Sinolink Securities Co.Ltd(600109)
About Chaojie fastening system (Shanghai) Co., Ltd
Verification opinions on self-evaluation report of internal control in 2021
In accordance with the measures for the administration of securities issuance and listing recommendation business, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of companies listed on GEM and other relevant provisions, Sinolink Securities Co.Ltd(600109) (hereinafter referred to as " Sinolink Securities Co.Ltd(600109) " or "sponsor") as the sponsor of the initial public offering of shares and listing on the gem of Chaojie fastening systems (Shanghai) Co., Ltd. (hereinafter referred to as " Essence Fastening Systems (Shanghai) Co.Ltd(301005) " or "company"), checked the internal control of the company in 2021. The details are as follows:
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 has 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、 Overall situation of 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 main units included in the evaluation scope include: Chaojie fastening system (Shanghai) Co., Ltd., a wholly-owned subsidiary Wuxi Chaojie automobile Connection Technology Co., Ltd., a wholly-owned subsidiary Chaojie connection system (Jiangsu) Co., Ltd., a wholly-owned subsidiary Shanghai Yikou precision parts manufacturing Co., Ltd. and a wholly-owned subsidiary Wuxi Yikou precision parts Manufacturing Co., Ltd.
In accordance with the basic norms of enterprise internal control and relevant supporting guidelines, the company's internal control evaluation includes control environment, risk assessment, control activities, information and communication and internal supervision. The main businesses and matters included in the evaluation scope include: governance structure, internal audit, human resource management, social responsibility, financial report, fund management, procurement management, sales management and asset management. The high-risk areas of focus mainly include credit risk of accounts receivable, price fluctuation risk of main raw materials, etc.
The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company's operation and management, and there are no major omissions.
1. Internal control environment
(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 the employee manual, and implemented these in multiple channels and all directions through the severe 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. At present, the company has 587 employees, including 8 with intermediate titles and 4 with primary titles; Among them, there are 2 postgraduates, 55 undergraduates and 95 junior college students. 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 procedures of governance
The responsibilities of the management 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
The management of the company is responsible for the operation of the enterprise and the formulation, implementation and supervision of business strategies and procedures. The board of directors and the audit committee effectively supervise it. The management attached great importance to internal control, including information technology control, information management personnel and accounting personnel, and timely and properly handled the reports on internal control weaknesses and violations received. The company adheres to the business philosophy of "people-oriented, paying attention to customers", and the business style of "sincere cooperation, win-win sharing, customer first and excellence", which is honest, trustworthy and legal.
(5) Organizational structure
In order to effectively plan, coordinate and control business activities, the company has reasonably determined the form and nature of organizational units, implemented the principle of separation of incompatible positions, scientifically divided the responsibilities and authorities within each organizational unit, and formed a mutual check and balance mechanism. At the same time, we will earnestly achieve "five independence" from the controlling shareholder of the company. The company has designated special personnel to be specifically responsible for internal audit and ensure the implementation of relevant accounting control systems.
(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 accounting standards.
(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 "integrating market, sales, production and scientific research resources and striving to become one of China's excellent enterprises", supplemented by specific strategies and business process plans to clearly convey the business objectives of the enterprise to every employee. The company has established an effective risk assessment mechanism, led by the general manager, and each department is responsible for the risk assessment of its own department, so as to identify and respond to major and generally influential changes that the company may encounter, including business risk, environmental risk, financial risk and so on.
3. Information system and communication
The company has established a powerful information system to provide timely and effective performance reports to the management. The information system personnel (including financial personnel) are scrupulous and diligent, and can effectively perform their assigned responsibilities. The management of the company also provides appropriate human and financial resources to ensure the normal and effective operation of the whole information system.
The company has established effective communication channels and mechanisms for suspicious inappropriate matters and behaviors, so that the management can effectively communicate with employees' responsibilities and control responsibilities. The adequacy of internal communication enables employees to effectively perform their duties, communicate effectively with customers, suppliers, regulators and other outsiders, and enable the management to take timely and appropriate further actions in the face of various changes.
4. Control activities
The company has necessary control policies and procedures for its main business activities. The management has clear objectives for budget, profit, other financial and operating performance. The company has clear records and communication on these objectives, and actively monitors them. The financial department has established appropriate protection measures to reasonably ensure that the contact and handling of assets and records are properly authorized; Reasonably ensure that the book assets are consistent with the actual assets on a regular basis.
In order to reasonably ensure the realization of various objectives, the company has established relevant control procedures, mainly including 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 unit 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.
(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. Relevant records must be made for various transactions (such as employee salary records, perpetual inventory records, sales invoices, etc.), and the records must be independently compared with the corresponding entries.
(4) Control of asset contact and use of records: strictly restrict the direct contact of unauthorized personnel with property, and take measures such as regular inventory, property records, account verification and property insurance to ensure the safety and integrity of all kinds of property.
(5) Independent inspection and control: the company has set up a special internal audit organization to audit and assess the authenticity, accuracy and completeness of procedures of monetary funds, securities, vouchers and account books, material procurement, consumption quota, payment, salary management, entrusted processing materials and account reality.
(6) The company has formulated a relatively strict electronic information system control system, and has done more work in the development and maintenance of electronic information system, data input and output, document storage and custody, etc.
5. Supervision of control
The company regularly evaluates various internal controls, and on the one hand, establishes various mechanisms to enable relevant personnel to obtain evidence of the effective operation of internal control to a considerable extent when performing their normal post responsibilities; On the other hand, confirm the internal information or point out the existing problems through external communication. The management of the company attaches great importance to the reports and suggestions of various functional departments and regulatory bodies of internal control, and takes various measures to correct the deviations in the control operation in time.
(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 provisions of the enterprise internal control standard system and its supporting guidelines.
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 of the enterprise internal control standard system for major defects, important defects and general defects, combined with the factors such as the company's size, industry characteristics, risk preference and risk tolerance, studied and determined the specific identification standards of internal control defects applicable to the company, and judged whether they belong to major defects Important defects and general defects. Specific standards are as follows:
Category method defect grade general defect important defect major defect
project
Potential misstatement impact of operating revenue 2% of operating revenue ≤ misstatement impact ≥ 2% of financial reporting quantitative standard of operating revenue 5% of operating revenue
Potential misstatement impact of total assets 2% of total assets ≤ misstatement impact ≥ assets
2% of the total amount reported, and the impact of misstatement 5% of the total assets
5% of total
General defect, important or major defect
1) Fraud by directors, supervisors and senior managers;
Except for major defects and important 2) the external audit found that there was a major misstatement in the current financial report, and the internal control failed to find the misstatement in other processes except for the defects of qualitative standards;
Control defects 3) the audit committee and internal audit institution of the company have ineffective supervision on internal control;
4) ) correct the published financial report;
5) Other possible effects
