Important Statement
According to the requirements of the "Basic Norms for Enterprise Internal Control" and other regulatory documents, establishing, maintaining, and effectively implementing internal controls, evaluating their effectiveness, and truthfully disclosing the internal control evaluation report is the responsibility of the company's board of directors. The audit committee of the board supervises the establishment and implementation of internal controls, while the management is responsible for the daily operations of internal controls. The board of directors and senior management ensure that the report does not contain false records, misleading statements, or significant omissions, and they bear individual and joint legal responsibility for the truthfulness, accuracy, and completeness of the report. The objective of the company's internal control is to reasonably ensure legal compliance in management, asset security, and the authenticity and completeness of financial reports and related information, thereby improving operational efficiency and effectiveness and promoting the achievement of development strategies. Due to inherent limitations in internal controls, they can only provide reasonable assurance of achieving these objectives. Additionally, changes in circumstances may render internal controls inappropriate or reduce compliance with control policies and procedures, making it risky to infer the future effectiveness of internal controls based on evaluation results.
During the reporting period, the company conducted significant operational activities such as acquisitions and external investments in line with its development strategy, while also adhering to related party transaction management procedures. All relevant matters were included in the company's internal control system for full-process management, relying on existing internal control systems for daily supervision to ensure that all significant operational activities are legal, compliant, and manageable in terms of risk.
Internal Control Evaluation Work Situation
(1) Scope of Internal Control Evaluation
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Units for Internal Control Evaluation
The company determined the main units, businesses, and high-risk areas included in the evaluation based on a risk-oriented principle. The main units included: Zhejiang Taotao Vehicle Co., Ltd. and subsidiaries included in the consolidated financial statements (including newly acquired entities added to the consolidated financial statements in 2025). The total assets of the units included in the evaluation account for 100% of the total assets in the company's consolidated financial statements, and the total operating income accounts for 100% of the total operating income in the company's consolidated financial statements. -
Main Businesses and Matters Included in the Evaluation
The main businesses and matters included in the evaluation encompass: control environment (including organizational structure, development strategy, human resources, social responsibility, corporate culture), risk assessment, control activities (including fund management, investment and financing management, research and development, production and sales management, asset management, guarantee business, financial reporting management, related party transaction management, subsidiary management, comprehensive budgeting, information system management), information transmission and communication (including information disclosure, internal information transmission), and continuous supervision. During the reporting period, the company listed significant capital operations such as acquisitions and external investments, as well as related party transactions, as high-risk areas for internal control and key focus areas for internal management. Daily evaluations and supervision of internal controls were conducted throughout the entire process of project initiation, research, decision-making, fund payment, target delivery, subsequent operations, and price settlement. The units, businesses, matters, and high-risk areas included in the evaluation cover the main aspects of the company's operational management, with no significant omissions.