POWERCHINA (hereinafter referred to as the "Company"), released the Measures for the Implementation of Compliance Management of POWERCHINA and set up a Compliance Management Steering Committee (hereinafter referred to as the "Committee") on Aug 13, 2019. The Committee is responsible for the organization and overall coordination, making decisions for major issues, guiding, supervising and evaluating the operation of the compliance management. The Committee is composed of the director (Chairman of the Board of the Company), the vice director (the General Manager, as well as the company leaders in charge of compliance management) and ordinary members (principal leaders from all departments of the headquarters).

The daily work of compliance management is carried out under the organization and leadership of the Committee and with the participation of all departments of the Company. The Chief Compliance Officer (the General Counsel of the Company) is responsible for the organization of the compliance management and the Legal and Risk Management Department is in charge of dealing with daily compliance issues. The other involved departments include the Corporate Culture Department, the Discipline Inspection Commission, the Strategic Development Department, the Corporate Leadership Management Department, the Human Resources Department, the Audit Department, the Overseas Business Division and other departments.

Three lines of defense are set up for the compliance management in the Company. The first line lies in the business departments, which are responsible for improving the business management system, identifying compliance risks and potential dangers, releasing early warnings, performing compliance audits, reporting compliance risk issues to the competent departments, properly dealing with compliance risk events, carrying out compliance investigations to business partners and organizing compliance investigation.

The second line rests on the competent department which is responsible for organizing, coordinating, and supervising the compliance management and providing support to other departments. It has the following functions: studies and prepares compliance management plans, pays attention to changes in laws and regulations, organizes risk identification and early-warnings, participates in compliance review; organizes compliance supervision, participates in the investigation of violations and propose handling measures, assists the business departments and human resources department in carrying out compliance training.

The third line of defense is the specific departments in charge, which are responsible for compliance management supervision.

In order to promote the implementation of the requirements and measures as spelled out in the Measures for the Implementation of Compliance Management of POWERCHINA, the Company has further improved the compliance management system. The compliance management system is well organized and works effectively in a standard process. The Company has formulated and published the Compliance Management Manual, which offers institutional guarantee for the Company to establish an effective compliance management system.

The Overseas Business Department controls the international business of the Company in a unified manner by setting up compliance departments in each regional headquarter and appointing   officers, compliance managers, and staff. At present, the Department has 24 compliance management staff in headquarters and about 40 compliance management staff in regional headquarters. The Department has formulated the Compliance Policy as its code of compliance conduct. At the same time, the Department has also adapted to domestic and foreign laws and regulations, commercial and trade rules, relevant ethics, formulated detailed implementation rules and procedures for businesses or links at abroad, such as bidding, procurement, gift reception, donation, use of cash, and high-risk personnel involving any third party.