Disclosure with shareholders

　　<1> General principles

　　a. Annual reports should convey a true and fair view of the organization. They should state whether the organization has complied with governance laws and regulations, and followed best practice to give specific disclosures about the board, internal control reviews, going concern status and relations with stakeholders.

　　b. Ensure that timely as accurate disclosure is made on all material matters regarding the corporation, including the financial situation, performance, ownership, and governance of the company.

　　<2> Specific requirement (combined code 2003)

　　a. A disclosure about the broad of directors, name of chairman, CEO, executive directors and independent NEDs, members of the nomination, audit and remuneration committee and any changes to them during the year

　　b. A description of the work of the remuneration committee, nomination committee and audit committee in discharging its responsibilities

　　c. An explanation from the directors of their responsibility for preparing the accounts and a statement by the auditors about their audit reporting responsibilities

　　d. Information about relations with auditors including reason for change and steps taken to ensure auditor objectivity and independence when non-auditor service have been provided

　　e. A report that the board has reviewed the effectiveness of the internal controls, including risk management (if no internal audit function, explain the reasons)

　　f. A statement from the directors that the business is going concern

　　g. The member of meetings of the board and those committees and individual directors attendance

　　h. A statement of how the board operates and the type of decision it takes

　　i. Performance management of the board, its committees and its directors

　　j. Sustainable reporting, including the nature and extent of social, transformation, ethical, safety, health and environmental management policies and practices

　　k. An operating and financial review (OFR) set out the directors’ analysis of the business, in order to provide to investors a historical and prospective analysis of the reporting entity through the eyes of management

　　<3> Mandatory and voluntary disclosure

　　a. Definition

　　(a) Mandatory disclosure: information which must be publicly disclosed to comply with laws and regulations

　　(b) Voluntary disclosure: disclosure above mandatory minimum

　　b. Examples of voluntary disclosure

　　(a) CEO’s report, social environment report, additional risk or segment data

　　c. The reasons for voluntary disclosure

　　(a) Accountability / attracts investment: shareholders and potential investors require access to regular, reliable and comparable information on sufficient detail for them to assess the stewardship of management, and make informed decisions about the valuation, ownership and voting of shares.

　　(b) Information asymmetry: good disclosure helps solve barriers of communication between directors and shareholders, reduce agency problems

　　(c) Stakeholders: disclosure helps improve public understanding and companies’ relationships with the communities in which they operate

　　(d) Marketing tool: disclosure gives the user assurance that the management is active and competent in terms of managing the operations of the organization.

　　d. The principles of voluntary disclosure

　　(a) Planned and transparent, and communicated to everyone

　　(b) Involve consultation within the business

　　(c) Take into account all relevant information

　　(d) Comprehensive, consistent and subject to review