Important Statement
According to the provisions of the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory requirements (hereinafter referred to as the "Enterprise Internal Control Normative System"), combined with Yunnan Baiyao Group Co., Ltd.'s (hereinafter referred to as the "Company") internal control system and evaluation methods, we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the benchmark date for the internal control evaluation report).
The establishment, improvement, and effective implementation of internal controls, as well as the evaluation of their effectiveness and truthful disclosure of the internal control evaluation report, are the responsibilities of the Company's board of directors. The audit committee 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 the Company's internal controls. The Company's board of directors, audit committee, and directors 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 truthfulness, accuracy, and completeness of the report's content.
The objective of the Company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reporting and related information are true and complete, operational efficiency and effectiveness are improved, and the achievement of development strategies is promoted. Due to the inherent limitations of internal controls, they can only provide reasonable assurance for achieving the above objectives. Furthermore, 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 evaluation results.
Internal Control Evaluation Conclusion
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As of the benchmark date for the internal control evaluation report, are there any significant deficiencies in financial reporting internal controls?
□ Yes √ No -
Conclusion on the evaluation of financial reporting internal controls
√ Effective □ Ineffective
Based on the identification of significant deficiencies in financial reporting internal controls, there are no significant deficiencies as of the benchmark date for the internal control evaluation report. The board of directors believes that the Company has maintained effective financial reporting internal controls in all material respects in accordance with the requirements of the Enterprise Internal Control Normative System and related regulations. -
Are there any significant deficiencies in non-financial reporting internal controls?
□ Yes √ No
Based on the identification of significant deficiencies in non-financial reporting internal controls, the Company has not identified any significant deficiencies as of the benchmark date for the internal control evaluation report. -
Factors affecting the evaluation conclusion of internal control effectiveness between the benchmark date and the date of issuance of the internal control evaluation report
□ Applicable √ Not applicable
No factors affecting the evaluation conclusion of internal control effectiveness occurred between the benchmark date and the date of issuance of the internal control evaluation report. -
Is the internal control audit opinion consistent with the Company's evaluation conclusion on the effectiveness of financial reporting internal controls?
√ Yes □ No -
Is the disclosure of significant deficiencies in non-financial reporting internal controls in the internal control audit report consistent with the disclosure in the Company's internal control evaluation report?
√ Yes □ No