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ELEGANCE
INTERNATIONAL HOLDINGS LIMITED
TERMS
OF REFERENCE OF AUDIT COMMITTEE
Constitution
The
Board of Elegance International Holdings Limited
(“Company”) hereby
resolves to establish a Committee of the Board to be known as
Audit Committee (“Committee”).
Members
The
Committee shall be appointed by the Board from amongst the
Non-executive Directors and a majority of the Committee members
should be Independent
Non-executive Directors. A quorum
shall be two members. The first period of appointment for
Committee members shall be two years. The Chairman of the
Committee shall be appointed by the Board.
Authority
The
Committee is granted the authority to investigate any activity
within its terms of reference,
and all employees are directed to cooperate as requested by
members of the Committee. The Committee is authorised by the Board
to obtain outside legal or other independent professional advice
as necessary to assist the Committee.
The
Committee should report to the Board any suspected frauds or
irregularities, failures of internal control or suspected
infringement of laws, rules and regulations which come to its
attention.
Responsibility
The
Committee is to serve as a focal point for communication between
other directors, the external auditors and management of the
Company as their duties relate to financial and other reporting,
internal controls, and the external audits
(include other matters the Board
deems necessary). The Committee is to assist the Board in
fulfilling its responsibilities by providing an independent review
of financial reporting, by satisfying themselves as to the
effectiveness of the Company’s internal controls and as to
the sufficiency of the external audits.
Meetings
The
Committee should meet at least two times per year. Additional
meetings should be held as the work of the Committee demands.
Attendance
As
necessary or desirable, the Chairman of the Committee may request
that members of management and representatives of external
auditors be present at meetings of the Committee. Besides, the
Committee may hold the meeting with the external auditors without
attendance of executive board members.
Minutes
Full
minutes of the
Committee should be kept by duly appointed secretary of the
meeting. Draft and final version of minutes
should be sent
to all members of the
Committee for their comments and
records respectively within a reasonable time after the meeting.
Terms
of Reference
Review
and monitor of the relationship with external auditors
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 questions of resignation or dismissal of that
auditor;
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;
To
develop and implement policy on the engagement of an external
auditor to supply non-audit services. The Committee should 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;
Review
of financial information of the Group
To
monitor integrity of financial statements of the Company and the
Company’s annual report and accounts, half-year report, and
to review significant financial reporting judgements contained in
them;
To
review the Annual Report and Interim Report with the management
of the Company and auditors before submission to the
Board;
To
liaise with the Company’s board of directors and senior
management and the Committee must meet, at least once a year,
with the Company’s auditors. 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.;
Oversight
of the Group’s financial reporting system and internal
control procedure
To
review the Company’s financial controls, internal control
and risk management systems;
To
discuss with the management the system of internal control and
ensure that management has discharged its duty to have 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;
To
consider any findings of major investigations of internal control
matters as delegated by the board or on its own initiative and
management’s response;
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 the effectiveness of the internal audit
function;
To
review the Group’s financial and accounting policies and
practices;
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;
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 the code provision
on Corporate Governance Practices; and
Consider
other topics, as defined by the Board.
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