Sino Golf Holdings Ltd. : Revised Terms of Reference of Audit Committee

SINO GOLF HOLDINGS LIMITED (THE "COMPANY") AUDIT COMMITTEE

TERMS OF REFERENCE

Constitution
1. The Board resolved to establish a Committee of the Board known as the Audit
Committee on 5 December 2000.
Membership
2. The Audit Committee shall be appointed by the Board from amongst the non-executive Directors of the Company only and should comprise a minimum of three members, at least one of whom is an independent non-executive Director with such qualifications or expertise as required under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules"). The majority of committee members should be independent non-executive Directors of the Company.
3. A former partner of the Company's existing auditing firm shall not act as a member of the Audit Committee until one year after the commencement of the later of the date of his ceasing (a) to be a partner of the firm; or (b) to have any financial interest in the firm.
4. Each appointment to the Audit Committee shall be for a period of up to three years.
Chairman
5. The Board shall appoint the chairman of the Audit Committee. The chairman must be an independent non-executive Director. The chairman has the responsibility of liaising with the Board.
6. The chairman shall chair the meetings of the Audit Committee.
7. In the absence of the chairman of the Audit Committee, the remaining members present shall elect one of themselves to chair the meetings of the Audit Committee.
Quorum and voting of meetings
8. The quorum of Audit Committee meetings shall be two members. If only two members are in attendance, then both members shall be independent non-executive Directors. If more than two members are in attendance, then a majority of the members shall be independent non-executive Directors.
9. Questions arising in any meetings shall be decided by a simple majority of votes.

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Attendance at meetings
10. The Audit Committee members may attend meetings of the Audit Committee either in person or through other electronic means of communication (if made available by the Company). Should any member of the Audit Committee wish to attend a meeting through electronic communications, prior arrangements shall be made with the secretary of the Audit Committee.
11. The Executive Chairman and/or Chief Financial Officer/Financial Controller shall normally attend meetings, with a representative of the external auditors invited at least once a year who will have an opportunity to speak to the Audit Committee without the Executive Chairman and/or Chief Financial Officer/Financial Controller in attendance if so required by the Audit Committee members.
12. The Company Secretary shall be the secretary of the Audit Committee.
Frequency of meetings
13. Meetings shall be held not less than two times a year. Any Audit Committee member may convene a meeting of the Audit Committee and invite any representative of the external auditors to attend the same in the absence of any executive Director or any member of the management of the Company. The external auditors may make the request to the chairman of the Audit Committee to convene a meeting of the Audit Committee and the chairman of the Audit Committee shall have the discretion whether or not to convene such a meeting and decide on the date, time and venue of such meeting.
Notice of meetings
14. Meetings of the Audit Committee shall be convened by the secretary of the Audit Committee at the request of any of its members or at the request of the external or internal auditors.
15. 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:
(a) in relation to all regular meetings of the Audit Committee, at least 14 days before the date of the meeting; and
(b) in relation to all other meetings of the Audit Committee, within a reasonable time prior to the date of the meeting.
16. An agenda of items to be discussed, together with supporting papers shall be sent to Audit Committee members and to other attendees as appropriate within a reasonable time prior to the date of the meeting.
17. Any member of the Audit Committee shall be entitled, by notice to the secretary of the Audit Committee, to include other matters relevant to the functions of the Audit Committee in the agenda of an Audit Committee meeting.

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Minutes of meetings
18. The secretary of the Audit Committee (or his/her delegate) in attendance at the meetings of the Audit Committee shall prepare minutes in sufficient detail of the proceedings and resolutions of all such meetings, including the names of those present and in attendance. The minutes should also include any concerns raised by any member of the Audit Committee and/or dissenting views expressed.
19. The secretary of the Audit Committee shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly. The relevant member of the Audit Committee shall not be counted towards the quorum and he/she must abstain from voting on any resolution of the Audit Committee in which he/she and/or his/her associates have a material interest.
20. Draft and final versions of minutes of Audit Committee meetings shall be sent to all Audit Committee members for their comments and records respectively, 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.
21. 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.
Annual general meetings
22. 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.
23. If the chairman of the Audit Committee is unable to attend an annual general meeting of the Company, he shall arrange for another member of the Audit Committee, or failing this, his duly appointed delegate, to attend in his place. Such person shall be prepared to respond to any shareholder questions on the Audit Committee's activities.
Reporting responsibilities
24. After each meeting, the chairman of the Audit Committee shall report formally to the Board on all matters within its duties and responsibilities.
25. The Audit Committee shall make whatever recommendations it deems appropriate to the Board on any area within its remit where action or improvement is needed.
26. Where the Board disagrees with the Audit Committee's views on the selection, appointment and resignation or dismissal of the external auditor, the Audit Committee shall prepare a statement, for inclusion in the Company's Corporate Governance Report, explaining its recommendations. The Board shall include in

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the same report the reason(s) why the Board takes a different view.
27. The Audit Committee shall, with the assistance of the secretary of the Audit Committee, compile a report to shareholders on its role and activities which will be included in the Company's Corporate Governance Report.
Line of communication
28. The chairman of the Audit Committee shall give instructions (through the Executive Chairman or the Chief Financial Officer) to conduct reviews on areas of possible concern to be performed by the Internal Audit Services of the auditors or, if established, the Company internal auditor.
Authority
29. The Audit Committee is authorized by the Board:
(a) to investigate any activity within its terms of reference;
(b) to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Audit Committee; and
(c) subject to the Company's procedure for seeking external advice, 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.
Duties
30. The duties of the Audit Committee shall be:
(a) to 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 question of their resignation or dismissal;
(b) to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards, and to discuss with the external auditor before the audit commences, the nature and scope of the audit and reporting obligations;
(c) to develop and implement policy on the engagement of an external auditor to supply non-audit services, and to report to the Board and to identify 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;
(d) to review and monitor the integrity of financial statements of the Company and the Company's annual report and accounts and half-year report and if prepared for publication, quarterly reports, and review significant financial reporting judgements contained therein, and to review the half-year and

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annual financial statements before submission to the Board, focusing particularly on:
(i) any changes in accounting policies and practices; (ii) major judgemental areas;
(iii) significant adjustments resulting from the audit; (iv) going concern assumptions and any qualifications; (v) compliance with accounting standards; and
(vi) compliance with the Listing Rules and other legal requirements in relation to financial reporting;
(e) In regard to the above duties, the Audit Committee members shall liaise with the Board, senior management of the Company and the Audit Committee must meet, at least twice a year, with the external auditor, and the Audit Committee shall consider any significant or unusual items that are, or may need to be, reflected in such reports and accounts and to give due consideration to any matters that have been raised by the Company's qualified accountant, external auditor or internal control officer;
(f) to discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary);
(g) 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 systems of control and management's response;
(h) to ensure that the Board will provide a timely response to the issues raised in the external auditor's management letter;
(i) to review the Company's financial controls, internal control and risk management systems;
(j) to discuss with management the system of internal control and ensure that management has discharged its duty to have an effective internal control system;
(k) to review the Company's statement on internal control systems (if any) in the Company's annual reports prior to endorsement by the Board;
(l) where an internal audit function exists, to review the internal audit programme, ensure co-ordination between the internal and external auditors, and 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;
(m) to consider any findings from major investigations of internal control

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matters and management's response to such findings;
(n) to review the Group's financial and accounting policies and practices;
(o) 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 the fair and independent investigation of such matters and for appropriate follow-up action;
(p) to act as the key representative body for overseeing the Company's relationship with the external auditor;
(q) to consider other topics, as defined by the Board; and
(r) to report to the Board on the matters set out herein and matters required to be performed by the Audit Committee under the Code of Corporate Governance Practices of the Listing Rules and its revisions implemented from time to time.
Other
31. The Audit Committee shall have access to sufficient resources in order to discharge its duties. In the event that the Audit Committee determines that it has insufficient resources, it may make a request for additional resources to the Board through the Company Secretary.
32. All members of the Audit Committee shall have access to the advice and services of the secretary of the Audit Committee with a view to ensuring that procedures of the Audit Committee and all applicable rules and regulations are followed.
33. Any member of the Audit Committee may require access to outside legal or other independent professional advice in connection with his/her duties at the Company's expense. All such requests shall be processed in accordance with the Company's procedures for seeking independent professional advice by Directors.
34. Every member of the Audit Committee shall give sufficient time and attention to his/her duties as a member of the Audit Committee. He/she shall give the Company the benefit of his skills and expertise through regular attendance and active participation.

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