Important Statement
According to the regulations of the internal control normative system, establishing, improving, and effectively implementing internal controls, as well as 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. Management is responsible for organizing and leading the daily operation of the company's internal controls. The board of directors, audit committee, and senior management ensure that the 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. The objective of the company's internal controls is to reasonably ensure legal compliance in operations, asset security, and the authenticity and completeness of financial reports and related information, thereby improving operational efficiency and effectiveness and promoting the achievement of development strategies. 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 adherence to control policies and procedures, making it risky to infer the future effectiveness of internal controls based on evaluation results.
Internal Control Evaluation Conclusion
Based on the identification of significant defects in internal controls over financial reporting, there are no significant defects in financial reporting internal controls as of the evaluation report's reference date. The board believes that the company has maintained effective financial reporting internal controls in all material respects in accordance with the requirements of the internal control normative system and relevant regulations.
According to the identification of significant defects in non-financial reporting internal controls, the company has not identified any significant defects in non-financial reporting internal controls as of the evaluation report's reference date. No factors affecting the evaluation conclusion of internal control effectiveness have occurred between the reference 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 scope of evaluation based on a risk-oriented principle, including major units, businesses, and high-risk areas. 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 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 are as follows:
- Governance Structure
The company has established a corporate governance structure consisting of the shareholders' meeting, board of directors, and management in accordance with the requirements of the Company Law of the People's Republic of China and the Securities Law of the People's Republic of China. The shareholders' meeting is the highest authority of the company, and shareholders enjoy equal status and bear corresponding obligations according to the Articles of Association. The board of directors is accountable to the shareholders' meeting and is the decision-making body of the company, consisting of 9 directors, including 3 independent directors and 1 employee representative director. The company continuously deepens the diversification and independence of the board to provide a solid governance guarantee for high-quality development. The board has established a strategy committee, nomination committee, remuneration and assessment committee, and audit committee, all of which are accountable to the board; management is responsible for organizing the implementation of resolutions from the shareholders' meeting and board of directors and presiding over the company's production and operational management.