Hengdian Group Dmegc Magnetics Co.Ltd(002056)
External guarantee management system
Chapter I General Provisions
Article 1 in order to effectively control the external guarantee risk of Hengdian Group Dmegc Magnetics Co.Ltd(002056) (hereinafter referred to as “the company”), protect the legitimate rights and interests of investors and promote the healthy and stable development of the company, according to the company law of the people’s Republic of China and the guidelines for the supervision of listed companies No. 8 – regulatory requirements for capital exchanges and external guarantees of listed companies (hereinafter referred to as “supervision No. 8”) This system is formulated in accordance with the relevant laws, administrative regulations, normative documents and the articles of association, such as the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board (hereinafter referred to as “standardized operation”).
Article 2 the term “external guarantee” as mentioned in this system refers to the guarantee provided by the company for others, including the guarantee of the company to its holding subsidiaries.
Article 3 where a holding subsidiary of the company provides a guarantee to an entity outside the scope of the company’s consolidated statements, it shall be regarded as providing a guarantee by the company and shall be implemented in accordance with the provisions of this system.
Article 4 the external guarantee of the company is subject to unified management. Without the approval of the board of directors or the general meeting of shareholders, no one has the right to sign contracts, agreements or other similar legal documents for external guarantee in the name of the company.
Article 5 the directors and senior managers of the company shall carefully treat and strictly control the debt risks arising from the guarantee, and bear joint and several liabilities for the losses arising from the illegal or improper external guarantee according to law.
Article 6 the company’s external guarantee shall follow the principles of legality, prudence, mutual benefit and safety, and strictly control the guarantee risk.
Article 7 where the company provides guarantee for the controlling shareholder, actual controller and their affiliates, the controlling shareholder, actual controller and their affiliates shall provide counter guarantee.
If the company and its holding subsidiaries provide guarantees for non wholly-owned subsidiaries, in principle, other shareholders of the subsidiaries shall be required to provide the same guarantee or counter guarantee and other risk control measures according to the proportion of capital contribution. If other shareholders of a subsidiary cannot provide the same guarantee or counter guarantee and other risk control measures due to objective reasons, the board of directors of the company shall fully explain the reasons.
Article 8 in the annual report, the independent directors of the company shall make a special explanation on the external guarantees that have not been fulfilled at the end of the reporting period and that have occurred in the current period, and the implementation of regulation No. 8, and express independent opinions.
Chapter II examination of external guarantee objects
Article 9 the company can 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;
(V) other units that the Company deems necessary to provide guarantee.
The above units must have strong solvency and comply with the relevant provisions of this system.
Article 10 before the board of directors of the company considers the proposal to provide guarantee, the directors shall fully understand the operation and credit status of the guaranteed party, and carefully analyze the financial status, operation status and credit status of the guaranteed party.
The directors shall make a prudent judgment on the compliance and rationality of the guarantee, the ability of the guaranteed party to repay the debt and the effectiveness of the counter guarantee measures.
When considering the guarantee proposal for the company’s holding subsidiaries and joint-stock companies, the board of directors shall focus on whether other shareholders of the holding subsidiaries and joint-stock companies provide the same guarantee or counter guarantee and other risk control measures according to the proportion of capital contribution.
If other shareholders of the above-mentioned company fail to provide the same guarantee and other risk control measures to the company’s holding subsidiaries or joint-stock companies according to the proportion of capital contribution, the board of directors of the company shall disclose the main reasons, and fully explain whether the guarantee risk is controllable and whether it damages the interests of the listed company on the basis of analyzing the operation and solvency of the guarantee object.
The company may, when necessary, hire an external professional institution to assess the guarantee risk as the basis for the decision-making of the board of directors or the general meeting of shareholders.
Article 11 the information on the credit status of an applicant for a guarantor shall at least include the following contents:
(I) basic information of the enterprise, including business license, copy of articles of association, identity certificate of legal representative, relevant information reflecting the relationship with the company and other relationships, etc;
(II) guarantee application, including but not limited to guarantee method, term, amount, etc;
(III) enterprise credit certificate, audited financial report and repayment ability analysis in recent three years;
(IV) copies of the main contract related to the loan;
(V) a description of the repayment plan of the guaranteed debt and the source of repayment funds;
(VI) conditions and relevant materials (if any) for applying for the guarantor to provide counter guarantee;
(VII) description of no potential and ongoing major litigation, arbitration or administrative punishment;
(VIII) other important materials deemed necessary by the board of directors of the company.
Article 12 according to the basic information provided by the guarantor applicant, the company shall organize the investigation and verification of the guarantor applicant’s business and financial status, project status, credit status and development prospects, review in accordance with the contract approval procedures, and submit the relevant information to the board of directors or the general meeting of shareholders for approval.
Article 13 the board of directors or the general meeting of shareholders of the company shall review and vote on the submitted materials, and record the voting results. No guarantee shall be provided for any of the following circumstances or insufficient information. (I) the investment of funds does not comply with national laws and regulations or national industrial policies;
(II) there are false records or false materials in the financial and accounting documents in the last three years;
(III) the company has provided guarantee for it, and there have been overdue loans and interest arrears, which have not been repaid or effective treatment measures cannot be implemented by the time of this guarantee application;
(IV) the business condition has deteriorated, the reputation is bad, and there is no sign of improvement;
(V) other circumstances in which the board of Directors considers that the guarantee cannot be provided.
Chapter III Procedures for examination and approval of external guarantees
Article 14 the external guarantee of the company shall be examined and approved by the board of directors or the general meeting of shareholders. The board of directors shall organize, manage and implement the external guarantee matters approved by the general meeting of shareholders.
Article 15 the guarantee matters within the authority of the board of directors shall not only be deliberated and approved by more than half of all directors, but also be deliberated and approved by more than two-thirds of the directors attending the meeting of the board of directors and made a resolution. If the company provides guarantee for related persons, in addition to being deliberated and approved by more than half of all non related directors, it shall also be deliberated and approved by more than two-thirds of the non related directors attending the board meeting, and a resolution shall be made, and submitted to the general meeting of shareholders for deliberation.
Article 16 Where the guarantee provided by the company falls into one of the following circumstances, it shall also be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors:
(I) any guarantee provided after the total amount of external guarantee of the company and its holding subsidiaries reaches or exceeds 50% of the latest audited net assets;
(II) any guarantee provided after the total amount of external guarantee of the company reaches or exceeds 30% of the total assets audited in the latest period;
(III) the guarantee provided for the guarantee object whose asset liability ratio exceeds 70%;
(IV) the amount of a single guarantee exceeds 10% of the latest audited net assets;
(V) the total amount of guarantee in the last 12 months exceeds 30% of the company’s total assets audited in the latest period;
(VI) guarantees provided to shareholders, actual controllers and their related parties;
(VII) other guarantees stipulated by Shenzhen Stock Exchange or the articles of association and this system.
When the general meeting of shareholders deliberates the guarantee matters in Item (V) of the preceding paragraph, it shall be approved by more than two-thirds of the voting rights held by the shareholders attending the meeting.
Article 17 when the general meeting of shareholders deliberates the guarantee proposal provided for shareholders, actual controllers and their related parties, the shareholders or shareholders controlled by the actual controllers shall not participate in the voting, which shall be adopted by more than half of the voting rights held by other shareholders attending the general meeting of shareholders.
Article 18 the company provides guarantees to its holding subsidiaries. If there are a large number of guarantee agreements every year and it is difficult to submit each agreement to the board of directors or the general meeting of shareholders for deliberation, The company can estimate the total amount of new guarantee for two types of subsidiaries with asset liability ratio of more than 70% and less than 70% in the latest financial statements in the next 12 months, and submit it to the general meeting of shareholders for deliberation.
When the aforesaid guarantee matters actually occur, the company shall disclose them in time. The guarantee balance at any time point shall not exceed the guarantee amount deliberated and approved by the general meeting of shareholders.
Article 19 the company provides guarantee to its joint venture or associated enterprise and meets the following conditions at the same time. If there are a large number of guarantee agreements every year and it is difficult to submit each agreement to the board of directors or the general meeting of shareholders for deliberation, the company can reasonably predict the specific objects to be guaranteed and the corresponding new guarantee amount in the next 12 months, And submit it to the general meeting of shareholders for deliberation:
(I) the guaranteed person is not a director, supervisor, senior manager, shareholder holding more than 5%, actual controller and legal person or other organization controlled by the listed company;
(II) each shareholder of the guaranteed shall provide the same guarantee or counter guarantee and other risk control measures according to the proportion of capital contribution.
When the aforesaid guarantee matters actually occur, the company shall disclose them in time, and the guarantee balance at any time point shall not exceed the guarantee amount deliberated and approved by the general meeting of shareholders.
Article 20 if the company estimates the guarantee amount to its joint venture or associated enterprise and meets the following conditions, it can adjust the guarantee amount between its joint venture or associated enterprise, but the total amount of adjustment shall not exceed 50% of the total estimated guarantee amount:
(I) the single adjustment amount of the transferred party shall not exceed 10% of the company’s latest audited net assets;
(II) if the asset liability ratio exceeds 70% at the time of adjustment, the guarantee amount can only be obtained from the guarantee object whose asset liability ratio exceeds 70% (when the guarantee amount is considered by the general meeting of shareholders); (III) when the transfer occurs, the transferred party does not have overdue liabilities;
(IV) each shareholder of the transferred party shall provide the same guarantee or counter guarantee and other risk control measures according to the proportion of capital contribution.
The company shall disclose the aforesaid adjustment in a timely manner when it actually occurs.
Article 21 Where the scope of the consolidated statements of the company is changed due to transactions or related party transactions, if the company provides guarantees to related parties after the completion of the transaction, it shall perform corresponding review procedures and disclosure obligations on the relevant related party guarantees. If the board of directors or the general meeting of shareholders fails to consider and approve the above-mentioned related party guarantees, all parties to the transaction shall take effective measures such as early termination of guarantees or cancellation of related transactions or related transactions to avoid the formation of illegal related party guarantees.
Article 22 the counter guarantee provided by the company and its holding subsidiaries shall be implemented in accordance with the relevant provisions of the guarantee, and the corresponding deliberation procedures and information disclosure obligations shall be performed based on the amount of the counter guarantee provided by the company and its holding subsidiaries, except for the counter guarantee provided by the company and its holding subsidiaries for the guarantee based on its own debts.
Article 23 If the debt guaranteed by the company needs to be extended after maturity and continues to be guaranteed by it, it shall be used as a new external guarantee to re perform the review procedures and information disclosure obligations.
Article 24 for external guarantee, the company must conclude a written guarantee contract and counter guarantee contract (if necessary). A guarantee contract and a counter guarantee contract shall meet the requirements of the civil code of the people’s Republic of China and other laws and administrative regulations.
Article 25 a guarantee contract shall at least include the following contents:
(I) type and amount of principal creditor’s rights guaranteed;
(II) rights and obligations of the guaranteed;
(III) the time limit for the debtor to perform its obligations;
(IV) guarantee method;
(V) scope of guarantee;
(VI) guarantee period;
(VII) counter guarantee clause (if any);
(VIII) liability for breach of contract;
(IX) other matters that the parties consider necessary to be agreed.
Article 26 when a guarantee contract is concluded, the responsible person must comprehensively and carefully examine the signing subject and relevant contents of the main contract, guarantee contract and counter guarantee contract. For clauses that violate laws, administrative regulations, the articles of association, relevant resolutions of the board of directors or the general meeting of shareholders, and impose unreasonable obligations on the company or cannot predict risks, the other party shall be required to modify them. If the other party refuses to modify, the responsible person shall refuse to provide guarantee for it and report to the board of directors or the general meeting of shareholders of the company.
Article 27 the chairman of the board of directors or other persons legally authorized shall sign the guarantee contract on behalf of the company in accordance with the resolutions of the board of directors or the general meeting of shareholders of the company. No one shall sign a guarantee contract on behalf of the company without the approval and authorization of the general meeting of shareholders or the board of directors. The responsible person shall not sign the guarantee contract beyond his authority or sign or seal as the guarantor in the main contract.
Article 28 the company may sign a mutual insurance agreement with an enterprise legal person that meets the conditions specified in this system. Both parties of mutual insurance shall timely require the other party to truthfully provide relevant financial and accounting statements and other materials that can reflect its solvency.
Article 29 when accepting counter guarantee mortgage and counter guarantee pledge, the company’s capital department, together with the relevant personnel of the company’s finance department, internal audit department and legal department, shall improve the relevant legal procedures, especially the registration of mortgage or pledge in time.
Article 30 if the guaranteed party requests to change the guarantee matters, the company shall re perform the investigation, evaluation and approval procedures.
Chapter IV administration of external guarantee
Article 31 the external guarantee shall be handled by the capital department with the assistance of relevant personnel of the finance department, internal audit department and legal department.
Article 32 the main responsibilities of the company’s capital department are as follows:
(I) investigate and evaluate the credit of 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) report to the directors of the company in time as required
