Shijiazhuang Pharmaceutical Group Co., Ltd.
2025 Internal Control Evaluation Report
To all shareholders of Shijiazhuang Pharmaceutical Group Co., Ltd.:
In accordance with Shenzhen Stock Exchange Listing Company Self-Regulatory Guidelines No. 2 — Normative Operation of the GEM Market, the Basic Norms for Enterprise Internal Control, and their supporting guidelines, as well as other internal control regulatory requirements (hereinafter referred to as the "Enterprise Internal Control Normative System"), and combined with Shijiazhuang Pharmaceutical Group Co., Ltd.'s (hereinafter referred to as the "Company") internal control system and evaluation methods, based on daily supervision and special supervision of internal controls, we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the internal control evaluation report base date).
I. Important Statement
In accordance with the requirements of the Enterprise Internal Control Normative System, establishing and improving internal controls, evaluating their effectiveness, and truthfully disclosing the internal control evaluation report are the responsibilities of the Company's Board of Directors. The Audit Committee of the Board of Directors supervises the establishment and implementation of internal controls by the Board of Directors. The management team is responsible for organizing and leading the daily operations of the Company's internal controls. The Company's Board of Directors, directors, and senior management guarantee that the content of this report contains no false records, misleading statements, or material omissions, and they 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 guarantee the legality and compliance of business operations, the safety of assets, and the truthfulness and completeness of financial reports and related information, thereby improving operational efficiency and effectiveness and promoting the achievement of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the achievement of these objectives. Furthermore, due to changes in circumstances that may render internal controls inappropriate, or a decrease in the degree of compliance with control policies and procedures, there is a certain risk in inferring the future effectiveness of internal controls based on the results of the internal control evaluation.
II. Conclusion of Internal Control Evaluation
Based on the determination of material weaknesses in the Company's financial reporting internal controls, as of the internal control evaluation report base date, the Company has no material weaknesses in financial reporting internal controls. The Board of Directors believes that the Company has maintained effective financial reporting internal controls in all material aspects in accordance with the requirements of the Enterprise Internal Control Normative System and relevant regulations. Based on the determination of material weaknesses in the Company's non-financial reporting internal controls, as of the internal control evaluation report base date, the Company has found no material weaknesses in non-financial reporting internal controls. No factors have occurred from the internal control evaluation report base date to the date of issuance of the internal control evaluation report that affect the conclusion of the internal control effectiveness evaluation.
III. Internal Control Evaluation Work
(I) Scope of Internal Control Evaluation
The scope of the internal control evaluation covers various businesses and matters of the Company and its wholly-owned (controlled) subsidiaries. The businesses and matters included in the evaluation scope include: organizational structure, human resources, corporate culture, internal audit, fund activities, comprehensive budget, production and operation, procurement business, asset management, sales business, research and development activities, related-party transactions, external guarantees, raised funds, financial reporting, fixed asset management, subsidiary management, information disclosure, etc.
- Organizational Structure