In practice, after the capital contribution made by the group, it will be fully recovered in principle except for the necessary working capital reserved for each subsidiary. At the beginning of opening a bank account, each subsidiary has granted the Group the right to inquire and transfer the funds in the subsidiary account, and the funds of the subsidiary will be transferred to the special fund account established by the Group at a specific time every day.
The Group will allocate necessary daily operating funds according to the needs of subsidiaries' own operations and cooperation with external institutions. The specific process is that the subsidiary estimates the amount of funds needed for production and operation activities in advance by compiling the capital budget, and submits the budget report to the group. After the approval of the group, the funds will be transferred back to the bank account of the subsidiary to meet the production and operation needs of the subsidiary. There is no need to pay interest to subsidiaries during the period when the Group collects and manages the funds of subsidiaries. However, when a subsidiary borrows money from the Group, it generally needs to pay interest at the fixed interest rate stipulated by the Group.