Shenyang Yuanda Intellectual Industry Group Co.Ltd(002689)
Self evaluation report on internal control in 2021
Shenyang Yuanda Intellectual Industry Group Co.Ltd(002689) all shareholders:
In order to strengthen and standardize the company’s internal control, improve the company’s operation and management level and risk prevention ability, promote the sustainable development of the company, and safeguard the legitimate rights and interests of all shareholders and stakeholders, in accordance with the requirements of the guidelines for self discipline supervision of listed companies of Shenzhen Stock exchange No. 1 – standardized operation of listed companies on the main board and the provisions of the company law, the securities law, the basic norms of enterprise internal control, etc, Shenyang Yuanda Intellectual Industry Group Co.Ltd(002689) (hereinafter referred to as “the company” or “the company”) has established and improved the internal control system and system in combination with its own actual characteristics and conditions to prevent and control the company’s risks, and continuously adjusted and improved with the company’s business development and changes in the external environment, so as to improve the company’s risk management level and protect the legitimate rights and interests of investors. The board of directors of the company conducted a comprehensive and in-depth self-examination on the sound and effective implementation of the company’s internal control system as of December 31, 2021. On this basis, the self-evaluation of the company’s internal control is as follows:
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 manager is responsible for the daily operation of the enterprise. 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) internal control scope
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 business units included in the evaluation scope include: elevator business, Siasun Robot&Automation Co.Ltd(300024) business, wind power business, real estate business, etc. the total assets of the units included in the evaluation scope account for 100% of the total assets of the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue of the company’s consolidated financial statements.
The main businesses and matters included in the evaluation scope include: organizational structure, development strategy, human resources, corporate culture, social responsibility, internal audit, capital activities, procurement business, asset management, inventory management, sales management, financial report, information system, related transactions, external guarantee, internal control of major investment, internal control of information disclosure, etc.
The high-risk areas of focus mainly include: capital activities, procurement business, sales management, financial reporting, related party transactions, guarantee business, internal control of major investments, 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.
(II) basis of internal control evaluation and identification standard of internal control defects
The company repeatedly organizes and carries out internal control evaluation according to the enterprise’s internal control system.
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 identification standards for 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 standards of internal control defects in financial reports
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Category major defect important defect general defect operating revenue potential misstatement amount greater than or equal to misstatement amount greater than or equal to misstatement amount less than 1% of operating revenue 0.5% of operating revenue and 0.5% of small revenue
1% of operating income
The amount of misstatement is greater than or equal to the amount of misstatement, greater than or equal to the amount of misstatement, less than 1% of the total assets, 0.5% of the total assets and 0.5% of the small total assets
1% of total assets
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects include:
a. Fraud of directors, supervisors and senior managers of the company;
b. The supervision of the audit committee and internal audit institutions on internal control is invalid;
c. The external audit found that there was a major misstatement in the current financial report, and the company failed to find the misstatement in the process of operation.
Significant deficiencies include:
a. Failure to select and apply accounting policies in accordance with GAAP;
b. Failure to establish fraud prevention and important checks and balances system and relevant measures;
c. There are individual or multiple defects in the financial report, which have affected the authenticity and accuracy of the financial report, although they have not reached the identification standard of major defects.
General defects include:
Other internal control defects that do not constitute major defects and important defect standards.
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:
Significant negative impact on the amount of defect grade misstatement
It has a great negative impact on the company, and has been disclosed with major defects of more than 10 million yuan, which has a serious negative impact on the disclosure of the company’s regular reports
The important defect of RMB 5 million-10 million was punished by the national government department, but it did not have a negative impact on the company
General defects below RMB 5 million were punished by departments below the provincial and ministerial level, but did not have a negative impact on the company
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Major defects refer to:
The possibility of defects is high, which will seriously reduce the work efficiency or effect, or make the effect have great uncertainty or deviate from the expected indicators;
Significant defects refer to:
The possibility of defects is high, which will significantly reduce the work efficiency or effect or increase the uncertainty of the effect or make it significantly deviate from the expected indicators;
General defects refer to:
Defects are less likely to occur, which will reduce the action efficiency or effect, increase the uncertainty of the effect, or deviate from the expected goal.
(III) specific contents of internal control evaluation
With the continuous efforts of the board of directors, management and all employees, the company has established a relatively complete and effective internal control system, which provides a reasonable guarantee for the legal compliance of the company’s operation and management, asset safety, the authenticity and integrity of financial reports and relevant information, improves the operation efficiency and effect, and promotes the realization of the company’s development strategy. The establishment and implementation of the company’s internal control system are as follows:
1. Corporate governance structure
The company has established a standardized governance organization with the general meeting of shareholders, the board of directors and the board of supervisors as the core, and clarified the functions and powers of the general meeting of shareholders, the board of directors and the board of supervisors through system construction.
(1) General meeting of shareholders
The general meeting of shareholders is the highest authority of the company. Shareholders exercise their rights according to law through the general meeting of shareholders. The general meeting of shareholders of the company has formulated clear rules of procedure for the general meeting of shareholders, which specify the convening and voting procedures of the general meeting of shareholders, as well as the authorization principle of the general meeting of shareholders to the board of directors. Through the shareholders’ meeting system, the company has established and improved effective channels of communication with shareholders, actively listened to the opinions and suggestions of shareholders, ensured that all shareholders have equal rights to know, participate and vote on major matters of the company stipulated in laws, administrative regulations and the articles of association, and ensured the work efficiency and scientific decision-making of the shareholders’ meeting, so as to enable investors to obtain good investment returns. (2) Board of directors
The board of directors is the management decision-making body of the company. The general meeting of shareholders of the company elects directors in strict accordance with the selection and appointment procedures stipulated in the company law and the articles of association. The number and composition of the board of directors of the company meet the requirements of laws and regulations. The current board of directors has 9 members, including 3 independent directors.
The convening, convening and decision-making procedures of the board of directors of the company shall be carried out in strict accordance with relevant regulations, and the company shall provide the participating directors with complete information related to the discussion of proposals. The notice time, authorization and other matters of the board of directors comply with relevant regulations. The minutes of the board meeting shall be kept complete and safe. The resolutions of the board meeting shall be disclosed in a timely manner in accordance with the Listing Rules of Shenzhen Stock Exchange, the rules of procedure of the board of directors and the information disclosure management system.
There are four special committees under the board of directors, including audit committee, strategy committee, nomination committee and salary and assessment committee, to carry out specific work within their respective scope. The audit committee office is responsible for the communication and coordination between the board of directors and the company’s management. The company has an internal audit department, which is responsible for the audit and supervision of relevant internal control problems under the specific business environment, effectively putting forward rectification opinions, and reporting to the Audit Committee regularly or for special problems.
(3) Board of supervisors
The board of supervisors is the supervisory body of the company. The board of supervisors of the company strictly implements the relevant provisions of the company law and the articles of association. The number and personnel meet the requirements of laws and regulations. The board of supervisors of the company is composed of three supervisors, including one employee representative supervisor. The general meeting of shareholders of the company formulated the rules of procedure of the board of supervisors to clarify the discussion methods and voting procedures of the board of supervisors, so as to ensure the effective supervision of the board of supervisors. The articles of association stipulates that the board of supervisors shall enjoy the right to know, suggestion, report and supervision conferred by laws and regulations.
Other main organizational structures of the company are: finance department, internal audit department, personnel department, information department, securities department, R & D center, strategic procurement department, equipment support department, China Sales Department, international trade department, operation Department, installation department, maintenance department, quality supervision department, etc. all functional departments have a clear division of labor, take their own responsibilities, cooperate with each other, check and balance each other and supervise each other.
2. Development strategy
The company defines “independent brand, independent intellectual property rights and independent marketing network” as the overall development strategy. “Independent brand” refers to taking the brand as a symbol of enterprise strength, taking branding as a means of increasing enterprise value and improving enterprise image, and improving the competitiveness of enterprises with the promotion of brand, so as to produce brand effect. “Independent intellectual property rights” means that enterprises take science and technology as the guide, innovation as the idea, adhere to the road of independent product research and development, and inject fresh activity into the development of enterprises with scientific and technological power, so as to obtain sustainable market competitive advantage and sustainable profitability of enterprises.
“Independent marketing network” refers to the establishment of its own marketing network and the construction of marketing channels in Chinese and international markets for product sales. Rely on independent development, truly improve the market share of products, obtain rich profits, and win broad development space for enterprises.
3. Human resources
The company always adheres to the concept of “people-oriented”, regards talent training as the driving force for the continuous development of the company, and continuously increases the investment in human resources. Through job competition, internal training, job trial and other effective ways to improve the quality of employees, enhance the degree of job adaptability of employees, and create a job mechanism in which talents adapt and coordinate with positions. Through targeted, systematic, step-by-step and professional training for all employees, a large number of high-quality talents with professional ability have been trained.
4. Corporate culture
The company has set “respect, communication, understanding, integration and pursuit” as the tone of the company’s culture.
Strive to create a cultural atmosphere of “respect” and advocate the business environment of respecting labor, knowledge, talents and creation; Strive to create a cultural atmosphere of “communication”, create a loose and equal communication mechanism, reduce communication costs and improve enterprise operation efficiency; Strive to create a cultural atmosphere of “understanding”, understand and look at problems from the position of the other party, know yourself and the other party, make communication produce understanding, understand and create win-win; Strive to create an “integrated” environment
