Guangxi Liugong Machinery Co.Ltd(000528) working rules of the audit committee of the board of directors
(revised in December 2021)
catalogue
Chapter I General Provisions Chapter II composition of the Audit Committee Chapter III functions, powers and obligations of the Audit Committee Chapter IV Rules of procedure of the Audit Committee 5 chapter V Supplementary Provisions seven
Chapter I General Provisions
Article 1 in order to strengthen the decision-making and supervision functions of the board of directors and improve the corporate governance structure, the company shall, in accordance with the company law of the people's Republic of China, the standards for the governance of listed companies, the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange, the Listing Rules of Shenzhen Stock Exchange, the Guangxi Liugong Machinery Co.Ltd(000528) articles of association and other relevant provisions, The audit committee of the board of directors (hereinafter referred to as the "Audit Committee") shall be established and these working rules shall be formulated.
Article 2 the audit committee is a special working organization established by the board of directors in accordance with the resolutions of the general meeting of shareholders. It is responsible for and reports to the board of directors. Under the leadership of the board of directors, it is responsible for reviewing the operation and financial status of the company and the financial information disclosed to the public, reviewing the implementation of the internal control system and the communication, supervision and verification of internal and external audits.
Chapter II composition of the audit committee
Article 3 the audit committee shall be composed of five directors, of which the independent directors shall account for the majority, and at least one independent director shall be an accounting professional.
Members of the audit committee may be nominated by the chairman of the board of directors, more than half of the independent directors or more than one-third of the directors and elected by the board of directors.
The audit committee shall have a chairman (convener) of the audit committee, who shall be an independent director member of the accounting profession, who shall be responsible for presiding over the work of the audit committee, and shall be elected by the board of directors.
Article 4 members of the audit committee shall meet the following requirements:
(i) Be familiar with relevant national laws and regulations, have professional knowledge in finance, accounting and audit, and be familiar with the management of the company;
（2） Abide by the principle of integrity, be honest and self disciplined, be loyal to their duties, safeguard the rights and interests of the company and shareholders, and work actively;
（3） Have strong comprehensive analysis and judgment ability, be able to deal with financial and business problems, and have the ability to work independently.
Article 5 The term of office of the audit committee is the same as that of the board of directors. Upon expiration of the term of office, the members can be re elected. If any member ceases to hold the position of director of the company during the period, he will automatically lose the qualification of member, and the board of directors will make up the number of members in accordance with Articles 3 and 4 of these rules.
Article 6 the audit committee shall set up the Audit Department of the board of directors as the daily working organization, carry out work under the guidance and supervision of the audit committee, and be responsible for daily work liaison, meeting plan and organization, issuance and implementation of meeting resolutions, etc.. The Secretariat of the board of directors shall regularly understand the work of the audit committee and the Audit Department of the board of directors.
Chapter III functions, powers and obligations of the audit committee
Article 7 main responsibilities of the Audit Committee:
(i) Supervise and evaluate the external audit work, and propose to hire or replace the external audit institution; （2） Supervise and evaluate the internal audit work, and be responsible for the coordination of internal audit and external audit; (3) review the company's financial information and its disclosure;
（4） Supervise and evaluate the company's internal control;
（5） Coordinate the communication between the management, internal audit department and relevant departments and external audit institutions; (VI) review and implementation supervision of the draft annual financial budget;
（7） Review the important internal audit system of the company, guide and supervise the establishment and implementation of the internal audit system of the company;
（8） Review the medium and long-term plan and annual audit plan of internal audit and listen to the audit work report; (IX) investigate the head of the Audit Department of the board of directors and put forward opinions on appointment or dismissal to the board of directors; (x) be responsible for other matters authorized by laws and regulations, the articles of association and the board of directors.
Article 8 the responsibilities of the audit committee to supervise and evaluate the work of external audit institutions shall at least include the following aspects:
(i) Assess the independence and professionalism of external audit institutions, especially the impact of non audit services provided by external audit institutions on their independence;
（2） Put forward suggestions to the board of directors on hiring or replacing external audit institutions;
（3） Review the audit fees and employment terms of external audit institutions;
（4） Discuss and communicate with external audit institutions on audit scope, audit plan, audit methods and major matters found in the audit;
（5） Monitor and evaluate the diligence of external audit institutions.
Article 9 the audit committee shall supervise and evaluate the internal audit work. The internal audit department is responsible to the audit committee and reports to the audit committee.
The responsibilities of the audit committee to guide and supervise the internal audit must include at least the following aspects:
(i) Guide and supervise the establishment and implementation of internal audit system;
（2） Hold a meeting at least once a quarter to review the work plan and report submitted by the internal audit department;
（3） Report to the board of directors at least once a quarter, including the progress, quality and major problems found in the internal audit;
（4） Coordinate the relationship between the internal audit department and external audit units such as accounting firms and national audit institutions.
Article 10 the duties of the audit committee to review the company's financial reports and express opinions on them shall at least include the following aspects:
(i) Review the company's financial report and put forward opinions on the authenticity, completeness and accuracy of the financial report;
（2） Focus on major accounting and audit issues of the company's financial reports, including major accounting error adjustment, major accounting policy and estimation changes, matters involving important accounting judgments, matters leading to non-standard unqualified audit reports, etc;
（3） Pay special attention to the possibility of fraud, fraud and material misstatement related to financial reporting;
（4） Supervise the rectification of financial reporting problems.
Article 11 the responsibility of the audit committee to evaluate the effectiveness of internal control shall at least include the following aspects: (I) evaluate the appropriateness of the design of the company's internal control system;
（2） Review the internal control self-evaluation report;
（3） Review the internal control audit report issued by the external audit institution, and communicate with the external audit institution on the problems found and improvement methods;
（4） Evaluate the results of internal control evaluation and audit, and urge the rectification of internal control defects.
Article 12 the responsibilities of the audit committee to coordinate the communication between the management, internal audit department and relevant departments and external audit institutions include:
(i) Coordinate management's communication with external audit institutions on major audit issues;
（2） Coordinate the communication between internal audit department and external audit institutions and the cooperation with external audit.
Article 13 the director of the audit committee shall perform the following duties according to law:
(i) Convene and preside over the meeting of the Audit Committee;
（2） Examine, approve and sign the proposal of the Audit Committee;
（3） Check the implementation of the resolutions and recommendations of the board of auditors;
（4） Report to the board of directors on behalf of the Audit Committee;
（5） Other duties that should be performed by the director of the audit committee.
When the chairman of the audit committee is unable to perform his duties for some reason, he shall appoint an independent director to exercise his functions and powers on his behalf.
Article 14 the audit committee shall be responsible to the board of directors, and the proposals of the audit committee shall be submitted by the director of the audit committee to the board of directors for deliberation and decision. The audit committee shall cooperate with the board of supervisors in their audit activities.
Article 15 the audit committee shall supervise the internal audit department to conduct at least half a year on the following matters
One inspection, issue the inspection report and submit it to the audit committee. If it is found that the company has violations of laws and regulations and non-standard operation, it shall timely report to Shenzhen Stock Exchange: (I) the implementation of major events such as the use of raised funds, provision of guarantees, related party transactions, securities investment and derivatives trading, provision of financial assistance, purchase or sale of assets, foreign investment and so on;
（2） The company's large capital transactions and capital transactions with directors, supervisors, senior managers, controlling shareholders, actual controllers and their affiliates.
The audit committee shall issue a written evaluation opinion on the effectiveness of the company's internal control according to the internal audit report and relevant materials submitted by the internal audit department, and report to the board of directors.
Article 16 in the course of performing its duties, the audit committee shall enjoy the following powers:
(i) Access to relevant information and assets;
（2） Require the internal audit department and the management to investigate the problems and make a written report; (3) the authority to stop and correct;
（4） The company's senior managers who seriously violate relevant laws and regulations and the company's internal regulations shall put forward handling suggestions to the board of directors.
Article 17 in order to ensure the normal work, the audit committee has the right to obtain the necessary work materials and information:
(i) Annual financial budget, monthly, quarterly, semi annual and annual financial statements, discussion draft of each periodic report;
（2） Internal audit and external (independent) audit reports of the company and its subsidiaries;
（3） Understand the matters discussed between auditors and management and the analysis of major unadjusted audit differences;
（4） The management, financial department, internal audit department, independent auditor, Secretary of the board of directors, lawyer or other relevant departments shall be responsible for the legality, authenticity and accuracy of the materials or information provided to the audit committee.
Article 18 members of the audit committee shall perform the following obligations:
(i) Faithfully perform their duties and safeguard the interests of the company and shareholders in accordance with laws, administrative regulations and the articles of Association;
（2） The company's secrets shall not be disclosed except in accordance with the law or with the consent of the board of directors;
（3） Be responsible for the authenticity and legality of the contents of the reports or documents submitted to the board of directors. Chapter IV Rules of procedure of the audit committee
Article 19 the audit committee meeting is divided into regular meeting and interim meeting. The regular meeting shall be held at least four times a year. The regular meeting shall be held respectively before the board of Directors considers the first quarter, semi annual, third quarter and annual financial reports. The interim meeting may be proposed by the chairman of the board, the chairman of the audit committee and the members of the audit committee according to the needs of the work.
The meeting notice and meeting materials shall be issued three days before the meeting.
The meeting shall be presided over by the chairman of the audit committee. If the chairman of the audit committee is unable to attend, he may entrust an independent director to preside over the meeting.
The meeting can be held in the form of on-site meeting, communication meeting, etc.
Article 20 a meeting of the audit committee shall be convened only when more than two-thirds of the members are present. Each member shall have one vote; Resolutions made at the meeting must be adopted by more than half of all members. However, those who must withdraw according to relevant laws and regulations or the articles of association shall withdraw when voting at the meeting. Article 21 the audit committee meeting shall make resolutions, and the on-site meeting shall vote by show of hands or voting; The communication meeting can vote by voting.
Article 22 members of the Audit Department of the board of directors may attend the meeting of the audit committee as nonvoting delegates, and may invite other directors, supervisors and senior managers of the company to attend the meeting as nonvoting delegates when necessary.
Article 23 if necessary, the audit committee may employ intermediaries and other professionals to provide professional opinions for its decision-making, and the expenses shall be paid by the company.
Article 24 members of the audit committee shall attend the meeting as scheduled and fully express their opinions and attitudes on the matters to be discussed or deliberated. If they are unable to attend the meeting for some reason, they may entrust other members in writing to exercise their functions and powers on their behalf. The power of attorney shall specify the name, agency matters, authority and validity period of the agent, and shall be signed or sealed by the principal and the agent. The audit committee shall request the board of directors to replace the members who do not attend the meeting for two consecutive times or entrust others to exercise their functions and powers on their behalf. The convening procedures, voting methods and proposals adopted at the audit committee meeting must comply with the provisions of relevant laws, regulations, the articles of association and these detailed rules.
Article 25 the audit committee meeting shall have clear minutes, including the time and place of the meeting, the host, participants, topics, discussion process and voting results (the voting results shall indicate the number of votes for, against or abstaining). The members and agents attending the meeting shall sign the minutes.
The minutes and resolutions of the audit committee shall be kept by the Audit Department of the board of directors as the company's archives for at least ten years.
Article 26 the proposals and voting results adopted at the audit committee meeting shall be reported to the board of directors of the company in writing.
Article 27 all personnel attending or attending the meeting as nonvoting delegates shall have the obligation to keep confidential the matters discussed at the meeting and shall not disclose relevant information without authorization.
Chapter V supplementary provisions
Article 28 the "above" mentioned in these rules includes this number.
Article 29 in case of any conflict between the relevant provisions of these rules and the newly promulgated relevant laws, administrative regulations, rules, normative documents and the articles of association modified by legal procedures, the provisions of the newly promulgated laws, administrative regulations, rules, normative documents and the articles of association modified by legal procedures shall prevail.
Article 30 these working rules are formulated by the board of directors and shall come into force and come into force from the date of deliberation and adoption by the board of directors. The same shall apply when amending.
Article 31 the detailed rules shall be interpreted by the board of directors.
Guangxi Liugong Machinery Co.Ltd(000528) December 13, 2021
