Pengdu Agriculture & Animal Husbandry Co.Ltd(002505)
Internal control evaluation report in 2021
According to 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 internal control system and evaluation methods of Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) (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).
1、 Statement of responsibility of the board of directors
The board of directors and all directors 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 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, on the benchmark date of the internal control evaluation report, 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、 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 scope of evaluation include
Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) , Shanghai julianeng Trading Co., Ltd., Shanghai Zhenmu Trading Co., Ltd., Anyuan Dairy Co., Ltd., milk New Zealand holding limited, land tahi Farm Group Limited, milk New Zealand Management Limited, bluetag livestock trading limited, shanghaidida Trading Co., Ltd., Shanghai Yijing Investment Management Co., Ltd., Dakang (Hong Kong) Holding Co., Ltd., Dakang International (Lux) s. à R.L HDPF Participações Ltda.、 Dakang FiagrilParticipações S.A.、Fiagril Ltda.、 Agrilex Limited、Green Ventures Industria deBiodiesel Ltda、Dakang Fiagril Administração de Bens S.A.、Dakang (HK) SouthAmerica Investment Limited、Dakang (Lux) Investment S.àr.l、DKBA ParticipaçõesLtda.、 Belagrícola Comércio e Representação deProdutos Agrícolas S.A.、BelaSementes Indústria e Comércio de Sementes LTDA.、 J.J.C Corretora de Grãos S/SLTDA、Bela Safra Comércio e Representações de Produtos Agrícolas LTDA、AcengeElaboração e Gestão de Projetos LTDA、DKBR Holding LTDA.、 DKBR Trading S.A.、Agrispec Soluções Administrativas Ltda.、 Farmbits Soluções Digitais Ltda.、 Landcoadministradora de Bens e imoveis S.A., DBR investmentos e servi ç OS LTDA, dbmpaticipa çõ es societ á RIAS LTDA, DBP minera çã o LTDA, Greenfield ind ú stria eCom é rcio de fertilizantes LTDA, Niuben asset management (Shanghai) Co., Ltd., Ningbo haoyida Trading Co., Ltd., Anhui Anxin (Woyang) animal husbandry Development Co., Ltd., Anhui Anxin Biotechnology Co., Ltd Anhui Anxin Food Co., Ltd., Guangxi Anxin animal husbandry Co., Ltd., Hefei Anxin Yun pasture Information Technology Co., Ltd., Tumushuke Anxin animal husbandry Co., Ltd., Bachu Anxin animal husbandry Co., Ltd., Qingdao Dakang Xuelong animal husbandry Co., Ltd., Shanghai Xinsheng International Trade Co., Ltd., Dakang international trade (Hong Kong) Co., Ltd., Ruili penghe Agricultural Food Development Co., Ltd Dehong penghe Agricultural Development Co., Ltd., Shanghai penghe Supply Chain Management Co., Ltd., Shanghai runbiao Trade Co., Ltd., Kangrui (Myanmar) agriculture & Livestock Development Co., Ltd., Hongyun (Myanmar) agriculture & Livestock Development Company Limited, Hongkang (Myanmar) agriculture & Livestock Development Company Limited, Anhui pengxu International Trade Co., Ltd., Zhi yinginvestment limited Dongying Pengxin Real Estate Co., Ltd. and other companies, the units included in the evaluation scope account for 100% of the company's total consolidated assets, 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 Control activities (including transaction authorization control, responsibility division control, voucher and record control, asset contact and record use control, independent audit control, electronic information system control, etc.), supervision and implementation of control.
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.
（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 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:
1. 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:
General defects of important items important defects major defects
Potential misstatement of net profit potential misstatement ＜ 2% of net profit potential misstatement ≥ 2% of net profit potential misstatement ＜ 5% of net profit
Potential misstatement of total assets ＜ 0.5% of total assets ≤ potential misstatement ≥ 0.5% of total assets misstatement ＜ 1% of total assets misstatement
Potential misstatement of operating revenue ＜ 0.5% of operating revenue ≤ potential misstatement ≥ 0.5% of operating revenue misstatement ＜ 1% of operating revenue misstatement
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.
2. 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:
General defects of important items important defects major defects
Financial loss financial loss ＜ 0.5% of operating revenue ≤ financial loss ≥ 0.5% of operating revenue loss ＜ 1% of operating revenue 1% of revenue
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) Defects that have a negative impact on the realization of the company's strategic development and management efficiency or other important effects on the realization of the company's legal development and management efficiency.
(3) Identification of general defects: it does not constitute other control defects other than the above major defects and 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 reports, the company has no major defects in internal control over financial reports 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, the company has no major defects and important defects in internal control of non-financial reports during the reporting period.
Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) board of directors April 28, 2022
