Hangxun Group Co., Ltd. 2025 Annual Internal Control Self-Evaluation Report
To all shareholders of Hangxun Group Co., Ltd.:
In accordance with the "Basic Norms for Internal Control of Enterprises" and its supporting application guidelines issued by the Ministry of Finance, and other internal control regulatory requirements (hereinafter referred to as the "Internal Control System"), and in conjunction with the company's internal control system and evaluation methods, based on daily supervision and special supervision of internal control, we have evaluated the effectiveness of the company's internal control as of December 31, 2025 (the internal control evaluation report base date).
I. Important Statement
In accordance with the requirements of the Internal Control System, it is the responsibility of the company's Board of Directors to establish, improve, and effectively implement internal control, evaluate its effectiveness, and disclose the internal control evaluation report truthfully. The Audit Committee supervises and evaluates the establishment and implementation of internal control by the Board of Directors. The management is responsible for organizing and leading the daily operation of the company's internal control. The company's Board of Directors, directors, and senior management guarantee that the content of this report contains no false records, misleading statements, or major omissions.
The objective of the company's internal control is to reasonably ensure the legality and compliance of business operations, the safety of assets, the truthfulness and completeness of financial reports and related information, 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, internal control may become inappropriate, or the degree of compliance with control policies and procedures may decrease. Therefore, predicting the future effectiveness of internal control based on the results of the internal control evaluation carries certain risks.
II. Conclusion of Internal Control Evaluation
Based on the recognized standards for financial reporting internal control, as of the internal control evaluation report base date, the company has no material or significant deficiencies in financial reporting internal control. We believe that the company has maintained effective financial reporting internal control in all material aspects in accordance with the requirements of the Internal Control System and relevant regulations.
Based on the recognized standards for non-financial reporting internal control, as of the internal control evaluation report base date, the company has no material or significant deficiencies in non-financial reporting internal control.
No material changes in internal control have occurred between the internal control evaluation report base date and the date of issuance of this report that have had a substantial impact on the conclusion of the internal control evaluation.
III. Internal Control Evaluation Work
(I) Principles of Internal Control Evaluation
- Principle of Comprehensiveness. The evaluation work shall include the design and operation of internal control, covering all businesses and matters of the enterprise and its subsidiaries.
- Principle of Materiality. The evaluation work shall be based on a comprehensive evaluation, focusing on important business units, major business matters, and high-risk areas.
- Principle of Objectivity. The evaluation work shall accurately reveal the risk status of business operations and truthfully reflect the effectiveness of internal control design and operation.
(II) Basis for Internal Control Evaluation