Jiangsu Tongli Risheng Machinery Co.Ltd(605286)
Internal control evaluation report in 2021
Jiangsu Tongli Risheng Machinery Co.Ltd(605286) 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 normative system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, and 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 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 5 Is the internal control audit opinion consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting
□ yes □ no 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 Jiangsu Tongli Risheng Machinery Co.Ltd(605286) , Jiangsu Chuangli Elevator Parts Co., Ltd., Jiangsu Huali metal materials Co., Ltd., Heshan Xieli Machinery Co., Ltd. and Chongqing Huachuang Elevator Parts Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company’s consolidated financial statements 100
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, strategic planning, human resources, corporate culture, social responsibility, capital activities, procurement business, sales business, asset management, research and development, engineering projects, business outsourcing, financial reporting, comprehensive budget, contract management, investment management and information system. 4. High risk areas of focus mainly include:
Organizational structure, strategic planning, human resources, corporate culture, social responsibility, capital activities, material procurement, product sales, asset management, research and development, engineering projects, financial management, internal audit management, related party transactions, comprehensive budget, contract management, investment management and information system. 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
（2） 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 the identification standard of internal control defects of the company. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
The board of directors of the company distinguished the internal control of financial report from the internal control of non-financial report according to the identification requirements for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the 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
Potential misstatement of total profit ≥ 5% of total profit, and total absolute profit ≤ 3% misstatement profit misstatement 3% of total profit, and the absolute value ≤ 10 million yuan if the absolute value exceeds 5% of the total value of 10 million yuan, or 5 million yuan the false value is less than or equal to 5 million yuan
Potential misstatement of total assets ≥ 1% of total assets, 0.5% of total assets ≤ misstatement ＜ asset misstatement ＜ 0.5% of total assets, 1% of total assets with a reported correct value of more than 10 million yuan, or 5 million yuan ＜ absolute value less than or equal to 5 million yuan, and the absolute value of misstatement ≤ 10 million yuan
Potential misstatement of operating revenue ≥ 0.3% of total operating revenue ≤ misstatement ＜ 0.5% of total operating revenue, and the absolute value exceeds 1000 ＜ 0.5% or 0.3% of total operating revenue, and the absolute value is less than or equal to RMB 5 million ＜ the absolute value of misstatement is RMB 5 million
≤ 10 million yuan
Description: None
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: the company’s directors, supervisors and senior managers commit fraud and cause major losses and adverse effects to the company; The company corrects the published financial statements due to material misstatement; The audit committee and internal audit institution of the company have no effect on the supervision of internal control; The control environment is deemed invalid by the regulatory department; The auditor found that there was a material misstatement in the current financial report, but the internal control failed to find the misstatement in the operation process.
Significant defects: failure to select and apply accounting policies in accordance with GAAP; Failure to establish anti fraud procedures and control measures; 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; 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 and other internal control defects that do not constitute major defects and important defect standards.
Note: none 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
Loss amount loss amount ≥ 10 million yuan, 5 million yuan ≤ loss amount ＜ loss amount ＜ 5 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, serious violation of national laws and regulations; Failing to follow the procedures and authorization, resulting in heavy losses; Lack of institutional control or systematic failure of important business, and lack of effective compensatory control; Serious loss of middle and senior managers and senior technicians; The results of internal control evaluation, especially major defects, have not been rectified; Other situations that have a significant negative impact on the company.
Major defects are not handled in accordance with procedures and authorization, resulting in large losses; Major defects in important business systems or systems; Serious loss of business personnel in key positions; The results of internal control evaluation, especially the important defects, have not been rectified; Other situations that have a great negative impact on the company.
Other non-financial internal control defects other than general defects, major defects and important defects.
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
None 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 □ yes √ no 2.3 General defect
The general defects of internal control found by the company in the evaluation process may cause risks within the controllable range, which will not have a material impact on the realization of the company’s financial reporting objectives, and the company has arranged to implement rectification. 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): Li Guoping Jiangsu Tongli Risheng Machinery Co.Ltd(605286) March 17, 2022
