Shapuaisi foreign investment management system
Zhejiang Shapuaisi Pharmaceutical Co., Ltd.
Foreign investment management system
Chapter 1 General Provisions
Article 1 In order to strengthen Zhejiang Shapuaisi Pharmaceutical Co., Ltd. (hereinafter referred to as "the Company") (or "Company")) to manage external investments, standardize the Company's external investment behavior, improve the efficiency of capital operations, and ensure the value preservation and appreciation of the Company's external investments. This system is formulated in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the "Stock Listing Rules of the Shanghai Stock Exchange", other relevant national laws and regulations and the "Articles of Association of Zhejiang Shapuaisi Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association"), and in conjunction with the specific circumstances of the Company.
Article 2 The term "overseas investment" as mentioned in this system refers to the company's external investment activities. That is, the company uses monetary funds and real objects such as houses, machines, equipment, and materials after asset appraisal, as well as intangible assets such as patent rights, trademark rights, and land use rights to invest in various forms of investment activities.
Article 3 The purpose of establishing this system is to establish an effective management mechanism to promote efficiency and control risks in the company's operations of organizing resources, assets, investments, etc., to ensure the profitability and safety of capital operations, and to improve the company's profitability and risk resistance.
Article 4 Principles of foreign investment:
(1) Comply with the relevant provisions of national laws, regulations and the Articles of Association;
(2) Safeguard the interests of the company and all shareholders and strive to maximize benefits;
(3) In line with the company’s development strategy, in line with national industrial policies, and giving full play to and strengthen the company’s competitive advantages;
(4) Adopt a prudent attitude, be moderate in scale, act within our capabilities, conduct relevant risk management during the implementation process, and take into account the balance between risks and returns;
(5) Standardize, institutionalize and scientifically implement, and consult external experts when necessary.
Chapter 2 Approval Authority for Foreign Investment
Article 5 The company shall strictly implement the approval procedures for external investment in accordance with the authority specified in the Articles of Association.
The company’s foreign investment types:
An enterprise independently established by the company or an independently funded business project;
The company invests in establishing joint ventures, cooperative companies or development projects with other domestic or overseas independent legal persons;
Acquisitions and mergers carried out by purchasing the equity of target companies;
Entrusted financial management
Other foreign investments stipulated by laws and regulations.
When companies make overseas investments, they must strictly implement relevant regulations and conduct practical and serious demonstration studies on the necessity, feasibility, and rate of return of the investment. Those that are believed to be eligible for investment shall be reviewed and approved layer by layer based on authority in accordance with the investment management regulations issued by the company.
Article 6 The company’s decision-making authority for external investment:
(1) Shareholders' meeting: If a company's transactions (excluding donated cash assets) meet one of the following standards, they must be reviewed and approved by the shareholders' meeting:
The total assets involved in the transaction account for more than 50% of the company's latest audited total assets. If the total assets involved in the transaction have both book value and appraisal value, the higher one will be used as the calculation data;
The operating income related to the transaction object (such as equity) in the most recent fiscal year accounts for more than 50% of the company's audited operating income in the most recent fiscal year, and the absolute amount exceeds RMB 50 million;
The net profit related to the transaction target (such as equity) in the most recent fiscal year accounts for more than 50% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 5 million;
The transaction amount (including liabilities and expenses) accounts for more than 50% of the company's latest audited net assets, and the absolute amount exceeds RMB 50 million;
The profit generated from the transaction accounts for more than 50% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 5 million;
The net assets involved in the transaction target (such as equity) (if there are both book value and appraisal value, whichever is higher) account for more than 50% of the company's latest audited net assets, and the absolute amount exceeds RMB 50 million.
If the data involved in the calculation of the above indicators is negative, its absolute value will be used for calculation.
(2) Board of Directors: If a company's transactions (other than donated cash assets) meet one of the following standards, they shall be submitted to the board of directors for review:
The total assets involved in the transaction account for more than 10% of the company's latest audited total assets. If the total assets involved in the transaction have both book value and appraisal value, the higher one will be used as the calculation data;
The operating income related to the transaction object (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited operating income in the most recent fiscal year, and the absolute amount exceeds RMB 10 million;
The net profit related to the transaction object (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 1 million;
The transaction amount (including liabilities and expenses) accounts for more than 10% of the company's latest audited net assets, and the absolute amount exceeds RMB 10 million;
The profit generated from the transaction accounts for more than 10% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 1 million;
The net assets involved in the transaction target (such as equity) (if there are both book value and appraisal value, whichever is higher) account for more than 10% of the company's latest audited net assets, and the absolute amount exceeds RMB 10 million.
If the data involved in the calculation of the above indicators is negative, its absolute value will be used for calculation.
Transactions below the above-mentioned amount in the company shall be decided by the chairman of the company.
(3) The chairman of the board of directors is the legal representative of the company and can sign relevant legal documents on behalf of the company within the authority specified by laws, regulations and the company's articles of association; he can also authorize the general manager or others to sign contracts and other documents on his behalf in accordance with the law.
Chapter 3 Organizational Structure of Foreign Investment Management
Article 7 The company's shareholders' meeting and board of directors are the decision-making bodies for the company's external investment. They each make decisions on the company's external investment within the scope of their authority.
Article 8 The Strategy Committee of the Board of Directors is the leading organization responsible for planning, coordinating and organizing the analysis and research of external investment projects, and providing suggestions for decision-making.
Article 9 The new project development group organized by the Strategy Committee of the Board of Directors is mainly responsible for information collection, sorting and preliminary evaluation of new investment projects, establishing a project library after screening, and putting forward investment suggestions.
Article 10 The general manager of the company is the main person responsible for the implementation of external investment. He is responsible for planning, organizing, and monitoring the personnel, finance, and materials for the implementation of new projects. He should also report the investment progress to the board of directors in a timely manner and put forward adjustment suggestions, etc., so as to facilitate the board of directors and the shareholders' meeting to revise the investment plan in a timely manner. The general manager may designate a special department or organization to establish a project implementation team to be responsible for the task execution and specific implementation of foreign investment projects. The company can establish an accountability mechanism for the project implementation team to follow up and assess the work of the project implementation team.
Article 11 The Company’s Finance Department is the financial management department for external investment and is responsible for evaluating the investment benefits of external investment projects, raising funds, and handling capital contribution procedures.
Article 12 The Audit Committee of the company's board of directors is responsible for auditing the ex-ante benefits of the project and conducting regular audits of external investments.
Article 13 The general manager’s office of the company is responsible for the legal review of agreements, contracts, important relevant letters, articles of association, etc. for external investment projects.
Chapter 4 Decision-making and management of foreign investment
Article 14 Foreign investment procedures:
(1) The new project development team conducts a preliminary assessment of the investment project, puts forward investment recommendations, and submits them to the Strategy Committee of the Board of Directors for preliminary review;
(2) After passing the preliminary review, the new project development team shall organize relevant personnel of the company to form a working group for the timely investment project proposed by it, conduct a feasibility analysis of the project and prepare a report to be submitted to the strategy committee of the board of directors.
(3) The feasibility study report and relevant cooperation agreements shall be reviewed and approved by the Strategy Committee of the Board of Directors and submitted to the Board of Directors for review;
(4) The board of directors performs approval procedures in accordance with relevant authority. If the authority exceeds the authority of the board of directors, it shall be submitted to the shareholders' meeting for review;
(5) For foreign investment projects that have been approved for implementation, the relevant departments of the company authorized by the competent authority shall be responsible for the specific implementation;
(6) The company’s operating management is responsible for supervising the operation and management of the project.
Article 15 After the foreign investment agreement is signed, the company will cooperate with relevant parties to handle capital contribution, industrial and commercial registration, tax registration, bank account opening, etc.
Article 16 To implement an external investment project, relevant authorization and approval documents must be obtained, and the approved external investment plan and other relevant materials must be attached.
Article 17 An investment contract or agreement must be signed with the investee for an external investment project. The long-term investment contract or agreement must be reviewed by the company's legal advisor and approved by the authorized decision-making body before it can be formally signed. The company should authorize specific departments and personnel to invest cash, physical objects or intangible assets in accordance with the provisions of long-term investment contracts or agreements. Physical investment must go through physical handover procedures and be approved by the physical object use and management department. Before signing an investment contract or agreement, no investment funds shall be paid or investment assets transferred; after the investment is completed, an investment certificate or other valid certificate issued by the investee shall be obtained.
Article 18 The company's operating management shall report investment progress to the board of directors in a timely manner. When there are major changes in investment conditions that may affect investment returns, suggestions for suspending or adjusting plans for investment projects should be made in a timely manner and resubmitted to the board of directors or shareholders' meeting for review in accordance with the approval procedures.
Article 19 For major investment projects, experts or intermediaries may be hired separately to conduct feasibility analysis and demonstration.
Article 20 Relevant departments should designate dedicated personnel to carry out daily management of long-term investments. Their scope of responsibilities includes:
(1) Monitor the operation and financial status of the invested unit, and report the situation of the invested unit to the company’s supervisor in a timely manner;
(2) Supervise the profit distribution and dividend payment of the invested units and safeguard the legitimate rights and interests of the company;
(3) Provide regular investment analysis reports to relevant leaders and functional departments of the company. If it has control over the invested unit, the investment analysis report shall include the invested unit's accounting statements and audit report.
Article 21 Transfer and recovery of long-term external investments
(1) The company may withdraw its external investment when one of the following circumstances occurs or occurs;
According to the articles of association, contract or agreement of the invested company, the operation period of the investment project (enterprise) expires;
Due to poor management of the investment project (enterprise), it is unable to repay its due debts and is subject to bankruptcy in accordance with the law;
The project (enterprise) is unable to continue operating due to force majeure;
When other circumstances that stipulate the termination of investment appear or occur in the contract of the invested company.
(2) When one of the following circumstances occurs or occurs, the company may transfer its external long-term investment:
The investment project is obviously contrary to the company’s business direction;
The investment project has suffered continuous losses and there is no hope of turning the losses around and there is no market prospect;
When it is urgent to supplement funds due to insufficient operating funds;
Other situations the company deems necessary.
Investment transfers should be handled strictly in accordance with the provisions of the Company Law and the Articles of Association of the invested company regarding the transfer of investments.
(3) For external long-term investment transfers, the company's finance department, together with relevant departments, shall submit a written analysis report on the investment transfer and submit it to the company's board of directors or shareholders' meeting for approval. Before disposing of foreign investment, the foreign investment project to be disposed of must be analyzed and demonstrated, and the reasons for the disposal and the direct and indirect economic and other consequences must be fully explained, and then submitted to the institution or person with the authority to approve the disposal of foreign investment for approval. The authority to approve the disposal of foreign investment is the same as the authority to approve the implementation of foreign investment. The disposal of foreign investment must comply with the relevant provisions of relevant national laws and regulations.
(4) When retrieving and transferring long-term external investments, relevant responsible personnel must perform their duties conscientiously and do a good job in asset evaluation during investment recoup and transfer to prevent the loss of the company's assets.
Article 22 The company's board of directors should assign a dedicated person to track the progress and safety status of the entrusted financial management funds, and require him or her to report in a timely manner when any abnormal situation occurs, so that the board of directors can immediately take effective measures to recover the funds and avoid or reduce the company's losses.
Article 23 The company's board of directors should regularly understand the implementation progress and investment benefits of major investment projects. If there is failure to invest as planned, failure to realize project expected returns, investment losses, etc., the company's board of directors should identify the reasons and hold the relevant personnel accountable.
Chapter 5 Personnel Management of Foreign Investment
Article 24 When a company invests externally to establish a cooperative or joint venture company, it shall send directors elected through legal procedures to the newly-established company to participate in and influence the operational decisions of the newly-established company.
Article 25 For a holding company established with external investment, the company shall dispatch directors and chairman of the board elected through legal procedures, and dispatch corresponding operating and management personnel (including the financial person in charge), who shall play a decisive role in the operation and decision-making of the holding company.
Article 26 Candidates for personnel dispatched for foreign investment shall be studied and decided at the general manager office meeting of the company.
Article 27 The dispatched personnel shall earnestly perform their duties in accordance with the provisions of the Company Law and the articles of association of the invested company, safeguard the company's interests in the operation and management activities of the newly-established company, and achieve the preservation and appreciation of the company's investment.
Article 28 Relevant personnel appointed by the company to serve as directors of investment units should obtain more information about the investment units by participating in board meetings and other forms, and report the status of the investment units to the company in a timely manner. The dispatched personnel should sign a responsibility letter with the company every year, accept the assessment indicators issued by the company, submit an annual work report to the company, and accept the company's inspection.
Chapter 6 Financial Management and Auditing of Foreign Investments
Article 29 The financial department should keep complete accounting records of the company's external investment activities, conduct detailed accounting, set up detailed account books for each investment project, and record relevant information in detail. The accounting methods for external investment should comply with the provisions of accounting standards and accounting systems.
Article 30 The financial management of external investments is the responsibility of the Company’s Finance Department. The Finance Department shall obtain the financial reports of the invested units based on the needs of analysis and management in order to analyze the financial status and investment returns of the invested units, safeguard the rights and interests of the Company, and ensure that the interests of the Company are not harmed.
Article 31 After the Company invests externally, it shall conduct accounting calculations in accordance with the requirements of the accounting system. When necessary, the company shall make provision for impairment in accordance with the provisions of the accounting system.
Article 32 The accounting policies and changes in accounting estimates used in the accounting and financial management of the company's controlled subsidiaries shall comply with the company's financial accounting system and relevant regulations.
Article 33 The company's controlled subsidiaries shall submit financial accounting statements to the company's finance department every month, and timely submit accounting statements and provide accounting information in accordance with the company's requirements for preparing consolidated statements and external disclosure of accounting information.
Article 35 The company may appoint a financial manager to its holding subsidiary, and the financial manager shall supervise the authenticity and legality of the financial status of the company he serves.
Article 36 The company conducts regular or special audits of its holding subsidiaries.
Chapter 7 Major Event Reporting and Information Disclosure
Article 37 The company's external investments shall strictly comply with the Company Law, the Shanghai Stock Exchange Stock Listing Rules and the relevant provisions of the China Securities Regulatory Commission and other laws and regulations, as well as the relevant provisions of the Articles of Association and the Information Disclosure Management System of Zhejiang Shapuaisi Pharmaceutical Co., Ltd., and perform information disclosure obligations. The company's holding subsidiaries should implement the company's relevant regulations and fulfill the basic obligations of information disclosure.
Article 38 The company’s holding subsidiaries shall report the following major matters to the company’s board of directors in a timely manner:
(1) Acquisition and sale of assets;
(2) Major litigation and arbitration matters;
(3) The conclusion, change and termination of important contracts (loan, entrusted operation, entrusted operation, entrusted financial management, donation, contracting, leasing, etc.);
(4) Large-amount bank checks returned;
(5) Major operating or non-operating losses;
(6) Suffering heavy losses;
(7) Major administrative penalties;
(8) Other matters stipulated in the "Shanghai Stock Exchange Stock Listing Rules".
Article 39 The company's holding subsidiaries shall clearly identify the person and department responsible for information disclosure, and file the corresponding communication contact information with the company's Board Secretary Office.
Chapter 8 Supplementary Provisions
Article 40 Matters not covered in this system shall be implemented in accordance with relevant national laws, regulations and the company's articles of association.
Article 41 This system is interpreted and revised by the company's board of directors.
Article 42 This system shall be implemented from the date of approval by the company’s shareholders’ meeting.