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Constitution |
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1. |
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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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. |
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3. |
The Chairman of the Committee shall be appointed by the Board. |
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4. |
The Company Secretary shall be the secretary of the Committee. |
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Attendance at meetings |
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5. |
Other Board Members shall also have the right of attendance. However, at least twice a year the Committee shall meet with the external auditors without executive Board members present. |
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6. |
The quorum for a meeting shall be two members. |
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Frequency and proceedings of meetings |
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7. |
Meetings shall be held not less than twice a year. Additional meetings should be held as the work of the Committee demands. |
| 8. |
Proceedings of the Committee's meetings shall be governed by Article 130 of the Company's articles of association. |
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Voting of Meetings |
| 9. |
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. |
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Authority |
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10.
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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. |
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11. |
The Committee shall report to the Board on any of the following irregularities which come to its attention:-
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(a) |
suspected frauds and other irregularities; |
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(b) |
significant weaknesses in internal control and financial and other reporting; |
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(c) |
non-compliance with policies and procedures of the Company; or |
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(d) |
infringement of the applicable laws, rules and regulations. |
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Duties |
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12. |
The duties of the Committee shall be:
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A. |
Relationship with auditors |
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(a) |
to be primarily responsible for making recommendation 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 its resignation or dismissal; |
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(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; |
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(c) |
to develop and implement policy on engaging an external auditor to supply non-audit services. For this purpose, "external auditor" includes any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally. To report to the board, identifying and making recommendations on any matters where action or improvement is needed. |
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B. |
Review of financial information |
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(d) |
to monitor integrity of the Company's financial statements and 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 reviewing these reports before submission to the board, the committee should focus 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 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 Listing Rules and legal requirements in relation to financial reporting. |
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(e) |
regarding (d) above:-
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(i) |
members of the Committee should liaise with the board and senior management and the Committee must meet, at least twice a year, with the Company's auditors; and |
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(ii) |
the Committee should consider any significant or unusual items that are, or may need to be, reflected in the reports and accounts, it should 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; |
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C. |
Oversight of the Company's financial reporting system and internal control procedures |
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(a) |
to review the Company's financial controls, internal control and risk management systems; |
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(b) |
to discuss the internal control system with management and the internal auditors to ensure that management has performed its duty to have an effective internal control system. This discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company's accounting and financial reporting function; |
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(c) |
to consider major investigations findings on internal control matters as delegated by the board or on its own initiative and management's response to these findings; |
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(d) |
to review arrangement under which employees can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal control or other matters and ensure proper arrangements are in place for fair and independent investigation of these matters and for appropriate follow-up action; |
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(e) |
to act as key representative body for overseeing the relations with the external auditors, 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 its effectiveness; |
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(f) |
to review the group's financial and accounting policies and practices; |
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(g) |
to review the external auditor's management letter, any material queries raised by the auditor to management about accounting records, financial accounts or system of control and management's response; |
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(h) |
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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(i) |
to report to the board on the matters in this code provision; and |
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(j) |
to consider other topics, as defined by the board. |
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