Working rules of the audit committee of the board of directors
(reviewed and revised at the 27th meeting of the 8th board of directors on December 14, 2021) Chapter I General Provisions
Article 1 in order to strengthen the decision-making function of the board of directors, achieve prior audit and professional audit, ensure the effective supervision of the board of directors over the management, and improve the corporate governance structure, the company has established the audit committee of the board of directors and formulated these Detailed Rules in accordance with the company law of the people’s Republic of China, the governance standards for listed companies, the Yunnan Copper Co.Ltd(000878) articles of association and other relevant provisions.
Article 2 the audit committee of the board of directors is a special working organization established by the board of directors in accordance with the resolutions of the general meeting of shareholders, which is mainly responsible for the communication, supervision and verification of the company’s internal and external audit.
Chapter II personnel composition
Article 3 the members of the audit committee shall be composed of five directors, of which independent directors shall account for more than half and act as the convener, and at least one independent director shall be an accounting professional.
Article 4 the members of the audit committee shall be nominated by the chairman of the board of directors, more than half of the independent directors or one-third of all the directors, and shall be elected by the board of directors. Article 5 the audit committee shall have a chairman (convener), who shall be an independent director member familiar with accounting business and be responsible for presiding over the work of the Committee; the chairman shall be elected from among the members and reported to the board of directors for approval.
Article 6 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. During the term of office, if a member no longer holds the position of director of the company, he will automatically lose the qualification of member, and the board of directors will make up the number of members according to Articles 3 to 5 above.
Article 7 the internal audit department and financial department of the company are the work support institutions of the audit committee.
Chapter III responsibilities and authorities
Article 8 main responsibilities and authorities 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 internal audit, 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） Be responsible for other matters authorized by laws and regulations, the articles of association and the board of directors.
Article 9 when guiding and supervising the work of the internal audit department, the audit committee shall perform the following main duties:
(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 internal audit department shall perform the following main duties:
(i) Inspect and evaluate the integrity, rationality and effectiveness of the internal control system of each internal institution and holding subsidiary of the listed company; （2） Report to the board of directors or the audit committee at least once a quarter, including but not limited to the implementation of the internal audit plan and the problems found in the internal audit.
Article 11 the audit committee shall be responsible to the board of directors, and the proposals of the committee shall be submitted to the board of directors for deliberation and decision. The audit committee shall cooperate with the board of supervisors in the audit activities.
Chapter IV decision making procedures
Article 12 the chairman of the audit committee shall be responsible for the preliminary preparations for the decision-making of the audit committee. The internal audit department, financial department and other departments of the company shall provide the Committee with the company’s materials:
(i) Construction planning and operation report of the company’s internal control system; （2） Reports on the employment or replacement of accounting firms and other relevant intermediaries and their remuneration;
（3） The company’s annual financial report and major changes in accounting policies;
（4） Internal audit and risk management organization construction of the company;
（5） Important internal audit and risk management system of the company;
（6） The company’s disclosure of financial information;
（7） Other related matters.
Article 13 the audit committee shall review relevant audit reports at its meeting and submit relevant written resolutions to the board of directors for discussion:
(i) Work evaluation of external audit institutions, employment and replacement of external audit institutions;
（2） Whether the company’s internal audit system has been effectively implemented and whether the company’s financial report is comprehensive and true;
（3） Whether the company’s major connected transactions comply with relevant laws and regulations; (4) the work evaluation of the company’s financial department and audit department, including their principals;
（5） Other related matters.
Chapter V rules of procedure
Article 14 the meeting of the audit committee is divided into regular meeting and interim meeting. The regular meeting shall be held at least four times a year and once a quarter. The interim meeting shall be proposed by the members of the audit committee.
The securities department shall be responsible for organizing and arranging the notice and liaison work of the committee meeting. All members shall be notified three days before the meeting. The meeting shall be presided over by the chairman. If the chairman is unable to attend, he may entrust another member to preside over the meeting. If the situation is urgent and it is necessary to convene an interim meeting as soon as possible, the meeting notice can be sent by telephone or other oral means at any time, but the convener shall make an explanation at the meeting, and the notice time limit of the interim meeting can be exempted with the unanimous consent of all members.
Article 15 the meeting of the audit committee shall be held 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.
Article 16 the voting method of the audit committee meeting is a show of hands or voting; It can be held by means of communication voting.
Article 17 the work support institution may attend the meeting of the audit committee as nonvoting delegates, and may invite the directors and other senior managers of the company to attend the meeting as nonvoting delegates when necessary.
Article 18 the chairman of the board of supervisors may attend or appoint representatives to attend the meetings of the Committee as nonvoting delegates according to the needs of supervision and inspection.
Article 19 if necessary, the audit committee may employ an intermediary institution to provide professional advice for its decision-making, and the expenses shall be paid by the company.
Article 20 the convening procedures, voting methods and plans adopted at the meeting of the audit committee must comply with the provisions of relevant laws, regulations, the articles of association and these rules.
Article 21 the meeting of the audit committee shall have minutes, which shall be signed by the members attending the meeting; The minutes of the meeting shall be kept by the Secretary of the board of directors of the company. The retention period of meeting minutes shall not be less than 10 years.
Article 22 the proposals and voting results adopted at the meeting of the audit committee shall be reported to the board of directors of the company in writing.
Article 23 all members present at the meeting shall have the obligation to keep confidential the matters discussed at the meeting and shall not disclose relevant information without authorization.
Chapter VI working procedures for the annual report of the audit committee
Article 24 during the preparation and disclosure of the company’s annual report, the members of the audit committee shall earnestly perform their duties in accordance with the requirements of relevant laws, administrative regulations, normative documents and the articles of association, work diligently and responsibly, and safeguard the overall interests of the company.
Article 25 after the end of each fiscal year, the audit committee shall negotiate with the accounting firm responsible for the audit of the company’s annual report to determine the schedule of the audit of the annual financial report.
Article 26 the audit committee shall urge the accounting firm to submit the audit report within the agreed time limit, and record the method, frequency and results of supervision in the form of written opinions, as well as the signature and confirmation of relevant responsible persons.
Article 27 the audit committee shall review the first draft of the annual financial statements submitted by the financial department of the company before the certified public accountant audited in the annual report (hereinafter referred to as the “annual audit certified public accountant”) enters the site, and the review opinions shall be recorded in writing.
Article 28 after the annual audit certified public accountants enter the site, the audit committee shall strengthen communication with the annual audit certified public accountants, review the company’s financial and accounting statements again after the annual audit certified public accountants issue preliminary audit opinions, and form written opinions.
Article 29 after the audit of the annual financial and accounting statements, the audit committee shall vote on the audited annual financial and accounting report, form a resolution and submit it to the board of directors for review; At the same time, submit to the board of directors the summary report of the accounting firm engaged in the company’s audit work this year and the resolution on renewing or changing the appointment of the accounting firm next year. The above documents formed by the audit committee shall be disclosed in the annual report.
Article 30 during the preparation and deliberation of the annual report, members of the audit committee shall have the obligation of confidentiality. Before the disclosure of the annual report, strictly prevent the disclosure of insider information, insider trading and other illegal acts.
Article 31 the financial principal of the company is responsible for coordinating the communication between the audit committee and the accounting firm, and actively creating necessary conditions for the audit committee to perform the above responsibilities.
Chapter VII supplementary provisions
Article 32 matters not covered in these Rules shall be implemented in accordance with relevant national laws and regulations and the articles of association.
Article 33 in case of any conflict between these rules and the laws and regulations promulgated by the state in the future or the articles of association modified through legal procedures, the provisions of relevant national laws, regulations and the articles of association shall be implemented, and the rules shall be revised immediately and submitted to the board of directors for deliberation and approval.
Article 34 these Rules shall come into force and be implemented as of the date of adoption of the resolution of the board of directors.
Article 35 the right to interpret these rules belongs to the board of directors of the company.
