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The following is an excerpt from a 20-F SEC Filing, filed by CLP HOLDINGS LTD on 6/22/2007.
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CLP HOLDINGS LTD - 20-F - 20070622 - DIRECTORS_AND_OFFICERS

ITEM 6.        DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.  DIRECTORS AND SENIOR MANAGEMENT

Under our Articles of Association, our business is managed under the direction of the Board of Directors (the Board). Our Chief Executive Officer represents us and administers our day-to-day business in all matters not specifically designated as the responsibilities of the Board of Directors.

The presence of three Board members at a Board meeting constitutes a voting quorum and resolutions can be passed by a majority of the Board members then present. The Board met five times in 2006.

The following table shows information regarding all of our Directors and Executive Officers as of May 31, 2007.

 

Name

   Age    Position    Year
Appointed to
Current Title
   Year
Appointed as
Director of
our Company

BOARD OF DIRECTORS

           

Non-executive Directors

           

The Hon. Sir Michael Kadoorie

   65    Chairman    1997    1997

W. E. Mocatta

   54    Vice Chairman    1999    1997

J. S. Dickson Leach

   61    Director    1997    1997

R. J. McAulay

   71    Director    1997    1997

J. A. H. Leigh

   53    Director    1997    1997

R. Bischof

   65    Director    1997    1997

I. D. Boyce

   62    Director    1999    1999

P. C. Tan

   60    Director    2003    2003

Jason Whittle

   39    Director    2006    2006

Y. B. Lee (1)

   60    Director    2007    2003

Independent Non-executive Directors

           

The Hon. Sir S. Y. Chung

   89    Director    1997    1997

William K. Fung

   58    Director    1997    1997

V. F. Moore

   60    Director    2002    1997

Hansen C. H. Loh

   69    Director    2000    2000

Paul M. L. Kan

   60    Director    2001    2001

Judy Tsui Lam Sin Lai

   52    Director    2005    2005

Sir Roderick Ian Eddington

   57    Director    2006    2006

Peter T. C. Lee (2)

   53    Director    2007    2007

Chief Executive Officer

           

Andrew Brandler

   51    Chief Executive Officer    2000    2000

 

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Name

  Age   

Position

   Year
Appointed to
Current Title
   Year
Appointed as
Director of
our Company

Executive Directors

          

Peter P. W. Tse

  56   

Group Executive Director &

Chief Financial Officer

   2000    2000

Peter W. Greenwood ( 3 )

  50    Executive Director    2007    2007

Alternate Director

          

Bradley W. Corson

(Alternate to P. C. Tan)

  45   

Chairman, ExxonMobil

Energy Limited

   2004    2004

Executive Officers

          

Andrew Brandler

  51    Chief Executive Officer    2000    2000

Peter P. W. Tse

  56   

Group Executive Director &

Chief Financial Officer

   2000    2000

Peter W. Greenwood

  50    Executive Director - Strategy    2007    2007

Betty Yuen

  49   

Group Director –

Managing Director

Hong Kong

   2002   

Richard McIndoe

  42   

Group Director –

Managing Director

Australia

   2006   

Shen Zhongmin

  44    Managing Director – China    2006   

Rajiv Mishra

  41    Managing Director – India    2005   

Mark Takahashi

  48   

Chief Executive Officer –

OneEnergy Limited

   2006   

Peter A. Littlewood

  56    Group Director – Operations    2005   

Stefan Robertsson

  42   

Group Director – Corporate

Finance and Development

   2006   

 

(1)

Dr. Y. B. Lee retired as an Executive Director on January 31 2007 and was redesignated as a Non-executive Director with effect from February 1, 2007.

(2)

Mr. Peter T. C. Lee was appointed as an Independent Non-executive Director with effect from March 1, 2007.

(3)

Mr. Peter W. Greenwood was appointed as an Executive Director with effect from March 1, 2007.

 

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At the Annual General Meeting each year, one-third of the Directors for the time being or, if the number is not a multiple of three, the number nearest to but greater than one-third (who have been longest in office since their last election or appointment) shall retire and are eligible for re-election in accordance with our Articles of Association.

Messrs. Jason Whittle, Peter T. C. Lee and Peter W. Greenwood, being new Directors appointed by the Board, retired at the Annual General Meeting held on April 24, 2007 in accordance with Article 109 of the Company’s Articles of Association and, being eligible, were elected as our Directors.

In accordance with Article 103 of our Articles of Association, Messrs. V. F. Moore, R. Bischof, Hansen Loh, W. E. Mocatta, Peter P. W. Tse and Andrew Brandler retired by rotation and, being eligible, were re-elected as our Directors at our Annual General Meeting held on April 24, 2007.

NON-EXECUTIVE DIRECTORS

The Hon. Sir Michael Kadoorie, GBS, LLD (Hon.)

The Hon. Sir Michael Kadoorie is a recipient of the Gold Bauhinia Star from the Government of the HKSAR and an Officier de la Légion d’Honneur, Commandeur de l’Ordre de Léopold II and Commandeur de l’Ordre des Arts et des Lettres. He is the Chairman of The Hongkong and Shanghai Hotels, Ltd., Heliservices (Hong Kong) Ltd. and CLP Research Institute Ltd., a Director of Sir Elly Kadoorie & Sons Ltd., an Independent Non-executive Director of Hutchison Whampoa Ltd. as well as an Alternate Director of Hong Kong Aircraft Engineering Company Limited. He is the brother-in-law of a fellow Director, Mr. R. J. McAulay. Since 1967, The Hon. Sir Michael Kadoorie had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

W. E. Mocatta, FCA

Mr. Mocatta is a Fellow of The Institute of Chartered Accountants in England and Wales. He is an Executive Director of Sir Elly Kadoorie & Sons Ltd. He is the Chairman of CLP Power Hong Kong Ltd., CLP Properties Ltd. and Kar Ho Development Co. Ltd. and Deputy Chairman of Hong Kong Pumped Storage Development Co., Ltd. He is also an Alternate Director of Hutchison Whampoa Ltd., as well as a Director of The Hongkong and Shanghai Hotels, Ltd. and other companies in Hong Kong. Since 1993, Mr. Mocatta had been a Director of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

J. S. Dickson Leach, MBA, FCA

Mr. Dickson Leach holds an MBA degree from Columbia University and is a Fellow of The Institute of Chartered Accountants in England and Wales. He is an Independent Non-executive Director of Hong Kong Aircraft Engineering Co. Ltd. and a Director of China Construction Bank (Asia) Corporation Ltd. Since 1978, Mr. Dickson Leach had been a Director of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

R. J. McAulay, MA, CA

Mr. McAulay holds an MA degree from the University of Glasgow and is a Member of The Institute of Chartered Accountants in Scotland. He is the brother-in-law of The Hon. Sir Michael Kadoorie, our Chairman. Mr. McAulay is a Director of Sir Elly Kadoorie & Sons Ltd. and a Non-executive Director of The Hongkong and Shanghai Hotels, Ltd. He is a trustee or council member

 

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of a number of commercial, artistic or charitable organizations, in Hong Kong and elsewhere. Since 1968, Mr. McAulay had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

J. A. H. Leigh

Mr. Leigh is a lawyer by training. Prior to joining the CLP Group, Mr. Leigh was in private practice as a solicitor in Hong Kong and the United Kingdom. He was the Senior Legal Advisor, Company Secretary and General Manager - Corporate Affairs in the CLP Group between 1986 and 1996. Mr. Leigh is a Director of the Hongkong and Shanghai Hotels, Ltd. He is also a Director of Sir Elly Kadoorie & Sons Ltd. overseeing a number of the Kadoorie Family’s interests in Hong Kong and overseas. Since 1997, Mr. Leigh had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

R. Bischof

Educated in Switzerland, Mr. Bischof has been engaged in the field of asset management and private banking in Hong Kong since 1971, including several years with the former Swiss Bank Corporation. Prior to coming to Hong Kong, Mr. Bischof also worked for a leading British investment bank in London, Madrid and New York. He joined Sir Elly Kadoorie & Sons Ltd. as a Director in 1996. He is also the Chairman of Nanyang Holdings Ltd. Since 1997, Mr. Bischof had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

I. D. Boyce, FCA

A chartered accountant from the United Kingdom, Mr. Boyce spent 18 years with the Warburg group, six years of which were as Managing Director of East Asia Warburg in Hong Kong. Mr. Boyce was Managing Director (Vice Chairman from April 1998) of Schroders Asia before joining Sir Elly Kadoorie & Sons Ltd. in 1999, of which he became Chairman in April 2006. Mr. Boyce is also the Deputy Chairman of The Hongkong and Shanghai Hotels, Ltd. and a Non-executive Director of Tai Ping Carpets International Ltd.

P. C. Tan, BSc, MBA

Mr. Tan is the Chairman of ExxonMobil China Investment Co., Ltd. and ExxonMobil Hong Kong Ltd. with oversight responsibility for ExxonMobil’s businesses in the Chinese mainland and Hong Kong. Mr. Tan graduated from the University of Singapore as a Bachelor of Science (Applied Chemistry) and has an MBA degree from New York University. He joined Mobil Oil in Singapore in 1970 and worked in Singapore, the United States and Australia. Prior to his present assignment, Mr. Tan was head of ExxonMobil’s Corporate Planning Department located in Dallas.

Jason Holroyd Whittle, MA

Mr. Jason Whittle holds a Master of Arts degree from the University of Pompeu Fabra in Barcelona, Spain. He is the son-in-law of Mr. R. J. McAulay, a Non-executive Director and a substantial shareholder of our Company. Mr. Whittle is a Director of Sir Elly Kadoorie & Sons Ltd. and the Managing Director of LESS Ltd., which is a general partner of a venture capital fund of funds focused on the environmental sector.

 

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Y. B. Lee, BSc, MSc, PhD, DIC, C.Eng., MIEE, FHKIE

Dr. Lee holds a BSc degree in Electrical Engineering from the University of Hong Kong, an MSc degree from Imperial College, University of London and a PhD from the University of Bath. He is a Chartered Engineer, a Fellow of the Hong Kong Institution of Engineers and Honorary Fellow of the Association of the Electricity Supply Industry of East Asia and the Western Pacific. He first joined our Group in 1976 and retired as an Executive Director in 2007.

INDEPENDENT NON-EXECUTIVE DIRECTORS

The Hon. Sir S. Y. Chung, GBM, GBE, PhD, FREng., JP

Sir S. Y. is the Chairman and an Independent Non-executive Director of Transport International Holdings Limited (previously known as The Kowloon Motor Bus Holdings Ltd.), a Director of Sun Hung Kai Properties Ltd. as well as other companies in Hong Kong. He has contributed significantly to Hong Kong’s political, industrial, social and tertiary education fields for over four decades. He was Senior Member of Hong Kong Legislative Council (1974-78), Executive Council (1980-88), and again Convenor of the HKSAR Executive Council (1997-99). He was deeply involved in the Sino-British negotiations on Hong Kong’s future (1982-85) and the establishment of the HKSAR (1993-97). Since 1967, Sir S. Y. Chung had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

William K. Fung, OBE, DBA, MBA, BSE, JP

Dr. Fung is Group Managing Director of Li & Fung Ltd., and has held key positions in major trade associations. He holds a Bachelor of Science degree in Engineering from Princeton University, an MBA degree from the Harvard Graduate School of Business and an Honorary Doctorate degree of Business Administration awarded by the Hong Kong University of Science and Technology. He is also a Non-executive Director of Integrated Distribution Services Group Ltd. and Convenience Retail Asia Ltd. and an Independent Non-executive Director of HSBC Holdings plc, VTech Holdings Ltd. and Shui On Land Ltd. Since 1994, Dr. Fung had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

V. F. Moore, BBS, FCA, FCPA

Mr. Moore is an Executive Director of CITIC Pacific Ltd. and CITIC Hong Kong (Holdings) Ltd. In addition to CLP, he is a Non-executive Director of Cathay Pacific Airways Ltd., Chairman of New Hong Kong Tunnel Company Ltd. and Western Harbour Tunnel Company Ltd., and Deputy Chairman of CITIC Capital Markets Holdings Ltd. Since 1997, Mr. Moore had served on the Board of China Light & Power Company, Ltd., the holding company of the CLP Group prior to our Group reorganization in 1998.

Hansen C. H. Loh

Mr. Loh is the Managing Director of Wyler Textiles Ltd. and a Non-executive Director of CITIC Pacific Ltd., of which he is also a member of the Audit Committee.

Paul M. L. Kan, CBE, Comm OSSI, JP, MBA

Mr. Kan holds an MBA degree from the Chinese University of Hong Kong, an Honorary Doctor of Humane Letters degree from the University of Northern Virginia in USA., and an Honorary Fellow from the Academy of Chinese Studies in China. He is the founder

 

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and the Chairman of Champion Technology Holdings Ltd., DIGITALHONGKONG.COM and Kantone Holdings Ltd., all listed on the Hong Kong Stock Exchange.

Tsui Lam Sin Lai Judy, PhD, MSc, BCom, FCPA, FCPA(Aust.), CA

Professor Judy Tsui is currently Dean of the Faculty of Business, Director of the Graduate School of Business and Chair Professor of Accounting at The Hong Kong Polytechnic University. She holds a Bachelor of Commerce in Accounting and Management Information Systems from the University of British Columbia, a Master of Science in Accounting and Finance from the London School of Economics and Political Science and a Ph.D in Accounting from The Chinese University of Hong Kong. Professor Tsui is also an Independent Non-executive Director of China Vanke Company Limited, a listed company on the Shenzhen Stock Exchange.

Sir Roderick Ian Eddington

Sir Rod Eddington was the 1974 Rhodes Scholar at the University of Western Australia. He completed a D Phil in the Department of Engineering Science at Oxford University. Sir Rod Eddington is a Non-executive Director of News Corporation, John Swire & Sons Pty Limited, Rio Tinto plc and Allco Finance Group Limited. He is the Non-executive Chairman for Australia and New Zealand of JP Morgan Chase Bank N. A. and also a Director of CLP Australia Holdings Pty Ltd. Sir Rod Eddington was the Chief Executive of British Airways plc from 2000 until he retired on September 30, 2005. He has close connection with Hong Kong through his previous directorships with Cathay Pacific Airways Limited, Swire Pacific Limited and Hong Kong Aircraft Engineering Company Limited during the period from 1988 to 1996.

Peter T. C. Lee, JP

Mr. Lee holds a Bachelor of Science Degree in Civil Engineering from the University of Manchester, United Kingdom. He is also a qualified solicitor of the Supreme Court of England and Wales. Mr. Lee is the Chairman of Hysan Development Company Limited. He is also a Non-executive Director of Cathay Pacific Airways Limited, Hang Seng Bank Limited, SCMP Group Limited, Maersk China Limited, and a director of a number of other companies. Mr. Lee is also Vice President of the Real Estate Developers Association of Hong Kong, Council Member of Asia Business Council, Council Member of the Employers’ Federation of Hong Kong, Advisory Board Member of The Salvation Army Hong Kong, International Council member of INSEAD and the Governor of Lee Hysan Foundation.

CHIEF EXECUTIVE OFFICER

Andrew Brandler, MA, MBA, ACA

Mr. Brandler holds an MA degree from Cambridge University, MBA degree from Harvard Business School, and is a Member of The Institute of Chartered Accountants in England and Wales. He joined our Group as the Group Managing Director and Chief Executive Officer in May 2000. Prior to joining our Group, Mr. Brandler was an investment banker, specializing in the energy and utility sectors and was the Head of Asia-Pacific Corporate Finance with Schroders, based in Hong Kong. Mr. Brandler is the Deputy Chairman of the Hong Kong General Chamber of Commerce.

 

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GROUP EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER

Peter P. W. Tse, BSc (Eng.), MSc, FCA, FCPA

Mr. Tse holds a BSc degree in Mechanical Engineering from the University of Hong Kong and an MSc degree from the University of Stirling in Scotland. He is a Fellow of The Institute of Chartered Accountants in England and Wales and a Fellow of The Hong Kong Institute of Certified Public Accountants. Mr. Tse is the Chief Financial Officer of the Group. Before joining our Group in 1981, he worked with Deloitte & Co. in London and Hong Kong, and the Swire Group.

EXECUTIVE DIRECTOR - STRATEGY

Peter William Greenwood, MA, FCS, FCIS

Mr. Greenwood’s principal focus is to work on matters of a strategic nature impacting the overall direction of the CLP Group. He holds an MA degree in law from the University of Cambridge and a diploma in German law and legal system from the University of Tuebingen and the Justice Ministry of North Rhine-Westphalia. In 2006, he completed full-time study for an MA degree in War Studies from King’s College, London University. He is a Fellow of The Institute of Chartered Secretaries in England and a Fellow of The Hong Kong Institute of Chartered Secretaries. He is a solicitor in England and Wales and in Hong Kong, as well as being qualified as an avocat in France. Prior to stepping down in 2005, Mr. Greenwood was an Executive Director (since 2001), the Company Secretary and Corporate Counsel (since 1996) of CLP Holdings. As such he was responsible for the CLP Group’s corporate secretarial and legal affairs, including advising the Chairman and Board on corporate governance issues and compliance. Before joining the CLP Group in 1995, Mr. Greenwood was a Senior Commercial Lawyer with the Provisional Airport Authority, Hong Kong, and prior to that was in private practice as a solicitor with leading corporate law firms in London, Hamburg, Hong Kong and Paris.

ALTERNATE DIRECTOR

Bradley W. Corson, BS (Chemical Engineering)

Mr. Corson is the Chairman of ExxonMobil Energy Ltd., Castle Peak Power Co. Ltd. and Hong Kong Pumped Storage Development Co., Ltd. as well as a Director of CLP Power Hong Kong Ltd. and CLP Research Institute Ltd. Mr. Corson holds a Bachelor of Science degree in Chemical Engineering from Auburn University. He joined Exxon Mobil Corporation (then Exxon Corporation) in 1983 and has broad experience in the oil and gas industry including operations, technical, environmental, commercial, strategic planning and human resources. He was assigned to work in Hong Kong as the Chairman of ExxonMobil Energy Ltd. in April 2004.

EXECUTIVE OFFICERS

For the biographical details of Mr. Andrew Brandler, Mr. Peter P. W. Tse and Mr. Peter W. Greenwood, please refer to the details shown above.

Betty Yuen, B.Comm., CA (Canada)

Group Director - Managing Director Hong Kong

Mrs. Yuen has overall responsibility for the operations of the Hong Kong business. She began her career in public accounting in Canada. She spent 13 years with ExxonMobil Energy Ltd. and her last position there was Executive Director – Finance and

 

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Development before joining CLP Power Hong Kong Ltd. as Director – Finance and Planning in 1999. Mrs. Yuen became Managing Director, CLP Power Hong Kong Ltd. in April 2002.

Richard McIndoe, MA, MBA

Group Director - Managing Director Australia

Before taking up his current position as Managing Director of TRUenergy in mid 2006, Mr. Mclndoe was responsible for the development and management of CLP Group’s international electricity business in the Asia Pacific region. Mr. McIndoe joined the CLP Group in 2002. He has extensive background in business development and commercial asset management in the regional electricity industry. He holds an MA degree from the University of Cambridge and an MBA degree from INSEAD Business School in France.

Shen Zhongmin, EMBA, MA, LLM, BSc

Managing Director – China

Mr. Shen is responsible for the Group’s activities in the Chinese mainland. Before taking up this position in 2006, he was an Executive Director and Chief Operating Officer of China Resources Power Holdings Company Limited. Mr. Shen was a Senior Vice President of Sithe Asia Holdings Limited and the Managing Director of Sithe China Holdings Limited. He holds Bachelor of Science, Master of Law and Executive Master of Business Administration degrees from Beijing University and a Master of Arts degree in Economics from the University of Tennessee.

Rajiv Ranjan Mishra, MBA

Managing Director - India

Mr. Mishra is responsible for asset management and business development of CLP’s investments in India. He joined the CLP Group in 2002 and has 11 years’ experience in the power industry, both in India and internationally, mostly involved in project financing, investment appraisal, finance and accounting and general management. Mr. Mishra assumed his current position in July 2005. He holds a Bachelor degree in Engineering (first class distinction) and an MBA degree from the Indian Institute of Management, Lucknow.

Mark Takahashi, BSc (Eng.), MBA

Chief Executive Officer - OneEnergy Limited

Before taking up the overall responsibility for the business of OneEnergy Limited, Mr. Takahashi was the Group Director - Corporate Development responsible for development and financing activities, including project development, acquisitions, project finance and treasury. He joined CLP Holdings in December 2003. He has over 18 years of experience in the power industry in the United States and in Asia. He holds an MBA degree from Wharton School, University of Pennsylvania and a BSc degree in civil engineering from the University of Colorado.

Peter Albert Littlewood, MA

Group Director – Operations

Mr. Littlewood is responsible for CLP Group’s Construction, Operations and Fuel Procurement activities. He joined the CLP Group in 1977 and has 34 years’ experience in the power industry, mostly involved in project development, project management, operations and general management. He holds an MA degree in Engineering (first class honours) from the University of Cambridge and has completed the Harvard Business School Advanced Management Program.

 

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John Stefan Robertsson

Group Director - Corporate Finance and Development

Mr. Robertsson is responsible for corporate finance and development activities throughout the CLP Group. Before taking up his current position, Mr. Robertsson was the Head of Corporate Finance and Treasury for our international business. He has over 14 years of experience in business development, merger and acquisition, corporate finance, and project finance in the Asia-Pacific region. Mr. Robertsson earned his degree in Financial Economics at the Stockholm School of Economics.

APPOINTMENT OF DIRECTORS

CLP follows a formal, considered and transparent procedure for the appointment of new directors. Appointments are first considered by the Nomination Committee. The recommendations of the Committee are then put to the full Board for decision. Thereafter, all Directors are subject to election by shareholders at the Annual General Meeting (AGM) in their first year of appointment.

As approved by shareholders at the AGM in 2005, all Non-executive Directors are appointed for a term of not more than four years. This term is subject to curtailment upon that Director’s retirement by rotation and re-election by shareholders. One-third of the Directors, including both Executive and Non-executive Directors, are required to retire from office at the AGM in each year. A retiring director is eligible for re-election.

All Non-executive Directors have a formal letter of appointment, modelled on the letter of appointment in the “Higgs Report” in the U.K. on the “Review of the Role and Effectiveness of Non-Executive Directors”.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

The posts of Chairman and CEO are held separately by The Hon. Sir Michael Kadoorie and Mr. Andrew Brandler respectively. This segregation ensures a clear distinction between the Chairman’s responsibility to manage the Board and the CEO’s responsibility to manage the Company’s business. The respective responsibilities of the Chairman and CEO are more fully set out in the CLP Code on Corporate Governance (CLP Code).

 

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B.  COMPENSATION

The main elements of CLP’s remuneration policy have been in place for a number of years and are incorporated in the CLP Code.

 

·  

No individual should determine his or her own remuneration;

·  

Remuneration should be broadly aligned with companies with whom CLP competes for human resources; and

·  

Remuneration should reflect performance, complexity and responsibility with a view to attracting, motivating and retaining high performing individuals and promoting the enhancement of the value of the Company to its shareholders.

NON-EXECUTIVE DIRECTORS – PRINCIPLES OF REMUNERATION

The above policies apply to the remuneration of the Non-executive Directors, with appropriate adjustments to reflect good corporate governance practices, the particular nature of their duties and that they are not Company employees.

We have taken into account the Report of the Committee on the Financial Aspects of Corporate Governance of December 1992 (The Cadbury Report) which noted that the calibre of non-executive directors was especially important in setting and maintaining standards of corporate governance. The “Review of the Role and Effectiveness of Non-executive Directors” (The Higgs Report) of January 2003 concluded that “the level of remuneration appropriate for any particular non-executive director should reflect the likely workload, the scale and complexity of the business and the responsibility involved” and that “it may be helpful in assessing remuneration for non-executive directors to use as a benchmark the daily remuneration of a senior representative of the company’s professional advisors”. In Hong Kong, the Code on Corporate Governance Practices (Appendix 14 to the Listing Rules) includes the principle that an issuer should disclose information relating to its directors’ remuneration policy and that there should be a formal and transparent procedure for fixing the remuneration packages of all directors. The Listing Rules note that an independent non-executive director must not be financially dependent on the issuer.

In light of these considerations, CLP’s Non-executive Directors are paid fees in line with market practice, based on a formal independent review undertaken no less frequently than every three years. Those fees were previously reviewed at the beginning of 2004 (the 2004 Review). Accordingly, a new review was undertaken at the beginning of 2007 (the 2007 Review). The methodology adopted in the 2007 Review was the same as that used in the 2004 Review and as explained to shareholders in the CLP Code. The methodology is aligned with the recommendations of the Higgs Report and includes:

 

·  

the application of an hourly rate of HK$4,000 as an average of the partner rates charged by legal and financial advisors and accounting and consulting firms in providing professional services to CLP (there was no increase in this rate between the 2004 Review and the 2007 Review);

 

·  

the calculation of the time spent by Non-executive Directors on CLP’s affairs (including attendance at Board and Board Committee meetings, reading papers, etc.). This exercise revealed a significant increase between 2004 and 2007 in the time spent by Non-executive Directors in performing their duties on the Board and on Board Committees; and

 

·  

an additional fee of about 40% and 10% per annum for the Chairmen of the Board/Board Committees and the Vice Chairman of the Board respectively (reflecting the additional workload and responsibility which these offices involve).

 

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The resulting fees were then benchmarked against those paid by leading listed companies in Hong Kong and major utility companies listed on the London Stock Exchange. The methodology and resulting fees were independently reviewed by an international law firm, Stephenson Harwood & Lo (SHL). Further to CLP’s commitment to the adoption of a transparent methodology for determining Non-executive Directors’ remuneration, the 2007 Review and the opinion of SHL on that Review are available on our website at www.clpgroup.com

In line with our policy that no individual should determine his or her own remuneration, the revised fees set out in the table below had been proposed by Management, reviewed by SHL and approved by our shareholders at the Annual General Meeting on April 24, 2007. In this respect, our approach goes beyond that required by law or regulation in Hong Kong or the provisions of the Hong Kong Stock Exchange’s Code on Corporate Governance Practices.

 

   Revised fees per annum
(w.e.f. April 25, 2007)
HK$
   Current fees per
annum

HK$

Board

     

Chairman

   430,000    280,000

Vice Chairman

   340,000    220,000

Non-executive Director

   310,000    200,000

Nomination Committee*

     

Chairman

   14,000    10,000

Member

   10,000    10,000

Audit Committee

     

Chairman

   220,000    140,000

Member

   160,000    100,000

Finance & General Committee

     

Chairman

   215,000    110,000

Member

   155,000    80,000

Human Resources & Remuneration Committee

     

Chairman

   40,000    14,000

Member

   30,000    10,000

Regulatory Affairs Committee**

     

Chairman

   20,000    30,000

Member

   15,000    20,000

Provident & Retirement Fund Committee***

     

Chairman

   14,000    Nil

Member

   10,000    Nil

Social, Environmental & Ethics Committee

     

Chairman

   45,000    30,000

Member

   35,000    20,000

China Committee

     

Chairman

   60,000    56,000

Member

   45,000    40,000

_______________

 

  * A nominal fee has been maintained for the Chairman and Members of the Nomination Committee.
  ** In light of the importance of the post-2008 regulatory regime for our Hong Kong electricity business, matters relating to the Scheme of Control have been considered by the full Board during 2006 instead of being referred to the Regulatory Affairs Committee. The fees of the Regulatory Affairs Committee are therefore reduced as reflected in its average workload from 2004 to 2006.
  *** A nominal fee will be paid to the Chairman and Members of the Provident & Retirement Fund Committee, on which no Independent Non-executive Directors serve and which oversees the status and performance of the Group’s retirement funds for its employees.
  Note: Executive Directors and Management serving on the Board and Board Committees are not entitled to any Directors’ fees.

 

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The revised fees represent a significant percentage increase on those paid between 2004 and 2007. This is in line with a genuine and substantial increase in the workload shouldered by our Non-executive Directors (reflecting the growth in CLP’s business and increased regulatory requirements). The methodology applied in determining those fees is unchanged from that used in 2004 and publicly disclosed. We have also applied the methodology in a conservative manner. For example, we have not assumed any increase in Directors’ workload over the years to 2010 (despite the trend of past years) nor, in benchmarking those fees against other companies, have we assumed any ongoing increases in directors’ fees paid by those companies.

SENIOR MANAGEMENT – PRINCIPLES OF REMUNERATION

For the purposes of this Section, Senior Management means the Executive Directors together with the Group Director - Managing Director Hong Kong, the Group Director - Managing Director Australia, the Group Director - Operations, Chief Executive Officer - OneEnergy Limited, the Group Director - Corporate Finance and Development, Managing Director - India and Managing Director - China. In determining the remuneration of members of Senior Management, the remuneration data of comparable positions in the market, including local and regional companies of comparable size, complexity and business scope, are referenced. This is consistent with our remuneration policy to align with companies with whom CLP competes for human resources. Achievement of performance plays a significant part in individual rewards as part of our policy to attract, motivate and retain high performing individuals. The four components of remuneration of members of Senior Management are explained below, including the proportion of total remuneration which each component represented in 2005 and 2006:

 

Components   

Explanation

 

         2006    2005

Base

Compensation

  

Base Compensation accounts for approximately 56% of total remuneration. It is reviewed annually taking into consideration the competitive market position, market practice and the individual performance of members of Senior Management.

 

       56%    56%

Performance

Bonus

  

The levels of the performance bonus are set by the Human Resources & Remuneration Committee. No members of Senior Management serve on the Committee.

 

                   

Annual

Incentive

  

The annual incentive payout depends upon the performance of the CLP Group and the individuals concerned. Key measures include achievement of financial goals and operational performance targets, and individual objectives such as the demonstration of key leadership competencies.

 

Each of the Senior Management members is assigned a “target” annual incentive, which accounts for 28% of his/her total remuneration. Only individuals who attain at least a satisfactory performance rating are awarded any annual incentive. The amount of annual incentive is capped at twice the “target” annual incentive, with the actual amount being determined by organizational and individual performance.

 

An award was made in 2006, based on an assessment of the 2005 performance of the Group and the individuals concerned. The average payout to this group in 2006 was 85% above the target level based on the above target achievement of financial goals, operational performance targets and individual objectives for 2005.

 

       28%    28%

 

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Long-term Incentive   

The Long-term Incentive Plan (LTIP) is designed to align the interests of members of the Senior Management with those of the shareholders by an award that is pegged to the creation of shareholder value. A three-year financial target is set every year to drive towards higher performance and to ensure that such performance is sustained over the long-term. At the end of the three-year period, an award is made which is based on performance against the financial target. The award ranges from zero to one and a half times the “target” long-term incentive. The actual payout is further adjusted to reflect the share price performance of CLP Holdings, with dividends reinvested, over the same three-year period. Subject to certain vesting conditions, the award is payable in the fourth year. The LTIP was introduced in 2001 with the first award being paid to the eligible individuals in 2004.

 

In order to strengthen the linkage to organizational and individual performance and enhance its effectiveness as a retention plan, the LTIP was modified in 2006. The key modifications are that the performance multiplier (which is derived from a weighted combination of individual and organizational performance for the year preceding that in which the award is made) is applied to the target LTIP award at the beginning of the three-year cycle rather than the end, the maximum award is increased to two times the “target award” and 50% of the award is allocated to a notional cash deposit. The first payments under the revised LTIP will be made in 2009.

 

       9%      9%

Pension

Arrangements

  

The members of the Senior Management are eligible to join the defined contribution section of the Group’s retirement fund. The Group’s contribution to the retirement fund amounts to a maximum of 12.5% of base compensation, subject to a 5% contribution by the employee. This accounts for 7% of his/her target total remuneration.

 

       7%      7%

The Group does not have, and has never had, a share option scheme.

No Executive Director has a service contract with CLP Holdings or any of its subsidiaries with a notice period in excess of six months or with provisions for predetermined compensation on termination which exceeds one year’s salary and benefits in kind.

The remuneration policies applied to Senior Management are subject to the approval of the Human Resources & Remuneration Committee.

NON-EXECUTIVE DIRECTORS – REMUNERATION IN 2006

The fees paid to each of our Non-executive Directors in 2006 for their service on the CLP Holdings Board and, where applicable, on its Board Committees are set out below. There was no increase in the levels of Non-executive Directors’ fees in 2005 or 2006. The increase in total Directors’ fees, compared to 2005, is due to the appointment of an additional Independent Non-executive Director and a Non-executive Director in 2006 and the establishment of two additional Board Committees, the fees of which were paid with effect from 2006.

 

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In HK$

 

Board

 

Audit
Committee

 

Nomination

Committee

 

Finance &
General
Committee

 

Regulatory
Affairs
Committee

 

Human
Resources &
Remuneration
Committee

 

Provident &
Retirement
Fund
Committee

 

Social,
Environmental
& Ethics
Committee

  China   
Committee (1)
 

Total

2006

 

Total

2005

 

Non-executive Directors

                     

The Hon. Sir Michael

Kadoorie

  280,000   -   10,000   -   -   -   -   -   54,608   344,60 8   290,000  

Mr. W. E. Mocatta

  220,000   -   -   110,000   20,000   14,000   Nil   -   39,006   403,00 6   321,602  

Mr. J. S. Dickson Leach

  200,000   -   -   19,669   -   -   -   -   -   219,66 9   364,000  

Mr. R. J. McAulay

  200,000   -   -   -   -   -   -   -   -   200,000   200,000  

Mr. J. A. H. Leigh

  200,000   -   -   -   -   -   -   -   -   200,000   200,000  

Mr. R. Bischof

  200,000   -   -   -   -   -   Nil   -   -   200,000   200,000  

Mr. I. D. Boyce

  200,000   -   -   -   -   -   -   -   -   200,000   200,000  

Mr. P. C. Tan

  200,000   -   -   -   20,000   -   -   -   39,006   259,00 6   221,602  

Mr. Jason Whittle (2)

  129,282   -   -   51,713   12,928   -   -   12,928   -   206,85 1   -  

Independent Non -

executive Directors

                     

The Hon. Sir S. Y.

Chung (3)

  200,000   75,000   10,000   -   20,000   10,000   -   -   -   3 15 ,000   340,000  

Dr. William K. Fung

  200,000   -   10,000   -   -   -   -   20,000   -   2 3 0,000   211,699 (4)

Mr. V. F. Moore

  200,000   140,000   -   80,000   20,000   10,000   -   -   -   450,000   450,000  

Mr. Hansen Loh

  200,000   100,000   -   -   20,000   -   -   -   -   320,000   320,000  

Mr. Paul M. L. Kan

  200,000   -   -   -   -   -   -   -   -   2 00,000   241,713  

Professor Judy Tsui

  200,000   100,000   -   -   -   -   -   20,000   39,006   359,00 6   188,716 (4)

Sir Rod Eddington (5)

  200,000   -   -   13,261   -   -   -   20,000   -   233,26 1   -  
                     
                  Total   4,340, 407   3,749,332  

 

Notes:
(1) The payment of fees to Non-executive Directors serving on the China Committee took effect from the date of its first meeting, i.e., January 10, 2006.
(2) Mr. Jason Whittle was appointed a Non-executive Director on May 9, 2006.
(3) The Hon. Sir S. Y. Chung resigned as a Member of the Audit Committee on October 1, 2006.
(4) This included HK$1,699 being the fees paid for serving on the Social, Environmental & Ethics Committee. Such fees were paid in 2006 after Shareholders approved the level of fees for Non-executive Directors serving on the Social, Environmental & Ethics Committee at the 2006 Annual General Meeting.
(5) Sir Rod Eddington was appointed an Independent Non-executive Director and a Member of the Social, Environmental & Ethics Committee on January 1, 2006 and a Member of the Finance & General Committee on November 1, 2006.

The following directors also received fees for their directorships in subsidiary companies and affiliated companies:

 

     2004     2005     2006  
           (HK$)        

Mr. W. E. Mocatta

   237,000     227,000     237,000 (1)

Mr. J. S. Dickson Leach

   206 (3)   -     -  

Mr. J. A. H. Leigh

   75,000     55,435 (2)   -  
                  
   312,206     282,435     237,000  
                  

_________________

 

(1) Fees from CLP Power Hong Kong Limited, Hong Kong Nuclear Investment Company Limited, Castle Peak Power Company Limited and Hong Kong Pumped Storage Development Company, Limited.
(2) Mr. J. A. H. Leigh resigned from the Board of CLP Power Hong Kong Limited on September 27, 2005.
(3) Mr. J. S. Dickson Leach resigned from the Board of CLP Power Hong Kong Limited on January 2, 2004.

 

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EXECUTIVE DIRECTORS – REMUNERATION IN 2006

The remuneration paid to the Executive Directors of our Company in 2006 was as follows:

 

         

Performance Bonus

(Note A)

              
    

Base
Compensation,
Allowances

& Benefits

   Annual
  Incentive  
  

  Long-term  

Incentive

   Ex-gratia
Payment
   Provident
Fund
  Contribution  
   Total
               (in millions of HK$)          

2006

                 

CEO (Mr. Andrew Brandler)

   5.9          5.5          1.8          -           0.7          13.9      

Group Executive Director & CFO

(Mr. Peter P. W. Tse)

   4.2          3.6          1.5          -           0.5          9.8      

Group Executive Director

(Dr. Y. B. Lee)

   3.6          2.7          1.3          -           0.4          8.0      
                             

Total

   13.7          11.8          4.6          -           1.6                  31.7      
                             

2005

                 

CEO

   5.3          4.9          1.9          -           0.7          12.8      

Group Executive Director & CFO

   4.1          3.0          1.6          -           0.5          9.2      

Group Executive Director

   3.5          2.3          1.4          -           0.4          7.6      

Director & Company Secretary

(Mr. Peter W. Greenwood)

(Note B) / (Note C)

   2.9          4.1          4.2          2.2          0.3          13.7      
                             

Total

   15.8          14.3          9.1          2.2          1.9                  43.3      
                             

2004

                 

CEO

   5.0          4.1          1.6          -           0.6          11.3      

Group Executive Director & CFO

   4.1          2.8          1.4          -           0.5          8.8      

Group Executive Director

   3.5          2.2          2.1#        -           0.4          8.2      

Director & Company Secretary

   3.7          3.2          0.9          -           0.4          8.2      
                             

Total

   16.3          12.3          6.0          -           1.9                  36.5      
                             

_________________

Note A:

Performance bonus consists of (a): annual incentive and (b): long-term incentive.

 

(a)

The annual incentive for the Executive Directors and the members of Senior Management for 2006 is yet to be reviewed and approved by the Human Resources & Remuneration Committee. Accordingly, the total amount of annual incentive includes: i) the accruals that have been made in the performance bonus for the Executive Directors and members of Senior Management at the target level of performance; and ii) the actual bonus paid in 2006 for the last year in excess of the previous accruals made.

(b)

The long-term incentive is the incentive for 2003, paid in 2006 when the vesting conditions had been satisfied (the comparative figures are the incentive for 2002 paid in 2005). About 41% of the amount of 2003 long-term incentive payments results from the appreciation of CLP Holdings’ share price between 2003 and 2005, with dividends reinvested.

 

#

In 2001 when the long-term incentive was granted, Dr. Y. B. Lee was not an Executive Director. He then held the office of Managing Director of CLP Power China and his long-term incentive was assessed based on the performance of the Group’s projects in the PRC.

Note B:

Mr. Peter W. Greenwood resigned as the Director & Company Secretary with effect from August 27, 2005. The annual incentive amount of HK$4.1 million included the amount of incentive payment for 2005 for the period he served as director. The long-term

 

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incentive amount of HK$4.2 million was for the years 2002, 2003, 2004 and 2005 paid to Mr. Greenwood upon leaving the Company. The Ex-gratia payment was made in recognition of his contribution to the Group.

Note C:

Ex-gratia payments may be payable, where appropriate, upon approval by the Chairman of the Human Resources & Remuneration Committee and are not part of the remuneration arrangements for Executive Directors or Senior Management.

TOTAL DIRECTORS’ REMUNERATION IN 2006

The total remuneration of Directors (Non-executive and Executive) is shown below:

 

     2004      2005      2006  
         HK$M          HK$M          HK$M  

Fees

   3      4      5  

Base compensation, allowances and benefits in kind

   16      16      14  

Performance bonus*

        

- Annual incentive

   12      14      12  

- Long-term incentive

   6      9      4  

Provident fund contributions

   2      2      2  

Ex-gratia payment #

   -      2      -  
              

Total

   39      47      37  
              

______________

 

* Refer to Note A on performance bonus discussed under Executive Directors – Remuneration in 2006.
# Refer to Notes B and C on Ex-gratia payment discussed under Executive Directors – Remuneration in 2006.

Of the total remuneration paid to Directors, HK$3 million (2004: HK$3 million, 2005: HK$2 million) has been charged to the SoC operation.

SENIOR MANAGEMENT – REMUNERATION IN 2006

The five highest paid individuals in the Group included two Directors (2004: four Directors, 2005: three Directors, of whom one served as a Director for part of the year), two members of Senior Management (2004: one member, 2005: two members) and a former Senior Manager of the CLP Group. The total remuneration of the five highest paid individuals in the Group is shown below:

 

     2004      2005      2006  
         HK$M          HK$M          HK$M  

Base compensation, allowances and benefits in kind

   20      20      24  

Performance bonus*

        

- Annual incentive

   15      20      20  

- Long-term incentive

   6      9      8  

Provident fund contributions

   2      2      3  

Ex-gratia payment #

   -      2      1  
              

Total

   43      53      56  
              

______________

Note:

* Refer to Note A on performance bonus discussed under Executive Directors – Remuneration in 2006.
# Refer to Note C on Ex-gratia payment discussed under Executive Directors – Remuneration in 2006.

 

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The remuneration paid to these five individuals is within the following bands:

 

     Number of Individuals
         2004                  2005                  2006          
    

HK$  7,000,001 - HK$ 7,500,000

   1    -    -

HK$  8,000,001 - HK$ 8,500,000

   2    1    -

HK$  8,500,001 - HK$ 9,000,000

   1    -    -

HK$  9,000,001 - HK$ 9,500,000

   -    2    -

HK$  9,500,001 - HK$10,000,000

   -    -    1

HK$10,000,001 - HK$10,500,000

   -    -    2

HK$11,000,001 - HK$11,500,000

   1    -    -

HK$11,500,001 - HK$12,000,000

   -    -    1

HK$12,500,001 - HK$13,000,000

   -    1    -

HK$13,500,001 - HK$14,000,000

   -    1    1

The Senior Management Group, comprising the Group Director - Managing Director Hong Kong, the Group Director - Managing Director Australia and the Group Director - Operations as well as the Executive Directors, was extended in 2006 to include Managing Director - China, Managing Director - India, Chief Executive Officer - OneEnergy Limited and the Group Director - Corporate Finance and Development.

Details of remuneration of the Senior Management of the Group (excluding Executive Directors) are set out in the table below.

 

        Performance Bonus *            
   

Base
Compensation,
Allowances

& Benefits

  Annual  
Incentive  
  Long-term  
Incentive  
  Provident    
Fund    
Contribution    
  Other
Payments
  Total
    HK$M   HK$M     HK$M     HK$M       HK$M       HK$M

2004

           

Group Director – Managing

Director Hong Kong

  3.9   2.8     -     0.5       -   7.2 (b)

Group Director – Managing

Director Asia Pacific

  3.7   2.7     -     0.5       -   6.9   
                       

Total

  7.6   5.5     -     1.0       -   14.1   
                       

2005

           

Group Director – Managing

Director Hong Kong

  4.0   3.5     1.2     0.5       -   9.2 (b)

Group Director – Managing

Director Asia Pacific

  4.0   3.6     -     0.5       -   8.1   

Group Director – Operations (a)

  2.4   2.0     0.9     0.3       -   5.6   
                       

Total

  10.4   9.1     2.1     1.3       -   22.9   
                       

 

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2006

                 

Group Director - Managing

Director Hong Kong

(Mrs. Betty Yuen)

   4.2    4.1    1.5    0.5    -       10.3 (b)

Group Director - Managing

Director Australia

(Mr. Richard McIndoe)

   4.2    4.1    1.4    0.5    1.5 ( c )    11.7   

Managing Director - China

(Mr. Shen Zhongmin)

   0.9    0.5    -    0.1    1.0 ( d )    2.5   

Managing Director - India

(Mr. Rajiv Mishra)

   1.5    1.1    0.1    0.2    -       2.9   

Chief Executive Officer -

OneEnergy Limited

(Mr. Mark Takahashi)

   2.6    1.9    0.1    0.3    -       4.9   

Group Director - Operations

(Mr. Peter Littlewood)

   2.9    2.6    0.8    0.4    -       6.7   

Group Director - Corporate

Finance and Development

(Mr. Stefan Robertsson)

   2.0    1.6    0.2    0.3    -       4.1   
                             
           18.3            15.9            4.1            2.3            2.5               43.1   
                             
_______________                  
  * Refer to Note A on performance bonus discussed under Executive Directors – Remuneration in 2006.
  (a) Mr. Peter Littlewood was appointed as Group Director – Operations effective from November 1, 2005, the amount of remuneration covers full year 2005.
  (b) The total of this remuneration has been charged to the SoC operation.
  (c) Payment for tax equalization, housing allowance and children’s education allowances for secondment to Australia.
  (d) Lump sum payment upon joining the Group as Managing Director – China effective from August 21, 2006.

CONTINUED SCRUTINY AND DISCLOSURE

On behalf of the Board, the Human Resources & Remuneration Committee remains committed to the establishment and application of remuneration principles, policies and practices which further the interest of CLP Holdings and its shareholders, to the careful oversight of remuneration levels, and to honest and open disclosure to shareholders on these matters.

 

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C.  BOARD PRACTICES

THE BOARD

The Board is charged with promoting the success of the Company by directing and supervising its affairs in a responsible and effective manner. Each Director has a duty to act in good faith in the best interests of the Company. The Directors are aware of their collective and individual responsibilities to all shareholders for the manner in which the affairs of the Company are managed, controlled and operated.

The types of decisions which are to be taken by the Board include those relating to:

 

·  

The strategic direction of the Group;

·  

The objectives of the Group;

·  

Monitoring the performance of Management;

·  

Overseeing the management of CLP’s relationships with stakeholders, such as Government, customers, the community and others who have a legitimate interest in the responsible conduct of the Group’s business;

·  

Ensuring that a framework of prudent and effective controls is in place to enable risks to be assessed and managed; and

·  

Setting the Group’s values and standards.

The Directors are responsible for the preparation of the financial statements for each financial period which give a true and fair view of the state of affairs of the Group and of the results and cash flows for that period. In preparing these financial statements for the year ended December 31, 2006, the Directors have selected suitable accounting policies and applied them consistently; made judgments and estimates that are prudent, fair and reasonable and prepared the financial statements on a going concern basis. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group.

As of May 31, 2007, the Board comprises 21 Directors. All Directors (with the exception of the CEO, the CFO and the Executive Director - Strategy) are non-executive and independent of Management, thereby promoting critical review and control of the management process. The Board includes eight influential and active Independent Non-executive Directors to whom shareholder concerns can be conveyed. The non-executive members of the Board also bring a wide range of business and financial experience to the Board, which contributes to the effective direction of the Group.

Details of all Directors are included in “Item 6. Directors, Senior Management and Employees – A. Directors and Senior Management” of this annual report. The relationships (including financial, business, family or other material or relevant relationships) among Members of the Board are also disclosed. There is no such relationship as between the Chairman and the CEO. Eight Non-executive Directors (see “Item 6. Directors, Senior Management and Employees – A. Directors and Senior Management”) are not considered as independent, due to their association with the Kadoorie Family, who have a substantial interest (34.84%) in CLP. In common with all Directors, they are aware of their responsibilities to all Shareholders.

Directors are requested to declare their direct or indirect interests, if any, in any proposals or transactions to be considered by the Board at Board Meetings and withdraw from the meetings as appropriate. The Company follows guidelines (available at the “Corporate Governance” Section of our website) at each financial reporting period to seek confirmation from Directors in respect of any transactions of the Company or its subsidiaries which are related to Directors or their associates. The identified significant related party transactions are disclosed in Note 36 to our financial statements included in “Item 17. Financial Statements” in this annual report.

 

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Throughout the year ended December 31, 2006, the Board exceeded the minimum requirements of the Listing Rules as to the appointment of at least three Independent Non-executive Directors (CLP had seven), and that there should be one director with appropriate professional qualifications or accounting or related financial management expertise on the Audit Committee (there are two such directors on CLP’s Audit Committee).

Pursuant to the requirement in the Listing Rules, the Company has received a written confirmation from each Independent Non-executive Director of his/her independence to the Company. The Company considers all of the Independent Non-executive Directors to be independent.

The full Board meets in person at least quarterly and on other occasions when a Board decision is required on major issues. Details of Directors’ attendance at the Annual General Meeting (AGM), Board and Board Committee Meetings held in 2006 are set out in the following table. The overall attendance rate of Directors at Board Meetings was 87.2% (2005 : 88.4%).

 

      Meetings Attended/Held

Directors

  Board  

Audit

Committee

  Finance &
General
Committee
  Human
Resources &
Remuneration
Committee
  Nomination
Committee
  Provident &
Retirement
Fund
Committee
 

Regulatory

Affairs
Committee

  Social,
Environmental
& Ethics
Committee
 

China

Committee

  AGM

Non-executive Directors

                 

The Hon. Sir Michael Kadoorie

  3/5         1/1         3/3   1

Mr. W. E. Mocatta#

  5/5     9/9   3/3     2/2   1/1     3/3   1

Mr. J. S. Dickson Leach*

  4/5     0/1               1

Mr. R. J. McAulay

  4/5                   1

Mr. J. A. H. Leigh

  4/5                  

Mr. R. Bischof

  5/5           2/2         1

Mr. I. D. Boyce

  5/5                   1

Mr. P. C. Tan

  2/5             1/1     0/3  

Mr. Jason Whittle^

  3/4     7/9         0/1   1/2     N/A

Independent Non-executive Directors

               

The Hon. Sir S. Y. Chung@

  5/5   3/3     3/3   1/1     1/1       1

Dr. William K. Fung

  3/5         1/1       2/2    

Mr. V. F. Moore

  5/5   4/4   7/9   3/3       1/1       1

Mr. Hansen C. H. Loh

  5/5   4/4           1/1       1

Mr. Paul M. L. Kan

  5/5                   1

Professor Judy Tsui

  4/5   3/4             1/2   2/3   1

Sir Rod Eddington v

  5/5     2/4           1/2    

Executive Directors

                 

Mr. Andrew Brandler

  5/5     9/9         1/1   2/2   3/3   1

Mr. Peter P. W. Tse

  5/5     8/9       2/2   0/1     2/3   1

Dr. Y. B. Lee

  5/5             1/1     3/3   1
#

Mr. W. E. Mocatta was appointed the Chairman of the Finance & General Committee and Human Resources & Remuneration Committee with effect from January 1, 2006.

*

Mr. J. S. Dickson Leach resigned as a Member of the Human Resources & Remuneration Committee and Regulatory Affairs Committee with effect from January 1, 2006 and the Finance & General Committee with effect from April 1, 2006.

^

Mr. Jason Whittle was appointed a Non-executive Director of CLP Holdings with effect from May 9, 2006, and Member of the Finance & General Committee and Regulatory Affairs Committee with effect from January 1, 2006.

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The Hon. Sir S. Y. Chung resigned as a Member of the Audit Committee with effect from October 1, 2006.

v

Sir Rod Eddington was appointed an Independent Non-executive Director of CLP Holdings with effect from January 1, 2006, a Member of the Social, Environmental & Ethics Committee with effect from January 1, 2006 and the Finance & General Committee with effect from November 1, 2006.

Directors ensure that they can give sufficient time and attention to the affairs of the Company and a confirmation to that effect is included in their letters of appointment. Directors have disclosed to the Company the number and nature of offices held in public companies or organizations and other significant commitments, with the identity of the public companies or organizations and an indication of the time involved. During the year ended December 31, 2006, no Director held directorships in more than seven public companies, including the Company. No Executive Directors hold any directorship in any other public companies, but they are encouraged to participate in professional, public and community organizations. In respect of those directors who stand for re-election at the 2007 AGM, all their directorships held in listed public companies in the past three years are set out in the Notice of AGM. Other details of Directors’ appointments are set out in “Item 6. Directors, Senior Management and Employees – A. Directors and Senior Management” in this annual report and on CLP’s website.

 

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The Board is committed to ensuring that there is effective oversight of the Company’s activities, wherever they are carried out. The diversification of those activities in recent years has meant that an increasing proportion of CLP’s assets and operations are located outside of our original base in Hong Kong.

As part of the Continuous Professional Development Program, Directors participated in the Shareholders’ Visit Program, various briefings and visits to CLP’s facilities including one to CLP’s overseas businesses in Australia and Tasmania.

The interests in CLP’s securities held by Directors as at December 31, 2006 are disclosed in “— E. Share Ownership” below. Particular attention is given to dealings by Directors in shares in CLP. Since 1989, the Company has adopted its own Code for Securities Transactions by Directors, largely based on the Model Code set out in Appendix 10 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Ltd. Our Code for Securities Transactions also applies to other “Specified Individuals” such as Members of the CLP Group’s Senior Management. Our Code is periodically updated to reflect new regulatory requirements, as well as our strengthened regime of disclosure of interests in our securities. This Code is on terms no less exacting than the required standard set out in the Model Code.

All Directors have confirmed, following specific enquiry by the Company, that throughout the year ended December 31, 2006 they complied with the required standard set out in the Model Code and our own Code for Securities Transactions.

For discussion of the term of office of members of the Board, see “Item 6. Directors, Senior Management and Employees – A. Directors and Senior Management” above.

CLP Holdings and its subsidiaries have not signed any service contract with any of our Directors in respect of the provision of benefits upon termination of employment which exceed one year’s salary and benefits in kind.

BOARD COMMITTEE

The membership and responsibility of each Board Committee in 2006 and up to February 28, 2007 are explained below. The terms of reference and membership of the Committees are disclosed in full on the CLP website at www.clpgroup.com .

Nomination Committee

A majority of the members are Independent Non-executive Directors. The members are The Hon. Sir Michael Kadoorie (Chairman), The Hon. Sir S. Y. Chung and Dr. William K. Fung. This Committee is responsible for identification and recommendation to the Board of possible appointees as Directors, making recommendations to the Board on matters relating to appointment or reappointment of Directors and succession planning for Directors and assessing the independence of the Independent Non-executive Directors.

At the 2007 AGM, the three new Directors appointed by the Board retired and presented themselves for election and six Directors retired by rotation and presented themselves for re-election by shareholders. The independence of those who are Independent Non-executive Directors has been reviewed by the Nomination Committee.

 

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Social, Environmental & Ethics Committee

This Committee consists of Mr. Andrew Brandler (Chairman), Dr. William K. Fung, Professor Judy Tsui, Sir Rod Eddington, Mr. Jason Whittle and Dr. Gail Kendall. It oversees CLP’s positions and practices on issues of corporate social responsibility, principally in relation to social, environmental and ethical matters that affect shareholders and other key stakeholders.

Provident & Retirement Fund Committee

This Committee consists of Mr. W. E. Mocatta (Chairman), Mr. R. Bischof, Mr. Peter P. W. Tse and a Trustee. It advises the Trustees on investment policy and objectives for the Group’s retirement funds, namely the CLP Group Provident Fund Scheme and the Mandatory Provident Fund Scheme.

Finance & General Committee

This Committee consists of Mr. W. E. Mocatta (Chairman), Mr. V. F. Moore, Sir Rod Eddington, Mr. Jason Whittle, Mr. Andrew Brandler, Mr. Peter P. W. Tse, Mrs. Betty Yuen and Mr. Richard McIndoe. It meets as and when required to review the financial operations of the Company. Such reviews include Group-wide financial, accounting, treasury and risk management policies, major financing transactions, corporate plans and budgets. The Committee also reviews major acquisitions or investments and their funding requirements.

Human Resources & Remuneration Committee

A majority of the members of the Committee are Independent Non-executive Directors. In line with good practice, there are no Executive Directors on this Committee. The members are Mr. W. E. Mocatta (Chairman), The Hon. Sir S. Y. Chung and Mr. V. F. Moore. This Committee is responsible for the review of major human resources and pay issues, including the approval of the Remuneration Report which included emolument policies and the basis of emoluments paid to Directors / Senior Management.

Regulatory Affairs Committee

This Committee consists of Mr. Andrew Brandler (Chairman), Mr. W. E. Mocatta, The Hon. Sir S. Y. Chung, Mr. V. F. Moore, Mr. P. C. Tan, Mr. Hansen C. H. Loh, Mr. Peter P. W. Tse, Mrs. Betty Yuen, Mr. David C. L. Tong and Mr. Jason Whittle. It reviews and advises upon matters in respect of the present or future regulation of CLP’s Hong Kong electricity business.

China Committee

This Committee consists of the Hon. Sir. Michael Kadoorie (Chairman), Mr. Andrew Brandler (Vice Chairman), Professor Judy Tsui, Ms. Marjorie Yang, Mr. W. E. Mocatta, Mr. P. C. Tan, Mr. David C. L. Tong, Mr. Peter P. W. Tse, Dr. Y. B. Lee, Mrs. Betty Yuen, Mr. Shen Zhongmin and Mr. Stefan Robertsson. It oversees CLP’s strategy and standing in the Chinese mainland.

Audit Committee

All of its members are appointed from the Independent Non-executive Directors, with the Chairman and Professor Judy Tsui having appropriate professional qualifications and experience in financial matters. The members are Mr. V. F. Moore (Chairman), Mr. Hansen C. H. Loh and Professor Judy Tsui.

The Committee’s terms of reference are aligned with the recommendations set out in “A Guide for Effective Audit Committee” issued by the Hong Kong Institute of Certified Public Accountants.

It was the practice of the Audit Committee to meet three times each year. In light of the heavy agenda for each of the three Committee

 

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meetings, the frequency of the Audit Committee meetings has been raised to four per annum so that full attention can be given to the increasing range of matters submitted to the Audit Committee. Special meetings may be called at the discretion of the Chairman or at the request of the CEO or Director – Group Internal Audit to review significant control or financial issues. The Audit Committee Chairman gives an annual report to the Board covering the Committee’s activities for the year and highlighting any significant issues.

In addition, the Committee carried out other work pertaining to the US reporting requirements arising from the registration of our Company’s American Depositary Receipts with the US Securities and Exchange Commission and the issue of Yankee Bonds by CLP Power Hong Kong (which was redeemed in April 2006). This work included the approval of the Form 20-F of our Company and the review of the status of compliance by the Group with the Sarbanes-Oxley Act of 2002.

CORPORATE GOVERNANCE

Maintaining a good, solid and sensible framework of corporate governance has been and remains one of CLP’s priorities. We consider corporate governance as a culture and that knowledge is a constant guide as we review our principles and practices in light of experience, regulatory changes and international developments.

We have published a Corporate Governance Report addressing our approach to corporate governance, covering the CLP’s Code on Corporate Governance; the evolution of CLP’s corporate governance during the reporting year; the roles of our Board, management, staff and auditors in maintaining good corporate governance within CLP; the standards, process and effectiveness of our systems of internal control; and how we serve/communicate to our shareholders and other stakeholders. This Corporate Governance Report can be found in Hong Kong’s annual report or by referring to our website at www.clpgroup.com , under the Corporate Governance section.

D.  EMPLOYEES

As of December 31, 2006, we had a total workforce of 6,087 (2005: 6,059 and 2004: 4,633), of which 3,866 (2005: 3,862 and 2004: 3,873) were employed in the Scheme of Control business. Of the total number of employees as of December 31, 2006, 1.3% are from CLP Holdings; 67.9% are from Hong Kong electricity and related business; 20.7% are from Australia energy business; 6.3% are from Chinese mainland electricity business; 1.9% are from India electricity business; and 1.9% are from Southeast Asia and Taiwan electricity business.

Management believes that we have constructive relationships with our employees and with the labor unions.

 

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E.  SHARE OWNERSHIP

The following table sets forth the share ownership of our Directors and Executive Officers in our Company as of May 31, 2007.

 

Directors / Executive

Officers

  

Capacity

  

Total Interests in

Number of

Ordinary Shares of

the Company

  

% of the Issued

Share Capital of

the Company

The Hon. Sir Michael Kadoorie

   Note (a)    475,381,026    19.7397

Mr. W. E. Mocatta

   Founder of a discretionary trust    250,000    Note (i)

Mr. J. S. Dickson Leach

   Founder of a discretionary trust Note (b)    3,436    Note (i)

Mr. R. J. McAulay

   Note (c)    439,800,565    18.2623

The Hon. Sir S. Y. Chung

   Beneficial owner    393,789    Note (i)

Dr. William K. Fung

   Beneficial owner    120,000    Note (i)

Mr. J. A. H. Leigh

   Note (d)    402,035,991    16.6941

Mr. R. Bischof

   Beneficial owner    50,000    Note (i)

Mr. P. C. Tan

   Interests held jointly with spouse    5,000    Note (i)

Mr. Andrew Brandler

(Chief Executive Officer)

   Note (e)    10,600    Note (i)

Mr. Peter P. W. Tse

   Note (f)    20,600    Note (i)

Dr. Y. B. Lee

   Note (g)    15,806    Note (i)

Mr. Jason Whittle

   Note (h)    238,409,771    9.8997

Mr. Peter W. Greenwood

   Beneficial owner    600    Note (i)

Mr. Peter A. Littlewood

   Personal    600    Note (i)

_______________

Notes:

  (a) The Hon. Sir Michael Kadoorie was deemed (by virtue of the Securities and Futures Ordinance) to be interested in 475,381,026 shares in the Company. These shares were held in the following capacity:

 

  i) 1,243 shares were an interest of his spouse, Lady Kadoorie.
  ii) 236,335,571 shares were ultimately held by discretionary trusts, of which The Hon. Sir Michael Kadoorie is one of the beneficiaries and/or discretionary objects.
  iii) 239,044,212 shares were ultimately held by a discretionary trust, of which The Hon. Sir Michael Kadoorie is one of the beneficiaries and the founder.

 

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For the purpose of the Securities and Futures Ordinance, the spouse of The Hon. Sir Michael Kadoorie was taken to have a discloseable duty in Hong Kong in relation to the shares referred to in (ii) and (iii) above. The spouse of The Hon. Sir Michael Kadoorie was therefore deemed to be interested in 475,381,026 shares in the Company representing approximately 19.74% of the issued share capital of the Company, of which 1,243 shares were held by her as beneficial owner and 236,335,571 and 239,044,212 shares were attributed to her pursuant to the Securities and Futures Ordinance for disclosure purposes. Nevertheless, she has no interest, legal or beneficial, in these 236,335,571 and 239,044,212 shares attributed to her for disclosure purposes.

 

  (b)

According to the register of directors’ and chief executives’ interests and short position required to be kept under Section 352 of Part XV of the Securities and Futures Ordinance, Mr. J. S. Dickson Leach is the beneficial owner of 3,436 ordinary shares of the Company. The Company was notified by Mr. J. S. Dickson Leach that the capacity of his interest had been changed from Beneficial Owner to Founder of a Discretionary Trust.

 

  (c)

Mr. R. J. McAulay was deemed (by virtue of the Securities and Futures Ordinance) to be interested in 439,800,565 shares in the Company. These shares were held in the following capacity:

 

  i)

13,141 shares were held in a personal capacity.

  ii)

236,335,571 shares were ultimately held by discretionary trusts, of which Mr. R. J. McAulay is one of the discretionary objects.

  iii)

203,451,853 shares were ultimately held by a discretionary trust, of which Muriel, Lady Kadoorie, mother-in-law of Mr. R. J. McAulay, is the founder and a beneficiary and Mr. R. J. McAulay, his wife and members of his family are discretionary objects.

 

  (d)

Mr. J. A. H. Leigh, in his capacity as one of the trustees of a trust was deemed to be interested in 401,993,991 shares which formed part of the 236,335,571 and 203,451,853 shares referred to in (c) above. 42,000 shares were held by Mr. J. A. H. Leigh in a beneficial owner capacity.

 

  (e)

600 shares were held in a personal capacity and 10,000 shares were held in a beneficial owner capacity.

 

  (f)

600 shares were held in a personal capacity and 20,000 shares were held in a beneficial owner capacity.

 

  (g)

600 shares were held in a personal capacity and 15,206 shares were held jointly with spouse.

 

  (h)

Mr. Jason Whittle was deemed (by virtue of the Securities and Futures Ordinance) to be interested in 238,409,771 shares in the Company. These shares were held in the following capacity:

 

  i)

600 shares were held in a personal capacity.

  ii)

236,335,571 shares were ultimately held by discretionary trusts, of which Mr. Jason Whittle is one of the discretionary objects.

  iii)

2,073,600 shares were ultimately held by a discretionary trust, of which Mr. Jason Whittle is one of the discretionary objects.

 

  (i)

None of the Directors and Executive Officers beneficially owns one percent or more of our outstanding shares.

 

 

Messrs. I. D. Boyce, V. F. Moore, Hansen C. H. Loh, Paul M. L. Kan and Peter T. C. Lee, Professor Judy Tsui and Sir Rod Eddington who are Directors of the Company; Mr. Bradley W. Corson who is an Alternate Director of the Company; and Mrs. Betty Yuen and Messrs. Richard McIndoe, Shen Zhongmin, Rajiv Mishra, Mark Takahashi and Stefan Robertsson who are Executive Officers of our Company have each confirmed that they had no interests in the shares of our Company or any of its associated corporations as at May 31, 2007.

 

 

None of the Directors and Executive Officers had interests in debentures, under equity derivatives or in underlying shares of our Company and its associated corporations as at May 31, 2007.

 

 

We do not have, and have never had, a share option scheme. Accordingly, as of May 31, 2007, there were no options outstanding to purchase shares from us.

 

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