Convenience Retail Asia Limited
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Corporate Governance

The Board of Directors and management are committed to principles of good corporate governance consistent with prudent management and enhancement of shareholder value. These principles emphasise transparency, accountability and independence.

Please refer to our latest Annual Report for more information about corporate governance of the Company.

The Board

Board Composition
The Board currently comprises the Non-executive Chairman, three Non-executive Directors, four Independent Non-executive Directors and two Executive Directors.

Name of Director Position
Victor FUNG Kwok King Group Chairman and Chairman of Nomination Committee
William FUNG Kwok Lun Non-executive Director
Godfrey Ernest SCOTCHBROOK Non-executive Director
Benedict CHANG Yew Teck Non-executive Director
Anthony LO Kai Yiu Independent Non-executive Director and Chairman of Audit Committee
Malcolm AU Man Chung Independent Non-executive Director and Chairman of Remuneration Committee
ZHANG Hongyi Independent Non-executive Director
Sarah Mary LIAO Sau Tung Independent Non-executive Director
Richard YEUNG Lap Bun Executive Director and Chief Executive Officer
PAK Chi Kin Executive Director and Chief Operating Officer

Board Diversity
The Company recognises and embraces the benefits of having a diverse Board. A Board Diversity Policy has been adopted by the Board.

In reviewing Board composition, the Nomination Committee will consider the benefits of all aspects of diversity including, but not limited to, skills, regional and industry experience, background, race, age, culture and gender, so as to maintain an appropriate range and balance of skills, experience and background on the Board.

Board Committees
The Board has established the following committees with defined terms of reference, which are in line with the Corporate Governance Code contained in Appendix 14 of the Listing Rules:

  • Audit Committee
  • Remuneration Committee
  • Nomination Committee

All the committees comprise a majority of Independent Non-executive Directors. Each of the Audit Committee and Remuneration Committee is chaired by an Independent Non-executive Director, and the Nomination Committee is chaired by the Non-executive Chairman.

The primary duties of the Audit Committee are to review the Group's financial reporting, risk management, internal controls and corporate governance matters, and make recommendations to the Board.

The primary duties of the Remuneration Committee are to make recommendations to the Board on the Company's policy and structure regarding remuneration for all Directors and senior management, and review the Group's remuneration and human resources policy.

The primary duties of the Nomination Committee are to review the structure, size and composition (including diversity) of the Board, assess the independence of Independent Non-executive Directors, make recommendations to the Board on the appointment or re-appointment of Directors, and review and monitor the training and continuous professional development of Directors and senior management.

Risk Management and Internal Control

The Board is responsible for the Group's risk management and internal control systems and for reviewing their effectiveness and adequacy with the assistance of the Audit Committee. The risk management and internal control systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and provide reasonable but not absolute assurance against material misstatement, loss or fraud. The Audit Committee reports to the Board on any material issues and makes relevant recommendations.

The Board has delegated to management the design, implementation and ongoing monitoring of the risk management and internal control systems. Qualified personnel throughout the Group maintain and monitor these systems on an ongoing basis.

The main features of the Group's risk management and internal control framework are set out as follows:

Control Environment
The Group operates within an established control environment, which is consistent with the principles outlined in “Internal Control and Risk Management - A Basic Framework” issued by HKICPA. The scope of internal controls for the Group relates to three major areas: effectiveness and efficiency of operations; reliability of financial reporting, and compliance with applicable laws and regulations.

Governance Structure
The Group maintains a tailored governance structure with defined lines of responsibility and appropriate delegation of authority. Risk identification, assessment, reporting and mitigation are performed across the business.

There are three layers of roles and responsibilities for managing risks and internal controls:

Role Accountability Responsibilities
Oversight Board as a whole, reviews are conducted through Audit Committee
  • Oversight of corporate governance, financial reporting, risk management and internal control systems
  • Fostering a risk awareness culture
Risk and control owner Management and business units
  • Day-to-day execution and monitoring of internal controls and risk management procedures
  • Formulation and implementation of policies and operating guidelines
  • Balance between business operation efficiency and exercising internal controls
Risk monitoring and communication Corporate Compliance Group
  • Evaluation of risk management and internal control systems to identify areas for improvement
  • Monitoring of corporate governance disclosure and compliance with the Listing Rules and statutory requirements
  • Undertaking of investigations

Management of Key Risks
The Group's risk management process is embedded in its strategy formulation, business planning, investment decisions, internal controls and day-to-day operations.

The following are considered key risks faced by the Group and are managed as such:

  1. Operational Risk Management

    Corporate policies and procedures covering key risks and control standards have been established and implemented. Such policies and procedures are reviewed regularly to ensure their effectiveness. Control procedures are put in place in connection with the approval of the Group's major business transactions and investments, and the monitoring of daily operations of the Group's business.

    Contingency and business continuity plans are also examined periodically to evaluate their effectiveness.

  2. Financial Risk Management

    The Board approves the Group's Three-Year Business Plan and annual budgets, reviews the Group's operating and financial performance and key performance indicators against the budgets on a quarterly basis. Management closely monitors actual financial performance of the Group on a monthly basis.

    The Group adopts a principle of minimising financial risks. Please refer to our latest Annual Report for details of the Group's financial risk management (encompassing foreign exchange risk, credit risk, liquidity risk and interest rate risk).

  3. Reputational Risk Management

    The reputation of the Group is built on its long-established standards of ethics in conducting business. Guidelines of the Group's business ethical practices as endorsed by the Board are set out in the Code of Conduct and Business Ethics. All Directors, officers and employees are expected to comply with the code at all times.

    Please click here to read more about our Code of Conduct and Business Ethics.

    The Group places great emphasis on employees' ethical standards and integrity in all aspects of its operations. The Group takes a zero-tolerance approach to bribery and is committed to complying with all applicable anti-bribery laws. Any ethical concerns raised under the Whistleblowing Policy will be investigated independently.

    Under the Group's Whistleblowing Policy, employees can report any concern, including actual or potential misconduct, possible impropriety or fraud in financial reporting, accounting, risk management and internal control matters, to either senior management or the Group Chief Compliance and Risk Management Officer. Any shareholders or stakeholders can also report similar concerns by writing in confidence to the Group Chief Compliance and Risk Management Officer at the Company's principal place of business in Hong Kong.

  4. Regulatory Compliance Risk Management

    The Corporate Compliance Group comprises the Corporate Governance Division (“CGD”) and the Corporate Secretarial Division. Under the supervision of the Group Chief Compliance and Risk Management Officer and in conjunction with the Group's external advisors, the team regularly reviews adherence to relevant laws and regulations, compliance with the Listing Rules, public disclosure requirements and the Group's standards of compliance practices.

Internal Audit
CGD staff independently review the Group's risk management and internal control systems, and evaluate their effectiveness, adequacy and compliance. In addition, CGD staff regularly visit the Group's offices, factories, distribution centres and selected stores in Hong Kong, Macau and on the Chinese Mainland to help embedding the compliance culture in the Group's business practices by performing on-site reviews.

The Audit Committee approved CGD's Three-Year Internal Audit Plan that is linked to the Group's Three-Year Business Plan. The Internal Audit Plan is based on a risk assessment methodology and covers the Group's major operations over a three-year period. The scope of the internal audit review covers material financial, operational and compliance controls, as well as risk management policies and procedures.

As part of the annual review of the effectiveness of the Group's risk management and internal control systems, CGD independently reviews the Internal Control Self-Assessment Checklist completed by the management in each material business unit across the Group, and assesses the effectiveness and adequacy of the risk management procedures and internal controls implemented. CGD's review also considers the adequacy of resources, staff qualifications and experience, training programmes and budget of the Group's accounting and financial reporting function. The outcome of the review is reported to the Audit Committee.

In addition, prior to the issuance of the interim report, CGD requests the management to assess and confirm the effectiveness and adequacy of the risk management and internal control systems for the first six months of the financial year, and to bring to CGD's attention any changes in such systems or any other material issues.

External Audit
The external auditor performs independent statutory audit on the Group's financial statements. To facilitate the audit, the external auditor attends all the meetings of the Audit Committee. The external auditor also reports to the Audit Committee any significant weaknesses in the Group's internal control procedures which come to their attention during the course of the audit.

Handling and Dissemination of Inside Information
The Company handles and disseminates inside information in accordance with the requirements of the Securities and Futures Ordinance and the Listing Rules.

With regard to the procedures and internal controls for the handling and dissemination of inside information, the Company:

  • has adopted the Policy on Inside Information to ensure potential inside information is captured and confidentiality of such information is maintained until timely disclosure is made.

  • has included in the Code of Conduct and Business Ethics a prohibition on dealing in the Company's securities whilst in possession of inside information.

  • has established and implemented measures such as pre-clearance on dealing in the Company's securities by the Directors and relevant employees, notification of regular blackout periods and securities dealing restrictions to the Directors and relevant employees, as well as identification of projects by code names.

  • has established and implemented procedures for responding to external enquiries about the Group's affairs.

Constitutional / Corporate Documents

Please find below important constitutional / corporate documents: