Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864)
Management system of raised funds
Chapter I General Provisions
Article 1 in order to standardize the management of the raised funds of Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (hereinafter referred to as the “company”) and improve the efficiency of the use of the raised funds, 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 initial public offering and listing, the stock listing rules of Shenzhen Stock Exchange This system is formulated in accordance with the guidelines for the supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies, Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) articles of Association (hereinafter referred to as the “articles of association”) and other relevant laws and regulations, and in combination with the actual situation of the company.
Article 2 the term “raised funds” as mentioned in this management system refers to the funds raised from investors and used for specific purposes by the company through public issuance of securities (including initial public offering of shares, allotment of shares, additional issuance, issuance of convertible corporate bonds, issuance of convertible corporate bonds with separate transactions, issuance of warrants, etc.) and non-public issuance of shares. After the funds raised from the issuance of stocks, convertible bonds or other securities are in place, the company shall timely go through the capital verification procedures, and the capital verification report shall be issued by an accounting firm with securities practice qualification.
Article 3 the board of directors of the company shall fully demonstrate the feasibility of the investment project with raised funds, make 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 board of directors of the company shall be responsible for establishing and improving the management measures for the use of the company’s raised funds, ensuring the effective implementation of the management measures, organizing the specific implementation of the projects for the use of the raised funds, and making the use of the raised funds open, transparent and standardized.
If the raised capital investment project (hereinafter referred to as “raised capital investment project”) is implemented through a subsidiary of the company or other enterprises controlled by the company, the company shall ensure that the subsidiary or other enterprises controlled by the company comply with its raised capital management system.
Article 5 the directors, supervisors and senior managers of the company shall be diligent and responsible, urge the listed company to standardize the use of the raised funds, consciously maintain the safety of the raised funds of the listed company, and shall not participate in, assist or connive at the listed company to change the purpose of the raised funds without authorization or in a disguised form.
Article 6 the funds raised by the company shall be used for the purposes listed in the prospectus or other public offering documents. Where a company changes the use of funds listed in the prospectus or other documents for public offering and raising, a resolution must be made by the general meeting of shareholders.
Article 7 in principle, the funds raised by the company shall be used for its main business. Except for financial enterprises, the investment projects of raised funds 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 be invested directly or indirectly in companies whose main business is the trading of securities. Article 8 if the company suffers losses as a result of using the raised funds in violation of national laws, regulations and the articles of association or changing the purpose of the raised funds without performing the legal approval procedures, the relevant responsible persons shall bear civil liability, including but not limited to civil liability.
Chapter II deposit of raised funds in special account
Article 9 the company shall deposit the raised funds in a special account approved by the board of directors for centralized management and use, and sign a tripartite supervision agreement with the sponsor and the commercial bank storing the raised funds within one month after the raised funds are in place. The special account for raised funds shall not deposit non raised funds or be used for other purposes.
If the company has raised funds for more than two times, it shall set up a special account for raised funds independently.
If the net amount of funds actually raised exceeds the amount of funds planned to be raised (hereinafter referred to as “over raised funds”) shall also be deposited in the special account for the management of raised funds.
Article 10 the company shall sign a three-party supervision agreement (hereinafter referred to as the “agreement”) with the recommendation institution and the commercial bank storing the raised funds (hereinafter referred to as the “commercial bank”) within one month after the arrival of the raised funds. 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 50 million yuan or 20% of the net raised funds from the special account at one time or within 12 months, the company and the commercial bank shall timely notify the sponsor or independent financial adviser;
(IV) the commercial bank shall issue the bank statement to the company every month and send a copy to the sponsor or independent financial adviser;
(V) the sponsor or independent financial consultant can inquire about the special account information at the commercial bank at any time;
(VI) the supervision responsibilities of the sponsor or independent financial adviser, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the sponsor or independent financial adviser 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, sponsors or independent financial advisers;
(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.
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.
The company shall timely announce the main contents of the agreement after all the agreements are signed.
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.
If the company considers that the amount of funds raised is large and it is necessary to open a special account in more than one bank in combination with the credit arrangement of the investment project, it may open a special account in more than one bank with the approval of the board of directors. However, the principle of efficient use and effective control shall be adhered to. The number of special accounts for raised funds shall not exceed the number of investment projects with raised funds. The funds of the same investment project must be stored in the same special account.
Chapter III use of raised funds
Article 11 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 the raised investment projects 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 trading of securities.
The company shall not change the purpose of the raised funds in a disguised form through pledge, entrusted loan or other means. Article 13 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 other related parties, and take effective measures to prevent the related parties from using the raised investment projects to obtain improper interests.
Article 14 the plan for the use of raised funds shall be prepared and approved in accordance with the following procedures:
(I) the use plan of raised funds shall be prepared according to the year and project;
(II) the specific executive department shall prepare the annual use plan of raised funds;
(III) review and approval of the general manager;
(IV) the chairman’s review and approval;
(V) general manager.
Article 15 the use of raised funds shall be applied for and approved in accordance with the following procedures:
(I) the specific user department fills in the application form;
(II) opinions signed by the person in charge of finance;
(III) approval by the general manager;
(IV) implemented by the financial department.
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 raised investment project, the company shall re demonstrate the feasibility and expected income of the project and decide whether to continue to implement the project:
(I) significant changes have taken place in the market environment involved in the raised investment project;
(II) the raised investment project 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 raised investment project.
The company shall disclose the progress of the project, the reasons for abnormalities and the adjusted investment plan of raised funds (if any) in the latest periodic report.
Article 18 If the company decides to terminate the original raised investment project, it shall select a new investment project as soon as possible and scientifically.
Article 19 Where the company replaces the self raised funds that have been invested in the raised investment projects in advance with the raised funds, it can only be implemented after the deliberation and approval of the board of directors of the company, the assurance 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 20 the raised funds temporarily idle may be temporarily used to supplement working capital. The temporary replenishment of working capital is 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. The idle fund-raising committee and the recommendation institution shall give clear consent and disclose. A single replenishment of working capital shall not exceed 12 months.
Article 21 the company may temporarily use the idle raised funds to supplement the working capital, which is limited to the production and operation related to the main business. It 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.
The idle raised funds shall meet the following conditions when temporarily replenishing working capital:
(I) the purpose of the raised funds shall not be changed in a disguised form;
(II) it shall not affect the normal progress of the investment plan of the raised funds;
(III) the time for a single replenishment of working capital shall not exceed 12 months;
(IV) the previously raised funds for temporary replenishment of working capital have been returned (if applicable);
(V) it has not made venture capital investment 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 above matters shall be deliberated and approved by the board of directors of the company, and the recommendation institution, independent directors and the board of supervisors shall issue opinions with explicit consent, and announce the following contents within two trading days after the deliberation and approval of the board of directors:
(I) basic information of the funds raised this time, including the time of raising, the amount of funds raised, the net amount of funds raised and the investment plan;
(II) use of raised funds;
(III) the amount and term of idle raised funds to supplement working capital;
(IV) the amount of idle raised funds to supplement working capital, the expected savings in financial expenses, the reasons for the shortage of working capital, whether there is any behavior of changing the purpose of raised funds in a disguised form, and the measures to ensure that the normal progress of the raised funds project will not be affected;
(V) the situation of the company’s venture capital investment within 12 months before the temporary replenishment of working capital with idle raised funds this time, and the relevant commitments not to make venture capital investment or provide financial assistance to objects other than holding subsidiaries during the replenishment of working capital;
(VI) opinions issued by independent directors, board of supervisors and recommendation institutions;
(VII) other contents required by the 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.
Article 22 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.
Article 23 the company shall use the over raised funds for projects under construction and new projects 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.
Article 24 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 according to relevant regulations or the company’s system, they shall also be submitted to the general meeting of shareholders for deliberation, and fulfill the obligation of information disclosure.
Article 25 Where the 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, and the independent directors and recommendation institutions shall express their explicit consent and disclosure, and shall meet the following requirements:
(I) the company has not made venture capital investment in the last 12 months and has not provided financial assistance to objects other than holding subsidiaries;
(II) the company shall promise not to make venture capital investment and provide financial assistance to objects other than holding subsidiaries within 12 months after repaying bank loans or replenishing working capital;
(III) the company shall repay the bank loans or supplement the working capital according to the actual needs, and the cumulative amount within each 12 months shall not exceed 30% of the total amount of over raised funds.
Article 26 the temporarily idle raised funds can be managed in cash. The term of investment products shall not exceed 12 months. The invested products must meet the following conditions:
(I) high security, meeting the capital preservation requirements, and the product issuer can provide capital preservation commitments;
(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 relevant regulations or the company’s system, 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 published by independent directors, the board of supervisors and the recommendation institution
