Suzhou Veichi Electric Co.Ltd(688698) : Guotai Junan Securities Co.Ltd(601211) about Suzhou Veichi Electric Co.Ltd(688698) 2021 annual continuous supervision and tracking report

Guotai Junan Securities Co.Ltd(601211)

About Suzhou Veichi Electric Co.Ltd(688698)

2021 continuous supervision and tracking report

In accordance with the provisions of relevant laws and regulations such as the measures for the administration of securities issuance and listing recommendation business, the Listing Rules of science and Innovation Board of Shanghai Stock Exchange, the guidelines for self discipline supervision of listed companies of Shanghai Stock Exchange No. 11 – continuous supervision, Guotai Junan Securities Co.Ltd(601211) (hereinafter referred to as the “recommendation institution”) acts as the recommendation institution for the continuous supervision of Suzhou Veichi Electric Co.Ltd(688698) (hereinafter referred to as ” Suzhou Veichi Electric Co.Ltd(688698) ” and “the company”), Be responsible for the continuous supervision after Suzhou Veichi Electric Co.Ltd(688698) listing, and issue this annual report on continuous supervision.

1、 Continuous supervision

No. work content and continuous supervision

Establish, improve and effectively implement the continuous supervision system, and formulate corresponding work plans for the specific holding recommendation institutions that have established, improved and continued supervision, effectively implement the continuous supervision system and formulate corresponding work plans

According to the relevant provisions of the CSRC, prior to the commencement of the continuous supervision work, the company in two cities or relevant parties have signed the continuous supervision agreement with the recommendation institution of Shanghai and Suzhou Veichi Electric Co.Ltd(688698) to clarify the continuous signing agreement of both parties, clarify the rights and obligations of both parties during the period of continuous supervision, and report to Shanghai stock exchange for filing the rights and obligations during the period of continuous supervision

The sponsor can understand the business situation of Weichuang electric through daily communication, regular return visit, on-site inspection, due diligence and other means, such as regular or irregular return visit, on-site 3 exhibition continuous supervision and inspection, Continuously supervised Suzhou Veichi Electric Co.Ltd(688698)

During the period of continuous supervision, in accordance with relevant regulations, for the violations of laws and regulations of listed companies, during the period of continuous supervision in 2021, 4 development form statements, It shall be reported to the Shanghai Stock Exchange and disclosed after the examination and verification of Shanghai Securities Suzhou Veichi Electric Co.Ltd(688698) in the continuous supervision period by the exchange. There is no violation of laws and regulations requiring the recommendation institution to make a public statement according to relevant regulations

During the period of continuous supervision, if the listed company or relevant parties violate laws and regulations, violate the commitments during the period of continuous supervision in 2021, they shall report to the Shanghai Stock Exchange within 5 trading days Suzhou Veichi Electric Co.Ltd(688698) and relevant parties within 5 days from the date of discovery or should be found. The contents of the report include the violation of laws and regulations by the listed company or relevant parties who violate the commitments The specific situation of breach of commitment and other matters, and the situation of insurance

Supervision measures taken by the recommender, etc

6. Supervise listed companies and their directors, supervisors and senior managers to abide by laws

Regulations, departmental rules, business rules issued by Shanghai Stock Exchange and other continuous supervision periods in 2021,

No. work content and continuous supervision

Normative documents and earnestly fulfill its commitments Suzhou Veichi Electric Co.Ltd(688698) directors, supervisors and senior managers have no violations of laws, regulations and commitments

Supervise listed companies to establish, improve and effectively implement corporate governance systems, including but not limited to the rules of procedure of the general meeting of shareholders, the board of directors and the board of supervisors and relevant regulations of directors and supervisors, and strictly implement the corporate governance system

The sponsor checked Suzhou Veichi Electric Co.Ltd(688698) the internal supervision of listed companies to establish, improve and effectively implement the internal control system, including but not limited to the design and implementation of the control system, financial management system, accounting system and internal audit system, as well as the effectiveness of raising funds. Weichuang power 8’s internal control system of fund use, related party transactions, external guarantee, external investment and derivative trading complies with relevant laws and regulations The procedures and rules of major business decisions such as the control of subsidiaries have been effectively implemented, which can ensure the standardized operation of the company

Suzhou Veichi Electric Co.Ltd(688698) has established and effectively implemented the information disclosure system in accordance with the securities regulatory supervision of listed companies, reviewed the relevant requirements of the information department, established information disclosure documents and other relevant documents, and has sufficient reasons to believe that the information disclosure system of listed companies.

After verification, the documents submitted by Weichuang 9 to Shanghai Stock Exchange are free from false records, misleading statements or major omissions. The documents submitted by Chen electric to Shanghai Stock Exchange are free from false records, misleading statements or major omissions

During the period of continuous supervision in 2021, the information disclosure documents of listed companies and other documents submitted by Suzhou Veichi Electric Co.Ltd(688698) ‘s Xinyi to the CSRC and the recommendation institution of Shanghai Stock Exchange shall be reviewed in advance, and the information disclosure documents with problems and documents disclosed to Shanghai Stock Exchange shall be timely urged to correct or supplement the listed companies. If the listed companies do not correct or supplement other documents submitted by the exchange, It shall report to Shanghai Stock Exchange in time. If the listed bank has reviewed the information disclosure documents of the listed company in advance or has not reviewed the information disclosure documents of the listed company in accordance with the provisions, it shall conduct post review within the time limit for the listed company to perform its obligations. The company has completed the review of relevant documents within 5 trading days after the corporate bank’s information disclosure obligations, and the company has given active cooperation. If the listed company does not need to make corrections in time due to major problems in the disclosure of the listed company or the fact that the listed company does not need to make corrections in time due to the signing of the report by the Shanghai Stock Exchange, the listed company shall make corrections in time

Pay attention to the administrative punishment imposed by the CSRC, the measures or disciplinary actions taken by the supervisor Suzhou Veichi Electric Co.Ltd(688698) of Shanghai Stock Exchange and its controlling shareholders, the directors, supervisors and senior executives of 11 actual controllers during the continuous supervision of the listed company or its controlling shareholders and its actual controllers in 2021, and urge them to improve their internal control system,

The first level management personnel did not take measures to correct such incidents

term

During the continuous supervision period of 2021 in which the listed company, the controlling shareholder and the actual controller continue to pay attention to the fulfillment of their commitments, if the listed company, the controlling shareholder and the actual controller fail to fulfill their commitments Suzhou Veichi Electric Co.Ltd(688698) current controlling shareholders and items, they shall timely report to Shanghai stock exchange that the actual controller has no outstanding commitments

13 pay attention to social media reports and rumors about listed companies, and timely target the market during the continuous supervision period in 2021,

No. work content and continuous supervision

Rumor check. After verification, if it is found that the listed company has major matters that should be disclosed but have not been disclosed Suzhou Veichi Electric Co.Ltd(688698) not occurred, or the information disclosed is inconsistent with the facts, it shall be urged in time

The listed company truthfully discloses or clarifies; The listed company will not disclose or clarify

And shall report to the Shanghai Stock Exchange in a timely manner

If any of the following circumstances is found, the listed company shall be urged to make an explanation within a time limit

Correct and report to Shanghai Stock Exchange at the same time: (I) the listed company is suspected of violating

Against the Listing Rules of Shanghai Stock Exchange and other industries of Shanghai Stock Exchange

Business rules; (II) the professional opinions issued by the intermediary and its signers may be illegal and illegal, such as false records, misleading statements or major omissions, or there are no other improper situations in Suzhou Veichi Electric Co.Ltd(688698) and relevant subjects during the continuous supervision in 2021; (III) the listed company has such matters in the securities issuance and listing recommendation industry

Circumstances specified in articles 71 and 72 of the measures for the administration of administrative affairs; (Ⅳ)

The listed company does not cooperate with the sponsor’s continuous supervision; (V) Shanghai Securities Exchange

Other circumstances that the company or the sponsor deems necessary to report

Formulate the on-site inspection work plan for listed companies, clarify the on-site inspection work, the sponsor has formulated the on-site inspection 15 requirements, ensure the relevant work plan of on-site inspection work quality inspection, and clarify the on-site inspection work requirements

Where a listed company is under any of the following circumstances, the recommendation institution and the recommendation representative shall

Special on-site verification shall be conducted within 15 days from the date of knowing or should know:

(I) suspected of major financial fraud; (II) during the continuous supervision of the controlling shareholder and actual controller in 2021, 16 persons, directors, supervisors or senior managers are suspected of embezzling the interests of the listed company Suzhou Veichi Electric Co.Ltd(688698) related entities fail to provide (III) there may be major breach of regulations; (IV) cash flow or capital flow

There are major anomalies; (V) the bourse or the recommendation institution deems it necessary to conduct on-site investigation

Other matters to be verified

2、 Problems found by the recommendation institution and the recommendation representative and their rectification

In 2021, the recommendation institution and the recommendation representative did not find that Suzhou Veichi Electric Co.Ltd(688698) had major problems.

3、 Major risk matters

The major risk factors faced by the company are as follows:

(I) core competitiveness risk

1. New product development risk

From the perspective of new product development technology, with the transformation and upgrading of China’s manufacturing industry and the increasing demand for intelligence, energy conservation and consumption reduction, industrial automation products are developing towards intelligence, miniaturization, networking and integration. The technical iteration cycle of frequency converter has developed from the previous 5-8 years to a shorter time. Industry participants need to carry out continuous R & D activities to improve product performance and maintain competitiveness. The R & D expenses of the company in 2020 and 2021 were 52.723 million yuan and 75.971 million yuan respectively, with a year-on-year increase of 44.09%. The downstream application fields to be invested in the new generation of products will put forward higher requirements for the comprehensive performance, reliability and stability of the products. If the comprehensive performance of the products is lower than expected, the company’s R & D investment will not be rewarded, which will have a significant adverse impact on the company’s performance.

From the perspective of new product development market, the company develops all kinds of industrial control products

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