Jinhe Biotechnology: 2025 Internal Control Audit Report

Jinhe Biotechnology Co., Ltd.

2025

Internal Control Audit Report

Index Page Internal Control Audit Report 1-2 Internal Control Evaluation Report 1-9

Internal Control Audit Report

XYZH/2026XAAA5B0106

Gold River Biotechnology Co., Ltd. Gold River Biotechnology Co., Ltd. Board of Directors:

In accordance with the relevant requirements of the "Audit Guidelines for Enterprise Internal Control" and the Practice Standards of Chinese Certified Public Accountants, we audited the effectiveness of the internal control of the financial report of Jinhe Biotechnology Co., Ltd. (hereinafter referred to as Jinhe Biotechnology Co., Ltd.) on December 31, 2025.

1. Enterprise’s responsibility for internal control

In accordance with the provisions of the "Basic Standards for Enterprise Internal Control", "Guidelines for the Application of Enterprise Internal Control" and "Guidelines for the Evaluation of Enterprise Internal Control", it is the responsibility of the board of directors of Jinhe Biotech to establish, improve and effectively implement internal controls and evaluate their effectiveness.

2. Responsibilities of Certified Public Accountants

Our responsibility is to express an audit opinion on the effectiveness of internal control over financial reporting based on the implementation of the audit work, and to disclose the significant deficiencies in internal control over non-financial reporting that we have noticed.

3. Inherent limitations of internal control

Internal controls have inherent limitations and may fail to prevent and detect misstatements. In addition, since changes in circumstances may cause internal controls to become inappropriate, or the degree of compliance with control policies and procedures to be reduced, there is a certain risk in inferring the effectiveness of future internal controls based on the results of internal control audits.

Audit report (continued) XYZH/2026XAAA5B0106

Jinhe Biotechnology Co., Ltd.

4. Audit opinions on internal control over financial reporting

We believe that Jinhe Biological Co., Ltd. maintained effective internal control over financial reporting in all material aspects in accordance with the "Basic Standards for Corporate Internal Control" and relevant regulations on December 31, 2025.

ShineWing Certified Public Accountants LLP (Special General Partnership) Chinese Certified Public Accountant: Huo Huafu

Chinese Certified Public Accountant: Wang Leilei

Beijing, China April 27, 2026

Jinhe Biotechnology Co., Ltd. About the company’s 2025 internal control evaluation report

Jinhe Biotechnology Co., Ltd.

2025 Internal Control Evaluation Report

All shareholders of Jinhe Biotechnology Co., Ltd.:

In accordance with the provisions of the "Basic Standards for Enterprise Internal Control" and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the Enterprise Internal Control Standard System), combined with the internal control system and evaluation methods of Jinhe Biotechnology Co., Ltd. (hereinafter referred to as the "Company"), and on the basis of internal control and supervision, we evaluated the effectiveness of the company's internal control as of December 31, 2025 (the base date of the internal control evaluation report).

1. Important statement

In accordance with the provisions of the enterprise's internal control normative system, it is the responsibility of the company's board of directors to establish, improve and effectively implement internal control, evaluate its effectiveness, and truthfully disclose the internal control evaluation report. The audit committee supervises the establishment and implementation of internal controls by the board of directors, and the management is responsible for organizing and leading the daily operation of the enterprise's internal controls. The company's board of directors, audit committee, directors and senior management personnel guarantee that there are no false records, misleading statements or major omissions in this report, and bear individual and joint legal responsibility for the authenticity, accuracy and completeness of the report content.

The goal of the company's internal control is to reasonably ensure legal compliance of operation and management, asset safety, authenticity and completeness of financial reports and related information, improve operating efficiency and effectiveness, and promote the realization of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving the above objectives. In addition, since changes in circumstances may cause internal controls to become inappropriate, or the degree of compliance with control policies and procedures to be reduced, there is a certain risk in inferring the effectiveness of future internal controls based on the results of internal control evaluations.

2. Conclusion of internal control evaluation

According to the identification of major deficiencies in the company's internal control over financial reporting, there were no major deficiencies in internal control over financial reporting on the base date of the internal control evaluation report. The board of directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the corporate internal control standard system and relevant regulations. According to the identification of major deficiencies in the company's internal control over non-financial reporting, the company found no major deficiencies in internal control over non-financial reporting on the base date of the internal control evaluation report. There are no factors that affect the conclusion of the internal control effectiveness evaluation between the base date of the internal control evaluation report and the issuance date of the internal control evaluation report.

3. Internal control evaluation work

(1) Scope of internal control evaluation

Jinhe Biotechnology Co., Ltd. About the company’s 2025 internal control evaluation report

The company determines the main units, main businesses and matters, and high-risk areas included in the evaluation scope in accordance with the risk-oriented principle. The main units included in the evaluation scope include: the company, wholly-owned and holding subsidiaries. The total assets of the units included in the evaluation scope account for 100% of the total assets of the company's consolidated financial statements, and the total operating income accounts for 100% of the total operating income of the company's consolidated financial statements. The main businesses and matters included in the evaluation scope include: funds, procurement, assets, sales, production, financial management, comprehensive budget, contract management, information system construction, internal and external information and communication, internal supervision, etc.

High-risk areas of focus mainly include: capital management, financing investment, asset management, procurement and payment, production and warehousing, R&D management, sales collection, financial report management, personnel management of key positions, etc. The above-mentioned businesses and matters included in the evaluation scope basically cover the main aspects of the company's operation and management, and there are no major omissions.

(2) Objectives of internal control system

1. Establish and improve the internal organizational structure that meets the company's management requirements, form a scientific decision-making mechanism, execution mechanism and supervision mechanism to ensure the realization of the company's operation and management objectives.

2. Establish an effective risk control system, strengthen risk management, and ensure the normal and orderly operation of the company's various business activities.

3. Establish a good internal control environment of the company, plug loopholes, eliminate hidden dangers, prevent and promptly discover and correct errors and fraud, and protect the safety and integrity of the company's assets.

4. Standardize the company's accounting behavior, ensure the authenticity and completeness of accounting materials, and improve the quality of accounting information.

5. Ensure the implementation of relevant national laws and regulations and the company's internal rules and regulations.

(3) Principles for the company to establish internal control

1. Principle of comprehensiveness

Internal control runs through the entire process of decision-making, execution, and supervision, covering all businesses, matters, and positions of the company, achieving full-process, full-scope, and full-person control.

2. Principle of importance

On the basis of comprehensive control, we will focus on high-risk areas, important businesses, and key positions, and implement key controls and special supervision.

3. Principle of checks and balances

Reasonably set up job responsibilities, authorities, and processes to ensure that business approval, execution, recording, and supervision are separated, restricted, and supervised by each other.

4. Principle of adaptability

Jinhe Biotechnology Co., Ltd. About the company’s 2025 internal control evaluation report

Internal control is adapted to the company's operating scale, business scope, risk level, and management requirements, and is adjusted and improved in a timely manner as the external environment and business changes.

5. Cost-benefit principle

Weigh control costs and expected benefits, achieve effective control at reasonable costs, and improve management efficiency and operating results.

6. Principle of legality

Internal control complies with national laws, regulations, regulatory requirements and the company's articles of association to ensure legal compliance in operation and management.

(4) Elements of internal control of the company

Based on the basic concept of standardized operation, we actively strive to create a good control environment, which is mainly reflected in the following aspects:

1. Communication and implementation of integrity and moral values

Integrity and ethical values are important components of the control environment and influence the design and operation of a company's important business processes. The Company has always attached great importance to the creation and maintenance of this atmosphere, and has established an executive evaluation management system. Managers at all levels set an example by setting an example and establishing a series of internal control systems such as the "Employee Code of Conduct", "Employee Work Manual", and "Confidentiality Management System", and have effectively implemented the contents of the system.

2. Pay attention to competence

Company management attaches great importance to the setting of the level of professional competence required for a specific job position, as well as the requirements for the knowledge and abilities necessary to achieve that level. As of December 31, 2025, the company has a total of 2,713 employees, including 104 graduate students or above, 521 undergraduates, 816 junior college students, and a total of 1,272 junior college students or below. Based on the company's employee turnover and employment needs, there will be 877 new employees in 2025 people, and optimized the workforce. The company also carried out various forms of post-training education for different positions based on actual work needs, improving employees' business capabilities and job operation skills, laying a solid foundation for the company's development and contributing to social employment.

3. Management philosophy and business style

The company's management has formed a management team with the chairman as the core. This team has mature industry technology and management experience. Through continuous research and development and innovation, it has been promoted and applied, making the company's management level leading the industry. The company's decision-makers closely integrate the United States' cutting-edge scientific research and market advantages in the world, and continuously improve and innovate in the field of production technology, providing technical support and guarantee for the company's sustainable development. In addition, the company Jinhe Biotechnology Co., Ltd. regarding the company’s 2025 internal control evaluation report

Through the introduction of basic personnel and the reasonable allocation of human resources, we have formed our own scientific research team and a stable workforce, providing technical support for the sustainable development of the enterprise.

The "Jinhe" trademark held by the company is a "well-known trademark in China". The company has always attached great importance to the construction of product quality system and brand promotion strategy, and has always implemented the business purpose of "survive by quality, develop by science and technology". The company has passed the national veterinary drug production GMP, US FDA, European CEP, customs AEO and other certifications and acceptances for many times, and has accepted quality audits from many major international customers.

In terms of safety work, the company has always adhered to the basic policy of "safety first, prevention first, comprehensive management", firmly established the idea of ​​"safety responsibility is more important than Mount Tai", conscientiously implemented various rules and regulations, implemented the main responsibilities of personnel at all levels, strengthened on-site supervision and inspection of safe production, and actively organized employees to conduct safety production training in accordance with relevant regulations. The company always regards safety management in production and operation as a top priority, promptly handles and rectifies abnormal situations in each link, further improves the safety management system and emergency plans, strengthens risk investigation and process control, and ensures safe and stable operations.

The state and relevant government departments have paid increasing attention to environmental protection work. In line with the principle of "responsible to society and enterprises", the company has completed the rectification and improvement of environmental protection projects in recent years, introduced advanced exhaust gas treatment systems, and completely solved the problem of odor emissions from fermentation enterprises; in order to meet the new national standards for wastewater discharge in the fermentation industry, the company has continued to increase investment in environmental protection. In order to effectively treat production wastewater and achieve stable and up-to-standard discharge, and to make the sewage treatment system more perfect, the company has done a lot of renovation projects in environmental governance; in order to further improve the environmental sewage treatment capacity and the scale of water resource recycling and utilization standards, and at the same time meet the growing demand for sewage treatment and water resource recycling of enterprises in the park, 2025 In July 2020, Jinhe Environmental Protection, a subsidiary of the company, is expected to invest 158.4238 million yuan to implement the sewage treatment capacity expansion and water resource recycling and utilization standard expansion project. The construction of this project will further enhance the company's comprehensive strength and improve the company's future profitability.

In recent years, the company has provided financial and material support in the construction of corporate informatization, and has successively built the "Kingdee Collaborative Office OA Platform", "Siemens S700 Fermentation Control System", "Production Automatic Control System Construction", "Kingdee ERP" System", "AiChongYi APP", "Xinfutong Payroll System", "Jinhe Donghui Intelligent Warehouse", etc., and also built a key informatization laboratory. In order to ensure the safe and stable operation of these projects, the company has also established an industrial information security control firewall.

Adhering to the corporate spirit of credibility, emotion, dedication and innovation, Jinhe Biotechnology will lead the overall situation with a scientific outlook on development and implement industry-related diversification within its own advantages. Adhere to Chairman Wang Dongxiao’s core values ​​of “benefiting the public, benefiting people’s livelihood, and being a conscientious national enterprise”, giving back to the society and investors with excellent performance, and realizing the grand vision of “creating the world’s leading animal health products company”.

Jinhe Biotechnology Co., Ltd. About the company’s 2025 internal control evaluation report

4. Distribution of powers and responsibilities

The Company strictly adheres to the principles of equal rights and responsibilities, clear authorization, mutual checks and balances, and traceable responsibilities, and establishes and implements a standardized power and responsibility distribution system to ensure that various economic activities and business management activities are carried out within the scope of authorization, to achieve mutual separation and mutual restriction of decision-making, execution, and supervision, and to provide organizational and institutional guarantees for the effective operation of internal control.

The principal person in charge of the unit shall bear the first responsibility for the construction, operation and evaluation of internal control. Leaders in charge and department heads bear direct management responsibility for the areas in charge and the effectiveness of the department’s internal controls, and are responsible for system implementation, risk prevention and control, and problem rectification. Personnel at each position bear direct responsibility for the authenticity, compliance, and integrity of the business they handle, and perform their duties in strict accordance with the system and procedures. The internal control and internal audit department is responsible for supervising and evaluating the objectivity and fairness of internal control evaluations, and promptly prompts and supervises rectifications when problems are discovered.

5. Human resources policies and practices

The company has established and implemented a more scientific personnel management system such as recruitment, training, job rotation, assessment, rewards and punishments, promotion and elimination, and hired enough personnel to enable them to complete the assigned tasks. The company's rapid growth is inseparable from the wisdom of outstanding talents. The company has always adhered to the business purpose of "people-oriented, technological innovation", focused on business development and talent development, and at the same time improved relevant systems, including: human resources management system, personnel recruitment and promotion management system, labor contract management system, etc. It has made relevant regulations on employee recruitment, training, salary and remuneration, performance appraisal, internal transfer, job promotion, welfare guarantee, etc., has improved all aspects of human resources, and established a relatively complete human resources management system.

6. Social responsibility

The company actively fulfills its social responsibilities, insists on operating with integrity, pays taxes in accordance with the law, protects the legitimate rights and interests of employees, attaches great importance to production safety, occupational health and environmental protection, and is committed to achieving coordinated and sustainable development of the company, employees, society and the environment.

The company respects and safeguards the legitimate rights and interests of employees, standardizes employment management, strengthens employee training and career development, and creates harmonious and stable labor relations. In the process of operation, we strictly abide by relevant national laws, regulations and industry norms, take the initiative to assume social responsibilities, actively practice social ethics and business ethics, and establish a responsible corporate image.

In accordance with the work arrangements of the superior party committee and labor union, and combined with the company's business strategy, the company promotes employment through development, continuously adds jobs, and continues to promote the development of the company and the social economy. At the same time, the company distributes relief funds and bursaries to village-enterprise joint-construction destitute households, retired employees, and destitute employees, and donates to local middle schools to help high-quality development of education.

Jinhe Biotechnology Co., Ltd. About the company’s 2025 internal control evaluation report

(5) Risk assessment process

In the process of formulating development strategic goals, the company cooperates with universities, hires industry experts, and organizes company executives to analyze and evaluate the company's strategy, actively faces and responds to threatening risks and opportunistic risks that are in line with the company's strategic development direction, and combines the company's risk preference and risk tolerance to reasonably ensure that various risks that affect strategic goals are controlled within the tolerable range, providing effective guarantee for the realization of the company's overall strategic goals.

(6) Control activities

In accordance with the requirements of the "Basic Standards for Enterprise Internal Control" regarding control activities, the Company has formulated and revised relevant internal control management systems for financial activities, procurement business, asset management, sales business, research and development, engineering projects, guarantee business, business outsourcing, financial reporting, comprehensive budgeting, contract management, senior management code of conduct, etc., and strictly controls all business links. The company's audit center combines the basic norms of corporate internal control, relevant laws and regulations, and the company's internal management system to conduct regular audits on the company's investment and financing, capital operations, procurement and warehousing, low-value consumables, creditor's rights and debts, fixed assets, cost management, expenses and other businesses, avoiding the company's operating risks from the internal control link and the system level.

1. Incompatible job separation control

When setting up the organizational structure and positions, the company comprehensively and systematically analyzed and sorted out the company's business processes, implemented corresponding separation measures for positions prone to fraud risks, and formed a working mechanism in which each performs its own duties and restricts each other.

2. Authorization approval control

The company's latest revised "Articles of Association" clearly divides the responsibilities of shareholders and shareholders' meetings, directors and board of directors, and management, and formulates effective rules of procedure. Each of them performs its own duties, is independent from each other, supervises each other, and promotes each other. The company has implemented detailed institutional constraints on the authorization procedures for various general transactions, related transactions and venture capital projects with different amounts and natures. According to the "Subsidiary Management Measures", the authority and process of authorization, approval and control of its wholly-owned and controlled subsidiaries are clarified in accordance with relevant regulations to ensure the company's operational security; in accordance with the "Contract Management Measures", the company carries out clear authorization management for the contract formulation, contract approval and signing, and contract performance of various contracts, effectively preventing internal and external risks in contract management.

3. Accounting system control

The company strictly implements the "Accounting Law of the People's Republic of China" formulated and promulgated by the Standing Committee of the National People's Congress, strictly abides by national accounting standards, pays close attention to the latest fiscal policies and relevant regulations of listed companies to conduct basic accounting management work, improves financial report preparation, mergers, internal audits, external audits, and Pijinhe Biotechnology Co., Ltd. About the company's 2025 internal control evaluation report

It has implemented specific and strict work processes, and established a relatively sound accounting system management and control system to ensure the authenticity, completeness and usefulness of financial reports for decision-making.

4. Property protection control

The company has formulated relevant systems for fixed asset management to standardize the purchase, daily management, use and disposal of fixed assets and clarify work processes and operating rules. The fixed assets management department and the finance department conduct regular asset inventories to ensure that the accounts are consistent. The company regularly handles scrapped assets in accordance with asset disposal procedures, and actively strengthens the management of fixed assets, accounts receivable, inventory, etc. to ensure property safety.

5. Budget control

The company has established a comprehensive budget management system, designed and implemented annual financial budget and mid-year adjustment budget preparation work processes suitable for the company's actual conditions, and strengthened the supervision of the company's budget work through on-site surveys, budget interviews, monthly tracking and other means, and dynamically monitored the implementation of the financial budget.

6. Operation analysis and control

By strengthening the collection, analysis and research of information on major product markets and competitors, the company revise its strategies and action plans according to changing trends, actively avoid risks, reduce losses caused by risks, and increase profits.

7. Performance evaluation control

The Remuneration and Appraisal Committee of the company's board of directors authorizes the Group's Human Resources Management Center to formulate the remuneration assessment methods for the board of directors and operating executives, and conducts director and senior management evaluations on a quarterly basis; the company's planning and evaluation department formulates production and operation assessment methods and conducts assessments for all company departments on a monthly basis; each department organizes and implements employee assessments in its own department in accordance with the employee assessment work plan to provide a basis for personnel recruitment, employee training, job promotions, salary promotions and other work. At the beginning of each year, the chairman of the head office signs a responsibility letter for business goals with the general managers of each company. The general manager of the head office signs a responsibility letter for production and operation goals with the heads of each production auxiliary department. The deputy general manager in charge of safety signs a safety production responsibility letter with the heads of each production auxiliary department. Annual performance and safety management evaluations of each company are conducted based on annual task goals and completion status.

8. Supervision of control

The company's board of directors has an audit committee. The audit committee supervises the operations of the board of directors and the performance of duties by board members and senior managers of the company. It always pays attention to risky behaviors that hinder the realization of the company's business goals, threatens the security of the company's assets, conceals the truth of the company's information, and violates laws and regulations, and reminds them to make corrections and improvements. Assist the board of directors in reviewing the establishment and improvement of the company's comprehensive risk management and internal control systems, supervise the effective implementation of internal control and internal control evaluation, coordinate internal control inspections and audits, and conduct the company's annual "Internal Control Evaluation" Jinhe Biotechnology Co., Ltd. About the company's 2025 internal control evaluation report

Price Report" for review. In order to ensure the independent and effective operation of the company's internal audit work, the company has established an audit center and equipped with full-time internal auditors, who are responsible for the supervision, inspection and other audit activities of internal control, and independently exercise audit supervision powers.

4. Basis for internal control evaluation and identification standards for internal control deficiencies

The company's board of directors has studied and determined the specific identification standards for internal control defects applicable to the company based on the identification requirements of major defects, important defects and general defects in the corporate internal control standard system, combined with factors such as company size, industry characteristics, risk preference and risk tolerance, and has remained consistent with previous years. The standards for identifying internal control deficiencies determined by the company are as follows:

1. Standards for identifying deficiencies in internal control over financial reporting

The quantitative standards for the evaluation of internal control deficiencies over financial reporting determined by the company are as follows:

Items Quantitative standards for major defects Quantitative standards for major defects Quantitative standards for general defects 0.2% of total operating income ≤ misstatement Misstatement < total operating income Misstatement of operating income

0.5%≤misstatement＜0.2% of 0.5% of total operating income

5% of total net profit ≤ 2% of total net profit ≤ misstatement < net misstatement < net profit misstatement of total net profit

Misstatement 5% of total profit 2%

0.3% of total assets ≤ 0.1% of total assets ≤ misstatement < capital misstatement < total assets misstatement of total assets

Misstatement 0.3% of total output 0.1%

0.1% of total owners’ equity ≤ misstatement of total owners’ equity < misstatement of total owners’ equity

0.3% ≤ misstatement. Report < 0.3% of the total owner’s equity. 0.1% of the total amount.

The qualitative standards for the evaluation of internal control deficiencies over financial reporting determined by the company are as follows:

Nature of defects Qualitative standards

Fraudulent conduct by directors, audit committee members and senior managers; external audit found major flaws in the current financial report and major misstatements, but the company failed to discover the misstatements during operation; the company corrected the published financial reports; the company's audit committee and internal audit agency's supervision of internal controls was ineffective.

An internal control deficiency, alone or together with other deficiencies, has a reasonable possibility of preventing important deficiencies from being timely prevented or from detecting and correcting misstatements in the financial statements that, although not reaching or exceeding the materiality level, should still attract the attention of the board of directors and management.

General deficiencies are internal control deficiencies that do not constitute major deficiencies and important deficiencies.

According to the above identification standards, the company had no major defects or important defects in internal control during the reporting period.

2. Standards for identifying deficiencies in internal control over non-financial reporting

The quantitative standards for the evaluation of non-financial reporting internal control deficiencies determined by the company are as follows:

Items Quantitative Standards for Major Defects Quantitative Standards for Important Defects Quantitative Standards for General Defects

3 million yuan (including 3 million yuan)-1,000

The amount of direct property loss is 10 million yuan or more and less than 3 million yuan.

Ten thousand yuan

Jinhe Biotechnology Co., Ltd. The company’s internal control evaluation report for 2025 has been officially disclosed to the outside world or has been punished by national government departments. It has received provincial (including provincial) disclosures with a major negative impact and caused a negative impact on the company, but has not caused a negative impact on the company. It has been punished by government departments but has not

Negative impact on the company

The qualitative standards for the evaluation of non-financial reporting internal control deficiencies determined by the company are as follows:

Nature of defects Qualitative standards

Major defects: Serious violations of national laws and regulations.

The results of internal control evaluation, especially major or important deficiencies, have not been rectified in a timely manner; important internal deficiencies in information disclosure

Failure of control, resulting in the company being publicly condemned by regulatory authorities; other situations that have a significant impact on the company.

General defects include other control defects other than major defects and important defects.

According to the above identification standards, the company had no major defects or important defects in internal control during the reporting period.

5. Description of other major matters related to internal control

The company has no other statements on major matters related to internal control.

6. The company’s evaluation of internal control

The company's board of directors believes that the company has formulated a reasonable, scientific, complete and effective internal control mechanism and has taken effective measures to ensure that the internal control system is strictly implemented. The company's internal control system plays an important role in strengthening business management, controlling operating risks, standardizing financial accounting behavior, improving the quality of accounting information, plugging loopholes, preventing fraud, and preventing cases. It effectively guarantees the safety and integrity of the company's property, safeguards the rights and interests of customers, investors, shareholders and the company's relevant stakeholders, enhances the company's credibility and market competitiveness, and achieves the company's internal control goals without major defects.

Board of Directors of Jinhe Biotechnology Co., Ltd.

April 27, 2026