Shanghai Ganglian E-Commerce Holdings Co.Ltd(300226)
Self evaluation report on internal control in 2021
According to 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 internal control system and evaluation methods of Shanghai Ganglian E-Commerce Holdings Co.Ltd(300226) (hereinafter referred to as the company or the company, the company and its subsidiaries are collectively referred to as the group), on the basis of daily and special supervision of internal control, 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 self-evaluation report in accordance with the provisions of the enterprise's internal control standard system. The board of supervisors supervises the establishment and implementation of internal control by the board of directors, and 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.
2、 Objectives and principles for the company to establish internal control system for financial reporting
（1） Objectives of the company's internal control system over financial reporting
It is the responsibility of the board of directors and management of the company to establish, improve and effectively implement internal control. The company's control objectives are to reasonably ensure the legal compliance of enterprise operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of enterprise development strategy. Internal control has inherent limitations, so it can only provide reasonable assurance to achieve the above objectives; Moreover, the effectiveness of internal control may also change with the changes of the company's internal and external environment and business conditions. The company has an inspection and supervision mechanism for internal control. Once internal control defects are identified, the company will take corrective measures immediately.
（2） Basic principles for the establishment of the company's internal control system for financial reporting
The internal control of financial reporting complies with the requirements of relevant national laws and regulations, the guidelines for the standardized operation of companies listed on the gem and other relevant provisions of Shenzhen Stock Exchange, and the actual situation of the company.
1. Principle of comprehensiveness. Internal control runs through the whole process of decision-making, implementation and supervision, covering various businesses and matters of the company and its holding subsidiaries.
2. Principle of importance. Focus on important businesses and high-risk areas on the basis of comprehensive control.
3. Principle of checks and balances. Restrict and supervise each other in terms of governance institutions, institutional settings, distribution of rights and responsibilities, business processes, and take into account the operation efficiency at the same time.
4. The principle of objectivity. During the evaluation of internal control, objectively and accurately reveal the risk status of operation and management, and truthfully reflect the effectiveness of the design and operation of internal control.
5. Principle of adaptability. The internal control shall adapt to the business scale, business scope, competition and risk level of the enterprise, and shall be adjusted in time with the changes of the situation.
6. Cost benefit principle. In the process of internal control design and implementation, weigh the implementation cost and expected benefits to achieve effective control at an appropriate cost.
3、 Overall situation of internal control evaluation
（1） 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.
The main units included in the evaluation scope include: the parent company and each holding subsidiary. 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, and the total operating revenue accounts for 100% of the total operating revenue in the company's consolidated financial statements; The main items included in the evaluation scope include: internal control environment, risk assessment, control activities, information and communication, and internal supervision.
（2） Internal control elements of the company
1. Control environment
(1) Corporate governance structure and rules of procedure
The company is a listed company listed on the gem of Shenzhen Stock Exchange in strict accordance with the company law and other relevant laws and regulations and the normative documents of the CSRC. The company actively improves the corporate governance structure, establishes a modern enterprise system and standardizes the operation of the company. In order to protect the interests of shareholders and protect the company's resources, the company issued the system for preventing the occupation of funds by major shareholders and their related parties and the management system of related party transactions. In order to maintain the openness, fairness and impartiality of the company's information disclosure, the company formulated the information disclosure management system, further established a perfect decision-making and supervision mechanism, and disclosed major information in a timely, accurate and complete manner. The major events and decisions of the company were made public to the public in a timely manner in the "investor relations" column of cninfo.com and the company's website designated by the CSRC, It ensures the right to know of minority shareholders.
The company has established the independent director system to effectively supervise the relevant decisions of the board of directors, and the number of independent directors meets the provisions of national laws and regulations. The board of directors has four special committees: the strategy committee, the audit committee, the nomination committee and the Remuneration Committee to provide professional advice for the decision-making of the board of directors. In accordance with the articles of association, the company has formulated a series of management systems, including 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, the working rules of the strategy committee, the working rules of the nomination Committee, the working rules of the Remuneration Committee, the working rules of the audit committee, the working rules of the general manager, the management system of raised funds and the notification system of major events The board of supervisors and the management have their own responsibilities, and the operation is coordinated and effective.
(2) Organization setting
In accordance with the requirements of relevant laws, regulations and regulatory authorities, the articles of association and the actual operation of the company, the company has established an organization that meets the needs of the company's business scale and operation and management. The company strictly implements the principle of incompatibility and separation of duties by reasonably dividing the responsibilities and post responsibilities of each department, and adjusts the internal institutions of individual departments with the needs of the company's business development, so as to form a clear division of labor between each department The mechanism of mutual cooperation and checks and balances ensures the orderly and healthy operation of the company's production and operation activities and the realization of control objectives.
(3) Basic information of internal audit
An audit committee is established under the board of directors to be responsible for the communication, supervision and verification of internal and external audit. The company sets up an audit department as the internal audit department to inspect and supervise the authenticity and integrity of the company's financial information and the establishment and implementation of internal control system. The audit department is responsible to the audit committee and reports to the audit committee. The audit department is independent of the management. According to the audit work plan, by carrying out routine project audit, special audit or special investigation, the audit department supervises and checks the effectiveness of the company's internal control design and operation, evaluates the efficiency and effect of the internal control design and implementation, and promotes the continuous improvement and improvement of the quality of internal control work. Report the internal control defects found in the audit or investigation to the board of supervisors, the audit committee or the management according to the severity of the problems, and urge relevant departments to take positive measures to rectify them. During the reporting period, the company's internal audit management level was complete and the control was sound and powerful.
(4) Human resources policy
The company's human resource management policy is formulated to improve the requirements of corporate governance structure and meet the actual needs of the enterprise. Now, the company has formulated and implemented the rules and regulations of human resource management norms such as employee manual, including employee recruitment, labor relations management, employee training, employee attendance, Vacation Management, performance assessment, salary and welfare management, labor cost control, senior management salary, cadre appointment and assessment, etc, All systems follow the procedures of democratic consultation and decision-making according to law.
(5) Corporate culture
Adhering to the enterprise spirit of "diligence, integrity, profit and wisdom", the company cultivates positive values and sense of social responsibility, advocates honesty and trustworthiness, love and dedication, pioneering and innovation and teamwork, establishes modern management concept and strengthens risk awareness. Directors, supervisors, managers and other senior managers have played a leading role in the construction of corporate culture. The company's employees also actively abide by the employee code of conduct and earnestly perform their post responsibilities. The whole company has a good working atmosphere.
(6) Social responsibility
The company advocates the people-oriented concept. The company's business determines that employees do not contact dangerous goods and other means of production. The company's business activities do not produce any environmental pollution. The company has a special person to inspect and close the power facilities that are still open after work every day, and advocates the recycling of paper to save valuable resources; The company's information quality enjoys a very good reputation among customers. The annual customer satisfaction survey results reflect the company's excellent information quality and excellent staff service quality. The company organizes physical examination of employees every year and arranges team building activities; Organize business training throughout the company every week, focusing on the long-term training of employees. Conduct employee satisfaction survey and customer satisfaction survey regularly every year, and listen to the voice of employees and customers.
2. Risk assessment process
The company has formulated reasonable control objectives and established an effective risk assessment mechanism to identify and respond to internal and external risks related to the realization of control objectives and determine the corresponding risk tolerance. In order to promote the sustainable, healthy and stable development of the company and achieve its business objectives, the company comprehensively, systematically and continuously collects relevant information according to the established development strategy and in combination with different development stages and business expansion, timely carries out risk assessment, dynamic risk identification and risk analysis, and adjusts risk response strategies accordingly.
Relevant departments of the company regularly review the economic situation, industrial policies, market competition, resource supply and other external risk factors; Collect and study social factors such as safety and stability, cultural tradition, social credit, education level and consumer behavior, as well as internal risk factors such as financial status, capital status, asset management and operation management, and conduct risk analysis and assessment by combining quantitative and qualitative methods, so as to provide basis for the management to formulate risk response strategies.
3. Information system and communication
Establish a system for the safe development, storage and stability of the company's information system, and ensure the safe input and output of data. The management of the company also provided appropriate human and financial resources to ensure timely communication of information and promote the effective operation of internal control.
(1) Smooth information collection channels
The company can obtain internal information through financial and accounting materials, operation and management materials, research reports, special information, internal publications, the company's website and other channels; External information can also be obtained through industry associations, social intermediaries, business units, market research, letters and visits, online media and relevant regulatory authorities.
(2) Timely information transmission procedures
The company can timely communicate and feed back information related to internal control among internal management levels, responsible units and business links, as well as between the enterprise and external investors, creditors, customers, suppliers, intermediaries and regulatory authorities. Problems found in the process of information communication can be reported and solved in time. Important information can be transmitted to the board of directors, the board of supervisors and the management in time.
(3) Information system operation security
Establish a system for the safe development, storage and stability of the company's information system, and ensure the safe input and output of data.
4. Control activities
The company has necessary control policies and procedures for its main business activities. The management has clear objectives for budget, profit, other financial and operating performance. The company has clear records and communication on these objectives, and actively monitors them. The financial department has established appropriate protection measures to reasonably ensure that the contact and handling of assets and records are properly authorized; Reasonably ensure that the book assets are consistent with the actual assets on a regular basis.
In order to reasonably ensure the realization of various objectives, the company has established relevant control procedures, mainly including incompatible job separation control, authorization approval control, accounting system control, property protection control, independent inspection control, operation analysis control and performance evaluation control.
(1) Incompatible job separation control
The company has comprehensively and systematically analyzed and sorted out the incompatible positions involved in the business process, implemented corresponding separation measures, and formed a working mechanism of performing their respective duties, assuming their respective responsibilities and restricting each other. Incompatible positions mainly include: authorization approval and business execution, business execution and audit supervision, property custody and accounting records, business handling and business audit, etc.
(2) Authorization approval control
The company has divided the authorization approval control into general authorization and special authorization, and clarified the scope of authority, approval procedures and corresponding responsibilities for each post to handle business and matters. For general authorized projects, authority guidelines have been prepared to clearly standardize their scope, authority, procedures and responsibilities; For special authorization projects, they shall be reported to the general meeting of shareholders or the board of directors for approval after being reviewed by relevant functional departments of the company, and special authorization shall be strictly controlled.
(3) Accounting system control
The company has confirmed, measured and prepared financial statements in strict accordance with the accounting law and accounting standards for business enterprises, and clarified the processing procedures of accounting vouchers, accounting books and financial reports to ensure the authenticity and integrity of accounting materials. The basic work of accounting is perfect, the setting of accounting institutions is complete, the accounting practitioners are allocated in accordance with the requirements of the state on accounting qualification, and the institutions and personnel meet the relevant independence requirements.
(4) Property protection control
The company has established a daily property management system and a regular inventory system, and taken measures such as property records, physical storage, regular inventory, account verification, restricted access and disposal to ensure property safety.
(5) Independent audit control
The company has set up a special internal audit organization to review the authenticity, accuracy and completeness of procedures of monetary funds, securities, vouchers, account books and records, material procurement and the consistency between accounts and reality.
(6) Operation analysis control
The company has established an operation analysis system. The management timely and comprehensively uses the information of operation, purchase and sale, investment, financing and finance, and regularly carries out operation analysis through factor analysis, comparative analysis, trend analysis and other methods to find out the existing problems, find out the causes and improve them in time.
(7) Performance appraisal control
The company has established and implemented a performance appraisal system, set up an appraisal index system, and conduct regular appraisal and objective evaluation on the performance of all responsible units and all employees within the enterprise. The evaluation results will be used as the basis for determining employees' salary and job promotion, evaluation, demotion, job transfer, dismissal, etc.
5. Supervision of control
In order to standardize management, the company continues to revise and improve various internal control systems, and supervises and inspects the company's internal control management through standardizing system review and release procedures, internal audit, risk identification and evaluation, etc.
The board of directors of the company guides the inspection and supervision of internal control, and reviews the internal control and supervision report submitted by the inspection and supervision department, that is, the internal audit department of the company, as an evaluation of the operation of internal control
