Founder Technology Group Co.Ltd(600601)
Internal control evaluation report in 2021
Founder Technology Group Co.Ltd(600601) 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 normative system), combined with the company's (hereinafter referred to as the company's) internal control system and evaluation methods, and 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 internal control evaluation report). I 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. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
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. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
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.
4. Factors affecting the evaluation conclusion of internal control effectiveness from the benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
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. 5. Whether the internal control audit opinion is consistent with the company's evaluation conclusion on the effectiveness of internal control over financial reporting
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company's internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include: Zhuhai founder Gaomi Electronics Co., Ltd., Chongqing founder Gaomi Electronics Co., Ltd., Zhuhai founder multilayer circuit board Co., Ltd., Zhuhai founder printed circuit board development Co., Ltd., founder Broadband Network Service Co., Ltd., founder International Software Co., Ltd., founder International software (Beijing) Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
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
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company's consolidated financial statements
3. The main operations and matters included in the scope of evaluation include:
Corporate governance and organizational structure, development strategy, fund management, financial reporting, related party transactions, information disclosure, procurement and sales, production management, contract management, human resources, etc. 4. High risk areas of focus mainly include:
Information disclosure risk, related party transaction risk, accounts receivable risk, procurement and payment risk, customer credit risk and litigation risk. 5. 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. Is there any major omission
□ yes √ No 6 Is there a statutory exemption
□ yes √ No 7 Other explanatory matters
（2） Basis of internal control evaluation and identification standard of internal control defects
The company organizes and carries out internal control evaluation in accordance with the enterprise internal control standard system and the requirements of laws and regulations such as the guidelines for internal control of listed companies of Shanghai Stock Exchange. 1. Whether the specific identification standard of internal control defects is adjusted with that of previous years
□ yes √ no
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. 2. Identification standard of internal control defects in financial reporting
The quantitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Misstatement of total assets ≥ 0.5% of total assets ≤ 0.25% of total assets ＜ 0.25% of total assets ＜ 0.5% of total assets
Sales revenue misstatement ≥ 0.5% of sales revenue, 0.25% of sales revenue ≤ misstatement ＜ 0.25% of sales revenue ＜ 0.5% of sales revenue
Pre tax profit misstatement ≥ 5% of pre tax profit, 2.5% of pre tax profit ≤ misstatement misstatement 2.5% of pre tax profit, 5% of pre tax profit
Description: None
The qualitative criteria for the evaluation of internal control defects in financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defect 1. The defect involves fraud by senior managers;
2. The defect indicates that there is no internal oversight body or the internal oversight body does not perform its basic functions;
3. There are major misstatements identified in the current financial report according to quantitative standards, and the control activities fail to identify the misstatements, or it is necessary to correct the published financial report.
Significant defects 1. There are significant misstatements identified according to quantitative standards in the current financial report, and the control activities fail to identify the misstatement, or it is necessary to correct the published financial report;
2. Although it does not reach or exceed the level recognized by the quantitative standard, from the nature, it should still attract the attention of the board of directors and management.
General defects other internal control defects of financial reporting except those specified in the above two cases.
Note: none 3 Identification standard of internal control defects in non-financial reporting
The quantitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Index name major defect quantitative standard important defect quantitative standard general defect quantitative standard
Direct loss of total assets ≥ 0.25% of total assets ≤ direct loss ＜ 0.5% of total assets loss ＜ 0.5% of total assets
Direct loss of sales revenue ≥ 0.25% of sales revenue ≤ direct loss 0.25% of sales revenue
0.5% loss ＜ 0.5% 0.25% of sales revenue
Direct loss of profit before tax ≥ 5% of profit before tax, 2.5% of profit before tax ≤ direct loss ＜ loss of profit before tax ＜ 5% of profit before tax
Description: None
The qualitative criteria for the evaluation of internal control defects in non-financial reporting determined by the company are as follows:
Qualitative standard of defect nature
Major defects 1. Lack of decision-making on major issues, investment decision-making on major projects or unscientific decision-making procedures, resulting in major losses identified by quantitative standards;
2. In serious violation of national laws and regulations, the major defects of internal control evaluation have not been rectified, resulting in heavy losses identified by quantitative standards to the company.
Important defects 1. The company has important property losses identified by quantitative standards due to management errors, and the control activities fail to prevent such errors; 2. Although the property loss has not reached or exceeded the recognition level of quantitative standards, it still deserves the attention of the board of directors and management in terms of nature.
General defects other non-financial reporting internal control defects found in addition to the defects specified in the above two cases.
Note: none (III) Identification and rectification of internal control defects 1 Identification and rectification of internal control defects in financial reporting 1.1 Major defects
Whether the company has major defects in internal control over financial reporting during the reporting period □ yes √ no 1.2 Important defects
Whether the company has significant defects in internal control over financial reporting during the reporting period □ yes √ no 1.3 General defect
Not applicable 1.4 After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting that have not been rectified
□ yes √ no 1.5 After the above rectification, on the benchmark date of the internal control evaluation report, does the company have any important defects in the internal control of financial reporting that have not been rectified
□ yes √ No 2 Identification and rectification of internal control defects in non-financial reporting 2.1 Major defects
Whether the company found any major defects in internal control over non-financial reporting during the reporting period
□ yes √ no 2.2 Important defects
Whether the company found any significant defects in internal control over non-financial reporting during the reporting period □ yes √ no 2.3 General defect
During the internal control and self-evaluation test, the company found that there were some general defects in the daily operation of the internal control process related to non-financial reports. As the company's internal control adopted the dual supervision mechanism of self-evaluation and rectification and internal audit and audit rectification, once the internal control defects were found and confirmed, the company adopted reasonable periodic rectification, audit rectification and other correction procedures to achieve controllable risk, It has no material impact on the operation of the company's internal control system. 2.4. After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any major defects in non-financial reporting internal control that have not been rectified
□ yes √ no 2.5 After the above rectification, on the benchmark date of the internal control evaluation report, does the company find any important defects in the internal control of non-financial reporting that have not been rectified
□ yes √ no IV Description of other major matters related to internal control 1 Rectification of internal control defects in the previous year
□ applicable √ not applicable 2 Operation of internal control in this year and improvement direction in the next year
□ applicable √ not applicable 3 Description of other major events
√ applicable □ not applicable
The company was subject to administrative punishment by the China Securities Regulatory Commission in May 2017 for failing to disclose related party transactions and other matters in accordance with the regulations from 2004 to June 2015. Some investors filed a lawsuit against the company on the ground that the company's false statements led to its investment losses.. As of March 31, 2022, the Shanghai financial court has accepted 1505 lawsuits filed by investors (excluding the cases of withdrawal and rejection due to repeated prosecution), with a total claim amount of about 248 million yuan, 1472 cases with effective judgments and mediation (and court documents received), involving a total claim amount of about 208 million yuan and a total compensation amount of about 116 million yuan.
Chairman (authorized by the board of directors): Liu Jian Founder Technology Group Co.Ltd(600601) April 30, 2022
