Yaoshi Technology: Report of the Audit Committee of the Board of Directors on the Accounting Firm’s Performance of Supervisory Responsibilities in 2025
Nanjing Yaoshi Technology Co., Ltd.
Audit Committee of the Board of Directors on the Accounting Firm
Report on the performance of supervisory responsibilities in 2025
In accordance with the provisions and requirements of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Governance of Listed Companies, the Administrative Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies, the Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 2 - Standardized Operations of GEM Listed Companies, and the Articles of Association, the Audit Committee of the Board of Directors adheres to the principle of diligence and responsibility, fulfills its duties conscientiously, and performs its duties conscientiously. The Audit Committee of the Board of Directors now reports on the performance evaluation of the accounting firm in 2025 as follows:
1. Basic situation of accounting firms in 2025 annual audit
(1) Basic information of accounting firms
- Basic information
(1) Name of the accounting firm: Beijing Xinghua Accounting Firm (Special General Partnership) (hereinafter referred to as "Beijing Xinghua")
(2) Date of establishment: November 22, 2013
(3) Organizational form: special general partnership
(4) Registered address: Room 2206, No. 18 Yumin Road, Xicheng District, Beijing
(5) Executive Partner/Chief Partner: Zhang Enjun
(6) Personnel information: As of December 31, 2025, Beijing Xinghua has 111 partners, 481 certified public accountants, and 176 certified public accountants who have signed securities service business audit reports.
(7) Business information: Beijing Xinghua’s total audited income in 2024 was 837.471 million yuan, including audit business income of 598.5511 million yuan and securities business income of 44.677 million yuan. The number of audit clients for the annual reports of listed companies in 2024 is 19. The main industries include manufacturing, information transmission, software and information technology services, leasing and business services, scientific research and technical services, finance, etc. Among them, one of our company's audit clients is a listed company in the same industry.
- Investor protection capabilities
Beijing Xinghua has purchased professional liability insurance in full, and the cumulative compensation limit of the purchased professional liability insurance is not less than 100 million yuan. The professional risk fund accrual and professional liability insurance comply with relevant regulations and can cover civil liability for compensation due to audit failures. Due to the civil lawsuit involving Xintai Electric, the first instance judgment ordered Beijing Xinghua to pay compensation of 8.08 million yuan, and Beijing Xinghua has paid the full amount.
- Integrity record
Beijing Xinghua has been subject to 0 criminal penalties, 3 administrative penalties, 9 supervisory and management measures, 0 self-regulatory measures and 3 disciplinary sanctions due to professional conduct in the past three years (the last three complete calendar years and the current year).
A total of 24 employees of Beijing Xinghua have received 0 criminal penalties, 3 administrative penalties, 9 supervisory and management measures, 0 self-regulatory measures and 3 disciplinary sanctions due to their professional behavior in the past three years (the last three complete calendar years and the current year).
(2) Procedures for appointing an accounting firm
Nanjing Yaoshi Technology Co., Ltd. (hereinafter referred to as the "Company") held the eighth meeting of the fourth board of directors on August 7, 2025, and reviewed and approved the "Proposal on the Proposal to Change the Accounting Firm". The proposal was later reviewed and approved by the 2025 First Extraordinary General Meeting of Shareholders on August 25, 2025, agreeing to appoint Beijing Xinghua Company's 2025 financial report and internal control audit agency.
(3) Description of the change of accounting firm
1． Information about the previous accounting firm and audit opinions of the previous year
The company's original audit institution, Notarization Tianye, has provided audit services to the company for two consecutive years. The type of audit opinion last year was a standard unqualified opinion. There is no situation where the company has entrusted the previous accounting firm to carry out some audit work and then fired the previous accounting firm.
- Reasons for changing accounting firm
Notarization Tianye has completed the company's 2024 financial statements and internal control audit in accordance with the requirements of the "Business Engagement Letter". In view that this audit institution has provided audit services to the company for two consecutive years, the company has comprehensively considered its own business development and audit work needs. In order to further improve the audit quality of the company's financial statements, in accordance with the relevant provisions of the "Administrative Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies", the audit institution for 2025 will be changed to Beijing Xinghua after public bidding and the audit committee of the company's board of directors carefully reviewed and evaluated the candidate institution Beijing Xinghua's professional qualifications, professional competence, integrity records, and independence.
3． Communication status between listed companies and previous accounting firms
The company has communicated with Beijing Xinghua and Gongzheng Tianye regarding the proposed change of accounting firms. Both accounting firms are aware of this matter and have no objection to the change. The predecessor accounting firm has done a good job in communication and cooperation in accordance with the provisions of the "Audit Standards for Chinese Certified Public Accountants No. 1153 - Communication between the Predecessor and Successor Certified Public Accountants" and other relevant requirements.
2. Duty performance of the accounting firm in the 2025 annual audit
In accordance with the "Audit Engagement Letter", following the "Audit Standards for Chinese Certified Public Accountants" and other professional standards and the company's 2025 annual report work arrangements, Beijing Xinghua audited the company's 2025 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 special instructions on the storage, management and use of the company's raised funds, non-operating fund occupation and other related fund transactions.
After auditing, Beijing Xinghua believes that the company's financial statements are 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 aspects in accordance with the "Basic Standards for Enterprise Internal Control" and relevant regulations. Beijing Xinghua issued a standard unqualified audit report. In the process of performing audit work, Beijing Xinghua communicated with the company's management and governance on the independence of the accounting firm and relevant auditors, the composition of the audit team, audit plans, risk judgments, risk and fraud testing and evaluation methods, annual audit priorities, audit adjustment matters, preliminary audit opinions, etc.
3. Supervision of accounting firms by the audit committee
According to the company's "Audit Committee Working System" and other relevant regulations, the audit committee's performance of supervisory responsibilities over the accounting firm is as follows:
(1) The Audit Committee conducted a strict review and evaluation of Beijing Xinghua’s professional qualifications, business capabilities, integrity, independence, past audit work and quality of practice, and believed that it has the qualifications and professional capabilities to provide audit work for the company and can meet the company’s audit work requirements. On August 7, 2025, the fourth meeting of the Audit Committee of the third board of directors in 2025 reviewed and approved the "Proposal on the Proposed Change of Accounting Firm", agreed to appoint Beijing Xinghua Company's 2025 financial statements and internal control audit agency, and agreed to submit it to the company's board of directors for review.
(2) On January 15, 2026, the Audit Committee communicated with the accountant responsible for the audit work of Beijing Xinghua on the overall situation of the CPA's responsibilities related to the audit of financial statements, personnel independence, planned audit scope and time arrangement in the 2025 audit work.
(3) During the annual report audit, the audit committee communicated with the accountants responsible for the audit work of Beijing Xinghua respectively on the type and schedule of the audit report, key audit matters, subsequent matters and other matters, and made suggestions on the problems discovered during the audit. On April 9, 2026, the Audit Committee and the independent directors communicated with the accountants responsible for the audit work of Beijing Xinghua on the preliminary audit opinions and problems discovered during the audit process, and the Audit Committee made suggestions.
(4) On April 21, 2026, the second meeting of 2026 of the Audit Committee of the fourth session of the board of directors of the company reviewed and approved the company’s 2025 annual report, financial final accounts report, internal control evaluation report and other proposals and submitted them to the board of directors for consideration.
4. Overall evaluation
The Company's Audit Committee strictly abides by the relevant regulations of the China Securities Regulatory Commission, the Shenzhen Stock Exchange, the "Articles of Association", the "Audit Committee Working System" and other relevant regulations, gives full play to the role of professional committees, reviews the relevant qualifications and professional capabilities of the accounting firm, conducts full discussions and communication with the accounting firm during the annual report audit, urges the accounting firm to issue audit reports in a timely, accurate, objective and fair manner, and effectively performs the audit committee's supervision responsibilities over the accounting firm.
The company's audit committee believes that Beijing Xinghua insisted on conducting independent audits in a fair and objective manner during the audit of the company's annual report, demonstrated good professional ethics and business quality, completed the company's 2025 annual report audit-related work on time, the audit behavior was standardized and orderly, and the audit report issued was objective, complete, clear and timely.
Audit Committee of the Board of Directors of Nanjing Yaoshi Technology Co., Ltd.
April 22, 2026