China Innovationpay : Terms of Reference of the Audit Committee

Central China Real Estate Limited

China Innovationpay Group Limited

中國創新支付集團有限公司

(incorporated in Bermuda with limited liability (Stock code: 08083)

Terms of Reference of the Audit Committee

Adopted by the Board on 28 March 2012 and updated on 30 May 2016 Definition

"Company"	means China Innovationpay Group Limited 中國創新支付集團 有限公司
"Group"	means the Company and its subsidiaries
"Board"	means the board of Directors of the Company
"Audit Committee"	means the Audit Committee of the Board of the Company
"Director(s)"	means director(s) of the Company
"Independent Non- Executive Directors"	means the independent non-executive Directors of the Company as defined in the Listing Rules
"Stock Exchange"	means The Stock Exchange of Hong Kong Limited
"Listing Rules"	means the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange
"Senior Management"	means the staff regarded as senior management under the Listing Rules

Purpose of the Audit Committee

The purpose of the Audit Committee is to assist the Board to conduct accounting, auditing, financial reporting, risk management and internal control matters of the Group and to comply with relevant laws and regulations and entrusted obligations, including but not limited to assist the Board to review and monitor (a) the completeness of financial reports of the Company, (b) the compliance with the laws and regulations by the Company, (c) the qualifications and independence of independent auditors of the Company, and (d) the performance of independent auditors and internal audit department of the Company.

Constitution

1. The Audit Committee is established by a resolution passed in the Board meeting.

2. The members of the Audit Committee shall be appointed by the Board and shall consist of not less than three Directors. Membership shall be confined to non-executive Directors only, a majority of whom should be Independent Non-Executive Directors. Pursuant to the Listing Rules, at least one member of the Audit Committee should have appropriate accounting or related financial management expertise as required under Rule 5.08(1) of the Listing Rules and meet the standards as set out in Listing Rules.

3. A former partner of the Company's existing external auditor should be prohibited from acting as a member of the Audit Committee for a period of one year commencing from the date of his/her ceasing to:

4. be a partner of the firm; or

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

6. If any member of the Audit Committee is incapable of performing his/her duty for any reason, the Board of the Directors shall promptly appoint appropriate member(s) to the Audit Committee to ensure the number of the members of the Audit Committee meets the quorum.

7. The Chairman of the Audit Committee shall be appointed by the Board and shall be an Independent Non-Executive Director. In the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.

8. The secretary of the Audit Committee shall be the company secretary of the Company. In the absence of the secretary of the Audit Committee, the Audit Committee members present at the meeting shall select another person as the secretary.

   Declaration of Interest

9. Each member in the Audit Committee shall declare to the Audit Committee any of his/her personal financial interest in connection with any matter to be resolved by the Audit Committee and any potential conflict of interest in connection with such matter. Any member with such interest or relates to such potential conflict of interest shall be abstained from voting in the Audit Committee's resolution and discussion in respect of the related matters. The interested member shall resign if requested by the Board.

   Meeting Proceedings

10. Notice of meeting:

11. Unless otherwise agreed by all members of the Audit Committee, at least seven days' prior notice must be given to all members before meeting;

12. Any member may convene a meeting by notifying the secretary of the Audit Committee in writing, and then the secretary of the Audit Committee shall notify the other members in writing or by other ways, or alternatively any member of the Audit Committee may notify the other members directly in writing or orally. The secretary of the Audit Committee may also convene a meeting by notice in writing. The aforesaid "notice in writing" includes notice by facsimile transmission;

13. For any meeting convened by an oral notice, the secretary of the Audit Committee shall issue a written confirmation as soon as practicable and before the meeting; and

14. Any written and oral notice shall state the purpose, time, place, date and agenda of the meeting and shall be accompanied by the relevant documents which may be required to be considered by the members and the secretary of the Audit Committee. Documents should be provided together with meeting agenda which shall be sent together with meeting notice (or written confirmation of an oral notice).

15. The quorum of the meeting of the Audit Committee shall be two members, who may attend meetings in person or through telephone conference or other communication facilities by means of which all attendees of the meeting are capable of hearing each other.

16. The meeting of the Audit Committee shall be held not less than four times a year. The Chairman of the Audit Committee may convene interim meeting. The Audit Committee shall have regular meetings with:-

17. the management of the Company;

18. the head of internal audit department of the Company or any other person in charge of the Company's internal audit function; and

19. the external auditors the Company;

    separately to consider the budget, revised budget and drafts of quarterly report, interim report and annual report presented by the Board or any other matters which the Audit Committee or any aforesaid parties or the Company consider necessary for the Audit Committee's attention. The external auditors of the Company, if they consider necessary, may request the Audit Committee to convene a meeting.

20. The officer(s) in charge of the finance department of the Company and a representative of the external auditors of the Company shall attend the Audit Committee meetings. However, the Audit Committee shall meet with the external and internal auditors of the Company at least once a year without presence of the executive Directors for discussion of any matter of the Company which it considers necessary.

    Authority and Duties

21. The Audit Committee is authorized by the Board to:

22. investigate any activities in respect of the Group within its terms and reference, and request any reports and information from employees of the Group and professional advisers (including auditors). Under the direction of the Board, all employees should co-operate with the Audit Committee, including answer questions raised by it;

23. seek independent legal advice or other professional advice from independent third party with relevant experience and professional expertise, if necessary. Fees of such engagement shall be paid by the Company;

24. ensure individuals with relevant experience and expertise attending the Audit Committee meetings, if it considers necessary;

25. report to the Board any suspected frauds and irregularities, failures of internal control or suspected infringements of laws, rules and regulations which come to its attention and are of sufficient importance to warrant the attention of the board.

26. review the Group's internal control measures and system;

27. review employees' performance of the Group's accounting and internal audit department;

28. assist the board in fulfilling its responsibilities: by providing an independent review and supervision of financial reporting, by satisfying themselves as to the effectiveness of the internal controls of the Group, and as to the adequacy of the external and internal audits;

29. serve as a focal point for communication between other directors, the external auditor and the internal auditor as regards their duties relating to financial and other reporting, internal controls, external and internal audits and such other matters as the board determines from time to time;

30. request the Board to take all necessary actions, including convening an extraordinary general meeting, replacing or removing the auditors of the Group;

31. if the Board disagrees with the Audit Committee with respect to the selection, appointment, resignation or removal of external auditors, the Audit Committee shall arrange its recommendation to be published in the Corporate Governance Report in the Annual Report of the Company and state the disagreed reasoning held by the Board; and

32. be provided with sufficient resources to discharge its duties.

33. Responsibilities of the Audit Committee:

    Relationship with the external auditors

34. to be primarily responsible for making recommendations to the Board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of its resignation or dismissal;

35. to be responsible for monitoring the work done by the external auditors, who must report directly to the Audit Committee;

36. to review and decide with regard to the approval of the annual Engagement Letter of the external auditors of the Company, including the proposed service fees, all non- audit services permitted by the rules and codes in accordance with the audit standards and the Listing Rules, as well as the relationship between the Company and such external auditors. If necessary, such approval can be made after receiving opinions from the management of the Company;

37. to review and monitor the independence and objectivity of the external auditors and the effectiveness of the audit process in accordance with applicable standards, including but not limited to: