H&R(SZ:000892) Zheng Quan Zhi Xing·2025-05-21 13:57Core Viewpoint - The legal opinion letter from Beijing Hairun Tianrui Law Firm addresses the performance compensation and impairment compensation related to the asset acquisition of Huanyu Century Joint Stock Company, confirming that the compensation methods and calculations comply with relevant laws and regulations [1][2][11]. Group 1: Transaction Overview - The transaction involves Huanyu Century issuing 391,644,880 shares to acquire 100% of Huanyu Film and Television Media Co., Ltd. from its original shareholders, approved by the China Securities Regulatory Commission [1][4]. - The acquisition was executed on November 11, 2016, following resolutions from the company's board meetings and a temporary shareholders' meeting [1][4]. Group 2: Performance Commitment - The original shareholders of Huanyu Film committed to net profits of at least 241 million RMB, 290 million RMB, and 368 million RMB for the years 2016, 2017, and 2018, respectively [4][5]. - If the actual net profits fall short of these commitments, the original shareholders are obligated to compensate according to the profit compensation agreement [5]. Group 3: Compensation Calculation - The calculation for share compensation is based on the formula involving the cumulative actual net profit and the total number of shares issued in the transaction, ensuring that the total compensation does not exceed the shares issued [5][6]. - Asset impairment compensation is determined through a valuation process, where if the impairment exceeds the calculated compensation based on the share price, the original shareholders must pay the difference in cash [6][11]. Group 4: Performance Completion and Impairment Testing - The auditing firm Tianjian issued reports for the years 2016 to 2018, with the 2018 report containing a qualified opinion due to uncertainties regarding accounts receivable from the drama "Tianxia Chang'an" [7][8]. - Following adjustments for bad debt provisions, the cumulative actual profits achieved during the commitment period were reported, with specific figures provided for net profits and completion rates [10][9]. Group 5: Approval Procedures - The performance compensation and impairment compensation plans have been approved by the company's board and are pending approval at the upcoming annual shareholders' meeting in 2024 [11].