Xuchang Far East Transmission Shaft Co., Ltd. 2025 Internal Control Self-Evaluation Report
To All Shareholders of Xuchang Far East Transmission Shaft Co., Ltd.:
In accordance with the "Basic Norms for Enterprise Internal Control" and its supporting guidelines jointly issued by the Ministry of Finance, China Securities Regulatory Commission, and other ministries, as well as other internal control regulatory requirements (hereinafter referred to as the "Internal Control Norms System"), and combined with the "Company Internal Control System" and "Company Internal Control Management Manual" of Xuchang Far East Transmission Shaft Co., Ltd. (hereinafter referred to as the "Company"), based on daily and special supervision of internal control, we have evaluated the effectiveness of the Company's internal control as of December 31, 2025 (the base date of the internal control evaluation report).
I. Important Statement
In accordance with the requirements of the Internal Control Norms System, establishing and improving a sound and effectively implemented internal control system, evaluating its effectiveness, and truthfully disclosing the internal control evaluation report are the responsibilities of the Company's Board of Directors. Independent directors supervise the establishment and implementation of internal control by the Board of Directors. Management is responsible for organizing and leading the daily operation of the Company's internal control. The Company's Board of Directors, its directors, and senior management guarantee that the content of this report contains no false records, misleading statements, or significant omissions, and they shall bear individual and joint legal responsibility for the truthfulness, accuracy, and completeness of the report's content.
The objective of the Company's internal control is to reasonably ensure the legality and compliance of business operations, the safety of assets, and the truthfulness and completeness of financial reports and related information, to improve operational efficiency and effectiveness, and to promote the achievement of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the achievement of these objectives. Furthermore, due to changes in circumstances, internal control may become inappropriate, or the degree of compliance with control policies and procedures may decrease. There is a certain risk in inferring the future effectiveness of internal control based on the results of the internal control evaluation.
II. Conclusion of Internal Control Evaluation
Based on the identification of material weaknesses in the Company's financial reporting internal control, as of the base date of the internal control evaluation report, the Company has no material weaknesses in financial reporting internal control. The Board of Directors believes that the Company has maintained effective financial reporting internal control in all material aspects in accordance with the requirements of the Internal Control Norms System and relevant regulations.
Based on the identification of material weaknesses in the Company's non-financial reporting internal control, as of the base date of the internal control self-evaluation report, the Company has found no material weaknesses in non-financial reporting internal control.
No factors have occurred between the base date of the internal control evaluation report and the date of issuance of the internal control evaluation report that have affected the conclusion of the internal control effectiveness evaluation.
III. Internal Control Evaluation Work