Organization and Operation of Internal Audit Department

Organization and Operation of Internal Audit Department

1. The internal audit unit of our company is an independent department, with one audit manager overseeing its operations. The department reports directly to the Board of Directors.

2. The audit personnel are prohibited from holding concurrent positions that may create conflicts of interest or impede their independence. They are expected to carry out their duties with utmost independence, objectivity, and fairness. They are also required to provide regular reports on audit activities to the Audit Committee and the Board of Directors.

3. The Head of Internal Audit is authorized to assign internal audit personnel to carry out internal audit work for the Company and its subsidiaries as required by business needs.

The responsibilities of internal audit include:

1. The execution of the audit plan The internal audit unit of the company develops and executes the annual audit plan, which is approved by the board of directors before the end of each year. The audit plan is designed based on risk identification and compliance with relevant laws and regulations. Special audit projects may be conducted as needed. The purpose of these audits is to provide management with insights into the functioning of internal controls and to recommend improvements. The internal audit unit also tracks the implementation of improvement recommendations by relevant departments or units.

2. The supervision of self-assessment of internal controls is carried out by the internal audit unit. The internal audit unit provides regular supervision and oversight of the self-assessment of internal controls conducted by subsidiary companies and various departments. They review the self-assessment reports submitted by these units and consolidate the results to provide a comprehensive assessment. This assessment is then presented to the Board of Directors as a reference for issuing the internal control statement. 3. Supervision of subsidiary companies The internal audit unit assists and supervises the implementation of internal control systems in subsidiary companies. It ensures that subsidiary companies are included within the scope of internal audits, tracking the progress of improvement initiatives, and reviewing the results of their self-assessment of internal controls.