Zhejiang Xinhengcheng Co., Ltd. 2025 Annual Internal Control Self-Assessment Report
To all shareholders of Zhejiang Xinhengcheng Co., Ltd.:
In accordance with the provisions of the "Basic Norms for Enterprise Internal Control" and its supporting guidelines jointly issued by the Ministry of Finance, the China Securities Regulatory Commission, and other ministries (hereinafter referred to as the "Enterprise Internal Control Normative System"), combined with the internal control systems and evaluation methods of Zhejiang Xinhengcheng Co., Ltd. (hereinafter referred to as the "Company" or "we"), 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) based on daily supervision and special supervision of internal controls.
1. Important Statement
According to the regulations of the Enterprise Internal Control Normative System, it is the responsibility of the Company's board of directors to establish, improve, and effectively implement internal controls, evaluate their effectiveness, and truthfully disclose the internal control evaluation report. The management is responsible for organizing and leading the daily operation of the Company's internal controls. The Company's board of directors, 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 goal of the Company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reports and related information are true and complete, operational efficiency and effectiveness are improved, and development strategies are promoted. Due to the inherent limitations of internal controls, they can only provide reasonable assurance of 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.
2. Internal Control Evaluation Conclusion
Based on the identification of significant deficiencies in internal controls over financial reporting, as of the benchmark date of the internal control evaluation report, there are no significant deficiencies in financial reporting internal controls. The board 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. Based on the identification of significant deficiencies in non-financial reporting internal controls, as of the benchmark date of the internal control evaluation report, the Company has not identified any significant deficiencies in non-financial reporting internal controls. No factors affecting the evaluation conclusion of internal control effectiveness have occurred between the benchmark date of the internal control evaluation report and the date of issuance of the internal control evaluation report.
3. Internal Control Evaluation Work Situation
(1) Scope of Internal Control Evaluation
The Company determines the main units, businesses, and high-risk areas included in the evaluation scope based on a risk-oriented principle. The main units included in the evaluation scope comprise all units of the Company, with the total assets of the included units accounting for 100% of the total assets in the consolidated financial statements, and the total operating income accounting for 100% of the total operating income in the consolidated financial statements. The businesses and matters included in the evaluation scope include: