about us

Governance

Sunshine Oilsands and the Board are committed to maintaining high standards of corporate governance. The Company and the Board recognize that high quality corporate governance practices are fundamental to the effective and transparent operation of a corporation and its ability to protect the rights of its shareholders and enhance shareholder value.

Board Composition

The Board comprises 10 Directors (6 male, 4 female): two Executive Directors, four Non-executive directors and four Independent Non-executive Directors (“INEDs”), which exceeds the Listing Rules requirement that INEDs shall represent at least one-third of the Board. The Board of Directors is collectively responsible for directing and supervising the affairs of the Group. The roles and responsibilities of each Board member and their biographical details are available at https://sunshineoilsands.com/about-us/board-of-directors.html

Board Diversity

The Board believes that diversity of experience, professionally and geographically, enhances its decision-making ability. The Board has 10 experts covering the areas of new energy, mechanical engineering, geology, investment, audit, accounting, corporate finance, banking, financial services and law.

Board Committees

The Board is responsible for leadership and promoting the success of the Company by directing and overseeing the Company’s affairs. In addition, the Board is responsible for overseeing the corporate governance and financial reporting of the Company, and for reviewing the effectiveness of the Company’s system of risk management and internal controls. To assist it in fulfilling its duties, the Board has established four board committees: (1) the audit committee; (2) the compensation committee; (3) the corporate governance committee; and (4) the reserves committee.

The primary duties of the corporate governance committee in respect of nominations include, but are not limited to, making recommendations to the Board relating to the appointment or re-appointment of Directors and senior officers, succession planning for Directors, in particular the Executive Chairman and the Non-Executive Vice-Chairman, and the Chief Executive Officer and assessing the independence of Independent Non-Executive Directors. Further, the corporate governance committee has certain duties in respect of other corporate governance matters, including, to consider, develop and review the Company’s corporate governance principles, practices and processes and to make recommendations to the Board, to develop, review and monitor the training and continuous professional development of Directors and senior management, to review and monitor the Company’s policies and practices on compliance with legal and regulatory requirements, to review and monitor the code of conduct and compliance manual applicable to employees and directors and to review the Company’s compliance with the Code as set out in the Listing Rules. Going forward, the corporate governance committee is expected to meet at least once a year to discharge its responsibilities.

The main duties, policies and working process of each board committee can be found at https://sunshineoilsands.com/about-us/committee-charters.html

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

The compensation of Directors is determined by the Board, which receives recommendations from the compensation committee. All of our EDs, INEDs and remaining NEDs received Directors’ fees and Board committee retainers in 2017.

Under our current compensation arrangements, each of our EDs, NEDs, INEDs and senior management are eligible to receive compensation in the form of cash and/or bonuses and are eligible to receive option grants.

Remuneration of the Directors (including retainers, fees, salaries, discretionary bonuses, and other benefits including share based payments) was approximately $7.2 million for the year ended December 31, 2017 (2016–$6.8 million).

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RISK MANAGEMENT AND INTERNAL CONTROL

The Board places great importance on evaluating and determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic objectives, and ensuring the Company establishes and maintains appropriate and effective risk management and internal control systems. The Board would oversee management in the design, implementation and monitoring of the risk management and internal control systems.

The Company reviews and monitors the adequacy and effectiveness of risk management and internal control systems on an ongoing basis so as to ensure that Group’s risk management and internal control systems has been conducted effectively. Since the Company does not have an internal audit function, the Company engaged an external consultant to complete testing of the design and effectiveness of its internal control systems for the year ended December 31, 2017. The audit plans are discussed and agreed to for each year with the audit committee of the Company.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

Qiping Men, Executive Director of the Board and Chief Executive Officer, and Gloria Ho, Executive Director of the Board and Chief Financial Officer, have designed, or caused to be designed under their supervision, internal controls over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Furthermore, the Company used the criteria established in “Internal Control – Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework); they have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company’s ICFR at December 31, 2017, and concluded that the Company’s ICFR are effective at December 31, 2017 for the foregoing purpose.

No material changes in the Company’s ICFR were identified during the three months and year ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR. It should be noted that a control system, including the Company’s disclosure and internal controls and procedures, no matter how well conceived, can provide only reasonable, but not absolute, assurance that the objectives of the control system will be met and it should not be expected that the disclosure and internal controls and procedures will prevent all errors or fraud. In reaching a reasonable level of assurance, management necessarily is required to apply its judgment in evaluating the cost/benefit relationship of possible controls and procedures.

CONNECTED TRANSACTIONS AND RELATIONSHIPS

For the twelve months ended December 31, 2017, a consulting company, to which a director of Sunshine is related, charged the Company $0.6 million (December 31, 2016 – $0.1 million) for management and advisory services.

Mr. Kwok Ping Sun, the Company’s Executive Chairman, has beneficial ownership of, control or direction of 1,658,897,000 common shares of the Company which represents approximately 29.5% of the Company’s outstanding common shares.

During the twelve months ended December 31, 2017 and year 2016, Mr. Kwok Ping Sun purchased securities of the Company and loaned the Company funds on an unsecured basis.

On August 24, 2017, November 16, 2017 and November 28, 2017, the Company signed loan agreements with Prime Union. The Loan interest rate was 6.0% per annum and required repayment in full within three months from the date of the receipt of the loan. As at December 31, 2017, total loan amount was HKD $33.7 million (approximately CAD $5.4 million). As at February 13, 2018, all the Loan and interests were paid in full.

On January 19, 2016, the Company signed an unsecured loan agreement with Tai Feng Investments Limited (“Tai Feng”). Tai Feng is 100% owned by Mr. Kwok Ping Sun, the Company’s Executive Chairman. The loan was considered Permitted Debt under the Company’s Notes as long as it did not exceed USD $5.0 million. The loan had an interest rate of 6.0% per annum, could be drawn up to HKD $38.0 million and required repayment in full within nine months from the date of the receipt of the Loan.

A second loan agreement was signed effective from April 14, 2016 with Tai Feng. This loan had the same interest rate and repayment terms as the loan on January 19, 2016, except it required repayment in full within three months from the date of the receipt of the Loan.

On July 31, 2016, the Loans on January 19 and April 14, 2016 (principle and interest) were converted into equity through private placements.

Save as disclosed above, for the year ended December 31, 2017, the Company has not entered into any connected transactions (as defined under the Listing Rules).

ANNUAL ASSESSMENT

A review of the effectiveness of the Company’s risk management and internal control systems covering all material controls, including financial, operational, compliance, and risk management controls, is conducted annually. The review was conducted at the end of 2017 with reference to the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) internal control framework, which assesses the Company’s internal control system against the five components of internal control: control environment, risk assessment, control activities, information and communication, and monitoring. The Company has also conducted an annual review to assess the adequacy of resources, qualifications and experience of staff of the Company’s accounting and financial reporting functions and their budget (for training and related programs). The approach, findings, analysis and results of this annual review have been reported to the audit committee and the Board. The audit committee and the Board considered the risk management and internal control systems effective and adequate.

HEALTH, SAFETY AND ENVIRONMENT (“HSE”)

Sunshine executives and management believe in the HSE principle of “Safety First” and the Company has a good safety record. In 2017, the Company continued to emphasize improvements in the field safety monitoring system for preventing workplace injuries. We are committed to protecting and promoting the safety and well being of our employees, contractors, communities and the environment. We aim for safe and reliable operations where any risks which compromise the health and safety of workers are identified and addressed.

The Board also reviews and assesses the Company’s health, safety and environment processes and controls.

COMMUNICATIONS WITH SHAREHOLDERS AND INVESTOR RELATIONS

The Company strives to maintain a high level of transparency in its communications with shareholders and investors.

The Company keeps a constant dialogue with the investment community through Company visits, conference calls and information sessions to communicate the Company’s business strategies, developments and goals.

The Company’s annual and interim reports, stock exchange filings, press releases and other information and updates on the Company’s operations and financial performance are available for public access on the Company’s website, www.sunshineoilsands.com/investor/financial-reports, and certain of these documents are also available on the website of the SEHK, www.hkexnews.hk, and on the website of SEDAR, www.sedar.com.

The Company has not made any changes to its constitutional documents during the year ended December 31, 2017.

The Company encourages its shareholders to attend the Company’s general meetings to communicate their views and concerns to the Board directly so as to ensure a high level of accountability and also to stay informed of the Company’s strategies, developments and goals.