SHANGHAI DASHENG AGRICULTURE FINANCE TECHNOLOGY CO., LTD. 
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SHANGHAI TONVA PETROCHEMICAL CO., LTD.*(a joint stock company incorporated in the People's Republic of China with limited liability)
(Stock code: 1103) Terms of Reference of the Remuneration and Assessment Committee of the Board of Directors I. General Provisions1.1 | In order to enhance the assessment and remuneration management system of the Directors and senior management (the "Managers") of Shanghai Tonva Petrochemical Co., Ltd. (the "Company") and optimize the Company's corporate governance structure, the Company specially establishes the Remuneration and Assessment Committee (the "Remuneration and Assessment Committee") of the board of Directors (the "Board") and formulates this Terms of Reference in accordance with the Company Law of the People's Republic of China (the "Company Law"), the Standard on Corporate Governance of Listed Companies, the Corporate Governance Code as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Articles of Association of Shanghai Tonva Petrochemical Co., Ltd. (the "Articles of Association") and other related regulations. | |
1.2 | The Remuneration and Assessment Committee is a body specifically set up by the Board, mainly responsible for formulating the standards of and conducting appraisal in respect of the Directors and Managers of the Company; and formulating and examining the remuneration policy and proposal of the Directors and Managers of the Company, and accountable to the Board. | |
1.3 | The Directors mentioned herein refer to the chairman of the Board, vice chairman and Directors who receive remuneration from the Company; Managers refer to the chief executive officer, vice president, financial controller and secretary to the Board engaged by the Board and other senior management proposed by the chief executive officer to the Board for approval. | |
II. | Con | stitution of the Remuneration and Assessment Committee |
* For identification purposes only
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2.3 The Remuneration and Assessment Committee shall have one chairman (i.e. the Chairman of the Remuneration and Assessment Committee) (the convener) who shall be an independent non-executive Director and shall preside over the work of the Committee. The Chairman of the Remuneration and Assessment Committee shall be elected by more than half of the members of the Remuneration and Assessment Committee.
2.4 The term of office of the Remuneration and Assessment Committee shall be consistent with that of the Board, and its members may be re-elected upon the expiry of the current term of office. If any member no longer hold office of a Director of the Company during his/her term of office, he/she shall automatically lose his/her identity as a member, and the vacancy shall be filled by the Committee in accordance with the aforesaid provisions from rule 2.1 to rule 2.3.
2.5 The Remuneration and Assessment Committee shall establish a working unit which shall specifically be responsible for providing information on the operation of the Company and the persons to be appraised, preparation for meetings of the Committee and implementing resolutions of the Committee.
3.1 The main duties and authorities of the Remuneration and Assessment Committee are as follows:
(1) formulate and review the assessment method and remuneration plans or proposals of the Directors based on their respective scope, responsibilities, significance and remuneration levels of similar positions in other comparable corporates, evaluate the performance and behaviours of the Directors, and make recommendations to the Board;
(2) formulate and review the assessment method and remuneration plans or proposals of the senior management of the Company based on their respective scope, responsibilities, significance and remuneration levels of similar positions in other comparable corporates, evaluate the performance and behaviours of the senior management and report to the Board for approval;
(3) remuneration plans or proposals primarily include but not limited to performance appraisal criteria, procedures and assessment system, and the main plan and system for rewards and punishments;
(4) make recommendations to the Board on the remuneration packages of individual executive directors and senior management; and on the remuneration of non-executive directors;
(5) review and approve compensation payable to executive Directors and senior management for any loss or termination of office or appointment to ensure that it is
consistent with contractual terms and is otherwise fair and not excessive;
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(6) review and approve compensation arrangements relating to dismissal or removal of Directors for misconduct to ensure that they are consistent with contractual terms and are otherwise reasonable and appropriate;
(7) ensure that no Director or any of his/her associates is involved in deciding his/her own remuneration;
(8) assess the fulfillment of duties of Directors and senior management of the Company and appraise their annual performance;
(9) monitor the implementation of remuneration system of the Company; and
(10) other matters authorised by the Board.
3.2 The Remuneration and Assessment Committee is accountable to the Board, its proposals is subject to the approval from the Board.
3.3 The Board is entitled to reject remuneration plans or proposals not in line with shareholders'
interests.
3.4 The Remuneration and Assessment Committee has the authorities to request adequate support from the management staff of all ranks of the Company for its work and to request them to answer the questions it raised in a prompt and comprehensive manner.
3.5 Members of the Remuneration and Assessment Committee shall conduct a yearly review on whether the decision-making procedures for remuneration of Directors and senior management are complying with rules, based on reasonable grounds and in the interests of the Company and all shareholders and whether the content disclosed in the annual report on the remuneration of Directors and senior management is consistent with the reality. The Committee shall issue reports and submit to the Board.
4.1 The working unit under the Remuneration and Assessment Committee shall be responsible for the preliminary preparation work for the decision-making of the Committee and provide the following information:
(1) the fulfillment of the Company's major financial and operational targets;
(2) scope of work and main responsibilities of each of the senior management of the
Company;
(3) the fulfillment of targets listed in performance assessment system of the Directors and senior management of the Company;
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(4) the performance and efficiency of the Directors and senior management of the
Company in capability of business innovation and profit-making; and
(5) the basis of calculation of proposed remuneration allocation plan and allocation method based on the performance of the Company.
4.2 The appraisal procedures of the Remuneration and Assessment Committee on the Directors and senior management include:
(1) Directors and senior management of the Company should provide reports on their own work and self-assessment to the Committee;
(2) the Committee shall assess the performance of the Directors and senior management in accordance with appraisal criteria and procedures;
(3) a proposal on the amount of remuneration and method of reward for Directors and senior management based on the results of work performance appraisals and the remuneration distribution policy shall be made and, after the same being voted and passed, shall be reported to the Board.
5.1 The Remuneration and Assessment Committee shall meet at least once a year. Notice of each meeting shall be given to all members of the Committee 10 days prior to the date of the meeting. The Chairman of the Committee shall preside over the meeting who, if unable to attend the meeting, may appoint another member (being independent non-executive Director) to chair the meeting. The aforesaid period of notification could be waived upon unanimous consent by all members of the Committee.
5.2 The quorum for a meeting of the Remuneration and Assessment Committee shall be two-thirds or above of its members. Each member shall be entitled to one vote. A resolution shall be passed by more than half of its members.
5.3 The Remuneration and Assessment Committee shall vote by a show of hands or by a poll.
Extraordinary meeting(s) could conduct voting by means of communication.
Unless otherwise specified in the Articles of Association or this Terms of Reference, at the extraordinary meetings, provided that members may fully express their opinions, the Remuneration and Assessment Committee may vote by facsimile and the resolutions shall be adopted after being signed by the attending members.
If voting by communication means is adopted, the members of the Committee who have signed on the meeting resolutions shall be deemed to have attended the relevant meeting and have agreed to the contents of the resolutions.
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5.4 The Remuneration and Assessment Committee could invite Directors, supervisors and other senior management of the Company to attend its meetings when necessary. Directors who are not members of the Committee shall not have the voting rights on the resolutions being discussed.
The Remuneration and Assessment Committee may engage intermediaries to provide professional advice for its decision-making if necessary and the reasonable expenses incurred shall be borne by the Company.
5.5 The procedures, voting methods and resolutions passed at the Remuneration and Assessment Committee meetings must comply with relevant laws, administrative rules, the Articles of Association as well as this Terms of Reference
5.6 Each meeting of the Remuneration and Assessment Committee shall have minutes with signatures of all attending members. Minutes and resolutions of each meeting should be kept by the secretary to the Board for a period not less than 10 years.
5.7 The resolutions and voting results passed by the meeting of the Remuneration and
Assessment Committee should be reported to the Board in written form.
5.8 Members attending the meeting shall have an obligation to keep all matters discussed thereof confidential, and shall not disclose the relevant information without permission.
5.9 When the Remuneration and Assessment Committee discusses and considers matters relating to the candidates for Directors and senior management members, any member of the Committee to whom any of the followings is applicable shall be deemed to be interested in such matters and shall apply in advance to the Committee for withdrawal:
(1) he or she is proposed to be appraised;
(2) his or her close relative(s) is/are proposed to be appraised;
(3) other circumstances that may affect his or her objective and fair judgments.
5.10 In case of the occurrence of any of the above circumstances, the Remuneration and Assessment Committee, when discussing such matters, shall apply the rule of abstaining from voting. Specific procedures for withdrawal and voting are as follows:
(1) the interested member shall voluntarily apply for withdrawal, otherwise other members may ask him/her to do so;
(2) in case of any disagreement as to whether there is such an interest, such disagreement will be resolved by over half of the members of the Committee other than the interested member;
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(3) the interested member shall not participate in the discussion and voting on the matter that he or she is interested in and shall withdraw by leaving the meeting site temporarily or by other means; and
(4) in the event that the Remuneration and Assessment Committee is unable to reach a resolution on a proposal due to the withdrawal of the interested members, it shall pass a resolution to submit such proposal to the Board for consideration and do so timely. The Committee shall state its consideration and the opinions of non-interested members on the proposal in the resolution to submit such proposal to the Board.
5.11 When the Committee is assessing or discussing the remuneration of a specific Director, such
Director should abstain from the meeting.
6.1 This Terms of Reference shall come into effect on the date of approval by the Board.
6.2 Any matters not covered in this Terms of Reference shall be carried out in accordance with relevant laws, administrative rules, regulatory documents and the Articles of Association; where this Terms of Reference conflict with current or subsequent promulgated laws, administrative rules, regulatory documents or the legally revised Articles of Association, the said laws, rules, documents and Articles of Association shall prevail. And it should be revised promptly and be reported to the Board for consideration and approval.
6.3 The right to interpret this Terms of Reference shall be vested in the Board. Shanghai, PRC, 31 December 2013
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