2025 Annual Internal Control Self-Assessment Report
To all shareholders of Sanhe Tongfei Refrigeration Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other regulatory requirements for internal control (hereinafter referred to as the enterprise internal control normative system), combined with the internal control system and evaluation methods of Sanhe Tongfei Refrigeration Co., Ltd. (hereinafter referred to as "the Company"), we conducted a self-assessment of the effectiveness of the Company's internal control as of December 31, 2025 (the benchmark date for the internal control evaluation report).
1. Board of Directors' Statement
The Board of Directors and all directors of the Company guarantee that this report does not contain any false records, misleading statements, or significant omissions, and they bear individual and joint responsibility for the authenticity, accuracy, and completeness of the report's content. Establishing, improving, and effectively implementing internal control is the responsibility of the Board of Directors, while the management is responsible for organizing and leading the daily operation of internal control. The goal of the Company's internal control is to reasonably ensure that 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 Company achieves its development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving the above objectives. Additionally, changes in circumstances may render internal control inappropriate or reduce compliance with control policies and procedures, thus inferring the future effectiveness of internal control based on evaluation results carries certain risks.
2. Overall Situation of Internal Control Evaluation
The Board of Directors is the highest decision-making body for the Company's internal control evaluation, responsible for organizing, leading, and supervising the internal control evaluation work, approving rectification opinions for internal control deficiencies, and approving the external disclosure of the internal control self-assessment report. The Audit Committee is responsible for reviewing the Company's internal control, independently evaluating its effectiveness, and coordinating internal control audits and other related matters.
3. Internal Control Evaluation Work
(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 scope of this evaluation mainly covers the Company, wholly-owned subsidiaries, and branches. The total assets of the units included in the evaluation 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. The main businesses and matters included in the evaluation scope encompass governance structure, development strategy, human resources, social responsibility, corporate culture, capital activities, asset management, procurement, sales, research and development, financial reporting, performance evaluation, contract management, risk identification and response, etc. The high-risk areas of focus include capital activities, procurement management, sales management, asset management, and information systems. The aforementioned units, businesses, matters, and high-risk areas included in the evaluation cover the main aspects of the Company's operational management, with no significant omissions.