Special Announcement

Audit Committee and Finance Committee Terms of Reference

In relation to external audit

1. To make recommendations to the Board on the appointment, re-appointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor.
2. To review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process in accordance with applicable standards, and to discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences.
3. To develop and implement policy on the engagement of an external auditor to supply non-audit services.
4. To oversee the Authority’s relations with the external auditor, meet with the external auditor at least twice a year, review the management letter or any material queries raised by the external auditor and ensure the Authority’s timely response.

In relation to financial reporting and management

5. To monitor the integrity of financial statements, annual report and accounts, and half-yearly report, and to review significant financial reporting judgments contained in them before submission to the Board, focusing particularly on:
 
(a) any changes in accounting policies and practices;
(b) major judgmental areas;
(c) significant adjustments resulting from audit;
(d) the going concern assumptions; and
(e) compliance with accounting standards and requirements in relation to financial reporting.
6. To consider any significant items reflected in the financial report and matters that have been raised by the financial reporting function or auditors.
7. To make recommendations to the Board on the annual budget, the rolling 5-year Financial Plan and the Authority’s financing strategy including the proposed financing plans for the financing of capital expenditure and re-financing of existing borrowings in the budget period.
8. To review the results of the Authority’s operations in terms of revenue and expenditures and treasury activities against the annual budget.
9. To review the Authority’s treasury and financial management policies and strategies.
10. To make recommendations to the Board on airport charges and other pricing and charging polices.

In relation to internal control

11. To ensure that Management has put in place an effective internal control system and the adequacy of resources, qualifications and experience of the financial reporting function.
12. To review the Authority’s internal controls including financial controls and risk management systems.
13. To oversee the Internal Audit function, ensure coordination between the internal and external auditors, and consider major investigation findings on internal control matters and Management’s response.
14. To review the Authority’s whistle-blowing policy periodically and ensure that proper arrangements are in place for the fair and independent investigation of concerns raised and for appropriate follow-up action in accordance with the policy.
15. To report to the Board on matters set out in the Code on Corporate Governance Practices issued by the Stock Exchange of Hong Kong Limited to the extent applicable to the Authority.