The Board of Directors, as the Company’s highest governance body, is fully responsible for the establishment, improvement, and effective implementation of the internal control system. The Board of Directors has set up an Audit Committee, which is responsible for supervising and coordinating internal and external audit work and evaluating the effectiveness of the internal control system. The Audit Committee directly leads the internal audit department, and the internal audit department reports to and is accountable to the Board of Directors and the Audit Committee. The Internal Audit Department, in strict accordance with laws, regulations, and the Company’s related management policies, conducts systematic audit supervision annually on the operating activities, asset security, economic efficiency of each department, subsidiary, and branch company, as well as the design and implementation of internal control, risk management policies, anti-commercial bribery, and anti-corruption policies, to ensure the effective implementation of the internal control system. For internal control deficiencies discovered during the review process, the Internal Audit Department urges relevant responsible departments to formulate specific corrective measures, specify the correction timeline, and supervises the implementation of corrective measures through follow-up audits on internal control, ensuring the effective establishment and standardized operation of the internal control system. In addition, the Company has set up an overseas Internal Audit Department to go deep into the front line of overseas projects, implement international standard governance actions on the financial basis of overseas project entities (including shareholding entities), and supervise the whole process of overseas project bidding and operation.

As a key mechanism of the corporate governance system, internal audit not only effectively ensures the implementation of internal control and risk management, but also provides important support for the Board of Directors to perform supervisory responsibilities and improve the scientific decision-making, effectively maintaining the compliance, robustness and sustainability of the Company’s overall operations. In order to lay a solid foundation for the operation of the internal control system, the Company has systematically formulated and implemented relevant internal control policies, including the Group Internal Control Management Manual, Internal Audit System, Related Party Transaction Internal Control and Decision-making System, Regulations on the Management of Raised Funds, etc., which provide a solid institutional guarantee for the standardized and efficient operation of the internal control system, and further demonstrate the cornerstone role of internal audit in improving corporate governance, strengthening risk management and control, and ensuring the healthy development of the Company.