Jilin Zixin Pharmaceutical Co., Ltd.
2013 internal control self-evaluation report
All shareholders of Jilin Zixin Pharmaceutical Co., Ltd.:
According to the "Basic Standards for Internal Control of Enterprises" and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the internal control system of enterprises), combined with the internal control system and evaluation methods of the company (hereinafter referred to as the company), internal control of internal control Based on the special supervision, we evaluated the effectiveness of the company's internal control on December 31, 2013.
I. Important statement
In accordance with the provisions of the internal control system of the enterprise, it is the responsibility of the board of directors of the company to establish and improve the internal control, evaluate its effectiveness, and truthfully disclose the internal control evaluation report. The Board of Supervisors supervises the establishment and implementation of internal control by the Board of Directors. The manager is responsible for organizing and leading the day-to-day operations of the company's internal controls. The board of directors, the board of supervisors, directors, supervisors and senior management 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 responsibility for the truthfulness, accuracy and completeness of the contents of the report.
The goal of the company's internal control is to reasonably ensure the legality and compliance of business management, asset security, financial reporting and related information is true and complete, improve operational efficiency and effectiveness, and promote the realization of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving the above objectives. In addition, due to changes in circumstances that may lead to inappropriate internal controls or reduced compliance with control policies and procedures, it is risky to speculate on the effectiveness of future internal controls based on internal control evaluation results.
Second, the company's internal control objectives and principles
(1) The goal of internal control
1. Establish and improve the corporate governance structure and internal organizational structure in line with modern management requirements, and form a scientific decision-making mechanism, implementation mechanism and supervision mechanism to ensure the realization of the company's operational management objectives;
2. Establish an effective risk control system, strengthen risk management, and ensure the normal and orderly operation of the company's various business activities;
3. Avoid or reduce risks, plug loopholes, eliminate hidden dangers, prevent and promptly detect and correct various errors and frauds, and protect the safety and integrity of company assets;
4. Standardize the company's accounting behavior, ensure the accounting information is true and complete, and improve the quality of accounting information;
5. Ensuring the implementation of relevant national laws and regulations and the company's internal control system.
(2) Principles of internal control
1. The principle of legality: The internal control system must comply with relevant national laws and regulations, the internal control system of enterprises and the “Guidelines for the Standardized Operation of Listed Companies of the SME Board of Shenzhen Stock Exchange”, as well as the actual situation of the company;
2. The principle of comprehensiveness: The internal control system restricts all personnel within the company, all employees must comply with the implementation, and no department or individual may have the power to transcend internal control; the internal control system must cover all economic operations, various departments and each Positions, and for the key control points in the business process, to the decision-making, implementation, supervision, feedback and other aspects;
3. The principle of importance: internal control is based on comprehensive control, focusing on important business issues and high-risk areas;
4. The principle of checks and balances: The internal control system must ensure the reasonable establishment and division of labor of the company's institutions, positions and their duties and responsibilities, adhere to the separation of incompatible positions, and ensure that the rights and responsibilities of different agencies and positions are clearly defined, mutually restrained, and mutually supervised;
5. Cost-benefit principle: The formulation of the internal control system should follow the principle of benefit and achieve the best control effect with reasonable control costs;
6. Adaptability principle: The internal control system should be revised and improved continuously with changes in the external environment, adjustment of the company's business functions and management requirements.
Third, the company's internal control system
(1) Internal environment
1. Governance structure
In accordance with the "Company Law", "Articles of Association" and other relevant laws and regulations, the company has established a standardized corporate governance structure, clearly defining the duties and responsibilities of the shareholders' meeting, the board of directors, the board of supervisors, and the management. The company's board of directors has a nomination committee, an audit committee, a remuneration and evaluation committee, and a strategy and investment committee.
The institutions have clear rights and responsibilities, perform their duties, check and balance each other, make scientific decisions, and coordinate operations. In terms of corporate governance, the company has formulated major rules and regulations such as the Articles of Association, the Rules of Procedure for the General Meeting of Shareholders, the Rules of Procedure for the Board of Directors, the Rules of Procedure for the Supervisory Committee, the Rules for the Work of the General Manager, and the Rules for Independent Directors. In order to ensure the company's standard operation and healthy development.
2. Organizational structure
According to the needs of production and operation, the company has reasonably set up the internal management functions of the company. The general manager of the company is responsible for daily operation and management, and the deputy general manager is in charge of the different businesses in the operation, including the deputy general manager of the sales department and the supply department, the production and production management department, the engineering equipment department, the quality assurance department and the material control. Ministry, the financial controller manages the finance department, the general manager directly manages the office, the human resources department, the securities department and other departments. The responsibilities between the various functional departments are clear and mutually restrained.
3. Internal audit agency
The company has set up an audit and supervision department and is equipped with three full-time auditors. It is directly responsible to the board of directors. Under the guidance of the audit committee of the board of directors, it independently exercises auditing powers and is not subject to interference from other departments and individuals. The head of the Audit and Supervision Department is nominated by the Audit Committee and the Board of Directors is appointed and removed. It is equipped with a full-time auditor to conduct internal audits on all operations, financial status, and internal control execution of the company and its subsidiaries, and make a reasonable evaluation of the authenticity, rationality and legitimacy of its economic benefits.
4. Human resources policy
The company implements a full-employment labor contract system and has formulated a systematic human resource management system. It has detailed regulations on personnel recruitment, employee training, salary and salary, welfare guarantee, performance appraisal, internal transfer, job promotion, etc., and has established performance appraisal. system.
5. Financial management system
The company has formulated the "Financial Management System" based on the "Accounting Law", "Enterprise Accounting Standards", "Accounting Basic Work Standards" and other laws and regulations, and established a sound corporate accounting system, financial system, accounting work procedures and accounting positions. The work manual, as well as the strict cost control system, performance appraisal system, financial revenue and expenditure approval system, and expense reimbursement management system, have improved the financial management level and accounting information quality, strengthened the financial management of assets, and effectively prevented and resolved Financial risk.
6. company culture
Corporate culture is the soul of the company. The company adheres to the enterprise tenet of “Ting Shuren, Dezhi Brewing”, and adheres to the business philosophy of “Reality and Quality” and adheres to the management policy of “respecting knowledge, advocating science, excavating tradition and opening up new knowledge”, and regards the health of the world as purple. Xin's duties. The company's future development goals will inherit and carry forward the characteristics and advantages of traditional Chinese medicine, strive to tap the treasure house of Chinese medicine, realize technological innovation and industrial upgrading, base on the domestic market, open up the international market, and make the company more scientific, specialized, intensive and international. The pharmaceutical enterprise group has made progress and contributed to the development of China's traditional Chinese medicine industry.
(2) Risk assessment
1. assessment method
The company adopts a combination of quantitative and qualitative methods for risk analysis and assessment, and collects external risk factors such as economic situation, industrial policy, market competition and resource supply, as well as internal risk factors such as financial status, asset management and operation management. Management provides a basis for developing risk response strategies.
2. Risk identification and assessment
Through monthly high-level regular meetings, manager's office meetings and regular system meetings, the company timely identifies and evaluates various risks and difficulties in the company's operation and management process, and proposes countermeasures according to actual conditions, with particular attention to policy environment, production activities, procurement activities. , project construction activities, marketing activities, human resources activities, capital activities and system implementation, etc., and take timely assessment. If there are risk factors, the management timely organizes and formulates measures to deal with them.
3. Risk response
Through the formulation and implementation of various management systems, the company ensures that the “three sessions” and the managerial responsibilities and checks and balances mechanism can operate effectively, and the risk management is integrated into the daily management. In the daily operation and management process, the company fully evaluates and identifies the system risks, technical risks, operational risks and financial risks faced by the company. The decision-making procedures and rules of procedure established by the company are democratic, transparent, internal supervision and feedback system. Basically sound and effective.
(3) Internal control activities
1. Establish a sound system
Corporate Governance: In accordance with the provisions and requirements of the Company Law, the Securities Law and the Corporate Governance Guidelines for Listed Companies, the Rules of Procedure for the General Meeting of Shareholders, the Rules of Procedure for the Board of Directors, and the Rules of Procedure for the Supervisory Committee were formulated. , "Independent Directors' Rules", "Rules of Procedures for Professional Committees of the Board of Directors", "Administrative System for Information Disclosure", "Special Storage System for Raised Funds", "Preventing the Capital System for Major Shareholders and Related Parties", "Internal Control System for Venture Capital" Major rules and regulations such as "Internal Audit Management System", "Inside Information Insider Registration Management System", "Controlling Subsidiary Management System" and "External Guarantee Decision System" to ensure the company's standard operation and promote the healthy development of the company.
Accounting system: The company has established a standardized and complete financial management control system and related operational procedures, such as “Finance”, in accordance with the requirements of the “Company Law” for financial accounting and the provisions of the “Accounting Law” and “Enterprise Accounting Standards”. Director Management System, Financial Centralized Management Measures, Financial Information System Management System, Accounting File Management Measures, Accounting Work Transfer Management Measures, Accounting Accounting and Accounting Supervision and Management System, and Accounting Agency Settings And job responsibilities, etc., to effectively control all aspects of production management, financial management, etc., to ensure the accuracy, reliability and security of accounting documents, accounting and records and their data.
Daily management: Based on the company's basic system, a series of systems covering the entire production and operation process, including sales policy, material procurement, production management, engineering equipment, quality management, human resources, administrative management, and financial management, have been established to ensure various The work has rules to follow, management is orderly, and a standardized management system is formed. In 2013, in order to further strengthen the management of engineering projects and standardize the work flow of the project, the company formulated the “Regulations on Project Management Work” and the “Regulations on Project Bidding Work”.
2. Control measures
The company implemented effective control procedures in transaction authorization control, responsibility division control, voucher record control, asset contact and record usage management, and internal audit control.
Trading authorization control: The company adopts general authorization for daily production and operation activities, and special authorization for major transactions and investments. The general transactions of daily business activities are subject to approval or coordination by each department, and the matters and final treatment opinions are submitted to the general manager for approval; major matters are approved by the board of directors or the general meeting of shareholders.
Responsibility division of labor control: A series of more detailed job responsibilities division system has been formulated for each department and each link, and the authorization approval of each transaction business is separated from the specific operation personnel.
Voucher and record control: A more complete control procedure for voucher and record has been developed, and a uniform document format has been produced. All economic transactions and operations must be controlled by relevant personnel.
Asset contact and record use control: set up an archives room, determine the person to keep the accounting records and important business records; determine the custodian or user of the inventory and fixed assets as the person responsible for safety, and implement a combination of annual inventory and spot checks to control .
Internal Audit Control: Established the Audit and Supervision Department, equipped with full-time staff, and under the leadership of the Audit Committee of the Board of Directors, audited the economic operation quality, economic benefits, internal control execution, various expenses and asset protection of the company and its holding subsidiaries. And supervision.
3. Key control activities
(1) Management of wholly-owned and controlled subsidiaries
The company strictly manages the holding subsidiaries in accordance with relevant laws and regulations and the relevant regulations of listed companies, and has formulated the “Management System for Holding Subsidiaries”. The company strengthens its management by assigning directors, supervisors and important senior management personnel to wholly-owned and holding subsidiaries. The company's audit and supervision department is responsible for the audit of the subsidiaries; the annual assessment of the completion of the subsidiary's business plans is carried out.
(2) Related party transaction management
The company's articles of association, the system for preventing large shareholders and related parties from occupying funds, and the decision-making system for related party transactions specify the decision-making authority, approval procedures, and disclosure requirements for connected transactions. In the approval process of related party transactions, the company gives full play to the auditing role of independent directors, board of supervisors and audit committees, strengthens the company's control over connected transactions, ensures the safety of the company's capital and property, and effectively protects the interests of minority shareholders.
(3) Management of asset acquisition, foreign investment, external guarantee, etc.
In order to strictly control investment risks, the company has established a more scientific foreign investment decision-making procedure and implemented a responsibility system for major investment decisions. Investment projects must be approved by the board of directors. The corresponding foreign investment authority is concentrated in the company headquarters, and all subsidiaries are not allowed to invest abroad. .
(4) Management of raised funds
The company has formulated the "Special Storage System for Raised Funds", which clearly stipulates the procedures for the storage, use and approval of funds raised, the adjustment and change of use, management supervision and accountability to ensure the special funds for fundraising.
(5) Information disclosure management
The company has established the "Information Disclosure Management System", which has detailed provisions from information disclosure agencies and personnel, documents, affairs management, disclosure procedures, information reporting, confidentiality measures, and file management. The chairman of the board is the first person responsible for the company's information disclosure. The secretary of the board of directors is the main responsible person for information disclosure. He is responsible for managing the company's information disclosure affairs, and the securities affairs representative assists the secretary of the board of directors. The Securities Department is the daily work department of the company's information disclosure affairs. Under the direct leadership of the secretary of the board of directors, it is responsible for the company's information disclosure.
(6) Management of monetary fund receipts and payments and custody
The company has established a strict authorization approval procedure for the receipt and payment and custody of monetary funds. The incompatible posts for handling monetary funds have been separated, and the relevant institutions and personnel have mutual constraints. The company coordinated the allocation of funds, implemented a reserve fund system, and supervised the implementation of the fund plan.
(7) Physical asset management
The company has established a post responsibility system for physical asset management, which can control the key links of physical assets inspection, receipt, custody and disposal, and adopts division of responsibilities, physical inventory, property records, and account verification. Measures such as property insurance can effectively prevent the theft, stealing, damage and major loss of various physical assets.
(8) Sales and collection management
The company has formulated a more feasible sales policy, and has clearly defined the pricing principles, conditions, collection methods, and the duties and responsibilities of the organizations and personnel involved in the sales business. In the marketing process, the company strictly controls the risks and withdraws the bad debt reserve according to the regulations every year. If the sales personnel finds that there may be bad debts, they report to the company in time and increase the efforts to collect the payment. At the same time, the company will actively cooperate with the sales. The staff is owed. In the future, the company will strengthen management of important customer risk rating and determination of credit amount.
(9) Procurement and payment management
The company has rationally planned and established the institutions and positions for the procurement and payment business. The procedures for requisition, approval, procurement, and acceptance of inventory are clarified. Payment of accounts payable and prepayments must be completed after relevant procedures are completed.