Shang Gong Group Co.Ltd(600843) (Group) Co., Ltd
Report on the work of independent directors in 2021
In 2021, the independent directors of Shang Gong Group Co.Ltd(600843) (Group) Co., Ltd. (hereinafter referred to as “the company”) were loyal and loyal in strict accordance with the company law of the people’s Republic of China, the governance standards of listed companies, the rules for independent directors of listed companies and other laws and regulations, as well as the articles of association, the working system for independent directors of the company, the working system for annual reports of independent directors of the company, the detailed rules for the implementation of special committees of the board of directors and other relevant provisions I diligently and conscientiously perform the duties of independent directors, strive to safeguard the interests of the company and shareholders, especially minority shareholders, actively promote the standardized operation of the company and improve the level of corporate governance. Now I report my work in 2021 as follows:
1、 Basic information of independent directors
(I) personal work experience, professional background and part-time work
Rui Meng, born in Hong Kong, China, has a Bachelor of international economics from Beijing Institute of international relations, a master of economics from Oklahoma State University, a master of business administration from the University of Houston, a doctor of finance from the University of Houston, and a lifelong professor at the Chinese University of Hong Kong. She is currently a professor of Finance and accounting at the China Europe International Business School and a professor of pengrui finance. I have been an independent director of the company since April 2017. Concurrently serve as Cosco Shipping Energy Transportation Co.Ltd(600026) independent non-executive director, independent non-executive director of China Education Group Holding Co., Ltd., independent non-executive director of Country Garden Service Holding Co., Ltd. and independent non-executive director of Landsea green real estate Co., Ltd.
Xi juntong is a long-term professor and doctoral supervisor of the State Key Laboratory of mechanical manufacturing and automation, mechanical system and vibration, Shanghai Jiaotong University. He is now the executive vice president of Shanghai Intelligent Manufacturing Research Institute, the director and general manager of Shanghai Jiaotong University Lingang intelligent manufacturing innovation technology Co., Ltd., the general manager of Shanghai intelligent manufacturing function platform company, Shanghai Hi-Tech Control System Co.Ltd(002184) independent director, Shanghai Electric Group Company Limited(601727) independent director, Shanghai Friendess Electronic Technology Corporation Limited(688188) independent director. Mainly engaged in research work in the field of digital manufacturing and intelligent manufacturing technology. He has won the second prize of national scientific and technological progress award, 6 Awards of Shanghai Scientific and technological progress and technological invention. Main academic part-time jobs include: Deputy Director of manufacturing automation professional committee of China Mechanical Engineering Society, member of additive manufacturing professional committee of China Mechanical Engineering Society, executive director of China intelligent manufacturing industry technology innovation alliance, and vice president of Shanghai Mechanical Engineering Society.
Chen Zhen, Bachelor of law, Chinese practicing lawyer, has worked in KONE law firm since 1999 as a lawyer and partner. I have obtained the qualification certificate of independent director and regularly participated in the professional training organized by Shanghai Stock Exchange. I have been an independent director of the company since April 2017. At present, he is also an independent director of Shengshi Watch Group Co., Ltd.
(II) whether there are conditions affecting independence
The independent directors of the company meet the independence requirements of laws and regulations such as the standards for the governance of listed companies and the rules for independent directors of listed companies, and there is no situation affecting the independent performance of duties.
2、 Annual performance of independent directors
In 2021, the independent directors of the company actively performed their duties, attended the general meeting of shareholders, the meeting of the board of directors and the special committee of the board of directors, carefully considered various proposals, and deeply understood the operation and management of the company through listening to reports, meetings, studying materials and multi-party communication and exchange. During his tenure as an independent director of the company in 2021, the attendance at the board of directors, the general meeting of shareholders and the professional committee are as follows:
Rui Meng attended the board of directors for 5 times, attended in person for 5 times, entrusted for 0 times, attended on site for 1 time, attended by communication for 4 times and was absent for 0 times; Should attend the general meeting of shareholders twice and attend in person 0 times.
Xi juntong attended the board of directors for 5 times, personally attended for 5 times, entrusted to attend for 0 times, participated for 1 time in the form of on-site, participated for 4 times in the form of communication and was absent for 0 times; Should attend the general meeting of shareholders twice and attend in person 0 times.
Chen Zhen attended the board of directors for 5 times, personally attended for 5 times, entrusted to attend for 0 times, attended for 1 time in the form of on-site, participated for 4 times in the form of communication and was absent for 0 times; Should attend the general meeting of shareholders twice and attend in person once.
Before the meeting of the board of directors, the independent directors took the initiative to obtain the information and materials needed for making decisions, understand the production and operation of the company, consult relevant materials, and communicate with relevant personnel. During the meeting, they listened carefully to and considered each topic, actively participated in the discussion and put forward reasonable suggestions, which played a due role in making scientific decisions for the board of directors of the company. The major business decisions and other major matters made at the meeting of the board of directors during the reporting period have complied with relevant procedures, which are legal and effective. I have no objection to the proposals of the board meeting and other matters of the company.
In 2021, the company conducted on-site investigation and investigation on the company and its subsidiaries such as Duke pubaifu Industrial (Shanghai) Co., Ltd. and Shanghai Butterfly import and Export Co., Ltd., and actively understood the operation and financial status of the company and its subsidiaries and the progress of major investment projects. I also keep in close contact with the company’s non independent directors, senior managers, Secretary of the board of directors and relevant staff through telephone and e-mail, always pay attention to the impact of external environment and market changes on the company, timely learn the progress of major matters of the company and master the operation dynamics of the company. Pay attention to the impact of external environment and market changes on the company, pay attention to the reports and evaluations of the media, networks and other relevant companies, and strive to be diligent and responsible; It has played an important role in ensuring the company’s independence and operation.
3、 Key matters concerned in the annual performance of independent directors
The independent directors focused on some important matters in the company’s production and operation and management decision-making in 2021, and expressed independent opinions on the following matters, as follows:
(I) external guarantee and fund occupation
The company can strictly control the total amount of guarantee, and external guarantee is based on the reasonable needs of the operation and development of the company and its holding subsidiaries. The guarantee decision shall be submitted to the board of directors and the general meeting of shareholders for deliberation and approval. The guarantee decision-making procedure is reasonable and legal, and the company shall timely perform the relevant information disclosure obligations. The guarantee object is the wholly-owned and holding subsidiary of the company, and the company can control its operation and finance. The guarantee object has sufficient ability to repay the debt, the risk is controllable, and will not damage the interests of the company and its shareholders, especially the minority shareholders. In 2021 and up to 2021, the company did not provide guarantee for any unincorporated unit or individual, nor did the major shareholders and other related parties force the company to provide guarantee. The company does not provide guarantee for any unincorporated unit or individual, nor does it force the company to provide guarantee and occupy funds by major shareholders and other related parties.
(II) use of raised funds
After verification, the deposit and use of the raised funds of the company comply with the relevant provisions of China Securities Regulatory Commission, Shanghai Stock Exchange and the company’s internal control, and there is no illegal use and deposit of the raised funds, and there is no damage to the interests of shareholders.
The company uses some temporarily idle self owned funds for cash management on the premise that the company’s operation is good, its financial situation is stable, and does not affect the company’s daily operating capital turnover needs and capital safety. The above cash management will not affect the normal development of the company’s main business, and comply with the articles of association and other relevant provisions, and the review procedures are legal and compliant. The company’s use of its own funds for cash management is conducive to improving the efficiency of the company’s use of funds and obtaining a better return on investment for the company’s shareholders, which is in line with the interests of the company and all shareholders. It is agreed that the company will use temporarily idle self owned funds with a limit of no more than 200 million yuan for cash management.
(III) remuneration of senior managers
The remuneration and performance appraisal of the company’s senior managers in 2020 follows the principles of distribution according to work and the combination of responsibility, right and interest, the principle of linking the income level with the company’s benefits and work objectives, and the principle of combining personal remuneration with the company’s long-term interests, which is not only conducive to strengthening incentives and constraints, but also in line with the actual situation of the enterprise and does not damage the interests of the company and all shareholders, especially small and medium-sized shareholders, Confirm that the procedures comply with relevant laws and regulations, normative documents and the relevant provisions of the articles of association, and agree to the proposal on the remuneration and performance appraisal results of senior executives in 2020.
(IV) appointment or replacement of accounting firms
During the reporting period, the company continued to employ Lixin Certified Public Accountants (special general partnership) as the auditor of the company’s annual financial report and internal control. Lixin certified public accountants has worked rigorously, objectively and fairly in the audit of the company, performed the audit work and agreed responsibilities, and agreed to continue to hire him as the audit institution of the company and pay remuneration as agreed. The renewal procedure complies with the provisions of the company law and other laws and regulations and the articles of association.
(V) cash dividends and other investor returns
In accordance with the requirements of the guidelines for the supervision of listed companies No. 3 – cash dividends of listed companies and other regulations of the CSRC, in the process of formulating the annual profit distribution plan, we carefully listened to the report of the management on the profit distribution plan, and discussed the profit distribution. In view of the fact that the company did not meet the profit distribution conditions during the reporting period, the company did not conduct profit distribution, nor did it convert the capital reserve into share capital. The board of directors and the general meeting of shareholders of the company reviewed and approved the above profit distribution plan, which is in line with the articles of association and relevant provisions.
(VI) performance of commitments of the company and shareholders
During the reporting period, the company and its shareholders had no outstanding commitments.
The company and its major shareholders did not fulfill their commitments within the time limit, and no violations were found.
(VII) implementation of information disclosure
During the reporting period, I continued to pay attention to the company’s information disclosure and was able to maintain good communication with relevant personnel of the company on relevant matters. In strict accordance with the company law, the securities law, the Listing Rules of Shanghai Stock Exchange and other relevant provisions, and following the principle of “openness, fairness and impartiality”, the company disclosed 4 periodic reports and 59 temporary announcements in a timely and fair manner. The company and the information disclosure obligors performed the information disclosure obligations in strict accordance with the requirements of laws and regulations, and the information disclosure contents were timely, accurate and complete, without major errors or criticism notified by the exchange.
(VIII) implementation of internal control
During the reporting period, the company implemented the basic norms of enterprise internal control, strengthened the company’s internal control, improved the company’s operation and management level and risk prevention ability, and formulated the work plan for the implementation of internal control norms.
In strict accordance with the requirements of the work plan for the implementation of internal control norms, the independent directors urge the internal control organization of the company to comprehensively carry out the construction, implementation and evaluation of internal control, and promote the steady implementation of the enterprise’s internal control norms system. At present, no major defects in the design or implementation of internal control have been found.
(IX) operation of the board of directors and its subordinate special committees
During the reporting period, the board of directors and its subordinate special committees required standardized operation and scientific decision-making in accordance with the provisions of the company law, the articles of association, the rules of procedure of the board of directors and the implementation rules of the professional committee of the board of directors. With regard to the company’s strategy, audit, salary management, nomination and appointment of senior managers and other major issues, all special committees were able to hold meetings in time, review and express professional opinions, and use professional knowledge to provide necessary support for the scientific decision-making of the board of directors, which effectively improved the decision-making efficiency of the board of directors of the company.
During the reporting period, independent directors attended the board of directors and special meetings on time and performed their duties and obligations diligently. The directors and members of each committee of the board of directors seriously participate in the activities of each committee. Among them, the audit committee of the board of directors held 7 meetings in 2021 to review and express opinions on relevant matters such as periodic reports and financial reports. In daily work, be able to keep close communication with the company’s management on the company’s production and operation, and actively perform their duties. The nomination committee and the executive compensation committee held five meetings respectively to consider matters related to the strategy, the nomination committee and the executive compensation committee.
(x) other matters
Share option cancellation plan of the company in 2019 1
Among the incentive objects first granted by the company’s 2019 stock option incentive plan, some incentive objects have resigned, retired or changed their positions to supervisors, and the first exercise period of the first granted stock option fails to meet the exercise conditions. The company cancels some options of the stock option incentive plan this time, which is in line with the company’s 2019 stock option incentive plan, the company’s 2019 stock option incentive plan implementation assessment management measures and other relevant provisions, The decision-making procedures are legal and compliant, and will not have a material impact on the company’s financial status and operating results, and there is no situation that damages the interests of the company and all shareholders.
It is agreed that the company will cancel part of the stock options first granted by the 2019 stock option incentive plan.
2. About adding directors
After reviewing the resumes and relevant materials of director candidates submitted by the ninth board of directors, we believe that the qualification of director candidates meets the relevant provisions of the company law and the articles of association, and has the ability and qualifications to perform relevant duties; There is no situation that it is not suitable to serve as a director of the company as stipulated in the company law and the articles of association, nor is it recognized as a market entrant by the China Securities Regulatory Commission, and the entry has not been terminated. Upon examination, the deliberation and voting procedures of the directors of the company added this time comply with the relevant provisions of the company law and the articles of association, and are legal and effective. Agree to add Mr. Tang Lei as a director of the company and submit it to the general meeting of shareholders of the company for deliberation.
3. Changes in accounting policies
During the reporting period, the change of the company’s accounting policy is a reasonable change in accordance with the interpretation of accounting standards revised and issued by the Ministry of finance, which complies with relevant regulations. The implementation of the change of accounting policy can objectively and fairly reflect the company’s financial status and operating results, will not have an impact on the company’s financial statements, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. The decision-making procedure of this accounting policy change complies with the provisions of relevant laws and regulations, and the change of the company’s accounting policy is agreed. 4. Proposal on amending some articles of the articles of Association
The amendment of the relevant provisions of the articles of association made by the board of directors of the company is a reasonable amendment based on the increase of registered capital after the completion of the company’s non-public offering of shares, in line with the relevant provisions of the guidelines for the articles of association of listed companies and the relevant authorization of the general meeting of shareholders; The amendment to the articles of association does not harm the interests of the company and its shareholders, so we agree to this amendment.
5. Proposal on using the raised funds to replace the self raised funds and issuance expenses invested in the raised investment projects in advance
The board of directors of the company’s opinions on the use of raised funds to replace projects invested in raised funds in advance
