Huajin Securities Co., Ltd
Report on Lb Group Co.Ltd(002601) regular on-site inspection in 2021
Name of Sponsor: Huajin Securities Co., Ltd. abbreviation of the sponsored company: Lb Group Co.Ltd(002601)
Name of Sponsor: Wang Xudong Tel.: 20021-5588
Name of sponsor representative: Meng Chao Tel.: 021-20655588
Names of on-site inspectors: Wang Xudong, Wang Bing
Corresponding period of on-site inspection: January 1, 2021 – December 31, 2021
On site inspection time: February 11, 2022
1、 On site inspection items and opinions
(I) whether corporate governance is not applicable
On site inspection means: (1) review the meeting materials of previous board of directors, board of supervisors and general meeting of shareholders, including meeting notice, meeting resolution, meeting minutes, sign in form, announcement, etc; (2) Consult the articles of association and various rules and regulations of the company; (3) Interview with the Secretary of the board of directors of the company to understand the implementation of the basic system of the company and whether there are situations affecting the independence of the company and its affiliated enterprises in terms of personnel, assets, finance, institutions and business.
1. Whether the articles of association and corporate governance system are complete and compliant √
2. Whether the articles of association and the rules of the three sessions have been effectively implemented √
3. Whether the minutes of the third meeting are complete, including time, place, attendees and meeting √
Whether the discussion contents and other elements are complete, and whether the meeting materials are preserved completely
4. Is the resolution of the third meeting signed and confirmed by relevant personnel attending the meeting √
5. Whether the directors, supervisors and senior management of the company comply with relevant laws and regulations and relevant businesses of the exchange √
Rules perform duties
6. In case of major changes in the directors, supervisors and senior management of the company, whether the corresponding procedures and √
Information disclosure obligation
7. If the controlling shareholder or actual controller of the company changes, whether to fulfill √
The corresponding procedures and information disclosure obligations are
8. Whether the company’s personnel, assets, finance, organization and business are independent √
9. Whether there is no horizontal competition between the company and its controlling shareholders and actual controllers √
(II) on site inspection means of internal control: (1) consult the data of the internal audit department, including the data of the staff of the internal audit department, the internal audit system, the previous internal audit reports and special audit reports issued by the internal audit department; (2) Access to the information of the audit committee, including the working rules, personnel composition and meeting minutes of the Audit Committee; (3) Consult the company’s internal control evaluation report, foreign investment management system, board resolutions related to investment decisions and the company’s foreign investment transaction records; (4) Check the bank statement and detailed statement of the special account for raised funds;
1. Whether the internal audit system and internal audit system are established in accordance with relevant regulations √
Accounting department (if applicable)
2. Whether the internal audit system is established within six months after the listing of shares and √
Establish internal audit department (if applicable)
3. Whether the personnel composition of the internal audit department and the audit committee is compliant (e.g. √
(applicable)
4. Does the audit committee hold meetings at least once a quarter to review internal √
Work plans and reports submitted by the audit department (if applicable)
5. Does the audit committee report to the board of directors at least quarterly √
Audit progress, quality and major problems found (if applicable) 6 Does the internal audit department report to the audit committee at least quarterly
Implementation of the internal audit work plan and √ in the internal audit work
Problems found, etc. (if applicable)
7. Does the internal audit department deposit and √ the raised funds at least quarterly
Conduct an audit of usage (if applicable) 8 Is the internal audit department within two months before the end of each fiscal year
Submit the internal audit work plan for the next year to the Audit Committee (if applicable √
(used)
9. Whether the internal audit department √ within two months after the end of each fiscal year
Submit annual internal audit report to the Audit Committee (if applicable)
10. Does the internal audit department submit to the audit committee at least once a year √
Internal control evaluation report (if applicable)
11. Engaging in venture capital, entrusted financial management, hedging business and other matters is √
Whether a complete and compliant internal control system has been established (III) on-site inspection means of information disclosure: (1) review the meeting materials of previous board of directors, board of supervisors and general meeting of shareholders, including meeting notice, meeting resolution, meeting minutes, sign in form, etc; (2) Consult the company’s information disclosure system and information disclosure documents; (3) Check the record materials of investors’ visits and the company information published on the interactive website of Shenzhen Stock Exchange; (4) Interview with the Secretary of the board of directors to understand the implementation of the company’s information disclosure system.
1. Whether the announcement disclosed by the company is consistent with the actual situation √
2. Whether the contents disclosed by the company are complete √
3. Whether the disclosed matters of the company have not changed significantly or achieved significant √
progress
4. Whether there are no major events that should be disclosed but not disclosed √
5. Whether the transmission, disclosure process and confidentiality of major information meet the public √
Relevant provisions of the information disclosure management system of the company
6. Whether the investor relations activity record form is posted on the interactive website of the exchange in time √
(IV) on site inspection of the establishment and implementation of a long-term mechanism to protect the interests of the company from infringement: (1) refer to the provisions on connected transactions and external guarantees in the Listing Rules of Shenzhen Stock Exchange; Obtain the company’s related party transaction management system, external guarantee management system and other relevant internal regulations of the company; (2) Check the information disclosure and relevant resolutions, check the company’s related party transactions and the internal process of considering external guarantees;
(3) Interview with the Secretary of the board of directors to understand the external guarantee and whether the controlling shareholder, actual controller and other related persons directly or indirectly occupy the funds or other resources of the listed company.
1. Whether there is a system to prevent controlling shareholders, actual controllers and other related persons √
System of directly or indirectly occupying funds or other resources of listed companies
2. Whether the controlling shareholder, actual controller and other related persons do not have direct √
Or indirectly occupy the funds or other resources of the listed company
3. Whether the review procedure of related party transactions is compliant and the corresponding information is fulfilled √
Disclosure obligation
4. Whether the price of related party transactions is fair √
5. Whether there is no case of non affiliated transactions √
6. Whether the external guarantee review procedure is compliant and the corresponding information is fulfilled √
Disclosure obligation
7. Whether the guaranteed party is not liable for deterioration of financial condition and non repayment at maturity √
Guaranteed debt, etc
8. If the guaranteed debt continues to be guaranteed after maturity, has it been performed again √
Corresponding approval procedures and disclosure obligations (V) on-site inspection means for the use of raised funds: (1) consult the company’s raised funds management system and relevant three meeting documents for approval; (2) Check the company’s resolution on opening a special account for raised funds, the tripartite supervision agreement for raised funds, etc; (3) Check the bank statement of the special account for raised funds and the standing book of raised funds, and spot check the large amount payment voucher and original voucher of raised funds; (4) Communicate with the Secretary of the board of directors to understand the use of raised funds.
1. Whether the tripartite supervision agreement is signed within one month after the raised funds are in place √
2. Whether the tripartite supervision agreement on raised funds is effectively implemented √
3. Whether the raised funds are not occupied by a third party or entrusted in violation of regulations √
Financial situation 4 Whether there is no change in the purpose of raised funds without performing the review procedures
Temporary replenishment of working capital, replacement of pre investment, change of implementation location, etc. √
Shape 5 Use idle raised funds to temporarily supplement working capital and invest the raised funds
Change to permanent replenishment of working capital or use of over raised funds to replenish √
In case of working capital or repayment of bank loans, does the company not make high-risk investment during the commitment period
6. Whether the use of raised funds is consistent with the disclosed situation, project progress and investment √
Whether the capital benefit is consistent with the prospectus, etc
7. Whether there are no major risks during the implementation of the project with raised funds √
(VI) on site inspection means of performance: (1) check the quarterly report, semi annual report and performance forecast disclosed by the company to understand the performance fluctuation; (2) Consult the industry research report, quarterly and semi annual reports of Listed Companies in the same industry, compare and analyze with the company, and understand the reasons for performance fluctuations; (3) Interview and communicate with relevant financial personnel of the company to understand the reasons for performance fluctuations.
√ (titanium dioxide)
In the business cycle,
The sales price is the same as
1. Whether there are significant fluctuations in performance, which will increase in the current period, and
Existing capacity profit
Improve utilization and promote
Company performance
(substantial increase)
2. Whether there is a reasonable explanation for the sharp fluctuation of performance √
3. Compared with comparable companies in the same industry, is there no obvious difference in the company’s performance √
(VII) on site inspection means for the performance of commitments of the company and shareholders: (1) check the commitment letters made by the company, shareholders, directors, supervisors, senior managers and other relevant personnel; (2) Check the semi annual report, quarterly report, temporary announcement and other information disclosure documents of the company; (3) Ask the Secretary of the board of directors about the performance of the commitments of the company, shareholders, directors, supervisors and senior managers.
1. Whether the company has fully fulfilled relevant commitments √
2. Whether the shareholders of the company have fully fulfilled relevant commitments √
(VIII) on site inspection means for other important matters: (1) obtain relevant system documents of the company; (2) Consult the company’s public information disclosure documents; (3) Interview with senior management.
1. Whether the cash dividend system has been fully implemented and truthfully disclosed √
2. Whether the external financial assistance is legal and compliant, and truthfully disclosed √
3. Whether large amount of capital transactions have real transaction background and reasonable reasons √
4. Whether there is no significant investment or contract performance √
Change or risk
5. Whether there is no significant change or risk in the company’s production and operation environment √
6. Whether the problems found by the regulatory authorities and sponsors in the early stage have been √ rectified according to the relevant requirements. II. Problems found in the on-site inspection and description. This on-site inspection found no problems that need to be rectified by the issuer.
(there is no text on this page, which is the signature and seal page of Huajin Securities Co., Ltd. on Lb Group Co.Ltd(002601) 2021 regular on-site inspection report) sponsor representative:
Wang Xudong, Meng Chao
Huajin Securities Co., Ltd. February 24, 2022
