Elite Color Environmental Resources Science&Technology Co.Ltd(002998) : performance report of the audit committee of the board of directors in 2021

Elite Color Environmental Resources Science&Technology Co.Ltd(002998)

Performance report of the audit committee of the board of directors in 2021

In accordance with relevant laws and regulations, the regulatory rules of the CSRC and the Shenzhen Stock Exchange, the articles of association of Youcai Environmental Resources Technology Co., Ltd., the working system of the audit committee of the board of directors and other normative documents, during the reporting period, the audit committee of the board of directors of the company (hereinafter referred to as the “Audit Committee”) actively carried out various work based on the principle of diligence and responsibility. Now, the performance of duties in 2021 is reported as follows:

1、 Basic information of the audit committee

The audit committee of the company is composed of three members, including one chairman and two members. From the beginning of 2021 to November 15, 2021, the audit committee of the second board of directors of the company is composed of Zhu Xiangjun (independent director), fan Yongming (independent director) and Dai Mengxi (director), and the chairman is Zhu Xiangjun, an accounting professional. On November 15, 2021, the company held the first meeting of the third board of directors and elected the members of the special committee of the third board of directors. The audit committee of the third session of the board of directors is still composed of Zhu Xiangjun, fan Yongming and Dai Mengqian, with accounting professional Zhu Xiangjun as the chairman.

2、 Meetings of the audit committee of the board of directors of the company

In 2021, the audit committee held three meetings. All members attended the meeting and gave audit opinions, as follows:

Date of the meeting and resolutions on matters considered

1. Proposal on profit distribution of the company in 2020

2. Proposal on reappointment of the company’s audit institution in 2021

Case

Audit by the board of directors 3. Report on the company’s financial statements in 2020 and 2021

Proposal of the Committee on the annual financial budget report in April 2021

On the 18th of the first meeting in, it was unanimously agreed to discuss 4. On confirming the company’s daily connected transactions in 2020

Proposal on Implementation

5. About the expected daily related party transactions of the company in 2021

Yi’s proposal

6. Proposal on 2020 annual report of the company

7. On bank credit of the company and its subsidiaries in 2021

Proposal on quota

8. Discussion on the evaluation report of internal control in 2020

Case

9. On the deposit and use of raised funds in 2020

Proposal on special report on the situation

10. Proposal on the first quarter report of 2021

1. Full text and summary of the company’s 2021 semi annual report

Proposal to be

Board Audit

On August 2, 2021, the committee made a proposal on the special report on the deposit and actual use of the raised funds in the half year of 2021 and agreed on the 27th day of the second meeting of the year

Discuss

3. Discussion on the profit distribution plan for the half year of 2021

Case

Board Audit

The committee unanimously agreed to the proposal on the third quarter report of 2021 on October 22, 2021

3、 Main performance of the audit committee

(I) supervise and evaluate the work of external audit institutions

1. The audit committee discussed and negotiated with the external auditors in advance to determine the scope, schedule and work plan of the audit team of the company’s 2020 financial report. After the auditors entered the site, they had continuous and sufficient communication with the person in charge of the audit project on the possible risks and audit priorities that the audit paid attention to; Carefully listened to and considered the periodic report on the annual audit of Dahua Certified Public Accountants (special general partnership), and reported to the board of directors after considering the preliminary audit opinion issued by Dahua Certified Public Accountants (special general partnership).

2. Analyze and summarize the work of external accountants. The Audit Committee believes that the accountant performing the annual audit does not work in the company, there is no direct or indirect mutual investment with the company, there is no close business relationship, and there is no correlation between the members of the audit team and the decision-making level of the company. The audit team has the necessary professional knowledge and relevant ability to undertake the audit business, and is competent for the audit work.

3. Evaluate the independence and professionalism of external audit institutions. The Audit Committee believes that Dahua Certified Public Accountants (special general partnership) is qualified to engage in securities related business, abides by the professional standards of independence, objectivity and impartiality in the audit of the company, and can complete all the work entrusted by the company with diligence, prudence and responsibility. After deliberation and voting, the audit committee proposed to the board of directors of the company to continue to employ Dahua Certified Public Accountants (special general partnership) as the external audit institution of the company in 2022.

(II) review the company’s financial report and express opinions

During the reporting period, the audit committee carefully reviewed the company’s financial report and believed that the company’s financial report was true, accurate and complete, fairly reflected the company’s financial status, operating results and cash flow in all major aspects, and the company did not have fraud, fraud and material misstatement related to the financial report.

(III) evaluate the effectiveness of internal control

The audit committee has carefully reviewed the company’s internal control work report for 2020 and believes that the company has established a relatively perfect corporate governance system and effective internal control system in accordance with the company law, securities law and other laws and regulations as well as the relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange. During the reporting period, the company strictly implemented various laws and regulations, the articles of association and the internal control system, and the board of directors, the board of supervisors and the management standardized the operation, effectively protecting the legitimate rights and interests of the company and shareholders, especially small and medium-sized shareholders.

The audit committee supervises and guides the daily operation of the company’s audit department and believes that the actual operation of the company’s internal control meets the requirements of the governance norms of listed companies issued by the CSRC.

(IV) coordinate the communication between the management, internal audit department and relevant departments and external audit institutions

During the reporting period, the audit committee maintained communication with the board of directors and actively coordinated the daily contact and work cooperation between the financial director, the internal audit department and Dahua Certified Public Accountants (special general partnership), ensuring the smooth progress of the audit work.

4、 Overall evaluation

In 2021, the audit committee conscientiously complied with the articles of association, the working system of the audit committee of the board of directors and other relevant provisions, diligently and dutifully performed the duties and obligations related to the annual audit, and ensured the efficient and smooth progress of the annual audit of the company. During the reporting period, the audit committee gave full play to its role in reviewing, supervising and guiding financial reports, external audit institutions and internal audit, earnestly fulfilled the responsibilities and obligations of the audit committee, and promoted the effective operation of the company’s internal control system.

Members of the Audit Committee: Zhu Xiangjun, fan Yongming, Dai Mengqian

April 14, 2022

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