Sany Renewable Energy Co., Ltd

The system of selection and employment of accounting firms

Chapter I: General Provisions

Article 1 In order to standardize the selection and appointment (including re-employment, change and dismissal, the same below) of accounting firms of Sany Renewable Energy Co., Ltd. (hereinafter referred to as the "Company") and effectively safeguard the interests of the Company and its shareholders, in accordance with the Company Law of the People's Republic of China, the Administrative Measures for the Selection and Employment of Accounting Firms by State-owned Enterprises and Listed Companies, the Code of Governance for Listed Companies, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Self-Regulatory Guidelines for Listed Companies on the Shanghai Stock Exchange No. 1 - Standardized Operation, and other relevant laws and administrative regulations, departmental rules, normative documents and the relevant provisions of the Articles of Association of Sany Renewable Energy Co., Ltd. (hereinafter referred to as the "Articles of Association"), combined with the actual situation of the company, this system is formulated.

Article 2 The selection of accounting firms in this system refers to the act of employing accounting firms to issue audit opinions and audit reports on financial and accounting reports in accordance with the requirements of relevant laws and regulations.

If a company hires an accounting firm to engage in other statutory auditing business other than the audit of financial accounting reports, it may be implemented in accordance with this system.

Article 3 The selection of an accounting firm by the company shall be reviewed and approved by the audit committee of the board of directors, submitted to the board of directors for deliberation, and decided by the general meeting of shareholders.

Article 4 The controlling shareholder and actual controller of the company shall not designate an accounting firm to the company, and shall not interfere with the independent performance of audit duties by the audit committee, the board of directors and the general meeting of shareholders.

Chapter II Practice Quality Requirements for Accounting Firms

Article 5 The accounting firm selected by the company shall meet the following conditions:

(1) It has the status of an independent legal person, and has the professional qualifications required to carry out securities and futures-related business as prescribed by the national industry authorities and the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"), and has been reported to the China Securities Regulatory Commission and relevant competent departments for the record;

(2) Have a fixed workplace, a sound organizational structure and a sound internal management and control system;

(3) Familiar with national laws, regulations and policies related to financial accounting;

(4) Certified public accountants and project implementation teams that complete audit tasks and ensure audit quality;

(5) Conscientiously implement the laws, regulations and policies related to financial auditing, and have a good social voice

reputation and practice quality records;

(6) The certified public accountant who is responsible for the audit of the company's financial statements and signs the company's audit report has not been subject to administrative punishment by the certified public accountant regulatory agency for illegal practice of securities and futures in the past three years;

(7) Be able to keep confidential the company's information and business secrets that they are aware of;

(8) Comply with national laws and regulations and other conditions stipulated by the China Securities Regulatory Commission and the Shanghai Stock Exchange.

Chapter III Procedures for Selecting and Hiring Accounting Firms

Article 6 The following institutions or persons may submit a proposal to the board of directors of the company to hire an accounting firm:

(1) The audit committee of the company;

(2) More than half of the company's independent directors or more than one-third of the company's directors;

(3) The board of supervisors of the company.

Article 7 The audit committee of the company is responsible for the selection and appointment of accounting firms and supervises the implementation of their audit work. The Audit Committee shall earnestly perform the following duties:

(1) To formulate policies, procedures and related internal control systems for the selection and appointment of accounting firms in accordance with the authorization of the Board of Directors;

(2) Propose to start the work related to the selection and appointment of accounting firms;

(3) Review the selection documents, determine the evaluation elements and specific scoring criteria, and supervise the selection and recruitment process;

(4) Propose the proposed selection of an accounting firm and audit fees, and submit it to the decision-making body for decision;

(5) To supervise and evaluate the audit work of accounting firms;

(6) Submit to the Board of Directors on a regular basis (at least once a year) an evaluation report on the performance of the employed accounting firm and a report on the performance of the supervisory duties of the Audit Committee;

(7) Responsible for laws, regulations, the Articles of Association and other matters related to the selection and appointment of accounting firms authorized by the board of directors.

Article 8 The company shall adopt competitive negotiation, public bidding, invitation to bid and other selection and employment methods that can fully understand the competence of the accounting firm to ensure that the selection and employment work is carried out fairly and impartially.

Where competitive negotiation, open bidding, invitation to bid and other open selection methods are adopted, the selection and employment documents shall be released through public channels such as not limited to the company's official website, and the selection and employment documents shall contain basic information on the selection and employment, evaluation elements, specific scoring criteria, and other content. The company shall determine the selection and employment documents in accordance with the law, and the accounting firm shall submit the application

The response time of documents ensures that the accounting firm has sufficient time to obtain the selection information and prepare the application materials. The company shall not restrict or exclude potential accounting firms with unreasonable conditions, and shall not tailor the selection conditions for individual accounting firms. The results of the selection shall be announced in a timely manner, and the content of the publicity shall include the accounting firm to be selected and the audit fee.

Article 9 The general procedures for the selection and appointment of accounting firms by the company are as follows:

(1) The company's finance department carries out preliminary preparation, investigation, data collation, etc.;

(2) Where competitive negotiation, public bidding, invitation to bid and other public selection methods are adopted, the selection documents shall be released through the company's official website and other public channels, and the selection documents shall contain basic information on the selection and employment, evaluation elements, specific scoring standards, etc.;

(3) The accounting firm participating in the selection shall submit the application documents and other relevant information to the company's finance department within the specified time, and the finance department shall conduct a preliminary review and submit the preliminary selection results to the audit committee in the form of a written report;

(4) The audit committee shall review the qualifications of the accounting firm and evaluate the application documents submitted by it. After being reviewed and approved by more than half of all members of the Audit Committee, the relevant proposal to select an accounting firm will be submitted to the Board of Directors for deliberation. The evaluation elements of the selection and appointment of an accounting firm shall at least include the audit fee quotation, the qualification of the accounting firm, the practice record, the level of quality management, the work plan, the allocation of human and other resources, the level of information security management, and the level of risk-bearing capacity;

(5) The board of directors deliberates on the proposal for the selection of an accounting firm approved by the audit committee, and after the board of directors deliberates and approves, submits it to the general meeting of shareholders for deliberation and timely fulfills the obligation to disclose relevant information;

(6) If the general meeting of shareholders deliberates and approves the proposal to appoint an accounting firm, the company shall sign an audit business agreement with the relevant accounting firm for a period of one year and may be renewed.

Article 10 The audit committee may investigate the practice quality and integrity of the accounting firm to be selected by reviewing the practice quality data of the relevant accounting firms, consulting public information or inquiring with the securities regulatory, financial, auditing and other departments and the Institute of Certified Public Accountants, and may require the accounting firm to be selected to make on-site statements when necessary.

Article 11 The company shall refine the evaluation criteria for the selection and appointment of accounting firms, evaluate the application documents of accounting firms, and record and keep the evaluation opinions of the personnel participating in the evaluation.

The company shall evaluate and score each valid application document separately, and summarize the scores of each evaluation element. Among them, the weight of the score of the quality management level should not be less than 40%, and the score of the audit fee quotation

The weight should not be higher than fifteen percent.

Article 12 When evaluating the quality management level of an accounting firm, the company shall focus on evaluating the quality management system and its implementation, including policies and procedures for project consultation, resolution of differences of opinion, project quality review, project quality inspection, identification and rectification of quality management defects.

Article 13 When selecting and hiring an accounting firm for the next year, the audit committee shall make a comprehensive and objective evaluation of the completion of the audit work of the accounting firm for the current year and the quality of its practice. If the audit committee reaches an affirmative opinion, it shall be submitted to the board of directors and the general meeting of shareholders for deliberation; If a negative opinion is formed, it shall be submitted to the board of directors to request the general meeting of shareholders to rehire an accounting firm.

Article 14 When the company evaluates the audit fee quotation of accounting firms, it shall take the average value of the audit fee quotation of all accounting firms that meet the requirements of the selection documents as the benchmark price for selection and employment, and calculate the audit fee quotation score according to the following formula:

Audit fee quotation score = (1-|selection benchmark price - audit fee quotation|/selection benchmark price) × the weight score of the audit fee quotation element.

In principle, the company shall not set a maximum price limit when selecting an accounting firm, and if it is really necessary to set it, it shall explain the basis and reasonableness of the determination of the maximum price in the selection documents.

Article 15 During the term of employment, the company and the accounting firm may reasonably adjust the audit fees according to the changes in the consumer price index, the average social wage level, as well as the changes in the scale and complexity of the business.

If the audit fee decreases by more than 20% compared with the previous year, the company shall explain the amount, pricing principle, change and reason for the audit fee for the current period in the information disclosure document as required.

Article 16 If the audit project partners and signatory certified public accountants have actually undertaken the company's audit business for five years, they shall not participate in the company's audit business for five consecutive years. Due to changes in the work of audit project partners and signatory certified public accountants, the period of providing audit services to the company in different accounting firms shall be calculated together.

In the event of a major asset restructuring or spin-off and listing of a subsidiary, and the audit project partners and signatory certified public accountants who provide audit services to the company are not changed, the period for which the relevant audit project partners and signatory certified public accountants provide audit services before and after the material asset restructuring or the spin-off and listing of the subsidiaries shall be calculated on a consolidated basis.

The audit project partners and signatory certified public accountants shall be calculated together for the audit service period before and after the company's listing. If the audit project partner or the signatory certified public accountant undertakes the initial public offering of shares or the public offering of shares to unspecified targets and the listing audit business, the period of continuous audit business shall not exceed two years after listing.

Chapter IV Procedures for Changing Accounting Firms

Article 17 In principle, the company shall change the accounting firm when the following circumstances occur:

(A) collusion with other audit units, false recruitment;

(2) The accounting firm subcontracts or subcontracts the audit project undertaken by it to other institutions;

(3) There are major defects in the quality of the accounting firm's practice, or the audit report does not meet the requirements of the audit work, and there are obvious audit quality problems;

(4) The accounting firm responsible for the audit of the company's periodic reports delays the audit work, affects the disclosure time of the company's periodic reports, or the auditors and time arrangements make it difficult to ensure that the company fulfills its information disclosure obligations on time;

(5) The accounting firm's circumstances have changed, and it no longer has the qualifications, filing conditions or ability to undertake relevant business, resulting in its inability to continue to perform its obligations in accordance with the audit business agreement;

(6) The accounting firm requests the termination of the audit business of the company;

(7) Other laws, regulations, the China Securities Regulatory Commission or the Shanghai Stock Exchange stipulate that the accounting firm shall be changed.

Except for the circumstances mentioned in this article, the company shall not rehire an accounting firm that performs the annual report audit business without reason during the audit of the annual report.

Article 18 If the company intends to change the accounting firm, it shall complete the selection and employment before the end of the fourth quarter of the audited year.

Article 19 When the audit committee examines the proposal to rehire an accounting firm, it shall make an appointment with the predecessor and the accounting firm to be hired, carefully investigate the practice quality and integrity of the accounting firm to be hired, make a reasonable evaluation of the practice quality of both parties, and issue audit opinions on the basis of judging the adequacy of the reasons for the reappointment, and submit them to the board of directors and the general meeting of shareholders of the company for deliberation.

Article 20 When deliberating the proposal to change the accounting firm, it shall be deliberated by a special meeting of independent directors and submitted to the board of directors for deliberation after being approved by more than half of all independent directors.

Article 21 After the board of directors deliberates and passes the proposal to change the accounting firm, it shall issue a notice of the general meeting of shareholders and notify the former accounting firm and the accounting firm to be hired in writing to attend the meeting. If the former accounting firm deems it necessary to state its opinions at the general meeting of shareholders, the company shall provide convenient conditions for the former accounting firm to present its opinions at the general meeting of shareholders.

Article 22 If the company intends to change the accounting firm, it shall disclose the situation of the previous accounting firm

and the audit opinion of the previous year, the reasons for the change of accounting firms, and the communication with former and former accounting firms.

Article 23 If an accounting firm takes the initiative to terminate the audit business of the company, it shall notify the audit committee in writing in advance. The Audit Committee shall consult the relevant accounting firm for details of the reasons and make a written report to the Board of Directors. The company performs the change procedure in accordance with the relevant regulations.

Chapter V: Supervision

Article 24 The company shall disclose the service years and audit fees of the accounting firm, the audit project partners, the signatory certified public accountants and other information in the annual financial final accounts report or annual report. The company shall disclose the evaluation report on the performance of the accounting firm and the report on the audit committee's performance of the supervision duties of the accounting firm every year as required.

Article 25 The Audit Committee shall maintain a high degree of caution and concern for the following circumstances:

(1) Change of accounting firm after the balance sheet date and before the issuance of the annual report, change of accounting firm for two consecutive years, or change of accounting firm multiple times in the same year;

(2) The accounting firm to be hired has been subject to multiple administrative penalties in the past three years due to the quality of its practice, or multiple audit projects are being placed on file for investigation;

(3) The original audit team is to be hired and transferred to another accounting firm;

(4) During the term of employment, the audit fee has changed significantly compared with the previous year, or the transaction price of the selected appointment is significantly lower than the benchmark price;

(5) The accounting firm fails to substantively rotate the partners of the audit project and the signing certified public accountant as required.

Article 26: Companies and accounting firms shall raise awareness of information security, strictly abide by national laws and regulations on information security, conscientiously implement the regulatory requirements of regulatory departments for information security, and earnestly assume the main responsibility for information security and the responsibility for confidentiality. When selecting and hiring, the company should strengthen the review of the accounting firm's information security management capabilities, set up separate clauses in the audit business agreement to clarify the responsibilities and requirements for information security protection, and strengthen the control of confidential and sensitive information when providing documents to the accounting firm, so as to effectively prevent the risk of information leakage.

Article 27 The company shall properly archive and store the selection, application, evaluation, employment documents and related decision-making materials, and shall not forge, alter, conceal or destroy them. Documentation is kept for a period of at least 10 years from the date of completion of the selection process.

Chapter VI Supplementary Provisions

Article 28 The matters not covered in this system shall be implemented in accordance with the provisions of relevant national laws, regulations, normative documents and the Articles of Association. If this system conflicts with the laws, regulations, normative documents promulgated by the state in the future or the Articles of Association amended by legal procedures, it shall be implemented in accordance with the provisions of the relevant national laws, regulations, normative documents and the Articles of Association.

Article 29 This system shall come into force and be implemented from the date of approval by the board of directors of the company, and the same shall apply when it is amended.

Article 30 The board of directors of the company is responsible for the interpretation of this system.