Guangdong Kitech New Material Holding Co.Ltd(300995) : self evaluation report on internal control in 2021

Guangdong Kitech New Material Holding Co.Ltd(300995)

Self evaluation report on internal control in 2021

Guangdong Kitech New Material Holding Co.Ltd(300995) all shareholders:

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 Guangdong Kitech New Material Holding Co.Ltd(300995) (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 of the 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、 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

(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. The main units included in the evaluation scope include the company's headquarters and its subordinate departments, its subsidiaries Zhongshan bangsu Precision Plastic Co., Ltd., Guangdong bangsu automobile precision mould Co., Ltd., Guangdong Baby Angel children's products Co., Ltd., Shaoguan bangsu Technology Co., Ltd. and Qide Technology (Hong Kong) Co., Ltd. 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, and the total operating revenue accounts for 100% of the total operating revenue in the company's consolidated financial statements; The main operations and matters included in the scope of evaluation include:

1. Internal environment

(1) Governance institutions

In accordance with the provisions of the company law, the securities law, the articles of association and other relevant laws and regulations, the company has established a "three board and one layer" corporate governance structure of the general meeting of shareholders, the board of directors, the board of supervisors and the management, formulated the rules of procedure and working rules of each meeting and established a power check and balance mechanism. The board of directors shall be responsible to the general meeting of shareholders and exercise the company's business decision-making power according to law; The board of supervisors shall inspect the company's finance according to law and supervise the legality and compliance of the company's directors and senior managers in performing their duties according to law; The management is responsible for organizing and implementing the resolutions of the general meeting of shareholders and the board of directors, and presiding over the production, operation and management of the enterprise. Among them, the board of directors has four special committees: Strategy Committee, audit committee, nomination committee and salary and assessment committee. The above-mentioned institutions have rules of procedure or working system corresponding to their functions to regulate their authority and responsibilities. The company has established and improved the corporate governance structure of the company, standardized the tenure management and performance of duties of directors, supervisors and senior managers, formed a scientific and effective division of responsibilities and check and balance mechanism, ensured the legal compliance of the company's operation and management, the safety of funds and assets, the authenticity, accuracy and integrity of information disclosure, actively assumed social responsibilities, and took effective measures to protect the legitimate rights and interests of investors, especially small and medium-sized investors.

(2) Organizational structure of the company

The company has set up the general meeting of shareholders, the board of directors, the board of supervisors, the general manager and other organizations in accordance with the provisions of the company law and the articles of association. The general meeting of shareholders is the authority of the company. The organizational structure of the company is as follows: (3) human resource management

In terms of human resource management, the company has established and improved the systems related to personnel management, and formulated the attendance system, employee recruitment and employment management process, director supervisor high salary management system, training and development management system, employee code of conduct and discipline system, which includes the relevant processes of employee leave system, allocation according to demand and recruitment system, The annual staff training schedule and incentive and punishment mechanism standardize the recruitment, employment, use and other procedures of employees, increase the attraction of talents, and strengthen the management of employees.

(4) Corporate culture

The company combines the construction of corporate culture with human resource management, emphasizes "heart-oriented operation", establishes close partnership, and forms a cultural atmosphere of friendly communication and mutual help; Pay attention to the cultivation of staff quality. The company has established a perfect staff training and development plan, created a learning organization and a continuous learning and innovation system, and actively created an enterprise cultural atmosphere suitable for talent competition and development; The company implements the business partnership system, develops together with the company, shares interests, and provides a growth sharing platform for all employees to trust wholeheartedly and realize value; The company instills the core content of the corporate culture into the employees' thoughts, and trains the employees' team spirit of dedication, professionalism and precision, so as to make the company a modern enterprise with a first-class talent team and high cohesion.

(5) Internal audit

The company has set up an internal audit department with full-time auditors. The internal audit department is directly responsible to the audit committee of the board of directors. Under the guidance of the audit committee, the internal audit department audits and supervises the establishment and implementation of the company's internal control system, the company's operation and financial situation, and independently exercises the power of audit and supervision.

(6) Social responsibility

Since its establishment, the company has taken giving back to the society as its responsibility and responsibility while pursuing enterprise development. The company has actively fulfilled its social responsibilities and formulated and implemented a series of policies and measures in terms of protecting shareholders' rights and interests, protecting employees' rights and interests, being responsible for customers and suppliers, safe production, environmental protection and so on. The company has been committed to giving back to the society with practical actions, actively participating in social public welfare undertakings and making due contributions to the country and society.

2. Risk assessment

According to the strategic objectives and development ideas, combined with the characteristics of the industry, the company has established a more systematic and effective risk assessment system. According to the set control objectives, comprehensively and systematically collect relevant information, accurately identify internal and external risks, and conduct risk assessment in time to make the risk controllable.

Minimize risk. 3. Control measures

(1) Responsibility separation control

The company has formulated a series of detailed post responsibility division systems for various departments and business processes, and the authorization and approval of various transaction businesses are separated from the specific handling personnel. For example, the accounting system and the financial management system stipulate that the cashier shall not concurrently be responsible for the audit, the custody of accounting files and the registration of income, expenditure, expenses, creditor's rights and debts; The company shall not handle the whole process of monetary capital business by one person, and the handling personnel of monetary revenue and expenditure shall be separated from the reviewers of monetary revenue and expenditure; The purchase of goods from non production departments shall be accepted or certified by another person other than the handler; The procurement control procedure stipulates that the supply chain department shall conduct procurement, and the quality department and warehouse shall conduct acceptance, etc.

(2) Authorization approval control

According to the size and nature of the transaction, the company adopts different authorization controls according to the articles of association and various management systems. General authorization shall be adopted for daily production and operation activities, which shall be approved level by level by each department according to the relevant authorization provisions of the company; Major transactions and non recurring business transactions (such as foreign investment, loans, etc.) shall be approved by the board of directors or the general meeting of shareholders in accordance with the relevant systems and regulations of the company.

(3) Accounting system control

In strict accordance with the requirements of the company law, accounting law, accounting standards for business enterprises and other laws and regulations and their supplementary provisions, the company has formulated corresponding financial management systems and relevant operating procedures, such as accounting system and financial management system, and defined various accounting work processes and accounting methods to ensure the accuracy, reliability and safety of accounting vouchers, accounting and records and their data. The company's accounting information system uses ERP system to carry out financial management of enterprise resources and control and protect accounting information. The company has set up more reasonable posts in financial accounting and equipped with corresponding financial personnel to ensure the smooth progress of financial and accounting work. The division of labor of financial and accounting personnel is clear, and each post can play a role of mutual restraint. The key responsibilities such as approval, execution and bookkeeping are divided by different authorized personnel, giving full play to the supervision function of accounting.

(4) Property protection control

According to various accounting policies and financial management systems, the Finance Department of the company conducts accounting treatment on the increase and decrease of currency, inventory and fixed assets, and determines the custodian or management department for physical assets. The company's fixed assets management system strictly restricts unauthorized personnel from contacting and disposing of assets, and controls the combination of regular property inventory and irregular random inspection, so as to achieve the consistency between accounts and reality. The company regularly purchases property insurance for fixed assets (including machinery and equipment, office equipment) and current assets to protect property and reduce risks.

(5) Operation analysis control

In the actual operation process, the management of the company regularly carries out operation analysis through factor analysis, comparative analysis, trend analysis and other methods for the comprehensive use of R & D, production, purchase and sales, finance and other information, so as to find problems and improve them in time.

3.2 high risk areas of focus include:

(1) Purchase and a / P control

The company authorizes the procurement department to be responsible for the company's material procurement business, formulate the procurement plan according to the company's sales plan and production plan, and implement the procurement under the guidance of the procurement plan. The payment required for procurement shall be made according to the terms agreed in the contract. The procurement personnel shall enter the order in the ERP system, review it by the authorized approver, confirm the warehousing, and submit it to the finance department for review before implementing the payment procedure. The purchasing personnel shall regularly check the accounts payable, prepayment and other current accounts with the supplier, and report the verification results to the finance department, which shall adopt appropriate procedures for review.

(2) Inventory management control

The company formulates the warehouse management system, inventory counting management system, warehouse fire safety management system and hazardous chemicals management system to comprehensively manage and control the inventory of goods, set up full-time warehouse management personnel, place monitoring and special key keeper, regularly overhaul fire-fighting facilities, and purchase insurance for materials and finished products. Finished products shall be entered into ERP system for warehousing, outbound or picking, which shall be approved and confirmed by the material department, quality assurance department and warehousing department, and the inventory shall be counted regularly.

(3) Fixed assets control

The company's workshop machinery and equipment are purchased by the procurement department authorized by the general manager. For fixed assets, the relevant system of responsibility for daily use of fixed assets is established, and reasonable fixed assets maintenance, overhaul plans and maintenance specifications are formulated. At the same time, the upgrading, transformation and evaluation management module of fixed assets are included.

(4) Import and export business control

The company has formulated the process management system for import and export activities to clearly regulate the control of the circulation process of imported bonded materials in the company. Guide daily operation. For departments closely related to customs affairs, including marketing center, material department, finance department, general management department and other departments, formulate relevant systems and processes of customs affairs management, which shall be implemented in accordance with the authorization, review and approval Provisions of the company. The import and export declaration, storage, requisition, storage of finished products and ex warehouse management of goods shall be in accordance with the company's internal control system and relevant provisions of customs management.

(5) Management and control of raised funds

In order to regulate the management and use of raised funds and protect the interests of investors, in accordance with the requirements of laws, regulations and normative documents such as the guidelines for the supervision of listed companies No. 2 - regulatory requirements for the management and use of raised funds by listed companies, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the guidelines for the self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of GEM listed companies, Combined with the actual situation of the company, the company has formulated the management system of raised funds, opened a special account for raised funds for the storage and use of raised funds, and strictly performed the use approval procedures.

(6) Sales and collection control

Combined with the actual situation, the company has improved the management system related to sales business, and clarified the responsibilities and approval authority of sales, delivery, collection and other links. The company regularly checks and analyzes the weak links in the sales process, and takes effective control measures to ensure the realization of sales objectives. The company issues sales invoices in strict accordance with the invoice management regulations. Various forms of accounts receivable and accounts receivable shall be checked with the company on a regular basis.

(7) Fund management control

In order to strengthen the supervision and management of the use of the company's funds and ensure the safety of funds, the company has formulated a financial approval system in accordance with the articles of association, rules of procedure of the general meeting of shareholders, rules of procedure of the board of directors, decision-making system of connected transactions, management system of external guarantee, management system of external investment and other provisions.

(8) Internal control of external guarantee

In order to safeguard the interests of the company's shareholders and investors, standardize the company's external guarantee behavior, control the operation risk of the company's assets, and promote the healthy and stable development of the company, in accordance with the company law, the guarantee law, the securities law, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of GEM listed companies and other relevant laws and regulations According to the provisions of normative documents and the articles of association, the company has formulated the external guarantee management system.

(9) Internal control of related party transactions

The company has established the related party transaction decision-making system, which clearly stipulates the basic principles, approval authority and decision-making procedures to be followed by related parties and related party transactions, standardizes the transaction behavior with related parties, and strives to follow the principles of honesty, impartiality, fairness and openness to protect the interests of the company and minority shareholders.

(10) Research and development control

The company focuses on strengthening the control of research and development business, and has formulated corresponding management systems in project initiation, R & D process management, acceptance, development and protection of research results. For the main risk points and key links in the R & D process, practical and effective control measures are formulated.

(11) Internal control over financial reporting

The company strictly implements the people's Republic of China