INTRODUCTION

The Board has always believed in the importance of corporate governance and the accountability and transparency of its management. The Company has been in compliance with a high standard of corporate governance practices and the Board takes seriously their duty to implement good corporate governance practices to ensure their duties are discharged in a transparent and accountable manner. The Board believes that by running the business in a way which is responsible to its shareholders and of high level of integrity, the long-term benefit of the Group and the shareholders as a whole would be achieved and safeguarded.

CORPORATE GOVERNANCE PRACTICES

Except for Mr. Chow Kwong Fai, Edward who had served as both the chairman of the Board and the chief executive officer of the Company until he resigned from both of the positions effective from 21 November, 2011, the Company has complied with the code of provisions in the Code of Corporate Governance Practices (the “Code”) as set out in Appendix 15 of the GEM Listing Rules (see section on chairman and chief executive officer). The Board and the senior management of the Group have seriously appraised the Code and reviewed the practices of the Group to ensure full compliance of the Code.

DIRECTORS’ SECURITIES TRANSACTIONS

The Group adopted the required standard of dealings set out in rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct regarding directors’ securities transactions in securities of the Company. Upon the Company’s specific enquiry, each Director had confirmed that during the year ended 31 December 2010, the required standard of dealings had been fully complied with and there was no incident of non-compliance.

THE BOARD OF DIRECTORS

The Board, which currently comprises seven Directors, is primarily responsible for formulating the business strategy, reviewing and monitoring the business performance of the Group, approving the financial statements and annual budgets as well as directing and supervising the management of the Company. Execution of operational matters and the powers thereof are delegated to management by the Board with clear directions.

The Board comprises two non-executive Director, namely Mr. Yan Zhi (who is also the Chairman of the Board) and Mr. Fang Yibing; two executive Directors, namely Ms. Liu Qin and Mr. Duan Yan and three independent non-executive Directors, namely Mr. Lee Kang Bor, Thomas, Dr. Wong Tin Yau, Kelvin and Mr. Fan Chun Wah, Andrew. Non-executive Directors currently represent five-sevenths of the Board. Independent non-executive Directors currently represent three-sevenths of the Board.

During the 2011 Year, there were in total eight Board meetings held and the attendance record of the Directors is set out below:

In full compliance with Rules 5.05(1) and (2) of the GEM Listing Rules, the Company has appointed three independent non-executive Directors, at least one of whom has appropriate professional accounting qualifications. The Group has received from each independent non-executive Director an annual confirmation of his independence, and the Group considers such directors to be independent in accordance with each and every guideline set out in rule 5.09 of the GEM Listing Rules.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr. Chow Kwong Fai, Edward served as both the chairman of the Board and the chief executive officer of the Company and he resigned from both positions effective from 21 November, 2011. While the Board is aware that it is a recommended best practice to split the role of the Chairman and the chief executive, in view of the small size of the Group and the fact that the Group’s core business is straight forward and is carried out singularly by its subsidiary, WIT, and the fact that the role of general manager (de facto chief executive) of WIT is carried out and performed by another person, the Board does not see a need to appoint a person other than the Chairman as chief executive at the Company level or at the Group level. Save for the above deviation, the Company was in full compliance with the Code during the 2011 Year. On 21 November, 2011, Mr. Yan Zhi was appointed as the chairman of the Board and Mr. Duan Yan was appointed as the chief executive officer of the Company, the roles of chairman and chief executive officer have been separated and performed by different individuals from thereon.

NON-EXECUTIVE DIRECTORS AND RE-ELECTION
According to Article 114 of the Company’s Articles of Association (the “Articles”), all Directors appointed to fill a causal vacancy should be subject to re-election by shareholders at the first general meeting after their appointment. According to Article 130 of the Articles, one-third of the Directors shall retire from office by rotation and are subject to re-election at annual general meeting at least once every three years.

THE AUDIT AND REMUNERATION COMMITTEE
The Directors are aware that it is good practice for listed companies to establish an audit committee and a remuneration committee in accordance with the Code. However, having taken into account of the small size of the Company and the fact that members for both committees would most likely be the same, the Board considers it more efficient to have these two committees combined into one committee (the “Audit and Remuneration Committee”). The Audit and Remuneration Committee comprises Mr. Lee Kang Bor, Thomas (Chairman), Dr. Wong Tin Yau, Kelvin, Mr. Fan Chun Wah, Andrew and Mr. Fang Yibing, the majority of whom are Independent Non-executive Directors of the Company. The primary duties of Audit and Remuneration Committee include the following:

1. THE FUNCTIONS OF AN AUDIT COMMITTEE
The primary duties of the “audit committee function” of the Audit and Remuneration Committee include the review of financial statements, financial reporting process and the internal control and risk management systems of the Group as well as the appointment of auditors. During the 2010 Year, the Audit and Remuneration Committee has reviewed the first-quarterly, the half-yearly, third-quarterly and the annual results as well as the effectiveness of the systems of internal control (the “Systems of Internal Control”) of the Group which covers financial, operational and compliance controls and risk management functions. The Audit and Remuneration Committee has liaised with the Directors, senior management and the qualified accountant as well as reviewed the “Report to the Audit Committee” from and discussed with the auditors on the audit and internal control related issues of the Group.

During the 2010 Year, management of the Company had conducted an internal audit on the systems of internal control of WIT to ensure compliance with procedures laid down by the Company and the board of directors of WIT and a review of the overall systems of internal control and risk management functions of the Group. The findings of this review which is in the form of an “Internal Audit Report” was reviewed by the Committee. Further details of these are set out in the section headed “Internal Control” contained in this report.

2. THE FUNCTIONS OF A REMUNERATION COMMITTEE
The primary duties of the “remuneration committee function” of the Audit and Remuneration Committee include the review and determination of Directors’ service contracts, the salaries of the Directors and the award of discretionary bonus and share options of the Company.
The Company has adopted full disclosure of remunerations of Directors with disclosure by name, amount and type in note 8 to the financial statements.

The Company has a share option scheme and certain options were granted during the 2010 Year. (Refer to note 29 to the financial statements for more details.)

3. AUDITORS’ REMUNERATION
Remuneration in respect of audit and other services provided by the auditors to the Group for the 2010 Year is HK$394,000 and HK$Nil respectively.

The Audit and Remuneration Committee held in total four meetings during the 2011 Year to review the financial results, systems of internal control and risk management and remuneration policy and levels of the Group. The attendance record of members of the Audit and Remuneration Committee is summarised as below:

NOMINATION OF DIRECTORS
For the purpose of nomination of directors, as the Company finds it not necessary to establish a separate nomination committee, therefore the task of nomination of Directors is vested with the Board of the Company. The Board reviews (i) the structure, size and composition (including the skills, knowledge and experience) of Board members on a regular basis and make recommendation regarding any proposed changes; (ii) identifies individuals suitably qualified to become board members; (iii) assesses the independence of independent non-executive directors; and (iv) makes recommendations on relevant matters relating to the appointment and reappointment of directors and succession planning for directors.

INTERNAL CONTROL
The Board is responsible for maintaining sound and effective systems of internal control to safeguard the Group’s assets and shareholders’ interests, as well as reviewing the effectiveness of such systems of internal control. The Systems of Internal Control, which include a well-established organizational structure with clearly defined lines of responsibility and authority, are designed to manage, rather than eliminate, risks of failure in achieving the Group’s business objectives and to provide reasonable, but not absolute, assurance against material misstatement or loss.

For the 2010 Year, the Board has, through the Audit and Remuneration Committee with the assistance of head office management, conducted a risk-and-control-based approach review of the Group’s Systems of Internal Control, including without limitations, financial controls, operational controls, compliance controls and risk management functions. Summaries of head office management’s review findings and control weaknesses identified, if any, and recommendations for improvement, where applicable, are reviewed by the Audit and Remuneration Committee. The head office management monitors the follow-up actions agreed upon in response to its recommendations and report back to the Audit and Remuneration Committee. The Board is of the view that the Systems of Internal Control and risk management are effective and there are no irregularities, improprieties, fraud or other deficiencies that suggest material deficiency in the effectiveness of the Group’s Systems of Internal Control.

SHAREHOLDER VALUE
The Board and senior management recognise their responsibility to represent the interests of all shareholders and to maximize shareholder value and have made the following commitments to the Groups’ shareholders:

• Continuing effort to maintain long-term stability and growth in shareholder value and return on investment;
• Responsible planning, construction and operation of the Group’s core businesses;
• Responsible management of the Group’s investment and business risks; and
• True, fair, in depth and timely disclosure of the financial position and operating performance of the Group.

SHAREHOLDER’s RIGHTS AND RELATIONS
The Company believes that shareholders’ rights should be well respected and protected. The Company endeavors to maintain good communications with shareholders on its performance through quarterly results announcements, interim and annual reports and AGMs, so that they may make an informed assessment of their investments and the exercise of their rights as shareholders. The Group also encourages shareholders’ participation through general meetings or other means.

Shareholders or investors can enquire or make comments by putting their views to the Company or the Audit and Remuneration Committee by the following means: