Self evaluation report on internal control in 2021
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 company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, 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 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 Hainan Haiyao Co.Ltd(000566) , Haikou Pharmaceutical Factory Co., Ltd., Chongqing Tiandi Pharmaceutical Co., Ltd., Jiangsu Pujian Pharmaceutical Co., Ltd., Hunan Lianqiao Yaodu Pharmaceutical Co., Ltd., Shanghai lishengte Medical Technology Co., Ltd., Hunan hongxingtang Pharmaceutical Co., Ltd. The total assets and operating income of the units included in the evaluation scope account for 100% of the company’s consolidated financial statements.
The main businesses and matters included in the evaluation scope include organizational structure, corporate culture, social responsibility, development strategy, human resources management, fund management, raised funds management, investment management, guarantee business, financial report, related party transaction, asset management, procurement business management, sales business management, research and development, production management, engineering project management, contract management, subsidiary management, internal audit management Information system and information disclosure.
The high-risk areas concerned by the company mainly include fund management, guarantee business, asset management, financial reporting, procurement business management, sales business management, research and development.
The internal control of the above businesses and matters covers the main aspects of the company’s operation and management, and there is no major omission.
(II) main businesses and matters included in the scope of evaluation
1. Organizational structure
The company has established a standardized corporate governance structure and rules of procedure in accordance with the requirements of relevant laws and regulations such as the company law, the securities law, the guidelines for the governance of listed companies and the articles of association, clarified the responsibilities and authorities in decision-making, implementation and supervision, and formed a scientific and effective division of responsibilities and check and balance mechanism. The company has formed a decision-making, operation management and supervision system based on the general meeting of shareholders, the board of directors, the board of supervisors and the management. The general meeting of shareholders, the board of directors, the board of supervisors and the company’s management perform their respective duties, coordinate, restrict and standardize the operation, and safeguard the interests of investors and the company.
The general meeting of shareholders is the highest authority of the company, which deliberates and makes decisions on major matters of the company in accordance with the terms of reference specified in the articles of association. The Party committee of the company gave full play to its leading role, faced with the new situation and new tasks of enterprise reform and adjustment, insisted on serving the production and operation without deviation, and promoted the performance of the main responsibility of comprehensively and strictly administering the party. When deciding on major matters of the company, the board of directors shall listen to the opinions of the Party committee of the company in advance. The board of directors of the company is the decision-making body of the company, which consists of four special committees: Strategy Committee, nomination committee, salary and assessment committee and audit committee to deal with relevant issues. The board of supervisors of the company is the supervisory body of the company, which inspects the financial situation of the company in accordance with the terms of reference specified in the articles of association, and supervises and inspects the performance of duties by the directors and senior managers of the company. The company’s management is responsible for the daily operation and management of the company, formulating the company’s overall development strategic plan, annual business plan and investment plan, financial budget and final settlement plan, profit distribution plan, internal management organization setting plan, basic management system, employment, salary, assessment, reward and punishment and dismissal of the company’s employees, formulating the company’s specific rules, reviewing and submitting them to the general meeting of shareholders, the board of directors Proposals or work reports and other important matters submitted by the board of supervisors.
2. Corporate culture
The company vigorously carries out the construction of publicity and corporate culture. Advocate the team spirit of “passionate, in the state, dare to take responsibility and act”, establish a “striver oriented” corporate culture system and promote it in various forms, so that employees can see the enterprise prospect, personal development opportunities and their own value, and stimulate the work enthusiasm and enthusiasm of cadres and employees at all levels. The majority of employees have a better understanding of the advantages and potential of the enterprise, laid an ideological foundation for the completion of the company’s budget objectives, created a good corporate cultural atmosphere and created a good development environment.
3. Social responsibility
The company strictly abides by national laws and regulations, treats the society, cooperative institutions and employees with good faith, returns investors, customers, employees and society with the achievements of development, and develops harmoniously and win-win with the society.
4. Development strategy
The company has established a strategy committee under the board of directors, and designated the strategic development department to be responsible for strategic management and perform corresponding responsibilities. The company actively implements the “14th five year plan” development plan and the “one main and multiple” strategy, defines the development direction and objectives of the enterprise, adheres to the three missions of “protecting the army, emergency and serving the people”, and takes high-quality development as the theme to build a first-class comprehensive pharmaceutical enterprise.
5. Human resources management
The company adheres to the principle of people-oriented and system based management. According to the labor law, labor contract law and other relevant laws and regulations, combined with the actual situation of the company, the company continues to optimize and improve the human resource management system, and makes clear provisions on human resource development plan, staffing, employee training, salary calculation and distribution, welfare guarantee, performance management and other matters. The company has effectively controlled key links such as personnel recruitment, personnel turnover, salary management and performance appraisal management, so as to provide human resources guarantee for the further development of the company in the future and realize the common growth and development of the company and employees.
6. Fund management
The company has effectively controlled and standardized all process links of fund activities, formulated a series of fund management systems, strengthened the management and control of fund business, comprehensively strengthened the management of online banking and U shield, strengthened the management of payment and settlement, and strictly fulfilled the approval procedures. If the operation of large amount of funds is involved, the company’s “three important and one large” decision-making procedure shall be performed as required. The company further implements the main responsibility of fund management to ensure the safe and effective operation of enterprise funds.
7. Management of raised funds
The company has formulated the measures for the management of raised funds, which clearly stipulates the storage, use, change, management, supervision and information disclosure of raised funds. In addition to the above, the information related to the raised funds disclosed by the company is timely, true, accurate and complete, and there is no violation of the stock listing rules of Shenzhen Stock Exchange and the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange.
8. Investment management
In order to standardize the company’s investment management behavior, give full play to the function of capital operation and prevent investment risks, the company has formulated the foreign investment management system and investment management measures, defined the approval limits and procedures of the general meeting of shareholders, the board of directors and the general manager’s office meeting for the company’s major investments, and established corresponding management regulations on the scope of investment, approval authority, implementation management, disposal control, information disclosure, etc. Strictly implement various systems and regulations in daily investment activities. If major project arrangements are involved, perform the company’s “three important and one large” decision-making procedures as required.
9. Guarantee business
In order to standardize the company’s external guarantee behavior, effectively control the company’s external guarantee risk and ensure the safety of the company’s assets, the company has formulated the management measures for financing guarantee in accordance with relevant national laws, regulations, normative documents and the articles of association, which stipulates the guarantee object, amount, approval authority, decision-making procedures and safety measures, so as to control the external guarantee risk. The company strictly implemented the external guarantee review procedure. In 2021, there was no illegal provision of external guarantee.
10. Financial reporting
The company has formulated accounting measures, financial accounting report management measures and financial analysis management measures, standardized the main business processes such as the preparation and review of financial reports and accounting treatment in strict accordance with the provisions of accounting laws and regulations and the national unified accounting standards system, and defined the company’s accounting policies, accounting, financial report preparation and other treatment procedures and division of responsibilities, Standardized the relevant information disclosure behavior.
In terms of preparation of financial reports, the preparation format of the company’s financial reports meets the requirements of laws and regulations, the businesses occurred in the current period are fully reflected in the financial reports, the consolidation scope is accurately defined, and the consolidation offset is complete and accurate, so as to ensure the authenticity, integrity and accuracy of financial information disclosure.
In terms of financial report analysis, the company has established a financial report analysis mechanism to comprehensively analyze the company’s main business indicators, asset liability structure, asset quality, profit and cash flow, so as to timely and accurately grasp the company’s production and operation information and provide correct and reasonable supporting information for the management’s business decision-making. 11. Related party transactions
By formulating the measures for the administration of connected transactions, the company defines the content, implementation authority, approval procedures, disclosure and other related matters of connected transactions, and stipulates the scope, decision-making procedures and information disclosure of connected transactions, so as to ensure that connected transactions are carried out under the conditions of “fairness, impartiality, openness, equal compensation and not deviating from the price or charging standard of independent third parties in the market”, so as to ensure the legitimacy and Fairness and rationality. 12. Asset management
The company has formulated the measures for inventory management, the measures for fixed assets management and the measures for intangible assets management, which clearly stipulates the business process and approval authority of key links such as material in and out of warehouse management, finished product in and out of warehouse management and warehouse inventory counting management, as well as the procurement, daily management, inventory counting and scrap disposal of fixed assets and intangible assets, and standardizes the asset management process, Asset management risks are effectively monitored. 13. Procurement business management
By formulating the bidding management measures and procurement management measures, the company standardizes the bidding management in the procurement business, strengthens the effective control of the procurement work, improves the procurement efficiency and the accuracy of purchased materials, and reduces the procurement cost. The procedures and approval authority of key business links such as purchase plan approval, bidding and price inquiry and comparison, purchase acceptance and settlement, purchase payment and supplier management are clearly specified.
The company prepares and purchases the purchase plan based on the sales plan, production plan and safety stock of raw materials. The company selects suppliers by reviewing suppliers and establishing a list of qualified suppliers; At the same time, bidding procurement, inquiry and price comparison procurement and other methods shall be adopted to compare quality and price. After the materials pass the acceptance, the purchasing department will start the settlement process through the ERP system after checking the documents. During the reporting period, the company continued to strengthen the control of procurement approval, bidding and price inquiry and comparison, further reducing the procurement cost and capital occupation cost, and controlling the procurement business risk.
14. Sales business management
The company has formulated relevant sales management systems such as sales plan management system, customer credit management measures, sales price management regulations, delivery management and process regulations, sales agreement and contract signing management regulations and accounts receivable management system, which are responsible for sales price management, agent management, credit management, sales contract management, delivery management The workflow and approval authority of key links such as accounts receivable management are clearly stipulated.
During the reporting period, the company formulated reasonable sales policies, defined the annual sales objectives, pricing principles and settlement methods, established a revenue recognition system, made clear provisions on sales and collection, designed strict control procedures for the signing of contracts, contract performance, sales delivery, invoicing and payment collection, and regularly reconciled with customers. All key business processes were implemented in accordance with the system.
15. Research and development
The company has formulated the management measures for scientific research projects, management measures for scientific and technological cooperation projects, guiding principles for scientific research management, management measures for scientific research funds and other systems, which have made clear provisions on R & D project initiation, approval, process monitoring, outsourcing management, file collection, patent management and other links, strengthened the whole process control of R & D projects and avoided the risk of R & D activities. In 2021, the company vigorously maintained the R & D investment intensity, steadily promoted the development of generic drugs, clinical research and consistency evaluation of innovative drugs, and actively promoted the development platform of artificial cochlea.
16. Production management
Production management can strictly implement GMP specifications and industry standards, and produce qualified products in accordance with approved processes and operating procedures. Ensure that all product process procedures are verified before production, and all operating procedures, equipment and air conditioning auxiliary facilities are verified regularly to ensure that they meet the intended purpose, strict plan and process specification. Personnel, equipment, raw and auxiliary materials, process technology and production environment are under control, and the production process, quality management and supervision management are increasingly strengthened.
17. Project management
The company has formulated the management measures for engineering construction and the management measures for the operation of project team and other systems, which clearly stipulates the management process and approval authority of project plan initiation, bidding, cost policy and budget (settlement) review, on-site construction, engineering material management, completion acceptance and other links. During the reporting period, the company focused on strengthening the management of project approval, bidding and project implementation, improving the efficiency of project management, and effectively monitoring other links of project construction.
18. Contract management
The company has formulated the contract management measures and supporting implementation rules for the negotiation, approval authority, signing, implementation, change and termination of the contract, as well as the contract
