Zhongyin Babi Food Co.Ltd(605338)
Report on the work of independent directors in 2021
Dear directors
In 2021, as an independent director of Zhongyin Babi Food Co.Ltd(605338) (hereinafter referred to as “the company” or “the company”), we performed our duties diligently and independently in strict accordance with the company law, the securities law, the guidelines for the governance of listed companies and other laws and regulations, as well as the articles of association and the working system of independent directors, based on the principles of objectivity, impartiality and independence, and timely learned about the production, operation and development of the company, Attended all shareholders’ meetings and board meetings on time, actively played the role of independent directors, and effectively safeguarded the overall interests of the company and the legitimate rights and interests of all shareholders, especially small and medium-sized shareholders. The performance of duties of independent directors in this year is reported as follows:
1、 Basic information of independent directors
On December 30, 2019, the company elected the second board of directors at the fifth extraordinary general meeting of shareholders in 2019. The second independent directors are Mr. Chen Xiaoman, Mr. Sun Xiaoxia and Mr. Yao Lushi.
(I) personal work experience, professional background and part-time work
Chen Xiaoman, with a doctor’s degree, has worked in Fudan University since August 1991. He has successively served as vice president and executive vice president of Fudan University and chairman of Shanghai Mathematics Association. At present, he is a professor and Csg Smart Science&Technology Co.Ltd(300222) independent director of the school of mathematics of Fudan University, and once served as Greenland Holdings Corporation Limited(600606) independent director. He is now an independent director of the company.
Sun Xiaoxia, with a doctor’s degree, has successively served as Professor, doctoral advisor and Dean of the Law School of Zhejiang University, and Professor, doctoral advisor and Dean of the Law School of Fudan University. From October 2010 to now, he has worked in Fudan University. At present, he is a professor and doctoral supervisor in the school of law of Fudan University. He is also the vice president of China Jurisprudence Research Association, Zhejiang Weiming Environment Protection Co.Ltd(603568) independent director, Asia Cuanon Technology (Shanghai) Co.Ltd(603378) independent director of science and Technology (Shanghai) Co., Ltd., independent director of Zhejiang Yefeng Pharmaceutical Co., Ltd., Inventronics (Hangzhou) Inc(300582) Electronics (Hangzhou) Co., Ltd. and independent director of the company.
Yao Lushi, with a doctor’s degree, has been working in Hefei University of technology since July 1985. At present, he is a professor in the school of management of Hefei University of technology. He is also the Secretary General of the branch of Higher Engineering Colleges of China Accounting Society, vice president of Anhui Institute of Certified public accountants, independent director of Anhui Xin’an Bank Co., Ltd. Eastroc Beverage (Group) Co.Ltd(605499) (Group) Co., Ltd. and Tongling Nonferrous Metals Group Co.Ltd(000630) independent director. He once served as a director and Anhui Guofeng Plastic Industry Co.Ltd(000859) independent director of Anhui equity Service Group Co., Ltd. He is now an independent director of the company.
(II) description of independence of independent directors
As an independent director of the company, we do not hold other positions in the company except for directors and members of special committees, nor do we hold any positions in the controlling shareholders and their affiliates of the company. We have no relationship with the company and its controlling shareholders and their affiliates that may hinder our independent and objective judgment, nor do we obtain additional and undisclosed interests from the company, its controlling shareholders and their affiliates.
Therefore, there are no circumstances that affect independence.
2、 Annual performance of independent directors
In 2021, in accordance with the requirements of relevant laws and regulations and the articles of association, we will be honest, diligent and responsible, and arrange enough time and energy to earnestly and effectively perform the duties of independent directors. We timely understand the production and operation information of the company, pay full attention to the development of the company, actively participate in the board of directors and shareholders’ meeting held by the company, take the initiative to understand the relevant information of the matters under consideration before the board of directors, review the relevant meeting materials, make full preparations for the deliberation and voting of various proposals, participate in the discussion of various proposals on the basis of full understanding of the matters under consideration, and put forward reasonable suggestions; Make independent, objective and fair judgments based on their own professional knowledge and ability, exercise voting rights and express independent opinions with a cautious attitude, and play a positive role in the correct and scientific decision-making of the board of directors.
(I) attendance at meetings of the board of directors and the general meeting of shareholders
Participation of independent directors in meetings of the board of directors, participation in meetings of the general meeting of shareholders, names of matters, attendance in person, attendance by proxy, absence, attendance, attendance
Chen Xiaoman 6 600 03
Yao Lushi 6 600 03
Sun Xiaoxia 6 600 03
During the reporting period, the convening of the board of directors and the general meeting of shareholders of the company complied with legal procedures, major business decisions and other major matters complied with relevant procedures, and the resolutions and deliberations of the meeting were legal and effective. Therefore, we did not raise any objection to the proposals of the board of directors and major issues of the company, and voted in favour of the relevant proposals considered by the board of directors, without objection or abstention.
(II) participation in the work of various special committees
In accordance with the relevant requirements of the standards for the governance of listed companies, the independent directors of the company serve as members of the audit committee, the nomination committee, the remuneration and assessment committee and the strategy committee respectively according to their professional expertise. The chairman of the audit committee, the nomination committee and the remuneration and assessment committee are all served by independent directors with corresponding expertise. The positions of the special committees of the board of directors are as follows:
Name of board committee chairman (convener) member
Audit Committee of the board of directors Yao Lushi, Chen Xiaoman and Su Shuang
Nomination Committee of the board of directors Chen Xiaoman, sun Aiguo and sun Xiaoxia
Remuneration and assessment committee of the board of directors Chen Xiaoman, sun Aiguo and sun Xiaoxia
Strategy Committee of the board of directors Liu Huiping, Chen Xiaoman and sun Aiguo
(Note: on October 28, 2021, Mr. Su Shuang was elected as a director candidate after being deliberated and approved at the 11th meeting of the second board of directors of the company. After being deliberated and approved by the second extraordinary general meeting of shareholders of 2021 held by the company on November 15, 2021, he was elected as a member of the audit committee.)
In 2021, the audit committee held five meetings, considered the financial report, accounting policy change, internal control evaluation report and other proposals, supervised and evaluated the work of the annual audit accounting firm, and put forward suggestions on the renewal of the accounting firm to the board of directors.
In 2021, the nomination committee held a meeting to review and evaluate the qualifications and work conditions of the proposed non independent directors, chief financial officer and Secretary of the board of directors, and put forward nomination suggestions to the board of directors and Chairman Liu Huiping respectively.
In 2021, the remuneration and assessment committee held a meeting to evaluate the performance ability and effect of directors and senior managers, and reviewed the remuneration scheme of directors and senior managers.
In 2021, the strategy committee held a meeting to review the increase of implementation subjects of some investment projects with raised funds.
In 2021, the independent directors who served as members of various special committees attended relevant meetings in person on time, carried out work in accordance with the articles of association and the authorization of the board of directors, carefully considered various proposals, and played an important role in improving the corporate governance structure, strengthening the scientificity of decision-making, improving the efficiency and quality of major investment decisions, and realizing the effective supervision of the management.
We believe that the convening and holding of each special committee meeting are in line with the relevant provisions of laws and regulations.
(III) cooperation of the company with independent directors
In 2021, the company’s management and relevant departments attached great importance to the communication and exchange with independent directors, timely reported the company’s production and operation, internal control, foreign investment and other major matters through submission of materials, meeting communication, on-site investigation, telephone and other means, actively and effectively cooperated with the work of independent directors, and there was no situation that affected us to play an independent role and express opinions.
3、 Key matters concerned in the annual performance of independent directors
(I) related party transactions
During the reporting period, the company conducted related party transactions, relevant matters were deliberated by the board of directors and the general meeting of shareholders, and related directors and related shareholders avoided voting. We have issued prior approval opinions and independent opinions on related party transactions.
1. Matters concerning the company’s intention to participate in the investment in Teri Jiahua (Tianjin) equity investment fund partnership (limited partnership) and related party transactions
The company informed the independent directors in advance of the proposed investment in equity investment funds and related party transactions and provided relevant materials. The related party transactions were approved by the independent directors in advance before being submitted to the board meeting of the company for deliberation. We believe that the proposed investment in equity investment funds and related party transactions of the company under the above proposal is in line with the development strategy and planning of the company, There is no situation that damages the interests of the company’s shareholders, especially the minority shareholders, and will not affect the independence of the company, nor will it have a significant adverse impact on the company’s financial and operating conditions. This connected transaction meets the long-term development needs of the company, helps the company to find and reserve projects that meet the development direction of the company and have market competitiveness, explore new profit growth points, and further improve the comprehensive strength and competitiveness of the company. We agree to submit the proposal on the company’s proposed participation in equity investment funds and related party transactions to the seventh meeting of the second board of directors of the company for deliberation.
On January 20, 2021, we expressed independent opinions on the proposal on the company’s intention to participate in the investment in Teri Jiahua (Tianjin) equity investment fund partnership (limited partnership) and related party transactions. In our opinion, for the company’s foreign investment, all parties shall equally subscribe the fund shares of the investment fund according to their respective subscribed amounts, and the limited partners shall distribute the income and bear the loss according to the proportion of paid in capital contribution. The transaction terms are fair, reasonable and in line with the market law. The transaction follows the principles of fairness, voluntariness and rationality, conforms to the relevant provisions of laws and regulations and the articles of association, and conforms to the interests of the company and all shareholders, There is no situation that damages the interests of the company and its shareholders, especially the minority shareholders. We unanimously agreed to submit the proposal to the general meeting of shareholders of the company for deliberation.
2. Matters relating to daily connected transactions
The company has notified the independent directors of the expected daily related party transactions in 2021 and provided relevant materials. This matter has been approved by the independent directors in advance before being submitted to the board meeting of the company for deliberation. We believe that the expected daily related party transactions in 2021 are for the needs of the company’s normal business, conducive to the production and operation of the company and belong to normal transactions; The transaction pricing is based on the price of similar transactions between the company and non related parties, fair, fair and reasonable, in line with the market-oriented principle of mutual benefit, and in line with the actual situation and interests of the company; The amount of related party transactions is small, and the company does not rely on related parties due to the above related party transactions. The above transactions did not damage the legitimate rights and interests of all shareholders, especially minority shareholders. The independent directors unanimously agreed to submit the proposal on the expected daily connected transactions in 2021 to the 8th meeting of the second board of directors for deliberation.
On April 27, 2021, we expressed independent opinions on the proposal on the estimated daily connected transactions in 2021. We believe that the company expects that the daily related party transactions in 2021 are normal production and operation needs, the transactions are necessary, continuous and reasonable, the transaction pricing follows the principles of fairness and fairness, the transaction amount is expected to be objective and reasonable, the related Directors voted to withdraw, and the decision-making procedures comply with the relevant provisions of the company law, the articles of association and other laws, regulations and normative documents, There is no situation that damages the interests of the company and the interests of minority shareholders. We unanimously agree to the company’s proposal on the expected daily connected transactions in 2021. (II) external guarantee and fund occupation
During the reporting period, there was no external guarantee and fund occupation.
(III) deposit and actual use of raised funds
During the reporting period, we carefully reviewed the company’s deposit and use of raised funds in strict accordance with the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies and other relevant provisions, and issued agreed independent opinions.
1. On January 20, 2021, the seventh meeting of the second board of directors deliberated and adopted the proposal on changing the investment projects with raised funds and using part of the raised funds to increase the capital of wholly-owned subsidiaries. We believe that the change of the investment project of raised funds and the implementation of the project of raising funds for the capital increase of wholly-owned subsidiaries with part of the raised funds are necessary adjustments made by the company based on the development strategy and actual production and operation conditions, which is conducive to the company’s expansion of market share and consolidation of the company’s industry position; It is conducive to improving the use efficiency of the raised funds, in line with the overall strategic planning of the company, and there is no situation that damages the interests of the company and minority shareholders. In this change, part of the raised funds are used to increase the capital of the wholly-owned subsidiary and implement the raised investment project. It is agreed to submit the proposal to the general meeting of shareholders for deliberation.
2. At the 8th meeting of the second board of directors on April 27, 2021, the proposal on the special report on the deposit and actual use of the company’s raised funds in 2020 and the proposal on continuing to use some temporarily idle raised funds and self owned funds for cash management were deliberated and adopted. We believe that:
(1) The special report on the deposit and actual use of the company’s raised funds in 2020 truly, accurately and completely reflects the deposit, use and management of the company’s raised funds during the reporting period. The actual use of the raised funds is consistent with the company’s information disclosure, and complies with the relevant regulatory requirements of China Securities Regulatory Commission and Shanghai Stock Exchange on the deposit and use of the raised funds of listed companies and the provisions of the articles of association, There is no illegal deposit and use of the raised funds, and there is no change or disguised change in the investment direction of the raised funds and damage to the interests of shareholders. We unanimously agree to the special report on the deposit and actual use of the company’s raised funds in 2020.
(2) The company uses some temporarily idle raised funds for cash management, with high purchase safety, good liquidity and guaranteed principal
