Latest version
(as at 26 February 2014)

TERMS OF REFERENCE FOR REMUNERATION COMMITTEE 1. Purposes

The primary purpose and responsibility of the Remuneration Committee (the "Committee") of SJM Holdings Limited (the "Company") is to set remuneration for the directors of the Company (the "Directors") and senior management.

2. Composition

2.1 Membership
The Committee shall consist of at least three Directors and a majority of whom should be independent non-executive Directors. The board of Directors (the "Board") will designate a committee member as the chairman of the Committee, or if the Board does not do so, the committee members will appoint a committee member as chairman by a majority vote of the authorized number of committee members. The chairman of the Committee should be an independent non-executive Director.
Each member shall disclose to the Committee his interest in any matter to be decided by the Committee. If a member has a conflict of interest which the Committee has determined to be material, the matter should not be dealt with by unanimous written consent of the Committee and the interested member shall not vote nor be counted in the quorum in respect of the relevant resolution(s). Besides, he shall also be physically absent from the venue of the meeting during the time the relevant transaction is being discussed and voted on by the other members.
2.2 Independence
The independent non-executive Directors appointed to the Committee must have been determined by the Board to be independent as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"), as they may be amended from time to time.

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2.3 Appointment
Subject to the requirements of the Listing Rules, the Board may appoint and remove committee members in accordance with the Articles of Association of the Company ("Articles of Association"). Committee members will serve for such terms as the Board may fix, and in any case at the will of the Board, whether or not a specific term is fixed.

3. Functions

3.1 to make recommendations to the Board on the Company's policy and structure for all Directors' and senior management remuneration;
3.2 to make recommendations to the Board on the establishment of a formal and transparent procedure for developing remuneration policy for Directors and senior management;
3.3 to review and approve the management's remuneration proposals with reference to the Board's corporate goals and objectives;
3.4 to determine the remuneration packages of individual executive Directors and senior management, including benefits in kind, pension rights and compensation payments (including any compensation payable for loss or termination of their office or appointment). In doing so, the Committee should consider salaries paid by comparable companies, time commitment and responsibilities, employment conditions in the Company and, where appropriate, elsewhere in members of the Company;
3.5 to make recommendations to the Board on the remuneration of non- executive Directors and independent non-executive Directors. In doing so, the Committee should consider remuneration paid by comparable companies, time commitment and responsibilities of non-executive and independent non-executive Directors;
3.6 to review and approve compensation payable to executive Directors and senior management for any loss or termination of office or appointment to ensure that it is consistent with contractual terms and is otherwise fair and not excessive;

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3.7 to review and approve compensation arrangements relating to dismissal or removal of Directors for misconduct to ensure that they are consistent with contractual terms and are otherwise reasonable and appropriate;
3.8 to ensure that no Director or any of his/her associates is involved in deciding his/her own remuneration. The Committee shall form a view and advise shareholders as to whether the terms are fair and reasonable, whether such contracts are in the interests of the Company and its shareholders as a whole and advise shareholders on how to vote with respect to any service contracts of Directors that require shareholders' approval under Rule 13.68 of the Listing Rules; and
3.9 to consider other topics, as defined by the Board.

In this terms of reference, "senior management" refers to the same persons referred to in the Company's annual report and required to be disclosed under paragraph 12 of Appendix 16 of the Listing Rules.

4. Annual review

The Committee will review its terms of reference on an annual basis.

5. Meetings, reports and resources

5.1 Meetings

5.1.1

The Committee will meet as often as it determines is necessary, but not less than annually. Meetings can be held by way of electronic means of communications.

5.1.2

The Committee may also hold special meetings or act by unanimous

written consent as the Committee may decide consistent with the

Articles of Association.

5.1.3

The Committee may meet in separate executive sessions with other

Directors, the chief executive (as defined in the Listing Rules) and

other Company employees, agents or representatives invited by the

Committee.

5.2

Proce

dures

5.2.1

The Committee may establish its own procedures, including the

formation and delegation of authority to subcommittees, in a manner
not inconsistent with these terms of reference, the Articles of Association and other corporate governance documents, the Listing Rules and applicable laws or regulations.

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5.2.2 The chairman of the Committee or majority of the Committee members may call meetings of the Committee. The secretary of the Committee on requisition of the chairman of the Committee or majority of the Committee members may also call meetings of the Committee.
5.2.3 A majority of the authorized number of committee members will constitute a quorum for the transaction of Committee business, and the vote of a majority of the Committee members present at a meeting at which a quorum is present will be the act of the Committee, unless in either case a greater number is required by these terms of reference, the Articles of Association or the Listing Rules. In case of an equality of votes, the chairman of the Committee shall have a second or casting vote.
5.2.4 The Company Secretary of the Company shall be the secretary of the Committee. Full minutes of the Committee meetings should be kept by the Company Secretary. Draft and final versions of minutes of the meetings should be sent to all Committee members for their comments and records, within a reasonable time after the meeting is held.
5.3 Reports
The Committee will report to the Board the major items covered by the Committee at each Committee meeting, and provide additional reports to the Board as the Committee may determine to be appropriate.
5.4 Committee access and information
5.4.1 The Committee is at all times authorized to have direct, independent and confidential access to the Company's other Directors, management and personnel to carry out the Committee's purposes.
5.4.2 The Committee is authorized to obtain at the Company's expense compensation surveys, reports on the design and implementation of the compensation programmes for the Directors, officers and employees, and other data and documentation as the Committee considers appropriate.
5.5 Committee advisers and funding
The Committee will have sufficient resources to perform its duties. Where necessary, the Committee should seek independent professional advice, at the Company's expense, to perform its responsibilities.

(The English text of this Terms of Reference shall prevail over the Chinese text in case of any inconsistency.)

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