2016 are set out below:
Services rendered
Fees paid/payable
services for 2016
RMB4.00 million
Non-audit services:
　　Hong Kong and Macau tax compliance service
RMB0.18 million
　　Due diligence services
Environment, Social and Governance compliance
RMB0.28 million
EFFECTIVE COMMUNICATION WITH THE INVESTMENT COMMUNITY
Company attaches great importance to effective and close communications with
investors. The investor relations team of the Company seeks to provide the most
efficient and effective channel for our Shareholders, bondholders and the
investment community to gain information about the Company. In addition to the
regular interim and annual results announcements and daily communicates through
emails and phone calls, the investor relations team also takes frequent and
active participation in global investment conferences.
the Year, we attended more than ten global investor conferences held in
Beijing, Shanghai, Hong Kong and Singapore, meeting institutional investors
from global investment community and providing update of the Company. We took
tens of times investors/analysts site visits, including visiting Fuxing SOHO,
Bund SOHO, Guanghualu SOHO II and Wangjing SOHO, and also our SOHO 3Q visits in
Beijing and Shanghai. In March and August 2016, the Company arranged road shows
to visit investors spreading across the United States, the United Kingdom,
Singapore and Hong Kong.
the Year, the Company held the 2016 AGM on 18 May 2016 and an extraordinary
general meeting on 27 September 2016 (the “2016 EGM”) and below is the
attendance of each Director:
Attendance/No. of Meeting
2016 AGM&&&&&&&&&&2016 EGM
Executive Directors
Mr. Pan Shiyi
Mrs. Pan Zhang Xin Marita
Ms. Yan Yan
Ms. Tong Ching Mau (appointed on 18 May 2016)
Independent Non-Executive Directors
Mr. Sun Qiang Chang
Mr. Cha Mou Zing, Victor
Mr. Xiong Ming Hua
2016 AGM provided an ideal chance for communication between the Board and the
Shareholders of the Company to consider the declaration and payment of special
dividend and re-election of Ms. Tong Ching Mau as executive Directors and the
Chief Financial Officer.
2016 EGM was convened by the Board and held to consider the declaration and
payment of special dividend.
COMPANY SECRETARY
Company engages Ms. Mok Ming Wai, a director of KCS Hong Kong Limited, as its
Company Secretary. Her primary corporate contact person at the Company is Ms.
Tong Ching Mau, the executive Director and Chief Financial Officer of the Company.
In compliance with rule 3.29 of the Listing Rules, Ms. Mok, has undertaken no
less than 15 hours of relevant professional training during the Year.
SHAREHOLDERS’ RIGHTS
Convening of extraordinary general meeting and putting forward proposals
the articles of association of the Company, any one or more shareholders
holding at the date of deposit of the requisition not less than one-tenth
(1/10) of the paid up capital of the Company which carries the right of voting
at general meeting can require an extraordinary general meeting (an “EGM”) to
be called by the Board for the transaction of any business specified in such
requisition. The procedures for shareholders to convene and put forward
proposals at an EGM are stated as follows:
The requisitionist(s) should sign a written
request stating the objects of the meeting to be convened, and deposit the same
at the principal place of business of the Company in Hong Kong situated at
36/F, Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong for
the attention of the Company Secretary.
Where, within 21 days from the date of deposit
of the requisition, the Directors do not proceed to convene an EGM, the
requisitionist(s) himself (themselves) may convene the general meeting in the
same manner, as that in which meetings may be convened by the Board, and all
reasonable expenses incurred by the requisitionist(s) as a result of the
failure of the Board shall be reimbursed to the requisitionist(s) by the
Enquiries to the Board
Shareholders
of the Company who intend to put forward their enquiries about the Company to
the Board may email their enquiries to .
Amendments to the Company’s memorandum and articles of association
was no significant change in the Company’s constitutional documents during the
TRAINING FOR DIRECTORS
Company will provide a comprehensive, formal and tailored induction to each
newly appointed Director on his or her first appointment in order to enable him
or her to have an understanding of the business and operations of the Company
and be fully aware of his or her responsibilities and obligations under the
Listing Rules and relevant regulatory requirements.
the Directors namely Mr. Pan Shiyi, Mrs. Pan Zhang Xin Marita, Ms. Yan Yan, Ms.
Tong Ching Mau, Mr. Sun Qiang Chang, Mr. Cha Mou Zing, Victor and Mr. Xiong
Ming Hua were provided with regular updates on the Group’s business,
operations, and financial matters, as well as regulatory updates on applicable
legal and regulatory requirements. In addition, all Directors also participated
in other courses relating to the roles, functions and duties of a listed
company director or further enhancements of their professional development by
way of attending training courses or via on-line aids or reading relevant
materials.
SOHO China Ltd.
Chaowai SOHO, Building A, Floor 11
6B Chaowai Street, Chaoyang District
Beijing 100020, China
Tel: 400-815-9888
Fax: (86 10)