External guarantee management system (revised in August 2025)
Zhejiang Shouxiangu Pharmaceutical Co., Ltd. External Guarantee Management System
August 2025 (revised)
Directory
Chapter 1 General Provisions................................................................................................1
Chapter 2 Principles of Guarantee Management................................................................1
Chapter 3 Procedures for performance of guarantee......................................................2
Chapter 4 Guarantee Risk Management......................................................................5
Chapter 5 Information Disclosure of Guarantee......................................................................6
Chapter 6 Responsibilities of Responsible Person................................................................................7
Chapter 7 Supplementary Provisions................................................................................................8
I
Chapter 1 General Provisions
Article 1 In order to safeguard the interests of investors, standardize the management of external guarantees of Zhejiang Shouxiangu Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), protect the safety of the company's property, and control financial and operating risks, in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Civil Code of the People's Republic of China, and the This system is specially formulated in accordance with the relevant provisions of the Stock Listing Rules of the Shanghai Stock Exchange (hereinafter referred to as the "Listing Rules"), the Supervision Guidelines for Listed Companies No. 8 - Supervisory Requirements for Capital Transactions and External Guarantees of Listed Companies, and the Articles of Association of Zhejiang Shouxiangu Pharmaceutical Co., Ltd. (hereinafter referred to as the "Articles of Association").
Article 2 This system applies to the company and all subsidiaries within the scope of the company's consolidated financial statements. External guarantees provided by subsidiaries are regarded as corporate actions, and their external guarantees shall comply with this system.
Article 3 All directors and senior managers of the company shall prudently treat and strictly control the debt risks arising from external guarantees.
Article 4 When the company's subsidiaries provide external guarantees, the company's dispatched directors and supervisors shall carefully supervise, manage and implement the guarantees in accordance with the provisions of this management system.
Article 5 Interpretation:
The term "guarantee" in this system refers to the guarantee, mortgage or pledge provided by the company as a third party to others. Specific types include loan guarantees, bank guarantees for letters of credit and bank acceptance bills, guarantees for issuing letters of guarantee, etc.
The term "single item" as used in this system refers to the amount of a single guaranteed asset or the cumulative amount of guarantees for a certain company.
Subsidiaries as mentioned in this system refer to companies in which the company holds more than 50% of the shares, or can determine the composition of more than half of its board of directors, or can actually control through agreements or other arrangements, including wholly-owned subsidiaries and holding subsidiaries.
Chapter 2 Principles of Guarantee Management
Article 5 The company's external guarantees shall follow the principles of safety, equality, voluntariness, fairness, integrity and mutual benefit. The company has the right to refuse any act forcing it to provide guarantee for others.
Article 6 A company's external guarantee must require the other party to provide a counter-guarantee, and the provider of the counter-guarantee must have the actual ability to bear it.
If the company provides a guarantee for its subsidiary, it does not need to require the subsidiary to provide a counter-guarantee.
Article 7 The company's external guarantees are managed uniformly by the company. Without the approval of the company's board of directors or shareholders' meeting, the company and its subsidiaries are not allowed to provide guarantees to external parties, nor are they allowed to provide guarantees to each other.
Article 8 The company's external guarantee must be reviewed and approved by the company's board of directors or shareholders' meeting before it can be implemented.
Article 9 The company's management must truthfully provide all external guarantee matters to the audit agency hired by the company.
Article 10 The company must strictly comply with the relevant provisions of the "Shanghai Stock Exchange Stock Listing Rules" and conscientiously perform its information disclosure obligations on external guarantee matters.
Article 11 The secretary of the board of directors shall record in detail the discussion and voting status of the board of directors’ meeting and the shareholders’ meeting regarding guarantee matters, and shall perform information disclosure obligations in a timely manner. If any illegal or negligent external guarantee causes economic losses to the company, the relevant responsible person shall bear the liability for compensation.
Chapter 3 Procedures for Performance of Guarantee
Article 12 Any "guarantee provision" transaction that occurs in a company shall, in addition to being reviewed and approved by more than half of all directors, also be reviewed and approved by more than two-thirds of the directors present at the board meeting, and disclosed in a timely manner.
Article 13 If a guarantee matter falls under any of the following circumstances, it shall also be submitted to the shareholders' meeting for review after being reviewed and approved by the board of directors:
(1) Any guarantee provided after the total external guarantees of the company and its subsidiaries exceed 50% of the company’s latest audited net assets;
(2) Any guarantee provided after the company’s total external guarantee exceeds 30% of the latest audited total assets;
(3) The amount of guarantee provided by the company to others within one year exceeds 30% of the company’s latest audited total assets;
(4) Guarantees provided for guarantee objects whose asset-liability ratio exceeds 70%;
(5) A single guarantee amount exceeding 10% of the company’s latest audited net assets;
(6) Guarantees provided to shareholders, actual controllers and their related parties;
(7) Other guarantee situations stipulated by the Shanghai Stock Exchange or the Articles of Association.
When the company's shareholders' meeting considers the guarantee in Item (3) of the preceding paragraph, it shall be approved by more than two-thirds of the voting rights held by shareholders present at the meeting.
When the company's shareholders' meeting considers the guarantee in item (6) of the preceding paragraph, the shareholder or the shareholder controlled by the actual controller shall not participate in the voting. The voting shall be passed by more than half of the voting rights held by other shareholders attending the shareholders' meeting.
Article 14 When the shareholders' meeting or the board of directors makes a resolution on a guarantee matter, shareholders (including agents) or directors who have an interest in the guarantee matter shall abstain from voting.
Article 15 If the company provides guarantees to its subsidiaries, and if there are a large number of guarantees each year and it is necessary to enter into guarantee agreements frequently and it is difficult to submit each agreement to the board of directors or the shareholders' meeting for review, the company can separately estimate the total amount of new guarantees in the next 12 months for the two types of subsidiaries with an asset-liability ratio of more than 70% and for the two types of subsidiaries with an asset-liability ratio below 70%, and submit it to the shareholders' meeting for review.
When the aforementioned guarantee matters actually occur, the company shall disclose it in a timely manner, and the guarantee balance at any point in time shall not exceed the guarantee limit approved by the shareholders' meeting.
Article 16 If a company estimates the guarantee amount to a joint venture or associated enterprise and meets the following conditions, it may adjust the guarantee amount between joint ventures or associated enterprises:
(1) The amount of a single transfer by the transferee shall not exceed 10% of the company’s latest audited net assets;
(2) Guarantee objects whose asset-liability ratio exceeds 70% when the adjustment occurs can only obtain guarantee lines from guarantee objects whose asset-liability ratio exceeds 70% (when the shareholder meeting reviews the guarantee limit);
(3) When the transfer occurs, the transferred party has no overdue and unpaid liabilities.
When the adjustment matter mentioned in the preceding paragraph actually occurs, the company shall disclose it in a timely manner.
Article 17 Before deciding on a guarantee, the company shall verify the credit status of the guaranteed object and conduct a full analysis of the benefits and risks of the guarantee, including but not limited to:
(1) It is an enterprise legal person established in accordance with the law and effectively existing, and there is no situation that requires termination;
(2) It has good operating and financial status, and has stable cash flow or good development prospects;
(3) If a guarantee has been provided, there should be no situation where the creditor requires the company to assume joint and several guarantee liability;
(4) Have assets that can be mortgaged (pledged) and have corresponding counter-guarantee capabilities;
(5) The financial information provided is true, complete and valid;
(6) There are no other legal risks.
Article 18 The guarantee applicant shall provide the company with the following information:
(1) Basic company information (including company name, registered address, legal representative, affiliated relationships, other relationships, etc.) and business analysis report;
(2) The latest audit report and financial statements for the current period;
(3) The main contract related to the loan and the materials related to the main contract;
(4) The purpose of bank borrowings guaranteed by this item and the expected economic effects;
(5) Analysis of the repayment ability of bank loans guaranteed by this item;
(6) A statement that there is no major litigation, arbitration or administrative penalty;
(7) Counter-guarantee plan and proof that the counter-guarantee provider has the actual ability to bear the responsibility; if the counter-guarantor provides mortgage or pledge counter-guarantee with properties such as real estate, land use rights, motor vehicles, trademarks, patents, etc., it should provide the ownership certificate of the relevant property;
(8) Other relevant information that the company deems necessary to provide.
Article 19 The departments and personnel specifically handling guarantee matters (hereinafter referred to as "responsible persons") shall conduct investigations based on the above information provided by the guaranteed object to determine whether the information is true.
Article 20 The responsible person has the obligation to ensure the authenticity of the main contract, prevent the parties to the main contract from colluding maliciously or using other fraudulent means to defraud the company's guarantee, and bear the liability risk for the authenticity.
Article 21 The department responsible for handling guarantee matters shall investigate the solvency, operating conditions and creditworthiness of the guaranteed object through its bank account, business dealing units and other aspects. When necessary, authorize the company to send directors to have the company's audit department or hire an intermediary agency to audit it.
Article 22 The company’s investment management department may communicate appropriately with the directors and managers assigned to the guaranteed objects to ensure the authenticity of relevant information.
Article 23 The company shall organize relevant departments to review the guarantee matters before submitting them to the general manager, board of directors and shareholders meeting for approval step by step according to their corresponding approval authority.
Article 24 Approvers at all levels should decide whether to grant a guarantee or provide opinions to the higher-level approval agency on whether to grant a guarantee after analyzing the financial status, industry prospects, operating conditions and credit reputation of the guarantee applicant based on the relevant information provided by the responsible person.
Article 25 Without the approval or authorization of the company's approver with corresponding approval authority, the responsible person shall not sign a guarantee contract beyond his authority, nor may he sign or seal the main contract as a guarantor.
Article 26 A written guarantee contract must be entered into for company guarantees. The guarantee contract must comply with relevant legal regulations, have clear contract matters, and be reviewed by the company's competent department. The guarantee contract should specify the following terms:
(1) Creditors and debtors;
(2) The type and amount of the guaranteed principal claim;
(3) The time limit for the debtor to perform its debts;
(4) The scope, method and period of the guarantee;
(5) Other matters deemed necessary by both parties.
Article 27 When a guarantee contract is concluded, the person responsible must carefully review the relevant contents of the guarantee contract. For mandatory clauses or clauses that are obviously detrimental to the company's interests and clauses that may involve unforeseen risks, the other party should be required to modify or refuse to provide guarantees.
Article 28 During the guarantee period, when the scope, responsibilities and duration of the guarantee in the guarantee contract need to be modified due to changes in the terms of the main contract between the guaranteed party and the beneficiary, the relevant responsible person shall apply for approval according to the approval authority for re-signing the guarantee contract, and the company's legal department shall review the changes. If a guarantee contract is re-established after approval by the competent department, the original contract shall be invalid.
Article 29 The guarantee contract shall be properly kept in accordance with the company's internal management regulations. When the guarantee contract is signed, modified, extended, terminated, etc., the board of directors, the company's finance department and other relevant management departments shall be promptly notified.
Article 30 If the law stipulates that guarantee registration must be carried out, the responsible person must go to the relevant registration authority to complete the guarantee registration.
Chapter 4 Guarantee Risk Management
Article 31 The company shall pay attention to the guaranteed party's production and operation, changes in assets and liabilities, external guarantees and other liabilities, as well as mergers, divisions, changes in legal representatives, changes in external commercial reputation, etc., and actively prevent risks.
Article 32 The company shall require the guaranteed party to regularly report to the company's financial department on the acquisition, use, and amount of the loan to be repaid, as well as the actual repayment of the loan.
Article 33 The company's financial department should assign a dedicated person to monitor the performance of relevant obligations by the guaranteed party in a timely manner, and pay attention to the limitation period of the guarantee. The designated person should make detailed statistics on all guarantees of the company and update them in a timely manner. The company's financial department should regularly report to the company's general manager on the implementation of the company's guarantee.
Article 34 After the debt guaranteed by the company matures, the person responsible shall actively urge the guaranteed party to perform its debt repayment obligations within a limited time, and promptly notify the audit committee of the board of directors and the secretary of the board of directors of the progress of the guaranteed party's repayment in writing to facilitate timely disclosure and avoid the occurrence of violations.
Article 35 When the guaranteed party actually returns the guaranteed debt funds, it must submit relevant payment vouchers to the company's finance department to confirm the release of the guarantee liability.
Article 36 When the guaranteed party shows signs of being unable to repay the loan in a timely manner, the company shall organize relevant departments to analyze its operating conditions, propose corresponding treatment measures for possible risks, and report them to the board of directors.
Article 37 The counter-guarantee provided by the guaranteed person to the company must correspond to the amount of the guarantee provided by the company. If the property for which the guaranteed person sets up a counter-guarantee is property that is prohibited from circulation or transferable by laws and regulations, the company shall refuse to provide guarantee.
Article 38 During the process of capital operations such as acquisitions and external investments, the company shall carefully review the external guarantees of the proposed acquirer or investor, as an important basis for the relevant decision-making departments to make acquisition and investment decisions.
Article 39 The company no longer assumes guarantee liability for changes in the main contract between the creditor and the debtor without the company's written consent. If the guarantee contract stipulates otherwise, the stipulation shall prevail.
Article 40 During the guarantee period, if the guaranteed party agrees to transfer the debt with the creditor without the written consent of the company, the company will no longer bear the guarantee liability.
Article 41 During the guarantee period, if the creditor transfers the principal claim to a third party in accordance with the law, the company will only continue to bear the guarantee liability within the scope of the original guarantee, unless otherwise agreed in the guarantee contract.
Article 42 If there are two or more guarantors in a guarantee contract and they agree with the creditor to bear the guarantee liability according to their shares, the company shall refuse to assume any guarantee liability beyond their shares.
Article 43 For a continuous creditor's rights guarantee without an agreed guarantee period, if the relevant responsible person discovers that there is a greater risk in continuing the guarantee, he shall promptly notify the creditor in writing to terminate the guarantee contract when the risk or risk hazard is discovered.
Article 44 After the company performs its guarantee obligations to creditors, it shall take effective measures to recover compensation from the debtor and disclose the recovery situation in a timely manner.
Article 45: After the People's Court accepts the debtor's bankruptcy case, if the creditor fails to declare its creditor's rights, the relevant responsible person shall request the company to participate in the distribution of the bankruptcy property and exercise the right of recourse in advance.
Chapter 5 Information Disclosure of Guarantee
Article 46 The company shall conscientiously perform its information disclosure obligations on guarantees in accordance with relevant laws, regulations, normative documents, and Shanghai Stock Exchange stock listing rules. The secretary of the board of directors should record in detail the discussions and voting at board meetings and shareholders’ meetings.
Article 47 External guarantees reviewed and approved by the company's board of directors or shareholders' meeting must be disclosed in a timely manner on the Shanghai Stock Exchange and media that meet the conditions stipulated by the China Securities Regulatory Commission. The disclosed content includes the resolutions of the board of directors or shareholders' meeting, the total amount of external guarantees provided by the company and its controlled subsidiaries as of the information disclosure date, the total amount of guarantees provided by the company to its subsidiaries, and the proportion of the above amounts to the company's latest audited net assets.
Article 48 The company's finance department shall truthfully provide all external guarantee matters of the company to the certified public accountant responsible for the company's annual audit in accordance with regulations.
Article 49 For guarantees that meet the disclosure standards, when it is found that the guaranteed party has not fulfilled its repayment obligations within fifteen working days after the debt is due, or the guaranteed party goes bankrupt, liquidated or other circumstances that seriously affect the repayment ability, the company shall promptly understand the guaranteed party's debt repayment situation and promptly disclose the relevant information after becoming aware of it.
Article 50 If a company commits any illegal guarantee behavior, it shall disclose it in a timely manner and take reasonable and effective measures to terminate or correct the illegal guarantee behavior, reduce the company's losses, safeguard the interests of the company and small and medium-sized shareholders, and hold the relevant personnel accountable.
Chapter 6 Responsibilities of Responsible Person
Article 51 The unit, department or person responsible for the company's investigation and approval of guarantee matters, review and conclusion of guarantee contracts, information disclosure and other related responsibilities shall be the person responsible for guarantee matters.
Article 52 All directors of the company shall prudently treat and strictly control the risks arising from external guarantees, and bear joint and several liability for losses caused by illegal or improper external guarantees in accordance with the law.
Article 53 If the company's directors, general managers and other managers sign a guarantee contract without authorization and exceed their authority without following the prescribed procedures, causing damage to the company, the company shall hold the parties responsible.
Article 54 The guaranteed party shall prudently submit a guarantee application, truthfully provide the guarantee application materials required by the company, regularly report changes in guaranteed claims, and perform repayment obligations in a timely manner. At the same time, the directors, managers or shareholder representatives appointed by the company shall also earnestly perform their duties. If the company advances money due to misconduct, the company will use legal procedures to recover compensation from the guaranteed party after fulfilling its guarantee responsibilities, and hold the parties accountable in accordance with the company's relevant system regulations.
Article 55 If the relevant responsible personnel violates the laws and the provisions of this system, ignores the risks and makes guarantees without authorization or neglects to perform their duties and causes losses to the company, he shall bear the liability for compensation and be fined or punished depending on the severity of the case. If the person responsible violates the provisions of the criminal law, the company will transfer it to the judicial authority for investigation of criminal liability in accordance with the law.
Chapter 7 Supplementary Provisions
Article 56 Matters not covered by this system shall be implemented in accordance with the provisions of relevant laws, regulations, normative documents and the "Articles of Association"; if this system conflicts with laws, regulations, normative documents promulgated by the competent authorities in the future or the "Articles of Association" revised through legal procedures, the provisions of the relevant national laws, regulations, departmental rules and the "Articles of Association" shall be implemented.
Article 57 The right to interpret this system belongs to the company’s board of directors.
Article 58 This system shall be approved by the company's shareholders' meeting through voting and shall be implemented from the date of approval. The same applies to modifications.