Special instructions and independent opinions of independent directors on relevant matters
Safbon Water Service (Holding) Inc.Shanghai(300262) (hereinafter referred to as “the company”) held the 36th meeting of the Fourth Board of directors on April 27, 2022, In accordance with the relevant provisions of laws, regulations and normative documents such as the company law, the securities law, the Listing Rules of gem shares of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies, the guiding opinions on the establishment of independent director system in listed companies, and the measures for the administration of securities issuance and registration of GEM listed companies (for Trial Implementation), As an independent director of the company, with a serious and responsible attitude and based on an independent, prudent and objective position, we express the following independent opinions on relevant matters of this meeting:
1、 Special instructions and independent opinions on the occupation of the company’s funds by controlling shareholders and other related parties and the company’s external guarantee
According to the provisions of relevant laws and regulations such as the notice on regulating the capital exchanges between listed companies and related parties and the external guarantee of listed companies (zjf [2017] No. 16) (hereinafter referred to as the “notice”), the notice on regulating the external guarantee behavior of listed companies (zjf [2005] No. 120) and the articles of association and other company documents of the CSRC, We have carefully and responsibly verified the occupation of the company’s funds and the company’s external guarantees by the controlling shareholders and other related parties in 2021, and now express the following independent opinions: 1. About the occupation of the company’s funds by the controlling shareholders and other related parties. 2
According to the special description on the occupation of non operating funds and other related capital transactions in 3 Rongyu Group Co.Ltd(002622) 021 issued by Zhonghua Certified Public Accountants (special general partnership) on April 27, 2022, Zhonghui Zi (2022) No. 04349, as of December 31, 2021, the capital transactions of the company’s controlling shareholders and other related parties can strictly abide by the above provisions, and there is no violation of the above provisions; There is no abnormal occupation of the company’s funds by controlling shareholders and other related parties.
2. About the company’s external guarantee
On November 29, 2021, the company disclosed the suggestive announcement on the company’s illegal external guarantee and other risk warnings that may be implemented in stock trading (Announcement No.: 2021198). Zhang Chunlin pledged his 40 million shares of the company to Ren Yuan and borrowed 130 million yuan. At the request of Ren Yuan, the company provided guarantee for the loan. This guarantee was not deliberated by the board of directors and the general meeting of shareholders of the company, which violated the articles of association and other relevant provisions. On December 29, 2021, the company disclosed the announcement on the cancellation of illegal guarantees and the progress of litigation (Announcement No.: 2021216). Zhang Chunlin fulfilled all the above repayment obligations, and the company did not bear the guarantee liability for the illegal guarantees of the above loans, nor paid any funds for the above loans; On the same day, the company negotiated with Ren Yuan to release the listed company’s unlimited joint and several guarantee liability for Zhang Chunlin’s loan from Ren Yuan. The company has released the above illegal guarantee on the same day.
As of December 31, 2021, in addition to the above guarantees, the subsidiaries guaranteed by the company are in stable operation. Providing guarantees to subsidiaries is conducive to their business development, the long-term interests of the company and the fundamental interests of the majority of shareholders. No other violations of the guarantee occurred.
2、 Independent opinions on the self-evaluation report of the company’s internal control in 2021
Independent directors Mr. Li Jianyong and Mr. Kang Zhongliang believe that the company has established a relatively perfect internal control system, and all internal control systems comply with the provisions and requirements of relevant national laws, regulations and regulatory authorities. The company’s self-evaluation report on internal control in 2021 truly and objectively reflects the construction and operation of the company’s internal control system; Expressed an independent opinion of agreement.
Mr. Liu Tao, an independent director, expressed reservations that although the company’s self-evaluation report on internal control in 2021 truly and objectively reflected the construction and operation of the company’s internal control system, he expressed doubts about the effectiveness of internal control.
3、 Independent opinion on the reappointment of the audit institution in 2022
Independent directors Mr. Li Jianyong and Mr. Kang Zhongliang believe that Zhonghua Certified Public Accountants (special general partnership) has made detailed plans and arrangements in the annual audit of the company over the years, the auditors stationed have good professional ethics and rich audit experience, and the audit reports issued for the company objectively and fairly reflect the financial status and operating results of the company, Agree to continue to employ Zhonghua Certified Public Accountants (special general partnership) as the company’s audit institution in 2022, and agree that the board of directors of the company will submit the above matters to the company’s 2021 annual general meeting for deliberation.
Ms. Liu Tao, an independent director, believes that based on the fact that Zhonghua Certified Public Accountants (special general partnership) has been serving the company for many years, there was a large amount of provision for asset impairment and write off of assets in 2021, and there was a correction of accounting errors in the early stage; I have reservations about Zhonghua Certified Public Accountants (special general partnership) continuing to undertake the audit of the company in 2022.
4、 Independent opinions on the remuneration of directors and senior managers of the company in 2022
After verification, the remuneration of the company’s directors and senior managers is formulated according to the management requirements and responsibilities of the company’s industry, comprehensively considering the actual operation of the company and referring to the development level of the region and industry, which is conducive to mobilizing the work enthusiasm of the company’s senior managers, conducive to the long-term development of the company, in line with the reality of the industry and the company, and there is no damage to the interests of shareholders. We agree to the proposal on the remuneration of directors and senior managers of the company, and agree to submit the remuneration of directors in the proposal to the 2021 annual general meeting of shareholders of the company for deliberation. 5、 Independent opinions on the company’s profit distribution plan in 2021
After verification, the board of directors of the company comprehensively considered the future development and financial situation of the company and put forward the plan of no cash profit distribution in 2021, which met the requirements of relevant regulations and the needs of the company’s long-term development, was conducive to safeguarding the long-term interests of shareholders, and complied with relevant regulations such as laws and regulations. This plan does not damage the interests of the company and all shareholders, especially minority shareholders. Based on the above factors, we unanimously agree that the board of directors will not make cash profit distribution plan, and agree to submit the plan to the 2021 annual general meeting of shareholders of the company for deliberation.
6、 Independent opinions on the provision for asset impairment and write off of assets in 2021
Mr. Kang Zhongliang, an independent director, believes that the company’s provision for asset impairment and write off of assets this time are based on the principle of accounting prudence and consistency, comply with the relevant provisions of the accounting standards for business enterprises and the actual situation of the company’s assets and the provisions of relevant policies, fairly reflect the company’s asset status, and help to provide investors with more authentic and reliable accounting information, And did not harm the interests of all shareholders, especially minority shareholders. The decision-making procedures for the provision for asset impairment and write off of assets this time comply with the relevant provisions of relevant laws, regulations and normative documents, and have performed the necessary approval procedures.
The company agrees to withdraw the provision for asset impairment and write off assets this time.
Mr. Li Jianyong, an independent director, expressed reservations that the amount of provision for asset impairment and write off of assets in 2021 is large, which cannot be judged in a short time after receiving the financial report, and further details need to be provided.
Ms. Liu Tao, an independent director, expressed reservations that the company’s business law has not changed substantially, and the amount of asset impairment provision and write off assets in 2021 is too large to judge its rationality.
7、 Independent opinions on changes in accounting policies
After verification, we believe that the change of accounting policy is the corresponding change of the company’s accounting policy in accordance with the provisions of the notice on printing and distributing the interpretation of accounting standards for Business Enterprises No. 14 (CAI Kuai [2021] No. 1), which is in line with the relevant provisions of the Ministry of finance of the people’s Republic of China, China Securities Regulatory Commission and Shenzhen Stock Exchange.
After the change of accounting policy, the company’s financial statements can objectively and fairly reflect the company’s financial status, operating results and cash flow. The implementation of the changed accounting policy has no significant impact on the company’s financial status, operating results and cash flow. The change of accounting policy has fulfilled the relevant approval procedures, complies with the provisions of laws, regulations, normative documents and the articles of association, and does not damage the interests of the company and all shareholders, especially small and medium-sized shareholders. Therefore, we agree to this accounting policy change.
8、 Independent opinions on correction and retroactive adjustment of accounting errors in the previous period
Independent directors Mr. Li Jianyong and Mr. Kang Zhongliang believe that the adjustment and correction of errors in the previous period comply with the relevant provisions of the accounting standards for Business Enterprises No. 28 – changes in accounting policies and accounting estimates or correction of errors and the rules for the preparation of information disclosure of companies offering securities to the public No. 19 – correction and related disclosure of financial information, and the corrected financial data and financial statements can be more objective To fairly reflect the financial position of the company; The matters reviewed and corrected in the early stage of the company comply with the provisions of the laws and regulations, as well as the matters related to the correction of errors in the articles of association.
Ms. Liu Tao, an independent director, expressed reservations and expressed doubts that the reasons for the correction of accounting errors include that the Dongying project in previous years was recognized as a BOT project without franchise rights.
To sum up, we believe that the relevant proposals considered at the 36th meeting of the Fourth Board of directors of the company comply with the provisions of laws, regulations, normative documents and the articles of association. The voting procedures at the meeting of the board of directors are legal and effective, and there is no harm to the interests of the company and its shareholders, especially small and medium-sized shareholders. We agree to submit the above-mentioned relevant proposals to the 2021 annual general meeting of shareholders of the company for deliberation.
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(there is no text on this page, which is the signature page of Safbon Water Service (Holding) Inc.Shanghai(300262) independent directors’ special instructions and independent opinions on relevant matters)
Signature of independent director:
Liu Tao, Li Jianyong, Kang Zhongliang
Mm / DD / 2022
