Share’s code： 000550 Share’s Name： Jiangling Motors No.: 2024-039
200550 Jiangling B
Jiangling Motors Corporation, Ltd.
Public Announcement on Proposed Change of CPA Firm
Jiangling Motors Corporation, Ltd. and its Board members undertake that the
information disclosed herein is truthful, accurate and complete and does not
contain any false statement, misrepresentation or major omission.
Important tip:
1. Name of the CPA firm proposed to appoint: Ernst & Young Hua Ming LLP
(hereinafter referred to as “Ernst & Young Huaming”).
2. Name of the former-appointed CPA firm: PricewaterhouseCoopers Zhong Tian LLP
(hereinafter referred to as “PwC”).
3. Reasons for the change of CPA firm and dissenting opinion from the former CPA
firm:
In view of the possible impact of the penalties against PwC, recently issued by Ministr y
of Finance of the People’s Republic of China, on the work of the Company’s 2024
annual report, and on the principle of prudence, Jiangling Motors Co., Ltd (hereina fter
referred to as “JMC” or the “Company”) proposed dismissal of PwC. After a public
invite bidding process, the Company proposed to appoint Ernst & Young Hua Ming
LLP as the Company's External Auditor and C-SOX Auditor for the years of 2024-
2026. The Company has communicated with the predecessor and successor CPA firms
regarding the proposed change of CPA firm, and all parties have been clearly infor med
of this matter and confirmed that they have no objections.
4. The change is in compliance with the Measures for the Administration of Selecting
Accounting Firms for State-Owned Enterprises and Listed Companies (Caikuai [2023]
No. 4).
I. Basic Information of the CPA Firm proposed to appointe
1. Firm Information
i. Basic Information
Ernst & Young Huaming CPAs (Special General Partnership) established in September
1992, and completed its localization and conversion in August 2012 from a Chinese -
foreign cooperative limited liability firm to a special general partnership firm. Ernst &
Young Huaming is headquartered in Beijing, with its registered office at Room 01-12,
17th Floor, Ernst & Young Building, Oriental Plaza, No. 1 East Chang'an Street,
Dongcheng District, Beijing. It has 245 partners as of the end of 2023, and the chief
partner is Mr. Mao Anning. Ernst & Young Huaming has always focused on talent
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development, having nearly 1,800 licensed CPAs by the end of 2023. Among them,
there are more than 1,500 practicing CPAs with experience in securities-rela ted
business services, nearly 500 certified public accountants who have signed audit reports
on securities services engagements.
Ernst & Young Hua Ming's total business revenue in 2023 is RMB 5,955 million, with
income of audit business amounting to RMB 5,585 million and income of securities
business amounting to RMB 2,438 million. In 2023, there were 137 customers who
were A-share listed companies and whose annual reports were audited by Ernst &
Young Hua Ming, with a total fee of RMB 905 million. The major industries of these
listed companies involve manufacturing, finance, wholesale and retail trade, mining,
information transmission, software and information technology services, and leasing
and business services. Within the audited clients, there are 3 listed companies engaged
in the same industry as the Company.
ii. Investor Protection Capability
Ernst & Young Huaming has good investor protection, occupational risk funds and
occupational insurance have been accrued in accordance with relevant laws and
regulations, and the insurance covers the Beijing head office and all branch offices. The
sum of the accumulated compensation limit of the accrual of occupational risk fund and
the purchased occupational insurance exceeds RMB 200 million. Ernst & Young
Huaming has not incurred any civil liability in relevant civil litigation for its practice in
the past three years.
iii. Integrity Record
Ernst & Young Huaming and its practitioners have not been subject to any crimina l
penalties or disciplinary actions by industry associations and other self-regula tor y
organizations for their practice in the past three years. Received one administrative
sanction from the industry authority against two practitioners. Received two warning
letters from the securities regulatory authorities, involving five practitioners, the
aforementioned decision to issue a warning letter is a supervisory and manageme nt
measure, not an administrative penalty. Received one self-regulatory measure from the
stock exchange in the form of a written warning issued to two practitioners, which also
did not involve penalties. The foregoing does not affect Ernst & Young Huaming's
ability to continue to undertake or perform securities services and other business.
2. Engagement Information
i. Basic Information
Engagement Partner and Signing CPA: Mr. Qiao Chun, obtaining the CPA qualifica tio n
in 2000, having been engaged in auditing of listed companies since 1997, having been
practicing with Ernst & Young Huaming since 2008, will provide auditing services for
the Company since 2024, and having signed/reviewed the annual reports/inter na l
control audits of 5 listed companies in the past three years, covering industries such as
manufacturing.
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Engagement Signing CPA: Mr. Yuan Yong, obtaining the CPA qualification in 2016,
having been engaged in auditing of listed companies since 2014, having been practicing
with Ernst & Young Huaming since 2014, will provide auditing services for the Company
since 2024, and having signed/reviewed the annual reports/internal control audits of 1
listed companies in the past three years, covering industries such as manufacturing.
Engagement Quality Reviewer: Ms. Fu Yi, obtaining the CPA qualification in 2003,
having been engaged in auditing of listed companies since 2001, having been practicing
with Ernst & Young Huaming since 2004, will provide auditing services for the
Company since 2024, and having signed/reviewed the annual reports/internal control
audits of 4 listed companies in the past three years, covering industries such as
manufacturing.
ii. Integrity record
The above project partners, signing CPAs and project quality control reviewers have
not been subject to criminal penalties for their practice in the past three years, or
administrative penalties, supervisory and management measures by the CSRC and its
dispatched agencies, industry authorities, etc., or self-regulatory measures or
disciplinary actions by self-regulatory organizations such as stock exchanges and
industry associations.
iii. Independence
Ernst & Young Huaming and the above project partners, signing CPAs and project
quality control reviewers did not violate the independence requirements of the Code of
Ethics for Certified Public Accountants in China.
iv. Audit Fees
The Company conducts the selection and appointment of CPA firms by public invite
bidding process. The annual audit fees payable to Ernst & Young Huaming by the
Company in respect of the financial statement audit and internal control audit for each
year from 2024 to 2026 amount to RMB 2.2 million in aggregate, of which RMB 1.77
million is for financial statement audit and RMB 0.43 million is for internal control
over financial reporting audit, compared to the same caliber of audit services in 2023,
the above audit fees decreased by RMB 80 thousands. The audit fees are determined by
accordance with the audit workload and the principles of fairness and reasonableness.
II. Description of the proposed change of the CPA firm
1. Information on the former CPA firm and audit opinion for the previous year
The Company's former CPA firm, PricewaterhouseCoopers Zhong Tian LLP, has
provided audit services to the Company for 22 consecutive years, and the type of audit
opinion for the previous year was a standard unqualified opinion. There are no
instances where the Company dismissed PwC who had been engaged to perform audit
services.
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2. Reasons for the proposed change of CPA firm
In view of the possible impact of the penalties against PwC, recently issued by Ministr y
of Finance of the People’s Republic of China, on the work of the Company’s 2024
annual report, and on the principle of prudence, the Company proposed dismissal of
PwC.
3. Communication between the Company and the former-appointed CPA firm
The Company has communicated with the predecessor and successor CPA firms
regarding the proposed change of CPA firm, and all parties have been clearly infor med
of this matter and confirmed that they have no objections. The predecessor and
successor CPA firms will actively communicate and cooperate with each other in
accordance with the relevant regulations.
III. Procedures to be Performed for the Proposed Change of the CPA Firms
1. Opinion of the Audit Committee
The Audit Committee of the Board of Directors of the Company held a meeting on
October 11, 2024 to review the report on “Selection of External Auditor” of the
Company. The Audit Committee has fully understood and reviewed the professiona l
competence, investor protection ability, integrity status and independence of Ernst &
Young Hua Ming LLP, and is of the opinion that it is capable of meeting the
requirements for providing audit services to the Company, and that the reasons for the
change of the CPA firm are sufficient and appropriate. So the Audit Committee agreed
the Company to appoint Ernst & Young Hua Ming LLP as the auditing agency for the
financial statements and internal control over financial reporting of the Company for
the years of 2024-2026, and agreed to submit the proposal to the Board of Directors
and the Shareholders’ Meeting for deliberation.
2. Deliberation and Voting of the Board of Directors
The Board of Directors of the Company deliberated and passed the “Proposal on
Change of External Auditor and C-SOX Auditor” by a vote of 9 in favor, 0 against and
0 abstention.
3. Effective Date
The change of the appointment of the CPA Firm is also subject to the deliberation by
the Shareholders’ Meeting of the Company and shall take effect since the date of
deliberation and approval by the Shareholders’ Meeting of the Company.
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IV. Reference Documents
1. Resolutions of the Board of Directors of Jiangling Motors Co., Ltd.;
2. Resolutions of the Audit Committee of Jiangling Motors Co., Ltd.;
3. Statement of Ernst & Young Hua Ming LLP as a CPA Firm Proposed to be
Appointed on its Basic Information.
Board of Directors
Jiangling Motors Co., Ltd
October 15, 2024
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