Sinolink Securities Co.Ltd(600109)
About Chongqing Lummy Pharmaceutical Co.Ltd(300006)
Regular on-site inspection report during continuous supervision
Name of recommendation institution: Sinolink Securities Co.Ltd(600109) abbreviation of the recommended company: Chongqing Lummy Pharmaceutical Co.Ltd(300006)
Name of sponsor representative: Yan Huatong Tel.: 021 Suzhou Gyz Electronic Technology Co.Ltd(688260) 21
Name of sponsor representative: Wang Xiaojiang Tel: 021 Suzhou Gyz Electronic Technology Co.Ltd(688260) 21
Name of on-site inspector: Yan Huatong, Zhu zhe corresponding period of on-site inspection: 2021
On site inspection time: November 18-26, November 30-December 2, 2021, March 21-24, 2022
1、 On site inspection items and opinions
(I) whether corporate governance is not applicable
On site inspection means: (1) consult the articles of association and various rules and regulations; (2) Consult the "three meetings" documents, including meeting notice, sign in form, meeting resolution, meeting minutes, announcement, etc; (3) Inspect the company's main production and operation sites on the spot, interview relevant personnel, and understand the company's governance and independence; (4) Check the register of shareholders of the company; (5) Query the industrial and commercial information of the foreign invested enterprises of the controlling shareholders through the Internet; (6) Consult the company's information disclosure documents.
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 three sessions 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 managers of the company perform their duties in accordance with relevant laws, administrative regulations, departmental rules, √ normative documents and relevant business rules of the exchange
6. In case of major changes in the directors, supervisors and senior management of the company, whether the corresponding procedures and information have been implemented √
Disclosure obligation
7. If the controlling shareholder or actual controller of the company changes, has it fulfilled √
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 its controlling shareholders and actual controllers √ [Note 1]
(II) internal control
On site inspection means: (1) consult the company's internal control system, the company's internal control evaluation report and the internal control assurance report; (2) Consult the company's employee roster and internal audit materials, including internal audit system, internal audit report, etc; (3) Access to the information of the audit committee, including working rules, meeting minutes, etc; (4) Interview relevant personnel of the company; (5) Consult the foreign investment management system and the "three meetings" documents related to investment decision-making. 1. Whether the internal audit system and internal audit department are established in accordance with relevant regulations √ (if applicable)
2. Whether the internal audit system is established within 6 months after the listing of shares and √
3. Audit department (if applicable) Whether the personnel composition of the internal audit department and the audit committee is in compliance (if applicable) Whether the audit committee holds a meeting at least quarterly to review the work plan and report submitted by the internal audit department (if applicable) 5 Whether the audit committee reports the internal audit to the board of directors at least once a quarter √ work progress, quality and major problems found (if applicable) 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 once a quarter (if applicable) 7 Whether the internal audit department conducts an audit on the deposit and use of raised funds at least once a quarter (if applicable) 8 Whether the internal audit department submits the internal audit work plan for the next year (if applicable) to the audit committee two months before the end of each fiscal year 9 Whether the internal audit department submits the annual internal audit report (if applicable) 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 (if applicable) to the audit committee at least once a year 11 Whether a complete and compliant internal control system has been established for matters such as venture capital, entrusted financial management and hedging business (III) on-site inspection means of information disclosure: (1) consult the company's information disclosure management system and information disclosure documents; (2) Consult the "three meetings" documents, including meeting notice, sign in form, meeting resolution, meeting minutes, etc; (3) Check the record materials of investors' visits and the interactive website of Shenzhen Stock Exchange; (4) Interview relevant personnel.
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 record form of investor relations activities 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 company's interests from infringement: (1) consult the company's internal control system, related party transaction management system, external guarantee management system and other relevant regulations; (2) Consult the company's "three meetings" materials and information disclosure documents; (3) Interview relevant personnel of the company; (4) Consult the company's related party transaction agreement and other relevant materials; (5) Spot check the company's seal records. 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 case of non affiliated transactions √
6. Whether the external guarantee review procedure is compliant and fulfills the corresponding meaning of information disclosure √
Affairs
7. Whether the guaranteed party is free from deterioration of financial condition and failure to pay off the guaranteed debt at maturity √
Other situations
8. If the guaranteed debt continues to be guaranteed after maturity, has it been performed again √
Examination and approval procedures and disclosure obligations (V) on-site inspection means for the use of raised funds: (1) consult the company's raised funds management system and the tripartite supervision agreement for raised funds; (2) Consult the company's "three meetings" materials and information disclosure documents related to the management and use of raised funds; (3) Check the company's account for the use of raised funds, the bank statement of the special account for raised funds, the bank flow of the special account for raised funds, relevant business contracts, accounting vouchers, etc; (4) Interview relevant personnel of the company on the storage and use of raised funds and communicate with accountants; (5) Consult the accountant's assurance report on the deposit and use 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 √
√ whether there is any violation of the third party to raise funds or not √ 4.4 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 Use idle raised funds to temporarily supplement working capital and invest the raised funds in
Change to permanent replenishment of working capital or replenishment of working capital with over raised capital √
6. Whether the company has not made venture capital investment during the commitment period in case of payment or repayment of bank loans 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 √
(VI) on site inspection means of performance: (1) consult the regular reports disclosed by the company, calculate and analyze the performance of the company; (2) Consult industry research reports, regular reports of Listed Companies in the same industry, and conduct comparative analysis with the company; (3) Interview relevant personnel of the company on relevant financial matters and communicate with accountants.
1. Whether there is no significant fluctuation in performance √
2. Whether there is a reasonable explanation for the sharp fluctuation of performance √
3. Compared with comparable companies in the same industry, whether there is no obvious abnormality in the company's performance √ (VII) on-site inspection means of the company and shareholders' commitment performance: (1) check the commitment documents made by the company, shareholders, directors, supervisors, senior managers and other relevant personnel; (2) Check the company's regular reports, temporary announcements and other information disclosure documents; (3) Through the network, query the ownership structure of relevant shareholders; (4) Interview relevant personnel of the company.
1. Whether the company has fully fulfilled relevant commitments √
2. Whether the shareholders of the company have fully fulfilled relevant commitments √
(VIII) on site inspection means for other important matters: (1) consult the articles of association, dividend plan, relevant "three meetings" documents, etc; (2) Consult the company's foreign investment management system, internal control system, major contracts, large capital payment records and relevant approval documents; (3) Consult industry research reports, policy documents and interview some directors, supervisors and senior managers of the company
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 amount of capital transactions have real transaction background and reasonable reasons √
4. Whether there is no significant change or √ risk in the process of major investment or major contract performance
5. Whether there is no significant change or risk in the company's production and operation environment √
6. Whether the problems found by the early-stage regulators and sponsors have been solved according to the relevant requirements √
Rectification II. Problems found in on-site inspection and description
Note 1: horizontal competition between the company and the controlling shareholders
The core business of the company's controlling shareholder Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) (hereinafter referred to as " Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) ") is the manufacturing of Chinese patent medicines. The company's main business is pharmaceutical manufacturing, and the subdivided industries are the manufacturing of chemical APIs and chemical preparations. During the reporting period, the company also produced and sold a small amount of Chinese patent medicines and decoction pieces Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) some products have similar ingredients and indications to a small number of products of the company and its controlling enterprises, and there is potential horizontal competition.
In order to standardize and avoid horizontal competition, the company transferred all the equity of Sichuan Hezheng Pharmaceutical Co., Ltd., a subsidiary producing and selling Chinese patent medicine, to Hangzhou Bryson Pharmaceutical Technology Co., Ltd. in April 2021. During the reporting period, the proportion of the company's revenue from Chinese patent medicine and decoction pieces in the total operating revenue has decreased from 8.81% in 2020 to 2.93%.
In addition, in order to protect the legitimate rights and interests of the company, Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) issued a commitment on avoiding horizontal competition with Chongqing Lummy Pharmaceutical Co.Ltd(300006) and its controlled enterprises in January 2020. During the reporting period, Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) did not violate the above commitments.
(there is no text on this page, which is the signature page of Sinolink Securities Co.Ltd(600109) report on regular on-site inspection during Chongqing Lummy Pharmaceutical Co.Ltd(300006) continuous supervision) sponsor representatives: Yan Huatong and Wang Xiaojiang
Sinolink Securities Co.Ltd(600109) March 24, 2022
