Performance report of the audit committee in 2021
In accordance with the Listing Rules of Shanghai Stock Exchange, the self regulatory guidelines for listed companies on Shanghai Stock Exchange No. 1 - standardized operation, the articles of association and the rules of procedure of the audit committee of Meihua Holdings Group Co.Ltd(600873) board of directors (hereinafter referred to as the "rules of procedure of the audit committee"), in 2021 (hereinafter referred to as the "reporting period"), As a member of the audit committee of Meihua Holdings Group Co.Ltd(600873) (hereinafter referred to as "the company"), based on the principle of diligence and responsibility, in supervising and evaluating the work of external audit institutions, guiding internal audit work, reviewing the annual internal audit work plan of listed companies, reviewing and expressing opinions on the financial reports of listed companies, evaluating the effectiveness of internal control, coordinating the management The internal audit department and relevant departments have expressed relevant opinions and suggestions in terms of communication with external audit institutions, and actively performed relevant responsibilities.
The performance of duties in 2021 is reported as follows:
1、 Composition of audit committee members and convening of meetings
(I) membership
The audit committee of the ninth board of directors of the company is composed of independent director Mr. Guo Chunming, independent director Mr. Luo Qinghua and chairman Ms. Wang Aijun, of which the chairman is Mr. Guo Chunming with professional accounting qualification.
(II) convening of the meeting
During the reporting period, the audit committee held 6 meetings, including 4 regular meetings and 2 temporary meetings.
On January 29, 2021, the audit committee held the first interim meeting in 2021. At the meeting, the annual audit accountant reported the annual report and audit work plan, and the audit department reported the special inspection plan of the company's internal governance, the work summary of the previous year and the work plan of the next year.
On April 6, 2021, the audit committee held its first regular meeting in 2021. The meeting discussed the company's 2020 annual report, the audit committee's performance report in 2020, the internal control evaluation report, the company's 2020 profit distribution (plan), changes in accounting policies, carrying out financial derivatives trading business, using idle self owned funds to purchase financial products Related party transactions and external guarantees shall be reviewed and submitted to the board of directors for deliberation. At the same time, the meeting focused on the changes of accounts receivable and inventory falling price reserves in the financial report. On April 8, 2021, the audit committee held the second regular meeting of 2021. At the meeting, it reached an agreement on the report of the first quarter of 2021. It believed that the report of the first quarter of 2021 prepared by the company truly and fairly reflected the operation of the company in the first quarter of 2021, and agreed to submit it to the board of directors for deliberation.
On July 15, 2021, the audit committee held the third regular meeting of 2021. After deliberation, it was considered that the company's semi annual financial report of 2021 truly and fairly reflected the company's operation in the first half of 2021, and agreed to submit it to the board of directors of the company for deliberation.
On October 18, 2021, the audit committee held the fourth regular meeting of 2021, at which the third quarter report of 2021 was reviewed and approved and agreed to submit it to the board of directors of the company for review.
On December 30, 2021, the audit committee held the second interim meeting in 2021. At the meeting, it communicated with Dahua Certified Public Accountants (special general partnership) (hereinafter referred to as "Dahua") and listened to its annual audit plan. The head of the company's internal audit department reported the main work of the internal audit department in 2021 and the work plan for the next year.
2、 Specific performance of duties
(I) supervise and evaluate the work of external audit institutions
1. Supervise and evaluate the independence and professionalism of external audit institutions
In 2021, the company continued to employ Dahua as the auditor of the company's annual report and internal control in 2021. The audit committee of the board of directors has fully understood and reviewed Dahua's professional competence, investor protection ability, independence and integrity, and believes that Dahua's audit of the company's assets and operating results is realistic, and the audit report is objective and true, The audit committee agreed to propose to the board of directors to reappoint the financial and internal control audit institution of Huawei in 2021.
The audit committee has supervised and evaluated it. There is no relationship or other matter between UOB and the company that may affect its independence. The members of the audit project team and other relevant personnel of the firm participating in the company's audit maintain their independence in accordance with the provisions of relevant professional ethics. At the same time, they have consulted UOB's qualification certificates and business introduction documents, In view of Dahua's rich audit experience and excellent business ability, and considering that it can meet the requirements of the company's future financial audit and internal control audit, it is hereby proposed to the board of directors to reappoint the financial and internal control audit institution of Dahua in 2021. At the same time, the board of directors requests the general meeting of shareholders of the company to authorize the management to determine its remuneration according to its specific work conditions.
2. Propose to the board of directors to hire an external audit institution
Since Dahua can meet the requirements of the company's future financial audit and internal control audit, it is proposed to renew the employment of the financial and internal control audit institution of Dahua in 2021, and submit relevant proposals to the board of directors and the general meeting of shareholders for deliberation.
3. Review the audit fees and employment terms of external audit institutions
According to the audit engagement letter signed by the company and Dahua, it is determined to pay 2.2 million yuan of Dahua audit fee, including 1.4 million yuan of financial audit fee and 800000 yuan of internal control audit fee, which is consistent with the audit fee data actually disclosed by the company.
(II) guide internal audit
We consulted the work summary of the previous year and the work plan of the next year submitted by the audit department. According to the 2021 work plan and in combination with the actual situation in the company's operation and management, on the one hand, the audit department carries out basic compliance inspection to consolidate the basic management of internal control; On the other hand, carry out special inspections for key business areas to identify and prevent enterprise operation and management risks.
During the reporting period, the audit department organized and carried out special inspection on the procurement of the three bases, improved and optimized the procurement internal control risk matrix through risk identification, and carried out daily compliance inspection on funds, inventories, assets and expenses. For basic problems such as inadequate implementation and wrong operation, the problems were gradually reduced or eliminated through training and inspection.
During the reporting period, the company hired Deloitte internal control professional team to comprehensively sort out and improve the sales internal control management process. We sorted out 17 core control processes in key business areas such as customer management, contract management, credit management, order management and freight management, issued risk control manuals, clarified risk control standards, and effectively standardized and guided the daily work of the business.
In 2022, the audit department will continue to consolidate the foundation of internal control and continue to deepen the responsibilities of inspection, supervision and risk control of key businesses in combination with the actual operation of the company, taking national laws, regulations and company systems as the red line. The main work plans for 2022 are as follows: 1) continue to strengthen the supervision of corn storage in three places; 2) Continue to carry out the special inspection of fixed assets, implement the asset management system, and include the asset management personnel of the base in the quarterly assessment; 3) Continue to carry out in-depth special inspection on sales and procurement business, with contract management and implementation as key inspection items; 4) Revise and improve the inspection standards of funds and expenses in combination with the compliance inspection of the previous year, and focus on strengthening the inspection of funds and inventories; 5) Strengthen the training of auditors and team building.
(III) review the financial reports of listed companies and express opinions on them
We reviewed the financial report prepared by the company, paid real-time attention to the changes of financial data, and reminded Dahua to pay special attention to the accounts receivable, inventory falling price reserves, construction in progress, revenue recognition and other related matters in the annual report. We believe that the internal control system of the company is effective, and the financial report of the company is prepared in accordance with the provisions of relevant accounting standards, It fairly reflects the company's financial status, operating results and governance status, and the company has no major misstatement caused by fraud or error, no adjustment of major accounting errors, and no matters involving important accounting judgments that lead to the issuance of non-standard unqualified audit reports.
(IV) evaluate the effectiveness of internal control
The company organizes and carries out internal control evaluation and improves internal control governance in accordance with the basic norms of enterprise internal control, guidelines for the application of enterprise internal control, guidelines for the evaluation of enterprise internal control, guidelines for the internal control of listed companies and the company's internal control system.
1. Review the internal control evaluation report prepared by the company
In view of the development of internal control in 2021, the audit committee reviewed the internal control evaluation report prepared by the company and believed that the company's existing internal control system met the requirements of relevant Chinese laws and regulations and relevant regulatory authorities, and could provide a reasonable guarantee for the preparation of true and fair financial statements and the healthy operation of the company's business activities, Agree to submit it to the board of directors for deliberation.
2. Review the internal control audit report issued by the external audit institution
The audit committee reviewed Dahua neizi [2022] No. Shenzhen Sed Industry Co.Ltd(000032) issued by Dahua Certified Public Accountants (special general partnership) and believed that the company had 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.
3. Evaluate the results of internal control evaluation and audit, and urge the rectification of internal control defects
During the reporting period, the internal control audit was mainly conducted for capital activities, expense management, inventory management, cost management, fixed assets, procurement management, sales management, engineering management, financial reporting, human resources and other businesses. The audit department took the lead to establish a comprehensive internal control inspection team, and learned from the internal control methods of the four major firms, mainly through on-site interviews, research Through measurement, risk assessment, data analysis, sampling and other methods, diagnose and identify the internal control defects of each business, and put forward effective rectification measures for the main problems. In 2021, a total of 17 internal control defects were mainly found to be rectified, all of which were general internal control defects, which decreased gradually compared with 2020. Compared with 2020, the internal control defects of the group, Tongliao, Xinjiang and Jilin also decreased gradually, mainly due to the improvement of daily business and financial control ability and the strengthening of risk awareness.
The corporate governance and management attach great importance to internal control and risk control, in order to effectively prevent and control the compliance risk of internal control. In view of the above internal control problems, clarify the responsible department, responsible person and rectification period. At the same time, include the completion of rectification in the performance assessment of the leaders of the responsible department, further improve the procurement internal control system, and promote the responsible department to be able to actively complete the rectification of internal control defects as planned. As of December 31, 2021, the company has no major internal control defects. The company's internal control system is complete and reasonable, and the implementation is effective, which can ensure the effective achievement of the company's business objectives and internal control objectives.
(V) coordinate the communication between the management, internal audit department and relevant departments and external audit institutions
During the reporting period, we paid attention to the company's business development by participating in the board of directors, telephone consultation, interview, access to public materials and other ways, raised our own questions on key issues, the company's management was able to respond in time, and the company's audit department submitted the audit summary and plan in time.
During the reporting period, in order to do a good job in the annual audit, we coordinated and held the audit committee meeting to communicate with the management on the key concerns of the annual audit accountant, listened to the opinions of the annual audit accountant on the changes of the regulatory situation and the annual audit plan, and urged the company to disclose the annual report in a timely, objective, accurate and complete manner.
3、 Overall evaluation
During the reporting period, as a member of the audit committee of the company, we performed our duties in accordance with the requirements of relevant laws and regulations and the articles of association, and made suggestions for the decision-making of the board of directors.
In 2022, we will further strengthen the communication with the management, urge the professionalism and independence of the external audit institutions, guide the internal audit department of the company to continue to deepen the inspection, supervision and risk control responsibilities of the business with higher requirements and standards, provide suggestions for the board of directors, and urge the compliance, stable and healthy operation of all businesses of the company.
(no text below this page)
Signature page of employment report
Reporter:
Guo Chunming:
Luo Qinghua:
Wang Aijun:
March 11, 2002
