Yuheng Pharmaceutical: Foreign Investment Management System (August 2025)
Harbin Yuheng Pharmaceutical Co., Ltd.
Harbin Yuheng Pharmaceutical Co., Ltd.
Foreign investment management system
Chapter 1 General Provisions
Article 1 In order to strengthen the external investment management of Harbin Yuheng Pharmaceutical Co., Ltd. (the "Company"), ensure the preservation and appreciation of the company's external investment, and safeguard the company's overall image and the interests of investors, this system is formulated in accordance with the relevant provisions of the Company Law, the Articles of Association and other laws and regulations.
Article 2 The term "overseas investment" as mentioned in this system refers to the investments made by the company and its holding subsidiaries (hereinafter referred to as "subsidiaries").
Article 3 The purpose of establishing this system is to establish an effective control mechanism to promote efficiency and control risks during the operations of the company and its subsidiaries in organizing resources, assets, investments, etc., to ensure the safety and profitability of capital operations, and to improve the company's profitability and risk resistance capabilities.
Article 4 Principles of Foreign Investment
Must comply with national laws and regulations;
Must comply with the company’s mid- and long-term development plans and main business development requirements;
We must adhere to the principle of giving priority to benefits.
Chapter 2 Approval Authority for Foreign Investment
Article 5 The approval procedures for the Company’s external investments shall be strictly carried out in accordance with the authority stipulated in the Company Law and the Articles of Association.
Article 6 A company’s external investment plan is divided into two categories: short-term investment and long-term equity investment:
Short-term investments mainly refer to investments purchased by the company that can be realized at any time and held for no more than one year (including one year), including bond investments, equity investments and other investments.
Long-term equity investment mainly refers to various investments made by the company that cannot be realized or are not prepared to be realized at any time within one year or more than one year, including bond investment, equity investment and other investments.
When companies make short-term and long-term 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 investable should be reviewed and approved layer by layer based on control rights.
After the company invests, the cost method is adopted for long-term equity investments that the investee can control.
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Accounting; long-term equity investments that have joint control (referring to joint ventures) or significant influence on the invested unit are accounted for using the equity method.
Article 7 Investment Permissions
- When the amount of external investment transactions reaches the standards stipulated in the "Shenzhen Stock Exchange Stock Listing Rules" and should be submitted to the shareholders' meeting for review, it can only be implemented after approval by the company's shareholders' meeting.
The board of directors authorizes the general manager to decide on investment projects with a single or cumulative investment amount not exceeding 10% of the company's latest audited net assets in each fiscal year.
- The company’s decision-making authority on sales, purchase of assets, asset mortgage and other matters shall be implemented in accordance with paragraph 1 of this article.
Article 8 No subsidiary shall make its own decision on its external investment.
Chapter 3 Organizational Structure of Foreign Investment Management
Article 9 The company’s shareholders’ meeting and board of directors are the decision-making bodies for the company’s external investments, and each makes decisions on the company’s external investments within the scope of their authority.
Article 10 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 11 The Investment Department is mainly responsible for information collection, sorting and preliminary evaluation of new investment projects, establishing a project database after screening, and putting forward investment suggestions.
Article 12 The general manager of the company is the main person in charge of 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 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 shareholders' meeting to make timely revisions to the investment.
Article 13 The Company’s Investment Department and Finance Department are the daily management departments of external investment and are responsible for conducting benefit assessments of external investment projects, raising funds, and handling investment procedures.
Article 14 The company's board of directors is responsible for conducting regular audits of external investments. The specific operating procedures shall refer to the relevant regulations formulated by the company.
Chapter 4 Decision-making Management of Foreign Investment
Article 15 The Investment Department shall conduct a preliminary assessment of investment projects, put forward investment proposals, and submit them to the Strategy Committee of the Board of Directors for preliminary review.
Article 16 After passing the preliminary review, the Investment Department shall organize relevant personnel of the company to discuss the proposed investment project.
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Establish a working group to conduct a feasibility analysis of the project and prepare a report, submit it to the company's general manager's office meeting for approval, then report it to the board of directors, and perform approval procedures in accordance with relevant authority.
Article 17 The company's financial department shall promptly register the investment according to the category, quantity, unit price, investment date and other items of the external investment, and conduct relevant financial processing.
Article 18 If securities investment is involved, a strict joint control system must be implemented, that is, it must be jointly controlled by at least two or more people, and the trading personnel of the investment object and the fund and financial management personnel must be separated and restrict each other. No one person may control the investment assets alone.
Article 19 The company's external investment shall be subject to budget management. During the implementation of the investment budget, the investment budget may be reasonably adjusted according to the actual situation. The investment budget plan must be approved by the competent authority.
Article 20 The company's long-term investment shall sign an investment contract or agreement with the investee. The long-term investment contract or agreement must be reviewed by the company's investment department and legal affairs department, 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 investor shall be obtained.
Article 21 For investment matters with a single amount exceeding 20% of the company's latest audited net assets, experts or intermediaries may be hired separately to conduct feasibility analysis and demonstration.
Article 22 The company's investment department and finance department shall report the investment progress to the general manager of the company in a timely manner; when there are major changes in investment conditions that may affect investment returns, suggestions for the suspension or adjustment of plans for investment projects shall be made in a timely manner and resubmitted to the board of directors or shareholders' meeting for review according to the approval procedures.
Article 23 The company’s investment department and finance department should designate dedicated personnel to carry out daily management of long-term investments. Their scope of responsibilities include:
Monitor the operation and financial status of the invested unit, and report the situation of the invested unit to the company’s principal person in a timely manner;
Monitor the profit distribution and dividend payment of the invested units and safeguard the company's legitimate rights and interests;
Regularly provide investment analysis reports to the relevant responsible persons and functional departments of the company. The investment analysis reports should include the accounting statements and audit reports of the invested units.
Article 24 Subsidiaries must formulate and improve within the framework of the company’s medium- and long-term development plans.
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Plan by itself and be guided by the company in its external investments. The subsidiary must prepare a proposal, project proposal or feasibility analysis report for its proposed external investment and submit it to the company's investment department, and perform the approval procedures in accordance with Article 7 of Chapter 2 of this system.
Chapter 5 Personnel Management of Foreign Investment
Article 25 When a company invests externally to form a cooperative or joint venture company, it shall dispatch directors elected through legal procedures to the newly-established company to participate in and influence the operational decisions of the newly-established company.
Article 26 For a holding company established with foreign investment, the company shall dispatch directors who have been elected through legal procedures and corresponding management personnel, who shall play an important role in the operation and decision-making of the holding company.
Article 27 The candidates for personnel dispatched for overseas investment shall be decided upon by the general manager of the company and the investment department.
Article 28 The dispatched personnel shall effectively perform their duties in accordance with the provisions of the Company Law and the Articles of Association, safeguard the company's interests in the operation and management activities of the newly-established subsidiary, and achieve the preservation and appreciation of the company's investment.
Article 29 The dispatched personnel shall sign a responsibility letter with the company every year, accept the assessment indicators issued by the company, submit an annual performance report to the company, and accept inspection by the company.
Article 30 The investment department of the company shall organize annual and term evaluations of the dispatched directors. The company will give corresponding rewards or penalties to relevant personnel based on the assessment results.
Chapter 6 Financial Management and Auditing of Foreign Investment
Article 31 The accounting policies, accounting estimates, changes, etc. used in the accounting and financial management of subsidiaries shall comply with the company's financial accounting system and its relevant regulations.
Article 32 A newly-established subsidiary shall submit financial accounting statements to the company's finance department and audit department every month, and shall report accounting statements and provide accounting information in a timely manner in accordance with the company's requirements for preparing consolidated statements.
Article 33 The company may appoint a financial director to a subsidiary, and the financial director shall supervise the authenticity and legality of the financial affairs of the company he serves.
Article 34 The company conducts regular or special audits of its subsidiaries, and the specific operations refer to the company's "Internal Audit System".
Chapter 7 Supplementary Provisions
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Article 35 This system will become effective and implemented after being reviewed and approved by the shareholders' meeting.
Article 36 Matters not covered in this system shall be implemented in accordance with relevant laws, regulations, normative documents and the company's articles of association.
Article 37 The company’s board of directors is responsible for interpreting this system.
Harbin Yuheng Pharmaceutical Co., Ltd. Board of Directors August 2025
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