Tongyu Communication Inc(002792)
Self evaluation report on internal control in 2021
Tongyu Communication Inc(002792) all shareholders:
Referring to 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 (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 effectiveness of the company's internal control on December 31, 2021 (the benchmark date of the 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 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 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 is no impact between the benchmark date of the internal control evaluation report and the date of issuance of the internal control evaluation report
3、 Internal control evaluation
(I) evaluation scope of internal control
The company determines the main units, businesses and matters included in the evaluation scope according to the risk oriented principle. The main units included in the evaluation scope include the company and its holding subsidiaries. The total assets of the units included in the evaluation 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 total operating revenue in the company's consolidated financial statements; The main businesses and matters included in the evaluation scope include: Sales and collection management, production and procurement management, human resources and salary management, long-term asset management, fund management, foreign investment management, management of subsidiaries, corporate governance, etc; The high-risk areas of focus mainly include related party transactions, financial reports, control over holding subsidiaries, external guarantee, external investment, sales and accounts receivable management risks.
The high-risk areas of focus mainly include:
1. Internal control of related party transactions
The company has formulated the related party transaction system, which clearly stipulates the related parties and related party transactions, the approval authority and decision-making procedures of related party transactions, and standardizes the transaction behavior with related parties. In the actual operation process, the company has determined the list of the company's related persons and updated them in time; After the transaction, the company and its holding subsidiaries carefully judge whether it constitutes a connected transaction. At the same time, they have signed transaction contracts for all connected transactions in accordance with the principles of good faith, fairness, fairness and openness. The transaction pricing is fair and reasonable with reference to the market price of similar sales, so as to protect the interests of the company and minority shareholders; For daily connected transactions that often occur, the amount shall be estimated and submitted to the board of directors or the general meeting of shareholders for deliberation and disclosure before the disclosure of the previous annual report; When the board of directors or the general meeting of shareholders is convened to consider related party transactions, the related directors or related shareholders avoid voting.
2. Internal control over financial reporting
The company has established an independent accounting system, including accounting system, fund management, procurement management, sales management, asset management, expense management, cost management, transaction accounting management, financial statement submission management regulations, etc., and defined internal control links such as approval and authorization. The company strictly implements the financial system, strengthens internal financial management, and strictly controls key financial management and control, such as fund management, asset management, revenue recognition, cost accounting, purchase and sales business, etc. For the annual financial report, hire an accounting firm with relevant qualifications to audit and issue an audit report.
Through the shareholders' meeting and the appointment of directors, supervisors and senior managers, the company implements the control and management of the holding subsidiaries, integrates the work of finance, major investment, personnel and information disclosure into the unified management system, and formulates a unified management system. The functional departments of the head office provide professional guidance, supervision and support for the relevant business and management of the subsidiaries. The company has made provisions on the information report of subsidiaries, requiring subsidiaries to report to the parent company and submit the information that has a significant impact on the company and the information required to be disclosed by the CSRC. The company regularly obtains the monthly, quarterly, semi annual and annual financial reports of each holding subsidiary. Focus on the legality, compliance and effectiveness of major economic activities of holding subsidiaries involving major contracts, major capital expenditures, major asset disposal, guarantee, financing and major losses, so as to improve the overall operation efficiency and risk resistance ability of the company.
4. Internal control of external guarantee
In the articles of association and the rules of procedure of the general meeting of shareholders, the company has defined the approval authority of the general meeting of shareholders and the board of directors on external guarantees, the principles of external guarantees and the approval management procedures. During the reporting period, the company did not have any external guarantee, nor did it have any other external guarantee previously occurred and continued to the reporting period, and there was no violation of relevant laws, regulations and normative documents.
5. Internal control of foreign investment
The board of directors of the company has set up a strategy committee to study and evaluate the feasibility, investment risk, investment return and other matters of the company's long-term development strategy and major investment decision-making projects. In the articles of association, the rules of procedure of the general meeting of shareholders and the working system of the strategy committee, the company has made clear provisions on the approval authority and deliberation procedures of major investments, research and evaluation of investment matters, etc. During the reporting period, the company's foreign investment has fulfilled the approval procedures, and the major investment meets the requirements of the company's interests.
6. Internal control of sales and receivables
The company has established and improved the sales system in line with its own production, operation and development needs, adopted corresponding marketing strategies according to the changes of market environment and enterprise development requirements, and constantly standardized and improved the company's sales business. The company continues to improve and perfect the internal sales management process, strengthen the information sharing and communication between departments from the conclusion of sales contract to collection and delivery, improve the accuracy of market forecast, and continuously improve the enterprise's marketing level and marketing management.
In addition, the company has formulated the measures for the management of accounts receivable, timely established and improved customer files, strengthened the collection of payment for goods, and effectively reduced the risk of sales collection.
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.
（2） Basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation according to the enterprise internal control standard system.
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 for major defects, important defects and general defects of the enterprise internal control standard system, combined with the factors such as the company's size, industry characteristics, risk preference and risk tolerance, and studied and determined the specific identification standards of internal control defects applicable to the company, which are consistent with the previous years.
The identification standards of internal control defects determined by the company are as follows:
1. Identification criteria for defects in internal control over financial reporting.
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows: the quantitative criteria take the operating income and total assets as the measurement indicators.
If the loss that may be caused or caused by the defect of internal control is related to the income statement, it shall be measured by the operating revenue index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 2% of the operating revenue, it is recognized as a general defect; If it exceeds 2% but less than 5% of the operating revenue, it is an important defect; If it exceeds 5% of the operating revenue, it is recognized as a major defect.
Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 1% of the total assets, it is recognized as a general defect; If it exceeds 1% but less than 2.5% of the total assets, it is recognized as an important defect; If it exceeds 2.5% of the total assets, it is recognized as a major defect.
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Under the following circumstances (including but not limited to), it shall generally be recognized as a major defect in the internal control of financial reporting:
(1) Discover major fraud of directors, supervisors and senior managers;
(2) It is found that there is a material misstatement in the current financial statements, but the internal control fails to find the misstatement in the operation process;
(3) The supervision of the company's audit committee and internal audit institutions on internal control is invalid;
(4) Invalid control environment;
(5) The risk assessment function is invalid;
(6) Once the major defects found and reported to the management are not corrected within a reasonable time;
(7) Regulatory penalties for accounting errors.
The following situations (including but not limited to) are identified as "major defects" and strong signs of "major defects":
(1) Failure to select and apply accounting policies in accordance with accounting standards;
(2) Fraud of personnel in key positions;
(3) Failure of compliance supervision function and violation of laws and regulations may have a significant impact on the reliability of financial reporting;
(4) It has been reported to the management, but after a reasonable period of time, the management still fails to correct the important defects. General defects refer to other control defects other than the above major defects and important defects.
2. Identification criteria for defects in internal control over non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows: the quantitative criteria take the operating income and total assets as the measurement indicators.
The losses that may be caused or caused by internal control defects are related to the profit statement, which shall be measured by the operating revenue index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 2% of the operating revenue, it is recognized as a general defect; If it exceeds 2% but less than 5% of the operating revenue, it is recognized as an important defect; If it exceeds 5% of the operating revenue, it is recognized as a major defect.
Losses that may be caused or caused by internal control defects related to asset management shall be measured by the total asset index. If the amount of financial report misstatement that may be caused by the defect alone or in combination with other defects is less than 1% of the total assets, it is recognized as a general defect; If it exceeds 1% but less than 2.5% of the total assets, it is recognized as an important defect; If it exceeds 2.5% of the total assets, it is recognized as a major defect.
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
The identification of non-financial report defects is mainly based on the impact of defects on the effectiveness of business processes and the possibility of occurrence. If the possibility of defects is small, it will reduce the work efficiency or effect, or increase the uncertainty of the effect, or make it deviate from the expected goal, which is a general defect; If the possibility of defects is high, it will significantly reduce the work efficiency or effect, or significantly increase the uncertainty of the effect, or make it significantly deviate from the expected goal as an important defect; If the possibility of defects is high, it will seriously reduce the work efficiency or effect, or seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal, which is a major defect.
(III) identification and rectification of internal control defects
1. Identification and rectification of internal control defects in financial reports: according to the above identification standards of internal control defects in financial reports, the company did not have major and important defects in internal control of financial reports during the reporting period.
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.
4、 Description of other major matters related to internal control
The company has no explanation of other major matters related to internal control.
In 2022, the company will continue to improve the internal control system, standardize the implementation of the internal control system, strengthen the supervision and inspection of internal control, continuously improve the risk management level of the company and promote the healthy and sustainable development of the company.
Tongyu Communication Inc(002792) board of directors April 28, 2002
