Ningbo Jialian Technology Co., Ltd
Management system of raised funds
Chapter I General Provisions
Article 1 in order to standardize the management of raised funds of Ningbo Jialian Technology Co., Ltd. (hereinafter referred to as “the company”) and improve the use efficiency of raised funds, According to the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of securities issuance by listed companies, the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the Listing Rules of gem shares of Shenzhen Stock Exchange, and the guidelines for the standardized operation of GEM listed companies of Shenzhen Stock Exchange This system is formulated in accordance with relevant laws and regulations and the articles of association of Ningbo Jialian Technology Co., Ltd.
Article 2 the term “raised funds” as mentioned in this system refers to the funds raised by the company for specific purposes by issuing securities to unspecified objects or to specific objects (including stocks, convertible corporate bonds, etc.), but does not include the funds raised by the company through the implementation of the equity incentive plan.
Article 3 the company shall establish and improve the system for the storage, use, change, supervision and accountability of the raised funds, and clarify the hierarchical approval authority, decision-making procedures, risk control measures and information disclosure requirements for the use of the raised funds, so as to ensure the normal progress of the raised funds.
Article 4 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.
Article 5 where the investment project with raised funds (hereinafter referred to as “raised investment project”) is implemented through the company’s subsidiaries or other enterprises controlled by the company, the company shall ensure that the subsidiaries or other enterprises controlled by the company comply with the system.
Chapter II deposit of raised funds
Article 6 the raised funds of the company shall be deposited in the special account for raised funds (hereinafter referred to as the “special account”) established with the approval of the board of directors for centralized management, and the special account shall not deposit non raised funds or be used for other purposes. If the company has two or more financing, it shall set up special accounts for raised funds respectively.
Shenzhen Stock Exchange agrees.
The actual net amount of raised funds exceeding the planned amount of raised funds (hereinafter referred to as “over raised funds”) shall also be deposited in the special account for the management of raised funds.
Article 7 the company shall sign a three-party supervision agreement (hereinafter referred to as the “agreement”) with the recommendation institution 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 agreement shall include the following contents:
(i) The company shall centrally deposit the raised funds in a special account;
（2） The account number of the special account for raised funds, the raised investment projects involved in the special account and the deposit amount;
（3） If the company withdraws more than 50 million yuan or 20% of the net raised funds from the special account at one time or within 12 months, the company and the commercial bank shall notify the recommendation institution in time;
（4） The commercial bank shall issue a bank statement to the company every month and send a copy to the recommendation institution;
（5） The recommendation institution can inquire the special account information at the commercial bank at any time;
（6） The supervision responsibilities of the recommendation institution, 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;
（7） Rights, obligations and liabilities for breach of contract of the company, commercial banks and recommendation institutions.
（8） If a commercial bank fails to issue a statement of account to the recommendation institution in time for three times or notify the special account of large withdrawals, or fails to cooperate with the recommendation institution in querying and investigating the special account materials, the company may terminate the agreement and cancel the special account for raised funds.
The company shall timely announce the main contents of the agreement after the signing of the above agreement.
Where the company implements a raised investment project through a holding subsidiary, the company, the holding subsidiary implementing the raised investment project, the commercial bank and the recommendation institution shall jointly sign a tripartite supervision agreement, and the company and its holding subsidiary shall be regarded as a common party.
If the above agreement is terminated in advance before the expiration of the term of validity, the company shall sign a new agreement with relevant parties within 1 month from the date of termination of the agreement and make a timely announcement.
Chapter III use of raised funds
Article 8 the company shall use the raised funds prudently, ensure that the use of the raised funds is consistent with the prospectus or the commitments in the prospectus, and shall not change the investment direction of the raised funds at will or change the purpose of the raised funds in a disguised form.
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 9 the raised funds of the company shall not be used to carry out entrusted financial management (except cash management), entrusted loans and other financial investments, as well as securities investment, derivatives investment and other high-risk investments, and shall not be directly or indirectly invested in companies whose main business is the purchase and sale of securities. The company shall not use the raised funds for pledge or other investments that change the purpose of the raised funds in a disguised form.
Article 10 the company’s application for the use of raised funds, hierarchical approval authority, decision-making procedures, risk control measures and information disclosure procedures shall comply with the following requirements:
(i) The project construction unit of the company shall prepare specific project construction plan and fund use plan every month according to the feasibility study report and project progress of the raised fund project, and report the project progress of last month, fund use and fund use plan of this month to the chairman every month. When using the raised funds, the specific user unit (or department) shall fill in the application form according to the use plan of the raised funds, and attach the corresponding contract (if any), progress statement or project final settlement statement and invoice, which shall be reviewed and signed by the chief administrative officer or deputy in charge of operation and the chief financial officer of the user unit (or department), and approved by the chairman of the board, Apply to the financial department for payment according to relevant procedures.
（2） If the actual progress of fund use is expected to exceed the planned progress of fund use in the process of project implementation, the project implementation unit (or department) shall submit a written application and explain the reasons. If the amount exceeds the planned amount by less than 10% (including 10%), it shall be decided by the general manager and reported to the chairman for approval; If the amount exceeds 10% – 20%, it shall be reported to the chairman for decision; If the amount exceeds 20%, the project implementation unit (or department) shall re prepare the fund use plan and go through the approval procedures.
（3） In case of any situation that seriously affects the normal progress of the use plan of the raised funds, the company shall timely report to Shenzhen Stock Exchange and make an announcement.
Article 11 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 their affiliates, and take effective measures to prevent the related parties from using the raised investment projects to obtain improper interests.
Article 12 in case of any of the following circumstances in a raised investment project, 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 raised investment project;
（2） The raised investment project has been shelved for more than one year;
（3） Exceeding the completion period of the latest investment plan of raised funds and the investment amount of raised funds does not reach 50% of the relevant plan amount;
（4） Other abnormal circumstances occur in the raised investment project.
The company shall disclose the progress of the project, the reasons for abnormalities and the need to adjust the raised capital investment plan in the latest periodic report, and shall disclose the adjusted raised capital investment plan 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 and the recommendation institution shall express their explicit consent:
(i) Replace the self raised funds that have been invested in the raised investment project in advance with the raised funds;
（2） Use the temporarily idle raised funds for cash management;
（3） Use the temporarily idle raised funds to temporarily supplement the working capital;
（4） Change the purpose of the raised funds;
（5） Change the implementation location of the raised investment project;
（6） Adjust the planned progress of raised investment projects;
（7） Use the savings to raise funds.
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 If the company uses the surplus raised funds (including interest income) for other purposes after the completion of a single or all raised investment projects, and the amount is less than 5 million yuan and less than 5% of the net raised funds of the project, it may be exempted from the procedures specified in Article 13 of the system, and its use shall be disclosed in the annual report. If the surplus raised capital (including interest income) reaches or exceeds 10% of the net raised capital of the project and is higher than 10 million yuan, it shall also be deliberated and approved by the general meeting of shareholders.
Article 15 Where the company uses the raised funds to replace the self raised funds that have been invested in the raised investment projects in advance, the accounting firm shall issue an assurance report.
If the company has disclosed in the issuance application document that it intends 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 the term of its investment products shall not exceed 12 months, meet the requirements of high safety and good liquidity, and 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 make a timely announcement.
Article 17 Where the company uses idle raised funds for cash management, it shall timely announce the following contents after the meeting of the board of directors:
(i) The basic information of the raised funds, including the arrival time of the raised funds, the amount of the raised funds, the net amount of the raised funds and the investment plan;
（2） Use of raised funds, idle conditions and reasons, 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;
（3） Name, issuer, type, quota, term, income distribution method, investment scope, expected annualized rate of return (if any), and specific analysis and description of the safety and liquidity of the investment products by the board of directors;
（4） Opinions issued by independent directors, the board of supervisors and the recommendation institution.
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 where the idle raised funds of the company are temporarily used to supplement working capital, they shall be limited to the production and operation related to the main business, and shall meet the following conditions:
(i) It shall not change the purpose of the raised funds in a disguised form or affect the normal operation of the raised investment project;
（2） The previously raised funds used for temporary replenishment of working capital have been returned;
（3） The time for a single replenishment of working capital shall not exceed 12 months;
（4） Idle raised funds shall not be used directly or indirectly for high-risk investments such as securities investment and derivatives trading.
Article 19 Where the company uses idle raised funds to supplement working capital, it shall timely announce the following contents after the deliberation and approval of the board of directors:
(i) The basic information of the raised funds, including the arrival time of the raised funds, the amount of the raised funds, the net amount of the raised funds and the investment plan;
（2） Use of raised funds, idle conditions and reasons;
（3） The reasons for the shortage of working capital, the amount and period of idle raised funds to supplement working capital; （4） The amount expected to save financial expenses when idle raised funds supplement working funds, whether there is any behavior of changing the investment direction of raised funds in a disguised form, and measures to ensure that the normal progress of raised investment projects will not be affected;
（5） Opinions issued by independent directors, the board of supervisors and the recommendation institution;
（6） 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. If the company is expected to be unable to return this part of the funds to the special account for raised funds on schedule, it shall perform the review procedures in accordance with the requirements of the preceding paragraph before the due date and make a timely announcement. The contents of the announcement shall include the whereabouts of the funds, the reasons why they cannot be returned, the reasons why they continue to be used to supplement working capital and the time limit, etc. Article 20 the company shall properly arrange the use plan of the over raised funds according to the company’s development plan and actual production and operation needs, scientifically and prudently conduct the feasibility analysis of the project, and timely disclose it after being submitted to the board of directors for deliberation and approval. The use plan announcement shall include the following contents:
(i) Basic information of raised funds, including the arrival time of raised funds, the amount of raised funds, the amount of over raised funds, the name and amount of invested projects, the cumulative planned amount and the actual amount used;
（2） Introduction to the projects planned to be invested, including the basic information of each project, whether related party transactions are involved, feasibility analysis, economic benefit analysis, investment schedule, description that the project has been obtained or is yet to be approved by relevant departments and risk tips (if applicable);
（3） Independent opinions of independent directors and sponsors on the rationality, compliance and necessity of the use plan of over raised funds.
If the planned single use of over raised funds reaches 50 million yuan and more than 10% of the total amount of over raised funds, it shall also be submitted to the general meeting of shareholders for deliberation and approval.
Article 21 Where the company uses the over raised funds to repay bank loans or permanently supplement working capital, it shall be deliberated and approved by the board of directors and the general meeting of shareholders. The independent directors and the recommendation institution shall express their explicit consent and disclose, and shall meet the following requirements:
(i) The amount used for permanent replenishment of working capital and repayment of bank loans shall not exceed 30% of the total amount of over raised funds every 12 months;
（2） Within 12 months after replenishing working capital, the company shall not make high-risk investments such as securities investment and derivatives trading, or provide financial assistance to objects other than holding subsidiaries. The company shall make a clear commitment in the announcement.
Article 22 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 project,
