Cosco Shipping Specialized Carriers Co.Ltd(600428)
Working rules of the audit committee of the board of directors
general provisions
Article 1 in order to facilitate the audit committee of Cosco Shipping Specialized Carriers Co.Ltd(600428) (hereinafter referred to as the “company”) to carry out its work in a standardized and efficient manner and further improve the level of corporate governance, in accordance with the company law, the securities law, the governance standards for listed companies, the basic norms of enterprise internal control, the stock listing rules of Shanghai Stock Exchange and These working rules are formulated in accordance with the provisions of the guidelines for the operation of the audit committee of the board of directors of listed companies of Shanghai Stock Exchange and other relevant normative documents.
Article 2 the audit committee of the board of directors is a special committee under the board of directors and is responsible to the board of directors. Article 3 the members of the audit committee must ensure sufficient time and energy to perform the duties of the committee, be diligent and responsible, effectively supervise the company’s external audit, guide the company’s internal audit, rule of law risk control and compliance management, promote the company to establish an effective internal control and risk management mechanism, and provide true, accurate and complete financial reports.
Chapter II personnel composition
Article 4 the members of the audit committee are composed of five directors, three of whom are held by independent directors. All members of the audit committee must have professional knowledge and business experience competent for the duties of the audit committee.
Article 5 the audit committee shall have a director who shall also act as the convener and be responsible for presiding over the work of the Committee. The chairman of the audit committee shall be nominated by the members of the audit committee from among the independent directors, elected and removed by more than half of the members. The chairman of the audit committee must have professional experience in accounting or financial management.
Article 6 the members of the audit committee shall be composed of the directors of the same session of the board of directors and elected by the meeting of the board of directors. They can be re elected and reappointed for a term consistent with the term of office of the same session of the board of directors. If any member ceases to hold the post of director during the period, he will automatically lose the qualification of member and be elected in accordance with the provisions of these rules.
Article 7 the company shall provide necessary working conditions for the audit committee. When the audit committee performs its duties, the company’s senior managers and relevant departments shall cooperate.
Article 8 the audit committee shall set up a working group as its daily office, and the members of the working group need not be members of the audit committee.
Article 9 the company regularly organizes the members of the audit committee to participate in relevant training to enable them to timely obtain the professional knowledge of law, accounting and company regulatory norms required for performing their duties.
Article 10 the board of directors of the company shall regularly evaluate the independence and performance of the members of the audit committee, and may replace the members who are not suitable to continue to serve when necessary.
Chapter III responsibilities and authorities
Article 11 the responsibilities of the Audit Committee include the following aspects:
(i) Supervise and evaluate the work of external audit institutions;
（2） Supervise and evaluate the internal audit work of the audit department;
（3） Review and comment on the company’s financial reports;
（4） Supervise and evaluate the company’s internal control system;
（5） Coordinate the communication between senior management, finance department, supervision and audit department, strategy and enterprise management department / Securities Affairs Department, legal and risk management department and external audit institutions;
（6） Promote the company’s legal risk control and compliance management;
（7） Regularly evaluate the company’s legal risk control and compliance management, and put forward opinions on improving the company’s legal risk control and compliance management;
（8） Be responsible for other matters authorized by laws and regulations, the articles of association and the board of directors.
Article 12 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.
The audit committee shall hold a separate communication meeting with the external audit organization without the participation of senior management at least once a year. The Secretary of the board of directors may attend the meeting as nonvoting delegates.
Article 13 the responsibilities of the audit committee to supervise and evaluate internal audit shall at least include the following aspects:
(i) Supervise and evaluate the work of internal audit institutions;
（2） Review the company’s annual internal audit plan;
（3） Supervise and urge the implementation of the company’s internal audit plan;
（4） Review the internal audit report, evaluate the results of internal audit, and urge the rectification of major problems;
（5） Guide and supervise the effective operation of the internal audit of the audit department.
The company’s supervision and audit department shall report to the audit committee. Various audit reports, rectification plans and rectification conditions of audit problems submitted by the supervision and audit department to senior managers shall be submitted to the audit committee at the same time. Article 14 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 15 the responsibilities of the audit committee to evaluate the effectiveness of internal control, rule of law risk control and compliance management must at least include the following aspects:
(i) Evaluate the appropriateness of the company’s internal control, rule of law risk control and compliance management system design;
（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;
（5） Evaluate the ability and level of the company’s legal risk control and compliance management, and put forward suggestions to improve the company’s legal risk control and compliance management;
（6） Guide and supervise the company to formulate and implement legal risk control and compliance management strategies and major risk control solutions;
（7） Guide the effective operation of the company’s legal risk control and compliance management functional departments.
Article 16 the audit committee coordinates the communication between senior management, finance department, supervision and audit department, strategy and enterprise management department / Securities Affairs Department, legal affairs and risk management department and external audit institutions. Its responsibilities include:
(i) Coordinate senior management’s communication with external audit institutions on major audit issues;
（2） Coordinate the communication between relevant departments and external audit institutions and the cooperation with external audit. Article 17 the audit committee shall report to the board of directors on the measures or improvements it deems necessary and put forward suggestions.
Article 18 when the company hires or replaces an external audit institution, the audit committee shall form a review opinion and make recommendations to the board of directors before the board of directors can review relevant proposals and submit them to the general meeting of shareholders for review and approval. Chapter IV Procedure
Article 19 the meetings of the audit committee are divided into regular meetings and interim meetings, which shall be convened and presided over by the chairman of the audit committee. If the chairman of the audit committee is unable or refuses to perform his duties, he shall appoint an independent director to perform his duties on his behalf.
Article 20 the audit committee shall hold at least four regular meetings every year. The audit committee may hold interim meetings as required. When two or more members of the audit committee propose, or when the chairman of the Audit Committee deems it necessary, an interim meeting may be convened. The notice of the meeting shall be given at least five working days before the date of the meeting. Article 21 members of the audit committee shall attend the meeting in person and express clear opinions on the matters under consideration. Voting shall be carried out by one person, one vote, by name and in writing. If a member is unable to attend the meeting in person for some reason, he may submit a power of attorney signed by the member and entrust other members to attend and express their opinions on his behalf. The power of attorney must specify the scope and duration of authorization.
Article 22 the audit meeting can be held only when two-thirds of the members are present, and each member has one vote.
Article 23 the deliberation opinions put forward by the audit committee to the board of directors must be adopted by more than half of all members. If effective deliberation opinions cannot be formed due to the avoidance of members of the audit committee, relevant matters shall be directly deliberated by the board of directors.
Article 24 members of the audit committee shall personally attend the on-site meeting and express clear opinions on the matters under consideration. If a member is unable to attend the meeting in person for some reason, he may submit a power of attorney signed by the member and entrust other members to attend and express their opinions on his behalf. The power of attorney must specify the scope and time limit of authorization. If an independent director is unable to attend the meeting in person for some reason, he shall entrust other independent director members to attend the meeting on his behalf.
Article 25 the audit committee shall prepare minutes and resolutions of the meeting. Members attending the meeting shall sign the minutes and resolutions of the meeting.
Article 26 Any member of the audit committee who has an interest in the matters discussed at the meeting shall withdraw.
Article 27 the deliberation opinions adopted at the meeting of the audit committee shall be submitted to the board of directors of the company in writing.
Article 28 when the Audit Committee deems it necessary, it may invite representatives of external audit institutions, company supervisors, internal auditors of the supervision and audit department, personnel of the finance department, personnel of the strategy and enterprise management department / Securities Affairs Department, personnel of the legal and risk management department, legal advisers and other relevant personnel to attend the committee meeting and provide necessary information.
Article 29 If the Audit Committee deems it necessary, it may hire an intermediary institution to provide professional opinions, and the relevant expenses shall be borne by the company.
Article 30 the convening procedures, voting methods and proposals adopted at the meeting of the audit committee shall comply with the provisions of relevant laws, regulations, the articles of association and these detailed rules.
Article 31 members and non voting participants of the meeting shall be responsible for the confidentiality of the matters of the meeting and shall not disclose relevant information without authorization.
Chapter V Information Disclosure
Article 32 the company shall timely disclose the personnel of the audit committee, including the composition, professional background, working experience within five years and the changes of the personnel of the audit committee.
Article 33 while disclosing the annual report, the company shall disclose the annual performance of the audit committee, mainly including its performance of duties and the convening of the audit committee meeting.
Article 34 If the major problems found by the audit committee in the performance of its duties touch the information disclosure standards specified in the stock listing rules of Shanghai Stock Exchange, the company shall disclose such matters and their rectification in a timely manner. Article 35 the audit committee shall put forward deliberation opinions to the board of directors of the company on matters within its scope of responsibility. If the board of directors fails to adopt them, the company must disclose the matter and fully explain the reasons.
Article 36 the company shall disclose the special opinions issued by the Audit Committee on major matters of the company in accordance with laws, administrative regulations, departmental rules, stock listing rules and relevant normative documents. Chapter VI supplementary provisions
Article 37 the relevant documents, plans, schemes, proposals, resolutions and minutes (records) of the audit committee shall be properly kept by the personnel or institutions in charge of daily work for a period of five years.
Article 38 matters not covered in these Rules shall be implemented in accordance with relevant national laws, regulations and the articles of Association; 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 by legal procedures, the provisions of relevant national laws, regulations and the articles of association shall be implemented and reported to the board of directors for approval.
Article 39 these Rules shall come into force after the resolution of the board of directors of the company is adopted.
Cosco Shipping Specialized Carriers Co.Ltd(600428) board of directors
December, 2021
