Shanghai Hyp-Arch Architectural Design Consultant Co.Ltd(301024)
Self evaluation report on internal control in 2021
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 Shanghai Hyp-Arch Architectural Design Consultant Co.Ltd(301024) (hereinafter referred to as the "company") 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 (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, on the benchmark date of the internal control evaluation report, the company has no major defects in the internal control over financial reporting. 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.
The company did not find any major defects in the internal control of non-financial reporting.
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
The company determines the units, businesses, matters and high-risk areas included in the evaluation scope according to the risk oriented principle. 1. Main units included in the scope of evaluation
The company and all seven subsidiaries, including Shanghai Hyp-Arch Architectural Design Consultant Co.Ltd(301024) , Shanghai chuanghuixing Technology Co., Ltd., hope design (International) Co., Ltd., Shanghai qianxu Engineering Project Management Co., Ltd., Shenzhen Huode Creative Design Co., Ltd., Shanghai hope architectural planning and Design Co., Ltd., Shanghai Lixiang Architectural Design Office (General partnership) and Shanghai Pusheng Technology 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. Main businesses included in the scope of evaluation
The main businesses and matters included in the evaluation scope include: internal environment, risk assessment, control activities, information and communication, and internal supervision. The main control activities included in the evaluation scope include: governance structure, organizational structure, subsidiary management, human resources, corporate culture, risk assessment, fund management, internal control of foreign investment, internal control of foreign guarantee, procurement management, asset management, related transactions, sales business, research and development, design project management, financial report and analysis, budget management, contract management, information and communication Internal audit, 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.
3. Control environment
The internal environment includes various factors that affect and restrict the establishment and implementation of the company's internal control. It is the basis for the implementation of the company's internal control, including governance structure, organizational structure setting and power and responsibility distribution, corporate culture, human resources policy, internal audit mechanism and anti fraud mechanism.
In accordance with the company law of the people's Republic of China (hereinafter referred to as the "company law"), the Shanghai Hyp-Arch Architectural Design Consultant Co.Ltd(301024) articles of Association (hereinafter referred to as the "articles of association") and relevant laws and regulations, the company has established the general meeting of shareholders, the board of directors, the board of supervisors and the management team under the leadership of the management, and formed a business framework composed of various departments. The company has set up various business management departments according to the needs of the company's business, management and internal control, and defined the setting of internal organization and their respective authorities and responsibilities. The company has formulated the internal management system and employee manual of each business and management department.
In accordance with the company law, the articles of association and other relevant provisions, the company has established a more reasonable decision-making mechanism and stipulated the decision-making methods of major matters:
The company has formulated the rules of procedure of the general meeting of shareholders, which clearly stipulates the functions and powers, proposals and motions, meeting notice and registration, convening, voting, resolutions and records of the general meeting of shareholders.
The company has formulated the rules of procedure of the board of directors and the working system of independent directors, which clearly stipulates the composition and functions, convening, voting and resolutions of the board of directors, the establishment and responsibilities of special committees, the composition, selection and responsibilities of independent directors, etc.
The company has formulated the rules of procedure of the board of supervisors, which clearly stipulates the composition, functions and powers, convening, voting and resolutions of the board of supervisors.
The company has formulated the detailed rules for the work of the general manager, which clearly stipulates the working conditions, division of responsibilities and management authority of the general manager and senior managers.
The company has formulated an accounting system and financial management system suitable for the company in accordance with the requirements of the company law, the accounting law, the accounting standards for business enterprises and other laws and their supplementary provisions, and clearly formulated relevant systems such as the measures for the administration of foreign investment, the measures for the Administration of foreign guarantee, the financial management system and the monetary fund management system, which have been deliberated and adopted by the relevant general meeting of shareholders or the board of directors.
4. Risk assessment process
The company has formulated long-term overall objectives, supplemented by specific business objectives and plans, and communicated them to all employees. The company has established an effective risk assessment process, and can timely find and take countermeasures against the identified business risks, environmental risks and financial risks that the company may encounter.
5. Information system and communication
The company has established an information system related to financial reporting. The information system personnel (including financial personnel) are dedicated and diligent, and can effectively perform their duties. The management of the company also provides appropriate human and financial resources to ensure the normal and effective operation of the overall information system.
The company has established effective communication channels and mechanisms to enable the management to timely obtain the performance of employees' responsibilities, and maintain timely and effective communication with customers, regulatory authorities and other external units, so that the management can take appropriate further actions in the face of various changes.
6. Control activities
In order to reasonably ensure the realization of various objectives, the company has established relevant control policies and procedures, mainly including: transaction authorization control, separation control of incompatible positions, voucher and record control, property preservation control, risk control, etc.
(1) Transaction authorization approval control: it defines the scope, authority, procedures, responsibilities and other relevant contents of authorization approval. The management at all levels within the unit must exercise the corresponding authority within the scope of authorization, and the handling personnel must also handle economic business within the scope of authorization.
(2) Separation and control of incompatible positions: the post responsibility system and internal containment system have been established. Through the division of power and responsibility, the post responsibility system of each component and its members has been formulated to prevent errors and fraud. According to the reasonable division of labor, the responsibilities and authorities have been scientifically divided, and the principles of separation of incompatible positions and each person's work can automatically check the work of another person or more people have been implemented, Form a mechanism of mutual checks and balances. Incompatible positions mainly include authorization and approval, business handling, accounting records, property custody, supervision and inspection, etc. For example, the division of some accounting responsibilities, the general ledger and subsidiary ledger of current accounts are recorded by different personnel, and the cashier and accountant shall not be held concurrently; Separate the authorization and approval of various transaction businesses from the specific handling; Separate the maintenance management of electronic data processing system from business operation, etc.
(3) Voucher and record control: the company strictly reviews the original vouchers and reasonably formulates the voucher circulation procedures. It is required that the transaction execution should prepare relevant vouchers in time and send them to the accounting department for records, and the registered vouchers should be filed in order. In terms of obtaining and reviewing external vouchers, a relatively complete mutual review system has been established according to the division of responsibilities of various departments and posts, which basically effectively prevents unqualified vouchers from flowing into the enterprise.
(4) Property preservation control: strictly restrict the direct contact of unauthorized personnel with property, and take measures such as regular inventory, property records, account verification and property insurance to ensure the safety and integrity of all kinds of property.
(5) Independent inspection and control: the company sets up a special internal audit department to improve, effectively and implement the internal control system of the company and its subsidiaries; Supervise the implementation of national laws and regulations and various management systems of the company.
(6) Risk control: relatively complete risk control management regulations have been formulated, and the determination of the company's financial structure, the arrangement of financing structure, the estimation of financing cost and the repayment plan of financing are basically evaluated in advance, supervised in the process and assessed afterwards; Feasibility study shall be conducted for various debt investment and equity investment, the approval authority shall be determined according to the project and amount, and the response plan shall be formulated for the possible negative factors in the investment process; Financial risk early warning system and economic contract management system have been established to strengthen the evaluation and control of credit risk and contract risk.
(7) Internal reporting control: the company has developed a relatively complete internal reporting system for major information to ensure the effective transmission of major information and strengthen the communication and solution of major information between decision-making bodies and relevant departments. 7. Supervision of control
The company's supervision of control mainly includes the supervision of the board of directors and the audit committee. The company regularly evaluates various internal control systems to obtain evidence of their effective operation or defects, and takes timely measures to correct the internal control defects found.
(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 relevant internal rules and regulations of the company, combined with its own business model.
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. 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 company divides the defects of internal control over financial reporting into major defects, important defects and general defects, and the recognition standard adopted directly depends on the importance of financial reporting misstatement that may be caused by the existence of internal control defects. It depends on whether the enterprise has the possibility of timely detection or correction of such important internal control factors: (1) whether the enterprise has the possibility of preventing such internal reporting errors. (2) The amount of potential misstatement that may be caused by the defect alone or in combination with other defects. If an internal control defect, alone or in combination with other defects, has a reasonable possibility to prevent, detect and correct the material misstatement in the financial report in a timely manner, the defect is recognized as a material defect. The "significant" in the material misstatement involves the importance level of the financial report determined by the enterprise management. The materiality level adopted by the company is to determine the overall materiality level of the company based on 5% of the total profits in the consolidated statements, and the implementation materiality level of the company based on 75% of the overall materiality level of the company; The importance level of uncorrected misstatement of the company shall be determined according to 5% of the overall importance level of the company.
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Potential misstatement amount of defect type financial statements
A. Major defects exceed 5% of the total profits of the consolidated statements
B. Major defects are less than 5% of the total profits of the consolidated statements, but reach or exceed 3.75% of the total profits of the consolidated statements
C. The general defect is lower than 3.75% of the total profit in the consolidated statements
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
A. Major defects: the fraud of the company's directors, supervisors and senior managers, the material misstatement in the current financial report found by the certified public accountant but not identified by the company's internal control, and the ineffective supervision of the audit committee and the internal audit department on the company's external financial report and internal control of financial report.
B. Important defects: failure to select and apply accounting policies in accordance with GAAP, failure to establish anti fraud procedures and control measures, failure to establish corresponding control mechanism or implement and no corresponding compensatory control for the accounting treatment of unconventional or special transactions, one or more defects in the control of the ending financial reporting process, and failure to reasonably ensure that the prepared financial statements achieve the true and accurate objectives.
C. General defects: other control defects that do not constitute major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Defect type has a significant negative impact on the amount of direct financial loss
A. Major defects of more than 5 million yuan (including) shall be punished by national government departments
B. Major defects of more than 1 million yuan (including) and less than 5 million yuan shall be punished by government departments at or above the provincial level
C. General defects below RMB 1 million are punished by government departments below the provincial level
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
A. Major defects: major mistakes caused by decision-making procedures; Violation of national laws and regulations, such as environmental pollution; Lack of institutional control or systematic failure of important business, and lack of effective compensatory control; Serious loss of middle and senior managers and senior technicians; The results of internal control evaluation, especially major defects, have not been rectified; Other situations that have a significant negative impact on the company.
B. Important defect: internal control
