Rules of Procedure for Audit Committee of the Board

Rule 1 Purpose

(I) These Rules of Procedure are formulated in accordance with the relevant laws, regulations, rules and regulatory documents as well as the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the memorandum and articles of association of the Company (the "Articles of Association") while taking into account the actual conditions of the Company, aiming at completing the governance structure of Greentown China Holdings Limited (the "Company"), improving the corporate governance of the Company, standardising the systems and practices of the financial reports and internal control of the Company and regulating the relationship between the Company and the external auditors appointed by the Company (the "Auditors"), so as to protect the interests of the Company and its shareholders.

(II) The Audit Committee of the Board (hereinafter referred to as the "Committee") is a specialised committee under and accountable to the Board of Directors (hereinafter referred to as the "Board", and its members referred to as the "Directors").

Rule 2 Composition

(I) The Committee consists of at least 3 Directors, and all the members (the "Members") of the Committee must be non-executive Directors and possess certain financial knowledge recognised by the Board. At least one of them must be an independent non-executive Director, who possesses appropriate professional knowledge as required by Rule 3.10(2) of the Listing Rules or appropriate accounting or relevant financial management expertise. More than half of the Members must be independent non-executive Directors.

(II) The appointment or removal of a Member shall be proposed by the Chairman of the Board, and be approved by ordinary resolution at the Board meeting or by written resolution signed by all Directors.

(III) The term of office for a Member shall have the same period as his/her term as a Director. When such term expires, he/she is eligible for re-election. Where a Member resigns as a Director during his/her term, the Chairman of the Board may, for the purposes of maintaining composition of the Committee in compliance with the Rules of Procedure, nominate another Director to serve as an ad hoc Member, who shall, within three months, become a formal Member upon the approval by the Board according to the second paragraph of this Rule.

(IV) One of the Members shall serve as the Chairman of the Committee (the “Chairman”), who shall be an independent non-executive Director. The procedures on appointment or removal of the Chairman are the same as that of a Member.

(V) The Committee shall have a secretary (the “Secretary”), who is concurrently the secretary of the Company.

(VI) A former partner of the auditor who is responsible for auditing the Company’s accounts shall not serve as a Member within one year from the following dates, whichever is the later:

(a) the date he stops being a partner of the said company; or
(b) the date he stops enjoying the financial benefits from the said company.

Rule 3 Duties and Responsibilities

The Committee is authorised by the Board to adopt the sub-paragraphs C.3.3 and C.3.7 of Appendix 14 of the Listing Rules as its terms of reference, which are automatically updated in accordance with the provisions of the Listing Rules as amended from time to time. The main duties and responsibilities of the Committee include:

(I) Relationship between the Company and the Auditors

1. to be primarily responsible for making recommendations to the Board in relation to the appointment, re-appointment and removal of the Auditors, approving the remuneration and terms of engagement of the Auditors, and handling any matters in relation to the resignation or dismissal of such Auditors;

2. to review and monitor the independence and objectiveness of the Auditors as well as the effectiveness of the auditing procedures in accordance with applicable standards, and to discuss with the Auditors about the nature and scope of the audit and the relevant reporting obligations prior to the commencement of the audit;

3. to formulate and implement policies in relation to the non-audit services rendered by the Auditors. For the purpose of these Rules, the Auditors may comprise any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party having knowledge of all relevant information would reasonably conclude as part of the audit firm nationally or internationally. The Committee shall report to the Board actions to be taken or matters to be improved which it may consider necessary, and make recommendations as to steps to be taken;

(II) Review of the financial information of the Company

1. to monitor the completeness of the financial statements of the Company and the Company’s annual reports and accounts, half-year reports and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in such statements and reports. In this regard, in reviewing the Company’s annual reports and accounts, half-year reports and, if prepared for publication, quarterly reports before submission to the Board, the Committee shall focus particularly on:

(1) any change in accounting policies and practices;
(2) areas where significant judgment is involved;
(3) significant adjustments resulting from audit;
(4) the going concern assumptions and any qualifications;
(5) compliance with accounting standards; and
(6) compliance with the Listing Rules and other legal requirements in relation to financial reporting;

2. in regard to the first paragraph above:
(1) members of the Committee must liaise with the Company’s Board, senior management and the person appointed as the Company’s qualified accountant. The Committee must meet, at least once a year, with the Auditors; and
(2) the Committee shall consider any significant or unusual matters that are, or may need to be, reflected in such reports and accounts and must give due consideration to all matters that have been raised by the Company’s qualified accountant, compliance officer or the Auditors;

(III) Oversight of the financial reporting system and internal control procedures of the Company

1. to review the financial control, internal control and risk management systems of the Company;

2. to discuss with the management of the Company on the system of internal control and ensure that the management has discharged its duty to have an effective internal control system;

3. to consider any findings of major investigations of internal control matters on its own initiative or delegated by the Board and the management’s response;

4. where an internal audit function exists, to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced in the Company and has appropriate standing, and to review and monitor the effectiveness of the internal audit function;

5. to review the group’s financial and accounting policies and practices;

6. to review the Auditor’s management letter, any material queries raised by the Auditor to the management of the Company in respect of the accounting records, financial accounts or control systems and the management’s response and to ensure that the Board will provide a timely response to the issues raised in the Auditor’s management letter;

7. to report to the Board on the matters set out in this code provision; and

8. to consider other topics, as defined by the Board.

Rule 4 Meetings

(I) The Committee shall hold at least two meetings each year. A meeting shall be held when the Chairman or over half of the Members propose(s) to do so.

(II) The meeting shall be presided over by the Chairman. In case that the Chairman is unable to attend the meeting, he/she shall authorise another Member, who shall be an independent non-executive director, to preside over the meeting.

(III) The meeting of the Committee shall not be held unless over two thirds of the Members attend the meeting. Each Member shall have one voting right and the resolutions made at the meeting must be approved by over half of all the Members. If, for any reason, a Member is unable to attend a meeting, he/she may authorise in writing another Member to attend and vote at the meeting on his/her behalf.

(IV) Any or some of the Directors, supervisors, president and other senior management may be invited by the Committee to attend its meeting when necessary. The Committee may also require to hold a meeting with the Auditors alone or to invite any or some of the above parties to attend the meeting.

(V) Full minutes of the meetings of the Committee are kept by the Secretary. The dissension in respect of resolutions of such meeting held by the attendees shall be recorded in the minutes. Draft minutes shall be provided to all the Members as soon as possible for their review. The Members who wish to make revisions and supplements to the draft minutes shall give his/her written opinions within one week after receipt of the drafts. The final minutes shall be completed within a reasonable period after the meeting and delivered to all the Members for record, as well as reported to the Board for circulation.

(VI) Resolutions passed by the Committee and the voting results shall be reported in writing by the Secretary to the Board after the meeting.

(VII) The meetings of the Committee may be held by way of on-site meeting or telecommunication meeting which includes telephone conferences and video conferences.

(VIII) The Committee may also pass the written resolutions signed by all the Members, which have the same effect as the resolutions passed at the meetings of the Committee.

Rule 5 Duties and Powers of the Chairman

The Chairman shall have the following duties and powers:

(I) to convene and preside over the meetings of the Committee;

(II) to follow up the subsequent matters dealt with by the relevant resolutions of the Committee;

(III) to sign on behalf of the Committee the relevant documents, except for the minutes of the Committee meetings, the resolutions passed at such meetings and written resolutions, which shall be signed by all the Members;

(IV) to report to the Board regularly or in accordance with the work arrangement of the Board; and

(V) other duties and powers as authorised by the Board.

Rule 6 Relevant Arrangements

(I) The Committee shall make available its terms of reference, explaining its role and the authority delegated to it by the Board.

(II) The Committee shall be given adequate resources to exercise its duties and powers. The Committee may consult other Directors, the president of the Company and/or other senior management in respect of the performance of its duties. The persons being consulted shall offer adequate supports to the work of the Committee, provide the Committee with such information as necessary for performance of its duties on a timely basis and give answers to the questions raised as soon as possible. As may be necessary in the circumstances, the Committee may also appoint external experts or intermediaries to offer services to it, and the reasonable expenses so incurred shall be borne by the Company.

(III) In any case where the Board has any disagreement with the opinions of the Committee on selection, appointment, dismissal or removal of the Auditors, the Company shall include the statement issued by the Committee on its recommendations and the reasons for any disagreement of the Board in the corporate governance report.

Rule 7 Others

(I) The phrase “more than” as mentioned in these Rules is inclusive of the figure that follows and the word “exceeding” as mentioned in these Rules is exclusive of the figure that follows.

(II) Unless otherwise specified, the terms used in these Rules have the same meanings with those in the Articles of Association.

(III) These Rules shall become effective upon approval by the Board and may be amended by the Board by way of ordinary resolutions.

(IV) These Rules shall be construed by the Board.



　

Rules of Procedure for Remuneration Committee of the Board

Rule 1 Purpose

(I) These Rules of Procedure are formulated in accordance with the relevant laws, regulations, rules and regulatory documents as well as the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the memorandum and articles of association of the Company (the "Articles of Association") while taking into account the actual conditions of the Company, aiming at completing the governance structure of Greentown China Holdings Limited (the "Company"), standardizing the remuneration system of the directors, president and other senior management of the Company, establishing an effective incentive mechanism and supervisory mechanism, enhancing the Company’s competitive edge and protecting the interests of the Company and its shareholders.

(II) The Remuneration Committee of the Board (hereinafter referred to as the “Committee”) is a specialized committee under and accountable to the Board of Directors (hereinafter referred to as the “Board”, and its members referred to as the “Directors”).

Rule 2 Composition

(I) The Committee consists of at least 3 Directors, and more than half of the members (the “Members”) of the Committee must be independent non-executive Directors.

(II) The appointment or removal of a Member shall be proposed by the Chairman of the Board, and be approved by ordinary resolution at the Board meeting or by written resolution signed by all Directors.

(III) The term of office for a Member shall have the same period as his/her term as a Director. When such term expires, he/she is eligible for re-election. Where a Member resigns as a Director during his/her term, the Chairman of the Board may, for the purposes of maintaining composition of the Committee in compliance with the Rules of Procedure, nominate another Director to serve as an ad hoc Member, who shall, within three months, become a formal Member upon the approval by the Board according to the second paragraph of this Rule.

(IV)One of the Members shall serve as the Chairman of the Committee (the “Chairman”), and the procedures on appointment or removal of the Chairman are the same as that of a Member.

(V) The Committee shall have a secretary (the “Secretary”), who is concurrently the secretary of the Company.

Rule 3 Duties and Responsibilities

The duties and responsibilities of the Committee include:

(I) to make recommendations to the Board on the Group's policy and structure in relation to the remuneration of Directors and senior management and on the establishment of formal and transparent procedures for developing such remuneration policy;

(II) to determine the specific remuneration packages for all the executive Director and senior management, including non-monetary benefits, pension rights and compensation (including that for loss or termination of office or appointment) and make recommendations on the remuneration of non-executive Directors to the Board. Things that should be taken into account by the Committee include remuneration packages offered by comparable companies, time commitment and responsibilities of the Director, employment conditions elsewhere in the Group and whether to link compensation with performance, etc.;

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

(IV) to review and approve payment of compensation to the executive Directors and senior management in relation to their loss or termination of office or appointment, so as to ensure that such compensation is determined in accordance with the relevant contract terms; should it fail so, the compensation should at least be fair and reasonable and will not impose a heavy burden on the Company;

(V) to review and approve compensation arrangement in relation to dismissal or removal of Directors for misconduct to ensure that such arrangements are determined in accordance with relevant contractual terms; should it fail so, the compensation should at least be fair and reasonable;

(VI) to ensure that no Director or any of his associate is involved in deciding his own remuneration;

(VII) to study and cope with issues in relation to the option scheme for the employees of the Company; and

(VIII) to consider other topics, as defined by the Board.

Rule 4 Meetings

(I) The Committee shall hold at least two meetings each year. A meeting shall be held when the Chairman or over half of the Members propose(s) to do so.

(II) The meeting shall be presided over by the Chairman. In case that the Chairman is unable to attend the meeting, he/she shall authorize another Member to preside over the meeting.

(III) The meeting of the Committee shall not be held unless over two thirds of the Members attend the meeting. Each Member shall have one voting right and the resolutions made at the meeting must be approved by over half of all the Members. If, for any reason, a Member is unable to attend a meeting, he/she may authorize in writing another Member to attend and vote at the meeting on his/her behalf.

(IV) Other Directors, supervisors, president and other senior management may be invited by the Committee to attend its meeting when necessary.

(V) Full minutes of the meetings of the Committee are kept by the Secretary. The dissension in respect of resolutions of such meeting held by the attendees shall be recorded in the minutes. Draft minutes shall be provided to all the Members as soon as possible for their review. The Members who wish to make revisions and supplements to the draft minutes shall give his/her written opinions within one week after receipt of the drafts. The final minutes shall be completed within a reasonable period after the meeting and delivered to all the Members for record, as well as reported to the Board for circulation.

(VI) Resolutions passed by the Committee and the voting results shall be reported in writing by the Secretary to the Board after the meeting.

(VII) The meetings of the Committee may be held by way of on-site meeting or telecommunication meeting which includes telephone conferences and video conferences.

(VIII) The Committee may also pass the written resolutions signed by all the Members, which have the same effect as the resolutions passed at the meetings of the Committee.

Rule 5 Duties and Powers of the Chairman

The Chairman shall have the following duties and powers:

(I) to convene and preside over the meetings of the Committee;

(II) to follow up the subsequent matters dealt with by the relevant resolutions of the Committee;

(III) to sign on behalf of the Committee the relevant documents, except for the minutes of the Committee meetings, the resolutions passed at such meetings and written resolutions, which shall be signed by all the Members;

(IV) to report to the Board regularly or in accordance with the work arrangement of the Board; and

(V) other duties and powers as authorised by the Board.

Rule 6 Relevant Arrangements

(I) The Committee shall make available its terms of reference, explaining its role and the authority delegated to it by the Board.

(II) The Committee shall be given adequate resources to exercise its duties and powers. The Committee may consult other senior management in respect of the performance of its duties. The persons being consulted shall offer adequate supports to the work of the Committee, provide the Committee with such information as necessary for performance of its duties on a timely basis and give answers to the questions raised as soon as possible. As may be necessary in the circumstances, the Committee may also appoint external experts or intermediaries to offer services to it, and the reasonable expenses so incurred shall be borne by the Company.

Rule 7 Others

(I) The phrase “more than” as mentioned in these Rules is inclusive of the figure that follows and the word “exceeding” as mentioned in these Rules is exclusive of the figure that follows.

(II) The "Senior Management" referred to in these Rules of Procedure represents the same class of people mentioned in the prospectus or (after the first annual report following its IPO is published) the latest annual report of the Company.

(III) Unless otherwise specified, the terms used in these Rules have the same meanings with those in the Articles of Association.

(IV) These Rules shall become effective upon approval by the Board and may be amended by the Board by way of ordinary resolutions.

(V) These Rules shall be construed by the Board.


　

Rules of Procedure for Nomination Committee of the Board

Rule 1 Purpose

(I) These Rules of Procedure are formulated in accordance with the relevant laws, regulations, rules and regulatory documents as well as the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the memorandum and articles of association of the Company (the "Articles of Association") while taking into account the actual conditions of the Company, aiming at completing the governance structure of Greentown China Holdings Limited (the "Company"), standardising the procedures for nominating the directors, chief executive officer and other senior management of the Company so as to select qualified directors, president and other senior management for the Company, and enhancing the competitive edge of the Company .

(II) The Nomination Committee of the Board (hereinafter referred to as the "Committee") is a specialised committee under and accountable to the Board of Directors (hereinafter referred to as the "Board", and its members referred to as the "Directors").

Rule 2 Composition

(I) The Committee consists of at least 3 Directors, and more than half of the Members must be independent non-executive Directors.

(II) The appointment or removal of a Member shall be proposed by the Chairman of the Board, and be approved by ordinary resolution at the Board meeting or by written resolution signed by all Directors.

(III) The term of office for a Member shall have the same period as his/her term as a Director. When such term expires, he/she is eligible for re-election. Where a Member resigns as a Director during his/her term, the Chairman of the Board may, for the purposes of maintaining composition of the Committee in compliance with the Rules of Procedure, nominate another Director to serve as an ad hoc Member, who shall, within three months, become a formal Member upon the approval by the Board according to the second paragraph of this Rule.

(IV) One of the Members shall serve as the Chairman of the Committee (the “Chairman”). The procedures on appointment or removal of the Chairman are the same as that of a Member.

(V) The Committee shall have a secretary (the “Secretary”), who is concurrently the secretary of the Company.

Rule 3 Duties and Responsibilities

Duties and responsibilities of the Committee include:

(I) to review the structure, number of members and composition of the Board (including their expertise, knowledge and experience) regularly, and propose any recommended changes to the Board;

(II) to seek for and select quality persons to be appointed as Directors, and provide the Board with opinions on the nomination of such persons to be appointed as Directors;

(III) to evaluate the independence of independent non-executive Directors;

(IV) to review the procedures and conditions for selection and appointment of the president and other senior management, and provide the Board with relevant opinions for reference; and

(V) to study other matters as defined by the Board.

Rule 4 Meetings

(I) The Committee shall hold at least two meetings each year. A meeting shall be held when the Chairman or over half of the Members propose(s) to do so.

(II) The meeting shall be presided over by the Chairman. In case that the Chairman is unable to attend the meeting, he/she shall authorise another Member to preside over the meeting.

(III) The meeting of the Committee shall not be held unless over two thirds of the Members attend the meeting. Each Member shall have one voting right and the resolutions made at the meeting must be approved by over half of all the Members. If, for any reason, a Member is unable to attend a meeting, he/she may authorise in writing another Member to attend and vote at the meeting on his/her behalf.

(IV) Any or some of the Directors, supervisors, president and other senior management may be invited by the Committee to attend its meeting when necessary.

(V) Full minutes of the meetings of the Committee are kept by the Secretary. The dissension in respect of resolutions of such meeting held by the attendees shall be recorded in the minutes. Draft minutes shall be provided to all the Members as soon as possible for their review. The Members who wish to make revisions and supplements to the draft minutes shall give his/her written opinions within one week after receipt of the drafts. The final minutes shall be completed within a reasonable period after the meeting and delivered to all the Members for record, as well as reported to the Board for circulation.

(VI) Resolutions passed by the Committee and the voting results shall be reported in writing by the Secretary to the Board after the meeting.

(VII) The meetings of the Committee may be held by way of on-site meeting or telecommunication meeting which includes telephone conferences and video conferences.

(VIII) The Committee may also pass the written resolutions signed by all the Members, which have the same effect as the resolutions passed at the meetings of the Committee.

(IX) To ensure that the Committee performs its duties in a fair and equitable manner. When the Committee convenes a meeting to discuss relevant matters, and there are Members who are perceived as interested parties in the following situations, they should disclose such interests to the Committee orally or in writing, and abstain from voting on the relevant resolutions (but they may attend such meetings and express their opinions):

a. the Member himself is proposed to be nominated;

b. a relative of a Member is proposed to be nominated;

c. other situations that may affect a Member to make judgments on objective and fair manner.

Rule 5 Duties and powers of the Chairman

The Chairman shall have the following duties and powers:

(I) to convene and preside over the meetings of the Committee;

(II) to follow up the subsequent matters dealt with by the relevant resolutions of the Committee;

(III) to sign on behalf of the Committee the relevant documents, except for the minutes of the Committee meetings, the resolutions passed at such meetings and written resolutions, which shall be signed by all the Members;

(IV) to report to the Board regularly or in accordance with the work arrangement of the Board; and

(V) other duties and powers as authorised by the Board.

Rule 6 Relevant Arrangements

(I) The Committee shall make available its terms of reference, explaining its role and the authority delegated to it by the Board.

(II) The Committee shall be given adequate resources to exercise its duties. The Committee may consult other Directors, the president of the Company and/or other senior management in respect of the performance of its duties. The persons being consulted shall offer adequate supports to the work of the Committee, provide the Committee with such information as necessary for performance of its duties on a timely basis and give answers to the questions raised as soon as possible. As may be necessary in the circumstances, the Committee may also appoint external experts or intermediaries to offer services to it, and the reasonable expenses so incurred shall be borne by the Company.

Rule 7 Others

(I) The phrase “more than” as mentioned in these Rules is inclusive of the figure that follows and the word “exceeding” as mentioned in these Rules is exclusive of the figure that follows.

(II) The "Senior Management" referred to in these Rules of Procedure represents the same class of people mentioned in the prospectus or (after the first annual report following its IPO is published) the latest annual report of the Company.

(III) Unless otherwise specified, the terms used in these Rules have the same meanings with those in the Articles of Association.

(IV) These Rules shall become effective upon approval by the Board and may be amended by the Board by way of ordinary resolutions.

(V) These Rules shall be construed by the Board.