Hunan Huamin Holdings Co.Ltd(300345)
Internal control self evaluation report on September 30, 2021
In order to effectively carry out the company's business activities, control business risks and protect the legitimate rights and interests of the company and investors, 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) and the basic norms of enterprise internal control According to the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange and relevant national laws and regulations, the board of directors of the company has conducted a self-examination on the standardization, integrity and implementation effectiveness of the company's internal control as of September 30, 2021. On this basis, the self-evaluation on the establishment and operation effectiveness of the company's internal control system is as follows:
1、 Basic information of the company
Hunan Huamin Holdings Co.Ltd(300345) formerly known as Loudi Hongyu Industry Co., Ltd., it was approved and registered by Loudi Administration for Industry and Commerce on July 31, 1995 and changed to Hunan Hongyu wear-resistant New Material Co., Ltd. on December 10, 2009. On July 13, 2020, the company changed its name to Hunan Huamin Holdings Co.Ltd(300345) . In July 2012, the company made an initial public offering of 24 million RMB common shares and was listed on the gem of Shenzhen Stock Exchange on August 1, 2012, with stock code: 300345. As of September 30, 2021, the total number of shares of the company is 441295483, with a registered capital of 441295483.00 yuan. The registered address of the company is No. 068, Jinsha West Road, Jinzhou new district, Changsha City, Hunan Province. Its business scope includes the production, processing and sales of grinding balls, grinding sections, roller wear-resistant parts and various wear-resistant new materials; Production, sales and disassembly of lining plate; R & D, production and sales of polymer materials; Research, development and application of energy-saving technology of ball mill; R & D, production and sales of relevant auxiliary equipment, control equipment and testing equipment of ball milling system; Research, development and application of energy conservation and environmental protection technology; Self operated and acting as an agent for the import and export of various commodities and technologies, except that the state restricts the operation of companies or prohibits the import and export; R & D and application services of 3D printing technology; Metal surface treatment and heat treatment processing; Mining machinery manufacturing; Self operated and acting as an agent for the import and export of various commodities and technologies, except for the commodities and technologies that the state restricts the company to operate or prohibits the import and export; New material technology development services, consulting and exchange services; Relevant services, planning and design of smart city; Software development and information technology services for smart cities and smart buildings; Sales of smart street lamps, security monitoring, data center products and systems, computer software, computer hardware and communication equipment; Manufacturing of smart street lamps, security monitoring and communication equipment; Intelligent street lamp and security monitoring design; Smart street lamp operation; Software development system integration service; Information system integration service; Development, construction, operation and maintenance services of network integration system; Investment in projects, industries and infrastructure with its own assets (not engaged in national financial supervision and financial credit business such as deposit absorption, fund-raising collection, entrusted loan and loan issuance); Security monitoring operation; Construction of security system engineering; Engineering consulting; Consulting and planning of information system engineering; Computer technology development and technical services; Computer technology consulting; Transfer of computer technology; Development of computer hardware; Internet Science and technology development, science and technology transfer, science and technology consulting, science and technology services; Smart city and smart building information technology services; Sales of building materials, air conditioning equipment and power distribution equipment; Retail of building decoration materials; Operation and maintenance services of smart water works; Internet advertising services; Advertising production services; Advertising service; Advertising design; Advertising agency services outside China; Wholesale of computers, software and auxiliary equipment, communication and radio and television equipment, hardware products, electrical equipment, wires, cables, instruments and meters, office equipment, fire-fighting equipment and equipment; Mobile Internet R & D and maintenance; Development, construction, operation management and maintenance management of urban comprehensive pipe gallery; General contracting of municipal public works construction; Construction of housing construction works, urban and road lighting works; Professional contracting of electromechanical equipment installation engineering; Professional contracting of Building Decoration Engineering; Professional contracting of fire fighting facilities; Parking lot construction; Parking lot operation management; Operating value-added telecommunications services; Call center business and information service business in the second category of value-added telecommunications services (only Internet information services); Information services in the second category of value-added telecommunications services (excluding fixed network telephone information services and Internet information services); R & D, installation, sales and service of automatic control system; Basic software development; Development and construction of e-commerce platform. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
2、 Overall evaluation of internal control system
(I) evaluation principles of the company's internal control
1. Integrity principle: the internal control system must be implemented in all business departments and posts of the company, and run through all links such as decision-making, implementation, supervision and feedback, so as to ensure that there are no gaps or loopholes in the company's internal control; 2. Compliance principle: all internal control activities of the company must comply with relevant national laws and regulations and relevant provisions of the CSRC;
3. Principle of checks and balances: the responsibilities and authorities of all departments and posts of the company shall be reasonably set and divided, and the key posts shall be separated from each other to ensure clear rights and responsibilities, mutual restriction and mutual supervision between different departments and posts;
4. Effectiveness principle: all internal control activities of the company shall adapt to the company's business scale, business scope and environment, and shall be revised and improved in due time with the change of external environment, the development of business operation and the continuous improvement of management demand;
5. Cost benefit principle: the company shall give full play to the work enthusiasm of all departments and all employees, reduce the operation cost as far as possible, and ensure to achieve the best internal control effect with reasonable cost control;
6. Principle of applicability: the internal control shall adapt to the business scale, business scope, competition status and risk level of the enterprise, and shall be adjusted in time with the changes of the situation.
Internal control has inherent limitations, so it can only provide reasonable assurance to achieve the above objectives; Moreover, the effectiveness of internal control may also change with the changes of the company's internal and external environment and business conditions. The company has an inspection and supervision mechanism for internal control. Once internal control defects are identified, the company will take corrective measures immediately.
(II) defect identification standard
Category financial report non-financial Report
Signs of major defects in financial reports include: (1) the identification of defects in Directors' and supervisors' non-financial reports is mainly based on the fraud of directors and senior managers; (2) The certified public accountant finds that there are significant misstatements in the current business process effectiveness and possible financial reports, and the company's internal control is judged in the operation process. If the possibility of defect occurrence is small, the false report is not found in the; (3) The audit committee and internal audit institutions will reduce the work efficiency or effect, or increase the effect without the failure of internal control supervision.
The general deficiencies include: (1) failure to select and apply accounting policies in accordance with generally accepted accounting standards; Sink; If the probability of defect occurrence is high, the qualitative criteria will be significantly improved
(2) Failure to establish anti fraud procedures and control measures; (3) For the accounting treatment of unconventional or special transactions that reduce work efficiency or effect, or significantly increase the effect, if there is no corresponding control mechanism or uncertainty, or make it significantly deviate from the expected goal, it is implemented and there is no corresponding compensatory control; (4) Significant financial defects at the end of the period; If the possibility of defects is high, there will be one or more defects in the reported control, and there is no reasonable guarantee that the preparation of financial statements that seriously reduce the work efficiency or effect, or seriously increase the effectiveness will achieve the true and complete goal. General defects refer to the uncertainty of the results or serious deviation from the expected objectives, and refer to other control defects other than the above major defects and important defects. Is a major defect.
The quantitative standard takes the operating income and total assets as the measurement indicators. The quantitative standard takes the amount of direct property loss, the loss that may be caused or caused by major internal control defects and the negative impact related to the income statement as the measurement indicators. If the internal control defect is direct, it shall be measured by the operating revenue index. If the defect alone or together causes minor property losses, or is punished by the government department below the municipal level (including the amount of financial report misstatement that may be caused by other defects in the city is less than the business income level), but fails to pay 0.5% of the company's regular income, it is recognized as a general defect; If exceeding the disclosure of the operating income report has a negative impact, it is recognized as 0.5% of the general deficiency but less than 1%, it is recognized as an important defect; If the depression is exceeded; If the internal control defect directly leads to large property loss, 1% of the quantitative standard operating income is recognized as a major defect. If the internal control is defective or the loss may be caused or caused by government departments or regulatory agencies above the municipal level is related to asset management, it shall be measured by the asset punishment but not the negative total amount of the company's periodic report disclosure. If the defect alone or together with other defects can affect the surface, it is recognized as an important defect; If the amount of financial report misstatement caused by the lack of internal control is less than 0.5% of the total assets, it will be recognized as a general defect if it directly leads to huge property losses or is affected by the municipal level; If it exceeds 0.5% of the total assets, but the punishment of more than 1% has been imposed by the government department or regulatory authority, it is recognized as an important defect; If it exceeds the formal disclosure of total assets and causes 1% to the disclosure of the company's periodic reports, it is recognized as a major defect. Negative effects are identified as major defects.
(III) evaluation results of the company's internal control
The company confirms the main units, businesses and matters included in the evaluation scope and high-risk areas in accordance with the risk oriented principle. Those included in the evaluation scope include the company 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.
When establishing and implementing the internal control system, the company considered the following basic elements: internal environment, risk assessment, control activities, information and communication, internal supervision and other five elements. The company evaluated the above five elements:
1. Internal environment
(1) Governance structure
Basic information of corporate governance. In strict accordance with the basic norms of enterprise internal control and other relevant laws and regulations, the company has continuously improved the corporate governance structure, strengthened internal management and standardized the company's operation.
Shareholders and general meetings of the company. The company ensures that all shareholders enjoy equal rights; The convening and convening of the general meeting of shareholders fully comply with the requirements and provisions of the articles of association and the rules of procedure of the general meeting of shareholders; For the company's major related party transactions and other major matters, the independent directors of the company have issued special opinions, the company has signed relevant written agreements with related parties and disclosed information in a timely manner.
About the controlling shareholders and the company. The company is completely separated from the controlling shareholder in terms of personnel, assets and finance. The company operates its business, institutional operation and financial accounting independently, and independently undertakes its business responsibilities and risks. The board of directors, the board of supervisors and the internal management of the company operate independently to ensure that major decisions of the company can be made in accordance with legal procedures and normative requirements.
About directors and the board of directors. The board of directors of the company consists of 7 directors, including 3 independent directors. The structure of the board of directors is reasonable, the selection and appointment procedures of the company's directors are standardized and transparent, the selection and appointment process of directors is open, fair, impartial and independent, the information of directors is true and complete, and the candidates for directors have obtained the consent of relevant organizations and themselves in advance, with a written commitment; The three special committees under the board of directors of the company are the strategy committee, the audit committee and the nomination and remuneration assessment committee. They have formulated the rules of procedure of the strategy committee, the rules of procedure of the audit committee and the rules of procedure of the nomination and remuneration assessment committee. Each committee plays its own work functions to ensure that the board of directors of the company is fair, scientific and Make efficient decisions and fully perform the functions of the board of directors.
Supervisors and the board of supervisors. All members of the board of supervisors of the company have relevant professional knowledge and work experience; The board of supervisors shall independently and effectively supervise the performance of duties of directors and senior managers and the company's finance in accordance with the powers conferred by the articles of Association; Attend the meetings of the board of directors as nonvoting delegates and put forward relevant suggestions and opinions to the board of directors.
About company stakeholders. The company fully respects and maintains the legitimate rights of employees, suppliers, customers and other stakeholders, actively cooperates with them and jointly promotes the sustainable, healthy and stable development of the company.
Information disclosure and investor relations management. The company has established a specially assigned investor relations management system, which can provide timely services for shareholders and other investors, receive shareholders' visits and investors' consultation; In order to strengthen the company's information disclosure and increase the company's transparency, the company designated the Secretary of the board of directors to be responsible for information disclosure. (2) Organization setting and power distribution
The company has set up 6 management functional departments and 2 business departments, namely: Board office, audit department, finance department, legal affairs department, human resources department, comprehensive management department, new materials department and digital technology department. According to the principle of independent operation and mutual checks and balances, each department has clear functions, clear rights and responsibilities and can effectively implement various decisions of the company's management through corresponding post responsibilities.
In accordance with laws and regulations and the articles of association, the company effectively extends the operation of its subsidiaries in major aspects such as operation, capital, personnel and finance through the combination of system specification, assessment and audit supervision.
(3) Internal audit
The audit department set up by the company is the daily audit department under the audit committee
