Annual Report 2012 - TodayIR.com

Lonking Holdings Limited
Annual Report 2012
Directors’ Report
EMOLUMENT POLICY
The emolument policy of the employees of the Group is set up by the Human Resources Division on the
basis of their merit, qualifications and competence.
The emoluments of the directors of the Company are decided by the Remuneration Committee, having
regard to the Company’s operating results, individual performance and comparable market statistics.
At 31 December 2012, the Group employed approximately 8,338 employees.
MAJOR CUSTOMERS AND SUPPLIERS
The five largest customers accounted for approximately 17% (2011: 22%) of the Group’s total turnover
for the year. The five largest suppliers accounted for approximately 35% (2011: 31%) of the Group’s
total purchases for the year and the largest supplier accounted for approximately 12% (2011: 10%) of
the total purchases.
During the year, Mr. Li San Yim, the executive director of the Company, is interested in 3.26% of the
issued shares of Weichai Power Co., Ltd (stock code: 2338), which is one of the Group’s five largest
suppliers.
Save as disclosed above, none of the directors of the Company, an associate of the directors or a
shareholder of the Company (which to the knowledge of the directors own more than 5% of the
Company’s issued share capital) have interest in any of the Group’s five largest suppliers or customers.
CONNECTED TRANSACTIONS
On 7 December 2009, the Company entered into a Renewed Master Purchase Agreement (“Jinlong
Master Purchase Agreement”) with LongYan City Jinlong Machinery Company Limited (“Jinlong”), a
company incorporated in the PRC with limited liability and owned as to approximately 82.67% by Mr.
Ngai Ngan Qin, a brother of Ms. Ngai Ngan Ying, the non-executive director of the Company, pursuant
to which the Group agreed to purchase the Parts from Jinlong from time to time for a term commencing
from 1 January 2010 and ending on 31 December 2012, together with the amendment agreement
thereto dated 28 March 2011.
26
On 11 April 2012, the Company and Herkules (Shanghai) Automation Equipment Co. Ltd. (“Herkules”),
a company established under the laws of the PRC with limited liability and wholly-owned by Mr. Chen
Jie, the son-in-law of Mr. Li San Yim, an executive Director, chairman and controlling shareholder of the
Company, entered into a Master Purchase Agreement (“Herkules Master Purchase Agreement”), pursuant
to which the Group agreed to purchase the Automation Robot Products from Herkules from time to time
for a term commencing from 11 April 2012 and ending on 31 December 2012.