Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 392

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 392
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Zoomcar has identified certain
material weaknesses in Zoomcar’s internal controls over financial reporting more described under Item 4 above. These material weaknesses
primarily relate to the following matters that are relevant to the preparation of our unaudited condensed consolidated financial statements:

    (i)
    The Company designed and implemented process for identification, monitoring and regulatory compliance of transactions involving related parties. The Company’s process includes rolling out related party transaction questionnaires quarterly to the identified related parties. The management intends to continue to take steps and monitor the progress of the internal controls implemented.

    (ii)
    Significant reduction in the number of complex financial instruments post the reverse recapitalization. The management actively engages with valuation experts to communicate the underlying assumptions and terms of the financial instruments. The management intends to continue to monitor the progress of the internal controls implemented.

    (iii)
    Developing financial reporting manuals including Standard Operating Procedures for financial statement closure process to ensure compliance with US GAAP and SEC reporting requirements and monitoring controls over financial statement closure process.

    (iv)
    The Management is working on hiring, training, and retention of inhouse resources with requisite US GAAP knowledge. The management has also engaged external accounting professionals and developing process for sufficient managements reviews.

    (v)
    The Management is currently working on developing accounting manuals, policies, and standard operating procedures in consultation with external consultants.

    (vi)
    The management is in the process of developing ITGC policies and procedures to address identified deficiencies, ensuring controls are designed and operating effectively. This will include establishing monitoring mechanisms to regularly evaluate and test the effectiveness of ITGC, including access controls, change management, and data integrity validation.

In light of the aforementioned
material weaknesses, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded
that, notwithstanding the material weaknesses in our internal control over financial reporting, the unaudited condensed consolidated financial
statements for the periods covered by and included in this Report fairly present, in all material respects, our financial position, results
of operations and cashflows for the periods presented in conformity with GAAP.

We are required to comply
with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial
and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over
financial reporting. Although we are required to disclose changes made in its internal controls and procedures on a quarterly basis, we
will