Jiangsu Jiuwu Hi-Tech Co.Ltd(300631)
Internal control self evaluation report
Jiangsu Jiuwu Hi-Tech Co.Ltd(300631) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines jointly issued by the Ministry of finance, the CSRC and other departments and other internal control supervision requirements (hereinafter referred to as the enterprise internal control 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 have evaluated the rationality, integrity and effectiveness of the establishment of internal control of the company as of December 31, 2021 (benchmark date of internal control evaluation report), and identified the defects existing in the design and operation of internal control. The self-evaluation of the company's internal control related to the company's financial statements as of December 31, 2021 is reported as follows:
1、 Important statement
Internal control is a process implemented by the board of directors, the board of supervisors, managers and all employees to achieve control objectives. It is the responsibility of the board of directors of the company to design, implement and maintain effective internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report under the supervision of the corporate governance and 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 liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of establishing and implementing internal control is to reasonably ensure the legal compliance of enterprise operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of enterprise 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 or procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results.
2、 Organization of internal control evaluation
The internal control evaluation is led by the board of directors of the company and its audit committee, forming an evaluation team led by the audit department and participated by multiple departments to evaluate the main risk areas and units included in the evaluation scope.
（1） Establishment of evaluation group and evaluation procedure; On site inspection; The evaluation team studies and identifies the defects of internal control; Discuss and review the rectification plan; Report to the board of directors for deliberation and approval in accordance with the specified authorities and procedures.
（2） Evaluation method: an evaluation team is formed to comprehensively collect the evidence of the company's internal control design and effective operation by using various methods such as individual interview, questionnaire, special discussion, walk through test, statistical sampling and comparative analysis, and study and identify the defects of internal control design and operation.
3、 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. The main units included in the evaluation scope include: Jiangsu Jiuwu Hi-Tech Co.Ltd(300631) . The total assets of the units included in the consolidation scope account for 98.15% of the total assets in the company's consolidated financial statements, and the total operating revenue accounts for 93.80% of the operating revenue in the company's consolidated financial statements. The main businesses included in the evaluation scope include: overall solution of membrane integration technology, sales of membrane materials and accessories.
The items included in the evaluation scope include: corporate governance, organizational structure, development strategy, corporate culture, information disclosure, information system and internal audit at the company level; Business level human resources, financial reporting, sales business, procurement business, fund management, asset management, contract management, engineering management, guarantee business, research and development, related party transactions, control of subsidiaries, etc. The high-risk areas of focus mainly include capital activities, sales business, procurement business, inventory and fixed assets management, financial reporting, etc.
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, and there are no major omissions.
（1） Governance structure
In accordance with the company law, the securities law, the articles of association and other laws and relevant provisions, the company has established a standardized corporate governance structure and rules of procedure, defined the responsibilities and authorities in decision-making, implementation and supervision, and formed a scientific and effective division of responsibilities and check and balance mechanism.
1. The general meeting of shareholders is the highest authority of the company. It has formulated the rules of procedure of the general meeting of shareholders, which clearly stipulates the nature and functions of the general meeting of shareholders and the working procedures such as convening and notification, proposal, voting and resolution of the general meeting of shareholders. The formulation and effective implementation of the rules ensure that the general meeting of shareholders exercises the decision-making power on major matters according to law, which is conducive to protecting the legitimate rights and interests of shareholders.
2. The board of directors is the company's permanent decision-making body, which is responsible to the general meeting of shareholders, deliberates and makes decisions on major decision-making issues in the company's business activities, or submits them to the general meeting of shareholders for deliberation. The directors are elected by the general meeting of shareholders and the chairman is elected by the board of directors. The board of directors is composed of 9 directors, with 1 Chairman, including 3 independent directors. There are four special committees and the office of the board of directors, including the strategy committee, the audit committee, the remuneration and assessment committee and the Nomination Committee; The special committees are held by the directors and independent directors of the company. The company has formulated the rules of procedure of the board of directors, the working system of independent directors, the working rules of the strategy committee, the working rules of the audit committee, the working rules of the remuneration and assessment committee and the working rules of the nomination committee, which stipulate the selection and employment procedures of directors, the obligations of directors, the composition and responsibilities of the board of directors, the rules of procedure of the board of directors Working procedures of independent directors, composition and responsibilities of special committees, etc. The formulation and effective implementation of these systems can ensure that the special committee can effectively perform its duties and provide help for the scientific decision-making of the board of directors.
3. The board of supervisors is the supervisory body of the company, which is responsible for supervising the behavior of the company's directors and senior managers and the company's finance. The board of supervisors of the company is composed of three supervisors, one of whom is the employee representative. The company has formulated the rules of procedure of the board of supervisors, which clearly stipulates the responsibilities of supervisors, the functions and powers of the board of supervisors, the convening and notification of the board of supervisors, resolutions, etc. The formulation and effective implementation of the rules will help give full play to the supervisory role of the board of supervisors and protect the interests of shareholders, the company and the legitimate interests of employees from infringement.
4. The general manager shall be fully responsible for the daily operation and management activities of the company and organize the implementation of the resolutions of the board of directors. The company has formulated the working rules of the general manager, which stipulates the responsibilities of the general manager, manager office meeting and production scheduling meeting, general manager reporting system, supervision system and other contents. The formulation and effective implementation of these systems ensure the effective implementation of various decisions of the board of directors, and improve the operation and management level and risk prevention ability of the company.
（2） Internal organizational structure
As of the reporting date, the company's internal institutions currently include: marketing department, pharmaceutical and food business department, chemical business department, water business department I, water Business Department II, ceramic membrane business department, organic membrane business department, waste salt comprehensive treatment business group, Party committee office, equipment manufacturing department, technology R & D department, engineering management center, procurement department, human resources department, office Finance department, audit risk control department, securities investment department, safety, environment and quality department.
By reasonably dividing the responsibilities of each department and post, and implementing the principle of separation of incompatible positions, a mechanism of clear division of labor, mutual cooperation and mutual checks and balances is formed between each department, which ensures the orderly and healthy operation of the company's production and operation activities and the realization of control objectives.
（3） Development strategy
In the future, the company will still focus on the development and innovation of separation membrane materials and membrane separation technology, and strive to become a leader in the world membrane separation industry. The company will be committed to using membrane separation technology to help traditional industries realize upgrading and transformation, actively participate in the cause of national energy conservation and emission reduction and circular economy, and realize the social and economic value of membrane separation technology.
（4） Corporate culture
With the vision of "becoming a leader in the global membrane separation industry", the company adheres to the core values of "customers are the first service object, innovation is the first productivity, integrity is the first brand and striver is the first wealth", Practice the corporate mission of "developing advanced separation technology, promoting production, saving energy, protecting the environment, creating value for customers and guarding the future for mankind". The company attaches great importance to the publicity and promotion of corporate culture and creates a positive corporate culture atmosphere by organizing activities such as corporate culture festival.
（5） Information disclosure
The company has formulated the information disclosure management system, the internal reporting system of major information, the management system of external information users and the registration management system of insider information, which defines the person in charge of information disclosure, the information disclosure affairs management department and relevant obligors, the responsibilities of each person in charge and obligors, the contents and standards of information disclosure Review process of information disclosure, file management of documents and materials related to information disclosure, etc.
（6） Information and communication
Taking the e-mail system as the starting point, the company uses the ERP modern information platform to make the information transmission between departments, employees and management more rapid, effective, fast and smooth.
The company has established an anti fraud mechanism to clarify the key areas and key links of anti fraud work and the responsibilities and authorities of relevant institutions in anti fraud work, and standardize the reporting, investigation, handling, reporting and remedial procedures of fraud cases.
The company has formulated the internal complaint management system and operated it in the OA system, which aims to encourage employees to actively participate in the company's management and timely supervise and complain to the general manager of the company about internal operation defects or violations.
（7） Establishment of internal audit institutions
The audit committee under the board of directors of the company is responsible for the communication, supervision and verification of internal and external audits of the company in accordance with the working rules of the audit committee. The audit committee consists of three directors and two independent directors, one of whom is an accounting professional and serves as the convener of the Committee. The audit committee has an audit risk control department, one person in charge and several commissioners, with qualifications and professional abilities in financial audit, law, project cost and so on. The Department has the professional ability to carry out audit work independently.
（8） Human resources policy
The company has formulated human resources policies conducive to the sustainable development of the enterprise, including: employment, training, dismissal and resignation of employees; Salary, assessment, promotion, reward and punishment of employees; Compulsory leave system and regular job rotation system for employees in key positions; Restrictive regulations on the departure of employees who master state secrets or important business secrets, etc.
At the same time, the company attaches great importance to the quality of employees and takes professional ethics and professional competence as important standards for selecting and employing employees. At present, the company has 383 employees, including 13 with senior titles, 45 with intermediate titles and 25 with primary titles; Among them, there are 6 doctors, 41 masters, 140 undergraduates and 61 junior college students. The company also carries out various forms of follow-up training and education for different positions according to the needs of actual work, so that employees can be competent for their jobs and continuously improve the support of human resources for enterprise strategy.
（9） Financial Report
The company has established a relatively perfect financial management system in accordance with the accounting law, accounting standards for business enterprises, tax law and other relevant laws and regulations. The company has set up an independent accounting organization, set up more reasonable posts in financial management and accounting, formulated corresponding job instructions, and equipped with sufficient full-time personnel to ensure the smooth progress of financial work. The division of labor of accounting personnel is clear, and the post responsibility system is implemented. Each post can play a role of mutual restraint, and the approval, execution and recording functions are separated.
（10） Capital operation management system
1. Comprehensive budget management
The company has implemented a comprehensive budget management system, defined the responsibilities and authorities of each responsible unit in budget management, standardized the procedures for budget preparation, approval, issuance and implementation, and strengthened budget constraints. The company's future sales, costs and cash flow are systematically reflected through the budget, so as to effectively organize and coordinate all the company's business activities and achieve the company's business objectives.
2. Monetary fund management
The company has formulated management systems such as fund payment management system, expense reimbursement management system and personal working capital and personal loan management system, which clearly stipulates the use scope, approval procedures and inventory custody of the company's monetary funds and bank bills. The incompatible positions for handling monetary capital business are separated, so that relevant departments and personnel restrict each other, strengthen the audit of fund collection and payment, and ensure the safety of the company's funds.
3. Fund raising and fund management
The finance department and the Securities Investment Department of the company have standardized the financing operation mode, management, coordination and supervision according to the articles of association and relevant laws and regulations, so as to reduce the capital cost, reduce the financing risk and improve the efficiency of capital operation.
4. Use and management of raised funds
The company has formulated the management system for the use of raised funds, standardized the storage, use, change of fund use, information disclosure and other behaviors of the company's raised funds, used them in strict accordance with the specified authority, and strictly performed the application and approval procedures to ensure the use efficiency of raised funds.
The audit risk control department of the company regularly conducts special audit on the raised capital account and issues audit reports in accordance with relevant regulatory requirements. （11） Asset management
The company has standardized the purchase, storage, use, maintenance, disposal, scrapping, inventory and recording of the company's fixed assets, and formulated the fixed assets management system to ensure the safety, integrity and effectiveness of the company's fixed assets. And relevant positions
（12） Procurement and payment business
The company has formulated procurement management system, procurement contract approval process and other management systems to standardize the signing, performance, change, cancellation and management of procurement contracts for bulk raw materials, spare parts and engineering materials, so as to enhance procurement transparency, reduce procurement costs, prevent corruption and avoid economic losses caused by contract disputes.
The company has formulated the procurement bidding management system and procurement management system, and made more specific requirements for specific practical work: in terms of project outsourcing and capital construction project payment, payment can be made only after being audited by the audit risk control department of the company; In terms of bidding, the staffing and rules of the bidding team are refined; In terms of supplier management, the company has formulated the supplier management measures and detailed the specific operation rules of different levels of suppliers.
（13） Production process and cost control
1. Production and quality management
The company has formulated a number of management systems, such as safety production management system, industrial accident handling system, safety regulations for high-altitude operation, safety management regulations for equipment installation, management system of labor protection articles, management specification for safe electricity use and so on, to predict all kinds of accidents in the company
