(Approved by the Board on 8 March 2005 and last reviewed on 14 March 2012)
Reference to "the Committee" shall mean the Audit Committee
of Tongda Group
Holdings Limited.
Reference to "the Board" shall mean the board of directors
(the "Director") of Tongda
Group Holdings Limited.
Reference to "the Company" shall mean Tongda Group Holdings
Limited and reference to "the Group" shall mean the company
and its subsidiary undertakings.
1.1 The members of the Committee shall be appointed by the
Board from amongst the non-executive Directors of the
Company.
1.2 The majority of the members of the Committee shall be
independent non-executive Directors ("INED") and at least one
of whom must have the appropriate professional qualifications
or accounting or related financial management expertise as
required under Rules (the "Listing Rules") Governing the
Listing of Securities on The Stock Exchange of Hong Kong
Limited.
1.3 Chairman of the Committee shall be appointed by the Board
and must be an INED.
1.4 The Committee shall consist of not less than three
members, all of whom must be non-executive Directors.
1.5 A former partner of the Company's existing external
auditors should be prohibited from acting as a member of the
Committee for a period of one year from his ceasing:
(i) to be a partner of the existing external auditors; or
(ii) to have any financial interest in the existing external
auditors whichever is the later.
1.6 The Board may, from time to time, at their discretion,
amend the terms of reference or adopt new terms of reference
or change the composition of the members of the Committee.
2.1 The company secretary (the "Company Secretary") of the Company shall be the secretary of the Committee. In the absence of the Company Secretary, his/her delegate(s) or any person elected by he members present at the meeting of the Committee, shall attend the meeting and take minutes.
3. MEETING AND PROCEEDINGS
3.1 Unless otherwise stated herein, the meetings and
proceedings of the Committee shall be governed by the
provisions contained in the Company's Articles of
Association (as amended from time to time) for regulating the
meetings and proceedings of Directors.
3.2 Meetings of the Committee shall be planned at the
beginning of each financial year of the Company, and shall
not be less than two times a year to discharge of its duties.
Additional meetings of the Committee may be held as and when
required.
3.3 The Committee shall meet with the external auditors at
least twice a year. The external auditors may request a
meeting if they consider necessary.
3.4 Executive Directors, the external auditors or other
persons who are appropriate may be invited to attend
particular meetings to answer specific points or
concerns.
3.5 The quorum of a Committee meeting shall be any two
members.
3.6 Meeting could be held in person, by telephone or by video
conference. Members of the Committee may participate in a
meeting by means of a conference telephone or similar
communication equipment by means of which all persons
participating in the meeting are capable of hearing each
other.
3.7 Without prejudice to any requirement under the Listing
Rules, a resolution in writing signed by all the members of
the Committee shall be as valid and effectual as if it had
been passed at a meeting of the Committee duly convened and
held.
4.1 A meeting of the Committee may be convened by any of its
members or by the Company Secretary.
4.2 Unless otherwise agreed by all the members of the
Committee, notice of at least 14 days shall be given for a
regular meeting of the Committee. For all other meetings of
the Committee, reasonable notice shall be given.
4.3 Agenda and accompanying supporting papers shall be sent
to all members of the Committee and to other attendees as
appropriate at least 3 days before the date of the meeting
(or such other period as the members may agree).
5.1 Proper minutes of Committee meetings shall be kept by the
Company Secretary and shall be open for inspection by any
Director at any reasonable time on reasonable notice by the
Director.
5.2 Minutes of Committee meetings shall record in sufficient
detail the matters considered by the Committee and decision
reached, including any concerns raised by the Committee
members or dissenting views.
5.3 Draft and final versions of minutes shall be circulated
to all Committee members for their comment and records,
within a reasonable time after the meeting is held.
6.1 The Chairman of the Committee shall endeavor to attend
the Annual General Meetings of the Company and be prepared to
respond to any shareholder questions on the Committee's
work and responsibilities.
6.2 If the Chairman of the Committee is unable to attend an
Annual General Meeting of the Company, he shall arrange for
another member of the 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
Committee's work and responsibilities.
The responsibilities of the Committee shall include such
responsibilities set out in the relevant code provisions of
the Corporate Governance Code (the "CG Code") as contained in
Appendix 15 of the Listing Rules (as amended from time to
time). Without prejudice to any requirement under the CG
Code, in respect of the Group, the Committee shall be
responsible for the following with a view to achieve the
above purposes:
7.1 Relationship with Company's external auditors:
(A) to be primary responsible for making recommendation to
the Board on the appointment, reappointment and removal of
the external auditors, and to approve the remuneration and
terms of engagement of the external auditors, and any
questions of its resignation or dismissal;
(B) to review and monitor the external auditors'
independence and objectivity and the effectiveness of the
audit process in accordance with applicable standards;
(C) to discuss with the external auditors the nature and
scope of the audit and reporting obligations before audit
commences;
(D) to develop and implement policy on engaging an external
auditors 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;
(E) to report to the Board, identifying any matters in
respect of which it considers that action or improvement is
needed and making recommendations as to the steps to be
taken;
(F) to act as the key representative body for overseeing the
Company's relation with the external auditors; and
(G) To discuss with the external auditors problems or
reservations they may have during audit process in the
absence of the management.
7.2 Review of financial information:
(A) to monitor the integrity of the Company's financial
statements and the annual report and accounts and 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:
(i) any changes in accounting policies and practices; (ii)
major judgmental areas;
(iii) significant adjustments resulting from audit;
(iv) the going concern assumptions and qualifications; (v)
compliance with accounting standards; and
(vi) compliance with the Listing Rules and legal requirements
in relation to financial reporting.
(B) In regard to 7.2(A) above:
(i) members of the Committee should liaise with the Board,
and the Chief Financial Officer and the Committee must meet,
at least twice a year, with the Company's external auditors;
and
(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 Chief Financial Officer, or
failing him /her, the staff responsible for the accounting
and financial reporting function, compliance officer or
external auditors.
7.3 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 the internal control system with management 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;
(C) to consider major investigation findings on internal
control matters as delegated by the Board or on its own
initiative and management's response to these findings;
(D) 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;
(E) to review the Group's financial and accounting
policies and practices;
(F) to review the external auditors' management letter,
any material queries raised by the external auditors to
management about accounting records, financial accounts or
systems of control and management's response; and
(G) to ensure that the Board will provide a timely response
to the issues raised in the external auditors'
management letter;
7.4 Other responsibilities:
(A) to review arrangements employees of the Company can use,
in confidence, to raise concerns about possible improprieties
in
financial reporting, internal control or other matters. The
Committee should ensure that proper arrangements are in place
for the fair and independent investigation of such matters
and for appropriate follow-up action;
(B) to satisfy itself that proper business ethics have been
followed; (C) to report all relevant matters to the
Board;
(D) to conduct such investigation in relation to matters or
activity within its terms of reference; and
(E) to consider other topics or carry out any other duties as
the Board may delegate from time to time and report back to
the Board on their discussion or recommendations.
The authorities of the Committee shall include such
authorities set out in the relevant code provisions of the CG
Code as contained in Appendix 15 of the Listing Rules (as
amended from time to time). Without prejudice to any
requirement under the CG Code, the Committee shall have the
following authorities:
8.1 The Committee has unrestricted access to the Chairman,
the Chief Financial
Officer and the external auditors.
8.2 All members of the Committee shall have access to the
advice and services of the Company Secretary with a view to
ensuring that procedures of the Committee and all applicable
rules and regulations are followed, and separate and
independent access to the Company's senior management for
obtaining necessary information.
8.3 Any member of the Committee shall have separate and
independent access to outside legal or other independent
professional advice in connection with his/her duties at the
Company's expense upon reasonable request to the
Chairman of the Committee and the Chairman of the
Company.
8.4 The Committee shall have access to sufficient resources
in order to perform its duties. In the event that the
Committee determines that it has insufficient resources, it
may make a request for additional resources to the Board
through the Company Secretary.
9.1 The Committee Chairman shall report formally to the Board
on its proceedings after each meeting on all matters within
its duties and responsibilities, unless there are legal or
regulatory restrictions on their ability to
do so (such as a restriction on disclosure due to regulatory
requirements).
9.2 The Committee shall also report to the shareholders of
the Company in the Company's Corporate Governance Report
on the work performed during the year in discharging its
responsibilities and duties.
9.3 Where the Board disagrees with the Committee's views
on the selection, appointment and resignation or dismissal of
the external auditor, the Committee shall prepare a
statement, for inclusion in the Company's Corporate
Governance Report, explaining its recommendations. The Board
shall include in the same report the reason(s) why the Board
takes a different view.
Note: If there is any inconsistency between the English and Chinese versions of this Terms of Reference, the
English version shall prevail.
distributed by | This press release was issued by Tongda Group Holdings Ltd. and was initially posted at http://ir.tongda.com/upload/en/announcement/LTN20120319686_20120319214602.pdf . It was distributed, unedited and unaltered, by noodls on 2012-03-19 23:07:26 PM. The issuer is solely responsible for the accuracy of the information contained therein. |