Ylz Information Technology Co.Ltd(300096)
Year 2021
Internal control self evaluation report
April 2022
Ylz Information Technology Co.Ltd(300096)
Self evaluation report on internal control in 2021
Ylz Information Technology Co.Ltd(300096) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with the company’s (hereinafter referred to as 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 (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 self-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, 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 main units included in the evaluation scope include Ylz Information Technology Co.Ltd(300096) and its subsidiaries. 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: governance structure, organizational structure, development strategy, human resource management, corporate culture, risk assessment, fund management, asset management, procurement management, budget management, subsidiary management, related party transactions, external guarantee, financial report, information and communication, internal supervision and other businesses and matters. The high-risk areas of focus mainly include fund management, asset management, subsidiary management, related party transactions, external guarantee, information and communication, etc.
The operations and matters included in the scope of evaluation and high-risk areas are as follows:
1. Internal environment
(1) Governance structure
In accordance with the company law of the people’s Republic of China (hereinafter referred to as the company law), the securities law of the people’s Republic of China (hereinafter referred to as the Securities Law), the guidelines for the articles of association of listed companies, the basic norms of enterprise internal control and the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and other relevant regulations, We have established a standardized corporate governance structure and rules of procedure, defined the responsibilities and authorities in decision-making, implementation and supervision, and formed a scientific and effective division of responsibilities and check and balance mechanism, which is in line with the requirements of the code for the governance of listed companies.
The general meeting of shareholders is the highest authority of the company. The formulation and effective implementation of the rules of procedure of the general meeting of shareholders of the company have clarified the nature, functions and powers of the general meeting of shareholders and the provisions on its convening, notification, convening, proposal and voting, resolution and other procedures, ensured that all shareholders exercise their rights equally and fully, and protected the legitimate rights and interests of shareholders to the greatest extent.
The board of directors is the decision-making body of the company’s operation and management, which is responsible for the decision-making of the company’s development objectives and major business activities, and safeguarding the interests of the company and all shareholders. The board of directors of the company has 12 directors, including 4 independent directors and 1 Chairman. The Secretary of the board of directors is set under the board of directors to deal with the daily affairs of the board of directors. As of the disclosure date of this report, the company has 11 directors on the board of directors, including 4 independent directors.
The board of supervisors is the supervisory body of the company, which is responsible for supervising the daily operation and internal management of the company, reporting to the general meeting of shareholders, and supervising the establishment and implementation of internal control by the board of directors. The board of supervisors of the company is composed of three supervisors, including one employee supervisor. The formulation and effective implementation of the rules of procedure of the board of supervisors is conducive to give full play to the supervisory role of the board of supervisors and protect the interests of shareholders, the company and the legitimate rights and interests of employees from infringement.
Within the board of directors, four special committees have been established according to their functions: Audit Committee, strategy committee, salary and assessment committee and Nomination Committee. Each special committee of the company effectively performs its duties according to the implementation rules of its own committee to provide support for the scientific decision-making of the board of directors.
The CEO of the company is the executor of various decisions of the board of directors and is responsible for organizing and leading the daily operation of the enterprise’s internal control. Ensure the normal operation of the company by commanding, coordinating, managing and supervising the functional departments to exercise the operation and management power. The formulation and effective implementation of the company’s CEO work rules ensure the effective implementation of various decisions of the board of directors, and improve the company’s operation and management level and risk prevention ability.
(2) Organizational structure
The company has established a scientific organizational structure according to its own business characteristics and internal control requirements. All functional departments operate under the leadership of the management level according to the management system formulated by the company. The division of responsibilities and authorities is clear, cooperate and restrict each other, and the information communication channels are smooth, forming an effective mutual check and balance mechanism to ensure the orderly progress of the company’s business activities.
In order to meet the needs of the continuous development of the company’s business, improve the management level and efficiency of the company, further improve the corporate governance structure and improve the fine management level, the company has added a strategic center, government public relations department, legal department, etc. according to the strategic development plan and actual business development. Through the scientific reorganization and adjustment of various departments, the company’s management system has been effectively improved and the governance efficiency has been optimized.
(3) Development strategy
The company has established a strategy committee under the board of directors, which is responsible for studying and making suggestions on the company’s medium and long-term development strategy and major investment decisions, monitoring the implementation of development strategy, regularly collecting and analyzing relevant information, and providing support for the decision-making of the board of directors.
Adhering to the business development concept of “digitalization of all business and commercialization of all data”, the company adheres to the corporate mission of “making the world have no sad life”, and strives to realize the vision of “reshaping people’s livelihood and healthy new ecology with digitization”. The company has always focused on the core areas of people’s livelihood, guided by innovation, guided by the market and driven by big data, focused on the four main businesses of “medical security, health care, people’s livelihood services and industrial finance”, and focused on emerging technologies such as cloud computing, Internet of things and artificial intelligence to empower people’s livelihood.
During the reporting period, the company has always adhered to the strategy of taking big data as the core driving force, striving to fight the three battles of personal health cloud, elderly electronic card platform and data lake, paying close attention to the two main lines of basic business and new business, ensuring the steady growth of basic business and focusing on the innovative development of new business. Vigorously promote the transformation and upgrading of basic business to new business, accelerate the transformation from project-based to operational company, and provide comprehensive and convenient livelihood information services for the government, enterprises and the public.
(4) Human resource management
With the strategy of sustainable operation and sustainable development, the company has formulated human resource management policies with core competitiveness, including: employment, training, dismissal and resignation of employees; Salary, reward and punishment, and evaluation of employees. Effectively regulate the introduction, allocation, training, use, assessment, incentive and other management behaviors of human resources, and constantly improve them in the process of implementation. The company has formulated internal regulations such as management rules for directors, supervisors and senior managers of holding subsidiaries, management measures for internal talent recommendation, system of temporary appointment of cadres and internal accountability of leading cadres, so as to strengthen the work management of the company’s managers, improve the efficiency and quality of talent introduction, increase cadre management experience and cultivate more compound management talents, It further enriches the talent reserve mode of the company. Implement effective incentives and constraints, management and supervision, and enhance the sense of responsibility and discipline of the company’s managers.
The company pays attention to employee training and career planning, organizes and carries out various training activities, including internal and external training, improves employees’ professional skills, improves the overall quality of professional and technical personnel, formulates talent reserve construction plan, and improves the talent reserve mechanism. In order to realize the high-quality development of talents and strengthen the construction of cadre team, the company has established a cadre management college to carry out special training activities to improve the efficiency of management cadres and improve the competitiveness and execution of the management team. The company purchased five insurances and one fund, holiday benefits, flexible work, communication subsidies and other benefits for employees, which greatly improved employees’ satisfaction and sense of belonging.
(5) Corporate culture
The company’s mission is to make the world have no sad life, in line with the enterprise vision of digital reshaping the healthy and new ecology of people’s livelihood, adhering to the business development concept of “all business data and all data business”, implementing the core values of focus, innovation, openness and coordination, guiding employees to establish correct values and realizing the common growth and development of the company and employees.
The company spreads the connotation of corporate culture by organizing employee activities, Party branch activities, trade union activities, merit evaluation system and other ways, deeply rooted the corporate culture in the hearts of the people, and enhanced the cohesion of the company and the sense of belonging of employees. When appointing and selecting excellent talents, pay attention to the matching degree between them and the company’s values, cultivate every employee’s positive values and sense of social responsibility, and advocate honesty and trustworthiness, love and dedication, pioneering and innovation and teamwork. 2. Risk assessment
According to the strategic objectives and development plan, the company has established a systematic and effective risk assessment mechanism in combination with the characteristics of the industry and its own actual development needs, clearly divided the risk assessment at all levels, identified the matters affecting the realization of the objectives, distinguished risks and opportunities, and then evaluated and responded to the possibility and impact degree of risks and opportunities, so as to reduce the possible negative impact to the company’s tolerable range:
(1) The Strategy Committee comprehensively considers the influencing factors such as macroeconomic policies, changes in market demand, the situation of industries and competitors, the level of available resources and their own advantages and disadvantages, studies the company’s medium and long-term development strategic planning, major new investment projects, the company’s issuance of stocks and bonds, puts forward scientific suggestions and submits them to the board of directors for deliberation, so as to ensure the scientificity of the enterprise’s development strategy and major investment matters Rationality and feasibility, and effectively prevent and control strategic risks.
(2) The company has formulated internal systems for risk control, such as daily production and operation decision-making system and emergency response system for emergency response. Effectively standardize the operation process of production and operation links, strengthen the management of the company’s response to emergencies, establish risk early warning mechanism and rapid response and emergency disposal mechanism, and minimize the impact and loss of risk factors. In this period, the company implemented the early warning system for major operational risks of wholly-owned and holding subsidiaries and the measures for risk management of equity investment, strengthened the identification, evaluation and analysis of post investment risks, and further strengthened the risk control of equity investment. Maintained the normal business order and healthy and stable development of the company and its subsidiaries.
(3) The company sets up an independent internal audit department to effectively supervise the establishment and implementation of the company’s daily operation and management system under the guidance and supervision of the audit committee, timely report the audit to the audit committee and the company’s management, supervise and urge the implementation of rectification, so as to prevent the company’s management risks, strengthen internal control, safeguard the legitimate interests of shareholders, continuously improve operation and management and improve economic benefits.
3. Control activities
(1) Fund management
According to the financial management system, the company has established the financial management system, formulated the detailed rules for the management of monetary funds, the management system for the use of Ylz Information Technology Co.Ltd(300096) online banking, the post responsibility system of accountants and other systems, and made clear provisions on the entry of financial information and the approval of fund payment. The company has established a strict authorization and approval system for fund management, All capital flows must be handled in accordance with the specified process and authorized approval.
The company and its subsidiaries implement the BPM expense process control system, standardize the travel reimbursement process, daily expense reimbursement, loan process and corporate payment process, set the approval authority according to the company’s management system, effectively control the ultra vires approval and improve the approval efficiency. The company has formulated the major investment management system and investment and financial management system, which have detailed provisions on the review authority, approval procedures, financial management and audit, tracking management and accountability, information disclosure and other aspects of investment. In order to ensure the reasonable and controllable investment direction and scale, the company tries to control the total amount of annual investment budget, formulates annual investment plan, and strengthens prior approval and post investment management, so as to effectively control investment risks, ensure the legitimacy, compliance and controllability of investment activities, improve investment benefits and effectively protect the interests of the company and shareholders.
In addition, the company’s audit department regularly conducts internal audit on the company’s Monetary Fund authorization and approval process and payment and settlement process, so as to ensure the safety and accuracy of the company’s fund management. During the reporting period, the financial department of the company strictly implemented the fund management system to effectively control and prevent financial risks.
(2) Asset management
The company has established daily financial management system and regular inventory system, and standardized the management methods of fixed assets, intangible assets and inventory in the financial management system. Take measures such as financial records, physical management, regular inventory and account verification to ensure property safety.
In order to strengthen and standardize the management of the company’s fixed assets, the company has formulated the measures for the management of fixed assets, which makes specific provisions on the warehousing, collection, internal transfer and allocation, rental and lending, sale and scrapping, damage and loss, inventory, etc. of fixed assets, so as to ensure the safety and integrity of the company’s assets. The company regularly or as needed
