Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357)
Major financial decision management system
Article 1 in order to regulate Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) (hereinafter referred to as "the company")'s major financial decision-making behavior, improve the efficiency of corporate governance decision-making and economic benefits, and further avoid enterprise risks, according to the company law of the people's Republic of China, the securities law of the people's Republic of China, the governance standards of listed companies, the stock listing rules of Shanghai Stock Exchange and other laws This system is hereby formulated in accordance with the regulations, normative documents and Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) articles of Association (hereinafter referred to as the "articles of association").
Article 2 major financial decisions under this system refer to the company's decisions on the raising and use of major funds.
Article 3 the major financial information sources of the company include (but are not limited to) the following ways:
（1） The contents of financial budget and final accounts, dividend distribution and loss recovery in the company's annual report and business plan; （2） Contents of financial budget and final accounts, dividend distribution and loss recovery in the interim report and business plan adjustment plan of the company;
（3） The company's decision-making on issuing stocks and corporate bonds;
（4） The content of financing plan in the company's daily business activities;
（5） Various financial information from other sources.
Article 4 the screening of information on major financial decisions shall be carried out in the following ways:
（1） The president is responsible for summarizing all kinds of financial decision-making information and screening all kinds of information;
（2） The president is responsible for the necessary market certification of the proposed financial decision-making project, formulating the cost-benefit budget scheme, distinguishing priorities, and analyzing the risks and Countermeasures of the proposed financial decision-making project.
Article 5 the President shall be responsible for the transmission of major financial decision-making projects.
Article 6 the company's major financial decisions mainly include (but are not limited to) the company's annual financial budget and final accounts, financing plans, dividend distribution and loss recovery plans, etc.
Article 7 the company shall follow the following principles in its fund-raising decisions:
（1） The scale is appropriate to ensure the balance between the supply and demand of funds and prevent the shortage and surplus of funds;
（2） The structure is reasonable, which not only prevents excessive liabilities from increasing financial risks, but also avoids too low liabilities from reducing shareholders' income;
（3） Cost saving, comprehensively consider the capital cost of various financing methods, and reduce the average cost as much as possible;
（4） When the time is right, grasp the financing opportunity according to the investment opportunity to avoid the idle and lag of funds;
（5） Fund raising according to law, and the fund-raising behavior of the company must comply with national laws and regulations.
Article 8 dividend distribution decisions shall follow the following principles:
（1） When it comes to cash dividends, give priority to the accumulation of the company to ensure that the development of the company needs funds while taking into account the interests of shareholders;
（2） When it comes to stock dividends, the expansion speed of share capital should be appropriate, and the expansion of share capital should match the growth of the company's performance, so as to maintain the social image of the company's shares and maximize the interests of shareholders.
Article 9 the company's annual financial budget and final settlement plan, the company's annual financial profit distribution plan and loss recovery plan shall be formulated and proposed by the company's board of directors and reviewed and approved by the general meeting of shareholders.
Article 10 the annual report and plan, the financial budget and final accounts of dividend distribution and making up losses, issuing stocks and bonds shall be proposed by the president and the proposal and explanation of the plan shall be submitted to the meeting of the board of directors for deliberation. The supervisors shall attend the meeting as nonvoting delegates for supervision, which shall be approved by the general meeting of shareholders of the company after being deliberated and approved by the board of directors.
Article 11 Where the company raises funds by issuing bonds or other securities and listing, the board of directors of the company shall formulate a plan and submit it to the general meeting of shareholders for deliberation and approval.
Article 12 the decision-making procedure for the cumulative amount of the subject matter of the company's loan (loan) contract not to exceed 50% of the total assets in the latest audited consolidated financial statements is as follows:
（1） The finance department shall put forward the financing plan;
（2） President approval.
The decision-making procedures for new loan (loan) contracts after the subject amount of the company's loan (loan) contracts exceeds 50% of the total assets in the latest audited consolidated financial statements, but does not exceed 70% of the total assets in the latest audited consolidated financial statements are as follows:
（1） The finance department shall put forward the financing plan;
（2） President review;
（3） Report to the board of directors for approval.
The decision-making procedure for new loan (loan) contracts after the subject amount of the company's loan (loan) contracts exceeds 70% of the total assets in the latest audited consolidated financial statements is as follows:
（1） The finance department shall put forward the financing plan;
（2） President review;
（3） Report to the board of directors for deliberation;
（4） After being deliberated and approved by the board of directors, it shall be submitted to the general meeting of shareholders for approval.
Article 13 the approval authority of daily procurement contract adopts the hierarchical approval system according to the post authority of the procurement department, which is reviewed and approved by the authorized person or the president respectively. If the daily procurement involves connected transactions, the relevant provisions of the company on the decision-making procedures of connected transactions must be fulfilled.
Article 14 for daily sales, the sales department shall put forward the quotation scheme or intentional contract terms and submit them to the president or authorized person of the company for review and approval. If sales to related parties are involved, the relevant provisions of the company on the decision-making procedures of related party transactions shall be implemented.
Article 15 the company's authority and decision-making procedures related to external guarantee shall be implemented in accordance with the provisions of the company's external guarantee management system.
Article 16 if the company's directors and senior managers make decisions on relevant guarantee matters beyond their authority in violation of this system, or the company's staff provide guarantee (including mortgage, pledge and guarantee) without approval, the parties concerned shall be investigated for responsibility, and if economic losses are caused to the company, they shall be liable for compensation.
Article 17 the signing authority and decision-making procedures of the company's related party transaction contracts shall be implemented in accordance with the provisions of the company's related party transaction decision-making system.
Article 18 the company's assets reorganization such as acquisition, merger and sale of assets shall be formulated by the company's board of directors or the president authorized by the board of directors, and can be carried out only after the board of directors or the general meeting of shareholders make a resolution according to their respective authority.
Article 19 the authority and procedures of the company's foreign investment (excluding related party transactions and asset restructuring) and contract signing shall be implemented in accordance with the provisions of the company's foreign investment management system.
Article 20 the president is responsible for the implementation of financial projects. The President shall timely report the progress of project implementation to the board of directors, the board of supervisors and the general meeting of shareholders.
Article 21 the system shall come into force and be implemented from the date of deliberation and approval by the board of directors of the company, and the same shall apply to modification.
Article 22 the board of directors of the company is responsible for the interpretation of this system.
Article 23 matters not covered in this system shall be implemented in accordance with relevant laws, regulations, normative documents and the articles of Association; If the content of this system conflicts with laws, regulations, normative documents or the articles of association, the provisions of laws, regulations, normative documents and the articles of association shall prevail.
Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) March 9, 2002
