Shandong Extreme Vision Technology Co., Ltd. (EXTREME VISION) has released the “Terms of Reference for the Audit Committee of the Board of Directors,” establishing a formal framework for its Audit Committee in line with PRC Company Law, the Hong Kong Stock Exchange Listing Rules and the company’s Articles of Association. The document takes effect upon the listing of the company’s H-shares in Hong Kong.
Key provisions include:
1. Committee Composition • Minimum of three non-executive directors, with at least one independent non-executive director (INED) holding recognised accounting or financial expertise. • A former partner of the company’s external auditor cannot join the committee within two years of leaving the audit firm or divesting any financial interest. • The committee chair must be an INED and a professional accountant; members serve concurrent three-year terms with the Board.
2. Core Responsibilities • External Audit Oversight: Assess auditor independence, approve appointment or dismissal, review fees and engagement terms, and evaluate audit diligence. A private session with the auditor is mandatory at least once a year. • Internal Audit Guidance: Endorse the annual internal audit plan, review findings and track rectifications; the internal audit department reports directly to the committee. • Financial Reporting Review: Scrutinise annual, half-year and quarterly statements, focusing on accounting policy changes, major judgements, adjustments, going-concern assumptions and compliance with HKEX rules. • Risk Management & Internal Control: Examine the overall control framework, resource adequacy and staff competence; review self-evaluation and external audit reports; supervise remediation of control deficiencies. • Governance & Compliance: Oversee corporate governance practices, director and senior management training, code of conduct enforcement and whistle-blowing arrangements.
3. Meeting Protocols • A minimum of four regular meetings per year, with ad-hoc sessions as needed. • Quorum set at two-thirds of members; resolutions require majority approval. • Members generally attend in person, though proxies are permitted; voting may be by show of hands, poll or telecommunication. • Minutes are maintained by the Board secretary, and confidentiality obligations apply to all participants.
4. Authority & Resources The committee may engage external advisers at the company’s expense to obtain independent professional opinions. It also serves as the key liaison among management, internal auditors and external auditors, and reports directly to the Board.
The charter underscores Extreme Vision’s intent to align its governance mechanisms with Hong Kong market standards, enhancing transparency and oversight ahead of its planned listing.
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