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Board Committees  |  Committee Terms of Reference  :  Audit Committee  ,  Remuneration Committee


  1. Constitution

    1. The board of directors (the “Board”) of Taifook Securities Group Limited (the “Company”) had resolved to establish a committee of the Board, namely, the audit committee (the “Committee”) on 17 July 1998 for the purposes of, inter alias, reviewing the effectiveness of the financial reporting process and internal controls of the Company and its subsidiaries (collectively the “Group”) in accordance with the Listing Rules and Bye-Law 120(1) of the Company’s New Bye-Laws.

    2. The Audit Committee was to reconstitute from time to time in order to fully comply with the new requirements of the Listing Rules.

  2. Membership

    1. 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 the non-executive directors so appointed shall be independent. A quorum for meetings of the Committee shall be three members.

    2. The chairman of the Committee shall be appointed by the Board and should be an independent non-executive director.

    3. A former partner of the Company’s existing auditing firm should be prohibited from acting as a member of the Committee for a period of 1 year commencing on the date of his ceasing:-

      a. to be a partner of the firm; or
      b. to have any financial interest in the firm,

      whichever is the later.

  3. Attendance at meetings of Committee

    1. The finance director, the head of internal audit and a representative of the external auditors shall normally attend meetings of the Committee. Other Board members shall also have the right of attendance. However, at least once a year the Committee shall meet with the external and internal auditors without executive Board members present.

    2. The company secretary shall be the secretary of the Committee. In the absence of the company secretary in any meetings of the Committee, a member of the Committee or the alternate of the company secretary shall act as the secretary of the meeting of the Committee.

  4. Frequency of meetings

    1. Meetings shall be held not less than twice a year. The external auditors or any members of the Committee may request a meeting with or without the presence of executive directors if they consider that is necessary.

  5. Authority

    1. The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employees and all employees are directed to co-operate with any reasonable requests made by the Committee.

    2. The Committee is authorised by the Board, subject to prior discussion concerning the cost, 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.

  6. Duties

    1. The duties of the Committee shall include the following:-

      1.1to make recommendation 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;
      1.2to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process in accordance with applicable standard; to discuss with the external auditor the nature and scope of the audit and reporting obligations before the audit commences; and to ensure co-ordination when more than one audit firm is involved;
      1.3to develop and implement policy on the engagement of an external auditor to supply non-audit services; to report to the Board, identifying any matters in respect of which it considers that action or improvement is needed and make recommendations as to the steps to be taken;
      1.4to review annual reports and accounts, half-year reports and, if prepared for publication, quarterly reports before submission to the Board, focusing particularly on but not limited to:
      1. any changes in accounting policies and practices;
      2. major judgmental areas;
      3. significant adjustments resulting from audit;
      4. the going concern assumptions and any qualifications;
      5. compliance with accounting standards; and
      6. compliance with the Listing Rules and other legal requirements in relation to financial reporting.
      1.5In regard to F.1.4 above:-
      1. members of the Committee must liaise with the Board and senior management and the Committee must meet, at least once a year, with the auditors; and
      2. 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;
      1.6to review the Company’s financial controls, internal control and risk management systems;
      1.7to discuss with the management the system of internal control and ensure that management has put in place 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;
      1.8to consider any findings of major investigations of internal control weaknesses and management’s response;
      1.9to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate reporting system within the Company, and to review and monitor the effectiveness of the internal audit function;
      1.10to review the group’s financial and accounting policies and practices;
      1.11to review the external auditor’s management letter and management’s response;
      1.12to ensure that the Board will provide a timely response to the issues raised in the external auditor’s management letter;
      1.13to consider other topics, as defined by the Board.

  7. Reporting procedures

    1. Draft minutes of the meetings of the Committee should be sent to all members of the Committee for their comment within a reasonable time after the meetings.

    2. Final versions of minutes of the meetings of the Committee should be sent to all members of the Board for their records within a reasonable time after the meetings.

    3. Full minutes of the meetings of the Committee should be kept by the company secretary.


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