Betta Pharmaceuticals Co.Ltd(300558)
Internal control evaluation report in 2021
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 internal control system and evaluation methods of the company (hereinafter referred to as the company), 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 for the evaluation of the internal control 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.
Factors of effectiveness evaluation conclusion
□ applicable √ not applicable
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. 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 scope of evaluation include:
Betta Pharmaceuticals Co.Ltd(300558) (the company), Beijing beimeituo new drug research and Development Co., Ltd., Beida amjin Pharmaceutical Co., Ltd., Beida investment (Hong Kong) Co., Ltd., Zhejiang Beida Diagnostic Technology Co., Ltd., kanangi Pharmaceutical Technology (Shanghai) Co., Ltd., Beida dream workshop (Hangzhou) Innovation Technology Co., Ltd., Beida dream workshop Holding Co., Ltd., Beida dream workshop (Zhejiang) pharmaceutical Holding Co., Ltd Beida Pharmaceutical (Shengzhou) Co., Ltd., xcavery holdings, Inc., xcavery Betta pharmaceuticals, Inc., equinox Sciences LLC, merxy, Inc. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators
The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements
The total operating income of the units included in the evaluation scope accounts for 100% 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:
Internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, including company level, business process level and management process level. The company level includes: internal environment, risk assessment, information and communication, internal supervision; The business process level includes: purchase, sales, inventory, etc; The management process level includes: fixed assets, capital, budget, human resources, costs, financial reports, etc.
4. High risk areas of focus mainly include:
The sales volume of products is less than expected, the progress of new drug R & D projects is less than expected, the accounting scope of R & D expenditure and the judgment risk of capitalization time point, the safety and supervision risk in production, the risk of construction cost collection and fund payment of engineering projects, the operation and management risk of overseas subsidiaries, etc. 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
□ yes √ no
7. Other explanatory matters
nothing
（2） Basis of internal control evaluation and identification standard of internal control defects
The company organizes the internal control evaluation according to the enterprise internal control standard system and the relevant provisions of the company’s internal control system and evaluation methods. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
The board of directors of the company distinguished the internal control of financial report from the internal control of non-financial report according to the identification requirements for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the previous years. 2. Identification standard of internal control defects in financial reporting
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
(1) Major defects: fraud of directors, supervisors and senior managers; Failure of internal control environment; Correct the misstatement of the issued and announced financial report; Material misstatement in the current financial report found by the certified public accountant but not identified by the internal control; The supervision of the audit committee and the internal audit department on the internal control of financial reports is invalid; The amount of accounting error directly affects the nature of profit and loss; The regulatory authorities ordered the company to correct the errors in the previous annual financial reports.
(2) Significant deficiencies: failure to select and apply accounting policies in accordance with GAAP; Failure to establish anti fraud procedures and control measures; No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control; There are one or more defects in the control of the financial reporting process at the end of the period, and there is no reasonable guarantee that the prepared financial statements truly, accurately and completely reflect the financial situation of the company. (3) General defects: except for major defects and important defects, other local ordinary defects that will not have a significant and important impact on the company.
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
(1) Major defects: the amount of accounting errors involving assets and liabilities is greater than or equal to 5% of the total assets, and the absolute amount exceeds 5 million yuan; The amount of accounting errors involving net assets is greater than or equal to 5% of the total net assets, and the absolute amount exceeds 5 million yuan; The amount of accounting errors involving income is greater than or equal to 5% of the total income, and the absolute amount exceeds 5 million yuan; The amount of accounting errors involving profits is greater than or equal to 5% of the net profit, and the absolute amount exceeds 5 million yuan.
(2) Important defects: the amount of accounting errors involving assets and liabilities accounts for less than 5% of the total assets, but greater than or equal to 2%, and the absolute amount exceeds 2 million yuan; The amount of accounting errors involving net assets accounts for less than 5% of the total net assets, but greater than or equal to 2%, and the absolute amount exceeds 2 million yuan; The amount of accounting errors involving income accounts for less than 5% of the total income, but greater than or equal to 2%, and the absolute amount exceeds 2 million yuan; The amount of accounting errors involving profits accounts for less than 5% of the net profit, but greater than or equal to 2%, and the absolute amount exceeds 2 million yuan.
(3) General defect: it does not constitute other defects other than the quantitative standard of major defects and important defects.
The financial index values mentioned in the above quantitative standards are the latest audited consolidated statement data of the company. 3. Identification standard of internal control defects in non-financial reporting
The qualitative criteria for the evaluation of internal control defects in non-financial reports are as follows:
(1) Major defects: major mistakes caused by decision-making procedures; Lack of institutional control or systematic failure of important businesses, and lack of effective compensation mechanism; Serious loss of middle and senior managers and senior technicians; Major defects in internal control are not rectified timely and effectively; Other defects that may have a significant negative impact on the company.
(2) Important defects: General mistakes caused by decision-making procedures; Defects in important business control system; Serious loss of business personnel in key positions; Important defects in internal control are not rectified timely and effectively, and other defects that may have a great negative impact on the company.
(3) General defects: the efficiency of decision-making procedure is not high; Defects in general business system control; Serious loss of personnel in general posts; General defects in internal control were not rectified timely and effectively.
The quantitative criteria for the evaluation of internal control defects in non-financial reporting are as follows:
(1) Major defect: the amount of direct loss may be greater than or equal to 5% of net assets.
(2) Important defect: the amount of direct loss may be less than 5% of net assets but greater than or equal to net assets
(3) General defect: when the amount of direct loss may be less than 2% of net assets, it is recognized as a general defect.
The financial index values mentioned in the above quantitative standards are the latest audited consolidated statement data of the company. （3） 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 any major defects in internal control over financial reporting during the reporting period
□ yes √ no
1.2. Important defects
Whether the company has any significant defects in internal control over financial reporting during the reporting period
□ yes √ no
1.3. General defect
There may be some 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 company’s financial report. 1.4. Whether there are major defects in the company’s internal control report on the benchmark date of rectification, and whether there are major defects in the company’s internal control report
□ yes √ no
1.5. On the benchmark date of the internal control evaluation report, does the company have 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
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period
□ yes √ no
2.3. General defect
There may be some 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 company’s financial report. The specific rectification is as follows:
Rectification effect of general defect rectification measures
On the basis of the internal control evaluation report, the instruments are purchased, and the attached gifts involved are subject to management on the quasi date. The attached gifts need to be improved. The attached gifts are included in the scope of warehouse in and out management. The warehouse in and out records have been made, and the rectification has been completed
On the basis of the internal control evaluation report, the supplier management mechanism of medical test is updated, and the supplier SOP management system is mainly accurate. It is clear that the project management needs to be updated and sorted out. The division of responsibilities includes the setting of supplier management functions, the staffing of suppliers, the need for daily management, and the scope of bidding for specific project suppliers, Perfect the inspection and evaluation cycle of suppliers and other aspects, and complete the rectification
On the basis of the internal control evaluation report, the on-site settlement, review and confirmation of the on-site construction of the meeting and the date of the meeting have been carried out by specially assigned personnel. The on-site confirmation procedures to be improved have been checked, and the meeting has been signed for confirmation, and the settlement of the list has been carried out
