Important Statement
According to the provisions of the Basic Norms for Enterprise Internal Control and its supporting guidelines, as well as other internal control regulatory requirements (hereinafter referred to as the "Enterprise Internal Control Normative System"), combined with Jiangsu Baoxin Technology Co., Ltd.'s (hereinafter referred to as the "Company") internal control system and evaluation methods, we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025, based on daily supervision and special supervision of internal controls.
The establishment, improvement, and effective implementation of internal controls, as well as 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. The management is responsible for organizing and leading the daily operation of internal controls. The Company's board of directors, audit committee, and 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 objective of the Company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reporting 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, thus posing certain risks in inferring the future effectiveness of internal controls based on evaluation results.
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, the Company has no significant deficiencies in internal controls over financial reporting. The board believes that the Company has maintained effective internal controls over financial reporting in all material aspects in accordance with the requirements of the Enterprise Internal Control Normative System and related regulations.
According to 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 significant events affecting the evaluation conclusion of internal control effectiveness occurred between the benchmark date of the internal control evaluation report and the issuance date of the report.
Internal Control Evaluation Work Situation
During the reporting period, the Company conducted internal control evaluation work in accordance with the requirements of the Basic Norms for Enterprise Internal Control and its supporting guidelines, continuously optimizing the internal control system and further enhancing the Company's risk prevention capabilities to adapt to the changing internal and external environment.
Scope of Internal Control Evaluation
The Company determined the main units, businesses, and matters included in the evaluation scope based on a risk-oriented principle, as well as high-risk areas. The main units included in the evaluation scope comprise the Company and its subsidiaries, 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 main businesses and matters included in the evaluation scope encompass information disclosure management, financial management, quality control and production management, related party transaction management, human resources management, corporate culture, seal management, fundraising management, investment management, and information system management, among others. The high-risk areas of focus mainly include: