1. Internal control evaluation of purpose
(I) Strengthen and standardize the company's internal control , improve the company's business management level and risk prevention capabilities, promote the company's sustainable development, and safeguard the legitimate rights and interests of all shareholders and stakeholders;
(II) Reasonably ensure that the company's business management is legal and compliant, asset security, financial reports and related information are true and complete, information disclosure is true, accurate, complete and fair, improve the company's operating efficiency and effect, and promote the company's development strategy.
2. The overall status of internal control evaluation work
The company's board of directors authorizes the audit department as the internal control evaluation department, responsible for the specific organization and implementation of internal control evaluation work. Audit Department has established an internal control evaluation working group (hereinafter referred to as the "Evaluation Working Group" or "We") composed of management, department heads and business backbones. On the basis of following the principle of comprehensiveness, the principle of importance of and the principle of objectivity, formulate an evaluation work plan and carry out evaluation work. The company's management and relevant departments actively support and cooperate with the work of the internal control evaluation working group, and accept inspection and evaluation of the internal control working group. The Internal Control Evaluation Working Group prepares an internal control evaluation report based on the evaluation work and in combination with daily supervision and special supervision. After review and review by the Audit Committee [All kinds of audit report templates audit method cases, you can search and review on the internal audit website official account, internal audit website notes], and issue an internal control self-evaluation report, and submit it to the company's board of directors and supervisory board for review and approval. Independent directors express special opinions on internal control self-evaluation.
3. The basis for internal control evaluation
This internal control evaluation is based on " Basic Standards for Internal Control of Enterprises " and its supporting guidelines, "Shenzhen Stock Exchange Listed Companies Self-Discipline Supervision Guidelines No. 2 - Standardized Operation of GEM Listed Companies" and the company's "Internal Control Evaluation Measures", etc., and combined with the company's various internal control systems , the internal and external environment and its own business characteristics, the effectiveness of the company's internal control design and operation as of June 30, 2022.
4. Scope of internal control evaluation
Scope of this internal control evaluation covers the design and operation of internal controls of the company and its subsidiaries. It is included in the evaluation scope. The total assets of unit accounts for 100% of the company's total assets in the consolidated financial statements, and the total operating income accounts for 100% of the company's total operating income in the consolidated financial statements. Company has determined the specific content of internal control evaluation based on internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, and conducted a comprehensive evaluation of the effectiveness of internal control design and operation.
5. Programs and methods for internal control evaluation
Internal control evaluation work is carried out in accordance with the procedures stipulated by the "Basic Standards for Enterprise Internal Control" and the company's "Internal Control Evaluation Measures". During the evaluation process, we implemented procedures and methods that we consider necessary to obtain sufficient and appropriate evaluation evidence for evaluating the effectiveness of internal control of internal controls, checking financial accounting information and contract information, individual interviews, questionnaires, on-site inspections, and travel tests.
6. Internal control inspection and evaluation
According to the provisions of the "Basic Standards for Enterprise Internal Control", the company establishes and implements internal control based on the internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, and follows the principle of comprehensiveness, importance, checks and balances, adaptability, and cost-effectiveness .
(I) Company internal control environment
1, Company organizational structure
(1) Company basic organizational framework
As of the date of signing of this internal control self-evaluation report, the company's internal The organizational structure of the Ministry is shown in the figure below (omitted here, internal audit network note)
(2) Corporate governance structure
1 Company strictly follows the requirements of the " Company Law " and other laws and regulations, and has established a sound governance structure, rules of procedure and decision-making procedures for shareholders' meeting, board of directors, board of supervisors, management, etc., and can effectively perform the responsibilities stipulated in the "Company Law" and the "Company Articles of Association".
The company's shareholders' meeting is the company's highest authority and exercises the voting rights on major matters such as the company's business policies, financing, investment, and profit distribution in accordance with the law. The company revised the "Rules of Procedure for the General Meeting of Shareholders" in March 2022. The "Rules of Procedure for the General Meeting of Shareholders" made clear provisions on the powers of the general meeting of shareholders, convening, meeting proposals and notices, the meeting procedures and resolutions of the general meeting of shareholders, ensuring the standardized operation of the company's general meeting of shareholders. From January to June 2022, the company held a shareholders' meeting.
The company's board of directors is responsible for implementing the decisions made by the shareholders' meeting, exercising the company's business decision-making power in accordance with the law, and being responsible to and reporting to the shareholders' meeting. The company shall elect directors strictly in accordance with the relevant provisions of the Company Law and the Articles of Association, and the personnel composition of the board of directors complies with the requirements of laws, regulations and the Articles of Association. The company's board of directors has four special committees, including the Strategic Development Committee, the Remuneration and Assessment Committee, , the Nomination Committee, and the Audit Committee. At the same time, the board of directors has a special board office, and the board secretary is responsible for handling the daily affairs of the board of directors and information disclosure work and other daily affairs of the board of directors' office. The company's board of directors strictly carries out its work in accordance with the "Company Articles of Association" and " Rules of Procedure ". Each special committee is in accordance with the "Work Rules of the Board of Directors Strategic Development Committee", the "Work Rules of the Board of Directors' Remuneration and Assessment Committee", the "Work Rules of the Board of Directors' Nomination Committee" and the "Work Rules of the Audit Committee". From January to June 2022, the company's board of directors held a total of 4 meetings.
The company’s supervisory board is the company’s supervisory body. The company shall strictly elect supervisors in accordance with the relevant provisions of the Company Law and the Articles of Association, and the personnel composition of the Supervisory Board complies with the requirements of laws, regulations and the Company Articles of Association. The company's supervisory board shall perform its duties in accordance with the requirements of the "Company Articles of Association" and the "Rules of Procedure of the Supervisory Board Meeting", supervise whether directors and senior management personnel violate laws and regulations and infringe upon the interests of the company and shareholders in performing their duties, supervise and inspect the company's finances, and safeguard the rights and interests of the company and all shareholders. From January to June 2022, the company's supervisory board held two meetings.
The company's management is responsible to the board of directors, responsible for organizing and implementing the resolutions of the shareholders' meeting and the board of directors, and presiding over the company's production, operation and management. The company shall appoint general manager, deputy general manager and other senior management personnel in strict accordance with the relevant provisions of the Company Law and the Articles of Association. The company revised the "General Manager's Work Rules" in March 2022. The "General Manager's Work Rules" made clear provisions on the responsibilities and authority of the company's general manager, deputy general manager and other senior management personnel, as well as the general manager's office meeting and reporting system, ensuring that the senior management personnel of company are diligent and responsible and exercise management powers in accordance with the law.
(3) Internal organization
The company has established a scientific and clear internal organization based on the nature and characteristics of its own business. The company's internal institutions include the marketing department, material supply department, technology research and development department, finance department, audit department, comprehensive management department, quality assurance department, production safety department, manufacturing center, nuclear power and military department, supervision department, information department and other functional departments. The internal organizational structure established by the company can clearly define departmental responsibilities and adapt to the requirements of information communication, which is conducive to the upload, issuance and transmission of information at all levels and between business activities, and is conducive to providing employees with the information needed to perform their duties.The company has formulated a clear job responsibilities, approval authority procedures and work guidelines, and has clear institutional regulations on the responsibilities and authority of senior management and all employees. There is neither the absence of incompatible positions nor the phenomenon of missing key functions or cross-functional functions.
2, company internal audit
The company's board of directors has an audit committee. is responsible for the communication of internal and external audit within the company and the supervision and verification of financial and internal control systems, etc. in accordance with the provisions of the "Work Rules of the Board of Directors Audit Committee" and other regulations. Authment Committee consists of 3 directors and 2 independent directors, one of which is an accounting professional, responsible for presiding over the work of the committee. The Audit Committee holds a meeting at least once a quarter to review the internal audit work report and reports to the board of directors at least once a quarter. From January to June 2022, the Audit Committee held three meetings. The Audit Committee has an Audit Department under the Audit Committee, which has the professional ability to independently carry out audit work.
The company's audit department is responsible for supervising and inspecting the company's implementation of national policies and laws, regulations and company rules and regulations, and strictly implementing audit [Audit method and case of various audit report templates can be searched and viewed on the internal audit website official account, internal audit website note] regulations, audit supervision on the company's daily operating conditions, financial security status, and implementation of the company's internal control system, and put forward constructive opinions on existing problems; responsible for organizing and promoting and inspecting the establishment and continuous improvement of the company's internal supervision work system and risk control (avoidance) mechanism; according to the annual audit work plan reviewed by the audit committee, organize the formulation of internal audit work plans and implement various types of internal audits within the company, propose audit reports, make audit decisions and supervise the implementation of the decision.
3, Company Development Strategy
Company Development Strategy is the ultimate goal of the company's internal control. In order to realize the company's development strategy, the company's board of directors has a strategic development committee, which is responsible for researching, planning and making suggestions on the company's medium- and long-term development strategy and major strategic investment decisions. The Strategic Development Committee shall carry out its work in accordance with the "Rules of Work of the Board of Directors' Strategic Development Committee". Its main responsibilities include conducting research and making suggestions on major investment and financing plans, major strategic investments, major capital operations or mergers and acquisitions stipulated by the Company Articles of Association; and organizing an expert review meeting on the above matters and inspecting the implementation of the matter.
4, Human Resources Policy
Company has established and implemented scientific human resources management systems such as talent introduction, use, training, assessment, and incentives.
The company adheres to the people-oriented talent concept, pays great attention to human resources construction, scientifically allocates, rationally allocates, and selects and uses talents at all levels and types. In recent years, the company's business scale has continued to expand, and the company's talent strategy has been continuously optimized and improved. Under the company's scientific and active talent strategy policy, a group of passionate and hard-working middle and senior management cadres and young business backbones have been cultivated and promoted, and a team of talent with high technical level and capable of fighting tough battles has gradually been established, becoming a solid pillar of the company's rapid development and long-term development.
In order to enhance employees' professional knowledge and technology, improve the skill level and overall quality of the employee team, and improve the ability of all employees to adapt to changes and development requirements, the company has established a training and learning mechanism covering all employees, and advocated the construction of " learning enterprise ". From January to June 2022, in light of the company's business development needs and the needs of employees' self-improvement, the company adopted multiple channels and methods such as external learning and internal teaching. It organized and participated in more than 90 training sessions, totaling 6,188 lessons.
The company has always insisted on taking scientific and technological innovation as the first driving force for corporate development and talents as the first resource for corporate development.In order to deepen the construction of the scientific and technological talent team and continuously improve the company's scientific and technological innovation strength and skilled technical level, the company regularly organizes scientific and technological workers' meetings and skilled talent conferences every year to provide special commendations and incentives to the selected scientific and technological talents and skilled talents.
Through the "Evaluation of Models" activity, the monthly outstanding employees, the annual model workers and the annual outstanding employees are selected every month and commended. Special rewards are given to employees who have contributed to improving work efficiency, improving product quality, and improving management from time to time, thereby stimulating employees' enthusiasm for work and interest in studying business, and comprehensively improving employees' cultural level and business quality.
5, Company Culture
The company has established a positive cultural concept. The company's cultural concept is guided by "technology innovation, love for the great industry", "sincereness, fineness, precision and excellence", and "safety, quality, innovation, and service" as its core concept. The company's directors, supervisors and senior management personnel set an example, advocate honesty, trustworthiness, dedication, pioneering and innovativeness; continuously strengthen the company's cultural construction and implementation, cultivate employees' positive values and sense of social responsibility, and cultivate teamwork spirit; enrich employees' cultural life by organizing outdoor employee development, employee sports meetings, Kexin Cultural Festival, retired employee fun parties, etc. The construction of the company's culture has enhanced the cohesion and centripetal force of all employees, providing strong guarantees for enhancing the company's core competitiveness and realizing the company's development strategy.
6, Social Responsibility
Company actively practices various social responsibilities: operating in accordance with the law, paying taxes with integrity; actively safeguarding the legitimate rights and interests of shareholders; paying attention to production safety and environmental protection; caring about employees' health and establishing regular occupational health examination systems for employees; actively improving employees' office environment, implementing clean production, building employee activity gardens, and creating a clean, comfortable and beautiful working environment; paying attention to employee growth, planning professional life for employees, and providing training opportunities in a planned manner; combining the local price growth level and company benefits, appropriately adjusting employees' wages and salaries; the company's trade union actively cares about employees and their families, and regularly organizes charitable donations within the company every year to help employees with serious illnesses, family assistance for employees in need, education donations, etc.; the company attaches importance to contracts and keeps its trustworthy, establishes good business collaboration relationships with product customers and suppliers, and seeks common development.
(II) Risk Assessment
The company attaches great importance to risk assessment and risk analysis. Through risk assessment, it can timely identify and systematically analyze various risks in business activities. Combined with the degree of risks that the company can bear, reasonably determine the risk response strategy , avoid risks or control risks to an acceptable level. When formulating the annual operating plan , the company carefully analyzes and discusses the current internal and external situations, and identifies and analyzes internal and external risk factors that may affect the development of the enterprise; at irregular regular meetings, the management team promptly informs the identified risk factors that may affect the realization of production and operation goals and management goals. The company has identified the main risks, risk analysis and response strategies:
1, internal risk factors
(1) The bad debt losses caused by the increase in accounts receivable risk
At present, the company's marketing orders continue to be sufficient. With the increase in the amount of marketing orders, the company's advance payment and margin in the process of implementing project product manufacturing has also continued to increase, and the corresponding cumulative amount of accounts receivable has also continued to increase. Since the payment conditions stipulated in the ordering contract are all paid in stages and proportions according to the production progress, and the conditions are strict, the risk of receivables borne by the company has been further increased. Although the company's main sources of accounts receivable are high-quality large customers who have been working for many years, they have good credit and strong economic strength. However, if the other party encounters a major adverse or sudden event, or the company cannot further strengthen and improve the control and management of accounts receivable, resulting in the inability to recover accounts receivable on time, the resulting bad debt losses, capital costs and management costs may have an adverse impact on the company's performance and production and operation.
Countermeasures: On the one hand, the company will do a good job in its own production control over the project, try to eliminate and avoid the impact of project delay on the company's production and operation, and meet customers' needs by providing customers with high-quality products and services. On the other hand, the company will continue to improve the credit assessment management system, continuously sort out and track the balance of accounts receivable, prudently control important collection nodes, timely strengthen customer communication and confirmation, take necessary and legal measures to increase the recovery and collection of accounts receivable, strengthen the responsibility and benefit assessment of both marketing market development capabilities and risk control, and achieve effective control of receivables in all stages before, during and after, maintain the good situation of cash flow , improve the efficiency of funds operation, thereby reducing the risk of receivable balance and bad debt loss. If it is true that bad debt loss occurs in accounts receivable, timely perform the company's internal approval procedures, and fully list the amount of bad debt loss in the financial statements and notes.
(2) Risk of increased costs due to fluctuations in raw material prices
Company mainly produces heavy-duty pressure vessel series products. The raw materials of the product are mainly large steel and forgings, and the specifications and quality requirements for steel are high. Although the company formulates corresponding procurement management systems and supplier selection measures when purchasing raw materials, steel belongs to commodity , with a high degree of marketization. Prices are affected by market supply and demand, production costs, international metal prices, short-term market speculation and other factors, and are prone to fluctuations, and may increase the production cost of the company's products and affect the company's overall profitability.
Countermeasures: The company will track the fluctuations in raw material prices at any time, and do a good job in controlling raw material procurement before, during and afterwards, to ensure that the cost of raw material procurement is reasonable and effective.
(3) Project performance risk
At present, the company has sufficient marketing orders and is busy with production. During the contract execution process, there may be factors such as high concentration of product order delivery period, intensive customer urgency, and poor production control organization, and other factors, resulting in product quality and delayed delivery problems, resulting in project failure to perform on time, increasing costs, resulting in claims, and affecting the company's operating performance and market image.
Countermeasures: The company will strengthen project management and control, do a good job in project production organization, planning, and quality process control of key nodes and processes, and promptly communicate and connect with customers in the product manufacturing process, focus on quality and bear delivery period to ensure the smooth implementation of the project.
(4) Risk of application of technology innovation
The company has always attached great importance to technology research and development and design work. However, as a national special equipment, pressure vessel products have high design and safety requirements, and the application promotion cycle of new products, new technologies and new processes is long, and there is a risk of application promotion failure.
Countermeasures: The company will deepen the management of R&D project demonstration, promote the breadth and depth of technological innovation, increase the reserve and investment of R&D funds for technological innovation, continuously cultivate and introduce excellent technological innovation talents, pay close attention to the applicability of technological innovation and the actual scenarios, strengthen cooperation and exchanges with relevant domestic universities and research institutions, etc., to ensure that the company's various technological innovations can be effectively applied.
(5) Business management risks
With the expansion of the company's business scale and business areas, higher requirements and standards have been put forward for the company in terms of management mechanisms, management ideas, strategic layout, etc. Although the company's management has rich experience in business management, it still needs to be continuously adjusted to adapt to the new social and economic situation and the needs of the company's business development. If the management fails to relax its thinking in a timely manner and cannot respond to changes in the internal and external environment such as market competition, industry development, and business scale expansion, it will most likely hinder the smooth progress of the company's business and strategy, and miss development opportunities, leading to a series of business management risks.
Countermeasures: In response to possible business management risks, the company will continuously adjust management ideas and methods according to the needs of the economic situation development, strictly strengthen the company's standardized operations and internal control construction in accordance with laws and regulations; strengthen internal personnel training at all levels, introduce outstanding senior management and technical talents in a timely manner, optimize the construction of the talent team, and continuously cultivate and build a superb professional skill team. Strengthen innovation in basic processes, key materials, and core technologies, and serve the high-quality development of . In the face of growing customer demand, we will focus on lean project planning, tap into the endogenous potential, build a foundation, break through the bottleneck of production capacity, continuously improve the flexibility of output, promote intelligent manufacturing, data management, clean production, and precision manufacturing;
always pursues the leading position in the quality industry, respects the commitment to supplier partners, constantly provides customers with highly professional products, continues to strive to maintain and enhance brand advantages, and aims to build a national brand, constantly expand new boundaries in the industry, and serve a broader market. Further strengthen the timeliness and scientific nature of major decisions of the board of directors and management, improve management execution, take into account development orientation and risk orientation, improve risk prediction capabilities, strictly prevent and resolve various risks and challenges, adhere to the path of high-quality development, actively strengthen innovation capabilities and advanced team culture construction, and continuously enrich the connotation of corporate team culture construction, so that corporate management can continuously adapt to the development and changes of the social and economic situation.
2, external risk factors
(1) Market competition risk
main business of the company is the design, manufacturing and installation, complete sets and services of high-end heavy-duty process equipment and system integration, technical consultation, engineering project contracting, etc. Market demand is closely related to downstream petroleum refining, natural gas chemical, coal chemical, nuclear power military industry, new materials and other projects. At present, the company has strong manufacturing technology competitiveness and brand advantages in the industry. At the same time, the investment and construction of downstream enterprises' planning projects has been increasing, transformation, upgrading, quality and expansion have been significantly improved, the company's marketing orders have been sufficient, production tasks have been growing, and market influence and popularity have continued to increase. It is expected that the overall operating situation will continue to be optimistic in the next few years. However, fixed investment in downstream industries still has certain volatility due to changes in the country's political and economic situation. If the fluctuations lead to a decline in demand in downstream industries, it will intensify market competition. If the company lacks its ability to resist market competition and fails to manage production and operation, it will face the risk of intensifying competition and declining market share, which will affect the sustained and stable growth of performance.
Countermeasures: On the one hand, the company adheres to market credibility, increases marketing development efforts, focuses on strengthening cooperation with large and high-quality customers, strives for marketing orders with high added value, pays attention to innovation and differentiated services, and increases market share. On the other hand, we will strengthen R&D investment in new products and new technologies, continuously accumulate the proprietary capabilities of advanced equipment technology, and optimize the product structure. We will focus on internal production control and process compliance capabilities, do a good job in controlling production progress and key nodes, steadily improve product quality, and strictly ensure delivery time; continuously improve efficient management and innovative services, and implement cost-reducing and efficiency-enhancing measures.
continues to deepen the existing advantageous areas of high-end core core of kerosene and gas chemical industry and super-large and over-limit equipment, increase the market expansion of new energy and new materials such as nuclear power, solar photovoltaic and wind power, actively explore and develop link devices such as hydrogen energy storage and transportation, and steadily promote specialized and specialized to promote high-quality development. Find new performance growth points in a timely manner, expand market channels in downstream industries, cultivate new momentum, build common development of related diversified industries, enhance profit resilience and weaken the possible impact of growth volatility, maintain competitive vitality, enhance risk resistance, and achieve everlasting performance.
(2) Tax policy change risk
Tax policy risk: The company currently has the option to enjoy the preferential policies for high-tech enterprises and the preferential policies for corporate income tax in Western Development .According to the provisions of the Ministry of Finance, General Administration of Customs, and the State Administration of Taxation on the Implementation of Tax Policies on the In-depth Implementation of the Western Development Strategy (Finance and Taxation [2011] No. 58), the National Development and Reform Commission's "Guidelines for Industrial Structure Adjustment (2019 This)" ( National Development and Reform Commission of the People's Republic of China, Order No. 49), the State Administration of Taxation's "Announcement on Implementing the Implementation of the
Countermeasures: The company will continue to strengthen the collection and analysis of national tax policies and tax regulations information, and within the scope of allowed selection of tax laws and regulations, choose to implement low-risk tax preferential policies, reduce the impact of changes in tax policies on the company's operating results, and lay the foundation for the long-term development of the company.
(3) Industry policy change risks
The company's main products pressure vessel equipment belong to special equipment produced by the state administrative license. According to relevant national administrative regulations, rules and normative documents, the state implements a qualification licensing system for the design and manufacturing of pressure vessels, and implements a mandatory supervision and inspection system for safety performance for related products. Although the company currently has all the design licenses and manufacturing licenses required for production and operation, if the state makes major adjustments to the relevant franchise policies, it may have a certain impact on the company's production and operation.
Response measures: The company's management will closely monitor national macro policies, pay attention to industry trends and market trends, and take positive measures to respond to related changes.
(4) Operating risks brought by macroeconomic fluctuations
Company mainly produces special products such as pressure vessels. The targets of such products are mainly oil refining, chemicals, nuclear power and other industries. As the basic industry of the national economy, these industries are closely related to the country's macroeconomic conditions, fixed asset investment, etc., and will be affected by the fluctuations in the macroeconomic cycle. If the country's macroeconomic growth slows down, it may directly lead to a decrease in new investment projects in the downstream industries served by the company, and the growth of corresponding supporting products market demand will decline, and the decline in downstream industries' prosperity will have an adverse impact on our company's operating performance.
Countermeasures: The company will closely monitor and analyze the development and changes of the industry under the domestic and international macroeconomic situation, actively adapt to changes in market demand, continue to increase the research and development of new products and new technologies, do a good job in product structure adjustment and transformation and upgrading, continue to forge the strengths of enterprises, continuously broaden new development boundaries, and prevent operating risks caused by macroeconomic fluctuations or policy changes.
(III) Internal control activities
1, the company's main control measures
The company's control measures generally include: incompatible position separation control, authorization approval control, accounting system control, property protection control, budget control, operation analysis control and performance evaluation control, etc.
(1) Incompatible positions separation control
In order to prevent and promptly discover errors and frauds caused by relevant positions in performing their duties, the company reasonably sets up division of labor, scientifically divides responsibilities and authority, implements the principle of separation of incompatible positions, and forms a mutual check and balance mechanism. For example, the separation of responsibilities of cash cashiers and accounting positions, the authorization and approval of various economic businesses such as contract conclusion and approval, procurement and acceptance are separated from the specific responsibilities of responsibilities of responsibilities of responsibilities, etc. It is strictly forbidden for the same person to handle the entire process of the same business matters, and strictly implement the separation mechanism of "money, account, and material" in charge.
(2) Authorization Approval Control
Company adopts different transaction authorizations according to the nature and amount of the transaction, and according to the provisions of the Articles of Association and various internal control systems. For routine business such as reimbursement and payment of expenses that are frequently incurred, the approval system of the heads of various functional departments, company leaders, and general managers is adopted, and internal control systems such as the "Regulations on Reimbursement and Payment of Expense Invoices", "Regulations on Reimbursement and Payment of Procurement Invoices", "Regulations on Reimbursement and Payment of Procurement Invoices", "Regulations on Reimbursement and Payment of Employees' Borrows", "Regulations on Travel Expenses' Reimbursement", "Regulations on Transfer of Permissions of Items and Services Procurement Business", and "Regulations on Transfer of Rights and Responsibilities of Fund Payment Business" are formulated to clearly stipulate.
For non-recurring business transactions, such as foreign investment, additional stock issuance, asset restructuring, transfer of equity, loans, guarantees, related transactions, etc., it formulates internal control systems such as "Foreign Investment Management System", "Related Transaction Decision-making System", and "Foreign Guarantee Management System". According to different transaction volumes, the company's general manager, board of directors, and shareholders' meeting will be approved by the company's general manager, board of directors, and shareholders' meeting. Independent directors express independent opinions on major matters. The company has established a scientific, rigorous and efficient authorization and approval control system.
(3) Accounting system control
The company has established an independent accounting institution to fully handle the company's financial accounting business under the leadership of the financial director. According to the financial accounting business needs, accounting job is set up, and financial accountants with relevant professional knowledge and professional skills are equipped. The job responsibility system and assessment system for financial accounting personnel are implemented to ensure the smooth progress of financial work. The company's financial accounting positions can play a role in restraining each other, and the functions of approval, execution and record are separated.
Company strictly implements the national unified " Enterprise Accounting Standards " and its supplementary provisions, establishes and improves the company's specific accounting policies, accounting estimation and financial management systems, and makes clear and specific provisions on the processing procedures of basic accounting work standards , accounting vouchers, accounting books, accounting reports, as well as fund management and control, physical management and control, etc. These accounting policies and financial accounting systems provide a strong guarantee for regulating company accounting, strengthening accounting supervision of , ensuring the authenticity and accuracy of financial accounting data, preventing errors and plugging loopholes.
(4) Property protection and control
The company has established a protection and control system for physical assets such as cash, inventory, fixed assets, intangible assets, and under construction projects, and has equipped it with necessary equipment and personnel, so that the safety and integrity of the assets are fundamentally guaranteed. Restrict unauthorized personnel from contact with property, and take measures such as regular inventory, property records, account verification, and property insurance to effectively ensure the safety and integrity of assets.
(5) Budget control
In order to strengthen internal control, prevent business risks, improve the company's management level and economic benefits, and achieve business goals, the company implements business budget management and clarify the work responsibilities, procedures and specific requirements of various departments and links such as budget preparation, approval, execution, analysis and assessment. The company formulates the operating budget and plan for the next year at the end of each year, and breaks down the annual budget goals into monthly implementation. The company's implementation of budget management is not only conducive to effectively organizing and coordinating the company's production and operation activities, completing established business goals and work plans, but also conducive to financial control and strengthening performance appraisal.
(6) Operation Analysis Control
In order to timely and accurately grasp the completion of various economic indicators of the company's daily operation activities and ensure the completion of the annual budget and work plan, the company has established an operation analysis mechanism at all levels and systems led by the management meeting.The company organizes general manager's office meetings from time to time to discuss and analyze the recent development and completion of various departments and work links, existing problems and rectification and improvement measures, and arranges work plans for the next stage; the Production Safety Department organizes safety meetings every quarter to discuss the company's safety, environmental protection, and occupational health matters; departments related to production and operation organize weekly project coordination meetings to discuss and coordinate problems that need to be solved in the production and operation process; each department arranges and deploys key tasks on the day's day's morning meeting.
(7) Performance evaluation control
In order to ensure the realization of the company's business goals and the smooth implementation of the company's internal control systems, the company has formulated corresponding performance evaluation methods for personnel at all levels. The company's performance appraisal measures implement the principles of "openness, fairness and justice" and fully reflect the incentive mechanism that links personal income to company performance and personal contribution.
The Board of Directors' Remuneration and Assessment Committee is in accordance with the provisions of the "Work Rules of the Remuneration and Assessment Committee", it is specifically responsible for the formulation of remuneration standards and plans for directors and senior management personnel; it is responsible for reviewing the performance of duties of the company's directors and senior management personnel and conducting annual assessments on them; it is responsible for supervising the implementation of the company's remuneration system.
The company formulated internal control systems for performance appraisal, such as "Salary Management System", "Internal Output Value and Performance Calculation (Appraisal Measures), "Market Department Functional Allocation and Performance Management Measures", "Employee Reward and Punishment Management System", "Job Skills Salary Management Measures", "Performance Salary Distribution Management Measures" and other performance appraisal internal control systems have comprehensively and systematically stipulated the specific performance appraisal methods for each department and position, which is conducive to fully mobilizing the work enthusiasm of all employees.
The formulation of the company's performance management system starts from the company's strategy and is assessed to each department and every employee based on annual business goals, which is conducive to inspiring all employees' enthusiasm for work and ensuring the realization of the company's development strategy.
2. The company's main control activities
(1) Management control of subsidiaries
In order to standardize the company's management control of branches and subsidiaries, standardize internal operating mechanisms, safeguard the interests of all investors, promote standardized operation and healthy development, the company has formulated the "Second (Subsidiary) Company Management System".
"Second (Subsidiary) Company Management System" makes clear provisions on the generation and responsibilities of the directors, supervisors and senior management of subsidiaries, operation and investment decision-making management, financial management, information disclosure affairs management and reporting system, archive management, etc.
In order to perform the duties of the investor and safeguard the rights and interests of the investor, the company has appointed directors, supervisors and financial personnel to its subsidiaries.
At the end of each year, the audit department of company conducts a special audit of all subsidiaries, reflecting the financial status, operating results, and internal control establishment and implementation of the subsidiaries.
(2) Internal control of related transactions
In order to ensure that the related transactions between the company and related parties comply with the principles of fairness, justice and openness, and to protect the legitimate rights and interests of the majority of investors, especially small and medium-sized investors, the company formulated the "Related Transaction Decision-making System" in accordance with the provisions of relevant laws and regulations and the company's articles of association, which defines related parties and related relationships, related transactions, and clarifies the decision-making procedures of related transactions and the information disclosure of related transactions.
Company is always concerned about changes in related parties and related relationships, pay attention to whether daily major transactions are related to related transactions, and it is strictly prohibited to use related transactions to directly or indirectly infringe on the interests of small and medium-sized investors.
At the end of each year, the audit department of conducts a special audit of related transactions, reflecting whether the approval procedures for related transactions that the company had in that year comply with the provisions of corporate governance and relevant regulations, and whether there were any violations of related transactions. 1. Internal control evaluation of purpose (I) Strengthen and standardize the company's internal control , improve the company's business management level and risk prevention capabilities, promote the company's sustainable development, and safeguard the legitimate rights and interests of all shareholders and stakeholders;
(II) Reasonably ensure that the company's business management is legal and compliant, asset security, financial reports and related information are true and complete, information disclosure is true, accurate, complete and fair, improve the company's operating efficiency and effect, and promote the company's development strategy.
2. The overall status of internal control evaluation work
The company's board of directors authorizes the audit department as the internal control evaluation department, responsible for the specific organization and implementation of internal control evaluation work. Audit Department has established an internal control evaluation working group (hereinafter referred to as the "Evaluation Working Group" or "We") composed of management, department heads and business backbones. On the basis of following the principle of comprehensiveness, the principle of importance of and the principle of objectivity, formulate an evaluation work plan and carry out evaluation work. The company's management and relevant departments actively support and cooperate with the work of the internal control evaluation working group, and accept inspection and evaluation of the internal control working group. The Internal Control Evaluation Working Group prepares an internal control evaluation report based on the evaluation work and in combination with daily supervision and special supervision. After review and review by the Audit Committee [All kinds of audit report templates audit method cases, you can search and review on the internal audit website official account, internal audit website notes], and issue an internal control self-evaluation report, and submit it to the company's board of directors and supervisory board for review and approval. Independent directors express special opinions on internal control self-evaluation.
3. The basis for internal control evaluation
This internal control evaluation is based on " Basic Standards for Internal Control of Enterprises " and its supporting guidelines, "Shenzhen Stock Exchange Listed Companies Self-Discipline Supervision Guidelines No. 2 - Standardized Operation of GEM Listed Companies" and the company's "Internal Control Evaluation Measures", etc., and combined with the company's various internal control systems , the internal and external environment and its own business characteristics, the effectiveness of the company's internal control design and operation as of June 30, 2022.
4. Scope of internal control evaluation
Scope of this internal control evaluation covers the design and operation of internal controls of the company and its subsidiaries. It is included in the evaluation scope. The total assets of unit accounts for 100% of the company's total assets in the consolidated financial statements, and the total operating income accounts for 100% of the company's total operating income in the consolidated financial statements. Company has determined the specific content of internal control evaluation based on internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, and conducted a comprehensive evaluation of the effectiveness of internal control design and operation.
5. Programs and methods for internal control evaluation
Internal control evaluation work is carried out in accordance with the procedures stipulated by the "Basic Standards for Enterprise Internal Control" and the company's "Internal Control Evaluation Measures". During the evaluation process, we implemented procedures and methods that we consider necessary to obtain sufficient and appropriate evaluation evidence for evaluating the effectiveness of internal control of internal controls, checking financial accounting information and contract information, individual interviews, questionnaires, on-site inspections, and travel tests.
6. Internal control inspection and evaluation
According to the provisions of the "Basic Standards for Enterprise Internal Control", the company establishes and implements internal control based on the internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, and follows the principle of comprehensiveness, importance, checks and balances, adaptability, and cost-effectiveness .
(I) Company internal control environment
1, Company organizational structure
(1) Company basic organizational framework
As of the date of signing of this internal control self-evaluation report, the company's internal The organizational structure of the Ministry is shown in the figure below (omitted here, internal audit network note)
(2) Corporate governance structure
1 Company strictly follows the requirements of the " Company Law " and other laws and regulations, and has established a sound governance structure, rules of procedure and decision-making procedures for shareholders' meeting, board of directors, board of supervisors, management, etc., and can effectively perform the responsibilities stipulated in the "Company Law" and the "Company Articles of Association".
The company's shareholders' meeting is the company's highest authority and exercises the voting rights on major matters such as the company's business policies, financing, investment, and profit distribution in accordance with the law. The company revised the "Rules of Procedure for the General Meeting of Shareholders" in March 2022. The "Rules of Procedure for the General Meeting of Shareholders" made clear provisions on the powers of the general meeting of shareholders, convening, meeting proposals and notices, the meeting procedures and resolutions of the general meeting of shareholders, ensuring the standardized operation of the company's general meeting of shareholders. From January to June 2022, the company held a shareholders' meeting.
The company's board of directors is responsible for implementing the decisions made by the shareholders' meeting, exercising the company's business decision-making power in accordance with the law, and being responsible to and reporting to the shareholders' meeting. The company shall elect directors strictly in accordance with the relevant provisions of the Company Law and the Articles of Association, and the personnel composition of the board of directors complies with the requirements of laws, regulations and the Articles of Association. The company's board of directors has four special committees, including the Strategic Development Committee, the Remuneration and Assessment Committee, , the Nomination Committee, and the Audit Committee. At the same time, the board of directors has a special board office, and the board secretary is responsible for handling the daily affairs of the board of directors and information disclosure work and other daily affairs of the board of directors' office. The company's board of directors strictly carries out its work in accordance with the "Company Articles of Association" and " Rules of Procedure ". Each special committee is in accordance with the "Work Rules of the Board of Directors Strategic Development Committee", the "Work Rules of the Board of Directors' Remuneration and Assessment Committee", the "Work Rules of the Board of Directors' Nomination Committee" and the "Work Rules of the Audit Committee". From January to June 2022, the company's board of directors held a total of 4 meetings.
The company’s supervisory board is the company’s supervisory body. The company shall strictly elect supervisors in accordance with the relevant provisions of the Company Law and the Articles of Association, and the personnel composition of the Supervisory Board complies with the requirements of laws, regulations and the Company Articles of Association. The company's supervisory board shall perform its duties in accordance with the requirements of the "Company Articles of Association" and the "Rules of Procedure of the Supervisory Board Meeting", supervise whether directors and senior management personnel violate laws and regulations and infringe upon the interests of the company and shareholders in performing their duties, supervise and inspect the company's finances, and safeguard the rights and interests of the company and all shareholders. From January to June 2022, the company's supervisory board held two meetings.
The company's management is responsible to the board of directors, responsible for organizing and implementing the resolutions of the shareholders' meeting and the board of directors, and presiding over the company's production, operation and management. The company shall appoint general manager, deputy general manager and other senior management personnel in strict accordance with the relevant provisions of the Company Law and the Articles of Association. The company revised the "General Manager's Work Rules" in March 2022. The "General Manager's Work Rules" made clear provisions on the responsibilities and authority of the company's general manager, deputy general manager and other senior management personnel, as well as the general manager's office meeting and reporting system, ensuring that the senior management personnel of company are diligent and responsible and exercise management powers in accordance with the law.
(3) Internal organization
The company has established a scientific and clear internal organization based on the nature and characteristics of its own business. The company's internal institutions include the marketing department, material supply department, technology research and development department, finance department, audit department, comprehensive management department, quality assurance department, production safety department, manufacturing center, nuclear power and military department, supervision department, information department and other functional departments. The internal organizational structure established by the company can clearly define departmental responsibilities and adapt to the requirements of information communication, which is conducive to the upload, issuance and transmission of information at all levels and between business activities, and is conducive to providing employees with the information needed to perform their duties.The company has formulated a clear job responsibilities, approval authority procedures and work guidelines, and has clear institutional regulations on the responsibilities and authority of senior management and all employees. There is neither the absence of incompatible positions nor the phenomenon of missing key functions or cross-functional functions.
2, company internal audit
The company's board of directors has an audit committee. is responsible for the communication of internal and external audit within the company and the supervision and verification of financial and internal control systems, etc. in accordance with the provisions of the "Work Rules of the Board of Directors Audit Committee" and other regulations. Authment Committee consists of 3 directors and 2 independent directors, one of which is an accounting professional, responsible for presiding over the work of the committee. The Audit Committee holds a meeting at least once a quarter to review the internal audit work report and reports to the board of directors at least once a quarter. From January to June 2022, the Audit Committee held three meetings. The Audit Committee has an Audit Department under the Audit Committee, which has the professional ability to independently carry out audit work.
The company's audit department is responsible for supervising and inspecting the company's implementation of national policies and laws, regulations and company rules and regulations, and strictly implementing audit [Audit method and case of various audit report templates can be searched and viewed on the internal audit website official account, internal audit website note] regulations, audit supervision on the company's daily operating conditions, financial security status, and implementation of the company's internal control system, and put forward constructive opinions on existing problems; responsible for organizing and promoting and inspecting the establishment and continuous improvement of the company's internal supervision work system and risk control (avoidance) mechanism; according to the annual audit work plan reviewed by the audit committee, organize the formulation of internal audit work plans and implement various types of internal audits within the company, propose audit reports, make audit decisions and supervise the implementation of the decision.
3, Company Development Strategy
Company Development Strategy is the ultimate goal of the company's internal control. In order to realize the company's development strategy, the company's board of directors has a strategic development committee, which is responsible for researching, planning and making suggestions on the company's medium- and long-term development strategy and major strategic investment decisions. The Strategic Development Committee shall carry out its work in accordance with the "Rules of Work of the Board of Directors' Strategic Development Committee". Its main responsibilities include conducting research and making suggestions on major investment and financing plans, major strategic investments, major capital operations or mergers and acquisitions stipulated by the Company Articles of Association; and organizing an expert review meeting on the above matters and inspecting the implementation of the matter.
4, Human Resources Policy
Company has established and implemented scientific human resources management systems such as talent introduction, use, training, assessment, and incentives.
The company adheres to the people-oriented talent concept, pays great attention to human resources construction, scientifically allocates, rationally allocates, and selects and uses talents at all levels and types. In recent years, the company's business scale has continued to expand, and the company's talent strategy has been continuously optimized and improved. Under the company's scientific and active talent strategy policy, a group of passionate and hard-working middle and senior management cadres and young business backbones have been cultivated and promoted, and a team of talent with high technical level and capable of fighting tough battles has gradually been established, becoming a solid pillar of the company's rapid development and long-term development.
In order to enhance employees' professional knowledge and technology, improve the skill level and overall quality of the employee team, and improve the ability of all employees to adapt to changes and development requirements, the company has established a training and learning mechanism covering all employees, and advocated the construction of " learning enterprise ". From January to June 2022, in light of the company's business development needs and the needs of employees' self-improvement, the company adopted multiple channels and methods such as external learning and internal teaching. It organized and participated in more than 90 training sessions, totaling 6,188 lessons.
The company has always insisted on taking scientific and technological innovation as the first driving force for corporate development and talents as the first resource for corporate development.In order to deepen the construction of the scientific and technological talent team and continuously improve the company's scientific and technological innovation strength and skilled technical level, the company regularly organizes scientific and technological workers' meetings and skilled talent conferences every year to provide special commendations and incentives to the selected scientific and technological talents and skilled talents.
Through the "Evaluation of Models" activity, the monthly outstanding employees, the annual model workers and the annual outstanding employees are selected every month and commended. Special rewards are given to employees who have contributed to improving work efficiency, improving product quality, and improving management from time to time, thereby stimulating employees' enthusiasm for work and interest in studying business, and comprehensively improving employees' cultural level and business quality.
5, Company Culture
The company has established a positive cultural concept. The company's cultural concept is guided by "technology innovation, love for the great industry", "sincereness, fineness, precision and excellence", and "safety, quality, innovation, and service" as its core concept. The company's directors, supervisors and senior management personnel set an example, advocate honesty, trustworthiness, dedication, pioneering and innovativeness; continuously strengthen the company's cultural construction and implementation, cultivate employees' positive values and sense of social responsibility, and cultivate teamwork spirit; enrich employees' cultural life by organizing outdoor employee development, employee sports meetings, Kexin Cultural Festival, retired employee fun parties, etc. The construction of the company's culture has enhanced the cohesion and centripetal force of all employees, providing strong guarantees for enhancing the company's core competitiveness and realizing the company's development strategy.
6, Social Responsibility
Company actively practices various social responsibilities: operating in accordance with the law, paying taxes with integrity; actively safeguarding the legitimate rights and interests of shareholders; paying attention to production safety and environmental protection; caring about employees' health and establishing regular occupational health examination systems for employees; actively improving employees' office environment, implementing clean production, building employee activity gardens, and creating a clean, comfortable and beautiful working environment; paying attention to employee growth, planning professional life for employees, and providing training opportunities in a planned manner; combining the local price growth level and company benefits, appropriately adjusting employees' wages and salaries; the company's trade union actively cares about employees and their families, and regularly organizes charitable donations within the company every year to help employees with serious illnesses, family assistance for employees in need, education donations, etc.; the company attaches importance to contracts and keeps its trustworthy, establishes good business collaboration relationships with product customers and suppliers, and seeks common development.
(II) Risk Assessment
The company attaches great importance to risk assessment and risk analysis. Through risk assessment, it can timely identify and systematically analyze various risks in business activities. Combined with the degree of risks that the company can bear, reasonably determine the risk response strategy , avoid risks or control risks to an acceptable level. When formulating the annual operating plan , the company carefully analyzes and discusses the current internal and external situations, and identifies and analyzes internal and external risk factors that may affect the development of the enterprise; at irregular regular meetings, the management team promptly informs the identified risk factors that may affect the realization of production and operation goals and management goals. The company has identified the main risks, risk analysis and response strategies:
1, internal risk factors
(1) The bad debt losses caused by the increase in accounts receivable risk
At present, the company's marketing orders continue to be sufficient. With the increase in the amount of marketing orders, the company's advance payment and margin in the process of implementing project product manufacturing has also continued to increase, and the corresponding cumulative amount of accounts receivable has also continued to increase. Since the payment conditions stipulated in the ordering contract are all paid in stages and proportions according to the production progress, and the conditions are strict, the risk of receivables borne by the company has been further increased. Although the company's main sources of accounts receivable are high-quality large customers who have been working for many years, they have good credit and strong economic strength. However, if the other party encounters a major adverse or sudden event, or the company cannot further strengthen and improve the control and management of accounts receivable, resulting in the inability to recover accounts receivable on time, the resulting bad debt losses, capital costs and management costs may have an adverse impact on the company's performance and production and operation.
Countermeasures: On the one hand, the company will do a good job in its own production control over the project, try to eliminate and avoid the impact of project delay on the company's production and operation, and meet customers' needs by providing customers with high-quality products and services. On the other hand, the company will continue to improve the credit assessment management system, continuously sort out and track the balance of accounts receivable, prudently control important collection nodes, timely strengthen customer communication and confirmation, take necessary and legal measures to increase the recovery and collection of accounts receivable, strengthen the responsibility and benefit assessment of both marketing market development capabilities and risk control, and achieve effective control of receivables in all stages before, during and after, maintain the good situation of cash flow , improve the efficiency of funds operation, thereby reducing the risk of receivable balance and bad debt loss. If it is true that bad debt loss occurs in accounts receivable, timely perform the company's internal approval procedures, and fully list the amount of bad debt loss in the financial statements and notes.
(2) Risk of increased costs due to fluctuations in raw material prices
Company mainly produces heavy-duty pressure vessel series products. The raw materials of the product are mainly large steel and forgings, and the specifications and quality requirements for steel are high. Although the company formulates corresponding procurement management systems and supplier selection measures when purchasing raw materials, steel belongs to commodity , with a high degree of marketization. Prices are affected by market supply and demand, production costs, international metal prices, short-term market speculation and other factors, and are prone to fluctuations, and may increase the production cost of the company's products and affect the company's overall profitability.
Countermeasures: The company will track the fluctuations in raw material prices at any time, and do a good job in controlling raw material procurement before, during and afterwards, to ensure that the cost of raw material procurement is reasonable and effective.
(3) Project performance risk
At present, the company has sufficient marketing orders and is busy with production. During the contract execution process, there may be factors such as high concentration of product order delivery period, intensive customer urgency, and poor production control organization, and other factors, resulting in product quality and delayed delivery problems, resulting in project failure to perform on time, increasing costs, resulting in claims, and affecting the company's operating performance and market image.
Countermeasures: The company will strengthen project management and control, do a good job in project production organization, planning, and quality process control of key nodes and processes, and promptly communicate and connect with customers in the product manufacturing process, focus on quality and bear delivery period to ensure the smooth implementation of the project.
(4) Risk of application of technology innovation
The company has always attached great importance to technology research and development and design work. However, as a national special equipment, pressure vessel products have high design and safety requirements, and the application promotion cycle of new products, new technologies and new processes is long, and there is a risk of application promotion failure.
Countermeasures: The company will deepen the management of R&D project demonstration, promote the breadth and depth of technological innovation, increase the reserve and investment of R&D funds for technological innovation, continuously cultivate and introduce excellent technological innovation talents, pay close attention to the applicability of technological innovation and the actual scenarios, strengthen cooperation and exchanges with relevant domestic universities and research institutions, etc., to ensure that the company's various technological innovations can be effectively applied.
(5) Business management risks
With the expansion of the company's business scale and business areas, higher requirements and standards have been put forward for the company in terms of management mechanisms, management ideas, strategic layout, etc. Although the company's management has rich experience in business management, it still needs to be continuously adjusted to adapt to the new social and economic situation and the needs of the company's business development. If the management fails to relax its thinking in a timely manner and cannot respond to changes in the internal and external environment such as market competition, industry development, and business scale expansion, it will most likely hinder the smooth progress of the company's business and strategy, and miss development opportunities, leading to a series of business management risks.
Countermeasures: In response to possible business management risks, the company will continuously adjust management ideas and methods according to the needs of the economic situation development, strictly strengthen the company's standardized operations and internal control construction in accordance with laws and regulations; strengthen internal personnel training at all levels, introduce outstanding senior management and technical talents in a timely manner, optimize the construction of the talent team, and continuously cultivate and build a superb professional skill team. Strengthen innovation in basic processes, key materials, and core technologies, and serve the high-quality development of . In the face of growing customer demand, we will focus on lean project planning, tap into the endogenous potential, build a foundation, break through the bottleneck of production capacity, continuously improve the flexibility of output, promote intelligent manufacturing, data management, clean production, and precision manufacturing;
always pursues the leading position in the quality industry, respects the commitment to supplier partners, constantly provides customers with highly professional products, continues to strive to maintain and enhance brand advantages, and aims to build a national brand, constantly expand new boundaries in the industry, and serve a broader market. Further strengthen the timeliness and scientific nature of major decisions of the board of directors and management, improve management execution, take into account development orientation and risk orientation, improve risk prediction capabilities, strictly prevent and resolve various risks and challenges, adhere to the path of high-quality development, actively strengthen innovation capabilities and advanced team culture construction, and continuously enrich the connotation of corporate team culture construction, so that corporate management can continuously adapt to the development and changes of the social and economic situation.
2, external risk factors
(1) Market competition risk
main business of the company is the design, manufacturing and installation, complete sets and services of high-end heavy-duty process equipment and system integration, technical consultation, engineering project contracting, etc. Market demand is closely related to downstream petroleum refining, natural gas chemical, coal chemical, nuclear power military industry, new materials and other projects. At present, the company has strong manufacturing technology competitiveness and brand advantages in the industry. At the same time, the investment and construction of downstream enterprises' planning projects has been increasing, transformation, upgrading, quality and expansion have been significantly improved, the company's marketing orders have been sufficient, production tasks have been growing, and market influence and popularity have continued to increase. It is expected that the overall operating situation will continue to be optimistic in the next few years. However, fixed investment in downstream industries still has certain volatility due to changes in the country's political and economic situation. If the fluctuations lead to a decline in demand in downstream industries, it will intensify market competition. If the company lacks its ability to resist market competition and fails to manage production and operation, it will face the risk of intensifying competition and declining market share, which will affect the sustained and stable growth of performance.
Countermeasures: On the one hand, the company adheres to market credibility, increases marketing development efforts, focuses on strengthening cooperation with large and high-quality customers, strives for marketing orders with high added value, pays attention to innovation and differentiated services, and increases market share. On the other hand, we will strengthen R&D investment in new products and new technologies, continuously accumulate the proprietary capabilities of advanced equipment technology, and optimize the product structure. We will focus on internal production control and process compliance capabilities, do a good job in controlling production progress and key nodes, steadily improve product quality, and strictly ensure delivery time; continuously improve efficient management and innovative services, and implement cost-reducing and efficiency-enhancing measures.
continues to deepen the existing advantageous areas of high-end core core of kerosene and gas chemical industry and super-large and over-limit equipment, increase the market expansion of new energy and new materials such as nuclear power, solar photovoltaic and wind power, actively explore and develop link devices such as hydrogen energy storage and transportation, and steadily promote specialized and specialized to promote high-quality development. Find new performance growth points in a timely manner, expand market channels in downstream industries, cultivate new momentum, build common development of related diversified industries, enhance profit resilience and weaken the possible impact of growth volatility, maintain competitive vitality, enhance risk resistance, and achieve everlasting performance.
(2) Tax policy change risk
Tax policy risk: The company currently has the option to enjoy the preferential policies for high-tech enterprises and the preferential policies for corporate income tax in Western Development .According to the provisions of the Ministry of Finance, General Administration of Customs, and the State Administration of Taxation on the Implementation of Tax Policies on the In-depth Implementation of the Western Development Strategy (Finance and Taxation [2011] No. 58), the National Development and Reform Commission's "Guidelines for Industrial Structure Adjustment (2019 This)" ( National Development and Reform Commission of the People's Republic of China, Order No. 49), the State Administration of Taxation's "Announcement on Implementing the Implementation of the
Countermeasures: The company will continue to strengthen the collection and analysis of national tax policies and tax regulations information, and within the scope of allowed selection of tax laws and regulations, choose to implement low-risk tax preferential policies, reduce the impact of changes in tax policies on the company's operating results, and lay the foundation for the long-term development of the company.
(3) Industry policy change risks
The company's main products pressure vessel equipment belong to special equipment produced by the state administrative license. According to relevant national administrative regulations, rules and normative documents, the state implements a qualification licensing system for the design and manufacturing of pressure vessels, and implements a mandatory supervision and inspection system for safety performance for related products. Although the company currently has all the design licenses and manufacturing licenses required for production and operation, if the state makes major adjustments to the relevant franchise policies, it may have a certain impact on the company's production and operation.
Response measures: The company's management will closely monitor national macro policies, pay attention to industry trends and market trends, and take positive measures to respond to related changes.
(4) Operating risks brought by macroeconomic fluctuations
Company mainly produces special products such as pressure vessels. The targets of such products are mainly oil refining, chemicals, nuclear power and other industries. As the basic industry of the national economy, these industries are closely related to the country's macroeconomic conditions, fixed asset investment, etc., and will be affected by the fluctuations in the macroeconomic cycle. If the country's macroeconomic growth slows down, it may directly lead to a decrease in new investment projects in the downstream industries served by the company, and the growth of corresponding supporting products market demand will decline, and the decline in downstream industries' prosperity will have an adverse impact on our company's operating performance.
Countermeasures: The company will closely monitor and analyze the development and changes of the industry under the domestic and international macroeconomic situation, actively adapt to changes in market demand, continue to increase the research and development of new products and new technologies, do a good job in product structure adjustment and transformation and upgrading, continue to forge the strengths of enterprises, continuously broaden new development boundaries, and prevent operating risks caused by macroeconomic fluctuations or policy changes.
(III) Internal control activities
1, the company's main control measures
The company's control measures generally include: incompatible position separation control, authorization approval control, accounting system control, property protection control, budget control, operation analysis control and performance evaluation control, etc.
(1) Incompatible positions separation control
In order to prevent and promptly discover errors and frauds caused by relevant positions in performing their duties, the company reasonably sets up division of labor, scientifically divides responsibilities and authority, implements the principle of separation of incompatible positions, and forms a mutual check and balance mechanism. For example, the separation of responsibilities of cash cashiers and accounting positions, the authorization and approval of various economic businesses such as contract conclusion and approval, procurement and acceptance are separated from the specific responsibilities of responsibilities of responsibilities of responsibilities, etc. It is strictly forbidden for the same person to handle the entire process of the same business matters, and strictly implement the separation mechanism of "money, account, and material" in charge.
(2) Authorization Approval Control
Company adopts different transaction authorizations according to the nature and amount of the transaction, and according to the provisions of the Articles of Association and various internal control systems. For routine business such as reimbursement and payment of expenses that are frequently incurred, the approval system of the heads of various functional departments, company leaders, and general managers is adopted, and internal control systems such as the "Regulations on Reimbursement and Payment of Expense Invoices", "Regulations on Reimbursement and Payment of Procurement Invoices", "Regulations on Reimbursement and Payment of Procurement Invoices", "Regulations on Reimbursement and Payment of Employees' Borrows", "Regulations on Travel Expenses' Reimbursement", "Regulations on Transfer of Permissions of Items and Services Procurement Business", and "Regulations on Transfer of Rights and Responsibilities of Fund Payment Business" are formulated to clearly stipulate.
For non-recurring business transactions, such as foreign investment, additional stock issuance, asset restructuring, transfer of equity, loans, guarantees, related transactions, etc., it formulates internal control systems such as "Foreign Investment Management System", "Related Transaction Decision-making System", and "Foreign Guarantee Management System". According to different transaction volumes, the company's general manager, board of directors, and shareholders' meeting will be approved by the company's general manager, board of directors, and shareholders' meeting. Independent directors express independent opinions on major matters. The company has established a scientific, rigorous and efficient authorization and approval control system.
(3) Accounting system control
The company has established an independent accounting institution to fully handle the company's financial accounting business under the leadership of the financial director. According to the financial accounting business needs, accounting job is set up, and financial accountants with relevant professional knowledge and professional skills are equipped. The job responsibility system and assessment system for financial accounting personnel are implemented to ensure the smooth progress of financial work. The company's financial accounting positions can play a role in restraining each other, and the functions of approval, execution and record are separated.
Company strictly implements the national unified " Enterprise Accounting Standards " and its supplementary provisions, establishes and improves the company's specific accounting policies, accounting estimation and financial management systems, and makes clear and specific provisions on the processing procedures of basic accounting work standards , accounting vouchers, accounting books, accounting reports, as well as fund management and control, physical management and control, etc. These accounting policies and financial accounting systems provide a strong guarantee for regulating company accounting, strengthening accounting supervision of , ensuring the authenticity and accuracy of financial accounting data, preventing errors and plugging loopholes.
(4) Property protection and control
The company has established a protection and control system for physical assets such as cash, inventory, fixed assets, intangible assets, and under construction projects, and has equipped it with necessary equipment and personnel, so that the safety and integrity of the assets are fundamentally guaranteed. Restrict unauthorized personnel from contact with property, and take measures such as regular inventory, property records, account verification, and property insurance to effectively ensure the safety and integrity of assets.
(5) Budget control
In order to strengthen internal control, prevent business risks, improve the company's management level and economic benefits, and achieve business goals, the company implements business budget management and clarify the work responsibilities, procedures and specific requirements of various departments and links such as budget preparation, approval, execution, analysis and assessment. The company formulates the operating budget and plan for the next year at the end of each year, and breaks down the annual budget goals into monthly implementation. The company's implementation of budget management is not only conducive to effectively organizing and coordinating the company's production and operation activities, completing established business goals and work plans, but also conducive to financial control and strengthening performance appraisal.
(6) Operation Analysis Control
In order to timely and accurately grasp the completion of various economic indicators of the company's daily operation activities and ensure the completion of the annual budget and work plan, the company has established an operation analysis mechanism at all levels and systems led by the management meeting.The company organizes general manager's office meetings from time to time to discuss and analyze the recent development and completion of various departments and work links, existing problems and rectification and improvement measures, and arranges work plans for the next stage; the Production Safety Department organizes safety meetings every quarter to discuss the company's safety, environmental protection, and occupational health matters; departments related to production and operation organize weekly project coordination meetings to discuss and coordinate problems that need to be solved in the production and operation process; each department arranges and deploys key tasks on the day's day's morning meeting.
(7) Performance evaluation control
In order to ensure the realization of the company's business goals and the smooth implementation of the company's internal control systems, the company has formulated corresponding performance evaluation methods for personnel at all levels. The company's performance appraisal measures implement the principles of "openness, fairness and justice" and fully reflect the incentive mechanism that links personal income to company performance and personal contribution.
The Board of Directors' Remuneration and Assessment Committee is in accordance with the provisions of the "Work Rules of the Remuneration and Assessment Committee", it is specifically responsible for the formulation of remuneration standards and plans for directors and senior management personnel; it is responsible for reviewing the performance of duties of the company's directors and senior management personnel and conducting annual assessments on them; it is responsible for supervising the implementation of the company's remuneration system.
The company formulated internal control systems for performance appraisal, such as "Salary Management System", "Internal Output Value and Performance Calculation (Appraisal Measures), "Market Department Functional Allocation and Performance Management Measures", "Employee Reward and Punishment Management System", "Job Skills Salary Management Measures", "Performance Salary Distribution Management Measures" and other performance appraisal internal control systems have comprehensively and systematically stipulated the specific performance appraisal methods for each department and position, which is conducive to fully mobilizing the work enthusiasm of all employees.
The formulation of the company's performance management system starts from the company's strategy and is assessed to each department and every employee based on annual business goals, which is conducive to inspiring all employees' enthusiasm for work and ensuring the realization of the company's development strategy.
2. The company's main control activities
(1) Management control of subsidiaries
In order to standardize the company's management control of branches and subsidiaries, standardize internal operating mechanisms, safeguard the interests of all investors, promote standardized operation and healthy development, the company has formulated the "Second (Subsidiary) Company Management System".
"Second (Subsidiary) Company Management System" makes clear provisions on the generation and responsibilities of the directors, supervisors and senior management of subsidiaries, operation and investment decision-making management, financial management, information disclosure affairs management and reporting system, archive management, etc.
In order to perform the duties of the investor and safeguard the rights and interests of the investor, the company has appointed directors, supervisors and financial personnel to its subsidiaries.
At the end of each year, the audit department of company conducts a special audit of all subsidiaries, reflecting the financial status, operating results, and internal control establishment and implementation of the subsidiaries.
(2) Internal control of related transactions
In order to ensure that the related transactions between the company and related parties comply with the principles of fairness, justice and openness, and to protect the legitimate rights and interests of the majority of investors, especially small and medium-sized investors, the company formulated the "Related Transaction Decision-making System" in accordance with the provisions of relevant laws and regulations and the company's articles of association, which defines related parties and related relationships, related transactions, and clarifies the decision-making procedures of related transactions and the information disclosure of related transactions.
Company is always concerned about changes in related parties and related relationships, pay attention to whether daily major transactions are related to related transactions, and it is strictly prohibited to use related transactions to directly or indirectly infringe on the interests of small and medium-sized investors.
At the end of each year, the audit department of conducts a special audit of related transactions, reflecting whether the approval procedures for related transactions that the company had in that year comply with the provisions of corporate governance and relevant regulations, and whether there were any violations of related transactions.
(3) Internal control of the use of raised funds
In order to standardize the management of raised funds, improve the efficiency of the use of raised funds, and effectively protect the legitimate rights and interests of shareholders, the company has formulated the "Regulations on the Management of Raised Funds" in accordance with the provisions of relevant laws and regulations and the company's articles of association, which has made clear provisions on the special storage of raised funds, the use of raised funds, the changes in the investment projects of raised funds, and the management and supervision of raised funds.
From January to June 2022, the company did not obtain new funds raised.
(4) Internal control of major investments
In order to establish a standardized, effective and scientific investment decision-making system and mechanism, standardize the company's foreign investment behavior, improve investment economic benefits, and realize the preservation and appreciation of the company's assets, according to relevant laws and regulations and the "Company Articles of Association", "Rules of Procedure for Shareholders' Meetings", "Rules of Procedure for Board of Directors" and other relevant regulations, the company has formulated the "Foreign Investment Management System", which clarifies the scope, principles of foreign investment, approval authority for foreign investment, daily management of foreign investment, information disclosure of foreign investment, and accountability.
(5) Internal control of information disclosure
In order to promote the standardized operation of the company, standardize information disclosure behavior, strengthen information disclosure affairs management, ensure the authenticity, accuracy, completeness, timeliness and fairness of information disclosure, and safeguard the legitimate rights and interests of the company and investors, the company has formulated the "Information Disclosure System" in accordance with relevant laws and regulations and the "Company Articles of Association" and other provisions, which clearly stipulates the applicable personnel of the information disclosure affairs management system, the basic principles of information disclosure, the content of information disclosure, the procedures for information disclosure, the management and responsibilities of information disclosure, confidentiality measures and other relevant matters that should be clarified.
At the same time, in order to further improve the company's standardized operation level, increase the accountability of the persons responsible for annual report information disclosure, improve the quality and transparency of annual report information disclosure, and enhance the authenticity, accuracy, completeness and timeliness of information disclosure, the company has formulated the "Annual Report Information Disclosure Major Errors in Annual Report Information Disclosure", which clarifies the responsible persons responsible for major errors in annual report information disclosure, the identification and handling procedures for major errors in annual report information disclosure, and the form and types of accountability for major errors in annual report information disclosure.
From January to June 2022, the board of directors strictly followed the provisions of the "Information Disclosure Management System", the "Annual Report Information Disclosure Major Errors Accountability System" and relevant laws and regulations, and treated all investors openly, fairly and impartially, and at the same time disclosed information to the public in a true, accurate, complete and timely manner, without false records, misleading statements or major omissions. The reporting, transmission, review, disclosure procedures for the company's major events from January to June 2022, as well as the preparation, review and disclosure procedures for regular reports, all comply with relevant regulations and the disclosure is complete and timely.
(6) Internal control of funding activities
The Company Articles of Association clearly stipulate that the board of directors can only decide on investment and financing matters within the scope authorized by the shareholders' meeting; the "General Manager's Work Rules" formulated by the company clearly stipulates that the general manager approves various expenses and expenses in the company's daily business management, and the relevant internal control system clearly stipulates the approval process and approval authority for pre-approval, in-process control and fund payment of daily funding activities.
In order to strengthen the control of major capital expenditures in the company's foreign investment and financing activities, the company has formulated the "Foreign Investment Management System" and the "Finance Management Measures", which clearly stipulate the scope of investment and financing activities, approval authority, risk control and management, information disclosure, and accountability, respectively.
The company authorizes the Finance Department to be responsible for the daily management of funding activities. The company has formulated a daily management system for cash, bank deposits and notes. In accordance with the requirements of separation, restraint and supervision of incompatible positions, independent cashier positions will be set up. The company's fund management complies with the requirements of the national "Interim Regulations on Cash Management", "Payment and Settlement Measures" and other relevant laws and regulations and the company's fund management system.
This year, The company's audit department audited the company's large-scale funds revenue, expenditure, storage status and expenses every quarter, ensuring the safety and compliance of the company's funds.
(7) Internal control of procurement business
The company authorizes the material supply department to be responsible for the company's material procurement business. Determine procurement needs based on marketing orders, technical and process design, production plans and inventory conditions, formulate procurement plans, and conduct purposeful procurement under the guidance of procurement plans to avoid repeated procurement and blind procurement.
Company's "Pressure Vessel Quality Assurance Manual" and "Project and Service Procurement Business Permissions" have clarified the responsibilities and authority of key control links such as material demand, procurement plan, inquiry and selection of suppliers, contract signing and review, quality inspection, and verification of revenue database. Strictly control the quality inspection of materials entering the warehouse, and process materials that do not meet the quality requirements in a timely manner according to the exchange or return process to prevent unqualified materials from occupying funds or causing losses; the Material Supply Department tracks, manages, assesses and evaluates the quality, price, delivery timeliness, supply conditions and credit status of the suppliers, and participates in the selection of qualified suppliers, continuously optimizes suppliers and supply networks, improves procurement quality, and reduces procurement costs; prevents and controls procurement risks, and safeguards the company's legitimate rights and interests.
The amount required for purchase is made in accordance with the terms of the contract. The purchaser fills out the payment application. After the Finance Department reviews the contract, invoice and other relevant documents and vouchers, it will be submitted to the Deputy General Manager and the Financial Director for approval, and strictly implements the payment procedures. The purchasing staff and the Finance Department regularly check with suppliers for accounts payable, prepaid accounts and other transactions to ensure the safety of procurement funds.
Finance Department has established a strict accounting control system for inventory procurement, supply and payment business. Through the accounting control system, information on all aspects of procurement business such as inventory procurement application, procurement contract, revenue inspection, return status, invoices, payment and other procurement business is timely recorded to ensure that the entire procurement business process is in an effective control state, and to ensure that the accounting records, procurement records and warehousing records are consistent.
(8) Internal control of asset management
In order to strengthen the company's asset management, the company has formulated asset management systems such as "Inventory Management System", "Fixed Asset Management System", "Asset Inventory System", and "Intangible Asset Management Measures".
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This year, The company's audit department audited the company's large-scale funds revenue, expenditure, storage status and expenses every quarter, ensuring the safety and compliance of the company's funds.
(7) Internal control of procurement business
The company authorizes the material supply department to be responsible for the company's material procurement business. Determine procurement needs based on marketing orders, technical and process design, production plans and inventory conditions, formulate procurement plans, and conduct purposeful procurement under the guidance of procurement plans to avoid repeated procurement and blind procurement.
Company's "Pressure Vessel Quality Assurance Manual" and "Project and Service Procurement Business Permissions" have clarified the responsibilities and authority of key control links such as material demand, procurement plan, inquiry and selection of suppliers, contract signing and review, quality inspection, and verification of revenue database. Strictly control the quality inspection of materials entering the warehouse, and process materials that do not meet the quality requirements in a timely manner according to the exchange or return process to prevent unqualified materials from occupying funds or causing losses; the Material Supply Department tracks, manages, assesses and evaluates the quality, price, delivery timeliness, supply conditions and credit status of the suppliers, and participates in the selection of qualified suppliers, continuously optimizes suppliers and supply networks, improves procurement quality, and reduces procurement costs; prevents and controls procurement risks, and safeguards the company's legitimate rights and interests.
The amount required for purchase is made in accordance with the terms of the contract. The purchaser fills out the payment application. After the Finance Department reviews the contract, invoice and other relevant documents and vouchers, it will be submitted to the Deputy General Manager and the Financial Director for approval, and strictly implements the payment procedures. The purchasing staff and the Finance Department regularly check with suppliers for accounts payable, prepaid accounts and other transactions to ensure the safety of procurement funds.
Finance Department has established a strict accounting control system for inventory procurement, supply and payment business. Through the accounting control system, information on all aspects of procurement business such as inventory procurement application, procurement contract, revenue inspection, return status, invoices, payment and other procurement business is timely recorded to ensure that the entire procurement business process is in an effective control state, and to ensure that the accounting records, procurement records and warehousing records are consistent.
(8) Internal control of asset management
In order to strengthen the company's asset management, the company has formulated asset management systems such as "Inventory Management System", "Fixed Asset Management System", "Asset Inventory System", and "Intangible Asset Management Measures".
Request the full version of the e-learning courseware and the compilation rules of related learning materials. Please send a private message to the note and leave your contact information. The editor replied as soon as possible after seeing it. Thank you very much.
Note: (Please send a private message to the note to the note to the contact information) (Please send a private message to the note to the contact information) (Please send a private message to the note to the contact information)
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