2017E — Page 31

CORPORATE GOVERNANCE REPORT (CONTINUED!

BOARD COMPOSITION

The Board comprises ten Directors including two Executive Directors, four Non-executive Directors and four Independent

Non-executive Directors. The names of the Directors of the Company are as follows:

Executive Directors

Dr. Lam Ko Yin, Colin (Chairman of the Board) Mr. Li Ning

Non-executive Directors

Mr. Au Siu Kee, Alexander

Mr. Lau Yum Chuen, Eddie

Dr. the Hon. Lee Shau Kee

Mr. Wong Man Kong, Peter

Independent Non-executive Directors

Mr. Ho Hau Chong, Norman

Mr. Leung Hay Man

Ms. Wong Yu Pok, Marina Mr. Wu King Cheong

The biographical details of the Directors are set out in the section headed "Directors' and Senior Management's Profile" on pages 3 to 7 of this Annual Report. A list of the Directors

and their role and function is available on the websites of the

Company (www.hkf.com) and Hong Kong Exchanges and Clearing Limited ("HKEX") (www.hkexnews.hk) respectively.

Dr. Lee Shau Kee and Mr. Li Ning are deemed as having

substantial interests in the total number of issued shares of the

Company under Part XV of the Securities and Futures Ordinance ("SFO"). Dr. Lee is the father-in-law of Mr. Li Ning. Dr. Lee Shau Kee, Dr. Lam Ko Yin, Colin and Mr. Lau Yum Chuen, Eddie are executive directors of Henderson Land Development Company Limited ("HLD"). Mr. Leung Hay Man and Mr. Wu King Cheong are independent non-executive directors of HLD. HLD has discloseable interests under the provisions of the SFO in the Company.

Save as disclosed above, there is no financial, business, family or other material or relevant relationship among the Directors.

The Board adopted the Board Diversity Policy setting out the approach to achieve diversity on the Board in August 2013. The Board noted that the measurable objectives have been set for implementing the policy. In addition, the Board is satisfied

that its composition is appropriate being considered the skills, experience and attributes of the Directors. The Nomination Committee of the Company will monitor the implementation of the Board Diversity Policy and review the policy as appropriate.

APPOINTMENT AND RE-ELECTION OF DIRECTORS

The Nomination Committee of the Company is responsible to review the structure, size, diversity and composition of the Board, identify suitable candidates to the Board, and to make recommendations on any matters in relation to the appointment or re-appointment of members of the Board. Appointment of

new Directors is reserved for the Board's approval.

The Nomination Committee ensures that the Board

comprises members with mixed skills and experience with appropriate knowledge necessary to accomplish the Group's business development, strategies, operation, challenges and opportunities. The Nomination Committee takes into account that person's skills, qualifications and expected contributions to the Company before making any recommendations to the Board in relation to the appointment or re-appointment of members of

the Board.

Mr. Ho Hau Chong, Norman, who was appointed as Independent Non-executive Director of the Company since March 1995, had served as Independent Non-executive Director for more than nine years. Mr. Ho is also the Chairman of the Audit Committee,

a member of the Remuneration Committee and the Nomination Committee of the Company. Despite Mr. Ho has other directorships as mentioned in the section of "Confirmation of Independence" on page 31 of this Corporate Governance Report, he does not have any management role in the Company. The Nomination Committee considered that Mr. Ho has continuously contributed to the Company and the Board with his relevant experience and knowledge throughout his years of service.

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Hong Kong Ferry (Holdings) Company Limited

Annual Report 2017