Applicant's qualification

A perpetual joint stock limited company established by law with more than 3 years of continuing operation after establishment (except with an exemption granted by the State Council).
For a joint stock limited company restructured from a limited company at its original book value of net assets, the continuing operation period can be counted from the date of establishment of the limited company.
Operation shall be in compliance with the law, regulations, the articles of associations of the company and the State's industrial policies.
There is no significant change in the principal operations, directors and senior management and no change in de facto controlling people in the last three years.
Shareholding structure is clear.  There is no major dispute on shareholdings among the controlling shareholders, shareholders under the control of the controlling shareholders and the de facto controlling person.
Major financial indicators

Net profits for the last three financial years are positive with aggregate amount exceeding RMB 30 million.  Net profits shall be the lower of the amounts stated before and after extraordinary items.
Cumulative net cash flows from operating activities for the last three financial years exceeded RMB 50 million; or cumulative operating income for the last three years exceeded RMB 300 million.
Minimum RMB 30 million of share capital before issuance.
Intangible assets (excluding land use rights, marine cultivation rights and mining rights) did not exceed 20% of the net assets at the end of the latest year.
No cumulative loss recorded for the latest period.
Minimum shareholdings requirements for the promoter and the public

Minimum 25% of share capital shall be held by the public.
Minimum 10% of share capital shall be held by the public if the total issued share capital exceeds RMB 400 million.
Corporate governance

A business structure of integrity and the ability to operate independently.
Assets remained intact; independence of executives, financial management, organisation and business.
Established reliable systems of general meetings, board of directors, board of supervisors, independent directors and secretary to the board of directors under the law so that the relevant organisations and personnel can perform their duties pursuant to the law.
Directors, supervisors and senior management understand the law and regulations related to listing of shares, and are aware of the statutory responsibilities and obligations of the listed company, its directors, supervisors and senior management.
The qualifications of the directors, supervisors and senior management are in conformity with the law, rules and regulations.
Internal control systems are comprehensive and effectively implemented, and can give reasonable assurance on the reliability of financial reporting, validity of business operation and efficiency and effectiveness of operation.
Approval authority and process for providing guarantees to other companies are clearly laid down in the articles of associations.  There is no violation of regulations in relation to providing guarantees to the controlling shareholders, de facto controlling person and other entities under its control.
Established a rigorous treasury policy.  There shall not be any appropriation of funds through borrowings, repayment of debts, reimbursements or any other means by the controlling shareholders, de facto controlling person and other entities under the issuer's control.
Financial and accounting information

Prime quality of assets.  Reasonable mix of assets and liabilities.  Strong profitability and normal cash flows.
Internal controls are effective in all material respects with an unqualified verification report issued by a CPA.
The fundamental accounting work and the preparation of the financial statements comply with the Accounting Standards for Business Enterprises and the "Accounting Systems for Business Enterprises" and present fairly, in all material respects, the financial position, results of operation and cash flows of the issuer, for which an unqualified audit opinion is issued by a CPA.
Complete disclosure of related party relationships and appropriate disclosure of significant related party transactions.  The pricing with the related parties is fair.  No manipulation of profits exists through related party transactions.
Taxes are paid pursuant to the law. All favourable taxation arrangements are in compliance with the relevant rules and regulations.  There is no significant dependence of operating results on the favourable taxation treatment.
There is no significant risk in repayment of debts.  No guarantees, litigation, arbitration or other significant contingent events exist that can influence the issuer's going concern.
Use of funds raised

Clear objectives of employment of funds raised, and in principle, the funds shall be used on the principal business.
Investment projects using the funds raised shall comply with the State's industrial policies and rules about management of investments, environmental protection, land management and other laws and regulations.
Board of directors shall carry out a detailed study on the feasibility of the projects using the funds to ensure that the projects have a good prospect and profitability, and for which the investment risks are effectively mitigated and the funds are used at maximum advantage.
Implementation of the projects using the funds raised shall not result in a competition in the same industry or have any adverse influence in the independence of the issuer.
A system for deposit of funds raised shall be established.  Funds raised shall be placed in specific bank accounts determined by the directors.

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