Securities code: 600237 Securities abbreviation: Tongfeng Electronic Announcement Number: Lin 2021-005

Anhui Tongfeng Electronics Co., LTD
Announcement of financial assistance to the holding company

The board of directors and all the directors of the Company warrant that there is no false record, misleading statement or material omission in the content of this announcement, and bear individual and joint liability for the authenticity, accuracy and completeness of the content.

l Recipient: Sun holding Company Tongling Tongfeng Precision Technology Co., LTD.

l Funding amount: No more than 80 million RMB.

l Risk tip: Tongling Tongfeng Precision Technology Co., Ltd. is still in the development stage. Whether the company can recover the funds and interest of this financial support as scheduled in the future is still uncertain. In view of the possible risks of financial support, the Company will strictly monitor the use of funding funds, actively prevent and eliminate relevant risks, and ensure the security of funds.

Anhui Tongfeng Electronics Co., LTD. (hereinafter referred to as the "Company"), on the premise of not affecting its normal operations, intends to provide financial assistance of not more than RMB 80 million yuan to its holding company, Tongling Tongfeng Precision Technology Co., LTD. (hereinafter referred to as "Tongfeng Precision"), for a period of not more than 36 months from the date of deliberation and approval by the board of directors of the Company. The details are as follows:

I. Overview of financial assistance matters

(1) Basic Information on financial assistance

Tongfeng Precision is a holding subsidiary of Tongling Tongfeng Optoelectronic Technology Co., LTD. (hereinafter referred to as "Tongfeng Optoelectronic"), a wholly-owned subsidiary of the Company, which holds 61.74% of the equity of Tongfeng Precision. Copper Peak Precision mainly produces electronic connectors and related products. Due to the high speed of connector product iteration, high investment in new product development and technology research and development, there is a large demand for capital. In order to relieve the current pressure of capital shortage of Tongfeng Precision, maintain the continuous and normal operation of production and operation, and meet the needs of future business development, the Company intends to provide financial assistance of no more than 80 million yuan for Tongfeng Precision, with a term of no more than 36 months from the date of deliberation and approval by the Board of directors. The interest rate of the funded funds shall be calculated in accordance with the borrowing rate of the Company in financial institutions during the same period, and the expenses for the use of the funds shall be separately agreed in the funding agreement. Within the limit, the Company will issue the funds according to the capital demand of Copper Peak Precision, and calculate the interest of the funds according to the actual time of use. The funds can be used on a rolling basis within the limit and term.

(II) Internal decision-making procedures for transaction performance

On February 5, 2021, the third meeting of the ninth Board of Directors of the Company deliberated and approved the Motion on Providing financial Assistance to the holding grandson company Tongling Tongfeng Precision Technology Co., LTD., agreeing that the Company would provide financial assistance of no more than 80 million yuan to the holding grandson company Tongfeng Precision Technology Co., LTD., with a term of no more than 36 months from the date of deliberation and approval by the Board of Directors. The independent director of the company has expressed an independent opinion with clear agreement on this matter. The independent director believes that the purpose of the company providing financial assistance to the holding Sun Company is to solve the working capital needed for its production and operation and future business development, to help it improve its current operating situation and to realize the return on investment as soon as possible. The risk of financial assistance provided this time is basically controllable, and there is no harm to the interests of the company and all shareholders, especially the interests of minority shareholders. The voting procedures and results of the board of directors are in accordance with relevant laws, regulations and the Articles of Association.

At the same time, the Board of directors of the Company authorizes the chairman of the Board of Directors and the Chief Financial Officer of the Company to handle the specific matters of the financial assistance, including but not limited to the approval and payment of the funds within the above quota, the signing of the loan agreement, the determination and collection of interest rate, and the signing of supplementary agreements on matters not mentioned herein.

According to the Shanghai Stock Exchange Listing Rules and other laws, regulations, normative documents, the Articles of Association and other relevant provisions, the matter of providing financial assistance shall not exceed the authority of the board of directors for approval and need not be submitted to the general meeting of shareholders for deliberation. This financial assistance does not constitute affiliated transaction, nor does it constitute material assets reorganization as stipulated in the Measures for the Administration of Material Assets Reorganization of Listed Companies.



Ii. Introduction of financial support objects

(1) Basic information about the objects of financial assistance

1. Basic information of industry and commerce

Company name: Tongling Tongfeng Precision Technology Co., LTD

Registered capital: 5410.389007 million RMB

Legal representative: Liang Changqing

Type of company: Other limited liability companies

Establishment date: March 10, 2017

Operating period: from March 10, 2017 to March 9, 2037

Business scope: R & D, production and sales of electronic connectors, auto parts and accessories, power electronic components, wire and cable components, electro-acoustic components, charging gun and its charging socket, LED support, non-standard automation equipment, metal fixtures, metal jigs, inspection fixtures and standard parts, import and export business of goods and technology. (For projects subject to approval according to law, business activities can only be carried out after approval by relevant departments)

Address: No. 399, West Section of Cuihu Third Road, Tongling Economic and Technological Development Zone, Anhui Province

2. Equity composition and shareholding ratio

The registered capital of Tongfeng Precision is 5410.389007 million yuan, of which: Tongfeng Photoelectric holds 61.74% equity; Kunshan Longmeng Electronic Technology Co., LTD. (hereinafter referred to as "Longmeng Electronics") holds 27.72% of the equity; Jiangsu Jinglian Electronic Technology Co., LTD. (hereinafter referred to as "Jinglian Electronics") holds 10.54% of the equity.

There is no correlation between the company and Longmeng Electronics and Jinglian Electronics.

3. Financial situation and other descriptions

(1) Financial situation

As of December 31, 2019, the audited main financial data of Tongfeng Precision: total assets of 136,77,800 yuan, net assets of 6,988,200 yuan, total liabilities of 12,978,600 yuan, operating income of 92,104,500 yuan, net profit of -41,895,000 yuan.

As of September 30, 2020, the unaudited main financial data of Tongfeng Precision: total assets of 157,441,500 yuan, net assets of 10,316,900 yuan, total liabilities of 14,7,124,500 yuan, operating income of 83,192,500 yuan, net profit of 3,328,800 yuan.

(2) Other shareholders fail to provide financial support in the same proportion

The remaining shareholders of Copper Peak Precision are not currently eligible to provide financial support to the company. As the shareholder Longmeng Electronics is involved in civil litigation, 27.72% of its equity has been applied for litigation preservation by Tongfeng Precision (for details, see the relevant announcement of the company on the designated information disclosure media on December 19, 2020), and it is unable to ask for financial support in the same proportion. Another shareholder, Jinglian Electronics, has issued a letter of commitment for the company, promising that if Tongfeng Precision fails to return the above funding funds as scheduled in the future, Jinglian Electronics will provide a guarantee for the funding with the equity held by Tongfeng Precision.

(2) Description of the relationship between the objects of financial assistance

Tongfeng Precision is a holding subsidiary of Tongfeng Optoelectronics, a wholly-owned subsidiary of the Company, which is included in the consolidated financial statements of the Company.

Iii. Details of this financial assistance

1. Nature of this transaction: Financial support

2. Fund use rate: The interest rate of the fund will be calculated according to the borrowing rate of the Company in financial institutions during the same period, and the interest rate of the fund will be calculated according to the actual use time. The fund use fee will be separately agreed in the fund support agreement.

3. Loan term: no more than 36 months from the date of approval by the Board of Directors. Within the scope of the quota, the Company will issue the funds according to the precise capital demand point, and the funds can be used on a rolling basis within the above-mentioned quota and term.

4. Transaction approval: The third meeting of the ninth Board of Directors of the Company deliberated and approved the Proposal on providing financial assistance for the holding Sun Company Tongling Tongfeng Precision Technology Co., LTD.

Iv. Risk control and safeguard measures of the financial support

本公司本次向铜峰精密提供财务资助系本公司为了支持其相关业务拓展的资金需求，不影响本公司日常资金周转需要，也不影响本公司主营业务正常开展。铜峰精密目前尚处于发展阶段，本公司未来能否如期收回本次财务资助的资金及利息尚存在不确定性。针对财务资助可能面临的风险，本公司将严格监控铜峰精密的资金使用情况，积极防范并消除相关风险，确保资金安全。

V. Purpose and influence of the financial assistance

Copper peak precision is an important holding company included in the scope of consolidated statements of the company, because copper peak precision is still in the construction and development stage, coupled with the company's production of connector products with high customization characteristics, product iteration speed, new product development and technology research and development investment, capital demand is large. The purpose of the financial assistance provided by the company to Copperfeng Precision is to solve the working capital required by its production, operation and future business development, to help it improve its current operating situation, so as to realize the return on investment as soon as possible.

Vi. Prepare documents for reference

1. Resolution of the third meeting of the ninth Board of Directors of the Company;

2. Jinglian Electronic Commitment Letter;

3. Independent opinions of independent directors.



This is to announce.