Report of the
Supervisory Committee

Report of the Supervisory Committee

During the Reporting Period, all members of the supervisory committee of the Company (the “Supervisory Committee”) have complied with the principle of integrity and earnestly performed their supervisory duties in accordance with the relevant regulations set out in the PRC Company Law, the Articles of Association and Rules of Procedures for the Supervisory Committee of the Company to protect the interests of the shareholders and the Company.

Works of The Supervisory Committee During the Reporting Period

For the year 2020, the Supervisory Committee held three meetings and the details are as follows:

On 29 March 2020, the fifth meeting of the fourth session of the Supervisory Committee was convened to consider and approve the “Report of the Supervisory Committee of 2019”, “2019 Annual Results” and “Resolution on Determination of 2020 Remuneration of Supervisors of the Fourth Session of the Supervisory Committee”.

On 21 August 2020, the sixth meeting of the fourth session of the Supervisory Committee was convened to consider and approve the “2020 Interim Results” and “Resolution on the Election of the External Supervisor of the Fifth Session of the Supervisory Committee”.

On 18 September 2020, the first meeting of the fifth session of the Supervisory Committee was convened to consider and approve the “Resolution on the Election of the Chief Supervisor of the Fifth Session of the Supervisory Committee of the Company” and “Resolution on Determination of Remuneration of Supervisors of the Fifth Session of the Supervisory Committee of the Company”.

Comments of The Supervisory Committee on Certain Matters of the Company in 2020

During the Reporting Period, the members of the Supervisory Committee adhered to the principles of fidelity and accountability to all shareholders and duly performed their duties and works according to the relevant laws and regulations. The Supervisory Committee worked actively, supervised the regulatory compliance and operation, financial condition, use of proceeds and internal control, etc. of the Company through attending shareholders’ general meetings and board meetings as non-voting delegates and onsite inspections. The Supervisory Committee has arrived at the following opinions:

  • Regulatory compliance of the operation of the Company. During the Reporting Period, the Board earnestly exercised the rights and performed the obligations conferred by the PRC Company Law and the Articles of Association to make decisions in time on material matters including production and operation plans and development objectives, and implemented all resolutions adopted by the shareholders’ general meetings and board meetings.
  • Evaluation of financial condition of the Company. During the Reporting Period, the Supervisory Committee has supervised and reviewed the financial structure and position of the Company. The Supervisory Committee is of the opinion that the financial structure of the Company was healthy and standardized and the Company was in a good financial position. The 2020 Audit Report of the Company has truly, accurately and completely reflected the financial condition, results of operation and cash flows of the Company.
  • The use of funds raised by the Company. The Supervisory Committee is of the opinion that the use of proceeds complied with the provisions of relevant laws and regulations and the Articles of Association without violating the interests of the Company and its shareholders. The Supervisory Committee will continue to supervise and monitor the use of proceeds.
  • Acquisition and disposal of assets of the Company. The acquisitions and disposals of the assets of the Company during the Reporting Period were based on fair and reasonable prices. No insider dealing or any action that may injure shareholders’ interests or cause any loss of assets of the Company has been found.
  • Connected transactions of the Company. During the Reporting Period, the connected transactions between the Company and all connected persons conformed to applicable regulations of the Hong Kong Stock Exchange. The connected transactions were based on fair and reasonable prices and were carried out in accordance with the principles of reasonableness, fairness and justice. No harm to the interests of the Company and unrelated shareholders has been found.
  • Preparation and review of annual report of the Company. The preparation and review procedures of the 2020 annual report of the Company conformed to all the relevant regulations of the Hong Kong Stock Exchange and relevant regulators. No breach of confidentiality provisions by any person involved in the preparation or review of annual report has been found.

In the coming year, the Supervisory Committee will continue to arduously perform its supervisory and monitoring duties with an aim to strengthen the overall competitiveness and sustainable profitability of the Company and to protect the interests of shareholders and the Company.

Wu Yifang
Chief Supervisor

Shanghai, the PRC
19 March 2021

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