Iceberg Cold & Heat Technology Co., Ltd.
Iceberg Cold & Heat Technology Co., Ltd.
Iceberg Cold & Heat Technology Co., Ltd.
Iceberg Cold & Heat Technology Co., Ltd.

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13: Proposal on the Dilution of the Company’s Immediate Returns from This Transaction and Measures to Offset Such Dilution

2022 Document No. 13 of the Second Extraordinary General Meeting of the Year

 

Regarding the Dilution of the Company’s Immediate Returns in Connection with This Transaction

and the proposal for remedial measures

 

Dear Shareholders:

The Company’s Board of Directors hereby provides the following explanation regarding the dilution of the Company’s immediate earnings per share resulting from this restructuring and the measures to offset such dilution:

I. Impact of This Transaction on the Company’s Immediate Returns

Based on the Company’s 2021 Audit Report (XYZH/2022DLAA20155), the unaudited financial statements for January–May 2022, and the “Pro Forma Review Report of Bingshan Cold & Heat Technology Co., Ltd.” issued by ShinWing Certified Public Accountants (Special General Partnership) (XYZH/2022DLAA20221), the comparison of the Company’s earnings per share before and after this transaction is as follows:

Unit: RMB per share

Project

2022 January–May of the year

2021 Annual

Before the transaction

After the transaction

Before the transaction

After the transaction

Basic earnings per share

-0.021

-0.016

-0.319

-0.283

Upon completion of this transaction, the listed company’s net profit attributable to parent company shareholders will increase, and earnings per share will improve; there will be no dilution of earnings per share as a result of this transaction. This transaction will enhance the Company’s ability to continue operations and its risk resilience, and is in the best interests of all shareholders of the listed company.

II. Specific Measures to Offset Immediate Returns

Although estimates indicate that the immediate earnings per share will not be diluted in the year the transaction is completed, in order to safeguard the legitimate rights and interests of the company and all shareholders, should such dilution occur, the listed company intends to implement the following measures to enhance its sustainable profitability:

1 Strengthen business management and internal controls

The Company will further strengthen its business management and internal controls, enhance the efficiency of its day-to-day operations, reduce operating costs, comprehensively and effectively manage and mitigate business and operational risks, and improve overall operational efficiency.

2 , Improve the profit distribution policy

Upon completion of this transaction, the listed company will, in accordance with the relevant provisions of the Notice on Further Implementing Matters Related to Cash Dividends by Listed Companies, Regulatory Guidance No. 3 for Listed Companies—Cash Dividends by Listed Companies, the Company’s Articles of Association, and other applicable documents, continue to adopt a sustainable, stable, and proactive profit distribution policy. The company will also, based on its actual circumstances, extensively solicit the views and suggestions of investors, particularly independent directors and minority shareholders, strengthen returns to investors, refine the profit distribution policy, enhance the transparency of its implementation, and safeguard the interests of all shareholders.

3 , Improve the corporate governance structure

The listed company will strictly comply with the requirements of the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Corporate Governance Guidelines for Listed Companies, Shenzhen Stock Exchange Self-Regulatory Guidance No. 1 for Listed Companies—Standardized Operations of Main Board Listed Companies, and other applicable laws, regulations, and normative documents; continuously improve corporate governance; ensure that shareholders can fully exercise their rights; ensure the standardized operation of the general meeting of shareholders, the board of directors, and the supervisory board; ensure that decision-making is scientific, implementation is effective, oversight is robust, and operations are efficient; safeguard the overall interests of the company, particularly the legitimate rights and interests of small and medium-sized shareholders; and provide institutional safeguards for the company’s development.

III. Commitments by Directors and Senior Management of the Listed Company Regarding Measures to Offset the Dilution of Immediate Returns Resulting from This Restructuring

In order to safeguard the legitimate rights and interests of the Company and all shareholders, and to ensure that the measures adopted by the Company to compensate for immediate earnings dilution in accordance with the relevant regulations of the China Securities Regulatory Commission are effectively implemented, all directors and senior management personnel of the Company shall faithfully and diligently perform their duties and hereby undertake:

1 I hereby undertake not to transfer any benefits to other entities or individuals without consideration or on unfair terms, nor to engage in any other conduct that would harm the Company’s interests.

2 I hereby undertake to exercise restraint in my routine official expense activities.

3 I hereby undertake not to use the company’s assets for any investment or consumption activities that are unrelated to the performance of my duties.

4 I hereby undertake to do my utmost, within the scope of my duties and authority, to ensure that the remuneration system established by the Board of Directors and the Remuneration and Performance Evaluation Committee is linked to the implementation of the Company’s measures for replenishing returns.

5 Should the Company implement an equity incentive plan in the future, I hereby undertake to do my utmost, within the scope of my duties and authorities, to ensure that the vesting conditions of the proposed equity incentive are linked to the implementation of the Company’s measures for replenishing returns.

6 From the date of issuance of this Letter of Commitment until the completion of the implementation of this major asset restructuring, if the China Securities Regulatory Commission promulgates any new regulatory provisions regarding measures to compensate for earnings dilution and related commitments, and my aforementioned commitments are unable to comply with such provisions, I hereby undertake to issue a supplementary commitment in accordance with the CSRC’s most recent requirements at that time.

7 In the event that I breach the foregoing commitments and thereby cause losses to the Company or its investors, I hereby undertake to assume, in accordance with the law, the liability for compensation to the Company or such investors.

8 This Letter of Commitment shall terminate upon the occurrence of any of the following events, whichever occurs first: (1) the undersigned ceases to serve as a director or senior management personnel of Bingshan Cold & Heat; or (2) the shares of Bingshan Cold & Heat are delisted from the Shenzhen Stock Exchange.

IV. Commitments by the Controlling Shareholder of the Listed Company Regarding Measures to Compensate for the Dilution of Immediate Returns Resulting from This Restructuring

To ensure that the measures to compensate for immediate returns, formulated by the Company in accordance with the relevant regulations of the China Securities Regulatory Commission, are effectively implemented, the Company’s controlling shareholder, Bingshan Group, hereby undertakes:

1 The Company undertakes not to overstep its authority in interfering with the business operations and management of the listed company, nor to infringe upon the interests of the listed company.

2 From the date of issuance of this Commitment Letter until the completion of the current restructuring, if the State and the securities regulatory authorities promulgate any new regulatory provisions regarding measures for listed companies to compensate for the immediate dilution of earnings per share, and such provisions render this Commitment Letter non-compliant, the Company shall, in accordance with the latest requirements of the State and the securities regulatory authorities, issue a supplementary commitment.

3 Should the Company breach the foregoing commitments or refuse to perform them, thereby causing losses to the listed company or investors, the Company undertakes to assume the corresponding compensation liability in accordance with the law.

Please review the above report.

 

                             2022 November 1st, Year

 

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