Aofu Environmental Technology Co.Ltd(688021)
Internal control evaluation report in 2021
Aofu Environmental Technology Co.Ltd(688021) 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 company's (hereinafter referred to as the company's) internal control system and evaluation methods, 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). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
According to the identification of major defects in the company's internal control over financial reporting, there are no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has 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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
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.
5. Whether the internal control audit opinion is consistent with the company's evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company's internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include: Aofu Environmental Technology Co.Ltd(688021) and its subsidiaries and subsidiaries. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
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
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company's consolidated financial statements
3. The main operations and matters included in the scope of evaluation include:
Organizational structure, development strategy, human resources, social responsibility and corporate culture;
Business process level: capital activities, procurement business, asset management, sales business, engineering projects, financial reports, budget management, contract management, information system, internal supervision, etc. 4. High risk areas of focus mainly include:
Sales business, procurement business, capital activities, asset management, contract management, etc. 5. 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. Is there any major omission □ yes √ No 6 Is there a statutory exemption
□ yes √ No 7 Other explanatory matters
None (II) Basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and other internal control supervision requirements, combined with the internal control system and internal control manual. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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 internal control over financial reports from internal control over non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company, And consistent with previous years.
2. 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
The net profit exceeds 10% of the net profit, exceeds 5% of the net profit, but less than 10% is less than 5% of the net profit
Total assets exceed 1% of total assets, exceed 0.5% of total assets, but less than 1% is less than 0.5% of total assets
explain:
The quantitative standard takes the net profit and total assets as the measurement indicators.
The losses that may be caused or caused by internal control defects are related to the income statement, which shall be measured by the net profit index. If the amount of misstatement in the financial report caused by the defect alone or in combination with other defects is less than 5% of the net profit, it is recognized as a general defect; If it exceeds 5% but less than 10% of the net profit, it is an important defect; If it exceeds 10% of the net profit, it is recognized as a major defect.
Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 0.5% of the total assets, it is recognized as a general defect; If it exceeds 0.5% but less than 1% of the total assets, it is recognized as an important defect; If it exceeds 1% of the total assets, it is recognized as a major defect.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects may seriously affect the effectiveness of the overall internal control, resulting in the failure of the enterprise to prevent or find serious deviations from the overall control in time
The situation of the object control
The severity of important defects is lower than that of major defects, but the enterprise cannot prevent or find serious deviation from the overall control goal in time
The severity is still significant and needs the attention of the management
General defects description of other defects except important defects and major defects: signs of major defects in financial reports include: (1) fraud of directors, supervisors and senior managers of the company; (2) The company corrects the published financial report; (3) Material misstatement in the current financial report found by the certified public accountant but not identified by the company's internal control; (4) The supervision of the audit committee and the audit department on the company's external financial report and internal control of financial report is invalid; Signs of significant deficiencies in financial reporting include: (1) failure to select and apply accounting policies in accordance with generally accepted accounting standards; (2) Failure to establish anti fraud procedures and control measures; (3) No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control; (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 true and complete goal.
General defects refer to other control defects other than the above major defects and important defects. 3. 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Direct property loss amount ≥ 10 million yuan, 1 million yuan ≤ loss amount < 100000 yuan ≤ loss amount < 1 million yuan, 10 million yuan
Description: None
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects 1. Major mistakes caused by decision-making procedures;
2. Lack of institutional control or systematic failure of important business, and lack of effective compensatory control;
3. Serious loss of middle and senior managers and senior technicians;
4. The results of internal control evaluation, especially the important defects, have not been rectified;
5. Other situations that have a significant negative impact on the company.
1. General mistakes in decision-making procedures;
2. Defects in important business systems or systems;
3. Serious loss of business personnel in key positions;
4. The results of internal control evaluation, especially the important defects, have not been rectified;
5. Other situations that have a great negative impact on the company.
General defects 1. The efficiency of decision-making procedure is not high;
2. Defects in general business system or system;
3. Serious loss of business personnel in general posts;
4. General defects have not been rectified.
Note: none (III) Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
According to the above identification standards of internal control defects in financial reports, the company has no general defects in internal control over financial reports during the reporting period. 1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified □ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company has any important defects in the internal control of financial reporting that have not been rectified □ yes √ No 2 Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.2 Important defects
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period
2.3. General defect
According to the above identification standards of internal control defects in non-financial reporting, the company did not have general defects in internal control of non-financial reporting during the reporting period. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in the non-financial reporting internal control that have not been rectified □ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company finds any important defects in non-financial reporting internal control that have not been rectified □ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year □ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
□ applicable √ not applicable 3 Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Pan Jiqing Aofu Environmental Technology Co.Ltd(688021) February 24, 2022
