Chapter 1 General Principles
Article 1
To fully leverage the supervisory role of the Audit and Risk Management Committee of the Board of Directors over the company's financial information, internal controls, and internal and external audits, and to improve the internal supervision mechanism of the company, these work 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 Code of Corporate Governance for Listed Companies, the Measures for the Administration of Independent Directors of Listed Companies, and the Articles of Association of China National Machinery Industry Corporation (hereinafter referred to as "the Articles of Association").
Article 2
The Audit and Risk Management Committee is a specialized working body established under the Board of Directors, reporting its work to the Board and being accountable to it.
Article 3
The daily work of the Audit and Risk Management Committee is based in the Board Office, responsible for work liaison, meeting organization, and document management. The company's internal audit department, finance department, and human resources department serve as supporting departments for the committee, responsible for preparing materials for proposals within the committee's discussion scope and implementing resolutions.
Chapter 2 Composition
Article 4
The Audit and Risk Management Committee consists of three to five directors, with independent directors constituting more than half, and at least one independent director must be a qualified accounting professional. Committee members should not hold senior management positions in the company.
Article 5
The committee is nominated by the chairman, more than half of the independent directors, or one-third of all directors, and elected by the Board of Directors.
Article 6
The committee shall have one convener, who must be an accounting professional among the independent directors.
Article 7
Committee members must possess the professional knowledge, work experience, and good professional ethics necessary to fulfill their responsibilities, ensuring adequate time and energy to perform their duties diligently and effectively supervise and evaluate the internal and external audit work of the listed company, promote the establishment of effective internal controls, and provide truthful, accurate, and complete financial reports.
Article 8
The term of office for committee members is consistent with that of other directors, with each term not exceeding three years. Upon expiration, members may be re-elected, but independent directors may not serve more than six consecutive years. If a member resigns or otherwise ceases to be a director, they automatically resign from the committee upon ceasing to be a director. If the number of committee members falls below the legal minimum or lacks accounting professionals due to resignations, the original members shall continue to perform their duties until new members are appointed.
Article 9
Committee members should continuously enhance their learning and training in laws, accounting, and regulatory policies to improve their performance capabilities.
Article 10
The company shall provide necessary working conditions and sufficient resource support for the Audit and Risk Management Committee, equipping dedicated personnel or institutions to handle daily work such as liaison, meeting organization, material preparation, and document management. The company's management and relevant departments must cooperate with the committee in performing its duties. Directors and senior management must provide truthful information and materials to the committee and must not obstruct the committee's exercise of its powers, ensuring that the committee's work is not interfered with. The costs necessary for the committee to exercise its powers shall be borne by the company.
Article 11
When disclosing the annual report, the company shall also disclose the annual performance of the Audit and Risk Management Committee, mainly including its fulfillment of responsibilities and exercise of powers, as well as the convening of committee meetings.