Annual Report 2007 - Hmdatalink.com hm datalink

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Directors’ ReportDirectors’ Interests in Contracts ofSignificanceDetails of transactions between the Group and othercompanies under the control of Mr. Li Shu Fu duringthe year are set out in note 29 to the consolidatedfinancial statements.Save as disclosed above, no contracts of significanceto which the Company, its holding company or anyof its subsidiaries, was a party and in which a directorof the Company had a material interest, whetherdirectly or indirectly, subsisted at the end of the yearor at any time during the year.Connected TransactionsDuring the year, the Group entered into certainrelated party transactions which also constituteconnected transactions under the Listing Rules.Details of these transactions are set out in note 29 tothe consolidated financial statements. The followingtransaction between certain connected parties andthe Group has been entered into is ongoing forwhich relevant announcement had been made by theCompany in accordance with the requirements of theListing Rules.Model Code for SecuritiesTransactions by DirectorsDuring the year, the Company adopted the ModelCode for Securities Transactions by Directors ofListed Issuers (the “Model Code”) as set out inAppendix 10 of the Listing Rules as its own Code forSecurities Transactions by the Officers (the “Code”).All directors of the Company have confirmed theircompliance during the year with the requiredstandards set out in the Model Code and the Code.Continuing Connected TransactionsOn 9 May 2005, Zhejiang Fulin Guorun AutomobileParts & Components Company Limited (“ZhejiangFulin”), a subsidiary of the Company, entered into asupply agreement with Zhejiang Geely AutomobileCompany Limited (“Zhejiang JV”), an associatedcompany of the Company. Prior to the enteringinto of the supply agreement, Zhejiang Fulin hadbeen in its usual and ordinary course of business,selling automobile parts and components on normalcommercial terms to an associated company ofthe Company, Zhejiang JV and its subsidiariessince December 2003. Mr. Li Shu Fu is theultimate controlling shareholder of Zhejiang GeelyAutomobile Company Limited. Also, he has becomethe ultimate controlling shareholder of the Companysince 19 May 2005 and was appointed as theChairman of the Company on 9 June 2005. Therefore,the transactions between Zhejiang Fulin and ZhejiangJV under the supply agreement would automaticallyconstitute continuing connected transactions forthe Company since 19 May 2005. On 20 March 2006,Zhejiang Fulin entered into the supplemental supplyagreement with Zhejiang JV to amend the annualcaps as stated in the supply agreement. Save for this,other terms of the Supply Agreement would remainunchanged. The consideration payable under thetransactions pursuant to the supply agreement andsupplemental supply agreement will be determinedat arm’s length negotiations between the relevantparties with reference to prevailing market price oron no more favorable terms to Zhejiang JV and itssubsidiaries than those offered by Zhejiang Fulin toother independent third parties.GEELY AUTOMOBILE HOLDINGS LIMITED53ANNUAL REPORT 2 0 0 7
Directors’ ReportThe aforesaid continuing connected transactionshave been reviewed by independent non-executivedirectors of the Company. The independent nonexecutivedirectors confirmed that the aforesaidconnected transactions were entered into (a) inthe ordinary and usual course of business of theGroup; (b) either on normal commercial terms or onterms no less favourable to the Group than termsavailable to or from independent third parties; (c) inaccordance with the relevant agreements governingthem on terms that are fair and reasonable and inthe interests of the shareholders of the Companyas a whole; (d) had been determined to be HK$137million which, did not exceed the annual cap ofHK$359 million for the year ended 31 December2007 as approved by the Stock Exchange and theIndependent Shareholders.Based on the work performed, the auditors ofthe Company have confirmed that the aforesaidcontinuing connected transactions (a) have beenapproved by the board of directors of the Company;(b) have been entered into in accordance with theterms of the relevant agreements governing thetransactions; and (c) had been determined to beHK$137 million which, did not exceed the annual capof HK$359 million for the year ended 31 December2007 as approved by the Stock Exchange and theIndependent Shareholders.Purchase, Sale or Redemption ofListed SecuritiesNeither the Company nor any of its subsidiariespurchased, sold or redeemed any of the Company’slisted securities during the year ended 31 December2007.Emolument PolicyThe emolument policy of the employees of theGroup is set up by the human resources departmentof the Group on the basis of their merits,qualifications and competence.The emolument policy of the directors of theCompany is decided by the RemunerationCommittee, having regard to the Company’soperating results, individual duties and performanceand comparable market statistics.The Company has adopted a share option schemeas an incentive to directors and eligible employees,details of the scheme are set out in note 28 to theconsolidated financial statements.Pre-emptive RightsThere are no provisions for pre-emptive rights underthe Company’s Articles of Association, or the laws ofCayman Islands, which would oblige the Companyto offer new shares on a pro-rata basis to existingshareholders.Major Customers and SuppliersThe percentage of purchases attributable to theGroup’s five largest suppliers and the largest supplierare 40.0% and 12.1%, respectively, of the Group’stotal purchases for the year.The percentage of sales attributable to the Group’sfive largest customers and the largest customerare 100% and 99.6% respectively, of the Group’stotal sales for the year. Zhejiang Geely AutomobileCompany Limited, an associate of the Company, isthe Company’s largest customer.GEELY AUTOMOBILE HOLDINGS LIMITED54ANNUAL REPORT 2 0 0 7
Page 3 and 4: Supplying the SAFEST, the MOST ENER
Page 5 and 6: Financial Summary and HighlightsFin
Page 8 and 9: Chairman’s StatementLi Shu Fu,Cha
Page 10 and 11: Chairman’s Statementoperating ass
Page 12 and 13: Management Discussion and AnalysisO
Page 14 and 15: Organisation Chart (as of 31 Decemb
Page 16 and 17: Management Discussion and Analysiso
Page 18 and 19: Management Discussion and AnalysisT
Page 22 and 23: Management Discussion and AnalysisL
Page 26 and 27: Management Discussion and AnalysisL
Page 28 and 29: Management Discussion and Analysisb
Page 30 and 31: Management Discussion and Analysiss
Page 32 and 33: Management Discussion and AnalysisE
Page 34 and 35: Directors and Senior Management Pro
Page 36 and 37: Directors and Senior Management Pro
Page 38 and 39: Corporate Governance ReportThe Comp
Page 40 and 41: Corporate Governance ReportRelation
Page 42 and 43: Corporate Governance ReportEach new
Page 44 and 45: Corporate Governance Reportthe appo
Page 46 and 47: Corporate Governance ReportAs the G
Page 48 and 49: Directors’ ReportThe Directors pr
Page 50 and 51: Directors’ ReportCompanies contai
Page 52 and 53: Directors’ Report(5) Hunan Geely
Page 56 and 57: Directors’ ReportSave as disclose
Page 58 and 59: Independent Auditors’ Reportfor t
Page 60 and 61: Consolidated balance sheetas at 31
Page 62 and 63: Consolidated cash flow statementfor
Page 64 and 65: Notes to the consolidated financial
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Notes to the consolidated financial
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Geely Automobile Holdings LimitedRo
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