Company Announcements

SDIC Power Holdings CO., LTD.  

(GDR under the symbol: "SDIC")

NOTICE OF THE 2023 SEVENTH EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2023 Seventh Extraordinary General Meeting of SDIC Power Holdings CO., LTD. will be held at Room 207, No.147 Xizhimen Nanxiao Street, Xicheng District, Beijing, the PRC, on Friday 22 December 2023 at 14:00 p.m., for the purpose of considering, and if thought fit, passing the following resolution.

ORDINARY RESOLUTION

1. To consider and approve the Proposal on Changing the Accounting Firm

The Board of Directors of SDIC Power Holdings CO., LTD.

December 5, 2023

The resolutions hereunder contain the English translation of the Chinese version of "Meeting materials for the 2023 Seventh Extraordinary General Meeting" as published on the website of the Shanghai Stock Exchange, and are provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.

Proposal I

SDIC Power Holdings Co., Ltd.

Proposal on Changing the Accounting Firm

Dear shareholders and shareholder representatives:

SDIC Power Holdings Co., Ltd (hereinafter referred to as the Company) plans to hire BDO China Shu Lun Pan CPAs (Special General Partnership) (hereinafter referred to as the Firm) as the audit institution for the year 2023, which will take effect from the date of approval by the Company's general meeting of shareholders. The details are as follows:

1. Basic facts of the proposed accounting firm

(1) About the accounting firm

1. Basic information

(1) Accounting firm: BDO China Shu Lun Pan CPAs (Special General Partnership)

(2) Date of establishment: January 24, 2011

(3) Organizational form: special general partnership enterprise

(4) Registered address: 4F, No. 61, East Nanjing Rd, Huangpu District Shanghai

(5) Chief partner: Mr. Zhu Jiandi

(6) As of December 31, 2022, there were 267 partners or shareholders and 2, 392 registered accountants in the Firm. More than 674 registered accountants had signed audit reports on securities services.

(7) The audited revenue of the Firm in 2022 reached 4.614 billion yuan, including 3.408 billion yuan for audit and 1.516 billion yuan for securities.

(8) In 2022, the Firm audited the annual reports of 672 listed companies, with a total fee of 802 million yuan. The main industries involved included manufacture of computers, communication equipment and other electronic equipment, manufacture of specialized equipment, power and thermal production and supply, software and IT service, chemical raw materials and manufacture of chemical products, pharmaceutical manufacture, wholesale and retail, real estate, mining, and so forth. The Firm even audited 4 other listed companies in the same industry.

2. Investor protection capability

The Firm has purchased occupational insurance that complies with relevant regulations and covers civil liability for providing audit services in accordance with the law. The cumulative compensation limit for its occupational insurance in 2022 was 1.25 billion yuan.

In the past three years, the Firm has never been liable for civil liability in civil litigation related to its professional practices.

3.Credibility record

Over the past three years, the Firm has been subject to zero criminal penalty, two administrative penalties, thirty enforcements of supervision and management, zero enforcement of self-supervision and two disciplinary actions for its professional practices. Its 72 employees have been subject to zero criminal penalty, two administrative penalties, thirty-one enforcements of supervision and management, and zero enforcement of self-supervision due to their professional practices during the same period.

(2) About the project

1.Basic information

Proposed signing partner: Ms. Shi Aihong, who obtained the qualification of Chinese CPA in 2010, started auditing listed companies in 2012, started practicing for the Firm in 2012, and began providing audit services for the Company in 2023, and who has signed and reviewed for over 7 listed companies in the past three years.

Proposed quality-control reviewer (independent review partner): Mr. Xie Dongliang, who obtained the qualification of Chinese CPA in 2012, started auditing listed companies in 2012, started practicing for the Firm in 2022, and began providing audit services for the Company in 2023, and who has signed and reviewed for over 3 listed companies in the past three years.

Proposed signing CPA: Mr. Zhang Guanwei, who obtained the qualification of Chinese CPA in 2020, started auditing listed companies in 2020, started practicing for the Firm in 2020, and began providing audit services for the Company in 2023, and who hasn't signed any listed companies in the last three years.

2.Credibility record

The project partner, signing CPA, and quality-control reviewer have not been criminally punished for their professional practices in the past three years, nor have they been subject to any administrative penalties or enforcement of supervision and management from China Securities Regulatory Commission and its dispatched agencies or relevant competent authorities, and nor have they been subject to any enforcement of self-supervision or disciplinary actions from self-supervisory organizations such as stock exchanges and professional associations.

3.Independence

The Firm, project partner, signing CPA, quality-control reviewer and other practitioners have not violated the requirements for independence stated in China Code of Ethics for Certified Public Accountants.

4.Audit fee

The audit fee for the 2023 annual report is 4.32 million yuan, and the fee for internal control audit is 0.98 million yuan, with a decrease of 2.45 percent compared to the previous year. This is determined by the professional skills, types of work and workload as well as the number of employees, working days and daily fee for each employee required by audit services that the Firm provides.

2. Explanation of the proposed change of accounting firms

(1) The predecessor accounting firm and its audit opinions for the previous year

The predecessor audit firm, ShineWing Certified Public Accountants, had provided audit services to the Company for two consecutive years, during which ShineWing Certified Public Accountants adhered to the principle of independent auditing, issued its audit opinions fairly and independently after diligent and responsible work, reflected the Company's financial statements and its internal control in an objective, fair and accurate way, fulfilled the responsibilities of a financial audit firm effectively, and safeguarded the legitimate rights and interests of the Company and its shareholders from a professional perspective. In 2022, ShineWing Certified Public Accountants issued an unqualified audit report on the Company. There is no situation where the Company has terminated after entrusting ShineWing Certified Public Accountants to do some audit work.

(2) Reasons for the proposed change of accounting firms

According to the relevant provisions of The Notice of Issuing the Management Measures for Selecting Accounting Firms for State-owned Enterprises and Listed Companies (Cai Kuai [2023] No. 4) by the Ministry of Finance of the People's Republic of China, the State-owned Assets Supervision and Administration Commission of the State Council, and China Securities Regulatory Commission, in order to ensure the independence and objectivity of audit work, the Company plans to hire BDO China Shu Lun Pan CPAs for auditing the Company's financial settlement and internal control in 2023.  

(3) Communications between the Listed Company and the predecessor and successor accounting firms

The Company has fully communicated with both the predecessor and successor accounting firms regarding the change of accounting firms, and all parties have clearly understood this matter and confirmed that there are no objections. The predecessor and successor accounting firms will communicate and cooperate in accordance with the requirements stated in No. 1153 of China Registered Accountants Auditing Standards: Communications between Predecessor and Successor CPAs.

3. The procedure to be fulfilled for the proposed change of accounting firms

(1) Opinions from the audit committee

The audit committee of the Board of Directors has had a thorough view of BDO China Shu Lun Pan CPAs in terms of its practice, professional qualifications and credibility status, and had a review of its independence, professional competence, investor protection capability and the appropriateness of changing the accounting firm. Hence the audit committee believes that BDO China Shu Lun Pan CPAs can meet the audit requirements of the Company for the year 2023 with its rich experience in auditing listed companies and its abilities and qualifications to provide professional financial audit services for the Company, and agrees to hire BDO China Shu Lun Pan CPAs for auditing the Company's financial settlement and internal control in 2023 and to submit the above matters to the Board of Directors for deliberation.

(2) Effective date

This proposal on changing the accounting firm still needs to be submitted to the general meeting of shareholders of the Company for deliberation and will take effect from the date of its approval.

The above proposal was approved on December 5, 2023, at the 20th meeting of the 12th Board of Directors and the 11th meeting of the 12th Supervisory Committee of the Company, and is hereby submitted to all shareholders and their representatives for deliberation.

Please deliberate on the above proposal.