2025 Internal Control Evaluation Report
To All Shareholders of Kelun-Biotech Pharmaceutical Group (Tianjin) Co., Ltd.:
Pursuant to the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory requirements (collectively referred to as the "Enterprise Internal Control Norms System"), and in conjunction with the internal control system and evaluation methods of Kelun-Biotech Pharmaceutical Group (Tianjin) Co., Ltd. (hereinafter referred to as the "Company" or "this Company"), and based on daily and special supervision of internal controls, we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025.
I. Important Statement
In accordance with the Enterprise Internal Control Norms System, it is the responsibility of the Company's Board of Directors to establish, improve, and effectively implement internal controls, evaluate their effectiveness, and disclose the internal control evaluation report truthfully. Management is responsible for organizing and leading the daily operation 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 legal responsibility for the truthfulness, accuracy, and completeness of the report's content.
The objective of this Company's internal control is to ensure the legality and compliance of business operations, the safety of assets, and the truthfulness and completeness of financial reports and related information, thereby improving operational efficiency and effectiveness, and promoting the achievement of development strategies. Due to the inherent limitations of internal control, only reasonable assurance can be provided for the achievement of these objectives. Furthermore, changes in circumstances may render internal controls inappropriate, or reduce the degree of adherence to control policies and procedures. Therefore, predicting the future effectiveness of internal controls based on the results of the internal control evaluation carries a certain degree of risk.
II. Conclusion of Internal Control Evaluation
Based on the Company's determination of material weaknesses in internal controls over financial reporting, there were no material weaknesses in internal controls over financial reporting as of the base date of this internal control evaluation report. The Board of Directors believes that the Company has maintained effective internal controls over financial reporting in all material respects in accordance with the requirements of the Enterprise Internal Control Norms System and relevant regulations.
Based on the Company's determination of material weaknesses in internal controls over non-financial reporting, no material weaknesses in internal controls over non-financial reporting were found as of the base date of this internal control evaluation report.
No factors have occurred between the base date of this internal control evaluation report and the issuance date of this 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 principle. The main entities included in the scope of evaluation are: