Guoquan Food (Shanghai) Co., Ltd. has approved a detailed Terms of Reference for its Audit and Risk Management Committee, formalising the committee’s mandate, composition and working procedures in line with the PRC Company Law, Hong Kong Listing Rules and the company’s Articles of Association.

Key highlights include:

1. Committee Structure • The committee comprises three non-executive directors, with independent non-executive directors forming a majority and at least one accounting professional. • The chair must be an independent non-executive director, elected within the committee and approved by the board. • Former partners of the company’s current external auditor are barred from committee membership for two years after leaving the firm or ceasing to receive related financial benefits.

2. Principal Responsibilities • Recommend appointment, re-appointment or removal of external auditors and approve their remuneration. • Review the independence and effectiveness of external auditors and oversee any non-audit services they provide. • Examine the truthfulness, completeness and accuracy of annual and half-year financial statements, focusing on accounting policies, significant judgements, major adjustments and going-concern assumptions. • Supervise and evaluate the effectiveness of the group’s risk management and internal control systems, covering financial, operational and compliance controls. • Act in lieu of a supervisory committee under Article 189 of the Company Law, including the power to initiate legal proceedings against directors or senior management for breaches of duty. • Establish confidential procedures for handling complaints or whistle-blowing related to accounting, auditing or internal controls.

3. Working Procedures • The committee must meet at least quarterly; extraordinary meetings can be convened with three days’ notice. • A quorum requires two-thirds of members; resolutions pass with a simple majority. • Committee members are obliged to meet external auditors at least twice a year and maintain confidentiality before public disclosure of financial reports. • Written reports and resolutions on auditor performance, financial disclosures and internal control effectiveness must be submitted to the board ahead of annual report publication.

4. Support and Resources • The committee may engage independent consultants, legal advisers or other professionals at the company’s expense. • A dedicated working group will handle day-to-day coordination, meeting logistics and document management.

5. Disclosure and Governance • Meeting minutes are retained for a minimum of 10 years and key resolutions are reported to the board within one day of adoption. • The committee chair (or a designated member) is required to attend the company’s annual general meeting to address shareholder queries on audit and risk matters.

These Terms of Reference take effect immediately upon board approval and supersede any previous arrangements, ensuring Guoquan Food’s audit oversight and risk governance align with prevailing regulatory standards.