Tongxing Environmental Protection Technology Co.Ltd(003027)
Self evaluation report on internal control in 2021
Tongxing Environmental Protection Technology Co.Ltd(003027) 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 internal control system and evaluation methods of Tongxing Environmental Protection Technology Co.Ltd(003027) (hereinafter referred to as "the company" or "the company"), on the basis of daily and special supervision of internal control, The board of directors evaluated the effectiveness of the company's internal control as of December 31, 2021 (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 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 the situation 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 evaluation conclusion
According to the identification of major defects in the company's internal control over financial reports, no major defects and major defects in the internal control over financial reports were found 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) basis of internal control evaluation
This evaluation report evaluates the effectiveness of the company's internal control design and operation as of December 31, 2021, based on the daily and special supervision of internal control, in accordance with the requirements of the basic norms of enterprise internal control and its supporting guidelines jointly issued by the Ministry of finance, the CSRC and other five ministries and commissions.
(II) 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 main units included in the evaluation scope include Tongxing Environmental Protection Technology Co.Ltd(003027) , Beijing Fangxin Lihua Technology Co., Ltd., etc. 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.
Management organization: administration department, human resources department, finance department, production department, marketing department, procurement department, audit and supervision department, securities affairs department, project operation center, safety and quality department, environmental protection and low-carbon technology research institute.
The main operations and matters included in the scope of evaluation include:
The internal control processes at the governance and control level include: organizational structure, development strategy, human resources, corporate culture and social responsibility.
The internal control processes at the business control level include: financial report, capital activities, procurement business, asset management, sales business, technology research and development, engineering project, contract management, internal information transmission and information system.
Focus on the following high-risk areas: capital activity risk, procurement management risk, sales management risk, engineering project management risk, asset management risk, accuracy and integrity of accounting information, 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.
(III) internal environment
1. Organizational structure of the company's internal control
(1) The general meeting of shareholders is the highest authority of the company. According to the terms of reference stipulated in the company law, the articles of association, the rules of procedure of the general meeting of shareholders and other laws, regulations and rules, the general meeting of shareholders deliberates and makes decisions on the company's business policies, investment plans, major transactions, changes in the company's capital, appointment and removal of directors, supervisors and other major matters. By constantly improving the provisions of the articles of association on the general meeting of shareholders and its rules of procedure, the company can ensure that all shareholders, especially small and medium-sized shareholders, enjoy equal status and that all shareholders can fully exercise their rights.
(2) The board of directors is the decision-making body of the company's operation and is responsible for the general meeting of shareholders. In strict accordance with the articles of association, rules of procedure of the board of directors and other relevant systems, the board of directors exercises the power of business decision-making within the specified scope of responsibilities, is responsible for the establishment and supervision of the company's internal control system, and is responsible for the formulation and effective implementation of the company's internal control system. The board of directors has a nomination committee, a remuneration and assessment committee, an audit committee and a strategy committee. The Secretary of the board of directors is responsible for handling the daily affairs of the board of directors.
(3) The board of supervisors is the supervisory body of the company and is responsible for the general meeting of shareholders. In accordance with the terms of reference stipulated in the articles of association, rules of procedure of the board of supervisors and other laws and regulations, supervise and inspect the company's financial status, legal operation, the implementation of the resolutions of the general meeting of shareholders by the board of directors, and whether the directors and senior managers violate laws and regulations when performing their duties, and express verification opinions on important matters of the company.
(4) The management of the company is the executive body of the company, which accepts the supervision and restriction of the board of directors and the board of supervisors, is responsible for implementing the resolutions of the general meeting of shareholders and the board of directors, and presides over the daily operation and management of the company. The marketing department, safety and quality department, production department, operation center, environmental protection and low carbon technology research institute, audit and supervision department, finance department, human resources department, administration department and other departments carry out their work according to their respective department responsibilities. Under the coordination and organization of the management, they have their own division of labor and mutual cooperation to ensure the orderly operation of the company's business activities and assist the company's management to achieve various business objectives.
The company has formed a corporate governance structure with clear rights and responsibilities between the general meeting of shareholders, the board of directors, the board of supervisors and the management, performing their respective duties, coordinating operation and strong checks and balances, and exercising their respective decision-making power, executive power and supervision power according to law.
2. Development strategy
The company has a deep understanding of the overall development of the industry. Based on the comprehensive analysis and scientific prediction of the current situation and future trend, according to the current situation, development trend and market demand of the industry, the company timely and efficiently formulates the development strategy in line with the actual situation of the company, so as to ensure the professionalism, efficiency and sustainability of the company's operation and management mode.
The company will take the strategy of serving carbon to peak and carbon neutralization, take pollution reduction and carbon reduction as the development direction and focus, promote the development of multi pollutant collaborative treatment and energy-saving and carbon reduction technology, deeply cultivate the traditional business of flue gas treatment in non electric industry with the support of low-temperature denitration catalyst and flue gas treatment project, continue to expand business fields to cement, paper and other industries and promote contract energy management while consolidating the existing advantages of iron and steel, coking and other industries, Improve the project operation service capacity and expand the business scale. Actively expand the carbon reduction business segment, carry out research and development of key new materials, sodium ion batteries and other technologies, promote carbon capture and resource utilization, cultivate new business growth poles, maintain the company's continuous innovation ability, and improve its core competitiveness and market competitive advantage. In fulfilling the mission of helping China's industrial green development, the company has achieved sustainable, stable and healthy development.
3. Human resources
The company has established and improved the human resource management and labor employment system to promote employment and protect the legitimate rights and interests of employees. The company and its subsidiaries strictly abide by the requirements of national and local laws, regulations and normative documents on labor employment and social security, pay full social insurance for employees such as pension, unemployment, medical treatment, maternity and industrial injury according to law, and formulate and implement a series of rules and regulations such as employee training management system, personnel employment management system, company performance compensation scheme and performance appraisal management measures, It has established system guarantee and system guarantee for employee recruitment, training, promotion, salary, assessment, incentive and career design. According to the business growth of the company in recent years, it has continuously introduced talents to fill the posts of management, technology and marketing, so as to provide inexhaustible source power for the sustainable and rapid development of the company.
4. Corporate culture
In the production and operation practice, the company attaches importance to the construction of corporate culture, and gradually forms the corporate philosophy of "co prosperity, CO win and co development" recognized and followed by the overall team, with the vision of building a highly competitive energy-saving and environmental protection enterprise in China, Adhering to the enterprise tenet of "creating profits for shareholders, creating value for customers and creating prospects for employees", the honest and trustworthy business philosophy and the code of conduct formed on this basis constitute an important part of the code of conduct for employees. Directors, supervisors, managers and other senior managers play a leading role in the construction of corporate culture, actively publicize corporate culture through system norms, training, publicity and implementation and expansion activities, drive and affect the whole team, and jointly create a positive corporate culture environment. In addition, the company attaches importance to the construction of corporate culture after M & A, evaluates the basic characteristics and risks of cultural differences, formulates a reasonable corporate culture integration plan, and strengthens the cultural integration of both sides of M & A. 5. Social responsibility
In accordance with national laws and regulations and in combination with the characteristics of the industry, the company actively performs social responsibilities and obligations in the process of production and operation, fully integrates them into the company's strategy and daily business activities, actively promotes the company's social responsibility work with the social responsibility management system as the starting point, and complies with the all-round development of the country and society while creating value for shareholders in the process of production, operation and business development, Strive to protect the natural environment and ecological resources, and actively fulfill the responsibilities to shareholders, creditors, employees, customers, suppliers and other stakeholders. The company attaches importance to strengthening communication and dialogue with stakeholders, understanding the opinions, concerns and suggestions of stakeholders on the sustainable development of the company, and timely incorporate the suggestions and requirements of stakeholders into the formulation and practice of the company's strategies and plans, so as to establish a healthy and friendly relationship with stakeholders, mutual benefit, mutual trust and win-win cooperation.
(IV) risk assessment
The company has systematically and objectively identified and evaluated the main risks of the company from the five aspects of strategy, market, operation, finance and law, fully considered the possibility of potential events and the impact on the realization of the company's objectives, completed the control process from risk collection and identification, risk assessment, risk response, control and supervision, and reduced the impact of risks on the company to the lowest or tolerable range.
(V) control activities
1. Take appropriate control measures
In order to reasonably ensure the realization of various objectives, the company has established relevant control systems and procedures, mainly including incompatible job separation control, authorization approval control, accounting system control, property protection control, budget control, operation analysis control and performance evaluation control.
(1) Incompatible job separation control
In strict accordance with the requirements of internal control, the company scientifically divides responsibilities and authorities, achieves reasonable division of labor, implements the principle of separation of incompatible duties, implements corresponding separation measures for incompatible duties such as application, approval, implementation, recording and supervision involved in each business process, performs their respective duties, assumes their respective responsibilities, restricts and supervises each other. Incompatible positions are mainly reflected in: business handling and authorization approval, business handling and accounting records, accounting records and accounting custody, business handling and business audit, authorization approval and supervision and inspection, business handling and business custody, etc.
(2) Authorization approval control
All businesses to be approved by the company have clear approval authority and process, and the scope of authority, approval procedures and corresponding responsibilities of each post for handling business and matters. The daily approval business of the company and its subsidiaries is remotely controlled through the information platform to ensure the efficiency and effect of authorized approval control. At the same time, the company has established and improved the authorization approval control system. The relevant systems and articles of association stipulate the approval authority of the general meeting of shareholders, the board of directors, the board of supervisors and the management on important matters such as operation, foreign investment, related party transactions, profit distribution and change of company form, and clearly stipulate the authorization and approval of various activities of the company.
(3) Accounting system control
On the premise of implementing the accounting standards for business enterprises and other relevant national regulations, the company has formulated the financial management system to improve and strengthen the functions and authorities of accounting and financial management, so as to ensure the authenticity and integrity of accounting information. At the same time, the company's accounting work realizes information processing, which improves the effectiveness of the internal control of the accounting system.
(4) Property protection control
Enterprise property protection control includes property accounting protection control and property physical protection control. The company has formulated the financial management system, which defines the management and operation process of major asset items such as monetary capital, inventory and fixed assets. The Finance Department of the company shall truly and reasonably reflect the increase and decrease of property in accordance with the accounting standards for business enterprises, conduct accounting and establish a record book for future reference. The administrative department of the company shall establish an asset management account, make regular inventory and reconcile with the financial department to ensure the consistency between the book quantity of assets and the actual quantity. The warehouse keeper shall establish a standing book for the purchase, sale and inventory of assets, handle the warehousing procedures in time, and reconcile with the finance department regularly.
(5) Budget control
The company establishes and implements a comprehensive budget management system, defines the responsibilities and authorities of each responsible unit in budget management, standardizes the procedures for budget preparation, approval, issuance and implementation, and strengthens budget constraints. Through the strict implementation of budget control, the cost is controlled at a reasonable level and the company's operating performance is improved. (6) Operation analysis control
The company establishes an operation analysis system, comprehensively uses the information of purchase and sales, investment, financing, finance and other aspects, and regularly carries out operation analysis by using the methods of factor analysis, comparative analysis and trend analysis to find out the existing problems, find out the causes and improve them in time.
(7) Performance appraisal control
The board of directors of the company has set up a salary and appraisal committee, formulated the working rules of the salary and appraisal committee and the company's performance salary scheme, established and implemented the performance appraisal system, scientifically set up the appraisal index system, regularly and objectively evaluate the performance of each responsible unit and all employees within the company, and take the appraisal results as the basis for determining employees' salary, job promotion, evaluation, demotion and job transfer. 2. Daily business activities
(1) Currency
