Shanghai Lily&Beauty Cosmetics Co.Ltd(605136)
Administrative measures for the use of raised funds
Chapter I General Provisions
Article 1 in order to standardize the use and management of the raised funds of Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) (hereinafter referred to as “the company”), improve the use efficiency of the raised funds, prevent the use risks of funds, ensure the safe use of funds and protect the interests of investors, According to the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of initial public offering and listing, the measures for the administration of securities issuance of listed companies, the provisions on the report on the use of previously raised funds, and the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies This system is formulated in combination with the actual situation of the company in accordance with the relevant provisions of laws, administrative regulations, rules and normative documents such as the Listing Rules of Shanghai Stock Exchange, the guidelines for self regulatory supervision of listed companies of Shanghai Stock Exchange No. 1 – standardized operation, and the Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 the funds raised in this system refer to the funds raised by the company from investors through public offering of securities (including initial public offering of shares, allotment of shares, additional issuance, issuance of convertible corporate bonds, issuance of convertible corporate bonds with separate transactions, etc.) and non-public offering of securities, but do not include the funds raised by the company through the implementation of 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 the board of directors of the company shall be responsible for establishing and improving the management system of the company’s raised funds and ensuring the effective implementation of the system. The management system of raised funds shall clearly stipulate the storage, use, change, supervision and accountability of the special account of raised funds, as well as the application for the use of raised funds, hierarchical approval authority, decision-making procedures, risk control measures and information disclosure procedures.
If the investment project with raised funds (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 the system.
Article 4 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.
The accounting department of the company shall set up an account for the use of the raised funds and record in detail the expenditure of the raised funds and the investment of the raised funds.
The internal audit department of the company shall inspect the storage and use of the raised funds at least once every six months, and report the inspection results to the audit committee in time.
If the audit committee of the company considers that there are violations or major risks in the management of the raised funds of the company, or the internal audit department fails to submit the inspection result report in accordance with the provisions of the preceding paragraph, it shall report to the board of directors in time. The board of directors shall timely report to the Shanghai Stock Exchange and make an announcement after receiving the report.
Article 5 the controlling shareholders and actual controllers of the company shall not directly or indirectly occupy or misappropriate the company’s raised funds, and shall not use the company’s raised funds and investment projects to obtain illegitimate interests.
Article 6 the recommendation institution or independent financial consultant shall perform the recommendation duties and conduct continuous supervision on the management and use of the company’s raised funds in accordance with the provisions of relevant laws and regulations and the system.
Chapter II deposit of raised funds
Article 7 the company shall prudently select the commercial bank to deposit the raised funds (hereinafter referred to as “commercial bank”) and open a special account for the raised funds (hereinafter referred to as “special account for raised funds”), and the raised funds of the company shall be deposited in the special account for raised funds approved by the board of directors for centralized management.
The special account for raised funds shall not deposit non raised funds or be used for other purposes.
If the company has raised funds for more than two times, it shall set up special accounts for raised funds respectively. The raised funds shall also be deposited in the special account for management.
Article 8 the company shall, within one month after the receipt of the raised funds, sign a tripartite supervision agreement with the recommendation institution, independent financial consultant and commercial bank on the storage of the raised funds in the special account. The agreement shall at least include the following contents:
(I) the company shall centrally deposit the raised funds in the special account for raised funds;
(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) the commercial bank shall provide the company with the bank statement of the special account for raised funds every month and send a copy to the recommendation institution or independent financial adviser;
(IV) if the company withdraws more than 50 million yuan from the special account for raised funds in one time or within 12 months and reaches 20% of the net amount of the total amount of raised funds after deducting the issuance expenses (hereinafter referred to as the “net amount of raised funds”), the company shall timely notify the recommendation institution or independent financial adviser;
(V) the recommendation institution or the independent financial consultant may inquire the information of the special account for raised funds at the commercial bank at any time;
(VI) the supervision responsibilities of the recommendation institution or independent financial adviser, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution or independent financial adviser and commercial bank on the use of the company’s raised funds;
(VII) liability for breach of contract of the company, commercial bank, recommendation institution or independent financial consultant;
(VIII) if a commercial bank fails to issue a statement of account to the recommendation institution or the independent financial consultant in time for three times, or fails to cooperate with the recommendation institution or the independent financial consultant in querying and investigating the information of the special account, the company may terminate the agreement and cancel the special account for raised funds. If the above agreement is terminated in advance before the expiration of the term of validity, the company shall sign a new agreement with relevant parties within two weeks from the date of termination of the agreement and make a timely announcement.
Chapter III use of raised funds
Article 9 the company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the commitments in the issuance application documents, 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.
Article 10 in principle, the funds raised by the company shall be used for its main business. The use of raised funds shall not have the following acts:
(I) except for financial enterprises, raised investment projects are financial investments such as holding trading financial assets and other equity instruments, lending to others and entrusted financial management, which are directly or indirectly invested in companies whose main business is trading securities;
(II) changing the purpose of the raised funds in a disguised form through pledge, entrusted loan or other means;
(III) directly or indirectly provide the raised funds to the controlling shareholders, actual controllers and other related persons for use, so as to facilitate the related persons to obtain illegitimate interests by using the raised investment project;
(IV) other acts in violation of the provisions on the management of raised funds.
Article 11 the use of raised funds shall be applied for and approved in accordance with the following procedures:
(I) the specific user department fills in the application form;
(II) opinions signed by the person in charge of finance;
(III) approval by the general manager;
(IV) implemented by the financial department.
Article 12 the company shall comprehensively check the progress of raised investment projects after the end of each fiscal year. Article 13 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 investment plan of the raised funds and the investment amount of the raised funds does not reach 50% of the relevant plan amount;
(IV) other abnormal situations 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 14 If the company invests self raised funds into projects invested with raised funds in advance, it can replace the self raised funds with the raised funds within 6 months after the arrival of the raised funds.
The replacement matters shall be deliberated and approved by the board of directors of the company, the accounting firm shall issue an assurance report, and the independent directors, the board of supervisors, the recommendation institution or the independent financial consultant shall express their explicit consent. The company shall report to the Shanghai Stock Exchange and make an announcement within 2 trading days after the meeting of the board of directors.
Article 15 the temporarily idle raised funds can be managed in cash, and the invested 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 report to Shanghai stock exchange for filing and announcement within 2 trading days.
(III) the term of investment products shall not be longer than the use term authorized by internal resolutions, and shall not exceed 12 months. After the due funds of the above investment products are returned to the special account for raised funds on schedule and announced, the company can carry out cash management again within the authorized period and amount.
Article 16 the use of idle raised funds to invest in products shall be examined and approved by the board of directors of the company, and the independent directors, the board of supervisors, the recommendation institution or the independent financial adviser shall express their explicit consent. The company shall announce the following contents within 2 trading days 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) the amount and term of idle raised funds investment products, whether there is any behavior of changing the purpose of raised funds in a disguised form and measures to ensure that the normal progress of raised funds projects will not be affected;
(IV) income distribution mode, investment scope and safety of investment products;
(V) opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers.
The company shall, in case of major risks such as the deterioration of the financial situation of the product issuer and the loss of the invested products, timely disclose the risk prompt announcement and explain the risk control measures taken by the company to ensure the safety of funds.
Article 17 the company’s temporary use of idle raised funds to supplement working capital shall meet the following requirements: (I) the purpose of raised funds shall not be changed in a disguised form, and the normal progress of the investment plan of raised funds shall not be affected; (II) it is limited to the production and operation related to the main business, and shall not be directly or indirectly arranged for the placement and purchase of new shares, or for the trading of stocks and their derivatives, convertible corporate bonds, etc; (III) the time for a single replenishment of working capital shall not exceed 12 months;
(IV) the funds previously raised for temporary replenishment of working capital that have been returned and have expired (if applicable). If the company uses idle raised funds to supplement working capital temporarily, it shall be deliberated and approved by the board of directors of the company, and the independent directors, recommendation institutions, independent financial advisers and the board of supervisors shall express their explicit consent. The company shall report to Shanghai Stock Exchange and make an announcement within 2 trading days after the meeting of the board of directors. Before the due date of replenishing working capital, the company shall return this part of funds to the special account for raised funds, and report to Shanghai Stock Exchange and make an announcement within 2 trading days after the return of all funds.
Article 18 the over raised funds can be used for permanent replenishment of working capital or repayment of bank loans, but the cumulative amount used within each 12 months shall not exceed 30% of the total amount of over raised funds, and shall promise not to make high-risk investment or provide financial assistance to others within 12 months after replenishing working capital.
Article 19 Where the over raised funds are used for permanent replenishment of working capital or repayment of bank loans, they shall be deliberated and approved by the board of directors and the general meeting of shareholders of the company, and the online voting method shall be provided for the shareholders, and the independent directors, the board of supervisors, the recommendation institution or the independent financial consultant shall express their consent. The company shall report to the Shanghai Stock Exchange within 2 trading days after the meeting of the board of directors and announce the following contents:
(I) basic information of the funds raised this time, including the time of raising, amount of funds raised, net amount of funds raised, over raised amount and investment plan;
(II) use of raised funds;
(III) the necessity and detailed plan for permanently replenishing working capital or repaying bank loans with over raised funds;
(IV) commitment not to make high-risk investment and provide financial assistance to others within 12 months after replenishing working capital;
(V) the impact of permanently replenishing working capital or repaying bank loans with over raised funds on the company; (VI) opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers.
Article 20 Where the company uses the over raised funds for projects under construction and new projects (including the acquisition of assets, etc.), it shall invest in the main business, apply the relevant provisions of this system on the investment direction change of raised funds, scientifically and prudently analyze the feasibility of investment projects, and timely fulfill the obligation of information disclosure.
Article 21 after the completion of a single raised investment project, if the company uses the surplus raised funds (including interest income) of the project for other raised investment projects, it shall be reviewed and approved by the board of directors and can only be used after the opinions of independent directors, recommendation institutions, independent financial consultants and the board of supervisors. The company shall report to the Shanghai Stock Exchange and make an announcement within 2 trading days after the meeting of the board of directors.
If the surplus raised funds (including interest income) are less than 1 million or less than 5% of the committed investment amount of the raised funds of the project, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the annual report.
If the surplus raised funds (including interest income) of a single raised investment project of the company are used for non raised investment projects (including supplementary working capital), the corresponding procedures and disclosure obligations shall be performed with reference to the change of raised investment projects.
Article 22 after all the projects invested by raising funds are completed, the company’s use of the surplus raised funds (including interest income) shall be deliberated and approved by the board of directors, and shall be expressly agreed by the independent directors, recommendation institutions, independent financial consultants and the board of supervisors. The company shall make a timely announcement after the deliberation of the board of directors. If the surplus raised funds (including interest income) account for more than 10% of the net raised funds, it shall also be deliberated and approved by the general meeting of shareholders.
If the net amount of interest raised is less than RMB 5 million in the most recent period, it can be included in the performance report, and the use of the funds raised (which should be less than RMB 5 million) can be exempted.
Article 23 Where a project invested by raising funds has not been completed beyond the original completion period and plans to continue to be implemented on schedule, the company shall timely disclose the specific reasons for the failure to complete on schedule, and explain the current deposit and account of the raised funds, whether there are circumstances affecting the normal progress of the use plan of the raised funds, the expected completion time, and relevant measures to ensure the completion on schedule after the delay, And perform corresponding decision-making procedures for the extension of raised investment projects.
