Securities code: Guangdong Baolihua New Energy Stock Co.Ltd(000690) securities abbreviation: Guangdong Baolihua New Energy Stock Co.Ltd(000690) Announcement No.: 2022007 Guangdong Baolihua New Energy Stock Co.Ltd(000690)
Internal control evaluation report in 2021
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
two thousand and twenty-two point zero four
Guangdong Baolihua New Energy Stock Co.Ltd(000690) 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 the company’s internal control system and evaluation methods, on the basis of daily and special supervision of internal control, We evaluated the effectiveness of internal control of Guangdong Baolihua New Energy Stock Co.Ltd(000690) (hereinafter referred to as “the company”) on December 31, 2021 (the 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 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. The units included in the evaluation scope include: the company and its wholly-owned subsidiaries Guangdong Baolihua Power Co., Ltd., Lufeng baolihua new energy power Co., Ltd., Guangdong Baoxin Asset Management Co., Ltd., Baoxin Financial Leasing Co., Ltd., Guangdong Guangdong Baolihua New Energy Stock Co.Ltd(000690) Power Sales Co., Ltd., Baoxin No. 3 private investment fund and Shanghai Huafeng Asset Management Center (limited partnership) included in the scope of the company’s consolidated financial statements, 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 businesses and matters included in the evaluation scope include: organizational structure, development strategy, human resources, social responsibility, corporate culture, capital activities, procurement business, asset management, sales business, research and development, engineering projects, construction management, guarantee business, production management, financial report, comprehensive budget, legal affairs, internal information transmission, information system, information disclosure, internal control supervision, etc; The high-risk areas of focus mainly include: capital asset activities, income, costs, investment activities, related party transactions, important risk businesses and major risk events, financial report preparation and other matters.
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 organizes and carries out internal control evaluation according to the relevant provisions of the enterprise internal control standard system and the company’s internal control evaluation methods.
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished the internal control of financial reports from the internal control of non-financial reports, studied and determined the specific identification standards of internal control defects applicable to the company, which were consistent with the previous year. The identification standards of internal control defects determined by the company are as follows: 1. Identification standards of internal control defects in financial reports
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
After considering the compensatory control measures and the actual deviation rate, the misstatement with an amount exceeding 1% of the total assets is recognized as a major defect, the misstatement with an amount exceeding 0.5% of the total assets is recognized as a major defect, and the rest are general defects. The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
(1) Signs of significant deficiencies in financial reporting include:
① Fraud by senior management of the company;
② The company corrects the published financial report;
③ The certified public accountant finds that there is a material misstatement in the current financial report, but the internal control fails to find the misstatement in the operation process;
④ The company’s supervision of internal control is invalid.
(2) Signs of significant deficiencies in financial reporting include:
① Failure to establish and apply accounting policies and anti fraud measures in accordance with generally accepted accounting standards;
② No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control;
③ There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.
(3) General defects in financial reports refer to other control defects other than the above major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
After considering the compensatory control measures and the actual deviation rate, taking the amount involved as the standard, the direct property loss accounting for 1% of the total assets of the company is a major defect, the direct property loss accounting for 0.5% of the total assets of the company is an important defect, and the rest are general defects.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The following situations can be identified as major defects, and other situations can be identified as major defects or general defects according to the degree of impact:
① The company lacks democratic decision-making procedures, such as collective decision-making procedures;
② Unscientific decision-making procedures of the company, such as wrong decision-making;
③ Violation of national laws and regulations, such as major production safety or environmental pollution accidents;
④ Loss of management personnel or technicians in key positions;
⑤ The results of internal control evaluation, especially major or important defects, have not been rectified;
⑥ Lack of institutional control or systematic failure of important business.
(III) identification and rectification of internal control defects
1. Organizational structure
In 2021, the company revised the articles of association and its annexes rules of procedure of the general meeting of shareholders, rules of procedure of the board of directors and rules of procedure of the board of supervisors to further consolidate the institutional basis of standardized governance and establish and improve the corporate governance system. The establishment of the company’s organization and the division of functions meet the requirements of internal control.
General meeting of shareholders: in 2021, the company held the 2020 annual general meeting of shareholders and the first and second extraordinary general meetings of shareholders in 2021 in accordance with relevant regulations. A total of 3 meetings were held, and 23 proposals were considered and adopted. The efficient and standardized operation of the general meeting of shareholders, scientific and compliant decision-making ensure that shareholders, especially small and medium-sized shareholders, fully exercise their equal rights.
Board of directors: in 2021, the company successfully completed the general election of the ninth board of directors, and the election procedures and electors were in compliance with the laws and regulations of the CSRC and relevant departments. The board of directors of the company has reasonable composition, clear responsibilities and scientific decision-making. The independent director system has been effectively implemented. There are 3 independent directors among the 9 members of the board of directors, which is in line with the proportion of independent directors in the board of directors. The total number of directors who concurrently serve as senior managers of the company and staff representatives in the board of directors does not exceed half of the total number of directors of the company, which is in line with relevant regulations. In 2021, the board of directors of the company held 8 board meetings and considered and adopted 34 proposals. All directors earnestly perform their duties, exercise the power of business decision-making within the scope of their duties in strict accordance with the provisions of the articles of association, rules of procedure of the board of directors and other systems, and conduct comprehensive inspection and effect evaluation of the company’s internal control on a regular basis. The board of Directors consists of strategic development committee, audit committee, remuneration and assessment committee, nomination committee and other special committees. Each special committee held a total of 6 special meetings to study professional matters and put forward opinions and suggestions for the decision-making of the board of directors in accordance with the terms of reference specified in the implementation rules of each special committee formulated by the board of directors of the company.
Board of supervisors: in 2021, the company successfully completed the general election of the ninth board of supervisors. The board of supervisors of the company is composed of three supervisors, including one employee supervisor. In 2021, the board of supervisors of the company held 7 meetings of the board of supervisors and considered and adopted 12 proposals. All supervisors earnestly perform their duties, exercise their supervisory power in strict accordance with the articles of association, rules of procedure of the board of supervisors and the functions and powers granted by the general meeting of shareholders, protect the interests of shareholders, the company and employees, and be directly responsible to the general meeting of shareholders.
Management and subsidiaries: the company formulates and continuously improves the control policies and procedures for the holding subsidiaries, urges the holding subsidiaries to establish and improve the internal control system on the basis of fully considering their business characteristics, implements flat and unified management for the holding subsidiaries, and the functional departments of the company provide professional guidance, supervision and support to the counterpart departments of the subsidiaries. The company implements unified management on the institutional setting and staffing of each holding subsidiary to ensure the effective centralization of the company’s operation and management. Each holding subsidiary operates according to the company’s overall business plan; Major matters beyond the authority of the subsidiary, such as equity transfer, related party transactions, external guarantees, asset mortgage and major investment, shall be reported to the board of directors or the general meeting of shareholders for deliberation in accordance with the provisions. In 2021, the company successfully completed the appointment of the ninth senior managers. The senior managers of the company have clear responsibilities and reasonable division of labor. According to the actual situation of the company and the requirements of the new era, the company strengthens the internal management of the company to ensure the implementation of policies and the efficient operation of business. During the reporting period, the company further focused on the core main business and successively cancelled Guangdong Baolihua Construction Engineering Co., Ltd. and Guangdong credit Bao credit investigation Management Co., Ltd., which have little relationship with the main business and have a small revenue in recent years, so as to optimize the resource allocation.
2. Development strategy
The company has established a development strategy management system to effectively control the preparation, implementation, evaluation and adjustment management of development strategies. The company implemented the development strategy into the annual work plan, effectively guided the development of important businesses, ensured the implementation and effective implementation of strategic planning, ensured the scientificity, effectiveness and timeliness of strategic management, and promoted the sustainable, healthy and stable development of the company.
In 2021, with standardized corporate governance, good business performance and the concept of sustainable development, the company was successively awarded the honorary titles of “golden round table award of the board of directors – excellent board of directors”, “China top 100 enterprise award”, “2021 evergreen Award – internal control Award for sustainable development” and so on.
3. Human resources
The company has established relevant human resources management systems, standardized business operations such as human resources planning, post setting, employee entry and exit, employee assessment and training, defined the management requirements for the introduction, training, assessment, incentive and exit of human resources, optimized the rational allocation of human resources, continuously improved the professional ability of employees, and effectively mobilized the enthusiasm of all employees, Ensure the realization of the company’s business plan and strategic objectives.
In 2021, from the perspective of talent strategy, the company paid attention to the cultivation of compound management talents and professional and technical talents, strengthened human resource management, optimized human resource allocation, continued to hold various employee training, and strive to build an efficient, United and enterprising high-quality talent team. The training rate of the company’s management personnel and power plant employees reached 100%.
4. Social responsibility
The company attaches importance to the performance of social responsibility and has established relevant management systems of social responsibility in combination with the actual production and operation characteristics of the company.
(1) Safety production: the company has established a management system for safety production, including safety production target management, target implementation, formulation of safety production management standards, implementation, regular maintenance of special equipment, safety education and training, safety production monitoring and inspection, safety accident handling and statistics, assessment and evaluation, continuous improvement and emergency accident handling. The company sets up safety supervision departments such as safety committee to ensure the completion of safety production objectives through the implementation of safety production system, regular maintenance of special equipment, safety education and training, safety production monitoring and inspection and safety work assessment and evaluation. In 2021, the safety production of the company was stable and there was no major labor safety accident.
(2) Environmental protection and resource conservation: the company establishes and improves the environmental protection system and process, implements the whole process control of sewage treatment, flue gas emission, noise and solid waste, and strictly controls the emission of pollutants through the transformation of advanced environmental protection units and energy-saving technology, so as to reduce environmental pollution and resource waste.
(3) Protection of employees’ rights and interests: the company uniformly purchases five insurances and one fund for all employees, and formulates occupational disease prevention and control plan and emergency rescue plan for acute occupational poisoning to ensure employees’ occupational health and occupational health. (4) Fire safety: in strict accordance with relevant regulations, the company makes great efforts to do well in relevant fire safety work, formulates fire safety management regulations and fire safety work plan, implements the fire safety responsibility system, implements the management system of daily inspection of fire safety team, weekly inspection of department and monthly inspection of the company, and rectifies the existing fire hazards according to the inspection results.
5. Corporate culture
The company has established relevant management systems of corporate culture, standardized the way of corporate culture construction and the evaluation and adjustment of corporate culture, effectively managed corporate culture, improved the company’s quality culture, and played the role of spiritual guidance and value creation of corporate culture.
Study hard to be a man and work hard. The company uses the maxim culture to cultivate the noble morality of employees. The company develops moral cultivation, inspires work passion, sets up ideals and aspirations, and pursues life value
