Zhejiang Jiahua Energy Chemical Industry Co.Ltd(600273)
Administrative measures for the use of raised funds
March, 2002
Chapter I General Provisions
Article 1 in order to regulate the use and management of the raised funds of Zhejiang Jiahua Energy Chemical Industry Co.Ltd(600273) (hereinafter referred to as “the company”) and protect the legitimate rights and 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 measures for the administration of initial public offering and listing, the measures for the administration of securities issuance of listed companies, and the provisions on the report on the use of the previously raised funds The Listing Rules of Shanghai Stock Exchange (hereinafter referred to as the “Listing Rules”), the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the provisions on the management of raised funds by listed companies of Shanghai Stock Exchange (hereinafter referred to as the “provisions on the management of raised funds”) These measures are formulated in accordance with the provisions and requirements of relevant laws, regulations and normative documents such as the guidelines for self discipline supervision of listed companies of Shanghai Stock Exchange No. 1 – standardized operation, and in combination with the actual situation of the company.
Article 2 the “raised funds” mentioned in these Measures refers to the funds raised by the company from investors through public offering of securities (including initial public offering of shares, allotment of shares, additional issuance, issuance of convertible corporate bonds, issuance of convertible corporate bonds with separate transactions, etc.) and non-public offering of securities, but does not include the funds raised by the company through the implementation of equity incentive plan.
Article 3 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, these Measures shall also apply, and the company shall ensure that the subsidiaries or other enterprises controlled by the company comply with the relevant provisions of these measures.
Article 4 these measures are the internal control system for the storage, use and management of the company’s raised funds, and specify the storage, use, change, supervision and accountability of the raised funds.
Article 5 the company shall report the internal control system and of the storage, use and management of the raised funds to the Shanghai Stock Exchange (hereinafter referred to as the “Stock Exchange”) for the record and disclose it on the website of the stock exchange.
Article 6 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 7 the controlling shareholders and actual controllers of the company shall not directly or indirectly occupy or misappropriate the company’s raised funds, and shall not use the company’s raised funds and raised investment projects to obtain illegitimate interests.
Chapter II storage of raised funds
Article 8 the raised funds of the company shall be deposited in the special account established by the board of directors (hereinafter referred to as the “special account for raised funds”) for centralized management.
The special account for raised funds shall not deposit non raised funds or be used for other purposes.
Article 9 the company shall, within one month after the receipt of the raised funds, sign a tripartite 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”). The agreement shall include the following:
(I) the company shall centrally deposit the raised funds in the special account for raised funds;
(II) the account number of the special account for raised funds, the items of raised funds involved in the special account and the deposit amount;
(III) the commercial bank shall provide the company with the bank statement of the special account for raising funds every month and send a copy to the sponsor or independent financial adviser;
(IV) if the company withdraws more than 50 million yuan from the special account for raised funds in one time or within 12 months and reaches 20% of the net amount of the total amount of raised funds after deducting the issuance expenses (hereinafter referred to as the net amount of raised funds), the company shall timely notify the sponsor or independent financial adviser;
(V) the sponsor or independent financial consultant can inquire the information of the special account for raised funds at the commercial bank at any time; (VI) the supervision responsibilities of the sponsor or independent financial adviser, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the sponsor or independent financial adviser and the commercial bank on the use of the company’s raised funds;
(VII) liability for breach of contract of the company, commercial bank, sponsor or independent financial consultant;
(VIII) if the commercial bank fails to issue a statement of account to the sponsor or independent financial adviser in time for three times, or fails to cooperate with the sponsor or independent financial adviser in querying and investigating the information of the special account, the company may terminate the agreement and cancel the special account for raised funds.
The company shall report to the stock exchange for filing and announce the main contents of the agreement within 2 trading days after the signing of the above agreement.
If the above agreement is terminated in advance due to the change of the sponsor or commercial bank before the expiration of the term of validity, the company shall sign a new agreement with relevant parties within two weeks from the date of termination of the agreement, and report to the stock exchange for filing and announcement within two trading days after the signing of the new agreement.
Chapter III use of raised funds
Article 10 the company shall comply with the following requirements when using the raised funds:
(I) the company shall make clear provisions on the application, hierarchical approval authority, decision-making procedures, risk control measures and information disclosure procedures for the use of raised funds;
(II) the company shall use the raised funds according to the purposes listed in the issuance application documents;
Article 11 in case of any situation that seriously affects the normal operation of the investment plan of the raised funds, the company shall timely report to the stock exchange and make an announcement. In principle, the funds raised by the company shall be used for its main business. The company shall not commit any of the following acts when using the raised funds:
(I) raised investment projects are financial investments such as holding trading financial assets and financial assets available for sale, lending to others and entrusted financial management, which are directly or indirectly invested in companies whose main business is the trading of securities; (II) changing the purpose of the raised funds in a disguised form through pledge, entrusted loan or other means;
(III) provide the raised funds to the controlling shareholders, actual controllers and other related persons for use, so as to facilitate the related persons to obtain illegitimate interests by using the raised investment project;
(IV) other acts in violation of the provisions on the management of raised funds.
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 raised investment project, decide whether to continue to implement the project, and disclose the progress of the project, the reasons for abnormalities and the adjusted raised investment project (if any) in the latest periodic report:
(I) significant changes have taken place in the market environment involved in the raised investment project;
(II) the raised investment project has been shelved for more than one year;
(III) exceeding the completion period of the investment plan of the 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 raised investment project.
Article 13 if the company invests self raised funds into projects invested with raised funds in advance, it can replace the self raised funds with the raised funds within 6 months after the arrival of the raised funds. The replacement matters shall be deliberated and approved by the board of directors of the company, the accounting firm shall issue an assurance report, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent.
The company shall report to the stock exchange and make an announcement within 2 trading days after the meeting of the board of directors.
Article 14 the company may temporarily use idle raised funds to supplement working capital, provided that the following conditions are met:
(I) the purpose of the raised funds shall not be changed in a disguised form, and the normal progress of the investment plan of the raised funds shall not be affected; (II) it is limited to the production and operation related to the main business, and shall not be directly or indirectly arranged for the placement and purchase of new shares, or for the trading of stocks and their derivatives, convertible corporate bonds, etc;
(III) the time for replenishment of working capital shall not exceed 12 months;
(IV) the previously raised funds for temporary replenishment of working capital have been returned (if applicable).
If the company uses idle raised funds to supplement working capital temporarily, it shall be deliberated and approved by the board of directors of the company, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent. The company shall report to the stock exchange and make an announcement within 2 trading days after the meeting of the board of directors. Before the due date of replenishing working capital, the company shall return this part of funds to the special account for raised funds, and report to the stock exchange and make an announcement within 2 trading days after all funds are returned.
Article 15 the temporarily idle raised funds can be managed in cash, and the invested products must meet the following conditions:
(I) high security, meeting the capital preservation requirements, and the product issuer can provide capital preservation commitments;
(II) 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 report to the stock exchange for filing and announcement within 2 trading days.
Article 16 the use of idle raised funds to invest in products shall be examined and approved by the board of directors of the company, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent. The company shall announce the following contents within 2 trading days 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;
(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, investment scope and safety of investment products;
(V) opinions issued by independent directors, board of supervisors and recommendation institutions.
The company shall, in case of major risks such as the deterioration of the financial situation of the product issuer and the loss of the invested products, timely disclose the risk prompt announcement and explain the risk control measures taken by the company to ensure the safety of funds.
Article 17 after the completion of a single raised investment project, if the company uses the surplus raised funds (including interest income) of the project for other raised investment projects, it shall be reviewed and approved by the board of directors of the company and can only be used after the opinions of independent directors, recommendation institutions and the board of supervisors are expressed. The company shall report to the stock exchange and make an announcement within 2 trading days after the meeting of the board of directors.
If the surplus raised funds (including interest income) are less than 1 million yuan or less than 5% of the committed investment amount of the raised funds of the project, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the annual report.
If the surplus raised funds (including interest income) of a single raised investment project of the company are used for non raised investment projects (including supplementary working capital), the corresponding procedures and disclosure obligations shall be performed with reference to the change of raised investment projects.
Article 18 after all the projects invested by raising funds are completed, if the surplus raised funds (including interest income) are more than 10% of the net raised funds, the company shall use the surplus raised funds after the deliberation and approval of the board of directors and the general meeting of shareholders and the express consent of the independent directors, the recommendation institution and the board of supervisors. The company shall report to the stock exchange and make an announcement within 2 trading days after the meeting of the board of directors.
If the surplus raised capital (including interest income) is less than 10% of the net raised capital, it shall be considered and approved by the board of directors and can be used only after the independent directors, the recommendation institution and the board of supervisors express their explicit consent. The company shall report to the stock exchange and make an announcement within 2 trading days after the meeting of the board of directors.
If the surplus raised funds (including interest income) are less than 5 million or less than 5% of the net raised funds, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the latest periodic report.
Article 19 when the company makes project investment, the capital expenditure must go through the examination and approval procedures in strict accordance with the relevant provisions on the use of monetary funds of the company. For any expenditure involving the raised funds, the relevant departments shall propose the amount of funds according to the fund use plan and the implementation progress of the investment project, and then handle the payment procedures according to the size of the amount of funds. Article 20 after the implementation of the investment project, the company shall ensure that the investment project will not have horizontal competition with the controlling shareholder or actual controller or affect the independence of the company’s production and operation.
Chapter IV use and management of over raised funds
Article 21 over raised funds refer to the part where the net amount of funds actually raised by the company exceeds the amount of funds planned to be raised.
Article 22 the company’s over raised funds can be used for permanent replenishment of working capital or repayment of bank loans, but the cumulative amount used within each 12 months shall not exceed 30% of the total amount of over raised funds, and shall promise not to make high-risk investment and provide financial assistance for objects other than holding subsidiaries within 12 months after replenishing working capital.
Article 23 Where the over raised funds are used for permanent replenishment of working capital or repayment of bank loans, they shall be deliberated and approved by the board of directors and the general meeting of shareholders, and the online voting method shall be provided for shareholders, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent. The company shall report to the stock exchange and announce the following contents within 2 trading days after the meeting of the board of directors:
(I) basic information of the funds raised this time, including the time of raising, amount of funds raised, net amount of funds raised, over raised amount and investment plan;
(II) use of raised funds;
(III) the necessity and detailed plan for permanently replenishing working capital or repaying bank loans with over raised funds; (IV) commitment not to make high-risk investment and provide financial assistance to others within 12 months after replenishing working capital;
(V) the impact of permanently replenishing working capital or repaying bank loans with over raised funds on the company;
(VI) opinions issued by independent directors, board of supervisors and recommendation institutions.
Article 24 Where the company uses the over raised funds for projects under construction and new projects (including the acquisition of assets, etc.), it shall invest in the main business, apply the relevant provisions on the investment direction change of the raised funds in Chapter V of these measures, scientifically and prudently analyze the feasibility of the investment projects, and timely fulfill the obligation of information disclosure.
Chapter V change of investment direction of raised funds
Article 25 If the company has any of the following circumstances, it shall be deemed as the change of the purpose of the raised funds, and shall make a timely announcement after the deliberation and approval of the board of directors, the opinions of independent directors, the board of supervisors, sponsors or independent financial advisers on the change of the raised investment project, and perform the deliberation procedures of the general meeting of shareholders:
(I) cancel or terminate the original fund-raising projects and implement new projects;
(II) change of raised funds
