ST Tiansheng: Report of the Audit Committee on the Accounting Firm’s Performance of Supervision Responsibilities in 2025
Audit Committee of Tiansheng Pharmaceutical Group Co., Ltd.
Report on the accounting firm’s annual performance of supervisory responsibilities
2025
In accordance with the Company Law, Securities Law, Code of Governance of Listed Companies, Administrative Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies, and Shenzhen Stock Exchange Self-Discipline Supervision Guidelines for Listed Companies No. 1 No. - Standardized Operation of Main Board Listed Companies" and other laws, regulations and normative documents, as well as the provisions and requirements of company systems such as the "Articles of Association" and "Rules of Procedure for the Audit Committee of the Board of Directors", the Audit Committee of the Board of Directors of Tiansheng Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company" and "Tiansheng Pharmaceutical") adheres to the principle of diligence and responsibility, abides by its duties and performs its duties conscientiously. The Audit Committee now reports on the performance of supervisory responsibilities by Beijing Xinghua Accounting Firm (Special General Partnership) (hereinafter referred to as "Beijing Xinghua") in 2025 as follows:
1. Basic situation of audit accounting firms in 2025
(1) Basic information of accounting firms
Beijing Xinghua Accounting Firm (Special General Partnership) was established in 1992, with its registered address in Beijing, and its chief partner is Mr. Zhang Enjun. Beijing Xinghua obtained the qualification for engaging in securities-related businesses issued by the China Securities Regulatory Commission and the Ministry of Finance in 1995. It has various qualifications such as securities and futures audit qualifications, financial business audit qualifications, and military confidential business consulting. On November 22, 2013, the relevant work related to the transformation of the special general partnership accounting firm was completed with the approval of Beijing Finance and Accounting License [2013] No. 0060.
As of the end of 2025, Beijing Xinghua has 111 partners, 481 certified public accountants, and 176 certified public accountants who have signed securities service business audit reports.
In 2025, Beijing Xinghua's audited business income totaled 913.8592 million yuan, including 654.3632 million yuan from auditing business and 66.9063 million yuan from securities business. In 2025, there will be 19 audit clients of listed companies, and the total audit fees will be 23.6866 million yuan. The main industries involved include manufacturing, information transmission, software and information technology services, wholesale and retail, and financial industries. This year, the number of audit clients of the company's listed companies in the same industry was 0.
(2) Basic situation of the project team
- Project partner, signing certified public accountant: Chen Jingbo, became a certified public accountant in 2015, started auditing listed companies in 2016, started practicing in Beijing Xinghua in 2019, and will provide services to the company in 2021
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Provided audit services; signed audit reports for 5 listed companies in the past three years. So far, he has provided securities services such as annual report audits of listed companies and major asset restructuring audits for many listed companies, and has the corresponding professional competence.
Signing Certified Public Accountant: Liu Wei, became a certified public accountant in 2019, began to engage in auditing listed companies in 2022, began practicing in Beijing Xinghua in 2025, and began to provide auditing services to the company in 2025. He has rich experience in auditing listed companies and possesses corresponding professional competencies.
Project quality control reviewer: Shi Yanlu, who has been engaged in the CPA business since 2010. He has been engaged in the audit of listed companies since 2007. He has been practicing in Beijing Xinghua since 2009 and has provided audit services for the company since 2022. He has reviewed more than 10 listed companies in the past three years. He has been engaged in the securities audit business for a long time, participated in and served as the auditor of the annual reports of many listed companies, and has the corresponding professional competence.
(3) Procedures for appointing an audit accounting firm for 2025
After the company's third audit committee in 2025 evaluated Beijing Xinghua's performance in 2024 and carefully reviewed Beijing Xinghua's professional competence, investor protection capabilities, integrity status, independence, etc., it was agreed to submit the matter of re-appointing Beijing Xinghua as the company's audit institution in 2025 to the company's board of directors for review. The company's third meeting of the 2025 Audit Committee of the sixth board of directors held on April 22, 2025, the fourth meeting of the sixth board of directors held on April 25, 2025, and the 2024 annual shareholders' meeting held on May 23, 2025 reviewed and approved the "Proposal on Renewing the Company's Audit Institution for 2025" and agreed to the company's renewal of Beijing Xinghua Accounting Firm as the company's 2025 auditor. The annual financial report audit agency and internal control audit agency are responsible for the company's 2025 annual financial report and internal control audit work.
2. Accounting firm’s performance of duties in 2025
In accordance with the "Audit Engagement Letter", the "Audit Standards for Chinese Certified Public Accountants" and other professional standards, and in conjunction with the company's 2025 annual report work arrangement, Beijing Xinghua Accounting Firm audited the company's 2025 annual financial report and the effectiveness of the internal control of the financial report on December 31, 2025. At the same time, it verified and issued a special report on the storage and actual use of the company's raised funds, non-operating fund occupation and other related fund transactions, operating income deductions, etc.
After auditing, Beijing Xinghua believes that the company's financial statements have been prepared in accordance with the provisions of the Accounting Standards for Business Enterprises in all material aspects, and fairly reflect the company's consolidated and parent company's financial status as of December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025; the company has maintained effective internal control over financial reporting in all material aspects in accordance with the relevant provisions of the "Basic Standards for Enterprise Internal Control" and the Standardized Operation Guidelines. Beijing
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Xinghua issued a standard unqualified audit report on the company's 2025 financial report.
Beijing Xinghua conducted an audit on the "Special Statement on the Elimination of the Impact of Matters Concerned with the Qualified Opinion in the 2024 Audit Report" prepared by the company's board of directors and issued a special audit report on the matter. The accountants believe that the "Special Statement on the Elimination of the Impact of Matters Concerned with the Qualified Opinion in the 2024 Audit Report" prepared by the company's board of directors complies with the relevant provisions of the Shenzhen Stock Exchange Stock Listing Rules. The impact of the matters involved in the qualified opinion in Tiansheng Pharmaceutical's 2024 annual audit report has been eliminated.
3. Performance of Supervisory Responsibilities by the Audit Committee
(1) Composition of the audit committee
The Audit Committee of the sixth session of the Board of Directors of the company is composed of independent director Mr. Li Dingqing, independent director Mr. Yang Dajian, independent director Mr. Yi Runzhong, non-independent director Mr. Wang Xin (resigned in October 2025), and non-independent director Ms. Zhang Ya. Mr. Li Dingqing, an independent director with an accounting major, serves as the director and convener of the audit committee. The composition of the audit committee of the company's board of directors complies with the requirements of the "Administrative Measures for Independent Directors of Listed Companies" and the "Rules of Procedure of the Audit Committee".
(2) The audit committee’s performance of supervisory responsibilities over the accounting firm
On April 22, 2025, the company held the third audit committee of the sixth session of the Board of Directors in 2025 to fully understand the basic information, investor protection capabilities, integrity records, independence, professional competence, etc. of Beijing Xinghua Accounting Firm, and verified its business qualifications. Based on the annual audit services provided by Beijing Xinghua Accounting Firm to the company in previous years, it was deemed that it has the experience and ability to provide audit services to the company. Taking into account the continuity and integrity of the company's audit work, in order to ensure the smooth progress of the company's 2025 audit work, the Audit Committee agreed to renew the appointment of Beijing Xinghua Accounting Firm as the company's financial and internal control audit agency for 2025, and agreed to submit it to the 11th meeting of the company's sixth board of directors for review.
During the audit of the annual report, the Audit Committee communicated with Beijing Xinghua’s certified public accountant responsible for the company’s 2025 audit and the company’s management on the audit scope, important time points, audit plan, audit key matters, audit procedures, internal control audit status, preliminary audit opinions, etc. of the 2025 annual audit report, and made suggestions on the problems discovered.
On April 22, 2026, the company held the third meeting of the Audit Committee of the sixth board of directors, and reviewed and approved the company’s “Proposal on the Company’s 2025 Annual Report and Summary” and “On the Company’s 2025 Internal Report”
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Proposal on Controlling Evaluation Reports" and other proposals, and agreed to submit relevant proposals to the company's board of directors for review.
4. Overall evaluation
During the reporting period, in accordance with relevant regulations, the Audit Committee performed its duties diligently and gave full play to its role of review and supervision. The accounting firm’s relevant qualifications, professional capabilities, investor protection capabilities, independence, etc. were reviewed, and full communication and exchanges were conducted with the accounting firm during the 2025 audit period, and the accounting firm was urged to issue audit reports in a timely, objective and fair manner, and the audit committee effectively fulfilled its supervision responsibilities over the accounting firm.
The Audit Committee of the company's board of directors believes that: Beijing Xinghua audited the company's 2025 financial report and the effectiveness of the company's internal control over the financial report on December 31, 2025 in accordance with the Chinese Certified Public Accountants Practice Standards and other relevant requirements. During the company's 2025 annual audit process, it showed good professional ethics and business quality, and the audit report issued was objective, complete, clear and timely.
In 2026, the Audit Committee will continue to fulfill its duties, pay close attention to internal and external audit work, strengthen communication, supervision and verification of the company's internal and external audits, and safeguard the overall interests of the company and the legitimate rights and interests of all shareholders.
Audit Committee of the Board of Directors of Tiansheng Pharmaceutical Group Co., Ltd. April 28, 2026
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