2014 — Page 28

CORPORATE GOVERNANCE REPORT (CONTINUED)

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APPOINTMENT AND RE-ELECTION OF DIRECTORS (Continued)

The procedures for shareholders of the Company (the "Shareholders") to propose a person for election as a Director are available and accessible on the website of the Company (www. hkf.com) and to the section of "Procedures for Shareholders to propose a person for election as a director" in this Corporate Governance Report on page 33.

CHAIRMAN AND GROUP GENERAL MANAGER

The roles of the Chairman and the Group General Manager of the Company are taken by two separate individuals who are not related to each other. The separation of the roles of the Chairman and the Group General Manager enables a clear division of responsibilities between the Chairman of the Board and the Group General Manager and also provides checks and balances effect.

The role of the Chairman of the Board is taken by Dr. Lam Ko Yin, Colin while the role of the Group General Manager (whose status is equivalent to chief executive officer for the purpose of the Code but not otherwise) is taken by Ir. Dr. Ho Chi Shing, David. The key function of the Chairman is the management of the Board whereas the key function of the Group General Manager is the day-to-day management of the Company's business.

NON-EXECUTIVE DIRECTORS

The Company has complied with the requirements under Rules 3.10(1) and 3.10(2), 3.10A of the Listing Rules. Rule 3.10(1) of the Listing Rules requires that every board of directors of a listed issuer must include at least three independent non-executive directors and Rule 3.10(2) of the Listing Rules requires that at least one of the independent non-executive directors must have

appropriate professional qualifications or accounting or related financial management expertise. Rule 3.10A of the Listing Rules requires that an issuer must appoint independent non-executive directors representing at least one-third of the board.

All non-executive directors (including independent non- executive directors) of the Company have been appointed for a specific term to 31 December 2016. They are eligible for re- appointment and subject to re-election on retirement by rotation in accordance with the Articles of Association of the Company.

The Chairman, even though he is an Executive Director, held a meeting with all Non-executive Directors (including all Independent Non-executive Directors) without the presence of another Executive Director during the year.

Hong Kong Ferry (Holdings) Company Limited Annual Report 2014

CONFIRMATION OF INDEPENDENCE

The Board has received confirmation of independence from each of Mr. Ho Hau Chong, Norman, Mr. Leung Hay Man, Ms. Wong Yu Pok, Marina and Mr. Wu King Cheong pursuant to Rule 3.13 of the Listing Rules.

All independent non-executive directors also meet the guidelines for assessment of their independence as set out in Rule 3.13 of the Listing Rules. The Board has not been aware of the occurrence of any events which would cause it to believe that their independence has been impaired.

The Nomination Committee and the Board noted that Mr. Ho

Hau Chong, Norman is an executive director of Miramar Hotel and Investment Company, Limited ("Miramar") and a director of Wealth Team Development Limited ("Wealth Team"), which is an indirect subsidiary of HLD. Mr. Ho also has an indirect beneficial

interests of 9.9% in all issued shares of Wealth Team, but is not

involved in the management and operation of Wealth Team.

Miramar, Wealth Team and HLD are connected persons of the Company under the Listing Rules. Save as aforesaid, Mr. Ho has complied with other conditions set out in Rule 3.13 of the Listing Rules.

In view of the fact that Mr. Ho does not have any material interests in any principal business activity of and is not involved in any material business dealings with the Company, or any of its subsidiaries or with any connected persons of the Company, and that both the management and the operations of the Miramar group and the Group are totally independent from each other, the Board in good faith considers that the independence of Mr. Ho as an independent non-executive director of the Company is not in any way affected by his directorships in both Miramar and Wealth Team.

Mr. Leung Hay Man had certain services rendered in the past falling within the independence guideline in Rule 3.13(3) of the Listing Rules, and had/has previous/existing directorships falling within the independence guideline in Rule 3.13(7) of the Listing Rules, among the factors affecting independence.