China Securities Co., Ltd.
Audit Opinion on China Securities Co., Ltd.'s Review of Zhejiang Xia厦 Precision Manufacturing Co., Ltd.'s 2025 Internal Control Self-Evaluation Report
As the sponsor, China Securities Co., Ltd. (hereinafter referred to as "China Securities" or "Sponsor") is the sponsor for Zhejiang Xia厦 Precision Manufacturing Co., Ltd. (hereinafter referred to as "Xia厦 Precision" or "the Company") for its initial public offering of shares on the Main Board and ongoing supervision. In accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," the "Stock Listing Rules of the Shenzhen Stock Exchange," and the "Shenzhen Stock Exchange Listed Company Self-Regulation Guidelines No. 1 - Normative Operation of Main Board Listed Companies," among other relevant regulations, China Securities has prudently reviewed Xia厦 Precision's "2025 Internal Control Self-Evaluation Report." The details are as follows:
I. Sponsor's Review Work
The sponsor representatives from China Securities reviewed various company business and management rules and regulations, relevant shareholder and board meeting minutes, audit reports, and other materials. They also reviewed the 2025 Internal Control Self-Evaluation Report issued by the Company's board of directors. Furthermore, they communicated with the Company's directors, audit committee, senior management, and departments such as the finance and audit departments. Combined with ongoing supervision work, they conducted a comprehensive and diligent review of the completeness, reasonableness, and effectiveness of the Company's internal controls.
II. Internal Control Evaluation Work
(I) Scope of Internal Control Evaluation
The Company determined the main entities, businesses, and matters included in the evaluation scope and high-risk areas based on a risk-oriented approach. The main entities included in the evaluation scope are the Company and its consolidated subsidiaries. The assets of the entities included in the evaluation scope account for 100% of the total assets in the Company's consolidated financial statements, and the operating income accounts for 100% of the total operating income in the Company's consolidated financial statements. The main businesses and matters included in the evaluation scope include: organizational structure, human resources, corporate culture, social responsibility, risk assessment, control activities, information and communication, internal supervision, fundraising management, external guarantee management, major investment management, related party transaction management, information disclosure management, etc. The key high-risk areas focused on include: fundraising management, external guarantee management, major investment management, related party transaction management, and information disclosure management.
The entities, businesses, and matters included in the evaluation scope and high-risk areas cover the main aspects of the Company's operational management and do not involve any significant omissions.
(II) Basis for Internal Control Evaluation and Standards for Identifying Internal Control Deficiencies
The Company organized its internal control evaluation work in accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines and other relevant regulations.
Based on the requirements for identifying major, significant, and general deficiencies in the "Basic Norms for Enterprise Internal Control," and considering factors such as the Company's scale, industry characteristics, risk appetite, and risk tolerance, the Company's board of directors has differentiated between financial reporting internal controls and non-financial reporting internal controls. They have researched and determined the specific standards for identifying internal control deficiencies applicable to the Company, which remain consistent with previous years.
The standards for identifying internal control deficiencies determined by the Company are as follows:
- Standards for Identifying Financial Reporting Internal Control Deficiencies
The quantitative standards for evaluating financial reporting internal control deficiencies determined by the Company are as follows: