(Also known as Charter of the Audit Committee)
(as amended on 25 June 2004, 11 April 2005 and 7
April 2009)
Constitution
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The
Board hereby resolves to establish a Committee of the Board to be known as
the Audit Committee. |
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Membership
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The
Committee shall be appointed by the Board from amongst the Non-Executive
Directors of the Company. The Committee shall be composed of directors who
are independent of the management of the Company and are free of any
relationship that, in the opinion of the Board, would interfere with their
exercise of independent judgment as Committee members. The Committee shall
consist of not less than three members.&=
nbsp;
A quorum shall be two members. |
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The
Chairman of the Committee shall be appointed by the Board. |
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Attendance at meetings |
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The
Finance Director, the Head of Internal Audit, and a representative of the
external auditors shall normally attend meetings. Other Board members shall also h=
ave
the right of attendance. Ho=
wever,
at least, once a year the Committee shall meet with the external auditors
without executive Board members present. |
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The
Company secretary shall be the secretary of the Committee. |
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Frequency of meetings |
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Meetings
shall be held not less than twice a year either in person or through other
electronic means of communication.
The external auditors may request a meeting if they consider that =
one
is necessary. |
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Authority
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The
Committee is authorised by the Board to investigate any activity within i=
ts
terms of reference. It is
authorised to seek any information it requires from any employee and all
employees are directed to co-operate with any request made by the Committ=
ee. |
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The
Committee is authorised by the Board to obtain outside legal or other
independent professional advice and to secure the attendance of outsiders
with relevant experience and expertise if it considers this necessary. |
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Duties
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The
duties of the Committee shall be: |
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(a) |
To
be primarily responsible for making recommendation to the Board on the
appointment, reappointment and removal of the external auditors, and to
approve the remuneration and terms of engagement of the external auditor,=
and
any questions of resignation or dismissal of that auditor; |
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(b) |
To
discuss with the external auditors before the audit commences, the nature=
and
scope of the audit and reporting obligations, and ensure co-ordination wh=
ere
more than one audit firm is involved; |
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(c) |
To
develop and implement policy on the engagement of an external auditor to
supply non-audit services, and the Committee should report to the Board,
identifying any matters in respect of which it considers that action or
improvement is needed and making recommendations as to the steps to be ta=
ken; |
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(d) |
To monitor
integrity of the half-year and annual financial statements and, if prepar=
ed
for publication, quarterly reports, and to review significant financial
reporting judgements contained in them before submission to the Board,
focusing particularly on: |
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(i) |
Any
changes in accounting policies and practices; |
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(ii) |
Major
judgmental areas; |
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(iii) |
Significant
adjustments resulting from the audit; |
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(iv) |
The
going concern assumptions and any qualifications; |
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(v) |
Compliance
with accounting standards; and |
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(vi) |
Compliance
with the rules governing the listing of securities on the Stock Exchange =
of
Hong Kong Limited and other legal requirements in relation to financial
reporting. |
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Note: |
In
regard to the above duties:- (i) &nbs=
p;
members of the Committee must liaise
with the Board and senior management and the Committee must meet, at least
once a year, with the external auditor; and (ii) &nbs=
p;
the Committee should consider any
significant or unusual items that are, or may need to be, reflected in su=
ch
reports and accounts and must give due consideration to any matters that =
have
been raised by the Company’s staff responsible for the accounting a=
nd
financial reporting function, compliance officer, external auditor or
internal auditor. |
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(e) |
To provide sufficient opportunity for the internal and external audi=
tors
to meet with the members of the Committee without members of management
present. Among the items to be discussed in these meetings are the extern=
al
auditors’ evaluation of the Company’s financial, accounting, =
and
auditing personnel, the co-operation that the external auditors received
during the course of audit, any problems and reservations aris=
ing
from the interim and final audits, and any matters the auditor may wish to
discuss; |
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(f) |
To
review the external auditor’s management letter, any material queri=
es
raised by the external auditor to management in respect of the accounting
records, financial accounts or systems of control and management’s
response, and to ensure that the Board will provide a timely response to =
the
issues raised in the external auditor’s management letter; |
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(g) |
To
review the statement on the
Company’s financial controls, internal control and risk management
systems (where one is included in the annual report) prior to endorsement=
by
the Board; |
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(h) |
To discuss
with the management the system of internal control and ensure that manage=
ment
has discharged its duty to have an effective internal control system
including the adequacy of resources, qualifications and experience of sta=
ff
of the Company’s accounting and financial reporting function, and t=
heir
training programmes and budget; |
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(i) |
To
review with the external auditors, the intern=
al
auditors, and Company’s financial and accounting personnel, =
the
adequacy and effectiveness of the internal audit programme, ensure
co-ordination between the internal and external auditors, and ensure that=
the
internal audit function is adequately resourced and has appropriate stand=
ing
within the Company, by, among other things, elic=
iting
any recommendations for the improvement of such internal audit programme =
or
particular areas where new or more detailed internal audit programme cont=
rols
or procedures are desirable; |
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(j) |
To
consider any findings of ma=
jor investigations
of internal control matters as delegated by the Board or on its own
initiative and management’s response; |
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(k) |
To review and monitor the external auditor’s independence and
objectivity and the effectiveness of the audit process in accordance with
applicable standard, as well as the nature and scope of other professional
services provided to the Company by the external auditors; |
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(l) |
To review the Group’s financial and accounting policies and
practices; |
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(m) |
To review periodically Company policy statements to determine their
adherence to the Company’s codes of conduct; |
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(n) |
To
investigate any matter brought to its attention within the scope of its
duties, and to retain outside legal counsel or other professional advice =
for
this purpose if, in its judgment, that is appropriate; |
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(o) |
To Establish and maintain procedures for: The receipt, retention, and treatment of complaints received by the
Company regarding accounting, internal accounting controls, or auditing
matters; and The confidential, anonymous submission by Company employees of
concerns regarding questionable accounting or auditing matters; |
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(p) |
To perform annually a self-assessment relative to the
Committee’s purpose, duties and responsibilities outlined herein; |
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(q) |
Report
annually, or whenever necessary, to the Board of Directors regarding the
matters set out herein and execution of the Committee’s duties and
responsibilities as well as any issues that arise with respect to the qua=
lity
or integrity of the Company’s financial statements, the CompanyR=
17;s
compliance with legal or regulatory requirements, the performance and
independence of the Company’s independent auditors, or the performa=
nce
of the internal audit function; and |
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(r) |
To
present to the Board of Directors such comments and recommendations as the
Committee deems appropriate, and consider other topics and perform such o=
ther
duties as may be assigned by the Board or deemed appropriate by the Commi=
ttee
within the context of these Terms of Reference. |
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Reporting procedures
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The
secretary shall circulate the minutes of meetings of the Committee to all
members of the Board. |
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