Citic Securities Company Limited(600030)
About Sino Biological Inc(301047)
Verification report of internal control self-evaluation report in 2021
Citic Securities Company Limited(600030) (hereinafter referred to as ” Citic Securities Company Limited(600030) ” and “sponsor”) as the sponsor of Sino Biological Inc(301047) (hereinafter referred to as ” Sino Biological Inc(301047) ” and “company”) for initial public offering and listing on GEM, In accordance with the measures for the administration of securities issuance and listing recommendation business, the guidelines for the recommendation of listed companies of Shenzhen Stock Exchange, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the guidelines for the standardized operation of GEM listed companies of Shenzhen Stock Exchange, and the guidance on the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies And other relevant regulations, and checked the self-evaluation report on internal control in Sino Biological Inc(301047) 2021. The verification conditions and opinions are as follows:
1、 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:
1. Sinobiologicalus Inc. is a wholly-owned subsidiary of the company. Place of registration: United States. Main business: Overseas biological products trade.
2. Sinobiological Europe GmbH is a wholly-owned subsidiary of the company. Place of registration: Germany. Main business: Overseas biological products trade.
3. Sino Biological Inc(301047) (Taizhou) Technology Co., Ltd. is a wholly-owned subsidiary of the company. Registered address: Taizhou, Jiangsu. Main business: production and R & D of biological products.
4. Sino Biological Inc(301047) (Suzhou) Biotechnology Co., Ltd. is a wholly-owned subsidiary of the company. Registered address: Suzhou, Jiangsu. Main business: biological products technology services.
5. Sino biological Japan Co., Ltd. is a wholly-owned subsidiary of the company. Place of registration: Tokyo, Japan. Main business: Overseas biological products trade.
The above units, businesses and matters included in the evaluation scope cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) business scope of internal control
1. Internal environment
(1) Corporate governance
The company has established the general meeting of shareholders, the board of directors and the board of supervisors according to law, established the independent director system and the working system of the special committee of the board of directors, and defined the responsibilities, authorities, procedures and obligations of the general meeting of shareholders, the board of directors, the board of supervisors and the management in decision-making, implementation and supervision. It has formed a governance structure of scientific division of labor among power institutions, decision-making institutions, operating institutions and supervisory institutions, each responsible for its own responsibilities and effective checks and balances, ensuring that each institution and personnel can exercise their rights and perform their duties in accordance with the system and norms, and laying a solid foundation for the standardized operation and long-term healthy development of the company.
(2) Human resources
According to the development of business and scale, the company has established a matching human resources organizational structure and power and responsibility system, emphasizing that personal development should be consistent with the development objectives of the enterprise. The administration and personnel department of the company has formulated the personnel management system, which defines the contents of employee selection and promotion, organization and position, training and development, performance and salary, ensures the effective development of human resources business and continuously improves the support ability of human resources for the company’s strategy. The company has established the workers’ Congress and its trade union committee. On behalf of all employees, the trade union organization carries out collective negotiation with the enterprise on wages, labor protection and other aspects, participates in the formulation of enterprise development planning and relevant systems, coordinates the relationship between the enterprise and employees, and makes suggestions for the development of the enterprise.
2. Internal control
(1) Purchase control
The company has formulated systems such as procurement system, procurement contract approval system and supplier evaluation management measures to control the main links in the procurement of fixed assets, separate incompatible posts, clarify the responsibilities and approval authorities of purchase requisition, approval, purchase, acceptance, warehousing, payment, inventory and other links, and apply for asset procurement according to the formulated budget plan. Sort out the suppliers of previous years, include the qualified suppliers into the daily cooperation list, and control the procurement risk by means of three-party price consultation or bidding for new suppliers. The company has formulated various cost approval regulations, which are reviewed level by level according to the amount, and signed and approved by the chief financial officer and the general manager. During the reporting period, the control measures for procurement and payment of fixed assets were effectively implemented.
(2) Sales control
The company has formulated the sales business management system, contract management system and other systems, standardized and controlled the main links of the sales business through continuously improving a series of management methods, defined the responsibilities and authorities of each post, and ensured the separation of incompatible posts. The content of sales control covers the formulation of sales plan, approval of sales contract, collection management, customer development and management and other related matters, forming a strict management system and authorization review procedures. At the same time, combined with the marketing department and the finance department, it strictly controls the information management and collection system of accounts receivable. During the reporting period, the control measures for sales and collection were effectively implemented.
(3) Foreign investment control
The company attaches importance to foreign investment, especially the internal control of major investment behavior. The rules of procedure of the general meeting of shareholders and the rules of procedure of the board of directors clearly stipulate the approval authority and investment decision-making procedures of the general meeting of shareholders and the board of directors for foreign investment, which effectively standardizes the company’s investment behavior and scientific decision-making. According to the foreign investment management system formulated by the company to better control the risk of foreign investment. The amount of foreign investment shall be deliberated and approved by the shareholders’ meeting and the general manager’s meeting respectively according to different matters of the company. All subsidiaries and branches have no right to invest abroad, but enjoy the right of investment advice.
(4) Related party transaction control
In strict accordance with the provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange on the disclosure of related party transactions and the provisions of the company law, the articles of association and other relevant laws and regulations, the company has formulated the measures for the administration of related party transactions to standardize the content, pricing principles, decision-making procedures and approval authority of related party transactions, Ensure that the related party transaction contracts between the company and related parties comply with the principles of fairness, openness and impartiality, and ensure that the related party transactions of the company do not harm the interests of the company and all shareholders.
(5) External guarantee control
In the articles of association, the company defined the approval authority of the general meeting of shareholders and the board of directors on external guarantees, the accountability mechanism for violation of the approval authority and review procedures, and formulated the external guarantee management system, which clearly stipulated the basic principles of external guarantees, the review procedures of external guarantee objects, the approval procedures of external guarantees The management procedure of external guarantee, the information disclosure of external guarantee and the accountability mechanism of relevant responsible persons of external guarantee have comprehensively standardized the company’s guarantee behavior and prevented business risks.
(6) Use control of raised funds
In order to standardize the management and application of the company’s raised funds and protect the interests of investors, the measures for the management of raised funds are formulated in accordance with the relevant provisions of laws, regulations and normative documents such as the company law, the securities law, the measures for the administration of securities issuance of listed companies, the rules for the listing of shares on the gem of Shenzhen Stock Exchange, and in combination with the actual situation of the company, There are clear provisions on the storage, use, investment direction change, management and supervision of the raised funds, so as to ensure the special use of the raised funds.
(7) Control of information disclosure
The company has established and improved the information disclosure management system and investor relations management system, effectively controlled the whole process of public information disclosure and internal communication of major information, further standardized the behavior of information disclosure and investor relations management, fulfilled the obligation of information disclosure according to law, and ensured that the person responsible for information disclosure knows all kinds of information of the company. The company has also formulated the internal reporting system of major information and the management system of insiders of insider information, which have made detailed provisions on the scope of major information, the scope of insiders of major information, the management and responsibility of internal reporting of major information and the internal reporting procedures of major information, so as to ensure the authenticity, accuracy, integrity, timeliness and fairness of the disclosed information, Safeguard the legitimate rights and interests of the company and investors.
(8) Internal control of accounting management
In order to ensure the quality of accounting information and protect the safety and integrity of assets, the company has formulated a series of financial management rules and regulations in accordance with the accounting law, accounting standards for business enterprises, Shenzhen Stock Exchange GEM Listing Rules and other laws and regulations, For example, the fund approval management system, cost accounting management system, monetary fund management measures, comprehensive budget management measures, expense reimbursement management system, preparation and disclosure of financial reports and other management systems stipulate the functions and powers of financial personnel, financial supervisors, financial managers, financial directors, heads of other departments and general managers at all levels, It has effectively controlled all links of the company’s financial management. Ensure the integrity, rationality and effectiveness of the internal control of the company’s accounting management in major aspects, and provide reasonable assurance for the preparation of true, complete and fair financial statements.
3. Risk assessment
Ensure the realization of the company’s business objectives. According to the principle of “clear rights and responsibilities, mutual checks and balances” and the operating characteristics of the company, the functions selected by the corporate governance structure such as the general meeting of shareholders, the board of directors, the board of supervisors and the management with the risk management strategy are preliminarily established. The company has established a good risk assessment system and risk control system. Through the establishment of perfect business, finance, legal affairs, internal audit and information management systems, the company has standardized various processes of daily operation, improved the safety of various work and effectively reduced the internal risks of the company’s operation.
4. Information and communication
The company has established a more comprehensive information collection, sorting, analysis and transmission system, and uses modern information platforms such as computer network system to facilitate the information transmission between all management levels, departments, employees and management more quickly and smoothly, and the communication is more convenient and effective.
Internal information and communication: the company has established an intranet and U8 system to improve the efficiency of internal information exchange. The internal information transmission management system has been formulated to clarify the transmission and collection procedures of internal major information, so as to ensure that the company’s information can be effectively managed and disclosed in a timely, accurate and complete manner. External information and communication: the company has established and implemented the information disclosure system, set up special departments, and assigned special personnel to be responsible for the information disclosure and communicate with the regulatory authorities, so as to ensure the timely, accurate and complete information disclosure of the company. The company’s departments will timely communicate with industry associations, social intermediaries, business units, online media and other institutions to carry out information exchange, so as to ensure that the company can timely and comprehensively obtain external information and promote the company’s business development and development. 5. Internal supervision
The company has entrusted independent directors, special committees under the board of directors, the board of supervisors and the audit department with the responsibility of supervising the implementation of internal control. The audit department and relevant business and functional departments form an internal control supervision and management system. At present, a multi-level supervision mechanism covering the company, its branches, subsidiaries and business departments has been established. The main body of internal supervision regularly or irregularly supervises and inspects the corporate governance structure, financial status, operation and management, salary distribution, duty performance of directors and senior executives, reports the implementation and operation of the company’s internal control to the board of directors, and urges the board of directors to improve the institutional defects of the internal control system. Supervise, inspect and feed back the implementation of internal control in various business areas, departments and main posts in advance, during and after the event.
(1) Independent director system
According to the guiding opinions on the establishment of independent director system in listed companies, the guidelines for the governance of listed companies and the articles of association, in addition to the functions and powers entrusted to directors by the company law and relevant laws and regulations, independent directors are responsible for major related party transactions, external guarantees, nomination, appointment and removal of directors, appointment or dismissal of senior executives Independent external audit institutions and consulting institutions can express independent opinions, which ensures the objective judgment and independent performance of duties of independent directors. The current three independent directors of the company have the qualifications of independent directors of listed companies.
(2) Internal audit system and operation
The board of directors is responsible for the establishment, improvement and effective supervision of internal control. There is an audit committee under the board of directors. The convener of the audit committee is an independent director. The audit committee is responsible for reviewing the company’s internal control, supervising the effective implementation of internal control and self-evaluation of internal control, and coordinating internal control audit and other related matters; The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors; The management level organizes the daily operation of the company’s internal control. The company has established an audit department and formulated the internal audit management system. The audit department is responsible for the inspection and evaluation of the company’s audit supervision, risk control and internal control system, the on-site audit business of self-evaluation of internal control, and submitting the internal control audit report to the board of directors. During the reporting period, the audit department formulated the audit work plan and work procedures, carried out audit supervision on the company through the implementation of comprehensive audit business, reasonably ensured the authenticity, accuracy and integrity of the company’s financial information, as well as the efficiency and effect of business activities, ensured the implementation quality of internal control and the internal control defects found in the process of supervision, According to the nature of defects, inform and report to the management or the audit committee of the board of directors and the board of supervisors according to the established reporting procedures, and track and rectify in time to ensure the effective implementation of the internal control system.
(III) internal control evaluation basis and internal control defect identification standard
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 the internal control of financial reports from the internal control of non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company. The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
According to the degree of influence on the realization of internal control objectives, the internal control defects of financial statements are divided into general defects, important defects and major defects.
(1) The quantitative criteria for the evaluation of internal control defects in financial reporting are as follows: the quantitative criteria are based on operating income or
Total assets as a measure.
General defects, important defects and major defects of the project
Total assets misstated amount ＜ 0.25% assets 0.25% total assets ≤ misstated amount ＜ misstated amount ≥ 0.5% total assets 0.5% total assets
Total operating revenue misstatement amount ＜ 0.5% revenue 0.5% total revenue ≤ misstatement amount ＜ 1% misstatement amount ≥ 1% total revenue
