Board of Directors' Special Report on Material Weaknesses in Non-Financial Report Internal Controls Identified by the Accounting Firm
Giant Wheel Intelligent Equipment Co., Ltd. (hereinafter referred to as "the Company," "Giant Wheel Intelligent") engaged Uniteal & Qinghai Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Uniteal & Qinghai") to audit the Company's internal controls for the year 2025. Uniteal & Qinghai issued the "Internal Control Audit Report of Giant Wheel Intelligent Equipment Co., Ltd." (Certificate No. Youzhen Special Audit [2026] No. 0244), stating that the Company maintained effective internal controls over financial reporting in all material aspects as of December 31, 2025, in accordance with the "Basic Norms for Enterprise Internal Control" and relevant regulations. However, the report identified material weaknesses in non-financial report internal controls. The specific circumstances are as follows:
I. Basic Situation of Material Weaknesses in Non-Financial Report Internal Controls
During the audit process, the registered accountants noted material weaknesses in the Company's non-financial report internal controls, drawing the attention of internal control report users.
- Deficiencies in Major Fund Payment and Contract Change Controls The Company lacks effective approval controls for major procurement advance payments and subsequent significant contract changes. The repeated occurrence of terminating procurement contracts and recovering advance payments due to changes in sales orders indicates insufficient assessment of procurement stability and performance risk prior to payment, and a lack of effective oversight for significant contract changes.