Phancy Group Co., Ltd. released an updated Terms of Reference for its Audit Committee, formalising a wide-ranging mandate designed to tighten financial oversight, risk management, and internal control across the Group.

Key Objectives • The charter aligns the committee’s operations with the Company Law, Securities Law, Hong Kong Listing Rules and the firm’s Articles of Association. • Primary responsibilities include verifying the truthfulness of financial reports, assessing financial controls, monitoring risk-management effectiveness, overseeing both internal and external audit work, and supervising related-party transactions.

Committee Structure • Minimum three non-executive directors, with a majority required to be independent. • At least one independent director must hold recognised professional accounting or financial credentials; the chair must also be an independent professional accountant. • Former partners of the external auditor are barred from committee membership for two years after leaving the audit firm or relinquishing any financial interest in it.

Operational Framework • Regular meetings are mandated at least quarterly, with notice given no less than three days in advance. • A quorum requires two members, including at least one independent director. • Senior management, finance heads, internal auditors and external auditors may be invited to attend specific sessions as needed.

Scope of Oversight • Financial Reporting: The committee will review annual, interim and, where applicable, quarterly results, scrutinising accounting policies, major judgments, and compliance with disclosure standards. • Risk Management & Internal Control: An annual evaluation of the Group’s end-to-end control environment will focus on changes in significant risks, adequacy of monitoring systems and any material control failings. • Internal Audit: The committee approves audit plans, budgets and staffing, ensuring the function’s independence and sufficient resources. • External Audit: Duties include recommending auditor appointments, negotiating remuneration, setting audit scope, reviewing management letters and overseeing non-audit service engagements. • Related-Party Transactions: All significant connected dealings require the committee’s preliminary review and, when necessary, Board or shareholder approval.

Authority & Reporting • The committee may obtain independent professional advice at the company’s expense, demand information from management, and conduct investigations into major control issues. • It reports regularly to the Board and presents a comprehensive annual assessment of risk management, internal control efficacy and related-party transactions.

The new charter takes immediate effect following Board approval and will guide Phancy’s Audit Committee in reinforcing transparency, accountability and regulatory compliance across the organisation.