2011 - Li & Fung Limited

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CORPORATE GOVERNANCE The Board of Directors and management are committed to principles of good corporate governance consistent with prudent management and enhancement of shareholder value. These principles emphasize transparency, accountability and independence. Set out below are those principles of corporate governance as adopted by the Company. THE BOARD BOARD COMPOSITION Following the retirement of an Independent Non-executive Director at 2011 Annual General Meeting, the appointment of a Non-executive Director and an Independent Non-executive Director in February 2011 and November 2011 respectively, the Board is currently composed of the Group Non-executive Chairman, Executive Deputy Chairman, Group President and Chief Executive Officer, one Executive Director, five Independent RISK MANAGEMENT AND SUBSTAINABILITY COMMITTEE AUDIT COMMITTEE CORPORATE GOVERNANCE & COMPLIANCE REMUNERATION COMMITTEE THE BOARD 24 LI & FUNG LIMITED | ANNUAL REPORT 2011 NOMINATION COMMITTEE MANAGEMENT Non-executive Directors and one Non-executive Director. The Board considers this composition to be more balanced and to reinforce a stronger independent review and monitoring function on overall management practices. Directors’ biographical details and relevant relationships are set out in the Directors and Senior Management section on pages 46 to 51. BOARD COMPOSITION 2011 50% 20% 30% 2010 56% 11% 33% 2009 50% 10% 40% Executive Directors Non-executive Director Independent Non-executive Directors SHAREHOLDERS
GROUP CHAIRMAN AND EXECUTIVE DEPUTY CHAIRMAN The role of the Group Chairman is separate from that of the Group Managing Director who was designated as Executive Deputy Chairman on 18 May 2011. This is to enhance their respective independence, accountability and responsibility. Their respective responsibilities are clearly established and defined in writing by the Board. Group Chairman • responsible for ensuring that the Board is functioning properly, with good corporate governance practices and procedures. Executive Deputy • responsible for managing the Group’s Chairman business, including the implementation of major strategies and initiatives adopted by the Board with the support from other Executive Directors and Senior Management, and within those authorities delegated by the Board. ROLES AND RESPONSIBILITIES OF THE BOARD The Board is responsible for setting up the overall strategy as well as reviewing the operation and financial performance of the Group. The Board reserved for its decision or consideration matters covering overall Group strategy, major acquisitions and disposals, annual budgets, annual and interim results, recommendations on Directors’ appointment or reappointment, approval of major capital transactions and other significant operational and financial matters. The Non-executive Directors (majority of whom are independent), who combine to offer diverse industry expertise, serve the important function of advising the management on strategy and ensuring that the Board maintains high standards of financial and other mandatory reporting requirements as well as providing adequate checks and balances for safeguarding the interests of shareholders and the Company as a whole. CORPORATE GOVERNANCE (CONTINUED) DELEGATION TO MANAGEMENT Day-to-day operational responsibilities are specifically delegated by the Board to management. Major matters include: • the preparation of annual and interim accounts for Board approval before public reporting; • execution of business strategies and initiatives adopted by the Board; • monitoring of operating budgets adopted by the Board; • implementation of adequate systems of risk management and internal control procedures; and • compliance with relevant statutory requirements, rules and regulations. BOARD AND COMMITTEE MEETINGS Board meetings are scheduled one year in advance to facilitate maximum attendance by Directors. The meeting agenda is set by the Group Non-executive Chairman in consultation with members of the Board. Senior Management is usually invited to join Board meetings to enhance the Board and management communication. External auditor attended the Company’s 2011 Annual General Meeting to answer any questions from the shareholders on the audit of the Company. LI & FUNG LIMITED | ANNUAL REPORT 2011 25
Page 1: LI & FUNG LIMITED (Incorporated in
Page 4 and 5: CORPORATE INFORMATION NON-EXECUTIVE
Page 6 and 7: THE AMERICAS Guatemala City Lima Ma
Page 8 and 9: CHAIRMAN’S STATEMENT Victor Fung
Page 10 and 11: CHAIRMAN’S STATEMENT (CONTINUED)
Page 12 and 13: CONSUMER NEEDS THE SUPPLY CHAIN CON
Page 14 and 15: MANAGEMENT DISCUSSION & ANALYSIS Wi
Page 16 and 17: MANAGEMENT DISCUSSION & ANALYSIS (C
Page 28 and 29: CORPORATE GOVERNANCE (CONTINUED) In
Page 30 and 31: CORPORATE GOVERNANCE (CONTINUED) LI
Page 32 and 33: CORPORATE GOVERNANCE (CONTINUED) RI
Page 34 and 35: CORPORATE GOVERNANCE (CONTINUED) CO
Page 36 and 37: CORPORATE GOVERNANCE (CONTINUED) As
Page 38 and 39: CORPORATE GOVERNANCE (CONTINUED) Th
Page 40 and 41: CORPORATE GOVERNANCE (CONTINUED) CO
Page 42 and 43: SUSTAINABILITY OVERVIEW In 2011, we
Page 44 and 45: SUSTAINABILITY (CONTINUED) A summar
Page 46 and 47: SUSTAINABILITY (CONTINUED) WELL-BEI
Page 48 and 49: DIRECTORS AND SENIOR MANAGEMENT DIR
Page 50 and 51: DIRECTORS AND SENIOR MANAGEMENT (CO
Page 52 and 53: DIRECTORS AND SENIOR MANAGEMENT (CO
Page 55 and 56: REPORT OF THE DIRECTORS The directo
Page 57 and 58: Number of Share Options REPORT OF T
Page 59 and 60: SUBSIDIARIES Details of the Company
Page 61 and 62: DIRECTORS The directors during the
Page 63 and 64: REPORT OF THE DIRECTORS (CONTINUED)
Page 65 and 66: REPORT OF THE DIRECTORS (CONTINUED)
Page 67 and 68: OPINION INDEPENDENT AUDITOR’S REP
Page 69 and 70: CONSOLIDATED PROFIT AND LOSS ACCOUN
Page 71 and 72: CONSOLIDATED BALANCE SHEET As at 31
Page 73 and 74: BALANCE SHEET As at 31 December 201
Page 75 and 76: CONSOLIDATED STATEMENT OF CHANGES I
Page 77 and 78:
NOTES TO THE ACCOUNTS 1 BASIS OF PR
Page 79 and 80:
NOTES TO THE ACCOUNTS (CONTINUED) 1
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2 CRITICAL ACCOUNTING ESTIMATES AND
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3 SEGMENT INFORMATION (CONTINUED) Y
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3 SEGMENT INFORMATION (CONTINUED) N
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4 OPERATING PROFIT (CONTINUED) The
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6 TAXATION (CONTINUED) NOTES TO THE
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10 STAFF COSTS INCLUDING DIRECTORS
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11 DIRECTORS’ AND SENIOR MANAGEME
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12 INTANGIBLE ASSETS Brand Buying a
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12 INTANGIBLE ASSETS (CONTINUED) NO
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13 PROPERTY, PLANT AND EQUIPMENT (C
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17 AVAILABLE-FOR-SALE FINANCIAL ASS
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19 DUE FROM/(TO) RELATED COMPANIES
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21 TRADE AND OTHER RECEIVABLES (CON
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22 CASH AND CASH EQUIVALENTS NOTES
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24 BANK BORROWINGS (CONTINUED) The
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26 RESERVES (a) THE GROUP NOTES TO
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26 RESERVES (CONTINUED) (b) THE COM
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27 LONG-TERM LIABILITIES NOTES TO T
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27 LONG-TERM LIABILITIES (CONTINUED
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28 POST-EMPLOYMENT BENEFIT OBLIGATI
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29 DEFERRED TAXATION (CONTINUED) NO
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30 NOTES TO THE CONSOLIDATED CASH F
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30 NOTES TO THE CONSOLIDATED CASH F
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31 BUSINESS COMBINATIONS (CONTINUED
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31 BUSINESS COMBINATIONS (CONTINUED
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36 FINANCIAL RISK MANAGEMENT NOTES
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36 FINANCIAL RISK MANAGEMENT (CONTI
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38 FAIR VALUE ESTIMATION NOTES TO T
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41 PRINCIPAL SUBSIDIARIES AND ASSOC
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LIFUNG TOWER 888 Cheung Sha Wan Roa
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2011 - Li & Fung Limited

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