Xuan Wu Cloud Technology Holdings Limited

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 2392)

AUDIT COMMITTEE
TERMS OF REFERENCE

Constitution
1. The board (the "Board") of directors (collectively, the "Directors" and individually, a "Director") of Xuan Wu Cloud Technology Holdings Limited (the "Company", which together with its subsidiaries, the "Group") has established an Audit Committee (the "Committee") with authority, responsibility, and specific duties as described below.
 

Members
2. The Committee shall comprise not less than three Directors, all of whom shall be non￾executive Directors and the majority of whom shall be Independent Non-executive Directors. At least one of the Committee members shall be an Independent Non￾executive Director with appropriate professional qualifications or accounting or related financial management expertise as required under the Listing Rules.
3. A former partner of the Company's auditing firm should be prohibited from acting as a member of the Committee for a period of two years from the date of his ceasing to be a partner of the firm or to have any financial interest in the firm, whichever is later.
4. The chairperson of the Committee shall be appointed by the Board and shall be an Independent Non-executive Director.
5. The secretary of the Committee shall be the Company's company secretary or any person designated as such by the Committee from time to time.
 

Proceedings
6. The quorum for meetings of the Committee shall be any two of its members.
7. The chairperson of the Committee may convene meetings at his discretion, but in any event meetings of the Committee are to be held not less than two times every year, or at such frequency as required under the Listing Rules or other regulatory requirements applicable to the Company from time to time. In addition, the Company's external auditors may request a meeting of the Committee if they consider that is necessary.
8. The Chief Financial Officer of the Company, and a representative of the Company's external auditors shall normally attend meetings of the Committee. However, at least once a year the Committee shall meet with the external and internal auditors without executive Directors present.
9. The meetings and proceedings are governed by the provisions of the Articles of Association of the Company for regulating the meetings and proceedings of the Board so far as the same are applicable.
 

Annual general meetings
10. The chairperson of the Committee (or in his/her absence, his/her duly appointed delegate) shall attend the Company's annual general meetings and be prepared to respond to any Shareholders' questions on the Committee's activities.
 

Authority
11. The Committee is authorised by the Board to investigate into any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
12. The Committee shall be provided with sufficient resources to perform its duties and is authorised by the Board to obtain outside legal or other independent professional advice at the Company's expense and to secure the attendance of any person with relevant experience and expertise at Committee meeting as it considers appropriate.
 

Responsibility
13. The Committee was established to assist the Board to provide an independent review of the effectiveness of the financial reporting process, risk management and internal control systems of the Group, to oversee audit process, to oversee the environmental, social and governance ("ESG") matters and to perform other duties and responsibilities as assigned by the Board.
 

Duties
14.19 to review arrangements which employees of the Company can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal control or other matters. The Committee shall ensure that proper arrangements are in place for fair and independent investigation of these matters and for appropriate follow-up action;
14.20 to act as the key representative body for overseeing the Company's relations with the external auditors; and
14.21 to consider other matters as referred to the Committee by the Board.
 

Miscellaneous
15. Minutes of meetings of the Committee shall record in sufficient detail the matters considered and decisions reached, including any concerns raised by Directors or dissenting views expressed and shall be kept by the secretary to the meetings of the Committee and the Company's company secretary and shall be open for inspection at any reasonable time on reasonable notice by any Director. The secretary to any meeting of the Committee shall circulate the minutes of the meeting of the Committee for which he has acted as secretary in draft and final forms to all members of the Committee within a reasonable time after such meeting is held.
16. The Committee shall report back to the Board on its decisions or recommendations, unless there are legal or regulatory restrictions on its ability to do so.
17. The Committee shall make available these terms of reference by inclusion on the websites of the Company and The Stock Exchange of Hong Kong Limited in order to explain its role and the authority delegated to it by the Board.