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 the internal control system and evaluation methods of Beijing Konstar Instrument Technology Co., Ltd. (hereinafter referred to as "the Company"), we 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, evaluation of their effectiveness, and 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 of directors. The management is responsible for organizing and leading the daily operation of internal controls. The Company's board of directors, 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 goal of the Company's internal control 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 objectives. Furthermore, 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 internal control evaluation report benchmark date, there are no significant deficiencies in financial reporting internal controls. The board of directors believes that the Company has maintained effective financial reporting internal controls in all material respects 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 internal control evaluation report benchmark date, the Company did not find any significant deficiencies in non-financial reporting internal controls. During the internal control evaluation process, the Company identified two important deficiencies in non-financial reporting internal controls, with specific circumstances and corrective measures detailed in "Section 8: Internal Control Deficiencies and Rectification Measures" of this report. No factors affecting the evaluation conclusion of internal control effectiveness occurred between the internal control evaluation report benchmark date and the issuance date of the internal control evaluation report.
Internal Control Evaluation Work Situation
(1) 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 are: Beijing Konstar Instrument Technology Co., Ltd., Beijing Hengju Detection Technology Co., Ltd., Beijing Sangpu Xinyuan Technology Co., Ltd., Jinan Changfeng Zhiyuan Instrument Technology Co., Ltd., Nanjing Mingde Software Co., Ltd., Aditel Co., Ltd., and Aditel Pte Ltd in Singapore. The total assets of the units included in the evaluation scope account for 100% of the total assets of the Company's consolidated financial statements, and the total operating income accounts for 100% of the total operating income of the Company's consolidated financial statements.