Sunshine Global Circuits Co.Ltd(300739)
Self evaluation report on internal control in 2021
Sunshine Global Circuits Co.Ltd(300739) 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 standard system), combined with the internal control system and evaluation methods of Sunshine Global Circuits Co.Ltd(300739) (hereinafter referred to as the “company”, Sunshine Global Circuits Co.Ltd(300739) ), on the basis of daily and special supervision of internal control, We evaluated the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of the 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 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 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 between the benchmark date of the self-evaluation report and the date of issuance of the evaluation report. 3、 Internal control evaluation
(I) evaluation scope of internal control
According to the risk oriented principle, the company determines the scope included in the evaluation, covering the main businesses and matters of the parent company and its subsidiaries and high-risk areas.
The main operations and matters included in the scope of evaluation include:
1. Internal environment
(1) Governance structure
In accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the relevant regulations of the CSRC and the provisions of the articles of association, 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. The company sets up the general meeting of shareholders, the board of directors, the board of supervisors and the management under the leadership of the board of directors.
The general meeting of shareholders is the decision-making body of the company and exercises the voting rights on major matters such as the company’s business policy, financing, investment and profit distribution according to law. The general meeting of shareholders shall be held at least once a year according to law, and an extraordinary general meeting of shareholders may be held in accordance with the provisions of laws and regulations.
The board of directors is responsible to the general meeting of shareholders and exercises the company’s business decision-making power according to law. The board of directors is responsible for the establishment, improvement and effective implementation of the company’s internal control system, formulating the company’s business plan, investment plan, financial budget and final settlement plan, and formulating the basic management system. The board of Directors consists of an audit committee, a strategy committee, a nomination committee and a remuneration and assessment committee. Each committee has corresponding rules of procedure, performs its duties within the specified scope of responsibilities, provides effective suggestions and assistance for the decision-making of the board of directors, and is responsible for the establishment, improvement and effective implementation of the company’s internal control system.
The board of supervisors shall be responsible to the general meeting of shareholders and supervise the directors, managers and other senior managers of the enterprise to perform their duties in accordance with the law. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors.
The management is responsible for implementing the resolutions of the general meeting of shareholders and the board of directors, presiding over the production and operation management of the company, formulating specific work plans, obtaining business and financial information in time, assessing the implementation of the plan, and appropriately revising the plan according to the actual implementation results. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control.
(2) Organizational structure
The company has established an organizational structure that meets the company’s business model and business management needs in accordance with the provisions of national laws and regulations and the requirements of regulatory authorities. According to its own production and operation characteristics and the needs of business development, the company has established central platform functional departments, manufacturing plant departments and base safety, environmental protection and administrative support departments that match the company’s management framework system. The central platform functional departments include strategic planning and operation, finance, marketing, procurement management, product R & D, plan and order fulfillment, quality and customer service, production engineering Human resources, intelligent manufacturing and it, securities, internal audit and other departments; Manufacturing plant departments include technology department, quality assurance department, production department and equipment and facility guarantee department. According to the company’s management system and work flow, each department has a clear division of responsibilities and authorities, mutual cooperation and mutual restriction, smooth information communication channels, and formed an effective mutual check and balance mechanism to ensure the orderly progress of the company’s business activities.
(3) Human resources
During the operation, the company has established a more scientific personnel management system in combination with the actual situation of the company, and has made clear provisions on the employment, training, education and management, assessment, promotion, reward and punishment and dismissal of employees; Specify the post responsibilities, clarify the knowledge and skills required by each post, and let the company’s employees fully understand their responsibilities; And continuously improve the ability and level of employees through training and assessment. The company pays enough attention to human resources, a key factor affecting the company’s internal control, and attaches importance to their professional ethics and professional competence when selecting and hiring employees; The company formulates and implements targeted training plans to ensure that each employee can effectively perform their duties. The company has also established a performance evaluation system to evaluate the ability, attitude and performance of employees, so as to promote the organic unity of responsibilities and rights of employees at all levels and the effective implementation of the company’s internal control. The current human resources system of the company can basically ensure the stability of human resources and the demand of all departments of the company for human resources.
(4) Internal audit
The company has set up an internal audit department, which independently exercises audit functions and powers under the guidance of the audit committee of the board of directors.
The internal audit department is responsible for the company’s internal audit supervision, including supervising and inspecting the implementation of the company’s internal control system, evaluating the scientificity and effectiveness of internal control, and putting forward suggestions for improving internal control; Regularly and irregularly conduct audit and routine inspection on finance, internal control, major projects and other businesses to control and prevent risks. The internal audit department shall report the internal control defects found in the supervision and inspection in accordance with the internal audit procedures; Have the right to report directly to the board of directors, its audit committee and the board of supervisors on the major defects of internal control found in the supervision and inspection.
(5) Corporate culture
The company pays attention to strengthening the construction of corporate culture, formulates the employee handbook, earnestly implements the post responsibility system, cultivates positive values and sense of social responsibility, always adheres to the values of “customer orientation, efficient coordination, professional focus, CO creation and sharing”, actively practices the vision of “becoming a leader in green intelligent manufacturing of high-precision electronic circuits”, adheres to the mission of “innovation driven, value interconnection” and establishes a modern management concept, Strengthen risk awareness. The company regularly carries out the selection of excellent employees, establishes the role of a benchmark, and guides all employees to learn from excellent employees; Carry out lean production activities regularly and let all employees participate in production management innovation. Tiktok continues corporate events through continuous publishing of its internal publications, Mingyang Tian Di, and the release of official account tweets and short video platforms. It creates a good learning atmosphere and promotes corporate culture. Through organizing various cultural activities such as collective tourism, sports competition and annual performance, enrich employees’ spare time life and enhance employees’ sense of teamwork.
The senior managers of the company can play a leading role in the construction of corporate culture; Employees of the enterprise can abide by the code of conduct of employees and earnestly perform their post responsibilities; The company’s senior managers and employees can abide by the law and act in accordance with the law.
(6) Social responsibility
In strict accordance with relevant laws, regulations and policies, combined with the actual situation and the characteristics of industrial enterprises, the company pays attention to safety production, product quality and environmental protection, takes the initiative to assume social responsibility, and has formulated systems such as environmental hazard investigation and treatment system, waste management regulations and a series of online control documents. The company has also formulated the code of social responsibility and ethics to practice the responsibility of “corporate citizen” in its business activities. The company has established an employee mutual aid foundation to overcome difficulties and get rid of difficulties for employees and their immediate family members.
2. Risk assessment
The company is in the manufacturing industry of electronic components, mainly producing all kinds of circuit boards, and has obtained the qualification of national high-tech enterprise. The internal and external risks faced by the company mainly include business risk, industry risk, market risk, policy risk and other risks. The management authorities of the company comprehensively, systematically and continuously collect relevant information in accordance with the organizational environment analysis and risk management procedure and in combination with different development stages and business expansion, timely conduct risk assessment in combination with the actual situation, dynamically identify risks, analyze relevant internal and external risks, and formulate corresponding risk response strategies. The company has established an effective risk assessment process to identify and respond to major and widespread changes that the company may encounter, including business risks, environmental risks, financial risks and so on, by setting up various functional departments and reasonably allocating their responsibilities.
3. Control activities
Combined with the risk assessment results, the company uses corresponding control measures to control the risk within the tolerable degree through the combination of manual control and automatic control, preventive control and discovery control.
(1) The company’s main control measures are as follows:
A. Incompatible job separation control
When formulating various internal control management systems and job descriptions of various departments, the company combs and analyzes the incompatible jobs involved in various business processes, implements corresponding separation measures, and forms a working mechanism of performing their respective duties, responsibilities and mutual restriction in the division of labor and processes of various businesses.
B. Authorization approval control
In terms of transaction authorization, the company distinguishes the different nature of transactions and adopts different authorization and approval methods. The company has clear approval authority and process for all business activities to be approved. The general approval business of the company is approved and controlled on the information platform, and the approval system of functional departments and leaders in charge is adopted; For unconventional transactions, such as major transactions such as acquisition, investment and issuance of shares, decisions shall be made by the general meeting of shareholders and the board of directors in accordance with the articles of association, rules of procedure of the general meeting of shareholders, rules of procedure of the board of directors and other relevant systems.
C. Accounting system control
In strict accordance with the accounting standards for business enterprises, the accounting law, the tax law and relevant laws and regulations, and in combination with the actual situation of the company, the company has formulated the financial management system suitable for the company. In combination with the relatively perfect SAP system, ERP system and Kingdee cloud system, the company has clarified the accounting workflow, realized the information processing of accounting work, and ensured the accuracy of data statistics and analysis, It provides necessary data support for the decision-making level of the company to make decisions.
D. Property protection control
The company has formulated a series of systems related to the daily management and regular inventory of property for fixed assets management, inventory management and monetary fund management, standardized the relevant processes related to financial management, defined the relevant responsibilities of assets, fund management departments, accounting treatment personnel and user departments, and the processes of asset acquisition, collection, daily management, inventory and asset scrap disposal, as well as the warehousing, storage and disposal of inventory Business processes such as delivery and transfer, as well as the collection, transfer and payment of funds, and ensure property safety by taking measures such as property records, physical storage, regular inventory and account verification.
E. Budget control
The company establishes and implements the budget management system, defines the responsibilities and authorities of each responsible unit in the budget management, standardizes the budget preparation, approval, release and implementation procedures, and specifically and systematically reflects the company’s future sales, costs and cash flow in the form of plan through the budget, so as to effectively organize and coordinate all business activities of the enterprise and complete the company’s business objectives. F. Operation analysis control
The company establishes and implements the operation analysis and control system, integrates the information of production, purchase and sales, finance and other aspects, and regularly carries out operation analysis through factor analysis, comparative analysis, trend analysis and other methods to find out the existing problems, find out the causes and improve them in time.
The company’s management personnel analyze all aspects of the company’s production and operation through the monthly operation meeting, including the completion of production and operation plan, the stability of product quality, production safety, the implementation of procurement plan, the completion of sales plan, etc., and analyze various indicators of monthly financial statements, such as inventory turnover rate, accounts receivable turnover rate, gross profit rate The change of unit water and electricity consumption and unit manufacturing cost to understand the overall financial situation of the company and its potential risk factors.
G. Performance appraisal control
The company has established and implemented the performance appraisal system, formulated the operation instruction for performance management and appraisal, set the appraisal index system according to the plan and budget objectives, conduct monthly, quarterly and annual appraisal on the performance of each responsible unit and employee within the enterprise, and take the appraisal results as the basis for determining employee salary, job promotion and evaluation, so as to promote the company to continuously improve work efficiency, cost awareness Professional skills, leadership, work initiative and sense of responsibility.
H. Information system control
In order to strengthen the company’s information management, the company has formulated a series of information management systems to standardize the transmission of information, so as to ensure the security of information in all use links, have a clear description of the rights and responsibilities of the information management department and the user department, and clarify the authority of adding, modifying, querying and deleting information data. The normal operation of the company’s information system and the safety and integrity of the data information in the system are ensured by clearly distinguishing the internal and external networks of the company and other technical means.
(2) The company’s main internal control systems and their implementation are as follows:
A. Major investment and financing management
The company implements a level by level examination and approval system for foreign investment management, which is strictly followed by the general meeting of shareholders, the board of directors and the management《
