catalogue
1、 Assurance report of internal control Page 1-2 II. Description on the internal control system of financial reporting Page 3-9
About Hunan Xiangjia Animal Husbandry Company Limited(002982)
Assurance report of internal control
TJS [2022] No. 2-51
Hunan Xiangjia Animal Husbandry Company Limited(002982) all shareholders:
We have verified the attached confirmation made by the management of Hunan Xiangjia Animal Husbandry Company Limited(002982) (hereinafter referred to as Hunan Xiangjia Animal Husbandry Company Limited(002982) company) on the effectiveness of internal control over financial reporting on December 31, 2021 in accordance with the guidelines for self discipline supervision of Listed Companies in Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board (SZS [2022] No. 13).
1、 Description of significant inherent limitations
Internal control has inherent limitations, and there is the possibility of misstatement and undetected due to error or fraud. In addition, due to the change of circumstances, the internal control may become inappropriate, or the degree of compliance with control policies and procedures may be reduced. According to the internal control evaluation results, it is speculated that the effectiveness of internal control in the future has a certain risk.
2、 Restrictions on the users and purposes of the report
This assurance report is only for the use of Hunan Xiangjia Animal Husbandry Company Limited(002982) company when disclosing the 2021 annual report, and shall not be used for any other purpose. We agree that this assurance report, as a necessary document for the 2021 annual report of Hunan Xiangjia Animal Husbandry Company Limited(002982) company, shall be submitted together with other materials and disclosed to the public.
3、 Responsibilities of management
Hunan Xiangjia Animal Husbandry Company Limited(002982) the responsibility of the management of the company is to establish and improve the internal control and maintain its effectiveness. At the same time, in accordance with the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board (SZS [2022] No. 13), the management shall determine the effectiveness of internal control on December 31, 2021 and be responsible for the above determination.
4、 Responsibilities of Certified Public Accountants
Our responsibility is to express assurance opinions on the effectiveness of internal control over financial reporting based on the implementation of assurance work.
5、 Job overview
We have carried out the assurance business in accordance with the provisions of other assurance business standards for Chinese certified public accountants No. 3101 - assurance business other than audit or review of historical financial information. The above provisions require us to plan and implement the assurance work to obtain reasonable assurance on whether the information of the assurance object is free from material misstatement. In the assurance process, we have implemented other procedures including understanding, testing and evaluating the rationality of the design and effectiveness of the implementation of the internal control system, as well as other procedures that we consider necessary. We believe that our assurance work provides a reasonable basis for expressing opinions.
6、 Assurance conclusion
We believe that Hunan Xiangjia Animal Husbandry Company Limited(002982) company has maintained effective internal control over financial reporting in all major aspects on December 31, 2021 in accordance with the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board (SZS [2022] No. 13).
This conclusion is formed under the inherent limitations pointed out in the assurance report. Tianjian Certified Public Accountants (special general partnership) Chinese certified public accountant:
Hangzhou, China Certified Public Accountant:
March 22, 2002
Hunan Xiangjia Animal Husbandry Company Limited(002982)
Notes on the internal control system of financial reporting
1、 Basic information of the company
Hunan Xiangjia Animal Husbandry Company Limited(002982) (hereinafter referred to as the company or the company) was formerly Hunan Shuangjia agriculture and animal husbandry technology Co., Ltd. (hereinafter referred to as Shuangjia company). Shuangjia company was jointly invested and established by Yu Ziwen and Xing Weimin. It was registered in Shimen County Administration for Industry and Commerce on April 8, 2003. Shuangjia company was changed to Hunan Xiangjia Animal Husbandry Company Limited(002982) , with March 31, 2012 as the base date, and completed its registration in Changde Administration for Industry and Commerce on June 18, 2012. The company now holds a business license with a unified social credit code of 91430700748364904t, with a registered capital of 10188000000 yuan and a total of 101880000 shares (par value of 1 yuan per share). Among them, 54692500 A shares of tradable shares with limited sales conditions; There are 47187500 A shares of tradable shares with unlimited sales conditions. The company's shares were listed and traded in Shenzhen Stock Exchange on April 24, 2020.
The company belongs to the animal husbandry industry. The main business activities are animal husbandry breeding services; Raising and selling livestock and poultry; Slaughter and sale of livestock and poultry; Processing and sales of feed; Processing and sales of meat products and by-products; Sale of veterinary drugs; Tree seedling raising (excluding seeds); Breeding equipment sales; Agricultural, forestry, animal husbandry and fishery technology extension services; Manufacture and sale of organic fertilizer and microbial fertilizer; Egg sales; Internet sales of food; Refrigerated truck road transportation, loading, unloading and handling; Low temperature storage; Import and export of goods or technologies (excluding those prohibited by the state or involving administrative examination and approval); Inspection and quarantine services and testing services. (for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)
2、 Objectives and principles for the company to establish internal control system for financial reporting
（1） Objectives of the company's internal control system over financial reporting
1. Standardize the accounting behavior of the company and ensure the authenticity and integrity of accounting materials.
2. Plug loopholes, eliminate hidden dangers, prevent and timely detect and correct errors and fraud, and protect the safety and integrity of the company's assets.
3. Ensure the implementation of relevant national laws and regulations and the company's internal rules and regulations.
（2） Basic principles for the establishment of the company's internal control system for financial reporting
1. The internal control of financial reporting complies with relevant national laws and regulations and the requirements of relevant provisions such as the guidelines for self discipline and supervision of listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board (SZS [2022] No. 13) and the actual situation of the company.
2. The internal control of financial reporting restricts all personnel involved in accounting work within the company, and no individual shall have the power to go beyond the internal control of financial reporting.
3. The internal control of financial report covers all economic businesses and relevant posts involving accounting work within the company, and implements the key control points in the process of business processing to decision-making, implementation, supervision, feedback and other links.
4. The internal control of financial reporting ensures the reasonable setting of institutions and posts involved in accounting work and the reasonable division of responsibilities and authorities within the company, adheres to the separation of incompatible posts, and ensures that different institutions and posts have clear rights and responsibilities, restrict and supervise each other.
5. The internal control of financial reporting follows the principle of cost-benefit, and achieves the best control effect with reasonable cost control.
6. The internal control of financial reporting is constantly revised and improved with the changes of the external environment, the adjustment of the company's business functions and the improvement of management requirements.
3、 Relevant information of the company's internal control system for financial reporting
The establishment and implementation of the company's internal control system for financial reporting on December 31, 2021 are as follows:
（1） Internal control elements of the company
1. Control environment
(1) Communication and implementation of integrity and moral values
Integrity and moral values are an important part of the control environment and affect the design and operation of important business processes of the company. The company has always attached importance to the creation and maintenance of this atmosphere, established a series of internal norms such as employee code of conduct, and implemented these in multiple channels and all directions through strict punishment system and the practice of senior managers.
(2) Emphasis on Competence
The management of the company attaches great importance to the setting of the use ability level required for specific jobs, as well as the requirements for the knowledge and ability necessary to achieve this level. At present, the company has 6933 employees, including 1 with senior professional title, 20 with intermediate professional title and 71 with primary professional title; Among them, there are 5 postgraduates, 189 undergraduates and 488 junior college students. The company also carries out various forms of post training and education for different posts according to the needs of actual work, so that employees can be competent for their current jobs.
(3) Participation procedures of governance
The responsibilities of the management have been clearly stipulated in the articles of association and policies of the company. Through its own activities and with the support of the audit committee, the governance layer supervises the company's accounting policies and internal and external audit work and results. The responsibilities of the governance layer also include supervising whether the policies and procedures designed to review the effectiveness of internal control are reasonable and effective.
(4) Management philosophy and business style
The management of the company is responsible for the operation of the enterprise and the formulation, implementation and supervision of business strategies and procedures. The board of directors and the audit committee effectively supervise it. The management attached great importance to internal control, including information technology control, information management personnel and accounting personnel, and timely and properly handled the reports on internal control weaknesses and violations received. Adhering to the business philosophy of "sincere letter and win-win cooperation", the company pursues the enterprise tenet of "promoting high-quality poultry cold chain logistics and distribution, making the city more environmentally friendly and better life" and the service philosophy of "no bad customers, only bad service mentality", serves every customer wholeheartedly, operates honestly and legally.
(5) Organizational structure
In order to effectively plan, coordinate and control business activities, the company has reasonably determined the form and nature of organizational units, implemented the principle of separation of incompatible positions, scientifically divided the responsibilities and authorities within each organizational unit, and formed a mutual check and balance mechanism. At the same time, we will earnestly achieve "five independence" from the controlling shareholder of the company. The company has designated special personnel to be specifically responsible for internal audit and ensure the implementation of relevant accounting control systems.
(6) Distribution of authority and responsibility
The company adopts the method of assigning control responsibilities to individuals, establishes a set of authorization mechanism for performing specific functions (including transaction authorization), and ensures that everyone clearly understands the reporting relationship and responsibilities. In order to effectively control the authorized use and supervise the company's activities, the company has gradually established a budget control system, which can modify the control policies of the accounting system in a timely manner according to the changes of the situation. The financial department reasonably ensures that business activities are carried out in accordance with appropriate authorization through various measures; Reasonably ensure that transactions and events can be recorded in appropriate accounts in a timely manner with the correct amount in the appropriate accounting period, so that the preparation of financial statements meets the relevant requirements of accounting standards.
(7) Human resources policy and Practice
The company has established and implemented more scientific personnel management systems such as employment, training, job rotation, assessment, reward and punishment, promotion and elimination, and hired enough personnel to complete the assigned tasks.
2. Risk assessment process
The company has formulated the long-term overall goal of "building China's first green poultry product brand from farm to table to meet the needs of all sectors of society for poultry products in an all-round way", supplemented by specific strategies and business process plans to clearly convey the business objectives of the enterprise to every employee. The company has established an effective risk assessment process and a risk management department to identify and respond to major and generally influential changes that the company may encounter, including business risks, environmental risks, financial risks and so on. 3. Communication with information system
The company has established a powerful information system to provide timely and effective performance reports to the management. The information system personnel (including financial personnel) are scrupulous and diligent, and can effectively perform their assigned responsibilities. The management of the company also provides appropriate human and financial resources to ensure the normal and effective operation of the whole information system.
The company has established effective communication channels and mechanisms for suspicious inappropriate matters and behaviors, so that the management can effectively communicate with employees' responsibilities and control responsibilities. The adequacy of internal communication enables employees to effectively perform their duties, communicate effectively with customers, suppliers, regulators and other outsiders, and enable the management to take timely and appropriate further actions in the face of various changes.
4. Control activities
The company has necessary control policies and procedures for its main business activities. The management has clear objectives for budget, profit, other financial and operating performance. The company has clear records and communication on these objectives, and actively monitors them. The financial department has established appropriate protection measures to reasonably ensure that the contact and handling of assets and records are properly authorized; Reasonably ensure that the book assets are consistent with the actual assets on a regular basis.
In order to reasonably ensure the realization of various objectives, the company has established relevant control procedures, mainly including transaction authorization control, responsibility division control, voucher and record control, asset contact and record use control, independent inspection control, electronic information system control, etc.
(1) Transaction authorization control: it defines the scope, authority, procedures, responsibilities and other relevant contents of authorization and approval. The management at all levels within the unit must exercise corresponding functions and powers within the scope of authorization, and the handling personnel must also handle economic business within the scope of authorization.
(2) Control of responsibility division: reasonably set the division of labor, scientifically divide the responsibilities and authorities, implement the principle of separation of incompatible positions and each person's work can automatically check the work of another person or more people, and form a mutual check and balance mechanism. Incompatible positions mainly include: authorization approval and business handling, business handling and accounting records, accounting records and property custody, business handling and business audit, authorization approval and supervision and inspection, etc.
(3) Voucher and record control: the voucher circulation procedure has been reasonably formulated, so that the operators can prepare relevant vouchers in time when executing transactions, and the prepared vouchers shall be sent to the accounting department as soon as possible for recording, and the registered vouchers shall be filed in order. Relevant records must be made for various transactions (such as employee salary records, perpetual inventory records, sales invoices, etc.), and the records must be independently compared with the corresponding entries.
(4) Control of asset contact and use of records: strictly restrict the direct contact of unauthorized personnel with property, and take measures such as regular inventory, property records, account verification and property insurance to ensure the safety and integrity of all kinds of property.
(5) Independent inspection and control: the company has set up a special internal audit organization to conduct internal audit on monetary funds, securities, vouchers and account books, material procurement, consumption quota and payment
