Hongta Securities Co.Ltd(601236)
About Guocheng Mining Co.Ltd(000688)
Regular on-site inspection report from July to September 2021
Name of the sponsor: Hongta Securities Co.Ltd(601236) abbreviation of the sponsored company: Guocheng Mining Co.Ltd(000688)
Name of sponsor representative: Li Qiang Tel: 010-66220009
Name of sponsor representative: Chen Bo Tel.: 010-66220009
Name of on-site inspector: Li Qiang, Chen Bo corresponding period of on-site inspection: July September 2021 on-site inspection time: December 6-20, 2021
1、 On site inspection items and opinions
(i) Does corporate governance not apply
On site inspection means: (1) interview the management and relevant personnel of the listed company; (2) Check the appointment notice of the Secretary of the board of directors appointed by the listed company, the statement and commitment of senior managers; (3) Consult the company’s information disclosure documents; (4) Consult the relevant documents of the company’s three meetings, including meeting notice, proposal, vote, meeting minutes, resolution, etc; (5) Review and verify the specific contents and implementation of the articles of association, the rules of the three sessions and various corporate governance systems; (6) The listed company is required to issue a written explanation on the relevant situation.
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 √ contents 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 management of the company perform their duties in accordance with relevant laws, administrative regulations, departmental rules, regulatory documents and relevant business rules of the exchange 6 If the directors, supervisors and senior management of the company have changed significantly, have they fulfilled the corresponding procedures and information √ disclosure obligations
7. If the controlling shareholder or actual controller of the company changes, has it fulfilled the corresponding √ procedures and information disclosure obligations
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 √
（2） Whether internal control is not applicable to on-site inspection means: (1) interview and exchange with audit and supervision departments and relevant personnel of listed companies; (2) Check the compliance of the personnel composition of the company’s internal audit department and Audit Committee; (3) Consult the internal audit report and other relevant documents issued by the company’s internal audit department; (4) Consult relevant meeting documents of the audit committee of the company; (5) Review various internal control systems formulated by the company; (6) Special audit report of the internal audit department on the storage and use of raised funds every quarter; (7) Consulted the internal control audit plan of the internal audit department and verified its implementation. 1. Whether the internal audit system and internal audit department are established in accordance with relevant regulations √
2. Whether the internal audit system is established and the internal √ audit department is established within 6 months after the listing of shares (if applicable)
3. Whether the personnel composition of the internal audit department and the audit committee is compliant (if applicable √
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 (if applicable) 5 Whether the audit committee reports the internal audit progress, quality and major problems found to the board of directors at least once a quarter (if applicable) 6 Whether the internal audit department reports the implementation of the internal audit work plan and the problems found in the internal audit work to the audit committee at least quarterly √ (if applicable) 7 Does the internal audit department audit the deposit and use of raised funds at least once a quarter (if applicable)
8. Does the internal audit department submit the internal audit work plan for the next year to the audit committee two months before the end of each fiscal year (if applicable)
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 (if applicable)
10. Does the internal audit department submit an internal √ control evaluation report to the audit committee at least once a year (if applicable)
11. Whether it is established for engaging in venture capital, entrusted financial management, hedging business, etc. √
A complete and compliant internal control system has been established
（3） Is information disclosure not applicable
On site inspection means: (1) interview and exchange with the management and relevant personnel of the listed company; (2) Consult the company’s information disclosure documents and relevant supporting documents; (3) Consult the company’s information disclosure management system and other relevant documents; (4) Check the relevant information on the interactive website of Shenzhen Stock Exchange.
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 changed significantly 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 √
（4） Is the establishment and implementation of the long-term mechanism to protect the company’s interests not applicable
On site inspection means: (1) interview and exchange with the management and relevant personnel of the listed company; (2) Consult the articles of association, related party transaction management system and other relevant system documents; (3) Check the documents of the third meeting of the company, information disclosure documents, major contracts of the company, etc; (4) Check the current account Sub Ledger of the listed company and the important account statements of the listed company and its subsidiaries, analyze and judge whether the funds or other resources of the listed company are occupied by the controlling shareholders, actual controllers and related parties under their control for non operational purposes, and consult the relevant contracts, vouchers, three meetings documents and information disclosure documents of the company’s related transactions; (5) Obtain the credit investigation report of the listed company, check the seal registration form of the listed company from July to September 2021, review the information disclosure announcement, and comprehensively judge whether the listed company has signed the external guarantee contract and whether there is external guarantee during the reporting period. 1. Whether a system has been established to prevent the 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 in compliance 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 does not suffer from 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 performed again
（5） Is the use of raised funds not applicable
On site inspection means:
(1) Interview and exchange with the management and relevant personnel of the listed company; (2) Obtain and review the four party supervision agreement on the special account for raised funds signed by the listed company, the company implementing the raised investment project, the securities firm and the deposit bank; (3) Check the bank statement of the company’s special account for raised funds; (4) Check the fund use account of the company’s special account for raised funds; (5) Check the special audit report on the storage and use of raised funds in the third quarter of 2021 issued by the audit and inspection department of the company; (6) Review relevant meeting resolutions, information disclosure documents, prior approval opinions of independent directors, etc. of the company’s change in the implementation method of raised funds.
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 financial management in violation of regulations √ 4 Whether there is no change in the purpose of raised funds, temporary √ supplement of working capital, replacement of pre investment, change of implementation location, etc. 5 If the company uses idle raised funds to temporarily supplement working capital, changes the investment direction of raised funds to permanently supplement working capital, or uses over raised funds to supplement working capital or √ to 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） Is performance not applicable
On site inspection means: (1) interview and exchange with the management and relevant personnel of the listed company; (2) Consult the company’s periodic reports, financial statements and other materials; (3) Consult the regular reports and other information disclosure documents of comparable companies in the same industry, and make a comparative analysis with the performance and operation of listed companies; (4) The chronological accounts of the main financial subjects of the listed company were consulted, and the large amount procurement, sales contracts, capital vouchers, etc. were spot checked.
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, is there no obvious abnormality in the company’s performance √
（7） Is the performance of the company’s and shareholders’ commitments not applicable
On site inspection means: (1) interview and exchange with the management and relevant personnel of the listed company; (2) Check the relevant documents and information disclosure of the company and shareholders’ relevant commitments and their performance.
1. Whether the company has fully fulfilled relevant commitments √
2. Whether the shareholders of the company have fully fulfilled relevant commitments √
（8） Are other important matters not applicable
On site inspection means: (1) interview and exchange with the management and relevant personnel of the listed company; (2) Review and verify the company’s cash dividend system and its implementation; (3) Consult the company’s relevant contracts, vouchers, three meetings documents, information disclosure documents and other materials on external financial assistance, major investment, major contracts, large capital transactions and other important matters.
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 √ risk during the performance of major investment or major contract
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 regulatory authorities and the sponsor in the early stage have been rectified according to the relevant √ requirements. II. Problems and explanations found in the on-site inspection
From January to September 2021, Tianjin Guocheng Trading Co., Ltd. (hereinafter referred to as “Tianjin Guocheng”), a subsidiary of Guocheng Holding Group Co., Ltd. (hereinafter referred to as “Guocheng group”), the controlling shareholder of the listed company, had zinc ingot trading business, and there was horizontal competition with Tianjin Guorui Trading Co., Ltd. (hereinafter referred to as “Tianjin Guorui”), a subsidiary of the listed company.
After discovering the above horizontal competition, the recommendation institution shall immediately urge the listed company to carry out self-examination, rectification and information disclosure. On August 26, 2021, the listed company issued Guocheng Mining Co.Ltd(000688) announcement on the company’s controlling shareholders to solve the problem of horizontal competition (Announcement No.: 2021-083), which disclosed the above horizontal competition.
The recommendation institution also requires the listed company to urge the controlling shareholder to stop the zinc ingot trade business, and requires the controlling shareholder to issue a public written commitment, promising the specific measures and time limit of rectification. August 2021, The controlling shareholder Guocheng group and the actual controller Wu Cheng issued a commitment: “1. Tianjin Guocheng will no longer engage in the new trade business of the same category as the listed company; the obtained zinc ingot trade business contract will continue to be performed by Tianjin Guorui after communicating with the customer, and the relevant expenses (if any) involved will be borne by Tianjin Guocheng; Tianjin Guocheng will engage in the profits from horizontal competition business All (if any) shall be transferred to the listed company free of charge. The above rectification measures for Tianjin Guocheng to stop engaging in zinc ingot trade business shall be taken no later than 2
