Company code: Zhejiang Dayuan Pumps Industry Co.Ltd(603757) company abbreviation: Zhejiang Dayuan Pumps Industry Co.Ltd(603757) Zhejiang Dayuan Pumps Industry Co.Ltd(603757)
Internal control evaluation report in 2021
Zhejiang Dayuan Pumps Industry Co.Ltd(603757) 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 the company's (hereinafter referred to as the company's) internal control system and evaluation methods, and 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 internal control evaluation report). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the base date of internal control evaluation report to the date of issuance of 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. 5. Whether the internal control audit opinion is consistent with the company's evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company's internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include Zhejiang Dayuan Pumps Industry Co.Ltd(603757) , Hefei Xinhu canned motor pump Co., Ltd., Anhui Xinhu canned motor pump Co., Ltd. and Neixiang Xinhu Pump Industry Co., Ltd. [note]
Note: Neixiang Xinhu Pump Industry Co., Ltd. is a company invested and established by the subsidiary Hefei Xinhu canned motor pump Co., Ltd. 2 Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company's consolidated financial statements 100
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company's consolidated financial statements
3. The main operations and matters included in the scope of evaluation include:
Internal environment, risk assessment, internal structure, internal supervision, organizational structure, development strategy, human resources, social responsibility, corporate culture, capital activities, procurement business, asset management, sales business, research and development, engineering projects, guarantee business, financial report, comprehensive budget, contract management, internal information transmission, information system, etc The high-risk areas of focus mainly include:
Capital activities, procurement business, asset management, sales business, comprehensive budget, contract management, financial reporting, etc. 5. 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. Is there any major omission □ yes √ No 6 Is there a statutory exemption
□ yes √ No 7 Other explanatory matters
（2） 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 company's internal control system and the company's internal control self-evaluation system. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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. 2. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Potential misstatement of operating revenue ≥ 2% of operating revenue ≤ 1% of operating revenue potential misstatement 1% of operating revenue 2% of operating revenue
Potential misstatement of total assets ≥ 1% of total assets ≤ 0.5% of total assets ≤ potential misstatement 1% of total assets 0.5% of total assets
Description: None
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
A. Invalid control environment;
B. Fraud by directors, supervisors and senior managers;
Major defect C. the external audit found that there was a major misstatement in the financial statements, but the internal control failed to find the misstatement in the operation process;
D. Make misstatement correction for major errors in the announced financial report;
E. The supervision of the audit committee and the audit department over the financial report is invalid.
A. Failure to select and apply accounting policies in accordance with GAAP;
B. Fraud of personnel in key positions;
Significant defect C. the external audit found that there were significant misstatements in the financial statements, but the internal control failed to find such misstatements in the operation process;
D. Errors in financial reports submitted during the reporting period occur frequently;
E. Other important defects that may affect the correct judgment of report users.
General defects are internal control defects other than major defects and important defects.
Note: none 3 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Total profit the direct loss that may be caused by such defects accounts for 5% of the total profit and the loss accounts for 1% of the total profit (including the loss less than 1% of the total profit)
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
A. Violation of national laws and regulations or public condemnation by the stock exchange; B. Major production safety accidents; C. The loss of middle and senior managers is serious; D. Negative news frequently appears in the media, involving a wide range and major defects, and the negative impact has not been eliminated; E. The company's important business system is missing or does not operate effectively; F. Lack of collective decision-making procedures; G. Major defects in the company's internal control have not been rectified; H. Other situations that have a significant negative impact on the company.
A. Being criticized by the stock exchange for violating relevant regulations; B. Serious loss of business personnel in key positions; C. Major production safety accidents due to major defects; D. Negative news in the media has spread to local areas and the negative impact has not been eliminated; E. There are defects in the company's important business system; F. Collective decision-making procedures exist but are not perfect; G. Major defects in the company's internal control have not been rectified; H. Other circumstances that have a great adverse impact on the company.
General defects are other control defects except major defects and important defects.
Note: none (III) Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
The company's internal control has a self-evaluation and supervision mechanism. According to the above internal control defect identification standards, once the general defects related to financial reports found during the reporting period are found and confirmed, the company will formulate rectification plans and take corrective actions to ensure the effectiveness of internal control. 1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified □ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company has any important defects in the internal control of financial reporting that have not been rectified □ yes √ No 2 Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period □ yes √ no
2.2. Important defects
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.3 General defect
The company's internal control has a self-evaluation and supervision mechanism. According to the above internal control defect identification standards, once the general defects related to non-financial reports found during the reporting period are found and confirmed, the company will formulate a rectification plan and take corrective actions to ensure the effectiveness of internal control. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in the non-financial reporting internal control that have not been rectified □ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company finds any important defects in non-financial reporting internal control that have not been rectified □ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year □ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
√ applicable □ not applicable
During the reporting period, the company's internal control system was effectively implemented, and the company and its subsidiaries strictly implemented the internal control system. The internal control system was complete and effective, reaching the goal of the company's internal control. In 2022, the company will continue to deepen the construction of internal control system and continuously improve internal control in accordance with the requirements of internal control standard system; At the same time, according to the changes of the company, strengthen the inspection and supervision of internal control, so as to promote the sustainable and high-quality development of the company. 3. Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Han Yuanfu Zhejiang Dayuan Pumps Industry Co.Ltd(603757) April 7, 2022
