Sunray Engineering Group Limited has released a comprehensive update of its Audit Committee Terms of Reference, originally adopted on 18 March 2020 and amended with effect from 26 June 2026. Key provisions are outlined below:

1. Committee Structure • Membership must comprise at least three non-executive directors, with a majority being independent. • At least one member must possess professional accounting or related financial management expertise, meeting GEM Listing Rule 5.05(2). • The Committee chair must be an independent non-executive director, and no alternates are permitted. • Former partners of the Company’s current audit firm are barred from Committee service for two years after leaving the firm or divesting their interest, whichever is later.

2. Meeting Protocols • Regular meetings are required at least twice annually; additional meetings may be convened as circumstances dictate, including at the request of external auditors. • A quorum of two members is mandatory. • The Committee must meet the external auditor without management present at least once per year.

3. Authority and Resources • The Committee is empowered to obtain any information from Group employees or professional advisers, commission independent reports, and secure external legal or professional advice at the Company’s expense. • It has the right to recommend dismissal of employees, convene shareholder meetings to remove directors, and request replacement of external auditors.

4. Expanded Duties • Primary responsibility for recommending appointment, re-appointment or removal of the external auditor and approving related remuneration and terms of engagement. • Ongoing review of auditor independence, audit scope, and effectiveness. • Detailed scrutiny of annual, interim and quarterly financial statements, with specific focus on accounting policy changes, significant judgments, going-concern assumptions, compliance with GEM Listing Rules, and connected-transaction fairness. • Oversight of financial reporting systems, risk management and internal control procedures, including assessment of resource adequacy, staff qualifications and training within accounting functions. • Coordination between internal and external auditors and evaluation of the internal audit function’s effectiveness. • Establishment of confidential whistle-blowing arrangements for employees to report financial or control irregularities.

5. Veto Rights The Committee holds absolute veto power over: a) Approval of connected transactions requiring independent shareholders’ approval (unless conditioned on such approval); b) Employment or dismissal of the Group’s financial controller or internal audit manager.

6. Reporting and Transparency • The Committee must report to the Board after each meeting and provide summaries for quarterly, interim and annual reports. • The updated Terms of Reference will be published on both the Company’s and Hong Kong Stock Exchange’s websites for stakeholder review.

These revisions aim to reinforce Sunray Engineering’s corporate governance framework, elevate audit independence, and ensure rigorous oversight of financial reporting and internal controls.