External Auditors

(Extracted from Annual Report 2021)

The Audit Committee acts as a point of contact, independent from management, with the external auditors (the “auditors”). The auditors have direct access to the Chairman of the Audit Committee, who meets with them periodically without management present.

The Audit Committee’s duties in relation to the auditors include:

recommending to the Board, for approval by shareholders, the auditors’ appointment
approval of the auditors’ terms of engagement
consideration of the letters of representation to be provided to the auditors in respect of the interim and annual financial statements
review of reports and other ad-hoc papers from the auditors
annual appraisal of the quality and effectiveness of the auditors
assessment of the auditors’ independence and objectivity, including the monitoring of non-audit services provided, with a view to ensuring that their independence and objectivity are not, and are not seen to be, compromised
approval of audit and non-audit fees

Auditors' Independence

Independence of the auditors is of critical importance to the Audit Committee, the Board and shareholders. The auditors write annually to the members of the Audit Committee confirming that they are independent accountants within the meaning of Section 290 of the Code of Ethics for Professional Accountants of the Hong Kong Institute of Certified Public Accountants and that they are not aware of any matters which may reasonably be thought to bear on their independence. The Audit Committee assesses the independence of the auditors by considering and discussing each such letter (and having regard to the fees payable to the auditors for audit and non-audit work and the nature of the non-audit work) at a meeting of the Audit Committee.

Provision of Non-audit Services

In deciding whether the auditors should provide non-audit services the following key principles are considered:

the auditors should not audit their own firm's work
the auditors should not make management decisions
the auditors' independence should not be impaired
quality of service

In addition, any services which may be considered to be in conflict with the role of the auditors must be submitted to the Audit Committee for approval prior to engagement, regardless of the amounts involved.

Fees paid to the auditors are disclosed in note 7 to the financial statements.

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