Dongxing Securities Corporation Limited(601198)
About Jiangxi Sunshine Dairy Co., Ltd
Initial public offering
of
Issuance and recommendation work report
Sponsor (lead underwriter)
(12th and 15th floors, Xinsheng building, No. 5 Financial Street, Xicheng District, Beijing)
statement
Dongxing Securities Corporation Limited(601198) (hereinafter referred to as “the sponsor” or ” Dongxing Securities Corporation Limited(601198) “) and the sponsor representatives of the project Zhang Shumin and Zhou Bin in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”) and the securities law of the people’s Republic of China (hereinafter referred to as “the securities law”) Measures for the administration of securities issuance and listing recommendation business, measures for the administration of initial public offering and listing (hereinafter referred to as “measures for the administration of initial public offering”), measures for the administration of securities issuance and listing recommendation business (hereinafter referred to as “measures for the administration of recommendation”) Relevant laws and regulations, such as the standard for the content and format of information disclosure by companies issuing securities No. 27 – issuance recommendation letter and issuance recommendation work report, the opinions on issues related to further improving the quality of financial information disclosure by companies issuing initial public shares, and the relevant provisions of the CSRC and Shenzhen Stock exchange, are honest, trustworthy, diligent and responsible, and in strict accordance with the business rules formulated according to law The industry practice norms and code of ethics shall issue this issuance recommendation work report, and ensure the authenticity, accuracy and completeness of the issuance recommendation work report.
If there is no special explanation in this offering recommendation work report, the relevant terms or abbreviations have the same meaning as that in the prospectus for initial public offering of shares of Jiangxi Sunshine Dairy Co., Ltd. (application draft). The relevant opinions are as of the date of issuance of this offering recommendation work report.
catalogue
Declare that 2 catalog Section 1 project operation process five
1、 Internal project audit process of the sponsor five
2、 The approval process of this securities issuance project eight
3、 The main implementation process of this securities issuance project eight
4、 The main process of the internal verification department of the recommendation institution reviewing the securities issuance project fourteen
5、 The main process of the sponsor’s core team reviewing the securities issuance project fifteen
Section II problems existing in the project and their solutions sixteen
1、 Project approval opinions and deliberations 16 II. Main problems found and concerned in the process of due diligence and the research, analysis and treatment of main problems 16 III. main issues concerned by the internal verification department and the specific implementation of the opinions of the internal verification department 18 IV. main issues discussed in the kernel group meeting, audit opinions and specific implementation of the opinions of the kernel meeting
…… Section III special verification 36 I. explanation of the sponsor’s verification of the professional opinions issued by the securities service institution and whether there are significant differences between these professional opinions and the judgment of the sponsor 36 II. The verification required by the recommendation institution in accordance with the opinions on further improving the quality of financial information disclosure of initial public offering companies (announcement [2012] No. 14 of China Securities Regulatory Commission)
…… 37 III. verification conducted by the recommendation institution in accordance with the guidelines on information disclosure related to profitability in the prospectus of initial public offering and listed companies (CSRC announcement [2013] No. 46) fifty-eight
4、 Verification opinions of the recommendation institution on matters related to the issuer’s cash dividend 65 v. verification of relevant investors by the recommendation institution in accordance with the provisions of Q & A on issuance supervision – answers to questions on the filing of private investment funds related to issuance Supervision 66 VI. verification opinions of the recommendation institution on the diluted immediate return of the issuer’s initial public offering and its filling measures sixty-seven
7、 Verification of relevant behaviors such as paid employment of third-party institutions and individuals sixty-seven
8、 Verification opinions on prospectus and other information disclosure materials sixty-eight
9、 The performance of internal audit of the recommendation institution sixty-eight
Section I project operation process
1、 Internal project audit process of recommendation institution
The sponsor has established perfect internal control systems such as sponsor business initiation system, due diligence system, counseling system, quality control system, audit system, core system, feedback reporting system, risk event reporting system, compliance inspection system, emergency handling system, continuous supervision system, continuous training system and sponsor working paper system.
According to the requirements of the guidelines on internal control of investment banking business of securities companies issued by the CSRC, the recommendation business of the recommendation institution has established three internal control lines of defense, specifically: (I) the project team and business departments constitute the first line of defense; (II) the quality control department forms the second line of defense; (III) the core management department, compliance and legal department and other relevant departments constitute the third line of defense.
The internal project audit process of the sponsor mainly includes project approval review process, quality control audit process, core process and subsequent management process.
(I) project initiation review process
The investment banking management committee of the recommendation institution sets up a recommendation underwriting and M & a business project approval team (hereinafter referred to as the “project approval team”) as the project approval agency of the recommendation underwriting and M & a business, and makes a decision on whether to approve the investment banking project. The specific process is as follows:
1. Project initiation application and internal audit of business department
After preliminary due diligence, the project team believes that the project meets the project initiation standards of the sponsor, and submits the self-examination form of conflict of interest and relevant supporting materials, project initiation application report and other materials that help to understand the quality and risks of the project.
The full-time compliance personnel of the business department shall review the conflict of interest and express clear opinions on the review results. The person in charge of the project and the person in charge of the business department shall review the whole set of application documents and sign the opinions. 2. Reviewed by quality control department
The quality control department shall check and judge whether the project meets the project approval standards and conditions, and issue clear audit opinions.
3. Reviewed by legal compliance department
The compliance and legal department reviews the conflict of interest and gives clear opinions.
4. Review and voting of the project initiation group
The quality control department is responsible for arranging the project review. On the basis of adhering to the avoidance principle, select the project members from the list of project team members and send the project materials to the project members.
The project review and voting meet the following conditions: (I) the number of members participating in the project review shall not be less than 5; (II) the number of members from the internal control department shall not be less than 1 / 2 of the total number of members participating in the voting.
The project initiation team performs its duties by means of on-site, communication and written voting, and makes a decision on whether the project can be approved by voting. The project initiation Committee shall complete the project initiation review within three working days after receiving the project initiation materials. If the number of consent votes reaches more than 2 / 3 (including) of the members participating in the voting, it shall be voted through.
The quality control department shall prepare the project initiation resolution in the form of written or electronic documents. After being confirmed by the voting members, the quality control department shall notify the person in charge of relevant departments of the project initiation resolution.
5. Approved by the leader in charge of business
After the approval of the leader in charge of business, the project is approved.
(II) quality control audit process
After the project team completes the due diligence, the working papers are fully prepared and the application documents are fully prepared, the project team and the business department apply to the quality control department for quality control audit after internal audit.
The quality control department shall assign auditors to conduct on-site verification, including but not limited to asking relevant personnel of the project company and project team; Observe the production and operation activities of the project company; Check the project working paper and other relevant documents and records; Consult the documents, materials and information related to the verification process. According to the on-site verification, the on-site inspectors analyze and judge the project risks and the practice of the project team, form a clear on-site verification conclusion, issue the on-site verification report and submit it to the person in charge of the quality control department for review.
After completing the project audit, the quality control auditor shall issue the quality control preliminary audit report on the problems found in the preliminary audit of the project, the problems of application materials, the problems of working papers, etc.
After receiving the preliminary review report of quality control, the project team shall timely and carefully reply to relevant questions, complete the acquisition and collection of working papers in the stage of on-site due diligence, and submit them to the quality control department for acceptance.
The quality control auditor shall issue the project quality control report, list the problems in doubt or needing attention of the project, and submit it to the kernel meeting for discussion.
(III) kernel process
The sponsor has set the core management department as the permanent core organization, the core Committee as the non permanent core organization, and set up a core person in charge to be fully responsible for the core work. The core process of the sponsor is as follows: 1. On site inspection by the core management department
The core management department shall assign personnel to carry out necessary on-site inspection according to the core work needs of investment banking business, issue on-site inspection report, and the project team shall reply in a timely and serious manner.
2. Ask nuclear procedure
The project team shall submit the application for the audit meeting, and the nuclear management department shall organize and hold the audit meeting after review.
The meeting focused on the risks and problems found in the practice process such as due diligence and internal control process such as quality control.
After asking the nuclear conference, the nuclear management department issued the review report of the nuclear management department.
3. Nuclear conference consideration
After implementing the review and questioning procedures, the kernel management department sends a notice of the kernel meeting and submits the kernel materials to the kernel Committee for consideration.
The kernel meeting is held in the form of on-site, communication and other meetings. The kernel committee members participate in the kernel meeting in their personal capacity, express their opinions independently and exercise their voting rights without interference from any department or individual. The voting of the core meeting shall be in the form of closed, open and independent voting, and the one person one vote system shall be implemented. The voting votes shall be affirmative and negative, and the core members shall not abstain. When the kernel meeting is held and voted, the number of members participating in the kernel meeting shall not be less than 9, the number of members from the internal control department shall not be less than one-third of the total number of members participating in the meeting, and at least one compliance manager shall participate in the voting. For the voting on the matters to be considered, if the number of consent votes reaches more than two-thirds (including) of the members attending the meeting, it shall be passed by vote; If the number of affirmative votes does not reach more than two-thirds, it shall not be adopted by voting.
After the core management department urges the project team to implement the core opinions, it can perform the signing and approval procedures and submit the application documents to the CSRC.
(IV) follow up management process
Before the submission, submission, issuance or disclosure of materials and documents such as the reply report of audit feedback, the reply report of the meeting of the issuance and audit committee, the verification report of report letter, professional opinions on post meeting matters and supplementary disclosure of the project, the quality control procedures reviewed by the quality control department and the core procedures reviewed in writing by the core management department shall be performed. The recommendation institution’s disclosure of continuous supervision and other reports shall comply with the quality control procedures reviewed by the quality control department and the core procedures reviewed in writing by the core management department.
2、 The approval process of the securities issuance project
Application time: July 23, 2020
Approval date of interest conflict review of compliance legal department: July 28, 2020
Approved by the quality control department on July 28, 2020
Members of the project initiation team: Wang Xiufeng, Tang Yipeng, Du Qing, Liu Wenda and Yang Zhi (including Du Qing, Liu Wenda and Yang Zhi from the internal control department)
Project approval time: July 31, 2020
Approval time of leader in charge of business: July 31, 2020
3、 Main implementation process of this securities issuance project
(I) project executive members
1. Composition of project executive members
Sponsor representatives: Zhang Shumin, Zhou Bin
Project Co organizer Li Xueyan
Other members of the project team: Huang Bin, LV Jiaquan, Yang Yiqing
2. Division of labor of project executive members
(1) Working hours and main processes of sponsor representatives participating in counseling and due diligence
Zhang Shumin and Zhou Bin, as the sponsor representatives specifically responsible for recommendation, participated in the guidance work, due diligence work, declaration preparation and other work of the project in accordance with the guidelines for due diligence of sponsors and the review guidelines on due diligence procedures of sponsor projects and other relevant requirements.
The sponsor representatives Zhang Shumin and Zhou Bin have been responsible for and participated in the due diligence since the project was approved. Zhang Shumin is responsible for the daily management of the project, listing guidance, promotion of on-site work, project coordination, due diligence of sales customers and suppliers, discussion of major issues, production and review of project application materials, production and review of working papers, etc. Zhou Bin is mainly responsible for the discussion of major issues of the project, the production and review of application materials, and the review of working papers.
In this due diligence, the time and main process of the sponsor representative participating in the due diligence are as follows:
In January 2017, the sponsor signed a listing guidance agreement with the issuer, and the project entered the listing guidance period. The sponsor representative Zhang Shumin entered the site as a listing guidance staff, and organized the guidance staff to carry out comprehensive due diligence and listing guidance. After the project enters the listing guidance period, the sponsor representatives Zhang Shumin and Zhou Bin enter the site as listing guidance personnel, and organize the guidance personnel to carry out comprehensive due diligence and listing guidance.
From January 2017 to may 2021, the sponsor representatives Zhang Shumin and Zhou Bin organized the project team to conduct comprehensive due diligence, check all documents provided by the issuer, organize the preparation, improvement and review of working papers and application documents.
From January 2017 to may 2021, the sponsor representative Zhang Shumin successively presided over 9 intermediary coordination meetings to fully communicate with enterprises on the problems found by intermediaries in the process of due diligence.
In May 2019 and may July 2020, the sponsor representatives Zhang Shumin and Zhou Bin organized the project team to conduct full due diligence on the company’s main suppliers, customers and relevant government departments through video interviews and on-site visits.
From March to April 2021, the sponsor representatives Zhang Shumin and Zhou Bin organized the project team to reply to the opinions of the core department and core team of the sponsor and
