Internal control assurance report Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) Rongcheng zhuanzi [2022] No. 230z0359 Rongcheng Certified Public Accountants (special general partnership)
Beijing, China
Internal control assurance report
Rongcheng zhuanzi [2022] No. 230z0359 Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) all shareholders:
We have verified the attached evaluation report on the effectiveness of internal control related to the financial report prepared by the board of directors of Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) (hereinafter referred to as Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) ) on December 31, 2021. 1、 Restrictions on the users and purposes of the report
This assurance report is only used for the purpose of disclosure of Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) annual report and shall not be used for any other purpose. We agree to take this assurance report as a necessary document for Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) annual report, submit it together with other documents and disclose it to the public.
2、 Responsibility of enterprises for internal control
It is the responsibility of Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) board of directors to establish, improve and effectively implement internal control and evaluate its effectiveness in accordance with the requirements of the basic norms of enterprise internal control and relevant regulations issued by the Ministry of finance.
3、 Responsibilities of Certified Public Accountants
Our responsibility is to independently put forward assurance conclusions on the effectiveness of Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) financial reporting internal control based on the implementation of assurance work.
We have carried out the assurance business in accordance with the provisions of other assurance business standards for Chinese certified public accountants No. 3101 - assurance business other than audit or review of historical financial information. The standard requires us to plan and implement assurance work to obtain reasonable assurance about whether the enterprise has maintained effective internal control related to financial reporting in all material aspects. In the process of assurance, we have implemented, including the understanding of internal control related to financial reporting, assessing the risks of major defects, testing and evaluating the effectiveness of internal control design and operation according to the assessed risks, and other procedures we deem necessary. We believe that our assurance work provides a reasonable basis for expressing opinions.
4、 Inherent limitations of internal control
There is an inherent possibility of error detection and control. In addition, as changes in the situation 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 assurance results.
5、 Assurance conclusion
We believe that Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) has maintained effective internal control over financial reporting in all major aspects in accordance with the basic norms of enterprise internal control and relevant regulations on December 31, 2021. (this page is the signature and seal page of Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) Rongcheng zhuanzi [2022] No. 230z0359.)
Rongcheng certified public accountants China Certified Public Accountants:
(special general partnership) Guo Kai
Chinese certified public accountant:
Huo Jinfeng
Beijing, China Certified Public Accountant:
Wang mingcan
February 28, 2022
Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692)
Self evaluation report on internal control in 2021
Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) 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 Anhui Zhonghuan Environmental Protection Technology Co.Ltd(300692) (hereinafter referred to as the company) internal control system and evaluation methods, on the basis of daily supervision 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 internal control of the company's financial report, there are no major defects in the internal control of financial report on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control of financial report in all major aspects in accordance with the requirements of the enterprise's internal control standard system and relevant regulations.
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
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main units, main businesses and matters and high-risk areas included in the evaluation scope.
1. The main units included in the scope of evaluation include:
The total assets of the company and its wholly-owned subsidiaries and holding subsidiaries included in the evaluation scope account for 100% of the total assets in the company's consolidated financial statements, and the total operating income accounts for 100% of the operating income in the company's consolidated financial statements.
2. The main operations and matters included in the scope of evaluation include:
Corporate governance structure, organizational structure, development strategy, social responsibility and corporate culture; Sales business, procurement business, engineering projects, contract management, fund management, subsidiary management, related party transactions, external guarantee, external investment, asset management, information disclosure, etc.
3. The high-risk areas of focus mainly include:
Capital, procurement, assets, sales, engineering, contract, guarantee, investment and subsidiary management.
4. The above 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.
（2） 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 enterprise internal control standard system, the basic norms of enterprise internal control (CK [2008] No. 7), the notice on printing and distributing supporting guidelines for enterprise internal control (CK [2010] No. 11) and other relevant laws, regulations and rules.
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. The identification standards of internal control defects determined by the company are as follows: 1. Identification standards of internal control defects in financial reports
The identification standard of internal control defects in financial reports is determined by the importance of the defects that may lead to the misstatement of financial statements. This importance mainly depends on two factors: first, whether the defects have a reasonable possibility that the internal control cannot prevent, detect and correct the misstatement of financial statements in time; Second, the amount of potential misstatement that may be caused by the defect alone or in combination with other defects.
(1) The quantitative criteria for the evaluation of internal control defects in financial reports are as follows: when the existence of one or a group of internal control defects has a reasonable possibility to prevent or find any misstatement greater than or equal to 3% of the total assets in the company's consolidated accounting statements or 5% of the total pre tax profit in the financial reports, it is recognized as a major defect; When the existence of one or a group of internal control defects has a reasonable possibility that it is impossible to timely prevent or find that the financial report is less than 3% of the total assets in the consolidated financial statements or 5% of the total profit before tax, but greater than or equal to 0.5% of the total assets in the consolidated financial statements or 1% of the total profit before tax, it is recognized as an important defect; Defects other than major defects and important defects are regarded as general defects.
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting are as follows:
Recognition criteria for major defects: ① the financial statements of the enterprise have been or are likely to be given negative opinions or refused opinions by certified public accountants; ② The directors, supervisors and senior managers of the enterprise have been or are suspected of fraud, or the employees of the enterprise have colluded in fraud and caused important losses and adverse effects to the enterprise; ③ The audit committee and the audit department failed to effectively perform the supervision function of the company; ④ There are significant misstatements in the current financial statements, and the internal control fails to find such misstatements in the operation process.
Identification criteria for major defects: 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 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.
Identification standard of general defects: refers to other control defects other than the above major defects and important defects. 2. Identification standard of internal control defects in non-financial reporting
The identification of internal control defects in non-financial reporting is mainly based on the impact of defects on the effectiveness of business processes and the possibility of occurrence.
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows: when the existence of one or a group of internal control defects has a reasonable possibility to cause the direct property loss of the company to be greater than or equal to 3% of the total pre tax profit, it is recognized as a major defect; Defects that may cause the direct property loss of the company to be less than 3% but greater than or equal to 0.5% of the total pre tax profit are recognized as major defects; Defects that may cause the direct property loss of the company to be less than 0.5% of the total profit before tax are recognized as general defects.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows: if the possibility of defects is high, it will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal, it will be recognized as a major defect; If the possibility of defect occurrence is high, which will significantly reduce the work efficiency or effect, or significantly increase the uncertainty of the effect, or make it seriously deviate from the expected goal, it is recognized as a major defect; If the possibility of defects is small, it will reduce the work efficiency or effect, or increase the uncertainty of the effect, or make it deviate from the expected goal, which is a general defect.
(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 and 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 and important defects in the company's internal control over non-financial reports were found during the reporting period.
4、 Internal control construction of the company
(I) internal control environment
1. Corporate governance and organizational structure
In accordance with the requirements of establishing a modern enterprise system, the company has established the general meeting of shareholders, the board of directors, the board of supervisors and the management under the leadership of the board of directors in accordance with the company law, the securities law and other relevant laws and regulations, and operated effectively in accordance with their respective responsibilities. The articles of association and relevant internal regulations of the company specify the institutional arrangement of organization setting, responsibilities and authorities, staffing, working procedures and relevant requirements at all levels.
According to its own characteristics and the needs of future development, the company establishes and improves the organizational structure, defines the responsibilities and authorities in decision-making, implementation and supervision, forms a scientific and effective division of responsibilities and check and balance mechanism, and effectively prevents and resolves various risks in the process of operation. The general manager of the company consists of investment and financing department, securities affairs department, science and technology and strategic development department, market operation center, technology center, Design Institute, construction management center, water operation center, solid waste treatment division, planning and finance department, cost control department, administrative personnel department, bidding and procurement Department, audit department and other functional departments, At the same time, it has a number of sewage treatment plants and waste incineration power plants. Each department and company has clear responsibilities and mutual restraint. The company adopts the vertical management method for its subsidiaries, that is, the parent company carries out centralized and unified management on the production and operation plan, fund scheduling, personnel allocation and financial management of its holding subsidiaries. 2. Internal audit
The audit committee under the board of directors of the company is responsible for reviewing and supervising the effective implementation of internal control and self-evaluation of internal control, and coordinating internal control audit and other related matters. The audit committee has an audit department, which is responsible for the internal audit of the company's daily operation, financial status and the implementation of internal control, as well as the communication, supervision and audit with external audit in accordance with national laws and regulations and the requirements of the company's internal audit management system. The division of functions of the audit department complies with national laws and regulations and the provisions of the articles of association.
3. Development strategy
The company has a deep understanding of the overall development of the industry. Based on the comprehensive analysis and scientific prediction of the current situation and future trend, the company timely and efficiently formulates the development strategy in line with the actual situation of the company according to the current situation, development trend and market demand of the industry, so as to ensure the professionalism, efficiency and sustainability of the company's operation and management mode
