Jiangxi Qiyunshan Food Co., Ltd. (QIYUNSHAN FOOD) released a comprehensive Terms of Reference for its Board Audit Committee, outlining membership requirements, authority, and operational procedures as the company prepares for H-share trading on the Hong Kong Stock Exchange.
Key points:
1. Committee Composition • Minimum of three non-executive directors, with independent directors forming the majority. • An independent director possessing accounting expertise will serve as committee convener. • Former partners of the existing external auditor are barred from committee service for two years after ending their association with the audit firm.
2. Principal Responsibilities • Review and monitor all financial statements, including annual, half-year and (if applicable) quarterly reports, with attention to accounting policy changes, significant judgments, and audit adjustments. • Recommend appointment, re-appointment, or removal of external auditors; approve audit fees and engagement terms; and assess auditor independence, including restrictions on non-audit services. • Supervise internal audit activities, approve annual internal audit plans, evaluate findings, and oversee correction of identified deficiencies. • Assess the effectiveness of internal control and risk-management systems, ensuring disclosure of key processes and material risks in the Corporate Governance Report. • Exercise supervisory powers equivalent to those of a statutory board of supervisors under the PRC Company Law, including proposing extraordinary general meetings and initiating legal actions against directors or executives when necessary.
3. Meeting Protocols • At least one regular meeting per quarter; extraordinary meetings can be convened by any two members or the convener. • Resolutions require a simple majority; members with conflicts of interest must abstain. • Detailed minutes will be retained for a minimum of ten years.
4. Reporting and Disclosure • All significant matters—such as financial information disclosure, changes in accounting policies, and external auditor engagement—require Board approval after Audit Committee endorsement. • The committee will submit an annual connected-transactions report and periodic assessments of external auditor performance to the Board. • The convener (or designated independent director) will attend the company’s annual general meeting to answer shareholder inquiries on committee work.
5. Effective Date The updated charter becomes effective upon the listing of QIYUNSHAN FOOD’s H shares on the Main Board of the Hong Kong Stock Exchange, superseding the company’s previous Audit Committee terms.
The revised mandate aligns the company with Hong Kong Listing Rules and reinforces governance structures, emphasizing transparency, rigorous financial oversight, and robust internal controls.
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