Foreign investment management system
Guangzhou, Guangdong
January 2002
Foreign investment management system
Chapter I General Provisions
Article 1 in order to regulate Ligao Foods Co.Ltd(300973) (hereinafter referred to as “the company” or “the company”), effectively control the company’s foreign investment risks and improve the benefits of foreign investment, 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 and other laws, administrative regulations and rules This system is hereby formulated in accordance with the relevant provisions of normative documents and 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.
Article 2 the term “foreign investment” as mentioned in this system includes the investment activities in which the company contributes a certain amount of monetary capital, equity, evaluated physical or intangible assets to obtain future income, as well as the investment activities with the main purpose of seeking short-term difference, such as entrusted loans, entrusted financial management, venture capital, etc, Specifically, it includes but is not limited to: (I) the company independently sets up enterprises or independently funded business projects;
(II) the company invests to establish joint ventures, cooperative companies or development projects with other independent legal entities and natural persons at home and abroad;
(III) capital increase and share expansion of existing enterprises;
(IV) investments in stocks, bonds, funds, futures and other financial derivatives;
(V) entrusted financial management, entrusted loans and investment in subsidiaries;
(VI) other foreign investment stipulated by laws and regulations.
Article 3 the term “venture capital” as mentioned in this system refers to stock and its derivatives investment, fund investment, futures investment, real estate investment, securities investment products with the above investment as the subject matter, and other investment behaviors recognized by Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”), but the following situations do not belong to venture capital:
(I) fixed income investment or commitment to capital preservation;
(II) participating in the allotment of shares or exercising the preemptive right of other listed companies;
(III) for the purpose of strategic investment, purchase more than 10% of the total share capital of other listed companies and plan to hold securities investment for more than 3 years;
(IV) investments made before the company’s initial public offering and listing.
Article 4 this system is applicable to all foreign investment activities of the company and its holding subsidiaries.
If the foreign investment also constitutes a connected transaction, it shall also comply with the relevant provisions of the company’s connected transaction management system. Article 5 the company’s foreign investment must comply with relevant national laws, regulations and industrial policies, follow the principles of legality, prudence, safety and effectiveness, control investment risks and pay attention to investment benefits.
Chapter II decision making authority for foreign investment
Article 6 the company’s foreign investment shall be reviewed by the general meeting of shareholders, the board of directors or the chairman of the board of directors in accordance with the articles of association and the system.
Article 7 although the company’s other foreign investment does not meet the deliberation standards of the board of directors specified in the articles of association, but such foreign investment matters are related to the chairman of the board of directors, they shall also be submitted to the board of directors for deliberation. Similar transactions related to the subject matter of the company’s transactions within 12 months shall be calculated cumulatively, and the decision-making procedures for foreign investment shall be determined based on the above-mentioned cumulatively calculated amount.
The above transactions have been subject to corresponding review procedures and will not be included in the relevant cumulative calculation scope.
Article 8 if the company’s foreign investment projects involve physical, intangible assets, company equity and other assets, and the amount of the proposed foreign investment meets the deliberation standards of the general meeting of shareholders, the relevant assets shall be audited or evaluated by an audit and evaluation institution with securities and futures related business qualifications.
Article 9 when a company invests abroad to establish a limited liability company or a joint stock limited company, it shall take the total amount of capital contribution agreed upon in the agreement as the standard and apply the decision-making procedures for foreign investment stipulated in the articles of association.
Chapter III internal control of foreign investment
Article 10 when considering and making decisions on foreign investment, the company shall fully investigate the following factors, including but not limited to:
(I) whether the relevant laws, regulations and policies involved in the investment project have express or implied restrictions on the investment;
(II) the investment project shall comply with the national and regional industrial policies, the company’s medium and long-term development strategy and annual investment plan;
(III) the investment project has proved to have good development prospects and economic benefits;
(IV) whether the company has the necessary conditions for the smooth implementation of relevant investment projects (including whether it has the conditions such as capital, technology, talents and raw material supply guarantee required for the implementation of the project);
(V) risk tolerance of the company.
Article 11 when making foreign investment, the company shall follow the principle of being conducive to the sustainable development of the company and the interests of all shareholders, there is no horizontal competition with the actual controller and related persons, and ensure the independence of the company’s personnel, integrity of assets and financial independence.
Article 12 the general meeting of shareholders is the company’s investment decision-making body, and the company’s major investment behavior shall be deliberated and approved by the general meeting of shareholders. The board of directors and the chairman of the board of directors shall exercise the investment decision-making power within the scope of authorization in accordance with the authorization of the general meeting of shareholders.
Article 13 when the board of Directors considers high-risk matters such as securities investment and derivatives trading, the directors shall pay full attention to whether the company has established a special internal control system, whether the investment risk is controllable, whether the risk control measures are effective, whether the investment scale affects the normal operation of the company, whether the source of funds is its own funds, whether there is investment in violation of regulations, etc.
Article 14 the strategy committee of the board of directors of the company is a special pre-trial body for the company’s major foreign investment, which is responsible for coordinating, coordinating and organizing the analysis and research of investment matters, forming a foreign investment plan and submitting it to the board of directors for deliberation. The strategy committee of the board of directors shall supervise the implementation progress of major investment projects and timely report the abnormalities of investment projects to the board of directors of the company.
Article 15 the Finance Department of the company is responsible for the capital and financial management of foreign investment. After the company’s foreign investment projects are determined, the financial department of the company shall be responsible for capital budget, financing, accounting, allocation and liquidation, cooperate with relevant parties to go through capital contribution procedures, industrial and commercial registration, tax registration, bank account opening and other work, and implement strict borrowing, approval and payment procedures.
The Finance Department of the company shall make comprehensive and complete financial records of the company’s foreign investment activities, conduct detailed accounting, establish detailed account books according to each investment project and record relevant materials in detail. The accounting method of foreign investment shall comply with the provisions of the accounting standards for enterprises and the accounting system.
Article 16 the internal audit department of the company shall be responsible for the regular audit of foreign investment and report to the board of directors in the annual internal audit report.
Article 17 the office of the board of directors of the company is responsible for keeping various resolutions, contracts, agreements and foreign investment equity certificates formed in the process of investment, and establishing detailed archives and records to ensure the safety and integrity of documents.
Article 18 a company established with foreign investment shall send directors and / or management personnel elected through legal procedures to participate in and supervise the operation decisions of the newly established subsidiary.
The dispatched personnel shall earnestly perform their duties in accordance with the company law and the articles of association of the invested company, safeguard the interests of the company in the operation and management activities of the invested company, and realize the preservation and appreciation of the company’s investment.
Article 19 the accounting methods, accounting policies, accounting estimates and changes adopted in the financial management of the company’s subsidiaries shall comply with the company’s financial accounting system and relevant regulations.
The company’s subsidiaries shall submit financial and accounting statements to the company’s financial management department every month, and timely submit accounting statements and provide accounting materials in accordance with the company’s requirements for preparing consolidated statements and disclosing accounting information.
Article 20 without the prior approval of the company, the holding subsidiaries of the company shall not invest abroad. In case of foreign investment of a holding subsidiary, it shall be submitted to the chairman of the board of directors, the board of directors or the general meeting of shareholders of the company for deliberation and approval according to the division of authority on foreign investment in the articles of association, and then implemented after being finally approved by the holding subsidiary in accordance with its articles of association and its internal decision-making procedures.
Article 21 for entrusted financial management, the company shall select a qualified professional financial management institution with good credit status and financial status, no bad credit record and strong profitability as the trustee, and sign a written contract with the trustee to clarify the amount, term, investment type, rights, obligations and legal liabilities of both parties.
The board of directors of the company shall assign special personnel to track the progress of entrusted financial management and investment safety, and shall require them to report in time in case of abnormalities, so that the board of directors can immediately take effective measures to recover funds and avoid or reduce losses of the company.
Article 22 the company shall try its best to avoid risk investment. If it is really necessary to make risk investment, it can only use its own funds.
Article 23 the company shall establish securities accounts and capital accounts in the name of the company for securities investment, and shall not use other people’s accounts or provide funds to others for securities investment.
Chapter IV transfer and recovery of foreign investment
Article 24 the transfer and recovery of the company’s foreign investment shall follow the corresponding decision-making procedures in accordance with the articles of association and the system.
Article 25 under any of the following circumstances, the company may recover its foreign investment:
(I) according to the articles of association of the invested enterprise, the operation of the investment project (enterprise) expires;
(II) due to the poor management of the investment project (enterprise), it is unable to repay the due debts, and it is bankrupt according to law; (III) the project (enterprise) cannot continue to operate due to force majeure;
(IV) other circumstances of investment termination specified in the contract occur or occur.
Article 26 under any of the following circumstances, the company may transfer its foreign investment:
(I) changes in the company’s development strategy or business direction;
(II) there are continuous losses in the investment project, there is no hope of turning losses, and there is no market prospect;
(III) there is an urgent need for supplementary funds due to the lack of self operating funds;
(IV) other reasons deemed necessary by the company.
Article 27 for the transfer of foreign investment, the company shall formulate a reasonable transfer price, and may entrust an institution with corresponding qualifications to evaluate it when necessary according to law or when the Company deems it necessary.
Article 28 the Finance Department of the company shall carefully review the approval documents, meeting minutes, asset recovery list and other relevant materials related to foreign investment, and timely carry out the accounting treatment of foreign investment disposal in accordance with the regulations to ensure the authenticity and legality of asset disposal.
Chapter V Supervision and inspection and accountability
Article 29 the board of directors of the company shall regularly understand the implementation progress and investment benefits of major investment projects. In case of failure to invest as planned, failure to realize the expected income of the project, large investment losses, etc., the board of directors of the company shall find out the reasons, take effective measures in time, and investigate the responsibilities of relevant personnel.
Article 30 the internal audit department of the company shall establish a supervision and inspection system for the internal control of foreign investment and conduct inspection regularly or irregularly. The contents of supervision and inspection on internal control of foreign investment mainly include:
(I) post setting and staffing related to foreign investment business. Focus on whether the post setting is scientific and reasonable, whether there is incompatible post mixing, and whether the staffing is reasonable.
(II) implementation of the authorization and approval system for foreign investment business. Focus on whether the hierarchical authorization is reasonable, whether the authorization and approval procedures for foreign investment are sound, and whether there are violations of regulations such as ultra vires approval.
(III) foreign investment decisions. Focus on checking whether the decision-making process of foreign investment complies with the specified procedures.
(IV) implementation of foreign investment. Focus on checking whether all assets are invested according to the investment plan.
(V) whether the investment income obtained during the investment period is subject to timely accounting treatment, as well as the custody and recording of foreign investment equity certificates and relevant vouchers.
(VI) disposal of foreign investment. Focus on whether the disposal of investment assets has gone through the authorization and approval procedures, whether the recovery of assets is complete and timely, and whether the pricing of assets is reasonable.
(VII) accounting treatment of foreign investment. Focus on checking whether the accounting records are true and complete.
Article 31 the internal audit department of the company shall timely report the supervision and inspection to the board of directors of the company, and the relevant departments shall find out the causes and take measures to correct and improve the existing problems.
Article 32 in the process of foreign investment, the company will investigate and give warnings, fines or other sanctions according to the specific circumstances of any unit or individual who commits the following acts, resulting in the company’s investment decision-making mistakes and the loss of the company’s assets; If a crime is constituted, it shall be transferred to the judicial organ and investigated for criminal responsibility according to law:
(I) failing to perform the approval procedures in accordance with the articles of association and the system, or investing without approval;
(II) causing heavy economic losses to the investment project due to intentional or serious negligence;
(III) maliciously colluding with the foreign party, resulting in investment losses of the company;
(IV) providing false reports and materials, dereliction of duty, divulging the company’s secrets and other violations of laws and disciplines.
If the above acts cause economic losses to the company, the company has the right to investigate the liability for damages.
Article 33 The personnel dispatched by the company shall earnestly perform their duties. If the company’s investment losses are caused by dereliction of duty, the parties will be investigated for responsibility in accordance with the relevant systems and regulations of the company.
Chapter VI supplementary provisions
Article 34 unless the context otherwise requires, “above” in this system includes this number; “Over” does 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 the management of foreign investment, 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
