Citic Securities Company Limited(600030)
About Shanghai Kehua Bio-Engineering Co.Ltd(002022)
On site inspection report of continuous supervision in 2021
Abbreviation of the sponsored company: Shanghai Shanghai Kehua Bio-Engineering Co.Ltd(002022) engineering unit name of the sponsor: Citic Securities Company Limited(600030)
Co., Ltd
Name of sponsor representative: Shi Po Tel: 021 – 20262210
Name of sponsor representative: Hong Libin Tel: 010 – 60833043
Name of on-site inspector: Hong Libin, Shao Caijie, pan Yiqi corresponding period of on-site inspection: 2021
On site inspection time: December 30, 2021
1、 On site inspection items and opinions
Discomfort (I) whether corporate governance
use
On site inspection means:
Obtain the latest revised current governance rules and relevant internal control systems of the company, verify the company’s basic systems such as the articles of association, the rules of procedure of the general meeting of shareholders, the board of directors and the board of supervisors, and consult the resolutions and records of the general meeting of shareholders, the board of directors and the board of supervisors; Learn about the implementation of the company’s basic systems from the personnel of relevant departments of the company, the diligence and changes of the directors, supervisors and senior managers in performing their duties, the changes of the shares held by the controlling shareholders and the compliance of the controlling shareholders with relevant laws and regulations.
Obtain the company’s organization chart, periodic reports and relevant system documents; Understand whether there are situations affecting the independence of the company and its affiliated enterprises in terms of personnel, assets, finance, institutions and business; Understand the basic business conditions of corporate governance and check whether there are violations such as horizontal competition and obviously unfair related party transactions. Obtain the company’s internal audit system and the internal audit report issued by the internal audit department, and verify the articles of association, foreign investment management system, the resolutions of the board of directors related to investment decisions and the company’s foreign investment transactions.
1. Whether the articles of association and corporate governance system are complete and compliant
2. Whether the articles of association and the rules of the third board of directors have been effectively implemented is
3. Whether the minutes of the third meeting are complete, and whether the time, place, attendees and meeting are correct
Whether the content and other elements are complete, and whether the meeting materials are preserved completely
4. Whether the resolution of the third meeting is signed and confirmed by the relevant personnel attending the meeting yes
5. Whether the directors, supervisors and senior managers of the company perform their duties in accordance with relevant laws, administrative regulations, departmental rules, normative documents and relevant business rules of the exchange 6 If the directors, supervisors and senior managers of the company have made significant changes, have they fulfilled the corresponding procedures and information disclosure obligations
7. If the controlling shareholder or actual controller of the company changes, whether it has fulfilled the inappropriate corresponding procedures and information disclosure obligations
8. Whether the company’s personnel, assets, finance, organization, business and other aspects are independent or not
9. Whether there is no horizontal competition between the company and the controlling shareholder and the actual controller is
(II) on site inspection means of internal control:
Obtain the latest revised current governance rules and relevant internal control systems of the company, obtain the company’s internal audit system and the internal audit work report issued by the internal audit department, verify the company’s internal control work, and learn from relevant personnel about the work of the company’s internal audit department and the implementation of relevant systems. Review the newly revised articles of association, foreign investment management system, resolutions of the board of directors related to investment decisions and the company’s foreign investment transactions; Check with the personnel of relevant departments of the company to find out whether there are situations affecting the independence of the company and its affiliated enterprises in terms of personnel, assets, finance, institutions, business, etc; Understand the basic business situation and development plan of corporate governance, and check whether there are violations such as horizontal competition and obviously unfair related party transactions. 1. Whether the internal audit system and internal audit department are established in accordance with relevant regulations 2 Whether the internal audit system and internal audit department are established within 6 months after the listing of shares
3. Whether the personnel composition of the internal audit department and the audit committee is compliant
4. Whether the audit committee meets at least once a quarter to consider the work plans and reports submitted by the internal audit department 5 Whether the audit committee reports to the board of directors at least once a quarter is the progress, quality and major problems found in the internal audit. 6 Does the internal audit department report to the audit committee at least quarterly
7. Implementation of the audit work plan of the Department and problems found in the internal audit work Does the internal audit department audit the deposit and use of raised funds at least once a quarter 8 Whether the internal audit department submits the internal audit work plan for the next year to the audit committee within two months before the end of each fiscal year 9 Whether the internal audit department submits the annual internal audit report to the audit committee within two months after the end of each fiscal year 10 Whether the internal audit department submits the internal control evaluation report to the audit committee at least once a year 11 Whether a complete and compliant internal control system has been established for matters such as venture capital, entrusted financial management and hedging business (III) on site inspection means of information disclosure:
Obtain the latest revised information disclosure management system, insider registration management system and other systems and information disclosure documents of the company, and consult the record of investor relations activities. Check the shares held by the directors, supervisors and senior managers of the company and their changes; Extract the company’s insider information announcement and relevant documents, and obtain the insider of the company’s insider information and relevant information disclosure materials at key time points.
1. Is the disclosed announcement consistent with the actual situation
2. Whether the contents disclosed by the company are complete or not
3. Whether the disclosed matters of the company have not undergone significant changes or made important progress
4. Whether there are no major matters that should be disclosed but not disclosed
5. Whether the transmission, disclosure process and confidentiality of major information comply with the relevant provisions of the company’s information disclosure management system 6 Whether the investor relations activity record form is published on the interactive website of the exchange in time is (IV) an on-site inspection means for the establishment and implementation of a long-term mechanism to protect the company’s interests from infringement:
Obtain the company’s related party transaction management system, external guarantee management system and other relevant internal regulations of the company; Search the relevant reports of major media on the company, its controlling shareholders and actual controllers.
Get Association
List of related parties, transaction materials of related parties and details of capital transactions of related parties; Learn about the company’s related party transactions and the implementation of related party transaction management system from the personnel of relevant departments of the company, and understand the legal compliance of related party transactions of the company. 1. Whether a system has been established to prevent controlling shareholders, actual controllers and their affiliates from directly or indirectly occupying the funds or other resources of the listed company 2 Whether the controlling shareholders, actual controllers and their affiliates do not directly or indirectly occupy the funds or other resources of the listed company 3 Whether the review procedures of related party transactions are compliant and fulfill the corresponding information disclosure obligations
4. Is the price of related party transactions fair
5. Whether there is no related party transaction that is not related
6. Whether the external guarantee review procedures are compliant and fulfill the corresponding obligation of information disclosure 7 Whether the guaranteed party does not suffer from deterioration of its financial status, failure to pay off the guaranteed debt at maturity, etc
8. If the guaranteed debt continues to provide guarantee after maturity, has the inappropriate approval procedures and disclosure obligations been performed again
(V) on site inspection means for the use of raised funds:
Obtain the company’s raised funds management system and the relevant three meeting documents for formulation and approval. Continuously obtain the account of raised funds and check the use of raised funds. Obtain the tripartite agreement on the deposit of raised funds and relevant meeting approval documents, obtain the bank statement of the special account for raised funds, and spot check the large amount payment voucher and original voucher of raised funds; Understand the specific direction and compliance of the use of raised funds.
1. Whether the tripartite supervision agreement is signed within one month after the raised funds are in place
2. Whether the three-party supervision agreement for raised funds is effectively implemented
3. Whether the raised funds are not occupied by a third party or entrusted for financial management in violation of regulations 4 Whether there are no situations such as changing the purpose of raised funds without fulfilling the review procedures, temporarily replenishing working capital, replacing pre investment, changing the implementation location, etc
5. Use idle raised funds to temporarily supplement working capital, change the investment direction of raised funds to permanently supplement working capital, or use over raised funds to supplement working capital
yes
6. Whether the company has not made venture capital investment during the commitment period in case of payment or repayment of bank loans Whether the use of raised funds is consistent with the disclosed situation, and whether the project progress and investment benefits are consistent with the prospectus
7. Whether there are no major risks during the implementation of the project with raised funds
(VI) on site inspection means of performance:
Obtain the company’s financial performance materials and conduct financial report analysis; Understand the company’s financial situation from the personnel of the company’s financial department.
1. Is there any significant fluctuation in performance
Discomfort 2 Is there a reasonable explanation for the large fluctuation of performance
3. Compared with comparable companies in the same industry, whether there is no obvious abnormality in the company’s performance is (VII) the on-site inspection means of the company and shareholders’ commitment performance:
Obtain the commitment documents made by the company and its shareholders, actual controllers, directors, supervisors and senior managers, check the relevant materials corresponding to the commitment terms, and understand the commitment performance and relevant information disclosure.
1. Whether the company has fully fulfilled relevant commitments yes
2. Whether the company’s shareholders have fully fulfilled relevant commitments is
(VIII) on site inspection means for other important matters: obtain relevant system documents of the company and consult the company’s public information disclosure documents.
1. Whether the cash dividend system has been fully implemented and truthfully disclosed is
2. Whether the provision of financial assistance is legal and compliant and truthfully disclosed is true
3. Whether there is real transaction background and reasonable reasons for large capital transactions
4. Whether there is no significant change or risk in the process of major investment or performance of major contract
5. Is there no significant change or risk in the company’s production and operation environment
6. Has the company’s problems found by the early-stage regulators and sponsors been rectified according to the relevant requirements
2、 Problems found in site inspection and description
1. On December 25, 2021, the company received the reply to your letter on the preliminary audit of the group’s annual report and the letter on the request to cooperate with the annual audit of listed companies from Xi’an Tianlong Technology Co., Ltd. and Suzhou Tianlong Biotechnology Co., Ltd., the holding subsidiaries, which were unable to cooperate with the preliminary audit of Shanghai Kehua Bio-Engineering Co.Ltd(002022) accounting statements and subsequent audit work. In order to ensure the legitimate rights and interests of the listed company and all shareholders and promote the proper settlement of the audit of the financial report of Tianlong company in 2021, the company will continue to take the following main measures: (1) the board of directors of Tianlong company deliberated and adopted the proposal on requiring cooperation with the annual audit of listed companies on December 27, 2021. The company will require the directors, senior managers, chief financial officer, financial department and relevant parties of Tianlong company to fully implement the resolutions of the board of directors; (2) The company will continue to actively exercise the management rights of the listed company over its holding subsidiaries, urge and require Tianlong company and its directors, senior managers, financial departments and relevant parties to strictly perform their respective responsibilities and obligations, and cooperate with Lixin accountant to carry out and complete the audit of Tianlong company’s financial report in 2021; (3) The company will continue to actively communicate with competent departments at all levels, obtain the support and help of relevant competent departments, and promote the proper solution of relevant problems as soon as possible; (4) The arbitration applicant, directors, senior managers, relevant responsible persons of the financial department and relevant
