Runa Smart Equipment Co.Ltd(301129)
Self evaluation report on internal control in 2021
Runa Smart Equipment Co.Ltd(301129) all shareholders:
Runa Smart Equipment Co.Ltd(301129) (hereinafter referred to as "the company") 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 "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 the company's internal control on December 31, 2021 (benchmark date of internal control evaluation report), and now report the company's internal control 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 management is responsible for organizing and leading the daily operation of the company'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、 Scope of internal control evaluation
The company determines the main units, businesses and matters as well as high-risk areas included in the evaluation scope according to the risk oriented principle.
The units included in the evaluation scope include the headquarters of the company and all wholly-owned subsidiaries of the company. 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: internal environment, risk assessment, control activities, information and communication, internal supervision, sales business, procurement business, engineering construction management, production business, fixed assets management, financial management, R & D management, human management and related party transaction management. The high-risk areas of focus mainly include: internal control in sales and collection, internal control in procurement and payment, internal control in engineering construction management, internal control in production and storage, internal control in R & D project management and internal control in financial management. The above units, businesses and matters included in the evaluation scope cover the main aspects of the company's operation and management, and there are no major omissions.
4、 Objectives and principles for the company to establish internal control system
(I) objectives followed by the company in establishing internal control system
1. Establish and improve the internal governance and organizational structure, form a scientific decision-making, implementation and supervision mechanism, ensure the legal compliance of the company's operation and management and the orderly conduct of business activities, improve the operation efficiency and effect, and promote the enterprise to realize the development strategy.
2. Standardize the company's business behavior and ensure the authenticity, accuracy and integrity of accounting materials, financial statements and relevant information.
3. Establish an effective risk control system, strengthen risk management and ensure the healthy operation of the company's business activities.
4. Establish a good internal control environment, plug loopholes, eliminate hidden dangers, prevent and correct errors, violations and fraud in time, and protect the safety and integrity of the company's assets.
5. Ensure the implementation of relevant national laws and regulations, departmental rules, normative documents and the company's internal rules and regulations.
(II) basic principles followed by the company in establishing internal control system
1. Compliance principle. Enterprises must engage in their business activities within the scope stipulated by national laws and regulations, and cannot engage in illegal operations, let alone engage in illegal activities with the help of internal control.
2. Principle of importance. Internal control should pay attention to important business matters and high-risk areas on the basis of comprehensive control.
3. The principle of comprehensiveness. Internal control shall run through the whole process of decision-making, implementation and supervision, covering various businesses and matters of the company and its subsidiaries.
4. Principle of checks and balances. Internal control should form the role of mutual restriction and mutual supervision in the aspects of governance structure, institutional setting, distribution of rights and responsibilities, business process, etc., while taking into account the operation efficiency.
5. Principle of adaptability. The internal control shall adapt to the company's business scale, business scope, competition and risk level, and shall be adjusted in time with the changes of the situation.
6. Cost benefit principle. Internal control should weigh the implementation cost and expected benefits, so as to obtain the best economic benefits with reasonable cost control.
5、 Basic information of the company's internal control
In order to ensure the normal operation of the company's business activities and protect the safety and integrity of assets and the realization of business objectives, the company has formulated sales and collection policies according to the asset structure and operation mode, combined with the specific conditions of holding subsidiaries, and in accordance with the company law, securities law, accounting law, basic norms for enterprise internal control, guidelines for internal control of listed companies and other relevant laws and regulations Purchase and payment, production and storage, product research and development, quality management, capital and asset management, information system management, human resource management, subsidiary (Branch) management, investment and financing management, external guarantee, related party transaction management, business outsourcing and other relatively complete and scientific internal control systems, which are constantly supplemented and improved according to the changes of the company's business development and business environment. The construction and implementation of the company's internal control system as of December 31, 2021 are as follows:
1. Internal environment
(1) Governance structure
The responsibilities of the corporate governance have been clarified through the articles of association and other documents. The general meeting of shareholders is the highest authority of the company and carries out daily management and supervision of the company through the board of directors. The board of directors of the company is composed of 9 directors, including 3 independent directors and 1 Chairman of the board of directors. The board of directors has a strategy committee, an audit committee, a nomination committee and a remuneration and assessment committee to ensure the effective supervision of the board of directors over the management and improve the corporate governance structure.
(2) Organization setup and distribution of rights and responsibilities
The internal institutions set up by the company include: finance department, R & D center, marketing management department, production and manufacturing department, human resources and administration department, quality control department and supply chain department. By reasonably dividing the responsibilities of each department and post, and implementing the principle of separation of incompatible positions, a mechanism of clear division of labor, mutual cooperation and mutual checks and balances is formed between each department, which ensures the orderly and healthy operation of the company's production and operation activities and the realization of control objectives. The internal organization chart of the company is as follows:
The board of directors is responsible for the establishment, improvement and effective operation of the company's internal control; The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors; The management of the company is responsible for the effective implementation of the internal control system. The company establishes an internal audit institution to supervise the rectification of internal control defects found in the inspection, and has the right to report in accordance with the company's internal audit procedures.
(3) Development strategy
The company formulates annual business plan and budget report, and ensures the realization of objectives through management and control measures. Through regular budget and operation analysis, timely grasp the market information and the company's operation, make corresponding management decisions and countermeasures, and guide the management and operation behavior.
The strategy committee under the board of directors is responsible for studying and making suggestions on the company's long-term development strategy. The members of the strategy committee have professional competence, which can ensure the effective performance of their duties and the effective decision-making mechanism; The formulation of development strategy is more scientific and the goal is reasonable; Effective formulation of strategic planning; The development strategy has been effectively decomposed and implemented; The implementation of the strategy has been effectively monitored.
(4) Human resources policy
Human resources policy the company has established and implemented more scientific personnel management systems such as employment, training, job rotation, assessment, reward and punishment, promotion and elimination; Formulate and implement targeted training plans to ensure that the management and all employees can effectively perform their duties; The company's existing human resources policy can ensure the stability of human resources and the demand for human resources of all departments of the company. At the same time, the company continues to introduce new talents, forming an internal orderly talent competition mechanism to provide guarantee for the sustainable development of the company.
(5) Corporate culture and social responsibility
The company continues to improve the construction of corporate culture. Directors, supervisors and other senior managers play a leading role in the construction of corporate culture and improve employees' sense of belonging and responsibility to the enterprise. With the mission of realizing the green, low-carbon and sustainable development of society, the company practices the win-win development model with the government, society, industry and customers, and is committed to becoming the creator of outstanding value in the field of smart heating in China. The company adheres to the innovation driven development strategy, deeply integrates the traditional heating industry with advanced technologies such as the Internet of things, big data and cloud computing, and actively explores the application of artificial intelligence in the heating and energy saving industry, so as to build the core products and service capabilities of the whole industry chain and empower the innovation of the traditional heating industry.
2. Risk assessment and response
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. Reasonably set up internal control or appropriately modify and adjust the original internal control, adopt corresponding strategies, formulate risk prevention and control items and standards for the identified and acceptable risks, clarify the methods of controlling and reducing risks, and conduct continuous inspection and regular evaluation.
3. Main control activities
The company's main business activities have necessary control policies and procedures. The management has clear objectives in budget, profit, other finance and business performance, which are fully recorded and communicated, and monitored in a timely manner. In order to reasonably ensure the realization of various control objectives, the company has established relevant control procedures, mainly including incompatible job separation, authorization approval, property protection, accounting, financial management, budget control and performance appraisal. Combined with the risk assessment results, the company uses corresponding control measures to control the risk within a reasonable range.
(1) Control of corporate governance
The company has formulated the articles of association, rules of procedure of the general meeting of shareholders, rules of procedure of the board of directors, rules of procedure of the board of supervisors, working system of independent directors and working rules of the general manager in accordance with the company law, securities law, guidelines for the articles of Association of listed companies, guidelines for internal control of listed companies, guidelines for the governance of listed companies and other relevant laws and regulations, A relatively perfect governance framework document has been formed, which provides an institutional guarantee for standardizing corporate governance, improving decision-making level and protecting shareholders' rights and interests.
① Rules of procedure of the general meeting of shareholders of the company
In order to improve the efficiency of the general meeting of shareholders, ensure the legitimacy of the procedures and resolutions of the general meeting of shareholders, and fully safeguard the legitimate rights and interests of all shareholders, the company has formulated the rules of procedure of Runa Smart Equipment Co.Ltd(301129) general meeting of shareholders in accordance with the company law, the securities law, the guidelines for internal control of listed companies, the rules of general meeting of shareholders of listed companies and other laws and regulations and the articles of association. The rules of procedure of the general meeting of shareholders have made clear provisions on the functions and powers of the general meeting of shareholders, the convening of the general meeting of shareholders, the proposals and notices of the general meeting of shareholders, the convening of the general meeting of shareholders, the voting and resolutions of the general meeting of shareholders, and the minutes of the meeting, so as to ensure the standardized operation of the general meeting of shareholders of the company. ② Rules of procedure of the board of directors of the company
In order to further improve the corporate governance structure of the company, standardize the operation of the board of directors, improve the work efficiency and scientific decision-making ability of the board of directors, and ensure that the board of directors of the company exercises its rights according to law, the company has formulated the rules of procedure of Runa Smart Equipment Co.Ltd(301129) board of directors, detailed rules of work of the strategy committee of the board of directors and Detailed rules for the work of the audit committee of the board of directors, detailed rules for the work of the nomination committee of the board of directors and detailed rules for the work of the remuneration and assessment committee of the board of directors. The rules of procedure of the board of directors and the working rules of each special committee have made clear provisions on the composition and functions and powers of the board of directors, the functions and powers of the chairman of the board of directors, the decision-making procedures and powers of the board of directors, the convening and notification of the board of directors, the convening and attendance of the board of directors, the deliberation and voting of proposals, and the minutes of the board of directors, ensuring the standardized operation of the board of directors of the company.
③ Rules of procedure of the board of supervisors of the company
In order to ensure the overall interests of shareholders and the development of the company and ensure that the board of supervisors independently exercises its supervision power according to law, the company has formulated the rules of procedure of Runa Smart Equipment Co.Ltd(301129) board of supervisors in accordance with the company law, the guidelines for the governance of listed companies and other laws and regulations and the articles of association. The rules of procedure of the board of supervisors have made clear provisions on the composition and functions of the board of supervisors, the convening, notification and attendance of the meeting of the board of supervisors, the agenda and proposal of the board of supervisors, the voting of the meeting of the board of supervisors and the minutes of the meeting of the board of supervisors, so as to ensure the standardized operation of the board of supervisors of the company.
④ Independent director system of the company
In order to further improve the corporate governance structure and promote the standardized operation of the company, the company has formulated the Runa Smart Equipment Co.Ltd(301129) independent director working system in accordance with the guiding opinions on the establishment of independent director system in listed companies and the guidelines for the governance of listed companies and other relevant provisions issued by China Securities Regulatory Commission, and in combination with the actual situation of the company. The independent director system makes clear provisions on the terms of office of independent directors, the independence of independent directors, the nomination, election and replacement of independent directors, the working conditions of independent directors, the rights and responsibilities of independent directors, and ensures the exercise of the rights and obligations of independent directors.
⑤ Work rules of the general manager of the company
The company formulates the working rules of the general manager in accordance with the company law and other laws and regulations and the articles of association. Clearly define the responsibilities and scope of authority of the management, the general manager's office meeting and report the company to the board of directors
