China XLX Fertiliser Ltd

CORPORATE GOVERNANCE REPORTChairman and Chief Executive OfficerPrinciple 3: There should be a clear division of responsibilities at the top of the company – the working of theBoard and the executive responsibility of the company’s business – which will ensure a balance of power andauthority, such that no one individual represents a considerable concentration of power.The Executive Chairman and Chief Executive Officer (“CEO”) is Mr Liu Xingxu. The Board is of the view that it isin the best interests of the Group to adopt a single leadership structure so as to ensure that the decision-makingprocess of the Group would not be unnecessarily hindered.Mr Liu Xingxu is the largest shareholder of the Company who is deemed to hold 34.34% of the issued share capitalof the Company through Pioneer Top Holdings Limited. He is in charge of the Group’s overall strategic directionsand manages the day-to-day business operations. He also ensures timeliness of information flow between theBoard and Management. He has played a vital role in developing the business of the Group and has also providedthe Group with strong leadership and vision.Major decisions made by the Executive Chairman and CEO are reviewed by the Board of Directors. His performanceand appointment to the Board is being reviewed by the Nominating Committee and his remuneration package isbeing reviewed by the Remuneration Committee. The Audit Committee, Nominating Committee and RemunerationCommittee comprise a majority of independent directors of the Company. As such, the Board believes thatthere are adequate safeguards in place to ensure a balance of power and authority, such that no one individualrepresents a considerable concentration of power.Board MembershipPrinciple 4: There should be a formal and transparent process for the appointment of new directors to the Board.The Nominating Committee (“NC”) comprises three members, majority of whom including the Chairman areindependent non-executive directors.Mr Li ShengxiaoMr Ong Wei JinMr Liu Xingxu(Chairman)(Member)(Member)The NC functions under the terms of reference which sets out its responsibilities:(a)(b)(c)(d)to make recommendations to the Board on all board appointments, including re-nominations, havingregard to the director’s contribution and performance (for example, attendance, preparedness, participationand candour) including, if applicable, as an independent director. All directors shall be required to submitthemselves for re-nomination and re-election at regular intervals and at least every three years;to determine annually whether or not a director is independent;in respect of a director who has multiple board representations on various companies, to decide whether ornot such director is able to and has been adequately carrying out his/her duties as director, having regard tothe competing time commitments that are faced when serving on multiple boards; andto decide how the Board’s performance may be evaluated and propose objective performance criteria,as approved by the Board that allows comparison with its industry peers, and address how the Board hasenhanced long terms shareholders’ value.China XLX Fertiliser Ltd.27