Tianrun Industry Technology Co.Ltd(002283)
Self evaluation report on internal control in 2021
Tianrun Industry Technology Co.Ltd(002283) 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 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、 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. We believe 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 main units included in the evaluation scope include: Tianrun Industry Technology Co.Ltd(002283) , Weifang Tianrun crankshaft Co., Ltd., Wendeng Hengrun Forging Co., Ltd., Weihai Tianrun Packaging Technology Co., Ltd., Weihai Tianrun Intelligent Technology Co., Ltd., Weihai Tianrun Machinery Technology Co., Ltd., Tianrun quxinguo Co., Ltd., Tianrun intelligent control system integration Co., Ltd Shandong Tianrun Precision Industry Co., Ltd., the total assets of the unit included in the evaluation scope account for 100% of the total assets in the company's consolidated financial statements, and the total operating income accounts for 100% of the total operating income in the company's consolidated financial statements; The main businesses included in the evaluation scope are the research, development and production of crankshaft, connecting rod, castings, forgings, air suspension and series products. The main items included in the evaluation scope include: organizational structure, development strategy, human resources, capital activities, procurement business, asset management, sales business, engineering projects, guarantee business, business outsourcing, financial report, comprehensive budget Contract management, internal information transmission and information system; The high-risk areas of focus mainly include development strategy, capital activities, procurement business, asset management, sales business, engineering projects, related party transactions, external guarantee, business outsourcing, 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) details of the company's businesses and matters included in the evaluation scope are as follows (focusing on high-risk areas)
1. Development strategy
The board of directors and management of the company, based on the clear understanding and grasp of macroeconomic policies, changes in market demand outside China, technological development trend, industry and competitor conditions, and combined with the company's own situation, determined that the new industrial policies and environment still had no substantive impact on the company, and put forward the requirements of "achieving refinement and expansion of main business and absolute leadership", It also puts forward the requirements of "the second main industry is stronger and more solid, with rapid development, and the third main industry is rapidly distributed and innovated"; We believe that the development strategy formulated by the company is based on the accurate judgment of the company's Strategy Committee on the situation outside China. It is consistent, forward-looking and overall, and can make full use of the resources of the enterprise and give full play to the advantages of the enterprise. The annual work plan formulated by the company closely focuses on the development strategy, which is practical, stable and progressive, and can promote the sustainable and healthy development of the enterprise.
2. Financial activities
The company has formulated the special management system for raised funds, the decision-making system for related transactions, the management system for external guarantee, the management system for preventing the occupation of funds by controlling shareholders and related parties, the venture capital management system and other systems. Based on the information platform and in combination with the actual situation of the company, the company has formed a strict examination and approval procedure for the use of funds. At the same time, the company carried out financial supervision and early warning, strengthened financial control, reminded all management departments to take management measures in time by using the data analysis system, optimized the company's internal cost and capital occupation business management system, and prevented and controlled potential risks. During the daily use of funds, the company strengthened the audit of the compliance of the use of funds, especially the use of advance payment and acceptance payment and the income of investment projects, so as to effectively prevent the risk of capital activities, improve capital efficiency and ensure the safety of funds.
3. Procurement business
At present, the relevant management systems of the company's procurement business include bidding management measures, supplier management measures, equipment procurement management measures, material procurement management measures, etc. the systems are perfect, and the company has effectively managed and supervised the procurement of raw materials, materials and equipment. By means of information management and control, the company improves the efficiency of the procurement process and monitors the whole supply chain to make the planning, pricing, warehousing, acceptance, payment and other processes more smooth and effective. Ensure the rationality of the company's purchase through the combination of daily price investigation and supervision; Ensure that the procurement system is effectively implemented through regular audit of the implementation of procurement related systems.
4. Asset management
The company has formulated a comprehensive asset management system, formulated the asset management measures, further refined the equipment asset management measures, established and improved the management systems of various business fields and links such as fixed assets, warehouse, raw material storage and inventory, and clarified the management processes of asset purchase, acceptance, warehousing, warehousing and inventory, It can control the key links such as acceptance and warehousing, receiving and issuing, storage and disposal of physical assets. At the same time, it has taken measures such as division of responsibilities, regular physical inventory, property records, account verification and property insurance to effectively ensure the safety of the company's assets. 5. Sales business
The company comprehensively combs the sales business process, improves the relevant management system of the sales business, determines the feasible sales strategy, defines the pricing principle, credit standards and conditions, collection method, responsibilities and authorities of the institutions and personnel involved in the sales business, and handles the sales business in accordance with the specified authorities and procedures, Regularly check and analyze the weak links in the sales process, such as long-term UN invoiced shipments, uncollected receivables and overstocked inventory, and report to the company to take effective control measures to ensure the achievement of sales objectives.
6. Project
The company has formulated relevant systems such as management measures for construction infrastructure project and bidding management measures to ensure the open, transparent and orderly development of engineering construction projects from the perspective of system process. According to the measures for project supervision and management, the company adopts the combination of self-examination and project cost outsourcing consultation, and carries out daily supervision on the whole process of project initiation, budget, bidding, construction, final settlement, acceptance and payment through information means, so as to ensure that the project construction is scientific and compliant, the cost is reasonable and the quality is excellent. 7. Related party transactions
The company has formulated the decision-making system for related party transactions, which clearly stipulates the approval authority and decision-making procedures of related parties, related party transactions, related party transactions and the disclosure of related party transactions. The audit department shall regularly review the related party transactions and finally confirm that the controlling shareholders and other related parties have not occupied the company's funds.
8. Guarantee business
The company standardizes the company's external guarantee behavior and strictly controls the external guarantee risk in strict accordance with the notice on regulating the external guarantee behavior of listed companies issued by the CSRC and the stock listing rules of Shenzhen Stock Exchange. The company has formulated the external guarantee management system, which clearly stipulates the approval authority of the general meeting of shareholders and the board of directors on external guarantees and the control requirements for the review, approval and implementation of guarantee business, so as to prevent potential risks and avoid and reduce possible losses.
9. Product outsourcing business
In order to standardize the outsourcing business of crankshaft, connecting rod, casting and forging, clarify the management responsibilities and procedures of outsourcing business, strengthen the management of outsourcing units, ensure the work quality of outsourcing business, reduce the processing cost of the company, improve the utilization rate of funds, and meet the needs of customers to the greatest extent, the company has formulated the measures for the management of product outsourcing to clarify the management responsibilities of each department, Ensure the fair, just and open development of outsourcing business from the perspective of system and process, ensure the work quality of outsourcing business and reduce the processing cost of the company. The company strengthened the supervision of outsourcing pricing through the audit of outsourcing business.
(III) internal control evaluation basis and internal control defect identification standard
The company organizes and carries out internal control evaluation according to the enterprise internal control standard 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
The quantitative evaluation criteria of the company's internal financial control report are as follows:
The quantitative standard takes the operating income and total assets as the measurement indicators. If the loss that may be caused or caused by the defect of internal control is related to the income statement, it shall be measured by the operating revenue index. If the amount of misstatement in the financial report caused by the defect alone or in combination with other defects is less than 0.5% of the operating revenue, it is recognized as a general defect; If it exceeds 0.5% but less than 1% of the operating revenue, it is an important defect; If it exceeds 1% of the operating revenue, it is recognized as a major defect.
Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 0.5% of the total assets, it is recognized as a general defect; If it exceeds 0.5% but less than 1% of the total assets, it is recognized as an important defect; If it exceeds 1% of the total assets, it is recognized as a major defect.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Signs of significant deficiencies in financial reporting include:
(1) Fraud of directors, supervisors and senior managers of the company;
(2) The company corrects the published financial report;
(3) Material misstatement in the current financial report found by the certified public accountant but not identified by the company's internal control;
(4) The supervision of the audit committee and the audit department on the company's external financial report and internal control over financial report is invalid.
Signs of significant deficiencies in financial reporting include:
(1) Failure to select and apply accounting policies in accordance with GAAP;
(2) Failure to establish anti fraud procedures and control measures;
(3) No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control;
(4) There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the true and complete goal.
General defects refer to other control defects other than the above major defects and important defects.
2. 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:
The quantitative standard for the evaluation of internal control defects in non-financial reports shall be implemented with reference to the quantitative standard for the evaluation of internal control defects in financial reports.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The identification of non-financial report defects is mainly based on the impact of defects on the effectiveness of business processes and the possibility of occurrence.
If the possibility of defects is small, it will reduce the work efficiency or effect, or increase the uncertainty of the effect, or make it deviate from the expected goal, which is a general defect; If the possibility of defects is high, it will significantly reduce the work efficiency or effect, or significantly increase the uncertainty of the effect, or make it significantly deviate from the expected goal as an important defect; If the possibility of defects is high, it will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal, which is a major defect.
(IV) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reporting, the company did not have major defects and important defects in internal control of financial reporting during the reporting period.
2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reports, no major defects and important defects in the company's internal control over non-financial reports were found during the reporting period.
4、 Description of other major matters related to internal control
The company has no explanation of other major matters related to internal control.
Chairman: Xing Yunbo
Tianrun Industry Technology Co.Ltd(002283) March 15, 2022
