| Constitution |
| 1. |
The Board hereby resolves to establish a Committee of the Board to be known as the Audit Committee. |
| |
|
| Membership |
| 2. |
The Committee shall be appointed by the Board from amongst the Non-Executive Directors of the Company and shall consist of not less than three members, a majority of whom shall be independent non-executive directors. |
| 3. |
The Chairman of the Committee shall be appointed by the Board. |
| 4. |
The Company Secretary shall be the secretary of the Committee. |
| |
|
| Attendance at meetings |
| 5. |
Other Board Members shall also have the right of attendance. However, at least once a year the Committee shall meet with the external auditors without executive Board members present. |
| 6. |
The quorum for a meeting shall be two members. |
| |
|
Frequency of meetings
|
| 7. |
Meetings shall be held not less than twice a year. Additional meetings should be held as the work of the Committee demands. |
| |
|
| Voting of Meetings |
| 8. |
In the case of an equality of votes, the Chairman of the Committee shall be entitled to a casting vote in addition to any other vote he may have. |
| |
|
| Authority |
| 9. |
The Committee is authorized by the Board to investigate any activity of the Company within its terms of reference. The Committee is authorized to obtain all the information and explanations which its members consider necessary to fulfil the duties of the Committee. In consultation with the Chairman of the Board, the Committee may obtain independent professional advice to assist the Committee in their work. |
| 10. |
The Committee shall report to the Board on any of the following irregularities which come to its attention:-
|
(a) |
suspected frauds and other irregularities; |
| |
(b) |
significant weaknesses in internal control and financial and other reporting; |
| |
(c) |
non-compliance with policies and procedures of the Company; or |
| |
(d) |
infringement of the applicable laws, rules and regulations. |
|
| |
|
|
Duties
|
| 11. |
The duties of the Committee shall be:
|
A. |
Relationship with auditors |
|
(a) |
to recommend to the board 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; |
| |
(b) |
to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standard, and to discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences; |
| |
(c) |
to develop and implement policy on the engagement of an external auditor to supply non-audit services. |
| B. |
Review of
financial information |
|
(d) |
to monitor integrity of financial statements of Company and the Company's annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In this regard, in reviewing the Company's annual report and accounts, half-year report and, if prepared for publication, quarterly reports before submission to the board, the committee should focus particularly on:
| (i) |
any changes in accounting policies and practices; |
| (ii) |
major judgmental areas; |
| (iii) |
significant adjustments resulting from audit; |
| (iv) |
the going concern assumptions and any qualifications; |
| (v) |
compliance with accounting standards; and |
| (vi) |
compliance with Exchange Listing Rules and other legal requirements in relation to financial reporting. |
|
| |
(e) |
in regard to (d) above:-
| (i) |
members of the Committee must liaise with the Company's board of directors and senior management and the Committee must meet, at least once a year, with the Company's auditors; and |
| (ii) |
the Committee should consider any significant or unusual items that are, or may need to be, reflected in such reports and accounts and must give due consideration to any matters that have been raised by the Company's staff responsible for the accounting and financial reporting function , compliance officer or auditors; |
|
| C. |
Oversight
of the Company's financial reporting system
and internal control procedures |
|
(a) |
to review the Company's financial controls, internal control and risk management systems; |
| |
(b) |
to discuss with the management and the internal auditors the system and internal control and ensure that management has discharged its duty to have an effective internal control system including the adequacy of resources, qualifications and experience of staff of the Company's accounting and financial reporting function, and their training programmes and budget; |
| |
(c) |
to consider any findings of major investigations of internal control matters as delegated by the board or on its own initiative and management's response; |
| |
(d) |
to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and to review and monitor the effectiveness of the internal audit function; |
| |
(e) |
to review the group's financial and accounting policies and practices; |
| |
(f) |
to review the external auditor's management letter, any material queries raised by the auditor to management in respect of the accounting records, financial accounts or system of control and management's response;
|
| |
(g) |
to ensure that the board will provide a timely response to the issues raised in the external auditor's management letter; |
| |
(h) |
to report to the board on the matters set out in this code provision; and |
| |
(i) |
to consider other topics, as defined by the board. |
|