Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209)
Rules of procedure of the audit committee of the board of directors
(revised in 2022)
Chapter I General Provisions
Article 1 in order to ensure the effective supervision of the board of directors over the management and improve the corporate governance structure, the audit committee of the board of directors is hereby established and these rules are formulated in accordance with the company law of the people’s Republic of China, the Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) articles of Association (hereinafter referred to as the articles of association) and other relevant laws and regulations.
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 resolution of the general meeting of shareholders, which is mainly responsible for the communication, supervision and verification of the internal and external audit of the company.
Chapter II personnel composition
Article 3 the members of the audit committee are composed of three directors, with the majority of independent directors. At least one independent director among the members is a professional accountant.
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, who shall be 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 audit committee shall be composed of three or more board members appointed by the board of directors, and the chairman shall be an accounting professional. Members of the audit committee shall be diligent and responsible, effectively supervise and evaluate the internal and external audit work of listed companies, 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 7 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. If any member ceases to hold the position of director of the company during the period, he will automatically lose the qualification of member, and the committee will make up the number of members according to the provisions of Articles 3 to 6 above.
Article 8 when the number of members of the committee is less than two-thirds of the required number, the board of directors of the company shall timely add new members. When the number of members of the committee is less than two-thirds of the specified number, the committee shall suspend the exercise of its functions and powers specified in these rules.
Chapter III responsibilities and authorities
Article 9 the main responsibilities and authorities of the audit committee are as follows:
(I) supervise and evaluate the external audit work and propose to hire or replace the external audit institution;
(II) supervise and evaluate the internal audit work, and be responsible for the coordination of internal audit and external audit;
(III) review the company’s financial information and its disclosure;
(IV) supervise and evaluate the company’s internal control;
(V) be responsible for other matters authorized by laws and regulations, the articles of association and the board of directors.
Article 10 the audit committee shall review 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 major shareholders, actual controllers or directors, supervisors and senior managers of the listed company.
The internal audit committee shall be responsible for the verification of the company’s internal audit rules, and the external audit committee shall be responsible for the strict implementation of the internal audit rules and regulations. The company shall pay special attention to the Prudential implementation of the internal audit rules.
Article 11 when supervising and evaluating the work of the internal audit department, the audit committee shall perform the following main responsibilities:
(I) guide and supervise the establishment and implementation of internal audit system;
(II) review the company’s annual internal audit work plan;
(III) supervise and urge the implementation of the company’s internal audit plan;
(IV) guide the effective operation of the internal audit department. The internal audit department of the company must report to the audit committee, and all kinds of audit reports, rectification plans and rectification conditions of audit problems submitted by the internal audit department to the management must be submitted to the audit committee at the same time;
(V) report to the board of directors on the progress and quality of internal audit and major problems found;
(VI) coordinate the relationship between the internal audit department and external audit units such as accounting firms and national audit institutions.
Article 12 the audit committee shall supervise the internal audit department to inspect the following matters at least once every six months, issue inspection reports and submit them to the audit committee. If a listed company is found to have violations of laws and regulations or non-standard operation, it shall report to the bourse in a timely manner:
(I) the implementation of major events such as the use of raised funds, provision of guarantees, related party transactions, securities investment and derivatives transactions, provision of financial assistance, purchase or sale of assets, foreign investment and so on;
(II) the company’s large amount of capital transactions and capital transactions with directors, supervisors, senior managers, controlling shareholders, actual controllers and their affiliates.
The audit committee shall issue a written evaluation opinion on the effectiveness of the company’s internal control according to the internal audit report and relevant materials submitted by the internal audit department, and report to the board of directors. If the audit committee considers that there are significant defects or risks in the company’s internal control, or the sponsor, independent financial consultant or accounting firm points out that there are significant defects in the effectiveness of the company’s internal control, it shall report to the board of directors in time, and the board of directors shall report to and disclose it to Shenzhen Stock Exchange. The company shall disclose in the announcement the major defects or risks in internal control, the consequences that have been or may be caused, and the measures that have been taken or are to be taken.
Article 13 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. Article 14 the company shall provide necessary working conditions for the audit committee and allocate special personnel or institutions to undertake 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 management and relevant departments of the listed company shall cooperate.
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 15 when the company hires or replaces an external audit institution, the audit committee must form a review opinion and put forward suggestions to the board of directors before the board of directors can review relevant proposals.
Chapter IV decision making procedures
Article 16 the Secretary Office of the board of directors and the internal audit department 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) information disclosed by the company;
(V) audit report on major related party transactions of the company;
(VI) other relevant matters.
Article 17 the audit committee shall review the report provided at the meeting and submit the relevant written resolution materials to the board of directors for discussion:
(I) work evaluation of external audit institutions, employment and replacement of external audit institutions;
(II) whether the company’s internal audit system has been effectively implemented and whether the company’s financial report is comprehensive and true; (III) 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;
(IV) work evaluation of the company’s financial department and audit department, including their principals;
(V) other relevant matters.
Chapter V rules of procedure
Article 18 the meeting of the audit committee is divided into regular meeting and interim meeting, and the regular meeting shall be held at least four times a year; The audit committee shall hold an interim meeting when there are matters that need to be considered or commented by the audit committee according to laws and regulations, normative documents, the articles of association and these rules, or when the members propose. The notice of the meeting shall be delivered to all members 5 days before the meeting is held.
Article 19 the meeting notice can be sent in written forms such as personal service, fax, express mail or e-mail. The meeting notice shall at least include the meeting time, place, convening method, topics to be discussed at the meeting, meeting contact person and contact information, and the sending date of the meeting notice. If the time is urgent, it can be notified by telephone. In this case, the meeting notice shall at least include the time, place, convening method, topics to be discussed at the meeting, as well as the description of the urgent need to convene the meeting as soon as possible, and send a written notice afterwards.
Article 20 the meeting of the audit committee shall be convened and presided over by the chairman. When the chairman is unable or fails to perform his duties, other members shall convene or preside over the meeting.
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. A member can only entrust one other member to exercise the voting right on his behalf at a time. If two or more members are entrusted to exercise the voting right on his behalf, the entrustment is invalid.
Article 23 If a member of the audit committee entrusts other members to attend the meeting and exercise voting rights on his behalf, he shall submit a power of attorney to the chairman of the meeting. The power of attorney shall be submitted to the chairman of the meeting no later than the premise of the meeting.
Article 24 the power of attorney 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 (consent, objection, 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.
The power of attorney shall be signed by the principal and the principal.
Article 25 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 of the committee fails to attend the meeting for two consecutive times, he shall be deemed unable to properly perform his functions and powers. The board of directors may remove its members from office.
Article 26 the meeting of the audit committee may take the form of on-site meeting or off-site meeting. Unless otherwise specified in the articles of association or these rules, on the premise of ensuring the full expression of opinions of the members, the committee may make a resolution by means of communication voting, which shall be signed by the members participating in the meeting.
Article 27 the voting method of the audit committee meeting is a show of hands or voting. If communication voting is adopted, the members of the committee who sign the resolution of the meeting shall be deemed to have attended the relevant meeting and agreed to the content of the resolution.
Article 28 the manager of the audit department may attend the meeting of the audit committee as nonvoting delegates, and may also invite directors, supervisors and other senior managers of the company to attend the meeting as nonvoting delegates when necessary.
Article 29 the convening procedures, voting methods and proposals adopted at the meeting of the audit committee must comply with the provisions of relevant laws and regulations, the articles of association and these rules.
Article 30 the meeting of the audit committee shall be recorded, and the members attending the meeting shall sign on the meeting minutes; The minutes of the meeting shall be kept by the Secretary of the board of directors of the company.
Article 31 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 32 the minutes of the audit committee meeting shall at least include the following contents: the date and place of the meeting and the name of the convener; The names of the persons attending the meeting and those entrusted by others to attend the meeting shall be specially indicated; Agenda of the meeting; Key points of members’ speeches; Voting methods and results of each resolution or proposal; Other matters that should be explained and recorded in the minutes of the meeting.
Article 33 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 supplementary provisions
Article 34 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 the rules shall be revised immediately and submitted to the board of directors for deliberation and approval.
Article 35 The term “more than” in these rules includes this number; “Over” and “below” do not include this number.
Article 36 the power of interpretation of these rules belongs to the board of directors of the company.
Article 37 these Rules shall come into force from the date of deliberation and adoption by the board of directors.
Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) April 15, 2022
