Important Statement
According to the regulations of the internal control normative 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 by the board. The management is responsible for organizing and leading the daily operation of internal controls. The 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 the report. The goal of the company's internal control is to reasonably ensure that operations are legal and compliant, assets are secure, financial reports and related information are true and complete, and to improve operational efficiency and effectiveness, thereby promoting the achievement of development strategies. Due to the inherent limitations of internal controls, they can only provide reasonable assurance of achieving the above objectives. 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 financial reporting internal controls, as of the internal control evaluation report benchmark date, the company has no significant deficiencies in financial reporting internal controls. The board believes that the company has maintained effective financial reporting internal controls in all material aspects in accordance with the requirements of the internal control normative system and related regulations. Based on the identification of significant deficiencies in non-financial reporting internal controls, as of the internal control evaluation report benchmark date, the company has not identified any significant deficiencies in non-financial reporting internal controls. 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 high-risk areas included in the evaluation scope based on a risk-oriented principle. The main companies included in the evaluation scope are: Xiamen Ade Biotechnology Co., Ltd., Xiamen Ade Biotechnology Research Center Co., Ltd., Shanghai Xavi Biotechnology Co., Ltd., Shanghai Xavi Medical Laboratory Co., Ltd., and Beijing Xavi Technology Service Co., Ltd. The total assets of the included evaluation units account for 100% of the total assets in the consolidated financial statements, and the total operating income accounts for 100% of the total operating income in the consolidated financial statements. Considering the actual situation of the company's existing business, the main businesses included in the evaluation scope are: governance structure, organizational setup and allocation of responsibilities, human resources, corporate culture, accounting system controls, asset management controls, sales management controls, procurement management controls, production and quality management controls, research and development management controls, related party transaction controls, external guarantee controls, subsidiary management controls, information disclosure internal controls, and internal supervision. The above-mentioned included evaluation units, businesses, and high-risk areas cover the main aspects of the company's operational management, with no significant omissions. The specifics are as follows: