Shanghai Smith Adhesive New Material Co.Ltd(603683)
Performance report of the audit committee of the board of directors in 2021
Members of the audit committee of the board of directors:
The audit committee of the board of directors of Shanghai Smith Adhesive New Material Co.Ltd(603683) (hereinafter referred to as “the company”) has conscientiously performed its duties of audit supervision in accordance with the relevant provisions of the standards for the governance of listed companies of China Securities Regulatory Commission, the guidelines for the self discipline supervision of listed companies of Shanghai stock exchange No. 1 – standardized operation, the articles of association, and the detailed rules for the work of the audit committee. The performance of the audit committee of the board of directors in 2021 is reported as follows:
1、 Basic information of the audit committee of the board of directors
The audit committee of the third session of the board of directors of the company is composed of independent director Ms. Wu Xiaoping, independent director Mr. Yu Yingfeng and director Mr. Zhou Xiaonan, of which Ms. Wu Xiaoping is the chairman.
Mr. Yu Yingfeng, an independent director of the company, proposed to leave the company in February 2022. The company held the 19th meeting of the third board of directors on February 24, 2022, deliberated and adopted the proposal on by election of candidates for non independent directors of the third board of directors. The board of directors elected Ms. Chen Guosong as an independent director and served as a member of the audit committee. Meanwhile, the proposal will be submitted to the first extraordinary general meeting of shareholders in 2022 for deliberation. Ms. Chen Guosong’s term of office is from the date of deliberation and adoption of the first extraordinary general meeting of shareholders in 2022 to the date of expiration of the third board of directors.
At present, the third audit committee is composed of Ms. Wu Xiaoping, Mr. Yu Yingfeng and Mr. Zhou Xiaonan, of which Ms. Wu Xiaoping is the chairman.
The audit committee is responsible for internal audit and supervision of the company’s financial revenue and expenditure and economic activities, and mainly exercises the following functions and powers:
1. Supervise and evaluate the work of external audit institutions;
2. Guide the internal audit work;
3. Review and comment on the company’s financial report;
4. Evaluate the effectiveness of internal control;
5. Coordinate the communication between management, internal audit department and relevant departments and external audit institutions;
6. Other matters authorized by the board of directors and other matters involved in relevant laws and regulations.
2、 Meetings of the audit committee of the board of directors
During the reporting period, the audit committee of the board of directors of the company held eight meetings. All members were diligent and conscientious, fully expressed their opinions on the matters under consideration, and submitted them to the board of directors for consideration after voting. The details are as follows:
Date of deliberation and approval of the proposal at the session
The third board of directors reviewed the proposal on the fifth capital increase and related party transactions of the Planning Committee of Sande application materials (Shenzhen) Co., Ltd. on January 29, 2021
meeting
Financial statement report of 2020
The third board of directors reviewed the 2020 annual report and its summary
On April 16, 2021, the sixth proposal of the Planning Commission on the renewal of Tianheng Certified Public Accountants (special general partner meeting)
Performance report of the audit committee in 2020
2020 internal control evaluation report
The third session of the board of directors
On April 27, 2021, the seventh meeting of the Planning Committee on the full text and text of the company’s report for the first quarter of 2021
Proposal on adjusting the number of shares reviewed by the third board of directors and repurchase price of restricted stock incentive plan in 2020
On June 21, 2021, the eighth meeting of the Planning Commission issued the proposal on repurchase and cancellation of restricted shares granted to some incentive objects but not yet lifted at the meeting
Proposal on adjusting the number of reserved shares in 2020 restricted stock incentive plan
The third board of directors reviewed the proposal on granting some reserved restricted shares to incentive objects for the ninth meeting of the Planning Committee on July 19, 2021
meeting
The third session of the board of directors
The tenth semi annual report of the company in 2021 and its summary issued by the Planning Committee on August 18, 2021
meeting
The third session of the board of directors
The 11th report of the third quarter of 2021 of the company issued by the Planning Commission on October 26, 2021
Meeting
The third board of directors reviewed the proposal on granting the remaining reserved restricted shares to the incentive objects at the 12th session of the Planning Committee on December 17, 2021
Meeting
3、 Performance of relevant work of the audit committee of the board of directors
1. Supervise and evaluate the work of external audit institutions
During the reporting period, the audit committee communicated with Tianheng Certified Public Accountants (special general partnership) (hereinafter referred to as “Tianheng”) for many times, negotiated and determined the 2020 financial report audit plan, discussed the major matters and treatment methods in the audit, and urged the annual audit accountant to arrange the work progress in strict accordance with the plan to ensure the smooth completion of the audit work. Tianheng staff showed good professional ethics and professional quality in the annual audit of the company. In order to ensure the continuity of the company’s audit work, the audit committee recommends that Tianheng be reappointed as the company’s audit institution in 2021.
2. Guide internal audit
During the reporting period, the audit committee carefully reviewed the company’s internal audit work plan, recognized the feasibility of the plan and the standardization of the process, and actively urged the company’s internal audit institutions to implement it in strict accordance with the audit plan.
After reviewing the relevant materials of internal audit, it is considered that the internal audit can operate effectively, and no major problems are found in the internal audit.
3. Responsible for the communication between internal audit and external audit
During the reporting period, the audit committee actively communicated fully and effectively with the company’s management, internal audit department and Tianheng: pay attention to strengthening the communication with the certified public accountant, the company’s financial department and internal audit department on the annual audit plan before the entry of the annual audit certified public accountant; Review the company’s financial and accounting statements again after the annual audit CPA issues the preliminary audit opinion, and timely communicate with the accountant about the problems found in the audit. Through good and effective communication, we can find and solve problems in time, improve audit efficiency and reduce audit cost.
4. Review the company’s financial report and give opinions
During the reporting period, the members of the audit committee carefully reviewed the company’s financial report and believed that the company’s financial report was true, complete and accurate without fraud, fraud and material misstatement. The content and format of the financial report comply with the provisions of China Securities Regulatory Commission and Shanghai Stock Exchange, and fairly reflect the company’s financial position, operating results and cash flow in all major aspects.
5. Review the company’s internal control system and evaluate the effectiveness of internal control
The company has established a relatively perfect corporate governance structure and governance system in accordance with the company law, securities law and other laws and regulations and the requirements of the relevant provisions of the CSRC and Shanghai Stock Exchange. During the reporting period, the company strictly implemented various laws, regulations, rules, articles of association and internal management systems, and standardized the operation of the general meeting of shareholders, the board of directors, the board of supervisors and the management, effectively protecting the legitimate rights and interests of the company and shareholders.
6. Coordinate the communication between the management, internal audit department and relevant departments and external audit institutions. During the reporting period, in order to ensure the timely, full and effective communication between the management, internal audit department and relevant departments and Tianheng, the audit committee actively coordinated through regular meetings, irregular meetings and other communication methods to ensure the high-quality and efficient completion of various audit work.
4、 Overall evaluation
During the reporting period, all members of the audit committee of the board of directors actively participated in the meetings of the audit committee, carefully considered various proposals and issued relevant opinions or suggestions. The members of the audit committee, in accordance with the guidelines for self regulation and supervision of listed companies of Shanghai Stock Exchange No. 1 – standardized operation and the working rules of the audit committee formulated by the company, diligently and effectively supervised the external audit of listed companies, guided the internal audit work of the company, and the professional deliberation opinions provided by the Audit Committee provided necessary professional support for the scientific decision-making of the board of directors.
In 2022, all members of our audit committee will continue to perform their duties faithfully and diligently in accordance with regulatory regulations and relevant provisions of the company, pay close attention to the company’s internal audit, as well as the communication, supervision and verification of internal and external audit, constantly improve and improve the company’s internal control system, give full play to the functions of the audit committee, and make unremitting efforts to safeguard the common interests of all shareholders of the company.
Shanghai Smith Adhesive New Material Co.Ltd(603683) board of directors audit committee March 29, 2022
