Financing and external guarantee management system
Chapter I General Provisions
Article 1 in order to standardize the financing and external guarantee management of Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) (hereinafter referred to as “the company”), effectively control the financing risk and external guarantee risk of the company, and protect the financial security of the company and the legitimate rights and interests 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, the Listing Rules of Shanghai Stock Exchange, the guidelines for the supervision of listed companies No. 8 – regulatory requirements for capital exchanges and external guarantees of listed companies and other laws, administrative regulations and rules This system is formulated in accordance with the relevant provisions of normative documents and Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 the term “financing” as mentioned in this system refers to the company’s indirect financing to financial institutions dominated by banks, mainly including comprehensive credit, working capital loans, technical transformation and fixed asset loans, letter of credit financing, bill financing and issuance of letter of guarantee.
The system is not applicable to the direct financing of the company.
Article 3 the term “external guarantee” as mentioned in this system refers to the guarantee, mortgage, pledge or other forms of guarantee provided by the company to others as a third party.
This system is not applicable to the guarantee provided by the company for its own debts (including its holding subsidiaries).
Article 4 the company’s financing and external guarantee shall follow the principles of prudence, equality, mutual benefit, voluntariness and good faith. The controlling shareholder and other related parties shall not force the company to provide guarantee for others.
Article 5 the independent directors of the company shall express their independent opinions when the board of Directors considers the external guarantee matters, and may employ an accounting firm to verify the company’s accumulated and current external guarantee conditions when necessary. If any abnormality is found, it shall be reported to the board of directors and regulatory authorities in time and announced. In the annual report, the independent directors of the company shall make special explanations on the company’s accumulated and current external guarantees and the implementation of the above provisions, and express independent opinions. Chapter II examination and approval of corporate financing
Article 6 the Finance Department of the company, as the management department of financing matters, shall report the financing matters of the company to the general manager, the board of directors or the general meeting of shareholders for approval according to the authority specified in Articles 7 to 9 of this system after preliminary review. If the amount of the company’s total assets and liabilities in the latest accounting period does not exceed 10% after being audited by the general meeting of shareholders, the company’s total assets and liabilities in the latest accounting period shall not exceed 10% (if the company’s total assets and liabilities in the latest accounting period are not approved by the general meeting of shareholders).
Article 8 where the asset liability ratio indicated in the latest audited financial statements of the company does not exceed 70%, the single financing amount of the company or the cumulative financing amount in an accounting year will exceed 10% but not more than 30% (including 30%) of the latest audited net asset value of the company, it shall be reported to the board of directors for approval. When the asset liability ratio indicated in the latest audited financial statements of the company exceeds 70%, the financing matters of the company must be reported to the general meeting of shareholders for deliberation and approval.
Article 9 if the company’s single financing amount or cumulative financing amount in an accounting year will exceed 30% of the company’s latest audited net asset value, or financing is carried out after meeting the above standards, it shall be reviewed and approved by the board of directors and reported to the general meeting of shareholders for approval.
Article 10 the general manager, the board of directors or the general meeting of shareholders of the company shall carefully review the business plan and financing purpose involved in the financing matters when considering the financing application submitted by the Finance Department of the company according to the above authority. For projects requiring the approval of the government or relevant competent departments, relevant approval documents shall be checked; If the board of directors or the general meeting of shareholders deems it necessary, it may employ external financial or legal professional institutions to provide professional opinions on such financing matters as the basis for the decision-making of the board of directors and the general meeting of shareholders.
When applying for financing, a branch or holding subsidiary of the company shall also submit a financing application and approve it in accordance with the authority of Articles 7 to 9 above.
Chapter III conditions for the company to provide external guarantee
Article 11 when providing external guarantee, the company must review the credit of the guaranteed object, and the guaranteed object shall meet the following requirements:
(I) have independent legal personality;
(II) strong solvency.
(III) comply with the relevant provisions of the articles of association.
Article 12 the company may provide guarantee for units with independent legal personality and one of the following conditions:
(I) mutual insurance units required by the company’s business;
(II) units with important business relations with the company;
(III) units with potentially important business relations with the company;
(IV) holding subsidiaries of the company and other units with control relationship.
The above units must have strong solvency and comply with the relevant provisions of this system.
Article 13 if the company considers that it is necessary to develop its business and cooperative relationship with the guarantor who does not meet the conditions listed in Article 12 of the system, and the risk is small, the guarantor can be provided with the consent of more than two-thirds of the directors attending the meeting of the board of directors or after the deliberation and approval of the general meeting of shareholders.
Article 14 before deciding to provide guarantee for others or submitting it to the shareholders’ meeting for voting, the board of directors of the company shall master the credit status of the debtor and fully analyze the interests and risks of the guarantee.
Article 15 for external guarantee, the company must require the other party to provide counter guarantee, and the provider of counter guarantee shall have actual bearing capacity. The counter guarantee or other effective risk prevention measures provided by the guarantor must correspond to the amount of guarantee. If the property of the guarantor applying for the creation of a counter guarantee is prohibited from circulation or non transferable by laws and regulations, the guarantor shall refuse the guarantee.
Chapter IV approval of external guarantee provided by the company
Article 16 the external guarantee of the company must be deliberated by the board of directors or the general meeting of shareholders. If a holding subsidiary of the company provides a guarantee to an entity outside the scope of the company’s consolidated statements, it shall be deemed that the company provides a guarantee, and the company shall implement it in accordance with the provisions of this system.
Article 17 the Finance Department of the company, as the management department of external guarantee matters, shall report the external guarantee matters of the company to the board of directors or the general meeting of shareholders for approval according to the authority specified in Article 19 of the system after preliminary review.
Article 18 when submitting an application for external guarantee to the board of directors, the Finance Department of the company shall submit the materials related to such guarantee matters as the application attachments, which include but are not limited to:
(I) the basic information of the guaranteed and the copy of the business license of the enterprise legal person that has been inspected annually;
(II) the audited financial statements and business analysis report of the guaranteed for the latest year and period; (III) the text of the main debt contract to be signed between the main debtor and the creditor;
(IV) relevant information of the main debt involved in this guarantee (analysis report of expected economic effect, etc.); (V) the text of the guarantee contract to be signed;
(VI) description of the counter guarantee contract to be signed and the basic information of the real estate, chattel or right to be used as the collateral of the counter guarantee and copies of relevant right certificates;
(VII) other relevant materials.
If the board of directors or the general meeting of shareholders deems it necessary, it may employ external financial or legal professional institutions to provide professional opinions on such external guarantee matters as the basis for the decision-making of the board of directors and the general meeting of shareholders.
Article 19 the following external guarantees of the company shall be submitted to the general meeting of shareholders for deliberation and approval after being approved by the resolution of the board of directors.
(I) the amount of a single guarantee exceeds 10% of the latest audited net assets;
(II) any guarantee provided after the total external guarantee of the company and its holding subsidiaries exceeds 50% of the latest audited net assets;
(III) any guarantee provided after the total external guarantee of the company and its holding subsidiaries exceeds 30% of the company’s total audited assets in the latest period;
(IV) the guarantee provided for the guarantee object whose asset liability ratio exceeds 70%;
(V) according to the principle of cumulative calculation of the guarantee amount within 12 consecutive months, the guarantee exceeding 30% of the company’s latest audited total assets;
(VI) guarantees provided to shareholders, actual controllers and their related parties.
(VII) other guarantees that need to be considered by the general meeting of shareholders as stipulated by the Shanghai Stock Exchange or the articles of association.
The guarantee in Item (V) of the preceding paragraph shall be approved by more than two-thirds of the voting rights held by the shareholders attending the meeting.
If the single guarantee amount and cumulative balance of the company’s external guarantee do not meet the standards mentioned in the preceding paragraph, it can be implemented only after more than two-thirds of all members of the board of directors sign and agree.
Article 20 when the board of directors or the general meeting of shareholders of the company votes on the external guarantee, the directors or shareholders associated with the guarantee shall withdraw from voting.
If the number of directors with voting rights is less than three due to the avoidance of voting by affiliated directors, the general meeting of shareholders shall make relevant resolutions on such external guarantees.
When the general meeting of shareholders deliberates the proposal to provide guarantee for shareholders, actual controllers and their related parties, such shareholders or shareholders controlled by such actual controllers shall not participate in the voting.
Article 21 when the board of directors or the general meeting of shareholders of the company votes on more than two external guarantees at the same meeting, they shall vote on each guarantee item by item.
Chapter V Implementation and risk management of corporate financing and external guarantee
Article 22 after the financing or external guarantee of the company is approved by the general manager, the board of directors or the general meeting of shareholders, the chairman of the company or his authorized person shall sign the financing contract or guarantee contract on behalf of the company. After the financing or external guarantee of the company’s holding subsidiary is approved by the general manager, the board of directors or the general meeting of shareholders, the chairman of the holding subsidiary or his authorized person shall sign the financing contract or guarantee contract on behalf of the company.
Article 23 a guarantee contract shall at least include the following contents:
(I) type and amount of principal creditor’s rights guaranteed;
(II) the time limit for the debtor to perform its obligations;
(III) guarantee method;
(IV) scope of guarantee;
(V) guarantee period;
(VI) other matters that the parties consider necessary to be agreed.
Article 24 when a guarantee contract is concluded, the finance department and the legal department must comprehensively and carefully examine the signing subject and relevant contents of the main contract, guarantee contract and counter guarantee contract. The other party shall be required to amend the provisions that violate laws, regulations, the articles of association, the relevant resolutions of the board of directors or the general meeting of shareholders and impose unreasonable obligations or unpredictable risks on the company. If the other party refuses to modify, the finance department and the legal department shall refuse to provide guarantee and report to the board of directors or the general meeting of shareholders.
Article 25 when accepting counter guarantee mortgage and counter guarantee pledge, the Finance Department of the company, together with the legal department of the company, shall improve the relevant legal procedures, especially the registration of mortgage or pledge in time.
Article 26 the financing contract or guarantee contract concluded by the company shall be submitted to the company’s finance department and the company’s legal department for registration within 10 days from the date of signing.
Article 27 If the financing matters and external guarantee matters that have been approved in accordance with the authority specified in Chapter II and Chapter IV of this system fail to sign relevant financing contracts or guarantee contracts within 60 days after the approval, and the financing or guarantee procedures are handled after the time limit is exceeded, they shall be regarded as new financing or guarantee matters, and the approval procedures shall be handled again in accordance with the provisions of this system.
Article 28 If the guaranteed debt needs to be extended after maturity and the company needs to continue to provide guarantee, it shall be regarded as a new external guarantee, and the examination and approval procedures of guarantee application must be performed in accordance with the procedures specified in this system.
Article 29 when using the funds obtained through financing, they shall be used according to the purpose of the funds specified in the financing contract. If it is really necessary to change the purpose, the fund using department shall submit an application and perform the approval procedures in accordance with the relevant authorities specified in Articles 7 to 9 of this system.
Article 30 if the Finance Department of the company is expected to be unable to repay the loan at maturity, it shall timely understand the reasons for the overdue repayment and jointly formulate an emergency plan with relevant departments.
If the financing period needs to be extended at the expiration of the financing period, the Finance Department of the company shall timely report to the board of directors and explain the reasons and repayment period.
Article 31 the company shall appoint the finance department to calculate the interest and rent in strict accordance with the principal, interest rate, term and currency specified in the financing contract or agreement, and check with the creditor after being reviewed and confirmed by relevant personnel. The principal and interest payable must be reconciled regularly with the creditor. In case of any discrepancy, the cause shall be found out and handled in time according to the authority.
Article 32 the company shall go through the examination and approval procedures to pay the financing interest, dividend and rent, and can only pay them with the approval of the authorized personnel.
Article 33 when the company pays the principal and interest with non monetary assets, the value shall be reasonably determined by relevant institutions or personnel, and reported to the authorized approval department for approval. If necessary, the company may entrust an institution with corresponding qualifications to conduct evaluation.
Article 34 If the Finance Department of the company finds that the payment method, amount or currency of various approved funds to be paid are inconsistent with relevant contracts or agreements during the payment process of financing business, it shall refuse to pay and report to the general manager, the board of directors or the general meeting of shareholders in time. The general manager, the board of directors or the general meeting of shareholders shall find out the reasons and deal with them.
Article 35 The Finance Department of the company shall strengthen the risk management of the guaranteed debt and urge the guaranteed to repay in time. The Finance Department of the company shall urge the branches and holding subsidiaries of the company to establish relevant risk management systems. The main responsibilities of the company’s finance department are as follows:
(I) conduct credit investigation and evaluation on the guaranteed unit;
(II) handle guarantee procedures;
(III) follow up, inspect and supervise the guaranteed unit after external guarantee;
(IV) earnestly do a good job in the filing and management of documents related to the guaranteed enterprise;
(V) timely and truthfully provide all external guarantees of the company to the audit institution of the company in accordance with the regulations;
(VI) other matters related to guarantee.
Article 36 in the process of external guarantee, the legal department shall assist in handling, and its main responsibilities are as follows:
(I) cooperate with the financial department in the credit investigation and evaluation of the guaranteed unit;
(II) be responsible for reviewing all documents related to guarantee;
(III) handle legal disputes related to external guarantee;
(IV) the company
