Tianma Microelectronics Co.Ltd(000050)
Internal control evaluation report in 2021
Tianma Microelectronics Co.Ltd(000050) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with Tianma Microelectronics Co.Ltd(000050) (hereinafter referred to as the company) internal control system and evaluation methods, on the basis of daily supervision 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 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 company’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, 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.
No impact has occurred between the benchmark date of the internal control evaluation report and the date of issuance of the internal control evaluation report. III. 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) Electronics Co., Ltd. (hereinafter referred to as Shanghai Optoelectronics) Shanghai Tianma organic light emitting display technology Co., Ltd. (hereinafter referred to as organic light emitting), 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 Japanese 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 assets of the unit included in the evaluation scope account for 99.99% of the total assets within the consolidation scope of the company, and the total operating revenue accounts for 99.98% of the total operating revenue within the consolidation scope of the company. 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 criteria for defects in internal control over financial reporting
The quantitative and qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Defect identification standard
Classification quantitative criteria qualitative criteria
The amount of misstatement in the financial statements falls below 1) fraud by the directors, supervisors and senior managers of the company;
2) The company corrects the published financial report;
In the following sections:
3) Found by certified public accountants but not recognized by the company’s internal control 1) misstated amount ≥ total assets
Material misstatement in the current financial report;
Significant 0.5%;
4) Company audit committee, risk management committee and internal audit defect 2) misstatement amount ≥ operating income
The supervision of internal control by the planning and supervision organization is invalid;
0.5% of the total amount;
5) Others: there is a reasonable possibility that it cannot be prevented in time or 3) the amount of misstatement is ≥ pre tax profit
10% of the total amount of internal control to detect and correct material misstatement in the financial report.
Defects.
The amount of misstatement in the financial statements falls below 1) failing to select and apply accounting policies in accordance with generally accepted accounting standards; In the following range: 2) no anti fraud procedures and control measures have been established;
1) 0.3% of total assets ≤ error 3) for the accounting treatment of unconventional or special transactions, there is no corresponding control mechanism with the reported amount less than the total assets, or it is not implemented and there is no corresponding compensation of 0.5%; Sexual control;
Important 2) of total operating revenue 4) there are one or more defects in the control of the financial reporting process at the end of the period, 0.3% ≤ the amount of misstatement ＜ operating defects, and it is impossible to reasonably ensure that the prepared financial statements are true and 0.5% of the total revenue; Accurate objectives;
3) 5% of the total profit before tax ≤ 5) others: there is a reasonable possibility that it can not be prevented in time or the amount of misstatement is less than the total profit before tax, and correct 10% of the important amount in the financial report.
The internal control defects of misstatement that still deserve the attention of the board of directors and management.
Amount of misstatement in financial statements
In the following sections:
1) Misstatement amount ＜ total assets
General 0.3%; Internal control defects that do not constitute major defects and important defects. Defect 2) misstatement amount ＜ operating income
0.3% of the total amount;
3) Misstatement amount ＜ profit before tax
5% of the total.
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:
Defect identification standard
Classification quantitative criteria qualitative criteria
1) Lack of democratic decision-making procedures;
The amount of direct loss falls in the following range: 2) the decision-making process leads to major mistakes;
1) The amount of direct loss ≥ 3% of the total assets; 3) violation of national laws and regulations and punishment;
Significant 0.5%; 4) 2) the amount of direct loss of business and senior technical personnel ≥ 2);
0.5% of the amount; 5) Negative news frequently appears in the media, affecting a wide range;
3) Direct loss amount ≥ total profit before tax 6) lack of system control or system failure of important business; 10% of the amount. 7) Major defects found in internal control evaluation have not been rectified.
The amount of direct loss falls in the following range:
1) 0.3% of total assets ≤ direct loss 1) democratic decision-making procedures exist but are not perfect;
Amount ＜ 0.5% of total assets; 2) General mistakes caused by decision-making procedures;
2) 0.3% of the total operating income ≤ 3) direct violation of internal rules and regulations of the enterprise, resulting in losses; The amount of defect loss ＜ 4% of the total operating revenue) serious loss of business personnel in key positions;
0.5%； 5) Negative news in the media, affecting local areas;
3) 5% of the total pre tax profit ≤ 6) there are defects in important business systems or systems;
The amount of loss ＜ 7% of the total profit before tax) important defects in internal control have not been rectified.
10%。
The amount of direct loss falls in the following range: 1) the efficiency of decision-making procedure is not high;
1) Direct loss amount ＜ total assets 2) violation of internal regulations but no loss;
General 0.3%; 3) Serious loss of business personnel in general posts;
Defect 2) the amount of direct loss is less than the operating income 4) there is negative news in the media, but the impact is small;
0.3% of the total amount; 5) Defects in general business system or system;
3) Direct loss amount ＜ profit before tax 6) general defects of internal control have not been rectified;
5% of the total. 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. 4、 Description of other major matters related to internal control
During the reporting period, the company has no other internal control information that may have a significant impact on investors’ understanding of the internal control evaluation report, evaluation of internal control or investment decisions.
Chairman: Peng Xuhui Tianma Microelectronics Co.Ltd(000050) March 2002
