Haitian Water Group Co.Ltd(603759)
Foreign investment management system
Chapter I General Provisions
Article 1 in order to strengthen the management and control of Haitian Water Group Co.Ltd(603759) (hereinafter referred to as “the company”) foreign investment, clarify foreign investment procedures, standardize foreign investment behavior, prevent foreign investment risks and effectively protect the interests of the company and shareholders, in accordance with the company law of the people’s Republic of China and other relevant laws, regulations, normative documents and Haitian Water Group Co.Ltd(603759) articles of Association (hereinafter referred to as “the articles of association”), This system is formulated with reference to the relevant provisions of the stock listing rules of Shanghai Stock Exchange.
Article 2 the term “foreign investment” as mentioned in this system refers to the company’s investment activities in various forms in order to obtain future income by making a certain amount of capital, equity, appraised houses, machines, equipment and other physical objects, as well as intangible assets such as patent right and land use right. According to the length of the investment period, the company’s foreign investment is divided into short-term investment and long-term investment.
Short term investment mainly refers to the investment purchased by the company that can be realized at any time and held for no more than one year (including one year), including various stocks, bonds, funds, dividend insurance, etc. Long term investment mainly refers to all kinds of investments with an investment term of more than one year that cannot be realized at any time or are not ready to be realized, including bond investment, equity investment and other investments. Including but not limited to the following types:
(I) enterprises independently established by the company or business projects independently funded by the company;
(II) the company invests to establish joint ventures with other domestic (foreign) independent legal entities and natural persons;
(III) participating in other domestic (foreign) independent legal entities;
Article 3 this system is applicable to the foreign investment activities of the company and its wholly-owned subsidiaries, holding subsidiaries and companies with control within the scope of consolidated statements (hereinafter referred to as “subsidiaries”).
Chapter II responsibilities and authorities
Article 4 the general meeting of shareholders, the board of directors and the chairman of the board of directors are the decision-making bodies of the company’s foreign investment.
Article 5 the general meeting of shareholders, the board of directors and the chairman of the board of directors of the company shall make decisions on the company’s foreign investment within their respective authorities..
(I) authority of the general meeting of shareholders
1. The total assets involved in the transaction (if there are both book value and assessed value, whichever is higher) account for more than 50% of the company’s latest audited total assets (consolidated statement caliber).
2. The transaction amount of the transaction (including the debts and expenses undertaken) accounts for more than 50% of the company’s latest audited net assets, and the absolute amount exceeds 50 million yuan.
3. The profit generated from the transaction accounts for more than 50% of the audited net profit (consolidated statement caliber) of the company in the latest fiscal year, and the absolute amount exceeds 5 million yuan.
4. The relevant operating income of the transaction object in the latest fiscal year accounts for more than 50% of the audited operating income (consolidated statement caliber) of the company in the latest fiscal year, and the absolute amount exceeds 50 million yuan.
5. The related net profit of the transaction object 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 5 million yuan.
6. The net assets involved in the subject matter of the transaction account for more than 50% of the company’s latest audited net assets, and the absolute amount exceeds 50 million yuan.
7. When the company’s foreign investment involves related party transactions (except for the company’s gift of cash assets and the provision of guarantee), the transaction amount to be incurred with related parties is more than 30 million yuan, accounting for more than 5% of the absolute value of the company’s latest audited net assets.
If the data involved in the above indicators is negative, the absolute value shall be taken for calculation.
When the above transactions 1-6 occur, the company shall cumulatively calculate all transactions related to the subject matter within 12 consecutive months; In the event of the transaction mentioned in Item 7 above, the transactions with the same connected person or the transactions with different connected persons related to the same transaction subject matter shall be calculated cumulatively within 12 consecutive months.
Those who have fulfilled the relevant review obligations in accordance with the above provisions will not be included in the cumulative calculation scope. (II) authority of the board of directors
1. The total assets involved in the transaction (if there are both book value and assessed value, whichever is higher) account for more than 10% of the company’s latest audited total assets (consolidated statement caliber).
2. The transaction amount of the transaction (including the debts and expenses undertaken) accounts for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds 10 million yuan.
3. 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 1 million yuan.
4. The relevant operating income of the transaction object in the latest fiscal year accounts for more than 10% of the audited operating income (consolidated statement caliber) of the company in the latest fiscal year, and the absolute amount exceeds 10 million yuan.
5. The net profit related to the transaction object in the latest fiscal year accounts for more than 10% of the audited net profit of the company in the latest fiscal year, and the absolute amount exceeds 1 million yuan.
6. The net assets involved in the subject matter of the transaction account for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds 10 million yuan.
7. When the company’s foreign investment involves related party transactions (except for the company’s gift of cash assets and the provision of guarantee), the transaction amount to be incurred with related parties is more than 3 million yuan, accounting for more than 0.5% of the absolute value of the company’s latest audited net assets.
If the data involved in the above indicators is negative, the absolute value shall be taken for calculation.
(III) authority of the chairman
If the company’s foreign investment fails to meet the deliberation standards of the general meeting of shareholders and the board of directors, it shall be deliberated and approved by the chairman of the board of directors.
Article 6 in case of “purchase or sale of assets” transaction of the company, regardless of whether the transaction subject matter is related or not, if the total assets or transaction amount involved in the transaction exceeds 30% of the company’s latest audited total assets within 12 consecutive months, a resolution shall be made by the general meeting of shareholders and approved by more than two-thirds of the voting rights held by the shareholders attending the meeting.
Article 7 no matter the foreign investment with the company as the main body or the foreign investment with the subsidiary as the main body, the corresponding examination and approval procedures shall be performed in accordance with the provisions of Articles 5 and 6 of this system. Among them, the foreign investment of subsidiaries shall also perform the corresponding examination and approval procedures in accordance with the provisions of their articles of association.
Article 8 the project undertaking unit or department is the centralized management department of foreign investment and is responsible for the management of specific affairs of foreign investment within the framework of the investment plan formulated by the board of directors and the general manager’s office meeting of the company; The finance department is responsible for the financial management and accounting of foreign investment, and cooperates with the project undertaking unit or department to carry out project feasibility analysis, go through capital contribution procedures, tax registration, etc.
Article 9 after completing the preliminary investigation of foreign investment projects, the project undertaking unit or department shall submit it to the general manager’s office meeting for review; After the approval of the general manager’s office meeting, the foreign investment projects within the authority of the chairman shall be submitted to the chairman for deliberation and approval; Foreign investment within the authority of the board of directors or the general meeting of shareholders shall be submitted to the strategy and Development Committee of the board of directors for deliberation. After deliberation, it shall be submitted to the board of directors or the general meeting of shareholders for approval according to its corresponding authority.
Article 10 the implementation plan of foreign investment projects adopted by the chairman of the board of directors, the board of directors or the general meeting of shareholders shall specify the time, amount, mode, shareholding ratio, project undertaking unit or department and other specific contents.
Article 11 for major foreign investment projects that need to be considered and approved by the general meeting of shareholders and those identified as major foreign investment projects by the board of directors and the chairman of the board of directors, relevant professional institutions or personnel can be employed to conduct due diligence and feasibility analysis.
Chapter III Implementation and control of foreign investment projects
Article 12 after the implementation plan of foreign investment projects is approved by the chairman, the board of directors or the general meeting of shareholders, the project undertaking unit or department shall be responsible for the specific implementation under the organization of the president. Unless expressly authorized, the change of the implementation plan of foreign investment projects must be reviewed and approved by the general meeting of shareholders, the board of directors or the chairman of the board of directors of the company.
Article 13 the project undertaking unit or department shall participate in the implementation of long-term foreign investment projects in the whole process, track and understand the implementation of foreign investment projects, be responsible for keeping various resolutions, contracts, agreements, equity certificates and other documents formed in the process of foreign investment, establish perfect foreign investment archives, and report the progress of the project to the chairman or president regularly or irregularly. Article 14 the project undertaking unit or department shall cooperate with the financial department of the company to check the accounts regularly or irregularly to ensure the safety of foreign investment, and strengthen the control of foreign investment income. The interest, dividend and other income obtained from foreign investment shall be included in the company’s accounting system, and it is strictly prohibited to set up off book accounts.
Article 15 the company shall assign directors, supervisors, chief financial officer or other senior managers to the invested enterprise according to relevant regulations and needs, supervise and manage the major events and important economic conditions of the invested enterprise, understand and master its financial, operation and management status at any time in accordance with legal procedures and methods, timely find and report the problems in its operation, give early warning, put forward handling opinions and supervise the implementation.
Article 16 the investment in stocks, funds, financial products and other financial assets shall be implemented after being approved in accordance with the examination and approval authority specified in the system. The finance department shall regularly form a written report on the investment environment, risks and income of the underlying financial assets, so that the operation and management of the company can consult and master the maintenance and appreciation of the company’s funds.
Article 17 the company shall regularly obtain and analyze the quarterly, semi annual and annual reports and relevant statements of the invested enterprise according to the specific conditions, form a report on the operation of foreign investment, and submit it to the chairman or president regularly.
Article 18 the strategic investment department shall cooperate with the audit department to carry out internal audit on the invested units included in the consolidated statements of the company on a regular or irregular basis in accordance with the relevant provisions of the company. Chapter IV Disposal of foreign investment projects
Article 19 the company shall strengthen the control over the asset disposal of foreign investment projects. The recovery, transfer, write off and other disposal of foreign investment shall be handled by the project undertaking unit or department under the organization of the president after being approved by the chairman, the board of directors or the general meeting of shareholders in accordance with the approval authority specified in Chapter II of this system.
Article 20 the project undertaking unit or department shall carefully review the approval documents, meeting minutes, asset recovery list and other relevant materials related to the disposal of foreign investment assets, and timely carry out the accounting treatment of the disposal of foreign investment assets in accordance with the regulations to ensure the authenticity and legality of the disposal of assets.
Chapter V Supervision and inspection
Article 21 the strategic investment department, securities department and finance department shall regularly or irregularly supervise and inspect the company’s foreign investment management. The main contents of supervision and inspection include:
(I) implementation of the authorization and approval system for foreign investment. Focus on checking whether the authorization and approval procedures for foreign investment business are sound and whether there is ultra vires approval;
(II) custody of approval documents, contracts, agreements and other relevant legal documents for foreign investment activities;
(III) accounting of foreign investment projects. Focus on checking whether the original vouchers are true, legal, accurate and complete, whether the accounting subjects are used correctly, and whether the accounting is accurate and complete;
(IV) use of foreign investment funds. Focus on checking whether the funds are used according to the planned purpose and budget, and whether there is extravagance, waste, misappropriation and misappropriation of funds in the use process;
(V) custody of foreign investment assets. Focus on checking whether there are discrepancies between accounts and facts;
(VI) whether there are transactions outside the special account for financial asset investment, and whether there are circumstances beyond the scope and amount of investment;
(VII) disposal of foreign investment. Focus on checking whether the approval procedures for the disposal of foreign investment are correct and whether the process is true and legal.
Article 22 the strategic investment department, securities department and finance department shall form a written report on the relevant problems found in the process of supervision and inspection, timely submit it to the chairman or president, and investigate the responsibilities of relevant personnel.
Chapter VI supplementary provisions
Article 23 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the relevant provisions of the articles of association.
If the system is inconsistent with relevant laws, regulations, normative documents and the articles of association, the relevant laws, regulations, normative documents and the articles of association shall prevail.
Article 24 the terms “above” and “below” in this system include this number; “Over” does not include this number.
Article 25 the system shall be interpreted by the board of directors of the company.
Article 26 the system shall come into force after being deliberated and approved by the general meeting of shareholders of the company, and the same shall apply to the modification.
