Company code: Jihua Group Corporation Limited(601718) company abbreviation: Jihua Group Corporation Limited(601718)
Jihua Group Corporation Limited(601718)
Internal control evaluation report in 2021
Jihua Group Corporation Limited(601718) 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 standard system"), combined with the internal control system and evaluation methods of Jihua Group Corporation Limited(601718) (hereinafter referred to as the "company"), 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 the 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 internal control of the company's financial report, there were no major defects in the internal control of the financial report on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has guaranteed 3.5% in all major aspects in accordance with the requirements of the enterprise's internal control standard system and relevant regulations Whether significant 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: the headquarters of the company, some subordinate level 2 subsidiaries and level 3 subsidiaries. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The total assets of the units included in the evaluation scope accounted for 92.98% 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
3. The main operations and matters included in the scope of evaluation include:
Development strategy, triple and big, corporate governance, group control, human resources, investment activities, engineering projects, capital activities, asset management, procurement business, sales business, trade business, financial reporting, comprehensive budget, contract management, research and development, safety production and energy conservation and environmental protection, internal supervision, etc. 4. High risk areas of focus mainly include:
Investment activities, fund management, sales business, procurement business, engineering projects, asset management, related party transactions, financial reports, 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
Internal control system and internal control system of the company. 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 important major defect quantitative standard important defect quantitative standard general defect quantitative standard
level
Consolidated statement 0.5% ≥ 20% - 100% of the overall importance level 20% of the total assets of the overall importance level
Consolidated statement 0.5% ≥ 20% - 100% of the overall importance level 20% of the operating income of the overall importance level
Consolidated statement 5% ≥ 20% - 100% of overall importance level 20% of pre tax profit of overall importance level
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
\uf0d8 any degree of fraud found by the company's management;
\uf0d8 major internal control defects that have been found and reported to the management have not been corrected after a reasonable time;
Major defects \uf0d8 ineffective internal control environment; Defects affecting income trend;
\uf0d8 defects affecting the total amount of connected transactions exceeding the amount of connected transactions approved by shareholders;
\uf0d8 major misstatements found in external audit are not first discovered by the company;
\uf0d8 other defects that may affect the correct judgment of report users.
\uf0d8 major internal control defects that have been found and reported to the management are not rectified comprehensively and thoroughly after a reasonable time;
Important defects \uf0d8 imperfect internal control environment;
\uf0d8 accounting measurement is not timely and accurate, resulting in information lag or information error;
\uf0d8 there are serious defects in the financial system.
General defects \uf0d8 other internal control defects related to financial reporting.
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
Greater than or equal to consolidated report
The direct property loss is greater than or equal to the profit before tax in the consolidated statements × 1% less than consolidated report
Profit before tax × 5% and less than the profit before tax in the consolidated statements × 1%
Profit before tax × 5%
\uf0d8 it has been officially disclosed to the public and punished by the national government department \uf0d8 five people are seriously injured at one time as a penalty for the disclosure of the company's regular report, but there is no death within the company's regular report;
Negative impact; Negative impact caused by report disclosure \uf0d8 affected by the flow of personnel in key positions of provincial (including provincial) \uf0d8 enterprises; The following government departments are punished, but the potential negative impact is serious; \uf0d8 one person died at one time, and more than 5 people died at one time or were seriously injured if they did not report to the company regularly; Exposure has a negative impact. On the, or seriously injured 10 people, so as to be exposed by the media and have a negative impact
On; Surface influence.
\uf0d8 frequently exposed by the media
Journalism.
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
\uf0d8 lack of democratic decision-making procedures;
Major defects \uf0d8 major mistakes caused by decision-making procedures;
\uf0d8 violation of national laws and regulations and punishment;
\uf0d8 serious loss of middle and senior managers and senior technicians;
\uf0d8 negative news frequently appears in the media, involving a wide range;
\uf0d8 lack of system control or system failure of important business;
\uf0d8 major or important defects in internal control have not been rectified.
\uf0d8 democratic decision-making procedures exist but are not perfect;
\uf0d8 general errors caused by decision-making procedures;
\uf0d8 violation of internal rules and regulations of the enterprise, resulting in losses;
Important defects \uf0d8 serious loss of business personnel in key positions;
\uf0d8 negative news in the media, affecting local areas;
\uf0d8 defects in important business systems or systems;
\uf0d8 important or general defects in internal control have not been rectified.
\uf0d8 inefficient decision-making procedures;
\uf0d8 violation of internal regulations without loss;
\uf0d8 serious loss of business personnel in general posts;
General defects \uf0d8 negative news appears in the media, but the impact is small;
Defects in general business system or system;
\uf0d8 general defects have not been rectified;
\uf0d8 other 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
During the reporting period, it is not found that the company has two or more general internal control defects that affect the same accounting subject of the financial statements to reach the level of major or important defects. 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 the internal control of non-financial reporting during the reporting period.
□ yes √ no
2.2. Important defects
Whether the company found any significant defects in the internal control of non-financial reporting during the reporting period.
□ yes √ no 2.3 General defect
During the reporting period, the company was not found to have two or more general internal control defects affecting the achievement of the same non-financial goal
