Southwest Securities Co., Ltd.
Audit Report on the Fund Raising and Use of Tianjin Red Sun Pharmaceutical Co., Ltd. in 2025
Southwest Securities Co., Ltd. (hereinafter referred to as "Southwest Securities" or "Sponsor") is the sponsor of Tianjin Red Sun Pharmaceutical Co., Ltd. (hereinafter referred to as "the Company" or "Red Sun Pharmaceutical") for its non-public offering in 2014. In accordance with the "Supervision Measures for the Fund Raising of Listed Companies" (CSRC Announcement [2025] No. 10) issued by the China Securities Regulatory Commission and the "Self-Regulatory Guidelines for the Standardized Operation of Listed Companies on the GEM" (No. 2) issued by the Shenzhen Stock Exchange, and other relevant laws, regulations, and normative documents, Southwest Securities has audited the situation of fund raising and use of Red Sun Pharmaceutical in 2025 and hereby expresses the following audit opinion:
I. Basic Situation of Fund Raising
(I) Actual Amount of Funds Raised and Time of Arrival
Approved by the "Approval for the Initial Public Offering of Shares by Tianjin Red Sun Pharmaceutical Co., Ltd. and Listing on the GEM" (Securities Regulatory Permit [2009] No. 1038) issued by the China Securities Regulatory Commission and agreed to by the Shenzhen Stock Exchange, the Company, through the lead underwriter Guodu Securities Co., Ltd. (hereinafter referred to as "Guodu Securities"), adopted a method of inquiry-based placement to institutional investors and pricing offering to the public investors, and issued 12.59 million ordinary shares (A shares) to the public, with a par value of RMB 1 per share and an offering price of RMB 60.00 per share. The total amount of funds raised was RMB 755,400,000.00. After deducting fees for advisory services, underwriting, and sponsorship totaling RMB 29,662,000.00, the raised funds amounted to RMB 725,738,000.00. This amount was remitted by the lead underwriter Guodu Securities Co., Ltd. to the RMB account opened by the Company with the Industrial and Commercial Bank of China, Tianjin Qing Branch, on October 20, 2009. After deducting other issuance expenses such as legal fees, audit fees, information disclosure, and roadshow promotion totaling RMB 4,978,669.19, the net amount of raised funds was RMB 720,759,330.81. This matter was audited by Zhongrui Yuehua Certified Public Accountants Co., Ltd., which issued the Zhongrui Yuehua Audit Report [2009] No. 211 on October 20, 2009.
According to the "Decision on the Treatment of the 2009 Accounting Information Quality Inspection of Tianjin Red Sun Pharmaceutical Co., Ltd." (Cai Zhu Jin Jian [2010] No. 84) issued by the Tianjin Supervisory Office of the Ministry of Finance (hereinafter referred to as "Tianjin Cai Zhuan Ban"), it was pointed out that the company's issuance expenses were not properly accounted for.
The company recompiled its 2009 financial statements in accordance with the "Accounting Standards for Business Enterprises - Changes in Accounting Policies, Accounting Estimates and Correction of Accounting Errors" due to an overstatement of issuance expenses by RMB 925,821.32. Zhongrui Yuehua Certified Public Accountants issued the Zhongrui Yuehua Audit Report [2010] No. 06267. The company's net amount of raised funds was adjusted from RMB 720,759,330.81 to RMB 721,685,152.13. On April 2, 2011, the Company remitted the overstated issuance expenses of RMB 925,821.32 to the special account for raised funds (hereinafter referred to as the "90280 Account") of Industrial and Commercial Bank of China, Tianjin Qing Branch, account number 0302085129300090280.
On March 22, 2013, the 34th meeting of the fourth board of directors of the Company deliberated and approved the "Proposal on Changing the Special Account for Raised Funds of the Initial Public Offering of Shares." The board of directors agreed to cancel the original special account for raised funds of Industrial and Commercial Bank of China, Tianjin Xiqing Branch, account number 0302085129300090280, and open a special account for raised funds (hereinafter referred to as the "33655 Account") with Industrial and Commercial Bank of China, Tianjin Hexi Branch, account number 0302060819300533655. The balance of the original 90280 Account was transferred to the 33655 Account. As of April 8, 2013, the 33655 Account had received a transfer of RMB 169,234,574.17 from the 90280 Account. The 90280 Account was closed on April 8, 2013.