Foreign investment management system
Chapter I General Provisions
Article 1 for the purpose of regulating Shandong Dongyue Organosilicon Materials Co.Ltd(300821) (hereinafter referred to as “the company”) or
In accordance with the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the securities law of the people’s Republic of China, the Shenzhen Stock Exchange GEM Listing Rules This system is formulated in accordance with the relevant provisions of laws and regulations such as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and the articles of association of Shandong Dongyue silicone materials Co., Ltd. (hereinafter referred to as the “articles of association”).
Article 2 the term “foreign investment” as mentioned in this system refers to the following investment activities conducted by the company at home and abroad for the purpose of making profits or maintaining and increasing value:
(I) investing in other enterprises, including equity investments such as establishing an enterprise alone (except for establishing or increasing the capital of a wholly-owned subsidiary) or jointly establishing an enterprise with others, increasing the capital of other enterprises, and transferring the equity of other enterprises;
(II) purchase trading financial assets and financial assets available for sale, provide loans (including entrusted loans) to others, entrusted financial management and other financial investments;
(III) other investments.
Article 3 the company’s foreign investment must comply with relevant national regulations and industrial policies, comply with the company’s development strategy, enhance the company’s competitiveness, reasonably allocate enterprise resources, create good economic benefits and promote the sustainable development of the company.
Chapter II decision-making authority for foreign investment
Article 4 the company shall designate a foreign investment department to conduct special research and evaluation on the feasibility, investment risk, investment return and other matters of the company’s major investment projects, supervise the implementation progress of major investment projects, and timely report to the board of directors if any abnormality is found in the investment projects.
Article 5 if the company’s foreign investment mentioned in Item (I) of Article 2 of this system meets one of the following standards, it shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors:
(I) if the total assets involved in the transaction account for more than 50% of the company’s total assets audited in the latest period, and the total assets involved in the transaction have both book value and assessed value, the higher one shall be taken as the calculation data;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 50% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds RMB 50 million;
(III) the related net profit of the transaction object (such as equity) in the latest fiscal year accounts for more than 50% of the audited net profit of the company in the latest fiscal year, and the absolute amount exceeds RMB 5 million; (IV) the transaction amount (including debts and expenses) of the transaction accounts for more than 50% of the company’s latest audited net assets, and the absolute amount exceeds 50 million yuan;
(V) the audited net profit of the company exceeds RMB 500000 in the latest accounting year, accounting for more than RMB 500000 in the latest accounting year;
If the data involved in the above index calculation is negative, take its absolute value for calculation.
Transactions in which the company unilaterally obtains benefits, including receiving cash assets and obtaining debt relief, may be exempted from the deliberation procedures of the general meeting of shareholders in accordance with paragraph 1.
If the transactions of the company only meet the criteria of item (III) or (V), and the absolute value of the company’s earnings per share in the latest fiscal year is less than 0.05 yuan, it may be exempted from the deliberation procedures of the general meeting of shareholders in accordance with paragraph 1.
Article 6 if the company’s foreign investment matters other than item (I) of Article 2 of the system meet one of the following standards, it shall be deliberated and approved by the board of directors:
(I) if the total book value of the company’s assets involved in the transaction accounts for more than 10% of the total book value of the company’s assets in the latest period;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 10% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds RMB 10 million;
(III) the related net profit of the transaction object (such as equity) in the latest accounting year accounts for more than 10% of the audited net profit of the company in the latest accounting year, and the absolute amount exceeds RMB 1 million; (IV) the transaction amount (including debts and expenses) of the transaction accounts for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds RMB 10 million;
(V) the profit generated from the transaction accounts for more than 10% of the audited net profit of the company in the latest fiscal year, and the absolute amount exceeds RMB 1 million;
If the data involved in the above index calculation is negative, take its absolute value for calculation.
Article 7 if the company fails to meet one of the above standards for foreign investment other than those specified in this system, it shall be decided by the general manager of the company; If it meets one of the standards specified in Article 5 of the system, it shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors. If the foreign investment of a wholly-owned subsidiary or holding subsidiary of the company meets the standards specified in Articles 5 and 6 of this system, it shall be deliberated and approved by the board of directors and the general meeting of shareholders of the company, and then implemented after the final approval of the wholly-owned subsidiary or holding subsidiary in accordance with its internal decision-making procedures. Article 8 the financial assistance provided by the company is for the holding subsidiaries within the scope of the company’s consolidated statements and with a shareholding ratio of more than 50%, which is exempted from the deliberation of the board of directors and the general meeting of shareholders.
Article 9 for entrusted financial management, the company shall select a qualified professional financial management institution with good credit status, good financial status, no bad credit record and strong profitability as the trustee, and sign a written contract with the trustee to clarify the amount, period, investment variety, rights, obligations and legal responsibilities of both parties.
The board of directors of the company shall assign special personnel to track the progress of entrusted financial management and the safety of investment, and require them to report in time in case of abnormalities, so that the board of directors can immediately take effective measures to recover funds and avoid or reduce the losses of the company.
Chapter III follow up daily management of foreign investment
Article 10 the board of directors of the company shall regularly understand the implementation progress and investment benefits of major investment projects. In case of failure to invest as planned, failure to realize the expected income of the project, loss of investment, etc., the board of directors of the company shall find out the reasons and investigate the responsibilities of relevant personnel.
Article 11 the general manager shall take the lead in the follow-up daily management of foreign investment projects.
Article 12 for the establishment of a cooperative or joint venture company with foreign investment, the company shall send management personnel, directors, supervisors or equity representatives to the newly established company to participate in and influence the operation decisions of the newly established company after being elected through legal procedures.
Article 13 for a holding subsidiary established by foreign investment, the company shall send directors and corresponding operation and management personnel to play an important role in the operation and decision-making of the holding subsidiary.
Article 14 the selection of personnel for foreign investment specified in Articles 12 and 13 of the system shall be decided by the general manager of the company. The dispatched personnel shall earnestly perform their duties in accordance with the provisions of the company law and other relevant laws and regulations, safeguard the interests of the company in the operation and management activities of the new company, and realize the preservation and appreciation of the company’s investment. Article 15 the Finance Department of the company shall make comprehensive and complete financial records of the company’s foreign investment activities, conduct detailed accounting, establish detailed account books according to each investment project and record relevant materials in detail. Article 16 the accounting methods, accounting policies, accounting estimates and changes adopted in the financial management of the company’s holding subsidiaries shall comply with the relevant provisions of the company’s accounting system.
Article 17 the company may appoint a chief financial officer to a subsidiary, who shall supervise the authenticity and legitimacy of the financial situation of the company he works for.
Chapter IV transfer and recovery of foreign investment
Article 18 in any of the following circumstances, the company may recover its foreign investment:
(I) the operation period of the investment project (enterprise) expires;
(II) the investment project (enterprise) is poorly managed and unable to repay its due debts;
(III) the investment project (enterprise) cannot be operated due to force majeure;
(IV) other circumstances under which the investment is terminated under the contract.
Article 19 in any of the following circumstances, the company may transfer its foreign investment:
(I) the investment project has obviously gone against the business direction of the company;
(II) the investment project has suffered continuous losses and has no market prospect;
(III) there is an urgent need for supplementary funds due to the lack of their own operating funds;
(IV) other reasons deemed necessary by the company.
Article 20 the recovery and transfer of foreign investment shall comply with the provisions of the company law and other relevant laws and regulations and the articles of association.
Chapter V supplementary provisions
Article 21 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the articles of Association; In case of any conflict between this system and the laws, regulations, normative documents issued by the state in the future or the articles of association modified by legal procedures, the provisions of relevant national laws, regulations, normative documents and the articles of association shall prevail.
Article 22 the terms “above” and “within” in this system include this number, and the term “over” does not include this number.
Article 23 the system shall come into force from the date of deliberation and approval by the general meeting of shareholders of the company..
Article 24 the general meeting of shareholders authorizes the board of directors to interpret the system.
Shandong Dongyue Organosilicon Materials Co.Ltd(300821) March 2022
