Stock Code: 600461 listing place: Shanghai Stock Exchange Stock abbreviation: Jiangxi Hongcheng Environment Co.Ltd(600461) Jiangxi Hongcheng Environment Co.Ltd(600461)
Reply to the notice of the CSRC on the first feedback on the examination of administrative licensing projects
Independent financial advisor Report
No. 358, Beijing South Road, high tech Zone (new urban area), Urumqi, Xinjiang
Room 2004, 20th floor, Dacheng International Building
February, 2002
China Securities Regulatory Commission:
In accordance with the notice of the CSRC on the first feedback on the examination of administrative licensing projects (No. 213005) (hereinafter referred to as the "feedback") issued by the Commission on November 26, 2021, Jiangxi Hongcheng Environment Co.Ltd(600461) (hereinafter referred to as " Jiangxi Hongcheng Environment Co.Ltd(600461) " and "listed company") has carefully studied and implemented the feedback together with the target company and other intermediaries, Issued the reply of Jiangxi Hongcheng Environment Co.Ltd(600461) on the notice of feedback on the examination of administrative licensing projects by CSRC (hereinafter referred to as the "reply to this feedback"), In accordance with the requirements of the feedback, supplementary disclosure was made in the report on Jiangxi Hongcheng Environment Co.Ltd(600461) issuing shares and paying cash to purchase assets and raising supporting funds and related party transactions (Draft) (hereinafter referred to as the "restructuring report"). The independent financial consultant Shenwan Hongyuan Group Co.Ltd(000166) securities underwriting and recommendation Co., Ltd., the legal consultant Jiangxi Huabang law firm, the audit institution Daxin Certified Public Accountants (special general partnership) and the asset appraisal institution Zhongming international asset appraisal (Beijing) Co., Ltd. checked relevant issues and issued professional opinions according to the requirements of the feedback. The replies of listed companies, independent financial advisers, legal advisers, audit institutions and evaluation institutions to the feedback are summarized and explained as follows. Please review them. Unless otherwise specified, the interpretation adopted in the reply to this feedback is consistent with the restructuring report. The financial data and financial indicators quoted in the reply to this feedback, unless otherwise specified, refer to the financial data in the consolidated statement and the financial indicators calculated based on such financial data. The discrepancy between the total number and the mantissa of the sum of the sub item values in the response to this feedback is caused by rounding.
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According to the application documents and public information, 1) Jiangxi Dingyuan ecological environmental protection Co., Ltd. (hereinafter referred to as Dingyuan ecology or the underlying asset) is a newly established shareholding company. Among the four subsidiaries, Jiangxi Hongyuan Environmental Development Co., Ltd. (hereinafter referred to as Hongyuan environment) and Nanchang Lvyuan environmental water Co., Ltd. (hereinafter referred to as Lvyuan environment) have been established for a short time, Both were established in December 2020 and the business operation approval time is July 2021. They are mainly engaged in the investment and operation of BOT projects such as food waste, landfill leachate treatment and leachate concentrate treatment projects. 2) As of the signing date of the restructuring report, the above two companies have not signed the project franchise agreement and have not obtained the construction project planning and construction permit, but the construction of relevant projects has entered the closing stage. The land for BOT project is allocated by Nanchang Water Industry Group Co., Ltd. (hereinafter referred to as water industry group). 3) Hongyuan environment and Lvyuan environment both suffered losses in the first half of 2021, and the asset liability ratio exceeded 95% at the end of June 2021; At the end of 2021, the proportion of inventory and project liabilities accounted for nearly 100% of the total assets of 2022. Please your company: 1) supplement and disclose whether Hongyuan environment and Lvyuan environment have obtained the franchise right through bidding or competitive negotiation, and whether the construction of BOT project without business operation approval, signing the franchise agreement and obtaining the construction project planning and construction permit complies with relevant laws and regulations, Whether the above circumstances comply with the provisions of item 1, paragraph 1, Article 11 of the measures for the administration of major asset restructuring of listed companies (hereinafter referred to as the "restructuring measures"), and whether there will be major uncertainty in the franchise business. 2) Supplementary disclosure shall be made on whether Hongyuan environment and Lvyuan environment are the project company, the internal organization setting and staffing of the company, and whether the business, assets, finance and personnel are independent of the water industry group and its related parties. 3) Supplementary disclosure of whether the leased allocated land complies with the provisions of land management laws and regulations and performs relevant approval procedures. Whether the land for franchise projects completely depends on the leasing of water industry group will affect the independence of the above two companies. 4) Combined with the fact that the proportion of Engineering accounts payable in liabilities is close to 100%, supplementary disclosure shall be made on whether the engineering accounts payable of the above two companies are from related party transactions. If so, supplementary disclosure shall be made on whether the transaction pricing is fair and the specific measures to ensure the independence of the above two companies after the completion of the transaction. 5) In combination with the above, analyze and supplement the necessity of purchasing flood source environment and green source environment in this transaction, and whether it complies with the provisions of item 1, paragraph 1, Article 43 of the reorganization measures. Independent financial advisers, lawyers and accountants are invited to check and express clear opinions. reply:
Whether the start-up of BOT project construction with business operation approval, without signing the franchise agreement and without obtaining the construction project planning and construction permit complies with the provisions of relevant laws and regulations, and whether the above circumstances comply with the provisions of item 1, paragraph 1, Article 11 of the administrative measures for major asset restructuring of listed companies (hereinafter referred to as the restructuring measures), Whether there will be significant uncertainty in the franchise business
(I) Hongyuan environment and Lvyuan environment did not obtain the franchise right through bidding or competitive negotiation, but the franchise business will not have significant uncertainty due to the defects of the acquisition procedure
1. The franchise rights of Hongyuan environment and Lvyuan environment were not obtained through bidding or competitive negotiation. The details are as follows:
Project company project name project franchise right franchise agreement signing mode agreement name right granting party signing date
Nanchang solid waste office
Manage circular economy
Hongyuan environmental food waste Department BOT Industrial Park food waste Nanchang city December 2021 the government directly managed the waste treatment project, which was awarded by the Municipal Administration on December 23
Project franchise
agreement
Nanchang solid waste office
Manage circular economy
Lvyuan environmental Leachate Treatment BOT Industrial Park percolation Nanchang city December 2021 government direct project liquid treatment project awarded by the Municipal Administration on December 23
franchise
agreement
Nanchang solid waste office
Manage circular economy
Landfill leachate Industrial Park, Nanchang City, December 2021, the government directly treated the green source environmental concentrate, and BOT leachate concentration was awarded by the Municipal Administration on December 23
Project liquid treatment project
franchise
agreement
2. According to relevant laws and regulations, there are procedural defects in the way of obtaining franchise rights
(1) Measures for the administration of franchising of municipal public utilities (Order No. 126 of the Ministry of construction of the people's Republic of China, effective from May 1, 2004)
Article 2 of the measures for the administration of franchising of municipal public utilities stipulates: "these Measures shall apply to the franchising of urban water supply, gas supply, heat supply, public transportation, sewage treatment, garbage treatment and other industries according to law.
”Article 4 of the measures for the administration of franchising of municipal public utilities stipulates: "the competent departments of municipal public utilities under the people's governments of municipalities, cities and counties directly under the central government shall be responsible for the specific implementation of franchising of municipal public utilities within their respective administrative regions in accordance with the authorization of the people's governments (hereinafter referred to as the" competent departments ") Article 8 of the measures for the administration of franchising of municipal public utilities stipulates: "the competent department shall select investors or operators in accordance with the following procedures: (I) propose franchising projects of municipal public utilities, submit them to the people's governments of municipalities, cities and counties directly under the central government for approval, publicly publish bidding conditions to the public and accept bids; (II) According to the bidding conditions, conduct qualification examination and scheme pre examination for the bidders with franchise rights, and recommend qualified bidding candidates; (III) organize the review committee to review according to law, and select the best object of franchise right after questioning and public reply; (IV) publicize the bid winning results to the public for no less than 20 days; (V) after the expiration of the publicity period, if there is no objection to the bid winner, a franchise agreement shall be signed with the bid winner (hereinafter referred to as the "enterprise with franchise right") with the approval of the people's Government of the municipality, city or county directly under the central government. "
(2) Measures for the administration of franchising of infrastructure and public utilities (Decree No. 25 of the national development and Reform Commission of the people's Republic of China, the Ministry of finance of the people's Republic of China, the Ministry of housing and urban rural development of the people's Republic of China, the Ministry of transport of the people's Republic of China, the Ministry of water resources of the people's Republic of China and the people's Bank of China, effective as of June 1, 2015)
Article 2 of the measures for the administration of franchising of infrastructure and public utilities stipulates: "these Measures shall apply to franchising activities in the fields of infrastructure and public utilities such as energy, transportation, water conservancy, environmental protection and municipal engineering within the territory of the people's Republic of China." Article 15 of the measures for the administration of franchising of infrastructure and public utilities stipulates: "According to the approved implementation plan of the franchise project, the implementation agency shall select the franchisee through bidding, competitive negotiation and other competitive methods. If the construction and operation standards and regulatory requirements of the franchise project are clear and the market competition in relevant fields is relatively sufficient, the franchisee shall be selected through bidding." In conclusion, according to the relevant provisions of the measures for the administration of franchise of municipal public utilities and the measures for the administration of franchise of infrastructure and public utilities, there are some defects in the way Hongyuan environment and Lvyuan environment did not obtain the franchise right through bidding and competitive negotiation.
3. The franchise business will not have significant uncertainty due to the defects of the acquisition procedure
(1) According to relevant regulations, defects in acquisition procedures will not invalidate the franchise agreement
The measures for the administration of franchising of municipal public utilities and the measures for the administration of franchising of infrastructure and public utilities do not stipulate that the selection of franchisees without bidding or competitive negotiation will lead to the invalidation and cancellation of the franchise agreement or the cancellation of the franchise right and franchise project. In addition, the measures for the administration of franchising of municipal public utilities and the measures for the administration of franchising of infrastructure and public utilities, as departmental rules, do not belong to "laws or administrative regulations". Therefore, failure to perform bidding or competitive negotiation procedures does not belong to Article 153 of the civil code of the people's Republic of China, "Violation of mandatory provisions of laws and administrative regulations" leads to the invalidation of the contract or civil act.
(2) The defect of the acquisition procedure does not belong to the situation specified in the termination clause in the franchise agreement
According to the franchise agreement obtained by Hongyuan environment and Lvyuan environment, the main contents of the termination clause are as follows:
No. company name project early termination clause
(1) Due to force majeure or when one party deems it necessary, this agreement can be terminated in advance through negotiation between Party A and Party B, and an early termination agreement can be signed. If no agreement can be reached through negotiation, either party shall not terminate this agreement in advance without authorization; (2) Both parties terminate this agreement due to the cancellation of the franchise right.
If Party B commits any of the following acts during the franchise period, Party A shall terminate the agreement according to law, cancel its franchise right and take over temporarily: (1) transfer or lease the franchise right without authorization; （2）
