Led Track Light,30W Track Light,Led Cob Track Lighting,Led Track Lamp JIANGMEN MICHEN LIGHTING CO.,LTD , https://www.jmmission.com
**Abstract**
According to the "Company Law," "Securities Law," and the "Basic Standards for Internal Control of Enterprises" along with their supporting guidelines, the company has established a comprehensive internal control system that aligns with regulatory requirements. This system is integrated with the company’s own internal controls and evaluation methods. The evaluation was conducted as of December 31, 2013, to assess the effectiveness of the company's internal control mechanisms.
**Important Statement**
Under the framework of the enterprise internal control system, it is the responsibility of the board of directors to establish and improve internal controls, evaluate their effectiveness, and ensure the accurate disclosure of the internal control report. The board of supervisors oversees the implementation of these controls by the board of directors, while the management team is responsible for overseeing daily operations and ensuring the proper functioning of internal controls. All members of the board, supervisors, and senior management guarantee that the report contains no false information, misleading statements, or material omissions, and are accountable for its accuracy and completeness.
The primary objective of the company’s internal control system is to ensure the legality and compliance of business operations, safeguard assets, ensure the accuracy and completeness of financial reporting, enhance operational efficiency, and support the achievement of long-term strategic goals. However, due to inherent limitations in any internal control system, it can only provide reasonable assurance toward these objectives. Additionally, changes in circumstances may affect the appropriateness of existing controls, making it risky to predict future performance based solely on past evaluations.
**Conclusion of Internal Control Evaluation**
Based on the identification of major defects in the company’s financial reporting internal controls, no significant deficiencies were found as of the evaluation date. The board of directors believes that the company maintained effective financial reporting internal controls across all key areas in accordance with the internal control standards and regulations.
Similarly, no major defects were identified in the non-financial reporting internal controls during the evaluation period. Furthermore, there were no factors affecting the evaluation conclusion from the base date to the evaluation date.
**Internal Control Evaluation Process**
(1) Scope of Internal Control Evaluation
The company determined the scope of the evaluation based on risk assessment principles, focusing on key units, business processes, and high-risk areas. The headquarters was included in the evaluation, and the consolidated financial data for 2013 is provided below:
[Image: Consolidated Financial Data for 2013]
The evaluation covered key business processes such as organizational structure, human resources, corporate culture, fund management, procurement and payment, fixed asset management, fundraising, major investment decisions, related-party transactions, and information disclosure. High-risk areas focused on fund management, major investments, related-party transactions, and information disclosure.
**Organizational Structure**
The company has well-established internal control systems, including the “Rules of Shareholders’ Meetings†and “Board of Directors Rules.†These ensure sound governance structures, with clear roles and responsibilities among shareholders, board of directors, board of supervisors, and management. Departments and branches operate efficiently, with well-defined systems and procedures in place.
**Human Resources**
A dedicated HR department manages labor policies, recruitment, training, performance appraisal, and incentives. It ensures a structured approach to talent development and employee motivation.
**Corporate Culture**
The company emphasizes a people-centric and technology-driven culture, promoting a harmonious work environment through various activities that enhance team cohesion and overall performance.
**Fund Management**
Strict authorization procedures are in place for cash handling, with segregation of duties to prevent fraud and errors.
**Procurement and Payment**
The procurement process is controlled through defined roles and responsibilities, ensuring transparency and accountability in sourcing and payments.
**Fixed Asset Management**
A comprehensive system is in place for the registration, maintenance, and disposal of fixed assets, ensuring their security and efficient use.
**Fundraising Management**
The company adheres to strict guidelines for the use of raised funds, ensuring they are not misused for speculative or unauthorized purposes.
**Major Investment and Trading Decisions**
Clear decision-making authority is assigned, with major investments requiring approval from the shareholders' meeting when necessary.
**Related-Party Transactions**
The company follows strict rules for related-party transactions, ensuring fairness and transparency in disclosures.
**Information Disclosure**
All disclosures comply with regulatory requirements, ensuring timely, accurate, and complete information sharing with stakeholders.
**Evaluation Basis and Defect Identification Criteria**
The company used the “Basic Standards for Internal Control of Enterprises,†its application guidelines, and internal manuals to conduct the evaluation. Internal control defects were categorized into major, important, and general levels, with specific criteria applied to both financial and non-financial reporting.
**Identification and Rectification of Defects**
No major or important defects were found in either financial or non-financial reporting internal controls during the evaluation period.
**Description of Major Events**
The company had no other significant events affecting its internal control system.
Chairman (authorized by the Board of Directors): Guo Liuxi
Zhengzhou Huajing Diamond Co., Ltd.
March 24, 2014