Dongguan Aohai Technology Co.Ltd(002993)
Implementation rules of the audit committee
April, 2002
catalogue
Chapter I General Provisions 3 Chapter II personnel composition Chapter III responsibilities and authorities Chapter IV Rules of procedure 5 chapter V Supplementary Provisions seven
Dongguan Aohai Technology Co.Ltd(002993)
Implementation rules of the audit committee
Chapter I General Provisions
Article 1 in order to strengthen the decision-making function of the board of directors, achieve prior audit and professional audit, ensure the effective supervision of the board of directors over the management, and improve the corporate governance structure, in accordance with the company law of the people’s Republic of China (hereinafter referred to as the “Company Law”) and the governance standards for listed companies (hereinafter referred to as the “governance standards”) In accordance with the Dongguan Aohai Technology Co.Ltd(002993) articles of Association (hereinafter referred to as the “articles of association”) and other relevant provisions, the company establishes an audit committee under the board of directors and formulates these implementation rules.
Article 2 the audit committee of the board of directors is a special working organization under the board of directors, which is mainly responsible for the communication, supervision and verification of the company’s internal and external audit.
Chapter II personnel composition
Article 3 the members of the audit committee shall be composed of three directors, of which independent directors shall account for more than half, and at least one of the independent directors shall be an accounting professional.
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 (convener) who shall be an independent director of accounting professionals and elected by the board of directors.
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. 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 5 above.
Article 7 the Securities Affairs Department of the company provides comprehensive services for the audit committee, and is responsible for coordinating the liaison and meeting organization of the daily work of the Audit Committee; The finance and Audit Department of the company provides professional support to the audit committee, and is responsible for the preparation of relevant materials and the feedback on the implementation of internal control system.
Chapter III responsibilities and authorities
Article 8 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) supervise and evaluate the company’s internal control;
(IV) propose to hire or replace the external audit institution;
(V) supervise the establishment and implementation of the company’s internal audit system;
(VI) coordinate the relationship between the internal audit department and external audit units such as accounting firms and national audit institutions;
(VII) review the company’s financial information and its disclosure;
(VIII) review the company’s internal control system and issue an annual internal control self-evaluation report on the establishment and implementation of the internal control system related to financial reports and information disclosure;
(IX) have the right to convene meetings of relevant departments of the company’s internal control system;
(x) implement the annual work plan of the audit committee after being approved by the board of directors;
（11） Review the work plans and reports submitted by the internal audit department, and report to the board of directors in a timely manner;
（12） Other matters authorized by laws and regulations, the articles of association and the board of directors of the company.
Article 9 the audit committee of the board of directors 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 the possibility of fraud, fraud and 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 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 10 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 11 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 it is found that the company has violations of laws and regulations and non-standard operation, it shall report to the Shenzhen Stock Exchange in time:
(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 board of directors or the audit committee considers that there are major defects or risks in the company’s internal control, or the sponsor, independent financial consultant and accounting firm point out that there are major defects in the effectiveness of the company’s internal control, the board of directors shall report to the Shenzhen Stock Exchange in time and disclose them. 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 12 the board of directors or its audit committee shall issue an annual self-evaluation report on internal control according to the evaluation report and relevant materials issued by the internal audit department.
The internal control self-evaluation report shall at least include the following contents:
(I) statement of the board of directors on the authenticity of the internal control report;
(II) overall evaluation of internal control;
(III) basis, scope, procedures and methods of internal control evaluation;
(IV) internal control defects and their identification;
(V) rectification of internal control defects of the previous year;
(VI) proposed rectification measures for internal control defects this year;
(VII) conclusion on the effectiveness of internal control.
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 examination and decision. The audit committee shall cooperate with the board of supervisors in their audit activities.
Chapter IV Rules of procedure
Article 14 the meeting of the audit committee is divided into regular meeting and interim meeting. Within four months after the end of each fiscal year, the audit committee shall hold at least one regular meeting, which shall be convened and presided over by the chairman. The directors of the company, the chairman of the audit committee or two or more members jointly may request to convene an interim meeting of the audit committee. The chairman of the committee shall convene and preside over the interim meeting within 10 days after receiving the proposal.
Article 15 the regular meeting of the audit committee shall be notified five days before the meeting is held; An interim meeting shall be notified three days before the meeting, and can be held at any time in case of emergency.
Article 16 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.
Article 17 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 to have waived his voting right at the meeting. If a member fails to attend the meeting for two consecutive times or entrusts other members to attend, 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 18 members of the committee shall express their opinions clearly and independently according to their own judgment, and form a unified opinion as far as possible. If it is really difficult to form a unified opinion, different opinions shall be recorded and explained in the minutes of the meeting.
Article 19 resolutions made at the meeting must be adopted by more than half of all members.
Article 20 the voting method of the audit committee meeting is a show of hands or voting, and the interim meeting can be held by means of communication voting.
Article 21 the audit committee may require the head of the internal audit department to attend the meeting as nonvoting delegates, and may invite other directors, supervisors and senior managers of the company to attend the meeting as nonvoting delegates when necessary.
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 meeting of the audit committee shall have minutes, which shall be signed by the members attending the meeting. The minutes shall be kept by the Secretary of the board of directors for a period of 10 years.
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 have the obligation to keep confidential the matters discussed at the meeting and shall not disclose relevant information without authorization.
Chapter V supplementary provisions
Article 26 unless otherwise specified in the context, the terms “above” and “below” in these implementation rules include this number, and the terms “above” and “below” do not include this number.
Article 27 matters not covered in these Implementation Rules shall be implemented in accordance with the relevant provisions of national laws, regulations and the articles of association.
Article 28 in case of any inconsistency between these implementation rules and the relevant provisions of national laws, regulations and the articles of association, the relevant provisions of national laws, regulations and the articles of association shall prevail.
Article 29 the detailed rules shall be formulated and revised by the board of directors of the company and shall come into force from the date of adoption of the resolution of the board of directors.
Article 30 the executive rules shall be interpreted by the board of directors.
