Shanghai FourSemi Semiconductor Co., Ltd. has formally released the “Terms of Reference of the Board Audit Committee,” detailing the remit, composition, operating rules and reporting obligations of its newly constituted Audit Committee.

The committee, a specialized arm of the Board of Directors, will assume supervisory authority equivalent to that of a board of supervisors under China’s Company Law. Its mandate includes oversight of external and internal audits, evaluation of the Group’s internal control framework, and risk analysis of major investment projects.

Key structural provisions: • Composition – The committee must consist entirely of non-executive directors, with a minimum of three members and a majority of independent non-executive directors. At least one member must possess professional accounting or financial management expertise as required by Hong Kong Listing Rules. • Leadership – An independent non-executive director will chair the committee. Former partners of the Group’s current external auditor are barred from committee membership for two years after leaving the firm or divesting their financial interests. • Tenure – Committee tenure aligns with the Board’s term; members may be re-elected. Failure to attend two consecutive meetings without delegation triggers replacement.

Principal responsibilities: • Recommend appointment, re-appointment or removal of external auditors, approve their remuneration, and oversee their independence. • Review annual, half-year and (if prepared) quarterly financial statements before Board consideration, focusing on changes in accounting policies, material adjustments, significant judgements, and compliance with accounting standards and Hong Kong Listing Rules. • Oversee effectiveness of internal control, risk-management and financial reporting systems, including adequacy of resources and staff competence. • Evaluate major connected-transaction audits and ensure mechanisms for employees to report potential improprieties. • Act as the Board’s primary liaison with external auditors and report to the Board on all committee matters.

Procedural highlights: • Meetings – At least one meeting each quarter; extraordinary sessions may be convened by the chair or two members. A two-thirds quorum is required, and resolutions pass by majority vote. Members with conflicts must abstain. • Reporting – Written minutes and resolutions are submitted to the Board, with independent directors’ opinions explicitly recorded. • Disclosure – The Terms of Reference will be available on the websites of the Hong Kong Stock Exchange and the Company. If the Company fails to meet Audit Committee requirements, it must notify the exchange and rectify within three months.

The Terms of Reference take effect upon the overseas listing of FourSemi’s H shares on the Stock Exchange of Hong Kong, reinforcing the Group’s commitment to robust corporate governance and compliance with Hong Kong Listing Rules.