PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
See "Item 10. Additional Information" for a description of the rights of securities holders, which remain unchanged.
ITEM 15 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports
filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our chief executive officer
and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our
management, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure
controls and procedures, as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, at March 31, 2018. Based on that evaluation, our principal executive
officer and principal financial officer have concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that information required to be disclosed in the
reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions
regarding required disclosure.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. As required by Rule 13a-15(c) of the Exchange Act, our management conducted an evaluation of our company's internal control
over financial reporting as of March 31, 2018 based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of
March 31, 2018.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of our
internal control over financial reporting to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Our
independent registered public accounting firm, PricewaterhouseCoopers, has audited the effectiveness of our internal control over financial reporting as of March 31, 2018, as
stated in its report, which appears on page F-2 of this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on
Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that Mr. Walter Kwauk, an independent director within the meaning of Section 303A of the
New York Stock Exchange Listed Company Manual and a member of our audit committee, qualifies as "audit committee financial expert" as defined in Item 16A of Form 20-F.
ITEM 16B. CODE OF ETHICS
Our board of directors has adopted a code of ethics that applies to all of our directors, executive officers and employees. We have filed our
code of ethics as an exhibit to our registration statement on Form F-1 (File Number 333-195736), as amended, initially filed with the Commission on May 6, 2014. The code is
also available on our official website under the investor relations section at www.alibabagroup.com.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by
PricewaterhouseCoopers, our principal external auditors, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.
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Year ended
March 31,
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2017
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2018
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(in thousands of RMB)
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Audit Fees
(1)
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52,315
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66,606
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Audit-related Fees
(2)
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3,936
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7,753
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Tax Fees
(3)
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730
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753
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All Other Fees
(4)
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1,023
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5,442
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Total
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58,004
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80,554
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-
(1)
-
"Audit
Fees" represents the aggregate fees billed or to be billed for each of the fiscal years listed for professional services rendered by our principal auditors
for the audit of our annual financial statements and assistance with and review of documents filed with the SEC and other statutory and regulatory filings.
-
(2)
-
"Audit-related
Fees" represents the aggregate fees billed in each of the fiscal years listed for the assurance and related services rendered by our principal
auditors that are reasonably related to the performance of the audit or review of our financial statements and not reported under "Audit Fees."
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(3)
-
"Tax
Fees" represents the aggregate fees billed in each of the fiscal years listed for the professional tax services rendered by our principal auditors.
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(4)
-
"All
Other Fees" represents the aggregate fees billed in each of the fiscal years listed for services rendered by our principal auditors other than services reported
under "Audit Fees," "Audit-related Fees" and "Tax Fees."
The
policy of our audit committee is to pre-approve all audit and non-audit services provided by PricewaterhouseCoopers, including audit services, audit-related services, tax services
and other services as described above, other than those for de minimis services which are approved by the audit committee prior to the completion of the audit.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
On May 18, 2017, we announced the adoption of the 2017 Share Repurchase Program in an aggregate amount of up to US$6.0 billion
over a period of two years. The new program replaced, and cancelled the remaining US$900 million under, our share repurchase program announced in 2015, or the 2015 Share Repurchase Program.
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In
addition, our equity incentive award agreements generally provide that, in the event of a grantee's termination for cause or violation of a non-competition undertaking, we will have
the right to repurchase the shares acquired by the grantee, generally at par or the exercise price paid for these shares. See "Item 6. Directors, Senior Management and
Employees — B. Compensation — Equity Incentive Plans." In addition, when an employee leaves our company, we repurchase any
shares acquired by the employee pursuant to early-exercised but unvested options.
The
table below summarizes the repurchases we made in the periods indicated.
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Month
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Total Number of
Ordinary
Shares
Purchased
(1)
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Total Price
Paid
(1)
(US$)
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Average Price
Paid Per
Ordinary
Share
(1)
(US$)
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Total Number of
Ordinary
Shares
Purchased as
Part of Share
Repurchase
Program
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Approximate
Dollar Value of
Ordinary Shares
that May Yet Be
Purchased
Under Share
Repurchase
Program
(2)
(US$, in millions)
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April, 2017
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—
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—
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—
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—
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900
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May 2017
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—
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—
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—
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—
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6,000
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June 2017
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—
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—
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—
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—
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6,000
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July 2017
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—
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—
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—
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—
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6,000
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August 2017
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—
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—
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—
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—
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6,000
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September 2017
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—
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—
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—
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—
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6,000
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October 2017
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—
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—
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—
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—
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6,000
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November 2017
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—
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—
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—
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—
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6,000
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December 2017
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—
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—
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—
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—
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6,000
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January 2018
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—
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—
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—
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—
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6,000
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February 2018
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4,871
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—
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Par value
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—
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6,000
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March 2018
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—
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—
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—
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—
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6,000
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(1)
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Ordinary
shares we repurchased pursuant to our equity incentive award agreements were generally repurchased at par or the exercise price paid by the grantee for
these shares.
-
(2)
-
Our
2017 Share Repurchase Program, which was adopted in May 2017 and replaces, and cancels the remaining US$900 million under, the 2015 Share
Repurchase Program, authorized the repurchase in an aggregate amount of up to US$6.0 billion over a period of two years.
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE.
We are a "foreign private issuer" (as such term is defined in Rule 3b-4 under the Exchange Act), and our ADSs, each representing
one ordinary share, are listed on the New York Stock Exchange. Under Section 303A of the New York Stock Exchange Listed Company Manual, New York Stock Exchange listed
companies
that are foreign private issuers are permitted to follow home country practice in lieu of the corporate governance provisions specified by the New York Stock Exchange with limited exceptions.
The following summarizes some significant ways in which our corporate governance practices differ from those followed by domestic companies under the listing standards of the New York
Stock Exchange.
Under
the New York Stock Exchange Listed Company Manual, or the NYSE Manual, U.S. domestic listed companies are required to have a majority independent board, which is not
required under the Companies Law of the Cayman Islands, our home country. Currently, our board of directors is composed of eleven members, five of whom are independent directors. In addition, the NYSE
Manual requires U.S. domestic listed companies to have a compensation committee and a nominating/corporate governance committee, each composed entirely of independent directors, which are not
required under the Companies Law of the Cayman Islands. Currently, our
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compensation
committee is composed of three members, only two of whom are independent directors. Our nominating and corporate governance committee is composed of three members, only two of whom are
independent directors. In addition, the NYSE Manual requires shareholder approval for certain matters, such as requiring that shareholders must be given the opportunity to vote on all equity
compensation plans and material revisions to those plans, which is not required under the Cayman Islands law. We intend to comply with the requirements of Cayman Islands law only in determining
whether shareholder approval is required.
ITEM 16H. MINE SAFETY DISCLOSURE.
Not applicable.
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