Verification Report on Internal Control of Jiangsu Tianchang Composite Materials Co., Ltd.
To all shareholders of Jiangsu Tianchang Composite Materials Co., Ltd.:
We have audited the internal control effectiveness related to the financial statements as of June 30, 2017, as determined by the management of Jiangsu Tianchang Co., Ltd. in accordance with the "Basic Norms for Enterprise Internal Control" and relevant regulations.
1. Explanation of Significant Inherent Limitations
Internal control has inherent limitations, which may result in misstatements due to errors or fraud that may not be detected. Additionally, changes in circumstances may render internal controls inappropriate or reduce adherence to control policies and procedures, posing risks in inferring future internal control effectiveness based on evaluation results.
2. Limitations on Report Users and Purpose
This verification report is solely for use during Jiangsu Tianchang's initial public offering and must not be used for any other purpose. We agree that this verification report is a necessary document for Jiangsu Tianchang's initial public offering and should be submitted and disclosed along with other application materials.
3. Management's Responsibility
The management of Jiangsu Tianchang is responsible for establishing and maintaining effective internal controls, as well as for determining the effectiveness of internal controls related to financial statements as of June 30, 2017, in accordance with the "Basic Norms for Enterprise Internal Control" and relevant regulations.
4. Responsibility of the Certified Public Accountant
Our responsibility is to express a verification opinion on the effectiveness of internal controls based on the implementation of verification work.
5. Overview of Work
We conducted the verification in accordance with the "Standards for Other Assurance Services by Chinese Certified Public Accountants No. 3101—Assurance Services Other than Audits or Reviews of Historical Financial Information." These regulations require us to plan and perform verification work to obtain reasonable assurance that there are no material misstatements in the information being verified. During the verification process, we implemented procedures including understanding, testing, and evaluating the design and effectiveness of the internal control system, as well as other procedures we deemed necessary. We believe our verification work provides a reasonable basis for our opinion.
6. Verification Conclusion
We believe that Jiangsu Tianchang maintained effective internal controls in all material aspects as of June 30, 2017, in accordance with the "Basic Norms for Enterprise Internal Control" and relevant regulations. This conclusion is formed under the inherent limitations indicated in the verification report.
Tianjian Accounting Firm (Special General Partnership)
Certified Public Accountants: Hangzhou, China
Certified Public Accountant: July 10, 2017
Explanation of Internal Accounting Control System Matters by Jiangsu Tianchang Composite Materials Co., Ltd.
1. Basic Information of the Company
Jiangsu Tianchang Composite Materials Co., Ltd. (hereinafter referred to as the Company) was formerly known as Changzhou Tianchang Glass Fiber Composite Materials Co., Ltd. (hereinafter referred to as Tianchang Glass Fiber Company). Tianchang Glass Fiber Company was established by Wang Zhanhong, Jiang Jianping, and Xiao Baoxin, and registered with the Changzhou Administration for Industry and Commerce on March 24, 2008. Tianchang Glass Fiber Company transformed into a joint-stock company on June 30, 2010, and was registered with the Changzhou Administration for Industry and Commerce on December 22, 2010, headquartered in Changzhou, Jiangsu Province. The Company currently holds a business license with a unified social credit code of 91320400673043961T, with a registered capital of 90 million yuan and a total of 90 million shares (par value of 1 yuan per share). The Company belongs to the composite materials manufacturing industry, primarily engaged in the research, production, and sales of industrial multidirectional woven composite materials. Main products include glass fiber warp-knitted fabrics, cut fabrics, and fiberglass pipes and fittings.