About Guangdong Yuehai feed Group Co., Ltd
Initial public offering and listing
of
Issuance and recommendation work report
December, 2001
Statement
First Capital Securities Co.Ltd(002797) securities underwriting and recommendation Co., Ltd. (hereinafter referred to as “Yichuang investment bank”, “the sponsor” and “the sponsor”) is entrusted by Guangdong Yuehai feed Group Co., Ltd. (hereinafter referred to as “the company”, “the issuer” and “Yuehai feed”) to act as the sponsor for its initial public offering and listing.
The recommendation institution and the designated recommendation representative have complied with the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”), the measures for the administration of recommendation business for securities issuance and listing (hereinafter referred to as the “measures for the administration of recommendation business”) and other relevant laws Laws and regulations and relevant provisions of the China Securities Regulatory Commission (hereinafter referred to as “CSRC” and “CSRC”), be honest, trustworthy, diligent and responsible, issue this issuance recommendation work report in strict accordance with the business rules, industry practice norms and ethical standards formulated according to law, and ensure the authenticity, accuracy and integrity of the documents issued.
Unless otherwise specified in this offering recommendation report, relevant terms have the same meaning as in the prospectus for initial public offering of shares of Guangdong Yuehai feed Group Co., Ltd. (application draft).
catalogue
Declare that 1 catalog Section 1 project operation process three
1、 The internal audit process of the recommendation institution three
2、 Main process of project approval seven
3、 Main process of project implementation seven
4、 Internal verification of the sponsor twelve
5、 The review process of the sponsor’s core Committee twelve
6、 Internal audit procedures after initial declaration 12 section II problems existing in the project and their solutions thirteen
1、 Opinions and deliberations of members of the project initiation review meeting thirteen
2、 Main problems found by the project team in the process of due diligence and their solutions or implementation thirteen
3、 Main issues concerned by the quality control department and their implementation sixty-six
4、 Main issues, opinions and implementation discussed by the nuclear Committee Section III verification of the issuer’s financial situation and profitability seventy-four
1、 Verification of the issuer’s financial and accounting information seventy-four
2、 Verification on matters related to the issuer’s profitability Section IV professional opinions issued by relevant securities service institutions Section V verification of the registration and filing of the issuer’s private investment fund shareholders seventy-eight
1、 Composition of shareholders of the issuer seventy-eight
2、 Private investment funds among the issuer’s shareholders seventy-eight
3、 Filing and registration of the issuer’s private investment fund shareholders and their managers eighty
4、 Verification opinion Section VI main operating conditions of the issuer after the audit deadline of the financial report 81 Section VII other matters to be explained eighty-two
Annex: checklist on due diligence on important matters of sponsor projects eighty-four
Section I project operation process
1、 Internal audit process of the recommendation institution
In accordance with the securities law, the guidelines on internal control of securities companies, the measures of the issuance Audit Committee of the China Securities Regulatory Commission, the measures for the administration of securities issuance and listing recommendation business, the measures for the administration of the acquisition of listed companies, the measures for the administration of major asset restructuring of listed companies and other relevant regulations on the issuance and listing of securities and the acquisition of listed companies The requirements for securities companies to engage in relevant businesses in laws and regulations such as major asset restructuring. At the same time, in order to improve the quality of investment banking business, the sponsor has formulated a practical business management system. The internal audit process of the project includes three stages: project initiation audit, project implementation audit and audit by the core Committee. (I) project initiation review
In accordance with the work guidelines for the business development committee of First Capital Securities Co.Ltd(002797) securities underwriting and recommendation Co., Ltd., the recommendation institution establishes a business development committee to be responsible for the project review and management of investment banking projects. The business development committee is chaired by the general manager of the company or a person designated by the general manager, and is composed of senior investment banking business personnel, senior capital market personnel and relevant personnel of the internal control department designated by the chairman of the business development committee.
1. Project initiation process
(1) After signing the confidentiality agreement (if necessary), the project team shall conduct project initiation due diligence and start internal procedures such as conflict of interest review and customer basic information collection as soon as possible;
(2) After completing the project initiation due diligence, the project team shall fill in the application report of the business development committee and submit the project initiation application to the quality control department;
(3) After the project is approved by the business development committee and the person in charge of project implementation is determined, the reporting documents shall be submitted to the person in charge of investment banking department, the person in charge of customer relations and the director of quality control department within two weeks. The reporting documents include: project schedule, product scheme (including but not limited to issuance scheme, reorganization scheme, restructuring scheme, etc.).
2. Main procedures of business development committee meeting
(1) The customer relationship leader or his designated personnel shall briefly introduce the items to be reviewed. The project introduction mainly includes the basic information of customers and industries, the description of sustainable profitability or solvency, the project schedule, the important problems found in the project initiation due diligence and other important information that needs to be understood by the members of the business development committee;
(2) Members of the business development committee raised questions about the project and discussed the key issues involved in the project establishment;
(3) Members of the business development committee may propose to suspend the voting if they believe that there are major problems in the project that have yet to be investigated and verified and affect the clear judgment. The meeting of the business development committee shall first vote on whether it is necessary to suspend the voting. If more than half of the votes cast are suspended, the members of the project team shall conduct further due diligence according to the opinions of the meeting of the business development committee, and then submit the application to the business development Committee in accordance with Article 14 of the work guidelines of the business development committee of First Capital Securities Co.Ltd(002797) securities underwriting and recommendation Co., Ltd. For the items whose voting is suspended for the first time, the second business development committee meeting must vote;
(4) Members of the business development committee shall vote on whether to establish a project. Each member participating in the meeting shall have one vote and is not allowed to abstain. If the project initiation application is approved by more than 2 / 3 (including 2 / 3) of the participants, it shall be deemed to be passed; Otherwise, it shall be deemed as rejection. Members who cannot attend the meeting for special reasons may vote by means of communication. Such voting documents and communication voting documents shall be filed by the support personnel of the business development committee.
(II) project execution audit
According to the working rules of the project supervision and Implementation Committee of First Capital Securities Co.Ltd(002797) securities underwriting and recommendation Co., Ltd., the recommendation institution establishes the project supervision and Implementation Committee. The project supervision and Implementation Committee is the technical advisory body for the daily operation of the investment banking business of the recommendation institution, which is mainly responsible for the comprehensive technical advisory support and quality supervision of the project implementation process of the investment banking department.
The members of the project supervision and Implementation Committee are composed of the director of enterprise financing, the director of quality control department, several sponsor representatives within the company and senior investment banking business personnel. Among them, the director of enterprise financing is the chairman of the project supervision and Implementation Committee. The members of the project supervision and Implementation Committee shall be nominated by the chairman of the project supervision and Implementation Committee and approved by the general manager of the company.
The main procedures of the project supervision and Implementation Committee in the implementation stage are as follows:
(1) The director of the quality control department shall appoint an auditor of the quality control department for the project to be responsible for long-term tracking and daily consultation after the project is approved.
(2) During the project implementation, the project supervision and Implementation Committee meeting can be held if:
① In case of key issues or major problems encountered in the project, the project implementation leader shall propose to the project supervision and Implementation Committee for convening; ② When the head of investment banking department and the head of customer relationship consider it necessary; ③ When the chairman and vice chairman of the project supervision and Implementation Committee consider it necessary.
(3) After the chairman of the project supervision and Implementation Committee agrees to convene the meeting of the project supervision and Implementation Committee, the quality control department shall send a written notice to convene the meeting. The chairman of the project supervision and Implementation Committee may also invite a number of other professionals and senior managers of the company to participate as needed. At least 1 / 2 (including 1 / 2) members of the project supervision and Implementation Committee can participate in each meeting, and at least 1 vice chairman can participate.
(4) The person in charge of the project site shall submit the meeting documents to the chairman of the project supervision and Implementation Committee by e-mail at least 3 working days before the technical seminar of the project supervision and Implementation Committee, and copy them to the quality control department. The meeting documents shall specify the background, laws, regulations and policy requirements, comparable case analysis, etc. of the matters to be discussed. (5) After the technical discussion meeting of the project supervision and Implementation Committee, the quality control department will send the meeting discussion results to the members and participants in the form of meeting minutes, and copy them to the project team, quality control department and kernel team. (III) internal audit process
1. Internal verification procedures for initial declaration and performance
(1) Internal audit procedures performed by quality control department
The quality control department is responsible for formulating business systems and implementation processes, and is responsible for the whole process tracking and quality control of investment banking projects.
After the project passes the project approval, the auditor of the quality control department designated by the director of the quality control department shall carry out technical consultation and implementation process management and control on the daily implementation of the project.
The pre qualification process implemented by the quality control department is as follows:
① After the project team completes the preparation of application materials and the acquisition and collection of working papers at the stage of on-site due diligence, it shall apply to the quality control department for project pre review and acceptance of working papers. Relevant application emails shall be copied to the kernel team at the same time.
② The quality control department shall check the completeness of the prequalification application documents. After ensuring that the application documents are complete, the reviewers designated by the director of the quality control department shall complete the review of the application documents, on-site verification, draft verification and issue on-site verification reports within the specified time.
③ The reviewers of the quality control department shall report the preliminary review opinions to the director of the quality control department. After the approval of the director of the quality control department, the preliminary review opinions shall be sent to the project team and copied to the compliance department and risk management department.
④ After the director of the quality control department has no objection to the reply of the preliminary review comments submitted by the project team, the quality control department shall organize and convene the project preliminary review meeting to preliminarily review and discuss the project materials. The pre-trial meeting shall be attended by the enterprise financing director, the director of the quality control department, the auditors of the quality control department, the head of the compliance department, the kernel specialist and the members of the project team;
⑤ The project team shall implement relevant major problems or uncertainties according to the opinions of the pre-trial meeting and modify relevant materials, which shall be confirmed by the quality control department. At the same time, after the acceptance of the working paper in the on-site due diligence stage of the project, the quality control department shall summarize the key issues of pre-trial and the acceptance opinions of the working paper, issue a quality control report, and submit the application of the core committee to the compliance core department.
(2) Kernel program
The company also establishes permanent and non permanent core institutions to perform the core deliberation and decision-making responsibilities for investment banking business. The compliance kernel Department has a kernel team (hereinafter referred to as “kernel team”) as a permanent kernel organization, and the investment banking kernel Committee (hereinafter referred to as “kernel committee”) as a non permanent kernel organization.
The application process for the meeting of the company’s equity project approval committee is as follows:
① The project team shall apply to the quality control department for quality control pre review and acceptance of working papers, and relevant application documents shall be copied to the core team at the same time; At this time, the person in charge of the kernel appoints a Commissioner to take charge of the project (hereinafter referred to as the “kernel commissioner”), and can also appoint an investment bank staff with rich experience in relevant products to act as a part-time auditor of the project and review the relevant application documents in writing.
② After the project passes the quality control preliminary review and the acceptance of working papers, with the consent of the director of the quality control department, the quality control department will apply for the project quality control report and the meeting of the nuclear committee to be submitted to the nuclear team.
③ After receiving the complete kernel application materials, the kernel specialist and part-time reviewers of the project shall review the project quality control report and kernel application documents, and issue the kernel audit opinions within 3 working days. The project team shall reply to the audit opinions of the kernel in time.
④ After the kernel team has no objection to the reply of the kernel audit opinion, the kernel team organizes a project review meeting.
⑤ The kernel team shall organize and hold the meeting of the kernel Committee after confirming that the relevant questions asked by the kernel Committee have been implemented, the relevant compliance procedures have been completed, and the consent of the kernel person in charge has been obtained.
⑥ Before the meeting of the nuclear Committee, the nuclear committee members shall submit the review opinions on the meeting materials to the head of the nuclear committee by email or in writing, and copy them to the nuclear team, quality control department and risk management department.
All members of the core Committee participating in the voting shall have the right to vote in bidding, and each member shall have one vote. When the number of votes agreed to declare reaches more than 2 / 3 (including 2 / 3) of the total votes held by the members of the kernel Committee participating in the voting, it shall be deemed to agree to declare, otherwise it shall be deemed that the kernel committee does not agree to declare items. If the voting opinion of the members of the approval committee disagrees with the declaration, the reasons for disagreeing with the declaration shall be clearly stated in their voting opinion.
Valid kernel voting shall at least meet the following conditions:
① The number of members participating in the meeting shall not be less than 7;
② The number of members from internal control departments such as quality control department, compliance department and risk management department shall not be less than 1 / 3 of the total number of members participating in the meeting;
③ At least one compliance officer shall participate in the voting and voting.
2. Internal audit procedures performed after initial declaration
According to the relevant systems approved by the sponsor, the project shall perform the following internal audit procedures for the updated materials of the annual report, the reply to the feedback of the CSRC and the updated materials of the semi annual report in accordance with the relevant provisions of these systems:
① Internal audit procedures performed by the quality control department: during the audit stage of the project by the regulatory authority, the quality control department shall conduct a written audit of the above documents before submission or disclosure. The audit matters include whether the relevant opinions and recommended documents are fully based and whether the due diligence working papers are complete.
② Core procedure: in the review stage of the regulatory body, the materials and documents other than the collective review procedure of the nuclear committee meeting shall be submitted, submitted, issued or disclosed by the nuclear team after written review. 2、 Main process of project approval
On May 8, 2020, the project executive of the sponsor submitted the application report for the establishment of the counseling and consulting project of Guangdong Yuehai feed Group Co., Ltd. to the business development committee; On May 11, 2020, the sponsor held a business development committee to discuss whether the project should be approved, which was discussed and agreed by the participating members
