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 Wuxi Best Precision Machinery Co., Ltd. (hereinafter referred to as "the Company" or "Best"), we have evaluated the effectiveness of the Company's internal controls as of December 31, 2025, based on daily supervision and special supervision of internal controls.
The establishment, improvement, and effective implementation of internal controls, as well as the truthful disclosure of the internal control evaluation report, are the responsibilities of the Company's board of directors. The audit committee supervises the establishment and implementation of internal controls by the board. The management is responsible for organizing and leading the daily operation of internal controls. The Company's board of directors, audit committee, and directors and senior management ensure 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 truthfulness, accuracy, and completeness of the report's content.
The goal of the Company's internal controls is to reasonably ensure that business management is legal and compliant, assets are secure, financial reporting 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 lead to internal controls becoming inappropriate or a decrease in adherence to control policies and procedures, which carries certain risks when inferring the future effectiveness of internal controls based on evaluation results.
Internal Control Evaluation Conclusion
Based on the identification of significant deficiencies in internal controls over financial reporting, as of the evaluation report benchmark date, there are no significant deficiencies in financial reporting internal controls. The board believes that the Company has maintained effective internal controls over financial reporting in all significant aspects 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 evaluation report benchmark date, 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 evaluation report benchmark date and the issuance date of the evaluation report.
Internal Control Evaluation Work Situation
Internal Control Evaluation Scope
The Company determines the main units, businesses, and matters 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: Wuxi Best Precision Machinery Co., Ltd. and Anhui Best New Energy Vehicle Parts Co., Ltd. The total assets of the units included in the evaluation scope account for 92.81% of the total assets of the Company's consolidated financial statements, and the total operating income accounts for 97.54% of the total operating income of the Company's consolidated financial statements. The main businesses and matters included in the evaluation scope are as follows:
- Internal Environment: organizational structure, development strategy, human resources, social responsibility, corporate culture, information disclosure;
- Control Activities: capital activities, procurement business, asset management, sales business, research and development, engineering projects, guarantee business, business outsourcing, financial reporting;
- Control Means: comprehensive budgeting, contract management, internal information transmission, information systems;
- Internal Supervision: internal audit.