Henan Huaying Agricultural Development Co.Ltd(002321)
Self evaluation report on internal control in 2021
Henan Huaying Agricultural Development Co.Ltd(002321) all shareholders:
In accordance with the basic norms of enterprise internal control jointly issued by the Ministry of finance, the CSRC and other departments and the Shenzhen Stock Exchange self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board, combined with Henan Huaying Agricultural Development Co.Ltd(002321) (hereinafter referred to as the "company") internal control system and evaluation methods, 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、 Important statement
It is the responsibility of the board of directors to establish and improve the internal control system and the effectiveness of its internal control according to the provisions of the company's internal control report. 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.
2、 Internal control evaluation conclusion
According to the identification standard of the company's internal control defects in financial reporting, the company has no major defects in the internal control of 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. At the same time, according to the identification standard of the company's internal control defects in non-financial reports, the company found no major defects in the internal control of non-financial reports on the benchmark date of the internal control evaluation report. 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. 3、 Internal control evaluation
(I) evaluation scope of internal control
In accordance with the regulatory requirements and in combination with the characteristics of the company's internal risk control system, the company and its holding subsidiaries are included in the scope of internal control evaluation. The total assets of the unit included in the scope of evaluation account for 100% of the total assets in the company's consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company's consolidated financial statements.
The main businesses and matters included in the evaluation scope include: corporate governance, organizational structure, development strategy, human resource management, social responsibility, corporate culture, related party transaction management, major investment management, external guarantee, financial management, raised funds management, subsidiary management, information disclosure management, internal audit and supervision, etc; The high-risk areas of focus mainly include financial management, fund-raising management, major investment management, external guarantee, 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.
(II) 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. 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. The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
The quantitative standard takes the operating income and total assets as the measurement indicators. The defects of internal control over financial reporting are divided into major defects, important defects and general defects.
Identification standard
Define quantitative criteria
The amount of misstatement in the financial statements falls within the following range:
It refers to one or more control deficiencies. 1. Misstatement ≥ 5% of the total profit;
The combination of major defects may lead to enterprise 2. Misstatement ≥ 3% of the total assets;
The company seriously deviates from the control target. 3. Misstatement ≥ 1% of the total operating income;
4. Misstatement ≥ 1% of total owner's equity
It means that the amount of misstatement in one or more financial statements with insufficient control falls within the following range:
The severity of the combination is 5. 3% of the total profit ≤ misstatement ＜ 5% of the total profit;
Major defects and economic consequences are lower than major deficiencies 6. 0.5% of total assets ≤ misstatement ＜ 3% of total assets;
However, it may still lead to the deviation of enterprise 7. 0.5% of total operating income ≤ misstatement ＜ 1% of total operating income from the control target
The amount of misstatement in the financial statements falls within the following range:
It refers to 3% of the total profit except for major defects, important 8 and misstatement;
Defects other than general defects 9. Misstatement ＜ 0.5% of total assets;
10. The false report is less than 0.5% of the total operating income;
11. Misstatement ＜ 0.5% of total owner's equity
The above standards directly depend on the importance of financial reporting misstatement that may be caused by the existence of internal control defects, which mainly depends on two factors:
① Whether the defect will lead to the failure of internal control to prevent or detect and correct the misstatement of financial statements in a timely manner;
② The amount of potential misstatement that may be caused by the defect alone or in combination with other defects.
(2) The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
When the internal control defect does not directly or indirectly affect the financial statements and the amount is difficult to determine, the defect can be identified by analyzing the severity of the business nature, the nature of direct or potential negative impact, the scope of influence and other factors involved in the control defect.
① The following indications usually indicate that there may be significant defects in internal control over financial reporting:
1) Invalid control environment;
2) The directors, supervisors and senior managers of the company commit fraud and cause heavy losses and adverse effects;
3) The external audit found that there was a major misstatement in the current financial report, and the company's internal control system failed to identify the misstatement;
4) The major defects found and reported to the management by internal and external audit have not been rectified within a reasonable time;
5) The supervision of the company's audit committee and the company's audit department on internal control is invalid.
② Generally, the following important indications of internal control deficiencies may exist:
1) Failure to select and apply accounting policies in accordance with GAAP;
2) Failure to establish anti fraud procedures and control measures;
3) There are individual or multiple defects in the process of financial reporting, which do not meet the identification standard of major defects, but affect the authenticity, accuracy and integrity of the financial report.
③ General defects: internal control defects that do not constitute major defects and important defects.
2. Identification standard of internal control defects in non-financial reporting
(1) The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The quantitative standard for the evaluation of internal control defects in non-financial reports shall be implemented with reference to the quantitative standard for the evaluation of internal control defects in financial reports.
(2) The non qualitative evaluation of the company's internal control standard is as follows:
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company: the following circumstances can be identified as defects, and other circumstances can determine important defects or general defects respectively according to the degree of impact.
① Violation of national laws and regulations or liability accidents;
② Suffer serious administrative supervision punishment;
③ The frequent occurrence of negative news in the media has caused significant damage to the company's reputation;
④ The results of internal control evaluation, especially major or important defects, have not been rectified;
⑤ Serious loss of business personnel in key positions of the company;
⑥ Lack of institutional control or systematic failure of important business.
(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 for defects in internal control over financial reports, the company had the following major defects in internal control over financial reports in the previous year, and the rectification had been completed as of the date of issuance of the report.
As of the end of 2020, in the financial report business report, the control major defects of the internal benchmark issuing department of the previous year's financial report in 2021 describe the rectification of major defects in the control of the business field. Date is date is major defect is not completed Integration and transformation
The company formulates financial activities
The company's financial management system
Financial revenue and expenditure approval system 1. The company has strengthened monetary capital accounting
The audit control of the company's capital accounting has been standardized, and the financial management has been strengthened
Monetary Fund activities. However, there are still problems in the implementation of internal control over the preparation process of management report
Supervise the management business before it is implemented in accordance with relevant requirements, and
Describe the situation of the system within the process. If it is found that the financial management certificate is deposited and the original documents are sorted and filed, it is to control the failure to ensure the accurate presentation of financial statement items in the process sheet of major capital revenue and expenditure.
The valid execution certificate is incomplete, not timely and accurate. 2. The company has strengthened the monetary capital of all employees
The situation of being recorded in the account. The major internal control system should be studied to improve the law and risk
Defects affect the risk awareness in the financial statements and ensure the integrity of various rules and regulations
The presentation of relevant items shall be effectively implemented.
On internal control over financial reporting
The row is invalid.
The company's financing and investment activities
China has formulated the financing management system
Financing from non-financial institutions
Provisions on the administration of loan repayment
Regulations on early warning management
1. The company has strengthened the management of long-term assets
Audit and control of your accounts, such as the fixed assets management regulations, and strengthen the financial reporting
Supervision on the implementation of internal control in the preparation process of financing and investment management report of the company
Management activities. However, there is still management supervision to ensure that the items in the financial statements are listed
The fund raising and investment layer did not implement the report accurately in accordance with the relevant requirements.
The above-mentioned system in asset management. Discover assets and liabilities 2. Standardize corporate governance and strengthen internal control
There are no major asset processes under the control of the Department, and the construction of document debt management system. Improving the fine management of water can effectively implement the incomplete and unable to support the asset balance, improve the enterprise management system and enhance
Executive power of bank existence and identification of rights and obligations
