Beijing Deheng Law Firm
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Uroica Precision Information Engineering Co.Ltd(300099) 2021 issued shares to specific objects and listed
Supplementary legal opinion (I)
(Revised Version)
12 / F, block B, Fukai building, No. Financial Street Holdings Co.Ltd(000402) 19, Xicheng District, Beijing
Tel: 01052682888 Fax: 01052682999 zip code: 100033
Beijing Deheng Law Firm
about
Uroica Precision Information Engineering Co.Ltd(300099)
Shares issued and listed to specific objects in 2021
Supplementary legal opinion (I)
Deheng 11f20210275005 to: Uroica Precision Information Engineering Co.Ltd(300099)
According to the special legal counsel contract signed between the exchange and the issuer, the exchange accepts the entrustment of the issuer to act as the special legal counsel of the issuer for this issuance. In accordance with the company law, the securities law, the measures for the administration of registration, the GEM Listing Rules and other relevant laws, administrative regulations, departmental rules and other normative documents, as well as the relevant provisions of the CSRC, and with reference to the requirements of the No. 12 reporting rules of the CSRC, and in accordance with the business standards, ethics and diligence recognized by the lawyer industry, The exchange has issued the legal opinion of Beijing Deheng Law Firm on the issuance and listing of shares to specific objects in Uroica Precision Information Engineering Co.Ltd(300099) 2021 (hereinafter referred to as the legal opinion) and the lawyer work report of Beijing Deheng Law Firm on the issuance and listing of shares to specific objects in Uroica Precision Information Engineering Co.Ltd(300099) 2021 (hereinafter referred to as the legal opinion) Lawyer work report).
According to the requirements of the inquiry letter of Shenzhen Stock Exchange on the examination of Uroica Precision Information Engineering Co.Ltd(300099) application for issuing shares to specific objects (audit letter [2022] No. 020019, hereinafter referred to as the inquiry letter), The exchange has issued the supplementary legal opinion of Beijing Deheng Law Firm on the issuance and listing of shares to specific objects in Uroica Precision Information Engineering Co.Ltd(300099) 2021 (I) (hereinafter referred to as the supplementary legal opinion I). Due to the revision of the reply report of Uroica Precision Information Engineering Co.Ltd(300099) and Citic Securities Company Limited(600030) on the examination and inquiry letter of Uroica Precision Information Engineering Co.Ltd(300099) applying for issuing shares to specific objects (hereinafter referred to as the reply to the inquiry letter), the lawyer in charge of the office conducted supplementary verification on relevant legal matters during the reporting period according to the revised version of supplementary legal opinion I to the reply to the inquiry letter, And revised the supplementary legal opinion I accordingly.
Unless otherwise specified, the abbreviations, abbreviations and terms used in supplementary legal opinion 1 have the same meanings as those in legal opinion and lawyer work report. The matters stated and abbreviations used in legal opinion and lawyer work report are applicable to supplementary legal opinion 1.
The first supplementary legal opinion is a supplement to the legal opinion and the lawyer’s work report, and constitutes an integral part of the legal opinion. The contents of the above lawyer work report and legal opinion that have not been modified or updated by supplementary legal opinion I are still valid. In case of any inconsistency with supplementary legal opinion I, supplementary legal opinion I shall prevail.
In accordance with the provisions of the securities law, the measures for the administration of law firms engaging in securities legal business, the rules for the practice of securities legal business of law firms (for Trial Implementation), and the facts that have occurred or exist before the issuance date of the supplementary legal opinion I, the firm and its undertaking 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 supplementary legal opinion 1 are true, accurate and complete, that the concluding opinions issued are legal and accurate, and that there are no false records, misleading statements or major omissions, and bear corresponding legal liabilities.
The first supplementary legal opinion is only for the purpose of Uroica Precision Information Engineering Co.Ltd(300099) this issuance and listing of shares to specific objects, and shall not be used for any other purpose without the written authorization of the exchange and the undertaking lawyer.
In accordance with the relevant laws and regulations and the relevant provisions of the CSRC, and in accordance with the business standards, ethics and the spirit of diligence recognized by the Chinese lawyer industry, the undertaking lawyer of the firm has reviewed and verified the documents and relevant facts provided by the issuer, and now issues the supplementary legal opinion I as follows:
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1、 Question 1 of the inquiry letter
1. In March 2014, the issuer privately issued shares to Tian bin and other seven counterparties and paid cash to acquire 53.21% equity of Beijing Fuhua Yuqi Information Technology Co., Ltd. (hereinafter referred to as “Fuhua Yuqi”). Tian bin and others made performance commitments from 2013 to 2016, and the completion rate of performance commitments was 82.63%. In November 2017, the issuer increased its investment in Fuhua Yuqi by 70 million yuan and held 63.99% of the equity of Fuhua Yuqi after the capital increase. The minority shareholder Tian bin and others promised to ensure that the cumulative net profit from 2018 to 2020 will not be less than 105 million yuan, and the cumulative net profit in 2021 and 2022 will not be less than 92.4 million yuan. If Fuhua Yuqi fails to realize the above profits, Tian bin and others promise to compensate in cash first, and the insufficient part will be compensated by the equity of Fuhua Yuqi held by them. At the same time, the agreement also stipulates the compensation measures for the recovery of Fuhua Yuqi’s accounts receivable and notes receivable balance. Tian bin and others voluntarily restricted the sale of 50% of all shares of the issuer held by them and pledged them to a third party designated by the issuer. During the reporting period, Tian bin continued to reduce the issuer’s shares, 520700 shares from December 31, 2018 to December 31, 2019, 1181900 shares from December 31, 2019 to December 31, 2020, and 2660236 shares from December 31, 2020 to November 31, 2020. The issuer recently held a meeting of the board of directors to change the performance commitment clause of the capital increase agreement to “ensure that the cumulative net profit for eight years from 2018 to 2025 after the completion of this capital increase is not less than 197.4 million yuan”. The issuer provided several loans to Fuhua Yuqi from 2017 to 2019, and the loan balance was 41.87 million yuan as of September 30, 2021.
From 2018 to 2020, Fuhua Yuqi achieved net profits of -268842 million yuan, – 210118 million yuan and -133109 million yuan respectively.
The issuer is requested to supplement: (1) in combination with the performance of Fuhua Yuqi during the reporting period and the performance forecast of the company in 2021, explain the main reasons for the continuous loss of Fuhua Yuqi’s performance and its impact on the overall performance of the company; (2) Combined with the business model of Beijing Fuhua Yuqi and the collection of relevant customers, explain whether the recovery of Fuhua Yuqi’s accounts and notes receivable and the provision for impairment are sufficient; (3) Fuhua Yuqi failed to fulfill its performance commitment for 20182020, and Tian bin and other minority shareholders did not make performance compensation; On the premise of continuous losses of Fuhua Yuqi, the reasons for the issuer’s continued capital increase; The reasons for Tian Bin’s continuous reduction of the issuer’s shares and the purpose of the reduction funds; Whether the foregoing circumstances harm the interests of listed companies and minority shareholders; (4) Explain the realizability of performance commitment after change and relevant measures; The measures taken by the issuer to ensure the relevant parties to fulfill their compensation obligations and their feasibility; Whether there is any change in the commitment of the listed company and other damage to the interests of the listed company; (5) The financial support provided by the issuer to Fuhua Yuqi after its acquisition, whether other shareholders of Fuhua Yuqi provide funds to Fuhua Yuqi in the same proportion, the purpose and flow direction of relevant funds, the causes of non operating transactions between the issuer and Fuhua Yuqi and subsequent repayment, and whether the company takes effective measures to prevent the risk of irrecoverable funds; Whether the controlling shareholder, actual controller or other shareholders illegally occupy the funds of the listed company through Fuhua Yuqi. The issuer is requested to disclose the relevant risks of (1).
The sponsor is requested to check and give a clear opinion, the accountant checks and gives a clear opinion on (1) (2) (5), and the lawyer of the issuer checks and gives a clear opinion on (3) (4) (5).
reply:
The inspection of this document includes but is not limited to: Audit reports of Fuhua Yuqi over the years during the reporting period, annual reports of listed companies over the years and performance forecast of 2021; 2. Capital increase agreement signed by the listed company and minority shareholders; 3. The announcement on capital increase of the holding subsidiary Beijing Fuhua Yuqi Information Technology Co., Ltd., the announcement on the change of relevant contents of the capital increase agreement and related party transactions of the holding subsidiary Beijing Fuhua Yuqi Information Technology Co., Ltd. in 2017, and the corresponding resolution documents of the board of directors and the general meeting of shareholders; 4. Announcement of Uroica Precision Information Engineering Co.Ltd(300099) on reply to the letter of concern of Shenzhen Stock Exchange; 5. Interview with Tian bin; 6. Relevant announcements on Tian Bin’s share reduction during the reporting period, as well as relevant laws and regulations such as the securities law, several provisions on share reduction by shareholders, directors, supervisors and senior managers of listed companies, and the detailed rules for the implementation of share reduction by shareholders, directors, supervisors and senior managers of Listed Companies in Shenzhen Stock Exchange; 7. Relevant agreements on the loan provided by the listed company to Fuhua Yuqi; 8. Flow of Fuhua Yuqi bank during the reporting period; 9. Relevant management systems of Fuhua Yuqi, etc.
On the basis of the above relevant verification, the lawyer in charge of the office issued the following legal opinions:
(I) reasons why Fuhua Yuqi failed to fulfill its performance commitment from 2018 to 2020 and Tian bin and other minority shareholders did not make performance compensation; On the premise of continuous losses of Fuhua Yuqi, the reasons for the issuer’s continued capital increase; The reasons for Tian Bin’s continuous reduction of the issuer’s shares and the purpose of the reduction funds; Does the foregoing damage the interests of listed companies and minority shareholders
1. Reasons why Fuhua Yuqi failed to fulfill its performance commitment from 2018 to 2020 and Tian bin and other minority shareholders did not make performance compensation
According to the capital increase agreement signed by the listed company and Tian bin and other minority shareholders (hereinafter referred to as “minority shareholders” or “management team”) in November 2017, the agreement stipulates that the listed company will increase the capital of Fuhua Yuqi by 70 million yuan with its own funds. After the capital increase, the proportion of equity held by the listed company in Fuhua Yuqi will be increased to 63.99%; Meanwhile, Tian bin and other minority shareholders are Fuhua Yuqi’s management team. In order to urge them to be diligent and conscientious and effectively improve Fuhua Yuqi’s business performance, the listed company reached an agreement with the minority shareholders, and the minority shareholders made a commitment to Fuhua Yuqi’s future business performance and recovery of accounts receivable. Among them, the specific contents of the operating performance commitment are: the cumulative net profit of Fuhua Yuqi in 2018, 2019 and 2020 (hereinafter referred to as “phase I”) is not less than 105 million yuan, and the cumulative net profit in 2021 and 2022 (hereinafter referred to as “phase II”) is not less than 92.4 million yuan.
According to the audit results from 2018 to 2020, Fuhua Yuqi achieved a cumulative net profit of -612069 million yuan in the first stage. According to the agreement, minority shareholders should compensate Fuhua Yuqi 166 million yuan.
According to the information statement issued by the issuer, after the expiration of the performance commitment in the first stage, the management of the listed company has been negotiating with minority shareholders for solutions. After comprehensive consideration and implementation of internal decision-making procedures, the listed company postponed the performance compensation of minority shareholders and changed the original agreement to an eight-year cumulative net profit of no less than 197.4 million yuan from 2018 to 2025. The main reasons are as follows:
(1) Fuhua Yuqi’s failure to complete the agreed performance is indeed affected by external objective factors
After this capital increase, Fuhua Yuqi’s performance did not meet expectations, which was indeed affected by external market environment factors. In 2018, due to the mixed reform of national railway, Fuhua Yuqi lost more orders for the well-developed rail transit information and communication business and failed to achieve the expected revenue; In the same year, the United States sanctioned company Z, which blocked Fuhua Yuqi’s procurement and greatly affected some businesses; In addition, the covid-19 pneumonia epidemic that began in early 2020 led to the postponement or cancellation of several projects of the company, which had a partial impact on the performance.
(2) Delayed performance compensation is conducive to ensuring the normal production and operation of Fuhua Yuqi
The delayed performance compensation is conducive to ensuring the normal production and operation of Fuhua Yuqi. Tian bin and other minority shareholders are also the management team of Fuhua Yuqi. The main personnel of the team are from well-known communication enterprises such as ZTE and Huawei, with strong professional ability. In order to get rid of the adverse effects of the above external factors, the management team led Fuhua Yuqi to actively adjust its business strategy and strive to improve its business situation. Since the second half of 2020, with the help of technology accumulation and customer resources in the field of coal mine information and communication, Fuhua Yuqi has begun to focus on smart mine business, and has achieved initial results. If the company recovers from minority shareholders at this time, it will affect the stability of Fuhua Yuqi’s management team and is not conducive to Fuhua Yuqi’s normal production and operation.
Delaying the implementation of performance compensation is conducive to better safeguard the interests of listed companies. Since 2021, Fuhua Yuqi’s business has realized the transformation to smart mine 5g business. The company’s smart mine business needs Fuhua Yuqi’s intervention at present and in the future to play a synergistic effect, and there is a large development space in the future. Therefore, the information and communication business carried by Fuhua Yuqi will constitute an important part of the company’s strategy to promote the implementation of smart mine business in the future. Deferred performance compensation can maintain the stability of the management team and promote the normal operation and management of Fuhua Yuqi, so as to better safeguard the interests of listed companies.
To sum up, when the listed company increases the capital of its holding subsidiaries with its own funds, the performance compensation is set with the management team for the consideration of internal management and performance appraisal. Its original intention is to urge the management team to be diligent and conscientious, and effectively improve Fuhua Yuqi’s business performance. Moreover, Fuhua Yuqi’s failure to fulfill its performance commitment has the influence of external objective factors, In order to ensure the normal production and operation of Fuhua Yuqi and better safeguard the interests of listed companies, it is necessary for minority shareholders to postpone performance compensation
