China Shenhua strictly complies with laws and regulations such as the Anti-Unfair Competition Law of the People's Republic of China, insists on compliant operation and fair competition, and opposes any form of commercial bribery, money laundering, monopoly, and unfair competition. We strictly require all employees and suppliers to adhere to commercial ethics. The Company possesses a comprehensive management and supervision mechanism for commercial ethics. It has established the Commercial Ethics System (Trial) that clarifies the standards of commercial ethics for all stakeholders, including suppliers, which, after being audited and ratified by the management, has been officially published. Furthermore, the Company has revised the Internal Audit Management Regulations to explicitly incorporate the establishment and implementation of commercial ethics standards into the scope of audit supervision, and to clearly delineate that a comprehensive audit for all subsidiaries is required at least once every three years.
The Company's internal audit oversees both the Company and its subsidiaries through routine supervision, special supervision and inspections, and annual evaluations of internal controls. The audit scope includes financial income and expenditure, economic activities, internal control, risk management, compliance management, and anti-corruption commercial ethics management. The Company’s Audit Department conducts audits on internal controls and risk management for all the policies and standards of the Company. In accordance with regulations, the Audit Department carries out a comprehensive audit and a review on annual evaluations of internal controls for all subsidiaries at least once every three years. These audits and reviews cover the establishment and implementation of commercial ethics standards applicable to suppliers.
To strengthen the management and supervision of commercial ethics, the Company took targeted measures in 2022 to arrange a special audit examining the development and implementation of commercial ethics standards. This targeted audit involved eight key production and operational units including China Shenhua Headquarters and Shendong Coal among others. The main areas of focus for the audit included the formulation of commercial ethics standards, supplier management, customer management, management of insider information, complaint handling, accountability, and training, covering various business sectors such as coal, railway, port, and shipping. The supplier management audit covered suppliers of materials, equipment, project construction, and services. Upon completion, an audit investigation report was produced.
