Longfor Group Holdings Limited (Beijing) New Drug Technology Co., Ltd.
Report on the Evaluation of the Performance of Accounting Firms in 2025 and the Audit Committee's Fulfillment of Supervisory Responsibilities
In accordance with the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Corporate Governance Guidelines for Listed Companies," "Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies," "Shenzhen Stock Exchange GEM Stock Listing Rules," "Shenzhen Stock Exchange GEM Listed Company Self-Regulatory Guidelines No. 2 - Norms for the Operation of GEM Listed Companies," and the "Articles of Association" and "Work Rules of the Board of Directors' Audit Committee" of Longfor Group Holdings Limited (Beijing) New Drug Technology Co., Ltd. (hereinafter referred to as the "Company"), the Audit Committee, in the spirit of diligence and responsibility, has conscientiously performed its duties. The Board of Directors and the Audit Committee's evaluation of the accounting firms' performance in 2025 and the Audit Committee's fulfillment of its supervisory responsibilities are as follows:
I. Procedures for Appointing Accounting Firms
The Company's 2024 Annual General Meeting of Shareholders, held on June 20, 2025, approved the "Proposal on the Re-appointment of the Domestic Financial and Internal Control Audit Firm for 2025" and the "Proposal on the Re-appointment of the Overseas Accounting Firm for 2025." It was resolved to re-appoint Ernst & Young Hua Ming (Special General Partnership) (hereinafter referred to as "EY Hua Ming") as the Company's domestic financial and internal control audit firm for 2025, and to re-appoint Ernst & Young Accounting Firm (collectively referred to as "EY" with EY Hua Ming) as the Company's overseas accounting firm for 2025. This appointment is effective from the 2024 Annual General Meeting of Shareholders until the 2025 Annual General Meeting of Shareholders.
The audit fee for the Company's 2025 domestic financial statements is RMB 2.15 million, the internal control audit fee is RMB 0.55 million, and the overseas audit fee is RMB 1.40 million.
II. Evaluation of the Accounting Firms' Performance in 2025
- Qualifications and Practice Record
EY possesses the accounting firm practice qualification issued by the Ministry of Finance and is registered with the Public Company Accounting Oversight Board (US PCAOB). It is one of the first batch of firms in China to obtain securities and futures business qualifications and H-share company audit qualifications. EY has extensive practical experience and strong professional service capabilities in securities business services. EY has multiple operating locations in Beijing, Shanghai, Tianjin, Xi'an, Ningbo, and Hong Kong. According to the "Top 100 Accounting Firms Comprehensive Ranking Information for 2024" released by the Chinese Institute of Certified Public Accountants, EY Hua Ming ranks first.
Certified Public Accountants Ms. Xiao Hui, Ms. Dong Yu, and the project quality control reviewer Ms. Yang Shujuan all hold professional qualifications such as certified public accountant or Hong Kong practicing accountant. The aforementioned signing certified public accountants and the project quality control reviewer have not been subjected to criminal penalties for their professional conduct in the past three years, nor have they received administrative penalties, supervisory measures from the China Securities Regulatory Commission and its dispatched agencies, or industry regulatory measures and disciplinary actions from stock exchanges or industry associations.
- Quality Management Level
(1) System Development and Implementation