Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) : self evaluation report on internal control in 2021

Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068)

Self evaluation report on internal control in 2021

Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) 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 Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) (hereinafter referred to as the "company") 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 evaluation scope include Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) and Zhejiang Shengtang Environmental Protection Technology Co., Ltd., a wholly-owned subsidiary. 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 scope of evaluation include: 1. Internal environment

(1) Governance structure

In accordance with the company law of the people's Republic of China (hereinafter referred to as the company law), the articles of association of Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) company (hereinafter referred to as the articles of association) and other relevant laws and regulations, the company has established a corporate governance structure of "three boards and one layer" of the general meeting of shareholders, the board of directors, the board of supervisors and the management level, and formulated the rules of procedure and working rules of each meeting. The board of directors shall be responsible to the general meeting of shareholders and exercise the company's business decision-making power according to law; The board of supervisors shall be responsible to the general meeting of shareholders and supervise the directors, general manager and other senior managers of the company to perform their duties according to law; The board of directors is responsible for the implementation of the resolutions of the general meeting of shareholders and the management of the enterprise. The three committees and the first floor perform their respective duties, coordinate, restrict and standardize the operation. Among them, the board of directors has four special committees: Strategy Committee, audit committee, nomination committee and salary and assessment committee. The above-mentioned institutions have rules of procedure or working system corresponding to their functions to regulate their authority and responsibilities. The company has established and improved the corporate governance structure of the company. Clarify the responsibilities and authorities in decision-making, implementation and supervision, and form a scientific and effective division of responsibilities and check and balance mechanism to ensure the standardized operation of the company's management.

(2) Organizational structure of the company

The company has set up the general meeting of shareholders, the board of directors, the board of supervisors, the general manager and other organizations in accordance with the provisions of the company law and the articles of association. The general meeting of shareholders is the authority of the company. The organizational structure of the company is as follows:

Each functional department has a clear division of labor, mutual coordination, mutual supervision and mutual restriction. An appropriate level of reporting system is established, which optimizes the allocation of resources, improves work efficiency and forms an overall sense of control.

(3) Human resources policy and Practice

Talent is the key to enterprise development. The company has established a human resources department. According to relevant national laws and regulations and in combination with the actual situation of the company, the company has formulated employee management system, salary system and performance appraisal management system, which comprehensively stipulates attendance, work discipline, labor relations, employee induction management, employee training management, salary and welfare, Standardized the labor relations and personnel management of the company. The company implements the full staff labor contract system, and strictly controls the recruitment and selection of talents by standardizing the recruitment standards to ensure the employment of excellent talents; Regular training for new employees and on-the-job employees, strengthening employee training, paying attention to assessment, clarifying the path of employee promotion and transfer, effectively protecting the legitimate rights and interests of employees and helping their career development. The company respects every employee, encourages innovation, advocates integrity, advocates unity, friendship, harmony and mutual help, and establishes a harmonious working environment.

(4) Corporate culture

The company advocates the values of innovation, integrity, contribution and sharing, and actively conveys the company's values and corporate culture to employees: the pursuit of excellence and quality-oriented; Fairness and justice, performance first; Proactive service, customer first; Simple, open and responsible; Team trust and grow together. The company is committed to becoming a modern enterprise with first-class talent team and high cohesion.

(5) Internal audit

The company has set up an audit department and equipped with full-time auditors. The audit department is directly responsible to the audit committee. Under the guidance of the audit committee, it audits and supervises the establishment and implementation of the company's internal control system, the company's operation and financial situation, and independently exercises the power of audit supervision.

(6) Social responsibility

In order to ensure the sustainable and long-term development of the company, the company has actively fulfilled its social responsibilities and formulated and implemented a series of policies and measures in terms of safe production, environmental protection, protection of shareholders' rights and interests, care for employees and giving back to the society. The company has always attached importance to the protection of employees' production environment and the improvement of their living conditions.

2. Risk assessment

According to the strategic objectives and development ideas, combined with the characteristics of the industry, the company has established a more systematic and effective risk assessment system. The company continuously and effectively identifies and evaluates the possible risks arising from the possible changes in the regulatory and business environment, the addition of new employees, the use of new information systems, or the upgrading of the original systems, the rapid development of business, new technologies, new accounting standards, etc., and timely formulates corresponding risk response measures.

3. Control measures

In order to 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. The operating personnel can prepare relevant vouchers in time when executing transactions. The prepared vouchers are sent to the accounting department in time for recording, and the registered vouchers are filed in order. Various transactions must be recorded (e.g. employee salary records, sales invoices, etc.), and the records must be compared with the corresponding entries independently.

(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 sets up a special internal audit department to review and assess monetary funds, securities, vouchers and account books, material procurement, payment, salary management, etc.

(6) Electronic information system control: the company has formulated a relatively strict electronic information system control system, and has done more work in the development and maintenance of electronic information system, data input and output, document storage and safekeeping, etc.

（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 relevant provisions of the enterprise's internal control standard system and its supporting guidelines and in combination with the actual situation of the company.

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:

Defect identification standard

Category financial report non-financial Report

The qualitative standard has the following characteristics as major defects: ① the company has the following characteristics as major defects: ① the operating company corrects the published financial report; ② The company's directors have seriously violated national laws and regulations; ② Accidents in decision-making procedures and fraud of supervisors and senior managers; Major mistakes have been made and the company's sustainable operation has been seriously challenged; ③ Those found by certified public accountants but not controlled by the company's internal control ③ serious loss of senior managers and core technicians; Identify major misstatements in the current financial report; ④ ④ lack of system control or system failure of important business, lack of internal control, and major or important defects have not been rectified; Lack of effective compensation measures; ⑤ Results of internal control evaluation ⑤ the company's audit committee and internal audit institutions have major internal defects and have not been rectified; ⑥ Other supervision on the company's production control is invalid. Significant negative impact

Those with the following characteristics are important defects: ① those without the following characteristics are important defects: ① general errors in the selection and application of accounting procedures in the decision-making process in accordance with generally accepted accounting standards; ② Strict policies for the loss of personnel in key business posts; ② Failure to establish anti fraud procedures and control measures; Heavy; ③ There are important deficiencies in the control of important business systems or systems. ③ there is a trap in the control of the financial reporting process at the end of the period; ④ The evaluation results of internal control, especially the important defects that have not been identified or multiple defects and can not reasonably guarantee the rectification of the prepared financial statements.

The statement achieves the goal of authenticity and accuracy; ④ The general defects of the audit committee are as follows: ① the efficiency of the supervision and order of internal control by the decision-making committee and the internal audit organization is not high; ② The loss of personnel in general business posts is strictly due to important defects. Heavy; ③ Defects in general business system; ④ General defects refer to the failure to rectify the above major defects or important defects.

Other internal control defects.

Quantitative standard the quantitative standard takes the total assets, total revenue and the total evaluation profit of non-financial reporting internal control defects determined by the company as the measurement indicators. The quantitative standard of price is consistent with the evaluation standard for the internal control of financial report determined by the company when the amount of misstatement in the balance sheet is greater than or equal to the asset system defect. See left for details.

5% of the total output, or the amount of misstatement in the income statement is greater than or

5% of the total revenue or the amount of misstatement in the income statement is greater than

Or equal to 5% of the total profit, it is recognized as a major shortage

Sink;

When the amount of misstatement in the balance sheet is greater than or equal to the amount of assets

2% but less than 5% of the total output, or the income statement is misstated

The amount is greater than or equal to 2% of the total revenue, but less than

5%, or the amount of misstatement in the income statement is greater than or equal to the total profit

2% of the total amount, but less than 5%, it is recognized as an important deficiency

Sink;

When the amount of misstatement in the balance sheet is less than the total assets

2%, or the amount of misstatement in the income statement is less than the total income

2%, or the amount of misstatement in the income statement is less than 2% of the total profit

When, it is recognized as a general defect.

(III) identification and rectification of internal defects

1. Identification and rectification of internal control defects in financial reporting

According to the above financial statements