Legend Holdings Corporation published the updated “Terms of Reference of the Audit Committee of the Board,” detailing a broadened mandate for the Board-level committee and reinforcing governance across financial reporting, risk management, internal control and audit functions.
The Audit Committee will comprise a minimum of three non-executive Directors, with a majority—and the Chair—being independent non-executive Directors. At least one member must possess professional accounting or related financial management expertise. Membership automatically ceases once a Director leaves the Board.
Key responsibilities are divided into four principal areas: 1) Financial Reporting – The Committee will review annual, interim and, where applicable, quarterly financial statements, assess compliance with accounting standards, scrutinise material adjustments, and oversee dividend proposals that deviate from Board-approved policy. 2) Risk Management & Internal Control – An annual review covering financial, operational, compliance and reporting risks is mandated. Focus areas include changes in significant risks, adequacy of management monitoring, connected-party transactions, and sufficiency of accounting and audit resources. 3) Internal Audit – The Committee will approve internal audit plans, budgets and structure, evaluate the head of internal audit, and ensure unrestricted access and coordination with external auditors. 4) External Audit – Acting as the Company’s primary liaison, the Committee will recommend auditor appointment, terms and remuneration, review audit scope and effectiveness, monitor independence (including non-audit services and staff hiring policies), and meet with auditors at least twice annually.
The Committee is empowered to: • Inspect company finances and internal controls; • Investigate potential Director or management misconduct; • Propose dismissal of Directors or senior managers to the shareholders’ meeting; • Convene or requisition shareholder meetings if the Board fails to do so; • Pursue litigation against Directors or senior managers under PRC Company Law.
Meetings will be held at least twice a year, requiring a three-business-day notice period. Quorum is two members, including at least one independent non-executive Director, and resolutions pass with a simple majority. Minutes are to be kept by the Board Secretary and made available for Director inspection.
The document took effect upon Board approval and will be uploaded to both the Hong Kong Stock Exchange and company websites. Any future amendments must be approved by the Board and aligned with PRC regulations, the Hong Kong Listing Rules and the Articles of Association.
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