Management System for External Guarantees
Chapter 1 General Provisions
Article 1 To standardize the external guarantee activities of Luxshare Precision Industry Co., Ltd. (hereinafter referred to as the "Company"), protect the legitimate rights and interests of investors, ensure the financial security of the Company, strengthen the Company's bank credit and guarantee management, and avoid and reduce operational risks, in accordance with the "Company Law of the People's Republic of China," the "Securities Law of the People's Republic of China" (hereinafter referred to as the "Securities Law"), "Supervision Guidelines No. 8 for Listed Companies – Supervision Requirements for Capital Transactions and External Guarantees of Listed Companies," the "Stock Listing Rules of the Shenzhen Stock Exchange," the "Shenzhen Stock Exchange Main Board Listed Company Self-Regulatory Supervision Guidelines No. 1 – Normative Operation of Main Board Listed Companies," and the "Articles of Association of Luxshare Precision Industry Co., Ltd." (hereinafter referred to as the "Articles of Association"), and other relevant laws, regulations, and documents, this System is formulated.
Article 2 For the purposes of this System, a subsidiary refers to a subsidiary over which the Company has actual control.
Article 3 For the purposes of this System, a guarantee refers to a guarantee, mortgage, or pledge provided by the Company as a third party to a creditor for a debtor's financing or commodity circulation. The types include, but are not limited to, loan guarantees, bank acceptance bills, and commercial acceptance bills.
Article 4 This System is a code of conduct for the Company's external guarantee business and applies to the Company's headquarters and its subsidiaries.
Article 5 External guarantees shall be managed uniformly by the Company. Subsidiaries shall not provide guarantees to each other without the Company's approval.
Article 6 Any guarantee provided by the Company must be approved by a resolution of the Board of Directors or Shareholders' Meeting.
Article 7 Guarantees that require approval from the Shareholders' Meeting must be submitted to the Shareholders' Meeting after being reviewed and approved by the Board of Directors. External guarantees requiring approval from the Shareholders' Meeting include the following situations: (1) Any guarantee provided after the total amount of external guarantees provided by the Company exceeds 50% of the Company's net assets audited most recently. (2) Any guarantee provided after the total amount of guarantees provided by the Company and its holding subsidiaries to external parties exceeds 30% of the Company's total assets audited most recently. (3) Guarantees provided to entities with a debt-to-asset ratio exceeding 70%. (4) Any single guarantee amount exceeding 10% of the Company's net assets audited most recently. (5) Guarantee amounts exceeding 30% of the Company's total assets audited most recently within any twelve-month period. (6) Guarantees provided to shareholders, actual controllers, and their related parties. (7) Other external guarantees that should be approved by the Shareholders' Meeting according to laws, administrative regulations, and departmental rules.
Article 8 When the Company provides guarantees for non-wholly-owned subsidiaries, it may, depending on the circumstances, require other investors to provide corresponding counter-guarantees in proportion to their investment to prevent risks.
Chapter 2 Approval and Information Disclosure of Guarantees
Article 9 The Company and its subsidiaries shall implement annual budget management for external guarantee matters. The Finance Department shall compile the annual guarantee plan and submit it to the Board of Directors or Shareholders' Meeting for review and approval within their respective approval authority. If new guarantee limits are required or existing limits need to be adjusted due to business needs, the approval procedures stipulated in this System shall be followed.