Shenzhen Kaizhong Precision Technology Co., Ltd. 2025 Annual Internal Control Evaluation Report
To all shareholders of Shenzhen Kaizhong Precision Technology Co., Ltd.:
According to the provisions of the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control regulatory requirements, and in conjunction with the company's "Internal Control Management System," we have evaluated the effectiveness of the company's internal controls as of December 31, 2025 (the benchmark date for the internal control evaluation report).
Important Statement
Establishing, improving, and effectively implementing internal controls, evaluating their effectiveness, and truthfully disclosing the internal control evaluation report is the responsibility of the company's board of directors. The audit committee supervises the establishment and implementation of internal controls by the board. Management is responsible for leading and organizing the daily operations 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 this report. The goal of the company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reports and related information are true and complete, operational efficiency and effectiveness are improved, and the development strategy is promoted. Due to inherent limitations in internal controls, they can only provide reasonable assurance of achieving the above goals. Additionally, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, making it risky to infer 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 respects in accordance with the requirements of the enterprise internal control normative system and related regulations. Based on the identification of significant deficiencies in non-financial internal controls, as of the benchmark date of the internal control evaluation report, the company has not identified any significant deficiencies in non-financial internal controls.
Since the benchmark date of the internal control evaluation report, no factors have arisen that would affect the evaluation conclusion regarding the effectiveness of internal controls.
Internal Control Evaluation Work Situation
(1) Basis for Internal Control Evaluation
The company has evaluated the effectiveness of the design and operation of internal controls based on the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Accounting Law of the People's Republic of China," "Enterprise Accounting Standards," "Basic Norms for Enterprise Internal Control," and supporting guidelines, "Shenzhen Stock Exchange Listing Rules," "Guidelines for the Governance of Listed Companies," and "Self-Regulatory Guidelines No. 1 for Main Board Listed Companies" among other relevant laws, regulations, and rules, in conjunction with the company's "Internal Control Management System."
(2) Scope of Internal Control Evaluation
The company determined the main units, businesses, and high-risk areas included in the evaluation scope based on a risk-oriented principle. The main units included in the evaluation scope comprise the company and all 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 are as follows: