Company code: Xi’An Manareco New Materials Co.Ltd(688550) company abbreviation: Xi’An Manareco New Materials Co.Ltd(688550) Xi’An Manareco New Materials Co.Ltd(688550)
Internal control evaluation report in 2021
Xi’An Manareco New Materials Co.Ltd(688550) all shareholders:
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 of the internal control evaluation 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 significant 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. 4. Factors affecting the evaluation conclusion of internal control effectiveness from the base date of internal control evaluation report to the date of issuance of internal control evaluation report
□ 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
The company determines the main units, businesses and matters as well as high-risk areas included in the evaluation scope according to the risk oriented principle. 1. The main units included in the evaluation scope include Xi’An Manareco New Materials Co.Ltd(688550) , Weinan high tech Zone Haitai new electronic materials Co., Ltd., Shaanxi Pucheng Haitai new materials industry Co., Ltd., Weinan Ruilian Pharmaceutical Co., Ltd., Dali Xi’An Manareco New Materials Co.Ltd(688550) Materials Co., Ltd. and Dali Haitai new materials Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The ratio of the total assets of the units included in the evaluation scope to the total assets of the company’s consolidated financial statements 100
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:
The main businesses included in the evaluation scope include corporate governance, organizational structure and post responsibilities, human resource management, internal audit, development strategy, risk assessment, information and communication, internal supervision, fixed asset management, intangible asset management, sales management, procurement management, inventory management, fund management, guarantee business, investment management, tax management, technology and R & D management, related party transactions and financial report management, Comprehensive budget management, internal system management, safety management, contract management, etc. 4. High risk areas of focus mainly include:
Sales management, procurement management, inventory management, fixed assets management and engineering management. 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
None (II) Basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system and other internal control supervision requirements. 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 quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Total profit misstatement amount ≥ 3% of total profit ≤ misstatement amount ＜ total profit
5% amount ＜ 3% of 5% of total profit
The amount of misstatement of total assets ≥ 1% of total assets ≤ the amount of misstatement ＜ 2% of total assets ＜ 1% of 2% of total assets
explain:
nothing
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
1. Fraud of directors, supervisors and senior managers;
Major defects 2 The audit committee and internal audit department of the company have no effect on the supervision of internal control;
3. The internal audit function is invalid, the control environment is invalid, and major defects are not rectified in time;
4. Make major errors in the announced financial report and correct the misstatement.
1. Failure to select and apply accounting policies in accordance with generally accepted accounting standards;
2. Failure to establish anti fraud procedures and control measures;
Important defects 3 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;
4. There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.
General defects are other control defects except major defects and important defects.
explain:
None 3 Identification standard of internal control defects in non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Direct property loss ≥ 10% of total profits ≤ 5% of total profits ≤ loss 5% of total profits 10% of total profits
explain:
nothing
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
1. Major mistakes in the company’s decision-making procedures;
2. The absence of senior management personnel or the serious loss of core technical personnel of the company affect the continuous operation of the company with major defects;
3. The company’s important business lacks control system or the system is seriously ineffective, and lacks effective compensatory control.
1. The company’s decision-making procedures lead to general errors and losses;
2. Property losses caused by the company’s violation of internal rules and regulations;
Important defects 3 The loss of business personnel in key positions of the company is serious, which has an important impact on the sustainable operation of the company; 4. The company’s important business system or system has serious defects and lacks effective compensatory control; 5. Important or multiple general defects in the company’s internal control have not been corrected in time, resulting in losses.
1. Inefficient decision-making procedures of the company;
2. The company violates the internal rules and regulations, but no loss is caused;
General defects 3 Serious loss of personnel in general posts of the company;
4. There are defects in the company’s general business system or system;
5. The general defects of the company have not been rectified.
explain:
None (III) 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
nothing
1.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified
□ yes √ no 1.5 After the above rectification, 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
None 2.4 After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in non-financial reporting internal control that have not been rectified
□ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any important defects in the internal control of non-financial reporting that have not been rectified
□ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal defects in the previous year
□ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
√ applicable □ not applicable
In 2021, the company’s internal control was implemented effectively, and no major, important and general defects were found in financial reports and non-financial reports. In 2022, the company will continue to improve the internal control system, standardize the implementation of the company’s internal control system, strengthen the supervision and inspection of internal control, strengthen the publicity and training of internal control, improve the management level of internal control and ensure the long-term and healthy development of the company in strict accordance with the basic norms of enterprise internal control and supporting guidance documents and in combination with the actual production and operation of the company. 3. Description of other major events
□ applicable √ not applicable
Chairman (authorized by the board of directors): Liu Xiaochun Xi’An Manareco New Materials Co.Ltd(688550) April 15, 2022
