Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) : self evaluation report on the effectiveness of internal control in 2021

Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929)

Self evaluation report on the effectiveness of internal control in 2021

Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) all shareholders:

In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the enterprise internal control standard system), combined with Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) (hereinafter referred to as the "company") 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).

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、 Scope, basis and defect identification standard of 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 project, financial report, contract management, fund management, human resource management, subsidiary management, related party transactions, external guarantee, external investment, asset management, information disclosure, etc. 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.

3. The high-risk areas of focus mainly include:

Capital, procurement, assets, sales, engineering, contract, guarantee, investment and subsidiary management.

(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 requirements of the enterprise internal control standard system and in combination with the relevant systems and evaluation methods of the company's internal control. 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.

1. Identification standard of internal control defects in financial reporting

Defect grade identification standard

Quantitative and qualitative criteria

1. The financial statements of the enterprise have been or are likely to be given a negative opinion or refused by the certified public accountant;

2. The directors, supervisors and senior managers of the enterprise have been or are involved in the existence of one or a group of internal control defects, which is reasonably likely to be suspected of fraud, or the employees of the enterprise have colluded in fraud, which makes it impossible to prevent or detect the major business in the financial report in time, resulting in important losses and adverse effects;

At or equal to 3% of the total assets in the company's consolidated accounting statements or before tax 3. The audit committee and the audit department shall supervise the company's failure to effectively give full play to the misstatement of 5% of the total profits;

4. There are significant misstatements in the current financial statements, and the internal control fails to find such misstatements in the operation process.

When one or a group of internal control defects exist, there is a reasonable possibility. 1. Accounting policies are not selected and applied in accordance with GAAP; Leading to failure to timely prevent or detect minor problems in financial reports. 2. Failure to establish anti fraud procedures and control measures;

The major defects are 3% of the total assets of the consolidated financial statements or the total pre tax profits. 3. There are one or more defects in the control of the ending financial reporting process, but greater than or equal to 0.5% of the total assets of the consolidated financial statements, and it can not reasonably guarantee that the prepared financial statements are true when they reach or 1% of the total pre tax profits Complete goal.

General defects do not constitute defects other than major defects and important defects, and do not constitute defects other than major defects and important defects

2. Identification standard of internal control defects in non-financial reporting

Defect grade identification standard

Quantitative and qualitative criteria

When one or a group of internal control defects exist, it is reasonably possible that if the possibility of defects is high, it will seriously reduce the work efficiency or major defects, resulting in the direct property loss of the company greater than or equal to the pre tax profit effect, or seriously increase the uncertainty of the effect, or make the defect of 3% of the total gross profit deviate from the expected target

For the defects that may cause the direct property loss of the company to be less than 3%, but the possibility of large defects is high, it will significantly reduce the work efficiency or the effect of important defects equal to or equal to 0.5% of the total pre tax profit, or significantly increase the uncertainty of the effect, or make it seriously deviate from the expected goal

General defects may cause the direct property loss of the company to be less than the profit before tax. If the possibility of defects is small, it will reduce the work efficiency or the defect result of 0.5% of the total profit, or increase the uncertainty of the effect, or make it deviate from the expected goal

(III) identification and rectification of internal control defects

1. Identification and rectification of internal control defects in financial reports: according to the above identification standards of internal control defects in financial reports, no major defects in the company's internal control over financial reports were found 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 in the company's internal control over non-financial reports were found during the reporting period.

3、 Internal control construction of the company

(I) construction and implementation of the company's internal control system

The company has established a relatively perfect, sound and effective internal control system, which can be effectively implemented. 1. Internal control environment

(1) Governance structure

Basic information of Corporate Governance: in strict accordance with the requirements of laws and regulations such as the basic norms of enterprise internal control, the company law and the securities law, the company has continuously improved the corporate governance structure, clarified the responsibilities and authorities in decision-making, implementation and supervision, formed a scientific and effective division of responsibilities and check and balance mechanism, strengthened internal management and standardized the operation of the company.

Shareholders and general meeting of shareholders: the company ensures that all shareholders enjoy equal rights; The convening and convening of the general meeting of shareholders fully comply with the requirements and provisions of the articles of association and the rules of procedure of the general meeting of shareholders; For major related party transactions and other major matters of the company, the independent directors of the company have issued special opinions, and the company has signed relevant written agreements with related parties and disclosed information in a timely manner.

About the controlling shareholders and the company: the company and the controlling shareholders are completely separated in terms of business, personnel, assets, structure and finance. The company operates its business, institutional operation and financial accounting independently, and independently assumes its business responsibilities and risks. The board of directors, the board of supervisors and the internal management of the company operate independently to ensure that major decisions of the company can be made in accordance with legal procedures and norms.

About directors and the board of directors: the board of directors is responsible for the general meeting of shareholders and exercises the company's business decision-making power according to law. There are 9 directors of the company, including 3 independent directors. The structure of the board of directors is reasonable, the information of directors is true and complete, and the candidates for directors have obtained the consent of relevant organizations and themselves in advance, and have a written commitment Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) held the 2020 annual general meeting of shareholders on April 29, 2021, deliberated and adopted the proposal on the general election of the board of directors and the election of non independent directors of the Fourth Board of directors of the company and the proposal on the general election of the board of directors and the election of independent directors of the Fourth Board of directors of the company, The members of the Fourth Board of directors of the company are qualified to serve as directors of listed companies, and the qualifications and independence of the three independent directors have been filed and approved by Shenzhen Stock Exchange before the 2020 annual general meeting of shareholders of the company. The above-mentioned personnel are qualified for the positions they are employed, and there are no situations in which they are prohibited from holding positions as stipulated in the company law, the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of GEM listed companies, the rules for independent directors of listed companies and the articles of association, There is also no case that it is determined by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") as a person prohibited from entering the market and is in the period of prohibition. It has not been subject to any punishment and punishment by the CSRC and Shenzhen Stock Exchange. It is not a person subject to dishonesty. There are four professional committees under the board of directors of the company, including strategy, audit, nomination, remuneration and assessment. Independent directors act as the convener of each professional committee. Matters involving disciplines must be approved by the professional committee first, and then submitted to the board of directors for deliberation, so as to facilitate independent directors to better play their role.

Supervisors and the board of supervisors: the members of the board of supervisors of the company have relevant professional knowledge and work experience; The board of supervisors shall independently and effectively supervise the performance of duties and financial affairs of the company's directors and senior managers in accordance with the powers conferred by the articles of Association; Attend the meetings of the board of directors as nonvoting delegates and put forward relevant suggestions and opinions to the board of directors Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) held the 2020 annual general meeting of shareholders on April 29, 2021, deliberated and adopted the proposal on the general election of the board of supervisors of the company and the election of non employee representative supervisors of the Fourth Board of supervisors of the company, and elected three non employee representative supervisors; Two employee representative supervisors are elected by the employee congress of the company. The above-mentioned personnel are qualified to serve as supervisors of listed companies as stipulated by laws and regulations, and there is no situation that they are not allowed to serve as supervisors of the company as stipulated in the company law and the articles of association, and there is no situation that they have not been lifted as market prohibited persons determined by the CSRC, and have not been subject to any punishment and punishment by the CSRC and the stock exchange, Not a dishonest person.

Senior managers and managers: responsible for organizing and implementing the resolutions of the general meeting of shareholders and the board of directors, presiding over the daily operation and management of the company, involving investment, financing, guarantee, related party transactions or other major matters, which shall be submitted to the board of directors for decision-making in accordance with the provisions of the articles of association. The above-mentioned senior managers have the qualifications suitable for the exercise of their functions and powers, and there is no company law, Shenzhen Stock Exchange gem stock listing rules In accordance with the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of companies listed on GEM and the articles of association, there is no situation that they are not allowed to serve as senior managers or secretary of the board of directors of the company, there is no situation that they are "dishonest Executees", and there is no situation that they are determined as market prohibitions by the CSRC and have not been lifted, There is no case that Shenzhen Stock Exchange has publicly determined that it is not suitable to serve as senior managers or secretary of the board of directors of listed companies, nor has it been subject to any punishment and punishment from China Securities Regulatory Commission and Shenzhen Stock Exchange. The independent directors of the company have expressed their independent opinions on the above proposal.

About the company's stakeholders: the company fully respects and maintains the legitimate rights of employees, suppliers, vendors, communities and other stakeholders, and actively cooperates with them to jointly promote the sustainable, healthy and stable development of the company.

On information disclosure and investor relations management: the company has established an investor relations management system with special personnel in charge, which can provide timely services for shareholders and other investors, receive shareholders' visits and receive investors' consultation. (2) Department setting and authority distribution

The company has set up design and Research Institute, engineering technology research center, EPC business department, equipment business department, housekeeping service department, engineering department, operation management center, material control center, storage department, finance department, cost department, audit department, market center, human resources department, quality management department, equipment factory, securities affairs department, general manager office