Cngr Advanced Material Co.Ltd(300919)
Internal control self evaluation report
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the “enterprise internal control standard system”), combined with the internal control system and evaluation methods of Cngr Advanced Material Co.Ltd(300919) (hereinafter referred to as the “company”), on the basis of daily and special supervision of internal control, The board of directors of the company 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 implement 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, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote and realize the company’s 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, it is risky to speculate the effectiveness of internal control in the future based on the evaluation results of internal control. The company has an inspection and supervision mechanism for internal control. Once internal control defects are identified, rectification measures will be taken immediately. 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, 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.
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 issuance of the internal control evaluation report.
3、 Internal control evaluation
In accordance with the relevant requirements of the China Securities Regulatory Commission on the internal control of listed companies, as well as the provisions of the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the guidelines for the governance of listed companies, the basic norms of enterprise internal control and its supporting guidelines, The company has set up an internal control project leading group with the board of directors and senior executives as the main members. Under the leading group, an internal control project working group with personnel in key positions of the company’s core functions such as human resources, finance, sales, R & D, procurement, production and infrastructure as the team has been established. The project team shall regularly report the implementation of internal control to the board of directors (president) of the company. The internal audit department of the company is responsible for supervising, inspecting and evaluating the operation effectiveness of the company’s internal control system.
(I) evaluation scope of internal control
According to the principle of risk orientation, 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 the company and its holding subsidiaries. The main businesses and matters included in the evaluation scope include: corporate governance, organizational structure, human resources, corporate culture, internal supervision, fund management, procurement management, sales management, asset management, R & D management, external guarantee, contract management and engineering projects. The high-risk areas of focus include procurement and payment, sales and collection, fund raising and use, project management, financial report, information disclosure, 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.
(II) internal environment
1. Corporate governance and internal organizational structure
Basic information of Corporate Governance: in strict accordance with the company law, securities law, basic norms of enterprise internal control and other relevant provisions, the company has continuously improved the corporate governance structure, clarified the responsibilities and authorities in decision-making, implementation and supervision, formed a scientific and effective division of responsibilities and check and balance mechanism, strengthened internal management and standardized the operation of the company.
① Shareholders and general meetings
The company ensures that all shareholders enjoy equal rights; The convening and convening of the general meeting of shareholders fully comply with the requirements and provisions of the articles of association and the rules of procedure of the general meeting of shareholders; For the company’s major related party transactions and other major matters, the independent directors of the company have expressed their special opinions.
② Directors and board of directors
The board of directors is responsible to the general meeting of shareholders and exercises the company’s business decision-making power according to law. There are 7 directors of the company, including 3 independent directors. The structure of the board of directors is reasonable, the information of directors is true and complete, and the candidates for directors have obtained the consent of relevant organizations and themselves in advance, and have a written commitment; The strategic committee, nomination, remuneration and assessment committee and audit committee under the board of directors of the company shall first pass the professional matters through the special committee, and then submit them to the board of directors for deliberation, so as to facilitate the independent directors to play a better role.
③ Supervisors and board of supervisors
All members of the board of supervisors of the company have relevant professional knowledge and work experience; The board of supervisors shall independently and effectively supervise the performance of duties and financial affairs of the company’s directors and senior managers in accordance with the powers conferred by the articles of Association; Attend the meetings of the board of directors as nonvoting delegates and put forward relevant suggestions and opinions to the board of directors.
④ President and other senior management
The president of the company is responsible for organizing and implementing the resolutions of the general meeting of shareholders and the board of directors, presiding over the daily operation and management of the company, involving investment, financing, guarantee, related party transactions or other major matters, which shall be submitted to the board of directors for decision-making in accordance with the provisions of the articles of association.
⑤ Organizational structure of the company
In order to effectively plan, coordinate and control business activities, the company has established an organizational structure in line with the company’s business scale and business management needs according to the actual situation and business management needs, including business center, financial center, capital center, business center, Research Institute, Design Institute, board office, production and operation center, quality management center, human resources center Information Center, engineering project center, risk control audit and supervision office and other departments. It has formed an organizational system in which each performs its own duties, assumes its own responsibilities, cooperates with and restricts each other.
2. Development strategy
The strategy committee under the board of directors of the company is a special organization responsible for the company’s long-term development strategy and major investment decisions. Study and put forward suggestions on the company’s long-term development strategic planning, business objectives and development policies according to the rules of procedure of the Strategy Committee; Study and put forward suggestions on the company’s business strategy, including but not limited to product strategy, market strategy, marketing strategy, R & D strategy and talent strategy; Study and put forward suggestions on major investment and financing schemes that are required to be approved by the board of directors; Study and put forward suggestions on major capital operation and asset management projects that are required to be approved by the board of directors; Study and put forward suggestions on other major issues affecting the development of the company; Check the implementation of the above matters.
The strategy committee is convened by the chairman of the company from time to time. Through careful research, it puts forward suggestions on business development to the board of directors of the company, improves the efficiency and quality of major investment decisions, strengthens the scientificity of decisions, and enhances the main business strength and core competitiveness of the company. Ensure the overall, long-term and feasibility of the development strategic plan.
3. Human resources policy
The company adheres to the employment concept of “attracting talents with business, cultivating talents with practice and achieving talents with development”, and systematically formulates human resources policies conducive to the sustainable development of the company. Comprehensively improve the level of human resource management from five dimensions: organization system, cadre system, talent system, value evaluation system and value distribution system. Build a “three in one and four unified forces” human resources organization, fully implement the “four modernizations” strategy, take “morality, ability, diligence and performance” as an important standard for employees to “select, educate, use and stay”, and build and improve a comprehensive training system and systematic incentive mechanism to provide assistance and support for the company’s overseas business. 4. Corporate culture
The company has always attached importance to the construction of corporate culture. With the mission of “committed to the development of new energy and building a better life for mankind”, the company is determined to become the world’s most valuable comprehensive service provider of new energy materials, advocate the core values of “truth-seeking, self-discipline, innovation and enterprising, open cooperation, excellence and win-win”, and strive to cultivate employees’ proactive style and sense of responsibility. Adhering to the tenet of “customer first and pursuit of perfection”, the company practices the innovative concept of “learning from materials and stopping at the best” and the quality concept of “technology changes the world and quality determines the future”. Create a harmonious, civilized and progressive internal atmosphere and improve the soft power of the company. We should strengthen publicity work, run the company’s website and WeChat official account. Expand the construction of corporate culture around the entrepreneurial spirit of “scientist dream, craftsman spirit and entrepreneurial feelings”. In addition, the company also publicizes the corporate culture by organizing various characteristic theme activities such as Zhongwei sports meeting and Zhongwei book club, continues to pay attention to the material life of employees, enriches the spiritual and cultural life of employees, so that employees have more sense of gain and happiness, and work hard and go all out in their respective posts to build a pollution-free, sustainable, efficient Low cost human beings contribute to a better life.
5. Social responsibility
For a long time, in strict accordance with the provisions of relevant national laws and regulations, the company has earnestly implemented the concept of scientific, healthy and sustainable development. Combined with the actual situation of the company, the company has formulated the employee safety manual, safety production responsibility system, environmental monitoring and control procedures in terms of safety production, quality, environment, occupational health, anti-corruption, etc Occupational health monitoring and archives management system for workers, supervision and management system, management system for clean government construction and other systems and related processes are used to standardize work safety, product quality management, environmental protection and resource conservation, employee rights and interests protection, anti fraud and other work. Gradually establish relevant management system and pass the third-party certification. Implement the safety production responsibility system while strictly controlling and inspecting the quality, pay attention to environmental protection, energy conservation and consumption reduction while pursuing economic benefits, and emphasize integrity and discipline and purify the business environment on the premise of fully protecting the legitimate rights and interests of employees. The company takes promoting social harmony as its duty, earnestly performs its social responsibilities and obligations to customers, consumers, natural resources, environment, employees and other stakeholders, and realizes the harmonious development of the enterprise and society.
6. Internal audit
The board of directors of the company has established an audit committee and formulated the rules of procedure of the audit committee. The audit committee is responsible for the communication, supervision and verification of the company’s internal and external audit, so as to realize the effective supervision of the company’s financial revenue and expenditure and various business activities. 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 of the company has an audit department, which is equipped with full-time auditors and a person in charge of audit, and has the professional ability to carry out audit work independently. The company has formulated the internal audit system, and the audit department inspects and supervises the authenticity and integrity of the company’s financial information and the establishment and implementation of the internal control system. The audit department is responsible to the audit committee and reports its work to the audit committee. The work of the audit department covers all business links related to financial reports and information disclosure in the company’s business activities, including but not limited to: Sales and collection, procurement and payment, inventory management, fixed assets management, fund management, investment and financing management, human resources management, information system management and information disclosure management. The audit department shall independently inspect and evaluate the integrity, rationality and effectiveness of the internal control system related to the above matters. For internal control defects found in the review process, urge relevant responsible departments to formulate rectification measures and rectification time, conduct follow-up review of internal control, and supervise the implementation of rectification measures. The rectification and supervision work will be included in the annual internal audit work plan. If the audit department finds defects in internal control during the review process, it will report to the audit committee in a timely manner. The effective implementation of the company’s internal audit related work has further improved the company’s internal control and governance structure, and promoted and ensured the effective operation of internal control.
(III) risk assessment
In order to standardize the internal control risk management of the company, timely identify and manage the risks related to the internal control objectives of the company, promote the sustainable, healthy and stable development of the company and achieve the business objectives, the company has formulated the risk management system. The board of directors of the company sets relevant business objectives, financial reporting objectives, compliance objectives and asset safety and integrity objectives according to the strategic objectives, and reasonably determines the overall risk tolerance of the company and the acceptable risk level at the specific business level according to the set objectives. The management of the company is responsible for clearly communicating the strategic objectives, business objectives and risk management objectives to each center and department, and decomposing the objectives to each centralized management department. The Audit Department of the company is responsible for formulating the risk assessment plan and implementing the risk assessment. It mainly identifies the relevant risk factors through discussion, questionnaire survey, case analysis and consulting the opinions of professional institutions, summarizes and draws lessons from the past experience of the company and the experience of the same industry, and focuses on high-risk and multiple risk factors, Comprehensively, systematically and continuously collect information related to internal and external risks. For the identified risks, the combination of qualitative and quantitative methods is used to analyze the risk matters. Risk analysis fully absorbs professionals, forms a risk analysis team, and carries out work according to strict and standardized procedures to ensure the accuracy of risk analysis results. According to the risk analysis, the company determines the risk response strategies and solutions in combination with the risk causes, the overall risk tolerance of the company and the acceptable risk level at the specific business level, so as to ensure the smooth operation of the company as a whole and achieve the management goal of controllable risk. The selection of risk response strategy fully considers the risk preference of personnel at all levels to avoid major losses to the company’s operation due to personal risk preference.
(IV) control activities
In order to ensure the effective implementation of internal control in operation and management, ensure the realization of control objectives and control risks within an acceptable range, the company has implemented a series of internal control measures. include:
1. Incompatible job separation control measures: the company will analyze and sort out the incompatible jobs involved in each business process before job setting, consider the control requirements of incompatible job separation, implement corresponding separation measures, and form a working mechanism of performing their duties, assuming their responsibilities and mutual restraint.
2. Control measures for authorization approval: the company has clear approval authority and process for all businesses to be approved, and defines the scope of authority, approval procedures and corresponding responsibilities for each post to handle businesses and matters. The daily approval business of the company and its subsidiaries is automatically controlled on the information platform to ensure the efficiency and effect of authorization approval control.
3. Accounting system control measures: the company strictly follows the national unified accounting standards
