2021 internal control self-evaluation report and relevant opinions
Xgd Inc(300130) 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 Xgd Inc(300130) (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 as of December 31, 2021 (benchmark date of 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, accuracy 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) 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 scope of evaluation include:
Xgd Inc(300130) parent company
Wholly owned subsidiary of Shenzhen Xgd Inc(300130) Payment Technology Co., Ltd
Zhejiang Zhongzheng Intelligent Technology Co., Ltd. holding subsidiary
Wholly owned subsidiary of Jialian payment Co., Ltd
Wholly owned subsidiary of Changsha Gongxin Chengfeng Information Technology Service Co., Ltd
A wholly owned subsidiary of nexgo, Inc
Wholly owned subsidiary of Shenzhen Xgd Inc(300130) intelligent Co., Ltd
Wholly owned subsidiary of Shenzhen Xgd Inc(300130) Commercial Service Co., Ltd
Wholly owned subsidiary of nexgo Global Limited
Shenzhen Dingjia Information Technology Co., Ltd. is a wholly-owned subsidiary
A wholly-owned subsidiary of Shenzhen duzhijia Technology Co., Ltd
Changsha FaDu Internet Technology Co., Ltd. is a wholly-owned subsidiary
Wholly owned subsidiary of Hunan FaDu Internet Technology Co., Ltd
Wholly owned subsidiary of Hunan Chengdu Internet Technology Co., Ltd
Nexgo do Brasil participacoes LTDA wholly owned subsidiary
Wholly owned subsidiary of Shenzhen Xgd Inc(300130) Tengyun Software Co., Ltd
Wholly owned subsidiary of nexgo India Private Limited
Wholly owned subsidiary of deepert Limited
XGd Macau Limited holding subsidiary
Wholly owned subsidiary of xGd Europe S.A
Wholly owned subsidiary of Shenzhen Jialian cloud Technology Co., Ltd
Wholly owned subsidiary of Shenzhen Xgd Inc(300130) Communication Technology Co., Ltd
Shenzhen Xgd Inc(300130) Payment Technology Co., Ltd. manufacturing branch
branch office
company
Zhejiang Zhongzheng Intelligent Technology Co., Ltd. Shenzhen Branch
Zhejiang Zhongzheng Intelligent Technology Co., Ltd. Beijing Branch
Jialian payment Co., Ltd. (34 branches)
Note: deepert Limited is a wholly-owned subsidiary newly established in April 2021; Hunan Chengdu Internet Technology Co., Ltd. is a wholly-owned secondary subsidiary newly established in July 2021. 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 operations and matters included in the scope of evaluation include:
1. Internal control environment
(1) Organizational structure
In accordance with the requirements of the company law, securities law and other laws and regulations, the company has established an organizational structure that meets the size and management needs of the company:
The general meeting of shareholders of the company is the highest authority, which can ensure that all shareholders, especially small and medium-sized shareholders, enjoy equal status and that all shareholders can exercise their rights;
The board of directors is the decision-making body of the company, responsible for the establishment and supervision of the company’s internal control system, establishing and improving internal control policies and schemes, supervising the implementation of internal control system, and the Secretary of the board of directors is responsible for handling the daily affairs of the board of directors;
The board of supervisors is the supervisory body of the company, which supervises and inspects the behavior of directors, general managers and other senior executives and the financial status of subsidiaries, and is responsible for and reports to the general meeting of shareholders;
The board of directors of the company has four special committees: nomination committee, salary and assessment committee, strategy committee and audit committee, and has formulated the working rules of each special committee.
Since its establishment, the special committees have operated well, and the members have earnestly performed their duties to ensure the healthy operation of the company.
The company has formulated and strictly implemented the working system of independent directors. Independent directors express independent opinions in strict accordance with relevant regulations in the use of raised funds, foreign investment, foreign guarantee, related party transactions and other aspects of the company, playing a necessary supervisory role.
The company follows the principles of mutual supervision, mutual restriction and coordinated operation, implements the general manager responsibility system under the leadership of the board of directors, and reasonably sets up various functional departments and posts.
(2) Internal supervision
The board of directors of the company sets up an audit committee, and the audit and supervision department under the audit committee supervises and inspects the establishment and implementation of internal control, evaluates the effectiveness of internal control and finds defects in internal control. During the reporting period, under the guidance of the audit committee of the board of directors of the company, the audit and supervision department regularly and irregularly audited and inspected the finance, internal control, major projects and other businesses of the company and its subsidiaries, timely put forward control management suggestions for the problems found in the process of supervision and inspection, and urge relevant departments to rectify in time to ensure the effective implementation of internal control; At the same time, many “anti-corruption and anti fraud” warning education and publicity activities were carried out to prevent and control business risks, strengthen internal supervision and ensure the stable development of the company.
(3) Research and development
The company formulated the design and development control procedure and Jialian software development specification, which standardized the project approval management of R & D process and the financial accounting management of R & D system. The company adheres to the promotion of innovation, improves its core competitiveness with technological innovation, and increases investment in technological R & D. We will strengthen research on original basic and cutting-edge technologies, enhance strategic technology reserves, and form a capacity foundation for long-term development. Pay attention to the protection and transformation of research results, and form an integrated innovation mechanism connecting scientific research, production and market.
(4) Procurement and payment
According to the actual situation, the company formulates the procurement management procedure, supplier development evaluation procedure, key material development and procurement management specification, accounts payable verification and invoice management measures, Zhejiang Zhongzheng procurement operation control procedure, etc., and defines the internal control procedures and personnel post responsibilities of important procurement links and key control points such as procurement plan and implementation management, supplier management and payment settlement, Ensure that the purchased goods are of high quality, low price, timely and high quality to meet the needs of production management. In order to promote the company’s reasonable procurement and prevent procurement risks, the company formulates the general terms for procurement of Xgd Inc(300130) goods and / or services and the code of conduct for suppliers according to the actual situation, which accurately describes the responsibilities, obligations and relevant liabilities for breach of contract of both parties, so as to ensure the reasonable and effective development of the company’s procurement business.
(5) Sales and collection
The company has formulated sales related internal control systems such as sales and technical service control procedures, sales representative work specifications and accounts receivable reconciliation management measures, and standardized the control procedures for ordering, documentary, delivery, invoicing, collection, reconciliation and other links. The company continued to strengthen customer credit review, strengthen sales collection management, improve the collection speed of accounts receivable and continuously reduce the risk of sales collection.
(6) Receipt management
The company has formulated the management specification for Jialian acquiring business, strictly screened merchants, stipulated the basic conditions of merchants, cautious merchants and merchants prohibited from development, standardized merchant agreement management and implemented merchant category management; Specify the basic work contents and requirements of merchant investigation; Clarify the basic requirements for merchants to sign contracts; Establish a hierarchical approval system for merchants’ applications, and clarify the approval responsibilities and authorities of preliminary review and review; It standardizes merchant investigation, online registration, merchant file, terminal installation, deposit and service fee collection, merchant business training, merchant return visit, merchant information change and merchant cancellation, merchant risk management and business file management.
(7) Fund clearing management
The company has formulated Jialian capital clearing risk management system, which specifies the basic requirements of capital clearing, capital clearing work content, clearing exception handling, settlement business archives and settlement risk prevention and control, so as to ensure the fast, accurate and safe capital clearing of Jialian, effectively prevent and timely solve the abnormal events of capital clearing of UnionPay card inter-bank business, and standardize the operation and handling of abnormal situations.
(8) Financial Report
In accordance with the accounting standards for business enterprises and the accounting law, the company has established a perfect financial management system and a perfect post system for financial personnel. The above systems have been effectively implemented to ensure the company’s asset and fund management in all links such as procurement, R & D, production and sales, and the authenticity, accuracy and effectiveness of financial information.
(9) External guarantee
The company formulates and implements the measures for the administration of financing and external guarantee, defines the conditions, approval authority, approval procedures and information disclosure of external guarantee, and clearly stipulates that the company’s external guarantee must be reviewed by the general meeting of shareholders or the board of directors. The company and its holding subsidiaries have not provided any form of guarantee to shareholders or actual controllers and their subsidiaries and non related parties.
(10) Human resources
The company has established a series of human resource management policies and process guidelines on personnel administration, which clearly stipulates employee recruitment, promotion, performance appraisal, salary, reward and punishment, so as to ensure that relevant personnel are competent; Formulate and implement targeted training plans to ensure that the management and all employees can effectively perform their duties; The company’s existing human resources policies can basically ensure the stability of human resources and the demand for human resources of all departments of the company.
(11) Corporate culture
The company has formulated the evaluation standards of values of customer-centered, enterpriser oriented, cooperative and efficient, and adhering to self-criticism, actively cultivate the corporate culture with its own characteristics, guide and standardize the behavior of employees, build the main business brand, form the centripetal force of the overall team, and promote the long-term development of the enterprise.
With improving the ability of employees as the core task and training talents as the leading role, strengthen the human resource management planning to adapt to the strategic objectives, build an excellent human resource management system based on post, ability and performance management, establish a human resource incentive mechanism to adapt to the long-term development of the enterprise, and build a professional talent team with responsibility, understanding of the market, good cooperation, performance and excellence.
Adapt to the rapidly changing industry environment with the spirit of continuous innovation and entrepreneurship and the healthy growth of enterprise scale; Focus on culture, technology, capital and management, and make continuous progress towards the goal of “China’s leading and world-class”; Forge the core competence of sustainable operation with first-class talents, first-class technology and management, first-class profitability and first-class brand image.
(12) Social responsibility
According to the national and industrial requirements for product quality, the company engages in production and business activities, effectively improves the quality and service level of products, strives to provide high-quality products and services for the society, meets the needs of consumers to the greatest extent, is responsible to the society and the public, accepts social supervision and assumes social responsibility. The company is trying to create economic efficiency
