Qingdao Qingdao Tgood Electric Co.Ltd(300001) Electric Co., Ltd
Internal control evaluation report in 2021
In accordance with the provisions and requirements of the company law, the securities law, the basic norms of enterprise internal control, the supporting guidelines for enterprise internal control, the guidelines for the evaluation of enterprise internal control, the Listing Rules of GEM stocks, the guidelines for self-discipline supervision of listed companies on Shenzhen Stock Exchange No. 2 – standardized operation of listed companies on GEM and other laws and regulations and relevant documents, In combination with the rules and regulations of Qingdao Tgood Electric Co.Ltd(300001) (hereinafter referred to as “the company”), the audit committee of the board of directors conducted a comprehensive and in-depth inspection on the company’s internal control in 2021, comprehensively evaluated the rationality, integrity and effectiveness of the establishment of internal control, formed evaluation conclusions, and prepared the internal control self-evaluation report as follows.
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、 Internal control evaluation conclusion
According to the identification of major defects in the company’s internal control over financial reporting, there are no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise’s internal control standard system and relevant regulations.
According to the identification of major defects in the company’s internal control over non-financial reports, the company found no major defects in the company’s internal control over non-financial reports on the benchmark date of the internal control evaluation report.
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、 Internal control evaluation
(I) basis of internal control evaluation
This internal control self-evaluation is based on the requirements of the basic norms of enterprise internal control, supporting guidelines for enterprise internal control, guidelines for enterprise internal control evaluation, guidelines for standardized operation of listed companies and guidelines for internal control of listed companies issued by Shenzhen Stock Exchange, Combined with the company’s internal control system and evaluation methods, according to the environment and its own business characteristics, and based on the daily supervision and special supervision of internal control, evaluate the effectiveness of the design and operation of the company’s internal control as of December 31, 2021.
(II) scope of internal control evaluation
The scope of internal control evaluation covers various businesses and matters of the company and its subordinate units. The units included in the evaluation scope include the company’s headquarters, wholly-owned and holding subsidiaries. The businesses and matters included in the evaluation scope include: organizational structure, development strategy, human resources, social responsibility, corporate culture, capital activities, procurement business, asset management, research and development, engineering projects, guarantee business, business outsourcing, financial reporting, budget management, contract management Internal information transmission, information system and other contents, in which the holding subsidiary only evaluates the internal control related to the financial statements. The internal control of the above businesses and matters covers the main aspects of the company’s operation and management, and there is no major omission.
(III) principles of the company’s internal control
Principle of comprehensiveness: internal control should run through the whole process of decision-making, implementation, supervision and feedback, covering various businesses, matters and all personnel of the company and its subsidiaries;
Principle of importance: on the basis of comprehensive control, internal control should pay attention to the company’s important business matters, key control points and high-risk areas in the business process;
Principle of checks and balances: internal control should form clear rights and responsibilities, mutual restriction and mutual supervision in terms of corporate governance structure, institutional setting, distribution of rights and responsibilities and business processes, while taking into account operational efficiency;
Principle of adaptability: the internal control system shall not only comply with the provisions of national laws and regulations, but also be continuously improved and improved in combination with the actual situation of the company, with the change of the external environment, the adjustment of business operation and the improvement of management requirements;
Cost benefit principle: internal control should weigh the implementation cost and expected benefits, achieve effective control at reasonable cost and maximize benefits.
(IV) procedures and methods of internal control evaluation
The internal control evaluation shall be carried out in strict accordance with the procedures specified in the basic norms, evaluation guidelines and the company’s internal control evaluation measures. The evaluation work is carried out according to the following steps: the audit office takes the lead in formulating the internal control evaluation plan and evaluation work plan, organizing and holding the internal control kick-off meeting, establishing the internal control evaluation team, and the internal control related persons of each unit carry out self-evaluation. The human resources center summarizes the evaluation results, the Audit Office comprehensively reviews and identifies the control defects, and holds the summary meeting, Prepare the internal evaluation report and submit it to the Audit Committee for consideration. In the process of self-evaluation, we adopted the methods of individual interview, special discussion, questionnaire survey, review and inspection, walk through test, sampling and analytical review to widely collect the evidence of whether the company’s internal control design and operation are effective, and analyze and identify the internal control defects according to the specific contents of the evaluation.
4、 Construction and implementation of internal control system
(I) internal control environment
1. Corporate governance and organizational structure
In accordance with relevant national laws, regulations, the articles of association and the requirements of regulatory authorities, the company has reasonably set up an organizational structure that meets the needs of the company’s business scale and operation and management, including the management system of the general meeting of shareholders, the board of directors, the board of supervisors and senior management. 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 working rules of independent directors, the rules of procedure of the board of supervisors, the management system of connected transactions, the management measures for external guarantees, the management system for the use of raised funds, the investment decision-making management system, the financing management measures, the accounting system and the working rules of the strategy committee Working rules of the audit committee, working rules of the nomination committee, working rules of the remuneration and assessment committee, working rules of the general manager, working rules of the Secretary of the board of directors, internal audit system, investor relations management system, information disclosure management system, accountability system for major errors in annual report information disclosure and insider reporting system And other systems, which defines the responsibilities and authorities of decision-making, implementation and supervision at all levels, and forms a working mechanism of performing their respective duties, responsibilities, mutual restriction and coordination.
The general meeting of shareholders is the highest authority of the company, which deliberates and makes decisions on the company’s business policies, investment plans, major transactions, changes in the company’s capital, appointment and removal of directors and supervisors, so as to ensure that all shareholders, especially small and medium-sized shareholders, enjoy equal status and that all shareholders can fully exercise their rights.
As the executive body of the company, the board of directors of the company implements the resolutions of the general meeting of shareholders and is responsible for the general meeting of shareholders. It has four special committees: Strategy Committee, audit committee, nomination committee and remuneration and assessment committee. Each committee has corresponding rules of procedure, exercises the power of business decision-making within the specified scope of responsibilities, and is responsible for the establishment, improvement and effective implementation of the company’s internal control system. The company has established and improved the detailed rules for independent directors, and independent directors express independent opinions in strict accordance with relevant regulations on the use of the company’s raised funds, foreign investment, foreign guarantee, related party transactions and other aspects.
The board of supervisors of the company is the supervisory body of the company, which supervises and inspects the behavior of directors, general managers and other senior managers and the financial status of each holding subsidiary, and is responsible for the general meeting of shareholders.
2. Development strategy
On the premise of fully carrying out research, the management of the company comprehensively considered the influencing factors such as macroeconomic policies, changes in market demand outside China, technology development trend, industry and competitors, available resources level and their own advantages and disadvantages, organized strategic seminars, widely solicited opinions from all parties, and formulated the development goals for 2021. And according to this goal, through the comprehensive budget management and responsibility assessment of business objectives, decompose and implement it level by level. The management of the company has always adopted a steady and prudent business attitude, treated business risks and created a good control environment.
3. Human resources
The company has established a perfect human resource management system and carried out systematic construction in terms of organizational structure, position management, performance evaluation and salary system. Based on the talent cultivation strategy of “knowing people and making good use of them, encouraging and cultivating high-quality teams”, the company formulates and implements human resource policies conducive to sustainable development, so as to form a long-term cooperation, sincere unity and The expert entrepreneurial core team with international vision ensures the long-term and healthy development of the enterprise.
4. Corporate culture
According to the development strategy and actual situation, the company actively cultivates the enterprise “friend culture” with Qingdao Tgood Electric Co.Ltd(300001) characteristics, actively advocates the work style of “taking customers as the center, innovation as the means, people-oriented and quality as the goal”, and integrates it into the whole process of production and operation, Effectively combine cultural construction with development strategy, enhance employees’ sense of responsibility and mission, standardize employees’ behavior, and promote the long-term development of the enterprise.
The annual satisfaction survey is an assessment of whether the management behavior of managers is in line with the core values advocated by the company. Through the survey, we can also see the employees’ cognition of the enterprise vision and objectives. The survey score of the company in 2021 reached a record high, indicating that the overall satisfaction of employees has improved, the employees have a very high awareness of the corporate vision and objectives, and have sufficient confidence in the future development prospect of the company. 5. Social responsibility
The company actively performs various social responsibilities, operates in good faith, produces safely, protects the interests of employees, pays attention to environmental protection, advocates resource conservation, earnestly realizes the growth of the company and employees, and the common development of the enterprise and society, and makes the greatest efforts to build an environment-friendly and resource-saving society.
As the first share of gem, the company always keeps in mind its responsibility and mission, constantly improves its product technology level, innovates its business operation mode, explores and develops new energy business, and promotes the rapid development of enterprises and industries.
The company attaches importance to ecological protection, establishes pollution prevention and environmental protection mechanism according to its own specific situation, monitors waste gas emission every year, the monitoring results meet the standards, and invites qualified units to recycle production waste. At the same time, according to the requirements of the Safety Supervision Bureau, the production site shall be inspected regularly every month, the potential safety hazards found shall be eliminated in time, and the inspection form shall be submitted.
The company attaches importance to the legitimate rights and interests of employees, signs labor contracts with each employee in strict accordance with the provisions of the labor contract law, handles five insurances and one fund for them, ensures that employees enjoy social insurance benefits according to law, pays salaries according to the provisions of the labor contract, and adjusts with reference to the market salary level to maintain a reasonable salary level, The attendance system is also formulated in strict accordance with the legal working hours and rest and vacation system to ensure the employees’ right to rest and vacation.
(II) risk assessment and control
The board of directors of the company shall comprehensively, systematically and continuously collect relevant information according to the set control objectives, determine the corresponding risk tolerance in combination with the actual situation, conduct regular risk assessment, and accurately identify the internal and external risks related to the realization of the control objectives. The company will always pay attention to the external environment such as economic situation, market competition and relevant laws and regulations, and bring them into the scope of key risk assessment. At the same time, the company maintains a good relationship with the government and regulatory authorities, and learns the changes of external information such as industrial policy, regulatory requirements, economic form and financing environment in time. The company will timely analyze and discuss the collected information, weigh the risks and benefits according to the results of risk identification and risk analysis, and determine the coping strategies of various risks to control the risks within an acceptable range. At the same time, the company takes appropriate and effective control measures according to the risk preferences of directors, managers, other senior managers and employees in key positions, so as to avoid major losses to the operation of the enterprise due to personal risk preferences. At the same time, the comprehensive use of risk avoidance, risk reduction, risk sharing and risk tolerance and other risk response strategies to achieve effective risk control.
According to the requirements of the construction of internal control system of listed companies, all departments of the company have established risk matrix and response strategies, and strengthened the management of daily business activities according to the guidance of risk matrix. According to the arrangement of annual audit project plan, the audit office conducts daily audit on the risk control of relevant business units, puts forward existing problems, requires rectification time and plan, and reviews after rectification. The annual audit office takes the lead in the self-evaluation and re evaluation of the internal control system, so as to realize the effective control of risks.
(III) internal control activities
In accordance with the requirements of relevant laws and regulations and the basic norms of enterprise internal control, the company has adopted a series of methods, measures and procedures with control functions, and established a set of standardized and strict internal management system, mainly including incompatible job separation control, authorization approval control, accounting system control, property protection control, budget control, operation analysis control Performance evaluation control, major risk early warning mechanism and emergency handling mechanism control, etc.
1. Control measures
(1) Incompatible job separation control
The company has reasonably set up internal functional organizations, defined the responsibilities and authorities of each organization, comprehensively and systematically analyzed and sorted out the incompatible positions involved in the business process, and formulated detailed job descriptions for each position to avoid cross functions, lack or excessive concentration of rights and responsibilities.
(2) Authorization approval control
According to the provisions of various business management systems, the company adopts different authorization controls, defines the scope of authority, approval procedures and corresponding responsibilities of each post for handling business and matters, and requires managers at all levels to exercise their powers within the scope of authorization. Routine authorization is adopted for general daily production and business activities, special authorization is adopted for special matters, and collective decision-making approval or joint signing system is adopted for major businesses or matters. No individual shall make decisions alone or change collective decisions without authorization.
(3) Accounting system control
The company strictly implements the accounting standards, strengthens the basic work of accounting, establishes a standardized accounting and monitoring system, defines the processing procedures of accounting vouchers, accounting books and financial accounting reports, sets up accounting institutions and is equipped with accounting practitioners. The financial accounting management system and financial approval authorization system have been formulated
