Chapter 1 General Principles
Article 1
To strengthen the decision-making capabilities of the Board of Directors of Zhejiang Kane Special Materials Co., Ltd. (hereinafter referred to as "the Company"), to conduct pre-audit and professional audits, ensure effective supervision of the management by the Board, and improve the corporate governance structure, the Company establishes the Audit Committee of the Board of Directors and formulates these working rules in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies, the Measures for the Administration of Independent Directors of Listed Companies, and the Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1—Standardized Operation of Main Board Listed Companies, as well as the relevant provisions of the Articles of Association of Zhejiang Kane Special Materials Co., Ltd. (hereinafter referred to as "the Articles of Association") and the Rules of Procedure for Board Meetings.
Article 2
The Audit Committee of the Board of Directors (hereinafter referred to as "the Audit Committee") is a specialized working body established by the Board of Directors in accordance with the resolutions of the shareholders' meeting and is directly accountable to the Board of Directors.
Chapter 2 Composition
Article 3
The Audit Committee consists of three director members, who must not hold senior management positions in the Company, with independent directors constituting the majority. Employee representatives among the Board members may serve as members of the Audit Committee.
Article 4
The members of the Audit Committee (hereinafter referred to as "members") are nominated by the Chairman, 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 Chairperson (convener), who shall be a professional accountant among the independent director members, responsible for presiding over the work of the committee. The Chairperson is elected within the Audit Committee and submitted for approval by the Board of Directors. If the convener is unable to perform their duties, a majority of the members may elect an independent director member to act on their behalf.
Article 6
The term of the Audit Committee is consistent with that of the Board of Directors, with each term not exceeding three years. Members may be re-elected upon the expiration of their term, but independent directors may not serve continuously for more than six years. If a member resigns or is no longer a director for any reason, they will automatically resign from the Audit Committee at the time they cease to be a director, and the committee shall supplement the number of members in accordance with Articles 3 to 5 above.
Article 7
The Audit Committee shall have an internal audit department as its daily operational body, responsible for daily work liaison and meeting organization.
Chapter 3 Responsibilities and Authority
Article 8
The main responsibilities and authority of the Audit Committee are as follows:
- Supervise and evaluate external audit work, propose the hiring or replacement of external audit firms;
- Supervise and evaluate internal audit work, responsible for the coordination between internal and external audits;
- Review the Company's financial information and its disclosure;
- Supervise and evaluate the Company's internal controls;
- Exercise the powers of the supervisory board as stipulated in the Company Law;
- Other matters as stipulated by laws, administrative regulations, the China Securities Regulatory Commission, the self-regulatory rules of the Shenzhen Stock Exchange, and the Articles of Association.