Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company
Working rules of the audit committee of the board of directors
(adopted by the board of directors on June 22, 2018 and revised according to the resolutions of the board of directors on October 11, 2019 and March 25, 2022 respectively)
Chapter I General Provisions
Article 1 in order to strengthen the decision-making function of the board of directors of Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company (hereinafter referred to as “the company”), continuously improve the construction of the company’s internal control system, ensure the effective supervision and management of the board of directors, and continuously improve the corporate governance structure, according to the company law of the people’s Republic of China (hereinafter referred to as “the company law”) Relevant laws and regulations such as the Listing Rules of Shanghai Stock Exchange on the science and Innovation Board (hereinafter referred to as the “Listing Rules of science and Innovation Board”), the Securities Listing Rules of the stock exchange of Hong Kong Limited (hereinafter referred to as the “Hong Kong Listing Rules”), and the guidelines for the effective operation of the audit committee of the Hong Kong Institute of certified public accountants Normative documents and the currently applicable articles of association of Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company (hereinafter referred to as the “articles of association”), the company hereby establishes the audit committee of the board of directors and formulates the detailed rules for the work of the audit committee of the board of directors of Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company (hereinafter referred to as the “detailed rules”) in combination with the actual situation of the company. If the articles of association, the Listing Rules of the science and innovation board, the Hong Kong listing rules or any applicable laws, regulations and relevant provisions are inconsistent, inconsistent or in conflict with these rules, the strictest provisions shall be implemented in accordance with the principle of strictness.
Article 2 the audit committee of the board of directors is a special working organization established by the board of directors of the company, which is mainly responsible for the communication between the company and external audit, the supervision and verification of internal audit, the evaluation and improvement of the company’s internal control system, and the risk assessment of the company’s major investment projects in operation.
Chapter II personnel composition
Article 3 the audit committee shall be composed of three or more directors, and the members shall be an odd number. All members must be non-executive directors, and most members must be independent non-executive directors.
At least one independent non-executive director among the members has the appropriate professional qualifications specified in the Listing Rules of the science and innovation board and the Hong Kong listing rules, or has the appropriate accounting or relevant financial management expertise.
The partner of the current external audit institution of the company shall not serve as a member of the audit committee within two years from the date of his resignation or no longer enjoying the financial interests of the current external audit institution (whichever is later).
Article 4 the members of the audit committee shall be nominated by the chairman or the nomination committee of the board of directors and elected by more than half of all directors. After the proposal to elect members is passed, the new members will take office immediately after the meeting of the board of directors.
Article 5 the audit committee shall have a convener, i.e. a chairman of the committee, who shall be appointed by the board of directors to preside over the work of the Committee. When the chairman of the committee is unable or fails to perform his duties, more than half of the members shall jointly elect an independent non-executive director to perform his duties on his behalf.
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 this period, if a member no longer holds the position of director of the company, or a member who should have the status of independent non-executive director no longer has the independence specified in the articles of association, the Listing Rules of science and innovation board and the Listing Rules of Hong Kong, he will automatically lose the qualification of a member. A member of the audit committee may submit a written resignation report to the board of directors before the expiration of his term of office. The resignation report shall provide necessary explanations on the reasons for resignation and matters that need to be paid attention to by the board of directors of the company. After the members of the audit committee are disqualified or approved to resign, the board of directors shall make up the number of members in accordance with laws, regulations, normative documents and the provisions of Articles 3 to 5 above. Before the expiration of a member’s term of office, he shall not be removed from office without reason unless there are circumstances that prohibit him from holding office as stipulated in the company law, the articles of association, the Listing Rules of the science and innovation board and the Hong Kong listing rules.
Chapter III responsibilities and authorities
Article 7 the specific responsibilities of the Audit Committee include:
(I) conduct an annual audit on the performance of the external audit institution, submit a summary report of the external audit institution engaged in the company’s audit work this year to the board of directors, and put forward suggestions to the board of directors on the employment, renewal and dismissal of the external audit institution and its audit service fees, terms of appointment and other issues in the next year, as well as deal with any matters related to the resignation or dismissal of the external audit institution;
(II) as the representative between the company and the external audit institution, be responsible for the communication between the company’s internal audit department and the external audit institution, including reviewing and monitoring whether the independent auditor is independent and objective and whether the audit procedures are effective according to applicable standards; Before the audit procedure, discuss the audit nature, scope, method and reporting responsibility of the current year with the external audit institution, negotiate with the external audit institution to determine the audit schedule of the financial report of the current year, and urge the external audit institution to submit the audit report within the agreed time limit;
(III) formulate and implement policies on non audit services provided by external audit institutions according to work needs. If the audit committee considers that there are any matters requiring action or improvement, it shall report to the board of directors and put forward suggestions;
The external audit institution here includes any institution that is jointly controlled, managed or held with the external audit institution employed by the company, or any institution that a third party with reasonable knowledge of all relevant information will reasonably determine that the institution belongs to any part of the business of the external audit institution employed by the company in China or internationally. The audit committee shall report to the board of directors on the actions or improvements it deems necessary, and suggest what steps can be taken;
(IV) review the completeness, accuracy and impartiality of the quarterly (if any), semi annual and annual financial statements to be submitted to the board of directors, and review the major opinions on financial reporting contained in the above statements and reports. Before submitting relevant statements and reports to the board of directors, the following matters shall be specially reviewed: whether there are changes in the company’s accounting policies and estimates during the reporting period, matters involving important judgments, major adjustments required by the independent auditor after reviewing the accounts, assumptions or any reservations of the company’s going concern, whether the accounting conforms to the accounting standards and whether it complies with the company law on financial reporting The Listing Rules of the science and innovation board, the Hong Kong Listing Rules and other applicable laws and regulations;
For the above items that need to be reviewed, the members of the audit committee need to communicate with the board of directors, senior managers and internal and external auditors in a timely manner. The members of the audit committee must meet with the independent auditor at least twice a year. The members of the audit committee shall study the major or abnormal matters reflected or required to be reflected in the company’s reports and accounts, and shall give due consideration to the matters raised by the company’s subordinate accounting and financial departments, regulatory departments or auditors;
(V) discuss the issues raised by the independent auditor after reviewing the company’s semi annual accounts and auditing the company’s annual accounts;
(VI) check the company’s financial policy, internal audit system, internal control system and risk management system, put forward improvement opinions and suggestions, and:
1. Check the company’s financial and accounting policies, practices and any relevant changes;
2. Monitor the production process of regular financial report (quarterly report (if any), semi annual financial report and annual financial report), and review the regular financial report, financial performance announcement and other relevant information;
3. Discuss and evaluate the effectiveness of the internal control system with the management to ensure that the management has fulfilled its responsibilities and established an effective internal control system; The discussion should include whether the company’s resources and staff qualifications and experience in accounting and financial reporting functions are sufficient, as well as whether the training courses received by relevant staff and the budget for accounting and financial reporting functions are sufficient;
4. Take the initiative or be appointed by the board of directors to study the important investigation results of internal control matters and relevant measures taken by the management;
5. Ensure that the work of the company’s audit department and external audit institutions is coordinated; To ensure that the company’s internal audit department has adequate authority and resources to review and supervise the company’s internal operation;
6. Review the inspection statement or management proposal issued by the independent auditor, the major questions raised by the independent auditor on the accounting records, financial accounts or monitoring system and the response made by the management;
7. Ensure that the board of directors makes a timely response to the inspection statement or management proposal given to the management by the independent auditor;
8. Supervise the work of the company’s internal audit department, and put forward opinions and suggestions on the assessment and change of the person in charge of the company’s internal audit department;
9. Supervise the potential improper behaviors of the company’s employees in financial reporting, internal control or other aspects;
10. Report to the board of directors any relevant matters involved above and study other matters arranged by the board of directors.
(VII) the audit committee shall establish relevant procedures to ensure impartial and independent investigation and settlement of the following matters: 1 Receive and handle complaints about the company’s accounting, internal control or audit matters, and ensure their confidentiality;
2. Receive and handle complaints or anonymous reports from employees about possible improper behaviors in accounting, audit matters, internal control or other aspects, and ensure their confidentiality.
(VIII) propose the company’s environmental, social and governance strategies, and identify major environmental, social and governance risks and opportunities:
1. Identify major environmental, social and governance issues and determine the risks and opportunities brought to the company by major environmental, social and governance issues;
2. Propose and regularly review the company’s environmental, social and governance strategies for approval by the board of directors; and
3. Formulate objectives based on corresponding strategies, and regularly supervise and review the progress of objectives;
(IX) approve and review environmental, social and governance related policies:
1. Review policies related to environment, society and governance;
2. Review and supervise policies related to major environmental, social and governance matters and ensure that they are applicable to the company; and
(x) review the company’s annual environmental, social and governance public report, including but not limited to the environmental, social and governance annual report and / or corporate social responsibility report, and ensure that the relevant reports fully disclose the company’s environmental, social and governance risks, the measures taken and the progress achieved, as well as that the reports meet the relevant disclosure requirements and comply with the relevant listing rules and other applicable laws and regulations, It also recommends that the board of directors adopt the environmental, social and governance report.
（11） Complete other tasks assigned by the board of directors.
（12） Perform other duties assigned by the regulatory authority of the place where the company is listed.
The company’s senior managers and relevant departments shall take a cooperative and supportive attitude towards the audit committee and actively provide relevant materials. The financial department shall regularly and truthfully provide the audit committee with financial and accounting materials such as financial reports and capital operation reports, and timely report on major business activities. The environmental, social and governance working group set up within the company shall provide the audit committee with relevant materials on environmental, social and governance. The above departments / working groups shall actively cooperate with the work of the audit committee and carefully listen to the suggestions and requirements put forward by the audit committee. Article 8 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 on a regular basis. The audit committee shall cooperate with the supervisory audit activities of the board of supervisors.
Article 9 the main terms of reference of the chairman of the audit committee are:
(I) convene and preside over the meeting of the Audit Committee;
(II) preside over the daily work of the Audit Committee;
(III) examine, approve and sign the report of the audit committee and other important documents;
(IV) check the implementation of the resolutions and recommendations of the Audit Committee;
(V) report to the board of directors on behalf of the Audit Committee;
(VI) other duties that the chairman of the audit committee shall perform.
Chapter IV working procedures
Article 10 the audit department in charge of the company’s internal audit is directly led by the audit committee, which is the daily office of the Audit Committee on audit related work. The environmental, social and governance working group responsible for the internal environmental, social and governance matters of the company is directly led by the audit committee. It is the daily working body of the Audit Committee on environmental, social and governance related work.
Article 11 the audit department and the environmental, social and governance working group shall be responsible for the preliminary preparations for the decision-making of the audit committee and provide the written materials of relevant parties of the company:
(I) relevant financial reports of the company;
(II) work reports of internal and external audit institutions;
(III) external audit contract and related work report;
(IV) the company’s related / connected transaction agreement, the audit report of major related / connected transactions and the investigation feedback of related / connected persons;
(V) financial and legal information related to major investment projects;
(VI) relevant work reports on the company’s internal control system and its implementation;
(VII) environmental, social and governance annual report and / or corporate social responsibility report;
(VIII) other relevant data.
The audit committee shall perform its main duties under Article 7 of these rules based on the information provided by its daily office. Article 12 working methods of the Audit Committee:
(I) during the audit committee meeting, discuss the internal audit and environmental, social and governance work plan, listen to the work report of the company’s financial, environmental, social and governance working group, comment on the reports provided by the audit department and the environmental, social and governance working group, and review the company’s quarterly (if any), semi annual, annual financial reports, environmental, social and governance annual reports and / or corporate social responsibility reports. The audit committee can make decisions on the basis of listening to the opinions of experts from professional institutions, and report the matters to be submitted to the board of directors for decision-making to the board of directors for discussion, mainly including:
1. 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 financial reports and other information disclosed by the company are objective and true, and whether the company’s major connected / connected transactions comply with the provisions of relevant laws and regulations and disclosure requirements;
4. Work evaluation of the company’s financial department and its principals;
5. Environmental, social and governance matters to be discussed by the board of directors in accordance with relevant listing rules and other applicable laws and regulations;
6. Other relevant matters;
(II) during the preparation and disclosure of the company’s annual financial report, the audit committee shall follow the following working rules and procedures:
1. Timely communicate with the independent auditor responsible for the audit of the company’s financial report of the year (hereinafter referred to as “the year”) after the end of the financial year
