Kehua Biology: Report of the Audit Committee of the Board of Directors on the Accounting Firm’s Assessment of Duty Performance and Supervision Responsibilities in 2025
Shanghai Kehua Bioengineering Co., Ltd.
Audit Committee of the Board of Directors on the Accounting Firm
2025 Annual Duty Performance Assessment and Supervision Responsibilities Report
In accordance with the "Company Law of the People's Republic of China", "Securities Law of the People's Republic of China", "Guidelines for the Governance of Listed Companies", "Administrative Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies", "Shenzhen Stock Exchange Listed Companies' Self-Regulatory Guidelines No. 1 - Standardized Operations of Main Board Listed Companies" and other laws, administrative regulations, departmental rules and other normative documents. and the "Articles of Association of Shanghai Kehua Bioengineering Co., Ltd." (hereinafter referred to as the "Articles of Association") and other relevant provisions. The Audit Committee of the Board of Directors of Shanghai Kehua Bioengineering Co., Ltd. (hereinafter referred to as the "Company") adheres to the principle of diligence and responsibility, objectively evaluates the performance of the accounting firm's duties, and conscientiously performs its supervisory duties over the accounting firm. The Audit Committee of the Board of Directors now reports on the accounting firm’s performance assessment and supervision responsibilities in 2025 as follows:
1. Basic situation of accounting firms in 2025 annual audit
(1) Basic information of accounting firms
Rongcheng Accounting Firm (Special General Partnership) (hereinafter referred to as "Rongcheng Accounting Firm") was renamed from the original Huapu Tianjian Accounting Firm (Special General Partnership). It was initially established in August 1988 and restructured into a special general partnership on December 10, 2013. It is one of the earliest accounting firms in China approved to engage in securities services business and has been engaged in securities services business for a long time. The registered address is Rooms 1001-1 to 1001-26, Floor 10, Building 1, No. 22, Fuchengmenwai Street, Xicheng District, Beijing, Chief Partner Liu Wei.
As of December 31, 2024, Rongcheng Accounting Firm had 196 partners and 1,549 certified public accountants, 781 of whom had signed the securities service business audit report. The audited total revenue of Rongcheng Accounting Firm in 2024 is 2,510.258 million yuan, including 2,348.6294 million yuan in auditing business income and 1,237.6458 million yuan in securities and futures business income. In 2024, the number of audit clients of listed companies was 518, with audit fees of 620.4752 million yuan. The clients were mainly concentrated in manufacturing, information transmission, software and information technology services, wholesale and retail, scientific research and technical services, construction, water conservancy, environment and public facilities management and other industries. Rongcheng Accounting Firm has 383 audit clients of listed companies in the same industry in which the company is located.
(2) Procedures for re-appointing an accounting firm
The company held the 11th meeting of the Audit Committee of the 10th Board of Directors, the 17th meeting of the 10th Board of Directors, and the 11th meeting of the 10th Board of Supervisors on October 13, 2025. The company held the first extraordinary shareholders' meeting of 2025 on October 29, 2025, and reviewed and approved the "Proposal on the Proposed Re-appointment of the Accounting Firm" and agreed to renew the appointment of Rongcheng Accounting Firm as the company's audit agency for 2025.
2. Duty performance of the accounting firm in the 2025 annual audit
According to the audit engagement letter, combined with the company's actual situation, and in compliance with the "Audit Standards for Chinese Certified Public Accountants" and other professional standards, Rongcheng Accounting Firm audited the company's 2025 financial statements 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 use of the company's raised funds, non-operating fund occupation and other related party fund transactions, and operating income deductions.
After auditing, Rongcheng Accounting Firm believes that the company's financial statements have been prepared in accordance with 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, and issued a standard unqualified audit report. After auditing, Rongcheng Accounting Firm believed that the company maintained effective internal control over financial reporting in all major aspects in accordance with the "Basic Standards for Enterprise Internal Control" and relevant regulations on December 31, 2025, and issued a standard unqualified internal control audit report.
In the process of performing the audit work, Rongcheng Accounting Firm communicated with the corporate governance layer on the independence of the accounting firm and relevant auditors, audit plan, risks and fraud, annual audit focus, audit conclusions, etc.
3. Supervision of accounting firms by the audit committee
According to the "Working Rules of the Audit Committee of the Board of Directors of Shanghai Kehua Bioengineering Co., Ltd." (hereinafter referred to as the "Working Rules of the Audit Committee") 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 Rongcheng Accounting Firm’s professional qualifications, business capabilities, integrity status, independence, past audit work and quality of practice, etc., 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 October 13, 2025, the 11th meeting of the Audit Committee of the 10th Board of Directors of the company reviewed and approved the "Proposal on the Re-appointment of the Accounting Firm", agreed to renew the appointment of Rongcheng Accounting Firm as the company's audit agency for 2025, and agreed to submit it to the company's Board of Directors for review.
(2) On December 22, 2025, the company’s audit committee, independent directors and Rongcheng Accounting Firm held the first communication meeting. The audit committee listened to Rongcheng Accounting Firm’s report on the 2025 audit, and communicated on the audit scope, important time points, audit focus and other related matters of the 2025 audit work.
(3) On April 14, 2026, the company’s independent directors, audit committee and Rongcheng Accounting Firm held a second communication meeting to communicate on the implementation of the 2025 audit plan, key audit matters, audit conclusions and other matters.
(4) On April 15, 2026, the company held the 14th meeting of the Audit Committee of the 10th Board of Directors, and reviewed the 2025 annual report and report summary, 2025 internal control self-evaluation report, 2025 special report on the deposit and use of raised funds, and other proposals, and submitted them to the company's board of directors for review after approval.
4. Overall evaluation
The Audit Committee of the Board of Directors strictly abides by relevant laws, administrative regulations, departmental rules, other normative documents, and relevant provisions of the company's management system such as the "Articles of Association" and "Working Rules of the Audit Committee of the Board of Directors of Shanghai Kehua Bioengineering Co., Ltd.", gives full play to the role of professional committees, and provides The relevant qualifications and professional capabilities of the accounting firm were reviewed, and full discussions and communication were conducted with Rongcheng Accounting Firm during the annual report audit. Rongcheng Accounting Firm was urged to issue audit reports in a timely, accurate, objective and fair manner, and the Audit Committee effectively performed its supervisory responsibilities over Rongcheng Accounting Firm.
Rongcheng Accounting Firm insisted on conducting independent audits in a fair and objective manner during the audit of the company's annual report. It demonstrated good professional ethics and professional quality and completed the company's 2025 financial statements and internal control audit related work on financial reports 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 Shanghai Kehua Bioengineering Co., Ltd.
April 17, 2026