Netac Technology Co.Ltd(300042)
2021 annual report of independent directors
Shareholders and shareholder representatives:
As an independent director of the fourth and fifth sessions of the board of directors of Netac Technology Co.Ltd(300042) (hereinafter referred to as “the company”), I (Zhong Gangqiang), in accordance with the company law, the securities law, the guiding opinions on the establishment of an independent director system in listed companies, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM, and several provisions on strengthening the protection of the rights and interests of public shareholders In accordance with the provisions and requirements of the articles of association, the company’s independent director system and other relevant laws, regulations, rules and regulations, the company earnestly performed the duties of independent directors in 2021, participated in the board meeting held by the company, carefully considered various proposals of the board of directors and special committees, expressed independent opinions on major matters of the company, and gave full play to the role of independent directors and special committees. I can fulfill my duties and be diligent. On the one hand, strictly review the relevant matters submitted by the company to the board of directors, safeguard the interests of the company, especially the minority shareholders, and promote the standardized operation of the company; On the other hand, give full play to my professional advantages and actively pay attention to and participate in the development of the research company. I hereby report on my performance of duties as an independent director in 2021 as follows:
1、 Attendance at board meetings
In 2021, the 5th board of directors of the company held 11 meetings of the board of directors in total, of which 1 was authorized to entrust independent directors to attend, and the rest of the board of directors attended in person. I kept full communication with the company’s management and put forward many rationalization suggestions. I carefully considered the proposals submitted to the board of directors, exercised the voting right with a cautious attitude, actively participated in the discussion and put forward rationalization suggestions during the meeting, which played a positive role in making scientific decisions for the board of directors. I voted in favour of the proposals considered by the board of directors except 6 objections and 5 abstentions, The details of 6 objections and 5 abstentions are as follows:
Matters and contents of my objection
Objections considered at the 6th (Interim) meeting of the 5th board of directors. Objection: this proposal does not provide information such as the evaluation of the benefits of foreign investment, the benefit audit of the prior case and the investment feasibility study report stipulated in Article 10 of the company’s foreign investment management system, Article 16 (I) of the company’s foreign investment management system, which is not in line with the relevant provisions of the company’s foreign investment management system.
Waiver considered at the 6th (Interim) meeting of the 5th board of directors. Reason for abstention: this proposal does not provide information such as benefit evaluation of foreign investment, benefit audit of prior case, investment feasibility study report, etc. as stipulated in Article 10 of the company’s foreign investment management system on investment and establishment of a wholly-owned subsidiary in Shenzhen, paragraph (I) of Article 16, which is not in line with the relevant provisions of the company’s foreign investment management system.
Waiver considered at the 7th (Interim) meeting of the 5th board of directors. Reason for abstention: a large part of the company’s profit comes from the rent of Longke building, which is derived from the proposal on the payment of year-end bonus for senior executives in 2020 and bank interest (including financial income), rent income and bank interest for non senior executives. The proposal determines that the basic monthly salary multiple and amount of year-end performance bonus for senior executives are too high. The company’s salary assessment system is not perfect. The company’s product sales revenue growth rate, profit growth rate, inventory turnover rate, inventory growth rate, accounts receivable turnover rate and other indicators should be included in the KPI assessment.
Objections considered at the 9th (regular) meeting of the 5th board of directors. Objection: Article 96 of the current articles of association stipulates that “directors shall be elected or replaced by the shareholders’ meeting in accordance with the proposal on Amending the articles of association, and their term of office shall be three years. Directors may be re elected and re elected upon expiration of their term of office. Before the expiration of their term of office, the shareholders’ meeting shall not remove them without reason”. Paragraph 1 of article 96 of the guidelines for the articles of association of listed companies (revised in 2019) stipulates that “directors shall be elected or replaced by the general meeting of shareholders, and may be removed by the general meeting of shareholders before the expiration of their term of office. The term of office of directors is [years], and they can be re elected after the expiration of their term of office”. The guidelines for the articles of association of listed companies revised in 2019 made it clear that directors “can be dismissed by the general meeting of shareholders before the expiration of their term of office”. The above provisions of the articles of association are inconsistent with the provisions of the guidelines for the articles of association of listed companies, but the above provisions of the articles of association are not amended in this proposal.
Objections considered at the 9th (regular) meeting of the 5th board of directors. Objection: Article 5 of the rules of procedure of the board of directors stipulates that “directors shall be elected or replaced by the shareholders’ proposal on Amending the rules of procedure of the board of directors, and their term of office shall be three years. Directors can be re elected after the expiration of their term of office. Before the expiration of their term of office, the shareholders’ meeting cannot remove them without reason”. Paragraph 1 of article 96 of the guidelines for the articles of association of listed companies (revised in 2019) stipulates that “directors shall be elected or replaced by the general meeting of shareholders, and may be removed by the general meeting of shareholders before the expiration of their term of office. The term of office of directors is [years], and they can be re elected after the expiration of their term of office”.
The guidelines for the articles of association of listed companies revised in 2019 made it clear that directors “can be removed by the general meeting of shareholders before the expiration of their term of office”. The above provisions of the rules of procedure of the board of directors are inconsistent with the provisions of the guidelines for the articles of Association of listed companies.
Waiver considered at the 10th (Interim) meeting of the 5th board of directors. Reason for abstention: according to his resume, Mr. Liao Xianfu lacks experience as the person in charge of the financial affairs of the proposal on changing the financial director of the company in high-tech enterprises. Waiver considered at the 10th (Interim) meeting of the 5th board of directors. Reason for abstention: according to his resume, Mr. Liao Xianfu is inexperienced as the person in charge of the basic salary of newly appointed senior managers in a high-tech enterprise. The proposal was considered and opposed at the 13th (Interim) meeting of the Fifth Board of directors. Objection: the information provided by Zhou Fuchi is inconsistent with the content of the recommendation form, and the proposal on adding non independent directors violates the principle of truthfulness, accuracy and integrity.
The 13th (Interim) meeting of the 5th board of directors considered objections. Objection reason: the same reason as the objection of the first proposal, the proposal on convening the second extraordinary general meeting of major shareholders in 2021 was not held, and the 14th (Interim) meeting of the Fifth Board of directors abstained from deliberation. The main reason for Mr. Zhou Fuchi’s disqualification is that he is not qualified for the post of chairman of the company.
The 16th (Interim) meeting of the 5th board of directors considered objections. Objection: 1. The report on the feasibility of investing in the establishment of a wholly-owned subsidiary in Shaoguan is simple, rough and hasty; 2. The necessity and feasibility of investing and establishing a wholly-owned subsidiary in Shaoguan are insufficient; 3. The company invested and established a wholly-owned subsidiary in Beijing on February 25, 2021. By the end of 2021, the wholly-owned subsidiary in Beijing had not created income for the company, but had incurred many costs and expenses. In this case, it is inappropriate to invest and establish a wholly-owned subsidiary in Shaoguan.
2、 Performance of duties in the special committee of the board of directors
The 5th board of directors of the company consists of four special committees: Strategy Committee, audit committee, remuneration and assessment committee and Nomination Committee. I am a member of the remuneration and assessment committee and Nomination Committee of the 5th board of directors.
In 2021, the remuneration and assessment committee of the 5th board of directors held a meeting. As a member of the remuneration and assessment committee of the board of directors, I personally attended the above meeting, carefully considered the proposals submitted to the special committee in accordance with the relevant requirements of the rules of procedure of the special committee, and put forward the opinions of the special committee to the board of directors after reaching the opinions, playing the role of the remuneration and assessment committee. My voting on the proposal submitted to the remuneration and assessment committee of the board of directors is as follows:
No. name of the meeting, time of holding, contents of deliberation, and personal objections
Waiver reason: a large part of the company’s profits come from the rental income of Longke building and bank interest (including wealth management income), Rental income and bank interest are not the remuneration of the 5th board of directors and the operating income of senior executives. The proposal decides to give 1 the appraisal committee on February 5, 2021. 1. Review the proposal on the basic monthly meeting on the payment of year-end Performance Award for senior executives in 2020. The salary multiple and amount are too high. If the company’s salary assessment system is not perfect, the company’s product sales revenue growth rate, profit growth rate, inventory turnover rate, inventory growth rate Accounts receivable turnover rate and other indicators shall be included in KPI assessment.
Remuneration of the 5th board of directors and April 21, 2021
2. Discussion on the basic salary scheme of managers by the assessment committee on the day of 2021
Second meeting proposal
In 2021, the company completed the appointment of executive directors and supervisors, the appointment of senior executives and the addition of non independent directors to its subsidiaries. The nomination committee meeting deliberated and nominated candidates. As the convener of the nomination committee, I organized and held relevant meetings, carefully considered the proposals submitted to the nomination committee of the board of directors, and put forward the opinions of the special committee to the board of directors after reaching opinions, Played the role of the nomination committee. The details are as follows:
No. name of the meeting, time of holding, contents of deliberation, and personal objections
Objection to the regulations on appointment to Beijing subsidiary
