沙隆达B：2010年年度报告(英文版) 2011-03-18(17)

沙隆达B：2010年年度报告(英文版) 2011-03-18

Company, was generally in line with relevant laws and statutes of the state as well as requirements from supervisory ministry, neither there were serious defaults in internal control system, nor no serious warp in actual progress of implement, and was able to fit for demand of operation and management as well development of the Company; the key control activities of the Company were launched stringently according to rules of various internal control systems of the Company. The internal control over shareholding subsidiaries, affiliated transactions, external guarantee, and use of raised proceeds, significant investments and information disclosure was strict, sufficient and effective, which assured normal running of operation and management of the Company. Independent directors of the Company hoped that the Company would gradually improve internal control, put forward the development of all work of internal control of the Company and continuously promote management of the Company.

3. Establishment and implementation of internal control system on financial report of the Company

In accordance with laws, administrative rules and regulations of Ministry of Finance of the State Council of PRC established defined work for accounting post which was separated and counter-control and counter-supervise and Post Responsibility System was conducted in the Company. Financial system clearly defined person on drafting financial report acted as GL accountant, audit accountant perform responsibility of review and supervision for accounting information and materials of accounting document, accounting book and so on. Once the accounting policies and accounting estimates were approved by the Company, it shall not be alter at discretion. Financial accounting adopted UFIDA software reviewed and approved by Ministry of Finance that is strict in accounting process, accurate in articulation and scientific and completed on the procedure of financial report. With the help of UFIDA software, the Company implemented target control, efficient collection, analysis and handling of data that achieve a favorable operation for successively over 10 years. Moreover, on the aspect of internal audit system of the Company, the Company established internal audit department to conduct internal audit supervision for financial incomings and outgoings of the Company. There was neither significant omission in the financial report 2009, no significant faults in financial report 2010. In the reporting period, all members of Audit Committee accomplished their responsibilities and submitted relevant explanation in writing; independent directors earnestly performed duties of diligence and faithfulness, cared for production and operation conditions of the Company, communicated with administration authorities, carried out field work, intently paid attention to information confidentiality in preparation of annual report, prevent reveal of inside information, behavior of insider trading and other laws-breaking and laws-forbidden actions from happening. Independent opinions were distributed for guaranteed particulars, related transactions and significant events.

At present, internal control system of annul financial report of the Company operates well. In the reporting period, there’s no significant defect in financial report in respect of internal control.

V. Special campaigns for corporate governance improvement

The Company has seriously carried out the spirit of CSRC for special campaigns for corporate governance improvement, further strengthened the sense of standardized operation, brought Board of Directors, Supervisory Committee and Shareholder’s