Chapter 1 General Principles
Article 1
To strengthen the decision-making function of the board of directors of Zhejiang Bofei Electric Co., Ltd. (hereinafter referred to as "the Company"), ensure pre-audit and professional audit, and guarantee effective supervision of the management by the board, these rules are formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Management Measures for Independent Directors of Listed Companies, the Corporate Governance Guidelines for Listed Companies, the Guidelines for Articles of Association of Listed Companies, and the Articles of Association of Zhejiang Bofei Electric Co., Ltd. (hereinafter referred to as "the Articles of Association"), as well as relevant national laws, regulations, and normative documents.
Article 2
The Audit Committee is primarily responsible for reviewing the Company's financial information and its disclosure, supervising and evaluating internal and external audit work, and internal controls.
Chapter 2 Formation and Composition of the Audit Committee
Article 3
The Company shall establish an Audit Committee, which must meet the following conditions:
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Composed of more than three directors;
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Members must not hold senior management positions in the listed company;
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Independent directors must constitute the majority;
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The convener shall be an accounting professional among the independent directors. Employee representatives from the board may become members of the Audit Committee.
Article 4
Members of the Audit Committee shall be nominated by the chairman or more than half of the independent directors or more than one-third of all directors, and elected by the board of directors.
Article 5
The Audit Committee shall have one convener, who shall be an accounting professional among the independent directors, responsible for presiding over the committee's work; the convener shall be elected from among the members and approved by the board of directors. Accounting professionals should possess substantial accounting knowledge and experience and meet at least one of the following conditions:
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Hold a certified public accountant qualification;
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Hold a senior professional title in accounting, auditing, or financial management, or a doctoral degree;
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Hold a senior professional title in economic management with at least five years of full-time work experience in accounting, auditing, or financial management.
Audit Committee members must possess the professional knowledge, work experience, and good professional ethics necessary to fulfill their responsibilities, ensuring sufficient time and energy to diligently supervise and evaluate the Company's internal and external audit work, promote the establishment of effective internal controls, and provide truthful, accurate, and complete financial reports.
Article 6
The term of the Audit Committee shall be consistent with that of the current board of directors, and each term shall not exceed three years. Upon expiration of the term, members may be re-elected. If a member ceases to be a director of the Company during their term, they automatically lose their membership, and the committee shall promptly fill the vacancy according to these rules. During a member's term, the board of directors cannot dismiss them without cause. If a member fails to attend meetings in person for two consecutive times or fails to submit written opinions on meeting topics, they shall be deemed unable to fulfill their duties, and the board shall replace that member. If the resignation of a member results in the number of Audit Committee members falling below the legal minimum or lacking accounting professionals, the original members shall continue to perform their duties until new members are appointed.
Chapter 3 Responsibilities and Powers of the Audit Committee
Article 7
Members of the Audit Committee shall continuously enhance their learning and training in laws, accounting, and regulatory policies to improve their ability to perform their duties.