Company code: Zijin Mining Group Company Limited(601899) company abbreviation: Zijin Mining Group Company Limited(601899)
Zijin Mining Group Company Limited(601899)
Internal control evaluation report in 2021
Zijin Mining Group Company Limited(601899) 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
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 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: the group headquarters, Serbia Zijin Mining Group Company Limited(601899) , Serbia Zijin Copper, Congo (DRC) musonoi, Tajik zelavshang, orongxing, Kyrgyz ottonk, Australia Norton, Zijinshan gold and copper mine, Ashele copper, Duobaoshan copper, Tibet Julong copper, Xinjiang Jinbao, Zijin Copper, gold smelting company, Fujian Zijin Copper Heilongjiang Zijin Copper, Xinjiang Zijin nonferrous metals, construction company, engineering technology company, Zijin logistics, capital company and other 47 ownership units. In 2021, the supervision and Audit Office of the group company organized the internal control evaluation of the group headquarters and 27 main ownership units included in the evaluation scope; Supervise and guide 47 major ownership units to carry out internal control self inspection.
2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The total assets of the units included in the evaluation scope accounted for 52.62% 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 73.70% of the total operating income in the company’s consolidated financial statements, accounting for 3.5% The main operations and matters included in the scope of evaluation include:
It is divided into overseas projects, mines, smelting and processing, construction, trade, finance and other sectors according to business units; According to the process, it mainly includes internal control at the company level such as organizational structure, development strategy, human resources, social responsibility, safety and environmental protection and corporate culture, as well as capital activities (including investment, financing and working capital management), procurement business, engineering projects, business outsourcing, asset management, sales business, comprehensive budget, internal information transmission, research and development, guarantee business, financial report, contract management, tax management Production cost calculation and collection, expenses, information system and other main business processes. This year, the company focused on daily internal control supervision, special internal control evaluation or internal control research on engineering construction, material procurement, operation compliance of overseas enterprises, product sales, inventory management, capital activities and hedging. 4. High risk areas of focus mainly include:
The high-risk areas of focus mainly include overseas compliance, project settlement, supplier management, capital, futures hedging, trade financing and other business risks, safety and environmental protection. 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 the measures for the implementation of internal control evaluation. 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
Standard misstatement of total profit ≥ 5% of total profit ＞ misstatement ≥ misstatement ＜ 2% of total profit
2% of total profit
Total assets standard (applicable misstatement ≥ 3% of total assets, 3% of total assets misstatement ≥ misstatement ＜ 1% of total assets)
Used for 1% of total assets without impact on profit and loss
Description of asset reclassification (adjustment items, etc.): 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 (1) ineffective control environment related to financial reporting;
(2) Fraud of directors, supervisors and senior managers related to financial reporting;
(3) The external audit found that there were significant misstatements in the current financial report, and the company failed to find such misstatements in the process of operation;
(4) Restate previously published financial reports to correct material errors caused by fraud or error;
(5) Major defects that have been found and reported to the management have not been corrected within a reasonable time;
(6) The supervision of the company’s audit and internal control committee and the supervision and Audit Office on internal control is invalid;
(7) Other defects that have a significant impact on the correct judgment of users of financial reports.
The defects other than the above-mentioned defects shall be determined as the important ones respectively.
General defects other than the above conditions are determined as important defects or general defects according to the degree of influence.
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
Degree of deviation from the target ＞ 10% ～ 10% ＜ 5%
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) violation of national laws, regulations or normative documents;
(2) Major decision-making procedures are unscientific;
(3) Lack of important systems;
(4) Major or important defects cannot be rectified;
(5) Causing great damage to the environment;
(6) Causing major production safety or occupational hazard accidents;
(7) Irreparable damage to the company’s reputation;
(8) Other circumstances that have a significant impact on the company.
Important defects other than the above circumstances are determined as important defects or general defects according to the degree of influence.
General defects other than the above conditions are determined as important defects or general defects according to the degree of influence.
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
During the evaluation period, the internal control evaluation of the group headquarters and 47 ownership units (including the internal control self inspection of ownership units) was carried out, and a total of 184 general defects in the internal control of financial reports (including similar defects of different units) were found. During the evaluation period of this year, the rectification closure rate of general defects in the internal control of financial reports within the rectification validity period was about 90%.
The general defects found in the internal control of financial reporting are mainly the general defects of internal control that affect the realization of financial reporting objectives in accounting, current account reconciliation, cost accounting and other businesses. For example, individual transaction data is abnormal due to the wrong classification of individual receivables, prepayments, advance receipts and payables of individual ownership companies; The reconciliation between individual ownership units and individual collaborators is not timely, resulting in inaccurate credit amount; Some period expenses of individual ownership units are accounted as operating costs, and the classification is improper; The selection of cost center in the system entry of some ownership companies is wrong, which affects the accuracy and authenticity of financial cost accounting. 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, does the company have 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
During the evaluation period, the internal control evaluation of the group headquarters and 47 ownership units (including the internal control self inspection of the ownership units) was carried out, and a total of 1168 general defects in the internal control of non-financial reports (including similar defects of different units) were found. During the evaluation period of this year, the rectification closure rate of general defects in the internal control of non-financial reports during the rectification completion period was about 91%.
The general defects of internal control over non-financial reporting found in 2021 mainly focus on business management processes such as material procurement, system construction, project settlement, metal balance and product sales. For example, due to the influence of the New Coronavirus epidemic, the flow of personnel in the construction unit is limited, resulting in the extension of the supply cycle of building materials, such as procurement and logistics, or the failure to arrive on time. The quantity or unit price of individual project sub items is wrong, and there is a risk of pricing error; The metal balance and recovery rate of some enterprises fluctuate greatly in some months due to the influence of ore properties and equipment working conditions; Affected by the epidemic situation, the production and marketing rate of some enterprises did not reach the expectation; There are disputes over the terms of performance bond in the sales contract of individual enterprises, etc. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major deficiencies in non-financial reporting internal control that have not been rectified
