Citic Securities Company Limited(600030) , AVIC Securities Co., Ltd
About Tianma Microelectronics Co.Ltd(000050)
Verification opinions of internal control evaluation report in 2021
Citic Securities Company Limited(600030) (hereinafter referred to as ” Citic Securities Company Limited(600030) ) AVIC Securities Co., Ltd. (hereinafter referred to as “AVIC securities”, Citic Securities Company Limited(600030) and AVIC securities are collectively referred to as “co sponsor”) as the co sponsor of Tianma Microelectronics Co.Ltd(000050) (hereinafter referred to as “shentianma” and “the company”) for the continuous supervision of the non-public offering of A-Shares (hereinafter referred to as “this non-public offering”) in 2019, In accordance with the relevant provisions of the measures for the administration of securities issuance and listing recommendation business, the guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 13 – recommendation business, and the guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, the internal control of shentianma in 2021 was verified, The verification conditions and opinions are as follows:
1、 Internal control evaluation
(I) scope of internal control evaluation
The company determines the units, businesses, matters and high-risk areas included in the evaluation scope according to the risk oriented principle. The units included in the evaluation scope of this year include: parent company Tianma Microelectronics Co.Ltd(000050) and subsidiaries Wuhan Tianma Microelectronics Co., Ltd. (hereinafter referred to as “Wuhan Tianma”), Xiamen Tianma Microelectronics Co., Ltd. (hereinafter referred to as “Xiamen Tianma”), Shanghai Tianma Microelectronics Co., Ltd. (hereinafter referred to as “Shanghai Tianma”) Shanghai Avic Jonhon Optronic Technology Co.Ltd(002179) subsidiary Co., Ltd. (hereinafter referred to as “Shanghai optoelectronics”), Shanghai Tianma organic light emitting display technology Co., Ltd. (hereinafter referred to as “organic light”), Chengdu Tianma Microelectronics Co., Ltd. (hereinafter referred to as “Chengdu Tianma”), Shenzhen AVIC Display Technology Co., Ltd. (hereinafter referred to as “AVIC display”) Hubei Changjiang new display industry innovation center Co., Ltd. (hereinafter referred to as “innovation center”), Tianma Europe company (hereinafter referred to as “European Tianma”), Tianma America company (hereinafter referred to as “American Tianma”), Tianma Japan company (hereinafter referred to as “Japan Tianma”), South Korea Tianma company (hereinafter referred to as “South Korea Tianma”) Tianma Microelectronics (Hong Kong) Co., Ltd. (hereinafter referred to as “Hong Kong Tianma”), the total unit assets included in the evaluation scope account for 99.99% of the total assets within the scope of the company’s merger, and the total operating revenue accounts for 99.98% of the total operating revenue within the scope of the company’s merger. The main businesses and matters included in the evaluation scope include: strategic management, market management, sales management, R & D and product management, operation management, procurement management, production and manufacturing, logistics management, quality management, financial management, human resource management, process and information management, legal / risk management, environmental safety management, intellectual property management, administrative management 20 major processes including factory infrastructure management, discipline inspection / audit management, securities and external relations management, Party construction and publicity management, and focus on high-risk areas such as company investment, procurement management, price management, asset management, scientific research outsourcing, salary and welfare, fund management, guarantee, engineering construction, overseas asset management and so on. The evaluation scope of internal control has covered the core business processes and key modules of the company and its key subsidiaries, and there is no major omission.
(II) basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the requirements of the enterprise’s internal control standard system and in combination with the company’s internal control related systems.
The board of directors of the company studied and determined the specific identification standards of internal control defects applicable to the company according to the identification requirements of the enterprise internal control standard system for major defects, important defects and general defects, combined with the company’s scale, industry characteristics, risk preference, risk tolerance and other factors, Including qualitative standards and quantitative standards (distinguishing between internal control defects in financial reporting and internal control defects in non-financial reporting at the same time). The identification standards of internal control defects determined by the company are as follows:
1. Identification standard of internal control defects in financial reporting
The quantitative and qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Standard for defect classification
Quantitative and qualitative criteria
The amount of misstatement in the financial statements falls into the following categories: 1) fraud by directors, supervisors and senior managers of the company;
Lower range: 2) the company corrects the published financial report;
1) The amount of misstatement ≥ 3) the material deficiency of the current period found by the certified public accountant but not identified by the company’s internal control is 0.5%; Material misstatement in the financial report;
(2) the amount of misstatement ≥ 0.5% of the total operating income of the company’s audit committee, risk management committee, internal audit and supervision; The supervision of internal control by the supervision organization is invalid;
3) Amount of misstatement ≥ total profit before tax 5) others: 10% of the amount that can not be prevented or discovered in time due to reasonable possibility. Correct the internal control defects of material misstatement in financial reports.
The amount of misstatement in the financial statements falls into the following categories: 1) failure to select and apply accounting policies in accordance with generally accepted accounting standards;
Lower range: 2) no anti fraud procedures and control measures have been established;
Important deficiency 1) 0.3% of total assets ≤ misstatement amount 3) for the accounting treatment of unconventional or special transactions, there is no corresponding trap ＜ 0.5% of total assets; Control mechanism or not implemented and there is no corresponding compensatory control;
2) 0.3% of total operating income ≤ error 4) if there are one or more defects in the control of the financial reporting process at the end of the period and the reported amount is less than the total operating income, it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy; 0.5%； 5) Others: there is a reasonable possibility that it cannot be prevented or found and corrected in time
3) 5% of the total profit before tax ≤ the internal control defect of misstatement in the financial report, which does not reach or exceed the importance level, but the amount should still be less than the total profit before tax, which has attracted the attention of the board of directors and management.
10%。
The amount of misstatement in the financial statements is as follows:
Lower interval:
1) Amount of misstatement ＜ total assets
Generally 0.3%; Internal control defects that do not constitute major defects and important defects.
(2) misstatement amount ＜ total operating income
0.3% of;
3) Misstatement amount ＜ total profit before tax
5% of.
2. Identification standard of internal control defects in non-financial reporting
The quantitative and qualitative identification criteria for the evaluation of internal control defects in non-financial reports determined by the company are as follows:
Standard for defect classification
Quantitative and qualitative criteria
The amount of direct loss falls in the following range: 1) lack of democratic decision-making procedures;
1) The amount of direct loss ≥ 2) the decision-making procedure leads to major mistakes;
0.5% of major deficiencies; 3) Violation of national laws and regulations and punishment;
(2) the amount of direct loss ≥ 4% of the total operating revenue; 4) serious loss of middle and senior managers and senior technicians; 0.5%； 5) Negative news frequently appears in the media, affecting a wide range;
3) The amount of direct loss ≥ 6% of the total pre tax profit) the important business lacks system control or the system fails;
10%。 7) Major defects found in internal control evaluation have not been rectified.
The amount of direct loss falls in the following range: 1) democratic decision-making procedures exist but are not perfect;
1) 0.3% of total assets ≤ direct loss amount 2) general error caused by decision-making process;
Major deficiency 0.5% of total assets; 3) Violation of internal rules and regulations of the enterprise, resulting in losses;
2) 0.3% of total operating revenue ≤ direct loss 4) serious loss of business personnel in key positions;
Amount ＜ 0.5% of total operating revenue; 5) Negative news in the media, affecting local areas;
3) 5% of the total profit before tax ≤ direct loss 6) there are defects in important business systems or systems;
Amount ＜ 10% of the total profit before tax. 7) Important defects in internal control have not been rectified.
The amount of direct loss falls in the following range: 1) the efficiency of decision-making procedure is not high;
1) The amount of direct loss is less than 2% of the total assets. 2) violation of internal rules and regulations, but no loss is formed;
Generally 0.3%; 3) Serious loss of business personnel in general posts;
2) the amount of direct loss is less than the total operating income. 4) negative news appears in the media, but the impact is small;
0.3% of; 5) Defects in general business system or system;
3) Direct loss amount ＜ total profit before tax 6) general defects of internal control have not been rectified;
5% of. 7) Other defects.
(III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reporting
According to the above identification standards of internal control defects in financial reporting, the company has no major defects and important defects in internal control of financial reporting during the reporting period.
2. Identification and rectification of internal control defects in non-financial reports
According to the above identification standards of internal control defects in non-financial reports, no major defects and important defects in the company’s internal control over non-financial reports were found during the reporting period.
2、 Evaluation conclusion of the board of directors on the company’s internal control in 2021
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、 Verification opinions of the co sponsor
After verification, the co sponsor believes that shentianma has established a relatively perfect corporate governance structure, the company’s current internal control system meets the requirements of relevant laws and regulations and securities regulatory authorities, can meet the needs of the company’s actual production and operation and the requirements of management development, and has maintained effective internal control related to the company’s business operation and management in all major aspects. The self-evaluation of shentianma’s internal control in 2021 truly and objectively reflects the construction and operation of its internal control system.
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(there is no text on this page, which is the signature page of Citic Securities Company Limited(600030) , AVIC Securities Co., Ltd. on the verification opinions of Tianma Microelectronics Co.Ltd(000050) 2021 annual internal control evaluation report)
Sponsor representative:
Xiao Shaochun, Zhao Xu
Citic Securities Company Limited(600030) mm / DD / yyyy (there is no text on this page, which is the signature page of Citic Securities Company Limited(600030) and AVIC Securities Co., Ltd. verification opinions on Tianma Microelectronics Co.Ltd(000050) 2021 annual internal control evaluation report)
Sponsor representative:
Guo Weiming, Yang Tao
AVIC Securities Co., Ltd
