Hubei Jichuan Pharmaceutical Co., Ltd. raised funds management system
(Revised 2025)
(Deliberated and approved at the 16th meeting of the 10th board of directors of the company)
Chapter 1 General Provisions
Article 1 In order to regulate the use and management of funds raised by Hubei Jichuan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), improve the efficiency of the use of raised funds, and protect the legitimate rights and interests of investors, the company, in accordance with the "Securities Law of the People's Republic of China", "Supervisory Rules for Funds Raised by Listed Companies", "Supervisory Guidelines for Listed Companies No. 2 - Supervisory Requirements for the Management and Use of Funds Raised by Listed Companies" and "Shanghai Stock Exchange Self-Discipline Supervision Guidelines for Listed Companies No. 1" No.—Standardized Operations", "Articles of Association" and other relevant laws and regulations, and based on the actual situation of the company, the "Hubei Jichuan Pharmaceutical Co., Ltd. Raised Funds Management System" (hereinafter referred to as the "System") is specially formulated.
Article 2 The term “raised funds” as mentioned in this system refers to the funds raised by a company from investors through the issuance of stocks or other securities of an equity nature and used for specific purposes, but does not include funds raised by the company for the implementation of equity incentive plans.
The term “over-raised funds” as used in this system refers to the amount of actual net raised funds that exceeds the amount of planned raised funds.
Article 3 The funds raised shall be earmarked for special use. The company's use of raised funds should comply with national industrial policies and relevant laws and regulations, practice the concept of sustainable development, and fulfill social responsibilities. In principle, it should be used for its main business, which is conducive to enhancing the company's competitiveness and innovation capabilities.
Article 4 The company's board of directors shall continue to pay attention to the storage, management and use of raised funds, effectively prevent investment risks, and improve the efficiency of the use of raised funds.
The company's directors and senior managers shall be diligent and responsible to ensure the safety of funds raised by listed companies, and shall not control listed companies to change the use of raised funds without authorization or in disguised form.
Article 5 The company shall establish and improve the internal control system for the storage, management, use, change of use, supervision and accountability of raised funds, clarify the hierarchical approval authority, decision-making authority, risk control measures and information disclosure requirements for the use of raised funds, and standardize the use of raised funds. The company's board of directors should continue to pay attention to the storage, management and use of raised funds, effectively prevent investment risks, and improve the efficiency of the use of raised funds.
Article 6 The controlling shareholder, actual controller and other related parties of the company shall not directly or indirectly occupy or misappropriate the funds raised by the company, nor may they use the funds raised by the company and investment projects with raised funds (hereinafter referred to as "raised investment projects") to obtain improper benefits.
If the company discovers that the controlling shareholders, actual controllers and other related parties have appropriated the raised funds, it shall promptly request the return and disclose the reasons for the occupation, the impact on the company, the repayment and rectification plan and the progress of rectification.
Article 7 The deposit, use, change, supervision and accountability of the company's raised funds shall be strictly implemented in accordance with this system.
Chapter 2 Storage of Raised Funds
Article 8 After the raised funds are in place, the company shall go through capital verification procedures in a timely manner, and an accounting firm with securities qualifications shall issue a capital verification report.
The funds raised by the company shall be deposited in a special account established with the approval of the board of directors (hereinafter referred to as the "special account for raised funds") for centralized management. The special account for raised funds shall not store non-raised funds or be used for other purposes.
If a company has raised funds twice or more, it shall set up special accounts for raised funds respectively. The excess raised funds should also be deposited in a special raised funds account for management.
Raising funds to invest in overseas projects shall comply with the Shanghai Stock Exchange's regulations on the management of raised funds. Companies and sponsors should take effective measures to ensure the safety and standardization of use of raised funds invested in overseas projects, and disclose relevant specific measures and actual results in the "Special Report on the Deposit, Management and Actual Use of Raised Funds by the Company" (hereinafter referred to as the "Special Report on Raised Funds").
Article 9 The company shall sign a three-party supervision agreement for the special account storage of raised funds with the sponsor institution and the commercial bank where the raised funds are deposited (hereinafter referred to as the "commercial bank") within one month after the raised funds are received, and make a timely announcement. After the relevant agreement is signed, the company can use the raised funds. The agreement should at least include the following:
(1) The company shall centrally deposit the raised funds in a special account for raised funds;
(2) The account number of the special account for raised funds, the items of raised funds involved in the special account, and the deposit amount;
(3) The commercial bank shall provide the company with a bank statement of the special account for raised funds every month, and send a copy to the sponsoring institution;
(4) If the company’s cumulative withdrawals from the special account for raised funds exceed 50 million yuan at one time or within 12 months and reach 20% of the net amount of the total funds raised after deducting issuance expenses (hereinafter referred to as the “net amount of raised funds”), the company shall promptly notify the sponsor;
(5) The sponsor may go to a commercial bank to inquire about the special account information for raised funds at any time;
(6) The supervisory responsibilities of the sponsor, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the sponsor and the commercial bank on the use of funds raised by the company;
(7) Liability for breach of contract by companies, commercial banks, and sponsor institutions;
(8) If the commercial bank fails to promptly issue statements to the sponsor or notify the special account of large withdrawals three times, or fails to cooperate with the sponsor in inquiring and investigating the special account information, the company may terminate the agreement and cancel the special account for raised funds.
The company shall promptly report to the Shanghai Stock Exchange for filing and announcement after signing the above agreement.
If the above-mentioned agreement is terminated early due to changes in the sponsoring institution or commercial bank before the expiration of the validity period, the company shall sign a new agreement with the relevant parties within two weeks from the date of termination of the agreement, and report to the Shanghai Stock Exchange for filing and announcement in a timely manner after the new agreement is signed.
Chapter 3 Use of Raised Funds
Article 10 A company shall comply with the following requirements when using raised funds:
(1) The company shall use the raised funds in accordance with the raised funds use plan promised in the issuance application documents;
(2) When any situation occurs that seriously affects the normal progress of the planned use of raised funds, the company shall promptly report to the Shanghai Stock Exchange and make an announcement;
(3) If the following circumstances occur in a raised investment project, the company shall re-evaluate the feasibility, expected income, etc. of the raised investment project, decide whether to continue to implement the project, and disclose the progress of the project, the reasons for the abnormalities, and the adjusted investment plan of the raised funds (if any) in the latest periodic report:
The market environment involved in the investment project has undergone major changes;
The investment project has been put on hold for more than 1 year;
The completion period of the investment plan of raised funds has exceeded and the investment amount of raised funds has not reached 50% of the relevant plan amount;
Other abnormal situations occur in the investment project.
Article 11 When a company uses raised funds, it must strictly follow the company's financial management system to perform fund use approval procedures. Each expenditure of raised funds must be submitted by the user department to a payment application report, reviewed by the company's financial management center, and reported to the general manager for signature and approval before payment is made.
The company's finance department is responsible for the dispatch and arrangement of raised funds, and should establish relevant accounting records and account books for activities involving the use of raised funds.
Article 12 In principle, the funds raised by a company should be used for its main business. A company shall not engage in the following conduct when using raised funds:
(1) The investment projects are financial investments such as holding trading financial assets and other equity instruments, lending them to others, entrusting financial management, etc., and investing directly or indirectly in companies whose main business is buying and selling securities;
(2) Change the purpose of raised funds in disguised form through pledge, entrusted loan or other means;
(3) Providing the raised funds directly or indirectly to controlling shareholders, actual controllers and other related parties to facilitate related parties’ use of raised investment projects to obtain improper benefits;
(4) Other behaviors that violate regulations on the management of raised funds.
Article 13 If a company invests in a raised investment project with self-raised funds in advance, and if the raised funds are used to replace self-raised funds after the raised funds are in place, it shall be implemented within six months after the raised funds are transferred to the special account. During the implementation of investment projects with raised funds, in principle, payment should be made directly with raised funds. If it is really difficult to pay directly with raised funds in matters such as paying personnel salaries, purchasing overseas products and equipment, etc., replacement can be implemented within six months after payment with self-raised funds.
The replacement matter shall be reviewed and approved by the company's board of directors, and the sponsor shall issue a clear consent opinion. The company shall disclose relevant information in a timely manner.
Article 14 Temporarily idle raised funds may be subject to cash management, and cash management shall be implemented through a special account for raised funds or a publicly disclosed special settlement account for products. If cash management is implemented through a product-specific settlement account, the account shall not store non-raised funds or be used for other purposes. The implementation of cash management shall not affect the normal progress of the investment plan of raised funds.
Cash management products must meet the following conditions:
(1) Highly safe principal-guaranteed products such as structured deposits and certificates of deposit shall not be non-principal-guaranteed;
(2) It has good liquidity and shall not affect the normal progress of the investment plan of raised funds, and the product term shall not exceed twelve months;
Only after the funds raised by the cash management product are recovered on schedule and announced, can the company carry out cash management again within the authorized period and quota.
Cash management products may not be pledged, and the product's special settlement account (if applicable) may not store non-raised funds or be used for other purposes. When opening or canceling a product's special settlement account, the company shall promptly report to the Shanghai Stock Exchange for filing and announcement.
Article 15 The use of temporarily idle raised funds for cash management shall be reviewed and approved by the company's board of directors, and the sponsor shall issue a clear consent opinion. The company shall disclose the following information in a timely manner:
(1) Basic information on the funds raised this time, including the time of raising, amount of funds raised, net amount of funds raised and investment plan, etc.;
(2) Usage of raised funds;
(3) The amount and period of cash management, whether there is any disguised change in the use of raised funds, and measures to ensure that the normal progress of investment projects with raised funds will not be affected;
(4) The income distribution method, investment scope and safety of cash management products;
(5) Opinions issued by the sponsor.
Companies should promptly disclose risk warning announcements to the outside world and explain the risk control measures taken by the company to ensure the safety of funds when the financial status of the product issuer deteriorates, the invested products face losses, or other situations that may harm the interests of the listed company and investors.
Article 16 If a company temporarily uses idle raised funds to supplement working capital, it shall do so through a special account for raised funds and shall meet the following requirements:
(1) The purpose of the raised funds shall not be changed in any disguised manner, nor shall it affect the normal progress of the investment plan of the raised funds;
(2) It is limited to production and operation use related to the main business;
(3) The time for a single temporary replenishment of working capital shall not exceed 12 months;
(4) The expired raised funds used to temporarily replenish working capital have been returned (if applicable). If a company uses idle raised funds to temporarily supplement working capital, it shall be reviewed and approved by the company's board of directors, and the sponsor shall issue a clear consent opinion. Companies should disclose relevant information in a timely manner.
Before the expiration date of supplementary working capital, the company should return this part of the funds to the special account for raised funds and make a timely announcement on the return of raised funds.
Article 17 After the completion of a single fundraising project, if the company uses the remaining raised funds (including interest income) from the project for other fundraising projects, it must be reviewed and approved by the board of directors, and it can only be used after the sponsor has issued an explicit consent opinion. The company shall make a timely announcement after deliberation by the board of directors.
If the remaining raised funds (including interest income) are less than 1 million or less than 5% of the committed investment amount of the raised funds for the project, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the annual report.
If the company's surplus raised funds (including interest income) from a single raised investment project are used for non-raised investment projects (including supplementing working capital), it shall perform corresponding procedures and disclosure obligations by referring to changing the use of raised funds.
Article 18 After all fundraising projects are completed, the use of surplus raised funds (including interest income) by a listed company shall be reviewed and approved by the board of directors, and the sponsor shall issue clear opinions. The company shall make a timely announcement after deliberation by the board of directors. If the remaining raised funds (including interest income) account for more than 10% of the net raised funds, they must also be reviewed and approved by the shareholders' meeting.
If the remaining raised funds (including interest income) are less than 5 million or less than 5% of the net raised funds, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the latest periodic report.
Article 19 The company shall, based on the development plan and actual production and operation needs, properly arrange the use plan for the portion of the actual net raised funds that exceeds the planned amount of raised funds. The excess raised funds should be used for projects under construction and new projects, repurchasing the company's shares and canceling them in accordance with the law. Listed companies shall clarify the specific use plan of the excess raised funds at the latest when all the raised investment projects of the same batch are completed, and put them into use according to the plan. The use of over-raised funds shall be resolved by the board of directors in accordance with the law. The sponsor shall issue clear opinions and submit them to the shareholders' meeting for review. The company shall timely and fully disclose the necessity and rationality of the use of over-raised funds and other relevant information. If a company uses super-raised funds to invest in projects under construction or new projects, it should also fully disclose the construction plan, investment cycle, rate of return and other information of the relevant projects.
If it is indeed necessary to use temporarily idle over-raised funds for cash management or temporary supplement of working capital, the necessity and rationality should be explained. If a company uses temporarily idle over-raised funds for cash management or temporary supplement of working capital, the amount, time limit and other matters shall be reviewed and approved by the board of directors, the sponsor shall issue a clear opinion, and the company shall disclose relevant information in a timely manner.
Chapter 4 Changes in Investment Direction of Raised Funds
Article 20 If a company has any of the following circumstances, it is a change of purpose of raised funds, and the board of directors shall make a resolution in accordance with the law, and the sponsor shall issue a clear opinion and submit it to the shareholders' meeting for review. The listed company shall disclose relevant information in a timely manner:
(1) Cancel or terminate the original investment project with raised funds, implement new projects or permanently replenish working capital;
(2) Change the entity implementing the investment project with raised funds;
(3) Change the implementation method of investment projects with raised funds;
(4) Other circumstances determined by the China Securities Regulatory Commission and the Shanghai Stock Exchange as changes in the use of raised funds. If a listed company has the circumstances specified in Item (1), the sponsor shall explain in detail the main reasons for changes in the investment projects with raised funds and the rationality of the previous recommendation opinions based on the documents related to the raised funds disclosed in the previous period.
If the company uses the raised funds in accordance with the provisions of Article 14, Article 16 and Article 19 Paragraph 2 of this system and exceeds the amount, time limit and other matters determined by the board of directors' review process, if the situation is serious, it will be deemed to have changed the purpose of the raised funds without authorization.
If the implementation entity of the investment project with raised funds changes between a listed company and a wholly-owned subsidiary, or if it only involves a change in the implementation location of the raised investment project, it will not be regarded as a change in the purpose of the raised funds, and the board of directors will make a resolution without completing the shareholders' meeting review procedures. The sponsor should express clear opinions on this, and the listed company should disclose relevant information in a timely manner.
Article 21 The changed investment projects should be invested in the main business. Companies should scientifically and prudently conduct feasibility analysis of newly raised investment projects, ensure that the investment projects have good market prospects and profitability, effectively prevent investment risks, and improve the efficiency of the use of raised funds.
Article 22 If a company plans to change its investment projects, it shall report to the Shanghai Stock Exchange in a timely manner after submitting it to the board of directors for review and announce the following:
(1) The basic situation of the original investment project and the specific reasons for the change;
(2) Basic information, feasibility analysis and risk warnings of newly raised investment projects;
(3) Investment plans for newly raised investment projects;
(4) An explanation that the newly raised investment project has been obtained or is yet to be approved by relevant departments (if applicable);
(5) Opinions of the sponsor on changes to the investment project;
(6) An explanation that changes in the investment projects need to be submitted to the shareholders’ meeting for review;
(7) Other contents required by the Exchange.
If newly raised investment projects involve related transactions, asset purchases, or external investments, they must also be disclosed with reference to relevant rules.
Article 23 If a company changes its investment project to acquire the assets (including equity) of the controlling shareholder or actual controller, it shall ensure that it can effectively avoid horizontal competition and reduce related transactions after the acquisition.
Article 24 If the company intends to transfer or replace the investment projects to external parties (except for those projects that have all been transferred or replaced during the company's major asset reorganization), it shall promptly announce the following content after submitting it to the board of directors for review:
(1) The specific reasons for the external transfer or replacement of the investment project;
(2) The amount of raised funds used to invest in the project;
(3) The degree of completion and realized benefits of the project;
(4) The basic situation, feasibility analysis and risk warning of the swap-in project (if applicable);
(5) Pricing basis for transfer or replacement and related income;
(6) Sponsor’s opinions on the transfer or replacement of investment projects;
(7) An explanation that the transfer or replacement of the investment project still needs to be submitted to the shareholders’ meeting for review;
(8) Other contents required by the Exchange.
The company should pay full attention to the collection and use of the transfer price, the changes in ownership of the assets exchanged, and the continued operation of the assets exchanged, and perform necessary information disclosure obligations.
Chapter 5 Management and Supervision of the Use of Raised Funds
Article 25 The company shall truly, accurately and completely disclose the actual use of raised funds.
Article 26 The company's financial department shall set up a ledger for the use of raised funds and record in detail the expenditure of raised funds and the investment in raised funds projects.
The company's internal audit department should inspect the storage and use of raised funds at least once every six months, and report the inspection results to the audit committee in a timely manner.
If the company's audit committee believes that there are irregularities or major risks in the company's management of raised funds or the internal audit department fails to submit an inspection result report as specified in the preceding paragraph, it shall report to the board of directors in a timely manner.
Article 27 The company's board of directors shall continue to pay attention to the actual management and use of raised funds and excess raised funds (if any), comprehensively check the progress of raised investment projects every half year, and prepare, review and disclose a "Special Report on Raised Funds". Relevant special reports shall include the basic situation of raised funds and excess raised funds, as well as the storage, management and use of funds stipulated in this system. If there is a discrepancy between the actual investment progress of a raised investment project and the investment plan, the company shall explain the specific reasons in the "Special Report on Raised Funds".
During the annual audit, the company should hire an accounting firm to issue an assurance report on the storage, management and use of raised funds, and disclose it together with the annual report.
Article 28 Sponsors shall, in accordance with the provisions of the "Measures for the Administration of the Sponsorship Business of Securities Issuance and Listing", conduct continuous supervision over the storage, management and use of funds raised by the company. If any abnormality is discovered during the continuous supervision, on-site inspections shall be carried out in a timely manner. The sponsor institution shall conduct on-site inspections of the storage, management and use of funds raised by the company at least once every six months. If the sponsor discovers any abnormality during continuous supervision and on-site inspection, it shall urge the company to make timely rectifications and report to the stock exchange and relevant regulatory authorities in a timely manner.
After the end of each fiscal year, the sponsor shall issue a special verification report on the storage, management and use of the annual raised funds of the listed company, and disclose it when the company discloses its annual report. The verification report should include the following contents:
(1) The storage, management and use of raised funds and the balance of the special account;
(2) The progress of the raised funds project, including the difference from the progress of the raised funds investment plan;
(3) The use of raised funds to replace self-raised funds that have been invested in investment projects with raised funds in advance (if applicable);
(4) The situation and effect of using idle raised funds to supplement working capital (if applicable);
(5) Cash management of idle raised funds (if applicable);
(6) Usage of excess raised funds (if applicable);
(7) Changes in the investment direction of raised funds (if applicable);
(8) Usage of surplus raised funds (if applicable);
(9) Conclusive opinions on whether the deposit, management and use of the company’s raised funds are in compliance with regulations;
(10) Other contents required by the Exchange.
Article 29 After the end of each fiscal year, the company's board of directors shall disclose the concluding opinions of the sponsor's special verification report and the accounting firm's assurance report in the "Special Report on Raised Funds".
Chapter 6 Accountability
Article 30 Directors and senior managers of a company shall be diligent and responsible, urge the company to standardize the use of raised funds, consciously maintain the safety of the company's funds, and shall not participate in, assist or condone the company's unauthorized or disguised change of the use of raised funds. If the company changes the use of raised funds without authorization or in a disguised form, misappropriates raised funds for investment in stocks and their derivatives or convertible bonds, or fails to report the use of raised funds in a timely manner in accordance with the provisions of this system, resulting in the company failing to perform its information disclosure obligations in a timely manner, the relevant personnel will be held accountable.
Chapter 7 Supplementary Provisions
Article 31 The company shall perform relevant information disclosure obligations for the management of raised funds in accordance with the Shanghai Stock Exchange Stock Listing Rules, the Articles of Association and the relevant provisions of the company's information disclosure system.
Article 32 If the fundraising project is implemented through the company's subsidiaries or other enterprises controlled by the company, this system shall apply.
Article 33 In this system, "above" includes the original number, and "less than" does not include the original number.
Article 34 Matters not covered by this system shall be governed by the relevant national laws, administrative regulations, normative documents and the Articles of Association. If matters not covered by this system conflict with the provisions of laws, regulations, administrative rules and the company's articles of association promulgated from time to time after the effective date of this system, the provisions of the laws, regulations, administrative rules and the company's articles of association shall prevail.
Article 35 This system shall be formulated, modified and interpreted by the board of directors, and shall take effect upon review and approval by the shareholders' meeting.
Board of Directors of Hubei Jichuan Pharmaceutical Co., Ltd.
August 22, 2025