Company code: Jiangsu Kanion Pharmaceutical Co.Ltd(600557) company abbreviation: Jiangsu Kanion Pharmaceutical Co.Ltd(600557)
Jiangsu Kanion Pharmaceutical Co.Ltd(600557)
Internal control evaluation report in 2021
Jiangsu Kanion Pharmaceutical Co.Ltd(600557) 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 on December 31, 2021 (the benchmark date of the internal control evaluation report). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the base date of internal control evaluation report to the date of issuance of internal control evaluation report
□ applicable √ not applicable
From the benchmark date of the internal control evaluation report to the date when the internal control evaluation report is not issued. 5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company’s internal control evaluation report
√ yes □ no
III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include the parent company Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , the subsidiaries Jiangsu Kangyuan sunshine Pharmaceutical Co., Ltd. Jiangsu Lianyungang Port Co.Ltd(601008) Kangsheng Pharmaceutical Co., Ltd. and Jiangxi Kangyuan Judu Pharmaceutical Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The total assets of the units included in the evaluation scope accounted for 98.97% of the total assets in the company’s consolidated financial statements
The total operating income of the units included in the evaluation scope accounted for 98.74% of the total operating income in the company’s consolidated financial statements. 3 The main operations and matters included in the scope of evaluation include:
Corporate governance and organizational structure, development strategy, human resource management, social responsibility, corporate culture, capital activities, procurement business, asset management, sales management, research and development, engineering projects, guarantee business, business outsourcing, financial reporting, comprehensive budget, contract and legal affairs, internal information transmission, information system, etc. 4. High risk areas of focus mainly include:
Control links that affect the authenticity of financial information, business efficiency and efficiency, asset safety and integrity, compliance with laws and regulations and other key businesses. 5. 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. Is there any major omission
□ yes √ no
6. Is there a statutory exemption
7. Other explanatory matters
None (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 and the actual operation of the company. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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 of internal control defects applicable to the company, And consistent with previous years. 2. 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Potential misstatement of total profit ≥ consolidated statement profit misstatement of total profit of consolidated statement ＜ 5% 3% of total profit misstatement of consolidated statement ≤ misstatement ＜ 3% of total profit of consolidated statement
5% of total profit
Description: None
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects (1) fraud of directors, supervisors and senior managers;
(2) 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;
(3) The supervision of the audit committee and internal audit institutions on internal control is invalid;
(4) Major defects in information application control are related to or caused by general control defects of information system;
(5) It can be reasonably proved that the significant loss is caused by one or more control defects.
Important defects, alone or in combination with other defects, lead to the failure to prevent, find and correct the misstatement in the financial report that does not constitute a material misstatement but should still attract the attention of the management.
General defects and other internal control defects that do not constitute major defects or important defects.
Note: none 3 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:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
5% of the net profit (including 3% of the net profit (including less than 3% of the net profit and 5% of the property loss amount)) – 5%
Description: None
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects: (1) lack of democratic decision-making procedures or unscientific decision-making procedures, resulting in decision-making mistakes;
(2) Serious violation of national laws and regulations;
(3) Loss of management personnel or technical skills;
(4) Frequent negative news in the media;
(5) The results of internal control evaluation, especially major or important defects, have not been rectified;
(6) Lack of institutional control or systematic failure of important business.
Important defect is a combination of one or more defects whose severity and economic consequences are lower than those of major defects, but it may still cause the enterprise to deviate from the control objectives.
General defects and other internal control defects that do not constitute major defects or important defects.
Note: none (III) Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
There were no general defects in internal control over financial reporting during the reporting period. 1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified □ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company has any important defects in the internal control of financial reporting that have not been rectified □ yes √ No 2 Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.2 Important defects
□ yes √ no 2.3 General defect
There may be general defects in the daily operation of the internal control process. Since the company’s internal control has established a dual supervision mechanism of self-evaluation and internal audit, corrective measures shall be taken once the defects are found and confirmed to make the risk controllable and have no material impact on the operation of the company’s internal control system. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in the non-financial reporting internal control that have not been rectified □ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, whether the company finds any important defects in non-financial reporting internal control that have not been rectified □ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year
□ applicable √ not applicable
2. Operation of internal control in this year and improvement direction in the next year
□ applicable √ not applicable 3 Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Xiao Wei Jiangsu Kanion Pharmaceutical Co.Ltd(600557) March 2, 2022
