Chongqing Machinery & Electric Co., Ltd.* (Stock Code: 02722) released a detailed document outlining the Terms of Reference for its Audit Committee. According to the announcement, the Audit Committee is established under the Board and must comprise three or more non-executive Directors, with the majority being independent non-executive Directors. At least one member is required to possess accounting or financial expertise, in line with listing requirements. The document also stipulates that a former partner of the Company’s independent auditor cannot serve on the Committee within one year after leaving that auditor.

The Terms of Reference define core functions centered on overseeing the external auditor relationship, reviewing financial statements, and monitoring internal control and risk management systems. Specific responsibilities include verifying the integrity of annual and interim reports, ensuring the Company’s accounting policies comply with applicable principles, and providing recommendations on the appointment or removal of the auditor. The Terms further outline the Committee’s role in supervising the Company’s financial reporting procedures and internal audit effectiveness, as well as establishing mechanisms for handling tip-offs and other relevant confidential matters.

The new framework assigns duties normally associated with a supervisory committee—such as examining financial conditions, supervising Directors and senior management for compliance, and reporting to shareholders’ meetings—directly to the Audit Committee. Additional details address meeting procedures, voting requirements, and members’ obligations, emphasizing impartial oversight of financial disclosures and internal control protocols. The document specifies that any changes to these provisions must be approved by the Board and published according to regulatory requirements.