Bluestar Adisseo : 2021-007 Announcement on Appointment of Auditor and Internal Control Auditor for the year 2021

Stock Code: 600299

Stock Name: Adisseo

No.: 2021-007

Bluestar Adisseo Company

Announcement on Appointment of Auditor and

Internal Control Auditor for the year 2021

The board of directors and all directors guarantee that this announcement does not contain any false statement, misleading statement or material omission, and assume personal and joint liability for the authenticity, accuracy and integrity of this announcement.

Subject of this announcement:

• Name of the accounting firm to be appointed: KPMG Huazhen LLP.
• The proposal has to be submitted to the shareholders' general meeting for review.

1. Introduction of the accounting firm

1. Institution information

1.1 Background information

KPMG Huazhen was established in Beijing on 18th August 1992. It was approved by the Ministry of Finance of the People's Republic of China to be converted into a special general partnership accounting firm on 5th July 2012 and was renamed KPMG Huazhen LLP. KPMG Huazhen LLP obtained an industrial and commercial business license on 10 July 2012 and commenced operations on 1 August 2012.

KPMG Huazhen LLP's head office is located in Beijing. Its registered address is the 8th floor of Building No. 2 East of Oriental Plaza, No. 1 East Chang'an Street, Dongcheng District, Beijing.

The Senior Partner of KPMG Huazhen LLP is Zou Jun, a Chinese national, with the qualification of Chinese Certified Public Accountant ("Chinese CPA").

As at 31 December 2020, KPMG Huazhen LLP had a total of 167 partners and 927 Chinese CPAs, among which more than 170 Chinese CPAs previously engaged in providing securities related services.

The audited total revenue of KPMG Huazhen LLP for 2019 was higher than RMB 3.3 billion, among which, the audit revenue was more than RMB 3.0 billion, including the revenue of securities related services over RMB 1.3 billion, which was composed of mainland China statutory securities services related revenue over RMB 600 million and other securities related services revenue over RMB 700 million.

During 2019, KPMG Huazhen LLP audited the annual financial statements for 44 A Share listed companies and received a total fee of RMB 329 million. These listed clients mainly operated in manufacturing, financial services, mining, transportation, warehousing and postal services, wholesale and retail, real estate, information transmission and software and IT services, as well as sanitary and social work and other industries.

1.2 Investor protection capability

The sum of purchased cumulative compensation limit of professional insurance and accrued professional risk funds of KPMG Huazhen LLP exceeds RMB 200 million, which satisfies the requirements of relevant supervisory regulations.

Over the past three years, KPMG Huazhen LLP was free from civil liabilities under civil actions related to non-compliant practice behaviors.

1.3 Integrity records

Over the past 3 years, KPMG Huazhen LLP and its personnel had not been subject to any criminal penalties, administrative penalties, or self-regulatory measures or disciplinary actions imposed by stock exchanges, industry associations or other self-regulatory organizations due to non-compliant practice behaviors, except for two administrative supervision actions imposed by local securities and futures authorities in 2018, with 7 practitioners being punished.

2. Information regarding the engagement team members

2.1 Basic information

The basic information of the engagement partner, signature certified public accountant and engagement quality control reviewer of KPMG Huazhen LLP for the 2020 Annual t Audit of BlueStar Adisseo Company are as follows:

The engagement partner is Zhang Huan, who obtained the qualification of Chinese CPA in 2007. Zhang Huan joined KPMG Huazhen LLP in 1997 and provided audit services for listed clients since 1997. The Company became one of Zhang Huan's audit clients since 2020. Over the past three years, Zhang Huan signed or reviewed 16 audit reports of listed companies.

The co-signing CPA for this engagement is Lin Ying, who obtained the qualification of Chinese CPA in 2008. Lin Ying joined KPMG Huazhen LLP in 2003 and provided audit services for listed clients since 2004. The Company became one of Lin Ying's audit clients since 2019. Over the past three years, Lin Ying signed or reviewed three audit reports of listed companies.

The engagement quality control reviewer is Duan Yuhua, who obtained the qualification of Chinese CPA in 2006. Duan Yuhua joined KPMG Huazhen LLP in 2001 and provided audit services for listed clients since 2004. The Company became one of Duan Yuhua's audit clients since 2020. Over the past three years, Duan Yuhua has not signed or reviewed any audit reports of listed companies.

2.2 Integrity records for the above-mentioned members

Over the past 3 years, the above-mentioned team members had not been subject to any criminal penalties, administrative penalties, administrative supervision actions, or self- regulatory measures or disciplinary actions imposed by stock exchanges, industry associations or other self-regulatory organizations due to non-compliant practice behaviors.

2.3 Independence

The above-mentioned team members had strictly followed the independence requirement under the China Code of Ethics for Certified Public Accountants.

2.3 Audit fees

KPMG Huazhen's audit fees are determined based on factors such as the responsibilities involved in the engagement, and the complexity, work requirements, working conditions and hours required for the engagement, as well as the professional knowledge and experience of the employees at all levels who will actually participate in the engagement.

The audit fees for financial auditing and internal control auditing in the year 2020 was RMB 6.30 million and 1.71 million, respectively. The audit fees for financial auditing in the year 2020 increased by 22% compared with that in 2019, mainly due to the lower base of financial statement audit fees in 2019. In 2019 annual audit, the auditor used the results of a special audit on the financial statements of the group's major subsidiaries during the period up to 30th September 2019, resulting in a certain reduction in audit hours. Through negotiation between the company and the auditors, the audit fees in 2019 has been reduced by 22% compared with that in 2018. In 2020, the company did not employ auditors to carry out other audit work except annual audit, and the audit workload returned to the normal annual audit level. For the year 2021, the board of directors was authorized to determine service fees for this appointment, depending on the service scope, the workload and other factors. The audit fees for 2021 will be based on the audit fees for 2020 and will be determined through consultation with KPMG Huazhen on a fair and reasonable pricing ground with reference to the nature and complexity of audit service before the performance of the relevant decision-making procedures.

II. Procedures of Appointment of Auditor and Internal Control Auditor

1. Performance of the Audit Committee
   The audit committee has approved this proposal in advance and issued opinion: KPMG Huazhen LLP has qualifications for businesses related to securities and futures, has great independence and integrity record with capability of investor protection. It is always diligent and responsible, able to effectively communicate with the members of the audit committee, compose and conduct the annual audit plan, and fully qualified for the company's annual financial and internal control auditing. We agree to appoint this entity as the Company's 2021 annual financial and internal control auditor. This appointment will not prejudice the benefits of the Company and shareholders, especially the benefits of the medium and small shareholders. We agree to submit this proposal to the board for deliberation.
2. Independent Directors' Advanced Opinions and Independent Opinions
   The independent directors have approved this proposal in advance and issued opinion: KPMG Huazhen LLP has qualifications for businesses related to securities and futures and is able to manage the Company's annual financial and internal control auditing. We agree to appoint this entity as the Company's 2021 annual financial and internal control auditor and agree to authorize the board of directors to determine service fees for this appointment, depending on the service items, the workload and other factors. This appointment of annual financial and internal control auditor will not prejudice the benefits of the Company and shareholders, especially the benefits of the medium and small shareholders. We agree to submit this proposal to the shareholder's general meeting for deliberation.
3. Deliberation and voting of the board of directors
   Bluestar Adisseo Company (the "Company") deliberated and passed the proposal of appointment of auditor and internal control auditor for the year 2021 in the 14th meeting of the board held on 30th March 2021, by 9 votes in favor, 0 objection, and 0 abstention.
4. Effective date
   The proposal has yet to be submitted to the 2020 annual shareholders' general meeting for

review and will take effect from the date of approval of the general meeting of shareholders.

It is hereby announced.

Bluestar Adisseo Company

30th March 2021

(In case of discrepancies between the English version and the Chinese version of this announcement, the Chinese version, officially published and disclosed, shall prevail.)