Houpu Clean Energy Co.Ltd(300471)
Self evaluation report on internal control in 2021
Houpu Clean Energy Co.Ltd(300471) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines, as well as other internal control regulatory requirements such as the company law, the securities law, the accounting law, the Shenzhen Stock Exchange GEM Listing Rules (hereinafter referred to as the “enterprise internal control normative system”), in combination with the internal control system and evaluation methods of the company (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 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 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 realize the company’s 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、 Overall situation of internal control evaluation
The board of directors is the highest decision-making body of the company’s internal control evaluation, which is responsible for organizing, leading and supervising the internal control evaluation, listening to the internal control evaluation report, examining and approving the rectification opinions of internal control defects, and approving the external disclosure of the internal control self-evaluation report. The audit committee is responsible for reviewing the company’s internal control, supervising the effective implementation of internal control and self-evaluation of internal control, and coordinating internal control audit and other related matters.
The board of directors of the company authorizes the audit and supervision department to be responsible for the organization and implementation of internal control evaluation, evaluate the units and high-risk fields included in the evaluation scope, and prepare the self-evaluation report of the company’s internal control.
The company has established a relatively complete and effective internal control system, from the company level to each business process level
Both have established systematic internal control and necessary internal supervision mechanisms, which provide sufficient guarantee for the legal compliance of the company’s operation and management, asset safety, the authenticity and integrity of financial reports and relevant information.
(I) basis of internal control evaluation
This internal control evaluation evaluates the effectiveness of the design and operation of the company’s internal control as of December 31, 2021 in accordance with the requirements of the basic norms of enterprise internal control and the guidelines for the evaluation of enterprise internal control jointly issued by the Ministry of finance, the CSRC, the National Audit Office, the CBRC, the CIRC and other five ministries and commissions, combined with the enterprise internal control system and evaluation methods, and on the basis of daily supervision and special supervision of internal control.
(II) scope of internal control evaluation
According to the principle of risk orientation, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas, as follows:
1. The main units included in the scope of evaluation include:
The company and its wholly-owned and holding subsidiaries within the scope of the company’s consolidated statements.
2. The main businesses and matters included in the scope of internal control evaluation include:
Corporate governance, organizational structure, internal audit, human resources, corporate culture, accounting system, monetary capital, procurement and payment, production management, sales and collection, research and development, information disclosure, related party transactions, foreign investment, foreign guarantee, management of subsidiaries and other major business areas.
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 is no key omission.
(III) construction and operation of internal control system
1. Internal control environment of the company
(1) Corporate governance
In accordance with the company law, the securities law and the provisions of the enterprise internal control standard system, the company has established and improved the general meeting of shareholders, the board of directors, the board of supervisors, the management and other management as well as the relevant rules of procedure and working system, ensuring the separation of decision-making, implementation and supervision, forming effective checks and balances. The general meeting of shareholders is the highest authority of the company, which makes decisions on major matters such as the company’s business policy, financing, investment and profit distribution, has the right to elect and dismiss directors and supervisors who are not held by employee representatives, and has extensive decision-making power on the operation and management of the company. The board of directors is the executive body of the company, which is responsible for implementing the decisions made by the general meeting of shareholders, directing and managing the company’s business activities, and reporting to the general meeting of shareholders; It has a secretary of the board of directors who is responsible for the daily affairs of the board of directors; And set up four professional committees according to their functions, including strategy, audit, nomination, salary and assessment, and formulated the working rules of each special committee, which ensured the effective performance of the responsibilities of the special committee and improved the operation efficiency of the board of directors. The board of supervisors is the supervisory body of the company, which is responsible for the general meeting of shareholders and supervises the company’s finance and the performance of duties by the company’s directors, managers and other senior managers. The management is responsible to the board of directors, organizes and implements the resolutions of the general meeting of shareholders and the board of directors, is responsible for the daily operation and management of the company, supervises the work of various functional departments, evaluates the work effectiveness of various departments, and coordinates the relationship between various departments.
The corporate governance layer operates in accordance with their own rules of procedure and working system, establishes a working mechanism of mutual coordination and checks and balances, protects the interests of the company and shareholders, and lays a solid foundation for the safe, stable, healthy and sustainable development of the company. (2) Organizational structure of the company
Based on the basic organizational framework of internal control determined by the corporate governance structure, the company adopts the management mode of “unified control and system service” to strengthen the operation management of the company according to the needs of business development and industrial strategic layout. The organizational system is divided into three levels: governance decision-making level, manager management and control level and business operation level; The management and decision-making level comprehensively leads and plans the company’s strategy and development, the manager management and control level comprehensively supervises, plans and coordinates all business units, and the business operation level is the actual business operation unit of the company and is fully responsible for the specific business work.
In order to strengthen the decision-making function of the company’s board of directors, ensure the standardized operation of the company and effective supervision over the management, the board of directors has set up the office of the board of directors, strategy committee, audit committee, nomination committee and salary and assessment committee. Each special committee performs its own duties and responsibilities, and improves the corporate governance structure.
The company has formed an effective operation mode matching the business scale and operation and management needs of the company; It has established and divided internal central functional organizations such as strategic investment department, audit and supervision department, technical committee, Procurement Committee, Houpu Research Institute, marketing center, marine business center, engineering technology service center, delivery center, financial center, administrative center, procurement center, QHSE Management Center, human resources management center, marketing department and key customer department; Then according to the characteristics of business operation, on its basis, it has set up corresponding business units.
Functional institutions and business departments have clear division of labor, sound and clear functions and mutual restraint; Supported by business processes, procedures and management systems, the principle of separation of incompatible positions has been fully implemented, forming a mechanism of mutual checks and balances.
In addition, the company’s management and control over the operation, capital, personnel, finance and other major aspects of wholly-owned and holding subsidiaries, in accordance with the provisions of laws and regulations and the articles of association, through the appointment of directors and senior managers and the combination of system norms, assessment and audit supervision, the company’s business work can be effectively extended.
The organizational structure of the company is as follows:
(3) Internal audit mechanism
There is an audit committee under the board of directors of the company. The audit committee performs its duties diligently in accordance with the working rules of the audit committee of the board of directors of the company. It is mainly responsible for the communication between the internal and external audit of the company, guiding and supervising the establishment and Implementation of the company’s internal audit system, and reviewing the company’s financial information and its disclosure.
The audit committee of the board of directors of the company has an audit and supervision department, which is a special internal audit organization of the company, equipped with full-time auditors to work independently, be responsible for the supervision and inspection of internal control, and report to the audit committee at least once a quarter; Adopt regular and irregular inspection methods to audit the integrity and effectiveness of the design and operation of relevant internal control procedures in the process of standardized operation and operation benefits of the company and wholly-owned and holding subsidiaries, and evaluate the authenticity and legitimacy of economic benefits; Report the internal control defects found in the audit process in accordance with the internal audit procedures of the enterprise; Put forward improvement suggestions in time, urge relevant departments to rectify in time, continuously track the improvement effect, ensure the effective implementation of internal control and continuously improve the standard operation level of the company.
(4) Human resources
The company has formulated and implemented human resources policies for sustainable development. According to the labor law and relevant laws and regulations, the human resources management system has been formulated; Clarify the working norms and processes of human resource planning, employee employment and management, employee training and education, employee compensation and welfare, employee performance management, employee relationship management and so on; For employees who master important trade secrets, the company will sign a confidentiality agreement with them separately to restrict and standardize their leaving behavior. Strengthen the management of the introduction, development, use and withdrawal of human resources; It ensures the legal compliance of human resources work, effectively improves the quality and efficiency of human resources work, promotes the common growth of employees and the company, and provides strong support for the sustainable development of the company.
(5) Corporate culture
Since its establishment, the company has attached great importance to the construction of corporate culture, with the initial intention of “carrying goods with integrity and benefiting the world”, the vision of “global technology leading supplier of overall solutions for clean energy equipment” and the mission of “efficient utilization of energy and improvement of human environment”; Through years of cultural accumulation and gradual induction and summary in production and operation practice, it has formed the core values of “dream, passion, innovation, learning and sharing”, the work style of “unity, efficiency, pragmatism, responsibility and perfection”, and the enterprise spirit of “continuous self-improvement and pursuit of excellence”, which fully demonstrates the spirit of sincere unity, positive progress, innovation and truth-seeking, pragmatic and diligent practice of the enterprise.
2. Risk assessment
In order to promote the sustainable, healthy and stable development of the company and achieve its business objectives, the company adheres to risk orientation, establishes risk management awareness, establishes and improves the organizational framework and operation mechanism, and effectively identifies various risks related to the realization of control objectives.
In 2021, the company has fully started the work of risk and opportunity management. Continuously and effectively identify, measure, evaluate and monitor the possible business risks, strategic risks, financial risks, market risks, policies and regulations risks and moral risks in all links of all departments of the company, weigh the risks and benefits, determine the risk response strategies, and continuously monitor and regularly evaluate the identified and acceptable risks. At the same time, the management of the company understands the information of the company’s financial status, operating results, employees and other aspects through regular office meetings and regular financial reports, and timely analyzes and discusses the information, so as to ensure that the risks are known and responded in time, so as to ensure the business safety of the company.
3. Control activities
In order to reasonably ensure the realization of various business objectives of the company, the company has determined a series of control measures for the key risks of main business flows.
(1) Incompatible job separation control
In order to prevent and timely discover the errors and fraud that may occur when performing the assigned responsibilities, the company comprehensively and systematically analyzes and sorts out the incompatible positions involved in the business process and implements corresponding separation measures when setting up each post and formulating the division of responsibilities of each post, Separate the responsibilities of “authorization and execution, execution and property custody, property custody and record, record and execution, execution and audit supervision, execution and use of financial materials”, and form a working mechanism of performing their respective duties, assuming their respective responsibilities and mutual restriction.
(2) Authorization approval control
The company adopts different authorization and approval controls according to the size and nature of the transaction and the provisions of the articles of association and various management systems of the company. For frequent human resources business, sales business, procurement business, expense reimbursement and other matters, implement the level by level authorization and approval system of each department; Major transactions such as related party transactions, external guarantees and foreign investment shall be examined and approved by the general manager, the board of directors and the general meeting of shareholders according to their responsibilities and authorization according to different transaction amounts and the nature of the matter.
(3) Accounting system control
The company formulates the accounting system suitable for the company in accordance with the accounting law and the national unified accounting standards; Set up accounting institutions according to law and allocate accounting personnel; Clarify the processing procedures of accounting vouchers, accounting books and financial accounting reports, establish and improve the management measures for the custody of accounting archives and the handover of accounting work, implement the post responsibility system of accountants, give full play to the control function of accounting and ensure the authenticity and integrity of accounting materials.
(4) Property protection control
Take measures to ensure the safety of the company’s property, such as checking and keeping the records of unauthorized personnel on a regular basis, so as to ensure the safety of all kinds of property. The company has established a series of asset custody systems and accounting file custody systems, and equipped with necessary equipment and full-time personnel, so as to fundamentally ensure the safety and integrity of assets and records.
(5) Budget control
The company implements a comprehensive budget management system, defines the responsibilities and authorities of each responsible unit in budget management and implementation, standardizes the procedures for budget preparation, approval, issuance, implementation and assessment, and strengthens budget constraints. Through budget control, the company transforms the business objectives into the specific behavior objectives of all departments, posts and even individuals, which can be used as the constraints of all responsible units to fundamentally ensure the realization of the company’s business objectives.
(6) Performance appraisal control
The company establishes and implements the performance evaluation system, organizes all business units to formulate annual business performance objectives and indicators and annual work plans, and reasonably sets up the evaluation index system; Managers at all levels shall supervise and evaluate all work, regularly assess and objectively evaluate the performance of all responsible units and all employees within the company, and take the evaluation results as the basis for determining employees’ salary, job promotion, evaluation, demotion, job transfer, dismissal, etc.
(7) Monetary fund management control
The company has formulated fund management system, reserve fund management measures, expense reimbursement management measures and other relevant systems; Strictly follow the principle of separation of incompatible posts, establish the post responsibility system of monetary capital business and strict authorization and approval procedures; Combined root
