internal audit system
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
Jiangxi Tianxin Pharmaceutical Co., Ltd.
Chapter 1 General Provisions
Article 1 In order to strengthen the internal supervision and risk control of Jiangxi Tianxin Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") and the holding company, ensure that the company's financial management, accounting and production operations comply with the requirements of various national laws and regulations, and safeguard the legitimate rights and interests of investors, in accordance with the "Company Law of the People's Republic of China" This system is formulated in accordance with the provisions of the Securities Law of the People's Republic of China, the Audit Law of the People's Republic of China, the Provisions of the Audit Office on Internal Audit Work and other relevant laws, administrative regulations, departmental rules and normative documents, as well as the Articles of Association of Jiangxi Tianxin Pharmaceutical Co., Ltd. (hereinafter referred to as the "Articles of Association").
Article 2 The term "internal audit" as mentioned in this system refers to the company's internal audit institution's supervision and evaluation of the company and its holding company's financial revenue and expenditure, asset quality, operating performance, and the authenticity, legality and effectiveness of construction projects in accordance with relevant national laws and regulations, financial accounting systems and company internal management regulations.
Article 3 This system applies to the company and its wholly-owned and holding companies.
Chapter 2 Audit Institutions and Auditors
Article 4 In accordance with the requirements of improving the corporate governance structure and completing the internal control mechanism, an audit department (i.e., internal audit institution) is established under the audit committee of the company's board of directors. As the execution agency of the audit work of the audit committee of the company's board of directors, it independently carries out audit work under the guidance of the audit committee and provides internal audit supervision of the company's business activities, risk management, financial information, internal control and other matters.
The Audit Department is responsible to the Board of Directors and reports its work to the Audit Committee of the Board of Directors. In the process of supervision and inspection, the audit department shall accept the supervision and guidance of the audit committee. If the audit department discovers major problems or clues about the company, it should immediately report them directly to the audit committee.
The audit department shall maintain its independence and shall not be placed under the leadership of the finance department, or work together with the finance department. The Audit Committee participates in the assessment of the person in charge of internal audit.
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
Article 5 The audit department shall allocate reasonable and stable full-time auditors with necessary professional knowledge and corresponding business capabilities based on the needs of internal audit work. The audit department has a person in charge, who is nominated by the chairman of the audit committee and appointed or removed by the audit committee of the board of directors, who is responsible for the overall management of the audit department. The person in charge of the audit department must have an intermediate professional technical title or above and practical work experience in auditing, accounting, economics, law or management.
Article 6 Auditors shall audit in accordance with the law, be loyal to their duties, adhere to principles, be objective and fair, be honest and honest, and keep secrets. Auditors who have an interest in the audit matters being handled or the department being audited shall recuse themselves. Auditors' exercise of their powers in accordance with the law is protected by law, and no company or individual is allowed to retaliate.
Article 7 The funds required by the internal audit institution to perform its internal duties shall be included in the company's budget.
Chapter 3 Audit Responsibilities
Article 8 In accordance with national laws, regulations, audit norms, audit procedures and relevant system regulations, internal audit supervision shall be conducted on the operating activities, financial revenues and expenditures, economic benefits, term of office and resignation of senior executives of the company and its wholly-owned and holding companies.
Article 9: Supervise the establishment and improvement of a complete internal control system of the company, eliminate various hidden dangers, and ensure the asset integrity and safety of the company and its wholly-owned and holding companies.
Article 10 The purpose of audit work is to improve business management and increase economic benefits, and to supervise all business activities of the company.
Article 11 The main responsibilities of the Audit Department are:
(1) Inspect the completeness, rationality and effectiveness of the internal control systems of the company’s internal institutions, holding subsidiaries and joint-stock companies that have a significant impact on the company and the effectiveness of their implementation;
evaluation;
(2) Audit the accounting data and other relevant economic data of the company's internal institutions, holding subsidiaries and joint-stock companies that have a significant impact on the company, as well as the legality, compliance, authenticity and completeness of the financial revenue and expenditure and related economic activities reflected, including but not limited to financial reports, performance forecasts, performance bulletins, and voluntarily disclosed predictive financial information
etc;
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(3) Assist in establishing and improving the anti-fraud mechanism and determine the key areas, key links and themes of anti-fraud.
content, and pay attention to and examine possible fraud during the internal audit process;
(4) Report to the Audit Committee at least once every quarter, including but not limited to internal audit plans;
implementation of the plan and problems discovered during internal audit work;
(5) Submit an internal audit report to the Audit Committee after the end of each year;
(6) For the company’s internal control deficiencies and problems existing in its implementation, urge the relevant responsible departments to formulate rectification measures and rectification time, conduct follow-up reviews of internal control, and supervise the implementation of rectification measures. If major flaws or major risks are found in internal control, they should be reported in a timely manner
Report to the Audit Committee from time to time.
Article 12 Unless otherwise provided by laws and regulations, the Audit Committee of the Board of Directors shall supervise the Audit Department to inspect the following matters at least once every six months, issue an inspection report and submit it to the Audit Committee. If the inspection finds that the company has any violations of laws or regulations, irregular operations, etc., it shall report to the Shanghai Stock Exchange in a timely manner:
(1) The implementation of major events such as the use of funds raised by the company, provision of guarantees, related transactions, securities investments and derivatives transactions, provision of financial assistance, purchase or sale of assets, external investments, etc.
situation;
(2) The company’s large capital transactions and transactions with directors, senior managers, controlling shareholders, and actual controlling shareholders
The financial transactions of the controller and its related parties.
The audit committee shall issue written evaluation opinions on the effectiveness of the company's internal controls based on the internal audit report and relevant materials submitted by the internal audit department, and report to the board of directors. If the board of directors or the audit committee believes that there are major flaws or major risks in the company's internal control, or if the sponsor or accounting firm points out that there are major flaws in the effectiveness of the company's internal control, the board of directors shall report to the Shanghai Stock Exchange in a timely manner and disclose it. The company shall disclose in the announcement any major deficiencies or major risks in internal control, the consequences that have occurred or may result, and the measures that have been taken or planned to be taken.
Chapter 4 Audit Authority and Scope
Article 13 The audit department, with the approval of the board of directors, has the right to inspect all accounts and information related to the company’s operation and management during the audit period, including:
(1) Accounting books, vouchers, and statements;
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(2) All business contracts, agreements, and contracts;
(3) Bank statements of all banks with accounts;
(4) Certificates of various assets and equity certificates of investments;
(5) Confirmation letter from the other party for each claim;
(6) Important documents for dealing with customers;
(7) Records of important business and investment decision-making processes;
(8) Other relevant information.
If necessary, the audit period can be traced forward or postponed backward. If anyone intentionally conceals, destroys, or tamperes with accounting information and important documents, once discovered, the relevant parties will be notified within the company; if the circumstances are serious, the company will be reported to the company for administrative sanctions.
Article 14 The Audit Department also has the following main authorities:
(1) Investigate relevant departments and individuals on issues related to audit matters;
(2) Require audited internal institutions, holding subsidiaries, and joint-stock companies with significant influence to submit production, operations, financial revenue and expenditure plans, budget implementation, final accounts, and accounting on time
Reports and other relevant documents and information;
(3) Participate in relevant meetings of the company, its holding subsidiaries and joint-stock companies with significant influence, and convene
Hold meetings related to audit matters;
(4) Participate in the research and formulation of relevant rules and regulations, and propose internal audit rules and regulations, which shall be determined by the company,
It will be implemented after the approval and announcement of holding subsidiaries and joint-stock companies with significant influence;
(5) Inventory the physical assets and other assets of relevant departments;
(6) Check relevant computer systems and their electronic data and information;
(7) Accounting vouchers, accounting books, accounting statements, and information related to economic activities that may be transferred, concealed, tampered with, or destroyed by the company, its holding subsidiaries, and those with significant influence
With the approval of the main person in charge of the joint-stock company or the authority, it has the right to temporarily seal it;
(8) Put forward opinions on correcting and dealing with violations of laws and regulations, improve economic management, and improve economic
Suggestions on effectiveness;
(9) Require the heads of relevant departments to sign their opinions on the audit work papers and comment on relevant audit matters
Produce written explanations.
(10) Stop ongoing activities that seriously violate national regulations or seriously endanger the interests of the company. The person in charge of the internal audit institution has the right to immediately seal account books, assets, etc. in response to major emergencies.
Temporary measures or requesting other departments to take protective measures will be reported to the Audit Committee.
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(11) It is recommended that relevant departments punish individuals who violate financial laws and regulations and cause serious economic losses due to serious dereliction of duty.
hold individuals and individuals accountable;
(12) Make suggestions for improving management to relevant departments, and be entrusted to track the improvement process and results;
(13) Order the relevant departments to make corrections within a time limit; recover the illegal and illegal income of the relevant departments or individuals and the infringement
National and company assets occupied;
(14) Information related to financial revenue and expenditure of departments at the same level or lower levels can be accessed.
Article 15 Internal audit shall cover all business links related to financial reporting and information disclosure matters in the company's operating activities, including: sales and collections, procurement and payment, inventory management, fixed asset management, fund management, investment and financing management, human resources management, information system management and information disclosure management, etc. The audit department can adjust the above business links according to the company's industry and production and operation characteristics.
Article 16 The audit department shall implement appropriate review procedures in accordance with relevant regulations, evaluate the effectiveness of the company's internal controls, and submit an internal control evaluation report to the board of directors at least once a year.
The scope of internal control review and evaluation should include the establishment and implementation of internal control systems related to financial reporting and information disclosure matters.
The audit department shall focus on inspection and evaluation of the integrity, rationality and effectiveness of the internal control systems related to external investment, purchase and sale of assets, external guarantees, related transactions, use of raised funds, information disclosure and other matters.
For internal control deficiencies discovered during the review process, the audit department shall urge the relevant responsible departments to formulate rectification measures and rectification time, conduct follow-up reviews of internal controls, and supervise the implementation of rectification measures. The person in charge of the audit department should arrange follow-up review work on internal controls in a timely manner and incorporate it into the annual internal audit work plan.
Article 17 The audit department is responsible for the specific organization and implementation of the company's internal control evaluation. The company issues an annual internal control evaluation report based on the evaluation report and relevant information issued by the audit department and reviewed by the audit committee. The internal control evaluation report shall include the following contents:
(1) The board of directors’ statement on the authenticity of the internal control evaluation report;
(2) The overall situation of internal control evaluation work;
(3) The basis, scope, procedures and methods of internal control evaluation;
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(4) Defects in internal control and their identification;
(5) Rectification of internal control deficiencies in the previous year;
(6) Corrective measures to be taken to address internal control deficiencies this year;
(7) Conclusion on the effectiveness of internal control.
The accounting firm shall verify and evaluate the company's internal control evaluation report with reference to the relevant regulations of the competent department.
Article 18 The board of directors and the audit committee shall evaluate the establishment and implementation of the company's internal control based on the evaluation report and relevant materials issued by the audit department, and review and form an annual internal control evaluation report. The board of directors shall formulate a resolution on the company's internal control evaluation report while reviewing the annual report and other matters.
The company shall disclose the annual internal control evaluation report at the same time as the annual report, and also disclose the internal control audit report issued by the accounting firm.
Article 19 The Audit Department shall conduct timely audits after the occurrence of important external investment matters. When auditing external investment matters, focus should be placed on the following:
(1) Whether the review and approval procedures for foreign investment are carried out in accordance with relevant regulations;
(2) Whether the contract was concluded in accordance with the approved content and whether the contract was performed normally;
(3) Whether to assign special personnel or establish a special agency to study and evaluate the feasibility of major investment projects?
feasibility, investment risks and investment returns, and track and supervise the progress of major investment projects;
(4) For matters involving entrusted financial management, pay attention to whether the company has delegated the authority to approve entrusted financial management to individual directors or operating management of the company, and whether the trustee has integrity records, operating conditions and financial status.
Whether the situation is good, and whether a dedicated person is assigned to track and supervise the progress of the entrusted financial management;
(5) For matters involving securities investment, risk investment, etc., pay attention to whether the company has established a special internal control system, whether the scale of investment affects the company's normal operations, whether the source of funds is its own funds, whether the investment risk exceeds the company's tolerable range, and whether there are relevant business rules and regulations.
Certain circumstances prohibit securities investment, risk investment, etc.
Article 20 The audit department shall conduct timely audits after important asset purchases and sales occur. When auditing the purchase and sale of assets, you should focus on the following:
(1) Whether the purchase and sale of assets undergoes approval procedures in accordance with relevant regulations;
(2) Whether the contract was concluded in accordance with the approved content and whether the contract was performed normally;
(3) Whether the operating conditions of the purchased assets are consistent with expectations;
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(4) Are there any guarantees, mortgages, pledges or other restrictions on transfer of the purchased assets?
Involving litigation, arbitration and other major disputes.
Article 21 The audit department shall conduct timely audits after the occurrence of important external guarantee matters. When auditing external guarantee matters, focus should be placed on the following:
(1) Whether the approval procedures for external guarantees have been carried out in accordance with relevant regulations;
(2) Whether the guarantee risk exceeds the company's tolerable range, the integrity record and business status of the guaranteed party;
Whether the condition and financial status are good;
(3) Whether the secured party provides a counter-guarantee and whether the counter-guarantee is enforceable;
(4) Whether independent directors and sponsors express opinions (if applicable);
(5) Whether a special person is assigned to continuously pay attention to the operating status and financial status of the guaranteed party.
Article 22 The audit department shall promptly conduct audits after the occurrence of important related party transactions. When auditing related party transactions, you should focus on the following:
(1) Whether the list of related persons has been determined and updated in a timely manner;
(2) Whether related-party transactions have been subject to approval procedures in accordance with relevant regulations. When reviewing related-party transactions, related-party shares
Whether the east or related directors abstain from voting;
(3) Whether independent directors have recognized and expressed independent opinions in advance, and whether the sponsor has expressed opinions
(if applicable);
(4) Whether a written agreement has been signed for related-party transactions, and whether the rights, obligations and legal responsibilities of both parties to the transaction are
clear; clear
(5) Whether there are any guarantees, mortgages, pledges or other restrictions on transfer of the subject matter of the transaction?
Involving litigation, arbitration and other major disputes;
(6) Whether the counterparty’s integrity record, operating conditions and financial status are good;
(7) Whether the pricing of related-party transactions is fair, whether the subject matter of the transaction has been audited or evaluated in accordance with relevant regulations, and whether the related-party transactions harm the interests of the listed company.
Chapter 5 Audit Procedures
Article 23 Audit work plan: The audit department will formulate an audit project plan based on the company's deployment and specific conditions, and submit it to the audit committee of the board of directors for approval and implementation.
Article 24 Audit procedures:
Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
(1) Issuance of internal audit notice: The audit department fills out the internal audit notice and sends it to the audited unit five days before the audit is carried out. The audited unit must actively prepare the information required by the internal audit notice and provide it to the auditors in a complete and comprehensive manner within the specified time. Special audit engagements can be delivered when the audit is performed.
(2) Audit plan: Before implementing the audit, the audit department should carefully conduct a pre-trial investigation on the audit project, prepare an audit plan, determine the audit time, content, scope, implementation steps, personnel division of labor, audit methods and a list of required information, etc., and submit it to the person in charge of the audit department for review. When necessary, other professionals may be deployed to participate in the audit or provide professional advice.
(3) Conducting audits: Auditors conduct audits by reviewing accounting vouchers, account books, statements, consulting documents, materials, and physical objects related to audit matters, investigating relevant departments or individuals, and obtaining supporting materials, which are recorded in detail in audit working papers. Audit working papers should be informative, focused, standardized in format, and clearly recorded. Auditors can make suggestions for improvements to relevant units and individuals at any time regarding problems discovered during the audit.
(4) Audit report: Internal auditors should issue an audit report after implementing necessary audit procedures. The preparation of audit reports should be based on verified audit evidence, be objective, complete, clear, timely, constructive, and reflect the principle of materiality. The audit report should state the purpose and scope of the audit, put forward conclusions and recommendations, and should include feedback from the audited unit.
(5) Audit decision: Make an audit decision on the approved audit report, submit it to the board of directors for approval, and issue it to relevant departments for execution.
(6) Relevant departments should propose rectification content and relevant requirements for existing problems based on audit decisions, and report to the audit department within the specified time. If you have any objection to the audit decision, you can submit it to the company's audit committee for decision-making.
(7) Follow-up audit: For important audit projects, follow-up audits are carried out, usually after a certain period of time after the audit decision is issued and implemented, to check the implementation of the audit opinions and decisions. If it is found that the audited unit has concealed behavior that resulted in missed audits, wrong determinations, etc., it should be reviewed and decisions and conclusions should be made again.
Article 25 The audit department must establish audit files for audit matters handled and manage them in accordance with regulations.
Article 26 The audit evidence obtained by internal auditors shall be sufficient, relevant and reliable. Internal auditors should clearly and completely record the name, source, content, time and other information of obtaining audit evidence in working papers. The audit department should establish a working paper system and establish a corresponding file management system in accordance with relevant laws and regulations to clarify internal audit work reports and working papers Jiangxi Tianxin Pharmaceutical Co., Ltd. Internal Audit System
The retention period of manuscripts and related materials.
Chapter 6 Rewards and Punishments
Article 27 Auditors should maintain a rigorous working attitude, objectively reflect the problems discovered, and report to the audit committee of the company's board of directors in a timely manner. If the reported situation is untrue, the company shall be responsible for the audit. The department under review was not as good as
If the actual provision of all required audit information affects the auditor's judgment, the relevant personnel will be held accountable.
Article 28 Relevant departments and individuals that have made outstanding achievements in implementing this system will be commended or rewarded.
Article 29 For relevant departments and individuals who violate this system and commit any of the following acts, the company will impose administrative sanctions and financial penalties according to the severity of the case, or refer them to relevant departments for handling:
(1) Refusal to provide account books, accounting statements, information and supporting materials;
(2) Obstructing audit staff from exercising their powers, resisting or undermining supervision and inspection;
(3) Committing fraud and concealing the truth;
(4) Refusing to implement audit opinions or audit conclusions and decisions;
(5) Retaliation against audit staff and whistleblowers.
Article 30 If an audit staff violates this system and commits one of the following acts, which constitutes a crime, they will be investigated for criminal responsibility in accordance with the law; if it does not constitute a crime, they will be given administrative sanctions:
(1) Taking advantage of one’s authority to seek personal gain;
(2) Engage in fraud and malpractice for personal gain;
(3) Neglecting duties and causing losses to the country and the company;
(4) Leaking the company’s business secrets.
Article 31 If a company discovers major problems in its internal audit work, it shall investigate the responsibility in accordance with relevant regulations, deal with the relevant responsible persons, and report to the Shanghai Stock Exchange in a timely manner.
Chapter 7 Supplementary Provisions
Article 32 Matters not covered in this system may be inconsistent with currently effective laws, regulations, departmental rules and regulations that will be promulgated in the future.
If there is a conflict with the normative documents or the company's articles of association modified through legal procedures, the internal audit system of Jiangxi Tianxin Pharmaceutical Co., Ltd. shall be followed in accordance with relevant laws, regulations, and regulations.
Implement the provisions of departmental regulations, normative documents or company articles of association.
Article 33 The board of directors of the company is responsible for revising and interpreting this system.
Article 34 This system will take effect and be implemented on the date it is reviewed and approved by the company's board of directors.
Jiangxi Tianxin Pharmaceutical Co., Ltd.
August 2025