Working Rules of the Audit Committee of the Board of Directors of Zhongyuan Xiehe Cell Gene Engineering Co., Ltd.
Zhongyuan Xiehe Cell Gene Engineering Co., Ltd.
Working Rules of the Audit Committee of the Board of Directors
Chapter 1 General Provisions
Article 1 In order to strengthen the decision-making function of the board of directors, achieve prior audits and professional audits, ensure the effective supervision of managers by the board of directors, 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"), the "Governance Code of Listed Companies", and the "Shanghai Stock Exchange" In accordance with the Municipal Company Self-Regulatory Guidelines No. 1 - Standardized Operations, the Shanghai Stock Exchange Stock Listing Rules, the Articles of Association of Zhongyuan Concord Cell Genetic Engineering Co., Ltd. (hereinafter referred to as the "Articles of Association") and other relevant regulations, the company has specially established an audit committee of the board of directors and formulated these detailed rules.
Article 2 The resolutions made by the Audit Committee must comply with the relevant laws and regulations, the Articles of Association, and these Rules. If the content of the resolution of the Audit Committee violates the relevant laws, regulations, the Articles of Association, or these Rules, the resolution shall be invalid.
Article 3 The Audit Committee of the Board of Directors is a specialized working organization under the Board of Directors. It exercises the powers of the Board of Supervisors stipulated in the Company Law, is responsible to the Board of Directors, and reports its work to the Board of Directors. The audit committee shall be responsible for reviewing the company's financial information and its disclosure, supervising and evaluating internal and external audit work and internal control.
Article 4 Members of the audit committee shall have the professional knowledge, work experience and good professional ethics to be competent for their work responsibilities, ensure sufficient time and energy to perform the committee's work responsibilities, be diligent and responsible, effectively supervise and evaluate the company's internal and external audit work, promote the company to establish effective internal controls and provide true, accurate and complete financial reports. Audit committee members should continue to strengthen their study and training in legal, accounting and regulatory policies, and continuously improve their ability to perform their duties.
Chapter 2 Personnel Composition
Article 5 The audit committee shall consist of three directors who do not serve as senior managers of the company, of which the majority shall be independent directors. Employee representatives who are members of the company's board of directors can become members of the audit committee.
Article 6 The Audit Committee shall have a chairman (convener), who shall be an accounting professional among the independent directors. The Board of Directors Office is responsible for the daily work liaison and meeting organization of the Audit Committee.
Article 7 The Chairman of the Audit Committee is responsible for convening and presiding over meetings of the Audit Committee. When the Chairman of the Audit Committee is unable or unable to perform his duties, he shall designate another member to perform his duties. If the Chairman of the Audit Committee neither performs his duties nor designates other members to perform his duties, more than half of the members may elect a member to perform the duties of the Chairman of the Audit Committee and report the relevant situation to the company's Board of Directors in a timely manner.
Article 8 The term of office of the members of the Audit Committee is the same as that of the directors of the same term of the Board of Directors. Each term of office shall not exceed three years. When the term of office expires, members may be re-elected. However, independent directors shall not serve for more than six consecutive years. During this period, if any member ceases to serve as a director of the company due to resignation or other reasons, he or she will automatically resign from the Audit Committee when he ceases to serve as a director.
Article 9 If the resignation of a member of the audit committee results in the number of members of the audit committee falling below the legal minimum, or there is a shortage of accounting professionals, the audit committee shall elect by replacement in accordance with regulations. The original members shall continue to perform their duties until new members take office.
Article 10 The company shall establish an internal audit institution to supervise and inspect the company's business activities, risk management, internal control, financial information and other matters.
The internal audit organization is responsible to the board of directors and reports to the audit committee of the board of directors. In the process of supervision and inspection, the internal audit institution shall accept the supervision and guidance of the audit committee. If the internal audit institution discovers major problems or clues about the company, it should report them directly to the audit committee in a timely manner.
The internal audit institution shall maintain its independence and shall not be placed under the leadership of the financial department, or work together with the financial department. The Audit Committee participates in the assessment of the person in charge of internal audit.
Article 11 The provisions of the Company Law and the Articles of Association on the obligations of directors shall apply to the members of the audit committee.
Chapter 3 Responsibilities and Permissions
Article 12 The main responsibilities and powers of the audit committee include:
(1) Review the company’s financial information and its disclosure;
(2) Supervise and evaluate external audit work, and propose to hire or replace external audit institutions;
(3) Supervise and evaluate internal audit work, and be responsible for the coordination between internal audit and external audit;
(4) Supervise and evaluate the company’s internal controls;
(5) Exercise the powers of the board of supervisors as stipulated in the Company Law;
(6) Responsible for laws and regulations, Shanghai Stock Exchange self-regulatory rules, company articles of association and other matters authorized by the board of directors.
Article 13 In order to ensure the effective performance of its duties, the Audit Committee has the right to exercise the following powers in accordance with laws and regulations, the self-regulatory rules of the Shanghai Stock Exchange and the company's articles of association:
(1) Check the company’s finances;
(2) Supervise the performance of duties by directors and senior managers;
(3) When the actions of directors and senior managers harm the interests of the company, require directors and senior managers to make corrections;
(4) Propose to convene an extraordinary board meeting;
(5) Propose to convene an extraordinary shareholders' meeting, and convene and preside over the shareholders' meeting when the board of directors fails to perform its duties of convening and presiding over the shareholders' meeting as stipulated by law;
(6) Submit proposals to shareholders’ meetings;
(7) Accept shareholders' requests and file lawsuits against directors and senior managers other than members of the audit committee who have violated laws, administrative regulations or the company's articles of association and caused losses to the company when performing their duties;
(8) Other powers stipulated in laws and regulations, the self-regulatory rules of the Shanghai Stock Exchange and the company's articles of association.
Article 14 The Audit Committee is responsible for reviewing the company's financial information and its disclosure, supervising and evaluating internal and external audit work and internal control. The following matters shall be submitted to the Board of Directors for review after being approved by more than half of all members of the Audit Committee:
(1) Disclose financial information and internal control evaluation reports in financial accounting reports and periodic reports;
(2) Appoint or dismiss the accounting firm that handles the company’s audit business;
(3) Appoint or dismiss the company’s financial director;
(4) Changes in accounting policies, accounting estimates or correction of major accounting errors due to reasons other than changes in accounting standards;
(5) Other matters stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.
Article 15 The deliberation opinions adopted at the audit committee meeting must be submitted in writing to the company's board of directors. If the audit committee proposes deliberation opinions to the board of directors on matters within its scope of responsibilities and the board of directors fails to adopt them, the company shall disclose the matter and fully explain the reasons.
Article 16 The internal audit institution shall accept the supervision and guidance of the audit committee during the supervision and inspection of the company's business activities, risk management, internal control, and financial information.
The Audit Committee supervises and evaluates internal audit work and performs the following responsibilities:
(1) Guide and supervise the establishment and implementation of the internal audit system;
(2) Review the company’s annual internal audit work plan;
(3) Supervise the implementation of the company’s internal audit plan;
(4) Guide the effective operation of the internal audit agency;
(5) Report to the board of directors the progress and quality of internal audit work, as well as major problems or clues discovered, etc.;
(6) Coordinate the relationship between the internal audit agency and external audit agencies, national audit agencies and other external audit units.
If the internal audit institution discovers relevant major issues or clues, it shall report them directly to the audit committee in a timely manner.
Article 17 The audit committee shall supervise and guide the internal audit institution to inspect the following matters at least once every six months, issue an inspection report and submit it to the audit committee. If the inspection finds that the company has any violations of laws or regulations, irregular operations, etc., it shall report to the regulatory authorities in a timely manner:
(1) The implementation of major events such as the use of funds raised by the company, provision of guarantees, related transactions, securities investments and derivatives transactions, provision of financial assistance, purchase or sale of assets, external investments, etc.;
(2) The company’s large capital transactions and capital transactions with directors, senior managers, controlling shareholders, actual controllers and their related parties.
The audit committee shall issue written evaluation opinions on the effectiveness of the company's internal controls based on the internal audit report and relevant materials submitted by the internal audit institution, and report to the board of directors. If the board of directors or the audit committee believes that there are major flaws or major risks in the company's internal control, or if the sponsor or accounting firm points out that there are major flaws in the effectiveness of the company's internal control, the board of directors shall report to the Shanghai Stock Exchange in a timely manner and disclose it. The company shall disclose in the announcement any major deficiencies or major risks in internal control, the consequences that have occurred or may result, and the measures that have been taken or planned to be taken.
Article 18 The board of directors and the audit committee shall evaluate the establishment and implementation of the company's internal control based on the evaluation report and relevant materials issued by the company's internal audit institution, and review and form an annual internal control evaluation report. The board of directors shall formulate a resolution on the company's internal control evaluation report while reviewing the annual report and other matters.
Article 19 The Audit Committee supervises the employment of external audit institutions and performs the following duties:
(1) Formulate policies, procedures and related internal control systems for the selection and employment of external audit institutions in accordance with the authorization of the board of directors;
(2) Propose to start the work related to the selection and recruitment of external audit institutions;
(3) Review the selection documents, determine the evaluation elements and specific scoring standards, and supervise the selection process;
(4) Review and decide on the external audit agency to be hired, make recommendations on audit fees, and submit them to the board of directors for resolution;
(5) Responsible for other matters related to the selection, employment and dismissal of external audit institutions authorized by laws, regulations, articles of association and the board of directors.
Article 20 The Audit Committee supervises and evaluates the audit work of external audit institutions, urges external audit institutions to be honest, trustworthy and diligent, strictly abide by business rules and industry self-discipline norms, strictly implement internal control systems, verify and verify the company's financial accounting reports, perform special attention obligations, and prudently express professional opinions.
The audit committee shall regularly (at least annually) submit to the board of directors an evaluation report on the performance of the external audit institution hired and a report on the performance of the audit committee's supervisory responsibilities to the external audit institution.
Article 21 The audit committee shall make recommendations to the board of directors on hiring or replacing external audit institutions, and review the audit fees and employment terms of external audit institutions, without any undue influence from the company's major shareholders, actual controllers or directors and senior managers. The audit committee should urge the external audit institution to be honest and diligent, strictly abide by business rules and industry self-discipline standards, strictly implement the internal control system, verify the company's financial accounting reports, perform special attention obligations, and prudently express professional opinions.
Article 22 The audit committee shall strengthen communication with the annual audit CPA after the annual audit CPA enters the work. After the annual audit CPA issues a preliminary audit opinion, the audit committee shall review the company's annual financial accounting report again and form a written opinion.
Article 23 If the company's directors or senior managers discover that the company's financial accounting report contains false records, misleading statements or major omissions and report it to the board of directors or the audit committee, or if an intermediary agency points out to the board of directors or the audit committee that the company's financial accounting report contains false records, misleading statements or major omissions, the board of directors shall promptly report to the Shanghai Stock Exchange and disclose it.
If a company discloses relevant information in accordance with the provisions of the preceding paragraph, it shall disclose in the announcement the major problems existing in the financial accounting report, the consequences that have or may result, and the measures that have been taken or planned to be taken.
The audit committee should urge the company's relevant responsible departments to formulate rectification measures and rectification schedules, conduct follow-up reviews, supervise the implementation of rectification measures, and promptly disclose the completion of rectifications.
Article 24 The audit committee shall supervise the compliance of the company's directors and senior managers with laws and regulations, the relevant self-regulatory rules of the Shanghai Stock Exchange, the company's articles of association, and the performance of the company's duties, and may require directors and senior managers to submit reports on the performance of their duties.
If the audit committee discovers that directors or senior managers have violated laws and regulations, the relevant self-regulatory rules of the Shanghai Stock Exchange or the company's articles of association, it shall notify the board of directors or report to the shareholders' meeting and disclose it in a timely manner, or it may report directly to the regulatory agency.
In the process of performing its supervisory duties, the audit committee may recommend the dismissal of directors and senior managers who violate laws and regulations, relevant self-regulatory rules of the Shanghai Stock Exchange, the company's articles of association or resolutions of the shareholders' meeting.
Article 25 If the audit committee proposes to the board of directors to convene an extraordinary shareholders' meeting, it shall submit the proposal to the board of directors in writing. The board of directors shall provide written feedback on whether it agrees or disagrees with convening an extraordinary shareholders' meeting within ten days after receiving the proposal in accordance with laws, regulations and the company's articles of association.
If the board of directors agrees to convene an extraordinary shareholders' meeting, it shall issue a notice of convening the shareholders' meeting within five days after the board of directors' resolution is made. Any changes to the original proposal in the notice must be approved by the audit committee. The extraordinary shareholders' meeting shall be held within two months from the date proposed by the Audit Committee.
Article 26 The audit committee shall convene and preside over shareholders' meetings when the board of directors fails to perform its duties as stipulated by law in convening and presiding over shareholders' meetings.
If the audit committee decides to convene a shareholders' meeting on its own, it must notify the board of directors in writing and file it with the Shanghai Stock Exchange. The audit committee shall submit relevant supporting materials to the Shanghai Stock Exchange when issuing the notice of the shareholders' meeting and the announcement of the resolutions of the shareholders' meeting.
Shareholders' meetings convened by the Audit Committee on their own initiative shall be presided over by the convener of the Audit Committee. If the convener of the Audit Committee is unable or fails to perform his duties, an Audit Committee member jointly elected by more than half of the Audit Committee members shall preside over the meeting.
The board of directors and the secretary of the board of directors shall cooperate with the shareholders' meeting convened by the audit committee on its own initiative, and the board of directors shall provide the shareholder list on the equity registration date. If the board of directors fails to provide a list of shareholders, the convener may apply to the securities registration and clearing agency to obtain the relevant announcement on the notice of convening the shareholders' meeting. The shareholder list obtained by the convener shall not be used for any purpose other than convening a shareholders' meeting. The audit committee convenes a shareholders' meeting on its own initiative, and the necessary expenses for the meeting shall be borne by the company.
Article 27 If directors or senior managers other than members of the audit committee violate laws, administrative regulations or the provisions of the Articles of Association and cause losses to the company when performing their duties, the audit committee has the right to accept written requests from shareholders who individually or collectively hold more than 1% of the company's shares for more than 180 consecutive days and file a lawsuit with the People's Court. If members of the audit committee violate laws, administrative regulations or the company's articles of association when performing their duties, causing losses to the company, the aforementioned shareholders may request the board of directors in writing to file a lawsuit with the People's Court.
If the audit committee or the board of directors refuses to file a lawsuit after receiving a written request from a shareholder as stipulated in the preceding paragraph, or fails to file a lawsuit within thirty days from the date of receipt of the request, or the situation is urgent and failure to file a lawsuit immediately will cause irreparable damage to the company's interests, the shareholders specified in the preceding paragraph have the right to directly file a lawsuit with the People's Court in their own name for the benefit of the company.
Article 28 The audit committee must exercise its powers in compliance with the relevant provisions of the Company Law, the Articles of Association and these Rules, and must not harm the interests of the company and shareholders. Members of the Audit Committee are obligated to keep confidential the company-related information they learn until it is made public.
Article 29 The company shall provide the audit committee with necessary working conditions and sufficient resource support, and assign specialized personnel or institutions to undertake the daily work of the audit committee such as work liaison, meeting organization, material preparation, and file management. When the audit committee performs its duties, the company's management and relevant departments must cooperate. Directors and senior managers shall truthfully provide relevant information and information to the Audit Committee, shall not hinder the Audit Committee from exercising its powers, and ensure that the Audit Committee performs its duties without interference. The expenses necessary for the audit committee to exercise its powers shall be borne by the company.
Chapter 4 Convening and Notification of Meetings
Article 30 The Office of the Board of Directors is responsible for the preliminary preparations for the Audit Committee meeting, organizing relevant functional departments of the company to prepare relevant materials, and providing written information from relevant aspects of the company.
Article 31 Audit Committee meetings are divided into regular meetings and ad hoc meetings. The Audit Committee meets at least once every quarter. In case of one of the following circumstances, a temporary audit committee meeting should be held:
(1) When the board of directors decides to assign tasks;
(2) When it is proposed by two or more members to hold a meeting to discuss matters within the scope of authorization of the Audit Committee;
(3) When the convener deems it necessary.
The expenses incurred in the meeting mentioned in the preceding paragraph shall be paid by the company. Relevant meetings should be notified to all members three days before the meeting. If the situation is urgent and it is necessary to convene an audit committee meeting as soon as possible, the meeting notice may be issued at any time by telephone or other oral means, but the convener shall make an explanation at the meeting.
Article 32 Audit committee meetings shall in principle be held in the form of on-site meetings. On the premise of ensuring that all participating members can fully communicate and express their opinions, they may be held by video, telephone or other means when necessary. In principle, the company should provide relevant materials and information no later than three days before the audit committee meeting.
Article 33 Board of Directors office staff may attend the meeting as non-voting delegates.
Chapter 5 Meeting Proceedings and Voting Procedures
Article 34 The Audit Committee shall be held only when more than two-thirds (including two-thirds) of its members are present. If the committee deems it necessary, it may invite other directors, senior managers, business department managers and other relevant personnel to attend the committee meeting as non-voting delegates based on the needs of the matters discussed. It may also summon other personnel related to the meeting proposals to present the situation or express opinions. However, non-member directors do not have the right to vote on the meeting proposals.
Article 35 Members of the Audit Committee shall attend meetings in person and express clear opinions on matters under review. If you are unable to attend the meeting in person for some reason, you should review the meeting materials in advance, formulate clear opinions, record the opinions in the power of attorney, and authorize other members in writing to attend on your behalf. The power of attorney should be submitted to the host of the meeting at the latest before voting at the meeting.
Each audit committee member can be entrusted by at most one member, and the power of attorney must specify the scope and duration of the authorization. If an independent director member is unable to attend the meeting for any reason, he or she shall entrust another independent director member of the audit committee to attend the meeting on his or her behalf.
Article 36 If a member of the Audit Committee neither attends the meeting in person nor entrusts another member to attend the meeting on his behalf, he shall be deemed to have failed to attend the relevant meeting. If a member of the audit committee fails to attend two consecutive meetings, he will be deemed to be unable to properly perform his duties and powers, and the company's board of directors may remove him from his position as a member.
Article 37 Resolutions made by the Audit Committee must be approved by more than half of all members (including members who did not attend the meeting) to be effective. Each member of the Audit Committee shall have one vote.
The voting opinions of the Audit Committee are divided into three types: agree, oppose and abstain.
Article 38: After the chairman of the Audit Committee meeting announces the start of the meeting, he will begin to review the contents of the proposals corresponding to each meeting topic in order.
Article 39 The Audit Committee meeting adopts the rules of centralized deliberation and sequential voting on matters discussed, that is, after all proposals have been reviewed by all members present at the meeting, the proposals will be voted on one by one in accordance with the order of proposal review.
Article 40 Members attending the meeting shall review the proposals and fully express their personal opinions in a serious and responsible manner; members shall be responsible for their personal votes.
Article 41 The voting method at the Audit Committee meeting shall be a show of hands or a written vote, and voting by communication may also be adopted.
Article 42 For the same motion, each participating member can only vote once. If a member attends the meeting on behalf of other members at the same time, if the proxy's voting opinions on the motion are consistent with his own, he or she will vote once, but it will be regarded as two votes; if the proxy's voting opinions on the motion are inconsistent with his or her own voting opinions on the motion, he or she may vote once based on his own opinion and the other's opinion respectively; unless otherwise specified when voting, the voting opinions of the proxy attendee will be deemed to be consistent with the voting opinions of the proxy.
Article 43 The presiding officer of the meeting shall count the voting results of each proposal and announce them on the spot, and the meeting recorder shall record the voting results in the record.
Chapter 6 Meeting Resolutions and Minutes
Article 44: After each proposal obtains the prescribed number of valid votes, a resolution of the Audit Committee will be formed upon announcement by the chairperson of the meeting.
The resolutions of the Audit Committee shall take effect after being signed by the members present at the meeting. No modification or change shall be made to the resolutions of the Audit Committee that have taken effect without following the legal procedures stipulated in laws, regulations, the Articles of Association and these Rules.
Article 45 The members of the audit committee or the secretary of the company's board of directors shall inform the company's board of directors of the relevant information of the meeting's resolutions at the latest on the day after the meeting's resolutions take effect.
Article 46 During the implementation of the resolutions of the Audit Committee, the Chairman of the Audit Committee or other members designated by him shall conduct follow-up inspections on the implementation of the resolutions. If any matters that violate the resolutions are discovered during the inspection, the relevant personnel may be requested and urged to make corrections. If the relevant personnel do not adopt their opinions, the Chairman of the Audit Committee or his designated members shall report the relevant situation to the company's board of directors, who shall be responsible for handling the matter.
Article 47 Audit committee meetings shall have written records. Members attending the meeting shall sign the minutes. Members attending the meeting have the right to request that explanatory records of their speeches at the meeting be recorded in the minutes.
Article 48 The minutes of the audit committee meeting shall at least include the following contents:
(1) The date, place and name of the convener of the meeting;
(2) Names of persons attending the meeting. Those who attend the meeting on behalf of others should be specially noted;
(3) Meeting agenda;
(4) Key points of the committee member’s speech;
(5) The voting method and results of each resolution matter or motion (the voting results should indicate the number of votes in favor, opposition or abstention);
(6) The name of the person who recorded the meeting;
(7) Other matters that should be explained and recorded in the meeting minutes.
Article 49: Audit committee meeting minutes, meeting resolutions, power of attorney and other related meeting materials and other written documents shall be sorted out by the company's board of directors office as company archives and then returned to the company's archives for storage. During the company's existence, the retention period shall not be less than ten years.
Chapter 7 Avoidance System
Article 50 If an individual member of the Audit Committee or his immediate family members, or other companies controlled by an Audit Committee member or his immediate family members, have a direct or indirect interest in the issues discussed at the meeting, the member shall disclose the nature and extent of the interest to the Audit Committee as soon as possible.
Article 51 When the circumstances mentioned in the preceding article occur, interested members shall explain the relevant situation in detail at the audit committee meeting and make it clear that they will abstain from voting. However, if other members of the Audit Committee agree after discussion that such interests will not have a significant impact on the voting matters, the interested members may participate in the voting.
If the company's board of directors believes that it is inappropriate for interested members to participate in the voting in the preceding paragraph, it may revoke the voting results of the relevant proposals and require disinterested members to re-vote the relevant proposals.
Article 52: The Audit Committee meeting shall review proposals and make resolutions without including interested members in the quorum. If the audit committee does not have the minimum quorum to attend the meeting after interested members withdraw, all members (including interested members) shall make resolutions on procedural issues such as submitting such proposals to the company's board of directors for review, and the company's board of directors shall review such proposals.
Article 53 The minutes and resolutions of the audit committee meetings shall indicate that interested members were not included in the quorum and did not participate in the voting.
Chapter 8 Supplementary Provisions
Article 54 If there are any matters not covered in these detailed rules, they shall be implemented in accordance with relevant national laws, regulations, normative documents and the relevant provisions of the Articles of Association. If these detailed rules are inconsistent with the relevant provisions of laws, regulations, normative documents and the Articles of Association, the provisions of the relevant laws, regulations, normative documents and the Articles of Association shall prevail.
Article 55 “Above” in these rules includes the original number.
Article 56 The company’s board of directors is responsible for interpreting and revising these rules.
Article 57 These detailed rules shall become effective and implemented upon review and approval by the company's board of directors, and the same shall apply when revised.