Henan Liliang Diamond Co.Ltd(301071)
Foreign investment management system
Chapter I General Provisions
Article 1 in order to strengthen the management of Henan Liliang Diamond Co.Ltd(301071) (hereinafter referred to as “the company”) foreign investment, standardize the company’s foreign investment behavior, improve the efficiency of capital operation, clarify responsibilities and ensure the preservation and appreciation of the company’s foreign investment, according to the company law of the people’s Republic of China (hereinafter referred to as “the company law”) The Listing Rules of Shenzhen Stock Exchange gem (hereinafter referred to as the Listing Rules), Henan Liliang Diamond Co.Ltd(301071) articles of Association (hereinafter referred to as the articles of association), other relevant laws, administrative regulations, normative documents and other business rules of Shenzhen Stock Exchange are formulated in combination with the actual situation of the company. Article 2 the term “external investment” as mentioned in this system refers to the company’s external investment, including entrusted financial management, investment in subsidiaries, etc., except for the establishment or capital increase of wholly-owned subsidiaries. It usually refers to the company’s monetary capital, real objects such as houses, machines, equipment and materials after asset evaluation, as well as intangible assets such as patent right, trademark right and land use right, and carries out various forms of investment activities.
Article 3 the purpose of establishing this system is to establish an effective management mechanism to promote the benefits and control the risks of the company in the process of organizing resources, assets, investment and other business operations, ensure the profitability and safety of capital operation, and improve the profitability and anti risk ability of the company.
Article 4 principles for foreign investment:
(I) abide by national laws, regulations and relevant provisions of the articles of Association;
(II) safeguard the interests of the company and all shareholders and strive to maximize the interests of the enterprise;
(III) conform to the company’s development strategy and national industrial policy, and give play to and strengthen the company’s competitive advantage;
(IV) adopt a prudent attitude, appropriate scale, act according to one’s ability, carry out relevant risk management in the implementation process, and give consideration to the balance of risk and income;
(V) be standardized, institutionalized and scientific, and consult external experts when necessary.
Chapter II examination and approval authority for foreign investment
Article 6 the company’s foreign investment is divided into long-term investment and short-term investment:
(I) long term investment mainly refers to all kinds of investments invested by the company for more than one year that cannot be realized at any time or are not ready to be realized at any time, including bond investment, equity investment and other investments. Long term investment type of the company:
1. Long term equity investment;
2. Long term debt investment.
(II) short term investment mainly refers to the investment that the company purchases and holds for no more than one year (including one year) and can be realized at any time, mainly referring to all kinds of financial assets.
(III) the company must strictly implement these provisions when making foreign investment. The board of directors, chairman or general manager of the company shall designate special departments or project teams to conduct practical and serious demonstration and Research on the necessity, feasibility and yield of investment. Those who are sure that they can invest shall be approved in accordance with the investment management regulations issued by the company.
Chapter III Organization of foreign investment management
Article 7 the general meeting of shareholders and the board of directors of the company are the decision-making bodies of the company’s foreign investment, and each makes decisions on the company’s foreign investment within the scope of authority specified in the articles of association.
Article 8 if the company’s foreign investment meets one of the following standards, it shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors:
(I) the total assets involved in the transaction account for more than 50% of the company’s total assets audited in the latest period. If the total assets involved in the transaction have both book value and evaluated value, the higher one shall be taken as the calculation basis;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 50% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds 50 million yuan;
(III) the related net profit of the transaction object (such as equity) in the latest fiscal year accounts for more than 50% of the audited net profit of the company in the latest fiscal year, and the absolute amount exceeds 5 million yuan;
(IV) the transaction amount (including debts and expenses) of the transaction accounts for more than 50% of the company’s latest audited net assets, and the absolute amount exceeds 50 million yuan;
(V) the profit generated from the transaction accounts for more than 50% of the audited net profit of the company in the latest fiscal year, and the absolute amount exceeds 5 million yuan.
If the data involved in the above index calculation is negative, take its absolute value for calculation.
Article 9 if the foreign investment of the company meets one of the following standards, it shall be considered by the board of directors: (I) the total assets involved in the transaction (if there are both book value and evaluation value, whichever is higher) account for more than 30% of the company’s total audited assets in the latest period;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 30% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds 30 million yuan;
(III) the subject matter of the transaction (such as equity) is more than 30% of the audited net profit of the company related to the latest accounting year, and the absolute amount exceeds 3 million yuan;
(IV) the transaction amount of the transaction (including the debts and expenses undertaken) accounts for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds 30 million yuan;
(V) the audited net profit of the company exceeds RMB 3 million, accounting for more than 3% of the net profit of the latest accounting year.
If the data involved in the above indicators is negative, the absolute value shall be taken for calculation.
Article 10 in addition to the foreign investment matters that should be deliberated by the board of directors or the general meeting of shareholders as stipulated in laws and regulations, the articles of association and this system, other foreign investment matters of the company shall be deliberated by the general manager of the company. Article 11 the company’s securities investment, entrusted financial management or derivative investment shall be deliberated and approved by the company’s board of directors or general meeting of shareholders, and the approval authority shall not be delegated to the company’s individual directors or management.
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 entrusted party, and sign a written contract with the entrusted party to clarify the amount, term, investment variety, rights, obligations and legal liabilities of both parties.
If 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 Articles 8 and 9 shall apply.
Article 12 Where a company invests abroad to establish a limited liability company, joint stock limited company or other organization, it shall take the total amount of capital contribution agreed in the agreement as the standard, and the provisions of Articles 8 and 9 shall apply.
Article 13 the strategy committee of the board of directors is responsible for overall planning, coordinating and organizing the analysis and research of foreign investment projects, and providing suggestions for decision-making.
Article 14 as the main person in charge of the implementation of foreign investment, the general manager of the company is responsible for planning, organizing and monitoring the implementation of new foreign projects, and shall timely report the investment progress to the board of directors and put forward adjustment suggestions, so as to facilitate the board of directors and the general meeting of shareholders to revise the investment plan in time.
The general manager can organize and establish a project implementation team to be responsible for the task implementation and specific implementation of foreign investment projects. The company can establish the accountability mechanism of the project implementation team to follow up and assess the work of the project implementation team.
Article 15 the financial department of the company is the financial management department of foreign investment, which is responsible for evaluating the investment benefits of foreign investment projects, raising funds, handling capital contribution procedures, etc.
Article 16 the audit committee of the board of directors of the company is responsible for coordinating the advance audit and regular benefit audit of foreign investment projects.
Article 17 the legal department of the company is responsible for the legal review of agreements, contracts, important relevant letters and articles of association of foreign investment projects.
Article 18 the Securities Affairs Department of the company is responsible for arranging the deliberation and information disclosure of the board of directors and the general meeting of shareholders for foreign investment projects.
Chapter IV decision making and asset management of foreign investment
Section I short term investment
Article 19 short term investment shall be conducted carefully according to the abundant cash flow of the company. The short-term investment procedures are as follows:
(I) the financial department of the company shall regularly prepare a statement of capital flow;
(II) the board of directors shall, according to the specific situation of the company’s cash flow, designate relevant departments or personnel to prepare and submit short-term investment plans according to the situation of various securities in the securities market and the profitability of other investment objects;
(III) the short-term investment plan shall be implemented after performing the approval procedures according to the approval authority.
Article 20 the financial department of the company shall timely register the investment according to the category, quantity, unit price, accrued interest, purchase date and other items of short-term investment, and carry out relevant accounting treatment.
Article 21 where securities investment is involved, the joint control system must be strictly implemented. That is, it shall be jointly controlled by at least two persons, and the trading personnel of the investment object shall be separated from the fund and financial management personnel and restrict each other. No one shall touch the investment assets alone. The deposit or withdrawal of any investment assets must be recorded in the register in detail and signed by the handling personnel present.
Article 22 the short-term securities purchased by the company must be included in the name of the company on the day of purchase. Article 23 The Finance Department of the company is responsible for regularly checking the use and balance of securities investment funds with the securities business department.
Article 24 The Finance Department of the company shall record the interest and dividends received from the investment in time.
Article 25 the board of directors of the company shall assign special personnel to track the progress and safety of entrusted financial management funds. In case of any abnormal situation, the financial institution shall be informed of the real situation in time and reported to the board of directors, so that the board of directors can take immediate measures to recover the funds and avoid or reduce the losses of the company.
Section II long term investment
Article 26 according to the nature of the project, the company’s long-term foreign investment can be divided into new projects and capital increase of existing projects:
(I) new project investment refers to the investment made according to the approved investment amount after the investment project is approved. (II) capital increase of existing projects refers to the activities that the original investment projects need to increase investment on the basis of the original approved investment according to the needs of operation.
Article 27 procedures for foreign long-term investment.
(I) the board of directors or the chairman of the board of directors or the general manager put forward the need for the establishment of new foreign investment projects, and designated personnel from relevant departments to form a new project evaluation team to conduct a preliminary evaluation of the investment projects and put forward investment suggestions;
(II) for investment projects expected to be considered by the board of directors:
1. Report to the strategy committee of the board of directors for preliminary review;
2. After passing the preliminary review, the new project evaluation team will analyze the feasibility of the project and arrange due diligence. Prepare the feasibility study report and submit it to the strategy committee of the board of directors;
3. The strategy committee of the board of directors shall submit the feasibility study report and relevant cooperation agreements to the board of directors for deliberation after they are reviewed and approved;
4. The board of directors shall perform the examination and approval procedures according to the relevant examination and approval authority. If it exceeds the examination and approval authority of the board of directors, it shall be submitted to the general meeting of shareholders for deliberation;
(III) for investment projects that are not expected to be considered by the board of directors:
1. Report to the general manager for preliminary review;
2. After passing the preliminary review, the new project evaluation team will analyze the feasibility of the project, arrange due diligence, prepare the feasibility study report and submit it to the general manager;
3. The general manager shall perform the approval procedures according to the relevant approval authority. If the approval authority of the general manager is exceeded, it shall be submitted to the board of directors or the general meeting of shareholders for deliberation in accordance with item (II) of this article;
(IV) when necessary, the new project evaluation team may employ external intermediaries to assist in due diligence.
(V) foreign investment projects that have been approved for implementation shall be implemented by the relevant departments authorized by the decision-making body of the company;
(VI) the management of the company is responsible for supervising the operation and management of the project.
Article 28 after the foreign long-term investment agreement is signed, the company shall cooperate with relevant parties to handle capital contribution, industrial and commercial registration, tax registration, bank account opening, etc.
Article 29 the implementation of foreign investment projects must obtain the authorization and approval documents of the relevant decision-making organs of the company, together with the approved foreign investment budget plan and other relevant materials.
Article 30 the company’s foreign investment is subject to budget management. During the implementation of the investment budget, the investment budget can be reasonably adjusted according to the changes of the actual situation, and the investment budget scheme must be approved by the competent decision-making body of the company.
Article 31 a long-term investment project shall sign an investment contract or agreement with the investee. The long-term investment contract or agreement must be reviewed by the company’s legal adviser and approved by the chairman before it can be officially signed. The company shall authorize specific departments and personnel to invest cash, physical objects or intangible assets in accordance with the provisions of the long-term investment contract or agreement. The physical objects must be handed over and approved by the physical use and management department.
Before signing the investment contract or agreement, the investment fund shall not be paid or the transfer of investment assets shall not be handled; After the investment is completed, the investment certificate or other valid certificates issued by the investee shall be obtained.
Article 32 the management of the company shall timely report the investment progress to the board of directors. When the investment conditions change, which may affect the investment efficiency, it shall timely put forward suggestions on suspending or adjusting the plan of the investment project, and reconsider it according to the approval procedures.
Article 33 for major investment projects, experts or intermediaries can be hired separately to conduct feasibility analysis and demonstration.
Article 34 the management of the company shall appoint special personnel to carry out the daily management of long-term investment. Their responsibilities include: (I) monitoring the operation and financial status of the invested unit and reporting the situation of the invested unit to the competent leaders of the company in time;
(II) supervise the profit distribution and dividend payment of the invested unit and safeguard the legitimate rights and interests of the company; (III) regularly provide investment analysis reports to relevant leaders and functional departments of the company. If it has control over the invested entity, the investment analysis report shall include the accounting statements and audit reports of the invested entity.
Article 35 transfer and recovery of foreign long-term investment
(I) under any of the following circumstances, the company may recover its foreign long-term investment:
1. According to the articles of association, contract or agreement of the invested company, the operation of the investment project (enterprise) expires; 2. Due to the poor management of the investment project (enterprise), it is unable to repay the due debts and implement bankruptcy according to law;
3. The project (enterprise) cannot continue to operate due to force majeure;
4. When other circumstances of termination of investment stipulated in the contract of the invested company occur or occur.
(II) under any of the following circumstances, the company may transfer foreign long-term investment:
1. The investment project has obviously gone against the company’s business direction;
2. There are continuous losses in investment projects and there are no losses
