Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816)
Internal control evaluation report in 2021
Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, 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 the internal control 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 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
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.
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.
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 main units included in the scope of evaluation include:
– Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816)
-Jiangsu Jiangdong Diesel Engine Manufacturing Co., Ltd
-Jiangsu Jianghuai Power Co., Ltd
-Jiangsu Jiangdong Group Import and Export Co., Ltd
-Tibet Zhongkai Mining Co., Ltd
-Shanghai nongyi Information Technology Co., Ltd
The total assets of the units included in the evaluation scope account for 160.25% of the total assets in the company’s summary financial statements, and the total operating revenue accounts for 115.66% of the total operating revenue in the company’s summary financial statements.
The main businesses and matters included in the evaluation scope of the company include: Governance and operation norms of listed companies, personnel compensation, fund management, procurement management, asset management, sales management, research and development, engineering projects, guarantee business, financial report, comprehensive budget, contract management, information transmission and communication, information system, etc. The high-risk areas that the company focuses on mainly include fund management, procurement management, sales management, inventory management, contract management, 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 according to the enterprise internal control standard system.
The board of directors of the company has studied and determined the identification requirements of internal control defects applicable to the company according to the identification requirements of major defects, important defects and general defects of the enterprise’s internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, differentiated the internal control of financial report from the internal control of non-financial report, and combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, The specific recognition standard shall be consistent with that of previous years. The identification standards of internal control defects determined by the company are as follows:
1. Identification criteria for defects in internal control over financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
The company selects the operating profit before tax in the consolidated statements as the identification index of internal control defects in financial reports. When the impact of internal control defects reaches or exceeds 5% of the operating pre tax profit of the consolidated statements, it is recognized as a major defect; When the impact of internal control defects reaches or exceeds 2.5% but less than 5% of the operating pre tax profit of the consolidated statements, it is considered as an important defect; When the impact of internal control defects is less than 2.5% of the operating profit before tax in the consolidated statements, it is recognized as a general defect.
In principle, the identification indicators of major defects in the internal control of financial reports converge with the identification indicators of the importance level of the audit selection of financial statements.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Signs indicating that there may be significant defects in the company’s internal control over financial reporting include but are not limited to:
-Correction of published financial reports;
-The combination of one or more audit adjustments exceeds the audit importance level, and the corresponding audit adjustments are caused by the failure of internal control;
-Limitations of the company’s ability to prepare financial reports;
-Fraud by senior management;
-Key supervision functions (such as audit committee and board of supervisors) are invalid;
-Invalid control environment;
-Major defects in internal control over financial reports of previous years have not been effectively rectified;
-Other defects that may affect the correct judgment of report users.
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:
The company chooses the absolute amount of direct property loss caused to the enterprise as the identification index of internal control defects in non-financial reporting. When the absolute amount of direct property loss caused by internal control defects to the enterprise reaches or exceeds 10 million yuan, it is recognized as a major defect; When the absolute amount of direct property loss caused by internal control defects to the enterprise reaches or exceeds 5 million yuan, but less than 10 million yuan, it is recognized as an important defect; When the absolute amount of direct property loss caused by internal control defects to the enterprise is less than 5 million yuan, it is recognized as a general defect.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Signs indicating that there may be significant defects in the company’s internal control over non-financial reporting include but are not limited to:
-Unscientific decision-making procedures, such as wrong decision-making, lead to serious deviation from strategic objectives;
-Violation of national laws and regulations;
-Penalties imposed by regulatory authorities;
-Frequent negative news in the media;
-Failure of institutional and systematic control of important business processes;
-Major defects in internal control over non-financial reports in previous years have not been effectively rectified;
-Other circumstances that have a significant impact on the company.
(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 reports, no major defects and important defects in the company’s internal control over financial reports were found 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 and important defects in the company’s internal control over non-financial reports were found during the reporting period.
4、 Description of other major matters related to internal control
None.
Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) Chairman: Xiang Zhipeng
March 25, 2002
