Reconova Technologies Co., Ltd. (RECONOVA) has released a comprehensive Terms of Reference for its Board-level Audit Committee, aligning governance practices with the PRC Company Law and Hong Kong Listing Rules.

Key features of the updated charter include:

1. Committee Composition • Three non-executive directors will form the Audit Committee, with independent non-executive directors (INEDs) constituting a majority. • At least one INED must possess professional qualifications or relevant accounting or financial management expertise in line with Hong Kong Listing Rule 3.10(2). • The committee is chaired by an INED elected internally and approved by the Board. • Membership terms mirror directors’ tenure; vacancies must be filled within three months.

2. Core Responsibilities • External Audit: Recommend appointment, re-appointment or removal of external auditors; determine remuneration and scope; safeguard auditor independence; formulate policies on non-audit services. • Financial Reporting: Review annual, interim and (if issued) quarterly financial statements, with focus on accounting policy changes, major judgments, adjustments, going-concern assumptions and compliance with HKEX rules. • Risk Management & Internal Control: Evaluate design and effectiveness of financial controls and risk management systems, ensure adequate resources for finance and internal audit functions, and oversee remediation of control deficiencies. • Whistle-blower Mechanism: Ensure confidential channels for employees to report financial or control irregularities and oversee fair, independent investigations. • Reporting: Submit findings and recommendations to the Board and ensure timely responses to auditors’ management letters.

3. Working Procedures for Annual Reports • Finance department prepares key materials (financial reports, audit work reports, related-party transaction details) for committee review. • The committee must meet auditors at least twice annually, coordinate audit timelines, and issue written opinions on draft financial statements before Board review. • Any mid-audit change of external auditor requires committee assessment, Board resolution and shareholder approval, with full disclosure of reasons and the outgoing auditor’s views.

4. Meeting Framework • Regular meetings at least quarterly; extraordinary sessions may be convened with three days’ notice. • Quorum set at two-thirds of members; resolutions pass by simple majority. • Members must attend in person or by proxy (INEDs may only proxy to another INED). • Detailed minutes are retained for a minimum of ten years.

5. Authority and Resources • The committee may engage independent consultants, legal advisers or other experts, with costs borne by the Company. • All attendees are bound by confidentiality obligations regarding meeting deliberations.

6. Shareholder Engagement • The committee chair will attend the Company’s annual shareholders’ meeting to address queries on audit-related matters; another committee member will deputise if the chair is unavailable.

These Terms of Reference become effective upon approval at the shareholders’ meeting and the listing of RECONOVA’s H shares on The Stock Exchange of Hong Kong Limited.