Shuangdeng Group Co., Ltd. has released a detailed set of Rules of Procedures for its Board Audit Committee, reinforcing oversight of financial reporting, risk management and auditor supervision.
Key points:
• Committee Structure: The Audit Committee will comprise three directors, with a majority of independent non-executive directors (INEDs); at least one INED must be a professional accountant and one must possess appropriate accounting or financial management expertise. An INED accounting professional will serve as chairperson.
• Nomination & Tenure: Members are nominated by the board chair, a majority of INEDs or one-third of directors, and elected by a board majority. The committee’s term aligns with the board’s tenure; departing directors automatically vacate their committee seats.
• Expanded Mandate: – Recommend appointment, reappointment or removal of external auditors, approve their fees and engagement terms, and monitor their independence—particularly regarding non-audit services. – Oversee internal audit, including annual plan approval, system design, report review and follow-up on rectification measures. – Review all financial statements and market disclosures, focusing on accounting policy changes, significant judgments, major audit adjustments and compliance with accounting standards and Hong Kong Listing Rules. – Assess the effectiveness of Shuangdeng’s internal control and risk-management systems, ensuring adequate resources, staffing and training within the finance function. – Coordinate communication among management, internal audit, external auditors and other relevant departments.
• Meeting Protocols: The Audit Committee will convene at least twice annually, with extraordinary meetings possible at the request of any member. Decisions require a quorum of two-thirds of members and a majority vote. Minutes will be maintained by the board secretary, and resolutions reported to the full board.
• Resources & Independence: The committee is guaranteed sufficient resources, may engage external advisers at the company’s expense, and is tasked with establishing confidential whistleblowing channels for employees and third parties.
• Oversight Alignment: The committee assumes functions akin to a supervisory board under the PRC Company Law, reinforcing Shuangdeng’s commitment to robust corporate governance and transparent financial oversight.
The new procedures take effect upon board approval and will be updated to remain consistent with evolving laws, regulations and the Hong Kong Listing Rules.
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