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 notless than twice a year. The external auditors may make the request to thechairman 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 toeach member of the Audit Committee, and to any other person required to attendin relation to all regular meetings of the Audit Committee, at least 14 daysbefore the date of the meeting; and in relation to continued meetings heldwithin 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 independentnon-executive Director.
1.4 Members of the Audit Committee may attend meetings either in person, by telephone or through otherelectronic means of communication (which are available to all attendedparties).
1.5 Resolutions of the Audit Committee shall be passed with a majority of votes.
1.6 Resolutions signed by allmembers of the Audit Committee will be treated valid as if it is passed in themeeting held by the Audit Committee.
1.7 Minutes of the Audit Committee meetings shall be kept by the secretary of the Audit Committee andshall be available for inspection by any member of the Audit Committee and/orany Director of the Company at any reasonable time on reasonable notice. Draftand final versions of minutes of Audit Committee meetings shall be sent to allAudit Committee members for their comment and records, in both cases within areasonable time after the meeting. Once they are agreed, the secretary of theAudit Committee shall circulate the minutes and reports of the Audit Committeeto all members of the Board.
2. Attendance of Meetings
2.1 The Audit Committee shallattend meetings at least twice a year with the external auditors, and at leastonce a year without executive Directors present (except those invited by theAudit Committee).
2.2 Upon invitation by theAudit Committee, the following persons may attend all or any of the meetings: (a)the head of internal audit or (if absent) the representative of internal audit;(b) the chief financial officer; and (c) other Board members.
2.3 Only members of the AuditCommittee shall have the voting powers.
3. Annual general meetings
The chairman of the AuditCommittee shall endeavour to attend the annual general meetings of the Companyand be prepared to respond to any shareholder questions on the AuditCommittee’s activities in the annual general meetings. If the chairman of theAudit Committee is unable to attend, a member of the Audit Committee (who mustbe an independent non-executive Director) shall attend the annual generalmeeting of the Company. Such person shall be prepared to respond to anyshareholder questions on the Audit Committee’s activities in the annual generalmeeting.
4. Duties and responsibilities
The duty of the AuditCommittee is to serve as a focal point for communication between otherDirectors, the external auditors, and the management as to their duties relatingto financial and other reporting, internal controls and the audits; and toassist the Board in fulfilling its responsibilities by providing an independentreview of financial reporting, be satisfying themselves as to the effectivenessof the Company’s internal controls and as to the efficiency of the audits.
The duties andresponsibilities of the Audit Committee shall be:
4.1 the relationship with theexternal auditors of the Company:
4.1.1to make recommendations to the Board on the appointment,reappointment and removal of the external auditor, and to approve theremuneration and terms of engagement of the external auditor, and any questionsof resignation or dismissal of that auditor;
4.1.2to review and monitor the external auditor’s independenceand objectivity and the effectiveness of the audit process in accordance withapplicable standards. The Audit Committee should discuss with the auditor thenature and scope of the audit and reporting obligations before the auditcommences;
4.1.3to develop and implement policy on the engagement of anexternal auditor to provide non-audit services; and
4.1.4to report to the Board and to identify and makerecommendations on any matters in respect of which it considers that action orimprovement is needed and to make recommendations as to the steps to be taken;
4.2 reviewing the financialinformation of the Company:
4.2.1to review and monitor the integrity of the financialstatements of the Company and the Company’s annual report and accounts and half-yearreport and, if applicable and prepared for publication, quarterly reports, andto review significant financial reporting judgements contained therein and, inreviewing these financial statements and reports before submission to theBoard, focusing particularly on:
(a)any changes in accounting policies and practices;
(b)major judgemental 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 Rules Governing the Listing of Securities onThe Stock Exchange of Hong Kong Limited (the “Listing Rules”) and legalrequirements in relation to financial reporting;
4.2.2in regard to the above duties:
(a)the Audit Committee members shall liaise with the Board, seniormanagement and the qualified accountant of the Company; and
(b)the Audit Committee shall consider any significant or unusualitems that are, or may need to be, reflected in the report and accounts, andgive due consideration to any matters that have been raised by the Company’squalified accountant, external auditor or internal control officer;
4.3 monitoring the financialreporting system, risk management and internal control systems of the Company:
4.3.1to review the Company’s financial controls, the Company’srisk management and internal control systems;
4.3.2to identify the risk of the Company and its subsidiaries(the “Group”) and decide on risk levels and risk appetite;
4.3.3to approve major decisions affecting the Group’s riskprofile or exposure and give such
guidelines as it considersappropriate;
4.3.4to consider the effectiveness of decision making processesin crisis and emergency situations;
4.3.5to discuss with management the systems of risk managementand internal control and ensure that management has performed its duty to haveeffective internal control systems;
4.3.6to consider any findings from major investigations on riskmanagement and internal control matters and management’s response to suchfindings;
4.3.7to ensure co-ordination between the internal and externalauditors regarding internal audit, and to ensure that the internal auditfunction is adequately resourced and has appropriate standing within theCompany and to review and monitor its effectiveness;
4.3.8to review the Group’s financial and accounting policies andpractices;
4.3.9to review the external auditor’s management letter, anymaterial queries raised by the auditor to management in respect of accountingrecords, financial accounts or systems of control and management’s response;and
4.3.10to ensure that the Board will provide a timely response to theissues raised in the external auditor’s management letter;
4.4to act as the key representative body for overseeing theCompany’s relationship with the external auditor;
4.5 to review arrangements bywhich employees of the Company may, in confidence, raise concerns aboutpossible improprieties in financial reporting, internal control or othermatters, and to ensure that proper arrangements are in place for fair andindependent investigation of such matters and for appropriate action;
4.6to establish a whistleblowing policy and system for employees andthose who deal with the Company (e.g. customers and suppliers) to raiseconcerns, in confidence, with the Audit Committee about possible improprietiesin any matter related to the Company;
4.7to report to the Board on the matters set out herein; and
4.8to consider other matters, as required by the Board, to beperformed by the Audit Committee.
After each meeting, the AuditCommittee shall report formally to the Board on all matters within its dutiesand responsibilities.
6.1The Audit Committee is authorized by the Board to investigate anyfinancial information and records of the Company.
6.2The Audit Committee is authorized by the Board (when necessary)to seek any financial information it requires from any employee of the Group,to require any of them to prepare and provide financial information and answerquestions raised by the Audit Committee.
6.3The Audit Committee is authorized by the Board (when necessary)to obtain legal or other independent professional advice in connection with itsduties at the Company’s expense.
6.4The Audit Committee shall have access to sufficient resources inorder to discharge its duties.