Orient Securities Company Limited(600958) underwriting sponsor Co., Ltd
About Jinhe Biotechnology Co.Ltd(002688)
Verification opinions on self-evaluation report of internal control in 2021
Orient Securities Company Limited(600958) underwriting and recommendation Co., Ltd. (hereinafter referred to as “Oriental Investment Bank” or “recommendation institution”) as the recommendation institution of Jinhe Biotechnology Co.Ltd(002688) (hereinafter referred to as ” Jinhe Biotechnology Co.Ltd(002688) ” or “company”) for non-public issuance and listing of A-Shares in 2021, in accordance with the administrative measures for securities issuance and listing recommendation business and the stock listing rules of Shenzhen Stock Exchange (revised in 2022) The self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 13 – recommendation business and other relevant provisions have verified the Jinhe Biotechnology Co.Ltd(002688) 2021 annual internal control self-evaluation report (hereinafter referred to as the “internal control evaluation report”), and the verification opinions are as follows: I. verification of recommendation institutions
The recommendation institution has consulted the articles of association, the rules of procedure of the third board of directors, the working rules of the audit committee, the internal audit system, the information disclosure management system, the company’s internal control and management and other rules and regulations, as well as the meeting materials of the general meeting of shareholders, the board of directors and the board of supervisors, the opinions of independent directors and other information disclosure documents of the company; Communicated with directors, supervisors, senior managers, financial department, internal audit department and other departments of the company; Based on the reasonable evaluation of the integrity, rationality and effectiveness of the company’s internal control, the internal control evaluation report issued by the board of directors of the company was checked. 2、 Internal control evaluation conclusion
According to the identification of major defects in the company’s internal control over financial reporting, on the benchmark date of the internal control evaluation report, the company has no major defects in the internal control over financial reporting. 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.
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main businesses and matters included in the evaluation scope, including: capital, procurement, assets, sales, production, financial management, comprehensive budget, contract management, information system construction, internal and external information and communication, internal supervision, etc.
The high-risk areas of focus mainly include: capital, procurement, production, warehousing, sales, financial management, contract management, personnel management in key positions, etc.
The above businesses and matters included in the evaluation scope basically cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) objectives of internal control system
1. Establish and improve the internal organizational structure that meets the requirements of modern company management, and form a scientific decision-making mechanism, execution mechanism and supervision mechanism to ensure the realization of the company’s operation and management objectives;
2. Establish an effective risk control system, strengthen risk management and ensure the normal and orderly operation of the company’s business activities;
3. Establish a good internal control environment of the company, block loopholes, eliminate hidden dangers, prevent and timely discover and correct errors and fraud, and protect the safety and integrity of the company’s assets;
4. Standardize the accounting behavior of the company, ensure the authenticity and integrity of accounting materials, and improve the quality of accounting information; 5. Ensure the implementation of relevant national laws and regulations and the company’s internal rules and regulations.
(III) principles followed by the company in establishing internal accounting control system
1. Internal accounting control complies with relevant national laws and regulations, relevant internal control norms issued by relevant departments and the actual situation of the company;
2. Internal accounting control can restrict all personnel involved in accounting work within the company, and no individual shall have the power to go beyond internal accounting control;
3. Internal accounting control can cover all economic businesses and relevant posts related to accounting work within the company, and implement the key control points in the process of business processing to decision-making, implementation, supervision, feedback and other links;
4. Internal accounting control can ensure the reasonable setting of institutions and posts involved in accounting work and the reasonable division of responsibilities and authorities within the company, adhere to the separation of incompatible posts, and ensure that different institutions and posts have clear rights and responsibilities, restrict and supervise each other;
5. When establishing internal accounting control, the company follows the cost-benefit principle to achieve the best control effect with reasonable cost control;
6. Internal accounting control can be continuously revised and improved with the change of external environment, the adjustment of business functions and the improvement of management requirements.
（4） Internal control elements of the company
Based on the basic concept of standardized operation, the company actively strives to create a good control environment, which is mainly reflected in the following aspects: the communication and implementation of integrity and moral values, the emphasis on competence, the management’s business philosophy, the distribution of authority and responsibility, human resources policies and practices, and social responsibility.
(V) risk assessment process
During the formulation of the company’s development strategic objectives, the company employs professional consulting companies to analyze and evaluate the company’s strategy, actively face and deal with the threatening and opportunistic risks in line with the company’s strategic development direction, avoid all risks caused by engaging in speculative business, and reasonably ensure that all risks affecting the strategic objectives are controlled within the acceptable range in combination with the company’s risk preference and risk tolerance, Provide effective guarantee for the realization of the company’s overall strategic objectives.
(VI) control activities
Based on the requirements of the basic norms of enterprise internal control on control activities, the company has formulated nearly 90 internal control management systems for capital activities, procurement business, asset management, sales business, research and development, engineering projects, guarantee business, business outsourcing, financial reporting, comprehensive budget, contract management, senior management code of conduct and other contents, so as to strictly control all business links. The company’s financial management system specifically stipulates investment and financing, capital operation, procurement and storage, low value consumables, creditor’s rights and debts, fixed assets, cost management, expenses, etc., and avoids the company’s business risks from the internal control links and system level. 4、 Basis of internal control evaluation and identification standard of internal control defects
The board of directors of the company studied and determined the specific identification standards of internal control defects applicable to the company according to the identification requirements of major defects, important defects and general defects of the enterprise internal control standard system, combined with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, and kept consistent with the previous years. The identification standards of internal control defects determined by the company are as follows:
(I) it is found that directors, supervisors and senior managers have committed major fraud in the company’s management activities; (II) it is found that there is a material misstatement in the current financial statements, but the internal control fails to find the misstatement in the process of operation;
(III) the supervision of the company’s audit committee and internal audit institution on internal control is invalid;
(IV) ineffective control environment;
(V) major defects found and reported to the management are not corrected within a reasonable time; (VI) administrative penalties imposed by securities regulatory authorities due to accounting errors.
The following situations (including but not limited to) are identified as “major defects” and strong signs of “major defects”:
(I) fraud of personnel in key positions;
(II) failure of compliance supervision function and violation of laws and regulations may have a significant impact on the reliability of financial reports;
(III) it has been reported to the management, but after a reasonable period of time, the management still fails to correct the important defects.
The company has no major defects or important defects in internal control. 5、 Description of other major matters related to internal control
The company has no explanation of other major matters related to internal control. 6、 Verification opinions of the recommendation institution
After verification, the sponsor believes that: Jinhe Biotechnology Co.Ltd(002688) has maintained effective internal control in all major aspects in accordance with the requirements of the enterprise’s internal control standard system and relevant regulations, and has been effectively implemented, Jinhe Biotechnology Co.Ltd(002688) internal control evaluation report truly and objectively reflects the construction and operation of its internal control system.
(no text below)
(there is no text on this page, which is the signature and seal page of the verification opinions of Orient Securities Company Limited(600958) underwriting recommendation Co., Ltd. on Jinhe Biotechnology Co.Ltd(002688) 2021 annual internal control self-evaluation report)
Sponsor representative (signature):
Han Yang Huang Jian
Orient Securities Company Limited(600958) underwriting and recommendation Co., Ltd. mm / DD / yyyy
