Safbon Water Service (Holding) Inc.Shanghai(300262) special audit report on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd
Special audit report on the completion of performance commitments
Zhong Hui Zi (2022) No. 04394 Safbon Water Service (Holding) Inc.Shanghai(300262) all shareholders:
We have been entrusted to review the statement on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. from 2019 to 2021 prepared by the management of Safbon Water Service (Holding) Inc.Shanghai(300262) (hereinafter referred to as ” Safbon Water Service (Holding) Inc.Shanghai(300262) shares”). 1、 Responsibilities of management
It is the responsibility of the management of Safbon Water Service (Holding) Inc.Shanghai(300262) Co., Ltd. to prepare the statement on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. from 2019 to 2021 in accordance with the relevant regulations of Shenzhen Stock Exchange, ensure its authenticity, integrity and accuracy, and provide true, legal and complete physical evidence, original written materials, duplicate materials and other necessary evidence. 2、 Responsibilities of Certified Public Accountants
Our responsibility is to express audit opinions on the statement on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. from 2019 to 2021 on the basis of audit. 3、 Job overview
We plan and implement the audit in accordance with the provisions of other assurance business standards for Chinese certified public accountants No. 3101 – assurance business other than audit or review of historical financial information. The auditing standards for Chinese certified public accountants require us to abide by the code of professional ethics for Chinese certified public accountants, plan and implement the audit work, so as to obtain reasonable assurance on whether there is no material misstatement in the statement on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. from 2019 to 2021. During the audit process, we implemented procedures that we considered necessary, including the audit of accounting records. We believe that the audit evidence we have obtained is sufficient and appropriate, which provides a basis for issuing special audit opinions. 4、 Special audit opinions
We believe that the statement on the completion of performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. from 2019 to 2021 prepared by the management of Safbon Water Service (Holding) Inc.Shanghai(300262) shares is prepared in accordance with the relevant provisions of Shenzhen Stock Exchange in all major aspects, and fairly reflects the completion of performance commitments of Beijing Longyuan environmental Protection Engineering Co., Ltd., an important associate of Safbon Water Service (Holding) Inc.Shanghai(300262) shares from 2019 to 2021 in all major aspects. 5、 Report usage restrictions
We remind the users of this special audit report that this report is only used for the purpose of disclosure of the 2021 annual report of Safbon Water Service (Holding) Inc.Shanghai(300262) shares, and shall not be used for any other purpose without the written consent of our exchange.
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Zhonghua Certified Public Accountants (special general partnership) Chinese certified public accountant
(project partner)
Chinese certified public accountant
Shanghai, China, April 27, 2022
About Beijing Longyuan Environmental Protection Engineering Co., Ltd
Description of performance commitments from 2019 to 2021
In accordance with the requirements of the relevant provisions of companies listed on the gem of Shenzhen Stock Exchange, the performance commitments of Beijing Longyuan Environmental Protection Engineering Co., Ltd. (hereinafter referred to as “Beijing Longyuan” or “target company”) are described as follows: I. transaction related information
The proposal on the acquisition of equity of Beijing Longyuan Engineering Co., Ltd. was deliberated and adopted at the 49th session of the 4th board of directors on December 13, 2019, It is agreed that the company and the related party Shanghai Yingsu Environmental Protection Technology Co., Ltd. (hereinafter referred to as “Yingsu environmental protection”) sign the equity acquisition agreement on Beijing Longyuan Environmental Protection Engineering Co., Ltd. (hereinafter referred to as “equity acquisition agreement”), and the company acquires 49% equity of the target company held by Yingsu environmental protection in the form of cash payment, with a transaction consideration of 46.6 million yuan. 2、 Agreement on performance commitment and performance compensation
1. Performance commitment
According to the equity acquisition agreement, the environmental protection commitment should be eliminated. Beijing Longyuan has realized a cumulative deduction of non net profit of no less than 250 million yuan from 2019 to 2021. The commitment for net profit is calculated based on the lower one before and after deducting non recurring profits and losses.
2. Agreement on performance compensation
According to the equity acquisition agreement, both the company and Yingsu environmental protection confirm that if the accumulated net profit realized by Beijing Longyuan during the commitment period is less than 90% of the accumulated committed net profit, Party A shall compensate Party B in the following ways: amount to be compensated = accumulated committed net profit – accumulated actual net profit. 3、 Completion of performance commitments
According to the audit report (rhsz [2020] No. 1 Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) 4) issued by Ruihua Certified Public Accountants (special general partnership) and the audit report (zxhsz (2021) No. 550009) issued by zhongxinghua Certified Public Accountants (special general partnership), According to the Zhongxing Huashen Zi (2022) No. 550004 audit report issued by Zhongxing Hua Certified Public Accountants (special general partnership) and Zhongxing Huazhi Zi (2022) No. 550005 special audit report issued by Zhongxing Hua Certified Public Accountants (special general partnership), Beijing Longyuan Environmental Protection Engineering Co., Ltd. has realized a cumulative net profit of 17967716306 yuan attributable to the owner of the parent company during the performance commitment period (20192021), The net profit after deducting non recurring profits and losses was 16677987414 yuan, 66.71% of the accumulated committed net profit was completed, and 90.00% of the accumulated committed net profit was not reached. According to the equity acquisition agreement, Yingsu environmental protection shall compensate the company with 8322012586 yuan.
Safbon Water Service (Holding) Inc.Shanghai(300262)
April 27, 2022
