Guanglian Aviation Industry Co.Ltd(300900)
Self evaluation report on internal control in 2021
Guanglian Aviation Industry Co.Ltd(300900) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the enterprise internal control normative system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, and 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 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, changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures
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 main units included in the evaluation scope include: the company and its subsidiaries Harbin zhenglang Aviation Equipment Manufacturing Co., Ltd. Guanglian Aviation Industry Co.Ltd(300900) (Nanchang) Co., Ltd. Guanglian Aviation Industry Co.Ltd(300900) (Xi’an) Co., Ltd. Guanglian Aviation Industry Co.Ltd(300900) (Zhuhai) Co., Ltd., Harbin kapule Guanglian Aviation Industry Co.Ltd(300900) composite material Co., Ltd. Guanglian Aviation Industry Co.Ltd(300900) (Jincheng) Co., Ltd., Guanglian (Beihai) UAV Technology Co., Ltd, The total assets of the units included in the evaluation scope account for 89.14% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 96.15% of the total operating revenue in the company’s consolidated financial statements. The main businesses and matters included in the evaluation scope include: organizational structure, human resources, capital activities, procurement business, asset management, sales business, research and development, engineering projects, business outsourcing, financial reporting, comprehensive budget, contract management, internal information transmission and information system, etc. The high-risk areas of focus mainly include: capital activities, procurement business, sales business, asset management, related party transactions, 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.
In this year, the company acquired Chengdu Hangxin Aviation Equipment Technology Co., Ltd., Jingdezhen Hangsheng Aviation Machinery Co., Ltd. and Guanglian Aviation Industry Co.Ltd(300900) (Tianjin) Co., Ltd. (hereinafter referred to as the “acquired company”) and included them in the consolidation scope of financial statements in 2021. According to the relevant exemption provisions of the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 21 – General Provisions on annual internal control evaluation report jointly issued by the China Securities Regulatory Commission and the Ministry of finance, the company did not include the acquired company in the scope of internal control evaluation.
(II) basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation on the basis of daily and special supervision of internal control according to the enterprise internal control standard system and in combination with the company’s internal control system and evaluation methods.
The board of directors of the company distinguished the internal control of financial report from the internal control of non-financial report according to the identification requirements for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the previous years. The identification standards of internal control defects determined by the company are as follows:
1. Identification criteria for defects in internal control over financial reporting
Defect grade major defect important defect general defect project total assets potential misstatement ≥ 1% of total assets ≤ misstatement misstatement 3% of total assets misstatement 1% of total assets misstatement
Potential misstatement of business income ≥ 1% of business income ≤ misstatement misstatement 3% of business income
3% of incoming
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Note: the quantitative standard will be adjusted appropriately with the expansion of the company’s business scale.
Qualitative standard of defect grade
1. The company’s directors, supervisors and senior managers commit fraud and cause heavy losses and adverse effects to the company;
2. The company corrects the published financial report;
3. Material misstatement in the financial report of the current period found by the certified public accountant but not identified by the company’s internal control;
4. Major defects that have been found and reported to the management have not been corrected within a reasonable time;
5. The supervision of the company’s audit committee and internal audit institutions on internal control is invalid.
1. Failure to select and apply accounting policies in accordance with generally accepted accounting standards;
2. Failure to establish anti fraud procedures and control measures;
3. For the accounting treatment of unconventional or special transactions, there is no corresponding control mechanism for important defects, or it is not implemented 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 there is no reasonable guarantee that the prepared financial report can express the true and accurate objectives.
General defects and other internal control defects that do not constitute major defects or important defects.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
2. Identification standard of internal control defects in non-financial reporting
Defect grade major defect important defect general defect item
Direct asset loss direct asset loss direct asset loss 1% of total assets ≤ direct assets
≥ total loss of assets ＜ total loss of assets ＜ 3% of total assets
1% of 3%
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect grade
1. The company’s business activities seriously violate national laws and regulations;
2. Unscientific decision-making procedures of the company lead to major decision-making mistakes;
Major defects 3 Serious loss of key management and technical personnel;
4. The evaluation result of internal control is that major defects have not been rectified;
5. The frequent occurrence of negative news or reports has attracted great attention from the regulatory authorities and has caused great concern to the company
The negative impact of can not be eliminated in a long time.
The severity of a single defect or a combination of other defects is lower than that of a major defect or an important defect
However, it may still cause the company to deviate from the control objectives.
General defects do not constitute major defects or other control defects other than important defects.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
(III) 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 has no 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
During the reporting period, the company had no major events related to internal control.
Chairman: [signature]
[signature and seal of the company]
Guanglian Aviation Industry Co.Ltd(300900)
