Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316)
Management system of raised funds
Chapter I General Provisions
Article 1 in order to regulate the management of the deposit and use of the raised funds of Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) (hereinafter referred to as “the company”) and improve the efficiency of the use of the raised funds, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China and the measures for the administration of the registration of securities issuance of companies listed on the gem (for Trial Implementation) Regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies and other relevant laws, regulations and normative documents, as well as the Shenzhen Stock Exchange GEM Listing Rules This system is formulated in combination with the actual situation of the company in accordance with the business rules such as the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and the provisions of the articles of Association (hereinafter referred to as the “articles of association”).
Article 2 the term “raised funds” as mentioned in this system refers to the funds raised from investors and used for specific purposes by the company through the issuance of shares and their derivatives, but does not include the funds raised by the company through the implementation of the equity incentive plan. Article 3 the company shall improve its scientific decision-making level and management ability, conduct scientific analysis and prudent decision-making on the feasibility of investment projects with raised funds in strict accordance with relevant laws, regulations, normative documents and the articles of association, and strive to improve the profitability of the company.
The directors, supervisors and senior managers of the company shall be diligent and responsible, urge the company to standardize the use of the raised funds, consciously maintain the safety of the raised funds, and shall not participate in, assist or connive at the company to change the purpose of the raised funds without authorization or in a disguised form.
Article 4 the board of directors of the company is responsible for establishing and improving the system and ensuring the effective implementation of the system. The management system for raised funds shall clearly stipulate the storage, use, change, supervision and accountability of the special account for raised funds. The management system of raised funds shall make clear provisions on the application for the use of raised funds, hierarchical examination and approval authority, decision-making procedures, risk control measures and information disclosure procedures.
Where the investment project of raised funds is implemented through a subsidiary of the company or other enterprises controlled by the company, the company shall ensure that the subsidiary or other enterprises controlled by the company comply with this system.
Article 5 after the raised funds are in place, the company shall timely go through the capital verification procedures, issue a capital verification report by an accounting firm with securities practice qualification, and organize the use of the raised funds in accordance with the use plan of the raised funds promised in the prospectus or the prospectus.
Chapter II deposit of raised funds in special account
Article 6 the company shall carefully select commercial banks and open special accounts for raised funds (hereinafter referred to as “special accounts”). The raised funds shall be deposited in a special account approved by the board of directors for centralized management, and the special account shall not be used for non raised funds or other purposes.
If the company has raised funds for more than two times, it shall set up special accounts for raised funds respectively.
The net amount of the actually raised funds exceeding the amount of the planned raised funds (hereinafter referred to as “over raised funds”) shall also be deposited in the special account for the management of the raised funds.
Article 7 the company shall sign a three-party supervision agreement (hereinafter referred to as the “agreement”) with the recommendation institution or independent financial adviser and the commercial bank storing the raised funds (hereinafter referred to as the “commercial bank”) within one month after the raised funds are in place. The agreement shall at least include the following contents:
(I) the company shall deposit the raised funds in a special account;
(II) the account number of the special account for raised funds, the investment projects of the raised funds involved in the special account and the deposit amount; (III) if the company withdraws more than 50 million yuan or 20% of the net raised funds from the special account at one time or within 12 months, the company and commercial banks shall timely notify the recommendation institution or independent financial adviser;
(IV) the commercial bank shall issue the bank statement to the company every month and send a copy to the recommendation institution or independent financial adviser;
(V) a recommendation institution or an independent financial consultant may inquire about the special account information at a commercial bank at any time;
(VI) the supervision responsibilities of the recommendation institution or independent financial consultant, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution and the commercial bank on the use of the company’s raised funds;
(VII) rights, obligations and liabilities for breach of contract of the company, commercial banks, recommendation institutions or independent financial advisers;
(VIII) if the commercial bank fails to issue a statement of account or notify the special account of large amount withdrawal to the recommendation institution or independent financial consultant in time for three times, and fails to cooperate with the recommendation institution or independent financial consultant to inquire and investigate the special account information, the company may terminate the agreement and cancel the special account for raised funds.
The company shall timely announce the main contents of the agreement after the signing of the above agreement.
Where a company implements an investment project with raised funds through a holding subsidiary, a tripartite supervision agreement shall be jointly signed by the company, the holding subsidiary implementing the investment project with raised funds, commercial banks, recommendation institutions or independent financial advisers. The company and its holding subsidiary shall be regarded as a common party.
If the above agreement is terminated in advance before the expiration of its term of validity, the company shall sign a new agreement with relevant parties within one month from the date of termination of the agreement and make a timely announcement.
Chapter III use of raised funds
Article 8 the company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the prospectus or the commitments in the prospectus, and shall not change the investment direction of the raised funds at will or change the purpose of the raised funds in a disguised form. The company shall truthfully, accurately and completely disclose the actual use of the raised funds. In case of any situation that seriously affects the normal progress of the investment plan of the raised funds, the company shall make a timely announcement.
In principle, the funds raised by the company shall be used for its main business. The investment projects of the company’s raised funds shall not be used to carry out entrusted financial management (except cash management), entrusted loans, hold trading financial assets and financial assets available for sale, lend to others and other financial investments, as well as securities investment, derivatives investment and other high-risk investments, and shall not be directly or indirectly invested in companies whose main business is the trading of securities.
The company shall not use the raised funds for pledge or other investments that change the purpose of the raised funds in a disguised form.
Article 9 the company shall ensure the authenticity and fairness of the use of the raised funds, prevent the raised funds from being occupied or misappropriated by the controlling shareholders, actual controllers and their affiliates, and take effective measures to prevent the related parties from using the raised funds to invest in projects to obtain improper interests.
Article 10 the company’s application, approval, execution authority and procedures for the use of raised funds are as follows: the company shall use the raised funds within the planning scope of raised investment projects, and perform the application and approval procedures for the use of funds in strict accordance with this system. For each expenditure involving the raised funds, the fund use plan shall be proposed by the implementation Department of the raised investment project, which shall be submitted to the finance department after being signed by the competent manager within the scope authorized by the board of directors. After being reviewed by the person in charge of the finance department, it shall be paid after being signed by the vice president in charge, the chief financial officer, the president and the director level by level; If it exceeds the scope authorized by the board of directors, it shall be reported to the board of directors for approval.
Article 11 in case of any of the following circumstances in a project invested with raised funds, the company shall re demonstrate the feasibility and expected income of the project and decide whether to continue to implement the project:
(I) major changes have taken place in the market environment involved in the investment project with raised funds;
(II) the project invested with raised funds has been shelved for more than one year;
(III) exceeding the completion period of the latest raised capital investment plan and the amount of raised capital investment does not reach 50% of the relevant plan amount;
(IV) other abnormal circumstances occur in the project invested with raised funds.
The company shall disclose the progress of the project and the reasons for abnormalities in the latest periodic report. If it is necessary to adjust the investment plan of raised funds, the adjusted investment plan of raised funds shall be disclosed at the same time.
Article 12 when the company uses the raised funds for the following matters, it shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors, the recommendation institution or the independent financial consultant shall express their explicit consent:
(I) replace the self raised funds that have been invested in the investment projects with the raised funds in advance;
(II) use the temporarily idle raised funds for cash management;
(III) temporarily replenish working capital with temporarily idle raised funds;
(IV) change the purpose of the raised funds;
(V) change the implementation location of the project invested by the raised funds;
(VI) adjust the progress of the project plan for raising funds;
(VII) use the surplus raised funds.
If the company changes the purpose of the raised funds and uses the surplus raised funds to meet the deliberation standards of the general meeting of shareholders, it shall also be deliberated and approved by the general meeting of shareholders.
Article 13 after the completion of a single or all raised funds investment project, the company will use the surplus raised funds (including interest income) for other purposes, and the amount is less than 5 million yuan and less than the net amount of raised funds of the project
If the use of surplus raised funds (including interest income) reaches or exceeds 10% of the net raised funds of the project and is higher than 10 million yuan, it shall also be deliberated and approved by the general meeting of shareholders.
Article 14 Where the company replaces the self raised funds that have been invested in the investment projects with the raised funds in advance, the accounting firm shall issue an authentication report, and the independent directors, the board of supervisors, the recommendation institution or the independent financial consultant shall express their explicit consent and disclose it. The company may replace the self raised funds with the raised funds within six months after the receipt of the raised funds.
If the company has disclosed in the issuance application document that it plans to replace the self raised funds invested in advance with the raised funds, and the amount invested in advance is determined, it shall make an announcement before the replacement is implemented.
Article 15 the company may conduct cash management on the temporarily idle raised funds, and the term of its investment products shall not exceed 12 months, meet the requirements of high safety and good liquidity, and shall not affect the normal progress of the investment plan of the raised funds.
Investment products shall not be pledged, and the special product settlement account (if applicable) shall not deposit non raised funds or be used for other purposes. If the special product settlement account is opened or cancelled, the company shall timely report to the stock exchange for filing and announcement.
Article 16 Where the company uses idle raised funds for cash management, it shall timely announce the following contents after the meeting of the board of directors:
(I) basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of the raised funds, idle conditions and reasons, whether there is any behavior of changing the purpose of the raised funds in a disguised form and measures to ensure that the normal progress of the raised funds project will not be affected;
(III) the issuer, type, investment scope, term, amount, income distribution mode, expected annualized rate of return (if any), and the specific analysis and description of the safety and liquidity of the investment products by the board of directors;
(IV) opinions issued by independent directors, the board of supervisors, recommendation institutions or independent financial advisers.
When the company finds that the financial situation of the issuer of investment products is deteriorating and the invested products are facing losses and other major risks, it shall timely disclose the risk prompt announcement and explain the risk control measures taken by the company to ensure the safety of funds.
Article 17 If the idle raised funds of the company are temporarily used to supplement the working capital, they shall be limited to the production and operation related to the main business, and shall meet the following conditions:
(I) it shall not change the purpose of the raised funds in a disguised form or affect the normal operation of the investment projects of the raised funds; (II) the funds raised for temporary replenishment of working capital have been returned;
(III) the time for a single replenishment of working capital shall not exceed 12 months;
(IV) the idle raised funds shall not be directly or indirectly used for high-risk investments such as securities investment and derivatives trading.
Article 18 If the company uses idle raised funds to supplement working capital temporarily, it shall timely announce the following contents after the deliberation and approval of the board of directors:
(I) basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of raised funds, idle conditions and reasons;
(III) the reasons for the shortage of working capital, the amount and period of idle raised funds to supplement working capital; (IV) the amount of idle raised funds to supplement working capital, the expected savings in financial expenses, whether there is any behavior of changing the investment direction of raised funds in a disguised form, and measures to ensure that the normal progress of investment projects with raised funds will not be affected;
(V) opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers;
(VI) other contents required by the stock exchange.
Before the due date of supplementary working capital, the company shall return this part of the capital to the special account for raised capital, and make an announcement within two trading days after all the capital is returned. If the company is expected to be unable to return this part of the funds to the special account for raised funds on schedule, it shall perform the review procedures in accordance with the requirements of the preceding paragraph before the due date and make a timely announcement. The contents of the announcement shall include the whereabouts of the funds, the reasons why they cannot be returned, the reasons and time limit for continuing to supplement working capital, etc. Article 19 the company shall, according to the company’s development plan and actual production and operation needs, properly arrange the use plan of the part of the net amount of funds actually raised exceeding the amount of funds planned to be raised (hereinafter referred to as “over raised funds”), scientifically and prudently analyze the feasibility of the project, and timely disclose it after being submitted to the board of directors for deliberation and approval. The use plan announcement shall include the following contents:
(I) basic information of the raised funds, including the arrival time of the raised funds, the amount of the raised funds, the amount of the actual net raised funds exceeding the planned raised funds, the name and amount of the invested projects, the cumulative planned amount and the actual amount used;
(II) introduction to the projects planned to be invested, including the basic information of each project, whether related party transactions are involved, feasibility analysis, economic benefit analysis, investment schedule, description that the project has been obtained or has yet to be approved by relevant departments and risk tips (if applicable);
(III) independent opinions of independent directors, sponsors or independent financial advisers on the rationality, compliance and necessity of the use plan of over raised funds.
If the amount of over raised funds planned to be used for a single time reaches 50 million yuan and more than 10% of the total amount of over raised funds, it shall also be submitted to the general meeting of shareholders for deliberation and approval.
Article 20 if the company uses the over raised funds to repay bank loans or permanently supplement working capital, it shall be deliberated and approved by the board of directors and the general meeting of shareholders
