Important Statement
According to the provisions of the enterprise internal control standard system, establishing, improving, and effectively implementing internal controls, evaluating their effectiveness, and truthfully disclosing the internal control assessment report is the responsibility of the company's board of directors. The supervisory board supervises the establishment and implementation of internal controls by the board of directors. The management is responsible for organizing and leading the daily operation of internal controls. The company's board of directors, supervisory board, and directors, supervisors, and senior management ensure that the content of this report does not contain any false records, misleading statements, or significant omissions, and bear individual and joint legal responsibility for the authenticity, accuracy, and completeness of the report's content. The goal of the company's internal controls is to reasonably ensure legal compliance in management, asset safety, and the authenticity and completeness of financial reports and related information, improve operational efficiency and effectiveness, and promote the achievement of development strategies. Due to the inherent limitations of internal controls, they can only provide reasonable assurance of achieving the above objectives. Additionally, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, making it risky to infer the future effectiveness of internal controls based on assessment results.
Internal Control Assessment Conclusion
Based on the identification of significant deficiencies in financial reporting internal controls, as of the internal control assessment report benchmark date, the company has one significant financial reporting internal control deficiency: the auditor has issued a disclaimer of opinion on the company's financial statements for two consecutive years. According to the identification of significant deficiencies in non-financial reporting internal controls, as of the internal control assessment report benchmark date, the company has one significant non-financial reporting internal control deficiency: the company is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws and regulations.
Internal Control Assessment Work Situation
Internal Control Assessment Scope
The company determines the main units, businesses, and matters included in the assessment scope based on a risk-oriented principle, as well as high-risk areas. The main units included in the assessment scope are Shenzhen Danbond Technology Co., Ltd. and its holding subsidiaries, with the total assets of the included units accounting for 100% of the company's consolidated financial statement assets, and total operating income accounting for 100% of the company's consolidated financial statement operating income.
Main Business and Matters Included in the Assessment Scope
A. Internal Environment
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Corporate Governance Structure The company strictly adheres to the requirements of the Company Law, the Code of Corporate Governance for Listed Companies, and other relevant laws and regulations, improving a series of internal control management systems that have been established. A corporate governance structure has been formed where the power institutions, decision-making bodies, supervisory bodies, and management have clear responsibilities, operate independently, check and balance each other, make scientific decisions, and coordinate operations. Through the operational rules of institutions, mutual coordination and constraints, and internal supervision and control mechanisms, the company has become a legal entity with clear property rights, defined responsibilities, and scientific management, as well as a market competitor.
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Company Organizational Structure The company has established and improved its organizational structure, setting up departments such as the Finance Department, Administrative Human Resources Department, Audit Department, Market Development and Service Department, Quality Control Department, Material Department, Technical Research and Development Department, Advanced COF Materials Division, COF&FPC Division, Packaging and Assembly Division, PI Division, TPI Carbon Film Division, Flexible Circuit and Material R&D Center, and Board Secretary Office, among others.