[Horizontal Control]
The company is going to dilute the investment process into three stages, including pre-investment, investment and post-investment, and work on risks control in accordance with relevant procedures for these three stages.
1.Control of risks before investment
（1）Formulate strict and clear investment standards.
（2）Conduct deep and thorough due diligences.
■Due diligences on business and industry of the invested company.
■Financial due diligence.
■Legal due diligence.
■Other due diligence.
■Negotiation on valuation.
2.Control of risks in our business
（1）Process of investment decision-making.
（2）Introduction of terms on risk control.
■Multi-layer warrants.
■Perferred Stock.
■Valuation Adjustment.
■Performance Rachet.
■Repurchase Agreement.
■Post Investment Activities.
[Vertical Control]
1. Risks control in single project
(1) Segmented investmen.
(2) Share ratio adjustment.
(3) Contract constraints.
(4) Remedy of breach.
(5) SIP(Stock Incentive Program)/ESOP(Employee Stock Ownership Program).
2.Risks of project selection and its control
