Changjiang Securities Company Limited(000783) underwriting and recommendation Co., Ltd
Reply to the letter on the implementation of the deliberation opinions of the gem merger and reorganization committee issued by Shenzhen Stock Exchange
(Revised Version)
Independent financial advisor
28th floor, No. 1198, Century Avenue, China (Shanghai) pilot Free Trade Zone
Shenzhen Stock Exchange:
Rianlon Corporation(300596) (hereinafter referred to as "the company", "listed company" or " Rianlon Corporation(300596) ") received the implementation letter on the deliberation opinions of the gem merger and reorganization committee (audit letter [2021] No. 030019) (hereinafter referred to as "the implementation letter") issued by your exchange on September 22, 2021. According to the relevant requirements of your implementation letter, Changjiang Securities Company Limited(000783) underwriting recommendation Co., Ltd. (hereinafter referred to as "independent financial consultant") has carefully analyzed and verified the relevant problems, as follows:
Unless otherwise specified, the abbreviations or terms in the reply to this implementation letter have the same meanings as those in the report on Rianlon Corporation(300596) issuing shares and paying cash to purchase assets and raise matching funds (Registration draft) (Revised) (hereinafter referred to as the "restructuring report"). If the total amount in any table in the reply of this implementation letter is inconsistent with the sum or product of the values listed in the table, it is caused by rounding unless otherwise specified.
The font of this reply represents the following meanings:
The issues listed in the implementation letter are in bold
Reply to the questions listed in the implementation letter
catalogue
Question 1 4 question 2 six
Question 1
The listed company is requested to supplement and disclose the legal risk of being ordered to stop the construction and investigate the responsibilities of relevant responsible persons in accordance with the law when the construction project of the subject company with an annual output of 50000 tons of lubricating oil additives is started without the approval of energy conservation examination. Independent financial advisers and lawyers are invited to express clear opinions.
reply:
The listed company has listed in the reorganization report "section IV, x, (VIII), 3, (2) energy saving review and relevant legal risks of 50000 tons of lubricating oil additives construction project" as follows:
"(2) energy saving review and relevant legal risks of the construction project with an annual output of 50000 tons of lubricating oil additives ① the construction project with an annual output of 50000 tons of lubricating oil additives shall be subject to energy saving review by the provincial energy saving review authority
The subject company's 50000 ton / year lubricating oil additive construction project was completed in February 2020, and the approval of environmental impact assessment was completed in June 2020. According to the measures for energy conservation review of fixed asset investment projects issued by the national development and Reform Commission and implemented on January 1, 2017, the subject company's 50000 ton / year lubricating oil additive construction project shall be subject to energy conservation review by the provincial energy conservation review authority.
② Progress of energy conservation review of the project and reasons for not obtaining energy conservation review and approval
As of the signing date of this report, the target company has entrusted a third-party organization to prepare the energy-saving report and submit the energy-saving review materials to the competent department. At present, it is going through the energy-saving review and approval procedures.
The target company failed to obtain the energy-saving review and approval of the project in time. According to the statement on relevant information of Jinzhou Kangtai Lubricating Oil Additive Co., Ltd. issued by the development, reform and economic administration of Jinzhou Binhai New Area (Jinzhou Economic and Technological Development Zone), "... in view of the suspension of acceptance of the energy conservation review of Liaoning Province in September 2020, the energy conservation review of the project has not been approved so far. Our bureau will pay attention to the provincial and municipal energy conservation review, actively promote the energy conservation review of the project and strive for early approval."
According to the energy-saving evaluation report of the project, the energy consumption per unit product of the project is 170.46kgce/t, which is lower than China's advanced level of 200kgce / T. it belongs to China's leading level and has little impact on the energy-saving objectives of Liaoning Province and Jinzhou City. It is expected that there are no substantive obstacles to passing the energy-saving review.
③ The project has fulfilled the pre-approval procedures for other construction projects and has not been subject to administrative punishment
The subject company's 50000 T / a lubricating oil additive construction project has obtained all pre-approval for commencement except for energy-saving approval procedures, such as project filing, reply to environmental impact assessment, land use planning license, engineering planning license and engineering construction license. The failure of energy-saving review is due to the suspension of government administrative approval, Moreover, the target company has submitted the application documents to the corresponding authorities, and there is no situation of evading the examination and approval.
In the history of the subject company, the built projects have completed the corresponding approval and filing procedures or obtained the special instructions issued by the competent department, and there is no administrative punishment due to project construction. Therefore, the subject company has less legal risk of being ordered to stop the construction and investigate the responsibility of relevant responsible persons according to law because the construction project of 50000 tons of lubricating oil additives per year has not obtained the approval of energy conservation review.
④ Safeguard measures taken by all parties to this transaction
For the sake of prudence, after careful re examination, the target company cannot be put into operation on schedule because the 50000 ton lubricating oil additive construction project has not obtained energy-saving review. In order to protect the interests of the listed company and minority shareholders, the parties to this transaction have taken the following safeguard measures:
1、 The actual controller of the target company has issued the relevant commitments of Han Qian, Yu bacon, Han Guangjian and Yu Hubei on the 50000 ton / a lubricating oil additive construction project under construction by Kangtai Co., Ltd.: "1. If Kangtai shares are subject to economic punishment by relevant government departments due to the project's failure to go through the energy-saving review and approval procedures in time, being ordered to stop construction by the energy-saving review authority or other reasons, the promisor promises to bear the full amount of the economic punishment and pay the full amount to Kangtai shares within five working days after receiving the relevant punishment notice, and each promisor has the obligation to pay such compensation Jointly and severally liable. 2. If by the end of the performance commitment period (20212023) for the Rianlon Corporation(300596) acquisition of Kangtai shares, Kangtai shares has not completed the energy-saving review and approval procedures for the above projects, the promisor promises to be the main manager of Kangtai shares, When organizing the preparation of relevant profit forecast during the impairment test of Kangtai shares according to the performance commitment and compensation agreement and its supplementary agreement, the possible future income and cash inflow of the project will be excluded, and the obligation of impairment compensation (if any) will be performed in strict accordance with the relevant provisions of the performance commitment and compensation agreement. "
2、 The target company has issued the relevant commitment of Jinzhou Kangtai lubricating oil additives Co., Ltd. on the construction project of 50000 tons of lubricating oil additives under construction: "if Kangtai has not completed the energy-saving review and approval procedures of the above projects by the end of the performance commitment period (20212023) of Rianlon Corporation(300596) acquisition of Kangtai shares, the parties shall When the performance commitment and compensation agreement and its supplementary agreement prepare the relevant profit forecast at the impairment test stage of Kangtai shares, the future annual profit forecast prepared and issued by the company will exclude the possible future income and cash inflow of the project.
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3、 The listed company has issued Rianlon Corporation(300596) notes on impairment test related to the acquisition of Jinzhou Kangtai Lubricating Oil Additive Co., Ltd.: "1. In the above impairment test stage, the company will urge relevant intermediaries to evaluate the value of the underlying assets according to the same evaluation / valuation method as the value of the underlying assets determined in this transaction, so as to ensure the continuity and consistency of the valuation method. 2. If Kangtai Co., Ltd. has not completed the energy-saving review and approval procedures of the above projects at the end of the performance commitment period, it shall be reduced in the above In the value test stage, the company will urge Kangtai shares and relevant intermediaries to exclude the possible future income and cash inflow of the project when preparing and reviewing relevant profit forecasts, so as to make a prudent and fair evaluation of the value of the underlying assets at that time, And urge the counterparty to perform the obligation of impairment compensation (if any) in strict accordance with the relevant provisions of the performance commitment and compensation agreement. "
In conclusion, the independent financial adviser believes that the subject company has prepared the energy-saving evaluation report and submitted the energy-saving review materials to the competent department, and is currently going through the energy-saving review and approval procedures. After communicating with the relevant competent departments of the target company and obtaining their explanations, the situation that the project has not been approved by the energy conservation review is due to the delayed and limited approval of the administrative approval of the energy conservation review of Liaoning Province. The project has obtained all pre-approval for commencement except for the energy-saving approval procedures, and the built projects of the target company are not subject to administrative punishment due to project construction. Therefore, the legal risk of the target company being ordered to stop construction or investigate the responsibility of relevant responsible persons according to law is low. In addition, in view of the potential impact on the target company and this transaction caused by the failure to put into operation on schedule due to the failure to obtain energy-saving review for the construction project of 50000 tons of lubricating oil additives per year, the actual controller of the target company, the target company and the listed company have issued commitments or instructions to protect the interests of listed companies and minority shareholders.
Question 2
The listed company is requested to further explain and disclose the specific measures to be taken in terms of corporate governance, operation and management in order to achieve effective control over the target company. The independent financial adviser is requested to give a clear opinion.
reply:
The listed company has in the reorganization report "section IX, III, (II), 2. Specific measures to be taken by the listed company in terms of corporate governance, operation and management after the completion of this transaction" are as follows:
"2. Specific measures to be taken by the listed company in terms of corporate governance, operation and management after the completion of this transaction
After the completion of this transaction, Kangtai shares will become the holding subsidiary of the listed company. Listed companies will conduct comprehensive and effective management in accordance with the requirements of listed company governance, integrate the underlying assets in terms of corporate governance, operation and management, formulate reasonable development plans, strengthen the construction and implementation of internal control system of the target company, promote the effective integration of relevant businesses, optimize resource allocation, and improve business efficiency and efficiency, Strive to improve the overall profitability of listed companies.
(1) Corporate governance operation
After the completion of this transaction, the listed company will assist the target company to further establish a scientific and standardized corporate governance structure and ensure that the target company operates in accordance with the articles of association and the management system of the listed company for its subsidiaries. In principle, the stability of the existing internal organization of the target company shall be maintained, and dynamic optimization and integration shall be carried out according to the business objectives of the target company, the internal control of the listed company and the needs of accurate information disclosure. Listed companies will comprehensively sort out and improve the internal control system of subsidiaries of listed companies, prevent internal control risks, strengthen financial and risk control, and dynamically optimize the governance structure, institutional setting, internal control system and business process of the target company. Listed companies will continue to improve the decision-making system for major issues of the target company according to the actual needs, improve the internal management level of the target company through effective system construction, and promote the stable and standardized operation of the target company.
(2) Management
After the completion of this transaction, the listed company will give specific guidance to the operation of the target company around the specific implementation of the strategy of building a fine chemical platform enterprise. In terms of products, the listed company has arranged the production capacity of liquid high-efficiency antioxidants for large-scale lubricating oil in Zhuhai base. After the completion of this transaction, the listed company will integrate Kangtai phase I production capacity, phase II production capacity and Zhuhai liquid antioxidant production capacity of the listed company. At that time, the company will become the company with the most complete product categories in China's lubricating oil additive industry, Lay the foundation for entering the industry. In terms of operation, the listed company will fully tap the talent advantages, technical advantages and customer base advantages of the target company, implant more efficient operation and management genes, promote the potential of the target company's phase I project and fully reach the production standard, and promote the completion and operation of phase II project as soon as possible. In terms of R & D, listed companies will integrate their respective advantages in R & D resources, realize the sharing of R & D platform resources, effectively reduce technology R & D costs and increase the output of innovative achievements, so as to enhance the overall profitability and sustainable competitiveness. In terms of sales, the listed company will make use of its global marketing network advantages to give the target company global development guidance and customer resource coordination on the basis of maintaining the relative independence of the target company's business and the stable growth of China's share, so as to lay the foundation for becoming a well-known enterprise of global lubricating oil additives.
After the completion of this transaction, in order to ensure the stability of the operation and management of the target company, the listed company appoints directors, supervisors and financial principals to participate in the corporate governance and business decisions of the target company. ① The target company has a board of directors composed of 5 directors, including 3 appointed by the listed company and 2 recommended by the original shareholders of the target company; ② The target company shall set up one supervisor, who shall be nominated and recommended by the listed company; ③ The listed company will set up a reorganization management team to sort out the system construction, process construction and organizational structure of the target company, and help the target company improve various internal control systems according to the requirements of the listed company for its subsidiaries. At the same time, the listed company sends core management personnel including the chief financial officer to participate in the operation and management of the target company; ④ The listed company will send a technical core team to participate in the technological innovation of the target company, complete the integration of innovation resources between the listed company and the target company, give full play to the advantages of talent intensive and first-class R & D platform of the listed company, and continuously enhance the innovation ability of the target company; ⑤ The financial department of the target company will be incorporated into the financial department system of the listed company, and the financial management of the target company will be vertically managed by the financial department of the listed company. The listed company will strengthen the internal financial management and control of the target company. For important business behaviors, such as the use of large amounts of funds and the signing of important contracts, the listed company will implement a unified standard internal control management system to the target company and improve the internal control management system of the target company. In addition, the internal audit department of the listed company will conduct irregular routine or special audits on the target company, effectively supervise and manage the operation of various businesses of the target company, and prevent the financial risks of the target company. "
In conclusion, the independent financial adviser believes that the listed company in this reorganization has formulated detailed integration measures in terms of corporate governance and operation management, and the listed company can effectively control the target company after this reorganization.
(there is no text on this page, which is the signature page of the reply (Revised Version) of Changjiang Securities Company Limited(000783) underwriting recommendation Co., Ltd. on the implementation letter on the deliberation opinions of the gem M & a committee of Shenzhen Stock Exchange) Project Co organizer:
Cheng ye, Chen Jiahong
Financial advisor sponsor:
Li Wenfang Chen Long
Kernel principal:
