Minsheng Securities Co., Ltd
About Hunan Xiangjia Animal Husbandry Company Limited(002982)
Verification opinions on self-evaluation report of internal control in 2021
Minsheng Securities Co., Ltd. (hereinafter referred to as “Minsheng securities” or “recommendation institution”) as the recommendation institution for the initial public offering and listing of Hunan Xiangjia Animal Husbandry Company Limited(002982) (hereinafter referred to as ” Hunan Xiangjia Animal Husbandry Company Limited(002982) ” or “company”), in accordance with the law on the administration of securities issuance and listing recommendation business, the stock listing rules of Shenzhen Stock Exchange The relevant conditions of Hunan Xiangjia Animal Husbandry Company Limited(002982) 2021 annual internal control self-evaluation report have been verified in accordance with the provisions of relevant laws and regulations such as the guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, as follows:
1、 Verification of recommendation institutions
The sponsor representative of Minsheng securities consulted the 2021 internal control evaluation report issued by the board of directors, communicated with the company’s directors, supervisors, senior managers, finance department, internal audit department and other departments, and combined with the daily continuous supervision, Comprehensively and carefully checked the integrity, rationality and effectiveness of the company’s internal control.
2、 Internal control evaluation
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas.
The main units included in the evaluation scope include Hunan Xiangjia Animal Husbandry Company Limited(002982) and its subsidiaries within the scope of merger. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company’s consolidated financial statements.
The main businesses and matters included in the evaluation scope include: corporate governance, organizational structure, development strategy, human resources, corporate culture, social responsibility, research and development, safety and environmental protection, market development, customer service, operation project management, engineering project management, procurement management, fund management, financial management, comprehensive budget, investment management, asset management, external guarantee, legal affairs, contract management, capital operation Information management, internal control audit, financial report, control of holding subsidiaries, etc.
The high-risk areas of focus mainly include: market competition, price fluctuation of raw materials, customer dependence, materials and procurement, fund management, financial management, safety and environmental protection, related party transactions, information disclosure, etc.
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, and there are no major omissions.
(II) 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 standard system of enterprise internal control, the basic norms of enterprise internal control, the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 21 – General Provisions on annual internal control evaluation report and other laws and regulations, regulatory provisions and relevant provisions of the articles of association, and in combination with the actual situation of the company.
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with factors such as the company’s size, industry characteristics, risk preference and risk tolerance, the board of directors of the company distinguished internal control over financial reports from internal control over non-financial reports, studied and determined specific identification standards for internal control defects applicable to the company, which were consistent with those in 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 quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defects of project influence degree, important defects and general defects
Misstatement of operating revenue 0.5% of total operating revenue of operating revenue misstatement ≤ 1% of total operating revenue ≤ 0.5% of total operating revenue
Total profit misstatement 5% of total profit of total profit ＜ misstatement ≤ profit misstatement ≤ 10% of total profit and 5% of 10% of total profit
Misstatement of total assets 0.5% of total assets misstatement ≤ misstatement ≤ 1% of total assets ≤ 0.5% of 1% of total assets
Owner’s equity (including minority stock misstatement 1.5% of total owner’s equity misstatement ≤ owner’s equity) 3% misstatement ≤ 1.5% of total owner’s equity 3%
Note 1: the “total assets”, “owner’s equity”, “operating income”, “total profit” and other data in the above table are the data of the consolidated statement of the previous year.
Note 2: for the above four identification standards, defects shall be identified according to which one is higher.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
1) Defects with the following characteristics are recognized as major defects:
A. Fraud by directors, supervisors or senior managers of the company.
B. There are major errors in the company’s announced financial report.
C. The external audit found that there were significant misstatements in the financial report, but they were not identified by the company’s internal control.
D. The supervision of the audit committee and the internal audit department over the company’s external financial reports and internal control over financial reports is invalid.
2) Defects with the following characteristics are recognized as important defects:
A. It is found that non management has committed or is suspected of fraud.
B. Indirectly lead to material misstatement or omission of financial report.
C. Other defects that may affect the correct judgment of financial statements or statement users.
3) General defects: refer 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 quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Major defects of project influence degree, important defects and general defects
Direct loss amount ＞ 0.5% of total assets ＜ direct loss amount ≤ 1% of total assets, followed by loss amount ≤ 0.5% of total assets
1% of the amount
Note: the “total assets” in the above table for reference and comparison is the data of the consolidated statement of the previous year.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
1) Major defects are identified in the following similar situations:
A. The unscientific decision-making procedure of the company leads to major decision-making mistakes and heavy property losses to the company.
B. Violation of relevant laws and regulations, company procedures or standard operating procedures, and causing serious damage to the disclosure of the company’s periodic reports
Great negative impact.
C. Major fraud occurred.
D. Lack of institutional control or systematic failure of important business, resulting in heavy losses recognized according to the above quantitative standards
Big loss.
E. Other situations that have a significant negative impact on the company.
2) The following similar situations are identified as important defects:
A. The unscientific decision-making procedure of the company leads to losses identified according to the above quantitative standards.
B. Violation of the internal rules and regulations of the enterprise, resulting in losses identified according to the above quantitative standards.
C. There are defects in important business systems or systems, resulting in losses identified according to the above quantitative standards.
D. Important or general defects in internal control have not been rectified.
3) In addition to the above major defects and important defects, other control defects are recognized as general defects.
(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 or 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 or important defects in the company’s internal control over non-financial reports were found during the reporting period.
3、 Hunan Xiangjia Animal Husbandry Company Limited(002982) self evaluation conclusion of internal control
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.
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.
The company has no 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.
4、 Verification opinions of the recommendation institution
Through the verification of the establishment and implementation of Hunan Xiangjia Animal Husbandry Company Limited(002982) internal control system, the sponsor believes that the corporate governance structure of the company is perfect and the current internal control system meets the requirements of relevant laws, regulations and normative documents. The implementation of the company’s internal control system in 2021 is good, and the internal control evaluation report of Hunan Xiangjia Animal Husbandry Company Limited(002982) 2021 issued by the board of directors of the company is in line with the actual situation of the company.
(there is no text on this page, which is the signature page of the verification opinions of Minsheng Securities Co., Ltd. on the self-evaluation report of Hunan Xiangjia Animal Husbandry Company Limited(002982) 2021 annual internal control) sponsor representative:
Cao Wenxuan, Cao Dong
Minsheng Securities Co., Ltd. March 22, 2022
