2025 Internal Control Evaluation Report

Company code: 688553 Company abbreviation: Huiyu Pharmaceutical Sichuan Huiyu Pharmaceutical Co., Ltd.

Annual internal control evaluation report

2025

All shareholders of Sichuan Huiyu Pharmaceutical 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 company's (hereinafter referred to as the company's) internal control system and evaluation methods, and on the basis of daily supervision and special supervision of internal control, we evaluated the effectiveness of the company's internal control on 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 Supervisory Board supervises the establishment and implementation of internal controls by the Board of Directors. Managers are responsible for organizing and leading the daily operation of the enterprise's internal controls. The company's board of directors, board of supervisors, directors, supervisors 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

1. Whether the company has any major deficiencies in the internal control of financial reporting on the base date of the internal control evaluation report

□Yes √No

2. Conclusion of the evaluation of internal control over financial reporting

√Valid □Invalid

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.

3. Whether significant deficiencies in internal control over non-financial reporting have been discovered

□Yes √No

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.

4. Factors that affect the conclusion of the internal control effectiveness evaluation from the base date of the internal control evaluation report to the issuance date of the internal control evaluation report

□Applicable √Not applicable

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.

5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting

√Yes □No

6. Is the disclosure of major deficiencies in non-financial reporting internal control in the internal control audit report consistent with the disclosure in the company’s internal control evaluation report √ Yes □ No

3. Internal control evaluation work

(1). Scope of internal control evaluation

The company determines the main units, businesses and matters as well as high-risk areas included in the evaluation scope in accordance with the risk-oriented principle.

1. The main units included in the evaluation scope include: Sichuan Huiyu Pharmaceutical Co., Ltd. and its companies within the scope of consolidation.

2. Proportion of units included in the evaluation scope:

Indicator Proportion (%) Ratio of the total assets of the units included in the evaluation scope to the total assets of the company's consolidated financial statements 100 Ratio of the total operating income of the units included in the evaluation scope to the total operating income of the company's consolidated financial statements 100

3. The main businesses and matters included in the evaluation scope include:

The businesses included in the evaluation scope include the company's R&D projects and the production and sales of core products; the matters included in the evaluation scope include governance structure, organizational structure, development strategy, human resources, financial activities, procurement and warehousing, contract management, production management, sales business, R&D activities, investment activities, internal and external information and communication, etc.

4. High-risk areas of focus include:

Sales business, production operations, procurement business, R&D activities, investment activities, etc.

5. The above-mentioned units, businesses, matters and high-risk areas included in the evaluation scope cover the main aspects of the company’s operation and management. Are there any major omissions?

□Yes √No

6. Whether statutory exemptions exist

□Yes √No

7. Other instructions

None.

(2). Basis for internal control evaluation and identification standards for internal control deficiencies

The company organizes and carries out internal control evaluation work in accordance with the enterprise's internal control normative system and other internal control supervision requirements.

1. Whether the specific identification standards for internal control deficiencies have been adjusted from previous years

□Yes √No

The company's board of directors distinguished between financial reporting internal control and non-financial reporting internal control based on the company's internal control standard system's identification requirements for major defects, important defects and general defects, combined with company size, industry characteristics, risk preference and risk tolerance and other factors, and studied and determined the specific identification standards for internal control defects applicable to the company, which are consistent with previous years.

2. 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:

Indicator name Quantitative standard for major defects Quantitative standard for important defects Quantitative standard for general defects Main business income/asset Misstatement amount ≥ Main business income Main business income/total assets Misstatement amount <main business income/total assets/5% of total assets 0.5% ≤ misstatement amount <main business/0.5% of total assets

5% of business income/total assets

Total pre-tax profit Misstatement amount ≥ Total pre-tax profit 0.5% of total pre-tax profit ≤ Misstatement amount < 5% of total pre-tax profit Misstatement amount < 0.5% of total pre-tax profit

5% of

Description:

None.

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

Major deficiencies (1) Any degree of fraud in the company’s management is discovered;

(2) Defects that affect earnings trends;

(3) Defects that affect the total amount of related-party transactions exceeding the amount of related-party transactions approved by shareholders; (4) The material misstatement discovered by the external audit was not first discovered by the company;

(5) Other defects that may affect the correct judgment of report users.

Important defects (1) Failure to select and apply accounting policies in accordance with generally accepted accounting principles;

(2) No corresponding control mechanism has been established or implemented for the accounting processing of irregular or special transactions, and there is no corresponding compensatory control;

(3) There are one or more deficiencies in the control of the period-end financial reporting process and there is no reasonable guarantee that the prepared financial statements will achieve true and accurate goals;

(4) Other defects that have a significant impact on the company's financial reports.

General deficiencies include other control deficiencies related to financial reporting other than the above-mentioned major deficiencies and important deficiencies. Description:

None.

3. 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:

Indicator name Quantitative standard for major defects Quantitative standard for important defects Quantitative standard for general defects Main business income/asset Misstatement amount ≥ Main business income Main business income/total assets Misstatement amount <main business income/total assets/1% of total assets 0.1% ≤ misstatement amount <main business/0.1% of total assets

1% of business income/total assets

Total pre-tax profit Misstated amount ≥ Total pre-tax profit 1% of total pre-tax profit ≤ Misstated amount < 10% of total pre-tax profit Misstated amount < 1% of total pre-tax profit

10%

Description:

None.

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 deficiencies (1) Major internal control deficiencies that have been discovered and reported to management have not been corrected after a reasonable period of time;

(2) The control environment is ineffective;

(3) Serious violations of regulations and disciplines, subject to penalties and warnings; (4) Negative media reports, making it difficult to restore reputation; (5) Major mistakes caused by decision-making procedures;

(6) Other defects that have a significant impact on the company. Important deficiencies: (1) Failure to establish anti-fraud procedures and control measures; (2) Lack of effective internal management and supervision mechanisms; (3) General errors caused by decision-making procedures; (4) Serious loss of personnel in key positions;

(5) Other defects that have an important impact on the company. General defects include other control defects other than the above-mentioned major defects and important defects. Description:

None.

(3). Identification and rectification of internal control deficiencies

1. Identification and rectification of internal control deficiencies over financial reporting

1.1. Major defects

Did the company have any major deficiencies in internal control over financial reporting during the reporting period Yes √ No

1.2. Important defects

Does the company have any important deficiencies in internal control over financial reporting during the reporting period? Yes √ No

1.3. General defects

None.

1.4. After the above rectification, on the base date of the internal control evaluation report, does the company have any major deficiencies in the internal control of financial reporting that have not been rectified?

□Yes √No

1.5. After the above rectification, on the base date of the internal control evaluation report, does the company have any important deficiencies in the internal control of financial reporting that have not been rectified?

□Yes √No

2. Identification and rectification of internal control deficiencies in non-financial reporting

2.1. Major defects

Did the company discover any major deficiencies in non-financial reporting internal control during the reporting period Yes √ No

2.2. Important flaws

Did the company discover any important deficiencies in non-financial reporting internal control during the reporting period Yes √ No

2.3. General defects

None.

2.4. After the above rectifications, on the base date of the internal control evaluation report, has the company discovered any major deficiencies in the internal control of non-financial reporting that have not yet been rectified?

□Yes √No

2.5. After the above rectifications, on the base date of the internal control evaluation report, has the company discovered any important deficiencies in the internal control of non-financial reporting that have not yet been rectified?

□Yes √No

4. Description of other major matters related to internal control

1. Rectification of internal control deficiencies in the previous year

□Applicable √Not applicable

2. Internal control operation status this year and improvement directions for the next year

√Applicable □Not applicable

During the reporting period, the company established an internal control system for the businesses and matters included in the evaluation scope and implemented it effectively. No major or important defects in financial reports and non-financial reports were found. In 2026, the company will continue to follow the requirements of the enterprise's internal control standard system, continue to improve and perfect internal control systems and processes based on the company's business development and management needs, standardize implementation, strengthen supervision, optimize the internal control environment, improve internal control management levels, and ensure the healthy and sustainable development of the company.

3. Description of other significant matters

□Applicable √Not applicable

Chairman (authorized by the board of directors): Ding Zhao Sichuan Huiyu Pharmaceutical Co., Ltd.

April 23, 2026