Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd
About Pengdu Agriculture & Animal Husbandry Co.Ltd(002505)
Verification opinions of internal control evaluation report in 2021
Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd. (hereinafter referred to as " Shenwan Hongyuan Group Co.Ltd(000166) underwriting and recommendation" or "recommendation agency") acts as a recommendation agency for non-public offering of shares by Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) (hereinafter referred to as " Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) " or "company"), According to the requirements of laws and regulations such as the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 13 - recommendation business, and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board, the self-evaluation report of the company's internal control in 2021 was reviewed and verified, The details are as follows:
1、 Responsibilities of the board of directors
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, on the benchmark date of the internal control evaluation report (December 31, 2021), the company has no major defects in the internal control over financial reporting. 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 has no major defects in the company's internal control over non-financial reports on the benchmark date of the internal control evaluation report.
There is no significant change in internal control that has a substantial impact on the conclusion of control evaluation between the benchmark date of internal control evaluation report and the date of issuance of internal control evaluation report.
3、 Overall situation 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. The main units included in the evaluation scope include: Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) parent company and holding subsidiaries. The units included in the evaluation scope account for 100% of the total consolidated assets of the company, and the total operating revenue accounts for 100% of the total consolidated operating revenue.
According to the principle of importance, the internal control evaluation of the company is carried out around five elements: internal control environment, risk assessment, control activities, information and communication and internal supervision. The main businesses and matters included in the evaluation scope include: Sales and collection, procurement and payment, production and inventory management, human resources management, fixed assets management, contract management, foreign investment and guarantee, major project management, tax management, fund management, hedging business, financial settlement, financial report and information disclosure, general control of information system, production safety management, etc.
The high-risk areas of focus mainly include foreign investment, inventory, major project management, fund management, hedging, contract conclusion, information disclosure, production safety management, etc.
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, and there are no major omissions.
4、 Defects and identification of internal control
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and the company's internal control management system and management manual.
The board of directors of the company studied and determined the specific identification standards of internal control defects applicable to the company according to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, combined with the factors such as the company's scale, industry characteristics, risk preference and risk tolerance, respectively. The identification standards of internal control defects determined by the company are as follows:
(I) identification criteria for defects in internal control over financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
General defects of important items important defects major defects
Potential misstatement of net profit potential misstatement 2% of net profit ≤ potential misstatement potential misstatement ≥ 2% of net profit 5% of net profit
Potential misstatement of total assets potential misstatement ＜ 0.5% of total assets ≤ potential misstatement ≥ 0.5% of total assets misstatement ＜ 1% of total assets
Potential misstatement of operating revenue ＜ 0.5% of operating revenue ≤ potential misstatement ≥ 0.5% of operating revenue ＜ 1% of 1% of operating revenue
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
1. Identification of major defects:
(1) The company's control environment is invalid;
(2) Fraud by directors, supervisors and senior managers of the company;
(3) The certified public accountant finds that there is a material misstatement in the current financial report, but the company's 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;
(5) Other defects that have a significant impact on the correct judgment of users of financial statements.
2. Identification of major defects:
Defects alone or together with other defects have a significant negative impact on the realization of the company's financial report and related information authenticity and integrity control objectives.
3. Identification of general defects: it does not constitute other control defects other than the above major defects and important defects (II) identification standard of internal control defects in non-financial reports
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
General defects of important items important defects major defects
Financial loss financial loss ＜ 0.5% of operating income ≤ financial loss ＜ operating financial loss ≥ 0.5% of operating income and 1% of 1% of income
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
1. Identification of major defects:
(1) The company's business activities seriously violate national laws and regulations;
(2) Unscientific decision-making procedures lead to major decision-making mistakes and cause major property losses to the company; (3) Massive loss of key management personnel or technical talents;
(4) Major accidents in product and service quality;
(5) 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. Identification of important defects: individual defects or together with other defects have an important negative impact on the realization of the company's operation and management legal compliance, asset safety, improving operation efficiency and effect, promoting the realization of development strategy and other control objectives.
3. Identification of general defects: it does not constitute other control defects other than the above major defects and important defects. 5、 Internal control defects and rectification
(I) identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reports, the company has no major defects in internal control over financial reports during the reporting period.
(II) 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, the company has no major defects and important defects in internal control of non-financial reports during the reporting period.
6、 Main verification procedures of the recommendation institution
The recommendation institution communicates with the company's directors, supervisors, senior managers, finance department, audit department and accounting firm by consulting the materials, resolutions and other relevant documents of the three meetings of Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) shareholders' meeting, the board of directors and the board of supervisors, as well as the company's business and management systems, information disclosure documents and the 2021 internal control evaluation report issued by the company, Checked the establishment and implementation of Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) internal control system.
7、 Verification opinions of the recommendation institution
After verification, the sponsor believes that: Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) corporate governance structure is relatively sound, and the existing internal control system and implementation meet the requirements of relevant laws, regulations and normative documents. The recommendation institution has no objection to the 2021 internal control evaluation report issued by the board of directors of the company.
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Sponsor representative:
Cai Ming, Hou Haitao
Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd. mm / DD / yyyy
