Shenzhen Huakong Seg Co.Ltd(000068)
Self evaluation report on internal control in 2021
Shenzhen Huakong Seg Co.Ltd(000068) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines jointly issued by the Ministry of finance, the CSRC and other departments and other internal control regulatory requirements (hereinafter referred to as the “enterprise internal control standard system”), combined with the internal control system and management measures of Shenzhen Huakong Seg Co.Ltd(000068) (hereinafter referred to as the “company”), on the basis of daily and special supervision of internal control, We evaluated the effectiveness of the company’s internal control as of December 31, 2021 (benchmark date of internal control evaluation report).
1、 Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise’s internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results.
2、 Conclusion on the effectiveness of internal control
The board of directors of the company believes that the internal control system established by the company has no major defects in integrity, compliance and effectiveness. However, due to the inherent limitations of internal control, the continuous changes of internal environment, macro environment, policies and regulations, the original control activities may not be applicable or deviate. For this, the company will timely supplement and improve the internal control system, regularly or irregularly carry out daily and special internal control evaluation and internal control audit, and optimize the internal control process, Strengthen the implementation of internal control process, ensure the effectiveness of internal control implementation, and promote the healthy and sustainable development of the company. Provide reasonable guarantee for the authenticity and integrity of the financial report and the realization of the company’s strategy and business objectives.
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the base date of the internal control evaluation report to the date of issuance of the internal control evaluation report.
3、 Overall situation of internal control evaluation
(I) evaluation method and scope of internal control
Based on the basic norms of enterprise internal control and its supporting guidelines, combined with the company’s own institutional and business characteristics, and focusing on the internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, the company adopts interviews, questionnaires, walk through tests, on-site inspection and inspection of relevant internal control documents and procedures, Comprehensively evaluate the establishment, improvement and implementation of internal control of the company and its subsidiaries.
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. The units included in the scope of internal control evaluation include the parent company Shenzhen Huakong Seg Co.Ltd(000068) , as well as the subordinate subsidiaries within the scope of consolidated statements. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company’s consolidated financial statements.
The core business processes and matters included in the evaluation scope include: corporate governance, human resource management, seal management, contract management, related party transactions, external guarantee, fund management, budget management, financial report, procurement and material management, sales management, accounts receivable management, asset management, information system management, investment management, engineering projects Safety production, energy conservation and environmental protection, internal information transmission, legal affairs management, internal supervision, etc. The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) implementation of important internal control activities
1. Corporate governance
In accordance with the requirements of the company law, the securities law, the guidelines for the governance of listed companies and relevant laws and regulations, the company has formulated the articles of association, the rules of procedure of the general meeting of shareholders, the rules of procedure of the board of directors, the rules of procedure of the board of supervisors, the system of independent directors, the working rules of the general manager and other rules and regulations to continuously improve the corporate governance structure and clarify the decision-making, implementation Supervision and other functions and powers, form a scientific and effective division of responsibilities and check and balance mechanism, and establish a relatively complete and effective corporate governance structure composed of the general meeting of shareholders, the board of directors, the board of supervisors and the management.
The company has formulated the measures for organization setting and position management to clarify the main responsibilities of each department and form an internal control system that performs its own duties, assumes its own responsibilities, cooperates with each other, restricts each other and links each other, so as to ensure the effective operation of the company’s daily business activities and lay a solid foundation for the long-term and healthy development of the company.
2. Human resource management
According to its own development needs, the company has formulated a series of human resources policies conducive to the sustainable development of the company, taking professional ethics and professional competence as important standards for the selection and employment of employees. A remuneration and assessment committee is established under the board of directors, which is mainly responsible for formulating and reviewing the remuneration standards of the company’s directors and senior managers and determining the company’s remuneration policies and plans; Be responsible for formulating and assessing the assessment standards for directors and senior managers of the company, and be responsible to the board of directors. The company has formulated a series of internal systems such as salary management system, assessment and reward and punishment management measures, labor contract management measures, housing provident fund management measures, personnel change management measures, employee recruitment management measures, employee leave management measures and employee attendance management measures, and established a scientific and reasonable human resource management system, Protect the legitimate rights and interests of employees, promote team building, enhance the company’s identity, and meet the human resources required by the company’s development.
3. Seal management
In order to standardize the management and use of the company’s seals, clarify the responsibility and authority for the use of all kinds of seals, and prevent non-standard behaviors in the management and use of seals, the company has formulated the measures for the management of seals in accordance with the guidelines for the standardized operation of Listed Companies in Shenzhen Stock Exchange and the articles of association, which defines the scope of use of all kinds of seals, and the engraving, use, storage and use of seals Use and other processes are specified. In order to strengthen the standardization of seal management, a special inspection was conducted on the company’s seal management during the reporting period, the seal approval process was reorganized and optimized, the use of seals was standardized, and the seal account management was strengthened to prevent seal management risks.
4. Contract management
In order to standardize contract management, prevent and reduce contract disputes and safeguard the legitimate rights and interests of the company, the company has formulated contract management measures and operation process of legal affairs, which clearly stipulates the responsibilities of handling department, financial department and risk control department, as well as contract management processes such as contract approval authority, signing, performance, change and cancellation Implement the inspection, tracking and management of the contract in all aspects of change and cancellation, dispute resolution, archiving and accountability.
The company regularly organized and carried out special inspection on contract management, analyzed the causes of the problems found, put forward improvement plans, timely implemented rectification, and practically strengthened the prevention and control of contract risks before, during and after the event.
5. Related party transactions
In order to regulate the company’s related party transactions, control the risks of related party transactions and protect the legitimate rights and interests of the majority of investors, especially small and medium-sized investors, the company has formulated the measures for the administration of related party transactions in accordance with the company law, the securities law, the stock listing rules of Shenzhen Stock Exchange and other laws and regulations, normative documents and the articles of association, It standardizes related party transactions, and clearly standardizes and restricts the definition of related parties, authorization and approval of related party transactions, reports and disclosure of related party transactions. During the reporting period, the related party transactions of the company have been implemented and disclosed in strict accordance with the provisions of the company’s internal control system for related party transactions, in line with the relevant provisions of the China Securities Regulatory Commission, Shenzhen Stock Exchange and the company on the management of related party transactions, and there has been no damage to the interests of the company and small and medium-sized shareholders.
6. Guarantee business
In order to standardize the company’s guarantee behavior and prevent business risks, the company has formulated the guarantee management measures in accordance with the company law, the civil code and other relevant laws, administrative regulations, normative documents and the articles of association, which regulates the decision-making and approval procedures, post responsibilities, application data specification, guarantee risk management, file management, information disclosure Power recourse and evaluation are clearly regulated and restricted. During the reporting period, the guarantee business of the company has been implemented and disclosed in strict accordance with the provisions of the internal control system of the company’s guarantee business. The guarantee behavior will not have an adverse impact on the normal operation and business development of the company and its subsidiaries, nor will it damage the legitimate rights and interests of shareholders.
7. Fund management
The company has established a unified financial management system, improved the efficiency of the company’s internal capital management, improved the company’s internal capital management, improved the efficiency of capital management, and improved the company’s internal capital allocation and efficiency. By formulating the Interim Measures for the management of monetary funds, the detailed rules for the implementation of capital expenditure, the measures for the management of cheques, the measures for the centralized management of funds, the entrusted financial management system and the investment management measures, we will strengthen the centralized management of capital activities, clarify the responsibilities, authorities and post separation requirements of various links such as financing, investment and operation, and implement the accountability system, Ensure the safe and effective operation of funds. In order to strengthen the standardization of monetary fund management, the company conducted a special inspection on the monetary fund management during the reporting period, sorted out and optimized the monetary fund management process, and improved the efficiency of fund use.
In order to standardize the management and use of raised funds, improve the efficiency and efficiency of the use of raised funds, and safeguard the legitimate rights and interests of the company, shareholders, creditors and all employees, the company has formulated the measures for the management of raised funds in accordance with the company law, the Securities Law and other relevant laws and regulations and the articles of association Management and supervision have made clear provisions.
8. Budget management
In order to implement the company’s strategic development objectives, improve economic benefits and management level, strengthen management, realize the reasonable and effective allocation of various economic resources, and establish a standardized comprehensive budget management system, the Interim Measures for budget management are formulated in accordance with relevant national laws, regulations and other relevant systems of the company and in combination with the actual situation. The responsibilities and authorities of each responsible unit in budget management are clarified, and the procedures of budget content and classification, objectives, preparation and approval, implementation and supervision are standardized. Organize and carry out budget management regularly every year, strengthen budget constraints, and strengthen the planning of the operation and management of the company and its subsidiaries.
9. Financial reporting
The company sets up a financial management department, which is equipped with professionals to carry out financial work. Each post performs its own duties, the division of labor is clear, and incompatible posts are separated from each other. For the purpose of the company’s financial management, strengthening financial supervision, safeguarding the legitimate rights and interests of investors and creditors, and ensuring the safety and appreciation of shareholders’ assets, the company has established a series of financial systems and management measures in accordance with the accounting law, accounting standards for business enterprises and other relevant provisions. It also carried out accounting work in strict accordance with accounting standards and relevant systems, and prepared financial reports according to the accounting book records and other relevant materials that were completely registered and checked, which effectively ensured the authenticity, integrity and accuracy of financial information.
10. Procurement and payment
In order to strengthen the procurement management and ensure the procurement quality of the company, the company has formulated the bidding management measures, fixed assets and consumables procurement management measures, non self use project procurement management measures, trade business management measures, supplier management measures of the Ministry of Commerce and trade and other systems according to the development strategy and business direction, and implemented the procurement management according to the regulations, Ensure the normal and orderly development of procurement and payment business.
11. Sales management
The company continues to deepen the control measures of sales business, continuously optimize the post setting and division of labor, sales price management, sales contract review, customer credit and collection management, standardize sales behavior and improve the work efficiency of the sales system. The measures for the administration of trade business have been formulated to clarify the business process and approval authority, and further standardize the business behavior.
12. Accounts receivable management
In order to strengthen the management of accounts receivable, clarify the responsibilities of financial and business departments, standardize operation, eliminate bad debts and bad debts, prevent capital loss, accelerate capital recovery and protect the legitimate rights and interests of shareholders, the company has formulated the measures for the management of accounts receivable in accordance with relevant national laws and regulations and in combination with the company’s internal management system, Clarify the management responsibilities of business departments and relevant functional departments for accounts receivable, accelerate capital recovery and reduce bad debt losses. 13. Asset management
In order to standardize the company’s inventory management, ensure the safety and integrity of inventory, truthfully reflect the warehousing, requisition, balance and pricing of various materials, and supervise the reasonable supply, storage and economical use of various materials, the company has formulated the inventory management system to standardize the inventory acceptance, warehousing, storage and inventory taking, so as to ensure the consistency of accounts, accounts and statements, The inventory status shall be evaluated regularly, and the inventory falling price reserves shall be accrued for the inventory with impairment.
In order to strengthen the management of the company’s fixed assets, ensure the safety and integrity of fixed assets, give full play to the efficiency of assets and improve the use efficiency of assets, the company has formulated the management system of fixed assets and the procurement management measures of fixed assets and consumables. It has established relatively perfect procedures for requisition, approval, procurement, acceptance, daily management and regular inventory, and taken measures such as property records, physical storage, regular inventory and account verification to ensure property safety. In order to strengthen the standardization of fixed assets management, the company conducted a special inspection on the management of fixed assets during the reporting period, reorganized and optimized the management process of fixed assets, and improved the use efficiency of assets.
14. Information system management
The company introduces OA system, establishes a platform for information communication and sharing, and realizes distributed collaborative office. By regularly checking the operation of OA system, problems found shall be maintained and revised in time. The company has established a financial information system to realize the computerization of financial management and make a comprehensive, continuous and systematic quantitative description of the company’s business activities and results. Promote the unification of financial software versions within the group to speed up information sharing, improve work efficiency and improve production, operation and management level.
15. Investment management
The company has set up a capital operation Department, which is responsible for the feasibility study, risk and benefit evaluation, fund-raising and other scientific demonstration of the investment project according to the company’s development strategy, and reporting for approval level by level according to the process, so as to ensure the scientificity of the company’s investment decision and prevent investment risks. After the project decision is passed, implement the investment implementation procedures according to the system specifications, and do a good job in post investment management, including daily management, decision-making management, value-added management, major emergencies or risk treatment management.
To establish effective investment risk
