Nantong Taihe Chemical Co., Ltd.
2025 Annual Internal Control Self-Assessment Report
To all shareholders of Nantong Taihe Chemical Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines, as well as other internal control requirements (hereinafter referred to as the "Enterprise Internal Control Normative System"), and based on the internal control system and evaluation methods of Nantong Taihe Chemical Co., Ltd. (hereinafter referred to as the "Company"), we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the benchmark date for the internal control evaluation report):
1. Important Statement
According to the provisions of the Company's internal control normative system, establishing, improving, and effectively implementing internal controls, 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 of directors. The management is responsible for organizing and leading the daily operation of the Company's internal controls. The Company's board of directors, audit committee, and 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 reports and related information are true and complete, operational efficiency and effectiveness are improved, and development strategies are 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.
2. Internal Control Evaluation Conclusion
Based on the identification of significant deficiencies in financial reporting internal controls, as of the benchmark date of the internal control evaluation report, there are no significant deficiencies in financial reporting internal controls. The board of directors 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 related regulations. Based on the identification of significant deficiencies in non-financial reporting internal controls, as of the benchmark date of the internal control evaluation report, 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 benchmark date of the internal control evaluation report and the issuance date of the internal control evaluation report.
3. Internal Control Evaluation Work Situation
(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 evaluation scope includes the Company and its directly or indirectly controlled subsidiaries. The total assets of the units included in the evaluation scope account for 100% of the total assets in the Company's consolidated financial statements, and the total operating income accounts for 100% of the total operating income in the Company's consolidated financial statements. The main businesses and matters included in the evaluation scope are as follows: