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December, 2021
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In accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of the registration of initial public offerings on the gem (for Trial Implementation), the measures for the administration of the recommendation business of securities issuance and listing and other relevant laws, administrative laws and regulations, as well as the provisions of the China Securities Regulatory Commission, the recommendation institution and the recommendation representative are honest, trustworthy, diligent and responsible, and in strict accordance with the business rules formulated according to law The industry code of practice and code of ethics shall issue the recommendation work report of this issuance, and ensure the authenticity, accuracy and integrity of the documents issued.
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Declare that 1 catalog 2 interpretation Section 1 project operation process four
1、 Project review process four
2、 The main process of the project initiation review six
3、 The main process of project implementation and the verification of important matters six
4、 Project internal verification process forty-three
5、 The process of the nuclear Committee reviewing this project Section II existing problems and solutions of the project forty-six
1、 Project initiation and review of the project forty-six
2、 Main problems found and concerned in the process of project due diligence and their solutions forty-six
3、 Main issues concerned by the internal verification department and their implementation fifty-one
4、 Main issues, audit opinions and implementation of the core meeting sixty-four
5、 Differences and solutions with professional opinions issued by other securities service institutions eighty-six
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In this recommendation work report, unless the context otherwise requires, the following abbreviations and terms have the following meanings: the company, Liansheng chemical and the issuer refer to Zhejiang Liansheng Chemical Co., Ltd
Liansheng Chemical Co., Ltd. refers to Linhai Liansheng Chemical Co., Ltd., which is the predecessor of Liansheng chemical
Liansheng group refers to Liansheng Chemical Group Co., Ltd., which is the controlling shareholder of Liansheng chemical
Liansheng industry refers to Zhejiang Liansheng Chemical Industry Co., Ltd., which is the former name of Liansheng group
Taizhou high investment refers to Taizhou Goldman Sachs investment partnership (limited partnership) and the shareholder of Liansheng chemical
Liansheng import and export refers to Zhejiang Liansheng import and Export Co., Ltd., a wholly-owned subsidiary of Liansheng chemical
Ruisheng pharmaceutical refers to Leping Ruisheng Pharmaceutical Co., Ltd., a subsidiary of Liansheng Chemical Holdings
Beijiao chemical refers to Cangzhou Lingang Beijiao Chemical Co., Ltd., a wholly-owned subsidiary of Liansheng chemical
Zhoushan Liansheng refers to Zhoushan Liansheng Chemical Co., Ltd., a wholly-owned subsidiary of Liansheng chemical
Liansheng engineering refers to Taizhou Liansheng Chemical Engineering Co., Ltd., a wholly-owned subsidiary of Liansheng group
Liansheng storage refers to Zhejiang Liansheng storage Co., Ltd., a wholly-owned subsidiary of Liansheng group
The general meeting of shareholders refers to the general meeting of shareholders of Zhejiang Liansheng Chemical Co., Ltd
Board of directors refers to the board of directors of Zhejiang Liansheng Chemical Co., Ltd
The board of supervisors refers to the board of supervisors of Zhejiang Liansheng Chemical Co., Ltd
Sinolink Securities Co.Ltd(600109) . Sponsor refers to Sinolink Securities Co.Ltd(600109)
Underwriting and recommendation branch refers to Sinolink Securities Co.Ltd(600109) Shanghai securities underwriting and recommendation branch
Tianjian certified public accountants refer to Tianjian Certified Public Accountants (special general partnership)
Guohao and lawyer refer to Guohao law firm (Hangzhou)
The articles of association refers to the articles of association of Zhejiang Liansheng Chemical Co., Ltd
The articles of Association (Draft) refers to the articles of Association (Draft) of Zhejiang Liansheng Chemical Co., Ltd
Company Law refers to the company law of the people’s Republic of China
Securities Law refers to the securities law of the people’s Republic of China
The IPO Measures refer to the measures for the administration of the registration of initial public offerings on the gem (for Trial Implementation)
The administrative measures for recommendation refers to the administrative measures for the recommendation business of securities issuance and listing
CSRC refers to the China Securities Regulatory Commission
This offering refers to the public offering of RMB common shares to the public
Projects invested with raised funds refer to projects invested with raised funds
The reporting period refers to 2018, 2019, 2020 and January June 2021
Yuan and 10000 yuan refer to RMB yuan and 10000 yuan
Unless otherwise specified in this recommendation work report, relevant terms have the same meaning as in the prospectus of Zhejiang Liansheng Chemical Co., Ltd. for initial public offering and listing on GEM.
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The project operation process of the sponsor mainly includes the stages of preliminary due diligence, project initiation review, production of application materials, project core, etc. the project initiation review and project core are the review links of the project. The specific processes and rules are as follows:
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Project initiation is a project screening process. The recommendation agency has formulated the measures for the administration of the initiation of Sinolink Securities Co.Ltd(600109) Shanghai securities underwriting and recommendation branch (hereinafter referred to as the “measures”) to standardize the project initiation review procedures. The specific review procedures are as follows: first, the handling business department shall conduct preliminary due diligence on the project to be undertaken, understand the basic situation of the issuer, and collect relevant materials and information, Then, the person in charge of the handling business department shall organize a department meeting to carefully judge the project quality.
For projects that are judged to be feasible by the business department, apply for project initiation after reaching the cooperation intention with the customer, and submit application materials including project due diligence report, relevant agreements and other supplementary materials as required. The project initiation application shall be reviewed by the project initiation evaluation team. In general, the project initiation shall be voted in writing through the office automation system in principle. The project initiation committee members shall clearly indicate their voting results (including consent and disagreement) and relevant opinions in the office automation system. If the quality control department determines that the project evaluation team is unable to make judgment or the project evaluation team considers that the project needs to be submitted to the on-site meeting for discussion, the on-site meeting shall be held for deliberation. In principle, all projects applied for project initiation shall be approved if they meet the project initiation standards specified in the project initiation measures and have no major obstacles.
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The project core is a project quality control process. The sponsor has formulated the core management measures for investment banking projects, guidelines for on-site verification of the quality control department and other systems to standardize the core procedures of the project. The audit procedures are divided into project quality acceptance application, verification and pre-trial of the quality control department, pre-trial Reply of the project team, audit and verification of the core department, convening of the core meeting, consent and declaration, etc, The details are as follows:
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After completing the preparation of application materials, the project team shall apply for quality acceptance. The submitted materials mainly include prospectus, audit report, legal opinion, lawyer’s work report, project working paper (including working paper catalogue, project working paper index table), checklist and other documents required by the company.
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After accepting the application for quality acceptance, the quality control department shall send personnel to the project site to conduct on-site inspection on the issuer’s production, operation and management process and the on-site work of the project team, and focus on the major legal and financial issues involved in the application materials submitted by the project team, the consistency, accuracy, completeness and other important issues of various documents, And discuss the problems existing in the project with the relevant principals of the issuer and the project team; Relevant personnel of the quality control department carefully review the due diligence working paper of the project, whether the relevant professional opinions and recommended documents are fully based, and whether the project team is diligent and responsible to issue clear acceptance opinions. After the inspection, the quality control department will sort out the problems found in the material verification and on-site inspection, form the quality control preliminary review opinions, and feed them back to the project team of the business department.
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After receiving the quality control preliminary review opinions, the project team shall issue a reply to the quality control preliminary review opinions, modify the application documents according to the quality control preliminary review opinions, and timely feed back the different opinions to the quality control department to state and explain the reasons.
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The quality control department shall issue the project quality control report in combination with the verification, acceptance of the working paper and the reply to the pre-trial comments of the project team. After the modified application materials of the project team are reviewed and approved, the relevant materials shall be submitted to the internal audit department of the company. The core department shall review the core application materials of the project team, the pre-trial opinions and quality control reports issued by the quality control department, and submit them to the core meeting for discussion if there are other doubts or major problems that need attention.
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Check the due diligence of important matters of the initial project item by item. If it is found that the sponsor representative and other project personnel are insufficient, they shall put forward written rectification opinions and require the project personnel to implement them.
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The core meeting shall be attended by the members of the core Committee. The project related auditors of the core department and quality control department shall attend the meeting as nonvoting delegates. The audit department can appoint representatives to attend the meeting as nonvoting delegates, and the personnel of the project team shall attend the core meeting as nonvoting delegates. The core meeting includes the following procedures: the host announces the number and list of members participating in the core meeting; The project leader introduces the general situation of the project team; The person in charge of the nuclear department, the person in charge of the quality control department or the on-site verifier shall evaluate the project; Members of the kernel Committee shall ask questions freely about the problems existing in the project application materials, and the project team personnel shall answer them; The core members vote, and the staff of the core department count the votes; The moderator summarizes the review opinions and announces the voting results.
There are four kinds of voting results: “if the number of” agree “votes accounts for more than 2 / 3 of the members participating in the resolution, it shall be deemed as” approved “; If the total votes of “consent” and “conditional consent” (at least one vote) account for more than 2 / 3 of the members participating in the resolution, it shall be deemed as “conditional approval”; If the number of “proposed abandonment of the project” accounts for more than 2 / 3 of the members participating in the resolution, it shall be deemed as “proposed abandonment of the project”; In other cases, the audit result is “suspension of voting”.
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After the project is approved by the kernel meeting, the project team shall implement the relevant opinions one by one, and the kernel department shall check the implementation of the relevant opinions. After the relevant opinions are implemented, they shall be submitted to Shenzhen stock exchange for review after being reviewed and approved by the relevant person in charge of the recommendation institution “+$,%&-./0()
In May 2020, the project team began to conduct preliminary due diligence on Liansheng chemical’s IPO project, preliminarily understand the basic situation of the issuer, confirm that there are no major substantive obstacles to the project, and submit the project initiation application to the sponsor. After deliberation by the sponsor’s project initiation evaluation team, the project initiation application was approved on May 26, 2020 and the project initiation procedures were handled. 1 “$23-./0(45/6-&789)
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Sponsor representatives Nie min and Zhang Feng
Project Co organizer Liu Ting
Other members of the project team: Hu Ning and Zeng Yating
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The IPO project of the gem will start in May 2020.
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After the project is approved and approved, the project team starts the due diligence of the project and the production of application materials. Here, the project team conducted a comprehensive due diligence investigation on the issues related to the IPO of the issuer in accordance with the requirements of relevant normative documents of the CSRC. The scope of the investigation covered the basic information of the issuer, business and technology, horizontal competition and related party transactions, senior executives, organizational structure and internal control, finance and accounting, business development objectives, application of raised funds, risk factors and other important matters.
The survey methods adopted by the project team mainly include:
1. Submit the list of investigation documents to the issuer, collect documents, materials and certificates of rights related to this issuance from the issuer, check and confirm them, and check the original and copies;
2. Go to relevant administrative departments to consult materials according to law, and inquire about the issuer’s compliance with the law from relevant administrative authorities;
3. Talk with the chairman of the issuer, the Secretary of the board of directors, the person in charge of Finance and other senior executives and relevant business personnel, make due diligence records, and ask them about the issues involved in this issuance;
4. Obtain the written statements, promises or testimonies of the issuer and its directors, supervisors, senior managers or relevant competent authorities, and conduct careful verification and confirmation;
5. Participate in the coordination meeting on this issuance organized by the issuer and communicate with the issuer and relevant intermediary personnel on special issues;
6. On site verification of the issuer’s relevant assets;
7. Visit the issuer’s main customers, suppliers, traders and end users;
8. Calculate relevant data and conduct analysis and review;
9. The project team shall timely report the problems found in the work to the relevant departments of the issuer
