Important Statement
According to the requirements of the enterprise 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 senior management ensure that the contents of this report do not contain any false records, misleading statements, or significant omissions, and bear 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 management is legal and compliant, assets are secure, financial reports and related information are true and complete, operational efficiency and effectiveness are improved, and development strategies are promoted. Due to inherent limitations in internal controls, they can only provide reasonable assurance of achieving these objectives. Additionally, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, making it risky to infer future internal control effectiveness based on evaluation results. The company establishes and implements internal controls adhering to the principles of comprehensiveness, materiality, checks and balances, adaptability, and cost-effectiveness, considering the following basic elements: internal environment, control activities, risk assessment, information and communication, and internal supervision.
Internal Control Evaluation Conclusion
Based on the identification of significant deficiencies in internal controls over financial reporting, 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 internal controls over financial reporting in all material respects in accordance with the requirements of the enterprise 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.
Company Internal Control Work Situation
Internal Control Evaluation Scope
The company determines the main units, businesses, and high-risk areas included in the evaluation scope based on a risk-oriented principle. The main units included in the evaluation scope comprise the company and its subsidiaries, with the total assets of the included units accounting for 100% of the total assets in the consolidated financial statements, and the total operating income accounting for 100% of the total operating income in the consolidated financial statements. The high-risk areas of focus mainly include: sales and collection control, procurement control, asset control, financing and investment control, related party transaction control, fundraising usage control, and internal control over financial report management. The evaluation scope covers all economic activities and related positions within the company, focusing on key control points in the business processing process, implemented at all stages of decision-making, execution, supervision, and management. The units, businesses, and high-risk areas included in the evaluation scope cover the main aspects of the company's operational management, with no significant omissions.