China Securities Co.Ltd(601066) about Leyard Optoelectronic Co.Ltd(300296)
Verification opinions on self-evaluation report of internal control in 2021
China Securities Co.Ltd(601066) (hereinafter referred to as ” China Securities Co.Ltd(601066) securities” or “sponsor”) as a sponsor of Leyard Optoelectronic Co.Ltd(300296) (hereinafter referred to as ” Leyard Optoelectronic Co.Ltd(300296) ” or “company”) GEM public issuance of convertible corporate bonds, in accordance with the measures for the administration of securities Issuance and listing sponsor business Relevant provisions such as Shenzhen Stock Exchange GEM Listing Rules and Shenzhen Stock Exchange self regulatory guidelines for listed companies No. 2 – standardized operation of GEM listed companies have verified 3 Hubei W-Olf Photoelectric Technology Co.Ltd(002962) 021 annual internal control self-evaluation report. The specific conditions are as follows: I. internal control evaluation
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the main units, businesses, matters and high-risk fields included in the evaluation scope. The units included in the evaluation scope include the company and its important wholly-owned subsidiaries and holding subsidiaries. The main businesses and matters included in the evaluation scope include organizational structure, human resource management, risk management, subsidiary management, related party transaction management, comprehensive budget management, financial management, raised funds management, foreign investment management, foreign guarantee management, product quality management, information communication management, information disclosure management, investor relations management, etc. the high-risk areas of focus include product quality management Raised funds management, foreign investment management, receivables risk management, inventory risk management and revenue recognition management, etc.
The above subsidiaries, branches, businesses, matters and high-risk areas included in the evaluation scope cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) basis of internal control evaluation and identification standard of internal control defects
The company organizes the internal control evaluation according to the requirements of the enterprise internal control standard system and in combination with the relevant internal control systems of the company.
According to the requirements of the enterprise’s internal control standard system, combined with the company’s scale and business characteristics, risk preference and risk tolerance, the company has formulated the identification standard of the company’s internal control defects. The specific standards are as follows: 1. Qualitative standard of financial report
1.1 major defects
(1) Make misstatement correction for major errors in the announced financial statements (except for retroactive adjustment of previous years due to changes in policies or other objective factors)
(2) The material misstatement of the current financial statements found by the certified public accountant and not recognized by the company’s internal control over the financial statements;
(3) The fraud of the company’s directors, supervisors and senior managers, which affects the authenticity of the company’s financial statements, and causes significant losses and adverse effects to the company;
(4) The supervision of the audit committee and the internal audit department on the internal control of the company’s external financial reports is invalid.
1.2 important defects
(1) Failure to control the selection and application of accounting policies in accordance with generally accepted accounting standards;
(2) Failure to effectively control unconventional or complex transactions;
(3) Failure to establish anti fraud procedures and control measures;
(4) The financial reporting process at the end of the period is not controlled.
1.3 general defects
In addition to the above major defects and important defects, the defects that affect the authenticity of the financial statements.
2. Quantitative standard of financial report
Reference index major defect important defect general defect
Ratio of misstatement amount to total net assets or operating income 5% ≥ 2.5% ≥ 2.5%
Note: net assets and total operating income are the audited consolidated statements of the company.
3. Qualitative criteria for non-financial reporting
3.1 major defects
(1) Serious violation of national laws and regulations;
(2) The company’s decision-making procedures are not perfect or violate the company’s decision-making procedures, resulting in major decision-making mistakes and significant negative impact on the company;
(3) The company fails to implement the management of safety production, resulting in safety liability accidents with heavy casualties; (4) Abnormal major changes in senior management or key technical personnel of the company;
(5) Lack of control or systematic failure of the company’s important business;
(6) Major defects in the company’s internal control evaluation have not been rectified;
(7) Other circumstances that have a significant negative impact on the company as determined by the board of directors of the company.
3.2 important defects
(1) Unscientific democratic decision-making procedures of the company or violation of decision-making procedures lead to important decision-making mistakes, which has a great negative impact on the company;
(2) The company’s safety production system is imperfect and the safety production management is not in place, resulting in safety liability accidents with heavy casualties;
(3) Defects in the company’s important business control system or control activities have caused great losses to the company; (4) The important defects of the company’s internal control evaluation have not been rectified;
(5) Other circumstances identified by the board of directors that have a significant negative impact on the company.
3.3 general defects
Defects other than the above major defects and important defects.
4. Quantitative standards for non-financial reporting
Reference index major defect important defect general defect
Of one or more control defects
The direct economic loss ratio caused by the combination is more than 3%, the ratio is more than 1.5%, and the ratio is more than 1.5%
Ratio of loss amount to net assets
Note: net assets are the audited consolidated statements of the company.
(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.
In the previous year, the company had no major defects and important defects in internal control over financial reporting.
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.
In the previous year, the company did not find any major defects or important defects in the internal control of non-financial reporting.
(IV) internal control evaluation procedure
According to the provisions of Leyard Optoelectronic Co.Ltd(300296) internal control evaluation system, the company’s internal control evaluation procedures generally include: formulating evaluation work plan, forming evaluation working group, implementing on-site test, compiling evaluation report and other links.
Before the internal control evaluation, the internal audit department shall formulate the evaluation work plan and clarify the evaluation scope, work tasks, personnel arrangement and other relevant contents. The internal audit department forms an internal evaluation working group according to the work plan. The internal control evaluation working group shall conduct on-site test on the evaluated unit. The internal control evaluation working group summarizes the evaluation results of each evaluated unit, preliminarily determines the defect level, and prepares the internal control evaluation report.
2、 Establishment and implementation of internal control of the company
(I) internal control environment
1. Corporate governance structure
In strict accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and other laws and regulations and the provisions of the articles of association, the company has established the general meeting of shareholders, the board of directors, the board of supervisors and the operation and management organization under the leadership of the board of directors, In accordance with the requirements of the guiding opinions on the establishment of independent directors in listed companies, independent directors were elected.
The general meeting of shareholders is the highest authority of the company, which is responsible for formulating the development strategy and business policy of the company, and exercising the decision-making power on major matters such as financing, investment and profit distribution of the company. Through the rules of procedure, ensure that all shareholders, especially small and medium-sized shareholders, enjoy equal status and ensure that all shareholders can fully exercise their rights.
The board of directors is the daily decision-making body of the company, which is responsible for the general meeting of shareholders. It is also the executive body of the resolutions of the general meeting of shareholders and exercises the power of operation and decision-making of the company. Establish and improve the company’s internal control system, carry out specific implementation and effect evaluation, and effectively supervise the internal control through the subordinate special committee.
Under the board of directors, a strategy committee, an audit committee, a nomination committee and a remuneration and assessment committee are established to review and make decisions on major matters in the company’s business activities or submit them to the general meeting of shareholders for deliberation. The above-mentioned institutions have formulated rules of procedure and working system respectively, and perform their duties in strict accordance with the provisions of the articles of association. The board of supervisors is the company’s supervisory body, which supervises the company’s internal control, supervises the work of the board of directors, management and the company’s finance, and puts forward suggestions for improvement and improvement to promote the further improvement of the company’s internal control.
2. Development strategy
The strategy committee under the board of directors of the company is responsible for the development strategy of the company. The company formulates annual business objectives and work priorities according to the strategic development plan, and combines them with the annual budget to make the annual plan and budget conform to the company’s strategic development plan.
3. Corporate culture
Leyard Optoelectronic Co.Ltd(300296) means “benefit is inferior to morality”. Therefore, the core of the company’s corporate culture is “sharing”. The company follows the principles of “equality”, “respect”, “trust”, “cooperation” and “win-win” to share with employees, customers, society and investors.
4. Human resources
The company has formulated human resources policies conducive to the sustainable development of the enterprise, and made clear provisions on the recruitment, training, salary, assessment, promotion, dismissal and resignation of employees, which have been operated effectively. The company implements a full-time labor contract system, defines labor relations, participates in social endowment insurance, medical insurance, unemployment insurance and housing provident fund for employees, and ensures that employees enjoy social security benefits according to law.
The company has a perfect reward and punishment mechanism. Employees and key employees who have made contributions will be rewarded through equity incentive, merit evaluation, cash reward and salary increase. In case of procrastination, mistakes and omissions in work, the company has formulated corresponding punishment policies according to the nature of the problem. Through the perfect reward and punishment system, the company can realize the survival of the fittest in human resources, keep the company’s employees at the normal flow level and ensure the efficient operation of the company.
The company pays attention to the re education of management and employees. The company has established Leyard Optoelectronic Co.Ltd(300296) college, which organizes the company’s senior executives and key personnel of various departments to train employees as lecturers. Leyard Optoelectronic Co.Ltd(300296) college conducts teaching through the combination of face-to-face classes and online teaching. The training content involves knowledge of management, finance, law, products and other aspects, providing a better platform for employees’ self-improvement.
The company’s existing human resources policy can ensure the stability of human resources and the demand for human resources of all departments of the company.
5. Social responsibility
While ensuring normal operation and sustainable development, combined with the actual situation of the company, the company has formulated a relatively perfect management system and standard system in terms of safety production, quality control, environmental protection and employee occupational health management. In November 2021, the company was listed as a green design demonstration enterprise of industrial products.
The company established Leyard Optoelectronic Co.Ltd(300296) Siyuan Star Education Fund. The company and its shareholders, management and employees donate money and materials to schools and student organizations in remote mountainous areas every year to show their love for the society. Since the establishment of the fund in 2014, Leyard Optoelectronic Co.Ltd(300296) group and Fanxing Education Fund have donated nearly 40 million yuan, more than 350 schools, 46 smart classrooms, more than 4000 students and more than 1000 teachers; It has carried out construction assistance activities in more than 20 regions in China.
(II) risk assessment
In order to promote the sustainable, healthy and stable development of the company, the company has established an effective risk assessment system, and the board of directors of the company evaluates and makes decisions on major risk matters of the company; The management of the company shall control the daily operation risks and implement the decisions of the board of directors on major risk matters; The audit committee and its subordinate internal audit department are responsible for supervising the implementation of the company’s risk control.
The senior management of the company will hold regular meetings to comprehensively evaluate the internal and external risks of the company and put forward measures to reduce, resolve or avoid risks.
The management of the company shall hold a management meeting every week. The managers of each department shall report the production and operation, sales, R & D and daily management of the company in the previous week, report the internal risks of the company that have occurred or may occur, and put forward management suggestions. The management meeting shall make decisions, and report to the board of directors in case of major matters. The management of the company holds a regular group meeting with the management of each holding company every month. Each holding company reports its business data, reports the risk points that the company focuses on and puts forward solutions.
(III) control activities
In order to ensure the effective implementation of internal control in operation and management and ensure the realization of control objectives, the company has established effective control procedures in related party transactions, external guarantees, use of raised funds, major investments, information disclosure, etc.
1. Authorization approval control
The company has formulated and improved the authorization and approval system, and adopted different decision-making procedures and corresponding authorization for different business matters. The management at all levels within the company must exercise corresponding functions and powers within the scope of authorization. The company adopts the level by level approval system for all its daily businesses, and timely adjusts the approval authority at all levels according to the development stage and actual situation of the company, so as to ensure the efficient operation of the company on the premise of effective control; Non recurring businesses, such as foreign investment, guarantee and other major matters, shall be approved by the chairman, the board of directors and the general meeting of shareholders according to different transaction amounts.
In order to improve the approval efficiency, the company launched the OA office system, and the approval processes of various businesses within the company and its branches and subsidiaries are realized in the OA system. In 2021, in order to further strengthen the group management, the company sorted out the internal control process, integrated the approval process of holding companies of the same type of business, and gradually implemented it in the OA system, so as to unify the internal control management and approval process of similar holding companies, and divided the approval authority of the management of the holding company and the management of the group in each business process according to the size of the company.
2. Accounting system control
In strict accordance with the company law of the people’s Republic of China, the accounting law of the people’s Republic of China, the accounting standards for business enterprises, the enterprise accounting system and other laws and regulations and their supplementary provisions, the company has formulated a financial accounting and management system suitable for the company, and clearly formulated the processing procedures of accounting vouchers, accounting books and accounting reports, so as to ensure the authenticity and accuracy of accounting vouchers, accounting and records and their data Reliability and safety. The company has set up reasonable financial accounting posts and allocated corresponding financial personnel to ensure the safe, efficient and orderly conduct of financial accounting.
The company dispatched the chief financial officer to each member company to realize the group management of the financial system
