Work report of the board of directors in 2021
In 2021, in strict accordance with the company law, the securities law, the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange and other laws and regulations, as well as the articles of association, rules of procedure of the board of directors and other rules and regulations, the board of directors of the company earnestly performed various responsibilities entrusted to the board of directors by the company and shareholders, earnestly implemented various resolutions adopted by the general meeting of shareholders, and carried out various work diligently and responsibly, It ensures the sustainable, healthy and stable development of the company. The main work of the board of directors in 2021 is reported as follows:
1、 Review of the company’s overall work in 2021
In 2021, the company has always focused on linear driven healthy office and rooted in customer needs. The management of the company led all employees to closely focus on the development objectives set at the beginning of the year, implement the strategic deployment of the board of directors, actively adjust and optimize the product structure, sales channels and supply chain, give full play to the advantages of the company’s technology and management, constantly improve the endogenous power and maintain the core competitiveness of the company.
In 2021, under the adverse effects of epidemic fluctuations, limited maritime exports and sluggish domestic consumption, the company achieved a revenue of 2.871 billion, with a year-on-year increase of 47.95%, indicating that the company’s main business capacity was further steadily improved and the operation scale and quality were further consolidated. In exploring the path of high-quality development, Yuege adheres to the innovation drive, established the smart great health research institute, pays equal attention to applied research and basic research, continuously increases R & D investment, and has achieved a number of research results of linear drive technology. During the reporting period, the sales of overseas online independent brand products increased significantly, and the transformation of ergonomic workstation products achieved remarkable results. Among them, the products of linear driven intelligent office lifting system increased rapidly. In the face of external cyclical adverse factors, in order to seize the development opportunity of the rapid growth of market demand for ergonomic products, the company continued to increase marketing and R & D investment in 2021. Although the increase of expenses affected the company’s short-term profits, it laid a solid foundation for further consolidating the industry position and the sustainable development of business.
During the reporting period, the company carried out the following key work according to the business plan formulated at the beginning of the year:
(I) consolidate R & D foundation and promote development through innovation
As of December 31, 2021, the company has more than 700 professional R & D and technical personnel, and the R & D expenses have increased by 53.40% year-on-year. In order to strengthen the continuous innovation and market competitiveness of healthy office products, the company has maintained greater R & D efforts in the further upgrading and optimization of product machinery, electricity and software, intelligent technology development and other aspects, and strive to keep the company’s innovation ability, R & D level and patent reserve at the leading level in the industry. By the end of the reporting period, the company had 1129 valid patented technologies, including 79 authorized invention patents, including 52 Chinese invention patents, 17 American invention patents, 3 Japanese invention patents, 1 Australian invention patent, 2 German invention patents, 2 British invention patents, 1 French invention patent and 1 Irish invention patent. It is the unswerving direction of the company to promote development through innovation and continuously improve the technical level and product competitiveness of the company.
(II) adjusting structure to promote growth, shaping brands and promoting high-quality products
During the reporting period, the company achieved remarkable results in the transformation of ergonomic workstation products, among which the linear driven intelligent office lifting table products grew rapidly. The company concentrates and mobilizes market advantageous resources, continuously strengthens the promotion and marketing of the large single product of linear driven smart office lifting table, and strives to expand the market scale and improve the value ecological chain. During the reporting period, the revenue of ergonomic health office workstation series products increased by 51.52% year-on-year, of which the linear drive lifting system increased by 72.58% year-on-year. Through the M2C direct marketing mode, that is, as a manufacturer, the company directly faces consumers, reduces sales costs by reducing circulation links, improves consumers’ purchase and after-sales service experience, concentrates resources, forms a joint force and improves business quality. During the reporting period, the company invested a lot of marketing expenses in market category education and brand promotion. By the end of the reporting period, the sales revenue of the company’s own brand products accounted for 64.66% of the main business revenue (excluding overseas warehouse revenue). Relying on its strong product demand mining and development ability, the company will continue to push through the old and bring forth the new, and empower the brand with better products, so that the company’s product power is always in the forefront of the industry.
(III) fully promote the construction of cross-border e-commerce public overseas warehouses
Lego’s cross-border e-commerce public overseas warehouses began systematic planning in early 2019 and began to be fully promoted in the first half of 2020. By the end of 2021, Lego has also set up overseas warehouses in Germany, Japan and other places, with a total of 15 warehouses in the world and a delivered area of 260000 square meters, in addition to the overseas warehouses and rental warehouses purchased by itself in the core hub port area of the United States. In recent years, the cross-border e-commerce business represented by Amazon has developed rapidly. The warehouse resources in the two-hour 100 kilometer transportation economic circle at major ports in Europe and the United States, especially in the United States, have become increasingly scarce, and the purchase price and rent have continued to rise. With the continuous spread of the epidemic, a large number of offline supermarkets have closed down, and the online business continues to rise. As the core infrastructure of cross-border e-commerce, the price of overseas warehouses is expected to rise further. This makes the vast majority of foreign trade enterprises actually unable to purchase overseas warehouses. The company has made a strategic layout in overseas warehouses. Compared with other foreign trade enterprises renting third-party warehouses, the company has effectively avoided the risk of rising rents in the future by gradually purchasing self-contained warehouses. At the same time, lege’s public overseas warehouses have the ability to provide lower cost overseas warehouse services to small and medium-sized foreign trade enterprises. The multi warehouse setting of LEGO in the coastal area of the United States will greatly reduce the distribution cost, greatly improve the distribution timeliness and improve user satisfaction. The competitiveness of small and medium-sized cross-border e-commerce enterprises using Lego’s public overseas warehouse will be further improved. (IV) actively promote refinancing projects to ensure the capital needs of the company’s long-term development
In order to meet the needs of the company’s strategic development, the company successfully completed the refinancing project of issuing shares to specific objects in 2021, raising a net fund of 690 million yuan, which consolidated the company’s business development, enhanced its core competitiveness and contributed to the company’s development
Funds for long-term development need strong support. At the same time, the fixed increase financing form is adopted to meet the needs of business development
At the same time, it effectively reduces the financial cost of the company.
(V) continuously optimize and promote the equity incentive plan and improve the company’s long-term incentive and restraint mechanism
During the reporting period, in order to further establish and improve the company’s long-term incentive mechanism, attract and retain excellent talents and
Mobilize the enthusiasm of the core business and management personnel of the branch, and effectively integrate the interests of shareholders, the interests of the company and the core team
Combined with personal interests, the company launched the restricted stock incentive plan in 2021. Implementation of this equity incentive plan
It is conducive to further enhance the cohesion and creativity of employees, and improve the operation and management level and sustainable competition of the company
Ability.
2、 Corporate governance in 2021
1. Basic information of corporate governance
In 2021, the company strictly followed the company law, the securities law, the guidelines for the governance of listed companies and the Shenzhen Stock Exchange
Shenzhen stock exchange refers to the rules for the operation of companies listed on the Shenzhen Stock Exchange
The general meeting of shareholders, the board of directors and the board of supervisors are determined in accordance with the requirements of laws and regulations such as the “citation” and relevant laws and regulations of the CSRC
The hierarchical governance structure of the board of directors and the management, continuously improve the corporate governance structure, and establish and improve the internal governance structure of the company
Control system, further standardize the company’s operation and improve the level of corporate governance.
All aspects of corporate governance comply with the listing law
The requirements of the corporate governance standards and the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange, the reporting period
In order to further improve the standard operation and scientific decision-making level of the company, the company revised the articles of association and the board of directors
Rules of procedure.
2. Operation of the board of directors
In 2021, the company held a total of 15 meetings of the board of directors, including the convening procedures and attendance at the meetings
The qualification of personnel, voting procedures, voting results and resolutions of the meeting are in accordance with laws and regulations and the articles of association
regulations. The details are as follows:
No. name of the meeting time of the meeting
1. Deliberated and passed the proposal on the company meeting the conditions for issuing shares to specific objects;
2. Deliberated and passed the proposal on the company’s plan to issue shares to specific objects;
3. The proposal on the company’s stock issuance plan to specific objects was deliberated and adopted;
4. Deliberated and passed the proposal on the demonstration and analysis report on the issuance of shares by the company to specific objects;
5. The 4th board of directors deliberated and approved the proposal on related party transactions involved in the issuance of shares to specific objects;
On January 12, 2021, the second board of directors deliberated and adopted the proposal on signing the stock subscription agreement with effective conditions between the company and specific objects
The 12th meeting day;
Discussion 7. The proposal on the feasibility analysis report on the use of funds raised by the company issuing shares to specific objects was deliberated and adopted;
8. Deliberated and passed the proposal on the establishment of a special storage account for funds raised by issuing shares to specific objects;
9. Deliberated and passed the proposal on the special report on the use of the company’s previously raised funds;
10. The proposal on diluting the immediate return and filling measures for the issuance of shares to specific objects and the commitments of relevant subjects were deliberated and adopted;
11. The proposal on formulating the plan for shareholders’ dividend return in the next three years (20212023) was reviewed and approved;
12. The proposal on the weighted average return on net assets and non recurring income statement of the company in recent three years was deliberated and passed;
13. The proposal on requesting the general meeting of shareholders to authorize the board of directors to fully handle matters related to the issuance of shares to specific objects was deliberated and adopted;
14. Deliberated and passed the proposal on cancellation of holding subsidiaries;
15. The proposal on changing the registered capital, amending the articles of association and handling the change of industrial and commercial registration was deliberated and adopted;
16. The proposal on providing loans to associated enterprises and related party transactions was deliberated and adopted;
17. The proposal on Loctek Ergonomic Technology Corp(300729) phase I employee stock ownership plan (Draft) and its summary was deliberated and adopted;
18. The proposal on management measures for Loctek Ergonomic Technology Corp(300729) phase I employee stock ownership plan was reviewed and approved;
19. The proposal on requesting the general meeting of shareholders to authorize the board of directors to handle matters related to the company’s phase I employee stock ownership plan was deliberated and adopted;
20. The proposal on establishing a wholly-owned subsidiary was deliberated and adopted;
21. The proposal on signing project investment contract with the people’s Government of Hepu County, Guangxi Province was deliberated and adopted
Case;
22. The proposal on convening the first extraordinary general meeting of shareholders in 2021 was considered and adopted.
1. The proposal on the revised draft of the Fourth Board of directors (Draft) of Loctek Ergonomic Technology Corp(300729) phase I employee stock ownership plan and its summary was deliberated and adopted;
2. On February 5, 2021, the second board of directors deliberated and adopted the customs declaration
