Important Statement
According to the provisions of 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 Normative System"), combined with the internal control system of Sanyou Lianzhong Group Co., Ltd. (hereinafter referred to as the "Company"), we evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (hereinafter referred to as the "Internal Control Evaluation Report Benchmark Date").
The establishment, improvement, and effective implementation of internal controls, as well as the truthful disclosure of the internal control evaluation report, are the responsibilities 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 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 truthfulness, accuracy, and completeness of the report's content.
The objective of the Company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reporting and related information are true and complete, operational efficiency and effectiveness are improved, and the achievement of development strategies is promoted. Due to the inherent limitations of internal controls, they can only provide reasonable assurance of achieving the above objectives. Furthermore, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, thus inferring the future effectiveness of internal controls based on evaluation results carries certain risks.
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, there are no significant deficiencies in financial reporting internal controls. The board believes that the Company has maintained effective financial reporting internal controls in all material respects in accordance with the requirements of the Enterprise Internal Control Normative System and relevant 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 determined the main units, businesses, and matters included in the evaluation scope based on a risk-oriented principle, as well as high-risk areas. The main units included in the evaluation scope are the Company and its wholly-owned subsidiaries and holding subsidiaries, including:
- Mingguang Sanyou Electronics Co., Ltd.
- Ningbo Yongyou Electronics Co., Ltd.
- Hangzhou Qiyou Metal Materials Co., Ltd.
- Dangshan Sanyou Electric Appliances Co., Ltd.
- Mingguang Sanyou Electric Appliances Co., Ltd.
- Mingguang Sanyou Electric Technology Co., Ltd.
- Qingxian Zeming Langxi Electronic Devices Co., Ltd.
- Hebei Kairuisi Electronic Technology Co., Ltd.
- Dongguan Sanyou Automotive Electrical Appliances Co., Ltd.
- Dongguan Sanyou Intelligent Equipment Technology Co., Ltd.
- Dongguan Sanyou Precision Products Co., Ltd.
- Ningbo Yongyou Precision Products Co., Ltd.
- Mingguang Sanshun Intelligent Technology Co., Ltd.
- Sanyou Electrical Appliances [North America] 2011 Inc.
- Sanyou Electrical Appliances GmbH
- Sanyou Korea Co., Ltd.
- Sanyou Electrical Appliances (Vietnam) Co., Ltd.