Implementation rules of the audit committee of the board of directors of Chongqing Chongqing Three Gorges Water Conservancy And Electric Power Co.Ltd(600116) electric power (Group) Co., Ltd
(revised in 2022)
(reviewed and approved by the 32nd meeting of the 9th board of directors of the company)
Chapter I General Provisions
Article 1 in order to strengthen the decision-making function of the board of directors, achieve pre audit, strengthen in-process and post audit and special audit, ensure the effective supervision of the board of directors on the operation and management of the company, and improve the corporate governance structure, according to the company law of the people’s Republic of China, the governance standards of listed companies, the guidelines for self discipline supervision of listed companies on Shanghai Stock Exchange No. 1 – standardized operation, the articles of association and the actual situation of the company, The company establishes an audit committee under the board of directors and formulates these rules of procedure.
Chapter II composition of the audit committee
Article 2 the audit committee is a special working organization established by the board of directors, which is mainly responsible for the communication, supervision and verification of the company’s internal and external audit, and is responsible to the board of directors. The audit committee shall cooperate with the board of supervisors in the audit activities.
Article 3 the audit committee consists of three members, two independent directors, and one of the members is a professional accountant. Members of the audit committee shall have professional knowledge and experience in performing the duties of the audit committee.
Article 4 the audit committee shall be nominated by the chairman of the board of directors, more than one-half of the independent directors or one-third of all directors, and shall be elected by the board of directors.
Article 5 the audit committee shall have a chairman (convener), who shall be held by an independent director 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. Article 7 before the expiration of the term of office of the members of the audit committee, the board of directors shall not remove them without reason. If a 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 shall elect a member of the audit committee in accordance with the relevant provisions of these rules.
Article 8 a member of the audit committee may resign before the expiration of his term of office. In case of resignation, a written resignation report shall be submitted to the board of directors. After the board of directors accepts the resignation report of the members of the audit committee, the board of directors shall elect the members of the audit committee in accordance with the relevant provisions of these rules.
Chapter III responsibilities and authorities
Article 9 the audit committee shall carry out audit activities in accordance with relevant national laws, regulations and the articles of association. Its main responsibilities and authorities are as follows:
(I) supervise and evaluate the internal control of the company, review the scientificity, rationality, effectiveness and implementation of the internal control system of the company and its subsidiaries, investigate the responsibility of those responsible for violations, and put forward suggestions;
(II) review the company’s major related party transactions, form written opinions and submit them to the board of directors for deliberation;
(III) review the company’s financial report and express opinions on it, and review the company’s financial information and its disclosure; (IV) supervise and evaluate the work of the external audit institution, submit the annual evaluation opinions of the external audit institution to the board of directors, put forward the proposal of hiring and replacing the external audit institution, and submit it to the board of directors or the general meeting of shareholders for approval;
(V) supervise and evaluate internal audit work to ensure the independence of internal audit; Submit the annual evaluation opinions on the internal audit department to the board of directors, and put forward opinions on the due diligence and work assessment of internal auditors; (VI) coordinate the communication between the management, internal audit department and relevant departments and external audit institutions;
(VII) establish the company’s internal audit quality control system and improve the work quality of internal audit;
(VIII) supervise the existing or potential risks of the company;
(IX) supervise the company’s compliance with laws and regulations;
(x) be responsible for establishing the adjustment and optimization mechanism of the company’s overall risk management and collectivized system management mode, approving the risk assessment results and overall risk response strategies, and approving the adjustment and optimization strategies of the overall control mode such as system improvement, function adjustment, system innovation and structure optimization;
（11） Other matters authorized by the board of directors of the company 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 10 where there are false records, misleading statements or major omissions in the company’s financial and accounting reports, the audit committee 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 11 while disclosing the annual report, the company shall disclose the annual performance of the audit committee of the board of directors, mainly including the performance of its duties and the convening of the meeting of the audit committee.
The audit committee shall put forward deliberation opinions to the board of directors 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.
Article 12 the company provides necessary working conditions for the audit committee, and the office of the board of directors undertakes the daily work of the audit committee, such as work liaison, meeting organization, material preparation and file management. When the audit committee performs its duties, the company’s management and relevant departments shall cooperate.
Chapter IV decision making procedures
Article 13 the office of the board of directors shall be responsible for the preliminary preparations for the decision-making of the audit committee and provide written materials related to all aspects of the company:
(I) relevant financial reports of the company and their disclosure;
(II) work report of the internal audit institution;
(III) external audit contract and related work report;
(IV) report on internal control of the company;
(V) major related party transactions;
(VI) other relevant matters.
Article 14 at the meeting of the audit committee, the report provided by the office of the board of directors shall be reviewed, and the relevant written resolutions shall be submitted to the board of directors for discussion:
(I) whether the company’s important accounting policies, judgments, estimates and disclosed information comply with national laws and regulations, and whether the financial report is comprehensive and true;
(II) evaluation of the work of external audit institutions and the employment and replacement of external audit institutions;
(III) the implementation and effect of the company’s internal audit, and whether the company’s financial report is comprehensive and true;
(IV) whether the financial reports and other information disclosed by the company are objective and true, and whether the company’s major connected transactions comply with relevant laws and regulations;
(V) work evaluation of the company’s financial department and audit department, including their principals and leaders in charge;
(VI) other relevant matters.
Article 15 the audit committee shall examine the financial and accounting reports of listed companies, 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 terms 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.
Chapter V rules of procedure
Article 16 the meeting of the audit committee shall be divided into regular meetings and interim meetings. The meeting shall be presided over by the chairman. If the chairman is unable to attend, he may entrust another independent director member to preside over the meeting. The regular meeting of the audit committee shall be held at least 4 times a year; Under any of the following circumstances, the convener of the audit committee may convene an interim meeting:
(I) when the chairman of the Audit Committee deems it necessary;
(II) when more than half of the members propose;
(III) when the board of directors requests to convene a meeting of the audit committee.
Article 17 the meeting of the audit committee may adopt meeting voting and communication voting. When voting by communication, relevant voting matters shall be sent to the members of the audit committee by hand, mail, fax, e-mail and other means, and the members shall sign and vote in person. If the number of members who agree to vote on a matter reaches a quorum within the deadline for notification, the matter is passed.
Article 18 the meeting of the audit committee shall be held only when more than two-thirds of the members are present. Each member participating in the audit committee meeting shall have one vote, and the voting at the audit committee meeting shall be by show of hands or voting. The resolution of the audit committee must be approved by more than half of all the members present at the meeting.
Article 19 the audit committee meeting shall be prepared by the office of the board of directors:
(I) prepare documents to be submitted to the meeting for deliberation;
(II) arrange the venue of the meeting and prepare for the meeting;
(III) the meeting notice and relevant materials shall be sent 5 days before the meeting.
Article 20 members of the office of the board of directors may attend the meeting of the audit committee as nonvoting delegates, and directors, supervisors and other senior managers of the company may also attend the meeting as nonvoting delegates as required.
Article 21 the audit committee shall form a written record of the matters discussed at the meeting, which shall be signed by the members present at the meeting; If the meeting held by means of communication voting cannot complete the meeting minutes in real time, the audit working group shall sort out a meeting minutes after the meeting and send them to all members for signature. The minutes of the meeting shall be kept by the office of the board of directors.
Article 22 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 23 the convening procedures, voting methods and proposals 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 24 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 25 all members present at the meeting shall be obliged to keep confidential the items discussed at the meeting and shall not disclose relevant information without authorization.
Chapter VI supplementary provisions
Article 26 these Rules shall come into force as of the date of adoption at the meeting of the board of directors.
Article 27 matters not covered in these Rules shall be implemented in accordance with relevant national laws and 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 prevail.
Article 28 the board of directors shall be responsible for the interpretation of these rules.
