Hengdian Entertainment Co.Ltd(603103)
Report on the work of independent directors in 2021
(Pan Weiguang)
My term of office expires on June 29, 2021 and I have served as an independent director of Hengdian Entertainment Co.Ltd(603103) (hereinafter referred to as “the company”) for 6 consecutive years. During the term of office, I strictly abide by the provisions of the company law, the securities law, the rules for independent directors of listed companies, the Listing Rules of Shanghai Stock Exchange and other relevant laws, regulations and rules, as well as the requirements of the articles of association and the working system for independent directors of the company, and exercise the rights of independent directors diligently and prudently, Actively understand the operation and development of the company, actively attend the board of directors and shareholders’ meetings, participate in major decisions of the company, give full play to their professional advantages on major matters considered by the board of directors, express independent and objective opinions, effectively safeguard the sorting interests of the company and the legitimate rights and interests of all shareholders, and fulfill their duties and obligations of integrity and diligence.
I hereby report my work report in 2021 as follows:
1、 Basic information
Mr. Pan Weiguang, born in 1970, Chinese nationality, without overseas residency, has a doctorate in management, professor and doctoral supervisor. During the reporting period, he served as an independent director of the company and the executive vice president of Zhejiang Rural Revitalization Research Institute of Zhejiang agriculture and Forestry University, a new think tank of Zhejiang Province. He once served as deputy director of the Department of Agricultural Economics and management of Zhejiang University.
Tenure of the special committee: former chairman of the nomination committee, member of the strategy committee and member of the remuneration and assessment committee.
2、 Attendance at meetings
During the term of office, the company held three board meetings and two general meetings of shareholders. With a diligent attitude, I participated in all the board of directors and shareholders’ meetings held by the company during my term of office, carefully reviewed the meeting materials, actively participated in the discussion of various topics and put forward reasonable suggestions, which played a positive role in the correct decision-making of the board of directors. During the reporting period, the convening of the board of directors and the general meeting of shareholders of the company met the legal requirements, and the relevant examination and approval procedures were performed for major matters. I voted in favour of all the proposals on the board of directors, without negative votes or abstention. During the term of office, the nomination committee of the board of directors of the company held two meetings, the strategy committee held one meeting in, and the members of the remuneration and assessment committee held one meeting. I attended all the above meetings.
3、 Independent opinions
During my term of office, I earnestly, diligently and conscientiously performed my duties in strict accordance with the requirements of the working system of independent directors, and attended the board of directors and shareholders’ meeting of the company. According to the requirements of relevant regulations, after understanding the situation and consulting relevant documents, he expressed independent opinions. It mainly includes:
(I) related party transactions
During his term of office, he checked the related party transactions of the company and expressed independent opinions, believing that the related party transactions meet the needs of business operation of both parties and are a reciprocal and mutually beneficial business behavior on the basis of fair price. When the board of directors votes on the proposal involving related party transactions, the related directors of the company shall withdraw. I believe that the price of the related party transactions of the company is fair and the procedures are in compliance, and there is no case of transferring interests to related parties and damaging the interests of shareholders of the company.
(II) profit distribution
The net profit attributable to the shareholders of the parent company in 2020 is RMB -48052576965, and the accumulated undistributed profit is RMB 52523263792. In order to ensure the sustainable and stable operation of the company and the long-term interests of all shareholders, the board of directors of the company comprehensively considers the business plan and capital demand of the company in 2021, and the profit distribution plan of the company in 2020 is: no profit distribution, Nor will capital reserve be converted into share capital or other forms of distribution. The distribution plan has been deliberated and approved by the 14th meeting of the second board of directors, the 13th meeting of the second board of supervisors and the 2020 annual general meeting of shareholders. The voting procedure is open and transparent, and the deliberation procedure complies with the relevant provisions of laws, regulations and the articles of association.
(III) changes in accounting policies
The Ministry of Finance revised and issued the accounting standards for Business Enterprises No. 21 – leasing on December 7, 2018, which requires enterprises listed at home and abroad and enterprises listed abroad and preparing financial reports using international financial reporting standards or accounting standards for business enterprises to be implemented from January 1, 2019; Other enterprises that implement the accounting standards for business enterprises shall be implemented as of January 1, 2021. According to the requirements of the above documents, the company will implement the new leasing standards from January 1, 2021. The 14th meeting of the second board of directors of the company deliberated and approved the proposal on the change of the company’s accounting policies, and agreed to change the company’s accounting policies, so that the company’s accounting policies can comply with the relevant provisions of the Ministry of finance, China Securities Regulatory Commission and Shanghai Stock Exchange, and can objectively and fairly reflect the company’s financial status and operating results. The decision-making procedure of this accounting policy change complies with the provisions of relevant laws, regulations and the articles of association, and there is no situation that damages the interests of the company’s shareholders, especially the minority shareholders. I agree with the change of the company’s accounting policy.
(IV) appointment or replacement of accounting firms
In 2021, the company did not change its accounting firm. While serving as the company’s financial audit institution, Lixin Certified Public Accountants (special general partnership) adhered to the independent audit standards, audited the financial statements for the company, ensured the smooth development of the company’s work, and better fulfilled the responsibilities and obligations specified in the employment contract.
(V) general election and appointment of senior managers
During the reporting period, the company conducted the general election of the board of directors and the appointment of senior managers. It is verified that the qualifications of non independent directors and independent director candidates are legal, and their educational background, professional knowledge, work experience and work ability are competent for the responsibilities of directors of the company; There are no circumstances stipulated in the company law and the articles of association that they are not allowed to serve as directors of the company, and there are no circumstances that they are determined to be prohibited from entering the market by the CSRC and have not been lifted, and they have not received any punishment and punishment from the CSRC and the stock exchange. The nomination and voting procedures of the board of directors for the candidates of non independent directors and independent directors of the third board of directors comply with the provisions of the company law and the articles of association. I agree to the nomination of non independent director candidates and independent director candidates and submit them to the general meeting of shareholders of the company for deliberation.
After reviewing the resumes of the chairman elected at the first meeting of the third board of directors and the appointment of senior managers, it is not found that these personnel are not allowed to serve as directors and senior managers of the company as stipulated in the company law. Its nomination and voting procedures comply with relevant laws, administrative regulations and relevant provisions of the CSRC, Shanghai Stock Exchange and the articles of association. I agree with the above election and appointment.
(VI) remuneration of directors and senior managers
During the term of office, the remuneration, assessment and incentive of the company’s directors and senior managers shall be implemented in accordance with relevant regulations, and the salary payment procedure shall comply with the provisions of relevant laws, regulations and the articles of association. I have no objection to this.
(VII) implementation of internal control
During the term of office, the company established and improved the internal control system according to the regulatory policies and combined with its own business needs. The corporate governance structure was perfect and effective, and the internal control organization was set up reasonably. The company’s internal control system had covered all business processes of the company, and the internal control was effective on the whole.
(VIII) operation of special committees under the board of directors
During the term of office, the strategy, audit, nomination, remuneration and assessment committees under the board of directors can faithfully perform their duties with a serious and responsible attitude of diligence and integrity according to the actual situation of the company and their respective working systems. (IX) entrusted financial management of idle self owned funds
During the term of office, on the premise of ensuring the capital demand of normal business activities, the company plans to use its own funds of no more than RMB 1.5 billion to invest in financial management by purchasing financial products. Within the above amount, the funds can be used on a rolling basis. It is agreed to submit to the general meeting of shareholders to authorize the chairman of the board of directors to approve the purchase of financial products with the company’s idle funds, which is conducive to improving the efficiency of fund use and in line with the interests of the company and all shareholders.
(x) performance of commitments of the company and shareholders
During the term of office, the company’s disclosure of relevant commitments is true and sufficient, and there is no situation that should be disclosed but not disclosed. At the same time, the company can actively urge all parties to ensure that all relevant commitments are fulfilled in a timely and effective manner.
（11） Implementation of information disclosure
During my tenure, I have paid continuous attention to and supervised the company’s information disclosure. The company’s information disclosure system is sound and can be implemented in strict accordance with the relevant provisions of laws and regulations such as the Listing Rules of Shanghai Stock Exchange. The information disclosure is true, accurate, timely and complete without any false records, misleading statements or major omissions.
4、 On site investigation of the company
During my term of office, I made many on-site visits to the company to understand the operation and financial situation of the company. Keep close contact with other directors, senior managers and relevant staff of the company through telephone and e-mail, always pay attention to the impact of external environment and market changes on the company, pay attention to the media and network reports of the company, timely learn the progress of major matters of the company and master the operation dynamics of the company.
5、 Work done to protect the rights and interests of investors
1. The company can do a good job of disclosure in strict accordance with the relevant provisions of laws and regulations such as the Listing Rules of Shanghai Stock Exchange, the measures for the administration of information disclosure of listed companies and the guidelines for the information disclosure system of listed companies of Shanghai Stock Exchange, so as to ensure that the information disclosure of the company during its term of office is true, accurate, timely and complete Safeguarding the interests of the company and investors.
2. Investigation on corporate governance structure and operation management. I communicate with relevant personnel of the company, deeply understand the improvement and implementation of the company’s operation management, internal control and other systems, the implementation of resolutions of the board of directors, financial management and other related matters, pay attention to the company’s daily operation and governance, timely understand the company’s daily operation status and possible business risks, and consult the information and materials required for making decisions, And fully express their opinions at the meeting of the board of directors; For each proposal considered by the board of directors, first carefully review the proposal materials and relevant introductions, and conduct it independently, objectively and prudently on the basis of full understanding
