Henan Huaying Agricultural Development Co., Ltd.
2025 Internal Control Evaluation Report
To all shareholders of Henan Huaying Agricultural Development Co., Ltd.:
Based on the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory requirements (hereinafter referred to as the "Internal Control Norms System"), and in conjunction with the internal control system and evaluation methods of Henan Huaying Agricultural Development Co., Ltd. (hereinafter referred to as the "Company"), we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the "Internal Control Evaluation Report Base Date"), based on daily and special supervision of internal controls.
I. Important Statement
In accordance with the requirements of the Internal Control Norms System, the establishment, improvement, and effective implementation of internal controls, the evaluation of their effectiveness, and the 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, and the management is responsible for organizing and leading the daily operations of the Company's internal controls. The Company's Board of Directors, its directors, and senior management guarantee that this report contains no false records, misleading statements, or significant omissions, and they shall bear individual and joint legal responsibility for the truthfulness, accuracy, and completeness of the report's content.
The objectives of the Company's internal control are to reasonably ensure that business operations are legal and compliant, assets are secure, financial reports and related information are true and complete, and to improve operational efficiency and effectiveness, thereby promoting the achievement of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving these objectives. Furthermore, due to changes in circumstances that may render internal controls inappropriate, or a decrease in the degree of compliance with control policies and procedures, there is a certain risk in inferring the future effectiveness of internal controls based on the results of the internal control evaluation.
II. Conclusion of Internal Control Evaluation
Based on the determination of material weaknesses in the Company's financial reporting internal controls, as of the Internal Control Evaluation Report Base Date, the Board of Directors believes that the Company has, in all material respects, maintained effective financial reporting internal controls in accordance with the requirements of the Internal Control Norms System and relevant regulations.
Based on the determination of material weaknesses in the Company's non-financial reporting internal controls, as of the Internal Control Evaluation Report Base Date, the Company has not identified any material weaknesses in non-financial reporting internal controls. No factors have occurred between the date of this Internal Control Evaluation Report and the date of issuance of this report that affect the conclusion of the internal control effectiveness evaluation.
III. Internal Control Evaluation Work
(I) Scope of Internal Control Evaluation
The Company determines the main entities, businesses, and matters included in the scope of evaluation, as well as high-risk areas, based on a risk-oriented approach. The main entities included in the scope of evaluation are: Henan Huaying Agricultural Development Co., Ltd., its wholly-owned subsidiaries, and its controlled subsidiaries. The total assets of the entities included in the scope of evaluation account for 100% of the Company's consolidated financial statement total assets, and the total operating income accounts for 100% of the Company's consolidated financial statement total operating income.