China Dive Company Limited(300526) : work report of the board of supervisors in 2021

China Dive Company Limited(300526)

Work report of the board of supervisors in 2021

China Dive Company Limited(300526) all shareholders:

In 2021, the board of supervisors of the company strictly abided by the laws, regulations and normative documents of the company law, securities law, Shenzhen Stock Exchange GEM Listing Rules, Shenzhen Stock Exchange listed companies self regulatory guidance No. 2 – standardized operation of GEM listed companies, as well as the relevant provisions of the company’s systems such as the articles of association and rules of procedure of the board of supervisors, with the principle of safeguarding the interests of the company and shareholders, Checked the decision-making procedures and compliance of the company’s major matters, reviewed the company’s financial status and the preparation of financial reports, supervised the performance of duties of directors, managers and other senior managers, and effectively gave full play to the functions of the board of supervisors. The main work report of the board of supervisors in 2021 is as follows:

1、 Main work of the board of supervisors during the reporting period

During the reporting period, the board of supervisors attended all the on-site meetings of the board of directors in 2021 as nonvoting delegates, and supervised the board of directors in implementing the resolutions of the general meeting of shareholders and fulfilling the obligation of good faith. The board of supervisors held that the board of directors conscientiously implemented the resolutions of the general meeting of shareholders, performed its duties diligently, and did not harm the interests of the company and shareholders. The resolutions of the board of directors met the requirements of relevant laws and regulations and the articles of association. In 2021, the board of supervisors of the company held 6 meetings, and the details of each meeting and resolution are as follows:

Serial number session date deliberation proposal

1. Proposal on adjusting the implementation progress of raised investment projects issued by the Fourth Board of supervisors on January 14, 2021

Proposal on transferring some investment projects with raised funds at the 13th meeting

2. Proposal on replacing the annual audit accounting firm issued by the 4th board of supervisors on February 10, 2021

14th Meeting

Work report of the board of supervisors in 2020

2020 annual report and its summary

Financial statement report of 2020

3. Proposal on 2020 profit distribution plan of the Fourth Board of supervisors on April 28, 2021

Self evaluation report on internal control in 2020 at the 15th meeting;

Proposal on reappointment of the company’s audit institution in 2021

On the application of the company and its subsidiaries to the bank in 2021

Proposal on joint credit and guarantee for subsidiaries

Proposal on canceling some stock options of 2019 stock option incentive plan

Proposal on correction of previous accounting errors

Proposal on correction of inventory loss

Opinions of the board of directors on special notes on matters involved in non-standard audit opinions on 2020 financial report

Special instructions of the board of supervisors on issuing qualified internal control assurance report to accounting firms

First quarter report of 2021

4 proposal on the full text of the company’s 2021 semi annual report and its summary from the 16th meeting of the Fourth Board of supervisors on August 27, 2021

5 the 17th meeting of the 4th board of supervisors on the proposal on the company’s third quarter report in 2020 on October 28, 2021

6 proposal of the 18th meeting of the 4th board of supervisors on correction and retroactive adjustment of accounting errors in the early stage on November 26, 2021

2、 Verification opinions of the board of supervisors on relevant matters during the reporting period

In accordance with relevant laws and regulations and other relevant provisions, the board of supervisors of the company earnestly performs the functions of the board of supervisors from the perspective of earnestly safeguarding the interests of the company and the rights and interests of the majority of small and medium-sized investors, and comprehensively supervises the legal operation, financial status, raised funds, related party transactions, external guarantees, internal control and information disclosure management of the company. After careful deliberation, it is agreed that:

(I) legal operation of the company

In October 2020, the company received the notice of investigation (GDZZ 20137) from the China Securities Regulatory Commission (hereinafter referred to as the CSRC). Due to the company’s suspected illegal information disclosure, according to the securities law of the people’s Republic of China and other relevant provisions, the Guangdong securities regulatory bureau of the CSRC decided to file a case for investigation. On August 31, 2021, the company received the decision on Administrative Punishment [2021] No. 13 issued by China Securities Commission. Due to the false records in the company’s 2019 annual report, the failure to disclose related party transactions and misleading statements in the relevant announcements disclosed in the 2019 annual report on the acquisition of Hefei Datang Storage Technology Co., Ltd., the company and relevant parties were subject to administrative penalties.

The company has actively carried out the rectification work according to the content of the decision on administrative punishment, deeply analyzed the good opportunities to standardize the operation and improve the quality of information disclosure, strengthened the understanding and learning of the company’s directors, supervisors, senior managers and relevant responsible persons on relevant laws and regulations through this rectification, and improved the awareness of standardized operation and management level.

(II) financial situation of the company

During the reporting period, the board of supervisors conducted careful and effective supervision, inspection and audit on the company’s financial status and financial management in 2020. After auditing the company’s 2021 financial report, Asia Pacific (Group) Certified Public Accountants (special general partnership) issued an audit report with qualified opinions with significant uncertainties in going concern.

The board of supervisors recognizes the qualified opinion audit report with significant uncertainty of going concern issued by Asia Pacific (Group) Certified Public Accountants (special general partnership), and will earnestly perform its duties, urge the company’s board of directors and management to take effective measures to eliminate the impact of matters involved in the qualified opinion in the audit report, actively promote relevant work, and effectively safeguard the legitimate rights and interests of the company and all shareholders.

(III) external guarantee of the company

The board of supervisors supervised and verified the external guarantee of the company in 2021. During the reporting period, the company had no matters related to external guarantee.

(IV) related party transactions of the company

The board of supervisors supervised and verified the related party transactions of the company in 2021. The board of supervisors believed that the occurrence of related party transactions during the reporting period was necessary. Its pricing was determined based on the maximization of the company’s interests, the fair market price and the protection of shareholders’ rights and interests, followed the market rules and the principles of openness, fairness and impartiality, and there was no damage to the interests of the company and shareholders. All related party transactions have been subject to relevant approval procedures in accordance with the articles of association at that time.

(V) opinions on the self-evaluation report of internal control

The board of supervisors reviewed the company’s internal control in 2021 and the construction and operation of the company’s internal control system, and believed that the company had established and improved a more reasonable and perfect internal control standard system in accordance with the provisions of relevant laws and regulations, which could be effectively implemented in business activities and played a positive role in preventing and controlling various risks of the company. The 2021 internal control evaluation report issued by the company truly and objectively reflects the current construction and operation of the company’s internal control.

(VI) verification of the company’s inside information management

After verification by the board of supervisors, during the reporting period, the company has strictly implemented and implemented the registration management of insiders of inside information in accordance with the registration management system of insiders of inside information. The company has timely submitted the list of insiders of inside information to Shenzhen Stock Exchange when making regular disclosure reports. The board of supervisors verified that during the reporting period, the company did not find that insiders used insider information to illegally buy and sell the company’s shares.

(VII) verification opinions on periodic reports in 2021

The board of supervisors believes that the procedures of the company’s regular report in 2021 comply with laws, administrative regulations and other normative documents, and the contents of the report truly, accurately and completely reflect the actual situation of the listed company, without any false records, misleading statements or major omissions. The board of supervisors has no objection to the contents and conclusions of each periodic report.

3、 2021 annual work plan of the board of supervisors

In 2021, the board of supervisors will closely focus on the established strategic policies of the company, strictly abide by the responsibilities entrusted to the board of supervisors by national laws and regulations and the articles of association, strictly abide by their duties and supervise the standardized operation of the company. Do the following:

1. Strengthen the implementation of supervision functions. Urge the company to further improve the corporate governance structure, promote the improvement of the internal control system and improve the level of corporate governance; Supervise the diligence of directors and senior managers of the company to prevent acts damaging the interests of the company; Maintain communication with the internal audit department and the external audit institutions hired by the company, and pay timely attention to the production and operation of the company.

2. Actively participate in the training organized by the regulatory authorities, carefully study relevant laws, regulations, norms and guidelines, and further improve the working ability and efficiency of the board of supervisors.

3. Strengthen the supervision of the implementation of the company’s financial management and internal control system, and timely understand the company’s financial status and interests.

China Dive Company Limited(300526) board of supervisors April 22, 2022