Important Statement
According to the regulations of the enterprise internal control standard system, 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. 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 authenticity, accuracy, and completeness of the report's content. The goal of the company's internal controls is to reasonably ensure legal compliance in management operations, asset security, and the authenticity and completeness of financial reports and related information, thereby improving operational efficiency and promoting the realization of the company's development strategy. Due to the inherent limitations of internal controls, they can only provide reasonable assurance for achieving the above goals. Changes in circumstances may lead to internal controls becoming inappropriate or a decrease in adherence to 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 and important deficiencies in internal controls related to the company's financial reports, as of the internal control evaluation report benchmark date, there are no significant or important deficiencies in the financial reports. The board believes that the company has maintained effective internal controls over financial reporting in all significant aspects in accordance with the requirements of the enterprise internal control standard system and related regulations. According to the identification of significant and important deficiencies in non-financial reporting internal controls, as of the internal control evaluation report benchmark date, no significant or important deficiencies in non-financial reporting internal controls have been found. No factors affecting the evaluation conclusion of internal control effectiveness have 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 determines the main units, businesses, and matters to be included in the evaluation scope based on a risk-oriented principle, including all subsidiaries within the consolidation scope. The total assets of the units included in the evaluation scope account for 100% of the total assets in the company's consolidated financial statements, and the consolidated operating income accounts for 100% of the total operating income in the company's consolidated financial statements. The main businesses and matters included in the evaluation scope encompass: internal environment (including organizational structure, internal audit, human resources, corporate culture, and social responsibility), risk assessment, information and communication (including information disclosure and information system management), control activities (including incompatible duties separation control, authorization and approval control, accounting system control, asset protection control, budget control, operational analysis control, performance evaluation control, information disclosure management, subsidiary management, and emergency response control), and internal supervision; the high-risk areas of focus mainly include capital activities, sales business, procurement business, asset management, production and quality control, investment management, related party transactions, and external guarantees. The above-mentioned units, businesses, matters, and high-risk areas included in the evaluation scope cover the main aspects of the company's operational management, with no significant omissions.