Chapter One General Principles
Article 1
To strengthen the decision-making function of the Board of Directors, ensure pre-audit and professional audit, and guarantee effective supervision of the management by the Board, these implementation rules are formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as "Company Law"), the Guidelines for the Work of Audit Committees of Listed Companies, the Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (hereinafter referred to as "Hong Kong Listing Rules"), and the company's articles of association.
Article 2
The Audit Committee of the Board of Directors is a specialized working body established by the Board according to the resolutions of the shareholders' meeting; it is mainly responsible for communication, supervision, and verification of internal and external audits of the company.
Chapter Two Composition
Article 3
The Audit Committee consists of three to five members, with independent directors constituting the majority and serving as the convener. At least one independent director must be a qualified accounting professional in accordance with the securities regulatory rules of the stock listing location. Committee members must be non-executive directors who do not hold senior management positions in the company and must possess the professional knowledge and experience necessary to fulfill the responsibilities of the Audit Committee. A former partner of the accounting firm responsible for auditing the company's accounts may not serve as a member of the Audit Committee within two years from the later of the following dates: (a) the date the individual ceased to be a partner of that accounting firm; or (b) the date the individual no longer has a financial interest in that accounting firm.
Article 4
Members of the Audit Committee are 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 5
The Audit Committee shall have one chairperson (convener), who must be an independent director qualified as an accounting professional in accordance with the securities regulatory rules of the stock listing location, responsible for presiding over the committee's work. The chairperson is elected from among the members and submitted for approval by the Board of Directors.
Article 6
The term of the Audit Committee is consistent with that of the Board of Directors. Members may be re-elected upon the expiration of their term. If a member ceases to be a director of the company during their term, they automatically lose their membership, and the committee shall supplement the number of members according to the above provisions.
Article 7
The Audit Committee shall establish a working group as its daily operational body.
Chapter Three Responsibilities and Authority
Article 8
The Audit Committee of the Board of Directors is responsible for reviewing the company's financial information and its disclosure, supervising and evaluating internal and external audit work and internal controls. The following matters must be approved by more than half of the members of the Audit Committee before being submitted to the Board for deliberation:
- Disclosure of financial information in financial accounting reports and periodic reports, and internal control evaluation reports;
- Hiring or dismissing the accounting firm responsible for the company's audit;
- Appointing or dismissing the company's financial officer;
- Making changes to accounting policies, accounting estimates, or correcting significant accounting errors for reasons other than changes in accounting standards;
- Other matters stipulated by laws and regulations, the securities regulatory rules of the stock listing location, and the company's articles of association.