TERMS OF REFERENCE OF AUDIT COMMITTEE

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GLOBAL DIGITAL CREATIONS HOLDINGS LIMITED 
AUDIT COMMITTEE 
TERMS OF REFERENCE 
（As adopted on 1st January 2009 and revised on 22 March 2012)
1. Constitution
   1.1 The audit committee (the “Audit Committee”) is a committee of the board of 
          directors (“Board”). 
2. Membership
  2.1 The Audit Committee members shall be appointed by the Board and shall consist of 
        not less than three members ( the “Members”). 
  2.2 Membership shall be confined to non-executive Directors, the majority of which 
        must be independent non-executive Directors (“INEDs”) and at least one INED 
         with appropriate professional qualifications or accounting or related financial 
         management expertise. 
 2.3 The chairman of the Audit Committee shall be appointed by the Board and must be 
         an INED. 
 2.4 In the event that the Audit Committee comprises a non-executive Director who is a 
       former partner of the Company’s existing auditing firm, such non-executive 
      Director shall be prohibited from acting as a Member of the Audit Committee for a 
      period of one year from the later of (a) the date of his/her ceasing to be a partner of 
       the firm; or (b) the date of his/her ceasing to have any financial interest in the firm.
3. Secretary of the Audit Committee 
  3.1 The Company secretary shall be the secretary of the Audit Committee. 
4. Attendance at meetings 
 4.1 The Audit Committee shall meet as least four times each year. The external 
       auditors may request a meeting if they consider that one is necessary. 
 4.2 Unless otherwise agreed by all the members of the Audit Committee, notice of at 
       least 7 days shall be given for a meeting of the Audit Committee. 
 4.3 A quorum should be three Members. 
 4.4 The Finance Director (if any), the Head of Internal Audit (if any), the Head of 
       Accounts/Finance Department and a representative of the external auditors shall 
        normally attend meetings. Other directors shall also have the right of attendance. 
 4.5 At least once a year, representatives of the Company’s external auditor will meet 
        the Audit Committee without any executive directors being present, except by 
        invitation of the Audit Committee, to discuss matters relating to its audit fees, any 
        issues arising from the audit and any other matters the auditor may wish to raise. 
5. Authority 
 5.1 The Audit Committee is authorised by the Board to investigate any activity within 
        its terms of reference. It is authorised to seek any information it requires from any 
        employee and all employees are directed to co-operate with any request made by 
        the Audit Committee. 
 5.2 The Audit Committee is authorised by the Board to obtain outside legal or other 
        independent professional advice and to secure the attendance of outsiders with 
        relevant experience and expertise if it considers this necessary. 
 5.3 Where the board disagrees with the Audit Committee’s view on the selection, 
        appointment, resignation or dismissal of the external auditors, the issuer should include 
        in the Corporate Governance Report a statement from the Audit Committee explaining 
        its recommendation and also the reason(s) why the Board has taken a different view.
 5.4 The Audit Committee should be provided with sufficient resources to perform its 
       duties. 
6. Duties 
 6.1 The duties of the Audit Committee shall be: 
    Relationship with the Company’s auditor 
    (a) to be primarily responsible for make 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; 
   (b) to 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 auditor the nature and 
        scope of the audit and reporting obligations before the audit commences; 
   (c) to develop and implement policy on engaging an external auditor to supply 
        non-audit services. For this purpose, “external auditor” shall includes 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 Audit Committee should report to the Board, 
        identifying and making recommendations on any matters where action or 
        improvement is needed;
 Review of the Company’s financial information
  (d) to monitor integrity of the Company’s financial statements and the annual 
       report and accounts, half-year report and quarterly reports, and to 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 assumptions and any qualifications; 
      (v) compliance with accounting standards; and 
      (vi) compliance with the GEM Listing Rules and legal requirements in 
           relations to financial reporting; 
 (e) Regarding (d) above:- 
      (i) members of the Audit Committee should liaise with the Board and 
          senior management and the Audit 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, it 
          should give due consideration to any matters that have been raised by 
           the Company’s staff responsible for the accounting and financial 
           reporting function, compliance officer or auditors;
           Oversight of the issuer’s financial reporting system and internal control 
           procedures
(f) to review the external auditor’s management letter, any material queries 
    raised by the auditor to management about accounting records, financial 
    accounts or systems of control and management’s response; 
(g) to ensure that the Board will provide a timely response to the issues raised in 
      the external auditor’s management letter; 
(h) to review the Company’s statement on internal control systems (where one is 
     included in the annual report) prior to endorsement by the Board; 
(i) to review the Company’s financial controls, internal control and risk 
    management systems; 
(j) to discuss the internal control system with management to ensure that 
    management has performed its duty to have an effective internal control 
    system. 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; 
(j) to discuss the internal control system with management to ensure that 
    management has performed its duty to have an effective internal control 
    system. 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; 
(k) (where an internal audit function exists) to ensure co-ordination between the 
     internal and external auditors, and to ensure that the internal audit function is 
    adequately resourced and has appropriate standing within the Company, and 5
    to review and monitor its effectiveness; 
(l) to review arrangements employees of the Company can use, in confidence, to 
    raise concerns about possible improprieties in financial reporting, internal control 
   or other matters. The Audit Committee should ensure that proper arrangements 
   are in place for fair and independent investigation of these matters and for 
   appropriate follow-up action; 
(m) to consider major investigation findings on internal control matters as 
    delegated by the Board or on its own initiative and management’s response to 
    these findings; 
(n) to review the group’s financial and accounting policies and practices; 
(o) to report to the Board on all matters in these term of reference; 
(p) to review the Company compliance with the code of corporate governance 
    and disclosure in the corporate governance report; 
(q) to consider other topics, as defined by the Board. 
7. Reporting procedures 
 7.1 The secretary shall circulate the minutes of meetings of the Audit Committee to all 
       members of the Board. 
 7.2 The Audit Committee should report to the Board after each meeting.