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 normative system), combined with the internal control system and evaluation methods of the company (hereinafter referred to as the "company"), on the basis of daily and special supervision of internal control, we inspected the establishment, improvement and implementation of the company's internal control system in 2021, Issued the internal control evaluation report in 2021.
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. Establish and implement the internal control of the board of supervisors. 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
(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: the headquarters and subordinate departments of the company, and the holding subsidiaries and subordinate departments within the scope of consolidated statements. 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; Those included in the evaluation scope are the relevant businesses and matters of the parent company and the holding subsidiaries within the scope of consolidated statements. The specific scope includes:
1. Main units included in the scope of evaluation
（1 Jiangsu Huasheng Tianlong Photoeletric Co.Ltd(300029)
(2) Sichuan Zhongshu Shilian Construction Engineering Co., Ltd
(3) Changzhou Haijiang new energy Co., Ltd
(4) Changzhou Longyan New Energy Development Co., Ltd
(5) Changzhou Shenglong New Energy Development Co., Ltd
(6) Chifeng energy investment new energy Co., Ltd
(7) Bahrain Zuoqi maoyue new energy Co., Ltd
(8) Hailun Jiangfeng New Energy Technology Co., Ltd
(9) Changzhou Shengyou new energy equipment manufacturing Co., Ltd
(10) Changzhou Jintan Huasheng Tianlong photovoltaic equipment Technology Co., Ltd
(11) Dengfeng Xinda new energy Co., Ltd
(12) Qiubei Longde New Energy Development Co., Ltd
2. The main operations and matters included in the scope of evaluation include:
Corporate governance structure, organizational structure and division of responsibilities, internal audit, human resources policy, corporate culture, corporate system, control measures, information system and internal supervision. The high-risk areas of focus mainly include internal audit, human resources, control measures, information system and internal supervision.
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.
（2） Basis of internal control evaluation and identification standard of internal control defects
The company's internal control system and its supporting work guidelines shall be carried out in combination with the company's internal control system.
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
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
The quantitative standard takes the operating income and total assets as the measurement indicators. If the loss that may be caused or caused by the defect of internal control is related to the income statement, it shall be measured by the operating revenue index. If the defect alone or together with other defects may cause the amount of misstatement in the financial report to be less than 10% of the business income, it shall be recognized as a general defect; If it exceeds 15% but less than 20% of the operating revenue, it is an important defect; If it exceeds 20% of the operating revenue, it is recognized as a major defect. Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 10% of the total assets, it is recognized as a general defect; If it exceeds 15% but less than 20% of the total assets, it is recognized as an important defect; If it exceeds 20% of the total assets, it is recognized as a major defect.
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects: major misstatement in the financial report cannot be prevented, discovered and corrected in time due to individual defects or other defects. In case of the following circumstances, it shall be deemed as a major defect:
A any degree of fraud in senior management;
B make corrections to the published financial reports;
C 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;
D. the supervision of the company's audit committee and audit department on internal control is invalid.
Important defects: the qualitative criteria for important defects in the company's internal control over financial reporting:
A. important defects after communication are not corrected within a reasonable period;
B. no corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions
And there is no corresponding compensatory control;
C. the internal audit function of the company is invalid;
D failure to select and apply accounting policies in accordance with GAAP;
E. invalid anti fraud procedures and controls;
F. there is one or more defects in the process of preparing financial reports at the end of the period that cannot be reasonably controlled
The financial statements are true and complete.
General defects refer to other control defects other than the above major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
According to the impact on the realization of internal control objectives, the internal control defects of non-financial reports are divided into general defects, important defects and major defects.
(1) The quantitative identification of the evaluation of internal control defects in non-financial reports determined by the company shall refer to the identification standard of internal control defects in financial reports.
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The identification of non-financial report defects is mainly based on the impact of defects on the effectiveness of business processes and the possibility of occurrence.
If the defect is a general defect, the possibility of deviation from the expected result or will reduce the efficiency; If the possibility of defects is high, it will significantly reduce the work efficiency and effect, or significantly increase the uncertainty of the effect, or make it significantly deviate from the expected goal as an important defect; If the possibility of defects is high, it will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal, which is a major defect.
The above quantitative standards will be appropriately adjusted with the expansion of the company's business scale.
According to the above identification standards, combined with daily supervision and special supervision, no important defects and major defects were found in the internal control evaluation during the reporting period.
(III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reports, there were certain defects in the company's financial reports during the reporting period. The company has taken corresponding measures to prevent the occurrence of similar events, and there are no major defects in the internal control of financial reports.
2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reports, no major defects and important defects in the company's internal control over non-financial reports were found during the reporting period.
Description of other major matters related to internal control
During the reporting period, the company did not explain other major matters related to internal control.
3、 Conclusion of internal control self-evaluation
According to the identification of major defects in the company's internal control over financial reports, there were no major defects in the internal control over financial reports on the benchmark date of the internal control evaluation report. According to the identification of major defects in the internal control over non-financial reports, the company found no major defects in the internal control over non-financial reports on the benchmark date of the internal control evaluation report. The board of Directors believes that the company's internal control system is strict and effective, which has played a positive role in controlling and preventing operation and management risks, protecting the legitimate rights and interests of investors, and promoting the standardized operation and healthy development of the company; Ensure the safety and integrity of the company's property and materials; Be able to truthfully, accurately, completely and timely submit and disclose information in accordance with the content and format requirements of information disclosure stipulated by laws, regulations and the articles of association, ensure open, fair and fair treatment of all investors, and effectively protect the interests of the company and shareholders.
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.
Jiangsu Huasheng Tianlong Photoeletric Co.Ltd(300029)
Board of directors
April 28, 2022
