Far East Horizon Limited has released a comprehensive set of Rules—effective upon Board approval in August 2026—defining the mandate, composition, authority and working procedures of its Audit and Risk Management Committee (the “Committee”).
Key governance objectives • The Committee will formalize the Board’s oversight of financial reporting, risk management, internal control and auditor relations, ensuring compliance with Hong Kong Listing Rules and the company’s articles of association. • It will act as the primary body to recommend the appointment, re-appointment or removal of external auditors, set audit remuneration and terms, and oversee auditor independence.
Composition and tenure • The Board must appoint no fewer than three non-executive directors to the Committee, with a majority being independent; at least one independent member must possess appropriate accounting or financial management expertise. • An independent non-executive director will serve as chairman. • Members serve concurrent terms with the Board; vacancies stemming from director departure will be promptly filled.
Scope of responsibilities 1. Auditor oversight: evaluation of independence, scope and effectiveness of external audits; formulation of policies on non-audit services; coordination if multiple auditors are appointed. 2. Financial reporting review: scrutiny of annual, half-year and any quarterly reports, with focus on accounting policy changes, significant judgments, adjustments, going-concern assumptions and regulatory compliance. 3. Risk management and internal control: assessment of financial controls, resources, staff qualifications and internal audit effectiveness; review of significant investigation findings; monitoring of management’s response to auditor observations. 4. Budget supervision: examination of annual budgets, financial accounts and subsequent budget-execution reports. 5. Governance and compliance: oversight of whistle-blowing mechanisms, director and senior-management training, corporate governance practices and code-of-conduct adherence.
Operating framework • The Committee will meet at least four times annually, convened by its chairman, with a quorum of more than half of its members and decisions passed by simple majority. • Minutes, prepared by the company secretary, will be circulated to the full Board for review. • The Committee may invite directors, the CFO, the chief credit officer, senior management and relevant staff to attend meetings as needed. • Authority extends to engaging external experts or intermediaries at the company’s expense; adequate resources must be provided for effective function.
Confidentiality and conflict-of-interest safeguards • Members must abstain from voting on matters where they hold an interest and are required to maintain confidentiality regarding all deliberations. • Former partners of the company’s audit firm are barred from Committee membership for two years post-association, safeguarding auditor independence.
Disclosure commitments • The Committee’s terms of reference will be published on both the Hong Kong Stock Exchange and corporate websites. • Should any divergence arise between Board and Committee over auditor appointments or removals, the company will disclose both viewpoints in its Corporate Governance Report.
Implementation timeline The Rules take effect upon the Board’s resolution in August 2026, with future amendments subject to alignment with prevailing laws, regulations and the company’s articles of association.
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