Management of fixed assets

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Purpose of fixed asset management: To specify the responsibilities, scope, and classification of fixed asset management within the company, as well as procedures for inventorying and verifying fixed assets, adding them to records, handling transfers, dealing with assets that are not in use, addressing asset depreciation, and managing the maintenance, decommissioning, reactivation, and leasing (loaning) of fixed assets. Scope: Applicable to the management of fixed assets within the company. Responsibilities: Finance Department: Responsible for establishing and improving fixed asset management systems and implementing them ； Participate in investment decisions regarding fixed assets. Equipment Security Department: Responsible for the organization and implementation of fixed assets such as machines and equipment used in production and auxiliary production (testing, experimentation, etc.), power equipment, tools and instruments, as well as transportation and handling equipment; for establishing and maintaining equipment registers, assigning numbers to fixed assets, approving their transfer, reviewing procedures for scrapping them, and conducting regular inventory checks of these devices ； Responsible for the unified management of the company’s idle assets. Administration Department: Responsible for the daily management of assets such as buildings, structures, non-production equipment, and vehicles ； Responsible for the approval of equipment purchases in offices and dormitories, as well as internal transfers of such equipment ； Responsible for the maintenance, disposal, and demolition management of relevant public facilities ； Do a good job in establishing and improving the ledger system. Purchasing Department: Responsible for the receipt, issuance, and storage of equipment intended for use as fixed assets. Department in use: Responsible for the daily maintenance of assets and equipment ； Assist the asset management department in ensuring consistency between records and physical assets ； Keep the equipment in good condition, with complete and clean asset numbers. Content: 1. Fixed Assets Management Department: The Equipment Safety Department is responsible for managing the fixed assets used for production and auxiliary production across the company, while the Administrative Department is in charge of the daily management of the company’s buildings, structures, non-production equipment, vehicles, and other assets ； 2. Fixed asset ledger management: The asset manager should establish a unified ledger for fixed assets and equipment, and promptly update the \"Equipment Ledger of Shanghai Qixiang Qingchen New Materials Technology Co., Ltd.\" and the \"Workshop Equipment Ledger of Shanghai Qixiang Qingchen New Materials Technology Co., Ltd.\" ； 3. Scope of fixed assets: Refers to houses, buildings, machines, mechanical equipment, means of transportation with a useful life of more than one year, as well as other equipment and instruments related to production and operation that are of high value (equipment used in production and auxiliary production is defined as those with a unit value of 2,000 yuan or more). Items that are not part of the main equipment used in production and operations are also included, as long as their unit value is 2,000 yuan or more and their useful life is less than 2 years. 4. Classification of fixed assets 4.1 Fixed assets for production and operation: Various fixed assets that are directly involved in or used to support the production and operation processes, such as buildings, structures, machines, specialized equipment, transportation vehicles, as well as quality inspection and measurement instruments. 4.2 Fixed assets not used for production or operations: office equipment, transportation vehicles, staff dormitories, canteens, bathrooms, etc. 4.3 Leased or borrowed fixed assets: Assets whose ownership belongs to the company, but which are made available for use by others under certain arrangements or agreements. 4.4 Unused fixed assets: New fixed assets that have not yet been put into use, as well as those that are temporarily taken out of production and operational activities. This includes fixed assets that have been purchased and constructed but not yet put into use, those that have been transferred for installation, fixed assets that are under renovation or expansion, and those that are suspended from use for other reasons. 4.5 Fixed assets that are not required: Fixed assets that are excess or not suitable for the enterprise’s production, operations, or other needs, and are waiting to be disposed of; these are also known as idle fixed assets. 5. Procedures for registration and accounting must be followed for the acquisition, use, internal transfer, disposal, transfer, sale, lease, mortgage, donation, discovery of surplus assets, and loss of fixed assets of the company. 6. Determination of the original value of fixed assets and their depreciation period: In accordance with relevant accounting regulations ； The depreciation periods for the company’s fixed assets are as follows: general equipment – 5 years; specialized chemical processing equipment – 7 years; boiler equipment – 15 years; transportation vehicles – 7 years; buildings used for production (highly corrosive environments) as well as simple or temporary structures – 10 years; buildings used for production (non-highly corrosive environments), non-production buildings, roads, fences, and landscaping projects – 35 years. 7. Asset coding regulations: The company uses a unified coding system for managing its assets. Once fixed assets are acquired, they come under the responsibility of the department in charge of fixed assets management, which, together with the finance department, assigns them codes based on their categories and accounting relationships. 7.1 The encoding uses a four-level decimal system, with the standard format being: file:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps15B.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps15C.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps15D.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps15E.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps15F.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps160.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps161.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps162.tmp.png××—××—××—×××× 3F – 11 - 08 - 0001file:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps163.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps164.tmp.png Serial number: The first onefile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps165.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps166.tmp.png Month: Augustfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps167.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps168.tmp.png Year: 2011file:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps169.tmp.pngfile:///C:\DOCUME~1\ADMINI~1\LOCALS~1\Temp\ksohtml\wps16A.tmp.png Category: Reactor type; for example, the first reactor in August 2011 is 3F-11-08-0001. Level 1 represents the asset category; the first digit indicates the major category. For instance, “0” refers to construction categories, which are further divided into “0Z” for masonry structures, “0K” for frame structures, and “0Q” for other categories ； “1” refers to transportation vehicles, which are further divided into: “1A” for passenger cars, and “1C” for forklifts ； ““2” refers to general-purpose equipment, with the following specific classifications: 2C – cabinets; 2D – stools; 2H – telephones; 2L – household heating and cooling equipment; 2N – computers; 2S – beds; 2T – metal cabinets; 2X – audio and video equipment; 2Z – tables; 2Q – other categories. “3” refers to specialized equipment, with the following specific classifications: 3A – conventional instruments; 3B – boilers; 3C – storage tanks; 3D – electric motors; 3F – kettles; 3H – heat exchangers; 3G – drying equipment; 3K – power distribution panels; 3L – refrigerators; 3M – computer-controlled equipment; 3N – transformers; 3P – pumps; 3S – reducers; 3T – towers; 3U – purification equipment; 3V – fans; 3X – cable and lighting facilities; 3Y – compressors; 3Z – tools; 3Q – other categories. 7.3 The second digit represents the year in which the equipment was acquired or used, such as “03”, “04”, “05”, etc. 7.4 The third level is the day of the month, such as “1”, “2”, “3”, “4”, “5”, “6”, “7”, “8”, “9”, “10”, “11”, “12”. 7.5 The fourth level is denoted by the serial number ××××, ranging from 0001 to 9999; the serial numbers are assigned sequentially according to the subcategory. 8. The identification numbers for the equipment used in workshop production are assigned by the workshop itself and then sprayed on the equipment. Finally, the workshop supervisor submits a copy of the \"numbering record\" to the equipment manager in the Equipment Safety Department; the equipment manager then matches the \"workshop equipment identification numbers\" with the workshop’s fixed asset numbers. 9. Equipment unboxing inspection and registration: When new equipment arrives at the factory, it must be unboxed and inspected jointly by the equipment manager, the warehouse manager, and the supply staff. Only after passing the inspection can it be stored in the warehouse. The details are recorded in an equipment unboxing inspection form, including: equipment name, manufacturer’s name, specifications and model, date of manufacture, date of unboxing, installation location, quantity, original value, fixed asset number, auxiliary equipment and accompanying technical documents, as well as the appearance quality. 10. At the end of each year (starting in November), the equipment management department organizes staff from the production department together with accountants to verify the fixed assets in use, as well as the idle and scrapped equipment, to ensure that the records match the actual assets. 11. Transfer and removal of equipment: In line with the actual conditions of our company, unified management of equipment is implemented. For the transfer or removal of equipment within various workshops, procedures must be followed at the equipment management department. The equipment management department fills out the \"Fixed Asset Transfer Form\", obtains approval from the supervisor of the department from which the equipment is transferred, gets permission from the equipment management authority, the department giving up the equipment cancels it from its records, the department receiving the equipment records it, and then the finance department handles the transfer of funds. And promptly notify the production workshop in charge of the transfer and removal; no department shall transfer or remove it without authorization. 12. Disposal, transfer, and sale of equipment. 12.1 When fixed asset equipment is to be scrapped, the manager in charge of equipment safety shall first organize equipment technical managers and managers from the departments using such equipment to conduct a technical assessment of the equipment in question. If it meets the criteria for scrapping, the department using the equipment shall fill out the \"Application Form for Scrapping and Transfer of Fixed Assets\", after which relevant supervisors at all levels shall sign their approvals. 12.2 After the equipment is written off, relevant departments such as the Finance Department and the Equipment Safety Department should promptly carry out account cancellation procedures to ensure that the accounts match the actual assets. 12.3 Equipment that has been scrapped should be removed from the production area, and the Equipment Safety Department shall handle it in accordance with relevant regulations and requirements; no individual or entity is allowed to dispose of it without authorization. 12.4 Equipment that meets one of the following conditions shall be scrapped. 12.4.1 Old equipment that has exceeded its specified service life, whose main structure and components are severely worn out, whose performance does not meet the minimum requirements of the process, and which cannot be repaired or is not worth repairing ； 12.4.2 Equipment that has been severely damaged as a result of natural disasters or major accidents and cannot be repaired by the user ； 12.4.3 Those that pose a serious threat to environmental protection and safety; continued use will lead to environmental pollution, as well as safety incidents and health hazards, and repair or modification is not cost-effective ； 12.4.4 Specialized equipment that is phased out due to product model changes or process modifications should not be modified for use by others ； 12.4.5 Old equipment resulting from technical upgrades and replacements that cannot be utilized or transferred out ； 12.4.6 Models that are obsolete and for which there are no available spare parts ； 12.4.7 Equipment with high energy consumption that should be phased out in accordance with **energy policy regulations. 12.5 The leasing of fixed assets is initiated by the unit that wishes to rent them; the equipment manager handles the necessary procedures, and leasing is only permitted after approval from the manager of the equipment safety department. After leasing, the finance department is responsible for collecting rent from the renting unit on a regular basis. 12.6 For the sale of fixed assets, the equipment administrator is responsible for calculating the depreciation of the assets and handling the sales procedures; the sale can only take place upon approval by the manager of the Equipment Safety Department. And the fixed assets and records are canceled by the Finance Department. 12.7 The transfer, sale, and borrowing of equipment are specifically handled by the Equipment Security Department. 13. Management of special equipment: 13.1 Pressure vessels, lifting machinery, and industrial vehicles are special types of equipment with potential hazards that are widely used in production and daily life. In the event of an accident, they can cause significant losses to **, enterprises, and the lives and property of employees; they can also disrupt the normal production processes of enterprises and have various negative consequences. It is of utmost importance to do a good job in the management of special equipment. 13.2 Enterprises must strictly implement various regulations and rules regarding special equipment issued by the Technical Supervision Bureau, such as the \"Regulations on the Safety Inspection of Boilers and Pressure Vessels\" and the \"Rules for the Registration and Management of Pressure Vessel Use\". 13.3 The equipment safety manager is responsible for the technical management of the safety of special equipment, must ensure the funding necessary for regular inspections and repairs of such equipment, and shall establish specialized departments or assign full-time technical personnel based on the number of special equipment units and the requirements regarding their safety performance. These personnel shall carry out their duties in accordance with relevant regulations, thereby strengthening the technical and operational management of special equipment. 13.4 Before being put into use, new special equipment must be registered with the local technical supervision bureau; only after obtaining a usage license can it be put into operation. 13.5 When using special equipment, regular inspections must be carried out in accordance with relevant regulations, and the appropriate procedures must be followed at the special equipment supervision agency of the local technical supervision bureau. 13.6 Special equipment that has reached or is about to reach its inspection period and is planned to be out of use for an extended period should go to the special equipment supervision agency of the local technical supervision bureau to complete the procedures for discontinuing its use. If it is to be reactivated, inspections must be carried out in advance and the necessary procedures followed. 13.7 It is necessary to establish and improve various safety regulations and systems, strictly enforce operating procedures, and prevent any illegal operations or work by unqualified personnel. 13.8 Special equipment shall not have its operating conditions altered arbitrarily; if any changes are necessary, the relevant procedures must be followed to ensure the safe operation of the equipment. 13.9 The repair and technical renovation of special equipment shall be carried out by the manager in charge of equipment safety, who shall organize relevant technical personnel to develop feasible plans. If necessary, approval documents for design modifications from the original design unit must be obtained, and the work shall be implemented in accordance with relevant regulations to ensure that the structure and strength of the equipment meet the requirements for safe use. After passing the inspection, go to the special equipment supervision agency of the local technical supervision bureau to complete the change procedures. 13.10 Safety accessories of pressure vessels, such as safety valves and pressure gauges, must be regularly inspected and calibrated, and all parameters of the calibration must meet the specified standards. 13.11 Scrapped pressure vessels are prohibited from being used as pressure-bearing equipment either on or off the premises. 13.12 In accordance with relevant regulations, it is necessary to establish and maintain technical records for special equipment, prepare the \"Special Equipment Register of Shanghai Qixiang Qingchen New Materials Technology Co., Ltd.\" and the \"Annual Inspection Plan for Special Equipment,\" and keep these records until the equipment is scrapped. 13.13 The full-time technical management personnel in charge of equipment safety are responsible for submitting to the higher-level competent authorities statistical reports on the number of special equipment and any changes in that number during the year, as well as information on regular inspection plans and their implementation. 14. Maintenance, shutdown, and sealing/unsealing of equipment. The maintenance of equipment is based on the principle of \"prevention first, with equal emphasis on regular maintenance and planned repairs.\" If the department using the equipment finds that it can no longer ensure normal operation, it shall submit a request for major repairs to the Equipment Maintenance Department. If the Equipment Maintenance Department determines that major repairs are indeed necessary, the production will be halted for such repairs. Based on the actual production conditions, any shutdown of equipment must be approved by the Equipment Safety Department. During the period of shutdown, a designated person is responsible for its maintenance. If the equipment remains shut down for more than three months, it must be sealed up; such sealed equipment can only be reactivated with the approval of the Equipment Department.