Shanghai Zhenhua Heavy Industries Co.Ltd(600320) : performance report of the audit committee of the board of directors in 2021

Shanghai Shanghai Zhenhua Heavy Industries Co.Ltd(600320) (Group) Co., Ltd

2021 performance report of the audit committee under the board of directors

The audit committee of the board of directors of the company is a special working organization under the board of directors. In accordance with the relevant provisions of the detailed rules for the implementation of the audit committee of the board of directors issued by China Securities Regulatory Commission, Shanghai Stock Exchange and the company, the audit committee has fulfilled its audit and supervision responsibilities in the company’s regular reports, related party transactions and other aspects based on the principle of diligence. The main work contents are as follows:

1、 Supervise and evaluate the work of external audit institutions

Since 2016, the company has hired Ernst & Young Huaming Certified Public Accountants (special general partnership) (hereinafter referred to as Ernst & Young) as a domestic audit institution. It is satisfied with the audit work and practice quality of Ernst & Young in 2021, and can follow the relevant principles of objectivity and independence in the audit process, providing better services for the company. His work is meticulous and serious, his work results are objective and fair, and he can express relevant audit opinions in a practical and realistic manner.

2、 Supervision and evaluation guidance on the construction of the company’s internal control system

During the reporting period, the audit committee of the board of directors gave full play to the role of professional committees, actively promoted the construction of the company’s internal control system, strengthened and improved the evaluation management of the company’s internal control, and supervised and guided the company to complete the self-evaluation of internal control.

3、 Performance of annual report audit in 2021

Carefully reviewed the audit plan and internal audit control schedule of Ernst & Young in 2021, and carefully negotiated with the certified public accountants on the annual audit plan and internal audit control of the company in 2021.

4、 Strengthen the review of related party transactions

During the reporting period, we reviewed a number of related party transactions, believed that related party transactions followed the principles of fair, voluntary and reasonable transactions, which was conducive to the company’s expansion of new business, optimization of asset structure, benefits for the company and did not affect the independence of the company, and expressed our consent. In 2022, the audit committee will continue to give full play to the supervision function of the audit committee, strengthen communication with the company’s management and audit institutions, promote the construction of the company’s internal control, pay close attention to the company’s production and operation, and effectively safeguard the legitimate rights and interests of all shareholders, especially small and medium-sized shareholders.

Audit Committee: Bai Yunxia, Zhao Zhanbo, Zhang Hua, Sheng leiming Shanghai Shanghai Zhenhua Heavy Industries Co.Ltd(600320) (Group) Co., Ltd. April 13, 2022

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