SHENZHEN LDROBOT CO., LTD has released an updated Terms of Reference for its Board Audit Committee, detailing a broader supervisory mandate aimed at reinforcing corporate governance, financial integrity and risk management.
Key structural changes • Composition: The committee will consist of no fewer than three non-executive directors, with a majority required to be independent. At least one independent member must hold professional accounting or financial management qualifications in line with Rule 3.10(2) of the Hong Kong Listing Rules. • Tenure safeguards: Members serve concurrent terms with their directorships and cannot be removed without cause before expiry. Former partners of the company’s external audit firm are barred from committee membership for two years after leaving the firm. • Leadership: An independent non-executive director will chair the committee, responsible for convening meetings and ensuring independence from daily operations.
Enhanced authority and responsibilities • External audit oversight: The committee is empowered to recommend appointment, re-appointment or removal of external auditors, approve audit fees, and set policies governing non-audit services to safeguard auditor independence. • Financial reporting review: Prior to Board submission, the committee must examine annual, semi-annual and (if issued) quarterly reports, with specific focus on accounting policy changes, significant judgements, audit adjustments, going-concern assumptions and compliance with IFRS and Hong Kong Listing Rules. • Internal control and risk management: Mandated to review LDROBOT’s financial risk management framework, internal control effectiveness and resource adequacy in accounting and financial reporting functions. Where significant control defects are identified, the Board must disclose them promptly in accordance with listing regulations. • Whistle-blower mechanism: The committee will oversee arrangements that allow employees, customers and suppliers to confidentially report financial or control improprieties, ensuring fair investigation and follow-up action. • Related-party and major transactions: All significant connected transactions, asset disposals, investments and external guarantees will be vetted by the committee before Board consideration. • Governance monitoring: Duties extend to reviewing corporate governance policies, director training, compliance practices and anti-corruption measures.
Operational framework • Meeting cadence: A minimum of two regular meetings per year is required; additional sessions may be convened by the Board, the chair or at least two committee members, or upon request by the external auditor. • Quorum and voting: Meetings require two-thirds attendance; resolutions pass with a simple majority of all members. • Support and resources: An internal audit department acts as the committee’s secretariat, while the Board secretary coordinates logistics. The committee may engage external advisers at the company’s expense for independent opinions.
Reporting and disclosure • Accountability: The committee reports directly to the Board and must articulate its views in the company’s Corporate Governance Report, especially if the Board’s stance diverges from its recommendations on auditor matters. • Record retention: Meeting minutes and resolutions will be archived for at least ten years.
Implementation timeline The revised Terms of Reference take effect upon Board approval and the listing of LDROBOT’s H-shares on the Main Board of the Stock Exchange of Hong Kong.
By codifying a more rigorous Audit Committee framework, LDROBOT signals its commitment to heightened transparency, stronger internal controls and alignment with Hong Kong’s corporate governance standards.
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