Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357)
Internal control audit system
Chapter I General Provisions
Article 1 in order to ensure the establishment, improvement and effective implementation of the internal control system of Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) (hereinafter referred to as “the company”), promote the standardized operation of the company and realize the enterprise development strategy, in accordance with the company law, the securities law, the basic norms of enterprise internal control, the guidelines on internal control of listed companies of Shanghai Stock Exchange and other laws and regulations This system is formulated in accordance with the relevant provisions of normative documents and the articles of association and in combination with the actual situation of the company.
Article 2 the company shall establish a good corporate culture, strengthen daily publicity and training, guide all employees to master the basic requirements of internal control and consciously abide by the provisions of the company’s internal control.
Article 3 this system is applicable to the headquarters of the company, its wholly-owned subsidiaries and holding subsidiaries.
Article 4 the company appoints the audit department as the daily inspection and supervision department of internal control, equipped with internal control inspection and supervision personnel. The audit department reports to the audit committee of the board of directors.
Chapter II inspection procedures
Article 5 regular and irregular inspection on the implementation of the company’s internal control system. All departments, wholly-owned subsidiaries and holding subsidiaries shall conduct self inspection regularly to ensure the effective operation of the internal control system, record the problems found and put forward solutions, and continuously improve the internal control system by modifying the management documents.
Article 6 the audit department shall continuously monitor the implementation of internal control, find out whether there are defects and problems in the implementation of the internal control system, evaluate the effect and efficiency of its implementation, report in time, and urge relevant departments and units to improve in time to ensure the effective implementation of the internal control system. The audit department shall also carry out various special inspections, spot checks and other supervision on the company’s internal control from time to time.
Article 7 the internal audit committee of the company shall formulate a detailed work plan and supervise the work of the internal audit committee in advance.
Article 8 when carrying out internal control supervision and inspection, the audit department may adopt on-site interview, questionnaire survey and other internal audit methods, and submit a written report.
Article 9 the person in charge of each department, wholly-owned subsidiary and holding subsidiary of the company shall be responsible for organizing relevant personnel to timely provide the audit department with the required original vouchers, statements, operating procedures, written reports and other documents and materials, and accept the interview and investigation of the audit department.
Chapter III reporting procedures
Article 10 the audit department shall inspect and supervise the operation of the company’s internal control, and form an internal audit report on the internal control defects and abnormalities, improvement suggestions and settlement progress found in the inspection, and report to the audit committee of the board of directors. If the Audit Department of the company finds that the company has major abnormalities and may or has suffered major losses, it shall immediately report to the board of directors of the company, and the board of directors of the company shall put forward practical solutions. Article 11 the audit department shall report the internal inspection and problems found to the audit committee of the board of directors after each regular or irregular inspection, and timely submit the annual internal control inspection and supervision report to the audit committee of the board of directors. Article 12 the report on the inspection and supervision of internal control shall at least include: the imperfections and imperfections of the internal control system found in the inspection; Defects of internal control and problems existing in the implementation; Improvement measures and suggestions for existing problems; It can also put forward suggestions on the next development direction of the company’s internal control system, as well as other matters that the audit department believes should be stated. Article 13 the inspection and supervision staff shall reflect the internal control defects found in the inspection and the problems existing in the implementation in the internal control inspection and supervision report, and track them after reporting to the audit committee of the board of directors, so as to ensure that the relevant departments have taken appropriate improvement measures in time. Article 14 the audit committee of the board of directors of the company shall guide the inspection and supervision of internal control, and review the internal control inspection and supervision report and internal control evaluation report submitted by the audit department. Article 15 the audit committee of the board of directors evaluates the establishment and implementation of the company’s internal control by reviewing the internal control inspection and supervision report, internal control self-assessment report and relevant information, and submits it to the board of directors of the company to form a resolution on the company’s internal control self-assessment report in accordance with relevant regulations. Article 16 the self-assessment report of the company’s internal control shall at least include the following contents: (1) whether the internal control system is established and sound; （2） Whether the internal control system is effectively implemented; （3） Inspection and supervision of internal control; （4） Internal control system and major risks in its implementation and their treatment; （5） Evaluate the completion of the work plan for internal control inspection and supervision this year;
（6） Relevant measures to improve the internal control system; （7） Work plan related to internal control for the next year. Article 17 certified public accountants shall verify and evaluate the company’s internal control self-assessment report and issue evaluation opinions with reference to the provisions of relevant competent departments. Article 18 the company’s employees can report the defects and problems in the implementation of the company’s internal control to the audit department in written forms such as letter and fax, take improvement measures and suggestions for the existing problems, and put forward suggestions for the next modification and improvement of the internal control system. Article 19 the working materials of the audit department, including the internal control inspection and supervision report, working papers and relevant materials, shall be kept for at least 10 years. Article 20 if there are major defects or risks in internal control due to the dereliction of duty of relevant personnel, resulting in serious impact or loss to the company, the audit department shall suggest and give corresponding sanctions to the relevant responsible person.
Chapter IV supplementary provisions
Article 21 this system shall be implemented from the date of deliberation and approval by the board of directors of the company. Article 22 matters not covered in this system shall be implemented in accordance with relevant national laws, administrative regulations, normative documents and the articles of Association; In case of any conflict between this system and laws, administrative regulations, normative documents or the articles of association modified by legal procedures, the relevant laws, administrative regulations, normative documents and the articles of association shall prevail.
Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) March 9, 2002
