ESR AR 2019 EN

Corporate Governance Report Model Code for Securities Transactions The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (“ Model Code ”) contained in Appendix 10 to the Listing Rules as its own code of conduct regarding securities transactions of the Company by Directors. The Company has adopted a code of conduct (“ Code of Conduct and Business Ethics ”) regarding all Directors’, officers and employees’ securities transactions on terms no less exacting than the required standard set out in the “Model Code for Securities Transactions by Directors of Listed Issuers” (“ Model Code ”) in Appendix 10 of the Listing Rules. Specific enquiries were made of all Directors, and all Directors confirmed that they had complied with all required standard set out in the Model Code during the Relevant Period. Responsibilities, Accountabilities and Contributions of the Board and Management The Company is governed by the Board, which is responsible for the leadership and control of the Company. The Board is collectively responsible for promoting the success of the Company by directing and supervising its affairs. The Board’s functions and duties include (without limitation) to the following: • Providing strategic directions in the business development of the Group and scrutinising the Group’s performance in achieving its operational and financial goals and objectives • Making all major decisions, including but not limited to those decisions affecting the financial results, notifiable and connected transactions, dividend policies and information disclosure, of the Group • Convening general meetings and reporting the work results to the Shareholders • Devising policies for, and reviewing and monitoring the implementation of, the risk management and internal control systems and other policies of the Group • Overseeing and reviewing the environment, social and governance issues of the Group • Performing the corporate governance functions (as further explained in “Corporate Governance Functions” below) • Exercising other power, duties and functions as conferred by applicable laws, the Listing Rules and the Articles of Association of the Company Day-to-day management and execution of the operations of the Group are delegated to the Executive Directors and senior management team of the Company, whose performance are periodically reviewed by the Board. The Board also delegated certain powers to the Audit Committee, the Remuneration Committee and Nomination Committee, the details of which are set out below. The Board may also from time to time delegate any of its powers to committees as appropriate. The Board has established the Investment Strategy Committee consisting of certain directors and senior management to identify business directions and strategies, review and provide to the Board with investment and divestment strategy and prepare the annual budget for submission to the Board for approval. Board Committees Audit Committee The Audit Committee of the Company was established by a Board resolution passed on 20 May 2019. The terms of reference are published on the websites of the Company and the Stock Exchange. The main functions and duties of the Audit Committee include: (a) making recommendations to the Board on the appointment, re-appointment and removal of the external auditor; (b) reviewing the Company’s financial information and reporting system; and (c) oversight of the Company’s risk management and internal control systems, including the whistleblowing arrangement for employees, customers and suppliers to raise concerns about possible improprieties in any matter related to the Company. The Audit Committee comprises five Directors, including two Non-executive Directors, namely Mr Joseph Raymond Gagnon and Mr Ho Jeong Lee, and three Independent Non-executive Directors, namely Mr Brett Harold Krause, Mr Simon James McDonald (Chairman of the Audit Committee with the appropriate accounting and related financial management expertise as required under rule 3.10(2) of the Listing Rules) and Mr Robin Tom Holdsworth. The Audit Committee held a meeting attended by all members of the Audit Committee in March 2020 for the review of the 2019 annual results of the Company, review of the risk management and internal control systems and the review of the effectiveness of the Group’s internal audit function. 62 Focused