Zhejiang Damon Technology Co.Ltd(688360) Group Co., Ltd
Report on the work of independent directors in 2021
As an independent director of Zhejiang Damon Technology Co.Ltd(688360) Group Co., Ltd. (hereinafter referred to as “the company”), we faithfully and diligently performed our duties and actively attended relevant meetings in strict accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the rules for independent directors of listed companies, the articles of association of the company and the working system of independent directors, Carefully deliberated various proposals of the board of directors, and expressed independent opinions on major matters of the company, so as to effectively safeguard the interests of the company and the legitimate rights and interests of minority shareholders. The performance of duties in 2021 is reported as follows:
1、 Basic information of independent directors
(I) personal work experience, professional background and part-time work
1. Mr. Li Beizhan, born in August 1969, Chinese nationality, without permanent residency abroad, has a master’s degree. From July 1992 to May 1999, he served as a civil servant in the general office of the CPC Changchun Municipal Committee and the political and Legal Committee of the CPC Changchun Municipal Committee; From May 1999 to October 2001, he served as a lawyer and partner of Jilin Xinrui law firm; From October 2001 to April 2020, he served as a lawyer and partner of Shanghai SHANGZHENG Hengtai law firm. From April 2020 to now, he has served as a lawyer and partner of Shanghai SHANGZHENG Hengtai law firm; Since January 2017, he has served as an independent director of the company.
2. Mr. Chen Gang, born in March 1969, Chinese nationality, without permanent residency abroad, with a bachelor’s degree. From September 1988 to November 1992, he served as the accountant in charge of Huzhou Longxi supply and marketing cooperative; From December 1992 to April 1994, he served as the deputy manager of the Finance Department of Huzhou Economic and Trade Development Corporation; From May 1994 to July 2000, he served as deputy chief of finance section, chief of section, assistant to general manager and chief of finance section of Huzhou Industrial Products Corporation; From August 2000 to December 2003, he served as member of the Party branch of Huzhou JIAYE certified public accountants Co., Ltd; From January 2004 to now, he has served as the director and deputy general manager of Huzhou Guorui certified public accountants Co., Ltd; Since January 2017, he has served as an independent director of the company.
3. Mr. Hu Xudong, born in October 1959, Chinese nationality, without permanent residency abroad, has a doctoral degree. 2016 winner of special government allowance of the State Council, professor and doctoral supervisor of Zhejiang University of technology, President of Xinchang Institute of technological innovation of Zhejiang University of technology, director of Zhejiang Key Laboratory of modern textile equipment, leader of scientific and technological innovation team of Zhejiang modern textile equipment, vice chairman of Zhejiang Textile Machinery Standardization Committee, expert of the overall expert group of the national “innovation and application demonstration project of NC generation mechanical products” Consulting expert of Zhejiang high-end manufacturing equipment group and leader of Xinchang expert group of Zhejiang intelligent manufacturing expert advisory committee. From September 2020 to now, he has served as an independent director of the company.
(II) description of whether there is any situation affecting independence
As an independent director of the company, neither I nor my immediate family holds any shares of the company, nor holds any position in the company other than an independent director, and has no relationship with the company or the controlling shareholder of the company; No financial, legal, consulting and other services are provided for the company or its subsidiaries. We have the independence required by the rules for independent directors of listed companies, the articles of association and the working system of independent directors and the qualification to serve as independent directors of the company, and can ensure objective and independent professional judgment without affecting our independence.
2、 Annual performance of independent directors
(I) attendance, relevant resolutions and voting results
1. Board of directors and general meeting of shareholders
In 2021, the company held 7 Board meetings and 3 general meetings of shareholders. The attendance of independent directors is as follows:
Participation of major shareholders in the board of directors
Meeting situation
independent director
Number of absences of shareholders who should attend in person or by proxy this year
Number of board meetings
Li Beizhan 7 700 03
Chen Gang 7 700 3
Hu Xudong 7 7 0 0 3
2. Special Committee of the board of directors
In 2021, the company held five audit committees, one remuneration and assessment committee, no Nomination Committee and strategic decision-making committee. The attendance of independent directors is as follows:
Number of attendance in person, number of entrusted attendance and number of absences of the special committee of independent directors
Audit Committee 5 0 0
Salary and assessment committee 1 0 0
Li Beizhan
Nomination Committee 0
Strategic decision Committee 0
Chen Gang audit committee
Salary and assessment committee 1 0 0
Nomination Committee 0
Strategic decision Committee 0
Hu Xudong / //
As an independent director of the company, we carefully reviewed the meeting materials of the board of directors and special committees, made full use of our professional knowledge, put forward reasonable suggestions and opinions, and exercised our voting rights at the meetings of the board of directors and special committees with a cautious attitude, safeguarding the overall interests of the company and the interests of minority shareholders.
In 2021, we had no objection to the proposals of the board of directors and other matters of the company, and voted for all the proposals.
(II) site investigation
In 2021, we conducted field visits to the company and went deep into the production site, focusing on the company’s production and operation status, the construction and implementation of systems such as management and internal control, and the implementation of resolutions of the board of directors. We also kept in touch with other directors, senior managers and relevant staff of the company, always paid attention to the impact of external environment and market changes on the company, and timely learned the progress of major matters of the company, Master the operation dynamics of the company and supervise the standardized operation of the company.
(III) cooperation of listed companies with independent directors
The office of the board of directors and relevant departments of the company have provided us with necessary conditions to ensure the effective exercise of functions and powers by independent directors. The management of the company also attaches great importance to communication with us, timely reports the progress of the company’s production and operation and major matters, and provides better assistance for independent directors to perform their duties.
3、 Key matters concerned in the annual performance of independent directors
(I) related party transactions
On March 15, 2021, the company held the eighth meeting of the third board of directors, deliberated and approved the proposal on the company’s actual controller providing free guarantee for the company and its wholly-owned subsidiaries to apply for comprehensive credit line. Mr. Zhuo Xu, the actual controller of the company, provides joint and several liability guarantee for the company and its wholly-owned subsidiaries to apply for credit financing from banks and other financial institutions without charging any guarantee fee, and the company does not need to provide counter guarantee to them, which reflects the support of the actual controller to the company, conforms to the interests of the company and all shareholders, will not adversely affect the production and operation of the company, and will not damage the legitimate rights and interests of the company and its shareholders.
(II) external guarantee and fund occupation
During the reporting period, there was no external guarantee for the company and its holding subsidiaries, and there was no case that non operating funds were occupied by controlling shareholders and other related parties.
(III) use of raised funds
On September 18, 2021, the company held the 12th meeting of the third board of directors, deliberated and approved the proposal on using some temporarily idle raised funds for cash management. On the premise of ensuring that the normal progress of the company’s investment plan of raised funds will not be affected, the company uses the temporarily idle raised funds for cash management to purchase investment products with high safety, good liquidity and guaranteed principal, It is conducive to improve the use efficiency of raised funds and obtain certain investment benefits. The contents and approval procedures of the above matters comply with the relevant provisions of the China Securities Regulatory Commission and Shanghai Stock Exchange on the use of raised funds. There is no behavior of changing the purpose of raised funds in a disguised form, which will not affect the construction and use of raised funds, nor adversely affect the company’s business activities, and will not damage the interests of the company and all shareholders, especially minority shareholders, In line with the interests of the company and all shareholders.
The company’s 2021 raised funds were deposited and used in accordance with relevant regulations, and the raised funds were stored and used in a special account. There is no disguised change in the purpose of the raised funds and damage to the interests of shareholders, and there is no major illegal use of the raised funds.
(IV) merger and reorganization
During the reporting period, the company did not carry out M & A.
(V) nomination and remuneration of senior managers
On March 15, 2021, the company held the 8th meeting of the third board of directors, deliberated and approved the proposal on the remuneration scheme of directors in 2021 and the proposal on the remuneration scheme of senior managers in 2021. After verification, the remuneration scheme of directors and senior managers in 2021 was formulated according to the remuneration level of the industry and scale of the company and in combination with the actual operation of the company, Comply with the relevant provisions of the company law, the guidelines for the governance of listed companies, the Listing Rules of Shanghai Stock Exchange on the science and innovation board and the articles of association, and there is no situation that damages the interests of the company and shareholders.
In 2021, there was no change in senior management of the company.
(VI) performance forecast and performance express
During the reporting period, the company did not disclose the performance forecast, but disclosed the 2020 performance express. For details, please refer to the website of Shanghai Stock Exchange (www.sse. Com. CN.) on February 27, 2021 Announcement of Zhejiang Damon Technology Co.Ltd(688360) 2020 annual performance express.
(VII) appointment or replacement of accounting firms
On September 18, 2021, the company held the 12th meeting of the third board of directors, deliberated and adopted the proposal on changing the accounting firm, and submitted it to the general meeting of shareholders for deliberation and approval. Considering the actual situation of the company and the needs of annual audit, the company changed the financial audit institution and internal control audit institution of 2021 to Zhonghui Certified Public Accountants (special general partnership). The company has communicated in advance with ShineWing Certified Public Accountants (special general partnership), the original audit institution, on the matter of changing the accounting firm, and obtained its understanding and support. ShineWing Certified Public Accountants (special general partnership) is aware of this matter and confirms that it has no objection. The procedures for the company to replace the audit institution comply with the provisions of the articles of association and other relevant laws and regulations, and there is no case that damages the interests of minority shareholders.
(VIII) cash dividends and other investor returns
On March 15, 2021, the company held the eighth meeting of the third board of directors, deliberated and approved the proposal on the company’s 2020 profit distribution plan, and submitted it to the general meeting of shareholders for deliberation and approval. In accordance with the provisions of the company law, the articles of association and the development needs of the company, the company distributed cash dividends of RMB 3.50 (including tax) and RMB 2998680965 for every 10 shares to all shareholders based on the total shares of 85676599, accounting for 45.13% of the net profit attributable to shareholders of listed companies in the company’s 2020 annual consolidated statements, and the remaining undistributed profits were carried forward for subsequent annual distribution. The profit distribution complies with the provisions of the company law, accounting standards for business enterprises, the notice on further implementing the matters related to cash dividends of listed companies issued by the CSRC, the guidelines for the supervision of listed companies No. 3 – cash dividends of listed companies issued by the CSRC and the articles of association of the company. The relevant plans comply with the profit distribution policy, profit distribution plan, long-term return plan of shareholders and relevant commitments made by the company.
(IX) performance of commitments of the company and shareholders
During the reporting period, all commitments of the company and its controlling shareholders were strictly observed, and there was no breach of commitments by the company and its controlling shareholders.
(x) implementation of information disclosure
The company strictly implements the provisions of laws and regulations such as the Listing Rules of science and Innovation Board of Shanghai Stock Exchange and the relevant systems of the company’s information disclosure. The company’s information disclosure is true, accurate, complete, timely and fair, and there are no false records, misleading statements or major omissions, so as to ensure that investors timely understand the major matters of the company and safeguard the legitimate rights and interests of investors.
（11） Implementation of internal control
During the reporting period, the company established a sound internal control system in strict accordance with regulatory requirements and steadily promoted the construction of internal control system. The existing internal control system has no major defects, which can effectively ensure the orderly operation of the company’s business activities and protect the safety and integrity of the company’s assets.
（12） Operation of the board of directors and its subordinate special committees
The board of directors of the company has established an audit committee, a nomination committee, a remuneration and assessment committee and a strategic decision-making committee. During the reporting period, all special committees actively carried out their work and earnestly performed their duties for the company
