Securities code: 002771 securities abbreviation: Beijing Transtrue Technology Inc(002771) announcement Code: 2021-044 Beijing Transtrue Technology Inc(002771)
Announcement on the reply to the concern letter of Shenzhen Stock Exchange (concern letter [2021] No. 300 of the company Department)
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Beijing Transtrue Technology Inc(002771) (hereinafter referred to as “the company”) attached great importance to the letter of concern on Beijing Transtrue Technology Inc(002771) issued by the management department of listed companies of Shenzhen Stock Exchange on August 18, 2021 (company department’s attention letter [2021] No. 300, hereinafter referred to as “the attention letter”), and verified the issues listed in the attention letter to relevant shareholders, directors and senior executives one by one, The reply is hereby announced as follows:
Question 1: please further explain the detailed reasons for your company’s director Maya and independent director Lv Tiantian to vote against and abstain from voting on the above proposal.
reply:
The company received further written replies from director Maya and independent director Lv Tianwen, as follows: first, the reasons why director Maya voted against relevant proposals
The main content of the three system revisions of seal management system, financial management system and monetary fund management system is to centralize the functions and powers of the company’s middle-level managers, subsidiaries and branch managers into the hands of the chairman, and the relevant processes become lengthy and inefficient. Such revisions will greatly affect the company’s operation efficiency and cause management and operation risks. The revision of the information disclosure management system fails to be carried out simultaneously with other relevant systems, resulting in contradictions between the systems and substantial obstacles to the implementation of the system.
Next, we will further explain the problems existing in the above four systems.
(i) Seal management system
1. Article 18 of the revised seal management system stipulates that the seal of the board of supervisors shall be managed by the Secretary of the board of directors, which violates the provisions of the law and the articles of association, resulting in the inability of the board of supervisors to exercise its functions and powers independently and affecting the corporate governance mechanism
Effective operation of the system [company note: These Provisions have been revised at the 14th meeting of the Fourth Board of directors of the company on December 3, 2021, and the revised seal of the board of supervisors is kept by the chairman of the board of supervisors, which does not conflict with the existing management systems such as the rules of procedure of the board of supervisors]
According to articles 53, 54 and 118 of the company law of the people’s Republic of China and Article 150 of the articles of association, the board of supervisors has the right to supervise the performance of duties by directors and senior managers, and have the right to require correction of acts of directors and senior managers that harm the interests of the company An institution that has the right to bring a lawsuit against directors and senior managers in accordance with Article 151 of the company law. If the seal of the board of supervisors is managed and used by the Secretary of the board of directors, it will seriously restrict and affect the independent exercise of functions and powers of the board of supervisors, is not conducive to corporate governance, and violates the relevant provisions of the company law on the independence of the board of supervisors from the board of directors. 2. The provisions of Article 11 of the revised seal management system make the approval process for the use of official seal and company seal inconsistent with the actual needs of business, which will greatly affect the operation efficiency and expose the company to risks
The official seal and company seal are frequently used, and many actual businesses have high requirements for the timeliness of the official seal and company seal. Article 11 of the revised seal management system has the following problems:
(1) Change the approval method from the current efficient office OA system to paper approval, resulting in low approval efficiency;
(2) The approval process is changed from the original one-level approval of the person in charge designated by the authorized department to three-level approval of the person in charge designated by the Department, the leader in charge and the General Manager / Chairman. There are many approval levels and the process is lengthy. The approval decision power is concentrated on the General Manager / Chairman, resulting in all businesses having to cooperate with the working hours of the General Manager / Chairman, which will inevitably affect the work efficiency; Moreover, some leaders in charge, General Manager / Chairman of the board are not resident in the company, so they are objectively unable to complete the approval in time or complete the paper approval procedures within five working days;
(3) The approval process does not classify the approval authority according to the importance and time urgency of the stamped items. A reasonable setting of approval authority will help the company find a balance in efficiency and risk control. Without classified setting of approval authority, focusing on the General Manager / Chairman across the board will completely break this balance and ultimately affect the efficient development of the company’s business activities.
To sum up, the revised system requirements are subject to the paper-based approval process and must be approved by the General Manager / Chairman, which not only changes the previous practice of approval through the OA system, but also improves the level of approval and adds multi-level approval arrangements, which does not meet the actual business needs and is not operable, and will seriously affect the orderly and efficient development of the company’s business activities.
（2） Financial management system
1. The main content of this revision is to focus the financial management authority on the chairman, increase the approval cost of relevant matters and reduce the operation efficiency
The core of this revision is to return all the financial management authority to the chairman. For example, Article 2 of the financial management system changes the financial management system formulated by subsidiaries from the approval of the headquarters to the approval of the chairman and the general manager; Article 5 the over budget expenditure shall be changed from the approval of the general manager’s office to the preliminary review of the general manager’s office and reported to the chairman for approval; Article 11 the purchase payment of 2 million yuan or above shall be changed from the approval of the general manager to the approval of the general manager and the chairman. 2. Article 13 of the financial management system sets too low the authority to approve the amount of employees’ business loans and Article 14 reimbursement, which does not meet the current actual business management needs and is not operable
Article 13 of the financial management system significantly reduces the amount of employees’ business loans from 50000 yuan to 10000 yuan, and raises the approval level to be approved by the General Manager / Chairman; Article 14 the revision of reducing the employee reimbursement amount to 10000 yuan, which requires the approval of the General Manager / Chairman.
According to the daily operating expenditure scale of the company, the revised approval amount is set too low and the approval level is too high, which does not meet the current actual business management needs and is not operable.
In conclusion, the revision of the financial management system reduces the financial management level and increases the management cost, which is inconsistent with the actual business needs of the company, which will seriously restrict the normal business development of the company.
（3） Monetary fund management system
1. According to Article 9 of the monetary fund management system, the subsidiary will lose its independent approval right in terms of operating procurement, tax, salary payment and operating and management expenses
According to Article 9 of the monetary fund management system, the approval authority of the person in charge of the subsidiary in terms of operational procurement, tax, salary payment and operation and management fee payment shall be limited to no more than 10000 yuan. Those exceeding 10000 yuan shall be reviewed and approved by the chairman or general manager.
At present, the company has 7 subsidiaries (6 of which are wholly-owned subsidiaries), and some subsidiaries have large business scale. The amount of daily operating procurement, management fees, taxes and wages and salaries has a certain scale, which gives the subsidiary the right to approve monetary funds of only 10000 yuan, which can not meet the actual needs. The provisions approved by the chairman or general manager seriously affect the operation efficiency of subsidiaries and interfere with the independent and orderly operation of subsidiaries.
In addition, this provision is also inconsistent with Article 11 of the financial management system: “1. The purchase payment of RMB 2 million and above shall be approved by the general manager and the chairman. 2. The company authorizes the person in charge of finance to approve the purchase payment of less than RMB 2 million, but the after-sales maintenance payment of RMB 10000 and above shall also be approved by the deputy general manager in charge of the company”, which is not enforceable.
2. Article 10 of the monetary fund management system is not feasible
Article 10 of the monetary fund management system stipulates that the sector and its affiliated enterprises may formulate detailed rules for the implementation of the fund approval authority applicable to their own units within the scope of the approval authority specified in Article 9. However, as mentioned above, the daily fund approval authority of the subsidiary is only 10000 yuan. In this case, it is no longer of practical significance to formulate the so-called implementation rules.
In conclusion, the original intention of formulating the monetary fund management system is not to optimize the company’s management system, but to return the fund use right of the company, subsidiaries and branches to the chairman and / or general manager, excessively squeeze the fund use right of subsidiaries, and seriously restrict the business development of subsidiaries.
（4） Information disclosure management system
We oppose the revision of the information disclosure management system, mainly in the following two aspects:
1. Its content is in contradiction with the company’s existing internal reporting system for major information and registration management system for insiders of inside information. [note to the company: the company has held the 14th meeting of the 4th board of directors on December 3, 2021, deliberated and approved the amendments to the internal reporting system of major information and the registration management system of insiders. After these amendments, the definitions of “major events” and “insiders” in the above two systems are consistent with the information disclosure management system There is no contradiction or conflict]
(1) The revised information disclosure management system has revised the scope of “major events”, which is inconsistent with the identification rules of the scope of “major events” in the company’s original internal reporting system of major information;
(2) The revised information disclosure management system has revised the scope of “insider”, which is inconsistent with the identification rules of the scope of “insider” in the company’s original insider registration management system.
2. The proposal to amend the system was put forward in the wechat group of the president’s office at 18:05 on August 14. However, the directors were required to put forward modification opinions at 24:00 on the same day in order to issue the notice of the board of directors. In less than 6 hours, the directors were unable to conduct careful review.
To sum up, the fundamental purpose of the company’s system revision should be for the legitimate, compliant and orderly operation of the company; The above seal, financial management, use of monetary funds, information disclosure management and other systems involve the company’s daily operation and management, investors’ right to know and other core matters. Before the system is revised, it is necessary to carefully evaluate the necessity and rationality of the revision, and collect opinions, conduct research and discussion in all business lines and departments of the company. This revision does not carry out the above work and is not a scientific management method.
The company’s main business has not changed in recent two years, and it is still multimedia video system construction and service business and data center system construction and service business. The existing management mode is an effective operation mode gradually formed by the company’s management team after years of exploration and practice.
From the perspective of the company’s operation and management, the company has always implemented the approval processes such as seal management, financial management and various expenses. Senior executives appointed by the controlling shareholders are set up at the corresponding nodes for approval, so there is no risk that the management of the company’s controlling shareholders is out of control.
From the perspective of operating income, the company’s performance has declined slightly in recent two years. In 2020, it is mainly affected by the epidemic. The decline in operating income in the first half of 2021 is mainly due to the uncertainty of the implementation and acceptance progress of large projects. Although the performance has declined slightly, the company’s operation is stable and good, In the first half of 2021, the amount of newly signed contracts and projects under construction increased in a large proportion compared with the same period of the previous year.
From the perspective of period cost, in the first half of 2020, affected by covid-19 epidemic, market activities decreased, and travel, office and other expenses decreased directly. At the same time, the state also gave strong support for social security relief. On the whole, the cost of the company was at a low level compared with the same period in recent years. In 2021, the company actively expanded new business and increased qualification construction. The business scale was expanded compared with that of the previous year. Various expenses were continuously invested in strict accordance with the annual budget. At the same time, the state resumed social security payment. Therefore, the overall expenses increased compared with the same period of the previous year. However, based on the difference of the same period decline in the proportion of income, the proportion of expenses was relatively reflected in a certain increase, However, the overall expenditure is reasonable and controllable relative to the business scale. In addition, the revision of the system is based on the background that the company’s current controlling shareholder Suzhou Longyue Holding Co., Ltd. (hereinafter referred to as “Longyue holding”) was unable to pay the share transfer payment and perform the overall transaction arrangement to the founding shareholders Wang Guohong, Hu Xiaozhou, Ma ya, Chen Ruiliang and Wu Lan (hereinafter collectively referred to as “old shareholders”) on schedule, resulting in relevant litigation.
Since Longyue holdings became the controlling shareholder, it has not helped the company to carry out other substantive businesses except for the investment and establishment of Beijing Transtrue Technology Inc(002771) Junrong technology development (Suzhou) Co., Ltd., and the net profit of the company has remained negative since its establishment. Beijing Transtrue Technology Inc(002771) in recent two years, the company’s main business is still the multimedia video system construction and service business and data center system construction and service business operated and managed by the founding shareholders.
The company’s current seal, license and business management status is based on the arrangement reached by he Xiaobo (also the Beijing Transtrue Technology Inc(002771) legal representative), one of the actual controllers of Longyue holdings, and the founding shareholders of the company during the dispute over the control right of the internal shareholders of Longyue holdings. Its purpose is to maintain the normal operation of listed companies and avoid the impact of stock price volatility on small and medium-sized shareholders. Recently, the board of directors of the company controlled by Longyue holdings, regardless of the operation stability of the listed company, insisted on issuing an announcement inconsistent with the facts about the uncontrolled seal, which brought obstacles to the company’s daily operation.
2、 Reasons for independent director Lv Tiantian abstaining from voting on relevant proposals
1. According to the communication with the original staff of the company, among the three internal control measures, the listed company has two original ones, so the name of the proposal needs to be modified, which can not be called the proposal of internal control system, but should be changed into an amendment; 2. During the meeting, participants mentioned that the proposal was not communicated with employees level by level, and the formulation and implementation of regulations and measures need to match the development of the company. Without direct communication and soliciting opinions with employees, it was directly promulgated and implemented. I think this is too hasty and is not conducive to the development of the enterprise, Potential equity risk to minority shareholders;
3. In view of the potential development risk and performance risk of the company caused by these regulations, on the premise of performing my duties independently and impartially, I hereby issue a waiver based on the principle of prudence.
Question 2: please verify and explain the internal review and decision-making procedures performed in the formulation and revision of the system, whether the setting of relevant processes and authorities in the system does not meet the company’s current actual business management needs and is not operable, and whether the relevant systems conflict with the existing management systems, Whether the relevant management systems violate the company law and the articles of association. Ask a lawyer to check and express clear opinions.
reply:
1、 Internal review and decision-making procedures for the formulation and revision of the system
(i) The formulation and revision of relevant systems are within the scope of the board of directors
The financial management system, monetary fund management system and seal management system are the basic management systems of the company. According to Article 46 of the company law, “the board of directors is responsible to the shareholders’ meeting and shall act accordingly
