Performance report of the audit and risk committee of the board of directors in 2021
Board of directors:
In accordance with the relevant regulations of China Securities Regulatory Commission and Shanghai Stock Exchange and the requirements of the company’s detailed rules for the implementation of the audit and risk committee of the board of directors and other documents, as the current members of the audit and risk committee of the board of directors of the company, we earnestly perform our duties based on the principle of diligence and responsibility, and now make the following report to the board of directors on the work of 2021:
1、 Basic information of audit and risk committee
The audit and risk committee of the board of directors of Sinochem International Corporation(600500) (holding) Co., Ltd. (hereinafter referred to as “the company”) is composed of three independent directors, Mr. Cheng Fengchao, Mr. Xu Yongqian and Mr. Yang Lin, of which the chairman of the audit and risk committee is an independent director with professional accounting qualifications.
2、 2021 annual meeting of audit and risk committee
During the reporting period, the audit and risk committee of the board of directors of the company held five meetings. All members actively participated in the meeting, expressed due diligence opinions on relevant issues, and signed and confirmed the resolutions of relevant meetings. The details are as follows:
1. The first meeting of the audit committee in 2021 was held on January 26, 2021. The main topics of the meeting were: (1) listen to the report of Ernst & Young Huaming Certified Public Accountants on Sinochem International Corporation(600500) financial report audit and internal control audit plan in 2020.
2. The second meeting of the audit committee in 2021 was held on April 21, 2021. The main topics of the meeting were: (1) listen to the report of Ernst & Young Huaming Certified Public Accountants on the annual audit of the financial statements in 2020; (2) Review the company’s 2020 financial final accounts report; (3) Review the 2020 internal control evaluation report; (4) Review the proposal on the expected external guarantee amount of the company in 2020; (5) Review the proposal on the daily connected transactions of the company in 2020.
3. The third meeting of the audit committee in 2021 was held on April 25, 2021. The main topics of the meeting were: (1) to review the company’s financial report for the first quarter of 2021; (2) Review the proposal on accounting policy adjustment.
4. The fourth meeting of the audit committee in 2021 was held on August 19, 2021. The main topics of the meeting were: (1) review the interpretation of the 2021 semi annual financial report.
5. The fifth meeting of the audit committee in 2021 was held on October 22, 2021. The main topics of the meeting were: (1) review the third quarter report of the company in 2021; (2) To review the proposal on the company’s audit and billing in 2020 and the continued engagement of Ernst & young to provide financial audit and internal control audit services in 2021.
3、 Main work contents of the audit and risk committee in 2021
(I) audit performance of the company’s 2021 Annual Report
During the audit and preparation of the company’s 2021 annual financial report, all personnel of the audit and risk committee of the board of directors of the company gave full play to the role of audit and supervision, actively fulfilled their responsibilities and obligations and performed their duties diligently in strict accordance with the requirements of the notice on the disclosure of 2021 annual report of main board listed companies and the annual report work process of the Audit Committee issued by Shanghai Stock Exchange, It has played an active role in the preparation of the company’s 2021 annual report, and has carried out the following work:
1. Before the external audit institution Ernst & Young Huaming certified public accountants entered the site, the audit and risk committee carefully listened to and reviewed the audit plan for the company’s 2021 annual report of Ernst & Young Huaming certified public accountants, put forward guiding opinions on the audit strategy, and defined the recognition standards of the audit scope, key audit and accounting issues, annual report audit schedule and other related matters.
2. After Ernst & Young Huaming Certified Public Accountants issued the preliminary audit opinion, the audit and risk committee reviewed the company’s 2021 financial report again, fully communicated with the accountants, and fulfilled the duty of meeting and the obligation of integrity and diligence. The Audit Committee believes that the units and reports included in the consolidation scope of the company’s financial and accounting statements are complete and the consolidation basis of the statements is accurate; The contents of the company’s financial and accounting statements are objective, true and accurate, and can fairly reflect the company’s financial position as of December 31, 2021 and its operating results and cash flow in 2021 in all major aspects; Agree to submit the 2021 financial report to the board of directors for review. 3. After reviewing the 2021 financial report audit services provided by Ernst & Young Huaming certified public accountants, the audit and risk committee of the company believes that Ernst & Young Huaming certified public accountants can carry out the audit work in accordance with the audit standards of Chinese certified public accountants, follow the independent, objective and fair practice standards, and successfully complete the audit work of the company.
(II) review of related party transactions
During the reporting period, the audit and risk committee reviewed the proposal on the expected daily connected transactions of the company in 2021 and other related transaction proposals in advance and communicated with relevant personnel.
The audit and risk committee believes that the voting procedures of the above related party transactions comply with relevant regulations, follow the principles of openness, fairness and rationality, meet the needs of the company’s development, there is no transfer of interests, and do not damage the interests of minority shareholders and other non related shareholders.
(III) effective evaluation of the company’s internal control
In 2021, Sinochem International Corporation(600500) internal control evaluation, under the leadership of the board of directors, strengthened the standardization and standardization construction, improved the evaluation organization system, and further clarified the evaluation scope, evaluation methods, evaluation standards, defect identification and rectification requirements. In terms of internal control self-evaluation, “internal control self-evaluation” and “independent evaluation of the audit department” are combined, and the coverage of Sinochem International Corporation(600500) affiliated main units and important business processes reaches 100%.
According to the basic norms of enterprise internal control and relevant supporting guidelines, the company has formulated the management measures for Sinochem International Corporation(600500) internal control evaluation and issued the standard workflow of internal control evaluation. The internal control self-assessment and independent review working group carried out on-site tests according to the above evaluation standards, and finally formed the internal control evaluation manuscript and the summary of internal control defects.
The audit and risk committee believes that the self-evaluation of internal control in 2021 did not find any important and significant defects in the design and implementation of internal control related to financial reporting. As of December 31, 2021, the company’s internal control system related to financial reporting is sound and effective.
(IV) special instructions and opinions on the external guarantee of the company
In accordance with the provisions of the notice on regulating the external guarantee behavior of listed companies issued by the CSRC and the special instructions on the occupation of funds by the controlling shareholders and other related parties of Sinochem International Corporation(600500) (holding) Co., Ltd. issued by Ernst & Young Huaming certified public accountants, the audit and risk Committee of the board of directors carefully reviewed the capital transactions and external guarantee between the company and related parties at the end of 2021, And expressed independent opinions on relevant matters as follows:
1. In this year, the company did not advance salary, welfare, insurance, advertising and other period expenses for the controlling shareholder, nor did it bear costs and other expenses on its behalf; The company did not provide funds directly or indirectly to the controlling shareholders and other related parties.
2. Ernst & Young Huaming certified public accountants Co., Ltd. has issued a special explanation report on the occupation of funds by the company’s controlling shareholders and other related parties. The independent directors of the company believe that the report objectively and fairly reflects the real situation of the company.
3. The company has truthfully provided the details of all external guarantees of the company to Ernst & Young Huaming certified public accountants Co., Ltd. in accordance with the regulations.
4. The external guarantees of the company are reviewed and approved by the board of directors or the general meeting of shareholders and disclosed in time in accordance with relevant management requirements and regulations.
During the reporting period, the audit and risk committee of the board of directors strictly complied with the relevant provisions of the operation guidelines of the audit committee of the board of directors of listed companies of Shanghai Stock Exchange and the detailed rules for the implementation of the audit and risk committee of the board of directors of the company. It was able to fulfill its duties and follow the independent, objective and fair practice standards, and completed all the work assigned by the board of directors. In the new year, the audit and risk committee of the board of directors of the company will continue to be conscientious, live up to its mission and actively perform various responsibilities of the audit and risk committee.
It is hereby reported.
Signature of audit and risk committee: Chairman: Cheng Fengchao member: Yang Lin member: Xu Yongqian
Audit and risk committee of the board of directors of Sinochem International Corporation(600500) (holding) Co., Ltd. April 14, 2022
