Great Wall International Acg Co.Ltd(000835) 2021 annual internal control self evaluation report
Great Wall International Acg Co.Ltd(000835)
Self evaluation report on internal control in 2021
March 23, 2022
Great Wall International Acg Co.Ltd(000835) all shareholders:
According to the basic norms of enterprise internal control (hereinafter referred to as the basic norms), the guidelines for the application of enterprise internal control (hereinafter referred to as the application guidelines), the guidelines for the evaluation of enterprise internal control (hereinafter referred to as the evaluation guidelines) and other internal control regulatory requirements (hereinafter referred to as the "enterprise internal control normative system"), In combination with the risk control management system and internal control evaluation management measures of Great Wall International Acg Co.Ltd(000835) (hereinafter referred to as "the company"), on the basis of daily and special supervision of internal control, we conducted a self-evaluation on the effectiveness of the company's internal control on December 31, 2021 (the benchmark date of internal control self-evaluation report).
1、 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 self-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.
2、 Internal control evaluation conclusion
Due to the following major defects and their impact on the realization of control objectives, the company failed to maintain 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:
(I) there are major defects in the reconciliation and collection of accounts receivable
Shanghai Tianrui economic and Trade Co., Ltd. (an important subsidiary of Great Wall animation, hereinafter referred to as "Shanghai Tianrui") shall regularly reconcile with customers such as supermarkets and collect funds. Shanghai Tianrui has no reconciliation and dunning records with the supermarket in the current year. Due to the lack of timely reconciliation and collection, some accounts receivable of Shanghai Tianrui still cannot be recovered beyond the credit period, which also affects the accuracy of the ending balance of accounts receivable of Shanghai Tianrui. There are major defects in the internal control of accounts receivable reconciliation and collection of Shanghai Tianrui economic and Trade Co., Ltd.
(II) there are major defects in inventory counting and account checking
The inventory management system of Shanghai Tianrui economic and Trade Co., Ltd. stipulates that "at the end of March, June, September and December every year, the company's business manager or the person in charge of each district's business shall organize a careful inventory of all goods in the warehouse, and the inventory data shall be sent back to the company immediately after each inventory, and the company's employees shall compare and verify the returned data with the inventory account". Shanghai Tianrui economic and Trade Co., Ltd. only provided the inventory counting documents at the end of September 2021, and there was a large difference in the actual count amount, financial book amount and company inventory amount, which was not adjusted according to the actual situation. Shanghai Tianrui economic and Trade Co., Ltd. has major defects in internal control in inventory counting and account reconciliation.
(III) there are major defects in the management of some seals
The seal management of Great Wall animation and some of its subsidiaries was out of control in 2019 and remained out of control until 2021. There are major defects in the company's internal control related to seal management.
(IV) major defects in the management of some subsidiaries
Some subsidiaries of Great Wall animation operating in different places have major defects in items (I) to (III) above. Great Wall animation has major defects in the internal control related to the management of its subsidiaries.
There is no significant change in internal control that has a substantial impact on the evaluation conclusion of internal control between the benchmark date of the self-evaluation report of internal control and the date of issuance of the self-evaluation report of internal control.
3、 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 units included in the scope of evaluation include the company's headquarters and its subsidiaries. The total assets of the units included in the scope of evaluation 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 consolidated financial statements. The main businesses and matters included in the evaluation scope include: corporate governance, information and communication, strategy and plan, comprehensive budget management, human resource management, financial management, investment management, procurement management, asset management, business management, comprehensive administrative management, information system management, internal supervision, production management, sales management and other businesses and matters; The high-risk areas mainly include: macro policy risk, macroeconomic risk, market demand risk, market competition risk, price fluctuation risk, strategic planning risk, production safety risk, supply chain control risk, market scale risk and strategic decision-making risk.
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.
（2） 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 enterprise internal control standard system and the management measures for internal control evaluation.
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. The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Degree of importance
General defect major defect major defect project
Misstatement ＜ 5% of total profits or 100 misstatement ≥ 5% of total profits or 1 million yuan ≤ misstatement ＜ 10% of total profits or 10% of 2 million yuan or 2 million yuan
Misstatement ＜ 0.5% of total assets or misstatement ≥ 0.5% of total assets potential misstatement of total assets or RMB 3.5 million ≤ misstatement ＜ 1% of total assets or RMB 7 million or RMB 7 million
0.5% or misstatement of operating revenue ≥ operating revenue potential misstatement of operating revenue ＜ 7 million yuan of operating revenue ≤ misstatement ＜ 1% or 14 million 0.5% of operating revenue or 1% or 14 million yuan of revenue
element
Potential misstatement of owner's equity ＜ 0.5% of owner's equity or misstatement ≥ 0.5% of owner's equity or 2.5 million yuan ≤ misstatement ＜ 1% of owner's equity or 1% of 5 million person's equity or 5 million yuan
element
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Major defect: refers to the combination of one or more control defects, which causes the enterprise to seriously deviate from the control objectives.
In case of the following circumstances, it shall be deemed as a major defect:
① The company's management has any degree of fraud;
② Invalid control environment;
③ Major internal control defects found and reported to the management have not been corrected after a reasonable time; ④ The major misstatement found in the audit was not first discovered by the company;
⑤ Other defects that affect the correct judgment of report users.
Important defect: refers to the combination of one or more control defects, whose severity and economic consequences are lower than those of major defects, but it may still cause the enterprise to deviate from the control objectives.
General defects: refer to other defects except major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Degree of influence
Significant negative impact on the amount of direct property loss
Defect type
It was punished by government departments below the provincial level (including the provincial level), with a general defect of less than 1 million yuan (including), but it did not have a negative impact on the disclosure of the company's periodic reports.
Important defects ranging from 1 million yuan to 2 million yuan (inclusive) were punished by national government departments, but did not have a negative impact on the disclosure of the company's periodic reports.
Major defects of more than 2 million yuan have been officially disclosed to the public and have a negative impact on the disclosure of the company's periodic reports.
(2) The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Under the following circumstances, it shall be recognized as a major defect, and under other circumstances, it shall be recognized as an important defect or a general defect according to the degree of influence.
(1) Serious violation of laws and regulations;
(2) In addition to the reasons for policy losses, the enterprise has suffered losses for consecutive years and its sustainable operation has been challenged;
(3) Lack of systematic business control;
(4) Major decision-making procedures are unscientific;
(5) Enterprise managers leave one after another or the loss of key positions is serious;
(6) Internal control evaluation results, especially major or important defects, have not been rectified.
(III) identification and rectification of internal control defects
1. Identification of internal control defects
According to the above recognition criteria and the evaluation, we found that the company had important risks in internal control during the reporting period. For the defects found during the reporting period, the company has formulated corresponding rectification measures and promoted their implementation.
(1) The board of directors paid great attention to the defects and problems existing in the reconciliation and collection of accounts receivable, inventory counting and accounting reconciliation of Shanghai Tianrui. It has repeatedly requested the person in charge of Shanghai Tianrui in writing in 2020 and 2021 to make rectification within a time limit and make substantive collection of accounts receivable; Order Shanghai Tianrui to provide a detailed list of goods in the warehouse, require careful inventory of all items in the warehouse, transfer part of the inventory to the place designated by the company for storage, and strictly implement the relevant provisions of the inventory management system. However, due to the resignation of its key personnel and other reasons, the relevant rectification work encountered major obstacles. At present, Shanghai Tianrui has been applied for bankruptcy liquidation by creditors and designated by the court as the bankruptcy administrator. It will no longer be included in the scope of the company's consolidated statements from January 6, 2022.
(2) The defects in the company's seal management are mainly caused by historical reasons such as the resignation of all the original relevant responsible personnel of the company and relevant subsidiaries and the change of management. At present, through unremitting efforts, the board of directors has basically completed the business registration change of the company and its subsidiaries, and will complete the renewal of relevant licenses and seals as soon as possible. In the next step, the company will continue to strengthen the seal management, and require the general manager's office and the person in charge of seal use and supervision to strictly standardize the management in accordance with the company's seal management system, and assign special personnel to be responsible for it. Ensure that all matters related to the company's use of seals are safe and efficient, and strictly implement the corresponding approval, use, registration and storage procedures.
(3) The defects in the management of the company's subsidiaries are also mainly caused by historical reasons. The board of directors attaches great importance to and focuses on the rectification of the defects in the management of subsidiaries. Through efforts, the company has established a unified and layered electronic management approval system, strictly implemented the supervision and supervision mechanism, and comprehensively strengthened the control of the daily business activities of its subsidiaries. Next, the company will actively study and adopt plans including but not limited to establishment, integration and divestiture in accordance with the company law, the articles of association, the subsidiary management system and other relevant provisions, so as to further strengthen the management of subsidiaries and ensure that the internal control of the company and its subsidiaries is sound and effective.
2. Defect rectification
In view of the internal control defects found during the reporting period, the company found and analyzed the causes of the defects one by one, and put forward practical rectification opinions and suggestions. As of the reporting date, the internal control defects are being gradually promoted according to the rectification plan, and the rectification has been basically completed.
4、 Description of other matters
None.
