Internal Audit Management Rules of ADAMALtd.Contents

Chapter I General Provisions

Chapter II Organization and Personnel

Chapter III Duties and Authorization

Chapter IV Work Procedures

Chapter V Penalties

Chapter VI Supplementary Provisions

Chapter I General Provisions

Article 1 To strengthen the internal audit of ADAMALtd. (hereinafter referred to

as the ‘Company’) establish and improve the mechanism enhance the effectiveness

fully leverage the supervisory and service functions in the business management

promote the implementation of the Company’s strategic planning and operation

workplans ensure the effective operation of rules and the mechanism and

continuously upgrade the efficiency and effectiveness of corporate operations these

rules are hereby formulated in accordance with the Audit Law of the People's

Republic of China and other relevant laws administrative regulations departmental

rules the Listing Rules of the Shenzhen Stock Exchange (hereinafter referred to as the

‘Listing Rules’) the Shenzhen Stock Exchange Listing Rules No. 1 – Standardized

Operation of Companies Listed on the Main Board and in conjunction with the

Articles of Association of ADAMA Ltd. (hereinafter referred to as the ‘Articles of

Association’).Article 2 The internal audit referred to in these Rules encompasses two core

functions namely supervision and service. Guided by the Company’s strategic

development transformation and innovation goals the internal audit should be

conducted through independent and objective verification evaluation and

recommendations to promote the effective implementation of major decisions and

deployments made by the Party and the State as well as the Company’s strategic

1development plans. It also fosters compliant operations and enhances management

effectiveness thereby providing robust oversight guarantees and service support for

the achievement of the Company’s strategic targets and its high-quality development.Article 3 These Rules apply to the company and its subsidiaries within the scopeof the consolidated financial statements (hereinafter referred to as “the Company’svarious departments and subsidiaries”). When applying these Rules overseas

subsidiaries shall strictly comply with the laws and regulations of the respective

countries or regions.Chapter II Organization and Personnel

Article 4 The Company establishes an internal audit department which shall be

subject to the leadership and supervision of its Party Committee and accountable to

the Board of Directors.The internal audit department shall report to the Audit Committee of the Board

and be subject to its supervision and guidance. In case that any significant issue or

lead concerning the Company is uncovered the department shall immediately report

directly to the Audit Committee. The Audit Committee shall participate in the

assessment of the head of the internal audit department.Article 5 The company shall appoint sufficient audit personnel as required to

ensure the smooth conduct of audit work. Internal auditors shall possess the

fundamental qualities required for the audit role including relevant proficiencies

strong organizational and coordination skills research and investigation capabilities

comprehensive analytical skills professional judgement and written communication

proficiency. They shall be familiar with the Company’s business operations and

internal controls and shall continuously maintain and enhance their professional

competence through continuous learning. They shall demonstrate sound professional

ethics adhere to principles maintain objectivity and impartiality uphold integrity and

self-discipline perform their duties diligently and strictly observe confidentiality.Article 6 Auditors shall perform their duties in accordance with the law and shall

be protected by law. No institution or individual may refuse or obstruct auditors in the

performance of their duties. No retaliation against auditors is permitted.Article 7 To ensure the objectivity and impartiality of audits any conflict of

interest between any auditor and the audited entity or the subject matter of the audit if

there is any shall be proactively disclosed to the internal audit department prior to the

commencement of the audit project. Participation in the project may only continue

2after such disclosure has been reviewed and approved.

Auditors shall not participate in activities that may compromise their

independent performance of duties nor shall they interfere with or intervene in the

regular production operational or management activities of the audited entity.Chapter III Duties and Authorizations

Article 8 The internal audit department shall conduct its work in accordance with

the annual work plan and meet any unplanned requirements including but not limited

to supervisory inspections such as economic responsibility audits strategic and

operational execution audits internal control audits and specialized audit projects. It

shall issue audit reports urge audited units to carry out audit recommendations and

follow up on the completion of rectification measures for identified issues.Article 9 The internal audit department shall specifically perform the following

functions:

(1) Formulate the annual audit work plan in accordance with the Company’s

development strategy and management requirements.

(2) Fulfill internal audit duties in accordance with regulatory requirements such

as the Shenzhen Stock Exchange's ‘Self-Regulatory Guidance No. 1 for Listed

Companies – Standardized Operations for Companies Listed on the Main Board’;

coordinate audit resources and organize audit projects based on the approved annual

audit plan including but not limited to economic responsibility audits strategic

execution and operational audits internal control audits and specialized audits; issue

audit reports oversee the implementation of audit recommendations by audited

entities and monitor the completion of rectification for identified issues.

(3) Organize and implement internal control evaluations and track the

rectification of identified deficiencies.

(4) Oversee the establishment of the Company’s non-compliance accountability

system and conduct related accountability work.

(5) Coordinate and facilitate audit cooperation with SASAC the National Audit

Office and the shareholding entity.

(6) Oversee the development of the Company’s audit management mechanism

institutional frameworks and team building.

(7) Handle other audit matters as required by the Company’s Party Committee

3Audit Committee the management team and the shareholding entity.

(8) Actively cooperate and provide necessary support and collaboration when the

Audit Committee communicates with external audit entities such as accounting firms

and national audit authorities.Article 10 In the course of performing its duties the internal audit department

shall possess the following rights:

(1) To obtain relevant materials within the responsibility scope of each functional

department as the basis for formulating audit plans and conducting preliminary

research for audit projects.

(2) To attend relevant company meetings and convene meetings concerning audit

matters.

(3) To obtain query permissions for all company business systems to inspect

various digital data and materials in real time.

(4) Request audited entities to provide materials concerning development plans

strategic decisions major measures internal controls risk management financial

management etc. including digital data and relevant documentation. it shall have the

right to examine the security reliability and cost-effectiveness of the audited entity’s

information systems. Audited entities shall not refuse delay or misrepresent

information.The responsible person of the audited entity shall be accountable for the

timeliness authenticity and completeness of the materials provided by their entity.In case that the audit body requires verification of relevant circumstances from

the audited entity after conducting a comprehensive analysis of obtained electronic

data and other materials the audited entity shall cooperate accordingly.

(5) Investigate relevant issues pertaining to audit matters with concerned entities

and individuals and obtain supporting evidence. Such entities and individuals shall

support and assist to truthfully reflect circumstances and furnish relevant supporting

materials.

(6) Promptly report halt and propose recommendations for ongoing activities

that constitute serious violation of national laws and regulations company policies or

harm the Company’s interests.

(7) During audits the audited entity shall not transfer conceal alter or destroy

financial and accounting records nor business or management documents related to

financial receipts and expenditures. It shall not transfer conceal or intentionally

damage assets held that were acquired in violation of national regulations.The auditor shall have the authority to halt any violation of this provision by the

audited entity and upon approval to temporarily seal such materials.

4(8) To propose corrective measures and handling of illegal or non-compliant

conduct as well as recommendations for management improvements and enhanced

performance.

(9) Issue public reprimands or recommend accountability measures against

audited entities and personnel responsible for illegal activities or causing losses and

wastage.

(10) Propose commendations to the Company’s Party Committee Board of

Directors (or the principle and major leader) for audited entities and individuals

demonstrating strict compliance with financial regulations significant economic

benefits and outstanding contributions.

(11) Exercise other rights prescribed by laws regulations and rules.

Chapter IVWork Procedures

Article 11 The internal audit department shall implement audit procedures in

accordance with the professional standards including but not limited to the following

aspects:

(1) Formulate an annual audit plan and conduct internal audit work based on the

approved version. Resource allocation for the audit plan shall be clarified and

confirmed prior to the beginning of the year with clear arrangements for audit

personnel assigned to each project.

(2) Prior to the implementation of an audit project conduct thorough pre-audit

investigations to comprehensively understand the basic information of the audited

entity and relevant laws and regulations formulate an audit plan and submit it for

approval.

(3) Deliver audit notifications to the relevant audited entities in advance. In

exceptional circumstances with approval from the Company’s Party Committee

Board of Directors (or the major responsible leader) the notification may be delivered

upon commencement of the audit.

(4) Pursuant to the audit plan appropriate procedures shall be duly executed to

carry out the audit gather evidence secure documentation prepare working papers

and fulfill all requisite sign-off steps. a.

(5) Prepare the audit report based on the working papers and form a draft for

consultation; seek feedback from the audited entity where necessary. Upon

completion of the above process submit the audit report for approval and issuance by

the Company’s major responsible person.

5(6) Issue the Audit Rectification Notice in accordance with management

directives and monitor the audited entity’s implementation of corrective measures.The rectification work shall be executed in compliance with the requirements outlined

in the Audit Rectification Procedures of Sinochem Holdings.

(7) Feedback audit findings to relevant business management departments which

shall serve as the crucial basis for performance evaluation rewards penalties and

standardized management to enhance the use of audit outcomes.Article 12 Audit documents shall be promptly filed assigned to designated

personnel to ensure proper management and regular handover.Article 13 Unless otherwise stipulated by laws and regulations the internal audit

department shall conduct inspections at least once every six months on the following

matters issue inspection reports and submit them to the Audit Committee:

(1) Implementation of major events including the use of raised funds provision

of guarantees related party transactions securities investments and derivatives

trading provision of financial assistance purchase or disposal of assets and external

investments.

(2) Significant fund flows within the Company and fund flows involving board

directors senior management controlling shareholders actual controllers and their

related parties.Article 14 The internal audit department shall report to the Audit Committee at

least quarterly covering matters including but not limited to the implementation of the

internal audit plan and issues identified during internal audit. An annual internal audit

report shall be submitted to the Audit Committee at the close of each financial year.Chapter V Penalties

Article 15 Where an audited entity violates these Rules by refusing or delaying

the provision of materials relevant to the audit matters or by providing materials that

are untrue or incomplete or by refusing or obstructing the inspection investigation or

verification of relevant circumstances the Company shall order rectification and may

issue a public reprimand or warning. Where rectification is refused responsibility

shall be pursued in accordance with the Company’s management policies.Article 16 Where an audited entity violates these Rules by transferring

concealing falsifying or destroying financial accounting or other materials

pertaining to financial receipts and expenditures. or by transferring concealing or

intentionally damaging assets held in violation of national or company regulations

6the internal audit department may in accordance with the Company’s management

policies propose disciplinary actions against directly responsible supervisors and

other directly liable personnel to the audited entity or refer the matter to the

disciplinary inspection department and relevant competent authorities for handling.Where such acts constitute a criminal offence criminal liability shall be pursued in

accordance with the law.Article 17 Where the audited entity’s financial receipts and expenditures violate

laws administrative regulations or company provisions the internal audit department

may in accordance with the Company’s management policies propose disciplinary

actions against the directly responsible supervisors and other directly liable personnel

to the audited entity or refer the matter to the disciplinary inspection department and

relevant competent authorities for handling. Where such acts constitute a criminal

offence criminal liability shall be pursued in accordance with the law.Article 18 Any retaliation or malicious framing of audit personnel shall be

subject to disciplinary action in accordance with the Company’s management policies.Where such acts constitute a criminal offence criminal liability shall be pursued in

accordance with the law.Article 19 Where audit personnel abuse their authority engage in malpractice for

personal gain neglect their duties or disclose state secrets work secrets commercial

secrets or personal privacy that have come to their knowledge they shall be subject

to disciplinary action in accordance with the Company’s management policies. Where

such acts constitute a criminal offence criminal liability shall be pursued in

accordance with the law.Chapter VI Supplementary Provisions

Article 20 The internal audit department shall be responsible for interpreting

these Rules.Article 21 These Rules shall come into effect on the date of the approval by the

Board of Directors.

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