Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd
Management system for the use of raised funds
Chapter I General Provisions
Article 1 in order to regulate the management and application of the raised funds of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as “the company” or “the company”), ensure the safety of the raised funds, improve the use efficiency of the raised funds and 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 and the measures for the administration of the registration of initial public offering of shares on the gem (for Trial Implementation) Measures for the administration of securities issuance and registration of companies listed on the gem (for Trial Implementation), guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of funds raised by listed companies, Shenzhen Stock Exchange gem stock listing rules This system is formulated in combination with the actual situation of the company, in accordance with the relevant provisions such as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM, the articles of association of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (hereinafter referred to as the “articles of association”).
Article 2 the term “raised funds” as mentioned in this system refers to the funds raised from investors and used for specific purposes by the company through the issuance of shares and their derivatives, but does not include the funds raised by listed companies through the implementation of equity incentive plans.
Article 3 the board of directors of the company shall fully demonstrate the feasibility of the investment project with raised funds (hereinafter referred to as “raised investment project”), be sure that the investment project has good market prospect and profitability, effectively prevent investment risks and improve the use efficiency of raised funds.
Article 4 the directors and supervisors of the company shall supervise and urge the company’s fund-raising and management personnel to use the raised funds diligently or in a disguised manner, and shall not consciously assist or connive at the use of the funds raised by the company without authorization.
Article 5 the company must use the raised funds in accordance with the investment direction of the raised funds disclosed in the information and the resolutions and approval procedures of the general meeting of shareholders and the board of directors, and disclose the use and effect of the raised funds as required.
Article 6 if the raised investment project is implemented through the company’s subsidiaries or other enterprises controlled by the company, the company’s subsidiaries or other enterprises controlled by the company are also bound by this system.
Chapter II deposit of raised funds in special account
Article 7 the company shall carefully select commercial banks and open a special account for raised funds (hereinafter referred to as the “special account for raised funds”), and the raised funds shall be deposited in the special account for raised funds approved by the board of directors for centralized management. The special account for raised funds shall not deposit non raised funds or be used for other purposes. If the company has more than two times of financing, it shall set up special accounts for raised funds respectively.
Article 8 the company shall, within one month after the receipt of the raised funds, sign a tripartite supervision agreement (hereinafter referred to as the “agreement”) with the recommendation institution or independent financial adviser and the commercial bank storing the raised funds (hereinafter referred to as the “commercial bank”). The 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 account number of the special account for raised funds, the raised investment projects involved in the special account and the deposit amount;
（3） If the company withdraws more than 50 million yuan or 20% of the net raised funds from the special account in one time or within 12 months, the company and the commercial bank shall timely notify the recommendation institution or independent financial adviser;
（4） 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 or independent financial adviser;
（5） A recommendation institution or an independent financial consultant may inquire about the information of the special account for raised funds at a commercial bank at any time;
（6） The supervision responsibilities of the recommendation institution or independent financial adviser, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the recommendation institution or independent financial adviser and commercial bank on the use of the raised funds of the company;
（7） Rights, obligations and liabilities for breach of contract of the company, commercial banks, recommendation institutions or independent financial advisers;
（8） If the commercial bank fails to issue the bank statement or notify the special account of large amount withdrawal to the recommendation institution or the independent financial adviser in time for three times, and fails to cooperate with the recommendation institution or the independent financial adviser to inquire and investigate the information of the special account, 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 above agreement is terminated in advance before the expiration of the 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 timely announce the main contents of the agreement.
Where a company implements a raised investment project through a holding subsidiary, a tripartite supervision agreement shall be signed jointly by the company, the holding subsidiary implementing the raised investment project, commercial banks, recommendation institutions or independent financial advisers. The company and its holding subsidiary shall be regarded as a common party.
Chapter III use of raised funds
Article 9 the company shall use the raised funds prudently to ensure that the use of the raised funds is consistent with the commitments in the prospectus or the prospectus, and shall not change the investment direction of the raised funds at will or change the purpose of the raised funds in a disguised form. The company shall truthfully, accurately and completely disclose the actual use of the raised funds. 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 10 the investment direction of the company’s raised funds must be approved by the general meeting of shareholders. Before deciding to convene the general meeting of shareholders, the company must adopt effective corporate governance procedures to formulate investment projects and use plans of the raised funds.
The board of directors shall fully listen to the opinions of intermediaries on investment projects, fund raising and use plans on the basis of due diligence.
Article 11 in principle, the funds raised by the company shall be used for its main business. The company shall not commit any of the following acts when using the raised funds:
（1） Raised investment projects are financial investments such as holding trading financial assets and financial assets available for sale, lending to others, entrusted financial management, or high-risk investments such as securities investment and derivatives investment, which are directly or indirectly invested in companies whose main business is the purchase and sale of securities;
（2） Changing the purpose of the raised funds in a disguised form through pledge, entrusted loan or other means;
（3） Provide the raised funds directly or indirectly to the controlling shareholders, actual controllers and other related persons for use, so as to facilitate the related persons to obtain illegitimate interests by using the raised investment project;
（4） Other acts in violation of the provisions on the administration of raised funds.
Article 12 the general manager of the company shall be responsible for organizing the implementation of raised investment projects. The investment project shall be implemented according to the planned progress promised in the company’s prospectus or prospectus. The specific implementation department shall refine the work progress to ensure that all work can be completed according to the planned progress, and regularly report the specific work progress to the company’s finance department and the Secretary of the board of directors.
Article 13 when using the raised funds, the company shall perform the application and approval procedures in strict accordance with the procedures.
For each expenditure of a raised investment project, the specific implementation department shall submit an application for the use of the raised funds according to the use plan of the raised funds, submit it to the Finance Department of the company for review, and then submit it to the chief financial officer and the general manager for approval.
Article 14 the Finance Department of the company is responsible for the scheduling and arrangement of funds, and shall establish relevant accounting records and account books for activities involving the use of raised funds.
Article 15 the Finance Department of the company shall check the implementation progress of the project every quarter.
Article 16 the raised funds shall not be used to carry out entrusted financial management (except cash management), entrusted loans and other financial investments, as well as high-risk investments such as securities investment and derivatives investment, and shall not be directly or indirectly invested in companies whose main business is the purchase and sale of securities.
The company shall not use the raised funds for pledge or other investments that change the purpose of the raised funds in a disguised form.
Article 17 the company shall ensure the authenticity and fairness of the use of the raised funds, prevent the raised funds from being occupied or misappropriated by the controlling shareholders, actual controllers and their affiliates, and take effective measures to prevent the related parties from using the raised funds to invest in projects to obtain illegitimate interests.
Article 18 the company shall comprehensively check the progress of raised investment projects after the end of each fiscal year.
Article 19 in case of any of the following circumstances in a raised investment project, the company shall re demonstrate the feasibility and expected income of the raised investment project and decide whether to continue to implement the project:
（1） Major changes have taken place in the market environment involved in the raised investment project;
（2） The raised investment project has been shelved for more than one year;
（3） Exceeding the completion period of the latest investment plan of raised funds and the investment amount of raised funds does not reach 50% of the relevant plan amount;
（4） Other abnormal situations of investment and raising projects.
The company shall disclose the progress of the project and the reasons for abnormalities in the latest periodic report. If it is necessary to adjust the investment plan of raised funds, the adjusted investment plan of raised funds shall be disclosed at the same time.
Article 20 Where the company replaces the self raised funds that have been invested in the investment projects with the raised funds in advance, it shall be deliberated and approved by the board of directors, and the independent directors, the board of supervisors, the recommendation institution or the independent financial consultant shall express their explicit consent. In addition, the accounting firm shall issue a verification report. The company may replace the self raised funds with the raised funds within 6 months after the receipt of the raised funds.
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 21 the company may conduct cash management on the temporarily idle raised funds. The term of its investment products shall not exceed 12 months, and meet the requirements of high safety and good liquidity, which shall not affect the normal progress of the investment plan of the raised funds. The following conditions are met:
（1） Structured deposits, certificates of deposit and other principal guaranteed products with high security;
（2） Good liquidity shall not affect the normal operation 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 timely report to Shenzhen stock exchange for filing and announcement.
Article 22 Where a company uses idle raised funds for cash management, it shall be deliberated and approved by the board of directors of the company, and the independent directors, the board of supervisors, the recommendation institution or the independent financial adviser shall give explicit consent. The company shall announce the following contents within two trading days after the meeting of the board of directors:
（1） The basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
（2） Use of raised funds, idle conditions and reasons, 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;
（3） The issuer, type, investment scope, term, amount, income distribution mode, expected annualized rate of return (if any), and the specific analysis and explanation of the board of directors on the safety and liquidity of investment products;
（4） Opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers.
When the company finds that the financial situation of the issuer of investment products is deteriorating and the invested products are facing losses and other major risks, it shall timely disclose the risk prompt announcement and explain the risk control measures taken by the company to ensure the safety of funds.
Article 23 the company’s temporary use of idle raised funds to supplement working capital is limited to the production and operation related to its main business, and shall meet the following conditions:
（1） It is not allowed to change the purpose of the raised funds or the normal operation of the raised investment projects in a disguised form;
（2） The funds raised for temporary replenishment of working capital have been returned;
（3） The time for a single replenishment of working capital shall not exceed 12 months;
（4） Idle raised funds shall not be used directly or indirectly for high-risk investments such as securities investment and derivatives trading..
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, the recommendation institution or the independent financial adviser shall give explicit consent. The company shall promptly announce the following contents after the deliberation and approval of the board of directors:
（1） The basic information of the funds raised this time, including the arrival time of the funds raised, the amount of funds raised, the net amount of funds raised and the investment plan;
（2） Use of raised funds, idle conditions and reasons;
（3） The reasons for the shortage of working capital, the amount and period of idle raised funds to supplement working capital;
（4） The amount expected to save financial expenses when idle raised funds supplement working funds, whether there is any behavior of changing the investment direction of raised funds in a disguised form, and measures to ensure that the normal progress of raised investment projects will not be affected;
（5） Opinions issued by independent directors, board of supervisors, recommendation institutions or independent financial advisers;
（6） Other contents required by Shenzhen Stock Exchange.
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. If the company is expected to be unable to return this part of the funds to the special account for raised funds on schedule, it shall perform the review procedures in accordance with the requirements of the preceding paragraph before the due date and make a timely announcement. The contents of the announcement shall include the whereabouts of the funds, the reasons why they cannot be returned, the reasons and time limit for continuing to supplement working capital, etc.
Article 24 the company shall properly arrange the use plan of the over raised funds according to the development plan and the actual production and operation needs, and timely disclose it after submitting it to the board of directors for deliberation and approval. The independent directors and the recommendation institution shall scientifically and prudently analyze the feasibility of the project with respect to the use plan of the part of the net amount of funds actually raised exceeding the amount of funds planned to be raised (hereinafter referred to as “over raised funds”), and timely disclose it after being submitted to the board of directors for deliberation and approval. The contents disclosed in the use plan shall include: (1) the basic information of the raised funds, including the time of arrival of the raised funds, the amount of the raised funds, the amount of the net amount of the actually raised funds exceeding the planned raised funds, the name and amount of the projects invested, the cumulative planned amount and the actual amount used;
（2） Introduction to the projects planned to be invested, including the basic information of each project, whether related party transactions are involved, feasibility analysis, economic benefit analysis, investment schedule, description that the project has been obtained or has yet to be approved by relevant departments and risk tips (if applicable);
（3） Independent opinions of independent directors, sponsors or independent financial advisers on the rationality, compliance and necessity of the use plan of over raised funds.
If the amount of over raised funds planned to be used for a single time reaches 50 million yuan and more than 10% of the total amount of over raised funds, it shall also be submitted to the general meeting of shareholders for deliberation and approval.
Article 25 Where the company plans to use the over raised funds to repay bank loans or permanently supplement working capital, it shall be deliberated and approved by the board of directors and the general meeting of shareholders. The independent directors, the recommendation institution or the independent financial adviser shall express their explicit consent and disclosure, and shall meet the following requirements:
（1） The amount used for permanent replenishment of working capital and repayment of bank loans shall not exceed
