Fujian Yuanli Activated Carbon Co., Ltd. Board of Directors 2025 Annual Internal Control Self-Assessment Report
To all shareholders of Fujian Yuanli Activated Carbon Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control," "Guidelines for Internal Control Assessment," and relevant laws and regulations issued by five ministries of the People's Republic of China, combined with the actual situation of Fujian Yuanli Activated Carbon Co., Ltd. (hereinafter referred to as "the Company") and the relevant internal control systems, we have evaluated the effectiveness of the Company's internal control as of December 31, 2025 (the benchmark date for the internal control assessment report). The report is as follows:
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Important Statement According to the regulations of the enterprise internal control normative system, establishing, improving, and effectively implementing internal control, evaluating its effectiveness, and truthfully disclosing the internal control assessment report is the responsibility of the Company's Board of Directors. The Audit Committee supervises the establishment and implementation of internal control by the Board. The management is responsible for organizing and leading the daily operation of internal control. The Company's Board of Directors, Audit Committee, and all directors ensure that the content of this report does not contain any false records, misleading statements, or significant omissions, and bear individual and joint responsibility for the authenticity, accuracy, and completeness of the report's content. The goal of the Company's internal control 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 control, it can only provide reasonable assurance for achieving the above objectives. Furthermore, changes in circumstances may lead to the internal control becoming inappropriate or reduce the degree of compliance with control policies and procedures, making it risky to infer the future effectiveness of internal control based on the assessment results.
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Internal Control Assessment Conclusion Based on the identification of significant deficiencies in internal control over financial reporting, as of the benchmark date of the internal control assessment report, there are no significant deficiencies in internal control over financial reporting. The Board believes that the Company has maintained effective internal control over financial reporting in all material respects in accordance with the requirements of the enterprise internal control normative system and relevant regulations. Based on the identification of significant deficiencies in non-financial reporting internal control, as of the benchmark date of the internal control assessment report, the Company has not identified any significant deficiencies in non-financial reporting internal control. No factors affecting the effectiveness of internal control assessment conclusions have occurred between the benchmark date of the internal control assessment report and the issuance date of the internal control assessment report.
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Internal Control Assessment Work Situation (1) Scope of Internal Control Assessment The Company has determined the main units, businesses, and matters included in the assessment scope based on a risk-oriented principle, as well as high-risk areas. The units included in the assessment scope comprise the parent company and wholly-owned subsidiaries, as well as holding subsidiaries. The main businesses and matters included in the assessment scope encompass: governance structure, organizational structure, external investment and subsidiary management, external guarantees and related party transaction management, financial management, procurement and payment management, production management, product sales and collection management, inventory management, payroll and personnel management, research and development and technology achievement management, fundraising management, information disclosure management, and internal supervision, among others. The aforementioned units, businesses, matters, and high-risk areas included in the assessment scope cover the main aspects of the Company's operational management, with no significant omissions.