Sihui Fuji Electronics Technology Co.Ltd(300852) : self evaluation report on internal control in 2021

Sihui Fuji Electronics Technology Co.Ltd(300852)

Self evaluation report on internal control in 2021

Sihui Fuji Electronics Technology Co.Ltd(300852) all shareholders:

In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the “enterprise internal control normative system”), combined with the internal control system and evaluation methods of the company (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, 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、 Internal control evaluation (I) 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. The main units included in the evaluation scope include Sihui Fuji Electronics Technology Co.Ltd(300852) and wholly-owned subsidiaries. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company’s consolidated financial statements.

The main businesses and matters included in the scope of evaluation include: organizational structure of control environment, development strategy, human resources, social responsibility and corporate culture; Risk assessment; Fund management, procurement and payment, asset management, sales management, safety production and product quality control, engineering project, comprehensive budget, financial report and subsidiary management of control activities; Information disclosure and internal information transmission of information system and transmission; Internal control of major investment and external guarantee, internal control of related party transactions, etc. The high-risk areas of focus mainly include sales management, fund management, investment management, financial report management, etc.

The above-mentioned units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management, without major omissions and statutory exemptions. (II) basis of internal control evaluation and identification standard of internal control defects

The company organizes the internal control evaluation according to the enterprise internal control standard system, the company law of the people’s Republic of China and the securities law of the people’s Republic of China.

The board of directors of the company distinguished the internal control of financial report from the internal control of non-financial report according to the identification requirements for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company’s size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the previous years. The identification standards of internal control defects determined by the company are as follows: 1. Identification standards of internal control defects in financial reports

Internal control defects in financial reporting can be divided into major defects, important defects and general defects. The recognition standard adopted depends on the importance of potential misstatement of financial reporting caused by the existence of internal control defects.

The quantitative standard for the identification of internal control defects in the company’s financial reports shall be determined in accordance with the following indicators and principles:

Quantitative standard major defect important defect general defect

Operating revenue 2% of total operating revenue of total operating revenue ≤ misstatement ＜ 5% of potential misstatement ＜ 5% of total operating revenue ≤ misstatement ＜ 2% of total operating revenue

The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company shall be determined in accordance with the following indicators and principles:

Major defects include: (1) fraud of directors, supervisors and senior managers; (2) Make misstatement correction for major errors in the issued and announced financial report; (3) Material misstatement in the current financial report found by the certified public accountant but not identified by the internal control; (4) The supervision of the audit committee and the internal audit department on the internal control of financial reports is invalid; The company’s internal control environment is invalid.

Important defects include: (1) failure to select and apply accounting policies in accordance with generally accepted accounting standards; (2) Failure to establish anti fraud procedures and control measures; (3) No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control; (4) There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably ensure that the prepared financial statements achieve the goal of authenticity and accuracy.

General defects refer to other control defects other than the above major defects and important defects. 2. Identification standard of internal control defects in non-financial reporting

The identification of the company’s internal control defects in non-financial reporting is mainly based on the severity of the business nature involved, the nature of direct or potential negative impact, the scope of impact, etc. The quantitative standard for the evaluation of internal control defects in non-financial reporting determined by the company shall be determined according to the following indicators and principles:

Defect identification level direct property loss amount

General defects: 1 million yuan (including 1 million yuan) – 5 million yuan

Major defects: 5 million yuan (including 5 million yuan) – 10 million yuan

Major defects of 10 million yuan or more

The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company shall be determined according to the following indicators and principles:

Major defects include: (1) violation of national laws and regulations or normative documents, unsound corporate governance structure, unscientific major decision-making procedures, failure to rectify major defects, and other situations that have a significant negative impact on the company; (2) The company has major violations of laws and regulations and liability accidents in asset management, capital operation, information disclosure, safety production, environmental protection, etc., which have caused heavy losses and adverse effects to the company, or suffered major administrative and regulatory penalties; (3) The fraud of directors, supervisors and senior managers of the company has caused significant economic losses and negative impact to the company.

Important defects include: (1) the absence of the company’s internal control system may lead to important deficiencies that cannot be rectified, as well as other situations where the internal control system fails to be effectively implemented, resulting in large losses or great negative impact.

General defects refer to other control defects other than the above major defects and important defects, which are determined according to the degree of influence.

(III) identification and rectification of internal control defects 1. Identification and rectification of internal control defects in financial reports

According to the above identification standards of internal control defects in financial reports, the company has no internal control defects related to financial reports 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, there were no internal control defects related to the company’s non-financial reports during the reporting period. 4、 Description of other major matters related to internal control

The company has no explanation of other major matters related to internal control.

Sihui Fuji Electronics Technology Co.Ltd(300852) board of directors March 24, 2022

Independent directors’ comments on the seventh meeting of the second board of directors

Opinions of independent directors on relevant matters

In accordance with the provisions of relevant laws, regulations and rules, such as the guidelines for self regulation and supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the Sihui Fuji Electronics Technology Co.Ltd(300852) articles of association and the working rules for Sihui Fuji Electronics Technology Co.Ltd(300852) independent directors, we are the independent directors of Sihui Fuji Electronics Technology Co.Ltd(300852) (hereinafter referred to as the “company”), Based on the principle of being responsible to all shareholders and the company, based on objective and independent judgment and adhering to a scientific and rigorous working attitude, the company carefully checked the relevant matters of the seventh meeting of the second board of directors, and expressed the following independent opinions:

1、 Independent opinions on the self-evaluation report of the company’s internal control in 2021

After carefully reviewing the 2021 internal control self evaluation report, communicating with the company’s management and relevant departments, and consulting the relevant internal control management system of the company, we believe that the company has established a relatively perfect internal control system and can be effectively implemented. The self-evaluation report of the company’s internal control truly and objectively reflects the establishment, implementation and actual operation of the company’s internal control system.

We agree to submit the 2021 internal control self evaluation report prepared by the company.

2、 Independent opinions on the occupation of funds by the company’s controlling shareholders and other related parties and the company’s external guarantee

According to the relevant laws and regulations such as the Listing Rules of Shenzhen Stock Exchange gem and the relevant provisions of the articles of association and the external guarantee management system, after verification, based on objective and independent judgment, we express the following independent opinions on the occupation of funds by the controlling shareholders and other related parties and the external guarantee of the company during the reporting period:

(1) During the reporting period, there was no non operational occupation of the company’s funds by controlling shareholders and other related parties; There is no illegal occupation of the company’s funds by controlling shareholders and other related parties in previous years and accumulated to December 31, 2021.

(2) As of the end of the period, there is no situation that any legal person, controlling shareholder or other related party actually provides the report.

3、 Independent opinions on 2021 profit distribution plan

After careful review of the proposal on the profit distribution plan for 2021, the independent directors believe that the company’s performance growth in 2021 is stable. The profit distribution plan proposed by the company comprehensively considers the current capital stock scale, business development needs, profitability and capital needs of the company, matches the performance growth of the company, takes into account the reasonable needs of shareholders’ return, and allows all shareholders to share the operating results of the company’s growth. The profit distribution plan of the company complies with the relevant provisions of the company law, the articles of association and other laws and regulations, has legitimacy, compliance and rationality, and does not damage the legitimate rights and interests of the company or shareholders.

We agree with the company’s proposal on the profit distribution plan for 2021 and agree to submit the proposal to the general meeting of shareholders for deliberation.

4、 Independent opinions on the special report on the deposit and actual use of raised funds in 2021

After carefully reviewing the special report on the deposit and actual use of raised funds in 2021, the independent directors believe that the management and use of the company’s raised funds comply with the relevant provisions on the use and management of raised funds in relevant laws and regulations such as the China Securities Regulatory Commission, Shenzhen Stock Exchange and the company’s raised funds management system, and the content is true, accurate and complete, which can reflect the deposit and actual use of raised funds in 2021 The actual situation of use does not harm the interests of the company and shareholders.

We agree with the special report on the deposit and actual use of raised funds in 2021 prepared by the company. 5、 Independent opinions on the remuneration plan of the company’s directors, supervisors and senior managers in 2022

After verification, we believe that the remuneration plan for directors, supervisors and senior managers of the company in 2022 is carried out in strict accordance with the relevant systems of the company and formulated in combination with the current operation and management status of the company, which is conducive to mobilizing the work enthusiasm of directors, supervisors and senior managers, strengthening the sense of diligence and responsibility of directors, supervisors and senior managers, and conducive to the long-term development of the company.

We agree to the remuneration plan of the company’s directors, supervisors and senior managers in 2022 and submit this proposal to the general meeting of shareholders for deliberation.

6、 Independent opinions on the proposal that the company and its subsidiaries are expected to apply to the bank for comprehensive credit line in 2022 and the company provides guarantee for the subsidiary’s application for comprehensive credit line

After verification, we believe that the company and its subsidiaries apply for comprehensive credit from the bank and the company provides guarantee for the comprehensive credit line applied for by the subsidiary is to meet the actual needs of the company’s daily operation and the working capital of the subsidiary, contribute to the development of the subsidiary, the guarantee risk is controllable, the deliberation and voting procedures of the board of directors comply with the relevant provisions of laws, regulations and the articles of association, and will not affect the sustainable operation ability of the company, There is no situation that damages the interests of the company and shareholders.

We agree to the implementation of the company and its subsidiaries applying for comprehensive credit line from the bank and the guarantee provided by the company for its subsidiaries applying for comprehensive credit line.

7、 Independent opinions on the proposal of using idle self owned funds for entrusted financial management

After verification, we believe that the company and its subsidiaries intend to use idle self owned funds for entrusted financial management, have fulfilled the necessary examination and approval procedures, and comply with the relevant provisions of relevant laws, regulations and normative documents such as the Shenzhen Stock Exchange GEM Listing Rules. At present, the company is in good operation and stable financial condition. Under the condition of ensuring the capital demand of daily operation, effectively controlling investment risk and capital safety, the company and its subsidiaries agree to use idle self owned funds with a total amount of no more than 350 million yuan for entrusted financial management, which is conducive to