Audit Supervision

Audit Supervision

Audit system establishment

The Company has a total of 32 effective systems related to auditingincluding 21 auditing systems such as the Administrative Measures forAuditing(《审计工作管理办法》8accountability systems such as themplementation Measures for the Accountability for lllegal Operations andnvestments(《违规经营投资责任追究实施办法》)and3working systemsof the Supervisory Committee such as Rules of Procedure for SupervisoryCommittee(《监事会议事规则》)and established a relatively perfect auditsystem.

In 2022, the Company further improved the supporting accountabilitysystem and formulated the lmplementation Rules for the Management ofBusiness Archives for State-owned Assets Supervision and Accountabilitywhich provides institutional quarantee for the scientific and systematicmanagement and utilization of business archives for supervision andaccountability, effectively raising the level of accountability work for illegaloperation and investment, improving efficiency of work and strengtheningthe application of results.

Audit mechanism improvement

In 2022 the Company facilitated audit management reforms with a focuson strengthening its centralized and unified control capability, and built acentralized and unified audit management system with full coverageauthority and efficiency. To strengthen the centralized and unifieoeadership of audits, enterprises at all levels set up a leading group of auditstrictly implemented the working mechanism of reporting to the Board ofDirectors and accepted the supervision and evaluation of the audit and riskmanagement committee. Adhering to the unified coordination system ofaudits, the affiliated enterprises had all their audit plans reviewed andapproved by higher audit organizations, and reported the appointment ofthe person in charge of audit to the higher audit organization for approvalTo promote innovations in reforming audit management, an integratedaudit management mechanism was established, with the audit departmentin charge of"management" and the audit center in charge of“auditing" TheCompany implement differential assessment of audit agencies. The auditedentities and peer business departments do not participate in theperformance evaluation of the internal audit agencies and their principalsThe internal audit agencies and their principals are jointly evaluated by thesuperior audit agency and the audit work leading group at the same level.

Continuous improvement to audit informatization

The Company implemented the requirements of technology-based auditingand empowered smart auditing through intelligent upgrading. The Auditnformation System 2.0 were developed and launched, enabling full connectionwith the Company's information systems, such as financial sharing, costmanagement, material management and investment management, andoasically realizing a diqitized auditing mode that features integration of multipleprofessions, analysis from multiple perspectives, and use of combined methods.