Fiyta Precision Technology Co.Ltd(000026)
Self evaluation report on internal control in 2021
According to the provisions and requirements of the basic norms of enterprise internal control and its supporting guidelines, combined with the internal control system of Fiyta Precision Technology Co.Ltd(000026) (hereinafter referred to as “the company”), on the basis of daily and special supervision of internal control, we conducted a self-evaluation on the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of internal control evaluation report). 1、 Board statement
The board of directors and all directors 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 liabilities for the authenticity, accuracy and completeness of the contents of the report.
It is the responsibility of the board of directors to establish, improve and effectively implement internal control; 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 company’s internal control.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation, 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.
2、 Overall situation of internal control evaluation
（1） Organization of internal control evaluation
In order to ensure the smooth development of internal control evaluation, the discipline inspection, audit and legal department of the company, as the leading department of internal control evaluation, is responsible for the development and coordination of this work.
(II) specific schedule:
(1) From November 11, 2021 to December 15, 2021, each unit updated the internal control self-assessment draft, conducted walk through test, and prepared its own internal control evaluation report.
(2) From December 16, 2021 to December 23, 2021, the discipline inspection, audit and legal department conducted effectiveness test for key business processes, that is, spot check multiple samples to check the effectiveness of the process.
(3) From December 24, 2021 to December 31, 2021, all units shall feed back the defect summary results to the discipline inspection, audit and legal department. For the defects found, formulate specific rectification plans, and continue to track and inspect the rectification of internal control defects in 2022. 3、 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.
1. Units included in the scope of evaluation
Headquarters ( Fiyta Precision Technology Co.Ltd(000026) , Liaoning hengdarui Trading Co., Ltd.), brand group business department (including Fiyta Precision Technology Co.Ltd(000026) Sales Co., Ltd., Shenzhen Fiyta Precision Technology Co.Ltd(000026) Precision Technology Co., Ltd., shiyuehui boutique (Shenzhen) Co., Ltd., Shenzhen xunhang Precision Technology Co., Ltd.) Shenzhen henggeely world watch Center Co., Ltd. (including Shenzhen henggeely e-commerce Co., Ltd., henggeely world watch Center (Hainan) Co., Ltd.), Shenzhen Fiyta Precision Technology Co.Ltd(000026) Technology Development Co., Ltd., amiron Co., Ltd. (including Fiyta Precision Technology Co.Ltd(000026) Hong Kong Co., Ltd., amiron timepiece (Shenzhen) Co., Ltd. and montres chouriet SA) Main operations and matters included in the scope of evaluation
Internal environment, risk assessment, control activities, internal information transmission and disclosure, R & D and design management, quality management, procurement management, bidding management, sales management, inventory management, investment management, fund management, fixed assets management, intangible assets management, financial report preparation and disclosure, budget management, expense management, tax management, human resources management It management, contract management, internal audit management, etc.
The above units, businesses, matters and risk areas included in the evaluation scope cover the main aspects of the company’s operation and management, and there are no major omissions.
4、 Procedures and methods of internal control evaluation
The internal control evaluation shall strictly follow the procedures specified in the basic norms, evaluation guidelines and the company’s internal control evaluation measures.
The discipline inspection, audit and legal department led all business units to formulate the internal control evaluation work plan, and adopted appropriate methods such as individual interview, field inspection, sampling and comparative analysis for the key control points of each business process within the evaluation scope according to the plan to widely collect the evidence of whether the company’s internal control design and operation are effective, so as to complete the on-site implementation of self-evaluation, Finally, classify and summarize the identified internal control defects, determine the defect level according to the impact on the control objectives, and issue a self-evaluation conclusion.
Based on the summary evaluation results and identified internal control defects, and in combination with the construction of internal control, the discipline inspection, audit and legal department shall objectively, fairly and completely prepare and submit the internal control evaluation report, and submit the internal control self-evaluation report to the general manager’s office, the board of supervisors and the board of directors for deliberation and approval, which shall be disclosed after being finally approved by the board of directors.
5、 Defects and identification of internal control
According to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, and in combination with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, the board of directors of the company distinguished internal control over financial reports from internal control over non-financial reports, and studied and determined the specific identification standards of internal control defects applicable to the company, And consistent with previous years. The identification standards of internal control defects determined by the company are as follows:
Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
① Major defect: misstatement ≥ 5% of pre tax profit
② Important defect: 1% of pre tax profit ≤ misstatement ＜ 5% of pre tax profit
③ General defect: misstatement ＜ 1% of pre tax profit
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Defects with the following characteristics shall be identified as major defects:
① The defect involves fraud of directors, supervisors and senior managers;
② Correction of published financial statements;
③ The certified public accountant finds that there is a material misstatement in the current financial statements, but the internal control fails to find the misstatement in the operation process; ④ The supervision of the company’s audit committee and the discipline inspection, audit and legal department on internal control is invalid.
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:
① Major defect: misstatement ≥ 5% of pre tax profit
② Important defect: 1% of pre tax profit ≤ misstatement ＜ 5% of pre tax profit
③ General defect: misstatement ＜ 1% of pre tax profit
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Defects with the following characteristics shall be identified as major defects:
① Serious violation of national laws, administrative regulations and normative documents;
② “Three important and one major” issues have not gone through the collective decision-making process;
③ Serious loss of managers and technicians in key positions;
④ The important business involving the production and operation of the company lacks system control or the system fails;
⑤ Failure of internal control over information disclosure, resulting in the company being publicly condemned by the regulatory authorities;
⑥ The results of internal control evaluation, especially major defects or important defects, have not been rectified.
According to the above identification standards, combined with daily supervision and special supervision, the company has no major defects during the reporting period.
6、 Conclusion on the effectiveness of internal control
The company has evaluated the effectiveness of the company’s internal control design and operation as of December 31, 2021 in accordance with the basic specifications, evaluation guidelines, evaluation guidelines of the group company and other relevant laws and regulations. Prepare the internal control evaluation report according to the internal control evaluation.
During the reporting period, the company has established and effectively implemented internal control over the businesses and matters included in the evaluation scope, and achieved the goal of the company’s internal control without major defects.
There is no significant change in internal control that has a substantial impact on the evaluation conclusion between the benchmark date of the internal control evaluation report and the date of issuance of the internal control evaluation report.
In 2022, with the goal of “strengthening internal control, preventing risks and promoting compliance”, the company plans to continue to promote the integration and optimization of internal control, risk management and compliance management supervision, in addition to the annual internal control evaluation according to the requirements of previous years.
It is hereby announced
Fiyta Precision Technology Co.Ltd(000026)
Board of directors
March 10, 2002
