Jiangsu Shagang Co.Ltd(002075)
Management system of raised funds
Chapter I General Provisions
Article 1 in order to regulate the management and use of the funds raised by Jiangsu Shagang Co.Ltd(002075) (hereinafter referred to as “the company”) and effectively protect the 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 self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, the regulatory requirements for the management and use of raised funds by listed companies, the Jiangsu Shagang Co.Ltd(002075) articles of Association (hereinafter referred to as the “articles of association”) and other relevant laws and regulations, This system is formulated in combination with the actual situation of the company.
Article 2 the term “raised funds” as mentioned in this system refers to the funds raised from investors and used for specific purposes by the company through the issuance of shares and their derivatives.
Where the investment project of raised funds is implemented through a subsidiary of the company or other enterprises controlled by the company, the company shall ensure that the subsidiary or other enterprises controlled by the company comply with this system.
Article 3 the company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the commitments in the prospectus or other public offering documents, and shall not change the investment direction of the raised funds at will. Where a company changes the use of funds listed in the prospectus or other documents for public offering and raising, a resolution must be made by the general meeting of shareholders.
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, the company shall make a timely announcement.
Article 4 after the raised funds are in place, the company shall timely organize to go through the capital verification procedures, and an accounting firm in accordance with the provisions of the securities law of the people’s Republic of China shall issue a capital verification report, and shall organize the use of the raised funds as soon as possible in accordance with the use plan of the raised funds promised in the prospectus, public offering documents, etc. Article 5 the board of directors of the company shall fully demonstrate the feasibility of the investment project with raised funds, make sure that the investment project has good market prospect and profitability, effectively prevent investment risks and improve the use efficiency of raised funds.
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.
Chapter II deposit of raised funds
Article 6 the company’s raised funds shall be deposited in a centralized manner for the convenience of supervision and management. In order to strengthen the supervision over the use of raised funds, the company implements a special account storage system for raised funds.
Article 7 the company shall carefully select commercial banks and open special accounts for raised funds (hereinafter referred to as “special accounts”), and the raised funds shall be deposited in a special account approved by the board of directors for centralized management, and the special account shall not be used for non raised funds or other purposes.
If the company has raised funds for more than two times, it shall set up special accounts for raised funds respectively.
The net amount of the actually raised funds exceeding the amount of the planned raised funds (hereinafter referred to as “over raised funds”) shall also be deposited in the special account for the management of the raised funds.
Chapter III use of raised funds
Article 8 the company shall sign a three-party supervision agreement (hereinafter referred to as the “three-party agreement”) with the recommendation institution or independent financial adviser and the commercial bank storing the raised funds (hereinafter referred to as the “commercial bank”) within one month after the raised funds are in place. The tripartite agreement shall at least include the following contents:
(I) the company shall deposit the raised funds in a special account;
(II) the account number of the special account for raised funds, the investment projects of the raised funds involved in the special account and the deposit amount; (III) if the company withdraws more than 50 million yuan or 20% of the net raised funds from the special account in one time or within 12 months, the company and the commercial bank shall timely notify the recommendation institution or independent financial adviser;
(IV) the commercial bank shall issue the bank statement to the company every month and send a copy to the recommendation institution or independent financial adviser;
(V) a recommendation institution or an independent financial consultant may inquire about the special account information at a commercial bank at any time;
(VI) the supervision responsibilities of the recommendation institution or independent financial consultant, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution and the commercial bank on the use of the company’s raised funds;
(VII) rights, obligations and liabilities for breach of contract of the company, commercial banks, recommendation institutions or independent financial advisers;
(VIII) if the commercial bank fails to issue a statement of account or notify the special account of large amount withdrawal to the recommendation institution or independent financial consultant in time for three times, and fails to cooperate with the recommendation institution or independent financial consultant to inquire and investigate the special account information, the company may terminate the agreement and cancel the special account for raised funds.
The company shall timely announce the main contents of the tripartite agreement after the signing of the above tripartite agreement.
Where a company implements an investment project with raised funds through a holding subsidiary, a tripartite agreement shall be jointly signed by the company, the holding subsidiary implementing the investment project with raised funds, commercial banks, recommendation institutions or independent financial advisers. The company and its holding subsidiary shall be regarded as a common party.
If the above three-party agreement is terminated in advance before the expiration of its term of validity, the company shall sign a new three-party agreement with relevant parties within one month from the date of termination of the three-party agreement and make a timely announcement.
Article 9 in principle, the funds raised by the company shall be used for its main business. Except for financial enterprises, the funds raised shall not be used for high-risk investments such as securities investment and derivatives trading, or provide financial assistance to others, nor shall they be directly or indirectly invested in companies whose main business is the trading of securities.
The company shall not use the raised funds for pledge, entrusted loan or other investment that changes the purpose of the raised funds in a disguised form.
Article 10 the company shall ensure the authenticity and fairness of the use of the raised funds, prevent the raised funds from being occupied or misappropriated by the controlling shareholders, actual controllers and other related parties, and take effective measures to prevent the related parties from using the raised funds to invest in projects to obtain improper interests.
Article 11 the board of directors of the company shall comprehensively check the progress of the investment projects of the raised funds every half year, issue a special report on the storage and use of the raised funds every half year and every year, and employ an accounting firm to issue an assurance report on the storage and use of the raised funds every year. The company shall disclose the assurance report and periodic report issued by the accounting firm.
If there is any difference between the actual investment progress of the project invested with raised funds and the investment plan, the company shall explain the specific reasons. If the difference between the actual use of the raised funds in the year of the raised funds investment project and the estimated use amount of the last disclosed raised funds investment plan exceeds 30%, the company shall adjust the raised funds investment plan, and disclose the latest annual investment plan of the raised funds, the current actual investment progress The adjusted investment plan is expected to be divided into annual investment plans and the reasons for the change of investment plans.
Article 12 in case of any of the following circumstances in the project invested with raised funds, the company shall re demonstrate the feasibility and expected income of the project and decide whether to continue to implement the project:
(I) major changes have taken place in the market environment involved in the investment project with raised funds;
(II) the project invested with raised funds has been shelved for more than one year;
(III) exceeding the completion period of the investment plan of the latest raised funds and the investment amount of the raised funds does not reach 50% of the relevant plan amount;
(IV) other abnormal circumstances occur in the project invested with raised funds.
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 13 when the company uses the raised funds for the following matters, it shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors, the sponsor or the independent financial adviser shall express their explicit consent:
(I) replace the self raised funds that have been invested in the investment projects with the raised funds in advance;
(II) use the temporarily idle raised funds for cash management;
(III) temporarily replenish working capital with temporarily idle raised funds;
(IV) change the purpose of the raised funds;
(V) change the implementation location of the project invested by the raised funds;
(VI) use the surplus raised funds;
(VII) over raised funds are used for projects under construction and new projects.
If the company changes the purpose of the raised funds and uses the surplus raised funds to meet the deliberation standards of the general meeting of shareholders, it shall also be deliberated and approved by the general meeting of shareholders.
Article 14 the board of directors of the company shall scientifically and prudently select new investment projects, conduct feasibility analysis on new investment projects, and be sure that the investment projects have good market prospects and profitability, can effectively prevent investment risks and improve the use efficiency of raised funds.
Article 15 Where the company replaces the self raised funds that have been invested in the investment projects with the raised funds in advance, the accounting firm shall issue an authentication report. The company may replace the self raised funds with the raised funds within six months after the receipt of the raised funds.
If the company has disclosed in the issuance application document that it plans to replace the self raised funds invested in advance with the raised funds, and the amount invested in advance is determined, it shall make an announcement before the replacement is implemented.
Article 16 the company may conduct cash management on the temporarily idle raised funds, and its investment products must meet the following conditions:
(I) the term of investment products shall not exceed 12 months;
(II) principal guaranteed products with high security such as structured deposits and certificates of deposit;
(III) 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 timely report to the stock exchange for filing and announcement.
Article 17 Where the company uses the temporarily idle raised funds for cash management, it shall timely announce the following contents 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 and reasons for idle 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 and investment scope of investment products, safety analysis provided by product issuers, risk control measures taken by the company to ensure capital safety, etc;
(V) opinions issued by independent directors, board of supervisors, sponsors or independent financial advisers.
When the company finds that the financial situation of the issuer of investment products is deteriorating and the invested products are facing losses and other major risks, it shall timely disclose the risk prompt announcement and explain the risk control measures taken by the company to ensure the safety of funds.
Article 18 the company’s use of idle raised funds to temporarily supplement working capital is limited to the production and operation related to its main business, and shall meet the following conditions:
(I) it is not allowed to change the purpose of the raised funds in a disguised form or affect the normal progress of the investment plan of the raised funds; (II) the funds raised for temporary replenishment of working capital have been returned;
(III) the time for a single replenishment of working capital shall not exceed 12 months;
(IV) do not use idle raised funds to directly or indirectly make high-risk investments such as securities investment and derivatives trading.
Article 19 Where the company uses idle raised funds to supplement working capital temporarily, it shall announce the following contents within two trading days after the deliberation and approval 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 to supplement working capital;
(IV) the amount of idle raised funds to supplement working capital, the expected savings in financial expenses, the reasons for the shortage of working capital, whether there is any behavior of changing the purpose of raised funds in a disguised form, and the measures to ensure that the normal progress of the raised funds project will not be affected;
(V) opinions issued by independent directors, board of supervisors, sponsors or independent financial advisers;
(VI) other contents required by Shenzhen Stock Exchange.
Before the due date of supplementary working capital, the company shall return this part of the capital to the special account for raised capital, and make an announcement within two trading days after all the capital is returned.
Article 20 the payment of raised funds shall be in strict accordance with the company’s fund management system and perform the corresponding use approval procedures.
Chapter IV change of purpose of raised funds
Article 21 the company shall not change the purpose of the raised funds until the proposal on changing the purpose of the raised funds is deliberated and approved by the board of directors and the general meeting of shareholders. In principle, the purpose of the raised funds after the change of the company shall be invested in the main business. The company shall be deemed to have changed the purpose of the raised funds under the following circumstances:
(I) cancel or terminate the original fund-raising projects and implement new projects;
(II) change the implementation subject of the project invested by raised funds (except for the change of the implementation subject between the company and its wholly-owned subsidiaries);
(III) change the implementation method of the project invested by the raised funds;
(IV) other circumstances identified by the stock exchange as changes in the purpose of the raised funds.
Article 22 If the company intends to change the purpose of the raised funds, it shall announce the following contents within two trading days after submitting it to the board of directors for deliberation:
(I) basic information of the original project and specific reasons for the change;
(II) basic information, feasibility analysis and risk prompt of the new project;
(III) investment plan for new projects;
(IV) description that the new project has been obtained or has yet to be approved by relevant departments (if applicable);
(V) opinions of independent directors, the board of supervisors and the recommendation institution on changing the investment purpose of the raised funds;
(VI) explanation that the change of the purpose of the raised funds needs to be submitted to the general meeting of shareholders for deliberation;
(VII) other contents required by Shenzhen Stock Exchange.
Article 23 Where the company intends to change the investment project of raised funds into a joint venture, it shall carefully consider the necessity of joint venture on the basis of fully understanding the basic situation of the joint venture party, and the company shall hold shares to ensure the investment of raised funds
