Delton Technology (Guangzhou) Inc. (“DELTON”, stock code 01989) has published a draft of the “Terms of Reference of the Audit Committee of the Board of Directors”, which will take effect upon the company’s H-share listing on the Hong Kong Stock Exchange.

Key features of the proposed framework are as follows:

1. Committee Structure • The Audit Committee must comprise at least three non-executive directors; more than half must be independent, and at least one member must possess the accounting expertise required by listing regulations. • A chairperson—also an independent director with accounting qualifications—will lead the committee. • Members will serve coterminous with the Board’s term and are eligible for re-election.

2. Core Responsibilities • Review and monitor the integrity of the company’s financial statements, annual, interim and quarterly reports, focusing on changes in accounting policies, significant judgements, major adjustments, and compliance with relevant standards. • Recommend the appointment, reappointment or removal of external auditors, oversee their independence, and set audit fees and engagement terms. • Guide and oversee internal audit functions, including annual audit plans, report assessments, and follow-up on rectification of major issues. • Evaluate the effectiveness of the company’s financial reporting, internal control and risk-management systems, and review the external auditor’s internal-control opinion. • Ensure appropriate whistle-blowing arrangements and coordinate communication among management, internal audit and external auditors. • Exercise supervisory board powers under PRC Company Law, including proposing shareholder meetings, demanding rectifications from directors and senior management, and recommending dismissals for legal or regulatory violations.

3. Meeting and Voting Procedures • The committee will convene at least quarterly, with additional meetings as needed. A quorum requires two-thirds of members, and resolutions pass by simple majority. • Minutes will be distributed within seven days and retained for at least ten years. • The committee may engage external advisers at the company’s expense.

4. Reporting and Disclosure • Financial information in periodic reports and internal control evaluation reports must be approved by a majority of committee members before submission to the Board. • Annual disclosures will summarize the committee’s activities and meeting frequency. • If the Board declines any committee recommendation, the company must disclose the details and rationale in accordance with listing-rule requirements.

5. Implementation Timeline The draft terms become operative on the date DELTON’s H-shares commence trading in Hong Kong. Upon implementation, the company’s previous audit-committee terms will be rendered invalid.

The Board retains authority to interpret and amend the document, ensuring alignment with evolving laws, regulations and listing rules.