0175 Geely Automobile Holdings Limited Annual Report 2011

Annual Report 2011Geely Automobile Holdings LimitedMAJOR CUSTOMERS AND SUPPLIERSThe percentage of purchases attributable to the Group’s five largest suppliers and the largest supplier are 45% and 34%,respectively, of the Group’s total purchases for the year. Zhejiang Geely Automobile Parts and Components CompanyLimited and Shanghai Maple Engine Company Limited, both are related companies controlled by the substantial shareholderof the Company, is the Group’s first largest supplier and second largest supplier, respectively.The percentage of sales attributable to the Group’s five largest customers and the largest customer are 6% and 2%respectively, of the Group’s total sales for the year.Save as disclosed above, at no time during the year did the directors, their associates, or shareholders of the Company,which to the knowledge of the directors own more than 5% of the Company’s share capital, have an interest in any ofthe Group’s five largest customers or suppliers.CORPORATE GOVERNANCE REPORTDetails of the Corporate Governance Report are set out on pages 21 to 35 of the annual report.AUDIT COMMITTEEThe Company has an audit committee which was established in accordance with the requirements of the CorporateGovernance Code as defined in the Listing Rules for the purpose of reviewing and providing supervision over the Group’sfinancial reporting processes and internal controls. The audit committee comprises Messrs. Lee Cheuk Yin, Dannis, SongLin, Yeung Sau Hung, Alex, Fu Yu Wu who are the independent non-executive directors of the Company.SUFFICIENCY OF PUBLIC FLOATRule 8.08 of the Listing Rules requires at least 25% of the issued share capital of the Company to be held in publichands. Based on the information available and within the knowledge of the directors as at the latest practicable dateprior to the issue of the annual report, the Company has maintained the prescribed public float as required under theListing Rules.COMPETING BUSINESSESThe Group is principally engaged in the research, production, marketing and sales of sedans and related automobilecomponents in the PRC.Zhejiang Geely Holding Group Company Limited (“Geely Holding”), which is ultimately owned by Mr. Li Shu Fu (“Mr. Li”),the Company’s Chairman, and his associates, has signed agreements or been in negotiations with local governmentsin the PRC and other entities to set up production plants for the manufacturing and distribution of Geely sedans. Thepotential production and distribution of Geely sedans by Zhejiang Geely Holding Group Company Limited will constitutecompeting businesses (the “Competing Businesses”) to those currently engaged by the Group. Mr. Li has undertakento the Company (the “Undertaking”) that upon being notified of any decision by the Company pursuant to a resolutionapproved by a majority of the independent non-executive Directors, he will, and will procure his associates (other thanthe Group) to sell to the Group all of the Competing Businesses and related assets, subject to compliance with applicablerequirements of the Listing Rules and other applicable laws and regulations upon terms to be mutually agreed as fairand reasonable.51