LUYE PHARMA GROUP LTD. LUYE PHARMA GROUP LTD.
(Incorporated in the Bermuda with limited liability)
Terms of Reference for the Audit Committee of the board of directors of the Company
Adopted pursuant to a resolution of the board of directors on 19 June 2014 and amended on 30 December 2015
Purpose
The purpose of the Audit Committee is to assist the board of directors (the ''Board'') of Luye Pharma Group Ltd. (the ''Company'' and together with its subsidiaries, the ''Group'') to establish formal and transparent arrangements for considering how the Board will apply financial reporting, risk management and internal control principles and maintain an appropriate relationship with the Company's auditors.
Composition
The Audit Committee shall comprise a minimum of three (3) members consisting of non-executive directors only. The majority of the Audit Committee must be independent non-executive directors of the Company who should meet the independence requirements set out in Rule 3.13 of Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules''). In addition, the Audit Committee must comprise of at least one independent non- executive director with the appropriate professional qualifications or accounting or related financial management expertise as required under Rule 3.10(2) of the Listing Rules.
The chairman of the Audit Committee (the ''Chairman'') shall be appointed by the Board and must be an independent non-executive director.
The Audit Committee members should be trained on Hong Kong Financial Reporting Standards when they are appointed.
A former partner of the Company's existing auditing firm shall be prohibited from acting as a member of the Audit Committee for a period of one year commencing on the date of his or her ceasing:
to be a partner of the firm; or
to have any financial interest in the firm, whichever is later.
Meetings
The company secretary of the Company (the ''Company Secretary'') or any person designated as such by the Audit Committee from time to time (the ''Designated Person'') shall be the secretary of the Audit Committee.
Meetings of the Audit Committee shall be summoned by the Company Secretary or the Designated Person at the request of the Chairman.
The Audit Committee shall meet at least twice annually and as and when including without limitation (a) any financial information of the Group is to be released; (b) any transaction of the Group that has significant financial consequences is being contemplated; and (c) circumstances require it. The Board, any Audit Committee member or the external auditors may request a meeting if they consider that one is necessary.
Unless otherwise specified, the provisions contained in the Company's bye-laws (as amended from time to time) for regulating meetings and proceedings of directors shall apply to the meetings and proceedings of the Audit Committee.
The chief financial officer of the Company, the head of internal audit department and a representative of the external auditors shall attend regular meetings. Other Board members shall also have the right of attendance. However, at least once a year, the Audit Committee shall meet with the external auditors and the head of internal audit department without executive Board members present.
The Chairman (or in his or her absence, a member of the Audit Committee designated by the Chairman) shall preside at all meetings of the Audit Committee. The Chairman shall be responsible for leading the Audit Committee, including scheduling meetings, preparing agendas and making regular reports to the Board.
For regular meetings and as far as practicable in all other cases, notice of meeting and the agenda and accompanying committee papers should be sent, in full, to all members of Audit Committee at least 3 days before the intended date of meeting (or such shorter period as agreed by the members).
Quorum
The quorum necessary for the transaction of business shall be two (2), including one which has appropriate professional qualifications or accounting or related financial management expertise as required under Listing Rule 3.10(2). 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.
Access
The Audit Committee shall have access to management where necessary or upon request of the chief financial officer of the Company.
The Audit Committee shall be provided with sufficient resources to discharge its duties.
Reporting Procedures
The Audit Committee shall evaluate and assess the effectiveness of the Audit Committee and the adequacy of these terms of reference from time to time and recommend any proposed changes to the Board.
Full minutes of the Audit Committee meetings should be prepared and kept by the Company Secretary or the Designated Person. The minutes should record in sufficient detail the matters considered and decisions reached, including any concerns raised by members of the Audit Committee or dissenting views expressed. Draft and final versions of meeting minutes should be sent to all Audit Committee members for their comment and records respectively, in both cases within a reasonable time after the meeting.
Minutes of meetings of the Audit Committee and the record of individual attendance at such meetings shall be sent to all members of the Board as soon as practicable after the conclusion of any meeting of the Audit Committee and should be open for inspection at any reasonable time on reasonable notice by any member of the Board.
Authority
The Audit Committee is authorised by the Board to conduct any activity contemplated by these terms of reference. It is authorised to seek any information it requires from any employee and all employees of the Company, including the chief financial officer of the Company, are directed to cooperate as requested by members of the Audit Committee.
The Audit 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 at meetings of the Audit Committee if it considers this necessary.
Annual General Meeting
The Chairman shall attend the annual general meeting of the Company prepared to respond to any questions from shareholders on the Audit Committee's activities. In his or her absence, one other member of the Audit Committee or failing this, his or her duly appointed delegate should attend.
Duties
The duties of the Audit Committee as stated by the Board are the following:
to make recommendations 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;
to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Audit Committee should discuss with the external auditors the nature and scope of the audit and reporting obligations before the audit commences;
to develop and implement policy on the engaging an external auditor to supply non-audit services. For this purpose, ''external auditor'' shall include 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 as part of the audit firm nationally or internationally. The Audit Committee should report to the Board, identifying and making recommendations on any matters where action or improvement is needed;
to monitor the integrity of the Company's financial statements and annual reports and accounts, half yearly reports 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 Audit Committee should focus particularly on:
any changes in accounting policies and practices;
major judgmental areas;
significant adjustments resulting from the audit;
the going concern assumptions and any qualifications;
compliance with accounting standards; and
Luye Pharma Group Ltd. issued this content on 2015-12-30 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2015-12-31 02:56:45 UTC
Original Document: http://www.luye.cn//lvye_en/uploads//2015-12/31/_1451529316_9ti7st.pdf
