External guarantee management system
Guangzhou, Guangdong
January 2002
External guarantee management system
Chapter I General Provisions
Article 1 in order to regulate the external guarantee of Ligao Foods Co.Ltd(300973) (hereinafter referred to as “the company”), effectively control the external guarantee risk of the company and protect the safety of the company’s assets, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the guarantee law of the people’s Republic of China and other laws, administrative regulations, rules and normative documents, And the relevant provisions of the Ligao Foods Co.Ltd(300973) articles of Association (hereinafter referred to as the “articles of association”) and in combination with the actual situation of the company, this system is hereby formulated.
Article 2 the term “external guarantee” as mentioned in this system refers to the guarantee, mortgage, pledge or other forms of guarantee provided by the company and its holding subsidiaries to others as a third party, including the guarantee provided by the company to its holding subsidiaries. This system is not applicable to the guarantee provided by the company and its holding subsidiaries for their own debts.
If the external guarantee also constitutes a connected transaction, the relevant provisions of the company’s connected transaction management system shall also be implemented. Article 3 the company’s external guarantee shall follow the principles of legality, prudence, mutual benefit and safety, and strictly control the possible risks of external guarantee.
All directors and senior managers of the company shall carefully treat and strictly control the risk of external guarantee of the company. Article 4 the company and its holding subsidiaries shall not provide external guarantees without the deliberation and approval of the general meeting of shareholders or the board of directors.
Article 5 the company has the right to refuse any act of forcing it to provide guarantee for others. In addition to the guarantee provided by the company to the holding subsidiary, the holding subsidiary to the company and the holding subsidiary, other external guarantees provided by the company and the holding subsidiary shall require the other party to provide counter guarantee. The counter guarantee provider shall have actual guarantee ability, the counter guarantee shall be enforceable, and the amount of counter guarantee shall correspond to the amount guaranteed by the company for the guaranteed.
The company shall strengthen the management of the counter guarantee property, properly keep the right certificates of the guaranteed for counter guarantee, regularly verify the existence status and value of the property, and timely deal with any problems found to ensure the safety and integrity of the counter guarantee property. Article 6 the Finance Department of the company is the daily management department of the company’s external guarantee.
Chapter II examination and approval of external guarantees
Article 7 in addition to the holding subsidiaries of the company, the company may also provide guarantees for units that meet one of the following conditions and apply to the company:
(I) mutual insurance units for business needs;
(II) existing or potential important business units of the company.
Article 8 the company shall not provide guarantee for the guarantee applicant under the following circumstances:
(I) the investment of funds does not comply with national laws and regulations or national industrial policies;
(II) providing false information;
(III) the company has provided guarantee for it and overdue repayment has occurred;
(IV) deterioration of business conditions and bad credit;
(V) the net assets are negative;
(VI) other circumstances that do not comply with national laws and regulations or that the board of Directors considers it impossible to provide guarantee.
Article 9 If an entity other than the company and its holding subsidiaries applies for a guarantee from the company, it shall have good operating conditions and corresponding solvency. The finance department shall require the guarantee applicant to provide the company with the following information:
(I) analysis report on basic information, operation status and industry prospect of the enterprise;
(II) the latest audit report and the current financial statements;
(III) main contract and data related to the main contract;
(IV) bank loan purpose and expected economic effect of this guarantee (if applicable);
(V) analysis of bank loan repayment ability guaranteed by this item (if applicable);
(VI) description that there is no major litigation, arbitration or administrative punishment;
(VII) counter guarantee scheme and proof that the counter guarantee provider has actual bearing capacity;
(VIII) other relevant information deemed necessary by the company.
The guarantee applicant shall ensure that the materials provided are true, accurate, complete and effective.
The finance department shall investigate the above information provided by the guarantee applicant to determine whether the information is true.
Article 10 the finance department shall review whether the guarantee applicant meets the following requirements and prepare the feasibility study and risk assessment report of external guarantee:
(I) the enterprise legal person established and validly existing according to law does not need to be terminated, and its industry complies with the provisions of the national industrial policy;
(II) it is in good operating and financial condition, and has stable cash flow or good development prospects; (III) where a guarantee has been provided, there is no case where the creditor requires the company to bear joint and several guarantee liability; (IV) have assets that can be mortgaged (pledged) and have corresponding counter guarantee ability;
(V) the company can take risk prevention measures against it;
(VI) there are no other legal risks.
Article 11 the finance department shall submit the feasibility study and risk assessment report of external guarantee to the chief financial officer and the general manager for approval, and the general manager shall submit it to the board of directors for deliberation.
Article 12 the board of directors of the company shall fully investigate the operation and credit status of the guaranteed before considering the external guarantee proposal, carefully consider and analyze the financial status, operation status, industry prospect and credit status of the guaranteed, and make prudent decisions according to law. The company may, when necessary, hire an external professional institution to assess the guarantee risk as the basis for the decision-making of the board of directors or the general meeting of shareholders.
Article 13 when the board of Directors considers the provision of guarantee, the directors shall actively understand the basic information of the guaranteed party, such as operation and financial status, credit status, tax payment, etc. The directors shall make prudent judgment on the compliance and rationality of the guarantee, the ability of the guaranteed party to repay the debt, whether the counter guarantee measures are effective and whether the guarantee risk is controllable.
When the board of directors deliberates the guarantee proposal for the company’s holding company and joint-stock company, the directors shall focus on whether the holding subsidiary and other shareholders of the joint-stock company provide the same proportion of guarantee or counter guarantee and other risk control measures according to the equity ratio, whether the guarantee risk is controllable and whether it damages the interests of the company.
Article 14 the highest decision-making body of the company’s external guarantee is the general meeting of shareholders of the company, and the board of directors exercises the power of examination and approval of external guarantee in accordance with the provisions of the articles of association on the authority of examination and approval of external guarantee of the board of directors. If the approval authority of the board of directors specified in the articles of association is exceeded, the board of directors shall put forward a plan and submit it to the general meeting of shareholders for approval. The board of directors shall organize, manage and implement the external guarantees approved by the general meeting of shareholders.
Article 15 for the guarantee matters within the authority of the board of directors, the consent of more than 2 / 3 of the directors attending the meeting of the board of directors shall be obtained.
Article 16 the independent directors of the company shall express their independent opinions on the legality and compliance, impact on the company and existing risks when the board of Directors considers the external guarantees (except for providing guarantees to subsidiaries within the scope of merger), and may hire an accounting firm to check the company’s accumulated and current external guarantees when necessary. If any abnormality is found, it shall be reported to the board of directors in time.
Chapter III execution and risk management of external guarantee
Article 17 after the external guarantee of the company is approved by the competent department of the company, the chairman of the company or his authorized person shall sign the guarantee contract on behalf of the company.
After the external guarantee of the company’s holding subsidiary is approved by the competent department of the company, the chairman of the holding subsidiary or his authorized person shall sign the guarantee contract on behalf of the company.
When signing the guarantee contract, the signatory must hold the resolution of the board of directors or the general meeting of shareholders on the guarantee and the authorization document of the signatory. The signatory shall not sign a guarantee contract beyond his authority, nor shall he sign a guarantee contract exceeding the amount authorized by the board of directors or the general meeting of shareholders.
Article 18 written contracts shall be concluded for external guarantee projects reviewed and approved by the general meeting of shareholders or the board of directors. The guarantee contract shall comply with relevant laws and regulations and clearly stipulate the following terms:
(I) type and amount of principal creditor’s rights guaranteed;
(II) the time limit for the debtor to perform its obligations;
(III) guarantee method;
(IV) scope of guarantee;
(V) guarantee period;
(VI) rights, obligations and liabilities for breach of contract of each party;
(VII) other matters that the parties consider necessary to be agreed.
Before signing the guarantee contract, the Finance Department of the company shall review the terms of the guarantee contract and require the other party to delete or change the terms that are obviously detrimental to the interests of the company or may have unpredictable risks.
When accepting counter guarantee mortgage / pledge, the company shall go through mortgage, pledge and other relevant procedures in accordance with the law. Article 19 the guarantee contract concluded by the company and its holding subsidiaries shall be submitted to the Finance Department of the company for registration and filing within 7 days from the date of signing.
The Finance Department of the company shall properly manage the guarantee contract and relevant original materials, timely clean up and inspect them, regularly check with banks and other relevant institutions, ensure the integrity, accuracy and effectiveness of the archived materials, and pay attention to the timeliness and duration of the guarantee.
If the Finance Department of the company finds any abnormal guarantee contract that has not been deliberated and approved by the board of directors or the general meeting of shareholders in the process of contract management, it shall timely report to the board of directors and the board of supervisors.
Article 20 the finance department shall assign specific personnel to manage the single guarantee business. The person in charge of handling shall continue to pay attention to the situation of the guaranteed, collect the latest financial data and audit reports of the guaranteed, regularly analyze its financial status and solvency, pay attention to its production and operation, assets and liabilities, external guarantee, division and merger, change of legal representative, etc., and establish relevant financial files. The finance department shall regularly report the above information of the guaranteed to the board of directors.
Article 21 for the external guarantee matters that have been approved in accordance with this system, if the relevant guarantee contract is not signed within 30 days after the approval, and the external guarantee formalities are handled after the time limit is exceeded, the situation shall be explained to the financial department and the follow-up progress shall be reported in time.
Article 22 If the guaranteed debt needs to be extended after maturity and the company needs to continue to provide guarantee, it shall be regarded as a new external guarantee, and the procedures for examination and approval of guarantee application must be performed in accordance with the procedures specified in this system.
If the main debt contract guaranteed by the company is changed, the board of directors or the general meeting of shareholders shall decide whether to continue to bear the guarantee liability according to the guarantee amount.
Article 23 the person in charge of the guarantor shall report the possible risks to the financial department of the company in a timely manner according to the agreed debt maturity.
Article 24 when the guarantee contract expires, the company shall comprehensively check the property and certificates of rights used for guarantee, and timely terminate the guarantee relationship in accordance with the contract. The company shall properly keep the guarantee contract, the main contract related to the guarantee contract, the counter guarantee letter or counter guarantee contract, as well as the right certificate of mortgage and pledge and relevant original materials, so as to ensure that the guarantee business archives are complete.
Article 25 when the guaranteed fails to perform the repayment obligation within 15 days after the maturity of the debt, or the business condition of the guaranteed seriously deteriorates, or there is division, dissolution, bankruptcy, liquidation, creditor’s claim for the guarantor to perform the guarantee obligation, the finance department shall timely understand the debt repayment of the guaranteed and notify the Secretary of the board of directors and the general manager, The Secretary of the board of directors shall report to the board of directors. The board of directors shall take effective measures to minimize losses. Article 26 If the guaranteed cannot perform the contract and the creditor claims against the company, the company shall immediately start the counter guarantee recovery procedure, notify the Secretary of the board of directors and the general manager, and the Secretary of the board of directors shall report to the board of directors. Article 27 for the joint and several debt guarantee for which the guarantee period is not agreed, if the company finds that there is a great risk in continuing the guarantee, it shall timely notify the creditor in writing to terminate the guarantee contract, notify the Secretary of the board of directors and the general manager, and the Secretary of the board of directors shall report to the board of directors.
Article 28 after the people’s court accepts the debtor’s bankruptcy case, if the creditor fails to declare his creditor’s rights, the finance department shall request the company to participate in the distribution of bankruptcy property and exercise the right of recourse in advance.
Article 29 when the company is the general guarantor, it shall not assume the guarantee liability to the debtor before the dispute over the main contract has not been tried or arbitrated, and the debtor’s property is enforced according to law, but it is still unable to perform its debts. Article 30 if the guaranteed fails to perform its obligations at the expiration of the debt performance period, resulting in the guarantee liability of the company as the guarantor, the company shall timely recover from the guaranteed after assuming the guarantee liability, and disclose the recovery in a timely manner.
Chapter IV penalties
Article 31 all directors of the company shall review the external guarantees of the company in strict accordance with the provisions of the system and relevant laws, regulations, rules and normative documents. If they are personally responsible for the losses caused by illegal or improper external guarantees, the company shall investigate the legal liabilities of the relevant responsible persons.
Article 32 If the company’s management personnel and other relevant senior management personnel with audit authority in accordance with the provisions of this system approve or sign external guarantee contracts without authority or delay in performing their duties in accordance with the authority and procedures specified in this system, resulting in actual losses to the company, the company shall investigate the legal liabilities of the relevant responsible personnel.
Article 33 If the relevant responsible person is suspected of violating the relevant provisions of the criminal law of the people’s Republic of China, the company shall transfer it to the judicial organ to investigate its criminal responsibility according to law.
Chapter V supplementary provisions
Article 34 unless the context otherwise requires, “above” in this system includes this number; “Beyond” and “beyond” do not include this number.
Article 35 the board of directors of the company shall be responsible for the interpretation of this system.
Article 36 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, rules, normative documents and the articles of association. If the relevant national laws, regulations, rules and normative documents have different provisions on external guarantee, the new relevant provisions shall apply, and the system shall be modified in time.
Article 37 the system shall come into force on the date when it is deliberated and adopted by the general meeting of shareholders of the company, and the same shall apply when it is modified.
Ligao Foods Co.Ltd(300973) January 2022
