Changchun Engley Automobile Industry Co.Ltd(601279)
Measures for the administration of raised funds
Chapter I General Provisions
Article 1 in order to strengthen and standardize the management of the funds raised by Changchun Engley Automobile Industry Co.Ltd(601279) (hereinafter referred to as “the company”) by issuing shares and improve its use efficiency and efficiency, these measures are formulated in accordance with the company law of the people’s Republic of China and other laws, regulations, normative documents and the relevant provisions of Changchun Engley Automobile Industry Co.Ltd(601279) articles of Association (hereinafter referred to as “the articles of association”).
Article 2 the “raised funds” mentioned in these Measures refer 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 do not include the funds raised by the company through the implementation of equity incentive plan.
Article 3 where a raised investment project 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 these measures.
Chapter II deposit of raised funds in special account
Article 4 the raised funds of the company shall be deposited in a special account approved by the board of directors (hereinafter referred to as the “special account”) for centralized management. The special account for raised funds 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 over raised funds shall also be deposited in the special account for the management of the raised funds.
Article 5 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 contents of the agreement shall be implemented in accordance with the relevant provisions of Shanghai Stock Exchange (hereinafter referred to as the “exchange”).
If the agreement is terminated in advance due to changes in the recommendation institution 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.
Chapter III use of raised funds
Article 6 the company shall use the raised funds in accordance with the investment plan of the raised funds promised in the issuance application documents, and the company shall give priority to the implementation of the provisions of these measures.
Article 7 when using the raised funds, the company shall perform the obligation of information disclosure in accordance with the requirements of laws, regulations and normative documents such as the rules for the listing of shares on the Shanghai Stock Exchange, the guidelines for the self discipline supervision of listed companies on the Shanghai Stock Exchange No. 1 – standardized operation.
Article 8 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:
（1） Changing the purpose of the raised funds in a disguised form through pledge, entrusted loan or other means;
（2） Provide the raised funds directly or indirectly 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;
（3） Raised investment projects refer to 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;
（4） Other acts in violation of the relevant provisions on the management of raised funds.
Article 9 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:
（1） 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 time limit for the completion 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;
（4） Other abnormal circumstances occur in the raised investment project.
Article 10 the independent directors of the company shall pay close attention to the legality and compliance of the use of the company’s raised funds (including over raised funds), and express independent opinions on the use of the raised funds in accordance with the provisions of the articles of association.
Article 11 the company’s recommendation institution shall express clear opinions on the following situations of the use of the raised funds:
（1） Change the raised investment project and the implementation place of the raised investment project;
（2） The surplus raised funds (including interest income) of a single raised investment project are used for non raised investment projects or supplement working capital;
（3） Within six months after the receipt of the raised funds, the company shall replace the self raised funds invested in advance with the raised funds; （4） The company temporarily replenishes working capital with idle raised funds;
（5） The company conducts cash management on the temporarily idle raised funds;
（6） After the completion of a single raised investment project, the company uses the surplus raised funds (including interest income) of the project for other raised investment projects, except that the surplus raised funds (including interest income) is less than one million or less than 5% of the committed investment amount of the raised funds of the project;
（7） After all the projects invested by raising funds are completed, the company uses the surplus funds, except that the surplus raised funds (including interest income) are less than 5 million or less than 5% of the net raised funds;
（8） The company plans to transfer or replace the raised investment projects to the outside world (except that all the raised investment projects have been transferred or replaced in the implementation of major asset restructuring by the listed company);
（9） The over raised funds are used for projects under construction and new projects (including the acquisition of assets);
（10） The over raised funds are used for permanent replenishment of working capital and repayment of bank loans.
Article 12 after performing the internal approval procedures in accordance with the provisions of the articles of association, the company may conduct cash management on the temporarily idle raised funds, and the term of its investment products shall not be longer than the use term authorized by the internal resolution, and shall not exceed 12 months. The invested products shall meet the following conditions at the same time:
（1） Structured deposits, certificates of deposit and other principal guaranteed products with high security;
（2） Good liquidity shall not affect the normal operation 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 exchange for filing and announcement.
Article 13 after performing the internal examination and approval procedures in accordance with the provisions of the articles of association, the company may temporarily supplement the working capital with idle raised funds, and shall meet the following conditions:
（1） It is limited to the production and operation related to the main business, and shall not be used for the placement and purchase of new shares, or for the trading of stocks and their derivatives, convertible corporate bonds, etc. through direct or indirect arrangements;
（2） The purpose of the raised funds shall not be changed in a disguised form;
（3） It shall not affect the normal progress of the investment plan of the raised funds;
（4） The time for replenishment of circulating funds shall not exceed 12 months;
（5） The previously raised funds for temporary replenishment of working capital that have expired have been returned (if applicable).
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 exchange and make an announcement within two trading days after all funds are returned.
Article 14 the following changes in the use of the company’s raised funds compared with the company’s original investment plan of the raised funds shall be deemed as changes in the raised investment projects:
(I) cancel or terminate the original raised investment projects and implement new projects;
(II) change the implementation subject of the raised investment project;
(III) change the implementation mode of raised investment projects;
(IV) other circumstances identified by the exchange as the change of raised investment projects.
Article 15 the changed raised investment project shall be invested in the main business.
The company shall scientifically and prudently carry out the feasibility analysis of new raised investment projects, make sure that the investment projects have good market prospects and profitability, effectively prevent investment risks and improve the use efficiency of raised funds.
Where a new raised investment project involves related party transactions, purchase of assets and foreign investment, it shall also perform the obligation of information disclosure with reference to the provisions of relevant rules.
Article 16 if the company changes the raised investment project for the acquisition of the assets (including interests) of the controlling shareholder or actual controller, it shall ensure that it can effectively avoid horizontal competition and reduce related party transactions after the acquisition.
Article 17 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, make a scientific and prudent feasibility analysis of the investment projects in accordance with the relevant provisions on the change of raised investment projects, and timely perform the obligation of information disclosure.
Article 18 If the company uses the over raised funds to repay bank loans and permanently supplement working capital, the cumulative amount shall not exceed 30% of the total amount of over raised funds within 12 months, and it shall promise not to make high-risk investment or provide financial assistance to others within 12 months after supplementing working capital.
Article 19 If the company uses the over raised funds to invest in the establishment of subsidiaries or increase capital to subsidiaries, and the subsidiaries intend to use the over raised funds to repay bank loans or supplement working capital temporarily or permanently, it shall be implemented in accordance with the procedures that the company should perform when using the over raised funds to repay bank loans or supplement working capital temporarily or permanently.
Chapter IV Management and supervision of raised funds
Article 20 the independent directors, the audit committee of the board of directors and the board of supervisors shall continue to pay attention to the actual management and use of the raised funds. More than half of the independent directors may employ an accounting firm to issue an assurance report on the storage and use of the raised funds (including over raised funds). The company shall actively cooperate and bear the necessary expenses.
Article 21 the board of directors shall comprehensively check the progress of raised investment projects every half a year and issue a special report on the storage and actual use of the company’s raised funds (hereinafter referred to as the “special report on raised funds”) on the storage and use of the raised funds. If there is a difference between the actual investment progress of a raised investment project and the investment plan, the company shall explain the specific reasons in the special report on raised funds. During the annual audit, the company shall employ an accounting firm to issue an assurance report on the storage and use of the raised funds.
If the company replaces self raised funds with raised funds, it shall also apply for an accounting firm to issue an assurance report.
Article 22 a recommendation institution shall conduct on-site investigation on the deposit and use of the company’s raised funds at least once every half year.
After the end of each fiscal year, the recommendation institution shall issue a special verification report on the deposit and use of the company’s annual raised funds in accordance with the provisions
After the end of each fiscal year, the board of directors of the company shall disclose the concluding opinions of the special verification report of the sponsor and the assurance report of the accounting firm in the special report on raised funds.
Article 23 the office of the board of directors of the company shall be responsible for the archives management of the use of raised funds, and timely archive the documents related to the use of raised funds in the process of the use of raised funds, including but not limited to the company’s internal resolution documents, signed relevant agreements, internally signed circulation forms, etc.
Chapter V supplementary provisions
Article 24 the terms “above”, “within” and “before” in these measures include this number, and the terms “above” and “below” do not include this number.
Article 25 matters not covered in these Measures shall be implemented in accordance with relevant national laws, regulations, departmental rules, normative documents and the articles of association. If the provisions of these measures are inconsistent with the laws, regulations, departmental rules, normative documents issued or revised by the state in the future or the articles of association modified by legal procedures, the latter shall prevail, and these Measures shall be revised in time.
Article 26 these Measures shall come into force after being deliberated and adopted by the board of directors, and the amendment of these Measures shall come into force only after being approved by the board of directors.
Article 27 the board of directors shall be responsible for the interpretation of these measures.
Changchun Engley Automobile Industry Co.Ltd(601279) March 28, 2022
