Company code: Huaneng Power International Inc(600011) company abbreviation: Huaneng Power International Inc(600011)
Huaneng Power International Inc(600011)
Internal control evaluation report in 2021
Huaneng Power International Inc(600011) 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). 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 benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
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 headquarters of the company, regional companies and grass-roots units 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 94
The total operating income of the units included in the evaluation scope accounts for 99.8% 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:
Corporate culture, organizational structure, human resources, anti fraud, development strategy, social responsibility, risk management, internal information transmission, internal audit, comprehensive budget, revenue management, procurement management, asset management, project management, research and development, financial reporting, fund management, contract management, information system management, etc. 4. High risk areas of focus mainly include:
Production fuel procurement, project construction expenditure and fund management, etc. 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 (II) 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’s internal control standard system, the company’s internal control manual, internal control evaluation manual, management measures for the establishment and maintenance of internal control system, management measures for the assessment of internal control objectives and other relevant systems and regulations. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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. 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
Pre tax profit internal control defect causes potential error internal control defect causes potential error internal control defect causes potential error
The reported amount is greater than (including) the pre tax profit, and the reported amount is greater than (including) the pre tax amount is less than the pre tax profit
3.5% of profit, but less than 1% of pre tax profit
Moist 3.5%
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 defects the company believes that there are major defects in the internal control of financial reports, including: ① the company corrects the issued financial reports; ② In the current financial report, the auditor found that the company failed to find significant misstatement through effective internal control; ③ The supervision of the company’s audit committee and internal audit institutions on internal control is invalid; ④ Failure to implement effective monitoring and risk assessment; ⑤ Fraud by directors, supervisors and senior managers; ⑥ Failure to take effective improvement measures for major defects found; ⑦ Control environment failure.
Important defects the company believes that there are important defects in the internal control of financial reporting, including: ① inadequate control over the selection of accounting standards and the application of accounting policies; ② The implementation of anti fraud procedures and controls is not in place; ③ The control of unconventional transactions is not implemented in place; ④ The control related to the financial reporting process at the end of the period is not implemented in place.
General defects other internal control defects in financial reporting except the above major defects and important defects.
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
Internal control defect of pre tax profit may cause internal control defect may cause internal control defect may cause direct property loss caused by internal control defect large amount of direct property loss large amount of direct property loss less than (including) 3.5% of pre tax profit, 1% of pre tax profit and 1% of pre tax profit
But less than 3.5% of pre tax profit
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 defects the company believes that there are major defects in the internal control of non-financial reporting, including: ① the company’s “three important and one major” decision-making procedures are missing; ② Serious violations of national laws and regulations occurred this year; ③ The lack of system control or systematic failure of important business leads to the serious deviation of the company from the control objectives.
Important defects the company believes that there are important defects in the internal control of non-financial reporting, including: ① the implementation of the decision-making procedures for “three important and one major” matters is not in place; ② Serious violations of local laws and regulations occurred this year; ③ The implementation of important business systems is not in place, which may cause the company to deviate from the control objectives in this field.
General defects other internal control defects of non-financial reporting except the above major defects and important defects.
（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 any significant defects in internal control over financial reporting during the reporting period □ 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 IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year □ applicable √ not applicable 2 Description of other major events
√ applicable □ not applicable
Ernst & Young Huaming Certified Public Accountants (special general partnership), the external auditor employed by the company, has audited the effectiveness of the company’s internal control related to financial reporting on December 31, 2021 and issued a standard unqualified audit report.
Chairman (authorized by the board of directors): Zhao Keyu Huaneng Power International Inc(600011) March 23, 2022
