Chapter 1 General Provisions
Article 1 In order to standardize the internal control of SGG Co., Ltd. (hereinafter referred to as the "Company") and promote the company's standardized operation and healthy development, this system is formulated in accordance with relevant regulations such as the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China, the Shenzhen Stock Exchange GEM Stock Listing Rules (hereinafter referred to as the "Listing Rules") and the Articles of Association of SGG (hereinafter referred to as the "Articles of Association").
Article 2 Internal control as referred to in this system refers to the process by which the company's board of directors, audit committee, senior managers and other relevant personnel provide reasonable guarantees to achieve the following goals:
(1) Comply with national laws, regulations, rules and other relevant provisions;
(2) Improve the effectiveness and efficiency of the company’s operations;
(3) Ensure the safety of the company’s assets.
Article 3 Relevant principles followed by the company’s internal control system:
(1) Principle of comprehensiveness: Internal control should run through the entire process of decision-making, implementation and supervision, covering various businesses and matters of the company and its subsidiaries.
(2) Principle of materiality: Internal control should focus on important business matters and high-risk areas on the basis of comprehensive control.
(3) Principle of checks and balances: Internal control should form mutual constraints and supervision in terms of governance structure, institutional setup, distribution of powers and responsibilities, business processes, etc., while taking into account operational efficiency.
(4) Principle of adaptability: Internal control should be adapted to the company's operating scale, business scope, competition status, risk level, etc., and should be adjusted in a timely manner as the situation changes.
(5) Cost-benefit principle: Internal control should weigh implementation costs and expected benefits to achieve effective control at an appropriate cost.
Article 4 The board of directors is responsible for the establishment, improvement and effective implementation of internal control. The Audit Committee supervises the establishment and implementation of internal controls by the Board of Directors. Managers are responsible for organizing and leading the daily operation of the enterprise's internal controls.
Chapter 2 Basic Requirements
Article 5 The company’s internal control should fully consider the following elements:
(1) Internal environment: various comprehensive factors that affect the formulation, operation and effectiveness of the internal control system, including the company's organizational structure, corporate culture, risk concepts, business style, personnel management policies, etc.;
(2) Goal setting: The company’s management sets the company’s strategic goals based on the company’s actual operating characteristics, and breaks them down and implements them at all levels within the company;
(3) Event identification: The company's management identifies internal and external events that affect the realization of the company's goals and distinguishes risks and opportunities;
(4) Risk assessment: The company's management analyzes various internal and external risks that affect the realization of its goals, and considers their possibility and degree of impact so that the company can formulate necessary countermeasures;
(5) Risk countermeasures: The company's management adopts risk response methods of avoiding, reducing, sharing or accepting according to the company's actual operating characteristics and risk tolerance, and formulates corresponding risk control measures;
(6) Control activities: The measures and procedures adopted by the company’s management to ensure the effective execution and implementation of risk countermeasures, mainly including approval, authorization, verification, coordination, review, regular inventory, record verification, property protection, separation of responsibilities, performance appraisal, etc.;
(7) Information communication: identify and collect relevant information from inside and outside the company, and effectively deliver it to relevant personnel in a timely manner;
(8) Inspection and supervision: Supervise and evaluate the effectiveness of the company's internal controls through continuous supervision activities, special supervision and evaluation, or a combination of both.
Article 6 The company shall improve its corporate governance structure and formulate systems such as the Rules of Procedure for the Shareholders' Meeting, the Rules of Procedure for the Board of Directors, the Working Rules for the Secretary of the Board of Directors, and the Working Rules for the President to ensure the legal operation and scientific decision-making of the shareholders' meeting, the Board of Directors, the Audit Committee and other institutions; establish an effective incentive and restraint mechanism, establish risk prevention awareness, cultivate a good corporate spirit and internal control culture, and create an environment in which all employees fully understand and perform their duties.
Article 7 The company should clearly define the goals, responsibilities and authorities of each department and position, establish corresponding authorization, inspection and level-by-level accountability systems to ensure that they perform their functions within the scope of authorization; establish a complete control structure and formulate control procedures between all levels to ensure that matters resolved by the board of directors and instructions issued by senior managers can be strictly implemented.
Article 8 The company's internal control activities should cover all operational aspects of the company, including but not limited to: sales and collections, purchase expenses and payments, fixed asset management, inventory management, budget management, fund management (including investment and financing management), major investment management, financial reporting, cost and expense control, information disclosure, human resources management and information system management, etc.
Article 9 The company should focus on strengthening the management control of its holding subsidiaries, strengthen the control of related transactions, external guarantees, use of raised funds, major investments, information disclosure and other important activities, and establish corresponding control systems and procedures.
Article 10 The company should establish a complete risk assessment system, continuously monitor operational risks, financial risks, market risks, legal risks, etc., promptly discover and evaluate various risks faced by the company, and take necessary control measures.
Chapter 3 focuses on control activities
Section 1 Internal Control of Controlled Subsidiaries
Article 11 A company shall exercise management control over its holding subsidiaries, which shall at least include the following control activities:
(1) Establish a control system for each holding subsidiary and clarify the selection methods, responsibilities and authority of directors, supervisors and important senior managers assigned to the holding subsidiary;
(2) Supervise each holding subsidiary to establish corresponding business plans and risk management procedures based on the company's business strategies and risk management policies;
(3) Require each holding subsidiary to establish a major event reporting system and clarify review procedures, promptly report major business matters, major financial matters and other information that may have a significant impact on the trading price of the company's stocks and derivatives to the person in charge of the company, and report major matters to the company's board of directors or shareholders' meeting for review in strict accordance with the authorization regulations;
(4) Require controlled subsidiaries to promptly submit their board of directors' resolutions, shareholders' meeting resolutions and other important documents to the company's board secretary, and report matters that may have a greater impact on the trading prices of the company's stocks and their derivatives;
(5) Regularly obtain and analyze quarterly or monthly reports of each holding subsidiary, including operating reports, production and sales reports, balance sheets, income statements, cash flow statements, reports on providing funds to others and providing external guarantees, etc.;
(6) Establish a performance appraisal and incentive and restraint system for each holding subsidiary;
(7) Evaluate the implementation of the internal control system of the holding subsidiaries and its inspection and supervision work.
Article 12 If a company's holding subsidiaries also control other companies, that is, if the company has multiple levels of subordinate companies, its holding subsidiaries should be urged to refer to the requirements of this system and establish a management and control system for its subordinate subsidiaries layer by layer.
Section 2 Internal Control of Related Party Transactions
Article 13 The company shall establish and improve the internal control system for related-party transactions, follow the principles of good faith, equality, voluntariness, fairness, openness and impartiality, and shall not harm the interests of the company and shareholders, conceal related relationships or de-related transactions.
Article 14 The company shall, in accordance with the provisions of relevant laws, administrative regulations, departmental rules, normative documents, the Listing Rules, Standardized Operation Guidelines and other relevant provisions of the Shenzhen Stock Exchange, clarify in the Articles of Association the approval authority of the company's shareholders' meeting and the board of directors on related party transactions, and stipulate the review procedures and avoidance of voting requirements for related party transactions.
Article 15 The company shall refer to the Listing Rules and other relevant regulations of the Shenzhen Stock Exchange to determine the list of related persons of the company and update it in a timely manner to ensure that the list of related persons is true, accurate and complete.
When transactions occur between the company and its holding subsidiaries, the relevant responsible persons should carefully check the list of related parties and prudently determine whether it constitutes a related transaction. If it constitutes a related party transaction, the approval and reporting obligations shall be fulfilled within their respective authority.
Article 16 Related transactions that should be disclosed shall be submitted to a special meeting of independent directors for review, and with the approval of more than half of all independent directors, they shall be submitted to the board of directors for review.
Article 17 When the company convenes a board meeting to review related party transactions, the convener of the meeting should remind the related directors to abstain from voting before voting at the meeting. If the related director fails to take the initiative to declare and recuse himself, the director who is aware of the situation should request the related director to recuse himself. When the company's shareholders' meeting considers related party transactions, the company's board of directors should remind the related shareholders to abstain from voting before the shareholders vote.
Article 18 When reviewing related party transactions, the company shall:
(1) Understand the true status of the transaction object in detail, including the operational status and profitability of the transaction object, whether there are rights defects such as mortgages and freezes, and legal disputes such as litigation and arbitration;
(2) Understand in detail the integrity record, credit status, performance ability, etc. of the counterparty, and select the counterparty prudently;
(3) Determine the transaction price based on sufficient pricing basis;
(4) In compliance with the relevant requirements of the Listing Rules or when the company deems it necessary, hire an intermediary to audit or evaluate the transaction target.
Article 19 The company shall not review and make decisions on related party transactions under any of the following circumstances:
(1) The status of the transaction subject matter is unclear;
(2) The transaction price has not been determined;
(3) The situation of the counterparty is unclear;
(4) This transaction causes or may cause the company to be occupied by non-operating funds of the controlling shareholder, actual controller and its affiliated enterprises;
(5) This transaction causes or may cause the company to provide guarantees for related parties in violation of regulations;
(6) Other situations that result in or may result in the company's interests being misappropriated by related parties as a result of this transaction.
Article 20 If a company intends to give up part or all of its right to increase capital in proportion to a company that has jointly invested with a related party or its priority to transfer, it shall use the sum of the company's actual capital increase or transfer amount and the amount involved in giving up its right to increase capital in equal proportion or its priority to transfer as the transaction amount of the related transaction, and shall perform corresponding review procedures and information disclosure obligations.
Article 21 If the company's related-party transactions need to be submitted to the shareholders' meeting for review due to the principle of cumulative calculation for twelve consecutive months, it only needs to submit the current related-party transaction to the shareholders' meeting for review, and disclose all related-party transactions that have occurred in the previous period in this related-party transaction announcement.
Article 22 Transactions between the company and related parties should be signed in writing to clarify the rights, obligations and legal responsibilities of both parties.
Directors and senior managers of the company are obliged to pay attention to whether the company has misappropriation of funds and other problems that have infringed the company's interests by related parties. The methods of attention include but are not limited to inquiries and inquiries.
Article 23 If related parties cause losses or are likely to cause losses to a listed company due to the occupation or transfer of company funds, assets or other resources, the company's board of directors shall promptly take protective measures such as litigation and property preservation to avoid or reduce the losses, and hold the relevant personnel accountable.
Section 3 Internal Control of External Guarantees
Article 24 The internal control of a company's external guarantees shall follow the principles of legality, prudence, mutual benefit and safety, and strictly control risks.
Article 25 The company shall, in accordance with relevant laws, administrative regulations, departmental rules, normative documents, the Listing Rules, Standardized Operation Guidelines and other relevant provisions of the Shenzhen Stock Exchange, clarify in the Articles of Association the approval authority of the shareholders' meeting and the board of directors regarding external guarantee matters, as well as the accountability mechanism for violations of the approval authority and review procedures. The company shall not provide external guarantees without the approval of the board of directors or shareholders' meeting.
When determining the approval authority, the company should implement the relevant provisions of the Listing Rules on the cumulative calculation of external guarantees.
Article 26 The company's board of directors shall fully investigate the business and credit status of the guaranteed party before considering the external guarantee proposal, carefully review and analyze the guaranteed party's financial status, operating conditions, industry prospects and credit situation, and make decisions prudently and in accordance with the law. The company can hire an external professional agency to evaluate the guarantee risk when necessary, which can be used as a basis for the board of directors or shareholders' meeting to make decisions.
Article 27 When a company provides external guarantees, it shall require the other party to provide a counter-guarantee, and carefully judge the actual guarantee capacity of the counter-guarantee provider and the enforceability of the counter-guarantee.
Article 28 The sponsor or independent financial advisor (if applicable) shall express independent opinions on its legality and compliance, impact on the company and existing risks when the board of directors considers external guarantee matters (except for guarantees provided to subsidiaries within the scope of consolidation). If necessary, an accounting firm may be hired to verify the company's cumulative and current external guarantees. If any abnormality is discovered, it shall be promptly reported to the board of directors and regulatory authorities and announced.
Article 29 The company shall properly manage the guarantee contract and related original data, conduct timely cleaning and inspection, and regularly check with banks and other relevant institutions to ensure that the archived data is complete, accurate and effective, and pay attention to the timeliness and period of the guarantee.
If the company discovers an abnormal contract that has not been approved by the board of directors or the shareholders' meeting during the contract management process, it should report it to the board of directors and the audit committee in a timely manner and make an announcement.
Article 30 The company should assign a dedicated person to continuously pay attention to the situation of the guaranteed person, collect the latest financial information and audit report of the guaranteed person, regularly analyze its financial status and solvency, pay attention to its production and operation, assets and liabilities, external guarantees, divisions and mergers, changes in legal representatives, etc., establish relevant financial files, and report to the board of directors regularly.
If it is discovered that the business conditions of the guaranteed party have seriously deteriorated or major events such as company dissolution or division have occurred, the relevant responsible persons should report to the board of directors in a timely manner. The board of directors should take effective measures to minimize losses.
Article 31 After the externally guaranteed debt matures, the company shall urge the guaranteed party to perform its debt repayment obligations within a limited time. If the guaranteed party fails to perform its obligations on time, the company shall take necessary remedial measures in a timely manner.
Article 32 If the debt guaranteed by the company needs to be extended after maturity and the company needs to continue to provide guarantees, it shall be used as a new external guarantee and the guarantee approval procedures and information disclosure obligations shall be performed again.
Article 33 For external guarantees provided by a company's controlled subsidiaries, the company shall implement the above provisions of this section mutatis mutandis. The company's controlled subsidiaries should promptly notify the company to perform information disclosure obligations in accordance with regulations after its board of directors or shareholders' meeting makes a resolution.
Section 4 Internal Control on the Use of Raised Funds
Article 34 The company's internal control over the use of raised funds shall follow the principles of standardization, safety, efficiency, and transparency, abide by commitments, and focus on efficiency of use.
Article 35 The company should establish a management system for raised funds and clearly stipulate the storage, use, change, supervision and accountability of raised funds in special accounts.
Article 36 The company shall carry out special account storage and management of raised funds, sign a three-party supervision agreement with the account-opening bank and the sponsor institution for the special account of raised funds, and keep track of the fund dynamics of the special account for raised funds.
Article 37 The company should formulate strict approval procedures and management procedures for the use of raised funds to ensure that the raised funds are used in accordance with the purposes listed in the prospectus and are invested in investment projects with raised funds according to the project budget.
Article 38 The company should track the project progress and the use of raised funds to ensure that the investment project is implemented according to the company's commitment plan. Relevant departments should detail the specific work progress to ensure that all work can be carried out as planned, and regularly report the specific work progress to the board of directors and the company's finance department. If the project cannot proceed normally according to the investment plan due to unforeseen objective factors, the company shall promptly perform reporting and announcement obligations in accordance with relevant regulations.
Article 39 The company shall have its internal audit department track and supervise the use of raised funds and report to the board of directors every quarter. The audit committee should monitor the use of raised funds and conduct regular inspections on the use of raised funds. The audit committee may hire an accounting firm to conduct a special review of the use of raised funds in accordance with the Articles of Association.
Article 40 The company shall cooperate with the sponsor's supervision work, proactively inform the sponsor of the use of its raised funds, authorize the sponsor representative to go to the relevant bank to inquire about the withdrawal of raised funds and provide other necessary cooperation and information.
Article 41 If the company really needs to change the use of raised funds or change the project investment method due to market changes, it must be reviewed by the company's board of directors, the sponsor and sponsor representatives must be notified, and submitted to the shareholders' meeting for approval in accordance with the law.
Article 42 If the company decides to terminate the original investment project with raised funds, it should choose a new investment project as soon as possible. The company's board of directors should make a prudent analysis of the feasibility, necessity and investment benefits of newly raised funds investment projects.
Article 43 The company shall comprehensively check the progress of the investment projects with raised funds after the end of each accounting year and make corresponding disclosures in the annual report.
Section 5 Internal Control of Major Investments
Article 44 The internal control of a company's major investments should follow the principles of legality, prudence, safety and effectiveness, control investment risks and focus on investment returns.
Article 45 The company should clarify in the Articles of Association the authority of the shareholders' meeting and the board of directors to review and approve major investments, formulate corresponding review procedures and perform the review and approval of major investments in accordance with the corresponding procedures.
Article 46 The strategic investment department of the company is responsible for the research and evaluation of the feasibility, investment risks, investment returns and other matters of the company's major investment projects, and supervises the implementation progress of major investment projects. If any abnormalities in the investment projects are discovered, it should be reported to the company's board of directors in a timely manner.
Article 47 After careful consideration, a company may decide to use its own funds to invest in securities, entrust financial management, or invest in derivative products such as futures, options, warrants, etc. based on stocks, interest rates, exchange rates, and commodities. If the company still decides to carry out the aforementioned investment after careful consideration, it should establish strict decision-making procedures, reporting systems and monitoring measures, and determine the investment scale and term based on the company's risk tolerance.
The company's securities investment, entrusted financial management or derivative product investment matters shall be reviewed and approved by the company's board of directors or shareholders' meeting, and the power of approving entrusted financial management shall not be delegated to individual directors or operating management of the company.
Article 48 When a company engages in entrusted financial management, it shall select a qualified professional financial institution with good credit and financial status, no bad integrity records and strong profitability as the trustee, and sign a written contract with the trustee to clearly define the amount, period, investment types, rights, obligations and legal responsibilities of both parties, etc.
The company's board of directors should assign a dedicated person to track the progress of entrusted financial management and investment safety status, and require him or her to report in a timely manner when any abnormal situation occurs, so that the board of directors can immediately take effective measures to recover funds and avoid or reduce the company's losses.
Article 49 When a company makes securities investment, the company's board of directors and shareholders' meeting shall make prudent decisions on securities investment, rationally arrange and use funds, strive to develop the company's main business, and strictly control investment risks.
Article 50 If a company's total securities investment accounts for more than 10% of its latest audited net assets and exceeds 10 million yuan, it shall be reviewed and approved by the board of directors and disclosed in a timely manner before investment; if a company's total securities investment accounts for more than 50% of its most recent audited net assets and exceeds 50 million yuan, or if it should be submitted to the shareholders' meeting for review according to the provisions of the Articles of Association, the company, in addition to timely disclosure in accordance with the aforementioned provisions, before investing, shall also submit it to the shareholders' meeting for review.
After the securities investment plan is reviewed and approved by the board of directors or shareholders' meeting, the company shall promptly report the corresponding securities investment account and capital account information to the Shenzhen Stock Exchange, conduct daily accounting of its securities investment business in accordance with the relevant provisions of the Accounting Standards for Business Enterprises, present it correctly in the financial statements, and disclose the securities investment and corresponding profits and losses during the reporting period in regular reports.
Article 51 The company's board of directors should regularly understand the implementation progress and investment benefits of major investment projects. If there is failure to invest as planned, failure to realize project expected returns, investment losses, etc., the company's board of directors should identify the reasons, take effective measures in a timely manner, and hold the relevant personnel accountable.
Section 6 Internal Control of Information Disclosure
Article 52 The company shall formulate relevant information disclosure management systems in accordance with the Listing Rules, Standardized Operation Guidelines and relevant laws and regulations, standardize the scope and content of the company's major information, as well as the procedures and precautions for internal reporting, circulation, and external release of undisclosed major information, as well as the accountability mechanism for violations of information disclosure regulations and other matters. The information disclosure management system shall be reviewed and approved by the company's board of directors and announced.
The company should designate the board secretary to be specifically responsible for information disclosure. The company should ensure that the secretary of the board of directors can obtain relevant information in a timely and smooth manner. Directors, senior managers and other personnel other than the secretary of the board of directors shall not release any undisclosed material information of the company to the outside world without the written authorization of the board of directors and in compliance with relevant provisions such as the "Listing Rules" and "Guidelines for Standardized Operations".
Article 53 When situations or events that may have a greater impact on the trading price of the company's stocks and their derivatives occur, occur or are about to occur, the responsible person with reporting obligations shall report the relevant information to the company's board of directors and the board secretary in a timely manner; when the board secretary needs to know the status and progress of major matters, relevant departments (including the company's holding subsidiaries) and personnel shall actively cooperate and assist, respond promptly, accurately and completely, and provide relevant information as required.
Article 54 The company shall formulate and strictly implement an internal confidentiality system for major information, strengthen the confidentiality work during the internal circulation of undisclosed major information, pay necessary attention and guidance to the company, controlling shareholders, actual controllers, company directors, senior managers and other core personnel in using websites, blogs, Weibo, WeChat and other media to release information, clarify the confidentiality level of undisclosed major information, minimize the scope of insiders, and ensure that undisclosed major information is under control.
Article 55 The company shall require its controlled subsidiaries to formulate an information disclosure management system with reference to the company's regulations, and clarify the scope of information, reporting procedures, etc. that the controlled subsidiaries should report to the secretary of the board of directors and the securities department.
Article 56 The company's board of directors shall carefully investigate and verify whether the contents of the rumors are true, whether the conclusions are tenable, the impact of the rumors, the relevant responsible persons, and other matters.
The objects of investigation and verification by the company's board of directors should be institutions or individuals that have a significant relationship with the rumors, including but not limited to company shareholders, actual controllers, industry associations, competent authorities, company directors, senior managers, relevant company departments, joint stock companies, partners, media, research institutions, etc.
Article 57 When investigating and verifying rumors, the company's board of directors should try its best to use written correspondence or entrust a lawyer to verify, so as to obtain conclusive evidence and ensure the authenticity, accuracy and completeness of the clarification announcement.
Article 58 The secretary of the company's board of directors shall analyze and judge the reported internal major information. If it is necessary to perform information disclosure obligations in accordance with regulations, the secretary of the board of directors shall report to the board of directors in a timely manner and request the board of directors to perform corresponding procedures and disclose to the public.
Chapter 4 Inspection and Disclosure of Internal Control
Article 59 The company shall establish an audit department, which shall be responsible to the audit committee, regularly inspect the company's internal control deficiencies, evaluate the effectiveness and efficiency of its implementation, and make timely suggestions for improvement. The company's internal audit department should maintain independence and should not be placed under the leadership of the financial department, or work together with the financial department. The Audit Committee is responsible for supervising and evaluating the internal audit work.
Article 60 The company's internal audit department shall inspect and supervise the operation of the company's internal control, formulate an internal audit report on the internal control deficiencies and abnormal matters found during the inspection, improvement suggestions and resolution progress, and report them to the board of directors and the audit committee; the audit committee shall issue written evaluation opinions on the effectiveness of the company's internal control based on the internal audit report and relevant information submitted by the internal audit department and report to the board of directors.
The internal audit department shall report to the Audit Committee at least once a quarter, including the implementation of the internal audit plan and problems discovered during the internal audit work, and submit an internal control evaluation report to it at least once a year.
If the board of directors believes that there are major defects or major risks in the company's internal control, the board of directors shall report to the Shenzhen Stock Exchange in a timely manner and disclose it. The company shall disclose in the announcement any major deficiencies or major risks in internal control, the consequences that have or may result, and the measures that have been taken or planned to be taken.
Article 61 The audit committee shall supervise the internal audit department to inspect the following matters at least once every six months, issue an inspection report and submit it to the audit committee. If the inspection finds that the company has violations of laws and regulations, irregular operations, etc., it should be reported to the Shenzhen Stock Exchange in a timely manner and the company should be urged to disclose to the outside world:
(1) The implementation of major events such as the use of funds raised by the company, provision of guarantees, related transactions, securities investments and derivatives transactions, provision of financial assistance, purchase or sale of assets, external investments, etc.;
(2) The company's large capital transactions and capital transactions with directors, senior managers, controlling shareholders, actual controllers and their related parties.
The audit committee shall issue written evaluation opinions on the effectiveness of the company's internal control based on the internal audit report and relevant materials submitted by the internal audit institution, and report to the board of directors.
Article 62 The audit committee shall issue an annual internal control evaluation report on the establishment and implementation of the internal control system related to financial reporting and information disclosure based on the evaluation report and relevant materials issued by the internal audit department. The internal control evaluation report should at least include the following contents:
(1) Statement by the board of directors on the authenticity of the internal control report;
(2) The overall situation of internal control evaluation work;
(3) The basis, scope, procedures and methods of internal control evaluation;
(4) Defects in internal control and their identification;
(5) Rectification of internal control deficiencies in the previous year;
(6) Rectification measures taken to address internal control deficiencies during the year;
(7) Conclusion on the effectiveness of internal control.
Article 63 The company's board of directors shall formulate a resolution on the internal control evaluation report while reviewing the annual report. The internal control evaluation report shall be submitted to the board of directors for review after being approved by more than half of all members of the audit committee. The sponsor or independent financial advisor (if any) shall verify the internal control evaluation report and issue verification opinions. If the sponsor institution or accounting firm points out that there are major deficiencies in the company's internal control, the company's board of directors shall make a special explanation of the matters involved. The special explanation shall at least include the basic information of the matters involved, the degree of impact of the matter on the effectiveness of the company's internal control, the board of directors' opinions on the matter, and specific measures to eliminate the matter and its impact.
Article 64 A company shall regard the soundness, completeness and effective implementation of the internal control system as one of the important indicators for the performance evaluation of the company's departments (including branches) and holding subsidiaries. The company should establish an accountability mechanism to investigate and deal with relevant responsible persons who violate the internal control system and affect the implementation of the internal control system.
Chapter 5 Supplementary Provisions
Article 65 Matters not covered by this system shall be implemented in accordance with relevant laws, administrative regulations, and relevant provisions of the China Securities Regulatory Commission and Shenzhen Stock Exchange. If this system conflicts with laws, regulations, administrative regulations, normative documents, relevant rules of the Shenzhen Stock Exchange, and relevant provisions of the Articles of Association, the aforementioned relevant provisions shall prevail.
Article 66 The board of directors shall modify and supplement this system in accordance with the provisions of relevant laws and regulations and the actual situation of the company.
Article 67 This system shall come into effect from the date of deliberation and approval by the board of directors.
