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Yu Diamond: Announcement on guarantees for wholly-owned subsidiaries
**Abstract**
Stock Code: 300064
Securities Abbreviation: Yu Diamond
Announcement No.: 2014-004
Zhengzhou Huajing Diamond Co., Ltd. announces that it provides a guarantee for its wholly-owned subsidiary, Huajing Precision Manufacturing Co., Ltd. The company and all members of the board of directors confirm that the information disclosed is true, accurate, and complete, with no false records, misleading statements, or material omissions.
**Overview of Guarantees**
Huajing Precision Manufacturing Co., Ltd., a wholly-owned subsidiary of Zhengzhou Huajing Diamond Co., Ltd., intends to apply for loans from Minsheng Bank and Kaifeng Bank for production and operational purposes. In response, the company will provide a guarantee amounting to RMB 100 million.
The proposal was reviewed and approved at the 22nd meeting of the second board of directors on January 24, 2014. According to the Shenzhen Stock Exchange GEM Listing Rules (revised in 2012), the company’s Articles of Association, and its External Guarantee Management System, this guarantee falls under the authority of the board of directors and does not require approval from the shareholders’ meeting.
**Basic Situation of the Guarantor**
1. **Huajing Precision Manufacturing Co., Ltd.**
- Established: August 8, 2011
- Registered Address: West of the 10th Street, North of Jingbei 4th Road, Zhengzhou Economic and Technological Development Zone (Henan Export Processing Zone)
- Legal Representative: Liu Yongqi
- Registered Capital: RMB 220 million
- Main Business: Production and sales of synthetic diamond downstream products and equipment; technology research and development and transfer; export of company products and import of machinery, spare parts, and raw materials.
2. **Equity Structure**
- Huajing Precision is fully owned by Zhengzhou Huajing Diamond Co., Ltd., with 100% equity held.
3. **Financial Indicators**
- Currency: RMB
- Note: The 2012 financial data has been audited by Asia Pacific (Group) Certified Public Accountants Co., Ltd. The 2013 data is unaudited. Since its establishment, Huajing Precision has strictly followed national laws, regulations, and industrial policies, with no major civil litigation or arbitration. It maintains good corporate credit and a stable financial position.
**Main Content of the Guarantee Agreement**
The company provides a joint and several liability guarantee for Huajing Precision. The specific amount and duration of each individual guarantee will be determined based on the loan agreements between Huajing Precision and the respective banks. The total guaranteed amount will not exceed the limit set by the board of directors, which is RMB 100 million.
**Board of Directors' Opinion**
The board believes that Huajing Precision has continuously improved its operational capabilities and now holds a certain scale and competitive advantage. As a wholly-owned subsidiary, the company has full control over its operations. This guarantee supports the sustainable development of Huajing Precision's core business, helps resolve capital constraints, and enhances profitability.
**Independent Directors' Opinion**
The independent directors have reviewed the situation and believe that Huajing Precision is well-managed and reputable. There is no indication that the company would need to assume any guarantee obligations due to default. This guarantee supports the growth of Huajing Precision without negatively affecting the company's normal operations or shareholder interests. The decision-making process was legal and compliant.
**Board of Supervisors' Opinion**
The Board of Supervisors confirms that the guarantee complies with relevant laws, regulations, and internal procedures, and does not harm the company or its shareholders.
**Cumulative External Guarantees and Overdue Guarantees**
As of the date of this announcement, the total external guarantees provided by the company and its subsidiaries amount to RMB 200 million, representing 14.85% of the company’s audited net assets as of 2012. All guarantees are made to subsidiaries, and there are no violations or overdue guarantees.
**Other Matters**
The board of directors authorizes management to determine the time and amount of individual guarantees according to applicable laws, company rules, and the loan contracts signed by Huajing Precision and the banks. The company will monitor the progress and disclose any changes promptly.
**Reference Documents**
1. Resolution of the 22nd Meeting of the Second Board of Directors
2. Resolution of the 16th Meeting of the Second Board of Supervisors
3. Independent Director's Opinion on the Company’s Guarantee for the Subsidiary
**Special Announcement**
Zhengzhou Huajing Diamond Co., Ltd.
Board of Directors
January 24, 2014