Self evaluation report on internal control in 2021
Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) 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 standard system”), combined with the internal control system and evaluation methods of Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) (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 on December 31, 2021 (the benchmark date of the 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 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) 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.
1. The main units included in the scope of evaluation include the following:
The main units included in the evaluation scope include the parent company, 9 subsidiaries and 3 subsidiaries. The subsidiaries include Dongguan Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) Water Treatment Technology Co., Ltd., Xinjiang Baolong Packaging Technology Development Co., Ltd., Dongguan Baolong Packaging Technology Development Co., Ltd., Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) North America Co., Ltd., Tianjin Baolong Packaging Technology Development Co., Ltd., Zhuhai Baolong bottle embryo Co., Ltd., Guangzhou Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) Industrial Co., Ltd Guangzhou Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) Packaging Machinery Industry Co., Ltd. and Guangzhou Luode Intelligent Equipment Co., Ltd; Sun companies are Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) Europe Co., Ltd., tisong daily chemical products (Guangzhou) Co., Ltd. and Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) packaging machinery India Private Co., Ltd. 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.
2. The main operations and matters included in the scope of evaluation include:
(1) Company structure:
Governance structure: the board of directors of the company is responsible for the general meeting of shareholders and exercises various functions and powers granted by the general meeting of shareholders according to law. It has four institutions: Strategy Committee, nomination committee, salary and assessment committee and audit committee. The Secretary of the board of directors of the company is responsible for the specific work of securities management, information disclosure, coordination of corporate affairs and investor relations management of listed companies.
Organizational structure: the company has set up an organization that meets the needs of the company’s business scale and operation management according to the division of responsibilities and management optimization. At present, the company’s organizational structure operates well, with clear responsibilities among organizations, mutual cooperation and mutual checks and balances.
(2) Internal control over subsidiaries
During the reporting period, the subsidiaries within the consolidation scope of the company include 9 subsidiaries and 3 subsidiaries. In accordance with relevant laws and regulations and the requirements of regulatory authorities, the company has formulated normative documents such as subsidiary management system and subsidiary financial management system, which stipulates that the operation and development of subsidiaries must obey and serve the development strategy and overall plan of the company. The directors, supervisors and senior managers of subsidiaries are appointed or recommended by the company, and their important personnel changes Major economic activities shall be reported to relevant functional departments of the company for review and filing. The company timely grasps the production and operation of its subsidiaries through financial statements, business meetings and other means, and focuses on and controls the financial and operational risks of its subsidiaries.
During the reporting period, the company’s management control over its subsidiaries and subsidiaries was strict, sufficient and effective, and there was no major omission.
(3) Internal control of major investment of the company
The company’s major investment follows the principles of legality, prudence, safety and effectiveness, controls investment risks and pays attention to investment benefits. The articles of Association defines the approval authority of the general meeting of shareholders and the board of directors for major investment, and formulates the investment management system, which defines the management provisions on the scope, approval authority, decision-making control, execution management, disposal control, information disclosure and other aspects of the company’s major investment management.
During the reporting period, the company fulfilled relevant approval procedures for major foreign investment, and its internal control was strict, sufficient and effective. There was no violation of the company’s internal control requirements.
(4) Internal control of related party transactions of the company
The company attaches great importance to the internal control management of related party transactions. In order to standardize the related party transactions of the company, the company has formulated the related party transaction decision system, which makes detailed provisions on the basic principles of related party transactions, matters involved in related party transactions, pricing principles of related party transactions, deliberation and implementation of related party transactions, avoidance and voting measures of related parties, etc.
During the reporting period, the company’s related party transactions fulfilled the relevant approval procedures, and its internal control was strict, sufficient and effective. There was no violation of the company’s internal control requirements.
(5) Internal control of external guarantee of the company
In accordance with the relevant requirements of the regulatory authorities, the company has formulated the external guarantee decision-making system, which clearly stipulates the basic principles of guarantee, the approval authority and approval procedures of guarantee, and the restrictions of guarantee objects.
During the reporting period, the company did not violate the provisions of external guarantee.
(6) Internal control of the company’s information disclosure
In order to standardize the company’s information disclosure and safeguard the legitimate rights and interests of the company and investors, the company has formulated the information disclosure management system, which makes it clear that the company’s information disclosure should strictly abide by the principles of fairness, impartiality and openness, and disclose information truthfully, accurately and completely.
During the reporting period, in accordance with the above relevant provisions, the company has performed strict review procedures for all disclosed periodic reports and various temporary announcements, and issued relevant announcements within the specified time limit. There are no undisclosed matters that should be disclosed.
(7) Internal control of performance appraisal
Combined with the actual situation, the company has established a series of assessment and incentive mechanisms for the management, functional departments and subsidiaries. According to the annual business objectives, determine the responsibilities and assessment indicators of each business department, functional department and management personnel respectively, conduct comprehensive assessment at the end of the year in combination with the completion of the annual plan, and implement rewards and punishments according to the assessment results. The performance evaluation and incentive work of the company’s subordinate institutions and employees has been institutionalized and normalized. (8) Internal control of information and communication
In order to improve the operation efficiency of the internal control system, the company has formulated the internal reporting system of major information, which clearly stipulates the internal information reporting obligor, the definition, report and disclosure of major information, and standardizes the release of management information in various ways to ensure smooth communication between internal departments of the company. All information management systems, databases, e-mail systems, internal information networks and websites of the company are regularly maintained by special personnel, which provides a convenient and fast platform for effective transmission and communication of all kinds of information.
During the reporting period, the company’s internal control over information disclosure was strict, sufficient and effective, and there was no violation of relevant regulations and the company’s internal control requirements.
(9) Internal supervision and control activities
The company has established an internal control and supervision system in accordance with the code for internal control of listed companies, defined the responsibilities and authorities of the internal audit department and relevant departments in internal supervision, and standardized the procedures and methods of internal supervision. In 2021, the internal audit department regularly carried out the audit of the company’s internal control management, including the routine audit of financial management, the audit of foreign investment, the audit of foreign guarantee, the audit of the occupation of related funds, the audit of securities investment and venture capital, and the audit of regular reports. The internal audit department regularly reports the relevant audit work to the audit committee, which will supervise the implementation of the audit plan and the completion of the audit work, so as to promote the standardization and institutionalization of internal supervision and control.
(10) Internal control of the company’s financial accounting
In order to standardize the company’s accounting, financial management and supervision, ensure the safety and integrity of the company’s assets, provide reliable decision-making basis for the company’s management and improve the economic benefits of the enterprise, the company has formulated the financial management system, internal control system of financial accounting and financial management system of subsidiaries in accordance with the accounting standards for business enterprises and other relevant laws and regulations issued by the Ministry of Finance and in combination with the specific conditions of the company.
The company prepares financial statements in strict accordance with the accounting system and policy requirements stipulated by the state, and strictly controls and manages the accounting, preparation and release of financial reports of the whole company to ensure the accuracy and authenticity of financial data.
(11) Internal control of property management
The inventory management system, property management system and fixed assets management system established by the company define the control processes of the company’s property, such as purchase and construction, acceptance, project payment request, maintenance, scrapping or impairment, disposal, inventory and record, and ensure the correctness, integrity and safety of fixed assets records through control measures such as budget control, authorization control and execution control, Ensure the normal operation and effective use of fixed assets.
During the reporting period, the control measures of all links of the company’s property management were effectively implemented.
(12) Internal control of sales and collection
The company has formulated a series of management systems for managing sales activities and collection, including customer development, sales order review process management, after-sales service management, and overseas organization management. For all links involving sales and collection, such as sales forecast, sales plan, determination of product sales price, order processing, review of customer credit, signing of sales contract, management of sales contract, delivery, payment settlement and return Return and discount, after-sales service, handling procedures of accounts receivable and bad debt handling have been clearly stipulated; The management regulations and process control for sales and collection formulated by the company ensure that the company can effectively explore the market, promote enterprise products and provide services at reasonable prices and expenses, help the company’s sales department to effectively organize marketing, market research, credit investigation, packaging and transportation, after-sales service and other sales activities, and ensure the correctness of accounts receivable records while improving sales efficiency Integrity and security.
During the reporting period, the departments and personnel involved in sales and collection can carry out business operations in strict accordance with the provisions of relevant management systems, and the control measures of all links can be effectively implemented.
(13) Internal control of procurement and payment
The company has formulated a series of procurement and payment management systems to standardize material procurement management, material price management, procurement payment management, warehouse management, material collection management, material warehousing management and issued goods management, and made clear provisions on material requisition approval, supplier selection, purchase order preparation, material acceptance and warehousing, collection, return processing, purchase report control, payment, warehousing, inventory and stock control; The procurement and payment system formulated by the company ensures that the company’s inventory is maintained at an appropriate and safe level. The material procurement management procedure ensures that the ordered materials meet the specifications specified in the purchase order and reduces the occurrence of supplier fraud and other improper acts. At the same time, it ensures that all received materials and relevant information are processed and timely used by production, warehousing and other relevant departments; Ensure the orderly procurement of materials, and ensure the correctness, integrity and security of the company’s accounts payable records.
During the reporting period, the departments and personnel involved in procurement and payment can carry out business processing in accordance with the above systems and regulations, and the control measures can be effectively implemented.
(14) Internal control of production management
The company has formulated work rules and assessment regulations for production personnel such as production process control procedures, as well as production management regulations such as fixed assets management measures, safety inspection and rectification management regulations, nonconforming product control procedures, safety production management regulations, quality management system and a series of management systems related to production processes; The formulation of production management system ensures that the company can carry out production activities according to the established production plan, ensure that the production process is carried out in a safe and efficient manner, and the products produced meet the relevant quality control standards.
During the reporting period, the company’s production personnel were able to carry out production activities in strict accordance with the above systems and regulations, and the control measures were effectively implemented.
(15) Internal control of salary and employee welfare management
The company has established a series of salary and employee welfare management systems such as rules of procedure of salary and assessment committee, salary management system, reward and punishment management system, attendance and leave management system, cadre selection and appointment management system and welfare management measures, as well as human resource management policies related to employee employment, promotion, training and dismissal Promotion, salary table preparation, salary payment and other processes are clearly specified; The implementation of salary and employee welfare management system and human resource management policy can ensure the stability of human resources, the normal operation of the whole system and employees’ satisfaction with the company, also ensure the reduction of turnover rate, and enable the human resource department to reasonably realize the management and control of human resource risk; The salary system stipulates that the salary of employees shall be determined in the form of labor contract and subject to the approval of management personnel at a certain level. A special person shall be responsible for checking the payroll with payroll documents and attendance records, reviewing the integrity of the payroll and ensuring the accuracy of payroll calculation.
During the reporting period, the departments and personnel specially responsible for personnel and salary management of the company can carry out personnel and salary management in accordance with the above system, and the relevant control measures can be effectively implemented.
The high-risk areas of focus mainly include: sales, procurement, production, assets, funds, investment and related party transactions.
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 and of internal control evaluation
