Chapter 1 General Principles
Article 1
To standardize the external financial assistance behavior of Zhejiang Kane Special Materials Co., Ltd. (hereinafter referred to as "the Company"), prevent financial risks, and ensure the Company's stable operation, this system is formulated in accordance with the "Securities Law of the People's Republic of China," "Shenzhen Stock Exchange Stock Listing Rules," "Self-Regulatory Guidelines No. 1 for Listed Companies on the Shenzhen Stock Exchange—Standardized Operations of Main Board Listed Companies," and other relevant laws, regulations, normative documents, and the provisions of the "Articles of Association of Zhejiang Kane Special Materials Co., Ltd." (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The term "external financial assistance" in this system refers to the Company's and its controlling subsidiaries' provision of funds, entrusted loans, etc., either for a fee or free of charge, except for the following situations:
- The Company provides external loans, financing, etc., as its main business.
- The assistance is provided to a controlling subsidiary within the scope of the Company's consolidated financial statements, holding more than 50% of the shares, and the other shareholders of that controlling subsidiary do not include the Company's controlling shareholders, actual controllers, and their related parties.
- Other circumstances recognized by the China Securities Regulatory Commission or the Shenzhen Stock Exchange.
If the Company encounters any of the following situations, it shall execute in accordance with the provisions of this system: - Providing assistance in the form of physical assets, intangible assets, etc., outside the scope of its main business.
- Incurring expenses for others.
- Providing the right to use assets free of charge or charging fees for the right to use assets significantly lower than the industry average.
- Paying advance payments at a significantly higher ratio than the industry average.
- Other behaviors recognized by the Shenzhen Stock Exchange as constituting substantial financial assistance.
Article 3
The Company shall not provide financial assistance to related parties as defined by the "Shenzhen Stock Exchange Stock Listing Rules," except for financial assistance to related shareholding companies (excluding entities controlled by the Company's controlling shareholders, actual controllers, and their related parties), provided that the other shareholders of that shareholding company offer equal financial assistance under the same conditions according to their investment ratios. When the Company provides financial assistance to related shareholding companies as stipulated in the preceding paragraph, it must be approved by more than half of the non-related directors and also by more than two-thirds of the non-related directors present at the board meeting, and submitted for shareholder meeting review. The term related shareholding company refers to a company in which the Company holds shares and is classified as a related legal entity (or other organizati