Responsibilities of Board
The Board meets regularly and is responsible for strategy, performance, approval of major capital projects and the framework of internal controls. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board meetings, and all Directors have access to the advice and services of the Company Secretary,who is responsible for ensuring that Board procedures are followed and that applicable rules and regulationsare complied with. The Articles of Association provide that at each annual general meeting one third of theDirectors who are subject to retirement by rotation shall retire from office, and they may then be re-appointed.
Audit Committee
The audit committee comprises Richard Bennett (Chairman) and Yu Weijun. The committee is responsible for ensuring the appropriate financial reporting procedures are properly maintained and reported on, and for meeting with auditors and reviewing their reports and accounts and the Company's internal controls.
Remuneration Committee
The remuneration committee comprises, Yu Weijun and Tang Zhaoxing. The committee is responsible for reviewing the performance of the executive directors, setting their remuneration levels, determining the payment of bonuses, recommending the awards to be made under the China New Energy Limited Employee Benefit Trust, determining whether to recommend that the Company should additionally adopt any further form of share option plan and (if so) considering the grant of options under any such plan(in particular, the price per share and the performance standards which may apply to any such grant.
Corporate Governance
As a Company listed on AIM, the company is not governed by the UK Code of Corporate Governance adopted by the London Stock Exchange (‘the Code’) but is required to operate principles of good governance and best practice. Accordingly, the directors are committed to the Code and believe that an effective system of corporate governance supports the enhancement of shareholder value.
The Directors acknowledge the importance of the Code and intend to apply its principles so far as is practicable taking into account the Company’s size and stage and development.
Directors share dealing code
The Company has adopted, and will operate where applicable, a share dealing code for Directors and applicable employees under the equivalent terms to those provided by Rule 21 of the AIM Rules for Companies.
Takeover code
The Company is incorporated and registered outside of the UK. For these reasons the Takeover Code does not apply to the Company, and Shareholders will not be offered any protections under the Takeover Code.
Internal Financial Control
The Board is responsible for establishing and maintaining CNE's internal financial control system and places importance on maintaining strong controls. The key procedures implemented by the Directors
provide effective internal financial controls as follows:
1.the Company's organisational structure has clear lines of responsibility;
2.CNE prepares a comprehensive annual budget that is approved by the Board;
3.quarterly results are reported against the annual budget and variances are closely monitored by the Directors;
4.the Board is responsible for identifying the major business risks faced by CNE and for determining appropriate courses of action to manage such risks; and
5.members of the Board of CNE are also members of its subsidiaries’ boards, so are actively involved in the subsidiaries board meetings.
The Board recognises, however, that such a system of internal financial control can only provide a reasonable (but not an absolute) assurance against material misstatement or loss. The Board continues to review the effectiveness of the internal financial control systems operated by CNE.
