Jiangsu Shentong Valve Co., Ltd. to raise funds management measures.

Jiangsu Shentong Valve Co., Ltd.
Measures for the Management of Raised Funds
(Revised at the third meeting of the sixth session of the Board of Directors)

Chapter I General Provisions
Article 1 In order to strengthen and standardize the management of the funds raised by Jiangsu Shentong Valve Co., Ltd. (hereinafter referred to as the "Company") and improve the efficiency and effectiveness of the use of the funds raised, according to the "the People's Republic of China Company Law", "the People's Republic of China Securities Law", "Administrative Measures for Initial Public Offerings and Listing", "Shenzhen Stock Exchange Stock Listing Rules", "Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidelines No. 1-Main Board" Standardized Operation of Listed Companies "," Guidelines for the Supervision of Listed Companies No. 2-Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies "and other laws, regulations and regulatory documents, as well as" Articles "the provisions, these Measures are formulated in combination with the actual situation of the company.
Article 2 The term "raised funds" as mentioned in these Measures refers to the funds raised by a company from investors through the issuance of shares or its derivatives and used for specific purposes.
The term "over-raised funds" as mentioned in these Measures refers to the excess of the total amount of funds raised by the company after deducting the issuance expenses (hereinafter referred to as "net raised funds") over the amount of funds raised in the plan.
Article 3 Where a fund-raising investment project (hereinafter referred to as a "fund-raising project") is implemented through a subsidiary of the Company or other enterprise controlled by the Company, the Company shall ensure that the subsidiary or other enterprise controlled by the Company complies with the provisions of these Measures.
Article 4 After the raised funds are in place, the company shall promptly go through the capital verification procedures, and the accounting firm that complies with the provisions of the Securities Law shall examine and issue a capital verification report.
Article 5 The fund-raising funds shall be limited to the fund-raising projects promised by the company in the application documents for securities issuance, and the investment direction of the fund-raising funds shall not be changed at will. The board of directors of the company shall formulate a detailed plan for the use of funds, so that the use of funds is standardized, open and transparent. The company's change of fund-raising project must be approved by the general meeting of shareholders, and fulfill the obligation of information disclosure and other relevant legal obligations.
Article 6 The Company shall use the raised funds with caution and handle the relationship between the timing of investment, the investment of funds, the progress of investment and the benefits of the project on the principle of generating benefits from investment.
Article 7 the directors, supervisors and senior managers of the company shall be diligent and responsible, urge the company to standardize the use of the raised funds, consciously safeguard the safety of the company's raised funds, and shall not participate in, assist or connive at the company's unauthorized or disguised change of the use of the raised funds.
Article 8 Anyone who violates these Measures and causes the company to suffer losses (including economic losses and reputation losses) shall, depending on the specific circumstances, be punished by the relevant responsible person. When necessary, the relevant responsible person shall bear the corresponding civil liability for compensation.
Chapter II Special Account Storage of Raised Funds
Article 9 The company shall adhere to the principle of centralized storage of funds to facilitate supervision and management, and implement a special account storage system for funds raised.
Article 10 The funds raised by the company shall be deposited in a special account approved by the board of directors (hereinafter referred to as the "special account") for centralized management, and the special account shall not deposit non-raised funds or use them for other purposes. If the company has more than two financings, it shall set up separate accounts for raising funds. The over-raised funds shall also be deposited in the special account for the management of the raised funds.
Article 11 The Company shall sign a tripartite supervision agreement (hereinafter referred to as the "Agreement") with the sponsor institution or independent financial adviser and the commercial bank that deposits the raised funds (hereinafter referred to as the "commercial bank") within one month after the raised funds are in place. The agreement shall include at least the following:
1. The company shall deposit the proceeds centrally in a special account;
2, the fund-raising account number, the special account involved in the fund-raising projects, deposit amount;
3. If the company withholds more than 50 million yuan or 20% of the net proceeds from the special account at one time or within 12 months, the company and the commercial bank shall promptly notify the sponsor or independent financial adviser;
4. The commercial bank issues monthly statements to the company and copies them to the sponsor or independent financial advisor;
5, the sponsor or independent financial adviser can at any time to the commercial bank to inquire about the special account information;
6. the supervisory duties of the sponsor or independent financial adviser, the duty of informing and cooperating with commercial banks, and the manner in which the sponsor or independent financial adviser and commercial banks supervise the use of the funds raised by the company;
7. the rights, obligations and liability for breach of contract of the company, commercial bank, sponsor or independent financial adviser;
8. If the commercial bank fails to issue a statement or notify the special account of large withdrawals to the sponsor or independent financial adviser three times in a timely manner, and there is no cooperation with the sponsor or independent financial adviser to inquire and investigate the information of the special account, the company may terminate the agreement and cancel the special account for fund-raising.
The above-mentioned tripartite supervision agreement to raise funds shall be considered and approved by the board of directors of the company.
The company shall promptly report to the Shenzhen Stock Exchange for the record and announce the main contents of the agreement after the signing of all agreements.
If the company implements the fund-raising project through the holding subsidiary, the company, the holding subsidiary implementing the fund-raising project, the commercial bank and the sponsor or independent financial adviser shall jointly sign a tripartite agreement, and the company and its holding subsidiary shall be regarded as a common party.
If the above-mentioned agreement is terminated before the expiration of the validity period, the company shall sign a new agreement with the relevant parties within 1 month from the date of termination of the agreement, and promptly report to the Shenzhen Stock Exchange for the record and make an announcement.
Article 12 The Finance Department shall establish an account for the management and use of the raised funds, and record in detail the deposit bank, account number, deposit amount, items used, use of each item and its corresponding amount, date of use, corresponding accounting voucher number, corresponding contract, approval procedure and other matters.
Chapter III Use of Raised Funds
Article 13 The company shall use the raised funds in accordance with the investment plan of the raised funds promised in the issuance application documents, and implement special funds for special purposes. In the event of a situation that seriously affects the normal progress of the investment plan of the raised funds, the company shall promptly report to the Shenzhen Stock Exchange and make an announcement.
Article 14 In principle, the funds raised shall be used for the main business of the company, and the funds raised by the company shall not be used for high-risk investments such as securities investment and derivatives trading or to provide financial assistance to others, nor shall they be invested directly or indirectly in companies whose main business is to buy and sell securities.
The Company shall not use the proceeds for pledges, entrusted loans or other disguised investments that change the use of the proceeds.
The company shall ensure the authenticity and fairness of the use of the raised funds, prevent the raised funds from being occupied or misappropriated by the controlling shareholder, the actual controller and other related persons, and take effective measures to prevent the related persons from using the fund-raising project to obtain improper benefits.
Article 15 When the company uses the raised funds for the following matters, it shall be considered and approved by the board of directors, and the independent directors, the board of supervisors and the sponsor or the independent financial adviser shall express their explicit consent:
1, to raise funds to replace the self-financing funds have been invested in advance to raise funds investment projects;
2, the use of temporarily idle funds raised for cash management;
3, the use of temporarily idle funds to raise funds temporarily replenish liquidity;
4, change the use of funds raised;
5, change the place of implementation of the fund-raising investment project;
6, the use of savings to raise funds;
7. Over-raised funds are used for projects under construction and new projects.
The company's change of the use of the proceeds shall also be approved by the general meeting of shareholders. If the relevant matters involve related transactions, purchase of assets, foreign investment, etc., the review procedures and information disclosure obligations shall also be performed in accordance with the relevant provisions of the Stock Listing Rules.
Article 16 The company's temporarily idle raised funds may be managed in cash, and the products it invests in shall meet the following conditions:
1, structured deposits, large certificates of deposit and other high-security capital-saving products;
2, good liquidity, high security, shall not affect the normal investment plan to raise funds;
3. The term of investment products shall not exceed 12 months. Investment products shall not be pledged, and the special settlement account for products shall not deposit non-raised funds or be used for other purposes. If a special settlement account for products is opened or canceled, the company shall promptly report to the Shenzhen Stock Exchange for filing and announcement.
Article 17 Where a company uses temporarily idle raised funds for cash management, it shall announce the following within two trading days after the meeting of the board of directors:
1, the basic situation of the fund-raising, including the time of raising, the amount of funds raised, the net amount of funds raised and the investment plan;
2, the use of funds raised, the reasons for the idle funds raised;
3, the amount and duration of idle fund-raising investment products, whether there is a disguised change in the use of funds raised and measures to ensure that the normal progress of the fund-raising project will not be affected;
4. The income distribution method of investment products, the scope of investment, the capital preservation commitment and safety analysis provided by the product issuer, and the risk control measures taken by the company to ensure the safety of funds;
5. Opinions issued by independent directors, supervisory boards and sponsors or independent financial advisers. The company shall, in the event of a major risk situation such as the deterioration of the financial situation of the product issuer and the loss of the invested products, disclose the risk warning announcement in a timely manner and explain the risk control measures taken by the company to ensure the safety of funds.
Article 18 When the company uses the raised funds, it shall strictly perform the application and approval procedures in accordance with the relevant provisions of the company's fund approval within the plan for the use of the raised funds.
Article 19 The president of the company shall be responsible for organizing the implementation of the fund-raising project. The specific procedures are as follows:
1. The construction of fixed asset investment projects shall be implemented by the company's project management department and project implementation unit; equity investment projects shall be implemented by the company's strategic investment department in conjunction with the finance department;
2. The project implementation unit is responsible for the formulation of the project implementation plan, quality control, project progress tracking, project file management, etc;
3, the company's finance department is responsible for the arrangement of project funds, accounting records and use of account management, and monthly to the strategic investment department to submit the use of funds raised;
4. After the completion of the project, the project management department of the company will carry out the completion acceptance together with the project implementation unit, finance department, audit department and strategic investment department.
Article 20 After the project is delivered for use, the project user unit shall make operational data statistics, establish a ledger and reporting system, and the Strategic Investment Department shall take the lead in organizing the project benefit evaluation, and submit the summary report, benefit evaluation report and other information to the board of directors every six months.
Article 21 the board of directors of the company shall comprehensively check the progress of the fund-raising projects every half year, and issue a special report on the deposit and use of the funds raised in the semi-annual and annual years. If there is any difference between the actual investment progress of the fund-raising projects and the investment plan, the company shall explain the specific reasons.
If the difference between the actual use of the raised funds in the year of the raised investment project and the estimated use amount of the latest disclosed investment plan exceeds 30%, the company shall adjust the investment plan of the raised investment project, and disclose the latest annual investment plan of the raised funds, the current actual investment progress, the adjusted expected annual investment plan and the reasons for the change of the investment plan in the special report and periodic report on the annual use of the raised funds.
Article 22 If the following circumstances occur in a fund-raising project, the company shall re-demonstrate the feasibility and expected benefits of the project and decide whether to continue the project:
1. Significant changes in the market environment involved in the fundraising project;
2, the fund-raising project shelved for more than one year;
3, more than the completion period of the latest fund-raising investment plan and the amount of fund-raising investment does not reach 50% of the relevant plan amount;
4, the fund-raising project has other abnormal circumstances. The company shall disclose the progress of the project and the reasons for the abnormality in the latest periodic report, and if it is necessary to adjust the investment plan of the raised funds, it shall disclose the adjusted investment plan of the raised funds at the same time.
Article 23 If the company decides to terminate the original fund-raising project, it shall select new investment projects in a timely and scientific manner.
Article 24 Where a company replaces the self-raised funds that have been invested in the fund-raising project in advance with the raised funds, the accounting firm shall issue an authentication report. The company can replace the self-raised funds with the raised funds within six months after the funds are received.
If the company has disclosed in the issuance application documents that it intends to replace the self-raised funds invested in advance with the raised funds and the amount of the pre-investment is determined, it shall make a public announcement before the replacement is implemented.
Article 25 The company may temporarily use the idle raised funds to supplement the working capital, which is limited to the production and operation related to the main business, and shall meet the following conditions:
1. No disguised change in the use of the proceeds or affect the normal conduct of the investment plan of the proceeds;
2, a single supplementary liquidity time shall not exceed 12 months;
3. The funds previously raised for temporary replenishment of liquidity have been returned;
4, do not use idle funds raised directly or indirectly for securities investment, derivatives trading and other high-risk investments.
The above-mentioned matters shall be examined and approved by the board of directors of the company, and the following contents shall be announced in a timely manner:
1, the basic situation of the fund-raising, including the time of raising, the amount of funds raised, the net amount of funds raised and the investment plan;
2, the use of funds raised;
3. The amount and duration of the idle proceeds to replenish liquidity;
4. Idle raised funds to supplement working capital is expected to save the amount of financial expenses, the reasons for insufficient working capital, whether there is a disguised change in the use of raised funds and measures to ensure that the normal progress of raised funds projects will not be affected;
5. Opinions issued by independent directors, supervisory boards and sponsors or independent financial advisers;
6. Other contents required by Shenzhen Stock Exchange. Before the due date of the supplementary working capital, the company shall return the part of the funds to the special account of the raised funds, and make a timely announcement after the full return of the funds.
Article 26 The company shall, in accordance with the actual production and operation needs of the enterprise, submit it to the board of directors or the general meeting of shareholders for approval, and use the over-raised funds in a planned manner in the following order:
1, to supplement the fund-raising project funding gap;
2, for projects under construction and new investment projects;
3. Repayment of bank loans;
4. Temporary replenishment of liquidity;
5, cash management;
6, permanent replenishment of liquidity.
Article 27 The use of over-raised funds for projects under construction and new projects shall be used in accordance with the progress of projects under construction and new projects.
When the company uses the over-raised funds for projects under construction and new projects, the sponsor or independent financial adviser and independent director shall issue a special opinion. If the project involves related transactions, asset purchase, foreign investment, etc., it shall also perform the review procedures and information disclosure obligations in accordance with the relevant provisions of the Shenzhen Stock Exchange Stock Listing Rules.
Article 28 The over-raised funds may be used to permanently replenish liquidity or repay bank loans, and the company shall replenish liquidity or repay bank loans in accordance with actual needs, and the cumulative amount shall not exceed 30% of the total over-raised funds every 12 months.
If the over-raised funds are used to permanently replenish working capital or repay bank loans, they shall be examined and approved by the general meeting of shareholders of the company, and the independent directors, the board of supervisors and the sponsor or independent financial adviser shall express their clear consent and disclose them.
The company shall undertake not to make high-risk investments such as securities investment and derivatives trading, as well as provide financial assistance to objects other than the holding subsidiary and disclose it to the public within 12 months after replenishing its liquidity.
Article 29 The Company may use the savings arising from the termination of part of the fund-raising project or the completion of part of the fund-raising project for permanent replenishment of liquidity. Before the completion of all the fund-raising projects of the company, it is proposed to change part of the raised funds into permanent supplementary working capital, which shall meet the following conditions:
1, to raise funds to account for more than one year;
2, does not affect the implementation of other fund-raising projects;
3, in accordance with the requirements of the change in the use of funds raised to fulfill the approval procedures and information disclosure obligations.
Chapter IV Change of Investment Projects with Raised Funds
Article 30 The company shall be approved by the board of directors and the general meeting of shareholders before changing the fund-raising project. If the company has the following circumstances, it shall be regarded as a change in the use of the raised funds:
1, cancel or terminate the original fund-raising projects, the implementation of new investment projects;
2. change the implementation entity of the fund-raising project (except for the change of the implementation entity between the company and its wholly-owned subsidiaries);
3, change the implementation of the fund-raising project;
4. Other circumstances identified by the CSRC or Shenzhen Stock Exchange as a change in the use of the proceeds. The board of directors of the company shall select new investment projects scientifically and prudently, conduct feasibility analysis on new investment projects, and be convinced that the investment projects have good market prospects and profitability, can effectively prevent investment risks and improve the efficiency of the use of raised funds.
Article 31 The board of directors of the company shall scientifically and prudently select new fund-raising projects, conduct feasibility analysis on new investment projects, and be convinced that the investment projects have good market prospects and profitability, and can effectively prevent investment risks and improve the fund-raising. Benefit in the use of funds.
The purpose of raising funds after the company's change shall, in principle, be invested in the main business.
Article 32 If the company intends to change the fund-raising project into a joint venture, it shall carefully consider the necessity of the joint venture on the basis of fully understanding the basic situation of the joint venture, and the company shall hold a controlling stake to ensure the effective control of the fund-raising project.
Article 33 Where the Company changes the use of the proceeds for the acquisition of the assets (including interests) of the controlling shareholder or the actual controller, it shall ensure that it can effectively avoid peer competition and reduce connected transactions after the completion of the acquisition.
Article 34 If the company changes the implementation location of the fund-raising project, it shall make a timely announcement after being deliberated and approved by the board of directors, explaining the change situation, reasons, impact on the implementation of the fund-raising project and the opinions issued by the sponsor or independent financial consultant.
Article 35 After the completion of a single or all fund-raising project, if the surplus fund-raising funds (including interest income) are less than 10% of the net fund-raising funds of the project, the company shall use the surplus fund-raising funds in accordance with the first paragraph of Article 15 of these Measures Perform corresponding procedures.
If the surplus proceeds (including interest income) reach or exceed 10% of the net proceeds of the project, the company's use of the surplus proceeds shall also be approved by the general meeting of shareholders.
If the surplus proceeds (including interest income) are less than 5 million yuan or less than 1% of the net proceeds of the project, the procedures in the preceding paragraph may be exempted, and their use shall be disclosed in the annual report.
Chapter V Management and Supervision of Raised Funds
Article 36 The financial department of the company shall set up a ledger for the use of the raised funds, and record in detail the expenditure of the raised funds and the investment of the raised investment projects.
The internal audit department shall inspect the storage and use of the raised funds at least quarterly and report the results of the inspection to the Audit Committee in a timely manner.
If the Audit Committee considers that there are significant irregularities, significant risks in the management of the Company's raised funds or that the internal audit department has failed to submit a report on the results of the inspection in accordance with the provisions of the preceding paragraph, it shall promptly report to the Board of Directors.
The board of directors shall report to the Shenzhen Stock Exchange and make an announcement within 2 trading days after receiving the report of the audit committee. The contents of the announcement shall include the major violations or major risks in the management of raised funds, the consequences that have been or may be caused, and the measures that have been or are to be taken.
Article 37 The company shall disclose the actual use of the raised funds in a true, accurate and complete manner. The Board of Directors of the Company shall conduct a comprehensive verification of the deposit and use of the raised funds every semi-annual, issue a semi-annual and annual "Special Report on the Deposit and Actual Use of the Company's Raised Funds", and engage an accounting firm to issue an attestation report on the deposit and use of the raised funds for the year. The company shall disclose the forensic report issued by the accounting firm and the periodic report at the same time in the qualified media.
The accounting firm shall reasonably verify whether the special report of the board of directors has been prepared in accordance with the relevant provisions of the Shenzhen Stock Exchange and whether it truthfully reflects the actual deposit and use of the annual raised funds, and put forward the conclusion of the verification.
If the attestation conclusion is "reserved conclusion", "negative conclusion" or "unable to draw a conclusion", the board of directors of the company shall analyze the reasons for the conclusion made by the certified public accountant in the attestation report, propose corrective measures and disclose them in the annual report.
Article 38 The sponsor or independent financial adviser and the company shall agree in the sponsorship agreement that the sponsor or independent financial adviser shall conduct an on-site inspection of the deposit and use of the funds raised by the company at least once every six months. After the end of each fiscal year, the sponsor or independent financial adviser shall issue a special verification report on the deposit and use of the company's annual proceeds and disclose it.
If the deposit and use of the company's raised funds is issued by the accounting firm with a "reserved conclusion", "negative conclusion" or "unable to put forward a conclusion" verification conclusion, the sponsor institution or independent financial consultant shall also carefully analyze the reasons for the above verification conclusion put forward by the accounting firm in its verification report, and put forward clear verification opinions.
If the sponsor or independent financial adviser finds that the company or commercial bank has not fulfilled the tripartite agreement as agreed, or finds that there are major violations or major risks in the management of the company's raised funds during on-site inspection of the company, it shall urge the company to make timely rectification and report to the Shenzhen Stock Exchange.
Article 39 The independent directors shall continue to pay attention to whether there are material differences between the actual management and use of the proceeds and the information disclosure of the Company. With the consent of more than 1/2 independent directors, the independent directors may engage an accounting firm to issue an attestation report on the deposit and use of the proceeds. The company shall actively cooperate and bear the necessary expenses.
The board of directors shall make a public announcement in a timely manner after receiving the verification report specified in the preceding paragraph. If the assurance report considers that there are irregularities in the management and use of the company's raised funds, the board of directors shall also announce the irregularities in the deposit and use of the raised funds, the consequences that have been or may result, and the measures that have been or are to be taken.
Chapter VI Supplementary Provisions
Article 40 The terms "above" and "before" in these Measures include the number, and "more than" and "less than" do not include the number.
Article 41 Matters not covered in these Measures shall be subject to relevant national laws, administrative regulations and the "Articles of Association.
Article 42 The Board of Directors of the Company shall be responsible for the interpretation and revision of these Measures.
Article 43 These Measures shall be formally implemented from the date of adoption by the general meeting of shareholders of the Company.

Board of Directors of Jiangsu Shentong Valve Co., Ltd.
October 26, 2022