Direct Drive Tech Limited has released the full Terms of Reference for its Board-level Audit Committee, outlining an enhanced governance framework that will take effect upon the company’s H-share listing on The Stock Exchange of Hong Kong Limited (HKEX).
Key structural provisions • Composition: The Audit Committee will comprise three non-executive directors, with a majority being independent. At least one independent director must hold professional accounting or financial management qualifications, satisfying HKEX requirements. • Leadership & Tenure: An independent non-executive director will serve as committee chair. Members’ terms coincide with their board tenure and may be renewed. Any former partner of the company’s external auditor faces a two-year cooling-off period before joining the committee. • Resources & Authority: The committee can engage external legal, audit or other professional advisers at the company’s expense and is empowered to exercise all supervisory functions stipulated under the PRC Company Law.
Expanded mandate • Financial oversight: Responsibilities include reviewing quarterly, interim and annual financial statements; monitoring accounting policies, significant judgments and adjustments; assessing going-concern assumptions; and ensuring compliance with accounting standards and listing rules. • Audit supervision: The committee will recommend appointments, removals and remuneration of external auditors, monitor their independence, and coordinate their work with the internal audit function. • Internal control & risk management: Regular evaluation of financial controls, risk management systems and internal audits; supervision of remediation of control deficiencies; and review of whistle-blowing arrangements. • ESG governance: The committee assumes primary responsibility for environmental, social and governance (ESG) oversight—reviewing strategy and targets, monitoring risk-management processes, scrutinising annual ESG disclosures and ensuring adequate resources for ESG initiatives. • Investment scrutiny: Risk assessments of major investment and connected-transaction proposals will form part of the committee’s ongoing duties.
Operating framework • Meeting cadence: At least two regular meetings per year, with additional sessions convened as required. Quorum requires two-thirds of members, including at least one independent director. • Reporting lines: The committee reports directly to the Board; its minutes are circulated to all directors and retained for a minimum of ten years. • Confidentiality & recusal: Members must disclose any conflicts of interest and abstain from related votes, ensuring objectivity in all deliberations.
Implementation timeline The charter becomes effective once Direct Drive Tech’s H shares commence trading on HKEX (stock code 06731). Any future amendments to the document remain subject to Board approval and prevailing PRC laws, HKEX Listing Rules and the company’s Articles of Association.
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