CHONGQING RURAL COMMERCIAL BANK CO., LTD. (a joint stock limited company incorporated in the People's Republic of China with limited liability)
* The Bank holds a financial licence number B0335H250000001 approved by China Banking Regulatory Commission and was authorised by the Administration for Industry and Commerce of Chongqing to obtain a corporate legal person business licence with a registration number
500000000001239. The Bank is not an authorised institution in accordance with the Hong Kong Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking/deposit-taking business in
Hong Kong.
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Chapter 2 Composition of the Audit Committee Article III The Audit Committee is composed of 3 to 5 non-executive directors, and the majority of the members shall be independent non-executive directors.Each independent non-executive director on the Audit Committee shall have the professional qualifications and skill in the field of accounting or relevant financial management. Any person who has been a former partner, shareholder or professional employee of the Bank's existing accounting firm shall be prohibited from acting as a member of the Audit Committee within the period of 1 year from the date of his ceasing to be a partner, shareholder or professional employee of the said accounting firm.
Article IV Members and the chairman of the Audit Committee shall be nominated by the chairman of the Board of Directors and be appointed by the Board of Directors. Article V The Audit Committee shall have a chairman who is an independent non- executive director, and the chairman of the Audit Committee shall be responsible for presiding over the Audit Committee's work. Article VI The Audit Committee's term of office shall be identical to that of the Board of Directors; each member of the Audit Committee may be re-elected upon expiration of his term. During the term, should any member ceases to be the Bank's director, or loses his independency as an independent non-executive director as required by the Articles, he shall be automatically removed from the Audit Committee, and the Board of Directors shall appoint a new member of the Audit Committee to fill the vacancy in accordance with provisions from Article III to Article V above. Article VII The Office of the Board of Directors shall be responsible for the day to day work of the Audit Committee. Chapter 3 Duties and Authority Article VIII The main duties and authority of the Audit Committee are as follows:(1) to supervise the internal control of the Bank, examine and evaluate the compliance of major operating activities of the Bank;
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(2) to review major financial policies of the Bank and its implementation, supervise the financial operational condition, monitor the truthfulness of the financial report and the effectiveness of the implementation of financial reporting procedures by the management;
(3) to supervise and evaluate the internal auditing work of the Bank, and the internal audit system and its implementation of the Bank;
(4) to propose the appointment or change of external auditors, supervise the work of external auditors by adopting appropriate measures, and ensure the independence of audit work;
(5) to review the annual audit report, half-year financial reviewing report, other financial accounting reports and other financial information of the Bank prepared by external auditors required to be disclosed, and prepare judgment reports as to their truthfulness, accuracy and completeness, and submit to the Board of Directors for consideration;
(6) to coordinate the communications between internal audit department and external auditors;
(7) to ensure the employees to raise concerns on possible improprieties in financial reporting, internal control or any other aspect, and procure the Bank to carry out fair and independent investigations and appropriate follow up actions for such matters;
(8) other relevant powers prescribed by securities regulatory authorities in the place where shares of the Bank are listed and relevant laws and regulations;
(9) other relevant powers vested by the Board of Directors.
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Article XI Where the Board of Directors disagrees with the Audit Committee's view on the selection, appointment, resignation or dismissal of an external auditor, the Audit Committee shall arrange for the corporate governance report in the annual report to include an explanation of the different views of the Board of Directors and the Audit Committee and the reasons why they have taken different views. Article XII The Audit Committee shall make available this Terms of Reference on the website of the stock exchanges in the place where the shares of the Bank are listed and the Bank's website, explaining its roles and authorities delegated by the Board of Directors. Article XIII The Audit Committee shall be accountable to the Board of Directors, and its proposals and reports shall be submitted to the Board of Directors for discussion. Chapter 4 Procedures of Decision Making Article XIV The office of the Board of Directors shall be responsible for collecting from the Bank's relevant departments of their statements or reports on major financial information which reflects the Bank's operation, internal control, risk management and other aspects and shall submit them to the Audit Committee for review.The Audit Committee has the right to make inquires to the reporting departments in relation to the materials so provided.
Article XV The Audit Committee shall comply with the relevant laws, regulations, administrative rules, and provisions of the Articles, and appoint intermediaries such as external auditors or internal auditing department to set up an audit plan based on the Bank's actual conditions. Article XVI The Audit Committee may, in accordance with the established audit matters and corresponding audit plan, instruct intermediaries such as an accounting firm to participate in the audit and to give professional advice; the Audit Committee may instruct the Bank's internal auditing department to conduct the audit, or jointly conduct the audit with such internal auditing department. Article XVII When the Audit Committee instructs intermediaries such as external auditors or internal auditing department to conduct the audit, the auditees shall initiatively cooperate with the auditor and provide necessary space and conditions for the work of the auditor.- 4 -
Article XVIII Where an intermediary such as external auditor or internal auditing department is instructed by the Audit Committee to conduct the audit, it shall submit the audit report to the Audit Committee. It shall ask the advice from the auditee before the submission of audit report. Article XIX The Audit Committee shall have preliminary review on the audit report, raise advice or suggestions to the Board of Directors for consideration, and report the same to the senior management and the Board of Directors of Supervisors. Chapter 5 Rules of Procedures Article XX The Audit Committee may hold a meeting at any time as required by its work and a notice of meeting shall be given to all members of the Audit Committee 5 days prior to the meeting. Article XXI The Audit Committee shall meet with the external auditor at least twice a year without presence of any executive directors. Article XXII Each meeting of the Audit Committee shall be held only at the presence of more than two-thirds (including two-thirds) of its members. Each member has one vote at the meeting, and any resolution at the meeting shall be passed only when more than half of all the members vote in favor of it. Article XXIII The Audit Committee's meetings are generally held in the form of on- site meeting with voting by a show of hands or open vote, or when required, in the form of signing a written circular with voting by correspondence; each member shall write on the meeting's resolution to clearly state whether he/she accepts, objects or abstains from voting for the resolution and then signs it. Article XXIV The Audit Committee may invite the Bank's directors, supervisors and other senior management, or the intermediaries to sit in on the Audit Committee's meetings, and to ask questions to the persons who sit in on the meetings if necessary. Article XXV The procedures for holding the Audit Committee's meetings, the way of voting, and passing of resolutions shall comply with relevant laws, regulations, administrative rules, and provisions of the Articles and this Terms of Reference. Article XXVI Where the Audit Committee's meetings concerns involve any AuditCommittee member's interest, such member shall withdraw.
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Article XXVII The issues for consideration in a Audit Committee meeting shall be delivered to the Audit Committee members at a reasonable time before the date of the meeting held by the Audit Committee. Minutes shall be taken on each on-site meeting of the Audit Committee, and all members and recorders present at each such meeting shall sign the minutes of the meeting, which shall be kept in accordance with the file management system of the Bank. Article XXVIII The resolution and result of voting at each meeting of the AuditCommittee shall be submitted in writing to the Board of Directors.
Article XXIX Each Audit Committee member present at any meeting has the obligation to keep confidential of the matter discussed at the meeting, and shall never disclose any relevant information without authorization. Chapter 6 Supplementary Articles Article XXX The Terms of Reference shall take effect from the date on which it is passed by the Board of Directors' resolution. Article XXXI Any matter not covered by the Terms of Reference, or in the event that the Terms of Reference conflict with any laws, regulations, or administrative rules promulgated and revised by the State later, such laws, regulations, administrative rules or the Articles shall prevail. Article XXXII The Board of Directors shall reserve all rights to revise and interpret thisTerms of Reference.
Note: In case there are any discrepancies between the Chinese version and the English version of this
Terms of Reference, the Chinese version shall prevail.
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