Henan Liliang Diamond Co.Ltd(301071)
Management system of raised funds
Chapter I General Provisions
Article 1 in order to strengthen the management of the raising of funds by Henan Liliang Diamond Co.Ltd(301071) (hereinafter referred to as the “company”), standardize the use of the raised funds and protect the interests of the majority of investors, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”), the Listing Rules of gem shares of Shenzhen Stock Exchange This system is hereby formulated in combination with the actual situation of the company, including laws, administrative regulations, normative documents, and Henan Liliang Diamond Co.Ltd(301071) 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 by the company for specific purposes by issuing securities to unspecified objects or to specific objects (including notes, convertible corporate bonds, etc.), but does not include the funds raised by the company through the implementation of the equity incentive plan.
The term “over raised funds” as mentioned in this system refers to the part where the net amount of funds actually raised exceeds the amount of funds planned to be raised. Article 3 after the raised funds are in place, the company shall timely go through the capital verification procedures, which shall be verified by an accounting firm in accordance with the provisions of the securities law and issue a capital verification report. The company’s management of the raised funds follows the principles of special account deposit, special funds for special purposes, strict management and truthful disclosure.
Article 4 the raised funds can only be used for the projects to which the raised funds have been publicly disclosed by the company. The board of directors of the company shall formulate a detailed plan for the use of funds to ensure that the use of funds is standardized, open and transparent.
Article 5 no one has the right to change the purpose of the raised funds without a resolution made by the general meeting of shareholders according to law. Article 6 the board of directors of the company shall be responsible for the use and management of the raised funds, and the board of supervisors, independent directors and recommendation institutions of the company shall exercise supervision over the management and use of the raised funds.
Article 7 this system is the company’s basic code of conduct for the use and management of raised funds. The company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the commitments in the prospectus or prospectus, and shall not change the investment direction of the raised funds at will.
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, it shall be announced in time.
If the raised capital investment project (hereinafter referred to as “raised investment project”) is implemented through the company’s subsidiaries or other enterprises controlled by the company, the company shall ensure that the subsidiaries or other enterprises controlled by the company comply with this system.
Article 8 the company shall cooperate with the sponsor to perform the responsibility of recommendation on the management of the company’s raised funds during the continuous supervision period, and carry out the continuous supervision on the management of the company’s raised funds.
Chapter II special account storage of raised funds
Article 9 the raised funds of the company shall be deposited in a special account approved by the board of directors (hereinafter referred to as the “special account”) for centralized management, and the special account shall not be used for non raised funds or other purposes. The actual net amount of raised funds exceeding the amount of planned raised funds (hereinafter referred to as “over raised funds”) shall also be deposited in the special account for the management of raised funds.
In principle, the number of special accounts for raised funds shall not exceed the number of projects invested by raised funds. Where multiple special accounts for raised funds are set up, the company shall also explain the reasons and put forward measures to ensure the efficient use of raised funds and effectively control the safety of raised funds.
The over raised funds shall also be deposited in the special account for the management of the raised funds.
Article 10 if the company has raised funds for more than two times, it shall set up separate special accounts for raised funds. Article 11 the company shall carefully select commercial banks to open special accounts for raised funds to store the raised funds. The establishment of special accounts and the storage of raised funds shall be handled by the company’s financial department.
Article 12 the company shall sign a three-party supervision agreement (hereinafter referred to as the “agreement”) with the recommendation institution or independent financial consultant 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 include at least 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 items of raised funds involved in the special account and the deposit amount;
(III) if the amount withdrawn from the special account by the company in one time or within 12 months exceeds 50 million yuan or 20% of the net amount of the total raised funds after deducting the issuance expenses (hereinafter referred to as the “net amount of raised funds”), 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) the recommendation institution or independent financial consultant can inquire the special account information at the commercial bank at any time;
(VI) the supervision responsibility of the recommendation institution or independent financial adviser, the notification and cooperation responsibility of the commercial bank, and the supervision mode of the recommendation institution or independent financial adviser and commercial bank on the use of the raised funds of the company;
(VII) 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;
(VIII) rights, obligations and liabilities for breach of contract of the company, commercial banks, recommendation institutions or independent financial advisers.
The company shall timely announce the main contents of the agreement after all the agreements are signed.
If the company implements a raised investment project through a holding subsidiary, the company, the holding subsidiary implementing the raised investment project, commercial banks, recommendation institutions or independent financial advisers shall jointly sign a tripartite supervision agreement, and the company and its holding subsidiary shall be regarded as a common party.
Article 13 the agreement shall be terminated in time within 1 month before the expiration of the new agreement.
Chapter III use of raised funds
Article 14 the company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the commitments in the prospectus or the prospectus, and shall not change the investment direction or use of the raised funds at will.
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.
Article 15 in principle, the raised funds shall be used for the company’s main business. The raised funds shall not be used to carry out entrusted financial management (except cash management), entrusted loans and other financial investments, as well as high-risk investments such as securities investment and derivatives trading, and shall not be directly or indirectly invested in companies whose main business is the purchase and sale of securities. The company shall not use the raised funds for pledge or investment that changes the purpose of the raised funds in a disguised form.
Article 16 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 other related parties, and take effective measures to prevent the related parties from using the raised investment projects to obtain improper interests.
Article 17 when the company draws up the investment project and use plan of the raised funds, it shall go through full discussion and demonstration, and then submit it to the board of directors for discussion and approval and the general meeting of shareholders for approval. The discussion and decision-making process shall have clear responsible persons and necessary original records.
On the basis of fully listening to the opinions of the sponsor, the board of directors shall put forward opinions on the investment projects and fund use plans. The board of directors shall discuss this opinion and put it on record.
During the discussion, the board of directors should pay attention to the role of independent directors and respect the opinions of independent directors.
Article 18 when using the raised funds, the company must apply in strict accordance with this system and go through the examination and approval procedures for the use of funds. For each expenditure involving the raised funds, the relevant department shall propose the fund use plan, which shall be submitted to the Finance Department of the company after being signed by the project leader. After being reviewed by the finance department, the payment shall be made after being signed by the finance leader and the general manager level by level. The investment beyond the scope of authorization shall be approved by the board of directors or the general meeting of shareholders.
The application for the use of raised funds mentioned in this system refers to the report submitted by the user department or unit on the use of raised funds, including the application purpose, amount, time of withdrawal or allocation of funds, etc.
Article 19 the company shall comprehensively check the progress of the investment projects with raised funds after the end of each fiscal year.
If the difference between the actual use of the raised funds in the year of the raised funds investment project and the estimated use amount of the latest disclosed raised funds investment plan in the current year exceeds 30%, the company shall adjust the investment plan of the raised funds investment project, and disclose the latest annual investment plan of the raised funds, the current actual investment progress The adjusted investment plan is expected to be divided into annual investment plans and the reasons for the change of investment plans.
Article 20 in case of any of the following circumstances in a raised investment project, the company shall re demonstrate the feasibility and expected income of the project and decide whether to continue to implement the project:
(I) significant changes have taken place in the market environment involved in the raised investment project;
(II) the raised investment project 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 raised investment project.
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 21 if the company decides to terminate the original investment project with raised funds, it shall select a new investment project as soon as possible and scientifically.
Article 22 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 adviser 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 schedule of the project invested by the raised 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 23 the company shall be deemed to have changed the purpose of the raised funds under the following circumstances:
（1） Cancel or terminate the original fund-raising projects and implement new projects;
（2） Change the implementation subject of the project invested by raised funds (except for the change of the implementation subject between the listed company and its wholly-owned subsidiaries);
（3） Change the implementation method of the project invested by the raised funds;
（4） Other circumstances identified by the stock exchange as changes in the purpose of the raised funds.
Article 24 Where the company replaces the self raised funds invested in the project with the raised funds, the accounting firm shall issue an assurance report.
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 25 If the company changes the implementation location of the raised investment project, it shall make a timely announcement after the deliberation and approval of the board of directors, stating the change, the reasons, the impact on the implementation of the raised investment project and the opinions issued by the recommendation institution or independent financial consultant.
Article 26 the company may temporarily use the idle raised funds to supplement the working capital, which is 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 time for a single replenishment of working capital shall not exceed 12 months;
(III) the previously raised funds used for temporary replenishment of working capital have been returned;
(IV) do not use idle raised funds to directly or indirectly make high-risk investments such as securities investment and derivatives trading.
Article 27 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 time, amount, net amount and investment plan of the funds raised;
(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 28 Where a company uses the temporarily idle raised funds for cash management, its investment products must meet the following conditions:
(I) principal guaranteed products with high security such as structured deposits and certificates of deposit;
(II) good liquidity 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 29 Where the company uses the temporarily 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 time of raising, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of raised funds;
(III) 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;
(IV) income distribution mode, investment scope and safety of investment products;
(V) opinions issued by independent directors, the board of supervisors, the recommendation institution or independent financial adviser.
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
