BaWang International : Terms of Reference for the Audit and Risk Management Committee (in PDF)

Terms of Reference for the Audit and Risk Management Committee of

BAWANG INTERNATIONAL (GROUP) HOLDING LIMITED

(the "Company")

(Stock Code: 01338)

___________________________________________________________________________

(Revised with effect from 1 January 2019)

DEFINITIONS

1. For the purposes of these terms of reference (the "Terms"):-

"Audit Committee"	means the audit and risk management committee from time
to time established by resolution of the Board in accordance
with Article 117(1) of the Articles of Association of the
Company and clause 2 of these Terms
"Board"	means the board of Directors of the Company
"CG Code"	means the Corporate Governance Code in Appendix 14 to
the Listing Rules (as amended from time to time)
"Company Secretary"	means the company secretary of the Company from time to
time
"Directors"	means the directors of the Company
"Director(s) of Finance"	means the senior officers of the Company responsible for
financial management of the Company as appointed by the
Board from time to time
"Group"	means the Company and its subsidiaries and associated
companies from time to time
"Listing Rules"	means the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (as amended from
time to time)
"Senior Management"	means the chairman, chief executive officer, vice chief
executive officer, Directors of Finance, Company Secretary
and any other officers of the Company appointed by the
Board from time to time
"Shareholders"	means the shareholders of the Company from time to time
"Stock Exchange"	means The Stock Exchange of Hong Kong Limited

CONSTITUTION

2.

The Board hereby resolves to establish a committee of the Board to be known as the Audit and Risk Management Committee.

MEMBERSHIP

• 3. The members of the Audit Committee shall be appointed by the Board from time to time from amongst the non-executive Directors of the Company and shall consist of not less than three members, a majority of whom should be independent non-executive Directors, and at least one of whom should be an independent non-executive Director with the appropriate professional qualifications or accounting or related financial management expertise as required by the Listing Rules.

• 4. A quorum of the Audit Committee shall be two members and one of them should be an independent non-executive Director.

• 5. The chairman of the Audit Committee shall be appointed by the Board and shall be an independent non-executive Director.

• 6. Each member of the Audit Committee shall disclose to the Audit Committee the following:-

(a) any and all personal (including those relating to his/her immediate family members)

material interests (other than as Shareholder of the Company, and including financial interest) in any Company matter related to any matter under consideration by the Audit Committee; and

(b)any and all personal potential conflict of interest (including without limitation any financial interest) arising from a cross-directorship or otherwise,

and the secretary of the Audit Committee meeting shall also ascertain, at the beginning of the meeting, the existence of any conflict of interest and minute them accordingly.

• 7. Any member currently, or within one year immediately prior to the date of the relevant matter being considered by the Audit Committee has any material interest (including without limitation any financial interest) in any Company matter being considered by the

  Audit Committee or any potential conflict of interest (including interests of his/her immediate family members) howsoever arising, shall abstain from voting on resolutions of the Audit Committee in relation to which such interest or conflict of interest exists and from participating in the discussions concerning such resolutions and (if so required by the Board) shall resign from the Audit Committee.

• 8. A current or former director, partner or principal of the Company's professional advisor firm which currently provides or has, within two years immediately prior to the date of his/her appointment as a member of the Audit Committee provided services, or was an employee of such a professional advisory firm who is or has been involved in providing services to (1) the Company, its holding company or any of their respective subsidiaries or core connected persons, or (2) any person who was a controlling shareholder or (where there was no controlling shareholder) any person who was the chief executive or a director (other than an independent non-executive director) of the Company, or any of their close associates, shall be prohibited from acting as a member of the Audit Committee for a period of two years commencing on the date of he/she ceasing:

(a) to be a director, partner, principal or employee of the firm; or

(b) to have any financial interest in the firm;

whichever is the later.

MEETINGS

• 9. Unless otherwise specified hereunder, the provisions contained in the Company's Articles of Association (as amended from time to time) for regulating proceedings of Directors' meetings shall apply to the meetings of the Audit Committee.

• 10. Meetings of the Audit Committee shall be held at least twice annually.

• 11. The chairman of the Audit Committee shall convene a meeting upon written request of any member of the Audit Committee.

• 12. A duly convened meeting of the Audit Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Audit Committee.

• 13. Unless otherwise agreed by all the members of the Audit Committee, notice of at least 14 days shall be given for any meeting of the Audit Committee. Agenda and accompanying supporting papers shall be sent to all members of the Audit 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).

• 14. Members of the Audit Committee may participate in any meeting of the Audit Committee by means of a conference telephone or other communications equipment through which all persons participating in the meeting can communicate with each other simultaneously and instantaneously and, for the purpose of counting a quorum, such participation shall constitute presence at a meeting as if those participating were present in person.

• 15. The Director(s) of Finance and the head of internal audit of the Company (if any) shall attend Audit Committee meetings.

• 16. The Audit Committee shall invite the external auditors to attend meetings as it considers necessary.

• 17. The Audit Committee shall meet with the external auditors (if any) annually without the executive Directors present.

18.

The Company Secretary shall be the secretary of the Audit Committee. The Company Secretary or, in his/her absence, his/her delegate(s) or any person elected by the members present at the meeting of the Audit Committee, shall attend the meeting of the Audit Committee and take minutes.

WRITTEN RESOLUTIONS

19. Without prejudice to any requirement under the Listing Rules, written resolution may be passed and adopted by all members of the Audit Committee.

ANNUAL GENERAL MEETINGS

20. The chairman of the Audit Committee shall attend the annual general meeting of the

Company and be prepared to respond to any questions posed therein on the activities or decisions of the Audit Committee.

AUTHORITY

• 21. The Audit Committee is authorised by the Board to discharge its duties within these Terms.

• 22. The Audit Committee is authorised by the Board to seek any information it requires from the Directors and/or Senior Management who must cooperate with the Audit Committee.

• 23. The Audit Committee is authorised by the Board to obtain external independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if and when it considers necessary.

• 24. The Audit Committee shall be provided with sufficient resources to perform its duties.

• 25. The Audit Committee is authorised by the Board to have exclusive responsibility for establishing the selection criteria, selection, appointment and setting of the terms of reference for any external remuneration consultant retained to advise the Audit Committee.

DUTIES

26. The responsibilities and authorities of the Audit Committee shall include such responsibilities and authorities set out in the relevant code provisions of the CG Code, which shall include:

Relationship with the Company's external auditors

(a) acting as the key representative body for overseeing the Company's relations with the external auditor;

• (b) making recommendations to the Board on the appointment, reappointment and removal of the external auditor;

• (c) approving the remuneration and terms of engagement of the external auditor;

• (d) considering any questions relating to the resignation or dismissal of the external auditor;

• (e) reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards;

• (f) discussing with the auditor the nature and scope of the audit and reporting obligations before the audit commences, and ensuring coordination where more than one audit firm is involved;

• (g) developing and implementing policies on engaging an external auditor to supply non-audit services and reports to the Board. 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;

(h) reporting to the Board, identifying and making recommendations on any matters where action or improvement is needed;

Review of financial information of the Company

• (i) monitoring the integrity of the Company's financial statements, annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and reviewing significant financial reporting judgements contained therein;

• (j) in reviewing the Company's financial statements, annual report and accounts, half-year report and quarterly reports, the Audit 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 any qualifications;

  • (v) compliance with accounting standards; and

  • (vi) compliance with the Listing Rules and other legal requirements in relation to financial reporting;

(k)Regarding (j) above:

• (i) members of the Audit Committee should liaise with the Board, Senior Management and the Company's qualified accountant;

• (ii) the Audit Committee must meet with the Company's auditors at least twice a year;

• (iii) the Audit Committee should consider any significant or unusual items that are, or may need to be, reflected in the financial statements, reports and accounts giving due consideration to any matters raised by the Company's staff responsible for the accounting and financial reporting function, qualified accountant, compliance officer or auditors; and

• (iv) discussing problems and reservations arising from the interim and final audits, and any matters the external auditor may wish to discuss (in the absence of Senior Management where necessary) with the external auditor;

Oversight of the Company's financial reporting system, risk management and internal control systems

(l)acting as the key representative body for overseeing the Company's risk management and internal control systems on an ongoing basis;

(m) reviewing, at least annually, the effectiveness of the Group's risk management and internal control systems. The review should cover all material controls, including financial, operational and compliance controls, and consider the following: