Zhongyin Babi Food Co.Ltd(605338)
Internal control evaluation report in 2021
Zhongyin Babi Food Co.Ltd(605338) 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 benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
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: Zhongyin Babi Food Co.Ltd(605338) , Zhongyin babi catering management (Shanghai) Co., Ltd., Guangzhou Liangxing Catering Service Co., Ltd., Shanghai ajingma Network Technology Co., Ltd., Zhongyin babi catering management (Beijing) Co., Ltd., Nanjing Zhongmao Food Co., Ltd., Shanghai Kesheng new materials Co., Ltd., Jiangsu amber Star Food Co., Ltd., Hangzhou Zhongba Catering Management Co., Ltd Nanjing shengyiyin (Shanghai) Catering Management Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
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
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, accounting for 3.5% The main operations and matters included in the scope of evaluation include:
Corporate governance, organizational structure, internal audit, development strategy, human resources, social responsibility, fund management, investment management, procurement management, fixed assets management, intangible assets management, inventory management, sales management, external guarantee management, financial report, related party transaction management, contract management, seal management, etc. 4. High risk areas of focus mainly include:
Corporate governance, fund management, major procurement activities and sales business, 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
None (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 and the guidelines for enterprise internal control evaluation. 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
The amount of misstatement of total assets ≥ the amount of misstatement of total assets in consolidated statements 1% 0.5% of total assets in consolidated statements ≤ the amount of misstatement 0.5% of total assets in consolidated statements
1% of total reported assets
The amount of misstatement of total profits ≥ the amount of misstatement of total profits of consolidated statements 5% 2.5% of total profits of consolidated statements ≤ the amount of misstatement 2.5% of total profits of consolidated statements
5% of the total profit of the statement
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
Major defects (1) ineffective internal control environment of the company;
(2) Fraud by directors, supervisors and senior managers;
(3) The supervision of the audit committee and internal audit institutions on internal control is invalid;
(4) The certified public accountant finds that there is a material misstatement in the current financial report, but the internal control fails to find the misstatement in the operation process;
(5) Violation of national laws and regulations and punishment.
Important defects: (1) the company’s internal control environment is imperfect;
(2) Failure to select and apply accounting policies in accordance with generally accepted accounting standards;
(3) The rectification of major internal control defects that have been found and reported to the management is not comprehensive and thorough after a reasonable time.
General defects and other internal control defects that do not constitute major defects or 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
The amount of misstatement of direct property loss ≥ the total profit of the consolidated statements ＜ 5% 2.5% of the total profit of the consolidated statements ＜ 2.5% of the total profit of the consolidated statements ＜ the amount of misstatement ＜ 2.5% of the total profit of the consolidated statements
5% of the total profit of the statement
Description: None
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
Major defects (1) lack of democratic decision-making procedures or unscientific decision-making procedures, resulting in major mistakes in decision-making;
(2) Failure of internal control over information disclosure, resulting in the company being publicly condemned by the regulatory authorities;
(3) Negative news in the media is frequent, involving a wide range and having a bad impact;
(4) Irreparable environmental damage or occupational health hazards;
(5) Lack of institutional control or systematic failure of important business.
Important defects: (1) the decision-making procedure is not perfect, and there are general decision-making mistakes;
(2) Violating the internal rules and regulations of the enterprise and causing losses;
(3) Negative news in the media, affecting local areas;
(4) Moderate adverse impact on environmental health or occupational health;
(5) After major defects in internal control are found, the rectification is not comprehensive or thorough.
General defects and other internal control defects that do not constitute major defects or 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
According to the above identification standards of internal control defects in financial reporting, the company found no general defects in internal control of financial reporting during the reporting period. 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 risks that may arise from the general defects of internal control over non-financial reporting are within the controllable range and have been rectified, which does not have a material impact on the operation of the company’s internal control system. 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
The company’s internal control system operated well in 2021. The company and its subsidiaries carry out internal control according to the plan, timely identify the defects in internal control, and continuously improve the level of internal control through planning, implementation, inspection and rectification. In 2022, the company will continue to deepen the construction of internal control system, optimize the internal control environment, improve various internal control systems, standardize the implementation of internal control system, strengthen the supervision and inspection of the implementation of internal control system, improve the level of internal control management, effectively prevent various risks and promote the healthy and sustainable development of the company. 3. Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Liu Huiping Zhongyin Babi Food Co.Ltd(605338) April 7, 2022
