Management system for external financial assistance
Chapter I General Provisions
Article 1 in order to regulate Ninestar Corporation(002180) (hereinafter referred to as “the company”) providing financial assistance to foreign countries, prevent financial risks and ensure the stable operation of the company, in accordance with the company law, the securities law, the measures for the administration of information disclosure of listed companies, the stock listing rules of Shenzhen Stock Exchange and the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange This system is formulated in combination with the actual situation of the company in accordance with the relevant laws and regulations and the articles of association of Ninestar Corporation(002180) (hereinafter referred to as the articles of association). Article 2 the “external financial assistance” mentioned in this system refers to the external provision of funds and entrusted loans by the company and its holding subsidiaries with or without compensation, except for the following circumstances:
(i) The company’s main business is to provide external loans, loans and other financing services;
（2） The subsidy object is the holding subsidiary within the scope of the company’s consolidated statements with a shareholding ratio of more than 50%;
（3） Other circumstances recognized by the CSRC or Shenzhen Stock Exchange.
The financial assistance provided by the company to the holding subsidiary formed by joint investment with related parties shall be implemented with reference to the provisions of this system.
Article 3 where a listed company is under any of the following circumstances, the provisions of this section shall apply mutatis mutandis:
(i) Outside the main business scope, provide external subsidies in the form of physical assets and intangible assets.
（2） Bear expenses for others.
（3） The fees for providing or collecting the right to use assets free of charge are significantly lower than the general level of the industry.
（4） The proportion of advance payment is significantly higher than the general level of the same industry.
（5） Other acts that constitute substantial financial assistance recognized by Shenzhen Stock Exchange.
Article 4 the company shall fully protect the legitimate rights and interests of shareholders, provide financial assistance to others in accordance with the principle of equality and voluntariness, and the object receiving financial assistance shall provide guarantee.
Article 5 the company shall not provide financial assistance such as funds for directors, supervisors, senior managers, controlling shareholders, actual controllers and their controlling subsidiaries.
Where a listed company provides financial assistance such as funds to a holding subsidiary or joint-stock company whose shareholding ratio does not exceed 50%, the other shareholders of the holding subsidiary or joint-stock company shall, in principle, provide financial assistance with the same conditions according to the proportion of capital contribution. If other shareholders fail to provide financial assistance to the holding subsidiary or joint-stock company of the listed company with the same conditions or proportion of capital contribution, they shall explain the reasons and disclose the counter guarantee and other measures that the listed company has required the above-mentioned other shareholders to take.
If a listed company provides financial assistance such as funds for its holding subsidiaries and joint-stock companies, and one or more of the other joint-stock shareholders of the holding subsidiaries and joint-stock companies are the controlling shareholders, actual controllers and related persons of the listed company, the related shareholders shall provide financial assistance with the same conditions according to the proportion of capital contribution. If the related shareholder fails to provide financial assistance to the holding subsidiary or joint-stock company of the listed company with the same conditions or proportion of capital contribution, the listed company shall submit the above external financial assistance to the general meeting of shareholders for deliberation, and the shareholders associated with the matter shall withdraw from voting.
Article 6 when providing external financial assistance, the company shall sign an agreement with the object of financial assistance and other relevant parties, specifying the conditions to be observed by the object of financial assistance, the amount, duration, liability for breach of contract, etc.
If the financial assistance is not recovered within the time limit, the company shall timely disclose the reasons and whether feasible remedial measures have been taken, and fully explain the judgment of the board of directors on the solvency of the funded object and the recovery risk of the financial assistance. Before the overdue financial assistance is recovered, the company shall not provide additional financial assistance to the same object.
Article 7 the company shall not provide external financial assistance during the following periods:
(i) The period during which idle raised funds are used to temporarily supplement working capital;
（2） Within 12 months after the over raised funds repay bank loans or permanently supplement working capital.
Chapter II examination and approval authority and procedures for external financial assistance
Article 8 the company’s external financial assistance must be reviewed by the board of directors or the general meeting of shareholders.
Article 9 Where the company’s external financial assistance falls into one of the following circumstances, it shall be submitted to the general meeting of shareholders for deliberation and approval after being deliberated and approved by the board of directors, unless otherwise stipulated by Shenzhen Stock Exchange:
(i) The latest audited asset liability ratio of the funded object exceeds 70%;
（2） The amount of single financial assistance or the cumulative amount of financial assistance provided within 12 consecutive months exceeds 10% of the company’s latest audited net assets;
（3） Other circumstances stipulated by Shenzhen Stock Exchange or the articles of association.
Article 10 before the board of Directors considers the provision of external financial assistance, the directors shall actively understand the basic information of the funded party, such as operation and financial status, credit status, tax payment, etc.
When the board of Directors considers the provision of financial assistance, the directors shall make prudent judgments on the compliance and rationality of the provision of financial assistance, the repayment ability of the funded party and the effectiveness of guarantee measures.
Article 11 when providing financial assistance, a listed company shall obtain the consent and make a resolution of more than two-thirds of the directors present at the board of directors, and timely perform the obligation of information disclosure.
Article 12 when the board of directors of the company deliberates on financial assistance matters, the independent directors, recommendation institutions or independent financial advisers (if any) of the company shall express their opinions on the legality and compliance, impact on the company and existing risks of the matters.
Chapter III operating procedures for external financial assistance
Article 13 before providing external financial assistance, the finance department shall be responsible for the risk investigation of the financially funded enterprises in terms of asset quality, operation, industry prospect, solvency and credit status, and the internal audit department shall review the risk assessment provided by the finance department.
Article 14 the company shall perform the examination and approval procedures in accordance with the examination and approval authority required by this system when providing financial assistance to foreign countries.
Article 15 after being deliberated and approved by the board of directors or the general meeting of shareholders, the Securities Department of the company shall do a good job in information disclosure and cooperate with the finance department to go through the procedures of external financial assistance; Cooperate with the finance department to be responsible for the tracking, supervision and other related work of the funded enterprises in the future.
Article 16 the audit committee shall supervise the internal audit department to inspect the external financial assistance at least once every six months, issue an inspection report and submit it to the audit committee. If a listed company is found to have violations of laws and regulations, non-standard operation, etc., it shall report to the Shenzhen Stock Exchange in a timely manner.
The audit committee shall issue a written evaluation opinion on the effectiveness of the company’s internal control according to the internal audit report and relevant materials submitted by the internal audit department, and report to the board of directors. If the board of directors or the audit committee considers that there are major defects or major risks in the company’s internal control, the board of directors shall timely report to the Shenzhen Stock Exchange and disclose them. The company shall disclose in the announcement the major defects or risks in internal control, the consequences that have been or may be caused, and the measures that have been taken or are to be taken.
Chapter IV disclosure of information on external financial assistance
Article 17 when disclosing the provision of financial assistance, the company shall announce the following contents within two trading days after the deliberation and approval of the board of directors:
1. An overview of financial assistance matters, including the main contents of the financial assistance agreement, the purpose of funds and the approval procedures for financial assistance matters;
2. Basic information of the funded object, including but not limited to the time of establishment, registered capital, controlling shareholder, actual controller, legal representative, main business Main financial indicators (at least including the audited total assets, total liabilities, owner’s equity attributable to the parent company, operating revenue, net profit attributable to the owner of the parent company, etc.) and credit status of the most recent year; Whether there is a related relationship with the listed company, and if so, the specific related circumstances shall be disclosed; The financial assistance provided by the listed company to the object in the previous fiscal year;
3. The risk prevention measures taken include but are not limited to whether the funded object or other third parties provide guarantee for financial assistance. Where a third party provides guarantee for financial assistance, it shall disclose the basic information of the third party and its guarantee performance ability;
4. Where financial assistance is provided to a holding or participating subsidiary formed by joint investment with related parties, the basic information of other shareholders of the funded object, the relationship with the company and the performance of corresponding obligations according to the proportion of capital contribution shall be disclosed; If other shareholders fail to provide financial assistance to the holding or participating subsidiary according to the same conditions and proportion of capital contribution, they shall explain the reasons and the reasons why the interests of the company have not been damaged;
5. The opinions of the board of directors mainly include the reasons for providing financial assistance, and disclose the benefits, risks and fairness of the financial assistance on the basis of a comprehensive assessment of the asset quality, operation, industry prospect, solvency, credit status, third-party guarantee and performance ability of the funded object, And the judgment of the board of directors on the debt repayment ability of the financial aid object;
6. Opinions of independent directors, mainly expressing independent opinions on the necessity, legal compliance, fairness, impact on the rights and interests of the company and minority shareholders and existing risks of the matter;
7. Opinions of the recommendation institution, mainly expressing verification opinions on the legality, compliance, fairness and existing risks of financial assistance matters (if applicable);
8. The accumulated amount of financial assistance provided by the company and the amount overdue;
9. Other contents required by Shenzhen Stock Exchange.
Article 18 for the disclosed financial assistance, the company shall also timely disclose the relevant information and the measures to be taken in one of the following circumstances:
1. The funded object fails to repay in time after the agreed funding period expires;
2. Financial difficulties, insolvency, cash flow difficulties, bankruptcy and other situations that seriously affect the repayment ability of the funded object or the third party providing guarantee for financial assistance;
3. Other circumstances recognized by Shenzhen Stock Exchange.
Chapter V supplementary provisions
Article 19 the provisions of this system shall apply to the financial assistance provided by the holding subsidiaries of the company.
Article 20 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the articles of association of the company. If the system is inconsistent with relevant laws, regulations, normative documents and the articles of association, the provisions of relevant laws, regulations, normative documents and the articles of association shall prevail. Article 21 the system shall be revised and interpreted by the board of directors of the company.
Article 22 the system shall come into force on the date of adoption by the board of directors.
Board of directors
December 23, 2001
