Internal Control System
Chapter 1 General Provisions
Article 1 To strengthen the internal control of Shenzhen Topstar Co., Ltd. (hereinafter referred to as the "Company"), promote the Company's standardized operation and healthy development, protect the legitimate rights and interests of shareholders, and in accordance with the "Company Law," "Securities Law," and other laws, administrative regulations, departmental rules, and the "Stock Listing Rules of the Shenzhen Stock Exchange" (hereinafter referred to as the "Listing Rules"), and in conjunction with the Company's actual situation, this System is hereby formulated.
Article 2 Internal control as referred to in this System means the process by which the Company's board of directors, senior management, and other relevant personnel provide reasonable assurance for achieving the following objectives: (1) Compliance with national laws, regulations, rules, and other relevant provisions; (2) Improving the efficiency and effectiveness of the Company's operations; (3) Safeguarding the security of the Company's assets; (4) Ensuring the truthfulness, accuracy, completeness, and fairness of the Company's information disclosure.
Article 3 The Company's board of directors is responsible for the formulation and effective implementation of the Company's internal control system.
Chapter 2 Content of Internal Control
Article 4 The Company's internal control mainly includes: environmental control, business control, accounting system control, electronic information system control, information transmission control, internal audit control, and other aspects.
Article 5 The Company continuously improves its internal control system to ensure the lawful operation and scientific decision-making of the board of directors, its special committees, and shareholders' meetings, establish an effective incentive and restraint mechanism, foster risk prevention awareness, cultivate a good corporate spirit and internal control culture, and create an environment where all employees fully understand and perform their duties.
Article 6 The Company's administrative and human resources department shall clearly define the objectives, responsibilities, and authorities of each department and position, establish corresponding authorization, inspection, and hierarchical accountability systems to ensure that functions are performed within the scope of authorization; the Company shall continuously improve its control structure and formulate control procedures among different levels to ensure that instructions issued by the board of directors and senior management are conscientiously executed.
Article 7 The Company's internal control activities cover all business processes related to financial reporting and information disclosure, including but not limited to: sales and collections, procurement and payments, fixed asset management, inventory management, fund management, investment and financing management, information disclosure, human resource management, and information system management.
Article 8 The Company continuously establishes and improves specialized management systems for seal usage, asset management, guarantee management, fund lending management, duty authorization and agency systems, information disclosure management, and information system security management.
Article 9 The Company focuses on strengthening management and control over its控股子公司 (subsidiaries), enhancing control over related-party transactions, external guarantees, the use of raised funds, major investments, and information disclosure, and establishing corresponding control policies and procedures.
Article 10 The Company continuously establishes a complete risk assessment system to continuously monitor operating risks, financial risks, market risks, policy and regulatory risks, and moral risks, promptly identify and assess various risks faced by the Company, and take necessary control measures.
Article 11 The Company continuously improves its policies for managing internal and external information to ensure accurate information transmission, enabling the board of directors, senior management, and the internal audit department to promptly understand the operating and risk status of the Company and its subsidiaries, and ensuring that various risk hidden dangers and internal control deficiencies are properly addressed.