Securities Code: 000530; 200530 Securities Abbreviation: Bingshan Refrigeration & Heating; Bingshan B Announcement No.: 2022-040

 

Iceberg Cold & Heat Technology Co., Ltd.

Announcement of Resolutions Adopted at the Eighth Meeting of the Ninth Board of Directors

 

The Company and all members of the Board of Directors hereby warrant that the information disclosed is true, accurate, and complete, and contains no false records, misleading statements, or material omissions.

 

I. Status of Board Meetings

1. Notice of this Board of Directors meeting was issued in writing on September 19, 2022.

2. This board meeting was held on September 26, 2022, by way of written resolution.

3. Nine directors were required to vote, and all nine directors actually voted.

4. The convening of this board meeting complies with the provisions of applicable laws, administrative regulations, departmental rules, normative documents, and the Company’s Articles of Association.

II. Review of the Board Meeting

1. Deliberated and approved the “Proposal on the Compliance of the Company’s Current Major Asset Acquisition and Related-Party Transaction with Relevant Legal and Regulatory Requirements.”

The Company proposes to acquire, by way of cash payment, the respective equity interests in Panasonic Compressor (Dalian) Co., Ltd. (“Panasonic Compressor”) and Panasonic Refrigeration Systems (Dalian) Co., Ltd. (“Panasonic Refrigeration Systems”) from Sanyo Electric Co., Ltd. (hereinafter referred to as “Sanyo Electric”), Panasonic Appliances (China) Co., Ltd. (hereinafter referred to as “Panasonic China”), and Panasonic Cold Chain (Dalian) Co., Ltd. (hereinafter referred to as “Panasonic Cold Chain”) (collectively, the “Counterparties”) (hereinafter collectively referred to as the “Target Companies”) (hereinafter referred to as the “Current Major Asset Restructuring,” the “Current Restructuring,” or the “Current Transaction”).

In accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Measures for the Administration of Major Asset Restructuring of Listed Companies, and other applicable laws, regulations, departmental rules, and normative documents, and based on a self-examination and thorough deliberation of the Company’s actual operating conditions and the matters related to this proposed major asset acquisition and associated transaction, the Board of Directors is of the view that the proposed major asset acquisition and associated transaction complies with the relevant requirements and all substantive conditions stipulated in the aforementioned laws, regulations, and normative documents.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

2. Deliberated and approved, item by item, the “Proposal on the Plan for this Major Asset Acquisition and Related Party Transaction.”

The Company intends to acquire the respective equity interests in Panasonic Compressors and Panasonic Refrigeration Equipment by making cash payments to Sanyo Electric, Panasonic China, and Panasonic Cold Chain. The specific plan is as follows:

2.01 Transaction Overview

The Company proposes to acquire, by way of cash payment, a 60% equity interest in Panasonic Compressor from Sanyo Electric; a 30% equity interest in Panasonic Refrigeration from Panasonic China; and a 25% equity interest in Panasonic Cold Chain from Panasonic Cold Chain. This transaction constitutes a major asset restructuring and a related-party transaction, but does not constitute a backdoor listing. Prior to this transaction, the Company held a 40% equity interest in Panasonic Compressor and a 20% equity interest in Panasonic Refrigeration; upon completion of this transaction, the Company will directly or indirectly hold 100% equity interests in both Panasonic Compressor and Panasonic Refrigeration.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.02 Counterparty

The counterparties to this transaction are Sanyo Electric, Panasonic China, and Panasonic Cold Chain.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.03 Subject Asset

The assets subject to this transaction comprise a 60% equity interest in Panasonic Compressor held by Sanyo Electric, a 30% equity interest in Panasonic Refrigeration China held by Panasonic China, and a 25% equity interest in Panasonic Cold Chain held by Panasonic Cold Chain.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.04 Pricing Basis and Transaction Price

According to the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Compressor (Dalian) Co., Ltd. Involved in the Proposed Equity Acquisition by Bingshan Refrigeration Technology Co., Ltd.” (Zhonghua Pingbaozi [2022] No. 092) (“the Panasonic Compressor Asset Valuation Report”) and the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Refrigeration Systems (Dalian) Co., Ltd. Involved in the Proposed Equity Acquisition by Bingshan Refrigeration Technology Co., Ltd.” (Zhonghua Pingbaozi [2022] No. 093) (“the Panasonic Refrigeration Asset Valuation Report”), issued by Liaoning Zhonghua Asset Appraisal Co., Ltd. (hereinafter referred to as “Zhonghua Appraisal”), Zhonghua Appraisal, using May 31, 2022, as the valuation base date, conducted valuations of the target companies’ total shareholder equity using both the income approach and the asset-based approach. For the market value of the total shareholder equity of Panasonic Compressor, the income approach valuation result was adopted as the final valuation conclusion; for the market value of the total shareholder equity of Panasonic Refrigeration, the asset-based approach valuation result was adopted as the final valuation conclusion.

According to the “Asset Valuation Report on Panasonic Compressors” and the “Asset Valuation Report on Panasonic Chillers” issued by Zhonghua Appraisal, the market value assessment results for the shareholders’ equity of the target company are as follows:

Unit: ten thousand yuan

Project	Book value of net assets	Assessed value	Increase or decrease in value	Rate of increase or decrease
	A	B	C=B-A	D=C/A
Panasonic compressor 100% Equity	109,650.02	154,858.00	45,207.98	41.23%
Panasonic Refrigeration 100% Equity	13,319.94	14,860.92	1,540.98	11.57%

Following amicable negotiations between the Company and the counterparty, and based on the aforementioned valuation results, the transaction price for a 60% equity interest in Panasonic Compressor is RMB 929.148 million, while the transaction price for a 55% equity interest in Panasonic Refrigeration is RMB 81.7351 million, resulting in a total consideration of RMB 1,010.8831 million for all assets subject to this transaction.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.05 Consideration Payment Method and Payment Term

Pursuant to the Conditional Equity Transfer Agreement executed by the Company and the Counterparty, the Company shall, within 30 days after the issuance date of the new business license pertaining to this equity transfer, remit the agreed-upon consideration to the bank account designated by the Counterparty.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.06 Transitional Profit and Loss Arrangements

Pursuant to the Conditional Share Transfer Agreement for Panasonic Compressor (Dalian) Co., Ltd. executed between the Company and Sanyo Electric, any profits generated by Panasonic Compressor during the period from the valuation base date to the closing date shall be entitled to the Company, while any losses incurred shall be borne by Sanyo Electric in proportion to its equity interest in Panasonic Compressor held prior to this transaction. The amount of such profit or loss for the aforementioned period shall be audited and confirmed by an auditing institution, and Sanyo Electric shall, within 30 days from the date on which the auditing institution approves such amount, make full payment in cash directly to the Company.

Pursuant to the Conditional Share Transfer Agreement for Panasonic Refrigeration Systems (Dalian) Co., Ltd. entered into by the Company, Panasonic China, and Panasonic Cold Chain, any profits or losses generated by Panasonic Refrigeration from the valuation base date to the closing date shall be enjoyed by and borne by the Company.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.07 Transfer of Ownership of the Underlying Asset

Pursuant to the Conditional Share Transfer Agreement executed by the parties, the counterparty and the Company shall, within ten (10) business days after the Conditional Share Transfer Agreement becomes effective and the Company receives from the State Administration for Market Regulation a decision not to conduct further review, a decision not to prohibit, or a notice of approval for the withdrawal of the filing with respect to the concentration of undertakings involved in this restructuring, jointly effect the registration of the change. The share transfer shall be deemed complete on the date when the relevant registration authority has completed the registration of the change and the Target Company has obtained its new business license.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.08 Personnel Placement and Creditor-Debtor Settlement

This equity transfer does not involve any employee placement arrangements; the labor relationships between the target company and its employees shall remain unchanged as a result of this equity transfer. This equity transfer also does not entail the handling of any outstanding receivables or payables; prior to and following this equity transfer, all receivables and payables of the target company shall continue to be borne by the target company itself.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.09 Liability for Breach

Pursuant to the Conditional Equity Transfer Agreement executed by the parties, the liabilities for breach of contract are as follows:

Except in cases of force majeure, if a party to the contract breaches any obligation stipulated in the contract, such party shall compensate the other party for all losses incurred as a result of such breach. If the complying party, by written notice, demands that the breaching party remedy the breach, and the breaching party fails to do so within thirty (30) days, the complying party, in addition to its right to claim damages, shall also have the right to terminate the contract.

Where one party breaches the contract, any delay by the other party in pursuing liability for such breach or in submitting a proposed remedy shall not be deemed a waiver of the rights or remedies available under the contract.

If, prior to the completion of the closing of this equity transfer, the Company incurs any violations of laws or regulations that result in fines, late-payment penalties, or other administrative measures or sanctions imposed by competent authorities—including, but not limited to, the administration for industry and commerce, tax authorities, labor and social security authorities, and housing provident fund authorities—on or after the valuation base date, or if the Company is required to make retroactive payments of corresponding amounts, the Company and the counterparty shall each bear the respective losses (including, but not limited to, arbitration fees, notarization fees, and attorney’s fees) in proportion to their respective equity interests in the Target Company held prior to this transaction. The portion attributable to the counterparty shall be paid in cash to the Company within 30 days from the date such event occurs. However, the foregoing provisions of this clause shall apply only to circumstances discovered on or before December 31, 2023, that arose at the Target Company between January 1, 2020, and the closing date.

If the counterparty fails to cooperate with the target company in completing the relevant industrial and commercial change registration procedures for this transaction within the time stipulated in the contract for more than three days, the Company shall have the right to unilaterally terminate the Conditional Effective Equity Transfer Agreement and to claim compensation from the counterparty for all losses incurred as a result.

If the Company fails to pay the transfer consideration within the prescribed time limit and, after being urged by the Counterparty, still fails to make such payment within ten (10) days, the Company shall pay the Counterparty a default penalty at a rate of 0.05% per day on the overdue amount.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

2.10 Term of Validity of the Resolution

The resolution for this transaction shall be valid for a period of 12 months from the date of approval by the shareholders’ meeting.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

The aforementioned proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

3. Deliberated and approved the “Proposal on the Transaction Constituting a Related-Party Transaction”

The company intends to acquire a 60% equity interest in Panasonic Compressors by paying cash to Sanyo Electric; a 30% equity interest in Panasonic Refrigeration from Panasonic China; and a 25% equity interest in Panasonic Cold Chain from Panasonic Cold Chain.

Sanyo Electric holds an 8.72% equity interest in the Company and is thus an associated legal entity of the Company. Certain directors and supervisors of the Company and its controlling shareholder, Dalian Bingshan Group Co., Ltd., also serve as directors of Panasonic China, which is an associated legal entity of the Company. In addition, certain directors of the Company serve as directors of Panasonic Cold Chain, which is likewise an associated legal entity of the Company. Accordingly, this transaction constitutes a related-party transaction.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

4. Deliberated and approved the “Proposal on the Draft Report on the Major Asset Acquisition and Related Party Transaction of Bingshan Cold & Heat Technology Co., Ltd. and Its Summary.”

In accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Measures for the Administration of Major Asset Restructuring of Listed Companies, and Standard No. 26 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Major Asset Restructuring of Listed Companies, as well as other relevant laws, regulations, and normative documents, the Company has prepared the “Draft Report on the Major Asset Purchase and Related Party Transaction of Bingshan Cold & Heat Technology Co., Ltd.” and its summary with respect to this major asset purchase and related party transaction.

For details, please refer to the “Report on Major Asset Acquisition and Related Party Transaction of Bingshan Cold & Heat Technology Co., Ltd. (Draft)” and its summary, which were disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

5. Deliberated and approved the “Proposal on the Company’s Execution of the ‘Conditional Equity Transfer Agreement’”

To clearly define the rights and obligations of the Company, Sanyo Electric, Panasonic China, and Panasonic Cold Chain in connection with this transaction, the Company intends to enter into a Conditional Share Transfer Agreement with Sanyo Electric, Panasonic China, and Panasonic Cold Chain. The Conditional Share Transfer Agreement sets forth provisions regarding the target assets, the basis for pricing and the transaction price, the method and schedule of consideration payment, arrangements for profits and losses during the transitional period, the transfer of ownership of the target assets, employee placement and the handling of claims and liabilities, as well as liability for breach of contract, among other matters.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

6. Deliberated and approved the “Proposal on Whether This Transaction Complies with the Relevant Provisions of Article 11 of the Measures for the Administration of Major Asset Restructuring of Listed Companies and Is Not Subject to the Provisions of Articles 43 and 44.”

For details, please refer to the “Explanation by the Board of Directors on Whether This Transaction Complies with Article 11 of the Measures for the Administration of Major Asset Restructuring of Listed Companies and on the Non-Applicability of Articles 43 and 44” disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

7. Deliberated and approved the “Proposal on Whether This Transaction Complies with Article 4 of the Provisions on Several Issues Concerning the Standardization of Major Asset Restructurings of Listed Companies.”

For details, please refer to the “Explanation by the Board of Directors on the Compliance of This Transaction with Article 4 of the Provisions on Several Issues Concerning the Standardization of Major Asset Restructurings of Listed Companies,” which was disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

8. Deliberated and approved the “Proposal on the Fact that the Company’s Current Transaction Does Not Constitute a Reorganization Listed under Article 13 of the Measures for the Administration of Major Asset Restructuring of Listed Companies.”

For details, please refer to the “Explanation by the Board of Directors Regarding the Fact that the Company’s Current Transaction Does Not Constitute a Reorganization Listed under Article 13 of the Measures for the Administration of Major Asset Restructuring of Listed Companies,” which was disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

9. Deliberated and approved the “Proposal Regarding the Fact that the Parties Involved in This Transaction Do Not Fall Under Any of the Circumstances Prohibited from Participating in Major Asset Restructuring of Listed Companies pursuant to Article 13 of the Regulatory Guidance No. 7 for Listed Companies—Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies.”

For further details, please refer to the “Explanation by the Board of Directors Regarding the Absence of Any Circumstances Under Article 13 of Regulatory Guidance No. 7 for Listed Companies—Supervision of Abnormal Stock Trading in Connection with Major Asset Restructurings of Listed Companies—That Would Prohibit the Relevant Parties from Participating in Any Major Asset Restructuring of a Listed Company,” which was disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

10. Deliberated and approved the “Explanation on the Fact that the Fluctuation in the Stock Price of the Listed Company Has Not Reached the Relevant Standards Set Forth in Article 13 of Shenzhen Stock Exchange Self-Regulatory Guidance No. 8 for Listed Companies—Major Asset Restructuring.”

For details, please refer to the “Explanation by the Board of Directors on the Non-Accumulation of Stock Price Fluctuations of the Listed Company’s Shares Below the Relevant Thresholds Set Forth in Article 13 of Shenzhen Stock Exchange Self-Regulatory Guidance No. 8 for Listed Companies—Major Asset Restructuring,” which was disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

11. Deliberated and approved the “Proposal on the Completeness and Compliance of the Statutory Procedures for the Company’s Current Transaction and the Validity of the Submitted Legal Documents.”

For details, please refer to the “Explanation by the Board of Directors on the Completeness and Compliance of the Statutory Procedures for This Transaction and the Validity of the Submitted Legal Documents,” disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

12. Deliberated and approved the “Proposal on the Independence of the Valuation Agency, the Reasonableness of the Valuation Assumptions, the Relevance of the Valuation Methods to the Valuation Objectives, and the Fairness of the Valuation Pricing.”

For details, please refer to the “Explanation by the Board of Directors on the Independence of the Valuation Agency, the Reasonableness of the Valuation Assumptions, the Relevance of the Valuation Methods to the Valuation Objectives, and the Fairness of the Valuation Pricing,” which was disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

13. Deliberated and approved the “Proposal on the Dilution of the Company’s Immediate Returns from This Transaction and the Corresponding Measures to Replenish Such Returns.”

For details, please refer to the “Explanation by the Board of Directors on the Dilution of the Company’s Immediate Returns and Measures to Rectify Such Dilution in Connection with This Transaction,” disclosed on the same day.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

14. Deliberated and approved the “Proposal on Approving the Audit Report, Pro Forma Review Report, and Valuation Report Related to This Transaction”

For the purposes of this transaction, the Company engaged ShinWing Certified Public Accountants (Special General Partnership) to issue the “Audit Report on Panasonic Compressor (Dalian) Co., Ltd.” (XYZH/2022DLAA20219) and the “Audit Report on Panasonic Refrigeration Systems (Dalian) Co., Ltd.” (XYZH/2022DLAA20220) with respect to the target companies in this transaction, as well as the “Pro Forma Review Report for Bingshan Cold & Heat Technology Co., Ltd.” (XYZH/2022DLAA20221) concerning the Company itself. In addition, the Company retained Liaoning Zhonghua Asset Appraisal Co., Ltd. to prepare the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Compressor (Dalian) Co., Ltd. Involved in Bingshan Cold & Heat Technology Co., Ltd.’s Proposed Equity Acquisition” (Zhonghua Pingbao Zi [2022] No. 092) and the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Refrigeration Systems (Dalian) Co., Ltd. Involved in Bingshan Cold & Heat Technology Co., Ltd.’s Proposed Equity Acquisition” (Zhonghua Pingbao Zi [2022] No. 093).

The Company’s Board of Directors has approved the use of the aforementioned documents for disclosure in connection with this transaction and as part of the filing materials submitted to the regulatory authorities.

This proposal involves related-party transactions, and the related directors Ji Zhijian, Fan Wen, Tang Ye Mao, and Nishimoto Shigeyuki have recused themselves from voting.

Voting results: 5 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

15. Deliberated and approved the “Proposal on Applying to Banks for M&A Loans.”

Based on the Company’s current operating conditions and capital utilization plan, the Company intends to apply to banks for a merger and acquisition loan with a total amount not exceeding RMB 600 million, to be used to pay a portion of the consideration under this transaction. The lending bank, loan amount, loan term, and loan interest rate for the M&A loan shall be subject to bank approval and the final loan agreement to be executed; the specific amount to be utilized will be determined in accordance with the Company’s actual funding needs. The Board of Directors has approved authorizing the Chairman of the Company to sign the loan agreement and other related documents pertaining to this M&A loan.

Voting results: 9 votes in favor, 0 votes against, and 0 abstentions.

16. Deliberated and approved the “Proposal on Requesting the Shareholders’ Meeting to Authorize the Board of Directors to Handle All Matters Related to This Transaction”

In order to legally and efficiently complete all matters related to this transaction, the Company’s Board of Directors proposes that the Shareholders’ Meeting authorize the Board to exercise full power to handle all matters pertaining to this transaction, including, but not limited to:

1) Authorize the Board of Directors to formulate and implement the specific plan for this transaction in accordance with the provisions of laws, regulations, normative documents, and the resolutions of the Shareholders’ Meeting;

2) Authorize the Board of Directors to, in accordance with the plan approved by the Shareholders’ Meeting, assume full responsibility for handling and deciding all specific matters related to this transaction;

3) Authorize the Board of Directors to make appropriate adjustments to the transaction plan in response to requests from the relevant approving authorities or in accordance with new applicable regulations issued by the regulatory authorities (except for matters that, pursuant to applicable laws and regulations and the Articles of Association, must be re-submitted to the Shareholders’ Meeting for voting), and to approve and sign all agreements and documents related to this transaction, including audit reports, valuation reports, and any amendments thereto.

4) Authorize the Board of Directors to amend, supplement, execute, submit, file, and perform all agreements, contracts, and documents related to this transaction, and to handle all disclosure and review matters pertaining to this transaction;

5) Authorize the Board of Directors to handle, in accordance with the actual results and relevant circumstances of this transaction, the necessary procedures such as industrial and commercial change registration and asset transfer;

6) Within the scope permitted by laws, regulations, normative documents, and the Company’s Articles of Association, authorize the Board of Directors to handle all other matters related to this transaction;

7) The Board of Directors is authorized, subject to the foregoing authorization, to further delegate such authority to the Chairman for exercise, unless otherwise provided by applicable laws and regulations; such delegation shall take effect as of the date on which it is approved by the Shareholders’ Meeting.

8) This authorization shall be valid for a period of 12 months from the date on which it is approved by the Shareholders’ Meeting.

Voting results: 9 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

17. Deliberated and approved the “Proposal on Requesting the Convening of the Second Extraordinary General Meeting of Shareholders in 2022 to Review Matters Related to This Transaction.”

The Company’s Board of Directors has approved the convening of the Second Extraordinary General Meeting of 2022 on Tuesday, November 1, 2022.

Voting results: 9 votes in favor, 0 votes against, and 0 abstentions.

18. Deliberated and approved the “Proposal on Entering into a Financial Leasing Sales Cooperation with Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd.”

To innovate the sales model and strengthen accounts receivable collection, the Company has agreed to collaborate with Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. (hereinafter referred to as “Huahuida”) under a financial leasing sales arrangement. Pursuant to the lessee’s designation, Shaanxi Yiming Food Co., Ltd. (hereinafter referred to as “Shaanxi Yiming”), Huahuida intends to purchase the Company’s refrigeration equipment, air-conditioning units, and production-line equipment.

The transaction price for this deal has been mutually agreed upon by the Company and Shaanxi Yiming at RMB 33.462 million, based on prevailing market prices.

The aforementioned transaction constitutes a related-party transaction. On September 19, 2022, the Company’s independent directors provided their prior approval for this proposal and agreed to submit it to the Board of Directors for consideration. Related director Ji Zhijian recused himself from the deliberation of this proposal.

Approval: 8 votes; Opposition: 0 votes; Abstentions: 0 votes.

19. Deliberated and approved the “Proposal on Providing Guarantees for Shaanxi Yiming Food Co., Ltd.”

Based on the aforementioned financial leasing transaction, the Company has agreed with Huahuida and Shaanxi Yiming that the Company shall assume the obligations of advancing delayed rental payments and providing a buyback guarantee for Shaanxi Yiming.

For details, please refer to the “Announcement on Related-Party Transactions Involving Financial Leasing and External Guarantees of Bingshan Cold & Heat Technology Co., Ltd.” disclosed on the same day.

On September 19, 2022, the Company’s independent directors provided their prior approval for this proposal and agreed to submit it to the Board of Directors for consideration.

Approvals: 9; Opposites: 0; Abstentions: 0

 

III. Supporting Documents for Review

1. A board resolution signed by the directors in attendance and sealed with the board’s official seal;

2. Pre-approval statement and independent opinion of the independent directors;

3. Verification opinions and relevant documents issued by the intermediary agency.

Board of Directors of Iceberg Cold & Heat Technology Co., Ltd.

September 27, 2022