Zhejiang Zhengguang Industrial Co.Ltd(301092) : self evaluation report on internal control in 2021

Zhejiang Zhengguang Industrial Co.Ltd(301092)

Self evaluation report on internal control in 2021

Zhejiang Zhengguang Industrial Co.Ltd(301092) 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 normative system"), combined with the internal control system and evaluation methods of Zhejiang Zhengguang Industrial Co.Ltd(301092) (hereinafter referred to as the "company" or " Zhejiang Zhengguang Industrial Co.Ltd(301092) "), 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 to establish a sound and effective internal control system 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.

The company has no factors affecting the evaluation conclusion of internal control effectiveness from the benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report.

3、 Internal control evaluation

(I) basis of internal control evaluation

This internal control self-evaluation is based on the basic norms of enterprise internal control, supporting guidelines for enterprise internal control, guidelines for evaluation of enterprise internal control, guidelines for standardized operation of companies listed on the gem of Shenzhen Stock Exchange and other requirements, combined with the company's internal control system and evaluation methods, based on the environment and the characteristics of its own operation, and on the basis of daily and special supervision of internal control, Evaluate the effectiveness of the design and operation of the company's internal control as of December 31, 2021.

(II) 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 Zhejiang Zhengguang Industrial Co.Ltd(301092) , Ningbo Zhengguang resin Co., Ltd., Hangzhou Zhengguang resin Sales Co., Ltd., Hangzhou shuteng industry and Trade Co., Ltd., Ningbo hanjiete liquid separation technology Co., Ltd. and Jingmen Zhengguang New Material Technology 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.

1. Internal control environment

(1) Corporate governance structure and organizational structure

In accordance with the company law of the people's Republic of China (hereinafter referred to as the "company law"), the securities law of the people's Republic of China (hereinafter referred to as the "Securities Law") and other relevant national laws and regulations and the requirements of regulatory authorities, the company has reasonably set up an organizational structure that meets the needs of the company's business scale and operation and management, including the management system of the general meeting of shareholders, the board of directors, the board of supervisors and the management. The company has formulated the articles of association, rules of procedure of the general meeting of shareholders, rules of procedure of the board of directors, working system of independent directors, rules of procedure of the board of supervisors, decision-making system of connected transactions, external guarantee management system and other systems, clarified the responsibilities and authorities in decision-making, implementation and supervision, and formed a scientific, effective and reasonable division of responsibilities and check and balance mechanism.

The general meeting of shareholders is the highest authority of the company, which deliberates and makes decisions on major matters such as the company's business policies, investment plans and major transactions, and exercises voting rights according to law. The general meeting of shareholders of the company shall exercise its powers in strict accordance with the articles of association and the rules of procedure of the general meeting of shareholders.

The board of directors is responsible for the general meeting of shareholders and is composed of 7 directors, including 3 independent directors and one chairman. The board of directors is the company's business decision-making body, which consists of four special committees: Audit Committee, strategy committee, nomination committee and salary and assessment committee. It has formulated the implementation rules of corresponding professional committees and defined their respective responsibilities and authorities in the corporate governance structure. The of the board of directors of the company has faithfully performed the rights and obligations conferred by the company law and the articles of association. Each special committee is responsible to the board of directors, performs its duties in accordance with the articles of association and the authorization of the board of directors, and operates well. The independent directors of the company can conscientiously perform the functions and powers of the independent directors, ensure the scientificity of the decisions of the board of directors and safeguard the rights and interests of small and medium-sized investors in accordance with the requirements of the company law, the articles of association, the working system of independent directors and other laws, regulations and systems.

The board of supervisors is responsible to the general meeting of shareholders and is the supervision organization of the company. It is responsible for supervising the directors, general manager and other senior managers of the company to perform their duties according to law, and supervising and inspecting the company's financial status and internal control standard system. The board of supervisors faithfully performed the rights and obligations conferred by the company law and the articles of association in accordance with the law. The management of the company is responsible for the daily operation and management of the company. According to the needs of business development, internal control and its own characteristics, the company sets up functional departments such as technical service department, production and operation Department, sales department, logistics department, quality department, finance department, human resources department, procurement department, administration department and audit department, including subordinate holding subsidiaries. All departments carry out work according to the provisions of department responsibilities, with clear division of labor and perform their respective duties Each has its own responsibilities, cooperates with each other, restricts and supervises each other.

(2) Development strategy

The company aims to become a "world-class ion exchange resin manufacturer" and continuously improve product quality and brand image. The company will continue to follow the principles of market demand-oriented, customer service-based, technological innovation as the driving force and capital market as the booster. Continuously increase R & D investment, improve innovation ability, optimize product structure, and strengthen the construction of "glory" brand. Seize the development opportunities brought by China's economic and industrial structure adjustment and technological upgrading, further expand production capacity, improve the market share of products, and establish its leading position in the ion exchange resin industry. Focusing on the development strategy of "technological innovation and brand marketing", the company strives to reach the international advanced level in technology, scale, efficiency, management, talents and services according to its own characteristics and advantages and in combination with the trend of economic development at home and abroad.

(3) Human resources

"Attaching importance to technology, respecting talents and taking R & D and innovation as the driving force of enterprise development" is the hard truth of enterprise sustainable development. The company has established and implemented more scientific personnel management systems such as recruitment, employment, assessment, salary, reward and punishment and promotion. Through the combination of external introduction and internal training, the company continues to strengthen the introduction of high-end talents at home and abroad, improve the quality of employees, improve the talent structure, establish an echelon talent team suitable for the company's development strategy, and strengthen the vocational training and ability training of employees, Organically combine the career planning of employees with the development planning of the company, strive to create a mechanism and environment to attract, retain and encourage talents to stand out, attract and encourage excellent talents to serve the company for a long time, and provide human resources guarantee for the overall development strategy of the company.

(4) Corporate culture

The company adheres to "people-oriented, scientific and technological innovation and sustainable development", protects the interests of employees, stimulates the potential of employees, improves the quality of employees, promotes the innovative development of enterprises, adheres to "quality-oriented, excellence and excellence", strictly controls quality, is responsible for customers, adheres to "harmony-oriented, care for the environment and win-win cooperation", and actively creates a good social environment and development space to make the interests of enterprises, customers The interests of society and employees should be harmonious and perfect.

(5) Social responsibility

The company attaches importance to the performance of social responsibilities. In the process of operation and business development, the company takes efficiency, consumption reduction, energy conservation and pollution reduction as the principles of environmental protection, complies with the all-round development of the country and society, and strives to achieve the coordination of economic and social benefits, short-term and long-term interests, self-development and social development, so as to realize the healthy and harmonious development of the company and employees, the company and society, the company and the environment.

2. Risk assessment and control

According to the set control objectives, the board of directors of the company comprehensively, systematically and continuously collects relevant information, timely analyzes and discusses, determines the corresponding risk tolerance in combination with the actual situation, carries out regular risk assessment, and accurately identifies the internal and external risks related to the realization of the control objectives. For the identified acceptable risks, the combination of qualitative and quantitative methods is adopted to analyze and rank the identified risks according to the possibility of risk occurrence and its impact degree, so as to determine the focus of attention and priority control risks.

According to the results of risk identification and risk analysis, combined with risk tolerance, weigh the risks and benefits, determine the coping strategies of various risks, and control the risks within an acceptable range. At the same time, the company takes appropriate and effective control measures according to the risk preferences of directors, managers, other senior managers and employees in key positions, so as to avoid major losses to the operation of the enterprise due to personal risk preferences. At the same time, the comprehensive use of risk avoidance, risk reduction, risk sharing and risk tolerance and other risk response strategies to achieve effective risk control.

3. Internal control activities

According to the risk assessment results, the company adopts corresponding control measures to control the risk within the tolerable range. The details are as follows:

(1) Control measures

① Incompatible job separation control

When formulating the responsibilities of each post, the company fully considered the control requirements of incompatible job separation, implemented corresponding separation measures when formulating specific business processes and job responsibilities, and formed a working mechanism of performing their duties, assuming their responsibilities and mutual restriction.

② Authorization approval control

According to the specific business process and actual needs, the company adopts different authorization controls, defines the scope, authority, procedures, responsibilities and other relevant contents of authorization and approval, and requires the management personnel at all levels of the unit to exercise the corresponding authority within the scope of authorization, and the handling personnel must also handle economic business within the scope of authorization. For major businesses and matters, a collective decision-making examination and approval or joint signing system shall be implemented. No individual may make decisions alone or change collective decisions without authorization.

③ Accounting control system

The company strictly implements the accounting standards, strengthens the basic work of accounting, establishes a standardized accounting and monitoring system, defines the processing procedures of accounting vouchers, accounting books and financial accounting reports, and ensures the authenticity and integrity of accounting materials. The company has set up an accounting organization, equipped with accounting practitioners, and formulated relevant financial systems, covering basic accounting work, revenue and expenditure and custody of monetary funds, sales and collection, procurement and payment and other financial accounting businesses, so as to ensure the accuracy, security and reliability of accounting and records and their data.

④ Property protection control

The company has established the daily use management and regular inventory system of property, including property records, physical storage, regular inventory, account verification and other measures, and clarified the specific workflow and division of rights and responsibilities through the system to ensure the safety of the company's property.

⑤ Performance appraisal control

The company has established and implemented a performance evaluation system, scientifically set up an evaluation index system, regularly and objectively evaluate the performance of all responsible departments and all employees within the enterprise, and take the evaluation results as the basis for determining employees' salary, job promotion, excellent evaluation and job transfer.

(2) Main internal control activities

① Fund management

The company has formulated financial approval regulations, fund management system, reserve fund management system, financial report management system and other systems and regulations to standardize the company's fund-raising, investment and capital operation activities. The company has established strict authorization review procedures for daily fund management business, and clarified the responsibilities and authorities of relevant departments and posts in the links of monetary fund revenue and expenditure management and expense reimbursement, so as to ensure that incompatible posts have been separated, and there is a mutual restriction relationship between relevant departments and personnel, so as to ensure the safety of fund operation.

② Sales and collection

The company has formulated sales management system, customer management system, sales contract review management system, accounts receivable management system and other systems and regulations, and defined the quotation, approval, sales and collection procedures of products. The sales department shall constantly adjust the strategy according to the changes of the market environment, collect the latest market information, and strengthen the accuracy, timeliness and guidance of the market forecast. All market demand information will be transformed in time to adjust the rhythm of production, procurement and logistics.

③ Procurement and payment

The company has set up a procurement department to engage in the procurement management business of materials and materials. The company has formulated the management system of procurement department, which defines the procedures of material requisition, approval, procurement, acceptance and payment. The company conducts regular assessment on suppliers and determines a number of high-quality suppliers through appropriate price comparison to ensure the stability of raw material supply. The payment for goods shall be carried out in strict accordance with the terms of the contract, the rights and responsibilities of the payment link shall be clear, and the payment matters shall be implemented after being approved by the financial manager, the general manager or the chairman.

④ Asset management

The company has formulated the fixed assets management system, inventory management system and other corresponding systems, made relevant provisions on the purchase, acceptance, storage, use, maintenance, borrowing, transfer and disposal of assets, standardized the business process and implemented it in strict accordance with the rules and regulations, so as to effectively control the key links of asset management. The company regularly or irregularly organizes personnel to conduct regular inventory of fixed assets and inventories and verify book records to ensure the safety and integrity of the company's property.

⑤ Management of raised funds

In order to regulate the management and use of raised funds and protect the interests of investors, the company has formulated the Zhejiang Zhengguang Industrial Co.Ltd(301092) raised funds management system in accordance with the provisions of the company law, the securities law, the GEM Listing Rules of Shenzhen Stock Exchange, the requirements for the supervision of the management and use of raised funds of listed companies and other relevant laws and regulations, and in combination with the actual situation of the company The recommendation institution and the deposit bank of the raised funds shall manage and supervise the raised funds, so as to ensure the legality and compliance of the use of the raised funds and protect the interests of investors.

The board of directors of the company raised funds in 2021