Chapter 1 General Principles
Article 1
To standardize the securities investment behavior of Ru Yi Film and Entertainment Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific decision-making and risk control mechanism, ensure the safety of funds and compliance operations, and protect the legal rights and interests of the Company and all shareholders, this system is formulated based on the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Shenzhen Stock Exchange Listing Rules" (hereinafter referred to as "Listing Rules"), "Self-Regulatory Guidelines No. 1 for Listed Companies on the Main Board of the Shenzhen Stock Exchange," "Self-Regulatory Guidelines No. 7 for Listed Companies on the Shenzhen Stock Exchange regarding Transactions and Related Transactions," and other relevant laws, regulations, normative documents, and the "Articles of Association of Ru Yi Film and Entertainment Co., Ltd." (hereinafter referred to as "the Articles of Association"), in conjunction with the actual situation of the Company.
Article 2
The term "securities investment" in this system includes the Company's participation in new share allocations or subscriptions, securities repurchases, investments in stocks and depository receipts, bond investments, and other investment behaviors recognized by the Shenzhen Stock Exchange. The following situations are not applicable to this system: (1) Securities investment behaviors that are the main business of the Company or its controlling subsidiaries; (2) Fixed-income or guaranteed principal investment behaviors; (3) Participation in the allotment of shares of other listed companies or exercising preemptive subscription rights; (4) Purchasing shares of other listed companies exceeding 10% of the total share capital and intending to hold them for more than three years; (5) Investments made before the Company's initial public offering and listing.
Article 3
Principles of securities investment: The Company shall conduct securities investments in accordance with the principles of legality, prudence, safety, and effectiveness, establish and improve internal control systems, control investment risks, and focus on investment efficiency. (1) The Company's securities investments must strictly comply with national laws, regulations, and regulatory requirements, and illegal operations are strictly prohibited; (2) The Company's securities investments must be based on controllable risks, within its capacity, and must not affect the normal operation of its main business; (3) The Company's securities investments must balance liquidity and profitability to enhance the efficiency of fund utilization.
Article 4
The source of funds for the Company's securities investments shall be the Company's own funds. The Company shall strictly control the scale of funds for securities investments, which must not affect the normal operation of the Company, and shall not use raised funds directly or indirectly for securities investments.
Article 5
This system applies to the securities investment behaviors of the Company and its wholly-owned subsidiaries and controlling subsidiaries (hereinafter referred to as "subsidiaries"). Subsidiaries shall not conduct securities investments without the approval of the Company's board of directors.