Flat Glass Group Co., Ltd. — Governance Information 2015

Nov 24, 2015

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福萊特玻璃集團股份有限公司 Flat Glass Group Co., Ltd.

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(the “Company”) Stock Code: 6865

Terms of Reference of the Risk Control Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company

1. Constitution

• 1.1 The Committee is established pursuant to a resolution passed by the Board at its meeting held on 16 October 2015 with its responsibilities:

• (a) to discuss with management about risk management and internal control system, and ensure management has fulfilled its obligations and established effective system;

• (b) to make recommendations to the Board on the activities which will or may result in risks of having sanctions imposed on the Company;

• (c) to supervise and monitor the risks in legal sanctions by judicial authority for business activities in which the Company is engaged;

• (d) to appoint an international law firm with professional qualifications to review the Company’s relevant business activities where necessary and audit the Company’s export and currency settlement, and provide training programmes on laws about sanctions to the Company’s directors, senior management and relevant personnel;

• (e) to review and approve all related business transaction documents from clients and potential clients of the countries which are sanctioned. The Committee is responsible for reviewing the information about contracting party (e.g. identity and business nature) and drafts of business transaction documents. The Committee shall make a contrast examination of the list of restricted parties and countries held by contracting party as well as the US, EU, United Nations, or Australia, including but not limited to any government, individual or entity under the sanction of OFAC, and confirm whether contracting party is under the sanction or from any country under sanctions, or hold or control the said list. If there is any potential risk in sanctions, the Committee shall consult international legal adviser who has specialized knowledge and experience in international sanction laws;

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• (f) to monitor the implementation of internal control procedures for the Company’s sanctions and anti-money laundering;

• (g) to monitor the Company’s going public and use of fund raised from Hong Kong Stock Exchange to ensure the raised fund will not be used for any project or business of any country under sanctions. The Committee shall monitor whether the raised fund is deposited in an independent account, and deposited separately from the Company’s other funds;

• (h) to monitor the Company’s transactions with other related units as well as the horizontal competition with those units;

• (i) to know about the update of laws and regulations about financial sanctions;

• (j) to put forward new proposals for performance indicators for the Company’s market development;

• (k) to carry out periodic audits to the Company’s contracts to ensure there are no potential risks in financial sanctions;

• (l) to convene meeting periodically to discuss whether there is any potential risks in financial sanctions for the Company;

• (m) to meet regularly (at least once every year) to discuss the risk management and internal control system of the Company and its affiliates. The relevant review and discussion shall cover all key monitoring functions, including financial, operational and compliance controls, to ensure the adequacy of resources, staff qualification and experience, training programme and budget of the Company’s accounting, internal audit and financial reporting function; and

• (n) the items discussed above shall include the followings:

• (i) any change in nature and extent of significant risks and the Company’s response to business and external economic environment since last review;

• (ii) the management’s risks in continuous monitoring, scope and quality of internal control system, internal audit function and work of other assurance providers;

• (iii) effectiveness of the Company’s internal audit function;

• (iv) to report details and times of results of control to the Board (or Committee under its control) to assist the Board in review of the Company’s control and risk management;

• (v) material control failure or weakness within the period, and

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unforeseen consequences or severity of emergency, and material influence of these results on the Company’s financial performance or condition which has occurred or is going to occur; and

• (vi) effectiveness of financial report and compliance of procedure of Listing Rules.

2. Membership

• 2.1 Members of the Committee shall be appointed by directors of the Company. The Committee shall consist of at least three members, one of whom must be an independent non-executive director.

• 2.2 The Chairman shall be appointed by the Board, and shall be an independent non-executive director of the Company.

• 2.3 The appointment of the members of the Committee may be revoked, or additional members may be appointed to the Committee by separate resolutions passed by the Board and by the Committee.

• 2.4 The Secretary of the Company shall act as the secretary of the Committee.

• 2.5 The constitution of the Committee shall comply with the requirements of the Rules Governing the Listing of Securities.

3.

Frequency and proceedings of meetings

• 3.1 The Committee shall meet at least once every year. The chairman has discretion to decide to convene an extra meeting.

• 3.2

• Notice of meeting

• (a) Unless otherwise agreed by all the Committee members, a meeting shall be convened by at least fourteen days’ notice.

• (b) A Committee member may at any time summon a Committee meeting.

• (c) Notice shall be given to each Committee member in person orally or in writing or by telephone or by facsimile transmission or email at numbers or addresses from time to time notified to the secretary of the Company by such Committee member or in such other manner as the Committee members may from time to time determine.

• (d) Any notice given orally shall be followed by confirmation in writing

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before the meeting.

• (e) Notice of meeting shall state the time and place of the meeting and shall be accompanied by an agenda together with other documents which may be required to be considered by the members of the Committee for the purposes of the meeting.

• 3.3 The quorum for a meeting of the Committee shall be two members.

• 3.4 Other members of the Committee shall be entitled to attend a meeting.

4. Appointment of a proxy

• 4.1 Members of the Committee are not entitled to appoint a proxy.

5. Powers of the Committee

• 5.1 The Committee is authorized by the Board to deal with any activity stipulated in the above article 1.1.

• 5.2 The Committee should be provided with sufficient resources to perform its duties. The Committee should have access to independent professional advice at the expense of the Company if necessary, in order to fulfill its responsibility.

6. Minutes of meetings

• 6.1 Minutes of meetings of the Committee shall be kept by the secretary of the Company, and shall be open for inspection by any member of the Committee at any reasonable time on reasonable notice by any director. Draft and final versions of minutes of the meetings should be sent to all members of the Committee for their comment and records within a reasonable time after the meeting.

7. Written resolutions

• 7.1 Member of the Committee may pass any resolutions by written resolutions. This provision is without prejudice to any requirement under the Listing Rules for a Board or Committee.

8. Reporting processes

• 8.1 The Committee should report back to the Board on its decision or recommendation unless there are legal or regulatory restrictions on its ability to do so (such as a restriction on disclosure due to regulatory).

9. Ongoing applicability of articles of association of the Company

• 9.1 The articles of association of the Company regulating the meetings and

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proceedings of the Directors so far as the same are applicable and are not replaced by the provisions in these terms of reference shall apply to the meetings and proceedings of the Committee.

10. Powers of the Board

• 10.1 Subject to compliance with the Company’s provisions and Listing Rules (including Appendix 14 to the Listing Rules, Corporate Governance Code and Corporate Governance Report, the Board may amend, supplement and revoke these terms of reference and any resolution passed by the Committee provided that no amendments to and revocation of these terms of reference and the resolutions passed by the Committee shall invalidate any prior act and resolution of the Committee.

11. Language

• 11.1 If there is any inconsistency between the English and Chinese versions of these terms of reference, the Chinese version shall prevail.

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