Measures for the Administration of Foreign Investment of Jiangsu Shentong Valve Co., Ltd.

Jiangsu Shentong Valve Co., Ltd.
Measures for the Administration of Foreign Investment
(Revised by the Third Session of the Sixth Board of Directors)

Chapter I General Provisions
Article 1 In order to standardize the foreign investment behavior of Jiangsu Shentong Valve Co., Ltd. (hereinafter referred to as "the company"), establish a standardized, effective and scientific investment decision-making system and mechanism, reduce the risk of foreign investment, improve the efficiency of foreign investment, avoid investment decision-making mistakes, and realize the preservation and appreciation of the company's assets, in accordance with the "the People's Republic of China Company Law", "the People's Republic of China Civil Code", "Shenzhen Stock Exchange Stock Listing Rules", "Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidelines No. 1-Main Board Listed Companies Standardized Operation" and other relevant laws, regulations and The requirements of normative documents, combined with the relevant provisions of the company's "Articles of Association", formulate these measures.
Article 2 The term "foreign investment" as mentioned in this system refers:
(I) acquisition, sale of equity interests, physical assets or other assets;
(II) purchase of stocks or bonds issued by other enterprises;
(III) to invest in other enterprises by means of joint venture or formation of limited liability company;
(IV) entrusted financial management, entrusted loans;
Other foreign investment methods as prescribed by (V) laws and regulations.
Article 3 The company's investment shall comply with the requirements of relevant national and provincial and municipal industrial policies, conform to the company's development strategic planning and development ideas, be able to rationally allocate corporate resources, and promote the optimal combination of production factors, so as to create good economic benefits.
Article 4 The internal control of a company's major investment shall follow the principles of legality, prudence, safety and effectiveness, control investment risks and pay attention to investment benefits.
Article 5 The foreign investment of the Company and its subsidiaries shall be carried out in accordance with these Measures.
Chapter II Division of Responsibilities
Article 6 The Company shall ensure that incompatible positions in handling foreign investment business are separated, restricted and supervised from each other. The company shall separate the positions of feasibility study and evaluation, decision-making and implementation, record and storage, approval and implementation of disposal of foreign investment projects, and no one person shall hold two positions at the same time.
Article 7 The company's foreign investment shall be approved through legal procedures in accordance with relevant laws and regulations and the company's articles of association, and major foreign investment must be approved by the board of directors or the general meeting of shareholders. Except as authorized by the general meeting of shareholders or the board of directors. Where a company makes investment matters such as securities investment, entrusted financial management, venture capital, etc., the scale of investment shall be determined according to the company's risk tolerance. The investment matters mentioned in the preceding paragraph shall be submitted to the board of directors or the general meeting of shareholders for consideration and approval in accordance with the articles of association and the rules of procedure of the general meeting of shareholders, and the power of approval shall not be delegated to the individual directors or management of the company.
Article 8 When a company uses raised funds to carry out investment matters, in addition to complying with this system, it shall also refer to the Measures for the Administration of Raised Funds. In addition to complying with this system, the Company shall carry out entrusted financial matters in accordance with the Company's "Entrusted Financial Management System. Co-investment between the company and its related parties shall be carried out in accordance with the Decision-making System for Related Transactions.
Chapter III Decision Control
Article 9 Before making a decision on a foreign investment project, the Strategic Investment Department of the Company shall be responsible for conducting a feasibility study on the proposed investment project and analyzing the rate of return on investment, internal rate of return, payback period, investment risk and other analyses that will help to make investment decisions. The project investment feasibility analysis report is provided to the President's Office, the Board of Directors and the General Meeting of Shareholders as a reference for foreign investment decisions.
Article 10 When the board of directors considers major investment matters, the directors shall carefully analyze the feasibility and investment prospects of the investment project, and pay full attention to whether the investment project is related to the company's main business, whether the funding source arrangement is reasonable, whether the underlying assets are safe and guaranteed, Whether the investment risk is controllable and the impact of the matter on the company.
Article 11 To implement a foreign investment project, the relevant authorization and approval documents must be obtained, and the approved foreign investment budget plan and other relevant materials must be attached.
Article 12 If the foreign investment matters of the company meet one of the following standards, it shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors:
The total assets involved in (I) transaction account for more than 50% of the company's latest audited total assets, and if the total assets involved in the transaction have both a book value and an appraised value, whichever is higher;
(II) the net assets involved in the subject matter of the transaction (e. g. equity) account for more than 50% of the company's audited net assets in the latest period, and the absolute amount exceeds 50 million yuan, the net assets involved in the transaction have both book value and evaluation value, whichever is higher;
The relevant operating income of the subject matter of the (III) transaction (e. g. equity) in the latest fiscal year accounts for more than 50% of the audited operating income of the company in the latest fiscal year, and the absolute amount exceeds 50 million yuan;
The net profit of the subject matter of the (IV) transaction (such as equity) in the most recent fiscal year accounts for more than 50% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 5 million;
The transaction amount of (V) transaction (including the assumption of debts and expenses) accounts for more than 50% of the company's latest audited net assets, and the absolute amount exceeds 50 million yuan;
The profit generated by (VI) transaction accounts for more than 50% of the company's audited net profit in the latest fiscal year, and the absolute amount exceeds 5 million yuan;
If the data involved in the calculation of the above indicators is negative, its absolute value is taken for calculation.
Article 13 If the foreign investment matters of the company meet one of the following standards, it shall be examined and approved by the board of directors and disclosed in a timely manner:
The total assets involved in (I) transaction account for more than 10% of the company's latest audited total assets, and if the total assets involved in the transaction have both a book value and an appraised value, whichever is higher;
(II) the net assets involved in the subject matter of the transaction (e. g. equity) account for more than 10% of the company's audited net assets in the latest period, and the absolute amount exceeds 10 million yuan, the net assets involved in the transaction have both book value and evaluation value, whichever is higher;
The relevant operating income of the subject matter of the (III) transaction (such as equity) in the latest fiscal year accounts for more than 10% of the company's audited operating income in the latest fiscal year, and the absolute amount exceeds RMB 10 million;
The net profit of the subject matter of the (IV) transaction (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited net profit in the most recent fiscal year, and the absolute amount exceeds RMB 1 million;
The transaction amount of (V) transaction (including the assumption of debts and expenses) accounts for more than 10% of the company's latest audited net assets, and the absolute amount exceeds 10 million yuan;
The profit generated by (VI) transaction accounts for more than 10% of the company's audited net profit in the latest fiscal year, and the absolute amount exceeds 1 million yuan;
If the data involved in the calculation of the above indicators is negative, its absolute value is taken for calculation.
Article 14 Except for the foreign investment matters that need to be reviewed and approved by the board of directors and the general meeting of shareholders as stipulated in Articles 12 and 13 of this system, other investment matters shall be reviewed and approved by the President's Office and submitted to the chairman for approval.
Article 15 The company's foreign investment shall be subject to budget management. During the implementation of the investment budget, the investment budget may be reasonably adjusted according to changes in actual conditions. The investment budget plan must be approved by the competent authority.
Article 16 Foreign investment projects that have been approved for implementation shall be implemented by the relevant units or departments of the company authorized by the competent authority.
Article 17 A foreign investment project shall sign an investment contract or agreement with the investee, of which a long-term investment contract or agreement must be approved by an authorized decision-making body before it can be formally signed. The company shall authorize specific departments and personnel to invest cash, in kind or intangible assets in accordance with long-term equity investment contracts (including investment processing contracts) or agreements, and the physical inputs must be handed over and approved by the physical use and management departments. When investing in kind, if the price of the kind is lower than its appraised value, the board of directors shall approve it, and if the amount of foreign investment is greater than the share of the net book assets of the invested unit, or if the capital is invested at a premium to the invested unit, the investment shall be implemented only after the special approval of the board of directors or the general meeting of shareholders.
Chapter IV Execution Control
Article 18 A company shall formulate an implementation plan for foreign investment, specifying the time, amount, mode and responsible personnel of capital contribution. The foreign investment implementation plan and changes to the plan shall be reviewed and approved by the chairman of the company or his authorized personnel. If the foreign investment business requires the signing of articles of association, agreements, contracts and relevant legal documents, it shall consult the legal counsel hired by the company and sign them after approval by the chairman of the company or his authorized personnel.
Article 19 The company shall register the investment assets in the name of the company as soon as possible after purchasing them, and shall not register them in the name of the handling personnel to prevent fraud.
Article 20 the strategic investment department of the company shall be responsible for tracking and managing the investment projects, supervising the implementation progress, mastering the financial status and operation of the invested units, and regularly organizing the analysis of the quality of foreign investment. If any abnormal situation is found, it shall report to the board of directors of the company in a timely manner.
Article 21 the board of directors of a company shall regularly understand the implementation progress and investment benefits of major investment projects. In case of failure to invest as planned, failure to realize the expected income of the project, and large losses of investment, the board of directors of the company shall find out the reasons, take effective measures in a timely manner, and investigate the responsibilities of relevant personnel.
Article 22 The Company shall send directors, supervisors, financial or other management personnel to the investee in accordance with the needs and relevant regulations. In addition, a system of timely reporting, performance evaluation and rotation of posts shall be established for the relevant personnel stationed in the investee units.
Article 23 The company shall strengthen the control of investment income, interest, dividends and other income obtained from foreign investment shall be included in the company's accounting system, it is strictly prohibited to set up off-account accounts, and regularly and irregularly check the relevant investment accounts with the invested units to ensure the safety and integrity of foreign investment.
Article 24 Investment assets (referring to stocks, funds and bond assets, the same below) may be entrusted to banks, securities companies, trust companies and other independent specialized institutions for custody, or may be kept by the company itself. If the entrusting institution declares customs, it shall sign an entrustment contract with the institution in accordance with its responsibilities and rights, and formulate a supervision mechanism to ensure the safety and control of assets.
Article 25 If the investment assets are kept by the company itself, a strict joint control system must be implemented, that is, at least two or more personnel must be jointly controlled, and no one person is allowed to contact the investment assets alone. For the deposit or withdrawal of any investment assets, the name, quantity, value and date of access of the investment assets must be recorded in the register in detail, and signed by all the personnel present.
Chapter V Disposal Control
Article 26 Before the disposal of foreign investment, the foreign investment project to be disposed of must be analyzed and demonstrated, the reasons for the disposal and the direct and indirect economic and other consequences must be fully explained, and then submitted to the institutions or personnel authorized to approve the disposal of foreign investment for examination and approval. The authority to approve the disposal of foreign investment is the same as that to approve the implementation of foreign investment. The disposal of foreign investment must comply with the relevant provisions of the relevant laws and regulations of the State.
Article 27 The transfer of foreign investment shall be reasonably determined by the company, and if necessary, it may entrust a specialized agency with corresponding qualifications to evaluate it.
Article 28 The Finance Department of the Company shall carefully examine the approval documents, minutes of meetings, asset recovery lists and other relevant information related to the disposal of foreign investment, and promptly carry out accounting treatment of foreign investment disposal in accordance with regulations to ensure that the disposal of assets is true and legal.
Chapter VI Supervision and Inspection
Article 29 The audit department of a company shall establish a supervision and inspection system for the internal control of foreign investment and conduct inspections on a regular or irregular basis.
Article 30 The contents of internal control supervision and inspection of foreign investment mainly include:
(I) the post setting and staffing of foreign investment business. Focus on checking whether the post setting is scientific and reasonable, whether there is a phenomenon of incompatible positions mixing posts, and whether the staffing is reasonable;
(II) the implementation of the authorization and approval system for foreign investment business. Focus on checking whether the hierarchical authorization is reasonable, whether the authorization and approval procedures for foreign investment are sound, and whether there are violations of regulations such as ultra vires approval;
(III) decisions on foreign investment operations. Focus on checking whether the foreign investment decision-making process conforms to the prescribed procedures;
(IV) the implementation of foreign investment. Focus on checking whether the assets are invested in accordance with the investment plan, whether the investment income obtained during the investment period is accounted for in a timely manner, and the custody and recording of foreign investment equity certificates and related vouchers;
Disposal of (V) foreign investment. Focus on checking whether the disposal of investment assets has been through collective decision-making and in accordance with the authorization and approval procedures, whether the recovery of assets is complete and timely, and whether the valuation of assets is reasonable;
Accounting treatment of (VI) foreign investment. Focus on checking whether the accounting records are true and complete.
Article 31 The audit department of the company shall promptly report the weak links in the internal control of foreign investment business found in the process of supervision and inspection, and the relevant departments shall find out the reasons and take measures to correct and improve them.
Chapter VII Information Disclosure
Article 32 The company's foreign investment shall be disclosed in accordance with the relevant provisions of the company's "Information Disclosure Management System.
Chapter VIII Supplementary Provisions
Article 33 When necessary, the board of directors may entrust personnel other than the person in charge of the investment project to evaluate and analyze the investment project.
Article 34 A company's foreign investment activities must abide by the relevant laws and regulations of the state, and accept the supervision and management of the relevant government departments.
Article 35 The term "above" in these Measures includes the number and "below" does not include the number.
Article 36 The Board of Directors of the Company shall be responsible for the interpretation and revision of these Measures.
Article 37 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