Jiangsu Olive Sensors High-Tech Co.Ltd(300507)
Internal control self evaluation report
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 company’s internal control system and evaluation methods, and 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 (the 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 supervises the establishment and implementation of internal control by the board of directors, and 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 enterprise operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of enterprise 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
The board of Directors believes that as of December 31, 2021, the company has maintained effective internal control in all major aspects in accordance with the requirements of the enterprise internal control standard system and relevant regulations. The internal control system covers financial management, connected transaction management, external guarantee management, information disclosure management, subsidiary management and other links. It can meet the needs of the company’s management and development, and plays a positive role in the company’s standardized operation, strengthening management, improving efficiency, preventing business risks and the company’s long-term development. 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、 Evaluation of internal control
In accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the basic norms of enterprise internal control, the supporting guidelines for internal control, the guidelines for internal control of listed companies of Shenzhen Stock Exchange, and the rules for the preparation of information disclosure of Companies offering securities to the public No. 21 – General Provisions on annual internal control evaluation report and other laws and regulations, In accordance with the provisions of the articles of association and in the attitude of being responsible to all shareholders, the company conducted a comprehensive and in-depth inspection on the internal control of the company in 2021, and evaluated the internal control of the company on the basis of understanding and mastering various internal control management systems and their implementation. Now the self-evaluation of the company’s internal control in 2021 is reported as follows: (I) basic information of the company:
Jiangsu Olive Sensors High-Tech Co.Ltd(300507) (hereinafter referred to as “the company” or “the company”), formerly known as Yangzhou aoliwei sensor Co., Ltd., was approved by Yangzhou foreign economic relations and Trade Commission in yangjingmao Zizi (1993) No. 367 document, registered and established in Yangzhou Administration for Industry and Commerce on November 19, 1993, and obtained the business license of enterprise legal person with the registration number of “industrial and commercial enterprise he Suyang Zi No. 00913″. On September 22, 2010, Yangzhou aoliwei sensor Co., Ltd. was restructured into a joint stock limited company after being deliberated and approved by the shareholders’ meeting of the company. On October 10, 2010, with the approval of Yangzhou Administration for Industry and Commerce of Jiangsu Province, the company name was changed to ” Jiangsu Olive Sensors High-Tech Co.Ltd(300507) “. On March 16, 2016, approved by the reply on approving Jiangsu Olive Sensors High-Tech Co.Ltd(300507) initial public offering of shares (zjxk [2016] No. 541) of China Securities Regulatory Commission, it was approved to publicly issue 16.67 million RMB ordinary shares (A shares), with a par value of 1 yuan per share and an issue price of 24.92 yuan per share. On April 29, 2016, the company was officially listed on the Shenzhen Stock Exchange. The company’s business license registration number is 91321 Yang Guang Co.Ltd(000608) 707880c. Its business scope is: production and sales of sensors and accessories, engineering plastic parts, auto parts and related molds; Technology development and import and export business (except for the commodities that are restricted or prohibited by the state). Registered address: No. 158, Xiangyuan Road, Yangzhou high tech Industrial Development Zone, Jiangsu Province, office: No. 158, Xiangyuan Road, Yangzhou high tech Industrial Development Zone, Jiangsu Province.
(II) objective of the company to establish internal control system
1. Establish and improve the internal organizational structure that meets the requirements of modern company management, and form a scientific decision-making mechanism, execution mechanism and supervision mechanism to ensure the realization of the company’s operation and management objectives;
2. Establish an effective risk control system, strengthen risk management and ensure the normal and orderly operation of the company’s business activities;
3. Establish a good internal control environment of the company, plug loopholes and eliminate hidden dangers, prevent and timely detect and correct errors and fraud, and protect the safety and integrity of the company’s assets;
4. Standardize the accounting behavior of the company, ensure the authenticity and integrity of accounting materials, and improve the quality of accounting information;
5. Ensure the implementation of relevant national laws and regulations and the company’s internal rules and regulations.
(III) basic principles for the establishment of the company’s internal control
1. Internal control complies with relevant national laws and regulations, internal accounting control norms – basic norms (for Trial Implementation) issued by the Ministry of Finance and relevant specific norms, as well as the actual situation of the company;
2. Internal accounting control restricts all personnel involved in accounting work within the company, and no individual shall have the right to go beyond internal control.
3. Internal accounting control covers all economic businesses and relevant posts related to accounting work within the company, and implements policies, implementation, supervision, feedback and other links according to the key control points in the process of business processing.
4. Internal accounting control ensures the reasonable setting of institutions and posts involved in accounting work and the reasonable division of responsibilities and authorities within the company, adheres to the separation of incompatible posts, and ensures that different institutions and posts have clear rights and responsibilities, restrict and supervise each other.
5. Internal control follows the principle of cost-benefit, reasonably controls the cost and achieves the best control effect.
6. Internal control is constantly revised and improved with the change of external environment, the adjustment of business functions and the improvement of management requirements.
(IV) 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 main units included in the evaluation scope include: Jiangsu Olive Sensors High-Tech Co.Ltd(300507) headquarters and its important subsidiary Jiangsu shurchi precision metal forming Co., Ltd. The total assets of the main units included in the evaluation scope accounted for 89.07% of the total assets in the company’s consolidated statements, and the total operating revenue accounted for 97.48% of the total operating revenue in the company’s consolidated statements.
The main businesses and matters included in the evaluation scope include: corporate governance, risk assessment, daily management, human resources, human resources, basic management, procurement and supply management, production management, quality management, sales management, information disclosure management, raised funds management, etc.
(V) the company’s internal control system and control procedures
1. Internal environment
The control environment of the company reflects the attitude of the management and management towards the importance of control. The quality of the control environment directly determines the smooth implementation and effect of the internal control system. Based on the basic concept of standardized operation, the company is actively trying to create a good control environment, which is mainly reflected in the following aspects:
(1) Communication and implementation of integrity and moral values
Integrity and moral values are an important part of the control environment and affect the design and operation of important business processes of the company. The company has always attached importance to the creation and maintenance of this atmosphere, established a series of internal norms such as employee code of conduct and employee work manual, and effectively implemented these multi-channel and all-round through strict punishment system and the practice of senior managers.
(2) Emphasis on Competence
The management of the company attaches great importance to the setting of the use ability level required for specific jobs, as well as the requirements for the knowledge and ability necessary to achieve this level. The company also carries out various forms of post training and education for different posts according to the needs of actual work, so that employees can be competent for their current jobs.
(3) Participation of governance
The responsibilities of the management of the company have been clearly stipulated in the articles of association and policies of the company. Through its own activities and with the support of the audit committee, the governance layer supervises the company’s accounting policies and internal and external audit work and results. The responsibilities of the governance layer also include supervising whether the policies and procedures designed to review the effectiveness of internal control are reasonable and effective. (4) Management philosophy and business style
Based on the company’s mission, vision and core values, combined with the company’s development strategy, the operation and management team of aoliwei gives full play to the function of the company’s culture and actively cultivates a working environment conducive to authorization; Create a good learning atmosphere; Fully mobilize the enthusiasm of employees to actively participate in the company’s management; Establish a good corporate image of law-abiding, honest and enterprising, and influence relevant parties through practical actions.
(5) Organizational structure
In order to effectively plan, coordinate and control business activities, the company has reasonably determined the form and nature of the company, implemented the principle of separation of incompatible positions, scientifically divided the responsibilities and authorities of various departments within the company, and formed a mutual check and balance mechanism. The general manager of the company shall comprehensively preside over the daily production, operation and management. The senior managers employed have certain educational background and management experience, and the authorities of each department are clear to ensure the effective implementation of control measures.
(6) Distribution of authority and responsibility
The company adopts the method of assigning control responsibilities to individuals, establishes a set of authorization mechanism for performing specific functions (including transaction authorization), and ensures that everyone clearly understands the reporting relationship and responsibilities. In order to effectively control the authorized use and supervise the company’s activities, the company has gradually established a budget control system, which can modify the control policies of the accounting system in a timely manner according to the changes of the situation. The financial department reasonably ensures that business activities are carried out in accordance with appropriate authorization through various measures; Reasonably ensure that transactions and events can be recorded in appropriate accounts in a timely manner with the correct amount in the appropriate accounting period, so that the preparation of financial statements meets the relevant requirements of the accounting standards for business enterprises.
(7) Human resources policy and Practice
The company has established and implemented more scientific personnel management systems such as employment, training, job rotation, assessment, reward and punishment, promotion and elimination, and hired enough personnel to complete the assigned tasks.
2. Risk assessment
The company has formulated the long-term overall goal of “becoming an auto parts supplier with fine management, leading cost and advanced technology”, supplemented by specific strategies and business process plans to clearly convey the company’s business objectives to every employee. The company has established an effective risk assessment process to identify and respond to major and generally influential changes that the company may encounter, including business risks, environmental risks, financial risks and so on.
3. Control activities
The company has necessary control policies and procedures for its main business activities. The management has clear objectives in budget, profit and other financial and operating performance. The company has clear records and communication on these objectives, and actively monitors them. In accordance with the company law, the accounting law, the accounting standards for business enterprises and other laws and regulations and their supplementary provisions, the Finance Department of the company has formulated the financial management system, including budget management and other provisions, and defined the processing procedures of accounting vouchers, accounting books and financial reports to ensure that:
(1) Business activities shall be carried out in accordance with appropriate authorization;
(2) Transactions and events can be recorded in appropriate accounts in a timely manner with the correct amount in the appropriate accounting period, so that the preparation of financial statements meets the relevant requirements of the accounting standards for business enterprises;
(3) The records of assets and the contact and handling of records have been properly authorized;
(4) Regularly check the book assets with the actual assets;
(5) Implement the post responsibility system of accountants and employ appropriate accountants to enable them to complete the assigned tasks. These tasks include:
① Record all effective economic transactions;
② Timely and fully record the details of economic business;
④ Economic transactions are recorded and reflected in the correct accounting period
⑤ The financial statements and related explanations can properly reflect the company’s financial position, operating results and cash flow. The relevant control procedures established by the company mainly include: transaction authorization control, responsibility division control, voucher and record control, asset contact and record use control, independent inspection control, electronic information system control, etc.
(1) Transaction authorization control: it defines the scope, authority, procedures, responsibilities and other relevant contents of authorization and approval. The management at all levels within the company must exercise corresponding functions and powers within the scope of authorization, and the handling personnel must also handle economic business within the scope of authorization. In terms of transaction authorization, the company distinguishes the different nature of transactions and adopts two levels of authorization, namely general authorization and special authorization. For general transactions such as purchase and sale business and expense reimbursement, the approval system of functional departments and leaders in charge shall be adopted; For unconventional transactions, such as acquisition, merger, investment, additional issuance of shares and other major transactions, they need to be approved by the board of directors or the general meeting of shareholders.
(2) Control of responsibility division: reasonably set the division of labor, scientifically divide the responsibilities and authorities, implement the principle of separation of incompatible positions and each person’s work can automatically check the work of another person or more people, and form a mutual check and balance mechanism. Incompatible positions mainly include: authorization approval and business handling, business handling and accounting records, accounting records and property custody, business handling and business audit, authorization approval and supervision and inspection, etc.
(3) Voucher and record control: the voucher circulation procedure has been reasonably formulated, so that the operators can prepare relevant vouchers in time when executing transactions, and the prepared vouchers shall be sent to the accounting department as soon as possible for recording, and the registered vouchers shall be filed in order. All transactions must be recorded（
