Chapter 1 General Principles
Article 1
To standardize the behavior of XJ Electric Co., Ltd. (hereinafter referred to as "the Company") in providing guarantees for others, control the operational risks of the Company's assets, and protect the legitimate rights and interests of investors and the safety of the Company's property, this system is formulated based on the "Company Law of the People's Republic of China," "Civil Code of the People's Republic of China," "Securities Law of the People's Republic of China," the China Securities Regulatory Commission's "Regulatory Guidelines No. 8 for Listed Companies - Regulatory Requirements for Fund Transactions and External Guarantees," the "Shenzhen Stock Exchange Listing Rules," and the "Shenzhen Stock Exchange Self-Regulatory Guidelines No. 1 - Standard Operation for Main Board Listed Companies," along with other relevant laws, regulations, normative documents, and the provisions of the "Articles of Association," combined with the actual situation of the Company.
Article 2
The term "external guarantee" in this system refers to guarantees provided by the Company and its controlling subsidiaries for others, including guarantees, mortgages, pledges, and other forms of guarantees. Guarantees provided by the Company for its controlling subsidiaries are considered external guarantees and are subject to the provisions of this system.
Article 3
The Company implements unified management of external guarantees. No individual is authorized to sign contracts, agreements, or other similar documents for external guarantees in the name of the Company without the approval of the Company's board of directors or shareholders' meeting.
Article 4
The provision of external guarantees by the Company shall adhere to the principles of equality, voluntariness, fairness, integrity, and mutual benefit.
Article 5
When the Company provides guarantees for others (excluding wholly-owned subsidiaries), it must take necessary measures such as counter-guarantees to prevent risks, and the provider of the counter-guarantee must have the actual capacity to bear the responsibility. The counter-guarantee or other effective risk prevention measures provided by the guaranteed party must correspond to the amount of the guarantee.
Chapter 2 Objects, Decision Authority, and Review Procedures for External Guarantees
Article 6
The Company may provide guarantees for enterprises with independent legal person status that meet one of the following conditions:
- Controlling subsidiaries or affiliated companies of the Company;
- Mutual guarantee enterprises required for the Company's business;
- Enterprises with significant current or potential business relationships with the Company;
- Shareholders, actual controllers, and their related parties. These enterprises must also have strong debt repayment capabilities and comply with other relevant provisions of this system.
Article 7
Guarantees provided by the Company for others must be approved by the board of directors. If any of the following circumstances apply, the matter must also be submitted to the shareholders' meeting for review after being approved by the board of directors:
- The total amount of external guarantees provided by the Company and its controlling subsidiaries exceeds 50% of the most recent audited net assets;
- The total amount of external guarantees provided by the Company exceeds 30% of the most recent audited total assets;
- The amount of guarantees provided by the Company to others within one year exceeds 30% of the most recent audited total assets;
- Guarantees provided for objects with a debt-to-asset ratio exceeding 70%;
- A single external guarantee amount exceeds 10% of the most recent audited net assets;
- Guarantees provided for shareholders, actual controllers, and their related parties;
- Other guarantee situations as stipulated by the Shenzhen Stock Exchange or the "Articles of Association."