Securities code: Landocean Energy Services Co.Ltd(300157) securities abbreviation: Landocean Energy Services Co.Ltd(300157) Announcement No.: 2022068 Landocean Energy Services Co.Ltd(300157)
Self evaluation report on internal control in 2021
Landocean Energy Services Co.Ltd(300157) all shareholders:
According to the requirements of the basic norms of enterprise internal control, the guidelines for the application of enterprise internal control, the guidelines for the evaluation of enterprise internal control and the guidelines for the audit of enterprise internal control (hereinafter referred to as the “enterprise internal control standard system”), combined with the internal control system and evaluation methods of Landocean Energy Services Co.Ltd(300157) (hereinafter referred to as the “company” or ” Landocean Energy Services Co.Ltd(300157) “), 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 (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. 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 guarantee 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.
As of December 31, 2021, the company has maintained effective internal control in all major aspects, and there is no significant loss of the company’s property or significant impact on and distortion of the financial statements due to the out of control of the internal control system. 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 scope of internal control evaluation covers the main businesses and matters of the company and its subsidiaries with control. The units included in the scope of this evaluation are the headquarters and wholly-owned and holding subsidiaries of the company. The total assets of the units included in the scope of evaluation account for 100% of the total assets of the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue of the company’s consolidated financial statements.
The businesses and matters included in the evaluation scope mainly include: corporate governance structure, organizational structure, development strategy, procurement and expenses and payment, sales and collection, fixed assets management, human resources management, corporate culture, risk assessment and countermeasures, subsidiary management, related party transaction management, financial management and reporting, investment management, external guarantee, information communication management, information disclosure management, investor relations management, etc.
The above businesses and matters included in the evaluation scope cover the main aspects of the company’s operation and management, and there are no major omissions. (II) evaluation of internal control
In order to ensure the normal operation of the company’s business activities, protect the safety and integrity of assets and realize the business objectives, the company has formulated and improved relevant systems according to the asset structure and operation mode, combined with the specific conditions of holding subsidiaries, and in accordance with relevant provisions such as the company law, the securities law, the accounting law, the basic norms of enterprise internal control and other relevant laws and regulations, Including a complete set of relatively complete and scientific internal control systems such as the management system of holding subsidiaries, the special management system of raised funds, the external guarantee system, the related party transaction system, the information disclosure management system and the internal audit system, which are constantly supplemented and improved according to the changes of the company’s business development and business environment.
The company organizes and carries out internal evaluation in accordance with the basic norms of enterprise internal control and its supporting guidelines and other relevant provisions, in combination with the provisions of relevant systems, processes and other documents of the company.
(III) identification standard of internal control defects
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished the internal control of financial reports from the internal control of non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company. The identification standards of internal control defects determined by the company are as follows:
1. Identification criteria for defects in internal control over financial reporting:
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Quantitative criteria of importance items
Major defect misstatement ≥ 10% of total profit
5% of total profits from major defects ≤ misstatement ＜ 10% of total profits
General defect misstatement ＜ 5% of total profit
Note: the above total profit is the consolidated financial statement data audited by certified public accountants on the benchmark date of the internal control evaluation report.
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Identification criteria for major defects: fraud of directors, supervisors and senior managers; Make misstatement correction for major errors in the announced financial report; Invalid control environment; The supervision of the audit committee and the internal audit department on the internal control of financial reports is invalid; Major internal control deficiencies that have been found and reported to the management have not been corrected after a reasonable time; The certified public accountant found that there was a material misstatement in the current financial report, but the relevant internal control failed to find the misstatement in the operation process.
Identification standard of significant defects: accounting policies are not selected and applied in accordance with generally accepted accounting standards; Failure to establish anti fraud procedures and control measures; 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; There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.
General defect identification standard: refers to other control defects other than the above major defects and important defects. 2. Identification criteria for defects in internal control over 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:
Refer to the quantitative identification standard for the evaluation 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:
Identification standard of major defects: serious violation of national laws, regulations or normative documents; Unscientific major decision-making procedures lead to major decision-making mistakes; The lack of system may lead to systematic failure and major or important defects can not be improved; The company’s important business lacks system control or the system fails; The company is punished by the CSRC or warned by the stock exchange.
Identification standard of important defects: General mistakes caused by the company’s decision-making procedures; The company violates the internal rules and regulations of the enterprise, resulting in losses; Serious loss of business personnel in key positions of the company; There are defects in the company’s important business system or system; Important or general defects in the company’s internal control have not been improved.
General defect identification standard: the company violates internal rules and regulations, but does not form losses; Defects in the company’s general business system or system; General defects of the company have not been rectified; The company has other defects.
4、 Identification and rectification of internal control defects
(I) identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reporting, the company has no major defects or important defects in internal control of financial reporting during the reporting period.
(II) identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reporting, the company has no major defects or important defects in internal control of non-financial reporting during the reporting period.
(III) identification and rectification of general defects
In January 2022, the company received the decision on Issuing Administrative regulatory measures to order correction of Landocean Energy Services Co.Ltd(300157) and Bao Li ([2021] No. 239) issued by Beijing regulatory bureau of China Securities Regulatory Commission (hereinafter referred to as “Beijing securities regulatory bureau”) and the regulatory letter on Landocean Energy Services Co.Ltd(300157) issued by the management department of Chuangye board company of Shenzhen Stock Exchange (GEM regulatory letter [2022] No. 6), It is pointed out that there are some problems in the company, such as incomplete information of the three meetings, non-standard seal management and general defects in the company’s internal control.
The company actively carried out rectification work for general defects in internal control. In April 2022, the company issued Landocean Energy Services Co.Ltd(300157) announcement on the rectification report of the decision on administrative supervision measures of Beijing regulatory bureau (Announcement No.: 2022057). Most of the general defects in the company’s internal control have been rectified, and individual problems are being rectified according to the rectification plan specified in the rectification report.
The board of directors of the company pays great attention to the construction of internal control management system, and also notes that internal control should adapt to the company’s business scale, business scope, competition and risk level, and be adjusted in time with the changes of the situation. With the changes of the company’s scale, business scope, national laws and regulations and other internal and external environment, the company will continue to supplement and improve the internal control system, standardize the implementation of the internal control system, strengthen the supervision and inspection of internal control, promote the healthy and sustainable development of the company, and effectively safeguard the legitimate rights and interests of the company and all shareholders.
5、 Description of other major matters related to internal control
In January 2022, the company received the decision on Issuing Administrative regulatory measures to order correction of Landocean Energy Services Co.Ltd(300157) , Bao Li ([2021] No. 239) issued by Beijing Securities Regulatory Bureau and the supervision letter on Landocean Energy Services Co.Ltd(300157) issued by the management department of gem company of Shenzhen Stock Exchange (GEM supervision letter [2022] No. 6). During the reporting period, the company had some internal control problems, such as incomplete data of the three meetings, defects in the operation procedures and statistics of the three meetings, imperfect construction of relevant internal control systems, untimely update, nonstandard seal management, and no written basis for the payment of some directors’ salaries.
The company has actively carried out rectification work in accordance with the relevant requirements of the decision issued by Beijing Securities Regulatory Bureau, and will take this rectification as an opportunity to deeply learn lessons. The company will earnestly and continuously implement various rectification measures, strengthen the learning of relevant responsible personnel on relevant laws and regulations, enhance the awareness of standardized operation, improve the level of corporate governance, constantly improve the company’s internal control system, ensure the standardized operation of the company, and earnestly safeguard the legitimate rights and interests of the company and all shareholders.
None of the directors of the company raised any objection to the report and its contents.
Landocean Energy Services Co.Ltd(300157) board of directors April 29, 2022
