Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707)
Internal control evaluation report in 2021
Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other requirements for internal control supervision (hereinafter referred to as the "enterprise internal control normative system"), combined with the company's internal control system and evaluation methods, on the basis of daily and special supervision of internal control, We evaluated the effectiveness of the company's internal control on December 31, 2021 (the benchmark date of the 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.
The company operates in strict accordance with the company law, the securities law, the guidelines for the governance of listed companies and other laws and regulations as well as the relevant provisions of Shenzhen Stock Exchange, continuously improves the corporate governance rules, and gradually improves the level of corporate governance and the transparency of information disclosure. There is no difference between the actual situation of corporate governance and the normative documents on Listed Corporate Governance issued by five departments including the China Securities Regulatory Commission. It is consistent in terms of the subject responsible for internal information disclosure of financial reports, the subject responsible for internal control of financial reports, the establishment and improvement of internal control of financial reports, the scope of self-evaluation, external audit requirements, etc.
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) evaluation scope of internal control
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 evaluation scope include all functional departments and subsidiaries of the company. The total assets of the units included in the evaluation scope account for 100% of the total assets of the company's consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue of the company's consolidated financial statements. The main businesses and matters included in the evaluation scope cover five aspects: internal environment, risk assessment, control activities, information and communication and internal supervision, including organizational structure, development strategy, human resources, social responsibility, corporate culture, capital activities, procurement business, asset management, sales business, engineering projects, guarantee business, financial report, comprehensive budget Contract management, internal information transmission, information system, etc. High risk areas of focus include: Sales and collection management, asset management, procurement and payment management, capital business management, engineering project management, contract management, related party transactions and external guarantees. 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.
1. Internal environment
(1) Governance structure
In strict accordance with the requirements of the company law, the securities law and the laws and regulations of the CSRC on listed companies, the company has continuously improved and standardized the organizational structure of the company's internal control, ensured the standardized operation of the company's general meeting of shareholders, the board of directors, the board of supervisors and other institutions, and safeguarded the interests of the company and investors.
The internal control structure of the company is complete, independent and standardized. The "three meetings and one layer" perform their respective duties, coordinate the operation and effectively check and balance. The board of directors and the board of supervisors are responsible for protecting the rights and interests of the company's shareholders, the board of directors and the controlling shareholders, and the board of supervisors are responsible for the implementation of the company's internal rights and interests. They are responsible for the rights and interests of the company's shareholders, the board of directors and the controlling department, and are responsible for the implementation of the company's internal rules and regulations, Under the supervision of relevant internal departments and personnel.
(2) Organization
In accordance with the requirements of the company law, the articles of association and relevant laws and regulations, and in combination with the actual situation, the company has established a standardized, effective and reasonable internal operation and management organization, and clearly defined the power and responsibility distribution system of management institutions and posts at all levels.
The corporate governance structure composed of the general meeting of shareholders, the board of directors, the board of supervisors and the management performs the functions of authority, decision-making body, supervision body and executive body respectively, and operates well. The board of directors of the company has a strategy committee, a nomination committee, an audit committee and a remuneration and assessment committee to provide professional decision-making support for the board of directors. All directors, supervisors and senior managers of the company are diligent and responsible. Independent directors have played the role of consultation and advice on major decision-making matters of the company in their professional fields, made independent judgments and performed their duties well.
The company follows the principle of separation of incompatible positions, reasonably sets up internal institutions according to business and management needs, defines the terms of reference, staffing and working system, and forms a scientific and effective division of responsibilities and check and balance mechanism. Each functional department has a clear division of labor, performs its own duties, cooperates with each other, checks and balances each other, and ensures the standardized operation of the company.
The board of directors, the board of supervisors and the management of the company are committed to the construction and implementation of internal control, scientifically defining the division of responsibilities of the board of directors, the board of supervisors and the management in the establishment and implementation of internal control, and forming a hierarchical internal control organization guarantee system of the company; The board of directors of the company regularly summarizes the internal control report, urges the rectification of internal control, and revises the internal control system to promote and promote the internal control of the company. Effectively ensure the implementation and implementation of the company's internal control system.
(3) Development strategy
The strategy committee under the board of directors of the company is responsible for studying and making suggestions on the company's long-term development strategy and major decisions. The company defines the development direction on the basis of full investigation and research, scientific analysis and prediction and extensive solicitation of opinions, and formulates the annual work plan accordingly to decompose and implement the objectives; At the same time, during the implementation of the development strategy, timely and dynamically adjust the development strategy according to the market situation to continuously enhance the sustainable development ability of the company.
(4) Human resources
The company attaches great importance to the construction of human resources. According to the company's development strategy, the company has formulated and implemented the employment, training, dismissal and resignation, salary, assessment and selection mechanism of human resources, realized the rational allocation of human resources, and played an important intellectual support role in realizing the enterprise development strategy. The company has formulated relevant human resources management measures to clarify the working procedures and requirements of various business links such as appointment, dismissal, talent training, performance management and salary management. Each unit of the company has formulated a job description according to the responsibilities of the Department to clarify the responsibilities, authorities, working conditions and work requirements of each post. The professional structure of the company's employees is reasonable, with high education level, skills and business level. The company pays attention to the rights and interests of employees, employs according to law, strengthens performance appraisal, and forms a good incentive and restraint mechanism; The company improves the education and training system and carries out various trainings around the enterprise strategy and production and operation needs; The company revised relevant systems and standards, strengthened human resources construction and prevented human resources risks.
The company attaches great importance to employee training and continuing education. According to the needs of actual work, the company carries out various forms of follow-up training and education for different posts to continuously improve the quality of employees.
(5) Social responsibility
The company emphasizes and actively performs its social responsibilities and obligations. According to relevant national regulations and industrial standards, the company formulates relevant management systems in terms of social responsibilities such as safety production, commodity quality, environmental protection and employee rights and interests protection, so as to realize the healthy and harmonious development of the company and employees, the company and society, and the company and the environment. The company mainly promotes and standardizes the company's social responsibility from the aspects of safe production, product quality, environmental protection, resource conservation, employment promotion, targeted poverty alleviation and employee protection; The company earnestly implements the national macroeconomic policies and consciously maintains the market economic order; The company actively participates in social public welfare undertakings and contributes to the construction of a harmonious society. (6) Corporate culture
The company has always attached importance to the realization of the social value of the enterprise. While pursuing economic benefits and protecting the interests of shareholders, the company treats and protects other stakeholders in good faith. In order to guide and standardize the behavior of employees, the company has formulated the code of conduct for employees, made efforts to cultivate employees' positive values and sense of social responsibility, and advocated the spirit of honesty and trustworthiness, pragmatic innovation, love and dedication, unity and cooperation.
2. Risk assessment
The company implements comprehensive risk management and special inspection of internal control through continuous construction of internal control system. On the basis of identifying the work objectives, work plans and quantitative indicators of the unit, all departments and subsidiaries of the company identify the potential risks that may affect the realization of the objectives or plans for each important business and its processes. During risk analysis and assessment, each functional department shall analyze and judge the possible risks according to the scope of responsibility and jurisdiction. For the main risks finally identified and confirmed, study and determine reasonable or acceptable risk control objectives, formulate corresponding risk control measures, clarify the person in charge of control, and implement risk control to specific units and individuals to ensure that the company avoids or reduces various risk losses, strengthen the company's anti risk ability, and further promote the sustainable, stable and healthy development of the company.
3. Control activities
The company has established and improved business process systems covering capital, assets, procurement, sales, costs and expenses, engineering projects, external guarantees, related party transactions, accounting and external reporting, contracts and comprehensive budget management, implemented corresponding separation measures according to the incompatible positions involved in the business process, and formed a working mechanism of performing their respective duties, assuming their respective responsibilities and mutual restriction, Clarify the scope of authority, approval procedures and corresponding responsibilities of each post in handling business and matters, and effectively manage and control various risks affecting the realization of objectives in the business process.
4. Information and communication
The company has formulated a series of management systems on information exchange to ensure the timely and effective exchange and communication of internal and external information during the operation of the management system. The company has established an internal reporting system, which is based on comprehensive budget management and consistent with the strategic objectives, covering sales, costs, funds and other aspects. Through the internal report, the company analyzes the implementation of the company's cost budget, puts forward problems, reveals risks, and formulates corresponding countermeasures and solutions.
The company has formulated internal control systems such as information disclosure management system and insider information confidentiality system in accordance with relevant regulations to regulate the centralized management, disclosure standards, transmission and review procedures, responsible persons, confidentiality and registration, accountability, etc. of undisclosed major information, register and manage insiders of insider information, and strictly prevent insider trading.
The company actively uses information technology, and the information system covers the main fields of the company's operation and management, including multiple application systems such as financial software and office automation system, so as to realize the integration of management automation and management and control. The anti fraud reporting mechanism has been established to ensure that the company has timely and effective anti fraud information.
5. Internal supervision
The company has established an internal audit and supervision management system and defined the responsibilities and authorities of the internal supervision organization. The audit department independently carries out the company's internal inspection and supervision to effectively prevent violations and reduce business risks.
(II) basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and the company's internal control evaluation system. According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company's scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished internal control over financial reports from internal control over non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company, And consistent with previous years. The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defect refers to the combination of one or more control defects that may cause the company to deviate from the control target and reach 0.5% or more of the total assets in the company's consolidated financial statements. Important defect refers to the combination of one or more control defects, whose severity and economic consequences are lower than those of major defects, but it may still cause the company to deviate from the control target and reach 0.25% or more of the total assets in the company's consolidated financial statements.
General defects refer to other defects except major defects and important defects.
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects refer to the combination of one or more defects that may seriously affect the effectiveness of the overall internal control, resulting in the company's inability to prevent or find serious deviations from the overall control objectives in time.
Important defect refers to the combination of one or more defects, whose severity and economic consequences are lower than those of major defects, but the severity of the company's failure to prevent or find deviation from the overall control objectives is still significant, which must attract the attention of the company's management.
General defects refer to other defects except major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Major defects: direct economic loss of more than 5 million yuan;
Important defects: direct economic loss of more than 1 million yuan and less than 5 million yuan;
General defects: the direct economic loss is more than 500000 yuan and less than 1 million yuan.
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Major defects: serious lack of "three important and one major"
