inergy's internal audit function is an independent unit that reports directly under the Board of Directors. In accordance with the size of the company, business conditions, management requirements, and other relevant laws and regulations, It is staffed by a full-time Internal Audit and a deputy agent. . Besides informing the Board during its ordinary meetings to the members of the Audit Committee, the Internal Audit also attend the regular meetings of the Board of Directors.

The internal audit implementation rules specify the audit items, timing, procedures and methods. An annual audit plan is prepared based on the results of the risk assessment. The Internal Audit conducts regular on-site audits and special audit projects. The results of the audits, together with the worksheets and related information, are presented in an audit report, which serves as a basis for ensuring the effective implementation of the internal control system, and for reviewing or revising the internal control system.

The Company requires each of its divisions and subsidiaries to regularly self-assess the effectiveness of its internal control system on an annual basis. The Internal Audit reviews the self-assessment reports of the divisions and subsidiaries and consolidates the remediation of internal control deficiencies and anomalies identified by the Internal Audit to the Board of Directors and the President. This report serves as the primary basis for the assessment of the effectiveness of internal control and the declaration on  internal control.

The audit report and tracking report will be submitted to the members of Audit Committee for review by the end of the month following the completion of the internal audit. If the Internal Audit discovers a material non-compliance or a risk of material damage to the Company, the Internal Audit will promptly submit a report to notify the members of the Audit Committee.