Important Statement
According to the regulations of the enterprise internal control standard system, establishing, improving, and effectively implementing internal controls, evaluating their effectiveness, and truthfully disclosing the internal control assessment report is the responsibility of the company's board of directors. The audit committee supervises the establishment and implementation of internal controls by the board. The management is responsible for organizing and leading the daily operation of internal controls. The board of directors and all directors and senior management ensure that the content of this report does not contain any false records, misleading statements, or significant omissions, and bear individual and joint legal responsibility for the authenticity, accuracy, and completeness of the report's content. The goal of the company's internal control is to reasonably ensure that business management is legal and compliant, assets are secure, financial reports and related information are true and complete, improve operational efficiency and effectiveness, and promote the company to achieve its development strategy. Due to the inherent limitations of internal controls, they can only provide reasonable assurance for achieving the above goals. Additionally, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, making it risky to infer the future effectiveness of internal controls based on assessment results.
Internal Control Assessment Conclusion
Based on the identification of significant defects in financial reporting internal controls, as of the internal control assessment report benchmark date, the company has no significant defects in financial reporting internal controls. The board believes that the company has maintained effective financial reporting internal controls in all material aspects in accordance with the requirements of the enterprise internal control standard system and related regulations. Based on the identification of significant defects in non-financial reporting internal controls, as of the internal control assessment report benchmark date, the company has not found any significant defects in non-financial reporting internal controls. No factors have occurred between the internal control assessment report benchmark date and the issuance date of the internal control assessment report that substantively affect the conclusion of the internal control effectiveness assessment.
Internal Control Assessment Work Situation
(1) Scope of Internal Control Assessment
The company determines the main units, businesses, and matters included in the assessment scope based on a risk-oriented principle, as well as high-risk areas.
- Main Units Included in the Assessment Scope The main units included in the assessment scope are LiaoNing Xinde New Materials Technology (Group) Co., Ltd. and its subsidiaries. The total assets of the included units account for 100% of the total assets in the consolidated financial statements, and the total operating income accounts for 100% of the total operating income in the consolidated financial statements.
- Main Businesses and Matters Included in the Assessment Scope The main businesses and matters included in the assessment scope are governance structure, organizational structure, development strategy, human resources, social responsibility, corporate culture, risk assessment, fund management, procurement and payment, asset management, sales and collection, external investment, related party transactions, guarantee business, comprehensive budgeting, contract management, engineering projects, information and communication, internal audit and supervision, information disclosure, etc.