Company code: Ningxia Baofeng Energy Group Co.Ltd(600989) company abbreviation: Ningxia Baofeng Energy Group Co.Ltd(600989)
Ningxia Baofeng Energy Group Co.Ltd(600989)
Internal control evaluation report in 2021
Ningxia Baofeng Energy Group Co.Ltd(600989) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with the company’s (hereinafter referred to as 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). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the base date of internal control evaluation report to the date of issuance of 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. 5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company’s internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include: the company and its subsidiary companies Ningxia Dongyi Environmental Protection Technology Co., Ltd., Ningxia Ningxia Baofeng Energy Group Co.Ltd(600989) Group Coal Coking Co., Ltd., Ningxia Baofeng group HONGSI Coal Industry Co., Ltd., Ningxia Ningxia Baofeng Energy Group Co.Ltd(600989) group siguquan coal mine, Inner Mongolia Baofeng coal based new materials Co., Ltd. and Ningxia Yanchi siguquan Coal Industry Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company’s consolidated financial statements is 99.98
The total operating income of the units included in the evaluation scope accounts for 99.97% of the total operating income in the company’s consolidated financial statements
3. The main operations and matters included in the scope of evaluation include:
The company’s organizational structure, risk assessment, control measures, financial management, comprehensive budget management, material procurement and supply management, raw coal and chemical raw materials procurement management, product sales management, production technology management, quality inspection management, safety management, environmental protection management, equipment management, human resources management, project construction management, etc. 4. High risk areas of focus mainly include:
Safety risk, environmental protection risk, macroeconomic fluctuation risk, market competition risk, industrial policy change risk, cost rise risk and natural disaster risk. 5. 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. Is there any major omission □ yes √ No 6 Is there a statutory exemption
□ yes √ No 7 Other explanatory matters
nothing
（2） Basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation in accordance with the provisions of the enterprise’s internal control standard system and supporting guidelines and other internal management systems of the company. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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. 2. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
After considering compensatory measures, leading to the consideration of compensatory measures, leading to the consideration of compensatory measures, The internal defects that cause the total misstatement amount of the annual financial statements to be greater than or equal to the annual financial misstatement amount to be less than the importance level, the misstatement amount to be less than the importance level, the weight importance level, the overall importance level of the financial statements to be 100%, the internal control level to be greater than or equal to 20% of the importance level, the internal control level to be 100% of the misstatement degree, and the internal control level to be 20% of the misstatement degree are general defects
Manufacturing defects are major defects and control defects are important defects
Description: None
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defect the combination of one or more control defects may cause the evaluated subject to seriously deviate from the control objectives
Important defect is a 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 evaluated subject to deviate from the control objectives
General defects other than major defects and important defects
Note: for some internal control defects, even if the amount of misstatement caused by them is less than 20% of the overall importance level, the identification results of the defects should also be raised, including but not limited to: (1) fraud by directors, supervisors and senior managers or collusion by employees, which has caused important losses and adverse effects to the company; (2) Restate previously published financial statements to correct material misstatement due to fraud or error; (3) It is found that there is a material misstatement in the current financial statements, but the internal control fails to find the misstatement in the operation process; (4) The supervision of the audit committee of the board of directors and the internal audit department on internal control is invalid; (5) Major violations of laws and regulations and liability accidents in terms of product quality, safe production and environmental protection, resulting in heavy losses and adverse effects to the company, or being severely punished by the regulatory authority; (6) Subsequent events that have a significant negative impact on internal control after the reporting date; (7) The financial statements have been or are likely to be given a negative opinion or refused to express an opinion by the certified public accountant.
3. Identification standard of internal control defects in non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Exceeding the total assets of the company
The direct property loss exceeds 0.5% 0.3% of the total assets of the company, but does not exceed 0.5% of the total assets of the company and does not exceed 0.3% of the total assets of the company
Description: None
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defect the combination of one or more control defects may cause the evaluated subject to seriously deviate from the control objectives
Important defect is a 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 evaluated subject to deviate from the control objectives
General defects other than major defects and important defects
explain:
The defects of the company’s internal control over non-financial reports do not directly affect the authenticity, reliability and integrity of financial reports, but have an adverse impact on the realization of the strategic objectives of enterprise operation and management, legal compliance, asset safety, operation efficiency and effect and other control objectives. The company reasonably determines the internal control defect of non-financial report by referring to the identification standard of internal control defect of financial report. The identification of non-financial report defect of the company is mainly determined based on the severity of the business nature involved, the nature of direct or potential negative impact, the scope of impact and other factors, and the impact degree is adjusted taking into account the opinions of the management, Identify the importance of internal control defects in non-financial reporting. （3） Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
For the general defects of internal control over financial reporting found during the reporting period, the company has taken corresponding rectification measures or formulated corresponding rectification plans. 1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified □ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any important defects in the internal control of financial reporting that have not been rectified □ yes √ no
2. Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.2 Important defects
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.3 General defect
For the general defects of internal control over non-financial reporting found during the reporting period, the company has taken corresponding rectification measures or formulated corresponding rectification plans. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in the non-financial reporting internal control that have not been rectified □ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company finds any important defects in non-financial reporting internal control that have not been rectified □ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year □ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
√ applicable □ not applicable
Adapt to the company’s internal strategy, business scope, risk control, etc. The company will continue to improve the internal control system, strictly control the implementation of the internal control system, strengthen the supervision and inspection of internal control, and realize the controllability of major risks. Focusing on the strategic goal of striving to build a first-class comprehensive energy company with national competitiveness, the company will establish a discipline inspection committee and a compliance department to realize the substantive transformation of internal control from form to content, from participation in business to integration into business, and from post engagement to prior control. 3. Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Dang Yanbao Ningxia Baofeng Energy Group Co.Ltd(600989) March 10, 2022
