Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068)
Management system of raised funds
Chapter I General Provisions
Article 1 in order to standardize the management of the raised funds of Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) (hereinafter referred to as “the company”), improve the efficiency of the use of the raised funds and effectively protect the interests of the majority 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 the registration of initial public offering of shares on the gem (for Trial Implementation), the measures for the administration of the registration of securities issuance of companies listed on the gem (for Trial Implementation) Regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, listing rules for GEM stocks of Shenzhen Stock Exchange (revised in 2020) (hereinafter referred to as the “Listing Rules”), self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies (hereinafter referred to as the “standardized operation guidelines”) and other laws and regulations Normative documents and Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) articles of Association (hereinafter referred to as the “articles of association”), 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, but does not include the funds raised by listed companies through the implementation of equity incentive plans.
Article 3 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.
Article 4 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 prospectus, and shall not change the investment direction of the raised funds at will.
The company shall truthfully, accurately and completely disclose the actual use of the raised funds, and employ an accounting firm to verify the storage and use of the raised funds at the same time of the annual audit.
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 company’s assets, 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 the board of directors of the company is responsible for establishing and improving the management system of the company’s raised funds and ensuring the effective implementation of this system.
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.
Article 6 if the investment project of raised funds 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 this system.
Article 7 during the period of continuous supervision, the recommendation institution shall perform the recommendation responsibility for the management of the company’s raised funds, and carry out the continuous supervision of the company’s raised funds in accordance with the measures for the administration of the recommendation business of securities issuance and listing, the guidelines for the self discipline supervision of listed companies of Shenzhen Stock Exchange No. 13 – recommendation business and other relevant laws, regulations, normative documents and the provisions of this system.
Chapter II deposit of raised funds
Article 8 the company shall carefully select commercial banks and open special accounts for raised funds (hereinafter referred to as “special accounts”). 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 more than two times of financing, 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.
Article 9 the company shall, within one month after the raised funds are in place, sign a tripartite supervision agreement on the special account storage of raised funds with the recommendation institution or independent financial consultant and the commercial bank storing the raised funds (hereinafter referred to as “commercial bank”). The agreement shall at least include the following contents:
(I) the company shall centrally deposit the raised funds in the special account for raised funds;
(II) the special account for raised funds, the items of 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 adviser, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution or independent financial adviser and commercial bank on the use of the company’s raised funds;
(VII) rights, business and liabilities for breach of contract of the company, commercial banks, recommendation institutions or independent financial advisers;
(VIII) the commercial bank fails to issue a statement of account to the recommendation institution or the independent financial consultant in time or notify the special account of large withdrawal for three times, and fails to cooperate with the recommendation institution or the independent financial consultant in querying and investigating 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 agreement after the signing of the above agreement.
Where a company implements a raised investment project through a holding subsidiary, a tripartite supervision agreement shall be jointly signed by the company, the holding subsidiary implementing the raised investment project, commercial banks, recommendation institutions or independent financial advisers. 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 one month from the date of termination of the agreement and make a timely announcement.
Chapter III use of raised funds
Article 10 the company shall use the raised funds prudently to ensure that the use of the raised funds is consistent with the commitments in the prospectus or 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 11 except for financial enterprises, the raised funds 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 12 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 13 in case of any of the following circumstances in a 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:
1. Major changes have taken place in the market environment involved in the investment project with raised funds;
2. The project invested with raised funds 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. There are other abnormal circumstances in the raised investment project.
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 14 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 recommendation institution or the independent financial consultant 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 investment location of the project;
(VI) adjust the schedule of the project invested by the raised funds;
(VII) use the surplus raised 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 15 if the company uses the surplus raised funds (including interest income) for other purposes after the completion of a single or all raised funds investment project, 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 14, and its use shall be disclosed in the annual report. If the use of surplus raised funds (including interest income) reaches or exceeds 10% of the net raised funds of the project and is higher than 10 million yuan, it shall also be deliberated and approved by the general meeting of shareholders.
Article 16 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 its own funds with the raised funds within 6 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 17 the company may conduct cash management on the temporarily idle raised funds, and the term of its investment products shall not exceed 12 months, and meet the requirements of high safety and good liquidity, which 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 18 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) basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of the raised funds, idle conditions and reasons, whether there is any behavior of changing the purpose of the raised funds in a disguised form, and measures to ensure that the normal progress of the raised funds project will not be affected;
(III) the issuer, type, amount, term, income distribution mode, investment scope, estimated annualized rate of return (if any), and the specific analysis and description of the safety and liquidity of the investment products by the board of directors;
(IV) opinions issued by independent directors, board of supervisors, recommendation institutions 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 19 Where the idle raised funds of the company are temporarily used to supplement the working capital, they shall be limited to the production and operation related to the 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) the idle raised funds shall not be directly or indirectly used for high-risk investments such as securities investment and derivatives trading.
Article 20 if the company uses idle raised funds to supplement working capital temporarily, it shall timely announce the following contents after the deliberation and approval of the board of directors:
(I) basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of raised funds, idle conditions and reasons;
(III) the reasons for the shortage of working capital, the amount and period 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, 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 funds projects will not be affected;
(V) opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers;
(VI) other contents required by SZSE.
Before the due date of replenishing working capital, the company shall return this part of funds to the special account for raised funds and make an announcement within 2 trading days after all funds are 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 and time limit for continuing to supplement working capital, etc. Article 21 the company shall, according to the company’s development plan and actual production and operation needs, properly arrange the use plan of the part of the net amount of funds actually raised exceeding the planned amount of funds (hereinafter referred to as “over raised funds”), scientifically and prudently analyze the feasibility of the project, and timely disclose it after being submitted to the board of directors for deliberation and approval. The announcement of the use plan shall include the following contents:
(I) basic information of the raised funds, including the arrival time of the raised funds, the amount of the raised funds, the amount of the actual net raised funds exceeding the planned raised funds, the name and amount of the invested projects, the cumulative planned amount and the actual amount used;
(II) 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 has yet to be approved by relevant departments and risk tips (if applicable);
(III) independent opinions of independent directors and sponsors on the rationality, compliance and necessity of the use plan of over raised funds.
If the amount of over raised funds planned to be used for a single time 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 22 Where the company uses the over raised funds to repay bank loans or supplement working capital, it shall be examined and approved by the board of directors and the general meeting of shareholders. The independent directors, the recommendation institution or the independent financial adviser shall express their explicit consent and disclosure, and shall meet the following requirements:
(I) the amount used for permanent replenishment of working capital and repayment of bank loans shall not exceed
