Suzhou Thvow Technology Co.Ltd(002564)
Self evaluation report on internal control in 2021
Suzhou Thvow Technology Co.Ltd(002564) 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 Suzhou Thvow Technology Co.Ltd(002564) (hereinafter referred to as the “company”) 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 on December 31, 2021 (benchmark date of internal control self-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 self-evaluation report on internal control. 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 self-evaluation report.
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the benchmark date of the self-evaluation report of internal control to the date of issuance of the self-evaluation report of internal control.
3、 Self evaluation of internal control
(I) self 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, sinogy Power Engineering Co., Ltd. and its holding subsidiaries, zhanghuaji (Suzhou) heavy equipment Co., Ltd., Zhangjiagang Jiangnan Forging Co., Ltd., Wuxi Hongqi shipyard Co., Ltd., Yumen Xinneng light and heat first power Co., Ltd.
The main businesses and matters included in the evaluation scope include: organizational structure, internal audit, human resources, corporate culture, fund management, procurement management, asset management, related party transaction management, foreign investment and foreign guarantee management.
1. Organizational structure
In accordance with the company law, the guidelines for the governance of listed companies, the articles of association and other relevant provisions, the company has established a corporate organizational structure composed of the general meeting of shareholders, the board of directors, the board of supervisors, the management and the management team under the leadership of the management. The general meeting of shareholders is the highest authority of the company, which manages and supervises the company through the board of directors. The board of directors is the company’s business decision-making body, which has four special committees: audit, strategy, nomination, salary and assessment, and has formulated the corresponding working system of the special committee. The board of directors is responsible for the establishment, improvement and effective implementation of the internal control system; The management of the company is responsible for organizing and leading the daily operation of the internal control system.
The company has formulated the rules of procedure of the general meeting of shareholders, the rules of procedure of the board of directors, the rules of procedure of the board of supervisors and other systems, defined the responsibilities and authorities in decision-making, implementation and supervision, and established a more reasonable decision-making mechanism and method.
2. Internal audit
The audit committee under the board of directors of the company is directly responsible to the board of directors. As a special committee of the board of directors, it is mainly responsible for the communication of internal and external audit, internal supervision and verification of the company. During the reporting period, the audit committee communicated the audit plan, risk judgment, annual audit focus, audit schedule and other matters with the external audit institutions during the annual report audit, and urged them to carry out the annual report audit as planned.
In 2021, the audit risk control department of the company carried out a number of internal control construction work with the cooperation of various departments: (1) capital budget control
The capital budget control has been included in the daily work of the audit risk control department. The effective implementation of fund budget control is conducive to the overall planning and management of the company’s funds and enhance the planning of fund revenue and expenditure management. (2) Update the negative list manual and personalized risk list
In 2021, according to the actual operation of the company, upgrade the negative list manual and update the personalized risk list, emphasize the compliance bottom line and regulatory red line, prevent risks in key businesses and key areas, strengthen institutional and standardized management, hold the bottom line and build a strong defense line, so as to promote the sustainable and healthy development of the company.
(3) Continuously improve internal control construction
In 2021, in order to promote the steady development of the company and ensure compliance operation, the audit risk control department cooperated with functional departments to organize special training related to internal control, risk control and compliance. At the same time, according to the problems found in the internal control evaluation audit, urge all departments and subsidiaries to improve relevant systems and consolidate the construction of the internal control and risk control system of the company and its subordinate enterprises.
3. Human resources policy
The company strictly implements the employee manual, which covers recruitment and employment, attendance and leave, welfare, training, rewards and punishments, so as to make the human resource management work rule-based, realize the rational allocation of human resources, mobilize the enthusiasm of employees and promote the steady development of the company.
4. Corporate culture
Adhering to the core value of “creating the future with creators”, the company takes “intelligent technology as the guide, and its industry and business will become an international advanced and China’s first-class comprehensive solution provider and service provider for the whole life cycle” as its corporate vision, takes “management as the starting point, innovation as the driving force, and breaking the situation in development” as its goal, and takes “loyalty-oriented, attitude first and ability first” as its employment philosophy, Take “management stresses system, work stresses process and work stresses principle” as the management philosophy and “let employees have a sense of gain, let users have a sense of confidence, let society have a sense of identity and let shareholders have a sense of return” as the business philosophy, actively cultivate employees’ positive values and sense of social responsibility, encourage employees to love life and meet various challenges in work with the spirit of learning, innovation and development, Give every employee a strong sense of mission and crisis, and promote the cohesion and competitiveness of the enterprise through the promotion of corporate culture.
5. Fund management
In order to ensure fund safety and strengthen fund management, according to relevant laws and regulations and the actual situation of the company, the company has established an internal control and management system of monetary funds, which is implemented in strict accordance with the payment application, payment approval and payment procedures, and takes control measures such as incompatible job separation and authorization approval, so as to clarify the responsibilities and authorities of fund business and standardize fund management behavior.
The financial department of the company has set up full-time personnel to manage monetary funds, and unauthorized personnel are strictly prohibited from contacting and handling monetary funds. At the same time, it has improved the detailed rules for the management of monetary funds payment, the management system for bank loans and issuing letters of guarantee, the bank credit management system, etc., stipulated the maximum capital limit that authorized personnel at all levels can approve, and defined the payment application, approval Authority and responsibility of review and other links; When the purpose of the money is unclear, there are no necessary attachments or vouchers, and the amount exceeds the budget, the money will not be paid. 6. Procurement management
The company strictly controls the procurement management process, corresponding management system and approval control process. According to the supplier management system, exclusive supplier management system, designated supplier management system and administrative procurement management system, the company reduces the risks in procurement and payment links through incompatible job separation, payment approval and other control activities.
7. Asset management
The company stipulated the responsibilities of each department in the fixed assets management system, and clarified their respective rights and responsibilities and mutual constraints in the links of purchase requisition and approval, approval and implementation, acceptance and payment, disposal application and approval, etc; At the same time, the purchase, registration, management, disposal and relevant financial accounting of physical assets shall be clearly stipulated, the daily management and maintenance of fixed assets shall be strictly controlled, and the safety and integrity of the company’s assets shall be guaranteed through the implementation of regular inventory, account verification and other measures.
8. Related party transaction management
In the articles of association, related party transaction management system and other provisions, the company has clarified the scope of related party transactions, decision-making authority and procedures of related party transactions, information disclosure of related party transactions, basic principles of related party transactions, voting avoidance measures of related parties and other relevant provisions, so as to strengthen the management and control of related party transactions. In 2021, the board of directors and the general meeting of shareholders deliberated on related party transactions in strict accordance with laws, regulations, the articles of association and other relevant provisions. Raw materials, equipment, labor services and other transactions between the company and related parties are normal transactions. The transaction process follows the principles of objectivity, impartiality and fairness and does not harm the interests of the company and other non related shareholders.
9. Management of foreign investment and foreign guarantee
In the articles of association, foreign investment management system, foreign guarantee management system and other regulations, the company has defined the management procedures, approval authority, information disclosure and other relevant regulations of foreign investment and foreign guarantee, carried out classified management of projects, and carried out approval and decision-making according to the specified corresponding procedures.
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) self evaluation basis of internal control and identification standard of internal control defects
The company organizes the self-evaluation of internal control according to the enterprise internal control standard system and the basic norms of internal control.
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 standard of internal control defects in financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Misstatement amount of defect type financial report
The amount of misstatement in the financial report ≥ 5% of the total profit
The amount of misstatement in the financial report of major defects ≥ 1% of the total assets
The amount of misstatement in the financial report ≥ 1% of the total operating revenue
The amount of misstatement in the financial report ≥ 1% of the total owner’s equity
3% of total profit ≤ amount of misstatement in financial report ＜ 5%
0.5% of total assets ≤ amount of misstatement in financial report ＜ 1%
0.5% of the total operating income of major defects ≤ the amount of misstatement in the financial report ＜ 1%
0.5% of total owner’s equity ≤ amount of misstatement in financial report ＜ 1%
The amount of misstatement in the financial report ＜ 3% of the total profit
General defect
The amount of misstatement in the financial report ＜ 0.5% of the total assets
Misstatement amount of defect type financial report
The amount of misstatement in the financial report ＜ 0.5% of the total operating revenue
The amount of misstatement in the financial report ＜ 0.5% of the total owner’s equity
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects: major misstatements in the financial report cannot be prevented, found and corrected in time due to individual defects or other defects. In case of the following circumstances, it shall be deemed as a major defect:
① Fraud by directors, supervisors and senior managers;
② Material misstatement in the current financial report found by the certified public accountant but not identified by the company’s internal control;
③ The supervision of the company’s audit committee and internal audit institutions on internal control is invalid.
Important defect: the material misstatement in the financial report that cannot be prevented, found and corrected in time due to individual defects or other defects, but should still attract the attention of the management.
General defects: other internal control defects that do not constitute major defects or important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Defect type: amount of misstatement in non-financial Report
Direct or indirect economic loss of major defects 1% of net assets
0.5% of net assets with significant defects direct or indirect economic loss ≤ 1% of net assets
Direct or indirect economic loss of general defects ≤ 0.5% of net assets
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The following signs usually indicate that there may be significant defects in the internal control of non-financial reporting, and other situations are identified as significant defects or general defects according to the degree of impact:
① Violation of national laws and regulations;
② The unscientific decision-making procedure of enterprises leads to decision-making mistakes;
③ Serious loss of important management personnel and key technical personnel
④ Frequent negative news in the media;
⑤ Lack of institutional control or systematic failure of important business;
⑥ Conclusion of internal control self-evaluation
