In order to standardize the management of Jiangsu Hengtong Optoelectronics Co., Ltd. (hereinafter referred to as "the joint-stock company"), implement the Company Law of People's Republic of China (PRC), the Securities Law of People's Republic of China (PRC), the Accounting Law of People's Republic of China (PRC) and other relevant laws and regulations, and meet the regulatory requirements of domestic and foreign capital markets for listed companies, the joint-stock company has formulated this internal control manual.

A complete internal control system and a perfect internal control system are the criteria to restrict and standardize the management behavior of enterprises, and are important measures to reduce risks. The implementation of internal control can find and correct all kinds of mistakes and illegal behaviors in time, which is conducive to ensuring the safety and integrity of assets and ensuring the authenticity and reliability of operating results and financial status. Its necessity is as follows:

First, establish a modern enterprise management system, improve the corporate governance structure, realize the transformation of operating mechanism, strengthen enterprise management, improve enterprise performance and improve enterprise financial status.

The second is to implement the relevant laws and regulations in China, follow the Basic Standards for Enterprise Internal Control, the Supporting Guidelines for Enterprise Internal Control, the Sarbanes-Ox Act of the United States, and the regulatory requirements of domestic and foreign capital markets such as the Ministry of Finance, the Securities Regulatory Commission, the Audit Commission, the China Banking Regulatory Commission and the China Insurance Regulatory Commission, so as to improve the quality of accounting information.

Third, actively participate in competition and strive to reduce risks. With the increasingly fierce market competition, the high development of information technology and the acceleration of global economic integration, the risks faced by joint-stock companies are gradually increasing. Establishing and perfecting an effective internal control system is an important measure to prevent risks and improve operating efficiency and benefit.

The fourth is to establish a unified and standardized internal control system, so that the rules and regulations of the joint-stock company can become a systematic, operable and inclusive internal management system, and more effectively reflect the management concept of the joint-stock company.

2. Basic principles followed in the internal control manual

The first is the principle of compliance. Compliance means that the internal control system of an enterprise must conform to the laws, regulations and policies of the state; Comply with laws, regulations and the requirements of the securities regulatory authorities in the place where the joint-stock company is listed.

The second is the principle of comprehensiveness and systematicness. The internal control manual covers all aspects of the joint-stock company's business activities, and its internal supervision and control runs through the whole process of business management activities, involving all employees. Every employee of a joint-stock company is both the subject and the object of internal control. It is necessary not only to control the operation it is responsible for, but also to be supervised and restricted by other personnel or systems. "Internal Control Manual" makes all departments and posts in the joint-stock company form a relatively systematic and unified whole, which is mutually restricted and criss-crossed, ensuring that all departments and posts play a coordinating role according to specific goals, and finally realize the overall goal of internal control of the joint-stock company.

The third is the principle of internal containment and incompatibility. Internal containment refers to the relationship between departments, employees and positions, which is an important part of the internal control system of enterprises. Its main feature is the distribution of related responsibilities, so that a single individual or department has no complete right to handle any one or more economic business activities and must be verified, inspected and restricted by other incompatible departments or personnel.

The fourth is the principle of clear rights and responsibilities and the combination of rewards and punishments. According to the functions and nature of each department and post, clarify the responsibilities of each department and personnel and give them corresponding authority. According to the operating rules and handling procedures, determine the investigation measures, investigate the responsibilities, rewards and punishments, etc. , so that the right to return, benefit to enjoy, to avoid the phenomenon of ultra vires or buck passing.

The fifth is the principle of cost performance. The principle of cost-effectiveness runs through the internal control activities, that is, trying to obtain the maximum economic benefits with the least control or management costs. Implement selective control: strive to reduce control costs, streamline institutions and personnel as much as possible, improve control methods and means, and improve efficiency.

The sixth is the principle of operability. The internal control manual must conform to the actual situation of the joint-stock company. Whether setting the control point of business process or determining the authority of authorized projects, it is necessary to consider whether it is feasible in actual management and ensure its operability.

Seventh, the principle of inclusiveness. The internal control manual is a series of risk control process control system based on the existing management system of joint-stock companies, covering investment, production, operation, finance, supervision and inspection. The internal control manual strives to avoid conflicts with other systems, including conflicts with existing systems as far as possible. Other management systems that do have conflicts should be revised and improved in time, and the provisions of the internal control manual shall prevail.

Eight is the principle of information feedback. Determine the tasks and responsibilities of the relevant personnel in information transmission, stipulate the information transmission procedures, collection methods and time requirements, and establish a strict information feedback system such as records and reports.

3. Scope of application of internal control manual

The internal control manual is applicable to joint-stock companies and their subsidiaries (subsidiaries refer to investment (holding) and custody companies of joint-stock companies). The investment (holding) and custody company of a joint-stock company shall refer to the internal control manual of the joint-stock company, combine their own characteristics, and formulate the internal control manual according to the principle that "the business must cover all the corresponding provisions in the internal control manual of the joint-stock company, and the authority is equivalent to that of the joint-stock company", and report it to the internal control department of the joint-stock company for the record after fulfilling the company's examination and approval procedures.

4. Definition of internal control

Internal control is a process implemented by the board of directors, management and all employees of joint-stock companies to meet the regulatory requirements of domestic and foreign securities institutions, improve risk management capabilities and management requirements, and provide reasonable protection for achieving the objectives of efficiency and effectiveness of business activities, reliability of financial reports, and compliance with relevant laws and regulations. Internal control mainly includes five elements: internal environment, risk assessment, control activities, information communication and supervision and inspection;

Internal environment is the general name of various internal factors that affect and restrict the establishment and implementation of internal control, and it is the basis of implementing internal control. The internal environment mainly includes governance structure, organizational structure and distribution of rights and responsibilities, corporate culture, human resources, internal audit mechanism and anti-fraud mechanism.

Risk assessment is a process of identifying, scientifically analyzing and evaluating all kinds of uncertain factors that affect the realization of joint-stock companies' goals in time and formulating countermeasures. Risk assessment mainly includes risk identification, risk measurement, risk response and risk report. Control activities refer to policies and procedures that take appropriate control measures to ensure the realization of internal control objectives according to risk assessment results and risk response strategies, and are specific ways to implement internal control. The selection of control measures should be combined with the characteristics and requirements of the specific business and matters of the enterprise, mainly including separation of powers and responsibilities control, authorization approval control, budget control, property protection control, analysis report control, performance appraisal control, information technology control and so on.

Information communication refers to the process of timely, accurate and complete collection of all kinds of information related to the operation and management of joint-stock companies, and timely transmission, effective communication and correct application of these information among relevant levels in an appropriate way, which is an important condition for implementing internal control. Information and communication mainly include information collection mechanism and internal and external communication mechanism.

Supervision and inspection is the process of checking and evaluating the effectiveness of internal control, forming a written report and making corresponding treatment, which is an important guarantee for the implementation of internal control.

20 10 five ministries and commissions issued supporting guidelines for enterprise internal control standards, which are divided into 18 application guidelines, 1 evaluation guidelines and 1 audit guidelines, which are further detailed guidelines for the basic standards of enterprise internal control.

5. Internal control organization

According to the requirements of "Basic Standards for Enterprise Internal Control" and "Supporting Guidelines for Enterprise Internal Control", in order to ensure the smooth development of the company's internal control standard system, various internal control systems of the company have been implemented. In order to maximize the interests of shareholders and promote the comprehensive and sustainable development of the company, the company has established the leading group and working group for the implementation of internal control standards and the evaluation group for internal control standards. Organize the work arrangement of the company's internal control mechanism construction, implement the basic system and working standards of the internal control mechanism formulated by the company, plan the layout of the internal control system as a whole according to the internal control requirements, supervise the whole process of the internal control mechanism work, and ensure the healthy operation of the internal control mechanism.

The internal control leading group is led by the chairman of the company. The duties of the working group are: to organize the work arrangement of the company's internal control mechanism construction, implement the basic system and working standards of the internal control mechanism formulated by the company, plan the layout of the internal control system as a whole according to the internal control requirements, supervise the whole process of the internal control mechanism work and ensure the effective operation of the internal control mechanism.

The internal control construction working group is led by the general manager of the joint-stock company. The responsibility of the team is to implement the requirements of the company's internal control leading group, carry out related work according to the division of responsibilities, implement various internal control systems formulated by the company, and be responsible for risk prevention and control in daily work. Coordinate and convene internal control construction work meetings, and be responsible for coordinating and supervising the internal control work of subsidiaries and departments.

The internal control evaluation working group consists of supervisors and audit departments of joint-stock companies. The responsibilities of the team are: to implement the requirements of the company's internal control leading group, carry out internal control evaluation related work according to the division of responsibilities, supervise the implementation of various internal control systems formulated by the company, and be responsible for risk prevention and control inspection in daily work.

Internal Control Work Each group carries out relevant work according to the requirements of the company's internal control work and the division of responsibilities, implements various internal control systems formulated by the company, and is responsible for risk prevention and control in daily work. The Internal Control Department and the Audit Department, as the lead departments of internal control norms, cooperate with various functional departments and subsidiaries of the company to carry out internal control construction and self-evaluation. As the daily management organization of the internal control work of the joint-stock company, the internal control department is specifically responsible for organizing the supervision and inspection of the implementation of internal control, the evaluation of internal control, the update and training of the internal control manual, etc.

6. User Guide for Internal Control Manual

This manual consists of five parts: Instructions for Compilation and Use of Internal Control Manual of Jiangsu Hengtong Optoelectronics Co., Ltd., Internal Control Manual, Authorization Guide, Incompatible Job Separation and Risk Assessment.

"Instructions for Compilation and Use of Internal Control Manual of Jiangsu Hengtong Optoelectronics Co., Ltd." is the content of this paper. It expounds the background, principles, scope of application, definition of internal control, internal control organization, user guide, responsibilities and requirements for implementation, compilation and management, distribution, use requirements, effectiveness, maintenance and update of the internal control manual.

The Internal Control Manual describes the organizational structure and responsibilities of the internal control system, comprehensively expounds the construction objectives of the internal control system, and comprehensively and systematically expounds the key points and corresponding measures of internal control from five aspects, such as control environment, risk assessment, control activities, information and communication, and internal supervision, with the sub-item 18 of the Application Guidelines for Enterprise Internal Control issued by five ministries and commissions.

The Authorization Guide describes the scope, level, procedures and responsibilities of authorization and approval of the company's management, decision-making level and all control activities, and expounds the approval authority of key points of internal control;

The separation of incompatible positions describes the organization, post setting and reasonable division of powers and responsibilities within the company, ensuring that different positions form a working mechanism that performs their respective duties and restricts each other, and compiling all incompatible positions in the company.

Risk assessment describes the basic concepts of the company's risk control objectives and risk assessment, as well as the classification of risks. Risk management system expounds the key points of internal control and corresponding measures from three aspects: determining risk assessment objectives, risk assessment mechanism and establishing and perfecting risk management system, and compiles the risk content and assessment of all activities of the company.

7. Responsibilities and requirements for implementing the internal control manual

This manual establishes a set of scientific and systematic methods and standards for the construction of internal control system, and is a programmatic document for the company to establish and implement internal control system. In order to ensure the "effective design and implementation" of the internal control system, all departments and companies should seriously organize the implementation and strictly follow it. We should fully understand the long-term and arduous nature of the construction of internal control system, take the establishment and effective operation of internal control system as an important task, establish a long-term mechanism, designate management departments or posts, perform internal control functions, and earnestly implement them.

In order to promote the implementation of the manual and improve the use effect of the manual, the joint-stock company and its subsidiaries should hold training on the use of the manual at least once a year, and do a good job in training in a planned way, and convey the requirements of internal control to every employee and post to ensure the implementation in place.

Each company shall revise, improve and refine this manual in accordance with the requirements of Basic Standards for Internal Control of Enterprises, Supporting Guidelines for Internal Control of Enterprises and Internal Control Manual of Joint-stock Companies of five ministries and commissions.

The person in charge of internal control of each company shall inspect and supervise the operation of the company's internal control system, and the internal control department will regularly organize evaluation and report.

8. Preparation and management of internal control manual

This manual is compiled by the Internal Control Department, approved by the Internal Control Committee and published by the joint-stock company. The Internal Control Department conducts standardized management of the manual to ensure its effectiveness, integrity, unity and applicability.

9. Release the internal control manual

Manuals shall be distributed uniformly according to the distribution scope. The distribution scope is proposed by the Internal Control Department and implemented after being approved by the management. Generally, it includes company executives and relevant functional departments of joint-stock companies.

The manual includes a paper version and an electronic version, and the electronic version is distributed to the executives of the joint-stock company; The paper version is distributed to all functional departments and special users of the company.

10, Application Requirements of Internal Control Manual

This manual is an important document of the company and belongs to company secrets. All units shall use it correctly according to relevant requirements, and shall not copy or make it public without authorization. Consult the internal control department in time if you encounter difficult problems during use.

1 1. Effectiveness, maintenance and update of internal control manual

The maintenance of the manual is a long-term, regular and important work, which needs the great attention of all departments and companies, active participation and strong cooperation. Each company shall designate an internal control manager to be responsible for the daily management and maintenance of the manual of the unit. Problems found in daily use of the manual should be carefully recorded and promptly fed back to the internal control department. The internal control department should keep abreast of the implementation of the manual and take effective measures to ensure the effective operation of the internal control management system.

The Internal Control Department is responsible for the revision of the manual. The Internal Control Department will revise the Manual every year according to the requirements of relevant laws and regulations newly promulgated in China and listed places, the evaluation of internal control by internal and external audits, new problems in the internal control management of the company, feedback opinions and suggestions, etc. The updated internal control manual will take effect after being approved by the chairman, and will be distributed to all departments and companies by the internal control department. The updated electronic version will be archived in the network center of the joint-stock company and the network department of Qidu according to the requirements of remote data backup.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.