Tianshui Zhongxing Bio-Technology Co.Ltd(002772)
Entrusted financial management system
Chapter I General Provisions
Article 1 in order to regulate the management of Tianshui Zhongxing Bio-Technology Co.Ltd(002772) (hereinafter referred to as “the company”) entrusted wealth management business, prevent investment risks, strengthen risk control and protect the rights and interests of investors and the interests of the company, in accordance with the securities law of the people’s Republic of China and the rules on the listing of shares of Shenzhen Stock Exchange This system is formulated in combination with the actual situation of the company, such as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 7 – transactions and related party transactions and other relevant laws and regulations, normative documents and the relevant provisions of the articles of association. Article 2 the “entrusted financial management” mentioned in this system refers to the behavior that the company entrusts banks, trusts, securities, funds, futures, insurance asset management institutions, financial asset investment companies, private fund managers and other professional financial management institutions to invest and manage their property or purchase relevant financial products.
Article 3 where a company conducts entrusted financial management, it shall perform it in strict accordance with the decision-making procedures, reporting system and monitoring measures of this system, and determine the investment scale according to the risk tolerance of the company.
The entrusted financial management of the company’s holding subsidiary is regarded as the behavior of a listed company, and the provisions of this system shall apply. If the entrusted financial management of the company’s joint-stock company has a great impact on the company’s performance, the company shall perform the obligation of information disclosure with reference to the relevant provisions of this system.
Chapter II principles of entrusted financial management
Article 4 the company shall follow the principles of prudent decision-making and scientific risk prevention in carrying out entrusted financial management business.
The entrusted financial management of the company shall be carried out according to the capital demand of the company’s production and operation and the actual situation of the company’s cash flow and monetary capital holding. The project period of financial products shall match the company’s capital use plan, on the premise that it will not affect the normal operation and development of the company’s main business.
Article 5 the company’s funds used for entrusted financial management shall be the company’s idle funds (including idle own funds and raised funds), which shall not occupy the company’s normal operation and project construction funds, and shall not affect the company’s production and operation capital needs due to entrusted financial management. Among them, the use of idle raised funds (including over raised funds) for entrusted financial management also needs to be implemented in accordance with relevant laws and regulations and relevant systems for the management of raised funds. The temporarily idle raised funds can be managed in cash. The term of their investment products shall not exceed 12 months, and must have high safety and good liquidity, which shall not affect the normal progress of the investment plan of raised funds.
Article 6 for entrusted financial management, the company shall select a qualified professional financial management institution with good credit status and financial status, no bad credit record and strong profitability as the trustee, and sign a written contract with the trustee to clarify the amount, term, investment variety, rights, obligations and legal responsibilities of both parties.
Chapter III approval and decision-making authority of entrusted financial management
Article 7 where the company carries out entrusted financial management, and the amount of entrusted financial management accounts for more than 10% of the latest audited net assets of the listed company, and the absolute amount exceeds 10 million yuan, it shall be deliberated and approved by the board of directors before investment, and fulfill the obligation of information disclosure in time. The company’s entrusted financial management matters that fail to meet the deliberation standards of the board of directors shall be subject to the company’s internal decision-making procedures and implemented in strict accordance with the relevant systems of transaction matters stipulated by the company.
If it is difficult to fulfill the review procedures and disclosure obligations for each investment transaction due to transaction frequency and timeliness requirements, the company can reasonably predict the scope, amount and duration of entrusted financial management in the next 12 months. When the board of Directors considers the entrusted financial management, the directors shall pay full attention to whether the approval power of the entrusted financial management is delegated to the directors or senior managers, whether the relevant risk control systems and measures are sound and effective, and whether the trustee’s integrity record, business status and financial status are good.
Article 8 where the amount of entrusted financial management accounts for more than 50% of the latest audited net assets of a listed company and the absolute amount exceeds 50 million yuan, it shall be disclosed in time and submitted to the general meeting of shareholders for deliberation.
Article 9 the service life of the relevant quota shall not exceed 12 months, and the transaction amount (including the relevant amount of reinvestment of the income of the above investment) at any point in the period shall not exceed the investment quota.
Article 10 entrusted financial management shall be calculated based on the amount incurred and accumulated within 12 consecutive months. If the company has performed relevant obligations in accordance with Article 7 or 8 of this system, it will not be included in the scope of accumulated calculation. The transactions that have been disclosed but have not fulfilled the deliberation procedures of the board of directors or the general meeting of shareholders shall still be included in the cumulative calculation range to determine the deliberation procedures that should be fulfilled.
Article 11 Where the company has entrusted financial management for 12 consecutive months, the maximum balance in that period shall be the transaction amount, and the provisions of Article 9 shall apply.
Article 12 for entrusted financial management between the company and related parties, the amount of entrusted financial management shall also be taken as the calculation standard, and the relevant provisions of related party transactions such as the stock listing rules of Shenzhen Stock Exchange shall apply.
Chapter IV internal daily management and reporting procedures
Article 13 the daily management department of entrusted financial management of the company and its holding subsidiaries is the company’s financial department, whose main responsibilities are:
(I) be responsible for the reasonable prediction of the scope, amount and investment period of the company’s entrusted financial management;
(II) be responsible for the demonstration before investment and investigate the company’s financial status and cash flow status; Comprehensively review and evaluate the trustee’s credit status, financial status and integrity records; Conduct content audit and risk assessment on financial management business; Carry out feasibility analysis and risk assessment on the capital source, investment scale and expected income of entrusted financial management;
(III) be responsible for the signing of contracts and agreements related to the company’s entrusted financial management, fund transfer and other related work; （4） During the financial management business, be responsible for paying attention to, tracking and supervising the implementation progress of entrusted financial management activities, and implementing various risk control measures. If any abnormality is found in the entrusted financial management, it shall be reported to the general manager of the company in time, so that the company can take effective measures to recover the funds in time and avoid or reduce the losses of the company;
(V) be responsible for the daily accounting of the company’s entrusted financial management business, track the due investment funds and income, arrive in time and in full, and obtain relevant investment certificates or other valid vouchers in time for registration;
(VI) be responsible for the filing and preservation of financial management agreement, product manual, financial management income calculation table, bank business license and other documents;
(VII) be responsible for timely submitting the supporting materials related to entrusted financial management to the Securities Investment Department of the company.
Article 14 internal reporting procedures
（1） Pre investment demonstration. The financial department of the company shall inspect the financial status and cash flow status of the company; To conduct a comprehensive review and evaluation of the trustee’s credit status, financial status and integrity records, a qualified professional financial institution with good credit status and financial status, no bad integrity records and strong profitability shall be selected as the trustee; The entrusted financial management business shall sign a written contract with the entrusted party to clarify the amount, term, investment variety, rights, obligations and legal liabilities of both parties; Conduct content review and risk assessment on financial management business, and conduct feasibility analysis and risk assessment on the capital source, investment scale and expected income of entrusted financial management.
(II) the financial department of the company shall report the entrusted financial management scheme, evaluation and suggestions to the general manager of the company, and copy them to the securities and investment department at the same time. The securities and investment department shall put forward opinions on whether the product risk level involved in this financial management complies with relevant regulations.
（3） After being approved by the general manager, the securities and investment department will make a comprehensive judgment according to the amount and business nature in the financial management plan, decide the follow-up review process and inform the financial department. If it needs to be submitted to the board of directors and the general meeting of shareholders for deliberation, the securities and investment department shall be responsible for organizing the meeting.
If the company has reasonably predicted the scope, amount and duration of entrusted financial management in the next 12 months and has submitted it to the board of directors or the general meeting of shareholders for deliberation and approval, it shall invest in strict accordance with the scope of deliberation.
(V) during the period of entrusted financial management and investment, the financial department of the company shall pay attention to tracking and supervising the implementation progress of entrusted financial management activities and implement various risk control measures. In case of any abnormality in entrusted financial management (such as involving the safety of principal, signs of loss, etc.), it shall be reported to the general manager of the company in time. If necessary, the general manager of the company shall report to the board of directors.
Chapter V Supervision and risk prevention and control
Article 15 the legal department of the company is responsible for the legal review of entrusted financial management contracts, agreements and other text materials.
The internal audit department of the company is responsible for the audit and supervision of entrusted financial management projects, including the examination and approval of financial management business, actual handling, fund use, profit and loss, accounting treatment, etc. At the end of each quarter, the internal audit department reports the entrusted financial management business to the audit committee of the board of directors.
Article 16 independent directors have the right to verify the company’s financial management business. If necessary, at the proposal of two or more independent directors, they have the right to hire an independent external audit institution to conduct a special audit of the entrusted financial management funds.
Article 17 the board of supervisors has the right to inspect and supervise the use of entrusted financial management funds on a regular or irregular basis.
Article 18 information confidentiality measures for the company’s entrusted wealth management business
（1） The applicant, approver and operator of entrusted financial management business are independent of each other, and are supervised by the internal audit department;
（2） The company’s entrusted financial management personnel shall not disclose information related to the company’s business, financial management scheme and financial settlement without the permission of the company’s entrusted financial management personnel.
Article 19 before the company carries out entrusted financial management and investment business, the business personnel shall be aware of relevant laws, regulations, normative documents and other relevant provisions, and shall not carry out illegal transactions.
Article 20 Where the company suffers losses due to violation of relevant laws and regulations, this system and other provisions of the company, failure to conduct transactions in accordance with the company’s established investment plan, or the company suffers losses or income lower than expected due to lack of due diligence, the responsibilities of relevant personnel will be investigated according to the specific circumstances.
Chapter VI information disclosure obligations
Article 21 the company analyzes and judges the information related to the entrusted financial management of the company in accordance with the provisions of the securities law, the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 7 – transactions and connected transactions and other laws and regulations, normative documents and the articles of association, and meets the disclosure standards, It shall be disclosed in accordance with relevant regulations.
Article 22 before the public disclosure of relevant information, the insiders of the entrusted financial management matters of the company shall not disclose the relevant information of the entrusted financial management matters to other individuals or organizations, unless otherwise stipulated in laws, regulations and normative documents.
Article 23 the board of directors of the company shall submit the following documents to Shenzhen Stock Exchange within two trading days after making the entrusted financial management resolution:
（1） Resolutions and announcements of the board of directors;
（2） Independent directors’ independent opinions on compliance of relevant approval procedures, establishment and perfection of internal control procedures, impact on the company and other matters;
（3） The recommendation institution shall check the compliance of entrusted financial management, the impact on the company, possible risks, and whether the risk control measures taken by the company are sufficient and effective, and issue clear consent opinions (if any).
Article 24 the company shall not evade the deliberation procedures and information disclosure obligations that should be performed when purchasing assets or investing abroad in the name of entrusted financial management or other investment, or provide financial assistance to others in a disguised form.
Article 25 in case of any of the following circumstances, the company shall timely disclose the relevant progress and the countermeasures to be taken:
(I) financial products fail to be raised, fail to complete filing and registration, terminate in advance, and cannot be recovered upon expiration; (II) change of main terms of financial product agreement or relevant guarantee contract;
(III) major risk events occur in the operation or financial status of the trustee or fund user;
(IV) other circumstances that may damage the interests of the listed company or have important impact.
Article 26 Where the company carries out entrusted financial management business, it shall disclose the relevant matters of entrusted financial management in the regular report.
Chapter VII supplementary provisions
Article 27 The term “more than” in this system includes the number and “more than” does not include the number.
Article 28 matters not covered in this system shall be implemented in accordance with national laws, regulations, normative documents and the relevant provisions of the articles of association. In case of any conflict between this system and relevant laws, regulations, normative documents or the stock listing rules of Shenzhen Stock Exchange, the provisions of relevant laws, regulations, normative documents or the stock listing rules of Shenzhen Stock Exchange shall be implemented.
Article 29 the system shall be interpreted and revised by the board of directors of the company.
Article 30 the system shall come into force on the date of deliberation and approval by the board of directors of the company.
Tianshui Zhongxing Bio-Technology Co.Ltd(002772) board of directors February 17, 2022
