Zhejiang Sanfer Electric Co.Ltd(605336)
Internal control evaluation report in 2021
Zhejiang Sanfer Electric Co.Ltd(605336) 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 the internal control evaluation report to the date of issuance of the 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 Zhejiang Sanfer Electric Co.Ltd(605336) , Hangzhou shuaifeng Technology 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 is 99.99
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:
Organizational structure, development strategy, human resources, corporate culture, capital activities, procurement business, sales business, tax management, production management, asset management, research and development, engineering projects, financial product management, contract management, related party transactions, financial reports and information disclosure, internal audit, internal information transmission, information system management, etc. 4. High risk areas of focus mainly include:
Fund activities, procurement business, sales business, asset management, raised funds management, financial products management and other matters. 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
nothing
（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 enterprise's internal control standard system, the company's internal control management system, internal control manual and other relevant provisions. 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 total profit misstatement ≥ 5% of total profit, 3% of total profit ≤ the amount of misstatement ＜ other control defects other than 5% of total profit of major defects and important defects
The amount of misstatement of total assets ≥ 0.5% of total assets ≤ 0.3% of total assets ≤ other control defects except that the amount of misstatement is less than 0.5% of total assets
The amount of misstatement of operating revenue ≥ 1% of operating revenue and 0.5% of total operating revenue ≤ other control defects except that the amount of misstatement of major defects and important defects is less than 1% of operating revenue
Note: if the above standards are met in the same time, they are applicable in different cases.
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 serious fraud of directors, supervisors and senior management, causing heavy losses and adverse effects to the company; ② Material misstatement in the current financial report found by the certified public accountant but not identified by the company's internal control;
③ The supervision of the company's audit committee and internal audit institutions on the internal control of financial reporting is completely ineffective;
④ Major defects are not rectified in a reasonable time;
⑤ Other major defects that may affect the correct judgment of report users.
Significant defects ① failure to select and apply accounting policies in accordance with generally accepted accounting standards;
② Failure to establish anti fraud procedures and control measures;
③ The accounting treatment of unconventional or special transactions has not established corresponding control mechanism or implemented and there is no corresponding compensatory control;
④ There are one or more defects in the process control of the financial report at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the true and complete goal.
General defects are other control defects other than the above 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
The amount of misstatement of total profit ≥ 5% of total profit ≤ 3% of total profit ≤ the amount of misstatement ＜ in the case of major defects and important defects
Other control defects other than 5% of total profit
The amount of misstatement of total assets ≥ 0.5% of total assets ≤ 0.3% of total assets ≤ other control defects except that the amount of misstatement is less than 0.5% of total assets
The amount of misstatement of operating revenue ≥ 1% of operating revenue and 0.5% of total operating revenue ≤ other control defects except that the amount of misstatement of major defects and important defects is less than 1% of operating revenue
Note: if the above standards are met in the same time, they are applicable in different cases.
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 unscientific decision-making procedures of the company, causing heavy losses and adverse effects to the company;
② Failing to handle relevant matters in accordance with procedures and authorization, resulting in heavy losses;
③ Serious loss of middle and senior managers and senior technicians of the company;
④ Negative news frequently appears in the media, covering a wide range and the negative impact has not been eliminated;
⑤ The company's important business lacks system control or the system is completely ineffective;
⑥ Major defects in the company's internal control have not been rectified in a reasonable period;
⑦ Serious violation of national laws and regulations;
⑧ Other situations that have a significant negative impact on the company.
Important defects ① important mistakes caused by unscientific decision-making procedures of the company;
② Failing to handle relevant matters in accordance with procedures and authorization, resulting in great losses;
③ Serious loss of business personnel in key positions of the company;
④ Negative news in the media has spread to some areas, which has a certain impact on the company;
⑤ The company's important business control system or system has important defects;
⑥ Major defects in the company's internal control have not been rectified in a reasonable period;
⑦ Other situations that have a significant negative impact on the company.
Other non-financial reporting 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
nothing
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
None 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 organized and carried out internal control evaluation around the five elements of internal control according to the enterprise internal control standard system and other internal control supervision requirements, combined with the relevant internal control management system of the company. Meanwhile, the company hired Ernst & Young Huaming Certified Public Accountants (special general partnership) to conduct an independent audit on the implementation of the company's internal control. The existing internal control system of the company can meet the management requirements of the company. A systematic internal control system and necessary internal supervision mechanism have been established from the company level to all business levels, which can
