Kunming Jinsu Chemical Co., Ltd.
2025 Self-Evaluation Report on Internal Control
To all shareholders of Kunming Jinsu Chemical Co., Ltd.:
In accordance with 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 Norms"), and based on the internal control system and evaluation methods of Kunming Jinsu Chemical Co., Ltd. (hereinafter referred to as the "Company" or "this Company"), and on the basis of daily supervision and special supervision of internal control, we have evaluated the effectiveness of the Company's internal control as of December 31, 2025 (the internal control evaluation report benchmark date).
I. Important Statement
In accordance with the provisions of the Enterprise Internal Control Norms, it is the responsibility of the Company's Board of Directors to establish, improve, and effectively implement internal control and evaluate its effectiveness, and to disclose the internal control evaluation report truthfully. The Audit Committee supervises the establishment and implementation of internal control by the Board of Directors. The management is responsible for organizing and leading the daily operation of the Company's internal control. The Company's Board of Directors and its directors and senior management guarantee that this report contains no false records, misleading statements, or major omissions, and shall bear individual and joint legal liability for the authenticity, accuracy, and completeness of the report's content.
The objective of the Company's internal control is to reasonably ensure that business management is legal and compliant, assets are safe, financial reports and related information are true and complete, operating efficiency and effectiveness are improved, and development strategies are achieved. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving these objectives. In addition, due to changes in circumstances, internal control may become inappropriate, or the degree of compliance with control policies and procedures may decrease, and there is a certain risk in inferring the future effectiveness of internal control based on the results of the internal control evaluation.
II. Conclusion of Internal Control Evaluation
Based on the identification of material weaknesses in the Company's financial reporting internal control, as of the benchmark date of this internal control evaluation report, there are no material weaknesses in financial reporting internal control. The Board of Directors believes that the Company has maintained effective financial reporting internal control in all material aspects in accordance with the requirements of the Enterprise Internal Control Norms and relevant regulations.
Based on the identification of material weaknesses in the Company's non-financial reporting internal control, as of the benchmark date of this internal control evaluation report, no material weaknesses in non-financial reporting internal control have been found.
No factors have occurred between the benchmark date of this internal control evaluation report and the date of issuance of this internal control evaluation report that affect the conclusion of the internal control effectiveness evaluation.
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III. Internal Control Evaluation Work
(I) Scope of Internal Control Evaluation
The Company determines the main entities, businesses, and matters included in the evaluation scope and high-risk areas based on a risk-oriented approach.
The main entities included in the evaluation scope are: the Company and all its wholly-owned subsidiaries. The total assets of the entities included in the evaluation scope account for 100% of the Company's consolidated financial statement assets, and the total operating income accounts for 100% of the Company's consolidated financial statement operating income.