ESTUN (02715) announced a new set of Terms of Reference for its Board of Directors’ Audit Committee, applicable upon the issuance and listing of its H shares on The Stock Exchange of Hong Kong Limited. According to the document, the Audit Committee is established under the Board to supervise and evaluate internal and external auditing, financial disclosures, and internal control systems.

The announcement details that the Committee shall exercise functions comparable to a supervisory committee, given that the company does not have a separate supervisory body. The Committee comprises three directors who do not hold senior management positions. At least two directors must be independent, and at least one independent director is required to have an accounting background. A chairperson (convener) of the Committee must also be an accounting professional. Committee members are elected by the Board, with a term of office coinciding with the Board’s tenure.

The Terms of Reference outline the main duties of the Committee, including reviewing financial statements, monitoring the truthfulness and accuracy of disclosures, recommending the appointment or removal of external auditors, and ensuring effective coordination between internal and external audits. The Committee also supervises the overall effectiveness of the company’s internal control mechanisms and risk management measures.

The document emphasizes that the Audit Committee can engage third-party professional agencies, if necessary, to assist in specialized reviews. The Terms of Reference further stipulate that all members must maintain confidentiality and avoid conflicts of interest when discussing and voting on relevant matters. These guidelines will take effect from the date on which ESTUN (02715) completes its listing of H shares. The original Audit Committee Terms of Reference will cease to be valid at that time.