Lanzhou Lishang Guochao Industrial Group Co.Ltd(600738)
Measures for the administration of raised funds
(revised in April 2022)
Chapter I General Provisions
Article 1 in order to regulate the management and use of the raised funds of Lanzhou Lishang Guochao Industrial Group Co.Ltd(600738) (hereinafter referred to as “the company”), improve the efficiency of the use of the raised funds and protect the interests of investors to the greatest extent, 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 (hereinafter referred to as “the securities law”) and the measures for the administration of securities issuance of listed companies These measures are formulated in combination with the actual situation of the company, in accordance with the relevant laws, regulations and normative documents such as the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the rules for the listing of shares of Shanghai Stock Exchange (hereinafter referred to as the Listing Rules), and the Lanzhou Lishang Guochao Industrial Group Co.Ltd(600738) articles of Association (hereinafter referred to as the articles of association).
Article 2 the term “raised funds” as mentioned in these Measures refers to the funds raised by the company from investors through public issuance of securities (including but not limited to 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 issuance of securities, but does not include the funds raised by the company through the implementation of equity incentive plan.
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 prospects and profitability, effectively prevent investment risks and improve the efficiency of the use of 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 as the company’s special system for the storage, use and management of raised funds, the storage, use, change and supervision of raised funds of the company shall be implemented in accordance with these measures.
The board of directors of the company shall disclose the storage, use and management of the raised funds in accordance with the listing rules and other relevant laws, regulations, normative documents and the articles of association. Chapter II deposit of raised funds
Article 6 the raised funds shall be centrally managed in a special account established by a reputable financial institution approved by the board of directors of the company. The financial department of the company is responsible for handling the account establishment procedures and reporting the account establishment to the office of the board of directors of the company for the record.
The special account for raised funds shall not deposit non raised funds or be used for other purposes.
Article 7 the company’s raised funds shall be deposited in accordance with the following provisions: (I) after the raised funds are in place, if the change of the company’s registered capital is involved, the company shall timely go through the relevant procedures for the change of the company’s registered capital;
(II) the company shall, within one month after the raised funds are in place, sign a tripartite supervision agreement with the recommendation institution and the commercial bank storing the raised funds (hereinafter referred to as “commercial bank”); If the agreement is terminated in advance 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. The tripartite supervision agreement shall at least include the following contents:
1. The company shall centrally deposit the raised funds in the special account for raised funds;
2. 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 recommendation institution;
3. 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 notify the recommendation institution in time;
4. The recommendation institution can inquire the information of the special account for raised funds at the commercial bank at any time;
5. Liability for breach of contract of companies, commercial banks and sponsors.
The company shall report to Shanghai stock exchange for filing and announcement within 2 trading days after signing or re signing the tripartite supervision agreement.
Chapter III use of raised funds
Article 8 the company shall use the raised funds in accordance with the use plan of the raised funds promised in the issuance application documents. The use of raised funds shall be in strict accordance with the requirements of the company’s internal financial management system, complete the application, decision-making and approval process, and pay attention to risk prevention. 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 the Shanghai Stock Exchange and make an announcement.
Article 9 in case of any of the following circumstances in a raised capital investment project (hereinafter referred to as “raised capital investment project”), the company shall re demonstrate the feasibility and expected income of the project, decide whether to continue to implement the project, and disclose the progress of the project, the reasons for abnormalities and the adjusted raised capital investment plan (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 10 the use of raised funds shall comply with the following provisions:
(I) in principle, the funds raised by the company shall be used for the main business. Except for financial enterprises, the raised investment projects shall not be financial investments such as holding trading financial assets and financial assets available for sale, lending to others, entrusted financial management, or directly or indirectly investing in companies whose main business is the trading of securities;
(II) the company shall not change the purpose of the raised funds in disguised form through pledge, entrusted loan or other means;
(III) the raised funds shall be used exclusively and shall not be occupied or misappropriated by the controlling shareholder, actual controller and other related persons of the company; It is not allowed to obtain illegitimate benefits for related parties by using the raised investment project.
Article 11 if the company invests the raised funds into the investment projects in advance with the self raised funds, 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, 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 Shanghai Stock Exchange and make an announcement within 2 trading days after the meeting of the board of directors.
Article 12 the raised funds temporarily idle by the company 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 Shanghai stock exchange for filing and announcement within 2 trading days.
Article 13 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.
Article 14 the company shall meet the following requirements when using idle raised funds to supplement working capital temporarily:
(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) the temporary replenishment of working capital is limited to the production and operation related to the main business, and shall not be used for the placement of new shares, subscription, or trading of stocks and their derivatives, convertible corporate bonds, etc. through direct or indirect arrangements;
(III) the maximum time for a single replenishment of working capital shall not exceed 12 months;
(IV) the funds previously raised for temporary replenishment of working capital that have been returned and have expired (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 Shanghai Stock Exchange and make an announcement within 2 trading days after the meeting of the board of directors.
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 report to the Shanghai Stock Exchange and make an announcement within 2 trading days after the return of all the capital.
Article 15 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 deliberated and approved by the board of directors and can only be used after the independent directors, the board of supervisors and the recommendation institution Express their explicit consent. The company shall report to the Shanghai 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 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 16 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’s use of the surplus funds shall meet the following conditions: (I) the independent directors and the board of supervisors express their explicit consent;
(II) the recommendation institution gives explicit consent;
(III) reviewed and approved by the board of directors and the general meeting of shareholders. The company shall report to the Shanghai 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 10% of the amount of raised funds, they 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 Shanghai 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 yuan or less than 5% of the net raised funds, the procedures in the preceding paragraph may be exempted, and their use shall be disclosed in the latest periodic report.
Chapter IV use of over raised funds
Article 17 the part of the net amount of the company’s actual raised funds that exceeds the amount of the planned raised funds (hereinafter referred to as “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 the company shall promise not to make high-risk investment or provide financial assistance to others within 12 months after replenishing working capital.
Article 18 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 Shanghai 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 19 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 of Articles 20 to 23 of these measures, scientifically and prudently analyze the feasibility of investment projects, and timely fulfill the obligation of information disclosure.
Chapter V change of investment direction of raised funds
Article 20 the funds raised by the company shall be used for the purposes listed in the prospectus or the prospectus. The company shall be deemed to have changed the purpose of the raised funds under the following circumstances:
(I) cancel the original fund-raising projects and implement new projects;
(II) change the implementation subject of the investment project with raised funds (except for the change of the implementation subject between the listed company and its wholly-owned subsidiaries);
(III) change the implementation method of the project invested by the raised funds;
(IV) other circumstances identified by the exchange as changes in the investment direction of the raised funds.
In case of any change of the company’s raised investment project, it must be deliberated and approved by the board of directors and the general meeting of shareholders, and the change can be made only after the independent directors, the recommendation institution and the board of supervisors express their explicit consent. If the company only changes the implementation place of the raised investment project, it may be exempted from the above procedures, but it shall be reviewed and approved by the board of directors of the company, and report to the Shanghai Stock Exchange and make an announcement within 2 trading days, stating the reasons for the change and the opinions issued by the sponsor.
Article 21 the raised investment projects after the change of the company 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.
Article 22 If the company intends to change the raised investment project, it shall report to the Shanghai Stock Exchange within 2 trading days after submitting it to the board of directors for deliberation and announce the following contents:
(I) basic information of the original raised investment project and specific reasons for changing the raised investment project; (II) description of the basic information, feasibility analysis and risk warning of the new raised investment project;
(III) the investment plan of the newly raised investment project;
(IV) description that the new raised investment project has been obtained or has yet to be approved by relevant departments (if applicable);
(V) opinions of independent directors, the board of supervisors and the recommendation institution on the change of raised investment projects; (VI) explanation that the change of raised investment project needs to be submitted to the general meeting of shareholders for deliberation;
(VII) other contents required by Shanghai Stock Exchange.
Where a new raised investment project involves related party transactions, purchase of assets and foreign investment, it shall also be disclosed with reference to the provisions of relevant rules.
Article 23 If the company changes the investment direction of the raised funds for the acquisition of the assets (including rights and interests) of the controlling shareholder or actual controller, it shall ensure that horizontal competition can be effectively avoided and related party transactions can be reduced after the acquisition.
Article 24 Where the company plans to transfer or replace the raised investment projects (all the raised investment projects have been transferred or disposed of during the company’s major asset restructuring)
