Shenzhen Capstone Industrial Co.Ltd(000038) 2021 annual internal control evaluation report Shenzhen Capstone Industrial Co.Ltd(000038) all shareholders:
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 company's (hereinafter referred to as the company's) internal control system and evaluation methods, and 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 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 internal control of the company's financial report, it is determined that the company has major defects on the benchmark date of the internal control evaluation report. A material defect is a control defect or a combination of multiple control defects existing in internal control that may lead to the failure to prevent, detect and correct the material misstatement of the financial statements in a timely manner. In this internal control audit, we noticed the following weaknesses in the company's internal control over financial reporting:
(I) performance of the obligation to make up the difference
The company signed the balance replenishment agreement or forward repurchase and balance replenishment agreement with Shandong Financial Asset Management Co., Ltd., National Trust Co., Ltd. and Hualong Securities Co., Ltd. respectively, and assumed the obligation of balance replenishment for the investment principal of RMB 300 million, RMB 473 million and RMB 400 million of the above priority preferred partners and their expected investment income during the investment period, Jiang Jian, the actual controller of the company, provides counter guarantee for the above balance payment obligations with his indirectly held equity of Qingdao Yaxing Industrial Co., Ltd. The lack of appropriate objective evidence in the judgment process of the company's estimated losses affects the valuation and allocation of estimated losses, the valuation of estimated liabilities in the financial statements, the test of estimated liabilities and the lack of internal control.
(II) reconciliation and confirmation of accounts receivable
As of December 31, 2021, the balance of accounts receivable of Ran Shi Technology (Beijing) Co., Ltd., a subsidiary of the company, was 193796500 yuan. During the daily management of accounts receivable, the company did not conduct reconciliation management for accounts receivable, which affected the valuation and confirmation of accounts receivable in the financial statements. This event indicates that there are weak links in the company's internal control related to accounts receivable reconciliation management.
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.
The company has a complete internal control system, but the department system fails to play an effective role in supervision and prevention in the actual implementation process of the company. 3、 Internal control evaluation (I) 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 units included in the scope of evaluation include the company and its subsidiaries included in the scope of consolidated financial statements. 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 main businesses and matters included in the scope of evaluation include: 1. Organizational structure
The company has established a standardized corporate governance structure and rules of procedure in accordance with the requirements of the company law, the securities law, the guidelines for the governance of listed companies, the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange, the basic norms of enterprise internal control and other relevant laws, as well as the provisions of the Shenzhen Capstone Industrial Co.Ltd(000038) articles of Association (hereinafter referred to as the "articles of association") Supervision and other aspects of responsibility and authority, forming a scientific and effective division of responsibilities and check and balance mechanism.
The general meeting of shareholders, the board of directors and the board of supervisors exercise decision-making power, executive power and supervision power respectively according to their duties. The general meeting of shareholders shall enjoy the legal rights stipulated in laws and regulations and the articles of association, and exercise the voting rights on major matters such as the company's business policies and profit distribution according to law. The board of directors is authorized by the general meeting of shareholders to be fully responsible for the operation and management of the company. There are four special committees: the staff committee, the remuneration and assessment committee and the audit committee. The personnel composition is in line with the relevant provisions of the rules of procedure. The special committee is responsible to the board of directors and performs its duties in accordance with the articles of association and the authorization of the board of directors. The proposal is submitted to the board of directors for deliberation and decision. The board of supervisors shall be responsible to the general meeting of shareholders and inspect and supervise the performance of the company's finance and senior executives. The management is the executive body, responsible for organizing and implementing the resolutions of the general meeting of shareholders and the board of directors, and comprehensively presiding over the daily operation and management of the company. The company manages its holding subsidiaries by appointing directors, supervisors and senior managers. 2. Development strategy
The company has set up a special strategic management organization, which is mainly responsible for studying and making suggestions on the company's medium and long-term development planning, major investment and financing plans, major capital operation and asset management project decisions. The company has formulated the relevant systems of development strategy management, defined the procedures of development strategy formulation, implementation, evaluation and adjustment, and standardized the content of development strategy, so as to enhance the company's core competitiveness and sustainable development ability and ensure the realization of the company's strategic objectives.
The company has formulated strategic planning management system, operation plan management system and process management system to provide continuous support for the stable and efficient operation of the company. 3. Human resource management
In accordance with relevant laws and regulations and in combination with its own actual situation, the company has established a systematic human resources management system and made clear provisions on human resources development plan, staffing, employee training, salary calculation and payment, welfare guarantee, performance management and other matters. Human resource evaluation mainly involves the main control links of personnel recruitment, personnel turnover, salary management, performance appraisal management and so on. 4. Corporate culture
The company attaches great importance to the publicity, promotion and implementation of corporate culture. When appointing and selecting excellent talents, the company pays attention to the matching degree between them and the company's values, cultivates the core values and sense of social responsibility of each employee of "win-win sharing and building tomorrow together", and advocates the core concept of "integrity, responsibility, transcendence and service". 5. Fund management
According to its actual situation and in combination with the requirements of internal control norms and guidelines for fund management, the company has formulated monetary fund management system, management system for relevant persons in charge of financial accounting and other systems, formed strict fund approval and authorization procedures, effectively prevented fund activity risks and improved fund efficiency.
6. Asset management
The company has formulated inventory management measures and daily property management system to standardize the asset management process and ensure that the risks in the whole process of asset management are effectively controlled. 7. Procurement business
According to its actual situation, the company has formulated the procurement business management system and the supplier evaluation and access system, which have made clear provisions on the links such as purchase requisition, approval, price comparison, procurement, acceptance and payment, focusing on the key links such as procurement approval, multi-party price comparison, inspection and warehousing, planned payment and so on, so as to ensure that the risk of material procurement can be effectively controlled. 8. Contract management
According to its actual situation, the company has formulated the contract management system, which has made clear provisions on the negotiation, approval authority, signing, execution, change and dissolution of the contract, as well as the mediation, arbitration and litigation of contract disputes, so as to effectively prevent and control the contract risks. 9. Internal audit supervision
The company has an audit department, which is responsible to the audit committee of the board of directors. The audit department independently exercises the internal audit authority and reports to the audit committee. The audit department is responsible for auditing, supervising and inspecting the company's daily financial situation and other major matters, and timely tracking and rectifying the internal control defects found in the supervision process to ensure the effective implementation of the internal control system.
The board of supervisors of the company is responsible for supervising the behavior of directors and senior managers in performing their duties of the company. The audit committee under the board of directors of the company performs the audit supervision function on behalf of the board of directors. The audit committee is responsible for reviewing the internal control system of the company and guiding and supervising the work of the audit department. The company has formulated the internal control and supervision system, which clearly stipulates the audit institution, responsibilities and authorities, audit implementation and reporting process, and objectively evaluates the business activities, major projects, financial status and the implementation of internal control system of the company and its subsidiaries through the implementation of audit, so as to strengthen the internal control of the company and give full play to the supervision and evaluation function of audit.
The composition of the audit board and the supervision committee of the company has standardized the operation of the company. With the company's business development and changes in the market environment, the company will further improve and strengthen the company's internal supervision and audit system to ensure the realization of the company's development plan and business objectives and escort the steady development of the company. (II) the high-risk areas that internal control focuses on mainly include: 1. Internal control of holding subsidiaries
The company has established a relatively perfect management system for holding subsidiaries, which makes detailed provisions on the appointment and appointment of directors, supervisors and senior managers of subsidiaries, financial management, operation and investment decision-making management, major information reporting, internal audit supervision and inspection system, administrative affairs management, human resources management, performance appraisal, incentive and restraint mechanism, and has strong binding force on holding subsidiaries.
The company appoints directors and supervisors to its holding subsidiaries. The candidates mainly come from senior managers of the company's headquarters, and have corresponding and required professional experience and ability to accurately express the company's opinions and correctly perform their duties.
The company requires all holding subsidiaries to report to the company before major events occur in accordance with the provisions of the management system for information disclosure and the internal reporting system for major information. For major events that need to be considered by the board of directors or the general meeting of shareholders in accordance with relevant regulations, all holding subsidiaries can implement them only after fulfilling relevant procedures, and the Securities Affairs Department of the company will disclose information on relevant matters. 2. Internal control of related party transactions
The company has established strict decision-making procedures for related party transactions. The internal control of related party transactions follows the principles of honesty and credit, equality, voluntariness, fairness, openness and fairness, and there is no damage to the interests of the company and other shareholders. In accordance with the provisions of the articles of association and the regulations on the approval and management of related party transactions of the listed company, the division of the voting authority of the board of directors and the management documents of related party transactions shall be clarified in accordance with the provisions of the articles of association and the regulations on the management of related party transactions. The related party transactions of the company during the reporting period were approved, implemented and disclosed according to the corresponding decision-making authority and procedures. 3. Internal control of external guarantee
In order to standardize the company's external guarantee behavior and effectively control the company's external guarantee risk, the company has defined the approval authority of the general meeting of shareholders and the board of directors on external guarantee matters in the articles of association and external guarantee management system. During the reporting period, the company has no external guarantee. 4. Internal control over the use of raised funds
The company has formulated the measures for the management of raised funds, which has made specific and strict provisions on the storage, approval, use, change, supervision and accountability of raised funds, standardized the management and use of raised funds, timely mastered the fund dynamics of the special account for raised funds, and protected the interests of public investors. During the reporting period, the company did not use the raised funds in violation of regulations. 5. Internal control of major investment
The company's major investment shall follow the principles of legality, prudence, safety and effectiveness, control investment risks and pay attention to investment benefits, clarify the decision-making authority of the general meeting of shareholders and the board of directors on major investment in the articles of association and major investment management system, and formulate corresponding deliberation procedures. The company has formulated the comprehensive risk control management system to further clarify the supervision, control and review functions of the company's investment risk control committee on the company's major project investment and financing business, and further prevent and control investment risks. During the reporting period, the company's investment behavior fulfilled relevant deliberation and decision-making procedures. 6. Internal control of information disclosure
In order to standardize the company's information disclosure and ensure the authenticity, accuracy, integrity and timeliness of the publicly disclosed information, the company has established the internal reporting system of major information and the management system of information disclosure affairs. The company's information disclosure affairs are under the unified leadership and management of the board of directors. According to the relevant systems of the company, the parties involved in information disclosure have the obligation to keep the disclosed information confidential and shall not disclose the relevant contents to the outside world in any way before public disclosure.
During the reporting period, the company conscientiously fulfilled the obligation of information disclosure in accordance with the requirements of relevant systems. The information disclosure of the company strictly follows the relevant laws and regulations such as the Listing Rules of Shenzhen Stock Exchange and the provisions of the information disclosure management system, and the information disclosed is true, accurate, complete, timely and fair.
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. (III) internal control evaluation basis and internal control defect identification standard
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and the company's internal control system and evaluation procedures.
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 quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
According to the influence amount of internal control defects on the misstatement of financial statements, measured by the correlation with the net profit of the company's consolidated financial statements of the previous year: if the influence amount of defects exceeds 10% of the consolidated net profit, it is a major defect; Between 5% - 10% (including 10%) of the consolidated net profit is an important defect; If it is less than or equal to 5% of the consolidated net profit, it is a general defect.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects may
