Shandong Humon Smelting Co.Ltd(002237)
Internal control evaluation report in 2021
Shandong Humon Smelting Co.Ltd(002237) 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 standard system"), combined with the internal control system and evaluation methods of Shandong Humon Smelting Co.Ltd(002237) (hereinafter referred to as the "company"), 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.
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 (wholly owned subsidiaries: Yantai humon Geological Exploration Engineering Co., Ltd., Yantai humon construction and installation Co., Ltd., Weihai humon Chemical Co., Ltd., Yantai Henglian waste materials acquisition Co., Ltd., Yantai humon Mine Engineering Co., Ltd., Yantai humon Gold Investment Co., Ltd., Yantai humon Gold Hotel Co., Ltd., Huangshi Yuanzheng economic and Trade Co., Ltd., Yunnan xinbaihui economic and Trade Co., Ltd., Yantai Muping District humon occupation Co., Ltd.) Shandong Hengbang copper International Trading Co., Ltd. and Shanghai HENGBANG International Logistics Co., Ltd. and Yantai HENGBANG International Trading Co., Ltd; Holding subsidiary: Qixia Jinxing Mining Co., Ltd., which holds 65% equity. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company's consolidated financial statements. The total operating income accounts for 100% of the total operating income in the company's consolidated financial statements; The main businesses and matters included in the evaluation scope include: preparation and disclosure of the company's financial report, procurement and sales, strategic development, organizational structure, corporate culture, human resources, investment and financing, budget, cost, procurement and sales, control over subsidiaries, general control of information system, related party transactions, assets, engineering projects, safety production management, information, law and internal supervision; The high-risk areas of focus mainly include the risk of product price fluctuation, the risk of price and quality fluctuation of purchased raw materials, the risk of market competition in sales, the risk of international trade policy environment, the risk of exchange rate change, the risk of market demand change, 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.
（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 enterprise internal control standard system, the basic norms of enterprise internal control, 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 and other laws and regulations, regulatory provisions and relevant provisions of the articles of association, and in combination with the actual situation of the company.
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
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
For the internal control defects related to financial statements, the degree of potential misstatement or misstatement of disclosure matters in the company's annual financial statements is determined, and 5% of the pre tax profit of the current year is taken as the judgment standard of importance level. Potential misstatement amount ＜ 2.5% of pre tax profit is determined as general defect; 2.5% of pre tax profit ≤ potential misstatement amount ＜ 5% of pre tax profit is identified as an important defect; The potential misstatement amount ≥ 5% of the pre tax profit is determined as a major defect.
General defect important defect major defect
2.5% of the profit before the quantitative standard (affecting the potential misstatement amount of Cheng ＜ 2.5% of the profit before tax and the potential misstatement amount ≥ tax degree) ≤ the potential misstatement amount ＜ 5% of the profit before tax
5% of profit before tax
Relationship or and
Qualitative criteria (no action may lead to no action, no action may lead to no action) lead to potential misstatement possibility lead to potential misstatement possibility lead to potential misstatement possibility is very small
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Assuming that no measures are taken, the size of potential financial misstatement caused by this defect is taken as the judgment standard. Failure to take any action will lead to a very low possibility of potential misstatement, which is determined as a general defect; It is unlikely that any action will be taken as a potential error; Failure to take any action resulting in a high likelihood of potential misstatement is identified as a major defect.
When there are the following signs, it increases the possibility of material defects. Therefore, special attention will be paid to the following situations: restate the previously published financial statements to correct the material misstatement caused by fraud or error; There are significant misstatements in the current financial statements, which are not found in the operation of internal control.
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:
Take 5% of the pre tax profit of this year as the judgment standard of importance level. For internal control defects not related to financial statements, the degree of economic losses such as assets, income and profits of the company this year or the degree of deviation (negative deviation, i.e. failure to achieve) business objectives shall be determined. Economic loss less than 2.5% of pre tax profit is determined as general defect; 2.5% of pre tax profit ≤ economic loss 5% of pre tax profit is identified as an important defect; Economic loss ≥ 5% of pre tax profit is identified as major defect.
General defect important defect major defect
Quantitative standard (economic loss of the impact process ＜ 2.5% of profit before tax and economic loss ≥ profit before tax) 2.5% of profit ≤ economic loss ＜ 5% of profit before tax
5% of profit
Relationship or and
Qualitative criteria (possible economic loss, economic loss caused by operation, economic loss caused by operation)
(sex) the goal of the battalion that cannot be achieved, the goal that cannot be achieved, the cocoa energy that cannot be achieved, the cocoa energy that is very small, the energy that is very large
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Assuming that no measures are taken, the possibility of economic loss caused by the defect is taken as the judgment standard. If no action is taken, the possibility of causing economic losses and failure to achieve business objectives is very small, which is determined as a general defect; Failure to take any action, resulting in economic losses and unlikely possibility of failure to achieve business objectives, is identified as an important defect; If no action is taken, it is highly likely to cause economic losses and fail to achieve business objectives, which is determined as a major defect. When there are the following signs, it increases the possibility of major defects. Therefore, special attention will be paid to the following situations: the supervision of internal control by the audit committee and internal audit institutions is ineffective; Any fraud of directors, supervisors and senior managers, and the anti fraud policies and procedures are not perfect; Improper control procedures for related party transactions; Lack of control over major investment and financing and other unconventional matters; Similar major litigation cases frequently occur in a business field; Fraud, violation of national laws and regulations, etc.
(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 has no other internal control matters that may have a significant impact on investors' understanding of the internal control evaluation report, evaluation of internal control or investment decisions.
Shandong Humon Smelting Co.Ltd(002237)
Board of directors
February 21, 2023
