Shenzhen Cotran New Material Co.Ltd(300731)
Self evaluation report on internal control in 2021
Shenzhen Cotran New Material Co.Ltd(300731) all shareholders:
In accordance with the basic norms of enterprise internal control and other provisions jointly issued by the Ministry of finance, China Securities Regulatory Commission (hereinafter referred to as "CSRC") and other departments, as well as the relevant requirements of the guidelines for self discipline supervision of listed companies on Shenzhen Stock Exchange No. 2 - standardized operation of companies listed on GEM, and in combination with the internal control system and evaluation methods of Shenzhen Cotran New Material Co.Ltd(300731) (hereinafter referred to as "the company" or "the company"), On the basis of daily and special supervision of internal control, we 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'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.
2、 Conclusion on the effectiveness of internal control
According to the identification of internal control defects in the company's financial report, no major defects and important defects in the internal control of the financial report were found on the benchmark date of the internal control evaluation report. 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. The board of Directors believes that the company has maintained effective internal control over financial reporting and non-financial reporting in all major aspects in accordance with the requirements of the enterprise's internal control standard system and relevant regulations.
3、 Internal control evaluation
(I) evaluation scope of internal control
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. Main units included in the scope of evaluation
On the benchmark date of internal control evaluation report (December 31, 2021), the company and its subsidiaries: Wuxi Kuncheng New Material Technology Co., Ltd., Jiangsu jinxinhui Offshore Engineering Technology Research Institute Co., Ltd., Shenzhen Yuanchuang Lexin heat dissipation Material Co., Ltd., Cotran International Co., limited, Cotran Latin americaltda, Wuxi Shenzhen Cotran New Material Co.Ltd(300731) Technology Co., Ltd., shuchuang communication (Shanghai) Co., Ltd Suzhou ruitaike heat dissipation technology Co., Ltd., Shenzhen hangchuang seal Co., Ltd., Huizhou hangchuang seal Co., Ltd., Wuhu hangchuangxiang Road Auto Parts Co., Ltd.
2. Main operations and matters included in the scope of evaluation
(1) Corporate governance and organizational structure
In strict accordance with the requirements of the company law, the securities law, the guidelines for the governance of listed companies and other laws and regulations, the company has established and improved the corporate governance structure, established a modern enterprise system, standardized the company's operation, formulated or revised the rules of procedure of the general meeting of shareholders, the rules of procedure of the board of directors, the rules of procedure of the board of supervisors and other rules and regulations, and formulated the decision-making methods for major matters. The perfect corporate governance structure ensures the standardized and efficient operation of the company and meets the normative requirements of the CSRC on corporate governance structure. At the same time, a series of internal management processes have been established, and the established systems and processes have been effectively implemented. The details of corporate governance are as follows:
Shareholders and general meeting of shareholders: the general meeting of shareholders is the highest authority of the company. The company holds the general meeting of shareholders in strict accordance with the requirements of the articles of association and the rules of procedure of the general meeting of shareholders to ensure that all shareholders enjoy equal status and can fully exercise their corresponding rights. An ordinary resolution made at the general meeting of shareholders shall be adopted by more than half of the voting rights held by the shareholders (including shareholders' agents) attending the general meeting of shareholders; A special resolution made at the general meeting of shareholders shall be adopted by more than two-thirds of the voting rights held by the shareholders (including their agents) attending the general meeting of shareholders. The company is independent of shareholders in terms of business, assets, personnel, institutions and finance, and fully protects the rights and interests of all shareholders. The general meeting of shareholders of the company also hired lawyers to attend and witness, and the operation is standardized.
Directors and the board of directors: the company elects directors in strict accordance with the relevant provisions of the company law and the articles of association. Independent directors account for more than one third of the total number of directors. The composition of the board of directors meets the requirements of laws, regulations and the articles of association. The board of directors of the company has four special committees: Audit Committee, strategy committee, salary and assessment committee and Nomination Committee. The board of directors of the company carries out its work in strict accordance with the articles of association and the rules of procedure of the board of directors.
Supervisors and board of supervisors: the company elects supervisors in strict accordance with the relevant provisions of the company law and the articles of association. The composition of the board of supervisors meets the requirements of laws, regulations and the articles of association. The board of supervisors of the company performed its duties in accordance with the requirements of laws and regulations and the articles of association, strengthened the supervision function of the company's directors, senior managers and finance, and safeguarded the rights and interests of the company and all shareholders.
In order to effectively plan, coordinate and control business activities, the company has reasonably determined the form and nature of organizational units, implemented the principle of incompatibility and separation, scientifically divided the responsibilities and authorities within each organizational unit, and formed a mutual check and balance mechanism.
(2) Establishment of internal audit institutions
The Audit Department of the company is directly responsible to the audit committee of the board of directors. Under the guidance of the audit committee, the audit department independently exercises its audit functions and powers without interference from other departments and individuals. The audit department is equipped with full-time auditors to conduct internal audit on the operation and management, financial status and internal control implementation of the company and its subsidiaries, and make reasonable evaluation on the authenticity, rationality and legitimacy of its benefits.
(3) Corporate culture
Through years of development, the company has gradually built a set of corporate culture system covering values, codes of conduct and ethics, and formed the core corporate values of customer-centered, striver oriented, honest cooperation and professional innovation within the company. This innovative corporate culture has been recognized and accepted by all employees, and has been transformed into practical conscious action in practical work, Become the common values and code of conduct of all employees and the force to promote the development of the company.
(4) Human resources policy
The company regards human resource development as the fundamental development power of the company, attaches great importance to the construction of talent team, fully respects, understands and cares about employees, implements employees' career planning, and shapes employees into professional talents through scientific training, and adheres to the common growth and development of the enterprise and employees.
The company implements the full staff labor contract system, formulates a systematic human resource management system, makes detailed provisions on personnel employment, employee training, salary, welfare guarantee, performance appraisal, internal transfer and job promotion, and establishes a perfect performance appraisal system.
(5) Fund management
The company has formulated rules and regulations such as monetary fund management system, financial management system and provisions on financial approval authority, established strict authorization and approval procedures for monetary revenue and expenditure and custody business, standardized the company's accounting and financial management, and ensured the authenticity and reliability of financial information. Cashier, examination and approval and audit shall be performed by different posts to ensure the separation of incompatible posts, realize mutual restriction between posts, and strengthen the audit of fund receipt and payment to ensure the safety of monetary funds.
(6) Procurement and expense and payment activities
In order to standardize the procurement, expense reimbursement and payment activities, the company has formulated the financial management system, authorization management system, procurement management system and other relevant management systems, reasonably set up the institutions and posts of procurement and payment business, established and improved the control procedures of procurement and payment, and defined the responsibilities and approval authorities for purchase requisition, approval, procurement, acceptance, payment and other links, so as to achieve quality and price comparison procurement, The procurement decision-making is transparent, and a price supervision mechanism has been established to plug the loopholes in the procurement link as much as possible. The payment of accounts payable and prepayments by the company can only be made after the relevant procedures are completed. In terms of payment, try to make payment on a monthly basis as planned. In terms of payment method control, in addition to purchasing goods from individuals who cannot transfer and paying cash if the transfer amount is less than the starting point, the payment for goods is generally settled by bank transfer or bank acceptance bill. The finance department regularly checks the data with the procurement department to ensure the accuracy of accounts payable data.
The company has formulated budget and expense reimbursement management regulations, defined the authority of managers at all levels, timely and accurately reflected the company's expense implementation through expense reimbursement implementation analysis, which ensures the normal operation of the company's operation and management, and is conducive to the company's achievement of business objectives and profit plans.
(7) Sales and collection activities
In order to promote the steady growth of the company's sales, expand market share, standardize sales behavior and prevent sales risks, the company has formulated relevant management systems such as sales management measures and contract management system. According to the above system and in combination with the actual situation of the company, the company has formulated a more feasible sales policy, which clearly stipulates the pricing principles, credit standards and credit conditions, collection methods, responsibilities and authorities of sales personnel and other relevant contents. The company has standardized a series of work from accepting customer orders to arranging and organizing the source of goods, delivering goods, confirming revenue and managing accounts receivable. The company has assigned the responsibility of collection to the sales department and regarded the recovery of sales payment as one of the main assessment indicators to ensure the normal development of the company's sales business and the timely and safe recovery of payment.
(8) Fixed assets management
The company has formulated internal control system, financial management system and other systems to standardize the management of fixed assets. According to the principle of centralized management, the principle of division of responsibilities among the user department, management department and financial department shall be implemented. The user department and management department shall be directly responsible for the management of physical objects, and the financial department shall be responsible for accounting, supervision, assessment and inspection. It stipulates the purchase, acceptance, use and maintenance, transfer, scrapping and other related processes, and makes an inventory at the end of each year to ensure the consistency of accounts, cards and materials, so as to ensure the safety and integrity of assets and the consistency of accounts and facts.
(9) Financial management and reporting activities
According to the accounting standards for business enterprises issued by the Ministry of finance, the financial management system of the company is formulated in combination with the specific situation of the company. The financial management system clearly stipulates and standardizes the company's accounting principles, current assets management, fixed assets management, intangible assets and other assets management, investment management, fund-raising management, cost and expense management, operating income management, profit and profit distribution management, foreign currency business management, financial accounting report, financial analysis system, liquidation management system, etc, It ensures that the financial department prepares the accounting statements and notes to the accounting statements in accordance with the relevant provisions of the national accounting standards, and timely and accurately reflects the financial status and operating results of the enterprise. At the same time, combined with the financial analysis, the problems in the process of the company's business operation are summarized, and the company organizes all business departments to communicate timely and effectively, so as to ensure the normal progress of all businesses.
(10) Management of holding subsidiaries
The company clearly requires the subsidiaries to operate in accordance with the relevant provisions of the company law, strictly abide by the articles of association and other relevant provisions, and implement effective internal control over the subsidiaries on the premise of ensuring independent operation, so as to ensure the safety and integrity of the parent company's investment and the authenticity and reliability of the consolidated financial statements.
(11) Related party transactions
In order to regulate the economic behavior between related parties and ensure that the rights and interests of the company are not harmed, the company has formulated the authorization management system and related transaction management system, which clarify the definition of related parties, pricing, approval, implementation and information disclosure of related transactions, and can strictly control the occurrence of related transactions. During the reporting period, the company carried out all-round management and control of the company's connected transactions in strict accordance with the articles of association, authorization management system, connected transaction management system and other relevant documents.
(12) External guarantee
In order to strengthen enterprise guarantee management and prevent guarantee business risks, the company has formulated authorization management system and external guarantee management system to standardize external guarantee behavior, control external guarantee risks, and protect the legitimate rights and interests of shareholders and the company's financial security. The company also standardizes external guarantee in strict accordance with the articles of association, authorization management system and external guarantee management system. In 2021, the guarantee for the subsidiary Suzhou ruitaike heat dissipation technology Co., Ltd. was added.
(13) Raised funds
The company has formulated the management system for raised funds, which clearly stipulates the storage, use and approval procedures of the special account for raised funds, purpose adjustment and change, management supervision and accountability, so as to ensure the special use of raised funds. (14) Major investment
In order to strengthen the decision-making and management of the company's investment and strictly control the investment risk, the company has formulated the foreign investment management system, which clearly stipulates the principles and forms of the company's foreign investment, the proposal, approval, investment operation and management, and the supervision of investment projects. The company implements the responsibility system for major investment decisions, defines the approval procedures for investment, and adopts the mechanism that different investment amounts are decided by different levels of authority, which reasonably ensures the efficiency of foreign investment and ensures the safety and efficiency of investment funds.
Since the establishment of the joint stock company, the company's major investment decisions and approval procedures have fully complied with the relevant provisions of the articles of association, and the corresponding legal approval procedures have been performed in accordance with the provisions.
(15) Information communication
The company identified the office of the board of directors as the Department responsible for investor relations management, and actively used the interactive platform of investor relations management to strengthen communication with all kinds of investors through direct and indirect ways. The company pays attention to the role of the general meeting of shareholders and ensures the realization of the rights of all shareholders to attend, speak and vote from the perspective of legal procedures.
(16) Information disclosure
In order to protect investors' right to obtain the company's information according to law, the company has formulated the information disclosure management system in accordance with the relevant provisions of the CSRC and the stock exchange. The company will strictly comply with the information disclosure management system and relevant regulations of the CSRC and the stock exchange
