Bear Electric Appliance Co.Ltd(002959)
Self evaluation report on internal control in 2021
Bear Electric Appliance Co.Ltd(002959) 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"), and in combination with the internal control system and evaluation methods of Bear Electric Appliance Co.Ltd(002959) (hereinafter referred to as the "company"), we have conducted a comprehensive inspection on the effectiveness of the implementation of the company's internal control system, And evaluated the effectiveness of the company's internal control as of December 31, 2021 (benchmark date of 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 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.
From the base date of the internal control evaluation report to the issuance date of the internal control evaluation report, there are no factors affecting the evaluation conclusion of the effectiveness of internal control.
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 the company and its subsidiaries. The main businesses and matters included in the evaluation scope include: organizational structure, development strategy, human resource management, social responsibility, corporate culture, capital activities, procurement business, marketing business, warehousing and logistics management, fixed assets management, bidding management, information disclosure, related party transactions, project management, financial report, cost management, information system Contract management, etc.
The high-risk areas of focus are financial reporting, capital activities, project management, bidding management, procurement business, marketing business, warehousing and logistics management, financial reporting, cost management, information system, contract management, etc.
The above units, businesses and matters included in the evaluation scope 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. According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company's scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished the internal control of financial reports from the internal control of non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company. The identification standards of internal control defects determined by the company are as follows:
1. The identification standard of internal control defects in financial reports shall be identified by a combination of qualitative and quantitative methods.
The quantitative evaluation criteria of the company's internal financial report are as follows:
General defects, important defects and major defects of the project
5% of total profit ≤ misstatement profit misstatement ≥ total profit indicator misstatement 5% of total profit and 10% of total profit
0.5% of total assets ≤ misstatementTotal assets indicator misstatement 0.5% of total assets, 1% of total assets misstatement ≥ 1% of total assets
0.5% of operating income ≤ misstatementMisrepresentation of operating revenue indicators 0.5% of operating revenue misrepresentation ≥ 1% of operating revenue 1% of operating revenue
The quantitative standard of internal control defects in financial reporting takes the profit, operating income and total assets of the consolidated financial statements as the measurement indicators.
The above standards directly depend on the importance of financial reporting misstatement that may be caused by the existence of internal control defects. This level of importance depends mainly on two factors:
(1) Whether the defect will lead to the failure of internal control to prevent or detect and correct the misstatement of financial statements in a timely manner;
(2) The amount of potential misstatement that may be caused by the defect alone or in combination with other defects.
1.2 the qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
1.2.1 defects with the following characteristics are major defects:
a. The company's control environment is invalid;
b. The company's directors, supervisors and senior managers commit fraud and cause significant losses or significant adverse effects to the company;
c. The certified public accountant finds that there is a material misstatement in the current financial report, but the misstatement is not found in the operation of the company's internal control;
d. The supervision of the company's audit committee and internal audit institutions on internal control is invalid;
e. Other defects that may cause the company to seriously deviate from the control objectives.
1.2.2 important defects: the severity of individual defects or combined with other defects is lower than that of major defects, but it may still cause the company to deviate from the control objectives.
1.2.3 control defects other than the above major defects and important defects are recognized as general defects.
2. Identification criteria for defects in internal control over non-financial reporting:
Identification standard of internal control defects in non-financial reports: it is identified by a combination of qualitative and quantitative methods.
2.1 the quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
General defects, important defects and major defects of the project
Loss amount 5% of total profit ≤ loss amount ≥ 5% of total profit index 5% amount 10% of total profit
Loss amount 0.5% of the total assets of the total assets ≤ loss amount ≥ the index of total assets
0.5% amount 1% of total assets
Loss amount 0.5% of operating revenue ≤ loss amount ≥ 0.5% of operating revenue indicator 1% of operating revenue
2.2 the qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
2.2.1 under the following circumstances, it is recognized that the company has major defects in internal control related to non-financial reporting:
a. The company's business activities seriously violate national laws and regulations;
b. Unscientific decision-making procedures lead to major decision-making mistakes and cause major property losses to the company; c. Massive loss of key management personnel or technical talents;
d. The frequent occurrence of negative news or reports has aroused great concern of the regulatory authorities and cannot be eliminated for a long time.
2.2.2 important defects: the severity of individual defects or combined with other defects is lower than that of major defects, but it may still cause the company to deviate from the control objectives.
2.2.3 general defects: other internal control defects that do not constitute major defects or important defects. (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 reporting, the company has no major defects and important defects in internal control of financial reporting 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
The company has no explanation of other major matters related to internal control.
Bear Electric Appliance Co.Ltd(002959) board of directors
April 8, 2022
