Sino German Securities Co., Ltd. about
Shenzhen Wenke Landscape Co.Ltd(002775)
2021 annual continuous supervision and regular on-site inspection report
Name of Sponsor: Sino German Securities Co., Ltd. abbreviation of the sponsor: Shenzhen Wenke Landscape Co.Ltd(002775)
Name of sponsor representative: Ma mingkuan Tel.: 010-59026713
Name of sponsor representative: Song Wanrong Tel.: 010-59026941
Name of on-site inspector: Ma mingkuan, Zhang Yichuan
Corresponding period of on-site inspection: January 1, 2021 – November 30, 2021
On site inspection time: December 14, 2021 – December 18, 2021
1、 On site inspection items and opinions
(i) Does corporate governance not apply
On site inspection means (including but not limited to those listed in Article 33 of the guidelines for the recommendation of listed companies of Shenzhen Stock Exchange (hereinafter referred to as the “guidelines”):
1) Consult or copy the documents of the third meeting of the company;
2) Consult and review the contents announced by the company on the information disclosure website designated by Shenzhen Stock Exchange;
3) Interview some directors, supervisors and senior managers of the company.
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 third board of directors have been effectively implemented √
3. Whether the minutes of the third meeting are complete, whether the time, place, attendees and √ content of the meeting are complete, and whether the meeting materials are kept 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 managers of the company perform their duties in accordance with relevant laws, administrative regulations, departmental rules, √ normative documents and relevant business rules of Shenzhen Stock Exchange
6. In case of major changes in the directors, supervisors and senior management of the company, whether they have fulfilled the corresponding procedures and information disclosure obligations note
7. If the controlling shareholder or actual controller of the company changes, whether it has fulfilled the corresponding √ procedures and information disclosure obligations note
8. Whether the company’s personnel, assets, finance, organization and business are independent √
9. Whether there is no horizontal competition between the company and the controlling shareholders and actual controllers √
Note: according to the announcement documents such as the plan for non-public development of A-Shares disclosed by the company on December 23, 2021, the suggestive announcement on the signing of share transfer agreement by the controlling shareholder, voting right entrustment agreement, the signing of conditional effective share subscription agreement by the company and the proposed change of control right, Li Congwen, the controlling shareholder and actual controller of the company Mr. and Mrs. Zhao Wenfeng and the shareholder acting in concert, liberal arts holdings, signed the share transfer agreement with Foshan construction investment on December 22, 2021. On the same day, Foshan construction investment and liberal arts holdings signed the voting right entrustment agreement. After the agreement transfer and voting right entrustment are completed, the proportion of voting rights owned by Foshan construction investment will reach 26.80%, Foshan construction investment will control the company.
On December 22, 2021, Foshan construction investment signed a conditional share subscription agreement with the company. Foshan construction investment plans to subscribe for no more than 100000000 non-public shares of the company in cash (the final number shall be subject to the requirements of the approval documents of the CSRC). Without considering the changes in the number of share capital caused by other factors such as convertible bonds to shares, According to the issuance ceiling, the proportion of voting rights of Foshan construction investment will reach 38.75% of the total share capital of the company after issuance. According to the share transfer agreement, after the registration of share transfer is completed, the board of directors and the board of supervisors of the company plan to be re elected, and the new board of directors will re elect or appoint other important senior managers of the company. As of the date of issuance of this report, the controlling shareholder and actual controller of the company, Mr. Li Congwen, Mr. and Mrs. Zhao Wenfeng, and the shareholder acting in concert, liberal arts holdings, have not completed the share transfer registration, and the directors and supervisors of the company have not changed. （2） On site inspection means of internal control (including but not limited to those listed in Article 33 of these guidelines):
1) Consult the working documents of the internal audit department and the audit committee of the company;
2) Verify the articles of association and the rules of procedure of the third board of directors;
3) Interview some directors, supervisors and senior managers of the company;
4) Consult the general manager’s work rules and other systems, the documents of the third meeting, the minutes of the general manager’s office meeting, and interview relevant personnel of the internal audit department.
1. Whether the internal audit system and internal audit department are established in accordance with relevant regulations √ 2 Whether the internal audit system and internal √ audit department are established within 6 months after the listing of shares
3. Whether the personnel composition of the internal audit department and the audit committee is compliant √
4. Whether the audit committee holds a meeting at least once a quarter to review the work plan and report submitted by the internal audit department 5 Does the Audit Committee Report internal audit to the board of directors at least quarterly √
Work progress, quality and major problems found 6 Whether the internal audit department reports the implementation of the internal audit work plan and the √ questions found in the internal audit work to the audit committee at least quarterly 7 Does the internal audit department audit the deposit and use of raised funds at least once a quarter 8 Whether the internal audit department submits the internal audit work plan for the next year to the audit committee within two months before the end of each fiscal year 9 Whether the internal audit department submits the annual internal audit work report to the audit committee within two months after the end of each fiscal year 10 Whether the internal audit department submits the internal √ control evaluation report to the audit committee at least once a year 11 Whether a complete and compliant internal control system has been established for engaging in venture capital, entrusted financial management and hedging business (III) on-site inspection means of information disclosure (including but not limited to those listed in Article 33 of these guidelines):
1) Consult and copy relevant documents of the three sessions;
2) Consult and review the contents announced by the company on the information disclosure website designated by Shenzhen Stock Exchange;
3) Interview some directors and senior managers of the company;
4) Consult relevant documents such as information disclosure system, insider information registration management system, etc; 5) Check the company’s interactive platform, web search, etc.
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 undergone significant changes or made important 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 comply with the relevant provisions of the company’s √ information disclosure management system 6 Whether the investor relations activity record form is published on the interactive website of the exchange in time √ (IV) on-site inspection means for the establishment and implementation of the long-term mechanism to protect the interests of the company from infringement (including but not limited to those listed in Article 33 of these guidelines):
1) Interview some directors and senior managers of the company;
2) Consult the articles of association, related party transaction system and other relevant system documents;
3) Check the credit investigation records of the company and its actual controller, and conduct network search;
4) Consult and review the contents announced by the company on the information disclosure website designated by Shenzhen Stock Exchange;
5) Check the company’s regular reports and transaction details. 1. Whether a system has been established to prevent controlling shareholders, actual controllers and their affiliates from directly √ or indirectly occupying the funds or other resources of the listed company 2 Whether the controlling shareholders, actual controllers and their affiliates do not directly or √ indirectly occupy the funds or other resources of the listed company 3 Whether the review procedures of related party transactions are compliant and fulfill the corresponding information disclosure √ obligations
4. Whether the price of related party transactions is fair √
5. Whether there is no related party transaction that is not related √
6. Whether the external guarantee review procedures are compliant and fulfill the corresponding information disclosure obligations √
7. Whether the guaranteed party has no deterioration of financial status, failure to pay off the guaranteed √ debt at maturity, etc
8. If the guaranteed debt continues to provide guarantee after maturity, whether the corresponding approval procedures and disclosure obligations have been fulfilled again (V) on-site inspection means for the use of raised funds (including but not limited to those listed in Article 33 of these guidelines):
1) Visit the construction site of the company’s raised investment project;
2) Reviewed the contract for the use of raised funds and its fund use approval form and payment voucher, and copied the fund use approval form and payment voucher for large contracts;
3) Consulted the bank journal, bank statement and quarterly inspection report of the internal audit department on the storage and use of raised funds of the company’s special accounts for raised funds;
4) Interview some directors and senior managers of the company;
5) Check the contents of the company’s announcement.
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 for financial management √
4. Whether there are no situations such as changing the purpose of raised funds without fulfilling the review procedures, replenishing working capital temporarily, replacing pre investment, changing the implementation location, etc
5. If idle raised funds are used to temporarily supplement working capital, the investment direction of raised funds is changed to permanently supplement working capital, or over raised funds are used to supplement working capital √ or repay bank loans, whether the company has not made venture capital investment during the commitment period 6 Whether the use of raised funds is consistent with the disclosed situation, and whether the project progress and investment √ benefits are consistent with the prospectus
7. Whether there are no major risks during the implementation of the project with raised funds √
（6） On site inspection means of performance (including but not limited to those listed in Article 33 of these guidelines):
1) Interview some directors and senior managers of the company;
2) Check and review the contents announced by the company on the information disclosure website designated by Shenzhen Stock Exchange.
1. Whether there are significant fluctuations in performance √
2. Is there a reasonable explanation for the large fluctuation of performance √
3. Compared with comparable companies in the same industry, whether there are no obvious abnormalities in the company’s performance √ (VII) on-site inspection methods for the performance of the company and shareholders’ commitments (including but not limited to those listed in Article 33 of these guidelines):
1) Interview some directors and senior managers of the company;
2) Consult the contents of the company’s announcement, and consult and copy relevant resolution documents;
3) Check the register of shareholders.
1. Whether the company has fully fulfilled relevant commitments √
2. Whether the shareholders of the company have fully fulfilled relevant commitments √
（8） On site inspection means for other important matters (including but not limited to those listed in Article 33 of these guidelines):
1) Interview the actual controller and some senior managers of the company;
2) Consult and copy major contracts and original vouchers;
3) Inquire about the company’s production and operation through the network;
4) Check the company announcement.
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 capital transactions have real transaction background and reasonable reasons √
4. Whether there is no significant change or √ during the performance of major investment or major contract
Person risk
5. Whether there is no significant change or risk in the company’s production and operation environment √
6. Whether the company’s problems found by the early-stage regulators and sponsors have been rectified according to √ relevant requirements II. Problems found in on-site inspection and description
1. Description of the company’s performance and risks
From January to September 2021, the company’s operating revenue was 1686653200 yuan, a decrease of 16.09% over the same period of last year; The net profit attributable to the shareholders of the listed company after deducting non recurring profits and losses was 29.1862 million yuan, a decrease of 78.76% over the same period of the previous year. Affected by Evergrande this year, most of Evergrande’s projects have been suspended since the third quarter. Although some projects of Evergrande have resumed work since September this year, the scale of resumption projects is limited, resulting in a decline in performance in the second half of this year compared with the same period of last year. Compared with the construction and decoration company which is also a supplier of Evergrande, there is no abnormality. Since July this year, Evergrande commercial bills have been overdue and cannot be cashed, Evergrande commercial bills held by the company cannot be discounted, discounted and endorsed commercial bills have been due and need to be advanced by the company, as well as some bank current loans that have been repaid and can not be renewed, resulting in great capital pressure on the company.
At present, Evergrande has no clear repayment plan for the company’s notes payable and accounts receivable, the company’s operation has been significantly adversely affected, and there may be a risk of further deterioration in the future.
2. Contract performance risk
As of the issuance date of this report, some contracts signed between the company and Evergrande group and its subsidiaries may be suspended, suspended and terminated due to Evergrande’s own business strategy, resulting in significant changes in the performance of some major contracts and the risk of decline in operating revenue and net profit in the short term.
3. Policy risk of real estate industry
In recent years, the state and governments at all levels have issued a series of policies and measures to strengthen the regulation and correct guidance of the real estate market and promote the sustainable and healthy development of the real estate industry. The change of policies will affect the land
