Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd
Self evaluation report on internal control in 2021
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 Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (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) scope of internal control evaluation
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 Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. and its subsidiary Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. Since Shantou wangchanggen dantongwang Joint Research Institute was cancelled on March 30, 2021 and has not actually carried out business activities since its establishment, it is not included in the scope of evaluation. 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 income accounts for 100% of the operating income in the company’s consolidated financial statements; The main operations and matters included in the scope of evaluation include:
1. 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 the articles of association, 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, the working rules of independent directors and other rules and regulations, and established a strategy committee, an audit committee The nomination committee, remuneration and assessment committee and other subordinate committees of the board of directors have made the general meeting of shareholders, the board of directors, the board of supervisors and the management independent of each other, with clear rights and responsibilities and mutual supervision, so as to realize the legal and effective operation of the corporate governance structure.
2. Corporate culture
The company is committed to becoming the most respected and outstanding enterprise, holding high the banner of “protecting human health with heart”, practicing the core values of “loyalty, struggle, innovation, integrity and responsibility”, and working hard for the society, employees and enterprises to achieve the goal of “symbiosis, CO creation and sharing”.
The company strives to create a relaxed and harmonious production and living environment for employees, promote the coordinated development of employees’ physical and mental health, and enhance the cohesion and centripetal force of employees by carrying out various amateur activities, outdoor activities, organizing trips, etc.
3. 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. In view of the possible changes in supervision and market environment, continuously and effectively identify and evaluate various possible risks, and actively take effective countermeasures to ensure the stable and healthy development of the company. 4. Human resources
The company has established relevant human resources management systems, which have detailed provisions on personnel recruitment, employee training, dismissal and resignation, salary, welfare guarantee, performance appraisal, promotion, rewards and punishments, so as to effectively protect the legitimate rights and interests of employees, help their career development, and ensure the stability of the company’s staff team and the sustainability of talent training.
5. Fund management
In order to ensure fund safety and strengthen fund management, the company has formulated a series of financial related systems such as fund management system in accordance with relevant national laws and regulations and in combination with the actual situation of the company, and strengthened internal control management and prevented fund risks by standardizing approval process, strengthening plan management, improving supervision mechanism and other measures.
6. Procurement and payment
The company has formulated the procurement management system, reasonably planned and implemented the organization and post responsibilities of procurement and payment business, controlled the source of materials, ensured the use of reasonable material cost and obtained the quality of various materials that meet the product requirements; Audit and evaluate suppliers and select qualified suppliers to ensure that the materials and services provided by suppliers can meet the requirements of the company.
7. Sales and collection
The company formulates the sales management system, defines the relevant responsible personnel and assessment requirements, standardizes the management of purchase and sales contracts, specifies the business processes such as billing and delivery, return and exchange, and sales collection, strengthens internal supervision, improves employees’ compliance awareness, and effectively controls risks.
8. Related party transactions
The company has formulated the related party transaction management system, which stipulates the related parties and related relationships, the identification of related party transactions, the basic principles of related party transactions, the examination and approval department of related party transactions, the deliberation procedures of related party transactions and the information disclosure of related party transactions, so as to ensure that the related party transactions concluded between the company and related parties comply with the principles of fairness, openness and impartiality, so as to reasonably ensure the legitimate rights and interests of the company’s shareholders. During the reporting period, there was no case that affiliated enterprises illegally occupied the company’s funds or damaged the interests of the company and non affiliated shareholders.
9. Internal information and communication
With the help of modern information platforms such as networked office system, the company can quickly share public information within the company, making the information transmission and communication between management levels, departments, business units and employees and management more rapid and smooth. Through the information disclosure management system, internal reporting system of major information and other systems, a complete information communication system has been established to clarify the collection, processing and transmission procedures and transmission scope of information related to internal control, ensure the reasonable screening, verification, analysis and integration of information, and ensure the timeliness and effectiveness of information.
The high-risk areas mainly include market competition risk, drug price fluctuation risk, product portfolio risk and business integration risk.
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, and there are no major omissions. (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 its supporting guidelines and other relevant documents.
According to the identification requirements of major defects, important defects and general defects of the enterprise’s internal control standard system, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company has determined the specific identification standards of the company’s internal control defects, which are consistent with the previous years. The identification standards of internal control defects determined by the company are as follows: 1. Identification standards of internal control defects in financial reports
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
The quantitative standard takes the total profit and total assets as the measurement standard. If the loss that may be caused or caused by the defect of internal control is related to the income statement, it shall be measured by the total profit index. Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index.
Defect level definition quantitative standard
It refers to the combination of one or more control defects, which may lead to 1) the amount of misstatement ≥ 1% of the total assets;
Major defects
Causing the enterprise to seriously deviate from the control objectives. 2) The amount of misstatement ≥ 5% of the total profit.
1) 0.5% of total assets ≤ misstatement amount ＜ assets refers to the combination of one or more control defects, which is serious
1% of the total amount;
The degree and economic consequences of major defects are lower than those of major defects, but there are still some problems
2) 3% of total profit ≤ misstatement amount ＜ total profit may cause the enterprise to deviate from the control target.
5% of the amount.
Other controls except major defects and major defects 1) the amount of misstatement is less than 0.5% of the total assets;
General defect
Defects. 2) The amount of misstatement is less than 3% of the total profit.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Signs of significant deficiencies in financial reporting include:
(1) Directors, supervisors and senior managers commit fraud;
(2) The supervision of the company’s audit committee and audit department on internal control is invalid;
(3) The external audit found that there were significant misstatements in the current financial report, but the company’s internal control failed to find such misstatements in the operation process.
(1) Failure to select and apply accounting policies in accordance with GAAP;
(2) No anti fraud procedures and control measures have been established.
General defects of financial report: internal control defects that do not constitute major defects and important defects. 2. 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:
The quantitative standard for the evaluation of internal control defects in non-financial reports shall be implemented with reference to the quantitative standard for the evaluation of internal control defects in financial reports.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
(1) Major decision-making procedures are unscientific;
(2) Violation of national laws, regulations or normative documents;
(3) Serious loss of middle and senior managers and senior technicians;
(4) Frequent negative news in the media;
(5) Lack of institutional control or systematic failure of important business;
(6) Major or important defects in internal control have not been rectified in time;
(7) Other situations that may have a significant negative impact on the company.
Other situations are identified as important defects or general defects according to the degree of influence. (III) identification and rectification of internal control defects 1. Identification and rectification of internal control defects in financial reports
According to the above identification standards of internal control defects in financial reporting, the company has no major defects and important defects in internal control of financial reporting during the reporting period. 2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reports, the company found no major defects and important defects in internal control of non-financial reports during the reporting period. 4、 Description of other major matters related to internal control
The company has no explanation of other major matters related to internal control.
Board of directors of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. April 21, 2002
