Huaneng Power International Inc(600011) : Huaneng Power International Inc(600011) annual work report of the audit committee of the board of directors in 2021, the audit committee of the board of directors of the company performed its duties faithfully, diligently and prudently in accordance with the principles of objectivity, impartiality and independence in strict accordance with the standards for the governance of listed companies, the articles of association and the working rules of the audit committee of the board of directors and other systems, and successfully completed all the work deployed by the board of directors.
1、 Basic information of the audit committee
In 2021, the audit committee of the 10th board of directors of the company has five members, namely: Mr. Zhang Xianzhi, Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Xia Qing. All of them are composed of independent directors of the board of directors of the company, and Mr. Zhang Xianzhi is the chairman. The five independent directors are well-known experts and scholars from finance, law, economy, enterprise management and power industry, all of whom have rich professional knowledge and industry or enterprise management experience.
2、 Performance of audit committee
In 2021, the audit committee of the board of directors held 8 meetings (4 regular meetings and 4 temporary meetings) to consider 31 proposals. All members actively participated in the meeting and conscientiously performed their duties: To review the authenticity, accuracy and integrity of the financial information regularly reported by the company; Supervise the implementation of the internal control system and evaluate its effectiveness; Identify the work arrangement, expense budget and audit results of the external auditor and the internal audit department in each period; Review the list of related parties and review the daily related party transactions; Carefully listen to various special reports and timely understand the relevant regulatory developments and changes in laws and regulations in the place of listing; Put forward suggestions on the prevention and control of fraud risk of the company; Audit the company’s information disclosure and the quality of accounting information, and no fraud or suspected fraud was found. Through telephone communication and paying attention to the company’s dynamic information, the members have an in-depth understanding of the company’s production and operation and development planning, and made suggestions for the company’s high-quality development. Members of the Committee devoted enough time and energy to fulfill the responsibilities of the audit committee with diligence.
3、 Check the company’s regular financial reports
The audit committee held regular meetings on March 22, April 26, July 26 and October 25, 2021 to review the company’s annual, first quarter, semi annual and third quarter financial reports. After listening to the audit report of the external auditor on the company’s financial report, the audit committee fully communicated with the management on the preparation of the financial report and key matters, reviewed the authenticity, accuracy and integrity of the company’s financial report from a professional perspective and whether it complies with relevant accounting standards, and submitted the review results to the board of directors in writing for deliberation, so as to provide judgment basis for the decision-making of the board of directors.
4、 Coordinate and supervise the internal audit department and external auditors to perform their duties
During the reporting period, the audit committee reviewed the annual work plan of the company’s internal audit department and external auditors, gave guidance on relevant audit arrangements and key work, and confirmed the qualification and independence of external auditors. The audit committee shall regularly listen to the progress report of the audit work, adjust the audit plan according to the actual and management needs of the company, guide the next stage of work, and urge the internal audit department and external auditors to fully and effectively perform their duties.
The audit committee reviewed and approved the current internal and external audit expenses. In 2021, the annual capital budget of the company’s internal audit was 860000 yuan, and the actual implementation was 529300 yuan; The total budget of the audit fees of external auditors at the beginning of the year was 49.36 million yuan (including 34.58 million yuan for the audit of financial statements and 5.78 million yuan for the internal control audit), and the actual use was 416907 million yuan (including 335432 million yuan for the audit of financial statements and 5.78 million yuan for the internal control audit).
5、 Guide and inspect the company’s internal control
In 2021, the audit committee reviewed and approved the company’s annual internal control self-assessment report, and continued to pay attention to and guide the internal control work. During the reporting period, the company successfully completed the 12-month daily evaluation of internal control, and randomly inspected the quality of internal control evaluation of Companies in various regions. Combined with the actual work, the company strengthened the on-site inspection of internal control for high-risk units, deployed rectification and self inspection and self correction, and carried out special supervision on key issues to ensure that all internal control risks are controllable and under control. Organize and carry out special training on internal control, constantly strengthen the concept of internal control, improve the quality of internal control team, and continuously optimize the internal control environment. The company revised the internal control objective assessment management measures, and strictly carried out objective assessment to realize the closed-loop management of internal control and ensure the smooth operation of the internal control system. External auditors have issued unqualified audit reports on internal control standards for 16 consecutive years. In addition, the audit committee also regularly communicates with relevant personnel of the office of the board of directors, the management department, the legal and compliance management department, the party masses work department and other functional departments of the company, as well as the company’s auditors and lawyers to understand the implementation of internal control. The Audit Committee believes that the company has maintained the effectiveness of internal control in all major matters in accordance with the relevant laws and regulations of the place of listing, and no major internal control defects are found. The company’s internal control system is sound and implemented effectively.
6、 Performance of other duties conferred by laws and regulations
During the reporting period, in addition to reviewing and supervising the financial report, the audit committee also reviewed the company’s profit distribution plan, the proposal on the appointment of annual auditors, the annual budget report, the company’s external guarantee, the fraud risk assessment report of senior managers and the board of directors, and made independent and objective judgments from a professional perspective, which provided an important basis for the scientific management and compliance operation of the board of directors.
By reviewing the proposal on confirming the list of related parties of the company, the proposal on adding the daily connected transaction quota between the company and Huaneng Group in 2021 and the proposal on daily connected transaction between the company and Huaneng Group in 2022, the Audit Committee believes that the list of related parties of the company is complete and accurate, and all connected transaction proposals are conducive to the long-term development of the company and do not infringe on the interests of minority shareholders. 7、 Improve the ability to perform duties and give full play to the supervision function
During the reporting period, all members of the audit committee thoroughly studied and implemented the securities law and the opinions of the State Council on further improving the quality of listed companies, actively participated in regulatory training, and timely learned about the laws and regulations of the listing place and the new trends of supervision. Make use of the regular communication mechanism with lawyers in the three places of the company to fully evaluate the applicability of the company’s system and ensure the standardized operation of the Committee and that there are rules to follow for the development of all work. Insist on communicating with external auditors at least five times a year to understand the changes of accounting standards at home and abroad in detail. Through continuous communication and learning, the ability of members to perform their duties has been further improved. Set up fraud reporting telephone and mailbox to regularly understand the development of the company’s anti fraud work. Through the supervision of the company’s production and operation and the decision-making process of major matters, the decision-making support role of the Committee has been brought into full play.
In 2022, the audit committee will continue to perform various duties entrusted by laws and regulations, work conscientiously and diligently, strengthen communication with the management, functional departments, external auditors and the company’s legal counsel, pay close attention to the changes of laws and regulations and new regulatory requirements in the place of listing, earnestly safeguard the legitimate rights and interests of the company and all shareholders, and constantly promote the level of corporate governance to a new level.
Audit Committee of the board of directors March 22, 2022
