KERRY LOGISTICS NETWORK LIMITED

嘉里物流聯網有限公司

(Incorporated in the British Virgin Islands and continued into Bermuda as an exempted company with limited liability) Stock Code 636

Audit and Compliance Committee

Terms of Reference

(Revised on 24 November 2017)

Preamble
  1. Kerry Logistics Network Limited (the "Company") was listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "HKEx") on 19 December 2013.

    In compliance with the code of provision of the Corporate Governance Codes issued by the HKEx (the "Corporate Governance Code"), an audit and compliance committee (the "Audit and Compliance Committee") needs to be established with the terms of reference as set out and adopted herein.

    Constitution
  2. The Audit and Compliance Committee was established by resolutions of the board of directors of the Company (the "Board" and each director of the Board, a "Director") on 25 November 2013.

    Membership
  3. The members of the Audit and Compliance Committee shall be appointed by the Board from amongst the non‐executive Directors and shall consist of not less than three members, a majority of whom should be independent non‐executive Directors and at least one of whom should be an independent non‐executive Director with appropriate professional qualifications or accounting or related financial management expertise as required by the Rules Governing the Listing of Securities on HKEx (the "Listing Rules"). The quorum of an Audit and Compliance Committee meeting shall be any two members of the Audit and Compliance Committee, one of whom must be an independent non‐executive Director.

  4. A former partner of the Company's existing auditing firm shall be prohibited from acting as a member of the Audit and Compliance Committee for a period of one year from the date of his ceasing:

    1. to be a partner of the firm; or

    2. to have any financial interest in the firm, whichever is the later.

    3. The chairman of the Audit and Compliance Committee shall be appointed by the Board and should be an independent non‐executive Director.

    4. The term of office of a member of the Audit and Compliance Committee shall be determined by the Board.

      Attendance at meetings
    5. The chief financial officer, the head of internal audit of the Company and representatives of the external auditors shall normally attend meetings. However, at least once a year the Audit and Compliance Committee shall meet with the external and internal auditors without the executive Directors present.

      Frequency and procedure of meetings
    6. Unless otherwise stated herein, the meetings of the Audit and Compliance Committee are governed by the provisions regulating the meetings and proceedings of Directors in the Company's bye‐laws.

    7. Meetings shall be held not less than twice a year or more frequently if the Audit and Compliance Committee determines it to be necessary. The external auditors may request a meeting if they consider that one is necessary. Meetings may be conducted by way of telephone or other electronic means.

    8. The secretary of the Audit and Compliance Committee shall be the company secretary of the Company or his/her appointed delegate.

    9. An agenda and any accompanying Committee papers should be sent in full to all members of the Audit and Compliance Committee in a timely manner and at least three days before the proposed date of a meeting of the Audit and Compliance Committee (or other agreed period).

    10. The Company is obliged to supply the members of the Audit and Compliance Committee with adequate information, in a timely manner, in order to enable them to make informed decisions. Where more detailed and complete information is requested from the senior management, the respective Director shall make further inquiries if needed. The Board or individual director(s) could contact the senior management individually and independently.

      Annual General Meeting
    11. The chairman of the Audit and Compliance Committee shall attend the Company's annual general meeting and be prepared to respond to any shareholder's questions on the Audit and Compliance Committee's activities.

    12. If the chairman of the Audit and Compliance Committee is unable to attend an annual general meeting of the Company, he shall arrange for another member of the Audit and Compliance Committee, or failing this, his duly appointed delegate, to attend in his place. Such person shall be prepared to respond to any shareholder's questions on the Audit and Compliance Committee's activities.

      Authority
    13. The Audit and Compliance Committee is authorised by the Board to seek any information it requires from any employee and all employees are directed to co‐operate with any request made by the Audit and Compliance Committee. It is also authorised by the Board to investigate any activity mentioned in these Terms or otherwise affecting the integrity of the Company.

    14. The Audit and Compliance Committee is authorised by the Board to obtain outside independent professional advice, at the Company's expense, and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Audit and Compliance Committee shall be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any external auditors who advise the Audit and Compliance Committee.

    15. The Audit and Compliance Committee is authorised by the Board to review the effectiveness of the Company's and its subsidiaries' internal control systems, covering all material controls, including financial, operational and compliance controls and risk management functions including financial, business, operational and other risks of the Company and its subsidiaries to undertake any related investigations.

      Duties
    16. The duties of the Audit and Compliance Committee shall include:

      Relationship with the Company's auditors

      1. making recommendations to the Board on the appointment, reappointment and/or removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and to consider any questions of resignation or dismissal of that auditor;

      2. reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards;

      3. developing and implementing policy on the engagement of an external auditor to supply non‐audit services, and to report to the Board, identifying and making recommendations on any matters requiring action or improvement;

      4. discussing with the external auditor before the audit commences, the nature and scope of the audit, and ensuring co‐ordination where more than one audit firm is involved;

      5. discussing problems and reservations arising from the interim and final audits, and any matters the external auditor may wish to discuss;

        Review of financial information of the Company

      6. monitoring the integrity of financial statements, annual reports and accounts, interim reports and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In reviewing these reports and before submission to the Board, the Audit and Compliance Committee should focus particularly on:

        1. any changes in accounting policies and practices;

        2. major judgmental areas;

        3. significant adjustments resulting from audit;

        4. the going concern assumptions and any qualifications;

        5. compliance with accounting standards; and

        6. compliance with any requirements from the HKEx and other legal requirements in relation to financial reporting;

        7. in regard to (f) above:-

          1. liaising with the Board, chief financial officer and the person appointed as the Company's external auditor;

          2. meeting, at least twice a year, with the Company's auditors;

          Kerry Logistics Network Ltd. published this content on 24 November 2017 and is solely responsible for the information contained herein.
          Distributed by Public, unedited and unaltered, on 24 November 2017 10:11:04 UTC.

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