Hubei Energy Group Co.Ltd(000883)
Internal audit management system
Chapter I General Provisions
Article 1 in order to strengthen the internal audit of Hubei Energy Group Co.Ltd(000883) (hereinafter referred to as the company), build a centralized, unified, comprehensive, authoritative and efficient audit supervision system, improve the quality of internal audit and give full play to the role of internal audit, in accordance with the Audit Law of the people’s Republic of China and the provisions of the National Audit Office on internal audit This system is formulated by the state owned assets supervision and Administration Commission of the State Council in accordance with the Interim Measures for the administration of internal audit of central enterprises, the implementation opinions on deepening the internal audit supervision of central enterprises and other relevant laws and regulations, as well as the Hubei Energy Group Co.Ltd(000883) articles of association and other rules and regulations.
Article 2 the term “internal audit” as mentioned in this system refers to the activities of the internal audit institution to implement independent and objective supervision, evaluation and suggestions on the financial revenue and expenditure, economic activities, internal control and risk management of the unit and its subordinate units, so as to promote the organization to improve governance and achieve objectives.
Article 3 this system is applicable to the headquarters of the company and all wholly-owned and holding subsidiaries. Chapter II internal audit organization and personnel management
Article 4 establish and improve the internal audit leadership system under the direct leadership of the Party committee and the board of directors. The Party committee and board of directors (or executive director) of the company and its subsidiaries shall strengthen the leadership of internal audit, continuously improve and improve the system and working mechanism of Party committee leading internal audit, and strengthen the top-level design, overall coordination and supervision of major internal audit work. The board of directors (or executive director) is responsible for reviewing (or approving) the basic internal audit system, audit plan and important audit reports, deciding on the establishment of internal audit institutions and their principals, and strengthening the management of important internal audit matters such as problem rectification and team construction. The Secretary of the Party committee and the chairman (or executive director) are specifically in charge of internal audit and are the first responsible person for internal audit. The management accepts and actively cooperates with the internal audit supervision, and implements the rectification of the problems found in the internal audit. Article 5 the audit and risk management committee shall be established under the board of directors of the company to formulate the working rules of the audit and Risk Management Committee of the board of directors.
The company’s internal audit department is the daily office of the audit and risk management committee and the centralized management department of the company’s internal audit. According to the Hubei Energy Group Co.Ltd(000883) detailed rules of work of the audit and Risk Management Committee of the board of directors, the audit and Risk Management Committee of the company is responsible for the communication between internal audit and external audit, proposing to hire or replace external audit institutions, supervising the company’s internal audit system and its implementation, and putting forward opinions on the due diligence and work assessment of internal auditors.
Article 6 when guiding and supervising the internal audit, the Party committee of the company shall perform the following main responsibilities:
(i) Be responsible for implementing the important resolutions, decisions and requirements of the Party Central Committee and relevant departments at higher levels on audit work, and study and put forward opinions and measures on implementation; （2） Study and review the company’s audit rules and regulations, institution construction plan, internal audit development plan and annual audit work plan;
（3） Study and make decisions on major issues and matters related to national audit and cooperation, review important reports such as feedback report for comments, audit rectification plan and its situation report, and supervise and inspect the implementation and effective closure of problems found in audit;
（4） Listen to the company’s internal audit report, review important audit reports, study and judge the serious, sensitive, complex and influential important issues found in the audit, and put forward decision-making opinions and suggestions on relevant disposal and accountability;
（5） Study and solve other important matters related to audit.
Article 7 the company shall establish a general auditor. The general auditor of the company assists the Party committee and the board of directors in managing internal audit.
Article 8 the Audit Department of the company is responsible for the centralized management of the company’s audit affairs, and is responsible for and reports to the Party committee and the board of directors of the company under the direct leadership of the chief auditor.
Article 9 subsidiaries shall establish and improve the internal audit system in accordance with the requirements of relevant laws and regulations and the system, and in combination with the actual situation of the company, and clarify the leadership system, organizational structure, responsibilities and authorities, staffing, fund guarantee, application of audit results, etc. of internal audit work.
Article 10 an important secondary subsidiary in the field of large assets, complex business, high degree of marketization and high risk shall set up an independent internal audit institution or full-time auditors. Subsidiaries without independent internal audit institutions shall specify the centralized management department of internal audit affairs and set up full-time and part-time auditors.
Article 11 the company shall, according to work needs, allocate internal auditors suitable for asset scale and audit business volume. The internal auditors shall have the necessary professional knowledge and professional ability for the audit position, and the person in charge of the internal audit institution shall have the qualification of senior professional and technical title.
The superior internal audit institution shall express opinions or make suggestions on the recommendation, appointment and removal of the person in charge of the lower internal audit institution. The appointment, removal and annual performance evaluation results of the person in charge of the lower internal audit institution shall be reported to the superior internal audit institution for the record.
Article 12 the company supports and guarantees the internal audit institutions to carry out continuing education through various channels, encourages the internal auditors to participate in relevant practice qualification examinations, strengthens the personnel exchange between the audit and business departments, and widens the career development channel of the internal auditors.
Article 13 the company shall ensure that the internal audit institutions and internal auditors perform their duties independently in accordance with laws and regulations, and no unit or individual shall retaliate.
Article 14 when engaging in internal audit, internal audit institutions and internal auditors shall strictly abide by laws and regulations, these systems and professional norms of internal audit, be loyal to their duties, and be independent, objective, impartial and confidential.
Internal audit institutions and internal auditors shall not participate in work that may affect the independent and objective performance of audit duties.
Article 15 according to work needs, internal audit institutions may purchase audit services from the public or hire internal and external professionals to participate in internal audit work in accordance with relevant systems and regulations, and be responsible for the audit results adopted.
Article 16 the funds required by an internal audit institution to perform its duties shall be included in the financial budget and guaranteed.
Article 17 the company may commend and reward the internal audit institutions and personnel who are loyal to their duties, adhere to principles, perform their duties seriously and make remarkable achievements.
Social intermediaries or external professionals who have made remarkable achievements in discovering major problems, making major audit reductions, and recovering major economic losses for the company can be given appropriate rewards after being confirmed by the internal audit institution and submitted to the chairman of the board of directors and the Secretary of the Party committee of the company for approval. Chapter III responsibilities and authorities of internal audit
Article 18 an internal audit institution shall perform the following duties in accordance with the relevant provisions of the state and the requirements of the unit:
(i) Be responsible for formulating internal audit management system and relevant implementation rules;
（2） Be responsible for preparing the medium and long-term internal audit work plan and annual work plan of the unit;
（3） Audit the implementation of Party and state policies, key tasks of state-owned enterprise reform and state-owned assets supervision policies by the unit and its affiliated units;
（4） Audit the development plans, strategic decisions, major measures and the implementation of annual business plans of the unit and its affiliated units;
（5） Audit the financial revenue and expenditure of the unit and its affiliated units;
（6） Audit the fixed assets and other investment projects of the unit and its affiliated units; （7） Audit the performance of natural resource asset management and ecological environment protection responsibilities of the unit and its affiliated units;
（8） Audit the overseas institutions, overseas assets and overseas economic activities of the unit and its affiliated units;
（9） Audit the economic management and benefits of the unit and its affiliated units; （10） Audit the internal control, compliance and risk management of the unit and its affiliated units;
（11） Audit the economic responsibility of the main principals of the affiliated units;
（12） Assist the principal of the unit to supervise and urge the implementation of the rectification of the problems found in the audit;
（13） Accept the supervision and guidance of SASAC, the National Audit Office and other regulatory authorities; （14） Guide, supervise and manage the internal audit work of affiliated units; （15） Undertake the coordination and cooperation between the national audit and the audit supervision of relevant superior departments, and provide relevant materials and other necessary work support for the national audit or the audit supervision of relevant superior departments according to relevant regulations;
（16） Other work assigned by relevant national regulations, regulations of relevant superior departments, relevant system regulations of the company and leaders of the company.
Article 19 an internal audit institution shall have the following authorities:
(i) The auditee is required to timely submit relevant materials such as development planning, strategic decision-making, major measures, internal control, risk management, financial revenue and expenditure (including relevant electronic data and query authority of open computer information system, the same below);
（2） Participate in relevant meetings of the unit and hold meetings related to audit matters; （3） Participate in the study and formulation of relevant rules and regulations and put forward relevant suggestions;
（4） Check the data and documents related to financial revenue and expenditure, economic activities, internal control and risk management, as well as the physical objects of on-site investigation;
（5） Check the information about the computer system and its electronic data;
（6） Conduct investigations and inquiries with relevant units and individuals on Relevant Issues in audit matters and obtain relevant supporting materials;
（7） Report the ongoing serious violations of laws and regulations, serious losses and waste to the main person in charge of the unit in time, and make a temporary stop decision with consent;
（8） Have the right to temporarily seal up accounting vouchers, accounting books, accounting statements and materials related to economic activities that may be transferred, concealed, tampered with or destroyed; （9） Put forward suggestions on illegal behaviors and management improvement;
（10） Circulate a notice of criticism or put forward suggestions on accountability for the audited units and personnel who violate laws and regulations and cause losses and waste;
（11） For auditees and individuals who strictly abide by financial and economic regulations, have remarkable economic benefits and outstanding contributions, they can put forward commendation suggestions to the Party committee and the board of directors of the company. Chapter IV requirements for internal audit
Article 20 the internal audit of the company shall be organized, implemented and managed in accordance with the principle of “unified control, hierarchical responsibility, comprehensive coverage and highlighting key points”.
The Audit Department of the company is responsible for organizing and implementing the economic responsibility audit of the main leaders of the secondary subsidiaries, and the secondary subsidiaries are responsible for organizing and implementing the economic responsibility audit of the main leaders of the subsidiaries at all levels, and reporting the relevant audit results to the Audit Department of the company.
The Audit Department of the company is responsible for the final accounts audit of the company’s investment decisions and capital construction projects. If necessary, the company may authorize the internal audit institution of the subsidiary to implement.
Article 21 the Audit Department of the company shall strengthen the unified control of the internal audit of the whole company, and be responsible for commanding the audit planning, annual audit plan, audit standards, personnel deployment and achievement sharing of the whole company.
Article 22 an internal audit institution shall fully perform its duties of internal audit supervision, establish and improve the database of audit objects, reasonably determine the scope, content and frequency of audit in accordance with the relevant provisions of the state, the internal audit management requirements of relevant superior units, and in combination with its own risk control needs, standardize the implementation of various audit supervision, so as to ensure that all audits should be done and all audits must be strict, Achieve full coverage of audit supervision.
(i) Ensure that the subsidiaries are reviewed in turn at least once every 5 years.
（2） Carry out key audits on major investment projects, major risk areas and important subsidiaries to ensure that they are conducted at least once a year.
（3） For key overseas operation and investment projects (with an investment of more than US $100 million) or important overseas enterprises (Institutions), audit shall be conducted at least once a year.
（4） The performance of economic responsibilities of the main leaders of subsidiaries shall be audited at least once during their term of office.
Article 23 an internal audit institution shall highlight key points on the basis of full audit coverage. Strengthen the follow-up audit of major policies and measures, major investment projects, key special funds and major emergencies; Adhere to the problem and risk orientation, and strengthen the audit frequency and intensity for units and leading cadres with high risk, many problems and large reflection.
If the internal audit institution finds major defects or risks in internal control during the audit process, it shall timely report to the Party committee of the company and the audit and Risk Management Committee of the board of directors.
Article 24 the Audit Department of the company shall strengthen the overall management of audit projects and audit organization methods, strengthen the integration of audit resources, improve the overall efficiency of audit supervision, supervise the implementation of each audit project according to the arrangement of the annual audit work plan, and transfer relevant professional and technical personnel of the Department and subsidiaries to participate in the audit work when necessary, And establish a talent pool of audit professionals for scientific management.
Article 25 the auditee and the auditees of economic responsibility audit shall actively cooperate with the work of the internal audit institution and provide relevant materials in a timely manner. No unit or individual may set up obstacles or obstruct audit, resort to fraud or conceal information, restrict the provision of materials required for audit to internal audit institutions, open the query authority of computer information system or provide relevant business support.
The principal of the auditee shall be responsible for the authenticity, completeness and accuracy of the materials provided by the auditee.
Article 26 internal audit institutions shall strengthen audit quality control, improve audit timeliness and audit quality through the institutionalization, standardization and informatization of audit business, and ensure the standardized management and orderly flow of audit information. The Audit Department of the company shall regularly inspect and evaluate the performance and audit quality of the internal audit institutions of the subsidiaries.
Article 27 the internal audit institution of a subsidiary shall report the annual audit plan, annual audit work report, audit report and rectification to the Party committee and board of directors (or executive director) of the company, and timely report to the Audit Department of the company for filing.
The internal audit institution of the subsidiary shall timely report to the Party committee and the board of directors (or executive director) of the company the clues of major asset losses, major defects in internal control, major risks and major violations of discipline and law found in the audit, and report to the Audit Department of the company at the same time. Chapter V main working procedures of internal audit
Article 28 internal audit procedures mainly include audit plan preparation, audit project organization and implementation, audit rectification and inspection, audit file management and other procedures.
Article 29 the Audit Department of the company shall focus on the work center of the unit, clarify the audit objectives and key points in accordance with the requirements of relevant laws and regulations, prepare the annual audit plan of the unit, and submit it to the Party committee and the board of directors of the company for deliberation and approval.
Once the annual audit plan is approved, it shall not be changed without authorization. If necessary, the audit department shall report to the Secretary of the Party committee and the board of directors of the company
