Shenzhen H&T Intelligent Control Co.Ltd(002402)
Self evaluation report on internal control in 2021
Shenzhen H&T Intelligent Control Co.Ltd(002402) all shareholders:
In accordance with the company law, the accounting law, the accounting standards for business enterprises, the basic norms of enterprise internal control and its supporting guidelines jointly issued by the Ministry of Finance and other five ministries and commissions, and in combination with the internal control inspection and evaluation methods of Shenzhen H&T Intelligent Control Co.Ltd(002402) (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, 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.
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 units included in the evaluation scope include the company and its subsidiaries within the scope of consolidated statements. The evaluation scope covers all economic businesses and relevant posts within the company. The key control points for business processing are implemented to all links of decision-making, implementation, supervision and management. Including: governance structure, organizational structure, procurement business, asset management, sales business, R & D projects, quality management and production management, fund management, cost control, raised funds management, hedging management, intellectual property control, related party transactions, foreign investment, foreign guarantee, information disclosure, control of subsidiaries, human resources management, engineering projects Comprehensive budget, etc. The high-risk areas included in the focus mainly include: procurement management, sales business, quality control and production and operation management, fund management, cost control, raised funds management, asset management, hedging management, R & D management, management and control of subsidiaries, human resources management, engineering projects, investment management, related party transactions and information disclosure. According to the requirements of the basic norms of enterprise internal control, the guidelines for the application of enterprise internal control and the guidelines for the evaluation of enterprise internal control, the internal control assessment is conducted on the key elements of internal control at the company level (including control environment, risk assessment, control activities, information and communication and internal supervision).
1. Internal control environment
(1) Governance structure
In accordance with the provisions of the company law, the securities law, the articles of association and the governance standards for listed companies, the company has established a relatively perfect and effective corporate governance structure composed of the general meeting of shareholders, the board of directors, the board of supervisors and the management.
The general meeting of shareholders is the highest authority of the company and exercises the voting rights on major matters such as the company’s business policy, financing, investment and profit distribution according to law. The board of directors of the company shall be responsible for the general meeting of shareholders, implement the resolutions of the general meeting of shareholders, exercise the business decisions of the enterprise according to law, and be responsible for the establishment, improvement and effective implementation of internal control. The board of directors of the company shall be responsible for the establishment and supervision of the company’s internal control system, establish internal control policies and plans, and supervise the implementation of internal control. There are four special committees under the board of directors: Audit Committee, strategy committee, nomination committee and salary and assessment committee, and the working rules of each special committee have been formulated to ensure the effective performance of duties of the special committee and improve the operation efficiency of the board of directors. The board of supervisors shall be responsible to the general meeting of shareholders, supervise the directors and managers of the enterprise to perform their duties according to law, and supervise the establishment and implementation of internal control by the board of directors. The management is responsible for implementing the resolutions of the general meeting of shareholders and the board of directors, presiding over the production and operation management of the company, formulating specific work plans, and assessing the implementation of the plans in time to ensure the normal operation of the company’s daily business activities.
According to the needs of production, operation and management and the principle of mutual checks and balances, the company reasonably sets up departments and posts, scientifically divides responsibilities and authorities, and forms an organizational system in which each performs its own duties, assumes its own responsibilities, cooperates with and restricts each other. All functional departments can restrict and supervise each other. The company has clearly defined the main responsibilities of each department and formulated the operating procedures of various business and management procedures. All business personnel work within the scope of authorization. All business and management procedures operate in accordance with the operating procedures formulated by the company, ensuring the implementation of rights and responsibilities.
(2) Organizational structure
According to the development strategic planning and business development status, the company optimizes the company’s organizational structure and is divided into six business segments and large manufacturing platforms at the business level.
According to relevant regulations, the company has organized and formulated corresponding post responsibilities level by level. Each functional department has a clear division of labor, clear rights and responsibilities, mutual cooperation, mutual restraint and mutual supervision, forming an integrated control system, standardizing the internal operation mechanism of the company, and laying a solid foundation for the long-term and healthy development of the company.
The business level is divided into six industrial sectors and large manufacturing platforms: the six industrial sectors are overseas home appliance business, Chinese home appliance business, smart home appliance business, Pan home appliance business, electric tools business and automotive electronics business; The large manufacturing platform includes: Shenzhen factory, Vietnam factory, Zhejiang factory, Hefei factory, quality center and intelligent manufacturing office.
(3) Human resource management
The company attaches great importance to the construction of human resources system, always adheres to people-oriented and cooperatively realizes the company’s development strategic objectives. According to relevant national laws and regulations, the company has established a human resources development strategy system in combination with its own characteristics and development strategy. According to the development strategy, a series of human resources strategies conducive to the sustainable development of the company and perfect relevant internal control systems of personnel management have been formulated, and relevant systems have been formulated for the employment, training, dismissal and resignation, salary, assessment, reward and punishment, promotion and elimination, assignment and other personnel management of employees to standardize and follow.
In terms of talent echelon construction, the company has organized a series of training and capacity improvement activities by hiring external consultants. According to different levels of personnel, training projects such as “navigation” series, “expertise” series and “golden seed” series and management improvement projects such as “pilot plan” have been carried out respectively.
In accordance with the provisions of relevant national laws and regulations and in combination with the company’s own characteristics, the company has formulated and improved the internal management system of human resources, including organizational knowledge management measures, employee salary management measures, promotion management system, internal recruitment management rules, new employee induction supervisor management rules, employee performance management regulations The regulations on internal deployment of employees, management measures for employee representatives, training management regulations, internal lecturer and course management system, etc. have made detailed specifications on the organization setting, salary management, employee recruitment and promotion, employee training and the signing, change, dissolution and termination of employee labor contracts. In terms of organization setting, the responsibilities and rights are clear Management science; In terms of staffing, it is capable, efficient and reasonable division of labor.
The company has actively carried out various forms of corporate culture learning and publicity activities, forming a keen, agile, serious values and a good working atmosphere of being honest with others and yourself, having the courage to take responsibility and teamwork in the company.
(4) Corporate culture
The company’s corporate goal is to “lead the digital intelligence era and create a better life”. The company’s business policy is customer-centered and benefit oriented; The company adheres to the technical vision of “possessing core technology, transforming practical technology and grasping leading technology”, adheres to the R & D concept of combining independent R & D and innovation with technical services, and strives to become a professional controller company with first-class talents, technology, products, quality and services. The company always adheres to the corporate culture of keen, agile and serious recognition, and maintains sufficient sensitivity to the changes of the world, the development of the industry, the change of management and the change of business. Everyone does things right and well at the first time, can recognize, help and effectively communicate with each other in specific business, and has a good working attitude, habit, heart Seriously do things well, thoroughly and in place.
All employees of the company work together to realize the company’s mission, vision and strategy; At the same time, actively fulfill social responsibilities, protect the social environment and realize the sustainable and healthy development of the company.
The company adheres to the concept of operating according to law and standardizing operation, and advocates the spirit of honesty and trustworthiness, love and dedication, innovation and teamwork. On the one hand, through the internal cultural bulletin board, show the style of enterprise employees and enhance the cohesion of the enterprise. On the other hand, the board of directors and senior executives of the company set an example and take practical actions to convey the company culture to employees, strengthen team cohesion and core competitiveness, improve the company’s operation efficiency and enhance the cohesion of the enterprise.
(5) Social responsibility
In accordance with the provisions of relevant national laws and regulations, the company earnestly implements the scientific outlook on development, and in combination with the actual situation of the company, has formulated a relatively perfect management system and standard system (including iatf16949, ISO9001, ISO13485, ISO14001, ISO17025, iso14064, iso45001 and other systems) in terms of safety production, quality, environment, occupational health, anti-corruption and prevention, Carry out the whole process monitoring from the selection of raw materials, production process control, customer delivery and other whole industry chain processes, consciously abide by social ethics, business ethics, laws and regulations, and accept the supervision of the government and society. At the same time, it is based on rba7 0 formulate the company’s social responsibility management manual to ensure compliance with the relevant requirements of labor, health and safety, environment and ethics, and fulfill the social responsibility of the enterprise. (6) Internal audit organization
The audit committee under the board of directors of the company is responsible for the communication, supervision and verification of internal and external audits of the company in accordance with the working rules of the audit committee of the board of directors and other relevant provisions. The audit committee is composed of three directors, including two independent directors. One independent director is an accounting professional and serves as the convener of the Committee. The audit committee has an audit department, a person in charge of internal audit and several auditors, who have the professional ability to carry out audit work independently. The audit department is responsible to the audit committee and reports to the audit committee. It is responsible for auditing and supervising the company’s operation, financial security and the implementation of the company’s internal control system. Putting forward constructive suggestions for the existing problems plays an important role in the continuous improvement of the company’s internal control system. During the reporting period, the audit department organized all departments to gradually carry out and improve the comprehensive system and process supervision, and promoted the improvement, optimization and implementation of the system and process through a series of measures.
2. Risk assessment
The company has established a systematic and effective risk assessment system according to the strategic objectives and development plan, combined with the characteristics of the industry, determined the risk management objectives, formulated various risk control management systems, defined the key areas and key links of risk control, comprehensively and systematically collected relevant information, accurately identified internal and external risks, conducted risk assessment in time, and achieved controllable risk. At the same time, the company has established an emergency response mechanism, defined the monitoring, reporting and handling procedures and time limit of various major emergencies, and established an inspection and accountability system. (1) Policy risk
At present, there are many uncertainties in the macro environment of the world and China. The adverse factors of the macro environment hinder international policy coordination and the process of economic globalization, trade liberalization and the flow of capital and labor force. For macro risks, the company will accelerate resource integration and technological innovation and further improve the efficiency of asset operation.
(2) Market competition risk
The market competition in the region where the company is located and the region involved in its business is strong. If the enterprise lacks real-time control when dealing with the dynamic development of the market, it will bring certain market competition risks to the development of the enterprise. As a leading enterprise in the industry, the company has strong competitive advantages in technology research and development, product quality and business scale. At the same time, it will strengthen policy research, actively make early market prediction, further master the objective laws of market economy, improve crisis awareness, improve market control ability, and strengthen the exchange of management information and technology at home and abroad, Timely feed back the problems existing in the development of market economy, and actively formulate countermeasures.
(3) Raw material price fluctuation risk
The main raw materials used in the production and operation of the company are printed circuit boards, chips, relays, diodes and triodes, etc. the supply and demand of the above raw materials will change, and their prices will fluctuate. Especially this year, the price of the main raw devices will rise sharply, but the company has strong cost management ability and certain bargaining power, which can improve the sales volume of new products Measures such as technical improvement of old products, component substitution scheme, cost control and price transmission reduce the impact of rising raw material prices on the company’s profits. Moreover, the pricing principle of the company’s products is cost plus pricing. The fluctuation of the price of main raw materials has little impact on the company’s net profit.
3. Control activities
In terms of corporate governance, in accordance with the provisions of the company law, the securities law and other relevant laws and regulations, the company has formulated a corporate governance system with the articles of association and the rules of procedure of the “three meetings” as the core, including 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 the president, the information disclosure management system, etc, To ensure the standardized operation of the company and promote the healthy development of the company.
Based on the principles of adaptability and cost-effectiveness and the requirements of establishing a modern enterprise system, a series of systems and regulations covering various business links such as procurement, production, sales and financial management have been formulated to ensure that all work has rules to follow and orderly management, forming a standardized management system and providing institutional guarantee for the standardized and efficient operation of the company. (1) Procurement business management
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