Securities code: 688047 Securities abbreviation: Loongson Zhongke Announcement No.: 2024-039

Loongson Zhongke Technology Co., Ltd

Announcement on the proposed change of accounting firm for 2024

The Board of Directors and all directors of the Company guarantee that the content of this announcement does not contain any false records or misleading

statements or material omissions, and bear legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law

Important Content Notes:

1. Name of the accounting firm to be hired: Zhongxinghua Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Zhongxinghua")

2. Name of the original accounting firm: Baker Tilly International Accounting Firm (Special General Partnership) (hereinafter referred to as "Baker Tilly International")

3. Brief reasons for the change of accounting firm and objections of the former accountant: the former accountant's firm

On August 2, 2024, Baker Tilly International was administratively punished by the China Securities Regulatory Commission (CSRC) and suspended from engaging in the securities service industry

For 6 months, this event may affect the company's 2024 financial report audit work, based on the principle of prudence, the company intends to change the 2024 audit institution. The Company has communicated with Baker Tilly International in advance regarding the proposed change of accounting firm, and Baker Tilly International has clearly informed of this matter and confirmed that it has no objection.

In accordance with the relevant provisions of the Administrative Measures for the Selection and Employment of Accounting Firms by State-owned Enterprises and Listed Companies and the Administrative Measures for the Selection and Employment of Accounting Firms, the Company selects the audit institutions for 2024 through open selection. After the evaluation team reviewed the applicant accounting firms, ZTE's comprehensive ranking was ahead of other applicant accounting firms, and the company intends to appoint ZTE as the company's financial and internal control auditor in 2024.

1. The basic information of the accounting firm to be employed

(i) Institutional information

1. Basic information

Zhongxinghua Certified Public Accountants was established in 1993 and was approved and restructured by the State Administration for Industry and Commerce in 2000

It is "Zhongxinghua Certified Public Accountants Co., Ltd." In 2009, Jiangsu Fuhua Certified Public Accountants was absorbed and merged and renamed as "Zhongxing Huafuhua Certified Public Accountants Co., Ltd." In 2013, the company carried out the transformation of the partnership system, and the name of the firm after the transformation was "Zhongxinghua Certified Public Accountants (Special General Partnership)". Place of incorporation

Address: 20th Floor, South Building, Building 1, Courtyard 20, Lize Road, Fengtai District, Beijing. Senior Partner Li Zunnong.

At the end of 2023, there are 189 partners, 968 certified public accountants, and a securities service company

The number of certified public accountants reporting on business audit is 489. The audited business income for 2023 is 185,828.77 million

yuan, of which the audit business income was 1400.9134 million yuan, and the securities business income was 320.3959 million yuan; 2023 year

124 annual reports of listed companies were audited, and the industries involved in listed companies include manufacturing; information transmission, software and information technology services; water conservancy, environment and public facilities management; wholesale and retail trade; real estate; In the construction industry, the total audit fee was 157.9112 million yuan, and 12 listed companies in the same industry audited customers.

2. Investor protection ability

ZTE accrued 114,684,200 yuan from the occupational risk fund, and the cumulative compensation limit of the occupational insurance purchased was 100 million yuan, and the provision of the occupational risk fund and the purchase of occupational insurance were in accordance with the relevant regulations.

In the past three years, there have been civil lawsuits related to professional conduct: in the case of Qingdao Hantec Co., Ltd.'s securities misrepresentation liability dispute, ZTE was judged to be jointly and severally liable for the liability part of Hantec Company within the scope of 20%.

3. Integrity record

In the past three years, ZTE has not been subject to criminal punishment, 2 administrative penalties, 15 supervision and management measures, and 2 self-discipline and supervision measures for its professional behavior. In the past three years, ZTE employees have been criminally punished for their professional conduct 0

39 employees were subject to 6 administrative penalties, 37 supervision and management measures, and 4 self-discipline and supervision measures.

(2) Project information

1. Basic information

The basic information of the project partner, the signatory certified public accountant, and the project quality control reviewer is as follows:

Certified Public Accountant Starts Starts Starts in the Firm Proposed to Start Based

Project Name Practice Time Listed Company Practice Time The company provides review

Audit time Count service time

Project Partner & Signed: Zhao Yichao, 2018, 2015, 2018, 2024

Word Certified Public Accountant

Signed CPA Lei Jinrong 2021 2015 2024 2024

Quality Control Reviewer: Yang Li, 2019, 2015, 2023, 2024

(1) The practice of the project partner and the signatory certified public accountant in the past three years

Name: Yichao Zhao

Time Listed Company Name Position

2022 Shanghai Sanmao (600689) Project Partner

2024 Project Partner of Liyuan Technology (688565).

2024 Partner, Haixi Communications (831305) Project

(2) The practice of the signing certified public accountant in the past three years

Name: Lei Jinrong

Time Listed Company Name Position

2022 Guodian Nanzi (600268) Quality Control Reviewer

2022 Almaden (002623) Quality Control Reviewer

2022 Zhongfu Shenying (688295) Quality Control Reviewer

2023 CR Micro (688396) Quality Control Reviewer

2023 Chlor-Alkali Chemical (600618) Quality Control Reviewer

2023 Changlian (603648) Quality Control Reviewer

2024 Longxing Chemical (002442) Quality Control Reviewer

2024 Great Wall Military Industry (601606) Quality Control Reviewer

2024 Eddy Precision (603638) Quality Control Reviewer

2024 Saiwei Microelectronics (688325) Quality Control Reviewer

(3) The experience of the project quality control reviewer in the past three years

Name: Yang Li

Time Listed Company Name Position

2024 Haili Biotech (603718) Quality Control Reviewer

2. Integrity record

In the past three years (the last three full natural years and the current year), the project partners, signatory certified public accountants, and project quality control reviewers have not been subject to criminal penalties for their professional behaviors, administrative penalties, supervision and management measures by the China Securities Regulatory Commission, its dispatched agencies, and industry authorities, or self-regulatory measures and disciplinary actions by self-regulatory organizations such as securities trading venues and industry associations.

3. Independence

ZTE and its project partners, signatory certified public accountants, and project quality control reviewers do not have any circumstances that may affect their independence.

4. Audit fees

The company's audit fee for 2023 is RMB1.25 million, of which the financial report audit fee is RMB1.1 million

The internal control audit fee was 150,000 yuan, which was unchanged from the previous year. The audit fee is mainly based on the company's business scale, industry and complexity of accounting treatment, and is determined according to the audit staffing and workload, as well as the firm's fee standard. The pricing principle of audit fees for 2024 remains unchanged, and the company will negotiate with ZTE to determine it in accordance with a fair and reasonable price in the market.

2. A description of the proposed change of accounting firm

(1) The situation of the former accounting firm and the audit opinion of the previous year

During the audit period for the company, the former accounting firm Baker Tilly International adhered to the principle of independent auditing, performed diligently, fairly and independently issued audit opinions, objectively, fairly and accurately reflected the company's financial statements and internal control, and issued a standard unqualified audit report for the company in 2023. The company does not have the situation that the former accounting firm has been entrusted to carry out part of the audit work and then dismissed the former accounting firm.

(2) The reason for the proposed change of the accounting firm

The former accounting firm Baker Tilly International was administratively punished by the China Securities Regulatory Commission and suspended from engaging in securities service business for 6 months, which may affect the company's 2024 financial report audit work, and based on the principle of prudence, the company intends to change the audit institution for 2024.

(3) The communication between the listed company and the former accounting firm

The company has fully communicated with the former and former accounting firms on the change of accounting firms, and all parties have clearly understood this matter and confirmed that there is no objection. Since the change of accounting firm still needs to be submitted to the board of directors and the general meeting of shareholders of the company for deliberation, the former and former accounting firms will actively do a good job in communication, cooperation and connection in accordance with the Chinese Certified Public Accountants Auditing Standard No. 1153 - Communication between the former certified public accountants and subsequent certified public accountants and other relevant regulations.

3. The procedures to be performed by the accounting firm are to be changed

(1) The deliberation opinions of the Audit Committee

The Audit Committee of the Board of Directors of the Company deliberated and approved the "Proposal on Changing the Accounting Firm in 2024" and issued a clear opinion. ZTE has good professional competence and investor protection capabilities, and is able to perform its audit duties independently and diligently in accordance with the professional standards of Chinese Certified Public Accountants. Agreed to appoint ZTE as the company's auditor in 2024 and submit the proposal to the company's board of directors for deliberation.

(2) The deliberation and voting of the board of directors

On September 20, 2024, the company held the sixth meeting of the second board of directors and deliberated and approved the "About

Proposal to change the accounting firm in 2024, agreed to appoint ZTE as the company's auditor in 2024, and submitted the proposal to the company's general meeting of shareholders for deliberation. At the same time, the board of directors of the company proposed to the general meeting of shareholders to authorize the company's management to negotiate with ZTE in accordance with the audit requirements and scope and in accordance with market principles to determine the relevant audit fees for 2024 and sign relevant agreements.

(3) Effective date

The change of accounting firm still needs to be submitted to the company's first extraordinary general meeting of shareholders in 2024 for deliberation, and will take effect from the date of approval of the company's general meeting of shareholders.

The announcement is hereby made.

Board of Directors of Loongson Zhongke Technology Co., Ltd

September 24, 2024