Corporate Governance Report

The Board of the Company is committed to maintain high standards of corporate governance and considers effective corporate governance an essential factor to the Group’s success.

Board of Directors

The Directors believe that the Board, being comprised of five Executive Directors and four Independent Non-Executive Directors, has the balance of skills and experience that is appropriate for the business requirements of the Group.

Other than the Audit Committee, Remuneration Committee and Nomination Committee, the Company, with a view to increase the effectiveness and objectivity of the Board, has established an Independent Committee to advise the Board on the matters relating to the legal proceedings against certain former Directors and the prolonged suspension of trading in the shares of the Company. To enhance the transparency of the Independent Committee, the Company welcomes the views of minority shareholders. A representative of the minority shareholders has been accepted as one of the Independent Committee members.

According to the Listing Rules, the Company is required to have at least three independent non-executive directors (“INEDs”) on its Board and at least one of them must have appropriate professional qualifications, accounting or related financial management expertise. In order to strengthen the corporate governance of the Company and elevate the function of its Non-Executive Directors, the Company has appointed four INEDs, which is one more than as required by the Listing Rules. Two of the INEDs are Certified Public Accountants, which is one more than the requirement as stipulated by the Listing Rules.

As four of the nine Directors are INEDs, there is a strong independent element within the Board, which can effectively exercise independent judgment and monitor the corporate governance of the Group. Each of the INEDs has made a confirmation on independency.

To ensure that there is a clear division of power and authority within the Board, the roles of chairman and chief executive officer are separate.

Being a listed issuer, the Company places strong emphasis on the compliance of regulations and ordinances. In case of doubt, the Company will seek a second opinion. In FY2011, the Company’s legal advisers were as follows:

Board Meetings

Other than the two board meetings to approve the Company’s annual results and interim results, four regular board meetings were also held for FY2011 to which 14 days’ notice was given to all Directors. The attendance of each of the Directors is set out as follows:

Audit Committee

The Company’s Audit Committee is comprised of all the INEDs of the Company. The principal duties of the Audit Committee are to review the Group’s interim and annual reports, internal controls, and make recommendations to the Board.

Three Audit Committee meetings were held in FY2011. The attendance of each member of the Audit Committee is set out as follows:

During the meetings, the Audit Committee had performed the following work:

(i) reviewed the draft interim and annual consolidated financial statements and the related draft results announcements;

(ii) reviewed the change in accounting standards and assessment of potential impacts on the Group’s consolidated financial statements;

(iii) discussed with external auditors for any major audit issues of the Group; and

(iv) discussed with the external auditor about the scope of the annual audit.

Remuneration of Directors

The Company’s Remuneration Committee follows the specific written terms of reference which clearly spells out its authority and duties. All the INEDs are members of the Remuneration Committee.

The Remuneration Committee’s principal duties are to make recommendations to the Board on the remuneration policy and structure for Directors and senior management and to ensure that they are fairly rewarded for their individual contribution to the Group’s overall performance. It is also the Remuneration Committee’s duty to determine the specific remuneration packages of all Executive Directors and senior management

In FY2011, three Remuneration Committee meetings were held with full attendance to review the Directors’ adjusted remuneration and the remuneration packages of the newly appointed Directors.

Nomination of Directors

The Nomination Committee of the Company comprises of all the INEDs. The Nomination Committee shall make recommendations to the Board on all new appointments or re-appointments of Directors. The selection criteria are mainly based on the professional qualifications and working experience of the candidates. There are no fixed terms of services for the Executive Directors while the INEDs are engaged for a term of two years, subject to retirement by rotation and re-election in accordance with the provisions of the Bye-Laws of the Company. The Nomination Committee meets when it is considered necessary.

The Nomination Committee had one meeting in FY2011 with the full attendance of all its members

Directors’ Securities Transactions

The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules (the “Model Code”) as its own code for securities transactions by Directors. All members of the Board have confirmed, following specific enquiry by the Company, that, in FY2011, they have complied with the required standards as set out in the Model Code

Auditors' Remuneration

In FY2011, the remuneration paid or payable in respect of statutory audit services by the Auditor of the Company was approximately HK$680,000, and the non-audit services was approximately HK$52,000. The non-audit service fees were related to taxation services.

Shareholders' Rights and Interests

The Company believes that shareholders’ meetings provide a useful forum for shareholders to exchange views with the Board. A separate resolution is proposed in respect of each issue to be considered at the Annual General Meeting. The Chairman did not attend the Annual General Meeting of 2010 due to his personal reason. The Company always gives weight to the voices of its shareholders. A representative of the minority shareholders has been accepted as a member of the Independent Committee so that their views can be considered by the Company.

Shareholders’ interests are protected. Notwithstanding the fact that the trading in shares of the Company has been suspended since April 2004 (“Suspension”), the Company had frequently proposed dividends over the past seven years. In addition to the various dividend proposals, the Company had also arranged to distribute gifts to its shareholders. The gift distributions made in the years 2007, 2008 and 2009 were well accepted by shareholders. To ease the financial burden of the shareholders, as a broker firm, the Group also waived the handling charges that shareholders of the Company were required to pay in relation to the dividend proposals during the Suspension.

The Board adopts an open and transparent communication policy as a way to enhance corporate governance. The Board aims to provide the Company’s shareholders and the public with the necessary information for them to form their own judgement on the Company. Corporate communication materials such as annual reports, interim reports and circulars are issued in printed form and are also available in electronic format on the websites of the Company, The Stock Exchange of Hong Kong Limited and irasia.com.

Accountability and Audit

Financial Reporting

The Management reports on the Group’s financial position to the Board on a regular basis, and this reporting regime extends to the annual and interim results announcements of the Company, thereby enabling the Board from time to time to conduct a continued, balanced, clear and understandable assessment of the Group’s situation for determining strategy and fulfilling relevant compliance requirements

The Board acknowledges that it is responsible for preparing the accounts of the Group. As at 31 March 2011, the Directors of the Company were not aware of any material uncertainties relating to the events or conditions that may cast significant doubt regarding the Group’s ability to continue as a going concern.

For the responsibilities of the Company’s Auditor in respect of presenting the Group’s consolidated financial statements, please refer to the section titled “Independent Auditor’s Report” of this annual report

Internal Controls Review

It is the Board’s responsibility to ensure that the Company maintains sound and effective internal controls, whereby safeguarding its shareholders’ investment and the Group’s assets.

In FY2011, the Board conducted a review of the effectiveness of the internal controls system of the Company and its subsidiaries. There was no significant control failings found during the review.

Subject to the disclosures in this report, the Group has complied with the code provisions set out in the Code on Corporate Governance Practices contained in Appendix 14 to the Listing Rules throughout the year ended 31 March 2011.

On behalf of the Board