# OPERATING PRACTICES (CONTINUED)

# Moral Integrity and Anti-corruption

The Group adopted the code provisions set out in the Corporate Governance Code under Appendix 14 of the Listing Rules. Board of Directors members are responsible for corporate governance. The Board has delegated certain responsibilities to committees, including the Audit Committee, the Remuneration Committee and the Nomination Committee.

We have ethical commitments and advise our employees not to solicit or accept any advantage or bribes from our contractors or suppliers. We also require our employees to declare any conflict of interest and to avoid creating any possible conflict of interest whilst handling matters with our residents, commercial tenants or contractors or any other persons with whom the Company may have dealings. We also have our code of business conduct binding on all employees to avoid any impropriety. All employees must comply with the CAP 201 Prevention of Bribery Ordinance of Hong Kong when conducting all business and affairs of the Group.

For whistle-blowing procedures apply to all parties including internal as well as external informers. Any complaints or possible breach of this Code can be made either verbally or by confidentially writing to the Audit Committee; all issues will be treated promptly and fairly. In cases of suspected corruption or other criminal offences, a report may be made to the appropriate authority.

As at 30 September 2018, the Group was in compliance with all local rules and regulations relating to bribery, extortion, fraud and money laundering including CAP 201 Prevention of Bribery Ordinance. There were no concluded legal cases regarding corrupt practices brought against the Group or its employees.

# COMMUNITY

# Community Participation

As a good corporate citizen, the Group gives support to various community activities to bring positive environmental and social impacts to our tenants. We identify community events organised by different parties to provide support by various means. For example, the Group has joined the green recycling campaigns launched by the government to promote the importance of environmental protection to our tenants. By using various means of communication such as campaign posters, Facebook, email and notice boards, we trust that our community activities promotions can effectively reach our tenants.

# Focus Areas

To develop an awareness of protection and preservation regarding the environment amongst tenants, the Group has joined the “Skip lunch” campaign” supported by the Community Chest and Art jamming event collaboration with an art centre for free for tenants to join. In addition, for health promotion, we have supported the charity event “Let it beat” organised by World Heart Federation by both donation and charity walk. We have contributed in fund raising to support the Hong Kong College of Cardiology.

The board of directors (the “Board”) of Pokfulam Development Company Limited (the “Company”) is pleased to present this Corporate Governance Report for the year ended 30 September 2018 (the “Year”).

# CORPORATE GOVERNANCE PRACTICES

The Board considers good corporate governance practices to be essential to the promotion of the value of the Company’s shareholders (the “Shareholders”) value and investors’ confidence.

The Board has adopted all the code provisions (the “Code Provisions”) as set out in the Corporate Governance Code (the “Code”) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange” and the “Listing Rules”, respectively) as the corporate governance code of the Company.

During the Year, the Company has complied with all the Code Provisions as set out in the Code, except for Code Provisions A.2.1 and A.4.1, details of which are explained below. The Company has committed to maintaining high corporate governance standards. The Company devotes considerable efforts to identify and formalize the best corporate governance practices suitable for the Company’s needs. In addition, the Company reviews regularly its organizational structure to ensure that operations are corresponding with good corporate governance practices as set out in the Code.

The key corporate governance principles and practices of the Company are summarized as follows:

# THE BOARD

# Responsibilities

The Board is responsible for leadership and control of the Company and oversees the businesses, strategic decisions and performance of the Company and its subsidiaries (the “Group”). The Board has also established Board committees and has delegated to these Board committees various responsibilities as set out in their respective terms of reference.

The Board reserves for its decisions all major matters of the Company, including approval and monitoring of all policy matters, overall strategies and budgets, internal control and risk management systems, material transactions (in particular those that may involve conflict of interests), financial reports, appointment of directors and other significant financial and operational matters.