Zheshang Securities Co.Ltd(601878)
About Zhejiang Reclaim Construction Group Co.Ltd(002586)
Issuing shares and paying cash to purchase assets and raising matching funds and related party transactions
Verification opinions on the achievement of performance commitments and asset impairment test of the target company
Zheshang Securities Co.Ltd(601878) (hereinafter referred to as "independent financial consultant" and " Zheshang Securities Co.Ltd(601878) ") as an independent financial consultant for Zhejiang Reclaim Construction Group Co.Ltd(002586) (hereinafter referred to as "company", "listed company", "Waihai shares") to issue shares, pay cash to purchase assets, raise supporting funds and related party transactions, in accordance with the measures for the administration of major asset restructuring of listed companies, the measures for the administration of financial consulting business of mergers and acquisitions of listed companies and other relevant provisions, The performance commitment and impairment test of the target company Shanghai Millennium Urban Planning Engineering Design Co., Ltd. (hereinafter referred to as "Millennium design") have been verified, and the verification opinions are as follows:
1、 Basic information of this reorganization
With the approval of the reply on approving Zhejiang Reclaim Construction Group Co.Ltd(002586) to issue shares to Shanghai Millennium Engineering Investment Management Co., Ltd. to purchase assets and raise supporting funds (zjxk [2018] No. 676) issued by China Securities Regulatory Commission, Waihai Co., Ltd. issued shares to Shanghai Millennium Engineering Investment Management Co., Ltd. (hereinafter referred to as "Millennium Investment"), Zhong Chengrong Wang Yongchun and other 31 counterparties issued shares and paid cash to purchase 8822975% equity of Millennium design.
The company purchased 8822975% equity of Millennium design from the counterparty by issuing shares and paying cash. According to the asset appraisal report issued by the appraisal institution and through negotiation between the two parties, the transaction target was priced at 1429322000 yuan.
As of May 16, 2018, 8822975% equity of Millennium design has been transferred to the company.
2、 Performance commitment and compensation arrangement
(I) performance commitment
According to the profit compensation agreement signed by the listed company and the performance commitment parties Millennium Investment, Zhong Chengrong, Wang Yongchun, Luo Xiang and Tang Lei, the performance commitment period of this restructuring is 2017, 2018 and 2019, and the counterparty promises that the net profit of the target company (net profit attributable to shareholders of the parent company after deducting non recurring profits and losses) in 2017, 2018 and 2019 will not be less than RMB 96 million respectively 126 million yuan, 160 million yuan. If at the end of each fiscal year during the performance commitment period, if the cumulative actual net profit of Millennium design as of the end of the current period is less than the cumulative committed net profit as of the end of the current period, the counterparty shall compensate the company according to the agreement.
(II) performance commitment compensation arrangement
1. At the end of each fiscal year during the performance commitment period, the listed company shall employ an audit institution with securities and futures business qualification to issue special audit opinions on the profitability of the target company in 2017, 2018 and 2019 based on the annual report, and maintain the accounting principles consistent with this reorganization, and the expenses shall be borne by the listed company. If, according to the above special review opinions, the accumulated actual net profit of Millennium design as of the end of the current period is less than the accumulated committed net profit as of the end of the current period, the listed company shall notify the performance commitment party in writing of the calculation results within 5 working days after calculating the net profit difference according to the provisions of this article, and the performance commitment party shall compensate the listed company according to the proportion of consideration obtained in this transaction, The performance commitment party shall first compensate with the shares of the sea reclamation shares it holds. If the stock compensation is insufficient, it shall compensate in cash. 2. After the expiration of the performance commitment period, the listed company will also hire an audit institution with securities and futures business qualification to conduct impairment test on the Millennium design and issue special audit opinions on the impairment test results. If the scheduled final value reduction is greater than the total amount compensated within the compensation period, the performance commitment party will compensate for the difference between the ending impairment and the total amount compensated within the compensation period. (the amount of impairment refers to the transaction price of the target company minus the evaluation value of the target company at the end of the period, and deducting the impact of capital increase, capital reduction, gift acceptance and profit distribution of the target company within the compensation period.) (the selection of assessment assumptions, assessment basis and important assessment parameters used in the impairment test and assessment meet the asset assessment criteria, and there is no significant inconsistency with the asset assessment of this reorganization)
3、 Completion of performance commitments and impairment test in 20172019
(I) completion of performance commitments
According to the verification report on the completion of performance commitments of Shanghai Millennium Urban Planning Engineering Design Co., Ltd. (TJs [2018] No. 6284) issued by Tianjian Certified Public Accountants (special general partnership), the net profit attributable to the shareholders of the parent company in 2017 after deducting non recurring profits and losses was 1052647 million yuan, exceeding the commitment of 9.2647 million yuan.
According to the verification report on the completion of performance commitments of Shanghai Millennium Urban Planning Engineering Design Co., Ltd. (TJs [2019] No. 4854) issued by Tianjian Certified Public Accountants (special general partnership), the audited net profit of Millennium design in 2018 after deducting non recurring losses attributable to the shareholders of the parent company was 144411 million yuan, In 2017 and 2018, the audited net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses was 249675700 yuan, which exceeded the cumulative commitment of 222 million yuan by 27675700 yuan.
According to the verification report on the completion of performance commitments of Shanghai Millennium urban planning and Engineering Design Co., Ltd. (xksbz [2022] No. za12009) issued by Lixin Certified Public Accountants (special general partnership), the audited net profit of Millennium design in 2019, after deducting extraordinary profits and losses, attributable to the shareholders of the parent company was 1826529 million yuan. In 2017 In 2018 and 2019, the audited net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses was RMB 432328600, exceeding the cumulative commitment of RMB 382 million by RMB 50328600.
(II) impairment test
According to the audit report on the asset impairment test report of Zhejiang Reclaim Construction Group Co.Ltd(002586) major asset restructuring performance commitment period expired (xksbz [2022] No. za12010) issued by Lixin Certified Public Accountants (special general partnership), as of December 31, 2019, the assessed value of all equity of Millennium design shareholders was 1799096100 yuan, corresponding to 8822975% equity value of 158733800 yuan, Higher than its transaction price of 1429322000 yuan, so the underlying assets of this transaction have not been impaired.
4、 Verification opinions of independent financial advisor
After verification, the independent financial adviser believes that the net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses realized by Millennium design in 2017, 2018 and 2019 exceeds the performance commitment level, and the audited net profit attributable to the shareholders of the parent company after deducting non recurring profits and losses from 2017 to 2019 also exceeds the cumulative performance commitment level, The performance commitment of the target company promised by the counterparty in 20172019 has been fully realized. As of December 31, 2019, the assessed value of the total equity value of Millennium design shareholders was 1799096100 yuan, corresponding to 8822975% equity value of 158733800 yuan, which was higher than its transaction price of 1429322000 yuan. Therefore, the underlying assets of this transaction were not impaired.
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