Tibet Summit Resources Co.Ltd(600338)
Internal control evaluation report in 2021
Tibet Summit Resources Co.Ltd(600338) 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 (hereinafter referred to as the company’s) internal control system and evaluation methods, and 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 internal control evaluation report). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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.
4. Factors affecting the evaluation conclusion of internal control effectiveness from the benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
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. 5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company’s internal control evaluation report √ yes □ no III Internal control evaluation (I) 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 and high-risk areas. 1. The main units included in the evaluation scope include: (1) the headquarters of the company; (2) Subsidiaries: Everest International Trading (Shanghai) Co., Ltd., Tazhong Mining Co., Ltd. and Tibet Summit Resources Co.Ltd(600338) resources (Hong Kong) Co., Ltd Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company’s consolidated financial statements 100
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company’s consolidated financial statements The main operations and matters included in the scope of evaluation include:
Organizational structure, human resources, corporate culture, capital activities, asset management, sales business, production management, engineering projects, financial reports, contract management, information systems, etc. 4. High risk areas of focus mainly include:
None. 5. 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. Is there any major omission □ yes √ No 6 Is there a statutory exemption
□ yes √ no
7. Other explanatory matters
None (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 enterprise internal control standard system and evaluation methods. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
The board of directors of the company distinguished the internal control of financial report from the internal control of non-financial report according to the identification requirements for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the previous years. 2. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Total assets misstatement ≥ 3% 1% ≤ misstatement 3% misstatement 1%
Operating income misstatement ≥ 3% 1% ≤ misstatement 3% misstatement 1%
Net assets misstatement ≥ 1%, 0.5% ≤ misstatement 1%, misstatement 0.5%
Total profit misstatement ≥ 5% 2% ≤ misstatement 5% misstatement 2%
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects a. the business activities of the enterprise seriously violate national laws and regulations; B. Discover the fraudulent acts of directors, supervisors and management that have a significant impact on the financial report; C. Correct the published financial report to reflect the correction of material misstatement caused by error or fraud; D. 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; E. The audit committee and Audit Department of the company have ineffective supervision on the external financial report and internal control of financial report of the company; F. Major litigation cases that have a serious negative impact on the company have occurred, affecting the continuous operation of the company.
Important defect whether the defect has reasonable possibility to cause the internal control of the enterprise not to prevent or detect and correct the misstatement of financial report in time. Reasonable possibility refers to the possibility that is greater than the small possibility (almost impossible). Determining whether there is a reasonable possibility involves the professional judgment of the evaluator.
General defects refer to other control defects other than major defects and important defects.
3. 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Amount of property loss amount of major defect property loss total assets
3%
Amount of property loss 1% of total important defect assets property loss
Amount ≤ 3% of total assets
Property loss amount general defect property loss amount ≤ total assets
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects A. major mistakes caused by decision-making procedures; B. Lack of institutional control or systematic failure of important business, and lack of effective compensatory control; C. Serious loss of senior managers and senior technicians; D. The results of internal control evaluation, especially major defects, have not been rectified; E. Other situations that have a significant negative impact on the company.
Major defects A. general mistakes caused by decision-making procedures; B. Defects in important business systems or systems; C. Serious loss of business personnel in key positions; D. The results of internal control evaluation, especially the important defects, have not been rectified; E. Other situations that have a great negative impact on the company.
General defect a. the efficiency of decision-making procedure is not high; B. Defects in general business system or system; C. Serious loss of business personnel in general posts; D. General defects have not been rectified; E. There are other defects.
（3） Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
None. 1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified □ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company has any important defects in the internal control of financial reporting that have not been rectified □ yes √ No 2 Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.2 Important defects
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period □ yes √ no
2.3. General defect
None. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in the non-financial reporting internal control that have not been rectified □ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company finds any important defects in non-financial reporting internal control that have not been rectified □ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year □ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
□ applicable √ not applicable 3 Description of other major events
√ applicable □ not applicable
If there is no significant difference in the reporting period, there is no need to explain other matters related to the company’s internal control.
Chairman (authorized by the board of directors): Huang Jianrong Tibet Summit Resources Co.Ltd(600338) April 18, 2022
