Terms of Reference for Audit Committee

10.2 review the periodic consolidated financial statements comprising the profit andloss statements and the balance sheets and such other information required bythe Listing Manual and the Listing Rules, before submission to the Board forapproval;10.3.1 review together with external auditors, their audit plan (including the natureand scope of the audit and reporting obligations) before the audit commences,the effectiveness of the audit process in accordance with applicable standards,audit report, any material queries raised by the auditor to the Management,management letter and the responses which the external auditors have receivedfrom the Management or difficulties which they have encountered with theManagement in the course of their audit. Ensure that the Board will provide atimely response to the issues raised in the external auditor’s management letter;10.3.2 consider any significant or unusual items that are, or may need to be, reflectedin the financial report and accounts, and give due consideration to any mattersthat have been raised by the staff of the Company responsible for the accountingand financial reporting function, compliance officer or auditors;10.4.1 review with external and internal auditors the adequacy and effectiveness of theGroup’s financial controls, internal control and risk management systems;10.4.2 discuss the internal control system with the Management to ensure that theManagement has performed its duty to have an effective internal control system.This discussion should include the adequacy of resources, staff qualificationsand experience, training programmes and budget of the Group’s accounting andfinancial reporting function;10.4.3 review the Group’s financial and accounting policies and practices;10.5 review the effectiveness of the Company’s internal audit function and the scopeand results of the external audits as well as the independence and objectivity ofthe external auditors;10.6 ensure co-ordination between the internal and external auditors, and that theinternal audit function is adequately resourced and has appropriate standingwithin the Group, and review and monitor its effectiveness;10.7 review with internal auditors, the programme, scope and results of the internalaudit and the Management’s response to their findings to ensure that appropriatefollow-up measures are taken;– 6 –