Shanghai jintiancheng law firm
About Guangzhou jusailong Engineering Plastics Co., Ltd
IPO and listing on GEM
Supplementary legal opinion (I)
Address: 9/11/12 level, Shanghai Center Tower, 501 Yingcheng Middle Road, Pudong New Area, Shanghai.
Tel: 02120511000 Fax: 02120511999
Postal Code: 200120
catalogue
1、 Question 20 of the inquiry letter about financial internal control 5 II. Question 21 of the inquiry letter on the gambling agreement seven
Shanghai jintiancheng law firm
About Guangzhou jusailong Engineering Plastics Co., Ltd
IPO and listing on GEM
Supplementary legal opinion (I)
To: Guangzhou jusailong Engineering Plastics Co., Ltd
Shanghai jintiancheng law firm (hereinafter referred to as "the firm") is the legal adviser employed by Guangzhou jusailong Engineering Plastics Co., Ltd. (hereinafter referred to as "the company" or "the issuer" or "jusailong") to apply for IPO in China and listing on the gem (hereinafter referred to as "the Issuance and listing"), The legal opinions on the initial public offering of the company in Guangzhou (hereinafter referred to as the legal opinions on the initial public offering of the company in Guangzhou) were issued Lawyer's work report on the initial public offering and listing on the gem of Guangzhou jusailong Engineering Plastics Co., Ltd.
In October 2020, Shenzhen Stock Exchange issued the examination and inquiry letter on the application documents of Guangzhou jusailong Engineering Plastics Co., Ltd. for initial public offering and listing on the gem (hereinafter referred to as the "inquiry letter") No. [2020] 010584. In order to reply to the relevant issues involved in the inquiry letter, the exchange issues this legal opinion and makes corresponding amendments or supplements to the contents disclosed in the original legal opinion.
Unless otherwise specified, the terms, names and abbreviations used in this legal opinion have the same meanings as those in the original legal opinion issued by this office.
In order to issue this legal opinion, our lawyers have verified the relevant issues involved in this legal opinion in accordance with the requirements of the measures for the administration of law firms engaging in securities legal business and the rules for the practice of securities legal business of law firms (for Trial Implementation).
In accordance with the provisions of the securities law, the measures for the administration of securities legal business of law firms and the rules for the practice of securities legal business of law firms (for Trial Implementation), as well as the facts that have occurred or exist before the date of issuance of this legal opinion, the firm and its handling lawyers have strictly performed their statutory duties and followed the principles of diligence and good faith, Sufficient verification and verification have been carried out to ensure that the facts identified in this legal opinion are true, accurate and complete, the concluding opinions issued are legal and accurate, and there are no false records, misleading statements or major omissions, and bear corresponding legal liabilities.
In accordance with the requirements of articles 19 and 163 of the securities law, and in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry, and on the basis of checking and verifying the documents and facts related to the issuance and listing of the company, the lawyers of the exchange issued the following supplementary legal opinions:
1、 Question 20 of the inquiry letter on financial internal control
The application materials show that during the reporting period, the issuer received cash and had inter-bank lending with Ren Ping, the actual controller.
The issuer is requested to disclose the specific purpose of Ren Ping's inter-bank borrowing from the issuer in January 2017 and the specific reasons for the non accrual of interest. The relevant matters will be confirmed at the general meeting of shareholders in August 2020, whether they comply with the decision-making procedures, and whether a comprehensive and effective internal control system has been established and effectively implemented.
The sponsor, the reporting accountant and the lawyer of the issuer are requested to express clear opinions.
（1） Verification method
With regard to the above matters, our lawyers have carried out the following verification work, including but not limited to:
1. Check the issuer's Bank flow;
2. Check the bank flow of the issuer's actual controller, main directors, supervisors and other important related parties;
3. Check the details of other accounts receivable and other accounts payable of the issuer during the reporting period;
4. Interview Ren Ping on the inter-bank lending between the issuer and its related party Ren Ping;
5. Interview Zeng Huimin, the financial director of the company, on the inter-bank lending between the issuer and Ren Ping, a related party;
6. Check the letter of commitment on regulating and reducing connected transactions issued by Hao yuanzeng, Ren Ping, Hao Jianxin and Wu ruosi, the controlling shareholder and actual controller of the issuer;
7. Verify the issuer's internal control systems such as fund management system and personnel management system;
8. Verify the issuer's articles of association, rules of procedure of the third board of directors, management system of connected transactions, working system of independent directors and other corporate governance systems;
9. Check the meeting documents of the issuer and the opinions of relevant independent directors during the reporting period;
10. Check other important documents.
（2） Verification opinions
1. As for the specific purpose of the funds Ren Ping borrowed from the issuer in January 2017, the specific reasons for not counting interest were verified. On January 23, 2017, Ren Ping borrowed 2.3377 million yuan from the company. According to the interviews with Ren Ping and Zeng Huimin, the financial director of the issuer, the background of the issuer's lending funds to Ren Ping, one of the actual controllers, at the end of January 2017 is that the company originally planned to pay some bonuses to employees before the Spring Festival, but it is inconvenient to transfer public accounts because it is close to the Spring Festival holiday (New Year's Eve is January 27, 2017), It is relatively convenient to transfer the funds to Ren Ping's personal account and distribute the year-end bonus to relevant employees through her personal account. Therefore, on January 23, 2017, the company lent 2.3377 million yuan to Ren Ping. Subsequently, the company and the management soon realized that the operation was non-standard. In order to avoid negative impact on the company's operation, Ren Ping returned all the borrowed funds to the company twice after the Spring Festival (February 20, 2017 and March 30, 2017). Since then, the company has not borrowed funds from related parties. Due to the small amount of inter-bank loan between the company and Ren Ping, the occupation time is short and it is returned in full in time, so the company does not charge interest.
2. The issue of inter-bank lending was confirmed at the general meeting of shareholders in August 2020, whether it complies with the decision-making procedures
Article 11 of the related party transaction management system applicable to the above-mentioned inter-bank lending of funds of the issuer stipulates that "in the actual implementation, it shall be submitted to the board of directors and the general meeting of shareholders for deliberation according to the amount of related party transactions.
If the amount of the company's related party transactions (except the company's cash assets and guarantees) is less than 3 million yuan and accounts for less than 10% of the absolute value of the company's latest audited net assets, it shall be reviewed and approved by the board of Directors... ". According to the above provisions, Ren Ping's borrowing of funds from the company constitutes a connected transaction, which shall be reviewed and approved by the board of directors of the company. After verification, Ren Ping did not strictly follow the above approval procedures before lending funds to the company, which did not comply with relevant decision-making procedures and was not standardized.
In order to confirm the impact of the above matters on the interests of the company and shareholders, the company held the second extraordinary general meeting of shareholders in 2020 on August 6, 2020 to confirm the related party transactions of the company during the reporting period, The shareholders participating in the voting unanimously agreed that "these related party transactions are all occurred to meet the daily business needs of the company and on a fair and reasonable basis. The price or pricing method of related party transactions is reasonable and fair, follows the principles of fairness, impartiality, voluntariness and good faith, and does not infringe on the interests of the company and other shareholders", The independent directors also expressed independent opinions on the related party transactions and believed that the related party transactions of the company during the reporting period followed the principles of fairness, impartiality, voluntariness and good faith, the transaction method and pricing were in line with the market rules, and there was no situation damaging the interests of other shareholders of the company.
3. Whether the issuer has established a comprehensive and effective internal control system and effectively implemented it
After verification, the issuer has established and improved the internal control system of financial reporting to reasonably ensure that it continues to meet the normative requirements. The issuer has established a sound internal control system, and its current effective systems such as the articles of association, the rules of procedure of the general meeting of shareholders, the rules of procedure of the board of directors, the working system of independent directors and the management and decision-making system of related party transactions have stipulated the decision-making procedures of the company when related party transactions are involved (including but not limited to the related party avoidance system), Strictly regulate the related party transactions between the company and related parties, and effectively protect the legitimate rights and interests of the company and other shareholders.
（3） Verification conclusion
Based on the above, our lawyers believe that at the beginning of 2017, the funds borrowed from the issuer by Ren Ping, the actual controller, have been cleared in time, and the occupation time is short, which has not had a significant adverse impact on the operation of the company, nor damaged the legitimate interests of shareholders and creditors; Since the occurrence of the above acts, the issuer has continuously improved the corporate governance and internal control system, gradually improved and strictly implemented the financial internal control system, and there are no other non-conforming capital transactions between the company and related parties. Although the decision-making procedures related to the company's borrowing funds from related parties were not performed in advance, the company has additionally performed the relevant internal decision-making procedures, and other shareholders have no objection and have not been held accountable for this incident. The company has established and improved the internal control system and effectively implemented it, which can reasonably ensure the operation efficiency, legal compliance and reliability of financial reports of the company, and there is no situation affecting the issuance conditions.
2、 Question 21 of the inquiry letter on the gambling agreement
The application materials show that there are gambling agreements in the history of the issuer, which mainly agree on performance commitments, share repurchases and other contents.
The issuer is requested to disclose whether there are provisions for the resumption of the termination of the gambling agreement and whether the gambling agreement has been completely cleaned up in combination with the main terms of the gambling agreement.
The sponsor and the issuer's lawyer are requested to express clear opinions in accordance with the requirements of question 13 of the examination and answer of the initial public offering and listing of GEM stocks in Shenzhen Stock Exchange.
（1） Verification method
With regard to the above matters, our lawyers have carried out the following verification work, including but not limited to:
1. Check the questionnaire issued by the issuer's shareholders;
2. Check the capital increase agreement and its supplementary agreement, equity transfer agreement and its supplementary agreement, share repurchase agreement and relevant documents on the terms of termination of gambling signed between the issuer and the introducing shareholders and other shareholders of the issuer; 3. Check the confirmation issued by the issuer's shareholders Saifu Heyin and Shenzhen Tongyi Industry Co.Ltd(300538) that there are no special terms or interest arrangements such as gambling and share repurchase;
4. Check other important documents.
（2） Verification opinions
1. Signing, main terms and clearing of gambling related agreements
Upon verification, the issuer's shareholders Saifu Heyin, Zhoushan Zhejiang Sunflower Great Health Limited Liability Company(300111) , Chen Wensheng, Jing Yanyan, talent fund, Luo Qiming, Hengqin Hengyu, Yueke Hongrun and Yueke Xinhe signed a gambling agreement with the issuer's actual controller when they took shares in the company.
The signing, contents and liquidation of gambling related agreements are shown in the table below:
Whether there is a thorough signing of the agreement related to the eastern gambling, and whether the liquidation of the gambling terms is resumed Effective gambling clause agreement
In April 2016, Saifu Heyin and according to Article 2 of the supplementary agreement on capital and share increase, if jusailong fails to be successfully listed in the National SME share transfer system before the signing of the original shareholders of Fufa and the Issuer on December 31, 2016 and the letter of confirmation in 2016 issued by Saifu Heyin in July 2020, it is confirmed that jusailong has been listed in 2016
Jointly signed the agreement on capital increase and share expansion. The same net profit is less than 26.45 million yuan or the net profit in 2017 is less than 30.42 million yuan (the net profit is among the small and medium-sized enterprises in China before December 31, 2017)
On the silver day, Sifu Heyin, the issuer and Hao Bei's accounting firm with listed audit qualification shall prevail), then Sifu Heyin's enterprise share transfer system is successfully listed,
Yuanzeng and Ren Ping signed the agreement on capital increase and bank expansion, and they have the right to unconditionally withdraw (and continue to hold) their investment in jusailong. Hao yuanzeng and Article 2 "share repurchase" of the supplementary agreement
Supplementary agreement on shares. Ren Ping should buy back unconditionally. The repurchase conditions agreed in the terms are not triggered,
