Business Ethics

Code of conduct

At CITIC Pacific, we consider ethical corporate culture and employees' honesty and integrity to be important assets. We endeavour to comply with the laws and regulations of the countries in which we operate, and all directors and employees are required to act responsibly to ensure that the reputation of CITIC Pacific is not tarnished. To uphold a high standard of integrity in all aspects of everyday activities, CITIC Pacific has adopted a code of conduct which provides employees with a set of defined ethical standards for adherence. The code of conduct was revised in 2013 to update the scope of topics, including prevention of bribery practices, use of proprietary information, conflicts of interest and inside information. The new version of the code was posted on CITIC Pacific's intranet for reference by all employees in the head office and sent to all business units for further dissemination to their employees. To ensure existing employees fully understand the revised code, briefing sessions for employees in the head office were conducted in 2013. A separate briefing was also arranged for representatives from the finance and human resources functions of our subsidiaries to facilitate further communication and execution of the code.

New employees are informed of the rules and standards set out in the code of conduct upon joining CITIC Pacific and are required to acknowledge their understanding of the code of conduct. The heads of business units are charged with the responsibility of disseminating the code of conduct requirements to the people concerned and are required to report the compliance status of the code of conduct on a bi-annual basis to the head of group human resources. The audit committee receives reports on the execution of the code of conduct and its compliance at least once a year and, where necessary, recommendations were made to the board and management for implementation.

Whistle-blowing policy

CITIC Pacific considers the whistle-blowing channel a useful means of identifying possible misconduct or fraud risks of a particular operation or function by encouraging employees to raise concerns in good faith. CITIC Pacific has adopted a whistle-blowing policy setting out principles and procedures for guiding the directors and employees of CITIC Pacific in reporting cases of fraud, corruption or misconduct in a fair and proper manner.

According to the whistle-blowing policy, concerns can be raised in writing to the group internal auditor, chairman of the audit committee, the president or the chairman of the board by post to a designated post box. In addition, emails and phone calls to confidential hotlines can be sent directly to the group internal auditor. Upon receipt of the report, group internal audit will undertake an initial enquiry and, if appropriate, subsequent investigation work. Where necessary, the head of human resources will be involved in handling relevant cases about staff conduct. Results of the enquiry and investigation are reported directly to the chairman of the audit committee or the president where appropriate. The whistle-blowing policy is posted on CITIC Pacific's intranet. During 2013, group internal audit received one case from the whistle-blowing channel, which was mainly in relation to a minor human resources issue of an operation in mainland China. It was handled according to CITIC Pacific's whistleblowing policy. During the course of the year, briefing sessions on the whistle-blowing process of CITIC Pacific were respectively conducted in the Group's finance conference, human resources conference and head office code of conduct refresher sessions.

Inside information/price sensitive information disclosure policy

CITIC Pacific has adopted an inside information/price sensitive information disclosure policy setting out the practices and procedures for monitoring business and corporate developments and events so that any potential inside information/price sensitive information is promptly identified and relayed to the board to enable it to make timely decisions on disclosure, if necessary, and for taking appropriate measures to preserve confidentiality of inside information/price sensitive information until proper dissemination of the inside information/price sensitive information via the electronic publication system operated by the Stock Exchange.

Good employment practices

In Hong Kong, CITIC Pacific has broadly followed the guide to good employment practices issued by the Employers' Federation of Hong Kong to ensure legally compliant, non-discriminatory and professional employment practices are implemented.

Directors' and relevant employees' securities transactions

CITIC Pacific has adopted the model code for securities transactions by directors of listed companies ('model code') contained in Appendix 10 to the Listing Rules. All directors confirmed that they have complied with the required standard set out in the model code throughout 2013. The interests held by individual directors in CITIC Pacific's securities as at 31 December 2013 are set out in the Directors' Report.

In addition to the requirements set out in CITIC Pacific's code of conduct, the company secretary regularly writes to executive management and other relevant employees who are privy to unpublished price sensitive information, as reminders of their responsibility to comply with the provisions of the model code and keep the matter confidential until announced. They are also specifically reminded not to engage in any insider dealings as stipulated under Section 270 of the Securities and Futures Ordinance.

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