1 Consultation on Proposed Amendments to the Listing Rules Relating to Corporate Governance Issues

2 u To strengthen the corporate governance of companies listed on the Main Board and GEM u To ensure that the governance and accountability of issuers in Hong Kong are in line with the best international practices Objectives

3 u Same voting rights u Checks and balances u Accountability and responsibility u Timely disclosure and transparency Key Principles

4 u Part B --- Protection of Shareholders’ Rights u Part C --- Directors and Board Practices u Part D --- Corporate Reporting and Disclosure of Information Consultation Focuses:

5 Protection of Shareholders’ Rights

6 u Voting by Shareholders u Dilution of Shareholders’ Interests u Notifiable Transactions other than Connected Transactions u Connected Transactions Protection of Shareholders’ Rights

7 u Voting by poll Protection of Shareholders’ Rights Voting by Shareholders u Placing of shares using the general mandate u Placing and top-up subscription Dilution of Shareholders’ Interests

8 u Very substantial acquisitions and reverse takeovers u Introduction of “very substantial disposals” u Introduction of “total assets test” and “turnover test” u New thresholds for notifiable transactions u Asset valuation Protection of Shareholders’ Rights Notifiable Transactions other than Connected Transactions

9 u Definition of connected person u Transaction between connected persons and associated companies u Continuing connected transactions u Meaning of subsidiary Protection of Shareholders’ Rights Connected Transactions

10 Directors and Board Practices

11 u Independent Non-executive Directors u Board Practices u Directors’ Duties and Responsibilities u Securities Transactions by Directors u Directors’ Contracts, Remuneration and Appointments Directors and Board Practices

12 u Further guidance regarding independence u Minimum number of INEDs Directors and Board Practices Independent Non-executive Directors

13 u Code of Best Practice u Report on corporate governance u Audit committee u Remuneration committee u Nomination committee Directors and Board Practices Board Practices

14 u Duties and responsibilities of non-executive directors u Chairman and chief executive officer u Internal controls Directors and Board Practices Directors’ Duties and Responsibilities u “Black out” period of directors’ securities transactions Securities Transactions by Directors

15 u Directors’ service contracts u Disclosure of directors’ remuneration Directors and Board Practices Directors’ Contracts, Remuneration and Appointments

16 Corporate Reporting and Disclosure of Information

17 u Quarterly Reporting u Half-year Reporting u Full-year Reporting Corporate Reporting and Disclosure of Information

18 u Quarterly reports u Quarterly results announcements Quarterly Reporting Corporate Reporting and Disclosure of Information u Half-year reports u Half-year results announcements Half-year Reporting

19 Corporate Reporting and Disclosure of Information u Annual reports u Summary financial reports Full-year Reporting

20 Consultation Deadline 22 April 2002