Self evaluation report on internal control in 2021
Huasu Holdings Co.Ltd(000509) all shareholders:
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 company’s (hereinafter referred to as the company’s) 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 (benchmark date of internal control evaluation report). 1、 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. 2、 Internal control evaluation conclusion
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
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.
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
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: Huasu Holdings Co.Ltd(000509) headquarters, Beijing Bowei Yilong Culture Communication Co., Ltd., Chengdu Kangda Credit Suisse Enterprise Management Co., Ltd. (including Tianji Zhigu (Hubei) Information Technology Co., Ltd.) and Shanghai Yinghua Hospital Management Co., Ltd. the total assets of the units included in the evaluation scope account for 90.21% of the total assets in the company’s consolidated financial statements, The total operating revenue accounts for 97.96% of the total operating revenue in the company’s consolidated financial statements; The main businesses and matters included in the evaluation scope include: organizational structure, human resources, capital activities, procurement business, asset management, sales business, engineering projects, guarantee business, related party transactions, financial reports, contract management, internal information transmission and information system, etc; The high-risk areas of focus mainly include: capital activities, procurement business, sales business, guarantee business, financial reporting and contract management.
The above units, businesses, matters and high-risk areas included in the evaluation scope cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) internal control evaluation basis and internal control defect identification standard
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system.
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished internal control over financial reports from internal control over non-financial reports, and studied and determined the specific identification standards for internal control defects applicable to the company, And consistent with previous years. The identification standards of internal control defects determined by the company are as follows:
1. 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:
Project business type major defect important defect general defect
Electronic device system
The amount of business income, medical treatment and misstatement ≥ 0.1% of business income ≤ the amount of misstatement < the amount of potential misstatement of business income < 0.1% of business income
Including other industries 0.2%
Affairs
Electronic device system
The amount of net profit, medical treatment and misstatement ≥ 1.5% of net profit ≤ the amount of misstatement ＜ 3% of potential misstatement of net profit ＜ 1.5% of 3% of net profit
Taking into account other industries
Affairs
Electronic device misstatement amount ≥ 0.5% of total assets ≤ error
The reported amount of total assets, medical treatment and total assets ＜ the misstatement amount of total assets ＜ 0.5% of the total potential misstatement amount of assets
Taking into account other industries
Affairs
Electronic device system
The amount of owner’s rights, medical treatment and misstatement ≥ 0.5% of owner’s equity ≤ the amount of misstatement < 0.5% of owner's equity; the amount of misstatement of owner's equity < 0.5% of owner's equity; the potential misstatement is included in 1% of 1% of other businesses
Affairs
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
(1) Defects or situations with the following characteristics shall generally be recognized as major defects
a. The internal control environment of financial reporting is invalid;
b. Found fraud by directors, supervisors and senior managers of the company;
c. The certified public accountant finds that there is a material misstatement in the current financial report, but the internal control fails to find the misstatement in the operation process;
d. The company corrects the published financial report;
e. Major internal control deficiencies that have been found and reported to the management have not been corrected within a reasonable time; f. The supervision of internal control by the audit committee and internal audit institutions is invalid.
(2) Defects or situations with the following characteristics shall generally be recognized as important defects:
a. The certified public accountant finds that there is an important misstatement in the current financial report, but the internal control fails to find the misstatement in the operation process;
b. Significant internal control deficiencies that have been found and reported to the management have not been corrected within a reasonable time; c. There are important defects in the supervision of internal control by the audit committee and internal audit institutions.
(3) Internal control defects in financial reporting that do not constitute major defects and important defects are recognized as general 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:
Amount of direct property loss caused by defect identification
Major defects of RMB 10 million (inclusive) and above
Major defects: 3 million yuan (including) – 10 million yuan
General defects less than 3 million yuan
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
(1) The following situations shall be generally recognized as major defects:
a. Serious violation of national laws, administrative regulations and normative documents;
b. Major issues have not gone through collective decision-making procedures, or the decision-making procedures are unscientific;
c. Major accidents in product and service quality;
d. The important business involving the company’s production and operation lacks system control or the system fails;
e. The result of internal control evaluation is a major defect, but it has not been rectified.
(2) The following situations shall be generally recognized as important defects:
a. There are major defects in the important business system related to the company’s production and operation;
b. The result of internal control evaluation is an important defect, but it has not been rectified.
(3) Defects in internal control over non-financial reporting that do not constitute major defects and important defects are recognized as general defects. (III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reports: according to the above identification standards of internal control defects in financial reports, the company did not have major and important 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 for internal control defects in non-financial reports, no major defects and important defects in the company’s internal control over non-financial reports were found during the reporting period.
Chairman: Zhao Lin Huasu Holdings Co.Ltd(000509) January 16, 2022
