CHINA TRADITIONAL CHINESE MEDICINE HOLDINGS CO. LIMITED 中 國 中 藥 有 限 公 司
A committee of the board known as the audit committee ("the Committee") was established pursuant to the board resolution of CHINA TRADITIONAL CHINESE MEDICINE CO. LIMITED ("the Company") passed on 10 September 1998.
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 at least one of whom is an independent non-executive director with professional qualifications or accounting or related financial management expertise. The majority of the Committee members should be independent non-executive directors. A quorum shall be two members.
The Chairman of the Committee shall be appointed by the board and should be an independent non-executive director.
Attendees shall normally include Committee members, chief financial officer, the finance director, the head of internal audit (where an internal audit function exists), a representative of the external auditors and those with meaningful input to the Committee's activities. However, at least once a year the Committee shall meet with the external and internal auditors (if any) without executive Board members present.
The company secretary shall be the secretary of the Committee. The secretary of the Committee or in his absence, his representative or any one member, shall be the secretary of the meetings of the Committee.
Meetings shall be held not less than twice a year. The external auditors may request a meeting if they consider that one is necessary.
The Committee is authorised by the board to investigate activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
The Committee is authorised by the board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it consider this necessary.
The duties of the Committee shall be :
to be primarily responsible for making recommendations 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 its resignation or dismissal;
to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standard. The Committee should discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences and ensure co- ordination where more than one audit firm is involved;
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. The Committee should report to the board, identifying and making recommendations on any matters where action or improvement is needed;
to approve the policies on hiring employees or former employees of the external auditors and to monitor the implementation of these policies to examine whether there has been any influence by the auditor on the judgment or independence of the audit;
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:
any changes in accounting policies and practices;
major judgmental areas;
significant adjustments resulting from audit;
the going concern assumptions and qualifications;
compliance with accounting standards; and
compliance with the Listing Rules and other legal requirements in relation to financial reporting;
Regarding (e) above:-
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
the Committee should consider any significant or unusual items that are, or may need to be, reflected in the reports and accounts, and should give due consideration to any matters that have been raised by the Company's staff responsible for accounting and financial reporting function, compliance officer or auditors;
to review the Company's financial controls, and unless expressly addressed by a separate Board risk committee, or by the Board itself, to review risk management and interal control systems of the Company;
to discuss the risk management and internal control system with management to ensure that management has performed its duty to have an effective 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;
to consider major investigations findings on risk management and internal control matters as delegated by the board or on its own initiative and management's response to these findings;
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);
to inspect the external auditor's management letter, any material queries raised by the auditor to management about accounting records, financial accounts or systems of controls and management's response;
to review the Company's statement on risk management and internal control systems (where one is included in the annual report) prior to endorsement by the board;
where an internal audit function exists, 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 its effectiveness;
to ensure that the board will provide a timely response to the issues raised in the external auditor's management letter;
to report to the board on the matters set out in provision of terms of reference of
China Traditional Chinese Medicine Co. Limited issued this content on 2016-01-03 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-03 10:55:17 UTC
Original Document: http://www.irasia.com/listco/hk/chinatcm/announcement/a152345-eacterms2016.pdf
