Haining China Leather Market Co.Ltd(002344)
Report on the work of independent directors in 2021
In 2021, as an independent director of the 5th board of directors of Haining China Leather Market Co.Ltd(002344) (hereinafter referred to as “the company”), I was able to comply with the company law, the rules for independent directors of listed companies, the guidelines for standardized operation of listed companies of Shenzhen Stock Exchange, the administrative measures for equity incentive of listed companies (for Trial Implementation) (hereinafter referred to as “the administrative measures”) and the articles of association and other laws and regulations In accordance with the requirements of the regulations and the company’s system, he performed the duties of independent directors in good faith, diligently and faithfully, actively attended relevant meetings, carefully considered various proposals of the board of directors, expressed independent opinions on relevant matters of the company, effectively safeguarded the interests of the company and the legitimate rights and interests of shareholders, and gave better play to the role of independent directors. I hereby report my performance of duties in 2021 as follows:
1、 Attendance at meetings
1. In 2021, the company held four Board meetings, including one on-site meeting and three communication voting meetings. I carefully considered all proposals. Voted in favor of all proposals of the board of directors in 2021.
2. In 2021, the company convened an audit committee of the board of directors to carefully consider the proposals discussed. 2、 Independent opinions
In accordance with the rules for independent directors of listed companies, the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange and other relevant provisions, as an independent director of the company, I have expressed independent opinions on the company’s major events in 2021, related party transactions, use of raised funds, internal control, external guarantee and other matters. The details are as follows: (I) at the sixth meeting of the Fifth Board of directors held by the company on April 15, 2021, Through careful understanding and verification, and based on independent and objective judgment, I express the following independent opinions:
1、 Independent opinions on the occupation of funds and external guarantees by controlling shareholders and other related parties
In accordance with the requirements of the company law, the securities law, the notice on regulating the capital exchanges between listed companies and related parties and the external guarantee of listed companies (zjf [2003] No. 56) and the notice on regulating the external guarantee behavior of listed companies (zjf [2005] No. 20), as an independent director of the company, we are in a serious, responsible and realistic attitude, based on the principles of objectivity, fairness and impartiality, Carefully checked and supervised the occupation of funds and external guarantees by the company’s controlling shareholders and other related parties in 2020, and held that:
1. During the reporting period, the company did not occupy the company’s funds by controlling shareholders and other related parties, nor did it occupy the company’s funds by controlling shareholders and other related parties that occurred in the previous period and continued to the reporting period.
2. As of December 31, 2020, the company has provided guarantee for Haining China Leather City import and Export Co., Ltd. with the actual amount of RMB million and the guarantee balance of RMB million, accounting for 0.00% of the company’s latest audited net assets; The company provided guarantee for Xinxiang Haining Leather Development Co., Ltd. with the actual amount of 0 million yuan and the guarantee balance of 0 million yuan, accounting for 0.00% of the company’s latest audited net assets; Haining China Leather City Investment Co., Ltd., a wholly-owned subsidiary of the company, provided guarantee for Chengdu Hongxiang Laiyun Sports Industry Co., Ltd. the actual amount incurred was RMB, and the guarantee balance was RMB, accounting for 0.00% of the company’s latest audited net assets. Among the external guarantees provided by the company, Haining China Leather City import and Export Co., Ltd. is the holding subsidiary within the scope of the consolidated statements, and Chengdu Hongxiang Laiyun Sports Industry Co., Ltd. is a joint-stock company subordinate to Haining China Leather City Investment Co., Ltd., a wholly-owned subsidiary of the company, which meets the needs of the company’s normal production and operation, and performs the review procedures in strict accordance with relevant laws, regulations, articles of association and other provisions, At present, the above-mentioned companies are in good production, operation and financial condition, and the possibility of undertaking guarantee responsibility is very small. The joint and several guarantee liability provided by the company for Xinxiang Haining Leather Development Co., Ltd. has ended on February 28, 2020, and the guarantee provided by the company for Haining China Leather City import and Export Co., Ltd. has expired on March 10, 2020.
In addition, during the reporting period, there was no guarantee provided for the company’s shareholders, shareholders’ holding subsidiaries, shareholders’ subsidiaries, other related parties of the company, any unincorporated units or individuals.
2、 Independent opinions on the deposit and use of the company’s raised funds in 2020
After verification, the preparation of the special report on the annual storage and use of raised funds of the company complies with the provisions of relevant laws and regulations, truly and objectively reflects the storage and use of raised funds of the company in 2020, and the storage and use of raised funds of the company in 2020 comply with the relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange on the storage and use of raised funds of listed companies, There are no irregularities in the deposit and use of raised funds. 3、 Independent opinions on the self-evaluation report of internal control in 2020
As an independent director of the company, I express the following independent opinions on the self-evaluation report of the company’s internal control in 2020 in accordance with the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 21 – General Provisions on the annual internal control evaluation report (formulated in 2014) and other relevant rules and regulations:
After verification, the company has established a relatively perfect internal control system, which meets the requirements of relevant national laws, administrative regulations and departmental rules. The internal control has legitimacy, rationality and effectiveness, and has established a relatively complete risk assessment system. The company’s corporate governance, production and operation, information disclosure and major events are carried out in strict accordance with the provisions of the company’s internal control systems, and the possible internal and external risks in each link are reasonably controlled, and the predetermined objectives of the company’s activities are basically achieved. Therefore, the company’s internal control is effective. We believe that the self-evaluation report on internal control in 2020 prepared by the company truly and objectively reflects the construction and operation of the company’s internal control system.
4、 Independent opinions on the company’s 2020 profit distribution plan
According to the guidance on the establishment of independent director system in listed companies, the guidelines on internal audit of companies listed on the SME board, the working system of independent directors and other relevant rules and regulations, as an independent director of the company, after carefully reviewing the company’s profit distribution plan for 2020, we believe that:
The profit distribution plan follows the profit distribution policy stipulated in the articles of association, complies with the provisions and requirements of the guidelines for the supervision of listed companies No. 3 – cash dividends of listed companies, takes full account of the return to investors, conforms to the actual situation of the company, does not damage the interests of shareholders, especially small and medium-sized shareholders, and is conducive to the sustainable, stable and healthy development of the company. Agree to the company’s plan on profit distribution in 2020.
5、 Independent opinions on the renewal of Tianjian certified public accountants as the audit institution of the company
After examination, Tianjian certified public accountants has the qualification of securities industry and has the experience and ability to provide audit services for listed companies for many years. In the process of cooperation with the company in the past, it has provided high-quality audit services for the company, which has played a positive and constructive role in standardizing the company’s financial operation. The company’s employment of Tianjian certified public accountants is conducive to ensuring the continuity of the company’s audit business.
All independent directors approved in advance and agreed that Tianjian certified public accountants will be reappointed as the company’s audit institution in 2021.
6、 Independent opinions on using the surplus raised funds from non-public offering to permanently supplement the working capital
The investment projects raised by the company’s non-public offering of shares in 2015 include the acquisition of the main assets of Wuhan Haining Leather City, the acquisition of 16.27% equity of Lighthouse tongerbao Haining Leather City Co., Ltd., Haining China Leather City Phase VI project and smart market project. Among them, “the acquisition of major assets of Wuhan Haining Leather City, the acquisition of 16.27% equity of Lighthouse tongerbao Haining Leather City Co., Ltd. and Haining China Leather City Phase VI project” have been considered and approved at the 19th meeting of the Fourth Board of directors and the first extraordinary general meeting of shareholders in 2019, and their surplus funds have been permanently supplemented to the company’s working capital, and the special accounts related to the raised funds have been cancelled.
The investment project of the raised funds to be settled by the company this time is: smart market project, which has been constructed and implemented. The surplus raised funds (including interest income) after the settlement of the raised investment project is 191984 million yuan (the actual amount shall be subject to the balance of the special account on the day when the funds are transferred out).
After verification, the company has fulfilled the necessary deliberation procedures for the settlement of the above-mentioned raised investment projects and the permanent supplement of the surplus raised funds to the working capital, which is in line with the provisions of relevant laws, regulations and normative documents such as the stock listing rules of Shenzhen Stock Exchange, the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange, the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies. This matter is a prudent decision made according to the actual situation of the company, which is conducive to improving the use efficiency of the company’s raised funds, enhancing the company’s operating capacity, reducing financial expenses and meeting the demand for working capital for the company’s business growth; It is conducive to continue to give full play to the advantages of the company in the main business field, which is in line with the interests of all shareholders. There is no situation of changing the investment direction of raised funds in a disguised manner and damaging the interests of the company and all its shareholders, especially small and medium-sized shareholders.
Therefore, we agree that the company will close the investment project with the raised funds, and permanently supplement the working capital with the surplus raised funds, and submit it to the general meeting of shareholders for deliberation.
(II) on August 19, 2021, at the 8th meeting of the 5th board of directors held by the company, through careful understanding and verification, and based on independent and objective judgment, I made the following independent opinions:
1、 In the first half of 2021, the company’s controlling shareholders and other related parties carefully checked and implemented the occupation of the company’s funds, the company’s external guarantees and the storage and use of raised funds, and issued independent opinions as follows:
1. During the reporting period, there was no illegal occupation of the company’s funds by controlling shareholders and other related parties, and there was no illegal occupation of funds by related parties in previous years and accumulated to June 30, 2021. The company has established a relatively perfect and standardized internal control system and operation process, which have been well implemented, and effectively prevented the controlling shareholders and other related parties from illegally occupying the company’s funds or damaging the rights and interests of the company and public shareholders through related party transactions, external guarantees and other means.
2. As of June 30, 2021, Haining China Leather City Investment Co., Ltd., a wholly-owned subsidiary of the company, provided guarantee for Chengdu Hongxiang Laiyun Sports Industry Co., Ltd. the actual amount was RMB, and the guarantee balance was RMB, accounting for 0.00% of the company’s latest audited net assets. Chengdu Hongxiang leyun culture and Sports Industry Co., Ltd., the object of external guarantee provided by the company, is a joint-stock company subordinate to Haining China Leather City Investment Co., Ltd., a wholly-owned subsidiary of the company, which meets the needs of its normal production and operation, and performs the review procedures in strict accordance with relevant laws and regulations and the articles of association.
In addition, during the reporting period, there was no guarantee provided for the company’s shareholders, shareholders’ holding subsidiaries, shareholders’ subsidiaries, other related parties of the company, any unincorporated units or individuals.
3. During the reporting period, the deposit and use of the company’s raised funds comply with the relevant provisions of the CSRC and Shenzhen Stock Exchange on the deposit and use of raised funds of listed companies, comply with the provisions of the company’s raised funds management system, and there is no violation of the deposit and use of raised funds.
2、 Independent opinions on the continued financial support of wholly-owned subsidiaries to their joint-stock companies
Chengdu Haining Leather City Phase II wanduocheng culture, commerce, sports and tourism complex project is jointly developed and constructed by Chengdu Haining Leather City Co., Ltd. and Chengdu Hongxiang leyun Sports Industry Co., Ltd. (hereinafter referred to as “Hongxiang leyun”), which is a joint-stock company of Haining China Leather City Investment Co., Ltd. (hereinafter referred to as “investment company”), a wholly-owned subsidiary of the company. The investment company continues to provide financial assistance to Hongxiang Laiyun, mainly to meet the needs of working capital for the development of Hongxiang Laiyun project, promote the smooth development of follow-up projects and improve its own business ability, which is the need of the company’s business development and in line with the company law, the articles of Association and other relevant provisions. In addition, other shareholders of Hongxiang leyun provide financial assistance to it in the same proportion of their shares.
The financial assistance has fulfilled the corresponding procedures, the risk is within the controllable range, and there is no behavior damaging the interests of the company and shareholders, especially small and medium-sized shareholders. Therefore, we unanimously agree to the financial assistance.
3、 Independent opinions on the acquisition of part of the equity of Haining private financing service center and related party transactions. The investment company, a wholly-owned subsidiary of the company, plans to acquire 1% equity of Haining Private Financing Service Center Co., Ltd. (hereinafter referred to as “private financing center”) from Haining Financial Investment Co., Ltd. (hereinafter referred to as “financial investment”), and sign equity transfer agreement and concerted action agreement. As the financial investment is a wholly-owned subsidiary of Haining asset management company, the controlling shareholder of the company, the financial investment has a related relationship with the company, and this event constitutes a related party transaction. The proposal on the acquisition of part of the equity of Haining private financing service center and related party transactions submitted to the eighth meeting of the Fifth Board of directors for deliberation has been approved by us in advance before being submitted to the board of directors for deliberation. When the board of directors considered the proposals related to this transaction, the related directors have avoided voting according to law. This transaction does not constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies. The purpose of the company’s acquisition of part of the equity of Minrong center and signing the agreement of persons acting in concert is to make the company in a controlling position in Minrong center, improve the efficiency of operation and decision-making of Minrong center, and meet the overall and long-term interests of the company. The decision-making procedures for related party transactions were performed in accordance with the provisions of the company law, the stock listing rules of Shenzhen Stock Exchange and the articles of association. The company acquired part of the equity of Minrong center and signed the agreement of persons acting in concert, performed the related decision-making procedures, did not damage the interests of non related shareholders, was in line with the interests of the company and all shareholders, and did not damage the interests of the company and its shareholders, especially small and medium-sized shareholders. As an independent director of the company, we recognize and agree to this connected transaction.
(III) on October 25, 2021, at the 9th meeting of the 5th board of directors held by the company, through careful understanding and verification, and based on independent and objective judgment, I made the following independent opinions:
1、 Independent opinions on the participation of wholly-owned subsidiaries in the establishment of Haining Xinchao equity investment partnership (limited partnership) and related party transactions
Haining China Leather City Investment Co., Ltd. (hereinafter referred to as “investment company”), a wholly-owned subsidiary of the company, plans to cooperate with Zhejiang Kunxin Investment Management Co., Ltd., Haining Urban Investment Finance Investment Co., Ltd. (hereinafter referred to as “urban investment finance”), Haining Industrial Assets Management Co., Ltd. (hereinafter referred to as “industrial assets”) and Haining Economic Development Industrial Park
