Administrative measures for the use of raised funds
(revised in 2022)
Chapter I General Provisions
Article 1 in order to standardize the storage, use and management of the raised funds of Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) (hereinafter referred to as “the company”), ensure the safety of the raised funds, improve the use efficiency of the raised funds and effectively 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 (hereinafter referred to as the Securities Law), the measures for the administration of securities issuance of listed companies, the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies, and the stock listing rules of Shenzhen Stock Exchange (hereinafter referred to as the stock listing rules) These measures are formulated in combination with the actual situation of the company, such laws and regulations as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the relevant provisions of Guangzhou Tech-Long Packaging Machinery Co.Ltd(002209) 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 from investors and used for specific purposes by listed companies through public issuance of securities (including initial public offering of shares, allotment of shares, additional issuance, issuance of convertible corporate bonds, separately traded convertible corporate bonds, corporate bonds, warrants, etc.) and non-public issuance of securities. Article 3 when refinancing, the company must perform the investment decision-making procedures, and the refinancing plans for investment projects, fund raising and fund use plans must be submitted to the general meeting of shareholders for deliberation.
(I) the investment projects selected by the company must be fully demonstrated and actively listen to the opinions of independent directors, and the board of directors shall fully respect the opinions of independent directors;
(II) the amount of funds raised shall not exceed the required amount of the project to be invested;
(III) the purpose of the raised funds complies with the national industrial policies and the provisions of laws and administrative regulations on environmental protection and land management;
(IV) after the implementation of the investment project with raised funds, there will be no horizontal competition with the controlling shareholder or actual controller or affect the independence of the company’s production and operation.
Article 4 after the raised funds are in place, the company shall timely go through the capital verification procedures, and the relevant capital verification report shall be issued by an accounting firm in accordance with the provisions of the securities law.
Article 5 the raised funds can only be used for the use of the raised funds promised by the company in the issuance documents. The board of directors of the company is responsible for formulating the use plan of the raised funds and timely disclosing the use of the raised funds in accordance with relevant regulations, so as to make the use of the funds open, transparent and standardized.
Article 6 if the investment project of raised funds is implemented through the company’s wholly-owned subsidiaries or other enterprises controlled by the company, this raised funds system is applicable to the above-mentioned wholly-owned subsidiaries and other enterprises controlled by the company.
Article 7 if the company suffers losses due to the failure to use the raised funds in accordance with the provisions or change the purpose of the raised funds without performing the legal approval procedures, the corresponding responsible person shall bear legal liabilities including but not limited to civil compensation in accordance with the provisions of laws and regulations.
Chapter II special account storage of raised funds
Article 8 the company shall carefully select a commercial bank and open a special account for raised funds (hereinafter referred to as “special account”), and the raised funds shall be deposited in the special account determined 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 raised funds for more than two times, it shall set up a special account for raised funds independently.
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 sign a tripartite supervision agreement (hereinafter referred to as the agreement) with the recommendation institution and the commercial bank depositing the raised funds (hereinafter referred to as the “commercial bank”) within one month after the raised funds are in place. The agreement shall at least include the following contents:
(I) the company shall deposit the raised funds in a special account;
(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) if the company withdraws more than 10 million yuan or 5% of the net raised funds from the special account in one time or within 12 months, the company and the commercial bank shall notify the recommendation institution in time;
(IV) the commercial bank shall issue the bank statement to the company every month and send a copy to the recommendation institution;
(V) the recommendation institution can inquire the information of the special account at the commercial bank at any time;
(VI) the supervision responsibilities of the recommendation institution, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution and the commercial bank on the use of the company’s raised funds;
(VII) rights, obligations and liabilities for breach of contract of the company, commercial banks and recommendation institutions;
(VIII) if a commercial bank fails to issue a statement of account to the recommendation institution in time or notify the special account of large withdrawals for three times, or fails to cooperate with the recommendation institution 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.
If the company implements a raised investment project through a holding subsidiary, the company, the holding subsidiary implementing the raised investment project, the commercial bank and the recommendation institution shall jointly sign a tripartite supervision agreement, and 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 its 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.
Article 10 the company shall actively urge commercial banks to perform the agreement. If a commercial bank fails to issue a statement of account to the recommendation institution in time for three consecutive times or notify the special account of large withdrawals, or fails to cooperate with the recommendation institution in querying and investigating the information of the special account, the company may terminate the agreement and cancel the special account for raised funds.
Chapter III use and management of raised funds
Article 11 the board of directors of the company shall use the raised funds in accordance with the investment plan of the raised funds promised in the issuance application documents. 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 12 unless otherwise specified in national laws, regulations and other normative documents, the use of the raised funds of the company shall not be financial investments such as holding trading financial assets and financial assets available for sale, lending to others and entrusted financial management, and shall not directly or indirectly invest in companies whose main business is the purchase and sale of securities.
The company shall not use the raised funds for pledge, entrusted loan or other investment that changes the purpose of the raised funds in a disguised form.
Article 13 Where the idle raised funds of the company are temporarily used to supplement working capital, they shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent and disclose, 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 previously raised funds for temporary replenishment of working capital have been returned (if applicable);
(III) the time for a single replenishment of working capital shall not exceed 12 months;
(IV) no venture capital investment has been made in the past 12 months, and promised not to make venture capital investment or provide financial assistance to objects other than holding subsidiaries during the period of temporarily replenishing working capital with idle raised funds.
The term “venture capital” as mentioned in the preceding paragraph refers to the investment in stocks and their derivatives, fund investment, futures investment, real estate investment by listed companies with non real estate as their main business, securities investment products with the above investment as the subject matter, and other investment activities recognized by the bourse.
When idle raised funds are used to supplement working capital, they are 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.
Article 14 Where the company uses idle raised funds to supplement working capital, it shall make an announcement in accordance with the provisions of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”) after being submitted to the board of directors for deliberation and approval.
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 make an announcement within two trading days after all the capital is returned.
Article 15 when using the raised funds, the company shall strictly perform the application and approval procedures. The joint signature system of the chairman, general manager and chief financial officer shall be implemented for the use of the raised funds. Each expenditure of the raised funds shall be implemented by the user department according to the use plan of the investment project of the raised funds, after being reviewed by the finance department, and then reported to the general manager and the chairman for signature and approval.
Article 16 the board of directors of the company shall comprehensively check the progress of the investment projects with raised funds every six months. If the difference between the actual use of the raised funds and the estimated use amount of the last disclosed investment plan of the raised funds exceeds 30%, the company shall adjust the investment plan of the raised funds, and disclose the latest investment plan of the raised funds, the current actual investment progress, the adjusted investment plan and the reasons for the change of the investment plan in the special report on the storage and use of the raised funds.
Article 17 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:
(I) major changes have taken place in the market environment involved in the investment project with raised funds;
(II) the project invested with raised funds has been shelved for more than one year;
(III) exceeding the completion period of the investment plan of the latest 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 project invested with raised funds.
Article 18 where the company replaces the self raised funds that have been invested in the investment projects of the raised funds in advance with the raised funds, it can be implemented only after the deliberation and approval of the board of directors, the authentication report issued by the accounting firm, the express consent of the independent directors, the board of supervisors and the recommendation institution and the performance of the obligation of information disclosure.
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 19 the company shall, according to the actual production and operation needs of the enterprise, submit it to the board of directors or the general meeting of shareholders for deliberation and approval, and use the over raised funds in a planned manner in the following order:
(I) supplement the fund gap of raised investment projects;
(II) for projects under construction and new projects;
(III) repayment of bank loans;
(IV) temporarily replenish working capital;
(V) cash management;
(VI) permanent replenishment of working capital.
If the company uses the over raised funds for projects under construction and new projects, it shall use them according to the progress of projects under construction and new projects; If a project is implemented through a subsidiary, a special account for the raised funds shall be established in the subsidiary. If the over raised funds are only used for capital increase to subsidiaries, it shall be handled with reference to the relevant provisions on repayment of bank loans or supplement of working capital with over raised funds.
When the company uses the over raised funds for projects under construction and new projects, the recommendation institution and independent directors shall issue special opinions. If they should be submitted to the general meeting of shareholders for deliberation in accordance with the provisions of the stock listing rules, they shall also be submitted to the general meeting of shareholders for deliberation.
When using the over raised funds for projects under construction and new projects, the company shall perform the obligation of information disclosure in accordance with the requirements of the stock listing rules.
Article 20 Where a listed company uses the over raised funds to repay bank loans or permanently supplement working capital, it shall be deliberated and approved by the general meeting of shareholders. The independent directors, the board of supervisors and the recommendation institution shall express their explicit consent and disclosure, and shall meet the following requirements:
(I) the company shall promise not to make high-risk investments such as securities investment and derivatives trading within 12 months after replenishing working capital, and provide financial assistance to objects other than holding subsidiaries and disclose to the public;
(II) the company shall repay the bank loan or supplement the working capital according to the actual demand, and the cumulative amount within each twelve months shall not exceed 30% of the total amount of over raised funds.
Article 21 Where the company uses the temporarily idle raised funds for cash management, the term of investment products shall not exceed 12 months, and the following conditions must be met:
(I) principal guaranteed products with high security such as structured deposits and certificates of deposit;
(II) good liquidity shall not affect the normal progress of the investment plan of the raised funds.
In principle, the company shall only invest in investment products whose issuer is a commercial bank, which shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent. If it should be submitted to the general meeting of shareholders for deliberation in accordance with the provisions of the stock listing rules, it shall also be submitted to the general meeting of shareholders for deliberation.
If the issuer of investment products is a financial institution other than a commercial bank, it shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors and the recommendation institution shall express their explicit consent, and shall be submitted to the general meeting of shareholders for deliberation. 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 stock exchange for filing and announcement.
Article 22 Where a company uses idle raised funds for cash management, it shall make an announcement in accordance with the provisions of the Shenzhen Stock Exchange after being submitted to the board of directors for deliberation and approval.
After the initial disclosure, when there are major adverse factors such as the deterioration of the financial situation of the product issuer and the loss of the invested products, the company shall disclose in time, prompt the risks, and disclose the risk control measures taken or planned to be taken to ensure the safety of funds.
Article 23 Where a company purchases assets from specific objects by issuing securities as payment, it shall ensure that the ownership transfer procedures of the above assets are completed before the listing of new shares, and the law firm hired by the company shall issue a special legal opinion on the completion of the asset transfer procedures.
Article 24 Where a company purchases assets from a specific object by issuing securities or raises funds for the acquisition of assets, the relevant parties shall strictly abide by and perform the relevant commitments related to the acquisition of assets. Article 25 Where the raised funds are used to purchase the assets or equity of individuals, legal persons or other organizations that have actual control over the company and their affiliates, the following provisions shall be followed:
(I) in principle, the acquisition should be able to effectively avoid horizontal competition, reduce the continuous related party transactions after the acquisition, or help the company expand new business, but it must be conducive to the long-term development of the company and effectively protect the interests of small and medium-sized investors;
(II) relevant provisions on decision-making and disclosure of related party transactions in the stock listing rules;
(III) relevant provisions on decision-making and disclosure of related party transactions in the company’s information disclosure system and other relevant systems.
Article 26 Where the company changes the implementation location of the investment project with raised funds, it shall be deliberated and approved by the board of directors, and make an announcement within two trading days, explaining the change, reasons and actual conditions of the investment project with raised funds
