Chairman of Audit Committee:
Mr. FONG Chung, Mark
Members of Audit Committee:
Ms. TAM Wai Chu, Maria
Mr. FONG Chung, Mark
Dr. WONG Yau Kar, David
Ms. WONG Pui Sze, Priscilla
Rules of Procedure of the Audit Committee
1.1 Meetings shall be held not less than two times a year. The external auditors may make the request to the chairman of the Audit Committee to convene a meeting of the Audit Committee.
1.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date shall be sent to each member of the Audit Committee, and to any other person required to attend in relation to all regular meetings of the Audit Committee, at least 14 days before the date of the meeting; and in relation to continued meetings held within 14 days, no prior notice is required.
1.3 The quorum of Audit Committee meetings shall be two members, one of them should be an independent non-executive Director.
1.4 Members of the Audit Committee may attend meetings either in person, by telephone or through other electronic means of communication (which are available to all attended parties).
1.5 Resolutions of the Audit Committee shall be passed with a majority of votes.
1.6 Resolutions signed by all members of the Audit Committee will be treated valid as if it is passed in the meeting held by the Audit Committee.
1.7 Minutes of the Audit Committee meetings shall be kept by the secretary of the Audit Committee and shall be available for inspection by any member of the Audit Committee and/or any Director of the Company at any reasonable time on reasonable notice. Draft and final versions of minutes of Audit Committee meetings shall be sent to all Audit Committee members for their comment and records, in both cases within a reasonable time after the meeting. Once they are agreed, the secretary of the Audit Committee shall circulate the minutes and reports of the Audit Committee to all members of the Board.
2. Attendance of Meetings
2.1 The Audit Committee shall attend meetings at least once a year with the external auditors without executive Board members present (except those invited by the Audit Committee).
2.2 Upon invitation by the Audit Committee, the following persons may attend all or any of the meetings: (a) the head of internal audit (if absence) the representative of internal audit; (b) the financial controller; (c) other Board members.
2.3 Only members of the Audit Committee shall have the voting powers.
3. Annual general meetings
The chairman of the Audit Committee shall endeavour to attend the annual general meetings of the Company and be prepared to respond to any shareholder questions on the Audit Committee’s activities. If the chairman of the Audit Committee is unable to attend, a member of the Audit Committee (who must be an independent non-executive director) shall attend the annual general meeting of the Company. Such person shall be prepared to respond to any shareholder questions on the Audit Committee’s activities.
4. Duties and responsibilities
The duty of the Audit Committee is to serve as a focal point for communication between other directors, the external auditors, and the management as to their duties relate to financial and other reporting, internal controls and the audits; and to assist the Board in fulfilling its responsibilities by providing an independent review of financial reporting, be satisfying themselves as to the effectiveness of the company’s internal controls and as to the efficiency of the audits.
The duties and responsibilities of the Audit Committee shall be:
4.1 The relationship with the external auditors of the Company:
4.1.1 to make recommendations to the Board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of resignation or dismissal of that auditor;
4.1.2 to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Audit Committee should discuss with the auditor the nature and scope of the audit and reporting obligations;
4.1.3 to develop and implement policy on the engagement of an external auditor to supply non-audit services; and
4.1.4 to report to the Board and to identify and make recommendations on any matters in respect of which it considers that action or improvement is needed and to make recommendations as to the steps to be taken;
4.2 reviewing the financial information of the Company:
4.2.1 to review and monitor the integrity of the financial statements of the Company and the Company’s annual report and accounts and half-year report (if applicable) and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained therein and, in reviewing these reports before submission to the Board, focusing particularly on:
(a) any changes in accounting policies and practices;
(b) major judgmental areas;
(c) significant adjustments resulting from the audit;
(d) going concern assumptions and any qualifications;
(e) compliance with accounting standards; and
(f) compliance with the Listing Rules and legal requirements in relation to financial reporting;
4.2.2 In regard to the above duties:
(a) the Audit Committee members shall liaise with the Board, senior management and the qualified accountant of the Company; and
(b) the Audit Committee shall consider any significant or unusual items that are, or may need to be, reflected in the report and accounts, and give due consideration to any matters that have been raised by the Company’s qualified accountant, external auditor or internal control officer;
4.3 Monitoring the financial and internal control systems:
4.3.1 to review the Company’s financial controls, internal control and risk management systems;
4.3.2 to discuss with management the system of internal control and ensure that management has performed its duty to have an effective internal control system;
4.3.3 to consider any findings from major investigations on internal control matters and management’s response to such findings;
4.3.4 to review the Group’s financial and accounting policies and practices;
4.3.5 to review the “external auditor’s management letter”, any material queries raised by the auditor to management in respect of accounting records, financial accounts or systems of control and management’s response;
4.3.6 to ensure that the Board will provide a timely response to the issues raised in the “external auditor’s management letter”;
4.4 to act as the key representative body for overseeing the Company’s relationship with the external auditor;
4.5 to review arrangements by which employees of the Company may, in confidence, raise concerns about possible improprieties in financial reporting, internal control or other matters and to ensure that proper arrangements are in place for fair and independent investigation of such matters and for appropriate follow-up action;
4.6 to establish a whistleblowing policy and system for employees and those who deal with the Company (e.g. customers and suppliers) to raise concerns, in confidence, with the Audit Committee about possible improprieties in any matter related to the Company;
4.7 to report to the Board on the matters set out herein;and
4.8 to consider other matters, as required by the Board, to be performed by the Audit Committee.
5. Reporting responsibilities
After each meeting, the Audit Committee shall report formally to the Board on all matters within its duties and responsibilities.
6.1 The Audit Committee is authorized by the Board to investigate any financial information and records.
6.2 The Audit Committee is authorized by the Board when necessary to seek any necessary financial information from the employees of the Company and its subsidiaries, request them to prepare and provide financial information and respond to the Audit Committee.
6.3 The Audit Committee is authorized by the Board when necessary to obtain outside legal or other independent professional advice in connection with its duties at the Company’s expense.
6.4 The Audit Committee should have access to sufficient resources in order to discharge its duties.