Shenzhen Fuanna Home Furnishings Co., Ltd. 2025 Annual Internal Control Evaluation Report
To all shareholders of Shenzhen Fuanna Home Furnishings Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, and in conjunction with Shenzhen Fuanna Home Furnishings Co., Ltd.'s (hereinafter referred to as the "Company") internal control system and evaluation methods, we have conducted a comprehensive assessment of the Company's internal control effectiveness as of December 31, 2025, based on daily supervision and special supervision of internal controls. This report aims to inform all shareholders of the evaluation results of the Company's internal control, ensuring the soundness and effectiveness of the Company's internal control system.
I. Important Statement
The Company's Board of Directors is responsible for establishing, improving, and effectively implementing the internal control system, evaluating its effectiveness, and truthfully disclosing the internal control evaluation report. The Audit Committee supervises the establishment and implementation of internal controls by the Board of Directors, and the management is responsible for organizing the daily operation of the Company's internal controls. The Company's Board of Directors, Audit Committee, directors, and senior management guarantee that the content of this report contains no false records, misleading statements, or major omissions, and they bear individual and joint legal responsibility for the truthfulness, accuracy, and completeness of the report's content.
The objective of the Company's internal control is to ensure that business management is legal and compliant, assets are safe, financial reports and related information are true and complete, operating efficiency and effectiveness are improved, and development strategies are achieved through the establishment and continuous improvement of the internal control system. However, internal control has inherent limitations and can only provide reasonable assurance for achieving the above objectives. Furthermore, due to changes in the external environment, the effectiveness of internal control may be affected, and therefore, predicting the future effectiveness of internal control based on the results of the internal control evaluation carries certain risks.
II. Internal Control Evaluation Conclusion
Based on the identification of material weaknesses in the Company's financial reporting internal controls, as of December 31, 2025, the Company has not found any material weaknesses in financial reporting internal controls. The Board of Directors believes that the Company has maintained effective financial reporting internal controls in all material aspects in accordance with the requirements of the enterprise internal control standard system and relevant regulations. Based on the identification of material weaknesses in the Company's non-financial reporting internal controls, as of December 31, 2025, the Company has not found any material weaknesses in non-financial reporting internal controls.
No factors have occurred between the baseline date of the internal control evaluation report and the issuance date of the internal control evaluation 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.
-
Main entities included in the evaluation scope: The Company and all its holding subsidiaries. The total assets of the entities included in the evaluation scope account for 100% of the Company's consolidated financial statement assets, and the total operating income accounts for 100% of the Company's consolidated financial statement operating income.
-
Main businesses and matters included in the evaluation scope: Corporate governance, development strategy, corporate culture, human resources, control of overseas wholly-owned subsidiaries, fund management, procurement, asset management, sales, financial reporting, related-party transactions, external investment and guarantees, budget management, authorization management, contract management, information systems, and information disclosure.