Self evaluation report on internal control in 2021
Sino Biological Inc(301047) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard 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 as of 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 supervise internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise 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, financial reports and relevant information are true, accurate and complete, 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, there are no major defects in the 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 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 scope of evaluation include:
1. Sino biological US Inc. is a wholly-owned subsidiary of the company. Place of registration: United States. Main business: Overseas biological products trade.
2. Sino biological 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. Sinobiological 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.
4、 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 the procurement system, procurement contract approval system, supplier evaluation management measures and other systems to control the main links in the procurement of fixed assets, separate incompatible posts, and clarify the responsibilities and approval authorities of purchase requisition, approval, purchase, acceptance, warehousing, payment, inventory and other links, Apply for asset purchase according to the prepared 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 company’s foreign investment shall be deliberated and approved by the general manager’s meeting, the board of directors and the general meeting of shareholders according to different matters and amounts. 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 the 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 administration 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, such as capital examination and approval management system, cost accounting management system, monetary capital management measures Management systems such as comprehensive budget management measures, expense reimbursement management system and preparation and disclosure of financial reports stipulate the functions and powers of financial personnel, financial supervisors, financial managers, chief financial officers, heads of other departments and general managers, and effectively control 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 according to the operating characteristics of the company, a risk control structure composed of the general meeting of shareholders, the board of directors, the board of supervisors and the management, as well as the internal audit and audit committee is preliminarily established, and the functions of risk assessment and risk management strategy selection at all levels are clearly divided. 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.
5、 Basis of internal control evaluation and identification standard of internal control defects
The board of directors of the company conducts major
