Great Wall Technol. : GWT: Terms of reference of the Nomination and Remuneration Committee of the Board of Directors

Great Wall Technology Company Limited Implementation Rules for Nomination and Remuneration Committee under the Board of Directors Chapter 1 General

Rule 1. In order to further establish a solid system for the appraisal and remuneration management of the directors, supervisors and other senior management officers of the Company (hereinafter collectively the "Senior Management") and streamline the corporate governance structure, the Company had established a nomination and remuneration committee (hereinafter the "Committee") under the board of directors (hereinafter the "Board") and set out the implementation rules herein pursuant to The Company Law of the People's Republic of China, Code of Corporate Governance for Listed Companies in China, Articles of Association, Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (hereinafter the "Listing Rules") and relevant rules under The Code on Corporate Governance Practices and Corporate Governance Report as set out in Appendix 14 to the Listing Rules.
Rule 2. The Committee is a specialized function set up by the Board through a resolution passed at the general meeting. Its primary functions are to analyze the nomination of and appraisal standard for, and carry out the appraisal on and make recommendations for, the Senior Management of the Company and to analyze, review and make recommendations to the Board on the remuneration and payment of the Senior Management of the Company and the policies and proposals relevant to the remuneration. The Committee shall be responsible to the Board.
Rule 3. The term "Senior Management" in the implementation rules herein shall refer to president, the vice president, the directors, the supervisors, the general managers appointed by the Board, the secretary of the Board and other Senior Management recognized by the Board who receive remuneration from the Company. Senior management officers who are not receiving remuneration from the Company shall not be subject to appraisal under the implementation rules herein.

Chapter 2 Composition

Rule 4. The Committee shall consist of not less than three directors with a majority of independent non-executive directors.
Rule 5. The members of the Committee shall be nominated by the president or by more than half of the independent non-executive directors, or by more than one-third of all the directors, and shall be elected by the Board.

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Rule 6. The Committee shall have one chairman acted by an independent non- executive director who shall chair the Committee; the chairman shall be elected by the Nomination and Remuneration Committee among the members who are independent non-executive directors and shall be reported to the Board for approval.
Rule 7. The term of office of any member of the Committee shall be the same as his term of office on the Board. Upon expiry of the term of office, he shall be subject to re-election and re-appointment. Where a member ceases to be a director of the Company during his term of office, he will be automatically disqualified as a member of the Committee. The Board shall fill the vacancy pursuant to the above Rule 4 to Rule 6.

Chapter 3 Duties and Authority

Rule 8. The Committee shall set up its subordinate work team which is specialized in providing information about the operation of the Company and relevant information about the appraised individuals, preparing the meetings of the Committee, arranging daily work and executing relevant resolutions of the Committee.
Rule 9. The major duties of the Committee are: (A) Major duties regarding the remuneration:
1. to set out a remuneration plan or proposal according to the major terms of reference, duties and importance of the positions of directors, supervisors and Senior Management and the remuneration standard of relevant positions in other relevant corporations on an equal, fair and reasonable basis; the remuneration plan or proposal shall mainly include but not limited to the standard for, process of and major appraisal system for performance appraisal and the major proposals and systems for rewards and punishments, etc.;
2. to make recommendations to the Board on the remuneration policy and structure for all the directors (including non-executive directors and independent non-executive directors) and Senior Management and on the establishment of a formal and transparent procedure for developing remuneration policy;
3. t o r ev i ew r eg u l a r l y t h e d u t i e s p e r f o r m e d b y t h e d i r e c t o r s , t h e supervisors and Senior Management of the Company and conduct an annual performance appraisal;
4. to review and approve the management's remuneration proposals with reference to the Board's corporate goals and objectives;

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5. to make recommendations to the Board on the remuneration packages of individual executive directors and Senior Management. This should include benefits in kind, pension rights and compensation payments, including any compensation payable for loss or termination of their office or appointment;
6. to make recommendations to the Board on the remuneration of non- executive directors;
7. 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;
8. 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;
9. to report the remuneration plan, policy or proposal for the directors of the Company to the Board for approval and submit it to the general meeting to give effect through resolutions; the remuneration proposal for other Senior Management appointed by the Board shall be reported to the Board for approval;
10. to submit the remuneration report to shareholders or to mak e recommendations to the Board in relation to the submission of the remuneration report to shareholders;
11. to monitor the execution of the remuneration policy of the Company; and to ensure that no director or any of his associates is involved in deciding his own remuneration;
12. where the Board resolves to approve any remuneration or compensation arrangements with which the Committee disagrees, the Board should disclose the reasons for its resolution in its next Corporate Governance Report; and
13. other matters regarding the remuneration as authorized by the Board.

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(A) Major duties regarding the nomination:
1. to review the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and make recommendations on any proposed changes to the Board to complement the Company's strategy;
2. to identify individuals suitably qualified to become Board members and select or make recommendations to the Board on the selection of individuals nominated for directorships;
3. to assess the independence of independent non-executive directors with reference to the circumstances as set out in Rule 3.13 to the Listing Rules;
4. to make recommendations to the Board on the appointment or re- appointment of directors and succession planning for directors, in particular the chairman and the chief executive; and
5. other matters regarding the nomination as authorized by the Board.
Rule 10. The Committee should be provided with sufficient resources to perform its duties. Where necessary, the Committee should seek independent professional advice, at the Company's expense, to perform its responsibilities.
Rule 11. The Committee should make available its terms of reference in respect of remuneration and nomination explaining its role in both aspects and the authority delegated to it by the Board by including them on the website of The Stock Exchange of Hong Kong Limited and the Company's website.
Rule 12. The Committee shall be in compliance with any requirements, instructions and rules as determined by the Board from time to time and Articles of Association, the Listing Rules or any requirements, instructions and rules in applicable laws.

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Chapter 4 Decision Process

Rule 14. The work team under the Committee shall carry out preliminary preparation work for the Committee's decision making and provide information of the Company in written form in relation to the nomination and remuneration, which shall mainly include:
(A) the completion progress of major financial indicators and operation objectives of the Company;
(B) the division of scope of work and major duties of Senior Management of the
Company;
(C) the completion progress of the indicators involved in the system for performance appraisal for the positions of directors, supervisors and Senior Management;
(D) the operating performance in relation to the business innovation and profitability of the directors, supervisors and Senior Management;
(E) relevant reference to the calculation in the remuneration plan and distribution of the Company according to the Company's results.
Rule 15. The appraisal process for the Senior Management by the Committee shall include:
(A) the Senior Management of the Company shall report his work and conduct self-evaluation to the Committee under the Board;
(B) t h e C o m m i t t e e s h a ll c o n d u c t p e r f o r m a n c e a p p r a i s a l o n t h e S e n i o r Management according to the standard and process for performance appraisal;.
(C) the Committee shall make recommendations on the remuneration of and rewards to the Senior Management according to the results of performance appraisal and the remuneration policy, which shall be reported to the Board of the Company upon approval by poll.

Chapter 5 Rules of Procedure

Rule 16. The Committee shall meet at least once annually. A seven days' notice shall be given to all members before the meeting. The meeting shall be chaired by the chairman acted by an independent non-executive director, or, where the chairman is unable to present at the meeting, another independent non-executive director as authorized by the chairman.

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Rule 17. The meetings of the Committee shall only be held with the presence of two or more members. Each member shall have one vote. Resolutions made at the meeting shall be passed by two or more members.
Rule 18. Resolutions at the meetings of the Committee shall be determined by show of hands or by poll. The meetings may be held through telephone or similar communication facilities, as long as the members can clearly hear from and communicate with other members, in this case, all members attended shall be deemed to have been presented at the meetings in person.
Rule 19. Where necessary, the Committee may invite the Senior Management and members of the work team of the Company to its meetings.
Rule 20. Where necessary, the Committee may appoint intermediary agencies to provide professional advices on its decisions and the fees shall be borne by the Company.
Rule 21. Whenever matters in relation to particular members are discussed at the meetings of the Committee, such members shall avoid discussing about or voting for the relevant matters.
Rule 22. The convening procedure, voting ways and the remuneration policy and proposal passed at the meetings of the Committee shall be in accordance with the laws, regulations, Articles of Association and the implementation rules herein.
Rule 23. Minutes shall be taken for the meetings of the Committee. Members presented at the meetings shall sign on the minutes. The minutes shall be kept and handled by the secretary of the Board. Minutes of the meetings of the Committee should be sent to all Committee members within a reasonable time after the meetings.
Rule 24. The resolutions and poll results at the meetings of the Committee shall be reported to the Board of the Company in written form.
Rule 25. Members who attend the meetings shall keep confidential all the proceedings at the meetings and shall not disclose any relevant information without authorization.

Chapter 6 Notes

Rule 26. The implementation rules herein shall be effective from the date on which the Board's resolutions passed.

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Rule 27. Events that are not listed in the implementation rules herein shall be executed under relevant laws and regulations in the PRC, Articles of Association and the Listing Rules. If these implementation rules are in conflict with any laws and regulations issued in the PRC in the future, the Listing Rules or Articles of Association as modified through legal procedures, the implementation rules herein shall be executed under relevant laws, regulations, the Listing Rules and Articles of Association and shall be modified forthwith and reported to the Board of the Company for approval.
Rule 28. The right to interpretion of the implementation rules herein shall belong to the Board of the Company.

These terms of reference and implementation rules of the Committee were passed by the Board's resolutions on and effective from 29 March 2012.

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