Securities code: 002014 securities abbreviation: Huangshan Novel Co.Ltd(002014)
Huangshan Novel Co.Ltd(002014)
Internal control evaluation report in 2021
Huangshan Novel Co.Ltd(002014) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the “enterprise internal control standard system”), combined with the internal control system and evaluation methods of Huangshan Novel Co.Ltd(002014) (hereinafter referred to as the “company”), on the basis of daily and special supervision of internal control, We evaluated the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of the internal control evaluation report).
1、 Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise’s internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results.
2、 Internal control evaluation conclusion
According to the identification of major defects in the company’s internal control over financial reporting, there were no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of directors considered that the company had maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise’s internal control standard system and relevant regulations during the reporting period.
According to the identification of major defects in the company’s internal control over non-financial reports, the company found no major defects in the company’s internal control over non-financial reports on the benchmark date of the internal control evaluation report.
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the base date of the internal control evaluation report to the date of issuance of the internal control evaluation report.
3、 Internal control evaluation procedures and methods
The company’s internal control evaluation strictly follows the basic norms of internal control, relevant supporting guidelines and the management requirements of the company’s internal control evaluation; In the self-assessment work, the effectiveness of the company’s internal control is evaluated by comprehensively using appropriate methods such as individual interview, questionnaire survey, walk through test and sampling inspection. In the process of internal control evaluation, according to the requirements of risk evaluation of basic norms of internal control, the risks of key control points of the company are sorted out, and improvement measures are put forward and standardized in combination with the actual situation. The main aspects of the evaluation work include: 1. Carry out risk assessment: issue the risk assessment form to the middle-level and above managers of the company, collect the possible risks of the company at this stage, analyze and sort out the risks, and then identify the risks of the company, so as to establish the basis for the optimization of the company’s internal control system and self-evaluation.
2. Carry out necessary investigations and interviews, understand the current control status of various business processes according to the operation and management status of the company, focus on whether there are new or change points, and earnestly implement various internal control management requirements of the company.
3. Carry out internal control test, take a certain sample size according to the frequency of key control activities, verify the implementation of control, and test the effectiveness of internal control design and operation.
4. Make a comprehensive analysis of the test results, improve the weak links of internal control, and improve the efficiency and effect of internal control through effectiveness test.
4、 Internal control evaluation
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. Those included in the evaluation scope include Guangzhou Yongxin Packaging Co., Ltd., Hebei Yongxin Packaging Co., Ltd., Shaanxi Yongxin Packaging Co., Ltd., Huangshan Novel Co.Ltd(002014) (Huangshan) packaging Co., Ltd., Huangshan Yongxin New Material Co., Ltd. and Huangshan Xinli Ink Technology Co., Ltd. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company’s consolidated financial statements.
According to the principle of risk orientation, after fully evaluating the company’s strategic risk, financial risk, market risk, operational risk and legal risk, the company determines the main businesses and matters included in the evaluation scope, including development strategy, organizational structure, human resources, social responsibility, corporate culture, capital operation, investment, financing, procurement, sales, inventory Fixed assets, intangible assets, engineering projects, R & D, guarantee, outsourcing processing, financial report, comprehensive budget, contract management, external financial assistance, related party transactions, emergencies, internal information transmission, internal information system and information disclosure of the company;
The high-risk areas that the company focuses on include: market risk, exchange rate risk, environmental risk, monetary fund management, contract management, internal control of sales and collection, internal control of production and storage, internal control of procurement and payment, internal control of investment and wealth management, related party transactions and external guarantees, and internal control of financial reporting.
The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation in accordance with the requirements of relevant laws and regulations such as the enterprise internal control standard system and the provisions of the company’s internal control management manual and internal control evaluation management system. According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished the internal control of financial reports from the internal control of non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company.
The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Category major defect important defect general defect
Operating revenue 0.5% of total operating revenue ≤ 0.2% of total operating revenue ≤ misstatement ＜ potential misstatement ＜ 0.2% of total operating revenue
Total profit 5% of total profit ≤ 2% of total misstatement profit ≤ misstatement ＜ 2% of total profit ＜ 5% of total potential misstatement
Total assets 0.5% of total assets ≤ 0.2% of total assets misstated ≤ misstatement ＜ assets misstatement ＜ 0.5% of total assets potentially misstated 0.2%
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defect: a defect in internal control, alone or in combination with other defects, has a reasonable possibility, which makes it impossible to prevent, detect and correct major misstatement in the financial report in time.
For example:
(1) Fraud by directors, supervisors and senior managers;
(2) The external audit found that there was a material misstatement in the current financial report, but the misstatement was not found during the operation of the company’s internal control;
(3) There are significant accounting errors in the announced financial report;
(4) The supervision of the audit committee and internal audit institutions on internal control is invalid;
(5) Other defects that may affect the correct judgment of report users.
Important defects: internal control defects, alone or together with other defects, have a reasonable possibility to prevent, find and correct the misstatement in the financial report that should be paid attention to by the board of directors and management although it does not reach or exceed the importance level. For example:
(1) Failure to select and apply accounting policies in accordance with GAAP;
(2) No corresponding control measures have been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control;
(3) No anti fraud procedures and control measures have been established.
(4) There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.
General defects: internal control defects that do not constitute major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Defect identification level direct property loss amount
Major defects more than 10 million yuan
Major defects: RMB 2 million to RMB 10 million (including RMB 10 million)
General defects less than 2 million yuan (including 2 million yuan)
Qualitative criteria for evaluation of internal control defects in non-financial reporting determined by the company:
Under the following circumstances, it can be recognized as major defects, and under other circumstances, important defects and general defects can be determined respectively according to the degree of influence.
(1) The company’s major decision-making procedures are unscientific;
(2) Major safety production, environmental protection, product quality or service accidents;
(3) Serious violation of national laws and regulations and administrative punishment by national government departments or public condemnation by stock exchanges;
(4) Serious loss of middle and senior managers or technicians of the company;
(5) Major or important defects in internal control evaluation have not been rectified;
(6) Lack of institutional control or systematic failure of important business, resulting in heavy losses.
(III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reporting, the company has no major defects or important defects in internal control of financial reporting during the reporting period.
2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reports, no major defects or important defects in the company’s internal control over non-financial reports were found during the reporting period.
5、 Description of other major matters related to internal control
nothing
Huangshan Novel Co.Ltd(002014)
Chairman: Sun Yi
February 24, 2002
