Guanglian Aviation Industry Co.Ltd(300900)
Rules of procedure of the audit committee of the board of directors
Chapter I General Provisions
Article 1 in order to standardize the procedures of the audit committee of the board of directors of the company and fully protect the legitimate rights and interests of the company and its shareholders, in accordance with the company law of the people’s Republic of China (hereinafter referred to as the company law), the standards for the governance of listed companies (revised in 2018) (announcement [2018] No. 29 of China Securities Regulatory Commission) and other relevant laws, regulations and rules These rules are formulated in accordance with the relevant provisions of normative documents and Guanglian Aviation Industry Co.Ltd(300900) articles of Association (hereinafter referred to as the articles of association) and in combination with the actual situation of the company.
Article 2 the audit committee is a special committee under the board of directors and is responsible to the board of directors.
Article 3 the external audit committee shall be responsible for the replacement of the external audit institution or the evaluation; Supervise and evaluate the internal audit work, and be responsible for the coordination of internal audit and external audit; Review the company’s financial information and its disclosure; Supervise and evaluate the company’s internal control system.
When a listed company hires or replaces an external audit institution, the board of directors can consider relevant proposals only after the audit committee forms deliberation opinions and puts forward suggestions to the board of directors.
Chapter II members of the audit committee
Article 4 the audit committee is composed of three directors of the company, of which the independent directors shall account for the majority, and one of the independent directors must be an accounting professional.
Article 5 the members of the first audit committee shall be nominated by the chairman, others by the nomination committee and elected by more than half of the board of directors. The committee shall have a convener, who shall be an independent director (must be an accounting professional) nominated by the chairman and elected by the board of directors, who shall be responsible for presiding over the work of the Committee.
Article 6 members of the audit committee must meet the following conditions:
(I) it is not prohibited from serving as a director, supervisor or senior manager of the company as stipulated in the company law or the articles of Association;
(II) in the last three years, there has been no public condemnation by the stock exchange or criticism in more than three circulars or public recognition as inappropriate candidates, and the time limit has not expired;
(III) there has been no administrative penalty imposed by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) in the past three years;
(IV) there is no situation where the CSRC has taken measures to prohibit the entry into the securities market that may not serve as directors, supervisors and senior executives of listed companies, and the term has not expired;
(V) the case has not been filed by the judicial organ of the people’s Republic of China for suspected violation of the law, or the investigation conclusion has not been made clear by the judicial organ of the people’s Republic of China;
(VI) there is no case of being publicized by the CSRC on the public inquiry platform of illegal and dishonest information in the securities and futures market or being included in the list of dishonest Executees by the people’s court;
(VII) have good moral conduct, professional knowledge or working background related to enterprise management, finance and law, and financial knowledge recognized by the board of directors of the company;
(VIII) meet other conditions specified in relevant laws, regulations or the articles of association.
Article 7 the members of the audit committee shall be diligent and responsible, effectively supervise and evaluate the internal and external audit work of the company, promote the company to establish effective internal control and provide true, accurate and complete financial reports. Members of the audit committee shall have professional knowledge and business experience in performing the duties of the audit committee.
Article 8 a person who does not meet the conditions for holding a post specified in Articles 6 and 7 of these Rules shall not be elected as a member of the audit committee.
If a member of the audit committee is unfit for the position specified in the preceding article during his term of office, the member shall resign on his own initiative or be replaced by the board of directors of the company.
Article 9 the former partner of the accounting firm currently responsible for auditing the company’s accounts shall not serve as a member of the company’s audit committee within one year from the following date (whichever is later):
The date on which he ceases to be a partner of the accounting firm; or
The date on which it no longer enjoys the financial interests of the accounting firm.
Article 10 the term of office of the members of the audit committee is the same as that of the directors. After the expiration of their term of office, members may 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. In order to make the composition of the audit committee meet the requirements of these rules, the board of directors shall timely supplement the number of members in accordance with these rules. Before the board of directors makes up the number of members in time in accordance with these rules, the original members still perform relevant functions and powers in accordance with the rules of procedure. Article 11 the provisions of the company law and the articles of association on the obligations of directors shall apply to the members of the nomination committee.
Chapter III responsibilities and authorities
Article 12 the main responsibilities and authorities of the audit committee are as follows:
(I) supervise and evaluate the internal audit work, and review the company’s annual internal audit work plan;
(II) supervise the company’s internal audit system and its implementation; Review the company’s financial information and its disclosure, and review the quarterly, interim and annual financial statements before submitting them to the board of directors;
(III) opinions on the appointment and removal of the person in charge of the company’s internal supervision;
(IV) review and monitor the independence and objectivity of external auditors and the effectiveness of audit procedures in accordance with applicable standards; The audit committee shall discuss the nature and scope of the audit and the relevant reporting responsibilities with the auditors before the audit;
(V) formulate and implement policies on non audit services provided by external auditors;
(VI) be responsible for advising the board of directors on the appointment, reappointment and removal of the external auditor, approving the remuneration and terms of employment of the external auditor, and dealing with any issues related to the resignation or dismissal of the auditor;
(VII) review and comment on the company’s financial reports, monitor the integrity of the company’s financial statements and the company’s annual reports and accounts, semi annual reports and quarterly reports (if to be published), and review the major opinions on financial reporting contained in the statements and reports. Members of the audit committee shall contact the board of directors, the president, other senior managers and qualified accountants of the company. The audit committee shall meet with the company’s external auditors at least once a year. The members of the audit committee shall take into account any material or unusual matters reflected or required to be reflected in such reports and accounts, and shall give due consideration to any matters raised by the company’s qualified accountant, inspector general or auditor;
(VIII) review the company’s financial reporting, financial control, internal control and risk management system;
(IX) review the company’s internal control system, supervise and evaluate the company’s internal control;
(x) discuss the internal control system with the management to ensure that the management has fulfilled its responsibilities and established an effective internal control system; Coordinate the communication between management, internal audit department and relevant departments and external audit institutions;
（11） Take the initiative or be appointed by the board of directors to study the important investigation results related to internal control and the response of the management;
（12） Supervise and evaluate the work of external audit institutions, and propose to hire or replace external audit institutions; Be responsible for the communication between internal audit and external audit to ensure the coordination of the work of internal and external auditors; It is also necessary to ensure that the internal audit function has sufficient resources to operate within the company and has an appropriate position; And review and monitor the effectiveness of the internal audit function;
（13） Review the company’s financial and accounting policies and practices;
（14） Check the audit statement letter submitted by the external auditor to the management, any major questions raised by the auditor to the management on the accounting records, financial accounts or monitoring system and the response made by the management;
（15） Ensure that the board of directors timely responds to the matters raised in the audit statement letter submitted by the external auditor to the management; and
（16） Other matters authorized by the board of directors and other matters involved in laws, regulations and relevant provisions of the exchange.
The audit committee shall report to the board of directors on the measures or improvements it deems necessary and put forward suggestions.
Article 13 the main responsibilities and authorities of the convener of the audit committee are as follows:
(I) convene and preside over the meeting of the Audit Committee;
(II) supervise and inspect the implementation of the resolutions of the audit committee meeting;
(III) sign important documents of the Audit Committee;
(IV) report to the board of directors regularly;
(V) other functions and powers authorized by the board of directors.
Article 14 the audit committee has the right to hire independent consultants, legal advisers and other intermediaries to provide professional opinions when necessary in the performance of its tasks, and the relevant expenses shall be borne by the company. The company must provide such financial and capital guarantees as the Audit Committee deems appropriate to pay the remuneration of the accounting firm for providing financial audit services and related services such as audit, review and verification, as well as the remuneration of various consultants hired by the audit committee.
Article 15 the audit committee of the board of directors shall review the company’s financial and accounting reports, put forward opinions on the authenticity, accuracy and integrity of the financial and accounting reports, focus on the major accounting and audit problems of the company’s financial and accounting reports, pay special attention to whether there are fraud, fraud and the possibility of major misstatement related to the financial and accounting reports, and supervise the rectification of the problems of the financial and accounting reports.
The audit committee shall propose to the board of directors to hire or replace the external audit institution and review the audit fees and employment contracts of the external audit institution, which shall not be unduly influenced by the company’s major shareholders, actual controllers or directors, supervisors and senior managers. The audit committee shall urge the external audit institutions to be honest, trustworthy, diligent and responsible, strictly abide by the business rules and industry self-discipline norms, strictly implement the internal control system, verify and verify the company’s financial and accounting reports, perform the obligation of special care, and prudently express professional opinions.
Article 16 Where the directors, supervisors and senior managers of the company find that there are false records, misleading statements or major omissions in the financial and accounting reports issued by the company and report them to the board of directors and the board of supervisors, or the recommendation institution and external audit institution point out the existence of false records, misleading statements or major omissions in the financial and accounting reports of the company to the board of directors and the board of supervisors, and the board of directors shall timely report them to the bourse, The board of directors shall timely report to the bourse and disclose it.
Where the company discloses relevant information in accordance with the provisions of the preceding paragraph, it shall disclose in the announcement the major problems existing in the financial and accounting report, the consequences that have been or may be caused, and the measures that have been taken or are to be taken.
The audit committee of the company shall urge the relevant responsible departments of the company to formulate rectification measures and rectification time, conduct follow-up review, supervise the implementation of rectification measures, and disclose the completion of rectification in a timely manner.
Article 17 the company shall disclose the annual performance of the audit committee in its annual report, mainly including the convening of the audit committee meeting and the specific performance of its duties.
The audit committee shall put forward deliberation opinions to the board of directors of the listed company on matters within its scope of responsibility. If the board of directors fails to adopt them, the company shall disclose the matter and fully explain the reasons.
Chapter IV Rules of procedure
Article 18 the meeting of the audit committee shall be notified to all members five days before the meeting is held; An interim meeting may be convened upon the proposal of more than half of the members or the convener, and all members shall be notified three days before the meeting. Article 19 the meeting of the audit committee shall be presided over by the convener. If the convener is unable to attend, he may entrust another independent director member to preside over the meeting.
Article 20 the meeting notice shall at least include the following contents:
(I) time and place of the meeting;
(II) duration of the meeting;
(III) topics to be discussed at the meeting;
(IV) meeting contact person and contact information;
(V) date of meeting notice.
Article 21 the meeting of the audit committee shall be held only when more than two-thirds of the members are present; Each member has one vote; Resolutions made at the meeting must be adopted by more than half of all members.
Article 22 members of the audit committee may attend the meeting in person or entrust other members to attend the meeting and exercise their voting rights on their behalf.
If other members are entrusted to attend the meeting and exercise voting rights on their behalf, a power of attorney shall be submitted to the chairman of the meeting, and the power of attorney shall be submitted to the chairman of the meeting no later than before the voting of the meeting.
Article 23 the power of attorney shall be signed by the principal and the principal, and shall at least include the following contents:
(I) name of the client;
(II) name of the principal;
(III) entrusted matters;
(IV) instructions on the exercise of voting rights on the topics of the meeting (for, against, abstention) and instructions on whether the entrusted person can vote according to his own will in the absence of specific instructions;
(V) the period of authorization;
(VI) signing date of power of attorney.
Article 24 If a member of the audit committee neither attends the meeting in person nor entrusts other members to attend the meeting on his behalf, he shall be deemed not to attend the relevant meeting. If a member fails to attend the meeting for two consecutive times, it shall be deemed that he is unable to properly perform his functions and powers, and the board of directors of the company may revoke his duties as a member.
Article 25 the voting method of the audit committee meeting is a show of hands or voting.
Article 26 the meeting of the audit committee may be held in the form of on-site meeting and communication meeting. Communication meetings include teleconference, video conference and written proposal meeting.
Article 27 when the audit committee meeting is held in the form of written proposal, the written proposal shall be sent to all members by fax, express mail or personal delivery. After the members vote on the proposal, the original shall be sent back to the company for filing. If the number of members who sign and agree meets the number specified in these rules, the proposal will become a resolution of the Committee.
Article 28 the audit committee may also invite other directors, supervisors, President and other senior managers of the company to attend the meeting as nonvoting delegates when necessary. If necessary, the audit committee can hire an intermediary to provide professional advice for its decision-making, and the expenses shall be paid by the company.
Article 29 the meeting of the audit committee shall be recorded, and the minutes of the meeting and the resolutions of the meeting shall be formed and submitted to the board of directors after the meeting (unless such submission is not allowed due to legal or regulatory restrictions). All members attending the meeting shall sign the minutes and resolutions of the meeting. If the members present at the meeting disagree with the resolution of the meeting, it shall be indicated in the meeting minutes or meeting minutes. Meeting minutes
