Goldcard Smart Group Co.Ltd(300349)
Self evaluation report on internal control in 2021
Goldcard Smart Group Co.Ltd(300349) all shareholders:
In accordance with the relevant national laws and regulations, the Ministry of finance, together with the CSRC, the National Audit Office, the CBRC and the CIRC, has formulated the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, on the basis of daily and special supervision of internal control, We evaluated the rationality, integrity and effectiveness of the establishment of internal control of the company as of December 31, 2021 (benchmark date of internal control evaluation report), and identified the defects existing in the design and operation of internal control.
1、 Important statement
Internal control is a process implemented by the board of directors, the board of supervisors, managers and all employees to achieve control objectives. It is the responsibility of the board of directors of the company to set up, implement and maintain effective internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report under the supervision of the corporate governance and in accordance with the provisions of the enterprise’s internal control 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 liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s establishment and implementation of 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 or 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 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.
From the benchmark date of the internal control evaluation report to the date of issuance of the internal control evaluation report, there are no factors affecting the evaluation conclusion of the effectiveness of internal control.
3、 Organization of internal control evaluation
The internal control evaluation is led by the board of directors of the company and its audit committee, forming an evaluation team led by the audit department and participated by multiple departments to evaluate the main risk areas and units included in the evaluation scope.
Evaluation procedure: establish an evaluation team and formulate an evaluation plan; On site inspection; The evaluation team studies and identifies the defects of internal control; Discuss and review the rectification plan; Report to the board of directors for deliberation and approval in accordance with the specified authorities and procedures. Evaluation method: an evaluation team is formed to comprehensively collect the evidence of the effective operation of the company’s internal control by using various methods such as individual interview, questionnaire, special discussion, walk through test, statistical sampling and comparative analysis, and study and identify the design defects and operation defects of internal control.
4、 Scope of internal control evaluation
The company determines the main units, businesses and matters as well as high-risk areas included in the evaluation scope according to the risk oriented principle.
The main units included in the evaluation scope include the company and all its holding subsidiaries. The total assets of the units included in the consolidation 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 operating revenue in the company’s consolidated financial statements. The main businesses and matters included in the evaluation scope include: corporate governance structure, internal organizational structure, corporate culture, information disclosure, information and communication, internal audit, human resources, financial report, asset capital activities, asset management, procurement and payment business, production process and cost control, sales and collection business, engineering management, research and development, foreign investment, related party transactions, foreign guarantee Control of subsidiaries and risks and controls related to important risk businesses and major risk events.
The high-risk areas of focus mainly include: corporate governance structure, information disclosure, information and communication, human resources, asset and capital activities, procurement and payment business, production process and cost control, sales and collection business, control of subsidiaries, and risk and control related to important risk business and major risk events. 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.
(I) corporate governance structure
In accordance with the company law, the securities law, the articles of association and other laws and relevant provisions, the company has established a standardized corporate governance structure and rules of procedure, defined the responsibilities and authorities in decision-making, implementation and supervision, and formed a scientific and effective division of responsibilities and check and balance mechanism.
1. As the highest authority of the company, the general meeting of shareholders has formulated the rules of procedure of the general meeting of shareholders, which clearly stipulates the nature and functions of the general meeting of shareholders and the working procedures such as convening, proposal and notice, convening, voting and resolution of the general meeting of shareholders. The formulation and effective implementation of the rules ensure that the general meeting of shareholders exercises the decision-making power on major matters according to law, which is conducive to protecting the legitimate rights and interests of shareholders.
2. The board of directors is the company’s permanent decision-making body, which is responsible to the general meeting of shareholders, deliberates and makes decisions on major decision-making issues in the company’s business activities, or submits them to the general meeting of shareholders for deliberation. The directors are elected by the general meeting of shareholders and the chairman is elected by the board of directors. The board of Directors consists of 9 directors, including 1 independent director. It has an audit committee, a remuneration and assessment committee, a strategy committee and an office of the board of directors. All special committees are held by directors and independent directors of the company. The company has formulated the rules of procedure of the board of directors and the system of independent directors, which stipulate the selection and appointment procedures of directors, the obligations of directors, the composition and responsibilities of the board of directors, the rules of procedure of the board of directors, the working procedures of independent directors, the composition and responsibilities of various special committees, etc. The formulation and effective implementation of these systems can help the board of directors make scientific decisions.
3. The board of supervisors is the company’s supervisory body, which is responsible for supervising the behavior of the company’s directors and managers and the company’s financial center. The board of supervisors of the company is composed of three supervisors, one of whom is the employee representative. The company has formulated the rules of procedure of the board of supervisors, which clearly stipulates the responsibilities of supervisors, the functions and powers of the board of supervisors, the convening and notification of the board of supervisors, resolutions, etc. The formulation and effective implementation of the rules will help give full play to the supervisory role of the board of supervisors and protect the interests of shareholders, the company and the legitimate interests of employees from infringement.
4. The general manager is fully responsible for the daily operation and management activities of the company and organizes the implementation of the resolutions of the board of directors. The company has formulated the general manager’s working rules, which stipulates the responsibilities of the general manager, the general manager’s office meeting and production scheduling meeting, the general manager’s reporting system, supervision system and other contents.
The formulation and effective implementation of these systems ensure the effective implementation of various decisions of the board of directors, and improve the operation and management level and risk prevention ability of the company. (II) internal organizational structure
The company implements the management mechanism of business division system, and its internal institutions include: President’s office, strategic planning department, securities and investment department, legal affairs and audit department, financial center, human resources center, administrative center, process and it department; Gas business department, water business department, flowmeter business department, energy business department, China Marketing Center, overseas marketing department, Technology Research Institute, procurement center, Hangzhou intelligent manufacturing center and Wenzhou intelligent manufacturing center. By reasonably dividing the responsibilities of each department and post, and implementing the principle of separation of incompatible positions, a mechanism of clear division of labor, mutual cooperation and mutual checks and balances is formed between each department, which ensures the orderly and healthy operation of the company’s production and operation activities and the realization of control objectives.
(III) corporate culture
Goldcard Smart Group Co.Ltd(300349) adhering to the core concept of “customer-centered and striver oriented”, promote the digital transformation of the industry, continue to create value for customers, practice the mission of “better life”, and make unremitting efforts to build a digital China and achieve the goal of “double carbon”.
The company attaches great importance to strengthening cultural construction, cultivating positive values and sense of social responsibility, advocating honesty and trustworthiness, love and dedication, pioneering and innovative spirit and teamwork spirit, establishing modern management concept and strengthening risk awareness. Directors, supervisors, managers and other senior managers shall play a leading role in the construction of corporate culture. Employees of the enterprise shall abide by the code of conduct for employees and earnestly perform their post responsibilities.
(IV) information disclosure
The company has formulated the information disclosure management system, the management system for directors, supervisors and senior managers to hold and buy and sell the company’s shares, the insider information insider registration system and other systems to clarify the scope and content of major information and the transmission, review and disclosure process of undisclosed major information, and fulfill the obligation of external disclosure in accordance with the regulations, without violation of regulations.
(V) information and communication
The company invested in the planning and operation of the internal website, and made use of modern information platforms such as SAP, OA, MES, e-HR and enterprise wechat to make the information transmission between departments, employees and management more rapid, effective, fast and smooth. At the same time, the company has implemented the physical isolation between the intranet system and the external website in the information construction to ensure the information security.
The company has established an anti fraud mechanism and formulated the anti fraud management system to clarify the key areas and key links of anti fraud work and the responsibilities and authorities of relevant institutions in anti fraud work, and standardize the reporting, investigation, handling, reporting and remedial procedures of fraud cases. The group portal of “gold card anti fraud publicity and implementation” has been established, the reporting and complaint system and whistleblower protection system have been established, and the reporting special line has been set up to clarify the reporting and complaint handling procedures, processing time limit and completion requirements, so as to ensure that reporting and complaint have become an important way for enterprises to effectively grasp information. The reporting and complaint system and whistleblower protection system have been timely communicated to all employees.
(VI) establishment of internal audit institutions
The audit committee under the board of directors of the company is responsible for the communication, supervision and verification of internal and external audit of the company. The audit committee consists of three directors and two independent directors, one of whom is an accounting professional and serves as the convener of the Committee. The audit committee has an audit department, which has the professional ability to carry out audit work independently. The company has established an internal control and supervision system, defined the responsibilities and authorities of the audit department and other internal institutions in internal supervision, and standardized the procedures, methods and requirements of internal supervision, as well as the scope and frequency of daily supervision and special supervision. For internal control defects found in the process of supervision, timely analyze the nature and causes of defects, put forward rectification plans, and timely report to the board of directors, the board of supervisors or the management in an appropriate form.
(VII) human resources policy
The company has formulated human resources policies conducive to the sustainable development of the enterprise, including: employment, training, dismissal and resignation of employees; Salary, assessment, promotion, reward and punishment of employees; Compulsory leave system and regular job rotation system for employees in key positions; Restrictive regulations on the departure of employees who master state secrets or important business secrets, etc.
At the same time, the company attaches great importance to the quality of employees and takes professional ethics and professional competence as important standards for selecting and employing employees. As of December 31, 2021, the company has 2170 employees, including 3 with Professor level titles, 27 with senior titles and 95 with intermediate titles; Among them, there are 85 people with master’s degree or above and 761 undergraduates. According to the needs of actual work, the company also carries out various forms of follow-up training and education for different positions, trains talents in a scientific way, makes employees competent for their jobs, and continuously improves the support of human resources for enterprise strategy.
(VIII) financial report
The company has established a relatively perfect financial accounting system in accordance with the accounting law, accounting standards for business enterprises, tax law and other relevant laws and regulations, as well as other accounting rules and accounting normative documents. The company has set up an independent accounting organization, set up more reasonable posts in financial management and accounting, formulated corresponding job instructions, and equipped with sufficient full-time personnel to ensure the smooth progress of financial work. The division of duties and responsibilities of the accounting institutions can be clarified, and the responsibilities and records of the accounting personnel can be separated from each other.
(IX) assets and capital activities
1. Comprehensive budget management
The company has established budget management system and other relevant systems to clarify the responsibilities and authorities of each responsible unit in budget management, standardize the procedures for budget preparation, approval, issuance and implementation, and strengthen budget constraints.
2. Monetary Fund Management
The company has established monetary fund management measures and other relevant systems, separated incompatible posts, and established strict authorization and approval procedures for the revenue and expenditure and custody of monetary funds. At the same time, it has also established effective control measures for the consistency of accounts, accounts, certificates and accounts.
The company has defined the scope of use of cash and the regulations that should be observed when handling cash receipts and payments in accordance with relevant national regulations; The settlement procedures for bank deposits have been formulated in accordance with the people’s Bank of China and relevant regulations. The company strictly forbids subordinate enterprises to make risky investments such as futures trading, lend excess funds to other units without authorization, raise funds from employees, and set up private bank accounts.
3. Risk assessment and control of accounts and financial statement presentation related to capital asset activities
The company has established perfect management norms to ensure the amount, accuracy, recognition time point and measurement amount of capital and asset related accounts under monetary capital, fixed assets, construction in progress, inventory, intangible assets, long-term equity investment and other statement items or categories, so as to reduce the risk of various financial statements.
(x) asset management
The company has established the fixed assets management measures and other relevant systems to implement the method of “unified management, unified dispatching, hierarchical use and hierarchical accounting” for fixed assets. Relevant control processes such as acquisition of intangible assets, amortization of intangible assets and provision for impairment of intangible assets have been established. The respective responsibilities and mutual restriction measures for relevant posts have been defined to ensure the separation of incompatible responsibilities for physical asset management and accounting treatment, and strict management systems and audit procedures have been established for each control link.
（11） Purchase and payment business
The company has established relevant systems such as group procurement management system, supplier development and import process, bidding process management operation specification and procurement and payment management measures. At this stage, the group procurement model has been preliminarily established, and the responsibilities of the demand department, centralized management department, procurement execution department and acceptance department are separated; A strict management system for prepayments and accounts payable has been established.
（12） Production process and completion
