Summary of Non-Operating Fund Occupation and Related Transactions Core Viewpoint The report provides a comprehensive overview of the non-operating fund occupation and other related transactions involving Shanghai Jinlitai Chemical Co., Ltd. for the year 2024, detailing the amounts involved and the nature of these transactions. Non-Operating Fund Occupation - The report outlines the non-operating fund occupation by major shareholders and their affiliated enterprises, indicating the total amount occupied at the beginning of 2024 and the cumulative amount for the year [1]. - Specific details regarding the nature of the occupation, accounting subjects, and reasons for the fund occupation are included, although exact figures are not provided in the summary [1]. Related Transactions - The report also summarizes the related transactions between the listed company and its affiliates, including the total amount at the beginning of 2024 and the cumulative transactions for the year [2]. - It categorizes the transactions into operating and non-operating types, providing insights into the financial interactions with major shareholders and their subsidiaries [2]. Financial Figures - The total amount of non-operating fund occupation is reported as 3,867.23 million RMB, with a cumulative occurrence of 86,083.69 million RMB for the year [2]. - The report indicates that the total amount of related transactions reached 88,928.31 million RMB, with a repayment of 1,022.61 million RMB [2].

Group 1 - The company plans to apply for a comprehensive credit limit of up to RMB 1 billion from banks and financial institutions for the year 2025 to reduce financing costs and improve capital efficiency [1][2] - The comprehensive credit includes various financing options such as working capital loans, project loans, bank acceptance bills, trade financing, and bill discounting, with collateral options including real estate, machinery, intellectual property, and cash [1][2] - The board of supervisors supports the application for the credit limit, stating it will enhance the company's operational efficiency and profitability, and the process is legally valid without harming the interests of the company and its shareholders [2] Group 2 - The authorization for the chairman to handle loans, asset pledges, and related legal documents within the approved credit limit will not require further board approval for individual financing, while any financing exceeding the limit must be approved by the board or shareholders [2] - The effective period for the approved credit limit and authorization is from the date of approval at the 2024 annual shareholders' meeting until the 2025 annual shareholders' meeting [2] - Relevant documents for review include the resolutions from the eighth board of directors and the eighth board of supervisors meetings [2]

Core Viewpoint - The internal control evaluation report of Shanghai Jinlitai Chemical Co., Ltd. indicates that as of December 31, 2024, there are no significant deficiencies in financial reporting internal controls, and the company has maintained effective internal controls in all material aspects [1][2][5]. Internal Control Evaluation Conclusion - The company has not identified any significant deficiencies in financial reporting internal controls as of the evaluation report date [2][5]. - There are no factors affecting the effectiveness of internal control evaluations from the evaluation report date to the report issuance date [2][5]. Internal Control Evaluation Work Evaluation Scope - The evaluation covers all major units, businesses, and high-risk areas, with total assets and revenue of the evaluated units accounting for 100% of the consolidated financial statements [3][5]. Identified Deficiencies - The company identified one important deficiency in non-financial reporting internal controls related to funds management, with a total of 930.24 million yuan involved [5][6]. - The company has implemented corrective measures to address the identified deficiencies and enhance compliance awareness [6]. Internal Control System Overview - The company has established a comprehensive internal control system that operates effectively, although there are notable deficiencies in funds and procurement management [6][12]. - The company has received an audit report with a disclaimer of opinion regarding its financial statements and internal control [6]. Control Environment - The company has established a governance structure with a general meeting of shareholders, a board of directors, and a supervisory board, ensuring clear responsibilities and checks and balances [8][9]. Risk Identification and Assessment - The company's main business revenue is derived from automotive coatings, which are closely tied to the automotive industry's economic conditions [9][10]. - Fluctuations in raw material prices significantly impact production costs and overall business performance [10][11]. Control Activities - The company has implemented various control measures across different operational processes, including sales, procurement, production, and financial management [12][13]. - The company has established a performance evaluation system linked to employee compensation and promotions [14]. External Investment Management - The company has a structured approach to external investment management, ensuring compliance with its development strategy and enhancing competitive capabilities [15]. - A recent acquisition of 34% equity in Shenzhen Yitai Technology Co., Ltd. was approved by the board of directors [15]. Information Disclosure Control - The company has established a management system for information disclosure to ensure accurate and timely reporting [16][17]. - The company has not engaged in any related party transactions in 2024 [16]. Internal Supervision - The supervisory board oversees the company's operations, ensuring compliance with laws and regulations [18][19]. - An internal audit department operates independently to monitor and evaluate the company's activities and internal controls [19]. Improvement Measures - The company plans to continuously improve its internal control system to adapt to changing environments and ensure sustainable development [20].

Core Viewpoint - The audit committee of Shanghai Jinlitai Chemical Co., Ltd. has conducted an evaluation of the performance of the accounting firm for the year 2024, highlighting the appointment of Zhongxinghua Accounting Firm and the audit results, including the issuance of an audit report with a disclaimer of opinion on the financial statements and a negative opinion on internal controls [1][3]. Group 1: Basic Information of the Accounting Firm - Zhongxinghua Accounting Firm, established in 1993, is headquartered in Beijing and has 199 partners and 1,052 registered accountants as of December 31, 2024 [1]. - The firm had 522 registered accountants who signed audit reports for securities services in 2024 [1]. Group 2: Appointment Process of the Accounting Firm - The company held a series of meetings in December 2024, including the eighth board meeting and the first temporary shareholders' meeting, to approve the appointment of Zhongxinghua Accounting Firm for the 2024 financial report and internal control audit [2]. - The audit committee unanimously agreed to submit the proposal for the appointment to the board, with independent directors expressing their consent [2]. Group 3: Audit Performance of the Accounting Firm - Zhongxinghua conducted the audit in accordance with the auditing standards and communicated with the company's management regarding various aspects of the audit, including independence, audit team composition, risk assessment, and internal control [2]. - The firm issued a disclaimer of opinion on the financial statements and a negative opinion on the internal controls, along with special reports on non-operating fund occupation and related party transactions [3]. Group 4: Supervision by the Audit Committee - The audit committee reviewed the qualifications and professional capabilities of Zhongxinghua, concluding that the firm met the requirements for the annual audit and that the reasons for changing the accounting firm were appropriate [3]. - The committee emphasized the importance of timely and accurate reporting by the accounting firm and maintained effective communication throughout the audit process [5]. Group 5: Overall Evaluation - The audit committee adhered to relevant regulations and effectively supervised the accounting firm's performance, ensuring an independent and objective audit of the company's financial status and internal controls [5]. - The committee recognized Zhongxinghua's commitment to fair and objective auditing practices, reflecting good professional ethics and business quality [5].

Core Viewpoint - The company plans to use up to RMB 500 million of its idle funds to purchase low-risk financial products, aiming to enhance investment returns while ensuring normal business operations are not affected [1][2][4]. Investment Overview - The company intends to invest a maximum of RMB 500 million of its idle funds in low-risk financial products, with the ability to roll over the funds within this limit [2][3]. - The investment will be limited to financial products with a maturity of no more than one year and will not include other securities investments or products linked to stocks or unsecured bonds [2][4]. Risk Control Measures - The company will select reputable financial institutions with strong credit ratings for the investment and will formalize agreements detailing the investment amount, duration, and responsibilities [2][3]. - Internal audits and oversight by independent directors and the supervisory board will be implemented to monitor the use of funds [3][4]. Impact on the Company - The investment in low-risk financial products is expected to enhance the company's investment returns without disrupting normal cash flow or core business operations [3][4]. Approval Process - The proposal was approved in the board and supervisory meetings held on June 30, 2025, and will be submitted for shareholder approval [3][4].

Core Viewpoint - The audit report for Shanghai Jinlitai Chemical Co., Ltd. indicates significant risks related to fund transfers and potential misrepresentation in financial statements, leading to a non-standard audit opinion [2][3][6]. Group 1: Fund Transfer Issues - In 2024, Jinlitai transferred a total of 931 million RMB to related trading companies and received back 930 million RMB, with a remaining balance of 17.87 million RMB at year-end [2]. - There were abnormal fund transfers where related trading companies transferred similar amounts to non-supplier entities, raising concerns about potential fund occupation channels [3]. - The audit could not fully trace the funds to determine the ultimate beneficiaries or the purpose of the funds, indicating a significant risk of non-operational fund occupation [3][6]. Group 2: Equity Transfer Concerns - Jinlitai received a total of 137.53 million RMB as a repayment for equity acquisition from Shihezi Yike, but the funds were subsequently transferred to related trading companies, complicating the audit trail [3][4]. - The second acquisition of equity from Xiamen Yike involved 323 million RMB, with similar issues regarding the tracing of funds and potential misrepresentation of the transaction's commercial substance [5][6]. - The audit report highlights the inability to ascertain the true nature of these transactions and whether they involve non-operational fund occupation [5][6]. Group 3: Audit Opinion and Implications - The audit firm issued a non-opinion report due to the inability to obtain sufficient evidence regarding the financial statements, which could have significant implications for the company's financial health [6][7]. - The overall importance level for the audit was set at 3.66 million RMB based on the company's revenue, indicating the scale of potential misstatements [6]. - The audit firm could not determine the specific financial impact of the identified issues on Jinlitai's financial statements [6][7].

上海金力泰化工股份有限公司 非经营性资金占用及其他关联资金往来情况 汇总表的专项审核说明 中兴华会计师事务所(特殊普通合伙) ZHONGXINGHUA CERTIFIED PUBLIC ACCOUNTANTS LLP 地址：北京市丰台区丽泽路 20 号丽泽 SOHO Ｂ座 20 层 邮编：100073 电话：(010) 51423818 传真：(010) 51423816 目 录 一、专项说明 地 址 （ l o c a t i o n ）： 北 京 市 丰 台 区 丽 泽 路 2 0 号 丽 泽 S O H O B 座 20 层 电 话 （ t e l ）： 0 1 0 - 5 1 4 2 3 8 1 8 传 真 （ f a x ）： 0 1 0 - 5 1 4 2 3 8 1 6 关于上海金力泰化工股份有限公司关联方 非经营性资金占用及其他关联资金往来情况汇总表 的专项审核报告 中兴华专字（2025）第 430428 号 上海金力泰化工股份有限公司全体股东： 二、附表 中兴华会计师事务所（特殊普通合伙） Z H O N G X I N G H U A C E R T I F I E D P U B L I ...

Core Points - Shanghai Jinlitai Chemical Co., Ltd. announced the resignation of Mr. Tang Yang from the board of directors and all senior management positions, effective immediately upon delivery of his resignation report [1] - The board of directors approved the adjustment of the members of the strategic committee, appointing Mr. Wu Chunchao as a member, while other committee members remain unchanged [1] Summary by Sections Board Resignation - Mr. Tang Yang submitted his resignation report and will no longer hold any positions within the company [1] - His resignation does not affect the legal number of board members [1] Committee Adjustments - The strategic committee's composition was adjusted to include Mr. Wu Chunchao as a member, while the chairperson remains Mr. Luo Dian [1] - The terms of the adjusted committee members will align with the current board's term [1]

Core Viewpoint - Shanghai Jinlitai Chemical Co., Ltd. received a negative internal control audit report for the year 2024, indicating significant deficiencies in its internal control systems, particularly in financial management and procurement processes [1][4]. Group 1: Internal Control Deficiencies - The audit identified major defects in internal controls, particularly related to the management of funds and procurement processes, which were not effectively executed [1][3]. - A total of 931 million yuan was transferred to related traders, with 930 million yuan returned, indicating a lack of proper approval processes for significant payments [1][3]. - The company failed to effectively plan, decide, and approve the use of large amounts of returned funds, highlighting serious deficiencies in daily fund management [2][3]. Group 2: Board's Response - The board acknowledged the audit report as an objective reflection of the company's situation and recognized the professional judgment of the auditing firm [4]. - The board has identified the internal control deficiencies and included them in the self-evaluation report of internal controls [4]. Group 3: Improvement Measures - The company plans to optimize financial reporting processes and strengthen internal control supervision over significant business activities [5]. - There will be an emphasis on enhancing the audit department's functions to ensure effective execution of internal control systems [5]. - Training will be provided to management personnel to improve awareness of compliance with relevant laws and regulations [5].

Core Viewpoint - The company has achieved significant growth in net profit and operational efficiency through strategic market expansion, product development, and cost management initiatives [2][3][4]. Group 1: Financial Performance - The company reported a net profit attributable to shareholders of approximately 30.91 billion yuan, reflecting a 115.66% increase year-on-year [3]. - The net profit after deducting non-recurring gains and losses was approximately 12.02 million yuan, indicating a substantial improvement [4]. - The company’s operating income showed a slight decrease of 0.44% compared to the previous year [3]. Group 2: Market and Industry Insights - In 2024, the automotive industry in China achieved production and sales of 31.28 million and 31.44 million vehicles, respectively, marking year-on-year growth of 3.7% and 4.5% [2]. - The new energy vehicle sector experienced rapid growth, with annual production and sales surpassing 10 million units, accounting for over 40% of total sales [2]. Group 3: Corporate Governance and Management - The board of directors has been actively involved in maintaining corporate governance and has established several committees to oversee strategic, audit, nomination, and compensation matters [5][6]. - Independent directors have played a crucial role in safeguarding the interests of all shareholders, particularly minority shareholders, by providing constructive feedback on key decisions [8]. - The company has committed to enhancing investor relations through various channels to ensure transparent communication and engagement with stakeholders [9].