BOC HONG KONG (HOLDINGS) LIMITED Mandate of the Strategy and Budget Committee
  1. Purpose

    1. The Strategy and Budget Committee (the "Committee") is a standing committee of the Board of Directors (the "Board"). The purpose of the Committee is to assist the Board in providing strategy and budget guidance to BOC Hong Kong (Holdings) Limited (the "Company"), Bank of China (Hong Kong) Limited (the "Bank") and its subsidiaries (together, the "Group"), including:

      • prepare, with input from Management, Group's medium to long- term strategic plans for board approval;

      • review, motion and monitor the Group's medium to long-term strategy and provide guidance to the Management;

      • review the process for formulating the Group's medium to long-term strategy to ensure that they are sufficiently robust to take into account a range of alternatives;

      • make recommendations to the Board on major investments, capital expenditure, and strategic commitments of the Group and monitor implementation of the same;

      • review budget for board approval and monitor performance against budgeted targets;

      • review and monitor the Group's regular/periodic (including annual) business plan and financial budget.

    2. Roles and Responsibilities
      1. Medium to Long-term Strategy

        1. The Committee is responsible for reviewing and recommending for approval of the Board medium to long-term growth targets for the Group,

          i.e. to answer the question: "Where do we want to be?", "What are the specific targets we want to achieve?"

        2. The Committee shall work with the Management to devise a strategic plan. Based on the plan, targets to be achieved within given timeframe are to be specified.

        3. The Committee can review key strategic plans related to medium to long- term strategic plan, including but not limited to the following subjects:

          • Geographical strategy - the Group's entry to or exit from certain markets;

          • Product profile strategy - manufacture / introduction of new products and / or elimination of existing product lines of the Group;

          • Business line strategy - introduction of new business lines or major expansion or contraction of existing business lines;

          • Other specific strategy providing overall support to the Group's medium to long-term strategy, such as changes to the Group's organization structure, material changes to the Group's capital structure, and IT development strategy.

        4. The Committee shall ensure that the process for formulating the Group's medium to long-term strategic plan is sufficiently robust to take into account a range of alternatives. After evaluating the strategic plans in terms of feasibility and cost-benefit analysis, the Committee shall prioritize the plan and present to the Board for approval. Such strategic plan will form the Group's development direction and implementation targets in medium to long-term.

        5. The Committee shall review and update the strategic plans timely and present recommendations to the Board for approval.

        6. The Committee shall monitor the implementation of the Group's strategic plans and provide guidance to the Management as appropriate.

          1. Budget Control

            1. The Committee shall review the Group's annual business plan and financial budget as formulated by the Management on the basis of the Group's medium to long-term strategic plans and make recommendations to the Board.

            2. During the process of formulating the Group's annual business plan and financial budget, the Committee shall engage in proactive communication with the Management to ensure that such plan and budget are capable of achieving pre-determined targets.

            3. The Committee shall monitor the implementation of the annual business plan and financial budget. In case of significant deviation from the business plan and financial budget, the Committee shall request the Management to identify and analyse the underlying reasons and to present solutions for the

            problem. The Committee is to review the Management's presentation and provide guidance to the Management in reworking the draft. The Committee will then present the revised version to the Board for discussion and approval.

            1. Other Significant Strategic Decisions

              1. With regard to opportunities for significant merger and acquisition, the Committee shall review and make recommendations to the Board on any proposal presented by the Management in this respect.

              2. The Committee is responsible for making recommendations to the Board on proposed major capital expenditure, major investments, and strategic commitments by the Group and monitoring their implementation.

              3. Others

                1. The Committee is responsible for reviewing key issues on corporate social responsibilities.

                2. Reporting Responsibilities

                  1. The Committee shall report to the Board on the matters set out in this Mandate, regularly update the Board at Board meetings or by other means about the Committee's activities and consider other topics as defined by the Board.

                  2. The Committee shall regularly communicate with other Board committees.

                  3. The Committee shall review written reports submitted by the Management which fall within the responsibilities of the Committee.

                3. Composition
                  1. Membership

                    1. The Committee members are non-executive directors and executive directors. If requested to render advice by the Board, Adviser(s) of the Board (if any) could act as the adviser(s) to the Committee.

                    2. Members of the Committee shall possess the authority to discharge their responsibilities and have the necessary skills and experience to determine and advise on strategy and budget issues.

                    3. A quorum shall be three members.

                    4. Members of the Committee shall:

                      • regularly attend the meetings of the Committee and actively express their opinions on the matters discussed during the meeting; and

                      • keep abreast of the roles and responsibilities of the Committee as well as their responsibilities as members of the Committee and of the conduct, business activities and development of the Group.

                    5. Other attendees

                      1. Any member of the Board may, at his/her own volition or at the invitation of the Chairman of the Board or the Chairman of the Committee, attend and participate in the meetings of the Committee.

                      2. The Chief Financial Officer and representatives of the Economics & Strategic Planning Department and Finance Department are normally expected to attend meetings of the Committee to render their assistance to the Committee. If required, other members of the Management and representatives of external consultants are also expected to attend some or all parts of the Committee meetings. All these "other attendees" are expected to provide open, candid and comprehensive input to the Committee as requested.

                      3. The secretary/secretaries of the Committee (the "Committee secretary") shall be appointed by the Board.

                      4. Roles

                        1. The Chairman of the Committee shall be appointed by the Board. The duties and responsibilities of the Chairman of the Committee include but are not limited to:

                          • providing leadership for the Committee and ensuring that the Committee works effectively and discharges its responsibilities;

                          • ensuring that all key issues are discussed by the Committee in a timely manner, and clear and explicit conclusions are achieved for every agenda item discussed in the meetings;

                      BOC Hong Kong (Holdings) Ltd. published this content on 09 November 2017 and is solely responsible for the information contained herein.
                      Distributed by Public, unedited and unaltered, on 09 November 2017 09:43:10 UTC.

                      Original documenthttp://www.bochk.com/dam/bochk/an/2017/20171109c_en.pdf

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