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 and evaluation methods of AVIC Chengfei Industry Co., Ltd. (hereinafter referred to as the "Company"), we evaluated the effectiveness of the Company's internal controls as of December 31, 2025 (the benchmark date for the internal control evaluation report).
The establishment, improvement, and effective implementation of internal controls, as well as the evaluation of their effectiveness and truthful disclosure of the internal control evaluation report, are the responsibilities of the Company's board of directors. The audit committee exercises the supervisory powers of the supervisory board as stipulated in the Company Law, responsible for overseeing the establishment and implementation of internal controls by the board of directors, while the management is responsible for organizing and leading the daily operation of internal controls. The board of directors, audit committee, and directors and senior management guarantee 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 authenticity, accuracy, and completeness of the report's content.
The objective of the Company's internal control 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 the development strategy 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, making it risky to infer the future effectiveness of internal controls based on evaluation results.
Internal Control Evaluation Conclusion
According to the identification of significant deficiencies in internal controls over financial reporting, as of the benchmark date of the internal control evaluation report, there are no significant deficiencies in internal controls over financial reporting. The board of directors 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 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 date of issuance 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 to be 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: AVIC Chengfei Industry Co., Ltd. (headquarters), Chengdu Aircraft Industry (Group) Co., Ltd. (headquarters), AVIC Guizhou Aircraft Co., Ltd., High-end Aviation Equipment Technology Innovation Center (Sichuan) Co., Ltd., Changsha 5712 Aircraft Industry Co., Ltd., AVIC Chengfei Civil Aircraft Co., Ltd., AVIC Electronic Measurement Instruments (Xi'an) Co., Ltd., Chengdu Chengfei Conference Service Co., Ltd., Chengdu Chengfei Aviation Industry Development Co., Ltd., Shijiazhuang Huayan Transportation Technology Co., Ltd., Shanghai Yaohua Weighing System Co., Ltd., and Hanzhong 101 Aviation Electronic Equipment Co., Ltd.