Company code: Guangzhou Development Group Incorporated(600098) company abbreviation: Guangzhou Development Group Incorporated(600098) Guangzhou Development Group Incorporated(600098)
Internal control evaluation report in 2021
Guangzhou Development Group Incorporated(600098) 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: Guangzhou Development Group Incorporated(600098) , Guangzhou Gas Group Co., Ltd., Guangzhou East Development Gas Co., Ltd., Guangzhou Development Group Incorporated(600098) Energy Logistics Group Co., Ltd., Guangzhou Zhujiang natural gas power generation Co., Ltd., Guangzhou Zhujiang Electric Power Fuel Co., Ltd., Guangzhou Development Group Incorporated(600098) new energy Co., Ltd. and Guangzhou Development Group Incorporated(600098) Group Finance 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 87
The total operating income of the units included in the evaluation scope accounts for 98% 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:
Organizational structure, human resources, risk business management, procurement and payment, sales and collection, asset management, investment management, financing management, capital and expense management, engineering management, safety, health and environment management, production management, budget management, tax management, contract management, file management, financial report, information disclosure, general control of IT system, inventory management and project development. 4. High risk areas of focus mainly include:
Strategic and investment risks, market risks, operational risks, etc. The business matters involved mainly include sales business, procurement business, production management, inventory management, project management, fund operation management, credit management, contract management, bidding management, safety, health and environment management, 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. （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 and the company’s internal control evaluation guidelines. 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
Total profit potential misstatement potential misstatement ≥ group consolidated pre tax potential misstatement of group consolidated pre tax profit 10% 5% of group consolidated pre tax profit ≤ potential misstatement 5% of group consolidated pre tax profit
And 10% of pre tax profit
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: defects with the following characteristics are recognized as major defects:
(1) Fraud by directors, supervisors and senior managers;
(2) There is a material misstatement in the current financial report, but the internal control fails to find the misstatement in the operation process; (3) The supervision of the company’s internal supervision department on the internal control of financial reports is invalid.
Important defects are identified as important defects if they have the following characteristics:
(1) Failing to select and apply accounting policies in accordance with accounting standards;
(2) Failure to establish anti fraud procedures and control measures related to financial reporting;
(3) There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.
General defects are other control defects other than the above major defects and important defects.
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
Direct property loss amount of direct property loss ≥ the direct property loss amount of the group’s consolidated pre tax profit 10% 5% of the group’s consolidated pre tax profit ≤ 5% of the consolidated pre tax profit of the direct property loss amount
of the group’s consolidated profit before tax
10%
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: defects with the following characteristics are recognized as major defects:
(1) The company lacks democratic and scientific decision-making procedures;
(2) Serious violation of national laws and regulations;
(3) The company’s important business lacks system control or system control fails.
Important defects are identified as important defects if they have the following characteristics:
(1) Large scale and long-term interruption of important business may lead the company to deviate from the control objectives in this field; (2) There are defects in the company’s important business system or system.
General defects are other control defects other than the above major defects and important defects.
（3） 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 any major defects in internal control over financial reporting during the reporting period
□ yes √ no 1.2 Important defects
Whether the company has any significant defects in internal control over financial reporting during the reporting period
□ yes √ no
1.3. General defect
There may be general defects in the internal control process in the daily operation. As the company’s internal control has a dual supervision mechanism of self-evaluation and internal audit, corrective actions will be taken once the defects are found and confirmed, so as to make the risk controllable and have no material impact on the company’s financial report. 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, does the company have 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
There may be general defects in the daily operation of the internal control process, because the company’s internal control has the dual functions of self-evaluation and internal audit After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in 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, does the company find any important defects in the internal control of non-financial reporting 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
According to the identification standard of the company’s internal control defects, the board of Directors believes that there are no significant defects and major defects in the internal control of financial reports and non-financial reports on the benchmark date of the internal control evaluation report. The company has maintained effective internal control in accordance with the relevant provisions of the enterprise’s internal control standard system. At the same time, there is no event affecting the effectiveness conclusion of the internal control evaluation report from the benchmark date of internal control evaluation to the date of report issuance.
In 2022, the company will continue to improve the construction of internal control system, sort out and optimize the business execution process, solidify the business process through information means, improve the standardization of business process operation, 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): Cai Ruixiong Guangzhou Development Group Incorporated(600098) April 9, 2022
