J.Q. Pictures Holdings Limited (the “Company”)
AUDIT COMMITTEE TERMS OF REFERENCE
1) Formation
The Audit Committee was formed on 20 May 2016 pursuant to a resolution of the Board of Directors (the “Board”) passed on the same date.
2) Purpose
The purpose of the Audit Committee is to assist the board in supervising financial reporting, risk management, evaluating the internal control system and the audit process. Review the Commission and ensure that the Company and its subsidiaries comply with the relevant laws, regulations and practices.
3) Composition
The Audit Committee (or the “Committee”) shall consist of at least three Independent Non-Executive Directors (“INED”) of the Board. At the one of Committee members shall be with appropriate professional qualifications or accounting or related financial management expertise. The Board shall nominate and appoint committee members and the committee shall nominate one of the members as the chairman of the committee (the “Chairman”). The Chairman shall be the chairman of the Board or an INED.
4) Frequency of meeting
The Audit Committee shall meet at least two times per year, with an authority to convene additional meetings, as circumstances require. All committee members are expected to attend each meeting, in person or via Tele- or video- conference.
5) Meeting procedures
l Quorum of meeting shall not be less than two committee members. Each committee member in the meeting shall carry one vote.
l The committee members shall elect among themselves a Chairman at each meeting.
l The committee members shall also appoint the secretary to the committee (the “Secretary”) from time to time.
l Internal audit supervisors will be invited to attend all committee meetings. The committee shall invite any director, executive or other members and external auditors or other professionals to attend meetings as necessary.
l Resolution of the Audit Committee at any meetings shall passed by a majority of votes of the members present.
l A resolution in writing signed by all the committee members of the Audit Committee shall be valid and effectual as if it had been passed at a meeting of the Audit Committee duly convened and held.
l Secretary who shall be responsible for preparation of meeting agenda and minutes. Meeting agenda shall be provided in advance to J.Q. PICTURES HOLDINGS LIMITED (the “Company”) AUDIT COMMITTEE TERMS OF REFERENCE members, along with appropriate briefing materials.
l Minutes shall be prepared and endorsed by the Audit Committee. The said minutes shall then be circulated to all members of the Board. The Chairman of the Audit Committee shall report any findings and recommendation to the Board thereafter.
6) Responsibilities
The Audit Committee shall carry out the following responsibilities:
(a) primarily responsible for advising the board of directors on the appointment, re-appointment and removal of the external auditor, approving the remuneration and terms of employment of the external auditor and any questions of its resignation or dismissal.
(b) 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.
(c) develop and implement policy on engaging the External Auditors to supply non-audit services. For the purpose of this clause, “External Auditors” 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 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.
(d) monitor integrity of the Company’s financial statements, annual report and accounts, half-year reports and, if prepared for publication, quarterly report, and review significant financial reporting judgments contained in them. In reviewing these reports before submission to the Board, the Audit Committee should focus particularly on:
(i) any changes in accounting policies and practices;
(ii) major judgmental areas;
(iii) significant adjustments resulting from the audit;
(iv) the going concern assumption and any qualifications;
(v) compliance with accounting and auditing standards; and
(vi) compliance with the Listing Rules and legal requirements in relation to financial reporting.
(e)
(i) members of the Audit Committee should liaise with the Board and senior management of the Company and the Committee must meet, at least twice a year, with the External Auditors; and
(ii) the Audit Committee should consider any significant or unusual items that are, or may need to be, reflected in the report and accounts, and should give due consideration to any matters that have been raised by the Company’s staff responsible for accounting and financial reporting function, the compliance officer of the Company or External Auditors
(f) review the Group’s financial control, internal control and risk management;
(g) discuss the internal control systems with management to ensure that management has performed its duty to have effective systems. 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;
(h) consider major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and management’s response to those findings;
(i) where an internal audit function exists, ensure co-ordination between IA People and the External Auditors, and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and review and monitor its effectiveness;
(j) review the Group’s financial and accounting policies and practices;
(k) review the External Auditor’s management letter, any material queries raised by the External Auditor to management about accounting records, financial accounts or system of control and management’s response;
(l) ensure that the Board will provide a timely response to the issues raised in the External Auditor’s management letter;
(m) report to the Board on the matters set out in this Code
(n) consider other topics as defined by the Board.
(The Chinese version of these terms of reference is a translated version of the English version and is for reference only. In case of inconsistency between the two versions, the English version shall prevail.)
J.Q. Pictures Holdings Limited (the “Company”)
AUDIT COMMITTEE TERMS OF REFERENCE
1) Formation
The Audit Committee was formed on 20 May 2016 pursuant to a resolution of the Board of Directors (the “Board”) passed on the same date.
2) Purpose
The purpose of the Audit Committee is to assist the board in supervising financial reporting, risk management, evaluating the internal control system and the audit process. Review the Commission and ensure that the Company and its subsidiaries comply with the relevant laws, regulations and practices.
3) Composition
The Audit Committee (or the “Committee”) shall consist of at least three Independent Non-Executive Directors (“INED”) of the Board. At the one of Committee members shall be with appropriate professional qualifications or accounting or related financial management expertise. The Board shall nominate and appoint committee members and the committee shall nominate one of the members as the chairman of the committee (the “Chairman”). The Chairman shall be the chairman of the Board or an INED.
4) Frequency of meeting
The Audit Committee shall meet at least two times per year, with an authority to convene additional meetings, as circumstances require. All committee members are expected to attend each meeting, in person or via Tele- or video- conference.
5) Meeting procedures
l Quorum of meeting shall not be less than two committee members. Each committee member in the meeting shall carry one vote.
l The committee members shall elect among themselves a Chairman at each meeting.
l The committee members shall also appoint the secretary to the committee (the “Secretary”) from time to time.
l Internal audit supervisors will be invited to attend all committee meetings. The committee shall invite any director, executive or other members and external auditors or other professionals to attend meetings as necessary.
l Resolution of the Audit Committee at any meetings shall passed by a majority of votes of the members present.
l A resolution in writing signed by all the committee members of the Audit Committee shall be valid and effectual as if it had been passed at a meeting of the Audit Committee duly convened and held.
l Secretary who shall be responsible for preparation of meeting agenda and minutes. Meeting agenda shall be provided in advance to J.Q. PICTURES HOLDINGS LIMITED (the “Company”) AUDIT COMMITTEE TERMS OF REFERENCE members, along with appropriate briefing materials.
l Minutes shall be prepared and endorsed by the Audit Committee. The said minutes shall then be circulated to all members of the Board. The Chairman of the Audit Committee shall report any findings and recommendation to the Board thereafter.
6) Responsibilities
The Audit Committee shall carry out the following responsibilities:
(a) primarily responsible for advising the board of directors on the appointment, re-appointment and removal of the external auditor, approving the remuneration and terms of employment of the external auditor and any questions of its resignation or dismissal.
(b) 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.
(c) develop and implement policy on engaging the External Auditors to supply non-audit services. For the purpose of this clause, “External Auditors” 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 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.
(d) monitor integrity of the Company’s financial statements, annual report and accounts, half-year reports and, if prepared for publication, quarterly report, and review significant financial reporting judgments contained in them. In reviewing these reports before submission to the Board, the Audit Committee should focus particularly on:
(i) any changes in accounting policies and practices;
(ii) major judgmental areas;
(iii) significant adjustments resulting from the audit;
(iv) the going concern assumption and any qualifications;
(v) compliance with accounting and auditing standards; and
(vi) compliance with the Listing Rules and legal requirements in relation to financial reporting.
(e)
(i) members of the Audit Committee should liaise with the Board and senior management of the Company and the Committee must meet, at least twice a year, with the External Auditors; and
(ii) the Audit Committee should consider any significant or unusual items that are, or may need to be, reflected in the report and accounts, and should give due consideration to any matters that have been raised by the Company’s staff responsible for accounting and financial reporting function, the compliance officer of the Company or External Auditors
(f) review the Group’s financial control, internal control and risk management;
(g) discuss the internal control systems with management to ensure that management has performed its duty to have effective systems. 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;
(h) consider major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and management’s response to those findings;
(i) where an internal audit function exists, ensure co-ordination between IA People and the External Auditors, and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and review and monitor its effectiveness;
(j) review the Group’s financial and accounting policies and practices;
(k) review the External Auditor’s management letter, any material queries raised by the External Auditor to management about accounting records, financial accounts or system of control and management’s response;
(l) ensure that the Board will provide a timely response to the issues raised in the External Auditor’s management letter;
(m) report to the Board on the matters set out in this Code
(n) consider other topics as defined by the Board.
(The Chinese version of these terms of reference is a translated version of the English version and is for reference only. In case of inconsistency between the two versions, the English version shall prevail.)