Work report of the board of directors in 2021
In 2021, the board of directors of the company conscientiously performed the responsibilities entrusted by the company law and other laws and regulations and the articles of association, strictly implemented the resolutions of the general meeting of shareholders, promoted the improvement of corporate governance and the development of various businesses of the company, and actively and effectively played the role of the board of directors. The work of the board of directors in 2021 (the “reporting period”) is reported as follows:
1、 Overall operation during the reporting period
In 2021, facing the uncertainty of the economic environment outside China and the repeated epidemic in the fourth quarter, the company strategically focused on resources and stepped on its own strategic rhythm, which not only ensured the large-scale investment in new business and new technology, but also realized stable and healthy income growth and leading profitability under the support of efficient and smooth front and back field management system, and implemented the healthy development that the company has always adhered to, Sound and innovative business philosophy.
(I) revenue maintained stable and healthy growth, and new businesses played a driving role
During the reporting period, the company achieved an annual operating revenue of 4.386 billion yuan, an increase of 20.27% over the same period last year, an increase of 2.23 percentage points year-on-year, and the growth of revenue accelerated.
The company actively laid out strategic emerging businesses, established a data security headquarters in Hangzhou, released the data oasis technical framework, and proposed the evolution path of data security from 1.0 data object security to 2.0 data aggregation security, and then to 3.0 data circulation security. Data security business achieved an operating revenue of 912 million yuan, an increase of 52% over the same period last year, of which data security 2.0 and 3.0 achieved an operating revenue of 312 million yuan. The company achieved an operating revenue of 1.554 billion yuan in data security 2.0 and 3.0, security operation center, industrial Internet Security and yun’an new business segments, an increase of 48% over the same period last year. The company continues to innovate, and the operating revenue of new track products such as EDR (terminal detection and response), full flow detection, deception defense, Xinchuang products and attack surface management has increased by more than 300%. Cloud resource pool, situation awareness, threat analysis all-in-one machine, network security shooting range and other products also achieved high growth.
(II) strong strategic investment year to maintain leading profitability
During the reporting period, the net profit attributable to the shareholders of the listed company was 862 million yuan, an increase of 7.15% over the same period of the previous year, and the net profit excluding non recurring profits and losses attributable to the shareholders of the listed company was 764 million yuan, an increase of 8.74% over the same period of the previous year.
In 2021, the company is in the stage of new business layout, with personnel growth increasing by 22.41% compared with the same period of last year, and R & D and marketing expenses increasing by 35.38% compared with the same period of last year. Meanwhile, during the reporting period, the share payment generated by the company’s employee stock ownership plan was about 76.8 million yuan. While the company is under great pressure on the profit side, its profit level remains ahead of the industry.
R & D focuses on new track products in high growth business, innovative business and mature business. Marketing investment focuses on the strategy of safety operation center.
(III) strengthen payment collection to ensure healthy cash flow
During the reporting period, the company strengthened the management of accounts receivable, the growth rate of accounts receivable decreased by 21.39 percentage points year-on-year, and the growth rate slowed down. Sales receipts reached 4.469 billion yuan, an increase of 33.09% over the same period last year.
(IV) strengthen sales management and promote cooperation between industries and channels
During the reporting period, the company strengthened the sales management of the industry and regions, and has deployed the “mayor’s plan” in more than 60 prefectures and cities. At the same time, it has actively developed the sinking channel system, and distribution has become an effective supplement to the direct selling model.
During the reporting period, the company further strengthened R & D management, innovation and strategic management and supply chain management, orderly promoted innovation investment from the perspective of the overall pattern strategy, repaid the majority of investors with the healthy growth of financial indicators such as operating revenue, profit and gross profit margin, shaped a healthy and dynamic enterprise and formed a long-term community of destiny with customers.
2、 Main work of the board of directors during the reporting period
In 2021, the board of directors of the company strictly implemented the resolutions of the general meeting of shareholders, actively promoted the implementation of the resolutions of the board of directors, timely studied and made decisions on major matters of the company, and ensured the standardized operation, pragmatism and efficiency of the board of directors.
(I) convening of the board meeting
During the reporting period, the board of directors of the company held 8 meetings, specifically:
No. meeting time of the board of directors to review the proposal
The 10th Session of the 4th board of directors: proposal on the company’s external transfer of the assets of the terminated raised investment project and the recovery of the funds at the 19th Meeting on February 22, 2021 to permanently supplement the working capital
Proposal on convening the second extraordinary general meeting of shareholders in 2021
Proposal on the company’s 2020 work report of the general manager, proposal on the company’s 2020 work report of the board of directors, proposal on the company’s 2020 financial final account report and proposal on write off of bad debts
Proposal on the company’s 2020 annual report and its summary proposal on the company’s 2020 profit distribution of the second session of the Fourth Board of directors
2. Proposal on the company’s special report on the deposit and actual use of raised funds in 2020 on April 15, 2021
Proposal on reappointment of the company’s audit institution in 2021
Proposal on the company’s internal control evaluation report in 2020 and proposal on the remuneration distribution plan of directors
Proposal on salary distribution scheme for senior managers
Proposal on using self owned idle funds for investment and financial management
Proposal on appointing the person in charge of internal audit of the company
Proposal on convening the 2020 annual general meeting of shareholders
Proposal on accounting policy change in the second session of the Fourth Board of directors
3. Proposal on the company’s report for the first quarter of 2021 on April 28, 2021 at the 11th meeting
Proposal on extending the duration of the second phase of employee stock ownership plan of the Fourth Board of directors 4 12th meeting 2021.7.5 proposal on share repurchase scheme of the company
Proposal on the company’s 2021 semi annual report and its summary proposal on the second special report on the company’s 2021 semi annual raised funds deposit and actual use 5 13th meeting on August 11, 2021 of the Fourth Board of directors
Proposal on the company applying for comprehensive credit line from the bank and providing guarantee for the wholly-owned subsidiary to use the credit line
The second proposal of the Fourth Board of directors on the company’s report for the third quarter of 2021
6 14th meeting October 29, 2021
Proposal on postponement of some investment projects with raised funds and capital increase to Hangzhou Hezhong Data Technology Co., Ltd., a wholly-owned subsidiary with raised funds Proposal on the closing and termination of some projects invested by raising funds and the permanent replenishment of working capital with the surplus and remaining funds from the second set of funds of the Fourth Board of directors
7. Proposal on the achievement of unlocking conditions in the first unlocking period of the company’s phase III ESOP on November 5, 2021 at the 15th meeting
Proposal on establishing a wholly-owned subsidiary in Hangzhou
Proposal on convening the third extraordinary general meeting of shareholders in 2021
Proposal on the extension of the duration of phase I ESOP, proposal on the extension of the duration of phase II ESOP of the second session of the Fourth Board of directors, 8 proposal on the appointment of securities affairs representatives of the company on December 22, 2021
Proposal on using some temporarily idle raised funds for investment and financial management
(II) implementation of resolutions of the general meeting of shareholders by the board of directors
In 2021, the company held three general meetings of shareholders. The board of directors of the company earnestly implemented the resolutions adopted by the general meeting of shareholders in strict accordance with the resolutions and authorization of the general meeting of shareholders in accordance with the requirements of the company law, the securities law and other relevant laws and regulations and the articles of association.
(III) performance of each committee under the board of directors
The Fourth Board of directors of the company consists of four special committees: Audit Committee, strategy committee, salary and assessment committee and Nomination Committee. In addition to the strategy committee, independent directors account for two-thirds of the four special committees and serve as the chairman of the three special committees respectively. Each special committee operates in accordance with the terms of reference of the strategy committee, the audit committee, the nomination committee and the remuneration and assessment committee formulated by the board of directors, studies professional matters and puts forward opinions and suggestions for the decision-making of the board of directors.
(IV) performance of independent directors
Company independence
