Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864)
Investment decision management measures
Chapter I General Provisions
Article 1 in order to strengthen the management of the investment activities of Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (hereinafter referred to as the “company”), standardize the investment behavior of the company, improve the efficiency of capital operation and protect the interests of the company and shareholders, in accordance with the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the guidelines for the supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and other relevant laws Regulations and Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) articles of Association (hereinafter referred to as the “articles of association”), and these measures are formulated in combination with the specific conditions of the company.
Article 2 These Measures stipulate the contents, decision-making principles, decision-making authority and management procedures of the company’s investment management.
Article 3 the investment referred to in these Measures refers to various forms of investment activities carried out by the company in order to obtain future income by valuing a certain amount of monetary capital, equity, appraised houses, machines, equipment, materials and other physical objects, as well as intangible assets such as patents, technologies and land use rights. It includes equity investment, debt investment and other investments. Its forms include but are not limited to investment in economic entities, capital increase and share expansion, equity transfer, non operating fixed asset investment, entrusted loans, entrusted financial management, purchase of stocks or bonds, etc.
Article 4 investment management includes the examination, reporting, decision-making and approval procedures of various external investment behaviors of the company; Appointment, removal and assessment of expatriate managers; Supervision of investment projects, business projects and follow-up evaluation of investment effects.
Article 5 these measures are applicable to the establishment, additional investment and all investment behaviors of wholly-owned subsidiaries, holding subsidiaries and joint-stock companies (hereinafter referred to as subsidiaries) of the company, as well as their participation in decision-making, operation or reinvestment. Article 6 investment principles of the company:
(I) comply with national laws, regulations and normative documents;
(II) conform to the national industrial policy and the company’s development strategy;
(III) conducive to the formation of economies of scale and enhance the core competitiveness of enterprises;
(IV) give priority to benefits, pay attention to risk prevention and ensure the safe operation of funds.
Article 7 the company shall focus on strengthening the management and control of its holding subsidiaries, mainly including:
(I) establish a control system for each holding subsidiary, and clarify the selection methods, responsibilities and authorities of directors, supervisors and important senior managers appointed to the holding subsidiary;
(II) according to the strategic planning of the listed company, coordinate the business strategy and risk management strategy of the holding subsidiary, and urge the holding subsidiary to formulate relevant business operation plans, risk management procedures and internal control systems; (III) performance appraisal and incentive and restraint system of designated holding subsidiaries;
(IV) formulate an internal reporting system for major events of holding subsidiaries, timely report major business events, major financial events and other information that may have a great impact on the trading price of shares and their derivatives of listed companies to listed companies, and report major events to the board of directors or the general meeting of shareholders of the company for deliberation in strict accordance with the authorization regulations;
(V) require the holding subsidiary to timely submit important documents such as the resolutions of the board of directors, the general meeting of shareholders or the general meeting of shareholders to the Secretary of the board of directors of the listed company;
(VI) regularly obtain and analyze the quarterly or monthly reports of each holding subsidiary, including operation reports, production and sales statements, balance sheets, income statements, cash flow statements, statements of providing funds to others and external guarantees, and entrust an accounting firm to audit the financial reports of the holding subsidiary in accordance with relevant regulations;
(VII) evaluate the implementation, inspection and supervision of the internal control system of the holding subsidiary.
If the company has multi-level subordinate enterprises, the management and control system for subordinate enterprises at all levels shall be established and improved accordingly.
The company’s internal control system for branches and joint-stock companies that have a significant impact on the operation of listed companies shall be arranged in accordance with the above requirements.
Chapter II Organization and management organization and decision-making authority
Article 8 the general meeting of shareholders of the company is the highest decision-making body for investment. The board of directors and the office meeting of the general manager shall make deliberation and decisions on various investments within the scope of their authority, and no other department or individual has the right to make investment decisions. Article 9 the strategy committee of the board of directors is a special working organization established by the board of directors, which is mainly responsible for studying the company’s long-term development strategy and major investment decisions and making suggestions.
Article 10 the investment behavior of the company shall be in the charge of the investment planning department, in consultation with the finance department, the Secretary office and the audit department.
Article 11 the investment planning department is responsible for the management of the company’s equity investment, property right transaction, company asset reorganization and other documents.
Article 12 the finance department is responsible for the financial management of the company’s investment, including the company’s investment budget into the company’s budget management system, and assisting relevant departments in handling evaluation, audit, capital contribution procedures, tax registration, bank account opening, capital contribution supporting documents, etc.
Article 13 the office is responsible for monitoring the operation of subsidiaries and organizing the annual assessment of dispatched management personnel.
Article 14 the audit department shall be responsible for the internal audit of investment behavior, and audit and supervise the subsidiaries and other economic entities invested and established by the company in accordance with relevant regulations.
Article 15 Where the investment activities of the company meet one of the following standards, they shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors:
(I) the total assets involved in the transaction account for more than 50% of the total audited assets of the listed company in the latest period. If the total assets involved in the transaction have both book value and evaluated value, the higher one shall be taken as the calculation data;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 50% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds RMB 50 million;
(III) the related net profit of the transaction object (such as equity) 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 RMB 5 million; (IV) the transaction amount (including debts and expenses) of the transaction accounts for more than 50% of the company’s latest audited net assets, and the absolute amount exceeds 50 million yuan;
(V) the profit generated from the transaction 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.
If the total amount of assets purchased by the shareholders in the most recent period reaches 12% of the total amount of assets audited and approved by the shareholders’ meeting, or if the total amount of assets held by the shareholders in the most recent period reaches 30% of the total amount of assets audited and approved by the shareholders’ meeting, it shall be calculated according to the total amount of assets purchased and approved by the shareholders’ meeting in the most recent period.
Article 16 Where the investment activities of the company meet one of the following standards and fail to meet the standards specified in Article 14, they shall be submitted to the board of directors for deliberation:
(I) the total assets involved in the transaction account for more than 10% of the company’s total assets audited in the latest period. If the total assets involved in the transaction have both book value and assessed value, the higher one shall be taken as the calculation data;
(II) the relevant operating income of the transaction object (such as equity) in the latest fiscal year accounts for more than 10% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds 10 million yuan;
(III) the related net profit of the transaction object (such as equity) 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 one million yuan;
(IV) the transaction amount (including debts and expenses) of the transaction accounts for more than 10% of the company’s latest audited net assets, and the absolute amount exceeds 10 million yuan;
(V) 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 one million yuan.
If the data involved in the above index calculation is negative, take its absolute value for calculation.
The amount of the subject matter of the transaction shall be calculated based on the higher of the total assets and the transaction amount, and shall be accumulated within 12 consecutive months according to the type of transaction. After accumulated calculation, it shall reach 10% of the company’s total audited assets in the latest period.
Article 17 the general manager shall examine and approve the investment matters that fail to meet the above standards.
Chapter III investment management procedures
Article 18 when establishing a foreign investment project, the company shall prepare a feasibility study report. After demonstration, the following application materials shall be prepared and submitted to the relevant departments of the company:
(I) project investment application report;
(II) investment decision or resolution of the invested enterprise on the investment project (if necessary);
(III) project feasibility study report;
(IV) relevant contracts or draft agreements;
(V) investment fund source statement;
(VI) relevant credit certification documents of the partner (if necessary);
(VII) government permission documents (if necessary);
(VIII) other relevant documents.
Article 19 when a subsidiary intends to invest, it shall first communicate with the relevant management departments of the company. After the investment matters of subsidiaries are approved through their internal procedures, the application materials of investment projects shall be submitted to the company for approval by relevant management departments, and the decision-making and filing procedures shall be performed according to the specified authority. The directors appointed by the company to the subsidiaries shall earnestly perform their duties in accordance with the relevant management regulations of the company.
Article 20 for the reinvestment of a subsidiary that has been invested, established and operated by the company, an investment declaration shall be made according to the company’s development strategy, its positioning and actual operation, and a preliminary project demonstration shall be carried out; For investment projects, relevant departments of the company can also put forward investment suggestions according to the development strategy and planning of the company and the actual situation of the company.
Article 21 for the major investment projects of the company and its subsidiaries, after the application materials are prepared, the general manager’s office meeting of the company shall conduct the preliminary review, issue the project approval opinion, and report to the strategy committee of the board of directors for the record.
Article 22 after the investment project is reviewed by the general manager office meeting of the company, a written opinion shall be issued, and a formal proposal shall be submitted to the strategy committee.
Article 23 the strategy committee shall hold a meeting to discuss according to the proposal of the general manager’s office meeting of the company, submit the discussion results to the board of directors, and feed back to the relevant executive departments and the general manager’s office meeting of the company. When necessary, the strategy committee can hire an intermediary to provide professional advice for its decision-making, and the expenses shall be paid by the company.
Article 24 the board of directors shall make decisions on investment matters within the scope of its authority. If it exceeds the scope of decision-making, it shall be submitted to the general meeting of shareholders for deliberation.
Article 25 the company shall organize relevant departments or units to guide, supervise and control the progress of project implementation, and participate in the audit, final (Interim) liquidation and handover of investment projects.
Article 26 relevant departments of the company shall prepare regular statements according to the progress of investment projects, the implementation and use of investment budgets and existing problems, and report to the competent leaders of the company. During the implementation of investment and construction of the project, the investment budget can be reasonably adjusted according to the changes of the implementation. The adjustment of the investment budget needs to be approved by the original investment examination and approval authority.
Article 27 the company shall conduct post investment evaluation on investment projects, including project performance, project impact, achievement of investment objectives and sustainability evaluation. The company may entrust intermediary institutions to conduct post investment evaluation and form relevant reports.
Article 28 the board of supervisors and relevant departments of the company (including but not limited to the office of the Secretary of directors, the finance department, the audit department, etc.) shall supervise the whole process of the investment project according to their responsibilities, timely put forward corrective opinions on violations, put forward special reports on major problems, and submit them to the project investment approval authority for discussion and handling.
Article 29 Any project involving non operating fixed assets investment shall be implemented in accordance with the relevant provisions of the company and with reference to these measures.
Chapter IV transfer and recovery of investment
Article 30 the company may recover its investment in any of the following circumstances:
(I) according to the articles of association, the operation of the investment project (unit) expires;
(II) due to the poor management of the investment project (unit), it is unable to repay the due debts, and it is bankrupt according to law; (III) the project (unit) cannot continue to operate due to force majeure;
Article 31 the company may transfer its investment under any of the following circumstances:
(I) the investment project has obviously gone against the company’s development strategy;
(II) the investment project has suffered continuous losses and there is no hope of turning losses, and there is no market prospect;
(III) other circumstances that the Company deems necessary to transfer.
Article 32 the transfer of investment shall be handled in strict accordance with the company law and the articles of association. The disposal of foreign investment must comply with the relevant laws and regulations of the state and the relevant provisions of the articles of association.
Article 33 the procedures and authorities for approving the disposal of foreign investment are the same as those for approving the implementation of foreign investment.
Article 34 the company shall organize relevant units or departments to be responsible for the asset evaluation of investment recovery and transfer, so as to prevent the loss of the company’s assets.
Chapter V financial management and audit of investment
Article 35 The Finance Department of the company shall make comprehensive and complete financial records of the company’s 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 accounting standards and accounting systems.
Article 36 the funds of subsidiaries shall be subject to the plans and arrangements of the company. The capital transactions between subsidiaries and other subsidiaries shall comply with the relevant provisions of the company. Subsidiaries shall improve the budget management and authorization management system for the use of funds.
Article 37 the company shall conduct regular or special audits on its subsidiaries. The contents of audit may include: economic benefit audit, engineering project audit, major economic contract audit, system audit, operating expenses and other special audits, economic responsibility audit of the person in charge of the unit during his term of office and economic responsibility audit of leaving office, etc. The audit can also be entrusted to an accounting firm.
After receiving the audit notice, the subsidiary shall be prepared to accept the audit, provide the business and financial data required for the audit, and actively cooperate in the audit process.
Article 38 the accounting methods, accounting policies, accounting estimates and changes adopted in the financial management of subsidiaries shall comply with the company’s financial accounting system and relevant regulations.
Article 39 subsidiaries shall submit financial and accounting statements to the Finance Department of the company every month and
