Verification Opinion of China Merchants Securities Co., Ltd. on the Share Swap Absorption Merger of Guangdong Wens Food Group Co., Ltd. and Guangdong Dahua Agricultural Animal Health Products Co., Ltd.
The terms or abbreviations mentioned in this verification opinion have the same meanings as defined in the "Report on the Share Swap Absorption Merger of Guangdong Wens Food Group Co., Ltd. and Guangdong Dahua Agricultural Animal Health Products Co., Ltd. and Related Transactions."
China Securities Regulatory Commission:
In accordance with the requirements of the "Notice of Feedback on Administrative Licensing Project Review" (No. 151227) issued by your commission on June 26, 2015, China Merchants Securities Co., Ltd. (hereinafter referred to as "the valuation institution for the merged party") was appointed by the merged party to conduct verification on relevant issues and issued the verification opinion regarding the share swap absorption merger of Guangdong Wens Food Group Co., Ltd. and Guangdong Dahua Agricultural Animal Health Products Co., Ltd. The details are as follows.
Issue Three:
The application materials indicate that Wens Group acquired two land use rights through allocation, and 25 collective lands have not obtained agricultural land approval procedures. Please provide: 1) Additional disclosure on the acquisition process of the allocated land and whether it complies with relevant regulations. 2) In conjunction with the "Notice of the State Council on Promoting the Conservation and Intensive Use of Land" (Guo Fa [2008] No. 3) and other allocation land policies, please disclose whether the injection of the above assets into the listed company violates relevant regulations. If violations are suspected, have necessary corrective measures been taken, and disclose the burden of related costs and the impact on the valuation of the target assets.
Please have independent financial advisors, lawyers, and appraisers verify and provide clear opinions.
Response:
- Two allocated lands (1) Basic information on the two allocated lands The subsidiary of Wens Group, Heyuan Wens Poultry Co., Ltd., has obtained two pieces of state-owned land use rights through allocation, with a total area of 18,270.00 square meters (accounting for 0.01% of the company's total land area). Both pieces of state-owned allocated land have obtained "State-owned Land Use Certificates." The specific situation is as follows:
| No. | Land User | Certificate No. | Location | Type | Purpose | Area (㎡) | Term | Mortgage |
|---|---|---|---|---|---|---|---|---|
| 1 | Heyuan Wens Poultry Co., Ltd. | He Guo Yong (2003) No. 393 | Yangming Town, Coral Village | Allocation | Comprehensive Land | 4,270 | - | None |
| 2 | Heyuan Wens Poultry Co., Ltd. | Zhongxin Branch | Lianping County, Zhongxin Town, Siqian Village | Allocation | Animal Husbandry Land | 14,000 | - | None |
(2) Acquisition process and compliance of allocated land The allocated land of 4,270 square meters was allocated to Heyuan Wens Poultry Co., Ltd. by the Land and Resources Bureau of Heping County, Guangdong Province on July 18, 2003, with the approval of "State-owned Land Use Right Allocation" (He Guo Tu Zi Allocation [2003] No. 12) for office and warehouse use. The allocated land of 14,000 square meters was allocated to Heyuan Wens Poultry Co., Ltd. Zhongxin Branch by the Heyuan Land and Resources Bureau on May 29, 2002, with the approval of "Approval for the Construction Land of Lianping County Zhongxin Town Wens Chick Farm" (He Guo Tu Zi (Jian) No. 23) for animal husbandry use. The uses of the above two allocated lands do not fall within the scope of allowable uses for allocated land as specified in the "Notice of the State Council on Promoting the Conservation and Intensive Use of Land" (Guo Fa [2008] No. 3) and the "Directory of Allocated Land," thus not complying with relevant policies for allocated land use.