Zhejiang Reclaim Construction Group Co.Ltd(002586)
Self evaluation report on internal control in 2021
Zhejiang Reclaim Construction Group Co.Ltd(002586) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other requirements for internal control supervision (hereinafter referred to as the "basic norms of enterprise"), 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 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 all 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 the goal of the company's 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
The company has established various internal control systems in accordance with the requirements of the enterprise's internal control standard system and relevant regulations, which meet the requirements of relevant national laws, regulations and regulatory authorities. According to the identification of major defects in the company's internal control over financial reports and non-financial reports, there are no major defects in the internal control over financial reports 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 reports in all major aspects in accordance with the requirements of the enterprise's internal control standard system and relevant regulations. The major defect of losing control over important subsidiaries due to the failure of internal control over foreign investment management disclosed in the previous year has been restored and eliminated by the benchmark date of 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
（1） 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.
The main units included in the evaluation scope include the company and its wholly-owned and holding subsidiaries (the holding subsidiary Shanghai Millennium Urban Planning Engineering Design Co., Ltd. (hereinafter referred to as "Millennium design") lost control during the reporting period, and the company resumed control since December 31, 2021).
The main businesses included in the evaluation scope include: Water Conservancy and Hydropower Engineering, municipal public works, port and waterway engineering, housing construction engineering, foundation and foundation treatment engineering, tunnel and bridge engineering, urban landscaping engineering construction, blasting design and construction, engineering geological survey, urban flood control engineering, earthwork engineering, water conservancy engineering planning and design, technical services and cultural industry.
1. Corporate governance
The company has established a legal person governance structure with "three boards and one layer" as the main body and standardized operation, such as the general meeting of shareholders, the board of directors, the board of supervisors and the management, so as to ensure the orderly progress of daily operation. The company always pays close attention to relevant laws and regulations and the latest requirements of securities regulatory authorities, and timely adjusts and improves the company's internal control system accordingly, so as to ensure the effectiveness of the company's internal control system. The board of directors has three special committees: audit, nomination, remuneration and assessment, which are responsible for the construction and implementation of the internal control system; The management of the company is responsible for organizing and leading the daily operation of the internal control system; The general manager of the company is fully responsible for the daily operation and management activities of the company under the leadership of the board of directors. The board of supervisors is responsible for supervising the directors, general managers and other senior managers of the company to perform their duties in accordance with the law, supervising and inspecting the company's financial status and internal control standard system, and forming a scientific and effective division of responsibilities and check and balance mechanism to promote the governance structure to perform its duties and operate in a standardized manner.
2. Human resources
The company has established a sound human resources management and control system, and continuously improved it according to the actual situation of the company's development and operation, forming a salary system with competitiveness and attraction in the same industry, and formulated a series of rules and regulations such as employee recruitment management measures and performance appraisal management measures, which are responsible for personnel recruitment, employee training, dismissal and resignation, salary, welfare guarantee, performance appraisal Promotion, rewards and punishments are specified in detail. The company attaches importance to the development of human resources and the introduction, training, development and effective utilization of employees, so that human resources policies and talent training can continuously adapt to the new changes and requirements of the company's scale expansion and organizational adjustment.
3. Internal audit
The Audit Department of the company is responsible to the board of directors and independently exercises audit functions and powers without interference from other departments and individuals. The person in charge of the audit department is appointed by the board of directors and equipped with full-time auditors to conduct internal audit on the company's operation and management, financial status and internal control implementation, make reasonable evaluation on the authenticity, rationality and legitimacy of its economic benefits, and report to the board of directors.
4. Social responsibility
In the process of operation and development, the company earnestly performs its social responsibilities and obligations, takes it as its own responsibility to contribute to shareholders and creditors, employees, customers, society and sustainable development, defines the responsibilities of leaders at all levels and functional departments, ensures the safety and health of employees, prevents accidents and promotes the development of production. Practically achieve the coordination between economic and social benefits, short-term and long-term interests, self-development and social development, and promote the harmonious development of the company and employees, society and environment.
5. Corporate culture
Since its establishment, the company has been adhering to the mission of "expanding the ecological space for the harmonious coexistence of man and nature", the core values of "win-win and common growth", the business philosophy of "making the service around the sea exceed the expectations of customers", and the enterprise spirit of "sincerity, transcendence and progress", which has formed a unique corporate culture. The company timely organizes the management and employees to participate in various activities, continuously cultivates employees' positive values and sense of social responsibility, and advocates the spirit of honesty and trustworthiness, innovation and teamwork by strengthening the construction of corporate culture. Directors, supervisors, managers and other senior managers of the company have played a leading role in the construction of corporate culture. All employees of the company can abide by the company's systems and earnestly perform their post responsibilities.
6. Financial activities
The Finance Department of the company implements centralized management of funds, defines the requirements for fund management and settlement of the company, and strengthens the management and control of fund business to ensure the safety of funds. Regularly or irregularly check the monetary capital and bank reconciliation to ensure that the cash book balance is consistent with the actual inventory.
7. Related party transactions
In terms of management and control of related party transactions, the company has formulated the related party transaction management system, which clearly defines related parties and related party transactions, and clearly stipulates the approval procedures, avoidance of voting, information disclosure and other issues of related party transactions.
In 2021, relevant matters of the company comply with the provisions of the articles of association and the company's system.
8. Information disclosure
In order to further standardize the company's information disclosure, ensure the authenticity, accuracy, integrity and timeliness of the company's external information disclosure, and protect the legitimate rights and interests of the company, investors, creditors and other stakeholders, the company has established information disclosure system, investor relationship management system and insider registration system to conduct the whole process of the company's public information disclosure and major internal information communication Effective control. The company appoints the Secretary of the board of directors as the person in charge of investor relations management, arranges special personnel to do a good job in investment reception, carefully record the information of each reception, timely answer the questions of investors, and be able to actively and actively contact and listen to the opinions and suggestions of investors through multiple channels.
(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 provisions of the company's internal control evaluation. 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.
1. Identification standard of internal control defects in financial reporting
A. The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index major defect important defect general defect
Name quantitative standard quantitative standard
The amount of misstatement of operating revenue ＞ 0.5% of operating revenue (or total misstatement amount of assets ≤ 1% of operating revenue (or total assets) ＜ the amount of misstatement ≤ (or total assets) ≤ 0.5% of total assets) operating revenue (or total assets)
(amount) 1%
Note: Take 1% of the current year's operating revenue (or total assets) as the judgment standard of importance level. For the internal control defects related to finance in this year, the potential misstatement of the company's annual financial statements or the degree of misstatement of the matters disclosed are judged.
B. The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows: qualitative criteria for the nature of defects
(1) Violation of national laws, regulations or normative documents;
(2) Lack of decision-making procedures or unscientific decision-making procedures, resulting in major mistakes;
Major defects
(3) Lack of institutional control or systematic failure of important business;
(4) The results of internal control evaluation, especially major or important defects, have not been rectified;
(5) Other circumstances that have a significant impact on the company.
The severity of a single defect or a combination of other defects is lower than that of a major defect, but there may still be important defects
Cause the company to deviate from control objectives.
General defects are other control defects other than the above major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) Quantitative standard
Refer to the internal control standard for quantitative evaluation of financial report.
(2) Qualitative criteria
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows: qualitative criteria for the nature of defects
(1) Lack of democratic decision-making procedures, such as "three important and one big" decision-making procedures;
(2) The scientific decision-making procedure has caused significant losses or is unlikely to cause significant losses;
(3) Violation of national laws and regulations;
Major defects (4) loss of main management personnel;
(5) Frequent negative news in the media;
(6) Major or important defects that have been found and reported to the management have not been corrected within a reasonable time
To correct;
(7) Lack of institutional control or systematic failure of important business;
(8) Other circumstances that have a significant impact on the company.
Important defects other than major defects are determined as important defects according to the degree of influence. General defects other than major defects and important defects are determined as general defects according to the degree of influence.
(III) identification and rectification of internal control defects
1. Rectification of internal control defects in the previous year (1) major subsidiaries were out of control, resulting in a major defect, which has been restored to control in the reporting period.
For the major internal control defects found in the previous reporting period, the company has taken corresponding rectification measures and completed the rectification.
After friendly negotiation between the company and Millennium Investment, based on the principle of equality and voluntariness, an agreement was finally reached and signed
The agreement on restoration of control was, and the company disclosed the agreement on signing on December 31, 2021
Announcement on relevant agreements and related party transactions (see Announcement No. 175 of the company 2021 for details).
According to the agreement on restoration of control signed by the company with Millennium Investment, Zhong Chengrong and other relevant parties
According to the actual implementation and completion of the agreement, the company has resumed its control over Shanghai Millennium since December 31, 2021. The main judgment basis is as follows:
First, the original actual controller of Shanghai Millennium voluntarily cooperated with the restoration of control. On December 28, 2021, Shanghai Millennium held the second meeting of the Fourth Board of directors, deliberated and adopted the proposal on the establishment of a takeover working group. The board of directors decided to establish a takeover working group, including Yin hangjun, Ge Mingliang, Zhang ChenWang, Tang Lei and Huang Wenju, and handled the handover and custody procedures of important office materials according to the authorization of the board of directors; On December 29, 2021, the company and Millennium Investment, Zhong Chengrong and other relevant policies officially signed the agreement on restoring control of the company in Shanghai millennium. Zhong Chengrong and Wang Yongchun are Millennium investment shareholders and actual controllers. The cooperation of Zhong Chengrong and others enabled the listed company to restore control of Shanghai millennium. Second, the matters agreed in the agreement on restoration of control were successfully completed. According to the agreement on restoration of control, with the witness and participation of the company's perennial legal counsel and annual audit accountant, on December 30, 2021, relevant personnel of Shanghai Millennium handed over the official seal, financial seal, contract seal, business license of Shanghai millennium to the takeover working group All financial account books (including but not limited to financial account sets in 2020 and January November 2021, and the detailed statement of fixed assets in December 2020) and other basic data. The handover personnel have signed the letter of commitment, otherwise they will voluntarily bear the corresponding legal responsibility. In order to ensure the normal operation and production of Shanghai millennium and ensure the smooth progress of key work such as audit, the working group has defined the custodian of the above-mentioned important materials, the corresponding approval and custody process, and the seal custodian
