Zhiyang Innovation Technology Co.Ltd(688191)
Internal control evaluation report in 2021
Zhiyang Innovation Technology Co.Ltd(688191) 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 Zhiyang Innovation Technology Co.Ltd(688191) and all subsidiaries included in the consolidated financial statements of 2021. 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, control measures, information and communication, inspection and supervision. 4. High risk areas of focus mainly include:
Strategic risk, capital risk, market risk, investment risk, quality risk, safety production risk, human resources risk and technology risk. 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 according to the enterprise internal control standard system and other internal control supervision requirements. 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 total net profit ≥ 10% of total net profit ≤ 5% of total net profit ≤ misstatement ＜ 5% of total net profit ＜ 10% of total net profit
Potential misstatement of total assets ≥ 2% of total assets ≤ 1% of total assets misstatement of assets 1% of total assets
2% of the total reported output
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. Fraud of directors, supervisors and senior managers is found, which seriously affects the standardized operation of the company;
2. The company corrects the published financial statements due to major errors and other reasons;
3. The certified public accountant finds that there is a material misstatement in the current financial statements, but the internal control fails to find the misstatement in the operation process;
4. The supervision of the company’s audit committee and internal audit institutions on internal control is invalid.
Significant defects 1. Accounting policies are not selected and applied in accordance with generally accepted accounting standards or are not implemented and there is no corresponding compensatory control; 2. For the control of the preparation process of the final financial report, there are defects or a combination of defects that can not reasonably ensure the authenticity and accuracy of the financial statements.
Other internal control defects in financial reporting 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 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
Potential loss potential loss ≥ 5% of total net profit ≤ potential loss potential loss 10% of total net profit loss 10% of total net profit
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. The company’s business activities seriously violate national laws and regulations;
2. The frequent exposure of negative media news has caused significant damage to the company’s reputation;
3. Serious loss of middle and senior managers and senior technicians;
4. Lack of institutional control or systematic failure of important business;
5. The results of internal control evaluation, especially major defects or important defects, have not been rectified.
Major defects 1. The company was slightly punished for violating national laws and regulations;
2. Serious loss of business personnel in key positions;
3. Negative news in the media, affecting local areas;
4. Defects in important business system or control system;
5. Important defects in internal control have not been rectified.
General defects 1. Violation of internal rules and regulations of the enterprise, but no loss;
2. Serious loss of business personnel in general posts;
3. Negative news appears in the media, but the impact is small;
4. Defects in general business system or system;
5. General defects in internal control have not been rectified.
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
None 1.4 The company’s internal control report has not been rectified on the benchmark date of √ 1.5 √ yes 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
In this year, the company followed the internal control objectives of ensuring the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, established relevant internal control systems and effectively implemented them. In the next year, the company will continue to strengthen the awareness of internal control, strengthen the level of internal control management, improve business efficiency and effect, and promote the realization of development strategy in daily operation and management activities in accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements. 3. Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Liu Guoyong Zhiyang Innovation Technology Co.Ltd(688191) April 20, 2022
