Chapter 1 General Principles
Article 1
To standardize the external guarantee behavior of Zhejiang Bofei Electric Co., Ltd. (hereinafter referred to as "the Company"), effectively control the risks associated with external guarantees, and protect the financial security and legitimate rights of investors, this system is formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Civil Code of the People's Republic of China, the Shenzhen Stock Exchange Listing Rules, the Regulatory Guidelines for Listed Companies No. 8—Regulatory Requirements for Fund Transactions and External Guarantees, the Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 1—Standard Operations for Main Board Listed Companies, and the Articles of Association of Zhejiang Bofei Electric Co., Ltd. (hereinafter referred to as "the Articles of Association"), as well as relevant national laws, regulations, and normative documents.
Article 2
The term "external guarantee" as used in this system refers to guarantees provided by the Company for others, including guarantees for its controlling subsidiaries. The total amount of external guarantees by the Company and its controlling subsidiaries refers to the sum of the external guarantees provided by the Company to its controlling subsidiaries and the total external guarantees of the controlling subsidiaries. If external guarantees also constitute related party transactions, the relevant provisions of the Company's related party transaction management system shall apply. If the Company's consolidated financial statement scope changes due to transactions or related party transactions, and the Company provides guarantees to related parties after the transaction is completed, it shall perform the corresponding review procedures and disclosure obligations for the relevant related guarantees. If the board of directors or shareholders' meeting does not approve the aforementioned related guarantees, the parties involved in the transaction shall take effective measures such as terminating the guarantee in advance or canceling the relevant transaction or related party transaction to avoid forming non-compliant related guarantees.
Article 3
The Company shall provide external guarantees in accordance with the principles of legality, prudence, mutual benefit, and safety, and strictly control guarantee risks. Major shareholders and other related parties shall not force the Company to provide guarantees for others. All directors and senior management personnel of the Company shall treat the risks arising from external guarantees prudently and strictly control them.
Article 4
Without the approval of the board of directors or shareholders' meeting, the Company and its subsidiaries shall not provide external guarantees or mutually guarantee each other. The Company’s external guarantees shall be managed uniformly, and no one shall have the right to sign contracts, agreements, or other similar legal documents for external guarantees in the name of the Company without the review and approval of the Company's board of directors or shareholders' meeting. The external guarantees of the Company's controlling subsidiaries shall be treated as the Company's actions and shall be executed in accordance with the relevant provisions of this system.
Chapter 2 Conditions for the Company to Provide External Guarantees
Article 5
The Company may provide guarantees for units with independent legal person status that meet one of the following conditions: (1) Mutual guarantee units required for the Company's business; (2) Units with significant business relationships with the Company; (3) Units with potential significant business relationships with the Company; (4) Controlling subsidiaries of the Company and other units with controlling relationships. The above units must also have strong debt repayment capabilities and comply with the relevant provisions of this system.