*ST Kerry Reply: A Total Of $165 Million Guarantees For External Violations.

In September 6th, *ST Kerry released a reply to the Shenzhen stock exchange's 2019 semi annual inquiry letter.

1, according to the semi annual report, the company has violating the guarantee for Chuang Yue Energy Group Co., Ltd., Xinjiang de Mian Mining Co., Ltd. and the fifth quarter international Klc Holdings Ltd and other companies. The total amount of violation guarantee is 214 million 716 thousand and 200 yuan, and the balance of the outstanding breach of guarantee as at the end of the reporting period is 164 million 716 thousand and 200 yuan.

Add to the following matters: the specific circumstances of the above violation guarantee include, but are not limited to, the guarantee amount, date, guarantee period, the company's performance of the review procedure and information disclosure obligations. If there is any violation, please explain the company's internal accountability and responsibility recognition.

Company reply:

1. The company's breach of warranty against Chuang Yue Energy Group Co., Ltd.

In January 5, 2015, Hangzhou Dong Gen Jia Shan investment management partnership (limited partnership) (hereinafter referred to as "Hangzhou East gen") and Chuang Yue Energy Group Co., Ltd. (hereinafter referred to as "Chuang Yue energy") signed the loan agreement. Chuang Yue energy borrowed 130 million yuan to Hangzhou East gen, for a period of 10 months. 黃允勤、呂玉緣、秦勇、馮健、凱瑞德、吳聯模為協議項下借款提供連帶責任保證，擔保期限為2015/1/5至2015年11月5日，該擔保未經董事會、股東大會審批通過，系違規擔保及對外披露，后因創越能源未能及時償還上述借款，杭州東艮向杭州市中級人民法院起訴創越能源以及上述擔保方，杭州市中級人民法院判決創越能源于判決生效之日起十日內返還杭州東艮借款金1.3億元，并支付拖欠的借款利息8750136.98元(暫計算至2015年10月28日，從2015年10月29日至借款付清之日止的借款利息，以欠付借款金數額按照年利率12%的標準另行計算);創越能源于判決生效之日起十日內向杭州東艮支付借款罰息、違約金8707397.26元(暫計算至2015年10月28日，從2015年10月29日至借款付清之日止的借款利息，以欠付借款金數額按照年利率12%的標準另行計算);公司及上述擔保方作為被告對創越能源的上述 The first, second payment obligations and the relevant costs and obligations of the next case shall be jointly and severally liable. Up to now, the total amount of external guarantees mentioned above is 80 million yuan.

Second, the company's violation of the guarantee of Xinjiang de cotton Mining Co., Ltd.

A, the company signed the "iron concentrate trade cooperation agreement" with the Xinjiang branch of China Electric Construction Group Leasing Co., Ltd. (hereinafter referred to as CLP Group) and Xinjiang de cotton Mining Co., Ltd. (hereinafter referred to as "Xinjiang cotton").

In December 30, 2014, CLP signed a "iron concentrate trade cooperation agreement" with Xinjiang de cotton. After the signing of the agreement, the CLP Group and Xinjiang de cotton signed four contracts for the purchase of industrial and mineral products in December 12, 2014, January 18, 2015, February 12, 2015 and March 16, 2015 respectively. Kay Reed guaranteed the above five contracts with the maximum amount of 20 million yuan, and the guarantee period was from December 30, 2014 to December 30, 2014. The above guarantee was not approved by the board of directors and shareholders' meeting, and it was a guarantee of violation and external disclosure. After the failure of Xinjiang de cotton to fulfill the relevant obligations of the contract in time, the CLP Group sued Xinjiang de Mo and Kerid to the court, and Kerid was jointly and severally liable in the range of 9729979.75 yuan. After assuming responsibility, Kerid Cmi Holdings Ltd has the right to claim compensation from Xinjiang de Mian Mining Co., Ltd.

B, the company signed a contract for the sale and purchase of solar energy components due to Sichuan Hongye Construction Co., Ltd. (hereinafter referred to as "Hongye company") and Xinjiang de Mian Mining Co., Ltd. (hereinafter referred to as "Xinjiang cotton").

The total amount of guarantee for external violation is 164 million 716 thousand and 200 yuan. In view of the fact that the above case is irrelevant to external guaranty and is involved in complicated cases, it is sorting out and defining responsibilities. After the lawyer is combed, the company will deal with it according to the lawyer's combing situation and the company's internal accountability system.

Does the company comply with the principle of prudence in terms of whether the relevant accounting treatment is in line with the provisions of the Accounting Standards No. thirteenth - contingencies?

Company reply:

Considering that the above violation guarantee has not gone through the company's internal deliberation procedure and the case is more complicated, the company has not dealt with the proceedings in the above proceedings. The company is currently hiring a professional lawyer team to sort out it. After the lawyer combed and clarifies the case, the company will communicate with the accountant on the basis of the lawyer's combing situation to deal with the concrete accounting.